Grupo Supervielle (SUPV)
Bancos — Argentina
Argentine bank with more than 130 years of franchise history that closed 2025 with a loss on the jump in cost of risk and the normalization of the margin; at $9 the market is already paying for a recovery in return on tangible capital that the base case takes five years to deliver, with an estimated return of +6% per year and a Fairly valued verdict.
Moat Compounder estimates the intrinsic value of Grupo Supervielle (SUPV) at $10 per share on a five-year horizon. With the stock at $8.70 at 2026-09-08 close, the expected total return is 6.0% per year: fairly valued. The analysis draws on 20-F fiscal year 2025 and 6-K interim statements as of June 30, 2026. Analysis dated 2026-08-24.
- Price
- $8.70
- Intrinsic value (5y, base)
- $10
- Total annual return (5y)
- 6.0%
- Status (nominal)
- Fairly valued
- Margin of safety
- +6%
The essentials
- Fiscal year 2025 closed with an attributable loss of Ps.37.6 billion against profit of Ps.137.5 billion in 2024: the net interest margin fell from 34.6% to 17.4% and loan-loss provisions climbed from Ps.78.3 billion to Ps.267.4 billion.
- Own-portfolio non-performance jumped from 1.3% to 5.0% of the loan book and coverage of that impaired portfolio fell from 196.5% to 118.1%; the bank moderated retail origination starting in the second quarter of 2025.
- Common Equity Tier 1 stood at 15.4% of risk-weighted assets, entirely common equity, and deposits reached Ps.5,118.9 billion on assets of Ps.7,769.6 billion.
- The base case normalizes return on tangible capital toward 11.9% by year five, below the good years of 2023 and 2024, and returns +6% per year: It trades close to intrinsic value, far from the required margin of safety.
Intrinsic value — two valuation methods
Total return at 5 years: 5.9%/year = 2.7% appreciation + 3.3% dividend. The target price ($10) is ex-dividend; the $2 in dividends collected over 5 years are added separately.
The value today by multiples ($9) exceeds the market price ($9). The present-value lens does not apply to this company, so the contrast between methods is unavailable.
Pillars of the analysis
The verdict — today vs 5 years
Today — fairly valued: at $9 trades ~6.3% below its value discounted to today (~$9); the discount is positive but does not reach the margin of safety we require (≥38%).
At 5 years — En valor: the target price ($10) plus dividends yield between the 4% floor and the 10% average return — a reasonable return, though without the margin of a great investment.
The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$6.
Thesis
The business
An Argentine universal bank with a long-standing franchise, Common Equity Tier 1 at 15.4%, and deposits of Ps.5,118.9 billion, whose retail segment has posted two fiscal years of losses and whose consolidated result is sustained by treasury and fee businesses. The return on tangible capital of -5.6% in the latest fiscal year is well below the 10% bar, and the analysis turns entirely on whether it clears it again.
The valuation
The valuation is on equity per share, not enterprise value: in a bank, deposits are operating funding and subtracting them would be double counting. The base case normalizes attributable profit toward Ps.107.9 billion by year five —a return on tangible capital of 11.9%, below fiscal years 2023 and 2024— and capitalizes it at 11 times, within the bank archetype's band. The resulting value is $10 per share, against a price of $9.
The margin of safety
It trades close to intrinsic value, far from the required margin of safety. The estimated return is +6% per year, with +6% in the adverse scenario and +6% in the favorable one. The width of the range is not a flaw in the model: it is the business's own, which in three fiscal years went from a return on equity of 16.8% to a negative 3.6%.
What to watch
The test is the trajectory of own-portfolio non-performance, which went from 1.3% to 5.0% of the loan book in 2025 and kept rising to 5.6% in March 2026 before falling to 5.5% in June, while coverage of that impaired portfolio fell from 196.5% to 118.1% and then to 98.9% in June 2026, that is, below 100%. If non-performance stabilizes and provisions revert toward the 2024 level, profit recovers on its own through the cost-of-risk channel. If it keeps rising, coverage that is already insufficient forces further provisioning and capital, at 15.4% today, starts to become the constraint.
Educational / informational. Does not constitute investment advice.
Valuation by multiples
The model is stated in currency of 31-dic-2025, the fiscal year-end the company restates to under IAS 29, while the price is today's. Without restatement the conversion would strip out the inflation between those two dates. The 1.1685 factor is not an estimate: it is the ratio between two presentations of the same cut. What it does not cover — inflation since 30-jun-2026, which no filing lets us derive yet — is left out, so the return is a floor by that amount.
