GRUPO SUPERVIELLE S.

SUPV
End-of-day quote. End-of-day quote  - 01/14
57.3ARS -1.04%

Grupo Supervielle S A : 3Q20 Earnings Report

11/20/2020 | 03:19am

GRUPO SUPERVIELLE S.A.

REPORTS 3Q20 CONSOLIDATED RESULTS

Index

Third Quarter 2020 Highlights..................................................................................................................................................................

4

Financial Highlights & Key Ratios...........................................................................................................................................................

7

Review of Consolidated Results .............................................................................................................................................................

10

Comprehensive Income & Profitability...........................................................................................................................................

12

Comprehensive Income & Profitability Breakdown ...................................................................................................................

13

Net Financial Income............................................................................................................................................................................

14

Result from exposure to changes in the purchasing power of the currency....................................................................

26

Net Service Fee Income ......................................................................................................................................................................

27

Income from Insurance Activities....................................................................................................................................................

28

Loan Loss Provisions.............................................................................................................................................................................

28

Efficiency, Personnel, Administrative & Other Expenses.........................................................................................................

30

Other Operating Income (expenses), net.....................................................................................................................................

32

Other Comprehensive Income, net of tax ....................................................................................................................................

32

Income Tax ..............................................................................................................................................................................................

32

Review Of Consolidated Balance Sheet...............................................................................................................................................

33

Total Assets and Investment Portfolio ...........................................................................................................................................

34

Loan Portfolio ..........................................................................................................................................................................................

35

Risk management..................................................................................................................................................................................

36

Asset Quality ...........................................................................................................................................................................................

37

Funding......................................................................................................................................................................................................

39

CER - UVA Exposure ............................................................................................................................................................................

42

Foreign Currency Exposure................................................................................................................................................................

43

Liquidity & Capitalization ....................................................................................................................................................................

43

Minimum Cash Reserve Requirements ..........................................................................................................................................

46

Results By Segment...................................................................................................................................................................................

48

Relevant Events...........................................................................................................................................................................................

56

Credit Ratings...............................................................................................................................................................................................

57

Regulatory Environment...........................................................................................................................................................................

57

Subsequent Events.....................................................................................................................................................................................

64

ESG News ......................................................................................................................................................................................................

64

Appendix: Definition of ratios.................................................................................................................................................................

65

Grupo Supervielle Financial Statements.............................................................................................................................................

66

About Grupo Supervielle S.A..................................................................................................................................................................

69

3Q20 Net Income of AR$859.6 million; Comprehensive Net Income of AR$760.7 million

Buenos Aires, November 19, 2020 - 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-monthand nine-monthsperiods ended September 30, 2020.

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. For ease of comparison, figures for all quarters of 2019 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through September 30, 2020. This report also includes Managerial figures which exclude the IAS29 adjustment for 3Q20, 2Q20 and 1Q20 and present 3Q19 and 4Q19 figures as they were previously reported according to Central Bank Rules until December 31, 2019 and before the adoption of Rule IAS29 in 1Q20.

Updated details with regard to the Argentine government's social aid, monetary and fiscal measures to mitigate the economic impact of the Covid-19 pandemic can be found on page 56.

Management Commentary

Commenting on third quarter 2020 results, Patricio Supervielle, Grupo Supervielle's Chairman & CEO, noted: "We delivered double digit ROAE in real-terms and continued to strengthen coverage this quarter while increasing our capital base and maintaining strong liquidity. This was achieved in an environment that continues to be difficult with stay-in-place restrictions to contain the pandemic, a recessionary macro environment and a changing regulatory framework.

Given the current market situation, we are balancing the profitability-risk equation through managing the credit cycle and leveraging our flexibility, which resulted in lower loan and deposit growth.

As we retain a cautious approach to managing credit risk, we continued to revise our expected loss models to adjust to the current economic outlook. Following further in-depth top down analysis of certain industries that we expect could be highly impacted by the pandemic, this quarter we made an additional AR$1 billion in Covid-19 anticipatory provisions which resulted in a 12% sequential increase in provisions. We are closely monitoring our loan book and risk models to adjust as required. Importantly, we continued to increase our coverage ratio reaching over 181% this quarter, from 127% in 2Q20 and 83% in 4Q19.

We are seeing sustained adoption of digitalization across our business in this low touch economy. I would like to highlight that our senior citizen customer base continues to make significant strides in terms of digital adoption resulting in an overall higher number of transactions through digital and automatic channels. SMEs also continued to rapidly embrace the digital adoption since July with e-checks nearly doubling while e-factoring increased by 60% during the same period. Transactions at non-automated tellers stayed relatively unchanged at 7% and significantly below the 17% of total transactions observed in 1Q20.

Amidst this health crisis, we remain focused on executing against our long-term goals of serving the changing needs of our customers while enhancing efficiency. We are evolving our business with continued progress on the implementation of the transformation of our branch network, deploying new branch service models, including advancing the conversion of our senior citizen branches to broaden our service capabilities and boost satisfaction and efficiency. This includes enhancing the user experience by leveraging our innovative biometrics for retirees and stepping up other technologies across branches while establishing a value proposition for SMEs in areas where we see potential to expand the customer base.

With the goal of delivering digital solutions that address personal finance needs while promoting financial education with tools that help in decision-making, earlier this week we launched IUDÚ, our digital banking services platform, which joins the Grupo Supervielle ecosystem to participate in the transformation of the financial services industry. In this first iteration, the IUDÚ App allows customers to obtain personal loans and credit cards. We expect to add retail savings and time deposit accounts in the first half of 2021, followed by a comprehensive suite of digital banking products and services to be added in the near-term.

Looking ahead, following the sharp contraction in GDP expected for the year, Argentine economic activity could see a recovery of around 5% in 2021, further supported by a resumption of IMF negotiations along with a series of governmental measures that tend toward fiscal restraint. Having said that, a path to recovery is still largely dependent on the depth and duration of this global health crisis, overall macro conditions and the regulatory framework.

We remain fully committed to taking the actions required to ensure the long-term sustainability of our business. Through executing against our strategy of transforming Grupo Supervielle and prioritizing our digital transformation to continue evolving our company into a cutting edge, agile and cost-efficient player that meet our customer's needs, we believe we are on the right path." concluded Mr. Supervielle.

3

Third Quarter 2020 Highlights

PROFITABILITY

Attributable Net income of AR$859.6 million in 3Q20, compared to a loss of AR$2.3 billion in 3Q19 and a profit of AR$ 1.1 billion in 2Q20. Excluding the impact of IAS29, Attributable Net income would have been AR$1.9 billion in both 3Q20 and 2Q20, and AR$301.0 million in 3Q19.

QoQ performance was explained by: (i) higher LLPs as the Company continued to revise its expected loss models and made additional Covid-19 specific anticipatory provisions that resulted in increased coverage, and (ii) a higher impact from inflation adjustment reflecting accelerated inflation in 3Q20 compared to 2Q20. These were partially offset by: (i) a lower income tax charge, (ii) a slightly higher financial income resulting from higher volumes in Central Bank Securities investments, despite the increase in cost of funds, and higher trading gains, and

  1. lower administrative expenses following the Company's cost control policy.

Attributable Comphehensive

Income (AR$ Mil.)

Attributable Net Income Other Comprehensive Income

(2,339

(524)

460

1,435

761

335,0

108,5

514,3

859,6

1.100,5

-2.339,3

-632,1

-54,7

-99,1

-0,2

3Q19

4Q19

1Q20

2Q20

3Q20

ROAE of 11.0% in 3Q20 compared with -33.6% in 3Q19 and 14.4% in 2Q20. ROAE in 3Q20 benefitted from a deceleration in the pace of inflation which reached 7.7% in the quarter when compared to inflation of 12.5% in 3Q19. By contrast, ROAE was negatively impacted when compared to 2Q20 with a lower inflation level of 5.5%. Excluding the impact of IAS29, ROAE would have been 29.9% in 3Q20 compared to 6.2% in 3Q19 and 32.4% in 2Q20.

ROAA of 1.4% in 3Q20 compared to -3.9% in 3Q19 and 2.0% in 2Q20. Excluding the impact of IAS29, ROAA would have been 3.4% in 3Q20 compared to 0.7% in 3Q19 and 3.7% in 2Q20.

ROAE (%)

14,4% 11,0%

7,7%

3Q19 4Q19 1Q20 2Q20 3Q20 -9,6%

-33,6%

Profit before income tax of AR$871.6 million in 3Q20 compared to a loss of AR$2.6 billion in 3Q19 and a profit of AR$1.3 billion in 2Q20. Excluding the impact of IAS29, Profit before income tax, would have been AR$2.0 billion in 3Q20 and 2Q20, and a loss of AR$116.5 million in 3Q19.

Profit Before Income Tax

(AR$ Milion)

904,1 1.274,5 871,6

-699,1

-2.623,4

3Q19 4Q19 1Q20 2Q20 3Q20

Revenues were up 29.6% YoY and almost flat (0.7%) QoQ. Excluding the adoption of IAS29, Total revenues would have increased 74.8% YoY and 7.6% QoQ.

MARGIN

Net Financial Income of AR$10.0 billion was up 31.1% YoY and almost flat (+0.8%) QoQ. QoQ performance is mainly explained by an increase in interest income from higher investments in Central Bank Securities and Repo transactions, and in trading gains. These were partially offset by a lower AR$ spread as a result of the 290 bp increase in AR$ cost of funds following the rise in market interest rates, while the AR$ Commercial loan portfolio lower yield reflects higher loan volumes granted to SMEs at a 24% preferential interest rate. Excluding the impact of IAS29, Net Financial Income, would have been AR$ 9.7 billion in 3Q20 up 83.6% YoY and 7.0% QoQ.

Net Interest Margin (NIM) of 21.2% was up 400 bps YoY, but down 230 bps QoQ. QoQ performance reflects lower spreads, including: (i) AR$ cost of funds increase of 290 bps, although still below the 520 bp increase in the average Badlar rate in the quarter, and

  1. a 67 bp decline in the average yield of the investment portfolio (including Repo transactions).

4

NII

NIFFI & Exchange Rate Differences

4.235,9

1.084,5

1.497,8

465,5

5.409,4

7.975,0

8.722,7

8.389,4

5.627,7

2.132,9

3Q19

4Q19

1Q20

2Q20

3Q20

Note: In 3Q20, 2Q20, 1Q20 and 4Q19 AR$5.1 billion, AR$4.4 billion, AR$3.9 billion and AR$1.5 billion yield from investments in Central Bank securities has been recorded in NII since the Company changed in October 2019, the classification of these securities into "at Fair value through other comprehensive income". 4Q19 NIFFI account, still recorded AR$1.6 billion of these securities yield before the change in classification was made.

ASSET QUALITY

The total NPL ratio was 4.5% in 3Q20 decreasing by 240 bps YoY and 160 bps QoQ. The QoQ NPL decline was mainly due to the write-off of a commercial loan that was delinquent since 3Q19. 3Q20 continues to benefit from: (i) 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 which was introduced in 1Q20 and was extended until December 31, 2020, and (ii) the relief program ruled by the Central Bank amid the pandemic, allowing debtors to defer their loan payments originally maturing between April 2020 and December 2020, together with the automatic rescheduling of unpaid credit card balances due September 2020.

Loan loss provisions (LLP) totaled AR$2.7 billion in 3Q20, down 5.2% YoY but up 11.6% QoQ. During the quarter the Company further revised its expected loss models to adjust for the current economic outlook and made AR$1 billion in additional Covid-19 specific anticipatory provisions that resulted in increased coverage. These anticipatory provisions made in 3Q20 reflect a further in-depth top down analysis on certain industries that could continue to be highly impacted by the pandemic. As of September 30, 2020, Covid-19 anticipatory provisions amounted to AR$2.5 billion. The YoY decrease reflects the provisioning on certain corporate loans in 3Q19 that had become delinquent during that period.

The Coverage ratio increased to 181.3% from 86.1% in 3Q19 and 127.1% in 2Q20. The increase in coverage starting 1Q20 reflects provisions made in advance of potential deterioration arising from the Covid-19 impacts and the weak macro environment, and benefits from the Central Bank regulatory easing, in

5

place since 1Q20 and from the previously mentioned commercial loan write-off.

As of September 30, 2020, collateralized commercial loans were 45% of total, stable from 44% as of June 30, 2020. As of September 30, 2020, collateralized non-performing commercial loans increased to 78% of total, from 66% as of June 30, 2020 and 55% as of September 30, 2019.

Loan Loss Provisions

Covarege ratio (%)

Loan Loss Provisions (in AR$ million)

Cost of risk (%)

86%

181%

127%

100%

11%

10%

83%

10%

7%

5%

2.872,3 1.385,0 1.793,0 2.439,5 2.723,3

3Q19 4Q19 1Q20 2Q20 3Q20

EXPENSES & EFFICIENCY

Efficiency ratio was 61.0% in 3Q20 improving 320 bps from 3Q19 and 90 bps from 2Q20. QoQ performance was mainly driven by revenue growth in line with inflation while expenses performed slightly below inflation in the quarter.

Personnel Expenses Administrative

D&A

80%

Efficiency Ratio (%)

74%

907,6

64%

62%

61%

530,6

548,5

552,7

512,7

2.497,1

2.198,7

2.063,0

2.457,5

2.232,5

3.768,1

4.948,6

4.040,7

4.011,7

4.166,9

3Q19

4Q19

1Q20

2Q20

3Q20

LIQUIDITY

Loans to deposits ratio of 60.6% compared to 85.8% as of September 30, 2019 and 61.7% as of September 30, 2020. AR$ loans to AR$ deposits ratio was 57.4% declining from 82.2% as of September 30, 2019 and remained stable compared to 57.2% as of June 30, 2020. US$ loans to US$ deposits ratio was 80.0% compared to 95.8% as of September 30, 2019 and 89.6% as of June 30, 2020.

Total Deposits measured in comparable AR$ units at the end of 3Q20 increased 22.1% YoY but decreased 2.7% QoQ to AR$170.3 billion. AR$ deposits rose 43.7% YoY and declined 1.6% QoQ. QoQ performance reflects seasonality and higher spending due the gradual relaxation of social distancing protocols. 3Q20 Average AR$ Deposits were up 10.4% or AR$13.6 bn QoQ. Foreign currency deposits (measured in US$) declined 37.1% YoY and 9.6% QoQ, following industry trend.

ASSETS

Loans measured in comparable AR$ units at the end of 3Q20 declined 14.0% YoY and 4.8% QoQ to AR$102.8 billion. The AR$ Loan portfolio remained flat (+0.4%) YoY but decreased 1.2% QoQ on soft demand and a cautious approach to the macroeconomic environment. FX loans, measured in US$, declined 47.5% YoY and 19.3% QoQ, following industry trends since August 2019.

Total Assets were up 6.5% YoY, but down 3.2% QoQ, to AR$236.2 billion as of September 30, 2020. QoQ performance reflects the above-mentioned decrease in loans along with lower holdings of Central Bank Leliqs following regulations and the decline in spreads. 3Q20 Average AR$ Assets were up 9.5% or AR$17.5 bn QoQ.

CAPITAL

Common Equity Tier 1 Ratio as of September 30, 2020, improved to 14.0%, compared to 13.4% reported as of June 30, 2020 and 11.8% reported as of September 30, 2019. The YoY increase includes the initial IAS29 adjustment on non-monetaryassets, together with Central Bank regulatory easing on excess provisions amid the Covid-19pandemic that allows banks to consider as Tier 1 Common Equity, the difference between the expected loss provisions recorded following IFRS9, and the balance of provisions as of November 30, 2019 under the previous accounting framework.

6

Financial Highlights & Key Ratios

Information stated in terms of the measuring unit current at the end of the reporting period, including the corresponding financial figures for previous periods provided for comparative purposes.

Highlights

(In millions of Ps. stated in terms of the measuring unit current at the end of

%

the reporting period)

Change

INCOME STATEMENT

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

9M20

9M19

% Chg.

