Attributable Net Loss of AR$50.3 Billion Amid Regulatory and Monetary Pressures Ahead of Mid-Term Elections; Sound Capital and Liquidity Position Underpins Growth Strategy

Improving Market Sentiment and Policy Clarity Post-Election Set the Stage for Gradual Recovery

Company Website: https://www.gruposupervielle.com/English/home/default.aspx
BUENOS AIRES, Argentina -- (Business Wire)

Grupo Supervielle S.A. (NYSE: SUPV; BYMA: SUPV), (“Supervielle” or the “Company”) a universal financial services group headquartered in Argentina with a nationwide presence, today reported results for the three- and nine-month period ended September 30, 2025.

Starting 1Q20, the Company began reporting results applying Hyperinflation Accounting, in accordance with IFRS rule IAS 29 (“IAS 29”) as established by the Central Bank.

Commenting on third quarter 2025 results, Patricio Supervielle, Grupo Supervielle’s Chairman & CEO, noted: “We are encouraged with what we are seeing in Argentina. The results of the mid-term elections have opened a new and promising chapter for the country and the financial sector as well. We are already seeing the first signs of normalization as interest rates are coming down, liquidity is improving, treasury bond prices have recovered significantly, and consumer confidence is gradually returning. This renewed optimism, together with the government’s clear mandate to move forward with long-awaited reforms, is paving the way for a recovery in economic activity and loan demand. Since November, with improving market dynamics and lower funding costs, signaling a gradual recovery in the current operating environment, the bank’s performance began to reflect this shift. Additionally, IOL posted record results in October.

These positive developments followed an exceptionally challenging third quarter. The monetary tightening implemented to stabilize the exchange rate led to unsustainably high interest rates and historically high remunerated and non-remunerated reserve requirements that sharply reduced peso liquidity and pressured margins across the financial system. These temporary and extraordinary conditions also impacted credit demand and asset quality across the system, leading to a NIM of nearly 11%, down from close to 21% in the prior quarter, resulting in an attributable quarterly net loss of Ps.50.3 million. Importantly, we are now seeing these conditions begin to reverse, with rates down significantly and reserve requirements starting to ease post-elections.

Throughout this, our core fundamentals remained solid. We maintained a strong capital position with a 13.2% ratio, achieved a 9% sequential increase in fees and continued to deliver efficiency gains, reducing personnel and administrative expenses by 12% year-to-date. While the non-performing loan ratio rose to 3.9%, it aligned to market averages consistent with our more selective origination approach to retail lending. In turn, cost of risk increased to 6.4% in the quarter. Moreover, our non-banking subsidiaries - insurance, asset management, and online retail brokerage - continued to post solid results despite the challenging context in the quarter.

Beyond the short-term headwinds, our strategic initiatives continue to move forward. The evolution of our Supervielle SuperApp remains on track; integrating artificial intelligence, personalization, and open ecosystems to simplify our clients’ financial lives. We are attracting new payroll and SME clients through our remunerated account offering, deepening engagement through our official store on Mercado Libre, and enhancing our hybrid customer service model on WhatsApp combining technology with human interaction. The integration of IOL is showing renewed growth momentum reinforcing our banking ecosystem. During the quarter, we also expanded our physical presence with the opening of two new branches to serve the value chains of dynamic industries. One located in Añelo, Province of Neuquén a key hub for Vaca Muerta Oil & Gas development, and the other in the Province of San Juan where Mining is a key industry. These initiatives reflect our long-term commitment to supporting Argentina’s economic growth through strategic sectors. We also very recently became an official sponsor of Argentina’s national soccer team for the 2026 FIFA World Cup, a partnership that reflects the strength of our brand. Moreover, IOL posted a 4% sequential increase in its active client base, with assets under custody up 33%, transaction volumes rising 22% and fees advancing 47%.

Looking ahead, we remain confident that as financial conditions continue to normalize and reforms advance to drive GDP growth, credit will once again become a key driver of growth in Argentina. This presents a valuable opportunity to further deepen our relationships with corporate customers and become their primary bank, supporting their evolving needs through enhanced cash management solutions and integrated financial services. With a solid balance sheet, a clear strategic vision, and the commitment of our teams, we are well positioned to support our clients and communities in this new phase of recovery and growth,” concluded Mr. Supervielle.

