SUPV

Good morning, and welcome to Grupo Supervielle's Second Quarter 2026 Earnings Call. I am Ana Bartesaghi, Treasurer and IRO. Today's conference call is being recorded. For the Q&A session, please ensure your full name appears on Zoom. You can ask questions by voice or through the Q&A chat box. Speaking today are Patricio Supervielle, our Chairman and CEO, Gustavo Paco Manriquez, CEO of Banco Supervielle, and Mariano Biglia, our CFO. Diego Pizzulli, CEO of invertironline, will also be available during the Q&A session. Before we begin, please note this call may include forward-looking statements. Please refer to our earnings release and SEC filings for further details. Patricio, please go ahead.

Thank you, Ana. Good morning, everyone, and thank you for joining us today. The second quarter marked our return to profitability and further progress in transforming Supervielle. Most importantly, the changes to our operating model are beginning to translate into a structurally lower cost to serve. The rightsizing program is now largely implemented and aligned to our current operating model, reflecting the full quarterly salary savings already secured. Structural return on average equity would have reached 14.4%, illustrating the earnings support provided by our leaner operating model. Our core earnings also improved. Margin benefited from funding costs declining faster than asset yields. Asset quality indicators continued to move in the right direction, with NPL formation declining for a second consecutive quarter and cost of risk improving sequentially.

While credit costs remain elevated, these trends reinforce our view that the peak is behind us and our collection, refinancing, and underwriting initiatives are beginning to produce results. With ARS credit demand still subdued, we continue to prioritize risk-adjusted returns over volume, while actively managing our funding mix and maintaining a strong liquidity position. We also made further progress across our ecosystem. The partnership with Aerolíneas Argentinas is one example of how we are strengthening the value proposition for Identité customers. At IOL invertironline, assets under custody reached $3 billion, reflecting continued traction with higher-value clients and deeper investment relationships. Overall, we enter the second half with a structurally leaner platform, improving credit trends, and a stronger foundation for disciplined, profitable growth. Paco and Mariano will expand on this shortly. Let me turn briefly to the macro backdrop to put our second quarter performance in context.

Conditions became more stable during the quarter, with sustained FX purchases since the start of the year moving net reserves into positive territory. Interest rates remain broadly stable, contributing to lower funding costs and margin recovery, while monthly inflation declined for three consecutive months. However, greater stability has not yet translated into a broad-based recovery, and peso credit demand remains subdued. Policy momentum is improving visibility, with structural reform supporting a more predictable macro environment and reserve accumulation reinforcing FX stability. Argentina is undergoing a transition toward an export and investment-led growth model. 21 RIGI projects have been approved, representing approximately $47 billion of planned investment, primarily in energy, mining, and infrastructure. This should create attractive financing opportunities across the broader value chain.

Greater visibility of the government's financial plan for sovereign debt maturities in 2026 and 2027 has also reduced near-term refinancing uncertainty. Nevertheless, the recovery remains uneven. Looking ahead, continued progress will depend on consistent policy execution and further strengthening the institutional framework. Maintaining fiscal discipline, advancing monetary normalization, and gradually removing remaining FX restrictions will be essential to reinforce confidence and contain volatility. Overall, the direction is constructive and should gradually support credit demand and asset quality. Supervielle enters this phase with gradually improving credit trends, a structurally leaner platform, and solid capital formation. Paco will now discuss how the bank is positioning itself to capture this opportunity through disciplined, profitable growth. Paco, please go ahead.

Thank you, Patricio, and good morning, everyone. Turning to slide five, I will focus on how we are managing the bank today and where we see attractive growth opportunities for the second half. On the balance sheet, prudence remains our priority. Peso loan demands were soft, and with system delinquencies still elevated, we choose not to chase volume. We maintain selective origination, grew transactional deposits across retail and corporate clients, and actively manage the funding mix. As margin normalizes, every new loan must continue to meet our risk-adjusted return thresholds. On asset quality, delinquency and cost of risks improved sequentially, although both remain elevated. The collection, refinancing, and customer outreach initiative launched in December are producing early results, while recent origination cohorts are performing meaningfully better. We will maintain this discipline as we gradually rebuild lending. On structural efficiency, the rightsizing plan is largely completed.

It reflects the work we have been doing for some time to redesign the service model without compromising service quality. Annualized personnel savings are approximately ARS 42 billion, with the full quarterly run rate benefits starting in this third quarter. Turning to growth, our focus is on expanding the loan portfolio profitability through a targeted rather than broad-based approach. In retail, we are focused on expanding and deepening relationships across three priority segments: payroll, Identité, our premium offer, and senior citizens. Our enhanced scoring capabilities allow us to identify the stronger customer and serve more of their transactional saving and credit needs through tailored products. In corporate banking, the strongest opportunities are in Vaca Muerta mining and selected regional economies, where activity in more dynamic and US dollar loan demand remains strong.

On partnerships, we recently reached an agreement with Flash Argentina, a company that originated within the Mercado Libre ecosystem, through which we will finance person-to-person vehicle transactions listed on Mercado Libre starting in the fourth quarter of the year. In short, we are combining a learner operating model, disciplined balance sheet management, and sharper customer selection to resume growth where we see good credit behavior and compelling economics. With that, I will hand the call over to Mariano, who will discuss our financial results and updated guidance. Thanks.

Thank you, Paco, and good day to everyone. Turning to slide six. Attributable net income turned positive, reaching ARS 13 billion in the second quarter, a swing of more than ARS 31 billion when compared with the loss of ARS 18 billion in the first quarter. Excluding ARS 23 billion in after-tax extraordinary severance charges, adjusted net income reached ARS 36 billion, with adjusted ROE of 12.4%. The sequential recovery was driven mainly by stronger net financial income, lower inflation adjustment, and improving credit costs. Together, these factors more than offset softer fee income and modestly higher adjusted operating expenses. Slide seven takes this analysis one step further by illustrating the earnings capacity of our streamlined cost base.

After incorporating a full quarter of salary savings from the rightsizing actions of the second quarter, structural net income would have reached ARS 42 billion, equivalent to a structural ROE of 14.4%. Applying the same framework, structural net income for the first half would have totaled ARS 53 billion. The program reduced our workforce by 553 employees during the first half, including 262 in the second quarter. With these actions now completed, the structurally lower cost base should support continued improvement in efficiency and profitability. Turning to slide eight. Total loans declined just over 1% sequentially and increased nearly 9% year-on-year. Commercial lending edged higher, supported by US dollar loans, which grew 6% in original currency. Retail loans, in turn, declined 2%, reflecting still soft demand and our selective approach to origination.

As Paco discussed earlier, we expect retail growth to rebuild gradually as inflation declines, while maintaining disciplined credit criteria and a balanced, profitable portfolio mix. Turning to asset quality on slide nine. Our NPL ratio improved 10 basis points sequentially to 5.5%. Meanwhile, the financial system ratio deteriorated 60 basis points to 7.6%, placing our ratio 210 basis points below the industry. Quarterly NPL formation declined for the second consecutive quarter and was approximately 20% below the fourth quarter peak, with retail formation down 21%. Net cost of risk eased to 5.6% from 6% in the first quarter, reflecting the early benefits of our collections and refinancing initiatives, together with disciplined risk-adjusted origination. Importantly, recent origination cohorts continue to perform meaningfully better. Together, these trends reinforce our view that asset quality has entered a gradual improvement phase. Turning to slide 11.

Net financial income reached ARS 295 billion, increasing 8% sequentially. Net interest margin expanded sequentially by 250 basis points to 20.3%, above our full year guidance, as funding costs declined faster than yields on interest earning assets. Now, moving on to the outlook for 2026. We are updating our expectations to reflect first half performance and normalizing operating conditions. On loans, we are lowering real growth expectations to between 10% and 15%. This, however, is a pickup from the 7% decline experienced in the first half, driven by the initiatives Paco outlined. The mix remains skewed toward corporate lending, with retail growth expected to resume as activity, employment, and disposable income improve. We are also raising our NIM guidance to a range of 17%-19%. First half NIM of 19.7% benefited from the declining in funding costs, while lag asset repricing could weigh on margin in the second half.

