Grupo Supervielle SA (SUPV) 2024 Q4 法說會逐字稿

Good morning, everyone, and welcome to Grupo Supervielle's Fourth Quarter and Year End 2024 Earnings Call. I'm Ana Bartesaghi, Treasurer and IRO. Today's conference call is being recorded. (Event Instructions)

Speaking today will be Patricio Supervielle, our Chairman and CEO; Gustavo Paco Manriquez, Banco Supervielle's CEO; Diego Pizzulli, CEO of invertironline; and Mariano Biglia, our CFO. All will be available during the Q&A session.

Before we begin, I'd like to remind you that today's call may include forward-looking statements, which are based on management's current expectations and beliefs and subject to risks and uncertainties. For more details, refer to the forward-looking statements section in our earnings release and recent SEC filings.

Patricio, please go ahead.

Thank you, Ana. Good morning, everyone, and thank you for joining us today. As we enter 2025, we look back on 2024 as a year of significant transformation, not just for Supervielle, but for Argentina's financial systems as a whole.

Last year marked an inflection point to banks as we are able to return to our core purpose, financing growth and creating value for the communities we serve. At Supervielle, we anticipated this shift early on, took decisive action and continue to make the right long-term investment to drive sustainable value.

With a clear focus on profitable growth, we prioritized completing the digital transformation started in 2020 while expanding our loan book and strengthening our deposit base as conditions improved. This approach enabled us to gain market share across key segments while maintaining strong asset quality and solid capital ratios.

In the fourth quarter, driven by an improving macro environment, we saw continued momentum. Our loan book expanded 27% quarter over quarter and 120 -- 107% year on year, more than doubling the 50% industry growth while gaining 90 basis points of market share. Higher margin retail loans increased to 48% of our total portfolio, up from 44% in the prior quarter and from 40% a year ago.

Our deposit base grew 7% sequentially with US dollar deposits reaching record levels, up 178% year over year and gaining 80 basis points during the year. We continued to operate from a position of strength with the non-performing loan ratio increasing slightly to 1.3%, but still within historical low levels.

A CET1 ratio of 16.1% positions us well to continue to drive growth. Net interest margin stood at 25%, adjusting to current inflation and interest rate levels with annual profitability reaching an ROE of 15.7%, in line with our target for the year as we successfully executed on our strategic road map.

Beyond the numbers, 2024 was about laying the groundwork for long-term sustainable growth. The second half of the year, and particularly clearly demonstrated the impact of our transformation efforts. We successfully implemented a major digitalization strategy, which has fundamentally enhanced our operating model. We are now a more agile, tech-driven institution ready to scale.

Invertironline further solidify our position as Argentina's leading digital retail brokerage platform, well-positioned to contribute significantly to our fee income and profitability as Diego Pizzulli will discuss shortly. This was also a year of leadership and organizational readiness with our two key businesses led by two exceptional CEOs that report directly to me.

Paco Manriquez, appointed CEO of Banco Supervielle last October, has swiftly redefined our commercial strategy to position the bank for 2025 and beyond, while Diego Pizzulli continues to drive IOL invertironline expansion. I'm very pleased to have these two outstanding leaders as partners working together to take Grupo Supervielle to the next level of profitability and growth.

As we move forward, our strategic focus remains clear. We are committed to consolidating profitability, driving sustainable growth, and strengthening our culture as a key enabler for our success. By building on our solid foundation, executing with discipline and capitalizing on new opportunities, we are well-positioned to enhance shareholder value while expanding our role in Argentina's evolving financial landscape. Profitability, growth, and culture, these three pillars define our vision and will continue guiding us into the future. With confidence in our strategy, we approach 2025 with optimism.

Now, let me discuss some of the specifics of our strategy. Our strategic growth priorities are centered on developing value propositions that can compete effectively with fintechs that are not easily replicable by incumbent banks.

A strong focus on funding and payroll loans is key to becoming the principal bank for more of our customers. Pensioner banking has been a historically strong segment for Supervielle, and we are committed to reinforcing our leadership position in this segment. At the same time, we continue to expand our presence in dynamic industries and value chains such as oil and gas and mining, where Argentina's resource wealth present significant long-term growth opportunities.

