Grupo Supervielle S.A. — FY2021 Form 20-F
Period: Year ended December 31, 2021; this is an annual report, not a standalone fourth-quarter filing. Unless noted otherwise, financial statements are consolidated IFRS figures restated under IAS 29 in pesos measured at December 31, 2021. Amounts below are in Ps. billions.
Business context and reporting period
Grupo Supervielle is an Argentina-focused financial group, principally operating through Banco Supervielle, alongside consumer finance, insurance, asset management, brokerage and payment businesses. Argentina’s economy grew 10.3% in 2021 after contracting 9.9% in 2020, while CPI inflation was 50.9%. The group served more than 2 million active customers and had 4,811 employees at year-end.
Financial performance and position
| Metric | FY2021 / year-end | Prior comparable period |
|---|---|---|
| Net loss attributable to parent | Ps. 1.735bn loss | Ps. 5.283bn income in 2020 |
| Net operating revenue | Ps. 55.564bn, down 11.6% | Ps. 62.867bn |
| Net financial income | Ps. 53.068bn, down 14.6% | Ps. 62.126bn |
| Net interest income | Ps. 42.932bn, down 21.3% | Ps. 54.522bn |
| Net interest margin | 17.3% | 21.5% |
| Net service fee income, including insurance income | Ps. 13.856bn, down 4.5% | Ps. 14.516bn |
| Loan-loss provisions | Ps. 8.930bn, down 31.3% | Ps. 13.004bn |
| Total assets | Ps. 390.403bn | Ps. 376.193bn |
| Loans and other financing, before allowances | Ps. 165.522bn | Ps. 171.802bn |
| Deposits | Ps. 288.458bn, up 7.0% | Ps. 269.645bn |
| Equity attributable to parent | Ps. 51.510bn | Ps. 53.812bn |
Operating loss was Ps. 1.456bn. The non-performing loan ratio rose to 4.3% from 3.7%, while allowance coverage fell to 145.0% from 208.8%. The efficiency ratio increased to 74.7% from 64.4%. Return on average equity was negative 3.3%, versus positive 10.2% in 2020.
Cash and cash equivalents were Ps. 44.728bn at year-end, down from Ps. 59.571bn. The cash flow statement reports Ps. 8.484bn provided by operating activities, Ps. 4.695bn used in investing activities and Ps. 12.565bn used in financing activities. The filing’s accompanying narrative instead says operating activities used Ps. 8.5bn; investors should verify this discrepancy against the audited cash flow statement.
At the Bank and IUDÚ consolidated level, the reported total capital ratio was 12.9% and Tier 1/CET1 was 12.2%, down from 13.9% and 13.4%, respectively. Including holding-company resources, pro forma ratios were 13.3% and 12.7%. The pro forma liquidity coverage ratio was 109.6%, versus 111.4% in 2020. Deposits are the group’s main funding source; year-end deposits represented about 74% of Banco Supervielle’s liabilities and equity. The filing reports Ps. 6.253bn of financing from the Central Bank and other financial institutions and Ps. 1.059bn of unsubordinated debt securities outstanding at year-end; subordinated debt securities were nil.
Material changes versus 2020
- The group moved from profit to loss as net financial income declined, funding costs rose, and operating expenses and inflation-related effects weighed on results.
- Interest expense increased 40.3%, reflecting minimum deposit-rate requirements and a larger average balance of interest-bearing liabilities. Cost of funds rose to 19.8% from 14.5%.
- Credit-loss provisions declined, partly because 2020 included anticipatory COVID-related provisions. However, the NPL ratio increased and coverage weakened as temporary regulatory relief ended.
- Total loans declined while deposits grew. Cash and cash equivalents and capital ratios also decreased.
- Net loss reflected, among other items, higher turnover taxes, including the removal of a City of Buenos Aires tax exemption on income from Central Bank securities, and increased spending tied to digital transformation and workforce efficiencies.
Outlook, commentary and risks
Management expects asset quality to remain broadly stable in 2022; it anticipates provisions may rise modestly with loan growth and cost of risk to remain near 2021 levels. It expects capital and liquidity to remain adequate, while continuing digital transformation, cost discipline, customer acquisition and funding-cost initiatives. The filing provides no specific earnings or revenue guidance. It cites Central Bank survey estimates for 2022 of 3.2% GDP growth, 59.2% inflation and a year-end exchange rate of Ps. 154 per U.S. dollar; these are external estimates, not company guidance.
Key risks include high inflation and peso depreciation, exchange controls, regulatory limits on interest rates, fees and lending, sovereign and Central Bank exposure, weaker credit demand and borrower defaults, and ongoing COVID-19 and geopolitical uncertainty. Argentina’s IMF program and its implementation may affect economic conditions and access to capital markets. Dividend distributions and remittances to non-resident shareholders are subject to regulatory and foreign-exchange restrictions.
The company reports no legal or administrative proceeding expected to have a material adverse effect, but its subsidiaries face ordinary-course claims, including class actions alleging fees or charges and a case against InvertirOnline concerning use of client funds. A banking association and the Central Bank also challenged City of Buenos Aires laws imposing turnover tax on certain Central Bank securities. The Bank’s ANSES pension-payment agreement was due to expire June 30, 2022, and its San Luis financial-agent arrangement was due to expire May 3, 2022 unless renewed or replaced; outcomes are not clear in the filing.
Other notable items: the board proposed a Ps. 252.5m cash dividend, approved by shareholders on April 27, 2022, but unpaid as of the report date. Management reported effective disclosure controls and internal control over financial reporting; the auditor issued unqualified opinions on the financial statements and internal controls. The auditor identified fair valuation of instruments without active markets and expected-credit-loss estimation as critical audit matters.
Important facts for investors to verify
- Reconcile the cash flow statement’s Ps. 8.484bn operating cash inflow with the narrative describing an operating cash outflow.
- Review the audited financial statements and notes for IFRS/IAS 29 restatement effects, credit-loss assumptions, and the valuation of financial instruments without active markets.
- Track NPL formation, allowance coverage, loan growth and the effect of ending pandemic-era payment and classification relief.
- Assess exposure to Argentine government and Central Bank instruments, alongside capital and liquidity trends.
- Confirm the status of the ANSES and San Luis agreements, the turnover-tax litigation and other class-action contingencies, and any dividend or foreign-exchange restrictions.