As shown on the next slide, we now anticipate net fee income to decline between 5% and 8% in real terms, as softer activity weighs on banking fees. Adjusted operating expenses are now expected to decline between 6% and 4%, a greater reduction than anticipated, reflecting our successful headcount rightsizing plan. We are now tightening our reported ROE expectation to between 2% and 4%, consistent with the larger-than-originally anticipated headcount rightsizing. Excluding extraordinary severance charges related to the efficiency program, adjusted ROE is now anticipated to range between 8% and 10%. Importantly, this range does not yet reflect the full benefit of the ARS 42 billion in annualized salary savings, which will support the underlying cost structure into 2027. Finally, we are raising the CET1 guidance to a range of 12%-14%, following softer loan growth. All other outlook metrics remain unchanged.

This concludes our prepared remarks. We are now opening the floor for Q&A.

Thank you, Mariano. At this time, we will be conducting the Q&A session. As a reminder, to ask a question, you need to be connected to a Zoom platform. To ask a question, please press the Raise Your Hand button, and press it again to withdraw your question. You can also send your questions in written form via the Q&A box. We will ask you to limit yourself to one question, a follow-up, and then you can raise your hand again. The first questions come from Camila Severo with UBS. Camila, please go ahead. Sorry. Sorry, we are having issue. Sorry, because we are not able to allow some of the micros.

No.

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No.

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Hi, Camila, can you hear us?

Yes. Can you hear me?

Yes. I am so sorry, all of you.

No problem.

Some IT issues. Thank you, Camila, again. Please go ahead.

No problem. Thanks, everyone, for the space for question. I have a question on the profitability and efficiency. The efficiency ratio improved to 63%, but would have been close to 52%, excluding extraordinary severance charges. When does the company expect the full run rate benefit of the ARS 42 billion in annualized personnel savings to be fully reflected in the reported efficiency metrics? In profitability, given that the structural ROE reached 14%, how does management expect this trend to continue throughout the year? What specific milestones should be met to sustain this recovery? Thanks.

Mariano, do you want to answer this? Maybe a compliment afterwards.

Sure, Patricio. Hello, Camila. Thank you for your question. First, regarding efficiency and the capitalization of the saving cost from the retirement plan, we will start capturing the full benefits of this plan on the third quarter, as we largely finished the plan as of the end of the second quarter. So those savings that we quantified as if they were captured on the first half of the year, they will be already captured in the reported HCNA and the reported net income in the third and fourth quarter of this year. So the reported adjusted efficiency for following quarters will be the same or almost the same. Of course, it will be much lower than on the first and second quarters of the year.

Regarding ROE, as you said, and we showed on the presentation, the adjusted ROE when we exclude severance costs, but we also account for the savings, as if we had made the efficiencies from the beginning of the year or beginning of the quarter, the adjusted ROE would be 14.4%. For following quarters, as I mentioned, we will continue capturing the benefits of this head count reduction. But also, on the other side, we think margins will be more pressured on following quarters, because on the second quarter, we saw a decline in the funding cost, which we capture very well to increase the NIM on our loan portfolio and also on the investment portfolio.

Going forward, we will also see pressure on the asset side of interest and in assets. So the NIM we saw in the second quarter, maybe will be lower, going ahead. So that will partially offset the benefits of cost savings, and ROE for the second part of the year will be maybe higher than on the first half, but lower if you only take the annualized second quarter. So that is why we gave a guidance of an ROE closer to 10% for the full year, adjusted.

Just to complement and to give some context on the operational side and looking into the future, we conducted a very successful efficiency program, this voluntary retirement program. This didn't produce any type of disruption. NPS continues to improve. Productivity is becoming higher. Basically, the efficiency agenda is permanent for us. We will continue to look in the future for opportunities to improve our cost to serve. But you should not expect another step change of the magnitude we delivered in the first half of this year.

That is super clear. Thanks very much.

Thank you, Camila. Our next question comes from Ernesto Gabilondo with Bank of America. Good morning, Ernesto, please go ahead.

Thank you, Ana. Hi, good morning, Patricio, Paco, and Mariano. Congrats on your results, and thanks for the opportunity to ask questions. My question is related to your loan growth expectations, but for next year. This year is expected to be between 10%-15%. You were expecting above 20% before. I believe this is not specific for Grupo Supervielle, this is more for the industry. How should we think about loan growth next year? I do not know if you have started to participate in the financing of the RIGI projects. Are you already perceiving the announcements of the RIGI projects taking place? You mentioned these 21 projects, so are they already taking place? If you think this will be more tangible after the presidential elections next year. Again, all to understand loan growth trends for next year. Thank you.

I will give you first the more short-term answer. Yes, the guidance is 10%-15% for the full year. At this stage, we are coming off from a minus 7%. This implies a meaningful growth in the second half. This is not a forecast. That depends on broad macro pickup. We are counting on fourth quarter surge in demand across a series of initiatives that we control. First one is, we completed a disciplining asset quality work in the first half, so we know who are the good clients, and which are healthy. That allow us to conduct targeted campaigns on our better-performing retail segments. Second, we continue, and this is also maybe an answer to your ready question.

We continue to focus on the dynamic sectors of the economy, including export industries, mining, energy, and all the value chains around them, where dollar loan is real and growing. Third, we also have specific initiatives that we are launching in this quarter. Particularly, Paco mentioned Flash. Flash is a new company that was born in the Mercado Libre ecosystem, which is a P2P financing auto loans. On the retail side, more broadly, demand, we will need inflation to continue declining and disposable income to continue improving. That happening, and gradually we expect retail growth to build progressively rather than surge. Our guidance for this year is what we can reasonably see and where we can act upon.

Regarding next year, I think the business climate will definitely, on the agenda, of the RIGI agenda, it is going to be a major change in. We already, the country has record export this year. I think next year, the trend will continue in this sense. So there will be lots of opportunities to finance the value chain of these dynamic industries. I am hopeful and, I am optimistic that this will also reflect on the retail side, with more, let us say, a better appetite for credit demand on the retail side. Of course, we will be entering an electoral year and, this will also probably affect everything. But, we are optimistic. I think 2027 will be a very good year.

Can I say something, Patricio?

Yeah.

[Non-English content] Ernesto good morning. How are you? All we know about the situation that we had in the first semester in term of delinquency, in term of loan growth. Looking forward, the growth we are targeting in the second half and for the new year comes from our better performing retail segments. Also, we made significant adjustment in our credit scoring models. We are believing that we have in place a very good score. Also, the organic growth will come from strategic sectors, energy, oil and gas, mining. As you mentioned about RIGI, basically we support all the value chain for the main region projects. It's basically our targeting, it's our size for the bank.

We are entering a new semester with the confidence that we have in place a new credit score, and also the customer knows better their own payments and behavior. We are looking forward very well.

This is super helpful. Thank you very much, Patricio and Paco. Just, all of the RIGI projects that are taking place, Supervielle will look to finance all the value chains. Do you think this will be more visible in 2027, maybe after the presidential-

Yes.

-election, removing the uncertainty, and that is when we will see more tangible all these projects.

Yes. 2027, we will see something. Then of course, due to the election during October.

Perfect.

But yes, Ernesto, our target is the value chain of those RIGI projects. Basically, it is our target and our business proposition goes there.

Perfect. Thank you very much, Paco.

No more.

Thank you, Ernesto. Our next question comes from Pedro Leduc with Itaú. Good morning, Pedro. How are you? Please go ahead.

Hi, Ana. Hi, everybody. Thank you very much for the call. Congrats on the numbers. I would like to discuss a little bit about your NIMs, now at 24% this quarter. Very nice improvement. We know there were some unusual aspects about this quarter, but anyway, would like to pick your brains a little bit on, how do you see this level going forward? And trying to puzzle it together as well, looking at it from a funding cost perspective, it was a nice improvement, but your mix in funding seems to have shifted a lot with institutional time deposits gaining a lot of share. I would imagine that they are not cheaper than the retail deposits, but maybe more duration. So help us reconcile a little bit, this funding mix shift with the better NIMs and, how we should model it in the second half. Thank you.

At a high level, what you saw in the Q2 was active funding optimization, where we adjusted both mix and the tenure of our funding to take advantage of relative pricing, while our strategic focus is always on growing franchise deposits that remain unchanged. Mariano, maybe you can take us through the details of this funding strategy, and then how this also translates and how do you reconcile also into ROE and sustaining the needs.