Net Interest Income

NIFFI & Exchange Rate Differences

Net Financial Income

LELIQ Result from exposure to changes in the purchasing power of the currency

Net Service Fee Income (excluding income from insurance activities)

Income from Insurance activities

RECPPC

Loan Loss Provisions

Personnel & Administrative Expenses

Profit before income tax

Attributable Net income

Attributable Comprehensive income Earnings per Share (AR$)

Earnings per ADRs (AR$)

Average Outstanding Shares (in millions)

BALANCE SHEET

Total Assets

Average Assets1

Total Loans & Leasing2

Total Deposits

Attributable

Shareholders' Equity

Average Attributable

Shareholders' Equity1

8,389.4

8,722.7

7,975.0

5,627.7

2,132.9

-3.8%

293.3%

25,087.1

6,455.8

289%

1,497.8

1,084.5

465.5

4,235.9

5,409.4

38.1%

-72.3%

3,047.9

21,000.7

-85%

9,887.3

9,807.2

8,440.5

9,863.7

7,542.3

0.8%

31.1%

28,135.0

27,456.5

2%

-4,378.1

-2,416.7

0.0

0.0

0.0

na

na

-

6,794.8

-

-

1,740.5

1,750.2

1,971.1

1,766.6

1,863.0

-0.6%

-6.6%

5,461.8

6,005.6

-9%

327.0

418.8

366.8

355.3

420.1

-21.9%

-22.2%

1,112.7

1,142.3

-3%

3,529.0

1,822.4

-986.2

-1,449.4

-2,023.5

93.7%

-

4,365.2

-

5,639.5

-177%

-2,723.3

-2,439.5

-1,793.0

-1,385.0

-2,872.3

11.6%

-5.2%

-

6,955.9

-

8,068.6

-14%

6,399.4

6,469.2

6,103.7

7,445.7

5,966.8

-1.1%

7.2%

18,972.3

19,137.2

-1%

871.6

1,274.5

904.1

-699.1

-2,623.4

-31.6%

-

3,050.2

-

2,666.4

-

859.6

1,100.5

514.3

-632.1

-2,339.3

-21.9%

-

2,474.4

-

2,955.1

-

760.7

1,435.2

459.6

-523.6

-2,339.5

-47.0%

-

2,655.5

-

2,957.9

-

1.7

3.1

1.0

-1.1

-5.1

8.3

15.7

5.0

-5.7

-25.6

456.7

456.7

456.7

456.7

456.7

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

236,188.3

243,893.0

223,448.1

182,730.1

221,801.7

-3.2%

6.5%

241,307.8

224,885.4

214,760.7

199,055.2

237,955.7

7.3%

1.4%

227,855.9

232,292.9

-2%

102,787.4

107,957.0

104,627.6

112,695.2

119,576.7

-4.8%

-14.0%

170,259.1

174,970.4

156,557.6

108,847.1

139,435.5

-2.7%

22.1%

31,769.4

31,008.7

30,040.2

29,580.6

30,181.2

2.5%

5.3%

31,383.9

30,674.6

26,766.5

26,239.8

27,839.0

2.3%

12.7%

30,535.1

26,260.5

16%

7

KEY INDICATORS

3Q20

2Q20

1Q20

4Q19

3Q19

9M20

9M19

Profitability & Efficiency

ROAE

11.0%

14.4%

7.7%

-9.6%

-33.6%

10.8%

-15.0%

ROAA

1.4%

2.0%

1.0%

-1.3%

-3.9%

1.6%

-1.7%

Net Interest Margin (NIM)

21.2%

23.5%

22.8%

29.0%

17.3%

22.2%

21.6%

Net Fee Income Ratio

17.3%

18.1%

21.7%

17.7%

23.2%

18.9%

20.7%

Cost / Assets

11.5%

12.5%

12.3%

16.8%

11.0%

12.0%

11.9%

Efficiency Ratio

61.0%

61.9%

64.2%

79.6%

74.2%

62.3%

65.2%

Liquidity & Capital

Total Loans to Total Deposits

60.6%

61.7%

66.8%

103.5%

85.8%

AR$ Loans to AR$ Deposits

57.4%

57.2%

62.3%

107.7%

82.2%

US$ Loans to US$ Deposits

80.0%

89.6%

88.3%

91.9%

95.8%

Liquidity Coverage Ratio (LCR)3

123.6%

126.1%

130.2%

150.3%

140.2%

Total Equity / Total Assets

13.5%

12.7%

13.4%

14.8%

12.6%

Capital / Risk weighted assets 4

14.7%

14.2%

14.0%

12.1%

12.8%

Tier1 Capital / Risk weighted assets 5

14.0%

13.4%

13.3%

11.3%

11.8%

Risk Weighted Assets / Total Assets

68.9%

68.2%

69.8%

89.2%

76.7%

Asset Quality

NPL Ratio

4.5%

6.1%

6.7%

7.4%

6.9%

Allowances as a % of Total Loans

8.1%

7.7%

6.6%

6.3%

6.0%

Coverage Ratio

181.3%

127.1%

99.6%

83.0%

86.1%

Cost of Risk

11.2%

10.1%

7.2%

5.1%

9.9%

9.4%

8.6%

MACROECONOMIC RATIOS

Retail Price Index (%)6

7.7%

5.4%

7.8%

11.7%

12.5%

36.6%

53.5%

Avg. Retail Price Index (%)

39.3%

43.9%

50.5%

52.1%

54.1%

46.6%

52.4%

UVA (var)

6.3%

6.7%

9.5%

14.3%

8.5%

41.8%

54.6%

Pesos/US$ Exchange Rate

76.18

70.46

64.47

59.90

57.56

65.57

42.78

Badlar Interest Rate (eop)

29.7%

29.7%

27.6%

39.4%

58.9%

29.7%

58.9%

Badlar Interest Rate (avg)

29.6%

24.4%

33.2%

48.1%

54.7%

33.8%

49.4%

Monetary Policy Rate (eop)

38.0%

38.0%

38.0%

55.0%

78.4%

38.0%

78.4%

Monetary Policy Rate (avg)

38.0%

38.0%

45.6%

65.3%

71.5%

46.6%

65.5%

OPERATING DATA

Active Customers (in millions)7

1.9

1.9

1.8

1.8

1.8

Bank Branches

198

198

198

198

198

Other Acces Points

104

104

118

118

119

Employees8

5,005

4,976

4,960

5,019

5,134

  1. Average Assets and average Shareholder´s Equity calculated on a daily basis
  2. Total Portfolio: Loans and Leasing before Allowances.
  3. This ratio includes the liquidity held at the holding company level.
  4. Regulatory capital divided by risk weighted assets taking into account operational and market risk. Since January 1, 2020, financial institutions which are controlled by non-financial institutions (as in Supervielle's case in relation with the Bank) shall comply with the Minimum Capital requirements, among others on a consolidated basis comprising the non- financial holding and all its subsidiaries (excluding insurance companies and non-financial subsidiaries). As of June 30, 2020, the calculation methodology has not been released and therefore the Company continues to calculate this ratio adding to the Bank's regulatory capital ratio, the amount of liquidity held at the holding company level. In previous quarters this ratio was named as Proforma Ratio.
  5. Tier 1 capital divided by risk weighted assets taking into account operational and market risk. Applies same disclosure as in footnote 4.
  6. Source: INDEC.
  7. These figures do not include new customers adopted to receive governmental familiar emergency plan ("IFE") due to the Covid19 pandemic effects in their income (135,968 as of June 30, 2020 and 276,386 as of September 30, 2020).
  8. These figures do not include temporary employees.

8

Managerial Information. Non-restated figures

The 3Q20 management information included hereunder is not derived directly from accounting records as it is an estimate of non-restated figures excluding the impact of IAS 29 effective January 1, 2020. This information is only provided for comparative purposes with figures disclosed in previous years before the adoption of rule IAS 29.

Highlights - Non-restated figures

(In millions of Argentine Ps.)

% Change

INCOME STATEMENT

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

9M20

9M19

% Chg.

Net Interest Income

8,397.7

8,109.2

6,840.0

4,412.3

1,523.8

3.6%

451.1%

23,347.0

4,112.7

467.7%

NIFFI & Exchange Rate Differences

1,290.8

941.8

397.4

3,245.5

3,754.4

37.1%

-65.6%

2,630.1

13,203.4

-80.1%

Net Financial Income

9,688.6

9,051.1

7,237.5

7,657.8

5,278.1

7.0%

83.6%

25,977.1

17,316.1

50.0%

Net Service Fee Income (excluding

1,685.3

1,583.2

1,692.5

1,348.7

1,348.5

6.4%

25.0%

4,961.0

3,818.0

29.9%

income from insurance activities)

Income from Insurance activities

293.9

355.4

289.6

266.8

258.1

-17.3%

13.8%

938.9

679.3

38.2%

Loan Loss Provisions

-2,650.7

-2,205.3

-1,541.8-1,368.1-2,007.4

20.2%

32.0%

- 6,397.8

- 5,111.1

25.2%

Personnel & Administrative Expenses

6,226.4

5,884.0

5,231.1

5,690.4

4,265.4

5.8%

46.0%

17,341.5

12,258.9

41.5%

Profit before income tax

1,959.1

1,992.0

1,780.4

1,029.8

-116.5

-1.7%

na

5,731.5

2,198.2

160.7%

Attributable Net income

1,927.8

1,923.5

1,465.7

1,466.2

301.0

0.2%

540.4%

5,316.9

2,791.7

90.5%

Attributable Comprehensive income

2,221.3

1,875.0

1,417.2

1,570.3

732.1

18.5%

203.4%

5,513.5

3,256.7

69.3%

Earnings per Share (AR$)

4.9

4.8

3.2

3.2

0.7

12.07

7.13

Earnings per ADRs (AR$)

24.3

24.1

16.0

16.1

3.3

60.36

35.65

Average Outstanding Shares (in

456.7

456.7

456.7

456.7

456.7

456.72

456.72

millions)

BALANCE SHEET

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

Total Assets

231,155.9

222,401.1

192,679.5

146,493.1

159,815.8

3.9%

44.6%

Average Assets1

227,006.7

207,540.3

169,586.3

156,563.6

165,375.6

9.4%

37.3%

Total Loans & Leasing

102,787.4

100,280.6

92,230.8

92,154.9

87,524.6

2.5%

17.4%

Total Deposits

170,259.1

158,604.2

135,795.5

89,008.2

102,060.3

7.3%

66.8%

Attributable Shareholders' Equity

26,770.0

24,876.9

22,685.2

21,680.0

20,109.7

7.6%

33.1%

Average Attributable Shareholders'

25,822.2

23,781.1

22,182.6

20,638.5

19,347.7

8.6%

33.5%

Equity1

PROFITABILITY

3Q20

2Q20

1Q20

4Q19

3Q19

9M20

9M19

ROAE

29.9%

32.4%

26.4%

28.4%

6.2%

29.6%

20.4%

ROAA

3.4%

3.7%

3.5%

3.7%

0.7%

3.5%

2.3%

3Q20 Earnings

Call Dial-In Information

Date:Friday November 20, 2020

Time:9:00 AM ET; 11:00 AM (Buenos Aires Time)

Dial-inNumbers: 1-877-407-0789 (U.S. and Canada), 1-201-689-8562 (International), 0- 800-444-6247 (Argentina), or 0800-756-3429 (U.K.)

Webcast:http://public.viavid.com/index.php?id=142392

Replay:From Friday November 20, 2020, 12:00 PM ET through Friday December 4, 2020, 11:59 PM ET. Dial-in number: +1-844-512-2921 (U.S./Canada) or +1-412-317-6671 (international). Pin number: 13713068

9

Supervielle Measures in the ongoing Covid-19 pandemic environment

In response to the Covid-19 pandemic, countries around the world, including Argentina, have adopted extraordinary measures to contain the spread of the virus. As a result of these measures imposed, the different countries have shown an immediate impact on their economies with a rapid drop of the production and activity indicators and adversely affecting the Company's businesses. Branches were required to remain closed during the second half of March 2020 and have subsequently only gradually been allowed to open with limited operations. To-date, banks are permitted to open to provide limited services to clients with prior appointments, provided that certain health and safety requirements set forth by the Central Bank are complied with. Details with regard to the Argentine government's social aid, monetary and fiscal measures to mitigate the economic impact of the Covid- 19 pandemic which also impact the Company's operations, can be found on page 56.

Since early March 2020, Supervielle's management has been actively monitoring the evolution of the ongoing Covid-19 pandemic and the impact it may have on the business. Measures have been taken rapidly as the situation continued to evolve, focusing mainly on protecting the Company's employees and customers and ensuring the continuity of business operations.

Grupo Supervielle will continue focusing on improving efficiency while keeping its differentiated strategy to capture growth, remaining flexible under this particularly volatile and challenging scenario. The ultimate impact of the pandemic on its business, results of operations and financial condition remains highly uncertain and will depend on future developments outside of the Company control, including the intensity and duration of the pandemic and the government measures taken in order to contain the virus or mitigate the economic impact.

Review of Consolidated Results

Supervielle offers financial products and services mainly through Banco Supervielle (the "Bank"), a universal commercial bank, and IUDÚ Compañía Financiera ("IUDÚ") -formerly Cordial Compañia Financiera-, a consumer finance company which is consolidated with the Bank's operations. The Bank and IUDÚ, Supervielle's main assets, comprised 92.7% and 3.5% respectively of total assets as of September 30, 2020. Supervielle also operates Tarjeta Automática, a consumer finance company with a distribution network mainly in southern Argentina; MILA, a car financing company; Espacio Cordial de Servicios, a retail company cross-selling related non-financial products and services; Supervielle Seguros, an insurance company; Supervielle Productores Asesores de Seguros, an insurance broker company; Supervielle Asset Management; InvertirOnline.com, an online broker; Bolsillo Digital, a company providing payment solutions to retail businesses with Mobile POS and mobile wallet products through its brand IUDÚ Pago; and Futuros del Sur (in the process of being renamed Supervielle Agente de Negociación), a brokerage firm targeting institutional and corporate customers. Since October 2020, Supervielle also operates through Easy Cambio S.A., a Foreign Exchange Broker.

10

Comprehensive Income & Profitability. Figures as reported (stated in terms of the measuring unit current at the end of September 30, 2020) compared to non-restated for inflation figures.

YoY comparison:

Income Statement

3Q20 as

3Q19 as

IAS 29

3Q20 non

3Q19

% Var

% Var

non

non

Real vs. Non restated (In millions of

reported

reported

3Q20

restated

restated

restated

Argentine Ps.)

Net interest income

8.389,4

2.132,9

293,3%

-8,3

8.397,7

1.523,8

451,1%

NIFFI

&

Exchange

Rate

1.497,8

5.409,4

-72,3%

207,0

1.290,8

3.754,4

-65,6%

Differences

Net Financial Income

9.887,3

7.542,3

31,1%

198,7

9.688,6

5.278,1

83,6%

LELIQ Result from exposure to

changes

in

the purchasing

-4.378,1

0,0

-

-4.378,1

power of the currency

Net Service Fee Income

2.067,6

2.283,2

-9,4%

88,4

1.979,2

1.606,6

23,2%

Result from exposure to changes

in the purchasing power of the

3.529,0

-2.023,5

-274,4%

3.529,0

currency

Loan loss provisions

-2.723,3

-2.872,3

-5,2%

-72,7

-2.650,7

-2.007,4

32,0%

Net Operating Income

9.282,1

5.677,4

63,5%

-627,3

9.909,4

5.600,3

76,9%

Personnel & administrative expenses

6.399,4

5.966,8

7,2%

176,3

6.223,1

4.265,4

45,9%

Depreciation & Amortization

548,5

552,7

-0,8%

219,4

329,1

231,2

42,4%

Other expenses, net

563,0

1.033,6

-45,5%

60,8

502,2

497,3

1,0%

Profit before income tax

871,6

-2.623,4

-133%

-1.091,0

1.962,6

-116,5

-1784,0%

Income tax expense

11,5

-282,1

-104%

-18,8

30,3

-417,8

-107,3%

Attributable net income

859,6

-2.339,3

-137%

-1.070,6

1.930,3

301,0

541,2%

Attributable

comprehensive

760,7

-2.339,5

-133%

-1.463,2

2.223,8

732,1

203,8%

income

QoQ comparison:

Income Statement

3Q20 as

2Q20 as

IAS 29

3Q20 non

2Q20 non

% Var

Real vs. Non Restated (In millions of

% Var

non

reported

reported

3Q20

restated

restated

restated

Argentine Ps.)

Net interest income

8.389,4

8.722,7

-3,8%

-8,3

8.397,7

8.109,2

3,6%

NIFFI & Exchange Rate Differences

1.497,8

1.084,5

38,1%

207,0

1.290,8

941,8

37,1%

Net Financial Income

9.887,3

9.807,2

0,8%

198,7

9.688,6

9.051,1

7,0%

LELIQ Result from exposure to

changes in the purchasing power of

-4.378,1

-2.416,7

-

-4.378,1

the currency

Net Service Fee Income

2.067,6

2.169,0

-4,7%

88,4

1.979,2

1.938,6

2,1%

Result from exposure to changes in

the purchasing power of the

3.529,0

1.822,4

93,7%

3.529,0

currency

Loan loss provisions

-2.723,3

-2.439,5

11,6%

-72,7

-2.650,7

-2.205,3

20,2%

Net Operating Income

9.282,1

9.879,6

-6,0%

-627,3

9.909,4

9.628,3

2,9%

Personnel & administrative expenses

6.399,4

6.469,2

-1,1%

176,3

6.223,1

5.884,0

5,8%

Depreciation & Amortization

548,5

530,6

3,4%

219,4

329,1

290,8

13,2%

Other expenses, net

563,0

668,1

-15,7%

60,8

502,2

617,6

-18,7%

Profit before income tax

871,6

1.274,5

-32%

-1.091,0

1.962,6

1.992,0

-1,5%

Income tax expense

11,5

173,3

-93%

-18,8

30,3

67,4

-55,0%

Attributable net income

859,6

1.100,5

-22%

-1.070,6

1.930,3

1.923,5

0,4%

Attributable comprehensive income

760,7

1.435,2

-47%

-1.463,2

2.223,8

1.875,0

18,6%

11

The results restated for inflation corresponding to 2Q20 and 3Q19 contain the effect of three and twelve-month inflation as of September 2020, which reached 7.7% and 36.6% respectively.

Attributable net income was AR$859.6 million in 3Q20, compared to a net loss of AR$2.3 billion in 3Q19 and a net gain of AR$1.1 billion in 2Q20. Excluding the impact of IAS29, Net Income was AR$1.9 billion, increasing 540.4% YoY and remaining flat from 2Q20.

Attributable comprehensive income was AR$760.7 million in 3Q20, compared to a net loss of AR$2.3 billion in 3Q19 and a net gain of AR$1.4 billion in 2Q20. Excluding the impact of IAS29, Attributable comprehensive income was AR$2.2 billion, increasing 203.4% YoY and 18.6% from 2Q20.

Comprehensive Income & Profitability

Income Statement

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

Consolidated Income Statement Data NIIF:

Interest income

Interest expenses

Net interest income Net income from financial instruments at fair value through profit or loss

Result from recognition of assets measured at amortized cost Exchange rate difference on gold and foreign currency

NIFFI & Exchange Rate

Differences

Net Financial Income

LELIQ Result from exposure to changes in the purchasing power of the currency

Fee income Fee expenses

Income from insurance activities

Net Service Fee Income

Subtotal

Result from exposure to changes in the purchasing power of the currency Other operating income Loan loss provisions

Net Operating Income Personnel expenses Administration expenses Depreciations and impairment of assets

Other operating expenses

Operating income

Profit before income tax

Income tax

Net income for the year

Net income for the year attributable to parent companyNet income for the year attributable to non-controllinginterest

Other Comprehensive Income, net of tax

Comprehensive income Attributable to owners of the

parent company Attributable to non-controllinginterests

ROAE

ROAA

% Change

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

14,867.0

13,742.4

14,817.1

14,142.2

13,220.3

8.2%

12.5%

-6,477.6

-5,019.7

-6,842.1

-8,514.5

-11,087.5

29.0%

-41.6%

8,389.4

8,722.7

7,975.0

5,627.7

2,132.9

-3.8%

293.3%

1,067.8

704.0

345.8

3,616.4

6,301.0

51.7%

-83.1%

169.2

58.5

13.2

0.0

0.0

189.2%

na

260.8

322.1

106.5

619.5

-891.6

-19.0%

-129.3%

1,497.8

1,084.5

465.5

4,235.9

5,409.4

38.1%

-72.3%

9,887.3

9,807.2

8,440.5

9,863.7

7,542.3

0.8%

31.1%

-4,378.1

-2,416.7

0.0

0.0

0.0

81.2%

na

2,555.1

2,462.3

2,730.5

2,508.7

2,620.5

3.8%

-2.5%

-814.6

-712.1

-759.4

-742.1

-757.4

14.4%

7.5%

327.0

418.8

366.8

355.3

420.1

-21.9%

-22.2%

2,067.6

2,169.0

2,337.9

2,121.9

2,283.2

-4.7%

-9.4%

7,576.7

9,559.5

10,778.4

11,985.6

9,825.4

-20.7%

-22.9%

3,529.0

1,822.4

-986.2

-1,449.4

-2,023.5

93.7%

-274.4%

899.6

937.2

929.2

893.3

747.7

-4.0%

20.3%

-2,723.3

-2,439.5

-1,793.0

-1,385.0

-2,872.3

11.6%

-5.2%

9,282.1

9,879.6

8,928.4

10,044.5

5,677.4

-6.0%

63.5%

4,166.9

4,011.7

4,040.7

4,948.6

3,768.1

3.9%

10.6%

2,232.5

2,457.5

2,063.0

2,497.1

2,198.7

-9.2%

1.5%

548.5

530.6

512.7

907.6

552.7

3.4%

-0.8%

1,462.6

1,605.3

1,408.0

2,390.3

1,781.3

-8.9%

-17.9%

871.6

1,274.5

904.1

-699.1

-2,623.4

-31.6%

-

871.6

1,274.5

904.1

-699.1

-2,623.4

-31.6%

-

11.5

173.3

389.4

-66.4

-282.1

-93.4%

-

860.1

1,101.2

514.7

-632.7

-2,341.3

-21.9%

-

859.6

1,100.5

514.3

-632.1

-2,339.3

-21.9%

-

0.5

0.7

0.4

-0.6

-1.9

-25.1%

-

-99.1

335.0

-54.7

108.5

-0.2

-129.6%

-

760.6

1,435.5

459.6

-523.6

-2,339.5

-47.0%

-

760.7

1,435.2

459.6

-523.6

-2,339.5

-47.0%

-

0.4

1.0

0.4

-0.6

-1.9

-60.1%

-

11.0%

14.4%

7.7%

-9.6%

-33.6%

1.4%

2.0%

1.0%

-1.3%

-3.9%

12

Profit before income tax of AR$871.6 million in 3Q20 compared to a loss of AR$2.6 billion in 3Q19 and a gain of AR$1.3 billion in 2Q20. Excluding the impact of IAS29, Profit before income tax, would have been AR$2.0 billion in 3Q20 and in 2Q20, and AR$116.5 million loss in 3Q19.

