UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
ANNUAL REPORT
PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2023
Commission file number 001-37777
GRUPO SUPERVIELLE S.A.
(Exact name of Registrant as specified in its charter)
SUPERVIELLE GROUP S.A.
(Translation of Registrant’s name into English)
REPUBLIC OF ARGENTINA
(Jurisdiction of incorporation or organization)
Reconquista 330
C1003ABG Buenos Aires
Republic of Argentina
(Address of principal executive offices)
Mariano Biglia
Reconquista 330
C1003ABG Buenos Aires
Republic of Argentina
Tel: 54-11-4340-3181
Email: mariano.biglia@supervielle.com.ar
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
American Depositary Shares, each
representing 5 Class B shares of Grupo
Supervielle S.A.
Class B shares of Grupo Supervielle S.A.
Trading
Symbol(s)
SUPV
Name of each exchange
on which registered
New York Stock Exchange
SUPV
New York Stock Exchange*
* Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the
New York Stock Exchange.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
The number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2023 (excluding
shares held by the Company’s treasury as of December 31, 2023) was:
Title of class
Class B ordinary shares, nominal value Ps.1.00 per share
Class A ordinary shares, nominal value Ps.1.00 per share
Number of shares outstanding
380,933,642
61,738,188
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ☐ No ☒
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company”
in Rule 12b-2 of the Exchange Act.
Large accelerated Filer
Non-accelerated Filer
☐
☐
Accelerated Filer
Emerging Growth Company
☒
☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of
the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by checkmark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued
by the International Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. Item 17 ☐ Item 18 ☐
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes ☐ No ☒
TABLE OF CONTENTS
Page
Certain Defined Terms and Conventions
Presentation of Financial and Other Information
Forward-Looking Statements
PART I
Item 1. Identity of Directors, Senior Management and Advisors
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information
Item 3.A [Reserved]
Item 3.B Capitalization and indebtedness
Item 3.C Reasons for the offer and use of proceeds
Item 3.D Risk Factors
Item 4. Information of the Company
Item 4.A History and development of the Company
Item 4.B Business Overview
Item 4.C Organizational structure
Item 4.D Property, plants and equipment
Item 4.E Selected Statistical Information
Item 5. Operating and Financial Review and Prospects
Item 5.A Operating Results
Item 5.B Liquidity and Capital Resources
Item 5.C Research and Development, patents and licenses, etc.
Item 5.D Trend Information
Item 5.E Critical Accounting Estimates
Item 6. Directors, Senior Management and Employees
Item 7. Shareholders and Related Party Transactions
Item 7.A Major Shareholders
Item 7.B Related Party Transactions
Item 7.C Interests of Experts and Counsel
Item 8. Financial Information
Item 8.A Consolidated Statements and Other Financial Information.
Item 8.B Significant Changes
Item 9. The Offer and Listing
Item 9.A Offer and Listing Details
Item 9.B Plan of Distribution
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1
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1
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1
23
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28
109
113
113
135
135
157
164
164
166
167
195
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199
199
199
203
203
203
203
Item 9.C Markets
Item 9.D Selling Shareholders
Item 9.E Dilution
Item 9.F Expenses of the Issue
Item 10. Additional Information
Item 10.A Share Capital
Item 10.B Memorandum and Articles of Association
Item 10.C Material Contracts
Item 10.D Exchange Controls
Item 10.E Taxation
Item 10.F Dividends and Paying Agents
Item 10.G Statement by Experts
Item 10.H Documents on Display
Item 10.I Subsidiary Information
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Item 12. Description of Securities Other Than Equity Securities
Item 12.A Debt Securities
Item 12.B Warrants and Rights
Item 12.C Other Securities
Item 12.D American Depositary Shares
PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16. [Reserved]
Item 16.A Audit committee financial expert
Item 16.B Code of Ethics
Item 16.C Principal Accountant Fees and Services
Item 16.D Exemptions from the Listing Standards for Audit Committees
Item 16.E Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Item 16.F Change in Registrant’s Certifying Accountant
Item 16.G Corporate Governance
Item 16.H Mine Safety Disclosure
Item 16.I Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Item 16.K Cybersecurity
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibit Index
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INTRODUCTION
CERTAIN DEFINED TERMS AND CONVENTIONS
In this annual report, we use the terms “we,” “us,” “our,” “the Company” and the “Group” to refer to Grupo Supervielle S.A.
and its consolidated subsidiaries, including Banco Supervielle S.A., unless otherwise indicated. References to “Grupo Supervielle” mean
Grupo Supervielle S.A. References to the “Bank” mean Banco Supervielle S.A. and its consolidated subsidiaries. References to
“Supervielle Seguros” mean Supervielle Seguros S.A. References to “Supervielle Productores Asesores de Seguros” mean Supervielle
Productores Asesores de Seguros S.A. References to “SAM” mean Supervielle Asset Management S.A. References to “Supervielle
Agente de Negociacion” mean Supervielle Agente de Negociación S.A.U. References to “IOL invertironline” mean InvertirOnline
S.A.U. and Portal Integral de Inversiones S.A.U. References to “Espacio Cordial” or “Cordial Servicios” mean Espacio Cordial de
Servicios S.A. References to “MILA” mean Micro Lending S.A.U. References to “IUDÚ” mean IUDÚ Compañía Financiera S.A.
References to “Tarjeta” mean Tarjeta Automática S.A. References to “Bolsillo Digital” mean Bolsillo Digital S.A.U. References to
“Sofital” mean Sofital S.A.U.F.e I. References to “IOL Holding” mean IOL Holding S.A. References to “Dólar IOL” mean Dólar IOL
S.A.
References to “Class A shares” are to shares of our Class A common stock, with a par value of Ps.1.00 per share, references to
“Class B shares” are to shares of our Class B common stock, with a par value of Ps.1.00 per share, and references to “ADSs” are to
American depositary shares, each representing five Class B shares.
The term “Argentina” refers to the Republic of Argentina. The terms “Argentine government,” the “government” or the
“Government” refers to the Federal Government of Argentina, the terms “Central Bank” or the “Argentine Central Bank” refer to the
Banco Central de la República Argentina, and the term “CNV” refers to the Argentine Comisión Nacional de Valores, which is the
Argentine securities and capital markets regulator. The term “ByMA” refers to Bolsas y Mercados Argentinos S.A., which is the
Argentine securities exchange. The term “MAE” refers to Mercado Abierto Electrónico S.A., which is the Argentine
electronic securities and foreign-currency trading exchange. The term “Argentine Capital Markets Law” refers to Law No. 26,831, as
amended and supplemented. The term “Argentine Negotiable Obligations Law” refers to Law No. 23,576, as amended and
supplemented. The term “Argentine General Corporations Law” refers to Law No. 19,550, as amended and supplemented. The term
“Argentine Productive Financing Law” refers to Law No. 27,440, as amended and supplemented.
“Argentine GAAP” refers to generally accepted accounting principles in Argentina and “Argentine Banking GAAP” refers to
the accounting rules of the Central Bank. “IASB” refers to International Accounting Standards Board and “IFRS” refers to the
International Financial Reporting Standards, as issued by the IASB.
The term “GDP” refers to gross domestic product and all references in this annual report to GDP growth are to real GDP
growth. The term “CPI” refers to the consumer price index and the term “WPI” refers to the wholesale price index.
The term “customers” refers to individuals that have at least one active product with us and made at least one transaction in the
previous 90 days, and entities that have at least one active checking account with us.
The term “digital customers” refers to individuals that use our online banking services, our mobile app or our senior citizens
app during the previous 90 days.
The term “Argentine banks” refers to banks that operate in Argentina. Unless the context otherwise requires, the term “financial
institutions” refers to institutions regulated by the Central Bank. The term “Argentine private banks” refers to banks that are not
controlled or owned by the Government or any Argentine provincial, municipality or city government.
For information from January 1, 2021 to December 31, 2021, the term “small businesses” refers to individuals and businesses
with annual sales up to Ps.300 million, the term “SMEs” refers to individuals and businesses with annual sales over Ps.300 million and
below Ps.1.5 billion, the term “middle-market companies” refers to companies with annual sales over Ps.1.5 billion and below Ps.3
billion and the term “large corporates” refers to companies with annual sales over Ps.3 billion. For information from January 1, 2022 to
December 31, 2022, the term “small businesses” refers to individuals and businesses with annual sales up to Ps.300 million, the term
“SMEs” refers to individuals and businesses with annual sales over Ps.300 million and below Ps.3 billion, the term “middle-market and
large companies” refers to companies with annual sales over Ps.3 billion. For information from January 1, 2023 to December 31, 2023,
the term “small businesses” refers to individuals and businesses with annual sales up to Ps.500 million, the term “SMEs” refers to
individuals and businesses with annual sales over Ps.500 million and below Ps.5 billion, the term “middle-market and large companies”
iii
refers to companies with annual sales over Ps.5 billion. Since January 1, 2024, the term “small businesses” refers to individuals and
businesses with annual sales up to Ps.1.5 billion, the term “SMEs” refers to individuals and businesses with annual sales over Ps.1.5
billion and below Ps.10 billion, and the term “middle-market and large companies” refers to companies with annual sales over Ps.10
billion. Although the main criteria is annual sales, in some cases the definitions also consider whether these individuals, businesses and
companies provide adequate customer service models pursuant to the requirements which apply to them.
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
Financial Statements
This annual report contains our audited consolidated financial statements as of December, 2023 and 2022, and for the years
ended December 31, 2023, 2022 and 2021 (our “audited consolidated financial statements”), which have been audited by Price
Waterhouse & Co. S.R.L., Buenos Aires, Argentina, a member firm of PricewaterhouseCoopers, an independent registered public
accounting firm, whose report is included herein.
“Financial Reporting in Hyperinflationary Economies” (IAS 29) requires that the financial statements of an entity whose
functional currency is one of a hyperinflationary economy be measured in terms of the current unit of measurement at the closing date
of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. This requirement
also includes the comparative information in financial statements. Our audited consolidated financial statements are stated in the
measurement unit current as of December 31, 2023.
We are subject to the provisions of Article 2 – Section I – Chapter I of Title IV (“Periodical Reporting Requirements”) of the
rules issued by the CNV according to General Resolution No. 622/2013, as amended and supplemented (the “CNV Rules”), and we are
required to present our financial statements in accordance with the Argentine Banking GAAP. The Argentine Central Bank, through
Communications “A” 5541, as amended, set forth a convergence plan towards the application of IFRS as issued by the IASB and the
interpretations issued by the International Financial Reporting Standards Committee (“IFRIC”), for entities under its supervision,
effective for fiscal years beginning on or after January 1, 2018, subject to the following exceptions:
•
of the public sector;
the temporary exception from IFRS 9 “Financial Instruments” with respect to expected credit loss of financial instruments
•
•
option to classify holdings in dual bonds at amortized cost or fair value through other comprehensive income; and
the application of IFRS 17 "Insurance Contracts" will be optional until the BCRA makes it mandatory.
Our consolidated financial statements contained in this annual report differ in certain material respects from our financial
statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 prepared in accordance with
Argentine Banking GAAP and filed with the CNV.
Unless otherwise indicated, all financial information of our company included in this annual report is stated on a consolidated
basis under IFRS and presented in terms of the measuring unit current at the end of the latest reporting period.
Overview of IAS 29
IAS 29 establishes the conditions under which an entity shall restate its financial statements if it is located in an economic
environment considered hyperinflationary. This standard requires that the financial statements of an entity that reports in the currency
of a highly inflationary economy shall be stated in terms of the measuring unit current at the closing date of the latest reporting period,
regardless of whether they are based on a historical cost approach or a current cost approach. To this end, in general terms, the inflation
rate must be computed in the non-monetary items as of the acquisition date or the revaluation date, as applicable. These requirements
also comprise the comparative information of the financial statements.
In order to conclude whether an economy is categorized as highly inflationary, IAS 29 outlines a series of factors to be
considered, including the existence of an accumulated inflation rate in three years that is approximate to or exceeds 100%. Argentina
has reported a cumulative three-year inflation rate significantly higher than 100% and therefore financial information must be adjusted
for inflation in accordance with IAS 29. Consequently, we have applied IAS 29 to our audited consolidated financial statements.
iv
Adjustment for inflation in the initial balances has been calculated considering the indexes based on the price indexes published
by Argentina’s National Statistics Institute (Instituto Nacional de Estadística y Censos or “INDEC,” per its initials in Spanish). The
Group determined to use the Internal Wholesale Price Index (IWPI) to restate balances and transactions until the year 2016. For
November and December 2015, Grupo Supervielle used the average variation of the CPI of the City of Buenos Aires since during these
two months there were no IWPI measurements available at a national level. From January 2017 onwards, Grupo Supervielle used the
national CPI.
The principal inflation adjustment procedures are the following:
• Monetary assets and liabilities that are recorded in the current currency as of the financial position’s closing date are not
restated because they are already stated in terms of the currency unit current as of the date of the financial statements.
• Non-monetary assets and liabilities are recorded at cost as of the financial position date, and equity components are restated
applying the relevant adjustment ratios.
• All items in the consolidated income statement are restated applying the relevant conversion factors, as described in
Note 1.1.2 to our consolidated financial statements contained in this annual report.
• The effect of inflation in Grupo Supervielle’s net monetary position is included in the consolidated income statement, in
the item “Results from exposure to changes in the purchasing power of money.”
• Comparative figures have been adjusted for inflation following the procedure explained in the previous bullets.
• Upon initially applying inflation adjustment, the equity accounts were restated as follows:
o Capital stock was restated as from the date of subscription or the date of the most recent inflation adjustment for
accounting purposes, whichever is later.
o The resulting amount was included in the “Results from exposure to changes in the purchasing power of money”
account.
o Consolidated Statement of Comprehensive Income were restated as from each accounting allocation.
o The legal reserve and other reserves in the statement of Changes in Shareholders’ Equity were not restated as of the
initial application date.
Certain Financial Data
The term “ROAE” refers to return on average shareholders’ equity, calculated based on daily averages. The term “ROAA”
refers to return on average assets, calculated based on daily averages. ROAE and ROAA are frequently used by financial institutions as
benchmarks to measure profitability compared to peers but not as benchmarks to determine returns for investors, which is affected by
multiple factors that ROAE and ROAA do not consider.
Currencies and Rounding
The terms “U.S. dollar” and “U.S. dollars” and the symbol “U.S.$” refer to the legal currency of the United States. The terms
“Peso” and “Pesos” and the symbol “Ps.” and “$” refer to the legal currency of Argentina.
v
We have translated certain of the Peso amounts contained in this annual report into U.S. dollars for convenience purposes only.
Unless otherwise indicated, the rate used to translate such amounts as of December 31, 2023 was Ps.808.48 to U.S.$1.00, which was
the reference exchange rate reported by the Central Bank for U.S. dollars as of December 31, 2023. The Federal Reserve Bank of New
York does not report a noon buying rate for Pesos. The U.S. dollar equivalent information presented in this annual report is provided
solely for the convenience of investors and should not be construed as implying that the Peso amounts represent, or could have been or
could be converted into, U.S. dollars at such rates or at any other rate. The reference exchange rate reported by the Central Bank was
Ps.873.75 per U.S.$1.00 as of April 25, 2024. See “Item 3.D. Risk Factors—Risks Relating to Argentina—Fluctuations in the value of
the Peso could adversely affect the Argentine economy” and “Item 3.D. Risk Factors—Risks Relating to Argentina—The maintenance
or implementation of additional exchange controls regulations, restrictions on transfers abroad and capital inflow restrictions could limit
the availability of international credit and could threaten the financial system, which may adversely affect the Argentine economy.”
Certain figures included in this annual report have been subject to rounding adjustments. Accordingly, figures shown as totals
in certain tables may not be an arithmetic aggregation of the figures that precede them.
Market Share and Other Information
We make statements in this annual report about our competitive position and market share in, and the market size of, the
Argentine banking industry. We have made these statements on the basis of statistics and other information derived from the Central
Bank’s publications and other third-party sources that we believe are reliable. Although we have no reason to believe any of this
information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market
share and market size or market growth data provided by third parties or by industry or general publications.
FORWARD-LOOKING STATEMENTS
This annual report contains estimates and forward-looking statements, principally in “Item 3.D. Risk Factors,” “Item 5.A.
Operating Results,” and “Item 4.B. Business Overview.” We have based these forward-looking statements largely on our current beliefs,
expectations and projections about future courses of action, events and financial trends affecting our business. Many important factors,
in addition to those discussed elsewhere in this annual report, could cause our actual results to differ substantially from those anticipated
in our forward-looking statements, including, among others:
(i)
changes in general economic, financial, business, political, legal, social or other conditions in Argentina, including whether the
new administration will be able to effectively implement its announced policies;
(ii)
fluctuations in the foreign exchange reserves, the exchange rate of the Peso and inflation;
(iii)
changes in foreign exchange regulations and exchange control measures implemented by the Central Bank and the Argentine
government;
(iv)
changes in interest rates and the cost of deposits, which may, among other things, affect margins;
(v)
the compliance of the commitments and conditions included in the agreement with the International Monetary Fund (“IMF”);
(vi)
(vii)
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;
changes in capital markets in general that may affect policies or attitudes toward lending to or investing in Argentina or
Argentine companies, including expected or unexpected volatility in domestic and international financial markets;
(viii)
changes in government regulation, including tax and banking regulations;
(ix)
the impact of pandemics, epidemics and other health events, including the coronavirus 2019 (“COVID-19”) and government
measures taken in response to them, on economic activity, our results of operation and our operations;
(x)
adverse legal or regulatory disputes or proceedings;
(xi)
credit and other risks of lending, such as increases in defaults by borrowers;
vi
(xii)
exposure to Argentine government liabilities and fluctuations and declines in the value of Argentine public debt;
(xiii)
increased competition in the banking, financial services, credit card services, asset management and related industries;
(xiv)
a loss of market share by any of our main businesses;
(xv)
increase in the allowances for loan losses;
(xvi)
technological changes or an inability to implement new technologies, changes in consumer spending and saving habits;
(xvii)
threats of cybersecurity breaches;
(xviii) ability to implement our business strategy; and
(xix)
other factors discussed under “Item 3.D. Risk Factors” in this annual report.
The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “forecast” and similar
words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or
assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth
opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they
were made, and we do not undertake any obligation to update publicly or to revise any forward-looking statements after we distribute
this annual report because of new information, future events or other factors, except as required by applicable law. In light of the risks
and uncertainties described above, the forward-looking events and circumstances discussed in this annual report might not occur and do
not constitute guarantees of future performance. Because of these uncertainties, you should not make any investment decisions based
on these estimates and forward-looking statements.
vii
PART I
Item 1.
Identity of Directors, Senior Management and Advisors
Not applicable.
Item 2.
Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
Item 3.A
[Reserved]
Item 3.B
Capitalization and indebtedness
Not applicable.
Item 3.C Reasons for the offer and use of proceeds
Not applicable.
Item 3.D Risk Factors
Summary of Risk Factors
The following summarizes some, but not all, of the principal risks provided below. Please carefully consider all of the
information discussed in this Item 3.D “Risk Factors” in this annual report for a detailed description of these and other risks.
•
•
•
•
•
•
•
•
•
Our business is largely dependent upon macroeconomic, political, regulatory and social conditions in Argentina.
If the current levels of inflation continue or increase, the Argentine economy and our business and financial condition
could be adversely affected.
A decrease in international prices for the main commodities exported by Argentina or a significant decline in their
production could negatively affect Argentina’s economic condition.
Persistent fiscal deficit could result in long lasting adverse consequences for the Argentine economy, which in turn
could adversely affect our business, financial condition and results of operations.
Fluctuations in the value of the Peso could adversely affect the Argentine economy.
The maintenance or implementation of additional exchange controls regulations, restrictions on transfers abroad and
capital inflow restrictions could limit the availability of international credit and could threaten the financial system,
which may adversely affect the Argentine economy.
The Argentine government’s ability to obtain financing from the international loan and capital markets may be limited
or costly, which may impair its ability to implement reforms and foster economic growth.
Government intervention in the Argentine economy could undermine business and investor confidence.
Developments in other countries may adversely affect the Argentine economy and our financial performance.
1
•
•
•
•
•
•
•
•
•
•
•
•
We operate in a highly regulated environment, and our operations are subject to regulations adopted, and measures
taken, by several regulatory agencies.
The stability of the Argentine financial system depends upon the ability of financial institutions, including the Bank,
the main subsidiary of the Group, to retain the confidence of depositors.
The asset quality of financial institutions, including ourselves, may deteriorate if the Argentine private sector continues
to be affected by adverse macroecononic conditions in Argentina.
Argentine financial institutions, including us, continue to have significant exposure to public sector debt, including
securities issued by the Argentine Central Bank, and its repayment or refinancing capacity, which in periods of
uncertainty may negatively affect their results of operations.
Enforcement of creditors’ rights in Argentina may be limited, costly and lengthy.
Changes in market conditions and any associated risks, including interest rate and currency exchange volatility, could
materially and adversely affect our consolidated financial condition and results of operations.
Reduced spreads between interest rates on loans and those on deposits could adversely affect the Bank’s profitability.
Due to our exposure to middle and lower-middle-income individuals and SMEs, the quality of our consolidated loan
portfolio is more susceptible to economic downturns and recessions.
Our estimates and established reserves for credit risk and potential credit losses may prove to be insufficient, which
may materially and adversely affect our asset quality and our financial condition and results of operations.
The Bank’s revenues from its business with senior citizens could decrease or cease to grow if the agreement with
ANSES is terminated or not renewed.
Cybersecurity events could negatively affect our reputation, our financial condition and our results of operations.
Our controlling shareholder has the ability to direct our business, and potential conflicts of interest could arise.
You should carefully consider the risks described below, as well as the other information in this annual report. Our business,
results of operations, financial condition or prospects could be materially and adversely affected if any of these risks occurs. In general,
investors take more risk when they invest in the securities of issuers in emerging countries such as Argentina than when they invest in
the securities of issuers in the United States and other more developed markets. The risks described below are those known to us and
that as of the date of this annual report believe may materially affect us.
Risks Relating to Argentina
Our business is largely dependent upon macroeconomic, political, regulatory and social conditions in Argentina.
Substantially all of our operations, property and customers are located in Argentina. As a result, the quality of our assets, our
financial condition and the results of our operations are dependent upon the macroeconomic, regulatory, social and political conditions
prevailing in Argentina from time to time. These conditions include growth rates, inflation rates, exchange rates, taxes, foreign exchange
controls, changes to interest rates, changes to government policies, social instability, and other political, economic or international
developments either taking place in, or otherwise affecting, Argentina.
Developments in economic, political, regulatory and social conditions in Argentina, and measures taken by the Argentine
government, have had and are expected to continue to have a significant impact on our business, results of operations and financial
condition. Argentina is an emerging country and investing in such markets generally carries additional risks.
2
The Argentine economy has experienced significant volatility in the past decades, including multiple periods of low or negative
growth and high levels of inflation and currency depreciation, and may experience further volatility in the future. According to data
published by the INDEC, Argentina’s GDP in 2022 increased by 5.0% compared to 2021. In 2023, Argentina’s GDP decreased by 1.6%
compared to 2022, according to data published by the INDEC, primarily due to the drought which mainly affected the agricultural
production in Argentina, which decreased 20.4% compared to 2022.
Argentine economic conditions are dependent on a variety of factors, including the following: (i) domestic production,
international demand and prices for Argentina’s principal commodity exports; (ii) the competitiveness and efficiency of domestic
industries and services; (iii) the stability and competitiveness of the Peso against foreign currencies; (iv) the rate of inflation; (v) the
government’s fiscal deficits; (vi) the government’s public debt levels; (vii) foreign and domestic investment and financing; and
(viii) governmental policies and the legal and regulatory environment. Government policies and regulation –which at times have been
implemented through informal or de facto measures and have been subject to radical shifts– that have had a significant impact on the
Argentine economy in the past, have included, among others: (i) monetary policy, including exchange controls, capital controls, high
interest rates and a variety of measures to curb inflation; (ii) restrictions on exports and imports; (iii) price controls; (iv) mandatory wage
increases or prohibition of dismissals; (v) taxation; and (vi) government intervention in the private sector.
The IMF and the Argentine authorities reached an understanding on key policies as part of their ongoing discussions of an
IMF-supported program in order to renegotiate the principal maturities of the U.S.$44.1 billion under a stand-by arrangement. On March
25, 2022, the IMF approved the execution of the financing agreement (the “IMF Agreement”) with Argentina for a total amount of
U.S.$44 billion, which included a disbursement of U.S.$9.6 billion. In October 2022, December 2022, April 2023 and August 2023, the
IMF authorized disbursements of U.S.$3.8 billion, U.S.$6 billion, U.S.$5.4 billion and U.S.$7.5 billion, respectively, following
Argentina’s completion of the targets set forth in the IMF Agreement. In addition, the IMF and the Argentine government agreed to
revise the targets set forth in the IMF Agreement considering the negative impact that the drought had on the Argentine economy in
2023. On January 31, 2024, the new Argentine government and the IMF agreed to revise the targets set forth in the IMF Agreement.
The target for reserve accumulation increased to U.S.$10 billion, originally set at U.S.$8.2 billion. As a result of these revisions, in
January 31, 2024, the IMF authorized an additional disbursement of approximately U.S.$4.7 billion. As of the date of this annual report,
the aggregate amount of disbursements authorized by the IMF is approximately U.S.$40.6 billion. According to the IMF, Argentina is
implementing an ambitious stabilization plan focused on the establishment of a strong fiscal anchor along with policies to bring down
inflation. The IMF monitors Argentina’s compliance with the agreement at the end of each quarter. We cannot assure that the conditions
of the IMF Agreement will not affect Argentina’s ability to implement reforms and public policies and boost economic growth, nor the
impact that the IMF Agreement may have in Argentina’s ability to access international capital markets (and indirectly in our ability to
access those markets).
On November 19, 2023, a presidential runoff election took place between Javier Milei, candidate of “La Libertad Avanza” and
Sergio Massa, candidate of “Union por la Patria”, with Javier Milei being elected President of the Nation, with 55.69% of the votes, and
taking office on December 10, 2023. Also as a result of the 2023 elections, La Libertad Avanza has 7 of the 72 representatives in the
Senate and 41 of the 257 representatives in the Chamber of Deputies. The new administration has indicated that it intends to implement
business friendly policies, but we cannot assure you that it will be able to implement these policies, considering that it does not hold a
majority of the representatives in each chamber of Congress.
The newly elected government faces significant macroeconomic challenges, such as reducing the inflation rate, achieving
commercial and fiscal surpluses, accumulating reserves, supporting the peso, refinancing debt owed to private creditors, and improving
the competitiveness of the Argentine economy based on different factors that affect it, including the conflict between Ukraine and
Russia, and the conflict between Israel and Hamas in the Gaza Strip. Since the new administration took office, a large number of
measures aimed at deregulating the Argentine economy and limiting government intervention in the private sector have been
implemented, and it is expected that further measures will be adopted in the future. As of the date of this annual report, we cannot predict
the impact that these measures, and any future measures that may be adopted by the government, will have on the Argentine economy
in general and on the financial sector in particular.
Political uncertainty in Argentina regarding the policies adopted and that may be adopted in the future by the government could
lead to further volatility in the market prices of the securities of Argentine issuers and could have a material adverse effect on the
economy or on Argentina’s ability to meet its obligations, which in turn could adversely affect our financial condition and results of
operations.
3
We cannot assure you that developments in Argentina will not affect macroeconomic, political, regulatory or social conditions
in the country and, consequently, affect our business, result of operations and financial condition.
If the current levels of inflation continue or increase, the Argentine economy and our business and financial condition could be
adversely affected.
In the past, inflation has materially undermined the Argentine economy and Argentina’s ability to create conditions that would
permit growth. High inflation may also undermine Argentina’s competitiveness abroad and lead to a decline in private consumption
which, in turn, could also affect employment levels, salaries and interest rates. Moreover, a high inflation rate could undermine
confidence in the Argentine financial system, reducing the Peso deposit base and negatively affecting long-term credit markets.
In recent years, Argentina has confronted high inflationary pressures, and continues to do so. In 2021, the INDEC registered
an increase in CPI of 50.9% and an increase in WPI of 51.3%. In 2022, the INDEC registered an increase in CPI of 94.8% and an
increase in WPI of 94.8%. In 2023, the INDEC registered an increase in CPI of 211.4% and an increase in WPI of 276.4%, which
represents the highest annual inflation since 1991. The CPI published by the INDEC for the months of January and February 2024 was
20.6% and 13.2%, respectively. In March 2024, the INDEC registered a CPI of 11.0%, reaching a level of 287.9% year over year.
In June 2018, the International Practices Task Force categorized Argentina as a country with a projected three-year cumulative
inflation rate greater than 100%. Pursuant to IAS 29 (Financial Reporting in Hyperinflationary Economies), the financial statements of
entities whose functional currency is that of a hyperinflationary economy must be restated in a suitable general price index to control
the effects of changes. Argentine companies applying IFRS are required to apply IAS 29 to their financial statements for periods ending
on and after July 1, 2018. In addition, certain regulatory authorities, such as the CNV, have required that financial statements submitted
to the CNV for the periods ended on and after December 31, 2018 be restated for inflation in accordance with IAS 29.
On April 8, 2024, the Argentine Central Bank announced that the new inflation estimate for 2024 is 189.4% pursuant to its
survey of market expectations (Relevamiento de Expectativas de Mercado) which was made between March 25 and March 27, 2024.
There can be no assurances that inflation rates will decrease, remain flat or not escalate in the future or that the measures
adopted or that may be adopted by the administration to control inflation will be effective or successful. If inflation levels remain high
or rise in the future, the development of the Argentine economy could be negatively impacted and, in particular, our costs of operation
could increase, which may negatively affect our business, financial condition and results of operations.
A decrease in international prices for the main commodities exported by Argentina or a significant decline in their production
could negatively affect Argentina’s economic condition.
Argentina’s reliance on the export of certain commodities, particularly soybeans and its by products, corn and wheat, has made
the country more vulnerable to fluctuations in their prices. A decrease in commodity prices may adversely affect the Argentine
government’s fiscal revenues and the Argentine economy as a whole and, as a result, negatively impact the Bank’s business, financial
condition and results of operations. Given its reliance on these agricultural commodities, Argentina is also vulnerable to weather events,
such as the droughts which occurred in Argentina in 2018 and 2023, which may negatively affect the production of such commodities,
reducing fiscal revenues and the inflow of U.S. dollars. A continued fall in the international prices of the main commodities exported
by Argentina or any future weather conditions that may have an adverse effect on agriculture could have a negative effect on the level
of government revenues and its ability to service its public debt and could generate recessionary or inflationary pressures, depending on
the government's reaction.
The negative impact that the droughts which occurred in Argentina in 2018 and 2023 have had in Argentina has been reinforced
by the historic drop in the Paraná river (Argentina’s main river) and a large number of fire outbreaks in multiple Argentine provinces
during 2022. These environmental events have negatively affected the agriculture sector in Argentina. If any severe weather events,
including droughts, occur in the future, productive activities in Argentina, the level of foreign exchange reserves in the Central Bank
and the Argentine economy as a whole could be adversely affected. Adverse weather conditions may affect the production of
commodities by the agricultural sector, which represents a significant portion of Argentina's export revenues. In 2023, rainfall in the
core region of Argentina, the most productive area of the country, was 20% below the historical average, although the projections for
soybean and corn harvest for the 2023/24 season are positive.
4
If the international prices for agricultural commodities decrease or if the production of such commodities is diminished,
Argentina’s economy could be adversely affected. In addition, such circumstances could have a negative impact on the government’s
tax revenues, including its ability to repay its debt, and on the availability of foreign currency. Any such developments may adversely
affect Argentina’s economy and, as a result, our business, results of operations and financial condition.
The conflict between Russia and Ukraine and the conflict between Israel and Hamas in the Gaza Strip have affected and could
continue to affect other countries worldwide, generating increases in the international prices of oil, gas, and commodities, including
those produced by Argentina. However, a long-term decrease in the international price of oil would negatively impact the oil and gas
prospects of Argentina and result in a decrease in foreign investment in these sectors.
Persistent fiscal deficit could result in long lasting adverse consequences for the Argentine economy, which in turn could adversely
affect our business, financial condition and results of operations.
During the last years, the Argentine government has sustained high levels of fiscal deficit, and has resorted regularly to the
Central Bank to source part of its funding requirements. In 2021 and 2022 public sector expenditure increased approximately 49.6% and
54.8%, respectively, and the government achieved a primary fiscal deficit of 2.2% and 2.4% Argentina’s GDP, respectively, according
to the Argentine Ministry of Treasury. In 2023, public sector revenues decreased approximately 4.7%, mainly as a result of the significant
drop in income from withholdings as a result of the drought which occurred in Argentina in 2023, and public expenditures decreased
4.9%, mainly due to a reduction in real terms in social benefits and subsidies. The government achieved a primary fiscal deficit of 2.7%
Argentina’s GDP in 2023.
Following the agreement with the IMF, in January 2024 Argentina committed to achieve a primary fiscal surplus of 2.0% of
Argentina’s GDP in 2024.
Despite the announced commitment from Javier Milei’s new administration aimed at eliminating fiscal deficit, we cannot assure
you that in the future the Argentine government will not seek to finance its deficit by gaining access to the liquidity available in the local
financial institutions. In that case, government initiatives that increase the exposure of local financial institutions to the public sector
could affect our liquidity and assets quality and have a negative effect on clients’ confidence in the financial system.
Fluctuations in the value of the Peso could adversely affect the Argentine economy.
Fluctuations in the value of the Peso continue to affect the Argentine economy. Since January 2002, the Peso has fluctuated
significantly in value. Persistent high inflation, together with formal and de facto exchange controls, and restrictions on foreign trade,
highly distorted relative prices have resulted in the loss of competitiveness of Argentine production, impeded investment and caused
economic stagnation. In 2021 and 2022 the Peso depreciated against to the US dollar a 22% and a 72.4%, respectively. In 2023, the Peso
depreciated 356% with respect to the U.S. dollar and, after the election of President Javier Milei, the exchange rate devalued by 118%.
As of April 25, 2024, the exchange rate was Ps.873.75 per U.S.$1.00.
The depreciation of the Peso may have a negative impact on the ability of certain Argentine businesses to service their foreign
currency denominated debt, lead to inflation, significantly reduce real wages and jeopardize the stability of businesses whose success
depends on domestic market demand, and also adversely affect the Argentine government’s ability to honor its foreign debt obligations.
In turn, a significant appreciation of the Peso against the U.S. dollar also presents risks for the Argentine economy, including the
possibility of a reduction in exports as a consequence of the loss of external competitiveness. Any such appreciation could also have a
negative effect on economic growth and employment and reduce tax revenues in real terms.
The maintenance or implementation of additional exchange controls regulations, restrictions on transfers abroad and capital
inflow restrictions could limit the availability of international credit and could threaten the financial system, which may adversely
affect the Argentine economy.
In the past, the Argentine government has increased controls on the sale of foreign currency, limiting transfers of funds abroad.
Measures taken by the Argentine government significantly curtailed access to the official foreign exchange market and, as a result, an
unofficial U.S. dollar trading market developed in which the Peso-U.S. dollar exchange rate differed substantially from the official Peso-
U.S. dollar exchange rate. The current exchange controls apply with respect to access to the foreign exchange market by residents for
savings and investment purposes abroad, the payment of external financial debts abroad, the payment of dividends in foreign currency
5
abroad, payments of imports and exports of goods and services, and the obligation to repatriate and settle the proceeds from exports of
goods and services for Pesos, among others. For further information, see “Item 10.D. Exchange Controls”.
In September 2020, the Central Bank issued Communication “A” 7106 which restricted the access to the foreign exchange
market for the repayment of principal payments under certain external financial indebtedness maturing between October 15, 2020 and
March 31, 2021, which led many borrowers to refinance their debts. These restrictions were further amended and applied to external
financial indebtedness maturing between October 15, 2020 and December 31, 2023. We cannot assure you whether the Central Bank
will adopt similar restrictions in the future.
We cannot anticipate for how long these measures will be in force or if additional restrictions will be imposed. The Argentine
government could maintain or impose new exchange controls, restrictions and take other measures in response to capital flight or a
significant depreciation of the Peso, which could in turn limit access to the international capital markets and affect the Argentine
economy. In addition, such evolving exchange control restrictions and measures may result in Argentine Central Banks’s information
requests, enforcement actions and penalties due to diverging interpretations of foreign exchange regulatoins.
As a related matter, the international reserves deposited with the Argentine Central Bank have fluctuated significantly. The
amount of international reserves of the Argentine government reached U.S.$28.4 billion as of March 2024, which represents an increase
of approximately U.S.$7.0 billion since November 2023.
In addition, since the imposition of exchange controls, the difference between the official exchange rate, which is currently
used for both commercial and financial operations, and other informal exchange rates that arise implicitly as a result of certain operations
commonly carried out in the capital market (dollar “MEP” or “contado con liquidación”), have broadened deeply during 2023. However,
in an effort to address the fiscal deficit, the newly elected government implemented a currency adjustment, leading to a devaluation of
the Peso of approximately 50% in December 2023. From December 2023, the Peso has devaluated 2% every month which has reduced
the gap between the official exchange rate and the other informal exchange rates to approximately 21% as of April 23, 2024.
The Argentine government could maintain a single official exchange rate or create multiple exchange rates for different types
of transactions, substantially modifying the applicable exchange rate at which we acquire currency for different purposes. Furthermore,
existing or future measures could undermine the Argentine government’s public finances, which could adversely affect Argentina’s
economy, which, in turn, could adversely affect our business, results of operations and financial condition.
The Argentine government’s ability to obtain financing from the international loan and capital markets may be limited or costly,
which may impair its ability to implement reforms and foster economic growth.
During recent years the Argentine government has faced difficulties in the payment of its sovereign debt. As a result, the
Argentine government may not have access to international financing, or its access may be costly, which would limit its ability to make
investments and foster economic growth. Additionally, Argentine companies may also have difficulty accessing international financing,
at reasonable costs or at all.
During March 2020, the Argentine government initiated discussions with various groups of creditors to discuss a path for
Argentina’s debt sustainability. With respect to Argentina’s international bonds, the Argentine executive branch approved the
restructuring of certain eligible global bonds issued under foreign laws for up to U.S.$65 billion. In August 2020, the Argentine
government announced that it had obtained the consents required to exchange 99% of the aggregate principal amount outstanding of all
series of eligible bonds.
In March 2020, the then former Minister of Economy Martin Guzman addressed a letter to the Paris Club members expressing
Argentina’s decision to postpone until May 2021 the U.S.$2.1 billion payment originally due in May 2020, in accordance with the terms
of the settlement agreement Argentina had reached with the Paris Club members in May 2014 (the “Paris Club 2014 Settlement
Agreement”). In addition, in April 2020, the Minister of Economy sent the Paris Club members a proposal to modify the existing terms
of the Paris Club 2014 Settlement Agreement, seeking mainly an extension of the maturity dates and a significant reduction in the
interest rate. In June 2021, the parties agreed that Argentina would pay U.S.$430 million to the Paris Club members before the end of
July and the rest during the following year to avert default in July 2021. On March 22, 2022, the Argentine government reached an
agreement with the Paris Club for a new extension of the agreement reached in June 2021.
6
On October 28, 2022, the former Minister of Economy, Sergio Massa, announced a new agreement with the Paris Club pursuant
to which the maturity date of the outstanding amount of debt under the agreement entered into by the Argentina government and the
Paris Club in 2014 was extended to September 2028 and the interest rate decreased from 9% to 3.9% in the first three installments, with
a gradual increase to 4.5%. The payment profile implies an average semi-annual payment of U.S.$170 million (principal and interest
included). Over the next two years Argentina is expected to repay 40% of outstanding debt, which amounts to U.S.$1,971 million. On
June 26, 2023, Sergio Massa signed bilateral agreements with three members of the Paris Club to refinance the existing debt with the
institution. Thus, after signing the new agreement reached in 2022, the former Minister of Economy was able to seal bilateral agreements
with 15 of the 16 creditors of the institution.
In June 2018, the Argentine government and the IMF signed a three-year, U.S.$50 billion loan agreement, as further amended
to U.S.$57.1 billion through 2021 (the “IMF 2018 Agreement”). Following an IMF report in February 2020 stating that Argentina’s
debt may not be sustainable, the Argentine government requested to begin discussions with the IMF in order to renegotiate the principal
maturities of the U.S.$44.1 billion disbursed between 2018 and 2019 under a stand-by arrangement. The IMF and the Argentine
authorities reached an understanding on key policies as part of their ongoing discussions on an IMF-supported program. See “—Our
business is largely dependent upon macroeconomic, political, regulatory and social conditions in Argentina.”
In June 2021, Morgan Stanley Capital Index (“MSCI”), in its market classification report, reclassified the Argentine market
from the “Emerging Markets” category to the “Standalone” or “Independent Markets” category, classification that is reserved for those
countries that have accessibility barriers to foreign investors, political tensions, small capital markets and poor economies or that lack
adequate regulations. In the case of Argentina, the classification as a “Standalone” market was due to the prolonged severity of capital
controls in the Argentine stock market which is not in line with the accessibility criteria of the MSCI Emerging Markets index. As a
result of the reclassification, several Argentine companies suffered a negative impact on the price of their shares, and may face
difficulties in obtaining financing in the future.
Due to past or future defaults on its indebtedness, we cannot assure you that Argentina will have access to international
financing in the future, on favorable terms or at all. If Argentina is not able to access financing, it may not be able to foster economic
growth and invest in the country. As a result, we cannot assure you that private companies in Argentina will have access to financing
on favorable terms or at all, which could adversely affect our business, financial condition and results of operations.
Government intervention in the Argentine economy could undermine business and investor confidence.
The Argentine government exercises substantial control over the economy and may increase its level of intervention in certain
areas of the economy, including through the regulation of market conditions and prices.
In the past, the Argentine government has increased state intervention in the economy, including through expropriation and
nationalization measures, price controls, exchange controls, establishment of minimum salary levels and mandatory employee benefits
and restrictions on capital flows. For example, in 2008, the administration absorbed and replaced the former private pension system for
a public “pay-as-you-go” pension system. As a result, all resources administered by the private pension funds, including significant
equity interests in a wide range of listed companies, have since been administered by the Argentine Social Security Administration
(Administración Nacional de la Seguridad Social or “ANSES”). In 2014, the Argentine government enacted law No. 26,991, which
enables the Argentine government to intervene in certain markets when it considers that any party to the market is trying to impose
prices or supply restrictions in the market. This law applies to all economic processes linked to goods, facilities and services which,
either directly or indirectly, satisfy basic needs of the population (so-called “basic needs goods”), and grants broad powers to the relevant
enforcing agency (Secretariat of Commerce) to become involved in such processes. In June 2020, the Argentine government ordered
the 60-day temporary intervention of the cereal producer group Vicentín S.A.I.C. to ensure the continuance of the company’s operations
and to preserve jobs and assets. In addition, as a result of the public health emergency declared by the Argentine government due to the
COVID-19 pandemic, several measures have been adopted to limit the impact on the Argentine economy, including freezing rent prices
and public services tariffs, and the prohibition of work dismissals, among others.
Despite the announced measures from Javier Milei’s new administration aimed at reducing state intervention in the private
sector since his taking of office, in the future, the level of intervention in the economy by the Argentine government may continue or
increase, which may adversely affect Argentina’s economy and, in turn, our business, results of operations and financial condition.
7
Developments in other countries may adversely affect the Argentine economy and our financial performance.
Argentina’s economy remains vulnerable to external shocks that could be caused by adverse regional or global developments.
A significant decline in the economic growth of any of Argentina’s major trading partners (including Brazil, the European Union, China
and the United States) could have a material adverse impact on Argentina’s balance of trade and adversely affect Argentina’s economy.
In addition, Argentina may be affected by economic and market conditions in markets worldwide, as was the case in 2008, when the
global economic crisis led to a sudden economic decline in Argentina in 2009.
In the past, emerging market economies have been affected by changes in U.S. monetary policy, at times resulting in the
unwinding of investments and increased volatility in the value of their currencies. During 2018, the interest rate curve in the United
States shifted upward, generating a generalized devaluation in emerging markets, with the Turkish Lira and the Peso being the most
affected currencies against the U.S. dollar. However, in July 2019, the U.S. Federal Reserve cut rates for the first time since 2008,
indicating an expectation of lower growth in the future, with long-term rates remaining low during 2020 and 2021. In March 2022, the
U.S. Federal Reserve increased the federal funds rate by 0.25% for the first time since December 2018. During 2022, the U.S. Federal
Reserve further increased the federal funds rate to a range between 4.25% and 4.50%. On February 2, 2023, the U.S. Federal Reserve
further increased the federal funds rate by 0.25 and on March 22, 2023 it further increased the federal funds rate by 0.25 to a range of
4.75% to 5%. If interest rates rise significantly in developed economies, including the United States, emerging market economies,
including Argentina, could find it more difficult and expensive to borrow capital and refinance existing debt, which would negatively
affect their economic growth.
In February 2022, Russian troops undertook a full-scale military invasion of Ukraine. This conflict had, and may continue to
have, significant global economic effects, including heightened inflation, supply chain problems, increases in interest rates, market
volatility and an impact on commodity prices, especially with regard to international crude oil and gas prices. The conflict and its effects
could exacerbate the current slowdown in the global economy and could negatively affect the payment capacity of some of our
customers. Additionally, Russia’s prior annexation of Crimea, recognition of two separatist republics in the Donetsk and Luhansk regions
of Ukraine and subsequent military interventions in Ukraine have led to sanctions and other penalties being levied by the United States,
the European Union and other countries against Russia, Belarus, the Crimea Region of Ukraine, the so-called Donetsk People’s Republic,
and the so-called Luhansk People’s Republic. The severity of these sanctions may increase and could contribute to a shortage of raw
materials and commodities, which could, in turn, generate greater levels of inflation and create interruptions in the global supply chain.
Interruptions in the global supply chain could particularly affect the energy sector and could create supply chain difficulties in local
markets. In addition, there is a risk that Russia and other countries supporting Russia in this conflict may launch cyberattacks against
the United States and its allies and other countries, their governments and businesses, including the infrastructure in such countries.
Following a terrorist attack by Hamas in the Gaza strip on October 7, 2023, Israel declared war on Hamas and other terrorist
organizations in Gaza. On October 7, 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza strip and conducted a
series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial
centers located along Israel’s border with the Gaza strip and in other areas within Israel. Following the attack, Israel’s security cabinet
declared war against Hamas and the Israeli military began to call up reservists for active duty. Subsequently, on April 13, 2024, Iran
launched an aerial offensive against Israel. Even though there was no significant damage, Israel’s definitive course of action is pending.
Concurrently, the Milei administration has publicly stated its belief that Israel has the right to defend itself. The future of this conflict
as well as its impact on international trade and on emerging market economies such as Argentina remain uncertain. At the same time,
the conflict between Israel and Hezbollah in Lebanon escalated and the Houthi movement initiated attacks on marine vessels in the Red
Sea. There is a possibility that these attacks will turn into a greater regional conflict in the future.
Russian military actions and the Israel-Hamas conflict, the potential expansion of such conflicts in surrounding areas, and the
potential sanctions from these conflicts could adversely affect the global economy and financial markets and lead to instability and lack
of liquidity in capital markets. Although our businesses, results of operations and financial position could be adversely affected by any
of these factors directly or indirectly arising from these geopolitical conflicts, due to the uncertainties inherent to the scale and duration
of such conflicts and their direct and indirect effects, it is not reasonably possible to estimate the impact these conflicts will have on the
global economy and financial markets, on the Argentine economy and, consequently, on our business, financial condition and results of
operations.
We cannot assure your that events in other market countries , in the US or elsewhere will not adversely affect our financial
performance.
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The outbreak and spread of a pandemic and other large-scale public health events could have a material adverse effect on the
Group’s business, financial condition and results of operations.
Economic conditions in Argentina may be adversely affected by an outbreak of a contagious disease, such as COVID-19
(coronavirus), which develops into a regional or global pandemic and other large scale public health events. The measures taken by
governments, regulators and businesses to respond to any such pandemic or event may lead to slower or negative economic growth,
supply disruptions, inflationary pressures and significant increases in public debt, and may also adversely affect the Group’s
counterparties (including borrowers), which may lead to increased loan losses. Such measures could also impact the business and
operations of third parties that provide critical services to the Group.
During the outbreak of COVID-19, the Group experienced a decline in activity, including as a result of branch closures and
remote working requirements, and was affected by a number of regulatory measures, such as: the introduction of caps and floors on
interest rates and the introduction of payment deferral of loans allowed to individuals and companies and mandatory loans to be granted
at interest rates below market rates.
If there were an outbreak of a new pandemic or another large-scale public health event occurs in the future, the Group may
experience an adverse impact, which may be material, on its business, financial condition and results of operations, including as a result
of the exacerbation of any of the other risks described in this section.
Government or labor pressure to grant salary increases and/or additional benefits may affect business conditions in Argentina.
In the past, the Argentine government has passed laws and regulations forcing privately owned companies to maintain certain
wage levels and provide added benefits to their employees. Additionally, both public and private sector employers have been subject to
significant pressure from the workforce and trade unions to grant salary increases and other benefits. The Argentine government has
increased the minimum monthly salaries on numerous opportunities. In addition, in the past the Argentine government has arranged
other measures to mitigate the impact of inflation and exchange rate fluctuation in wages, or the consequences of the COVID-19
pandemic.
Labor relations in Argentina are governed by specific legislation, such as Labor Law No. 20,744 and Collective Bargaining
Law No. 14,250, which, among other things, dictate how salary and other labor negotiations are to be conducted. Most industrial or
commercial activities are regulated by a specific collective bargaining agreement that groups together companies by industry and trade
unions. While the process of negotiation is standardized, each chamber of industrial or commercial activity negotiates the increases of
salaries and labor benefits with the relevant trade union of such commercial or industrial activity. Parties are bound by the final decision
once it is approved by the labor authority and must observe the established salary increases for all employees that are represented by the
respective union and to whom the collective bargaining agreement applies. On March 1, 2024, the new President Milei called upon the
governors to enter into a consensus called “Pacto de Mayo” with respect to certain key political principles, including the inviolability
of private property, the adoption of a tax reform to reduce the tax burden and promote trade, the review of the federal tax co-participation
model, and the adoption of a labor reform.
We cannot assure you that the new Argentine administration will implement a labor reform or that it will not adopt future
measures requiring that employers increase salaries and/or employee benefits, prohibition of dismissals, duplication of severance
payments or that our employees and/or labor unions will not pressure for such measures themselves. Any such increase could result in
an increase in our operating expenses and, therefore, adversely affect our results of operations.
Failure to adequately address actual and perceived risks of institutional deterioration and corruption may adversely affect
Argentina’s economy, which in turn could adversely affect our business, financial condition and results of operations.
A lack of a solid institutional framework and corruption have been identified as, and continue to be a significant problem for
Argentina. In Transparency International’s 2023 Corruption Perceptions Index survey of 180 countries, Argentina was ranked 98, down
from 94 in the index for 2022, and from 96 in 2021.
Recognizing that the failure to address these issues could increase the risk of political instability, distort decision-making
processes and adversely affect Argentina’s international reputation and ability to attract foreign investment, the former Macri
administration announced several measures aimed at strengthening Argentina’s institutions and reducing corruption. These measures
included the reduction of criminal sentences in exchange for cooperation with the government in corruption investigations, increased
access to public information, the seizing of assets from corrupt officials, increasing the powers of the Anticorruption Office (Oficina
9
Anticorrupción) and the passing of a new public ethics law, among others. The current Argentine administration’s ability and
determination to implement these initiatives taken by the Macri administration is still uncertain, as it would require, among other things,
the involvement of the judicial branch, which is independent, as well as legislative support from opposing parties. We cannot assure
whether the implementation of these measures will be successful.
The Argentine government’s inability to accurately address actual and perceived risks of institutional deterioration and
corruption might adversely affect the Argentine economy which, in turn, could adversely affect our business, financial condition, and
results of operations.
Risks Relating to the Argentine Financial System
We operate in a highly regulated environment, and our operations are subject to regulations adopted, and measures taken, by
several regulatory agencies.
Financial institutions are subject to significant regulation relating to functions that historically have been determined by the
Central Bank, the Financial Information Unit (Unidad de Información Financiera or “UIF”) and the CNV. The number of these
regulations have increased in recent years and include: (i) floor on interest rates on time deposits and subsidized rates on mandatory
credit lines to SMEs, (ii) minimum capital requirements; (iii) mandatory reserve requirements; (iv) requirements for investments in fixed
rate assets; (v) lending limits and other credit restrictions, including mandatory allocations; (vi) limits and other restrictions on fees;
(vii) reduction of the period for the financial institutions to deposit the amount of sales made with credit cards in the corresponding
accounts of the sellers; (viii) limits on the amount of interest banks can charge or pay, or on the period for capitalizing interest;
(ix) accounting and statistical requirements; (x) limits on dividends; (xi) reporting or controlling regimes as agents or legally bound
reporting parties; (xii) changes in the deposit insurance regime and (xiii) prior approval of the Central Bank for any decision regarding
closing of branches. See “Item 4—Information of the Company—Argentine Banking Regulation Overview”.
We have no control over governmental regulations or the rules governing all aspects of our operations. The Central Bank may
penalize our main subsidiary, the Bank, in case of any breach of applicable regulations. Similarly, the CNV, which authorizes our
securities offerings and regulates the public markets in Argentina, has the authority to impose sanctions on us and our Board of Directors
for breaches of corporate governance.
The absence of a stable regulatory framework in Argentina for financial institutions and the imposition of measures that affect
the profitability of financial institutions and limit the possibility of covering their positions against currency fluctuations result may limit
the decisions that financial institutions, including the Bank, can make on asset allocation, which may adversely affect future financial
activities and our result of operations. There can be no assurances that new and tighter regulations will not be implemented in the future,
which could cause uncertainty and could negatively affect our future financial activities and results of operations. In addition, existing
or future legislation and regulation may require us to make material expenditures to avoid any material adverse effect on our consolidated
operations.
The stability of the Argentine financial system depends upon the ability of financial institutions, including the Bank, the main
subsidiary of the Group, to retain the confidence of depositors.
The measures implemented by the Argentine government in late 2001 and early 2002, in particular the restrictions imposed on
depositors to withdraw money freely from banks and the pesification and restructuring of their deposits, resulted in losses for many
depositors and undermined their confidence in the Argentine financial system.
Although liquidity levels are currently reasonable, no assurances can be given that these levels will not be reduced in the future
due to adverse economic conditions that could negatively affect the Bank’s business.
If, in the future, depositor confidence further weakens and the deposit base contracts, such loss of confidence and contraction
of deposits will have a substantial negative impact on the ability of financial institutions, including the Bank, to operate as financial
intermediaries. If the Bank is not able to act as a financial intermediary and otherwise conduct its business as usual, the results of its
operations could be adversely affected or limited, which in turn could affect our results of operations and financial condition.
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The growth and profitability of Argentina’s financial system partially depend on the development of medium and long-term
funding sources.
Since most term deposits are short-term deposits with a maturity of less than three months, a substantial portion of the loans
have very short maturity, and there is a small portion of medium- and/or long-term credit lines. The uncertainty about the ability to
reduce inflation in the future has had, and may continue to have, a significant impact on both the supply of, and demand for, long-term
loans as borrowers try to hedge against inflation risk by borrowing at fixed rates while lenders hedge against inflation risk by offering
loans at floating rates.
If longer-term financial intermediation activity does not grow, the ability of financial institutions, including us, to generate
profits will be negatively affected.
The asset quality of financial institutions, including ourselves, may deteriorate if the Argentine private sector continues to be
affected by adverse macroecononic conditions in Argentina.
As a result of Argentina’s macroeconomic environment, the capacity of many Argentine private sector debtors to repay their
loans has deteriorated significantly in 2018, 2019 and 2020 affecting the asset quality of financial institutions, including the Bank.
According to data published by the INDEC, Argentina’s GDP increased by 10.4% in 2021 and 5.2% in 2022, mainly due to the recovery
of the Argentine economy from the negative impact that the COVID-19 pandemic had on the Argentine economy, and decreased by
1.6% in 2023, primarily due to the drought which mainly affected the agricultural production in Argentina, which decreased 20.4%
compared to 2022. In 2021, 2022 and 2023, the asset quality of Argentine financial institutions improved. However, the Argentine
economy remains fragile and volatile, with inflation increasing from 94.8% in 2022 to 211.4% in 2023. As a result, in 2023 the financial
system in Argentina recorded low credit demand with loans to GDP at a historical low rate of 6.7% which reflects a significantly low
level of indebtedness of individuals and entities.
If customers are not able to repay their loans the quality of the Bank’s assets may deteriorate and loan loss provisions may
increase, which could, in turn, adversely affect our results of operations and financial condition.
Argentine financial institutions, including us, continue to have significant exposure to public sector debt, including securities
issued by the Argentine Central Bank, and its repayment or refinancing capacity, which in periods of uncertainty may negatively
affect their results of operations.
To some extent, the value of the assets held by Argentine financial institutions, as well as their income generation capacity, is
dependent on the public sector’s creditworthiness, which is in turn dependent on the Argentine and the provincial government’s ability
to promote sustainable long-term economic growth, generate tax revenues and control public spending.
Argentine financial institutions usually hold public sector debt issued by the national, provincial and municipal governments and
securities – generally short term – issued by the Central Bank as part of their portfolios. As of December 31, 2023, the exposure of the
financial institutions to the public sector represented 21.6% of total assets and their holdings of short-term securities issued by the
Central Bank represented 27% of total assets, reflecting the investment of the excess cash liquidity derived from the increase in deposits
and weak credit demand. As of December 31, 2023, our exposure to the public sector amounted to Ps.201.5 billion, representing 9.8%
of our total assets as of that date and our exposure to short term securities issued by the Central Bank and repo transactions with the
Central Bank amounted to Ps.831.8 billion or 40.3% of our total assets as of such date. As part of the new monetary policy of the newly
elected government, the Central Bank has been inducing, through regulations, banks and mutual funds to convert their LELIQs into
repos, stopped issuing new LELIQs and began to use only repos as a monetary policy instrument.
In the past, the Argentine government extended the maturities of certain securities. By virtue of Executive Decrees
No. 596/2019 and No. 609/2019, the maturity date of short-term public sector debt securities (“Letes,” “Lecaps,” “Lelink” and “Lecer”)
was extended to February 2020. Afterwards, through Decree No. 346/2020, the Argentine government further extended the maturity
date of certain “Letes” to December 31, 2020. In February 2020, through Joint Resolution 6/2020, certain “Lecaps” and “Letes” which
had already been reprofiled pursuant to the aforementioned Executive Decrees No. 596/2019 and 609/2019 were subsequently
exchanged for Peso-denominated treasury bills (“Lebads”) maturing in September 2020. In April 2020, the Argentine government issued
the Decree No. 346/2020, by which the repayment of Argentine law-governed U.S. dollar-denominated notes was postponed to
December 31, 2020, including the abovementioned “Letes.” On January 13, 2023, the Argentine Secretaries of Finance and Treasury
issued the joint resolution 3/2023 pursuant to which a non-transferable national treasury bill denominated in U.S. dollars and maturing
on January 16, 2033 was issued to the Central Bank for an amount of up to U.S.$7,132,655,012, in accordance with the terms and
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conditions set forth in such resolution. On February 17, 2023, the Argentine Secretaries of Finance and Treasury further issued the joint
resolution 8/2023 pursuant to which the amount of the aforementioned non-transferable national treasury bill was increased up to
U.S.$17,849,809. Through joint resolution 40/2023 of the Argentine Secretaries of Finance and Treasury, the amount of the
aforementioned non-transferable national treasury bill was increased to U.S.$2,305.95 million. On March 9, 2023, the Argentine
government completed an offer to exchange a part of its sovereign debt denominated in Pesos which amounted to Ps.4.34 billion and
matured in March, April, May and June 2023. The exchange offer was accepted by 64% of the eligible bondholders and, as a result of
the exchange, the maturities of the exchanged debt instruments were extended. The debt instruments which were issued as a result of
the exchange have an average maturity of aproximately 18 months.
Decree 163/2023, which was approved on March 23, 2023, sets forth that bills denominated in U.S. dollar and issued under
Decrees Nos. 622/2021, 576/2022 and 787/2022 will be exchanged on their maturity dates with new securities. The terms and conditions
of these new securities will be determined by the Argentine Secretaries of Finance and Treasury. Additionally, Decree 164/2023 sets
forth that the jurisdictions, entities and funds described therein, which are related to the Argentine public sector, must sell their holdings
of securities issued by the Argentine government and denominated in U.S. dollars, or deliver such securities to the Argentine Treasury
in exchange of other government securities.
Should the public sector fail to fulfill its commitments in due time and proper form, this could have an adverse effect on our
business, financial situation and results of operations.
Increased competition and consolidation in the banking and financial industry could adversely affect our operations.
We expect competition in the banking and financial sector to continue to increase. Such increased competition in the banking
and financial sector could reduce prices and margins and the volume of operations and our market share. Therefore, our results of
operations could be adversely affected.
If financial intermediation activity volumes relative to GDP continues to decline, the capacity of financial institutions, including
the Bank, our main subsidiary, to generate profits may be negatively affected.
As a result of the 1999-2002 financial crisis, as a result of which the Argentine economy fell 18.4%, the volume of financial
intermediation activity dropped dramatically: private sector credit plummeted from 24% of GDP in December 2000 to 7.7% in June 2004
and total deposits as a percentage of GDP fell from 31% to 23.2% during the same period. The depth of that crisis and the effect it had
on depositors’ confidence in the financial system created uncertainty regarding its ability to act as an intermediary between savings and
credit. Although private credit relative to GDP grew after the 1999-2002 financial crisis, since 2018 credit contracted in real terms as a
result of the negative economic growth and increasing inflation. Furthermore, the ratio of the total financial system’s private-sector
deposits and loans to GDP remains low when compared to international levels and continues to be lower than the periods prior to the
1999-2002 crisis and also from prior years. As of December 31, 2023, the ratio of private-sector deposits and loans was 18.3% and 6.7%
of GDP, respectively.
There is no assurance that financial intermediation activities will continue in a manner sufficient to reach the necessary volumes
and businesses to provide financial institutions, including the Bank, with sufficient capacity to generate income, which may, in turn,
impact our results of operations.
Enforcement of creditors’ rights in Argentina may be limited, costly and lengthy.
In the past, in order to protect debtors affected by the economic crisis in 2001 and 2002, the Argentine government adopted
measures in the beginning of 2002 that suspended proceedings to enforce creditors’ rights upon debtor default, including mortgage
foreclosures and bankruptcy petitions. More recently, the Argentine government took other temporary measures, such as the suspension
of mortgage foreclosures during the COVID-19 pandemic, which limited the ability to enforce creditors’ rights.
Any such measures, and any other measures which may limit the ability of creditors, including us, to bring legal actions to
recover unpaid loans or restricting creditors’ rights generally could have a material adverse effect on the financial system and on our
business.
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The Consumer Protection Law and the Credit Card Law may limit some of the rights afforded to us and our subsidiaries.
The application of the Argentine Consumer Protection Law No. 24,240 (the “Consumer Protection Law”), which establishes a
number of rules and principles for the protection of consumers, and the Law No. 25,065 (as amended by Law No. 26,010 and Law
No. 26,361, the “Credit Card Law”), which sets forth several mandatory regulations designed to protect credit card holders, by
administrative authorities and courts at the federal, provincial and municipal levels has increased. Moreover, administrative and judicial
authorities have issued various rules and regulations aimed at strengthening consumer protection. In this context, the Central Bank issued
regulations with respect to the protection of financial services customers, which grants broad protection to financial services customers,
and limits fees and charges that financial institutions may validly collect from their clients. In addition, the Argentine Supreme Court
created the Public Registry of Collective Proceedings to register collective proceedings (such as class actions) filed with national and
federal courts. In the event that we or our subsidiaries are found liable for violations of any of the provisions of the Consumer Protection
Law or the Credit Card Law, the potential penalties could limit some of our rights or our subsidiaries’ rights, for example, with respect
to their ability to collect payments due from services and financing provided by the Bank or its subsidiaries, which could adversely
affect our financial results of operations.
Furthermore, the rules that govern the credit card business provide for variable caps on the interest rates and fees that financial
entities may charge to clients and merchants, and enable courts to decrease the interest rates and fees agreed upon by the parties if they
are deemed excessively high. A change in the applicable law or court decisions lowering the cap on interest rates and fees would reduce
the Bank’s revenues, which could negatively affect our consolidated results.
Class actions against financial institutions for an undetermined amount may adversely affect the profitability of the financial
system and of some of our subsidiaries such as the Bank and InvertirOnline S.A.U.
Certain public and private organizations have initiated class actions against financial institutions in Argentina, including the
Bank and InvertirOnline S.A.U. See “Item 8.A. Consolidated Statements and Other Financial Information.” The Argentine national
constitution and the Consumer Protection Law contain certain provisions regarding class actions, although their guidance with respect
to procedural rules for class action cases is limited. Argentine courts have admitted class actions in various lawsuits against financial
entities related to “collective interests” such as alleged overcharging on products, interest rates and advice in the sale of public securities.
Some of these lawsuits have been settled by the parties out of court. These settlements have typically involved an undertaking by the
financial institution to adjust the fees and charges. If class action plaintiffs were to prevail against financial institutions, their success
could have an adverse effect on the financial industry and on our business.
In the future, court and administrative decisions may increase the degree of protection afforded to our debtors and other
customers or be favorable to the claims brought by consumer groups or associations. This could affect the ability of financial institutions,
including us, to freely determine charges, fees or expenses for their services and products, therefore affecting their business and results
of operations.
Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-
performance by financial institutions or transactional counterparties, could adversely affect the Argentine Financial System.
Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. The Argentine
financial system has exposure to many different industries and counterparties, including to counterparties in the financial services
industry, including commercial banks, brokers and dealers, investment banks, and other institutional clients, which exposes the
Argentine financial system to credit risk in the event of a default by a counterparty or client.
The impact of recent developments in the global financial sector, including policy responses, represents a significant source of
uncertainty for the economy, particularly for banking institutions and, more broadly, the financial markets. The Argentine financial
system may be adversely impacted by such developments, including resulting from overall declines in confidence in the global banking
system, in ways that we cannot predict at this time. Even without additional bank closures, uncertainty caused by recent bank failures –
and general concern regarding the financial health and outlook for other financial institutions – could have an overall negative effect on
the Argentine financial system and financial markets generally.
The recent developments may also have other implications for broader economic and monetary policy, including interest rate
policy, and may impact the financial condition of banks and other financial institutions outside of the United States. As a consequence
of the instability in the banking system that began in the United States on March 15, 2023, the shares of the Swiss bank Credit Suisse
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plummeted up to 30%, and the sales continued even after the first attempt by the Swiss National Bank to stop the fall of Credit Suisse,
when an injection of liquidity was made to face the withdrawal of customer deposits. On March 19, 2023, UBS Group AG announced
that it had agreed to acquire Credit Suisse Group AG, with support from the government of Switzerland, following deterioration of the
financial condition of Credit Suisse. There is no guarantee that the U.S. or other international governmental authorities will provide
access to uninsured funds or other governmental support in the future in the event of the failure or financial distress of other banks or
financial institutions, or that they would do so in a timely fashion.
We are exposed to compliance risks.
Due to the nature of our activities, we are exposed to certain compliance risks. We must comply with regulations regarding
customer conduct, market conduct, the prevention of money laundering and the financing of terrorist activities, the protection of personal
data, the restrictions established by national or international sanctions programs and anti-corruption laws, including the U.S. Foreign
Corrupt Practices Act of 1977, the violations of which could lead to very significant penalties. As part of our business, we directly or
indirectly, through third parties deal with entities whose employees are considered to be government officials. Our activities are also
subject to complex customer protection and market integrity regulations.
Although we have adopted multiple policies, procedures, internal control systems and other measures to manage compliance
risk, it is dependent on its employees and external suppliers for the implementation of these policies, procedures, systems and other
measures, and it cannot guarantee that these are sufficient or that our employees or other persons related to us or our business partners,
agents and/or other third parties with a business or professional relationship do not circumvent or violate current regulations or our ethics
and compliance regulations, acts for which such persons could be held ultimately responsible and/or that could damage our reputation.
In particular, acts of misconduct by any employee, and particularly by senior management, could erode trust and confidence and damage
our reputation among existing and potential clients and other stakeholders. Actual or alleged misconduct by the us in any number of
activities or circumstances, including operations, employment-related offenses such as sexual harassment and discrimination, regulatory
compliance, the use and protection of data and systems, and the satisfaction of client expectations, and actions taken by regulators or
others in response to such misconduct, could lead to, among other things, sanctions, fines and reputational damage, any of which could
have a material adverse effect on our business, financial condition and results of operations.
We may not be able to prevent third parties from using the banking network in order to launder money or carry out illegal or
inappropriate activities. Moreover, financial crimes continually evolve and emerging technologies, such as cryptocurrencies and
blockchain, could limit our ability to track the movement of funds. Additionally, in adverse economic conditions, it is possible that
financial crime attempts will increase significantly.
If there is a breach of the applicable regulations or Grupo Supervielle’s ethics and compliance regulations or if the competent
authorities consider that the Bank or one of our subsidiaries do not perform the necessary due diligence inherent to their activities, such
authorities could impose limitations on our activities, the revocation of our authorizations and licenses, and economic penalties, in
addition to having significant consequences for our reputation, which could have a significant adverse impact on our business, financial
condition and results of operations. Furthermore, we may conduct investigations related to violations of ethics and compliance
regulations, and any such investigation or any related procedure could be time consuming and costly, and its results difficult to predict.
Exposure to multiple federal, provincial and/or municipal legislation and regulations could adversely affect our business or results
of operations.
The Argentine government has historically exercised significant influence over the economy and financial institutions. In the
past, several different bills to amend the Argentine Financial Institutions Law No. 21,526 (the “FIL”) have been put forth for review by
the Argentine Congress, seeking to amend different aspects of the FIL, including the qualification of financial services as a public
service, an increase in governmental regulations affecting the activities of financial entities and initiatives to make financial services
more widely available.
Laws and regulations currently governing the economy and the banking sector may continue to change in the future, and any
changes may adversely affect our business, financial condition and results of operations. In particular, a thorough amendment of the FIL
would have a substantial effect on the banking system as a whole. If such a bill were passed, or any other amendment to the FIL be
made, the subsequent changes in banking regulations may have adverse effects on financial institutions in general, and on our business,
financial conditions and results of operations.
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In addition, Argentina has a federal system of government with 23 provinces and the Autonomous City of Buenos Aires, each
of which, under the Argentine national constitution, has full power to enact legislation concerning taxes and other matters. Likewise,
within each province, municipal governments have broad powers to regulate such matters. Due to the fact that our branches are located
in multiple provinces, we are also subject to multiple provincial and municipal legislation and regulations. Future developments in
provincial and municipal legislation concerning taxes, provincial regulations or other matters may adversely affect our business or results
of operations.
As an example of the aforementioned, in the second half of 2020 and after the suspension of the 2017 fiscal consensus in late
2019, certain Argentine provinces (Córdoba, San Luis, Buenos Aires and the Autonomous City of Buenos Aires) raised the tax rate on
gross income tax for banks. Additionally, in October 2020, the Autonomous City of Buenos Aires also eliminated a tax exemption on
interest income received from instruments issued by the Central Bank as part of its monetary policy.
In January 2021, a legal action was filed against the Autonomous City of Buenos Aires in order to declare Laws No. 6,382 and
No. 6,383 unconstitutional, which seek to burden the returns derived from securities, bonds, bills, certificates of participation (equity)
and other instruments issued or to be issued in the future by the Argentine Central Bank with turnover tax. Such legal action was filed
under File No. CAF 18156/2020 (“ADEBA Asociación Civil de Bancos Argentinos y otros c/GCBA y otro s/Proceso de Conocimiento”)
by the Association of Banks and most of its members. The Argentine Central Bank has filed a legal action for the same purpose.
On December 21, 2022, the Argentine Supreme Court partially granted the precautionary measure filed by the government of
the Autonomous City of Buenos Aires and ordered the Argentine government to deliver 2.95% of the funds referred to in Article 2 of
Law 23,548 to the Autonomous City of Buenos Aires. In addition, the Argentine Supreme Court ordered the Argentine government to
refrain from applying Law 27,606, which sets the right of the Autonomous City of Buenos Aires to participate in the collection of taxes
administered by the Argentine government until the resolution of these legal proceedings. In July 2023, the government of the
Autonomous City of Buenos Aires claimed that the Argentine government owed payment of approximately Ps.148,000 million as a
result of this matter. As a result, the government of the Autonomous City of Buenos Aires filed a new motion against the Argentine
government requesting to seize the funds due by the Argentine government and that the Argentine courts adopt pecuniary sanctions
against certain government officials.
We are exposed to risks in connection with climate change.
We are exposed to risks in connection with climate change as a result of our financial activities. These risks may be classified
into two types of risks:
(i) physical risks, which arise from climate changes that impact the economy such as flooding, wildfires, earthquakes and
extreme weather impacts, including extreme heat and sea level rise. These events could have a negative impact on our operations or
those of our customers or third parties on which we rely and do business with.; and
(ii) transition risks, which arise from the transition to a low-carbon economy through changes in regulations, policies,
technologies and consumer preferences, among others, which could negatively impact our expenses, investments and business strategies.
These categories of risks could materialize, among others, in the following risks:
• Legal and regulatory risks. Banking regulators, such as the Basel Committee on Banking Supervision and the Argentine
Central Bank, supervisory authorities, investors and other stakeholders have increasingly showed interest in the role of financial
institutions as key actors to address the risks related to climate change. Regulatory changes regarding how banks manage climate risk
may result in higher compliance, operational and credit risks and costs.
• Technological risks. Certain of our counterparties, customers or related parties may be adversely affected by the
progressive transition to a low-carbon economy and/or risks associated with new low-carbon technologies. If our customers and
counterparties fail to adapt to the transition to a low-carbon economy, or if the costs of doing so adversely affect their creditworthiness,
this could adversely affect our loan portfolio.
• Market and liquidity risks. The funding costs of businesses that are perceived to be more exposed to climate and
environmental risks could increase, which may result in the deterioration of their creditworthiness and credit ratings, adversely affecting
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our loan portfolio. The Group could also be adversely affected by changes in demand brought by climate change, as well as changes in
energy and commodity prices, corporate bonds, equities and certain derivatives contracts.
• Reputational risks. The perception of our customers or the communities in which we operate on our practices related to
climate change and the transition to a lower-carbon economy may damage our reputation. In addition, increased scrutiny of climate
change-related policies and disclosure may result in litigation and regulatory investigations and/or actions.
We are also exposed to potential long-term risks arising from climate change and environmental damage, such as a deterioration
of credit assets due to the impairment of macroeconomic conditions as a result of climate-related risks.
We take climate change into consideration within our social economic and environmental risk policies and we are committed
to enhance processes to embed climate risk considerations into our core processes and risk management cycle. However, the nature of
the risk drivers related to climate change may not be predictable and is rapidly evolving. Therefore, our risk management strategies may
not be effective in mitigating climate risk exposure. As the risks, perspective and focus of regulators, shareholders, customers,
employees, and other stakeholders regarding climate change are evolving rapidly, it can be challenging to evaluate the real impact of
climate change-related risks, compliance risks, and uncertainties on our activity. Any of these factors may have a material adverse effect
on our business, financial condition and results of operations.
Risks Relating to Our Business
Changes in market conditions and any associated risks, including interest rate and currency exchange volatility, could materially
and adversely affect our consolidated financial condition and results of operations.
We are directly and indirectly affected by changes in market conditions. Market risk, or the risk that values of assets and
liabilities or revenues will be adversely affected by variations in market conditions, including interest rate and currency exchange
volatility, is inherent in the products and instruments associated with our operations, including loans, deposits, long-term debt and short-
term borrowings.
In particular, our results of operations depend to a great extent on our net financial income. In 2021, 2022 and 2023, net financial
income represented 89.8%, 94.5% and 97.5%, respectively, of our net operating revenue. Changes in market interest rates could affect
the interest rates earned on our interest-earning assets differently from the interest rates paid on our interest-bearing liabilities, leading
to a reduction in our net financial income or a decrease in customer demand for our loan or deposit products. In addition, increases in
interest rates could result in higher debt service obligations for our customers, which could, in turn, result in higher levels of delinquent
loans or discourage customers from borrowing. Interest rates are highly sensitive to many factors beyond our control, including the
minimum reserve policies of the Central Bank, regulation of the financial sector in Argentina, domestic and international economic and
political conditions and other factors.
Any changes in interest rates and currency exchange rates could adversely affect our business, our future financial performance
and the price of our securities.
Reduced spreads between interest rates on loans and those on deposits could adversely affect the Bank’s profitability.
Historically, the Argentine financial system witnessed a decrease in spreads between the interest rates on loans and deposits as
a result of increased competition in the banking sector and the Argentine government’s tightening of monetary policy in response to
inflation concerns. Frequent regulatory changes, high inflation and frequent currency devaluations have also led to fluctuations in interest
rates which could also impact spreads. Moreover, since 2020, the Central Bank has imposed minimum interest rates paid on time deposits
and maximum interest rates on credit cards financing, and established some credit lines to be granted to SMEs at preferential interest
rates, pressuring margins downwards.
In addition, a change in the composition of the source of funding, which includes a relevant portion of non-interest-bearing
deposits, could also put downward pressure on margins. A change in the composition of the source of funding could result from lower
interest rates, higher demand of credit and therefore a need to increase the amount of time deposits or other types of bearing interest
liabilities. Further reduction in spreads could have a material adverse effect on our business, results of operation and financial condition.
We cannot guarantee that interest rate spreads will remain attractive.
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Due to our exposure to middle and lower-middle-income individuals and SMEs, the quality of our consolidated loan portfolio is
more susceptible to economic downturns and recessions.
Our consolidated loan portfolio is exposed to the segments of SMEs and middle and lower-middle-income individuals, which
are more vulnerable to economic recessions than large corporations and higher income individuals. The quality of our portfolio of loans
to SMEs and to individuals is therefore dependent to a large extent on domestic and international economic conditions. Consequently,
we may experience higher levels of past due amounts, which could result in higher provisions for loan losses.
The loan portfolio of the Personal & Business Banking segment, includes individuals and small business with annual sales of
up to Ps.500 million and SMEs with annual sales over Ps.500 million and below Ps.5.0 billion. As of December 31, 2023, the Personal &
Business Banking segment included the loan portfolio transferred from IUDÚ (the former “consumer customer portfolio”). As of the
same date, the Personal & Business Banking segment represented approximately 56% of the consolidated loan portfolio (net of
provisions). Within the 56% share of the Personal & Business Banking Segment, 47% corresponds to individuals, while 9% corresponds
to Small Businesses & SMEs. Morover, loans to lower-risk payroll and pension clients accounted for 53% of our total loans to
individuals. If the economy in Argentina experiences a significant downturn, this could materially and adversely affect the liquidity,
businesses and financial condition of our customers, which may in turn cause us to experience higher levels of past due loans, thereby
resulting in higher provisions for loan losses and subsequent write-offs. This may materially and adversely affect the credit quality of
our loan portfolio, our asset quality, our results of operations and our financial condition.
Our estimates and established reserves for credit risk and potential credit losses may prove to be insufficient, which may materially
and adversely affect our asset quality and our financial condition and results of operations.
Pursuant to IFRS 9, the Bank, establish reserves for potential credit risk and losses related to changes in the levels of income
of debtors/borrowers, increased rates of inflation, increased levels of non-performing loans or an increase in interest rates. In this process,
our subsidiaries rely on several models that estimate the distribution of possible losses arising out of the loan portfolio to calculate
expected losses. The Bank’s models estimate distribution of possible loan portfolio losses, which depend on counterparties’ probability
of default (“PD”), as well as the exposure at the time of default (“EAD”) and the proportion of each unfulfilled loan that the entity is
able to recover (i.e., loss given default or “LGD”). Based on these parameters, we estimate our expected loss (“PE”) and economic
capital. At the same time, we assess expected credit losses on a forward-looking basis, incorporating the impact of updated
macroeconomic scenarios in the variables which we consider affect credit risk.
If we are unable to effectively control the level of non-performing or poor credit quality loans in the future, or if our loan loss
reserves are insufficient to cover future loan losses, our asset quality and our financial condition and results of operations may be
materially and adversely affected.
We are a holding company and, as a result, we depend on our subsidiaries’ ability to pay dividends to us.
As a holding company, we conduct our operations through our subsidiaries, the largest of which is the Bank. Consequently, we
do not operate or hold substantial assets, except for equity investments in our subsidiaries and temporary liquidity. Except for such
assets, our ability to invest in our business developments and to repay obligations is subject to the funds generated by our subsidiaries
and their ability to pay cash dividends. In the absence of such funds, we may have to resort to financing options at unappealing prices,
rates and conditions. Additionally, such financing could be unavailable when we may need it.
Each of our subsidiaries is a separate legal entity and due to legal or contractual restrictions, as well as to their financial
condition and operating requirements, they may not be able to distribute dividends to us. Our ability to develop our business, meet our
payment obligations and pay dividends to our shareholders could be limited by restrictions preventing our subsidiaries from paying us
dividends. Investors should take such restrictions into account when analyzing our investment developments and our ability to cancel
our obligations.
We may continue to seek potential acquisitions or expand our business, but we may not be able to complete such acquisitions or
expansion, or successfully integrate businesses that we acquire.
In the past, in addition to organic growth, we havesignificantly expanded our business through acquisitions. We expect to
continue considering acquisition opportunities that we believe may add value and are compatible with our business strategy. In addition,
we may continue to implement business strategies in order to expand our business.
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In this respect, we may not be able to continue to identify opportunities or consummate acquisitions, or implement business
strategies, leading to economically favorable results. We cannot assure you that any future acquisition or other actions taken to expand
our business will, if required, be authorized by the Central Bank, which would limit our ability to implement our growth strategy. In
addition, in the event that an acquisition opportunity or business strategy is identified and authorized, successful integration of the
acquired business or strategy entails significant risks, including compatibility of operations and systems, unexpected contingencies,
employee retention, compliance, customer retention, and delays in the integration process.
The Bank’s revenues from its business with senior citizens could decrease or cease to grow if the agreement with ANSES is
terminated or not renewed.
Since 1996, the Bank has acted as one of the paying agents of social security payments to senior citizens on behalf of the
government pursuant to an agreement with ANSES that must be signed by any bank that intends to pay pensions or benefits on behalf
of ANSES. The agreement with ANSES expired on June 30, 2023. On July 25, 2023, ANSES issued Resolution No. 151/2023 which
sets forth the new procedure of, and establishes new requirements for, the payment of social benefits, and the obligation of the banks
that pay pensions or benefits on behalf of ANSES to sign new agreements with ANSES. The banks (including Banco Supervielle) are
in the process of negotiating a new agreement with ANSES. In December 2023, the Bank made payments on behalf of ANSES to
approximately 605,000 senior citizens and beneficiaries. Offering this service to senior citizens allows the Bank ready access to a pool
of potential consumers of financial services. The Bank derives an important part of its revenues (12% as of December 31, 2023) from
the sale of financial services to senior citizens. The Bank has invested in cutting-edge service models and products that facilitate its
senior citizen customers to make transactions. The Bank is prepared to continue to offer its services within the framework of the new
agreement to be entered into with ANSES and to continue to be a leading bank in providing pension service payments.
The termination of the agreement with ANSES or ANSES’s failure to add new senior citizens to the payment service could
have a negative effect on our business and results of operations.
Our controlling shareholder has the ability to direct our business, and potential conflicts of interest could arise.
Our controlling shareholder, Julio Patricio Supervielle, directly or beneficially owned as of April 25, 2024, 61,738,188 Class A
shares with 5 votes per share and 74,621,278 Class B shares with one vote per share. Virtually all decisions made by shareholders will
continue to be directed by our controlling shareholder. He may, without the concurrence of the remaining shareholders, elect a majority
of our directors, effect or prevent a merger, sale of assets or other business acquisition or disposition, cause us to issue additional equity
securities, effect a redemption of shares, effect a related party transaction and determine the timing and amounts of dividends, if any.
According to our bylaws, a two-thirds vote by our Class A shares is required, regardless of the percentage of our total capital they
represent, in order for us to duly resolve a merger with another company, a voluntary dissolution, our relocation abroad, and the
fundamental change in our corporate purpose. As of the date of this report, Mr. Supervielle owns 100% of Class A shares.
Mr. Supervielle’s interests may conflict with your interests as a holder of Class B shares or ADSs, and he may take actions that might
be desirable to him but not to other shareholders.
Cybersecurity events could negatively affect our reputation, our financial condition and our results of operations.
We rely on the efficient and uninterrupted operation of our platforms, data processing networks, communication, and internet-
based information exchange, including systems related to the operation of our online platforms and ATM network. We have access to
large amounts of confidential financial information and control substantial financial assets belonging to our customers and each of our
companies. Additionally, we provide our customers with continuous remote access to their accounts and the ability to securely transfer
substantial financial assets through electronic means. Therefore, a cybersecurity breach represents a significant risk for us.
Cybersecurity incidents, such as computer intrusions, viruses, ransomware, denial-of-service attacks, phishing, identity theft,
and other disruptions, could adversely affect the security of the information stored and transmitted through our computer systems and
network infrastructure, potentially causing existing and potential customers to refrain from doing business with us. The global context
and the adoption of hybrid work methodologies (in-person/home-office) mean that a significant portion of our workforce works
remotely, as well as the adoption of digital channels, which could exacerbate certain risks for our business, including increased reliance
on information technology (“IT”) resources, higher phishing risk, and other cybersecurity attacks. Additionally, there is a higher risk of
unauthorized dissemination of sensitive personal information.
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It is also widely known that there has been an exponential increase in the number of cybersecurity attacks conducted via email,
instant messaging systems, and other social networks. As cyberattacks evolve and become more sophisticated, companies strengthen
their prevention and monitoring mechanisms and adopt new measures to mitigate cybersecurity risks, including those related to remote
work security. Although we have insurance policies that protect us against cyber incidents, our monitoring capabilities have been
reinforced, paying special attention to critical assets supporting business processes to prevent the materialization of threats, and, when
necessary, to identify and respond immediately to any security incident that may occur. Additionally, monitoring the Clear, Deep, and
Dark web to protect our customers by identifying and acting preventively against possible phishing, smishing, and brand abuse attacks.
Our operating systems and networks have been, and will continue to be, subject to cybersecurity threats that are constantly evolving,
and in the same way, our security technology platforms and operational procedures evolve to prevent damage.
Although we intend to continue implementing and updating our security technology devices and operational procedures to
prevent cybersecurity damages, our systems may not be free from vulnerability and these security countermeasures may be defeated. If
any of these events occur, our reputation could be damaged, entailing serious costs and affecting our business, as well as our results of
operations and financial condition.
Our business is highly dependent on properly functioning IT systems and improvements to such systems.
Our business is highly dependent on the ability of our teams to develop solutions according to what our customers need, having
technology systems that allow an effective management and enable processing a large number of transactions across numerous and
diverse markets, products and regulations in a timely manner. In addition, our customers have the possibility to access to their finances
remotely, whenever they want or wherever they are, and to transfer substantial financial assets by electronic means. The proper
functioning of our financial control, risk and fraud management, accounting, cybersecurity, customer service and other data processing
systems is critical to our business and to our ability to compete effectively, as we are a customer centric company. Also, as our business
activities may be materially disrupted if there were a partial or complete failure of any of our IT systems or our communication networks,
we have implemented a business continuity program and an IT risk program, and we created a Cybersecurity Center of Excellence
within our operating model. Although from time to time we may face events that might be caused by, among other things, software
bugs, computer virus attacks or intrusions, phishing, identity theft or conversion errors due to system upgrading, we have implemented
remediate plans to reduce their frequency. In addition, any security breach caused by unauthorized access to information or systems, or
intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, could have a material adverse
effect on our customers experience, as well as on our business, financial condition and results of operations.
Our ability to remain competitive and achieve further growth will depend on the loyalty of our customers and on our ability to
keep our IT systems upgraded with all the features that our customers need. In addition, our IT systems must be available without
interruptions in order to increase our capacity on a timely and cost-effective basis. Any disruption or substantial failure to improve or
upgrade IT systems effectively or on a timely basis could materially affect us.
We are susceptible to fraud, unauthorized transactions and operational errors.
As with other financial institutions, we are susceptible to, among other things, fraud by employees or outsiders, unauthorized
transactions by employees and other operational errors (including clerical or record keeping errors and errors resulting from faulty
computer or telecommunications systems). Given the high volume of transactions that may occur at a financial institution, errors could
be repeated or compounded before they are discovered and remedied. In addition, some of our transactions are not fully automated,
which may further increase the risk that human error or employee tampering will result in losses that may be difficult to detect quickly
or at all. Losses from fraud by employees or outsiders, unauthorized transactions by employees and other operational errors could have
a material adverse effect on us.
Our policies and procedures may not be able to detect money laundering and other illegal or improper activities fully or on a timely
basis, which could expose us to fines and other liabilities.
We are required to comply with applicable anti-money laundering laws, anti-terrorism financing laws and other regulations.
These laws and regulations require us, among other things, to adopt and enforce “know your customer” policies and procedures and to
report suspicious or large transactions to the applicable regulatory authorities. While we have adopted policies and procedures aimed at
detecting and preventing the use of banking networks for money laundering activities and by terrorists and terrorist-related organizations
and individuals generally, such policies and procedures may not completely eliminate instances where they may be used by other parties
to engage in money laundering and other illegal or improper activities. If we fail to fully comply with applicable laws and regulations,
the relevant government authorities to which they report have the power and authority to impose fines and other penalties. In addition,
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our businesses and reputation could suffer if customers use our financial institutions for money laundering or illegal or improper
purposes. As of the date of this annual report, we have not been subject to material fines or other penalties, and we have not suffered
business or reputational harm, as a result of any money laundering activities in the past.
Risks Relating to Our Class B Shares and the ADSs
Holders of our Class B shares and the ADSs may not receive any dividends.
We are a holding company and our ability to pay dividends depends on the cash flow and distributable income of our operating
subsidiaries. We and our subsidiaries are subject to contractual, legal and regulatory requirements affecting our ability to pay dividends.
In particular, dividend distribution by the Bank are subject to the requirements established by the rules of the Central Bank, as amended
from time to time. Pursuant to such regulations, dividend distributions shall be admitted as long as none of the following circumstances
apply: (i) the financial institution is subject to a liquidation procedure or the mandatory transfer of assets ordered by the Central Bank
in accordance with section 34 or 35 bis of the FIL; (ii) the financial institution is receiving financial assistance from the Central Bank;
(iii) the financial institution is not in compliance with its reporting obligations to the Central Bank; (iv) the financial institution is not in
compliance with minimum capital requirements (both on an individual and consolidated basis and excluding any individual franchise
granted by the Superintendency) (Superintendencia de Entidades Financieras y Cambiarias, or “Superintendency”) and with minimum
cash reserves (on average), whether in Pesos, foreign currency or securities issued by the public sector; (v) if the average minimum cash
reserve is lower than the amount of cash required by the latest reported position or the pro forma position after making the dividend
payment; and/or (vi) if the financial institution did not comply with the applicable Additional Capital Margins (as defined below).
Financial institutions that comply with all of the above mentioned conditions may distribute dividends up to an amount equal to: (i) the
positive balance of the account “unappropriated earnings” (resultados no asignados) at the end of the fiscal year, plus (ii) voluntary
reserves for future payments of dividends, minus (iii) voluntary reserves and mandatory statutory reserves registered as of that date and
other items, such as (a) 100% of the debit balance of each of the items recorded under “Other accumulated comprehensive income,”
(b) the result from the revaluation of property, plant, equipment and intangible assets and investment properties, (c) the net positive
balance of the book-value and the market-value of certain public debt securities and Central Bank notes that the financial institution
owns that are not marked to market, (d) unrecorded adjustments of asset value informed by the Superintendency or mentioned by external
auditors on their report, and (e) individual exemptions for asset valuation granted by the Superintendency.
Although distribution of dividends to us by the Bank has been authorized by the Central Bank in the past, it is possible that in
the future the Central Bank may limit the Bank’s ability to distribute dividends approved by its shareholders at the annual ordinary
shareholders’ meeting without its prior consent, or such authorization may not be for the full amount of distributable dividends.
Restrictions on transfers of foreign exchange and the repatriation of capital from Argentina may impair your ability to receive
dividends and distributions on, and the proceeds for any sale of, the Class B shares underlying the ADSs.
Exchange controls currently in place could impair or prevent the conversion of anticipated dividends, distributions, or the
proceeds from any sale of Class B shares, as the case may be, from Pesos into U.S. dollars and the remittance of the U.S. dollars abroad.
In particular, with respect to the dividends and distributions on any sale of Class B shares underlying the ADSs, as of the date of this
annual report, the conversion from Pesos into U.S. dollars and the remittance of such U.S. dollars abroad is subject to prior Central Bank
approval, which may not be granted. Access to the free foreign exchange market (“MLC,” as per its Spanish acronym) to pay dividends
to non-resident shareholders is granted subject to the following conditions:
Maximum amounts: the total amount of transfers made through the MLC for payment of dividends to non-resident
shareholders may not exceed the 30% of the total value of the capital contributions made in the relevant local company
that entered and settled through the MLC as of January 17, 2020. The total amount paid to non-resident shareholders shall
not exceed the corresponding amount denominated in Pesos determined by the shareholders’ meeting to be distributed as
dividends.
Minimum Period: access to the MLC will only be granted after a period of not less than thirty (30) calendar days has
elapsed as from the date of the settlement of the last capital contribution that is taken into account for determining the
aforementioned 30% cap.
Documentation requirements: dividends must be the result of closed and audited balance sheets. When requesting access
to the MLC for this purpose, evidence of the definitive capitalization of capital contributions must be provided or, in lack
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thereof, evidence of filing of the process of registration of the capital contribution before the Public Registry shall be
provided. In this case, evidence of the definitive capitalization shall be provided within 365 calendar days from the date of
the initial filing with the Public Registry. If applicable, the external assets and liabilities reporting regime set forth by
Communication “A” 6401 of the Central Bank (the “External Assets and Liabilities Reporting Regime”) shall have been
complied with.
If the exchange rate fluctuates significantly during a time when the Depositary (as defined in “Item 12.D. American Depositary
Shares”) cannot convert or reinvest the foreign currency, you may lose some or all of the value of the dividend distribution. Also, if
payments cannot be made in U.S. dollars abroad, the repatriation of any funds collected by foreign investors in Pesos in Argentina may
also be subject to restriction. Moreover, available mechanisms to receive dividends in U.S. dollars may involve a significantly higher
implicit exchange rate. See “Item 10.D. Exchange Controls.”
We are traded on more than one market and this may result in price variations; in addition, investors may not be able to easily
move shares for trading between such markets.
In addition to the trading of our ADSs in the United States and countries other than Argentina, our Class B shares are traded in
Argentina. Trading in the ADSs or our Class B shares on these markets will take place in different currencies (U.S. dollars on the New
York Stock Exchange (“NYSE”) and Pesos on ByMA), and at different times (resulting from different time zones, different trading days
and different public holidays in the United States and Argentina). The trading prices of these securities on these two markets may differ
due to these and other factors. Any decrease in the price of our Class B shares on the ByMA could cause a decrease in the trading price
of the ADSs on the NYSE. Investors could seek to sell or buy our shares to take advantage of any price differences between the markets
through a practice referred to as arbitrage. Any arbitrage activity could create unexpected volatility in both our share prices on one
exchange, and the ADSs available for trading on the other exchange. In addition, holders of ADSs will not be immediately able to
surrender their ADSs and withdraw the underlying Class B shares for trading on the other market without effecting necessary procedures
with the Depositary. This could result in time delays and additional cost for holders of ADSs.
Under Argentine Corporate Law, shareholder rights may be fewer or less well defined than in other jurisdictions.
Our corporate affairs are governed by our bylaws and by the Argentine General Corporations Law, which differ from the legal
principles that would apply if we were incorporated in a jurisdiction in the United States (such as Delaware or New York), or in other
jurisdictions outside Argentina. Thus, your rights or the rights of holders of our Class B shares under the Argentine General Corporations
Lawto protect your or their interests relative to actions by our Board of Directors may be fewer and less well defined than under the
laws of those other jurisdictions. Although insider trading and price manipulation are illegal under Argentine law, the Argentine
securities markets may not be as highly regulated or supervised as the U.S. securities markets or markets in some of the other
jurisdictions. In addition, rules and policies against self-dealing and regarding the preservation of shareholder interests may be less well
defined and enforced in Argentina than in the United States, or other jurisdictions outside Argentina, putting holders of our Class B
shares and the ADSs at a potential disadvantage.
Holders of our Class B shares and the ADSs located in the United States may not be able to exercise preemptive rights.
Under the Argentine General Corporations Law, if we issue new shares as part of a capital increase, our shareholders may have
the right to subscribe to a proportional number of shares to maintain their existing ownership percentage. Rights to subscribe for shares
in these circumstances are known as preemptive rights, pursuant to the Argentine General Corporations Law. In addition, shareholders
are entitled to the right to subscribe for the unsubscribed shares remaining at the end of a preemptive rights offering on a pro rata basis,
which are known as accretion rights. Upon the occurrence of any future increase in our capital stock, United States holders of Class B
shares or ADSs will not be able to exercise the preemptive and related accretion rights for such Class B shares or ADSs unless a
registration statement under the Securities Act is effective with respect to such Class B shares or ADSs or an exemption from the
registration requirements of the Securities Act is available. We are not obligated to file a registration statement with respect to those
Class B shares or ADSs. We may not file such a registration statement, or an exemption from registration may not be available. Unless
those Class B shares or ADSs are registered or an exemption from registration applies, a U.S. holder of our Class B shares or ADSs may
receive only the net proceeds from those preemptive rights and accretion rights if those rights can be sold by the Depositary; if they
cannot be sold, they will be allowed to lapse. Furthermore, the equity interest of holders of Class B shares or ADSs located in the United
States may be diluted proportionately upon future capital increases.
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Your voting rights with respect to the ADSs are limited by the terms of the deposit agreement.
Holders may exercise voting rights with respect to the Class B shares underlying ADSs only in accordance with the provisions
of the deposit agreement. There are no provisions under Argentine law or under our bylaws that limit ADS holders’ ability to exercise
their voting rights through the depositary with respect to the underlying Class B shares, except if the depositary is a foreign entity and
it is not registered with the Inspección General de Justicia (“IGJ”), and in this case, the depositary is registered with the IGJ. However,
there are practical limitations upon the ability of ADS holders to exercise their voting rights due to the additional procedural steps
involved in communicating with such holders. For example, Argentine Capital Markets Law requires us to notify our shareholders by
publications in certain official and private newspapers of at least 20 and no more than 45 days in advance of any shareholders’ meeting.
ADS holders will not receive any notice of a shareholders’ meeting directly from us. In accordance with the deposit agreement, we will
provide the notice to the Depositary, which will in turn, if we so request, as soon as practicable thereafter provide to each ADS holder:
o
the notice of such meeting;
o voting instruction forms; and
o
a statement as to the manner in which instructions may be given by holders.
To exercise their voting rights, ADS holders must then provide instructions to the Depositary on how to vote the shares
underlying ADSs. Because of the additional procedural step involves the Depositary, the process for exercising voting rights will take
longer for ADS holders than for holders of Class B shares.
Except as described in this annual report, holders will not be able to exercise voting rights attaching to the ADSs.
The relative volatility and illiquidity of the Argentine securities markets may substantially limit your ability to sell Class B shares
underlying the ADSs at the price and time you desire.
Investing in securities that trade in emerging countries, such as Argentina, often involves greater risk than investing in securities
of issuers in the United States. The Argentine securities market is substantially smaller, less liquid, more concentrated and can be more
volatile than major securities markets in the United States, and is not as highly regulated or supervised as some of these other markets.
There is also significantly greater concentration in the Argentine securities market than in major securities markets in the United States.
As of December 31, 2023, the ten largest companies in terms of market capitalization represented approximately 82% of the aggregate
market capitalization of the S&P Merval index. Accordingly, although you are entitled to withdraw the Class B shares underlying the
ADSs from the Depositary at any time, your ability to sell such shares at a price and time at which you wish to do so may be substantially
limited. Furthermore, exchange controls imposed by the Central Bank could have the effect of further impairing the liquidity of the
ByMA by making it unattractive for non-Argentines to buy shares in the secondary market in Argentina. See “Item 10.D. Exchange
Controls.”
Substantial sales of our Class B shares or the ADSs could cause the price of the Class B shares or of the ADSs to decrease.
We may have shareholders that own a substantial amount of our Class B shares or ADSs. If such shareholders decide to sell a
substantial amount of our Class B shares or the ADSs, or if the market perceives they intend to sell a substantial amount of our Class B
shares or the ADSs, the market price of our Class B shares or the ADSs could drop significantly.
Our shareholders may be subject to liability for certain votes of their securities.
Our shareholders are not liable for our obligations. Instead, shareholders are generally liable only for the payment of the shares
they subscribe. However, shareholders who have a conflict of interest with us and who do not abstain from voting may be held liable
for damages to us, but only if the transaction would not have been approved without such shareholders’ votes. Furthermore, shareholders
who willfully or negligently vote in favor of a resolution that is subsequently declared void by a court as contrary to the Argentine
General Corporations Lawor our bylaws may be held jointly and severally liable for damages to us or to other third parties, including
other shareholders.
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If we are a passive foreign investment company for U.S. federal income tax purposes for any taxable year, U.S. holders of our Class
B shares or ADSs could be subject to adverse U.S. federal income tax consequences.
Based on the composition of our income and assets and the valuation of our assets, we do not believe we were a passive foreign
investment company (a “PFIC”) for 2023, although there can be no assurance in this regard. In general, we will be a PFIC for U.S.
federal income tax purposes for any taxable year in which (i) at least 75% of our gross income is passive income or (ii) at least 50% of
the value (generally determined based on a quarterly average) of our assets is attributable to assets that produce or are held for the
production of passive income. Certain proposed U.S. Treasury regulations and other administrative pronouncements from the Internal
Revenue Service provide special rules for determining the character of income derived in the active conduct of a banking business for
purposes of the PFIC rules. Specifically, these rules treat certain income earned by a non-U.S. corporation engaged in the active conduct
of a banking business as non-passive income. Although we believe we are engaged in the active conduct of a banking business, the
application of these special rules to our activities, and, thus, the characterization of some of our income and assets for purposes of the
PFIC rules, is not entirely clear. Thus, there can be no assurance that the IRS will agree with our determination with respect to our PFIC
status. In addition, these special rules are subject to change in the future.
The determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may become a PFIC in the
current or any future taxable year due to changes in our asset or income composition. If we are a PFIC for any taxable year during which
a U.S. holder (as defined in “Item 10.E. Taxation—United States Federal Income Tax Considerations”) holds our Class B shares or
ADSs, certain adverse U.S. federal income tax consequences could apply to such U.S. holder. For example, if we are a PFIC, U.S.
holders may become subject to increased tax liabilities under U.S. federal income tax laws and regulations and will become subject to
burdensome reporting requirements. See “Item 10.E. Taxation—United States Federal Income Tax Considerations—Passive Foreign
Investment Company.” The determination of our PFIC status cannot be completed until the close of a taxable year, and there can be no
assurance we will not be a PFIC for any taxable year.
Item 4. Information of the Company
Item 4.A History and development of the Company
We are a financial group with a long-standing presence in the Argentine financial system and a leading competitive position in
certain attractive market segments. We are controlled by Julio Patricio Supervielle. We trace our history back more than 130 years,
when the Supervielle family, predecessors of our controlling shareholder, first entered the Argentine financial services industry in 1887.
Below is a brief history of our company, including the participation of the Supervielle family.
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Supervielle y Cía. Banqueros
The predecessors of our controlling shareholder emigrated from France in the second half of the 19 th century and established
L.B. Supervielle y Cía. Banque Francaise (later Banco de Montevideo S.A.) in Montevideo, Uruguay. In 1887, they established
Supervielle y Cía. Banqueros (a subsidiary of L.B. Supervielle y Cía. Banque Francaise) in Buenos Aires. Supervielle y Cía. Banqueros
offered demand deposits, time deposits, savings accounts, securities trading orders, purchases and sales of foreign currency and drafts
and letters of credit payable in European financial centers. Luis Bernardo Supervielle managed the bank until his death in 1901,
whereupon the bank’s management transferred to his son, Luis Supervielle, and subsequently to Esteban Barón, son-in-law of Luis
Bernardo Supervielle, who in 1905 became president of Supervielle y Cía. Banqueros. Mr. Barón managed the bank from 1905 until
1930, and subsequently served on the board of the bank as an honorary president until 1964. Mr. Barón’s son, Andrés Barón, joined the
bank in 1925 and took over its general management in 1930, also becoming chairman of the board of the bank in 1940. He carried out
these functions until 1964, and then served on the board of the bank as an honorary president.
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On December 30, 1940, Banco Supervielle de Buenos Aires S.A., a bank controlled by the Barón and Supervielle families,
acquired the assets and liabilities of Supervielle y Cía. Banqueros and listed its shares on the Buenos Aires Stock Exchange. Esteban
Barón and his son, Andrés Barón Supervielle, continued to manage the operations of this bank until 1964.
In 1964, Société Générale (Paris) acquired a majority of the capital stock of Banco Supervielle de Buenos Aires S.A. from the
Barón and Supervielle families, transforming it into a universal bank with 60 branches and a significant presence in the corporate market.
Following the acquisition of control by Société Générale, the Supervielle family had no role in the management of Banco Supervielle.
In 1997, Banco Supervielle de Buenos Aires S.A. created Société Générale Asset Management Sociedad Gerente de FCI S.A. In
March 2000, the name Banco Supervielle de Buenos Aires S.A. was changed to Banco Société Générale S.A.
Banco Banex S.A.
In 1969, Jules Henri Supervielle, the father of Julio Patricio Supervielle, our controlling shareholder, and cousin of the
Supervielle family members who had owned and managed Banco Supervielle de Buenos Aires S.A. until 1964, founded Exprinter de
Finanzas S.A., which became Exprinter Banco S.A. in 1991. On July 15, 1996, Exprinter Banco S.A. acquired 100% of the capital stock
of Banco San Luis S.A. pursuant to a public bidding process organized by its owner, the Province of San Luis. The acquisition was part
of a strategic plan aimed at growing in the interior of Argentina and penetrating the retail and the SMEs segments. In 1998, Exprinter
Banco S.A. and Banco San Luis S.A. merged to create Banco San Luis S.A. Banco Comercial Minorista, and was later renamed Banco
Banex S.A. In 2001, Banco Banex S.A. acquired several branches of Banco Balcarce S.A.
Creation of Holding Company
Grupo Supervielle was incorporated in the City of Buenos Aires in 1979, under the name Inversiones y Participaciones S.A.,
changing the name to Grupo Supervielle S.A. in November 2008.
Acquisition of Banco Société Générale S.A. by Banco Banex S.A.
In March 2005, the Central Bank approved the purchase by Banco Banex S.A. of a majority stake in Banco Société Générale
S.A., Supervielle Asset Management Sociedad Gerente de FCI S.A. and Sofital. Upon consummation of this acquisition, Banco Société
Générale S.A.’s corporate name was changed to Banco Supervielle S.A. At the time of the purchase, the total assets of Banco Banex
S.A. were 61.3% of the total assets of Banco Societé Générale S.A.
Merger of Banco Banex S.A. and Banco Supervielle S.A.
In July 2007, with the prior approval of the Central Bank, Banco Banex S.A. merged into the Bank.
Acquisition of Banco Regional de Cuyo S.A.
In September 2008, the Bank finalized the acquisition of 99.94% of the capital stock of Banco Regional de Cuyo S.A. The
Banco Regional de Cuyo S.A. merged with and into the Bank in November 2010.
Creation of Espacio Cordial de Servicios S.A.
In October 2012, our Board of Directors approved the creation of ECM S.A., which was later renamed Espacio Cordial de
Servicios S.A. Cordial Servicios is an entity created to sell non-financial products and services, such as insurance plans and coverage,
tourism packages, health insurance and health services, electric appliances and furniture, insurance mechanisms and plans and alarm
systems.
Acquisition of Supervielle Seguros S.A.
In February 2013, we and Sofital accepted an offer for the acquisition of 100% of the shares of an insurance company named
Aseguradores de Créditos del Mercosur S.A. In June 2013, 95% of the shares of Aseguradores de Créditos del Mercosur S.A. were
transferred to us and the remaining 5% of the shares were transferred to Sofital. In October 2013, Aseguradores de Créditos del Mercosur
S.A. was renamed Supervielle Seguros S.A.
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Successful IPO in May 2016
Since May 19, 2016, the ordinary Class B shares of Grupo Supervielle S.A. are listed on ByMA, and its ADSs, each of which
represents five ordinary Class B shares, are listed on the NYSE under the ticker “SUPV.” At the time, Grupo Supervielle made an initial
public offer of its Class B shares in Argentina and of its ADSs in the international markets for an aggregate amount of U.S.$323 million.
Through the offering, Grupo Supervielle placed 146,625,087 ordinary Class B shares, of which 137,095,955 were placed internationally
in the form of ADSs. In the offering, 114,807,087 were newly issued ordinary Class B shares while 31,818,000 were sold pursuant to a
secondary offering.
Capitalization of an in-kind contribution and resulting capital stock increase
At the ordinary and extraordinary shareholders’ meeting of Grupo Supervielle held on April 27, 2017, the shareholders of
Grupo Supervielle approved the capitalization of an in-kind contribution of 7,672,412 shares of common stock of Sofital made by
Mr. Julio Patricio Supervielle and an increase of the capital stock of Grupo Supervielle through the issuance of up to 8,032,032 new
Class B shares. In connection with the capital increase, on July 18, 2017, a total of 7,494,710 new Class B shares were subscribed as
follows: (i) 4,321,208 were issued to Mr. Julio Patricio Supervielle in return for the in-kind contribution, representing 57.7% of the total
capital increase, and (ii) 3,173,502 Class B shares were issued to existing shareholders of Grupo Supervielle who exercised their
preemptive and accretion rights with respect to the capital increase, representing 42.3% of the total capital increase.
Successful completion of follow-on and capital increase
In September 2017, Grupo Supervielle made an increase of capital stock through an offer of Class B shares. Simultaneously
with the offer, Grupo Supervielle made an offer of preemptive and accretive rights of Class B shares to existing shareholders. As a result
of the offer, Grupo Supervielle issued a total of 85,449,997 new Class B shares for a total of U.S.$344.0 million.
Creation of Fideicomiso Financiero Fintech Supervielle I
On February 16, 2018, our Board of Directors approved the creation of Fideicomiso Financiero Fintech Supervielle I to invest
in financial technology (fintech) and insurance technology (insurtech) start up projects in an amount up to U.S.$3 million. The
Fideicomiso Financiero Fintech Supervielle I has made investments with minor participations in the following start-up projects since its
creation: 123Seguro, Increase, Avancargo, Blended, SixClovers and Lemon Cash. The Fideicomiso Financiero Fintech Supervielle I is
financed by Grupo Supervielle and the Bank. On July 15, 2022, the Fideicomiso Financiero Fintech Supervielle I entered into a limited
partnership agreement with Alaya Capital Partners III LP pursuant to which the Fideicomiso Financiero Fintech Supervielle I made a
contribution of all its participations in the aforementioned start-up projects to Alaya Capital Partners III LP.
Acquisition of Micro Lending S.A.U.
On April 6, 2018, Grupo Supervielle approved an offer to acquire 100% of the share capital of MILA. MILA specializes in car
financing, particularly in used cars. On May 2, 2018, Grupo Supervielle closed the acquisition of MILA.
Acquisition of the capital stock of InvertirOnline S.A.U. and InvertirOnline.com Argentina S.A.U. (renamed as Portal Integral de
Inversiones S.A.U.)
On May 24, 2018, we acquired the capital stock of the online trading platform IOL invertironline through the purchase of
InvertirOnline S.A.U. and InvertirOnline.com Argentina S.A.U. In July 2021, the platform was renamed IOL invertironline. On April
19, 2022, InvertirOnline.com Argentina S.A.U. was renamed as Portal Integral de Inversiones S.A.U.
Conversion of Class A shares
On April 24, 2019, as requested by Mr. Julio Patricio Supervielle, our Board of Directors authorized the conversion of
65,000,000 Class A shares, with a par value of Ps.1.00 each and entitled to five votes per share, held by Mr. Supervielle, into Class B
shares, with a par value of Ps.1.00 each and entitled to one vote per share, pursuant to Section 6(b) of our bylaws. On May 9, 2019, the
conversion was approved by the CNV.
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Creation of Bolsillo Digital S.A.U.
On June 12, 2019, we created Bolsillo Digital. This company is a fintech which was introduced in the fast-growing industry of
means of payment, which designs and develops products and services for payment processing, thereby offering solutions to businesses
and individuals and facilitating their integration into the digital payment systems by using mobile points of sale (“MPOS”) and mobile
wallet products. On August 5, 2021, Grupo Supervielle transferred its shares of Bolsillo Digital to its subsidiary Banco Supervielle S.A.
as part of its strategy within the industry of means of payment. Bolsillo Digital’s main activity until 2022 was to provide payment
services under its brand Boldi (“Boldi”). In February 2023, the Boldi app was permanently closed. As of the date of this annual report,
Bolsillo Digital is in the process of being dissolved.
Creation of Supervielle Productores Asesores de Seguros S.A.
On December 21, 2018, we created Supervielle Productores Asesores de Seguros, which has the exclusive purpose of carrying
out the insurance intermediation activity, promoting the contracts of life insurance, wealth and pension insurance premiums, and advising
customers and potential customers. Grupo Supervielle owns more than 99% of its share capital, directly or indirectly. Supervielle
Productores Asesores de Seguros began operating in the second half of 2019.
Acquisition of Futuros del Sur S.A. (renamed as Supervielle Agente de Negociación S.A.U.)
On December 18, 2019, Supervielle acquired 100% of the share ownership of Futuros del Sur S.A., a brokerage firm seeking
to broaden the investment and financial services it provides to institutional and corporate customers and also drive efficient and profitable
cross selling. On January 24, 2022, Futuros del Sur S.A. changed its corporate name to Supervielle Agente de Negociación S.A.U.
Acquisition of Easy Cambio S.A. (renamed as Dólar IOL S.A.U.)
In October 2020, Grupo Supervielle acquired Easy Cambio S.A., a foreign exchange broker authorized by the Central Bank.
On March 17, 2022, Easy Cambio S.A. changed its corporate name to Dólar IOL S.A.U. On November 17, 2022, the board of directors
of Dólar IOL S.A.U. resolved to cease the activity of the company as a foreign exchange broker given its low operation volumes since
May 2021. On November 17, 2022, Dólar IOL S.A.U. requested to the Central Bank the cancellation of the authorization to carry out
exchange operations and to revoke the registration of the company from the Central Bank’s Registry of Foreign Exchange Operators
(Registro de Operadores de Cambio). Following the Central Bank’s authorization, Dólar IOL S.A.U. was dissolved.
Acquisition of the capital stock of IOL Holding S.A. and IOL Agente de Valores S.A.
On August 6, 2021, Grupo Supervielle acquired 95% of the shares of IOL Holding, a company incorporated in Uruguay. Sofital
acquired the remaining 5% of the shares of IOL Holding.
On August 23, 2021, IOL Holding acquired 100% of the shares of IOL Agente de Valores S.A., a company incorporated in
Uruguay which is expected to provide security dealer services. On June 16, 2022, the Central Bank of Uruguay authorized IOL Agente
de Valores to act as a security dealer providing services to non-residents of Uruguay. IOL Agente de Valores S.A. is expected to provide
its services through an online platform to non-residents of Uruguay who may be based in Latin America and seek to participate in the
U.S. capital markets.
Merger of Tarjeta Automática S.A. and IUDÚ into the Bank
On December 14, 2022, the Bank, as the absorbing entity, and Tarjeta Automática S.A. and IUDÚ, as the absorbed entities,
entered into merger agreements, pursuant to which Tarjeta Automática S.A. and IUDÚ merged into the Bank effective January 2023.
On December 1, 2023, the Central Bank approved the mergers. These mergers allowed us to simplify the Group’s corporate structure
and complete the Group’s corporate integration plans which began in September 2022.
Executive Offices
Our principal executive offices are located at Reconquista 330, Buenos Aires, Argentina. Our general telephone number is
+54-11-4340-3100. Our website is http://www.gruposupervielle.com. Information contained or accessible through our website is not
incorporated by reference in, and should not be considered part of, this annual report.
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We file reports, including our annual reports on Form 20-F, and other information with the SEC pursuant to the rules and
regulations of the SEC that apply to foreign private issuers. The SEC maintains an internet site that contains reports, proxy and
information statements, and other information regarding issuers that file electronically with the SEC. Any filings we make electronically
with the SEC are available to the public over the Internet at the SEC’s web site at http://www.sec.gov.
Our agent for service of process in the United States is CT Corporation System, located at 111 Eighth Avenue, New York, New
York, 10011.
Item 4.B
Business Overview
Overview
We provide a wide range of financial and non-financial services to our clients and have more than 130 years of experience
operating in Argentina. We are focused on offering fast solutions to our clients and effectively adapting to evolving changes within the
industries in which we operate. Grupo Supervielle operates multiple platforms and brands and has developed a diverse ecosystem to
respond to our clients’ needs. Since May 2016, the shares of Grupo Supervielle are listed on the ByMA and NYSE.
Our company takes advantage of the following strengths and opportunities:
• We are the oldest private franchise in Argentina and own the eighth largest Argentine private bank in terms of loans, and
have a recognized presence within the Argentine financial industry;
• We operate in an underpenetrated financial system. The Argentine financial system is one of the least penetrated financial
systems in Latin America, with a fragmented and competitive landscape. As a result, the Argentine financial system
presents a number of growth opportunities, as Argentina resumes its stabilization process. We are well positioned and
constantly evolving to capture these growth opportunities given our focus on a differentiated customer experience.
• We have a strong liquidity and a solid capital base which support our growth initiatives. In addition to organic growth, we
have significantly increased our business through acquisitions which have allowed us to expand our private loan market
share among financial institutions from 0.1% to 2.4% between December 2002 and December 2023.
• We are going through a process of cultural and digital transformation aimed at addressing the challenging and fast-moving
context of disruption that the global financial industry is going through. We adopted a customer-centric, product-oriented
operational model which enables us to understand our customers’ needs and to strengthen our digital product culture.
During 2023, we continued to develop our operating model by deepening empowerment of our customer-centric
autonomous cells and strengthening our digital product capabilities. This enables us to evolve into a culture of innovation,
accelerate time to market of new value propositions, and enhance the customer experience.
• We are building a service ecosystem. We continue to build our ecosystem integrating our service offerings and adding
third-party partnerships, improving customer experience, while driving synergies among our different verticals, increasing
customer loyalty and pursuing cross selling initiatives.
Our controlling shareholder has a strong commitment to the Argentine financial system. Julio Patricio Supervielle is the
Chairman of the Board of Directors and the CEO of Grupo Supervielle and has led Grupo Supervielle for almost 25 years. During his
tenure, we have experienced growth in terms of net worth, assets, deposits, our footprint and customer base, and we have successfully
completed some of our most significant acquisitions. We rely on our Board of Directors whose members collectively have extensive
experience in retail and commercial banking, a deep understanding of local business sectors and strong capabilities in risk management,
finance, capital markets, M&A and corporate governance. In addition, our senior management team is comprised of seasoned officials
and experts in their fields that foster a business culture of high performance. Our subsidiaries are: (i) Banco Supervielle S.A., which is
the eighth largest private bank in Argentina in terms of loans; (ii) Supervielle Seguros, an insurance company; (iii) Supervielle
Productores Asesores de Seguros, an insurance broker; (iv) Supervielle Asset Management, a mutual fund management company; (v)
Supervielle Agente de Negociación, a brokerage firm offering services to institutional and corporate customers; (vi) IOL invertironline,
a broker specialized in online trading and a platform that offers online services related to financial investments; (vii) Espacio Cordial,
an entity offering retail non-financial products, assistance, services and tourism; and (viii) MILA, a company specialized in car financing.
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Our subsidiaries also include Sofital, a holding company that owns shares of the same companies owned by Grupo Supervielle, and
Bolsillo Digital, which is in the process of being dissolved.
In 2023, we continued to operate in an adverse macroeconomic environment characterized by the highest levels of inflation
recorded in decades. Our strategic focus was on driving higher operating leverage, which we achieved by advancing our digital
transformation which we started to implement in 2018 and our process of modernizing infrastructures and resizing the Bank’s branch
network. As of December 31, 2023, we had a distribution network that gained efficiency due to the process of consolidation and
consolidated 46 branches reducing the number of our branches from 183 in 2020 to 137 as of December 31, 2023.
Moreover, we continue to enhance our service model, improving digital and automatic channels while transforming our branch
network to deliver higher-value transactions to customers, while boosting cross-selling efforts and establishing the base to drive higher
productivity as growth resumes and inflation decreases.
On a consolidated basis, we had:
• Ps.2,058.0 billion in total assets as of December 31, 2023, compared to Ps.2,166.0 billion in total assets as of December
31, 2022;
• Ps.499.9 billion in loans as of December 31, 2023, compared to Ps.766.5 billion in loans as of December 31, 2022;
• Ps.611.4 billion in loans, financing and off-balance guarantees as of December 31, 2023, compared to Ps.816.9 billion as
of December 31, 2022;
• Ps.1,548.9 billion in deposits as of December 31, 2023, including Ps.1,448.2 billion from the private sector, and Ps.100.7
billion from the non-financial public sector, compared to Ps.1,705.0 billion in deposits as of December 31, 2022, including
Ps.1,618.3 billion from the private sector and Ps.86.7 billion from the non-financial public sector;
• Ps.341.4 billion in attributable shareholders’ equity as of December 31, 2023, compared to Ps.287.3 billion in attributable
shareholders’ equity as of December 31, 2022; and
•
3,663 employees as of December 31, 2023, compared to 3,814 employees as of December 31, 2022.
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During 2023, we continued to build our ecosystem, and served 2.0 million active customers, while we continued to execute on
the key strategic pillars of our strategy designed to improve profitability and efficiency. The following chart illustrates our business
ecosystem as of December 31, 2023:
Notes: (1) Loans and Deposits Market share: Banco Supervielle Market Share among Argentine Private banks; and (2) Insurance Market share among the insurance
lines we underwrite as of the last twelve months as of June 2023, which is the latest information available as of the date of this annual report.
Financial Services
We own the eighth largest Argentine private bank in terms of loans. Through the Bank, we serve 1.5 million individual
customers, around 25,000 small businesses, 2,800 SMEs and 1,900 corporates, and we maintain a competitive leading position in certain
strategic segments.
According to calculations based on Central Bank and other third-party information, our share for the following products is as
follows:
•
•
total loans: our market share as of December, 2023 was 2.4%, compared to a 2.9% market share as of December, 2022;
total deposits: our market share as of December, 2023 was 2.6%, compared to a 2.9% market share as of December, 2022.
Additionally, based on the latest information published by ANSES, we made 8.9% of all social security payments to senior
citizens in Argentina as of December 31, 2023, compared to 9.1% as of December 31, 2022.
Through the Bank, we maintain a strong geographic presence in the City of Buenos Aires and the Greater Buenos Aires
metropolitan area, which is Argentina’s most commercially significant and highly populated area, and we are leaders in terms of our
banking network in some of Argentina’s most dynamic regions, including Mendoza.
Moreover, we are advancing on our omnichannel strategy and developing a hybrid model including virtual branches to expand
our footprint and offer banking services anywhere and anytime. This model combines the efficiencies of a virtual branch with the
strength of face-to-face interactions.
We also continue to make significant progress on our branch transformation, implementing a new service model and updating
our network. In 2023, enhancing the customer experience has been a key initiative which has accelerated digital adoption, increased
engagement and cross-selling while boosting our competitive net promoter score (“NPS”).
As of December 31, 2023, the share of digital customers expanded by 10 percentage points to 62%. Our digital wallet, through
the online banking platform Supervielle App, continues to gain customer engagement and the number of transfers made through this
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app more than doubled to 7 million as of December 2023, and increased 10 times in QR code payments and 84% in bill payments.
“Inversión Rapida”, which is a mobile app feature that allows our customers to invest in money market funds, disrupted the retail value
proposition by allowing customers to invest 24/7 in money market funds and safeguard their savings from inflation. This contributed to
year-on-year increases of 9 times in the number of retail clients investing in our money market funds and Assets Under Management
expanding 7 times in nominal terms.
During 2023, we also expanded the Entrepreneur and SMEs (“E&P” as is called in Spanish), SMEs and middle market
customers by nearly 5% compared to 2022. The digital working capital financing products which we started offering during 2023 had a
successful adoption by our customers. As of December 31, 2023, digital transactions by SMEs accounted for 93% of factoring, 72% of
commercial unsecured loans, and 52% of overdrafts. We also increased cross-selling while improving NPS across all segments for the
second consecutive year. The penetration of insurance policies sold to Entrepreneurs and SME customers increased to 10% from 7% in
2022, while the renewal rate increased close to 90% compared to 2022, underscoring customer retention. We gained share in sight
deposits, which increased to approximately 2.4%, and continued to expand FX trade transactions, gaining over 1.3% of market share to
4.8%. In addition, we were recognized by Euromoney as the Best Trade Finance Argentine Bank.
Insurance
The insurance business is continuously adapting its products to the needs of our customers. We have access to customers
through our distribution networks and aim to further develop our bancassurance distribution model by expanding the variety of insurance
products offered.
In 2023, Supervielle Seguros issued 445,000 active policies with individual clients and more than 4,000 with corporate clients.
We focused on enhancing the digital experience for individual customers, expanding the range of coverage with more simple products.
As a result, sales of digital products accounted for 26% of auto, home, and technology insurance in December 2023, increasing from
10% in January 2023.
We also doubled our sales through Online Banking and Mobile compared to 2022 and began scaling insurance sales through
the our Virtual Hub channel, with a total of 3,028 policies sold, compared to 476 in 2022. See “—Bank Distribution Network—Virtual
Hub.”
Regarding in-person channels, Supervielle Seguros achieved a 58% increase in productivity, surpassing pre-pandemic levels,
increasing insurance placements by 20% and cross-selling by 37% compared to 2022. Additionally, customer satisfaction measured by
NPS improved 9 percentage points in 2023.
Savings
We offer investments and savings solutions to our customers through a wide range of products. Through Supervielle Asset
Management, we have 17 mutual funds designed to meet customers’ particular investment objectives and risk profiles. As of
December 31, 2023, monthly average assets under management accounted for Ps.512.5 billion, compared to Ps.119.3 billion monthly
average assets under management as of December 31, 2022 (measured in historical currency).
Investments
IOL invertironline ranked third in the ByMA exchange ranking on Equity with a 4.64% market share and fifth in terms of
CEDEARs (Certificado de Depósito Argentinos) with a 4.64% market share as of December 2023. In 2023, we carried out more than
14 million transactions, we opened 916,000, accounts (with a monthly record of more than 93,000 accounts in October) and at the end
of the year we had 483,580 active customers, more than 916,000 accounts and a customer activity rate of 52.8%. Additionally, we
contribute to improve financial education with around 9,000 participants attending financial courses education offered by IOL
invertironline in 2023.
IOL invertironline continued to drive strong fee growth over 150% compared to 2022, expanding assets under management
while attracting and retaining customers.
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We achieved remarkable year-on-year growth across all key performance indicators, underscoring our ability to attract and
retain customers. Monthly active users increased by 5 times to more than 270,000, new accounts increased by three times, app downloads
increased by 9 times, and Assets under Management increased by 7 times in nominal terms, compared to 2022.
Payments
In 2020, we joined Play Digital S.A. (“Modo”), the systemic payment solution for banks in Argentina, as shareholder, with the
aim of expanding the offer of financial services to our clients throughout the country, integrating technologies that facilitate the use of
our applications on mobile devices, allowing them to operate in the digital market for payments and transfers through a systemic solution
of the highest quality standard. In 2021, we integrated Modo into our Supervielle App and our Supervielle Jubilados App, which serves
to provide services to senior citizens. In 2022, our Supervielle App for individuals implemented thefunctionality to make payments
using quick-response (“QR”) codes using credit, debit and account debit cards.
In 2023, we recorded a significant growth in the use of MODO as a payment method in our Supervielle App, reaching 1.3
million payments which used QR codes and growing 10 times as compared to 2022. As of the date of this annual report, more than
60,000 customers use our App monthly to make payments using QR codes and money transfers, as compared to 13,000 customers in
2022.
The use of digital channels for utility payments increased by 84% in 2023 compared to 2022. The penetration of this method
increased by 35% in 2023 compared to 2022, which also indicates an increase in the use of the Bank as the bank of choice.
In addition, during 2023 we developed OpenBanking, an online solution which may be used to operate with accounts in other
entities through our Supervielle App, thus becoming a digital wallet.
Mobility-Cars
In 2018, we started to develop our mobility car business with the acquisition of MILA, a company that specializes in car
financing. In December 2021, we signed an agreement to finance the operation of KAVAK, a digital platform for the sale of used cars.
As a result of this financing, KAVAK provides a wide range of financial and non-financial services to its customers and its customers
receive exclusive benefits. In 2023, we renewed our agreement with KAVAK. Within the framework of this agreement we increased
our market share from 40% in 2022 to 70% in 2023 in car loans, becoming the bank of choice in this segment.
During 2023, we focused on the profitability of this segment that serves both individuals and companies in the automotive
retail and wholesale markets, and we added 5,600 new customers and ranked third among banks in the market in terms of car loans.
Non financial services and products: Retail and Leisure, and Medical plans
Building on our banking sector expertise, we identify cross-selling opportunities and offer targeted products to our customers
at each point of contact though our brands Cordial and Tienda Supervielle. At the end of 2023, Espacio Cordial had more than 210,000
assistance services in its portfolio. The focus of the service is the coverage of unsatisfied needs in health services, such as dentistry,
ophthalmology, medical emergencies and telemedicine, and also household, car, motorcycle and pet needs. Tourism proposals are
marketed through Tienda Supervielle, which also offers financing. In 2023, the commercial focus was on digital operations and
commercial alliances with retailers and mass consumption companies, taking advantage of different digital, face-to-face and telephone
channels.
Our Vision and Strategy
The Argentine market is one of the least penetrated financial systems in Latin America, with a fragmented and competitive
landscape. We believe the Argentine market has significant underused financial infrastructure in the form of checking and savings
accounts and adequate mobile and internet penetration levels, which helps create growth opportunities. We believe we are well
positioned to capture these growth opportunities due to our digital transformation, our focus on a differentiated customer experience,
our evolving branch model and online platforms and our product offerings.
The industry in which we operate has been affected by the economic conditions in Argentina over the last several years. In
2023, Argentina’s GDP decreased by 1.6% as a result of the droughts which occurred in Argentina in 2023 and the decrease of the
32
agricultural exports by 20.6% compared to 2022. In 2022, Argentina’s GDP increased by 5.0% mainly due to the recovery of the
Argentine economy from the negative impact that the COVID-19 pandemic had on the Argentine economy. Inflation in Argentina
increased to 94.8% in 2022 and 211.4% in 2023. During 2022 and 2023, the Argentine financial system continued to face considerable
macroeconomic and regulatory challenges, such as minimum rates for time deposits, caps on interest rates on certain loans, mandatory
loans, limits on LELIQ holdings and foreign exchange market restrictions. As a result, as of December 31, 2023, the financial system
in Argentina had low credit demand with loans to GDP and deposits to GDP at historical low rates of 6.7% and 18.3%, respectively. In
December 2023, President Milei took office and the new administration remains committed to achieving fiscal surplus and is expected
to introduce reforms aiming to reach a macroeconomic and financial stabilization beyond 2024.