Third quarter 2025 Highlights

PROFITABILITY

During the quarter, the Company reported an Attributable Net Loss of AR$50.3 billion in 3Q25, compared to Net Income of AR$14.4 billion in 2Q25 and AR$11.7 billion in 3Q24.

9M25 Net Loss of AR$26.9 billion compared to AR$118.3 billion net income in 9M24.

During the third quarter of 2025, the environment in which the Company operated was affected by pre-electoral systemic and temporary factors. In this context, the government prioritized containing FX and inflation, while the Central Bank implemented highly contractionary monetary measures that affected the financial system and, in particular, the profitability of the banking sector.

Among the main measures, the Central Bank increased reserve requirements to record levels, with effective ratios exceeding 50% of total deposits (including more than 35% in cash), and shifted compliance from a monthly average to a daily basis. Liquidity across the financial system became extremely limited, further constraining credit supply and amplifying pressure on margins.

Additionally, interest rates remained exceptionally high, peaking at more than 40% in real terms for very short-term instruments. These unsustainable levels accelerated the repricing of liabilities relative to assets and weighed on economic activity, pressured employment, and dampened loan demand and asset quality.

Overall, these measures negatively impacted the financial margin and credit growth. In parallel, strict cost control discipline contributed to reducing operating expenses in real terms. In contrast, Net fee income increased in real terms during the period, supported by effective repricing of banking services and higher brokerage fees.

Loan loss provisions increased, YoY reflecting the continued expansion of the loan portfolio, mainly driven by higher retail loan growth since March 2024, a segment that requires higher provisioning levels than commercial loans, together with a deterioration in macroeconomic variables ahead of mid-term elections. The monetary tightening implemented in 3Q25 to stabilize the exchange rate led to unsustainably high interest rates, impacted economic activity, employment and household disposable income, and therefore asset quality across all customers’ segments.

During 3Q25, the Company reported a Loss before income tax of AR$81.2 billion, compared to Net Profit before income tax of AR$14.5 billion in 2Q25 and AR$14.1 billion in 3Q24. The sequential decline mainly reflects a 43.1% decrease, or AR$94.7 billion, in Net Financial Income, reflecting the rise in cost of funding following the increase in interest rates and a faster repricing of liabilities than assets, the extraordinary levels of reserve requirements in the quarter, and a negative spread in the mortgage portfolio. Profitability was also impacted by higher Loan Loss Provisions which increased 23.8%, or AR$11.2 billion reflecting the deterioration in macroeconomic variables and the sharp increases in real interest rates ahead of mid-term elections which have weighed on household disposable income and affected credit performance across all customers segments and across industry. These effects were partially mitigated by lower operating expenses and higher fee income. Operating expenses declined 2.0%, or AR$2.5 billion, reflecting the Company’s strict cost control discipline, while Net Service Fee Income increased 7.1%, or AR$3.7 billion, driven by banking fee repricing and a higher contribution from the brokerage business during the quarter.

YoY, the decline in profit before income tax was mainly driven by a 41.0% decrease, or AR$87.0 billion, in Net Financial Income, reflecting the aforementioned factors, together with a 330.1% increase, or AR$44.8 billion, in Loan Loss Provisions as a result of the growth of the loan portfolio since March 2024, and particularly retail lending albeit at a more moderate pace since 2Q25, and of the abovementioned macroeconomic trend in the quarter. These effects were partially mitigated by lower personnel and administrative expenses, as well as higher fee and insurance income.

In 9M25, the Company reported a Loss Before Income Tax of AR$55.3 billion, compared to a gain of AR$186.6 billion recorded in 9M24, mainly due to the abovementioned impacts in Net Financial Margin and Loan Loss Provisions, and despite a 12% decline in personnel and administrative expenses, as well as higher fee income. Moreover, 9M24 had benefited from an exceptionally strong financial margin driven by extraordinary gains on government securities.

During 3Q25, the net financial margin was AR$125.0 billion decreasing 43.1% from AR$219.8 billion in 2Q25 and 41.0% from AR$212.0 billion in 3Q24. QoQ and YoY performance mainly reflected the increase in cost of funds as a result of the lag in the repricing of the loan portfolio amid historic high real interest rates and exceptionally high liquidity requirements, together with lower yields from the investment portfolio in the context of tighter monetary policy.