Sure, Patricio. Hello, Pedro. Regarding the deposits mix, as Patricio said, we see a shift, but it is mainly from corporate, institutional deposits, not from retail. This is mainly tactical, as we want to be more efficient on the cost of fundings. If we go to institutional, it is because we see the lower cost of funding. Maybe compared to the largest corporates. This is not a reduction in SMEs balances, deposits, or retail, as I said before. The same way we transition, which is tactical, we may transition back corporates, and we don't change our strategy of gaining deposits from our core customers, both retails and corporates. How this translates into NIMs and what we see going forward, we saw a very good NIM in the second quarter, which translated into good figures of ROE when adjusted for severance costs.

This level of NIM was achieved by capturing the lowering the cost of funds. This also relates to the deposit NIMs and tactical movements. That allowed us to increase spreads for the loans and our investment, our bonds portfolio. Seeing into the third quarter and the second half of the year, we see that interest rates will remain stable, and now we have a repricing on the asset side, too. NIMs will be more pressured, as I also explained before, in the second half of the year. Maybe the NIM for the second half will be a bit higher than the first half of the year, but lower if we only see the second quarter on annualized terms.

To complement, if you look at our balance sheet, on the loan balance sheet, almost 65% today is corporate, and 35% is retail. Clearly, this has to do with the macro context and the subdued demand on the retail side. As I mentioned before, we know now with all the procedures we have in place, strong underwriting standards and the history of our own clients, we know where to target. We are conscious that we want to grow on the retail side, but very responsibly, in order to help NIM looking forward.

Great answer, both. Thank you.

Thank you, Pedro. We have a question now from Yuri Fernandes with JPMorgan. Good morning, Yuri.

Hey, Ana. Good to see you. Hello, everyone. Also congrats on the quarter. I have a follow-up on the NIMs, because I got the impression from the Leduc answer that maybe second half could be better, but your guidance points to 17%-19%, the consolidated margins. If we were to assume the run rate you had in the first half, closer to 20%, that would indicate a major drop on margins. So what are we missing here on the NIMs? Should it go down in the second half, or should it remain, should be more resilient? Just trying to understand, because I think the guidance indicates 17%-19% on the margins, so this implies in this drop. Then I can follow up. Thank you.

Yes. Hello, Yuri. Yes, that is right. Our guidance for NIM from 17%-19%. This implies a lowering the NIM in the following quarters when compared to the second quarter. If we look the first six months of the year, maybe we will see different dynamics for the second half, because on the first half, we started with very high interest rates and a lot of volatility, which negatively impacted the NIM. We are not expecting that scenario to repeat on the second half of the year. Maybe it will be higher than that first quarter and lower than the second quarter. Not necessarily, I will correct that, and not necessarily higher than the first half of the year, but it will have different dynamics. We do not expect that high volatility and a significant reduce in the funding costs.

It will be more stable, but on the average of the semester, in a similar level.

Okay. No, clear. If I may, just similar exercise, but with cost of risk and asset quality. Congrats, I think NPLs are improving. The new NPL formation is improving. I have just a follow-up on coverage, if you can provide any kind of color. Similar exercise as margins on cost of risk, because if you take the guidance of cost of risk of 5.3% and 5.8%, and we plot the run rate of the first half, it implies a very broad range on the second half. It should run between 4.8% cost of risk and 5.8% cost of risk, right? This quarter has been tracking around 5.6%. Where should cost of risk be?

Should it be closer to the low end of this kind of soft guidance, or should we see maybe still a challenging outlook for asset quality and cost of risk be a little bit higher? Thank you.

Well, the cost of risk, we also saw there an improvement in the second quarter. We expect to see further improvements for the third and fourth quarter. We still are in an environment where we saw a peak in the NPLs, and that translates also into lower loss provisions and lower cost of risk. But we are still in a period where mainly the SMEs, who are the ones who suffer on the first half of the year. Individuals was the last part of last year, and that's when we changed our credit policies and reviewed our credit models.

SMEs who are more impacted. For the second half of the year, we expect that to improve gradually and also to resume growth, as Patricio explained before. That will also help to lower the cost of risk. But we expect to see those dynamics, not much lower than 5%, although it might be helped by growing on the corporate side. But when we resume growth also on the retail side, it will be more impacted. So on the average, we expect it to be within the range of 5.3% and 5.8%. Of course, we expect it to be on the lower part of that range. But still, with the visibility that we have, it's the range that we can give guidance.

Yes. I'm sorry, maybe if I may add, we decided not to change the guidance for these two metrics this quarter, Yuri, mainly because NPLs and cost of risk is still high. But yes, maybe we could be expecting something to be more close to the lower end, but still very high levels. So that's why this is maybe one of the only metrics we have not changed this quarter to be a bit more conservative.

No, thank you, Ana. Thank you, Mariano. So basically, just summarizing the two things for risk-adjusted margins, maybe not as strong as this quarter, but you're very confident on the level of margins. They will not be as low as the first quarter, so something in between or maybe closer here. Then cost of risk, didn't revise the guidance, still challenging outlook, but things are slightly improving, so maybe the low end of the guidance of the 5.3. Does this summary make sense? Did I get the message correct, Mariano?

Yes.

Yes.

It makes sense. Maybe we should have changed to be more optimistic. This is what the management thinks, but I am more optimistic. We will see in the next quarter. We expect that it will improve the cost of risk.

No, thank you, Patricio. It's Latin America, right? Argentina. Sometimes being conservative is the right approach. Thank you very much, everyone.

Thank you, Yuri, for being here. Our next question comes from Pedro Offenhenden from Latin Securities. Hello. Good morning, Pedro.

Hello, Ana. Hello, everyone. Thank you for taking this call. I wanted to ask on dollar lending, it's kind of 20% up here today. I wanted to ask how much runway do you see in this segment, and maybe to link it with recent news that you see maybe in the press saying the governments want to attempt to change some regulations to allow banks to channel more of this dollar liquidity into credit. What do you think about that? Is there room to do it?

Certainly for individuals, this will not happen. Dollar loans for individuals, it will not happen because I think even the president of the central bank was clear on that. There has been very bad precedent or examples, I think, in the Peruvian economy, when they tried. On corporations, I think that there is a possibility that some corporations that even though they are not exporters or suppliers to exporters, but they have strong business models, many of which also are linked to or they are valued by dollars, the way they manage the business, then certainly there could be more demand on these new companies for banking system. We will consider it also. Definitely, we will consider it. Because the landscape of the country is improving. We are, at this stage, in a record, never seen this type of exports in the country.

Dollars will be flowing, and next year, I think it's going to be even better. On this side, you also see the current account of the economy is in good shape. I think there's a possibility. It's certainly in the agenda to start to lend to more companies dollars. I don't know.

Give me one.

Yeah.

Give me one minute. Hola, Pedro. Thank you for your paper this morning. For me, if Argentina continue with the focus on the strategic projects supported by strategic resources, I believe there is no limit for US dollar loans. We have a big space for that, and as you know, we have a huge initiatives going forward. For me, in order to dig in the strategic projects, I don't see a limit in the near future. The opportunity and the room is very big.

Perfect. Super clear. Thank you, Paco. Thank you, Patricio.

[Non-English content] Pedro.

Thank you, Pedro. We have a question now from Carlos Gomez-Lopez with HSBC. Hello, good morning, Carlos.

Hello and good morning, and congratulations, among other things, on your deposit growth, 8%. That was quite good. Two questions. One is regarding the margin. You expect the assets to reprice in the second half following the repricing of the liabilities. Does that apply to individual loans or mostly to corporate loans? Have you already seen by now, the end of the middle of August, a decline in spreads, either for corporates or for individuals? Second, I would like to touch on IOL invertironline. I was looking at the numbers on page 10 of your report. I see that the number of accounts has actually declined slightly, and the income has actually halved until quarters ago. We understand this is cyclical, but we would like to know what your prospects are for this business to grow in the future. Thank you.

All right. Do you want to answer the first part?