In 2020, we started a digital and cultural transformation aimed at addressing the challenging and fast-moving context of
disruption that the global financial industry is going through. This context led us to focus on improving our value proposition, customer
loyalty, customer acquisition and efficiency. Thus, we built a differentiated user experience in our digital channels and implemented a
program to address to our customers’ needs. Since then, we started innovating in the Virtual Hub and developed capabilities for future
banking sector of the future in terms of IT architecture, digital channels, cloud operability, use of artificial intelligence, digital marketing,
cybersecurity, data and advanced analytics. At the same time, we began to implement a digital mindset, with agile practices as part of
the end-to-end transformation of our operating model, with new disciplines led by COEs (Center of Excellence).
In 2023, we adopted a customer-centric, product-oriented organizational model which enables us to address our clients’ needs
and to strengthen our customers’ digital product culture. Also, as a result of our IT strategy we are migrating our application
programming interfaces to the cloud in order to give our new operating model the required agility and adaptability. We are committed
to a continuous migration of solutions under a multi-cloud strategy. At the end of 2023 we had migrated 131 applications to the cloud.
Migrated apps account for 50% of the migration plan and our objective is to migrate 100% of the applications not associated with our
core business by the end of 2024.
We aim to address our customers’ needs through hyper-personalized experiences that provide immediate solutions. We are
constantly transforming to offer these experiences. Our goal is to develop experiences of success for investment, collection, payment
and consultation of queries in a simple way. In addition, our infrastructure enables us to reach customers all through Argentina and
provide solutions to their financial needs with a higher level of service. In 2024, we expect to differentiate ourselves through the use of
artificial intelligence and our “Human Banking” service model to anticipate our customers’ needs. We created “Human Banking” in
2020 as a hybrid face-to-face and virtual service model aimed at developing solutions to improve the access to the Bank’s services.
During 2023, we continued to execute our key strategic pillars to improve our return on equity and drive long term value
creation. These strategic pillars are:
•
•
•
•
•
enhance the customer experience;
accelerate client acquisition in profitable segments;
expand digital adoption;
continue to capture operating efficiencies;
lower cost of funding; and
• maintain healthy asset quality.
As of the date of this annual report, we serve more than 2.0 million customers through this ecosystem. Improving asset quality
and funding are two other key pillars of our strategy where we are also advancing despite the challenging context. While accelerating
inflation and high market interest rates are weighted on industry loan demand, our prudent approach to asset quality has allowed us to
maintain stable and healthy asset quality levels. We expect to deliver loan growth and customer acquisition with a more efficient
structure, driving sustainable profitability, subject to market conditions.
Sustainability
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At Grupo Supervielle we are committed to our employees, customers and communities to achieve sustainable growth while
protecting the environment and acting with social responsibility. We integrate the sustainability strategy to our business model and
promote a responsible culture among our employees. We report on our non-financial performance in a clear and transparent way, in
connection with environmental, social and corporate governance (ESG) factors.
In 2023, we continued to develope goals and objectives that align with our sustainability strategies. In the environmental area,
we reduced total electricity consumption by 12% compared to 2022, expanded the use of renewable sources to 2,122 MWh, and offset
100% of our 2022 carbon footprint using the Greenhouse Gas Protocol guidelines. As part of our social responsibility actions, we
provided training to 8,249 people for the use of financial instruments. Additionally, we continued to develop various projects related to
education, childhood, the elderly, institutional strengthening, and initiatives that promote culture and the arts. To maximize opportunities
for generating shared value with our value chain, we evolved supplier risk management towards an integrated and holistic approach
framed within our Third-Party Risk Management Policy.
In the corporate governance area, we continued being part of the BYMA Sustainability Index for the sixth consecutive year,
which reflects our firm commitment to the integrity of the practices and policies that underpin our corporate leadership.
Regarding the development of strategic indicators of our ESG performance, on December 14, 2022 the Board of Directors of
Grupo Supervielle approved the Sustainability Policy which establishes the basic principles and provides a general framework for the
management of our sustainability agenda and its integration into the corporate strategy and business model. It applies to all of the
companies of Grupo Supervielle, and the Board of Directors is responsible for its review and amedment. In 2023, the Board of Directors
approved the Diversity, Equity and Inclusion Policy, which sets forth our commitment to promote a diverse work environment that
values and respects differences among our personnel.
We are committed to report our financial and non-financial performance to all our stakeholders. On March 6, 2024, we
published our 2023 Integrated Annual Report, which reflects our commitment towards transparency and disclosure, providing
stakeholders with a clear understanding of our ESG activities and progress and enhancing our dedication to sustainable practices and
responsible business operations.
The following are additional commitments of Grupo Supervielle in terms of sustainability:
• Customers
We extended the use of financial products and services (financial inclusion) to those who already have an account with Grupo
Supervielle, facilitating the adoption of new digital tools and promoting financial education.
• Employees
We create opportunities to promote employees’ growth and potential, and foster a diverse and inclusive work culture that values
individuals for who they are and what they contribute.
• Diversity
We are designing our diversity strategy by creating a diversity, equity and inclusion forum and developing an action plan to
continue promoting diversity within our organizations.
• Community
We promote social investment with impact on projects related to education, minors, the elderly and institutional strengthening,
and actions that promote culture and the arts.
• Corporate Governance
We do business pursuant to the highest corporate governance standards, promoting transparence, ethical behavior, respect of
the principle of legality and sustainability of our activities and those of our value chain.
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• Respect of the Principle of Legality
We regularly review the degree of compliance with applicable laws and regulations and we take the actions required to correct
deviations.
Business Segments
We conduct our operations through the following business segments:
• Personal & Business Banking;
• Corporate Banking;
• Bank Treasury;
•
Insurance; and
• Asset Management and Other Services.
Until 2022, the Company had a Consumer Finance segment which included businesses of IUDÚ, Tarjeta, Cordial Servicios
and MILA. On December 1, 2023, the Central Bank approved the merger of IUDÚ into the Bank, and therefore IUDÚ merged
into the Bank, effective January 2023. This merger, along with the merger of Tarjeta into the Bank, allowed us to simplify the
Group’s corporate structure and complete the Group’s corporate integration plans which began in September 2022. In turn,
Cordial Servicios is included in the Asset Management and Other Services segment, while Mila is included in the Personal &
Business Banking segment.
The following table sets forth the breakdown of our net revenue and net income by segment for the periods indicated.
Segment
Personal & Business Banking
Corporate Banking
Bank Treasury
Insurance
Asset Management and Other Services
Total Allocated to Segments
Adjustments(1)
Total Consolidated
As of December 31, 2023
Net Revenue Percentage
Attributable Net (Loss) /
Income
(in million of Pesos)
168,192.3
57,211.2
206,706.6
24,420.3
38,662.4
495,192.8
10,528.9
34.0 %
11.6 %
41.7 %
4.9 %
7.8 %
100.0 %
505,721.7
100.0 %
(30,665.0)
10,304.1
60,243.7
3,602.0
10,575.6
54,060.4
(2,444.6)
51,615.8
(1) Includes the net interest income received from the investment of liquidity at the holding company, as well as transactions between
segments.
35
The following table sets forth the breakdown of our assets by segment as of December 31, 2023.
Personal
and
Business
Banking
Corporate
Banking
Bank
Treasury
Consumer
Finance Insurance
(in thousands of Pesos)
As of December 31, 2023
Asset
Management
and Other
Services
Adjustments(1)
Total
Consolidated
Assets
Cash and
due from
banks
Debt
Securities
at fair
value
through
profit or
loss
110,764,865
3,027,754
110,072,448
—
4,253
3,774,939
1,454,013
229,098,272
468,851
844,260
29,465,234
—
5,333,658
6,137,589
4,166,230
46,415,822
Loans and
other
financings 259,366,382 196,646,291
25,996,149
—
16,219
609,543
(179,500)
482,455,084
Other debt
securities
Other assets
(2)
Total
795,893
—
242,620,591
—
755,780
16
7,008,261
251,180,541
67,222,373
24,588,393
917,851,229
—
8,213,004 34,590,087 (3,606,804) 1,048,858,282
Assets
438,618,364 225,106,698 1,326,005,651
— 14,322,914 45,112,174
8,842,200 2,058,008,001
(1) Includes elimination of inter-segment loans and assets not directly allocated to a single segment, such as unlisted equity
investments, miscellaneous receivables, premises and equipment, miscellaneous assets and intangible assets.
(2) Other Assets at the Bank Treasury segment includes Ps.76.0 billion of securities issued by the Central Bank, Ps.755.7 billion
of repo transactions with the Central Bank and Ps.199.4 billion of Government Securities.
The following table sets forth the breakdown of our customers as of December 31, 2023 and 2022.
Personal & Business Banking
Corporate Banking
IOL invertironline
Total
Individuals
Entrepreneurs
SMEs
Consumer Customers (ex. IUDÚ)
Customers
As of December 31,
2023
2022
1,534,729
1,395,801
29,873
3,682
105,373
1,407
483,580
2,019,716
1,564,666
1,364,778
28,757
3,499
167,632
1,342
136,890
1,702,898
36
Personal & Business Banking Segment
Our Personal and Business Banking segment offers a wide range of financial products and services designed to meet the needs
of individuals, entrepreneurs and small businesses: personal loans, mortgage loans, unsecured loans, loans with special facilities for
project and work capital financing, leasing, bank guarantee for tenants, salary advances, car loans, domestic and international factoring,
international guarantees and letters of credit, payroll payment plans (planes sueldo), credit cards, debit cards, savings accounts, time
deposits, checking accounts, and financial services and investments such as mutual funds, insurance and guarantees, and benefit
payments for senior citizens. In 2023, we continued to offer these financial products and services to satisfy our customers’ needs.
Based on the assessment of their distinctive features, their needs and specific requirements, our customers are grouped in five
strategic groups which are further described below: (i) SMEs customers, which comprise individuals engaged in commercial activities,
and small and medium sized companies with revenues lower than Ps.3 billion per year, (ii) Identité customers, which comprise high
networth individuals belonging to serial ABC1 segments, (iii) mass affluent, which comprise individual customers who do not perform
any commercial activities and are not included in the Identité segment, (iv) senior citizens customers, which comprise senior citizens
who are paid pension benefits through accounts held in the Bank, and (v) consumer customers which were transferred from IUDÚ to
the Bank.
Personal & Business Banking Segment – Retail Customers
•
Identité and Mass Affluent Segments: In 2023, we promoted the acquisition of new customers, with 56,000 registrations in
Identité and Mass Affluent, and we grew in competitive net promoter score, which is an indicator of customer satisfaction,
for the third consecutive year in both segments.
To improve our customer service in Identité and Mass Affluent, we focused on achieving an end-to-end digital everyday
banking payment experience including payments and transfers through the Modo app, MEP dollar investments and
“Inversión rápida” (investment in money market funds through the Modo app), personal loans, credit cards, car loans,
car and property insurance, time deposits, Plan Sueldo (which is explained below), recharges and access to omnichannel
services. As a result, the percentage of digital customer over total customers reached 81% in the fourth quarter of 2023
compared to 73% in the same period of 2022. We also increased our share of wallet in deposits and cross-sell, especially
in the Identité segment.
In terms of products and services, Identité and Mass Affluent grew in the placement of personal loans through digital
channels with 220,000 placements in 2023 compared to 204,000 in 2022. “Inversión rápida” added 100,000 new investors
in 2023 compared to 4,000 new investors in 2022 and the number of transactions and the volume of securities increased 4
times in terms of orders and volume of operations in relation to government securities and for the third consecutive year
grew in mutual funds, reaching a market share of 2.46%.
•
Senior Citizens. Since 1996, the Bank has acted as one of the paying agents of social security payments to senior citizens
on behalf of the Argentine government pursuant to an agreement with ANSES. We believe the Bank remains the private
bank with the largest presence in this segment, with 886,000 customers, 605,000 of which are beneficiaries of retirement
and pension plans, which represents an approximate market share of 8.9%. In 2022, we developed new channels to attract
senior citizens and launched “Previsional,” a referral program for this segment, in order to maintain the Bank’s leadership
in the senior citizens segment.
In order to evolve our service model, we provided more simple branch structures, as a result of which 95% of our senior
citizens customers withdraw their pensions through our ATMs and cash dispensers. In this regard, the volume of customers
who made transactions using digital channels increased from 41% in 2022 to 50% in 2023, mainly driven by improved
functionalities in the online and mobile pltaforms.
In 2023, 40% of senior citizens obtained loans through self-service channels (as compared to 33% in 2022), more than
19,000 customers invested in mutual funds with “Inversión rápida” as compared to 2,000 in 2022, and 63,000 customers
paid their services through our apps, thereby exceeding by 20,000 customers the number of customer in 2022. Additionally,
we continued to work on strengthening the financial education of our senior citizens segment through virtual training
programs and face-to-face meetings at designated centers, among other initiatives.
37
• Former IUDÚ Customers. During the fourth quarter of 2022, we completed the transfer of IUDÚ’s customers, loan
portfolio and back-office to the Bank and discontinued the IUDÚ app. At the end of 2023 we were serving more than
100,000 former IUDÚ customers with a value proposition according to the segment.
Personal & Business Banking Segment – Entrepreneurs and SMEs
•
SMEs customers. During 2023, we acquired more than 4,700 new customers, including customers with commercial activity
and small and medium-sized companies, reaching a 5.45% market share. 33% of these new acquisitions were managed
digitally and in 2023 we continued improving onboarding and the end-to-end experience of this channel. Thus, we reduced
the onboarding time to an average of 8 days in December 2023, as compared to 14 days in December 2022. In addition,
during 2023 we launched a new process for the onboarding of corporate customers, which facilitates 100% digital
registration of current accounts and access to short-term unsecured loans, and we completed the offer of working capital
products in digital channels. In addition, we added Unsecured Loans and Overdrafts products, both built entirely in he
cloud and available in online Banking Businesses for E&P and SMEs customers.
For digital acquisition, we leveraged exclusive value propositions and credit lines, in synergy with subsegments in
partnership with B2B companies.
• With respect to the commercial management model, we continued to focus on increasing the cross-sell rate, thus obtaining
a comprehensive view of each customer through our Plan Sueldo, foreign trade, cash management and leasing products.
We also continued to promote our franchise, education, transportation, health and professionals strategic subsegments.
38
Products and services offered:
• Loans. The bank offers personal, car loans, mortgage loans, overdrafts, salary advances and guarantees for tenants. In 2023
we continued to develop a consumption financing product both for Online Banking and Mobile. We increased the digital
placement of personal loans, driven by the growth of transactions in the Mobile channel, reaching 62% of the aggregate
loans placed in December 2023, and exceeding the 34% recorded in December 2022, due to the migration of products to
more efficient channels.
• Deposits. In 2020, the Argentine Central Bank established minimum interest rates for time deposits made by individuals
and companies which were lifted in March 2024. As of December 31, 2023, we grew in the share of wallet of peso-
denominated deposits of our customers measured as the aggregate of deposits in savings accounts, checking accounts,
mutual funds and time deposits. In December 2023, our share of peso-denominated deposits of individual customers
reached 1.41% compared to 1.20% in December 2022. As of December 31, 2023, total deposits from the Personal and
Banking segment amounted to Ps.580.1 billion and retail customers deposits denominated in Pesos represented 37% of
total deposits denominated in Pesos.
•
•
Investment Products: During 2023, we continued to develop the Personal Finance Manager to unify the investment
perspective and deploy new experiences and products. In 2022, we created a new experience called “Inversión rápida” for
the short-term T0 Premier Fund, becoming the first bank to offer 24-hour operations during business days, a competitive
value proposition compared to other fintech competitors. In addition, for the third year in a row our market share grew,
reaching 2.63%, and we multiplied the number of mutual funds customers and the volumes invested several times in
relation to the average of recent years. In 2022, we had launched MEP Dollar together with IOL invertironline, which
allows our customers to purchase bonds in Pesos and sell those bonds in U.S. dollars. In 2023, MEP Dollar positioned us
at the forefront for making this operation available on Mobile and increased eighteen times the operation of negotiable
securities in terms of customers, orders and volume and nine times the number of customers as compared to 2022. In 2023,
we launched a new app which enables customers to cash electronic and physical checks which allowed us to reach 93% of
digital transactions over total transactions, compared to 77% in 2022.
Insurance. In 2023, we reached pre-pandemic productivity levels in the insurance segment. Our digital sales increased
from 10% in January 2023 to 26% in December 2023, including products offered through digital and face-to-face channels.
Additionally, we doubled our car insurance portfolio as compared to 2022, achieving 500 policies per month in the last
quarter of 2023, 51% of which were managed digitally. Likewise, during this period we improved the value proposition
through the launch of new digital sales products, such as “Celular Protegido,” which is a mobile device insurance service,
and implemented personalized assistance through a chat for digital products, and we moved forward with the integration
with our partner 123 Seguro, including the companies Sura, Experta and San Cristóbal.
39
Corporate Banking Segment
In order to respond to the daily operational and transactional needs of companies, we worked with teams speacialized in leasing,
cash management, COMEX, Plan Sueldo, insurance and investments, leveraged on a branch structure that enables coverage in the most
densely populated industrial and commercial areas.
In 2022, we decided to implement a selective development focused on value propositions for different areas, such as specialized
solutions for wine production and its value chain, with loans for harvest and haulage and leasing for barrels.
In order to preserve a healthy loan portfolio and maintain non-performing loans at adequate levels, we continued to monitor
financial risk indicators, such as the Risk-Adjusted Return (“RAROC”). In this regard, we followed a moderate policy of credit appetite,
and we sought efficiency in the placement of capital, generating profitability by becoming our customers’ bank of choice.
Products offered to Corporate Customers:
• Deposits: In 2023, our market share of private-sector current account deposits continued to grow for the third consecutive
year, reaching an annual average of 2.01%, 16% higher than the 1.85% market share recorded in 2022. Likewise, in the
fourth quarter of 2023 our market share reached 2.38%, as compared to 1.95% in the same period of 2022.
• Loans: In 2023, we promoted special loan facilities in line with the segment’s needs which, together with a product
reengineering to streamline onboarding, allowed us to improve commercial document discounting, overdrafts and
unsecured loans. In 2023, demand for credit remained very low as a result of high inflation and the complex
macroeconomic environment in Argentina. However, we recovered our market share in commercial credit in the second
half of 2023 and closed the year at 3.91%.
• Plan Sueldo. We continued with the process of transformation in product operations, aiming at achieving high efficiency
standards in onboarding, cross-sell and customer profitability. During 2022, we improved our process automation through
our Online Banking for commercial customers. In order to continue encouraging onboarding, at the time of registration an
automatic email is sent both to the company and to the employee, informing them of the possibility of managing our
products from any device. As a result, the corporate customers paying salaries enjoy a better experience when opening
salary accounts, uploading payrolls and making payments. According to the most recent data from the Ministry of Labor,
in October 2023 our market share of Plan Sueldo for private sector employees reached 2.57%, as compared to 2.63% in
December 2022 and 2.48% in December 2021.
• Foreign Trade: As of December 31, 2023, our market share level of both exports and imports of goods, measured in
number of transactions was 4.84% compared to 3.5% in 2022. Regarding innovations to improve customer management,
we entered into a partnership with latindyl, a Latin American B2B marketplace that connects Argentine SMEs with
importers worldwide. This partnership ratifies our commitment to facilitate the internationalization of the segment and
develop new markets.
• Cash Management: Our collection and payment services are aimed at cross-sell of funding products and offer differentiated
value propositions according to customers’ expectations and needs. The volumes of transactional funds in our collection
and payment products grew above inflation, which shows a greater use by our customers of these products. Along these
lines, the number of bulk transfer batches entering Online Business Banking doubled, which shows the fast adoption of
the products, due to the migration of collection and payment services to the cloud. In addition, we created the Unusual
Transfers circuit, reducing the number of fraud cases from 20 to 7 in the first month of implementation. We also continued
to provide greater security to our customers with a two-step verification of passwords and e-sign validation.
• Leasing: With a focus on financing capital goods for SMEs, the Financial and Operational Leasing and Sale & Lease Back
products are marketed through our commercial officers and our branch network with specialized service and advice in
order to promote the use of this capital assets financing tool. This model allowed us to maintain our market positioning,
reaching an 11.7% market share as of December 31, 2023.
40
Bank Treasury Segment
The Bank Treasury segment is primarily responsible for the allocation of the Bank’s liquidity according to the needs of the
Personal and Business Banking segment, the Corporate banking segment and its own needs. The Bank Treasury segment implements
the Bank’s financial risk management policies, manages the Bank’s trading desks, distributes treasury products such as debt securities,
and develops businesses with wholesale financial and non-financial clients. Below is a description of the services offered under this
segment:
Trading Desk and Institutional Sales
The Bank’s trading desks trade financial assets on a proprietary and third-party basis, sell financial products, and implement
the Asset and Liability Management Committee (“ALCO”) decisions, within the board’s policies, regarding the Bank’s liquidity and
financial risk management policies. The Bank’s trading operations include money market instruments, which include institutional
investor deposits, public debt instruments, Central Bank debt notes, foreign exchange, stocks, futures, swaps and repos. Trades develop
within the limits of a comprehensive risk map which sets limits on counterparty risk and on long and short positions for each asset class,
depending on volatility, traders’ seniority level, and other factors. The risk map also determines stop-loss policies. Banco Supervielle
S.A. managed to grow in volume in all products operated, including foreign currency, public and private securities, stocks and
derivatives. The Bank managed to position itself as one of the benchmarks of the market among institutional investors in all types of
operations.
Correspondent Banking
During 2023, commercial relations were maintained with foreign banks related to the management of correspondent accounts,
the financing of foreign trade transactions and the operation of guarantees and letters of credit.
Capital Markets
The Bank’s Capital Markets department objective is to originate and structure financing products to be placed in the Argentine
capital markets and provide financial advice services which allow the customers of the Bank, Grupo Supervielle and its subsidiaries to
optimize their financial resources and capital structure in order to maximize the profitability of their operations.
The sector is mainly focused on the structuring of financial trusts and syndicated credit facilities, in the organization and
placement of negotiable obligations and in equity capital markets transactions and mergers and acquisitions, with a view to providing a
comprehensive advice on each product, generating long term relationships with customers and investors.
During 2023, we participated in 97 capital markets transactions for a total amount of approximately Ps.413 billion, 77 of which
were negotiable obligations, 12 of which were financial trusts and 8 of which were provincial bonds. As a result, the Bank consolidated
itself as one of the most active banks in the Argentine securities market. In 2023, we ranked fourth in terms of number of security
issuances in which we participated and second in terms of active issuers.
During 2023, we maintained our focus on, and commitment to, the SME segment, while continuing to support large companies
and frequent issuers. As of December 31, 2023, 54% of the Capital Market issuances were made by SMEs and a total of 86 Negotiable
Obligations of small and medium-sized companies were guaranteed by Banco Supervielle S.A. for a total amount of Ps. 2,705 million
and U.S.$50 million. We also gradually entered the Sub-Sovereign financing segment through the placement of Provincial Bonds.
The Bank continued to promote the issuance of green, social and sustainable (“SVS”) bonds. During 2023, we participated in
4 of the 16 issuances made in Argentina, which included the issuance of 2 social bonds, 1 green bond and 1 sustainable bond, for an
aggregate amount of Ps. 43,378 million.
41
Consumer Finance Segment
During 2022, we executed our key strategic pillars of our strategy designed to improve ROE while operating in an increasingly
adverse macroeconomic environment, with inflation at the highest level in decades and loan demand at all-time lows. In this context,
we implemented a major restructuring of IUDÚ with the goal of running a more efficient operation and transferred IUDÚ’s customers,
loan portfolio and back-office to the Bank through the merger of IUDÚ into the Bank. This transfer allowed us to take advantage of
IUDÚ’s operational efficiencies while we continue to offer the Bank’s broad assortment of financial products and services to our
customers. At the same time, we reduced our loan origination and focused on improving asset quality in this middle to low income
customer segment.
On December 14, 2022, the Bank, as the absorbing entity, and Tarjeta and IUDÚ, as the absorbed entities, entered into merger
agreements, pursuant to which Tarjeta and IUDÚ merged into the Bank effective January 2023.
On March 1, 2023 the Bank and Dorinka agreed to terminate the financial service agreement that IUDÚ (the Bank’s consumer
finance business) had entered into with Dorinka on August 24, 2021, pursuant to which IUDÚ offered its financial products and services
through Dorinka’s points of sale. The Bank’s decision to terminate this agreement was in line with the initiatives that we implemented
during 2022 to protect profitability and asset quality in a segment that has been greatly affected by increased inflation and a challenging
macroeconomic environment.
On December 1, 2023, the Central Bank approved the merger of IUDÚ into the Bank. These mergers allowed us to simplify the
Group’s corporate structure and complete the Group’s corporate integration plans which began in September 2022.
Insurance Segment
Our insurance business is operated by our subsidiaries Supervielle Seguros and Supervielle Productores Asesores de Seguros.
Supervielle Seguros offers insurance products, including life, home, protected technology, personal accidents, protected bags, ATMs,
protected content, integral insurance product for entrepreneurs and SME customers and other insurance policies. These products may
be accessed through any of our marketing channels, both in-person and digital, which includes the distribution network of the Bank.
Since 2020, we have been carrying out a digital transformation process focused on building capabilities in our IT area and in
the areas dedicated to customer experience, which in 2022 included the sale of car insurance through our Online Banking, the
implementation of SAP systems, the design and implementation of digital sales strategies, the development of projects based on customer
insights, generation of support content for our commercial team and for social media and a new identity for the company. Likewise, our
IT department continued developing the APIs strategy, managing to implement functionalities required to boost the business in digital
channels.
In 2023, we doubled our sales in Online Banking and Mobile as compared to 2022 and started to scale the sale of insurance
policies through Banco Supervielle S.A.’s Virtual Hub, with a total of 3,028 policies sold, as compared to 476 in 2022. In the face-to-
face channels we achieved a 58% increase in productivity, surpassing pre-pandemic levels. Thus, we closed the year with a 20% increase
in the placement of insurance policies and a 37% increase in cross-selling to our customers, as compared to 2022. In addition, we
increased by 8 points our customer satisfaction measured by NPS.
During 2023, Supervielle Seguros consolidated its offers in the following products:
Protected Bag Insurance. Protected bag insurance is insurance for personal property contained in a bag, backpack, wallet,
fanny pack or other bag that is either lost or stolen. Protected bag insurance can cover items such as cellular phones, makeup, planners,
lost documents, keys and locks. In addition, protected bag insurance may cover a certain amount of charges from fraudulent credit card
use as a result of a lost or stolen bag.
Personal Accident Insurance. Personal accident insurance covers policy holders in the event that they suffer an accident, subject
to certain exclusions.
Broken Bones. The broken bones insurance covers death as result of an accident up to the amount of the insured capital. A
certain amount will be paid in the event of quadriplegia or paraplegia, according to the respective insurance plan and once such condition
42
has been verified by a medical audit. This insurance also covers the simple breakage of bones produced as an immediate consequence
of an accident.
Life Insurance. Supervielle Seguros markets its life insurance products to the Bank’s senior citizen customers and sells its
products through its own sales force that works within the Bank’s branch network. The basic life insurance product includes coverage
for death, and customers can add varying degrees of coverage for accidents, serious and terminal illnesses and transplants.
Home Insurance. Home insurance coverage includes fire insurance (building and content), theft of content, theft and damage
of appliances, glass breakage, civil liability, personal accident coverage for domestic staff and home assistance service in cases of
emergencies.
Technology Insurance. Technology insurance covers theft or accidental damage as a result of theft of electronic equipment
(includes notebooks, cell phones, tablets, smartphones, cameras and GPSs). In case of theft or accidental damage as a result of theft, the
cost of the stolen property or the cost of repair will be compensated up to the maximum insured amount (once the repair invoice is
provided).
ATM Insurance. ATM insurance covers robbery at ATMs, death at the time of the assault and reimbursement of the costs of
stolen documentation.
Protected Content. Protected content insurance covers theft and accidental damage of the personal effects that are inside a
vehicle.
Integral insurance product for entrepreneurs and SME customers: Integral insurance product for entrepreneurs and SMEs
customers completes the offer of services for our priority segment entrepreneurs and SMEs, with the particularity that is fully processed
by Supervielle Seguros.
Other Insurance: pets insurance to cover accidents and illnesses, and bicycle insurante to cover theft of bycicles.
The following table sets forth the breakdown of Supervielle Seguros’s gross written premiums per quarter as of December 31,
2023.
Gross written premiums by product
(in millions of Pesos)
Life insurance and total permanent disability insurance for debit balances
Mortgage Insurance
Personal Accident Insurance
Protected Bag Insurance
Broken Bones
Others
Home Insurance
Technology Insurance
ATM Insurance
Life Insurance
Total
Asset Management and Other Services segment
4th quarter 3rd quarter 2nd quarter 1st quarter
2023
0.6
216.5
144.6
476.7
77.9
106.5
859.4
371.9
193.7
2,083.5
4,531.3
2023
2.3
243.7
145.9
438.4
77.9
115.6
731.5
325.1
183.2
2,222.4
4,486.0
2023
2023
2.7
246.7
133.1
502.1
85.1
72.3
680.9
336.6
159.7
1,946.5
4,165.7
2.8
268.6
172.4
526.9
108.4
98.5
829.0
474.5
161.9
2,509.6
5,152.6
Grupo Supervielle offers a variety of investment services to its customers, including mutual fund products through Supervielle
Asset Management. Since May 2018, Supervielle also offers brokerage and investment products and services through IOL invertironline.
43
SAM
Mutual Funds. SAM offers mutual funds services designed to meet customers’ particular investment objectives and risk profiles
through its “Premier” funds family. As of December 31, 2023, assets under management reached Ps.512.5 billion increasing 329.7% in
nominal terms from December 31, 2022.
The Premier funds family comprises a money market fund (Premier Renta Corto Plazo en Pesos), two short term fixed income
funds in Pesos (Premier Renta Plus and Premier Renta Fija Ahorro), six fixed income and mixed income funds in Pesos (Premier Renta
Fija Crecimiento, Premier Capital, Premier Commodities, Premier Inversión, Premier Balancead, Premier Estratégico and Premier
Renta Mixta), two fixed income funds in U.S. dollars (Premier Renta Mixta en Dólares and Premier Performance), a variable income
fund (Premier Renta Variable), two specific investment funds in assets issued by SMEs and ESG (Premier FCI Abierto Pymes and
Premier Sustentable ASG, launched in 2023), a fixed income LatAm fund (Premier Global Dólares) and a close fund (Adblick
Ganadería). These Premier funds family are offered to the public online.
During 2023, the volume of assets under management of our large corporate customers decreased in real terms. However,
SMEs and institutional customers increased their investments in real terms. Regarding our product portfolio, at the end of 2022 we
launched “Inversión rápida,” a simple way to invest and redeem the funds invested in the FCI Premier Money market fund as it allowed
to credit these funds at any time during business days. We were the first bank to provide this service, which we expanded to non-business
days in 2023.
IOL invertironline
IOL invertironline is a digital online broker that offers brokerage and savings and investment services based on an agile, simple,
transparent and innovative platform, suitable for the profile of each client, with the objective of helping our clients increase their savings.
In 2023, we continued to adapt our specialized trading platform to improve user experience. Among the improvements
implemented, we began to use artificial intelligence in customer service (improving response times and quality) and worked on call
prioritization. We also continued to improve our IOL Mobile App which, at the end of 2023, reached almost 720,000 downloads both
from Play Store and App Store, as compared to the 77,000 downloads recorded at the end of 2022. We added products that facilitate
management, such as the one-click sale of MEP Dollars, bonds in pesos and the purchase of shares, bonds, CEDEARs and negotiable
obligations. At the end of 2023, assets managed exceeded Ps. 653 billion and, according to the information provided by BYMA, in
December 2023 we ranked third in terms of equity with a 4.64% share and fifth in terms of CEDEARs with a 6.45% market share. In
2023, we carried out more than 14 million transactions, we opened 916,000 accounts (with a monthly record of more than 93,000
accounts in October) and at the end of 2023 we had 483,580 active customers, more than 916,000 thousand accounts and a customer
activity rate of 52.8%.
In 2023, we strengthened IOL Academy’s financial education proposal, increasing the offer of courses in line with our mission
of democratizing access to financial education. In addition, we relaunched the Financial Education for Young People course together
with the Sustainability team of Grupo Supervielle, which was delivered to more than 3,500 students free of charge and reviewed the
basic contents on personal finance and the capital market in Argentina. The purpose of this training is to provide future generations with
the necessary tools so that they can make informed financial decisions from the very beginning. Likewise, we continued to improve the
quality of existing courses and programs, focusing on the script and guidance of students in discussion forums and community spaces.
Market Area
We maintain a strong geographic presence in the City of Buenos Aires and the Greater Buenos Aires metropolitan area, which
is Argentina’s most commercially significant and highly populated area, and we are leaders in terms of our banking network in some of
Argentina’s most dynamic regions, including Mendoza. Moreover we are present across Argentina through our virtual and digital
channels.
We are accelerating our transformation initiatives across channels to develop our omnichannel model. This includes developing
a modern technological architecture, evolving our bank branch model and adding API capabilities to connect with third parties and
prepare our business for open banking.
44
As of the date of this annual report, we have 136 physical branches, 256 ATMs, 182 self-service terminals and 318 cash
dispensers with biometric identification systems.
Argentina. Argentina is comprised by 23 provinces and the City of Buenos Aires. As of December 31, 2023, it had a population
of approximately 46.7 million and a GDP per capita of approximately U.S.$15,500 As of December 31, 2023, the unemployment rate
in Argentina was 5.7%. In terms of the banking sector, as of December 31, 2023 there were 63 banks and 4,414 bank branches across
Argentina. During 2023, 92% of the households in Argentina had Internet access, which creates a favorable environment for the
development of digital banking services.
City of Buenos Aires. The City of Buenos Aires is the capital of Argentina and the center of commerce and seat of the Argentine
government. As of December 31, 2023, the City of Buenos Aires had a population of 3.1 million (approximately 7% of Argentina’s
overall population) and was the richest city of Argentina. As of December 31, 2023, the unemployment rate in the City of Buenos Aires
was 3.2%. In terms of the banking sector, there are 738 bank branches (out of a total of 4,414 bank branches in Argentina) in the City
of Buenos Aires.
Province of Buenos Aires. The Province of Buenos Aires, which includes the Greater Buenos Aires metropolitan area, is an
agricultural center focused primarily on the production of soy, wheat, corn and other agricultural products. The Province of Buenos
Aires had a population of approximately 18.0 million (approximately 39% of Argentina’s overall population) as of December 31, 2023
and concentrates a high portion of the agricultural activity. As of December 31, 2023, the unemployment rate in the Province of Buenos
Aires was 7.4%. During the last decade, agricultural production has been strong as a result of high commodity prices which has
contributed to Argentina’s economic growth. It is expected that agriculture production will continue to be a key driver of economic
growth in Argentina in the coming years. In terms of the banking sector, there are 1,420 bank branches (out of a total of 4,414 bank
branches in Argentina) in the Province of Buenos Aires.
Mendoza. The Province of Mendoza is located in the Cuyo region and is the center of the wine industry in Argentina. Mendoza
has a population of approximately 2.0 million (approximately 4.4% of Argentina’s overall population) as of December 31, 2023. As of
December 31, 2023, the unemployment rate in Mendoza was 4.3%. In terms of the banking sector, there are 167 bank branches (out of
a total of 4,414 bank branches in Argentina) in Mendoza.
San Luis. The Province of San Luis is located in the Cuyo region. San Luis had a population of approximately 527,000
(approximately 1.1% of Argentina’s overall population) as of December 31, 2023. The primary industries in the Province of San Luis
are agricultural production and tourism. As of December 31, 2023, the unemployment rate in the Province of San Luis was 1.8%. In
terms of the banking sector, there are 43 bank branches (out of a total of 4,414 bank branches in Argentina) in the Province of San Luis.
Bank Distribution Network
Bank branches
In 2023, we advanced the transformation of 26 branches, with a total of 52 offices transformed since the start of the
transformation process. The objectives of this transformation plan are (i) to increase our presence in the SME segment by including
services to small and medium-sized companies in service branches that were exclusively dedicated to the senior citizens segment, and
(ii) to continue to expand “Espacio 24,” where our customers can make cash withdrawals and deposits during and after banking hours.
In 2023, we increased the number of self-service machines, reaching 282 in Espacio 24 out of 318 in all branches. These
machines allow customers to obtain balance inquiries, request personal loans and withdraw cash using fingerprints. Almost 76% of our
178 self-service terminals are located in Espacio 24 in addition to 256 ATMs that form part of our network. In line with global consumer
trends where customers seek little direct interaction with the banks, in 2023 we advanced the consolidation of 20 branches to optimize
operations without neglecting our proximity to customers.
45
Virtual Hub
One of the most innovative launches of 2022 was our Virtual Branches system, which combines different digital channels,
leveraged on a robust technological infrastructure that provides a high level of security, with the service of more than 100 especially
trained executives. In 2022, we expanded our Virtual Branches footprint, reaching areas where we do not have physical presence. In
2023, we extended our service hours, which currently run from Monday to Friday, from 8:00 a.m. to 9:00 p.m. (Buenos Aires time), and
installed the role of Concurrent Executive (“Ejecutivo Concurrente”) in 98 branches to enable us to assist clients in person and virtually.
Our Virtual Branches system offers the following services:
• Video call: We provide 100% virtual customer service through a representative who answers queries, solves claims or receives loan
applications. The option is available both in cash dispensers and in Online Individuals and Business Banking and in our apps for
Individuals and Senior Citizens.
• Human Chat: We answer the most frequent questions from our customers through a Chat Bot and refer customers to personalized
service, if required. In 2022, we developed this channel with the incorporation of a mix of Artificial Intelligence and Language
provided by an Amazon Web Services (AWS) solution.
• Online Banking and Mobile Banking: We continued to improve the experience of our online and mobile banking users for friendlier
and safer interactions.
Deposits – General Overview
The following charts set forth the breakdown of our deposits by type of account and customer category as of December 31,
2023.
Our main source of funds is the Bank’s deposit base.
As of December 31, 2023, non- or low-cost demand total deposits (including private and public-sector deposits) represented
27% of Grupo Supervielle’s total deposits, 16.3% of which corresponded to savings accounts and 10.8% to checking accounts. As of
December 31, 2022, non- or low-cost demand total deposits (including private and public-sector deposits) represented 29.1% of Grupo
Supervielle’s total deposits, 16.9% of which corresponded to savings accounts and 12.2% to checking accounts. The current highly
inflationary environment is driving customers to increasingly invest their transactional funds in the Company’s money market funds to
protect the value of their income, which is reflected in the growing number of customers using “Inversion Rápida.”
46
The following tables compare the composition of the Bank’s (on a consolidated basis) total funding with those of all Argentine
private banks’ in each case as of December 31, 2023:
Liabilities and Shareholders equity
Deposits
Other Liabilities & Shareholders equity
Total
Deposits Breakdown
Checking accounts
Saving Accounts(1)
Time deposits
Other deposits
Total
(1) Includes special checking accounts
Loan Portfolio – General Overview
Year ended December 31, 2023
Banco Supervielle
(in millions
of Pesos)
%
Private Banks
(in millions
of Pesos)
%
1,548,928.1 75.3 % 36,170,310.9 81.3 %
509,079.9 24.7 % 8,325,930.8 18.7 %
2,058,008.0
44,496,241.7
Year ended December 31, 2023
%
Private Banks
Banco Supervielle
(in millions
(in millions
of Pesos)
of Pesos)
138,589.5
8.9 % 8,115,401.5 22.4 %
253,080.8 16.3 % 16,517,558.9 45.7 %
177,192.3 11.4 % 7,364,463.9 20.4 %
980,065.5 63.3 % 4,172,886.6 11.5 %
%
1,548,928.1
36,170,310.9
Each loan category in our loan portfolio faces different risks. We have established underwriting policies, standards and pricing
mechanisms designed to mitigate the risks posed by each loan category. As of December 31, 2023, we had a loan portfolio of
Ps.498.1 billion (equivalent to U.S.$616 million converted to U.S. dollars at the reference exchange rate as of December 31, 2023). As
of December 31, 2023, we had a loan portfolio and off balance sheet guarantees of Ps.609.6 billion (equivalent to U.S.$754 million
converted to U.S. dollars at the reference exchange rate as of December 31, 2023).
The following charts set forth the breakdown of our loan portfolio by segment, and of the specific customer categories in our
corporate banking and retail segments as of December 31, 2023.
47
(1)
For information since January 1, 2023, the term “small businesses” refers to individuals and businesses with annual
sales up to Ps.500 million, the term “SMEs” refers to individuals and businesses with annual sales over Ps. 500 million
and below Ps.5 billion, the term “middle-market and large companies” refers to companies with annual sales over Ps.5
billion.
Underwriting Policies
Our policies require that most loans only be approved for borrowers that are able to provide proof of a source of repayment and
demonstrate an ability to service existing and future debt. Our underwriting procedures for all loan types require consideration of the
borrower, including with respect to the borrower’s financial condition, cash flow, the management skills and industry of our corporate
customers, and the economic environment surrounding the issuance of any given loan.
We generally expect customers to repay loans with unencumbered cash available to them. A significant part of our loan
portfolio is secured, and we assess the quality and liquidity of collateral before we grant any secured loan.
Interest Rate Terms
We price loans: (i) on both a fixed rate and floating rate basis; (ii) over different terms; and (iii) based upon different rate
indices. Our pricing structures are consistent with our interest rate risk management policies and procedures. For more information on
these policies and procedures. See “—Loan portfolio - Credit Risk Management.”
Loans to individuals (personal loans, credit card loans, car loans and mortgages) are priced only on a fixed rate basis. UVA
Mortgage loans and some UVA car loans principal is adjusted for inflation. Loans to small businesses and SMEs are priced on both a
fixed rate and floating rate basis as follows:
• Fixed rate: promissory notes (checking and invoice discounts, work certificates for government projects and warrants),
overdrafts, foreign trade loans, automobile, personal loans and mortgages with adjustable principal, based on inflation.
• Floating rate: automobile and other secured loans, receivables from financial leases.
• Both rates: corporate unsecured loans.
Risks
Below we list our loan categories from lowest risk to highest risk in terms of repayment ability and historical default rates:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
Promissory notes (with recourse to the assignor), Warrants - Commodities
Foreign trade loans
Mortgage loans
Receivables from financial leases
Promissory notes (without recourse to the assignor), Warrants – Others
Automobile and other secured loans
Corporate credit cards
Corporate unsecured loans
Overdrafts
(10)
Personal loans and credit card loans (from the Personal and Business Banking segment)
48
Promissory Notes (factoring and check discounting and warrants)
Factoring and check discounting. Check discounting is used to finance working capital needs for businesses that have a
diversified accounts receivable portfolio and customers or parties that issue checks and have a favorable credit history. Most of our
check discounting transactions are with recourse to the assignor (i.e., we secure repayment with a pledge over an assignment of the
borrower’s cash flow). However, some of our check discounting transactions are without recourse to the assignor, in which case we only
have recourse to the endorser of the check. With respect to our operations with recourse, we evaluate the creditworthiness of both the
assignor and the endorser of the check, specifically assessing each party’s payment history, credit history and legal history by requiring
a variety of documents to help us in our underwriting process. We accept checks that are issued in the ordinary course of business from
the customer with a payment date generally no longer than 180 days.
Warrants. Warrants are granted to finance working capital needs for producers or sellers of commodities or non-commodities
such as sugar, soy, wheat, corn, sunflower, peanuts, cotton and yerba mate. We take collateral in respect of the warrants for at least 20%
to 50% in excess of the value of the products and its liquidity in the event of an execution, depending on the type of product. The most
significant risk we face when extending warrant financing relates to the quality and preservation of the underlying assets. To mitigate
this risk, we select third-party companies to assess and monitor the value and quality of the underlying products. These third-party
companies have been approved by our credit committee.
Foreign Trade Loans
Foreign trade loans are granted to finance exports and imports through pre-financing and financing loans for exports,
international factoring and letters of credit for imports.
In the case of pre-financing and financing loans for exports, we analyze the repayment ability of both the borrower and its
foreign client. Specifically, we ensure that the credit line that we grant is tailored to the borrower’s historical export levels and projected
export levels (based on contracts, purchase orders and other documentation). We generally grant pre-financing and financing loans for
exports with terms ranging from 90 to 180 days, depending on the transaction and such loans are solely denominated in U.S. dollars.
Interest rates for pre-financing and financing loans for exports depend on the term of the loan and market conditions.
In the case of letters of credit for imports, generally, letters do not exceed one year and our customers pay certain fees related
to these letters instead of interest. We face at least two different type of risks in connection with these letters of credit. First, the risk
related to the obligation of payment in the event that the borrower defaults. Second, the risk that the borrower is not allowed to operate
at the Mercado Único y Libre de Cambios. To mitigate these risks, we ensure that the bank service is granted once the merchandise to
be imported can be shipped (this is once the operation is active) and before the issuance of the letter of credit and the related disbursement
of the loan, we request importers to submit all the authorizations granted by the state authorities on such import purchase to ensure at
due date such letter of credit is payable.
Mortgage Loans
The Bank set a fixed interest rate on these loans, but the remaining capital is adjusted on a monthly basis according to the
UVA monthly evolution. Therefore, the loan has index-linked capital payments (the value of the capital and the installment is updated
by inflation). These loans were originated during the period between 2016 and 2018, when UVA mortgage loans were granted by
Argentine banks, and some of these loans remain outstanding as of the date of this annual report.
Receivables from Financial Leases
Our financial leases are granted for financing acquisitions of capital assets, industrial equipment, road equipment and
automobiles. The terms of these loans are typically between 18 and 60 months, varying based on the type of product or equipment and
the useful life of such product or equipment.
The primary source of repayment for this product is cash flows from the borrower, and, therefore, we evaluate the borrower’s
repayment ability before granting such loans. We also evaluate the type of asset for which the financial lease is granted in the event the
borrower is unable to repay the loan. If the borrower is unable to repay the loan, we may sell the asset to recover all or part of the
outstanding amount of the loan.
49
The primary risk associated with our financial leases is that the borrower may default on the loan and the collateral may be
insufficient to recover the outstanding amount of the loan. We mitigate this risk by: (i) granting financial leases in respect of new assets
that have historically shown adequate resale values, (ii) requiring a down payment of 10% to 30% (depending on the repayment ability
of the customer); and (iii) for certain types of assets, requiring a commitment from the supplier of the asset to buy or find a buyer for
the asset in the event of the borrower’s default. We set floating or fix interest rates for our financial leases based on prevailing market
rates.
Automobile and Other Secured Loans
We grant secured loans to finance automobile purchases. The maximum amount of our automobile loans is Ps.23,400,000 with
a maximum term of 60 months. Before granting this automobile and other secured loans, we evaluate a customer’s ability to
meet monthly payment obligations by taking into account the prospective borrower’s earnings, minimum credit rating and financial and
legal background. We also require that the vehicle serve as collateral in the event of a payment default by the borrower. We set interest
rates based on the term of the automobile loan and a loan-to-value ratio ranging from 40% to 75% of the value of the vehicle at the time
of sale.
Corporate Unsecured Loans
Corporate Financial Loans. Our corporate financial loans finance short term working capital needs of up to one year or
medium-term working capital needs of up to three years for businesses that require monthly or periodic amortization. These loans are
granted to customers with annual revenues in excess of Ps.10 billion. We evaluate the customer’s repayment ability using the general
criteria and analysis for corporate customers. We also analyze the following factors: the shareholders and management of the borrower,
the financial and economic environment, regulatory risk and projected cash flow for the entire period during which the loan will be
outstanding to ensure that the borrower will be able to comply with the scheduled payments under the loan. We take into account the
potential effects that economic variables such as exchange rate volatility and inflation could have on projected cash flow. We set either
a floating or fixed interest rate for our corporate financial loans based on the creditworthiness of the borrower’s business and the term
of the loan.
Loans to Small Businesses. Our loans to small businesses are originated at the Bank’s branches based on a policy that requires
adequate credit and legal history, a minimum credit score and a certain level of revenues. Our loans to small businesses finance the
working capital needs of businesses with annual revenues of up to Ps.1.5 billion. The Bank’s branches may grant up to Ps.63 million of
unsecured loans and Ps.230 million of factoring transactions and financial leases, and any excess amount must be evaluated by the
Bank’s specialized credit analysis unit. We set either a floating or fixed interest rate for our loans to small businesses based on the
creditworthiness of the borrower’s business and the term of the loan. The interest rates for our loans to small business are generally
higher than the interest rates for our corporate financial loans reflecting the difference in size and revenues of the businesses.
Overdrafts
We grant overdrafts to businesses to finance working capital needs and ordinary course business activity. We assess whether
the borrower has the ability to meet its payment obligations over a maximum 180-day period, placing an emphasis on the borrower’s
line of business. Businesses with operations that do not produce short-term revenues or with cyclical operations generally must seek
other types of financing. We are able to anticipate a customer’s ability to repay overdrafts by analyzing daily accounts payable, accounts
receivable, credits and fluctuations. We set interest rates for our overdrafts on a monthly basis.
Personal Loans and Credit Card Loans (within the Personal and Business Banking segment)
Our Personal and Business Banking segment originates loans based on scoring systems and policies specifically tailored to our
Plan Sueldo services, pension and retiree services and general clientele. For a detailed discussion of the Bank’s credit application
process, credit monitoring and review process and the risks associated with personal loans and credit card loans. See “—Credit Policy—
Banco Supervielle S.A.”
Retail banking in Argentina is heavily regulated, including with respect to maximum interest rates and fees. See “Item 4.B.
Business Overview—Liquidity and Solvency Requirements—Interest Rate and Fee Regulations.” We tailor our policies related to
issuing and granting loans and credit to comply with these regulations.
50
The maximum amount of our personal loans is Ps.25 million, while the average loan as of December 31, 2023 was Ps.139,000.
The average term of our personal loans as of December 31, 2023 was 35 months, with a maximum of 72 months. The loans are granted
at a fixed rate and are paid back in monthly installments and amortized based on the French amortization system, which consists of
equal monthly installments amortized in a manner in which (i) interest payments are higher at the beginning of the loan and decrease
over the life of the loan, while (ii) principal payments are lower at the beginning of the loan and increase over the life of the loan.
Loan portfolio - Credit Risk Management
We define credit risk as the risk that arises from losses and/or a decline in the value of our assets as a result of our borrowers
or counterparties defaulting on or not complying with their obligations. Credit risk includes any event that may cause a decline in the
present value of a loan, but does not necessarily require the counterparty’s default. This risk also encompasses liquidity risk, which
exists whenever a financial transaction cannot be completed or generate liquidity in accordance with an agreement. The magnitude of
credit risk losses hinges upon two factors:
•
•
the amount of exposure at the time of the default; and
the amounts recovered by the Bank based on the payments received from the borrower and the execution of risk mitigation
policies, such as guarantees that may limit losses.
With regard to risk appetite, the credit risk management is the process that leads to the identification, measurement or
evaluation, mitigation and monitoring or follow-up of the risk, as considered in the entire credit cycle, since its origin until collection,
recovery or loss, and in case of non-compliance. Likewise, the definition of the Bank’s risk appetite is generated through the development
and monitoring of indicators, with their respective thresholds and limits for credit risk.
Our credit risk management policies also monitor concentration risk. This risk arises when the concentration of exposure has
the capacity to generate enough losses (relating to results of operations, minimum capital requirements, assets or global risk levels) to
impact the entity’s financial strength or capacity to maintain its operations and significantly change the entity’s risk profile. In 2020 we
developed and implemented a portfolio limits policy to fix maximum portfolio concentration ratios based on economic sectors and
customer credit rating. Economic sectors were classified as Very High, High, Mid and Low, according to their risk perception. These
sectors are regularly monitored to confirm or change the classification according to their evolution. Moreover, we implemented currency
limits in the different product and segments to reduce exposure to foreign currency. Since October 2022, we incorporated a module into
portfolio limits that monitors the portfolio under the socio-environmental risk policy. This module allows us to classify SMEs and
Corporates clients into high, medium and low risk based on their economic activities. While low and medium risks have no limits, high
risk cannot exceed 5% of the total loan portfolio.
Our Board of Directors approves credit risk policies and strategies presented by the Risk Management Committee, in
consultation with the Credit team, the Legal Affairs team and the Corporate Banking team, and in accordance with Central Bank
regulations. The Bank’s credit risk policies and strategies seek to develop commercial opportunities and business plans, while
maintaining a prudent level of risk. The credit policy is tailored to corporations and individuals from every segment.
The pillars of the Bank’s credit policy are based on an analysis of the client’s cash flow and its repayment capacity.
The Bank focuses on supporting companies belonging to sectors with great potential which tend to be successful in their
activity. Within the range of credit products offered for the corporate business segment, the Bank aims to develop and lead the factoring
and leasing market, as well as being leader in foreign trade.
Within the corporate banking segment, we seek to have a solid proposal for the SMEs and middle-market companies seeking
to maintain proximity with customers through customer service centers, agreements with customers throughout their value chain and
providing agile responses through existing credit processes.
With regard to individuals, in addition to the payroll customers and senior citizens, the retail banking is specially focused on
entrepreneurs and SMEs as well as the Identité customers We believe that loan portfolio diversification is a staple of the Bank’s credit
risk management objective of distributing risk appropriately by economic segment, client type and loan amount. The same importance
is given to the risk mitigation mechanisms that ensure adequate risk coverage, such as the use of credit instruments in the corporate
51
segment that cover substantial amounts of the loan. Finally, we continuously use early detection processes to monitor the performance
of the loan portfolio.
Credit Risk Measuring Models
The Bank relies on several models that estimate the distribution of possible losses arising out of the loan portfolio to calculate
expected losses and minimum capital requirements. These models include:
• Credit risk measurement models. The Bank’s models estimate distribution of possible loan portfolio losses, which depend
on counterparties’ default (probability of default (“PD”)), as well as the exposure assumed with them (EAD—Exposure at
the time of default) and the proportion of each unfulfilled loan that the entity is able to recover (Loss in the event of default
(“LGD”)). Based on these parameters, the expected loss (“PE”) and economic capital are estimated. As a result of this, a
methodological and developmental plan has been developed in order to calculate the RAROC at Banco Supervielle S.A.
in order to optimize the management linked to Credit Risk.
• Expected Losses Calculation. This is calculated based on the results of the PD, EAD and LGD models. The expected loss
calculation analyzes portfolio information to estimate the average value of loss distributions for a one year time horizon in
the case of performing loans and for a lifetime horizon in the case of underperforming or non-performing loans.
• Minimum Capital Requirement Calculation. This is represented by the difference between the portfolio’s risk value and
expected losses within a 99.9% confidence interval for individuals and 99.0% confidence interval for corporate customers.
We have two minimum capital requirement models (one for corporate customers and one for individuals), which include
the economic capital required for our concentration risk and securitization risk.
We assess on a forward-looking basis the expected credit losses associated to our financial assets measured at amortized cost,
debt instruments measured at fair value through other comprehensive income, loan commitments and financial guarantee contracts that
are not measured at fair value.
For the purposes of estimating the impairment amount, and in accordance with its internal policies, we classify its financial
instruments (financial assets, commitments and guarantees) measured at amortized cost or fair value through other comprehensive
income in one of the following categories:
• Normal Risk (“Stage 1”): includes all instruments that have not experienced a significant increase in credit risk since initial
recognition and is not purchased or originated credit impaired.
• Normal risk under watchlist (“Stage 2”): includes all instruments that, have experienced significant increases in credit risk
since initial recognition but are not yet deemed credit-impaired.
• Doubtful Risk (“Stage 3”): includes financial instruments, overdue or not, which are considered to be credit impaired.
Likewise, loan commitments or financial guarantees whose payment is probable and their recovery doubtful are considered
to be in Stage 3.
Significant increase in credit risk
We consider a financial instrument to have experienced a significant increase in credit risk when at least one of the following
conditions per segment exists:
Individuals and Businesses
1. Portfolios between 31 and 90 days past due;
2. The credit application score has deteriorated by more than 30% with respect to the current performance score;
3. Score of behavior less than accepted cut off (High Income Customers: Plan Sueldo segment (payrroll customers) >=400,
Open Market Segment >=700 and Senior Citizens Segment>=600. Other customers: Plan Sueldo Segment (payrroll
customers) >=500, Open Market Segment >=700 and Senior Citizens Segment >=600)
52
Corporate Banking
1. Portfolios between 31 and 90 days past due
2. Maximum Argentine Central Bank a situation equal to 2
3. Credit Ratings C (Probability of default higher than 30%)
4.
Its rating deteriorated by more than two notes from its credit approval rating.
Sectoral Analysis
Considering that the internal impairment models are estimated with historical information, the risk of non-compliance of the
companies is evaluated by type of activity based on the degree of affectation that they have due to the current economic situation, taking
into account their characteristics and seasonality, among others. Additionally, the different activities that make up the Bank’s portfolio
are classified into four types of risk. They are:
1. Low risk
2. Medium risk
3. High risk
4. Very high risk
The evaluation of significant credit increases and the calculation of ECL include prospective information. Grupo Supervielle
carried out a historical analysis and identified key economic variable that affect the credit risk and expected credit losses for each
portfolio. Forecasts of these economic variables (“base economic scenario”) are provided on a six-month basis by the research team at
the Bank and offer a better estimated outlook of the economy for the next 12 months. The impact of such economic variables on DP and
LGD resulted from the statistic regression analysis to understand the impact the changes in these variables has had historically on default
rates and LGD components. In addition to the base economic scenario, the research team also provides two potential scenarios together
with scenario analysis. The number of other scenarios is defined in accordance with the analysis of the main products to ensure the lineal
effect between the future economic scenario and related expected credit losses. The number of scenarios and its features are re-evaluated
on a six-month basis, except a situation occurs in the macroeconomic framework that justifies a greater regularity.
Grupo Supervielle considers the following variables for estimating expected credit losses on the different scenarios:
Parameter
Segment
Probability of Default
Personal and Business
Banking
Corporate Banking
Consumer Finance
Loss Given Default
All
Macroeconomic Indicators
Exchange rate, Inflation,
Wage increase, Economic
Activity Estimate, Real Badlar
rate
Inflation, Wage increase, Real
Badlar rate, Activity Indicator
Private Sector Wages, Private
sector employment, exchange
rate
Inflation, Wage increase,
Activity Indicator, Exchange
rate
Atomization of the loan portfolio
As a result of our risk management policies, we have a diversified loan portfolio. As of December 31, 2023, the top 10, 50 and
100 borrowers represented 38%, 28% and 11%, respectively, of our total loan portfolio, which shows a slight decrease in the
diversification of our loan portfolio, compared to December 2022.
53
Atomization of the loan portfolio
Loan portfolio atomization
%Top10
%Top50
%Top100
Loan Portfolio breakdown by economic activity
4Q23
3Q23
2Q23
1Q23
4Q22
11 %
28 %
38 %
10 %
25 %
34 %
8 %
22 %
30 %
8 %
22 %
30 %
8 %
21 %
29 %
Ps. Change YoY
(In millions)
75,284
55,894
27,690
29,447
18,992
12,763
7,748
11,598
10,157
9,300
7,856
9,872
9,730
8,547
8,347
5,051
6,835
3,554
3,862
43,828
Business Sector
Families and individuals
Agribusiness
Food & Beverages
Utilities
Wine
Automobile
Construction & Public works
Sugar Industry
Machinery & Equipment
Pharmaceutical
Chemicals & plastics
Oil, Gas & Mining
Textile
IT & Communications
Financials
Transport
Home appliance
Health
Retailer
Others
Dec 31, 2023 Share Dec 31, 2022 Share
31.3 %
12.1 %
7.8 %
6.4 %
4.7 %
3.2 %
2.6 %
2.3 %
2.2 %
2.2 %
2.2 %
2.2 %
2.0 %
2.0 %
1.8 %
1.8 %
1.6 %
1.2 %
1.0 %
9.3 %
46.4 %
7.6 %
8.2 %
4.0 %
4.0 %
2.9 %
3.3 %
1.1 %
1.5 %
1.7 %
2.2 %
1.4 %
1.0 %
1.4 %
1.2 %
2.4 %
1.3 %
1.5 %
1.0 %
5.7 %
Collateralized Loan Portfolio
As of December 31, 2023, 32% of the total commercial loan portfolio was collateralized, while 33% of the commercial non-
performing loans portfolio was collateralized (compared to 76% as of December 31, 2022).
Loan portfolio collaterall
Collateralized Portfolio
Unsecured Portfolio
Entrepreneurs &
Small Businesses
37 %
63 %
SMEs & Middle
Market
Large
Total
46 %
54 %
28 %
72 %
32 %
68 %
Regarding the Personal and Business Banking portfolio, loans to payroll and pension clients as of December 31, 2023,
represented 53% of the total loan portfolio to individuals in the segment.
Credit Policy
a) Banco Supervielle S.A.
Credit Application Process
The credit approval process is designed to facilitate an accurate risks analysis, expedient decisions and complete support
information.
Potential customers are interviewed and asked to submit documentation to efficiently evaluate risk. The Credit department
performs a risk evaluation using computer software and issues an opinion on the requested assistance. If credit assistance is deemed
feasible, the customer’s application is submitted for approval at the appropriate level, pursuant to credit authority guidelines and
depending on the facility amount requested, the term and security.
54
Applications by prospective retail customers and small businesses are analyzed using an electronic application. Prospective
corporate customers are evaluated on a case-by-case basis. There are no pre-approved lines of credit, except for individuals who may
obtain a pre-approved line of credit based on their maximum debt burden ratio.
Credit Monitoring and Review Process
It is the Bank’s policy to continually track and monitor risk in order to anticipate or foresee changes in the macroeconomic
environment and anomalies that may affect the course of customers’ activities and the repayment of loans. The Credit Risk department
traces alert indicators for signals that may affect credit collection. Signals could be late payments of more than 30 days, alerts from
credit bureaus, lawsuits from third parties, customers or suppliers and bounced checks. Action plans are in place to anticipate or mitigate
potential nonperformance situations. The Credit Risk department tracks alert indicators by:
•
•
•
•
•
•
•
•
•
analyzing loan portfolio evolution;
verifying compliance with credit regulatory requirements;
reviewing the factoring portfolio on a daily basis by operation, maturity, concentration, direct and indirect risk;
verifying and analyzing customer arrears;
detecting market alerts, customer behavior in the market and the financial system, lawsuits, etc.;
proposing action plans;
involving the senior credit committee or junior credit committee as applicable;
reporting customer alerts to officials and managers; and
establishing allowances for estimated loan losses.
Credit Approval Process
The following chart describes the levels of approval for the different types of loans:
Senior Committee
Junior Committee
Manager
Team Leaders
Relationship officers
Credit Approval Limit
(in millions of Pesos)
A- or >
BB or <
BB+ or >
Total Maximum
Approval Limit
Chief Risk Officer (as Chairman of the Committee);
CEO (as Vice chairman of the Committee);
Deputy CEO
Executive Manager. Middle-market & corporates;
Head of Corporate Banking;
Manager of SMEs business
Head of Treasury and Global Markets;
Limitless
Limitless Limitless
Chief Risk Officer (as Chairman of the Committee);
Deputy CEO
Manager of SMEs business;
Executive Manager. Middle-market & corporates;
Manager Corporate Banking Bs Aires and Interior;
3,500
3,500
3,500
2,000
800
2,000
570
2,000
NA
500
300
NA
55
Recovery Process
The Bank’s Recovery Area handles the collection of past due credits. Collections are handled by different units for individual
and corporate customers.
With respect to individual customers, the Recovery Area begins a collection process when credits become past due by
three days. The recovery team issues automatic notice actions from the third to the eighth past due days in order to warn the customers.
After this period, the collection of the overdue credit is handled by a third-party collection agency. After 150 days, the Recovery Area
determines whether the past due credit should be sent to a different collection agency or it made subject to legal proceedings.
In the case of corporate clients and SMEs, payment defaults are analyzed on a case-by-case basis, taking into consideration the
loan amount and the number of days in arrears, among other factors. The Recovery Department can participate in out-of-court and
judicial settlement negotiations and approve debtor payment proposals in amounts for up to Ps.50 million.
Cybersecurity; Information Security; Data Protection
See “Item 16.K. Cybersecurity.”
Competition
Over the last decade, and increasingly over the past three years, traditional banks have accelerated their digital transformation
processes in order to adapt to the current environment where competition has been intensified by the disruption of fintech platforms
which have entered the financial markets offering innovative digital business models, new business opportunities and new usage options.
In many cases, traditional banks have combined digital banking systems with traditional baking systems to offer to their customers the
advantages of both systems. In addition, certain traditional banks have created digital banking systems which operate separately from
the traditional banking systems. During 2023, traditional banks continued to make progress on the development of digital capabilities
and certain indicators show improvements in terms of digital adoption and customer experience.
Traditional Banking
The Argentine financial system remains highly fragmented compared to the rest of Latin America. As of December 31, 2023,
the Argentine financial system had 77 financial entities, of which 63 were banks, of which 13 were public banks and 50 private banks.
In terms of bank ownership, as of December 31, 2023, the percentage of banks controlled by the Argentine government was 21%, the
percentage of banks controlled by Argentine private entities was 56%, the percentage of banks controlled by foreign financial entities
was 14%, and branches of foreign financial entities represented 9%. As of December 31, 2023, the number of financial companies
operating in this segment was 14.
According to the information published by the Central Bank, as of December 31, 2023 we were one of the top 10 private banks
in the Argentine financial system in terms of outstanding amount of loans and deposits. In terms of deposits, we had an estimated market
share of 2.6% of daily average deposits in 2023, ranking ninth among the total private banks in the Argentine financial system. In terms
of total loans, we had an estimated market share of 2.4% as of daily average loans in 2023, ranking eighth among the total private banks
in the Argentine financial system.
The Bank faces a high degree of competition in virtually all core financial products with respect to pricing (interest rate or fee)
and term. The Bank’s strategy to face this competition is to maintain aggressive business policies, to differentiate its product offering
and customer service from other financial institutions, and to redesign its processes in order to achieve greater sales productivity.
Notwithstanding this competitive challenge, our growth strategy, both organic and through acquisitions, has resulted in an
increase in our financial system market share since 2005, according to the information published by the Central Bank. Taking into
consideration total loan portfolio and receivables from financial leases portfolio, total loans and leasing market share was 2.4% in 2023
compared to 0.1% as of December 31, 2001.
56
Mutual Funds
With respect to the mutual fund market, based on the Chamber of Mutual Funds information we estimate that our market share
was 1.9% as of December 31, 2023, and that SAM is ranked 21 out of 56 managers in the industry. Our main competitors are Galicia
Administradora de Fondos S.A.S.G.F.C.I., Macro Fondos S.G.F.C.I.S.A., ICBC Investments S.A.S.G.F.C.I., Francés Administradora
de Inversiones S.A.G.F.C.I.,HSBC Administradora de Inversiones S.A.S.G.F.C.I., BNP Paribas Asset Management Arg S.A.S.G.F.C.I.
and Santander Río Asset Management G.F.C.I.S.A.
Online trading broker
IOL invertironline is our digital online broker. In December, 2023, IOL invertironline ranked third in the ByMA exchange
ranking on Equity and fifth in CEDEARs (Certificado de Depósito Argentinos), according to the information published by ByMA. IOL
invertironline’s main competitors are Allaria S.A., Buenos Aires Valores S.A., SBS Trading S.A., Latin Securities S.A., Balanz S.A.U.,
Bull Market S.A. and Invertir en Bolsa S.A.
Argentine Banking Regulation Overview
Founded in 1935, the Central Bank is the principal monetary and financial authority in Argentina. Its mission is to promote
monetary and financial stability, employment and economic development with social equity. It operates pursuant to its charter, which
was amended in 2012 by Law No. 26,739 and the provisions of the FIL. Under the terms of its charter, the Central Bank must operate
independently from the Argentine government.
Since 1977, banking activities in Argentina have been regulated primarily by the FIL, which empowers the Central Bank to
regulate the financial sector. The Central Bank regulates and supervises the Argentine banking system through the Superintendency.
The Superintendency is responsible for enforcing Argentina’s banking laws, establishing accounting and financial reporting
requirements for the banking sector, monitoring and regulating the lending practices of financial institutions and establishing rules for
participation of financial institutions in the foreign exchange market and the issuance of bonds and other securities, among other
functions.
The powers of the Central Bank include the authority to fix the monetary base, set interest rates, establish minimum capital,
liquidity and solvency requirements, regulate credit, approve bank mergers, approve certain capital increases and transfers of stock,
grant and revoke banking licenses, and to authorize the establishment of branches of foreign financial institutions in Argentina and the
extension of financial assistance to financial institutions in cases of temporary liquidity or solvency problems.
The Central Bank establishes certain technical ratios that must be observed by financial entities, such as ration related to levels
of solvency, liquidity, the maximum credit that may be granted per customer and foreign exchange assets and liability positions.
In addition, financial entities need the authorization from the Central Bank forcertain actions, such as opening or changing
branches or ATMs, acquiring share interests in other financial or non-financial corporations and establishing liens over their assets,
among others.
As supervisor of the financial system, the Central Bank requires financial institutions to submit information on a daily, monthly,
quarterly, semiannual and annual basis. These reports, which include balance sheets and income statements, information related to
reserve funds, use of deposits, classifications of portfolio quality (including details on principal debtors and any allowances for loan
losses), compliance with capital requirements and any other relevant information, allow the Central Bank to monitor the business
practices of financial entities. In order to confirm the accuracy of the information provided, the Central Bank is authorized to carry out
inspections.
If the Central Bank’s rules are not complied with, various sanctions may be imposed by the Superintendency, depending on the
level of infringement. These sanctions range from a notice of non-compliance to the imposition of fines or, in extreme cases, the
revocation of the financial entity’s operating license. Additionally, non-compliance with certain rules may result in the compulsory
filing of specific adequacy or restructuring plans with the Central Bank. These plans must be approved by the Central Bank to permit
the financial institution to remain in business.
57
Banking Regulation and Supervision
Central Bank Supervision
Since September 1994, the Central Bank has supervised the Argentine financial institutions on a consolidated basis. Such
institutions must file periodic consolidated financial statements that reflect the operations of head offices or parent companies, as well
as those of their branches in Argentina and abroad, and of their significant subsidiaries, whether domestic or foreign. Accordingly,
requirements in relation to liquidity and solvency, minimum capital, risk concentration and loan loss provisions, among others, should
be calculated on a consolidated basis.
Permitted Activities and Investments
The FIL governs any individuals and entities that perform habitual financial intermediation and, as such, are part of the financial
system, including commercial banks, investment banks, mortgage banks, financial companies, savings and loan companies for
residential purposes and credit unions. Except for commercial banks, which are authorized to conduct all financial activities and services
that are specifically established by law or by regulations of the Central Bank, the activities that may be carried out by Argentine financial
entities are set forth in the FIL and related Central Bank regulations. Commercial banks are allowed to perform any and all financial
activities inasmuch as such activities are not forbidden by law. Some of the activities permitted for commercial banks include the ability
to (i) receive deposits from the public in both local and foreign currency; (ii) underwrite, acquire, place or negotiate debt securities,
including government securities, in both exchange and over-the-counter (“OTC”) markets (subject to prior approval by the CNV, if
applicable); (iii) grant and receive loans; (iv) guarantee customers’ debts; (v) conduct foreign currency exchange transactions; (vi) issue
credit cards; (vii) act, subject to certain conditions, as brokers in real estate transactions; (viii) carry out commercial financing
transactions; (ix) act as registrars of mortgage bonds; (x) participate in foreign exchange transactions; and (xi) act as fiduciary in
financial trusts. In addition, pursuant to the FIL and Central Bank Communication “A” 3086, as amended, commercial banks are
authorized to operate commercial, industrial, agricultural and other types of companies that do not provide supplemental services to the
banking services (as defined by applicable Central Bank regulations) to the extent that the commercial bank’s interest in such companies
does not exceed 12.5% of its voting stock or 12.5% of its capital stock. Nonetheless, if the aforementioned limits were to be exceeded,
the bank should (i) request Central Bank’s authorization; or (ii) give notice of such situation to the Central Bank, as the case may be.
However, even when commercial banks’ interests do not reach such percentages, they are not allowed to operate such companies if
(i) such interest allows them to control a majority of votes at a shareholders’ or board of directors’ meeting, or (ii) the Central Bank does
not authorize the acquisition.
Furthermore, according to the rules regarding “Complementary Services of the Financial Entities and Allowed Activities,” as
amended, commercial banks are authorized to operate in local or foreign companies that have one or two of the exclusive corporate
purposes listed in section 2.2 of Communication “A” 6342, as amended by Communication “A” 7631, in which the commercial bank’s
interest either exceeds 12.5% of such companies’ voting stock or allows the commercial bank to control a majority of votes at a
shareholders’ or board of directors’ meeting. The financial entities shall give notice to the Superintendency if the corporate purposes of
such companies include any of the corporate purposes listed in section 2.2 of that rule.
Under Central Bank rules regarding to “Financial Entities Minimum Capital,” the holdings of a commercial bank in the capital
stock of third parties, including participations in mutual funds, shall not exceed 60% of the Computable Equity Liability (“RPC,” as per
its acronym in Spanish) of such commercial bank. In addition, the total amount of a commercial bank’s holdings, considered as a whole,
in (i) unlisted shares, excluding holdings in companies that provide complementary services to the financial activity and holdings in
state-owned companies that provide public services, (ii) listed shares and mutual fund shares that do not trigger minimum capital
requirements on a market risk bases, and (iii) publicly traded shares that do not have a “market price available to the general public,” is
limited to 15% of such commercial bank’s RPC. For this purpose, a given market price of the shares is considered to be “available to
the general public” when market rates that measure the daily volume of significant transactions are available, and the sale of such shares
held by such bank would not materially affect the share price.
Operations and Activities that Banks Are Not Permitted to Perform
Section 28 of the FIL prohibits commercial banks from: (a) creating liens on their own assets without prior approval from the
Central Bank, (b) accepting their own shares as collateral, (c) conducting transactions with their own directors or managers and with
companies or persons related thereto under terms that are more favorable than those regularly offered in transactions with other clients,
and (d) carrying out commercial, industrial, agricultural or other activities without prior approval of the Central Bank, except those
considered financially related activities under Central Bank regulations. Notwithstanding the foregoing, banks may own shares in other
58
financial institutions with the prior approval of the Central Bank, and may own shares or debt of public services companies, if necessary
to obtain those services.
Liquidity and Solvency Requirements
Since 1994, the Central Bank supervision of financial institutions has been carried out on a consolidated basis. Therefore, all
the documentation and information filed with the Central Bank, including financial statements, must show the operations of each entity’s
parent company and all of its branches (in Argentina and abroad), the operations of significant subsidiaries and, as the case may be, of
other companies in which such entity holds stock. Accordingly, all requirements relating to liquidity, minimum capital, risk
concentration and bad debts’ reserves, among others, are calculated on a consolidated basis.
Legal Reserve
Pursuant to the FIL, we are required to maintain a legal reserve which must be funded with no more than 20% and no less than
10% of yearly income. Notwithstanding the aforementioned, pursuant to Central Bank rules, we are required to maintain a legal reserve
which is funded with 20% of our yearly income determined in accordance with such rules. This reserve can only be used during periods
in which a financial institution has incurred losses and has exhausted all other reserves. If a financial institution does not comply with
the required legal reserve, it is not allowed to pay dividends to its shareholders. For further information, see “Item 5.A. Operating
Results.”
Non-liquid Assets
Since February 2004, non-liquid assets (computed on the basis of their closing balance at the end of each month, and net of
those assets that are deducted to compute the regulatory capital) plus the financings granted to a financial institution’s related parties
(computed on the basis of the highest balance during each month for each customer) cannot exceed 100% of the Argentine regulatory
capital of the financial institution, except for certain particular cases in which it may exceed up to 150%.
Non-liquid assets consist of miscellaneous assets and receivables, bank property and equipment, assets securing obligations,
except for swaps, futures and derivative transactions, certain intangible assets and equity investments in unlisted companies or listed
shares, if the holding exceeds 2.5% of the issuing company’s equity. Non-compliance with the ratio produces an increase in the minimum
capital requirements equal to 100% of the excess on the ratio.
Unless otherwise indicated, the regulations described in this section should be applied to financial information of the banks
calculated in accordance with Central Bank rules.
Minimum Capital Requirements
The Central Bank requires financial institutions to maintain minimum capital amounts measured as of each month’s closing.
The minimum capital is defined as the greater of (i) the basic minimum capital requirement, which is explained below, or (ii) the sum
of the credit risk, operational risk and market risk. Financial institutions (including their domestic Argentine and international branches)
must comply with the minimum capital requirements both on an individual and a consolidated basis.
As stated above under “Presentation of Financial and Other Information,” we have prepared our audited consolidated financial
statements for 2023, 2022 and 2021 under IFRS. Minimum capital requirement has been prepared in accordance with the rules of the
Argentine Central Bank, which is not comparable to data prepared under IFRS.
59
The following table sets forth information regarding excess capital and selected capital ratios of the Bank:
Calculation of excess capital:
Allocated to assets at risk
Allocated to Bank premises and equipment, intangible assets and equity
investment assets
Market risk
Public sector and securities in investment account
Operational risk
Required minimum capital under Central Bank rules
Basic net worth
Complementary net worth
Deductions
Total capital under Central Bank rules
Excess capital
Credit Risk Weighted Assets
Risk Weighted Assets (1)
Selected capital and liquidity ratios:
Regulatory capital/credit risk weighted assets
Regulatory capital/risk weighted assets
Average shareholders’ equity as a percentage of average total assets
Total liabilities as a multiple of total shareholders’ equity
Cash as a percentage of total deposits
Liquid assets as a percentage of total deposits (3)
Tier 1 Capital / Risk weighted assets
Year ended December 31,(2)
2023
2022
(in thousands of Pesos except percentages and
ratios)
2021
51,149,308
20,729,624
12,957,481
10,474,161
2,658,844
272,202
21,891,498
86,446,013
264,420,324
—
(55,583,242)
208,837,082
122,391,069
756,569,592
1,058,040,330
3,747,910
1,693,962
625,570
8,188,453
34,985,519
77,619,877
2,600,170
(25,063,540)
55,156,507
20,170,988
303,351,644
428,238,464
2,035,689
965,159
34,489
4,805,957
20,798,775
42,938,440
1,564,272
(11,770,286)
32,732,426
11,933,651
181,430,487
254,513,436
27.6 %
19.7 %
14.5 %
6.3x
14.4 %
64.1 %
19.7 %
18.2 %
12.9 %
12.2 %
8.3x
8.7 %
46.0 %
12.3 %
18.4 %
12.9 %
12.5 %
7.5x
11.1 %
49.2 %
12.2 %
(1) Risk Weighted Assets includes operational risk weighted assets, market risk weighted assets, and credit risk weighted assets,
Operational risk weighted assets and market risk weighted assets are calculated by multiplying their respective required minimum
capital under Central Bank rules by 12.5, Credit Risk Weighted Assets is calculated by applying the respective credit risk weights
to our assets, following Central Bank rules,
(2) Nominal values without inflation adjustment,
(3) Liquid assets include cash, securities issued by the Central Bank, and repo transactions with the Central Bank. This ratio does not
consider other government securities held by the Company to set minimum reserve requirements.
As of December 31, 2023, the Bank’s total capital ratio was 19.7%, compared to 12.9% as of December 31, 2022, and the
Bank’s common equity Tier 1 ratio was 19.7%, compared to 12.3% as of December 31, 2022. Including the funds held by Grupo
Supervielle, which are used to fund our growth strategy, the consolidated pro-forma total capital ratio as of December 31, 2023 was
21.0%.
The capital composition to be considered in order to determine compliance with minimum capital requirements is the financial
institution’s RPC (Central Bank rules regarding to “Financial Entities Minimum Capital,” as amended).
Basic Minimum Capital
As from April 1, 2022, the basic minimum capital requirement to be complied with by financial institutions is as follows:
Banks
Ps.500 million
Other Entities (*)
Ps.230 million
(*) Except credit entities.
60
Financial entities operating as of April 1, 2022 must comply with the basic capital requirement set forth in the table above from
March 31, 2024. Until that date, such financial entities are required to comply with the basic capital requirement set forth in the table
below for the periods indicated:
Period
From April 1, 2022 to March 31, 2023
From April 1, 2023 to March 30, 2024
Banks
Ps.170 million
Ps.300 million
Other Entities (*)
Ps.80 million
Ps.140 million
(*) Except credit entities.
Financial institutions which do not comply with the basic capital requirements must submit to the Argentine Superintendency
of Financial and Exchange Institutions a compliance program within 20 calendar days following the closing of the period in which a
deficiency has been recorded, and in any case no later than June 30, 2024.
Regulatory Capital of Financial Institutions: Tier 1 and Tier 2 Capital Regulations
Argentine financial institutions must comply with guidelines similar to those adopted by the Basel Committee on Banking
Regulations and Supervisory Practices, as amended in 1995 (the “Basel Rules”). In certain respects, however, Argentine banking
regulations require higher ratios than those set forth under the Basel Rules.
The Central Bank takes into consideration a financial institution’s RPC in order to determine compliance with capital
requirements. RPC consists of Tier 1 capital (Basic Net Worth) and Tier 2 capital (Complementary Net Worth).
Tier 1 Capital
Tier 1 capital consists of (i) common equity tier 1 (“COn1”), (ii) deductible items from the common equity tier 1 (CDCOn1),
(iii) additional equity tier 1 (“CAn1”), and (iv) deductible concepts from additional capital level 1 (CDCAn1).
COn1 Capital
COn1 includes the following net worth items:
(i)
capital stock (excluding preferred stock),
(ii)
non-capitalized capital contributions (excluding share premium),
(iii)
adjustments to shareholders’ equity,
(iv)
earnings reserves (excluding the special reserve for debt instruments),
(v)
unappropriated earnings,
(vi)
other results either positive or negative, in the following terms:
•
•
•
•
100% of net earnings or losses recorded until the last quarterly financial statements with limited review report,
corresponding to the last full fiscal year and in respect of which the auditor has not issued the audit report;
100% of net earnings or losses for the current year as of the date of the most recent audited quarterly financial statements;
50% of profits or 100% of losses for the most recent audited quarterly or annual financial statements; and
100% of losses not shown in the financial statements, arising from quantification of any facts and circumstances reported
by the auditor;
61
(vii)
other comprehensive income:
(a) 100% of the results recorded in the following items belonging to the account “Other comprehensive
cumulative results” for the most recent audited quarterly or annual financial statements:
•
•
Revaluation of property, plant, and equipment and
intangibles; gains or losses on financial instruments at fair value with changes in other comprehensive income.
(b) 100% of the debit balance of each of the items recorded in other comprehensive income not mentioned in
section (a). The recognition of these concepts, registered in accounts of other comprehensive income or other
accumulated comprehensive income, as appropriate, will be made in accordance with the terms of points
8.2.1.5. or 8.2.1.6., as the case may be, of Central Bank’s rules regarding “Financial Entities Minimum
Capital.”
(viii)
share premiums of the instruments included in COn1, and
(ix)
in the case of consolidated entities, minority shareholdings (ordinary shares issued by subsidiaries subject to
consolidated supervision and belonging to third parties, if certain criteria are met).
In order for the shares to fall under COn1, at the time of issuance, the financial entity must not generate any expectation that
such shares will be reacquired, redeemed or amortized, and the contractual terms must not contain any clause that might generate such
an expectation.
For the purpose of determining the RPC, financial institutions classified as “Group “A” Entities (as defined below) must
compute as COn1 the positive difference between the higher of the accounting allowance stipulated in point 5.5 of IFRS 9 and the
regulatory allowance calculated in accordance with the rules on “Establishment of minimum provisions for loan losses” or the
accounting provision corresponding to the balance as of November 30, 2019.
Deductible Concepts
The above-mentioned concepts will be considered without certain deductions pursuant to subsection 8.4.1 and 8.4.2 (as
applicable) of Central Bank rules regarding “Financial Entities Minimum Capital,” as amended.
62
Concepts deductible from COn1 include, among other things: (a) positive balances resulting from the application of income
tax withholdings above 10% of the previous months of basic net worth and balances in favor from deferred tax assets; (b) deposits
maintained in a corresponding account with a foreign financial institutions that are not rated as “investment grade,” (c) debt securities
not held by the relevant financial institutions, except in the case of securities registered by or in custody of the Central Bank (CRYL),
Caja de Valores S.A., or Clearstream, Euroclear and the Depository Trust Company, (d) securities issued by foreign governments whose
credit rating is less than ‘investment grade’ according to Communication “A” 5671; (e) subordinated debt instruments issued by other
financial institutions; (f) shareholders; (g) real property added to the assets of the financial entity and with respect to which the title deed
is not duly recorded at the pertinent Argentine real property registry, except where such assets shall have been acquired in a court-
ordered auction sale; (h) intangible assets; (i) items pending allocation, debtor balances and other; (j) certain assets, as required by the
Superintendency resulting from differences between carry amount and the fair value of assets or actions taken to distort or disguise the
true nature or scope of operations; (k) those required by the Superintendency; (l) any deficiency relating to the minimum loan loss
provisions required by the Superintendency; (m) equity interests in companies that have the following activities: (i) financial assistance
through leasing or factoring agreements, (ii) transitory equity acquisitions in other companies in order to further their development to
the extent the ultimate purpose is selling such interest after development is accomplished, and (iii) credit, debit and similar cards
emissions; (n) the excess to the limits set forth for secured assets on Section 3 of the rules on “Affectation of Restricted Assets” (o) the
highest balance of that month’s financial assistance granted during the month, where the advance payments set forth in Section 3.2.5 of
the rules on “Lending to the non-financial public sector” surpass the authorized limit and/or are not settled within the terms established
therein; (p) income from sales relating to securitization transactions, as applicable, pursuant to the provisions of Sections 3.1.4., 3.1.5.1.
and 3.1.5.2., and from portfolio sales or assignments with recourse. This deduction can be applied as long as the credit risk still persists
and to the extent in which the capital requirement for the underlying exposures or the sold or assigned portfolio with recourse is
maintained; (q) in the case of liabilities from derivatives accounted for at fair value, unrealized gains or losses due to changes in the
financial institution’s credit risk will be deductible. The deduction will be limited to the financial institution’s own credit risk adjustments
only plus or minus, as the case may be); such adjustments may not be offset against adjustments for counterpart risk; (r) equity interests
in financial institutions subject to consolidated oversight, except where not permitted due to the existence of deductible amounts; or in
the case of foreign financial institutions. In these cases, the deductions will be the net amount of the allowance for impairment and,
when controlled financial institutions subject to the provisions of Section 8.2.1.6., item iii) are involved, the deductions will be 50% of
the net amount of profits derived by these entities on a proportional basis to their respective interests.
CAn1 Capital
CAn1 includes certain debt instruments of financial entities not included under COn1 that meet the regulatory criteria
established in section 8.3.2 of the rules regarding “Financial Entities Minimum Capital,” as amended and supplemented, and share
premiums resulting from instruments included in CAn1. Furthermore, in the case of consolidated entities, it includes instruments issued
by subsidiaries subject to consolidated supervision and belonging to third parties, pursuant to applicable regulatory requirements.
The concepts mentioned in the previous points will be reduced, if applicable, by the deductible concepts provided in point 8.4.2
of the rules regarding “Financial Entities Minimum Capital,” as amended and supplemented, which are described below.
Moreover, debt instruments included under CAn1 must comply with the following requirements:
(1)
(2)
(3)
(4)
Must be totally subscribed and paid in full.
Must be subordinated to depositors, unsecured creditors and to the subordinated debt of the financial entity. The
instruments must contemplate that in the case of the entity’s bankruptcy and once all debts with all the other creditors
are satisfied, its creditors shall have priority in the distributions of funds only and exclusively with respect to the
shareholders (irrespective of their class), with the express waiver of any general or special privilege.
Must not be insured or guaranteed by the issuer or a related entity, and with no agreement improving, either legally or
economically, the payment priority in the case of the entity’s bankruptcy.
They shall not contemplate any type of capital payment, except in the case of liquidation of the financial entity.
Provisions gradually increasing remuneration or other incentives for anticipated amortization are not allowed.
63
(5)
(6)
(7)
(8)
(9)
After five (5) years as from the issuance date, the financial entity can buy back the debt instruments if: (i) it has the
prior authorization of the Superintendency, (ii) the entity does not create any expectations regarding the exercise of
the purchase option, and (iii) the debt instrument is replaced by a RPC of equal or greater value sustained by its
revenue capacity, or if it is demonstrated that once the purchase option is exercised its RPC significantly exceeds at
least by 20% of the minimum capital requirements.
Any capital repayment requires previous authorization from the Superintendency. In the case of a capital repayment,
the financial entity must not create any market expectations regarding the granting of such authorization.
The financial entity can pay dividends/interest coupons at any time, and at its sole discretion, which shall not be
considered a default in itself and shall not grant bondholders the right to claim the conversion of their notes into
ordinary shares. Furthermore, there shall be no restrictions to the financial entity, except with respect to dividend
distribution to the shareholders.
The payment of dividends/interest coupons shall be carried out through the noting of distributable entries, in the terms
of the regulations on “Results Distribution” (Section III of the Central Bank’s regulations).
The included dividends/interest coupons shall not have periodic adjustments because of the financial entity’s credit
risk.
(10)
They should not have been bought by the financial entity or any other entity over which the financial entity has control
or significant influence.
(11)
They should not have been bought with direct or indirect financing from the financial entity.
(12)
They shall not contain elements that make re-capitalization difficult.
Instruments considered liabilities must absorb losses once a pre-established triggering event takes place. The instruments must
do so through their conversion into ordinary shares and a mechanism assigning final losses to the instrument with the following effects:
(a)
(b)
(c)
Reduction of debt represented by the instrument in the event of winding-up of the entity;
Reduction of the amount to be repaid in case a call option is exercised;
Total or partial reduction of the dividends/interest coupon payments of the instrument.
Complementary Net Worth (PNc): Tier 2
Tier 2 Capital includes (i) certain debt instruments of financial entities which are not included in Tier 1 Capital and meet the
regulatory criteria established in section 8.3.3 of the Central Bank rules regarding “Financial Entities Minimum Capital” as amended
and supplemented, (ii) share premium from instruments included in Tier 2 Capital, and (iii) loan loss provisions on the loan portfolio of
debtors classified as being in a “normal situation” pursuant to Central Bank rules on debtor classification and on financings with class
“A” preferred securities not exceeding 1.25% of the assets measured for credit risk. Additionally, in the case of consolidated entities, it
includes (iv) debt instruments issued by subsidiaries subject to a consolidated supervision and belonging to third parties, if they meet
the criteria in order to be included under complementary net worth.
The above-mentioned concepts will be considered minus deductible concepts pursuant to section 8.4.2 of the Central Bank
rules regarding “Financial Entities Minimum Capital,” as amended and supplemented, which is described below.
Moreover, debt instruments included under complimentary net worth must comply with the following requirements:
•
•
Must be totally subscribed and paid in full.
Must be subordinated to depositors, unsecured creditors and the subordinated debt of the financial entity.
64
•
•
•
•
•
•
Must not be insured or guaranteed by the issuer or a related entity, and with no agreement improving either legally or
economically the payment priority in case of the entity’s bankruptcy.
Maturity: (i) original maturity date within no less than five (5) years, (ii) clauses considering gradually increasing
remuneration or other incentives for anticipated amortization are not allowed, and (iii) from the beginning of the last
five years of life of the indebtedness, the computable amount will be diminished by 20% of its nominal issuance value.
After five (5) years as from the issuance date, the financial entity can buy back the debt instruments with the previous
authorization of the Superintendency, and if the entity does not create any expectations regarding the exercise of the
purchase option. The debt instrument must be replaced by an RPC of equal or greater value sustained by its revenue
capacity, or if it is demonstrated that once the purchase option is exercised its RPC significantly exceeds at least in a
20% of the minimum capital requirements.
The investor shall not be entitled to accelerate the repayment of future projected payments, except in the case of
bankruptcy or liquidation.
They cannot incorporate dividends/coupons with periodic adjustments linked to the financial entity’s credit risk.
They should not have been bought by the financial entity or any other entity over which the financial entity has control
or significant influence.
They should not have been bought with direct or indirect financing from the financial entity.
Additionally, instruments included in Tier 2 capital and CAn1, shall meet the following conditions in order to assure their loss-
absorbency capacity:
(a)
(b)
(c)
Their terms and conditions must include a provision pursuant to which the instruments must absorb losses–either
through a release from debt or its conversion into ordinary capital–once a triggering event has occurred, as described
hereunder.
If the holders receive compensation for the debt release performed, it should be carried out immediately and only in
the form of ordinary shares, pursuant to applicable regulations.
The financial entity must have been granted the authorization required for the immediate issuance of the corresponding
ordinary shares in the case of a triggering event, as described below.
Triggering events of regulatory provisions described above are: (i) when the solvency or liquidity of the financial entity is
threatened and the Central Bank rejects the amnesty plan submitted or revokes its authorization to function, or authorizes restructuring
protecting depositors (whichever occurs first) or (ii) upon the decision to capitalize the financial entity with public funds.
The Bank has issued three series of subordinated notes, none of which is outstanding as of the date of this annual report. See
“Item 5.B. Liquidity and Capital Resources—Financings—Banco Supervielle S.A.”
Further criteria regarding the eligibility of items included in the RPC calculation must be followed pursuant to the regulatory
requirements of minority and other computable instruments issued by subsidiaries, subject to consolidated supervision by third parties.
A minority shareholding may be included in COn1 of the financial entity if the original instrument complies with the requirements
established for its qualification as ordinary shares regarding the RPC.
65
Deductible concepts applied to the different capital levels
(i)
(ii)
Investments in computable instruments under the financial entity’s RPC not subject to consolidated supervision when
the entity owns up to 10% of the issuer’s ordinary capital according to the following criteria: (i) investments include
direct, indirect or synthetic interests; (ii) investments include the acquired net position; (iii) the holding of securities
underwritten to be sold within five business days term may be excluded; and (iv) the investments in capital
instruments that do not satisfy the criteria to be classified as COn1 (Common Capital Tier 1), AT1 (Additional Capital
Tier 1) or PNc (Supplementary Capital) of the financial institution shall be regarded as COn1 –common equity shares,
for the purposes of this regulatory adjustment. If the aggregate amount of these interests in the capital of financial
institutions, companies providing services supplementary to the financial industry and insurance companies – which
individually represent less than 10% of the COn1 of each issuer – exceeds 10% of the COn1 of the financial entity,
net of applicable deductions, the amount over such 10% shall be deducted from each capital tier in accordance with
the following formula: (i) amount to be deducted from COn1: aggregate excess amount over 10% multiplied by the
proportion represented by the COn1 holdings over the aggregate equity interests; (ii) amount to be deducted from
CAn1: aggregate excess amount over 10% multiplied by the proportion represented by the CAn1 over the aggregate
equity interests; and (iii) amount to be deducted from PNc: aggregate excess amount over 10% multiplied by the
proportion represented by the PNc holdings over the aggregate equity interest. If the financial institution does not have
enough capital to make the deduction pertaining to a particular capital tier, the remaining amount shall be deducted
from the next higher level. Amounts below the threshold, which are not deducted, are weighted based upon the risk
or are taken into account in the calculation of the market risk requirement, as applicable.
Investments in instruments computed as regulatory capital of financial institutions and companies rendering services
supplementary to the financial industry, not subject to consolidated supervision and insurance companies, when the
institution holds more than 10% of the common equity of the issuer, or when the issuer is a subsidiary of a financial
institution, shall be subject to the following criteria: (i) the investments include direct, indirect and synthetic interests
(for these purposes, (a) indirect interest means an investment by a financial institution in another financial institution
or company not subject to consolidated oversight, which in turn has an interest in another financial institution or
company not consolidated with the first one, and (b) a synthetic interest means an investment made by a financial
institution in an instrument the value of which is directly related with the equity value of another financial institution
or company not subject to consolidated supervision); (ii) the net acquired position is included, i.e., the gross acquired
position less the position sold in the same underlying exposure, when this has the same duration than the acquired
position or its residual life is at least one year; (iii) the holding of securities underwritten to be sold within a five
business day term may be excluded; and (iv) investments in capital instruments that do not satisfy the criteria to be
classified as COn1, CAn1 or PNc of the financial institution shall be regarded as Con1, common equity shares, for the
purposes of this regulatory adjustment. The amount of these interests, taking into account the applicable type of
instrument, shall be deducted from each of the applicable capital tiers of the financial institution. If the financial
institution does not have enough capital to make the deduction pertaining to a particular capital tier, the remaining
amount shall be deducted from the next higher level.
(iii)
Own repurchased instruments that satisfy the criteria for being included in CAn1 or PNc must be deducted from the
applicable capital tier.
Limits
Central Bank rules regarding “Financial Entities Minimum Capital,” as amended and supplemented, establishes minimum
thresholds regarding capital integration: (i) for COn1, the amount resulting from multiplying the capital risk weighted assets (“RWA”)
by 4.5%; (ii) for the basic net worth, the amount resulting from multiplying the RWA by 6% and (iii) for the RPC, the amount resulting
from multiplying the RWA by 8%. The lack of compliance with any of these limitations is considered an infringement of the minimum
capital integration requirements.
Pursuant to Communication “A” 5889, as amended from time to time, RWA shall be calculated as follows:
RWA = RWAc + [(MR+OR) x 12.5]
Where:
66
RWA: risk weighted assets
RWAc: credit risk weighted assets MR: minimum capital requirement for market risk OR: minimum capital requirement for
operational risk
Economic Capital
Central Bank rules regarding “Financial Entities Risk Management Guidelines,” as amended and supplemented, requires
financial institutions to have an integrated global internal process in place to assess the adequacy of their economic capital based on
their risk profile (the “Internal Capital Adequacy Assessment Process” or “ICAAP”), as well as a strategy aimed at maintaining their
regulatory capital. If, as a result of this internal process, it is found that the regulatory capital is insufficient, financial institutions must
increase regulatory capital based on their own estimates to meet the regulatory requirement.
The economic capital of financial institutions is the amount of capital required to pay not only unexpected losses arising from
exposure to credit, operational and market risks, but also those arising from other risks to which the financial institution may be exposed.
Financial institutions must demonstrate that their internal capital targets are well-funded and adequate in terms of their general
risk profile and operations. The ICAAP should take into consideration all material risks to which the institution is exposed. To this end,
institutions must define an integral process for the management of credit, operational, market, interest rate, liquidity, securitization,
graduation, reputational and strategic risks and use stress tests to assess potential adverse scenarios that may affect their regulatory
capital.
The ICAAP must include stress tests supplementing and validating any other quantitative or qualitative approach employed by
the institution in order to provide its board of directors and senior management with a deeper understanding of the interaction among
the various types of risk under stress conditions. In addition, the ICAAP must consider the short- and long-term capital needs of the
institution and ensure the prudent accumulation of excess capital during positive periods of the economic cycle.
The capital level of each entity must be determined in accordance with its risk profile, taking external factors such as the
economic cycle effects and political scenario.
The main elements of a strict capital evaluation include:
(a)
(b)
(c)
(d)
Policies and procedures to guarantee that the entity identifies, quantifies and informs all the important risks.
A process which relates economic capital with the current level of risk.
A process which sets forth capital sufficiency objectives related to the risk, taking a strategic approach from the entity
and its business plan into consideration.
An internal process of controls, tests and audits, with the objective to guarantee that the general risk management
process is exhaustive.
The required amount of capital of each institution shall be determined based on its risk profile, taking into consideration other
external factors such as the effects of the economic cycle and the economic scenario.
Communication “A” 7143, as amended, provides guidelines for the calculation of economic capital, depending on the type of
financial entity. Group “A” Entities pursuant to Central Bank rules shall use their internal models to quantify the needs of economic
capital with relation to its risk profile. Conversely, Group “B” Entities or Group “C” Entities (in each case as defined below) may opt
for a simplified calculation methodology. Such option must be approved by the board of directors of such entity.
Group “B” Entities or Group “C” Entities entities which have opted for the simplified methodology shall apply the following
expression:
EC = (1.05 x MC) + max [0; U EVE – 15 % x bNW)]
67
Where:
EC: economic capital MC: minimum capital requirements EVE: measure of risk calculated according to a standardized
framework forseen in section 5.4 of Communication “A” 6534 bNW: basic net worth (tier 1 capital)
Requirements Applicable to Dividend Distribution
Dividends are calculated based on the statutory financial statements of the Bank, and prepared under Central Bank rules, which
differ in certain aspects from IFRS. The Central Bank has imposed restrictions on the payment of dividends, substantially limiting the
ability of financial institutions to distribute such dividends subject to compliance with the rules set forth in the “Restated Regulations
on Dividend Distributions” of the Central Bank, under the criterion that the amount to be distributed cannot affect the institution’s
liquidity and solvency, which shall be verified by the satisfaction of certain requirements, on a consolidated basis.
Such regulations provides that the payment of dividends (other than dividends on ordinary shares), the acquisition of treasury
shares, the payment on other tier 1 equity instruments (as determined in accordance with the provisions set forth in the rules on
“Minimum capital of financial institutions”) and/or the payment of financial incentives (bonuses) to personnel – in this case, subject to
the public order labor regulations (legal, statutory and contractual) governing the financial institutions’ relationships with their
personnel– shall be subject to these rules.
Institutions may distribute dividends up to the positive amount derived from the off-balance sheet calculation set forth herein,
without exceeding the limits set forth in these rules.
To such effect, the registered balances, as of the end of the fiscal year to which they belong, in the account “Unassigned Results”
(Resultados no asignados) and in the voluntary reserve for future distributions of dividends shall be computed, deducting the amounts –
recorded on the same date – of the legal and statutory reserves – whose creation is mandatory – and the following concepts:
1.
2.
3.
4.
5.
6.
100% of the negative balance of each of the concepts recorded under the line “Other comprehensive retained
earnings.”
The result derived from the revaluation of property, plant and equipment and intangible assets and investment
properties.
The net positive difference resulting from the calculation at amortized cost and the fair market value recorded by the
financial institution in connection with sovereign bonds and/or currency regulation instruments issued by the Central
Bank for such instruments valued at amortized cost.
The asset valuation adjustments notified by the Superintendency – whether accepted or not by the institution– that are
pending registration and/or those indicated by the external audit that have not been accounted.
The individual deductibles – regarding asset valuation – established by the SEFyC, including the adjustments derived
from the failure to consider agreed adjustment plans.
The resulting lower provisions and higher RPC from the treatment established on point 2 of Central Bank’s
Communication “A” 6946 (as amended) for financing MiPyMEs for the payment of salaries.
In addition, financial entities may not distribute earnings out of the incokme derived from the first application of IFRS, and
must set up a special reserve which can only be canceled for capitalization or to absorb possible negative balances from the item
“Unassigned results.”
The amount to be distributed, which shall not exceed the limits set forth by the Central Bank, shall not compromise the liquidity
and solvency of the institution. This requirement shall be considered satisfied once it has been verified that there are no integration
defects in the minimum capital position – whether individual and consolidated – as of the end of the fiscal year to which the
68
unappropriated retained earnings pertain or in the last closed position, whichever has the lesser integration excess, recalculating them
together (for such purpose only) with the following effects based on the data relevant as of each such date:
1.
2.
3.
Those arising after deducting the concepts set forth above in points 1 to 5, if applicable, from the assets.
The failure to consider the deductibles established by the SEFyC affecting the requirements, integrations and minimum
capital position.
The deduction of the amounts relating to the following concepts from the unappropriated retained earnings:
o
the amount to be distributed and, if applicable, the amount allocated to the creation of the reserve to repay debt
instruments, capable of integrating the regulatory capital;
o positive balances due to the application of the minimum presumed income tax – net of allowances for
impairment – that have not been deducted from the basic shareholders’ equity, in accordance with the provisions
set forth in rules on “Minimum capital of financial institutions”; and
o
adjustments made in accordance with points 1 to 5 above.
4.
The failure to consider the limit set forth in paragraph 7.2. of the rules on “Minimum capital of financial institutions.”
The distribution of earnings shall only be admitted if none of the following events occurs:
o
o
o
o
o
the institution is subject to the provisions of article 34 “Regularization and Recovery” and article 35 bis
“Institution’s restructuring for the purpose of safeguarding loans and deposits” of the FIL;
the institution has received financial assistance from the Central Bank under section 17 of its Charter, due to
illiquidity;
the institution is delayed or in breach of the reporting regime set forth by the Central Bank;
the institution records minimum capital integration deficits – whether individually or consolidated – (without
computing the effects of the individual deductibles established by the SEFyC);
the integration of the average minimum cash – in Pesos, in foreign currency or in sovereign securities – is smaller
than the requirement applicable to the last closed position or the projected position, taking into account the effect
of the earnings distribution;
o
the institution has failed to comply with the additional capital margins applicable in accordance with Section 4.
On March 19, 2020, in the midst of the coronavirus’ outbreak crisis, the Central Bank issued Communication “A” 6945, as
amended from time to time, by virtue of which the distribution of dividends by financial entities was temporarily suspended. On
December 31, 2021, by means of Communication “A” 7421 of the Central Bank, as amended, the Central Bank authorized financial
entities to distribute dividends for up to 20% of their accumulated dividends by December 31, 2021 from January 1, 2022 to December
31, 2022. Such financial entities must make such distributions in twelve equal, monthly and consecutive installments. On December 15,
2022 by means of Communication “A” 7659, the distribution of dividends by financial entities was temporarily suspended until
December 31, 2023. Nevertheless, on March 9, 2023, by means of Communication “A” 7719 the Central Bank revoked the suspension
of the distribution of dividends of financial institutions (item 4. of communication “A” 7659), and established that from April 1, 2023
through December 31, 2023, those financial institutions that have been authorizated by the Central Bank may distribute profits in six
equal, monthly and consecutive installments for up to 40% of the amount that would have corresponded. However, by means of
Communication “A” 7984 dated March 21, 2024, the Central Bank extended such date until December 31, 2024 and increased the
amount authorized to be distributed by 60% of the amount that would have corresponded. Such distribution must be consistent with the
reports included in the Information Regime “Business plan and projections and capital self-assessment report.” The calculation of the
distributable income, the verification of liquidity and solvency, the additional capital margins, as well as the amount of the installments
69
indicated, must be made using the currency approved by the shareholders’ meeting that approved the distribution and the payment of
each of the installments, as the case may be.
Moreover, in accordance with the FX Regulations (as defined below), the access to the MLC to pay dividends to non-resident
shareholders is subject to certain requirements. For more information, see “Item 10.D. Exchange Controls.”
Unless otherwise indicated, the regulations explained in this section are applied to financial information of the banks calculated
in accordance with Central Bank rules. IFRS differs in certain significant respects from Central Bank rules.
Capital Conservation Buffer
Central Bank rules also establish that financial entities shall maintain a capital conservation margin in addition to the minimum
capital requirements in order to ensure the accrual of owned resources to cope with eventual losses, reducing the non-compliance risk.
Financial entities considered D-SIBs or globally systemically important (“G-SIBs”), must have a capital level that permits a
greater capacity for loss absorption, by virtue of negative externalities that the effects of insolvency of such entities or their foreign
holdings could create in the financial system and the economy.
The conservation capital margin shall be 2.5% of the amount of RWA. In cases of entities considered systemically important,
the margin will be increased to 3.5% of the amount of capital risk weighted assets. These margins can be increased once again, according
to the counter-cycle margin. The conservation capital margin, increased in the case of entities considered systemically important, must
be integrated exclusively with Common Equity Tier 1 (COn1), net from deductible concepts (CDCOn1).
When such margin is used, the entities must raise capital with new capital contributions, or reduce future distributions.
The dividend distribution shall be limited whenever the level and composition of the computable asset liability, even when it
complies with the minimum capital requirements, is within the range of the capital conservation margin. This limitation reaches solely
the dividend distribution, but not the operation of the entity. Entities shall be able to operate normally when levels of Con1 are within
the range of conservation margin. When the coefficient of Common Equity Tier 1 (Con1 as percentage of RWA) is within the range of
margins conservation of capital, the restriction to the results distribution shall be increased whenever the coefficient of Con1 comes
close to the minimum required in section 8.5.1 of regulations over “Minimum Capital for Financial Entities.” The following table shows
the maximum percentages of dividend distribution, according to the compliance with the conservation margin presented:
Coefficient of Common Equity Tier 1 (COn1) net of deductions
(CDcon1) – as percentage of RWA -
Financial Entities – That are not categorized as
D-SIBs or G-SIBs-
4.5 – 5.13
> 5.13 – 5.75
> 5.75 – 6.38
> 6.38 – 7.0
> 7
D-SIBs and G-SIBs Financial
Entities
4.5 – 5.38
> 5.38 – 6.25
>6.25 – 7.13
> 7.13 – 8
> 8
Minimum coefficient of capital conservation – as
percentage of dividend distribution -
100
80
60
40
0
Currently, the minimum limits required by the regulations are:
• COn1/RWA: 4.5%
• NWb/RWA: 6.0%
• RPC/RWA: 8.0%
COn1 must be used in the first place to satisfy the minimum capital requirement of 4.5% of RWA. Subsequently, and in the
event the total does not have enough Additional Tier 1 (CAn1) or Tier 2 Capital (PNc), the COn1 shall also be applied to meet
requirements of 6% and 8% of Tier 1 Capital and total capital. Only the remaining COn1, if any, can be computed to satisfy the applicable
conservation margin, increased in function of the counter-cycle margin, if applicable.
70
Any entity that desires to exceed the dividend distribution limits shall finance this distribution by new contributions of COn1
in the excess amount.
The Central Bank also establishes the counter-cycle margin in order to allow the financial entities’ capital levels to correspond
to the accumulative systematic risk associated with an excessive credit expansion and the macro-financial context. When the Central
Bank considers that the credit growth is excessive, creating an increase in systematic risk, it can establish, with a twelve-month advanced
notice, the obligation to constitute a counter-cycle margin within a range of 0% to 2.5% of RWA. This margin can be reduced or
cancelled by the Central Bank when it considers that the systematic risk has been diminished.
Financial entities with international activity shall consider the geographic location of their credit exposure with local and foreign
residents of the private sector and calculate the counter-cycle margin as the mean between the required margins in foreign jurisdictions.
This includes all credit exposure to private sectors subject to the requirement of credit risk capital.
In order to determine which jurisdiction corresponds to each exposure, the principle of ultimate risk shall be applied. Pursuant
to this principle, one must identify the jurisdiction where the guarantor of the risk resides. The counter-cycle margin shall be observed
by means of an increase in the conservation capital margin and shall be satisfied exclusively with Common Equity Tier 1, net of
deductible concepts (CDCOn1).
Credit Risk
The minimum capital requirement in respect of counterparty risk (“CRC”) shall be calculated with the items included, which
must be computed on the basis of the balances as of the last day of each month (capital, interests, premiums, restatements by the
Benchmark Stabilization Ratio (Coeficiente de Estabilización de Referencia or “CER”) published by the Central Bank and price
differences, as appropriate, net of the non-recoverability and devaluation risks provisions and of accumulated depreciation and
amortization attributable to them and other regularizing accounts, without deducting 100% of the minimum amount required for the
non-recoverability risk provision in the portfolio corresponding to debtors classified as in a “Normal Situation” – points 6.5.1 and 7.2.1
of the rules on “Classification of Debtors”- and financings secured by preferential guarantees “A”).
The minimum capital requirement in respect of counterparty risk must be calculated applying the following equation:
CRC = (k x 0.08 x RWAc) + INC
Variable “k”: Minimum capital requirements also depend on the CAMELBIG rating (1 is the strongest, 5 is the weakest)
assigned by the Superintendency, which also determines the “k” value. This rating system complies with international standards and
provides a broad definition of the performance, risks and perspectives of financial entities. Financial entities have to adjust their capital
requirements according to the following “k” factors:
CAMELBIG Rating
1
2
3
4
5
K Factor
1.00
1.03
1.08
1.13
1.19
For the purposes of the calculation of the capital requirement, the rating will be that of the third month after the month of the
most recent rating informed to the entity. For so long as no notice is given, the “k” factor will be equal to 1.03.
RWAc: stands for capital risk weighted assets, calculated by applying the following formula:
A * p + PFB * CCF * p + no DvP+ (DVP + RCD + INC significant holding in other companies) * 12.50
Where:
Variable “A” refers to eligible assets/exposures;
71
“PFB” are eligible items which are not registered on the balance sheet;
“CCF” the conversion credit factor; and
“p” refers to the weighting factor, expressed on a per unit basis.
“DvP” refers to failed delivery against payment transactions (for purposes of these rules, failed payment against payment (PvP)
transactions are also included). The amount is determined by the addition of the amounts arrived at by multiplying the current positive
exposure by the applicable capital requirement.
In addition, “no DvP” refers to transactions that do not involve delivery against payment. The amount is determined by the
addition of the amounts arrived at by applying the weighting factor (p) on the relevant transactions.
“RCD” refers to requirements for counterparty risk in OTC transactions.
“INC” incremental minimum capital requirements based on any excess in the fixed assets and other ratios, the limitations
established under the “Major Exposure to Credit Risk Regulations.”
“INC(investments in companies)” means the incremental minimum capital requirements based on any excess over the
following limits:
•
•
equity interest held in companies: 15%
total equity interests held in companies: 60%
The established maximum limits will be applied on the financial entity’s computable regulatory capital for the last day before
the relevant date, as prescribed in the rules on “Credit Risk Fractioning.”
Each type of asset is weighted according to the level of risk assumed to be associated with it. In broad terms, the weights
assigned to the different types of assets are:
Type of Asset
Availabilities
Weighting (%)
Cash held in treasury, in transit (when the financial institution assumes responsibility and risk for transportation), in ATMs,
in checking accounts and in special accounts with the Central Bank and payment orders in charge of the BCRA, gold coins or
in “good delivery” bars, in the latter case bearing the stamp of any of the refining smelting, assaying, ex-assaying and ex-
smelting companies included in the list published by the BCRA
Cash items in the process of collection (checks and drafts for collection), cash in armored cars and in custody at financial
institutions
Exposure to governments and central banks
To the Central Bank denominated and funded in Pesos
To the National Government and to the provincial and municipal governments and the Autonomous City of Buenos Aires in
pesos, when their source of funds is in that currency.
To the public non-financial sector arising from financing granted to social security beneficiaries or public employees -in both
cases with discount code-, to the extent that such transactions are denominated in pesos, the source of funds is in that
currency and the installments of all the entity's financing with a periodic amortization system do not exceed, at the time of the
agreements, thirty percent (30%) of the debtor's income and/or, as the case may be, of the co-debtors.
To the non-financial public sector and the Central Bank. Other
- AAA to AA-
- A+ to A-
- BBB+ to BBB-
- BB+ to B-
- Below B-
- Unrated
To other sovereign states of their central banks
- AAA to AA-
- A+ to A-
- BBB+ to BBB-
0
20
0
0
0
0
20
50
100
150
100
0
20
50
72
Type of Asset
- BB+ to B-
- Below B-
- Unrated
Entities of the non-financial public sector from other sovereigns, pursuant to the credit rating assigned to the respective
sovereign
- AAA to AA-
- A+ to A-
- BBB+ to BBB-
- BB+ to B-
- Below B-
- Unrated
To the Bank for International Settlements, the IMF, the European Central Bank and the European Community
To the non-financial public sector of the provinces, municipalities and/or the Autonomous City of Buenos Aires arising from
the acquisition of sovereign bonds issued in Pesos by the central administration, when they do not have any one of the
guarantees described in the regulations on “Financing to Non-Financial Public Sector”, pursuant to the credit rating assigned
to the respective jurisdiction.
- AAA to AA-
- A+ to A-
- BBB+ to BBB-
- BB+ to B-
- Below B-
- Unrated
Exposure to the Multilateral Development Banks (MDB)
Exposure to the following entities: International Bank for Reconstruction and Development (IBRD), International Finance
Corporation (IFC), Asian Development Bank (ADB), African Development Bank (AFDB), European Bank for
Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), European Investment Bank (EIB),
European Investment Fund (EIF), Nordic Investment Bank (NIB), Caribbean Development Bank (CDB), Islamic
Development Bank (IDB), International Finance Facility for Immunization (IFFI), Multilateral Investment Guarantee Agency
(MIGA) and Council of Europe Development Bank (CEB).
Other
- AAA to AA-
- A+ to A-
- BBB+ to BBB-
- BB+ to B-
- Below B-
- Unrated
Exposure to local financial institutions
Denominated and funded in Pesos arising from transactions with an initial contractual term of up to 3 months
Other. The weighting percentage to be applied will be the one for one category less favorable than the one assigned to the
exposures with the Argentine government in foreign currency, as provided for the Exposure to the public non-financial sector
and the Central Bank, with a maximum of 100%, except that the grade was less than B-, in which case the weighting
percentage will be 150%
Exposure to foreign financial institutions, pursuant to the credit rating assigned to the sovereign of their jurisdiction of
incorporation
- AAA to AA-
- A+ to A-
- BBB+ to BBB-
- BB+ to B-
- Below B-
- Unrated
Exposure to companies and other legal entities in the country and abroad, including exchange institutions, insurance
companies, stock exchange entities and companies in the country that are treated as non-financial private sector according
to Section 1 of the rules on "Non-financial public sector financing", except for equity investments.
Exposures included in the retail portfolio
Loans to individuals (provided that installments of loans granted by the institution do not exceed, at the time of the
agreements, 30% of borrower’s. Income and/or, if applicable, of the co-debtors) and to Micro, Small- and Medium-Sized
Companies (“SMEs”)
Other
Exposures guaranteed by reciprocal guaranty companies (sociedades de garantía recíproca) or public security funds
registered with the registries authorized by the Central Bank
73
Weighting (%)
100
150
100
20
50
100
100
150
100
0
20
50
100
150
200
200
0
20
50
50
100
150
50
20
20
50
100
100
150
100
100
75
100
50
Type of Asset
First mortgage loans on residential property or mortgage loans with any order of preference provided that the institution
remains the creditor, irrespective of the order of preference, to the extent that the debt balance under no circumstances
exceeds the valuation price of the mortgaged property
If credit facility does not exceed 75% of the appraised value of such real property
- Sole, permanently-occupied family home
- Other
On the amount exceeding 75% of the appraised value of such real property
First mortgage loans on other than residential property or mortgage loans with any order of preference provided that the
institution is also the creditor of senior loans
Up to 50% of the lower of the real property market value or 60% of the mortgage loan
On the remaining portion of the loan
Past due loans over 90 days
Weighting varies according to the loan and specific provisions Created
Equity holdings
Securitización exposures, failed DvP transactions, non DvP transaction, exposures to central counterparty institutions
(CCP) and derivative transaction not included in said exposures receive a special treatment.
Non failed spot transactions to be settled
Exposures to individuals or companies originated in credit card purchases made in installments of travel tickets to foreign
destinations and other touristic services abroad (lodging, car rental), either made directly to the service provider or through
a travel agency or web platform
Other assets and off-balance categories
* They receive a special treatment.
Weighting (%)
35
50
100
50
100
50-150
150
0
1250
100
Excluded items include: (a) securities granted for the benefit of the Central Bank for direct obligations; (b) deductible assets
pursuant to RPC regulations and (c) financings and securities granted by branches or local subsidiaries of foreign financial entities by
order and on account of their headquarters of foreign branches or the foreign controlling entity, to the extent: (i) the rules of the
country where the parent company or controlling entity is located, the latter defined according to the provisions in force in that
jurisdiction, must cover the supervision on a consolidated basis of the local branches or subsidiaries, (ii) the entity must comply with
the provisions of item 3.1. of the rules on “Credit Evaluations,” requiring for such purpose an international risk rating within the
investment grade category; (iii) in the case of financing, such financing must be provided by the local branches or subsidiaries only
with funds from lines of credit assigned to them by the aforementioned foreign intermediaries (if the assistance is granted in a
currency other than that of the foreign resources, the local entity may not assume the exchange risk); and (iv) in the case of guarantees
granted locally, they are in turn guaranteed by their foreign branch headquarters or the foreign controlling entity and foreclosure on
such guaranty may be carried out immediately and at the sole requirement of the local entity.
Credit Risk Regulation – Large Exposures
General Overview
Communication “A” 6599 of the Central Bank, as amended and restated by Communication “A” 6620, effective as of January 1,
2019, abrogated credit risk fractioning regulations (except for the provisions related to the non-financial public sector), and replaced the
former regime by regulating “large exposures to credit risk.” The system seeks to limit the maximum loss that a financial entity may
suffer upon the occurrence of an unexpected default of a counterparty or group of connected counterparties who do not belong to the
non-financial public sector, therefore affecting its solvency. The regulations regarding the exposures to credit risk must be applied at all
times with every counterparty of the entity.
In this regard, the regulations have established the concept of group of connected counterparties, which applies to all cases in
which one of the counterparties of a financial entity have direct or indirect control over the rest or in those cases in which financial
difficulties experimented by one of the counterparties causes a strong likelihood that its subsidiaries may struggle financially as well.
According to the regulation, upon the detection of the existence of a group of connected counterparties by the financial entity, such
group shall be considered as a single counterparty and the sum of the exposures to credit risk that a financial entity possesses with all
the individual counterparties comprehended in that group shall be subject to the information and disclosure requirements provided in
section 2.
One of the main aspects of Communication “A” 6620 is the introduction of the concept of large exposure to credit risk in
Argentine banking regulations, which is defined as the sum of all values of exposure of a financial entity with a counterparty or group
74
of connected counterparties when it is equal or above 10% of the Tier 1 Capital registered by the financial entity the immediately
preceding month of its calculation.
However, the determination of the values of exposure to risk recognize the following exceptions:
•
Intraday interbank exposures;
• Exposures of financial entities with qualifying central counterparties, as defined by the Central Bank rules on
minimum capital;
• Exposures with the Central Bank; and
• Exposures with the Argentine non-financial public sector.
Regarding the information regime, the Central Bank has established that the financial entities shall inform the Superintendency
of all the values of exposure to credit risk before and after the application of mitigation techniques, detailing:
• Exposures to risk with a value equal or above 10% of Tier 1 Capital of the financial entity;
• Every other exposure to risk which value is equal or above 10% of the Tier 1 Capital of the financial entity, without
applying credit risk mitigation techniques;
• Excluded exposures to risk which values are equal or above 10% of the financial entity’s Tier 1 Capital; and
• The financial entity’s 20 largest applicable exposures to risk, regardless of its value in relation with the financial
entity’s Tier 1 Capital.
Limits
On the one hand, Communication “A” 6620 sets at 15% the limit of exposure with a counterpart of the non-financial private
sector. Nevertheless, the limit will be increased by 10 percentage points for the part of the exposures that are covered by preferred
collaterals. Additionally, it sets special limits for operating with financial institutions in Argentina and abroad (the general rule sets it at
25%). In the case of foreign financial institutions that do not have an international risk rating included in the “investment grade” category,
the maximum limit is 5%.
On the other hand, Communication “A” 6620 sets the global limit of exposure to risk with respect to affiliate counterparties at
20%. In the case of stock held in an investment portfolio, the sum of all the values of exposure to risk corresponding to the total stocks
not related to the portfolio shall not exceed 15% (holdings in public services companies or companies dedicated to complementary
services to financial activities are excluded). The total limit of stocks and holdings shall be the sum of all the values of exposure to risk
corresponding to the total amount of stock in an investment or negotiation portfolio plus the credits for forward operations and sureties
entered into in authorized Argentine markets shall not exceed 50%.
Minimum controls to exposures of affiliates
The regulations set forth three stages for the control of the financial entity’s affiliates exposure:
(1)
Reports for the entity’s management:
• Report by the CEO;
• Report by the supervisory committee; and
• Acknowledgment of the reports by the entity’s management.
75
(2)
(3)
Evidence of the affiliation to the financial entity: the personnel responsible for the analysis and resolution of the credit
operations shall expressly register whether or not the client is affiliated with the financial entity.
Affidavit evidencing affiliation: affiliated clients shall file an affidavit stating if they belong to the lending entity or if
its relationship with such entity implies the existence of a controlling influence.
Interest Rate Risk
Until January 1, 2013, financial entities had to comply with minimum capital requirements regarding interest rate risk. These
requirements were intended to capture the sensitivity of assets and liabilities to changes in the interest rates. Communication “A” 5369
removed all rules and regulations regarding minimum capital requirements for interest rate risk. Notwithstanding this change, financial
entities must continue to calculate the interest rate risk and remain subject to the Superintendency’s supervision. Communication “A”
6534, dated July 3, 2018 established that the interest rare risk shall be measured through the calculation of the Investment Portfolio
Interest Rate (RTICI).
Market Risk
Overall capital requirements in relation to market risk are based on the sum of the five amounts of capital necessary to cover
the risks arising from each category of assets. Market risk is defined as the possibility of incurring losses in on- and off-balance sheet
recorded positions as a result of adverse changes in market prices. The market risk minimum capital requirement is the arithmetic sum
of the minimum capital requirement for interest rate (trading portfolio), stock (trading portfolio), exchange rate, commodities and options
risks (trading portfolio). To meet this capital requirement, entities must apply a “Standard Measurement Method” based on an aggregate
of components that separately capture the specific and general market risks for securities positions.
General considerations. Risks subject to this minimum capital requirement include risks derived from positions in
instruments – such as securities and derivatives – recorded as part of the trading portfolio, and risks from foreign currency and
commodities positions recorded, indistinctly, as part of the investment or trading portfolio. For the purpose of the above accounting
recording, the trading portfolio of financial entities comprises positions in financial instruments included among an entity’s assets for
purposes of trading or of providing hedging to other items contained in the portfolio. Pursuant to Communication “A” 6690, as amended,
a financial instrument may be accounted for as part of the trading portfolio – for purposes of meeting the minimum capital requirement
for market risk – if such instrument may be traded free from any restriction or if the instrument may be hedged in full. Also, the portfolio
must be actively managed, and its positions must be valued on a daily basis and with the required accuracy. Positions kept for trading
purposes are those positions that the entity intends to sell in the short term or from which it intends to derive a profit as a result of
changes, either actual or expected, in short-term prices, or by means of arbitrage activities. They include both positions that the entities
keep for their own use and those they purchase in the course of services performed for customers or “market making’ activities.”
Financial entities must calculate the minimum capital requirement for the counterparty credit risk involved in OTC transactions
involving derivatives and securities financing transactions, such as repo transactions (repo agreements), recorded as part of the trading
portfolio on a separate and additional basis to the calculation of capital requirements for general market risk and specific market risk of
the underlying securities. For this purpose, entities will be required to apply the methods and weighting factors usually applicable when
those transactions are recorded as part of the investment portfolio. Entities must have clearly defined policies and procedures in place,
designed to determine the exposures that are to be included into or excluded from the trading portfolio in order to calculate their minimum
capital requirement for market risk. On the other hand, the investment portfolio will include all securities held by the entity which are
not included in the trading portfolio.
The minimum capital requirement for exchange rate risk will apply to the total position in each foreign currency. The minimum
capital requirement for securities will be computed in respect of the instruments accounted for as part of the trading portfolio, which
must be valued prudently (marked to market or marked to model). Instruments whose yield is determined in relation to CER must be
considered fixed-rate securities. Whether recorded as part of the trading or of the investment portfolio, items to be deducted for purposes
of calculating the RPC will be excluded from the calculation of the market risk minimum capital requirement.
Minimum capital requirement for interest rate risk. The minimum capital requirement for interest rate risk must be calculated
in respect of any debt securities and other instruments accounted for as part of the trading portfolio, including any non-convertible
preferred shares. This capital requirement is calculated by adding two separately calculated requirements: first, the specific risk involved
in each instrument, either a short or a long position, and second, the general market risk related to the effect of interest rate changes on
the portfolio. A set off of the long and short positions held in different instruments will be allowed.
76
Minimum capital requirement for positions in stock. The capital requirement for the risk of holding equity positions in the
trading portfolio applies to both long and short positions in ordinary shares, convertible debt securities that function like shares and any
call or put options for shares, as well as any other instrument with a market behavior similar to that of shares, excluding non-convertible
preferred shares, which are subject to the minimum capital requirement for interest rate described in the preceding paragraph. Long and
short positions in the same security may be computed on a net basis.
Minimum capital requirement for exchange rate risk. The capital requirement for exchange rate risk establishes the minimum
capital required to hedge the risk involved in maintaining positions in foreign currency, including gold. To calculate the capital
requirement for exchange rate risk, entities must first quantify its exposure in each currency, and then estimate the risks inherent in the
combination of long and short positions in different currencies.
Minimum capital requirement for commodities risk. The capital requirement for commodities risk establishes the minimum
capital required to hedge the risk involved in maintaining positions in commodities – but gold. The calculation of the capital requirement
shall express every commodity position in terms of the standard measure unity, and following the rules set forth in Communication “A”
6690, as amended.
Minimum capital requirement for positions in options. The calculation of the capital requirement for the risk involved in
positions in options may be based on the “simplified method” set forth in Communication “A” 6690, as amended, if the entity only
purchases options; provided that the market value of all the options in its portfolio does not exceed 5% of the entity’s RPC for the
previous month, or if its positions in sold options are hedged by long positions in options pursuant to exactly the same contractual terms.
In all other cases, the entity must use the alternative “delta plus” method, provided for in the regulation.
Consequences of a Failure to Meet Minimum Capital Requirements
In the event of non-compliance with capital requirements by an existing financial institution, Central Bank Communication
“A” 6091, as amended, provides the following:
(i)
(ii)
non-compliance reported by the institutions: the institution must meet the required capital no later than the end of the
second month after the date of non-compliance or submit a restructuring plan within thirty (30) calendar days after
the end of the month in which such non-compliance was reported. In addition, non-compliance with minimum capital
requirements will entail a number of consequences for the financial institution, including a prohibition to open
branches in Argentina or in other countries, establish representative offices abroad, or own equity in foreign financial
institutions, as well as a prohibition to pay cash dividends. Moreover, the Superintendency may appoint a
representative, who shall have the powers set forth by the FIL.
Non-compliance detected by the Superintendency: the institution may challenge the non-compliance determination
within thirty (30) calendar days after being served notice by the Superintendency. If no challenge is made, or if the
defense is dismissed, the non-compliance determination will be deemed to be final and the procedure described in the
previous item will apply.
Furthermore, pursuant to the rules which regulate financial entities’ minimum capital, as amended, if a financial institution
fails to meet market risk daily minimum capital requirements, except for any failure to meet the requirements on the last day of
the month, calculated as a sum of VaR of included assets or derived from the calculation of capital requirements for interest rate,
exchange rate and stock risks the financial institution must replace its capital or decrease its financial position until such requirement is
met, and has up to ten (10) business days from the first day on which the requirement was not met to meet the requirement. If the
financial institution fails to meet this requirement after ten (10) business days, it must submit a regularization and reorganization plan
within the following five (5) business days and may become subject to an administrative proceeding initiated by the Superintendency.
Operational Risk
The regulation on Operational Risk (“OR”) recognizes the management of OR as a comprehensive practice separated from that
of other risks, given its importance. OR is defined as the risk of loss resulting from inadequate or failed internal processes, people and
systems or from external events. The definition includes legal risk but excludes strategic and reputational risk.