QoQ performance was explained by: i) higher LLPs as the Company continued to revise its expected loss models and made additional Covid-19 specific anticipatory provisions that resulted in increased coverage, (ii) a higher impact from inflation adjustment reflecting accelerated inflation in 3Q20 compared to 2Q20, and (iii) a decrease in income from insurance activity when comparing with a high previous quarter. These were partially offset by:

  1. a slightly higher financial income resulting from higher volumes in Central Bank Securities investments, despite the increase in cost of funds, and higher trading gains, and ii) lower administrative expenses following the Company's cost control policy. During the previous quarter the Company recorded specific expenses related to Covid-19 protocols across its branch network aimed at protecting its employees and customers and to ensure business continuity, and in connection with initiatives related to the acceleration of the digital transformation process. AR$ cost of funding increased 290 bps following the rise in the average badlar market rate in the quarter.

Attributable Net income of AR$859.6 million in 3Q20, compared to a loss of AR$2.3 billion in 3Q19 and a gain of AR$ 1.1 billion in 2Q20. Excluding the impact of IAS29, Attributable Net income would have been AR$1.9 billion in 3Q20 and in 2Q20 and AR$301.0 million in 3Q19. 3Q19 had been impacted by an AR$2.0 billion loss reflecting mark to market accounting of short-term AR$ and US$ treasury notes following the debt reprofiling announced by the Argentine government.

Attributable Comprehensive Income of AR$ 760.7 million in 3Q20 compared to a loss of AR$2.3 billion in 3Q19 and a gain of AR$1.4 billion in 2Q20. Excluding the impact of IAS29, Attributable Comprehensive income would have been AR$2.2 billion in 3Q20 increasing 203.8% YoY and 18.6% QoQ.

Other Comprehensive Loss in 3Q20 of AR$99.1 million compared to AR$0.2 million loss in 3Q19 and AR$335.0 million gain in 2Q20. During 3Q20, certain Boncer holdings classified as available for sale were sold, and following regulation the cumulative gain or loss previously recognized in Other Comprehensive Income was reclassified to profit or loss under the line item "Result from recognition of assets measured at amortized cost".

This line item also reflects the result from the changes in the purchasing power of the currency on these securities classified as available for sale following Central Bank regulation.

ROAE of 11.0% in 3Q20 compared with -33.6% in 3Q19 and 14.4% in 2Q20. ROAE in 3Q20 benefitted from a deceleration in the pace of inflation which reached 7.7% in the quarter when compared to inflation of 12.5% in 3Q19. By contrast, ROAE was negatively impacted when compared to 2Q20 which experienced lower inflation levels of 5.5%. Excluding the impact of IAS29, ROAE would have been 29.9% in 3Q20 compared to 6.2% in 3Q19 and 32.4% in 2Q20.

ROAA of 1.4% in 3Q20 compared to -3.9% in 3Q19 and 2.0% in 2Q20. Excluding the impact of IAS29, ROAA would have been 3.4% in 3Q20 compared to 0.7% in 3Q19 and 3.7% in 2Q20.

Comprehensive Income & Profitability Breakdown

Excluding the Consumer Finance lending business, 3Q20 and 2Q20 ROAE reached 14.7% and 17.9% respectively, above the reported consolidated ROAE of 11.0% and 14.4% respectively in each quarter.

3Q20

2Q20

1Q20

GS (1)

CFL(2)

GS excl.

GS (1)

CFL(2)

GS excl.

GS

CFL

GS excl.

CFL (3)

CFL (3)

CFL

Net Financial Income

16,4%

34,9%

15,7%

17,4%

32,1%

16,8%

15,7%

24,4%

15,3%

/Average Assets**

LLP / Avg. Assets**

4,5%

12,6%

4,2%

4,3%

12,4%

4,0%

3,3%

8,5%

3,1%

ROA**

1,4%

-8,3%

1,8%

2,0%

-5,8%

2,3%

1,0%

-9,0%

1,5%

ROE**

11,0%

-24,2%

14,7%

14,4%

-16,4%

17,9%

7,7%

-29,6%

13,0%

Assets /

7,7

2,9

8,2

7,3

2,8

7,9

8,0

3,3

8,7

Shareholders´equity

  1. refers to Grupo Supervielle
  2. refers to Consumer Finance Lending business (including IUDÚ, Mila and TA)
  3. refers to Grupo Supervielle excluding the Consumer Finance Lending business

**Annualized ratios

13

Consumer Finance lending business performance in 3Q20 and 2Q20 continued to reflect an increase in financial margin driven by higher interest earned on assets, partially offset by an increase in anticipatory loan loss provisions to cope with a potential loan portfolio deterioration once the deferral program ruled by the Central Bank ends on December 31, 2020, and the impact of inflation in each quarter.

Net Financial Income

(Net Interest Income -NII-, Net Income from Financial Instruments -NIFFI- & Exchange Rate Differences on Gold and Foreign Currency)

Net Financial Income of AR$9.9 billion, up 31.1% YoY and almost flat (+0.8%) QoQ. QoQ performance is mainly explained by an increase in interest income from higher volumes invested in Central Bank Securities and Repo transactions, and in trading gains. These were partially offset by a lower AR$ spread as a result of the 290 bp increase in AR$ cost of funds following the increase in market interest rates, and a decline in the average yield on the AR$ loan portfolio reflecting a higher proportion of AR$ commercial loans granted to SMEs at a 24% preferential interest rate. Excluding the impact of IAS29, Net Financial Income, would have been AR$9.7 billion in 3Q20 up 83.6% YoY and 7.0% QoQ.

Net Financial Income

% Change

(In millions of Ps. stated in terms of the

measuring unit current at the end of the

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

reporting period)

Net Interest Income

8,389.4

8,722.7

7,975.0

5,627.7

2,132.9

-3.8%

293.3%

NIFFI & Exchange rate differences

1,497.8

1,084.5

465.5

4,235.9

5,409.4

38.1%

-72.3%

Net Financial Income

9,887.3

9,807.2

8,440.5

9,863.7

7,542.3

0.8%

31.1%

Note: In 3Q20, 2Q20, 1Q20 and 4Q19 AR$5.1 billion, AR$4.4 billion, AR$3.9 billion and AR$1.5 billion yield from investments in Central Bank securities has been recorded in NII since the Company changed in October 2019, the classification of these securities into "at Fair value through other comprehensive income". 4Q19 NIFFI account, still recorded AR$1.6 billion of these securities yield before the change in classification was made.

Net Interest Income was AR$8.4 billion, compared to AR$2.1 billion in 3Q19 and AR$8.7 billion in 2Q20. In the quarter, NII benefitted from: (i) higher investments in Central Bank Securities and Repo transactions, (ii) higher interest earned on Credit Cards, and (ii) higher interest earned on short-term factoring transactions. These were partially offset by the increase in AR$ cost of funds resulting from an increase in market interest rates and by a decline in AR$ Commercial loan portfolio yield due to the increase in loans granted to SMEs at a 24% preferential interest rate.

Moreover, YoY comparisons are impacted by the change in the classification and therefore accounting methodology for all Central Bank Securities and sovereign bonds acquired by the Company since October 2019. In 3Q20, 2Q20, 1Q20 and 4Q19, AR$5.1 billion, AR$4.4 billion, AR$3.9 billion and AR$1.5 billion yield from investments in Central Bank securities has been recorded in NII, respectively, reflecting the Fair value through other comprehensive income accounting methodology applied since October 2019. In quarters before October 2019, when those securities were classified as Held for trading securities, yields from those investments were recorded in NIFFI following the Fair value through profit or loss accounting methodology while deposits to fund those marginal investments were reflected as interest expenses in Net Interest Income.

As of September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, AR$44.0 billion, AR$62.1 billion, AR$46.8 billion and AR$8.8 billion respectively of securities issued by the Central Bank -Leliqs- were classified in the available for sale category, and accordingly valued at fair value through other comprehensive income methodology together with the cost of the higher balance of interest-bearing liabilities raised to fund those investments, both reflected in Net Interest Income.

Below is a breakdown of the securities portfolio held as of September 30, 2020, between securities held for trading purposes, securities held to maturity, and securities available for sale. The accounting methodology is different for each security class.

14

  1. Amortized cost ("Held to maturity"): Assets measured at amortized cost are those held for the purpose of collecting contractual cash flows. Interest income is recognized in net interest margin. Assets in this category include the Company's loan portfolio and certain government (mainly holdings of Bote) and corporate securities. Since January 1, 2020, the reprofiled Letes that the Company had, were changed from Held for trading to this security class, as allowed by the Central Bank through Communication "A" 6847. When changed to this category, the Letes were recorded at their market price as of December 31, 2019, and since then accrued implicit yield, except when their market price decreased below the recorded value. In this security class, if market value is lower than book value, accrual of interests and exchange rate difference must be suspended until the market price reaches the prior level. In May 2020, the Company swapped this Letes for Treasury Bonds in Pesos adjustable by CER (BONCER) and the new Boncer received were classified as Available for sale.
  2. Fair value through other comprehensive income ("Available for sale"): Assets measured at fair value through other comprehensive income are those held for the purpose of both collecting contractual cash flows and selling financial assets. Interest income is recognized in net interest margin in the income statement, while changes in fair value are recognized in other comprehensive income.
  3. Fair value through profit or loss ("Held for trading"): Assets measured at fair value through profit or loss are those held for the purpose of trading financial assets. Changes in fair value are recognized in the "Net income from financial instruments" line item of the income statement. Assets in this category include most government securities (including Letes and Lecaps that were reprofiled in 2019 until the moment they were exchanged for new securities) and securities issued by the Central Bank, other than those classified as amortized cost. As mentioned above, since January 1, 2020, all reprofiled Letes held by the Company, were re-classified to "Held to maturity", from "Held for trading". Additionally, on January 20, 2020, the Company entered into the exchange offered by the Argentine government for some of the reprofiled Lecaps held and received Lebads payable at 6 and 9 months term, which were classified as "Available for sale". Any further price changes in these Lebads were recognized at fair value through other comprehensive income. In May 2020, the Company participated in a voluntary Argentine US$ Treasury notes (LETES) swap for Treasury Bonds in Pesos adjustable by CER (BONCER) which were also classified as "Available for sale". 100% of Supervielle holdings of Letes were swapped for Boncer.

Securities Breakdown1

(In millions of Ps. stated in terms of the measuring unit current at

sep 20

jun 20

mar 20

dec 19

sep 19

the end of the reporting period)

Held for trading

3.864,8

3.730,6

552,6

695,2

43.110,7

Government Securities

3.495,3

3.344,1

211,0

577,3

2.110,3

Securities Issued by the Central Bank

-

-

-

-

40.785,5

Corporate Securities

369,6

386,5

341,5

117,9

214,9

Held to maturity

6.392,0

5.832,0

5.693,4

4.280,6

5.232,4

Government Securities2

6.388,7

5.828,2

5.682,4

4.273,9

5.207,5

Securities Issued by the Central Bank

-

-

-

-

-

Corporate Securities

3,3

3,8

11,1

6,7

24,9

Available for sale

45.415,0

63.752,6

47.244,7

8.787,3

12,0

Government Securities

1.444,8

1.640,4

412,8

-

-

Securities Issued by the Central Bank

43.961,3

62.102,8

46.821,9

8.769,5

-

Corporate Securities

9,0

9,3

10,0

17,8

12,0

Total

55.671,8

73.315,2

53.490,7

13.763,2

48.355,0

Securities Issued by the Central Bank in Guarantee (Held to

-

4.801,5

-

-

-

maturity)

AR$ Gov Sec, in Guarantee3

999,6

US$ Gov Sec, in Guarantee

-

353,8

1.606,9

1.509,2

1.110,0

AR$ Gov Sec.in Time Deposits

-

-

-

70,9

-

Total (incl. US$ Gov Sec. in Guarantee)

56.671,5

78.470,5

55.097,6

15.343,2

49.465,1

  1. Includes securities denominated in AR$ and US$
  2. Includes AR$5.1 billion BOTE 2020 and 2022 and AR$ 334 million of Lebads. On January 20, 2020, the Company entered into the exchange offered by the Government regarding the AR$ (Lecaps) reprofiled notes, receiving Lebads, and classified the Lebads as Available for Sale. On January 1, 2020, the Company changed the Letes held, from the category Held for Trading to Held to maturity.
  3. Boncer in Guarantee

15

Net Income from financial instruments and Exchange rate differences of AR$1.5 billion compared to AR$5.4 billion in 3Q19 and AR$1.1 billion in 2Q20. YoY comparisons were impacted by the abovementioned changes in the classification of Central Bank Securities to the "Available for Sale" category, from the "Held for Trading" security class.

NIFFI & Exchange rate differences on gold and foreign currency

% Change

(In millions of Ps. stated in terms of the

measuring unit current at the end of the reporting

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

period)

Income from:

- Government and corporate securities

998,8

679,9

265,8

2.067,4

-1.424,5

46,9%

-170,1%

- Term Operations

24,5

11,6

44,2

101,2

763,3

112,2%

-96,8%

- Securities issued by the Central Bank

44,5

12,5

35,7

1.,8

6.962,3

257,0%

-99,4%

Subtotal

1.067,8

704,0

345,8

3.616,4

6.301,0

51,7%

-83,1%

Result from recognition of assets measured at amortized cost

Exchange rate differences on gold and foreign currency

169,2

58,5

13,2

0,0

0,0

189,2%

na

260,8 322,1 106,5 619,5 -891,6-19,0%-129,3%

Total

1.497,8

1.084,5

465,5

4.235,9

5.409,4

38,1%

-72,3%

3Q19 loss from government and corporate securities reflected the loss on the US$ short-term treasury notes - Letes- and on the AR$ short-term treasury notes -Lecaps- after the debt reprofiling implemented by the government of President Macri in August 2019. 4Q19 included the price improvement in that period of those reprofiled short-term US$ and AR$ Argentine treasury notes (Letes and Lecaps).

Net Income from US$ denominated operations and securities was AR$486.6 million mainly explained by, trading gains, gains on foreign currency trading across all customers segments, and to a lesser extent due to a slightly long fx position of the Bank´s treasury.

Net Income from US$ denominated

% Chg.

operations and Securities

(In millions of Ps. stated in terms of the

measuring unit current at the end of the

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

reporting period)

Financial Income from US$US$

225.7

195.3

148.6

1,041.0

25.0

15.6%

Operations

NIFFI

225.1

137.4

109.0

1,041.0

25.0

63.9%

US$ Government Securities3

200.6

125.8

64.8

939.7

-738.3

-

Term Operations

24.5

11.6

44.2

101.2

763.3

112.2%

Interest Income

0.6

58.0

39.6

0.0

0.0

-98.9%

US$ Government Securities2

0.6

58.0

39.6

0.0

0.0

-98.9%

Exchange rate differences on gold and

260.8

322.1

106.5

619.5

-891.6

-

foreign currency

Total Income from US$US$

486.6

517.4

255.1

1,660.5

-866.6

-6.0%

Operations1

1. Includes Gains on Trading from Fx Operations, including retail and corporate and institutional customers

  1. Securities Held to Maturity
  2. Securities Held for Trading. Until May, also included US$ Letes.

Net Interest Margin (NIM) of 21.2% was up 400 bps YoY but declined 230 bps QoQ. The QoQ performance reflects lower spreads, including: (i) AR$ cost of funds increased 290 bps, although still below the 520 bp rise in the average Badlar rate in the quarter, and (ii) a 67 bp decline in the average yield of the investment portfolio (including Repo transactions).

The tables below provide further information on NIM breakdown corresponding to the Loan and Investment portfolios, Average Assets and Average Liabilities, as well as interest rates both on assets and liabilities and market rates.