The multiple is applied to the metric per share (EPS / Core FFO): that metric already reflects the evolution of the share count (buybacks or issuance), so the share count does not enter as a separate step. The implied equity (~ARS 1,186.9 bn) is the metric carried to the equivalent of today's share count — the detail is in the piece's (i).
Discounted cash flow to present value (DCF)
Profit attributable to the parent for fiscal year 2025 (Ps billion) in year 0: -ARS 37.6 bn. The verdict remains anchored by multiples, on the year-5 metric — the horizon at which the business already generates it. The detail of that projection lives in the year-by-year model.
Year-by-year model — bank (equity)
A bank is valued on equity (P/E × common earnings + price/tangible book), not EV: deposits and debt are funding. It returns capital via dividend + buyback —the buyback reduces the share count, so earnings per share grow faster than aggregate earnings—. Total return adds the dividend collected along the way. In edit mode, the metric, shares, dividend, and exit multiple can be adjusted.
| ARS bn / per share | TTM | +1a | +2a | +3a | +4a | +5a |
|---|---|---|---|---|---|---|
| Operation (editable: metric, shares) | ||||||
| Utilidad a común norm. (Ps bn) | -37.571 | 8 | 38.5 | 64.6 | 84.6 | 107.9 |
| growth | — | -121% | +381% | +68% | +31% | +28% |
| ROTCE | -5.6% | 1.2% | 5.4% | 8.4% | 10.2% | 11.9% |
| Utilidad / acción (Ps) | ARS -429.16 | ARS 91.38 | ARS 439.77 | ARS 737.90 | ARS 966.35 | ARS 1,232.49 |
| Shareholder return (dividend + buyback) | ||||||
| Dividend / share | 375.6 | 0 | 60 | 150 | 275 | 400 |
| Payout (div / metric) | -88% | 0% | 14% | 20% | 28% | 32% |
| Shares (M · buyback) | 87.546 | 87.546 | 87.546 | 87.546 | 87.546 | 87.546 |
| Valor tangible / acción (Ps) | 7,722.25 | 7,848 | 8,266 | 8,899.5 | 9,648 | 10,551.5 |
| Multiples at today's price (equity, no EV) — how they compress | ||||||
| P/E (price / per share) | -27.7x | 130.1x | 27.0x | 16.1x | 12.3x | 9.6x |
| P/tangible book | 1.5x | 1.5x | 1.4x | 1.3x | 1.2x | 1.1x |
| Value curve (per share × P/E exit multiple by year) | ||||||
| Value / share | — | ARS 1,051 | ARS 5,057 | ARS 8,486 | ARS 10,871 | ARS 13,557 |
| Total return vs price | — | (-90%) | (-34%) | (-10%) | (-1%) | (+4%) |
Equity-level model: attributable profit per share is valued against a normalized multiple, with no enterprise-value bridge, because in a bank deposits and debt are operating funding and not capital structure. All amounts are in pesos of the December 31, 2025, closing date, as published in the filing restated under the accounting standard for hyperinflationary economies, so this model's rates are real, not nominal. Year zero is the full fiscal year, not a rolling window: each filing brings its series to the currency of its own closing date, so chaining quarters from different filings would mix units. The path describes a recovery from the 2025 loss: the cost of risk normalizes after the jump in own-portfolio non-performance from 1.3% to 5.0%, the margin stabilizes at the conventional 17-19% level, and loan-book volume grows in a private-credit market equal to 14.8% of GDP. The first year's distribution is modeled at zero because the prior fiscal year closed with a loss.
Today's multiple compresses on its own going forward as the metric per share grows (accelerated by the buyback, which reduces the share count). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—. Total return adds the dividend collected; the required return is applied to the base scenario.
Scenarios (bear / base / bull) — at 5 years
Value sensitivity
Value per share by growth scenario (rows) and the compression or expansion of the exit multiple (columns). The color shows whether it beats the required return.
| Growth ↓ / Multiple → | Compression−15% | Base multiple | Expansion+15% |
|---|---|---|---|
| AdverseNon-performance does not stabilize: provisions remain high for one more year · base 10 times earnings, the floor of the bank archetype's band. | $4 -8.1% | $5 -5.6% | $6 -3.3% |
| BaseThe cost of risk normalizes after the jump in non-performance from 1.3% to 5.0% · base 11 times normalized earnings, in the low end of the band. | $8 2.9% | $10 5.9% · base case | $11 8.7% |
| FavorablePrivate-credit penetration recovers from 14.8% of GDP · base 13.5 times, at the high end of the band. | $15 14.8% | $18 18.4% | $21 21.5% |
Multiples — today
High today = growth is being paid for; they cheapen toward 3 and 5 years (see Projections).
