Grupo Supervielle S.A. — FY2022 Form 20-F
Business context and reporting period. This is the audited annual report for the year ended December 31, 2022, not a standalone Q4 filing. Grupo Supervielle is an Argentina-focused financial group, led by Banco Supervielle, with insurance, investment, brokerage and other businesses. Financial statements are prepared under IFRS and restated for Argentina’s hyperinflation under IAS 29; amounts below are generally in millions of pesos (Ps.) in the measuring unit current at December 31, 2022. The company reported an unqualified audit opinion and effective internal control over financial reporting.
Key financial results and position
| Metric | FY2022 / Dec. 31, 2022 | FY2021 / Dec. 31, 2021 |
|---|---|---|
| Net operating revenue | Ps.110,563; +2.2% | Ps.108,234 |
| Net financial income | Ps.107,849; +4.3% | Ps.103,374 |
| Net interest income | Ps.86,367; +3.3% | Ps.83,629 |
| Net service fee income | Ps.24,142; -10.6% | Ps.26,991 |
| Net loss attributable to parent | Ps.5,029 | Ps.3,379 |
| Net interest margin | 19.6% | 17.3% |
| Efficiency ratio | 79.9% | 74.7% |
| Total assets | Ps.696,867 | Ps.760,479 |
| Loans and other financing | Ps.247,813 | Ps.322,426 |
| Total deposits | Ps.547,517 | Ps.561,897 |
| Equity attributable to parent | Ps.92,273 | Ps.100,337 |
| Operating cash flow | Ps.1,658 provided | Ps.16,527 provided |
| Cash and cash equivalents, year-end | Ps.54,401 | Ps.87,128 |
Loan-loss provisions were Ps.14,171, down 18.5%. Non-performing loans were 3.7% of loans versus 4.3%; allowance coverage was 142.7% versus 145.0%. The loan-to-deposit ratio fell to 45.3% from 57.4%. Operating cash flow weakened substantially; investing activities used Ps.7,555 and financing activities used Ps.12,572 in 2022.
Capital and liquidity. Banco Supervielle’s regulatory capital ratio was 12.9%, with a 12.3% Tier 1 ratio and Ps.20,171 of excess capital under Central Bank rules. Pro forma ratios including holding-company liquidity were 13.6% total capital and 13.0% Tier 1. Pro forma liquidity coverage ratio was 103.5%, down from 109.6%. These regulatory measures use Central Bank rules and nominal values, and are not directly comparable with IFRS figures.
Debt and funding. Deposits remain the Group’s main funding source. Year-end unsubordinated notes were Ps.561 and were canceled in February 2023; the filing reports no outstanding subordinated notes. The company’s treasury portfolio included substantial Argentine Central Bank and government securities; public-sector exposure was reported at approximately Ps.310,956, or 44.6% of total assets, including Central Bank securities and repos.
Material changes versus prior year
- Net loss widened to Ps.5,029 from Ps.3,379; ROAE declined to -5.2% from -3.3%, and ROAA to -0.7% from -0.4%.
- Net interest margin improved as higher yields on Central Bank and government instruments outweighed weak loan demand and increased deposit costs. Average loan balances excluding foreign-trade and U.S.-dollar loans fell 10.9%; average loan volumes overall fell 15.0%.
- Interest expense rose 40.4%, reflecting higher regulated deposit rates. Cost of funds rose to 30.7% from 19.8%. Fee income fell as repricing lagged 94.8% inflation and activity weakened.
- Loans declined about 23% and deposits about 2.6% on the reported, inflation-restated basis. The Group’s total assets fell about 8.4%.
- Non-interest expenses included restructuring and efficiency costs. Personnel expense rose 8.1%, including Ps.7.6 billion of severance and early-retirement costs versus Ps.5.6 billion in 2021; headcount fell about 21% to 3,814.
Outlook, management commentary, risks and unusual items
- Management said 2022 results reflected weak private-sector credit demand, Central Bank restrictions on asset volumes and pricing, inflation, and costs to accelerate efficiency initiatives. It expects to prioritize profitability, monetization and cross-selling in 2023, with recurring expenses rising significantly below inflation.
- Management expected the NPL ratio to remain relatively unchanged from 2022, provisions to remain stable, and loans to grow in line with or slightly below inflation, subject to conditions. It expected capital and liquidity to remain adequate; these are expectations, not guarantees.
- The 2023 outlook in the filing cites market expectations of a 2.7% GDP contraction and 110% inflation. The company highlights Argentina’s inflation, peso depreciation, exchange controls, political and regulatory uncertainty, drought-related export and reserve pressures, fiscal and sovereign-debt risks, and potential changes in interest rates and deposit costs.
- In 2022, IUDÚ’s consumer-finance portfolio and customers were transferred into the Bank, and the Bank agreed to absorb IUDÚ and Tarjeta, subject to shareholder and Central Bank approvals expected in the second half of 2023. The Group recorded impairment/write-offs of IUDÚ-related non-financial assets and accelerated depreciation; it also recorded Ps.739 million of goodwill impairment. The filing describes the overall non-financial asset write-off and accelerated amortization as about Ps.2 billion.
- A Ps.3.6 billion income-tax gain included approximately Ps.3.1 billion associated with expected use of IUDÚ tax losses following its planned merger into the Bank. Actual use depends on the merger and tax circumstances.
- The ANSES agreement for pension payments, associated with 21% of Bank revenue as of year-end, was due to expire June 30, 2023; ANSES may terminate it on 90 days’ notice. Dividend distributions by banks remain subject to Central Bank authorization. For April–December 2023, authorized banks could distribute up to 40% of the otherwise eligible amount in six monthly installments.
- The Bank and IUDÚ face collection matters and class actions concerning fees, insurance, interest and other customer charges; the filing says no known proceeding is likely to have a material adverse effect, while noting outcomes remain uncertain. It also identifies cybersecurity, compliance, climate, customer-credit and public-sector concentration risks.
- Grupo Supervielle paid Ps.492 million in dividends in 2022 and repurchased shares under a program. By the filing date, it reported purchasing 11.1 million Class B shares and 591,384 ADSs, equivalent to 3.076% of outstanding capital and 86.3% program execution.
Important facts for investors to verify
- Reconcile the audited IFRS statements with management’s segment and regulatory disclosures, especially where amounts or definitions differ; confirm the impact of IAS 29 restatement when comparing periods.
- Review the full notes on the Ps.310.9 billion public-sector exposure, including Central Bank securities and repos, valuation classifications, maturities and sensitivity to sovereign or Central Bank credit risk.
- Assess the quality and sustainability of earnings: higher investment-portfolio returns versus declining loan volumes, rising deposit costs, falling fee income, and recurring versus restructuring expenses.
- Track loan performance and reserve adequacy, particularly consumer and SME exposures, Stage 2/Stage 3 balances, write-offs, and the assumptions in the three-scenario IFRS 9 expected-credit-loss model.
- Confirm completion and approvals of the IUDÚ and Tarjeta mergers, realization of expected tax benefits, and the effects of integration and the Dorinka contract termination.
- Verify renewal or termination of the ANSES agreement, applicable dividend permissions and foreign-exchange restrictions, and the remaining execution and resale treatment of repurchased shares.
- Read the audit report’s critical audit matters: fair value of instruments without active markets and estimation of expected credit losses. The filing identifies significant judgment in both areas.