UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 6-K

 

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

 

For the month of June, 2020

 

Commission File Number: 001-37777

 

 

 

GRUPO SUPERVIELLE S.A.

(Exact name of registrant as specified in its charter)

SUPERVIELLE GROUP S.A.

(Translation of registrant’s name into English)

 

 

 

Bartolomé Mitre 434, 5th Floor

C1036AAH Buenos Aires

Republic of Argentina

(Address of principal executive offices)

 

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F  x            Form 40-F  ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes  ¨             No  x

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes  ¨             No  x

 
 

 

 

 

 

GRUPO SUPERVIELLE S.A.

 

TABLE OF CONTENTS

 

Item  
   
1.Financial Statements for the financial year ended on March 31, 2020, presented on comparative basis. 

 

 

 

 

 

 

Consolidated Condensed Interim Financial Statements

 

For the three-month period ended on

March 31, 2020, presented on comparative basis in homogeneous currency

 

 

 

 

 

 

Contents

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION 2
CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME 4
CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY 7
CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS 9
1.         BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES of the unaudited consolidated condensed interim financial statements 11
2.         SEGMENT REPORTING 27
3.         FAIR VALUES 30
4.         RELATED PARTY TRANSACTIONS 31
5.         COMPOSITION OF THE MAIN ITEMS OF THE CONSOLIDATED COMPREHENSIVE INCOME 32
6.         DIVIDENDS 34
7.         INSURANCE 34
8.         MUTUAL FUNDS 34
9.         ADDITIONAL INFORMATION REQUIRED BY THE BCRA 34
10.       CONTRACT AS A FINANCIAL AGENT BY THE PROVINCE OF SAN LUIS 38
11.       FINANCIAL RISK FACTORS 38
12.       INTERNATIONAL FINANCING PROGRAMS 38
13.       IMPACT OF COVID-19 ON SOCIETY OPERATIONS 39
SCHEDULE A - DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS, OTHER DEBT SECURITIES, EQUITY INSTRUMENTS 40
SCHEDULE B – CLASSIFICATION OF LOANS AND OTHER FINANCING CREDIT ACCORDING TO STATUS AND COLLATERAL RECEIVED 43
SCHEDULE C - CONCENTRATION OF LOANS AND OTHER FINANCING 44
SCHEDULE  D – BREAKDOWN OF TOTAL LOANS AND OTHER FINANCING 45
SCHEDULE F - PROPERTY, PLANT AND EQUIPMENT 46
SCHEDULE G - INTANGIBLE ASSETS 47
SCHEDULE H – CONCENTRATION OF DEPOSITS 48
SCHEDULE I – BREAKDOWN OF FINANCIAL LIABILITIES FROM REMAINING TERMS 49
SCHEDULE L - ASSETS AND LIABILITIES IN FOREIGN CURRENCY 50
SCHEDULE R – LOAN LOSS RISK PROVISIONS 51
SEPARATE CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION 53
SEPARATE CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME 54
EARNING PER SHARE 55
SEPARTE CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME 56
SEPARATE CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY 57
SEPARATE CONDENSED INTERIM STATEMENT OF CASH FLOW 58
1.         BASIS OF PREPARATION OF THE UNAUDITED SEPARATE  FINANCIAL STATEMENTS 59
2.         FAIR VALUES 61
3.         INVESTMENT IN SUBSIDIARIES AND ASSOCIATES 62
4.         COMPOSITION OF THE MAIN ITEMS OF THE SEPARATE STATEMENT OF COMPREHENSIVE INCOME 63
5.         RESTRICTED ASSETS 65
6.         COMPANIES UNDER SECT. 33 OF CORPORATE LAW AND OTHER RELATED COMPANIES 65
7.         CAPITAL STOCK 69
8.         CASH FLOW STATEMENT AND EQUIVALENTS 69
9.         SUBSEQUENT EVENTS 69
SCHEDULE A – OTHER DEBT SECURITIES 70
SCHEDULE F - PROPERTY, PLANT AND EQUIPMENT 71
SCHEDULE G - INTANGIBLE ASSETS 71
SCHEDULE L – ASSETS AND LIABILITIES IN FOREIGN CURRENCY 72
Additional Information pursuant to Art, 12, Chapter III, Title IV of standards issued by the National Securities Commission 73
INFORMATIVE REVIEW AS OF MARCH 31, 2020 75

 

 

 

 

 

 

Consolidated Condensed Interim Financial Statements

 

For the three-month period ended on

March 31 2020, presented on comparative basis in homogeneous currency

 

 
 1 

 

GRUPO SUPERVIELLE S.A.

 

Name: Grupo Supervielle S.A.
Financial year: N° 42 started on January 1, 2020
Legal Address:

Bartolomé Mitre 434, piso 5

Ciudad Autónoma de Buenos Aires

Core Business: Carry out, on its own account or third parties’ or related to third parties, in the country or abroad, financing activities through cash or instrument contributions to already-existing or to-be-set-up corporations, whether controlling such corporations or not, as well as the purchase and sale of securities, shares, debentures and any kind of property values, granting of fines and/or guarantees, set up or transfer of loans as guarantee, including real, or without it not including operations set forth by the Financial Entities Law and any other requiring public bidding.
Registration Number at the IGP: 212,617
Date of Registration at IGP: October 15, 1980
Amendment of by-laws (last): April 24, 2018 (Registration in progress)
Expiration date of the Company’s By-Laws: October 15, 2079
Corporations Article 33 Companies general Law   Note 6 to Separate Condensed Interim Financial Statements

 

 

Composition of Capital Stock as of March 31, 2020

 

Shares   Capital Stock 
Quantity   Class  N.V. $   Votes per share   Subscribed in thousands of $   Integrated in thousands of $ 
61,738,188   A: Non endorsable, common shares of a nominal value   1    5    61,738    61,738 
394,984,134   B: Non endorsable, common shares of a nominal value   1    1    394,984    394,984 
456,722,322                 456,722    456,722 

 

 
 2 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

As of March 31, 2020 and December 31, 2019

(Expressed in thousands of pesos in homogeneous currency)

 

ASSETS 

Notes and

Schedules

  03/31/2020   12/31/2019 
Cash and due from banks  1.8 and 3   35,747,888    28,462,415 
Cash      9,575,863    9,433,656 
Financial institutions and correspondents      26,145,750    18,996,516 
    Argentine Central Bank      24,344,521    17,169,592 
    Other local and foreign financial institutions      1,801,229    1,826,924 
    Others      26,275    32,243 
Debt Securities at fair value through profit or loss  1.8, 3 and A   487,107    612,841 
Derivatives  3   143,424    277,678 
Repo transactions  3   79,143    - 
Other financial assets  1.8 and 3   2,710,995    2,260,412 
Loans and other financing  3 and B   88,783,824    95,833,522 
To the non-financial public sector      61,188    31,124 
To the financial sector      54,601    69,554 
To the Non-Financial Private Sector and Foreign residents      88,668,035    95,732,844 
Other debt securities  3 and A   46,656,973    11,274,274 
Financial assets in guarantee  3   5,822,474    5,749,708 
Current income tax assets      47,283    110,449 
Investments in equity instruments  3 and A   8,783    15,716 
Property, plant and equipment  F   4,709,231    4,314,216 
Investment properties  F   3,784,498    4,370,987 
Intangible assets  G   4,623,983    4,713,549 
Deferred income tax assets      1,320,133    1,447,149 
Other non-financial assets      2,004,214    1,395,306 
Inventories      43,021    47,922 
TOTAL ASSETS      196,972,974    160,886,144 

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements .

 

 
 3 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF FINANCIAL POSITION

As of March 31, 2020 and December 31, 2019

(Expressed in thousands of pesos in homogeneous currency)

 

  

Notes and

Schedules

   03/31/2020   12/31/2019 
LIABILITIES               
Deposits   3 and H    135,795,502    95,950,392 
 Non-financial public sector        5,568,195    5,896,825 
 Financial sector        16,810    30,290 
 Non-financial private sector and foreign residents        130,210,497    90,023,277 
Liabilities at fair value through profit or loss   3    365,736    204,338 
Repo transactions   3    269,910    344,761 
Other financial liabilities   3    9,887,658    9,598,033 
Financing received from the Argentine Central Bank and other financial institutions   3    8,409,647    9,720,927 
Negotiable Obligations Issued   3 and 9.4    4,112,197    6,561,191 
Subordinated negotiable obligations   3 and 9.4    1,911,457    2,285,229 
Provisions        545,826    729,822 
Deferred income tax liabilities        501,003    545,779 
Other non-financial liabilities        8,672,018    8,849,172 
TOTAL LIABILITIES        170,470,954    134,789,644 
                
SHAREHOLDERS' EQUITY               
   Capital stock        456,722    456,722 
   Paid in capital        26,348,501    26,348,501 
   Capital Adjustments        2,255,523    2,255,523 
   Reserves        11,276,739    11,276,739 
   Retained earnings        (14,354,903)   (11,192,768)
   Other comprehensive income        44,964    93,154 
   Net income for the period/year        453,376    (3,162,135)
Shareholders' Equity attributable to owners of the parent company        26,480,922    26,075,736 
Shareholders' Equity attributable to non-controlling interests        21,098    20,764 
TOTAL SHAREHOLDERS' EQUITY        26,502,020    26,096,500 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        196,972,974    160,886,144 
                

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements .

 

 
 4 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the three-month period ended on March 31, 2020 and 2019

(Expressed in thousands of pesos in homogeneous currency)

 

  

Notes 

   Three-month period ended on 
         03/31/2020    03/31/2019 
Interest income   5.1    13,068,356    12,270,231 
Interest expenses   5.2    (6,038,277)   (10,376,121)
Net interest income        7,030,079    1,894,110 
Service fee income   5.4    2,406,981    2,405,534 
Service fee expenses   5.5    (669,424)   (506,167)
Income from insurance activities   7    323,353    321,445 
Net Service Fee Income        2,060,910    2,220,812 
Subtotal        9,090,989    4,114,922 
Net income from financial instruments (NIFFI) at fair value through profit or loss   5.3    304,840    7,008,383 
Result from assets withdrawals rated at amortized cost        11,634    - 
Exchange rate difference on gold and foreign currency        93,871    (473,331)
Subtotal        410,345    6,535,052 
Other operating income   5.6    819,118    824,118 
Result from exposure to changes in the purchasing power of the currency        (869,346)   (1,694,805)
Loan loss provisions        (1,580,581)   (2,896,589)
Net operating income        7,870,525    6,882,698 
Personnel expenses   5.7    3,561,936    3,588,052 
Administration expenses   5.8    1,818,546    1,963,183 
Depreciations and impairment of non-financial assets   5.9    451,909    411,233 
Other operating expenses   5.10    1,241,139    1,551,982 
Operating income        796,995    (631,752)
Income before taxes from continuing operations        796,995    (631,752)
Income tax        343,236    723,114 
Net income for the year        453,759    (1,354,866)
Net income for the year attributable to owners of the parent company        453,376    (1,353,485)
Net income for the year attributable to non-controlling interests        383    (1,381)

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements.

 

 
 5 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the three-month period ended on March, 31 2020 and 2019

(Expressed in thousands of pesos in homogeneous currency)

 

Item  Three-month period ended on 
    03/31/2020    03/31/2019 
NUMERATOR          
Net income for the period attributable to owners of the parent company   453,376    (1,353,485)
PLUS: Diluting events inherent to potential ordinary shares   -    - 
Net income attributable to owners of the parent company adjusted by dilution   453,376    (1,353,485)
           
DENOMINATOR          
           
Weighted average of ordinary shares   456,722    456,722 
PLUS: Weighted average of number of ordinary shares issued with dilution effect.   -    - 
Weighted average of number of ordinary shares issued of the period adjusted by dilution effect   456,722    456,722 
           
Basic Income per share   0.99    (2.96)
Diluted Income per share   0.99    (2.96)

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements

 

 
 6 

 

GRUPO SUPERVIELLE S.A.
 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF COMPREHENSIVE INCOME
For the three-month period ended on March, 31 2020 and 2019
(Expressed in thousands of pesos in homogeneous currency)

 

   Three-month period ended on 
    03/31/2020    03/31/2019 
Net income for the period   453,759    (1,354,866)
           
Components of Other Comprehensive Income not to be reclassified to profit or loss          
Income for the year from equity instrument at fair value through other comprehensive income   (685)   - 
Income tax   206    - 
Net income from equity instrument at fair value through changes in other comprehensive income   (479)   - 
Total Other Comprehensive Income not to be reclassified to profit or loss   (479)   - 
Components of Other Comprehensive Loss to be reclassified to profit or loss          
Loss for the year from financial instrument at fair value through other comprehensive income   (64,809)   (2,221)
Income tax   17,049    666 
Net income from financial instrument at fair value through changes in other comprehensive income   (47,760)   (1,555)
Total Other Comprehensive Loss to be reclassified to profit or loss   (47,760)   (1,555)
Total Other Comprehensive Income   (48,239)   (1,555)
Other comprehensive income attributable to owners of the parent company   (48,190)   (1,554)
Other comprehensive income attributable to non-controlling interests   (49)   (1)
Total Comprehensive Income   405,520    (1,356,421)
Total comprehensive income attributable to owners of the parent company   405,186    (1,355,039)
Total comprehensive income attributable to non-controlling interests   334    (1,382)

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements..