77
Financial institutions must establish a system for the management of OR that includes policies, processes, procedures and the
structure for their adequate management. This framework must also allow the financial entity to evaluate capital sufficiency.
Seven OR event types are defined, according to internationally accepted criteria:
•
•
•
•
•
•
•
internal fraud;
external fraud;
employment practices and workplace safety;
clients, products and business practices;
damage to physical assets;
business disruption and system failures; and
execution, delivery and process management.
Financial entities are charged with implementing an efficient OR management system following the guidelines provided by the
Central Bank. A solid system for risk management must have a clear assignment of responsibilities within the organization of financial
entities. Thus, the regulation describes the roles prepared by each level of the organization in managing of OR (such as the roles of the
Board of Directors, senior management and the business units of the financial institution).
A financial institution’s size and sophistication, and the nature and complexity of its products and processes, and the extent of
the transaction determines the type of “OR Unit” required. For small institutions, this unit may even consist of a single person. This unit
may functionally respond to the senior management (or similar) or a functional level with risk management decision capacity that reports
to that senior management.
An effective risk management will contribute to prevent future losses derived from operational events. Consequently, financial
entities must manage the OR inherent in their products, activities, processes and systems. The OR management process comprises:
(a)
(b)
(c)
Identification and assessment: the identification process should consider both internal and external factors that could
adversely affect the development of the processes and projections created according to the business strategies defined
by the financial institution. Financial entities should use internal data, establishing a process to register frequency,
severity, categories and other relevant aspects of the OR loss events. This should be complemented with other tools,
such as self-risk assessments, risk mapping and key risk indicators.
Monitoring: an effective monitoring process is necessary for quickly detecting and correcting deficiencies in the
policies, processes and procedures for managing OR. In addition to monitoring operational loss events, banks should
identify forward-looking indicators that enable them to act upon these risks appropriately.
Control and mitigation: financial entities must have an appropriate control system for ensuring compliance with a
documented set of internal policies, which involve periodic reviews (to occur at least annually) of control strategies
and risk mitigation, and adjust these as necessary.
Pursuant to Communication “A” 5282, as amended by Communications “A” 6091 and “A” 7928, among others, the minimum
capital requirements regarding OR are equal to 15% of the annual average positive gross income of the last thirty-six (36) months.
The OR formula is as follow:
78
The variables in the OR formula are defined as follows:
• Cro: the capital requirement for operational risk.
•
•
•
α: 15%.
n: the number of twelve-month consecutive terms with positive IB, based on the 36 months preceding the month of
calculation. The maximum value of n is 3.
IBt: gross income from twelve-month consecutive terms, provided that it is a positive figure, corresponding to the
36 months preceding the month of calculation.
Gross income (ingresos brutos) (“IB,” as per its acronym in Spanish) is defined as the sum of (a) financial and service income
net of financial and service expenses and (b) sundry gains net of sundry losses.
The following items are excluded from items (a) and (b) above:
(i)
expenses derived from the creation or elimination of reserves during previous fiscal years and recovered credits during
the fiscal year that were written off in previous fiscal years;
(ii)
profits or losses from holding equity in other financial institutions or companies, if these were deductible from RPC;
(iii)
(iv)
extraordinary or unusual gains (i.e., those arising from unusual and exceptional events that resulted in gains) including
income from insurance recovery; and
gains from the sale of classified species and measures at amortized cost of fair value with changes in other integral
gains.
New financial institutions must comply, in their first month, with an OR minimum capital requirement equivalent to 10% of
the aggregate requirements determined for credit and market risks, in the latter case, for the positions on the last day of that month. As
from the second and up to the thirty-sixth month, the monthly capital requirement will be equivalent to 10% of the average requirements
determined for the months elapsed until, and including, the calculation period based on a consideration of the risks referred to in the
preceding paragraph, in accordance with the following formula:
For every t-month:
• CRCt: the capital requirement for credit risk.
• RMP,t: the capital requirement for market risk for the last day of such t-month.
•
n: the number of months preceding the month of calculation, inclusive. 2≤ n ≤ 36.
79
From the thirty-seventh month onwards, the monthly requirement is calculated based on the OR formula.
Minimum Cash Reserve Requirements
The minimum cash reserve requirement requires that a financial institution keeps a portion of its deposits or obligations readily
available and not allocated to lending transactions and it is included in the Central Bank “Rules of Minimum Cash,” as amended and
supplemented.
Minimum cash requirements are applicable to demand and time deposits and other liabilities arising from financial
intermediation denominated in Pesos, foreign currency, or government and corporate securities, and any unused balances of advances
in checking accounts under agreements not containing any clauses that permit the bank to discretionally and unilaterally revoke the
possibility of using such balances.
Minimum cash reserve obligations exclude (i) amounts owed to the Central Bank, (ii) amounts owed to domestic financial
institutions (excluding special deposits related to inflows of funds – Decree No. 616/2005), (iii) amounts owed to foreign banks
(including their head offices, entities controlling domestic institutions and their branches) in connection with foreign trade financing
facilities and with multilateral development banks, (iv) cash purchases pending settlement and forward purchases, (v) cash sales pending
settlement and forward sales (whether or not related to repurchase agreements), (vi) overseas correspondent banking operations,
(vii) demand obligations for money orders and transfers from abroad pending settlement to the extent that they do not exceed a seventy-
two (72) business hour term as from their deposit, (viii) demand obligations with business for the sales made by credit card and/or for
the purchase, and (ix) and demand obligations for securities bonds in pesos.
The liabilities subject to these requirements are computed on the basis of the effective principal amount of the transactions,
including differences in rates (either negative or positive), excluding interest accrued, past due, or to become due on the aforementioned
liabilities, provided they were not credited to the account of, or made available to, third parties, and, in the case of fixed -term deposit
of UVA and UVIs (as defined below), the accrued amount resulting from the increment of the value of such unit.
The basis on which the minimum cash reserve requirement is computed is the average of the daily balances of the liabilities:
•
•
registered at the end of each day during the period prior to the one of its integration, in the case the liabilities are
denominated in Pesos; or
registered at the end of each day during the calendar month, in the case of liabilities denominated in foreign currency,
or government and corporate securities.
The averages shall be obtained by dividing the aggregate of the daily balances into the total amount of the days of each period.
Those days in which no movements are registered shall repeat the balance corresponding to the immediately preceding Business Day.
Such requirement shall be complied with on a separate basis for each currency and/or security and/or instrument under monetary
regulation in which the liabilities are denominated.
The table below shows the percentage rates that should be applied to determine the required minimum cash reserve requirement
for financial institutions, depending on whether: (i) the financial entities are included in Group “A,” as provided by Section 4 of the
regulations on “Authorities of financial entities” (Autoridades de entidades financieras), and/or branches or subsidiaries of foreign banks
are classified as systemically important (G-SIB) not included in that group; or (ii) the remaining financial entities. Section 4 of the
regulations on “Authorities of financial entities” of the Central Bank classifies the financial entities in: (a) Group “A” which includes
those entities in which the amount of their assets is greater than or equal to 1% of the total of the assets of the financial system (for the
purposes of calculating this indicator, the average of the assets corresponding to the months of July, August and September of the
previous year will be considered, according to the data that arise from the corresponding information regime) (the “Group “A” Entities”);
(b) Group “B” which includes those entities in which the amount of their assets do not exceed 1% and greater than or equal to 0.25% of
the total of the total of the assets of the financial system (the “Group “B” Entities”); and (c) Group “C” which includes those institutions
whose deposits do no exceed 0.25% of the total of the assets of the financial system (the “Group “C” Entities”). The Bank is classified
as a Group “A” Entity, while IUDÚ is classified as a Group “B” Entity. The following fees arise from Communication “A” 7824:
80
Item
1-
Checking account deposits and demand
deposits opened at credit cooperatives
Savings account, salary/social security
accounts, special accounts (except for
deposits included on items 7 and 11), and
other demand deposits and liabilities,
pension and social security benefits credited
by ANSES pending collection and
immobilized reserve funds for liabilities
covered by these regulations
Unused balances of advances in checking
accounts under executed overdraft
agreements
Deposits in checking accounts of non-bank
financial institutions, computed for purposes
of meeting their required minimum cash
reserve
Time deposits, liabilities under
“acceptances,” (including responsibilities
for sale or transfer of credits to agents
different from financial institutions), stock-
exchange repos (cautions and stock
exchange passive repos), constant-term
investments, with an option for early
termination or for renewal for a specified
term and variable income, and other fixed-
term liabilities, except deposits included in
the following items 7, 10 y 12 of this table,
securities (including negotiable obligations),
according to their outstanding term:
2-
3-
4-
5-
Group A and G-SIB
Remaining Financial Institutions
Pesos
Foreign
Currency
Pesos
Foreign Currency
Rate %
45
20
45
45
100
25
20
20
100
25
23
17
11
5
2
—
(i) Up to 29 days
(ii) From 30 days to 59 days
(iii) From 60 days to 89 days
(iv) From 90 days to 179 days
(v) From 180 days to 365 days
(vi) More than 365 days
25
14
4
—
—
—
23
17
11
5
2
—
11
7
2
—
—
—
81
Item
6-
7-
8-
9-
10-
11-
12-
13-
14-
15.1-
15.2-
Liabilities owed due to foreign facilities (not
including those instrumented by term deposits,
unless they are made by residents abroad linked to
the entity pursuant to Section 2 of the rules on
“Large Exposures to Credit Risk,” nor the
acquisition of debt securities, to which they must
apply the requirements provided in the previous
point)
(i) Up to 29 days
(ii) From 30 days to 59 days
(iii) From 60 days to 89 days
(iv) From 90 days to 179 days
(v) From 180 days to 365 days
(vi) More than 365 days
Demand and time deposits made upon a court order
with funds arising from cases pending before the
court, and the related immobilized balances
(i) Up to 29 days
(ii) From 30 days to 59 days
(iii) From 60 days to 89 days
(iv) More than 90 days
Special deposits related to inflows of funds. Decree
616/2005
Time deposits in nominative, non-transferable Peso-
denominated certificates, belonging to public sector
holders, with the right to demand early withdrawal
in less than 30 days from its setting up
Deposits and term investments —including savings
accounts and securities (including Notes)— in UVIs
and UVAs, according their outstanding term
(i) Up to 29 days
(ii) From 30 days to 59 days
(iii) From 60 days to 89 days
(iv) More than 90 days
Labor Work Fund for Construction Industry
Workers, denominated in UVA
Deposits and fixed term investments created in the
name of minors for funds they receive freely
Deposits in Pesos in demand accounts that
constitute the assets of mutual funds (money
market)
Deposits in special accounts:
In Pesos ("Special accounts for holders with
agricultural activity" and "Special accounts for
exporters").
In U.S. dollars ("Special accounts to credit export
financing").
Rate %
Group A and G-SIB
Remaining Financial Institutions
Pesos
Foreign
Currency
Pesos
Foreign Currency
23
17
11
5
2
—
15
15
15
15
15
100
—
23
17
11
5
2
—
15
15
15
15
100
—
22
14
4
—
25
7
5
3
—
7
—
—
100
—
—
10
7
2
—
11
7
5
3
—
7
—
—
100
—
—
Financial entities included in Group “A” and branches or subsidiaries of G-SIB not included in that group may integrate the
period and daily requirement in Pesos with “National Treasury Bonds in Pesos at a fixed rate due May 23, 2027” and “National Treasury
Bonds in Pesos at a fixed rate due November 23, 2027” in up to:
82
-
-
-
5 percentage points of the rates provided in point 1, point 2 (in Pesos), point 3, point 9, and sections (i) and (ii) of points 5
and 7 (both in Pesos); and
2 percentage points of the rates provided in sections (iii) of points 5 and 7 (both in Pesos).
45 percentage points of the rate described in points 14 (both in Pesos).
Financial entities included in Group “A” and branches or subsidiaries of G-SIB not included in Group “A” may integrate the
period and daily requirement in Pesos with LELIQ, NOBAC and/or national government securities in Pesos, including those by the CER
and with yield in dual currency (dual bond) and excluding those linked to the evolution of the U.S. dollar, with a residual term at the
time of subscription:
-
-
-
-
-
-
-
not less than 180 days and not more than 450 calendar days acquired by primary subscription since June 1, 2021;
not less than 120 days and not more than 450 calendar days acquired by primary subscription since November 1, 2021;
not less than 90 days and not more than 450 calendar days acquired by primary subscription since November 1, 2021;
not less than 90 days and not more than 630 days acquired by primary subscription since September 27, 2022;
not less than 90 days and not more than 730 calendar days acquired by primary subscription as of March 9, 2023;
not less than 90 days and not more than 760 calendar days acquired by primary subscription as of May 29, 2023; and
not less than 90 days and not more than 760 calendar days acquired by primary subscription as of December 20, 2023
which will continue to be computed until their maturity, as long as their integration is maintained.
Communication “A” 7923 provides that banks may integrate the period and daily requirement in Pesos with LELIQ, NOBAC
and/or national government securities in Pesos, including those by the CER and with yield in dual currency (dual bond) and excluding
those linked to the evolution of the U.S. dollar, with a residual term (at the time of subscription) of no less than 300 days and no more
than 730 days from the time of subscription, received in exchange operations arranged by the Argentine government for securities
acquired both by primary subscription and in the secondary market, up to:
- On demand deposits provided for in items 1, 2 and 3 (in Pesos) 4 percentage points of the rate provided for.
- Time deposits and time investments made by holders of the non-financial private and non-financial public sectors and
those provided for in item 11: all the requirement, except for the maximum proportion allowed for integration in “National
Treasury Bonds in Pesos.”
- Term investments with variable remuneration made by clients with agricultural activity -according to item 2.5.2.2.2. of the
rules on “Deposits and term investments”: all the requirement
- Other placements: (a) 9 percentage points of the rates provided in section (i) of point 5 (in Pesos); (b) 7 percentage points
of the rates provided by section (ii) of point 5 (in Pesos); (c) 3 percentage points of the rates provided by sections (i), (ii)
and (iii) of point 10; and (d) 2 percentage points of the rates provided by section (iii) of point 5.
Financial entities not included in the last paragraph in up to:
-
Sight deposits provided for in items 1, 2 and 3 (in Pesos) 10 percentage points of the expected rate; and
- Other placements: (a) 3 percentage points of the rates provided by sections (i) of point 5, and sections (i) to (iii) of point
10; and (b) 2 percentage points of the rates provided in section (ii) of point 5.
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In order to be admitted the integration with “National Treasury Bonds in Pesos at a fixed rate due May 23, 2027,” “National
Treasury Bonds in Pesos at a fixed rate due November 23, 2027,” and national government securities in Pesos, including those adjustable
by the CER and excluding those linked to the evolution of the U.S. dollar, LELIQ and/or NOBAC as described above, they must be
valued at market prices and be deposited in Sub-account 60, minimum cash enabled in the “Central Registry and Settlement of Public
Liabilities and Financial Trusts—CRyL” (Central de Registro y Liquidación de Pasivos Públicos y Fideicomisos Financieros).
The minimum cash requirement will be reduced:
(1)
in accordance with the participation in the total of financing operations to the non-financial private sector in Pesos in
the entity of financing to MiPyMEs in the same currency;
Participation, in the total of financing operations
to MiPyMES with respect of total of financing
operations to the non-financial private sector, in
the institution
Reductions (over
the total of
the concepts included
in Pesos) %
Less than 4
From 4 to less than 6
From 6 to less than 8
From 8 to less than 10
From 10 to less than 12
From 12 to less than 14
From 14 to less than 16
From 16 to less than 18
From 18 to less than 20
From 20 to less than 22
From 22 to less than 24
From 24 to less than 26
26 or more than 26
0
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
Calculations will consider the mobile average balance at the end of the last 12 months prior to the low report of the financings in Pesos
(Loans and Credits for Financial Leases) granted to MiPyMEs in respect of the total of such financings to the non-financial private
sector of the institution.
(1)
Depending on the granting of financing under the “Ahora 12” and “Cuota Simple” programs (the implementation of
the Consumer Promotion Program and the Production of Goods and Services named “Ahora 12” was created by Joint
Resolution 671/2014 and 267/2014 of the former Argentine Ministry of Economy and Public Finance and the
Argentine Ministry of Industry):
(i)
(ii)
whose destination is the acquisition of goods and services included in the aforementioned resolution and its
complementary regulations; or
to non-financial companies issuing credit cards at an annual interest rate of up to 17%, insofar as these
companies are part of the “Ahora 12” Program.
Effective from March 1, 2020, Communication “A” 6916, as amended, increased the requirement for the granting of
financing under the “Ahora 12” Program from 20% to 35% of the aggregate financings in Pesos granted by the relevant
institution until September 30, 2020, to 50% of such aggregate financings in Pesos granted from October 1, 2020 to
January 1, 2022, and to 40% of such aggregate financings in Pesos granted from February 1, 2022. Additionally,
effective as of March 19, 2020, Communication “ A” 6937 set the limit of the deduction at 6% of the items in Pesos
subject to the Central Bank rules of Minimum Cash. Effective as of July 29, 2021, this limit was increased to 8% of
the items in Pesos subject to the Central Bank rules of Minimum Cash. Communication “A” 7047 sets forth that for
those financial entities that are members of the “Ahora 12” Program, the requirement will be reduced by an amount
equivalent to 35% of the aggregate financings in Pesos granted by the relevant institution, and sets forth the limit of
the deduction at 6% of the items in Pesos subject to the Central Bank rules on Minimum Cash. This limit is still in
force and has not been modified.
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(2)
(3)
For those financial entities adhered to the “Cuota Simple” Program established by Resolution No. 7/24 of the Ministry
of Economy and its complementary rules, the requirement will be reduced by an amount equivalent to 30% of the
amounts of the financing in pesos granted by the entity within the framework of that program.
In the case of financings included in the rules on “Line of financings for the productive investments of SMEs,” the
requirement will be reduced by an amount equivalent to 40% of the financings foreseen in point 4.1. of such line of
credits, provided such financings are agreed at an annual nominal interest rate of up to the interest rate set forth in
section 5.1.1 of such rules, measured on a monthly average of daily balances from the previous month.
For financial entities that have implemented the remote and face-to-face opening of the “Universal Free Account
(CGU)” provided for in item 3.11. of the rules on “Savings, salary and special deposits,” the requirement will be
reduced by an amount equivalent to the financing in Pesos granted as from April 1, 2021 to individuals and SMEs
which have not been reported by financial entities in the Central Bank’s Credit Registry (Central de Deudores del
Banco Central) as of December 2020, provided that (i) such financings have been agreed at an annual nominal interest
rate that does not exceed the maximum rate established in the first paragraph of point 2.1.1 or in point 2.1.2 of the
Central Bank’s rules on interest rates in credit operations, and (ii) such interest rate does not exceed the maximum rate
established in the first paragraph of point 2.1.1 of the Central Bank’s rules on interest rates in credit operations
applicable to Group “A” Entities, Group “B” Entities, and branches or subsidiaries of G-SIBs not included in those
groups, and regardless of the amount of the financing, or the rate applicable to the rest of the financial entities pursuant
to point 2.1.2 of the Central Bank’s rules on interest rates in credit operations. The requirement will be reduced by an
amount equivalent to 50% of the financing in Pesos granted as from March 1, 2024 to individuals and SMEs that have
not been reported by financial entities in the Register of Financial System Debtors as of December 2023. This
deduction may not exceed 3% of the items in Pesos subject to requirement on average of the month prior to the month
of integration. The monthly average balance of the financings reached in the period prior to the integration of the
requirement shall be considered. In September and March of each year, institutions must consider the information
published in the Register of Financial System Debtors as of the previous June and December, respectively. The
residual balances of the financings in Pesos granted until February 29, 2024, will continue to be computed as a
reduction of the minimum cash requirement in Pesos until their maturity.
(4)
Pursuant to Communication “A” 7661, the validity of this reduction was extended from January 1, 2023 to July 30,
2023.
Depending on the cash withdrawals made through institution ATMs. The requirement will be reduced by the amount
calculated on the basis of the monthly average of total daily cash withdrawals from ATMs, corresponding to the
prior month, located in the institution’s operational houses, according to the jurisdiction in which is located, in
accordance with the provisions of the “Locations for Financial Institutions Categorization Rules.”
For this purpose, the included ATMs are those that – at least – allow users to make cash withdrawals regardless of the
institution in which they are customers and the network managing such equipment and that –on a monthly average,
computing business and non-business days – have remained accessible to the public for at least ten hours a day.
Pursuant to Communication “A” 7795, from July 1, 2023, this reduction is applicable to cash withdrawals made at
ATMs located in localities included in categories III to VI, as established in the rules on categorization of localities
for financial entities.
(5)
Pursuant to Communication “A” 7616:
(6.1)
In the case of financial entities included in Group “A,” the requirement will be reduced by an amount
equivalent to the 30% of the aggregate of all financing in Pesos to MiPyMEs – in accordance with the
definition contained in the “Determination of the Status of Micro, Small or Medium-Sized Enterprises
Rules”- agreed at a maximum interest of:
(a)
40% fixed nominal per annum until and including February 16, 2020 (which may continue to be
counted until its termination).
(b)
35% fixed nominal per annum from February 17, 2020.
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For this purpose, the average monthly balance of the financings granted the period before the requirement
was calculated that meets the above conditions shall be included. This deduction may not exceed 2% of the
items in Pesos subject to the requirement, on average, of the month prior to the calculation.
The financings calculated for this item 4 deduction cannot be included for the determination of the item 1
above deduction.
(6.2)
In accordance with the special treatment provided for financings under Decree No. 260/2020. The
requirement will be reduced by an amount equivalent to 40% of the sum of the financings in Pesos agreed to
an annual rate of up to 24% with the following objectives:
(c)
(d)
(e)
MiPyMEs if at least 50% of such financings are allocated to working capital.
Providers of human health services if they provide hospitalization in the framework of the health
emergency as provided by Decree No. 260/2020.
Non-MiPyMEs clients that agree such financings for the acquisition of machines and equipment
produced by local MiPyMEs.
This deduction may not exceed 4% of the concepts in Pesos subject to demand on average of the month
immediately previous of the month of computation, and can be extended up to 6% in the case of the following
financings agreed as from July 1, 2020:
-
-
Clients that received the assistance provided for in point (5) a. above, up to the total amount
equivalent to the monthly wage bill (without the supplementary annual salary) to be paid by the
applicant;
Clients that did not received such special assistance.
(6.3)
In accordance with the special treatment provided for under Decree No. 332/2020. The requirement will be
reduced by an amount equivalent to:
(f)
(g)
(h)
60% of the amount of the “Zero Interest-Rate Credits,” “Loans at Subsidized Rate for Companies”
and “Zero Interest-Rate Culture Credits” agreed under the framework of Decree No. 322/2020 (as
amended) and disbursed until November 5, 2020;
24% of the “Loans at Subsidized Rate for Companies” disbursed until November 6, 2020, at a
nominal annual rate of 27%;
7% of the “Loans at Subsidized Rate for Companies” disbursed as of November 6, 2020 at a nominal
annual rate of 33%.
(6.4)
In the case of financings to MiPyMEs not informed at the Financial System’s Debtors Center (Central de
Deudores del Sistema Financiero), the requirement will be reduced by an amount equivalent to 40% of the
financings in Pesos to MiPyMEs agreed at a nominal annual rate of 24% measured on a monthly average of
daily balances from the previous month.
The financings computed for the deduction provided in points 1, 3, 4, 6.1, 6.2 and 6.4 can only be computed in one of the
abovementioned points.
Whenever there is an excessive concentration of liabilities (in holders and/or terms), which implies a significant risk with
respect to the individual liquidity of the financial institution and/or has a significant negative effect on the systemic liquidity, additional
minimum cash may be set on the liabilities included in the financial entity and/or those complementary measures that are deemed
pertinent.
Likewise, the minimum cash requirement may be increased due to non-compliance with the rules on the “Credit Line for
productive investment.”
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In addition to the abovementioned requirements, the reserve for any defect in the application of resources in foreign currency
net of the balances of cash in the entities, in custody in other entities, in transit and in Transporters of Securities, for a certain month,
shall be applied to an amount equal to the minimum cash requirement of the corresponding currency for each month.
The minimum cash reserve must be set up in the same currency or securities or debt instruments for monetary regulation to
which the requirement applies, and may include the following:
(1)
(2)
(3)
(4)
(5)
(6)
Accounts maintained by financial institutions with the Central Bank in Pesos.
Accounts of minimum cash maintained by financial institutions with the Central Bank in U.S. dollars, or other foreign
currency.
Special guarantee accounts for the benefit of electronic clearing houses and to cover settlement of credit card,
vouchers, and ATM transactions and immediate transfer funds.
Checking accounts maintained by non-bank financial institutions with commercial banks for the purpose of meeting
the minimum reserve requirement.
Special accounts maintained with the Central Bank for transactions involving social security payments by the ANSES.
Minimum cash sub-account 60, authorized in the Registration and Settlement Central for Public Debt and Financial
Trusts – CRYL (“Central de Registro y Liquidación de Pasivos Públicos y Fideicomisos Financieros – CRYL”) for
public securities and securities issued by the Central Bank at their market value.
These eligible items are subject to review by the Central Bank and may be changed in the future.
Compliance with the minimum cash reserve requirement will be measured on the basis of the monthly average of the daily
balances of eligible items maintained during the period to which the minimum cash reserve refers by dividing the aggregate of such
balances by the total number of days in the relevant period. The compensation of deficit positions with surplus positions corresponding
to different requirements will not be accepted.
The aggregate balances of the eligible items referred to above, maintained as of each daily closing, may not, on any one day
during the period, be less than 25% of the total required cash reserve, determined for the next preceding period, recalculated on the basis
of the requirements and items in force in the month to which the cash reserves relate, without considering the effects of the application
of the provisions of section “1.7 Transfers” of the “Minimum Cash” rules. The daily minimum required is 50% when a deficit to the
admitted transfer margin occurs in the previous period.
Any deficiencies in meeting the required minimum cash reserve and the daily minimum reserve in Pesos, in foreign currency,
or securities or debt instruments for monetary regulation are subject to a penalty in Pesos, equal to 1.5 times the rate of the monetary
policy published on the last business day of the relevant period or, if not available, the last one available.
LELIQ Global Daily Position
Pursuant to Section 8 “net position in LELIQ and NOTALIQ” of the Central Bank rules “Cash settled and forward transactions,
futures, bonds, surety bonds, other derivatives and mutual funds,” financial institutions may maintain a net position in short term LELIQ
global including those effectively imputed to integrate the minimum cash requirement in Pesos pursuant to sections 1.3.7.1. and 1.3.17.
of the Central Bank rules “Rules of Minimum Cash,” up to an amount equivalent to the average daily balance of time deposits in Pesos
of the previous period.
Financial institutions that have a percentage of time deposits in Pesos in relation to the total deposits in Pesos by such sector
(measured as a monthly average of daily balances of the previous period, considering only capital without interest or adjustments)
equal to or higher than 20% may maintain a joint positive net position of longer term LELIQ and variable rate Liquidity Notes
(NOTALIQ).
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Since the new administration took office, the Central Bank ceased to issue Leliq and Notaliq instruments. The remaining
balances of Leliqs and Notaliqs matured in January 2024 and March 2024, respectively.
Internal Liquidity Policies of Financial Institutions
Liquidity Coverage Ratio
Pursuant to the Central Bank’s regulations on the liquidity coverage ratio (the “LCR”), financial institutions must adopt
management and control policies that ensure the maintenance of reasonable liquidity levels to efficiently manage their deposits and
other financial commitments and must comply with the LCR established thereunder, under a 30-day stress test scenario. Such policies
should establish procedures for evaluating the liquidity of the institutions in the framework of prevailing market conditions to allow
them to revise projections, take steps to eliminate liquidity constraints and obtain sufficient funds, at market terms, to maintain a
reasonable level of assets over the long term. Such policies should also address (i) the concentration of assets and liabilities in specific
customers, (ii) the overall economic situation, likely trends and the impact on credit availability, and (iii) the ability to obtain funds by
selling government debt securities and/or own assets.
The organizational structure of the entity must place a specific unit or person in charge of managing liquidity and assign levels
of responsibility to the individuals who will be responsible for managing the LCR, which will require daily monitoring. The participation
and coordination of the entity’s top management authority (e.g., CEO) will be necessary.
In addition, financial institutions must designate a director or advisor who will receive reports at least weekly, or more
frequently if circumstances so require, such as when changes in liquidity conditions require new courses of action to safeguard the entity.
In the case of branches of foreign financial institutions the reports must be delivered to the highest authority in the country.
Appointed officers and managers will be responsible for managing the liquidity policy that, in addition to monitoring the LCR,
includes taking the necessary steps to comply with minimum cash requirements.
Financial institutions must report the list of such officers and directors, as well as any subsequent changes, to the
Superintendency within ten (10) calendar days from the date of any such change.
Liquidity Parameters
In addition to the LCR, there are other parameters that are used as systematic tools of control. These policies contain specific
information regarding cash flows, balance structure and available underlying assets free of charge. These parameters, along with the
LCR, offer basic information to evaluate the liquidity risk. The included parameters are:
•
•
•
•
•
gaps in contractual terms;
funding concentration;
available assets free of restrictions;
LCR for relevant currency; and
market-related monitoring tools.
Additionally, Communication “A” 6209, as amended, sets forth that financial institutions must have an adequate stock of high-
quality liquid assets (“HQLA”) free of any restrictions which can be immediately converted into cash in order to cover their liquidity
needs during a period of 30 days in case of a stress scenario. Also, financial institutions must carry out their own stress tests so as to
determine the liquidity level they should maintain in other scenarios, considering a period higher than 30 calendar days.
The LCR must be equal to or greater than 1 (that is to say, the stock of HQLA must not be lower than the total net cash outlays)
in the absence of a financial stress scenario. If this is not the case, the LCR may fall below 1.
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The Central Bank describes how to categorize a stress scenario, taking into account the following: the partial loss of retail
deposits; the partial loss of wholesale non-guaranteed funding capacity; the partial loss of guaranteed funding; additional fund outlays
due to situations contractually provided for as a consequence of a significant decline in the financial institution’s credit quality; market
volatility increases that have an effect on the quality of guarantees or on the potential future exposure of positions in derivatives; the
unforeseen use of credit and liquidity facilities compromised and available but not used that the financial institution may have granted
to its clients; and/or the need that the financial institution may experience to repurchase debt or to comply with non-contractual
obligations so as to mitigate its reputational risk.
The LCR calculation must be made on a permanent basis and informed to the Central Bank on a monthly basis.
The HQLA can only be made up of the following portfolio assets (consider as Tier 1 (An1)) at the day of the calculation. In
order to calculate the LCR, the related assets include, among others, cash in hand, in transit, in armored transportation companies and
ATMs; deposits with the Central Bank; certain national public bonds in Pesos or in foreign currency; securities issued or guaranteed by
the International Payments Bank, the IMF, the European Central Bank, the European Union or Multilateral Development Banks that
comply with certain conditions and debt securities issued by other sovereign entities (or their central banks).
Net Stable Funding Ratio
The purpose of the net stable funding ratio (“NSFR”) is to allow financial institutions to finance their activities with sufficiently
stable sources to mitigate the risk of future stress situations derived from their funding requirements. By requiring financial institutions
to maintain a stable funding profile relative to the breakdown of their off-balance sheetassets and transactions, the NSFR limits the
strong dependence on short term wholesale funding, promotes a better assessment of balance sheet and off-balance sheet items funding
risk, and favors funding sources stability. The definitions of the components of the NSFR are similar to those set forth in the “Liquidity
Coverage Ratio” regulations, unless otherwise expressly set forth herein.
The NSFR is defined as the available amount of stable funding relative to the required amount of stable funding, where: AASF
(Available Amount of Stable Funding) is the capital and liabilities of the financial institution – calculated in the manner set forth in
Section 2 – that are expected to be available over a one -year term. RASF (Required Amount of Stable Funding) is the amount of funding
necessary for such period – calculated in the manner set forth in Section 3 – based on its liquidity and remaining life of the institution’s
assets and its off-balance sheet obligations.
The NSFR shall be at all times greater than or equal to 1 (NSFR > 1). It shall be supplemented with the assessment made by
the Superintendency. The Superintendency may demand the institution to adopt stricter standards to reflect its funding risk profile, also
taking into account the assessment made in connection with the “Risk Management Guidelines for Financial Institutions” in connection
with the institution’s liquidity.
The Financial Institutions shall observe the NSFR all times and report it on a quarterly basis to the Superintendency.
Leverage Ratio
Pursuant to Communication “A” 6431, effective as of March 1, 2018, the Central Bank incorporated a ratio to limit the leverage
of financial institutions in order to avoid the adverse consequences of an abrupt reduction in leverage in the supply of credit and the
economy in general, and reinforce the minimum capital requirement with a minimum capital requirement simple and not based on risk.
The leverage ratio, which must be greater than or equal to 3%, arises from the following expression:
Ratio (as %) = Measure of capital / Measure of exposure where the measure of capital will be the basic net worth, and the
measure of the exposure will be the sum of (i) the exposures in the asset (excluding the items corresponding to derivatives and Securities
Financing Transactions (SFT)), (ii) exposures by derivatives, (iii) exposures for SFT transactions, and (iv) off-balance-sheet items. Both
measures must be calculated based on the closing balances of each quarter.
89
Interest rate and fee regulations
Maximum lending rates
Communication “A” 7862 sets forth that the maximum interest rate applicable to credit card transactions shall not exceed a
nominal annual rate of 122% in transactions that do not exceed Ps.200,000. If the transaction amount exceeds Ps.200,000, or if the
transaction amount in foreign currency exceeds U.S.$200, the only limit that applies is the one provided in Article 16 of Law 25,065 on
Credit Cards.
Regulations set forth that the fixed-rate loan agreements shall not contain clauses that allow their modification under certain
circumstances, unless those modifications come from decisions taken by the competent authority and the variable-rate loan contracts
must clearly specify the parameters that will be used for its determination and periodicity of variation.
With respect to transactions linked to credit cards, in addition to the above mentioned, the Article 16 of the Credit Card Law
establishes that:
•
•
in those granted by financial institutions, the rate may not exceed more than 25% of the average of the interest rates
applied by the entity, during the immediately preceding month, weighted by the corresponding amount of personal
loans without in rem security interests granted in the same period;
in those granted by other issuing entities, the rate may not exceed the simple average of the system’s rates for open
market personal loan operations (general customers) by more than 25%, with no in rem security interest, published by
the Central Bank on a monthly basis, prepared on the basis of information corresponding to the second
previous month, taking into account the provisions of the preceding point.
Minimum fixed-term deposit rates
Pursuant to Communication “A” 7491 (as amended by Communication “A” 7561) for financial institutions included in groups
“A” and “B” for purposes of the Central Bank rules on “Minimum Cash,” and for branches or subsidiaries of foreign banks rated as
systemically important (G-SIBs) which are not included in the groups mentioned above, a minimum deposit rate shall apply, which shall
be timely disclosed by the Central Bank, to deposits in Pesos which are not adjustable by “UVA” or “UVI” on behalf of holders of the
non-financial private sector.
During 2023, pursuant to Communication “A” 7949, fixed-term deposits that do not exceed a total of $30 million at the date
of constitution of each fixed-term deposit and that are constituted by individuals in financial institutions had a passive rate of 110% of
the monetary policy rate of the day prior to that in which the impositions were made, or the last one disclosed, as the case may be. In
the case of fixed-term deposits constituted in the name of two or more individuals, the amount of the fixed-term deposit will be
distributed proportionally among its holders.
For fixed-term deposits not included in the preceding paragraph, the deposit rate was 110% of the monetary policy rate of the
day prior to the day on which the deposits are made, or the last one disclosed, as the case may be.
Communication “A” 7978 of the Central Bank established that as from March 12, 2024, the remuneration for time deposits at
fixed rates set forth in point 1.11.1. of the rules on “Time Deposits and Investments” can be freely agreed upon.
Fees
Central Bank regulations grant broad protection to financial services customers since 2013. The protection includes, among
other things, the regulation of fees and commissions charged by financial institutions for services provided. According to Central Bank
rules on “Protection to Financial Services Customers,” fees and charges must represent a real, direct and demonstrable cost and should
be supported by a technical and economic justification. It is worth noting that Section 2.3.2.2 of Central Bank rules on “Protection to
Financial Services Customers” sets forth certain exceptions to the application of fees and charges, such as for insurance services and
SMEs for over-the-counter cash deposits.
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Fees and charges are not applicable for immediate electronic transfers if such transfers are ordered by final customers of
financial services, the individual or entity which orders the transfer is the same individual or entity receiving the transfer, and such
transfers are ordered or received in accounts for judicial use.
Central Bank Communication “A” 6212, which became effective as of April 1, 2017, reduced the commissions on credit card
and debit card sales pursuant to a gradual annual plan. Pursuant to Communication “A” 6212, the maximum credit card sales
commission rate for 2017, 2018, 2019 and 2020 was 2.0%, 1.85%, 1.65% and 1.50%, respectively. For 2021 and thereafter, the
maximum credit card sales commission rate is 1.30%. The maximum debit card sales commissions for 2017, 2018, 2019 and 2020 was
1.0%, 0.90%, 0.80% and 0.70%, respectively. For 2021 and thereafter, the maximum debit card sales commission rate is 0.60%. In
June 2022, the Central Bank issued Communication “A” 7533, which sets forth that debit cards sales commission fees must not
exceed 0.60% and credit cards sales commission fees must not exceed 1.30%. As of the date of this annual report, these rates are in
effect.
On February 19, 2020 by means of Communication “A” 6912, the Central Bank established that for 180 business days from
February 19, 2020 financial entities could not increase commissions to customers of financial services, nor announce new
commissions, except for those which have already been announced. This regulation was further extended until February 28, 2021 and
afterwards by means of Communication “A” 7158 the Central Bank established that, until February 28, 2021, financial entities must
not increase the fees for credit cards related services, including issuance, renewal, administration or maintenance services, and for
savings accounts related services, by more than 9% in January 2021 and or February 2021.
On March 26, 2020, by means of Communication “A” 6945 (as amended by Communications “A” 6957, “A” 6963, “A” 7009,
“A” 7044, “A” 7107 and “A” 7181), the Central Bank determined that until March 31, 2021, any banking transactions made through
ATMs would not be subject to any charges or fees. After March 31, 2021, banks are authorized to charge commissions for ATM
transactions, but these are still free of charge for users with salary accounts, retirement accounts and beneficiaries of social plans. The
use free of charge of ATM networks will continue after March 31, 2021 for all users of the financial system. After that date, only holders
of debit cards associated with salary accounts, retirement payments or social plans will be able to continue using any ATM free of
charge, regardless of the bank or network to which they belong. The rest of the users may use the ATM services provided by their bank
free of charge.
Maximum term for payments to commerces and providers
By virtue of Communication “A” 6680, effective as of May 1, 2019, the Central Bank established a maximum term of ten
business days for financial entities to deposit payments to commerces and providers for sales made via credit cards or purchase cards,
calculated from the sale date. Furthermore, financial entities shall not charge any fee or interest related to such payment term, nor block
this payment mechanism in any way.
Nevertheless, by virtue of Communication “A” 6680, the Central Bank excluded from the scope of the provisions disclosed by
Communication “A” 6680 the credit and/or purchase cards issued to individuals or legal entities that are intended for the payment of
purchases with a deferred term or more than one month related to their productive activity, i.e. agricultural o distribution activities.
On the other hand, Communication “A” 7305, which was issued on June 11, 2021 and effective as of July 1, 2021, establishes
new deadlines for financial institutions to credit the amount of the sales made in one payment by using credit and/or purchase cards to
the deposit account opened in the name of the supplier or affiliated business. These new deadlines are: (i) eight business days if they are
micro or small companies and/or are individuals, (ii) ten business days for those categorized as medium-sized companies and those
whose business activity is “lodging, tourism, gastronomy and/or health services,” and (iii) eighteen business days for the rest of the
cases. In all these cases, the new deadlines shall be counted from the date of the purchase by the card holder or beneficiary. The financial
entities will not be able to charge any interests or commissions in relation to these deadlines nor shall impede the use of credit and/or
purchase cards. Pursuant to Communication “A” 7919, as of the date of this annual report these deadlines remain in effect.
Loans and Housing Units
The Central Bank has adopted measures for taking deposits and extending loans expressed in a special measuring unit adjustable
by the CER. These special units are referred to as Adjustable Purchase Value Units (Unidades de Valor Adquisitivo Actualizables, or
“UVAs”).
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In addition, Law No. 27,271 provides for the adjustment of deposits and loans by reference to the construction index, expressed
in a special measuring unit referred to as Housing Units (Unidades de Vivienda or “UVI”)
Consequently, UVAs and UVIs coexist and may be used both with respect to bank loans and deposits.
The initial value of the UVI was Ps.14.05 (the same as the UVA), representing the cost of construction of one thousandth square
meter of housing as of March 31, 2016. As of April 18, 2024, the value of UVI and UVA were Ps.670.95 and Ps.854.09, respectively.
Both units are amended based on the indices published by the INDEC and the Central Bank on their websites.
Foreign Exchange System
On September 1, 2019, with the purpose of strengthening the normal functioning of the economy, the Argentine government
reinstated exchange controls. The new controls apply to access to the foreign exchange market by residents for savings and investment
purposes abroad, the payment of external financial debts abroad, the payment of dividends in foreign currency abroad, payments of
imports of goods and services, and the obligation to repatriate and settle for Pesos the proceeds from exports of goods and services,
among others.
For further information on this topic, please refer to “Item 10.D. Exchange Controls.”
Foreign Currency Lending Capacity
The Regulations on the allocation of deposits in foreign currencies, (including Communication “A” 6428 as amended), establish
that the lending capacity from foreign currency deposits, must be applied in the corresponding deposit currency to the following
categories:
(a)
(b)
pre-financing and financing of exports to be made directly or through principals, trustees or other brokers, acting on
behalf of the owner of the merchandise;
other financing of exports which have a flow of future income in foreign currency and verify, in the year prior to
granting the financing, a billing in foreign currency for an amount that is reasonably related to that financing;
(c)
financing to producers, processors or goods collectors, provided that:
(i)
(ii)
they have sale contracts for the sale of their goods to an exporter, with a fixed price or fixed in foreign
currency -independently of the currency in which the operation is settled- and in the case of fungible goods
with quotation, in foreign currency, normal and customary in local or foreign markets, with wide diffusion
and easy access to public knowledge;
its main activity is the production, processing and / or collection of fungible goods with quotation, in foreign
currency, normal and usual in foreign markets, widely disseminated and easy access to public knowledge,
and it is found, in the year prior to the granting of financing, a total billing of these goods for an amount that
is reasonably related to that activity and its financing; and also operations aimed to finance service providers
directly used in exporting process of goods (such as those provided at port terminals, international loading
and unloading services, leasing containers or port warehouses, international freights ). This, provided it is
verified that the flow of future income linked to sales to exporters registers a periodicity and magnitude that
it is enough for the cancellation of the financing and it is verified, in the year prior to the granting of the
financing, a billing to exporters for an amount that is reasonably related to that activity and its financing.
(d)
financing for manufacturers of goods to be exported, as final products or as part of other goods, by third-party
purchasers, provided that such transactions are secured or collateralized in foreign currency by third-party purchasers;
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(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
financing of suppliers of goods and/or services that are part of the production process of fungibles goods with
quotation, in foreign currency, normal and usual in local or foreign markets, widely disseminated and easy access to
public knowledge, provided they have firm sales contracts for those goods and/or services in foreign currency and/or
on said goods;
financing of investment projects, working capital and/or acquisition of all kinds of goods, including temporary imports
of inputs, which increases or are linked to the production of exporting products. Even though the total income of the
exporting companies does not come from their exports, the financing may be imputed when the cash flow in foreign
currency from their exports, is enough for its cancelation;
financings to commercial portfolio clients and loans granted for consumption or housing purposes-according to the
provisions established in the rules on “Classification of debtors,” whose destination is the importation of capital goods
(“BK” in accordance with the Mercosur’s Common Nomenclature established in Annex I to Decree No. 690/02 and
other complementary provisions), which increase the production of merchandise destined for the domestic market;
foreign currency debt securities or financial trust participation certificates including other payment rights specifically
recognized on trust agreements whose underlying assets are loans made by the financial entities in the manners set
forth in (a) to (d) above and first sentence of (f), or documents in which cash flows in Pesos or foreign currency have
been assigned to the trustee, in foreign currency credit agreements, under the terms and conditions set forth in items
mentioned before;
financings for purposes other than those mentioned in (a) to (d) above, included under the IDB credit program
(“Préstamos BID N° 119/OC-AR”), not exceeding 10% of the lending capacity;
inter-financing loans;
Central Bank bills (Letras y Notas) denominated in dollars;
direct investments abroad by companies that reside in Argentina, that seek the development of productive activities
of non-financial goods and/or services, either through contributions and/or purchases of shares in companies, to the
extent that they are constituted in countries or territories considered cooperators for the purposes of fiscal transparency
according to the provisions of article 1 of Decree No. 589/13 as amended;
(m)
financing of investment projects, including working capital, that allow the increase of production in the energy sector
and have firm sales contracts and/or endorsements or guarantees in foreign currency.
(n)
(o)
(p)
(q)
national treasury bills in foreign currency, up to an amount equivalent to one third of the total of the applications made
in accordance with the provisions of this section;
financing of investment projects for bovine cattle, including their working capital, without exceeding 5% of deposits
in foreign currency of the entity;
financing of foreign importers for the acquisition of goods and / or services produced in the country, either directly or
through credit lines to foreign banks; and
Financing of local residents that are secured by letters of credit (“stand-by letters of credit”) issued by foreign banks
or multilateral development banks that comply with the provisions of point 3.1. of regulations on “Credit assessments,”
requiring for that purpose an international rating of investment grade risk, to the extent that such letters of credit are
unrestricted and that the accreditation of the funds is made immediately at the simple request of the beneficiary entity.
The lending capacity shall be determined for each foreign currency raised, resulting from the aggregate of deposits and inter-
financial loans received, which have been reported by the granting financial institution as coming from its foreign currency deposit
lending capacity net of the minimum cash requirement on deposits, and such determination being made on the basis of the monthly
average of daily balances recorded during each calendar month. Any defect in the application shall give rise to an increase in the
minimum cash requirement in the relevant foreign currency.
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General Exchange Position
The general exchange position (“GEP”) includes all the liquid external assets of the institution, such as gold, currency and
foreign currency notes reserves, sight deposits in foreign banks, investments in securities issued by Organization for Economic Co-
operation and Development (OECD) members’ governments with a sovereign debt rating not below “AA,” certificates of time deposits
in foreign institutions (rated not less than “AA”), correspondents’ debit and credit balances and third parties funds pending of settlement.
It also includes purchases and sales of these assets already arranged and pending settlement involving foreign exchange purchases and
sales performed with customers within a term not exceeding two (2) business days and correspondent balances for third-party transfers
pending settlement. It does not include, however, foreign currency notes held in custody, term sales and purchases of foreign currency
or securities nor direct investments abroad.
Pursuant to Communication “A” 6244, as amended, which entered into force on July 1, 2017, entities can freely determine the
level and use of their GEP, thus allowing such entities to manage their exchange positions, both regarding the composition of their
assets, as well as the possibility to maintain or transfer their holdings out of the country, with its subsequent impact on the reserves.
Furthermore, the aforementioned regulation establishes that the entities shall carry out arbitrage and foreign exchange
operations, to the extent that the counterparty is a branch or agency of local official banks, a foreign financial institution, total or majority
ownership of an entity in foreign states, a foreign financial or exchange entity that is not incorporated in countries or territories where
the Recommendations of the Financial Action Task Force, or a foreign company dedicated to the trading of banknotes from different
countries and / or precious metals in coins or bars of good delivery and whose head office is located in a member country of the Basel
Committee for Banking Supervision.
Further changes to the GEP regulation have been introduced by Communications “A” 6770, 6780 and 6856. Prior approval by
the Central Bank is required to increase the ownership of foreign currency from the higher of the average foreign currency owned in
August 2019 and at the closure of August 31, 2019. Moreover, the institutions are not permitted to buy securities on the secondary
market with liquidation on foreign currency.
Foreign Currency Net Global Position
The foreign currency net global position shall consider all assets, liabilities, commitments and other instruments and
transactions through financial intermediation in foreign currency or linked to exchamge rate movement, including cash forward
transactions and other derivative contracts, deposits in foreign currency in accounts opened with the Central Bank, gold, position, the
Central Bank monetary regulation instruments in foreign currency, subordinated debt in foreign currency and debt instruments in foreign
currency.
Forward transactions under master agreements executed in authorized domestic markets paid by settlement of the net amount
without delivery of the underlying asset are also included. Likewise, certificates or notes issued by financial trusts and claims under
common trusts are also included in the relevant proportion, provided that the underlying assets are denominated in foreign currency.
The value of the position in currencies other than U.S. dollars shall be expressed in that currency, at the respective exchange rate
published by the Central Bank.
Decreases in foreign currency assets due to the pre-cancellation of local financing to private sector customers, can only offset the foreign
currency net global position up to the original term of maturity with the net increase in holdings of National Treasury securities in
foreign currency. At the original maturity of local financing in foreign currency, it may be offset with the purchase of any foreign
currency assets computable at the foreign currency net global position. At the original maturity of the local financing in foreign currency,
it may be offset by the purchase of any foreign currency asset computable inthe foreign currency net global position.
The following instruments are excluded from the ratio: deductible assets when determining a bank’s RPC, Argentine
government bonds linked to the growth of the GDP, the concepts that the financial entity registers in its branches abroad, the balances
corresponding to the “special accounts for holders with agricultural activity” and the “special accounts for exporters,” certain non-
transferable domestic bills of the Central Bank denominated in Pesos, the public and private securities denominated in Pesos which are
adjustable by the exchange rate, and the loan agreements denominated in Pesos with variable remuneration based on the variation of the
U.S. dollars that are not covered by the term investments with variable remuneration based on the U.S. dollar.
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Limits
Negative Foreign Currency Net Global Position (liabilities exceeding assets)
The limit is 30% of the RPC of the immediately preceding month (Communication “A” 7417).
Positive Foreign Currency Net Global Position (assets exceeding liabilities)
This daily position (daily balance converted to Pesos at the reference exchange rate of the immediately preceding month)
cannot exceed 5% of the RPC of the immediately preceding month.
As of June 18, 2018, the Central Bank allows that the Positive Foreign Currency Net Global Position may reach up to 30% of
the RCP, while the total excess over the general limit originates only as a result of:
(a)
(b)
increase in the position in U.S. treasury bills in U.S. dollars with respect to those held as of June 15, 2018;
position in national treasury bills in U.S. dollars as of June 15, 2018, maintained as excess admitted to the current
limit as of that date; and/or
(c)
increase in the position in national treasury bills linked to U.S. dollars with respect to those held as of May 13, 2019.
As provided by Communication “A” 7093 (as amended by Communication “A” 7395), it includes national treasury bills
denominated in foreign currency that the institutions receive in exchange for National Treasury Bills – under Law No. 27,556 – that
they have imputed to this point on the Business Day immediately preceding the day on which they are delivered in exchange. Loan
agreements in Pesos with variable remuneration based on the fluctuation of the U.S. dollar rate agreed until May 27, 2020, which are
not hedged with term investments with variable remuneration based on the U.S. dollar, are excluded for the determination of the foreign
currency net global position.
The excesses of these ratios are subject to a charge equal to 1.5 times the rate of the monetary policy published on the last
business day of the relevant period or, if not available, the last one available for a shorter term. Charges not paid when due are subject
to a charge equal to one and a half times the charge established for excesses.
In addition to the above-mentioned charge, sanctions set forth in section 41 of the FIL shall apply (including caution, warning,
fine, temporary or permanent disqualification to dispose of a banking current account, temporary or permanent disqualification to act as
promoters, founders, directors, administrators, members of surveillance committees, comptrollers, liquidators, managers, auditors,
partner or shareholders, and license revocation).
Fixed Assets and Other Items
The Central Bank determines that the fixed assets and other items maintained by the financial entities must not exceed 100%
of the entity’s RPC.
Such fixed assets and other items include the following:
• Shares of local companies;
• Miscellaneous receivables;
• Property and equipment; and
• Other assets.
The calculation of such assets will be effected according to the month-end balances, net of devaluations, accumulated
amortizations and allowances for loan losses.
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Non-compliance with the ratio produces an increase in the minimum capital requirements equal to 100% of the excess on the
ratio.
Credit Ratings
Since November 28, 2014, Communication “A” 5671, as amended by Communication “A” 6558, supersedes the provisions
issued by the Central Bank containing ratings requirements assigned by a local risk rating company. Where provisions require certain
international ratings, the criteria set forth by Communication “A” 5671 govern.
The provisions of Communication “A” 5671 are basic guidelines to properly assess the credit risk that financial institutions
must observe when implementing Central Bank rules including the requirement of a particular rating and do not replace the credit
assessment that each financial institution must make to their counterparts. International credit ratings that refer to these provisions shall
be issued by rating agencies that have a code of conduct based on the “Principles of the Code of Conduct for Agents Rate Risk” issued
by the International Organization of Securities Commissions (“IOSCO”).
Annex II of Communication “A” 5671 provides a table regarding the new qualification requirements for financial institutions.
This table classifies the credit ratings requirements for different transactions.
Debt Classification and Loan Loss Provisions
Credit Portfolio
The regulations on debt classification are designed pursuant to Central Bank rules, which differ from IFRS to establish clear
guidelines for identifying and classifying the quality of assets, as well as evaluating the actual or potential risk of a lender sustaining
losses on principal or interest, in order to determine (taking into account any loan security) whether the provisions against such
contingencies are adequate. Banks must classify their loan portfolios into two different categories: (i) consumer or housing loans and
(ii) commercial loans. Consumer or housing loans include housing loans, consumer loans, credit-card financings, loans of up to
Ps.85,260,000 to micro-credit institutions and commercial loans of up to Ps.426,300,000 with or without preferred guarantees. All other
loans are considered commercial loans. Consumer or housing loans in excess of Ps.426,300,000, the repayment of which is linked to
the evolution of its productive or commercial activity, are classified as commercial loans.
At the entity’s option, financing of a commercial nature of up to Ps.426,300,000, whether or not such financing has preferred
guarantees, may be grouped together with credits for consumption or housing, in such case they will receive the treatment provided for
the latter. If a customer has both kinds of loans (commercial and consumer or housing loans), the consumer or housing loans will be
added to the commercial portfolio to determine under which portfolio they should be classified based on the amount indicated. In these
cases, the loans secured by preferred guarantees shall be considered to be at 50% of its face value.
Under the current debt classification system, each customer, as well as the customer’s outstanding debts, are included within
one of six sub-categories. The debt classification criteria applied to the consumer loan portfolio are primarily based on objective factors
related to customers’ performance of their obligations or their legal standing, while the key criterion for classifying the commercial loan
portfolio is each borrower’s paying ability based on their future cash flow. In addition, on February 2, 2023, the Central Bank issued
Communication “A” 7687 in order to provide financing to the economic sectors which had been affected by the droughts which occurred
in Argentina during 2023. This regulation provides rules to compute the terms in arrears to consider a producers to whom the Agricultural
Emergency Law applies as a debtor. These debtors are classified in: (i) category 1 debtors (normal situation), which are allowed to incur
in up to 75 days in arrears in the payment of its obligations; (ii) category 2 debtos (with special monitoring or low risk), such term will
be 76 and up to 75 days in arrears in the payment of its obligations; (iii) category 3 debtors (with special follow-up or low risk), such
term shall be 76 and up to 135 days of arrears; and (iv) category 4 debtors (with problems or medium risk): such term shall be 136 and
up to 225 days of arrears.
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Commercial Loans Classification
The principal criterion used to evaluate a loan pertaining to the commercial portfolio is its borrower’s ability to repay, whose
ability is mainly measured by such borrower’s future cash flow. Pursuant to Central Bank rules, commercial loans are classified as
follows:
Classification
Performing
Criteria
Borrowers that demonstrate their ability to comply with their payment obligations. High repayment
capacity.
Subject to Special
Monitoring/Under observation
Borrowers that, among other criteria, are up to 90 days past due and, although considered to be able
to meet all their financial obligations, are sensitive to changes that could compromise their ability
to honor debts absent timely corrective measures.
Subject to Special
Monitoring/Under negotiation or
refinancing agreement
Borrowers who are unable to comply with their obligations as agreed with the bank and, therefore,
formally state, within 60 calendar days after the maturity date, their intention to refinance such
debts. The borrower must enter into a refinancing agreement with the bank within 90 calendar days
(if up to two lenders are involved) or 180 calendar days (if more than two lenders are involved)
after the payment default date. If no agreement has been reached within the established deadline,
the borrower must be reclassified to the next category according to the indicators established for
each level.
With Special Treatment
Troubled
Borrowers who are unable to comply with their obligations as agreed with the bank performed their
first new agreement in the year and payed at least the first payment.
Borrowers with difficulties honoring their financial obligations under the loan on a regular basis,
which, if uncorrected, may result in losses to the bank.
With High Risk of Insolvency
Borrowers who are highly unlikely to honor their financial obligations under the loan.
Irrecoverable
Loans classified as irrecoverable at the time they are reviewed (although the possibility might exist
that such loans might be collected in the future). The borrower will not meet its financial obligations
with the financial institution. According to the Central bank rules, a loan is classified as
irrecoverable if: (a) the borrower has defaulted on its payment obligations under a loan for more
than 180 calendar days according to the corresponding report provided by the Central Bank, which
report includes: (1) financial institutions liquidated by the Central Bank, (2) residual entities created
as a result of the privatization of public financial institutions, or in the privatization or dissolution
process, (3) financial institutions whose licenses have been revoked by the Central Bank and find
themselves subject to judicial liquidation or bankruptcy proceedings, and (4) trusts in which
SEDESA (as defined below) is a beneficiary; or (b) certain kinds of foreign borrowers (including
banks or other financial institutions that are not subject to the supervision of the Central Bank or
similar authority of the country in which they are incorporated) that are not classified as “investment
grade” by any of the rating agencies approved by the Central Bank.
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Consumer and Housing Loans Classification
The principal criterion used in the assessment of loans in the consumer and housing portfolio is the duration of the default on
such loans. Under the Central Bank rules, consumer and housing borrowers are classified as follows:
Classification
Performing
Low Risk
Criteria(2)
If all payments on loans are current or less than 31 calendar days overdue and, in the case of
checking account overdrafts, less than 61 calendar days overdue.
Loans upon which payment obligations are overdue for a period of more than 31 and up to 90
calendar days.
With Special Treatment
Borrowers who are unable to comply with their obligations as agreed with the bank performed their
first new agreement in the year and payed at least the first payment.
Medium Risk
High Risk
Irrecoverable
Allowances for Loan Losses
Loans upon which payment obligations are overdue for a period of more than 90 and up to 180
calendar days.
Loans in respect of which a legal action seeking collection has been filed or loans having payment
obligations overdue for more than 180 calendar days, but less than 365 calendar days.
Loans in which payment obligations are more than one year overdue or the debtor is insolvent or
in bankruptcy or liquidation.
Grupo Supervielle recognises the allowance for loan losses under the expected credit losses method included in IFRS 9. The
most significant judgements of the model relate to defining what is considered to be a significant increase in credit risk, determining the
life of revolving facilities, and in making assumptions and estimates to incorporate relevant information about past events, current
conditions and forecasts of economic conditions. A high degree of uncertainty is involved in making estimations using assumptions that
are highly subjective and very sensitive to the risk factors.
In Note 1.11 to our audited consolidated financial statements, provides more detail of how the expected credit loss allowance
is measured.
Priority Rights of Depositors
Under Section 49 of the FIL, in the event of judicial liquidation or bankruptcy of a bank all depositors, irrespective of the type,
amount or currency of their deposits, will be senior to the other remaining creditors (such as shareholders of the bank), with exceptions
made for certain labor liens (section 53 paragraphs “a” and “b”) and for those creditors backed by a pledge or mortgage, in the following
order of priority: (a) deposits of up to Ps.50,000 per person (including all amounts such person deposited in one financial entity), or its
equivalent in foreign currency, (b) all deposits of an amount higher than Ps.50,000, or its equivalent in foreign currency, and (c) the
liabilities originated in commercial lines granted to the financial institution and which directly affect international commerce.
Furthermore, pursuant to section 53 of the FIL, as amended, Central Bank claims have absolute priority over other claims, except for
pledged or mortgaged claims, certain labor claims, the depositors’ claims pursuant to section 49, paragraph e), points i) and ii), debt
granted under section 17, paragraphs (b), (c) and (f) of the Central Bank’s Charter (including discounts granted by financial entities due
to a temporary lack of liquidity, advances to financial entities with security interest, assignment of rights, pledges or special assignment
of certain assets) and debt granted by the Banking Liquidity Fund backed by a pledge or mortgage.
The amendment to section 35 bis of the FIL Law by Law No. 25,780 sets forth that if a bank is in a situation where the Central
Bank may revoke its authorization to operate and become subject to dissolution or liquidation by judicial resolution, the Central Bank’s
Board of Directors may take certain actions. Among these actions, in the case of excluding the transfer of assets and liabilities to financial
trusts or other financial entities, the Central Bank may totally or partially exclude the liabilities mentioned in section 49, paragraph e),
as well as debt defined in section 53, giving effect to the order of priority among creditors. Regarding the partial exclusion, the order of
priority of point e) section 49 must be followed without giving a different treatment to liabilities of the same grade.
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Mandatory Deposit Insurance System
Law No. 24,485 passed on April 12, 1995, as amended, created a Deposit Insurance System, or “SSGD,” which is mandatory
for bank deposits, and delegated the responsibility for organizing and implementing the system to the Central Bank. The SSGD is a
supplemental protection to the privilege granted to depositors by means of Section 49 of the FIL, as mentioned above.
The SSGD has been implemented through the establishment of a Deposit Guarantee Fund, or “FGD,” managed by a private-
sector corporation called Seguro de Depósitos Sociedad Anónima, (Deposit Insurance Corporation, or “SEDESA”). According to Decree
No. 1292/96, the shareholders of SEDESA are the government through the Central Bank and a trust set up by the participating financial
institutions. These institutions must pay into the FGD a monthly contribution determined by Central Bank rules. The SSGD is financed
through regular and additional contributions made by financial institutions, as provided for in Central Bank Communication “A” 4271,
dated December 30, 2004.
The SSGD covers deposits made by Argentine individuals and legal entities in Pesos or foreign currency and maintained in
accounts with the participating financial institutions, including checking accounts, savings accounts, and time deposits up to the amount
of Ps.1,500,000, as set forth by Central Bank Communication “A” 6973 of the Central Bank, as amended. However, pursuant to
Communication “A” 7661, the Central Bank raised the amount covered by the Deposit Insurance System to Ps.6,000,000. Pursuant to
Communication “A” 7985, the Central Bank raised the amount covered by the Deposit Insurance System to Ps.25,000,000 effective
April 1, 2024.
Effective payment on this guaranty will be made within thirty (30) business days after revocation of the license of the financial
institution in which the funds are held; such payments are subject to the exercise of the depositor’s priority rights described above.
In view of the circumstances affecting the financial system, Decree No. 214/2002 provided that SEDESA may issue registered
securities for the purpose of offering them to depositors in payment of the guarantee in the event it should not have sufficient funds
available.
The SSGD does not cover: (i) deposits maintained by financial institutions in other financial institutions, including certificates
of deposit bought in the secondary market, (ii) deposits made by persons directly or indirectly affiliated with the institution, (iii) time
deposits of securities, acceptances or guarantees, (iv) any transferable time deposits that have been transferred by endorsement, (v) any
deposits in which the agreed-upon interest rate is higher than the reference interest rates periodically released by the Central Bank for
time deposits, with the exception of those arranged in Pesos at the minimum nominal rate, and they shall also be excluded if these
interest rate ceilings are distorted by additional incentives or rewards, and (vi) immobilized balances from deposits and excluded
transactions.
Pursuant to Communication “A” 5943, every financial institution is required to contribute to the FGD a monthly amount of
0.015% of the monthly average of daily balances of deposits in local and foreign currency, as determined by the Central Bank.
When fixed term deposits in U.S. dollars of the private non-financial sector are used to purchase Central Bank bills denominated
in U.S. dollars, financial institutions must contribute 0.015% of the monthly average of daily balances of the net position of such bills.
Prompt contribution of such amounts is a condition precedent to the continuing operation of the financial institution. The first
contribution was made on May 24, 1995. The Central Bank may require financial institutions to advance the payment of up to the
equivalent of two years of monthly contributions and debit the past due contributions from funds of the financial institutions deposited
with the Central Bank. The Central Bank may require additional contributions by certain institutions, depending on its evaluation of the
financial condition of those institutions.
When the contributions to the FGD reach the greater of Ps.2 billion or 5.0% of the total deposits of the system, the Central
Bank may suspend or reduce the monthly contributions, and reinstate them when the contributions subsequently fall below that level.
Other Restrictions
Pursuant to the FIL, financial institutions cannot create any kind of rights over their assets without the Central Bank’s
authorization. Furthermore, in accordance with section 72 of Capital Markets Law, publicly offered companies are forbidden to enter
into transactions with their directors, officers or affiliates in terms more favorable than arms-length transactions.
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Capital Markets
Commercial banks are authorized to subscribe for and sell shares and debt securities. At present, there are no statutory
limitations as to the amount of securities for which a bank may undertake to subscribe. However, under Central Bank rules, underwriting
of debt securities by a bank would be treated as “financial assistance” and, accordingly, until the securities are sold to third parties, such
underwriting would be subject to limitations.
The Argentine Capital Markets Law introduced substantial changes to regulations governing markets, stock exchanges and the
various agents operating in capital markets, in addition to certain amendments to the CNV’s powers. On September 9, 2013, the CNV
published the CNV Rules supplementing the Capital Markets Law. The CNV Rules have been in force since September 18, 2013.
One of the most significant modifications introduced by the Argentine Capital Markets Law and the CNV Rules is that agents
and markets must comply with the CNV’s requirements for applying for an authorization to operate, as well as registration requirements.
It further provides that each category of agent must meet minimum net worth and liquidity requirements.
Additionally, under the Capital Markets Law, the self-regulation of markets was eliminated, and authorization, supervision,
control, as well as disciplinary and regulatory powers, are conferred to the CNV regarding all capital market players.
The Argentine Productive Financing Law modified the Argentine Capital Markets Law and other related laws, and introduced
some important changes such as, among others:
•
•
•
•
•
•
•
•
•
•
reestablished certain markets self-regulation (which had been eliminated by the Argentine Capital Markets Law);
eliminated the powers granted to the CNV allowing it to appoint observers and intervene a company’s board of
directors without first obtaining a court order;
introduced several changes in the internal organization of the CNV and in the appointment of its board, such as
allowing the president of the CNV to have a decisive vote in case of tie in the decision making of the board and adopt
urgent resolutions together with two directors in case of exceptional circumstances prevent the assemblies from taking
place;
empowered the CNV to regulate the private placement of negotiable securities so that these do not qualify as “public
offers”;
as long as a mandatory offer is not required in cases where the buyer acquires control or more than 50% of voting
rights shares of a company listed, either directly or indirectly;
modified some antiquated provisions related to the mutual fund system (such as the solidarity between the asset
management company and the custodian, and the double registration of guidelines for investment in the CNV and in
the Public Registry of Commerce);
created a “legal microsystem” for capital markets where certain provisions of the Civil and Commercial Code or
Argentine Contest and Bankruptcy Law were not applicable;
promoted the financing of MiPyMes through the regulation of the issuance of electronic invoices with powers to easily
execute them against the debtor and subject to negotiation or discount in the capital markets;
promoted mortgage financing by improving the regulation of mortgage bills and the securitization of mortgages;
empowered the CNV to rule crowfunding for entrepreneurs and the promotion of “financial inclusion” through
programs and development plans; and
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•
allowed legal entities incorporated abroad to participate, through a representative duly authorized, at the shareholders’
meetings of the companies authorized by the CNV to make public offerings of their shares, without the need for
additional registration.
Buenos Aires Deposits of Large Amount Rate (“BADLAR)”
Interest rate paid for time deposits of more than Ps.1 million, by the average of financial entities. (Buenos Aires Deposits of
Large Amount Rate)
The information published by the Central Bank is broken down by total financial system and private banks.
Minimum Interest Rate On Time Deposit Rates
Pursuant to Communication “A” 7491 (as amended by Communication “A” 7561) for financial institutions included in groups
“A” and “B” for purposes of the Central Bank rules on “Minimum Cash,” and for branches or subsidiaries of foreign banks rated as
systemically important (G-SIBs) which are not included in the groups mentioned above, a minimum deposit rate shall apply, which shall
be timely disclosed by the Central Bank, to deposits in Pesos which are not adjustable by “UVA” or “UVI” on behalf of holders of the
non-financial private sector.
Pursuant to Communication “A” 7978 dated March 11, 2024, the Central Bank established that, for deposits made as from
March 12, 2024, the remuneration for fixed rate time deposits, as provided in point 1.11.1 of the rules on deposits and rerm investments,
can be agreed between the contracting parties.
Central Bank Repo Transactions- Interest Rate
Passive repo transactions are a type of financing transaction between banks which are common in the financial market. These
transactions are made through contracts pursuant to which the Central Bank, which acts as the repurchasing party, acquires public or
private securities from a bank in exchange of cash, and the Central Bank and the selling bank agree that the selling bank will repurchase
such securities on a certain date and at a certain price. The difference between the spot purchase price of the securities and the forward
sale price determines the interest rate applicable to the of Passive repo transactions.
As of August 12, 2022, by means of Communication “A” 7579, the Central Bank agreed to offer 1-day Central Bank passive repo
transactions against mutual funds. These offers will be made against Internal Bills of the Central Bank denominated in Pesos for FCI
LETFCI, at 1 business day term and at an annual nominal rate which will be duly notified by the Central Bank. The sole registration,
settlement and depository agent of the collaterals will be the “Central de Registro y Liquidación de Instrumentos de Deuda Pública,
Regulación Monetaria y Fideicomisos Financieros CRyL.” In addition, as of January 27, 2023, by means of Communication “B”
12467, the Central Bank decided to fix the rate of the mutual funds passive rate by applying the coefficient of 0.85 to the rate in effect
for 1-day term passive rate with financial institutions. In addition, since the beginning of 2024, the Central Bank began to apply a new
monetary policy management strategy whereby it replaced the use of four-week promissory notes with one-day Central Bank passive
repo transactions in order to reduce borrowing costs.
Financial Institutions with Economic Difficulties
The FIL provides that any financial institution, including a commercial bank, (i) with its solvency impaired, in the judgment of
the Central Bank; (ii) recording deficiencies on the minimum cash reserve requirement during the periods established by the Central
Bank; (iii) recording repeated failures to comply with the various limits or technical relations established; or (iv) that could not maintain
the minimum asset liability required for its particular class, location or characteristics, must (upon request from the Central Bank and in
order to avoid the revocation of its license) prepare a restructuring plan (plan de regularización y saneamiento). The plan must be
submitted to the Central Bank on a specified date, no later than thirty (30) calendar days from the date on which a request to that effect
is made by the Central Bank. If the institution fails to submit, secure regulatory approval of, or comply with, a restructuring plan, the
Central Bank will be empowered to revoke the institution’s license to operate as such, without prejudice to the application of the penalties
provided for in the aforementioned law.
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The Central Bank may appoint overseers with veto power, require the provision of guarantees and limit or forbid the distribution
or remittance of profits, temporarily admit exceptions to the relevant limits and technical relations, exempt or defer the payment of
charges and/or fines as provided by the Financial Institutions Law.
The Central Bank’s charter authorizes the Superintendency to fully or partially suspend, exclusively subject to the approval of
the President of the Central Bank, the operations of a financial institution for a term of thirty (30) days if the liquidity or solvency thereof
is adversely affected. Such term could be renewed for up to ninety (90) additional days, with the approval of the Central Bank’s Board
of Directors. During such suspension term an automatic stay of claims, enforcement actions and precautionary measures is triggered,
any commitment increasing the financial institution’s obligations shall be null and void, and debt acceleration and interest accrual shall
be suspended.
Institution Restructuring to Safeguard Credit and Bank Deposits
If a financial institution meets the Central Bank’s criteria and is found to be in any of the situations set forth in Section 44 of
the FIL, the Central Bank may authorize the restructuring of the financial institution in defense of depositors, prior to revocation of the
authorization to operate. The restructuring plan may consist of certain steps, including, among others:
•
•
•
•
adoption of a list of measures to capitalize or increase the capital of the financial institution;
revoke the approval granted to the shareholders of the financial institution to hold interests therein;
exclusion or transfer assets and liabilities;
judicial intervention of the institution, displacing the statutory administrative authorities, and determine the
capabilities needed to comply with the assigned function.
Revocation of the License to Operate as a Financial Institution
The Central Bank may revoke the license to operate as a financial institution (a) at the request of the legal or statutory authorities
of the institution; (b) in the cases contemplated by the Argentine Civil and Commerce Code or in the laws governing its existence as a
legal entity; (c) when, to the judgment of the Central Bank, the affections to the solvency and/or liquidity of the institution cannot be
solved through a regularization and sanitation program; (d) in the rest of the cases provided by the FIL.
Liquidation of Financial Institutions
As provided in the FIL, the Central Bank must notify the revocation decision to a competent court, which will then determine
who will liquidate the entity: the corporate authorities (extrajudicial liquidation) or an independent liquidator appointed by the court for
that purpose (judicial liquidation). The court’s decision will be based on whether there are sufficient assurances that the corporate
authorities are capable of carrying out such liquidation properly, prior authorization of the Central Bank and in the cases provided by
subsections a) and b) of section 44 of the FIL.
Bankruptcy of Financial Institutions
According to the FIL, financial institutions are not allowed to file their own bankruptcy petitions. In addition, the bankruptcy
shall not be adjudged until the license to operate as a financial institution has been revoked.
Once the license to operate as a financial institution has been revoked, a court of competent jurisdiction may adjudge the former
financial institution in bankruptcy, or a petition in bankruptcy may be filed by the Central Bank or by any creditor of the bank, in this
case after a period of sixty (60) calendar days has elapsed since the license was revoked.
Once the bankruptcy has been adjudged, provisions of the Bankruptcy Law No. 24,522 (the “Bankruptcy Law”) and the FIL
shall be applicable; provided however that in certain cases, specific provisions of the FIL shall supersede the provisions of the Argentine
Bankruptcy Law (i.e. priority rights of depositors).
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Merger and Transfer of Goodwill
Merger and transfer of goodwill may be arranged between entities of the same or different type and will be subject to the prior
approval of the Central Bank. The new entity or the buyer must submit a financial-economic structure profile supporting the project in
order to obtain authorization from the Central Bank.
Financial System Restructuring Unit
The Financial System Restructuring Unit was created to oversee the implementation of a strategic approach towards those that
benefit from assistance provided by the Central Bank. This unit is in charge of rescheduling maturities, determining restructuring
strategies and action plans, approving transformation plans, and accelerating repayment of the facilities granted by the Central Bank.
Holding Companies
On June 28, 2019, the Central Bank ruled, through Communication “A” 6723, with effect from January 1, 2020, that Group
“A” financial institutions (in accordance with the “Financial Institutions Authorities” rules) which are controlled by non-financial
institutions (as in our case in relation with the Bank) shall comply with the Minimum Capital requirements (see “—Liquidity and
Solvency Requirements—Minimum Capital Requirements”), the Major Exposure to Credit Risk regulations (see “—Credit Risk
Regulation—Large Exposures”), the LCR (see “—Internal Liquidity Policies of Financial Institutions—Liquidity Coverage Ratio) and
the Net Stable Funding Ratio (see “—Liquidity Parameters—Net Stable Funding Ratio”) on a consolidated basis comprising the non-
financial holding and all its subsidiaries (excluding insurance companies and non-financial subsidiaries).
Additionally, Group “A” financial institutions may not grant direct or indirect financial assistance of any kind to its holding
company whenever it is a non-financial institution.
Fintech Regulations
The Central Bank issued Communication “A” 6885 (as amended by Communication “A” 7226) by means of which it regulates
certain aspects of Fintech operations. This communication defined Payment Service Provider (“PSP”) as those non-financial entities in
retail payments performing under the global framework of the payment system, such as offering payment accounts to order and/or
receive payments, and creayred a registry for PSP operations. Particularly, Communication “A” 6885 forbids entities to operate as PSP
if (i) they are not properly incorporated in Argentina; (ii) they are incorporated as a stock exchange, clearing chamber or agent under
the CNV Rules; or (iii) if its capital, right votes, administrative or inspection body are integrated by people disqualified for performing
financial activities in Argentina by the FIL, condemned by crimes against property, the public administration, the economic and financial
order or public faith, privacy violations, illicit association or by section 1.b of the Foreign Exchange Criminal Regime. Shareholdings
acquired on stock exchanges that do not reach the threshold of 20% of the capital or voting rights are exempt from the provisions of
point (iii).
Regarding the registry, Communication “A” 6885 commands that all PSPs that offer payment account must register with the
“Registry of Payment Service Providers that Offer Payment Accounts.” Additionally, all PSPs shall comply with a reporting regime to
be further regulated by the Central Bank.
Regarding the management of the funds, the regulation provided that all funds credited to payment accounts offered by PSPs
shall be (i) available at all times, for an amount at least equivalent to the one credited in the payment account; (ii) deposited in Pesos, in
on-sight accounts in Argentine financial entities; and (iii) on an independent on-sight account from the one used for trading for own
account (e.g.: creditor or salary payments).
Any breach of the rules as set on the abovementioned communication is submitted to the sanctions of the FIL.
On February 24, 2022, the Central Bank issued Communication “A” 7462 (as amended by Communication “A” 7533) providing
for the creation of the “Register of interoperable digital wallets” and establishing that any PSP wishing to provide a digital wallet service
that allows making transfer payments initiated by reading QR codes must be registered therein. In addition, it defines a “digital wallet”
service as the service offered by a financial institution or payment service provider (PSP) through an application on a mobile device or
web browser that must allow making payments with transfer (PCT) and/or with other payment instruments.
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Gender Parity Requirements
On September 3, 2020, by means of Communication “A” 7100 (as amended by Communication “A” 7465), the Central Bank
amended the rules on “Guidelines for Corporate in Financial Institutions” (Lineamientos para el gobiernos societario en entidades
financieras) to include a requirement of gender parity.
By virtue of such Communication, the Central Bank suggested to financial institutions to consider the progressive incorporation
of women on new appointments and/or renewals, until gender parity is achieved. In this regard, the Central Bank defined gender parity
as the guideline that aims at equalizing the participation of men and women in labor decision-making spaces, ensuring the right to equal
opportunities and non-discrimination on the bases of gender.
Anti-Money Laundering and Terrorism Financing Regime
The concept of money laundering is generally used to denote transactions aimed at introducing funds from illicit activities into
the institutional system and thus transform gains from illegal activities into assets of a seemingly legitimate source.
Terrorist financing consists of providing funds for terrorist activities. This may involve funds raised from legitimate sources,
such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, such as drug trade,
weapons and other goods smuggling, fraud, kidnapping and extortion. Financing the proliferation of weapons of mass destruction
consists of providing financial support or resources to assist in the development, manufacture, acquisition, or spread of nuclear, chemical,
or biological weapons and their delivery systems.
On April 13, 2000, the National Congress passed Law No. 25,246, (subsequently amended and complemented, the
“AML/CFT/CFP Law”), which created the Anti- Money Laundering, Counter-Terrorist Financing and the Financing of Proliferation of
Weapons of Mass Destruction Regime (the “AML/CFT/CFP Regime”), which criminalizes money laundering. In addition, the
AML/CFT/CFP Regime created the Financial Information Unit (“UIF”, for its acronym in Spanish) as the enforcement authority of the
regime, and established the legal obligation of various public and private sector entities and professionals to provide information and
cooperate with the UIF.
The UIF is a decentralized agency that operates with autonomy and financial independency under the Argentine Ministry of
Justice, and its mission is to prevent and deter the crimes of money laundering, terrorist financing and proliferation of weapons of mass
destruction.
The following are certain provisions relating to the AML/CFT/CFP Regime established by the AML/CFT/CFP Law, including
regulations issued by the UIF, the CNV and the Central Bank.
Money Laundering, Terrorist Financing and Proliferation of Weapons of Mass Destruction
(a) Money laundering
Section 303 of the Argentine Criminal Code (the “ACC”) defines money laundering as a crime committed whenever a person
converts, transfers, manages, sells, encumbers, acquires, conceals or in any other way puts into circulation in the market, property
derived from an unlawful act, with the possible consequence that the origin of the original property or the subordinate property acquires
the appearance of a lawful origin, provided that their value exceeds the sum of one hundred and fifty (150) minimum wages (which, as
of the date of this annual report, equal to approximately Ps. 30,420,000), either in a single act or by the repetition of various acts linked
to each other. Section 303 of the ACC establishes the following penalties:
(i)
Imprisonment for a term of three (3) to ten (10) years and fines of two (2) to ten (10) times the amount of the illicit
transaction. This penalty may be increased by one third of the maximum and half of the minimum, when the perpetrator
of the crime:
(a)
regularly commits such crimes or participates in organizations or associations specially designed for
committing such crimes;
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(b)
is a public official who committed the act in the exercise or occasion of their duties. In this case, he/she
shall also be subject to a penalty of special disqualification of three (3) to ten (10) years. The same penalty
shall be imposed to anyone who has acted in the exercise of a profession or occupation requiring special
qualification.
(ii)
Anyone who receives money or other property from a criminal offense for the purpose of applying them in an
operation as described above, which gives them the possible appearance of a lawful origin, shall be punished with
imprisonment for a term of six (6) months to three (3) years.
(iii)
If the value of the goods does not exceed 150 minimum wages, the penalty shall be a fine of five (5) to twenty (20)
times the amount of the illicit transaction.
(b) Penalties for legal persons
Furthermore, Section 304 of the ACC provides that when the criminal acts have been committed in the name of, or with the
intervention of, or for the benefit of a legal person, the following sanctions shall be imposed to the entity jointly or alternatively:
(i)
(ii)
(iii)
(iv)
fine of two (2) to ten (10) times the value of the property subject to the offense;
total or partial suspension of activities, which in no case shall exceed ten (10) years;
debarment for public tenders or bidding processes or any other State-related activities, which in no case shall exceed
ten (10) years;
dissolution and liquidation of the legal person when it was created for the sole purpose of committing the offense, or
such acts constitute the main activity of the entity;
(v)
loss or suspension of any State benefit that it may have;
(vi)
publication of an extract of the condemnatory sentence at the expense of the legal entity.
In order to calibrate these sanctions, the Court will take into account the failure to comply with internal rules and procedures,
the omission of vigilance over the activity of the authors and participants; the extent of the damage caused, the amount of money involved
in the commission of the offense, the size, nature and economic capacity of the legal entity. In the cases in which it is essential to
maintain the operational continuity of the entity, or of a public work, or particular service, the sanctions of suspension of activities or
dissolution and liquidation of the legal person shall not be applicable.
(c) Terrorist Financing and Proliferation of Weapons of Mass Destruction
Section 306 of the ACC criminalizes the financing of terrorism and the proliferation of weapons of mass destruction. This
offense is committed by any person who directly or indirectly collects or provides property or money, with the intention of it being used,
or in the knowledge that it will be used, in full or in part:
(i)
to finance the commission of acts which have the aim of terrorizing the population or compelling national public
authorities or foreign governments or agents of an international organization to perform or refrain from performing
an act (according to section 41.5 of the ACC);
(ii)
by an organization committing or attempting to commit crimes for the purpose set out in (i);
(iii)
(iv)
by an individual who commits, attempts to commit or participates in any way in the commission of offenses for the
purpose set out in (i);
to finance, for themselves or for third parties, the travel or logistics of individuals and/or things to a State other than
that of their residence or nationality, or within the same national territory for the purpose of perpetrating, planning,
preparing or participating in the purpose set out in (i);
(v)
to finance, for themselves or for third parties, the provision or receipt of training for the commission of offenses for
the purpose set out in (i);
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(vi)
to finance the acquisition, production, development, possession, supply, exportation, importation, storage,
transportation, transfer, or in any way the use of weapons of mass destruction of the nuclear, chemical, biological
type, their delivery systems, means of delivery and their related materials, including dual-use technologies and
goods to commit any of the crimes provided for in the ACC or in international regulations.
The penalty is imprisonment for a term of five (5) to fifteen (15) years and a fine of two (2) to ten (10) times the amount of the
illicit transaction. Likewise, the same penalties shall apply to legal persons as described for the crime of money laundering.
The same penalty of imprisonment and fine shall apply to anyone who produces, manufactures, develops, possesses, supplies,
exports, imports, stores, transports, transfers, employs, or in any way proliferates, increases, reproduces or multiplies the weapons of
mass destruction referred to in (vi) above, their means of delivery and related materials intended for their preparation.
The penalties described above will be applied regardless of the occurrence of the crime for which the financing was intended
and, if the latter is committed, regardless of whether the goods or money were used for its commission.
Reporting Subjects Obliged to Inform and Collaborate with the UIF
The AML/CFT/CFP Regime, in line with international AML/CFT/CFP standards, not only designates the UIF as the agency
in charge of preventing money laundering, terrorism financing and proliferation of weapons of mass destruction, but also establishes
certain obligations to various public and private sector entities and individuals, which are designated as Reporting Subjects (in Spanish,
“Sujetos obligados”), which are legally bound to inform and collaborate with the UIF.
In accordance with the AML/CFT/CFP Law and the regulations complementing it, the following persons, among others, are
Reporting Subjects before the UIF:
(i)
(ii)
(iii)
(iv)
banks, financial entities and insurance companies;
exchange agencies and natural and legal persons authorized by the Central Bank to intervene in the purchase and
sale of foreign currency with funds in cash or checks issued in foreign currency or through the use of debit or credit
cards or in the transfer of funds within or outside the national territory;
virtual asset service providers, non-financial credit providers, issuers, operators and/or providers of collection and/or
payment services, central securities depository agents and corporate and trust service providers
settlement and clearing agents, trading agents; natural and/or legal persons registered with the CNV acting in the
placement of investment funds or other collective investment products authorized by such agency; crowdfunding
companies, global investment advisors and the legal persons acting as financial trustees whose trust securities are
authorized for public offering by the CNV, and the agents registered by the above mentioned controlling agency that
intervene in the placement of negotiable securities issued within the framework of the above mentioned financial
trusts;
(v)
government organizations such as the Central Bank, the Federal Public Revenue Administration (“AFIP,” as per its
acronym in Spanish), the Superintendence of Insurance of the Nation (“SSN,” as per its acronym in Spanish), the
CNV and the IGJ; and
(vi)
professionals in economic sciences, lawyers and notaries public, when they are involved in certain transactions.
The Reporting Subjects have the following duties:
(i)
(ii)
obtaining from clients’ documents that indisputably prove their identity, legal status, domicile and other information,
concerning their operations needed to accomplish the intended activity (“know your customer” policy);
reporting any suspicious events or transactions. For the purposes of the Anti-Money Laundering Law, suspicious
transactions are those transactions that, according to the customary practices of the relevant field as well as to the
experience and competence of the parties who have the duty to inform, appear to be unusual, have no economic or
legal justification, or are unusually or unjustifiably complex, whether performed on a single occasion or repeatedly
(regardless of their amount);
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(iii)
refraining from disclosing to customers or third parties any actions being taken in compliance with the Anti-Money
Laundering Law;
(iv)
registering before the UIF;
(v)
(vi)
documenting procedures for the prevention of money laundering, financing of terrorism and financing of the
proliferation of weapons of mass destruction establishing internal manuals that reflect the tasks to be developed with
a risk based approach;
appointing compliance officers within the governing body who shall be responsible before the UIF (in case the
obliged entity is an individual, such individual will be considered the compliance officer);
(vii)
obtaining information and determining the purpose and nature of the relationship with the client;
(viii)
determining the risk of money laundering, terrorism financing and financing of proliferation of weapons of mass
destruction associated to clients and transactions;
(ix)
(x)
(xi)
(xii)
carriyng out due diligence procedures to (i) determine the risk of money laundering, terrorism financing and
financing of proliferation of weapons of mass destruction associated to clients and transactions, and (ii) review
transactions during the course of the relationship with the client;
identifying the individuals who exercise functions of management and representation of the client and those who
have powers of disposition;
adopting specific measures to mitigate the risk of money laundering, terrorism financing and financing of
proliferation of weapons of mass destruction;
having appropriate risk management systems in place to determine whether the client or final beneficial owner is a
politically exposed person;
(xiii)
determining the source and legality of funds; and
(xiv)
keeping, for ten (10) years, all necessary records of transactions, client files and business communications.
If a Reporting Subject fails to report a suspicious transaction or submits it after the designated deadlines and forms provided
for that purpose, a fine between one (1) and ten (10) times the total value of the assets of the transaction will be applied. In the case of
other violations (due to formal non-compliance), the fixed amounts as the unit of measurement of the fine are replaced by modules
that can be updated annually. In addition, the following penalties may apply: (i) warning; (ii) warning with the obligation to publish
the operative part of the resolution; and (iii) for compliance officers, disqualification for up to 5 years to exercise functions in such
capacity.
Pursuant to Annex I of Resolution No. 61/2023 of the UIF (which establishes the supervision and inspection mechanism of the
UIF), both the Central Bank and the CNV are considered “Specific Control Agencies”(“Órganos de Contralor Específico”). In such
capacity, they must collaborate with the UIF in the evaluation of compliance with AML/CFT/CFP procedures by the Reporting Subjects
subject to their control. For these purposes, they are entitled to supervise, monitor and inspect these entities. Denial or obstruction of
inspections by the Reporting Subjects may result in administrative penalties by the UIF and criminal penalties.
The Central Bank and the CNV must also comply with the AML/CFT/CFP Regime established by the UIF, including the
reporting of suspicious transactions. In turn, Reporting Subjects regulated by these agencies are subject to UIF Resolutions No. 14/2023
and 78/2023, respectively. Such regulations provide guidelines that such entities shall adopt and apply to manage, in accordance with
their policies, procedures and controls, the risk of being used by third parties for criminal purposes of money laundering, financing of
terrorism and proliferation of weapons of mass destruction.
Essentially, the aforementioned regulations, change the formal regulatory compliance approach to a risk-based approach
(“RBA”), based on the revised recommendations issued by the Financial Action Task Force (the “FATF”) in 2012, in order to ensure
that the implemented measures are proportional to the identified risks. Therefore, the Reporting Subjects shall identify and evaluate their
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risks and, based on this, adopt measures for the management and mitigation of such risks, in order to more effectively prevent money
laundering and terrorist financing. Likewise, the provisions of UIF Resolution No. 4/17 established the possibility of conducting special
due diligence procedures with respect to clients supervised abroad (formerly called “international holders”) and local clients who are
Reporting Subjects to the UIF.
Resolution 14/2023, which sets out specific rules for the financial sector, inter alia, prohibits the maintenance of anonymous
accounts or accounts under fictitious names, emphasizes the need to apply enhanced due diligence measures to clients commensurate
with the risks identified, and provides for the possibility for financial institutions to rely on third parties to carry out certain due diligence
measures.
In October 2021, the UIF published Resolution 112/2021 which established certain measures and procedures that all Regulated
Subjects must observe to identify beneficial owners. All companies, legal entities or other contractual entities or legal structures that
carry out activities in Argentina, or own property or assets located or placed in Argentina must register their final beneficiaries with the
public registry of final beneficiaries. All persons or legal entities that provide virtual asset services must register their activities with the
registry of virtual asset service providers.
Prevention of Disposal of Assets Linked to Terrorism Financing
Decree No. 918/2012 (amended by Decree No. 278/2024) establishes the procedures for preventing the disposal of assets linked
to terrorism financing, and the creation and maintenance procedures (including the inclusion and removal of suspected persons) for
registries created in accordance with the relevant United Nations Security Council’s resolutions.
Additionally, UIF Resolution No. 29/2013, regulates the implementation of Decree No. 918/2012 and establishes: (i) the
procedure to report suspicious transactions of terrorism financing and the persons obligated to do so, and (ii) the administrative freezing
of assets procedure on natural or legal persons or entities designated by the United Nations Security Council pursuant to Resolution
1267 (1999) and subsequent, or linked to criminal actions under Section 306 of the Argentine Criminal Code, both prior to the report
issued pursuant to UIF Resolutions No. 121 and 229, and as mandated by the UIF after receiving such report.
In order to help the Reporting Subjects to fulfill these duties, Executive Decree No. 489/2019 created the Public Registry of
Persons and Entities linked to acts of Terrorism and its Financing (RePET, for its acronym in Spanish), which is an official database
that includes the consolidated list of the United Nations Security Council.
Politically Exposed Persons
Resolution No. 35/2023, establishes the rules that Reporting Subjects must follow regarding clients that are Politically Exposed
Persons (“PEP”).
Following the aforementioned RBA, Resolution 35/2023 establishes that Reporting Subjects must determine the level of risk
at the time of beginning or continuing the contractual relationship with a PEP, and must take due diligence measures, adequate and
proportional to the associated risk and the operation or operations involved.
This Resolution establishes (i) the measures that the Reporting Subjects must take with respect to foreign PEPs or domestic
PEPs that have been classified as high risk by the Reporting Subject, for example, having the approval of the compliance officer to
initiate or continue commercial relations with them; (ii) each Reporting Subject must take reasonable measures to determine whether a
customer and/or beneficial owner is a PEP, at the time of initiating or continuing the commercial relationship with them; (iii) the
Reporting Subject must require their clients to sign a sworn statement in which they state whether or not they are a PEP, not only at the
beginning of the contractual relationship, but also in the event that their status as a PEP is modified (whether they become or cease to
be a PEP); (iv) the clients must inform the PEP status of the beneficial owners, if applicable; and (v) the maintenance period of the PEP
status is expressly regulated, being set at 2 years. Once this term has expired, the Reporting Subject shall evaluate the level of risk of
the client or beneficial owner, taking into consideration the relevance of the function performed, the power of disposition and/or
administration of funds, and the seniority in the public function exercised, among other relevant factors, for the analysis of the level of
risk. PEPs due to kinship or closeness will maintain their status for the same time as that of the person with whom they have or have
had the relationship.
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CNV Regulations
The CNV Rules stipulate, among other provisions, that the reporting subjects under its control shall only perform the operations
provided for under the public offering system when these operations are performed or ordered by persons constituted, domiciled or
resident in countries, domains, jurisdictions, territories or associated states not considered to be non-cooperative or high risk by the
FATF.
Similarly, they establish the payment modalities and control procedures for the reception and delivery of funds from and to
clients.
Central Bank Rules
Pursuant to Communication “A” 6399 of the Central Bank, as amended and supplemented, including without limitation, by
Communication “A” 6709, Reporting Subjects must keep - for a period of 10 years - written records of the procedure applied in each
case for the discontinuation of a client’s operations. Among these records, they shall keep a copy of any notification sent to the customer
requesting further information and/or documentation, the corresponding notices of receipt and the documents identifying the officials
who took part in the decision, in accordance with the respective procedural manuals.
Tax Amnesty System
The voluntary system of declaration under the Argentine Tax Amnesty Law No. 27,260 and its Regulatory Decree No. 895/16
(jointly the “Tax Amnesty System”) established that the information voluntarily submitted under such system may be used for the
investigation and punishment of the crimes of money laundering and financing of terrorism. For such purpose, the UIF has the power to
communicate information to other public intelligence or investigation agencies, based on a previous resolution of the UIF’s President
and provided that there are serious, precise and concordant indications of the commission of money laundering and/or terrorism financing
crimes. Furthermore, the AFIP remains obliged to report to the UIF suspicious operations detected within the framework of the Tax
Amnesty System and to provide it with all information required by it, not being able to oppose fiscal secrecy.
Corporate Criminal Liability Law
The Corporate Criminal Liability Law No. 27,401 sets forth a criminal liability regime applicable to legal entities involved in
certain corruption offenses directly or indirectly committed in their name, on their behalf or in their interest and from which a benefit
may arise. The individual offenders may be employees or third parties — even unauthorized third parties, provided that the company
ratified the act, even tacitly.
Item 4.C Organizational structure
The following diagram illustrates our organizational structure as of the date of this annual report. Percentages indicate the
ownership interest held.
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The following information is related to our subsidiaries and investees as of the date of this annual report:
Subsidiary
Banco Supervielle S.A.
Supervielle Seguros S.A.
Supervielle Asset Management S.A. Sociedad Gerente
de Fondos Comunes de Inversión S.A.
Espacio Cordial de Servicios S.A.
Micro Lending S.A.U.
InvertirOnline S.A.U.
Portal Integral de Inversiones S.A.U.
Supervielle Productores Asesores de Seguros S.A.
Supervielle Agente de Negociación S.A.U.
Bolsillo Digital S.A.U.
Sofital S.A.U.F. e I.
Dólar IOL S.A.U.
IOL Holding S.A.
IOL Agente de Valores S.A. (1)
(1) IOL Agente de Valores S.A. is a subsidiary of IOL Holding S.A.
Banco Supervielle S.A.
Jurisdiction of
incorporation
Argentina
Argentina
Name under which the subsidiary does
business
Supervielle
Supervielle Seguros
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Argentina
Uruguay
Uruguay
Uruguay
Supervielle Asset Management
Cordial
MILA
IOL invertironline
IOL invertironline / IOL Academy
Supervielle Broker de Seguros
Supervielle Agente de Negociación
N/A
N/A
N/A
N/A
N/A
We own 97.12% of the share capital of the Bank and Sofital owns 2.78%. The Bank is a universal commercial bank and our
largest subsidiary. The Bank on an individual basis accounted for 95.8% of our total assets as of December 31, 2023. The Bank operates
in Argentina, and substantially all of its customers, operations and assets are located in Argentina. It offers a wide variety of financial
products and services to retail, corporate and institutional customers.
According to the information published by the Central Bank, as of December 31, 2023 we were one of the top 10 private banks
in the Argentine financial system in terms of outstanding amount of loans and deposits. In terms of deposits, we had an estimated market
share of 2.6% of daily average deposits as of December, 2023, ranking ninth among the total private banks in the Argentine financial
system. In terms of total loans, we had an estimated market share of 2.4% of daily average loans as of December 2023, ranking eighth
among the total private banks in the Argentine financial system. As of December 31, 2023, the Bank on a consolidated basis had total
110
assets of Ps.1,978 billion, a total loan portfolio of Ps.482 billion and total deposits of Ps.1,549 billion, and its attributable shareholders’
equity amounted to Ps.269.6 billion. For more information regarding the Bank’s business performance, see “—Business Segments.”
Espacio Cordial de Servicios S.A.
Espacio Cordial was created in October 2012 and began operating in December 2012. Espacio Cordial provides non-financial
services in Argentina related to insurance, tourism, health care services, security and other contemplated in the bylaws of this business
unit. We have direct service channels across the Bank’s branches located in Argentina. In the services category, we continued marketing
prepaid health services through telephone and online channels, with a strong strategy in social media and aiming at the development of
digital self-management products.
Until March 4, 2024, Cordial Servicios owned 3.20% of the share capital of Sofital. On March 4, 2024, Grupo Supervielle
purchased from Espacio Cordial all the shares that Espacio Cordial owned in Sofital S.A.U.F. and I., totaling 689,238 ordinary shares,
non-transferable and with a nominal value of one Peso, each with one vote per share, representing 3.20% of the total shares of Sofital
S.A.U.F. and I.
We own 95% of the share capital of Cordial Servicios and Sofital owns the remaining 5%. Until 2022, Grupo Supervielle had
a Consumer Finance segment which included Cordial Servicios, among other subsidiaries. On December 1, 2023, the Central Bank
approved the merger of IUDÚ into the Bank, and therefore IUDÚ and Tarjeta were merged into the Bank, effective January 2023. As a
result of this merger, the Company reclassified financial figures from Consumer Finance segment in 2023 and allocated the results of
Cordial Servicios in the Asset management & other segment.
For more information regarding the Espacio Cordial’s business performance, see “—Business Segments.”
Micro Lending S.A.U.
MILA is a company that provides car financing loans and was acquired by Grupo Supervielle on May 2, 2018. We own 100%
of the share capital of MILA. MILA promotes origination of car loans for the purchase of cars through greater efficiency and capillarity
of the commercial network, new financial products and the use of synergies within the companies of Grupo Supervielle.
Until 2022, Grupo Supervielle had a Consumer Finance segment which included MILA, among other subsidiaries. On
December 1, 2023, the Central Bank approved the merger of IUDÚ into the Bank, and therefore IUDÚ and Tarjeta merged into the
Bank, effective January 2023. As a result of this merger, the Company reclassified financial figures from Consumer Finance segment
in 2023 and allocated the results of MILA in the Personal & Business Banking segment.
Supervielle Seguros S.A.
In June 2013, we and Sofital purchased 100% of the shares of Supervielle Seguros (formerly, Aseguradores de Créditos del
Mercosur S.A.), which began to operate in October 2014.
Through Supervielle Seguros, the Company offers a wide range of insurance products to its clients. These are marketed through
our network of branches, across various digital channels, and through the insurance specialized sales force which is focused on two
major customer segments: Senior Citizens, and Entrepreneurs and SMEs.
For more information regarding the Supervielle Seguros’ business performance, see “—Business Segments.”
Supervielle Productores Asesores de Seguros S.A.
On December 21, 2018, we created Supervielle Productores Asesores de Seguros and began to operate in the second half of
2019. Its purpose is to offer a wide range of products to clients in the E&P, SMEs, and Medium and Large Corporates segments, ensuring
adequate coverage for their risks at competitive prices with the leading insurers in the market. As of the date of this annual report, the
Company’s commercial focus on corporate insurance is on offering occupational risk administrator services, fleet, integral commerce,
surety, and agricultural insurances, among others. We directly own 95.24% and indirectly own 100.0% of the share capital of Supervielle
Productores Asesores de Seguros.
111
For information regarding Supervielle Productores Asesores de Seguros’ business performance, see “—Business Segments.”
Supervielle Asset Management S.A.
Supervielle Asset Management offers customized investment and savings solutions to its clients through investment funds. We
participate in the mutual funds market through our “Premier” funds family.
We own 95% of the share capital of SAM and Sofital owns the remaining 5%.
For information regarding Supervielle Asset Management’s business performance, see “—Business Segments.”
Invertironline S.A.U. and Portal Integral de Inversiones S.A.U.
IOL invertironline is a digital online broker established 23 years ago that offers brokerage and savings and investment services
based on an agile, simple, transparent and innovative platform, suitable for the profile of each client, with the objective of helping our
clients increase their savings.
IOL invertironline offers investment alternatives in the Argentine stock market and in the United States and provides our
customers with education tools on financing matters.
We own 100% of the share capital of InvertirOnline and Portal Integral de Inversiones S.A.U.
For information regarding IOL invertironline’s business performance, see “—Business Segments.”
Bolsillo Digital S.A.U.
On June 12, 2019, we created Bolsillo Digital. Bolsillo Digital is Grupo Supervielle’s PSP (“Payment Service Provider”)
fintech business which is registered with the Argentine Central Bank. Bolsillo Digital offered in-person and digital payment and
collection solutions to businesses. On August 5, 2021, Grupo Supervielle, within the framework of the commercial strategy for its
payment services business, transferred all of its shares of Bolsillo Digital to its subsidiary Banco Supervielle S.A. Bolsillo Digital’s
main activity until 2022 was to provide payment services under its brand Boldi. In February 2023, the Boldi app was permanently
closed. As of the date of this annual report, Bolsillo Digital is in the process of being dissolved.
Supervielle Agente de Negociación S.A.U. (formerly, known as Futuros del Sur S.A.)
Supervielle Agente de Negociación provides trading agent services and is registered with the CNV. We acquired Supervielle
Agente de Negociación in 2019 to expand our financial and investment services to institutional and corporate customers and increase
cross selling in an efficient and profitable way.
We own 100% of the share capital of Supervielle Agente de Negociación.
IOL Holding S.A. and IOL Agente de Valores. S.A.
On August 6, 2021, Grupo Supervielle acquired 95% of the shares of IOL Holding, a company incorporated in Uruguay. Sofital
acquired the remaining 5% of the shares of IOL Holding.
On August 23, 2021, IOL Holding acquired 100% of the shares of IOL Agente de Valores S.A., a company incorporated in
Uruguay which is expected to provide security dealer services. On June 16, 2022, the Central Bank of Uruguay authorized IOL Agente
de Valores to act as a security dealer providing services to non-residents of Uruguay. IOL Agente de Valores S.A. is expected to provide
its services through an online platform to non-residents of Uruguay who may be based in Latin America and seek to participate in the
U.S. capital markets.
112
Sofital S.A.U.F. e I.
Sofital is a holding company that owns shares of the same companies owned by Grupo Supervielle. As of the date of this
annual report, Sofital holds 2.7784% of the capital stock of the Bank, 5.0% of the capital stock of Cordial Servicios, 5.0% of the
capital stock of Supervielle Seguros, 5.0% of the capital stock of SAM, 4.75903% of Supervielle Productores Asesores de Seguros
and 0.005% of IOL Holding. On March 19, 2024, our ordinary and extraordinary shareholders’ meeting approved the change of the
legal status of Sofital to private single-entity limited company (“sociedad anónima unipersonal” or “S.A.U.”). As of the date of this
annual report, this change is pending to be approved by the IGJ.
Item 4.D
Property, plants and equipment
The Bank owns 7,916 square meters of office space at Reconquista 330 and at San Martin 344 in Buenos Aires and Mendoza,
for management, administrative and other commercial purposes and for central area personnel. The Bank also owns 15,208 square
meters for retail branch properties in Mendoza, Córdoba, San Luis and Buenos Aires, and 631 square meters of land in the City of San
Luis.
Supervielle Seguros owns 1,954 square meters of office space located at Reconquista 330 in Buenos Aires.
The rest of our administrative buildings and offices (including our headquarters), branches, sales and collection centers and
storage properties are leased pursuant to arm’s length agreements.
Item 4.E
Selected Statistical Information
You should read this information in conjunction with our audited consolidated financial statements and related notes, and the
information under “Item 5.A. Operating Results” included elsewhere in this annual report. We prepared this information from our
financial statements, which are prepared in conformity with IFRS. For further information, see Note 1.1 and Note 2 to our audited
consolidated financial statements.
Average Balance Sheets, Interest earned on Interest-earning Assets and Interest Paid on Interest-bearing Liabilities
The average balances of our interest-earning assets and interest-bearing liabilities, including the related interest that is
receivable and payable, are calculated on a daily basis.
Average balances have been separated between those denominated in Pesos and those denominated in U.S. dollars. The nominal
interest rate is the amount of interest earned or paid during the period divided by the related average balance.
The following tables show average balances, interest amounts and nominal rates for our interest-earning assets and interest-
bearing liabilities for the years ended December 31, 2023, 2022 and 2021.
2023
Average
Balance
Interest
Earned
Average
Nominal
Rate
Year ended December 31,
2022
Average
Balance
Interest
Earned
(in thousands of Pesos)
Average
Nominal
Rate
Average
Balance
2021
Interest
Earned
Average
Nominal
Rate
ASSETS
Interest-Earning Assets
Investment Portfolio
Government and
Corporate Securities
Pesos
Dollars
Securities Issued by the
Central Bank
Pesos
Dollars
228,307,670 205,593,241
159,577,829 146,983,348
58,609,893
68,729,841
454,651,402 420,667,047
452,310,291 420,667,047
—
2,341,111
90.1 % 213,597,053
92.1 % 172,068,120
85.3 % 41,528,933
99,898,491
88,872,066
11,026,425
46.8 % 234,246,642
51.6 % 168,460,460
26.6 % 65,786,182
64,336,770
63,709,097
627,673
92.5 % 635,888,704 338,613,619
93.0 % 635,888,704 338,613,619
—
— %
—
53.3 % 381,867,514 141,189,141
141,189,141
53.3 % 381,867,514
—
—
— %
27.5 %
37.8 %
1.0 %
37.0 %
37.0 %
— %
113
Total Investment
Portfolio
Pesos
Dollars
Loans
Loans to the Financial
Sector
Pesos
Dollars
Overdrafts
Pesos
Dollars
Promissory notes
Pesos
Dollars
Mortgage loans
Pesos
Dollars
Automobile and Other
Secured Loans
Pesos
Dollars
Personal Loans
Pesos
Dollars
Corporate Unsecured
Loans
Pesos
Dollars
Credit Card Loans
Pesos
Dollars
2023
Year ended December 31,
2022
2021
Average
Balance
Interest
Earned
Average
Nominal
Rate
Average
Balance
Interest
Earned
Average
Nominal
Rate
Average
Balance
Interest
Earned
Average
Nominal
Rate
682,959,072
611,888,120
71,070,952
626,260,288
567,650,395
58,609,893
91.7 % 849,485,757
92.8 % 807,956,824
82.5 % 41,528,933
438,512,110
427,485,685
11,026,425
51.6 % 616,114,156
52.9 % 550,327,974
26.6 % 65,786,182
205,525,911
204,898,238
627,673
33.4 %
37.2 %
1.0 %
266,747
251,226
15,521
23,471,096
23,471,096
—
64,028,835
64,005,159
23,676
56,407,739
56,407,739
—
13,122,573
13,122,573
—
92,146,481
92,146,481
—
50,712,155
50,712,155
—
45,870,806
45,870,588
218
— %
42.4 %
248,639
50.3 %
241,222
7,417
11.9 %
58.7 % 44,776,965
58.7 % 44,776,965
—
47.0 % 168,814,495
47.1 % 168,537,370
4.6 %
277,125
71.4 % 94,853,591
71.4 % 94,853,591
—
— %
76,136
71,271
4,865
19,005,463
19,005,463
—
67,907,774
67,896,443
11,331
42,843,344
42,843,344
—
— %
53.7 % 19,172,698
53.7 % 19,172,698
—
9,393,312
9,393,312
—
66.3 % 180,754,798 117,692,377
117,692,377
66.3 % 180,754,798
—
—
— %
— %
41.9 % 123,932,516
41.9 % 123,932,516
—
28.3 % 162,153,455
29.1 % 160,216,726
1,936,729
— %
41,967,396
41,967,396
—
35,957,059
35,956,938
121
30.6 %
29.5 %
65.6 %
42.4 %
42.4 %
— %
40.2 %
40.3 %
4.1 %
45.2 %
45.2 %
— %
49.0 %
49.0 %
— %
65.1 %
65.1 %
— %
33.9 %
33.9 %
— %
22.2 %
22.4 %
— %
2,423,357
2,378,743
44,614
47,376,656
47,376,656
—
88,661,948
88,046,151
615,797
70,185,435
70,185,435
—
1,296,393
1,296,320
73
44,410,794
44,410,794
—
67,470,691
67,443,717
26,974
62,359,572
62,359,572
—
20,589,065
20,589,065
—
80,141,775
80,141,775
—
12,574,777
12,574,777
—
66,454,064
66,454,064
—
124,706,925
124,706,925
—
104,462,883
101,540,510
2,922,373
96,127,460
96,127,460
—
42,005,274
42,005,226
48
— %
53.5 %
629,394
54.5 %
499,464
129,930
0.2 %
93.7 % 39,986,427
93.7 % 39,984,408
2,019
76.1 % 136,285,752
76.6 % 135,767,254
518,498
4.4 %
88.8 % 78,972,720
88.8 % 78,972,720
—
— %
— %
61.1 % 24,428,584
61.1 % 24,428,584
—
82.9 % 139,004,401
82.9 % 139,004,401
—
— %
— %
77.1 % 120,912,394
77.1 % 120,912,394
—
40.2 % 161,831,666
41.4 % 157,610,853
4,220,813
— %
114
2023
Year ended December 31,
2022
2021
Average
Balance
Interest
Earned
Average
Nominal
Rate
Average
Balance
Interest
Earned
Average
Nominal
Rate
Average
Balance
Interest
Earned
Average
Nominal
Rate
28,417,785
25,916,803
2,500,982
17,868,411
17,508,319
360,092
62.9 %
67.6 %
14.4 %
35,301,661
30,707,262
4,594,399
14,262,772
13,972,643
290,129
40.4 %
45.5 %
6.3 %
33,085,869
20,603,793
12,482,076
9,591,486
8,699,152
892,334
29.0 %
42.2 %
7.1 %
566,965,829
560,882,063
6,083,766
410,567,436
410,180,249
387,187
72.4 % 737,352,999 360,289,204
727,887,340 359,959,660
73.1 %
329,544
6.4 %
9,465,659
48.9 % 827,793,026 344,434,347
343,525,696
49.5 %
908,651
3.5 %
813,089,679
14,703,347
41.6 %
42.2 %
6.2 %
39,330,529
—
39,330,529
606,296,358
560,882,063
45,414,295
277,323,918
277,323,918
—
3,180,061
—
3,180,061
413,747,497
410,180,249
3,567,248
222,993,972
222,993,972
—
61,270,504
—
61,270,504
4,010,233
8.1 %
—
— %
4,010,233
8.1 %
68.2 % 798,623,503 364,299,437
727,887,340 359,959,660
73.1 %
4,339,777
70,736,163
7.9 %
33,012,027
66,715,957
80.4 %
33,012,027
66,715,957
80.4 %
—
—
— %
7,543,368
6.5 % 111,682,426
—
— %
—
7,543,368
111,682,426
6.5 %
45.6 % 939,475,452 351,977,715
343,525,696
49.5 %
6.1 %
8,452,019
49.5 % 310,469,704 107,496,714
107,496,641
49.5 %
73
— %
310,469,704
—
813,089,679
126,385,773
1,566,579,348 1,263,001,757
1,450,094,101 1,200,824,616
62,177,141
116,485,247
6.8 %
— %
6.8 %
37.5 %
42.2 %
6.7 %
34.6 %
34.6 %
— %
35.6 %
39.2 %
4.7 %
Receivables from
Financial Leases
Pesos
Dollars
Total Loans excl.
Foreign trade and
U.S.$.loans
Pesos
Dollars
Foreign Trade
Loans and
U.S.$.loans
Pesos
Dollars
Total Loans
Pesos
Dollars
Repo transactions
Pesos
Dollars
Total Interest-
Earning Assets
Pesos
Dollars
80.6 % 1,714,825,217 835,823,574
82.8 % 1,602,560,121 820,457,372
15,366,202
53.4 %
112,265,096
48.7 % 1,866,059,312 665,000,340
655,920,575
51.2 % 1,673,887,357
9,079,765
192,171,955
13.7 %
115
2023
Year ended December 31,
2022
2021
Average
Balance
Average
Interest Nominal
Earned Rate
Average
Balance
Average
Interest Nominal
Earned Rate
Average
Balance
Average
Interest Nominal
Earned Rate
Non Interest-Earning Assets
Cash and due from banks
Pesos
Dollars
Premises and equipment and miscellaneous and
intangible assets and unallocated items
Pesos
Dollars
Allowance for loan losses
Pesos
Dollars
Other assets
Pesos
Dollars
202,633,135
81,415,824
121,217,311
148,375,389
148,375,389
—
(24,733,799)
(22,618,231)
(2,115,568)
158,248,047
153,072,289
5,175,758
214,672,876
109,160,413
105,512,463
158,260,041
158,260,041
—
(42,645,599)
(38,384,616)
(4,260,983)
164,669,363
160,749,564
3,919,799
278,126,190
127,377,488
150,748,702
158,393,727
158,393,727
—
(72,355,519)
(63,691,217)
(8,664,302)
189,746,118
183,768,369
5,977,749
2023
Year ended December 31,
2022
2021
Average
Balance
Average
Interest Nominal Average
Balance
Earned Rate
Average
Interest Nominal Average
Balance
Earned Rate
Average
Interest Nominal
Earned Rate
Total Non Interest-Earning Assets
Pesos
Dollars
Total Assets
Pesos
Dollars
484,522,772
360,245,271
124,277,501
2,051,102,120
1,810,339,372
240,762,748
494,956,681
389,785,402
105,171,279
2,209,781,898
1,992,345,523
217,436,375
553,910,516
405,848,367
148,062,149
2,419,969,828
2,079,735,724
340,234,104
116
LIABILITIES
Interest-Bearing
Liabilities
Special
Checking
Accounts
Pesos
Dollars
Time Deposits
Pesos
Dollars
Borrowings
from Other
Financial
Institutions and
Unsub
Negotiable
Obligations
Pesos
Dollars
Subordinated
Loans and
Negotiable
Obligations
Pesos
Dollars
Total Interest-
Bearing
Liabilities
Pesos
Dollars
2023
Year ended December 31,
2022
2021
Average
Balance
Interest
Paid
Average
Nominal
Rate
Average
Balance
Interest
Paid
Average
Nominal
Rate
Average
Balance
Interest
Paid
Average
Nominal
Rate
(in thousands of Pesos)
535,525,590 374,828,604
470,487,902 374,674,049
65,037,688
154,555
518,912,586 439,013,593
504,637,536 438,950,685
62,908
14,275,050
70.0 % 549,638,508 211,185,912
490,110,056 211,032,372
79.6 %
0.2 %
153,540
59,528,452
84.6 % 610,457,165 295,156,580
590,957,540 295,082,101
87.0 %
74,479
19,499,625
— %
423,168,069
79,488,521
38.4 % 502,656,590 128,233,675
127,987,116
43.1 %
0.3 %
246,559
48.4 % 710,544,602 228,048,954
227,937,461
49.9 %
111,493
0.4 %
677,702,395
32,842,207
25.5 %
30.2 %
0.3 %
32.1 %
33.6 %
0.3 %
12,415,673
6,896,537
5,519,136
6,394,061
5,869,243
524,818
51.5 %
85.1 %
9.5 %
19,537,112
11,854,349
7,682,763
7,325,523
6,922,639
402,884
37.5 %
58.4 %
5.2 %
75,798,515
24,541,165
51,257,350
9,497,568
7,786,517
1,711,051
12.5 %
31.7 %
3.3 %
—
—
—
—
—
—
— %
— %
— %
—
—
—
—
—
—
— %
— %
— %
8,274,876
148,859
8,126,017
556,204
—
556,204
6.7 %
— %
6.8 %
1,066,853,849 820,236,258
982,021,975 819,493,977
742,281
84,831,874
76.9 % 1,179,632,785 513,668,015
83.4 % 1,092,921,945 513,037,112
630,903
0.9 %
86,710,840
43.5 % 1,297,274,583 366,336,401
363,711,094
46.9 % 1,125,560,488
2,625,307
171,714,095
0.7 %
28.2 %
32.3 %
1.5 %
2023
Year ended December 31,
2022
2021
Average
Balance
Average
Interest Nominal
Paid
Rate
Average
Balance
Average
Interest Nominal
Paid
Rate
Average
Balance
Average
Interest Nominal
Paid
Rate
(in thousands of Pesos)
Low and Non-Interest
Bearing Deposits
Savings Accounts
Pesos
Dollars
Checking Accounts
Pesos
Dollars
Other Liabilities
Pesos
Dollars
Non-Controlling Interest
Result
Pesos
Dollars
Stockholders’ equity
Pesos
Dollars
Total Low and Non-Interest
Bearing Deposits
Pesos
Dollars
Total Liabilities and
Stockholders’ equity
Pesos
Dollars
423,109,570
226,456,428 1,925,797
156,859,024 1,908,702
69,597,404
17,095
196,653,142
187,862,214
8,790,928
252,971,380
238,470,085
14,501,295
496,009,400
0.9 % 279,490,890 1,097,148
210,705,156 1,079,264
1.2 %
17,884
68,785,734
— %
216,518,510
207,178,834
9,339,676
231,644,168
211,828,643
19,815,525
552,986,255
0.4 % 330,749,069 611,235
586,583
0.5 %
24,652
— %
237,409,020
93,340,049
222,237,186
209,449,908
12,787,278
246,856,873
226,648,785
20,208,088
0.2 %
0.2 %
— %
1,295,651
1,295,651
—
306,871,669
306,871,669
—
984,248,270
891,358,643
92,889,627
2,051,102,119
1,873,380,618
177,721,501
953,062
953,062
—
301,542,483
301,542,483
—
1,030,149,113
932,208,178
97,940,935
2,209,781,898
2,025,130,123
184,651,775
117
—
—
—
322,852,118
322,852,118
—
1,122,695,246
996,359,831
126,335,415
2,419,969,829
2,121,920,319
298,049,510
Changes in Interest Income and Interest Expense; Volume and Rate Analysis
The following tables allocate, by currency of denomination, changes in our interest income and interest expense. The changes
are segregated for each major category of interest-earning assets and interest-bearing liabilities into amounts attributable to changes in
the average volume and changes in their respective nominal interest rates for the year ended December 31, 2023 compared to the year
ended December 31, 2022, and for the year ended December 31, 2022 compared to the year ended December 31, 2021. We have
calculated volume variances based on movements in average balances over the period and rate variance based on changes in interest
rates on average interest-earning assets and average interest-bearing liabilities. We have allocated variances caused by changes in both
volume and rate to volume. As stated above under “Presentation of Financial and Other Information,” we have prepared our audited
consolidated financial statements for 2023, 2022 and 2021 under IFRS.
118
ASSETS
Interest-Earning Assets
Investment Portfolio
Government and Corporate Securities
Pesos
Dollars
Securities Issued by the Central Bank
Pesos
Dollars
Total Investment Portfolio
Pesos
Dollars
Year ended December 31,
2023/2022
2022/2021
Increase (Decrease) Due to Changes in
Volume
Rate
Net Change Volume
Rate
Change
(in thousands of Pesos)
Net
11,691,271
(11,504,510)
23,195,781
(4,577,255)
94,003,479 105,694,750
1,863,333
58,111,282
69,615,792
47,583,468
(6,440,588)
24,387,687
82,053,428 135,267,436
(170,735,423) 252,788,851
82,053,428 135,267,436
(170,735,423) 252,788,851
—
—
35,561,720
40,138,975
25,162,969
23,299,636
16,839,339
10,398,751
62,157,042 197,424,478
62,157,042 197,424,478
—
—
(159,044,152) 346,792,330 187,748,178 130,690,181 102,296,017 232,986,198
85,456,678 222,587,447
(182,239,933) 322,404,643 140,164,710 137,130,769
10,398,751
16,839,339
(6,440,588)
47,583,468
23,195,781
24,387,687
—
—
1,029,646
1,045,094
(15,448)
20,939,698
20,939,698
—
3,441,856
3,438,558
3,298
5,951,833
5,951,833
—
(547,796)
(547,796)
—
(25,692,417)
(25,692,417)
—
45,415,305
45,415,305
—
(3,865,532)
(3,865,362)
(170)
3,605,639
3,535,676
69,963
50,278,232
50,220,589
57,643
(830,172)
—
(830,172)
49,448,060
50,220,589
(772,529)
144,528
129,893
14,635
(2,813,261)
(2,813,261)
—
(15,437,891)
(15,448,913)
11,022
(11,343,208)
(11,343,208)
—
2,823,362
2,823,362
—
(27,676,477)
(27,676,477)
—
(1,266,677)
(1,266,677)
—
(758,287)
(758,405)
118
4,099,260
4,597,354
(498,094)
(52,228,651)
(51,756,332)
(472,319)
(3,299,525)
—
(3,299,525)
(55,528,176)
(51,756,332)
(3,771,844)
46,084
50,063
(3,979)
7,278,894
7,278,894
—
11,558,952
11,557,629
1,323
24,907,603
24,907,603
—
905,899
905,899
—
2,130,581
2,130,581
—
10,011,436
10,011,436
—
10,672,034
10,672,055
(21)
572,026
676,137
(104,111)
68,083,509
68,190,297
(106,788)
(233,610)
—
(233,610)
67,849,899
68,190,297
(340,398)
190,612
179,956
10,656
4,465,633
4,465,633
—
(3,878,939)
(3,891,284)
12,345
13,564,395
13,564,395
—
3,729,261
3,729,261
—
(25,545,896)
(25,545,896)
—
8,744,759
8,744,759
—
9,913,747
9,913,650
97
4,671,286
5,273,491
(602,205)
15,854,858
16,433,965
(579,107)
(3,533,135)
—
(3,533,135)
12,321,723
16,433,965
(4,112,242)
Loans
Loans to the Financial Sector
Personal Loans
Mortgage loans
Pesos
Dollars
Pesos
Dollars
Pesos
Dollars
Pesos
Dollars
Pesos
Dollars
Promissory Notes
Pesos
Dollars
Overdrafts
Automobile and Other Secured Loans
1,023,992
1,024,132
(140)
6,929,480
6,929,480
—
(36,550,301)
(36,554,563)
4,262
(7,807,479)
(7,807,479)
—
(2,344,987)
(2,344,987)
—
(48,809,260)
(48,809,260)
—
2,924,927
2,924,927
—
(23,195,172)
(23,195,151)
(21)
(3,537,647)
(3,236,236)
(301,411)
5,654
20,962
(15,308)
14,010,218
14,010,218
—
39,992,157
39,993,121
(964)
13,759,312
13,759,312
—
1,797,191
1,797,191
—
23,116,843
23,116,843
—
42,490,378
42,490,378
—
19,329,640
19,329,789
(149)
7,143,286
6,771,912
371,374
Total Loans excl. Foreign trade and U.S.$.loans (111,366,447) 161,644,679
(111,069,137) 161,289,726
354,953
943,780
—
943,780
(113,140,399) 162,588,459
(111,069,137) 161,289,726
(297,310)
(1,773,952)
—
(1,773,952)
Pesos
Dollars
Total Loans
Foreign Trade Loans and U.S.$.loans
Receivables from Financial Leases
Corporate Unsecured Loans
Credit Card Loans
Pesos
Dollars
Pesos
Dollars
Pesos
Dollars
Pesos
Dollars
Pesos
Dollars
(2,071,262)
1,298,733
119
Repo transactions
Pesos
Dollars
Total Interest-Earning Assets
Pesos
Dollars
LIABILITIES
Interest-Bearing Liabilities
Time Deposits
Pesos
Dollars
Special Checking Accounts
Pesos
Dollars
Borrowings from Other Financial
Institutions and Unsub Negotiable
Obligations
Pesos
Dollars
2023/2022
2022/2021
Year ended December 31,
Volume
Rate
Increase (Decrease) Due to Changes in
Net Change
Volume
(in thousands of Pesos)
Rate
Net Change
169,348,198
169,348,198
—
20,633,747 189,981,945 (120,612,903)
20,633,747 189,981,945 (120,612,903)
—
46,128,289 (74,484,614)
46,128,289 (74,484,614)
—
56,207,799 183,222,206 239,430,005 (176,141,079) 113,978,188 (62,162,891)
58,279,061 181,923,473 240,202,534 (172,369,235) 114,318,586 (58,050,649)
(4,112,242)
(2,071,262)
(3,771,844)
1,298,733
(772,529)
(340,398)
—
—
—
(23,024)
(75,107,064) 218,964,077 143,857,013
(75,084,040) 218,952,624 143,868,584
(11,571)
(15,613,052) 179,255,744 163,642,692
(15,626,144) 179,267,821 163,641,677
1,015
(12,077)
11,453
13,092
(43,365,164) 110,472,790
110,458,842
(43,314,202)
13,948
(50,962)
54,179,731
28,772,506
54,221,268
28,823,988
(41,537)
(51,482)
67,107,626
67,144,640
(37,014)
82,952,237
83,045,256
(93,019)
(4,425,047)
(4,219,306)
(205,741)
3,493,585
3,165,910
327,675
(931,462)
(1,053,396)
121,934
(9,693,830)
(7,408,779)
(2,285,051)
7,521,785
6,544,901
976,884
(2,172,045)
(863,878)
(1,308,167)
Subordinated Loans and Negotiable
Obligations
Pesos
Dollars
Total Interest-Bearing Liabilities
Pesos
Dollars
Low and Non-Interest Bearing
Deposits
Savings Accounts
Pesos
Dollars
—
—
—
—
—
—
(95,145,163) 401,713,406 306,568,243
(94,929,490) 401,386,355 306,456,865
111,378
—
—
—
(215,673)
327,051
—
—
—
(556,204)
—
(556,204)
(556,204)
—
(556,204)
(24,286,488) 171,618,102 147,331,614
171,225,011 149,326,018
(21,898,993)
(1,994,404)
(2,387,495)
393,091
(655,015)
(655,214)
199
1,483,664
1,484,652
(988)
828,649
829,438
(789)
(143,165)
(136,781)
(6,384)
629,078
629,462
(384)
485,913
492,681
(6,768)
120
Interest-earning Assets: Net Interest Margin and Spread
The following table analyzes, by currency of denomination, our levels of average interest-earning assets and net interest income,
and illustrates the comparative margins and spreads for each of the years indicated.
2023
Year ended December 31,
2022
(in thousands of Pesos, except percentages)
2021
Average interest-earning assets(1)(2)
Pesos
Dollars
Total
Net interest earned
Pesos
Dollars
Total
Net Interest Margin
Pesos
Dollars
Weighted average yield(3)
Yield Spread
Pesos
Dollars
Weighted interest spread(4)
Gross Yield
Pesos
Dollars
1,450,094,101
116,485,247
1,566,579,348
1,602,560,121
112,265,096
1,714,825,217
1,673,887,357
192,171,955
1,866,059,312
379,421,937
61,417,765
440,839,702
306,340,996
14,717,415
321,058,411
291,622,898
6,429,806
298,052,704
26.2 %
52.7 %
28.1 %
10.7 %
52.9 %
17.1 %
82.8 %
53.4 %
19.1 %
13.1 %
18.7 %
11.8 %
13.3 %
13.5 %
51.2 %
13.7 %
17.4 %
3.3 %
16.0 %
12.5 %
3.7 %
13.1 %
39.2 %
4.7 %
(1) Includes all loans, leasing agreements and investments (including public and private bonds and Central Bank notes) and other
receivables from financial intermediation that earn interest.
(2) These figures represent daily averages.
(3) Takes into account the average interest earned on interest-earning assets and is weighted in accordance with the volume of each
asset.
(4) Takes into account the average interest earned on interest-earning assets, net of average interest paid on interest-bearing liabilities.
121
Investment Portfolio
We own, manage and trade a portfolio of securities issued by the Argentine government, the Central Bank, and other public
sector and corporate issuers. The following table sets out our investments in Argentina and other governments and corporate securities,
as of December 31, 2023 and 2022 by type and currency of denomination.