Forward multiples
With today's price fixed and the metric growing, what multiple is being paid at 3 and 5 years. Today's high multiple is the price of growth: if the business grows, the entry multiple cheapens on its own.
Optionalities
They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.
The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).
Maximum price to pay today — by required return
Each card fixes a required annual return and answers: if the business is worth $10 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $9, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.
Return and margin of safety calculator
The maximum price to pay today to earn the required return, with the dividend collected as a separate flow. Both controls are editable.
With a target price of $10 in 5 years plus $2 of dividends collected (the dividend adds to the return, not to the price) and a required return of 4.5% annually, the maximum to pay today is $9. Against the current market price ($9), the margin of safety is 6.3% (trades below the maximum → there is margin) and the total return at that price would be 5.9% annually.
Valuation quality
- Valuation base. Year zero is a loss, so all the value rests on year-five normalized profit.
- Multiple applied. Eleven times, in the low end of the bank archetype's 10-to-15 band, consistent with a terminal return just above the bar.
- Contrast with tangible value. The base-case value per share equals 1.3 times projected tangible value, below what today's price pays.
- Second lens. The discount and the reverse approach are declared not applicable because the year-zero flow is negative.
ROTCE vs the 10% bar — the bank's engine
The quality bar — return bands
The return on capital is judged against absolute bands; the value-creation floor is the market's opportunity cost (~10%). A stock's volatility does not measure business risk.
ROTCE -6% → below the 10% bar. The bar is a measure of business quality, not the method's discount rate: value is discounted to today at the risk-free rate, and protection is required separately, as a margin of safety.
Quality — profitability and capital
- Return on capital. Return on tangible capital is negative in the latest fiscal year and only clears the 10% bar toward the end of the horizon.
- Predictability of results. Return on equity went from 16.8% to 13.2% to a negative 3.6% over three fiscal years.
- Reinvestment runway. A market with private credit at 14.8% of GDP leaves room to reinvest retained capital for years.
- Accounting quality. Statements restated under the hyperinflationary-economies standard and audited, with expected loss measured under the financial-instruments standard.
Revenue trajectory
Values in ARS bn. The % over each bar is the year-over-year (YoY) growth — each year, historical and projected, vs the prior one (the TTM vs the TTM from a year ago). The path comes from the same source as the table; years without their own series in the model are interpolated between the anchors. Historical solid, projection in a lighter shade.
Where the growth comes from · by segment
Weight in revenue and year-over-year (YoY) growth, in reported ARS.
The weights are each segment's share of consolidated net income for fiscal year 2025, as reported in the segment note. The growth rates are the model's own assumptions for the projected path and not figures reported by the company: they credit a recovery in retail volume in an underpenetrated credit market, a smaller contribution from treasury as the margin normalizes, and the highest growth in the fee businesses, which today are the ones sustaining the consolidated result.
Growth engine — operating drivers
Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.
A bank's result breaks down into loan-book volume times intermediation margin, minus the cost of risk and minus overhead expenses. In this fiscal year the first three terms moved at once and against the bank: volume grew 36.9% in real terms, the margin compressed by half, and provisions tripled. That is why the series worth watching is not revenue growth but non-performance and its coverage: those are what determine how much of that volume actually reaches the shareholder.
Projections
| Metric | FY23 | FY24 | FY25 | TTM | +1A | +2A | +3a | +4A | +5a |
|---|---|---|---|---|---|---|---|---|---|
Net operating result (Ps bn) | — | $1,310.4 bn | $1,128.1 bn (-14%) | $741.2 bn | $781.6 bn (+5%) | $824.3 bn (+5%) | $869.4 bn (+5%) | $932.4 bn (+7%) | $1,000 bn (+7%) |
Net income to common (Ps bn) | — | $147.9 bn | $137.5 bn (-7%) | -$37.6 bn | — | — | — | — | — |
Earnings per share (Ps) | — | 334 | 312.6 (-6%) | -85.8 | — | — | — | — | — |
Deposits (Ps bn) | — | — | $4,174.6 bn | $5,118.9 bn | $5,441.8 bn (+6%) | $5,785.1 bn (+6%) | $6,150 bn (+6%) | $6,584.6 bn (+7%) | $7,050 bn (+7%) |
The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (31-dic-2025): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).