Sure. Hello, Carlos. Thank you for your comments and your questions. Regarding the first part of your question, margins or the NIM is starting to be more pressured because of asset repricing, mainly on the corporate side. On the retail side, we have longer-term loans, such as personal loans, car loans, and we were more restrictive on origination. Due to the increase in delinquency, interest rates haven't been reduced as much as the cost of funding reduced. On the corporate side, which are more short-term loans, and it's almost two-thirds of our loan book, that's where we see the effect of this repricing. Yes, we are seeing it since the end of the second quarter. We see it on a month-to-month basis and into the third quarter. The spreads on originations haven't been reduced. They are still the same.

They are good spreads, adjusted for risk, both for corporates and individuals. From a balance sheet point of view, the repricing is faster on the corporate side. The second part of the question.

Yes. Hi, Carlos. Regarding invertironline, something we experienced is that the decrease in activity in MAUs, monthly active users, in the 90 days active users, is due to a normalization in Argentina. In our business, when there is some volatility and economic volatility, and it can affect volatility, some high inflation or even volatility in the interest rates, we see a sharp increase in the activity and opening accounts in IOL. We are comparing second quarter to first quarter. In the first quarter, especially in January and part of February, we have some volatility in the interest rates market, and that drove an unusual activity. What we think or we see is that the underlying trend is a more stable macroeconomic environment.

The numbers or the growth or the activity we see in the customers, especially during the second quarter, it's more like the normal situation in Argentina, where interest rates is lower than it was in the past and with less volatility, the inflation is going down, and also the effect is under control. We think what we see in our platform is customers are staying in the platform are less active, and they are shifting the behavior in the platform. They are, from capturing short-term opportunities like this one I mentioned with the interest rates, they are starting to shift to a more investor-oriented investments. And we think for the long term, it will make our business more sustainable. Also, we think it's a good thing because we are optimistic about the future in Argentina with the stabilization of the macro and the opportunities to the capital markets.

We think that the nature of a broker is to be the place for investors to analyze their savings and investments. And we think that what we are seeing is a more normal behavior that's kind of new in Argentina comparing to the last years.

If I might complement, if you just see what happened in the first half of the year, the assets under custody for invertironline, and as well as the assets under management for funds has grown considerably. And this is not simply revaluation of assets, but it's new money. It's new money coming from, three types of clients that we are focusing on: affluent enterprises and also IFAs. This change of behavior of investors that Diego mentioned is translating into more assets for invertironline. I think this is very healthy and hopefully it will continue.

Okay, that's a very good explanation. What do you think the long-term growth rate for this business might be? You have, what is it, I think, 60,000 accounts right now. Where do you see yourself in three or five years?

6,000.

600,000.

600,000. Sorry, I took a zero off. Yes.

That's a very good answer.

We believe that the number is very good compared, because we are roughly in the same amount of accounts active that we have in last periods where volatility was higher. That is why I said that we are not seeing customers leaving. We are seeing them shifting. We believe that, with normalization in Argentina, probably a 10%-15% growth quarter-over-quarter would be reachable. Also, I think we have to start to look into the AUC and AUM, as Patricio mentioned, because the activity when you have investors instead of customers trying to capture short-term opportunities will be perhaps lower, but the AUC and the AUM in our asset management business will be growing, and that is the real metric we have to look to see the health of the business.

Something I did not mention before, but we launched our asset management business one year and a half or two years, and now we are close to ARS 500 million in AUM in our three funds that are managed by our team. That is part of what we are focusing on, and the AUC, as Patricio mentioned before, is growing also, and not because of a market effect also, but a net new money we are seeing in every quarter.

Thank you so much.

Thank you, Carlos. I think we are running out of time anyway. I think there is some question from a sell side analyst, Brian Flores, who asked, "Which are your expectations in terms of return on equity and loan growth for 2027? What is needed in your view for loan growth to take off and be sustainable? Is there any regulation or partnership with the government that could further drive growth ahead? Or is it more dependent on organic demand supply trends?" Maybe this is, the rate, I think, have been already answered. Then I will go back to someone, another sell side, which has raised his hand. We answer this one, and then we end with the ones on Federico.

Maybe we can answer it both, Mariano and I. Let me address the last part in terms of partnership or regulation with the government. I think that there is an important or pending agenda on mortgages or securitization. The banking industry has been advocating for a broader role for the FGS, el Fondo de Garantía de Sustentabilidad, which is the Social Security or what remains of the previous AFJP base. This would help develop a securitization market for newly originating mortgages, drawing on models such as Peru, Chile, or Fannie Mae or Freddie Mac. So definitely, this is an agenda that is very important. Also, in terms of growth expectations next year, definitely, as Paco mentioned, we have a complete focus in export-end industry. We have commercial specialists that are dedicated, for instance, for oil and gas. We have expanded considerably our commercial team for these industries.

We also have people on the risk side dedicated and specialized in these new industries, just to give you an example of the focus we have. So export financing and value chain financing will be an important agenda for 2027. In terms of the retail side, it will depend on declining inflation, it will depend on improving disposable income. But I am optimistic that eventually it will be a good year, 2027. I do not know if you want to add something on that.

No, I can complement about the 2027 ROE. In effect, that loan growth will be a driver of ROE improvement for 2027 because, as I said before, for the second part of this year, we know margins will be more pressured. Going into 2027, we expect to offset that with loan growth and with the growth of the loan book, also a more balanced book between retail and corporate, thus improving the NIM and impacting positively on the ROE, where on top of that, we will also capture the full benefits of the right sizing program that we carried out this year for the first half, and also reducing the cost of risk. So those will be the main drivers.

We still have not given a guidance for 2027, but if we end the year 2026 on our range closer to 10% ROE, we would expect that 2027 to be closer to 15% and transitioning into a longer-term ROE of more than 15%.

Okay. There is a question from Federico Cabelli from Adcap. Hello, Federico. Please go ahead. Then we have a follow-up from another analyst.

Hello, everyone. Thanks for taking my question. I had a question regarding IOL. We have seen, as you mentioned, your assets under custody grow considerably year-over-year, yet your net income has decreased. I want to ask, how have you been monetizing this growing base, and how do you think normalized earnings for IOL should look in the future?

Regarding the net income, part of the growing in AUC, AUM, as you mentioned, it is part of a more sustainable business, but it is less profitable like periods where high volatility, where people operate more and with high margins. Part of on the side of the revenue, it is the shift between high transaction and high profitability to a more stable and long-term business with less margin, but more sustainable. That is on the revenue side. On the cost side, we made some investments that we expect to be generating revenues and profits in the next quarters. But mainly to serve these customers, as Patricio mentioned before, that for us are the core for our next year, that it is developing our business in all the advised business like IFAs, the wealth management, and also the SMEs.

We have made some investments in our platform to adapt new products and services for these kind of customers, that are kind of different than the ones we have for retail investors. Also we hired, we have some increasing headcounts, mainly advisors for this business. Those were the two effects that were in place. But we think that the investment is not only paying off in the short term, but will be, in the future, a good investment to a more sustainable business. Keeping in mind that we think that the stabilization and normalization, the economic variables in Argentina will allow the capital market in Argentina to expand. We think it is in its infancy, so we think we are doing the right investments to capture that opportunity that will come in the future.

Okay, thank you. I have a follow-up question. You paid for IOL $48 million in 2018. What is the book value today?

Book value. Book value is more or less a bit more than that, I think.

Yes, we also have the goodwill.

Yes.

Included in our book value. But including the price paid for at that moment, was mainly a goodwill, which we booked in pesos. We translate that to pesos at the moment, and then we adjust for inflation. Then we have the shareholders' equity of invertironline, which accumulated profits throughout this year. So it has a higher equity value on a standalone basis. So adding up the equity value and the goodwill, adjusted for inflation, the total book value in the group's balance sheet is around, I would say, $70 million.

The equity is close to the same amount. The equity value, so net worth.

The net worth. Yes, but it's because of accumulated profits.

Yes, sure.

Okay. Thank you, and congratulations.

Thank you, Federico. We have a follow-up from Pedro Leduc from Itaú. Pedro, you wanted to ask any- Follow up?

Yeah, just a quick one, not particularly related to the quarter, but there's been several media reports in Argentina about the authorities considering flexibilizing the use of dollar deposits onto lending. I think you heard me?

Yes, I did. I'm sorry.

Yeah. If there was any first thoughts you have on that, if more of the dollar deposits could be used to lending, and I'm sure you are also close to the regulators, so how that discussion has been unfolding. Any first thoughts, comments will be welcomed.

