Good morning, everyone, and welcome to Grupo Supervielle First Quarter 2023 Earnings Call. This is Ana Bartesaghi, Treasurer and IRO. A slide presentation will accompany today's webinar, which is available in the Investors section of Grupo Supervielle Investor Relations website. Today's conference call is being recorded. [Operator Instructions] Speaking during today's call will be Patricio Supervielle, our Chairman and CEO; and Mariano Biglia, our Chief Financial Officer. Also joining us is Alejandro Stengel, First Vice Chairman of the Board and CEO at Banco Supervielle. All will be available for the Q&A session. As a reminder, today's call will contain forward-looking statements based on management's current expectations and beliefs and subject to several risks and uncertainties. I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Patricio Supervielle, our Chairman and CEO, will start the call discussing the key highlights for the quarter and priorities for 2023 as well as an update on macro views for this year and 2024. Afterwards, Mariano Biglia, our CFO, will take a deeper look at our performance and near-term perspectives. This will be followed by a Q&A session. Patricio, please go ahead.

Thank you, Ana. Good morning, everyone. Thank you for joining us today. I will begin my presentation with Slide 3. We are pleased to have begun the new year delivering ROE of 2% in real terms in the first quarter. We were able to achieve the positive ROE even as we continue to operate in macro and political environments that are volatile and challenging. The various initiatives that we have implemented since first Q '22 to optimize operations and streamline our branch network have allowed us to achieve significant operating leverage contributing to bottom line profitability. Key among these were personnel expenses, which declined nearly 12% year-on-year in real terms. We also benefited from our flexibility in managing assets and liabilities to optimize our financial margin in a context where we saw inflation increase to 22% for the quarter. Mariano will discuss our performance shortly. For the current year, with the coming presidential election, we expect to continue facing a volatile backdrop. As a result, our key priorities for 2023 include: first, we are advancing on executing on our key strategic pillars prioritizing profitability of growth. We have a large and loyal customer base, and we see the opportunity to deepen our relationship with them. Consequently, for the current year, we are focusing on customer engagement, monetization and cross-sell to gain additional share of their wallet. Specifically, we are aiming to cross-sell insurance, investment products, short-term loans, along with cash management services. Second, we have adopted an increasingly conservative risk profile. With accelerated inflation putting pressure on individuals' disposable income, we are prioritizing payable customers, while implementing stricter credit score overall -- credit scoring overall. On the corporate front, we are focused on providing lending and transactional services to our key target segments that include SMEs and middle market companies.…

Thank you, Patricio, and good day, everyone. Please turn to Slide 6. To begin, as Patricio mentioned, ROE was 2% for the quarter. This is in line with our expectations of returning to profitability. Importantly, we accomplished this in an increasingly challenging environment. We reported net income of nearly ARS 560 million in the quarter compared to a net loss of ARS 550 million in first quarter '22. The main drivers behind this year-on-year improved performance include: first, a 12% decline in personnel expenses for nearly ARS 2 billion, reflecting cost savings obtained from the successful implementation of our rightsizing and operating efficiency initiatives as we have been discussing over the past quarters; second, loan loss provisions declined nearly 26% or over ARS 800 million as a result of declines in both the balance and in early delinquency of the consumer finance portfolio. Third, a 2% decline in administrative expenses or close to ARS 200 million, reflecting cost savings achieved in the quarter; and fourth, net fee income was up 1% or slightly over ARS 80 million, resulting from higher fees from our brokerage business, along with lower commissions paid. These contributions to profitability were partially offset by turnover taxes, which have a higher weight as interest rates increase. Turning to Slide 7. Total assets and liabilities increased below inflation and industry growth, as we took advantage of our flexibility in managing assets and liabilities in increasingly volatile context to maximize need. On the asset front, the quarter end balance of securities issued by the Central Bank declined to 31% of total assets from nearly 36% in the prior quarter. While government securities increased their share of total assets to nearly 11%, this returned to 4Q '22 levels by April. Additionally, annual and quarterly inflation of 104% and nearly 22%,…

Thank you, Mariano. At this time, we will be going back to the question-and-answer session. [Operator Instructions] The first question come from Ernesto Gabilondo of Bank of America. Ernesto María Gabilondo Márquez: Congrats that your earnings have reached an inflection point, so good. I just have a couple of questions. The first one is on your ROE, we saw it was 2% in real terms in the quarter. But how should we think about the ROE for the year considering this complex macro outlook? And then the second one is on your effective tax rate. I think it was kind of high during the quarter. So can you elaborate what was the reason behind it? And how should we expect the effective tax rate for the full year?