Growth quality
- Loan-book volume. Loans grew 36.9% in real terms in 2025, well above deposits.
- Reported revenue. Fell 13.9% in 2024 and 34.3% in 2025 in real terms due to margin normalization from extraordinary levels.
- Most recent signal. First-half 2026 interest income is 2.0% higher in real terms against the same half of the prior year.
- Fee businesses. Custody assets on the investment platform grew 34% in a year to Ps.3,616 billion.
Moat strength
The business and its moat
What it does and how it makes money
Grupo Supervielle is an Argentine financial holding company whose main subsidiary is Banco Supervielle, a universal bank that lends to individuals, small and medium-sized enterprises and corporations, and that funds itself with deposits of Ps.5,118.9 billion on total assets of Ps.7,769.6 billion at year-end 2025. Around the bank operate an online retail investment platform, a life-focused insurer, an insurance brokerage, a mutual fund manager, a broker-dealer, and an auto finance company with an agreement with a digital used-car platform.
The group reports five segments: personal and business banking, which contributes 44.8% of 2025 consolidated net income; the bank's treasury, 27.6%; asset management and other services, 13.6%; corporate banking, 9.8%; and insurance, 4.1%. Monetization combines the intermediation margin —88.6% of net operating income in 2025, against 97.8% in 2024—, fees from the investment platform on more than Ps.3,616 billion in custody, premiums from 396,000 policies in force, and structuring fees from 62 capital-markets transactions that the issuer states at «approximately Ps.3.263 trillion» in 2025 —a figure that, taken at its literal magnitude, is inconsistent with the rest of its statements; the order of magnitude consistent with the group's balance sheet is billions of pesos, not trillions.
Scale and position
The group serves 1.9 million customers: 1.3 million retail banking individuals, 26,000 small businesses, 2,200 corporate clients and 565,000 active clients of the online investment platform. The physical network comprises 129 branches across eight provinces and the City of Buenos Aires, with annexes in Añelo, in the Vaca Muerta shale formation, and in San Juan, for mining activity. Headcount closed 2025 at 3,348 employees, 3.1% fewer than a year earlier.
As of December 31, 2025, loans totaled Ps.3,982.9 billion, up 36.9% in real terms, and deposits Ps.5,118.9 billion, up 22.6%; the loans-to-deposits ratio rose from 69.9% to 78.1%. Attributable equity was Ps.985.3 billion, 6.1% lower than a year earlier. The Argentine financial system in which it operates is underpenetrated: private deposits equaled 21.1% of GDP and private credit 14.8%, against 19.3% and 10.7% in 2024.
The moat: why it is hard to compete
The franchise rests on three verifiable pillars. The first is longevity: the Supervielle family has operated in the Argentine financial system since 1887 and the bank has held a regional position in Mendoza for more than 17 years, with a unit dedicated to the wine industry. The second is the agreement with the pension agency, in force since 1996, under which the bank pays benefits to some 532,000 retirees and beneficiaries under about 210,000 social plans; that business contributed 19.7% of the bank's revenue in 2025 and functions as a low-cost customer-acquisition channel, since 86% of personal loans originated and 59% of card volume correspond to payroll and retiree clients.
The third is the digital ecosystem: 93% of clients operate through digital or automated channels, against 30% in 2020; 71% of transactions are processed through mobile channels, against 60% in 2024 and 48% in 2023; and the app has 1.06 million monthly active users who process more than 13.5 million digital payments per month. The online investment platform, with more than 2 million accounts opened and Ps.3,616 billion in custody, up 34% in a year, adds an economics distinct from the bank's, based on fees.
Moat direction and threats
The direction is declared stable, not widening: there is no evidence of a unit-economics gap that is opening. The most direct indicator points the other way over the short cycle: the personal and business banking segment, which contributes 44.8% of consolidated net income, posted an attributable loss of Ps.186.7 billion in 2025 after a loss of Ps.146.9 billion in 2024, so the line that concentrates most of the clients has gone two fiscal years without making money. The consolidated result is sustained by treasury, with Ps.77.1 billion in profit, and asset management and other services, with Ps.65.4 billion.
The threats are structural. The filing itself acknowledges intense competition in practically all core financial products, on price and on term, aggravated by financial-technology platforms with new digital models. The system is fragmented: 73 financial institutions at the end of 2025. And the pension agreement expired on June 30, 2023, and is being renegotiated under a resolution of the agency, so a piece that contributes nearly a fifth of the bank's revenue depends on a renewal that remains open.
