Brian Flores

Brian Flores congratulated Santander on its improved ROE and asked about the main levers that will drive the bank towards a 20% ROE and beyond, considering its cautious risk appetite.

Answer

CEO Mario Roberto Opice Leão affirmed that Santander is moving towards and beyond a 20% ROE, though not in 2026. The strategy involves disproportionate credit growth in highly profitable segments (e.g., mid/large companies, high income), intelligent capital allocation, and growing fees faster than portfolio growth. He emphasized maintaining a 'nominal expense line close to zero' to create significant operating leverage, alongside a healthy mix to manage provisions, ultimately increasing earnings before taxes and profitability.

Brian Flores asked about the main levers Santander Brasil will utilize to achieve its targeted 20%+ ROE in 2026, considering its cautious risk appetite, and how these factors will combine.

Answer

CEO Mario Roberto Opice Leão stated that the bank aims for ROE growth, getting closer to 20% (and eventually 20-something), by disproportionately growing credit in profitable segments like mid-to-large companies and high income, while being selective in others. He highlighted growing fees faster than portfolio growth, intelligent capital use, positive top-line evolution, and maintaining a nominal expense line close to zero. He also mentioned managing provisions through a healthy mix and monitoring the contingency line to improve earnings before taxes and ultimately profitability.

Brian Flores questioned Banco Macro's strategy for loan growth, focusing on segment priorities (corporate vs. consumer), and whether 2026 represents a transition year towards a sustainable 15-20% ROE. He also asked about the attractiveness of current stock levels for further share buyback activity.

Answer

IR Nicolás Torres stated that Banco Macro expects to grow across both commercial and consumer segments due to low banking penetration, with a slight shift from 65/35 to 60/40 consumer/commercial by end of 2026. He confirmed 2026 is a transition year towards 20% ROE by 2027. CFO Jorge Scarinci noted that the previous buyback program ended due to stock price increases post-election, and future programs would require board consideration.

Brian Flores followed up on the 8% ROE guidance for 2025, noting that Q4 results would need to be significantly higher than the first nine months' run rate. He asked if any one-off events or a large spike in volume are expected to help achieve this guidance.

Answer

CFO Jorge Scarinci clarified the forecast is for the 'area of 8%.' He expects Q4 results to be similar to Q2, driven by a recovery in the bond portfolio, increased loan volumes, and improvements in NIMs, which should bring the bank very close to the 8% ROE target.

Brian Flores from Citi asked for the bank's estimated Tier 1 capital ratio for year-end 2025 and for management's perspective on the asset quality of the retail loan portfolio across the broader banking system.

Answer

CFO Jorge Francisco Scarinci projected that Banco Macro's Tier 1 ratio would be in the area of 28.75% by the end of 2025, considering loan growth and dividend payments. Regarding retail loan quality, he reiterated that the bank is seeing some deterioration across the system due to rising nominal and real interest rates, forecasting that Banco Macro's NPLs could reach up to 3% by year-end, with the possibility of worse outcomes for other banks.

Asked for an update on the company's 2025 guidance and for their strategy regarding capital allocation, specifically the balance between organic and inorganic growth.

Answer

The company updated its guidance, increasing the deposit growth forecast to 45% and the capital ratio to 28-29%, while downgrading the ROE forecast to 8-10%. The current focus is on organic loan growth to utilize their strong capital position, with M&A being a potential future opportunity. The higher deposit forecast is due to stronger-than-expected Q1 performance.

Brian Flores from Citi asked for an update on Banco Macro's 2025 guidance, specifically regarding loan growth, deposits, ROE, and capital ratios. He also inquired about the bank's capital deployment strategy, questioning the focus between organic and inorganic growth opportunities.

Answer

Jorge Francisco Scarinci, Finance & Investor Relations Manager, confirmed the 60% real loan growth guidance but increased the deposit growth forecast to 45%. He revised the year-end capital ratio target up to 28-29% and downgraded the ROE forecast to a range of 8-10%. Scarinci stated the bank is currently focused on organic growth to leverage its strong capital position, though M&A remains a future possibility.

The analyst asked about the capital impact of the Itau Argentina acquisition and the potential threat from a Central Bank rule change affecting virtual wallet deposits.

