Executive Summary / Key Takeaways

• Grupo Supervielle is strategically reorienting its business towards higher-margin retail and SME lending, capitalizing on Argentina's low credit penetration and anticipated post-election economic recovery.
• A robust and integrated digital ecosystem, featuring an advanced API infrastructure, a Gen AI-powered WhatsApp channel, Tienda Supervielle, and the InvertirOnline (IOL) brokerage platform, serves as a key differentiator, driving customer engagement, deposit growth, and cross-selling opportunities.
• Despite near-term macroeconomic headwinds, including election-related uncertainty and high real interest rates, the company maintains a solid capital position and expects its Return on Equity (ROE) to improve towards year-end 2025 and significantly into 2026.
• Innovative funding strategies, such as remunerated accounts, are enhancing deposit stability and competitive positioning against emerging fintechs, while disciplined cost management is strengthening operating leverage.
• Management projects substantial real loan growth of 40-50% and deposit growth of 20-30% for 2025, underpinned by expectations of stabilizing macroeconomic conditions, declining inflation, and a deepening capital market following anticipated structural reforms.

Setting the Stage: Argentina's Financial Landscape and Supervielle's Strategic Evolution

Grupo Supervielle S.A., a universal financial services group founded in 1887 in Buenos Aires, is undergoing a profound transformation. Historically, Argentina's banking sector has grappled with chronic inflation, populist policies, and Central Bank measures that stifled lending and led to financial disintermediation. With credit penetration currently at a mere 6% of GDP, the market presents a significant, untapped growth opportunity. Supervielle's strategic response, initiated with a digital transformation in 2020, has positioned it as a more agile, tech-driven institution.

The company is now deliberately rebalancing its asset mix, shifting away from government securities towards private sector credit, particularly higher-margin retail and SME loans. By the second quarter of 2025, loans constituted 48% of total assets, a notable 25 percentage point increase since December 2023, while the investment portfolio was reduced by 28 percentage points to 22% of assets. This strategic pivot is fundamental to supporting private sector credit growth and unlocking value in a recovering Argentine economy.

Technological Edge: Driving Engagement and Efficiency

Supervielle's core differentiation lies in its robust and integrated digital ecosystem, which seamlessly blends traditional banking strengths with fintech agility. This ecosystem is built upon an advanced API infrastructure, a Gen AI-powered WhatsApp channel, the Tienda Supervielle online store, and the leading InvertirOnline (IOL) brokerage platform.

The company's API infrastructure, developed over the past 18 months, has dramatically improved operational efficiency, enabling cash-in and cash-out transactions to be completed in seconds, a significant enhancement from previous minute-long processes. The Gen AI-powered WhatsApp channel, recently augmented with transactional capabilities such as credit card purchase authorizations and mobile top-ups, registered over 150,000 interactions in July 2025, demonstrating exponential growth and its role as a scalable convenience service touchpoint. Furthermore, Tienda Supervielle, hosted on Mercado Libre (MELI) and integrated into the Supervielle app, has surpassed 0.5 million sessions since its launch, facilitating transactions for over 175,000 customers using more than 400,000 registered credit cards. These platforms are embedding the bank into clients' daily lives, fostering engagement beyond conventional banking interactions.

These technological advancements are not merely operational improvements; they form a critical competitive moat. They enhance customer experience, drive operational efficiency, and are instrumental in attracting and retaining clients, expanding the deposit base, and diversifying revenue streams. This technological roadmap is central to Supervielle's strategy to capture growth opportunities as Argentina embarks on a renewed expansion cycle.

A Shifting Portfolio: Fueling Credit Growth and Profitability

Supervielle's strategic reorientation is evident across its core business segments. Retail banking is a cornerstone, with retail loan growth moderating to 2% sequentially in Q2 2025 but surging 130% year-on-year, comprising 47% of the total loan book. This growth is significantly bolstered by innovative remunerated accounts, which have seen payroll-linked balances increase 27% in pesos and 18% in U.S. dollars sequentially, with new payroll accounts up 53% year-to-date.