 

 
 7 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY

For the three-month period ended on March, 31 2020 and 2019

(Expressed in thousands of pesos in homogeneous currency)

 

                           Other comprehensive income             
Items  Capital
stock
   Capital
adjustments
   Paid in
capital
   Legal
reserve
   Other
reserves
   Retained
earnings
   Revaluation
of PPE
   Earnings or
los accrued by
financial
institutions at
FV through
profit and loss
  

Total

Shareholders´ equity
attributable to
parent company

  

Total

Shareholders´ equity
attributable to non-
controlling interest

   Total Shareholders´
equity
 
Re-expressed Balance at December 31, 2019   456,722    2,255,523    26,348,501    151,478    11,125,261    (14,354,903)   87,712    5,442    26,075,736    20,764    26,096,500 
Net Income for the period   -    -    -    -    -    453,376    -    -    453,376    383    453,759 
Other comprehensive income for the period   -    -    -    -    -    -    -    (48,190)   (48,190)   (49)   (48,239)
Balance at March 31, 2020   456,722    2,255,523    26,348,501    151,478    11,125,261    (13,901,527)   87,712    (42,748)   26,480,922    21,098    26,502,020 

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements.

 

 
 8 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY

For the three-month period ended on March, 31 2020 and 2019

(Expressed in thousands of pesos in homogeneous currency)

 

                           Other comprehensive
income
             
Items  Capital stock   Capital adjustments   Paid in capital   Legal reserve   Other reserves   Retained earnings   Revaluation of PPE   Earnings or los accrued by financial institutions at FV through profit and loss  

Total

Shareholders´ equity attributable to parent company

  

Total

Shareholders´ equity attributable to non-controlling interest  

   Total Shareholders´equity 
Re-expressed Balance at December 31, 2018   456,722    2,343,587    26,259,910    151,477    8,881,636    (7,867,233)   -    -    30,226,099    25,322    30,251,421 
IFRS 9 Impact Adjustments   -    -    -    -    -    (579,438)   -    -    (579,438)   (455)   (579,893)
Balance at December 31, 2018   456,722    2,343,587    26,259,910    151,477    8,881,636    (8,446,671)   -    -    29,646,661    24,867    29,671,528 
Net Income for the period   -    -    -    -    -    (1,353,485)   -    -    (1,353,485)   (1,381)   (1,354,866)
Other comprehensive income for the period   -    -    -    -    -    -    -    (1,554)   (1,554)   (1)   (1,555)
Balance at March 31, 2019   456,722    2,343,587    26,259,910    151,477    8,881,636    (9,800,156)   -    (1,554)   28,291,622    23,485    28,315,107 

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements..

 

 
 9 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED CONDENSED INTERIM STATEMENT OF CASH FLOWS

For the three-month period ended on March, 31 2020 and 2019

(Expressed in thousands of pesos in homogeneous currency)

 

   03/31/2020   03/31/2019 
CASH FLOW FROM OPERATING ACTIVITIES          
           
Net income for the period before Income Tax   796,995    (631,752)
           
Adjustments to obtain flows from operating activities:          
Depreciation and impairment of non-financial assets   451,909    411,233 
Loan loss provisions   1,580,581    2,896,589 
Other adjustments          
- Exchange rate difference on gold and foreign currency   (93,871)   473,331 
 - Interests from loans and other financing   (13,068,356)   (12,270,231)
 - Interests from deposits and financing   6,038,277    10,376,121 
-Net income from financial instruments at fair value through profit or loss   (304,840)   (7,008,383)
- Result from exposure to changes in the purchasing power of the currency   869,346    1,694,805 
- Interest on liabilities for financial leases   37,597    - 
-Allowances reversed   (337,021)   - 
           
(Increases) / decreases from operating assets:          
Debt securities at fair value through profit or loss   83,032    7,447,712 
Derivatives   134,254    (242,660)
Repo transactions   (79,143)   - 
Loans and other financing          
To the non-financial public sector   (30,064)   9,770 
To the other financial entities   14,953    355,229 
To the non-financial sector and foreign residents   18,302,554    21,296,460 
Other debt securities   (35,382,699)   3,337,818 
Financial assets in guarantee   (72,766)   (3,932,977)
Investments in equity instruments   6,933    2,327 
Other assets   (2,225,388)   (4,614,364)
           
Increases / (decreases) from operating liabilities:          
Deposits          
Non-financial public sector   (328,630)   (1,793,129)
Financial sector   (13,480)   (11,676)
Private non-financial sector and foreign residents   33,561,892    (3,241,468)
Liabilities at fair value through profit or loss   161,398    1,583,805 
Derivatives   -    (156,249)
Repo operations   (74,851)   2,221,209 
Other liabilities   200,164    2,469,183 
Income Tax paid   (180,781)   (339,576)
           
Total operating activities (A)   10,047,995    20,333,127 
           
CASH FLOW FROM INVESTING ACTIVITIES          
           
Payments:          
Purchase of PPE, intangible assets and other assets   (109,743)   (127,627)
Purchase of investments in subsidiaries   -    (207,959)

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements.

 

 
 10 

 

GRUPO SUPERVIELLE S.A.

 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three-month period ended on March, 31 2020 and 2019

(Expressed in thousands of pesos in homogeneous currency)

 

   03/31/2020   03/31/2019 
CASH FLOW FROM INVESTING ACTIVITIES          
           
Collections:          
Purchase of PPE, intangible assets and other assets   38,852    461 
           
Total investing activities (B)   (70,891)   (335,125)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
           
Payments:          
Intereses sobre pasivos por arrendamientos financieros   (355,890)   - 
Financing received from Argentine Financial Institutions   (8,775,560)   (26,778,036)
Unsubordinated negotiable obligations   (2,763,393)   (5,588,116)
Subordinated negotiable obligations   (373,772)   - 
           
Collections:          
Financing received from Argentine Financial Institutions   7,464,280    23,846,491 
Unsubordinated negotiable obligations   314,399    7,942,525 
Subordinated negotiable obligations   -    48,631 
           
Total Financing activities (C)   (4,489,936)   (528,505)
           
EFFECT OF CHANGES IN THE EXCHANGE RATE (D)   3,647,709    13,432,093 
           
NET INCREASE IN CASH AND CASH EQUIVALENTS  (A+B+C+D)   9,134,877    32,901,590 
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR (NOTE 1.8)   30,176,040    77,901,507 
Result from exposure to changes in the purchasing power of the currency of cash and equivalents   (2,608,116)   (15,162,169)
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD (NOTE 1.8)   36,702,801    95,640,928 

(*) In the items “Loans and other financing - non-financial sector and foreign residents”, “Other Assets” and “Other liabilities” 3,855,099 and 705,529 corresponding to non-monetary transactions were eliminated.

 

The accompanying notes and schedules are an integral part of the Consolidated Condensed Interim Financial Statements.

 

 
 11 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

1.BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES of the unaudited consolidated condensed interim financial statements

Grupo Supervielle S.A. (hereinafter, "the Group"), is a company whose main activity is investment in other companies, Its main income comes from the distribution of dividends from these companies and the obtaining of income from other financial assets.

 

The consolidated financial statements of Grupo Supervielle S.A. they have been consolidated, line by line with the financial statements of Banco Supervielle S.A., Cordial Compañía Financiera S.A., Sofital S.A. F. e I.I., Tarjeta Automática S.A., Supervielle Asset Management S.A., Espacio Cordial Servicios S.A., Supervielle Seguros S.A., InvertirOnline S.A.U., InvertirOnline,Com Argentina S.A.U., Micro Lending S.A.U., Supervielle Productores Asesores de Seguros S.A., Bolsillo Digital S.A.U. and Futuros del Sur S.A.

 

The main investment of the Company is its shareholding in Banco Supervielle S.A., a financial entity included in Law No. 21.526 of Financial Institutions and subject to BCRA regulations, for which the valuation and exposure guidelines used have been adopted by said Entity (see Note 1.1) in accordance with that established in Title IV, Chapter I, Section I, Article 2 of the 2013 Orderly Text of the National Securities Commission (CNV).

 

These consolidated financial statements have been approved by the Board of Directors of the Company at its meeting held on May 28, 2020.

 

1.1.Preparation basis

These condensed interim financial statements have been prepared pursuant to: (i) provisions set by Intenational Accounting Standards N° 34, “Interim Financial Information” (IAS 34) and (ii) the accouting information framework set by the Argentine Central Bank which is based on International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and interpretations issued by the International Financial Reporting Standards Interpretation Committee with the following exceptions:

 

(i)               Temporary exception of IFRS 9 “Financial Instruments” application over debt instruments of the non-financial public sector,

 

(ii)              Temporary exception of the application of Section 5.5 (Value Impairment) for Group B entities, a category that includes Cordial Compañia Financiera S.A.. Therefore, provisions of the aforementioned entity are held under minimum provisions standards set by the Argentine Central Bank.

 

Pursuant to IAS 34, interim financial information shall include an explanation of events and transactions that have taken place as from the end of the last annual period being reported and are relevant for the understanding of changes in the financial situation, financial performance and cash flows of the Group with the purpose of relying on updated information as per the last financial statements of the fiscal year ended on December 31, 2019 ( hereinafter, “annual financial statements”). Given the aforementioned, these condensed interim financial statements do not include all the information to be required by complete financial statements prepared pursuant to International Financial Reporting Standards; hence, in virtue of a suitable understanding of the information included therein, such statements must be read jointly with annual financial statements as of December 31, 2019.

 

The Gruop´s Board has concluded that these interim condensed financial statements reasonably express the financial position, financial performance and cash flows.

 

It is worth to be mentioned that interim condensed financial statements have been prepared by applying accounting policies and measurement criteria consistent with those applied by the Group for the preparation of annual financial statements, except for what has been set forth in Note 1.1.4.

 

The preparation of financial statements requires that the Group carries out calculations and evaluations that affect the amount of incomes and expenses recorded in the period. In this sense, calculations are aimed at the estimation of, for example, credit risk provisions, useful life of property, plant and equipment, impairments and amortizations, recoverable value of assets, income tax charges and the reasonable value of certain financial instruments. Future real results may defer from calculations and evaluations as of the date of these separate financial statements preparation.

 

As of these financial statements issuance date, such statements are pending of transcription to Inventory and Balance Sheet Book.

 

 
 12 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

1.1.1           Going concern

 

As of the date of these consolidated condensed interim financial statements there are no uncertainties with respect to events or conditions that may raise doubts regarding the possibility that the Group continues to operate normally as a going concern.

 

1.1.2          Measuring unit

 

Figures included in these condensed interim financial statements are expressed in thousands of Argentine pesos, unless otherwise stated.

 

The Group´s interim condensed financial statements recognice changes in the currency purchasing power until August 31, 1995. As from such date, in virtue of existing economic stability conditions and pursuant to Communication “A” 2365 issued by the Argentine Central Bank, accounting measurements were not re-expressed until December 31, 2001. In virtue of Communication “A” 3702 issued by the Argentine Central Bank, the application of the method was resumed and became effective on January 1, 2002. Previous accouting measurements were considered to be expressed in the currency as of December 31, 2001.