The increase in reserve requirements had a negative impact of AR$20.9 billion, as requirements reached record levels of 53.5% and 48.5% compared to 45% and 20% on sight deposits from corporates and individuals and from mutual funds, respectively, in the prior quarter and a large portion had to be held in cash at very high cost of funds. This change reduced system liquidity and the Bank’s lending capacity, while increasing the share of non-interest-earning assets. In addition, the shift from a monthly average to a daily compliance regime required maintaining higher balances on a permanent basis, leading to additional funding needs at elevated interest rates following the increase in market rates.

Higher funding costs also affected the quarter’s performance, with an impact of AR$56.1 billion. In an environment of exceptionally high interest rates, deposit rates adjusted almost immediately, while loan repricing lags due to longer duration. Finally, the mortgage loan portfolio, denominated in UVA, was negatively affected by the sharp increase in real interest rates, resulting in a negative spread and an additional reduction in the net financial margin of around AR$17.7 billion.

Net Interest Margin (NIM) declined to 10.8% in 3Q25, compared to 20.8% in the previous quarter and 24.7% in 3Q24.

The total NPL ratio rose to 3.9% in 3Q25, from 2.7% in 2Q25 and 0.8% in 3Q24. This increase is in line with higher delinquency trends in retail loans, together with early signs of deterioration in commercial loans. This evolution follows the normalization of credit performance and the strong expansion in retail lending since March 2024, which typically carry higher NPL ratios than corporate loans. Additionally, the easing inflation, slower economic activity, and some deterioration in employment levels and household disposable income, affected borrowers’ repayment dynamics across all customers’ segments. Notably, the Bank’s retail NPL market share remained below its retail loan market share, underscoring the Company’s focus on lower risk lending to payroll and pension customers. In response to evolving credit dynamics, the Bank has moderated origination in the retail segment since 2Q25, while continuously enhancing its credit origination models and underwriting standards to safeguard portfolio quality and optimize risk-adjusted returns.

Loan loss provisions (LLPs) totaled AR$58.3 billion in 3Q25, up 23.8% QoQ and 330.1% YoY.

The Coverage Ratio was 112.2% as of September 30, 2025, compared to 129.7% as of June 30, 2025, and 281.7% as of September 30, 2024.

Efficiency ratio was 95.8% in 3Q25, compared with 60.9% in 2Q25 and 64.1% in 3Q24.

Loans to Deposits Ratio stood at 67.3% as of September 30, 2025, compared to 71.7% as of June 30, 2025, and 58.3% as of September 30, 2024.

Total Deposits amounted to AR$5,059.8 billion, increasing 14.9% QoQ and 39.6% YoY in real terms.

Total Assets increased 16.6% QoQ and 42.0% YoY, to AR$7,458.1 billion as of September 30, 2025.

The leverage ratio (Assets to Shareholders’ Equity) increased to 7.9x, up 140 bps QoQ, from 6.5x as of June 30, 2025, and increased 250 bps YoY, from 5.4x as of September 30, 2024.

Loans amounted to AR$3,406.0 billion as of September 30, 2025, increasing 151.0% since March 31, 2024, significantly outpacing the industry’s 136% growth over the same period. QoQ, the portfolio expanded 7.9%. YoY, loans increased 61.0%, similar to the industry’s 62.7% growth.

Common Equity Tier 1 Ratio (CET1) was 13.2% as of September 30, 2025, decreasing 70 bps QoQ and 610 bps YoY.

The QoQ decrease in CET1 primarily reflects the expansion in credit risk-weighted assets driven by loan growth, together with an increase in deductions from deferred tax asset. These effects were partially offset by a reduction in operational risk requirements following the regulatory change introduced by the Central Bank in September, which capped the operational risk capital requirement to 20% of the average minimum capital requirement for credit risk over the preceding 36 months, expressed in real terms.

Notably, the CET1 ratio rose to 14.5% in October, supported by lower deferred tax asset deductions.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251125949071/en/

Contacts:

Investor Relations
IR-GrupoSupervielle@gruposupervielle.com.ar

Source: Grupo Supervielle S.A.