Debt Securities at fair value through profit or loss
LOCAL
Government securities
Treasury Bond ARS adj CER Mat.02/14/25
Treasury Bond Dual currency Mat.02/28/24
Treasury Bond ARS adj CER Mat.10/14/24
Treasury Bond linked in USD Mat.04/30/24 C.G
Treasury Bond Dual currency Mat.06/30/24
Treasury Bond ARS adj CER2% Mat. 2026
Treasury Bond ARS adj CER Mat.04/14/24
Treasury Bond linked in USD Mat. 03/13/25
Treasury Bond ARS adj CER Desc Mat.02/20/24
Provincial Bond $ TV CL.22 Mat.03/29/24
Treasury Bond Dual Mat. 08/30/24
Treasury Bond Dual currency Mat. 08/30/24
Treasury Bond ARS adj CER Desc Mat.01/20/23
Treasury Bond ARS disc Mat.04/28/23
Treasury Bond ARS adj Mat. 03/31/23
Treasury Bond Dual currency Mat.07/31/23
Treasury Bond ARS adj CER 1,40% Mat.03/25/23
Treasury Bond ARS disc. Mat.02/17/23
Treasury Bond linked in USD 07/31/23
Treasury Bill ARS disc. Mat.01/31/23
Treasury Bond linked in USD STEP UP Mat.07/09/30
Treasury Bond Dual currency Mat.09/29/23
Treasury Bond Dual currency Mat.06/30/23
Treasury Bill ARS disc. Mat.02/28/23
Treasury Bill ARS disc. Mat.03/31/23
Treasury Bons ARS adj CER 1,50% Mat.03/25/24
Treasury Bond linked in USD Mat 03/24/2024
Treasury Bons Mat.01/20/2023
Treasury Bill ARS disc. Mat.04/28/2023
Others
Treasury Bond ARS adj CER Mat. 07/26/24 $ (T2X4)
Public Debt Securities ClassPublic Debt Securities Class N° 22 A TV Mat 03/29/24(BDC24)
Treasury Bond linked in USD Mat.04/30/24 (TV24)
TDJ24 - Treasury Bond Dual currency Mat. 06/30/2024
TDG24 -Treasury Bond Dual currency Mat. 08/30/2024
National public title issued in dollars with a fixed rate Mat. 07/07/2030
National public title issued in dollars with a fixed rate Mat. 07/09/2035
Treasury Bond ARS adj CER 4.25% Mat.02/14/25
TDF24 - Treasury Bond Dual currency 02/2024
Treasury Bond Dual currency TDF24
Treasury Bond ARS CER Mat. 02/14/2025
Treasury Bond ARS CER Mat. 10/14/2024
Treasury Bond Dual currency Mat.06/30/24
Treasury Bond Dual currency Mat.04/30/24
Treasury Bond Dual currency TDG24
122
12/31/2023
12/31/2022
(in thousands of Pesos )
5,050,935
3,947,205
3,659,454
1,965,438
342,486
337,019
335,696
232,812
192,228
45,088
6,778,750
3,123,900
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
169,419
658,168
13,706
402,165
621,476
748,176
189,250
69,500
2,058,936
3,274,722
2,491,539
1,771,465
128
2,402,200
4,496
152,202
-
641
-
-
-
-
-
-
-
361
-
-
15,699,956
15,248,418
7,390,413
5,675,214
1,218,183
1,083,733
846,708
410,062
365,885
11,732,294
5,844,732
1,398,220
1,053,181
84,557
37
12,618
220,857
612,720
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Treasury Bond Dual currency Mat.04/30/2024
Treasury Bond Dual currency Mat.06/30/24
Treasury Bond Dual currency Mat.08/30/2024
Corporate Securities
On Cresud S27 CL41 $ Mat.10/04/24
On Newsan Cl.17 $ Mat.07/21/2024
On Capex Cl.7 U$S Mat.09/07/27
On Luz Tres Picos 4 U$S 09/29/26
On Capex CL.6 U$S Mat.09/07/26
On Ypf Clase 39 8,50% U$S Mat.07/28/25
VDFF $ Mercado Cred Cons 20 Mat.03/15/24
On Pyme Datastar 2 $ Mat.07/06/25
On Vista Energy 18 U$S Mat.03/03/27
On Pyme Venturino $ Mat.10/05/23
ON Capex 9.250% Mat.08/25/28 U$S
ON YPF 2024 Clase 28
ON MSU Energy Cl.6 U$S
ON YPF Ener.Elec. C.12 Mat.08/29/26 U$S Cg
ON YPF Ener.Elec. C.11 Mat.08/29/24 U$S
Pay Mat vto 08/13/24
Others
12/31/2023
12/31/2022
(in thousands of Pesos )
8,992
381,544
31,274
-
-
-
538,496
432,783
142,010
103,949
99,750
81,212
62,310
59,225
2,762
-
210,824
205,128
383,163
79
1,225
1,598,339
1,034,198
-
-
-
79,885
-
91,859
-
-
-
11,444
-
-
-
-
-
-
625,617
Total debt securities
46,415,822
69,707,595
123
OTHER DEBT SECURITIES
Measure at fair value through changes in Other Comprehensive Income
LOCAL
Government securities
12/31/2023
12/31/2022
9,967,500
1,630,129
-
-
-
323,902
36,806
374,280
381,500
-
-
2,217,521
1,473,279
5,993,601
6,834,741
-
-
-
-
3,590,632
-
-
-
-
-
-
-
-
-
-
-
-
120,358,805
104,897,385
77,160,829
76,284,441
60,782,786
38,429,899
33,906,503
30,949,965
42,155,626
15,070,560
12,450,688
8,366,901
2,282,115
1,575,195
1,296,829
1,113,080
1,025,794
1,004,147
976,492
900,830
615,270
530,149
115,291
762,285
169,653
3,188,784
2,467,124
-
3,610,706
702,788
-
-
-
2,857,355
-
-
-
-
-
2,570,910
Treasury Bond ARS adj CER Mat.02/14/25
Treasury Bond ARS adj CER1,50% Mat.03/25/24
Treasury Bond ARS adj CER 1,40% Mat.03/25/23
Treasury Bond ARS Mat.02/06/2023
Treasury Bill ARS adj CER
Treasury Bond ARS adj CER4,25% Mat.02/14/2025
Treasury Bond Dual currency Mat.06/30/24
Treasury Bond ARS adj CER4.25% Mat.02/24/25
Treasury Bond Dual currency 02/2024 - Tdf24
Others
Securities issued by the Central Bank
Securities issued by the Central Bank Mat.17/01/23
Securities issued by the Central Bank Mat.19/01/23
Securities issued by the Central Bank Mat.24/01/23
Securities issued by the Central Bank Mat.10/01/23
Securities issued by the Central Bank Mat.12/01/23
Securities issued by the Central Bank Mat.26/01/23
Securities issued by the Central Bank Mat.05/01/23
Securities issued by the Central Bank Mat.03/01/23
Central Bank liquidity Note Mat.11/01/23
Central Bank liquidity Note Mat.04/01/23
Central Bank liquidity Note Mat.25/01/23
Central Bank liquidity Note Mat.18/01/23
Corporate Securities
On Spi Energy SA CL.1 US$ Mat.06/27/2026
VDFF Mercado Crédito Consumo 26 ARS
On Tarj Naranja CL.53 ARS Mat.04/05/24
On Msu Energy CL.4 U$S Mat.05/20/24
VDFF Mercado CR. Consumo 25 ARS
VDFF ARS Mercado Cred 19 Mat.08/15/24
VDFF ARS Cred Cons 24 Mat.10/15/24
On Tarj Naranja CL.55 $ Mat.02/09/24
On Newsan 18 Mat. 10/17/24 ARS
On Pan American Cl.25 Mat. 03/14/25 ARS
On Newsan Cl . 15 Mat.05/19/24 Wncgo
On Spi Energy Sa Cl.1 Us$ Mat.06/27/2026
On Pyme Alz Semillas 7 Mat.09/29/25
Others
124
Measure at amortized cost
LOCAL
Public bonds
Treasury Bond ARS adj CER Mat.02/14/25
Treasury Bond ARS Mat.08/23/25
Treasury Bond ARS adj CER Mat.10/14/24
Treasury Bond ARS adj CER4,25% Mat.12/13/24
Treasury Bond ARS Mat.05/23/27
Treasury Bond ARS Mat.11/23/27
Treasury Bond ARS adj CER4,25% Mat.02/14/2025
Treasury Bond ARS adj CER4% Mat.10/14/24
Treasury Bond ARS adj CER Mat. 02/14/2025
Treasury Bill ARS adj CER Mat05/19/2023
Treasury Bill ARS disc. Mat.03/31/23
Treasury Bill ARS disc. Mat.04/28/23
Treasury Bill ARS adj CER Mat.05/19/23
Treasury Bond ARS adj CER2% Mat. 2026
Treasury Bill ARS disc. Mat.02/28/23
Treasury Bill ARS disc.Mat.09/18/23
Others
Securities issued by the Central Bank
Securities issued by the Central Bank Mat.10/11/24
Securities issued by the Central Bank Mat. 11/16/24
Securities issued by the Central Bank Mat.11/15/24
Securities issued by the Central Bank Mat.11/14/24
Central Bank liquidity Bill Mat.06/14/23
Central Bank liquidity Note Mat 03/22/23
Central Bank liquidity Note Mat.01/18/23
Central Bank liquidity Note Mat.03/15/23
Central Bank liquidity Note Mat.02/22/23
Corporate Securities
On Msu CL 6 U$S Mat.11/02/24
On Gn Medi/CT Roca 17 U$S Mat.11/07/24
FF Red Surcos XXIX lote 1
FF Red Surcos XXIX lote 2
Others
Total other debt securities
Investments in equity instruments
Measured at fair value through profit and loss
LOCAL
Pampa Energía S.A.
Holcim Arg
Edenor SA
Loma Negra S.A.
Cedear SPDR Dow Jones Ind
Cedear SPDR S&P
Cedear Financial Select Sector
Ternium Arg S.A.Ords."A"1 Voto Esc
Cedear Ishares MSCI Brasil
YPF SA
Others
Measured at fair value through changes in Other Comprehensive Income
LOCAL
Others
Total investments in equity instruments
Total
125
12/31/2023
12/31/2022
75,024,524
15,749,725
15,224,029
14,792,810
12,977,047
5,065,575
2,212,690
3,387,634
795,893
-
-
-
-
-
-
-
-
65,216,128
6,063,625
4,365,810
404,241
-
-
-
-
-
1,221,471
409,292
-
-
16
-
-
-
-
40,029,248
13,201,236
-
-
-
608,782
10,228,212
6,566,591
5,556,331
4,825,632
4,741,228
3,662,951
5,877,420
-
-
-
-
7,845,838
38,171,642
18,612,707
11,594,158
10,027,706
-
-
5,015,413
277,377
50
251,180,541
839,975,567
26,237
7,218
5,799
2,412
1,803
1,528
1,430
1,113
801
517
236
144,901
4,416
145,309
102,814
1,731
1,348
1,423
42,781
701
141,977
250,161
316,891 (1)
727,448
365,985
297,962,348
1,565,010
911,248,172
(1) Includes an equity investment in Modo of Ps.170,112 thousand. The Bank owns 2.368% of the shares of Modo, which is
a company fully owned by most banks operating in Argentina. It developed and launched Modo in late 2020 as a way to
send and receive money with people you know, using their mobile phone numbers as ID without the need for a CBU, alias
account number or CVU (uniform virtual key). In the beggining of 2021 also added a Peer to Merchant solution for
payments through a QR code. Modo is a standalone app or it can be embedded in the banking apps and is a strong player
in the digital payment segment.
The following table sets out the weighted average yield for each range of maturities, to debt securities that are not held at fair
value:
Grupo Supervielle S.A.
As of December 31, 2023
Debt securities that are not held at
fair value
Weighted average yield
After 1 year
through
5 years
Within 1
year
(43.5) %
10 years years
—
—
(15.6) %
Total
(34.1) %
After 5
year
through
After 10
The weighted average yield was calculated as the sum of each bond’s returns divided by the sum of each bond’s average holding
considering their remaining maturity.
The following table sets out the aggregate book value of securities from a single issuer that exceeds 10% of Grupo Supervielle
Shareholder´s Equity:
Argentine government(1)
Central Bank(2)
Single Issuer
%Shareholder´s
12/31/2023
Equity
(in thousands of Pesos except percentages)
199,404,413
76,049,804
275,454,217
58.39 %
22.28 %
(1) Includes Ps.52.1 billion of Treasury Bonds considered in the minimum reserve requirements.
(2) Includes Ps.42.8 billion of Securities Issued by the Central Bank considered in the minimum reserve requirements.
Loans and other Financing
Our loan and other financing portfolio are included in Note 25 to our audited consolidated financial statements. Loans and The
Other Financing of our audited consolidated financial statements.
126
Maturity Composition of the Loan and Other Financing
The following table analyzes our loan and other financing as of December 31, 2023 by type and by the time remaining to
maturity. Loans and other financings are stated before deduction of allowances for loan losses.
Loans and other financing
To the non-financial public sector
To the financial sector
To the non-financial private sector and foreign residents:
Overdrafts
Promissory notes
Mortgage loans
Automobile and other secured loans
Personal loans
Credit card loans
Foreign trade loans and U.S. dollar loans
Others
Receivables from financial leases
Total loans and other financing
Interest Rate Sensitivity
Grupo Supervielle S.A.
Maturing as of December 31, 2023
After 1
After 5
year
through
5 years
year
through
15 years
Within 1
year
After 15
years
Total
(in thousands of Pesos except percentages)
1,834,358
3,272,827
235,757
740,818
—
—
—
—
2,070,115
4,013,645
—
—
41,894,321
118,236
7,895,208
—
152,566,662 14,410,117
—
41,894,321
— 166,976,779
53,951,778
15,327,328
51,898,817
75,811,274
32,922,723
35,045,352
19,991,780
356,626,850 87,545,757 18,310,371 37,420,934 499,903,912
677,540 15,810,961 37,345,041
—
75,893
—
—
—
—
7,432,120
17,417,837 33,848,430
75,811,274
—
20,350,652 10,690,138
2,277,537
32,735,524
2,729,951 17,233,300
—
556,657
—
1,881,933
32,291
28,529
The following table analyzes the amount of our loan and other financing portfolio due after one year at fixed and variable
interest rate. Loans and financings are stated before deduction of allowances for loan losses.
Grupo Supervielle S.A.
Amount due after one year at
Variable
interest rate
(in thousands of Pesos except percentages)
Total
Fixed
interest rate
Loans and other financing
To the non-financial public sector
To the financial sector
To the non-financial private sector and foreign residents:
Overdrafts
Promissory notes
Mortgage loans
Automobile and other secured loans
Personal loans
Credit card loans
Foreign trade loans and U.S. dollar loans
Others
Receivables from financial leases
Total loans and other financing
—
740,818
235,757
—
235,757
740,818
13,817,501
51,138,131
6,958,109
34,480,980
—
12,572,071
2,309,828
13,971,187
135,988,625
592,616
2,695,411
474,011
—
—
—
—
3,290,642
7,288,437
14,410,117
53,833,542
7,432,120
34,480,980
—
12,572,071
2,309,828
17,261,829
143,277,062
127
Amounts Past Due Loans and Other Financing
The following table analyzes amounts past due in our loan and other financing portfolio, by type of loan and other financing as
of the dates indicated. The past due loans listed in the table below include loans of the Bank, Tarjeta, Espacio Cordial, IUDÚ and MILA
past due more than 90 days.
Past Due
Loans and other Financing
To the non-financial private sector and foreign residents
Overdrafts
Promissory notes
Mortgage loans
Automobile and other secured loans
Personal loans
Credit card loans
Foreign trade loans
Other loans
Receivables from financial leases
Total Past Due Loans and other financing
Past Due Financings
With Preferred Guarantees
Without Guarantees
Total Past Due Financings
Analysis of the Allowance for Loan Losses
Grupo Supervielle S.A.
Year ended December 31,
2023
2021
2022
(in thousands of Pesos except percentages)
1,183,855
741,174
778,700
348,257
3,831,043
4,177,176
2,608,537
3,253,325
526,762
17,448,829
540,015
417,688
2,209,939
1,261,814
8,045,266
7,333,522
4,610,063
4,639,354
120,560
29,178,221
649,832
247,925
2,705,104
11,203,313
11,340,430
2,216,244
7,910,323
2,735,500
158,775
39,167,446
1,659,484
15,789,345
17,448,829
2,354,018
26,824,203
29,178,221
10,867,778
28,299,668
39,167,446
The analysis of the allowances for loan losses are included in Note 1.11 and Note 25 to our audited consolidated financial
statements. See “Item 5.E. Critical Accounting Estimates—Allowances for Loan Losses.”
The following table analyses the ratio of allowances for loans losses to total loans:
Allowances for loan losses
Loans and other financing
Allowances as a percentage of Loans
2023
Grupo Supervielle S.A.
Year ended December 31,
2022
(in thousands of Pesos except percentages)
38,060,404
766,535,154
2021
60,950,155
1,004,058,768
17,448,828
499,903,912
3.49 %
4.97 %
6.07 %
128
The following table analyzes the ratio of net charge-offs to average loans, disclosed by loan category.
2023
Write-offs
and
reversals
Net Charge-
offs/average
loans
Average
Grupo Supervielle S.A.
As of December 31,
2022
Write-offs
and
Average
reversals
Net Charge-
offs/average
loans
2021
Write-offs
and
Average
reversals
Net Charge-
offs/average
loans
(in thousands of Pesos except percentages)
Loans:
Promissory notes
Unsecured corporate loans
Overdrafts
Mortgage loans
Automobile and other secured
loans
Personal loans
Credit card loans
Foreign Trade Loans
Loans to the Financial Sector
Receivables from financial
leases
Total
88,661,948
124,706,925
47,376,656
70,185,435
(46,586)
(2,521,318)
(214,056)
(733,842)
(0.05) % 136,285,752
(2.02) % 120,912,394
39,986,427
(0.45) %
78,972,720
(1.05) %
(190,211)
(9,121,149)
(323,926)
(205,426)
(0.14) % 168,814,495
(7.54) % 123,932,516
44,776,965
(0.81) %
94,853,591
(0.26) %
(1,243,594)
(23,952,962)
(2,071,851)
(54,898)
20,589,065
80,141,775
104,462,883
39,330,529
2,423,357
(812,013)
(6,224,758)
(5,055,971)
—
—
24,428,584
(3.94) %
(7.77) % 139,004,401
(4.84) % 161,831,667
61,270,504
629,394
— %
—
(2,760,464)
(14,303,595)
(11,958,633)
(347,350)
—
19,172,698
(11.30) %
(10.29) % 180,754,798
(7.39) % 162,153,456
(0.57) % 111,682,426
248,639
—
(225,219)
(11,725,569)
(5,507,960)
(559,285)
—
28,417,785
606,296,358
(25,042)
(15,633,586)
(0.09) %
(2.58) % 798,623,504
35,301,661
(151,026)
(39,361,780)
(0.43) %
(4.93) % 939,475,452
33,085,868
(793,910)
(46,135,248)
(0.74) %
(19.33) %
(4.63) %
(0.06) %
(1.17) %
(6.49) %
(3.40) %
(0.50) %
—
(2.40) %
(4.91) %
Allocation of the Allowance for Loan Losses and Other Financing
The allocation of allowances for loan and other financing losses by category of loans are included in Note 1.11 and Note 25 to
our audited consolidated financial statements. See “Item 5.E. Critical Accounting Estimates—Allowances for Loan Losses.”
129
Loans and Other Financing Portfolio by Economic Activity
The table below analyzes our loan and other financing portfolio according to the borrower’s main economic activity as of
December 31, 2023, 2022 and 2021.
2023
Loan
Portfolio
% of
Loan
Portfolio
Grupo Supervielle S.A.
As of December 31,
2022
Loan
Portfolio
% of
Loan
Portfolio
2021
Loan
Portfolio
% of
Loan
Portfolio
1,666,753
32,646,376
17,937,781
724,270
15,740,312
5,789,551
215,023
924,031
6,481,825
18,371,226
22,214,573
65,070
11,259,239
317,406
13,871,628
(in thousands of Pesos, except percentages)
328,498
— %
6.5 % 36,457,900
3.6 % 34,126,043
0.1 %
1,483,546
3.1 % 17,608,651
4,911,138
1.2 %
113,247
— %
0.2 %
6,188,215
1.3 % 10,348,945
3.7 % 29,096,476
4.4 % 17,420,091
— %
68,787
2.3 % 12,670,199
245,128
0.1 %
9,572,908
2.8 %
0.0 %
4.8 %
4.5 %
0.2 %
2.3 %
0.6 %
— %
0.8 %
1.4 %
3.8 %
2.3 %
— %
1.7 %
— %
1.2 %
4,358,658
64,632,619
50,947,801
2,537,200
14,915,084
5,899,904
260,953
2,345,367
7,194,445
25,353,527
41,018,484
92,161
17,060,698
1,734,587
9,371,632
0.4 %
6.4 %
5.1 %
0.3 %
1.5 %
0.6 %
— %
0.2 %
0.7 %
2.5 %
4.1 %
— %
1.7 %
0.2 %
0.9 %
3,797,184
1,588,369
201,886,776
3,909,066
6,578,676
913,374
1,962,127
2,526,079
3,518,735
4,756,503
5,981,895
10,285,170
9,898,321
6,262,822
8,387,145
2,683,885
19,611,351
11,212,546
23,379,520
1,138,114
21,401,190
499,903,912
0.8 %
0.3 %
2,273,484
6,958,796
40.4 % 380,866,919
2,635,122
0.8 %
0.3 %
0.9 %
49.7 %
0.3 %
2,068,108
1,474,126
468,344,708
2,897,137
0.2 %
0.1 %
46.6 %
0.3 %
9,282,757
1.3 %
12,799
0.2 %
2,079,312
0.4 %
4,906,592
0.5 %
7,441,599
0.7 %
5,515,384
1.0 %
1.2 %
6,850,791
2.1 % 15,442,509
2.0 %
6,580,324
1.3 % 13,154,883
1.7 % 14,935,151
0.5 %
2,191,590
3.9 % 14,816,959
2.2 % 16,298,952
4.7 % 32,244,919
0.2 %
2,493,765
4.3 % 38,912,775
100.0 % 766,535,154
1.2 %
— %
0.3 %
0.6 %
1.0 %
0.7 %
0.9 %
2.0 %
0.9 %
1.7 %
1.9 %
0.3 %
1.9 %
2.1 %
4.2 %
0.3 %
5.1 %
7,880,690
11,942
4,668,801
4,507,510
6,335,031
6,355,350
8,899,654
14,819,180
12,138,860
12,936,048
14,059,709
239,930
26,490,405
17,344,534
37,148,631
812,712
106,902,582
100.0 % 1,004,058,768
0.8 %
— %
0.5 %
0.4 %
0.6 %
0.6 %
0.9 %
1.5 %
1.2 %
1.3 %
1.4 %
0.0 %
2.6 %
1.7 %
3.7 %
0.1 %
10.6 %
100.0 %
Oils and oilseeds
Agriculture, crops and fruit
Manufactured foodstuff, cattle beef
Household items, sales / Trading
Automotive vehicles and car parts
Sugar
Foreign and local banks
Alcoholic beverages
Civil construction
Road works and specialized construction
Cooperatives and small financial institutions
Private and public mail services
Cattle raising
Leather
Electricity and gas distribution
Home appliances, audio and video devices,
production and importation
Hydrocarbon extraction and production
Families and individuals(1)
Hypermarkets and supermarkets
Machines and tools – Production, sale and/or
lease
Motorcycles, parts and accessories
Paper and cardboard
Plastic - Manufactures
Metal products
Pharmaceutical products and laboratories
Chemical products
Waste collection and recycling
Corporate services
Health services
Mineral extraction and production
Telecommunications
Textile industry
Cargo transportation
Wine industry
Real estate agencies
Other(2)
Total
(1) Loans for personal consumption.
(2) Includes all other industries. None of such industries exceeds 1% of the total loan and other financing portfolio.
130
Composition of Deposits
The following table sets out the composition of each category of deposits by currency of denomination that exceeded 10% of
average total deposits at December 31, 2023, 2022 and 2021.
Deposits in domestic bank offices by local
depositors
Non-interest-bearing current accounts
Average
Pesos
Dollars
Total
Savings accounts
Average
Pesos
Dollars
Total
Special checking accounts
Average
Pesos
Dollars
Total
Time deposits
Average
Pesos
Dollars
Total
2023
Grupo Supervielle S.A.
As of December 31,
2022
2021
Average
balance
Average
nominal
rate
Average
balance
Average
nominal
rate
Average
balance
Average
nominal
rate
(in thousands of Pesos, except percentages)
137,691,449
6,443,110
144,134,559
— % 207,179,004
9,339,688
— %
— % 216,518,692
— % 170,778,257
— % 10,426,328
— % 181,204,585
— %
— %
— %
2023
Average
balance
Average
nominal
rate
Grupo Supervielle S.A.
As of December 31,
2022
Average
balance
Average
nominal
rate
(in thousands of Pesos except percentages)
2021
Average
balance
Average
nominal
rate
115,031,175
50,994,084
166,025,259
1.9 % 210,977,034
— % 68,742,982
1.3 % 279,720,016
0.3 % 193,847,136
0 % 76,004,934
0.2 % 269,852,070
0.2 %
0 %
0.1 %
345,109,989 109.7 % 490,892,067 36.8 % 347,970,468 22.2 %
0.3 %
392,777,878 96.5 % 550,420,590 31.1 % 412,782,810 17.8 %
0.4 % 64,812,342
0.3 % 59,528,523
47,667,889
369,851,433 118.8 % 592,014,683 41.2 % 553,157,564 35.0 %
10,462,572 0.60 % 19,499,649 0.42 % 26,778,462 1.80 %
380,314,005 115.5 % 611,514,332 39.4 % 579,936,026 32.5 %
131
Grupo Supervielle S.A.
As of December 31,
2022
2021
2023
Average
balance
Average
nominal Average
Average
nominal Average
balance
rate
Average
nominal
rate
balance
rate
(in thousands of Pesos, except percentages)
Deposits in domestic bank offices by foreign depositors
Non-interest-bearing current accounts
Average
Pesos
Dollars
Total
Savings accounts
Average
Pesos
Dollars
Total
Time deposits
Average
Pesos
Dollars
Total
Uninsured deposits
Maturity of Deposits
—
—
—
9,544
15,744
25,288
11,128
—
11,128
84
—
84
16,828
42,837
59,665
18,476
—
18,476
352
—
352
21,977
101,490
123,467
33,114
—
33,114
2023
2022
(in thousands of Pesos)
2021
1,249,886,089 1,308,350,500 1,158,816,385
The following table sets forth information regarding the maturity of our time deposits exceeding the SEDESA insurance limit
at December 31, 2023.
Time Deposits
3 months or less;
Over 3 months through 6 months;
Over 6 months through 12 months;
Over 12 months
Total Time Deposits(1)
Grupo Supervielle S.A.
As of December 31,
2023
(in thousands of Pesos)
300,134,390
521,201
142,920
—
300,798,511
(1) Only principal. Excludes the CER and UVA adjustment.
Law No. 24485 and Decree No. 540/95 established the creation of the Deposit Insurance System to cover the risk attached to
bank deposits, in addition to the system of privileges and safeguards envisaged in the Financial Institutions Law.
The maximum amount for this insurance system to demand deposits and time deposits denominated either in Pesos and/or in
foreign currency was set at Ps.1,000,000 as from March 1, 2019 and increased to Ps.1,500,000 as of May 1, 2020. However, pursuant
to Communication “A” 7661, the Central Bank raised the amount covered by the Deposit Insurance System to Ps.6,000,000. Pursuant
to Communication “A” 7985, the Central Bank raised the amount covered by the Deposit Insurance System to Ps.25,000,000 effective
April 1, 2024,
132
This system does not cover deposits made by other financial institutions (including time deposit certificates acquired through
a secondary transaction), deposits made by parties related to Banco Supervielle S.A., either directly or indirectly, deposits of securities,
acceptances or guarantees and those deposits set up at an interest rate exceeding the one established regularly by the Argentine Central
Bank.
Short-term Borrowings
The table below shows our short-term borrowings as of the dates indicated.
International banks and Institutions:
Total amount outstanding at the end of the
reported period
Average during period
Maximum monthly average
Financing received from Argentine financial
institutions:
Total amount outstanding at the end of the
reported period
Average during period
Maximum monthly average
Other(1)
Total amount outstanding at the end of the
reported period
Average during year
Maximum monthly average
Unsubordinated Corporate Bonds
Total amount outstanding at the end of the
reported period
Average during year
Maximum monthly average
2023
Grupo Supervielle S.A.
As of December 31,
2022
2021
Amount
Annualized
Rate
Amount
Annualized
Rate
Amount
Annualized
Rate
(in thousands of Pesos, except percentages)
255,796
2,634,369
4,886,271
10.8 % 5,326,453
18.8 % 5,071,610
8.4 % 31,142,718
7.5 % 36,172,546
2.9 %
4.8 %
8,497,225
42,641,763
2,541,940
2,981,747
3,356,345
42.3 % 7,574,421
65.2 % 10,281,388
34.7 % 6,692,142
47.6 % 5,911,128
32.5 %
18.3 %
19,061,450
7,862,405
67,110,356
34,776,833
58,479,624
— % 67,356,206
— % 58,043,694
0.8 % 85,922,367
1.7 % 65,922,503
— %
— %
67,713,333
87,074,374
—
42,676
512,108
— % 1,594,575
72.6 % 1,722,659
69.2 % 6,117,497
54.7 % 13,140,425
34.1 %
14.4 %
3,140,677
25,660,314
(1) Includes mainly collections and other transactions on behalf of third parties, miscellaneous (payment orders abroad) and social
security payment orders pending settlement.
133
Return on Equity and Assets
The following table presents certain selected financial information and ratios for the dates indicated.
Net Income for the year attributable to owners of the parent company
Average total assets(1)
Average shareholders’ equity
Shareholders’ equity at the end of the period attributable to owners of the
parent company
Net income as a percentage of:
Average total assets
Average shareholders’ equity
Declared cash dividends
Dividend payout ratio(2)
Average shareholders’ equity as a percentage of average total assets
2023
Grupo Supervielle S.A.
As of December 31,
2022
(in thousands of Pesos, except percentages)
(15,654,911)
2,209,781,898
301,542,483
(10,521,726)
2,419,969,829
322,852,118
2021
51,615,837
2,051,102,120
306,871,669
341,377,494
287,316,144
312,457,100
2.5 %
16.8 %
—
— %
15.0 %
(0.7) %
(5.2) %
—
— %
13.6 %
(0.4) %
(3.3) %
1,531,690
(14.6) %
13.3 %
(1) Calculated on a daily basis.
(2) Calculated by dividing dividend paid in the year by net income for the year attributable to owners of the parent company under
IFRS. As mentioned in Note 24 to our audited consolidated financial statements, dividends are paid based on distributable
retained earnings calculated in accordance with the rules of the Argentine Central Bank.
Minimum Capital Requirements
Our main subsidiary, the Bank, is required to satisfy minimum capital requirements. The following table sets forth the Bank
and IUDÚ’s consolidated minimum capital requirements set by the Superintendency as of the dates indicated.
134
As stated above under “Presentation of Financial and Other Information,” we have prepared our audited consolidated financial
statements for 2023, 2022 and 2021 under IFRS. Minimum capital requirements have been prepared in accordance with the rules of the
Argentine Central Bank, which is not comparable to data prepared under IFRS.
2023
Year ended December 31,(2)
2022
(in thousands of Pesos, except percentages)
2021
Calculation of excess capital:
Allocated to assets at risk
Allocated to Bank premises and equipment, intangible assets and equity
investment assets
Market risk
Public sector and securities in investment account
Operational Risk
Required minimum capital under Central Bank regulations
Basic net worth
Complementary net worth
Deductions
Total capital under Central Bank regulations
Excess capital
Credit Risk Weighted Assets
Risk Weighted Assets (1)
Selected capital and liquidity ratios:
Regulatory capital/credit risk weighted assets
Regulatory capital/risk weighted assets
Average shareholders’ equity as a percentage of average total assets
Total liabilities as a multiple of total shareholders’ equity
Cash as a percentage of total deposits
Liquid assets as a percentage of total deposits(3)
Tier 1 Capital / Risk weighted assets
51,149,308
20,729,624
12,957,481
10,474,161
2,658,844
272,202
21,891,498
86,446,013
264,420,324
—
(55,583,242)
208,837,082
122,391,069
756,569,592
1,058,040,330
3,747,910
1,693,962
625,570
8,188,453
34,985,519
77,619,877
2,600,170
(25,063,540)
55,156,507
20,170,988
303,351,644
428,238,464
2,035,689
965,159
34,489
4,805,957
20,798,775
42,938,440
1,564,272
(11,770,286)
32,732,426
11,933,651
181,430,487
254,513,436
27.6 %
19.7 %
14.5 %
6.3x
14.4 %
64.1 %
19.7 %
18.2 %
12.9 %
12.2 %
8.3x
8.7 %
46.0 %
12.3 %
18.4 %
12.9 %
12.5 %
7.5x
11.1 %
49.2 %
12.2 %
(1) Risk Weighted Assets includes operational risk weighted assets, market risk weighted assets, and credit risk weighted assets, Operational risk
weighted assets and market risk weighted assets are calculated by multiplying their respective required minimum capital under Central Bank rules
by 12.5, Credit Risk Weighted Assets is calculated by applying the respective credit risk weights to our assets, following Central Bank rules.
(2) Nominal values without inflation adjustment.
(3) Liquid assets include cash, securities issued by the Central Bank, and repo transactions with the Central Bank. This ratio does not consider other
government securities held by the Company to set minimum reserve requirements.
As of December 31, 2023, the Bank’s total capital ratio was 19.7%, compared to 12.9% as of December 31, 2022, and the
Bank’s common equity Tier 1 ratio was 19.7%, compared to 12.3% as of December 31, 2022. Including the funds held by Grupo
Supervielle, which are used to fund our growth strategy, the consolidated pro-forma total capital ratio as of December 31, 2023 was
21.0% compared to 13.6% as of December 31, 2022.
Item 5.
Operating and Financial Review and Prospects
Item 5.A Operating Results
This section contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially
from those discussed in the forward-looking statements as a result of various factors, including, those set forth in “Forward-looking
Statements,” and “Item 3.D. Risk Factors.”
This discussion should be read in conjunction with our audited consolidated financial statements which are included elsewhere
in this annual report.
135
Financial Presentation
Our audited consolidated financial statements are prepared in accordance with IFRS as issued by the IASB.
“Financial Reporting in Hyperinflationary Economies” (IAS 29) requires that the financial statements of an entity whose
functional currency is one of a hyperinflationary economy be measured in terms of the current unit of measurement at the closing date
of the reporting period, regardless of whether they are based on the historical cost method or the current cost method. This requirement
also includes the comparative information in financial statements. Our audited consolidated financial statements are stated in the
measurement unit current as of December 31, 2023.
Our segment disclosure for the years ended December 31, 2023, 2022 and 2021 is presented on a basis that corresponds with
our internal reporting structure and is consistent with the manner in which our Board of Directors regularly evaluates the components
of our operations in deciding how to allocate resources and in assessing the performance of our business.
We measure the performance of each of our business segments primarily in terms of net income (i.e., net revenues–or financial
income and service fee income, net of financial expenses and service fee expenses–after deducting loan loss provisions and
administrative costs directly attributable to the segment). Net income excludes the financial expenses incurred by Grupo Supervielle at
the holding level in connection with its funding arrangements (although substantially all the proceeds of such arrangements have been
contributed as capital to the subsidiaries through which the segments are operated), as well as transactions between segments, which are
reflected under “Adjustments.”
In 2023, we operated our business through the following segments:
• Personal and Business Banking: Through the Bank, we offer our customers a full range of financial products and services,
including personal loans, mortgage loans, deposit accounts, purchase and sale of foreign exchange and precious metals
and credit cards, among others. During the fourth quarter of 2022, the clients and financing portfolio of IUDÚ were
transferred to the Bank and to our Personal & Business Banking segment. The Bank is offering the clients who were
transferred from IUDÚ an omnichannel experience through which they can access the Bank’s broad assortment of financial
products and services.
• Corporate Banking: Through the Bank, we offer large corporations and middle-market companies a full range of products,
services and financial assessment including factoring, leasing, foreign trade finance and cash management.
• Treasury: It is primarily responsible for the allocation of the Bank’s liquidity according to the needs of the Personal and
Business Banking segment, the Corporate Banking segment and its own needs. The Treasury segment implements the
Bank’s financial risk management policies, manages the Bank’s trading desk, distributes treasury products such as debt
securities, and develops businesses with wholesale financial and non-financial clients.
•
Insurance: Through Supervielle Seguros, Grupo Supervielle offers insurance products, primarily personal accidents
insurance, protected bag insurance, life insurance and integral insurance policies for entreprenuers and SMEs. Supervielle
Seguros is continuously offering new products to the different customer segments of the companies of Grupo Supervielle:
high net worth individuals (Identité), senior citizens, entrepreneurs and SMEs, customers of the Consumer Finance and
Corporate Banking segments.
• Asset Management and Other Services: Grupo Supervielle offers a variety of other services to its customers, including
mutual fund investment products through Supervielle Asset Management, brokerage and investment products and services
through IOL invertironline, and non-financial products through Cordial Servicios.
The Group has applied the following amendments for the first time for their annual reporting period commencing January 1,
2023, none of which had a material impact on the Group, except for the application of IFRS 17, “Insurance Contracts”: (i) amendments
to IAS 1 Presentation of Financial Statements, IFRS Practice Paper 2 and IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors; (ii) amendments to IAS 12 Deferred tax related to assets and liabilities arising from a single transaction; and (iii) IFRS 17
“Insurance contracts.”
136
Overview
We operate in a complex economic context both nationally and internationally. In 2023, according to the IMF, the global
economic recovered from the negative economic impact resulting from the COVID-19 pandemic and the conflict between Russia and
Ukraine. Global inflation decreased more than expected from 2022 and, as a result, the negative impact of high inflation in 2022 on
employment and economic activity was less severe than expected.
In 2023 and 2022, the global economy grew by 3.1% and 3.4%, respectively, according to the IMF’s estimates, while GDP in
developed countries and emerging countries increased 5.4% and 2.5%, respectively. With disinflation and steady economic growth, the
likelihood of a sharp economic slowdown has receded. As a result of the tightening of monetary policies by central banks, inflation
continued to decline during 2023 and in July 2023 the U.S. Federal Reserve raised the Federal Funds rate by an additional 1% to a range
of 5.25 – 5.50%. Similar trends were followed by the Bank of England and the European Central Bank, resulting in a strengthening of
their respective currencies.
In turn, commodities partially reversed the price rises caused by the conflict between Russia and Ukraine. However, they are
still above historical levels. The price of oil, meanwhile, remains at high levels due to the greater resilience of the global economy faced
with rising rates and the conflict between Israel and Hamas.
According to data published by the INDEC, Argentina’s GDP increased by 10.4% in 2021 and 5.2% in 2022, mainly due to
the recovery of the Argentine economy from the negative impact that the COVID-19 pandemic had on the Argentine economy, and
decreased by 1.6% in 2023 primarily due to the drought which mainly affected the agricultural production in Argentina, which decreased
20.4% compared to 2022.
The economic and political environment during 2023 was strongly impacted by the electoral process that culminated in the
presidential runoff on November 19, 2023 and resulted in the election of Javier Milei as the President of Argentina.
On March 25, 2022, the IMF approved the execution of the IMF Agreement with Argentina for a total amount of U.S.$44
billion, which includes a disbursement of U.S.$9.6 billion. In October 2022, December 2022, April 2023 and August 2023, the IMF
authorized disbursements of U.S.$3.8 billion, U.S.$6 billion, U.S.$5.4 billion and U.S.$7.5 billion, respectively, following Argentina’s
completion of the targets set forth in the IMF Agreement. In addition, the IMF and the Argentine government agreed to revise the targets
set forth in the IMF Agreement considering the negative impact that the drought had on the Argentine economy in 2023. On January
31, 2024, the new Argentine government and the IMF agreed to revise the targets set forth in the IMF Agreement. The target for reserve
accumulation increased to U.S.$10 billion, originally set at U.S.$8.2 billion. As a result of these revisions, in January 2024, the IMF
authorized an additional disbursement of approximately U.S.$4.7 billion. As of the date of this annual report, the aggregate amount of
disbursements authorized by the IMF is approximately U.S.$40.6 billion.
In the current context in Argentina, in 2023 we continued to balance risk and profitability by managing the credit cycle and
excess liquidity through asset and liability management. We also continued to face further pressures as a result of higher cost of funds
resulting from the floor on interest rates on time deposits, caps on interest rates on credit cards and subsidized rates on mandatory credit
lines to SMEs. In addition, new and existing regulations may continue to impact on fees which are charged to customers. In terms of
expenses, we continued to exercise strict control on our recurring costs, although our investments made in order to accelerate our digital
transformation and to improve our service across our branches resulted in certain temporary increases in our costs.
The Argentine Economy
Beginning in December 2001 and for most of 2002, Argentina experienced one of the most severe crises in its history which
nearly left its economy at a standstill and deeply affected its financial sector. Between 2004 and 2009, the Argentine economy and the
financial sector recovered considerably. Since 2009, the Argentine economy has shown increased volatility in most of the years.
Macroeconomic conditions in 2020 were mainly marked by the health crisis that had a strong impact on activity levels, while in 2021
and 2022 economic activity started to recover. However, in 2023 the economic activity decreased due to the impact of the droughts
which took place in Argentina in 2023.
137
The table below includes certain economic indicators in Argentina for the years indicated:
GDP real growth (%)
Primary fiscal balance (excludes interest) (as a % of GDP) (2)
Total public debt (as a % of GDP) (3)
Trade balance (in million U.S.$)
Total deposits (as a % of GDP)(1)
Loans to the private sector (as a % of GDP)(1)
Unemployment rate-end year- (%)
Inflation in consumer prices –Dec./Dec. - CPI INDEC (%)
Average nominal exchange rate (in Ps.Per U.S.$)
Source: INDEC, Central Bank and City of Buenos Aires
2021
10.4
(2.2)
80.6
14,750
15.0
8.4
7.0
50.9
95.16
December 31,
2022
5.2
(2.4)
85.2
6,923
15.5
7.3
6.3
94.8
130.81
2023
(1.6)
(2.7)
88.4
(6,925)
18.3
6.7
5.7
211.4
295.62
(1) Company estimates based on Central Bank information
(2) Company estimates based on information published by the Argentine Ministry of Economy
(3) Information published by the Argentine Ministry of Economy as of June 30, 2023
As of December 31, 2023, the employment rate decreased to 5.7% in comparison to December 31, 2022. As of December 31,
2023, total salaries increased 152.7% in comparison to December 31, 2022. During 2023, the trade balance accumulated a deficit of
U.S.$6,925 million, compared to a surplus of U.S.$ 6,923 million in 2022, mainly as a result of the droughts which took place in
Argentina in 2023 which resulted in a decrease of exports.
As of December 31, 2023, gross international reserves recorded a loss of U.S.$22,995 million and the year closed with a stock
of U.S.$21,603 million.
During 2023, the dynamics of the exchange rate until the Primary, Open, Simultaneous and Mandatory Elections (PASO) was
governed by a crawling peg scheme, with adjustments by the Central Bank at a rate similar to the applicable inflation rate. After the
PASO, the exchange rate was devalued by 21.8%, from Ps.287 to Ps. 350, remaining at that level until November 15, 2023, when the
crawling peg scheme was restored. After the taking of office of President Javier Milei and the swearing-in of the new monetary
authorities, the exchange rate was devalued by 118% and a crawling peg scheme was established with a 2% depreciation per month. As
of December 31, 2023, the nominal exchange rate was Ps.808.48 per U.S.$1.00, which represents a devaluation of the Peso of
approximately 356% compared to 2022. In addition, the blue-chip swap rate (i.e., the difference between the quotation of Argentine
shares in Pesos and in U.S. dollars) was 19% as of December 31, 2023.
In relation to the monetary and fiscal policy, the Central Bank increased the yield on the monetary policy interest rate from
75% as of December 31, 2022 to 133% as of December 18, 2023. In addition, the new government stopped tendering LELIQs, while
the rate of reverse repos, which are 1-day bills, became the benchmark for monetary policy, reaching a nominal annual rate of 100% at
the close of December 31, 2023. In addition, the Argentine Treasury began to issue fixed-rate bills, promoting the transfer of debt from
the Central Bank. In this way, the elimination of LELIQs does not result in an increase in the monetary base, but rather in a reduction
in the Central Bank’s balance sheet, both in terms of liabilities and assets.
Until the new authorities of the Central Bank took office, the monetary policy interest rate (interest rate on liquidity bills or
LELIQs) increased from 75% at the close of 2022 to 133% as of December 18, 2023, an increase of 58%.
In 2023, the primary deficit without extraordinary revenues represented approximately 2.7% of the GDP, above the target of
1.9% established by the IMF, and the financial deficit was 5.9%. During 2023, the fiscal accounts were devalued due to the loss of 4.7%
in revenues, mainly as a result of the significant decrease in income from withholdings as a result of the droughts which took place in
Argentina in 2023. At the same time, public expenditure fell by 4.9%, mainly due to a reduction in real terms in social benefits and
subsidies.
Argentina has faced and continues to face inflationary pressures. From 2011 to date, Argentina experienced increases in
inflation as measured by CPI and WPI.
138
According to the available public information based on data from the INDEC, CPI grew 50.9% in 2021, 94.8% in 2022 and
211.4% in 2023, and 20.6%, 13.2% and 11.0% for each of the months of January, February and March 2024, respectively.
During periods of high inflation, effective wages and salaries tend to fall and consumers adjust their consumption patterns to
eliminate unnecessary expenses. The increase in inflationary risk may erode macroeconomic growth and further limit the availability of
financing, causing a negative impact on our operations. See “Item 3.D. Risk Factors—Risks Relating to Argentina—If the current levels
of inflation continue or increase, the Argentine economy and our business and financial condition could be adversely affected.” and
“Item 5.A. Operating Results—Presentation of Financial Statements in Pesos and Inflation.”
The Financial System
The financial system has been affected by the economic conditions in Argentina over the last several years. In 2023, Argentina’s
GDP decreased by 1.6% mainly due to the drought that mainly affected the agricultural sector, compared to increases of 5.0% and 10.4%
in 2022 and 2021, respectively, mainly due to the recovery of the Argentine economy from the negative impact that the COVID-19
pandemic had on the Argentine economy. Inflation in Argentina increased to 51.4% in 2021, to 94.8% in 2022 and to 211.4% in 2023.
In 2023, Argentina continued to face macroeconomic and regulatory challenges. In December 2023, the new administration took office
and it is adopting measures aiming at stabilizing the Argentine economy. During 2022 and 2023, the financial system in Argentina has
been impacted by certain regulations such as minimum rates for time deposits, caps on interest rates on certain loans, mandatory loans
and LELIQ holdings, foreign exchange market restrictions and negative real interest rates.
The solvency ratios of the financial system continued to be historically high. As of December 31, 2023, the regulatory capital
adequacy ratio of the sector totaled 32.4% of the risk weighted assets (RWA), which represents a 302% excess adequacy that stipulated
by applicable regulations.
Due to the contraction of the financial system in real terms in recent years, the deposit and loan to GDP ratio in the private
financial system is below the average of other countries in the region and the world. The penetration both of deposits and loans continues
being lower than the levels recorded before the 1999-2002 crisis. As of December 31, 2023, the deposit to GDP ratio was 18.3% and
the loan to GDP ratio was 6.7% as compared to 18.7% and 7.3%, respectively, in December 2022. The total deposits from the private
sector financial system increased by 171.4% in 2023, totaling Ps.51,311,996 million, 12.8% below inflation. As of December 31, 2023,
deposits in Pesos recorded a 140.7% growth, or 22.7% decline in real terms, reaching Ps.38,539,577 million, U.S. dollar deposits
measured in U.S. dollar totaled U.S.$15,798 million, decreasing 3.1% from 2022.
As of December 31, 2023, total private sector loans amounted to Ps.18,722,639 million, which represents an increase of 149.1%
(-20.0% in real terms) compared to 2022. As of the same date, private sector loans in Pesos grew by 131.6% (25.6% below inflation)
compared to 2022, reaching a credit to GDP ratio penetration of 6.7%.
139
The following table shows the 2014 to 2023 evolution of major financial statements items for the financial system:
Assets
Liabilities
Shareholders’ equity
Loans
Non-financial public sector
Financial sector
Non-financial private sector
Provisions
Deposits
Non-financial public sector
Non-financial private sector
2014
2015
2016
2017
December 31,
2019
2018
2020
2021
2022
2023
1,341
1,172
168
649
51.47
11
604
(17)
979
257
721
1,847
1,620
227
886
75
13
819
(22)
1,355
291
1,063
2,646
2,348
297
1,137.0
52.83
26
1,086
(28)
1,969
0.44
1,522
3,469
3,068
401
1,691
38
44
1,655
(46)
2,446
0.46
1,982
(in billons of Pesos)
6,741
5,532
5,831
4,921
911
611
2,724
2,278
104
49
58
62
2,721
2,254
(159)
(87)
4,839
4,085
763
865
4,058
3,207
10,902
9,210
1,692
3,556
98
69
3,608
(219)
8,050
1,442
6,579
16,763
14,049
2,713
5,093
121
94
5,137
(259)
12,345
2,370
9,937
32,077
26,256
5,821
8,585
205
103
8,645
(368)
23,266
3,740
19,457
97,539
75,141
22,398
21,501
535
265
21,891
(1,190)
62,796
9,600
52,973
Source: Central Bank. Figures are expressed in original currency, not adjusted for inflation.
The table below shows the 2014 to 2023 evolution of the number of financial institutions in the financial system:
December 31,
Banks
Public banks
Private banks
Private argentine capital banks
Foreign capital domestic banks
Foreign financial institution branch banks
Financial companies
Credit unions
Total financial institutions
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
63
13
50
35
9
6
14
—
77
63
13
50
34
9
7
15
—
78
62
13
49
32
10
7
15
1
78
64
13
51
35
9
7
15
—
79
62
13
49
33
9
7
14
1
77
63
13
50
34
9
7
14
1
78
65
12
53
33
11
9
15
1
81
63
13
50
35
9
6
14
—
77
63
13
50
33
10
7
14
1
78
64
13
51
35
10
6
15
—
79
Source: Central Bank. Figures are expressed in original currency, not adjusted for inflation.
The following table shows the 2006 to 2023 evolution of some key performance indicators of the financial system:
2006 2007 2008 2009 2010 2011 2012 2014 2015 2016 2017 2018 2019 2020 2020 2021 2022 2023
December 31,
Non-Performing
Loans ratio
4.5
3.2
3.1
3.5
2.1
1.4
1.7
NPL Coverage Ratio 107.6
114.4
116.4
111.8
142.8
171.2
141.0
(in billons of Pesos)
2.2
1.6
1.9
3.0
3.2
3.0
3.2
1.7
2.0
147.8 139.7
4.3
3.7
1.7
1.8
1.8
3.1
5.7
3.9
4.3
3.1
3.5
148.4
130.9
138.8
120.6
98.5
151.1
114.0
128.0
140.0
4.1
3.7
3.2
4.2
7.3
2.7
1.4
1.7
4.8
1.9
1.5
1.6
2.3
2.8
2.7
2.9
15.3
10.9
15.2
22.9
24.5
25.6
26.4
14.3
11.0
13.4
19.2
22.6
25.3
25.7
3.4
29.1
29.5
4.1
4.1
3.6
2.7
4.1
5.1
2.4
32.1
31.2
29.4
26.6
35.6
59.2
16.6
1.1
8.1
2.0
5.4
9.3
23.6
32.7
32.4
29.6
23.4
36.1
44.4
16.4
7.3
11.4
27.6
ROAA Private Banks
ROAA Financial
System
ROAE Private Banks
ROAE Financial
System
Source: Central Bank
NPL and NPL Coverage: Central Bank. Figures are expressed following Argentine Banking GAAP. Until December 31, 2019 did not apply IFRS 9 provisions. Figures
are expressed in original currency and not adjusted for inflation. 2020 information was impacted by: (i) the relief program ruled by the Central Bank amid the pandemic
which allowed debtors to reschedule their loan payments originally maturing between April 2020 and March 2021, together with the automatic rescheduling of unpaid
credit card balances due April and September 2020; and (ii) the Central Bank regulatory easing on debtor classifications amid the pandemic (adding a 60-days grace
period before loans are classified as non-performing) and the suspension of mandatory reclassification of customers that are non-performing with other banks, but
performing with Supervielle introduced in 1Q20 and extended until June 30, 2021.
ROAA and ROAE: Central Bank. Figures are expressed following Argentine Banking GAAP. Until December 31, 2019 did not apply IFRS 9 provisions. Figures are
expressed in original currency and not adjusted for inflation. Since January 2020, Central Bank figures are expressed applying hyperinflation accounting
140
The following tables show market share of Argentine banks in terms of loans and deposits (calculated with balance at the end
of the reporting period) as of December 31, 2023 according to the Central Bank:
Market Share of Loans
December 31, 2023
BANCO DE LA NACION ARGENTINA S.A.
BANCO SANTANDER ARGENTINA S.A.
BANCO DE GALICIA Y BUENOS AIRES S.A.U.
BANCO DE LA PROVINCIA DE BUENOS AIRES
BANCO BBVA ARGENTINA S.A.
BANCO MACRO S.A.
INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.U.
HSBC BANK ARGENTINA S.A.
BANCO DE LA CIUDAD DE BUENOS AIRES
BANCO PATAGONIA S.A.
BANCO DE LA PROVINCIA DE CORDOBA S.A.
BANCO SUPERVIELLE S.A.
BANCO CREDICOOP COOPERATIVO LIMITADO
NUEVO BANCO DE SANTA FE SOCIEDAD ANONIMA
CITIBANK N.A.
17.2 %
11.6 %
10.1 %
9.5 %
8.6 %
7.1 %
4.1 %
3.4 %
3.1 %
3.0 %
2.6 %
2.1 %
2.0 %
1.9 %
1.8 %
Market Share of Deposits
December 31, 2022
BANCO DE LA NACION ARGENTINA S.A.
BANCO DE LA PROVINCIA DE BUENOS AIRES
BANCO SANTANDER ARGENTINA S.A.
BANCO DE GALICIA Y BUENOS AIRES S.A.U.
BANCO BBVA ARGENTINA S.A.
BANCO MACRO S.A.
BANCO DE LA CIUDAD DE BUENOS AIRES
INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ARGENTINA) S.A.U.
BANCO CREDICOOP COOPERATIVO LIMITADO
HSBC BANK ARGENTINA S.A.
BANCO PATAGONIA S.A.
BANCO SUPERVIELLE S.A.
BANCO DE LA PROVINCIA DE CORDOBA S.A.
CITIBANK N.A.
BANCO COMAFI SOCIEDAD ANONIMA
21.8 %
10.9 %
9.6 %
8.8 %
5.8 %
4.4 %
4.1 %
3.8 %
3.1 %
3.1 %
3.0 %
2.5 %
2.2 %
1.9 %
1.7 %
With respect to the distribution network, as of December 31, 2023, the financial system had 4,414 branches, 8,340 self-service
terminals and 18,547 ATMs, with coverage throughout Argentina.
Presentation of Financial Statements in Pesos and Inflation
Argentina has faced and continues to face inflationary pressures. From 2011 to date, Argentina experienced increases in
inflation as measured by CPI and WPI.
On January 8, 2016, based on its determination that the INDEC had failed to produce reliable statistical information, particularly
with respect to CPI, GDP and foreign trade data, as well as poverty and unemployment rates, former President Macri declared a state of
administrative emergency for the national statistical system and the INDEC until December 31, 2016. The INDEC suspended publication
of certain statistical data pending reorganization of its technical and administrative structure to recover its ability to produce reliable
statistical information. The INDEC published official CPI figures published by the City of Buenos Aires and the Province of San Luis
for reference for the first four months of 2016. In June 2016, the INDEC began publishing an official inflation rate using its new
methodology for calculating the CPI.
According to the available public information based on data from the City of Buenos Aires, CPI increased 38.0% in 2014,
26.9% in 2015, 41.0% in 2016, and 26.1% in 2017, while according to the data of the Province of San Luis, CPI grew 31.9% in 2013,
39.0% in 2014, 31.6% in 2015, 31.4% in 2016, and 24.3% in 2017.
141
On July 11, 2017, the INDEC started to publish a national CPI (the “National CPI”). The National CPI is based on a survey
conducted by INDEC and several provincial statistical offices in 39 urban areas encompassing each of the Republic’s provinces. Results
are not reported by the provinces, but on a national level and for six statistical regions: the Greater Buenos Aires Metropolitan area
(which is the CPI that resumed publication in June 2016), the Cuyo region, the Northeast region, the Northwest region, the Central
(Pampeana) Region and the Southern (Patagonia) region. For the period of January 1, 2023 to December 2023, accumulated inflation
using the National CPI was 211.4% compared to 94.8% for 2022, and 50.9% for 2021. In the past, the Argentine government has
implemented programs to control inflation and monitor prices for essential goods and services, including attempts to freeze the price of
certain supermarket products, and price support arrangements agreed between the Argentine government and private sector companies
in several industries and markets that did not address the structural causes of inflation and failed to reduce inflation. Adjustments
approved by the Argentine government in electricity and gas tariffs, as well as the increase in the price of gasoline have been passed
through to prices, creating additional inflationary pressures.
The National CPI is prepared in accordance with current international standards and classifies individual consumption by
purpose, previously used in the preparation of the former CPI. The adoption of the National CPI brings Argentina’s statistical practice
in line with the OECD guidelines as well as the methodology followed by the statistical divisions of several international organizations,
including the United Nations, World Bank, IMF, Economic Commission for Latin America and the Caribbean, and the Inter-American
Development Bank. During 2023, the headline inflation index (measured through the Consumer Price Index) increased by 211.4%, the
highest increase since 1990 and core inflation (which excludes the effect of regulated and seasonal goods prices) increased by 229.4%.
During periods of high inflation, effective wages and salaries tend to fall and consumers adjust their consumption patterns to
eliminate unnecessary expenses. The increase in inflationary risk may erode macroeconomic growth and further limit the availability of
financing, causing a negative impact on our operations. See “Item 3.D. Risk Factors—Risks Relating to Argentina—If the current levels
of inflation continue or increase, the Argentine economy and our business and financial condition could be adversely affected.” and
“Item 5.A. Operating Results—Presentation of Financial Statements in Pesos and Inflation.”
IAS 29 requires that financial statements of any entity whose functional currency is the currency of a hyperinflationary
economy, be stated in terms of the measuring unit current at the end of the reporting period. IAS 29 does not establish an inflation rate
beyond which an economy is deemed to be experiencing hyperinflation. However, hyperinflation is commonly understood to occur
when changes in price levels are close to or exceed 100% on a cumulative basis over the last three years, along with other several
macroeconomic-related qualitative factors. Following this criteria, Argentine economy is considered hyperinflationary according to IAS
29 starting July 1, 2018. As a result, financial statements for the year ended on December 31, 2023 have been stated in terms of the
measuring unit current at the consolidated financial statement date.
The following table shows the rate of inflation, as measured by the variations in the WPI and the CPI, according to INDEC and
the evolution of the reference stabilization coefficient (“CER,” per its Spanish acronym) index and UVA used to adjust the principal of
certain of our assets and liabilities, for the periods indicated.
Price Indices:(1)
WPI
CPI
Adjustment Index:
CER
UVA(2)
(1) Source: INDEC, Central Bank
(2) UVAs are inflation adjusted units introduced in September 2016.
2023
Year ended December 31,
2022
(in percentages)
2021
276.4 %
211.4 %
94.8 %
94.8 %
51.3 %
50.9 %
149.67 %
150.05 %
90.20 %
90.05 %
51.57 %
51.60 %
142
Currency Composition of our Consolidated Financial Statements
The following table sets forth our assets and liabilities denominated in Pesos, in Pesos adjusted by the CER and in foreign
currency, at the dates indicated.
2023
Grupo Supervielle S.A.
As of December 31,
2022
(in thousands of Pesos)
2021
Assets
In Pesos, unadjusted
In Pesos, adjusted by the CER
In Foreign Currency(1)
Total Assets
Liabilities and Shareholders’ Equity
In Pesos, unadjusted, including Shareholders’ Equity
In Pesos, Adjusted by the CER
In Foreign Currency(1)
Total Liabilities and Shareholders’ Equity
1,705,014,712 1,865,299,780 2,016,019,721
89,258,751
262,909,735
2,058,008,001 2,165,989,190 2,368,188,207
56,526,925
296,466,364
79,634,436
221,054,974
1,792,431,508 1,964,928,482 2,113,275,446
26,837,357
228,075,404
2,058,008,001 2,165,989,190 2,368,188,207
6,076,874
259,499,619
7,655,132
193,405,576
(1) Converted into Pesos based on the reference exchange rates reported by the Central Bank for December 31, 2023 (U.S.$1.00 to
Ps.808.48), December 31, 2022 (U.S.$1.00 to Ps.177.13) and December 31, 2021 (U.S.$1.00 to Ps.102.75).
Results of Operations for the Years Ended December 31, 2023 and 2022
We discuss below our results of operations for the year ended December 31, 2023 as compared with our results of operations
for the year ended December 31, 2022. We expressly state that our results of operations for the year ended December 31, 2022 as
compared with our results of operations for the year ended December 31, 2021 are hereby incorporated by reference to
143
“Item 5.A. Operating Results” of the Form 20-F for the year ended December 31, 2022 filed by us with the U.S. Securities and Exchange
Commission under the file number 001-37777.
Selected Ratios
SELECTED RATIOS
Return (loss) on average equity (1)
Return (loss) on average assets (2)
Net Interest Margin (3)
Net Fee Income Ratio (4)
Efficiency Ratio (5)
Cost/assets (6)
Basic earnings per share (Ps.) (7)
Diluted earnings per share (Ps.)
Basic earnings (losses) per share (in US$) (8)
Diluted (losses) per share (in U.S.$.) (8)
Liquidity and Capital
Loans to Total Deposits (9)
Total Equity / Total Assets
Pro forma Consolidated Capital / Risk weighted assets (10)
Pro forma Consolidated Tier1 Capital / Risk weighted assets (10)
LCR Pro forma(10)
Risk Weighted Assets/Assets (10)
Asset Quality
Non-performing loans as a percentage of Total Loans
Allowances as a percentage of Total Loans
Cost of risk (11)
Cost of risk, net (12)
Coverage Ratio(13)
Other Data
Dividends paid to ordinary shares (Ps.thousands)
Dividends per common share (Ps.)
2023
2022
(in thousands of Pesos, except percentages)
2021
16.8 %
2.5 %
31.5 %
14.5 %
54.7 %
13.5 %
116.6
N/A
0.1
N/A
32.3 %
16.6 %
21.0 %
21.0 %
112.6 %
51.3 %
1.2 %
3.5 %
5.9 %
5.0 %
291.6 %
(5.2) %
(0.7) %
19.6 %
18.3 %
79.9 %
13.0 %
(34.5)
N/A
(0.0)
N/A
45.0 %
13.3 %
13.6 %
13.0 %
103.5 %
61.4 %
3.7 %
5.0 %
5.6 %
4.5 %
142.7 %
(3.3) %
(0.4) %
17.3 %
20.7 %
74.7 %
11.3 %
(23.0)
N/A
(0.0)
N/A
57.4 %
13.2 %
13.3 %
12.7 %
109.6 %
65.2 %
4.3 %
6.1 %
5.3 %
4.6 %
145.0 %
—
—
1,531,690
3.4
3,122,242
6.8
(1) Attributable comprehensive income divided by average shareholders’ equity, calculated on a daily basis and measured in local
currency.
(2) Attributable Comprehensive Income divided by average assets, calculated on a daily basis and measured in local currency.
(3) Net interest income + Net income from financial instruments at fair value through profit or loss + Result from derecognition of
assets measured at amortized cost + Exchange rate differences on gold and foreign currency, divided by average interest-earning
assets.
(4) Net services fee income + Income from insurance activities divided by the sum of Net interest income + Net income from
financial instruments at fair value through profit or loss + Result from derecognition of assets measured at amortized cost +
Exchange rate differences on gold and foreign currency, net Services fee income, Income from insurance activities , etc.
(5) Personnel, Administrative expenses and Depreciation & Amortization divided by the sum of Net interest income + Net income
from financial instruments at fair value through profit or loss + Result from derecognition of assets measured at amortized cost +
Exchange rate differences on gold and foreign currency, net Services fee income, Income from insurance activities and Other net
operating income.
(6) Administration expenses divided by average assets, calculated on a daily basis.
(7) Basic earnings per share (in Pesos) are based upon the weighted average of Grupo Supervielle’s outstanding shares, which were
442,727,459 for the year ended December 31, 2023, 454,274,443 for the year ended December 31, 2022 and 456,722,322 for
the year ended December 31, 2021.
(8) Peso amounts have been translated into U.S. dollars at the reference exchange rate reported by the Central Bank as of
December 31, 2023 which was Ps.808.48 to U.S.$1.00.
(9) Loans and Leasing before allowances divided by total deposits.
144
(10) For the calculation of these line items, see “Item 4.B. Business Overview—Banking Regulation and Supervision.” Proforma ratios
include the liquidity retained at the holding company (Grupo Supervielle) level, which are available for future capital injections to
our subsidiaries).
(11) Loan loss provisions divided by total financing (Loans, Leasing, and off-balance guarantees granted to corporate customers as
guaranteed SMEs bonds, “Pagares Bursatiles” and foreign trade transactions as of end of the reported period.
(12) Loan loss provisions including recovered loan loss provisions divided by total financing (Loans, Leasing, and off-balance
guarantees granted to corporate customers as guaranteed SMEs bonds, “Pagares Bursatiles” and foreign trade transactions as of
end of the reported period).
(13) Allowances for loan losses divided by non-performing loans.
Attributable Comprehensive Income and Attributable Net Income
Grupo Supervielle S.A.
Change
December
As of December 31,
2023
Ps.
(in thousands of Pesos, except percentages)
2022
Ps.
%
31,
2023/2022
Consolidated Income Statement Data
Interest income
Interest expenses
Net interest income
Net income from financial instruments at fair value through profit or loss
Result from derecognition of assets measured at amortized cost
Exchange rate difference on gold and foreign currency
NIFFI and Exchange Rate Differences
Net Financial Income
Commissions income
Commissions expense
Income from insurance activities
Net Service Fee Income
Sub Total
Other operating income
Result from exposure to changes in the purchasing power of the currency
Loan loss provisions
Net Operating Revenue
Personnel expenses
Administration expenses
Depreciations and impairment of premises and equipment
Other operating expenses
Operating income
Results before taxes from continuing operations
Income tax
Net (loss) / income for the year
Net (loss) / income for the year attributable to parent company
Net (loss) / income for the year attributable to non-controlling interest
Total Other Comprehensive (loss) / income
Other comprehensive (loss) / income attributable to parent company
Other comprehensive (loss) / income attributable to non-controlling interest
Total Comprehensive (loss) / income
Total comprehensive (loss) / income attributable to parent company
Total comprehensive (loss) / income attributable to non-controlling interest
Return on Average Shareholders’ Equity
Return on Average Assets
1,157,697,255
(825,494,087)
332,203,168
138,081,046
16,857,100
5,800,908
160,739,054
492,942,222
93,125,252
(24,176,077)
14,431,313
83,380,488
576,322,710
23,688,747
(108,923,511)
(33,640,071)
457,447,875
(160,395,452)
(84,438,694)
(31,931,273)
(94,289,712)
86,392,744
86,392,744
(34,734,935)
51,657,809
51,615,837
41,972
3,308,098
3,304,317
3,781
54,965,907
54,920,154
45,753
784,354,347
(515,399,394)
268,954,953
56,821,678
1,531,618
8,541,784
66,895,080
335,850,033
94,478,177
(33,392,724)
14,104,154
75,189,607
411,039,640
32,671,074
(55,271,939)
(44,129,627)
344,309,148
(167,825,508)
(88,946,808)
(31,447,803)
(82,925,021)
(26,835,992)
(26,835,992)
11,164,078
(15,671,914)
(15,654,911)
(17,003)
(3,615,999)
(3,612,173)
(3,826)
(19,287,913)
(19,267,084)
(20,829)
47.6 %
60.2 %
23.5 %
143.0 %
1,000.6 %
(32.1) %
140.3 %
46.8 %
(1.4) %
(27.6) %
2.3 %
10.9 %
40.2 %
(27.5) %
97.1 %
(23.8) %
32.9 %
(4.4) %
(5.1) %
1.5 %
13.7 %
(421.9) %
(421.9) %
(411.1) %
(429.6) %
(429.7) %
(346.9) %
(191.5) %
(191.5) %
(198.8) %
(385.0) %
(385.0) %
(319.7) %
16.8 %
2.5 %
(5.2) %
(0.7) %
145
Attributable net income in 2023 amounted to a Ps.51.6 billion gain, as compared to a Ps.15.7 billion loss in 2022. Net Income for
the year reflects the successful execution of the Company’s strategic plan implemented in 2022 and 2023 to optimize operations,
consolidate businesses, grow in profitable products and increase cross-sell. The main factors explaining the increase in net income
were (i) a higher yield on larger investment portfolio volumes, (ii) a higher loan portfolio yield due to the increase of interest rates by
the Central Bank in 2023, (iii) a decrease in administrative and personnel expenses as a result of strategic measures adopted in 2022
and 2023 to consolidate the Company’s businesses, (iv) an increase in fees mainly as a result of higher fees associated with the
brokerage business of IOL and asset management, and greater efficiencies in credit card processing costs, and (v) a decrease in Loan
loss provisions mainly as a result of the shift in loans to middle-market corporates and payroll customers along with significantly
lower exposure to consumer loans. This was partially offset by: (i) higher losses in the Result from exposure to changes in the
purchasing power of the currency due to the impact of the increase in inflation rate in Argentina in 2023 that affected a higher net
monetary assets balance, and (ii) an increase in other net operating expenses mainly as a result of the annual revaluation of fixed
assets to reflect market value at year-end and other provisions for strategic initiatives in different business units.
In 2023, ROAA and ROAE were 2.5% and 16.8%, respectively, as compared to (0.7)% and (5.2)%, respectively, in 2022.
In 2023, attributable comprehensive income amounted to a Ps.54.9 billion gain, compared to a Ps.19.3 billion loss in 2022,
mainly as a result of: (i) a 46.8% or Ps. 157.1 billion increase in net financial income to Ps. 492.9 billion compared to Ps. 335.9 billion
in 2022 due to higher yield and volume on investment portfolio and loan portfolio repricing while low credit demand from the private
sector remained at historical lows, further impacted by inflation of 211.4% in 2022, (ii) a 4.0% or Ps. 11.5 billion decrease in
personnel administrative and depreciations and amortizations, reflecting structural cost efficiencies, (iii) a 10.8% or Ps. 8.2 billion
increase in net service fee income to Ps. 83.3 billion from Ps. 75.2 billion in 2022 reflecting higher fees from the brokerage business at
IOL and asset management and greater efficiencies in credit card processing costs, and (iv) a 23.8% or Ps. 10.5 billion decrease in
Loan Loss provisions reflecting improved credit quality on stringent credit scoring criteria and mix-shift in loan portfolio. These were
partially offset by: (i) a Ps.53.6 billion increase in the loss from exposure to changes in the purchasing power of the currency to
Ps.108.9 billion in 2023, compared to Ps.55.3 billion in 2022, (ii) a 40.5% or Ps. 20.4 billion increase in Other net operating losses
reflecting the annual revaluation of fixed assets to reflect market value at year-end and other provisions for strategic initiatives in
different business units and (iii) a Ps. 34.7 billion charge in income tax compared to a gain of Ps. 11.2 billion in 2022.
Net Financial Income
Net financial income in 2023 amounted to Ps.492.9 billion and net interest margin (“NIM”) was 31.5%, compared to
Ps.335.9 billion and 19.6%, respectively, in 2022. This increase was mainly explained by: (i) a higher yield and volume on investment
portfolio and (ii) loan portfolio repricing while low credit demand from the private sector remained at historical lows. These were
partially offset by (i) a 35.3% increase in cost of funds derived from the impact of regulatory minimum rates on time deposits, and (ii)
the increase in market interest rates.
NIM increased to 31.5% from 19.6% mainly as a result of the increase in net financial income resulting from higher spreads
on government securities and loans, and assets and liability management strategy. This increase was partially offset by (i) a 35.3%
increase in cost of funds due to the increase of interest rates by the Central Bank, and (ii) a 23.1% decrease in average volumes
resulting from weak credit demand.
The following table sets forth a breakdown of our net interest income, and net income from financial institutions (“NIFFI”),
result from derecognition of assets measured at amortized cost and exchange rate differences as of December 31, 2023 and 2022:
Grupo Supervielle S.A.
As of December 31,
2022
2023
(in thousands of Pesos, except percentages)
%
23.5 %
332,203,168 268,954,953
Change
$
$
160,739,054
66,895,080
492,942,222 335,850,033
140.3 %
46.8 %
Net Interest Income
NIFFI, Result from derecognition of assets measured at amortized cost and Exchange
Rate differences
Total
146
NIM by currency
Net Interest Margin Breakdown
Total NIM
Ps.NIM
U.S.$NIM
Loan Portfolio NIM
Ps.NIM
U.S.$NIM
Investment Portfolio NIM
Ps.NIM
U.S.$NIM
Grupo Supervielle S.A.
As of December 31,
2022
2023
(in percentages)
31.5 %
26.1 %
98.7 %
15.8 %
16.5 %
7.2 %
46.4 %
36.1 %
134.5 %
19.6 %
19.1 %
26.8 %
16.3 %
17.4 %
5.6 %
21.6 %
20.8 %
37.5 %
NIM includes the exchange rate differences and net gains or losses from currency derivatives.
Net Interest Income
Net interest income in 2023 totaled Ps.332.2 billion, a 23.5% increase from the Ps.269.0 billion recorded in 2022, mainly due
to (i) a higher result from securities of the treasury position measured at fair value through other comprehensive income and at amortized
cost, (ii) an increase of 73.2%, or Ps. 272.0 billion, in income from Central Bank securities and repo transactions as a result of a 35.0%
increase in the yield of those securities and a 4.0% increase in the average balance of those assets, and (iii) an increase of 13.3%, or
Ps.48.4 billion, in income from loans mainly explained by a 22.6% increase in interest earned while volumes declined 24.1% mainly as
a result of weak credit demand in the context of the increase of inflation in Argentina in 2023. These were partially offset by an increase
of 3,530 basis points in cost of funds derived from the impact of regulatory minimum rates on time deposit.
Interest Income
Interest income in 2023 totaled Ps.1,157.7 billion, a 47.6% increase from the Ps.784.4 billion recorded in 2022, primarily due
to (i) a higher result from securities of the treasury position measured at fair value through other comprehensive income and at amortized
cost, (ii) an increase of 73.2%, or Ps. 272.0 billion, in income from Central Bank securities and repo transactions as a result of an increase
of 3,504 basis point in the yield of those securities and a 4.0% increase in the average balance of those assets, and (iii) an increase of
13.3%, or Ps.48.4 billion, in income from loans mainly explained by an increase of 2,260 basis points in interest earned while volumes
declined 24.1% mainly as a result of by weak credit demand in the context of the increase of inflation in Argentina in 2023.
147
As of December 31, 2023 and 2022, our interest income was comprised of the following:
Grupo Supervielle S.A.
Year ended December 31,
Interest on overdrafts
Interest on promissory notes
Interest on personal loans
Interest on corporate unsecured loans
Interest on credit cards loans
Interest on mortgage loans
Interest on automobile and other secured loans
Interest on foreign trade loans
Interest on leases
Interest on government and corporate securities measured at amortized cost
Other*
Total
2023
Ps.
2022
Ps.
2023/2022
%
(in thousands of Pesos, except percentages)
44,410,794
67,470,691
66,454,064
96,127,460
42,005,274
62,359,572
12,574,777
3,180,062
17,868,411
23,471,096
64,028,835
92,146,481
50,712,155
45,870,806
56,407,739
13,122,573
4,010,233
14,262,772
567,893,807 387,019,350
33,302,307
177,352,343
1,157,697,255 784,354,347
89.2 %
5.4 %
(27.9) %
89.6 %
(8.4) %
10.6 %
(4.2) %
(20.7) %
25.3 %
46.7 %
432.6 %
47.6 %
* Includes results from securities issued by the Central Bank, results from other securities recorded as available for sale and results
from repo transactions with the Central Bank.
The following table sets forth our yields on interest-earning assets:
Interest-Earning Assets
Investment Portfolio
Government and Corporate Securities
Securities Issued by the Central Bank
Total Investment Portfolio
Loans
Loans to the Financial Sector
Overdrafts
Promissory Notes
Mortgage loans
Automobile and Other Secured Loans
Personal Loans
Corporate Unsecured Loans
Credit Card Loans
Receivables from Financial Leases
Total Loans excl. Foreign trade and U.S.$.loans
Foreign Trade Loans and U.S.$.loans
Total Loans
Repo transactions
Total Interest-Earning Assets
Grupo Supervielle S.A.
Year ended December 31,
2023
Average
Balance
Average
Nominal
Rate
2022
Average
Balance
Average
Nominal
Rate
(in thousands of Pesos, except percentages)
228,307,670
454,651,402
682,959,072
90.1 %
213,597,053
635,888,704
92.5 %
91.7 % 849,485,757
46.8 %
53.3 %
51.6 %
2,423,357
47,376,656
88,661,948
70,185,435
20,589,065
80,141,775
124,706,925
104,462,883
28,417,785
566,965,829
39,330,529
606,296,358
277,323,918
1,566,579,348
629,394
53.5 %
39,986,427
93.7 %
136,285,752
76.1 %
78,972,720
88.8 %
24,428,584
61.1 %
139,004,401
82.9 %
120,912,394
77.1 %
161,831,667
40.2 %
62.9 %
35,301,661
72.4 % 737,353,000
61,270,504
68.2 % 798,623,504
80.4 %
66,715,957
80.6 % 1,714,825,218
8.1 %
42.4 %
58.7 %
47.0 %
71.4 %
53.7 %
66.3 %
41.9 %
28.3 %
40.4 %
48.9 %
6.5 %
45.6 %
49.5 %
48.7 %
The average balance of loans excluding foreign trade loans and U.S. dollars loans totaled Ps.567.0 billion in 2023, representing
a 23.1% decrease from Ps.737.4 billion in 2022. This decrease in the average balance of our total loan portfolio (excluding foreign trade
loans and U.S. dollar loans) is mainly explained by the following changes in average balance portfolio: (i) a 42.3% or Ps.58.9 billion
decrease in personal loans, (ii) a 35.4% or Ps. 57.4 billion decrease in credit cards and (iii) a 34.9% or Ps. 47.6 billion decrease in
promissory notes. These were partially offset by a 18.5% or Ps. 7.4 billion increase in overdrafts.
148
Interest on public and corporate securities measured at amortized cost amounted to Ps.567.9 billion in 2023 compared to Ps.
387.0 billion in 2022. This line item mainly reflects results from investments in securities held to maturity or available for sale.
The average interest rate on total loans (excluding foreign trade loans and U.S. dollar loans) decreased to 72.4% in 2023 from
48.9% in 2022. Average BADLAR increased 4,250 basis points in 2023 to 95.8% compared to 53.3% in 2022.
Interest Expenses
As of December 31, 2023 and 2022, our Interest expenses were comprised of the following:
Grupo Supervielle S.A.
Year ended December 31,
2023
Ps.
2023/2022
%
(in thousands of Pesos, except percentages)
2022
Ps.
Interest on current accounts deposits
Interest on time deposits
Interest on other financial liabilities
Interest from financing sector
Other
Total
374,828,604 211,185,911
439,013,593 295,156,581
3,968,644
3,356,878
1,731,380
825,494,087 515,399,394
3,621,357
2,772,705
5,257,828
77.5 %
48.7 %
(8.8) %
(17.4) %
203.7 %
60.2 %
Interest expenses for 2023 totaled Ps.825.5 billion, a 60.2% increase from Ps.515.4 billion for 2022. This increase was due to
an increase of 3,330 basis points in the average rate of interest bearing liabilities rate, mainly due to the increase in regulated interest
rates on time deposits while the average balance of interest-bearing liabilities decreased 9.6%. In 2023, non-interest bearing deposits
amounted to Ps 423.1 billion decreasing 14.7% or Ps.72.9 billion from Ps.496.0 billion in 2022. Cost of funds increased 24.5% basis
points to 55.2% in 2023 from 30.7% in 2022.
The following table sets forth our yields on interest-bearing liabilities and low and non-interest bearing deposits as of December
31, 2023 and 2022:
Grupo Supervielle S.A.
As of December 31,
2023
Average
Balance
Average
Nominal
Rate
2022
Average
Balance
Average
Nominal
Rate
(in thousands of Pesos, except percentages)
Interest-Bearing Liabilities
Special Checking Accounts
Ps. Savings Accounts
Fx Savings Accounts
Time Deposits
Ps. Time Deposits
Fx Time Deposits
Borrowings from Other Financial Instruments and Unsubordinated
Negotiable Obligations
Total Interest-Bearing Liabilities
Low and Non-Interest Bearing Deposits
Savings Accounts
Ps. Savings Accounts
Fx Savings Accounts
Checking Accounts
Ps. Checking Accounts
Fx Checking Accounts
Total Low and Non-Interest Bearing Deposits
Total Interest-Bearing Liabilities and Low and Non-Interest Bearing
Deposits
535,525,590
470,487,902
65,037,688
518,912,586
504,637,536
14,275,050
70.0 % 549,638,508
490,110,056
79.6 %
59,528,452
0.2 %
84.6 % 610,457,165
590,957,540
87.0 %
19,499,625
0.4 %
38.4 %
43.1 %
0.3 %
48.4 %
49.9 %
0.4 %
12,415,673
1,066,853,849
51.5 %
19,537,112
76.9 % 1,179,632,785
37.5 %
43.5 %
226,456,428
156,859,024
69,597,404
196,653,142
187,862,214
8,790,928
423,109,570
0.9 % 279,490,891
210,705,156
1.2 %
68,785,735
0.0 %
216,518,510
207,178,834
— %
— %
9,339,676
— % 496,009,401
0.4 %
0.5 %
0.0 %
— %
— %
— %
1,489,963,419
55.2 % 1,675,642,186
30.7 %
149
Average balance of our interest-bearing liabilities in 2023 totaled Ps.1,066.9 billion, compared to Ps.1,179.6 billion in 2022.
The Ps.112.8 billion decrease was explained by: (i) a 15.0% decrease to Ps.518.9 billion in the average balance of time deposits, (ii) a
2.6% or Ps. 14.1 billion decrease of interest-bearing special checking accounts from Ps.549.6 billion in 2022 to Ps. 535.5 billion in 2023,
and (iii) a 36.5% or Ps.7.1 billion decrease in the average balance of our borrowings from other financial institutions.
Average balance of our low or non-interest-bearing deposits in 2023 totaled Ps.423.1 billion, compared to Ps.496.0 billion in
2022. This decrease was mainly due to (i) a 19.0% or Ps.53.0 billion decrease in average balance of our savings accounts and (ii) a 9.2%
or Ps. 19.9 billion decrease in the average balance of checking accounts.
The following table sets forth our interest bearing deposits by denomination as of December 31, 2023 and 2022:
Average Balance Interest Paid Average Nominal Rate Average Balance Interest Paid Average Nominal Rate
(in thousands of Pesos, except percentages)
2023
2022
Grupo Supervielle S.A.
As of December 31,
Savings accounts
Pesos
Dollars
Total
Special checking accounts
Pesos
Dollars
Total
Time deposits
Pesos
Dollars
Total
Total by currency
Pesos
Dollars
Total Deposits
156,859,024
69,597,404
226,456,428
1,908,702
17,095
1,925,797
470,487,902 374,674,049
65,037,688
154,555
535,525,590 374,828,604
504,637,536 438,950,685
14,275,050
62,908
518,912,586 439,013,593
1,131,984,462 815,533,436
234,558
1,280,894,604 815,767,994
148,910,142
1.2 %
0.0 %
0.9 %
210,705,156
68,785,734
279,490,890
1,079,264
17,884
1,097,148
79.6 %
0.2 %
70.0 %
490,110,056
59,528,452
549,638,508
211,032,372
153,540
211,185,912
87.0 %
0.4 %
84.6 %
590,957,540
19,499,625
610,457,165
295,082,101
74,479
295,156,580
72.0 %
0.2 %
63.7 %
1,291,772,752
147,813,811
1,439,586,563
507,193,737
245,903
507,439,640
0.5 %
0.0 %
0.4 %
43.1 %
0.3 %
38.4 %
49.9 %
0.4 %
48.4 %
39.3 %
0.2 %
35.2 %
Net Income from financial instruments and Result from recognition of assets measured at amortized cost and Exchange rate
differences
Net income from financial instruments at fair value through profit or loss, result from derecognition of assets measured at
amortized cost and exchange rate differences for 2023 totaled Ps.160.7 billion, increasing 140.3% from Ps.66.9 billion in 2022.
The following table sets forth our Net income from financial instruments at fair value through profit or loss as of December
31, 2023 and 2022.
Net income from financial instruments at fair value through profit or loss
Income from corporate and government securities
Income from securities issued by the Argentine Central Bank
Derivatives
Total
Result from derecognition of assets measured at amortized cost
Exchange rate difference on gold and foreign currency
Total
150
Grupo Supervielle S.A.
As of December 31,
2022
2023
Ps.
Ps.
(in thousands of Pesos)
127,798,716
—
10,282,330
138,081,046
16,857,100
5,800,908
160,739,054
51,452,910
3,303,523
2,065,245
56,821,678
1,531,618
8,541,784
66,895,080
Financial income from U.S. dollar operations
NIFFI
U.S. dollar Government Securities
Term Operations
Interest Income
U.S. dollar Government Securities
Exchange rate differences on gold and foreign currency
Total Income from U.S. dollar operations
Grupo Supervielle S.A.
As of December 31,
2022
2023
Ps.
Ps.
(in thousands of Pesos)
100,181,754
30,672,098
20,389,768
10,282,330
69,509,656
69,509,656
5,800,908
105,982,662
17,935,476
9,586,946
7,521,703
2,065,243
8,348,530
8,348,530
8,541,784
26,477,260
Total income from U.S. dollar operations for 2023 totaled Ps.106.0 billion, compared to Ps.26.5 billion in 2022. This increase
is mainly explained by higher net gain on U.S.$ and U.S.$ linked government securities partially offset by lower results from term
operations and lower exchange rate differences.
Result from exposure to changes in the purchasing power of money
Result from exposure to changes in the purchasing power of the currency for 2023 totaled a Ps.108.9 billion loss, from the
Ps.55.3 billion loss in 2022. This reflects the loss in the purchasing power of the currency to which our net monetary assets are exposed
as a result of the 211.4% and 94.8% increases in consumer price index in 2023 and 2022, respectively, while net monetary assets
increased in 2023 compared to 2022. Grupo Supervielle’s capital is hedged against inflation through different inflation linked
instruments, including mortgage loans and sovereign bonds.
Loan Loss Provisions
Loan loss provisions totaled Ps.33.6 billion in 2023, a 23.8% decrease compared to Ps.44.1 billion in 2022. This decrease
performance reflects improved credit quality on stringent credit scoring criteria and mix-shift in loan portfolio. In 2023 and 2022, the
level of provisioning reflects Grupo Supervielle’s IFRS9 expected loss models and the nominal growth of the loan portfolio.
Loan loss provisions include the expected losses for each portfolio and segment, based on past performance and current
conditions as of the financial statements date. The increase in delinquency also requires expected losses to be measured for the whole
life of each loan, instead of accounting for expected losses during a 12-month period. This increases significantly the probability of
default for loans with a maturity of more than 1 year. For further information, see “Item 4.E. Selected Statistical Information—Amounts
Past Due Loans and Other Financing.”
As of December 31, 2023, the coverage ratio increased to 286.0% from 142.7% as of December 31, 2023, reflecting Grupo
Supervielle’s IFRS9 expected loss models and the nominal growth of the non performing loan portfolio. The total non-performing loan
(“NPL”) ratio was 1.4% as of December 31, 2023, decreasing 2.30% from 3.7% as of December 31, 2022. This was driven by the shift
in loans to middle-market corporates and payroll customers along with significantly lower exposure to consumer loans, the improvement
in retail customer behavior and the sale of delinquent retail loans, mainly open market and former consumer finance customers. The
Bank has been tightening its underwriting policies in this segment during 2023.
See changes in loan loss provisions in Note 25 to our audited financial statements. Loans and Other Financing of our audited
consolidated financial statements.
151
Net Services Fee Income
Our net services fee income was comprised of:
Commissions from deposits accounts
Commissions from credit and debit cards
Commissions from loans operations
Other Commissions
Total Services fee income
Exports and foreign currency operations
Commissions paid
Total Services fee expenses
Income from insurance activities
Net Service Fee Income
Grupo Supervielle S.A.
Year ended December 31,
2023
Ps.
2022
Ps.
2023/2022
%
(in thousands of Pesos, except percentages)
37,391,888
20,594,231
368,893
34,770,240
93,125,252
(555,520)
(23,620,557)
(24,176,077)
14,431,313
83,380,488
38,148,025
29,729,082
950,232
25,650,838
94,478,177
(787,995)
(32,604,729)
(33,392,724)
14,104,154
75,189,607
(2.0) %
(30.7) %
(61.2) %
35.6 %
(1.4) %
(29.5) %
(27.6) %
(27.6) %
2.3 %
10.9 %
Net services fee income (excluding Income from insurance activities ) totaled Ps. 68.9 billion in 2023, a 12.9% increase
compared to Ps.61.1 billion in 2022. This increase was mainly driven by:
(i)
(ii)
(iii)
a 158.1% or Ps. 8.8 billion increase in brokerage fees to Ps. 14.3 billion in 2023 compared to Ps. 5.5 billion in 2022.
In 2023, brokerage fees represented 15.4% of total fee income compared to 5.9% in 2022, demonstrating IOL’s
ability to acquire and retain customers. Monthly active users at IOL increased five times to 271,000, new accounts
increased by over eight times, and transactions increased by five times, comapred to 2022;
a 27.6% or Ps. 9.2 billion decrease in fee expenses mainly related to lower credit cards processors fees explained by
weak credit demand; and
an 11.4% or Ps. 789.8 million increase in asset management fees that represented 8.3% of total fee income in 2023
compared to 7.3% in 2022.
This increase were partially offset by (i) lower banking business fee income as fee repricing did not match the 211.4% increase in
inflation in Argentina in 2023, (ii) a 30.7% or Ps.9.1 billion decrease in credit card commissions, (iii) a 2.0% or Ps. 756.1 million
decrease in deposit account commissions (comprised principally of maintenance and transaction fees on checking and savings
accounts), and (iv) a 61.2% or Ps. 581.3 million decrease in loan related fees.
Income from insurance activities
Income from insurance activities amounted to Ps.14.4 billion in 2023, reflecting a 2.3% increase from the Ps.14.1 billion
recorded in 2022. In 2023, gross written premiums decreased 3.9% from 2022, with non-credit related policies decreasing Ps.202 million,
or 2.1%. Claims paid amounted to Ps.1.3 billion decreasing 18.9% compared to 2022.
152
Personnel and Administration Expenses
The following table sets forth the components of our administrative expenses:
Payroll and social securities
Other expenses
Total Personnel expenses
Directors’ and statutory auditors’ fees
Professional fees
Advertising and publicity
Taxes
Maintenance, security and services
Rent
Others
Total Administration Expenses
Total Personnel and Administration Expenses
Grupo Supervielle S.A.
Year ended December 31,
2022
2023
Ps.
Ps.
(in thousands of Pesos, except percentages)
2023/2022
%
150,064,085
10,331,367
160,395,452
3,291,819
25,006,003
4,737,212
20,408,129
19,653,248
66,400
11,275,883
84,438,694
244,834,146
154,276,818
13,548,690
167,825,508
2,484,677
25,862,516
6,893,010
20,091,751
21,561,754
245,871
11,807,229
88,946,808
256,772,316
(2.7) %
(23.7) %
(4.4) %
32.5 %
(3.3) %
(31.3) %
1.6 %
(8.9) %
(73.0) %
(4.5) %
(5.1) %
(4.6) %
In 2023, personnel expenses amounted to Ps.160.4 billion, a 4.4% or Ps.6.4 billion decrease compared to 2022 reflecting our
business consolidation and structural cost efficiencies. Personnel expenses includes severance payments and early retirement charges
related to Grupo Supervielle’s transformation and efficiency programs of Ps.10.5 billion in 2023 and Ps.23.5 billion in 2022.
The employee base at the end of 2023 reached 3,663 people, decreasing 4.0%, or 151 employees, compared to 2022. The
Bank’s headcount was reduced by 138 employees or 4.1% compared to 2022. IOL invertironline increased its staff by 37 employees
compared to 2022. Insurance reduced its staff by 6 employees or 3.8% compared to 2022.
Administration expenses totaled Ps.84.4 billion in 2023,decreasing 5.1% from the Ps.88.9 billion recorded in 2022. This
performance was primarily due to the strict cost control implemented by Grupo Supervielle. In 2023, advertising and publicity costs
decreased 31.3% or Ps. 2.2 billion while maintenance and security service costs decreased 8.9% or Ps.1.9 billion to Ps.19.7 billion,
compared to Ps.21.6 billion in 2022.
In 2023, the efficiency ratio was 54.7%, decreasing 25.2% from 2022. This decrease reflects a 40.2% increase in revenues
mainly reflecting higher margin and higher net fee income, together with a 4.0% decrease in total expenses.
Other Income/(Expenses), Net
We had other expenses, net of Ps.70.6 billion for 2023, compared to Ps.50.3 billion in 2022. This line item mainly reflects: (i)
a 2.5% or Ps.1.3 billion increase in turnover taxes to Ps.55.0 billion compared to Ps.53.6 billion in 2022, (ii) a Ps.7.0 billion loss from
valuation of real estate assets at market value at the end of the year, (iii) a Ps. 8.0 billion provision to execute several strategic initiatives
in different business units, and (iv) a Ps. 4.0 billion contingency provision related to turnover taxes.
Commencing January 2020 and January 2023, the tax authorities of the City of Buenos Aires and the Province of Mendoza,
respectively, began to impose a turnover tax on revenues derived from securities and instruments, such as LELIQs/NOTALIQs or Repos)
issued by the Central Bank. On December 11, 2020, the Central Bank initiated certain actions against the tax authorities of the City of
Buenos Aires and the Province of Mendoza regarding the unconstitutionality of the Turnover Tax, as it directly affects the purposes and
functions assigned to the Central Bank, substantially altering the execution of national monetary and financial policies. In addition, the
Argentine Banking Association, the Argentine Bankers’ Association, and the majority of financial institutions operating in the City of
Buenos Aires and the Province of Mendoza have filed constitutional actions against the Turnover Tax. These actions are still pending
resolution by the Supreme Court of Justice of Argentina.
The Bank believes that the reasons supporting the non-taxability of these types of instruments are strong and based on expert
opinions, both internal and from third-party specialists. We estimate the likelihood of a favorable ruling to our position. Consequently,
153
the Bank has ceased paying the tax on the revenues generated by LELIQ securities in Mendoza since January 2023, and by LELIQ and
Repo transactions in the City of Buenos Aires since April 2023. However, if the dispute with the tax authorities enters a judicial phase,
we may have to pay the claimed amount and ask for reimbursement. For this reason, we recorded a provision of Ps. 4.0 billion, reflecting
the net present value of probable outflows without considering subsequent reimbursements.
On June 30, 2023, Law No. 6655 was published, which establishes the reduction of the Turnover Tax rate to 0% or 2.85% for
BCRA’s repo transactions and securities, subject to regulation and contingent on the effective transfer of revenue-sharing funds or
agreements reached with the Argentine Government.
Other Comprehensive Income, net of tax
Other comprehensive income, net of tax totaled a net gain of Ps.3.3 billion in 2023 compared to a net loss of Ps.3.6 billion in
2022. Other Comprehensive Income in the quarter reflects mark to market valuation of government securities held by the Company
recorded at Fair value through other comprehensive income, partially offset by Other Comprehensive loss from the valuation of real
estate assets at market value.
Income Tax
The tax reform passed by Congress in December 2017 and the amendment to Income Tax Law No. 20,628 (the “Income Tax
Law”) passed in December 2019, allowed the deduction of losses arising from exposures to changes in the purchasing power of the
currency, only if inflation as measured by the Consumer Price Index (CPI) issued by the INDEC would exceed the following thresholds
applicable for each fiscal year: 55% in 2018, 30% in 2019 and 15% in 2020. For 2021 and subsequent periods, inflation should exceed
100% in 3 years on a cumulative basis to deduct inflation losses. In 2018, the 55% threshold was not met, but in 2019 inflation widely
exceeded 30%. Therefore, since 2019 the income tax provision considers the losses arising from exposures to changes in the purchasing
power of the currency, which significantly lowered the income tax expense compared to previous years.
In June 2021, a tax law was enacted establishing a new income tax rate structure with three segments in relation to the level of
accumulated taxable net income which are adjusted annually considering the CPI. The new income tax rate structure is: (i) 25% for
accumulated taxable income of up to Ps.7.6 million; (ii) 30% for taxable income greater than Ps.7.6 million up to Ps.76 million; and (iii)
35% for taxable income greater than Ps.76 million. This modification is applicable for fiscal years beginning on January 1, 2021.
In 2023, Grupo Supervielle recorded an income tax loss of Ps.34.7 billion compared to an income tax gain of Ps.11.2 billion in
2022. The taxable income of each company is calculated on a stand-alone basis excluding the impact of the equity method results on
their respective subsidiaries. In addition, permanent differences between inflation adjustment for tax purposes and according to IAS 29
may arise, which may increase or decrease the effective tax rate.
Results by Segments
Our results by segments for the years ended December 31, 2023 and 2022 are shown in Note 3 to our audited consolidated
financial statements.
Personal and Business Banking
Attributable income in 2023 recorded a Ps.30.7 billion loss, compared to a Ps.42.2 billion loss in 2022. The main factors
explaining the this decrease were: (i) a Ps.51.5 billion or 46.9% increase in net financial income mainly due to higher distribution of
income from treasury funds, partially offset by weak credit demand and the increase in interest expenses mainly due to minimum interest
rates on time deposits as ruled by the Central Bank; and (ii) a Ps. 4.2 billion or 13.9% decrease in loan loss provisions. Loan loss
provisions include the expected losses for each portfolio and segment, based on past performance and current conditions as of the
financial statements date. Delinquency requires expected losses to be measured for the whole life of each loan, instead of accounting for
expected losses during a 12-month period. This increases significantly the probability of default for loans with a maturity of more than
one year. The performance reflects the shift in loans to middle-market corporates and payroll customers along with significantly lower
exposure to consumer loans, better retail customer behavior and the sale of delinquent retail loans, mainly in the open market and to
former consumer finance customers.
154
These were partially offset by: (i) a Ps. 11.5 billion or 5.7% increase in personnel expenses and administrative expenses; (ii) a
Ps.1.9 billion or 4.6% decrease in net service fee income as fees repricing did not anticipate the increase of 211.4% in inflation in
Argentina in 2023; (iii) a Ps. 11.7 billion decrease in the gain recorded in the segment from exposure to inflation; (iv) a Ps. 9.9 billion
or 44.4% increase in Other net operating losses; and (v) a tax gain of Ps.14.0 billion in 2023 compared to a tax gain of Ps.23.2 billion
in 2022.
In 2023, the Personal & Business Banking segment loans (including receivables from financial leases) reached Ps.259.4
billion as of December 31, 2023, decreasing 42.4% from 2022. The Personal & Business loan portfolio was negatively impacted by
weak credit demand in a context of high inflation and nominal rates, and to some extent by the sale of non-performing loans carried
out in 2023.
In 2023, the Personal & Business Banking segment’s deposits amounted to Ps. 580.1 billion, a 24.0% decrease from the
Ps.763.2 billion in 2022.
Corporate Banking
Attributable income in 2023 recorded a Ps.10.3 billion gain, compared to a Ps.4.4 billion gain in 2022, mainly due to: (i) a
41.5% or Ps. 18.7 billion increase in Net Financial Income mainly due to gains from treasury funds and loan portfolio repricing while
volumes continued to be impacted by weak credit demand. In 2023, interest expenses reflected the increase in market interest rates and
the impact of minimum interest rates on time deposits ruled by the Central Bank; (ii) a 21.7% or Ps.1.1 billion increase in net service
fee income reflecting fee repricing on bundle products to corporates in 2023; and (iii) a 63.9% or Ps.11.9 billion decrease in the loss in
the purchasing power of the currency to which our net monetary assets are exposed.
These were partially offset by: (i) Other expenses net of Ps. 12.7 billion compared to a gain of Ps. 595.0 million in 2022; (ii)
a 235.5% or Ps.3.6 billion increase in loan loss provisions. Loan loss provisions include the expected losses for each portfolio and
segment, based on past performance and current conditions as of the financial statements date, (iii) a 12.9% or Ps.3.3 billion increase
in Personnel, Administrative expenses and Depreciations and Amortizations related to Grupo Supervielle’s strategy to capture
operating efficiencies at the Bank; and (iv) an income tax charge of Ps. 5.9 billion in 2023 compared to Ps. 307.5 milion in 2022.
In 2023, the corporate banking segment’s loan and financing portfolio totaled Ps.196.6 billion compared to Ps.256.5 billion in
2022 reflecting weak credit demand. Also, in 2023 corporate deposits amounted to Ps.215.2 billion, compared to Ps.198.0 billion in
2022.
Treasury
Attributable income in 2023 recorded a Ps.60.2 billion gain, compared to a Ps.35.5 billion gain in 2022.
This performance is explained by a 46.6% or Ps.73.3 billion increase in Net Financial Income due to higher interest earned on
higher holdings of securities issued by the Central Bank and repo transactions and higher yield on higher volumes of government
securities.
This was partially offset by: (i) a 58.2% or Ps.35.2 billion loss increase from exposure to changes in the purchasing power to
Ps.95.7 billion due to higher investment portfolio volumes and an increase of inflation in Argentina in 2023 to 211.4%, (ii) a 5.0% or
Ps. 733.8 million increase in Personnel Expenses mainly due to the our strategy to capture operating efficiencies at the Bank, and (iii)
an income tax charge of Ps. 33.4 billion compared to Ps. 19.6 billion in 2022.
Consumer Finance
As of December 31, 2022, IUDÚ and Tarjeta were in the process of merging into the Bank. The remaining operations of IUDÚ
and Tarjeta as of such date are described in Note 21 to our consolidated financial statements.
Insurance
Attributable income totaled Ps.3.6 million in 2023 compared to Ps.2.7 billion in 2022. This was due to (i) a 151.3% or Ps. 6.8
billion increase in Net Financial income, and (ii) a 4.3% or Ps. 580 million increase in Net Service Fee income. In 2023, gross written
155
premiums decreased 3.9% from 2022, with non-credit related policies decreasing Ps.202 million, or 2.1%. Claims paid amounted to
Ps.1.3 billion decreasing 18.9% compared to 2022.
These were partially offset by: (i) a Ps.5.6 million increase in the net loss from exposure to changes in the purchasing power of
the currency, (ii) a 10.9% or Ps. 701.8 million increase in personnel and administrative expenses to Ps. 7.2 billion from Ps. 6.5 billion
in 2022, and (iii) an income tax charge of Ps. 2.0 billion from Ps. 1.9 billion in 2022.
Asset Management and Other Services
Attributable Income recorded a Ps.10.6 billion gainin 2023 compared to Ps.159.7 million loss in 2022. The increase in 2023
was mainly driven by:
(i) a Ps.9.8 billion increase in net service fee income to Ps.25.5 billion in 2023 from Ps. 15.7 billion in 2022 due to higher
revenues from IOL invertironline and from the asset management business. In 2023, brokerage fees represented 15.4% of total fee
income compared to 5.9% in 2022, demonstrating IOL’s ability to acquire and retain customers. Monthly active users at IOL increased
by five times to 271,000, new accounts increased by over eight times, and transactions increasedby five times, compared to 2022;
(ii) an Ps.8.0 billion increase in Net Financial Income to Ps. 12.2 billion in 2023 compared to Ps. 4.4 billion in 2022, mainly
due to higher yields on government securities; and
(iii) a 9.8% or Ps. 1.5 billion decrease in Expenses due to strict cost control implemented by Grupo Supervielle.
These were partially offset by a Ps. 8.0 billion charge in the result from exposure to inflation in 2023 compared to Ps. 3.9 billion
in 2022, and Ps. 6.5 billion income tax charge compared to Ps. 980.5 million in 2022.
Adjustments
Results incurred by Grupo Supervielle at the holding level, and transactions between segments, are not allocated to any
particular segment for internal reporting purposes and are disclosed under “Adjustments” to reconcile the total of each line item with
the amounts appearing in our statement of income.
Inter-segment transactions offset each other and do not impact total direct earnings on a consolidated basis. Other results not
allocated to segments totaled an attributable income of Ps.2.4 million loss in 2023 compared to a Ps.1.9 billion loss in 2022.
Consolidated Assets
The structure and main components of our consolidated assets as of the dates indicated were as follows:
As of December 31,
2023
2022
Amount
%
Amount
%
Cash and due from banks
Debt Securities at fair value through profit or loss
Loans and financing portfolio
Other debt securities
Other assets(1)
Total
(in thousands of Pesos, except percentages)
150,719,643
69,707,595
728,474,749
839,975,567
377,111,636
7.0 %
229,098,272
3.2 %
46,415,822
33.6 %
482,455,084
38.8 %
251,180,541
17.4 %
1,048,858,282
2,058,008,001 100.0 % 2,165,989,190 100.0 %
11.1 %
2.3 %
23.4 %
12.2 %
51.0 %
(1)
Includes mainly other receivables from financial transactions, equity investments, miscellaneous receivables, bank premises and equipment, miscellaneous assets,
and intangible assets.
Of our Ps.2,061.7 billion total assets as of December 31, 2023, Ps.1,976 billion, equivalent to 95.9% of the total assets,
corresponded to the Bank. As of December 31, 2023, our total direct exposure to the public sector amounted to Ps.1,033.2 billion which
is primarily composed of our holdings of securities issued by the Central Bank and repo transactions with the Central Bank and
government securities.
156
Item 5.B
Liquidity and Capital Resources
Asset and Liability Management
The purpose of the asset and liability management is to structure our consolidated statement of financial position in light of
interest rates, liquidity and foreign exchange risks, as well as market risk, public sector risk and our capital structure. Our Asset and
Liability Committee (“ALCO”) establishes specific limits with respect to risk exposure, sets forth our policy with respect to pricing and
approves commercial policies which may have a financial impact on our balance sheet. It is also responsible for the follow-up of
monetary aggregates and financial variables, our liquidity position, regulations from the Central Bank and monitoring the competitive
environment in assets, liabilities and interest rates.
Our main source of liquidity is the Bank’s deposit base. The Bank also receives deposits and interbank calls and issue short-
term debt securities in the Argentine capital markets for financing. Additionally, long-term financing and capital contributions enable
us to cover most of our liquidity requirements.
On July 20, 2022, our Board of Directors approved the establishment of the following terms and conditions for the acquisition
of its own shares under a repurchase program of the Group’s shares pursuant to Article 64 of Law 26,831 and CNV regulations (the
“First Program”): (i) maximum amount of the investment: up to Ps.2,000,000,000; (ii) maximum number of shares to be acquired: up
to 10% of the capital stock of Grupo Supervielle, as established by the applicable Argentine laws and regulations; (iii) payable price: up
to Ps.138.00 per Class B share and U.S.$2.20 per ADS on the New York Stock Exchange, and (iv) term for the acquisition: 250 days as
from the next day of the date of publication of the information in the Bolsa de Buenos Aires Daily Bulletin, subject to any renewal or
extension of the term, which will be informed to the public by the same means. On September 13, 2022, the Board of Directors of Grupo
Supervielle decided to increase the payable price related to the acquisitions under the First Program to Ps.155.00 per Class B share and
U.S.$2.70 per ADS on the New York Stock Exchange. On December 27, 2022, the Board of Directors of Grupo Supervielle decided to
further increase the payable price related to the acquisition of Grupo Supervielle’s Class B shares under the First Program to Ps.200.00
per Class B share. The First Program expired in March 2023 and it was not renewed. Under the First Program we acquired 11,093,572
Class B Shares and 591,384 ADSs, reaching an execution of 86.3% of the First Program and repurchasing 3.076% of the outstanding
capital stock. Our annual ordinary and extraordinary shareholders’ meeting held on April 19, 2024 resolved to delegate to our board of
directors the authority to sell or dispose in the future the treasury shares that the Group repurchased under the First Program in
compliance with applicable regulations.
On April 19, 2024, our Board of Directors approved the establishment of the following terms and conditions for the acquisition
of its own shares under a repurchase program of the Group’s shares pursuant to Article 64 of Law 26,831 and CNV regulations (the
“Second Program” and, together with the First Program, the “Programs”): (i) maximum amount of the investment: up to Ps.4 billion;
(ii) maximum number of shares to be acquired: up to 10% of the capital stock of Grupo Supervielle, as established by the applicable
Argentine laws and regulations; (iii) payable price: up to Ps.1,600 per Class B share and U.S.$8.00 per ADS on the New York Stock
Exchange, and (iv) term for the acquisition: 120 days as from the next day of the date of publication of the information in the Bolsa de
Buenos Aires Daily Bulletin, subject to any renewal or extension of the term, which will be informed to the public by the same means.
As of the date of this annual report, under the Second Program we acquired 550,000 Class B Shares.
As of the date of this annual report, we hold 14,600,492 Class B shares (including shares represented by ADSs) which
correspond to all the Class B Shares and ADSs acquired under the Programs. For more information, see “Item 16.E. Purchases of Equity
Securities by the Issuer and Affiliated Purchasers.”
As of December 31, 2023, the LCR Pro forma was 112.6% compared to 103.5% as of December 31, 2022.
157
Consolidated Cash Flows
The table below summarizes the information from our consolidated statements of cash flows for the three years ended
December 31, 2023, 2022 and 2021, which is also discussed in more detail below:
2023
Grupo Supervielle S.A.
As of December 31,
2022
(in thousands of Pesos)
2021
51,657,809
(15,671,914)
(10,532,748)
34,734,935
31,931,273
33,640,071
(11,164,078)
31,447,803
44,129,627
1,697,922
25,629,749
54,168,977
(8,541,784)
(5,800,908)
(6,019,802)
(1,157,697,255) (784,354,347) (627,418,680)
366,990,536
(53,923,603)
2,675,231
47,361,901
1,630,621
(10,395,360)
(1,541,901)
825,494,087
(138,081,046)
7,012,278
108,923,511
33,690
(5,502,611)
(16,857,100)
515,399,394
(56,821,678)
2,503,275
55,271,939
1,555,148
(10,127,903)
(1,531,618)
188,466,001
(2,874,712)
(688,501,884)
59,790,591
425,411
192,719,662
72,763,588
(27,824)
(55,242,994)
(1,205,330)
(1,999,421)
1,378,784,211
(726,857)
77,519
(1,541,063)
(355,621)
605,826,836
965,844,886
588,795,026 (361,184,054) (104,672,168)
(6,893,080)
—
(49,652,616)
(1,326,077)
—
(93,625,284)
6,746,784
—
48,110,871
17,098,039
78,686
14,042,239
160,678
(2,828,948)
(288,535)
(995,778,531) (577,355,825) (249,749,858)
(18,264)
—
(5,875,798)
67,909,146
(9,829,034)
—
—
(5,793,288)
(98,506,299)
(2,637,426)
—
940,332
(6,053,636)
15,216,610
(6,579,003)
Net (loss) /income for the year
Adjustments to obtain flows from operating activities:
Income tax
Depreciation and Impairment of Property, plant and equipment
Loan loss provisions
Other adjustments
Exchange rate difference on gold and foreign currency
Interest from loans and other financings
Interest from deposits and financing received
Net income from financial instruments at fair value through profit or loss
Fair value measurement of investment properties
Results from exposure to changes in the purchasing power of money
Interest on liabilities for financial leases
Allowances reversed
Fair value measurement of investment properties
(Increases) / decreases from operating assets:
Debt securities at fair value through profit or loss
Derivatives
Repo transactions
Loans and other financing
To the non-financial public sector
To the other financial entities
To the non-financial sector and foreign residents
Other debt securities
Financial assets in guarantee
Investments in equity instruments
Other assets
Increases / (decreases) from operating liabilities:
Deposits
Non-financial public sector
Financial sector
Private non-financial sector and foreign residents
Derivatives
Repo operations
Liabilities at fair value with changes in results
Other liabilities
Income Tax paid
158
2023
Grupo Supervielle S.A.
As of December 31,
2022
(in thousands of Pesos)
2021
157,949,953
5,163,982
51,465,192
(24,751,267)
1,199,025
—
(26,038,772)
38,113
—
(30,469,603)
(538,013)
—
4,662,862
(18,889,380)
2,475,354
(23,525,305)
2,529,757
(28,477,859)
(7,927,034)
(4,677,087)
(5,004,160)
(1,782,823)
(14,721,681)
(45,936,548)
(152,329,300) (543,661,474) (211,897,764)
(10,442,289)
(3,122,242)
—
—
(1,531,690)
(4,307,609)
—
—
(858,804)
NET CASH PROVIDED BY OPERATING ACTIVITIES (A)
CASH FLOWS FROM INVESTING ACTIVITIES
Net payments related to:
Purchase of PPE, intangible assets and other assets
Purchase of liabilities and equity instruments issued by other entities
Purchase of investments in subsidiaries
Collections:
Disposals related to PPE, intangible assets and other assets
NET CASH USED IN INVESTING ACTIVITIES (B)
CASH FLOW OF FINANCING ACTIVITIES
Payments:
Operating Leases
Unsubordinated negotiable obligations
Financing received from Argentine Financial Institutions
Subordinated negotiable obligations
Dividends
Acquisition of treasury shares
159
Collections:
Unsubordinated negotiable obligations
Financing received from Argentine Financial Institutions
NET CASH PROVIDED BY FINANCING ACTIVITIES (C)
EFFECTS OF EXCHANGE RATE CHANGES AND EXPOSURE TO
CHANGES IN THE PURCHASING POWER OF MONEY ON CASH AND
CASH EQUIVALENTS (D)
NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D+E)
RESULT FROM EXPOSURE TO CHANGES IN THE PURCHASING
POWER OF THE CURRENCY OF CASH AND EQUIVALENTS (E)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
2023
Grupo Supervielle S.A.
As of December 31,
2022
(in thousands of Pesos)
2021
34,552
137,801,435
—
522,953,299
13,661,245
196,241,415
(22,139,100)
(39,151,595)
(76,217,864)
216,959,159
9,707,018
83,308,526 (101,914,887)
67,022,844
(90,037,482)
(250,572,106)
169,408,365
252,716,891
(54,108,987) (103,829,795)
361,360,734
271,323,252
271,323,252
169,408,365
Management believes that cash flows from operations and available cash and cash equivalent balances will be sufficient to
fund our financial commitments and capital expenditures in 2024.
Cash Flows from Operating Activities
In 2023, operating activities provided Ps.157.9 billion of net cash, compared to Ps.5.2 billion of net cash provided in 2022. Net
decrease in Private non-financial sector and foreign residents deposits amounted to Ps.995.8 billion in 2023, compared to a net decrease
of Ps.577.4 billion in 2022. Net operating activities provided Ps.502.9 billion in 2023 from debt securities, derivatives and repo
transactions compared to Ps.252.9 billion used in 2022. Net operating activities provided Ps.1,379 billion from loans to the non-financial
sector and foreign residents in 2023, compared to Ps.960.7 billion in 2022.
Cash Flows from Investing Activities
In 2023, we used Ps.18.9 billion of net cash in our investing activities, compared to Ps.23.5 billion of net cash used in 2022.
In 2023, funds used mainly in intangible assets and others were Ps.24.8 billion compared to Ps.26.0 billion used in 2022.
Cash Flows from Financing Activities
In 2023, net cash used in financing activities was Ps.22.1 billion, compared to Ps.39.2 billion in 2022.
In 2023, net funds used to make payments of unsubordinated negotiable obligations was Ps.1.8 billion, compared to Ps.4.7
billion used in 2022. Net payments to Argentine financial institutions was Ps.14.5 billion in 2023, compared to Ps.20.7 billion net
payments in 2022. In 2023 and 2022, net cash used in dividends payments was Ps.0 million and Ps.1.5 billion, respectively.
160
Funding
Deposits
Our major source of funding is the Bank’s significant deposit base comprised of checking and savings accounts and time
deposits. The following table presents the composition of our consolidated deposits as of December 31, 2023 and 2022:
From the non-financial public sector
% of deposits
From the financial sector
% of deposits
From the non-financial private sector and foreign residents
Checking accounts
% of deposits
Savings accounts
% of deposits
Special checking accounts
% of deposits
Time deposits
% of deposits
Investment accounts
% of deposits
Others
% of deposits
Interest and differences in exchange rates payable
% of deposits
Total
As of December 31,
2023
2022
(in thousands of Pesos, except percentages)
86,705,591
100,747,830
6.5 %
5.1 %
476,539
315,861
0.0 %
0.0 %
138,589,508
157,491,710
8.9 %
9.2 %
241,809,018
287,593,196
15.6 %
16.9 %
731,973,085
556,908,441
47.3 %
32.7 %
177,192,264
469,431,207
11.4 %
27.5 %
122,036,731
100,826,533
7.9 %
5.9 %
15,838,471
19,700,970
1.0 %
1.2 %
20,264,610
26,036,074
1.3 %
1.5 %
1,548,928,056
1,705,009,583
Non- or low-cost demand total deposits (including private and public-sector deposits) accounted for 27.1% of the Company’s
total deposit base (16.3% of savings accounts and 10.8% of checking accounts) as of December 31, 2023, compared to 29.1% as of
December 31, 2022. The current inflationary environment is driving customers to increasingly invest their transactional funds in the
Company’s money market funds to protect the value of their income, which is reflected in the growing number of customers using the
“Inversion Rápida” feature which was launched in the Supervielle App in April 2023.
Financings
Banco Supervielle S.A.
Global Program for the Issuance of Medium-Term Notes for up to U.S.$2.3 billion
On September 22, 2016, the shareholders’ meeting resolved to approve the creation of a Global Program for the Issuance of
Negotiable Obligations for up to a maximum outstanding amount of U.S.$800,000,000. The Program was authorized by the CNV
through Resolution No. 18,376 dated November 24, 2016. On March 6, 2018, the shareholders’ meeting resolved to approve the
extension of the Program for up to a maximum outstanding amount of U.S.$2,300,000,000. The Program was authorized by the CNV
through Resolution No. 19,470 dated April 16, 2018.
As of December 31, 2023 and 2022, the amounts outstanding and the terms corresponding to outstanding unsubordinated
negotiable obligations were as follows (with figures expressed in thousands of Pesos):
Class
Banco Supervielle Class E
Total
Issue Date Maturity Date Annual Interest Rate
02/14/2023 Badlar + Spread 4.05 %
12/31/2023 12/31/2022
— 1,748,271
— 1,748,271
02/14/2018
161
In February 2023, the unsubordinated negotiable obligations which were outstanding as of December 31, 2022 were
canceled.
Program for the issuance of notes for up to nominal value Ps.750 million (increased to Ps.2 billion)
As of March 25, 2013, the Bank’s Extraordinary General shareholders’ meeting, approved the creation of a Global Program
for the issuance of Negotiable Obligations for up to a maximum outstanding amount of U.S.$750,000,000. On April 15, 2016, the
ordinary and extraordinary shareholders’ meeting approved to increase the maximum outstanding amount of the Program to
$2,000,000,000 or its equivalent in foreign currency, passed by Resolution N° 18,224 from the CNV on September 22, 2016.
As of December 31, 2023 and 2022, Grupo Supervielle had no outstanding issuances under this program.
162
Consolidated Capital
The table below shows information on our shareholders’ equity as of the dates indicated.
Grupo Supervielle S.A.
As of December 31,
2022
(in thousands of Pesos, except percentages)
2021
2023
Shareholders’ equity at the end of the period attributable to owners of the parent
company
Average shareholders’ equity(1)
Shareholders’ equity attributable to owner of the parent company as a
percentage of total assets
Average shareholders’ equity as a percentage of average total assets
Total liabilities as a multiple of total shareholders’ equity
Tangible shareholders’ equity(2) as a percentage of Total Tangible Assets
341,377,494
306,871,669
287,316,144
301,542,483
312,457,100
322,852,118
16.6 %
15.0 %
5.0
13.8 %
13.3 %
13.6 %
6.5
10.4 %
13.2 %
13.3 %
6.6
10.6 %
(1) Calculated on a daily basis.
(2) Tangible shareholders’ equity represents shareholders’ equity minus intangible assets.
The table below shows information on the Bank and IUDÚ’s consolidated computable regulatory capital, and minimum capital
requirements as of the dates indicated.
Grupo Supervielle S.A.
As of December 31, (1)
2022
(in thousands of Pesos, except percentages)
2023
2021
Total Capital
Tier 1 Capital
Paid in share capital common stock
Share premiums
Disclosed reserves and retained earnings
Non-controlling interests
IFRS Adjustments
Capital Adjustments
Expected Credit Losses
100% of results
50% of positive results
Sub-Total: Gross Tier I Capital
Tier 2 Capital
General provisions/general loan-loss reserves 50%
Non‑controlling interests
Sub-Total: Tier 2 Capital
Deduct:
All Intangibles
Pending items
Other deductions
Total Deductions
Total Capital
Credit Risk weighted assets(1)
Risk weighted assets(2)
Tier 1 Capital / Risk weighted assets
Regulatory Capital / Credit risk weighted assets
Regulatory Capital / Risk weighted assets
834,348
7,308,673
(48,461)
—
4,017,860
215,050,628
9,877,284
14,559,131
12,820,861
264,420,324
829,564
6,898,635
(5,814,988)
37,012
675,178
74,084,669
5,649,997
(4,740,190)
—
77,619,877
829,564
6,898,635
(311,314)
76,340
967,879
34,271,663
1,362,584
(267,662)
(809,041)
43,018,648
—
—
—
2,598,971
1,199
2,600,170
1,552,919
—
1,552,919
34,555,750
73,082
20,954,410
55,583,242
208,837,082
756,569,592
1,058,040,330
10,223,542
47,999
14,791,999
25,063,540
55,156,507
303,351,644
428,238,463
5,156,121
38,452
6,963,809
12,158,382
32,413,185
181,817,882
255,610,319
19.7 %
27.6 %
19.7 %
12.3 %
18.2 %
12.9 %
12.1 %
17.8 %
12.7 %
163
(1) Nominal value without inflation adjustment.
(2) Risk weighted assets is calculated by multiplying the operational risk and market risk by 12.5 and adding the credit risk weighted
assets.
Capital Expenditures
In the course of our business, our capital expenditures are mainly related to infrastructure and organizational and IT system
development. In general terms, our capital expenditures are not significant when compared to our total assets. We expect that capital
expenditures in 2024 will be related to infrastructure, IT systems development and properties. We anticipate to fund such capital
expenditures with cash flow from operating activities.
Item 5.C Research and Development, patents and licenses, etc.
Other than our technology program, we do not have any significant policies or projects relating to research and development,
and we own no patents or licenses.
Item 5.D
Trend Information
We believe that the macroeconomic environment and the following material trends related to Argentina, the Argentine financial
system and our business have affected and will continue to affect our business, results of operations and financial condition. Our
continued success and ability to increase our value to our shareholders will depend upon, among other factors, economic growth in
Argentina and the corresponding growth of the market for long-term private sector lending and access to financial products and services
by a larger segment of the population.
This analysis should be read in conjunction with the discussion in “Item 3.D. Risk Factors” and taking into consideration that
the Argentine economy has been historically volatile, which has negatively affected the volume and growth of several sectors, including
the financial system.
Material Trends Related to Argentina
According to the latest IMF estimates, the world economy is expected to grow 3.1% in 2024. Inflation is decreasing at a faster
pace than expected in most countries. This led the IMF to increase its growth projections for the world economy for 2024. However,
geopolitical conflicts might lead to an increase in commodity prices, to supply chain issues and to the discontinuation of the current
disinflation trends, which could result in the tightening of monetary policies. In addition, the Israel-Hamas conflict could escalate at
regional level and give rise to military tensions between China and Taiwan.
With respect to Argentina, according to economic consulting firms which participated in the the Central Bank’s “Relevamiento
de Expectativas de Mercado” report, as of March 2024, a 3.5% decrease is expected in the country’s economy, with more stability
during the rest of the year. In addition, the inflation rate is expected to increase 189% in 2024 and in some months of 2024 the inflation
rate could be above that level.
According to IMF estimates, the economies of the main trading partners of Argentina are expected to grow. However, high
interest rates, the slowdown in international trade and the drop in commodity prices could have a negative impact on the Argentine
economy in 2024.
The Argentine economy is expected to undergo a challenging year due to the new measures that are expected to be implemented
by the new administration. With the aim to accumulate reserves and eliminate the financial deficit, the first measures of the new
administration intended to put back in track the relative economy prices, correct the exchange rate and subsidies to public utilities rates,
and increase tax income. The Ministry of Economy expects good results following the increase in revenues and the reduction of
expenses.
164
We cannot predict whether future global and Argentine economic performance will differ materially from the IMF, the Central Bank,
the INDEC and the REM forecasts, due to the uncertainties of the global and Argentine economic environments, including high inflation,
low levels of reserves and the concentration of maturities of short-term public debt denominated in Pesos.
Material Trends Related to the Argentine Financial System
The Argentine market is one of the least penetrated financial systems in Latin America, with a fragmented and competitive
landscape. The industry in which we operate has been affected by the economic conditions in Argentina over the last several years. In
2023, Argentina’s GDP decreased by 1.6% impacted by the drought with the agricultural exports decreasing 20.6%. In 2022,
Argentina’s GDP increased by 5.0% mainly due to the recovery of the Argentine economy from the negative impact that the COVID-
19 pandemic had on the Argentine economy. Inflation in Argentina increased to 94.8% in 2022 and 211.4% in 2023. During 2022 and
2023, Argentina continued to face considerable macroeconomic and regulatory challenges such as minimum rates for time deposits,
caps on interest rates on certain loans, mandatory loans, limits on LELIQ holdings, and foreign exchange market restrictions. As a result,
as of December 31, 2023, the financial system in Argentina had low credit demand with loans to GDP and deposits to GDP at historical
low rates of 6.7% and 18.3%, respectively. In December 2023, President Milei took office and the new administration remains committed
to achieving fiscal surplus and introducing significant structural reforms that we expect to result in a macroeconomic and financial
stabilization beyond 2024. See “Item 3.D. Risk Factors—Risks Relating to Argentina—Our business is largely dependent upon
macroeconomic, political, regulatory and social conditions in Argentina.”
During 2023, total deposits from the private sector financial system increased by 171.4% in nominal terms, reflecting high
liquidity levels reaching a penetration of deposits to GDP of 18.3%, but as a result of the low credit demand, banks have been investing
the increasing excess liquidity in securities issued by the Central Bank and government securities.
Notwithstanding the challenging macroeconomic environment, the Argentine financial system is solid, with healthy asset
quality levels at a 3.5% NPL while NPL of the private banking remained at the lowest level of 1.5%, and with high levels of liquidity
and solvency.
Nevertheless, since 2020, a relevant portion of assets and liabilities of the banking industry became subject to increased
regulation both in volumes and interest rates, thus impacting the financial margin of the banks.
As a result of the measures implemented by the new administration, Argentina’s macroeconomic situation is expected to
stabilize and that monthly inflation will decrease during 2024 with respect to 2023 after the sharp increase in the beginning of 2024. As
a result of this, together with the current high level of liquidity, the financial system will lead to greater demand for loans, contributing
to sustain economic recovery and increase the levels of credit penetration to GDP, which is currently below the levels which were
reached during the 1999-2002 economic recession in Argentina.
In March 2024, the new administration lifted the regulation which imposed minimum interest rates on time deposits and
established new credit lines for SMEs with interest rates to be freely agreed upon by the contracting parties. We expect the new
administration to continue to lift certain rules that had an impact on financial intermediation in previous years.
Material Trends Related to Our Business
As part of our transformation process, we strengthened our digital product culture and evolved our client-centric and product-
focused operational model which enabled us to address our customers’ needs more efficiently. We continue to enhance our service
model, improving digital, virtual, and automatic channels and transforming our branch network to offer higher-value transactions to our
customers. This has led to improvements in our NPS and made our Virtual Hub a highly efficient transactional channel. As part of our
tranformation process, we consolidated 28 branches during 2023, resulting in 137 branches as of December 31, 2023 compared to 183
branches as of December 2020 when we started with this transformation process. Moreover we reduced our staff by 4% and increased
the number of customers per branch by 17%. This performance, together with our higher revenues in 2023, contributed to reach an
efficiency ratio of 55% in 2023 compared to 89% in 2022.
With respect to our retail business, we continued to improve our competitive NPS while driving sustained digital adoption,
higher customer engagement, and cross-selling. The share of retail digital customers over total customers increased by 10% compared
to 2022, reaching 62%. 64% of personal loans originated digitally, compared to 34% in 2022, while digital sales of insurance products
offered through digital and non-digital channels reached 26%. In relation to the adoption of our digital wallet, between January 2023
and December 2023, the number of wires increased from 3 million to 7 million, QR code payments increased from 25,000 to 250,000,
165
and bill payments increased by 84%. In addition, in 2023, retail customer using our money market funds through the app increased 9
times compared to 2022.
With respect to our corporate segment, in 2023 we continued to execute our strategic priorities, we attracted new customers,
captured higher share of wallet of our corporate customers and improved NPS in all segments. This allowed us to increase our share of
corporate customers to 5.45% compared to 5.35% in 2022. In 2023, we offered digital working capital financing products and, as a
result, digital transactions by SMEs accounting for 93% of factoring, 72% of commercial unsecured loans, and 52% of overdrafts. This
allowed us to continue to increase our market share in foreign trade transactions and sight deposit balances.
Our online brokerage platform, IOL, became the leading online retail broker in Argentina and delivering significant fee growth
underscoring our ability to attract and retain customers. In 2023, monthly active users increased five times to 271,000, new accounts
increased three times and assets under management increased seven times compared 2022.
While the new elected president Javier Milei remains committed to achieving a fiscal balance and moving Argentina into an
open market economy with a sustainable economic model, the new government faces several near-term challenges, including obtaining
support to advance the structural reforms and deregulation agenda and maintaining social support in a recessionary backdrop with high
inflation. We are well-positioned to meet these challenges with our capital protection measures against inflation and a loan book with
exposure to highly attractive export-oriented sectors, including oil and gas, mining, and agrobusiness. We have established a solid and
agile foundation, and we are confident in our ability to drive robust expansion once the Argentine economy stabilizes and resumes
growth. See “Item 3.D. Risk Factors—Risks Relating to Argentina—Our business is largely dependent upon macroeconomic, political,
regulatory and social conditions in Argentina.”
In 2024, we expect to continue to balance risk and profitability by managing credit cycles and excess liquidity through asset
and liability management. We may face pressure from high level of inflation and negative interest rates in real terms. In terms of
expenses, we expect to continue to exercise strict control on recurring costs and to increase expeses in line with inflation as certain costs
that adjust with lagging inflation would be offset by efficiencies from reduction of personnel and branch optimization. In 2024, we
expect to focus on profitability and on gaining market share.
In terms of our asset quality, we expect our NPL ratio to remain at low levels, but above the historical low levels reported in
December 2023. Cost of risk is expected to remain at the same or higher levels of 2023 and Peso loan book is expected to grow slightly
above inflation, with credit demand recovering gradually in the second half of 2024 as inflation decreases and regulations impacting
financial system performance are lifted. We also expect capital and liquidity to remain at adequate levels underscoring long-term
sustainability.
We expect to continue to execute our transformation strategy with the goal of driving sustainable growth as demand resumes
while enhancing our current competitiveness, remaining flexible under this challenging scenario.
Item 5.E
Critical Accounting Estimates
The preparation of our consolidated financial statements in accordance with IFRS requires the use of certain critical accounting
estimates. It also requires senior management to make judgements in applying the accounting standards to define the our accounting
policies.
We identified the following areas which involve a higher degree of judgement or complexity, or areas where assumptions and
estimates are material for our consolidated financial statements which are essential to understand the underlying accounting/financial
reporting risks:
Fair value of financial instruments which do not have an active market
The fair value of financial instruments not listed in active markets is determined using valuation techniques. Such techniques
are validated and reviewed periodically by qualified personnel independent from the area which developed them. All models are assessed
and adjusted before being put into use in order to ensure that results reflect current information and comparable market prices. As long
as possible, models rely on observable inputs only; which include significant assumptions related to implicit rates in the last available
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tender for similar securities and spot rate curves, require the use of estimates. Changes in the assumptions of these factors may affect
the reported fair value of financial instruments.