I think we mentioned that already, that there's possibility that there will be regulations allowing or giving more flexibility to lend dollars to corporations. We will be very active on this. As a bank, we are positive, so certainly, it will be in the agenda. As I've mentioned before, all the export related industries are growing very fast. So that's going to also be a use of proceeds for the dollar deposits. Just bear in mind that dollar deposits have grown over the past year very fast. In our case, our franchise, we expanded our market share of dollar deposits quite considerably over the past year and a half. So we have a much stronger franchise, and it will allow us to be a strong player on the export related industry.

Great. Thank you so much.

Thank you, Pedro. I think now we reach the end of the Q&A and of the earnings call. Once again, I apologize for the inconvenience we had, we experienced at the beginning of the Q&A session. Thank you for being there as well, and we look forward to meeting a few in the incoming months, and any additional question you may have, please feel free to ask. Thank you.

Good morning, and welcome to Grupo Supervielle's first quarter 2026 earnings call. I'm Ana Bartesaghi, treasurer and IRO. Today's conference call is being recorded. For the Q&A session, please ensure your full name appears on Zoom. You can ask questions by voice or through the Q&A chat box. Speaking today are Patricio Supervielle, our Chairman and CEO, Gustavo Paco Manriquez, CEO of Banco Supervielle, and Mariano Biglia, our CFO. Diego Pisuli, CEO of InvertirOnline, will also be available during the Q&A session. Before we begin, please note this call may include forward-looking statements. Please refer to our earnings release and SEC filings for further details. Patricio, please go ahead.

Thank you, Ana. Good morning, everyone, and thank you for joining us today. The first quarter marked an early but important step in our earnings recovery, with underlying profitability returning to positive territory, excluding extraordinary severance charges. We maintain a disciplined approach to growth. Loans declined sequentially, reflecting seasonally lower demand in local currency lending and our continued focus on selective origination. U.S. dollar loans grew 13% in original currency terms, although peso appreciation masks growth when reported in local currency. We also further optimized our funding mix by reducing higher cost wholesale deposits and strengthening deposit quality. Asset quality showed early signs of stabilization. While the NPL ratio stood at 5.6% at quarter end, delinquency trends improved slightly through March, following the February peak.

In parallel, cost of risk improved by 400 basis points to 6% from 10% in the fourth quarter, supporting our view that credit costs peaked at the end of last year. During the quarter, we implemented a voluntary retirement plan to further align our operating model with evolving customer behavior as activity continues to migrate towards digital and virtual channels. With 15% of employees taking the voluntary retirement plan to date and 9% at quarter end, we are well-positioned for a structurally leaner cost base going forward. Paco will discuss this initiative and its profitability impact in greater detail. The related severance charges contribute to a net loss in the quarter. Excluding this effect, the business generated net income of ARS 6.7 billion, with an adjusted return on average equity of 2.5%.

Net interest margin remained a solid 17.7%, benefiting from lower funding costs, while our CET1 ratio stood at 15.4%, reflecting a strong capital position to support future growth. At the business level, we continued executing our ecosystem strategy and cross-selling initiatives, particularly through InvertirOnline, where assets under custody reached approximately $2.7 billion, up from $2.2 billion a year ago. Cuenta Digital, launched by the bank to drive client acquisition within our ecosystem, reached a peak of approximately 13,000 new accounts in March. We also continued advancing innovation at InvertirOnline with the launch of a differentiated AI-enabled investment experience powered by Claude, allowing customers to interact with their portfolios, access market insights, and manage investment decisions through natural language.

Overall, the quarter showed clear progress, with underlying profitability turning positive in March and other operating trends continuing to improve into April. Importantly, these results reflect disciplined execution by an experienced leadership team with active asset and liability management, improving efficiency, and protecting the franchise while maintaining a clear focus on profitability. Stepping back for a moment, let me frame the external drivers behind the quarter's performance and our outlook for the rest of the year. The year began with inflation running above expectation, high rate volatility, and tight monetary conditions weighing on activity and profitability across the system. Conditions improved as the quarter progressed, with interest rates declining by March. The policy framework also continues to evolve constructively.

Fiscal discipline, reserve accumulation, higher exports, the IMF staff-level agreement, and progress on structural reform, including the recent labor and glacier laws, are improving visibility and supporting exchange rate stability. Looking ahead, policy execution will remain critical, sustaining the fiscal anchor. Continuing to normalize monetary policy and easing FX restrictions in an orderly manner will be important to preserving confidence and reducing volatility. For the banking system, a more predictable macro environment should gradually improve financial intermediation. Lower inflation and more stable rates should support graded demand, while improved visibility allows us to deploy capital selectively and continue prioritizing profitable growth and disciplined risk management. In this context, Supervielle enters the next phase from a stronger position with improving credit trends, a better funding mix, and a structurally more efficient operating platform. With that, I will turn the call over to Paco, who will discuss the key drivers.

Thank you, Patricio, and good morning, everyone. Turning to slide five, I will walk through the main operation drivers of the quarter and the actions we are taking to improve the bank's earnings profile. Starting with the balance sheet, we continue to manage the business with a prudent approach, prioritizing asset quality and profitability over volume. Soft demand in local currency lending led us to remain disciplined, while we continue to optimize our funding mix, as Mariano will discuss shortly. We also further reinforce our senior leadership team with the appointment of Juan Manuel Trupia as Chief Treasury and Global Market Officer this month, capitalizing on evolving market opportunities. Our strategy is beginning to deliver the expected results. Asset quality improved as the quarter progressed, with the delinquency levels showing signs of stabilization through March.

This was supported by collection and refinancing initiatives implemented across the branch network since last December. In parallel, cost of risk declined significantly from 4th quarter heights, reinforcing our view that we have moved past the peak of the credit cycle. We also made important progress on a structural efficiency. During the quarter, we implemented a headcount rightsizing plan to align our operational model with changing customer behavior as clients continue migrating towards digital and virtual channels. These efficiencies are the result of work we have been doing for some time to redesign the model, the service model around simple, more agile customer experiences. We scale digital and virtual service channel, centralized key processes, and improved operation discipline across the network. This allowed us to execute the plan without compromising service quality.

Together with our ongoing technology-driven transformation, these initiatives position the banks for a more efficient, scalable, and cost base. Annual savings are expected to be approximately ARS 33 billion in personal expenses, supporting a more efficient earnings profile going forward. Taken together, the quarters show clear progress. Underlying monthly earnings turned positive in March, asset quality trends improved, and momentum continued into April. With that, I will hand the call over to Mariano, who will take you through the financial results, including how these initiatives are impacting results for the quarter and our guidance for the year.

Thank you, Paco, and good day to everyone. Let's turn to slide six. We reported an attributable net loss of ARS 17 billion in the quarter, improving from the ARS 21 billion loss in the prior quarter. As evidence of improving trends, adjusted net income was ARS 6.7 billion after excluding the one-time ARS 23.8 billion in severance charges, net of income tax related to the headcount optimization plan. The main improvement came from credit costs while loan loss provisions declining around 45% sequentially, reflecting the initiatives discussed. The 2nd driver was lower underlying costs. Excluding severance charges, expenses declined 13% sequentially, reflecting lower seasonal, administrative, and personal costs. Client net financial income also improved sequentially, supported by lower funding costs.

Market-related income normalized after a strong fourth quarter, while fee income remained subdued, reflecting lagged repricing and softer activity levels at yield and asset management. In sum, the quarter show a clear improvement in underlying trends, with margins stabilizing in March and credit quality beginning to normalize. Turning to slide seven, the quarter reflects an important step in the recovery of structural earnings. On this slide, you can see the work from reported to structural net income. Excluding the extraordinary severance charges, underlying net income was ARS 6.7 billion. This voluntary retirement initiative reduced the bank ecosystem workforce by 9% or 278 employees in the quarter. On a pro forma basis, salary-related expenses would have been approximately ARS 4.6 billion lower before taxes, reflecting these reductions.