16

NIM Analysis

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY (bps)

(bps)

Total NIM

21.2%

23.5% 22.8% 29.0% 17.3%

(234)

395

AR$ NIM

22.2%

25.4%

26.5%

36.7%

26.0%

(317)

(371)

US$US$ NIM

12.9%

12.6%

5.7%

3.6%

-11.4%

28

2,432

Loan Portfolio

20.8%

22.8% 23.8% 23.3% 19.6%

(204)

112

AR$ NIM

24.9%

28.2%

30.0%

30.4%

25.3%

(333)

(43)

US$US$ NIM

4.2%

4.6%

4.2%

3.9%

6.3%

(49)

(217)

Investment Portfolio

23.8%

25.6% 19.7% 48.6% 21.4%

(179)

246

AR$ NIM

23.1%

25.1%

19.9%

42.3%

28.6%

(201)

(552)

US$US$ NIM

81.4%

44.1%

15.9%

115.6%

-47.4%

3,730

12,889

Average Assets

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY (bps)

(bps)

Total Interest Earning Assets (IEA)

100.0%

100.0%

100.0%

100.0%

100.0%

AR$ (as % of IEA)

88.8%

85.3%

82.3%

76.8%

76.7%

349

1,212

US$ (as % of IEA)

11.2%

14.7%

17.7%

23.2%

23.3%

(349)

(1,212)

Loan Portfolio (as % of IEA)

53.9%

59.8%

68.0%

80.1%

68.8%

(589)

(1,487)

AR$ (as % of Loan Portfolio)

80.2%

77.0%

76.2%

73.2%

70.2%

311

1,000

US$ (as % of Loan Portfolio)

19.8%

23.0%

23.8%

26.8%

29.8%

(311)

(1,000)

Investment Portfolio (as % of IEA)

46.1%

40.2%

32.0%

19.9%

31.2%

589

1,487

AR$ (as % of Investment Portfolio)

98.8%

97.7%

95.3%

91.4%

90.5%

110

825

US$ (as % of Investment Portfolio)

1.2%

2.3%

4.7%

8.6%

9.5%

(110)

(825)

Average Liabilities

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY (bps)

(bps)

Total Interest-Bearing Deposits & Low & Non-

100.0%

100.0%

100.0%

100.0%

100.0%

Interest-Bearing Deposits

AR$

80.7%

79.8%

74.6%

68.1%

65.8%

89

1,483

US$

19.3%

20.2%

25.4%

31.9%

34.2%

(89)

(1,483)

Total Interest-Bearing Liabilities

65.8%

63.8%

65.2%

61.5%

63.9%

204

189

AR$

80.6%

79.2%

74.6%

67.4%

72.7%

143

788

US$

19.4%

20.8%

25.4%

32.6%

27.3%

(143)

(788)

Low & Non-Interest-Bearing Deposits

34.2%

36.2%

34.8%

38.5%

36.1%

(204)

(189)

AR$

80.8%

80.9%

74.7%

69.3%

53.7%

(5)

2,714

US$

19.2%

19.1%

25.3%

30.7%

46.3%

5

(2,714)

Interest Rates

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

(bps)

(bps)

Interest earned on Loans

33.6%

33.9%

41.0%

45.5%

46.4%

(28)

(1,281)

AR$

40.1%

41.8%

51.6%

59.8%

62.7%

(163)

(2,255)

US$

7.1%

7.3%

7.2%

6.7%

8.1%

(23)

(102)

Yield on Investment Porfolio

39.1%

39.1%

39.4%

43.0%

55.1%

1

(1,603)

AR$

38.4%

38.7%

41.5%

71.7%

66.0%

(30)

(2,764)

US$

95.5%

53.6%

-2.5%

-261.4%

-47.8%

4,184

14,328

Cost of Funds

14.1%

11.7%

17.6%

21.5%

28.0%

241

(1,389)

AR$

17.1%

14.2%

22.9%

30.7%

41.9%

290

(2,482)

US$

1.7%

1.9%

2.0%

1.9%

1.2%

(17)

52

Market Interest Rates

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

(bps)

(bps)

Monetary Policy Rate (eop)

38.0%

38.0%

38.0%

55.0%

78.4%

-

(4,037)

Monetary Policy Rate (avg)

38.0%

38.0%

45.6%

65.3%

71.5%

-

(3,346)

Badlar Interest Rate (eop)

29.7%

29.7%

27.6%

39.4%

58.9%

-

(2,918)

Badlar Interest Rate (avg)

29.6%

24.4%

33.2%

48.1%

54.7%

520

(2,507)

TM20 (eop)

29.3%

29.8%

27.0%

40.5%

60.9%

(50)

(3,164)

TM20 (avg)

29.3%

23.4%

33.8%

49.2%

57.0%

590

(2,771)

17

The Table below provides further information about Interest-Earning Assets and Interest-Bearing Liabilities.

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

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 & Business Banking Personal Loans Consumer Finance Personal Loans

Corporate Unsecured Loans Retail Banking Credit Card Loans

Consumer Finance Credit Card Loans Receivables from Financial Leases

Total Loans excl. Foreign trade and US$ loans1

Foreign Trade Loans & US$ loans

Total Loans

Securities Issued by the Central Bank in Repo Transaction

Total Interest-Earning Assets

3Q20

2Q20

1Q20

4Q19

3Q19

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

14.985,4

50,2%

11.249,4

48,5%

8.690,2

25,1%

8.591,2

66,1%

12.885,3

-

30,8%

56.183,3

36,1%

47.491,6

36,8%

36.514,7

42,8%

18.106,1

32,0%

37.902,8

84,3%

71.168,7 39,1%58.741,0 39,1% 45.204,9 39,4%26.697,3 43,0%50.788,1 55,1%

186,4

39,5%

296,8

36,5%

273,8

4,8%

446,6

86,4%

913,1

40,5%

5.601,4

30,8%

7.669,8

37,2%

6.723,6

52,7%

7.959,8

61,7%

9.128,1

79,2%

14.648,1

43,0%

10.840,3

39,9%

10.383,7

57,8%

9.965,8

66,5%

11.248,2

78,2%

9.339,0

31,8%

9.454,3

34,4%

9.640,6

40,7%

9.496,8

59,3%

9.770,4

45,3%

1.338,6

44,7%

1.291,4

48,7%

1.424,8

48,4%

1.671,9

47,7%

2.141,7

46,2%

15.216,6

61,9%

15.167,8

66,5%

16.603,9

63,0%

17.903,0

64,5%

21.291,8

68,6%

2.918,2

101,3%

3.306,1

83,5%

3.559,6

80,4%

3.772,2

73,2%

4.376,5

65,2%

16.329,3

25,3%

14.877,9

34,5%

13.168,1

54,5%

13.892,8

66,1%

11.182,5

63,4%

11.583,6

24,0%

10.435,7

15,9%

11.543,5

28,9%

11.632,5

34,7%

11.208,8

40,2%

2.486,3

40,7%

2.492,3

31,9%

2.805,0

38,3%

2.682,3

39,5%

2.668,7

31,5%

3.139,0

18,1%

3.333,8

19,7%

3.630,0

19,2%

4.383,9

23,1%

5.139,5

29,2%

82.786,5 39,3%79.166,1 40,7%79.756,6 49,9%83.807,7 57,2%89.069,3 59,7%

17.771,5

7,1%

20.485,2

7,3%

20.888,9

7,3%

25.198,8

6,6%

31.213,1

8,2%

100.558,0 33,6%99.651,3 33,9% 100.645,6 41,0% 109.006,5 45,5% 120.282,5 46,4%

14.768,7

19,2%

8.234,0

16,8%

2.149,6

43,8%

302,6

67,0%

3.786,5

67,6%

186.495,4 34,5% 166.626,3 34,9% 148.000,1 40,6% 136.006,5 45,1% 174.857,1 49,4%

1. In 3Q20, 2Q20, 1Q20, 4Q19 and 3Q19 include AR$2.2 billion, AR$ 2.4 billion, AR$3.1 billion, AR$4.1 billion and AR$ 4.7 billion, respectively, of US$ loans, mainly credit cards with US$ balances.

18

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

Interest-Bearing Liabilities &

Low & Non-Interest-Bearing

Deposits

Time Deposits

AR$ Time Deposits

FX Time Deposits

Special Checking Accounts

AR$ Special Checking Accounts FX Special Checking Accounts

Borrowings from Other Fin. Inst.

  • Medium-TermNotes Subordinated Loans and Negotiable Obligations
    Total Interest-Bearing Liabilities

Low & Non-Interest-Bearing

Deposits

Savings Accounts

AR$ Savings Accounts

FX Savings Accounts

Checking Accounts

AR$ Checking Accounts

FX Checking Accounts

Total Low & Non-Interest- Bearing Deposits

Total Interest-Bearing Liabilities

  • Low & Non-Interest-Bearing Deposits
    AR$
    FX

3Q20

2Q20

1Q20

4Q19

3Q19

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

Balance

Rate

80.989,5

25,4%

56.066,6

25,0%

55.739,7

34,0%

43.649,2

47,7%

58.353,0

52,6%

75.941,4

27,0%

50.960,9

27,3%

50.779,9

37,2%

39.323,1

52,8%

51.663,4

59,2%

5.048,1

1,4%

5.105,7

1,7%

4.959,8

1,7%

4.326,0

1,8%

6.689,7

1,0%

24.573,7

14,4%

36.883,3

10,4%

25.818,2

16,0%

20.480,5

17,6%

30.235,2

27,4%

17.356,9

20,3%

29.518,1

13,0%

16.563,0

24,8%

8.997,6

39,6%

15.657,6

52,8%

7.216,8

0,3%

7.365,3

0,3%

9.255,2

0,3%

11.482,9

0,4%

14.577,6

0,2%

13.492,5

11,8%

13.284,6

14,5%

16.655,5

22,9%

23.374,7

34,1%

24.844,6

44,2%

1.750,6

8,2%

2.426,7

4,9%

2.449,0

7,2%

2.709,5

4,8%

2.648,8

8,2%

120.806,3

21,4%

108.661,2

18,3%

100.662,4

26,9%

90.213,9

36,1%

116.081,7

43,2%

37.615,2

0,1%

35.214,2

0,1%

31.388,8

0,2%

31.895,1

-3,1%

38.181,1

1,7%

26.887,3

0,1%

24.908,5

0,2%

20.363,9

0,3%

19.660,1

-5,0%

18.208,5

3,6%

10.727,9

10.305,7

11.024,9

12.235,0

19.972,6

25.185,8

26.562,2

22.340,3

24.542,4

27.394,8

23.870,8

25.053,0

19.762,4

19.475,5

16.992,4

1.315,0

1.509,2

2.577,8

5.066,9

10.402,4

62.801,0 61.776,4 53.729,1 56.437,5 65.575,9

183.607,3 14,1% 170.437,6 11,7% 154.391,5 17,6% 146.651,4 21,5% 181.657,6 28,0%

148.128,8 17,1% 135.990,4 14,2% 115.237,1 22,9% 99.924,0 30,7% 119.619,2 41,9%

35.478,5

1,7%

34.,1

1,9%

39.154,4

2,0%

46.727,4

1,9%

62.038,3

1,2%

AR$ Liabilities. Avg. Balance

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

Interest-Bearing Liabilities

Time Deposits

Special Checking Accounts

Borrowings from Other Fin. Inst. & Medium-Term Notes

Subordinated Loans and Negotiable Obligations

Total Interest-Bearing Liabilities

Low & Non-Interest-Bearing Deposits

Savings Accounts

Checking Accounts

Total Low & Non-Interest-Bearing Deposits

Total Interest-Bearing Liabilities & Low & Non- Interest-Bearing Deposits

3Q20

2Q20

3Q19

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Balance

Rate

Balance

Rate

Balance

Rate

75.941,4

27,0%

50.960,9

27,3%

51.663,4

59,2%

17.356,9

20,3%

29.518,1

13,0%

15.657,6

52,8%

4.072,4

30,1%

5.550,0

27,2%

17.097,4

61,9%

-

-

-

-

-

-

97.370,7

25,9%

86.029,0

22,4%

84.418,4

58,6%

26.887,3

0,1%

24.908,5

0,2%

18.208,5

3,6%

23.870,8

25.053,0

16.992,4

50.758,1

0,1%

49.961,5

0,1%

35.200,9

1,8%

148.128,8

17,1%

135.990,4

14,2%

119.619,2

41,9%

19

US$ Liabilities. Average Balance

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

Interest-Bearing Liabilities

Time Deposits

Special Checking Accounts

Borrowings from Other Fin. Inst. & Medium-Term Notes

Subordinated Loans and Negotiable Obligations

Total Interest-Bearing Liabilities

Low & Non-Interest-Bearing Deposits

Savings Accounts

Checking Accounts

Total Low & Non-Interest-Bearing Deposits

Total Interest-Bearing Liabilities & Low & Non- Interest-Bearing Deposits

3Q20

2Q20

3Q19

Avg.

Avg.

Avg.

Avg.

Avg.

Avg.

Balance

Rate

Balance

Rate

Balance

Rate

5.048,1

1,4%

5.105,7

1,7%

6.689,7

1,0%

7.216,8

0,3%

7.365,3

0,3%

14.577,6

0,2%

9.420,1

4,0%

7.734,5

5,4%

7.747,2

5,2%

1.750,6

8,2%

2.426,7

4,9%

2.648,8

8,2%

23.435,6

2,6%

22.632,2

2,9%

31.663,3

2,3%

10.727,88

10.305,74

19.972,60

1.314,99

1.509,20

10.402,40

12.042,87

11.814,94

30.375,00

35.478,52 1,7%34.,14 1,9%62.038,33 1,2%

During 3Q20:

  • Credit Cards: Following Central Bank regulation, the unpaid credit card balances due between September 1 and September 30, 2020, have been automatically refinanced in nine equal consecutive monthly installments beginning after a 3-month grace period.
    As of September 30, 2020, total credit card balances that have been automatically rescheduled in April 2020 and in September 2020 under Central Bank regulations, amounted to AR$3.3 billion. Interest is accrued on a lagged basis.
  • Loans granted to some eligible customer at zero interest began accruing interest received from Fondep in July 2020. The total amount disbursed as of September 30, 2020 amounted to AR$746 million.
  • Average Balance of AR$ Commercial Loans includes AR$9.9 billion loans granted to SMEs at 24% as of the end of September 30, 2020.
  • Investment portfolio benefitted from higher volumes on Leliqs and Repo transactions
  • AR$ Cost of funds was impacted both by the rise in market interest rates and the floor rate on time deposits.

AR$ cost of funds increased 290 bps in the quarter driven by: i) a 358 bp increase in AR$ rate of interest bearing liabilities following market interest rates rise, and ii) a higher proportion of interest bearing liabilities among total liabilities reflecting a 13.2% increase in AR$ Interest Bearing Liabilities average volumes while AR$ Low & Non- Interest Bearing Deposits average volumes increased 1.6%.

US$ cost of funds decreased 20 bps in the quarter following industry trends.

Yield on interest-earning assets includes interest income on loans as well as results from the Company's AR$ and dollar denominated investment portfolio. Yield on interest-bearing liabilities includes interest expenses but it does not include the exchange rate differences and net gains or losses from currency derivatives or from the adjustment to FX fluctuation of the FX liabilities. The yield on interest-bearing liabilities shown on this table for 3Q20 lacks the negative impact of the 8% increase of the FX rate as of September 30, 2020 compared to the FX rate as of June 30, 2020, thus presenting an inaccurate rate. The full impact is seen when also taking into account the Exchange rate differences on gold and foreign currency line in the income statement.

20

Assets & Liabilities. Repricing Dynamics

ASSETS

AR$

Total AR$ Assets

Cash

Cash (without interestrate risk) Government & Corporate Securities

Total AR$ Loans

Promissory Notes

Corporate Unsecured

Loans

Mortgage

Personal Loans

Auto Loans

Credit Cards

Overdraft

Other Loans

Receivable From Financial Leases Other Assets (withoutinterest rate risk)

US$

Total US$ Assets

Cash

Cash (without interestrate risk) Government & Corporate Securities

Total US$ Loans Receivable From Financial Leases Other Assets (withoutinterest rate risk)

LIABILITIES

AR$

Total AR$ LiabilitiesDeposits

Private Sector

Deposits

Checking Accounts (without interest rate risk)

Special Checking

Accounts

Time Deposits

Other Time Deposits Public Sector DepositsOther Sources of funding

Other Liabilities (without interest rate risk)

US$

Total US$ LiabilitiesDeposits

Private Sector

Deposits

Checking Accounts (without interest rate risk)

Special Checking

Accounts

Time Deposits

Public Sector DepositsOther Sources of funding Subordinated Negotiable Obligations

21

sep-20

jun-20

mar-20

dec-19

sep-19

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Repricing

total AR$

Repricing

total AR$

Repricing

total AR$

Repricing

total AR$

Repricing

total AR$

(days)

Assets

(days)

Assets

(days)

Assets

(days)

Assets

(days)

Assets

153

140

134

167

150

1

0%

1

1%

1

3

1

6%

8%

16%

16%

8%

129

29%

72

38%

39

31%

104

11%

57

31%

240

38%

237

37%

215

40%

184

59%

217

47%

115

8%

145

7%

30

6%

50

9%

70

6%

143

5%

157

5%

140

6%

100

10%

135

6%

30

5%

30

5%

30

6%

30

8%

30

6%

608

9%

578

9%

538

11%

475

15%

516

14%

367

1%

360

1%

367

1%

245

1%

260

1%

98

8%

255

2%

121

8%

110

12%

98

9%

20

2%

98

7%

19

4%

18

5%

21

5%

84

2%

50

3%

75

2%

58

2%

67

2%

345

1%

369

1%

379

1%

371

1%

405

2%

1%

9%

12%

9%

5%

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Repricing

total US$

Repricing

total US$

Repricing

total US$

Repricing

total US$

Repricing

total US$

(days)

Assets

(days)

Assets

(days)

Assets

(days)

Assets

(days)

Assets

339

310

261

278

254

1

12%

1

13%

1

15%

3

16%

1

17%

0

31%

27%

20%

21%

17%

7.559

1%

1%

1

0%

28

1%

44

2%

339

42%

268

48%

322

51%

343

50%

306

55%

548

5%

544

4%

583

5%

599

5%

657

5%

2%

2%

6%

5%

3%

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Repricing

total US$

Repricing

total US$

Repricing

total US$

Repricing

total US$

Repricing

total US$

(days)

Liabilities

(days)

Liabilities

(days)

Liabilities

(days)

Liabilities

(days)

Liabilities

55

53

35

67

49

53

87%

51

87%

29

86%

42

78%

34

79%

55

83%

52

85%

29

83%

42

74%

32

75%

29%

34%

34%

43%

32%

1

12%

1

15%

1

13%

2

1%

1

10%

32

23%

35

22%

27

29%

31

25%

25

31%

114

19%

132

14%

93

7%

1

0%

17

2%

34

3%

42

4%

78

4%

74

5%

88

4%

90

6%

187

9%

175

7%

5%

5%

5%

6%

4%

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Avg.

% of

Repricing

total US$

Repricing

total US$

Repricing

total US$

Repricing

total US$

Repricing

total US$

(days)

Liabilities

(days)

Liabilities

(days)

Liabilities

(days)

Liabilities

(days)

Liabilities

97

70

66

75

81

20

63%

20

60%

20

66%

13

67%

12

68%

20

61%

20

57%

20

62%

13

61%

12

58%

0

29%

0

27%

27%

29%

26%

1

18%

1

18%

1

22%

3

23%

1

23%

43

14%

51

12%

53

13%

38

9%

39

9%

0

2%

34

3%

66

4%

22

6%

21

10%

3%

27%

2%

2%

2%

414

3%

221

7%

313

5%

404

6%

495

5%

As of September 30, 2020, AR$ liabilities repriced on average in 55 days compared to 53 days as of the close of the previous quarter. Portfolio repricing dynamics as of September 30, 2020 show that AR$ total Assets are fully repriced in 153 days, and AR$ loans are fully repriced in an average term of approximately 240 days.