Allowances for loan losses
The Group recognizes the allowance for loan losses under the expected credit loss method included in IFRS 9. The most
significant judgements of the model relate to defining what is considered to be a significant increase in credit risk and in making
assumptions and estimates to incorporate relevant information about past events, current conditions and forecasts of economic
conditions. The impact of the forecasts of economic conditions are determined based on the weighted average of three internally
developed macroeconomic scenarios that take into consideration Grupo Supervielle’s economic outlook as derived through forecast
macroeconomic variables, which include inflation rate, monthly economic activity estimator, exchange rate, monetary policy rate,
private sector real loans and private sector real wage. A high degree of uncertainty is involved in making estimations using assumptions
that are highly subjective.
Note 1.11 to our consolidated financial statements provides more detail of how the expected credit loss allowance is
calculated.
Impairment of Non-Financial Assets
Intangible assets with definite useful life and property, plant and equipment are amortized or depreciated on a straight-line basis
during their estimated useful life. Grupo Supervielle monitors the conditions associated with these assets to determine whether the events
and circumstances require a review of the remaining amortization or depreciation term and whether there are impairment indicators.
Grupo Supervielle has applied judgment in identifying indicators of impairment of property, plant and equipment and
intangible assets that are amortized. Grupo Supervielle has requested valuations by external independent valuers for its land and
buildings category as of December 31, 2023, recording and impairment on some of them (see Note 12.1 to our consolidated financial
statements). For the rest of the categories of property, plant and equipment as well as for intangibles other than goodwill, no indicators
have been identified and no impairment has been recognised for any of the periods presented in the consolidated financial statements.
During the year, the Group has recorded an impairment on the goodwill of Micro Lending as explained in Note 14.1 to our consolidated
financial statements.
Income tax and deferred tax
A significant judgment is required to determine liabilities and assets from current and deferred taxes. Current tax is measured
at the amount expected to be paid to the taxation authority using the tax rates that have been enacted or substantially enacted by the end
of the reporting period. The deferred tax is measured over temporary differences between tax basis of assets and liabilities and book
values at the tax rates that are expected to be applied when the asset is realized or the liability is settled.
Assets from deferred tax are recognized upon the possibility of relying on future taxable earnings against which temporary
differences can be used, based on senior management’s assumptions regarding amounts and opportunities of future taxable earnings.
Later, it is necessary to determine whether assets from deferred tax are likely to be used and set off future taxable earnings. Real results
may differ from estimates, based on factors such as changes in tax legislation or the result of the final review of affidavits issued by tax
authorities and tax courts.
Likely future tax earnings and the number of tax benefits are based on a medium term business plan prepared by management.
Such plan is based on reasonable expectations.
Item 6. Directors, Senior Management and Employees
Board of Directors
According to our bylaws, our Board of Directors may be composed of a minimum of three and a maximum of nine directors,
and shareholders may also appoint an equal or lesser number of alternate directors. As of the date of this annual report, our Board of
Directors is composed of seven directors and two alternate directors. There are no alternate directors.
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Directors and their alternates, if any, are appointed for a maximum term of two years by our shareholders during the annual
ordinary shareholders’ meeting. Directors may be reelected. Alternate directors replace directors in the order in which they were elected.
Directors are elected annually in staggered elections. Despite their two-year appointment, pursuant to section 257 of the Argentine
General Corporations Law, directors will maintain their positions until new directors are appointed at the following annual ordinary
shareholders’ meeting.
The latest election relating to our Board of Directors took place at the ordinary and extraordinary shareholders’ meeting held
on April 19, 2024, in accordance with Section 9 of our bylaws.
During the first meeting after directors have been appointed, they must appoint a chairman and vice-chairman of the board, or,
if considered appropriate, a first vice-chairman and a second vice-chairman. The vice-chairman or, if applicable, the first vice-chairman,
would automatically replace the chairman in the event that the chairman is absent, resigns, dies or faces any other impediment to serve
as chairman, and the second vice-chairman, if applicable, would replace the first vice-chairman. In the absence of any of these directors,
our Board of Directors may appoint who will serve as chairman or chairmen. The chairman of the board may cast two votes in the case
of a tie.
Our Board of Directors functions and acts upon the majority vote of its members present at its meetings either physically or via
any form of audio and visual simultaneous communication.
The following table sets forth the composition of our Board of Directors since April 19, 2024:
Name
Julio Patricio Supervielle Chairman of the Board
Emérico Alejandro
Stengel
Title
First Vice-Chairman of
the Board
Second Vice-Chairman
and Corporate Secretary
Director
Director
Atilio Dell’Oro Maini
Eduardo Pablo Braun
José María Orlando
Laurence Nicole Mengin
de Loyer
Hugo Enrique Santiago
Basso
Matias Jules Bernard
Supervielle
Jacques Patrick
Supervielle
Director
Director
Date of first
appointment to
the Board(1)
June 9, 2008
Date of expiration of
current term(2)
December 31, 2024
Date of Birth
December 13, 1956
July 13, 2010
December 31, 2025
December 17, 1962
September 28, 2011
April 26, 2019
August 12, 2020
December 31, 2024
December 31, 2024
December 31, 2025
February 13, 1956
June 25, 1963
September 25, 1964
April 28, 2020
December 31, 2025
May 5, 1968
Alternate Director
April 19, 2024
April 26, 2019
December 31, 2024
December 31, 2025
December 3, 1979
September 30, 1996
Alternate Director
April 19, 2024
December 31, 2025
November 20, 1987
(1) With the exception of Julio Patricio Supervielle and Laurence Nicole Mengin de Loyer, the respective date of appointment to the
Board of each director is also the date on which each director first joined Grupo Supervielle. Julio Patricio Supervielle has held
positions in our board since March 21, 2000, however he has continuously served in our board since 2008. Laurence Nicole Mengin
de Loyer first joined the Board on March 23, 2010, where she served as director until April 26, 2019.
(2) Notwithstanding the expiration date stated above, pursuant to section 257 of the Argentine General Corporations Law, the directors
maintain their positions until the following annual ordinary shareholders’ meeting where directors are appointed.
There are no family relationships between the abovementioned current members of our Board of Directors, except for Julio
Patricio Supervielle and Hugo Enrique Santiago Basso (uncle and nephew, respectively) and for Julio Patricio Supervielle and Matias
Jules Bernard Supervielle and Jacques Patrick Supervielle (father and sons respectively).
The following are academic and professional backgrounds of the members of the board.
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Julio Patricio Supervielle is Chairman of the Board of Grupo Supervielle and CEO of Grupo Supervielle. He also serves as
Chairman of Banco Supervielle S.A., Sofital, Portal Integral de Inversiones S.A.U., Invertironline.S.AU., Espacio Cordial de Servicios,
Bolsillo Digital and Supervielle Agente de Negociación, IOL Holding and IOL Agente de Valores S.A., subsidiaries of Grupo
Supervielle. With over 36 years of financial industry experience, he joined the family business Exprinter-Banex in 1986 where he held
various positions in Banco Banex S.A., including General Manager, Director and Chairman of the Board. He has been leading Grupo
Supervielle since early 2000. During this time, Grupo Supervielle achieved significant growth in terms of net worth, assets and deposits,
successfully completed some of its most significant acquisitions and launched its initial public offering (2016) on the New York Stock
Exchange and the Buenos Aires Stock Exchange. Mr. Supervielle has a degree in Business Administration from Universidad Católica
Argentina, holds a master’s degree from The Wharton School of the University of Pennsylvania and attended the Global CEO Program
organized by Wharton, IESE and CEIBS. As Chairman and CEO, Mr. Supervielle brings to the Board his expertise and proven leadership
in the financial industry as well as valuable insight into our strategy formulation, culture crafting, risk management and compensation,
providing an essential link between management and the Board. He also provides the Board with important perspectives on innovation,
management development and industry challenges and opportunities.
E. Alejandro Stengel is the CEO of Banco Supervielle S.A., First Vice-Chairman of Grupo Supervielle and serves on the
boards of Supervielle Seguros, Supervielle Agente de Negociación, Bolsillo Digital, Invertironline S.A.U. and IOL Holding, subsidiaries
of Grupo Supervielle. On April 11, 2024, we announced that Mr. Stengel will step down from his role of CEO of Banco Supervielle
S.A. by the end of 2024. See “—Banco Supervielle S.A.’s Senior Management—Succession of the CEO of Banco Supervielle S.A.”
Prior to his current position Mr. Stengel was Banco Supervielle S.A.’s COO, with operational responsibilities for Personal & Business
Banking, Corporate Banking, Operations, IT and Planning. He focused on streamlining the organizational structure, launching the
Bank’s Customer Centric strategy and implementing the Agile and Digital Transformation Program. As board member of Grupo
Supervielle he had a central role in the formation and development of Supervielle Seguros (Insurance) and Espacio Cordial (Non-
Financial Services). Before joining Grupo Supervielle, Mr. Stengel was the CEO of Los Grobo Agropecuaria, a leading Mercosur
agribusiness company that won the National Quality Award under his tenure. As a Partner of Booz Allen Hamilton, a global management
consulting firm, he worked with multinational and large corporations in Latin America, the United States and Europe on Strategy,
Governance, Organization and Operations. He led strategic integration and operations enhancement projects in Financial Services.
Mr. Stengel began his career in Corporate Banking at Citibank and Banco Santander. He earned an Industrial Engineering degree from
the Universidad de Buenos Aires and holds an MBA from The Wharton School of the University of Pennsylvania. Mr. Stengel brings
to our Board of Directors strong senior management experience and expertise in Strategy and Organizational Transformation, developed
in regional and International business settings. His participation in Boards and successful capital raising efforts including an initial
public offering add Corporate Governance and Investor Relations to his contributions.
Atilio Dell´Oro Maini serves as Second Vice-Chairman of Grupo Supervielle, First Vice Chairman of Banco Supervielle S.A.,
Chairman of Micro Lending, Vice Chairman of Supervielle Seguros, Vice Chairman of Supervielle Productores Asesores de
Seguros,Vice Chairman of Sofital, Vice Chairman of Espacio Cordial de Servicios, Vice Chairman of Portal Integral de Inversiones
S.A.U., Vice Chairman of Invertironline S.A.U., Vice Chairman of Bolsillo Digital, Vice Chairman of Supervielle Agente de
Negociación and Director of IOL Holding, subsidiaries of Grupo Supervielle. In 2003, he joined the law firm Cabanellas-Etchebarne-
Kelly as a Senior Partner of the Banking and Capital Markets divisions. In 1997, he worked at the London-based global law firm
Linklaters & Paines. He worked in New York City as a Foreign Associate at the law firm White & Case in 1987 and Simpson Thatcher &
Bartlett from 1988-1989. Previously, he joined the law firm Cárdenas, Cassagne & Asociados and was made Partner in 1990. He has
extensive experience advising banks and other financial entities, corporations and governments with respect to all types of international
and domestic banking and financial transactions. Atilio is a lawyer, with degrees in Political Science and Agricultural Production. He
also completed the Program of Instruction for Lawyers at Harvard Law School. He is a Professor at the Master’s in Business Law
program at Universidad de San Andrés, as well as a member of the Bar Association of the city of Buenos Aires. Mr. Dell’Oro Maini
brings to the Board more than 31 years of experience in the legal and financial sectors with extensive expertise in mergers and
acquisitions, international capital market transactions and strategic financial issues. Mr. Dell’Oro Maini offers the company valuable
perspective and guidance in corporate governance, regulatory framework and Board effectiveness. He also has significant knowledge
and direct involvement in issues related to CSR/ESG initiatives.
Eduardo Pablo Braun is an industrial engineer from the University of Buenos Aires, where he won the “Bunge & Born”
scholarship for his academic excellence. He holds an MBA with emphasis in Finance and Marketing from The Wharton School of the
University of Pennsylvania, 1990. He is an international speaker on leadership, culture and innovation, a business consultant and author
of “People First Leadership,” edited in English, Spanish and Chinese. He has taught in programs at UC Berkeley, as a special guest at
prestigious institutions such as IMD, Babson College, Yale School of Management and he has lectured in various academic and business
forums in Singapore, Dubai, Germany and the United States, among other countries. He was a professor at UCA (Universidad Católica
Argentina) and Universidad de San Andrés. Between January 2016 and December 2019 he served as Director of Aeropuertos Argentina
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2000 appointed by the Argentine Government. He was Director of HSM Group between 1999 and 2011, as Head of Global Programs
and Speaker Relations. He is a member of the Board of Directors of the multinational Cuvelier Los Andes Vineyards. In 2018 he was
responsible for creating and leading the Advisory Board for the design of the Innovation Park of the City of Buenos Aires. Previously
he was a founding partner of MIG, a management consulting firm, specializing in strategy and business development. His experience as
a management consultant began with Booz Allen & Hamilton in their Paris office in 1990, where he worked on various projects for
Europe, Brazil and Argentina, combining his experience as a consultant with executive positions. He participates or has participated in
several NGOs including the Clinton Global Initiative of which he was a member for 5 years and EMA (Esclerosis Múltiple Argentina).
He is a member of the Board of ICANA (Instituto Cultural Argentino Norteamericano) and President of the G25 Foundation. Currently,
he serves as an Independent Director of Grupo Supervielle S.A. Mr. Braun provides to our Board of Directors his expertise in corporate
governance, strategy and organizational culture, including his international business experience of working experience based in Europe
and as Director of an international company in the knowledge economy. As author and international speaker Mr. Braun has helped
companies understand and tackle their cultural challenges. Mr. Braun also has experience serving as an outside Director of a subsidiary
of a public company.
José María Orlando studied Business Administration at Universidad Católica Argentina. He worked as an officer of Bank
Boston between 1986 and 1996, holding different positions in Buenos Aires, London and Boston in the areas of Finance, Treasury and
Investment Banking. From 1996 to 1998, he served as CFO and Head of Global Markets for Deutsche Bank, DMG in Argentina. In
2000 he became CFO and CIO of Zurich Argentina. In 2005 he became Corporate Development Director and in 2007 he became CEO
and Chairman of Zurich Argentina. In 2010, he was appointed as Latin America CEO of Zurich Global Life. During that term, he also
served as Board Member of Zurich-Santander Insurance Americas in several countries. Since 2015, he has been the owner of Deal
Financial Services, a consultancy firm rendering advisory services in brokerage, asset management, capital markets and mutual funds
to individuals, corporations and institutional investors. He also serves as Vice Chairman of the Board of CIPPEC (Center for Research
on Public Policies for Equity and Growth) and is a Director of Clodinet S.A. (Pilara). He is a member of the Board of Colegio Madre
Teresa and is Co-Founder and First President of Voces y Ecos, an NGO focused on Media. In the past he was also a Member of the
Administration Council and Treasurer of Universidad Católica Argentina; Director of Escuelas de Liderazgo Universitario; Member of
the Executive Investment Committee of Máxima AFJP; Member of the Financial Matters Committee of the Argentine Banking
Association; Member of the Board of Mercado Abierto Electrónico S.A. and Member of the Administration Council of Club Newman.
He has participated as a speaker at numerous international conferences and seminars in the United States, Europe, Latin America and
Asia. Since August 2020 he is an Independent Director of Grupo Supervielle S.A. Mr. Orlando brings extensive local and international
strategic and financial experience in commercial and investment banking, treasury, general and life insurance, asset management &
brokerage through acting during more than 30 years in several international organizations as CFO, CEO, Director and shareholder. He
brings also background in organizational leadership and culture.
Laurence Nicole Mengin de Loyer graduated from McGill University in Canada with an undergraduate degree in Business
Administration and a master’s degree in Business Administration. She started her career in New York City at the Mergers and
Acquisitions Division for Banque Nationale de Paris. Afterwards, in Paris, she joined the Apparel Division of Sara Lee Corporation,
where she held a number of financial positions in different business units including Financial Analyst, Financial Controller, Chief
Financial Officer and European Controller. When Sara Lee Corporation sold its European Apparel Division in 2006, she served as Group
Controller of the newly created stand-alone business with responsibilities in the reorganization, financial control, definition and
implementation of exit strategies for the private equity fund. In 2009, as a result of her move to Argentina, she joined Banco Supervielle
S.A. as Deputy Manager of the Administration Department until her nomination to the Board of Grupo Supervielle in March 2010. She
served as independent Director of Grupo Supervielle S.A. between 2016 and 2019. In April 2020, she was appointed Independent
Director of Grupo Supervielle. In April 2021, she was appointed Director of Grupo Supervielle. To date, she serves as independent
Director of Biosidus (a biotech company),Peugeot Citröen Insurance Company and Vitalis Pharmaceuticals Holding (Spain). Ms. Loyer
brings to our Board of Directors extensive international business experience in a variety of industries. In addition, she brings expertise
in financial control, market discipline and audit, including experience gained as Chief Financial Officer in a public company. She also
brings expertise in global corporate governance and strategy. Ms. Loyer also has experience serving as outside Director on other Boards.
Hugo Enrique Santiago Basso is an Industrial Engineer graduated from Instituto Tecnológico de Buenos Aires (ITBA) and
holds an MBA from The Wharton School of Business, University of Pennsylvania. He began his career at Banco Banex in 2004, where
he successfully managed the merger project with Société Générale Argentina. In 2007 he led the startup of the ‘Cordial Negocios’ unit,
with a focus on microfinancing. Then, he continued his career in the consultancy area working for Mars & Co., with responsibilities in
competitive strategy for CPG multinationals. For the last nine years, he has been residing in California, United States of America, having
developed a successful career in the financial area for the wine industry in high-end brands. After working for Treasury Wine Estates
and E&J Gallo, he joined Jackson Family Wines, currently overseeing thier Costing and Inventory for a portfolio of twenty luxury
wineries. He is Director of Grupo Supervielle S.A., and Espacio Cordial.
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Matías Jules Bernard Supervielle studied Mechanical Engineering at Princeton University. From 2019 to 2020 he served as
Associate Consultant at Bain & Co. From 2020 to 2022 he was Regional Strategy Manager of Kavak Startup dedicated to the purchase,
sale and reconditioning of pre-owned cars. Since 2022 he has been CEO & CO-Founder of Volanti, a management and sales company
for cars repair shop and is currently Director of Invertironline S.A.U.
Jacques Patrick Supervielle holds a degree in Business Administration from the Argentine Catholic University. He has
experience in the financial area and is a Qualified Investment Advisor before the CNV at InvertirOnline S.A.U. He worked in project
management, development of financial product applications and application of agile methodologies for IUDU. He participated in the
development of smart contracts in Blockchain. He is Director at Supervielle Asset Management S.A. and President of the Association
of Argentine Banks (ADEBA Joven).
Duties and Liabilities of Directors
Directors have the obligation to perform their duties with the loyalty and the diligence of a prudent business person. Under
Section 274 of the Argentine General Corporations Law, directors are jointly and severally liable to the company, the shareholders and
third parties for the improper performance of their duties, for breaching any law or the bylaws or regulations, if any, and for any damage
to these parties caused by fraud, abuse of authority or gross negligence. The following are considered integral to a director’s duty of
loyalty: (i) the prohibition on using corporate assets and confidential information for private purposes; (ii) the prohibition on taking
advantage, or allowing another to take advantage, by action or omission, of the business opportunities of the company; (iii) the obligation
to exercise board powers only for the purposes for which the law, the corporation’s bylaws or the shareholders’ or the Board of Directors’
resolutions were intended; and (iv) the obligation to take strict care so that acts of the board do not go, directly or indirectly, against the
company’s interests. A director must inform the Board of Directors and the Supervisory Committee of any conflicting interest he or she
may have in a proposed transaction and must abstain from voting thereon.
In general, a director will not be held liable for a decision of the Board of Directors, even if that director participated in the
decision or had knowledge of the decision, if (i) there is written evidence of the director’s opposition to the decision and (ii) the director
notifies the Supervisory Committee of that opposition. However, both conditions must be satisfied before the liability of the director is
claimed before the Board of Directors, the Supervisory Committee or the shareholders or relevant authority or the commercial courts.
Section 271 of the Argentine General Corporations Law allows directors to enter into agreements with the company that relate
to such director’s activity and under arms’ length conditions. Agreements that do not satisfy any of the foregoing conditions must have
prior approval of the Board of Directors (or the Supervisory Committee in the absence of board quorum) and must be notified to the
shareholders at a shareholders’ meeting. If the shareholders reject the agreement, the directors or the members of the Supervisory
Committee, as the case may be, shall be jointly and severally liable for any damages to the company that may result from such agreement.
Agreements that do not satisfy the conditions described above and are rejected by the shareholders are null and void, without prejudice
to the liability of the directors or members of the Supervisory Committee for any damages to the company.
The acts or agreements that a company enters into with a related party involving a relevant amount shall fulfill the requirements
set forth in Section 72 and 73 of the Argentine Capital Markets Law. Under Section 72, the directors and syndics (as well as their
ascendants, descendants, spouses, brothers or sisters and the companies in which any of such persons may have a direct or indirect
ownership interest) are deemed to be a related party. A relevant amount is considered to be an amount which exceeds 1% of the net
worth of the company as per the latest balance sheet. The Board of Directors or any of its members shall require from the audit committee
a report stating if the terms of the transaction may be reasonably considered adequate in relation to normal market conditions. The
company may resolve regarding the compliance of above-mentioned requirements with prior report of two independent evaluating firms
on that matter. The Board of Directors shall make available to the shareholders the report of the audit committee or of the independent
evaluating firms, as the case may be, at the main office on the business day after the board’s resolution was adopted and shall
communicate such fact to the shareholders of the company in the respective market bulletin. The vote of each director shall be stated in
the minutes of the Board of Directors approving the transaction. The transaction shall be submitted to the approval of the shareholders
of the company when the audit committee or both evaluating firms have not considered the terms of the transaction to be reasonably
adequate in relation to normal market conditions. In the case where a shareholder demands compensation for damages caused by a
breach of Section 73, the burden of proof shall be placed on the defendant to prove that the act or agreement was in accordance to the
market conditions or that the transaction did not cause any damage to the company. The transfer of the burden of proof shall not be
applicable when the transaction has been approved by the Board of Directors with the favorable opinion of the audit committee or the
two evaluating firms or if the transaction has been approved by the ordinary shareholders’ meeting without the decisive vote of the
shareholder in respect of which the condition of a related party is met or has an interest in the act or contract at issue.
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Causes of action may be initiated against directors if so decided at a meeting of the shareholders. If a cause of action has not
been initiated within three months of a shareholders’ resolution approving its initiation, any shareholder may start the action on behalf
and on the company’s account. A cause of action against the directors may be also initiated by shareholders who object to the approval
of the performance of such directors if such shareholders represent, individually or in the aggregate, at least 5% of the company’s capital
stock.
Except in the event of a mandatory liquidation or bankruptcy, shareholder approval of a director’s performance, or express
waiver or settlement approved by the shareholders’ meeting, terminates any liability of a director vis-à-vis the company, provided that
shareholders representing at least 5% of the company’s capital stock do not object and provided further that such liability does not result
from a breach of law or the company’s bylaws.
Under Argentine law, the Board of Directors is in charge of the company’s management and administration and, therefore,
makes any and all decisions in connection therewith, as well as those decisions expressly provided for in the Argentine General
Corporations Law, the company’s bylaws and other applicable regulations. Furthermore, the board is generally responsible for the
execution of the resolutions passed in shareholders’ meetings and for the performance of any particular task expressly delegated by the
shareholders.
Meetings, Quorum, Majorities
Our Board of Directors must hold a minimum of one regularly scheduled meeting every three months. Meetings must also be
convened when called by any member of our Board of Directors. The quorum for a Board of Directors’ meeting is the majority of its
members. Our Board of Directors will pass resolutions by the affirmative vote of the majority of members present. Pursuant to our
bylaws our directors may participate in a meeting of our Board of Directors by means of a communication system that provides for a
simultaneous transmission of sound, images and words. Directors participating by such means count for quorum purposes for all
meetings and all matters of agenda, therefore the board will pass resolutions by the affirmative vote of the majority of members present
either physically or by means of such communication system.
Incentive-based Plan for Senior Management and Directors
In 2022, we established a long-term plan for certain senior executives of our Banking business unit in order to achieve the
objectives established in the framework of our strategic pillars which relate to efficiency, digital adoption, customer experience, funding,
customer acquisition, and asset quality. This incentive plan consists of a retirement insurance policy and sets forth certain objectives to
be achieved during 2022, 2023 and 2024.
In March 2022, IOL Holding, IOL Agente de Valores S.A.U. and Invertironline S.A.U. approved a long-term incentive program
for their senior management and employees who are responsible for the success in the management and operation of their respective
businesses. This program offers incentives based on the increase in the companies’ equity value.
Independence Criteria of Directors
In accordance with the provisions of Section 4, Chapter I, Title XII “Transparencia en el Ámbito de la Oferta Pública” and
Section 11, Chapter III, Title II “Órganos de Administración y Fiscalización, Auditoría Externa” of the CNV Rules, we are required to
report to the shareholders’ meeting, prior to vote the appointment of any director, the status of such director as either “independent” or
“non-independent.”
The members of the Board of Directors and the Supervisory Committee of companies admitted to the public offering regime
in Argentina must inform the CNV within ten (10) business days from the date of their appointment whether such members of the Board
of Directors or the Supervisory Committee are “independent” pursuant to CNV standards.
Pursuant to the CNV Rules, a director is not considered independent in certain situations, including where a director:
(1) is also a member of the board of the parent company or another company belonging to the same economic group of the
issuer through a preexisting relationship at the time of his or her election, or if said relationship had ceased to exist during
the previous three years;
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(2) is or has been associated with the company or any of its shareholders having a direct or indirect “significant participation”
on the same, or with corporations with which also the shareholders also have a direct or indirect “signification
participation”; or if he or she was associated with them through an employment relationship during the last three years;
(3) has any professional relationship or is a member of a corporation that maintains frequent professional relationships of
significant nature and volume, or receives remuneration or fees (other than the one received in consideration of his
performance as a director) from the company or its shareholders having a direct or indirect “significant participation” on
the same, or with corporations in which the shareholders also have a direct or indirect “significant participation.” This
prohibition includes professional relationships and affiliations during the last three years prior to his or her appointment as
director;
(4) directly or indirectly owns 5% or more of shares with voting rights and/or a capital stock of the company or any company
with a “significant participation” in it;
(5) directly or indirectly sells and/or provides goods and/or services (different from those accounted for in section c)) on a
regular basis and of a significant nature and volume to the company or to its shareholders with direct or indirect “significant
participation,” for higher amounts than his or her remuneration as a member of the board of directors. This prohibition
includes business relationships that have been carried out during the last three years prior to his or her appointment as
director;
(6) has been a director, manager, administrator or principal executive of not-for-profit organizations that have received funds,
for amounts greater than those described in section I) of article 12 of Resolution No. 30/2011 of the UIF and its
amendments, from the company, its parent company and other companies of the same group of which it is a part, as well
as of the principal executives of any of them;
(7) receives any payment, including the participation in plans or stock option schemes, from the company or companies of the
same economic group, other than the compensation paid to him or her as a director, except dividends paid as a shareholder
of the company in the terms of section d) and the corresponding to the consideration set forth in section e);
(8) has served as director at the company, its parent company or another company belonging to the same economic group for
more than ten years. If said relationship had ceased to exist during the previous three years, the independent condition will
be recovered;
(9) is the spouse or legally recognized partner, relative up to the third level of consanguinity or up to the second level of
affinity of persons who, if they were members of the board of directors, would not be independent, according to the above
listed criteria.
Pursuant to the CNV Rules, a director who, after his or her appointment, falls into any of the circumstances indicted above,
must immediately report to the issuer, which must inform the CNV and the authorized markets where it lists its negotiable securities
immediately upon the occurrence of the event or upon the instance becoming known. In all cases, the references made to “significant
participation” set forth in the aforementioned independence criteria will be considered as referring to those individuals who hold shares
representing at least 5% of the capital stock and or the vote, or a smaller amount when they have the right to elect one or more directors
by share class or have other shareholders agreements relating to the government and administration of the company or of its parent
company; while those relating to the “economic group” correspond to the definition contained in section e) subsection 3, chapter V,
Title II of the CNV Rules.
The Argentine independence standards under the CNV Rules differ in many ways from U.S. federal securities law and NYSE
standards.
Additionally, the Buenos Aires Professional Council of Economic Sciences (Consejo Profesional de Ciencias Económicas de
la Ciudad de Buenos Aires or “CPCECABA”) also established certain requirements regarding the independence of public accountants
which act as members of the Supervisory Committee. Pursuant to regulations issued by the CPCECABA and the CNV, syndics must be
independent from the company that they are auditing. A syndic will not be independent if he/she:
(i)
is the owner, partner, director, administrator, manager or employee of the company or economically related entities;
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(ii) is the spouse or relative (collateral until fourth grade), or relatives by affinity until second grade, of one of the owners,
partners, directors, administrators or managers;
(iii) is a shareholder, debtor, creditor or guarantor of the company or economically related entities, representing a significant
amount if compared with its own wealth or the company’s net equity;
(iv) possesses a significant amount of interest in the company or economically related entities (or if it has had such interest
during the period to be audited);
(v) if the remuneration depends on or is contingent with the conclusions or results of its auditing work;
(vi) if the remuneration agreed depends on the result of the operations of the company.
Currently, Julio Patricio Supervielle, Atilio Dell’Oro Maini, Emérico Alejandro Stengel, Hugo Enrique Santiago Basso and
Laurence Nicole Mengin de Loyer are non-independent, whereas Eduardo Pablo Braun and José María Orlando are independent
members of our board according to the criteria established by the CNV. However, Laurence Nicole Mengin de Loyer is independent
according to the U.S. federal securities law and the NYSE standards. See “—Audit Committee” for further details about independence
requirements of the members of our Audit Committee.
Corporate Governance
We have adopted a Corporate Governance Code to put into effect corporate governance best practices, which are based on
strict standards regarding transparency, efficiency, ethics, investor protection and equal treatment of investors. The Corporate
Governance Code follows the guidelines established by the CNV and the Central Bank. We have also adopted a Code of Ethics and an
Internal Conduct Code, each designed to establish guidelines with respect to professional conduct, morals and employee performance.
Officers
Our management is comprised of our Chief Executive Officer (“CEO”), Julio Patricio Supervielle, who reports to our Board
of Directors, and is in charge of ensuring that the different companies in Grupo Supervielle function in a coordinated manner, with
synergy and efficiency, applying the strategic guidelines defined for each business unit; the Bank’s CEO, Emérico Alejandro Stengel
who is responsible for developing and executing the Bank’s business plans, enhancing key capabilities and increasing operational
efficiency; our chief financial officer (“CFO”), Mariano Biglia, who is in charge of the accounting, tax and planning divisions; our Chief
of Human Resources, Casandra Giuliano and our Chief Technology Officer (“CTO”), Sergio Mazzitello. Our Treasurer and IRO, Ana
Bartesaghi, also reports to the CEO.
Our Chief Risk Officer (“CRO”), Javier Conigliaro, the Head of Internal Audit, Sergio Gustavo Vázquez, our Chief of Legal
Affairs, Celeste Ibañez, our Chief Information Security Officer (“CISO”), Sergio Landro, our Compliance & AML Officer, Moira
Almar, and our Sustainability Officer, Verónica de los Heros, all report to our Board of Directors.
Chief Executive Officer
Name
Julio Patricio Supervielle
Office
Chief Executive Officer
Profession
Business Administration
Date of Birth
December 13, 1956
Senior Management that report to the CEO
Name
Emérico Alejandro Stengel
Mariano Biglia
Casandra Giuliano
Sergio Mazzitello
Office
CEO of the Bank
Chief Financial Officer
Chief of Human Resources
Chief Technology Officer
Profession
Industrial Engineer
Public Accountant
Human Resources
Information Systems
Date of Birth
December 17, 1962
December 16, 1978
December 16, 1971
February 21, 1965
Senior Management that report to the Board of Directors
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Name
Javier Conigliaro
Office
Chief Risk Officer
Sergio Gustavo Vázquez
Celeste Ibañez
Sergio Landro
Moira Almar
Verónica de los Heros
Head of Internal Audit
Chief of Legal Affairs
Chief Information Security
Officer
Compliance & AML Officer
Sustainability Officer
Profession
Economist
Business Administration and
Public Accountant
Lawyer
Information Systems
Lawyer
Hospitality management
Date of Birth
November 16, 1964
May 1, 1974
August 11, 1977
June, 4, 1967
December 6, 1968
May 7, 1970
The CEO has five main responsibilities: (i) creating value for shareholders by monitoring the business units, (ii) bringing
innovation to the provision of financial services, (iii) making sure that we deliver high quality and cost competitive services,
(iv) leveraging key resources to provide support for the business units and (v) planning and executing acquisitions and alliances that fit
into the corporate strategy.
The Bank’s CEO is responsible for developing and executing the Bank’s business plans and customer centric strategy,
enhancing key capabilities and increasing operational efficiency. He leads the Bank’s digital transformation program, ensuring its
adequate implementation organization-wide. He is also responsible for implementing the policies and the strategic goals defined by the
Bank’s Board of Directors, as well as for providing recommendations to the Board regarding future plans and the annual budget.
The CFO directs and oversees the controlling, accounting, tax divisions and central services. The controlling division is
responsible for continuous evaluations of short-term and long-term strategic financial objectives, capital planning, preparing financial
trends analyses and analyses of forecasts, budgets and costs. The accounting division monitors compliance with generally accepted
accounting principles and applicable federal, state and local regulations and laws, and rules for financial reporting. The tax division is
responsible for tax planning, compliance with federal and state tax regulations and acts as advisor to business segments in the
development of new products for tax matters.
The Chief of Human Resources is responsible for the design and implementation of human capital strategies. The human
resource manager is in charge of global human resource policies across all business units. He functions as a strategic partner of top
management to ensure that we attract and retain the talent necessary to achieve business growth. The Chief of Human Resources’ main
strategies are: consolidating our talent pool, developing a sustainable organization focused on clients and with competitive remuneration
packages, spreading the Supervielle culture, which breeds innovation, work ethic, empowerment and merit recognition and maintaining
high morale among employees.
The Chief Technology Officer is responsible for leading the IT administration, and in turn establish a solid relationship between
IT and business areas to deliver added value to the organization and ensure compliance with digital transformation objectives, under a
technological architecture framework. The CTO also leads the digital transformation of the core business with agile methodologies and
organization by tribes to contribute with the vision of becoming a technological company.
The Treasurer & Investor Relations Officer (“IRO”) heads the Treasury and Investor Relations division. As Treasurer is
responsible for the company liquidity position and funding strategies, and as IRO is responsible for preparing and providing financial
information to, and coordinating with, regulatory bodies and both domestic and international investors and analysts.
The Chief Risk Officer (“CRO”) is responsible for overseeing the governance and framework for global risk management
across the different companies of Grupo Supervielle. In addition, the CRO provides independent guidance for managing the overall
risks, including credit risk, market risk, interest rate risk, liquidity risk and operational risks, reputational risk and cybersecurity risks in
order to ensure that our business is in line with the regulatory requirements. The CRO is also responsible for establishing the global
credit risk policies and the soundness of the credit approval process across all business units.
The Head of Internal Audit is responsible, across all business units, for the audit process, evaluating and advising on internal
control, corporate governance and risk management, in order to ensure compliance with laws, regulations and internal policies,
contributing to the availability of reliable financial information, and the effectiveness and efficiency of operations, within the framework
of the strategic objectives.
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The Chief of Legal Affairs is in charge of ensuring that each of our businesses complies with internal policies and procedures
within the legal framework established by regulatory authorities and with the applicable contractual requirements. In addition, the Chief
of Legal Affairs provides legal advice to Grupo Supervielle and each of its subsidiaries regarding business development, the prevention
of legal risk and conflict resolution.
The Chief Information Security Officer is responsible for ensuring an adequate management of information security, through
the establishment and implementation of security policies, procedures, standards and controls over the information assets of Grupo
Supervielle’s companies, and thus protect their infrastructures, digital channels and information assets through a holistic approach based
on threat intelligence.
The Compliance & AML Officer is responsible for developing, implementing and overseeing the Ethics and Compliance
program. This program includes promoting an ethical corporate culture, monitoring the adherence to the Code of Ethics and verifying
the effective enforcement of the anticorruption policy. The Compliance Officer conducts a regular risk analysis in order to adapt the
Ethics and Compliance Program after monitoring and evaluating its effectiveness.
The Sustainability Officer promotes a sustainable culture that contributes to value creation for the different stakeholders with
which Grupo Supervielle develops its activities and to position the company as a benchmark for best practices.
The following are academic and professional backgrounds of our management members.
Mariano Biglia has been Chief Financial Officer of Grupo Supervielle since June 2020. He joined Grupo Supervielle as head
of financial reporting in 2010, and since 2016 has served as head of administration, tax and finance, leading the financial reporting team
for Supervielle’s IPO and Follow On. Earlier, he held several positions within the Techint Group, where he worked on the IPO of Tenaris
and Ternium and served as Controller of Ternium’s US subsidiary. He is a Certified Public Accountant with a degree from the University
of Buenos Aires, holds an Advanced Management Program degree (AMP) from Kellogg School of Management at Northwestern
University and is a CFA charterholder.
Sergio Mazzitello is Chief Technology Officer of Grupo Supervielle. He joined Supervielle in December 2019. Previously he
served since 2014 as Chief Information Officer in Naranja, from Grupo Galicia. He also held several executive level positions leading
cross-functional international teams, in the areas of Business, Operations, and IT. He holds a degree in Information Systems from the
University of Buenos Aires, a master’s in business administration from IDEA and more than 28 years’ experience in the payments
industry and in financial services.
Casandra Giuliano has been appointed Chief Human Resources Officer of Grupo Supervielle and Banco Supervielle S.A. as
of September 2022. She has over 20 years of experience designing talent management strategies, development, and organizational
transformation processes with an innovative and holistic vision. Prior to that, she held the positions of Culture and Talent Manager at
Banco Galicia and Cultural Transformation Manager for 2 years at the same company, implementing agile methodologies, creating new
operating models, and leading the transformation process of traditional operations towards Data Driven models. She previously served
as HR Advisory Manager at Banco Galicia, HR, Quality and Organization Manager at Galicia Seguros and HR Manager at BGH. She
obtained a Degree in Labor Relations from Universidad de Buenos Aires (UBA) and has specialized in the field of Human Resources
at financial institutions. She obtained a Postgraduate Degree in Human Resources Strategic Management at the Instituto para el
Desarrollo Empresarial de la Argentina (IDEA), in addition to a Management Development Program at the Instituto de Altos Estudios
Empresariales (IAE).
Javier Conigliaro has been Chief Risk Officer of Grupo Supervielle since July 2016. He served as Chief Risk Officer of Banco
Supervielle S.A. from 2012 through 2016. He held previous several positions at Banco Supervielle S.A., Head of Corporate Risk in
Société Générale Argentina, Credit Risk Senior analyst in SocGen New York and in Beal WestLB Argentina. With overall 34 years of
experience in the risk industry within financial institutions, Mr. Conigliaro is an economist with graduate studies from the University of
Buenos Aires, he attended the Executive Education Program in Risk Management at Kellogg School of Management & PRMIA and the
Management Development Program at Universidad Austral – IAE Business School. He reports to our Board of Directors.
Sergio Gustavo Vázquez has been Head of Internal Audit since March 2019. Prior to his appointment he was Audit Director
at Banco Itaú and its subsidiaries in Argentina, from June 2013 to March 2018, and he added responsibilities as Head of Audit Northern
Hemisphere Subsidiaries since 2017. He also held several positions within the Audit area in Itaú from 1998 to 2013 where he served as
Latam Audit System Supervisor in Itaú Latam Subsidiaries, among others. He developed an extensive career with a scope of Risk,
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Finance, Analytics and IT. He holds degrees in Business Administration and Public Accountant from the University of Buenos Aires
and an MBA from the IAE. He also obtained international certifications as Internal Auditor “CIA” from the Institute of Internal Auditors
in 2001 and as Information System Auditor “CISA” from ISACA in 2006.
Celeste Ibañez was appointed Chief Legal Officer of Grupo Supervielle in March 2024. Until then, she served as Head of
Santander Argentina’s Internal Governance department, Intellectual Property and Market Relations Manager and Head of Responsible
Banking/ESG. Furthermore, she was a member of the board of directors of Gire S.A. (Rapipago) and of the Santander Foundation.
Previously, she was a senior lawyer position in the legal teams of Corporate & Investment Banking, Strategy Projects, and IT
Development. Among her areas of expertise are legal, regulatory, corporate governance, banking and finance, risk management and
responsible banking. As Responsible for Internal Governance, she gained experience in supporting the boards of directors of Santander
Argentina and the subsidiaries of the Santander Group in Argentina. She is member of Women Corporate Directors Argentina. Mrs.
Ibañez graduated from Universidad de Buenos Aires and obtained a master’s degree in finance at Universidad del CEMA. In addition,
she obtained a Certificate Study in New Digital Businesses from Universidad de San Andrés and attended a Green Bonds and Sustainable
Finance Program at Universidad del CEMA and a Board Participation Program at IDEA Business School. She is director of Mila and
Portal Integral de Inversiones.
Sergio Landro has been Chief Information Security Officer of Grupo Supervielle since October 2022. Sergio is responsible for
the definition and management of the strategic information security plan for all the companies of Grupo Supervielle. Previously he held
the positions of Director of Information Security for LATAM, at FirstData, a multinational company dedicated to processing means of
payment and Director of Systems Audit at PricewaterhouseCoopers. With more than 33 years of experience in the field of information
security, Mr. Landro holds a degree in computer science from the Universidad Argentina de la Empresa. His professional career focuses
on financial and service entities through the creation and implementation of appropriate methodologies and frameworks that allow
balancing business agility with information protection. He is focused on aspects such as IT risk management, innovation and
contributions to the business, optimization of investments in security, and the reduction to an acceptable maximum of losses due to
security incidents.
Moira Almar has been Compliance & AML Officer since October 2017. She previously served as the Head of Compliance at
Banco Santander Rio from 2006 to 2017, having worked before in various compliance and commercial positions also at Santander Rio.
Moira holds a Law Degree from the National University of La Plata, Masters in Banking Disciplines at the University of Siena - Italy
and completed the Executive Management Development Program of the School of Business Management (EDDE / UADE). She has
26 years of industry experience and 18 in compliance. She reports directly to the Ethic, Compliance & Corporate Governance Committee
of our Board of Directors.
Ana Bartesaghi is Grupo Supervielle’s Treasurer and IRO since September 2011. She also serves as Director of Supervielle
Seguros and Sofital. She was previously Head of Capital Markets at Banco Supervielle S.A. from 2004 to 2011 and she held prior
positions at Citibank, Banco CMF, and Société Générale. She is a Certified Public Accountant from the University of Montevideo in
Uruguay, and a post graduate degree in Economics from University of CEMA in Buenos Aires. She has 31 years of industry experience.
Verónica de los Heros is Sustaintability Officer since 2022. She is responsible for designing, developing, and managing the
Sustainability strategy of the Group and its subsidiaries. Previously, she worked for 10 years as Quality Chief and Quality Manager at
IAE Business School, Universidad Austral, where she coordinated the establishment and control of quality standards for executive
programs and masters, among other activities. She has completed several executive training programs, including the Development
Program for Directors (“Programa de Desarrollo Directivo”) at IAE Business School, the Executive Program of Management of Quality
of Service Companies (“Programa Ejecutivo de Gestión de Calidad en Empresas de Servicio”) at the Universidad Austral, and the
Young Professionals Program (“Programa Jóvenes Profesionales”) at IAE Business School.
For the biographies of Mr. Julio Patricio Supervielle and Mr. Emérico Alejandro Stengel, see “—Board of Directors.”
Supervisory Committee
We have a monitoring body called the supervisory committee (“Supervisory Committee”). Our Supervisory Committee consists
of three syndics and three alternate syndics appointed by the shareholders at our annual ordinary shareholders’ meeting. The syndics
and their alternates are elected for a period of one year, and any compensation paid to our syndics must have been previously approved
at an ordinary shareholders’ meeting. The term of office of the members of the Supervisory Committee expires on the annual ordinary
shareholders’ meeting to consider our financial statements as of December 31, 2023.
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Pursuant to the Argentine General Corporations Law, only lawyers and accountants admitted to practice in Argentina and
domiciled in Argentina or civil partnerships composed of such persons may serve as syndics in an Argentine sociedad anónima, or
limited liability corporation.
The primary responsibilities of the Supervisory Committee are to monitor compliance with the Argentine General Corporations
Law, the bylaws, its regulations, if any, and the shareholders’ resolutions, to supervise the administration of the company and to perform
other functions, including, but not limited to: (i) attending shareholders’ and Board of Directors’ meetings, (ii) calling extraordinary
shareholders’ meetings when deemed necessary and ordinary and special shareholders’ meetings when not called by the Board of
Directors, (iii) monitoring the company’s corporate records and other documents, and (iv) investigating written complaints of
shareholders. In performing these functions, the Supervisory Committee does not control our operations or assess the merits of the
decisions made by the Board of Directors.
The following chart shows the members of our Supervisory Committee appointed by the annual ordinary shareholders’ meeting
held on April 19, 2024. According to Technical Resolution No. 15 of the Argentine Federation of Professional Counsel of Economic
Sciences and Section III, Chapter III of Title II of the CNV Rules, all of our syndics and alternate syndics are independent. All of the
members of our Supervisory Committee were appointed for the term of one year, until the annual shareholders’ meeting that considers
the financial statements corresponding to the fiscal year ended December 31, 2023.
Name
Enrique José Barreiro
Carlos Alfredo Ojeda
Valeria Del Bono Lonardi
Name
Carlos Enrique Lose
Roberto Aníbal Boggiano
Jorge Antonio Bermúdez
Office
Syndic
Syndic
Syndic
Office
Alternate Syndic
Alternate Syndic
Alternate Syndic
Beginning Date of Office
June 8, 2009
July 25, 2019
April 24, 2018
Beginning Date of Office
June 8, 2009
June 8, 2009
April 28, 2020
Date of Birth
December 5, 1945
January 17,1944
September 6, 1965
Date of Birth
October 2,1943
September 1,1955
March 12, 1946
The following are academic and professional backgrounds of the Supervisory Committee members:
Enrique José Barreiro holds a degree in Accountancy graduated from Universidad Nacional de Lomas de Zamora. From 1969
until May 2000, he worked at Banco Tornquist/Credit Lyonnais, where he held the position of Assistant Accountant. From June 2000
until June 2007, he held the position of Assistant Accountant and General Accountant at Banco San Luis/Banco Banex S.A. He currently
serves as a Syndic of Grupo Supervielle S.A., Banco Supervielle S.A., Sofital S.A.U.F. e I., Espacio Cordial, Supervielle Seguros S.A.,
Micro Lending S.A.U., InvertirOnline S.A.U., Portal Integral de Inversiones S.A.U., Bolsillo Digital and Supervielle Agente de
Negociación.
Carlos Alfredo Ojeda holds a degree in Accountancy graduated from Universidad de Buenos Aires. He was an Internal Audit
Manager of the International Division of Gillette Company until 1977, and worked in Argentina, Brazil, Chile and Perú. He was a
partner of a major local audit firm until 1995. He is a consultant on audit and corporate issues and has an active participation in
management and control aspects of corporations in various industries. He has lectured at Universidad de Buenos Aires, including courses
on Financial Planning and Budget Control and Audit and Management Control. He was also a speaker at various seminars and courses
in his areas of specialty. He is a co-author of Auditoría – Técnica y Práctica and Normas para la Presentación de Estados Contables de
Sociedades por Acciones. He is also a contributor to the publication Doctrina Societaria y Concursal. He currently serves as Syndic of
Grupo Supervielle S.A.
Valeria Del Bono Lonardi is a Lawyer graduated from Universidad de Buenos Aires and attended other professional
specialization courses, including the International Criminal Update Program at Universidad Austral (2009). She joined Salvi Law Firm
in 1995 and since then has been dedicated to the counseling and practice of criminal law. Her professional specialization is mainly based
on the dogmatic of criminal offenses, with permanent assistance to insurance companies and independent professionals; the elaboration
of strategies and proposals of technical defenses in the framework of oral and public trials and the advice on the prevention of corporate
fraud, particularly to banking and financial entities. She is a member of the Bar Association of Buenos Aires and of the Bar Association
of San Isidro. She currently serves as a Syndic of Grupo Supervielle S.A. and as an Alternate Syndic of Banco Supervielle S.A.
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Carlos Enrique Lose holds a degree in Accountancy graduated from the Universidad de Buenos Aires. He worked for
several years in the Audit Department of an important audit firm, and later dedicated to providing business advice. He was a lecturer at
the Universidad de Buenos Aires’ School of Economics and has lectured courses at both public and private professional institutions. He
is a founding partner of Bermúdez, Lose & Asociados. He has published different Works with specialized journals and is a co-author of
the book Normas de Presentación de Estados Contables de Sociedades por Acciones. He currently serves as an Alternate Syndic of
Grupo Supervielle S.A, Espacio Cordial, Micro Lending S.A.U., InvertirOnline S.A.U., Portal Integral de Inversiones S.A.U., Bolsillo
Digital y Supervielle Agente de Negociación.
Roberto Aníbal Boggiano holds a degree in Accountancy graduated from Universidad de Buenos Aires. He attended post
graduate seminars on planning and corporate taxation. He has worked at several companies, including Celulosa Jujuy S.A., where he
was as an analyst accountant assistant, general accountant and chief of planning from 1978 to 1994; Sert S.A., where he served as the
administrative manager from 1994 to 1995; and Estudio Carlos Asato y Asociados, where he was in charge of corporate taxation and
advising from 1995 to 2011. He currently serves as an Alternate Syndic of Grupo Supervielle S.A. and as Syndic of Banco Supervielle
S.A.
Jorge Antonio Bermúdez holds a degree in Accountancy from Universidad de Buenos Aires. After working in the Audit
Department of a major firm, he specialized in the Consulting and Finance fields, where he held senior management positions at important
service companies. Later on he became a full time advisor in these fields. He was also a professor at the School of Economics of
Universidad de Buenos Aires and lectured courses in private entities in addition to those arranged by his own firm. At present, he is an
alternate syndic of Grupo Supervielle S.A., Banco Supervielle S.A., Espacio Cordial, Micro Lending S.A.U., InvertirOnline S.A.U.,
Portal Integral de Inversiones S.A.U., Bolsillo Digital and Supervielle Agente de Negociación.
According to the provisions of Section 79 of the Argentine Capital Markets Law, listed companies which have an audit
committee are allowed not to have a Supervisory Committee. Such decision may only be adopted by an extraordinary shareholders
meeting with a special quorum and supermajority of 75% of the voting stock.
Compensation of Directors, Management and Supervisory Committee
Our shareholders fix our directors’ compensation, including their salaries and any additional wages arising from the directors’
permanent performance of any administrative or technical activity. Compensation of our directors is regulated by the Argentine General
Corporations Law and the CNV regulations. Any compensation paid to our directors must have been previously approved at an ordinary
shareholders’ meeting. Section 261 of the Argentine General Corporations Law provides that the compensation paid to all directors in
a year may not exceed 5.0% of net income for such year, if the company is not paying dividends in respect of such net income. The
Argentine General Corporations Law increases the annual limitation on director compensation to up to 25.0% of net income based on
the amount of dividends, if any, that are paid. In the case of directors that perform duties at special committees or perform administrative
or technical tasks, the aforesaid limits may be exceeded if a shareholders’ meeting so approves, such issue is included in the agenda,
and is in accordance with the regulations of the CNV. In any case, the compensation of all directors and members of the supervisory
committee requires shareholders’ ratification at an ordinary shareholders’ meeting.
We have not entered into employment contracts with the members of our Board of Directors, except for E. Alejandro Stengel
as CEO of the Bank. We have assigned certain executive and technical-administrative functions to some of our directors. As of the date
of this annual report, neither we, nor any of our affiliates, have entered into any agreement that provides for any benefit or compensation
to any director after expiration of his or her term.
Our annual ordinary and extraordinary shareholders’ meeting held on April 19, 2024 resolved to delegate to our board of
directors the authority to implement a stock option program in the future. The beneficiaries of this program are expected to be key
officers of the Company and its subsidiaries.
The aggregate compensation paid to our directors, senior management and members of our Supervisory Committee in 2023
was approximately Ps.2,889.9 million, Ps.2,415.4 million and Ps.2.3 million, respectively.
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Audit Committee
Pursuant to the Argentine Capital Markets Law and its implementing regulations, we are required to have an audit committee
consisting of at least three members of our Board of Directors with experience in business, finance, accounting, banking and audit
matters. Under CNV regulations, at least a majority of the members of the audit committee must be independent directors.
As a foreign private issuer listed in the United States, our audit committee is composed of independent members designated by
our Board of Directors, who are independent under Rule 10A-3 under the Exchange Act. All three members of our audit committee are
financially literate and Laurence Nicole Mengin de Loyer is a financial expert.
We will take the necessary measures to ensure that independent alternate members are available in order to fill possible
vacancies. A quorum for a decision by the audit committee will require the presence of a majority of its members and matters will be
decided by the vote of a majority of those present at the meeting. A chairperson of the committee must be appointed during the first
meeting after members of the committee have been appointed. The chairperson of the committee may cast two votes in the case of a tie.
Pursuant to our bylaws, audit committee members may participate in a meeting of the committee by means of a communication system
that provides for a simultaneous transmission of sound, images and words, and members participating by such means count for quorum
purposes and the committee will pass resolutions by the affirmative vote of the majority of members present either physically or by
means of such communication system. If the committee holds meetings by means of such communication system, it must comply with
the same requirements applicable to Board of Directors’ meetings held in such way. Decisions of the audit committee will be recorded
in a special corporate book and will be signed by all members of the committee who were present at the meeting. Pursuant to Article 16
Section III Chapter III Title II of the CNV Rules, the audit committee must hold at least one regularly scheduled meeting every
three months.
The Audit Commitee has a written charter that establishes its duties and responsibilities. The current charter was approved by
our Board of Directors in May 2020.
Our audit committee performs the following duties and responsibilities among others:
•
•
issues an opinion on the proposals made by the Board of Directors to the shareholders regarding the appointment of
external auditors;
analyses the services rendered by the external auditors and their fees, ensures their independence, reviews their
planning and evaluates their performance, issuing an opinion on this matter when the Group files its annual financial
statements;
• maintains an understanding of the internal audit policies to ensure that they are complete and up-to-date, and approves
such policies, submitting them to the Board of Directors for their consideration and approval;
•
•
•
•
•
ensures and evaluates the performance of the Internal Audit function, establishing its human and budgetary resources,
approves the annual internal audit plan and additional ad-hoc audits, and oversees compliance with the audit plan,
issuing an opinion on the planning and performance of Internal Audit when the annual financial statements of the
Company are filed;
ensures that the recommendations contained in audit reports are followed;
oversees the sufficiency, adequacy and effectiveness of the internal control systems, to ensure the reliability,
reasonableness, adequacy and transparency of the financial statements and the financial and accounting information
of Grupo Supervielle;
oversees the maintenance of adequate internal controls by each of Grupo Supervielle’s subsidiaries to minimize risk
through the consolidation of best practices with respect to each of the businesses;
evaluates the quality of internal processes with the aim of overseeing the quality control of customer service, the risk
control and the efficiency control in the operation of Grupo Supervielle;
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•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
takes knowledge of Grupo Supervielle’s financial, reputational, legal and operational risks and oversees compliance
with policies designed to mitigate them and with information policies on risk management;
assists the Board of Directors in the supervision of the financial statements, analyzing Grupo Supervielle’s financial
statements and the consolidated financial statements with its controlled and associate companies prior to their
presentation to the Board of Directors and with the necessary depth to assess their reasonableness, reliability and
clarity;
supervises the reliability of the financial information and the information on significant events that are presented to
the markets and control agencies;
assists the Board of Directors in supervising compliance with the established policies, processes, procedures and rules
established by Grupo Supervielle and its controlled and associate companies;
takes knowledge of compliance with the applicable regulations in matters related to conduct in the securities markets,
data protection, as well as that the requirements of the competent bodies on these matters are addressed in a timely
and appropriate manner;
ensures that the Code of Ethics and Internal Codes of Conduct comply with current rules and regulations;
verifies the fulfillment of any applicable rules of conduct;
takes notice of complaints regarding accounting, internal control over financial reporting and auditing matters,
received through the applicable procedures;
provides the market with complete information on transactions in which there may be a conflict of interest with
members of our various corporate bodies or controlling shareholders;
issues grounded opinions on related-party transactions under certain circumstances and files such opinions with
regulatory agencies as required by the CNV;
issues an opinion on the reasonableness of fees and stock option plans for our Directors and managers proposed by
the Board of Directors;
issues a report before any decision of the Board of Directors to buyback shares of the Company;
issues an opinion on the fulfillment of legal requirements and on the reasonableness of the terms of the issuance of
shares or other securities that are convertible into shares, in cases of capital increase in which preemptive rights are
excluded or limited;
at least once a year and upon the filing of the Company´s annual financial statements, issues a report to the Board and
shareholders addressing the work done to perform its duties, and the results of its work;
prepares an action plan for each fiscal year, which must be presented to the Board of Directors and the Supervisory
Committee within sixty calendar days of the beginning of the fiscal year; and
•
performs all other duties stated in its charter, our bylaws, laws and regulations.
Members of the board, members of the Supervisory Committee and external independent accountants are required to attend
the meetings of the audit committee if the audit committee so requests it, and are required to grant the audit committee full cooperation
and information. The audit committee is entitled to hire experts and counsel to assist it in its tasks and has full access to all of our
information and documentation that it may deem necessary.
The following chart shows the current membership of our Audit Committee:
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Name
José María Orlando
Laurence Nicole Mengin de
Loyer(2)
Eduardo Pablo Braun
Position
Director, Chairperson of the
Committee
Director
Director
Profession
Business Administration
Business Administration
(Financial Expert)
Industrial Engineer and
Business Administration
Status(1)
Independent
Independent
Independent
(1) Pursuant to Rule 10A-3 of the Exchange Act.
(2) As of the Shareholders’ Meeting held on April 27, 2021, Ms. Mengin de Loyer is a non-independent director pursuant to the CNV
Regulations12 whereas she is an independent director pursuant to Rule 10A-3 of the Exchange Act.
Sergio Vazquez, our Head of Internal Audit, is the Secretary of the audit committee.
Anti-Money Laundering and Anti-Terrorist Finance Committee
We have an anti-money laundering and anti-terrorist finance committee consisting of three members of our Board of Directors.
Decisions of the anti-money laundering and anti-terrorist finance committee are recorded in a special corporate book and signed by all
members of the committee who were present at the meeting.
Among its duties, the anti-money laundering and anti-terrorist finance committee must:
•
•
oversee compliance with current applicable anti-money laundering rules and ensure that Grupo Supervielle and its
subsidiaries are in compliance with best practices related to anti-money laundering;
take knowledge of the amendments to the applicable regulations and provide for the timely revision of the internal
policies and procedures manuals accordingly;
• maintain an understanding of the best market anti-money laundering practices and oversee its implementation at Grupo
Supervielle’s and its subsidiaries’ level;
•
•
oversee compliance with disclosure of information to the competent authorities; and
carry out all those functions established by the rules of the Financial Intelligence Unit and other applicable provisions
on the matter.
The following table sets forth the members of the anti-money laundering and anti-terrorist finance committee.
Name
Atilio Dell’Oro Maini
Emérico Alejandro Stengel
Hugo Santiago Enrique Basso
Moira Almar
Risk Management Committee
Position
Director, Chairman of the Committee, Responsible Officer before UIF
Director
Director
Compliance & AML Officer, Secretary of the Committee
The risk management committee is composed of at least two directors and of members of our management team, and of
management of our main subsidiaries.
Our risk management committee performs the following functions:
•
develops strategies and policies for the management of credit risk, market risk, interest rate risk, liquidity risk,
operational risk and other risks that could affect us, makes sure our strategies and policies are in line with regulations
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and best practices and oversees their correct implementation and enforcement and defines Grupo Supervielle’s risk
appetite and tolerance and the global risk profile for the approval of the Board of Directors;
approves limits relating to the management of credit risk, market risk, interest rate risk and liquidity risk, and monitors
the evolution of key indicators relating to operational risk, which includes a map of risks used by the trading desk for
trading operations and the map of risks for investment operations at a consolidated level;
periodically monitors the risks that Grupo Supervielle faces and the application of strategies and policies designed to
address such risks;
defines the general criteria for pricing risk;
evaluates the adequacy of capital with respect to Grupo Supervielle’s risk profile;
defines policy and the methodological framework for performing stress tests with respect to risk management,
approves scenarios for conducting individual stress tests for particular and general risks, evaluates and discusses the
results of the stress tests that are presented and recommends contingency plans to address such risks, utilizes the results
of the stress tests for the consideration of establishing or revising the limits and brings all of the results of the tests to
the Board of Directors for approval;
designs effective information channels and systems for the Board of Directors related to risk management;
ensures that our subsidiaries’ management compensation plans incentivize a prudent level of each risk;
approves risk management quantitative models and monitors the effectiveness of such models; and
remains aware of the memos and rules related to risk published by each regulatory agency that regulates any of our
subsidiaries, as well as understands the repercussions that the application of such memos or rules could have on our
operations.
•
•
•
•
•
•
•
•
•
The following table sets forth the members of the risk management committee.
Name
Position
Julio Patricio Supervielle
Emérico Alejandro Stengel
Laurence Nicole Mengin de Loyer
Javier Conigliaro
Chairman of the Committee, Chairman of the Board and CEO
Director
Director
Chief Risk Officer (CRO), Secretary of the Committee
Ethics, Compliance and Corporate Governance Committee
The ethics, compliance and corporate governance committee is tasked with assisting the Board of Directors in adopting the
best practices of good corporate governance aimed at maximizing the growth capacity of Grupo Supervielle and its related companies
and prevent the destruction of value. It also assists the Board of Directors in overseeing its Ethics and Compliance Program. Our ethics,
compliance and corporate governance committee performs the following functions:
•
•
•
prepares and submits to the Board of Directors for its approval the Code of Corporate Governance and the codes,
policies and procedures with regards to Ethics and Compliance, aiming to a progressive convergence towards the
international standards of ethics, compliance and corporate governance;
proposes to the Board of Directors the agenda related to ethics and compliance;
defines policies and procedures related to ethics and compliance;
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•
promotes, follows-up and oversees the compliance with the Code of Corporate Governance, and with the codes,
policies and procedures related to Ethics and Compliance and informs the Board of Directors of any deviations that
may occur and makes recommendations accordingly;
•
takes knowledge of all applicable regulations and their impact within Grupo Supervielle’s practices;
• makes recommendations to the Board of Directors on the gradual and progressive adoption of the provisions set forth
by the CNV and the Central Bank regarding corporate governance standards;
•
•
•
•
•
•
•
•
•
takes knowledge of the recommendations of the Basel Committee accords and makes recommendations to the Board
of Directors for their gradual and progressive adoption;
submits to the Board of Directors an Annual Report of Compliance with the Code of Corporate Governance;
reviews the results of the inspections carried out by the Central Bank and any other regulatory bodies and addresses
the observations of the external auditors as regards ethics, compliance and corporate governance issues;
reports to the Board of Directors on the general situation of the Code of Corporate Governance, ethics and compliance
as well as on incidents and complaints;
proposes to the Board of Directors any changes to the terms of reference of the Board Committees in order to improve
the execution of its objectives and functions;
proposes policies and procedures to the Board of Directors for the assessment and self-evaluation of the Board and its
members and of the board committees;
defines policies and guidelines with regards to Grupo Supervielle’s related parties;
revises from time to time the terms of the Code of Ethics and of the Code of Corporate Governance; and
carries out any other acts within its competence, as may be requested by the Board of Directors.
The following table sets forth the members of the ethics, compliance and corporate governance committee.
Name
Atilio Dell’Oro Maini
Laurence Mengin de Loyer
Moira Almar
Celeste Ibañez
Javier Conigliaro
Sergio Vázquez
Agustina del Pilar González
Position
Director, Chairman of the Committee
Director
Compliance & AML Officer, Secretary of the Committee
Chief of Legal Affairs
Chief Risk Officer (CRO)
Head of Internal Audit
Head of Corporate Affairs
Nomination and Remuneration Committee
The Nomination and Remuneration Committee is composed of at least three directors. The Chairman of the Committee must
be an independent director under the Regulations terms of the CNV.
The Nomination and Remuneration Committee performs the following functions:
•
assists the Board of Directors in the nomination of Directors process and in the definition of criteria for identification
and selection of qualified individuals to be candidates for the Board of Directors;
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•
•
•
•
•
•
•
•
•
•
•
•
•
•
identifies and interviews candidates to be part of the Board of Directors and recommend candidates to the Board to be
nominated at the shareholders’ meeting;
coordinates the induction process for new members of the Board of Directors and Senior Management;
dictates principles, parameters and guidelines of remuneration policies applicable to independent and non-independent
members of the Board of Directors, Senior Management and staff in general, including (as the case may be) fee
schemes, fixed and variable salaries and incentive plans, retirement plans and associated benefits, following current
regulatory provisions;
carries out an annual evaluation of the financial incentives system for Senior Management, which may be carried out
by an independent firm. Work together with the Risk Management Committee in evaluating incentives generated by
the aforementioned economic incentive system for personnel;
prepares (in conjunction with the Ethics, Compliance & Corporate Governance Committee) criteria and guidelines for
the Board’s self-evaluation process and review it periodically;
coordinates implementation of the Board’s annual self-evaluation and prepare an annual report on the matter, in
accordance with established evaluation guidelines and criteria. Also coordinate self-evaluation of the Board
Committees performance;
raises proposals for strategic human resources plans to the Board, including but not limited to, human capital
development plans, incentive plans and / or monetary and non-monetary benefits, communication plans, labor
relations plans and training plans and carry out periodic monitoring of the implementation of said strategic plans;
dictates guidelines to conduct annual performance evaluations of personnel;
submits proposals to the Board of Directors for appointments of senior managers of the companies of Grupo
Supervielle (CEO, Deputy CEO and Senior Managers);
promotes achievement of high standards of integrity and honesty on the part of all employees of Grupo Supervielle
and its subsidiaries;
approves and inform the Board of Directors of the contracting of insurance policies applicable to the Board of
Directors and members of Senior Management;
reviews the organizational structure of Grupo Supervielle and its subsidiaries;
proposes recommendations to the Board of Directors regarding its composition; and
exercises those other competencies assigned to this committee by the Board of Directors.
The following table sets forth the members of the Nominations and Remuneration Committee:
Name
Eduardo Pablo Braun
Julio Patricio Supervielle(1)
Hugo Enrique Santiago Basso
Laurence Mengin de Loyer
Position
Independent Director, Chairman of the Committee
Chairman of the Board and CEO
Director
Director
(1)
Julio Patricio Supervielle is an executive Director in his capacity as CEO of Grupo Supervielle.
The Chief Human Resources Officer is the Secretary of the Nomination and Remuneration Committee.
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Disclosure Committee
The disclosure committee is responsible for the following tasks:
•
•
•
supervise our system of controls and disclosure procedures to ensure that the information required to be made known
to the public (directly or through regulatory bodies) is recorded, processed, summarized and reported accurately and
in a timely manner;
evaluate the effectiveness of disclosure controls and procedures to determine the need or desirability of making
changes to those controls and procedures in relation to the preparation of the next periodic reports;
review of any information related to any material fact that must be submitted to the Argentine Securities and Exchange
Commission, the Buenos Aires Stock Exchange, the Mercado Abierto Electrónico S.A., the SEC, the New York Stock
Exchange, the Argentine Central Bank, the Superintendency of Insurance, and any other regulatory body with which
it interacts and which relates to (i) mandatory reports; (ii) press releases containing financial information, information
on significant or material transactions; (iii) publication of relevant facts, (iv) oral communication and written
correspondence for dissemination to shareholders and investors; and (v) any other relevant piece of information that
should be communicated; and
•
propose to the Board the policy for the management of confidential information and control its compliance,
particularly that related to legal persons.
The following table sets forth the members of the disclosure committee.
Name
Julio Patricio Supervielle
Atilio Dell’Oro Maini
Laurence Nicole Mengin de Loyer
Mariano Biglia
Javier Conigliaro
Celeste Ibañez
Ana Inés Bartesaghi Bender
Matías González Carrara
Position
Chairman of the Board and CEO, Chairman of the Committee
Director
Director
Chief Financial Officer (CFO)
Chief Risk Officer (CRO)
Chief of Legal Affairs
Treasurer and Investor Relations Officer (IRO), Secretary of the Committee
Head of Accountancy of Grupo Supervielle
Committee for the Analysis of Operations with Related Parties
The committee for the analysis of operations with related parties has advisory and supervision powers to evaluate the operations
to be performed between by Grupo Supervielle’s related parties as established in the Policy of Approval of Operations with related
parties, connected counterparties and related persons in order to ensure that such operations are granted under the conditions required
by the applicable regulations and in a transparent manner.
The following table sets forth the members of the committee for the analysis of operations with related parties.
Name
Atilio Dell’Oro Maini
Julio Patricio Supervielle
Javier Conigliaro
Celeste Ibañez
Moira Almar
Hernán Oliver
Other upon invitation
Position
Director, Chairman of the Committee
Chairman of the Board and CEO
Chief Risk Officer (CRO)
Chief of Legal Affairs
Compliance & AML Officer
Head of Treasury and Global Markets at Banco Supervielle
CEO of any subsidiary which operation is under committee’s analysis
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Cybersecurity Committee
The main objectives of the Cybersecurity Committee are to evaluate and implement the policies that are proposed with regards
to cybersecurity within the field of the Information Security, including the definitions of risk appetite and the risk map of information
security. In addition, it must ensure compliance with these policies, including the contingency plans for cybersecurity events.
The following table sets forth the members of the cybersecurity committee.
Name
Julio Patricio Supervielle
Atilio Dell’Oro Maini
E. Alejandro Stengel
Sergio Mazzitello
Javier Conigliaro
Sergio Landro
Others from management team
Position
Chairman of the Board and CEO, Chairman of the Committee
Director
Director, CEO of Banco Supervielle
Chief Technology Officer
Chief Risk Officer (CRO)
Chief Information Security Officer (CISO)
CIOs of Grupo Supervielle’s subsidiaries
Banco Supervielle S.A.’s Board of Directors
Our main subsidiary, the Bank, is managed by its own Board of Directors, which is currently comprised of four members. As
of the date of this annual report, the shareholders present at any annual ordinary meeting may determine the size of the Board of
Directors, provided that there shall be no less than three and no more than nine directors, and appoint an equal or lesser number of
alternate directors. Any director so appointed will serve for two years. The elections of the Bank’s Board of Directors are staggered. As
of the date of this annual report, one half of the members of the Bank’s Board of Directors are elected each year. While directors
generally serve two-year terms, in the event of an increase or decrease in the number of directors serving on the Bank’s board, the
shareholders’ are authorized to appoint directors for a period of less than two years. Directors may be reelected and will remain on their
duties until their replacements take their positions.
The Bank’s corporate governance model contains most of the recommendations made by the Central Bank and CNV regarding
corporate governance. Such model provides guidelines regarding decision-making by the Bank’s Board of Directors, as well as certain
guidelines for the committees reporting to the Board of Directors. Among other things, the guidelines incorporate provisions to the
Board of Directors’ regulations, such as:
• The Board of Directors shall meet on a monthly basis in order to discuss policies, strategic issues and business, and
other customary issues such as provisions, budgetary divergences, portfolios, etc.
• The Board of Directors shall meet on a quarterly basis in order to analyze: (i) operational risks and regulatory
compliance,(ii) prevention of money laundering and financing of terrorism, (iii) auditing, (iv) IT, (v) human resources,
(vi) credit risks, and (vii) implementation of the Bank’s strategic plan.
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The following table sets forth the composition of the Bank’s Board of Directors:
Name
Julio Patricio Supervielle
Atilio Dell’Oro Maini
Alejandra Naughton
Patricia Furlong
Title
Chairman of the
Board
First Vice-
Chairman of the
Board
Second Vice-
Chairman of the
Board
Director
Year of
Election
to the
Board
2005
2011
2020
2024
Date of
expiration of
current term
December 31,
2025
December 31,
2025
Date of Birth
December 13,
1956
February 13,
1956
December 31,
2025
September 22,
1962
December 31,
2025
January 13, 1973
All appointed directors, except for Mrs. Patricia Furlong, were approved to be members of the Board of Directors as required
by Central Bank regulations. As of the date of this annual report, the appointment of Mrs. Patricia Furlon is subject to the approval of
the Central Bank. In accordance with Section 11, Chapter III, Title II of the CNV Rules, all directors, except for Mrs. Patricia Furlong,
have the status of non-independent directors. Mrs. Patricia Furlong has the status of independent director pursuant to the CNV and
Central Bank rules.
Set forth below are the biographical descriptions of Alejandra Naughton and Patricia Furlong. For biographical descriptions of
the rest of the Bank’s directors, see “—Board of Directors.”
Alejandra Naughton was appointed Director of Banco Supervielle S.A. on July 13, 2020. Before being appointed Director,
she was Chief Financial Officer of Grupo Supervielle since 2011 and Chief Financial Officer of Banco Supervielle S.A. since 2012. She
holds a degree in Economics from the Universidad de Buenos Aires and a post-graduate degree in Project Management from Universidad
de Belgrano. She attended the CFO Executive Program at the University of Chicago Booth School of Business. She has taken courses
at the Bank of England in London, where she obtained the “Expert in Finance and Management Accounting” and “Expert in Corporate
Governance” degrees, at the Federal Reserve Bank of New York, where she obtained the “Expert in Management and Operations”
degree, and at the IMF, where she obtained the “Expert in Safeguards Assessment” degree. From 1994 to 2007, she served on the Central
Bank’s staff in several senior positions, including Deputy General Manager from 2003 to 2007 and Argentine Representative to the
Governance Network at the Bank for International Settlements in Switzerland. During 2007 and 2008, she worked as a consultant at the
IMF. Ms. Naughton brings to the Board valuable expertise on banking regulations and monetary matters given her deep knowledge of
the banking sector based on her extensive experience at the Central Bank. Her involvement acting as CFO since our IPO in 2016 allows
her to take on a stewardship role as Grupo Supervielle pursues its reporting responsibilities with the market and financial authorities.
She also provides permanent support to our IR Program. Ms. Naughton currently serves as Second Vice Chairperson of Banco
Supervielle S.A., Director of Supervielle Seguros, Director of Micro Lending, Director of InvertirOnline S.A.U., Director of Supervielle
Productores Asesores de Seguros, Director of Bolsillo Digital, Director of Supervielle Agente de Negociación, Director of IOL Holding,
Director of Portal Integral de Inversiones, Director of Espacio Cordial and Vice Chairperson of IOL Agente de Valores S.A.
Patricia Furlong was appointed Director of Banco Supervielle on April 19, 2024. In addition, she serves as President & CEO
of Global Processing S.A., a technology company focused on processing digital payment methods, with regional scope in Latin America.
Previously, she served as Vice President and General Manager of Global Commercial Payments at American Express Argentina S.A.
being at the same time Executive Director of the Board. She was General Manager of Arvato Services S.A. (company of German origin
with a focus on outsourced services) and worked as Regional BPO Director at EDS S.A. providing services to global accounts.
Additionally, she has several years of experience in Management Consulting, leading projects in various industries both in Argentina
and abroad. She graduated with honors in Business Administration from the University of Buenos Aires, completed an MBA at UCEMA
and Management Development Programs at IAE and MIND (Digital Business) at San Andrés University. She was also certified in the
Leadership Excellence Program at Harvard University. She was awarded the “Inspiring Executive” Award, Women that Build Award
2021, powered by Globant. Mrs. Furlong is also an active promoter of Gender Diversity in the professional field and a frequent speaker
on topics related to the Payment Methods Ecosystem, Fintech Industry and D&I. Mrs. Furlong brings to the Board more than 20 years
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of experience in General Management roles, leading international companies in different industries. She has strategic vision, leading
businesses with solid experience in Commercial Strategy, P&L Management, Product Strategy, Operational Efficiency and Financial
Control. She also adds her extensive experience in Business Consulting, leading strategic Management and Transformation projects
(digital, processes and organizational management).
Banco Supervielle S.A.’s Senior Management
The Bank’s senior management is in charge of the implementation and execution of its overall strategic objectives and reports
to the CEO. The following tables set forth certain relevant information on the Bank’s current executive officers and its senior
management.
Senior management that reports to the Board of Directors of the Bank
Name
Emérico Alejandro Stengel
Mariano Biglia
Javier Conigliaro
Sergio Gustavo Vázquez
Celeste Ibañez
Moira Almar
Sergio Landro
Position
CEO
CFO
Chief Risk Officer
Head of Internal Audit
Chief of Legal Affairs
Regulatory Compliance &
Date of Birth
December 13, 1956
December 16, 1978
November 16, 1964
May 1, 1974
August 11, 1977
December 6, 1968
Year of
Appointment
2020
2020
2012
2019
2024
2017
AML Officer
Chief Information
Security Officer
June 4, 1967
2022
Verónica de los Heros
Sustainability Officer
Hospitality management
May 7, 1970
Senior management that reports to the CEO of the Bank
Name
Silvio Margaria
Sergio Mazzitello
Hernán Oliver
Position
COO and Deputy CEO
Chief Technology Officer
Head of Treasury and
Date of Birth
November 12, 1971
February 21, 1965
June 2, 1973
Roberto García Guevara
Head of Capital Markets
August 21, 1964
Global Markets
Casandra Giuliano
Javier Tiburzio
and Structuring
Chief of Human
Resources
December 16, 1971
Chief Transformation
March 17, 1973
Officer
Year of
Appointment
2020
2019
2009
2018
2022
2023
Set forth below are brief biographical descriptions of the members of the Bank’s senior management.
Silvio Margaria was appointed Deputy CEO and COO of Banco Supervielle S.A. in June 2020. He joined Banco Supervielle
S.A. in 2016, and since April 2019 he was Head of Personal and Business Banking. He has more than 26 years of experience in the
financial industry. Before joining Supervielle, he was responsible for banking companies at Banco Macro S.A. from 2011 to 2016.
Previously, he held several managerial positions overseeing nationwide retail banking networks, as well as corporate banking at
international banks such as BankBoston, N.A. (from 1994 to 2007) and Standard Bank S.A. (from 2007 to 2011). He holds a Law degree
from Universidad Católica Argentina and attended the Executive Development Program of the Universidad Austral Business School.
Hernán Oliver has been the Bank’s Head of Treasury and Global Markets since May 2009. He holds a degree in Economics
from the Universidad Católica Argentina as well as a master’s degree in Finance from CEMA. In 1996 and 1997, he worked at Bank of
America. From 1997 to 2002, he served as Finance Department Senior Trader at Banco General de Negocios. He then worked at Banco
Finansur Finance Department until 2004, when he was hired as the Head of the Trading Desk at Banco Banex (at present Banco
189
Supervielle S.A.). He has also been appointed as Alternate Director of Mercado Abierto Electrónico, the most important electronic
securities and foreign currency trading market in Argentina
Roberto García Guevara joined Banco Supervielle S.A. in April 2018 as Head of Capital Markets. He is a public accountant
graduated from Universidad de Buenos Aires. From 1992 to 1995 he worked at Baring Securities Argentina as a sales trader. From
July 1995 to June 1998 he served as Head of Argentine Research at Caspian Securities Sociedad de Bolsa. Between July 1998 and
November 2002, he worked at Merril Lynch S.A. Sociedad de Bolsa serving as Senior Country Analyst - First Vice President, covering
Argentina and Chile, and he also served as Vice President of the Board. From 2003 to August 2007 Roberto was Head of Research of
Raymond James Argentina. From September 2007 until 2009 he worked at UBS Pactual as Head of Southern Cone and Andean Equity
Strategy & Research. Roberto returned to Raymond James Argentina in 2010, where he was Head of Research until 2012. During his
career in Research, he was ranked 10 times by the annual survey of “Institutional Investor” as a top three analyst for Argentine Equity
Research (he was ranked number one five times). In 2012 he moved to the Corporate Finance effort within Raymond James Argentina
(then AR Partners) and was Head of Corporate Finance between 2015 and March 2018.
Javier Tiburzio has was Transformation Manager of Banco Supervielle S.A. in May 2023. He has more than 30 years of
experience in the financial industry. During his career he held executive positions at Citibank, First Data, Banco Macro and he led the
sales and customer service channels of Banco Supervielle S.A. Mr. Tiburzio has a degree in Business Administration, graduated from
UCES with a postgraduate degree in Business Management from IAE. He has been a Marketing professor at Universidad Di Tella for
several years. He also holds a certification in Fintech ecosystems issued by Wharton University.
For the biography of Mr. Emérico Alejandro Stengel, see “—Board of Directors.”
For the biographies of Mr. Mariano Biglia, Sergio Mazzitello, Mrs. Celeste Ibañez, Mr. Javier Conigliaro, Mr. Sergio Gustavo
Vázquez, Mr. Sergio Anibal Landro, Ms. Moira Almar, Ms. Casandra Giuliano, and Ms. Verónica de los Heros, see “—Officers.”
Succession of the CEO of Banco Supervielle S.A.
On April 11, 2024, we announced that E. Alejandro Stengel will step down from his role of CEO of Banco Supervielle S.A. by
the end of 2024 as part of our succession planning strategy and in connection with our business transformation process towards a digital
and customer-centric operating model. Mr. Stengel remains actively involved in our strategy, governance and oversight as CEO of
Banco Supervielle S.A. and will continue to contribute to our day-to-day operations until his successor is appointed and transitioned
into the role.
Committees Reporting to Banco Supervielle S.A.’s Board of Directors
In accordance with Central Bank regulations, the Bank has several Board committees: the Audit Committee (Communication
“A” 2525, as amended and restated by Communication “A” 6552 and 6555), the Information Technology Committee (Communication
“A” 4609, as amended), the Committee on Control and Prevention of Money Laundering and Financing of Terrorism (Communications
“A” 6709, as amended), and the Senior Credit Committee. In addition, the Bank also has a Risk Management Committee. Each of the
Bank’s Board committees has its own internal charter. Each committee must report to the Board on a periodical basis and submit an
annual report. According to the size, complexity, economic importance and risk profile of the financial institution and the economic
group in question, it is recommended that other specialized committees be established, with a clear definition and disclosure of their
mandates, composition (including members considered independent) and working procedures, such as a Personnel Incentives
Committee, responsible for overseeing that the system of economic incentives to personnel is consistent with the culture, objectives,
long-term business, strategy and control environment of the entity, as formulated in the relevant policy, a Corporate Governance
Committee, which evaluates the management of the Board of Directors and the renewal and replacement of senior management or Ethics
and Compliance Committee, to ensure that the entity has adequate means to promote appropriate decision making and compliance with
internal and external regulations, among others.
Banco Supervielle S.A.’s Audit Committee
The audit committee is formed by at least two members of the Bank’s Board of Directors and its internal audit manager. The
Board of Directors appoints the members of the audit committee for a term of two or three years. The CEO is invited to attend the
meetings.
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The audit committee is responsible for assisting the Board of Directors in the supervision of the consolidated financial
statements, controlling compliance with policies, processes, procedures and rules set forth for each of the Bank’s business areas and for
evaluating and approving the corrective measures proposed by the internal audit area.
The following table sets forth the members of the audit committee:
Name
Alejandra Naughton
Atilio Dell’Oro Maini
Sergio Vazquez
Director, Chairman of the Committee
Director
Head of Internal Audit, Secretary of the Committee
Position
Banco Supervielle S.A.’s Information Technology Committee
The Information Technology Committee is formed by at least one Director appointed by the Board of Directors, the Chief
Technology Officer, the CEO, the Deputy CEO, the CRO, the Head of Technology Infrastructure and Operations, the Head of Systems
Development, the Head of IT Strategy and Solutions Engineering, and the Head of IT Governance.
The Information Technology Committee is responsible, among other things, for the following activities: (i) controlling the
adequate operation of the IT environment; (ii) contributing to the effectiveness of the IT environment; (iii) considering the IT plan and
submitting it for the approval of the Board of Directors; (iv) taking notice of the IT and plan and reviewing it; (v) periodically evaluating
such plan and the level of compliance with it; (vi) reviewing audit reports related to IT and the relevant action plans to overcome any
issues or weaknesses arisen from them; (vii) maintaining an adequate dialogue with the external auditing division of the
Superintendency; (viii) taking knowledge and comply with of all applicable regulation of the Central Bank and other regulatory bodies;
(ix) taking knowledge and approving the resources for the management of the systems contingency plan; (x) taking knowledge of the
new projects within the committee’s competence and managing the priorities of each of them; (xi) taking knowledge of deviations in
relation to the projects assigned to the IT team; (xii) overseeing the financial budget of IT; and (xiii) approving policies, standards, and
any procedure related to IT.
The following table sets forth the members of the Information Technology Committee.
Name
Julio Patricio Supervielle
Patricia Furlong
Sergio Mazzitello
Emérico Alejandro Stengel
Silvio Margaria
Javier Conigliaro
Other members of management team:
Position
Director, Chairman of the Committee
Director
Chief Technology Officer, member and Secretary of the Committee
CEO
Deputy CEO
CRO
Head of Technology Infrastructure and Operations
Head of Systems Development
Head of IT Strategy and Solutions Engineering
Head of IT Governance
Banco Supervielle S.A.’s Committee on the Control and Prevention of Money Laundering and Financing of Terrorism
The committee on the control and prevention of money laundering and financing of terrorism is formed by at least two directors
(one of whom will chair the committee and will act as Corporate Compliance Officer with the Financial Intelligence Unit (FIU) and
another that will act as Alternate Compliance Officer with the Financial Intelligence Unit) and the Head of AML, who will act as
Secretary. The Board of Directors appoints the members of the control and prevention of money laundering and financing of terrorism
committee for a minimum term of two years and a maximum of three years.
The committee on the control and prevention of money laundering and financing of terrorism has to: (i) consider the Bank’s
general strategies and policies in the area of money laundering prevention designed by the Senior Management and submit them for
Board of Directors’ approval; (ii) approve the internal procedures necessary to ensure effectiveness and compliance with the regulations
and policies in force, promote their implementation and control their performance; (iii) take knowledge of the amendment to applicable
regulations and ensure that the updates of internal policies and procedures manuals are timely carried out; (iv) ensure the adoption of a
191
formal and permanent and up-to-date training program for the personnel; (v) have an understanding in the consideration and survey of
the best market practices related to the prevention of money laundering and financing of terrorism and promote their application in the
Bank; (vi) analyze the reports of unusual operations raised by the AML Department or any other Bank officer and, subject to legal
advise, arrange for their report with the relevant authorities; (vii) take knowledge of and promote compliance with the corrective
measures that have arisen as a result of the external and internal audit reports related to the prevention of money laundering and terrorism
financing; (viii) appoint the Head of Prevention of Money Laundering and Terrorism Financing with the concurrence of the Board of
Directors; (ix) inform the control authorities about the removal or resignation of the Corporate Compliance Officer before the FIU within
15 business days of the occurrence, stating the relevant causes of such removal or resignation; (x) coordinate with Internal Audit for the
periodic implementation of external audits carried out by recognized firms specialized in the field; (xi) ensure due compliance with the
reporting duties to the competent authorities; and (xii) carry out all those functions as may be established by the Central Bank and the
FIU from time to time.
The following table sets forth the members of the committee on control and prevention of money laundering and financing of
terrorism:
Name
Atilio Dell’Oro Maini
Alejandra Naughton
Moira Almar
Gastón Ferera
Director, Chairman of the Committee and Corporate Compliance Officer with
the FIU
Director and Alternate Compliance Officer with the FIU
Position
Compliance & AML Officer
AML Manager
Banco Supervielle S.A.’s Risk Management Committee
The Risk Management Committee sets forth policies and limits to financial risks (including market risk, credit risk, liquidity
risk, interest rate risk, exchange risk and other risks) and submits to the Board of Directors the appropriate proposals. Furthermore, this
committee supervises the degree of correlation between the risks assumed and the risk profile set forth by the Board of Directors, and
analyzes and approves investment and funding policies.
The following table sets forth the members of the Risk Management Committee:
Name
Julio Patricio Supervielle
Emérico Alejandro Stengel
Alejandra Gladis Naughton
Javier Conigliaro
Position
Chairman of the Board, Chairman of the Committee
CEO
Director
CRO– Secretary
Banco Supervielle S.A.’s Senior Credit Committee
The Bank’s credit committee is formed by the Chairman of the Board, the CEO, the Deputy CEO, the Chief Risk Officer, the
Head of Treasury and Global Markets, the Head of Corporate Banking, the Credit Officer for Corporate Banking and Financial
Institutions, the Credit Officer for SMEs and the Commercial Manager of Personal and Businesses Banking.
Banco Supervielle S.A.’s other management committees
The Bank has other management committees, such as the Assets and Liabilities Committee and the Operational and
Reputational Risk Committee.
Management of Our Other Subsidiaries
The senior management of our other subsidiaries is in charge of the implementation and execution of those subsidiaries’ overall
short-term and strategic objectives and reports to the respective Boards of Directors of those companies, and functionally to Grupo
Supervielle’s CEO.
The CEO of Supervielle Seguros is Diego Squartini and the CEO of IOL invertironline is Diego Pizzulli.
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Set forth below are brief biographical descriptions of the CEOs of our other subsidiaries.
Diego Squartini has been Chief Executive Officer of Supervielle Seguros since 2013. He obtained a degree in Economics and
a Master’s degree in Business Management from Universidad Nacional de Cuyo. He also attended the Leadership Program at
Universidad Austral. From 2010 to 2013, he served as Regional Manager at Banco Supervielle S.A. From 2004 to 2010 he was the
Financial Manager at Banco Regional de Cuyo. From 2000 to 2004, he worked as Corporate Business Manager and from 1995 to 2000
as Branch Manager, also at Banco Regional de Cuyo.
Diego Pizzulli has been appointed Chief Executive Officer of IOL invertironline in July 2022. He has 16 years of experience
in the technology industry, developing strategies with a focus on innovation, managing digital products and businesses, and executing
projects. He was co-founder and CEO of Alta, a 100% digital broker. Before that, Diego was co-founder, CEO and Director of Cash-
online, an Argentine Fintech focused on online lending. Previously, he held various positions at Despegar.com. He earned a degree in
Economics from Universidad Católica Argentina and obtained an MBA from Universidad de San Andrés in Argentina.
Employees
As of December 31, 2023, 2022 and 2021, we had 3,663, 3,814 and 4,807 employees, including permanent and temporary
employees, respectively.
At the holding company we had 4 employees as of each of the years ended December 31, 2023, 2022 and 2021.
Banking business employees.
As of December 31, 2023, 2022 and 2021, the Bank had 3,196, 3,334 and 3,494 employees, respectively. As of December 31,
2023, 69.5% of the Bank’s employees were members of a national union in which membership is optional. The Bank has not experienced
any significant conflicts with this union.
All management positions in the Bank are held by non-union employees. As of December 31, 2023, the Bank’s employees
were under collective bargaining agreement No. 18/75, which regulates labor contracts of financial entities, while the Bank’s managers
were covered by general contractual labor laws. However, senior management, as is the case for all other banks in Argentina, is not
under a union’s supervision with respect to remuneration and other labor conditions and follows the applicable regulation in this respect.
The Bank currently does not maintain any pension or retirement program for its employees. In order to incentivize the
performance of its employees, the Bank implemented several incentive payment plans for its employees linked to performance and
results.
Insurance Segment employees
• As of December 31, 2023, 2022 and 2021, Supervielle Seguros had 120, 135 and 130 employees, respectively. At
December 31, 2023, 100% of its employees were under the collective bargaining agreement No. 264/95 Convenio
Colectivo de Empleados de Seguros y Reaseguros, and 12.1% of its employees were union members from the Sindicato
del Seguro de la República Argentina.
• As of December 31, 2023, 2022 and 2021, Supervielle Productores Asesores de Seguros had 34, 25 and 24 employees,
respectively. As of December 31, 2023, none of its employees were under the collective bargaining agreement.
InvertirOnline S.A.U. and Portal Integral de Inversiones S.A.U. employees:
• As of December 31, 2023, 2022 and 2021, InvertirOnline S.A.U. and Portal Integral de Inversiones S.A.U. had 169, 132
and 205 employees, respectively. As of December 31, 2023, none of these employees were under the collective bargaining
agreement Convenio Colectivo de Empleados de Comercio No.130/75 (Convenio de Comercio). Employees of
InvertirOnline S.A.U. and Portal Integral de Inversiones S.A.U. are not unionized and are covered only by general
contractual labor laws.
193
Supervielle Asset Management employees:
• As of December 31, 2023, 2022 and 2021, SAM had 12, 11 and 13 employees, respectively. As of December 31, 2023,
employees of SAM are not unionized and are covered only by general contractual labor laws. SAM currently does not
maintain any pension or retirement program for its employees. SAM incentivizes employee performance through several
incentive payment plans linked to performance and results.
Supervielle Agente de Negociación employees:
• As of December 31, 2023, 2022 and 2021, Supervielle Agente de Negociación had 3, 2 and 2 employees. Employees of
Supervielle Agente de Negociación are not unionized and are subject only to the applicable labor laws.
Espacio Cordial employees:
As of December 31, 2023, 2022 and 2021, Espacio Cordial had 91, 100 and 110 employees, respectively. As of December 31,
2023, 100% of Espacio Cordial’s employees were under the collective bargaining agreement No. 18/75, which regulates labor contracts
of financial entities, including the Bank’s. In addition, as of December 31, 2022, 86.8% of Espacio Cordial’s employees were union
members.
MILA employees:
As of December 31, 2023, 2022 and 2021, MILA had 34, 38 and 23 employees, respectively. As of December 31, 2023, 53%
of MILA’s employees were under the collective bargaining agreement Convenio Colectivo de Empleados de Comercio No.130/75
(Convenio de Comercio). The remaining 47% of employees were covered by general contractual labor laws. In addition, as of
December 31, 2022, 2.9% of MILA’s employees were union members.
Compensation
Labor relations in Argentina are governed by specific legislation, such as labor Law No. 20,744 and Collective Bargaining Law
No. 14,250, which, among other things, dictate how salary and other labor negotiations are to be conducted. Every industrial or
commercial activity is regulated by a specific collective bargaining agreement that groups together companies according to industry
sectors and by trade unions. While the process of negotiation is standardized, each chamber of industrial or commercial activity
negotiates the increases of salaries and labor benefits with the relevant trade union of such commercial or industrial activity. In the
banking sector, salaries are established on an annual basis through negotiations between the chambers that represent the banks and the
banking employees’ trade union. The National Labor Ministry mediates between the parties and ultimately approves the annual salary
increase to be applied in the banking activity. Parties are bound by the final decision once it is approved by the labor authority and must
observe the established salary increases for all employees that are represented by the banking union and to whom the collective
bargaining agreement applies.
Typically, negotiations took place during the first half of the year. But in recent years, with very high and increasing inflation
throughout the year, negotiation periods have been shortened and even include monthly provisions for reopening the agreement to
increase salaries following inflation
In addition, each company is entitled, regardless of union-negotiated mandatory salary increases, to give its employees
additional merit increases or variable compensation schemes.
Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
194
Item 7. Shareholders and Related Party Transactions
Item 7.A Major Shareholders
As of April 26, 2024, we had 456,722,322 outstanding shares of common stock (including shares held by the Company’s
treasury), consisting of 61,738,188 Class A shares and 394,984,134 Class B shares, all with a par value of Ps.1.00 per share. Each share
of our common stock represents the same economic interests, except that holders of our Class A shares are entitled to five votes per
share and holders of our Class B shares are entitled to one vote per share. As of March 31, 2024, we had approximately 12,100 holders
of record of our shares.
The table below sets forth information concerning the ownership of our Class A and Class B shares as of March 31, 2024
excluding shares held by the Company’s treasury, wich amounted to 14,050,492 as of March 31, 2024. We do not have voting rights in
connection with the shares held by the Company’s treasury, see “Item 16.E. Purchases of Equity Securities by the Issuer and Affiliated
Purchasers.” We are not aware of any other shareholder or holder of ADSs that beneficially owns 5.0% or more of any voting class of
our securities.
Shareholder Name
Julio Patricio Supervielle
Other
Total:
Class A Shares 5 Class B Shares 1
Votes
61,738,188
Vote
Percentage
of Capital
Stock
74,621,278 (*) 136,359,466 30.842057 % 383,312,218 55.62710 %
44.37290 %
305,762,364 69.157943 % 305,762,364
100.000 %
100.00 % 689,074,582
Percentage
of Votes
442,121,830
Total Shares
Total Votes
— 305,762,364
61,738,188 380,383,642
(*) Includes: (i) 4,678,278 Class B shares of common stock of Grupo Supervielle, par value Ps.1.00 per share, and (ii) 69,943,000
Class B shares of Grupo Supervielle represented by 13,988,600 ADSs.
As of December 31, 2023, we have identified 23 record holders of our ADSs (each representing the right to receive five Class B
shares) in the United States, and no record holders of our Class B shares in the United States. As of the same date, the record holders of
our ADSs located in the United States held in the aggregate approximately 3.5 million of our ADSs, representing approximately 6.2%
of our ADSs and 4.4% of our Class B shares.
Based on the Schedule 13G filed by Matías Jules Bernard Supervielle, Jacques Patrick Supervielle and Natasha Pilar Laurencia
Supervielle with the SEC on February 9, 2023, on January 30, 2023, Julio Patricio Supervielle gifted an aggregate of 2,181,400 ADSs,
each representing five Class B Shares (an equivalent of 10,907,000 Class B Shares) and an aggregate of 13,156,435 Class B Shares to
Matías Jules Bernard Supervielle, Jacques Patrick Supervielle and Natasha Pilar Laurencia Supervielle, who are the children of Julio
Patricio Supervielle. Based on the Schedule 13G filed by Matías Jules Bernard Supervielle, Jacques Patrick Supervielle and Natasha
Pilar Laurencia Supervielle with the SEC on February 9, 2024, as of the date of this annual report, (i) Matías Jules Bernard Supervielle
beneficially owns 8,497,495 Class B Shares, consisting of 4,861,830 Class B Shares and 3,635,665 Class B Shares represented by
727,133 ADSs, (ii) Jacques Patrick Supervielle beneficially owns 8,525,570 Class B Shares, consisting of 4,861,825 Class B Shares and
3,663,745 Class B Shares represented by 732749 ADSs, and (iii) Natasha Pilar Laurencia Supervielle beneficially owns 8,497,495 Class
B Shares, consisting of 4,861,830 Class B Shares and 3,635,665 Class B Shares represented by 727,133 ADSs.
Matías Jules Bernard Supervielle, Jacques Patrick Supervielle and Natasha Pilar Laurencia Supervielle are parties to a
Stockholder Agreement (the “Stockholder Agreement”), which contains, among other things, certain provisions relating to transfer of,
and coordination of the voting of, securities of the Group by the parties thereto. By virtue of the Stockholder Agreement and the
obligations and rights thereunder, Matías Jules Bernard Supervielle, Jacques Patrick Supervielle and Natasha Pilar Laurencia Supervielle
may be deemed a “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended.
Share Ownership of Banco Supervielle S.A.
As of April 26, 2024, the Bank had 834,347,791 outstanding shares of common stock, consisting of 930,371 Class A shares
and 833,417,420 Class B shares, all with a par value of Ps.1.00 per share. Each share of the Bank’s common stock represents the same
economic interests, except that holders of its Class A shares are entitled to five votes per share and holders of Class B shares are entitled
to one vote per share.
195
The following table sets forth information regarding the ownership of the Bank’s Class A and Class B shares as of April 26,
2024:
Shareholder Name
Grupo Supervielle S.A.
Sofital S.A.U.F.e.I.(1)
Other Shareholders
Total:
Class A
Class B
Shares 5 votes Shares 1 Vote Total Shares
Percentage of
Capital Stock Total Votes
830,698 809,486,229 810,316,927
23,181,255
23,131,588
849,609
799,603
930,371 833,417,420 834,347,791
49,667
50,006
97.120 % 813,639,719
2.7784 % 23,379,923
1,049,633
0.1018 %
100.0000 % 838,069,275
Percentage of
Votes
97.085 %
2.790 %
0.125 %
100.0000 %
(1) Sofital is a corporation organized under the laws of Argentina of which Grupo Supervielle owns 100%.
Item 7.B
Related Party Transactions
Other than as set forth below, we are not a party to any material transactions with, and have not made any loans to any
(i) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by us; (ii) associates (i.e., an
unconsolidated enterprise in which we have a significant influence or which has significant influence over us); (iii) individuals owning,
directly or indirectly, an interest in our voting power that gives them significant influence over us, as applicable, and close members of
any such individual’s family (i.e., those family members that may be expected to influence, or be influenced by, that person in their
dealings with us, as applicable); (iv) key management personnel (i.e., persons that have authority and responsibility for planning,
directing and controlling our activities, including directors and senior management of companies and close members of such individual’s
family); or (v) enterprises in which a substantial interest is owned, directly or indirectly, by any person described in (iii) or (iv) over
which such a person is able to exercise significant influence nor are there any proposed transactions with such persons. For purposes of
this paragraph, this includes enterprises owned by our directors or major shareholders that have a member of key management in
common with us, as applicable. In addition, “significant influence” means the power to participate in the financial and operating policy
decisions of the enterprise, but means less than control. Shareholders beneficially owning a 10% interest in our voting power are
presumed to have a significant influence on us.
Management Services
To the extent that there are no conflicts of interest, we lend management services to our subsidiaries, the Bank, SAM, Sofital,
and Espacio Cordial. We also lended management services to IUDÚ and Tarjeta until their merge into the Bank. Our services include:
financial and commercial advisory services, fiscal planning and optimization, defining auditing policies, developing and evaluating
upper management, elaborating annual budgets, planning and developing complementary activities and defining the mission of related
companies and policies related to social responsibility. These services are provided pursuant to agreements that provide that our
subsidiaries will indemnify us for any claim, damage, liability, tax, cost and expense incurred or suffered by us in connection with
financial transactions in which such subsidiaries were engaged. The management’s fees are equal to the ordinary and extraordinary costs
incurred plus a mark-up of 20% plus 21% VAT. If the services to be provided are of an extraordinary nature, we have the right to
additional compensation, the amount of which shall be determined in each case.
The following table sets forth information regarding fees received from our subsidiaries and related parties for our management
services for the years ended December 31, 2023 and 2022.
Bank
Tarjeta
SAM
Sofital
IUDÚ
Espacio Cordial
Total
196
Grupo Supervielle S.A.
Year ended December 31,
2022
2023
(in thousands of Pesos, plus VAT)
740,164
—
10,042
1,021
—
6,006
757,233
1,402,035
3,341
11,335
1,149
112,178
6,789
1,536,827
Capital Contribution
On March 4, 2021, Grupo Supervielle made a contribution of Ps.6,832,612 to the capital of Modo, as a result of which Grupo
Supervielle subscribed 5,641,254 book-entry ordinary shares of Modo, which have a par value of Ps.1 per share and confer the right to
one vote per share. On the same date, Grupo Supervielle made a contribution of Ps.29,000,000 to Bolsillo Digital as a result of which
Grupo Supervielle subscribed 29,000,000 book-entry ordinary shares of Bolsillo Digital, which have a par value of Ps.1 per share and
confer the right to one vote per share.
On April 30, 2021, Grupo Supervielle and Sofital made a joint capital contribution of Ps.30,000,000 to Supervielle
Productores Asesores de Seguros, as a result of which Grupo Supervielle and Sofital subscribed 30,000,000 book-entry ordinary
shares of Supervielle Productores Asesores de Seguros, respectively, which have a par value of Ps.1 per share and confer the right to
one vote per share.
On November 24, 2021, Grupo Supervielle and the Bank made capital contributions of Ps.25,000,000 and Ps.475,000,000,
respectively, to IUDÚ, as a result of which Grupo Supervielle and the Bank subscribed 1,605,985 and 30,513,709 book-entry ordinary
shares of Supervielle Productores Asesores de Seguros, respectively, which have a par value of Ps.1 per share and confer the right to
one vote per share.
On November 29, 2021, Grupo Supervielle made a capital contribution of U.S.$500,000 to IOL Holding to be applied to
working capital and investments.
On January 28, 2022, Grupo Supervielle and the Bank made capital contributions of Ps.25,000,000 and Ps. 475,000,000,
respectively, to IUDÚ, as a result of which Grupo Supervielle and the Bank subscribed 1,762,666 and 33,490,657 book-entry ordinary
shares of IUDÚ, respectively, which have a par value of Ps.1 per share and confer the right to one vote per share.
On February 25, 2022, Grupo Supervielle and the Bank made capital contributions of Ps.12,500,000 and Ps.237,500,000,
respectively, to IUDÚ, as a result of which Grupo Supervielle and the Bank subscribed and 18,347,111 book-entry ordinary shares of
IUDÚ, respectively, which have a par value of Ps.1 per share and confer the right to one vote per share.
On March 30, 2022, Grupo Supervielle and the Bank approved capital contributions of Ps.62,500,000 and Ps.1,187,500,000,
respectively, to IUDÚ to be allocated to working capital. On the same date, IUDÚ approved a capital contribution of Ps.150,000,000
to Tarjeta to be allocated to working capital.
On June 27, 2022, Grupo Supervielle and the Bank made capital contributions to IUDÚ of Ps.50 million and Ps. 950 million,
respectively, to be allocated to working capital. On the same date, IUDÚ approved a capital contribution of Ps. 250 million to Tarjeta
to be allocated to working capital.
On July 8, 2022, Grupo Supervielle approved a capital contribution of U.S.$200,000 or its equivalent in Uruguayan Pesos to
its subsidiary IOL Holding to be applied to working capital and investments.
On August 16, 2022, Grupo Supervielle approved a capital contribution of Ps.70,165,000 or its equivalent in Pesos to its
subsidiary IOL Invertironline to be applied to working capital and investments.
On August 30, 2022, Grupo Supervielle and the Bank made capital contributions to IUDÚ of Ps.37.5 million and Ps. 712.5
million, respectively, to be allocated to working capital.
On September 28, 2022, Grupo Supervielle and the Bank made capital contributions to IUDÚ of Ps.12.5 million and Ps.
237.5 million, respectively, to be allocated to working capital.
On November 30, 2022, Grupo Supervielle and the Bank made capital contributions to IUDÚ of Ps. 110 million and Ps. 2.1
billion, respectively, mainly to cancel IUDÚ’s financial obligations with the Bank.
On February 23, 2023, the Bank made a capital contribution to Bolsillo Digital of Ps. 100 million. On the same date, the
Bank made a capital contribution to Modo of Ps. 92.4 million.
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On June 28, 2023, the Bank made a capital contribution to Bolsillo Digital of Ps. 75 million.
Capital Reduction
On July 28, 2023, in accordance with the resolution adopted in the minutes of the Extraordinary General Meeting of Micro
Lending S.A.U., it was resolved to voluntarily reduce the share capital of Micro Lending S.A.U. by up to the amount of 111,756,079
shares along with its corresponding proportion from the capital adjustment account by the amount of 288,243,921 shares.
Merge by absorption
On December 1, 2023, the Central Bank approved the merger of IUDÚ and Tarjeta into the Bank, and therefore IUDÚ and
Tarjeta were merged into the Bank, effective January 2023. These mergers allowed us to simplify the Group’s corporate structure and
complete the Group’s corporate integration plans which began in September 2022. As a result, Grupo Supervielle S.A. received
4,783,920 class B shares of Banco Supervielle S.A. with 4,422,016 shares corresponding to an exchange ratio of 0.09497225 per IUDÚ
and 361,904 shares corresponding to an exchange ratio of 0.03375751 per Tarjeta.
Transfer of shares
On June 30, 2021, Grupo Supervielle transferred its 41,747,121 common shares of Modo to its subsidiary Banco Supervielle
S.A. These shares have a par value of Ps.1 and Banco Supervielle S.A. is entitled to 1 vote for each share.
On August 5, 2021, Grupo Supervielle transferred its shares of Bolsillo Digital, which amount to Ps.112,886,316.43 to its
subsidiary Banco Supervielle S.A. as part of Grupo Supervielle’s commercial strategy for its payment services business.
On March 4, 2024, Grupo Supervielle made an offer to Espacio Cordial for the purchase of all the shares that Espacio Cordial
owns in Sofital S.A.U.F. and I., totaling 689,238 ordinary shares, non-transferable and with a nominal value of one Peso, each with
one vote per share, representing 3.20% of the total shares of Sofital S.A.U.F. and I.
Operator Services Agreement with the Bank
In March 2016, we entered into an agreement with the Bank pursuant to which the Bank will provide accounting,
administrative, legal and treasury services to us. The Bank’s services include, among others: accounting records of transactions and
preparation of financial statements, management of institutional relations, structuring and management of funding instruments, liquidity
investment operations management, maintenance of our corporate records, management of compliance with disclosure requirements,
registration of corporate acts and compliance with information requirements. Pursuant to this agreement, we paid to the Bank in 2023 a
total amount of Ps.2,878,858. The term of the agreement is one year and may be renewed automatically at maturity for equal and
successive periods. This agreement is renewed automatically and it is in force as of the date of this annual report.
Trademark Licenses
In 2013, we signed agreements with Espacio Cordial and IUDÚ granting them licenses to use certain of our trademarks
(including our trademarks for “Cordial,” “Carta App” and “Tienda Supervielle.” We granted these trademark licenses to these
subsidiaries to enhance the marketing of certain their products and services related to insurance, health, tourism, credit cards and loans,
among others. As a result of the merge between IUDÚ and the Bank, the agreement entered into with IUDÚ was terminated at the
beginning of 2023. Pursuant to these agreements, we received fees from these companies in 2023 in a total amount of Ps.878,396.
Financial Loans
Some of our directors and the directors of the Bank have been involved in certain credit transactions with the Bank as permitted
by Argentine law. The Argentine General Corporations Law and the Central Bank’s regulations allow directors of a limited liability
company to enter into a transaction with such company if such transaction follows prevailing market conditions. Additionally, a bank’s
total financial exposure to related individuals or legal entities is subject to the regulations of the Central Bank. Such regulations set
limits on the amount of financial exposure that can be extended by a bank to affiliates based on, among other things, a percentage of a
bank’s RPC.
198
The Bank is required by the Central Bank to present to its Board of Directors, on a monthly basis, the outstanding amounts of
financial assistance granted to directors, controlling shareholders, officers and other related entities, which are transcribed in the minute
books of the Board of Directors. The Central Bank establishes that the financial assistance to directors, controlling shareholders, officers
and other related entities must be granted on an equal basis with respect to rates, tenor and guarantees as loans granted to the general
public.
The financial assistance granted to our directors, officers and related parties by the Bank was granted in the ordinary course of
business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable
transactions with other non-related parties, and did not involve more than the normal risk of collectability or present other unfavorable
features.
The following table presents the aggregate amounts of total consolidated financial exposure of the Bank to related parties, the
number of recipients, the average amounts as of the end of the periods indicated and the single largest exposures during the reporting
period:
As of December 31,
2023
2022
(in thousands of Pesos,except
number of recipients)
1,778,169
80
68
12
22,227
1,387,195
2,098,100
80
70
10
26,227
1,115,633
Aggregate total financial exposure
Number of recipient related parties
(a) individuals
(b) companies
Average total financial exposure
Single largest exposure during the period
Item 7.C
Interests of Experts and Counsel
Not applicable.
Item 8. Financial Information
Item 8.A Consolidated Statements and Other Financial Information.
See Item 8 and our audited consolidated financial statements included in this annual report.
199
Legal Proceedings
As of the date of this annual report, we are not a party to any legal or administrative proceedings which outcome is likely to
have a material adverse effect on our results of operations.
The Bank is party to collection proceedings and other legal or administrative actions initiated in the normal course of their
businesses, including certain class actions initiated against a number of banks and financial companies, including us, by public and
private organizations. The class action lawsuits involving the Bank are related to certain allegations of overcharging on life insurance
products, interest rates and administrative charges, fees on the sale price of foreign currency, administrative charges on savings accounts,
consumer loans and credit cards, inadequacy of the contingency risk charge on checking accounts, as well as debits of fees or charges
from savings accounts and/or credit cards of customers or former customers, among others. These types of class actions were brought
against every financial entity in Argentina. Some of these lawsuits have been settled by the parties out of court. These settlements have
typically involved an undertaking by the financial institution to adjust the fees and charges.
In 2021, an additional class action was brought against InvertirOnline S.A.U. in relation to an alleged use by InvertirOnline
S.A.U. of liquid funds of its clients without requesting their prior consent or making yields resulting from such operations available to
such clients.
Supervielle Seguros S.A. has been summoned as a third party in a legal proceeding related to life insurance. The outcomes of
these proceedings are not likely to have a material adverse effect on our results of operations.
As of the date of this annual report, our other subsidiaries are not party to any other class action.
Dividends
In accordance with the Argentine General Corporations Law, our bylaws and CNV regulations, we may make one or more
declarations of dividends with respect to any year, including anticipated dividends, out of our distributable net income (ganancias
líquidas y realizadas) as reflected in our consolidated balance sheet, or consolidated special interim balance sheet in case of anticipated
dividends.
Declaration and payment of dividends to all holders of each class of our shares (Class A, Class B shares and preferred shares
(to the extent any such shares are outstanding)), to the extent funds are legally available, is determined by all of our shareholders with
voting rights (i.e., our Class A and Class B shareholders) at the annual ordinary shareholders’ meeting. At such annual ordinary
shareholders’ meeting, our Class A shares will be entitled to five votes each and our Class B shares will be entitled to one vote each. It
is the responsibility of our Board of Directors to make a recommendation to our shareholders with respect to the amount of dividends
to be distributed. The Board of Directors’ recommendation will depend on a number of factors, including but not limited to, our operating
results, cash flow, financial condition, capital position, legal requirements, contractual and regulatory requirements, and investment and
acquisition opportunities. As a general rule, the Board of Directors will favor efficient use of capital in its recommendation-making
process. Thus, the Board will recommend reinvesting earnings when there are investment opportunities, or it will recommend
distributing dividends when there is excess capital.
However, shareholders are ultimately entitled to overrule the recommendation of the Board of Directors through the affirmative
vote of the absolute majority of the present votes at an ordinary shareholders’ meeting.
The Board of Directors may also decide and pay anticipated dividends. In such instance, each individual director and member
of the Supervisory Committee will be jointly and severally liable for the payment of such dividends if our retained earnings for the year
for which such dividends were paid is insufficient to cover the payment of such dividends.
Dividends are distributed on a pro rata basis according to the number of ordinary shares held by the shareholder. All shares of
our capital stock rank pari passu with respect to the payment of dividends, regardless of class. Under CNV regulations, cash dividends
must be paid to the shareholders within 30 days of their approval. In the case of stock dividends, shares are required to be delivered
within three months of our receipt of notice of authorization by the CNV for the public offering of such shares. The right of shareholders
to demand payment of dividends shall toll three years after the date on which we first make them available to shareholders. Any
dividends that are not claimed during this period are deemed extraordinary gains by us.
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In accordance with Argentine law, our bylaws and CNV regulations, we are required to allocate to our legal reserve 5% of
our yearly income, plus or minus the results of prior years, until our legal reserve equals 20% of our adjusted capital stock. Under the
Argentine General Corporations Law and our bylaws, our yearly net income (as adjusted to reflect changes in prior results) is allocated
in the following order: (i) to comply with the legal reserve requirement; (ii) to pay dividends on preferred stock, which shall be applied
first to pending and unpaid accumulated dividends; and (iii) the remainder of the net income for the year may be distributed as additional
dividends on preferred stock, if any, or as dividends on common stock, or may be used for voluntary or contingent reserves, or as
otherwise decided by our shareholders at the annual ordinary shareholders’ meeting.
Holders of ADSs will be entitled to receive any dividends payable in respect of our underlying Class B shares. Exchange
controls currently in place impair the conversion of dividends, distributions, or the proceeds from any sale of Class B shares, as the case
may be, from Pesos into U.S. dollars and the remittance of the U.S. dollars abroad, therefore restricting the ability of foreign shareholders
holders of ADSs to receive dividends in U.S. dollars abroad. In particular, with respect to the proceeds of any sale of Class B shares
underlying the ADSs, as of the date of this annual report, the conversion from Pesos into U.S. dollars and the remittance of such U.S.
dollars abroad is subject to prior Central Bank approval (as described below), although access to the MLC to pay dividends to non-
resident shareholders may be granted, subject to certain conditions. See “Item 4.B. Business Overview—Liquidity and Solvency
Requirements—Requirements Applicable to Dividend Distribution.” The ADS deposit agreement provides that the Depositary will
convert cash dividends received by the ADS depositary in Pesos to U.S. dollars: if so permitted by, and subject to the limits set forth in,
applicable foreign exchange regulations in place at such time and, after deduction or upon payment of fees and expenses of the ADS
depositary and deduction of other amounts permitted to be deducted from such cash payments in accordance with the ADS deposit
agreement (such as for unpaid taxes by the ADS holders in connection with personal asset taxes or otherwise), will make payment to
holders of the ADSs in U.S. dollars. If dividend payments cannot be made in U.S. dollars outside of Argentina, the transfer outside of
Argentina of any funds collected by foreign shareholders in Pesos in Argentina may be subject to certain restrictions. See “Item 10.D.
Exchange Controls” and “Item 3.D. Risk Factors.”
In accordance with the provisions of Title IV, Chapter III, Section 3, Subsection b) of the Regulations of the CNV (Restated
Text 2013), we have made use of the option to absorb the accumulated negative results that were generated as a consequence of the
inflation adjustment by application of the IAS 29, subject to the ratification of the general shareholders’ meeting.
Our annual ordinary and extraordinary shareholders’ meeting and board of directors meeting dated April 19, 2024 resolved to
release the voluntary reserve for dividends distribution, and in accordance with the provisions of General Resolution No. 777/18 of the
CNV, a cash dividend of Ps.19,469,438,271.64 is expected to be paid to our shareholders on April 29, 2024, or on such later date as
may be determined by the applicable regulations of the jurisdiction where our shares are listed. The amount of dividends to be distributed
is equivalent to (i) 4.403636498030% of the Company’s capital (excluding shares held by the Company’s treasury) as of the date of this
annual report, (ii) Ps.44.03636498030 for each outstanding share, and (iii) Ps.220.18182490152 for each ADS.
The dividends to be distributed were originated from profits from the fiscal year ended December 31, 2018 and, therefore, are
subject to withholding of 7% according to the provisions of the Argentine Income Tax Law, ordered text Decree No. 824/2019.
Dividends to be paid will be subject to the withholding, in the relevant cases, of the amounts paid for the fiscal year ended December
31, 2023 by the Company in its capacity as Substitute Person Responsible for the Personal Assets Tax, in the case of those shareholders
that are subject to that tax, pursuant to the terms of the last paragraph of the provisions incorporated pursuant to Law No. 25,585
following section 25 of Law No. 23,966. For more information on current exchange controls applicable to the payment of dividends,
see “Item 3.D. Risk Factors—Risks Relating to Our Class B Shares and the ADSs—Restrictions on transfers of foreign exchange and
the repatriation of capital from Argentina may impair your ability to receive dividends and distributions on, and the proceeds for any
sale of, the Class B shares underlying the ADSs.”
We are a holding company, and in addition to certain management fees we collect from some of our subsidiaries, our main
source of cash to pay dividends are the dividends we receive from our subsidiaries. We therefore depend on the results of operations,
cash flow and distributable income of our operating subsidiaries.
We and our subsidiaries are subject to contractual, legal and regulatory requirements affecting our ability to pay dividends.
On January 31, 2020, the Central Bank issued Communication “A” 6886, pursuant to which financial entities must obtain prior
approval of the Central Bank in order to distribute dividends. See “Item 4.B. Business Overview—Liquidity and Solvency
Requirements—Requirements Applicable to Dividend Distribution.”
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Although distribution of dividends by the Bank has been authorized by the Central Bank at times, no assurance can be given
that in the future the Central Bank will not limit the Bank’s ability to distribute dividends approved by its shareholders at the annual
ordinary shareholders’ meeting or that such authorization will be for the full amount of dividends that the Bank may distribute pursuant
to applicable regulation. On March 9, 2023, the Central Bank issued Communication “A” 7719 which sets forth that, from April 1, 2023,
the Central Bank revoked the suspension of the distribution of dividends and that, from the same date until December 12, 2023, any
financial entities that have been authorized by the Central Bank may distribute dividends in six equal, monthly and consecutive
installments for up to 40% of the amount that would have corresponded pursuant to Communication “A” 6886. However, by means of
Communication “A” 7984 dated March 21, 2024, the Central Bank extended such date until December 31, 2024 and increased the
amount authorized to be distributed by 60% of the amount that would have corresponded.
We are required to pay personal assets tax corresponding to Argentine and foreign individuals and foreign entities for the
holding of our shares at December 31 of each year. We pay this tax on behalf of our shareholders, whenever applicable, and are entitled,
pursuant to the Personal Assets Tax Law, to seek reimbursement of such paid tax from the applicable shareholders in various ways,
including by withholding dividends. See “Item 10.E. Taxation—Material Argentine Tax Considerations—Income Tax—Personal assets
tax.”
In 2023 and 2022, we received the following dividend payments in cash from our subsidiaries, reported in the currency at the
end of the reporting period: (i) Ps. 3,133.8 million in 2023 and Ps.2,974.3 million in 2022 from SAM, (ii) Ps. 1,579.8 million in 2023
and Ps. 2,966.0 million in 2022 from Supervielle Seguros, (iii) Ps. 211.5 million in 2023 and Ps. 281.8 million in 2022 from Sofital, (iv)
Ps. 369.6 million in 2022 from SAN, and (v) Ps. 535.9 million in 2023 from MILA. We did not receive dividend payments from the
Bank or our other subsidiaries during 2023 and 2022.
Grupo Supervielle paid dividends to its shareholders in 2023 and 2022, totaling approximately Ps.0 million and
Ps.1,531.7 million, respectively. As described in Note 24 to our audited consolidated financial statements we may pay dividends to the
extent that we have distributable retained earnings and distributable reserves calculated in accordance with the rules of the Argentine
Central Bank. Therefore, retained earnings included in our audited consolidated financial statements may not be wholly distributable.
Distribution of Earnings
On March 6, 2024, our Board of Directors proposed to the ordinary and extraordinary shareholders’ meeting held on April 19,
2024 to distribute retained earnings from the fiscal year ended December 31, 2023, as follows: (i) Ps. 5,632,951 thousand to Legal
Reserve, (ii) Ps. 12,840,783 thousand to Reserve for the distribution of dividends in the future, the Board being authorized to determine
the time of such distribution, and (iii) Ps. 32,889,397 to Optional Reserve for future investments.
After the partial release of the voluntary reserves for the distribution of future dividends approved in the ordinary and
extraordinary shareholders’ meeting held on April 19, 2024, as of the date of this annual report Grupo Supervielle’s net worth is
composed as follows:
Capital Stock
Capital Adjustment
Paid in Capital
Own Shares in Portfolio
Comprehensive Adjustment os Treasury Shares
Cost of Own Shares in Portfolio
Legal Reserve
Other Reserves
Other Comprehensive Income
Total shareholders’ equity attributable to the owners of the parent under the rules of the Argentine
Central Bank
As of December 31,
2023
(In millions of Pesos)
442,672
27,960,909
254,538,548
14,050
2,944,946
(5,166,412)
5,632,951
37,197,005
6,381,108
329,945,777
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Item 8.B
Significant Changes
In addition to the information set forth in this section, additional information on significant changes can be found in “Item 3.D.
Risk Factors” and in “Item 5.A. Operating Results.”
Item 9. The Offer and Listing
Item 9.A Offer and Listing Details
The information set forth in Exhibit 2(d), “Description of Securities Registered under Section 12(b) of the Exchange Act” is
incorporated herein by reference.
Item 9.B
Plan of Distribution
Not applicable.
Item 9.C Markets
On May 18, 2016, we completed our IPO. Since May 19, 2016, our ADSs representing Class B shares have been trading on
the NYSE under the symbol ‘SUPV.’ Our Class B shares are currently traded on the ByMA (formerly MERVAL and, ByMA since
April 2017) and MAE (since May 2016) under the symbol ‘SUPV.’
On December 29, 2016, the CNV approved the constitution of ByMA as a new stock market, as a spin-off of certain assets of
the MERVAL relating to its stock market operations and capital contributions by the Buenos Aires Stock Exchange. Following such
authorization, and effective April 17, 2017, all securities listed on MERVAL have been automatically transferred to ByMA, as successor
of MERVAL’s activities. Additionally, the delegation of powers granted by MERVAL to the Buenos Aires Stock Exchange will apply
to ByMA, thus, the Buenos Aires Stock Exchange will continue to carry out the activities referred to in paragraphs b), f) and g) of
Article 32 of the Argentine Capital Markets Law on behalf of ByMA, including the authorization, suspension and cancelling of the
listing or trading of securities and acting as arbitration court of such market for all matters concerning listed companies’ relationship
with shareholders and investors.
Item 9.D
Selling Shareholders
Not applicable.
Item 9.E
Dilution
Not applicable.
Item 9.F
Expenses of the Issue
Not applicable.
Item 10. Additional Information
Item 10.A Share Capital
Not applicable.
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Item 10.B Memorandum and Articles of Association
The information set forth in Exhibit 2(d), “Description of Securities Registered under Section 12(b) of the Exchange Act” is
incorporated herein by reference.
Item 10.C Material Contracts
No material contracts outside the ordinary course of business have been entered into during the last 2 years.
Item 10.D Exchange Controls
For the purposes of this section, (i) “foreign currency” means any currency other than the Argentine peso; and (ii) “Foreign Exchange Regulations”
means the foreign exchange regulations issued by the Central Bank pursuant to Communication “A” 7,953 as amended and supplemented from time
to time.
Specific provisions for income from the foreign exchange market
Entry and settlement of the proceeds from the export of goods through the foreign exchange market
The Argentine exchange regime establishes that proceeds from exports of goods must be entered and settled in Argentine pesos through the foreign
exchange market within 5 business days following their collection.
Decree No. 28/2023 published on December 13, 2023, established in connection with: (i) the export countervalue of the services included in subsection
c) of paragraph 2 of Article 10 of Law No. 22,415 (“Customs Code”) and its amendments (which refers to services rendered in the country, with
effective use or exploitation carried out abroad); and (ii) the countervalue of the export of goods included in the Common Nomenclature of MERCOSUR
(“NCM”), including pre-financing and/or post-financing of exports from abroad or a liquidation advance; 80% of such countervalue must be brought
into the country in foreign currency and/or negotiated through the foreign exchange market, and for the remaining 20% must be carried out through
purchase and sale transactions with negotiable securities acquired with liquidation in foreign currency and sold with liquidation in local currency.
In the case of funds received or credited abroad, the deposit and liquidation for the amount equivalent to the usual expenses debited by the financial
entities abroad for the transfer of funds to the country may be considered as completed.
There are some exceptions to the obligation to settle through the foreign exchange market, including, but not limited to: (i) collections from exporters
under the Regime for the Promotion of Knowledge Economy Exports (established by Decree No. 679/2022); and (ii) certain collections from exports
of services by physical persons, as established by Article 2.2.2.2.1. of the Ordered Text.
Amounts collected in foreign currency for claims related to exported goods must also be entered and settled in Argentine pesos in the foreign exchange
market, up to the amount of the insured exported goods.
The exporter must designate a financial entity to follow up each export transaction. The obligation to enter and settle foreign currency through the
foreign exchange market corresponding to a shipment permit will be considered satisfied when the financial entity designated to follow up certifies
that the entry and settlement have taken place.
Local charges for exports under the regime of farms to foreign-flagged means of transport
With respect to local charges for exports under the regime of farms to foreign-flagged means of transport, it will be considered as fully or partially
compliant with the follow-up of the shipping permit, for an amount equivalent to that paid locally in Argentine pesos and/or in foreign currency to the
exporter by a local agent of the company owning the foreign-flagged means of transport, provided that the following conditions are met:
(i) The documentation shows that the delivery of the exported goods has taken place in the country, that the local agent of the company owning
the foreign-flagged means of transport has made the payment to the exporter locally and the currency in which such payment was made.
(ii) The company has a certification issued by a financial entity stating that the referred local agent would have had access to the foreign exchange
market for the equivalent amount in foreign currency that is intended to be imputed to the permit. The financial entity issuing such certification
must previously verify compliance with all the requirements established by the exchange regulations for access to the foreign exchange
market by Article 3.2.5.2. of Exchange Regime, with the exception of the provisions of Article 3.16.1 of such regulations and have a sworn
statement from the referred local agent stating that it has not transferred and will not transfer funds abroad for the proportional part of the
transactions included in the certification.
(iii) In the event that the amounts have been received in the country in foreign currency, the company has the certification of settlement of the
funds in the foreign exchange market.
The local agent of the company owning the foreign-flagged means of transport must not have used this mechanism for an amount exceeding U.S.$
2,000,000 in the charged calendar month.
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Obligation to settle foreign currency from exports of services
Payments received for the provision of services by residents to non-residents must be entered and settled through the foreign exchange market within
5 business days from the date of its collection abroad or in the country or its crediting to foreign accounts.
In the case of funds received or credited abroad, the collection and liquidation may be considered completed for the amount equivalent to the usual
expenses debited by the financial entities abroad for the transfer of funds to the country.
The aforementioned provisions of Decree No. 28/2023 are also applicable to the export of services (see “—Entry and settlement of the proceeds from
the export of goods through the foreign exchange market”).
Application of export revenues
The Argentine exchange regime authorizes the application of export revenues to the repayment of: (i) pre-financing of exports and export financing
granted or guaranteed by local financial entities; (ii) pre- financing of exports and export advances settled in the foreign exchange market, provided
that the corresponding transactions have been executed through public deeds or public registries; (iii) financial indebtedness under contracts entered
into prior to August 31, 2019 that provide for the cancellation thereof through the application abroad of export funds; (iv) other foreign financial
indebtedness subject to certain requirements as set forth in Articles 7. 9 and 7.10 of the Exchange Regime; and (v) advances, pre-financing and post-
financing from abroad with partial liquidation under the provisions of Decrees No. 492/2023, No. 549/2023, No. 597/2023 and No. 28/2023. Likewise,
it allows keeping export revenues abroad to guarantee the payment of new indebtedness, provided certain requirements are met.
Financial indebtedness with foreign countries
According to Article 2.4 of the Exchange Regime for resident debtors to be able to access the foreign exchange market to repay financial indebtedness
with foreign countries disbursed as from September 1, 2019, the loan proceeds must have been settled through the foreign exchange market and the
transaction must have been declared in the External Assets and Liabilities Survey (“Relevamiento de Activos y Pasivos Externos”). Accordingly,
although settlement of the loan proceeds is not mandatory, failure to settle will preclude future access to the foreign exchange market for repayment
purposes.
Access to the foreign exchange market to make such payments more than three days in advance of the due date is, as a general rule, subject to the
BCRA's prior authorization. Prepayments made with funds from new foreign loans duly settled or in connection with debt refinancing or liability
management processes may be exempt from such prior authorization from the BCRA to the extent they comply with several requirements as set forth
in Article 3.5 of the Exchange Regime.
Until December 31, 2024, prior BCRA approval is required for local residents to access the foreign exchange market to make principal and interest
payments under cross-border financial borrowings with related parties. Certain specific exceptions apply and are included in item 3.5.6. of the Ordered
Text. (unless the loan proceeds were settled through the foreign exchange market after October 1, 2020, and the loan has an average life of at least 2
years).