Thank you. Mariano, can you answer that?

Yes. Ernesto, thank you for your questions. First, regarding ROE, as you said, we achieved 2% positive ROE in real terms for the quarter. And for the rest of the year or for the complete year, we are maintaining our expectations of achieving positive ROE as we projected in prior quarters. These projections are based mainly in cost reductions, derived from the IUDU business merger with the bank, also with the transfer of the service financial agency agreement to Banco Nacion, which allowed us to reduce our costs, mainly of branches and personnel [ until ] the rest of the efficiencies achieved during last year. Those things were in place. They were executed in 2022. Now we are seeing the results. So they allow us to think that we will achieve also the positive ROE for the year. But having said that, as we commented during the presentation, the macro front have worsened significantly. And I would say that now after one quarter of the year, we have more uncertainties than we had 3 months ago. Why? Because inflation has risen to 22% in the quarter. And for the whole year, the last economic consensus of the survey from the Central Bank reached 126%. And that was before the data of April. So most probably those projections are being revised upwards. So this is much higher than the 100% inflation we had in our projection. Also, the GDP, we now believe that it will be decreasing probably more than [ 3% ]. So that will also have a toll on economic activity, and we will be also monitoring credit risk, particularly on the individual side. So with all these factors considered, we think there's a greater uncertainty. We are still positive for the ROE for the year, but always contingent…

Well, for the first one, it's still hard to predict. I will probably be more conservative and say, in the low single digits, maybe similar to what we see in the first quarter. But there are still many moving parts because remember that with so much higher inflation at higher interest rates, that is positive for margins, but higher inflation can be negative for our costs and also can be negative for loan loss provisions. So these affects may offset each other. But we still have to see which impact is higher, in the positive of margins or the negative on the cost side. So I would say in the ROE in the low single digits, but with all this factors to be considered. And then regarding the effective tax rate for the -- it would be 40% if we wouldn't make these adjustments required by IFRS, which is an adjustment only for the presentation of the income statement, but we will still have to do it. So if the ROE is closer 0, the distortion that this adjustment produces is higher. So maybe you will still see a high effective income tax rate. I don't know if I was clear? Ernesto María Gabilondo Márquez: Yes. Super helpful.

Thank you, Ernesto. Our next question comes from Rodrigo Nistor from Latin Securities.

First, I would like to address the topic of inflation and interest rates. I mean in the current economic climate, it seems that interest rate adjustments alone may not be sufficient to control inflation. So given this, how do you anticipate interest rates to evolve in the short term? Is there a possibility that we might experience more negative real rates if inflation continues to escalate. And what's your funding strategy allocation given this -- given your view on interest rates?

Well, we expect -- I mean, as we have seen already in the past quarters, there has been increases in interest rates. And we continue to see this looking forward when there is a mark of inflation and increase in interest rate. However, the view is that we have this sensation that the Central Bank is behind the curve, and it's not basic -- we're not seeing, let's say, rates that anticipate expected inflation. So in this sense, this is what we see. But anyway, the way we -- we are basically -- the way we structure our assets and liabilities, we have -- every time there is a hike in interest rates, it is positive for our financial margins. I don't know if you want to add something, Mariano?

Yes. As Patricio mentioned, inflation continues to [indiscernible], probably interest rate will follow behind, but without going to an important positive field because [ inflation ] is always the interest rates follow a lag in inflation and not anticipate it. So that's what we are expecting. Although it is positive for our financial margins, we would expect that the inflation would not -- the market inflation would not go much higher than what we have seen in April and what is expected for May.

Okay. And a follow-up, if I may. And maybe looking further into the future. So Argentina, we will come in a new government and also a new Central Bank administration next year. So -- could you share your thoughts on what potential policy changes you anticipate or you think? And how you're preparing your -- the bank for this new environment in 2024? Thank you.