Pent-up demand is fueling credit expansion and creating a unique opportunity to accelerate loan growth. To capture this demand, we are shifting our portfolio mix towards higher-margin retail lending, optimizing capital efficiency and profitability. As a result, the retail loans are expected to reach 50% to 60% of total loans, up from 40% at year-end 2023. Our capital allocation strategy is focused on driving balance sheet growth while maintaining strong risk management discipline.

Our differentiated business model is designed to drive higher profitability and long-term value creation. With industry-leading net interest margins and a stronger return on equity as we optimize capital efficiency, expand fee-based income and continue to streamline costs and headcount, we are well-positioned to generate sustainable capital, supporting continued growth and reinforcing our competitive advantage in Argentina's evolving financial landscape.

Lastly, invertironline is in the strongest position to play an even larger role in our profitability as we expand the product offering, further integrated into our banking ecosystem and capture the nascent and growing opportunities in Argentina's financial market by offering a broad range of financial services tailored to the Retail, Wealth, and Small Business segments.

I am excited about the opportunities ahead and confident that Supervielle is positioned to play a leading role in Argentina's economic recovery. With that, let me turn it over to Paco, who will provide an overview of key initiatives being undertaken at Banco Supervielle and views ahead.

Thank you, Patricio, and good day to all. Since joining Banco Supervielle in October, my priority has been to sharpen our strategic focus, accelerating growth and positioning the bank for long-term sustainable profitability. Given Argentina's evolving macroeconomic environment of lower inflation, declining nominal interest rate and a surge in dollar deposits, we revitalized our commercial approach to capitalize on these positive dynamics and position ourselves for 2025, which we expect to be a year of real economic acceleration.

Our streamlined structure now enables faster decision-making and greater operational efficiency, ensuring that we can swiftly adapt to market opportunities and better serve our customers. At the same time, we are conducting a comprehensive risk management. And in the near-term, all customers are expected to have some credit offer, enhancing stability, cross-sell opportunities and growth.

During the fourth quarter, we moved shifted on quick wins, leveraging our existing customer base to drive immediate results while laying the groundwork for the future growth. In turn, our customer base expanded by 3.6%, reflecting improvement acquisition and engagement. The loan portfolio increased 27% quarter over quarter, doubling industry growth year on year. A key milestone was the record level of personal loan origination, up to 54% sequentially, underscoring our ability to meet rising credit demand.

Lastly, we maintain a disciplined approach to cost reduction, lowering head count by 2.4% in the quarter. These results underscore our ability to drive profitable growth while maintaining operational efficiency, ensuring a strong foundation for 2025 and beyond.

Turning to slide 6. At Banco Supervielle, we are taking bold steps to deepen our customer focus, concentrating on the most profitable segments and products where we can rapidly differentiate and win. Notably, profitability is our main [copy]. Starting with our customer-centric and technology-enabled strategy.

On this front, we are shaping our credit and service capabilities, streamlining service model and leveraging technology to the faster and more disruptive. Rather than acting as a universal player, we are focusing on the most profitable segments where we can truly compete head-to-head and win.

We are [experienced] financial industry leaders executing shift strategic move that set us apart and reinforce our leadership in the key segments. Next, we are implementing a cluster-based strategy and segmenting our customer and marketing strategy. We provide highly tailored differentiated value proposition aimed at incentive deposits and bundled solutions that enhance customer retention.

This approach creates a unique competitive advantage that are difficult to replicate. Let me briefly touch on two such segments. In Payroll and Corporate Solutions, we are rolling out of a shared benefits model designed to attract both companies and their employees. Our end-to-end payroll account offering aims to drive customer acquisition and deepen relation with corporates, making Supervielle the preferred banking partner for the Payroll Solution.

Also in the SME segment, we are enhancing credit options and cash management solutions. Through strategic partnerships with leading Argentine companies, we have reinforced our presence in the key industries and products. We are also prioritizing targeted corporate segments where we can create differentiated value long-term relationships. Our focus is on the high-growth industries such as oil and gas, mining and other export-driven sectors while executing disciplined capital allocation and strengthening our position as a principal bank for these companies.

Reflecting this commitment, a dedicated team from Banco Supervielle recently participated in the mining convention in Toronto, the world-leading mining industry event, which was also attended by Argentine government, officials, and provincial leaders. This aligns with our strategy to deepen relationships in the key sectors that drive the country economic growth.

