Grupo Supervielle S.A. Reports 3Q16 Consolidated Results

Grupo Supervielle S.A. (NYSE:SUPV); (BASE:SUPV), ("Supervielle" or the "Company") a universal financial services group headquartered in Argentina with a nationwide presence, today reported unaudited results for the three and nine-month periods ended September 30, 2016. All figures presented throughout this document are expressed in nominal Argentine pesos (AR$) and all financial information has been prepared in accordance with Argentine Banking GAAP.

Third Quarter 2016 Highlights
  • Net income of AR$436.4 million, up 126.1% YoY, and 159.9% QoQ. ROAA of 4.0% in 3Q16, compared to 2.8% in 3Q15 and 1.8% in 2Q16. ROAE of 28.6% in 3Q16, despite equity base more than doubling in late May' 16 following the capital increase from the Initial Public Offering ("IPO"). This compares with 36.7% in 3Q15 and 15.6% in 2Q16.
  • Total gross loans, including the securitized loan portfolio, increased 48.1% YoY and 13.0% QoQ to AR$33.3 billion. Total balance sheet loans grew at a higher rate of 59.1% YoY and 15.8% QoQ, reflecting a slowdown in securitization.
  • NIM expanded 160 bps YoY to 20.5% in 3Q16, from 18.9% in 3Q15, and increased 10 bps from 20.4% in 2Q16.
  • Non-performing loan ratio declined 10 bps to 3.0% in 3Q16 from 3.1% in 3Q15 and 2Q16.
  • The efficiency ratio improved to 62.5% in 3Q16 from 74.0% in 3Q15 and 72.1% in 2Q16.
  • Equity to Asset ratio of 14.4% in 3Q16 compared to 7.2% in 3Q15 and 14.6% in 2Q16.

CEO Message

Commenting on the results for the quarter, Patricio Supervielle, Grupo Supervielle's Chairman and CEO, noted:  "We delivered solid profitable growth in the quarter, achieving a 160% sequential increase in net income as we continued to deploy the capital raised in our IPO last May, doubling industry loan growth for the second consecutive quarter and further reducing high cost debt. Importantly, loan growth was achieved while starting to see early signs of reversal in asset quality deterioration.

"Our loan book expanded by 13% quarter-on-quarter and exceeded inflation. Growth continued to be largely driven by corporate loans as we leveraged existing client relationships and our strong value proposition. Retail loans doubled the growth rate achieved in the second quarter of the year, despite a more challenging than anticipated economic environment in 2016.

"Results were underpinned by a resilient net interest margin which stood at 20.5% despite lower interest rates, and by a higher operating leverage as we continue to increase the number of loans per branch. This led to a 960 basis point improvement in the efficiency ratio, reaching 62.5% in the quarter.

"Given the solid results achieved to-date and our view for the remainder of the year, we confirm our expectation of achieving an increase in net income of between 78 -108% in 2016 as compared to the prior year, despite the more challenging and volatile macroeconomic framework. We expect sustainable economic growth to resume in 2017 and remain committed to continue executing our strategic plan which capitalizes on the strong growth potential we see in our business segments - particularly SMEs, middle market, retail and consumer finance as economic growth recovers. We are also fully committed to further leverage our current network and over two million customer base," concluded Mr. Supervielle.

Financial Highlights & Key Ratios
(In millions of Argentine Ps.)                               % Change                      
           