Answer

The CFO confirmed the acquisition price is very low relative to book value, at approximately 20%. He stated the bank does not hold the specific type of virtual wallet deposits affected by the new Central Bank rule, so there is no direct threat to its deposit base.

Brian Flores sought clarification on Grupo Financiero Galicia's ROE trend, specifically if the 11-12% ROE target for 2026, with a 15% run rate in Q4, implies mid-to-high single-digit ROE in the first half of 2026. He also asked if the bank's funding cost advantage would continue or if a 'funding cost war' is expected to deepen in 2026. A follow-up question addressed whether the deposit growth guidance (previously 35% real terms for this year) was being revised for 2026.

Answer

Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) confirmed that ROE would be slower in Q1 2026, likely in the mid-to-high single digits, before recovering to 15% by Q4 2026 and continuing into 2027, noting NaranjaX's portfolio also needs improvement. He stated that the bank prioritizes its deposit base, expecting market liquidity to return with interest rate reductions and potential regulatory changes to increase bank liquidity. While aiming to increase deposits, external funding might be considered depending on credit growth. Deposit growth guidance for 2025 remains, with 20% real terms projected for 2026 deposits versus 25% for lending, subject to updates.

Brian Flores requested clarification on Grupo Financiero Galicia's ROE trend for 2026, particularly the speed of recovery in the first half. He also inquired about the sustainability of the bank's funding cost advantage and potential changes in the funding cost environment for 2026.

Answer

Gonzalo Fernández Covaro (CFO, Grupo Financiero Galicia) confirmed a slower ROE recovery in Q1 2026, gradually increasing to 15% by Q4 2026, acknowledging the need for NaranjaX's portfolio to improve. He emphasized prioritizing deposit growth as the most stable and cost-efficient funding, expecting better deposit growth next year, and mentioned potential market debt if credit growth outpaces deposits. He also revised deposit growth guidance for next year to around 20% in real terms.

Brian Flores inquired about the updated 9-11% ROE guidance, asking if it reflects revised loan and deposit growth forecasts. He also asked about the source of the quarter-over-quarter capital ratio improvement and whether higher dividend payouts are being considered.

Answer

CFO Gonzalo Fernández Covaro confirmed the guidance reflects lower loan growth expectations of around 40% and deposit growth of 30-35%. He clarified the capital ratio increase to nearly 24% was due to the merger with the more strongly capitalized former HSBC bank, not organic growth. He stated that while dividends are reviewed, the focus remains on efficiency and retaining capital for future lending growth. He also clarified that a potential 2-point ROE impact from restructuring is a one-time negative expense, not an upside.

Brian Flores asked for an update on BBVA Argentina's real loan growth, deposit growth, real ROE, and Tier 1 ratio guidance for the year. He also inquired about the genuineness of recent loan growth, distinguishing between new credit and refinancing, and sought clarification on the sustainable ROE target for 2026.

Answer

CFO Carmen Morillo Arroyo confirmed maintaining loan growth guidance of 45%-50% in real terms, adjusted deposit growth to 30%-35%, ROE to high single digits for year-end 2025, and a capital ratio near 17%. She stated that loan growth is fully genuine, driven by US dollar loans and corporate clients, with personal loans remaining flat due to NPLs. For 2026, she projected a sustainable ROE in the mid to low teens, indicating an upward trend.

Brian Flores asked for an update on BBVA Argentina's guidance for real loan growth, deposits, real ROE, and Tier 1 ratio, and inquired about the genuineness of the strong loan growth given economic stagnation, questioning if it was primarily refinancing. He also followed up on the bank's sustainable ROE target for 2026.

Answer

Carmen Morillo Arroyo, CFO, confirmed maintaining 45%-50% real loan growth guidance, adjusted deposit growth to 30%-35%, revised real ROE to high single digits, and projected a capital ratio near 17%. She stated that loan growth was fully genuine, driven by US dollar loans and companies, with personal loans remaining flat due to NPL growth. For 2026, she expects ROE to be in the mid to low teens, indicating an upward trend.