The Province of Mendoza remains a strategic market for Banco Supervielle, where we have a long-standing leadership position and deepen customer relationships. We are committed to strengthening our presence in the province, further solidification our role as the leading financial institution in the region. We are also pursuing a selective expansion in the public sector banking, complementing our corporate banking strategy by providing tailored financial solutions to government institutions and state-linked organization.

Lastly, we are boosting and cross-selling with IOL customers, offering them a comprehensive suite of investment banking and FinTech solution, capturing high-value customers and broadening our reach. Currently, 97% of IOL customers do not bank with us, presenting a significant -- a huge opportunity to capture high-value clients and broaden our reach.

In sum, 2024 was a year of transformation and 2025 will be a year of acceleration. By executing with speed, focusing on high-value segment and driving synergies across our ecosystem, our own ecosystem. We are building a stronger, more sustainable profitability Banco Supervielle, well-positioning for long-term success.

Let me now turn to the call to Diego Pizzulli, CEO of IOL invertironline, who will review 2024 performance, key strategic initiatives and expectations for 2025.

Thank you, Paco, and good day to everyone. Similar to what you have heard throughout today's presentation, 2024 was also a year of strong momentum for IOL. We continue to expand our customer base, increase transaction volumes and solidify our position as Argentina's leading retail digital brokerage platform.

We closed December with 1.4 million accounts, up 57% year on year with average monthly active users for the full year increasing 70% to over 280,000. Transaction activity remained robust with daily average trading transactions up 67% year on year to over 100,000. This good performance drove total transactions to 26 million in 2024, up from 15 million in 2023, reinforcing IOL as a go-to platform for retail investors.

Our assets under custody reached $1.7 million, up 44% year on year, reflecting the strong adoption of our platform. A key highlight was the development of IOL Asset Management, where we successfully launched a US dollar-denominated mutual fund, reaching $126 million in AUM in just four months, now ranking as the fourth largest fund in each asset class in the country, including bank managed funds.

Our commitment to user experience remain a priority, reflected in over 160,000 app reviews and improved ratings of 4.6 stars on Google Play and 4.8 on the App Store. Notably, IOL was the most downloaded and active investment brokerage app in Argentina, reinforcing our market leadership in this segment. From a financial perspective, IOL contributed 15% of Grupo Supervielle's net income and 20% of total fee income, reinforcing its growing strategic relevance.

We delivered ARS17 billion in net income, up 36% year on year with an ROE of 107%, while revenues increased 20% to ARS51 million. Additionally, our strong financial position was underscored by cash flow generation of nearly $18 million, demonstrating the sustainability of our expansion strategy. Lastly, during 2024, we successfully scaled our Crypto business, capitalizing on the November bull run and seen over 22,000 active monthly crypto clients at peak levels.

We also expanded our corporate debt placement business among our clients by (inaudible) fold, executing 33 corporate bond issuances, up significantly from just 7 in 2023. This positions IOL as a key player in Argentina's evolving capital market landscape.

In sum, 2024 was a milestone year for IOL. By continuing to innovate, expand our product offering, and deepen our integration with Grupo Supervielle, we are confident in our ability to drive further growth and reinforce our leadership in Argentina's investment ecosystem.

Early indications for 2025 are positive with a more stable macroeconomic environment, lower interest rates and a controlled FX spread. This is expected to lead to a deepening capital market, attracting more investors and businesses looking for financing through debt and equity issuances in a true flywheel effect. To capitalize on this, our focus will be on three key areas.

First, strengthening retail and investment offerings. We are enhancing our one-stop shop investment platform, making it easier for retail investors to access all asset classes in a single place. With greater freedom in capital mobility, we expect renewed interest in direct investment in US assets, replicating patterns from the past stable periods. We are also developing crypto-related investment solutions, including the centralized yield-generating products to meet increasing demand.

Additionally, through our partnership with Banco Supervielle, we will offer traditional banking products, including time deposit and FX trading, integrating IOL deeper into the broader financial ecosystem. Second, expanding SMB and wealth management solution. We are scaling our SMB business by offering 24-hour account opening and 24/7 liquidity management.

We also plan to expand our newly established wealth management business through personalized products and advisory services tailored to affluent individuals, including having a physical presence in key strategic locations, leveraging Supervielle's branch network. And finally, scaling Investment-as-a-Service, asset management and capital markets. As Argentina's capital markets evolve, we see opportunities to enhance our offerings.