As a result, structural net income reached ARS 9.7 billion, highlighting the earnings capacity of the business on a normalized basis. Since the end of March, we have implemented an additional 192 headcount reductions, bringing total headcount down by around 15% across the bank ecosystem. This positions us for structurally lower and more efficient cost base going forward. Turning to Slide eight. Total loans declined 5.6% sequentially, reflecting first quarter seasonality, subdued credit demand in local currency, and our continued focus on disciplined risk-adjusted origination. Retail balances declined sequentially, consistent with our cautious underwriting approach amid the still elevated delinquency levels, while corporate balances remained relatively resilient, supported by U.S. dollar loans, which expanded 13% in original currency, although peso appreciation decreased balances translated from dollar to pesos.

As credit conditions continue to stabilize, our objective remains to gradually resume growth while maintaining a balanced and profitable portfolio mix. Moving on to asset quality on slides nine. The NPL ratio stood at 5.6% at quarter end, up from 5% in December, reflecting the lagged impact of prior credit stress. Importantly, the NPL ratio peaked in February and then improved in March, with early signs of stabilization across key portfolios. Net cost of risk declined significantly to 6% in the quarter from 10.4% in the fourth quarter, reflecting the moderation in new inflows and the impact of our collection and refinancing initiatives. These actions, implemented since December and focused on both individual and SME clients, helped contain migration into more advanced delinquency buckets.

While we remain cautious, current trends reinforce our view that credit costs peaked in the fourth quarter of 2025, with asset quality now moving into a more stable phase. Turning to slide 10. We continued to improve the quality of our funding base. Total deposits declined 4.7% sequentially as we deliberately reduced higher cost wholesale peso funding. Year-over-year, retail and commercial deposits increased 22% in real terms, supported by stronger primary relationships and our remunerated account value proposition. Checking account balances declined low single digits, while time deposits and savings accounts grew 26% and 47% respectively. As a result, our mix improved with lower reliance on wholesale funding and a higher contribution from retail and commercial deposits. Turning to slide 11. Net financial income reached ARS 255 billion, declining 5% sequentially.

Client net financial income improved, supported by lower funding costs and a lower and more stable rate environment in March, while market-related net financial income normalized after a strong fourth quarter. Net interest margin stood at 17.7% compared to 18.8% in full Q25, reflecting rate volatility during most of the period. Importantly, margins improved toward March as volatility eased. Turning to our outlook. We are updating our 2026 expectations to reflect a more normalized operating environment and the trends we observed during the first quarter. We now expect real loan growth between 20% and 25% compared to our prior guidance of 25%-30%. Growth is expected to remain skewed toward corporate lending in the near term, while retail credit should gradually recover alongside improvements in economic activity, employment, and disposable income.

Deposits are now expected to expand between 10%-15%, below our prior guidance of 20%-25%, reflecting continuity of restricted monetary policy. On asset quality, we now expect the NPL ratio to range between 5%-5.5% during 2026. Importantly, cost of risk improved meaningfully in the first quarter, and we now expect full year net cost of risk between 5.3%-5.8% compared to our prior guidance of 5.5%-6%. We also now expect NIM to range between 15%-18%, above our prior guidance of 14%-16%. This reflects a higher expected inflation path, which should keep nominal rates and asset yields above our previous assumptions. At the same time, reserve requirements remain elevated, and the temporary shift toward corporate lending may continue to weigh on margins.

Turning to the next slide. We now expect net fee income growth broadly in line with inflation compared to our prior guidance of 5% real growth. This reflects continued growth in banking fees offset by softer asset management fees and brokerage activity normalizing against a strong 2025 comparison base. Adjusted operating expenses are expected to decline between 2% and 4%, driven by lower expenses at the banking ecosystem in real terms. This reflects the impact of a larger than originally expected headcount rightsizing and continued cost discipline, partially offset by investments supporting accelerated growth at IOL. We now expect reported ROE for the year of between 2% and 6% compared to our prior range of 4%-9%.

The lower range reflects the impact of the headcount optimization plan implemented during the first quarter, while the upper end continues to reflect upside from macro normalization, easing monitoring conditions, and stronger credit growth. Excluding extraordinary severance charges related to the efficiency program, adjusted ROE is expected to range between 6%-10%. Note this range does not yet reflect the benefit of approximately ARS 33 billion in annualized salary savings, which should support the underlying cost structure over time. Lastly, we continue to expect CET1 to end the year between 11% and 13% unchanged from our prior guidance, supporting disciplined growth while maintaining a strong capital position. This concludes our prepared remarks. We are now opening the floor for Q&A.

Thank you, Mariano. At this time, we will be conducting the question and answer session. As a reminder, to ask a question, you need to be connected to a Zoom platform. To ask a question, please press the Raise Your Hand button and press it again to withdraw. You can also send your questions in written form via the Q&A box. The first question comes from Ernesto Gabilondo from Bank of America. Hello. Good morning, Ernesto. Please go ahead.

Thank you, Ana. Good morning, Patricio, Paco, and Mariano, Diego. Thanks for the opportunity to ask questions. My first question will be on your reserve coverage ratio. When looking to this ratio is around 100%, which I think it's a little bit low, given that 30% of the loan book is integrated by consumer loans, and especially when compared to other Latin American banks in the region. Just wondering how should we expect the evolution of your reserve coverage ratio? I will make my next question.

We feel that we have an appropriate coverage ratio at this moment. I think this view is also among our peers. This reflects particularly a cautious view on retail origination for the time being focused on corporate origination with export-led industries and we feel comfortable. Of course if things change we will apply another policy. Do you want to add on that?

Yes. Hi, Ernesto. Thank you for your question. I will add to what Patricio mentioned, also that, although as we saw during the presentation that we have a 37% of retail loans of our total portfolio, 10% of that is, mortgages. It's not a consumer finance. On mortgages, we have a much lower statistics of probability of default or given default. That also explains part why our expected loss models require less provisions on that part of the portfolio. The other, 63, almost two-thirds of the portfolio is commercial, where we also normally require less provision. Nonetheless, we are above the 100%. That's also above the industry average.

Thank you. For example, in terms of cost to risk, it already peaked in the fourth quarter, and I believe the NPL ratio peaked in this first quarter. If you improve the NPL ratio throughout the year, probably that should allow the reserve coverage ratio also to go up. Am I right with that assumption?

regard, yes, because of the loan growth, when we grow in real terms, the NPL ratio will tend to dilute, and the coverage ratio should increase. It will also depend on the mix of the portfolio. If we grow more on the retail side, that will also require higher provisions. If we continue to have more weight on the commercial side, we will be closer and not much above the 100%.

Perfect. My second question is on regulation. Deposit requirements have been lowered, but continue to be high when compared to other countries. How do you see the government willing to reduce even more the requirement? Is there any other deregulation we should have in mind?

Well, in terms of, I think it's a good, very good question. Of course, this government, in addition to the fiscal anchor, they also are restrictive in their monetary policy, and to make sure that the anti-inflation program succeeds. It's still pending the easing of peso-denominated reserve requirements, which are, which I think they are still are the highest in the last 20 years.

I expect that when particularly this is my opinion when the government secures the refinancing of their of the bonds in the international market through these the guarantees that they are willing they are taking they are negotiating with the multilaterals I think that they will start to be softer in terms of peso reserve requirements. This is my opinion so I am optimistic on that. In addition to that there is also the on the agenda something extremely important which is the lifting of the foreign exchange controls for particularly for corporations. That is a constraint today on investment and capital locations for corporations.

Finally, another important agenda that I think is very important is unlocking the Social Security Sustainability Fund, particularly as a long-term funding vehicle for supporting mortgage securitization. That would be a big help for construction, for the value of properties, and I think it's, I mean, it's an agenda that is important. In summary, what we need is less restrictive monetary policy, deeper capital market, and a fully functioning foreign exchange framework.

Oh, thank you very much, Patricio. Very helpful. Just a last question from my side related to the RIGI projects. Is there any update you can provide us, and how is Supervielle expecting to participate in financing SMEs or suppliers related to these projects?

I think the RIGI project is going very well and there I think I understand that the full pipeline today is ARS 100 billion. Only one part of that has been already approved. The impact for us, for Banco Supervielle, is very important because what we do we concentrate on financing the value chain of dynamic industries such as energy and mining. Definitely this will help all the value chain, and we will be there.

Excellent. Thank you very much.

Thank you, Ernesto, for your question. Our next question comes from Diego Marquez with JP Morgan. Hello. Good morning, Diego. Please go ahead.