Brian Flores of Citi asked for an update on guidance for key metrics like credit growth and ROE, and questioned the sustainability of the bank's market share gains. In a follow-up, he inquired about the net impact of recent high interest rates on the bank's treasury results.

Answer

CFO Carmen Arroyo confirmed guidance for approximately 50% real credit growth, low double-digit ROE, and a year-end capital ratio of around 17%, reaffirming the strategy to continue gaining market share. Head of IR Diego Cesarini later explained that the impact of high rates on treasury results is neutral to slightly negative in the very short term as liabilities reprice faster than assets, but the effect is expected to become neutral by September.

Brian Flores from Citi asked for updates on full-year guidance for key metrics like loan growth and ROE, questioned the sustainability of market share gains, and followed up on the net impact of high interest rates on the bank's treasury results.

Answer

CFO Carmen Arroyo confirmed guidance for approximately 50% real loan growth, low double-digit ROE, 30-35% deposit growth, and a year-end capital ratio around 17%. She affirmed the strategy to continue gaining market share. Head of IR Diego Cesarini added that the impact of high rates on treasury results is neutral to slightly negative in the very short term but should be offset quickly due to the bank's portfolio structure and repricing dynamics.

Brian Flores of Citigroup Inc. asked for an update on the bank's guidance and the sustainability of its market share growth. In a follow-up, he inquired whether the recent high interest rate environment was a net positive or negative for the bank's treasury results.

Answer

CFO Carmen Arroyo confirmed that guidance remains unchanged, targeting approximately 50% real credit growth, low double-digit ROE, and a year-end capital ratio around 17%. She affirmed the strategy to continue gaining market share. Head of IR Diego Cesarini added that the impact of high rates on treasury results is neutral to slightly negative in the immediate short term, as liabilities reprice faster than assets, but this effect is expected to be offset quickly and become neutral by September.

Brian Flores of Citi inquired about updates to financial guidance, the sustainability of market share gains, and the net impact of the current high-interest-rate environment on the bank's treasury results.

Answer

CFO Carmen Arroyo maintained guidance for approximately 50% real credit growth, a low double-digit ROE, and a year-end capital ratio around 17%, affirming the strategy to continue gaining market share. Head of IR Diego Cesarini added that the high-rate environment has a neutral to slightly negative short-term impact on treasury results, which should be offset quickly due to the structure of the bank's bond portfolio and balance sheet.

Brian Flores questioned Grupo Supervielle's strategy for a more balanced loan mix between corporate and retail, specifically if corporate loans could reach 50% in 2026 and the expected recovery timeline for risk-adjusted NIMs. He also probed the company's risk management strategies and potential alternatives like partnerships or M&A if the bullish scenario for Argentina does not materialize.

Answer

Patricio Supervielle, Chairman and CEO, affirmed the goal of a balanced approach, noting the current tilt towards corporate loans (over 50%) but anticipating a return to 50-50 or higher retail demand by late 2026. Mariano Biglia, CFO, added that corporate lending tenors might lengthen next year, moving beyond just working capital. He also projected an earlier recovery in risk-adjusted NIMs, potentially before H2 2026, as cost of risk decreases and retail loan growth resumes. Patricio Supervielle also discussed the bank's resiliency through tightened origination standards, cultural reshuffle, and the strategic importance of InvertirOnline, while acknowledging openness to strategic alliances and new businesses.

Brian Flores inquired about Grupo Supervielle's strategy for a more balanced loan mix, specifically if corporate loans could reach 50% of the mix in 2026 and the expected recovery in risk-adjusted NIMs. He also asked about risk management and potential alternative strategies (partnerships, asset sales, M&A) if the bullish base case scenario for Argentina does not materialize.

Answer

Patricio Supervielle (Chairman and CEO) stated that the bank aims for a balanced approach but expects corporate loans to remain above 50% in H1 2026, potentially shifting towards 50-50 or more retail by Q4 2026 for higher NIMs. Mariano Biglia (CFO) added that longer-term corporate investments could emerge next year, and risk-adjusted NIMs could recover earlier than H2 2026 due to faster NPL decrease and retail portfolio growth. Patricio Supervielle also addressed risk management, highlighting improved origination standards, a customer-centric culture, the strength of Invertir Online for cross-selling, and openness to strategic alliances and new businesses.