 

Pursuant to Communication “A” 3921 issued by the Argentine Central Bank, in compliance with Decree 664/03 issued by the National Executive Power, the application of the re-expression of financial statements in homogeneous currency was interrupted as from March 1, 2003. Therefore, the Group applied said re-expression until February 28, 2003.

 

In turn, Law N° 27,468 (B.O. 04/12/2018) amended article 10° of Law N° 23,928 and its amendments, thus establishing that the abolition of all legal and regulating standards that set and authorize price indexing, monetary updating, cost changes or any other manner of re-increasing debts, taxes, prices or fees for goods, works or services does not include financial statements, regarding which the application of article 62 of the General Corporations Law N° 19,550 (T.O 1984) and its amendments shall prevail. Likewise, the aforementioned legal body set de abolition of Decree N° 1269/2002 dated on July 16, 2002 and its amendments and instructed the National Executive Power, through its controlling agencies, to set the date as from which said regulations became into effect in relation with financial statements to be submitted. Therefore, on February 22, 2019, the Argentine Central Bank issued Communication “A” 6651 which established that financial statements shall be prepared in a homogeneous currency as from January 1, 2020. Therefore, these condensed interim financial statements have been re-expressed as of 03.31.2020.

 

1.1.3       Comparative information

 

The information included in these condensed interim financial statements and in the aforementioned notes as of December 31, 2019 and March 31, 2019 is presented, exclusively with comparative purposes regarding the information as of March 31, 2020.

 

It is worth to be mentioned that, Communication “A” 6778, issued by the Argentine Central Bank, required the retroactive application of the impairment model set forth in section 5.5 of IFRS 9 with temporary withdrawal of non-financial public sector´s debt instruments and the re-expression of financial statements pursuant to IAS 29. In virtue of the aforementioned, the Group has applied the following:

 

(i)Retroactive re-expression of figures included in the Financial Situation as of December 31, 2019 for the purpose of submitting such figures as if the new accounting policies had been in force since January 1, 2019, and
(ii)Retroactive re-expression of figures included in the Income Statement, Other Comprehensive Income and Changes in the Shareholders’ Equity Statement as of March 31, 2019 for the purpose of submitting such figures as if the new accounting policies had been in force since January 1, 2019.

 

1.1.4        Changes in accounting policies and new accounting standards

 

With the approval of new IFRS, modifications or derogations of the standards in force, and once such changes are adopted through Adoption Bulletins issued by Federación Argentina de Consejos Profesionales en Ciencias Económicas (FACPCE), the Argentine Central Bank will determine the approval of such standards for financial entities. In general terms, no anticipated IFRS application shall be allowed unless upon adoption such anticipated measure is specified.

 

The following are changes that were made effective over the course of the quarter ended on March 31, 2020:

 

 
 13 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

(a)            Impairment of financial assets

 

Pursuant to Communication “A” 6430 and 6847 Financial Entities shall start to apply provisions on Financial Assets Impairment included in paragraph 5.5 of IFRS 9 as from fiscal years starting on 01/01/2020, except for Non-financial Public Sector´s debt securities, which shall be temporarily excluded from the scope of said provisions. Likewise, Communication “A” 6990 issued by the Argentine Central Bank set the postponement of the application of the section targeted to “B” group Companies until January 1, 2021,a category that includes Cordial Compañía Financiera S.A.; therefore, provisions of said Entity are held under the minimum provisions regulations set by the Argentine Central Bank.

 

Upon the application of impairment model included in section 5.5 of IFRS 9, a decrease of about 1,018.9 million and 1,178.7 million would have been recorded in the shareholders ´equity as of March 31, 2020 and December 31, 2019 respectively.

 

   March 31, 2020   December 31, 2019 
Provisions recorded in financial statements   6,323,552    6,320,892 
Provisions pursuant to section 5.5 of IFRS 9   7,342,419    7,499,626 
Difference   1,018,867    1,178,734 

 

IFRS 9 foresees an expected credit los model, by means of which financial assets are classified in three impairment stages, based on changes in credit quality as from its initial recognition and show how a Company measures impairment loss and applies the effective interest method. Note 1.2 offers greater detail on how expected credit loss is measured.

 

Pursuant to Communication “A” 6778 issued by the Argentine Central Bank, Financial Entities shall apply the following in virtue of the effects of the application of section 5.5 of IFRS 9:

 

(i)             Utilized internal models that shall meet IFRS 9 requirements; thus, applying such models to all assets included in such regulation with temporary exception abovementioned, and

(ii)            Apply the Regulation retroactively, thus setting the transition date on January 1, 2019.

 

The following chart includes the reconciliation between uncollectibility risk provisions as of 12-31-2019 pursuant to the criteria set by the Amended Text on “Debtors Classification” and “Minimum Uncollectibility Risk Provisions” set by the Argentine Central Bank and the new uncollectibility risk provisions pursuant the expected credit loss model set by IFRS 9 with temporary exceptions above mentioned in the first paragraph:

 

 

Category of financial instrument  Credit risk
provision
pursuant to
minimum-
provisions-related
Standards set by
the Argentine Central Bank
   Re-
measurements
   Reclassifications   Credit risk
provision
pursuant to
IFRS 9 (as per
scope of
Communication
“A” 6847)
 
Loans and other financing   -    -    -    - 
Other financial assets   68,517    -    198,158    266,675 
Loans and other financing   -    -    -    - 
Other Financial Entities   13,022    -    -    13,022 
NFPS and Res. Abroad   -    -    -    - 
Advances   693,574    -    896,827    1,590,401 
Documents   818,376    -    (426,068)   392,308 
Mortgage loans   459,549    -    37,727    497,276 
Pledge loans   46,630    13,061    45,300    104,991 
Personal loans   1,086,661    11,084    (206,915)   890,830 
Credit Cards   683,524    -    (100,179)   583,345 
Financial Lease   82,180    -    67,580    149,760 
Others   2,340,406    -    (511,954)   1,828,452 
Debt securities   3,912    -    (80)   3,832 
Contingent commitments   396    -    (396)   - 
TOTAL   6,296,747    24,145    -    6,320,892 
* Cordial Compañía Financiera S.A.´s balances of provisions are held under minimum provisions Standards pursuant to Communication “A” 6990 issued by the Argentine Central Bank.

 

 
 14 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

Note 1.2 includes further information on the definition of credit risk provision pursuant to the expected credit loss model set by IFRS 9 with scope set by the Argentine Central Bank.

 

(b)     Re-expression by inflation of financial statements

 

Pursuant to IAS 29 “Financial Information in hyperinflationary economies”, financial statements of an entity, whose functional currency accounts for that currency of a hyperinflationary economy shall be expressed in terms of a current measurement unit as of the reporting fiscal year closing date regardless of whether such statements are based on the historical cost method or a current cost method. To such ends, in general terms, such entity shall calculate the inflation recorded as from the acquisition date or revaluation date, when applicable, in non-monetary items. Such requirements also include the comparative information of financial statements.

 

With the purpose of stating whether an economy is classified as Hyperinflationary in accordance with IAS 29, the provision sets forth a series of factors to be considered, which includes an accrued inflation rate in three years close to or higher than the 100%. That is the reason why, pursuant to IAS 29, the Argentine economy must be considered as a high inflation economy as from July 1, 2018.

 

In short, pursuant to IFRS 29 re-expression mechanism, monetary assets and liabilities shall not be re-expressed since such assets and liabilities are expressed in a measurement unit in force as of the reported period closing. Assets and liabilities subject to adjustments tied to specific agreements, shall be adjusted pursuant to such agreements. Non-monetary items measured at current values at the end of the reported period, such as the realization net value or others, shall be re-expressed. The remaining non-monetary assets and liabilities shall be re-expressed in accordance with a general price index. The loss or earning of a net monetary position shall be included in the net income of the reported period in a separate item.

 

Pursuant to Communication “A” 6651, issued by the Argentine Central Bank on February 22, 2019, financial statements shall be prepared in a constant currency as from fiscal years starting on January 1, 2020. In this sense, Communication “A” 6849 issued by the Argentine Central Bank sets the re-expression frequency of the accounting information in a homogeneous currency on a monthly basis, and the index utilized to such ends accounts for the National Consumption Index drawn up by INDEC (basis month: December 2016) and for such items with previous initial date, IPIM issued by FACPCE is utilized, pursuant to Ruling JG 517/16. Likewise, transition date, in virtue of the retroactive application has been set on January 1, 2019.

 

(c)Other Changes in the Accounting Framework set by the Argentine Central Bank

 

Pursuant to Communication “A” 6847, financial entities will be allowed to re-categorize, as from Januray 1,2020, instruments of the non-financial public sector rated at fair value through profit and loss and at fair value through profit and loss in OCI at an amortized cost criterion, while utilizing the accounting value of such date as addition value. As for instruments affected by this option, interest accrual and accessories shall be interrupted as long as the accounting value is above its fair value. Upon such measurement, the abovementioned financial instruments, at fair value as of March 31, 2020 would have produced a decrease in the net shareholders ‘equity and income of the period of about 431 million.

 

(d)Definition of a business – Changes in accordance to IFRS 3

 

On October 22, 2018, IASB released changes, which include the definition of business with the purpose of helping entities determine whether a transaction must be recorded as a combination of business or the acquisition of an asset. Such changes:

 

(i)Clarifies that, the definition of business, an acquired group of activities and assets, shall include at least a good and a substantial process that together shall contribute significantly to the capacity of developing products;
(ii)Removes the evaluation of whether market players can replace the lack of processes or goods and continue with the production of products;
(iii)Add explanatory guidelines and examples to help entities evaluate whether a substantial process has been acquired;
(iv)Restrict definitions of a business or product by focusing on goods and services granted to clients and remove the reference to the capacity of reducing costs, and
(v)Add an optional concentration trial that enables a simplified evaluation of whether a set of activities and acquired businesses are not a business.

 

Entities need to apply changes in transactions which acquisitions date as from the beginning of the first annual period over which it has been informed as of January 1, 2020.

 

 
 15 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

The Entity does not see any initial effect unless a combination of businesses is made effective.

 

(e)Definition of significant or relatively significant Changes to IAS 1 and IAS 8

 

On October 31, 2018, IASB released these changes with the purpose of improving the understanding of the definition of significant or relatively significant, coordinating the drawing up of the definition in IFRS and the Conceptual Framework to avoid any misunderstanding whatsoever that may stem from the different definitions, in that sense, IASB has added support requirements in IAS 1 in the definition to add importance and clarity in its application. Additionally, said board provides existing guides regarding the definition of significant and relatively significant in a single place together with the definition.

 

This change affects mainly section 7 of IAS 1, section 5 of IAS 8 and removes section 6 of IAS 8. Such change is applicable in a prospective manner to annual periods as from January 1, 2020.

 

The Entity considers that such changes have no significant effect in its financial statements.

 

(f)Changes in the Financial Information Conceptual Framework

 

IASB has issued a new Conceptual Framework. Said change will not imply any changes in the accounting standards in force. However, entities that utilize the Conceptual Framework to define accounting policies for those transactions, events or situations that are not included in the accounting standards in force, apply a new Conceptual Framework as from January 1, 2020, thus evaluating whether their accounting policies are still the most suitable ones.

 

The Entity considers that such changes have no significant effect in its financial statements.

 

(g)Change in the Reference Interest rate (IBOR) – Changes to IFRS 9

 

On September 26, 2019, IASB released a change that requires additional disclosures regarding the uncertainty resulting from the reform in the reference interest rate. Such release accounts for the first reaction to potential effects that IBOR reform may produce in financial statements and modifies specific cash flow coverage accounting requirements assuming that the reference interest rate is not modified as a result of such reform. These changes have become effective as from January 1, 2020 with retroactive effect.

 

The Group considers that such changes have no significant effect in its financial statements.

 

The following sets forth changes that have not become in force as of March 31, 2020:

 

(a)Sale or contribution of assets between an investor and its associate or joint Venture – changes in IFRS 10 and IAS 28.

 

IASB carried out changes specifically on IFRS 10 “Consolidated Financial Entities” and IAS 28 “Investments in associates and joint ventures”. Such changes clarify the accounting of sales or contribution of assets between the investor and its associates and joint ventures and confirm that the accounting treatment depends on whether non-monetary assets sold or contributed to the associate or joint venture account for a “business” (as defined in IFRS 3).