Commercial lending also demonstrated strong momentum, growing 23% quarter-on-quarter in Q2 2025 and now representing 53% of the portfolio. This expansion was driven by foreign trade loans, promissory notes, and overdrafts, with SME checking accounts increasing 14% in pesos and 43% in dollars. The company strategically targets high-growth industries such as oil and gas and mining, reinforcing its presence through tailored financial solutions and strategic partnerships.

InvertirOnline (IOL), the group's leading digital retail brokerage platform, is a significant contributor to fee income, accounting for 20% in Q4 2024, and 15% of Banco Supervielle's net income. IOL boasts 1.7 million customers, with a substantial cross-sell opportunity as only 3% currently bank with Supervielle. New synergies are already yielding results, with over 4,700 IOL clients placing $28 million in dollar term deposits at the bank within four weeks of launch. IOL's assets under custody reached $1.7 billion in Q4 2024, marking a 44% year-on-year increase. The asset management segment, via IOL, successfully launched a U.S. dollar-denominated mutual fund, which garnered $126 million in AUM in just four months, ranking as the fourth largest in its asset class in Argentina. The insurance operation also achieved 36% quarterly growth in car insurance in Q3 2024, with further penetration expected.

Financial Performance: Resilience Amidst Transition

Grupo Supervielle reported a net income of ARS 13.6 billion in Q2 2025, representing a 62% sequential increase, with a Return on Equity (ROE) of 6%. This performance was primarily driven by a 10% increase in client net financial income, supported by wider spreads on higher loan volumes, and a 15% rise in market-related net financial income. However, net fee income saw a 13% decrease in Q2 2025, partly due to unadjusted banking fees and a lower contribution from the brokerage business following the lifting of FX restrictions.

The Net Interest Margin (NIM) expanded 160 basis points sequentially to 20.8% in Q2 2025, supported by strong spreads in both client and market-related portfolios. Loan portfolio margins improved to 22.8%. Despite these positive trends, operating expenses increased 4% sequentially in Q2 2025, though they declined 11% year-to-date, reflecting disciplined cost management and structural simplification efforts.

Asset quality, while showing some normalization, remains within acceptable parameters. The Non-Performing Loan (NPL) ratio stood at 2.7% in Q2 2025, consistent with historical and industry levels. Retail delinquency reached 4.5%, reflecting credit normalization after rapid expansion, while corporate and SME NPLs remained low at 1.4%. Coverage for NPLs is prudent at 130%. Provisions rose 32% sequentially to ARS 44.5 billion, increasing the net cost of risk to 5.5%.

Total funding grew 30% year-on-year and 6% sequentially, significantly bolstered by strong U.S. dollar deposit inflows. U.S. dollar deposits reached a record $943 million in Q2 2025, further exceeding $1.1 billion in July, underscoring both the company's competitive position and client trust. The loan-to-deposit ratio increased to nearly 72%, with leverage at 6.5x, well below historical levels, providing ample capacity for continued portfolio expansion.

Competitive Arena: Differentiating in a Dynamic Market

Supervielle operates in a dynamic Argentine banking sector, competing with established players such as Banco Macro (BMA), Banco de Galicia (GGAL), and BBVA Argentina (BBAR), as well as a growing number of neobanks and big tech entrants. The company's extensive branch network and diverse product offerings provide a solid foundation for its competitive strategy.

Supervielle's early adoption of remunerated accounts, being the first bank in Argentina to do so, is a strategic move to anticipate fintech competition and attract deposits. This initiative, along with its integrated digital platforms like Tienda Supervielle and the AI-powered WhatsApp channel, enhances customer experience and operational efficiency, differentiating it from traditional banks and enabling it to compete effectively with agile fintechs. While international players and neobanks often concentrate on individuals, Supervielle maintains a balanced approach, anchoring its strategy in comprehensive services for SMEs (including cash management, trade finance, and leasing) and payroll accounts. This allows the company to carve out distinct competitive niches. Its strong market share gains in U.S. dollar deposits, increasing by 100 basis points over the past 12 months, highlight its competitive strength and client trust.