Brian Flores asked about the downward revision in loan growth guidance, probing whether it was driven by funding constraints or capital limitations. He also inquired about a potential timeline for Basel III implementation and followed up on the reasons for the decrease in active users at Invertir Online and the expected loan mix contribution to NIM.

Answer

CEO Gustavo Manriquez attributed slower growth to restrictive monetary policy, not capital constraints, and highlighted new funding strategies. CFO Mariano Biglia added that capital is not currently a restriction and expressed optimism for a Basel III rule change by year-end. Regarding Invertir Online, CEO Diego Pizzulli cited lower retail trading volumes and increased FX market competition. For the NIM outlook, Biglia stated they expect a balanced, roughly 50/50 contribution from retail and corporate loans.

Brian Flores asked about the drivers behind the downward revision in loan growth guidance, questioning if it was due to funding or capital constraints, given the bank's Tier 1 ratio. He also inquired about a potential timeline for Basel III implementation and followed up on the reasons for the decline in active users at Invertir Online.

Answer

CEO Gustavo Manriquez attributed the slower growth to restrictive monetary policy, clarifying that capital is not a current constraint. CFO Mariano Biglia added that they are optimistic about a favorable Basel rule change before year-end. Regarding Invertir Online, CEO Diego Pizzulli explained the user decline was due to lower market trading volumes and new competition in FX transactions after deregulation, not a weakness in their value proposition.

Brian Flores from Citi raised concerns about Grupo Supervielle's capital position, noting the significant consumption of Tier 1 capital and questioning the bank's risk appetite and whether it would continue its aggressive growth strategy.

Answer

Chairman & CEO Julio Patricio Supervielle affirmed that the bank's risk appetite is unchanged, citing low debt levels in Argentina as a growth opportunity. He outlined a strategy to sustain capital by shifting the loan mix towards retail, implementing strict cost controls, and expanding leverage. CFO Mariano Biglia added that the 12-13% year-end CET1 ratio guidance is consistent with these plans.

Brian Flores of Citi questioned Grupo Supervielle's capital position, highlighting the significant consumption of Tier 1 capital over the last year and the path to its year-end target of 12-13%. He asked about the bank's risk appetite, whether it would continue its aggressive growth to defend market share or pivot to a more cautious origination strategy, and also inquired about the risk weight density of its assets.

Answer

Chairman & CEO Julio Patricio Supervielle stated that the bank's risk appetite remains unchanged, citing low debt levels in Argentina as a growth opportunity. He explained the strategy to sustain capital involves shifting the portfolio mix towards higher-return retail loans, strict cost controls, and increasing leverage. CFO Mariano Biglia confirmed the capital guidance is consistent with growth projections and provided details on risk-weighted asset calculations for different loan types.

Brian Flores inquired about the expected growth trajectory for the first quarter of next year, considering political uncertainty and pension fund withdrawals, and whether ROE levels would remain similar to 2025 or converge sooner to the 19.5% long-term target. He also asked if Yape's contribution could reach double digits by 2026.

Answer

CEO Gianfranco Ferrari noted that historical data shows a slowdown in Q1 of election years but suggested the current strong economic indicators might mitigate this for next year. He deferred 2026 ROE guidance to the next call. CFO Alejandro Perez-Reyes added that strong private investment and consumption are positive factors, expecting a 0.5% full-year impact on growth from pension withdrawals, concentrated in Q1. Gianfranco Ferrari confirmed Yape's contribution would "very probably" reach double digits by 2026.

Brian Flores from Citi asked about the potential for deceleration in Credicorp's growth and ROE levels in the first quarter of 2026, considering upcoming elections and the impact of pension fund withdrawals. He also inquired if the company's long-term ROE target of 19.5% might be reached sooner than anticipated, and about Yape's potential to achieve a double-digit contribution to Credicorp's revenue by 2026.