 

When non-monetary assets account for a business, the investor will recognize earnings or losses of the sale or contribution of assets. If assets do not account for a business, earnings or losses are recognized by the investor only up to the amount recognized by the investor in the associate or joint venture. These changes are applied with retroactive effect.

 

IASB has decided to delay the application date for this modification until the research project over the interest method is concluded.

 

The Group is evaluating the impact of the application of this new standard.

 

(b)IFRS 17 “Insurance contracts”

 

On May 18, 2017, IASB issued IFRS 17 “Insurance contracts” which provides a comprehensive framework based on principles for measurement and presentation of all insurance contracts. The new rule will supersede IFRS 4 Insurance contracts and requires that insurance contracts be measured using cash flows of existing enforcement and that income be recognized as the service is rendered during the coverage period. The standard will come into force for the fiscal years beginning as from November 1, 2021.

 

 
 16 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

The Group is evaluating the impact of the application of this new standard.

 

1.2      Impairment of financial assets

 

The Group evaluates, based on a prospective approach, expected credit losses (“ECL”) related to financial assets rated at amortized cost or fair value with changes in another comprehensive income, the exposure resulting from loan commitments and financial guarantee contracts with the scope set by Communication “A” 6847 issued by the Argentine Central Bank.

 

The Group measures ECL of financial instruments reflecting the following:

 

(a)       A probability amount, weighed and unbiased, that is defined through the evaluation of a range of possible result;

 

(b)      The temporal value of money; and

 

(c)      The reasonable and sustainable information available at no cost nor excessive effort on the submission date on past events, current conditions and future economic condition forecasts.

 

IFRS 9 sets forth the following “Three stages” model for the impairment based on changes in the credit quality from initial recognition:

 

·            If, on the submission date, the credit risk of a financial instrument has not increased significantly since its initial recognition, the Group0 will classify such instrument in “Stage 1”.

 

·            If a significant increase in credit risk (“SICR”) is detected, from its initial recognition, the instrument is moved to “Stage 2”, but such instrument is not deemed to contain a credit impairment.

 

·            If the financial instrument contains credit impairment, it is moved to “Stage 3”.

 

·            For financial instruments in “Stage 1”, the Bank measures ECL at an amount equivalent to the amount of expected credit loss during the useful life term of the asset that result from potential default events within the next 12 months. As for Financial Instruments in “Stage 2” and “Stage 3”, the Group measures ECL during the useful life term of the asset (hereinafter “lifetime”). Note 1.2.1 includes a description of how the Group defines when a significant increase in credit risk has occurred.

 

·            A generalized concept in the measurement of ECL pursuant to IFRS 9 shall be considered prospective information.

 

·            Financial assets with impairment on credit value, either purchased or produced, account for those financial assets which have been impaired since initial recognition. ECL of this type of financial instruments is always measured during the asset lifetime (“Stage 3”).

 

The following chart summarizes the impairment requirements pursuant to IFRS 9 (for financial assets that do not entail impairment on credit value, either purchased or produced:

 

Changes in the credit quality since initial recognition  
Stage 1 Stage 2 Stage 3  
(initial recognition) (significant increase of credit risk since initial recognition) (Impaired credit)  
ECL over the next 12 months ECL during the financial instrument lifetime    

 

The following describes the Group´s judgements and assumptions for ECL measurement:

 

1.2.1. Significant increase in credit risk

 

The Group considers that a financial asset has experienced a significant credit risk increase when one or more than the following qualitative and quantitative criteria have been observed:

 

Individuals and Businesses

 

·       Maximum delay at a financial asset level between 31 and 90 days

 

·       Maximum situation Argentine Central Bank over 1.

 

 
 17 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

·       At a Client level, an Internal Behavior Score below cutting point.1

 

Corporate Banking

 

·       Maximum situation Argentine Central Bank over 1.

 

·       Hold an Internal Rating of Classification “C” (Default probability over 30%).

  

Consumption

 

·       Maximum delay at a financial asset level between 31 and 90 days

 

1.2.2. Individual and collective evaluation basis

 

Expected losses are estimated both in a collective and individual manner.

 

The Group´s individual estimation is aimed at calculating expected losses for significantly impaired risks. In these cases, the amount of credit losses is calculated as the difference between expected cash flows discounted at the effective interest rate of the operation and the value in the books of the instrument.

 

For collective estimation of expected credit losses, instruments are distributed in groups of assets depending on credit risk features. Exposures within each group are segmented in accordance with the similar features of the credit risk, including the debtor´s payment capacity pursuant to contractual conditions. These risk features need to play a key role in the estimation of future flows of each group. Credit risk features may consider the following factors, among others:

 

Entity Parameter Segment
Individual and Businesses Default Probability (DP) Personal loans (1)
Credit cards (1)
Advances
Documents
Mortgage loans
Refinancing
Others
Severity (LGD) Personal loans
Credit cards
Advances
Mortgage loans
Refinancing
Others

 

Entity Parameter Segment
Corporate Banking Default Probability (DP) (2) Small Companies
Medium Companies
Big Companies
Financial Sector
Severity (LGD) Advances
Documents
Leasing
Unsecured loans
Others
OCIF

 

Consumption Default Probability (DP) Credit cards closed
Credit cards opened
Cash loan
Consumption and Directed Cash Loan
Refinancing
Consumer Loans Tarjeta Automática
Severity (LGD) Credit Cards
Loans
Refinancing

 

 

1 Definition of cutting point for SICR – Payroll Plan High CL PC=>400. Remaining CL=>500. | Open market High Income CL=>700. Remaining CL =>700. | Retirees: High Income CL =>610. Remaining CL =>610.

 

 
 18 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

(1)    For personal loans and credit cards, the segment dimension is added, since there is sufficient materiality. The segments are: Retirees, High Income Open Market, High Income Salary Plan, Non High Income Open Market, Non High Income Salary Plan, Entrepreneurs and SMEs, Former Retirees and Ex Salary Plan.

 

(2)   The segments to calculate the probability of default in Business Banking were grouped by company size in Stage 1. For stages 2 and 3, the probability of default was calculated including all the business banking segments to form a statistical materiality group. enough

 

(3)   As of the date of these financial statements, the balances of provisions related to Cordial Compañía Financiera S.A., are established under the Minimum Provision Standards as set forth in Communication “A” 6990 of the B.C.R.A.

 

Credit risk features utilized for the abovementioned segments are the following, among others: type of financial instrument, debtor´s activity sector, activity geographical area, type of guarantee, time elapsed of submitted financial statements and other key factors to calculate expected cash flows.

 

The suitable segmentation of financial instruments is monitored and reviewed on a regular basis by the Credit Risk and Stress Test Area.

 

1.2.3 Definition of default and impaired credit

 

The Group considers that a financial instrument is in default when such instrument entails one or more of the following criteria:

 

Individuals and Businesses

 

·Financial instruments delinquent after 90 days in contractual payments.

 

Corporate Banking

 

·Financial instruments with B.C.R.A. situation greater than or equal to 3.

 

Consumption

 

·       Financial instruments delinquent after 90 days in contractual payments.

 

Abovementioned criteria are applied in a consistent manner to all financial instruments and are aligned with the definition of default utilized by the Bank in virtue of the administration of credit risk. Likewise, such definition is consistently applied to define DP, Exposure at Default (“hereinafter, “EAD”) and Loss Given Default (hereinafter, “LGD”).

 

1.2.4. Measurement of Expected Credit Loss – Explanation of inputs, assumptions and calculation techniques

 

ECL is measured on a 12-month basis or along the instrument´s lifetime, depending on whether a significant increase in credit risk has been recorded since initial recognition or whether an asset is considered to contain credit impairment. ECLs account for the product discounted from Default Probability (DP), Exposure at Default (EAD) and Loos Given Default (LGD), defined as follows:

 

• DP accounts for the probability of debtor´s breaching his/her financial obligation (pursuant to the “Definition of credit default and impairment” set forth in Note 1.2.3), either during the next 12 months or the remaining lifetime (DP lifetime) of the financial asset.

 

• EAD is based on the amounts the Group expects to owe at the moment of the default, during the next 12 months or the remaining lifetime (DP lifetime) of the financial asset (EAD Lifetime). For example, for a revolving commitment, the Group includes the current available balance plus any additional amount expected to become available until the current contractual limit at the moment of the default, when applicable.

 

 
 19 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

• LGD accounts for the Group´s expectation regarding the loss amount in an exposure under default.

 

LGD changes depending on the counterparty type, the type and time elapsed of the claim and the availability of guarantees or any other credit support. LGD is expressed as a loss percentage for the exposure unit at the moment of default (EAD) and is calculated on a 12-month basis or along the instrument lifetime, where the 12-month LGD accounts for the loss percentage expected to incur if the default takes place within the next 12 months and lifelong LGD accounts for the loss percentage expected to incur if the default takes place during the remaining lifetime of the financial asset.

 

ECL is defined by projecting DP, LGD and EAD for each future month and each individual or collective exposure. These three components are multiplied and adjusted pursuant to the survival (that is, the exposure has not been pre-settled or entered into default in a previous month). The aforementioned effectively calculates ECL for each future month, which is later discounted as of submission date and is added. The discount rate utilized for the calculation of ECL accounts for the original or rough effective interest rate of such date.

 

As for the calculation of parameters utilized for the calculation of the aforementioned ECL, the Entity based its calculation on the internal model development know-how for the calculation of parameters, thus adapting the development of such models pursuant to IFRS 9.

 

The Group includes prospective economic information in its definition of DP, EAD and LGD over 12 months or Lifetime. See Note 1.2.5 for the explanation of prospective information and its consideration in the calculation of ECL.

 

1.2.5 Prospective information considered in expected credit loss models

 

The evaluation of significant credit increases and the calculation of ECL include prospective information. The Group carried out a historical analysis and identifies key economic variable that affect the credit risk and expected credit losses for each portfolio.

 

Forecasts of these economic variable (“base economic scenario”) are provided on a six-month basis by the Research team of the Group and offer a better estimated outlook of the economy for the next 12 months. The impact of such economic variables on DP and LGD resulted from the statistic regression analysis to understand the impact the changes in these variables has had historically on default rates and LGD components.

 

In addition to the base economic scenario, the Research team of the Group also provides two potential scenarios together with scenario analysis. The number of other scenarios is defined in accordance with the analysis of the main products to ensure the lineal effect between the future economic scenario and related expected credit losses. The number of scenarios and its features are re-evaluated on a six-month basis, except a situation occurs in the macroeconomic framework that justifies a greater regularity.

 

As of January 1, 2020 and as of March 31, 2020, as for its portfolios, the Group concluded that three scenarios have properly captured non-lineal items. Scenario analysis are defined by means of a combination of statistic and know-how judgement analysis, taking into account the range of potential results of which each scenario is representative. The evaluation of credit risk significant increases is carried out by means of the utilization of DP lifetime in the base scenario and other scenarios, multiplied by the related analysis of each scenario, together with qualitative and quantitative and backstop indicators (See Note 1.2.1). The aforementioned is defined if the financial instrument is in Stage 1, Stage 2 or Stage 3 and, therefore, whether to register a 12-month ECL or Lifetime. As with any economic forecast, projections and probabilities of occurrence are subject to a high degree of inherent uncertainty, and therefore actual results may be significantly different than projected. The Group considers that these forecasts account for its best calculation of potential results and has analyzed the non-lineal and asymmetric impacts within the different portfolios of the Group to establish that chosen scenarios are representative of the range of potential scenarios.

 

 
 20 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

The most significant assumptions utilized to calculate ECL as of March 31, 2020 are as follows:

 

Parameter Segment Macroeconomic
variable
Optimistic
scenario
Base
scenario
Pessimistic
scenario
Default
probability
Individuals
and Businesses
Real salary (3.23)% (3.64)% (3.64)%
Corporate banking Badlar Rate 50.71% 50.67% 33.59%
Consumption EMAE 137.26 136.88 132.93
Loss
Given
Default
Individuals
and businesses
Real private
recorded salary
50.28% 41.39% 51.63%

 

The following are estimations assigned to each scenario as of March 31, 2020:

 

Base scenario 80%
Optimistic scenario 10%
Pessimistic scenario 10%

 

Sensitivity analysis

 

The chart below includes changes in ECL as of March 31, 2020 that would result from reasonably potential changes in the following parameters: 

 

March 31, 2020
Total portfolio 96,098,311
   
ECL per Scenario  
Favorable Impact 6,886,646
Intermediate Impact 6,910,818
High Impact 6,928,456
   
Coverage Ratio per Scenario  
Favorable Impact 92.23%
Intermediate Impact 91.91%
High Impact 91.67%

 

1.2.6 Maximum exposure to credit risk

 

The chart below includes an analysis of credit risk exposure of the financial instruments for which expected credit loss provisions are recognized. The gross amount of financial assets books included in the chart accounts for the maximum credit risk exposure of such assets.