Interest Income

Interest income rose 12.5% YoY to AR$14.9 billion in 3Q20, and 8.2% QoQ. 3Q20, 2Q20 and 1Q20 include AR$5.1 billion, AR$4.4 billion and AR$3.9 billion yield, respectively, from investments in Central Bank securities.

Interest Income

% Change

(In millions of Ps. stated in terms of the

measuring unit current at the end of the

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

reporting period)

Interest on/from:

-

Cash and Due from banks

0.3

1.6

0.7

11.2

0.2

-84.0%

1.9%

-

Loans to the financial sector

18.4

27.0

3.3

96.5

89.3

-32.0%

-79.4%

-

Overdrafts

431.4

712.4

885.7

1,228.5

1,611.7

-39.4%

-73.2%

-

Promissory notes

1,574.6

1,082.2

1,500.8

1,657.3

1,943.6

45.5%

-19.0%

-

Mortgage loans

742.3

812.8

980.2

1,407.5

944.7

-8.7%

-21.4%

-

Automobile and other secured loans

149.5

157.3

172.5

199.6

216.8

-4.9%

-31.0%

-

Personal loans

3,091.8

3,213.5

3,331.8

3,577.7

3,765.5

-3.8%

-17.9%

-

Corporate unsecured loans

1,030.9

1,281.4

1,795.5

2,297.4

1,509.3

-19.6%

-31.7%

-

Credit cards loans

949.1

613.7

1,102.3

1,274.5

1,338.9

54.6%

-29.1%

-

Foreign trade loans & US loans

313.7

371.8

379.9

416.7

562.5

-15.6%

-44.2%

-

Leases

141.7

164.0

174.2

252.8

317.9

-13.6%

-55.4%

- Other (1)

6,423.4

5,304.7

4,490.2

1,722.5

919.8

21.1%

598.4%

Total

14,867.0

13,742.4

14,817.1

14,142.2

13,220.3

8.2%

12.5%

1. Other include results from securities issued by the Central Bank, results from other Securities recorded as available for sale since 4Q19 and results from Repo Transactions.

The YoY increase in interest income was mainly due to AR$5.1 billion yield from investments in Central Bank securities following the change in classification of these securities in 4Q19 in the category "Available for Sale" from the "Held for Trading" security class. Yield from these holdings until October 2019, were recorded in NIFFI. This was partially offset by a 7.1% decrease in average loan volumes excluding Foreign trade and US$ loans, a 43.1% decrease in average Foreign trade and US$ loans (measured in AR$), and a 2,047 bp decrease in the average interest rate on total loans, excluding foreign trade and US dollar denominated loans, while the average interest rate on foreign trade and US dollar denominated loans decreased 119 bps.

Interest on AR$ loans 2,047 bp decrease YoY was below average market interest rates 2,500 bp decrease.

22

The YoY increase in interest income mainly reflected the following changes:

Yo Y main changes

3Q20

3Q19

Change

AR$ - bps

%

Overdrafts

Avg. Balance

5,601.4

9,128.1

-3,526.7

-38.6%

Yield

30.8%

79.2%

(4,837)

Promissory Notes

Avg. Balance

14,648.1

11,248.2

3,400.0

30.2%

Yield

43.0%

78.2%

(3,519)

Mortgage loans

Avg. Balance

9,339.0

9,770.4

-431.4

-4.4%

Yield

31.8%

45.3%

(1,350)

Personal & Business

Avg. Balance

15,216.6

21,291.8

-6,075.2

-28.5%

Banking Personal Loans

Yield

61.9%

68.6%

(678)

Consumer Finance

Avg. Balance

2,918.2

4,376.5

-1,458.3

-33.3%

Personal Loans

Yield

101.3%

65.2%

3,607

Corporate Unsecured

Avg. Balance

16,329.3

11,182.5

5,146.8

46.0%

Loans

Yield

25.3%

63.4%

(3,815)

Retail Banking Credit

Avg. Balance

11,583.6

11,208.8

374.9

3.3%

Card Loans

Yield

24.0%

40.2%

(1,619)

Consumer Finance

Avg. Balance

2,486.3

2,668.7

-182.4

-6.8%

Credit Card Loans

Yield

40.7%

31.5%

917

Receivables from

Avg. Balance

3,139.0

5,139.5

-2,000.5

-38.9%

Financial Leases

Yield

18.1%

29.2%

(1,118)

Foreign Trade Loans &

Avg. Balance

17,771.5

31,213.1

-13,441.7

-43.1%

US$ loans

Yield

7.1%

8.2%

(118)

Securities Issued by the

Avg. Balance

56,183.3

37,902.8

18,280.5

48.2%

Central Bank 1

Yield

36.1%

84.3%

(4,823)

Other (mainly Repo

Avg. Balance

14,768.7

3,786.5

10,982.1

na

transactions)

Yield

19.2%

67.6%

(4,839)

1. In 3Q20, interest income on investments in Central Bank securities has been recorded in NII following the Fair value through other comprehensive income methodology. By contrast, in 3Q19 those securities were classified as Held for trading securities, and therefore yields from those investments were recorded in NIFFI following the Fair value through profit or loss accounting methodology.

The QoQ increase in interest income was mainly driven by: i) a 18.3% or AR$8.7 billion increase in the average balance of Securities issued by the Central Bank while average yield remained stable, ii) a 79.4% or AR$6.5 billion increase in the average balance of Repo Transactions together with a 238 bp increase in the average yield of this Repo transactions, and iii) a 4.6% increase in the average balance of total loans excluding foreign trade and US dollar denominated loans. These were partially offset by: i) a 13.2% decrease in the average balance of foreign trade & US$ loans combined with a 20 bps decrease in the average rate of these loans, and ii) a 147 bp decrease in the average interest rate on total loans, excluding foreign trade and US dollar denominated loans.

The QoQ performance on interest income reflects the following changes:

QoQ main changes

3Q20

2Q20

Change

AR$ - bps

%

Overdrafts

Avg. Balance

5,601.4

7,669.8

-2,068.4

-27.0%

Yield

30.8%

37.2%

(635)

Promissory Notes

Avg. Balance

14,648.1

10,840.3

3,807.9

35.1%

Yield

43.0%

39.9%

307

Mortgage loans

Avg. Balance

9,339.0

9,454.3

-115.3

-1.2%

Yield

31.8%

34.4%

(260)

Retail Banking Personal

Avg. Balance

15,216.6

15,167.8

48.7

0.3%

Loans

Yield

61.9%

66.5%

(468)

Consumer Finance

Avg. Balance

2,918.2

3,306.1

-387.9

-11.7%

Personal Loans

Yield

101.3%

83.5%

1,772

Corporate Unsecured

Avg. Balance

16,329.3

14,877.9

1,451.4

9.8%

Loans

Yield

25.3%

34.5%

(920)

Retail Banking Credit

Avg. Balance

11,583.6

10,435.7

1,148.0

11.0%

Card Loans

Yield

24.0%

15.9%

813

Consumer Finance

Avg. Balance

2,486.3

2,492.3

-6.0

-0.2%

Credit Card Loans

Yield

40.7%

31.9%

879

Receivables from

Avg. Balance

3,139.0

3,333.8

-194.8

-5.8%

Financial Leases

Yield

18.1%

19.7%

(162)

Foreign Trade Loans &

Avg. Balance

17,771.5

20,485.2

-2,713.7

-13.2%

US$ loans

Yield

7.1%

7.3%

(20)

Securities Issued by the

Avg. Balance

56,183.3

47,491.6

8,691.7

18.3%

Central Bank 1

Yield

36.1%

36.8%

(72)

Other (mainly Repo

Avg. Balance

14,768.7

8,234.0

6,534.7

79.4%

transactions)

Yield

19.2%

16.8%

238

23

1. In 3Q20, interest income on investments in Central Bank securities has been recorded in NII. In 3Q19, those securities were classified as Held for trading securities, and therefore yields from those investments were recorded in NIFFI following the Fair value through profit or loss accounting methodology.

Interest Expenses

Interest expenses decreased 41.6% YoY and increased 29.0% QoQ to AR$6.5 billion in 3Q20.

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

Interest Expenses

%

Change

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

Interest on:

  • Checking and Savings Accounts
  • Special Checking Accounts
  • Time Deposits
  • Other Liabilities from Financial Transactions
  • Financing from the Financial Sector
  • Subordinated Loans and Negotiable Obligations
  • Other

Total

10.1

12.5

18.0

104.6

151.4

-19.6%

-93.4%

884.4

962.0

1,033.9

902.3

1,738.6

-8.1%

-49.1%

5,147.5

3,497.9

4,737.7

5,207.4

6,795.1

47.2%

-24.2%

383.7

424.3

947.1

1,933.1

2,175.9

-9.6%

-82.4%

15.7

57.5

5.7

57.8

88.5

-72.8%

-82.3%

35.7

29.5

44.4

32.7

48.4

21.0%

-26.2%

0.6

36.0

55.3

276.5

89.5

-98.4%

-99.4%

6,477.6

5,019.7

6,842.1

8,514.5

11,087.5

29.0%

-41.6%

The YoY performance in interest expenses mainly reflects a 3,300 bp decline in the interest rate of AR$ interest bearing liabilities, together with a 26.0% decrease in the average balance of US$ bearing liabilities. These effects were partially offset by: i) a 15.3% increase in the average balance of AR$ interest bearing liabilities, ii) a 44.2% increase in the average balance of AR$ low-noninterest-bearing deposits, and iii) a 60.4% decline in the average balance of US$ low-noninterest-bearing deposits following market trends.

24

YoY main changes

3Q20

3Q19

Change

AR$ - bps

%

Avg. Balance

75,941

51,663

24,278

47.0%

AR$ Time Deposits

% of Total Liabilities

41.4%

28.4%

Interest paid

27.0%

59.2%

(3,222)

Avg. Balance

5,048

6,690

(1,642)

-24.5%

FX Time Deposits

% of Total Liabilities

2.7%

3.7%

Interest paid

1.4%

1.0%

40

Avg. Balance

17,357

15,658

1,699

10.9%

AR$ Special Checking Accounts

% of Total Liabilities

9.5%

8.6%

Interest paid

20.3%

52.8%

(3,253)

Avg. Balance

7,217

14,578

(7,361)

-50.5%

FX Special Checking Accounts

% of Total Liabilities

3.9%

8.0%

Interest paid

0.3%

0.2%

8

Avg. Balance

13,493

24,845

(11,352)

-45.7%

Borrowings from Other Fin. Inst. &

% of Total Liabilities

7.3%

13.7%

Medium-Term Notes

Interest paid

11.8%

44.2%

(3,240)

Avg. Balance

1,751

2,649

(898)

-33.9%

Subordinated Loans and Negotiable

% of Total Liabilities

1.0%

1.5%

Obligations

Interest paid

8.2%

8.2%

(7)

Avg. Balance

26,887

18,208

8,679

47.7%

AR$ Savings Accounts

% of Total Liabilities

14.6%

10.0%

Interest paid

0.1%

3.6%

(343)

Avg. Balance

10,728

19,973

(9,245)

-46.3%

FX Savings Accounts

% of Total Liabilities

5.8%

11.0%

Interest paid

0.0%

0.0%

-

Avg. Balance

23,871

16,992

6,878

40.5%

AR$ Checking Accounts

% of Total Liabilities

13.0%

9.4%

Interest paid

0.0%

0.0%

-

Avg. Balance

1,315

10,402

(9,087)

-87.4%

FX Checking Accounts

% of Total Liabilities

0.7%

5.7%

Interest paid

0.0%

0.0%

-

Total Interest-Bearing Liabilities

& Low & Non-Interest-Bearing

Avg. Balance

183,607.3

181,657.6

1,949.8

1.1%

Deposits

Cost of Funds

Interest paid

14.1%

28.0%

(1,387)

25

The QoQ increase in interest expenses was driven by a 290 bp increase in the AR$ average rate paid following the rise in market interest rates together with a 13.2% increase in the AR$ average balance of interest-bearing liabilities. These were partially offset by a 1.6% increase in the AR$ average balance of low-non-interest deposits.

QoQ main changes

3Q20

2Q20

Change

AR$ - bps

%

Avg. Balance

75,941

50,961

24,980

49.0%

AR$ Time Deposits

% of Total Liabilities

41.4%

29.9%

Interest paid

27.0%

27.3%

(26)

Avg. Balance

5,048

5,106

(58)

-1.1%

FX Time Deposits

% of Total Liabilities

2.7%

3.0%

Interest paid

1.4%

1.7%

(30)

Avg. Balance

17,357

29,518

(12,161)

-41.2%

AR$ Special Checking Accounts

% of Total Liabilities

9.5%

17.3%

Interest paid

20.3%

13.0%

731

Avg. Balance

7,217

7,365

(148)

-2.0%

FX Special Checking Accounts

% of Total Liabilities

3.9%

4.3%

Interest paid

0.3%

0.3%

(2)

Avg. Balance

13,493

13,285

208

1.6%

Borrowings from Other Fin. Inst. &

% of Total Liabilities

7.3%

7.8%

Medium-Term Notes

Interest paid

11.8%

14.5%

(267)

Avg. Balance

1,751

2,427

(676)

-27.9%

Subordinated Loans and Negotiable

% of Total Liabilities

1.0%

1.4%

Obligations

Interest paid

8.2%

4.9%

330

Avg. Balance

26,887

24,908

1,979

7.9%

AR$ Savings Accounts

% of Total Liabilities

14.6%

14.6%

Interest paid

0.1%

0.2%

(5)

Avg. Balance

10,728

10,306

422

4.1%

FX Savings Accounts

% of Total Liabilities

5.8%

6.0%

Interest paid

0.0%

0.0%

-

Avg. Balance

23,871

25,053

(1,182)

-4.7%

AR$ Checking Accounts

% of Total Liabilities

13.0%

14.7%

Interest paid

0.0%

0.0%

-

Avg. Balance

1,315

1,509

(194)

-12.9%

FX Checking Accounts

% of Total Liabilities

0.7%

0.9%

Interest paid

0.0%

0.0%

-

Total Interest-Bearing Liabilities &

Low & Non-Interest-Bearing

Avg. Balance

183,607.3

170,437.6

13,169.7

7.7%

Deposits

Cost of Funds

Interest paid

14.1%

11.7%

241

Result from exposure to changes in the purchasing power of the currency

Pursuant to IAS 29, the financial statements of an entity whose functional currency is that of a highly inflationary economy, should be reported measured in terms of the measuring unit current as of the date of the financial statements. All the amounts included in the statement of financial position which are not stated in terms of the measuring unit current as of the date of the financial statements should be restated adjusted applying the general price index. All items in the statement of income should be stated in terms of the measuring unit current as of the date of the financial statements, applying the changes in the general price index occurred from the date on which the revenues and expenses were originally recognized in the financial statements.

Adjustment for inflation in the initial balances has been calculated considering the indexes based on the price indexes published by the Argentine National Institute of Statistics and Census.

26

According to Central Bank regulation (Communication "A" 6849), those financial instruments classified as Available for Sale shall recognize the impact from exposure to changes in the purchasing power of the currency in the Other Comprehensive Income until the financial asset is derecognized or reclassified. When the financial asset is derecognized the cumulative gain or loss previously recognized in Other Comprehensive Income is reclassified to profit or loss under the line item "Result from recognition of assets measured at amortized cost". The aforementioned line item mainly includes the Leliqs monetary loss. Leliqs are classified as Available por Sale and since they are a 28-day tenor instrument, they are due within a month (they become derecognized within a month). This criterion has been followed by the Company since 2Q20. For comparative purposes we have included the impact from exposure to changes in the purchasing power of the currency of Leliqs in a separated line item named "Leliq - Result from recognition of assets measured at amortized cost".

The effect of inflation on the Company'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", and to see the total impact, the amount recorded as "Leliq - Result from recognition of assets measured at amortized cost" should be added to this line item.

Result from exposure to changes in the purchasing power of the currency

% Change

(In millions of Ps. stated in terms of the

measuring unit current at the end of the

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

reporting period)

Result from exposure to changes in the

3,529.0

1,822.4

-986.2

-1,449.4

-2,023.5

na

na

purchasing power of the currency

LELIQ Result from exposure to changes in

-4,378.1

-2,416.7

0.0

0.0

0.0

na

na

the purchasing power of the currency

Total

-849.1

-594.3

-986.2

-1,449.4

-2,023.5

42.9%

-58.0%

The result from exposure to changes in the purchasing power of the currency for 3Q20 totaled AR$849.1 million loss, compared to the AR$2.0 billion loss recorded in 3Q19 and the AR$594.3 million loss recorded in 2Q20. YoY decrease reflects lower inflation which reached 7.7% in 3Q20, compared to 12.5% in 3Q19. By contrast, QoQ increase reflects higher inflation in 3Q20 when compared to the 5.4% experienced in 2Q20.

Net Service Fee Income

Net service fee income (excluding Income from Insurance Activities) in 3Q20 totaled AR$1.7 billion, decreasing 6.6% YoY and remained almost flat (-0.6%)QoQ. Central Bank regulations prohibit banks from charging fees on ATM usage until December 31, 2020, as well as further repricing of all other fees until early 2021.

Excluding the impact of IAS29, Net service fee income (excluding Income from Insurance Activities) would have been AR$1.7 billion in 3Q20, increasing 25.0% YoY and 6.4% QoQ.

Net Service Fee Income

% Change

(In millions of Ps. stated in terms of

the measuring unit current at the

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

end of the reporting period)

Income from:

Deposit Accounts

1,001.7

1,073.3

1,181.7

1,008.5

1,076.8

-6.7%

-7.0%

Loan Related

22.5

33.5

74.9

62.5

91.4

-32.7%

-75.3%

Credit cards commissions

741.0

625.8

896.3

916.2

922.0

18.4%

-19.6%

Leasing commissions

35.3

29.8

24.0

29.5

38.0

18.5%

-7.1%

Other1

754.5

699.9

553.6

492.0

492.2

7.8%

53.3%

Total Fee Income

2,555.1

2,462.3

2,730.5

2,508.7

2,620.5

3.8%

-2.5%

Expenses:

Commissions paid

790.5

702.7

751.7

733.3

731.3

12.5%

8.1%

Exports and foreign currency

24.0

9.4

7.7

8.8

26.2

155.2%

-8.1%

transactions

Total Fee Expenses

814.6

712.1

759.4

742.1

757.4

14.4%

7.5%

Net Services Fee Income

1,740.5

1,750.2

1,971.1

1,766.6

1,863.0

-0.6%

-6.6%

27

1 Other Fee Income includes certain insurance fees, custody and depositary fees, among others

The main contributors to service fee income in 3Q20 were deposit accounts, credit cards commissions and brokerage fees and asset management fees representing 39%, 29% and 16% of total fee income.