Through Investment as a Service, we provide Banco Supervielle with brokerage infrastructure, supporting its investment platform. In Asset Management, we will launch a new income-focused mutual fund, complementing our successful dollar-denominated fund to provide investors with more long-term options.

Finally, we will continue to expand our role in Capital Markets, scaling our corporate debt placement business. As more companies seek capital market financing, our goal is to be the leading digital retail platform facilitating these transactions.

Wrapping up, we are entering a new exciting phase of growth for IOL, where our focus is not only on scaling retail brokerage, but also on deepening institutional offerings, expanding our products and integrating further into Argentina's financial system. These results underscore our ability to drive profitable growth while maintaining operational efficiency, ensuring strong foundation for 2025 and beyond.

With this, let me turn the call to Mariano, who will go over our perspectives for 2025. Please go ahead.

Thank you, Diego, and good day, everyone. Now turning to slide 7 to review our perspectives for 2025, which assume annual inflation in the neighborhood of 25% and GDP growth of at least 5%. Loans more than doubled year on year with peso loans accounting for 75% of this growth and 25% by dollar-denominated loans.

For this year, we expect loans to grow above 60% in real terms with retail loans continuing to gain share of total loans rising to approximately 50% of total. Turning to deposits; we saw 7% sequential growth last quarter.

However, deposits declined 6% year on year, reflecting the sharp drop in industry peso deposits in the first quarter of 2024, which was only partially fully offset by the recovery that followed. For 2025, we anticipate deposits to continue expanding by approximately 40% in the year with the loan-to-deposit ratio continuing to improve. We expect to continue to gain share in dollar deposits.

On asset quality, the NPL ratio stood at a low of 1.3% in 4Q '24, even despite the impact from single client in the agribusiness sector, which was fully collateralized and represented just 0.4% of our total loan book. Looking ahead to 2025, we expect the NPL ratio to gradually convert towards normalized levels in the range of 2% to 2.2%, reflecting the anticipated increase in lending activity and a more balanced mix between retail and corporate loans.

In line with this trend, we anticipate our cost of risk to range between 3.7% and 4%, maintaining a [prudent] approach to risk management while supporting portfolio growth. With respect to NIM, we delivered a NIM of 24.8% in 4Q '24, in line with the prior quarter level, even despite lower inflation and a higher share of dollar loans in the quarter.

For 2025, we expect the NIM to adjust downwards to the range of 18% to 20%, reflecting the impact of further lower inflation and an increase in leverage. While we see some pressure on spreads, we expect that an increase in volumes and leverage will contribute to support financial margin.

Now please turn to slide 8. Next, we expect net fee income to grow above 10%, supported by multiple revenue drivers. Bank net fees are anticipated to increase, driven by higher fee income and lower fee expenses. Brokerage fees, in turn, are expected to continue expanding as we further leverage our retail customer base and introduce new business lines. Asset management fee income growth is expected to track the expansion of assets under management. Lastly, we see further upside in our Insurance business, benefiting from higher customer penetration.

Next, operating expenses increased 1% sequentially in the fourth quarter, including a 7% reduction in personnel costs and a 15% increase in other costs related to advertising initiatives. Year on year, operating expenses declined 14%. For 2025, we expect expenses to continue declining in real terms, reflecting ongoing efficiencies across headcount and other cost-saving initiatives.

In terms of profitability, in the fourth quarter of 2024, we delivered ROE of 13.8% bringing the full-year figure to 15.7%, in line with our expectations. For 2025, we expect ROE to improve progressively each quarter, supported by loan portfolio expansion and increased leverage, anticipating a full-year ROE ranging between 12% and 15%. Lastly, we expect strong Tier 1 capital to range between 12% to 13% at year end with risk-weighted assets increasing following loan growth and regulatory changes.

Before opening the floor for Q&A, please note that additional details on our quarterly and full-year 2024 performance can be found on the Appendix of our earnings presentation. With that, we are ready to take your questions. Ana, please go ahead.

(Event Instructions) Carlos Gomez, HSBC.

Thank you for taking my question. And congratulations on the results in 2024. So two questions from me. The first one refers to capital. You had a consumption of capital because of your loan growth throughout the year. But in particular, this fourth quarter, it was 300 basis points. And I noticed that 1.2% of the total capital is because of deferred tax assets. Could you explain in particular, why that happened and what your here -- I mean, you also mentioned that you expect the Tier 1 to be at 12%, 13%.

