Grupo Supervielle SA (SUPV)SUPV

Grupo Supervielle S.A.: A Comprehensive Overview

Company Profile

Detailed History and Background

Grupo Supervielle S.A. (NYSE: SUPV) is a leading financial services group in Argentina with a rich history and strong brand recognition. Founded in 1887 as Banco Supervielle, the company has grown from its origins in the rural town of Pigüé to become a major player in the Argentine financial landscape. Today, Supervielle boasts an extensive network of over 295 branches, over 2,200 employees, and 1.3 million clients.

Description of the Company’s Core Business Areas

Supervielle operates within three core business areas:

• Financial Services: Offers retail, corporate, and SME banking products including checking accounts, loans, credit cards, foreign exchange, treasury, and investment products.

• Insurance: Provides insurance brokerage services through its subsidiary Supervielle Seguros, offering life, property and casualty, and automotive insurance.

• Wealth Management: Delivers asset management and wealth advisory services through Supervielle Asset Management.

Top Products and Market Share

Top Products and Offerings

Supervielle’s top product lines encompass:

•Personal Loans: Catering to individual needs with tailored loan products for various purposes.

•Credit Cards: Offering a diverse range of credit cards with varying rewards programs and benefits.

•Checking and Savings Accounts: Providing various options with competitive features and digital accessibility.

•Business Loans: Serving small and medium-sized enterprises with flexible loan packages for growth and investment.

•Investment Services: Assisting clients in building diversified investment portfolios through expert financial guidance.

Market Share

Supervielle holds a significant presence within the Argentine financial sector. As of November 2023:

• The company ranked as the 8th largest private bank in terms of total assets.

• It held a 4.3% market share of private sector loans.

• It controlled a 3.3% market share of total private sector deposits.

Performance against Competitors

While Supervielle trails behind larger competitors like Banco Macro and Santander Argentina in terms of overall asset size, its strong digital banking platform, customer-oriented approach, and product diversification have contributed to its growing market position. Notably, Supervielle boasts a higher return on equity (ROE) compared to its peers, suggesting efficient utilization of shareholder resources.

Total Addressable Market (TAM)

The Argentine banking sector, where Grupo Supervielle operates, presents a substantial market opportunity. With an estimated 75% of adults holding a bank account, there remains ample potential for further market penetration, driven by increasing financial inclusion initiatives and digital adoption. Additionally, the growing number of micro, small, and medium-sized businesses (MSMEs) presents another avenue for growth within Argentina’s SME financing segment.

Financial Performance

Revenue, Net Income, Profit Margins & EPS

Revenue: Supervielle’s revenue for the fiscal year ended June 2023 reached ARS 380.2 billion, reflecting a YoY increase of 46%.

Net Income: Net income for FY23 reached ARS 47.3 billion, indicating a YoY growth of 76.8%.

Profit Margins: Net interest margin stood at 38.2% for FY23, while operating margin reached a healthy 32.5%, demonstrating the company’s efficient cost management strategies.

Earnings Per Share (EPS): EPS for FY23 reached ARS 3.31.

Cash Flows & Balance Sheet

Supervielle boasts a healthy financial profile. Operating activities generated significant cash flows in FY23, contributing to the company’s strong liquidity position. The balance sheet reflects robust capital adequacy ratios with a Tier 1 capital ratio of over 30%.

Dividends and Shareholder Returns

Dividend History

Grupo Supervielle has historically distributed dividends twice per year. In November 2023, the company announced a 50% increase in its annual dividend payout, reflecting its confidence in future profitability. The forward annualized dividend yield stands at approximately 4%, offering investors attractive income potential.

Shareholder Returns

Despite a challenging macroeconomic environment in Argentina in recent years, SUPV stock has delivered positive long-term returns to its shareholders. The average annual shareholder return stood at 7.8% in the 3 years prior to November 2023, exceeding the performance of the S&P Merval Index.

Growth Trajectory

Growth Analysis:

Over the past 5 years, Supervielle has exhibited consistent revenue and earnings growth with a compound annual growth rate (CAGR) of over 25% for revenue and a CAGR of nearly 30% for net income. This robust financial performance reflects market share gains in key business lines, strategic acquisitions, and effective expense optimization strategies.