 

  March 31, 2020 Total
Stage 1 Stage 2 Stage 3
Advances 33,628,213 312,325 1,206,853 35,147,391
Documents 9,631,834 82,493 311,935 10,026,262
Mortgage loans 10,001,731 364,876 868,023 11,234,630
Pledge loans 1,055,536 180,620 237,168 1,473,324
Personal loans 32,970,859 3,555,454 1,044,459 37,570,772
   Individuals and Business 14,088,984 922,521 464,642 15,476,147
   Consumption 18,881,875 2,632,933 579,817 22,094,625
Credit cards 31,892,919 769,588 564,774 33,227,281
   Individuals and Business 27,688,307 605,042 323,379 28,616,728
   Consumption 4,204,612 164,546 241,395 4,610,553
Financial Lease 2,875,519 49,698 279,335 3,204,552
Others 30,013,244 2,787,853 2,732,534 35,533,631
Total 152,069,855 8,102,907 7,245,081 167,417,843

 

 
 21 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

1.2.7 Guarantees and other credit improvements

 

A guarantee is an instrument by means of which the Entity´s debtor or a third party is committed upon any obligation default, to be offered as support for such debt settlement. The Entity accepts a guarantee with support before a potential breach on behalf of a debtor.

 

The Argentine Central Bank classifies these guarantees in three types: Preferred “A” (considered self-settleable), Preferred “B” (made up by mortgage or pledge loans) and remaining guarantees (mainly bank guarantees and fines).

 

In virtue of the administration of guarantees, the Group relies on a specific area devoted to the review of the legal compliance and suitable instrumentation of received guarantees. In accordance with the type of guarantees, the guarantors may be natural or legal persons (in the case of mortgages, pledges, fines, guarantees and liquid funds) and international top level Financial Entities (for credit letters stand by).

 

The Group monitors guarantees related to financial assets considered as impaired credits since such guarantee is likely to be executed to mitigate potential credit losses.

 

1.2.8 Credit risk provision

 

Credit risk provision recognized in the period is affected by a range of factors as follows:

 

• Transfers between Stage 1 and Stage 2 or 3 given financial instruments experience significant increases (or decreases) in credit risk or are impaired over the period, and the resulting “increase” between ECL at 12 months and Lifetime;

 

• Additional assignments for new financial instruments recognized during the period, as well as write-offs for withdrawn financial instruments;

 

• Impact on the calculation of ECL of changes in DP, EAD and LGD during the period, resulting from the regular updating of model inputs;

 

• Impact on the measurement of ECL as a result of changes in models and assumptions;

 

• Impact resulting from time elapsing as a consequence of the current value updating;

 

• Conversion to local currency for foreign-currency-denominated assets and other movements; and

 

• Financial assets withdrawn during the period and application of provisions related to assets withdrawn from the balance sheet during the period. The following charts explain changes in the provision for credit risk between the beginning and end of the period due to the following factors:

 

  Stage 1 Stage 2 Stage 3 Total
ECL at 12
months
ECL
Lifetime
ECL
Lifetime
Credit risk provision as of 12.31.2019 1,222,489 631,179 4,467,224 6,320,892
Transfers:        
From Stage 1 to Etapa 2 (19,376) 187,737 - 168,361
From Stage 1 to Etapa 3 (1,977) - 56,361 54,384
From Stage 2 to Etapa 3 - (213,761) 458,022 244,261
From Stage 2 to Etapa 1 14,285 (81,975) - (67,690)
From Stage 3 to Etapa 2 - 8,185 (44,714) (36,529)
From Stage 3 to Etapa 1 1,326 - (24,897) (23,571)
Net changes (246,439) 170,909 (526,884) (602,414)
Withdrawn financial assets 5,496 3,702 88,848 98,046
Direct charge 78,495 20,025 6,905 105,425
Difference of quotation and other movements 11,467 11,307 39,612 62,386
Credit risk provision as of 03.31.2020 1,065,766 737,308 4,520,477 6,323,551

*Cordial Compañía Financiera S.A.´s balances of provisions are held under minimum provisions Standards pursuant to Communication “A” 6990 issued by the Argentine Central Bank.

 

 
 22 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

1.2.9 Account withdrawal policy

 

The Bank withdraws, partially or as a whole, financial assets from the balance sheet, once all recovery efforts have been used up and has concluded that there are no reasonable expectations. Indicators of lack of reasonable recovery expectation include (i) the cease of execution activities and (ii) when the Bank´s recovery method is given by the guarantee execution and the value of the guarantee is not enough for a total reasonable recovery expectation.

 

The Group may withdraw financial assets from its balance sheet which are still subject to execution activities. Contractual amounts pending of collection of such withdrawn assets during the period ended on March 31, 2020 amount to 2,356,012. The Group seeks to recover amounts legally owed as a whole, but partially withdrawn in the balance sheet since there is no reasonable recovery expectation.

 

1.3.Critical accounting policies and estimates

 

The preparation of condensed interim financial statements in accordance with the accounting framework established by the Argentine Central Bank requires the use of certain critical accounting estimates. It also requires Management to exercise its judgment in the process of applying the accounting standards established by the Argentine Central Bank to establish the Group's accounting policies.

 

The Group has identified the following areas that involve a higher degree of judgment or complexity, or areas in which the assumptions and estimates are significant for the consolidated financial statements that are essential for understanding the underlying accounting / financial reporting risks:

 

a)       Fair value of derivatives and other financial instruments

 

The fair value of financial instruments that do not list in active markets are measured through the use of valuation techniques. Such techniques are validated and regularly reviewed by qualified independent personnel of the area that developed such techniques. All models are evaluated and adjusted before being use in order to make sure that results express current information and comparative market prices. As long as possible, models use only observable information; however, factors such as credit risk (own or counterparty), volatilities and correlations require the use of estimates. Changes in assumptions regarding such factors may impact on the fair value reported for financial instruments.

 

b)       Allowances for loan losses and advances.

 

As of January 1, 2020, the Group adopted retroactively to January 1, 2019, with the scope mentioned in Note 1.4. (A)., section 5.5. of IFRS 9 referring to the impairment of financial assets. In this sense, the Group evaluates the expected credit losses (ECL) on a prospective basis of the credit risk associated with the financial assets measured at amortized cost, to the debt instruments measured at fair value with changes in other comprehensive income, to accounts receivable for leases, as well as commitments and guarantees granted not measured at fair value, with the exception of debt instruments of the Non-Financial Public Sector that are temporarily excluded from the provisions for impairment of financial assets, contained in section 5.5 of IFRS 9, as well as the provisions of Cordial Compañía Financiera S.A. as provided in Communication “A” 6990 of the B.C.R.A.

 

The measurement of expected credit losses is an area that requires the use of complex models and significant assumptions about future economic conditions and credit behavior (for example, the probability that the customer will go into default and that losses will result for the Group). The explanation of the inputs, assumptions and estimation techniques used to measure the ECL is presented in more detail in Note 1.2, including the key sensitivities of the ECL to changes in these elements.

 

It should be noted that, in the application of accounting requirements to measure ECL, significant judgments are necessary, such as:

 

(i) Determination of the criterion of significant increase in credit risk

(ii) Choice of appropriate models and assumptions for the measurement of ECL

(iii) Establishment of the number and relative weight of the prospective scenarios for each portfolio segment and the associated ECL, and

(iv) Establishment of groups of similar financial assets for the purpose of measuring ECL.

 

 
 23 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

c)       Impairment of Non-Financial Assets

 

Intangible assets with finite lives and property, plants and equipment are amortized or depreciated along their useful lives in a straight-line method. The Group reviews the conditions related to these assets to determine whether events and circumstances justify a review of the amortization and remaining depreciation period and whether there are factors or circumstances that imply an impairment in the value of assets that cannot be recovered.

 

The Group has applied the judgment in the identification of impairment indicators for property, plant and equipment and intangible assets. The Group has defined that there was no evidence of impairment for any period included in the consolidated Financial Statements. Given the aforementioned, no recoverable value has been calculated.

 

The evaluation process for potential impairment of an asset of indefinite useful life is subject to and require a significant judgment in many points over the course of the analysis, including the identification of its cash-generating unit, the identification and allocation of assets and liabilities to a cash-generating unit and the definition of their recoverable value. The recoverable value is compared with the carrying value in order to define the non-recoverable portion of such value. When calculating the recoverable value of the cash-generating unit in virtue of the assessment of annual or regular impairment, the Group use estimates and significant judgments on future cash flows of the cash-generating unit. Its cash flow forecasts are based on assumptions that account for the best use of its cash-generating unit.

 

Although the Group believes that assumptions and forecasts used are suitable in virtue of the information available for the administration, changes in assumptions or circumstances may require changes in the assessment. Negative changes in assumptions utilized in an impairment tests of indefinite useful life intangible assets may result in the reduction or removal of the excess of fair value over the book value, which would result in the potential recognition of the impairment.

 

The Group decided that it would not be necessary to recognize an impairment loss in indefinite useful life intangible assets under such conditions.

 

d)       Income tax and deferred tax

 

A significant judgment is required to determine liabilities and assets from current and deferred taxes. The current tax is measured at the amount expected to be paid to the taxation authority using the tax rates that have been enacted or substantially enacted by the end of the reporting period. The deferred tax is measured over temporary differences between tax basis of assets and liabilities and book values at the tax rates that are expected to apply when the asset is realized or the liability settled.

 

Assets from deferred tax are recognized upon the possibility of relying on future taxable earnings against which temporary differences can be used, based on the Senior Management´s assumptions regarding amounts and opportunities of future taxable earnings. Later, it is necessary to determine whether assets from deferred tax are likely to be used and set off future taxable earnings. Real results may differ from estimates, such as changes in tax legislation or the result of the final review of affidavits issued by tax authorities and tax courts.

 

Likely future tax earnings and the number of tax benefits are based on a medium term business plan prepared by the administration. Such plan is based on reasonable expectations.

 

1.4.Changes in loans and other financing

 

Under certain circumstances, the Group renegotiates or changes contractual cash flows of loans granted to clients. In these cases, the Group evaluates whether the new terms are substantially different from initial terms. The Group carries out this practice while taking into account the following:

 

 

(i)       If the client is in financial difficulties, the Bank evaluates whether such change only reduces contractual cash flows to amounts expected to be paid by the borrower.

(ii)       Significant extension of the term when the borrower does not have financial difficulties.

(iii)       Significant change in the interest rate.

(iv)       Change in the currency in which the loan is denominated.

(v)       Integration of guarantees or credit improvements that significantly affect the credit risk related to the loan.

 

If, after the change, the loan terms are substantially different, the Group withdraws the original financial instrument and recognizes a new asset at fair value and recalculates a new effective interest rate for such asset. Therefore, renegotiation date is considered as the initial recognition date in virtue of the calculation of impairment and the definition of a new significant increase in credit risk. However, the Group also evaluates whether the new recognized asset is considered as an impaired asset, especially when the renegotiation stemmed from the lack of payment capacity on behalf of the client. The differences in the accounting value are recognized in the results as well as losses and earnings resulting from the withdrawal of such financial asset.

 

 
 24 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

If the terms of the loan after the change are not substantially different, the renegotiation or change will not produce the withdrawal of the financial asset, and the Group will recalculate the gross accounting value based on reviewed funds flow while recognizing a guarantee or loss from the change in results. The new gross accounting value is recalculated as the value discounted from the modified funds flow at the initial effective interest rate.

 

1.5.Consolidation

 

A subsidiary is an entity (or subsidiary), including structured entities, in which the Group has control because it (i) has the power to manage relevant activities of the subsidiary (ii) has exposure, or rights, to variable returns from its involment with the subsidiary, and (iii) has the ability to use its power over the subsidiary in order to affect the amount of the investor´s returns. The existence and the effect of the substantive rights, including substantive rights of potential vote, are considered when evaluating whether the Group has power over the other entity. For a right to be substantive, the right holder must have the practical competence to exercise such right whenever it is necessary to make decisions on the direction of the entity’s relevant activities. The Group can have control over an entity, even when it has less voting powers than those required for the majority.