Is that the level that you want to operate in ideally or would you consider an even lower one? And second, could you comment on how spreads are today? I mean we have seen everybody grow a lot, but we have a sense that margins are declining and that competition has increased. Can you tell us how do you see the competitive environment going forward into 2025?

Thank you, Carlos. Mariano, can you answer?

Sure. Yes. Thank you, Carlos, for your comments and your questions. Regarding the capital level, let me explain further on your questions regarding the tax assets. On the 4Q, we recognized deferred tax assets, which is related to tax loss carry forwards that came back from the operation back in 2022 when it was merged with the bank.

But in that time, following a prudent approach, we haven't recognized those assets. So now that we know that we will be able to use them, we recognize them in the balance sheet that gives a gain in the income tax line item of the income statement.

But at the same time, as a deferred tax asset, it's a deduction to the capital position. Remember the capital position, we have the common equity, but then we deduct certain items, the most important are all intangible assets and deferred tax assets. So that's why during the quarter, part of the consumption of capital is related to these assets.

So we recognize the gain, but at the same time, then we deduct it. In 2025, it's important to highlight that as long as we produce results and we apply that tax asset, the deduction will be reduced and finally eliminated.

And then you asked also about the level of capital that we gave in our guidance. That's a level we feel comfortable with. Eventually, if loan growth continues to be solid, not only in 2025 but following in 2026, we could operate at a level of 12% or even below maybe 11%.

Also remember that this is right now the 16% and the guidance we gave is a Tier 1 ratio that is 100% CET1. But during the year, we will also add capital on a Tier 2 component by issuing subordinated debt that is also some of the options that we consider.

When we talk about 12%, 13%, therefore, that is total capital or Tier 1?

That is Tier 1. (multiple speakers) If we add Tier 2, total capital would be higher.

Right. So to understand what you feel comfortable with, you would feel comfortable with an 11% of total capital or 11% of Tier 1?

Of Tier 1.

Of Tier 1, which means that by the end of the year, you'll be close to your limits or it's imaginable that if growth continues at this level, you would probably be looking to add capital sometime in 2026. Is that a reasonable assumption?

Yeah, sure. I think that's a reasonable assumption because we see what we project is a very solid loan growth for 2025 and continue to 2026. So it would be reasonable to think that although we are adding profit to capital at some point, probably in 2026, would we want to add capital, sure.

Thanks.

Carlos, let me add to the answer of Mariano. While we move in 2025, there is a gradual portfolio shift towards more retail loans proportion rather than corporate. And that means that, for instance, we expect that in the fourth quarter of 2025, the proportion will move towards 50% retail loans, 50% corporate loans in this area, maybe even higher in retail loans.

And so that implies that if we expect that annualizing the fourth-quarter 2025 will give us capital creation to sustain growth in 2026. But of course, we need to understand the market dynamics at that moment to see what decisions we want to make regarding capital and regarding Tier 2 capital.

And about the spread?

Regarding spreads, as inflation goes down, we think interest rates will also go down probably next -- decrease in interest rates will not be earlier than April, but during the remainder part of the year, we think the interest rate will continue to go down. And that will add pressure to spreads because at a lower interest rate level, of course, spreads tend to compress.

But at the same time, we are growing our loan portfolio with very good spreads, and we are shifting the mix from -- it was a couple of quarters ago, 65% corporates and 35% individuals. Now it's closer to 50% each. And during 2025, we will continue to (inaudible) the individual portfolio where we have larger spreads mainly on personal loans and car loans. So those will be the moving pieces during 2025.

So bottom line, in terms of, let's say, corporate spreads, they should decline with interest rates.

On -- if you compare it to what we call the transfer rate, the difference between the funds that we get and the loans to corporates, I think spreads will be stable but at a lower interest rate level. So the NIM, that's why we gave a guidance of 18% to 20%. The NIM for the whole balance sheet will be lower. But the spreads of corporate loan compared to the cost of funding or the cost of -- the opportunity cost that would be to put that money into a treasury bond, for instance, will stay the same. But the complete NIM of the balance sheet will be lower because of lower interest rate environment.

Thank you.

Medina Robles, Marlon, JPMorgan.