Good morning, Patricio, Paco, Mariano. Thanks for the space for questions. Just a quick question regarding the right sizing initiative and headcount reduction that we saw this quarter, just to get a sense of what impact we can expect in the coming quarters, and if we can expect a normalization and to what extent. If I can, a second question, just following up on what Ernesto was saying on NPLs. You mentioned a slight improvement in March compared to February. Just if you could give us a bit of more color on what you're seeing, maybe through April and what's driving this stabilization, if we could expect, you know, first Q to be the peak for this. Thank you.

regarding your first question, basically, this voluntary retirement program was designed to run mainly from March through May. the estimated annual savings so far are to be approximately 33 billion. this the impact of all the technology and the change of customer behavior basically is allowing the review of the infrastructure in order to basically make sure that we strengthen the operating platform, we improve scalability and we align the cost base of with the way the clients interact with the bank today. this is an agenda that you have to expect that we will be looking on a continuing basis.

We do not expect another program of similar magnitude during 2026.

We call rightsizing because we don't see any impact in our NPLs or quality service or whatever. That why we call it rightsizing because we don't see any impact in the organization. Going to the second part of the

Yes. Also let me add regarding the impact for the incoming quarters, as we said during the presentation, we expect ARS 33 billion savings annualized, and when this program is fully executed. We did the most part in the first quarter, but we are executing also in April and part in May. These 33 billion annualized savings cost, which is about ARS 8 billion per quarter, will be fully captured in the third and fourth quarter of this year.

also with this rightsizing, we are preparing the bank for the next month, for the future, no? for the competition, for the new value proposition, more digital, for the customers, so we are preparing them, the bank for the future.

The ARS 33 billion is what we have already achieved in terms of annual savings by now, by today. Okay?

Exactly.

Exactly. Regarding the second question, what we expect for NPLs now is that they will be quite stable. The range of 5.5-5.7 and decreasing by the end of the year, where we have a guidance of 5%-5.5% NPL ratio. What we did to achieve this improvement we saw between February and March, and now we've seen it more stabilized is first with what we saw the peak in interest rates that impacted so negatively on delinquency across the industry. We were much more stringent on rate origination particularly in unsecured loans on the retail side. So that helped us stop delinquency and that's why we are seeing first an important reduction in the cost of risk.

The NPL has a lag, so that's why it increased quarter-over-quarter, but we think it reached a peak or close to a peak. Also very important was a collection initiative that we launched in between December and February, where we put effort across all our channels, including our commercial network, to contain delinquency and to increase to improve collections. That gave very good results that translated in this decrease of NPL month-over-month in March.

I think, Diego, that the NPL figures shows that we are implemented certain initiatives in order to control the risk. Yes, the NPLs also. I think we did different initiatives against the market.

Yes. That includes, and not only, of course, all the efforts to contact clients and try to I mean, making an effort to collect all the.

All the branches.

all is due. Also, we have been implementing structural changes in the way we collect to make sure that basically the quality of collection remains over for the future. This is very important. Better procedures, better way of working, this is very important. Of course, this requires technology behind, this is already an agenda, an important agenda.

No, very clear. Thank you. Pleasure. Nice to hear you.

Thank you, Dio, for your question. Our next questions come from Arnon Shir-Hai with Citi. Hello. Good morning, Arnon.

Hello. Good morning. Thanks for the opportunity. My question is in line with Diego's question, related to NPLs and collections. We saw a stabilization recently, but to what extent is this improvement dependent on the collection initiatives rather than genuinely recovering environment repayment capacity? Thank you.

I think it's both effects from having more restrictive origination policies, as I said, mainly on the unsecured retail portfolio, but also the collection efforts. Collection efforts were not only introduced to collect past due loans, but also to prevent loans that were performing, but according to measures or indicators that we have, we saw customers at a risk of being past due and generating new delinquency. These efforts were intended to prevent going those loans into delinquency or early delinquency turning into NPLs later. I think it's both effects.

Si.

Okay, great. Thank you.

Thank you, Hernán.

Yeah.

We have a question from Pedro Offenhenden with Latin Securities. Hello. Good morning, Pedro.

Hi, everyone. Good morning. Thank you for taking my question. I wanted to ask for some color on Invertir Online this quarter. What were the drivers of the decline in revenue and net income with customers growing and so assets under custody only modestly down?

thank you, Pedro, for your question. I think this quarter reflects a trend we've been experiencing in the business for the last year. a year ago, a meaningful part of our brokerage activity was FX driven. this of course brought activity, transaction, volume and revenue. after the lifting of the restrictions in the FX market in April, part of this or a significant part of this disappear. what is important is that despite this shift or change, we managed to keep growing our accounts. We now have 2.3 million accounts open in Invertir Online, and as you mentioned, activity and transactions are roughly the same that we had when the restrictions were in place. also, the AUC grew 25% year-over-year in dollar terms.

In the same period, we grew our asset management business from USD 120 million in AUM to USD 350 million AUM. What we saw was a shift from the nature of the activity from our customers from one very intensive in FX transactions to a more stable investment operations. For us, what we did last year and been doing last time and we're going to do ahead is monetize these customers, this broad base of customers, in a more recurring and resilient way and not dependent on market distortions. We are adding more investment products for our customers, especially for retail customers. We are also improving our advisory relationships, and we are focusing on development of our high-value customers activities or segments.

Something that we accomplished in the last year was what is growing the AUC I mentioned before was if you look which segments explain the growth the high-value customer affluent customers and the ones that are advisor grew twice as fast than the AUC of retail customers. Retails were growing too so we were executing well on that front. The share of the revenues that was explained by these affluent customers was close to 10-11% last year and now it's 20% and it's growing.

I believe that if we look at the experience in other countries and other markets, when the macroeconomic environment normalize and the FX rate is more stable, the interest rates are low and stable, and also the inflation is under control, the capital market expands. I think we have a good strategy to capitalize on that, and we believe and we are optimistic that in Argentina this will happen. The capital markets is still in its infancy. We are, I think, well-positioned to capitalize on the development that it will have in the future as we have in other countries as an example.

Thank you, Diego. Super clear. Just if I may, a quick follow-up on the bank. There was a bit of movement on deposits this quarter. Could you give us some color on the increase in public sector deposits and savings account? How should we expect the deposit mix going forward?

Well, in terms of funding, as you know, the government is pursuing a constrained monetary policy. I think basically now they are also aware that volatility in rates is harmful. The dollar deposits continue to grow at this point, although maybe at a slower rate than in the first quarter. We are already at record levels in the past 20 years. I think that the policy, the strategy we started last April of remunerating accounts selectively for certain classes of individuals corporations is having a very good effect, and it's already we already see the results. we need this will grow over time because basically what it helps us is to attract funding for individuals and in affluent individuals and corporations, and also build primary relationships. looking forward, peso constraints particularly will continue with this government policy to exist. I don't know if you're aware, but the peso to loan deposit in the system is very high at this point. in order to have the industry grow in terms of funding loans, we need to see the growth in peso deposits.

I think this is related to the I think to the success of the stabilization program to the government securing the external financing for their debts and therefore allowing for more monetization of pesos in the country which will fund deposits and fund loans.

Perfect. Patricio, thank you.

Thank you, Pedro, for both questions. We have a question from Camila Acevedo with UBS. Hello. Good morning, Camila. Thank you also for your question.

Hi, everyone. Good morning. I would like to follow up on previous questions on the headcount rightsizing plan. Excluding these extraordinary changes and also, given your medium-term goal of accelerating ROE, reaching high single digits or low double-digit ROE by year-end, what specific levers, other than this, the plan, will drive the acceleration in the coming quarters? I also have another question, if I may, related to the expansion of your presence in key industrial hubs in the country focused on oil and gas and mining, right? What is the pipeline for corporates in these sectors, and how do you expect the agreement with the U.S. to impact your corporate deal flow? Thanks.

Okay. I think basically the first question relates to the process to grow in terms of return on equity. Do you want to explain that?

Exactly. Thank you, Camila, for your question. The main drivers of the ROE improvement for incoming quarters and the following year, I will mention, first, of course, the efficiency achieved in headcount reduction that we explained well in detail. Second, improvement in asset quality, which we also talked about. Stabilization of loan loss provisions will also lead us to foster loan growth also on the retail side, which now we are very stringent. In order to achieve higher ROE, we want to resume growth on both the commercial and the retail side of the loan book.