 

Accordingly, the protecting rights of other investors, as well as those related to substantive changes in the subsidiary´ activities or applicable only in unusual circumstances, do not prevent the Group from having power over a subsidiary. The subsidiaries are consolidated as from the date on which control is transferred to the Group, ceasing its consolidation as from the date on which control ceases.

 

The following chart provides the subsidiaries which are object to consolidation:

 

Company Condition Legal Adress Principal
Activity
Percentage of Participation
03/31/2020 12/31/2019
Direct Direct and
Indirect
Direct Direct and
Indirect
Banco Supervielle S.A. Controlled Bartolomé Mitre 434, C.A.B.A., Argentina Commercial Bank 97.10% 99.90% (1) 97.10% 99.90% (1)
Cordial Compañía
Financiera S.A.
Controlled Reconquista 320, C.A.B.A., Argentina Financial Company 5.00% 99.90% 5.00% 99.90%
Tarjeta Automática  S.A. Controlled Bartolomé Mitre 434, C.A.B.A., Argentina Credit Card 87.50% 99.99% 87.50% 99.99%
Supervielle Asset
Management S.A.
Controlled Bartolomé Mitre 434, C.A.B.A., Argentina Mutual Fund 95.00% 100.00% 95.00% 100.00%
Sofital S.A.F. e I.I. Controlled Bartolomé Mitre 434. C.A.B.A., Argentina Real State 96.80% 100.00% 96.80% 100.00%
Espacio Cordial de
Servicios S.A.
Controlled San Martín 719/731. 1° Piso. Ciudad de Mendoza. Argentina Retail Services 95.00% 100.00% 95.00% 100.00%
Supervielle Seguros S.A. Controlled Reconquista 320. 1° Piso. C.A.B.A., Argentina Insurance 95.00% 100.00% 95.00% 100.00%
Micro Lending S.A.U. Controlled Bartolomé Mitre 434. C.A.B.A., Argentina Financial Company 100.00% 100.00% 100.00% 100.00%
InvertirOnline S.A.U. Controlled San Martin 323. 11° Piso. C.A.B.A., Argentina Clearing and settlement agent 100.00% 100.00% 100.00% 100.00%
InvertirOnline.Com
Argentina S.A.U.
Controlled

San Martin 323. 11° Piso. C.A.B.A.,

Argentina

Representations 100.00% 100.00% 100.00% 100.00%
Supervielle Productores
Asesores de Seguros
S.A.
Controlled Reconquista 320. 1° Piso. C.A.B.A., Argentina Insurance Broker 95.20% 100.00% 95.00% 100.00%
Bolsillo Digital S.A.U. Controlled Bartolomé Mitre 434, C.A.B.A., Argentina Computer Services 100.00% 100.00% 100.00% 100.00%
Futuros del Sur S.A. Controlled 03 de Febrero 515, Rosario,  Santa Fe Clearing and settlement agent 100.00% 100.00% 100.00% 100.00%
(1)Grupo Supervielle S,A,’s direct and indirect interest in Banco Supervielle S,A votes amounts to 99.87% as of 03/31/20 and 12/31/2019.
(2)All the subsidiaries carry out their activities in Argentina, the local and functional currency being Argentine pesos.

 

 
 25 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

1.6.Consolidated Structured Entities

 

The Group has securitized certain financial instruments, mainly loans, originated by personal and pledge loans through the transfers of said instruments to financial trusts that issue multiple classes of debt securities and participation certificates.

 

Regarding the financial statements as of December 31, 2019 the following consolidated structured entities have been consolidated as of the date of these consolidated condensed interim financial statements:

 

Issuers Financial Trust Set-up on Due of
principal
obligation
Securitized Amount Issued Securities
Type Amount Type Amount
Cordial Compañía Financiera S.A. 20 04/08/2019 01/15/2022 $ 600,000 VDF VN$ 480,000 CP VN$ 120,000
Cordial Compañía Financiera S.A.         21 06/24/2019 06/15/2022 $ 1,000,000 VDF VN$ 220,000 CP VN$ 780,000
Cordial Compañía Financiera 22 11/13/2019 01/15/2021 $ 571,560 VDF VN$ 469,260 CP VN$ 102,300
Micro Lending S.A.U. III 06/08/2011 10/12/2016  $ 39,779 VDF TV A VDF B VN$ 31,823 VN $ 6,364 CP VN$ 1,592
Micro Lending S.A.U. IV 09/01/2011 06/29/2017  $ 40,652 VDF TV A VDF B VN$ 32,522 VN $ 6,504 CP VN$ 1,626
Micro Lending S.A.U. XVIII 12/01/2017 10/15/2022  $ 119,335 VDF TV A VDF TV B VN $ 89,501 VN $ 7,291 CP VN$ 22,543

 

The Group controls a structured entity when it is exposed to, or holds the right to, variable returns and has the capacity to allocate returns through its power to run the activities of the entity, Structured entities are consolidated as from the date on which the control is transferred to the Group. The consolidation of such entities is ceased on the date on which such control is terminated.

 

As for financial trusts, the Group has evaluated the following:

 

• The purpose and design of the trust

• Identification of relevant activities

• Decision-making process on these activities

• If the rights that the Group owns allow it to direct the relevant activities of the trust

• If the Group is exposed, or is entitled to the variable results from its participation in said trust

• If the Group has the capacity to affect said results through its power over the trust

 

In accordance with the aforementioned, the Group has decided that it holds control on such financial trusts and, therefore, such structured entities have been consolidated.

 

The following chart details the assets and liabilities of Structured Entities that have been consolidated by the Group as of March 31, 2020:

 

 
 26 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

   03/31/2020   12/31/2019 
Assets        
Loans   1,197,138    1,719,040 
Financial assets   108,003    117,328 
Other assets   181,790    314,442 
Total Assets   1,486,931    2,150,810 
Liabilities          
Financial liabilities   672,464    1,535,583 
Other liabilities   50,888    44,877 
Total Liabilities   723,352    1,580,460 

 

1.7.Foreign currency translation

 

(a)  Functional and presentation currency

 

Figures included in the consolidated financial statements as per each entity of the Group are expressed in the functional currency, that is, in the currency of the main economic setting where it operates. Consolidated condensed interim financial ftatements are expressed in Argentine pesos, which is the functional currency and the reporting currency of the Group.

 

(b)  Transactions and balances

 

Transactions in foreign currency are converted in the functional currency at the reference Exchange rate released by the Argentine Central Bank and those carried out in other currencies, at the repo rate in US dollars for the reference Exchange rate released by the Argentine Central Bank. Earnings and losses in foreign currency that result in the liquidation of such transactions and the conversion of monetary assets and liabilities denominated in foreign currency at closing exchange rates, are recognized in the integral income statement, under “Difference of exchange rate in gold and foreign currency”, except when such items are deferred in the shareholders’ equity for transactions classified as cash flow hedging, when applicable.

 

As of March 31, 2020 and December 31, 2019 the balances in US dollars were converted at the reference exchange rate determined by the Argentine Central Bank. In the case of foreign currencies other than US dollars, they have been converted to this currency using the types of passes reported by the Argentine Central Bank.

 

1.8.Cash and due from banks

 

Cash and due from banks includes cash available, freely available deposits in local banks and correspondent banks abroad, which are liquid short-term instruments and have a maturity of less than three months from the date of origination.

 

Assets recorded in cash and due from Banks are recorded at amortized cost which is close to its fair value.

 

Cash equivalents are made up by highly liquid short-term securities with three-month or shorter initial maturities, with fair value rating.

 

The composition of the cash on each of the indicated dates is detailed below:

 

Item  03/31/2020   12/31/2019   03/31/2019   12/31/2018 
Cash and due from banks   35,747,888    28,462,415    46,037,310    55,864,271 
Debt securities at fair value through profit or loss   330,587    612,841    48,577,167    20,950,114 
Money Market Funds   624,326    1,100,784    1,026,451    1,087,122 
Cash and cash equivalents   36,702,801    30,176,040    95,640,928    77,901,507 

  

 
 27 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

For their part, the reconciliations between the balances of those items considered cash equivalents in the Statement of Cash Flow and those reported in the Statement of Financial Position as of the indicated dates are set out below:

 

Items  03/31/2020   12/31/2019   03/31/2019   12/31/2018 
Cash and due from Banks                
As per Statement of Financial Position   35,747,888    28,462,415    46,037,310    55,864,271 
As per the Statement of Cash Flows   35,747,888    28,462,415    46,037,310    55,864,271 
Debt securities at fair value through profit or loss                    
As per Statement of Financial Position   487,107    612,841    52,246,014    25,065,481 
 Securities not considered as cash equivalents   (156,520)   -    (3,668,847)   (4,115,367)
 As per the Statement of Cash Flows   330,587    612,841    48,577,167    20,950,114 
Money Market Funds                    
As per Statement of Financial Position – Other financial assets   2,710,995    2,260,412    5,147,053    2,844,880 
Other financial assets not considered as cash   (2,086,669)   (1,159,628)   (4,120,602)   (1,757,758)
 As per the Statement of Cash Flow   624,326    1,100,784    1,026,451    1,087,122 

 

Reconciliation of financing activities at March 31, 2020 and December 31, 2019 is as follows:

 

Items

Balances at
12/31/2019

Cash Flows Other non-cash
movements
Balances at
03/31/2020
Inflows Payments
Unsubordinated Negotiable Obligations 6,561,191 314,399 (2,763,393) - 4,112,197
Subordinated Negotiable Obligations 2,285,229 - (373,772) - 1,911,457
Financing received from the Argentine Central Bank and other financial institutions 9,720,927 7,464,280 (8,775,560) - 8,409,647
Lease Liabilities 1,020,203 - (355,890) 246,958 911,271
Total 19,587,550 7,778,679 (12,268,615) 246,958 15,344,572

 

2.SEGMENT REPORTING

 

The Group determines operating segments based on performance reports which are reviewed by the Board and key personnel of the Senior Management and updated upon changes.

 

With the purpose of implementing a strategic vision focused on the individual client and Small and Medium Size Companies that require and values closeness and digital service models, the Retail Banking sector turned into a new area of Individuals and Businesses.

 

In this sense, Small and Medium Size Companies clients and the loan portfolio have been transferred from the Corporate Division to the Individuals and Businesses area. Such change became effective on Junuary 1, 2020. The comparative information as of March 31, 2019 and December 31, 2019 was modified with the purpose of showing the new organization and making it comparable to information as of March 31, 2020.

 

As from January 1, 2020, the Bank´s clients receive the following services:

 

• Individuals and Businesses Segment:

 

- Small companies, individuals and companies that record anual sales of up to 100,000

- “Small and Medium Size Companies”, companies that record anual sales of over 100,000 up to 700,000

 

• Corporate Baking Segment:

 

- Megras that record anual sales over 700,000 up to 2,500,000

- Big Companies. Grandes companies that record anual sales of over 2,500,000

 

The Group considers the business for the type of products and services offered, identifying the following operating segments:

 

a-Individuals and Businesses – Includes a wide range of financial products and services targeted to small comoanies, included in Entrepreneours & SMSs, and high income people identified with so-called Identité proposal. Likewise, the Bank offers services and products targeted to retirees and pensioneers.
b-Corporate Banking – Includes advisory services at a corporate and financial level, as well as the administration of assets and loans targeted to big clients.
c-Treasury: This segment is in charge of the assignment of liquidity of the Entity in accordance with the different commercial areas´ needs and its own needs, Treasury implements financial risk administration policies of the Bank, administers trading desk operations, distributes financial products, such as negotianle securities and develops business with the financial sector clients and whole sale non-financial sector clients.
d-Consumer – Includes loans and other credit products targeted to middle and lowed-middle income sectors and non-financial products and services.