My first question is related to profitability. So like considering this mix shift towards retail, like what would be a more normalized like ROE target for coming years? Should it be above those 15% you're targeting for this year? And my second question is a follow up on asset quality. And we saw like the corporate case increased NPLs and drove like a large consumption of coverage, which, of course, was high. But the question is like what would be a comfortable coverage level that you would be comfortable operating with considering the mix shift towards retail?

Thank you, Marlon, for your questions. Regarding your first question of ROE, we have a target of 12% to 15% for this year and the longer-term ROE should go closer to a 20% level. We should reach that target gradually quarter-over-quarter, increasing profitability as we increase our loan portfolio because a very important mix in the source of revenue where we see a decrease in the income generated by government securities and we build the loan portfolio to compensate for that decrease in revenues. So we can sustain our financial margin.

And on top of that, we expect to grow at double-digit levels in net fee income, also which we -- a very important part of our revenues and also to decrease expenses. So all those components are the ones that will lead you gradually, as I said, to a 15% or 20% ROE in the longer term.

And then regarding NPLs, as you said, we saw an increase this quarter that's related to a single customer on the Agri business sector that is fully collateralized. And that also makes a consumption of the coverage of NPLs but also because at the end of 2024, as opposed to the end of 2023, the outlook for the economy and for debtors is much better. So the components of the outlook in the expected loss model also reduces the need for coverage.

So it didn't make sense to have like 200 almost 300 we had a certain level of coverage. And now we are at 160. And as long as the NPL stabilizes going to 2.2% by the end of the year, coverage should continue to be partially consumed, but we will always be for sure at the level of above 100%. So we always apply the expected loss model. So we are always anticipating any losses that we foresee on the loan portfolio.

Very clear. Thank you.

Pedro Offenhenden, Latin Securities.

Thank you for the call. I have a couple of questions on securities. How do you see the weight of them evolving in 2025? And do you have any projections for the loan to asset ratio and security to asset ratio for the year?

Can I take your question? Can you please -- I'm sorry, can you please repeat the first part of your question?

Yes. Sorry. How do you see the securities evolving in 2025?

Okay. Yes. Well, first, in terms of volume and weight on the balance sheet, we think that it will decrease the weight on the balance sheet because, as I said before, we are migrating to a higher weight of our loan portfolio within our assets. That is shifting from securities to loans, but also increasing the leverage, so increasing both sides of the balance sheet.

So in terms of volumes, the decrease in the securities portfolio will be mitigated somehow and it shouldn't be as large as the increase in the portfolio because part of that will be funded by new sources of funding -- but of course, the weight of the securities in the balance sheet will decrease and the spread will also decrease as they have been decreasing in the last quarters.

And that's because on one side, we have the inflation adjusted bond portfolio produces lower revenues with lower inflation and then also decreasing short-term interest rates on other treasury bonds. So the dynamics will be of a lower weight both on the balance sheet and in our total revenues.

Thank you, Mariano. And do you have any ratio of security to asset in mind for this year?

Well, our ratio should decrease. I will tell you our loan portfolio, which is now loan to assets of almost 50%, should increase closer to 60%. And with that, the securities portfolio should decrease maybe to 20%.

Perfect. Thank you very much.

I think we have some Q&A -- some questions in the Q&A box. Some comes from Brian Flores, Citi. So I think one is repeated but in your 2025 guidance, you mentioned a CET1 ratio of 12% by year end. Does this incorporate the change in operation with [weights] already?

Yeah. The answer is yes. We do consider the change in operating risk-weight assets. Remember that the Central Bank introduced changes to regulation in the requirement of capital for credit risk and operational risk. The changes in credit risk have already been implemented as of December 31, 2024, and the changes for requirements of operational risk will be implemented as of the end of the first-quarter 2025. So in our projections, they are incorporated.

There is another one in terms of deposits. What should happen for deposits to match loan growth in our view?

I think, in my view, we expect to see both loans and deposits growing at very solid numbers in 2025, but with loans having a much larger growth than deposits. For deposits to match the growth in loans, I think we will have to see the Central Bank expanding the monetary base, which is not the scenario that we are seeing. I mean expanding significantly the monetary base to increase the amount of pesos that are in the financial system.

And the other source of deposit growth will be the increase in foreign currency basic dollar-denominated deposits. At some point, we think the Central Bank could remunerate minimum cash reserves in dollars, and that should make a very strong incentive for individuals and companies to use their dollars and put in the financial system. And that would be another source of growth.

