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Supervielle's Q4'17 net income jumps 60%, 2018 profit seen rising by up to 76%

Grupo Supervielle SA's fourth-quarter 2017 profit jumped 60.0% from a year earlier as higher financial margin and service fee income more than offset a nearly 90% rise in loan-loss provisions.

The Buenos Aires-based company booked quarterly net income of 851.4 million Argentine pesos, or 1.86 pesos per share, up from 532.3 million pesos, or 1.46 pesos per share, in the year-ago period.

The company, which owns Banco Supervielle SA, reported gross financial margin income of about 2.89 billion pesos, rising 48.1% from 1.95 billion pesos in the fourth quarter of 2016. Its net interest margin came in at 19.4%, compared to 18.5% in the linked quarter and 20.8% a year ago.

Net service fee income increased 33.1% year over year to 955.1 million pesos, while income from insurance activities ticked 14.2% higher to 148.3 million pesos.

Grupo Supervielle also recorded 600.3 million pesos in provisions for loan losses in the fourth quarter, a jump of 89.6% compared to 316.7 million pesos a year earlier. Administrative expenses also increased, soaring 33.2% to 2.41 billion pesos from 1.81 billion pesos in the prior-year period.

The company's total loan portfolio held 60.46 billion pesos at the end of 2017, expanding 55.7% from 38.82 billion pesos at the close of 2016. Its nonperforming loan ratio was 2.8%, unchanged from both the linked and year-ago quarters.

The group expects net income to increase between 64% and 76% in 2018, driven by sustained loan growth and improving operating efficiency, Chairman and CEO Patricio Supervielle said in a statement. He added that the company opened two new branches in Buenos Aires in the fourth quarter of 2017.

Supervielle's return on average equity fell to 23.3% in the fourth quarter from 31.3% a year earlier, while return on average assets remained steady at 4.1%.

The fourth-quarter results helped the company's full-year 2017 profit reach 2.44 billion pesos, up 85.9% from the 1.31 billion pesos earned in 2016.

As of Feb. 19, US$1 was equivalent to 19.84 Argentine pesos.