Business / sector quality
- Revenue recurrence. Deposits of Ps.5,118.9 billion and a base of 1.9 million clients give a recurring revenue stream, though its pricing depends on the rate.
- Pricing power. The filing acknowledges intense competition on price and term across practically all core financial products.
- Operating leverage. The retail banking expense structure fell 11.0% in the fiscal year, which amplifies the margin recovery.
- Behavior in a downturn. Fiscal year 2025 again showed a loss, as had already happened in 2022, though without compromising regulatory capital.
- Diversification of results. Treasury, asset management, and insurance contributed profits while retail banking lost money.
Credit quality
Under CECL the reserve anticipates the expected losses over the entire life of the loan; the charge-offs are the losses already realized. A low charge-off rate (~0.7%) versus the through-cycle rate (~1%) indicates a healthy loan book — but it is a point in the cycle, not a permanent floor.
Company health / solvency
- ✓Reserve coverage (allowance / loan book)5.80% of the loan book
- ✕Value creation (ROTCE − 10% bar)-16pp
- ✓Funding (deposit base)Deposits $5,118.9 bn
A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.
ⓘ Has a loan book: credit health (delinquency, coverage, normalized CECL, RoA/RoE) is evaluated separately, not with corporate solvency.
Health — balance sheet risks
- Capital. Common Equity Tier 1 at 15.4% of risk-weighted assets, entirely common equity.
- Funding. Loans-to-deposits ratio of 78.1%, with a deposit base of Ps.5,118.9 billion.
- Portfolio protection. The provision covers 5.8% of the total loan book and 118.1% of the impaired portfolio at year-end 2025; in subsequent events from the August 10, 2026, 6-K, coverage keeps falling, to 103.9% in March 2026 and 98.9% in June, below 100%.
- Equity trend. Attributable equity fell 6.1% in real terms and the ratio to assets fell from 17.7% to 12.7%.
Who runs it
- The group paid dividends of Ps.32.9 billion in 2025 and Ps.36.8 billion in 2024, in year-end 2025 pesos.
- The buyback program approved in June 2024 was declared concluded on July 8, 2024, with 99.78% execution; the resulting treasury shares were 4,940,665 shares as of June 30, 2026, worth Ps.15,243.1 million, after the automatic cancellation of shares under Article 67 of Law 26,831.
- The share count fell from 454.3 million in 2022 to 437.7 million in 2025, with a net reduction of 0.44% in the latest fiscal year.
- Facing the deterioration of the loan book, management moderated retail origination starting in the second quarter of 2025 and tightened admission models and payment-capacity guidelines.
- The August 10, 2026, earnings release discloses a voluntary retirement program with headcount reduction, whose payroll savings bring the structural return for the second quarter of 2026 to 14.4%.
Capital allocation — indicators
Sources and uses of cash
How cash comes in and how it is deployed. In green, the business's own cash (the owner-FCF it generates and reinvests); in gray, the float and credit — customer and funding money, which is not the shareholder's.
Allocation measured over the last fiscal year with a profit, 2024: on attributable profit of Ps.137.5 billion, the distribution paid during 2025 was Ps.32.9 billion and the buyback ran at an approximate pace of Ps.7.6 billion per year since the program's approval; the remainder was retained and sustains regulatory capital. 2025 is not used as the reference because it closed with a loss and the fractions stop meaning anything.
Shares — ownership and dilution
Who owns the shares — the alignment and whether there is a controlling shareholder.
Management / capital allocation
- Capital commitment. The chairman and chief executive officer holds the entirety of the five-vote class and a meaningful stake in the ordinary class.
- Control structure. The dual class lets him elect the majority of the board and decide distributions without the participation of other shareholders.
- Response to the deterioration. Moderated retail origination starting in the second quarter of 2025 and tightened admission and payment-capacity models.
- Capital allocation. Retains around seven out of every ten pesos of profit, with distribution and buybacks limited to the surplus.
Why it trades at this price
- Fiscal year 2025 closed with a loss, so the price-to-earnings ratio is not interpretable and the stock falls outside any quantitative screen that requires positive earnings.
- The jump in non-performance from 1.3% to 5.0% and the fall in impaired-portfolio coverage from 196.5% to 118.1% are a classic motivated seller: the headline of deterioration gets sold without distinguishing how much is cycle and how much is structure.