Let me add to that that. Paco is implementing a cluster base value proposition for payroll accounts as well as SMEs that we expect that will improve our competitiveness in getting more funds to participate to be able to fund all the loan growth. So we are quite optimistic on that also.

Okay. I -- there is another one for invertironline. So this is for Diego. invertironline continues advancing with very strong profitability numbers and return on equity. However, we see a decline in users in the last quarter. Could you elaborate on these dynamics? And what do you expect for 2025?

Yeah, sure. The first thing I want to highlight is that if you look at the average monthly active user for 2024 compared to 2023, it grew 70%. So the underlying trend is positive and is growing fast. Third quarter had two [FX] that affected the monthly active users that were the volatility we have throughout July when the FX spread reached a big level of 50%. And also something that is happening or happens in Argentina is that you have the [13th] salary that people get in the end of June and applies for July and also it drove more activity.

So those outliers are the ones that make the comparison not very fair between fourth quarter and third quarter. But aside of that effect, if you look at fourth-quarter average monthly active users, they were higher than first quarter and second quarter. And the underlying trend, as I said before, is 70% higher year on year against 2023 so very healthy. And aside from July, it was a growth trend.

Before we take another question from Carlos with HSBC, there is a question here of where are we filing the financial statements. We are filing them today. So now, Carlos, I think you have any question.

Yes, if there is room for it. So a follow up. You mentioned your economic assumptions, and you expect the currency to be at ARS1,200 by the end of the year. So again, so that we understand, you do not expect any deviation from the current 1% depreciation per month. If there was one, if there was in connection with the IMF agreement, a change in the exchange rate, how would that affect the bank? That will be my first question.

And the second one on the expenses, you expect to grow below inflation. Is that compatible with the loan growth of 60% in the year? One would imagine you have more activity, you have more promotions and inevitably, you would have higher expenses.

Yes. And Carlos, let me take your first question regarding the exchange rate. As you said, we expect the government to continue the devaluation -- monthly devaluation rate of [4%] in an agreement with the IMF or lifting of FX regulations, there we saw an increase in the devaluation rate on a one-time devaluation. We think it will not be very high because the government was always committed also to counter inflation.

And how would that impact? Well, probably the government at that moment would stop or suspend any decrease in interest rates. And if FX regulations are lifted, we think we strongly believe that we will see positive real interest rates. So interest rates should always be at a higher level of, let's say, three months following expected inflation.

But the impact in the balance sheet as we can manage our positions in foreign currency to be balanced, we shouldn't see important one-time results. We could see an increase in the weight of dollar loans and deposits because when translated to pesos, they grow to a higher number. But I don't see any other major impact also because our lending in US dollars is to companies that generate dollars because they are exporters (inaudible). So we shouldn't also see any deterioration in the loan portfolio.

And then your second question, I'm sorry, it was --?

On expenses, you expect them to grow below inflation.

Yes. That's our plan because it's true that with higher activity on some items, you can increase your expenses. But let me tell you or explain it in two fronts. First, we are reducing head count. Also last year, we reduced some branches. Now, we have that savings during the whole year. And we also continue to reduce headcount at the bank level. That allows us to work more efficiently.

We are not reducing commercial positions. In fact, we had some additions in commercial positions for example corporates. Also during these times that credit penetration was so low, we didn't reduce the workforce, for instance, for commercial positions for credit underwriters. So we don't need to hire new people.

And remember, personnel expenses are 60% of our total expenses approximately. So reducing head count has a very important impact in our expenses adjusted by inflation. And then we also -- as we told in the first part of the presentation, we have a very focused strategy. So we want to concentrate our efforts in the segments, in the products where we want to grow, and that allows us to focus also the efforts on the expense side and also on the fee expenses, not only the external expenses.

Basically, Carlos, in order to deliver a better ROE, we found some opportunities in the expenses side. So we can be more productive and efficient in order to deliver a very good ROE. So we are working on that. That's why we increased less than inflation our expenses.

Thank you so much.

Thank you, Carlos. I think there are no more questions for today. So we have reached the end of our Q&A session. Thank you for joining us today, and we appreciate your interest in our company. So we look forward to -- I'm sorry, we look forward to meeting you in the incoming months. And please do not hesitate any questions you may have, you can contact us. Thank you and have a good day.