Specific provisions on access to the foreign exchange market
General requirements
As a general rule, and in addition to the specific rules of each transaction for access, certain general requirements must be complied with by a local
company or individual to access the foreign exchange market for the purchase of foreign currency or its transfer abroad (i.e., payments of imports and
other purchases of goods abroad; payment of services rendered by non-residents; distribution of profits and dividends; payment of principal and interest
on foreign indebtedness; interest payments on debts for the import of goods and services, among others) without requiring prior approval from the
BCRA. In this regard, the local company or individual must file a sworn statement stating that:
(a) (i) At the time of access to the foreign exchange market, all of its foreign currency holdings in the country are deposited in accounts in financial
institutions, and (ii) at the beginning of the day on which it requests access to the foreign exchange market, it does not hold Argentine certificates
of deposit (for its acronym in Spanish, “CEDEARs”) representing foreign shares and/or available liquid foreign assets that together have a value
greater than U.S.$ 100,000 (funds deposited abroad that constitute reserve or guarantee funds under debt contracts with foreign countries, or funds
granted as guarantee for derivatives arranged abroad are excluded from this limit). If the customer is a local government, foreign currency holdings
deposited with local financial institutions must also be accounted up to December 31, 2024. For these purposes, "liquid foreign assets" are
considered to be holdings of banknotes and coins in foreign currency, cash in gold coins or bars of good delivery, demand deposits in financial
institutions abroad and other investments that allow immediate availability of foreign currency. On the other hand, funds deposited abroad that
cannot be used by the client because they are reserve or guarantee funds created by virtue of the requirements set forth in foreign debt contracts or
funds created as guarantee for derivative transactions arranged abroad should not be considered as liquid foreign assets available. In the event that
the client is a local government and exceeds the established limit, the institution may also accept an affidavit from the client stating that the excess
was used to make payments for the foreign exchange market through swap and/or arbitrage operations with the deposited funds.
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(b) It undertakes the obligation to settle in the foreign exchange market, within five business days of its availability, the funds received abroad from
the collection of loans granted to third parties, time deposits, or the sale of any type of asset, to the extent that the asset subject to the sale was
acquired, the deposit constituted or the loan granted after May 28, 2020.
(c) On the date of access to the foreign exchange market and in the previous 90 calendar days in the case of securities issued under Argentine Law and
in the 180 calendar days prior in the case of transactions that are not carried out with securities issued under Argentine Law, it: (i) did not arrange
sales in the country of securities with settlement in foreign currency; (ii) did not exchange securities issued by residents for foreign assets, (iii) did
not transfer securities to depository entities abroad, (iv) did not acquire in the country securities issued by non-residents with settlement in Argentine
pesos, (v) did not acquire CEDEARs representing foreign shares, (vi) did not acquire securities representing private debt issued in foreign
jurisdiction, and (vii) did not deliver funds in local currency or other local assets (except funds in foreign currency deposited in local financial
institutions) to any entity (whether physical or legal, resident or non-resident, related or not), receiving as prior or subsequent consideration, directly
or indirectly, by itself or through a related, controlled or controlling entity, foreign assets, crypto-assets or securities deposited abroad.
(d) It undertakes the obligation not to enter into any of the transactions described in paragraph (c) above from the time it requests access to the foreign
exchange market and for 90 calendar days thereafter in the case of securities issued under Argentine Law and for the following 180 calendar days
in the case of transactions that are not carried out with securities issued under Argentine Law.
(e) Article 3.16.3 of the Exchange Regime adds that, in the event that the customer requesting access to the exchange market is a legal entity, in order
for the transaction not to be covered by the requirement of prior approval by the BCRA must be submitted to the corresponding financial institution:
(A) a sworn statement evidencing that within the term provided in section 3.16.3.4. (180 days prior to accessing the foreign exchange market) it
has not delivered in the country any funds in local currency or other liquid local assets, except funds in foreign currency deposited in local
financial institutions, to any person or legal entity, except those directly associated with regular transactions in the course of its business (this
sworn statement shall be called "Sworn Statement - Section 1"); or
(B)(i) as required by Article 3.16.3.3. of the Exchange Regime, an affidavit stating details of the physical or legal persons exercising a direct control
relationship over the client and of other legal persons with which it is part of the same economic group. In determining the existence of a direct
control relationship, the types of relationships described in item 1.2.2.1 of the Large Exposures rules should be considered. Companies sharing
a control relationship of the type defined in items 1.2.1.1 and 1.2.2.1 of the Large Exposures rules should be considered as members of the
same “economic group” (the “Economic Group Description Affidavit”); and (ii) that on the day on which it requests access to the market and
in the 180 days prior to that date, it has not delivered in the country any funds in local currency or other liquid local assets, except funds in
foreign currency deposited in local financial institutions, to any individual or legal entity that exercises a direct control relationship over it, or
to other companies with which it is part of the same economic group, except those directly associated with regular transactions between residents
for the acquisition of goods and/or services (the "Sworn Statement of Non-Delivery of Pesos to the Economic Group"). It also provides that in
the case of individuals or legal entities exercising a direct control relationship, the term of 180 calendar days shall only be applicable for
deliveries made as from April 21, 2013, and the term of 90 calendar days shall be applicable for deliveries made prior to that date. While for
legal entities that are part of the same economic group but did not exercise a direct control relationship over the customer as of May 11, 2023,
the provisions shall be applicable only for deliveries made as of May 12, 2023.
(C) The provisions of item 3.16.3.4. (as detailed in (B)(ii) above) may be deemed to have been complied with if the customer seeking access has
submitted:
(i) an affidavit initialed by each physical or legal person detailed in item 3.16.3.3. to whom the client has delivered funds under the terms
provided in item 3.16.3.4., recording what is required in items 3.16.3.1., 3.16.3.2. and 3.16.3.4.; or
(ii) an Economic Group Affidavit of each person or legal entity declared in the affidavit indicated in item 3.16.3.3. (i.e., all Direct Controlling
Entities and the declared members of the economic group), stating the provisions of Articles 3.16.3.1. and 3.16.3.2. of the Exchange Regime;
or
(iii) a statement from each of the individuals or legal entities declared in the sworn statement indicated in item 3.16.3.3.3 (i.e., all the Direct
Controlling Entities and the declared members of the economic group), stating that within the term set forth in item 3.16.3.4. has not
received in the country any funds in local currency or other liquid local assets, except for funds in foreign currency deposited in local
financial entities, except for those directly associated to usual transactions between residents for the acquisition of goods and/or services,
which have come from the client or from any person detailed in item 3.16.3.3. to whom the client has delivered funds under the terms set
forth in item 3.16.3.4.
Article 3.16.4 of the Exchange Regime establishes that companies shall require the prior approval of the BCRA to grant access to the foreign exchange
market to individuals or legal entities included by the AFIP in the database of invoices or equivalent documents classified as apocryphal by such
agency. This requirement will not be applicable for access to the foreign exchange market for the cancellation of foreign currency financing granted
by local financial institutions, including payments for foreign currency consumption made by credit or purchase cards.
Imports payments
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Article 3.1 of the Exchange Regime allows access to the foreign exchange market for the payment of imports of goods, establishing different conditions
depending on whether they are payments of imports of goods with customs entry registration, or payments of imports of goods with pending customs
entry registration. It also provides for the reestablishment of the "SEPAIMPO", the import payment tracking system, for the purpose of monitoring
import payments, import financing and the demonstration of the entry of goods into the country.
In addition, the local importer must designate a local financial entity to act as a monitoring bank, which will be responsible for verifying compliance
with applicable regulations, including, among others, the settlement of import financing and the entry of imported goods.
Communication "A" 7,917 issued on December 13, 2023, later amended by Communication “A” 7,953 issued on January 26, 2024, substantially
modified the regime of access to the foreign exchange market for the payment of imports of goods and services, establishing the following regarding
the access to the foreign exchange market for the payment of imports of goods, effective as of December 13, 2023:
(a) Entities may provide access to the foreign exchange market to make deferred payments for imports of goods with customs entry registration as
from December 13, 2023, when in addition to the other applicable regulatory requirements, it is verified that the payment complies with the
following schedule, according to the type of goods:
(i) from its customs entry registration, the payment of the FOB value corresponding to the following goods may be made: (a) petroleum or
bituminous mineral oils, their preparations and residues (subchapters 2709, 2710 and 2713 of the NCM); (b) petroleum gases and other
gaseous hydrocarbons (subchapter 2711 of the NCM); c) bituminous coal without agglomeration (subchapters 2701.12.00 of the NCM),
when the importation is carried out by an electric generation plant; d) electric energy (subchapters 2716.00.00 of the NCM).
(ii) from 30 days from the date of registration of customs entry, payment of the FOB value corresponding to the following goods may be
made: (a) pharmaceutical products and/or inputs used in their local processing, other goods related to health care or food for human
consumption covered by the provisions of the Article 155 Tris of the Argentine Food Code, whose tariff positions according to the NCM
are detailed in Article 12.3. of the Exchange Regime; (b) fertilizers and/or phytosanitary products and/or inputs that may be intended for
local processing, whose tariff positions are detailed in Article 12.2. of the Exchange Regime. The entity must have the importer's affidavit
stating that the goods will be used for the purposes foreseen in this item.
(iii) from 180 calendar days from the date of registration of customs entry, payment of the FOB value corresponding to the following goods
may be made: (a) finished automobiles (subchapter 8703 of the NCM); (b) those corresponding to the tariff positions detailed in Article
12.1 of the Exchange Regime that are not covered in the preceding Articles, regardless of their FOB unit value.
(iv) for the remaining goods, the payment of their FOB value may be made within the following terms counted from the registration of the
customs entry of the goods:
a) 25% after 30 calendar days.
b) An additional 25% after 60 calendar days.
c) An additional 25% after 90 calendar days.
d) The remaining 25% as from 120 calendar days.
(v) Freight and insurance as part of the purchase condition agreed with the seller may be paid in full as from the first date on which the
importer has access by virtue of the goods covered.
Entities may also grant access to the foreign exchange market without the prior approval of the BCRA to make deferred payments for new
imports of goods with customs entry registration as from December 13, 2023 before the terms set forth in item (a) above when, in addition to
the other applicable regulatory requirements, the payment falls within the situations set forth in item 3 of the Communication "A" 7,917.
Access to the foreign exchange market to make payments with pending customs registration shall require the prior approval of the BCRA
except when, in addition to the other applicable requirements, the payment falls within the situations foreseen in item 3 of the Communication
"A" 7,917.
(b) Access to the foreign exchange market to make payments with pending customs entry registration or deferred payments before the terms set
forth in item (a) above, when the remaining applicable requirements are met, only in the case of financing, new pre-financing or advance
payments or under specific benefits.
(c) Access to the foreign exchange market to make import payments for goods whose customs entry registration occurred up to December 12, 2023,
in addition to the remaining applicable requirements, shall require the prior conformity of the BCRA except when they are transactions financed
by financial entities or official credit agencies or international organizations; among other situations.
(d) Access to financial entities to cancel obligations derived from letters of credit or guaranteed letters issued or granted as from December 13,
2023, within the framework of an import in which it is required to have a SIRA declaration will be conditioned to the entity having
documentation that proves, at the date of issuance or granting, the guaranteed transaction was compatible with the terms and conditions set
forth in item (a) above.
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Payment of foreign debts for the importation of goods and/or for services effectively rendered and/or accrued
On December 22, 2023, the BCRA issued Communication "A" 7,925 establishing the requirements for importers who have outstanding debts with
foreign countries for the import of goods with customs entry registration until December 12, 2023 and/or for services effectively rendered and/or
accrued until that date (the "Import Debt Stock"), to subscribe Bonds for the Reconstruction of a Free Argentina ("BOPREAL").
Importers of goods may subscribe the BOPREAL for up to the amount of the outstanding debt for their imports of goods with customs entry registration
up to and including December 12, 2023. The amount of the BOPREAL that importers may subscribe will be adjusted to the outstanding amount
registered in the BCRA's SEPAIMPO system. Importers of services accrued up to December 12, 2023, may also subscribe the BOPREAL for up to the
amount of the outstanding debt for such transactions. Importers of goods and services that, prior to January 31, 2024, subscribe the series offered
(maturity in 2027), and for an amount equal to or greater than 50% of the outstanding amount of the Import Debt Stock, will be able to access the
foreign exchange market as from February 1, 2024 to pay the Import Debt Stock for the equivalent of 5% of the amount subscribed of such series.
Likewise, access to the foreign exchange market is authorized for the payment of the Import Debt Stock by means of an exchange and/or arbitrage with
the funds deposited in a local bank account and originated in collections of principal and interest in foreign currency of the BOPREAL.
Importers subscribing to BOPREAL may sell them with settlement in foreign currency in the country or abroad or transfer them to depositories abroad,
for up to the amount acquired in the primary subscription without limiting their ability to access the foreign exchange market. Likewise, Communication
"A" 7,935 established that those who have subscribed BOPREAL in primary bidding may, as from April 1, 2024, carry out sales transactions of
securities against foreign currency for the difference between the nominal value bid and the sale price in the secondary market obtained from the sale
of the BOPREAL, without violating the sworn statements set forth in Articles 3.16.3.1. and 3.16.3.2. of the Exchange Regime.
Payment for services rendered by non-residents
Pursuant to Article 3.2 of the Exchange Regime, entities may access the foreign exchange market to make payments for services rendered by non-
residents as long as they have documentation to support the existence of the service.
In the case of commercial debts for services, access is granted as from the expiration date, provided that it is verified that the operation is declared, if
applicable, in the last due presentation of the “External Assets and Liabilities Survey”.
Communication "A" 7,953 issued on January 26, 2024, substantially modified the regime of access to the foreign exchange market for the payment of
imports of goods and services. The aforementioned Communication established the following regarding access to the foreign exchange market for the
payment of imports of services, effective as of December 13, 2023:
(a) Access to the foreign exchange market for the payment of services.
(b) Entities may provide access to the foreign exchange market to make payments for non-residents services that were or will be rendered as of
December 31, 2023,when, in addition to the other applicable regulatory requirements, the transaction falls within one of the situations detailed
below:
(i) The payment corresponds to a transaction that falls under the following concept codes:
S03. Passenger Transportation Services.
S06. Travel (excluding transactions associated with withdrawals and/or consumption with resident cards with non-resident
suppliers or non-resident cards with Argentine suppliers).
S23. Audiovisual services.
S25. Government services.
S26. Health services by travel assistance companies.
S27. Other health services.
S29. Transactions associated with withdrawals and/or consumptions with resident cards with non-resident suppliers or non-resident
cards with Argentine suppliers.
ii) Expenses paid to foreign financial entities for their usual operations.
iii) The payment corresponds to an operation that falls under the concept "S30. Freight services for goods import operations" fand is made
after a period of time equivalent to that in which payment for the goods transported could begin to be made as per item 10.10.1 has elapsed
since the date of rendering of the service.
iv) The payment corresponds to an operation that falls under item "S24. Other personal, cultural and recreational services" and is made after
a period of 90 calendar days from the date of rendering or accrual of the service.
v) The payment corresponds to a service not included in Articles 13.23.1 to 13.2.4 of the Exchange Regime by a counterparty not related to
the resident and the payment is made after a period of 30 calendar days from the date of rendering or accrual of the service.
vi) The payment corresponds to a service not included in Articles 13.23.1 to 13.2.4 of the Exchange Regime by a counterparty related to the
resident and the payment is made after 180 calendar days from the date of rendering or accrual of the service.
(c) Stock of debt of Imports of Services
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Access to the foreign exchange market for payments for non-resident services rendered and/or accrued up to December 12, 2023, in advance
of the deadlines foreseen in Articles 13.2.3 to 13.2.6, of the Exchange Regime is admissible when, in addition to the other applicable
requirements, the following situations are verified:
i)
ii)
iii)
iv)
v)
vi)
vii)
The customer accesses the foreign exchange market with funds originated from a financing of imports of services granted by a local
financial institution from a foreign line of credit to the extent that the maturity dates and the amounts of principal to be paid of the
financing granted are compatible with those provided for in Article 13.2 of the Exchange Regime.
If the financing is granted prior to the date of rendering or accrual of the service, the terms set forth in Article 13.2 of the Exchange
Regime shall be computed as from the estimated date of rendering or accrual plus 15 calendar days.
The customer has access to the foreign exchange market simultaneously with the settlement of funds for advances or pre-financing
of exports from abroad or pre-financing of exports granted by local financial entities with funding in foreign credit lines, to the
extent that the stipulations of Article 13.3.1 of the Exchange Regime regarding maturity dates and the amounts of principal to be
paid for the financing are complied with.
The entity must also have an affidavit from the importer stating that the prior approval of the BCRA will be required for the
application of foreign currency from export collections prior to the maturity date arising from the term conditions stipulated for
situations associated with a financing.
The customer accesses the foreign exchange market simultaneously with the settlement of funds originated in a financial
indebtedness abroad, to the extent that the provisions of Article 13.3.1 of the Exchange Regime regarding maturity dates and
principal amounts payable on the financing are complied with.
The portion of the financial indebtedness abroad that is used by virtue of the provisions of this item may not be computed for the
purposes of other specific mechanisms that enable access to the foreign exchange market as from the entry and/or settlement of this
type of transactions.
In the case that the payment for imports of services is performed within the framework of the mechanism provided for in Article
7.11 of the Exchange Regime.
The customer has a "Certification for the regimes of access to foreign currency for the incremental production of oil and/or natural
gas (Decree No. 277/22)" issued within the framework of the provisions of Article 3.17 of the Exchange Regime.
The payment corresponds to transactions financed or guaranteed prior to December 12, 2023, by local or foreign financial entities.
The payment corresponds to operations financed or guaranteed prior to December 12, 2023, by international organizations and/or
official credit agencies.
(d) Payments of services abroad up to December 12, 2023.
The BCRA’s prior approval shall be required for access to the foreign exchange market to make payments for non-resident services rendered
or accrued up to December 12, 2023, except when in addition to the other applicable requirements, the entity verifies the Articles 13.4.1 to
13.4.8 of the Exchange Regime.
External financial indebtedness
In order for resident debtors to be able to access the foreign exchange market to cancel foreign financial indebtedness disbursed as of September 1,
2019, it is necessary that the loan proceeds have been settled through the foreign exchange market and that the transaction has been declared in the
External Assets and Liabilities Survey.
Repayment of foreign currency debt among residents
Access to the foreign exchange market for the repayment of debts and other obligations in foreign currency between residents, contracted as of
September 1, 2019, is prohibited.
However, it establishes as exceptions the cancellation as from its maturity of principal and interest of:
- Financing in foreign currency granted by local financial entities (including payments for consumption in foreign currency through credit cards).
- Foreign currency liabilities between residents instrumented through public registries or deeds on or before August 30, 2019.
-
Issuances of debt securities made on or after September 1, 2019, with the purpose of refinancing foreign currency obligations between residents
instrumented through public registries or public deeds before August 30, 2019, and involving an increase in the average life of the obligations.
- The payment, at maturity, of the principal and interest services of new issues of debt securities made on or after November 29, 2019, with
public registration in the country, denominated and payable in foreign currency in the country, to the extent that: (i) they are denominated and
subscribed in foreign currency; (ii) the respective principal and interest services are payable in the country in foreign currency; and (iii) the
totality of the funds obtained with the issue are settled through the foreign exchange market.
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-
-
Issues made between October 9, 2020 and December 31, 2023 of debt securities with public registration in the country, having an average life
of no less than two years, denominated in foreign currency and with services payable in a foreign country or foreign currency in the country,
that were delivered to creditors of foreign financial indebtedness and or/ debt securities with public registry in the country denominated in
foreign currency with maturities between October 15, 2020 and December 31, 2023, that has been delivered to creditors as a part of the
refinancing parameters timely required in Article 3.17 of the Exchange Regime, following the requirements of Article 3.6.1.4 of the Exchange
Regime.
Issues made as from January 7, 2021 of debt securities with public registration in the country denominated in foreign currency and whose
services are payable in foreign currency in the country, to the extent that they have been delivered to creditors to refinance pre-existing debts
with extension of the average life, when it corresponds to the amount of the refinanced capital, interest accrued up to the refinancing date and,
to the extent that the new debt securities do not mature before 2023, the amount equivalent to the interest that would accrue until December 31,
2022 on the indebtedness that is refinanced early and/or on the deferral of the refinanced principal and/or on the interest that would accrue on
the amounts so refinanced.
- The issuance of debt securities with public registry in the country that were included in Article 7.11.1.5 of the Exchange Regime, to the extent
that the record of customs entry of goods for a value equivalent to the financing received is demonstrated.
Principal payments under related counterparty debt until December 31, 2024
BCRA’s prior approval is required to access the foreign exchange market to make payments abroad of principal and interest of financial debts when
the creditor is a counterparty related to the debtor. This requirement is applicable until December 31, 2024, in accordance with Article 3.5.6 of the
Exchange Regime. Likewise, these debts will continue to be subject to prior approval even if there is a change in the creditor or the debtor which means
that there is no longer a link between the creditor and the resident debtor.
The BCRA's prior approval shall not be required: (i) in the case of local financial institutions' own transactions; (ii) in the case of a financial indebtedness
abroad with an average life of not less than two years and the funds have been deposited and settled through the foreign exchange market as from
October 2, 2020; and (iii) in the case of a financial indebtedness abroad that meets all of the following conditions: (a) the funds have been used to
finance projects within the framework of the Plan for the Promotion of Argentine Natural Gas Production - Supply and Demand Scheme 2020-2024
established in Article 2 of Decree No. 892/2020 (“Plan GasAr 2020-2024), (b) the funds have been deposited and settled through the foreign exchange
market as from November 16, 2020, (c) the indebtedness has an average life of not less than two years. Likewise, the aforementioned conformity shall
not be applicable when (1) the client has a "Certification of Increase of Exports of Goods" for the years 2021 to 2023, issued within the framework of
the provisions of Article 3.18 of the Exchange Regime for the equivalent of the amount of capital to be paid, (2) in the case of a financial indebtedness
abroad with an average life of not less than 2 (two) years, settled between August 21, 2021 and December 12, 2023, and which was originally used to
pay commercial debts for the import of goods and services that originated the issuance of a Certificate of Entry of New Financial Indebtedness Abroad
within the framework of Article 3.19 of the Exchange Regime; (3) in the case of a financial indebtedness abroad with an average life of not less than 2
(two) years originated between August 27, 2021 and December 12, 2023, originated in a refinancing with the creditor of commercial debts for the
importation of goods and services within the framework of the provisions of Article 3. 20 of the Exchange Regime; the entity must have a certification
for access to the foreign exchange market issued within the 5 (five) previous business days, by the entity that registered with the BCRA within the
concept code “P17. Registration of refinancing of commercial debt under item 20 of Communication “A” 7,626”; (4) the customer has a Certification
for the regimes of access to foreign currency for the incremental production of oil and/or natural gas, issued within the framework of the provisions of
Article 3.21 of the Exchange Regime, for the equivalent of the amount of capital to be paid; and (5) it is a financial indebtedness abroad included in
the mechanism of Article 7.11 of the Exchange Regime and the access date is consistent with the conditions required to be included in such mechanism.
Article 3.5.4 of the Exchange Regime establishes that, as long as the requirement to obtain prior approval to access the foreign exchange market to pay,
at maturity, the principal and interests of external financial indebtedness, such requirement will not be applicable when the use of the funds has been
the financing of projects within the framework of the Plan GasAr 2020-2024; when the funds have been deposited and settled through the foreign
exchange market as from November 16, 2020 and the average life of the indebtedness is not less than two years.
Access to the foreign exchange market for the payment of new issues of debt securities
Entities may access to the foreign exchange market for the payment of principal and services of debt securities denominated and publicly registered
abroad when the debtor has settled through the foreign exchange market an amount equivalent to the face value of the external indebtedness.
The aforementioned requirement will be deemed to be met for the portion of debt securities publicly registered abroad issued as from January 7, 2021,
intended to refinance pre-existing debt by extending their average life, for an amount equivalent to the refinanced principal, and provided that the new
securities do not have a principal maturity schedule within two years, for interest accrued through the date of refinancing and, interest that would accrue
during the first two years on the refinanced indebtedness and/or on the deferral of the refinanced principal and/or interest that would accrue on the
refinanced amounts.
Duly registered securities that are denominated and payable in foreign currency in Argentina
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Pursuant to Article 2.5 of the Exchange Regime, resident debt issuers will have access to the foreign exchange market for the payment at maturity of
principal and interest of duly registered debt security issues that are denominated and payable in foreign currency in Argentina, to the extent that (i)
they are fully subscribed in foreign currency, and (ii) provided that the proceeds of the issue are previously settled through the foreign exchange market.
Non-resident access to the foreign exchange market
Pursuant to Article 3.13 of the Exchange Regime, the prior approval of the BCRA will be required for access to the foreign exchange market by non-
residents for the purchase of foreign currency, with the exception of the following situations: (a) international organizations and institutions that perform
the functions of official export credit agencies; (b) diplomatic representations and consular and diplomatic personnel accredited in the country for
transfers made in the exercise of their functions; (c) representatives of courts, authorities or offices, special missions, commissions or bilateral
organizations established by treaties or international agreements, to which the Argentine Republic is a party, to the extent that the transfers are made
in the exercise of their functions; (d) transfers abroad on behalf of persons who are beneficiaries of retirement and/or pensions paid by the National
Administration of Social Security ("ANSES"), for up to the amount paid by such agency in the calendar month and to the extent that the transfer is
made to a bank account owned by the beneficiary in his/her registered country of residence; (e) purchase of foreign currency in cash by non-residents
for tourism and travel expenses, up to a maximum amount of U.S.$ 100, to the extent that the financial institution can verify in the online system
implemented by the BCRA that the customer has settled an amount equal to or greater than the amount to be purchased within the 90 days prior to the
transaction; (f) transfers to offshore bank accounts of persons who are beneficiaries of pensions granted by the National State in accordance with Laws
No. 24,043, No. 24,411, No. 25,914 and complementary laws; and (g) repatriations of direct investments of non-residents in companies that are not
controlling companies of local financial entities, to the extent that the capital contribution has been entered and settled through the foreign exchange
market as from October 2, 2020 and the repatriation takes place at least two years after its entry.
Access to the foreign exchange market for savings or investment purposes by individuals
Pursuant to Article 3.8 of the Exchange Regime, Argentine residents may access the foreign exchange market for purposes of asset formation abroad,
family assistance and derivative transactions (with some expressly stated exceptions) for up to U.S.$ 200 (through debits to local bank accounts) or
U.S.$ 100 (in cash) per person per month through all authorized exchange entities. If the access involves a transfer of funds abroad, the destination
account must be an account owned by the same person.
In all cases, the general requirements detailed under "—Specific Provisions on Access to the Foreign Exchange Market - General Requirements" apply.
Purchases in Argentine pesos made abroad with debit cards and amounts in foreign currency acquired by physical persons in the foreign exchange
market as from September 1, 2020, for the payment of obligations between residents within the framework of Article 3.6 of the Exchange Regime,
including payments for purchases with credit cards in foreign currency, will be deducted, as from the following calendar month, from the monthly
quota of U.S.$ 200. If the amount of such purchases exceeds the quota available for the following month or such quota has already been absorbed by
other purchases made since September 1, 2020, such deduction shall be made from the quotas of the following months until the amount of such
purchases is completed.
The corresponding entity will verify in the online system implemented by the BCRA whether the person has not reached the limits set for the
corresponding calendar month or has not exceeded them in the previous calendar month and, therefore, is entitled to perform the exchange transaction,
and will request the customer to submit a sworn statement stating that such person is not a beneficiary of any "Zero Rate Credits" referred to in Article
9 of Decree No. 332/2020, as amended, "Subsidized Rate Credits for Companies" and/or "Zero Rate Credits for Culture".
In addition, by means of Communication "A" 7,606, the BCRA established that users of public utilities that requested and obtained the subsidy in the
tariffs derived from the supply of natural gas and/or electric energy, as well as those that had obtained it automatically, and those that maintain the
subsidy in the potable water tariffs, may not, while maintaining the mentioned benefit: (i) access the foreign exchange market to make purchases of
foreign currency by physical persons for the formation of foreign assets of residents, remission of family aid and for operations with derivatives, under
the terms of Article 3.8. of the rules on exterior and foreign exchange; nor (ii) to carry out the transactions set forth in Article 4.3.2. of the rules on
exterior and foreign exchange.
Finally, through Communication “A” 7,609 the BCRA established, effective as from September 20, 2022, that customers who are legal persons residing
in the country engaged in agricultural activities who sell goods within the framework of Decree No. 576/2022 to those who export them directly or as
a result of a productive process carried out in the country may not: (i) access the foreign exchange market to make purchases of foreign currency by
physical persons for the formation of foreign assets of residents, remission of family assistance and for transactions with derivatives, under the terms
of Article 3.8. of the regulations on exterior and foreign exchange; nor (ii) to carry out the transactions set forth in Article 4.3.2. of the regulations on
exterior and foreign exchange. These last provisions are not applicable to physical persons.
Access to the foreign exchange market by other residents -excluding entities- for the formation of foreign assets and for derivative transactions
Pursuant to Article 3.10 of the Exchange Regime, access to the foreign exchange market for the constitution of foreign assets and for derivative
transactions by local governments, investment funds, other universalities established in Argentina, requires the prior authorization of the BCRA.
Access to the foreign exchange market by guarantee trusts for the payment of principal and interest
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Pursuant to Article 3.7 of the Exchange Regime, Argentine guarantee trusts created to guarantee principal and interest payments of resident debtors
may access the foreign exchange market to make such payments at their scheduled maturity, to the extent that, in accordance with the applicable
regulations in force, the debtor would have had access to the foreign exchange market to make such payments directly. Also, under certain conditions,
a trustee may access the foreign exchange market to guarantee certain principal and interest payments on foreign financial debt and anticipate access
to the foreign exchange market.
Derivative transactions
Article 3.12 of the Exchange Regime requires that, as from September 11, 2019, the settlement of futures transactions in regulated markets, “forwards”,
options and any other type of derivatives entered into in the country, be made in Argentine pesos.
Likewise, access to the foreign exchange market will be allowed for the payment of premiums, constitution of guarantees and cancellations
corresponding to interest rate hedging contract transactions for the obligations of residents abroad declared and validated, as applicable, in the Relevance
of Foreign Assets and Liabilities, provided that such guarantees do not cover risks higher than the foreign liabilities incurred by the debtor at the interest
rate of the risk being hedged through such transaction. The client that access the local market through this mechanism must designate an authorized
institution to operate in the foreign exchange market that will do the follow up the operation and will submit a sworn statement committing to repatriate
and settle the funds corresponding to it as a consequence of such operation or as a consequence of the release of the money from the guarantee, within
5 business days following the date on which such payment or release occurs.
Profit and dividend payment
Pursuant to Article 3.4 of the Exchange Regime, access to the foreign exchange market for the transfer of foreign currency abroad for the payment of
dividends and profits to non-resident shareholders is subject to the prior approval of the BCRA, unless the following requirements are met:
(i) Dividends must correspond to closed and audited balance sheets.
(ii) The total amount paid to non-resident shareholders shall not exceed the amount in Argentine pesos that correspond according to the
distribution determined by the shareholders' meeting.
(iii) If applicable, the External Assets and Liabilities Survey must have been complied with for the transactions involved.
(iv) The company falls within one of the following situations and fulfills all the conditions stipulated in each case:
(a) Records direct investment contributions settled as of January 17, 2020. In which case, (i) the total amount of transfers made in
the foreign exchange market for the payment of dividends to non-resident shareholders may not exceed 30% of the total value
of the capital contributions made in the relevant local company that have entered and been settled through the foreign exchange
market as of January 17, 2020, (ii) access will only be granted after the expiration of a term of not less than 30 calendar days as
from the settlement date of the last capital contribution taken into account to determine the aforementioned 30% capital cap,
and (iii) the definitive capitalization of the capital contributions must be accredited or, failing that, the filing of the registration
procedure of the capital contribution with the Public Registry must be evidenced. In this case, the accreditation of the definitive
capitalization must be made within 365 calendar days following the date of the initial filing with the Public Registry.
(b) Profits generated in projects under the Plan GasAr 2020-2024. In this case, (i) the profits generated by the foreign direct
investment contributions entered and settled through the foreign exchange market as from November 16, 2020, destined to the
financing of projects framed within the Plan GasAr 2020-2024. If the client is a direct beneficiary of Decree No. 277/2022, the
value of the benefits of the client, directly or indirectly, shall be deducted from the amount allowed in the preceding paragraph,
(ii) the access to the foreign exchange market occurs no earlier than two years from the date of settlement in the foreign exchange
market of the contribution that allows the framing in this section, and (iii) the client must submit the documentation supporting
the definitive capitalization of the contribution.
(c) The client must have a Certification of Increased Exports of Goods.
(d) It has a certification under the foreign exchange access regimes for incremental production of oil and/or natural gas.
Cases that do not comply with the above conditions will require the prior approval of the BCRA to access the foreign exchange market for the purchase
of foreign currency for the distribution of profits and dividends.
Other specific provisions
Swaps, arbitrage and securities transactions
Financial institutions may carry out foreign exchange operations and arbitrage operations with their clients in the following cases:
(i) An individual transfers funds from his local accounts (which are already in foreign currency) to his own bank accounts outside of Argentina.
(ii) The transfer of foreign currency abroad by local common depositaries of marketable securities in connection with income received in foreign
currency on account of principal and interest services on Argentine treasury bonds when such transaction is part of the payment procedure at
the request of foreign common depositaries.
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(iii) Foreign currency transfers abroad made by individuals from their local accounts denominated in foreign currency to offshore collection
accounts up to an amount of U.S.$ 500 in any month, provided that the individual submits a sworn statement stating that the transfer is made
to assist in the support of Argentine residents who were forced to remain abroad in compliance with the measures adopted in response to the
COVID-19 pandemic.
(iv) Arbitrage transactions not originating in transfers from abroad may be carried out without any restriction, to the extent that the funds are debited
from a foreign currency account held by the customer with a local financial institution. To the extent that the funds are not debited from a
foreign currency account held by the customer, these transactions may be carried out by individuals, without the prior approval of the BCRA,
up to the amount allowed for the use of cash under Articles 3.8. and 3.13 of the Exchange Regime.
(v) Exchange and arbitrage transactions by non-resident individuals may be carried out without restrictions to the extent that the funds are credited
to a tourist savings bank in accordance with the regulations on savings deposits, salary and special accounts.
(vi) Payments of debts originating from the importation of goods with customs entry registration up to December 12, 2023 or in services rendered
or accrued by non-residents up to the aforementioned date, provided that the remaining regulatory requirements are met and they are carried
out with funds deposited in a local account and originating from collections of capital and interest in foreign currency of the Bonds for the
Reconstruction of a Free Argentina (BOPREAL).
(vii) Transfer of foreign currency abroad of customers from their special account for the Regime of Promotion of the Knowledge Economy to the
extent that the regulatory requirements established for such purposes for each type of operation are complied with.
(viii) All other exchange and arbitrage operations may be carried out by customers without the prior approval of the BCRA to the extent that they
would be permitted without such approval under other exchange regulations. This also applies to local common securities depositories with
respect to income received in foreign currency as payments of principal and interest on foreign currency securities paid in Argentina.
If the transfer is made in the same currency in which the account is denominated, the financial institution will credit or debit the same amount as that
received or sent from abroad. When the financial institution charges a commission or fee for these transactions, it will be instrumented in a specifically
designated item.
Securities transactions
According to CNV General Resolution No. 988/2023, sales of marketable securities with settlement in foreign currency, in any jurisdiction and
regardless of the law under which they are issued may be made, provided that a minimum holding period of 1 business day counted as of its accreditation
at the Central Depository Agent of Negotiable Securities (“Agente Depositario Central de Valores Negociables”), to the extent that the purchases of
the marketable securities in question have been made against Argentine pesos.
Likewise, transfers to foreign depository institutions of marketable securities purchased with Argentine pesos, regardless of the law under which they
are issued, must comply with a minimum holding period of 1 business day as from the date of deposit of such marketable securities, unless such
accreditation (i) results from a primary placement of marketable securities issued by the National Treasury or by the Central Bank, in the framework
of the Communication “A” 7.918, as amended, (ii) or refers to Argentine shares and/or certificates of deposit (CEDEAR) traded in markets regulated
by the CNV. Intermediaries and trading agents must verify compliance with the aforementioned minimum holding period of marketable securities.
In addition, (i) the beneficiaries of refinancings provided for in Article 1.1.1. of the rules on "Financial Services within the Framework of the Sanitary
Emergency provided for by Decree No. 260/2020 Coronavirus (COVID-19)", until their total cancellation, (ii) the beneficiaries of "Zero Rate Credits",
"Zero Rate Credits 2021", "Zero Rate Credits Culture" or "Subsidized Rate Credits for Companies", provided for in Articles1. 1.2. and 1.1.3. of the
rules on "Financial Services within the Framework of the Sanitary Emergency provided by Decree No. 260/2020 Coronavirus (COVID-19)", until their
total cancellation, (iii) the beneficiaries of financing in Argentine pesos under section 2 of the Communication "A" 6,937, Articles2 and 3 of
Communication "A" 7. 006, as supplemented; until its total cancellation, (iv) the beneficiaries of Article 2 of Decree No. 319/2020 and complementary
and regulatory rules, for the duration of the benefit with respect to the update of the value of the installment, and (v) the persons included in the Joint
Resolution of the President of the Honorable Senate of the Nation and of the President of the Honorable Chamber of Deputies of the Nation No.
12/2020; will be prevented from selling marketable securities issued by residents to be settled in foreign currency in Argentina or transferring such
marketable securities to foreign depositories or exchanging marketable securities issued by residents for foreign assets or the acquisition in the country
with settlement in Argentine pesos of marketable securities issued by non-residents. Customers included in the BCRA Communications “A” 7,606 and
“A” 7,609 may not carry out these transactions either.
Special provisions for financing under the Plan GasAr
Article 3.5.5 of the Exchange Regime states that to the extent that the BCRA’s prior conformity requirement is in effect for access to the foreign
exchange market for the cancellation at maturity of principal and interest on foreign financial debt, this requirement shall not apply to the extent that
all of the following conditions are met:
(i) The funds were used to finance projects within the framework of the Plan GasAr.
(ii) The funds have been deposited and settled by the foreign exchange market as of November 16, 2020; and
(iii) The indebtedness has an average life of not less than two years.
Special provisions for the Export Investment Promotion Regime established by Decree No. 234/2021
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The Decree No. 234/2021 established a new Export Investment Promotion Regime (the “Promotion Regime”), with the objective, among others, of
increasing exports of goods and promoting sustainable economic development. The Ministry of Economy and the Ministry of Productive Development
will be the authorities for the application of the Promotion Regime.
The Promotion Regime covers investments for new productive projects in, among others, forestry, mining, hydrocarbon, manufacturing and agro-
industrial activities, as well as the expansion of existing business units that require investments to increase their production. The benefits of the
Promotion Regime do not apply to commodities such as wheat, corn, soybeans and biodiesel, among others. Although the regulatory entities may
include and/or exclude activities from the Promotion Regime, the decree establishes that vested rights will not be affected.
The requirements are as follows:
(i) Both legal entities and individuals, resident or non-resident, may apply.
(ii) Presentation of an “Export Investment Project” consisting of a minimum direct investment of U.S.$ 100,000,000.
(iii) Comply with the terms and conditions of the projects submitted and approved by the regulators.
(iv) The followings time are not eligible to apply for the Promotion Regime: (a) individuals and legal entities whose representatives or directors
have been convicted of certain crimes with prison sentences and/or disqualification for a specific period of time; (b) individuals and legal
entities with overdue and unpaid tax or social security debts; (c) individuals and legal entities with tax or social security debts; (d) individuals
and legal entities that have unpaid taxes, fees, fines or surcharges imposed on them by a final judicial or administrative decision in customs,
exchange, tax or social security matters; and (e) individuals that have unjustifiably failed to comply with their obligations in connection with
other promotion schemes.
Once the relevant requirements have been verified, the application authority will approve the project and will issue an “Export Investment Certificate”
for the purpose of accessing the benefits established by the Promotion Regime, which will have a term of 15 years.
Beneficiaries participating in the Export Promotion Regime may apply up to 20% of the foreign currency income obtained from exports related to the
project to (i) the payment of principal and interest of financial or commercial debts with foreign countries, (ii) the payment of dividends, and (iii) the
repatriation of direct investments of non-residents. However, this benefit may not exceed an annual maximum of 25% of the gross amount of foreign
currency liquidated by such beneficiary through the foreign exchange market to finance the development of the project. In estimating the gross amount
of foreign currency settled by the beneficiary in the foreign exchange market to finance the project, foreign currency flows from exports will not be
taken into account.
In the case of projects involving investments in excess of U.S.$ 500,000,000, the beneficiaries may opt to access an extended benefit for each year in
which the benefit previously provided for has not been used.
In the case of projects involving investments between U.S.$ 500,000,000 and U.S.$ 1,000,000,000, for each year in which the benefit has not been
used, they may enjoy, for two consecutive years, an amount of free application equivalent to double the percentage previously foreseen.
The calculation of the benefit will be made on the foreign exchange earned from exports related to the project during the year in which the extended
benefit is used.
The amount of the free application benefit may not exceed an annual maximum of 40% of the gross amount of the foreign currency effectively entered
by the beneficiary in the foreign exchange market to finance the development of the project, at the time of making use of the same.
The benefits of the Promotion Regime will cease (i) upon expiration of the term of use, (ii) in certain cases, when the beneficiary ceases to have the
capacity to carry out the activity that is the reason for the investment project, as established in the applicable regime, or (iii) if the beneficiary fails to
comply with its obligations under the Promotion Regime without justification.
Criminal Exchange Regime
The Exchange Regime establishes that transactions that do not comply with the exchange regulations established by the Exchange Regime will be
subject to the Criminal Exchange Regime (Law No. 19,359 and amendments).
For further information on the exchange control restrictions and regulations in force, you should consult your legal advisors and read the applicable
rules mentioned in this document, as well as their amendments and complementary regulations, which are available on the website:
http://www.infoleg.gob.ar or on the BCRA's website https://www.bcra.gob.ar, as applicable. The information contained in these websites is not part of
this annual report and is not deemed to be incorporated herein.
Item 10.E Taxation
The following discussion contains a description of the principal Argentine and United States federal income tax consequences
of the acquisition, ownership and disposition of our Class B shares or ADSs. It does not purport to be a comprehensive description of
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all the tax considerations that may be relevant to a decision to purchase our Class B shares or ADSs, it is not applicable to all categories
of investors, some of which may be subject to special rules, and it does not specifically address all of the Argentine and United States
federal income tax considerations applicable to any particular holder. This discussion is based upon the tax laws of Argentina and the
regulations thereunder and the tax laws of the United States and the regulations thereunder as in effect on the date of this annual report,
which are subject to change, possibly with retroactive effect, and to differing interpretations. Each prospective purchaser is urged to
consult its own tax advisor about the particular Argentine and United States federal income tax consequences to it of an investment in
our Class B shares or ADSs. This discussion is also based upon the representations of the Depositary and on the assumption that each
obligation set forth in the deposit agreement among us, the Depositary and the registered holders and beneficial owners of the ADSs,
and any related documents, will be performed in accordance with its terms.
Material Argentine Tax Considerations
The following discussion is a summary of the material Argentine tax considerations relating to the purchase, ownership and
disposition of our Class B shares or ADSs. The following summary is based upon tax laws and the respective regulations of Argentina
as in effect on the date of this document and is subject to any change in Argentine legislation that may come into effect after such date.
Any change could apply retroactively and could affect the continued validity of this summary. Additionally, please note that this
summary does not purport to be a comprehensive description of all the Argentine tax considerations that may be relevant to a holder of
our Class B shares or ADSs. No assurance can be given that the courts or tax authorities responsible for the administration of the laws
and regulations described in this report will agree with this interpretation. Holders are encouraged to consult their tax advisors regarding
the tax treatment of our Class B shares or ADSs as it relates to their situation.
Income Tax
Taxation on Dividends
According to the Argentine Income Tax Law (“ITL”), taxation applicable on the distribution of dividends from Argentine
companies would be as follows:
(i) Dividends originated in profits obtained during tax periods beginning up to December 31, 2017, whether disbursed in cash,
property or other equity securities: no Argentine income tax withholding would apply on dividend distributions except for
the application of the “Equalization Tax.” The Equalization Tax is applicable when the dividends distributed are higher
than the “net accumulated taxable income” of the immediate previous fiscal period from when the distribution is made. To
determine the “net accumulated taxable income” from the income calculated by the ITL, the income tax paid in the same
fiscal period should be subtracted and the local dividends received in the previous fiscal period should be added to such
income. The Equalization Tax would be imposed as a 35% withholding tax on the shareholder receiving the dividend.
Dividend distributions made in property (other than cash) would be subject to the same tax rules as cash dividends. Stock
dividends on fully paid shares (“acciones liberadas”) are not subject to Equalization Tax.
(ii) Dividends on Argentine shares originated in profits obtained during fiscal years initiated on or after January 1, 2018 and
paid to Argentine resident individuals and/or non-Argentine residents would be subject to a 7% income tax withholding
on the amount of such dividends (“Dividend Tax”). However, if dividends are distributed to Argentine Entities (in general,
entities organized or incorporated under Argentine law, certain traders and intermediaries, local branches of non-Argentine
entities, sole proprietorships and individuals carrying on certain commercial activities in Argentina), no Dividend Tax
should apply. Equalization Tax is not applicable.
For Argentine individuals and undivided estates not registered before the Argentine tax authorities as taxpayers for income tax
purposes, as well as for non-Argentine residents, the Dividend Tax withholding will be considered a final payment. Argentine individuals
and undivided estates are not allowed to offset income arising from the distribution of dividends on Argentine shares with losses from
other types of operations.
The ITL provides a first in-first out rule pursuant to which distributed dividends correspond to the former accumulated profits
of the distributing company.
Holders are encouraged to consult a tax advisor as to the particular Argentine income tax consequences derived from profit
distributions made on Class B shares and ADSs.
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Capital gains tax
According to income tax regulations, the results derived from the transfer of shares, quotas and other equity interests, titles,
bonds and other securities, are subject to Argentine income tax (unless an exemption applies), regardless of the type of beneficiary who
realizes the gain.
Capital gains obtained by Argentine corporate entities (in general, entities organized or incorporated under Argentine law,
certain traders and intermediaries, local branches of non-Argentine entities, sole proprietorships and individuals carrying on certain
commercial activities in Argentina, among others) derived from the sale, exchange or other disposition of shares in Argentine entities
are subject to income tax on the net income based on a progressive tax rate system (set from 25% to 35% depending on the net
accumulated taxable income). The applicable scales for fiscal periods commencing on or after January 1, 2024, are as follows: (i) net
taxable income accumulated up to $34,703,523.08 will be subject to a rate of 25%; (ii) net taxable income accumulated over
$34,703,523.08 up to $347,035,230.79 will incur a payment of $8,675,880.77 plus 30% on the excess over $34,703,523.08; and (iii) net
taxable income accumulated from $347,035,230.79 onwards will be subject to a payment of $102,375,393.08 plus 35% on the excess
over $347,035,230.79.
The amounts stated in the scales described are annually updated since January 1, 2022 based on an inflation index.
Losses arising from the sale of shares can only be offset against income derived from the same type and source of operations,
for a five-year carryover period.
Starting in 2018, income obtained by Argentine resident individuals and undivided estates located in Argentina from the sale
of shares and other securities are exempt from capital gains tax in the following cases: (i) shares placed through a CNV- authorized
public offering; and/or (ii) shares traded on CNV- authorized stock markets with segments ensuring priority of price-time and
interference of offers; and/or (iii) the sale, exchange or other disposition of shares through CNV-authorized tender offer regimes and/or
share exchanges.
In addition, Section 34 of Law No. 27,541, provides that since tax period 2020, in the case of securities under the provisions
of Section 98 of the ITL, not included in the first paragraph of Section 26 subsection u) of the ITL, Argentine resident individuals and
undivided estates located in Argentina are exempt from capital gains tax derived from their sale, exchange, or disposal to the extent said
securities are listed on stock exchanges or securities markets authorized by the CNV, without being applicable the provisions of Section
109 of the ITL. In this sense, Section 109 of the ITL provides that the total or partial exemptions established or that will be established
in the future by special laws regarding securities, issued by the national, provincial, or municipal States or the City of Buenos Aires,
will not have effects on income tax for Argentine resident individuals and undivided estates located in Argentina. ADSs would not
qualify for the exemption applicable to Argentine resident individuals since the referred conditions would not apply.
If the exemption does not apply, the income derived by Argentine resident individuals and undivided estates located in
Argentina from the sale, exchange or other disposition of ADSs (and shares, if applicable) is subject to income capital gains tax at a
15% rate on net income (calculated in Argentine currency). The acquisition cost may be updated pursuant to the IPC inflationary index
rate to the extent the equity participation was acquired after January 1, 2018. Losses arising from the sale of non-exempt Argentine
shares can only be offset by Argentine individuals and undivided estates located in Argentina against income derived from operations
of the same source and type (understanding by “type” the different concepts of income included under each article of Chapter II, Title
IV of the ITL), for a five-year carryover period.
If Argentine resident individuals and undivided estates located in Argentina perform a conversion procedure of securities
representing shares, that do not meet the exemption requirements stated in the conditions mentioned in points (i), (ii) and (iii) of the
paragraph above, with the intention to hold instead the underlying shares that do comply with said requirements, such conversion would
be considered a taxable transfer of the securities representing shares for which the fair market value by the time the conversion takes
place should be considered. The same tax treatment will apply if the conversion process involves shares that do not meet the exemption
requirements stated above that are converted into securities representing shares to which the exemption is applicable.
Once the underlying shares or securities representing shares are converted, the results obtained from the sale, exchange, swap
or any other disposition thereof would be exempt from income tax provided that the conditions mentioned in points (i), (ii) and (iii) of
the paragraph above are satisfied.
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In light of amendments introduced by Law No. 27,541, it could also be construed that a capital gains exemption could also
apply for Argentine resident individuals and undivided estates located in Argentina if the securities involved in the conversion process
are listed on stock exchanges or securities markets authorized by the CNV (although the matter is not free from doubt and further
clarifications should be issued).
Due to the amendments introduced to the ITL, as from 2018, non-Argentine resident individuals or legal entities (“Foreign
Beneficiaries”) are also exempt from income tax derived from the sale of Argentine shares in the following cases: (i) when the shares
are placed through a public offering authorized by the CNV; and/or (ii) when the shares are traded on CNV- authorized stock markets,
under segments that ensure priority of price-time and interference of offers; and/or (iii) when the sale, exchange or other disposition of
shares is made through a tender offer regime and/or exchange of shares authorized by the CNV. The applicable exemption on the sale
of Argentine shares will proceed as long as the Foreign Beneficiary does not reside nor do the funds originate from “non-cooperative
jurisdictions” (as defined below) and, in accordance with Section 90 of the Regulatory Decree of the ITL (RD ITL).
In addition, the Law No. 27,430 stated that income derived from the sale of ADSs is categorized as Argentine source income.
However, capital gains obtained from the sale, exchange or other disposition of ADSs by Foreign Beneficiaries that reside in jurisdictions
that are not considered "non- cooperative jurisdictions” and, in accordance with Section 90 of the RD ITL, whose funds do not originate
from jurisdictions considered “non-cooperative jurisdictions”, are exempt from income tax on capital gains derived from the sale of
ADSs to the extent the underlying shares are authorized for public offering by the CNV.
In case Foreign Beneficiaries conduct a conversion process of shares that do not meet the exemption requirements, into
securities representing shares that are exempt from income tax pursuant to the conditions stated above, such conversion would be
considered a taxable transfer for which the fair market value by the time the conversion takes place should be considered.
In case the exemption is not applicable, and the Foreign Beneficiaries are not resident in, and their invested funds do not
originate from, non-cooperative jurisdictions, the gain derived from the disposition of ADSs would be subject to Argentine income tax
at a 15% rate on the net capital gain or at a 13.5% effective rate on the gross price.
For Foreign Beneficiaries resident in or whose funds originate from jurisdictions considered as non-cooperative for purposes
of fiscal transparency, the tax rate applicable to the sales of shares and/or ADSs is assessed at a 35% rate applicable on a presumed net
gain basis set at 90%. General Resolution (AFIP) No 4,227/2018 also provides different payment mechanisms depending on the specific
circumstances of the sale transaction. In line with Section 252 of the RD ITL, in the cases included in the last paragraph of Section 98
of the ITL (i.e., when the acquirer and the seller of the security involved are non-Argentine residents), the tax shall be paid by the foreign
seller directly through the mechanism established for such purpose by the tax authorities, or (i) through an Argentine individual resident
with sufficient mandate or (ii) by the foreign seller’s legal representative domiciled in Argentina.
Holders are encouraged to consult a tax advisor as to the Argentine income tax consequences derived from holding and
disposing of Class B shares and ADSs and whether any different treatment under a treaty to avoid double taxation could apply.
Tax treaties
Argentina has signed tax treaties for the avoidance of double taxation with Australia, Belgium, Bolivia, Brazil, Canada, Chile,
Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Qatar, Russia, Spain, Sweden, Switzerland, the UK, and
Uruguay. The treaties signed with China, Luxembourg, Turkey, Austria and Japan are still undergoing the respective ratification
procedures. There is currently no tax treaty for the avoidance of double taxation in effect between Argentina and the United States. Since
January 2021 an international administrative agreement for the exchange of information between the Argentine tax administration
(“AFIP”) and the United States tax administration (Internal Revenue Service, “IRS”) has been in force.
Additionally, it should be noted that a legislative bill has undergone parliamentary consideration, approving the "Multilateral
Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting," signed within the framework of
the OECD. The approval of this bill will result in modifications to the agreements signed with 17 jurisdictions.
It is not clear when, if ever, a treaty and/or multilateral instrument with the United States will be ratified or entered into effect.
As a result, the Argentine tax consequences described in this section will apply, without modification, to a holder of our Class B shares
or ADSs that is a U.S. resident. Foreign shareholders located in certain jurisdictions with a tax treaty in force with Argentina may be (i)
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exempted from the payment of the personal assets tax and (ii) entitled to apply for reduced withholding tax rates on payments to be
made by Argentine parties if certain conditions are met.
Holders are encouraged to consult a tax advisor as to the potential application of the provisions of a treaty in their specific
circumstances.
Personal assets tax
Argentine entities must pay the personal assets tax corresponding to Argentine and foreign resident individuals and foreign
resident entities for the holding of company shares by December 31 of each year. For tax period 2019, inclusive, and onwards the
applicable tax rate is 0.50% and is levied on the proportional net worth value (“valor patrimonial proporcional”) by December 31st of
each year, of the shares arising from the last balance sheet. Pursuant to the Personal Assets Tax Law, the Argentine company is entitled
to seek reimbursement of such paid tax from the applicable Argentine resident individuals and/or foreign resident shareholders. The
Argentine company may seek this reimbursement of Personal Assets Tax by setting off the applicable tax against any amount due to its
shareholders or in any other way or, under certain circumstances, waive its right under Argentine law to seek reimbursement from the
shareholders.
Holders are encouraged to consult a tax advisor as to the particular Argentine personal assets tax consequences derived from
the holding of Class B shares and ADSs.
Value added tax
The sale, exchange or other disposition of our Class B shares or ADSs and the distribution of dividends are exempted from the
value added tax.
Tax on debits and credits on Argentine bank accounts
All credits and debits originated in bank accounts held at Argentine financial institutions, as well as certain cash payments, are
subject to this tax, which is assessed at a general rate of 0.6%. There are also increased rates of 1.2% and reduced rates of 0.075%.
According to Section 45 of Law No. 27,541, the applicable rate of tax on debits and credits on Argentine bank accounts (the “TDC”) is
doubled for certain cash withdrawals made by certain Argentine legal entities. Owners of bank accounts subject to the general 0.6% rate
may consider 33% of the tax paid as a tax credit against specific taxes. The taxpayers that are subject to the 1.2% rate may consider 33%
of all tax paid as a credit against specific taxes. Such amounts can be utilized as a credit for income tax or for the special contributions
on cooperatives capital. The remaining amount is deductible for income tax purposes. If lower rates were applied, the available credit
would be reduced to 20%. Additionally, Law No. 27,264 establishes that 100% of the tax paid may be considered as a credit against
income tax by entities that are characterized as “micro” and “small” and 60% of the tax paid may be considered as a credit against
income tax by those entities related to the manufacturing industry that are characterized as “medium - stage 1-” by means of section 1
of Law No. 25,300 and its complementary ones.
TDC has certain exemptions. Debits and credits in special checking accounts (created under Communication “A” 3250 of the
Argentine Central Bank) are exempted from this tax if the accounts are held by foreign legal entities and if they are exclusively used for
financial investments in Argentina. For certain exemptions and/or tax rate reductions to apply, bank accounts must be registered with
the Tax Authority (AFIP-DGI) in accordance with General Resolution (AFIP) No.3900/2016.
It is noted that according to Decree No. 796/2021, the TDC exemptions foreseen in Decree No. 380/2001 and other regulations
of the same nature shall not be applicable in those cases where cash payments are related to the purchase, sale, exchange, intermediation
and/or any other type of operation on crypto assets, cryptocurrencies, digital currencies or similar instruments, in the terms defined by
the applicable rules.
Whenever financial institutions governed by Law No. 21,526 make payments acting in their own name and behalf, the
application of the TDC is restricted to certain specific transactions. Such specific transactions include, among others, dividends or profits
distributions.
Pursuant to Law No. 27,702, the following taxes which initially expired on December 31, 2022 were extended until December
31, 2027: Income Tax, Personal assets tax and TDC.
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Tax on minimum presumed income
Pursuant to Law No. 27,260, passed by the Argentine Congress on June 29, 2016, the tax on minimum presumed income was
eliminated for tax periods beginning as of January 1, 2019.
PAIS Tax (“Impuesto para una Argentina inclusiva y solidaria”)
Law No. 27,541 establishes, on an emergency basis and for the term of five fiscal periods from the entry into force of said law
(i.e. December 23, 2019), a federal tax applicable to certain transactions for the purchase of foreign currency for saving purposes or
without a specific destination and other operations of currency exchange and acquisition of services performed by Argentine tax residents
(individuals, undivided estates, legal entities, among others). The applicable rate is, in general, 30%.
Investors should consider the provisions that apply to them according to their specific case.
In addition, General Resolution (AFIP) N° 4815/2020 established on the operations subject to PAIS Tax and for the taxpayers
defined in Article 36 of Law No. 27,541 that qualify as Argentine residents, in the terms of Article 116 and subsequent of the ITL, the
application of a thirty percent (30%) income tax collection on the amounts in Ps. that, for each case, are detailed in Article 39 of the
Law No. 27,541.
Said collection will be considered an advance payment of the income tax and will be computable in the annual income tax
return or, where appropriate, the annual personal assets tax return, corresponding to the fiscal period in which they were incurred. If a
surplus is generated in the corresponding tax, it will be considered direct income and can be used to offset other tax obligations.
Additionally, this general resolution establishes a refund regime for those persons or entities to whom the established collection
has been applied and who are not taxpayers of income tax or, where appropriate, personal assets tax.
Gross turnover tax
This tax is a provincial tax, which is also levied in the City of Buenos Aires, applicable to gross revenues resulting from the
regular and onerous exercise of commerce, industry, profession, business, services or any other onerous activity conducted on a regular
basis within the respective Argentine jurisdiction. Each of the provinces and the City of Buenos Aires apply different tax rates depending
on the type of activity.
In addition, gross turnover tax could be applicable on the transfer of Class B shares or ADSs and on the perception of dividends
to the extent such activity is conducted on a regular basis within an Argentine province or within the City of Buenos Aires. However,
under the Tax Code of the City of Buenos Aires, any transaction with shares as well as the perception of dividends are exempt from
gross turnover tax.
Holders of Class B shares and ADSs are encouraged to consult a tax advisor as to the particular gross turnover tax consequences
of holding and disposing of Class B shares and ADSs in the involved jurisdictions.
Regimes for the Collection of Provincial Tax Revenues on the Amounts Credited to Bank Accounts
Different tax authorities (i.e., City of Buenos Aires, Corrientes, Córdoba, Tucumán, Province of Buenos Aires and Salta, among
others) have established collection regimes for gross turnover tax purposes applicable to those credits verified in accounts opened at
financial entities, of any type and/or nature and including all branch offices, irrespective of territorial location. These regimes apply to
those taxpayers included in the lists provided monthly by the tax authorities of each jurisdiction. The applicable rates may vary
depending on the jurisdiction involved. Collections made under these regimes shall be considered as a payment on account of the gross
turnover tax. Note that certain jurisdictions have excluded the application of these regimes on certain financial transactions. Holders of
Class B shares and ADSs shall corroborate the existence of any exclusions to these regimes in accordance with the jurisdiction involved.
Stamp tax
Stamp tax is a provincial tax, which is also levied in the City of Buenos Aires, applicable to the execution of onerous
transactions within an Argentine provincial jurisdiction or the City of Buenos Aires or outside an Argentine provincial jurisdiction or
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the City of Buenos Aires but with effects in such jurisdiction. In the City of Buenos Aires, acts or instruments related to the negotiation
of shares and other securities duly authorized for its public offering by the CNV are exempt from stamp tax to the extent their placement
is made within a 180-days term counting as from when such authorization is granted.
Holders of Class B shares and ADSs are encouraged to consult a tax advisor as to the particular stamp tax consequences arising
in the involved jurisdictions.
Prospective investors should consider the tax consequences in force in the above-mentioned jurisdictions at the time the
concerned document is executed and/or becomes effective.
Other taxes
There are no federal inheritance or succession taxes applicable to the ownership, transfer or disposition of our Class B shares
or ADSs. At the provincial level, the province of Buenos Aires imposes a tax on free transmission of assets, including inheritance,
legacies, donations, etc. For tax period 2024, any gratuitous transfer of property lower than or equal to Ps. 2,038,752 is exempt. This
amount is increased to Ps. 8,488,486 in the case of transfers among parents, sons, daughters and spouses. The amount to be taxed, which
includes a fixed component and a variable component that is based on differential rates (which range from 1.6026% to 9.5131%), varies
according to the property value to be transferred and the degree of kinship of the parties involved. Free transmission of Class B shares
or ADSs could be subject to this tax. Holders of Class B shares and ADSs are encouraged to consult a tax advisor as to the tax
consequences arising in the involved jurisdictions.
Court tax
In the event that it becomes necessary to institute enforcement proceedings in relation to our Class B shares and ADSs in the
federal courts of Argentina or the courts sitting in the City of Buenos Aires, a court tax (currently at a rate of 3.0%) will be imposed on
the amount of any claim brought before such courts. Certain court and other taxes could be imposed on the amount of any claim brought
before the Province courts.
Incoming Funds Arising from Non-Cooperative or Low or Nil Tax Jurisdictions
According to Section 82 of the Law No. 27,430, for fiscal purposes, any reference to “low tax or no tax countries” or “non-
cooperative countries” should be understood to be “non-cooperative jurisdictions or low or nil tax jurisdictions,” as defined in Section 19
and Section 20 of the ITL.
As defined under Section 19 of the ITL, “non-cooperative jurisdictions” are those countries or jurisdictions that do not have an
agreement in force with the Argentine government for the exchange of information on tax matters or a treaty to avoid international
double taxation with a broad clause for the exchange of information. Likewise, those countries that, having an agreement of this type in
force, do not effectively comply with the exchange of information will also be considered as non-cooperative. The aforementioned
treaties and agreements must comply with international standards of transparency and exchange of information on fiscal matters to
which the Argentine Republic has committed. The Executive Branch published a list of the non-cooperative jurisdictions based on the
criteria above. In this sense, Section 24 of the RD ITL lists the jurisdictions that should be considered as “non-cooperative” under the
disposition of Section 19 of the ITL.
In turn, “low or nil tax jurisdictions” are defined as those countries, domains, jurisdictions, territories, associated states or
special tax regimes in which the maximum corporate income tax rate is lower than 60% of the minimum corporate income tax rate
established in the first paragraph of Section 73 of the ITL. In light of Section 25 of the RD ITL, for purposes of determining the taxation
level referred to in Article 20 of the ITL, the aggregate corporate tax rate in each jurisdiction, regardless of the governmental level in
which the taxes were levied must be considered. In turn, “special tax regime” is understood as any regulation or specific scheme that
departs from the general corporate tax regime applicable in said country and results in an effective rate below that stated under the
general regime.
According to the legal presumption under Section 18.2 of Law No. 11,683, as amended, incoming funds from non-cooperative
or low or nil jurisdictions could be deemed unjustified net worth increases for the Argentine party, no matter the nature of the operation
involved. Unjustified net worth increases are subject to the following taxes:
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•
income tax would be assessed at 110% of the amount of funds transferred.
• VAT and Excise Tax (if any) would be assessed at 110% of the amount of funds transferred.
Although the concept of “incoming funds” is not clear, it should be construed as any transfer of funds:
(i) from an account in a non-cooperative/low or nil tax jurisdiction or from a bank account opened outside of a non-
cooperative or low or nil tax jurisdiction but owned by an entity located in a non-cooperative or low or nil tax
jurisdiction;
(ii) to a bank account located in Argentina or to a bank account opened outside of Argentina but owned by an Argentine
party.
The Argentine party may rebut such legal presumption by duly evidencing before the Argentine tax authority that the funds
arise from activities effectively performed by the Argentine party or by a third party in such jurisdiction, or that such funds have been
previously declared.
THE ABOVE SUMMARY IS NOT INTENDED TO BE A COMPLETE ANALYSIS OF ALL TAX CONSEQUENCES
RELATING TO THE OWNERSHIP OR DISPOSITION OF CLASS B SHARES OR ADSs. HOLDERS ARE ENCOURAGED
TO CONSULT THEIR TAX ADVISORS CONCERNING THE TAX CONSEQUENCES ARISING IN EACH PARTICULAR
CASE.
United States Federal Income Tax Considerations
This discussion describes certain U.S. federal income tax consequences for a U.S. holder (as defined below) of acquiring,
owning and disposing of the Class B shares and ADSs (and to the extent provided under “Information Reporting and Backup
Withholding” and “FATCA” below, investors other than U.S. holders). This discussion does not contain a detailed description of all
potential U.S. federal income tax consequences and does not address the Medicare tax on net investment income, U.S. federal estate and
gift taxes or the effects of any state, local or non-U.S. tax laws. In addition, this discussion does not apply to certain classes of holders,
such as persons that own or are deemed to own 10% or more of the voting power or 10% or more of the total value of all classes of our
stock, dealers in securities or currencies, regulated investment companies, real estate investment trusts, traders that elect mark-to-market
accounting for securities holdings, banks or other financial institutions, insurance companies, tax-exempt organizations, entities treated
as partnerships for U.S. federal income tax purposes (or a partner therein), persons who are liable for alternative minimum tax, persons
who acquired the Class B shares or ADSs pursuant to the exercise of an employee stock option or otherwise as compensation, persons
holding the Class B shares or ADSs in connection with a trade or business conducted outside of the United States, persons holding the
Class B shares or ADSs as a position in a “straddle” or conversion transaction, or as part of a “synthetic security” or other integrated
financial transaction, persons required to accelerate the recognition of any item of gross income with respect to the Class B shares or
ADSs as a result of such income being recognized on an applicable financial statement, or U.S. holders that have a functional currency
other than the U.S. dollar, all of which may be subject to rules that differ significantly from those described below. This discussion
assumes that the Class B shares and ADSs are held as “capital assets” for U.S. federal income tax purposes.
This discussion is based on the provisions of the Internal Revenue Code of 1986, as amended (“the Code”), Treasury
regulations, administrative rulings and judicial authority, all as in effect as of this date. All of these laws and authorities are subject to
change, possibly on a retroactive basis. You should consult your own tax advisors concerning the U.S. federal, state, local and non-U.S.
tax consequences of purchasing, owning and disposing of the Class B shares and ADSs in light of your particular circumstances.
For purposes of this summary, you are a U.S. holder if you are a beneficial owner of Class B shares or ADSs and you are, for
U.S. federal income tax purposes, an individual citizen or resident of the United States, a U.S. domestic corporation, or otherwise subject
to U.S. federal income tax on a net income basis with respect to income from the Class B shares and ADSs.
In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the Class B shares represented
by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized if you exchange an ADS for the Class B
shares represented by that ADS.
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Dividends
Subject to the discussion under “—Passive Foreign Investment Company” below, the gross amount of distributions paid with
respect to the Class B shares or ADSs (including the amount of any Argentine taxes withheld), other than certain pro rata distributions
of Class B shares or ADSs, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as
determined under U.S. federal income tax principles). Because we do not maintain calculations of earnings and profits under U.S. federal
income tax principles, it is expected that distributions generally will be reported to you as dividends. Any dividends you receive
(including any withheld taxes) will be includable in your income on the date of your receipt of the dividend, or in the case of ADSs, the
Depositary’s receipt of the dividend. Such dividends will not be eligible for the dividends-received deduction generally available to
U.S. corporations. Dividends paid in Pesos or other non-U.S. currency will be included in a U.S. holder’s income in a U.S. dollar amount
calculated by reference to the exchange rate in effect on the date of a U.S. holder’s receipt of the dividend, or in the case of ADSs, the
Depositary’s receipt of the dividend, regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is
converted into U.S. dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in
respect of the dividend income. If such a dividend is not converted into U.S. dollars on the date of receipt, a U.S. holder generally will
have a basis in the non-U.S. currency equal to its U.S. dollar value on that date. A U.S. holder generally will be required to recognize
foreign currency gain or loss realized on a subsequent conversion or other disposition of such currency, which will be treated as U.S.-
source ordinary income or loss.
Dividends received by certain non-corporate U.S. holders will generally be subject to taxation at reduced rates if the dividends
are “qualified dividends.” Subject to applicable limitations (including a minimum holding period requirement), dividends paid on the
ADSs will be treated as qualified dividends if (i) the ADSs are readily tradable on an established securities market in the United States
and (ii) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is paid,
a passive foreign investment company (a “PFIC”) (see the discussion under “—Passive Foreign Investment Company” below).
Because the Class B shares are not themselves listed on a U.S. exchange, dividends received with respect to the Class B shares
that are not represented by ADSs generally will not be treated as qualified dividends. U.S. holders of Class B shares or ADSs should
consult their own tax advisors regarding the availability of the reduced dividend tax rate in the light of their own particular circumstances.
Dividends received by U.S. holders will generally constitute foreign-source income and “passive category” income for U.S.
foreign tax credit purposes. Subject to certain conditions and limitations (including a minimum holding period requirement) and the
Foreign Tax Credit Regulations (as defined below), any Argentine tax withheld from dividends on the Class B shares or ADSs may be
treated as a foreign income tax eligible for credit against a U.S. holder’s U.S. federal income tax liability. However, Treasury regulations
addressing foreign tax credits (the “Foreign Tax Credit Regulations”) impose additional requirements for foreign taxes to be eligible for
a foreign tax credit, and there can be no assurance that those requirements will be satisfied. The Department of the Treasury and the
Internal Revenue Service (the “IRS”) are considering proposing amendments to the Foreign Tax Credit Regulations. In addition, recent
notices from the IRS provide temporary relief by allowing taxpayers that comply with applicable requirements to apply many aspects
of the foreign tax credit regulations as they previously existed (before the release of the current Foreign Tax Credit Regulations) for
taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later
date specified in such notice or other guidance). Any amounts withheld on account of the Argentine personal assets tax (as discussed in
“—Material Argentine Tax Considerations”) will not be a foreign income tax eligible for credit against a U.S. holder’s U.S. federal
income tax liability. Instead of claiming a foreign tax credit, a U.S. holder may be able to deduct any Argentine tax withheld from
dividends in computing such holder’s taxable income, subject to generally applicable limitations under U.S. law (including that a U.S.
holder is not eligible for a deduction for otherwise creditable foreign income taxes paid or accrued in a taxable year if such U.S. holder
claims a foreign tax credit for any foreign income taxes paid or accrued in the same taxable year). The rules with respect to foreign tax
credits and deductions for foreign taxes are complex and U.S. holders are urged to consult their independent tax advisors regarding the
Foreign Tax Credit Regulations (and the related temporary relief in the IRS notices) and the availability of the foreign tax credit or a
deduction under their particular circumstances.
Passive Foreign Investment Company
Based on the composition of our income and assets and the valuation of our assets, we do not believe we were a PFIC for 2023,
although there can be no assurance in this regard.
In general, we will be a PFIC for any taxable year in which:
222
•
•
at least 75% of our gross income is passive income, or
at least 50% of the value (generally determined based on a quarterly average) of our assets is attributable to assets that
produce or at held for the production of passive income.
For this purpose, passive income generally includes dividends, interest, cetain royalties and rent and gains from financial
investments (other than certain income derived in the active conduct of a banking business as discussed below). In addition, cash and
other assets readily convertible into cash are generally considered passive assets. If we own at least 25% (by value) of the stock of
another corporation, for purposes of determining whether we are a PFIC, we will be treated as owning our proportionate share of the
other corporation’s assets and receiving our proportionate share of the other corporation’s income.
Our determination with respect to our PFIC status is based in part upon certain proposed U.S. Treasury regulations. Those
regulations and other administrative pronouncements from the IRS provide special rules for determining the character of income derived
in the active conduct of a banking business for purposes of the PFIC rules. Specifically, these rules treat certain income earned by a non-
U.S. corporation engaged in the active conduct of a banking business as non-passive income. Although we believe we are engaged in
the active conduct of a banking business, the application of these special rules to our activities, and, thus, the characterization of some
of our income and assets for purposes of the PFIC rules, is not entirely clear. Thus, there can be no assurance that the IRS will agree
with our determination with respect to our PFIC status. In addition, these special rules are subject to change in the future.
The determination of whether we are a PFIC is made annually. Accordingly, it is possible that we may become a PFIC in the
current or any future taxable year due to changes in our asset or income composition. If we are a PFIC for any taxable year during which
you hold our Class B shares or ADSs, you will be subject to special tax rules discussed below.
If we are a PFIC for any taxable year during which you hold our Class B shares or ADSs and you do not make a timely mark-
to-market election, as described below, you will be subject to special tax rules with respect to any “excess distribution” received and
any gain realized from a sale or other disposition, including a pledge, of such Class B shares or ADSs. Distributions received in a
taxable year will be treated as excess distributions to the extent that they are greater than 125% of the average annual distributions
received during the shorter of the three preceding taxable years or your holding period for the Class B shares or ADSs. Under these
special tax rules:
•
•
•
the excess distribution or gain will be allocated ratably over your holding period for the Class B shares or ADSs,
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a
PFIC, will be treated as ordinary income, and
the amount allocated to each other year will be subject to tax at the highest tax rate in effect for that year for individuals
or corporations, as applicable, and the interest charge generally applicable to underpayments of tax will be imposed on the
resulting tax attributable to each such year.
Although the determination of whether we are a PFIC is made annually, if we are a PFIC for any taxable year in which you
hold our Class B shares or ADSs, you will generally be subject to the special tax rules described above for that year and for each
subsequent year in which you hold the Class B shares or ADSs (even if we do not qualify as a PFIC in such subsequent years). However,
if you own Class B shares or ADSs and we cease to be a PFIC, you may be able to avoid the continuing impact of the PFIC rules by
making a special election to recognize gain as if your Class B shares or ADSs had been sold on the last day of the last taxable year
during which we were a PFIC. You are urged to consult your own tax advisor about this election.
In lieu of being subject to the special tax rules discussed above, you may make a mark-to-market election with respect to your
Class B shares or ADSs provided such Class B shares or ADSs are treated as “marketable stock.” Class B shares or ADSs generally will
be treated as marketable stock if the Class B shares or ADSs shares are regularly traded on a “qualified exchange or other market”
(within the meaning of the applicable Treasury regulations). Under current law, the mark-to-market election may be available to holders
of ADSs for as long as the ADSs are traded on the NYSE, which constitutes a qualified exchange, although there can be no assurance
that the ADSs will be “regularly traded” for purposes of the mark-to-market election. The Class B shares are traded on the ByMA, which
must meet certain trading, listing, financial disclosure and other requirements to be treated as a qualified exchange for these purposes,
and no assurance can be given that the Class B shares will be “regularly traded” for purposes of the mark-to-market election.
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If you make an effective mark-to-market election, for each taxable year that we are a PFIC you will include as ordinary income
the excess of the fair market value of your Class B shares or ADSs at the end of the year over your adjusted tax basis in the Class B
shares or ADSs. You will be entitled to deduct as an ordinary loss in each such year the excess of your adjusted tax basis in the Class B
shares or ADSs over their fair market value at the end of the year, but only to the extent of the net amount previously included in income
as a result of the mark-to-market election. Your adjusted tax basis in the Class B shares or ADSs will be increased by the amount of any
income inclusion and decreased by the amount of any deductions under the mark-to-market rules. In addition, upon the sale or other
disposition of your Class B shares or ADSs in a year that we are a PFIC, (i) any gain will be treated as ordinary income and (ii) any loss
will be treated as ordinary loss, but only to the extent of the net amount previously included in income as a result of the mark-to-market
election, and thereafter will be capital loss.
If you make a mark-to-market election, it will be effective for the taxable year for which the election is made and all subsequent
taxable years unless the Class B shares or ADSs are no longer regularly traded on a qualified exchange or other market, or the IRS
consents to the revocation of the election. You are urged to consult your tax advisor about the availability of the mark-to-market election,
and whether making the election would be advisable in your particular circumstances.
Alternatively, holders of shares in a PFIC can sometimes avoid the special tax rules described above by electing to treat the
PFIC as a “qualified electing fund” under Section 1295 of the Code. However, this option is not available to you because we do not
intend to comply with the requirements necessary to permit you to make this election.
If we are a PFIC for any taxable year during which you hold our Class B shares or ADSs and any of our non-U.S. subsidiaries
is also a PFIC, you will be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the
application of the PFIC rules. You will not be eligible to make the mark-to-market election described above in respect of any lower- tier
PFIC. You are urged to consult your tax advisors about the application of the PFIC rules to any of our subsidiaries.
You will generally be required to file IRS Form 8621 if you hold our Class B shares or ADSs in any year in which we are
classified as a PFIC. You are urged to consult your tax advisors concerning the U.S. federal income tax consequences of holding our
Class B shares or ADSs if we are considered a PFIC in any taxable year.
Sale or Other Disposition
Upon a sale or other disposition of the Class B shares or ADSs, U.S. holders will recognize gain or loss for U.S. federal income
tax purposes in an amount equal to the difference between the U.S. dollar value of the amount realized on the disposition and the U.S.
holder’s tax basis, determined in U.S. dollars, in the Class B shares or ADSs. Subject to the discussion under “—Passive Foreign
Investment Company” above, such gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if the
Class B shares or ADSs were held for more than one year. A U.S. holder’s ability to offset capital losses against ordinary income is
limited. Long-term capital gain recognized by a non-corporate U.S. holder may be taxable at a preferential rate. Any gain or loss will
generally be U.S.–source gain or loss for foreign tax credit purposes. Consequently, a U.S. holder may not be eligible for a foreign tax
credit for any Argentine tax imposed upon the sale or other disposition of the Class B shares or ADSs unless such credit can be applied
(subject to applicable limitations) against tax due on other income treated as derived from foreign sources. However, pursuant to the
Foreign Tax Credit Regulations, any such Argentine tax would generally not be a foreign income tax eligible for a foreign tax credit
(regardless of any other income that a U.S. holder may have that is derived from foreign sources). In such case, the non-creditable
Argentine tax may reduce the amount realized on the sale or other disposition of the Class B shares or ADSs. As discussed above,
however, recent notices from the IRS provide temporary relief by allowing taxpayers that comply with applicable requirements to apply
many aspects of the foreign tax credit regulations as they previously existed (before the release of the current Foreign Tax Credit
Regulations) for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is
issued (or any later date specified in such notice or other guidance). If any Argentine tax is imposed upon the sale or other disposition
of the Class B shares or ADSs and a U.S. holder applies such temporary relief, such Argentine tax may be eligible for a foreign tax
credit or deduction, subject to the applicable conditions and limitations. U.S. holders should consult their own tax advisors regarding
the Foreign Tax Credit Regulations (and the related temporary relief in the IRS notices) and the availability of the foreign tax credit or
a deduction under their particular circumstances.
Foreign Financial Asset Reporting
Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of U.S.$50,000 on the last
day of the taxable year or U.S.$75,000 at any time during the taxable year are generally required to file an information statement along
with their tax returns, currently on IRS Form 8938, with respect to such assets. “Specified foreign financial assets” include any financial
224
accounts held at a non-U.S. financial institution, as well as securities issued by a non-U.S. issuer (which would include the Class B
shares and ADSs) that are not held in accounts maintained by financial institutions. Higher reporting thresholds apply to certain
individuals living abroad and to certain married individuals. Regulations extend this reporting requirement to certain entities that are
treated as formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective criteria.
U.S. holders that fail to report the required information could be subject to substantial penalties. In addition, the statute of limitations
for assessment of tax would be suspended, in whole or part. Prospective investors should consult their own tax advisors concerning the
application of these rules to their investment in the Class B shares and ADSs, including the application of the rules to their particular
circumstances.
Information Reporting and Backup Withholding
Dividends paid on, and proceeds from the sale or other disposition of, the Class B shares or ADSs that are paid within the
United States or through certain U.S.-related financial intermediaries generally will be subject to information reporting unless a U.S.
holder is treated as an exempt recipient. Such payments may also be subject to backup withholding unless a U.S. holder (i) provides a
correct taxpayer identification number and certifies that it is not subject to backup withholding or (ii) otherwise establishes an exemption
from backup withholding. Backup withholding is not an additional tax. Any amounts withheld may be allowed as a refund or credit
against the holder’s U.S. federal income tax liability, provided the holder timely furnishes the required information to the IRS.
A holder that is a non-resident alien individual, a foreign corporation or a foreign estate or trust may be required to comply
with certification and identification procedures in order to establish its exemption from information reporting and backup withholding.
FATCA
We have entered into an agreement with the IRS effective April 24, 2014, pursuant to which we have agreed to comply with
certain due diligence, information reporting and withholding obligations pursuant to Sections 1471 through 1474 of the Code, and the
regulations promulgated thereunder (often referred to as the “Foreign Account Tax Compliance Act” or “FATCA”). Therefore, an
investor considered to have a financial account that is a “U.S. account” maintained by us may be required to provide certain information
regarding such investor (or relevant beneficial owner of the Class B shares or ADSs), including information and tax documentation
regarding the identity of such investor as well as that of its direct and indirect owners, and we may be required to report this information
to the IRS. However, stock or other equity or debt instruments issued by a financial institution is not treated as a U.S. account if such
stock or other instrument is regularly traded on an established securities market. We expect that the Class B shares and ADSs will be so
treated. Further, a U.S. account generally does not include an equity instrument in a financial institution, such as us, that is not an
investment entity.
In addition, it is possible that under future guidance, payments on the Class B shares and ADSs may be subject to a withholding
tax of up to 30% under rules applicable to foreign “passthru payments.” Regulations implementing this rule have not yet been adopted
or proposed and the IRS has indicated that any such regulations would not be effective prior to the date that is two years after the date
on which final regulations on this issue are published. FATCA is particularly complex and its application to Argentine financial
institutions is uncertain at this time. Although we have registered with the IRS and believe that we are compliant with obligations
imposed on us under FATCA, it is unclear to what extent we may be able to comply with FATCA in the future. Each holder of Class B
shares or ADSs should consult its own tax advisor to obtain a more detailed explanation of FATCA and to learn how FATCA might
affect each holder in its particular circumstances.
Item 10.F Dividends and Paying Agents
Not applicable.
Item 10.G Statement by Experts
Not applicable.
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Item 10.H Documents on Display
We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and
regulations of the SEC that apply to foreign private issuers. Foreign private issuers, like us, are required to make filings with the SEC
by electronic means. Any filings we make electronically are available to the public over the Internet at the SEC’s web site at
http://www.sec.gov/.
Item 10.I Subsidiary Information
Not applicable.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
Market risk is the risk of loss arising from fluctuations in financial markets variables, such as interest rates, foreign exchange
rates and other rates or prices. This risk is a consequence of lending, trading and investments businesses and mainly consists of interest
rate risk and foreign exchange risk.
Our market risk arises mainly from our capacity as a financial intermediary.
The Risk Management Committee is responsible for approving and amending our market risk policies.
The Risk Management Committee uses a risk map to explain, in detail, the trades that the trading desk at Banco Supervielle
S.A. is authorized to close. The risk map also describes the maximum amounts for the position in certain products, the maximum amount
of losses accepted (“stop loss”) and the maximum expected loss (given a confidence interval) over a specific time period if the portfolio
were held unchanged over that period (VaR limit). Alongside with the risk of Banco Supervielle S.A., there is a set of additional metrics
that establish the market risk of Grupo Supervielle on a consolidated basis with its subsidiaries. Complementarily, the credit committee
establishes the credit risk limits with all financial counterparties. Our Financial Risk Department conducts a daily control over
compliance with the limits established in the risk map. In the event that an exception is needed, the trading desk must apply for
authorization from the CEO while maintaining the Asset and Liability Committee and the Risk Management Committee informed of all
developments. In addition, the Risk Management Committee authorizes risk levels in terms of interest rate, foreign exchange rate,
inflation and term imbalance risks. The Assets and Liabilities Committee is responsible for monitoring compliance with our market risk
policies every two weeks.
In the course of its monthly meetings, our Board of Directors is advised of the full range of resolutions adopted by the Assets
and Liabilities Committee, including: liquidity risk, market risk, foreign currency risk and interest rate risk management.
We evaluate, upgrade and improve market risk measurements and controls on a daily basis. In order to measure significant
market risks on the trading portfolio, we use the value at risk methodology, or “VaR,” in our internal models. This methodology is based
on statistical methods that take into account many variables that may cause a change in the value of its portfolios, including interest
rates, foreign exchange rates, securities prices, volatility and any correlation among them. VaR is an estimation of potential losses that
could arise from reasonably likely adverse changes in market conditions. It expresses the maximum amount of loss expected (given a
confidence interval) over a specified time period, or “time horizon,” if that portfolio were held unchanged over that time period.
All VaR models, while forward looking, are based on past events and are dependent upon the quality of available market data.
The quality of our VaR models is therefore continuously monitored. As calculated, for the trading book VaR is an estimate of the
expected maximum loss in the market value of a given portfolio over a ten-day time horizon at a one tailed 99% confidence interval.
We assume a ten-day holding period and adverse market movements of 2.32 standard deviations as the standard for risk measurement
and comparison. Additional information on our risk management is set forth in Note 26 to our audited consolidated financial statements.
The following table shows the Basel Standardized Approach for market risk capital requirement for our combined trading
portfolios in 2023, 2022 and 2021 (in thousands of Pesos):
2023
2022
2021
226
Minimum
Maximum
Average
As of December 31,
712,196
2,793,550
1,804,002
2,658,842
3,051,835
5,275,124
3,845,579
5,275,124
3,619,193
8,600,636
6,399,241
5,854,663
In order to take advantage of good trading opportunities, we have sometimes increased risk; however, during periods of
uncertainty, we have also reduced it.
Interest Rate Risk
Central Bank Communication “A” 6534 amended the way in which the Central Bank evaluates capital needs related to interest
rate risk exposure, by the way adapting its methodology to international best practices. Even though Interest Rate Risk is not part of Tier
I capital requirements in a direct way, this could be the case whenever the bank reaches the status of “outlier bank.” The “outlier bank”
test compares the bank’s ρEVE with 15% of its Tier 1 capital, under a set of prescribed interest rate shock scenarios. Tier I capital
requirements will increase by the excess of the bank’s ρEVE over 15% of its Tier 1 capital. Therefore, the Superintendency of Financial
Institutions continues to review such risk and determines if there is a need for additional regulatory capital in case a predetermined
threshold is surpassed or it finds clear evidence of an inappropriate management of this type of risk. Additionally, the Central Bank
establishes the need to measure interest rate risk considering two dimensions: a) the impact of interest rate fluctuations over the
underlying value of a bank’s assets, liabilities and off-balance sheet items and hence its economic value and b) the impact over the net
interest income. In order to tackle the first dimension, the Central Bank established a Standardized Framework considering the impact
of six different shock scenarios over the bank’s ρEVE. To assess the impact over the net interest income, the bank has to make use of
its internal measurement systems. See “Item 4.B. Business Overview—Liquidity and Solvency Requirements.”
We define interest rate risk as the risk relating to changes in the entity’s financial income and economic value as a result of
fluctuations in the market’s interest rates. The following are known factors that contribute to this risk:
•
•
•
differences in maturity and adjustment dates of assets, liabilities and off-balance sheet holdings;
foreseeability, evolution and volatility with respect to local interest rates, foreign interest rates and CET;
the base risk arising out of an imperfect correlation when adjusting asset and liability rates for instruments with similar
revaluation characteristics; and
•
implicit options for particular assets, liabilities and off-balance sheet commitments held by the entity.
The Bank employs a prudent interest rate risk strategy allowing to uphold its commitments and maintain desired levels of
revenue and capital, both in normal and adverse market conditions.
Interest Rate Risk Management Model – Standardized Framework
The Bank includes interest rate gaps in their interest rate risk management model. This approach analyzes mismatches between
asset and liability interest rates between reevaluation periods with respect to the financial statements and off-financial statements line-
items. The result is a basic representation of the financial statements structure that allows for the detection of interest rate risk
concentrations within the different periods. This is also used to estimate the potential impact of interest rates falling outside of the
financial margin (NIM-EaR method) and the entity’s economic value (MVE-VaR method).
Every financial statements and off-financial statements line-item is classified according to its maturity. For asset/liability
management accounts without maturity, an internal method of analysis is used to determine possible maturity and sensitivity.
The Asset and Liability Management Committee monitors interest rate risk management and each financial management team
is in charge of executing it. The Risk Management team and Financial Planning team are in charge of monitoring compliance, enforcing
risk management strategies and issuing periodic reports.
227
Interest Rate Risk Capital Requirement
The Bank evaluates its minimum capital requirements relating to interest rate risk through the use of a MVE-VaR internal
model, using a holding period of three months and a 99% confidence interval. This quantitative model factors in the economic capital
required for our securitization risk. The results are then compared with those obtained from the application of the Standardized
Framework, being the resulting capital need the higher of those figures. The following chart shows the Bank’s interest rate risk figures
under the Standardized Framework described above for 2023, 2022 and 2021 (in thousands of Pesos):
Minimum
Maximum
Average
As of December 31,
2023
2,392,842
9,733,484
4,875,687
9,733,484
2022
2,916,893
10,145,972
6,177,861
10,038,985
2021
4,003,578
6,904,507
5,271,046
5,471,977
The Bank’s consolidated gap position refers to the mismatch of interest-earning assets and interest-bearing liabilities. The following
tables show the Bank’s consolidated exposure to a positive interest rate gap, in Pesos:
Interest-earning assets
Investment Portfolio(1)
Loans to the non-financial public sector(2)
Loans to the private and financial sector(2)
Receivables from financial leases
Other assets
Total interest-earning assets
Interest-bearing liabilities
Savings
Time deposits
Non subordinated notes
Liabilities with financial institutions
Other liabilities
Total interest-bearing liabilities
Asset/liability gap
Cumulative asset/liability gap
Cumulative sensitivity gap as a percentage of total interest-
earning assets
Remaining Maturity at December 31, 2023
0-1 Year
1-5 Years
Over 5
Years
Total
(in thousands of Pesos, except percentages)
262,554,072
2,022,292
359,299,445
8,176,305
923,122,737
1,555,174,851
280,756
—
40,151,882
11,318,944
—
51,751,582
—
—
11,280,831
(3,101,218)
222,281,290
230,460,903
262,834,828
2,022,292
410,732,158
16,394,031
1,145,404,027
1,837,387,336
649,712,395
349,543,733
—
1,760,478
167,580,316
1,168,596,922
386,577,929
386,577,929
—
9,774
—
1,402,477
—
1,412,251
50,339,331
436,917,260
287,823,320
—
—
75,371
68,217,791
356,116,482
(125,655,579)
311,261,681
937,535,715
349,553,507
—
3,238,326
235,798,107
1,526,125,655
311,261,681
24.9 %
844.3 %
135.1 %
(1) Includes government securities and instruments issued by the Central Bank.
(2) Loan amounts are stated before deducting allowances for loan losses.
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The table below shows the Bank’s consolidated exposure to an interest rate gap in foreign currency:
Remaining Maturity at December 31, 2023
0-1 Year 1-5 Years
Over 5
Years
Total
(in thousands of Pesos, except percentages)
Interest-earning assets in foreign currency
Investment Portfolio(1)
Loans to the non-financial public sector(2)
Loans to the private and financial sector(2)
Receivables from financial leases
Other assets
Total interest-earning assets
Interest-bearing liabilities in foreign currency
Savings
Time deposits
Subordinated notes
Liabilities with financial institutions
Other Liabilities
Total interest-bearing liabilities
Asset/liability gap
Cumulative asset/liability gap
Cumulative sensitivity gap as a percentage of total interest-earning assets
(1) Includes government securities and instruments issued by the Central Bank.
(2) Loan amounts are stated before deducting allowances for loan losses.
Foreign Currency Risk
42
—
29
—
60
131
—
—
14
—
—
14
—
—
2
—
200
202
213
17
—
19
7
256
(125)
(125)
(96) %
—
—
—
—
1
1
13
(112)
(764) %
67
—
—
—
1
68
134
22
11 %
42
—
45
—
260
347
-
280
17
—
19
9
325
22
The Risk Management Committee is responsible for deciding the net position in foreign currency to be maintained at all times
according to market conditions and monitoring it regularly.
Policies regarding foreign currency risk are applied at the level of our subsidiaries. Our foreign currency risk arises mainly
from our operations in our capacity as a financial intermediary.
Since May 2003, the fluctuation of the U.S. dollar has been included as a risk factor for the calculation of the market risk
requirement, considering all assets and liabilities in U.S. dollars. As of December 31, 2023, the Bank’s consolidated total net asset
foreign currency position subject to foreign currency risk was Ps.3,733,697 thousand, and this position generated a market risk capital
requirement of Ps.298,696 thousand as of such date.
Liquidity Risk
Policies regarding liquidity risk are applied at the level of our subsidiaries. Our liquidity risk arises mainly from the operations
of the Bank. Our other subsidiaries are also subject to liquidity risk, which is not significant.
The Bank defines liquidity risk as the risk of having to pay additional financial costs due to an unexpected need for liquidity.
This risk arises out of the differences in amounts and maturity of the assets and liabilities held by the Bank. There are two types of
Liquidity Risk:
• Funding Liquidity Risk, which results from the inability to obtain funds at market price that are needed to ensure liquidity,
mainly due to the market’s perception of the Bank.
• Market Liquidity Risk, which occurs when the Bank cannot trade its position in one or several assets at market price, which
is caused by two factors:
o
the assets are not sufficiently liquid and cannot be traded in the secondary market; and
229
o
changes in the market where the assets are traded.
To manage liquidity risk, the Bank focuses on its sources of liquidity. The Bank relies on certain financial products that can
provide a quick source of liquidity in extreme situations of illiquidity. To this effect, the Bank relies on the control of two core metrics,
the LCR and the NSFR. The first one, with a shorter-term perspective, is aimed at assessing the availability of enough liquid assets to
meet the withdrawal of deposits and other liabilities in a 30-day stress scenario. Meanwhile, the NSFR aims to promote resilience over
a longer time horizon by creating incentives for banks to fund their activities with more stable sources of funding on an ongoing basis.
The Bank relies on a set of indicators that allow it to detect and take steps to prevent potential liquidity risks. The Bank’s set
of indicators and risk limits are established by the Risk Management team and approved by the Board of Directors. These indicators are
constantly monitored by the Risk Management Committee.
The Risk Management Committee coordinates and supervises the identification, measuring and monitoring of liquidity risk.
The Assets and Liabilities Committee develops the strategies that allow for adequate liquidity risk management. The Assets and
Liabilities Committee relies on several different departments within the Bank to develop and enforce these strategies, from issuing
reports and risk management proposals to monitoring compliance with the established limits.
Operational Risk
We define operational risk as the risk of loss resulting from inadequate or failed internal processes due to personnel, systems
or external events. The definition includes legal risk but excludes strategic and reputational risk. Legal risk can result from internal or
external events and includes exposure to sanctions, penalties or other economic consequences that arise out of non-compliance with
contractual or regulatory obligations.
We believe that we are pioneers in the design of operational risk management frameworks in Argentina, placing emphasis on
risk identification, risk management policies and our organizational model. We have tailored our framework to the requirements
established by the Central Bank, the Basel accords and international best practices. The Bank’s operational risk management processes
are overseen by a correspondent, who is assisted by a network of risk, and every branch and service center has a delegate in charge of
monitoring risk. The correspondents report to the Operational Risk Department, ensuring that the Bank’s entire network is working
together to monitor operational risk.
Operational Risk Measuring Models
The risk management process is based on complying with several stages designed to evaluate the Bank’s vulnerability to
operational risk events, minimizing operational risk. This method allows the Bank to achieve a better understanding of its operational
risk profile and adopt the necessary measures to address any vulnerability. The stages are divided into:
•
Identification of operational risk by implementing a Risk Control Self-Assessment model, which applies to each one of
the Bank’s processes and IT assets.
• Measurement and evaluation of operational risk by establishing risk levels, evaluating the effectiveness of control
mechanisms and determining residual risk for each of the Bank’s processes and IT assets.
• Mitigation, resulting from the application of plans of action and strategies designed to maintain risks within the levels
established by the Board of Directors.
• Monitoring to quickly detect and address deficiencies in the policies, processes and procedures for managing operational
risk, and to ensure constant improvement.
• Documenting the incidents and losses related to operational risk by establishing a database that allows for a comparison
of the frequency and impact of operational risk events with the risk control self-assessment model.
• The Bank and other subsidiaries of Grupo Supervielle, have Operational Risk Committees that are in charge of the
enforcement of the operational risk policies and monitors the operational risks and operational risk events affecting the
230
different companies. In addition, the Operational Risk Committee issues reports to the high management, Risk
Management Committee and Board of Directors.
• Banco Supervielle S.A. has adopted a model that calculates (i) expected and unexpected losses, (ii) VaR (at a 99.9%
confidence interval) minus accounting prevision for operational risk and (iii) the minimum capital required to cover
expected and unexpected losses. The holding period used is one year.
Item 12. Description of Securities Other Than Equity Securities
Item 12.A Debt Securities
Not applicable.
Item 12.B Warrants and Rights
Not applicable.
Item 12.C Other Securities
Not applicable.
231
Item 12.D American Depositary Shares
Fees and Expenses
Holders of our ADSs are generally expected to pay fees to the Depositary according to the schedule below:
Persons depositing or withdrawing shares or
ADS holders must pay:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
For:
Issuance of ADSs, including issuances resulting from a distribution of
shares or rights or other property Cancellation of ADSs for the purpose of
withdrawal, including if the deposit agreement terminates
$0.05 (or less) per ADS
Any cash distribution to ADS holders
A fee equivalent to the fee that would be payable if
securities distributed to you had been Class B shares and
the Class B shares had been deposited for issuance of
ADSs
Distribution of securities distributed to holders of deposited securities
(including rights) which are distributed by the Depositary to ADS holders
$0.05 (or less) per ADS per calendar year
Depositary services
Registration or transfer fees
Expenses of the Depositary
Transfer and registration of shares on our share register to or from the
name of the Depositary or its agent when you deposit or withdraw shares
Cable, telex and facsimile transmissions (when expressly provided in the
deposit agreement) converting foreign currency to U.S. dollars
Taxes and other governmental charges that the
Depositary or the custodian have to pay on any ADSs or
shares underlying an ADS, for example, stock transfer
taxes, stamp duty or withholding taxes
As necessary
Any charges incurred by the Depositary or its agents for
servicing the deposited securities
As necessary
The Depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering
ADSs for the purpose of withdrawal or from intermediaries acting for them. The Depositary collects fees for making distributions to
investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The
Depositary may collect its annual fee for depositary services by deduction from cash distributions or by directly billing investors or by
charging the book-entry system accounts of participants acting for them. The Depositary may collect any of its fees by deduction from
any cash distribution payable (or by selling a portion of securities or other property distributable) to ADS holders that are obligated to
pay those fees. The Depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.
From time to time, the Depositary may make payments to us to reimburse us for costs and expenses generally arising out of
establishment and maintenance of the ADS program, waive fees and expenses for services provided to us by the Depositary or share
revenue from the fees collected from ADS holders. The depositary for our ADSs is The Bank of New York Mellon (the “Depositary”).
In 2023, the Depositary reimbursed expenses for an amount of U.S.$81,000.35. In performing its duties under the deposit agreement,
the depositary may use brokers, dealers, foreign currency or other service providers that are owned by or affiliated with the depositary
and that may earn or share fees, spreads or commissions.
The Depositary may convert currency itself or through any of its affiliates and, in those cases, acts as principal for its own
account and not as agent, advisor, broker or fiduciary on behalf of any other person and earns revenue, including, without limitation,
transaction spreads, that it will retain for its own account. The revenue is based on, among other things, the difference between the
exchange rate assigned to the currency conversion made under the deposit agreement and the rate that the Depositary or its affiliates
232
receives when buying or selling foreign currency for its own account. The Depositary makes no representation that the exchange rate
used or obtained in any currency conversion under the deposit agreement will be the most favorable rate that could be obtained at the
time or that the method by which that rate will be determined will be the most favorable to ADS holders, subject to the Depositary’s
obligations under the deposit agreement. The methodology used to determine exchange rates used in currency conversions is available
upon request.
Item 13. Defaults, Dividend Arrearages and Delinquencies
None.
PART II
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
None.
Item 15. Controls and Procedures
(a) Disclosure Controls and Procedures.
We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as amended.
We performed an evaluation of the effectiveness of our disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the reports that we file with or submit to the SEC under the Exchange Act, as amended, is recorded, processed,
summarized and reported, within the time periods specified in the SEC’s rules and forms and is communicated to our management,
including our CEO and CFO, as appropriate, to allow timely decisions regarding the required disclosure. Our CEO and CFO concluded
that, as of the end of the period covered by this annual report, our disclosure controls and procedures were effective to provide reasonable
assurance of their reliability. Notwithstanding the effectiveness of our disclosure controls and procedures, these disclosure controls and
procedures cannot provide absolute assurance of achieving their objectives because of their inherent limitations. Disclosure controls and
procedures are processes that involve human diligence and compliance and are subject to error in judgment. Because of such limitations,
there is a risk that material misstatements may not be prevented or detected on a timely basis by our disclosure controls and procedures.
(b) Management’s Annual Report on Internal Control over Financial Reporting.
1) Our management is responsible for establishing and maintaining adequate internal control over financial reporting for us
and our consolidated subsidiaries. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of
the Exchange Act, as amended, as a process designed by, or under the supervision of, our CEO and CFO, and effected by
our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of consolidated financial statements in accordance with applicable generally
accepted accounting principles. Internal controls and procedures are processes that involve human diligence and
compliance and are subject to error in judgment. Because of its inherent limitations, internal control over financial reporting
may not prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
2) Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making
this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control–Integrated Framework 2013.
3) Based on our assessment, we and our management have concluded that our internal control over financial reporting was
effective as of December 31, 2023.
(c) Attestation Report of the Registered Public Accounting Firm.
Price Waterhouse & Co. S.R.L., an independent registered public accounting firm, has audited the effectiveness of our internal
control over financial reporting as of December 31, 2023, as stated in their report to our consolidated financial statements.
233
See the Report of the Independent Registered Public Accounting Firm included in this annual report for our registered public
accounting firm’s attestation report on the effectiveness of our internal control over financial reporting.
(d) Changes in Internal Control over Financial Reporting During the Year Ended December 31, 2023.
During the period covered by this annual report, there have not been any changes in our internal control over financial reporting
that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
Item 16. [Reserved]
Item 16.A Audit committee financial expert
Our Board of Directors has determined that Mrs. Laurence Nicole Mengin de Loyer is the audit committee’s financial expert.
Mrs. Loyer is an independent director under Rule 10A-3 of the Exchange Act.
Item 16.B Code of Ethics
We have adopted a code of ethics that is applicable to all our employees, which is posted on our website at:
https://s26.q4cdn.com/426641508/files/doc_downloads/corporate_governance/Code-of-ethics.pdf.
Our code of ethics establishes the ethical guidelines to be followed by directors, managers, and employees. This code is based
on a set of core values that Grupo Supervielle and its members must respect in their daily interactions with clients, suppliers, employees,
and regulatory bodies. Our code of ethics is based on three pillars: Values, Ethical Principles, and Conduct Standards that guide the
behavior of all employees, and Ethics & Values Line where employees and suppliers can report anonymously possible irregularities or
improper conduct. Our values distinguish Grupo Supervielle and must be respected by its members in their daily interactions with
stakeholders. Grupo Supervielle demands from its employees (i) leadership to be benchmarks in the market, (ii) innovation to push
boundaries in search of new solutions for clients, (iii) commitment to respond with sustainable solutions to the demands from our clients
and stakeholders, (iv) respect to think about others, listen and understand the needs of clients, and foster constructive personal and
business relationships, (v) efficiency to add value and provide quick and quality responses using available resources responsibly and
sustainably, and (vi) simplicity to make clients’ lives easier by managing solid and simple processes and making decisions along with
them.
The Ethical Principles and Conduct Standards establish a framework of ethics and transparency in building lasting and trust-
based relationships with our stakeholders, promoting a culture of integrity and compliance with applicable regulations, laws, and best
practices, thus fostering the development of a sustainable and competitive business context.
General ethical principles include (i) promoting equal opportunities and non-discrimination, (ii) providing a safe and healthy
work environment, (iii) fostering respectful, honest, and committed relationships with stakeholders, (iv) treating employees, clients,
suppliers, and the community with dignity, and (v) acting transparently and respecting agreements with clients to provide quality service.
Guidelines for specific situations include (i) protecting the confidentiality of both client and proprietary information and
prohibiting its use for personal gain, (ii) objectivity and how to act in conflicts of interest, (iii) guidelines for offering gifts and courtesies,
(iv) ways to act towards governments, clients, suppliers, competitors, and society in a framework of cordiality and simplicity in
interactions and agility and quality in service offered, (v) compliance with applicable regulations and policies, (vi) guidelines for
preventing money laundering and terrorism financing, and (vii) guidelines for hiring employees.
The Ethics & Values Line is available to our employees and clients, and to third parties so they can report possible irregularities
or improper conduct anonymously. Confidentiality and anonymity of reports are guaranteed, and any form of reprisal or negative
consequences towards employees who make reports is prohibited.
In addition, we did not grant any waivers to our code of ethics during the year ended December 31, 2023.
234
During 2023, we adopted our Diversity, Equity, and Inclusion policy and our incentive compensation clawback policy (see
exhibit 97), and updated our Information Security policy. The Diversity, Equity and Inclusion policy and the Information Security policy
are posted on our website at https://www.gruposupervielle.com/English/our-approach/corporate-governance/default.aspx
Information contained or accessible through our website is not incorporated by reference in and should not be considered part
of this annual report.
Item 16.C Principal Accountant Fees and Services
The following table sets forth the total amount billed to us and our subsidiaries by the independent registered public accounting
firm, Price Waterhouse & Co. S.R.L., during the fiscal years ended December 31, 2023 and 2022.
Audit Fees
Audit Related Fees
Tax Fees
All Other Fees
Total
2023
2022
(in thousands of Pesos)
717,002
27,861
—
29,996
774,859
901,211
29,892
7,243
62,088
1,000,434
Audit fees are fees for professional services performed by Price Waterhouse & Co. S.R.L for the audit and limited review of
Grupo Supervielle’s consolidated annual financial statements both under IFRS and Central Bank rules and quarterly financial statements
under Central Bank requirements and services that are normally provided in connection with statutory and regulatory filings.
Audit-related fees consist of fees for professional services performed by Price Waterhouse & Co S.R.L. related to attestation,
review and verification services with respect to our financial information and the provision of services in connection with special reports.
Tax fees are fees billed with respect to tax compliance and advisory services related to tax liabilities.
All other fees include fees paid for professional services other than the services reported above under “audit fees,” “audit related
fees” and “tax fees” in each of the fiscal years above.
The General Annual Stockholders Meeting designates the external auditor.
Audit Committee Pre-Approval Policy And Procedures
Following SEC requirements regarding auditor independence, the Audit Committee pre-approves auditor services before the
commencement of the service. The Audit Committee evaluates the nature and scope of the work to be performed and the fees for such
work prior to the engagement.
The SEC rules establish two different approaches for pre-approval of external auditor services. On the one hand, the proposed
services may be previously approved by the Audit Committee, without analyzing each service individually (“general prior approval” or
“policy-based pre-approval”). On the other hand, the proposed services may be subject to approval by the Audit Committee on a case-
by-case basis by the Audit Committee or by its member to whom the pre-approval was delegated (“specific pre-approval” or “separate
pre-approval”).
Separate pre-approval
The Audit Committee has delegated to its chairperson the authority to grant pre-approvals to auditor services. The decision of
the chairperson to pre-approve a service is presented to the Audit Committee at the following scheduled meeting.
Policy based pre-approval
The Audit Committee has established a policy to define those services to be provided by the external auditor that will be
considered automatically pre-approved, so they do not need to be specifically approved by the Audit Committee.
235
The following services are excluded from the policy: (1) audit services or quarterly reviews of financial statements; (2) services
not permitted to the external auditor; and (3) consulting services which, if applicable, may have a specific pre-approval. The external
auditor’s fees for non-audit and non-tax related services may not exceed 15% of the total auditor’s fees.
With respect to the services provided by the independent auditor, the following three basic principles must be followed in all
cases, which if violated would affect the independence of the auditor: (i) the auditor cannot assume managerial roles; (ii) the auditor
cannot audit nor review his or her own work, and (iii) the auditor cannot act on behalf of the Group.
The services included are:
Services related to the audit
This category includes the services that: (i) only the independent auditor of the Group can perform (except those indicated
above in 1), and (ii) according to customary practices and based on their nature, are reasonably expected to be provided by the external
auditor, which includes assurance services, such as certifications and reports requested by regulators from the external auditor.
The fees for these services may not exceed U.S.$10,000 individually, nor U.S.$50,000 accumulated per fiscal year.
Tax services
This category includes permitted tax services, such as: (i) those related to the preparation and review of tax affidavits, and (ii)
assistance in relation to requirements and inspections of the tax authorities, and assistance in lawsuits before the Tax Court (or similar)
and before the judiciary, but excluding defense tasks in court and litigation, among others.
The fees for these services may not exceed U.S.$5,000 individually, nor U.S.$25,000 cumulatively per fiscal year.
For the purposes of its calculation, those services that are invoiced or agreed in Pesos must be converted into U.S. dollars using
the exchange rate applicable for the conversion of financial statements corresponding to the day before the service is required.
Those services exceeding the individual limits require specific (separate) pre-approval.
When the annual limit is exceeded, the services provided until that moment will be considered pre-approved. From the moment
the annual limit is exceeded, the services will require specific pre-approval from the Committee, even if they do not exceed the individual
limit.
Grupo Supervielle’s CFO, or the person to whom the CFO delegates, is responsible for carrying out an adequate control of the
services provided, keeping a record of the accumulated amount of the fees for the services, in accordance with this policy, and for
properly submitting all those services that must be pre-approved by the Audit Committee. The request for approval must be accompanied
by the auditor’s engagement proposal describing the services to be provided and the estimated fees. In the case of services not related
to auditing or taxes, the department that requires such services must substantiate the reasons for which the auditor should provide such
services and must obtain the auditor’s engagement proposal describing the service, the estimated fees and, if necessary, the safeguards
and precautions to be taken by the auditor in order to preserve its independence.
All the services that the external auditor provides without the need for specific pre-approval based on the content of the policy,
must be reported by the CFO (or whoever he delegates) at the same time that would have corresponded if they previously
approved.
Item 16.D Exemptions from the Listing Standards for Audit Committees
Not applicable.
Item 16.E Purchases of Equity Securities by the Issuer and Affiliated Purchasers
On July 20, 2022, the Group established the First Program for the repurchase of the Group’s shares pursuant to Article 64 of
Law 26,831 and CNV regulations. The Group decided to establish the First Program as a result of the then-current national and
236
international macroeconomic context and in view of the high volatility of the capital markets and taking into account the significant
deterioration in the value of Grupo Supervielle’s shares associated with the increase of the Argentine risk. In this regard, Grupo
Supervielle believes that it is convenient to implement the First Program as a viable and efficient alternative to apply Grupo Supervielle’s
excess cash position to the benefit of Grupo Supervielle and its shareholders. In addition, Grupo Supervielle may purchase up to 10%
of its capital stock pursuant to Law No. 26,831, complying with the requirements and procedures set forth therein. If a purchase is made
pursuant to Law No. 26,831, Grupo Supervielle must resell the repurchased shares within three years and its shareholders will have
preemptive rights to purchase the shares, except in the case of an employee compensation program or plan, or in the case that the shares
are distributed among all shareholders on a pro rata basis or with respect to the sale of an amount of shares that in any 12-month period
does not exceed 1% of the Grupo Supervielle’s capital stock. In these cases, the three-year term may be extended with the prior approval
of a shareholders’ meeting.
The Board of Directors approved the establishment of the following terms and conditions for the acquisition of its own shares
under the First Program: (i) maximum amount of the investment: up to Ps.2,000,000,000; (ii) maximum number of shares to be acquired:
up to 10% of the capital stock of Grupo Supervielle, as established by the applicable Argentine laws and regulations; (iii) payable price:
up to Ps.138.00 per Class B share and U.S.$2.20 per ADS on the New York Stock Exchange, and (iv) term for the acquisition: 250 days
as from the next day of the date of publication of the information in the Bolsa de Buenos Aires Daily Bulletin, subject to any renewal
or extension of the term, which will be informed to the public by the same means.
On September 13, 2022, the Board of Directors of Grupo Supervielle decided to increase the payable price related to the
acquisitions under the First Program to Ps.155.00 per Class B share and U.S.$2.70 per ADS on the New York Stock Exchange. On
December 27, 2022, the Board of Directors of Grupo Supervielle decided to further increase the payable price related to the acquisition
of Grupo Supervielle’s Class B shares under the First Program to Ps.200.00 per Class B share. The First Program expired in March 2023
and it was not renewed. Under the First Program we acquired 11,093,572 Class B Shares and 591,384 ADSs, reaching an execution of
86.3% of the First Program and repurchasing 3.076% of the outstanding capital stock. Our annual ordinary and extraordinary
shareholders’ meeting held on April 19, 2024 resolved to delegate to our board of directors the authority to sell or dispose in the future
the treasury shares that the Group repurchased through the First Program in compliance with applicable regulations.
The following table sets forth the number of Class B Shares and ADSs repurchased under the First Program:
Class B Shares
Total
number
shares
purchased
of
ADSs
Average price
paid per share
(Ps., nominal)
Total number
of
shares
purchased as
part of
the
program
Total
number of
ADSs
purchased
Average
price paid
per ADS
(US$)
Total number
of
ADSs
purchased as
part of
the
program
number
Maximum
of
shares/Pesos that may yet be
purchased under the program
July 1, 2022 – July 31, 2022
August 1, 2022 – August 31, 2022
September 1, 2022 –September 30, 2022
October 1, 2022 – October 31, 2022
November 1, 2022 – November 30, 2022
December 1, 2022 – December 31, 2022
January 1, 2023 – January 31, 2023
February 1, 2023 – February 10, 2023
Total
—
1,137,018
2,128,463
1,041,403
2,988,175
2,058,632
1,480,381
259,500
11,093,572
-
102.456
112.771
114.185
114.902
133.670
166.116
188.422
125.187
-
1,137,018
3,265,481
4,306,884
7,295,059
9,353,691
10,834,072
11,093,572
—
141,416
56,528
393,440
—
—
—
—
591,384
—
1.925
1.783
1.849
—
—
—
—
1.861
—
141,416
197,944
591,384
—
—
—
—
in Shares
45,672,232
43,828,134
41,417,031
38,408,428
35,420,253
33,361,621
31,881,240
31,621,740
31,621,740
in Ps. Million
(nominal)
2,000
1,797
1,532
1,188
845
570
324
275
275
On April 19, 2024, the Group established the Second Program for the repurchase of the Group’s shares pursuant to Article 64
of Law 26,831 and CNV regulations. The Group decided to establish the Second Program taking into account (i) the current local
macroeconomic environment; (ii) the current trading price of shares that do not reflect the real value of the Company's assets or their
potential; and (iii) an environment of negative real interest rates in the local market.. In this regard, Grupo Supervielle believes that it is
convenient to implement the Second Program as a viable and efficient alternative to apply Grupo Supervielle’s excess cash position to
the benefit of Grupo Supervielle and its shareholders. In addition, Grupo Supervielle may purchase up to 10% of its capital stock pursuant
to Law No. 26,831, complying with the requirements and procedures set forth therein. If a purchase is made pursuant to Law No. 26,831,
Grupo Supervielle must resell the repurchased shares within three years and its shareholders will have preemptive rights to purchase the
shares, except in the case of an employee compensation program or plan, or in the case that the shares are distributed among all
shareholders on a pro rata basis or with respect to the sale of an amount of shares that in any 12-month period does not exceed 1% of
the Grupo Supervielle’s capital stock. In these cases, the three-year term may be extended with the prior approval of a shareholders’
meeting.
237
The Board of Directors approved the establishment of the following terms and conditions for the acquisition of its own shares
under the Second Program: (i) maximum amount of the investment: up to Ps.4 billion; (ii) maximum number of shares to be acquired:
up to 10% of the capital stock of Grupo Supervielle, as established by the applicable Argentine laws and regulations; (iii) payable price:
up to Ps.1,600 per Class B share and U.S.$8.00 per ADS on the New York Stock Exchange, and (iv) term for the acquisition: 120 days
as from the next day of the date of publication of the information in the Bolsa de Buenos Aires Daily Bulletin, subject to any renewal
or extension of the term, which will be informed to the public by the same means. As of the date of this annual report, under the Second
Program we acquired 550,000 Class B Shares.
The following table sets forth the number of Class B Shares repurchased under the Second Program:
Class B Shares
Total number
of shares
purchased
Average price
paid per share
(Ps., nominal)
Total number
of shares
purchased as
part of the
program
Total
number of
ADSs
purchased
ADSs
Average
price paid
per ADS
(US$)
Total number
of ADSs
purchased as
part of the
program
Maximum number of
shares/Pesos that may yet be
purchased under the program
April 19, 2024 – April 26, 2024
Total
550,000
550,000
1,262.54
1,262.54
550,000
550,000
—
—
—
—
—
—
31,071,740
31,071,740
in Shares
in Ps.
Million
(nominal)
3,306
3,306
As of the date of this annual report, we hold 14,600,492 Class B shares (including shares represented by ADSs) which
correspond to all the Class B Shares and ADSs acquired under the Programs.
Item 16.F Change in Registrant’s Certifying Accountant
None.
Item 16.G Corporate Governance
NYSE Corporate Governance Rules
Under NYSE rules, foreign private issuers are subject to more limited corporate governance requirements than U.S. domestic
issuers. As a foreign private issuer, we must comply with four principal NYSE corporate governance rules: (1) we must have an audit
committee meeting the independence requirements of Rule 10A-3, subject to specified exceptions; (2) our CEO must promptly notify
the NYSE in writing after any executive officer becomes aware of any non-compliance with the applicable NYSE corporate governance
rules; (3) we must provide the NYSE with annual and interim written affirmations as required under the NYSE corporate governance
rules; and (4) we must provide a brief description of any significant differences between our corporate governance practices and those
followed by U.S. companies under NYSE listing standards. The table below briefly describes the significant differences between our
corporate governance practice and the NYSE corporate governance rules, applicable to U.S. domestic companies.
Section
303A.01
NYSE corporate governance rule for U.S. domestic issuers
A listed company must have a majority of independent directors. “Controlled companies”
Our approach
Neither Argentine law nor our bylaws require us to have a
majority of independent directors. However, pursuant to
Section 109 of the Argentine Capital Markets Law, our
Audit Committee must be composed of at least three
members of the Board of Directors, with the majority of
independent directors; thus, we are required to have at least
two independent directors. Our Audit Committee is
composed of three independent directors in accordance
with the Exchange Act.
are not required to comply with this requirement.
238
Section
303A.02
or
NYSE corporate governance rule for U.S. domestic issuers
This section establishes general standards to determine directors’ independence. No
director qualifies as “independent” unless the Board of Directors affirmatively determines
that the director has no material relationship with the listed company (whether directly or
as a partner, shareholder, or officer of an organization that has a relationship with the
company), and emphasizes that the concern is independence from management. The board
is also required, on a case by case basis, to express an opinion with regard to the
independence
director.
(ii) In addition, in affirmatively determining the independence of any director who will
serve on the compensation committee of the listed company’s board of directors, the board
of directors must consider all factors specifically relevant to determining whether a
director has a relationship to the listed company which is material to that director’s ability
to be independent from management in connection with the duties of a compensation
committee member, including, but not limited to: (A) the source of compensation of such
director, including any consulting, advisory or other compensatory fee paid by the listed
company to such director; and (B) whether such director is affiliated with the listed
company, a subsidiary of the listed company or an affiliate of a subsidiary of the listed
company. (b) In addition, a director is not independent if:
independence,
individual
each
lack
of
of
Our approach
Pursuant to CNV Rules, a director is not considered
independent in certain situations, including where a
director: (a) is also a member of the board of directors of
the parent company or another company belonging to the
same economic group of the issuer through a pre-existing
relationship at the time of his or her election, or if said
relationship had ceased to exist during immediately the
previous three years; (b) is or has been associated with the
company or any of its shareholders having a direct or
indirect “significant participation” on the same, or with
corporations with which also the shareholders also have a
direct or indirect “signification participation”; or if he or
she was associated with them through an employment
relationship during the last three years; (c) has any
professional relationship or is a member of a corporation
that maintains frequent professional relationships of
significant nature and volume, or receives remuneration or
fees (other than the one received in consideration of his
performance as a director) from the issuer or its
shareholders having a direct or indirect “significant
participation” on the same, or with corporations in which
the shareholders also have a direct or indirect “significant
participation.” This prohibition includes professional
relationships and affiliations during the last three years
prior to his or her appointment as director; (d) directly or
indirectly owns 5% or more of shares with voting rights
and/or a capital stock of the issuer or any company with a
“significant participation” in it; (e) directly or indirectly
sells and/or provides goods and/or services (different from
those accounted for in section c)) on a regular basis and of
a significant nature and volume to the company or to its
shareholders with direct or
“significant
participation”, for higher amounts than his or her
remuneration as a member of the board of directors. This
prohibition includes business relationships that have been
carried out during the last three years prior to his or her
appointment as director;
indirect
A. the director is or has been within the last three years, an employee, or an immediate
family member is, or has been within the last three years, an executive officer, of the listed
company, its parent or a consolidated subsidiary. Employment as interim chairman or
CEO or other executive officer shall not disqualify a director from being considered
independent;
(f) has been a director, manager, administrator or principal
executive of not-for-profit organizations that have received
funds, for amounts greater than those described in section
I) of article 12 of Resolution No. 30/2011 of the UIF and
its amendments, from the issuer, its parent company and
other companies of the same group of which it is a part, as
well as of the principal executives of any of them;
239
Section
303A.03
303A.04
303A.05
NYSE corporate governance rule for U.S. domestic issuers
B. the director has received, or has an immediate family member who has received, during
any twelve-month period within the last three years, more than U.S.$120,000 in direct
compensation from the listed company, its parent or a consolidated subsidiary, other than
director and committee fees and pension or other forms of deferred compensation for prior
services (provided such compensation is not contingent in any way on continued service);
C. (i) the director is a current partner or employee of a firm that is the listed company’s
internal or external auditor; (ii) the director has an immediate family member who is a
current partner of such firm; (iii) the director has an immediate family member who is a
current employee of such firm and personally works on the company’s audit; or (iv) the
director or an immediate family member was within the last three years a partner or
employee of such firm and personally worked on the company’s audit within that time;
D. the director, or an immediate family member is, or has been with the last three years,
employed as an executive officer of another company where any of the listed company’s
present executive officers at the same time serves or served on that company’s
compensation committee; E. the director is a current employee, or an immediate family
member is a current executive officer, of a company that has made payments to, or
received payments from the listed company its parent or a consolidated subsidiary for
property or services in an amount which, in any of the last three fiscal years, exceeds the
greater of U.S.$1 million, or 2% of such other company’s consolidated gross revenues.
Our approach
(g) receives any payment, including the participation in
plans or stock option schemes, from the company or
companies of the same economic group, other than the
compensation paid to him or her as a director, except
dividends paid as a shareholder of the company in the terms
of section d) and the corresponding to the consideration set
forth in section e); (h) has served as member of the board
of director of the issuer, its parent company or another
company belonging to the same economic group for more
than ten years. If said relationship had ceased to exist
during the previous three years, the independent condition
will be recovered; (i) is the spouse or legally recognized
partner, relative up to the third level of consanguinity or up
to the second level of affinity of persons who, if they were
members of the board of directors, would not be
independent, according to the above listed criteria;
Pursuant to the CNV Rules, a director who, after his or her
appointment, falls into any of the circumstances indicated
above, must immediately report to the issuer, which must
inform the CNV and the authorized markets where it lists
its negotiable securities immediately upon the occurrence
of the event or upon the instance becoming known. In all
cases, the references made to “significant participation” set
forth in the aforementioned independence criteria will be
considered as referring to those individuals who hold
shares representing at least 5% of the capital stock and or
the vote, or a smaller amount when they have the right to
elect one or more directors by share class or have other
shareholders agreements relating to the government and
administration of the company or of its parent company.
Pursuant to the CNV Rules we are required to report to the
shareholders’ meeting, prior to voting for the appointment
of any director, the status of such director as either
“independent” or “non-independent.”
The non-management directors of a listed company must meet at regularly scheduled
executive sessions without management.
Neither Argentine law nor our bylaws require the holding
of such meetings and we do not hold non-management
directors meetings. The Argentine General Corporations
Lawprovides, however, that the board shall meet at least
once every three months, and according to our bylaws,
whenever the chairman considers necessary to convene for
a meeting.
A listed company must have a nominating/corporate governance committee composed
entirely of independent directors, with a written charter that covers certain minimum
specified duties. “Controlled companies” are not required to comply with this
requirement.
Pursuant to applicable local rules, we have an Ethics,
Compliance and Corporate Governance committee. We
also have a Nomination and Remuneration Committee
which, among other duties, advises the Board of Directors
on the nomination of directors.
A listed company must have a compensation committee composed entirely of independent
directors, with a written charter that covers certain minimum specified duties. “Controlled
companies” are not required to comply with this requirement.
Neither Argentine law nor our bylaws require the
establishment of a compensation committee. However, we
have a Nomination and Remuneration Committee which
advises the Board of Directors on: (a) the nomination of
directors and senior officers and their succession plans,
(b) the remuneration polices for the Board of Directors,
senior officers and
the personnel, and (c) Human
Resources policies, training and evaluation of the staff
performance.
240
303A.06
303A.07
A listed company must have an audit committee with a minimum of three independent
directors who satisfy the independence requirements of Rule 10A-3, subject to certain
specified exceptions, with a written charter that covers certain minimum specified duties.
(a) The audit committee must have a minimum of three members. All of its members shall
be financially literate or must acquire such financial knowledge within a reasonable period
of time after the appointment and at least one of its members shall have experience in
accounting or financial management. In addition to meeting any requirement of
Rule 10A-3 (b) (1), all audit committee members must satisfy the independence
requirements set out in Section 303A.02. (b) The audit committee must have a written
charter that establishes the duties and responsibilities of its members, including, at a
minimum, some of the duties and responsibilities required by Rule 10A-3 of the Exchange
Act and the following responsibilities set forth in NYSE Sections 303A.07(b)(iii)(A)-H)
of the NYSE Manual.
duties
performs
following
the same as
The responsibilities of an audit committee, as provided in
the Argentine Capital Markets Law and the CNV Rules are
essentially
those provided for under
Rule 10A-3, which we are required to satisfy. Argentine
law requires the audit committee be composed of three or
more members from the Board of Directors (with a
majority of independent directors), all of whom must be
well-versed in business, financial or accounting matters.
Our Audit Committee is composed of three independent
directors according to Rule 10A-3 and one of the members
is well-versed in business, financial and accounting
matters, in accordance with the requirements of the
Exchange Act. See “Item 6. Directors, Senior Management
and Employees—Audit Committee” section for further
details about the Audit Committee Composition. Our audit
committee
and
the
responsibilities among others:
a)
issues an opinion on the proposals made by the Board
of Directors to the shareholders regarding the appointment
of external auditors;
b)
analyses the services rendered by the external
auditors and their fees, ensures their independence, reviews
their planning and evaluates their performance, issuing an
opinion on this matter when the Group files its annual
financial statements;
c) maintains an understanding of the internal audit
policies to ensure that they are complete and up-to-date,
and approves such policies, submitting them to the Board
of Directors for their consideration and approval;
d)
ensures and evaluates the performance of the Internal
Audit function, establishing its human and budgetary
resources, approves the Annual Internal Audit Plan and
additional ad-hoc audits, and oversees compliance with the
Audit Plan, issuing an opinion on the planning and
performance of Internal Audit when the annual financial
statements of the Company are filed;
e)
reports are followed;
f)
oversees the sufficiency, adequacy and effectiveness
of the internal control systems, to ensure the reliability,
reasonableness, adequacy and transparency of the financial
statements and the financial and accounting information of
Grupo Supervielle;
g)
oversees the maintenance of adequate internal
controls by each of Grupo Supervielle’s subsidiaries to
minimize risk through the consolidation of best practices
with respect to each of the businesses;
h)
evaluates the quality of internal processes with the
aim of overseeing the quality control of customer service,
the risk control and the efficiency control in the operation
of Grupo Supervielle;
i)
takes knowledge of Grupo Supervielle’s financial,
reputational, legal and operational risks and oversees
compliance with policies designed to mitigate them and
with information policies on risk management;
j)
assists the Board of Directors in the supervision of
the financial statements, analyzing Grupo Supervielle’s
financial statements and
the consolidated financial
statements with its controlled and associate companies
prior to their presentation to the Board of Directors and
with the necessary depth to assess their reasonableness,
reliability and clarity;
k)
supervises the reliability of the financial information
and the information on significant events that are presented
to the markets and control agencies;
l)
in supervising
compliance with the established policies, processes,
procedures and rules established by Grupo Supervielle and
its controlled and associate companies;
ensures that the recommendations contained in audit
the Board of Directors
assists
241
Section
NYSE corporate governance rule for U.S. domestic issuers
Our approach
on
issues
opinions
verifies the fulfillment of any applicable rules of
ensures that the Code of Ethics and Internal Codes of
m)
takes knowledge of compliance with the applicable
regulations in matters related to conduct in the securities
markets, data protection, as well as that the requirements
of the competent bodies on these matters are addressed in
a timely and appropriate manner;
n)
Conduct comply with current rules and regulations;
o)
conduct;
p)
takes notice of complaints regarding accounting,
internal control over financial reporting and auditing
matters, received through the applicable procedures;
q)
provides the market with complete information on
transactions in which there may be a conflict of interest
with members of our various corporate bodies or
controlling shareholders;
r)
related-party
grounded
transactions under certain circumstances and files such
opinions with regulatory agencies as required by the CNV;
s)
issues an opinion on the reasonableness of fees and
stock option plans for our Directors and managers
proposed by the Board of Directors;
t)
Directors to buyback shares of the Company;
u)
issues an opinion on the fulfillment of legal
requirements and on the reasonableness of the terms of the
issuance of shares or other securities that are convertible
into shares, in cases of capital increase in which preemptive
rights are excluded or limited;
v)
at least once a year and upon the filing of the
Company´s annual financial statements, issues a report to
the Board and shareholders addressing the work done to
perform its duties, and the results of its work;
w) prepares an action plan for each fiscal year, which
must be presented to the Board of Directors and the
Supervisory Committee within sixty calendar days of the
beginning of the fiscal year; and
x)
bylaws, laws and regulations;
issues a report before any decision of the Board of
performs all other duties stated in its charter, our
A. at least annually, obtain and review a report by the independent auditor describing: the
firm’s internal quality-control procedures; any material issues raised in the most recent
internal quality-control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities, within the preceding five years,
with respect to one or more independent audits carried out by the firm, and any steps taken
to deal with any such issues; and (to assess the auditor’s independence) all relationships
between the independent auditor and the listed company; B. meet with management and
the independent auditor to review and discuss the listed company’s annual audited
financial statements and quarterly financial statements, including a review of the
company’s specific disclosures under Operating and Financial Review and Prospects”; C.
discuss the listed company’s earnings press releases, as well as financial information and
earnings guidance provided to analysts and rating agencies; D. discuss risk assessment
and risk management policies; E. hold separate regular meetings with management, the
internal auditors (or other personnel responsible for the internal audit function) and the
independent auditors; F. review any issue or difficulty arising from the audit or
management’s response with the independent auditor; G. set clear policies for the
recruitment of employees or former employees of the independent auditors; and H. report
regularly to the board of directors. (c) Rule 303A.07(c) establishes that each listed
company must have an internal audit function to provide management and the audit
committee with ongoing advice on the company’s risk management processes and internal
control systems.