YoY, service fee income decreased 2.5% due to:

  • A 19.6%, or AR$ 181.0 million decrease in credit cards, reflecting a strong decline in credit cards usage together with the reduction in credit cards and debit cards merchant discount rates ("MDR"). The maximum MDR for 2019 was 1.65%, while since January 1, 2020 it was reduced to 1.50%. The maximum debit card sales commissions for 2019 was 0.80% while since January 1, 2020 it is 0.7%,
  • A 75.3% or AR$ 68.9 million decrease in Loan Related fees, and 7.1% or AR$ 2.7 million decrease in Leasing transactions fees, both reflecting the weak credit demand and some regulatory restrictions on charging fees since the pandemic outbreak, and
  • A 7.0% or AR$75.1 million decrease in deposit account fees.

These were partially offset by a 53.3% or AR$262.3 million increase, in other fees, mainly due to revenues from the InvertirOnline brokerage business and the asset management business.

The QoQ performance is explained by: (i) a rebound in credit card usage in the quarter as a result of a less restrictive lockdown compared to previous quarter, and (ii) a 13.1% or AR$48.7 million increase in revenues mainly derived from the asset management and the InvertirOnline brokerage businesses. These were partially offset by (i) a decline of 6.7% or AR$71.6 million in deposit account fees due to the above-mentioned limitation to increase fees, and (iii) a decrease in 32.7% or AR$ 10.9 million in loan related fees reflecting the weak credit demand and some regulatory restrictions on charging fees since the pandemic outbreak.

Service fee expenses increased 7.5% YoY and 14.4% QoQ to AR$814.6 million in 3Q20. YoY and QoQ primarily explained by the increase in Commissions paid reflecting higher costs paid to the credit and debit cards' processors.

Income from Insurance Activities

Income from insurance activities includes insurance premiums, net of insurance reserves and production costs. Income from Insurance activities down 22% QoQ to AR$327.0 million, reflecting very low levels of sales in branches amid the pandemic restrictions, a higher accident rate since relaxation of the lockdown and also compares to a high second quarter which included the positive result of the implementation of annual rebalancing of seasonal claims ratio curve.

Gross written premiums measured in the unit at the end of the reporting period were down 6.6% QoQ, with non- credit related policies decreasing AR$6.5 million, or 2.5%. Claims paid (measured in the unit at the end of the reporting period) increased AR$57.8 million as previous quarter reflected the implementation of the annual rebalancing of the company seasonal claims ratio curve, following IBNR (Incurred but not Recorded Expenses) guidelines. Gross written premiums were down 29.0% YoY, with non-credit related policies decreasing AR$111.8 million, or 30.4%. Claims paid amounted AR$80.2 million decreasing 23.4%.

Loan Loss Provisions

Pursuant to Communication "A" 6430 issued on January 12, 2018, provisions on Financial Assets Impairment included in paragraph 5.5 of IFRS 9 as from fiscal years starting on January 1, 2020 shall be started.

Through Communications "A" 6778 and 6847 issued on September 5 and December 27, 2019, respectively, the Central Bank introduced a progressive adoption of the impairment model for IFRS 9 in a 5-year period for Group B entities, where IUDÚ Compañia Financiera (formerly Cordial Compañia Financiera or CCF), Supervielle's consumer finance company, is included. According to this model, the impact on the balance sheet for adopting IFRS 9 (i.e. the difference between loan loss reserves recorded as of December 31, 2019 and those required by

28

the expected losses model) will be recognized in 5 years, recording 5% of such difference in each quarter on a cumulative basis starting March 31, 2020. More recently, amid the Covid-19 outbreak, the Central Bank postponed until 2021 the application of the expected credit losses criteria for Group B entities.

In addition, the Central Bank established a temporary exclusion from the impairment model of IFRS 9 for government-issued debt securities.

In 2Q20, the Company enhanced its forward looking model and started taking into account the Monthly Economic Activity Indicator as the most relevant variable to capture the stringency of the context looking forward, as the Badlar Interest rate and unemployment which were considered relevant until the Covid-19 outbreak, did not prove to capture the impact of a pandemic. Additionally, as a result of the extended Covid-19 lockdown in Argentina, the Company updated in 2Q20 its expected loss models to capture expectations of a worsening macroeconomic outlook.

The most significant assumptions used to estimate the PCE as of September 30, 2020 are presented below:

Parameter

Segment

Macroeconomic

Optimistic

Base

Pessimistic

variable

Scenario

scenario

scenario

Personal &

Monthly Economic

Probability

Business

Activity Indicator

124.04

120.67

115.37

Corporate

of Default

Consumer Finance

Each scenario reflects a different assumption for GDP declines in 2020, resulting in the three-monthly economic activity indicators included in the model. The Base scenario reflects a 10.9% drop in GDP, while the Optimistic scenario reflects a 7.6% drop and the Pessimistic scenario reflects a 14.7%.

Loan loss provisions (LLP) totaled AR$2.7 billion in 3Q20, decreasing 5.2% YoY but increasing 11.6% QoQ. During the quarter the Company further revised its expected loss models to adjust for the current economic outlook and made AR$1 billion in additional Covid-19 specific anticipatory provisions that have resulted in increased coverage. These anticipatory provisions in the third quarter include a further in-depth top down analysis on certain industries that could continue to be highly impacted by the pandemic. As of September 30, 2020, Covid- 19 anticipatory provisions amounted to AR$2.5 billion. The YoY decrease reflects the provisioning on certain corporate loans in 3Q19 that had become delinquent during that period.

The Coverage ratio increased to 181.3% from 86.1% in 3Q19 and from 127.1% in 2Q20. The increase in coverage starting 1Q20 reflects provisions made in advance of potential deterioration arising from the Covid-19 impacts on an already weak macro environment, and benefits from the Central Bank regulatory easing, in place since 1Q20 and from the write-off of a commercial loan that was delinquent since 3Q19.

%

Change

Loan Loss Provisions, net

3Q20

2Q20

1Q20

QoQ

Corporate

1,575.1

1,372.7

582.4

14.7%

LLP

1,550.1

1,324.6

680.1

17.0%

Other LLP

25.0

48.1

-

97.7

-48.0%

Personal and Business

876.4

971.2

672.1

-9.8%

LLP

895.6

873.3

867.2

2.6%

Other LLP

-

19.2

97.9

-

195.1

-119.6%

Consumer Finance

245.4

260.1

206.3

-5.6%

LLP

275.9

281.6

228.1

-2.0%

Other LLP

-

30.4

-

21.6

-

21.9

41.2%

Other

0.0

-39.1

13.4

na

LLP

1.8

-

40.0

17.6

na

Other LLP

-

1.8

0.9

-

4.2

na

*Other LLP included in Other Income and Other Expenses Line Items of the Income Statement

29

Cost of Risk was 11.2% in 3Q20, compared to 9.9% in 3Q19 and 10.1% in 2Q20. The QoQ increase reflects the above-mentioned provisioning following a further in-depth top down analysis on certain customer segments working in industries that could continue to be highly impacted by the pandemic, while the YoY increase is explained by the decline in the loan portfolio.

As of September 30, 2020, the Provisioning Ratio on total loan portfolio reached 8.1% compared to 7.7% as of June 2020, and 6.6% as of March 2020.

Corporate segment provisions amounted to AR$1.6 billion in 3Q20, up from AR$1.4 billion in 2Q20.

Personal & Business banking segment provisions amounted to AR$876.4 million in 3Q20 down 9.8% from 2Q20.

Consumer finance segment LLPs amounted to AR$245.6 million in 3Q20, down 5.6% from 2Q20. Consumer finance Cost of Risk was 18.1% in 3Q20 compared to 17.7% in 2Q20, while Coverage Ratio increased to 210.9% from 116.0% in 2Q20.

As of September 30, 2020, collateralized commercial loans were 45% of total, stable from 44% as of June 30, 2020. As of September 30, 2020, collateralized non-performing commercial loans increased to 78% of total, from 66% as of June 30, 2020 and 55% as of September 30, 2019.

The total NPL ratio was 4.5% in 3Q20 decreasing by 240 bps YoY and 160 bps QoQ. The QoQ NPL decline was mainly due to the write-off of a commercial loan that was delinquent since 3Q19. 3Q20 continues to benefit from:

  1. 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 which was introduced in 1Q20 and was extended until December 31, 2020, and (ii) the relief program ruled by the Central Bank amid the pandemic, allowing debtors to defer their loan payments originally maturing between April 2020 and December 2020, together with the automatic rescheduling of unpaid credit card balances due September 2020.

YoY NPL performance was explained by: i) a 150 bps decrease in Corporate Segment NPL mainly due to the above- mentioned write-off, ii) a 40 bps decrease in Personal and Business Segment NPL, and iii) 1,480 bps decrease in Consumer Finance Segment. Personal & Business Segment NPL and Consumer finance Segment NPL, are both benefitted from the regulatory easing on debtor classification since March 2020. The Consumer Finance segment NPL performance is also highly explained by the improvement in asset quality reflecting the measures taken by the Company in the past two years. These measures included tightening of credit scoring standards, changes in the collection process, and a slow-down in origination.

Efficiency, Personnel, Administrative & Other Expenses

Personnel, Administrative Expenses & D&A

% Change

(In millions of Ps. stated in terms of the measuring

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

unit current at the end of the reporting period)

Personnel Expenses

4,166.9

4,011.7

4,040.7

4,948.6

3,768.1

3.9%

10.6%

Administrative expenses

2,232.5

2,457.5

2,063.0

2,497.1

2,198.7

-9.2%

1.5%

Directors' and Statutory Auditors' Fees

76.8

102.6

43.4

79.6

77.5

-25.1%

-0.9%

Other Professional Fees

224.0

387.1

220.4

317.1

282.1

-42.1%

-20.6%

Advertising and Publicity

166.8

134.0

129.9

157.6

164.9

24.5%

1.2%

Taxes

421.6

375.6

414.7

519.1

376.3

12.2%

12.0%

Third Parties Services

421.2

404.2

334.3

436.5

441.5

4.2%

-4.6%

Other

922.0

1,054.1

920.4

987.2

856.4

-12.5%

7.7%

Total Personnel & Administrative Expenses

6,399.4

6,469.2

6,103.7

7,445.7

5,966.8

-1.1%

7.2%

("P&A")

D&A

548.5

530.6

512.7

907.6

552.7

3.4%

-0.8%

Total P&A and D&A

6,947.9

6,999.8

6,616.3

8,353.4

6,519.5

-0.7%

6.6%

Total Employees1

5,005

4,976

4,960

5,019

5,134

0.6%

-2.5%

Bank Branches

198

198

198

198

198

0.0%

0.0%

Other Acces Points

104

104

118

118

119

0%

-12.6%

Efficiency Ratio

61.0%

61.9%

64.2%

79.6%

74.2%

1. Total Employees reported do not include temporary employees

30

The Efficiency ratio was 61.0% in 3Q20, improving 320 bps YoY, and 90 bps QoQ. The QoQ performance was mainly driven by revenue growth in line with inflation while expenses performed slightly below inflation.

The past 2 years wage increases resulting from the bargaining agreement between Argentine banks and the banking industry labor union were as follows:

Month since increase applies

Salary

Increase

May- 2018

5.0%

July- 2018

5.0%

August-2018

4.0%

September-2018

4.0%

October-2018

12.0%

November-2018

3.9%

December-2018

3.7%

January-2019

10.0%

June-2019

9.5%

September-2019

10.0%

October-2019

5.0%

November-2019

5.0%

December-2019

3.8%

Januray 2020

7.0%

April 2020

6.0%

July 2020

7.0%

In 1Q20, banks and unions agreed on an advanced payment of fixed sums of money for all employees that on average followed inflation to be deducted from the closing of the collective bargaining agreements in the following months. Then, in July 2020 Banks and the labor union reached a collective bargaining agreement including the following salary increases: 7% for 1Q20, 6% since April 2020, 7% since July 2020 and 6% since September 2020.

Personnel expenses amounted to AR$4.2 billion in 3Q20, increasing 10.6% YoY and 3.9% QoQ, while on an accumulated basis, 9M20 expenses decreased 1.2% compared to 9M19. Excluding the impact of IFRS rule IAS 29, personnel expenses would have increased 50.4% YoY and 11.0% QoQ.

Personnel expenses in 3Q20, 2Q20 and 3Q19 include AR$158 million, AR$172 million and AR$151 million, respectively, of severance payments. Excluding severance costs, Personnel expenses would have increased 4.4% QoQ and 10.8% YoY.

The QoQ performance reflects the increase in salaries for the period January- June which was agreed with banking labor union and paid in July 2020, together in line with inflation salary increases in the quarter.

The employee base at the end of 3Q20 reached 5,005, decreasing 2.5% YoY or 129 employees and increasing 0.6% QoQ, or 29 employees. QoQ: i) the bank employee base decreased by 4 employees, ii) InvertirOnline increased its staff by 17 following the Company's growth strategy for its online brokerage business, and iii) the insurance companies increased by 11 employees related to the operation of the new insurance broker company.

Administrative expenses increased 1.5% YoY to AR$2.2 billion and decreased 9.2% QoQ. Excluding the impact of IFRS rule IAS 29, administrative expenses would have increased 38.5% YoY and decreased 2.6% QoQ. 3Q20 compares to a 2Q20 that included additional expenses to support the Company´s Digital Transformation together with Other expenses related to Covid-19 protocols across the Company's branch network aimed at protecting its employees and customers and to ensure business continuity.

The YoY performance was mainly driven by the following increases:

  • A 7.7% or AR$ 65.7 million in Other expenses, mainly due to the abovementioned Covid-19 protocols,
  • A 12.0% or AR$45.3 million in taxes.

These were partially offset by: i) a 20.6% or AR$58.1 million decrease in Other professional fees, and ii) a 4.6% or AR$20.3 million decrease in Third Party Services, mainly due to lower expenses on armored transportation costs.

31

The QoQ decrease was mainly driven by: i) a 42.1% or AR$163.1 million decrease in other professional fees as previous quarter recorded expenses related to the step up in the digital transformation process, and ii) a 12.5% or AR$132.0 million decrease in other expenses mainly as previous quarter recorded expenses due to the above- mentioned Covid-19 protocols.

D&A amounted to AR$548.5 million in 3Q20 decreasing 0.8% YoY but increasing 3.4% QoQ.

Other Operating Income (expenses), net

In 3Q20, Other Operating Expenses, net was AR$ 563.0 million decreasing 45.5% YoY and 15.7% QoQ.

Other Income, Net

% Change

(In millions of Ps. stated in terms of

the measuring unit current at the

3Q20

2Q20

1Q20

4Q19

3Q19

QoQ

YoY

end of the reporting period)

Other Operating Income

899.6

937.2

929.2

893.3

747.7

-4.0%

20.3%

Other Expenses

1,462.6

1,605.3

1,408.0

2,390.3

1,781.3

-8.9%

-17.9%

Total

-563.0

-668.1

-478.7

-1,497.0

-1,033.6

-15.7%

-45.5%

Other Expenses includes both turnover tax on all interest income, financial income and fees.

Other Comprehensive Income, net of tax

During 3Q20, Other Comprehensive Loss, net of tax amounted to AR$99.1 million compared to AR$0.2 million loss in 3Q19 and AR$335.0 million gain in 2Q20. During 3Q20, certain Boncer holdings which were previously classified as available for sale were sold and following regulation the cumulative gain or loss previously recognized in Other Comprehensive Income was reclassified to profit or loss under the line item "Result from recognition of assets measured at amortized cost".

Moreover, according to Central Bank regulation, the Other Comprehensive Income shall also reflect the result from the changes in the purchasing power of the currency results on securities classified as Available for Sale.

Income Tax

As per 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, the corporate tax rate declined to 30% from 35% starting in fiscal year 2018, and will further decline to 25% in fiscal year 2022, while a withholding tax on dividends was created with a rate of 7% since 2018 and 13% commencing fiscal year 2022. In addition, through the adoption of IFRS effective January 1, 2018, the Company began to recognize deferred tax assets and liabilities.

Additionally, as income tax is paid by each subsidiary on an individual basis, tax losses in one legal entity cannot be offset by tax gains in another legal entity.

The above mentioned tax reform 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 must exceed 100% in 3 years on a cumulative basis in order to deduct inflation losses. In 2018 the 55% threshold was not met, but in 2019 inflation widely exceeded 30%. Therefore, the income tax provision since 2019 considers the losses arising from exposures to changes in the purchasing power of the currency, which significantly lowered the income tax expense for the current year.

32

For income tax return purposes, one sixth (1/6) of the inflation losses that arose in the 2019 fiscal year were deductible in 2019, while the remaining five sixths (5/6) will be deductible in each of the subsequent 5 years, commencing 2020. Accordingly, one sixth (1/6) of the inflation losses reduced the 2019 income tax provision, while the other five sixths (5/6) created a deferred tax asset. Regarding 2020, one sixth (1/6) of the inflation losses arising in the 2020 fiscal year is deductible in 2020, while the remaining five sixths (5/6) will be deductible in each of the subsequent 5 years. Accordingly, one sixth (1/6) of the inflation losses reduce the current income tax provision, while the other five sixths (5/6) create a deferred tax asset.

In 3Q20, Income tax charge amounted to AR$11.5 million compared to an AR$173.3 million in 2Q20, and a gain of AR$282.1 million in 3Q19. During 3Q20 we took special income tax deductions arising from SMEs financing which lowered our effective income tax rate. Also, permanent differences between inflation adjustment for tax purposes and according to IAS 29 may arise, which increase or decrease the effective tax rate.