Well, first, let's start with the situation today. If you -- today, as of today, Argentina is facing the worst drought we have seen in terms of -- and with a big drop in -- or shortfall in revenues for the Central Bank. And with very low reserves and severe limitations implemented to restrict imports and affecting the economic activity. There is a sense of fatigue in the sense that there is -- there seems to be a political consensus for that next government needs to make broad changes in monetary fiscal policies, but also on other fronts such as maybe labor reforms. And so as -- so it would be like a short therapy probably. So having said that, next government, we believe that the regulatory changes will come. They will have a positive impact, of course, in the banking industry because we've been suffering some punitive regulations that affected our, let's say, profitability, particularly caps on interest rates, [ loss ] on interest rates for time deposits, certain also regulations on commissions. But at the same time, I mean the -- all these positive regulatory changes, they might -- we believe that they will come, synchronized with the implementation of the monetary and fiscal policies. And probably regarding the FX, the FX, we don't believe at this stage that it will be feasible and complete deregulation from day 1. So it might take time to do this FX deregulation and it will come gradually. That is our thoughts at this point. We expect that for us, it will, in any way, I mean, it is positive because what we need -- the financial industry in Argentina is completely transactional and it's suffering because of high inflation because we don't -- basically savings, they go [ away ] to protect against the erosion of purchasing power. And with low inflation, there is a huge potential for the financial industry today. The loans are 7% of GDP. But of course, this will depend and we hope that it would depend on the swift implementation of the normalization of fiscal and monetary policies. And we expect that still 2024 will be a relatively difficult year sort of a transition year where all this will be implemented and maybe with a pickup of loans in the second part of the year. I don't know if I answered your question.

Yes. That was really helpful and insightful, too.

Thank you, Rodrigo. Our next question comes from Yuri Fernandes at JPMorgan.

Congrats for the first profits in a while. I have a question regarding the valuation and your FX exposure. We saw you increased a lot your global net position on that. So my question is if there is a big devaluation on the [indiscernible] effects, what is the moving parts? How this affect you, the bank? And I have a second question regarding deposits, especially on transactional deposits, on demand deposits and savings. We are seeing a big decrease quarter-over-quarter. And we also saw that when other banks reported in Argentina, higher rates, high inflation, maybe investors are getting more smarter on deposits. But is this only a rate thing? Or are the banks losing market share to wallets in Argentina, like [ Mali ], like all those guys? May be as they are paying for deposits, are you losing market share? Or is it just people in Argentina using less bank's deposits?

Please, Mariano, can you answer the first part of the question?

Yes. Yuri, thank you for your questions. Regarding devaluation -- if the valuation -- if there's a hike in devaluation were to happen in real terms, that is devaluation much higher than inflation for the period. We can be loan in U.S. dollars, up to 5% of our Tier 1 -- of our capital at the bank through total instruments or NPLs. And on top of that, we also can have and we do have a position in dual bonds from the government. These bonds pay the higher of inflation or [ devaluation ]. So right now, we are accruing inflation, which is at very high levels. And the [ valuation ] is going behind. Although the government is accelerating the growing pace, it's going behind inflation. But in fact, if the valuation were to happen, those bonds would pay [ devaluation ] rate. So that's how fast we are -- as we already mentioned, we are [ 100% ] hedged against inflation, but also we have a small loan position in U.S. dollars, which can be also a larger if we account for these dual bonds. So the first impact would be, again, mainly on this loan position in foreign currency accounting for the dual bonds. Then most probably, the valuation would translate into higher inflation. So also there, we will increase our margins to offset the higher inflation. And that will translate in the short term or the middle term into higher costs. So that's what we -- what I would expect to be the moving parts. Then regarding our loan portfolio right now, the weight of the foreign currency, the loan portfolio denominated in foreign currency is much lower than several years ago. So it has a very low weight. So the risk-weight assets would increase because…

Yes. Adding to that, what Mariano said, you mentioned on the competitive situation for deposits. I think it's interesting to mention that with high inflation there is an erosion of purchasing power in the Argentine currency. So many individuals, they have -- they -- what they do to basically to preserve their purchasing power, they make transfers from banks to certain fintech, particularly to Mercado Pago and because it compensates for inflation -- for in money markets. This is a pattern that we have seen. And so we have decided and in fact, we have implemented, a very interesting tool for customers not to do that and to maintain their money with us. And basically, we have implemented as of a few weeks ago, a way basically a money market investment that they can invest for 24 hours a day, 5 days a week and keep and make the investments and take them out instantly. And this will be 7 days a week in a few weeks' time and 24 hours a day, the same standards that Mercado Pago. So we believe that this is a competitive reaction, very strong from our part. We are the first bank by the way, to do this. And we are very happy with that.

Thank you, Yuri. Okay. Ladies and gentlemen, we have reached the end of today's Q&A session. Thank you for joining us today. We appreciate your interest in our company. We look forward to meeting more of you over the coming months and providing financial and business updates next quarter. In the interim, we remain available to answer any questions that you may have. Thank you, and have a good day.