Answer

CEO Gianfranco Ferrari acknowledged historical slowdowns in election years' first quarters but noted current strong economic indicators, suggesting Q1 2026 might not be as low as past election periods. He deferred 2026 ROE guidance to the next call. Chief Risk Officer César Ríos added that strong private investment and consumption, despite election effects and pension withdrawals (estimated 0.5% full-year growth impact, concentrated in Q1), point to a strong year for credit growth in 2026. Gianfranco Ferrari confirmed Yape is very likely to achieve a double-digit contribution by 2026.

Brian Flores from Citibank asked for elaboration on the drivers behind the improved cost of risk guidance and inquired about Credicorp's long-term vision for its physical branch network, including potential monetization.

Answer

Chief Risk Officer César Ríos explained that the low cost of risk in the first half of the year resulted from restrictive origination measures taken in the prior year. He noted that in Q2, the company began originating higher-yielding, higher-risk portfolios, which will be reflected in the second half. CEO Gianfranco Ferrari added that the key metric is risk-adjusted NIM, not just cost of risk. Regarding branches, Ferrari stated that the network was reduced from 450 to 300 branches over the past few years, shifting their role from transactional to educational and commercial, with the bulk of the reduction already completed.

Brian Flores questioned why Credicorp is not updating its 2025 guidance given the strong Q1 performance, and asked if the company's sustainable ROE could realistically exceed the previously stated 18% target.

Answer

Chief Financial Officer Alejandro Perez-Reyes explained that the cautious stance on guidance is due to global uncertainties, such as potential trade wars and their impact on commodity prices, rather than Peru's domestic outlook. He indicated a guidance revision is possible once there is more global clarity. Regarding the long-term ROE, Perez-Reyes confirmed management feels they might be able to increase the 18% target but require a thorough review before committing to a new number.

Brian Flores from Citi requested more details on the provisioning for the Sartor case, including the base case for its evolution and timeline, and confirmation that the impact was isolated to Credicorp Capital.

Answer

CFO Alejandro Perez-Reyes clarified that a provision of PEN 259 million was made, primarily at Atlantic Security Holding, not Credicorp Capital. He expressed comfort with this provision level based on current information but noted the resolution timeline is uncertain as it depends on a liquidator. CEO Gianfranco Ferrari added that the full expected economic impact was registered in Q4 2024.

Brian Flores inquired about the drivers behind the significant increase in low-cost deposits and the sustainability of the improvements in cost of risk.

Answer

Chief Executive Officer Gianfranco Piero Ferrari de Las Casas and Chief Financial Officer Alejandro Perez-Reyes attributed the growth in low-cost deposits to a long-term strategy focused on enhancing transactionality and digital channels. They also affirmed that the cost of risk trend is sustainable, driven by fundamental economic improvements and internal risk management, not just the temporary liquidity from pension withdrawals.

Brian Flores asked about the sustainability of Grupo Cibest's consistently reducing funding costs, market share gains, and whether these trends could lead to upward revisions in sustainable ROE levels.

Answer

Juan Carlos Mora (CEO) emphasized a structural advantage from a hybrid digital and physical presence, leading to a dispersed, low-cost deposit base. He noted improved ROE guidance for 2025 (around 17%) and 2026 (16%-17%). Mauricio Botero Wolff (CFO) added that while low-cost funding efforts are sustainable, the cost of deposits (currently 4%) will eventually reach a limit.

Brian Flores with Citibank inquired about the sustainability of Grupo Bancolombia's funding cost reduction initiatives, market share gains, and whether these trends could lead to upward revisions in the company's sustainable Return on Equity (ROE) guidance.

Answer

CEO Juan Carlos Mora highlighted the structural advantage built through a robust digital and physical presence, enabling a diverse and manageable deposit base. He noted the improved ROE guidance for 2025 (around 17%) and 2026 (16-17%). CFO Mauricio Botero Wolff added that while cost of funding reductions are sustainable due to value proposition investments, they will eventually reach a limit, with total cost of deposits expected to remain around 4%.

Brian Flores of Citi asked about the sustainability of the bank's low cost of funding, the potential for accelerating the share buyback program, and whether the long-term cost of risk guidance includes Neki's growth.

Answer

VP of Strategy & Finance Mauricio Botero Wolff affirmed the sustainability of the low cost of funding, attributing it to a strong value proposition focused on transactionality. He stated that capital distributions, including buybacks, are guided by solvency ratios and ample liquidity at the holding company level. He also confirmed that the structural cost of risk guidance of 1.8-1.9% already incorporates the expected growth from Neki's loan portfolio.