Right now we are growing on the commercial side, both in pesos and dollars, but we want to grow also, when we think that the moment is appropriate on the retail side. That is the third point, and the fourth is growth in fees. We want to grow the banking net service fee income, but also in Banorte online, which Diego explained well in detail before, and on asset management. Those are the key line items I would say.

We are changing our mix in cost of funds. That the main focus for Juan Manuel Trupia, the recently appointment as Chief of Treasury. We are implementing new initiatives in term of new value proposition, new products, basically for the lending size. We are communicating in the next weeks, a strategic alliance with a big car factory sales in order to sell cars, with a huge alliance with us. The personal loan size. Now we are selling the new.

Cohort.

Cohort. The new sales since February are showing good results in term of delinquency. We are in the next weeks we will increasing the personal loan sales in order to capture more spread and obviously more revenues. Add in your comments, Mario. Regarding your second question, see, we have a clear focus and we always said it that we want to concentrate our the financing of the value chains of dynamic industries. That includes precisely oil and gas and mining. We have in the past two years opened selective branches in particular points where- We want to deliver service, but most important, most importantly, we have on the credit side we have specialized people that are looking on the oil industry. They and we have a team which is dedicated to the oil industry.

also we have presence in Añelo.

Exactly this. Exactly. We have presence in Añelo. We have presence in also in mining areas in San Juan. Basically we have the infrastructure, we have the team, we have the drive, we have the funding. The funding is particularly dollar funding because this is related with all these companies they are looking for dollar funding. This is precisely what we do. We are very optimistic, and this will not change with any change of government. I mean, this is something, a secular growth that is in Argentina. That is a fantastic opportunity for the banking industry.

You can mention the ON that we launch on Tuesday, the ON USD MEP.

Yeah. We, I mean, we are tapping, of course, a particular opportunities to attract low-cost funding. For instance, we last week, we sold in the market a bond, a one-year bond at with a very low cost of.

3.25.

3.5%.

ARS 20 million.

Basically we are looking, tapping into, all this funding, pool base, in order to make sure that we have what is necessary to deliver to our clients.

Okay.

I hope I have answered your question.

Yes, yes. All perfect.

Yeah, it's perfect. Thanks a lot.

Thank you, Camila.

Thank you.

Okay. I think we can go to some of the written questions in the Q&A. I had some maybe it were already, I think in terms of NPL and NIM, I think we already answered those. Regarding maybe the announced 9% headcount reduction or 15, how much annual savings do you expect this to generate? I think it's already answered, ARS 33 billion pesos. This question maybe, and do you plan to reinvest any of these savings into technology or other strategic initiatives?

No.

Uh-

No, those will be savings that will impact the bottom line.

Exactly.

Actually.

We have some others. Well, no. Go back to the previous one, Federico T. Cevero from ATCap, I think. Should we expect additional non-recurring structuring charges throughout the year? How will this impact your full year return on equity?

Sí in what Mariano already said. Return on equity guidance stands at a wide range.

Sí.

Eh-

Overall

What the key assumptions may be among those. I think there is another question asking more or less the same, Mariano.

Yes. Regarding the ROE guidance, it has a wide range, mainly due to economic monetary policy from the central bank that we can see throughout the second part of the year. If we have an easing of the monetary policy, that will allow deposits to grow faster, that will fuel loan growth, as Patricio also explained. That's the main driver. That will also help interest rates keep going down or at a stable range, also help the delinquency to be contained and PS to grow. That's the upside we see. The downside would be that this restricted monetary policy keeps throughout all year.

That's the lower and the higher part of the ROE range. It's important to highlight that we give an adjusted ROE without the impact of the retirement plan costs and the reported ROE guidance that includes it. The range is for both, the explanation is for both the same. It's important also to highlight that in the reported ROE we include the cost of the retirement plan both what has already been incurred as of March 31st and what we expect to incur in the second quarter.

We have another question from Ricardo Cavanagh with Itaú. Hello, good morning, Ricardo.

Hi. Hello, good morning, all. Well, thanks for this quite interesting conference call. What I'm seeing in the market is that corporates are issuing debt at very low spreads compared to the sovereign. Of course, on a lower sovereign spread would come in hand with much better conditions for banks. My question is, would you imagine under any scenario the prospects of sovereign risk premium compressing over, let's say, the next six to twelve months?

Well, I think, definitely, what, for instance, yesterday there was a very successful debt emission by that's the city of Buenos Aires, and over I think it was six times over subscribed, and with rates in the region of 7% for I think it's the tenure was

10 years

10 years. I think this is a very good sign. It was a very good timing because after Fitch announcement but in my opinion it will impact on the sovereign risk. I cannot say exactly how much but I think it will impact because definitely this is not a private company. This is a state. There's a state within Argentina the Capital Federal that is getting funds at 7%. I think definitely this will impact on the sovereign risk.

In addition, if the government succeeds in refinancing all the what is due in, on bonds on 2026 and 2027 with guarantees from multilaterals, this will also give more tranquility and help, you know, compress the sovereigns. This is my opinion.

Uh, well-

I'm sorry, Ricardo.

Sorry.

No, go ahead.

No, well, thanks. Thanks for that answer, and Patricio, I have a question for you regarding if these times that we are living in Argentina reminds you of any additional time, in particular in the past, where the banking sector faces certain issues and also certain opportunities, no? That is my question.

Well,

Given your long track record in the industry.

No, thank you. I think, of course, we can refer back to the convertibility, because the convertibility was also a stabilization program, very successful in the first five, six years. That stabilization program was tremendously transformational of Argentina, also of the financial industry. You can see it. We saw at that time an increase, I think, of loans to GDP up to 25%, so it grew a lot. You see the type of potential that a financial industry has when you have a successful stabilization program. I do not buy into the fact that we will have a, you know, very international inflation rates, in the next 12 month.

I think stabilizations if you see Israel, Uruguay, Chile, they take a few years, maybe up to 10 years. The trend is there, and definitely would have an impact on the growth of the financial industry. Just only look at one figure. For instance, mortgages to GDP is 1% of GDP here, and in Chile it's 15x that. We have a lot of agendas on the financial industry to capitalize with a stabilization program. We need to see, of course, that this goes on with the next government and also that the entire political spectrum also buys into the fiscal anchor that this is very important.

I expect that eventually they will do because this is gonna be a winning theme for elections. Okay.

Okay. Thank you all very much. Thank you.

Thank you.

I think there's a question I would like to work to answer there, which is regarding the acceleration.

Yes. I was going to ask that.

Okay.

It's repeat investor. Can you accelerate-

Transformation

How can you accelerate your transformation?

Can you accelerate-

to a fintech-like business model like Revolut or Nubank?

Okay. First of all, these are you're talking of two great financial companies best in class and I think the way forward for us is first of all to make sure that we have an agenda of literally I would say radically diminishing the cost to serve of individual clients. This is an agenda that Paco is pursuing and will continue to pursue over the next few years. I'm talking of unit economics. I mean we wanna make sure that every individual that works with the bank has very low cost to serve compatible with the revenue we get from these active customers. That's my first part of the question.

of course, with that you need to continue working on technology. On the second part is also it is very important that we in our case are working with clusters, not like a universal bank for agenda. We're working with clusters, and the clusters are for us at this stage, working, making sure that we have good value propositions for salary accounts, good value propositions for senior citizens, and good value propositions for investor type of or affluent clients. Those affluent clients, we are capturing them through a cross-sell, let's say strategy with InvertirOnline that is a very successful fintech, by the way, the largest in the country, and it's growing.

It's growing particularly the focus today is grow on high value clients, as Diego explained just before, which includes affluent individuals, corporations and IFAs. The second part is we wanna make sure that Banco Supervielle is very strong on enterprises because this is not the focus of Revolut or Nu. This is so or even Mercado Pago. We want to focus on the value chain of dynamic industries. This is gonna be a way to defend and grow for the financial industry and particularly for us.

Well, I think we reached the end of today's Q&A session and conference call. Thank you for joining us today. Thank you. We appreciate all your questions and your interest in our company. We look forward to meeting more of you over the coming months and providing financial and business updates next quarter. Maybe there were some questions on the Q&A box that we can go through after the call. Thank you all of you for joining.