- The first half of 2026 closes with an attributable loss of Ps.5.4 billion, but that is entirely explained by the first quarter, which lost Ps.18.2 billion: the second quarter, reported in the August 10, 2026, earnings 6-K, already returned to an attributable profit of Ps.12.8 billion, with a return on average equity of 4.4% (12.4% adjusted), still below the Ps.18.2 billion of the same quarter of 2025.
- Exposure to a single economy with a history of high inflation and foreign-exchange controls structurally compresses what the market pays for any return stated in pesos.
The discount exists and has a name, but the price already incorporates it: at today's quotation the analysis does not find the gap between perception and reality that would be needed, because the market pays a multiple of tangible value that presupposes the full recovery of the return.
Return asymmetry — risk/reward
The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.
Even in the bear scenario, the return holds at -6%/year (-25% total): the margin of safety protects the downside. The bull (+18%/year, +132% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.
Bear case — disconfirmation
- Non-performance touched 5.6% in March 2026 before falling to 5.5% in June: with coverage already below 100% (98.9% in June 2026, against 118.1% in December 2025), each additional point requires provisioning on a less-protected base and consumes capital directly.
- The retail segment has posted two fiscal years of losses, so what today reads as cyclical may be a risk-pricing problem in the middle-income individuals and small-business niche.
- The margin does not stabilize in the conventional range: the end of the short-term liquidity instrument and higher reserve requirements leave the bank competing for deposits with a structurally higher funding cost.
- The pension agreement is not renewed on comparable terms, and the bank loses at once 19.7% of its revenue and its cheapest acquisition channel.
- With equity to assets at 12.7% and common equity capital at 15.4%, another loss-making fiscal year would force moderating loan-book growth right when the market is recovering.
Bull case — the thesis for
- The cost of risk reverses faster than modeled: 2025 provisions incorporate lifetime expected loss on the loans, so the reversal arrives before the improvement in observed non-performance.
- The loan book grew 36.9% in real terms and retail net financial income 21.5%: once the margin normalizes, that larger volume levers on an expense structure that fell 11.0%.
- Private credit equals 14.8% of GDP: a normalization of the system would expand the balance sheet for several years without the need to take share from anyone.
- The fee businesses —the investment platform, asset management, and insurance— contributed Ps.83.4 billion in profit in a bad year for the bank and grow with a different, less capital-intensive economics.
- The group retains Common Equity Tier 1 headroom of 15.4%, entirely common equity, even without a buyback program in force —the previous one was concluded on July 8, 2024, with 99.78% execution—, which leaves room to launch a new one once profit recovers.
Risks — what breaks the base case
- Credit cycle. Own-portfolio non-performance went from 1.3% to 5.0% in fiscal year 2025, rose to 5.6% in March 2026, and fell to 5.5% in June 2026, per the August 10, 2026, 6-K: there is evidence of a nearby ceiling, though not confirmed.
- Exposure to a single economy. All assets and clients are in Argentina, with inflation of 31.5% and devaluation of 41.4% in 2025.
- Monetary policy. The end of the short-term liquidity instrument and higher reserve requirements raised funding costs and rate volatility.
- Pension agreement. Expired on June 30, 2023, and is being renegotiated; that business contributes 19.7% of the bank's revenue.
- Corporate governance. The five-vote-per-share class is entirely in the hands of the controlling shareholder.
Lenses — the value investing thinkers
Each thinker's analytical framework applied to our data.
The disagreement starts with the business, not just the price.
- Buffett / Graham Quality + margin of safety
Fails the quality gate: ROTCE -6% does not clear the 10% bar.
- Peter Lynch Growth at a reasonable price (GARP)
A fast grower growing 10% at a PEG of -3.0 → cheap for its growth.
- Joel Greenblatt Cheap and high-return (Magic Formula)
Not applicable — the Magic Formula excludes financials and regulated businesses (EBIT/EV does not capture the operating leverage).
- Howard Marks Perception vs reality + cycle
The price discounts 150% vs our 10%: priced for perfection, no favorable mispricing.
- Seth Klarman Capital protection (bear scenario)
Bear-scenario floor -10%/yr over 5y (material loss) → risk of permanent capital loss.
- Pat Dorsey Moat strength (Five Rules)
A narrow moat, stable; sources: cost advantage, efficient scale, switching costs, intangibles → partially passes the Five Rules.
- Aswath Damodaran Expectations implied by the price
The price demands 150% growth, far above our 10% — heroic assumptions.