Brian Flores asked about the sustainability of the company's low cost of funding in Colombia. He also followed up on capital distribution, inquiring if the share buyback program would be accelerated at current price levels, and confirmed if the structural cost of risk guidance includes Neki's growth.

Answer

VP of Strategy & Finance Mauricio Botero Wolff confirmed the cost of funding is sustainable due to a strong value proposition focused on transactional accounts, which drives stable, low-cost deposits. Regarding capital, he explained that distributions are guided by solvency ratios and that the holding company's underleveraged structure provides ample capacity for both buybacks and dividends. He also confirmed the 1.8-1.9% structural cost of risk guidance already incorporates the expected growth from Neki.

Brian Flores of Citi asked about the sustainability of the company's low cost of funding in Colombia and the specific strategies being employed to maintain this advantage. He also inquired about capital distribution, specifically whether the share buyback program might be accelerated given current stock price levels.

Answer

VP of Strategy & Finance, Mauricio Botero Wolff, explained that the low cost of funds is sustained by a strong customer value proposition focused on transactionality, which drives growth in low-cost savings accounts. He also highlighted a mix shift towards retail digital time deposits for faster repricing. Regarding capital, he stated that the 11% Tier 1 ratio for Bancolombia remains the key trigger for distributions, and the current underleveraged capital structure provides ample room for both buybacks and dividend growth. He also confirmed the structural cost of risk guidance includes NEKI's growth.

Brian Flores from Citigroup Inc. asked about the drivers behind the guidance for service and commission revenue growing below the portfolio, and how the 'One Itau' initiative factors into this outlook.

Answer

CEO Milton Maluhy Filho attributed the dynamic to a mix of factors: card revenue is impacted by portfolio derisking, while asset management and insurance show strong growth potential, and investment banking is expected to be weaker than 2024's record year. He reiterated that potential upside from 'One Itau' is not yet included in the guidance, as the priority is a quality migration before quantifying its significant cross-sell potential.

Brian Flores asked about the sustainability of the strong revenue from advisory services and brokerage, driven by a robust DCM market, and whether this line item is expected to normalize from its current high level.

Answer

CEO Milton Maluhy Filho acknowledged that the quarter was a record for DCM but stated that this revenue line is highly dependent on market conditions. While Itaú maintains a leading market share, he expects a degree of normalization in the coming quarters, suggesting that the exceptional performance of Q2 is unlikely to be sustained at the same rhythm, even if the market dynamic remains healthy.

Asked about the bank's capital position, noting the increased payout and reduced CET1. He questioned if the bank's risk appetite would become more moderate and how they view the balance between growth, capital, and dividends, especially in a potentially tighter interest rate environment.

Answer

The bank stated the CET1 reduction was planned and the current level of 11.6% remains above their internal prudential buffer. They consider a level around 11% to be healthy and sufficient for organic growth. The current 45% payout policy is based on an outlook of economic growth and a Selic rate of 9.75% for next year, and they do not anticipate changes unless this scenario fundamentally shifts.

Brian Flores noted the improving cost of deposits and asked for details on the specific measures driving this, the competitive landscape, and the expected future trend for funding costs.

Answer

CFO Cassiano Scarpelli attributed the improvement to targeted commercial actions in middle-market cash management, data-driven CRM strategies for retail clients, and specific products like a remunerated CDB. He emphasized that a holistic focus on client relationships across both physical and digital channels is optimizing the funding mix and lowering costs.

Brian Flores from Citigroup noted the improvement in Bradesco's cost of deposits as a percentage of the CDI rate. He asked for more details on the specific measures being taken on the liabilities side and for commentary on the competitive landscape for client funding.

Answer

CFO/CTO Cassiano Scarpelli attributed the improved funding cost to targeted commercial actions. He cited success in middle-market cash management, enhanced CRM utilization for low- and mid-income client deposits, and a specific CDB product that remunerates client balances. He stated this combination of initiatives has led to better optimization of the bank's cash, liquidity, and overall cost of funding.