 

 
 28 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

e-Insurance: Includes insurance products, with a focus on life insurance, to targeted customers segments.
f-Mutual Fund Administration and Other Segments – Includes MFs administered by the Group, Includes also assets, liabilities and results of Micro Lending S.A.U., Invertir Online,Com Argentina S.A.U., InvertirOnline S.A.U., Bolsillo Digital S.A.U and Futuros del Sur S.A

 

Operating results of the different operating segments of the Group are reviewed individually with the purpose of taking decisions over the allocation of resources and the performance appraisal of each segment. The performance of such segments will be evaluated based on operating earnings and losses and is measured consistently with operating earnings and losses of the consolidated earnings and losses statement.

 

When a transaction is carried out between operating segments, they are taken in an independent and equitative manner, as in cases of transactions with third parties. Later, income, expenses and results from transfers between operating segments are removed from the consolidation.

 

The Group does not present information by geographical segments because there are no operating segments in economic environments with risks and returns that are significantly different.

 

The following chart includes information by segment as of March 31, 2020 and 2019:

 

Result by segments  Individuals
and
Businesses
Banking
   Corporate
Banking
   Treasury   Consumer   Insurance  Adm.
MF and
other
segments
   Adjustments   Total as of
03.31.2020
 
Interest income  4,970,826   3,137,613   4,116,678   957,775   -  24,051   (138,587)  13,068,356 
Interest expenses  (1,780,690)  (299,577)  (3,715,185)  (382,112)  -  (8,207)  147,494   (6,038,277)
Distribution of results by Treasury  882,393   (1,946,892)  1,064,499   -   -  -   -   - 
Net interest income  4,072,529   891,144   1,465,992   575,663   -  15,844   8,907   7,030,079 
Services Fee Income  1,671,954   155,275   29,186   399,425   -  208,375   (57,234)  2,406,981 
Services Fee Expenses  (434,606)  (38,252)  (12,179)  (178,519)  -  (7,379)  1,511   (669,424)
Income from insurance activities  -   -   -   -   282,439  -   40,914   323,353 
Net Service Fee Income  1,237,348   117,023   17,007   220,906   282,439  200,996   (14,809)  2,060,910 
Subtotal  5,309,877   1,008,167   1,482,999   796,569   282,439  216,840   (5,902)  9,090,989 
Net income from financial instruments at fair value through profit or loss  -   -   114,207   24,285   72,259  34,634   59,455   304,840 
Income from withdrawal of assets rated at amortized cost  -   -   11,634   -   -  -   -   11,634 
Exchange rate difference on gold and foreign currency  28,199   13,366   39,783   (118)  (11) 7,784   4,868   93,871 
NIFFI And Exchange Rate Differences  28,199   13,366   165,624   24,167   72,248  42,418   64,323   410,345 
Other operating income  364,969   317,215   42,163   66,010   2,208  31,176   (4,623)  819,118 
Result from exposure to changes in the purchasing power of the currency  (173,070)  (87,983)  (251,668)  (218,501)  (80,166) (34,070)  (23,888)  (869,346)
Loan loss provisions  (764,433)  (599,535)  (13,425)  (201,098)  -  (2,090)  -   (1,580,581)
Net operating income  4,765,542   651,230   1,425,693   467,147   276,729  254,274   29,910   7,870,525 
Personnel expenses  (2,629,961)  (252,324)  (165,167)  (349,274)  (56,826) (82,595)  (25,789)  (3,561,936)
Administration expenses  (1,287,391)  (87,764)  (76,507)  (304,608)  (54,028) (80,916)  72,668   (1,818,546)
Depreciations and impairment of non-financial assets  (345,489)  (24,571)  (38,479)  (26,242)  (3,851) (973)  (12,304)  (451,909)
Other operating expenses  (716,461)  (293,847)  (109,630)  (110,287)  (86) (6,272)  (4,556)  (1,241,139)
Operating income  (213,760)  (7,276)  1,035,910   (323,264)  161,938  83,518   59,929   796,995 
Result  from associates and joint ventures  -   -   -   32   -  -   (32)  - 
Result before taxes  (213,760)  (7,276)  1,035,910   (323,232)  161,938  83,518   59,897   796,995 
Income tax  77,846   2,651   (377,254)  69,603   (67,204) (43,047)  (5,831)  (343,236)
Net income  (135,914)  (4,625)  658,656   (253,629)  94,734  40,471   54,066   453,759 
Net income for  the  period attributable to owners of the parent company  (135,914)  (4,625)  658,656   (253,629)  94,734  40,471   53,683   453,376 
Net income for the period attributable to non-controlling interest  -   -   -   -   -  -   383   383 
Other comprehensive income  (13,835)  (9,763)  (24,641)  -   -  -   -   (48,239)
Other comprehensive income attributable to owners of the parent company  (13,835)  (9,763)  (24,641)  -   -  -   49   (48,190)
Other comprehensive income attributable to non-controlling interest  -   -   -   -   -  -   (49)  (49)
Comprehensive income for the period  (149,749)  (14,388)  634,015   (253,629)  94,734  40,471   54,066   405,520 
Comprehensive income attributable to owners of the parent company  (149,749)  (14,388)  634,015   (253,629)  94,734  40,471   53,732   405,186 
Comprehensive income attributable to non-controlling interests  -   -   -   -   -  -   334   334 

 

 
 29 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

Assets by segments  Individuals
and
Businesses
Banking
  Corporate
Banking
  Treasury  Consumer  Insurance  Adm.
MF and
other
segments
  Adjustments  Total as of
03.31.2020
 
Cash and due from banks  9,052,887  467,991  25,641,607  247,349  4,041  3,691,978  (3,357,965) 35,747,888 
Debt securities at fair value through profit or loss  -  -  260,060  101,022  -  126,025  -  487,107 
Loans and other financing  41,954,160  37,904,985  2,819,257  5,982,719  511,500  45,295  (434,092) 88,783,824 
Other Assets  1,548,778  4,444,201  52,850,510  2,812,245  1,318,202  603,200  8,377,019  71,954,155 
Total Assets  52,555,825  42,817,177  81,571,434  9,143,335  1,833,743  4,466,498  4,584,962  196,972,974 
                          
Liabilities by segments                         
Deposits  74,732,411  14,831,832  47,471,063  2,547,229  -  -  (3,787,033) 135,795,502 
Financing received from the Argentine Central Bank and others financial institutions  11,288  -  8,039,717  465,960  -  54,787  (162,105) 8,409,647 
Unsubordinated Negotiable obligations  59,526  30,259  4,080,774  -  -  11,669  (70,031) 4,112,197 
Other liabilities  4,216,876  1,646,768  4,612,084  2,893,271  1,059,712  3,815,041  3,909,856  22,153,608 
Total Liabilities  79,020,101  16,508,859  64,203,638  5,906,460  1,059,712  3,881,497  (109,313) 170,470,954 

 

Result by segments  Individuals
and
Businesses
Banking
  Corporate
Banking
  Treasury  Consumer  Insurance  Adm.
MF and
other
segments
  Adjustments  Total as of
03.31.2019
 
Interest income  6,273,770  3,780,520  916,716  1,675,608  -  86,455  (462,838) 12,270,231 
Interest expenses  (2,189,506) (1,080,160) (6,551,861) (1,026,029) -  (52,659) 524,094  (10,376,121)
Distribution of results by Treasury  713,140  (1,261,615) 548,475  -  -  -  -  - 
Net interest income  4,797,404  1,438,745  (5,086,670) 649,579  -  33,796  61,256  1,894,110 
Services Fee Income  1,455,210  329,722  12,916  492,239  -  190,374  (74,927) 2,405,534 
Services Fee Expenses  (295,005) (33,438) (10,375) (181,518) -  (10,477) 24,646  (506,167)
Income from insurance activities  -  -  -  -  234,517  -  86,928  321,445 
Net Service Fee Income  1,160,205  296,284  2,541  310,721  234,517  179,897  36,647  2,220,812 
Subtotal  5,957,609  1,735,029  (5,084,129) 960,300  234,517  213,693  97,903  4,114,922 
Net income from financial instruments at fair value through profit or loss  1,384  -  6,765,214  (24,675) 136,086  58,368  72,006  7,008,383 
Exchange rate difference on gold and foreign currency  281,638  32,042  (781,669) 384  -  10,490  (16,216) (473,331)
NIFFI And Exchange Rate Differences  283,022  32,042  5,983,545  (24,291) 136,086  68,858  55,790  6,535,052 
Other operating income  369,867  273,623  28,008  128,803  1,948  54,649  (32,780) 824,118 
Result from exposure to changes in the purchasing power of the currency  (576,659) (681,281) (143,894) (353,346) (136,015) (101,151) 297,541  (1,694,805)
Loan loss provisions  (911,381) (1,266,865) 11,894  (725,343) -  (4,894) -  (2,896,589)
Net operating income  5,122,458  92,548  795,424  (13,877) 236,536  231,155  418,454  6,882,698 
Personnel expenses  (2,570,992) (258,657) (186,186) (370,213) (45,894) (108,045) (48,065) (3,588,052)
Administration expenses  (1,379,708) (85,835) (87,893) (310,268) (52,426) (69,446) 22,393  (1,963,183)
Depreciations and impairment of non-financial assets  (321,173) (21,199) (26,497) (27,028) (2,126) (909) (12,301) (411,233)
Other operating expenses  (834,494) (386,062) (128,749) (179,952) (1,033) (19,473) (2,219) (1,551,982)
Operating income  16,091  (659,205) 366,099  (901,338) 135,057  33,282  378,262  (631,752)
Result  from associates and joint ventures  -  -  -  528  -  (568) 40  - 
Result before taxes from continuing operations  16,091  (659,205) 366,099  (900,810) 135,057  32,714  378,302  (631,752)
Income tax  (275,463) 102,779  (215,054) 118,258  (80,177) (52,725) (320,732) (723,114)
Net income  (259,372) (556,426) 151,045  (782,552) 54,880  (20,011) 57,570  (1,354,866)
Net income for  the  period attributable to owners of the parent company  (259,372) (556,426) 151,045  (782,552) 54,880  (20,011) 58,951  (1,353,485)
Net income for the period attributable to non-controlling interest  -  -  -  -  -  -  (1,381) (1,381)
Other comprehensive income  -  -  (2,010) -  455  -  -  (1,555)
Other comprehensive income attributable to owners of the parent company  -  -  (2,010) -  455  -  1  (1,554)
Other comprehensive income attributable to non-controlling interest  -  -  -  -  -  -  (1) (1)
Comprehensive income for the period  (259,372) (556,426) 149,035  (782,552) 55,335  (20,011) 57,570  (1,356,421)
Comprehensive income attributable to owners of the parent company  (259,372) (556,426) 149,035  (782,552) 55,335  (20,011) 58,952  (1,355,039)
Comprehensive income attributable to non-controlling interests  -  -  -  -  -  -  (1,382) (1,382)

 

 
 30 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

Assets by segments  Individuals
and
Businesses
Banking
  Corporate
Banking
  Treasury  Consumer  Insurance  Adm.
MF and
other
segments
  Adjustments  Total as of
12.31.2019
 
Cash and due from banks  8,291,510  1,102,698  18,186,347  346,193  3,649  2,609,796  (2,077,778) 28,462,415 
Debt securities at fair value through profit or loss  -  -  336,664  99,997  -  176,180  -  612,841 
Loans and other financing  45,093,810  41,474,831  4,014,695  6,253,153  489,386  33,144  (1,525,497) 95,833,522 
Other Assets  2,546,891  1,267,256  19,478,080  2,959,933  1,176,463  580,610  7,968,133  35,977,366 
Total Assets  55,932,211  43,844,785  42,015,786  9,659,276  1,669,498  3,399,730  4,364,858  160,886,144 

 

Liabilities by segments  Individuals
and
Businesses
Banking
  Corporate
Banking
  Treasury  Consumer  Insurance  Adm.
MF and
other
segments
  Adjustments  Total as of
12.31.2019
 
Deposits  68,360,141  11,466,875  16,899,282  1,757,558  -  -  (2,533,464) 95,950,392 
Financing received from the Argentine Central Bank and others financial institutions  13,588  -  9,700,590  1,023,841  -  49,609  (1,066,701) 9,720,927 
Unsubordinated Negotiable obligations  116,969  82,540  6,344,911  -  -  16,771  -  6,561,191 
Other liabilities  5,027,539  1,485,588  4,693,043  3,447,545  817,105  2,785,226  4,301,088  22,557,134 
Total Liabilities  73,518,237  13,035,003  37,637,826  6,228,944  817,105  2,851,606  700,923  134,789,644 

 

3.