Review Of Consolidated Balance Sheet

Key Drivers

% Change

(In millions of Ps. stated in terms of the

measuring unit current at the end of the

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

reporting period)

Loans

Currency

AR$ Loans (in AR$)

85,080.2

86,105.9

80,534.9

86,463.3

84,776.8

-1.2%

0.4%

as % of Total Loans

82.8%

79.8%

77.0%

76.7%

70.9%

Foreign Currency Loans (in US$)

232.5

288.1

329.4

358.1

442.5

-19.3%

-47.5%

Atomization

Top 10

17.7%

18.0%

15.9%

15.7%

16.1%

Top 50

32.6%

35.1%

32.7%

32.4%

33.1%

Top 100

38.4%

41.6%

39.1%

39.5%

40.0%

Average Interest on loans

AR$ Loans

40.1%

41.8%

51.6%

59.8%

62.7%

Foreign Trade & FX

7.1%

7.3%

7.2%

6.7%

8.1%

INVESTMENT PORTFOLIO

Securities Issued by the Central Bank

43,961

62,103

46,822

8,770

40,785

-29.2%

7.8%

Government Securities AR$

11,329

10,813

6,306

4,851

7,318

4.8%

54.8%

Corporate Securities (in AR$)

382

400

363

142

252

-4.5%

51.7%

Funding

Deposits

AR$ Deposits (in AR$)

148,126.3

150,580.8

129,287.2

80,307.0

103,098.8

-1.6%

43.7%

as % of Total Deposits

87.0%

86.1%

82.6%

73.8%

73.9%

Foreign Currency Deposits (in US$)

290.6

321.6

372.9

389.7

462.1

-9.6%

-37.1%

Cost of Funds

AR$

17.1%

14.2%

22.9%

30.7%

41.9%

US$

1.7%

1.9%

2.0%

1.9%

1.2%

33

Total Assets and Investment Portfolio

Total Assets were up 6.5% YoY, but down 3.2% QoQ, to AR$236.2 billion as of September 30, 2020. The QoQ performance reflects a 4.8% decrease in loans along with lower holdings of Central Bank Leliqs following regulations and the decline in spreads. 3Q20 Average AR$ Assets were up 9.5% or AR$17.5 bn QoQ.

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

Assets Evolution

% Change

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

Cash and due from banks

27,970.1

34,132.0

40,552.8

32,288.1

25,678.2

-18.1%

8.9%

Securities Issued by the Central

43,961.3

62,102.8

46,821.9

8,769.5

40,785.5

-29.2%

7.8%

Bank

Government Securities

11,328.7

10,812.7

6,306.2

4,851.2

7,317.8

4.8%

54.8%

Loans & Leasing

102,787.4

107,957.0

104,627.6

112,695.2

119,576.7

-4.8%

-14.0%

Repo Transactions

22,059.9

4,988.0

89.8

0.0

5,460.1

342.3%

na

Property, Plant & Equipments

5,449.4

5,664.6

5,342.2

4,894.1

3,873.2

-3.8%

40.7%

Other & Intangible1

22,631.5

18,235.8

19,707.7

19,232.1

19,110.3

24.1%

18.4%

Total Assets

236,188.3

243,893.0

223,448.1

182,730.1

221,801.7

-3.2%

6.5%

Investment Portfolio

(In millions of Ps. stated in terms of the measuring unit current at

sep 20

jun 20

mar 20

dec 19

sep 19

the end of the reporting period)

Securities Issued by the Central Bank

43,961.3

62,102.8

46,821.9

8,769.5

40,785.5

AR$ Leliq

43,961.3

62,102.8

46,821.9

8,769.5

40,785.5

Government Securities

11,328.7

10,812.7

6,306.2

4,851.2

7,317.8

AR$

11,217.1

10,812.7

6,306.2

4,381.5

5,941.3

US$

111.6

-

0.0

469.7

1,376.5

Corporate Securities

381.8

399.7

362.6

142.5

251.7

AR$

381.8

399.7

362.6

142.5

250.0

US$

-

-

-

-

1.7

Securities Issued by the Central Bank in Guarantee (Held to

-

4,801.5

-

-

-

maturity)

AR$

-

4,801.5

-

-

-

Gov Sec. in Guarantee

999.6

353.8

1,606.9

1,509.2

1,110.0

AR$

999.6

US$

-

353.8

1,606.9

1,509.2

1,110.0

AR$ Gov Sec in Time Deposits (Held to maturity)

-

-

-

70.9

-

AR$

-

-

-

70.9

-

Total

56,671.5

78,470.5

55,097.6

15,343.3

49,465.1

AR$

56,559.8

78,116.7

53,490.7

13,364.4

46,976.8

US$

111.6

353.8

1,606.9

1,978.9

2,488.3

As of September 30, 2020, the main holdings of Government Securities are:

Goverment Securities breakdown

(In millions of Ps. stated in terms of the measuring unit current at

sep 20

the end of the reporting period)

Treasury Bonds 2020/2022 (Reserve Requirements)

6,351.0

Boncer

2,214.2

Boncer in Guarantee

999.6

Lecer

780.9

Treasury Bonds (Badlar)

793.0

Lebad

37.6

Others

1,152.0

Total

12,328.4

34

Loan Portfolio

The gross loan portfolio, including loans and financial leases measured in comparable AR$ units at the end of 3Q20 declined 14.0% YoY and 4.8% QoQ to AR$102.8 billion. The AR$ Loan portfolio remained flat (+0.4%) YoY but decreased 1.2% QoQ on soft demand and a cautious approach to the macroeconomic environment. FX loans, measured in US$, declined 47.5% YoY and 19.3% QoQ, following industry trends since August 2019.

US$ loans, measured in US$, amounted to US$232.5 million decreasing 47.5% YoY and 19.3% QoQ.

The table below shows the evolution of the loan book over the past five quarters broken down by product.

Loan & Financial Leases Portfolio

% Change

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

To the non-financial public sector

117.0

215.9

69.4

35.3

40.4

-45.8%

189.7%

To the financial sector

17.7

321.9

96.5

93.7

740.6

-94.5%

-97.6%

To the non-financial private sector and

99,588.1

104,098.1

100,897.6

108,568.9

113,822.0

-4.3%

-12.5%

foreign residents (before allowances):

Overdrafts

3,325.7

5,612.2

6,226.0

6,607.3

8,183.4

-40.7%

-59.4%

Promissory notes

31,336.4

29,871.8

21,744.9

26,641.0

22,145.7

4.9%

41.5%

Mortgage loans

9,271.6

9,657.2

9,673.9

9,655.8

9,552.3

-4.0%

-2.9%

Automobile and other secured loans

1,466.3

1,345.9

1,394.7

1,488.7

1,874.5

8.9%

-21.8%

Personal loans

18,377.1

18,414.1

19,862.6

20,630.8

23,676.4

-0.2%

-22.4%

Credit card loans

15,405.1

14,814.6

14,578.7

15,998.2

14,654.3

4.0%

5.1%

Foreign trade loans & US$ loans

15,271.8

19,041.9

21,325.1

22,196.3

29,921.3

-19.8%

-49.0%

Others

5,134.2

5,340.5

6,091.8

5,350.6

3,814.2

-3.9%

34.6%

Less: allowances for loan losses

-7,884.3

-8,099.7

-6,585.4

-6,977.8

-7,250.3

-2.7%

8.7%

Total Loans, net

91,838.5

96,536.3

94,478.1

101,720.1

107,352.7

-4.9%

-14.5%

Receivables from financial leases

2,944.8

3,223.3

3,471.9

3,987.8

4,931.8

-8.6%

-40.3%

Accrued interest and adjustments

119.8

97.8

92.2

9.5

41.9

22.5%

185.9%

Less: allowance s

-353.0

-196.2

-284.8

-100.3

-118.6

79.9%

197.5%

Total Loan & Financial Leases, net

94,550.1

99,661.1

97,757.4

105,617.1

112,207.7

-5.1%

-15.7%

Total Loan & Financial Leases (before

102,787.4

107,957.0

104,627.6

112,695.2

119,576.7

-4.8%

-14.0%

allowances)

With the aim of implementing a strategic view focused on individual customers and SMEs, who demand and value in-person-through branches- and digital service models, certain business segments of Banco Supervielle were redefined. On January 1, 2020, the SMEs customers and loan portfolio were transferred from the Corporate Banking segment to the Personal and Business Banking segment.

Since January 1, 2020, the Bank customers are served as follows:

  • Personal & Business banking segment:
    • Small businesses, individuals and businesses with annual sales up to AR$100 million
    • "SMEs", companies with annual sales over AR$100 million and below AR$700 million
  • Corporate banking Segment:
    • Middle-market,companies with annual sales over AR$700 million and below AR$2.5 billion
    • Large corporates, companies with annual sales over AR$2.5 billion

The charts below show the evolution of the loan book QoQ and YoY broken down by segment.

35

Personal & Business and Corporate segments loan portfolio decreased sequentially due to soft loan demand while the Consumer Finance segment loan portfolio showed a slightly increase in the quarter.

Risk management

Atomization of the loan portfolio.

As a result of its risk management policies, the Company continues to show a diversified an atomized portfolio, where the top 10, 50 and 100 borrowers represent 18%, 33% and 38%, respectively of the Loan portfolio, stable when compared to previous quarters.

Loan portfolio atomization

3Q20

2Q20

1Q20

4Q19

3Q19

%Top10

18%

18%

16%

16%

16%

%Top50

33%

35%

33%

32%

33%

%Top100

38%

42%

39%

40%

40%

Loan Portfolio breakdown by economic activity

Families and individuals

43,6

41,4

Agribusiness

10,9 13,7

Food & Beverages

9,2

8,9

Construction & Public works

5,7

7,3

Wine

3,2

2,7

Utilities

3

3,7

Financial

2,9

3,3

Oil, Gas & Mining

2,4

3,7

Retailer

1,7

1,6

Chemicals & plastics

1,6

2,3

Automobile

1,4

1,1

Transport

1,4

1,6

Machinery & Equipment

11

Others

9,3

10,5

0

20

40

60

sep-20

jun-20

36

Collateralized Loan Portfolio

As of September 30, 2020, 45% of the total commercial loan portfolio was collateralized, while 78% of the commercial non-performing loans portfolio was collateralized (compared to 66% as of June 30, 2020 and 55% as of September 30, 2019).

Loan portfolio collateral

Entrepreneurs

SMEs &

& Small

Middel

Large

Total

Businesses

Market

Collaterallized Portfolio

55%

40%

45%

45%

Unsecured Portfolio

45%

60%

55%

55%

Regarding Personal and Business Portfolio, loans to payroll and pension clients as of September 30, 2020, represented 73.1% of the total loan portfolio to individuals.

Asset Quality

The total NPL ratio was 4.5% in 3Q20 decreasing by 240 bps YoY and 160 bps QoQ. The QoQ NPL decline was mainly due to the write-off of a commercial loan that was delinquent since 3Q19. 3Q20 continues to benefit from:

  1. 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 which was introduced in 1Q20 and was extended until December 31, 2020, and (ii) the relief program ruled by the Central Bank amid the pandemic, allowing debtors to defer their loan payments originally maturing between April 2020 and December 2020, together with the automatic rescheduling of unpaid credit card balances due September 2020.

YoY NPL performance was explained by: i) a 150 bps decrease in Corporate Segment NPL mainly due to the above- mentioned write-off, ii) a 40 bps decrease in Personal and Business Segment NPL, and iii) 1,480 bps decrease in Consumer Finance Segment. Personal & Business Segment NPL and Consumer finance Segment NPL, are both benefitted from the regulatory easing on debtor classification since March 2020. The Consumer Finance segment NPL performance is also highly explained by the improvement in asset quality reflecting the measures taken by the Company in the past two years. These measures included tightening of credit scoring standards, changes in the collection process, and a slow-down in origination.

The Coverage ratio increased to 181.3% from 86.1% in 3Q19 and 127.1% in 2Q20. The increase in coverage starting 1Q20 reflects provisions made in advance of potential deterioration arising from the Covid-19 impacts on an already weak macro environment, and benefits from the Central Bank regulatory easing, in place since 1Q20 and from the previously mentioned commercial loan write-off. As of September 30, 2020, collateralized non- performing commercial loans increased to 78% of total, from 66% as of June 30, 2020 and 55% as of September 30, 2019.

Cost of Risk was 11.2% in 3Q20, compared to 9.9% in 3Q19 and 10.1% in 2Q20. The QoQ increase reflects the above-mentioned provisioning following a further in-depth top down analysis on certain customer segments working in industries that could continue to be highly impacted by the pandemic, while the YoY increase is explained by the decline in the loan portfolio.

As of September 30, 2020, the Provisioning Ratio on total loan portfolio reached 8.1% compared to 7.7% as of June 2020, and 6.6% as of March 2020.

Cost of risk, net, which is equivalent to loan loss provisions net of recovered charged-off loans and reversed allowances, was 10.7% in 3Q20, compared to 9.4% in 3Q19 and 10.3% in 2Q20.

37

NPL Ratio and Delinquency by Product &

sep 20

jun 20

mar 20

dec 19

sep 19

Segment

Corporate Segment NPL

6.1%

9.2%

9.8%

9.2%

7.6%

Personal and Business Segment NPL

3.4%

3.5%

3.6%

3.8%

3.8%

Personal Loans NPL

3.2%

2.6%

2.1%

4.2%

4.1%

Credit Card Loans NPL

2.2%

1.9%

2.5%

3.8%

4.5%

Mortgages NPL

1.6%

1.5%

1.0%

1.3%

0.8%

SMEs NPL1

9.3%

9.9%

11.1%

6.9%

3.8%

Consumer Finance Segment NPL

5.5%

9.6%

10.0%

17.2%

20.3%

Personal Loans NPL

7.8%

9.6%

10.2%

25.1%

27.1%

Credit Card Loans NPL

3.5%

11.5%

13.1%

12.3%

15.2%

Car Loans NPL

7.8%

11.5%

10.8%

15.9%

13.4%

Total NPL

4.5%

6.1%

6.7%

7.4%

6.9%

1. Until December 2019, SMEs NPL ratio includes total SMEs loan portfolio while since March 2020, SMEs NPL ratio only includes the portfolio allocated to the Personal and Business Segment, according to the Business Segment criteria applied since January 2020.

The Central Bank ruled certain automatic Deferral Programs amid the Covid-19 pandemic, both for Credit Cards and for Loans.

  1. Credit Cards: Through Communications "A" 6964 and "A" 7095 the Central Bank ruled that all unpaid balances of credit card statements due between April 13 and April 30, 2020, and then due September 2020, should be automatically rescheduled in nine equal consecutive monthly installments beginning after a 3-month grace period.
  2. Loans: Through Communication "A" 6949, the Central Bank rescheduled unpaid payments on loans maturing between April 1 and June 30, 2020 and suspended the accrual of punitive interests on loans. Any unpaid installment should be automatically rescheduled after the final maturity of the loan and at the same interest rate of the loan. This disposition affected all loans to individuals and companies and all products such as personal loans, mortgage loans, car loans, leasing, etc. Then, this rule was extended two consecutive times, first, through Communication "A" 7044, to those loans or installments maturing from July 1 to September 30, 2020, and then through Communication "A" 7107, this was extended to those loans or installments maturing until December 31, 2020.

As of September 30, 2020, AR$7.4 billion of loans maturing between April and September 30, 2020, were automatically rescheduled following above-mentioned Central Bank Communications, representing approximately 11% of total loans subject to automatic deferral.

Deferral of Loan Installments

As of

% of total loans subject to deferral

September

Individuals

11%

Commercial Loans

10%

Consumer Finance

22%

Total

11%

Total amount rescheduled

AR$7.4 bn

As of September 30, 2020, AR$3.3 billion of credit card balances, were automatically rescheduled following Central Bank Communication "A" 6964 and "A" 7095.

Deferral of Credit Cards balances

AR$ million

As of September 30

Individuals

2,790

Commercial Loans

-

Consumer Finance

532

Total

3,322

38

Asset Quality

% Change

(In millions of Argentine Ps.)

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

Commercial Portfolio

40,354.6

45,825.6

44,900.5

50,182.7 58,971.2

-11.9%

-31.6%

Non-Performing

2,342.2

4,151.2

4,296.5

4,550.2

4,472.0

-43.6%

-47.6%

Consumer Lending Portfolio1

61,891.2

59,306.5

56,000.7

57,625.3

57,079.4

4.4%

8.4%

Non-Performing

2,438.4

2,654.2

2,905.0

4,052.1

4,163.2

-8.1%

-41.4%

Total Performing Portfolio2

102,245.9

105,132.0

100,901.2

107,808.0

116,050.6

-2.7%

-11.9%

Total Non-Performing

4,780.6

6,805.4

7,201.5

8,602.3

8,635.2

-29.8%

-44.6%

Total Non-Performing / Total Portfolio

4.5%

6.1%

6.7%

7.4%

6.9%

Total Allowances

8,669.2

8,648.9

7,173.5

7,143.1

7,433.1

0.2%

16.6%

Coverage Ratio

181.3%

127.1%

99.6%

83.0%

86.1%

Write-Off

2,703.1

964.1

1,762.6

1,674.9

2,617.9

180.4%

3.3%

Lifetime ECL

Analysis of the

Result from

Financial assets

Simplifie

exposure to

Allowance for Loan

Balance at

Balance at

12-month

with significant

Credit-impaired

d

changes in the

Losses

the beginning

the end of

ECL

increase in

financial assets

approac

purchasing power

of the period

the period

credit risk

h (*)

of the currency in

Allowances

Repo transactions

-

-

-

-

-

0.0

-

Other Financial Assets

303.0

-

1.0

-

36.0

-

-61.0

277.0

Loans and Other

-

-

-

-

-

0.0

-

Financings

Other Financial Entities

15.0

-

1.0

-

-

-

-3.0

11.0

Non Financial Private

6,849.0

2,181.0

1,259.0

-

500.0

-

-1,784.0

8,005.0

Sector

Overdraft

1,804.0

240.0

238.0

-

1,021.0

-

-230.0

1,031.0

Unsecured Corporate

445.0

270.0

8.0

-

5.0

-

-131.0

587.0

Loans

Mortgage Loans

564.0

1,564.0

28.0

-

350.0

-

-329.0

1,477.0

Automobile and other

119.0

-

1.0

-

6.0

34.0

-

-27.0

119.0

secured loans

Personal Loans

1,011.0

80.0

-

48.0

346.0

-

-253.0

1,136.0

Credit Crads

662.0

-

77.0

136.0

76.0

-

-145.0

652.0

Receivables from

170.0

44.0

102.0

-

4.0

-

-57.0

255.0

financial leases

Other

2,046.0

61.0

802.0

424.0

-

-613.0

2,720.0

Other Securities

4.0

401.0

-

-

-

-1.0

404.0

Other non-financial

-

-

-

-

-

0.0

-

Assets

Total Allowances

7,143.0

2,580.0

1,260.0

-

464.0

-

-1,850.0

8,669.0

Funding

Total funding, including deposits, other sources of funding such as financing from other financial institutions and negotiable obligations, as well as shareholders' equity, increased 6.5% YoY but decreased 3.2% QoQ. The QoQ performance reflects a 9.9% decrease in Other Sources of funding and a 2.7% decrease in deposits. In 3Q20, AR$ core franchise deposits decreased 8% QoQ driven by: i) a seasonal decline in 3Q from higher levels at the end of June when retail customers collected half of their 13th salary, and ii) a decline in sight deposits from peak levels in the first months of the lockdown amid the pandemic. By contrast, AR$ institutional funding increased 6% during the same period. Other sources of funding decreased 34.6% YoY and 9.9% QoQ mainly driven by payment upon maturity of some medium and long-term bonds. Shareholders' equity increased 5.3% YoY and 2.5% QoQ.