242
Section
303A.08
303A.09
303A.10
303A.12
NYSE corporate governance rule for U.S. domestic issuers
If a member of the audit committee is simultaneously a member of the audit committee
of more than three public companies the board of directors shall determine whether such
simultaneous service would prevent such members from effectively serving on the listed
company’s audit committee, and disclose such determination in the order of business of
the annual shareholders’ meeting of the listed company or in the company’s annual report
on Form 10-K filed with the SEC.
Our approach
Shareholders must be given the opportunity to vote on all equity-compensation plans and
material revisions thereto, with limited exemptions set forth in the NYSE rules.
We do not currently offer equity-based compensation to
our directors, executive officers or employees, and have no
policy on this matter.
A listed company must adopt and disclose corporate governance guidelines that cover
certain minimum specified subjects, including director’s standards and responsibilities
The CNV Rules contain
recommended Corporate
Governance guidelines for listed companies and the Board
of Directors must include on its annual report, the level of
compliance of such guidelines. Since 2011, we have in
place a Code of Corporate Governance which contains
corporate governance guidelines. Our Code of Corporate
Governance is subject to periodic revision in order to
comply with the latest applicable regulations and standards
and to include up-to-date best market practices. The latest
revision of our Code of Corporate Governance was
approved in October 2019.
A listed company must adopt and disclose a code of business conduct and ethics for
directors, officers and employees, and promptly disclose any waivers of the code for
directors or executive officers. Each listed company may determine its own policies,
which should address conflicts of interest, corporate opportunities, confidentiality, fair
dealing, protection and proper use of listed company assets, compliance with laws,
rules and regulations, and encouraging the reporting of any illegal or unethical behavior.
Neither Argentine law nor our bylaws require the adoption
or disclosure of a code of business conduct. We, however,
have adopted a code of business conduct and ethics that
applies to all of our employees.
a) Each listed company CEO must certify to the NYSE each year that he or she is not
aware of any violation by the company of NYSE corporate governance listing standards.
b) Each listed company CEO must promptly notify the NYSE in writing after any
executive officer of the listed company becomes aware of any non-compliance with any
applicable provisions of this Section 303A. c) Each listed company must submit an
executed Written Affirmation annually to the NYSE. In addition, each listed company
must submit an interim Written Affirmation as and when required by the interim Written
Affirmation form specified by the NYSE.
Comparable provisions do not exist under Argentine law
and CNV Rules.
Item 16.H Mine Safety Disclosure
Not applicable.
Item 16.I Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Item 16.K Cybersecurity
Risk management and strategy
Cybersecurity is one of our strategic priorities and one of the pillars of our digital transformation. Our information security
team defines the strategy, policies, practices, procedures, and organizational structure which we use to identify, analyze, evaluate,
measure, mitigate, and monitor cybersecurity risks. We work together with various teams of our organization to conduct continuous
analysis of potential failures, vulnerabilities or risks that may impact our processes and products.
Our information security strategy is based on the following three security frameworks: defense in depth, security by design,
and zero trust. During 2023, we focused on improving the level of maturity our systems using the Center for Internet Security controls
framework and the maturity model of Amazon Web Services, both of which are based on internationally recognized cybersecurity best
243
practices. Additionally, we adapted and improved our controls according to new regulations of regulatory bodies such as the Central
Bank. This strategy is implemented by a multidisciplinary group of information security professionals who work full-time and operate
in an agile and collaborative manner. They collaborate not only among themselves but also with our business teams to maintain and
develop new products.
Our security professionals are organized in the following teams: (i) a “green team” who is responsible for managing digital
identities, (ii) a “red team” whose mission is to conduct vulnerability assessment and penetration tests, (iii) a “blue team” who is focused
on protecting information assets and providing security products to each of the product-building cells, while fostering the implementation
of defense methods in regards to the findings made by the “red team”, and (iv) a “purple team” who is assembled ad hoc with members
from the blue and red teams to conduct retrospective analyses. All these teams manage and mitigate cybersecurity risks on a regular
basis. These teams work in bi-weekly sprints, holding daily and weekly meetings where information related to the progress of ongoing
projects, new products, risks and threats is exchanged and analyzed. Executive summaries of all the activities carried out by these teams
are compiled, analyzed, and discussed bi-monthly in meetings of our Cybersecurity Committee, which are attended by senior
management, directors, and the Company’s chairman.
As cyber-attacks evolve and become more sophisticated, companies must strengthen their prevention and monitoring efforts
and adopt new measures to mitigate cybersecurity risks. In recent years, the average number of cybersecurity incidents has increased
significantly worldwide. As a result, in 2023, one of our goals was to prevent the most common cyberattacks, which are related to
ransomware, smishing, phishing, brand abuse, among others, ant to maintain ratios below the competition. Therefore, we have enhanced
our system monitoring capabilities, paying special attention to critical assets that support business processes. Additionally, we have
incorporated machine learning and artificial intelligence to achieve automation and improve efficiency in our security services. Our
cybersecurity Security Operations Center (“SOC”), which operated by a third party, enables us to detect and respond to cyber-attacks.
In addition, our threat intelligence service proactively detects potential cyber-attacks on our infrastructure and/or ours customers through
the analysis of Clear, Deep, and Dark web sources. We will promptly report any material incidents to the supervisory or regulatory
authorities.
Every year we carry out a mandatory security assessment on SWIFT infrastructure, one of the main targets of cyber-attacks,
achieving a full compliance rate by December 2023 with both mandatory and recommended controls.
We believe that our proactive and innovative approach towards cybersecurity strengthens our resilience against cyber threats,
which are constantly evolving, and consolidates our position as leaders in digital defense. We consider that ensuring effective protection
of our assets and customer data is key to our business. In response to evolving cyber threats, we have undertaken various projects to
enhance our security systems. For example, we implemented a new event monitoring service, network micro-segmentation, threat
intelligence, incident response system, early detection and ransomware recovery, and internal awareness through a virtual campus which
is available to all our subsidiaries.
We have information classification policies to assign a level of criticality to the data that we manage which we use to adopt
security measures. This allows us to protect the information we handle and to ensure an adequate treatment of that information. In
addition, we routinely inspect and test our security processes and procedures through simulation exercises. As an example the “red
team,” specialized in offensive security, regularly conducts technical security tests to detect security vulnerabilities. These tests include
technical assessments of technological platforms, social engineering attacks and ethical phishing. Our Security Champions and
Ambassadors model also allows us to monitor that all the business initiatives we participate in and their underlying technologies are
secure.
In order to keep our clients informed about the security of the transactions carried out through our digital channels, in 2023,
we implemented a strong communication campaign which involved renewing the design of communication pieces and updating our
security tips for social media, virtual scam methodologies, cases of social engineering, phishing, and fake accounts. This campaign
consisted of emails, audiovisual content, and tutorials on social platforms such as Facebook, Instagram, Twitter ("X") and YouTube,
which we distributed on a monthly basis. Additionally, we posted a blog about cybersecurity on our website through which we provide
contact details for victims of scams and banners that we replicated in our apps.
Based on the information we have as of the date of this Form 20-F, we do not believe any cybersecurity threats have materially
affected or are reasonably likely to materially affect the Bank, including our business strategy, results of operations or financial
condition. However, despite our efforts to identify and respond to cybersecurity threats, we cannot eliminate all risks from cybersecurity
threats, or provide assurances that we have not experienced an undetected cybersecurity incident. For more information about these
244
risks, see “Item 3.D. Risk Factors—Risks Relating to Our Business—Cybersecurity events could negatively affect our reputation, our
financial condition and our results of operations.”
Governance
To ensure that the Company’s security strategy is implemented efficiently, we have established a security governance model.
This security governance model has been prepared by committees responsible for approving and supervising the execution of the
information security strategy in areas such as corporate security and risk management.
While the primary responsibility for cybersecurity lies with our CISO, who has more than 30 years of experience and extensive
academic training in cyber defense and cryptography, we recognize the importance to collaborate with other experts and we highly value
the diversity of expert opinions.
In addition to our CISO, our Cybersecurity Committee plays a key role in implementing our information security strategy. Our
Cybersecurity Committee is composed of the following members: two directors of Grupo Supervielle, the CEO of Grupo Supervielle,
the CEO of Banco Supervielle S.A., the Chief Risk Officer, the Corporate Audit team, and the CISO of Grupo Supervielle and Banco
Supervielle. Additionally, the Chief Technology Officers and the Chief Information Officer of our subsidiaries participate in the
meetings of our Cybersecurity Committee.
Our Operational Risk Committee analyzes deviations to our information security policy and adopts decisions in line with the
Group’s risk appetite. This committee reports to the Integral Risk Committee which discusses cybersecurity matters and reports to our
Board of Directors. Our Operational Risk Committee communicates every month all the decisions taken by it. In compliance with
regulatory standards, our Operational Risk Committee convenes periodically to fulfill its primary objective of reviewing reports
submitted by the Group’s non-financial risk management department. These reports provide thorough evaluations encompassing
operational and technological risks, reputational risks, supplier risks, and environmental risks. Additionally, these reports include
assessments of potential deviations in planned evaluation processes.
Moreover, our Operational Risk Committee oversees the implementation of mitigation plans, key risk indicators, and internal
control reports. As part of its responsibilities, this committee offers recommendations to address emerging risks or enhance risk
management strategies. The composition of the Operational Risk Committee includes key members such as the Deputy General
Manager, the Corporate Manager of Comprehensive Risks, the Chief Risk Officer, the Corporate Manager of Legal Affairs, the
Corporate Manager of Internal Audit, the Corporate Manager of Transformation, the Executive Manager of Comprehensive Risks, the
Compliance Manager and SOX Manager.
Our Board of Directors regularly receives cybersecurity updates as an integral part of its ongoing risk oversight from the Board
committees. Additionally, the Chief Information Officer, the Chief Risk Officer and the Chief Information Security Officer may convene
ad hoc meetings with board members. Our incident response plan set forth procedures for incident escalation, including convening crisis
committees comprised by members of our Board of Directors, in order to facilitate decision-making procedures in response to
cybersecurity events. Our crisis committees analyze the quantitative and/or qualitative materiality of cybersecurity events to determine
if they exceeds the materiality thresholds and the actions to be taken in response thereto, which enables us to adopt swift and effective
responses to mitigate potential impacts on our operations and reputation.
Item 17. Financial Statements
Not applicable.
Item 18. Financial Statements
Our audited consolidated financial statements are included in this annual report beginning at Page F-1.
245
Item 19. Exhibit Index
Exhibit
Number
1.1
2.1
Bylaws of Grupo Supervielle (English translation), as amended (filed herein).
Deposit Agreement among Grupo Supervielle, The Bank of New York Mellon, as depositary, and the holders from
time to time of American depositary shares issued thereunder, including the form of American depositary receipts,
dated May 18, 2016 (incorporated by reference to Exhibit 2.1 to our Annual Report on Form 20-F (File
No. 001-37777) filed on May 1, 2017).
Description
2(d)
Description of Securities Registered under Section 12(b) of the Exchange Act (incorporated by reference to Exhibit
2(d) to our Annual Report on Form 20-F (File No. 001-37777) filed on April 26, 2023).
8.1
12.1
12.2
13.1
List of subsidiaries of Grupo Supervielle as of the date of this annual report (filed herein).
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herein).
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herein).
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (filed herein).
97
101. INS
Incentive Compensation Clawback Policy (filed herein).
Inline XBRL Instance Document.
101. SCH
101. CAL
Inline XBRL Taxonomy Extension Schema Document.
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101. LAB
101. PRE
101. DEF
Inline XBRL Taxonomy Extension Label Linkbase Document.
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
Inline XBRL Taxonomy Extension Definition Linkbase Document.
104
Cover Page Interactive Data File (formatted as Inline XBRL).
The amount of long-term debt securities of Grupo Supervielle authorized under any given instrument does not exceed 10% of
its total assets on a consolidated basis. Grupo Supervielle hereby agrees to furnish to the SEC, upon its request, a copy of any instrument
defining the rights of holders of its long-term debt or of its subsidiaries for which consolidated or unconsolidated financial statements
are required to be filed.
246
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.
SIGNATURES
GRUPO SUPERVIELLE S.A.
By: /s/ Julio Patricio Supervielle
Name: Julio Patricio Supervielle
Title: Chief Executive Officer
By: /s/ Mariano Biglia
Name: Mariano Biglia
Title: Chief Financial Officer
Date: April 26, 2024
247
Consolidated Financial Statements
As of December 31, 2023, 2022 and
for the years ended December 31, 2023, 2022 and 2021
Contents
F-2
Report of the Independent Registered Public Accounting Firm (PCAOB 1349)
Consolidated Statements of Financial Position as of December 31, 2023 and 2022ConsolidatedStatementsofFinancialPositio F-5
F-7
Consolidated Income Statement for the years ended December 31, 2023, 2022 and 2021
F-8
Consolidated Statement of Other Comprehensive Income for the years ended December 31, 2023, 2022 and 2021
F-9
Consolidated Statement of Changes in Shareholders’ Equity for the years ended December 31, 2023, 2022 and 2021
F-10
Consolidated Statement of Cash Flow for the years ended December 31, 2023, 2022 and 2021
F-11
Notes to Consolidated Financial Statements
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Grupo Supervielle S.A.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statement of financial position of Grupo Supervielle S.A. and its subsidiaries
(the “Company”) as of December 31, 2023 and 2022, and the related consolidated income statement, consolidated statement of other
comprehensive income, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flow for each of
the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial
statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2023 in conformity with IFRS Accounting Standards as issued by the International Accounting
Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting
as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in
Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on
our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether
due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
F-2
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures
that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or
on the accounts or disclosures to which they relate.
Fair value of financial instruments that do not have an active market
As described in Notes 2.a and 6.1 to the consolidated financial statements, the fair value of financial instruments not listed in
active markets is determined based on valuation techniques. The balance of this type of instruments as of December 31, 2023 is
Ps.16,121,461 thousand. Included in this balance are Ps.15,804,570 thousand of financial assets which are classified as Level 2. These
financial instruments are priced using internal methods and assumptions that management believes a hypothetical market participant
would use to determine a current transaction price. The significant assumptions used by management to value the financial instruments
included implicit rates in the last available tender for similar securities and spot rate curves. These valuation techniques require
management to make estimates and judgments for complex instruments involving pricing models.
The principal considerations for our determination that performing procedures relating to fair value of financial instruments
that do not have an active market is a critical audit matter are the significant judgment made by management to determine the fair value
of these financial instruments due to the use of an internally-developed model, which included significant assumptions related to the
implicit rates in the last available tender for similar securities and spot rate curves; this in turn led to a high degree of auditor subjectivity
and judgment to evaluate the audit evidence obtained related to the valuation, and the audit effort involved the use of professionals with
specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the fair value
of financial instruments that do not have an active market. These procedures also included, among others, testing management process
for (i) evaluating the reasonableness of implicit rates in the last available tender for similar securities and spot rate curves and the
appropriateness of the valuation models used; (ii) testing the mathematical accuracy of the valuation techniques; and (iii) testing the
completeness and accuracy of data provided by management. Professionals with specialized skill and knowledge were used to assist in
the evaluation of the appropriateness of valuation method and the evaluation of implicit rates in the last available tender for similar
securities and spot rate curves.
F-3
Estimation of the allowance for loan losses of financial assets measured at amortized cost and fair value through OCI
As described in Notes 1.11.2, 1.11.6, 2.b and 25 to the consolidated financial statements, the Company’s allowance for loan
losses was Ps.17,448,828 thousand as of December 31, 2023. The Company assesses impairment under the expected credit losses method
described in International Financial Reporting Standard N°9 “Financial Instruments” (“IFRS 9”). Management’s models used to
determine the expected credit loss include the use of significant judgement, and assumptions such as the definition of what is considered
to be a significant increase in credit risk and the development of assumptions and estimates to incorporate relevant information about
past events, current conditions and forecasts of economic conditions. The impact of the forecasts of economic conditions are determined
based on the weighted average of three internally developed macroeconomic scenarios that take into consideration the Group´s economic
outlook as derived through forecast macroeconomic variables, which include inflation rate, monthly economic activity estimator,
exchange rate, monetary policy rate, private sector real loans and private sector real wage.
The principal considerations for our determination that performing procedures relating to the estimation of the allowance for
loan losses of financial assets measured at amortized cost and fair value through OCI is a critical audit matter are: (i) that is an area
highly subjective that involves a significant amount of judgment and effort in developing the valuation models for determining the
allowance for loan losses, (ii) the significant judgments and estimations made by management in both the forecast of macroeconomic
variables, which include inflation rate, monthly economic activity estimator, exchange rate, monetary policy rate, private sector real
loans and private sector real wage and in the definition of what is considered to be a significant increase in credit risk, both of which
significantly affect its estimate of expected credit losses at the balance sheet date, (iii) the audit of these figures involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s allowance for loan losses estimation process, which included controls over the data, models and assumptions used in the
estimation process. These procedures also included, among others, (i) evaluating models used by management, the reasonableness of
significant assumptions of forecasts of macroeconomic variables, which include inflation rate, monthly economic activity estimator,
exchange rate, monetary policy rate, private sector real loans and private sector real wage, the methodology used for the generation of
the macroeconomic scenarios (ii) evaluating the definition of what is considered to be a significant increase in credit risk (iii) testing the
mathematical accuracy of the impairment calculation for the credit balances (iv) testing the completeness and accuracy of data provided
by management. Professionals with specialized skill and knowledge were used to assist in evaluating and testing the appropriateness of
the models used by management and the reasonableness of the definition of what is considered to be a significant increase in credit risk,
the assumptions and estimates made by Management to incorporate relevant information about past events, current conditions and
forecasts of economic conditions.
/s/ PRICE WATERHOUSE & Co. S.R.L.
/s/ MARIA MERCEDES BAÑO (Partner)
Maria Mercedes Baño
Buenos Aires, Argentina
April 26, 2024.
We have served as the Company’s auditor since 2008.
F-4
GRUPO SUPERVIELLE S.A.
Consolidated Statement of Financial Position
As of December 31, 2023 and 2022
(Expressed in thousands of pesos)
ASSETS
Cash and due from banks (Note 1.6 and 5)
Cash
Financial institutions and correspondents
Argentine Central Bank
Other local financial institutions
Others
Debt Securities at fair value through profit or loss (Note 1.6, 1.8, 5, 6 and 15.1)
Derivatives (Note 1.9, 5, 6, 9 and 15.2)
Reverse Repo transactions (Note 5 and 8)
Other financial assets (Note 1.6, 5, 6 and 15.3)
Loans and other financing (Note 5 and 25)
To the non-financial public sector
To the financial sector
To the Non-Financial Private Sector and Foreign residents
Other debt securities (Note 5, 6 and 15.4)
Financial assets pledged as collateral (Note 5, 6 and 15.5)
Current income tax assets
Inventories (Note 15.6)
Investments in equity instruments (Note 5 and 6)
Property, plant and equipment (Note 12)
Investment Property (Note 13)
Intangible assets (Note 14)
Deferred income tax assets (Note 4.1)
Other non-financial assets (Note 15.7)
TOTAL ASSETS
The accompanying notes are an integral part of these Consolidated Financial Statement.
12/31/2023
12/31/2022
229,098,272
114,005,581
150,719,643
59,547,824
103,634,933
10,241,998
1,215,760
46,415,822
3,795,093
755,708,132
46,499,784
482,455,084
2,070,115
4,006,546
476,378,423
251,180,541
46,382,606
—
—
365,985
51,151,635
45,597,064
67,634,055
12,960,099
18,763,829
2,058,008,001
84,654,328
6,428,404
89,087
69,707,595
920,381
67,206,248
25,246,191
728,474,749
864,785
2,007,125
725,602,839
839,975,567
45,056,529
3,039,566
208,923
1,565,010
57,217,390
52,637,396
69,368,706
37,997,568
16,647,728
2,165,989,190
F-5
GRUPO SUPERVIELLE S.A.
Consolidated Statement of Financial Position
As of December 31, 2023 and 2022
(Expressed in thousands of pesos)
LIABILITIES
Deposits (Note 5 and 15.8)
Non-financial public sector
Financial sector
Non-financial private sector and foreign residents
Liabilities at fair value through profit or loss (Note 5 and 15.9)
Repo transactions (Note 5 and 8)
Other financial liabilities (Note 5 and 15.10)
Financing received from the Argentine Central Bank and other financial institutions (Note
1.6, 5 and 15.11)
Unsubordinated debt securities (Note 1.6, 5 and 23)
Current income tax liability
Provisions (Note 15.12 and 16 )
Deferred income tax liabilities (Note 4.1)
Other non-financial liabilities (Note 15.13)
TOTAL LIABILITIES
SHAREHOLDERS' EQUITY
Capital stock
Paid in capital
Inflation Adjustment of capital stock
Treasury shares
Inflation adjustment of treasury shares
Cost of Treasury shares
Reserves
Retained earnings
Other comprehensive income
Net Income/ (loss) for the year
Shareholders' Equity attributable to owners of the parent company
Shareholders' Equity attributable to non-controlling interests
TOTAL SHAREHOLDERS' EQUITY
The accompanying Notes are an integral part of these Consolidated Financial Statement.
12/31/2023
12/31/2022
1,548,928,056
100,747,830
476,539
1,447,703,687
607,903
940,332
72,738,928
1,705,009,583
86,705,591
315,861
1,617,988,131
6,661,539
—
56,381,855
2,691,969
—
737,181
14,897,667
1,614,907
73,200,297
1,716,357,240
17,219,834
1,748,271
—
5,267,946
565,339
85,591,165
1,878,445,532
442,672
254,538,548
27,960,909
14,050
2,944,946
(5,166,412)
4,307,608
(6,949,145)
11,668,481
51,615,837
341,377,494
273,267
341,650,761
444,411
264,229,227
28,325,583
12,311
2,580,272
(4,307,608)
19,308,569
(15,985,874)
8,364,164
(15,654,911)
287,316,144
227,514
287,543,658
F-6
GRUPO SUPERVIELLE S.A.
Consolidated Income Statement
For the financial years ended December 31, 2023, 2022 and 2021
(Expressed in thousands of pesos)
Interest income (Note 15.14)
Interest expenses (Note 15.15)
Net interest income
Net income from financial instruments measured at fair value through profit or loss (Note 15.16)
Result from derecognition of financial assets measured at amortized cost
Exchange rate differences on gold and foreign currency
Net Income From Financial instruments And Exchange Rate Differences
Net Financial Income
Service Fee Income (Note 15.17)
Service Fee Expense (Note 15.18)
Income from insurance activities (Note 15.19)
Net Service Fee Income
Subtotal
Results from exposure to changes in the purchasing power of money
Other operating income (Note 15.20)
Impairment losses on financial assets
Net operating income
Personnel expenses (Note 15.21)
Administration expenses (Note 15.22)
Depreciation and impairment of non-financial assets (Note 15.23)
Other operating expenses (Note 15.24)
Income / (Loss) before taxes
Income tax (Note 4)
Net Income / (Loss) for the year
Net Income / (Loss) for the year attributable to owners of the parent company
Net Income / (Loss) for the year attributable to non-controlling interests
NUMERATOR
Net Income / (Loss) for the year attributable to owners of the parent company
PLUS: Diluting events inherent to potential ordinary shares
Net income attributable to owners of the parent company adjusted by dilution
DENOMINATOR
Weighted average of oustanding ordinary shares
Weighted average of oustanding ordinary shares issued of the period adjusted by dilution effect
Basic Income
Diluted Income
12/31/2023
1,157,697,255
(825,494,087)
332,203,168
138,081,046
16,857,100
5,800,908
160,739,054
492,942,222
93,125,252
(24,176,077)
14,431,313
83,380,488
576,322,710
(108,923,511)
23,688,747
(33,640,071)
457,447,875
(160,395,452)
(84,438,694)
(31,931,273)
(94,289,712)
86,392,744
(34,734,935)
51,657,809
51,615,837
41,972
12/31/2022 12/31/2021
627,418,680
(366,990,536)
260,428,144
53,923,603
1,541,901
6,019,802
61,485,306
321,913,450
101,091,634
(30,818,243)
13,777,397
84,050,788
405,964,238
(47,361,901)
32,616,164
(54,168,977)
337,049,524
(155,237,181)
(93,147,074)
(25,629,749)
(71,870,346)
(8,834,826)
(1,697,922)
(10,532,748)
(10,521,726)
(11,022)
784,354,347
(515,399,394)
268,954,953
56,821,678
1,531,618
8,541,784
66,895,080
335,850,033
94,478,177
(33,392,724)
14,104,154
75,189,607
411,039,640
(55,271,939)
32,671,074
(44,129,627)
344,309,148
(167,825,508)
(88,946,808)
(31,447,803)
(82,925,021)
(26,835,992)
11,164,078
(15,671,914)
(15,654,911)
(17,003)
51,615,837
—
51,615,837
(15,654,911)
—
(15,654,911)
(10,521,726)
—
(10,521,726)
442,727
442,727
116.59
116.59
454,274
454,274
(34.46)
(34.46)
456,722
456,722
(23.04)
(23.04)
The accompanying notes and schedules are an integral part of the Consolidated Financial Statement.
F-7
GRUPO SUPERVIELLE S.A.
Consolidated Statement of Other Comprehensive Income
For the years ended December 31, 2023, 2022 and 2021
(Expressed in thousands of pesos)
12/31/2023
51,657,809 (15,671,914) (10,532,748)
12/31/2022
12/31/2021
(703,959)
246,386
637,240
(1,307,425)
(670,185)
(2,611,299)
913,953
(1,697,346)
(2,093,627)
732,769
(1,360,858)
Net Income / (loss) for the year
Components of Other Comprehensive Income that will not be reclassified to profit
or loss
Revaluation (Losses)/Surplus of property, plant and equipment
Income tax
Net revaluation surplus of property, plant and equipment
(Loss) / income from equity instruments at fair value through other comprehensive
income
Income tax
Net Income / (loss) from equity instruments at fair value through other
comprehensive income
Total Other Comprehensive Income that will not be reclassified to profit or loss
Components of Other Comprehensive Income that may be reclassified to profit or
loss
Income/(loss) from financial instruments at fair value through other comprehensive
income
Income tax
Net income/ (loss) from financial instruments at fair value through other
314,129
comprehensive income
2,457
Foreign currency translation adjustment
2,457
Foreign currency translation adjustment for the fiscal year
316,586
Other Comprehensive Income / (loss) that may be reclassified to profit or loss
(325,915)
Other Comprehensive Income / (loss)
(325,499)
Other comprehensive Income / (loss) attributable to parent company
(416)
Other comprehensive Income / (loss) attributable to non-controlling interest
54,965,907 (19,287,913) (10,858,663)
Comprehensive Income / (loss)
Comprehensive Income / (loss) for the year attributable to owners of the parent company 54,920,154 (19,267,084) (10,847,225)
(11,438)
Comprehensive Income / (loss) for the year attributable to non-controlling interest
(2,013,630)
190,121
190,121
(1,823,509)
(3,615,999)
(3,612,173)
(3,826)
4,683,672
442,857
442,857
5,126,529
3,308,098
3,304,317
3,781
(457,573)
(1,818,431)
7,370,679
(2,687,007)
(95,144)
(1,792,490)
(3,162,706)
1,149,076
(146,377)
51,233
27,684
(642,501)
729,740
(415,611)
23,960
3,724
(20,829)
45,753
The accompanying notes are an integral part of these Consolidated Financial Statement.
F-8
GRUPO SUPERVIELLE S.A.
Consolidated Statement of Changes in Shareholders’ Equity
For the financial years ended on December 31, 2023, 2022 and 2021
(Expressed in thousands of pesos)
Items
Balance at December 31, 2020
Distribution of retained earnings by the
shareholders’ meeting on April 27, 2021:
- Other reserves
- Dividend distribution
Net loss for the year
Other comprehensive income for the year
Balance at December 31, 2021 (IFRS 4)
Adjustment IFRS17
Balance at December 31, 2021
Other movements
Share premium in subsidiaries
Distribution of retained earnings by the
shareholders’ meeting on April 27, 2022:
Use of reserves
Dividend payment
Acquisition of own shares
Net Income for the year
Other comprehensive income for the year
Balance at December 31, 2022
Distribution of retained earnings by the
shareholders’ meeting on April 27, 2023:
Use of reserves
Share premium in subsidiaries
Constitution of reserves
Dividend distribution
Acquisition of Treasury shares
Net Income for the year
Other comprehensive Income for the year
Balance at December 31, 2023
Capital
Inflation
adjustment
stock
456,722
of capital
Stock
30,905,855
Paid in
Treasury
capital
264,229,227
shares
—
—
—
—
—
456,722
—
456,722
—
—
—
—
—
—
30,905,855
—
30,905,855
—
—
—
—
—
—
264,229,227
—
264,229,227
—
—
—
—
(12,311)
—
—
444,411
—
—
(2,580,272)
—
—
28,325,583
—
—
—
—
—
264,229,227
—
—
—
—
(1,739)
—
—
442,672
—
—
—
—
(364,674)
—
—
27,960,909
(9,690,679)
—
—
—
—
—
—
254,538,548
—
—
—
—
—
—
—
—
—
—
—
12,311
—
—
12,311
—
—
—
—
1,739
—
—
14,050
Inflation
adjustment
of treasury
shares
Cost of
of treasury
shares
Inflation
adjustment
of cost of
treasury
shares
Other
Shareholders´ equity
Total
Total
Shareholders´
equity attributable
Total
Legal
Other
Retained
comprehensive attributable to parent
to non-controlling
shareholders´
—
—
—
—
—
reserve
reserves
earnings
18,551,566
income
12,283,204
company
interest
326,426,574
259,613
equity
326,686,187
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
3,226,099
—
—
—
3,226,099
—
3,226,099
—
—
24,893,404
—
—
—
24,893,404
—
24,893,404
—
—
(28,119,499)
(3,122,242)
(10,521,726)
—
(23,211,901)
(34,585)
(23,246,486)
(18,632)
—
—
—
2,580,272
—
—
2,580,272
—
—
(385,448)
—
—
(385,448)
—
—
(3,922,160)
—
—
(3,922,160)
—
—
—
—
—
3,226,099
(7,279,244)
(1,531,690)
—
—
—
16,082,470
7,279,244
—
—
(15,654,911)
—
(31,640,785)
—
—
—
—
364,674
—
—
2,944,946
—
—
—
—
(295,449)
—
—
(680,897)
—
—
—
—
(563,355)
—
—
(4,485,515)
(3,226,099)
—
—
—
—
—
—
—
(11,774,862)
—
—
—
—
—
—
4,307,608
24,691,640
—
—
—
—
51,615,837
—
44,666,692
—
—
—
(325,499)
11,957,705
—
11,957,705
18,632
—
—
—
—
—
(3,612,173)
8,364,164
—
—
—
—
—
—
3,304,317
11,668,481
4
(3,122,242)
(10,521,726)
(325,499)
312,457,111
(34,585)
312,422,526
—
—
—
(1,531,690)
(4,307,608)
(15,654,911)
(3,612,173)
287,316,144
—
—
—
—
(858,804)
51,615,837
3,304,317
341,377,494
—
—
(11,022)
(416)
248,175
—
248,175
—
168
4
(3,122,242)
(10,532,748)
(325,915)
312,705,286
(34,585)
312,670,701
—
168
—
—
—
(17,003)
(3,826)
227,514
—
(1,531,690)
(4,307,608)
(15,671,914)
(3,615,999)
287,543,658
—
—
—
—
—
41,972
3,781
273,267
—
—
—
—
(858,804)
51,657,809
3,308,098
341,650,761
The accompanying notes are an integral part of these Consolidated Financial Statement.
F-9
GRUPO SUPERVIELLE S.A.
Consolidated Statement of Cash Flow
For the financial years ended on December 31, 2023, 2022 and 2021
(Expressed in thousands of pesos)
Cash flow from operating activities
Net Income /(loss) for the year
Adjustments to obtain flows from operating activities:
Income tax
Depreciation and Impairment of non - financial assets
Impairment losses on financial assets
Other adjustments:
Exchange rate difference on gold and foreign currency
Interest Income from loans and other financings
Interest Expense from deposits and financing received
Net income financial assets measured at fair value through profit or loss
Fair value measurement of investment properties
Results from exposure to changes in the purchasing power of money
Interest on liabilities for financial leases
Provisions reversed
Result from derecognition of financial assets measured at amortized cost
(Increases) / decreases from operating assets:
Debt securities at fair value through profit or loss
Derivatives
Reverse Repo transactions
Loans and other financing
To the non-financial public sector
To the other financial entities
To the non-financial sector and foreign residents
Other debt securities
Financial assets pledged as collateral
Other assets
Increases / (decreases) from operating liabilities:
Deposits
Non-financial public sector
Financial sector
Private non-financial sector and foreign residents
Derivatives
Repo transactions
Liabilities at fair value through profit or loss
Other liabilities
Income Tax paid
Net cash provided by operating activities (A)
Cash flows from investing activities
Payments related to:
Purchase of PPE, intangible assets and other assets
Purchase of liabilities and equity instruments issued by other entities
Collections:
Disposals related to PPE, intangible assets and other assets
Net cash used in investing activities (B)
Cash flows from financing activities
Payments:
Lease liabilities
Unsubordinated debt securities
Financing received from the Argentine Central Bank and other financial institutions
Subordinated debt securities
Dividends distribution
Acquisition of treasury shares
Collections:
Unsubordinated debt securities
Financing received from the Argentine Central Bank and other financial institutions
Net cash used in financing activities (C)
Effects of exchange rate changes (D)
Result from exposure to changes in the purchasing power of the currency of Cash and equivalents (E)
Net increase/ (decrease) in cash and cash equivalents (A+B+C+D+E)
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
The accompanying notes are an integral part of these Consolidated Financial Statement.
F-10
12/31/2023
12/31/2022
12/31/2021
51,657,809
(15,671,914)
(10,532,748)
34,734,935
31,931,273
33,640,071
(5,800,908)
(1,157,697,255)
825,494,087
(138,081,046)
7,012,278
108,923,511
33,690
(5,502,611)
(16,857,100)
188,466,001
(2,874,712)
(688,501,884)
(1,205,330)
(1,999,421)
1,378,784,211
588,795,026
(1,326,077)
(93,625,284)
14,042,239
160,678
(995,778,531)
—
940,332
(6,053,636)
15,216,610
(6,579,003)
(11,164,078)
31,447,803
44,129,627
(8,541,784)
(784,354,347)
515,399,394
(56,821,678)
2,503,275
55,271,939
1,555,148
(10,127,903)
(1,531,618)
59,790,591
425,411
192,719,662
(726,857)
(1,541,063)
965,844,886
(361,184,054)
6,746,784
48,110,871
17,098,039
78,686
(577,355,825)
—
—
(5,793,288)
(98,506,299)
(2,637,426)
1,697,922
25,629,749
54,168,977
(6,019,802)
(627,418,680)
366,990,536
(53,923,603)
2,675,231
47,361,901
1,630,621
(10,395,360)
(1,541,901)
72,763,588
(27,824)
(55,242,994)
77,519
(355,621)
605,826,836
(104,672,168)
(6,893,080)
(49,652,616)
(2,828,948)
(288,535)
(249,749,858)
(18,264)
—
(5,875,798)
67,909,146
(9,829,034)
157,949,953
5,163,982
51,465,192
(24,751,267)
1,199,025
(26,038,772)
38,113
(30,469,603)
(538,013)
4,662,862
2,475,354
2,529,757
(18,889,380)
(23,525,305)
(28,477,859)
(5,004,160)
(1,782,823)
(152,329,300)
—
—
(858,804)
34,552
137,801,435
(7,927,034)
(4,677,087)
(543,661,474)
—
(1,531,690)
(4,307,609)
—
522,953,299
(14,721,681)
(45,936,548)
(211,897,764)
(10,442,289)
(3,122,242)
—
13,661,245
196,241,415
(22,139,100)
(39,151,595)
(76,217,864)
216,959,159
(250,572,106)
83,308,526
169,408,365
252,716,891
9,707,018
(54,108,987)
(101,914,887)
271,323,252
169,408,365
67,022,844
(103,829,795)
(90,037,482)
361,360,734
271,323,252
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1. ACCOUNTING STANDARDS AND BASIS OF PREPARATION
Grupo Supervielle S.A. (individually referred to as “Grupo Supervielle” or “the Company” and jointly with its subsidiaries as the
“Group”), is a financial services holding company organized under the laws of Argentina that conducts its business through its
subsidiaries, providing banking services, proprietary brand credit card services, personal loans, insurance and other services.
Grupo Supervielle´s Consolidated Financial Statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023,
2022 and 2021 include the assets, liabilities and results of the controlled companies detailed in Note 1.2.
1.1 Basis of preparation
These Consolidated Financial Statements have been prepared in accordance with IFRS Accounting Standards as adopted by the
International Accounting Standards Board (“IASB”).
The preparation of Financial Statements at a certain date requires Management to make estimations and evaluations affecting the amount
of assets and liabilities recorded and contingent assets and liabilities disclosed at such date, as well as income and expenses recorded
during the year. Actual results might differ from the estimates and evaluations made at the date of preparation of these Consolidated
Financial Statements. The most significant judgments made by Management in applying Grupo Supervielle’s accounting policies and
the major estimations and significant judgments are described in Note 2.
These consolidated financial statements as of December 31, 2023, were approved by resolution of the Board of Directors' meeting held
on April 26, 2024.
1.1.1 Going concern
The consolidated financial statements as of December 31, 2023, 2022 and 2021 have been prepared on a going concern basis as there is
a reasonable expectation that Grupo Supervielle will continue its operational activities in the foreseeable future (and in any event with
a time horizon of more than twelve months from the end of the reporting period).
1.1.2 Measuring Unit – IAS 29 (Financial reporting in hyperinflationary economies)
The Consolidated Financial Statements of the Entity are expressed in Argentine pesos which is the functional currency of the Group.
IAS 29 establishes the conditions under which an entity shall restate its financial statements if it is located in an economic environment
considered hyperinflationary. This Standard requires that the financial statements of an entity that reports in the currency of a highly
inflationary economy shall be stated in terms of the measuring unit current at the closing date of the latest reporting period, regardless
of whether they are based on a historical cost approach or a current cost approach. To this end, in general terms, the inflation rate must
be computed in the non-monetary items as from the acquisition date or the revaluation date, as applicable. These requirements also
comprise the comparative information of the financial statements.
To determine the existence of a highly inflationary economy under the terms of IAS 29, the standard details a series of factors to consider,
including a cumulative inflation rate over three years that is close to or exceeds 100%.
It is important to highlight that the three-year accumulated inflation rate as of December 31, 2023 reached 815.6. Consequently, the
Company has restated its consolidated financial statements in the terms of IAS 29 for the year ended December 31, 2023.
Grupo Supervielle used the National Consumer Price Index (National CPI) to restate balances and transactions. The tables below show
the evolution of these indexes in the last three years and as of December 31, 2023 according to official statistics (INDEC):
F-11
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Variation in Prices
Annual
Accumulated 3 years
2021
As of December 31,
2022
50.9 %
216.1 %
94.8 %
300.3 %
2023
211.4 %
815.6 %
As a consequence of the aforementioned, these Consolidated Financial Statements as of December 31, 2023 were restated in accordance
with the provisions of IAS 29.
Restatement of the Financial Position
Grupo Supervielle restated all the non-monetary items in order to reflect the impact of inflation in terms of the measuring unit current
as of December 31, 2023. Consequently, the main items restated were Property, Plant and Equipment, Intangible assets, Goodwill,
Inventories and Equity. Each item must be restated since the date of the initial recognition in Grupo Supervielle's accounts or since the
date of the last revaluation. Monetary items have not been restated because they are stated in terms of the measuring unit current as of
December 31, 2023.
Comparative figures must also be presented in the measuring unit current as of December 31, 2023. Therefore, comparative figures for
the previous reporting periods have been restated by applying a general price index, so that the resulting comparative financial statements
are presented in terms of the measuring unit current at the end of the reporting period.
Restatement of the Income Statement and the Statement of Cash Flows
In the Income Statement, items shall be restated from the dates when the items of income and expense were originally recorded. To this
end, Grupo Supervielle applied the variations in the consumer price index.
The effect of inflation on the net monetary position is included in the Income Statement under Results from exposure to changes in the
purchasing power of money.
The items of the Statement of Cash Flows must also be restated in terms of the measuring unit current at the closing date of the Statement
of Financial Position. IAS 29 paragraph para 33 states that all items in the statement of cash flows are expressed in terms of the measuring
unit current at the end of the reporting period.
Restatement of the Statement of Changes in Shareholder’s Equity
All components of the Statement of Changes in Shareholder’s Equity must be restated from the dates on which the items were contributed
or otherwise arose.
1.1.3 Change in accounting policies and new accounting standards
The Group has applied the following amendments for the first time for their annual reporting period commencing 1 January 2023, none
of which had a material impact on the entity, except for the application of IFRS 17, “Insurance Contracts” :
(a) Amendments to IAS 1 Presentation of Financial Statements, IFRS Practice Paper 2 and IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors
(b) Amendments to IAS 12 Deferred tax related to assets and liabilities arising from a single transaction
(c) IFRS 17 “Insurance contracts”
F-12
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
On January 1, 2023, the Group adopted IFRS 17 ‘Insurance Contracts’. As required by the Standard, the Group applied the requirements
retrospectively as from the transition date (January 1, 2022) with comparative data for periods before the transition date presented as
previously published under IFRS 4 ‘Insurance Contracts’. IAS 1 ‘Presentation of Financial Statements’ requires that a third statement
of financial position as of the transition date of January 1, 2022 to be disclosed, since the impact of the application is not material the
Group decided not to present such statement.
The Group has determined that reasonable and supportable information was available for all contracts in force at the transition date.
Accordingly, the Group has: identified, recognised and measured each group of insurance contracts and each insurance acquisition cash
flows asset in this category as if IFRS 17 had always applied; derecognised any existing balances that would not exist if IFRS 17 had
always applied; and recognised any resulting net difference in equity. At the transition date, the implementation of this Standard had the
following impact.
The method used by the Group in the transition was the full retrospective approach, establishing the transition date as January 1, 2022.
Assets
Liabilities
Total
Insurance contracts under
IFRS 4
5,229,639
(4,958,210)
271,429
January 1, 2022
Re-measured
(4,843,303)
4,808,718
(34,585)
Insurance contracts under
IFRS 17
386,336
(149,492)
236,844
See Notes 1.26 and 18 for more detail on the impacts of the application of this new Standard.Certain new accounting standards,
amendments to accounting standards and interpretations have been published that are not mandatory for December 31, 2023 reporting
periods and have not been early adopted by the Group:
(a) Amendments to IAS 16 – Leases
These amendments include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and
leaseback after the transaction date. Sale and leaseback transactions where some or all of the lease payments are variable lease payments
that do not depend on an index or rate are most likely to be impacted.
The amendments will be effective for the annual periods beginning on or after January 1, 2024.
The impact from the application of this standard will not be material.
(b) Amendments to IAS 1 – Non-current assets with covenants
These amendments clarify how conditions with which an entity must comply within twelve months after the reporting period affect the
classification of a Financial liability.
The amendments will be effective for the annual periods beginning on or after January 1, 2024. The impact from the application of this
standard will not be material.
(c) Amendments to IAS 21 - Lack of Interchangeability
F-13
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The amendments establish a two-step approach to assessing whether a currency can be exchanged for another currency and, where this
is not possible, determining the exchange rate to be used and the information to be disclosed.
The modifications will be efective for the years beginning on January 1, 2025 and, although international standards allow their early
application, RG N°972/23 of the C.N.V. does not allow it.
The Group is currently evaluating the impact that this modification may have on its Consolidated Financial Statements.
1.2. Consolidation
A subsidiary is an entity (or subsidiary), including structured entities, in which Grupo Supervielle has control. The Group controls an
entity where the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power to direct the activities of the entity. The existence and the effect of the substantive rights, including
substantive rights of potential vote, are considered when evaluating whether Grupo Supervielle has power over the other entity. For a
right to be substantive, the holder must have the practical ability to exercise such right whenever it is necessary to make decisions to
direct the activities of the entity. Grupo Supervielle can have control over an entity, even when it has less voting powers than those
required for the majority.
Accordingly, the protective rights of other investors, as well as those related to substantive changes in the subsidiary´ activities or
applicable only in unusual circumstances, do not prevent Grupo Supervielle from having power over a subsidiary. The subsidiaries are
consolidated from the date on which control is transferred to Grupo Supervielle. They are deconsolidated from the date that control
ceases.
The following chart details the subsidiaries included in the consolidation process:
Company
Banco Supervielle S.A.
IUDÚ Compañia Financiera S.A
Tarjeta Automática S.A.
Supervielle Asset
Management S.A.
Sofital S.A.U.F.e.I.
Espacio Cordial de Servicios S.A.
Supervielle Seguros S.A.
Micro Lending S.A.U.
InvertirOnline S.A.U.
Portal Integral de Inversiones S.A.U.
IOL Holding S.A.
Supervielle Productores Asesores de Seguros S.A.
Bolsillo Digital S.A.U.
Supervielle Agente de Negociación S.A.U.
Dólar IOL S.A.U.
Main Activity
Commercial Bank
Financial Company
Credit Card
Asset Management
and Other Services
Real State
Retail Services
Insurance
Financial Company
Financial Broker
Representations
Financial Company
Insurance Broker
Fintech
Financial Broker
Financial Company
Percentage of direct or indirect investment in capital stock
12/31/2022
12/31/2021
12/31/2023
99.90 % (1)
— % (2)
— % (2)
99.90 % (1)
99.90 %
99.91 %
99.90 % (1)
99.90 %
99.99 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
100.00 %
(1) Grupo Supervielle S.A.’s direct and indirect interest in Banco Supervielle S.A votes amounts to 99.87%, as of 12/31/2023, 12/31/2022 and
12/31/2021 respectively.
(2) On June 8, 2023, a definitive merger commitment between Banco Supervielle S.A. IUDÚ Compañía Financiera S.A. and Tarjeta Automática
S.A.was signed. Refer to note 33 of the consolidated financial statements for more detail on the agreement.
F-14
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
For consolidation purposes, financial statements corresponding to the year ended December 31, 2023 were used, which cover the same
period of time with respect to Grupo Supervielle's financial statements.
Inter-company transactions, balances and unrealised gains on transactions between Grupo Supervielle companies are eliminated.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement
of comprehensive income, statement of changes in shareholder´s equity and statement of financial position respectively.
In accordance with the provisions of IFRS 3, the acquisition method is the one used to account for the acquisition of subsidiaries. The
identifiable assets acquired and the liabilities and contingent liabilities assumed in a business combination are measured at their fair
values on the date of acquisition.
The excess of the: (i)consideration transferred, (ii) non-controlling interest in the acquired entity, and (iii) acquisition-date fair value of
any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill.
The consideration transferred for the acquisition of a subsidiary comprises the: (i) fair values of the assets transferred, (ii) liabilities
incurred to the former owners of the acquired business, (iii) equity interests issued by the group, (iv) fair value of any asset or liability
resulting from a contingent consideration arrangement, and (v) fair value of any pre-existing equity interest in the subsidiary.
1.3. Transactions with non-controlling interest
Grupo Supervielle treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of Grupo Supervielle. A change in ownership interest results in an adjustment between the carrying amounts of the controlling
and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to
non-controlling interests and any consideration paid or received is recognized in a separate reserve within equity attributable to owners
of Grupo Supervielle.
1.4. Segment Reporting
An operating segment is defined as a component of an entity or a Group that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), and
whose financial information is evaluated on a regular basis by the chief operating decision maker.
Operating segments are reported in a manner consistent with the internal reporting provided to:
(i) Key senior management who allocate resources to and assess the performance of the operating segment; and
(ii) The Board, who is in charge of making strategic decisions of Grupo Supervielle.
1.5. Foreign currency translation
(a) Functional and presentation currency
Figures included in the Consolidated Financial Statements of each of Grupo Supervielle’s entities are measured using the functional
currency, that is, the currency of the primary economic environment in which the entity operates. Consolidated Financial Statements are
presented in Argentine pesos, which is the functional and presentation currency of Grupo Supervielle.
Translation of foreign operations
F-15
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The results and financial position of the subsidiaries with a functional currency other than the Argentine peso are translated into Grupo
Supervielle's functional currency in accordance with the provisions of IAS 21 "Effects of changes in foreign currency exchange rates",
as follows:
• Assets and liabilities, at the closing exchange rate on the date of each consolidated statement of financial position.
•
Income and expenses, at the average exchange rate.
Subsequently, the converted balances were adjusted for inflation in order to present them in the measuring unit current at the end of the
reporting period (see Note 1.1.2).
All the differences resulting from the translation were recognized in the "Foreign currency translation adjustment" line of the
Consolidated Statement of Other Comprehensive income.
In the case of sale or disposal of any of the subsidiaries, the accumulated translation differences must be recognized in the Consolidated
Income Statement as part of the gain or loss from the sale or disposal.
(b) Transactions and balances
Transactions in foreign currency are translated into the functional currency using the exchange rates published by the Argentine Central
Bank at the dates of the transactions. Gains and losses in foreign currency resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currency at year end exchange rates, are recognized in the
income statement, under "Exchange rate differences on gold and foreign currency".
As of December 31, 2023 and 2022, the balances in U.S. dollars were converted at the reference exchange rate determined by the
Argentine Central Bank. In the case of foreign currencies other than U.S. dollars, they have been converted to this currency using the
exchange rates derived from repo transactions reported by the Argentine Central Bank.
1.6. Cash and due from banks
Cash and due from Banks includes available cash and unrestricted deposits held in Banks, which are short-term liquid instruments and
have original maturities of less than three months.
Assets disclosed under cash and due from Banks are measured at amortized cost which is close to its fair value.
Cash and Cash equivalents include cash and highly liquid short-term securities with an original maturity of less than three-months
according to the following detail:
Item
Cash and due from banks
Debt securities at fair value through profit or loss
Money Market Funds
Cash and cash equivalents
F-16
12/31/2021
12/31/2023
12/31/2022
229,098,272 150,719,643 197,594,880
63,109,218
10,619,154
252,716,891 169,408,365 271,323,252
20,598,059
3,020,560
17,471,554
1,217,168
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Reconciliation between balances as appearing on the Statement of Financial Position and the items in the Statement of Cash Flow:
Items
Cash and due from Banks
As per Statement of Financial Position
As per the Statement of Cash Flow
Debt securities at fair value through profit or loss
As per Statement of Financial Position
Securities not considered a cash equivalents
As per the Statement of Cash Flow
Money Market Funds
As per Statement of Financial Position – Other financial assets
Other financial assets not considered a cash equivalents
As per the Statement of Cash Flow
12/31/2023
12/31/2022
12/31/2021
229,098,272 150,719,643 197,594,880
229,098,272 150,719,643 197,594,880
46,415,822
69,707,595 119,850,286
(25,817,763) (52,236,041) (56,741,068)
63,109,218
20,598,059
17,471,554
46,499,784
84,456,802
(43,479,224) (24,029,023) (73,837,648)
10,619,154
25,246,191
3,020,560
1,217,168
Reconciliation of liabilities from financing activities at December 31, 2023, 2022 and 2021 is as follows:
Items
Unsubordinated debt securities
Financing received from the Argentine Central
Bank and other financial institutions
Lease Liabilities
Total
Items
Unsubordinated debt securities
Financing received from the Argentine Central
Bank and other financial institutions
Lease Liabilities
Total
Items
Unsubordinated debt securities
Subordinated debt securities
Financing received from the Argentine Central
Bank and other financial institutions
Lease Liabilities
Total
12/31/2022
1,748,271
Inflows
34,552
Outflows
(1,782,823)
12/31/2023
—
—
Cash Flows
Other non-cash
movements
17,219,834
4,884,311
23,852,416
137,801,435 (152,329,300)
(5,004,160)
137,835,987 (159,116,283)
—
—
2,977,354
2,977,354
2,691,969
2,857,505
5,549,474
12/31/2021
6,425,358
Inflows
—
Outflows
(4,677,087)
movements
—
12/31/2022
1,748,271
Cash Flows
Other non-cash
37,928,009 522,953,299 (543,661,474)
(7,927,034)
522,953,299 (556,265,595)
8,239,249
52,592,616
—
—
4,572,096
4,572,096
17,219,834
4,884,311
23,852,416
Cash Flows
Other non-cash
12/31/2020
Inflows
38,700,661 13,661,245 (45,936,548)
Outflows
10,442,289
—
(10,442,289)
movements
—
—
12/31/2021
6,425,358
—
53,584,358
10,819,781
113,547,089
196,241,415
—
209,902,660
(211,897,764)
(14,721,681)
(282,998,282)
—
12,141,149
12,141,149
37,928,009
8,239,249
52,592,616
F-17
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1.7. Associates
Associates are entities over which Grupo Supervielle has significant influence (directly or indirectly), but not control, generally
accompanying a stake of between 20 and 50 percent of the voting rights. Investments in associates are accounted for using the equity
method, and are initially recognized at cost. The book value of the associates includes the goodwill identified in the acquisition less
accumulated impairment losses, if applicable. Dividends received from associates reduce the book value of the investment. Other
changes subsequent to the acquisition in Grupo Supervielle's participation in the net assets of an associate are recognized as follows: (i)
Grupo Supervielle's participation in the gains or losses of associates is recorded in the income statement as profit or loss by associates
and joint ventures and (ii) Grupo Supervielle's share in other comprehensive income is recognized in the statement of other
comprehensive income and is presented separately. However, when Grupo Supervielle's share of losses in an associate equals or exceeds
its interest in the associate, Grupo Supervielle will cease to recognize its share of additional losses, unless it has incurred obligations or
made payments on behalf of the associate.
Unrealized gains on transactions between Grupo Supervielle and its associates are eliminated to the extent of Grupo Supervielle's
participation in the associates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the
transferred asset.
1.8. Financial Instruments
Initial Recognition and measurement
Financial assets and financial liabilities are recognized when the entity becomes a party to the contractual provisions of the instrument.
Purchases and sales of financial assets are recognized on trade-date, the date on which Grupo Supervielle commits to purchase or sell
the asset.
At initial recognition, Grupo Supervielle measures financial assets or liabilities at fair value, plus or less, for instruments not recognized
at fair value through profit or loss, transaction costs that are directly attributable to the acquisition, such as fees and commissions.
When the fair value of financial assets and liabilities differs from the transaction price on initial recognition, Grupo Supervielle
recognizes the difference as follows:
• When the fair value is evidenced by a quoted price in an active market for an identical asset or liability or based on a valuation
technique that only uses data from observable markets, the difference is recognized as a gain or loss.
•
In all other cases, the difference is deferred and the timing of recognition of deferred day one profit or loss is determined
individually. It is either amortized over the life of the instrument until its fair value can be determined using market observable
inputs, or realized through settlement.
Financial Assets
a – Debt Instruments
Debt instruments are those instruments that meet the definition of a financial liability from the issuer’s perspective, such as loans,
government and corporate bonds and, accounts receivables purchased from clients in non-recourse factoring transactions.
F-18
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Classification
Pursuant to IFRS 9, the Entity classifies financial assets depending on whether these are subsequently measured at amortized cost, fair
value through other comprehensive income or fair value through profit or loss, on the basis of:
a) Grupo Supervielle’s business model for managing financial assets, and;
b) the cash-flows characteristics of the financial asset
Business Model
The business model refers to the way in which Grupo Supervielle manages a set of financial assets to achieve a specific business
objective. It represents the way in which Grupo Supervielle maintains the instruments for the generation of funds.
The business models that Grupo Supervielle can follow are the following:
- Held to collect the contractual cash flows;
- Held to collect the contractual cash flows and selling the assets; or
- Held for trading.
Grupo Supervielle determines its business model at the level that best reflects how it manages groups of financial assets to achieve a
specific business objective.
The business model of Grupo Supervielle does not depend on the management’s intentions for an individual instrument.
Therefore, this business model is not evaluated instrument by instrument, but at a higher level of aggregated portfolios and is based on
observable factors such as:
• How the business model’s return is evaluated and how financial assets held in that business model are evaluated and reported
to Grupo Supervielle’s key personnel.
• The risks affecting the business model’s return (and financial assets held in that business model) and, particularly, the way
these risks are managed.
• How Grupo Supervielle’s key personnel is compensated (for instance, if salaries are based on the fair value of the assets
managed or on contractual cash flows collected).
• The expected frequency, the value, moment and reasons of sales are also important aspects.
The evaluation of the business model is based on reasonably expected scenarios, irrespective of worst-case or stress case scenarios. If
after the initial recognition cash flows are realized in a different manner from the original expectations, Grupo Supervielle will not
change the classification of the remaining financial assets held in that business model, but it will consider such information for evaluating
recent purchases or originations. An instrument’s reclassification is only made when, and only when, an entity changes its business
model for managing financial assets.
F-19
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Contractual Cash Flow Characteristics
Where the business model is to hold assets to collect contractual cash flows or to collect contractual cash flows and sell, Grupo
Supervielle assesses whether the financial instruments’ cash flows represent solely payments of principal and interest. Where the
contractual terms introduce exposure to risk or volatility that are inconsistent with a basic lending arrangement, the related financial
asset shall be classified and measured at fair value through profit or loss.
Based on the aforementioned, there are three different categories of Financial Assets:
i) Financial assets at amortized cost.
Financial assets shall be measured at amortized cost if both of the following conditions are met:
(a) the financial asset is held for collection of contractual cash flows, and
(b) the assets’s cash flows represent solely payments of principal and interest.
The amortized cost is the amount at which it is measured at initial recognition minus the principal repayments, plus or minus the
cumulative amortization using the effective interest rate method of any difference between that initial amount and the maturity amount
and, for financial assets, adjusted for any loss allowance. The effective interest rate is the rate that exactly discounts estimated future
cash recepits through the expected life of the financial asset to the gross carrying amount of a financial asset (i.e. its amortised cost
before any impairment allowance).When applying this method, Grupo Supervielle identifies the incremental direct costs as an integral
part of the effective interest rate.
ii) Financial assets at fair value through other comprehensive income:
Financial assets shall be measured at fair value through other comprehensive income when:
(a) the financial asset is held for collection of contractual cash flows and for selling financial assets and
(b) the asset’s cash flows represent solely payments of principal and interest.
These financial instruments are initially recognized at fair value plus incremental and directly attributable transaction costs, and are
subsequently measured at fair value through other comprehensive income. Gains and losses arising from changes in fair value are
included in other comprehensive income within a separate component of equity. Losses or reversals due to impairment, interest income
and exchange rate gains and losses are recognized in profit or loss. At the time of its sale or disposal, the accumulated gain or loss
previously recognized in other comprehensive income is reclassified from equity to the Consolidated Income Statement.
iii) Financial assets at fair value through profit or loss:
Financial assets at fair value through profit or loss comprise:
•
•
•
Instruments held for trading
Instruments specifically designated at fair value through profit or loss
Instruments with contractual cash-flows that do not represent solely payments of principal and interest
F-20
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
These financial instruments are initially recognized at fair value and any change in fair value measurement is charged to the Consolidated
Income Statement.
Grupo Supervielle classifies a financial instrument as held for trading if such instrument is acquired or incurred for the main purpose of
selling or repurchasing it in the short term, or it is part of a portfolio of financial instruments which are managed together and for which
there is evidence of short-term profits or if it is a derivative financial instrument not designated as a hedging instrument. Derivatives
and trading securities are classified as held for trading and are measured at fair value.
The fair value of these instruments was calculated using the quotes in active markets at the end of each fiscal year. In the absence of an
active market, valuation techniques were used that included the use of market operations carried out under conditions of mutual
independence, between interested and duly informed parties, whenever available, as well as references to the current fair value of another
instrument that is substantially similar, or discounted cash flow analysis. The estimation of fair values is explained in greater detail in
the Note 2 “critical accounting policies and estimates”.
In addition, financial assets may be valued (“designated”) at fair value through profit or loss when, by doing so, Grupo Supervielle
eliminates or significantly reduces a measurement or recognition inconsistency.
b – Equity Instruments
Equity instruments are instruments that do not contain a contractual obligation to pay cash or any other financial asset and that evidence
a residual interest in the issuer’s net assets.
Such instruments are measured at fair value through profit and loss, except where Grupo Supervielle’s management has elected, at initial
recognition, to irrevocably designate an equity investment at fair value through other comprehensive income. This option is available
when instruments are not held for trading. The gains or losses of these instruments are recognized in other comprehensive income and
are not subsequently reclassified to profit or loss, including on disposal. Dividends that result from such instrument will be charged to
income when Grupo Supervielle’s right to receive payments is established.
Derecognition of Financial Assets
Grupo Supervielle derecognizes financial assets only when any of the following conditions are met:
1. The rights on the financial asset cash flows have expired; or
2. The financial asset is transferred pursuant to the requirements in 3.2.4 of IFRS 9.
Grupo Supervielle derecognizes financial assets that have been transferred only when the following characteristics are met:
1. The contractual rights to receive the cashflows from the assets have expired or when they have been transferred and Grupo
Supervielle transfers substantially all the risks and rewards of ownership.
2. The Entity retains the contractual rights to receive cash flows from assets but assumes a contractual obligation to pay those
cash flows to other entities and transfers substantially all of the risks and rewards. These transactions result in derecognition if
Grupo Supervielle:
a. Has no obligation to make payments unless it collects amounts from the assets;
b.
Is prohibited from selling or pledging the financial assets;
F-21
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
c. Has an obligation to remit any cash it collects from the assets without material delay.
Write Off of Financial Assets
Grupo Supervielle reduces the gross carrying amount of a financial asset when it has no reasonable expectations of recovering a financial
asset in its entirety of a portion thereof. A write-off constitutes a derecognition event.
Financial Liabilities
Classification
Grupo Supervielle classifies its financial liabilities as subsequently measured at amortized cost using the effective rate method, except
for:
• Financial liabilities at fair value through profit or loss.
• Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition.
• Financial guarantee contracts and loan commitments.
• Commitments to grant loans at rates below market rate
Financial Liabilities measured at fair value through profit or loss: At initial recognition, Grupo Supervielle can designate a liability at
fair value through profit or loss if it reflects more appropriately the financial information because:
• Grupo Supervielle eliminates or substantially reduces an accounting mismatch in measurement or recognition inconsistency;
or
•
•
if financial assets and financial liabilities are managed and their performances assessed on a fair value basis according to an
investment strategy or a documented risk management; or
if a host contract contains one or more embedded derivatives and Grupo Supervielle has opted for designating the entire contract
at fair value through profit or loss.
Financial guarantee contract: A guarantee contract is a contract which requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument.
Financial guarantee contracts and loan commitments are initially measured at fair value and subsequently measured at the higher of the
amount of the loss allowance and the unaccrued premium at year end.
Derecognition of financial liabilities
The Entity derecognizes financial liabilities when they are extinguished; this is, when the obligation specified in the contract is
discharged, cancelled or expires.
F-22
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1.9. Derivatives
Derivatives are initially recognized at their fair value on the date on which the derivative contract is entered into and are subsequently
remeasured at fair value.
All derivative instruments are recognised as assets when their fair value is positive, and as liabilities when their fair value is negative.
Any change in the fair value of derivative instruments is included in the Consolidated Income Statement.
Grupo Supervielle does not apply hedge accounting.
1.10. Repo Transactions
Reverse Repo Transactions
According to the derecognition principles set out in IFRS 9, these transactions are treated as secured loans since the risk has not been
transferred to the counterparty. Loans granted in the form of reverse repo agreements are accounted for under "Reverse repo
transactions", classified by counterparty and also by the type of assets received as collateral. At the end of each month, accrued interest
income is charged under "Reverse repo transactions" with its corresponding offsetting entry in "Interest Income". The assets received
and sold by Grupo Supervielle are derecognized at the end of the repo transaction, and an in-kind liability is recorded to reflect the
obligation to deliver the security disposed of.
Repo Transactions
Loans granted in the form of repo transactions are accounted for under "Repo Transactions", classified by counterparty and also by the
type of asset pledged as collateral. In these transactions, when the recipient of the underlying asset becomes entitled to sell it or pledge
it as collateral, it is reclassified to "Financial assets pledged as collateral". At the end of each month, these assets are measured according
to the category they had before they were subject to the repo transaction, and results are charged against the applicable accounts,
depending on the type of asset. At the end of each month, accrued interest expense is charged under "Repo Transactions" with its
corresponding offsetting entry in "Interest-Expenses".
1.11.
Impairment of financial assets
Grupo Supervielle assesses on a forward-looking basis the expected credit losses (“ECL”) associated to its financial assets measured at
amortized cost, debt instruments measured at fair value through other comprehensive income, loan commitments and financial guarantee
contracts that are not measured at fair value.
Grupo Supervielle measures ECL of financial instruments reflecting the following:
(a) An unbiased and probability – weighted amount that is determined by evaluating a range of possible outcomes
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions.
IFRS 9 outlines a “three stages” model for impairment based on changes in credit quality since initial recognition:
F-23
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
If, at the reporting date, the credit risk of a financial instrument has not increased significantly since its initial recognition, Grupo
•
Supervielle will classify such instrument in “Stage 1”.
If a significant increase in credit risk (“SICR”) since initial recognition is identified, the financial instrument is moved to “Stage 2”,
•
but such instrument is not yet deemed to be credit-impaired.
•
If the financial instrument is credit-impaired, it is moved to “Stage 3”.
•
Financial instruments in “Stage 1”, have their ECL measured at an amount equal to the portion of lifetime expected credit losses
that result from default events possible within the next 12 months. Instruments in “Stage 2” or “Stage 3” have their, ECL measured
based on expected credit losses on a lifetime basis. Note 1.11.2 includes a description of how Grupo Supervielle defines when a
significant increase in credit risk has occurred.
• A pervasive concept in the measuring ECL in accordance with IFRS 9 is that it should consider forward-looking information.
Purchased or originated credit-impaired financial assets are those financial assets that are credit-impaired on initial recognition.
•
Their ECL is always measured on a lifetime basis (“Stage 3”).
The following diagram summarizes the impairment requirement under IFRS 9 (other than purchased or originated credit-impaired):
Changes in the credit quality since initial recognition
Stage 1
Stage 2
Stage 3
(initial recognition)
12 month- ECL
(significant increase of credit
risk since initial recognition)
credit-impaired assets)
Lifetime ECL
The following describes Grupo Supervielle´s key judgements and assumptions for ECL measurement:
1.11.2 Significant increase in credit risk
Grupo Supervielle considers a financial instrument to have experienced a significant increase in credit risk when any of the following
conditions exist:
Personal and Business Banking
• Portfolios between 31 and 90 days past due.
• Credit origination score has deteriorated by more than 30% with respect to the current behavioural score.
•
Internal Behavioral Score is less than cut off (1).
(1) High Income Customers: Plan Sueldo segment (payrroll customers) >=400, Open Market Segment >=650 and Senior Citizens
Segment>=600. Other customers: Plan Sueldo Segment (payrroll customers) >=500, Open Market Segment >=700 and Senior
Citizens Segment >=600
F-24
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Corporate Banking
• Portfolios between 31 and 90 days past due.
• Maximum Argentine Central Bank (BCRA) Situation equal to 2.
• Have a behavioural score with probability of default “PD” greater than 30%.
•
Its credit rating deteriorated by more than two notes with respect to its credit approval rating.
Sectoral Analysis
Considering that the internal impairment models are estimated using historical information, the risk of default of the corporate portfolio
includes an additional sectoral analysis which is performed by grouping financial assets of the corporate portfolio by industry and
analysing the risk associated to each industry in the current economic enviroment.
Finally, the different industries that are part of the Grupo Supervielle's portfolio are classified into four types of risk. They are:
• Low risk
• Medium risk
• High risk
• Very high risk
The risk rating matrix by industry is presented below, as of December 31, 2023 no high or very high risk industries have been identified:
Agriculture
Food and Drinks
Financial
Supermarkets
Utilities (water and waste)
Oil and mining
Pharmaceutical
IT/Communications
Cleaning
Oil Industry
Wine industry
Citrus Industry
Automotive terminals
RISK RATING BY INDUSTRY
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Utilities (Power generation)
Utilities (Trans. And dist. of energy)
Chemicals and plastics
Auto Parts/Dealers
Cargo transportation
Construction
Art.Home
Insurance
Paper, cardboard, wood, glass
Dairy industry
Private construction
Iron and steel industry
Machinery and equipment
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
F-25
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
RISK RATING BY INDUSTRY
SGR
Others
Sugar Industry
Public Construction
Textile
Real Etate
Sports
Entertaiment
Low
Low
Medium
High
Medium
Medium
Medium
Medium
Professionals
Home Appliances (Product.)
Appliances (Commercial)
Health
Tourism and gastronomy
Passenger Transport
Refrigerators
Medium
Medium
Medium
High
Medium
Medium
Medium
In case of activities with high or very high risk, the financial assets are included in Stage 2.
1.11.3
Individual and collective evaluation basis
Expected credit losses are estimated both in a collective and individual basis.
Grupo Supervielle´s individual estimation is aimed at calculating expected credit losses for significantly impaired loans. In these cases,
the amount of credit losses is calculated as the difference between expected cash flows discounted at the instrument´s effective interest
rate and the carrying value of the instrument.
For expected credit loss provisions modelled on a collective basis, Grupo Supervielle has developed internal models. The grouping of
exposures is performed on the basis of shared risk characteristics, such that risk exposures within group are homogeneous. In performing
the grouping there must be sufficient information for the group to be statistically reliable.
Grupo Supervielle has identified three groupings: Personal and Business, Corporate Banking and Consumer Finance, amongst these
three segments Grupo Supervielle estimates parameters in a more granular way based on the shared risk characteristics.
Credit risk features may consider the following factors, among others:
Group
Parameter
Grouping
Personal loans (1)
Credit card loans (1)
Mortgage loans
Personal and Business Banking
Probability of Default (PD)
Automobile and other secured loans
Refinancing
Other financings
Personal loans (1)
Credit card loans (1)
Loss Given Default (LGD)
Automobile and other secured loans
Overdrafts
Mortgage loans
F-26
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Group
Parameter
Group
Parameter
Corporate Banking
Probability of Default (PD) (2)
Severidad (LGD)
Grouping
Refinancing
Other financings
Grouping
Medium companies
Small companies
Financial sector
Secured loans
Unsecured loans
(1) For credit cards and personal loans, Grupo Supervielle includes an additional layer of analysis: senior citizens, high income,
open market, high income payroll, non- high income open market, non-high income payroll, Personal and Business Banking,
former senior citizens and former payroll.
(2) Probability of default within Corporate Banking is calculated by grouping clients based on the client size for Stage 1 facilities.
For Stage 2 and Stage 3, Probability of default is calculated including all segments of Corporate Banking due to the lack of
materiality to form a larger group.
The credit risk characteristics used to group the instruments are, among others: type of instrument, debtor's sector of activity,
geographical area of activity, type of guarantee, aging of past due balances and any other factor relevant to estimating the future cash
flows.
Grouping of financial instruments is monitored and reviewed on a regular basis by the Credit Risk and Stress Test Area.
1.11.4 Definition of default and credit-impaired
Grupo Supervielle defines a financial instrument as in default when such instrument meets one or more of the following criteria:
Personal and Business Banking
• Financial instruments more than 90 days past due on its contractual payments.
Corporate Banking
• Financial instruments more than 90 days past due.
• Financial instruments with Argentine Central Bank situation greater than or equal to 3.
• C or D behavioural score.
These criteria are applied in a consistent manner to all financial instruments and are aligned with the internal definition of default used
for the administration of credit risk. Likewise, such definition is consistently applied to define PD ("Probability of Default"), Exposure
at Default ("EAD") and Loss Given Default ( "LGD").
F-27
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1.11.5 Measurement of Expected Credit Loss – Explanation of inputs, assumptions and calculation techniques
ECL is measured on a 12-month or lifetime basis, depending on whether a significant increase in credit risk has occurred since initial
recognition or whether an asset is considered to be credit-impaired. ECL are the discounted product of the Probability of Default ("PD"),
Exposure at default ("EAD") and Loss Given Default ("LGD"), defined as follows:
• The PD represents the likelihood of a borrower defaulting on its financial obligation (pursuant to the "Definition of default and
credit impaired" set forth in Note 1.11.4), either over the next 12 months or over the remaining lifetime (lifetime PD) of the
obligation.
• EAD is based on the amounts Grupo Supervielle expects to be owed at the time of default, over the next 12 months (12 months
EAD) or over the remaining lifetime (lifetime EAD). For example, for a revolving credit facility, Grupo Supervielle includes
the current drawn balance plus any further amount that is expected to be drawn up to the current contractual limit by the time
of default, should it occur.
• LGD represents Grupo Supervielle´s expectation of the extent of loss on a defaulted exposure. LGD varies by type of
counterparty, seniority of claim, availability of collateral or other type of credit support. LGD is expressed as a percentage per
unit of exposure at the time of default. LGD is calculated on a 12-month or lifetime basis, where 12 month LGD is the
percentage of loss expected to be incurred if a default occurs in the next 12 months and lifetime LGD is the percentage of loss
expected to be made if adefault occurs over the remaining expected life of the loan.
ECL is determined by projecting PD, LGD and EAD for each future month and each individual exposure or collective segment. These
three components are multiplied and adjusted for the likelihood of survival (that is, the exposure has not been prepaid or defaulted in an
earlier month). This effectively calculates an ECL for each future month, which is then discounted back to the reporting date and add
up. The discount rate used in the ECL calculation is the original effective interest rate or an approximation thereof.
The Entity based its calculation of the ECL parameters on internal models that were adapted in order to be compliant with IFRS 9.
Grupo Supervielle includes forward-looking information in its definition of PD, EAD and LGD. See Note 1.11.6 for the explanation of
forward-looking information and its consideration in the calculation of ECL.
1.11.6 Forward-looking information considered in expected credit loss models
The evaluation of significant increase in credit risk and the calculation of ECL includes forward-looking information. Grupo Supervielle
has performed historical analysis and identified key economic variables that impact credit risk and expected credit losses for each
portfolio.
Forecasts of these economic variables ("base economic scenario") are provided by the Research team of Grupo Supervielle and provide
the best estimate view of the economy over the next 12 months. The impact of these economic variables on PD and LGD has been
determined by performing statistical regression analysis to understand the impact changes in these variables have had historically on
default rates and LGD components.
In addition to the base economic scenario, Grupo Supervielle's Research team also provides two possible scenarios together with scenario
weightings. The number of other scenarios used is established based on the analysis of the main products to ensure that the effect of linearity
between the future economic scenario and the associated expected credit losses is captured. The number of scenarios and their attributes
are reassessed annually, unless a situation occurs in the macroeconomic environment that justifies a more frequent review.
F-28
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
As of December 31, 2023, as for its portfolios, Grupo Supervielle concluded that three scenarios have properly captured non-linearities.
Scenario analysis are defined by means of a combination of statistic and expert judgement analysis, taking into account the range of
potential results of which each scenario is representative. As with any economic forecast, projections and probabilities of occurrence
are subject to a high degree of inherent uncertainty, and therefore actual results may be significantly different than projected. Grupo
Supervielle considers that these forecasts account for its best calculation of potential results and has analyzed the non-lineal and
asymmetric impacts within the different portfolios of Grupo Supervielle to establish that chosen scenarios are representative of the range
of possible scenarios.
The most significant assumptions used to calculate ECL as of December 31, 2023 are as follows:
Parameter
Probability of Default
Loss Given Default
Industry / Segment Macroeconomic Indicator
Personal and Business
Banking
Inflation Rate
Corporate
Banking
Personal and Business
Banking
Corporate
Banking
Private Sector Real Wage
Private Sector Real Wage
Monthly Economic Activity
Estimator
Private Sector Real Wage
Monetary Policy Rate
Private Sector Real Loans
Exchange rate
Scenario 1
Scenario 2
Scenario 3
%
%
%
%
%
%
205.6
(0.2)
(0.2)
145
(0.2)
105.0
245.2
2,011
%
%
%
%
%
%
173.9
2.9
2.9
150
2.9
94.5
109.4
1,857
301.7
(5.0)
(5.0)
141
(5.0)
154.1
193.7
3,374
%
%
%
%
%
%
The following are weightings assigned to each scenario as of December 31, 2023:
Scenario 1
Scenario 2
Scenario 3
60 %
20 %
20 %
F-29
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Sensitivity analysis
The chart below includes changes in ECL as of December 31, 2023 that would result from reasonably potential changes in the following
parameters:
December 31, 2023
Reported ECL Allowance
Gross carrying amount
Reported Loss rate
Irregular Portfolio Coverage
ECL amount by scenarios
Favorable scenario (Allowances for loan losses)
Unfavorable scenario (Allowances for loan losses)
Loss Rate by scenarios
Favorable scenario
Unfavorable scenario
Coverage Ratio by Scenario
Favorable scenario
Unfavorable scenario
1.12. Leases (the Group as lessor)
Group as lessor
Operating leases
17,448,828
499,903,912
3.49 %
236.48 %
15,715,368
19,595,418
3.14 %
3.92 %
212.98 %
265.57 %
Leases where the lessor retains a substantial portion of the risks and rewards of ownership are classified as operating leases. Payments
made under operating leases (net of lease incentives) are recognized in profit or loss on a straight-line basis over the term of the lease.
In addition, Grupo Supervielle recognizes the associated costs such as amortization and expenses.
The historical cost includes expenditures that are directly attributable to the acquisition of these items and those expenses are charged
to profit or loss during the lease term.
The depreciation applied to the leased underlying assets is consistent with the one applied to similar assets’ group. In addition, Grupo
Supervielle utilizes the criteria described in Note 1.18 to determine whether there is objective evidence that an impairment loss has
occurred.
Finance leases
They have been recorded at the current value of the unearned amounts, calculated according to the conditions agreed in the respective
contracts, based on the interest rate implicit in them.
Initial measurement
Grupo Supervielle uses the interest rate implicit in the lease to measure the net investment. This is defined in such a way that the initial
direct costs are automatically included in the net investment of the lease.
F-30
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Initial direct costs, other than those incurred by manufacturers or concessionaires, are included in the initial measurement of the net
investment of the lease and reduce the amount of income recognized over the term of the lease. The interest rate implicit in the lease is
defined in such a way that initial direct costs are automatically included in the net investment in the lease; there is no need to add them
separately.
The difference between the gross amount receivable and the present value represents the finance income that is recognized over the
term of the lease. Finance income from leases is recorded in profit or loss for the year. Impairment losses over the lease receivable
are recognized in income for the year (see Note 1.11).
See accounting policy related to those leases in which Grupo Supervielle acts as lessee in Note 7 to these Consolidated Financial
Statements.
1.13. Property, plant and equipment
a) Basis of measurement used
Land and buildings are recognised at fair value based on periodic, valuations by external independent valuers, less subsequent
depreciation for buildings. A revaluation surplus is credited to shareholders’ equity.
Management updates the valuation of the fair value of land and buildings (classified as property, plant and equipment), taking into
account independent valuations. The sale prices of comparable properties are adjusted considering the specific aspects of each property,
the most relevant assumption being the price per square meter (Level 3). Management determines the value of property, plant and
equipment within a range of fair value estimates and considering the currency in which the market transactions are carried out. The
revaluations are carried out with sufficient regularity, in order to ensure that the book value, at all times, does not differ significantly
from the fair value of each asset subject to revaluation.
Increases in the carrying amounts arising on revaluation of land and buildings are recognised, in other comprehensive income and
accumulated in reserves in shareholders’ equity. To the extent that the increase reverses a decrease previously recognised in profit or
loss, the increase is first recognised in profit or loss. Decreases that reverse previous increases of the same asset are first recognised in
other comprehensive income to the extent of the remaining surplus attributable to the asset; all other decreases are charged to profit or
loss. Each year, the difference between depreciation based on the revalued carrying amount of the asset charged to profit or loss and
depreciation based on the asset’s original cost, is reclassified from the property, plant and equipment revaluation surplus to retained
earnings.
All other property, plant and equipment is stated at historical cost (adjusted for inflation as explained in Note 1.1.2) less depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the
asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to Grupo Supervielle, and the cost of the item can be measured reliably. The carrying amount of an
asset is derecognized when replaced.
Repairs and maintenance expenses are charged to profit or loss when they are incurred.
b) Depreciation methods used
Depreciation is calculated using the straight-line method, applying annual rates sufficient to extinguish the values of assets at the end of
their estimated useful lives. In those cases in which an asset includes significant components with different useful lives, such components
are recognized and depreciated as separate items.
F-31
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The following chart presents the useful life for each item included in property, plant and equipment:
Property, plant and equipment
Buildings
Furniture
Machines and equipment
Vehicles
Land
Construction in progress
Estimated useful life
50 Years
10 Years
5 Years
5 Years
Not depreciated
Not depreciated
The asset’s residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount.
1.14. Investment properties
Basis of measurement used
Investment properties are composed of buildings held for obtaining a rent or for capital appreciation or both, but is never occupied by
Grupo Supervielle.
Investment properties under the fair value approach, are measured at its fair value, and any gain or loss arising from a change in the fair
value is recognized in profit or loss. Investment properties are never depreciated. The fair value is determined using sales comparison
approach prepared by Grupo Supervielle's management considering a report of an independent valuation expert.
The sale prices of comparable properties are adjusted considering the specific aspects of each property, the most relevant assumption
being the price per square meter (Level 3).
Investment properties under the cost approach reflect the amount that would be required to replace the service capacity of the asset.
They were valued at acquisition or construction cost, net of accumulated depreciation and / or accumulated depreciation losses. The cost
includes expenses that are directly attributable to the acquisition or construction of these items.
Movements in investment properties for the year ended December 31, 2023 and 2022 were as follows:
Income derived from rents (rents charged)
Direct operating expenses of properties that generated income derived from rents
Fair value remeasurement
Total
12/31/2023
89,087
(15,681)
(7,012,278)
(6,938,872)
12/31/2022
228,579
(17,655)
(2,503,275)
(2,292,351)
The net result generated by the investment property as of December 31, 2023 and 2022 amounts to a loss of $6,938,872 and an loss of
$2,292,351 respectively, and is recognized under "Other operating income", "Administrative expenses" and "Other operating expenses".
in the Consolidated Income Statement.
Gain and losses on disposals are determined by comparing proceeds with the carrying amount.
F-32
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1.15. Inventories
As of December 31, 2023, the Group has no inventory balance.
As of December 31, 2022, inventories were valued at the lower of cost and net realizable value. Cost includes the acquisition costs (net
of discounts, rebates and similar), as well as other costs that have been incurred to bring the inventories to their current location and
conditions to be commercialized. The net realizable value is the estimated selling price in the ordinary course of business less the
estimated costs of sale.
Grupo Supervielle evaluates the net realizable value of inventories at the end of each year, charging the corresponding value correction
to results to the extent that the book value exceeds the net realizable value. The Group reverses previously recognised impairment losses
when the circumstances that previously caused the value adjustment cease to exist, or when there is clear evidence of an increase in net
value. The Group establishes a provision for obsolete or slow-moving products relative to the inventory at the end of each year. This
forecast is established based on an analysis of product obsolescence carried out by management.
1.16. Intangible Assets
(a) Goodwill
Goodwill resulting from the acquisition of subsidiaries, associates or joint ventures account for the excess of:
(i)
(ii)
the cost of an acquisition, which is measured as the sum of the consideration transferred, valued at fair value at the acquisition
date plus the amount of non-controlling interest; and
the fair value of the identifiable assets acquired and the liabilities assumed of the acquiree.
Goodwill is included in the intangible assets item in the Consolidated statement of financial position.
Goodwill is not subject to amortization, but it is annually tested for impairment. Impairment losses are not reverted once recorded. Gains
and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Goodwill impairment is recognized when the
carrying amount exceeds its recoverable amount which derives from the fair value of the cash-generating unit. The fair value of the
reporting unit is estimated using discounted cash flows techniques.
(b) Trademarks and licenses
Trademarks and licenses acquired separately are initially valued at historical cost, while those acquired through a business combination
are recognized at their estimated fair value at the acquisition date.
Intangible assets with a finite useful life are subsequently carried at cost less accumulated depreciation and / impairment losses, if any.
These assets are tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be
impaired.
Trademarks acquired by Grupo Supervielle have been classified as intangible assets with an indefinite useful life. The main factors
considered for this classification include the years in which they have been in service and their recognition among industry customers.
F-33
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Intangible assets with an indefinite useful life are those that arise from contracts or other legal rights that can be renewed without a
significant cost and for which, based on an analysis of all the relevant factors, there is no foreseeable limit of the period over which the
asset is expected to generate net cash flows for Grupo Supervielle. These intangible assets are not amortized, but are tested for
impairment annually or more frequently if events or changes in circumstances indicate that they might be impaired, either individually
or at the level of the cash generating unit. The categorization of the indefinite useful life is reviewed annually to confirm if it is still
applicable.
Impairment losses are recognized when the book value exceeds its recoverable value. The recoverable value of the assets corresponds
to the greater of the recoverable value of the asset or its value in use. For the purposes of the impairment test, assets are grouped at the
lowest level at which they generate identifiable cash flows (cash generating units). The impairments of these non-financial assets - other
than goodwill - are reviewed at each reporting date to verify possible reversals.
(c) Software
Costs related to software maintenance are recognized as an expense as incurred. Development, acquisition or implementation costs
which are directly attributable to the design and testing of identifiable and unique software products controlled by Grupo Supervielle
are recognized as intangible assets.
The development, acquisition or implementation costs initially recognized as expenses for a period are not subsequently recognized as
the cost of the intangible asset. The costs incurred in the development, acquisition or implementation of software, recognized as
intangible assets, are amortized by applying the straight-line method over their estimated useful lives, in a term that does not exceed five
years.
1.18. Impairment of non-financial assets
Assets with an indefinite useful life are not subject to amortization but are tested annually for impairment or more frequently if events
or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable or, at least, on an annual basis.
Impairment losses are recognized when the carrying amount exceeds its recoverable amount. The recoverable amount of an asset is the
higher of an asset’s fair value less costs of disposal and value in use. For purposes of assessing impairment, assets are grouped at the
lowest level for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets
or group of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
1.19. Trust Assets
Assets held by Grupo Supervielle in its Trustee role, are not included in the Consolidated Financial Statements. Commissions and fees
earned from trust activities are included in Service fee income.
1.20. Offsetting
Financial assets and liabilities are offset and the net amount reported in the consolidated financial statement where Grupo Supervielle
has a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and
settle the liability simultaneously.
F-34
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1.21. Financing received from the Argentine Central Bank and other Financial Institutions
The amounts owed to other financial institutions are recorded at the time the bank disburses the proceeds to Grupo Supervielle. Non-
derivative financial liabilities are measured at amortized cost.
In the event that Grupo Supervielle repurchases its own debt, it is eliminated from the consolidated financial statements and the
difference between the residual value of the financial liability and the amount paid is recognized as a financial income or expense.
1.22. Provisions / Contingencies
A provision will be recognized when:
•
•
•
an entity has a present obligation (legal or implicit) as a result of past event;
it is probable that an outflow of resources embodying future economic benefits will be required to settle the obligation; and
the amount can be reliably estimated.
An Entity will be deemed to have an implicit obligation where (a) Grupo Supervielle has assumed certain responsibilities as a
consequence of past practices or public policies and (b) as a result, Grupo Supervielle has created an expectation that it will discharge
those responsibilities.
Grupo Supervielle recognizes the following provisions:
For labor, civil and commercial lawsuits: provisions are calculated based on lawyers’ reports about the status of the proceedings and the
estimate about the potential losses to be afforded by Grupo Supervielle, as well as on the basis of past experience in this type of claims.
For miscellaneous risks: These provisions are set up to address contingencies that may trigger obligations for Grupo Supervielle. In
estimating the provision amounts, Grupo Supervielle evaluates the likelihood of occurrence taking into consideration the opinion of its
legal and professional advisors.
Other contingent liabilities are: i) possible obligations that arise from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of uncertain future events not wholly within the control of Grupo Supervielle; or ii) present obligations
that arise from past events but it is not probable that an outflow of resources will be required to its settlement; or whose amount cannot
be measured with sufficient reliability.
Other contingent liabilities are not recognized. Contingent liabilities, whose possibility of any outflow in settlement is remote, are not
disclosed unless they involve guarantees, in which case the nature of the guarantee is disclosed.
Grupo Supervielle does not account for positive contingencies, other than those arising from deferred taxes and those contingencies
whose occurrence is virtually certain.
As of the date of these Consolidated Financial Statements, Grupo Supervielle’s management believes there are no elements leading to
determine the existence of contingencies that might be materialized and have a negative impact on these Consolidated Financial
Statements other than those disclosed in Note 16.
F-35
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
1.23. Other non-financial liabilities
Non-financial liabilities are accrued when the counterparty has fulfilled its contractual obligations and are measured at amortized cost.
1.24. Employee benefits
Grupo Supervielle, make provisions related to early retirement plans. The liability related to these plans and benefits is not expected to
be settled in the next 12 months. Therefore, they are measured at the present value of the future cash flows that are expected to be
realized with respect to the services provided by the employees until the end of the year using the credit unit method. The level of
salaries, experience and separations as well as the years of service are taken into account. Expected future payments are discounted
using the market rate at the end of the year corresponding to sovereign bonds with terms and currency that coincide with the expected
flows. Remeasurements as a result of experience and changes in actuarial premises are recognized in results.
Provisions for short-term benefits are measured at the present value of the disbursements that are expected to be required to settle the
obligation using a pre-tax interest rate that reflects current market conditions on the value of money and the specific risks for said
obligation. The increase in the provision for the passage of time is recognized in the net financial results caption of the consolidated
income statement.
Termination benefits are payable when employment is terminated by Grupo Supervielle before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits. Grupo Supervielle recognises termination benefits at the earlier
of the following dates: (a) when Grupo Supervielle can no longer withdraw the offer of those benefits; and (b) when the entity recognises
costs for a restructuring that is within the scope of IAS 37 and makes the payment of terminations benefits. In the case of an offer made
to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the
offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
1.25. Debt Securities
Subordinated and unsubordinated Debt Securities issued by Grupo Supervielle are measured at amortized cost. Where Grupo Supervielle
buys back its own debt, such obligations will be derecognized from the Consolidated Financial Statements and the difference between
the residual value of the financial liability and the amount paid will be recognized as financial income or expenses.
The detail of the programs is described in Note 23.
1.26. Assets and liabilities derived from insurance contracts
Grupo Supervielle applies IFRS 17 “Insurance Contracts” in order to recognize and measure the assets and liabilities derived from
insurance contracts.
Main accounting policies applied – Insurance Contracts
Insurance contracts
Insurance contracts are contracts under which the Group accepts a significant insurance risk from a policyholder by agreeing to
compensate the policyholder if a specific uncertain future event adversely affects the policyholder. In making this assessment, all
material rights and obligations, including those arising from laws or regulations, are considered contract by contract. The Group uses its
judgment to assess whether a contract transfers insurance risk (i.e. whether there is a scenario with commercial substance in which the
Group has the possibility of a loss on a present value basis) and whether the insurance risk accepted is significant.
F-36
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Separation of components
Contracts that have a legal form of insurance but do not transfer significant insurance risk and expose the Group to financial risks are
classified as investment contracts and follow accounting for financial instruments in accordance with IFRS 9. The Group has assessed
whether in its contracts accept a significant insurance risk from another party, agreeing to compensate the policyholder if an uncertain
future event occurs that adversely affects the policyholder. From this evaluation it has been concluded that all insurance contracts that
were under the scope of IFRS 4 meet the definition of an insurance contract and therefore, the introduction of IFRS 17 does not imply
any reclassification.
Aggregation level
The Group aggregates insurance contracts taking into consideration whether they are subject to similar risks and are managed jointly,
whether they are onerous or non-onerous contracts, and their year of issue, grouping by this last criteria contracts issued in the natural
year, that is, between January 1 and December 31 of each year.
Measurement Model
IFRS 17 includes three measurement models, which reflect a different degree of participation of policyholders in the investment
performance or the overall performance of the insurance entity: the general measurement model (GMM, also known as the block
approach construction), the variable rate approach (VFA) and the premium allocation approach (PAA).
In measuring insurance contracts, the Group has decided to apply the Simplified Model (Premium Allocation Approach) because for
the remaining coverage liability of contracts have a coverage period of one year or less, or in those contracts with a duration greater than
year, it is not expected that a material valuation different from that of the General Model will occur.
Under the simplified approach, the Group assumes that such contracts are not onerous on initial recognition, unless facts and
circumstances indicate otherwise. If the facts and circumstances indicates that some contracts are onerous, an additional evaluation is
performed to distinguish onerous from non-onerous contracts. For non-onerous contracts, the Group assesses the likelihood of changes
in applicable facts and circumstances in subsequent periods to determine whether the contracts have a significant possibility of becoming
onerous.
Remaining coverage liability – Simplified model
Under the simplified model, the remaining coverage liability is formed by the premiums received (collected), less the insurance
acquisition cash flows paid, plus or minus the allocation to results of the expected premiums or acquisition flows, respectively. The
profit or loss recognition is made linearly throughout the coverage period of the contract, in the event that the accrual of the income is
also linear. By default, the Group has chosen to defer acquisition expenses, although the option of recognizing such expenses when
they are incurred is also available.
The Group does not adjust the remaining coverage liability for issued insurance contracts for the effect of the time value of money,
because the insurance premiums mature within the coverage period of the contracts, which is one year or less.
Liability for incurred claims – Simplified model
The groups of contracts valued under the simplified model have a liability for incurred claims calculated in a similar way to that of the
General Model. Under this method, future cash flows are adjusted for the time value of money. Likewise, the risk adjustment for non-
financial risk is applied to the present value of the estimated future cash flows and reflects the compensation that the Group requires for
F-37
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
enduring uncertainty about the amount and timing of the cash flows for non-financial risk as the Group complies with insurance
contracts.
Discount rate
When determining discount rates for different products, the Group uses the top-down approach. In applying this approach, the Group
uses the yield curve created by the market rates of return implied by the fair value of a portfolio of reference assets and adjusts it to
exclude the effects of risks present in the assets, but not in insurance cash flows, except for liquidity differences, which do not need to
be eliminated.
Cash flows were discounted at a target rate of return on local instrument investments of 4% at constant values, with terms and currency
that match the expected flows.
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk represents the compensation required for enduring uncertainty about the amount and timing
of associated cash flows. To estimate the adjustment for non-financial risk, the Group has used its own methodologies based on
calculations of the Value at Risk (VaR) of the commitments associated with the Life and Non-Life businesses, using a confidence level
of 75%.
Reinsurance
In general, the Group values reinsurance coverage under the Simplified Model, valuing the asset for remaining coverage of contracts
with a coverage period equal to or less than one year, or in those contracts with a duration greater than one year, but that a valuation
significantly different from that of the General Model is not expected to occur. This method also includes the asset for claims incurred.
Income from insurance activities
Insurance income reflects the consideration to which the Group expects to be entitled in exchange for the provision of coverage and
other insurance contract services. Insurance service expenses include claims incurred and other insurance service expenses incurred, and
losses on onerous groups of contracts and reversals of such losses.
The Group applies the accounting policy established in IFRS 17.86 and presents the financial performance of groups of reinsurance
contracts held on a net basis on net income (expenses) of reinsurance contracts held.
In general, for the presentation of financial income or expenses from insurance contracts that arise as a consequence of the effect of the
time value of money and the effect of financial risk, the Group does not disaggregate the changes in the risk adjustment for non-financial
risk between the result of the insurance service and insurance financial income or expenses.
The Group includes all insurance financial income or expenses for the period in results.
1.27. Capital Stock and Capital Adjustments
Accounts included in this item are expressed in terms of the measuring unit current as of December 31, 2023 as described in Note 1.1.2,
except from the item “Capital Stock”, which has been held at nominal value.
Common shares are recognized in shareholders´ equity and carried at nominal value.
F-38
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
As indicated in Note 32 to the Consolidated Financial Statements, the Company's Board of Directors approved the repurchase of
securities issued by the Company and established the terms and conditions for the acquisition of treasury shares issued by the Company.
The cost of treasury shares is disclosed as part of the Capital Stock within the Statement of Changes in Shareholders´ Equity, after the
Share capital stock, Inflation adjustment of capital stock and Paid in Capital. As of the date of issuance of these Consolidated Financial
Statements, the repurchase programme has expired.
1.28. Reserves and Dividend distribution
Pursuant to provisions set by the Argentine Corporations law, Grupo Supervielle and its subsidiaries, other than Banco Supervielle are
required to appropriate 5% of the net income for the fiscal year to the legal reserve until such reserve is equal to 20% of Capital stock,
plus the balance of the Capital Adjustment account.
As concerns Banco Supervielle, according to the regulations set forth by the Argentine Central Bank, 20% of net income for the
fiscal year, net of previous years’ adjustments, if any, is required to be appropriated to the legal reserve. Notwithstanding the
aforementioned, in appropriating amounts to other reserves, Financial Institutions are required to comply with the provisions laid down
by the Argentine Central Bank in the revised text on distribution of dividends described in Note 24.
Given the repurchase of treasury shares carried out by Grupo Supervielle, described in Note 32, due to local regulations Grupo
Supervielle has a restriction on the distribution of results and/or reversal of free reserves of $5,166,412 (figure expressed in thousands
of Argentine Pesos) equivalent to the cost of acquisition of own shares.
The distribution of dividends to Grupo Supervielle’s shareholders is recognized as a liability in the consolidated financial statements for
the fiscal year in which dividends are approved by Grupo Supervielle’s Shareholders.
1.29. Revenue Recognition
Financial income and expense is recognized in respect of all debt instruments in accordance with the effective interest rate method,
pursuant to which all gains and losses which are an integral part of the transaction effective interest rate are deferred.
The results that are included within the effective interest rate include expenditures or income related to the creation or acquisition of a
financial asset or liability, such as compensation received for the analysis of the client's financial condition, negotiation of the terms of
the instrument, the preparation and processing of the documents necessary to conclude the transaction and the compensations received
for the granting of credit agreements that are expected to be used by the client. Grupo Supervielle records all its non-derivative financial
liabilities at amortized cost, except those included in the caption "Liabilities at fair value through profit or loss", which are measured at
fair value.
It should be noted that the commissions that Grupo Supervielle receives for the origination of syndicated loans are not part of the
effective interest rate of the product, being these recognized in the Income Statement at the time the service is provided, as long as Grupo
Supervielle does not withhold part of it or this is kept in the same conditions as the rest of the participants. The commissions received
by Grupo Supervielle for the negotiations in the transactions of a third party are not part of the effective interest rate either, these being
recognized at the time the services are provided.
IFRS 15 establishes the principles that an entity must apply to account for income and cash flows from contracts for the sale of goods
or services to its customers.
The amount to be recognized will be that which reflects the payment to which it is expected to be entitled for the services rendered.
F-39
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Grupo Supervielle's income from services is recognized in the income statement as performance obligations are fulfilled, part of the
consideration received is allocated to the customer loyalty programs described below. Consideration is allocated based on the relative
standalone selling prices for services rendered and points granted.
Below is a summary of the main commissions earned by the Group:
Commission
Account maintenance
Safe deposit boxes
Issuing Bank
Credit Card renewal
Check management
Frecuency of revenue recognition
Monthly
Semi-annual
Event driven
Annual
Event driven
Income from investment property rentals is recognized in the Consolidated Statement of Other Comprehensive Income based on the
straight-line method over the term of the lease, in accordance with the provisions of Note 1.14.
1.30. Income tax
Income tax expense for the year includes current and deferred tax. Income tax is recognized in the consolidated income statement, except
for items required to be recognized directly in other comprehensive income. In this case, the income tax liability related to such items
is also recognized in such statement.
Current income tax expense is calculated on the basis of the tax laws enacted or substantially enacted as of the date of the Statement of
Financial Position in the countries where the Company and its subsidiaries operate and generate taxable income. Grupo Supervielle
periodically assesses the position assumed in tax returns in connection with circumstances in which the tax regulation is subject to
interpretation. Grupo Supervielle sets up provisions in respect of the amounts expected to be required to pay to the tax authorities.
Deferred income tax is recognized, using the deferred tax liability method, on temporary differences arising from the carrying amount
of assets and liabilities and their tax base. However, the deferred tax arising from the initial recognition of an asset or liability in a
transaction other than a business combination which, at the time of the transaction does not affect income or loss for accounting or tax
purposes, is not recorded. Deferred income tax is determined using tax rates (and laws) enacted as of the date of the consolidated
financial statements and that are expected to be applicable when the deferred tax assets are realized or the deferred tax liabilities are
settled.
Deferred income tax assets are recognized only to the extent future tax benefits are likely to arise against which the temporary differences
can be offset.
Grupo Supervielle recognizes a deferred tax liability for taxable temporary differences related to investments in subsidiaries and
affiliates, except that the following two conditions are met:
• Grupo Supervielle controls the timing on which temporary differences will be reversed; and
• Such temporary differences are not likely to be reversed in the foreseeable future.
F-40
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Deferred income tax assets and liabilities are offset when a legal right exists to offset current tax assets against current tax liabilities and
to the extent such balances are related to the same tax authority of Grupo Supervielle or its subsidiaries, where tax balances are intended
to be, and may be, settled on a net basis.
1.31. Earnings per share
Basic earnings per share are calculated by dividing net income attributable to Grupo Supervielle’s shareholders by the weighted average
number of common shares outstanding during the year.
Diluted earnings per share are calculated by dividing the net income for the year by the weighted average number of common shares
issued and dilutive potential common shares at year end. Since the Company has no dilutive potential common shares outstanding,
there are no dilutive earnings per share amounts.
2. CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of these Consolidated Financial Statements in accordance with IFRS Accounting Standards requires the use of certain
critical accounting estimates. It also requires Senior Management to make judgements in applying the accounting standards to define
Grupo Supervielle’s accounting policies.
Grupo Supervielle has identified the following areas which involve a higher degree of judgement or complexity, or areas where
assumptions and estimates are material for these Consolidated Financial Statements which are essential to understand the underlying
accounting/financial reporting risks:
a- Fair value of financial instruments that do not have an active market
The fair value of financial instruments not listed in active markets is determined by using valuation techniques. Such techniques are
regulary validated and reviewed by qualified personnel independent from the area which developed them. All models are assessed and
adjusted before being used in order to ensure that results reflect current information and comparable market prices. As long as possible,
models rely on observable inputs only; which include significant assumptions related to implicit rates in the last available tender for
similar securities and spot rate curves, require the use of estimates. Changes in the assumptions of these factors may affect the reported
fair value of financial instruments.
F-41
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
b- Allowances for loan losses
The Group recognizes the allowance for loan losses under the expected credit loss method included in IFRS 9. The most significant
judgements of the model relate to defining what is considered to be a significant increase in credit risk and in making assumptions and
estimates to incorporate relevant information about past events, current conditions and forecasts of economic conditions. The impact of
the forecasts of economic conditions are determined based on the weighted average of three internally developed macroeconomic
scenarios that take into consideration Grupo Supervielle’s economic outlook as derived through forecast macroeconomic variables,
which include inflation rate, monthly economic activity estimator, exchange rate, monetary policy rate, private sector real loans and
private sector real wage. A high degree of uncertainty is involved in making estimations using assumptions that are highly subjective.
Note 1.11 provides more detail of how the expected credit loss allowance is calculated.
c- Impairment of Non-Financial Assets
Intangible assets with definite useful life and property, plant and equipment are amortized or depreciated on a straight-line basis during
their estimated useful life. Grupo Supervielle monitors the conditions associated with these assets to determine whether the events and
circumstances require a review of the remaining amortization or depreciation term and whether there are impairment indicators.
Grupo Supervielle has applied judgment in identifying indicators of impairment of property, plant and equipment and intangible assets
that are amortized. Grupo Supervielle has requested valuations by external independent valuers for its land and buildings category as
of December 31, 2023, recording and impairment on some of them (see Note 12.1). For the rest of the categories of property, plant and
equipment as well as for intangibles other than goodwill, no indicators have been identified and no impairment has been recognised for
any of the periods presented in the Consolidated Financial Statements. During the year, the Group has recorded an impairment on the
goodwill of Micro Lending as explained in Note 14.1.
d- Income tax and deferred tax
A significant judgment is required to determine liabilities and assets from current and deferred taxes. Current tax is measured at the
amount expected to be paid to the taxation authority using the tax rates that have been enacted or substantially enacted by the end of the
reporting period. Deferred tax is measured over temporary differences between tax basis of assets and liabilities and book values at the
tax rates that are impairment indicators.
Assets from deferred tax are recognized upon the possibility of relying on future taxable earnings against which temporary differences
can be used, based on the Senior Management´s assumptions regarding amounts and opportunities of future taxable earnings. Real
results may differ from estimates, such as changes in tax legislation or the result of the final review of affidavits issued by tax authorities
and tax courts.
Likely future tax earnings and the number of tax benefits are based on a medium term business plan prepared by the administration.
Such plan is based on reasonable expectations.
3. SEGMENT REPORTING
Grupo Supervielle determines operating segments based on performance reports which are updated upon changes and reviewed by the
Board and key personnel of Senior Management.
Grupo Supervielle´s clients receive the following services:
F-42
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
• Personal and Business Banking Segment:
-
-
Small companies, individuals and companies that record annual sales of up to 500,000
"Small and medium size companies", companies that record annual sales of over 500,000 up to 5,000,000
• Corporate Baking Segment:
- Megras that record annual sales over 5,000,000 up to 7,000,000
- Big companies. Big companies that record annual sales of over 7,000,000
Grupo Supervielle analyses the bussiness taking into account the different type of services and products offered:
a- Personal and Business Banking – Through this segment, Supervielle offers a wide range of financial products and services
designed to meet the needs of individuals, entrepreneurs and small businesses and SMEs.
b- Corporate Banking – Includes advisory services at a corporate and financial level, as well as the administration of assets and
loans targeted to corporate clients.
c- Bank Treasury – This segment is in charge of the assignment of liquidity of the Entity in accordance with the different
commercial areas´ needs and its own needs, Treasury implements financial risk administration policies of the Bank, manages
trading desk operations, distributes financial products, such as negotiable securities and develops business with the financial
sector clients and whole sale non-financial sector clients.
d- Consumer Finance – As of December 31, 2022, the residual operations of IUDÚ and Tarjeta Automática are included in this
segment. As of December 31, 2023 these operations were part of a merger process with Banco Supervielle as described in
Note 33 to these Consolidated Financial Statements.
e- Insurance – Includes insurance products, with a focus on life insurance, to targeted customers segments.
f- Asset Management and Other Services – Grupo Supervielle offers a variety of other services to its clients, including mutual
fund products through Supervielle Asset Management S.A., retail brokerage services through InvertirOnline S.A.U., non-
financial products through Espacio Cordial Servicios S.A. and until February 2023 it offered payment solutions to retailers
through Bolsillo Digital S.A.U.
Operating results of the different operating segments of Grupo Supervielle are reviewed individually with the purpose of taking decisions
over the allocation of resources and the performance analysis of each segment. The performance of such segments will be evaluated
based on operating income and is measured consistently with operating income/(expenses) of the Consolidated Income Statement.
When a transaction is carried out between operating segments, they are made as an arm´s length transaction. Later, income, expenses
and results from transfers between operating segments are for consolidation purposes.
F-43
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Grupo Supervielle does not present information by geographical segments because there are no operating segments in economic
environments with risks and rewards that are significantly different.
The following chart includes information by segment measured in accordance with IAS 29, as of December 31, 2023, 2022 and 2021:
Asset by segments
Cash and due from banks
Debt securities at fair value through profit or loss
Loans and other financing
Other debt securities
Other Assets
Total Assets
Liabilities by segments
Deposits
Financing received from the Argentine Central Bank
and others
Other liabilities
Total Liabilities
Personal and
Business
Banking
Corporate
Banking
Treasury
Bank
Consumer
Finance
Total as of
Insurance Other Services Adjustments 12.31.2023
Asset
Management and
110,764,865
468,851
259,366,382
795,893
67,222,373
438,618,364
3,027,754
844,260
196,646,291
—
24,588,393
225,106,698
110,072,448
29,465,234
25,996,149
242,620,591
917,851,229
1,326,005,651
—
—
—
—
—
—
4,253
5,333,658
16,219
755,780
8,213,004
14,322,914
3,774,939
6,137,589
609,543
16
34,590,087
45,112,174
1,454,013
4,166,230
(179,500)
7,008,261
(3,606,804)
8,842,200
229,098,272
46,415,822
482,455,084
251,180,541
1,048,858,282
2,058,008,001
Personal and
Businesses Corporate
Banking
Banking
Bank
Treasury
580,111,750 215,174,968
753,861,511
Consumer
Finance
Total as of
Insurance Other Services Adjustments 12.31.2023
—
(220,173) 1,548,928,056
—
—
Asset
Management and
—
46,543
59,517,338
17,715,652
639,675,631 232,890,620
2,645,426
28,866,321
785,373,258
—
—
—
—
3,943,266
3,943,266
152,309
8,046,942
8,199,251
2,691,969
(152,309)
46,647,696
164,737,215
46,275,214 1,716,357,240
F-44
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Result by segments
Interests income
Interest Expense
Distribution of results by the Treasury
Net interest income
Net income from financial instruments at
fair value through profit or loss
Result from derecognition of assets
measured at amortized cost
Exchange rate differences on gold and
foreign currency
NIFFI And Exchange Rate Differences
Net Financial Income
Services Fee Income
Services Fee Expenses
Income from insurance activities
Net Service Fee Income
Subtotal
Result from exposure to changes in the
purchasing power of money
Other operating income
Loan loss provisions
Net operating income
Personnel expenses
Administrative expenses
Depreciations and impairment of non-
financial assets
Other operating expenses
Operating income
Income from associates and joint ventures
Result before taxes
Income tax
Net income / (loss)
Net income / (loss) for the year
attributable to owners of the parent
company
Net income / (loss) for the year attributable
to non-controlling interest
Other comprehensive income/(loss)
Other comprehensive income/(loss)
attributable to owners of the parent
company
Other comprehensive (loss) / income
attributable to non-controlling interest
Comprehensive income/(loss) for the
year
Comprehensive (loss) / income attributable
to owners of the parent company
Comprehensive income/(loss) attributable
to non-controlling interest
Personal and
Business
Banking
254,580,954
(292,693,459)
203,751,598
165,639,093
Corporate
Banking
161,646,276
(99,562,805)
9,161,791
71,245,262
Bank
Consumer
Treasury
Finance
Insurance
Asset
Management and
Other Services
Adjustments
731,623,996
(432,510,602)
(212,913,389)
86,200,005
—
—
—
—
185,695
—
—
185,695
3,464,527
(481,169)
—
2,983,358
6,195,807
(246,052)
—
5,949,755
For the year
ended
12.31.2023
1,157,697,255
(825,494,087)
—
332,203,168
1,352,209
(13,487)
116,387,674
—
11,047,489
5,800,702
3,506,459
138,081,046
145,846
—
15,702,513
(5,818,881)
(4,320,826)
161,318,267
60,345,902
(21,318,192)
—
39,027,710
200,345,977
26,191,260
11,608,309
(26,289,775)
211,855,771
(117,449,867)
(69,151,750)
(26,154,603)
(43,762,028)
(44,662,477)
—
(44,662,477)
13,997,503
(30,664,974)
(7,469,756)
(7,483,243)
63,762,019
7,459,745
(1,343,255)
—
6,116,490
69,878,509
12,474,869
144,565,056
230,765,061
570,174
(569,742)
—
432
230,765,493
(6,733,931)
5,803,159
(5,176,215)
63,771,522
(20,814,845)
(4,772,122)
(95,667,720)
4,374,320
(2,087,803)
137,384,290
(10,139,447)
(3,847,512)
(3,532,728)
(18,470,438)
16,181,389
—
16,181,389
(5,877,263)
10,304,126
(1,277,255)
(28,433,229)
93,686,847
—
93,686,847
(33,443,115)
60,243,732
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,008,741
16,857,100
1,050
11,048,539
11,234,234
—
—
13,144,841
13,144,841
24,379,075
(11,650,236)
44,079
—
12,772,918
(3,751,633)
(3,141,695)
(273,688)
(2,842)
5,603,060
—
5,603,060
(2,001,090)
3,601,970
3,618,385
9,419,087
12,402,445
26,447,148
(944,888)
—
25,502,260
37,904,705
(8,041,524)
3,077,190
—
32,940,371
(8,080,361)
(5,203,857)
(290,446)
(2,319,459)
17,046,248
48,675
17,094,923
(6,519,364)
10,575,559
2,995,241
7,510,441
13,460,196
(1,697,717)
—
1,286,472
(411,245)
13,048,951
5,800,908
160,739,054
492,942,222
93,125,252
(24,176,077)
14,431,313
83,380,488
576,322,710
(13,021,360)
(1,218,310)
(86,278)
(1,276,997)
(159,299)
1,678,242
(108,923,511)
23,688,747
(33,640,071)
457,447,875
(160,395,452)
(84,438,694)
(402,553)
(1,301,716)
(1,462,323)
(48,675)
(1,510,998)
(891,606)
(2,402,604)
(31,931,273)
(94,289,712)
86,392,744
—
86,392,744
(34,734,935)
51,657,809
(30,664,974)
10,304,126
60,243,732
—
3,601,970
10,575,559
(2,444,576)
51,615,837
—
(180,325)
—
(90,134)
—
3,991,429
—
—
—
(650,143)
—
442,857
41,972
(205,586)
41,972
3,308,098
(180,325)
(90,134)
3,991,429
—
(650,143)
442,857
(209,367)
3,304,317
—
—
—
—
—
—
3,781
3,781
(30,845,299)
10,213,992
64,235,161
—
2,951,827
11,018,416
(2,608,190)
54,965,907
(30,845,299)
10,213,992
64,235,161
—
2,951,827
11,018,416
(2,653,943)
54,920,154
—
—
—
—
—
—
45,753
45,753
F-45
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Asset by segments
Cash and due from banks
Debt securities at fair value through profit or loss
Loans and other financing
Other debt securities
Other Assets
Total Assets
Personal and
Business
Banking
Corporate
Banking
Bank
Treasury
Consumer
Finance
Total as of
Insurance Other Services Adjustments 12.31.2022
Asset
Management and
58,275,322
227,144
449,229,800
—
63,254,083
570,986,349
2,380,207
5,038,501
256,549,503
—
16,103,120
280,071,331
88,588,717
47,241,094
20,453,668
850,392,965
201,370,177
1,208,046,621
684,493
2,455,216
182,211
—
40,552,902
43,874,822
6,309
—
13,431
3,590,633
7,944,996
11,555,369
1,176,795
88,613
570,783
608,833
33,052,200
35,497,224
(392,200)
14,657,027
1,475,353
(14,616,864)
14,834,158
15,957,474
150,719,643
69,707,595
728,474,749
839,975,567
377,111,636
2,165,989,190
Liabilities by segments
Deposits
Financing received from the Argentine Central Bank
and others
Unsubordinated Debt Securities
Other liabilities
Total Liabilities
Personal and
Businesses
Banking
Corporate
Banking
Bank
Treasury
Consumer
Finance
Insurance
Asset
Management and
Other Services
Total as of
Adjustments 12.31.2022
763,209,849 198,010,241
732,444,284
12,681,248
—
217,493
(1,553,532) 1,705,009,583
274
110,257
13,615
40,091
59,032,522
12,079,574
822,392,719 210,103,704
17,109,321
1,694,565
16,735,601
767,983,771
923,168
—
4,031,144
17,635,560
—
—
2,296,080
2,296,080
1,515,363
—
4,038,742
5,771,598
17,219,834
(2,438,549)
1,748,271
—
56,254,181
154,467,844
52,262,100 1,878,445,532
Result by segments
Interests income
Interest Expense
Distribution of results by the Treasury
Net interest income
Net income from financial instruments at fair
value through profit or loss
Result from derecognition of assets measured
at amortized cost
Exchange rate differences on gold and foreign
currency
NIFFI And Exchange Rate Differences
Net Financial Income
Services Fee Income
Services Fee Expenses
Income from insurance activities
Net Service Fee Income
Subtotal
Result from exposure to changes in the
purchasing power of money
Other operating income
Loan loss provisions
Net operating income
Personnel expenses
Administrative expenses
Depreciations and impairment of non-financial
assets
Other operating expenses
Operating income
Income from associates and joint ventures
Result before taxes
Income tax
Net (loss) / income
Net (loss) / income for the year attributable to
owners of the parent company
Net (loss) / income for the year attributable to
non-controlling interest
Other comprehensive (loss)/income
Other comprehensive (loss) / income
attributable to owners of the parent company
Other comprehensive (loss) / income
attributable to non-controlling interest
Comprehensive (loss)/income for the year
Comprehensive (loss) / income attributable to
owners of the parent company
Comprehensive (loss) / income attributable to
non-controlling interest
Personal and
Business
Banking
214,375,398
(157,864,290)
51,369,892
107,881,000
1,336
—
1,968,725
1,970,061
109,851,061
62,377,536
(21,475,356)
—
40,902,180
150,753,241
37,872,214
12,487,079
(30,523,909)
170,588,625
(115,308,075)
(64,711,586)
(21,254,848)
(34,757,496)
(65,443,380)
—
(65,443,380)
23,211,328
(42,232,052)
Corporate
Banking
111,858,986
(33,085,907)
(34,182,339)
44,590,740
Bank
Treasury
436,230,689
(313,718,114)
(17,187,553)
105,325,022
Consumer
Finance
35,329,337
(25,112,121)
—
10,217,216
Insurance
Asset
Management and
Other Services Adjustments
(13,600,042)
14,452,176
—
852,134
145,471
(71,138)
—
74,333
14,508
—
—
14,508
For the year
ended
12.31.2022
784,354,347
(515,399,394)
—
268,954,953
—
45,944,093
3,303,521
4,455,319
4,022,452
(905,043)
56,821,678
—
1,550,449
—
—
—
(18,831)
1,531,618
457,234
457,234
45,047,974
6,893,759
(1,868,630)
—
5,025,129
50,073,103
(18,647,878)
10,998,295
(1,542,944)
40,880,576
(17,071,099)
(5,507,484)
(3,205,132)
(10,403,323)
4,693,538
—
4,693,538
(307,512)
4,386,026
4,613,361
52,107,903
157,432,925
543,986
(1,076,739)
—
(532,753)
156,900,172
(60,474,004)
841,224
(1,300,479)
95,966,913
(8,864,191)
(4,258,356)
(1,407,886)
(26,369,000)
55,067,480
—
55,067,480
(19,563,369)
35,504,111
(103,615)
3,199,906
13,417,122
9,186,376
(7,559,987)
—
1,626,389
15,043,511
3,871,837
5,356,171
(10,690,115)
13,581,404
(11,966,054)
(9,642,784)
(6,094,229)
(9,905,152)
(24,026,815)
(159,659)
(24,186,474)
10,220,414
(13,966,060)
62
4,455,381
4,469,889
—
—
12,564,841
12,564,841
17,034,730
(6,015,994)
74,999
(37,332)
11,056,403
(3,600,181)
(2,527,135)
(337,874)
(1,445)
4,589,768
—
4,589,768
(1,912,267)
2,677,501
282,166
4,304,618
4,378,951
17,677,488
(1,993,473)
—
15,684,015
20,062,966
(3,860,140)
1,055,432
(4,403)
17,253,855
(10,867,202)
(3,867,141)
(307,892)
(1,517,247)
694,373
126,419
820,792
(980,509)
(159,717)
1,323,851
399,977
1,252,111
(2,200,968)
581,461
1,539,313
(80,194)
1,171,917
(8,017,974)
1,857,874
(30,445)
(5,018,628)
(148,706)
1,567,678
1,160,058
28,642
(2,410,956)
33,240
(2,377,716)
495,993
(1,881,723)
8,541,784
66,895,080
335,850,033
94,478,177
(33,392,724)
14,104,154
75,189,607
411,039,640
(55,271,939)
32,671,074
(44,129,627)
344,309,148
(167,825,508)
(88,946,808)
(31,447,803)
(82,925,021)
(26,835,992)
—
(26,835,992)
11,164,078
(15,671,914)
(42,232,052)
4,386,026
35,504,111
(13,966,060)
2,677,501
(159,717)
(1,864,720)
(15,654,911)
—
(426,940)
—
(150,528)
—
(3,157,614)
(426,940)
(150,528)
(3,157,614)
—
—
—
—
50,398
—
190,121
(17,003)
(121,436)
(17,003)
(3,615,999)
50,398
190,121
(117,610)
(3,612,173)
—
(42,658,992)
—
4,235,498
—
32,346,497
—
(13,966,060)
—
2,727,899
—
30,404
(3,826)
(2,003,159)
(3,826)
(19,287,913)
(42,658,992)
4,235,498
32,346,497
(13,966,060)
2,727,899
30,404
(1,982,330)
(19,267,084)
—
—
—
—
—
—
(20,829)
(20,829)
F-46
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Result by segments
Interests income
Interest Expense
Distribution of results by the Treasury
Net interest income
Net income from financial instruments at fair
value through profit or loss
Result from derecognition of assets measured
at amortized cost
Exchange rate differences on gold and foreign
currency
NIFFI And Exchange Rate Differences
Net Financial Income
Services Fee Income
Services Fee Expenses
Income from insurance activities
Net Service Fee Income
Subtotal
Result from exposure to changes in the
purchasing power of money
Other operating income
Loan loss provisions
Net operating income
Personnel expenses
Administrative expenses
Depreciations and impairment of non-financial
assets
Other operating expenses
Operating income
Income from associates and joint ventures
Result before taxes
Income tax
Net (loss) / income
Net (loss) / income for the year attributable to
owners of the parent company
Net (loss) / income for the year attributable to
non-controlling interest
Other comprehensive (loss)/income
Other comprehensive (loss) / income
attributable to owners of the parent company
Other comprehensive (loss) / income
attributable to non-controlling interest
Comprehensive (loss)/income for the year
Comprehensive (loss) / income attributable to
owners of the parent company
Comprehensive (loss) / income attributable to
non-controlling interest
Personal and
Business
Banking
186,358,164
(98,489,444)
31,144,193
119,012,913
—
—
1,920,588
1,920,588
120,933,501
63,869,023
(20,897,502)
—
42,971,521
163,905,022
18,058,162
7,919,897
(25,163,793)
164,719,288
(110,560,426)
(67,180,251)
(20,074,545)
(31,693,687)
(64,789,621)
—
(64,789,621)
22,571,803
(42,217,818)
Corporate
Banking
117,994,415
(18,436,833)
(55,658,692)
43,898,890
Bank
Treasury
284,642,353
(236,628,292)
24,514,499
72,528,560
Consumer
Finance
48,093,046
(23,257,841)
—
24,835,205
Insurance
Asset
Management and
Other Services Adjustments
(9,724,588)
9,821,874
—
97,286
46,664
—
—
46,664
8,626
—
—
8,626
For the year
ended
12.31.2021
627,418,680
(366,990,536)
—
260,428,144
—
44,748,073
2,222,392
3,485,461
2,590,765
876,912
53,923,603
—
1,685,257
—
—
—
(143,356)
1,541,901
525,145
525,145
44,424,035
6,299,126
(2,064,100)
—
4,235,026
48,659,061
(11,257,365)
8,249,419
(5,009,029)
40,642,086
(11,636,310)
(4,863,041)
(1,906,341)
(13,057,587)
9,178,807
—
9,178,807
(3,080,448)
6,098,359
2,436,715
48,870,045
121,398,605
374,013
(1,032,045)
—
(658,032)
120,740,573
(39,021,857)
12,567,064
(191,824)
94,093,956
(6,686,701)
(4,737,588)
(1,278,848)
(19,018,428)
62,372,391
—
62,372,391
(20,205,511)
42,166,880
87,060
2,309,452
27,144,657
16,364,490
(6,956,535)
—
9,407,955
36,552,612
(4,242,403)
4,704,706
(23,804,331)
13,210,584
(15,896,158)
(10,671,255)
(1,240,791)
(6,507,517)
(21,105,137)
32,835
(21,072,302)
2,046,011
(19,026,291)
3,955
3,489,416
3,498,042
—
—
11,985,937
11,985,937
15,483,979
(4,341,278)
91,093
—
11,233,794
(3,434,253)
(2,984,659)
(289,204)
(99,015)
4,426,663
—
4,426,663
(1,151,570)
3,275,093
493,961
3,084,726
3,131,390
16,272,949
(840,396)
—
15,432,553
18,563,943
(2,744,682)
492,298
—
16,311,559
(6,802,463)
(3,892,527)
(271,326)
(1,251,049)
4,094,194
—
4,094,194
(1,495,719)
2,598,475
552,378
1,285,934
1,383,220
(2,087,967)
972,335
1,791,460
675,828
2,059,048
(3,812,478)
(1,408,313)
—
(3,161,743)
(220,870)
1,182,247
(568,694)
(243,063)
(3,012,123)
(32,835)
(3,044,958)
(382,488)
(3,427,446)
6,019,802
61,485,306
321,913,450
101,091,634
(30,818,243)
13,777,397
84,050,788
405,964,238
(47,361,901)
32,616,164
(54,168,977)
337,049,524
(155,237,181)
(93,147,074)
(25,629,749)
(71,870,346)
(8,834,826)
—
(8,834,826)
(1,697,922)
(10,532,748)
(42,217,818)
6,098,359
42,166,880
(19,026,291)
3,275,093
2,598,475
(3,416,424)
(10,521,726)
—
(140,896)
—
(87,291)
—
(175,737)
(140,896)
(87,291)
(175,737)
—
—
—
—
(7,097)
(7,097)
—
2,457
(11,022)
82,649
(11,022)
(325,915)
2,457
83,065
(325,499)
—
(42,358,714)
—
6,011,068
—
41,991,143
—
(19,026,291)
—
3,267,996
—
2,600,932
(416)
(3,344,797)
(416)
(10,858,663)
(42,358,714)
6,011,068
41,991,143
(19,026,291)
3,267,996
2,600,932
(3,333,359)
(10,847,225)
—
—
—
—
—
—
(11,438)
(11,438)
4. INCOME TAX
Tax inflation adjustment
Law 27,430 introduced a modification in which it established that the subjects referred to in subparagraphs a) to e) of article 53 of the
current Income Tax Law, for the purpose of determining the net taxable income, should deduct or incorporate to the tax result of the
year the adjustment for tax inflation. Said adjustment would be applicable in the fiscal year in which the accumulated 3 year inflation
rate determined using the consumer price index is greater than 100%.
The positive or negative inflation adjustment, as the case may be, that must be calculated, would be allocated as follows: the first and
second fiscal years beginning on or after January 1, 2019, a sixth (1/6) should be allocated in that fiscal period and the remaining five
sixths (5/6), in equal parts, in the five (5) immediately following fiscal periods. For the years beginning on or after January 1, 2021, the
F-47
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
allocation of the inflation adjustment will be made in its entirety (100%), without any deferral. In this sense, in the current fiscal period
the Group has computed the entire inflation adjustment calculated for this year.
Grupo Supervielle, considering the jurisprudence on this matter evaluated by the legal and tax advisors, submitted to the Federal
Administration of Public Revenues (AFIP) its annual income tax return for the fiscal period 2020 considering the total effect of the
inflation adjustment.
Tax rate
On June 16, 2021, Law 27,630 was enacted, which establishes a new structure of staggered rates for income tax with three segments in
relation to the level of accumulated net taxable profit, applicable to fiscal years beginning on or after January 1, 2021, inclusive.
The new Tax rates are:
• Up to $5,000,000 of the accumulated taxable net profit: they will pay a tax of 25%;
• More than $5,000,000 and up to $50,000,000 of accumulated taxable net profit: they will pay a fixed amount of $1,250,000
plus a tax at a 30% rate on the excess of $5,000,000.
• More than $50,000,000 of accumulated taxable net profit: they will pay a fixed amount of $14,750,000 plus a tax at a 35%
rate on the excess of $50,000,000.
The amounts provided above will be adjusted annually, since January 1, 2022, based on the annual variation of the Consumer Price
Index (CPI) provided by the National Institute of Statistics and Censuses (INDEC), corresponding to the month of October of the year
prior to the adjustment, with respect to the same month of the previous year.
Dividend tax: it is established that dividends or profits distributed to individuals, undivided estates or foreign beneficiaries will be taxed
at the rate of 7%.
The following is a reconciliation between the income tax charged to income as of December 31, 2023, 2022 and 2021 and that which
would result from applying the current tax rate on the accounting profit
Income before taxes
Tax rate
Income for the year at tax rate
Permanent differences at tax rate:
Contribution SGR (Mutual Guarantee Societies)
Tax inflation adjustment
Income tax return
Effect of tax rate change on deferred tax
Non-deductible results
Income tax
12/31/2023
86,392,744
12/31/2022
(26,835,992)
12/31/2021
(8,834,826)
35 %
34 %
28 %
30,121,478
(9,238,345)
(2,429,768)
(42,000)
2,918,227
(463,742)
579,705
1,621,267
34,734,935
(585,418)
(6,811,432)
108,563
5,332,012
30,542
(11,164,078)
(1,751,560)
679,484
160,725
4,620,424
418,617
1,697,922
F-48
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
4.1 Deferred tax
The net position of the deferred tax is as follows:
Deferred tax assets
Deferred tax liability
Net assets by deferred tax
Deferred taxes to be recovered in more than 12 months
Deferred taxes to be recovered in 12 months
Subtotal – Deferred tax assets
Deferred taxes to be paid in more than 12 months
Deferred taxes to be paid in 12 months
Subtotal – Deferred tax liabilities
Total Net Assets by deferred Tax
12/31/2023
12,960,099
(1,614,907)
11,345,192
12/31/2022
37,997,568
(565,339)
37,432,229
10,756,236
2,203,863
12,960,099
(2,243,528)
628,621
(1,614,907)
11,345,192
31,134,571
6,862,997
37,997,568
(2,522,912)
1,957,573
(565,339)
37,432,229
According to the analysis carried out by Grupo Supervielle, it is considered that the assets detailed above meet the requirements to
consider them recoverable.