INCOME STATEMENT       3Q16       2Q16       1Q16       4Q15       3Q15       QoQ       YoY       9M16       9M15       % Chg.
Gross Financial Margin       1,566.4       1,304.4       1,105.6       1,076.9       854.4       20.1%       83.3%       3,976.5       2,278.8       74.5%
Service Fee Income, Net       635.4       555.3       538.6       614.0       533.8       14.4%       19.0%       1,729.3       1443.2       19.8%
Income from Insurance activities       194.0       164.4       117.9       62.0       42.1       18.0%       360.4%       476.2       113.9       318.0%
Loan Loss Provisions       -261.4       -295.9       -183.6       -187.9       -98.5       -11.7%       165.3%       -741.0       -356.0       108.1%
Administrative expenses       -1496.3       -1458.7       -1299.6       -1196.2       -1058.7       2.6%       41.3%       -4254.5       -3065.2       38.8%
Income from Financial Transactions       638.2       269.5       278.9       368.9       273.1       136.8%       133.7%       1,186.5       414.7       186.1%
Net Income       436.4       167.9       174.7       360.1       193.1       159.9%       126.1%       779.0       314.0       148.1%
Earnings per Share (AR$)       1.20       0.56       0.70       2.92       1.56       -       -       2.55       2.54       -
Earnings per ADRs (AR$)       6.00       2.78       3.51       14.61       7.81       -       -       12.77       12.68       -
Outstanding Shares (in millions)       363.8       363.8       249.0       249.0       124.5       -       -       363.8       124.5       -
BALANCE SHEET       sep 16       jun 16       mar 16       dec 15       sep 15       QoQ       YoY                        
                                                                                 
Total Assets       44,433.7       40,960.0       34,672.3       33,045.8       28,052.5       8.5%       58.4%                        
Average Assets 1       43,174.3       37,881.6       33,548.1       30,932.2       27,584.3       14.0%       56.5%                        
Total Loans & Leasing       31,751.7       27,409.4       23,283.0       21,855.9       19,956.6       15.8%       59.1%                        
Securitized Loan Portfolio       1,512.8       2,039.8       2,057.3       2,784.6       2,506.5       -25.8%       -39.6%                        
Total Portfolio 2       33,264.5       29,449.2       25,340.2       24,640.6       22,463.2       13.0%       48.1%                        
Total Deposits       30,417.2       27,652.2       24,346.7       23,716.6       20,651.4       10.0%       47.3%                        
Shareholders' Equity       6,413.5       5,997.0       2,548.4       2,373.7       2,013.6       6.9%       218.5%                        
Average Shareholders' Equity 1       6,114.3       4,302.2       2,537.4       2,338.3       2,106.1       42.1%       190.3%                        
KEY INDICATORS       3Q16       2Q16       1Q16       4Q15       3Q15                       9M16       9M15        
                                                                                 
Profitability & Efficiency                                                                                
ROAE       28.6%       15.6%       27.5%       61.6%       36.7%                       23.7%       20.8%        
ROAA       4.0%       1.8%       2.1%       4.7%       2.8%                       2.7%       1.6%        
Net Interest Margin       20.5%       20.4%       20.0%       17.5%       18.9%                       20.4%       18.6%        
Net Financial Margin       19.0%       18.5%       17.4%       18.4%       16.0%                       18.4%       15.7%        
Net Fee Income Ratio       34.6%       35.6%       37.3%       38.6%       40.3%                       35.7%       40.6%        
Net Fee Income as a % of Administrative Expenses       55.4%       49.3%       50.5%       56.5%       54.4%                       51.8%       50.8%        
Efficiency Ratio       62.5%       72.1%       73.8%       68.2%       74.0%                       68.8%       79.9%        
Liquidity & Capital                                                                                
Loans to Total Deposits 3       104.4%       99.1%       95.6%       92.2%       96.6%                       -       -        
Total Equity as a % of Total Assets       14.4%       14.6%       7.3%       7.2%       7.2%                       -       -        
Regulatory Capital/ Risk Weighted Assets 4       13.0%       14.0%       9.3%       8.7%       8.5%                       -       -        
Proforma Consolidated Tier 1 Capital / Risk weighted assets 5       12.6%       13.5%       7.2%       6.7%       6.7%                       -       -        
Asset Quality                                                                                
NPL Ratio       3.0%       3.1%       2.7%       3.2%       3.1%                       -       -        
Allowances as a % of Total Loans       2.5%       2.6%       2.3%       2.9%       2.7%                       -       -        
Coverage Ratio       83.7%       83.2%       83.9%       89.7%       86.1%                       -       -        
Cost of Risk       3.7%       5.0%       3.4%       3.6%       2.1%                       4.1%       2.9%        
MACROECONOMIC RATIOS                                                                                
Retail Price Index (%) 6       2.7%       15.5%       11.9%       7.7%       5.6%                       -       -        
Pesos/US$ Exchange Rate       15.26       14.92       14.58       13.01       9.42                       -       -        
Badlar Interest Rate (eop)       22.2%       26.6%       30.8%       27.3%       21.1%                       -       -        
OPERATING DATA                                                                                
Customers (in millions)       2.2       2.2       2.1       2.1       2.1                                        
Access Points       325       325       325       325       326                       -       -        
Employees       4,911       4,910       4,884       4,843       4,714                       -       -        
 