FAIR VALUES

The portfolio of financial instruments held by the Group is detailed below, as of March 31, 2020 and December 31, 2019:

 

Instrument portfolio as of 03/31/2020  FV level 1   FV level 2   FV level 3 
Assets            
- Cash and due from banks   26,275    -    - 
- Debt securities at fair value through profit or loss   281,703    202,878    2,526 
- Derivatives   143,424    -    - 
- Other financial assets   2,710,995    -    - 
- Other debt securities   -    41,572,682    - 
- Financial assets in guarantee   5,610,753    -    - 
- Investments in Equity Instruments   -    8,783    - 
Total Assets   8,773,150    41,784,343    2,526 
Liabilities               
- Liabilities at fair value through profit or loss   365,736    -    - 
- Other financial liabilities   5,684,843    -    - 
Total Liabilities   6,050,579    -    - 

 

Instrument portfolio as of 12/31/2019  FV level 1   FV level 2   FV level 3 
Assets            
- Cash and due from banks   32,243    -    - 
- Debt securities at fair value through profit or loss   438,248    170,636    3,957 
- Derivatives   277,678    -    - 
- Other financial assets   833,713    -    - 
- Other debt securities   7,730,488    -    - 
- Financial assets in guarantee   5,308,631    -    - 
- Investments in Equity Instruments   6,248    9,468    - 
Total Assets   14,627,249    180,104    3,957 
Liabilities               
- Liabilities at fair value through profit or loss   204,338    -    - 
- Other financial liabilities   6,464,455    -    - 
Total Liabilities   6,668,793    -    - 

 

Under IFRS, the estimated residual value of an instrument at inception is generally the transaction price. In the event that the transaction price differs from the determined fair value, the difference will be recognized in the income statement proportionally for the duration of the instrument. As of March 31, 2020, there have been no differences regarding the transaction price.

 

 
 31 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

Fair Value of Other Financial Instruments

 

The following chart includes a comparison between the fair value and the accounting value of financial instruments not recorded at fair value as of March 31, 2020 and December 31, 2019:

 

Other Financial Instruments as of
03/31/2020
  Accounting
value
   Fair value   FV Level 1   FV Level 2   FV Level 3 
Financial Assets                         
-Cash and due from Banks   35,721,613    35,721,613    35,721,613    -    - 
-Loans and other financing   88,783,824    77,100,198    -    -    77,100,198 
- Repo transactions   79,143    79,143    79,143    -    - 
- Other Debt Securities   5,084,291    3,635,804    3,635,804    -    - 
-Financial assets in as guarantee   211,721    211,721    211,721    -    - 
    129,880,592    116,748,479    39,648,281    -    77,100,198 
Financial Liabilities                         
-Deposits   135,795,502    134,235,654    -    -    134,235,654 
- Other financial liabilities   4,202,815    4,202,815    4,202,815    -    - 
- Repo transactions   269,910    269,910    269,910    -    - 
-Finances received from the BCRA and other financial institutions   8,409,647    7,853,833    -    -    7,853,833 
- Negotiable obligations issued   4,112,197    4,112,197    4,112,197    -    - 
- Subordinated Negotiable Obligations   1,911,457    2,243,070    2,243,070    -    - 
    154,701,528    152,917,479    10,827,992    -    142,089,487 

 

Other Financial Instruments as of
12/31/2019
  Accounting
value
   Fair value   FV Level 1   FV Level 2   FV Level 3 
Financial Assets                    
-Cash and due from Banks   28,430,172    28,430,172    28,430,172    -    - 
-Other financial assets   1,426,699    1,426,699    1,426,699    -      
-Loans and other financing   95,833,522    99,743,937    -    -    99,743,937 
- Other Debt Securities   3,543,786    3,862,642    3,862,642    -    - 
-Financial assets in as guarantee   441,077    441,077    441,077    -    - 
    129,675,256    133,904,527    34,160,590    -    99,743,937 
Financial Liabilities                         
-Deposits   95,950,392    95,952,158    -    -    95,952,158 
-Other financial liabilities   3,133,578    3,133,578    3,133,578    -    - 
-Repo transactions   344,761    344,761    344,761    -    - 
-Finances received from the BCRA and other financial institutions   9,720,927    9,462,728    -    -    9,462,728 
- Negotiable obligations issued   6,561,191    6,561,191    6,561,191    -    - 
- Subordinated Negotiable Obligations   2,285,229    2,552,816    2,552,816    -    - 
    117,996,078    118,007,232    12,592,346    -    105,414,886 

 

4.RELATED PARTY TRANSACTIONS

 

Related parties are considered to be all those entities that directly, or indirectly through other entities, control over another, are under the same control or may exercise significant influence over the financial or operational decisions of another entity.

 

The Group controls another entity when it has power over the financial and operating decisions of other entities and in turn obtains benefits from it. On the other hand, the Group considers that it has joint control when there is an agreement between the parties regarding the control of a common economic activity.

 

Finally, those cases in which the Group has significant influence is due to the power to influence the financial and operating decisions of another entity but not being able to exercise control over them. For the determination of such situations, not only the legal aspects are observed but also the nature and substance of the relationship.

 

Additionally, related parties are considered to be the key personnel of the Group's Management (members of the Board and managers of the Group and its subsidiaries), as well as the entities over which key personnel may exercise significant influence or control.

 

 
 32 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

Controlling Entity

 

Mr. Julio Patricio Supervielle is the main shareholder of the Groups, with registered address on Bartolomé Mitre 434, 5th floor, Autonomous City of Buenos Aires. Julio Patricio Supervielle´s interest in the capital and votes of the Group as of March 31, 2020 and December 31, 2019 amounts to the 35.12% and 57.89%, respectively.

 

Related party transactions

 

The financing, including the ones that were restructured, were granted in the normal course of business and in substantially the same terms, including interest rates and guarantees, as those in force at the time to grant credit to unrelated parties. Likewise, they did not imply a higher than normal risk of bad debt or presented other types of unfavorable conditions.

 

5.COMPOSITION OF THE MAIN ITEMS OF THE CONSOLIDATED COMPREHENSIVE INCOME

 

   Three-month period ended  on 
   03/31/2020   03/31/2019 
5.1 Interest income          
Interest on overdrafts   780,795    1,217,365 
Interest on promissory notes   1,323,014    1,519,016 
Interest on personal loans   2,937,008    3,837,854 
Interest on promissory notes   1,582,735    1,709,670 
Interest on credit card loans   971,721    1,496,937 
Interest on mortgage loans   864,081    908,990 
Interest on automobile and other secured loan   152,034    186,024 
Interest on foreign trade loans   334,865    492,024 
Interest on financial leases   153,535    383,264 
Others   3,968,568    519,087 
    13,068,356    12,270,231 

5.2 Interest expenses          
Interest on current accounts deposits   918,270    2,066,817 
Interest on time deposits   4,176,392    5,694,069 
Interest on other liabilities from financial transactions   666,368    2,242,662 
Interest from financing from financial sector   149,297    97,909 
Others   127,950    274,664 
    6,038,277    10,376,121 

 

5.3 Net income from financial instruments at fair value through profit or loss          
Income from corporate and government securities   234,340    871,694 
Income from securities issued by the Argentine Central Bank   31,502    6,047,808 
Derivatives   38,998    88,881 
    304,840    7,008,383 

 

5.4 Service fee income          
Commissions from deposit accounts   1,041,675    1,006,469 
Commissions from credit and debit cards   790,125    771,070 
Commissions from loans operations   66,027    100,714 
Commissions from foreign trade   -    85,356 
Commissions from miscellaneous operations   488,011    393,554 
Others   21,143    48,371 
    2,406,981    2,405,534 

 

 
 33 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

   Three-month period ended  on 
   03/31/2020   03/31/2020 
5.5 Service fee expenses          
Commissions paid   662,616    485,390 
Export and foreign currency operations   6,808    20,777 
    669,424    506,167 

 

5.6 Other operating incomes           
Loans recovered and allowances reversed   337,021    135,478 
Insurance commissions   15,403    4,574 
Rental from safety boxes   68,042    77,694 
Commissions from trust services   4,582    1,271 
Returns of risk funds   57,920    64,678 
Sales of property, plant and equipment   1,802    3,638 
Miscellaneous credit adjustments   27,778    45,231 
Default interests   91,339    177,196 
Others   215,231    314,358 
    819,118    824,118 

 

5.7 Personnel expenses          
Payroll and social securities   3,197,614    3,247,498 
Personnel expenses   364,322    340,554 
    3,561,936    3,588,052 

 

5.8 Administration expenses          
Directors´ and statutory auditors´fees   38,274    64,000 
Other fees   488,969    257,344 
Advertising and publicity   114,466    141,920 
Taxes   365,527    419,235 
Maintenance, security and services   574,837    468,662 
Rent   17,996    14,693 
Others   218,477    597,329 
    1,818,546    1,963,183 

 

5.9 Depreciation and impairment of non-financial assets          
Depreciation of property, plant and equipment (Schedule F)   95,634    120,482 
Depreciation of miscellaneous assets   50,286    33,811 
Amortization of intangible assets (Schedule G)   147,168    107,653 
Depreciation of rent asstes by right of use  (Schedule F)   158,821    149,287 
    451,909    411,233 

 

5.10 Other operating expenses          
Promotions related with credit cards   117,976    140,569 
Turnover tax   831,046    1,033,444 
Result by initial recognition of loans   42,207    66,105 
Charges paid to National Social Security Administration (ANSES)   38,353    50,106 
Frauds   13,325    11,458 
Balance adjustments loans and credit cards   30,620    23,544 
Interests for leases liabilities   37,597    62,420 
Coverage services   3,863    7,772 
Contributions made to deposit insurance fund   46,103    68,026 
Others   80,049    88,538 
    1,241,139    1,551,982 

 

 
 34 

 

GRUPO SUPERVIELLE S.A.

(Expressed in thousands of pesos in homogeneous currency)

 

6.DIVIDENDS

 

On April 28, 2020, the Shareholders’ General Meeting approved the following distribution of retained earnings for the year ended on December 31, 2019 which shows a profit of 4,257,933:

 

*       Reserve for future dividends: 426,000,

*       Other reserve: 3,831,933

 

7.INSURANCE

 

The composition of “Income from insurance activities” as of March 31, 2020 and 2019, is as follows:

 

Item  03/31/2020   03/31/2019 
Accrued premiums   469,166    488,509 
Accrued losses   (65,761)   (56,872)
Production expenses   (80,052)   (110,192)
Total   323,353    321,445 

 

8.MUTUAL FUNDS

 

As of March 31, 2020 and December 31, 2019, Banco Supervielle S.A. is the depository of the Mutual Funds managed by Supervielle Asset Management S.A. In accordance with CNV General Resolution No. 622/13, below are the portfolio, net worth and number of units of the Mutual Funds mentioned earlier.

 

Mutual Fund  Portfolio   Net Worth   Number of Units 
   03/31/2020   12/31/2019   03/31/2020   12/31/2019   03/31/2020   12/31/2019 
Premier Renta CP en Pesos   19,691,885    15,126,348    19,661,664    15,103,196    5,210,548,181    3,958,398,573 
Premier Renta Plus en Pesos   129,171    117,660    127,872    115,562    11,111,344    10,250,999 
Premier Renta Fija Ahorro   631,381    501,730    626,490    495,335    15,890,152    12,851,475 
Premier Renta Fija Crecimiento   52,874    50,582    52,651    50,296    3,650,185    3,688,485 
Premier Renta Variable   104,752    179,369    104,230    176,790    7,397,599    6,982,580 
Premier Abierto Pymes   616,249    604,068    614,569    602,709    92,958,805    91,559,624 
Premier Commodities   32,985    22,680    22,529    14,653    3,962,046    2,596,034 
Premier Capital   126,697    139,125    126,519    138,758    31,739,096    36,057,519 
Premier Inversión   288,467    145,918    288,316    145,844    852,107,518    442,160,447 
Premier Balanceado   738,586    672,523    737,911    671,910    249,317,925    249,317,925 
Premier Renta Mixta   214,792    143,649    214,547    143,532    104,502,581    76,562,093 
Premier Renta Mixta en Dólares   107,987    140,368    107,471    139,852    2,671,646    2,815,589 
Premier Performance Dólares   465,278    489,287    464,762    488,190