Deferred tax assets / (liabilities) are summarized as follows:
Intangible assets
Loan Loss Reserves
Property, plant and equipment
Foreign Currency
Tax Loss Carry Forward
Inflation adjustment credit
Provisions
Others
Total
Intangible assets
Loan Loss Reserves
Property, plant and equipment
Foreign Currency
Tax Loss Carry Forward
Inflation adjustment credit
Provisions
Others
Total
The breakdown of the Tax Loss Carry Forward by expiration date is as follows:
F-49
(Charge)/Credit
to Income/OCI
Balance at
12/31/2023
Balance at
12/31/2022
(8,636,673)
6,075,520
(8,082,143)
(316,325)
(2,980) (8,639,653)
5,474,235
(601,285)
3,838,308 (4,243,835)
(316,325)
2,230,011
5,179,751
4,701,196
6,959,812
37,432,229 (26,087,037) 11,345,192
—
37,682,645 (35,452,634)
(3,598,498)
3,035,018
6,695,034
8,778,249
1,666,178
264,778
Balance at
12/31/2021
(8,835,482)
9,171,961
(24,196,860)
(316,325)
23,909,997
11,955,927
1,844,910
5,714,651
19,248,779
(Charge)/Credit
to Income
Balance at
12/31/2022
—
198,809 (8,636,673)
(3,096,441)
6,075,520
16,114,717 (8,082,143)
(316,325)
13,772,648 37,682,645
8,778,249
(3,177,678)
1,666,178
(178,732)
(5,449,873)
264,778
18,183,450 37,432,229
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Year of generation
2020
2021
2022
2023
Total
Amount
5,961
39,548
5,812,640
513,313
6,371,461
12/31/2023
Expiration Date
2025
2026
2027
2028
Deferred Tax Assets
2,086
13,842
2,034,424
179,659
2,230,011
5. FINANCIAL INSTRUMENTS
Financial instruments held by Grupo Supervielle as of December 31, 2023 and 2022:
Fair value
through
profit or loss Amortized Cost
Total
Fair value
through
OCI
—
46,415,822
3,795,093
—
21,064,292
—
28,270,031
46,374,207
49,094
145,968,539
229,098,272
—
—
755,708,132
25,435,492
482,455,084
222,910,510
8,399
—
1,715,615,889
229,098,272
—
46,415,822
—
3,795,093
—
755,708,132
—
46,499,784
—
482,455,084
—
251,180,541
—
46,382,606
—
316,891
365,985
316,891 1,861,901,319
—
607,903
—
72,391,981
1,548,928,056
—
940,332
346,947
— 1,548,928,056
607,903
—
940,332
—
72,738,928
—
—
72,999,884
2,691,969
1,552,907,304
—
2,691,969
— 1,625,907,188
Financial Instruments as of 12/31/2023
Assets
- Cash and due from banks
- Debt securities at fair value through profit or loss
- Derivatives
- Reverse Repo transactions
- Other financial assets
- Loans and other financing
- Other debt securities
- Financial assets pledged as collateral
- Investments in Equity Instruments
Total Assets
Liabilities
- Deposits
- Liabilities at fair value through profit or loss
- Repo transactions
- Other financial liabilities
- Financing received from the Argentine Central Bank and other financial
institutions
Total Liabilities
F-50
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Fair value
through
Financial Instruments as of 12/31/2022
Assets
- Cash and due from banks
- Debt securities at fair value through profit or loss
- Derivatives
- Reverse Repo transactions
- Other financial assets
- Loans and other financing
- Other debt securities
- Financial assets pledged as collateral
- Investments in Equity Instruments
Total Assets
Liabilities
- Deposits
- Liabilities at fair value through profit or loss
- Other financial liabilities
- Financing received from the Argentine Central Bank and other financial
institutions
- Unsubordinated debt securities
Total Liabilities
6. FAIR VALUES
6.1 Fair Value of Financial Instruments
profit or loss Amortized Cost
Total
Fair value
through
OCI
—
69,707,595
920,381
—
18,566,566
—
653,133,045
44,785,900
837,562
787,951,049
150,719,643
—
—
67,206,248
6,679,625
728,474,749
186,842,522
270,629
—
1,140,193,416
150,719,643
—
69,707,595
—
920,381
—
67,206,248
—
25,246,191
—
728,474,749
—
839,975,567
—
45,056,529
—
727,448
1,565,010
727,448 1,928,871,913
—
6,661,539
55,472,099
1,705,009,583
—
909,756
—
—
62,133,638
17,219,834
1,748,271
1,724,887,444
— 1,705,009,583
6,661,539
—
56,381,855
—
17,219,834
—
—
1,748,271
— 1,787,021,082
Fair value is defined as the amount by which an asset may be exchanged or a liability may be settled, in an arm’s length orderly
transaction between knowledgeable principal market participants (or more advantageous) at the date of measurement of the current
market conditions regardless of whether such price is directly observable or estimated utilizing a valuation technique under the
assumption that Grupo Supervielle is a going concern.
When a financial instrument is sold in a liquid and active market, its settled price in the market in a real transaction provides the best
evidence of its fair value. When a stipulated price is not settled in the market or when it cannot be an indicator of a fair value of the
instrument, in order to determine such fair value, another similar instrument’s fair value may be used, as well as the analysis of
discounted flows or other applicable techniques. Such techniques are significantly affected by the assumptions used Grupo Supervielle
classifies fair values of financial instruments in a three level hierarchy according to the reliability of the inputs used to determine them.
Fair Value Level 1: The fair value of financial instruments traded in active markets (such as publicly-traded derivatives, debt securities
or available for sale) is based on market quoted prices as of the date of the reporting period. If the quoted price is available and there is
an active market for the instrument, it will be included in Level 1. Otherwise, it will be included in Level 2.
Fair Value Level 2: The fair value of financial instruments which are not traded in active markets, such as over-the-counter derivatives,
is determined using valuation techniques that maximize the use of observable market data and rely the least possible on Grupo
Supervielle’s specific estimates. If all significant inputs required to determine fair value a financial instrument are observable, such
instrument is included in Level 2. If the inputs used to determine the price are not observable, the instrument will be included in Level
3.
Fair Value Level 3: If one or more significant inputs are not based on observable market data, the instrument is included in Level 3.
F-51
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Grupo Supervielle’s financial instruments measured at fair value as of December 31, 2023 and 2022 are detailed below:
Financial Instruments as of 12/31/2023
Assets
- Debt securities at fair value through profit or loss
- Derivatives
- Other financial assets
- Other debt securities
- Financial assets pledged as collateral
- Investments in Equity Instruments
Total Assets
Liabilities
- Liabilities at fair value through profit or loss
- Other financial liabilities
Total Liabilities
Financial Instruments as of 12/31/2022
Assets
- Debt securities at fair value through profit or loss
- Derivatives
- Other financial assets
- Other debt securities
- Financial assets pledged as collateral
- Investments in Equity Instruments
Total Assets
Liabilities
- Liabilities at fair value through profit or loss
- Other financial liabilities
Total Liabilities
FV Level 1 FV Level 2 FV Level 3
Total
44,845,302
—
21,064,292
17,831,074
46,374,207
49,094
130,163,969
1,570,520
3,795,093
—
10,438,957
—
—
15,804,570
—
—
—
—
—
316,891
316,891
46,415,822
3,795,093
21,064,292
28,270,031
46,374,207
365,985
146,285,430
607,903
72,391,981
72,999,884
—
—
—
—
—
—
607,903
72,391,981
72,999,884
FV Level 1 FV Level 2 FV Level 3
Total
11,444
69,696,151
—
920,381
18,566,566
—
22,967,229 630,165,816
—
44,785,900
—
837,562
157,773,789 630,177,260
69,707,595
—
920,381
—
—
18,566,566
— 653,133,045
44,785,900
—
727,448
1,565,010
727,448 788,678,497
6,661,539
55,472,099
62,133,638
—
—
—
—
—
—
6,661,539
55,472,099
62,133,638
Below is shown the reconciliation of the financial instruments classiffied as Fair Value Level 3:
FV Level 3
Assets
- Investments in equity instruments
12/31/2022 Transfers Additions Disposals OCI
12/31/2023
727,448
—
370,242
(76,840)
(703,959)
316,891
Grupo Supervielle’s policy is to recognize transfers between fair value Levels only at end of period.
Valuation Techniques
Valuation techniques to determine fair values Level 2 and Level 3 include the following:
• Market or quoted prices for similar instruments.
• The estimated present value of instruments.
The valuation technique to determine fair value Level 2 includes estimating the through spot rate curve which calculate the yield upon
market prices.
F-52
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
These valuation techniques are detailed below:
•
Interpolation model: It consists of the determination of the value of financial instruments that do not have a market price at the
closing date, based on quoted prices for similar assets (both in terms of issue, currency, and duration) in active markets (MAE,
Bolsar or secondary) through the linear interpolation of them. This technique has been used by the Entity to determine the fair
value of the instruments issued by the Central Bank and Treasury Bills without quotation at the end of this period.
• Performance Curve Model under Nelson Siegel: This model proposes a continuous function to model the trajectory of the
instant forward interest rate considering as a domain the term comprised until the next interest and / or capital payment. It
consists in the determination of the instrument's price estimating volatility through market curves. The Entity has used this
model to estimate prices in debt securities or financial instruments with variable interest rate that are not quoted in an active
market.
The principal inputs and method considered by Grupo Supervielle for its determination of fair values under the linear interpolation
model are:
•
Instrument prices that were quoted between the date the curve is estimated and the settlement date of the latest payment
available.
•
Implicit rates in the last available tender.
• Only instruments that have been traded with a 24-hour settlement are considered.
•
If the same instrument has been listed on MAE (“Mercado Abierto Electrónico”) and Bolsar (Financial website of the “Bolsa
de Comercio de Buenos Aires”), only the market price that has been traded in the market with higher volume is considered.
• The yield curve is standardized based on a set of nodes, each of which has an associated expiration date.
•
Instruments denominated in U.S. dollars are converted at the exchange rate on the date the instrument is negotiated.
Likewise, for the determination of fair values under the Nelson Siegel model, the main data and aspects considered by the Entity were:
• The Spot rate curves in pesos + BADLAR and the Spot rate curve in U.S. dollars are established based on bonds predefined by
Financial Risk Management.
• The main source of prices for Bonds is MAE, without considering those corresponding to operations for own portfolio.
• The portfolio of bonds used as input is changed with every issuance.
Grupo Supervielle periodically evaluates the performance of the models based on indicators which have defined tolerance thresholds.
Under IFRS, the estimated residual value of an instrument at inception is generally the transaction price.
In the event that the transaction price differs from the determined fair value, if the fair value is not Level 1, the difference will be
recognized in the Consolidated Income Statement proportionally for the duration of the instrument.
F-53
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
6.2 Fair Value of other Financial Instruments
The following describes the methodologies and assumptions used to determine the fair values of financial instruments not recorded at
fair value in these Consolidated Financial Statements:
• Assets whose fair value is similar to book value: For financial assets and liabilities that are liquid or have short-term maturities
(less than three months), the book value is considered to be similar to fair value.
• Fixed rate financial instruments: The fair value of financial assets was determined by discounting future cash flows at the
current market rates offered, for each year, for financial instruments with similar characteristics. The estimated fair value of
deposits with a fixed interest rate was determined by discounting future cash flows through the use of market interest rates for
deposits with maturities similar to those of Grupo Supervielle’s portfolio.
For listed assets and the quoted debt, fair value was determined based on market prices.
• Other financial instruments: In the case of financial assets and liabilities that are liquid or have a short maturity, it is estimated
that their fair value is similar to their book value. This assumption also applies to savings deposits, checking accounts and
others.
Below is the difference between the carrying amount and the fair value of the main assets and liabilities recorded at amortized cost as
of December 31, 2023 and 2022, respectively:
Other Financial Instruments as of 12/31/2023
Financial Assets
- Cash and due from Banks
- Other financial assets
- Loans and other financing
- Reverse Repo transactions
- Other Debt Securities
- Financial assets Pledged as collateral
Financial Liabilities
- Deposits
- Other financial liabilities
- Financing received from the Central Bank and other
financial institutions
- Repo Transactions
Book value
Fair value
FV Level 1
FV Level 2 FV Level 3
229,098,272
25,435,492
482,455,084
755,708,132
222,910,510
8,399
1,715,615,889
229,098,272
25,435,492
549,311,537
755,708,132
255,174,286
8,399
1,814,736,118
—
229,098,272
—
25,435,492
—
—
755,708,132
—
177,457,660 77,716,626
—
77,716,626
8,399
1,187,707,955
—
—
549,311,537
—
—
—
549,311,537
1,548,928,056 1,597,478,417
346,947
346,947
—
346,947
— 1,597,478,417
—
—
2,691,969
940,332
1,552,907,304
2,788,182
940,332
1,601,553,878
—
940,332
1,287,279
—
—
—
2,788,182
—
1,600,266,599
F-54
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Other Financial Instruments as of 12/31/2022
Financial Assets
- Cash and due from Banks
- Other financial assets
- Loans and other financing
- Reverse Repo transactions
- Other Debt Securities
- Financial assets Pledged as collateral
Book value
Fair value
FV Level 1 FV Level 2 FV Level 3
150,719,643
6,679,625
728,474,749
67,206,248
186,842,522
270,629
1,140,193,416
6,679,625
736,098,923
67,206,248
150,719,643 150,719,643
—
6,679,625
—
—
—
—
67,206,248
193,728,112 101,835,764 91,892,348
—
91,892,348
270,629
326,711,909
270,629
1,154,703,180
—
—
736,098,923
—
—
—
736,098,923
Financial Liabilities
- Deposits
- Other financial liabilities
- Financing received from the Central Bank and other financial
institutions
- Unsubordinated Debt securities
1,705,009,583 1,750,167,253
909,756
909,756
17,219,834
1,748,271
27,034,151
1,748,271
1,724,887,444 1,779,859,431
—
909,756
—
1,748,271
2,658,027
— 1,750,167,253
—
—
27,034,151
—
—
—
— 1,777,201,404
6.3 Fair Value of Equity instruments
The following are the equity instruments measured at Fair Value through profit or loss as of December 31, 2023 and 2022:
Grupo Financiero Galicia S.A.
Pampa Energía S.A.
Loma Negra S.A.
Ternium Argentina S.A.
Aluar S.A.
YPF S.A.
Transener S.A.
Edenor
Holcim Arg
Cedear SPDR Dow Jones Ind
Cedear SPDR S&P
Cedear Financial Select Sector
Others
Total
12/31/2023
—
26,237
2,412
1,113
31
517
198
5,799
7,218
1,803
1,528
1,430
808
49,094
12/31/2022
15,651
144,901
102,814
42,781
169,045
141,977
17,327
145,309
4,416
1,731
1,348
1,423
48,839
837,562
The following are the equity instruments measured at Fair Value through Other Comprehensive Income as of December 31, 2023 and
2022:
Detail
Mercado Abierto Electrónico S.A.
Play Digital S.A.
Seguro de Depósitos S.A
Compensador Electrónica S.A.
Provincanje S.A.
Cuyo Aval Sociedad de Garantía Recíproca
Argencontrol S.A.
IEBA S.A.
Other Reciprocal Guarantee Companies
FV at
Income / (Loss)
12/31/2022 through OCI
(286,408)
(283,270)
(14,214)
11,116
(130,573)
(184)
(428)
(129)
131
288,040
274,011
33,146
101,793
22,586
5,833
1,009
190
840
Disposals
Additions
FV at
12/31/2023
—
(75,239)
—
(1,601)
—
—
—
—
—
—
254,610
—
—
115,632
—
—
—
—
1,632
170,112
18,932
111,308
7,645
5,649
581
61
971
F-55
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Total
727,448
(703,959)
(76,840)
370,242
316,891
Detail
Mercado Abierto Electrónico S.A.
Play Digital S.A.
Seguro de Depósitos S.A
Compensador Electrónica S.A.
Provincanje S.A.
Cuyo Aval Sociedad de Garantía Recíproca
Argencontrol S.A.
IEBA S.A.
Other Reciprocal Guarantee Companies
Total
7. FINANCE LEASES
7.1 The Group as lessee
FV at
Income / (Loss)
12/31/2021 through OCI
10,537
(173,224)
(9,520)
33,062
(4,276)
(2,623)
56
(181)
(115)
(146,284)
277,503
224,182
42,666
68,731
26,862
8,456
953
371
955
650,679
Disposals
Additions
FV at
12/31/2022
—
(45,605)
—
—
—
—
—
—
—
(45,605)
—
268,658
—
—
—
—
—
—
—
268,658
288,040
274,011
33,146
101,793
22,586
5,833
1,009
190
840
727,448
(i) The following table shows the carrying amount in the statement of financial position:
Right-of-use asset
Land and buildings (Gross carrying amount)
Lease liability
Current
Non-current
Total
(ii) The following table shows the amounts charged in the income statement:
Items
Right-of-use assets – Depreciation
Interest expenses on lease liabilities (Other operating expenses)
(iii) Lease activities:
12/31/2023
12/31/2022
9,588,345
16,891,897
1,844,502
1,013,003
2,857,505
2,991,612
1,892,699
4,884,311
12/31/2023
6,480,621
33,690
Grupo Supervielle leases several branches. Rental agreements are generally made for fixed periods of 1 to 10 years, but may have
extension options as described in (iv) below.
Contracts may contain lease components or not. Grupo Supervielle assigns consideration in the contract to the lease and non-lease
components based on their independent relative prices. However, for the leases of real estate for which Grupo Supervielle is a lessee, it
has chosen not to separate the lease components and those that are not, and instead counts them as a single lease component.
Lease terms are negotiated individually and contain a wide range of different terms and conditions. Lease agreements do not impose
other obligations to do or not do, other than the leased assets owned by the lessor. Leased assets cannot be used as collateral for obtaining
loans.
The leases are recognized as a right-of-use asset by registering a liability as a counterparty on the date on which the leased asset is
available for use by the Entity.
F-56
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Assets and liabilities arising from leases are initially measured based on the present value. Lease liabilities include the net present value
of the following lease payments:
•
•
•
•
•
fixed payments (including fixed payments in substance), less any incentives receivable;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement
date;
amounts expected to be payable by Grupo Supervielle under residual value guarantees;
the exercise price of a purchase option if Grupo Supervielle is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects Grupo Supervielle exercising an option to terminate
the lease.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be easily determined, which is generally
the case with leases in Grupo Supervielle, the lessee’s incremental borrowing rate is used, which is the rate that the individual lessee
would have to pay to borrow the necessary funds to obtain an asset of similar value to the asset by right of use in a similar economic
environment with similar terms, security and conditions.
To determine the incremental interest rate, Grupo Supervielle:
• whenever possible, uses the external financing recently received as a starting point, adjusted to reflect changes in financing
conditions since the external financing was received
•
uses a rate determination approach that begins with a risk-free interest rate adjusted for credit risk for leases that the Entity
already has for those cases in which it does not have recent third-party financing, and
• makes specific adjustments for the lease, for example, term, currency and guarantee.
Grupo Supervielle is exposed to possible future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they become effective. When adjustments to lease payments based on an index or rate become effective, the
lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between capital and financial cost. The financial cost is charged to profit or loss during the lease period to
produce a constant periodic interest rate on the remaining balance of the liability for each period.
The right-of-use assets are measured at cost comprising the following:
•
•
•
the amount of the initial measurement of the lease liability;
any lease payment made at or before the commencement date, less any lease incentives received;
any initial direct costs, and
F-57
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
•
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which
it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
The right-of-use assets are generally depreciated during the shortest useful life of the asset and the lease term in a linear fashion.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognized linearly as an expense in
profit or loss. Short-term leases are leases with a lease term of 12 months or less and that does not contains a purchase option. Low-
value assets include computer equipment and small items of office furniture.
(iv) Extension and termination options
Extension and termination options are included in several property leases. These are used to maximize operational flexibility in terms
of managing the assets used in operations. Most of the extension and termination options maintained are exercisable only by Grupo
Supervielle and not by the respective lessor.
7.2 The Group as lessor
The following is a breakdown of the maturities of Grupo Supervielle’s financial and operating leases receivables and of the present
values as of December 31, 2023 and 2022:
Financial Lease Receivables
Up to 1 year
More than a year up to two years
From two to three years
From three to five years
More than five years
Total
Unearned financial income
Net investment in the lease
Operating Lease Receivables
Up to 1 year
More than a year up to two years
From two to three years
Total
12/31/2023
13,745,706
11,549,927
7,928,815
3,497,498
2,349
36,724,295
(16,732,515)
19,991,780
12/31/2022
23,887,476
21,379,019
14,563,649
8,734,999
638,344
69,203,487
(35,917,183)
33,286,304
12/31/2023
212,663
132,019
33,990
378,672
12/31/2022
174,102
233,334
84,510
491,946
The balance of allowance for loan losses related to finance leases amounts to $434,107 and $280,441 as of December 31, 2023 and 2022
respectively
8. REPO AND REVERSE REPO TRANSACTIONS
Grupo Supervielle carries out repo and reverse repo transactions in which it performs the spot purchase sale of a security with the related
forward purchase thereof, thus substantially retaining all the risks and rewards associated with the instruments and recognizing them in
"Repo Transactions" at year-end, as the provisions set out in point 3.4.2 (Derecognition of Assets) of IFRS 9 "Financial Instruments")
are not met.
F-58
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The residual values of assets transferred under repo and reverse repo transactions as of December 31, 2023 and 2022 are detailed below:
Repo Transactions:
December 31, 2023
December 31, 2022
Reverse Repo Transactions:
December 31, 2023
December 31, 2022
Book Value
755,708,132
67,206,248
Book Value
940,332
—
9. DERIVATIVE FINANCIAL INSTRUMENTS
In the normal course of business, Grupo Supervielle enters into a variety of transactions principally in the foreign exchange stock
markets. Most counterparties in the derivative transactions are banks and other financial institutions.
These instruments include:
• Forwards and futures: they are agreements to deliver or take delivery at a specified rate, price or index applied against the
underlying asset or financial instrument, at a specific date. Futures are exchange traded at standardized amounts of the
underlying asset or financial instrument.
Forwards contracts are OTC agreements and are principally dealt in by Grupo Supervielle in foreign exchange as forward
agreements.
• Swaps: they are agreements between two parties with the intention to exchange cash flows and risks at specific date and for a
period in the future.
• Options: they confer the right to the buyer, but no obligation, to receive or pay a specific quantity of an asset or financial
instrument for a specified price at or before a specified date.
As of December 31, 2023 and 2022, the following amounts were recorded for operations related to derivatives:
Amounts receivable for spot and forward transactions pending settlement
Amounts payable for spot and forward transactions pending settlement
Put option taken with Central Bank
12/31/2023 12/31/2022
634,487
2,869,609
182,977
158,431
102,917
767,053
920,381
3,795,093
F-59
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The following table shows, the notional value of options and outstanding forward and futures contracts as of December 31, 2023 and
2022:
12/31/2023
12/31/2022
16,963,766 42,092,038
Forward sales of foreign exchange without delivery of underlying assets
Forward purchases of foreign exchange without delivery of underlying assets 20,797,187 12,486,369
The incomes/(expenses) generated by derivative financial instruments during the years ended December 31, 2023, 2022 and
2021 amounted to $10,282,330, $2,065,245 and $9,613,101 respectively.
10. EARNINGS PER SHARE
Earnings per share are calculated by dividing income attributable to Grupo Supervielle´s shareholders by the weighted average number
of outstanding common shares during the period. As Grupo Supervielle does not have preferred shares or debt convertible into shares,
basic earnings are equal to diluted earnings per share.
Income attributable to shareholders of the group
Weighted average of oustanding ordinary shares (thousands)
Income per share
12/31/2023
51,615,837
442,727
116.59
12/31/2022
12/31/2021
(15,654,911) (10,521,726)
456,722
(23.04)
454,274
(34.46)
11. SPECIAL TERMINATION ARRANGEMENTS
As of December 31, 2023 and 2022, special termination arrangements amounted to $4,192,701 and $7,422,283, respectively. The
amounts charged to profit or loss regarding these benefits as of December 31, 2023 and 2022 were $3,178,727 and $1,672,716,
respectively included in Other non-financial liabilities.
The evolution during each period is detailed below:
Balances at the beginning
Additions to profit or loss
Monetary result benefits paid to participants
Benefits paid to participants
Balances at closing
12. PROPERTY, PLANT AND EQUIPMENT
12/31/2023
7,422,283
3,178,727
(1,369,489)
12/31/2022
9,521,606
1,672,716
(858,920)
(5,038,820) (2,913,119)
7,422,283
4,192,701
Changes in property, plant and equipment for financial years ended on December 31, 2023 and 2022 are as follows:
Gross carrying amount
Depreciation
Useful
Life
Revaluation Additions Disposals
At the
end of
the year
At the
beginning
Additions by
business
of the year Disposals combinations
Of the
Year
Other
Movements
At the end
of the year
Net
carrying
amount
12/31/2023
Item
Cost model
Furniture and facilities
Machinery and equipment
Vehicles
Right of use assets
Construction in progress
Revaluation model
Land and Buildings
Total
At the
beginning
of the
year
14,069,307
50,221,991
2,340,194
16,891,897
7,502,745
10
5
5
5
—
—
—
—
—
391,691
4,082,256
515,511
3,349,796
1,927,178
(351,971)
(659,778)
(569,297)
(10,653,348)
(3,773,387)
14,109,027
53,644,469
2,286,408
9,588,345
5,656,536
(11,583,436)
(44,715,683)
(1,026,023)
(9,670,979)
—
413,091
635,830
472,330
10,656,319
—
35,312,822
126,338,956
50
—
(2,093,627)
(2,093,627)
756,617
11,023,049
(168,263)
(16,176,044)
33,807,549
119,092,334
(2,125,445)
(69,121,566)
112,013
12,289,583
F-60
—
—
—
—
—
—
—
(704,383)
(2,851,178)
(417,127)
(6,480,621)
—
—
—
—
—
—
(11,874,728)
(46,931,031)
(970,820)
(5,495,281)
—
2,234,299
6,713,438
1,315,588
4,093,064
5,656,536
(655,407)
(11,108,716)
—
—
(2,668,839)
(67,940,699)
31,138,710
51,151,635
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Item
Cost model
Furniture and facilities
Machinery and equipment
Vehicles
Right of use assets
Construction in progress
Revaluation model
Land and Buildings
Total
At the
beginning
of the
year
13,620,204
49,868,605
2,491,133
19,194,943
8,438,004
Useful
Life
10
5
5
5
Gross carrying amount
Depreciation
Revaluation Additions
Disposals
At the
end of
the year
At the
beginning
of the year
Disposals
Additions by
business
combinations
Of the
Year
Other
At the end
Movements of the year
Net
carrying
amount
12/31/2022
—
—
—
—
—
449,103
1,060,303
769,211
3,555,148
3,463,617
—
(706,917)
(920,150)
(5,858,194)
(4,398,876)
14,069,307
50,221,991
2,340,194
16,891,897
7,502,745
(10,824,598)
(41,898,497)
(1,136,208)
(9,368,409)
—
181,526
659,677
569,001
5,659,594
—
37,944,053
131,556,942
50
—
(2,611,299)
(2,611,299)
8,511
9,305,893
(28,443)
(11,912,580)
35,312,822
126,338,956
(1,391,360)
(64,619,072)
—
7,069,798
—
—
—
—
—
—
—
(940,364)
(3,476,863)
(458,816)
(5,962,164)
—
—
—
—
—
—
(11,583,436)
(44,715,683)
(1,026,023)
(9,670,979)
—
2,485,871
5,506,308
1,314,171
7,220,918
7,502,745
(734,085)
(11,572,292)
—
—
(2,125,445)
(69,121,566)
33,187,377
57,217,390
12.1 Revaluation of Property, Plant and Equipment
Grupo Supervielle´s properties, plant and equipment measured at revaluation model were valued at each reporting date by an independent
expert. The frequency of revaluations ensures fair value of the revalued asset does not differ materially from its carrying amount.
The last revaluation was made on December 31, 2023.
The following are the book values that would have been recognized if the assets had been accounted under the cost model:
Residual
Value
according to
Class
Land and buildings
Land and buildings
13. INVESTMENT PROPERTIES
date
Revaluation Revalued
amount
8,557,953
12/31/2023 31,138,710 22,580,757
12/31/2022 33,187,377 22,076,981 11,110,396
the cost
model
Difference
The movements in investment properties for the years ended December 31, 2023 and 2022 were as follows:
Item
Cost model
Rented properties
Measurement at fair value
Rented properties
TOTAL INVESTMENT PROPERTIES
Item
Cost model
Rented properties
Measurement at fair value
Rented properties
TOTAL INVESTMENT PROPERTIES
At the
Beginning Total useful
P/L for
changes
As of
of the year
life
in the FV Additions
Disposals Depreciation 12/31/2023
817,096
51,820,300
52,637,396
5
50
—
161,070
—
(189,124)
789,042
(7,012,278)
(7,012,278)
—
161,070
—
—
—
(189,124)
44,808,022
45,597,064
At the
Beginning Total useful
P/L for
changes
As of
of the year
life
in the FV Additions
Disposals Depreciation 12/31/2022
852,313
51,910,577
52,762,890
5
50
—
195,567
(90,816)
(139,968)
817,096
(2,503,275)
(2,503,275)
2,412,998
2,608,565
—
(90,816)
—
(139,968)
51,820,300
52,637,396
Investment properties are measured at fair value which is determined by an independent expert.
F-61
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
14. INTANGIBLE ASSETS
Intangible assets of Grupo Supervielle for fiscal years ended on December 31, 2023 and 2022 are as follows:
Item
Measurement at cost
Goodwill
Brands
Other intangible assets(*)
TOTAL
Item
Measurement at cost
Goodwill
Brands
Other intangible assets(*)
TOTAL
At the
beginning
Gross carrying amount
Additions
by business
At the
End of the
year
At the
beginning
Depreciation
By business
At the
End of the
year
Net carrying
amount at
12/31/2023
of the year Additions combinations Impairment Disposals
of the year Disposals combinations Of the year
31,027,144
1,831,210
88,245,470
121,103,824
—
—
16,916,944
16,916,944
—
—
—
—
(4,000,000)
—
—
(4,000,000)
—
—
(756,231)
(756,231)
27,027,144
1,831,210
104,406,183
133,264,537
—
—
(51,735,118)
(51,735,118)
—
—
93,369
93,369
—
—
—
—
—
—
(13,988,733)
(13,988,733)
—
—
(65,630,482)
(65,630,482)
27,027,144
1,831,210
38,775,701
67,634,055
At the
beginning
Gross carrying amount
Additions
by business
At the
End of the
year
At the
beginning
Depreciation
By business
At the
End of the
year
Net carrying
amount at
12/31/2022
of the year Additions combinations Impairment Disposals
of the year Disposals combinations Of the year
33,327,743
1,831,210
71,107,364
106,266,317
—
—
17,707,912
17,707,912
—
—
—
—
(2,300,599)
—
—
(2,300,599)
31,027,144
—
1,831,210
—
(569,806)
88,245,470
(569,806) 121,103,824
—
—
(36,979,731)
(36,979,731)
—
—
485,868
485,868
—
—
—
—
—
(15,241,255)
— (15,241,255)
—
—
(51,735,118)
(51,735,118)
31,027,144
1,831,210
36,510,352
69,368,706
(*)mainly include systems and programs.
14.1 Goodwill impairment
Goodwill is assigned to Grupo Supervielle’s cash generating units on the basis of the operating segments.
Supervielle Seguros S.A.
Banco Regional de Cuyo S.A.
InvertirOnline S.A.U. / Portal Integral de Inversiones S.A.U.
Micro Lending S.A.U.
Supervielle Agente de Negoación S.A.U.
Others
TOTAL
12/31/2023
88,686
464,982
16,902,605
9,308,612
46,943
215,316
27,027,144
12/31/2022
88,686
464,982
16,902,605
13,308,612
46,943
215,316
31,027,144
The recoverable amount of a cash generating unit is determined on the basis of its value in use. These method uses cash flow projections
based on approved financial budgets covering a period of five years.
The key assumptions are related to marginal contribution margins. These were determined on the basis of past performance, other
external sources of information and the expectations of market development.
The discount rates used were 15.6% and they were determined by using the average cost of capital (“WACC”), which is considered a
good indicator of the cost of capital. For each cash generating unit, where the assets are assigned, a specific WACC was determined
considering the industry and the size of the business.
F-62
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The main macroeconomic assumptionsused include the number of borrowings originated by MILA (“Micro Lending”) and IOL (“
InvertirOnline”) operating income:
Inflation (end of period)
Inflation (average)
Cost of funding (average)
Loan’s interest rate (average)
Number of borrowings originated by Micro Lending
InvertirOnline'Operating income
Real
2023
211.4 %
133.5 %
63.0 %
82.8 %
5,798
7,326
Forecast
2024
205.6 %
249.1 %
70.0 %
88.0 %
7,080
21,213
Forecast
2025
Forecast
2026
Forecast
2027
Forecast
2028
80.4 %
104.9 %
45.3 %
59.3 %
9,996
51,990
49.8 %
62.0 %
31.6 %
43.6 %
23.7 %
34.4 %
17.8 %
27.8 %
8.5 %
13.4 %
9.4 %
17.4 %
12,504
88,474
14,004
118,939
14,004
134,834
As of December 31, 2023, political conditions negatively affected the Argentine economy in general, the main impacts are
detailed below:
• An inflationary acceleration and greater devaluation of the Argentine peso, with the accumulated inflation index being 211.4%
during 2023 (CPI) and the variation in the BCRA exchange rate Com. “A” 3,500, for the same period, of 356.4%.
• Exchange restrictions in order to contain the demand for dollars.
• Reduction of the 1-day repo rate from 126% to 100% n.a. (171.5% e.a.). Thus, the interest rate on 1-day repos for private
funds was 85% n.a. (133.7% n.a.), while the 1-day reverse repo interest rate remained at 160% n.a. (393.6% e.a.).
To what was mentioned above we must add the following conditions that negatively affected the Micro Lending business:
• During 2023, automobile loans have decreased their share of the product more than loans to the non-financial private sector
as a whole.
• The market share of automobile loans in the Argentinian financial system (BCRA) is at historic lows, representing 0.2% of
GDP.
• Both the patenting of 0KM units, and the percentage of these transactions that are carried out through financing, are in slight
recovery but quite far from historical highs.
• Financing of the purchase of used vehicles is relevant to MILA's operations. This business has not been immune to the
forementioned market conditions, the amount of loans granted was in the order of 5,800 operations (1% below 2022), which is
an historical low for the business.
As a consequence of these macroeconomic conditions The Group recorded an impairment of $4,000,000 of the goodwill of
Micro Lending S.A.U., as of December 31, 2023, which was recorded in depreciation and impairment of non-financial assets
line of the Income Statement. The impairment was included in the “People and Business” segment. The value attributable to
the cash-generating unit in which the goodwill was included was 10,477,611 as of December 31, 2023.
No additional impairment was determined for the remaining goodwill recorded within Intangible Assets as of December 31,
2023.
The sensitivity analysis of the cash generating units to which goodwill was assigned, excluding Micro Lending S.A.U., was
based on a 1% increase in the weighted average cost of capital. The Group concluded that it would not be necessary to recognize
any impairment losses on goodwill in the segment under these conditions.
F-63
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
15. COMPOSITION OF THE MAIN ITEMS OF THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND
CONSOLIDATED INCOME STATEMENT
15.1 Debt securities at fair value through profit or loss
12/31/2023
43,859,127
2,556,695
46,415,822
12/31/2022
49,031,485
20,676,110
69,707,595
12/31/2023
12/31/2022
2,869,609
158,431
767,053
3,795,093
634,487
182,977
102,917
920,381
12/31/2023
635,332
6,890,718
3,113,100
24,966,331
10,815,142
495,366
(416,205)
46,499,784
12/31/2022
493,273
6,739,434
3,209,561
7,459,195
7,288,751
520,368
(464,391)
25,246,191
12/31/2023
12/31/2022
12,667,045
4,590,978
160,021,031
17,622,462
—
116,816,092
76,082,442 707,388,671
149
(1,851,807)
251,180,541 839,975,567
89
(2,181,044)
Government securities
Corporate securities
15. 2 Derivatives
Debtor balances related to forward operations in foreign currency to be
settled in pesos
Debtor balances related to forward operations in foreign currency
Put option taken
15.3 Other financial assets
Participation Certificates in Financial Trusts
Investments in Asset Management and Other Services
Other investments
Receivable from spot sales pending settlement
Several debtors
Miscellaneous debtors for credit card operations
Allowances for loan losses
15.4 Other debt securities
Negotiable obligations
Debt securities from Financial trusts
Government securities
Securities issued by BCRA
Others
Allowances for loan losses
F-64
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
15.5 Financial assets pledged as collateral
Guarantee securities for repo operations
Special guarantees accounts in the Argentine Central Bank
Deposits in guarantee
12/31/2023
972,694
21,763,021
12/31/2022
—
32,058,218
23,646,891 12,998,311
46,382,606 45,056,529
15.6 Inventories
Electronics
15.7 Other non-financial assets
Other Miscellaneous assets
Loans to employees
Payments in advance
Other non-financial assets
Retirement Plan
Works of art and collector's pieces
Insurance Contract assets
Asset from insurance broker operations
15.8 Deposits
Non-financial sector
Financial sector
Current accounts
Special checking accounts
Savings accounts
Time deposits and investments accounts
Investment accounts
Others
Interest and Adjustments
15.9 Liabilities at fair value through profit or loss
Liabilities for transactions in local currency
Liabilities for transactions in foreign currency
12/31/2023
—
—
12/31/2022
208,923
208,923
12/31/2023
8,538,030
2,134,276
5,948,058
154,060
547,973
253,347
1,187,065
1,020
18,763,829
12/31/2022
7,694,702
2,678,478
4,151,472
374,811
387,914
257,559
1,096,286
6,506
16,647,728
12/31/2023
12/31/2022
86,705,591
315,861
157,491,710
556,908,441
287,593,196
469,431,207
100,826,533
19,700,970
26,036,074
1,548,928,056 1,705,009,583
100,747,830
476,539
138,589,508
731,973,085
241,809,018
177,192,264
122,036,731
15,838,471
20,264,610
12/31/2023
607,903
—
607,903
12/31/2022
3,955,167
2,706,372
6,661,539
F-65
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
15.10 Other financial liabilities
Amounts payable for spot transactions pending settlement
Collections and other operations on behalf of third parties
Unpaid fees
Financial guarantee contracts
Liabilities associated with the transfer of financial assets not derecognized
Lease liability
Others
12/31/2022
12/31/2023
14,473,367
6,423,474
55,096,905 44,801,930
11,460
75,990
—
4,884,311
184,690
56,381,855
12,075
42,076
—
2,857,505
257,000
72,738,928
15.11 Financing received from the Argentine Central Bank and other financial institutions
Financing received from local financial institutions
Financing received from international institutions
15.12 Provisions
Eventual commitments
Unused Balances of Credit Cards
Restructuring expenses
Other contingencies
15.13 Other non-financial liabilities
Payroll and social securities
Sundry creditors
Revenue from contracts with customers (1)
Tax payable
Social security payment orders pending settlement
Reinsurance contract liabilities
Liabilities from insurance broker operations
Other
12/31/2023
2,436,173
255,796
2,691,969
12/31/2022
11,893,380
5,326,454
17,219,834
12/31/2023
411,663
1,456,978
6,000,000
7,029,026
14,897,667
12/31/2022
271,445
1,387,991
—
3,608,510
5,267,946
12/31/2023
32,249,269
18,833,238
908,005
19,681,363
1,278,348
5,032
41,453
203,589
73,200,297
12/31/2022
35,247,707
24,404,194
1,021,454
22,066,310
2,329,528
187,838
13,131
321,003
85,591,165
(1) Deferred revenue associated with contracts with customers includes the liability for the customer loyalty program. The Group
estimates the value of the points assigned to customers in the Club Supervielle and Club Mis Puntos Programs, by applying a
mathematical model that considers assumptions about redemption percentages, fair value of points redeemed based on the
combination of available products. and customer preferences, as well as the expiration of unused points. As of December 31, 2023
and 2022, the sum of $908,005 and $1,021,454 points have been recorded for unredeemed points, respectively.
F-66
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Item
Revenue from contracts with customers
15.14 Interest Income
Interest on overdrafts
Interest on promissory notes
Interest on personal loans
Interest on corporate unsecured loans
Interest on credit card loans
Interest on mortgage loans
Interest on automobile and other secured loan
Interest on foreign trade loans
Interest on financial leases
Interest on public and private securities measured at
amortized cost
Other
Total
15.15 Interest Expenses
Interest on current accounts deposits
Interest on time deposits
Interest on other financial liabilities
Interest from financing sector
Other
Total
Up to 12
months
321,665
Maturity
Up to 24
months
164,667
More than
24 months
421,673
Total
908,005
12/31/2023
44,410,794
67,470,691
66,454,064
96,127,460
42,005,274
62,359,572
12,574,777
3,180,062
17,868,411
12/31/2022
12/31/2021
23,471,096
64,028,835
92,146,481
50,712,155
45,870,806
56,407,739
13,122,573
4,010,233
14,262,772
19,005,461
67,907,777
117,692,377
41,967,396
35,957,060
42,843,345
9,393,313
7,543,367
9,591,489
567,893,807 387,019,350
33,302,307
177,352,343
1,157,697,255 784,354,347
167,862,434
107,654,661
627,418,680
12/31/2022
12/31/2023
374,828,604 211,185,911
439,013,593 295,156,581
3,968,644
3,356,878
1,731,380
825,494,087 515,399,394
3,621,357
2,772,705
5,257,828
12/31/2021
128,233,675
228,048,956
8,388,702
1,108,873
1,210,330
366,990,536
15.16 Net income from financial instruments at fair value through profit or loss
Income from corporate and government securities
Income from securities issued by the Argentine Central Bank
Derivatives
Total
12/31/2022
12/31/2023
127,798,716 51,452,910
3,303,523
—
2,065,245
10,282,330
138,081,046 56,821,678
12/31/2021
42,190,171
2,120,331
9,613,101
53,923,603
F-67
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
15.17 Service fee income
Commissions from deposits accounts
Commissions from credit and debit cards
Commissions from loans operations
Other Commissions
Total
15.18 Service fee expenses
Commissions paid
Export and foreign currency operations
Total
15.19 Income from insurance activities
Accrued premiums - Under IFRS 4
Accrued losses - Under IFRS 4
Production expenses Under IFRS 4
Insurance revenue
Insurance service expenses
Net expenses from reinsurance contracts held
Broker activity operations
Total
15.20 Other operating income
Reversal of allowance for loan losses and assets written down
Insurance commissions
Rental from safety boxes
Returns of risk funds
Commissions from trust services
Adjustment of various credits
Sale of fixed assets
Punitive interest
Others
Total
F-68
12/31/2022
12/31/2023
37,391,888 38,148,025
20,594,231 29,729,082
950,232
34,770,240 25,650,838
93,125,252 94,478,177
368,893
12/31/2021
39,408,942
30,250,743
960,528
30,471,421
101,091,634
12/31/2022
12/31/2023
23,620,557 32,604,729
787,995
24,176,077 33,392,724
555,520
12/31/2021
30,075,296
742,947
30,818,243
12/31/2023
12/31/2022
—
—
—
—
—
—
18,566,744 19,169,750
(5,743,306) (5,905,884)
(398,421)
1,238,709
14,431,313 14,104,154
(111,599)
1,719,474
12/31/2021
21,665,483
(4,228,281)
(3,659,805)
—
—
—
—
13,777,397
12/31/2023
12/31/2022
12/31/2021
5,502,611 10,127,903 10,395,360
1,535
—
2,332,362
2,375,006
7,524,773
4,867,260
270,489
253,243
1,039,392
1,363,146
54,322
89,106
1,775,727
2,056,982
11,160,910 11,538,428
9,222,204
23,688,747 32,671,074 32,616,164
—
2,050,948
—
178,265
2,472,547
4,567
2,318,899
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
15.21 Personnel expenses
Payroll and social securities
Others expenses
Total
15.22 Administrative expenses
Directors´ and statutory auditors’fees
Professional fees
Advertising and publicity
Taxes
Maintenance, security and services
Rent
Others
Total
15.23 Depreciation and impairment of non-financial assets
Depreciation of property, plant and equipment
Depreciation of other non-financial assets
Depreciation of intangible assets
Depreciation of right-of-use assets
Impairment of goodwill
Total
15.24 Other operating expenses
Promotions related with credit cards
Turnover tax
Fair value on initial recognition of loans
Contributions made to deposit insurance system
Loan and credit card balance adjustments
Interest on liabilities for financial leases
Coverage services
Others allowances
Devaluation of investment properties
Others
Total
F-69
12/31/2023
12/31/2022
150,064,085 154,276,818 143,807,941
11,429,240
160,395,452 167,825,508 155,237,181
13,548,690
10,331,367
12/31/2021
12/31/2023
12/31/2022
4,737,212
3,291,819
6,893,010
2,484,677
12/31/2021
2,468,332
25,006,003 25,862,516 27,265,430
6,966,569
20,408,129 20,091,751 20,511,740
19,653,248 21,561,754 24,972,701
476,043
11,275,883 11,807,229 10,486,259
84,438,694 88,946,808 93,147,074
245,871
66,400
12/31/2023
12/31/2022
4,628,095
2,833,824
5,610,128
2,333,661
12/31/2021
5,049,540
1,822,902
13,988,733 15,241,255 12,326,178
6,429,230
1,899
31,931,273 31,447,803 25,629,749
5,962,164
2,300,595
6,480,621
4,000,000
12/31/2023
12/31/2022
4,750,720
5,400,008
12/31/2021
5,516,101
54,968,898 53,620,247 49,385,226
1,193,719
207,342
2,981,108
2,350,765
1,138,924
1,241,563
1,633,744
33,690
99,604
27,556
3,615,679
10,957,512
2,675,231
7,012,278
12,739,388
3,631,010
94,289,712 82,925,021 71,870,346
479,836
2,787,276
3,047,451
1,555,148
42,850
7,279,351
2,503,275
6,209,579
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
16. COMMITMENTS AND CONTINGENCIES
The provisions recorded are detailed below:
Legal issues
Labor lawsuits
Tax
Unused Balances of Credit Cards
Charges to be paid to National Social Security Administration
Judicial Deposits
Eventual commitments
Reorganization expenses
Others
Total
17. RELATED PARTY TRANSACTIONS
12/31/2023
2,265,015
203,105
4,193,611
1,456,978
—
217,559
411,663
6,000,000
149,736
14,897,667
12/31/2022
613,965
1,808,248
566,233
1,387,991
422,505
147,756
271,445
—
49,803
5,267,946
Related parties are those entities that directly, or indirectly through other entities, have control over another, are under the same
controlling party or may have significant influence on another entity’s financial or operating decisions.
Grupo Supervielle controls another entity when it has power over other entities’ financial and operating decisions and also receives
benefits from such entity. The subsidiaries that Grupo Supervielle has control are detailed in Note 1.2. On the other hand, Grupo
Supervielle considers that it has joint control when there is an agreement to share control of an entity and decisions about relevant
activities require unanimous consent of the parties sharing control.
Finally, those cases in which Grupo Supervielle has significant influence is due to the power to influence the financial and operating
decisions of another entity but not being able to exercise control over them. To determine these situations, not only the legal aspects are
observed, but also the nature and substantiation of the relationship.
Furthermore, the key personnel of Grupo Supervielle’s Management (Board of Directors members and Managers of Grupo Supervielle
and its subsidiaries) are considered as related parties.
Controlling Interest
The majority shareholder of the Group is Mr. Julio Patricio Supervielle, who has established his domicile at 330 Reconquista Street, in
the Autonomous City of Buenos Aires. Mr. Julio Patricio Supervielle is the main shareholder of Grupo Supervielle. Julio Patricio
Supervielle´s interest in share capital and votes of Grupo Supervielle as of December 31, 2023 and December 31, 2022 is 29.86% and
35.12% respectively.
Remuneration of key personnel
The remuneration received by the key personnel of Grupo Supervielle as of December 31, 2023 and 2022 amounts to $5,305.0 million
and $3,982.9 million, respectively.
F-70
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Transactions with related parties
The financings, including those that were restructured, were granted in the normal course of business and on substantially the same
terms, including interest rates and guarantees, as those in force at the time to grant credit to non-related parties. Likewise, they did not
imply a risk of bad debts greater than normal nor did they present any other type of unfavorable conditions.
The following table presents the aggregate amounts of total consolidated financial exposure of the Bank to related parties, the number
of recipients, the average amounts and the single largest exposures as of December 31, 2023 and 2022:
Aggregate total financial exposure
Number of recipient related parties
(a) Individuals
(b) Companies
Average total financial exposure
Single largest exposure
(*) Historical values as of December 31, 2023, without adjusment for inflation.
As of
December 31, 2023
1,778,169
80
68
12
22,227
1,387,195
As of
December 31, 2022 (*)
673,747
80
70
10
8,422
358,255
The financing, including those that were restructured, was granted in the normal course of business and on substantially the same terms,
including interest rates and guarantees, as those in force at the time for granting credit to unrelated parties. Likewise, they did not imply
a risk of bad debts greater than normal nor did they present other types of unfavorable conditions.
18. INSURANCE
The opening of the assets and liabilities of insurance contracts as of December 31, 2023 and 2022 is detailed below. The insurance
results for the periods ending on that date are also detailed:
Insurance contract assets
Assets for remaining coverage
Liability for incurred claim - present value of future cash flow
Liability for incurred claim - risk adjustment for non-financial risk
Net balance
Reinsurance contract liabilities
Assets for remaining coverage
Incurred claims for contracts under the PAA
Net balance
Balances from brokers operations
Assets from brokers operations
Liability from brokers operations
Net balance
F-71
12/31/2023
12/31/2022
1,723,106
(513,344)
(22,697)
1,187,065
2,089,921
(949,094)
(44,541)
1,096,286
(24,794)
19,762
(5,032)
(192,886)
5,048
(187,838)
1,020
(41,453)
(40,433)
6,506
(13,131)
(6,625)
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Insurance revenue from contracts measured under the PAA
Insurance revenue
Incurred claims
Acquisition and administrative expenses
Insurance service expenses
Allocation of reinsurance premiums
Amounts recoverable from reinsurers for incurred claims
Net expenses from reinsurance contracts held
Insurance service result - NIIF 17
Broker activity operations
Income from insurance activities
12/31/2023
12/31/2022
18,566,744
18,566,744
(2,576,344)
(3,166,962)
(5,743,306)
(148,589)
36,990
(111,599)
12,711,839
1,719,474
14,431,313
19,169,750
19,169,750
(3,162,593)
(2,743,291)
(5,905,884)
(410,689)
12,268
(398,421)
12,865,445
1,238,709
14,104,154
Reconciliation of the liability for remaining coverage and the liability for incurred claims
Reinsurance contracts held at December 31, 2023
Reinsurance contract liabilities
Net balance as at January 1, 2023
Net income (expenses) from reinsurance contracts held
Allocation of reinsurance premiums
Amounts recoverable from reinsurers for incurred claims
Net income (expenses) from reinsurance contracts held
IAS29 + finance income from reinsurance contracts held
Total amounts recognised in comprehensive income
Cash flows
Premiums paid net of ceding commissions and other directly attributable expenses
paid
Recoveries from reinsurance
Total cash flows
Net balance as at December 31, 2023
Reinsurance contracts held at December 31, 2022
Reinsurance contract liabilities
Net balance as at January 1, 2022
Net income (expenses) from reinsurance contracts held
Allocation of reinsurance premiums
Amounts recoverable from reinsurers for incurred claims
Net income (expenses) from reinsurance contracts held
IAS29 + finance income from reinsurance contracts held
Total amounts recognised in comprehensive income
Cash flows
Premiums paid net of ceding commissions and other directly attributable expenses
paid
Recoveries from reinsurance
Total cash flows
Net balance as at December 31, 2022
Remaining
coverage
Incurred claims for
contracts under the PAA
Present value of future
cash flows
(192,886)
(192,886)
(148,589)
—
(148,589)
79,778
(68,811)
251,858
(14,955)
236,903
(24,794)
5,048
5,048
—
36,990
36,990
504
37,494
—
(22,780)
(22,780)
19,762
Remaining
coverage
Incurred claims for
contracts under the PAA
Present value of future
cash flows
(158,019)
(158,019)
(410,689)
-
(410,689)
109,240
(301,449)
279,798
(13,216)
266,582
(192,886)
8,515
8,515
-
12,268
12,268
485
12,753
-
(16,220)
(16,220)
5,048
Total
(187,838)
(187,838)
(148,589)
36,990
(111,599)
80,282
(31,317)
251,858
(37,735)
214,123
(5,032)
Total
(149,504)
(149,504)
(410,689)
12,268
(398,421)
109,725
(288,696)
279,798
(29,436)
250,362
(187,838)
F-72
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Insurance contracts issued
Insurance contract assets
Net balance as at January 1, 2023
Insurance revenue
Insurance service expenses
Incurred claims and other directly attributable expenses
Insurance acquisition cashflows
Insurance service expenses
Insurance service result
IAS29 + net financial expenses for insurance contracts
Total amounts recognised in comprehensive income
Cash flows
Premiums received
Claims and other directly attributable expenses paid
Insurance acquisition cashflows
Total cash flows
Net balance as at December 31, 2023
Insurance contracts issued
Insurance contract assets
Net balance as at January 1, 2022
Insurance revenue
Insurance service expenses
Incurred claims and other directly attributable expenses
Insurance acquisition cashflows
Insurance service expenses
Insurance service result
IAS29 + net financial expenses for insurance contracts
Total amounts recognised in comprehensive income
Cash flows
Premiums received
Claims and other directly attributable expenses paid
Insurance acquisition cashflows
Total cash flows
Net balance as at December 31, 2022
December 31, 2023
LIC for contracts under the PAA
Present value of future
cash flows
Risk adj. for
non-fin. risk
(949,094)
(949,094)
—
(5,035,808)
—
(5,035,808)
(5,035,808)
(48,897)
(5,084,705)
—
5,520,455
—
5,520,455
(513,344)
(44,541)
(44,541)
—
21,844
—
21,844
21,844
—
21,844
—
—
—
—
(22,697)
December 31, 2022
LIC for contracts under the PAA
Present value of future
cash flows
Risk adj. for
non-fin. risk
(1,184,455)
(1,184,455)
—
(5,410,292)
—
(5,410,292)
(5,410,292)
(67,905)
(5,478,197)
—
5,713,558
—
5,713,558
(949,094)
(53,226)
(53,226)
—
8,685
—
8,685
8,685
—
8,685
—
—
—
—
(44,541)
LRC
2,089,921
2,089,921
18,566,744
—
(729,342)
(729,342)
17,837,402
(5,829,716)
12,007,686
(13,244,962)
—
870,461
(12,374,501)
1,723,106
LRC
1,608,433
1,608,433
19,169,750
—
(504,277)
(504,277)
18,665,473
(3,388,158)
15,277,315
(15,215,670)
—
419,843
(14,795,827)
2,089,921
Total
1,096,286
1,096,286
18,566,744
(5,013,964)
(729,342)
(5,743,306)
12,823,438
(5,878,613)
6,944,825
(13,244,962)
5,520,455
870,461
(6,854,046)
1,187,065
Total
370,752
370,752
19,169,750
(5,401,607)
(504,277)
(5,905,884)
13,263,866
(3,456,063)
9,807,803
(15,215,670)
5,713,558
419,843
(9,082,269)
1,096,286
F-73
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
b. Income from insurances activities
The composition of the item “Result for insurance activities” as of December 31, 2023 and 2022 is disclosed in Note 15.19.
19. ASSET MANAGEMENT AND OTHER SERVICES
As of December 31, 2023 and 2022, Banco Supervielle S.A. is the depository of the Asset managed by Supervielle Asset Management
S.A.
Portfolio
Net Worth
Number of Units
12/31/2022
12/31/2023
12/31/2022
12/31/2023
12/31/2022
Asset Management and Other Services 12/31/2023
Premier Renta CP en Pesos
Premier Renta Plus en Pesos
Premier Renta Fija Ahorro
Premier Renta Fija Crecimiento
Premier Renta Variable
Premier Abierto Pymes
Premier Commodities
Premier Capital
Premier Inversión
Premier Balanceado
Premier Renta Mixta
Premier Renta Mixta en Dólares
Premier Performance Dólares
Premier Global USD
Premier Estratégico
Premier FCI Sustentable ASG
380,619,005 316,582,012 380,172,685 316,166,149 30,510,651,741 16,191,115,975
21,721,110
712,483,562
4,920,585
5,946,886
75,458,259
24,979,798
476,377,885
1,052,023,732
102,340,389
616,247,881
2,569,639
4,468,523
321,553
832,710,848
—
48,164,279
227,991,276
9,532,812,035
12,205,660
142,666,395
22,338,558
380,115,435
342,850,074
32,648,809
2,641,477,623
4,995,316
15,351,225
640,443
832,710,848
172,449,306
3,260,932
24,617,614
17,913,457
5,434,772
6,595,058
3,683,693
17,873,205
1,700,578
2,024,585
27,039,839
2,727,823
10,878,143
591,810
7,390,764
327,434
2,090,125
40,187,284
641,244
1,866,615
3,994,108
3,265,006
20,829,260
3,937,376
5,261,344
11,850,160
882,545
1,688,421
206,295
4,565,186
—
3,247,937
24,116,283
17,902,111
5,391,565
6,584,296
2,855,401
16,706,424
1,641,637
2,023,195
26,844,120
2,673,654
10,598,408
577,257
7,385,116
326,726
2,084,021
39,784,914
639,560
1,819,387
3,850,229
2,503,929
20,711,697
3,935,483
4,268,732
11,821,402
740,786
1,672,424
203,536
4,561,157
—
20. CONTRIBUTION TO THE DEPOSIT INSURANCE SYSTEM
Law No. 24485 and Decree No. 540/95 established the creation of the Deposit Insurance System to cover the risk attached to bank
deposits, in addition to the system of privileges and safeguards envisaged in the Financial Institutions Law.
The National Executive Branch through Decree No. 1127/98 dated September 24, 1998, established the maximum amount for this
insurance system to demand deposits and time deposits denominated either in Pesos and/or in foreign currency. Such limit was set at
$1,000 as from March 1, 2019 and increased to 1,500 as of May 1, 2020. As of January 1, 2023 the limit is established at 6,000.
This regime does not include deposits made by other financial institutions (including time deposit certificates acquired through a
secondary transaction), deposits made by persons directly or indirectly related to the entity, deposits of securities, acceptances or
guarantees at an interest rate higher than that periodically set forth by the Argentine Central Bank on the basis of the daily survey carried
out by that agency (*) and term deposits and investments that exceed said rate by 1.3 times or the reference rate plus 5 percentage points,
whichever is greater (*). Excluded from the regime are also the deposits whose ownership was acquired through endorsement and
placements offering incentives additional to the interest rate. The system has been implemented through the creation of the so-called
“Deposit Guarantee Fund" (FGD), which is managed by the company Seguros de Depósitos S.A. (SEDESA) and whose shareholders
are the Central Bank and the financial institutions in the proportion determined for each of them by that agency on the basis of
contributions made to such fund.
(*) Enforced on April 17, 2020, pursuant to communication “A” 6460, such exclusions are as follows: demand deposits with agreed-
upon rates exceeding reference rates and term deposits and investments exceeding 1,3 times such rate. Reference rates are released on
F-74
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
a regular basis by the Argentine Central Bank in accordance with a mobile average of the last five banking business days of passive
rates that may arise for term deposits of up to 100 (or its equivalent in other currencies) from the survey to be carried out by said
institution
21. RESTRICTED ASSETS
As of December 31, 2023 and 2022, the following Grupo Supervielle’s assets are restricted:
Item
Financial assets in guarantee
Special guarantee accounts in the Argentine Central Bank
Guarantee deposits for currency forward transactions
Guarantee deposits for credit cards transactions
Other guarantee deposits
12/31/2023
12/31/2022
21,763,021
11,193,935
2,676,321
9,776,635
45,409,912
32,058,218
8,419,865
3,109,343
1,469,103
45,056,529
Within restricted availability assets there are $972,694 forward purchases through repo transactions.
22. FINANCIAL TRUSTS
The detail of the financial trusts in which Grupo Supervielle acts as Trustee or as a Settler is summarized below:
As Trustee:
Banco Supervielle S.A.
Below is a detail of financial trusts:
F-75
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Below is a detail of the Guarantee Management trust where the Bank acts as a trustee as of December 31, 2023:
Financial trust
Indenture
executed on
Due of principal obligation
Original
principal
amount
Principal
balance
Beneficiaries
Settlers
Fideicomiso de
Administración
Interconexión 500
KV ET Nueva
San Juan - ET
Rodeo Iglesia
09/12/2018
The duration of this Trust
FundContract will be 24 months as
from 09/12/2018, or termination of
payment obligations through
disbursements (the “termination
date”). After 30 (thirty days) days
of the end of the term of the trust
contract without the parties having
agreed on an extension fee, the trust
will be considered extinguished
without the possibility of extension,
with the trustee receiving, from the
trust account, the sum of pesos
equivalent to U$D 6,000 (six
thousand US dollars) at the current
purchasing exchange rate at Banco
Supervielle as a penalty. Dated
10/14/2023 Interconnection
Eléctrica Rodeo S.A. accepted the
proposal of the Commission for
Extension and Extension of the
Trust Contract for 6 month.
-
-
Those initially mentioned
(DISERVEL S.R.L., INGENIAS
S.R.L, GEOTECNIA (INV.
CALVENTE), NEWEN
INGENIERIA S.A., INGICIAP
S.A., MERCADOS
ENERGETICOS, DISERVEL
S.R.L.) and providers of works,
goods and services included in the
Project to be assigned by the
Trustee with prior consent of the
Trustor
Interconexión
Electrica Rodeo
S.A.
As Settler:
Micro Lending Financial Trust
The following are financial trusts where Micro Lending S.A.U acts as settler:
Securitized
Issued Securities
Financial Trust
III
IV
Set-up on Amount
06/08/2011 $ 39,779
Amount
VN$31,823
Amount
Amount
NV $6,364 Participation certificate VN $1,592
Type
Type
VDF TV A
Exp date: 03/12/13
VDF TV A
Exp date: 06/20/13
Type
VDF B
Exp date: 11/12/13
VDF B
Exp date: 10/20/13
Exp date: 10/12/16
Exp date: 06/29/17
09/01/2011 $ 40,652
VN$32,522
NV $6,504 Participation certificate VN $1,626
23. ISSUANCE OF DEBT SECURITIES
Banco Supervielle S.A.
Unsubordinated Debt Securities
Global Program for the issuance of simple Negotiable Debt securities, not convertible into shares
F-76
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
As of December 31, 2023, the Group has no current debt issues related to this Program and as of December 31, 2022, debt related to
this Program amounted to $1,748,271.
24. RESTRICTIONS IMPOSED ON THE DISTRIBUTION OF DIVIDENDS
Pursuant to regulations set by the Argentine Central Bank, 20% of the profits for the year, net of possible prior year adjustments, were
applicable, are to be allocated to the Legal Reserve.
Pursuant to the amended text on distributions of dividends, financial entities shall comply with a series of requirements, as follows: i)
They shall not be subject to the provisions of Sections 34 and 35 bis of the Financial Institutions Law; ii) No liquidity assistance loans
shall have been granted to them; iii) they shall be in compliance with information regimes; iv) they shall not record shortfalls in the
compiled minimum capital (without computing for such purposes the effects of the individual exemptions granted by the
Superintendence of Financial and Foreign Exchange Institutions) or minimum cash, v) they shall have complied with additional capital
margin when applicable.
The entities not facing any of these situations may distribute dividends in accordance with provisions set forth in said amended text,
provided the entity´s liquidity or solvency is not jeopardized.
It should be noted that through Communication “A” 6464 the BCRA established that until March 31, 2020, financial entities that, have
not increased the capital conservation margins to determine the distributable result by 1 additional percentage point must have prior
authorization from the SEFyC for the distribution of results.
On August 30, 2019 and with the objective of stabilizing the exchange market, the BCRA established through Communication “A”
6768 that financial entities, in order to proceed with the distribution of their results, must have prior authorization from the
Superintendence of Financial and Exchange Entities. In said authorization process, the Superintendencewill take into consideration,
among other elements, the potential effects of the application of international accounting standards according to Communication "A"
6430 (Point 5.5 of IFRS 9 - Impairment of financial assets) as well as the effects of the restatement of financial statements provided for
by Communication "A" 6651.
On March 9, 2023, through Communication “A” 7719, the Central Bank authorized financial entities to distribute results for up to 40%
of the accumulated retained earnings until December 31, 2023. This distribution could be made from April 1, 2023, until December 31,
2023, prior Central Bank approval, in 6 equal, monthly and consecutive installments.
As indicated in Note 32, as a consequence of the share purchase program, as of December 31, 2023, $5,166,412 treasury shares were
held in the portfolio. In accordance with the provisions of Title IV, Chapter III, article 3, paragraph 11, item c of the CNV Rules. (N.T.
2013 and mod.) while these shares are held in the portfolio, there is a restriction on the distribution of retained earnings and free reserves
equal to the cost of those shares held in treasury.
F-77
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Our shareholders' equity under the rules of the Argentine Central Bank comprise the following captions:
Capital stock
Inflation adjustment of capital stock
Paid in capital
Treasury shares
Inflation adjustment of treasury shares
Cost of treasury shares
Other reserves
Retained earnings
Other comprehensive Income
Total shareholders’ equity attributable to the owners of the parent under the rules of the Argentine
Central Bank
25. LOANS AND OTHER FINANCING
As of December 31, 2023 and 2022 the composition of the loan portfolio is as follows:
12/31/2023
442,672
27,960,909
254,538,548
14,050
2,944,946
(5,166,412)
4,307,608
51,354,318
6,389,921
342,786,560
Total as of
December 31,
Stage 1
69,528,350
94,147,532
41,749,574
48,862,769
12,769,662
43,000,760
65,526,273
23,287,364
36,981,673
483,950
18,059,791
Assets Before Allowances
Stage 2
798,561
1,789,054
1,395,503
3,574,987
2,298,694
7,283,041
8,625,173
4,009,797
1,457,017
132,241
1,833,245
2023
70,780,844
96,463,538
43,696,886
53,951,778
15,327,328
51,898,817
75,811,274
32,922,723
38,438,690
620,254
19,991,780
454,397,698 33,197,313 12,308,901 499,903,912
(4,559,430) (5,097,963) (7,791,435) (17,448,828)
482,455,084
Stage 3
453,933
526,952
551,809
1,514,022
258,972
1,615,016
1,659,828
5,625,562
—
4,063
98,744
449,838,268
28,099,350
4,517,466
Promissory notes
Unsecured corporate loans
Overdrafts
Mortgage loans
Automobile and other secured loans
Personal loans
Credit card loans
Foreign Trade Loans
Other financings
Other receivables from financial transactions
Receivables from financial leases
Subtotal
Allowances for loan losses
Total
F-78
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Promissory notes
Unsecured corporate loans
Overdrafts
Mortgage loans
Automobile and other secured loans
Personal loans
Credit card loans
Foreign Trade Loans
Other financings
Other receivables from financial transactions
Receivables from financial leases
Subtotal
Allowances for loan losses
Total
Other guarantees granted
Responsibilities for foreign trade loans
Documentary loans
Overdrafts
Total eventual responsability
Expected Credit Loss Allowance
Total as of
December 31,
2022
Assets Before Allowances
Stage 2
Stage 1
1,054,451
106,340,398
1,090,559
123,583,042
630,267
44,092,669
6,243,262
69,664,409
19,532,565
3,945,158
92,037,962 19,148,300
127,210,714 19,109,434
5,760,515
505,380
283,228
631,717
678,954,659 58,402,271
Stage 3
417,688 107,812,537
4,127,696 128,801,297
45,262,951
540,015
78,117,610
2,209,939
1,261,814
24,739,537
8,045,266 119,231,528
7,333,522 153,653,670
50,535,631
4,610,063
16,060,607
206,750
9,033,481
304,912
33,286,305
120,559
29,178,224 766,535,154
(9,453,324) (9,112,579) (19,494,502) (38,060,405)
9,683,722 728,474,749
40,165,053
15,348,477
8,445,341
32,534,029
669,501,335 49,289,692
December 31, 2023 December 31, 2022
39,550,577
3,983,919
6,100,750
760,987
50,396,233
93,364,567
12,785,060
4,761,804
569,642
111,481,073
Expected credit loss allowance recognised in the period is affected by a range of factors as follows:
• Transfers between Stage 1 and Stage 2 or 3 due to financial instruments experiencing significant increases (or decreases) of
credit risk or becoming credit-impaired in the period, and the consequent "step up" (or "step down") between 12 months and
Lifetime;
• Additional allowances for new financial instruments recognized during the period, as well as releases for financial instruments
de-recognized during the period;
•
Impact on the measurement of ECL of changes in PDs, EADs and LGDs in the period, resulting from the regular updating of
model inputs;
•
Impact on the measurement of ECL as a result of changes in models and assumptions;
• Discount unwind within ECL due to passage of time, as ECL is measured on a present value basis;
• Foreign exchange retranslations for assets denominated in foreign currencies and other movements; and
F-79
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
• Financial assets derecognised during the period and write-offs of allowances related to assets that were written off during the
period.
The following charts explain changes in the provision for credit risk between the beginning and end of the period due to the following
factors:
An analysis of changes in the gross carrying amount and the corresponding ECL allowance is, as follows:
Balance at the beginning of the year
Transfers
Stage 1 to 2
Stage 1 to 3
Stage 2 to 3
Stage 2 to 1
Stage 3 to 2
Stage 3 to 1
Additions
Disposals
Interest accrual
Write-Offs
Portfolio sale
Exchange Differences and Others
Result from exposure to changes in the purchasing power of
money
Gross carrying amount at December 31, 2023
Balance at the beginning of the year
Transfers
Stage 1 to 2
Stage 1 to 3
Stage 2 to 3
Stage 2 to 1
Stage 3 to 2
Stage 3 to 1
Additions
Disposals
Net changes of financial assets
Write-Offs
Exchange Differences and Others
Result from exposure to changes in the purchasing power of
money
Gross carrying amount at December 31, 2022
Stage 1
678,954,659
Assets Before Allowances
Stage 2
Stage 3
58,402,271
29,178,224
Total
766,535,154
Stage 1
9,453,324
9,112,579
19,494,502
ECL Allowance
Stage 2
Stage 3
Total
38,060,405
3,914,111
(3,914,111)
—
(303,408)
(202,208)
—
(2,482,348)
2,482,348
38,181
—
—
25,952
437,486,557
—
(170,758,908) (11,739,962)
3,619,436
(4,207,426)
—
17,929,896
59,400,087
(1,839,190)
—
6,157,397
—
303,408
202,208
—
(38,181)
(25,952)
—
(7,085,326)
5,060,605
(9,586,970)
(5,814,155)
7,439,173
—
—
—
—
—
—
437,486,557
(189,584,196)
68,080,128
(15,633,586)
(5,814,155)
31,526,466
(145,737)
(4,896)
—
42,549
—
490
11,353,751
(12,267,665)
53,229
(1,839,190)
—
2,779,792
341,203
—
(14,909)
(111,414)
5,016
—
—
(2,564,209)
299,254
(4,207,426)
—
5,849,164
—
224,691
85,417
—
(20,379)
(11,092)
—
(5,202,920)
2,677,636
(9,586,970)
(5,662,526)
14,384,334
195,466
219,795
70,508
(68,865)
(15,363)
(10,602)
11,353,751
(20,034,794)
3,030,119
(15,633,586)
(5,662,526)
23,013,290
(553,293,685) (32,074,638)
33,197,313
454,397,698
(7,324,133)
12,308,901
(592,692,456)
499,903,912
(4,866,217)
4,559,430
(3,611,295)
5,097,963
(8,591,258)
7,791,435
(17,068,770)
17,448,828
Assets Before Allowances
Stage 1
879,964,366
Stage 2
Stage 3
74,614,284
49,480,121
Total
1,004,058,771
Stage 1
11,072,145
16,028,693
33,849,316
ECL Allowance
Stage 2
Stage 3
Total
60,950,154
(18,688,877)
(2,101,531)
—
11,262,861
—
656,849
407,434,273
(218,516,270)
(381,600,438)
(1,479,934)
15,578,295
18,688,877
—
(1,652,737)
(11,262,861)
732,518
—
27,119,635
(13,635,329)
(25,556,814)
(1,834,191)
630,647
—
2,101,531
1,652,737
—
(732,518)
(656,849)
9,013,943
(7,438,591)
2,464,795
(9,199,278)
2,164,462
—
—
—
—
—
—
443,567,851
(239,590,190)
(404,692,457)
(12,513,403)
18,373,404
(239,529)
(39,434)
—
(7,256)
—
(92,806)
3,249,561
(1,318,045)
3,614,000
(1,479,934)
426,620
1,487,641
—
(286,483)
(2,067,638)
(87,655)
—
3,616,371
(2,427,827)
3,752,961
(1,834,191)
298,749
—
2,032,421
1,362,499
—
(293,091)
(230,302)
7,647,421
(5,162,127)
9,800,873
(9,199,278)
1,934,888
1,248,112
1,992,987
1,076,016
(2,074,894)
(380,746)
(323,108)
14,513,353
(8,907,999)
17,167,834
(12,513,403)
2,660,257
(13,554,935)
678,954,659
(9,441,758) (19,672,129)
29,178,224
58,402,271
(42,668,822)
766,535,154
(5,731,998)
9,453,324
(9,368,042)
9,112,579
(22,248,118)
19,494,502
(37,348,158)
38,060,405
Collateral and other credit enhancements
Collateral is an instrument pledged as security for repayment of a loan, to be forfeited in the event of default. The Entity accepts
collateral as security before a potential breach on behalf of a debtor occurs.
The Argentine Central Bank classifies these guarantees in three types: Preferred "A" (considered self-settleable), Preferred "B" (made
up by mortgage or pledge loans) and remaining guarantees (mainly bank guarantees and fines).
In virtue of the administration of collateral, Grupo Supervielle relies on a specific area devoted to the review of the legal compliance
and suitable instrumentation of received collateral. In accordance with the type of collateral, the guarantors may be people or
companies (in the case of mortgages, pledges, fines, guarantees and liquid funds) and international top level Financial Entities (for
stand by letters of credit).
F-80
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Grupo Supervielle monitors collateral held for financial assets considered to be credit-impaired as it becomes more likely that Grupo
Supervielle will take possession of collateral to mitigate potential credit losses.
Credit Impaired loans
Overdrafts
Financial Lease
Promissory Notes
Mortgage loans
Personal loans
Pledge loans
Credit cards
Other
Total
Write-off policy
Gross
exposure
551,809
98,744
453,933
1,514,022
1,615,016
258,972
1,659,828
6,156,577
12,308,901
Allowances
for loans
losses
507,461
81,439
342,285
736,553
1,532,260
186,865
1,565,436
2,839,136
7,791,435
Book value
44,348
17,305
111,648
777,469
82,756
72,107
94,392
3,317,441
4,517,466
Fair value of
collateral
-
34,794
73,270
814,204
-
648,882
-
2,953,136
4,524,286
Grupo Supervielle writes off, in whole or in part, when it has exhausted all practical recovery efforts and has concluded there is no
reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include: (i) ceasing enforcement
activity and (ii) where Grupo Supervielle´s recovery method is foreclosing on collateral and the value of the collateral is such that there
is no reasonable expectation of recovering in full.
Grupo Supervielle may write-off financial assets that are still subject to enforcement activity, The outstanding contractual amounts of
such assets written off during the year ended on December 31, 2023 and 2022 amount to $9,090,153 and $24,494,621
respectively.Grupo Supervielle still seeks to recover amounts it is legally owed in full, but which have been partially written off due to
no reasonable expectation of recovery.
12.31.2023
12.31.2022
Balance at the beginning of the year
Additions
Disposals
Cash collection
Portfolio sales
Condonation
Exchange differences and other movements
Gross carrying amount
26. RISK MANAGEMENT POLICIES
Financial risk factors
Credit risk
24,494,621
15,633,586
47,918,738
12,513,403
(17,335,542) (27,877,484)
(5,848,535)
(443,214)
(12,355,883) (21,585,735)
(8,060,036)
(13,702,512)
24,494,621
9,090,153
(4,148,993)
(830,666)
The Integral Risk Committee approves credit risk strategies and policies submitted in accordance with recommendations provided by
the Integral Risk Corporate Department, the Credit Corporate Department and commercial sectors and in compliance with regulations
F-81
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
set by the Argentine Central Bank. The credit strategy and policy is aimed at the development of commercial opportunities within the
framework and conditions of Grupo Supervielle´s business plan, while keeping suitable caution levels in face of the risk.
Policies and procedures enable the definition of accurate aspects aimed at the deployment of Grupo Supervielle´s Strategy related to the
administration of credit risk; which include Grupo Supervielle´s criteria to grant loans, credit benefits and powers, types of products and
the way in which the structure is organized, among other aspects. Likewise, the Group has, on the one hand, a comprehensive risk
management policy that details aspects linked to the governance of general fundamental risks and, on the other hand, specific manuals
and procedures that contemplate, among others, the standards issued by the BCRA related to this matter.
Grupo Supervielle´s credit risk management policies are applied to corporate and individuals. To such ends, a customer segmentation
has been defined for Corporate Banking and Personal and Business Banking.
Grupo Supervielle focuses on supporting companies belonging to sectors with potential, and successful in their activity. Within the
range of credit products offered for the business segment, Grupo Supervielle aims to develop and lead the factoring and leasing market,
as well as to be a benchmark in foreign trade.
Within Corporate Banking, we seek a solid proposal for medium and large companies' market, seeking to maintain proximity with clients
through service centers, agreements with clients throughout their value chain, and providing agile responses through existing credit
processes.
Regarding Personal and Business Banking, in addition to payroll and senior citizens segments, special focus is placed on Entrepreneurs
and SMEs, SMEs as well as the Banks´s Identité segment.
Therefore, Grupo Supervielle relies on scoring and rating models to estimate probability of default (PD) for the different client portfolios.
As for risk appetite framework, Grupo Supervielle relies on cut-offs for each risk-based segment that express the maximum risk to be
assumed in terms of probability of default.
In addition to PD parameters, Grupo Supervielle relies on estimates of exposure at default (EAD) and loss given default (LGD)
parameters with the purpose of estimating Group’s allowance for loan losses and the necessary economic capital to face unexpected
losses that may arise due to credit risk.
Grupo Supervielle is aimed at keeping a diversified and atomized portfolio, in order to minimize risk concentration. To such ends, loan
origination and client portfolio profiles are adjusted to each different circumstance. To this end, the entity has an indicators dashboard
linked to the appetite for credit and concentration risk. The evolution of the NPL, Coverage and Cost of Risk indicators is monitored in
relation to target limits established according to risk appetite and the strategy determined in the entity's business plan. Likewise, there
is a portfolio limits scheme that measures balance concentration by debtor or economic group, the concentration of the main debtors,
concentration by value chain, economic activities, portfolio by risk level based on the facility risk rating. and the exposure in foreign
currency both at a total level and by product type.
Credit Risk Measurement Models
Grupo Supervielle relies on models aimed at estimating the distribution of potential credit losses in its credit portfolio, which depend on
defaults by the counterparties (PD – Probability of Default), as well as the assumed exposure to such defaults (EAD – Exposure At
Default) and the recoveries of each defaulted loan (LGD – Loss Given Default).
Based on this, systems were developed at Grupo Supervielle that calculate statistical forecasts, economic capital and Risk-Adjusted
Return (RAROC) models in order to optimize management and decision-making.
F-82
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Grupo Supervielle has deepened its work on the expected loss methodologies under IFRS 9, focusing on methodological improvements
in the estimation of parameters (PD, EAD and LGD), aligning the definition of the parameters to the credit process. The forward looking
model has been redesigned with the inclusion of a greater number of variables and openings, performing a periodic review of it in order
to keep the expected loss model aligned with the macroeconomic vision.
Calculation of statistical forecasts
Based on the results of the PD (probability of default), EAD (exposure at default) and LGD (loss given default) estimates, the associated
statistical forecast is calculated.
The exercises for the estimation of statistical forecasts are studies that aim to analyze the Group's own portfolio information in order to
estimate, in global terms, the average value of the loss distribution function for an annual time horizon in healthy operations, and for the
entire life of credits in those operations that are considered impaired (provisions for expected loss).
Economic Capital Calculation
The economic capital for credit risk is the difference between the portfolio’s value at risk (according to the confidence level for
individuals of 99.9% and for companies of 99%) and the expected credit losses.
Grupo Supervielle relies on economic capital models for credit risk (one for individuals and another for companies). Such quantitative
models include the exacerbation of capital by concentration risk and Securitization Risk. In the economic capital calculation models a
one year holding period is used, except from factoring exposures where a six month holding period is used.
Counterparty Risk Management
Grupo Supervielle relies on a Counterparty’s Risk Map approved by the Credit Committee where the following limits are defined for
each counterparty according to Grupo Supervielle’s risk appetite: credit exposure and settlement limits, foreign exchange settlement
risk, securities settlement risk and Repo transactions settlement risk, among other.
Regarding the economic capital for the counterparty’s risk, it is included in the Economic Capital Quantitative Model for Credit Risk.
Loans written off
Those credits classified as unrecoverable are eliminated from assets, recognizing them in off-balance sheet accounts. Their balance as
of December 31, 2023 and 2022 amounts to $9,090,153 and $24,494,621 respectively.
F-83
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Maximum Credit Risk Exposure
The following table contains an analysis of the maximum credit risk exposure:
December 31, 2023
Loan Type
Promissory Notes
Unsecured Corporate Loans
Overdrafts
Mortgage Loans
Automobile and other secured loans
Personal Loans
Credit Card Loans
Foreign Trade Loans
Other Financings
Other Receivables from Financial Transactions
Receivables from Financial Leases
Total
Loan Type
Promissory Notes
Unsecured Corporate Loans
Overdrafts
Mortgage Loans
Automobile and other secured loans
Personal Loans
Credit Card Loans
Receivables from Financial Leases
Foreign Trade Loans
Other Financings
Other Receivables from Financial Transactions
Total
Stage 1
Stage 3
ECL Staging
Stage 2
12-month ECL Lifetime ECL Lifetime ECL
69,528,350
94,147,532
51,728,612
48,862,769
12,769,662
43,000,760
142,659,542
23,287,364
36,981,673
483,950
18,059,791
Total
70,780,844
453,933
96,463,538
526,952
53,975,939
551,809
53,951,778
1,514,022
15,327,328
258,972
1,615,016
51,898,817
1,659,828 158,008,564
32,922,723
5,625,562
38,438,690
—
620,254
4,063
19,991,780
98,744
541,510,005 38,561,349 12,308,901 592,380,255
798,561
1,789,054
1,695,518
3,574,987
2,298,694
7,283,041
13,689,194
4,009,797
1,457,017
132,241
1,833,245
December 31, 2022
Stage 3
Stage 1
ECL Staging
Stage 2
12-month ECL Lifetime ECL Lifetime ECL
106,340,398
1,054,451
1,090,559
123,583,042
797,854
58,650,927
6,243,262
69,664,409
19,532,565
3,945,158
92,037,962 19,148,300
313,311,575 29,945,881
631,715
5,760,515
505,639
283,228
Total
107,812,537
128,801,297
59,988,796
78,117,610
24,739,537
119,231,528
350,590,978
34,229,660
50,535,631
41,490,323
8,093,481
905,046,594 69,406,562 29,178,222 1,003,631,378
417,688
4,127,696
540,015
2,209,939
1,261,814
8,045,266
7,333,522
120,561
4,610,063
206,753
304,905
33,477,384
40,165,053
40,777,931
7,505,348
Financial Instruments to which the impairment requirements in IFRS 9 are not applied
Financial assets measured at fair value through profit or loss are not subject to impairment. The maximum exposure to credit risk is the
corresponding fair value.
Market risk
Group defines Market Risk as the risk resulting from deviations in the trading portfolio value as a result of market fluctuations during
the period required for the settlement of portfolio positions.
The Risk Department’s measurement, control and follow-up perimeter covers those operations where certain loss risk in Grupo
Supervielle ´s shareholders equity value is assumed, as a result of changes in market factors. Such risk results from the variation in risk
F-84
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
factors under evaluation (interest rate, exchange rate, market price of equity instruments and options), as well as liquidity risk in the
different products and markets where Grupo Supervielle operates.
Due to the characteristics of its business profile, Grupo Supervielle is the entity with the greatest exposure to this risk. However, market
risk monitoring also covers the positions taken by Grupo Supervielle for its own portfolio, as well as those taken by its different
subsidiaries. There is an entire limit scheme, with periodic monitoring and activation of alerts if any violation is observed. With this
same scope, frequent monitoring and review of exposure indicators to the National Treasury is carried out.
With the purpose of measuring the risk of positions homogeneously and therefore, setting a limit and threshold structure to support
management and control schemes, Banco Supervielle uses the VaR model (Value at Risk), which defines the maximum expected loss
to be recorded in a financial asset portfolio in normal market conditions, within a certain period of time and at a pre-established
confidence level. Indicators obtained from this enable Grupo Supervielle to identify a potential market risk and take preventive measures.
At the Supervielle Group level, the focus of attention regarding market risk management is placed on the trading portfolio managed by
the Trading Desk, although broader control is also carried out, including positions managed with management objectives. of liquidity
by the Financial Planning Management. With regard to this broader trading book, controls are limited to the assumed risk exposure,
measured using the VaR methodology, in relation to the computable capital responsibility (CPR). Additionally, a control is carried out
on the VaR by group of assets, thus limiting the risk that the Entity can assume in each group of assets considered in isolation. The
objective is to incorporate an element of alert in the event of credit events or breakdowns in the correlations between asset groups, events
that may escape the consideration of a diversified VaR.
The controls over the Trading desk are more exhaustive. Approved strategies and policies are reflected in what is known internally as a
unified Risk Map document, where detailed operations enabled by the Trading desk can be explained in detail. In the same document
the entire framework of controls that translate the risk appetite with which the Entity is willing to operate is exposed. In this way,
limitations are established on the open position in certain financial instruments, VaR limit on the diversified portfolio, maximum
allowable loss amount before executing the stop loss policy and conditions that could lead to the execution of a stop strategy gain. The
entire control scheme is complemented by action plans that must be implemented once a violation occurs within the limits established
therein.
Market risk management focused special attention on a year 2023 characterized by a prolonged and uncertain electoral process that
covered practically the entire second half of the year. This same uncertainty translated into increasing levels of volatility in financial
assets exposed to market risk, which led to frequent revisions in the risk appetite reflected in the admissible VaR levels in the different
companies of Grupo Supervielle, as well as in the maximum tolerable exposure in sovereign bonds.
The exposure to Grupo Supervielle's exchange rate risk at the end of the year by currency type is detailed below:
Balances as of 12/31/2023
Balances as of 12/31/2022
Monetary
Financial
Assets
Monetary
Financial
Liabilities
Derivatives Position
Net
Monetary
Financial
Assets
Monetary
Financial
Liabilities
Derivatives Position
Net
286,636,032 253,932,945 158,431 32,861,518 214,929,965 189,946,941 173,451 25,156,475
1,040,581
1,452,342
296,307,933 259,499,619 158,431 36,966,745 220,881,523 193,405,576 173,451 27,649,398
405,320
3,699,907
3,421,601
37,034
5,907,343
3,764,558
4,462,182
1,489,376
5,502,023
64,651
—
—
—
—
Currency
US Dollar
Euro
Others
Total
Financial assets and liabilities are presented net of derivatives, which are disclosed separately. Derivative balances are shown at their
Fair Value at the closing price of the respective currency.
F-85
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The table above includes only Monetary Assets and Liabilities, since investments in equity instruments and non-monetary instruments
does not generate foreign exchange risk exposure.
A sensitivity analysis was performed considering reasonably possible changes in foreign exchange rates in relation to Grupo
Supervielle’s functional currency. The percentage of variation used in this analysis is the same Grupo Supervielle used in its Business
Plan and Projections.
Currency
US Dollar
US Dollar
Euro
Euro
Other
Other
Total
Sensitivity Analysis
12/31/2023
Variation
12/31/2022
P/L
Equity
Variation
P/L
Equity
79,605,198
242.30 % 79,605,198
(242.30) % (79,605,198) (79,605,198)
982,053
982,053
242.30 %
(982,053)
(242.30) %
(982,053)
8,964,534
8,964,534
242.30 %
(8,964,534)
(242.30) % (8,964,534)
242.30 % 89,551,785
89,551,785
(242.30) % (89,551,785) (89,551,785)
85.70 % 19,097,099 19,097,099
(85.70) % (19,097,099) (19,097,099)
892,205
892,205
85.70 %
(892,205)
(892,205)
(85.70) %
1,245,257
1,245,257
85.70 %
(85.70) % (1,245,257)
(1,245,257)
85.70 % 21,234,561 21,234,561
(85.70) % (21,234,561) (21,234,561)
Banco Supervielle also has a methodology for carrying out individual stress tests of market risks. These tests are performed on a daily
basis, in conjunction with the calculation of the parametric VaR. The Stressed VaR indicator makes it possible to determine the risk that
Grupo Supervielle would be assuming with the current composition of the trading portfolio, in the event of a repetition of the stress
conditions that occurred in a given historical period.
When using a diversified VaR methodology, it is important to provide information related to the contribution that each asset in the
portfolio makes to the aggregate VaR measurement, and fundamentally if this asset generates risk diversification or not. That is why,
within the variables included in the daily report, the VaR component of each asset is included, thus allowing a sensitivity analysis on
the impact of each asset on the total risk.
With the aim of improving the assumed risk analysis through the use of alternative measurement metrics, Grupo Supervielle recognizes
the change in market conditions on exposure to risk through an adjustment to the volatilities used in the VaR calculation. According to
the methodology used, the returns of assets registered in more recent dates have a greater incidence in the calculation of volatilities. In
parallel, the Entity performs a measurement and monitoring of the assumed risk through the application of an expected shortfall
methodology, analyzing the universe of unexpected losses located in the distribution queue beyond the critical point indicated by VaR.
Economic capital calculation
Banco Supervielle adopts the diversified Parametric VaR methodology for the calculation of market risk economic capital, both at a
consolidated and individual level.
Interest Rate Risk
Interest Rate Risk is the risk derived from the likelihood that changes in Grupo Supervielle’s financial condition occur as a result of
market interest rate fluctuations, having effect on its financial income and economic value. The following are such risk factors:
✓ Different maturity terms and interest rate re-adjustment dates for assets, liabilities and off balance sheet items.
✓ Forecast, evolution and volatility of local interest rates and foreign interest rates.
F-86
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
✓ The basis risk that results from the unsuitable correlation in the adjustment of assets and liabilities interest rates for instruments
that contain similar revaluation features;
✓ The implicit options in certain assets, liabilities and off-balance sheet items of Grupo Supervielle.
Grupo Supervielle’s interest rate risk management model, includes the analysis of interest rates gaps. Such analysis enables the basic
explanation of the financial statement structure as well as the detection of interest rate risk concentration along the different terms.
Special attention focuses on the accumulated gap during the first 90 days, as it is the holding period used when evaluating exposure to
interest rate risk in each of the entities and due to its relevance when evaluating actions that may modify the structural balance
positioning.
The interest rate risk management is aimed at keeping Grupo Supervielle’s exposure within those levels of risk appetite profile validated
by the Board of Directors upon changes in the market interest rates.
To such ends, the interest rate risk management relies on the monitoring of two metrics:
✓ MVE – VaR Approach: measures the difference between the economic values estimated given the interest rate market curve
and said value estimated given the interest rate curve resulting from the simulation of different stress scenarios. Grupo
Supervielle uses this approach to calculate the economic capital for this risk.
✓ NIM – EaR Approach: measures changes in expected accruals over a certain period of time (12 months) upon an interest rate
curve shift resulting from a different stress situation simulation practices.
With the publication of Communication "A" 6397, the Argentine Central Bank presented the applicable guidelines for the treatment of
interest rate risk in the investment portfolio. The regulation makes a distinction between the impact of fluctuations in interest rate levels
on the underlying value of the entity's assets, liabilities and off-balance sheet items (economic value or MVE), and the alterations that
such movements in the interest rate may have on sensitive income and expenses, affecting net interest income (NII). This same criterion
had already been adopted by Banco Supervielle, so that the new regulations implied a readaptation of the management model to the
suggested measurement methodology, maintaining some criteria and incorporating others.
As established by the regulator, Banco Supervielle and IUDÚ Compañia Financiera must use the Standardized Framework described in
point 5.4. of the Communication "A" 6397 for the measurement of the impact on the economic value of the entities (ΔEVE) of six
proposed disturbance scenarios. These scenarios include parallel movements in the curves of market interest rates upwards or
downwards, flattening or steepening of the slope of these curves, as well as an increase or decrease in short-term interest rates. A base
curve of market interest rates is considered for each of the significant currencies in the financial statement of each entity. According to
the applicable regulation, Banco Supervielle has to use an internal measurement system (SIM) for measurement based on results
(ΔNIM). It is important to highlight that Banco Supervielle, which has not been qualified by the Argentine Central Bank as having a
local systemic importance (D-SIB), is not legally bound to have its own internal measurement system (SIM) for the measurement based
on economic value (ΔEVE).
Beyond the regulatory provisions, it is important to note that Banco Supervielle has been working with internal measurement systems
(SIM) to measure the impact of rate fluctuations, both on economic value (ΔEVE) and on results (ΔNIM). The development of these
systems included the definition of assumptions for the determination of the maturity flow of different lines of assets and liabilities
without defined maturity or with implicit or explicit options of behavior.
Following good practices in risk management and with the aim of ensuring the reasonableness of fit of the internal models used, a
backtesting methodology was developed applicable to the results obtained with the interest rate risk measurement tool (approach MVE-
VaR). Specifically, an evaluation of the discount rates projected in the critical scenario is carried out.
F-87
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
In a context of strong increases in reference interest rates, it was necessary to adjust the dynamic rate GAP to consider daily temporary
buckets. This development made it possible to gain precision in the evaluation of scenarios of parallel increases or decreases in reference
interest rates. The monitoring and projection of the monthly financial margin had special relevance throughout the year.
Economic Capital Calculation
As a first step to calculate economic capital, Banco Supervielle calculates its exposure to interest rate risk from the MVE-EaR (economic
value) approach of its internal measurement system (SIM), using a holding period of three months (90 days) and a confidence level of
99%. This quantitative model includes the exacerbation of capital by securitization risk. The result obtained is compared with the worst
result of the alterations proposed in the six scenarios proposed by the Standardized Framework, with the resulting economic capital
being the worst of both measurements (SIM and Standardized Framework).
The exposure to interest rate risk is detailed in the table below. It presents the residual values and average rate of the assets and liabilities,
categorized by date of renegotiation of interest or expiration date, the lowest.
Assets and Liabilities
Up to 30
Term in days
From 30 to 90 from 90 to 180 from 180 to 365 More than 365
Total
To 12/31/2023
Total Financial Assets
Total Financial Liabilities
Net Amount
1,367,597,996 201,843,376
(1,123,780,666) (182,804,117)
19,039,259
243,817,330
75,283,526
(99,006,907)
(23,723,381)
25,674,272
(14,104,522)
11,569,750
233,501,535
(1,693,776)
231,807,759
1,903,900,705
(1,421,389,988)
482,510,717
Assets and Liabilities
Up to 30
Term in days
From 30 to 90 from 90 to 180 from 180 to 365 More than 365
Total
To 12/31/2022
Total Financial Assets
Total Financial Liabilities
Net Amount
1,217,782,647 157,102,640
(916,770,479) (143,998,663)
13,103,977
301,012,168
113,969,851
(106,865,350)
7,104,501
43,914,002
(1,113,500)
42,800,502
465,883,744
(515,361,769)
(49,478,025)
1,998,652,884
(1,684,109,761)
314,543,123
The table below shows the sensitivity to a reasonably possible additional variation in interest rates for the next year, taking into account
the composition as of December 31, 2023 and 2022. Variations in rates were determined considering the scenarios set by Communication
"A" 6397 for the calculation of the Interest Rate Risk in the Investment Portfolio. The parameters taken as a base and or budgeted by
the Bank for fiscal years 2023 and 2022 and the changes are considered reasonable possible based on the observation of market
conditions:
12/31/2023
12/31/2022
Items
Decrease in the interest rate
Increase in the interest rate
Additional variation in
the interest rate
4% ARS; 2% USD
4% ARS; 2% USD
Increase / (decrease)
in the income
statement
(9,017,557) 4% ARS; 2% USD
4% ARS; 2% USD
8,615,049
Additional variation in
the interest rate
Increase / (decrease)
in the income
statement
(458,588)
617,802
F-88
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Liquidity Risk
Grupo Supervielle defines Liquidity Risk as the risk of assuming additional financing expenses upon unexpected liquidity needs. Such
risk results from the difference of sizes and maturities between Grupo Supervielle’s assets and liabilities. Such risks involve the
following:
✓ Funding Liquidity Risk means the risk to obtain funds at normal market cost when needed, based on the market’s perception
of Grupo Supervielle.
✓ Market Liquidity Risk means the risk resulting from Grupo Supervielle’s incapacity to offset an asset position at market price,
as a consequence of the following two key factors:
• Assets are not liquid enough,
• Changes in the markets where those assets are traded.
Liquidity and concentration indicators of funding sources are used to determine the tolerance to this risk, starting from the most
restrictive definitions to the most comprehensive ones.
The following are the main core metrics used for liquidity risk management:
✓ LCR (Liquidity Coverage Ratio): measures the relation between high quality liquid assets and total net cash outflows over a
30-day period. Grupo Supervielle estimates this indicator on a daily basis, having exceeded the minimum value established by
law, as well as that established internally based on their risk appetite.
✓ Net Stable Funding Ratio (NSFR): measures the ability of Grupo Supervielle to fund its activities with sufficiently stable
sources to mitigate the risk of future stress situations arising from its funding. Grupo Supervielle calculates this indicator on a
daily basis, having complied with the minimum value required by the regulator and that established internally based on its risk
appetite.
✓ Coverage of Remunerated Accounts and Pre-Payable Term Deposits: this indicator is aimed to reduce funding dependence
of unstable sources in non-liquid scenarios.
In addition, the Assets and Liabilities Committee performs a daily monitoring of some follow-up metrics. Such indicators are used to
analyze the main components of LCR while assessing Grupo Supervielle’s liquidity condition and warning upon trend changes that may
affect the guidelines set by the risk appetite policy. Additionally, within these monitoring indicators, Committee assess for the
availability of liquid assets to respond to an eventual withdrawal of more volatile deposits, such us remunerated current accounts and
deposits of the public sector in foreign currency.
During 2023, strong growth was observed in interest-bearing current accounts, especially from institutional clients. The funds thus raised
were applied to the acquisition of LELIQ or Repo Transactions with the BCRA, thus trying to minimize the mismatch of terms. Controls
were implemented so that this exposure to the BCRA is maintained at reasonable levels measured against total assets, the entity's equity
and in terms of market share.
Liquidity in dollars remained at high levels, above 72% throughout the year.
F-89
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Economic capital calculation
Grupo Supervielle relies on the following elements that ensure the suitable management of this type of risk:
✓ Broad liquidity indicators dashboard, to monitor liquidity levels. Each indicator relies on its relevant threshold and limit, which
are monitored on a daily basis by the Risk Area (sending due warnings upon violation cases), on a byweekly basis by the Assets
and Liabilities Committee (ALCO) and on a monthly basis by the Integral Risk Committee. Likewise, a weekly report is drawn
up and sent to members of the Integral Risk Committee, ALCO and the Board.
✓
Indicators that measure the concentration of funding sources, establishing Grupo Supervielle’s risk appetite.
✓ Development and monitoring of new liquidity coverage and leverage indicators set by the Argentine Central Bank in
compliance with Basel III route map.
✓ Different liquidity risk follow-up tools have been added, including a disaggregate assessment of contractual term mismatches
and funding concentration reports, by counterparty, product and significant currency. The accuracy of the information required
for such reports contributed to the improvement of our Risk Management Information System (MIS).
✓ The liquidity coverage ratio is used to assess Grupo Supervielle’s capacity to meet liquidity needs over a 30-day period within
a stress scenario described by the Argentine Central Bank. The follow-up of this indicator is carried out on a daily basis, keeping
Grupo Supervielle’s liquidity director and officials updated on its evolution.
✓ Permanent monitoring of limit and threshold compliance in virtue of the NSFR.
✓
Individual stress tests, carried out on a daily basis upon an eventual critical scenario of a sudden withdrawal of deposits and its
impact on the minimum cash position and LCR.
✓
Intraday liquidity monitoring tools as indicated above.
✓ Regarding contingency plans, Grupo Supervielle follows a policy that ensures the application of its guidelines in stress tests,
according to the decision taken by ALCO Committee and Integral Risk Committee.
The Risk management framework described herein enables a suitable liquidity condition; therefore, Grupo Supervielle considers the
economic capital estimation unnecessary to cover such risk, as long as Grupo Supervielle’s solvency should not be affected once the
stress tests contingency plan have been implemented.
F-90
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
Below is the concentration of loans and deposits as of December 31, 2023 and 2022:
Loans and other financing
12/31/2023
12/31/2022
Number of Clients
10 largest customers
Balance
69,087,338
% over total portfolio
13.8%
Balance
68,238,639
50 following largest customers
100 following largest customers
123,526,823
92,511,436
24.7%
18.5%
124,053,825
96,004,018
Rest of customers
214,778,315
43.0%
478,238,672
% over total portfolio
8.9%
16.2%
12.5%
62.4%
TOTAL
499,903,912
100.0%
766,535,154
100.0%
12/31/2023
12/31/2022
Deposits
Number of customers
10 largest customers
50 following largest
customers
100 following
largest customers
Rest of customers
TOTAL
Balance
662,055,214
% over total portfolio
42.7%
Balance
571,545,441
% over total portfolio
33.5%
347,109,915
22.4%
379,200,150
66,447,114
473,315,813
1,548,928,056
4.3%
30.6%
100.0%
94,183,414
660,080,578
1,705,009,583
22.2%
5.5%
38.7%
100.0%
Below is an analysis of the assets and liabilities maturities, determined based on the remaining period as of December 31, 2023 until the
contractual maturity date, based on undiscounted cash flows:
As of 12/31/2023
Loans and other financing
To the non-financial public sector
To the financial sector
To the Non-Financial Private Sector and
Foreign residents
TOTAL ASSETS
Deposits
Non-financial public sector
Financial sector
Non-financial private sector and foreign
residents
Liabilities at fair value through profit or
loss
Repo Transactions
Other financial liabilities
Financing received from the Argentine
Central Bank and other financial
institutions
TOTAL LIABILITIES
Less than
1 month
306,353,057
1,832,047
2,789,465
From 1 to From 3 to From 6 months to From 1 to More than
1 years
136,200,679
170,430
670,385
2 years
155,987,345
340,860
902,442
6months
115,578,523
170,430
324,232
3 months
113,373,676
-
185,831
2 years
283,308,741
852,150
166,635
Total
1,110,802,021
3,365,917
5,038,990
301,731,545
115,083,861
113,187,845
306,353,057 113,373,676 115,578,523
128,375,672
46,551,007
-
167,400
-
-
1,414,396,480
104,224,359
476,539
282,289,956
154,744,043
135,359,864
1,102,397,114
136,200,679 155,987,345 283,308,741 1,110,802,021
1,610,217,225
20,894,066
104,391,759
-
476,539
-
-
-
-
-
-
-
1,309,695,582
46,383,607
128,375,672
20,894,066
-
-
1,505,348,927
607,903
940,332
78,021,141
-
-
404,753
-
-
549,577
-
-
909,190
-
-
1,100,630
-
-
587,297
607,903
940,332
81,572,588
461,013
1,494,426,869
390,562
47,346,322
525,110
129,450,359
996,772
22,800,028
1,424,113
2,524,743
943,488
1,530,785
4,741,058
1,698,079,106
F-91
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
27. TURNOVER TAX
Commencing January 2020 and January 2023, the tax authorities of the City of Buenos Aires and the Province of Mendoza, respectively,
began to impose a Turnover Tax on the revenues derived from securities and instruments (Leliqs/Notaliqs or Repos) issued by the
Central Bank of Argentina.
The BCRA initiated declaratory actions of certainty against both tax authorities regarding the unconstitutionality of the measures
implemented, as they directly and significantly affect the purposes and functions assigned to the BCRA, substantially altering the
execution of national monetary and financial policy. The BCRA also established that the imposition of this Turnover Tax is in clear
contradiction to the provisions of the National Constitution and its Organic Charter. The BCRA has the authority to issue instruments
to regulate monetary policy and achieve financial and exchange stability.
Through the enacted laws, provincial governments exceeded their powers by imposing taxes on these monetary policy instruments, the
regulation, implementation, and/or use of which falls within the jurisdiction of the BCRA. This directly impacts the immunity principle
of the national government's policy as these revenues cannot be subject to taxation at the local level due to their immunity or non-taxable
status. Both municipalities and provinces lack tax authority over financial instruments issued by the National Government.
In line with the submissions made by the BCRA, the Argentine Banking Association (ABA), the Argentine Bankers' Association
(ADEBA), and the majority of financial institutions operating in these provinces have also filed constitutional actions against these
regulations. These actions are still pending resolution by the Supreme Court of Justice.
Based on the aforementioned, the Bank believes that the reasons supporting the non-taxability of these types of instruments are strong
based on expert opinions, both internal and from third-party specialists. We estimate the likelihood of a favorable ruling to our position
as the majority view. Consequently, the Bank has ceased paying the tax on the revenues generated by Leliqs operations in Mendoza
since January 2023, and by Leliqs and Repo transactions in the City of Buenos Aires since April of the current year.
As of December 31, 2023, the Group had received notifications from the Tax Administration of Mendoza in repect of the period
comprised between January 2023 and April 2023, and from the Argenine Government Agency for Public Revenue in repect of the
period comprised between June 2023 and July 2023. In addition, ex officio proceedings have been initiated for the period comprised
between April 2023 and May 2023, as a result of which we have created contingency provisions in the amount of $4,037,278.
F-92
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
28. ASSETS AND LIABILITIES IN FOREIGN CURRENCY
At
At 12/31/2023 (per currency)
At
12/31/2023
Dollar
Euro
Real
Others
12/31/2022
Items
ASSETS
Cash and Due from Banks
Debt securities at fair value through profit or loss
Derivatives
Other financial assets
Loans and other financing
Other Debt Securities
Financial assets in guarantee
Other non-financial assets
TOTAL ASSETS
201,242,228 191,641,796 5,835,926 54,830 3,709,676 120,528,180
4,452,251
173,451
5,511,094
56,672,747
30,281,996
3,019,938
415,317
296,466,364 286,794,463 5,907,343 54,830 3,709,728 221,054,974
8,684,949
158,431
8,142,110
42,833,841
27,768,176
6,968,929
596,231
8,684,949
158,431
8,142,162
42,905,258
27,768,176
6,968,929
596,231
—
—
—
71,417
—
—
—
—
—
—
—
—
—
—
—
—
52
—
—
—
—
LIABILITIES
Deposits
Non-financial public sector
Financial sector
Non-financial private sector and foreign
residents
Liabilities at fair value with changes in results
Other financial liabilities
Financing received from the Argentine Central
Bank and other financial entities
Other non-financial liabilities
TOTAL LIABILITIES
240,375,097 236,733,749 3,641,348
1,300
—
7,125,492
1,894
7,126,792
1,894
233,246,411 229,606,363 3,640,048
—
15,612,348 1,793,752
—
17,470,741
—
255,796
1,397,985
66,916
7
259,499,619 253,932,945 5,502,023
188,880
1,397,968
—
—
—
—
—
133
—
—
133
— 171,150,697
5,995,946
—
4,758
—
— 165,149,993
2,706,372
—
13,295,704
64,508
—
10
5,326,453
926,350
64,518 193,405,576
NET POSITION
36,966,745
32,861,518
405,320 54,697 3,645,210
27,649,398
29. CURRENT/NON-CURRENT DISTINCTION
Grupo Supervielle has adopted the presentation of all assets and liabilities in order of liquidity due to this presentation provides
information that is reliable and more relevant,
F-93
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
As of December 31, 2023 and 2022, the amount expected to be recovered or settled after more than twelve months for each asset and
liability line item is as follows:
12/31/2023
12/31/2022
ASSETS
Cash and due from banks
Cash
Argentine Central Bank
Other local financial institutions
Others
Debt Securities at fair value through profit or loss
Derivatives
Reverse Repo transactions
Other financial assets
Loans and other financing
To the non-financial public sector
To the financial sector
To the Non-Financial Private Sector and Foreign residents
Other debt securities
Pledged as collateral
Current income tax assets
Inventories
Investments in equity instruments
Property, plant and equipment
Investment Property
Intangible assets
Deferred income tax assets
Other non-financial assets
TOTAL ASSETS
LIABILITIES
Deposits
Non-financial public sector
Financial sector
Non-financial private sector and foreign residents
Liabilities at fair value through profit or loss
Repo Transactions
Other financial liabilities
Financing received from the Argentine Central Bank
and other financial institutions
Unsubordinated negotiable Obligations
Current income tax liability
Provisions
Deferred income tax liability
Other non-financial liabilities
TOTAL LIABILITIES
No more than
12 months
after the
reporting
period
229,098,272
114,005,581
103,634,933
10,241,998
1,215,760
46,415,822
3,795,093
755,708,132
46,499,784
404,549,650
1,834,358
3,265,728
399,449,564
133,761,633
46,382,606
—
—
—
—
—
—
2,203,863
2,090,893
1,670,505,748
More than 12
months after
the reporting
period
No more than
12 months
after the
reporting
period
Total
150,719,643
229,098,272
—
59,547,824
114,005,581
—
84,654,328
103,634,933
—
6,428,404
10,241,998
—
89,087
1,215,760
—
69,707,595
46,415,822
—
920,381
3,795,093
—
67,206,248
755,708,132
—
25,246,191
46,499,784
—
580,663,665
482,455,084
77,905,434
128,427
2,070,115
235,757
1,868,427
4,006,546
740,818
578,666,811
476,378,423
76,928,859
763,440,474
251,180,541
117,418,908
45,056,529
46,382,606
—
3,039,566
—
—
208,923
—
—
—
365,985
365,985
—
51,151,635
51,151,635
—
45,597,064
45,597,064
—
67,634,055
67,634,055
5,646,967
12,960,099
10,756,236
8,486,553
18,763,829
16,672,936
387,502,253 2,058,008,001 1,720,342,735
More than 12
months after
the reporting
period
Total
150,719,643
59,547,824
84,654,328
6,428,404
89,087
69,707,595
920,381
67,206,248
25,246,191
728,474,749
864,785
2,007,125
725,602,839
839,975,567
45,056,529
3,039,566
208,923
1,565,010
57,217,390
52,637,396
69,368,706
37,997,568
16,647,728
445,646,455 2,165,989,190
—
—
—
—
—
—
—
—
—
147,811,084
736,358
138,698
146,936,028
76,535,093
—
—
—
1,565,010
57,217,390
52,637,396
69,368,706
32,350,601
8,161,175
12/31/2023
12/31/2022
No more than
12 months
after the
reporting
period
1,249,698,981
More than 12
months after
the reporting
period
299,229,075
No more than
12 months
after the
reporting
period
1,705,009,233
More than 12
months after
the reporting
period
100,747,830
476,539
1,148,474,612
607,903
940,332
71,663,787
—
—
Total
1,548,928,056
100,747,830
476,539
299,229,075 1,447,703,687
607,903
940,332
72,738,928
—
—
1,075,141
86,705,591
315,861
1,617,987,781
6,661,539
—
54,257,012
350
—
—
Total
1,705,009,583
86,705,591
315,861
350 1,617,988,131
6,661,539
—
56,381,855
—
—
2,124,843
1,252,379
—
737,181
23,990
1,614,907
73,200,297
1,399,739,757
1,439,590
—
—
14,873,677
—
—
2,691,969
—
737,181
14,897,667
1,614,907
73,200,297
316,617,483 1,716,357,240
12,458,785
1,748,271
—
33,382
565,339
85,591,165
1,866,324,726
4,761,049
—
—
5,234,564
—
—
17,219,834
1,748,271
—
5,267,946
565,339
85,591,165
12,120,806 1,878,445,532
F-94
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
30. OFFSETTING OF FINANCIAL ASSET AND LIABILITIES
A financial asset and a financial liability shall be offset and the net amount presented in the statement of financial position when, and
only when, Grupo Supervielle fulfill with paragraph 42 of IAS 32, and currently has a legally enforceable right to set off the recognized
amounts; and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously,
In addition, Grupo Supervielle has master netting arrangement that do not satisfy the offsetting criteria but creates a right of set-off that
becomes enforceable and affects the realization or settlement of individual financial assets and financial liabilities only following a
specified event of default or in other circumstances not expected to arise in the normal course of business,
As of December 31, 2023 and 2022, the amount of assets and liabilities subject to a master netting arrangement not offset is as follows:
12/31/2023
Debts with businesses for consumption by our
customers with credit card
Derivatives instruments
Total
12/31/2022
Credit cards transactions
Derivatives instruments
Total
31. CAPITAL MANAGEMENT
Gross
amount (a) offset (b) (c) = (a) + (b) Financial asset / (Financial liability) Collateral Net amount
Amount
Net in Financial
Statements
Amounts subject to a master
netting arrangement not offset
—
183,690
183,690
—
2,685,919
2,685,919
—
2,869,609
2,869,609
(872,707) (24,334,219) (25,206,926)
—
(25,206,926)
—
(872,707) (24,334,219)
—
Net in Financial
Statements
Amounts subject to a master
netting arrangement not offset
Amount
Gross
amount (a) offset (b) (c) = (a) + (b) Financial asset / (Financial liability) Collateral Net amount
(959,658) (26,592,007) (27,551,665)
—
(27,551,665)
—
(959,658) (26,592,007)
—
363,673
363,673
—
634,487
634,487
—
270,814
270,814
—
The Group's objectives regarding capital management are established below:
• Compliance with the requirements established by the BCRA in its communication “A” 6260 and amendments
• Support the Group's operations to avoid any situation that puts the Group's operations at risk.
The total capital under the rules of the Argentine Central Bank for Banco Supervielle as of December 31, 2023 and 2022 is composed
as follows (book value):
Capital Stock
Paid in capital
Inflation Adjustment of capital stock
Treasury shares
Inflation adjustment of treasury shares
Cost of Treasury shares
Reserves
Retained earnings
Other comprehensive income
Shareholders' Equity attributable to owners of the parent company
Shareholders' Equity attributable to non-controlling interests
TOTAL SHAREHOLDERS' EQUITY
(*) Historical values without adjustment for inflation.
F-95
12/31/2023
442,672
254,538,548
27,960,909
14,050
2,944,946
(5,166,412)
4,307,608
51,354,318
6,389,921
342,786,560
274,693
343,061,253
12/31/2022 (*)
444,411
264,229,227
28,325,583
12,311
2,580,272
(4,307,608)
19,308,569
(24,700,453)
3,220,774
289,113,086
229,326
289,342,412
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The Board of Directors, through its Risk Committee, is responsible for monitoring, supervising, adapting and ensuring compliance with
the objectives established for capital management.
According to the guidelines established by the BCRA, financial entities must maintain capital ratios to reduce the associated risks. It
should be noted that as of December 31, 2023 and 2022, the Group complied with the minimum capital requirement determined in
accordance with the provisions of the BCRA regulations.
Computable Patrimonial Liability of Banco Supervielle S.A. is made up of the basic Net Assets and the complementary Net Assets.
The balance of these concepts as of December 31, 2023 and 2022 is detailed below:
Basic Shareholder´s Equity
Tier One Ordinary Capital
(Deductible concepts)
Additional Tier One Capital
Complementary Shareholder´s Equity
Tier Two Capital
(Deductible concepts)
Group Funds
Computable Patrimonial Responsability
(*) Historical values without adjustment for inflation
12/31/2023
12/31/2022 (*)
264,420,324
(55,583,242)
—
—
—
—
13,771,273
222,608,355
77,619,877
(25,063,540)
—
2,600,170
2,600,170
—
3,051,628
58,208,135
The pro forma consolidated Tier 1 capital ratio of Grupo Supervielle amounts to 21% as of December 31, 2023. This includes the sum
of $13,771,273 thousand that the Group maintains as excess liquidity that could be applied to the growth of its business and of its
subsidiaries.
It is worth mentioning that within the deductible concepts are the balances from deferred tax assets (DTA) in accordance with the
provisions of point 8.4.1.1. of the T.O of the regulations on Minimum Capital of Financial Entities. This deduction is made for the gross
amount of the DTA, without considering the possible offsets that may be made of deferred tax liabilities (DTL) and that are allowed by
both IFRS and Basel III standards.
The aforementioned regulations establish that deferred tax assets may be offset with deferred tax liabilities when DTA and DTL refer
to taxes received by the same tax authority and the competent tax authority authorizes the offset, a situation that is verified in the
determination of the tax on the profits of the entity.
Below is a detail of the determined requirement:
Credit risk
Operational risk
Market risk
Requirement
Integration
Excess
(*) Historical values without adjustment for inflation
32. REPURCHASE OF TREASURY SHARES
12/31/2023
61,895,671
21,891,498
2,658,844
86,446,013
222,608,355
136,162,342
12/31/2022 (*)
25,107,962
8,188,453
1,693,962
34,990,377
58,208,135
23,217,758
On July 20, 2022, the Company's Board of Directors approved a repurchase of treasury shares with a maximum amount to be invested
of 2,000,000 or the lesser amount resulting from the acquisition until reaching 10% of the capital stock. The price to be paid for the
shares will be up to a maximum of US$2.20 per ADR on the New York Stock Exchange and up to a maximum of $138 per Class B
share on Bolsas y Mercados Argentinos S.A. The Company would could acquire shares for a term of 250 calendar days from the entry
F-96
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
into force of the program, subject to any renewal or extension of the term that is approved by the Board of Directors. The approved
share program did not imply an obligation on the behalf of Grupo Supervielle with respect to the acquisition of a certain number of
shares.
On September 13, 2022, the Board of Directors of Grupo Supervielle S.A. approved to modify point 5 of the terms and condition s of
the own shares acquisition plan approved on July 20, 2022 as follows: “5. The price to be paid for the shares will be up to a maximum
of US$2.70 per ADR on the New York Stock Exchange and up to a maximum of $155 per Class B share on Bolsas y Mercados
Argentinos S.A." The remaining terms and conditions remained in force as they were approved.
Subsequently, on December 27, 2022, he Board of Directors approved to modify point 5 of the terms and conditions of the own shares
acquisition program approved on July 20, 2022 as follows: “5. The price to be paid for the shares will be up to a maximum of US$2.70
per ADR on the New York Stock Exchange and up to a maximum of $200 per Class B share on Bolsas y Mercados Argentinos S.A.”
The remaining terms and conditions remained in force as approved.
In the statement of Changes in Shareholders´ Equity, the nominal value of the repurchased shares is disclosed as " Treasury shares " and
its restatement as "Inflation adjustment of treasury shares ". The consideration paid, including directly attributable incremental cost, is
deducted from equity until the shares are canceled or reissued, and is disclosed as “Cost Treasury shares”.
As of December 31, 2023, Grupo Supervielle's share repurchase program has expired, meaning additional shares cannot be acquired.
Grupo Supervielle has acquired a total of 11,093,572 Class B Shares in ByMA and 591,384 ADRs (equivalent to 2,956,920 shares) in
NYSE reaching an execution of 86.3% of the program and 3.076% of the capital stock.
33. MERGE OF IUDÚ COMPAÑÍA FINANCIERA S.A. AND TARJETA AUTOMÁTICA S.A. WITH BANCO
SUPERVIELLE S.A.
On December 14, 2022, the board of directors of Banco Supervielle S.A. accepted a merge commitment by absorption, as absorbing
company, with IUDÚ Compañía Financiera S.A. and Tarjeta Automática S.A., as absorbed companies.
The absorption of these two companies will make it possible to offer services to the consumer financing segment in a much more
efficient manner, simplifying the corporate structure and completing the integration that began in September 2022 with the migration of
clients and the IUDU financing portfolio to the Bank. Customers who have IUDU accounts will be able to maintain a 100% digital
experience while having the rest of the Bank's service channels available.
On March 6, 2023, the Board of Directors of Banco Supervielle S.A. agreed to carry out a corporate reorganization, through a merger
by absorption by which Banco Supervielle would absorb IUDÚ Compañía Financiera S.A. and Tarjeta Automática S.A., which would
be dissolved without liquidation. The Merger date was set effective January 1, 2023, inclusive, date from which Banco Supervielle S.A.
In its capacity as absorbing and continuing company, assumed the activities of IUDÚ Compañía Financiera S.A. and Tarjeta Automática
S.A., assuming the rights and obligations corresponding to those companies.
The shareholders of the companies Banco Supervielle S.A. (“Absorbing Company”), IUDÚ Compañía Financiera S.A. and Tarjeta
Automática S.A. (“Absorbed Companies”) approved in an ordinary and extraordinary meeting held on May 18, 2023, the merger by
absorption of the Absorbing Company with the Absorbed Companies under the terms of article 82 and related provisions of the General
Companies Law and its amendments and of article 77 et seq. of the Income Tax Law (text ordered in 1997 and its modifications). Once
the current legal requirements have been met, the registration of said merger will proceed.
On June 8, 2023, the final merger commitment was signed.
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GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
The forementioned decision was approved by the Central Bank of the Argentine Republic on December 1, 2023 under Resolution No.
478 and by the National Securities Commission on December 13, 2023 under Resolution N°RESFC-2023-22557-APN-DIR#CNV.
Grupo Supervielle S.A. received 4,783,920 class B shares of Banco Supervielle S.A. in accordance with the previous merger
commitments, with 4,422,016 shares corresponding to an exchange ratio of 0.09497225 for IUDÚ Compañía Financiera S.A. and
361,904 shares corresponding to an exchange ratio of 0.03375751 for Tarjeta Automática S.A.
As a result of the merger, the participation of Grupo Supervielle S.A. at Banco Supervielle S.A. amounted to 97.1198%. However, for
the purposes of the consolidated financial statements, said operation had no effect on the total holding.
34 . MINIMUM CAPITAL REQUIREMENTS
The Central Bank requires financial institutions to maintain minimum capital amounts measured as of each month's closing, The
minimum capital is defined as the greater of (i) the basic minimum capital requirement, which is explained below, or (ii) the sum of the
credit risk, operational risk and market risk, Financial institutions (including their domestic Argentine and international branches) must
comply with the minimum capital requirements both on an individual and a consolidated basis.
The following table sets forth information regarding excess capital and selected capital and liquidity ratios of the Bank:
As stated above under "Presentation of Financial and Other Information", we have prepared our audited consolidated financial statements
for 2023, 2022 and 2021 under IFRS, Minimum capital requirement has been prepared in accordance with the rules of the Argentine
Central Bank, which is not comparable to data prepared under IFRS.
Year ended December 31,(2)
2022
(in thousands of Pesos except percentages and ratios)
2021
2023
Calculation of excess capital:
Allocated to assets at risk
Allocated to Bank premises and equipment, intangible assets and equity investment assets
Market risk
Public sector and securities in investment account,
Operational risk
Required minimum capital under Central Bank rules
Basic net worth
Complementary net worth
Deductions
Total capital under Central Bank rules
Excess capital
Credit Risk Weighted Assets (1)
Risk Weighted Assets (1)
Selected capital and liquidity ratios:
Regulatory capital/credit risk weighted assets
Regulatory capital/risk weighted assets
Average shareholders’ equity as a percentage of average total assets
Total liabilities as a multiple of total shareholders’ equity
Cash as a percentage of total deposits
Liquid assets as a percentage of total deposits (3)
Tier 1 Capital / risk weighted assets
51,149,308
10,474,161
2,658,844
272,202
21,891,498
86,446,013
264,420,324
—
(55,583,242)
208,837,082
122,391,069
756,569,592
1,058,040,330
20,729,624
3,747,910
1,693,962
625,570
8,188,453
34,985,519
77,619,877
2,600,170
(25,063,540)
55,156,507
20,170,988
303,351,644
428,238,464
12,957,481
2,035,689
965,159
34,489
4,805,957
20,798,775
42,938,440
1,564,272
(11,770,286)
32,732,426
11,933,651
181,430,487
254,513,436
27.6 %
19.7 %
14.5 %
6.3x
14.4 %
64.1 %
19.7 %
18.2 %
12.9 %
12.2 %
8.3x
8.7 %
46.0 %
12.3 %
18.4 %
12.9 %
12.5 %
7.5x
11.1 %
49.2 %
12.2 %
(1) Risk Weighted Assets includes operational risk weighted assets, market risk weighted assets, and credit risk weighted assets,
Operational risk weighted assets and market risk weighted assets are calculated by multiplying their respective required minimum
capital under Central Bank rules by 12.5, Credit Risk Weighted Assets is calculated by applying the respective credit risk weights
to our assets, following Central Bank rules,
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GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
(2) Nominal values without inflation adjustment,
(3) Liquid assets include cash, securities issued by the Central Bank, and Repo transactions with the Central Bank. This ratio does not
consider other government securities held by the Company to set Minimum Reserve Requirements.
35. ECONOMIC CONTEXT ON GROUP´S OPERATIONS
Grupo Supervielle operates in an economic context marked by strong volatility, both nationally and internationally.Between January 1
and December 31, 2023, accumulated inflation reached 211.4% (CPI) and the peso depreciated against the US dollar, going from
$180/US$ at the beginning of the year to $808/ US$ at the end of the year.
The monetary authority imposed exchange restrictions in order to contain the demand for dollars. This implied, among other things, the
requirement to request prior authorization from the BCRA to make payments abroad for operations such as the payment of dividends to
non-residents, the payment of financial loans and the payment of imports of certain goods and services, among others.
On December 10, 2023, a new government took office in Argentina, which has set among its objectives the establishment of a new
economic regime in the country, for which it proposes to carry out a broad reform of laws and regulations.
The new government's plan proposes to move forward with a profound deregulation of the economy and with structural reforms that
ease restrictions to invest and operate in the country, including the gradual relaxation of the exchange restrictions mentioned previously,
with the aim of eliminating them once the macroeconomic conditions improve.
The Ministry of Economy presented, on December 12, the economic program of the new administration, whose priority is to eliminate
the fiscal deficit and its financing through the expansion of remunerated liabilities and the monetary issue of Pesos from the BCRA.
Another of the central elements of the new program is the elimination of distortions, restrictions and bureaucratic obstacles and the
correction of relative prices (especially the exchange rate), as a prerequisite to stabilize the economy.
In the month of December the BCRA moved in this direction. In this sense, LELIQ were no longer tendered, and repos became the
main monetary policy instrument whose interest rate was established at 100% n.a. Regarding liquidity injection operations, the BCRA
announced that it will no longer finance the Treasury, although it will continue to offer put options and repos on public debt instruments
to the extent required by the stability of financial conditions.
Additionally, on December 13, the BCRA decided to reduce the 1-day repo rate from 126% to 100% n.a. (171.5% e.a.). Thus, the interest
rate on 1-day repos for private funds was 85% n.a. (133.7% n.a.), while the 1-day repo interest rate remained at 160% n.a. (393.6% e.a.).
The reduction in the interest rate paid on remunerated liabilities will contain the endogenous growth of these instruments and generate
incentives for banks to once again act as financial intermediaries.
The new government published a Decree of Necessity and Urgency (DNU) where some 300 laws are annulled and/or modified,
introducing reforms in the labor market, the customs code and the status of public companies, among others. Although the DNU must
be discussed and ratified by at least one of the chambers of the National Congress, its provisions have been partially in force since
December 29, 2023.
On the external front, the nominal exchange rate continues to devaluate at run at a rate of 2% per month since December 13, the date on
which it was devalued from $350/USD to $800/USD. With data as of February 27, the exchange rate is located at $841.15/USD in the
Free Exchange Market (MLC). Likewise, the new import regime, which allows import payments to be deferred, generated relief in the
MLC for US$ 7,066 million. This number comes from the difference between accrued and liquidated imports. The BCRA has already
issued US$ 5,000 million of Bonds for the Reconstruction of a Free Argentina (BOPREAL) of Series 1 and US$ 2,000 million of Series
2. In the coming days, bidding for Series 3 will begin with the objective of placing US$ 3,000 million. In this framework, between
F-99
GRUPO SUPERVIELLE S.A.
Notes to Consolidated Financial Statements
As of December 31, 2023, presented in comparative format
(Expressed in thousands of pesos)
December 13 and February 27, the BCRA's net foreign exchange purchase and sale. with the private sector left a positive balance of
USD8,563 million.
The International Reserves of the BCRA ended on February 22 with a balance of USD27,347 million, registering an increase of
USD4,274 million since the beginning of the year and US$6,138 million since the change of government. This dynamic was influenced
by the higher Multilateral Real Exchange Rate, a product of the December devaluation and the new import regime that made it possible
to avoid paying accrued imports.
The financial sector has a significant exposure to the Argentine public sector, through rights, public securities, loans and other assets.
The Group's exposure to the Argentine public sector is as follows:
Central Bank of Argentina (including repo transactions)
Treasury Bills
Government Securities
Exposure to Government Securities and Treasury Bonds
Loans to Public Sector
Total exposure to Public Sector
Over Total Assets
Over Shareholder´s equity
Grupo Supervielle´s Exposure to Public Sector
831,757,936
199,343,557
60,856
1,031,162,349
2,070,115
1,033,232,464
50.21%
302.67%
The context of volatility and uncertainty continues as of the date of issuance of these Consolidated Financial Statements.
The reforms proposed by the new government began their legislative discussion process. It is not possible to predict at this time its
evolution or new measures that could be announced.
For all of the above, Grupo Supervielle's Management permanently monitors the evolution of the situations mentioned in the
international markets and at the local level, to identify possible impacts on its patrimonial and financial situation, and determine the
possible actions to be adopted.
36. SUBSEQUENT EVENTS
On April 19, 2024, the Board of Directors of Grupo Supervielle approved a program for the repurchase of the Group’s shares pursuant
to Article 64 of Law 26,831 and CNV regulations. The Group decided to establish the Program as a result of the current national
macroeconomic context and considering that Grupo Supervielle’s shares does not reflect the real value of the society’s assets nor their
potential value.
The terms and conditions for the acquisition of its own shares under the Program are the following: (i) maximum amount of the
investment: up to Ps.4,000,000,000; (ii) maximum number of shares to be acquired: up to 10% of the capital stock of Grupo Supervielle,
as established by the applicable Argentine laws and regulations; (iii) payable price: up to Ps.1,600.00 per Class B share and U.S.$8.00
per ADS on the New York Stock Exchange, and (iv) term for the acquisition: 120 days as from the next day of the date of publication
of the information in the Bolsa de Buenos Aires Daily Bulletin, subject to any renewal or extension of the term, which will be informed
to the public by the same means.
As of the date of these financial statements, Grupo Supervielle has acquired under the second program a total of 550,000 Class B Shares
in ByMA, reaching an execution of 17.4% of the program and 0.12% of the capital stock. Grupo Supervielle has acquired a total of
14,600,492 Class B Shares representing 3.20% of the capital stock.
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