The lifting of FX restrictions has intensified competition for IOL from banks in foreign exchange transactions. However, IOL's strong value proposition and market leadership position it well to capitalize on a deepening capital market as macroeconomic conditions stabilize. Management believes its value proposition remains strong and it is leading in the market.

Outlook and Guidance: Charting a Course for Growth

Grupo Supervielle has updated its 2025 perspectives, reflecting the election year and a longer transition towards a more loan-centric balance sheet into 2026. Management's 2025 projections are based on an anticipated GDP increase of 4%-5%, inflation receding to around 30%, and the Tamar interest rate stabilizing at 25% by year-end. Interest rates are expected to ease after the October elections.

Real loan growth for 2025 is projected between 40% and 50%, contingent on monetary policy and regulatory developments, with a more balanced mix between retail and corporate loans. Personal loans and car loans are expected to be the most dynamic in the retail segment, while medium-sized corporates, particularly in sectors like oil and gas, will drive commercial growth. Total deposits are anticipated to grow 20%-30%, with continued improvement in the loan-to-deposit ratio, expected to reach 70% in 2025. Further share gains in U.S. dollar deposit balances are also anticipated.

The NPL ratio is expected to stabilize at historical levels between 3% and 3.5% by year-end 2025, with the net cost of risk in the 5%-5.5% range, reflecting ongoing credit normalization. Management believes the cost of risk peaked in Q2 2025 and should remain stable within this range into 2026. Net Interest Margin (NIM) is expected to trend between 18% and 20%, slightly below 2024 levels, as inflation continues to decline, leverage increases, and restrictive monetary policy persists.

Net fee income is projected to grow 10% in real terms for 2025, driven by higher bank fees, asset management growth, and improved insurance penetration. Operating expenses are expected to contract between 5% and 8%, leading to stronger operating leverage. Return on Equity (ROE) is anticipated to improve towards year-end 2025 to a range of 5%-10%, though this is below original full-year guidance due to a longer-than-expected transition. However, ROE is projected to increase to 15% in 2026, potentially reaching 15%-20% by Q4 2026. The CET1 ratio is anticipated to close 2025 between 12% and 13%. There is potential for upside if regulators approve Basel III operational risk treatment for Group 2 banks, which would have resulted in a CET1 ratio of approximately 16.7% as of June 30, 2025.

Risks and Considerations: Navigating Macroeconomic Realities

While the outlook is optimistic, several risks warrant investor attention. Election-related uncertainty, tight peso liquidity, and high real interest rates remain near-term headwinds. The current real interest rates are unprecedented and considered unsustainable in the long term, posing potential pressure on SMEs (working capital) and corporates (short-term funding) if prolonged.

The increase in NPLs and cost of risk reflects a normalization of credit following rapid retail expansion and a behavioral shift among customers who no longer expect inflation to dilute real installment terms. Although delinquency levels remain within pricing assumptions, this trend necessitates continuous adaptation of underwriting and collection strategies. Regulatory changes, particularly concerning Basel III operational risk treatment, can impact capital ratios. While management is optimistic about a favorable review, the current rule has a punitive effect on medium-sized banks. Finally, the entry of new players, including neobanks and big techs, intensifies competition, particularly in the individual segment, and the lifting of FX restrictions means IOL now competes directly with banks for this business.

Conclusion

Grupo Supervielle is strategically positioned to capitalize on Argentina's nascent economic recovery and the significant opportunities presented by its low credit penetration. Through a disciplined rebalancing of its asset portfolio towards higher-margin retail and SME loans, coupled with a robust and continuously evolving digital ecosystem, the company is building a foundation for sustainable, profitable growth. While macroeconomic headwinds and competitive pressures present challenges, Supervielle's proactive funding strategies, stringent cost management, and clear technological differentiation underscore its resilience. The anticipated improvement in ROE towards year-end 2025 and into 2026, alongside projected strong loan and deposit growth, suggests a compelling investment thesis for those looking to participate in Argentina's financial resurgence, driven by a strategic vision and technological leadership.