39

AR$ denominated funding increased 27.8% YoY but decreased 1.9% QoQ driven by the seasonal decline in deposits together with the decline in precautionary deposits that customers kept in the first months of the lockdown amid the pandemic.

Foreign currency denominated funding (measured in US$) decreased 38.0% YoY reflecting US$ deposits outflows following industry trend since August 2019 and 13.5% QoQ. QoQ and YoY also reflect de amortization of US$ loans in the quarter and the payment of foreign currency loans with multilaterals.

Funding & Other

% Change

Liabilities

(In millions of Ps. stated in

terms of the measuring unit

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

current at the end of the

reporting period)

Deposits

Non-Financial Public

8,114.0

5,524.6

6,316.6

6,689.4

10,387.5

46.9%

-21.9%

Sector

Financial Sector

13.6

20.1

19.1

34.4

37.0

-32.4%

-63.3%

Non-Financial Private

Sector and Foreign

Residents

Checking Accounts

16,059.3

20,278.2

16,386.2

14,820.9

15,234.4

-20.8%

5.4%

Savings Accounts

38,185.8

43,555.2

42,146.3

35,938.6

35,102.4

-12.3%

8.8%

Special Checking Accounts

26,459.0

34,156.6

29,958.5

11,425.1

25,095.4

-22.5%

5.4%

Time Deposits

44,027.3

41,941.0

45,981.7

29,178.5

45,336.2

5.0%

-2.9%

Others

37,400.1

29,494.7

15,749.2

10,760.2

8,242.5

26.8%

353.7%

Total Deposits

170,259.1

174,970.4

156,557.6

108,847.1

139,435.5

-2.7%

22.1%

Other Sources of Funding

Liabilities at a fair value

189.1

121.7

414.9

231.8

0.0

55.4%

-

through profit or loss

Derivatives

0.0

0.0

0.0

0.0

0.0

Repo Transactions

0.0

693.5

306.2

391.1

434.8

-100.0%

-100.0%

Other financial liabilities

8,355.7

7,119.7

8,689.0

11,148.6

9,914.4

17.4%

-15.7%

Financing received from

7,647.6

8,608.6

9,540.0

11,027.5

13,917.3

-11.2%

-45.0%

Central Bank and others

Medium Term Notes

4,232.9

6,333.0

4,664.9

7,443.1

13,897.2

-33.2%

-69.5%

Current Income tax liabilities

1,106.0

734.3

0.0

0.0

298.8

Subordinated Loan and

1,050.5

2,680.3

2,168.4

2,592.4

2,867.1

-60.8%

-63.4%

Negotiable Obligations

Provisions

774.7

784.8

619.2

827.9

207.2

-1.3%

273.9%

Deferred tax liabilities

164.7

332.6

568.3

577.9

921.9

-50.5%

-82.1%

Other non-financial liabilities

10,613.2

10,480.3

9,837.6

10,038.6

9,700.7

1.3%

9.4%

Total Other Sources of

34,134.4

37,888.9

36,808.5

44,278.9

52,159.4

-9.9%

-34.6%

Funding

Attributable

31,769.4

31,008.7

30,040.2

29,580.6

30,181.2

2.5%

5.3%

Shareholders' Equity

Total Funding

236,162.9

243,868.0

223,406.3

182,706.5

221,776.1

-3.2%

6.5%

Note: Since 3Q20, Deposits include IOL customer cash custody balances. The amount of deposits has been restated in 1Q20 and 2Q20 to reflect IOL customer cash custody balances at that dates. In previous quarters, the restated amounts were included in Other Liabilities

Deposits

Total Deposits measured in comparable AR$ units at the end of 3Q20 increased 22.1% YoY but decreased 2.7% QoQ to AR$170.3 billion. AR$ deposits rose 43.7% YoY and declined 1.6% QoQ. QoQ performance reflects seasonality and higher spending due the gradual relaxation of social distancing protocols. Average AR$ Deposits were up 10.4% or Ar$13.6 bn QoQ. Foreign currency deposits (measured in US$) declined 37.1% YoY and 9.6% QoQ, following industry trend.

Total deposits represent 72.0% of Supervielle's total funding sources compared to 62.9% in 3Q19 and 71.7% in 2Q20.

On a YoY basis, AR$ denominated deposits measured in units at the end of the reporting period, increased 43.7%. AR$ denominated deposits in nominal terms increased 96.3% YoY compared with nominal industry growth of 96%. Foreign currency denominated deposits (measured in US$) decreased 37.1% YoY while industry deposits in foreign currency decreased 24.0%.

On a QoQ basis, AR$ denominated deposits measured in units at the end of the reporting period, decreased 1.6%.

40

AR$ denominated deposits in nominal terms increased 5.9% QoQ in line with the 6.9% nominal industry growth and accounted for 87.0% of total deposits as of September 30, 2020. Foreign currency denominated deposits decreased 9.6% while Industry US dollar denominated deposits decreased 3.8%.

(In millions of Ps. stated in terms of the measuring unit current at the end of the reporting period)

% Change

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

Non-Financial Public Sector

7,298.0

4,331.2

4,674.7

4,034.1

4,715.9

68.5%

54.8%

Financial Sector

13.2

20.0

16.4

23.3

36.6

-33.9%

-64.0%

Non-Financial Private Sector and Foreign

140,815.1

146,229.7

124,596.1

76,249.6

98,346.3

-3.7%

43.2%

Residents

Checking Accounts

16,059.3

20,278.2

16,386.2

14,820.9

15,234.4

-20.8%

5.4%

Savings Accounts

28,469.3

33,133.9

31,304.0

23,535.2

20,644.2

-14.1%

37.9%

Special Checking Accounts

20,305.4

26,670.8

20,830.8

2,724.4

14,700.0

-23.9%

38.1%

Time Deposits

39,036.0

37,221.0

40,762.3

24,970.4

40,160.0

4.9%

-2.8%

Others

36,945.1

28,925.8

15,312.8

10,198.6

7,607.7

27.7%

385.6%

Total AR$ Deposits

148,126.3

150,580.8

129,287.2

80,307.0

103,098.8

-1.6%

43.7%

The charts below show the breakdown of deposits as of September 30, 2020, and in 3Q20 average balances, respectively.

Non- or low-cost demand total deposits (including private and public-sector deposits) comprised 33.2% of the Company's total deposits base (22.4% of savings accounts and 10.8% of checking accounts) as of September 30, 2020. Non- or low-cost demand deposits represented 38% of total deposits (25.5% of savings accounts and 13.0% of checking accounts) as of June 30, 2020 and 37% as of September 30, 2019.

AR$ Individual plus Senior Citizens customer deposits represented 36% of total deposits as of September 30, 2020, compared with 37% of total deposits as of June 30, 2020. AR$ Wholesale and institutional deposits increased to 47% of total AR$ deposits from 43% as of June 30, 2020.

41

Other Sources of

Funding and Shareholder's Equity

As of September 30, 2020, other sources of funding and shareholder's equity amounted to AR$65.9 billion decreasing 20.0% YoY and 4.3% QoQ.

The YoY performance in other sources of funding is explained by the following decreases:

  • 69.5%, or AR$9.7 billion in Medium Term Notes, due to the 100% amortization of the AR$ linked note issued by the bank in February 2017,
  • 45.0% or AR$6.3 billion in Financing Received from Central Bank and Others due to the cancellation of dollar denominated loans with multilateral entities, and
  • 63.4% or AR$1.8 billion in Subordinated Negotiable Obligations due to the amortization of the Serie III of US$22.5 million in August 2020.

This was partially offset by a 5.3%, or AR$1.6 billion increase in Attributable Shareholders' Equity.

The QoQ performance is explained mainly by the decrease of: i) 33.2% or AR$2.1 billion in medium term notes due to the 50% amortization of the AR$ linked note issued by the bank in February 2017, ii) 60.8% or AR$ 1.6 billion in Subordinated Negotiable Obligations due to the amortization of the Serie III of US$22.5 million in August 2020, and iii) 11.2% or AR$961 million in Financing Received from Central Bank and Others due to the cancellation of dollar denominated loans with multilateral entities.

CER - UVA Exposure

As of September 30, 2020, the total exposure to CER-UVA, amounted to AR$15.5 billion which represents 48.8% of the Attributable Shareholders equity.

3Q20

Assets exposed to CER/UVA

Loans

12,020.0

Mortgage Loans

8,889.6

Car Loans

367.8

Personal Loans

25.6

Other Loans

2,622.0

Interest

115.0

Securities

3,994.7

BONCER/LECER

3,994.7

Total Assets

16,014.7

Liabilities exposed to

CER/UVA

Deposits

371.8

Savings accounts on Construction

124.1

industry unemployment fund

Interest

1.2

Total Liabilities

497.2

Total Exposure to CER/UVA,

15,517.5

net

42

Foreign Currency Exposure

The table below show the foreign currency exposure in past quarters.

Consolidated Balance Sheet Data

sep 20

jun 20

mar 20

dec 19

sep 19

(In thousands of US$)

Assets

Cash and due from banks

202,375

217,759

212,086

235,077

248,202

Securities at fair value through profit or loss

9,716

15,153

7,867

13,121

17,723

Loans

229,919

248,374

295,016

316,093

386,488

Other Receivables from Financial

2,580

3,006

11,941

9,176

6,652

Intermediation

Other Receivable from Financial Leases

23,229

25,115

25,645

29,252

31,726

Other Assets

13,214

13,787

34,468

37,215

26,534

Other non-financial assets

148

160

45

107

47

Total assets

481,182

523,355

587,069

640,042

717,372

Liabilities and shareholders' equity

Deposits

297,489

284,813

331,883

389,627

461,955

Other financial liabilities

143,350

197,051

177,658

191,229

222,702

Other Liabilities

18,332

19,530

14,721

17,670

19,354

Subordinated Notes

32,684

35,338

28,863

35,393

36,461

Total liabilities

491,855

536,731

553,126

633,920

740,472

Net Position on Balance

-10,673

-13,376

33,943

6,123

-23,100

Net Derivatives Position

16,850

30,901

-8,226

1,631

1,000

Global Net Position

6,176

17,525

25,718

7,754

-22,100

According to Central Bank regulations, non-financial liabilities resulting from the adoption of IFRS 16 since January 2019, are not considered within the Global Net Position. Global Net Position is limited to a 4% maximum long position.

Liquidity & Capitalization

Loans to deposits ratio was 60.6% compared to 85.8% as of September 30, 2019 and 61.7% as of June 30, 2020.

AR$ loans to AR$ deposits ratio was 57.4%, declining from 82.2% as of September 30, 2019 and remained stable compared to 57.2% as of June 30, 2020. Liquid AR$ Assets to AR$ deposits ratio as of September 30, 2020 was 57.4% remaining at a high level.

US$ loans to US$ deposits ratio was 80.0% compared to 95.8% as of September 30, 2019 and 89.6% as of June 30, 2020. In 3Q20, US$ deposits outflows were 9.6% while US$ loans declined 19.3%. As of September 30, 2020, the Liquid US$ Assets to US$ deposits ratio was 73.3% remaining at a high level.

As of September 30, 2020, proforma liquidity coverage ratio (LCR) was 123.6% compared to 126.1% as of June 30, 2020. This ratio continued to reflect high liquidity levels.

Net Stable funding ratio ("NSFR") as of September 30, 2020 was 173.4%.

Tables below present information about liquidity in AR$ and US$:

AR$ Liquidity

(In millions of Ps. stated in terms of the measuring unit

sep 20

jun 20

mar 20

dec 19

sep 19

current at the end of the reporting period)

Cash and due from banks

12,311.5

17,971.1

26,168.0

17,327.3

10,383.3

Securities Issued by the Central Bank (Leliq)

43,961.3

62,102.8

46,821.9

8,769.5

40,785.5

Treasury Bonds (Botes)

6,351.0

5,468.2

5,296.1

3,778.9

5,402.5

Repo

22,059.9

4,988.0

89.8

-

5,460.1

43

Liquid AR$ Assets

84,683.6

90,530.1

78,375.7

29,875.8

62,031.4

Total AR$ Deposits

148,126.3

150,580.8

129,287.2

80,307.0

103,098.8

Liquid AR$ Assets / Total AR$ Deposits

57.2%

60.1%

60.6%

37.2%

60.2%

US$ Liquidity

sep 20

jun 20

mar 20

dec 19

sep 19

(In US$ million)

Cash and due from banks

205.6

213.1

207.3

232.0

248.2

US$ Treasury Bonds

-

-

-

2.5

17.3

Liquid US$ Assets

213.1

213.1

207.3

234.5

265.5

Total US$ Deposits

290.6

321.6

372.9

389.7

462.1

Liquid US$ Assets / Total US$ Deposits

73.3%

66.3%

55.6%

60.2%

57.5%

As of September 30, 2020, equity to total assets was 13.4%, compared to 12.7% as of June 30, 2020 and 16.2% as of December 31, 2019.

Consolidated Capital

% Change

sep 20

jun 20

mar 20

dec 19

sep 19

QoQ

YoY

Attributable Shareholders' Equity

31,769.4

31,008.7

30,040.2

29,580.6

30,181.2

2.5%

5.3%

Average Shareholders' Equity

30,535.1

29,101.3

27,548.7

23,056.3

24,934.2

4.9%

22.5%

Shareholders' Equity as a % of Total Assets

13.5%

12.7%

13.4%

16.2%

13.6%

Avg. Shareholders' Equity as a % of Avg. Total Assets

13.4%

13.2%

13.2%

11.8%

11.3%

Tang. Shareholders' Equity as a % of T. Tang. Assets

11.4%

10.8%

11.4%

13.7%

11.6%

Capital injections made by the Company in its subsidiaries during the past twelve months were as follows:

  • In March 2020, Bolsillo Digital S.A.U received total net capital injections of AR$48 million,
  • In March 2020, Futuros del Sur S.A. received total net capital injections of AR$50 million, and
  • In March 2020, Supervielle Productores Asesores de Seguros S.A. received total net capital injections of AR$30 million.

In April and May 2020, the Company received Dividend payments from its subsidiaries, Supervielle Seguros and Supervielle Asset Management of AR$190 million and AR$147.3 million respectively.

In September 2020, the Company received Dividend payments from its subsidiary, InvertirOnline.com of AR$14.2 million.

On May 29, 2020, the Company paid a cash dividend of AR$426 million.

After the closing of the 3Q20, the Company received Dividend payments from its subsidiary Supervielle Seguros of AR$361 million. In October 2020, Bolsillo Digital S.A.U received total net capital injections of AR$12.5 million. On October 20, 2020, the Company has made an initial irrevocable capital contribution of ARS$ 34,571,700 to subscribe 32,514,069 ordinary shares. This capital contribution will allow Supervielle to acquire up to 3.7932% of the capital stock and votes of Play Digital S.A. With this investment, Grupo Supervielle S.A. will become a shareholder of Play Digital together with other financial entities in the market.

On June 28, 2019, the Central Bank ruled, through Communication "A" 6723, effective on January 1, 2020, that Group "A" financial institutions which are controlled by non-financial institutions (as is the Company's case in relation with the Bank) shall comply with the Minimum Capital requirements, the Major Exposure to Credit Risk regulations, the Liquidity Coverage Ratio and the Net Stable Funding Ratio on a consolidated basis comprising the non-financial holding and all its subsidiaries (excluding insurance companies and non-financial subsidiaries).

44

On March 19, 2020, the Central Bank ruled, through Communication "A" 6938, establishing that group A financial institutions are allowed to consider as Tier 1 capital (COn1), when calculating minimum capital requirements, the positive difference between the accounting provision, calculated in accordance with point 5.5. of IFRS 9, and the regulatory provision, calculated in accordance with the standards on minimum loan loss provisions required, or the accounting provision as of November 30, 2019, the higher of both, that is, when the provision under IFRS is greater than the regulatory (or accounting as of that date).

The Common Equity Tier 1 Ratio as of September 30, 2020, was 14.0%, compared to the 13.4% reported as of June 30, 2020 and 11.8% reported as of September 30, 2019.

The YoY increase reflects capital creation in the quarter offset by the increase in risk weighted assets, the initial IAS29 adjustment in the first quarter and also the additional IAS29 adjustment in the second and third quarter on non-monetary assets and the above mentioned Central Bank regulatory easing on provisions amid the Covid- 19 pandemic that allows banks to consider as Tier 1 Common Equity, the difference between expected loss provisions recorded following IFRS9, and provisions recorded as of November 30, 2019 under the previous accounting framework.

The QoQ increase reflects capital creation in the quarter, the IAS29 adjustment in the third quarter on non- monetary assets, and the above-mentioned increase in Tier 1 from Central Bank regulatory easing on provisions amid the Covid-19 pandemic. This was partially offset by the increase in risk weighted assets and deductions on deferred income tax.

Supervielle's Tier 1 ratio coincides with CET 1 ratio.

As of September 30, 2020, Banco Supervielle's consolidated financial position showed a solvency level with an integrated capital of AR$22.9 billion, exceeding total capital requirements by AR$9.9 billion.

The table below presents information about the Bank and IUDÚ's consolidated regulatory capital and minimum capital requirement as of the dates indicated:

Calculation of Excess Capital

sep 20

jun 20

mar 20

dec 19

sep 19

Allocated to Assets at Risk

9,477.0

9,020.6

7,291.7

7,164.8

6,827.8

Allocated to Bank Premises and Equipment, Intangible

0.0

0.0

993.2

826.1

731.6

Assets and Equity Investment Assets

Market Risk

386.0

357.1

251.8

251.7

282.6

Public Sector and Securities in Investment Account

15.3

14.0

15.3

11.5

14.0

Operational Risk

3,072.4

2,909.0

2,602.8

2,350.0

2,083.5

Required Minimum Capital Under Central Bank

12,950.7

12,300.6

11,154.7

10,604.1

9,939.6

Regulations

Basic Net Worth

27,557.0

24,670.0

21,203.8

16,991.1

16,098.6

Complementary Net Worth

1,190.1

1,148.1

1,046.8

1,033.7

1,159.1

Deductions

-5,856.7

-5,004.2-3,598.4-2,999.7-2,485.2

Total Capital Under Central Bank Regulations

22,890.4

20,813.9

18,652.1

15,025.1

14,772.4

Excess Capital

9,939.7

8,513.4

7,497.4

4,421.0

4,832.8

Credit Risk Weighted Assets

114,959.9

109,441.6

101,860.1

96,585.7

91,375.6

Risk Weighted Assets

158,427.3

150,468.2

137,535.9

129,638.2

121,488.1

45

Total Capital

sep 20

jun 20

mar 20

dec 19

sep 19

Tier 1 Capital

Paid in share cap