Calculated on a daily basis.
1. Total Portfolio: Loans and Leasing before Allowances, Including Securitized Portfolio.
2. On Balance Sheet Loans/Total Deposits.
3. This ratio applies only to the Bank and CCF on a consolidated basis.
4. Includes $620 million Tier1 Capital retained at the holding company level available for injection in subsidiaries.
5. Source: City of Buenos Aires

3Q16 Earnings Call Dial-In Information

Hosted by:
  Patricio Supervielle, Chief Executive Officer & Chairman of the Board of Directors
Jorge Ramirez, Vice Chairman of the Board of Directors
Alejandra Naughton, Chief Financial Officer
Ana Bartesaghi, Treasurer & Investor Relations Officer
 
Date: Thursday, November 10, 2016
Time: 9:00 AM (US ET); 11:00 AM (Buenos Aires Time)
Dial-in Numbers: 1-877-407-0789 (U.S. and Canada), 1-201-689-8562 (International), 0-800-756-3429 (U.K), or 0800-444-6247 (Argentina)
Webcast:

http://public.viavid.com/index.php?id=121828
Replay: From Thursday, November 10, 2016 at 12:00 pm US ET through Thursday, November 24, 2016 at 11:59 pm US ET. Dial-in number: +1-844-512-2921 (U.S./Canada) or +1-412-317-6671 (international).

About Grupo Supervielle S.A. (NYSE:SUPV);(BCBA:SUPV)

Grupo Supervielle S.A. ("Supervielle") is a universal financial services group located in Argentina that owns the fifth largest private domestically-owned bank in terms of assets. Headquartered in Buenos Aires, Supervielle offers retail and corporate banking, treasury, consumer finance, insurance, asset management and other products and services nationwide to a broad customer base including: individuals, small and medium-sized enterprises and medium to large-sized companies. With origins dating back to 1887, Supervielle operates through a multi-brand and multi-channel platform with a strategic national footprint. As of September 30, 2016, Supervielle had total assets of AR$44.4 billion under Argentine Banking GAAP, 325 access points and over 2 million customers. Grupo Supervielle had 363,777,615 shares outstanding and a free float of 40.3% as of September 30, 2016. For information about Grupo Supervielle, visit www.gruposupervielle.com.

Safe Harbor Statement

This press release contains certain forward-looking statements that reflect the current views and/or expectations of Grupo Supervielle and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "seek," "future," "should" and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) changes in general economic, financial, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets, (ii) changes in regional, national and international business and economic conditions, including inflation, (iii) changes in interest rates and the cost of deposits, which may, among other things, affect margins, (iv) unanticipated increases in financing or other costs or the inability to obtain additional debt or equity financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities, (v) changes in government regulation, including tax and banking regulations, (vi) changes in the policies of Argentine authorities, (vii) adverse legal or regulatory disputes or proceedings, (viii) competition in banking and financial services, (ix) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of Grupo Supervielle, (x) increase in the allowances for loan losses, (xi) technological changes or an inability to implement new technologies, (xii) changes in consumer spending and saving habits, (xiii) the ability to implement our business strategy and (xiv) fluctuations in the exchange rate of the Peso. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Grupo Supervielle's filings with the U.S. Securities and Exchange Commission (SEC) and Comision Nacional de Valores (CNV). Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as the date of this document. Grupo Supervielle is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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