On August 10, Grupo Supervielle (NYSE:SUPV) reported second-quarter results that swung the Argentine bank back into the black, but the number that will decide whether the rally holds is 17%, the share of its workforce that is now gone. Net income landed at AR$12.8 billion for the quarter ended June 30, a sharp reversal from the AR$18.2 billion loss booked just three months earlier. The reversal was real, yet a chunk of that earnings power was manufactured by the same layoffs still working their way through payroll.
Fewer Employees, Fatter Margins
Supervielle’s cost-cutting is the clearest story in the quarter. Group headcount is now 17% below year-end 2025 levels, a reduction the bank says will produce AR$42 billion in annualized personnel savings once fully phased in by the third quarter of 2026. Strip out the one-time severance charges tied to that plan, and adjusted net income reached AR$36.2 billion for the quarter, translating into an adjusted return on average equity of 12.4%. Run the math as if the savings had been in place the entire period, and structural ROAE climbs to 14.4%, a very different number than the 4.4% headline figure.
The lending side is healing too. Net interest income rose 13.1% sequentially, pushing net financial income up 8.3% and expanding the net interest margin to 20.3% from 17.7% in the first quarter, as funding costs fell faster than the bank could reprice its assets. The efficiency ratio improved to 63.4% from 68.9%, and would have been 52.3% without the severance charges. Loan loss provisions fell 5.8% quarter over quarter to AR$68.0 billion, and the NPL ratio ticked down to 5.5%, which the company puts 210 basis points below the industry average. Deposits grew 4.7% sequentially. The bank is also layering on new distribution, including a card partnership with Aerolíneas Argentinas and an exclusive deal with Flash Argentina, part of the Mercado Libre ecosystem, to finance used vehicle purchases starting in the fourth quarter of 2026. At IOL, assets under custody grew 11% in dollar terms during the quarter.
Cracks Still Run Through The Book
The first half tells a rougher story than any single quarter. Supervielle posted an attributable net loss of AR$5.4 billion for the six months ended June 30, compared with net income of AR$29.4 billion over the same stretch a year earlier. That swing came with real upfront costs, including roughly AR$36.0 billion in extraordinary personnel expenses in the quarter alone. Return on average assets was just 0.6% in the quarter and negative 0.1% for the first half.
Total loans fell 1.4% sequentially, following a 5.6% drop in the first quarter, as the bank held back on new lending rather than chase volume in a private sector still short on transactional activity. Delinquency in the commercial book actually rose during the quarter, reflecting the lagged effect of higher interest rates on small business borrowers. The coverage ratio, which measures reserves against bad loans, slipped to 98.9% from 103.9% in the first quarter and 129.7% a year earlier. Capital thinned too, with the CET1 ratio falling to 14.2% from 15.4% in the prior quarter, while the leverage ratio climbed to 7.4x from 6.5x a year ago.
What The Market Is Pricing In
12 hedge funds held Supervielle in both the most recent quarter and the one before it, an unchanged count that suggests the market is still on the fence rather than piling in or bailing out. Short interest sits at 4.55% of the float, enough to signal a real, if modest, bear camp rather than an afterthought. Neither figure suggests conviction has shifted much since the layoffs and the earnings swing began playing out.
The Turnaround Still Needs Proof
Supervielle’s second quarter shows a bank that got smaller and, for now, more profitable because of it, with margins widening as funding costs fell faster than expected. But the first-half loss and the rising commercial delinquency show how much of that improvement still rests on temporary tailwinds and one-time charges. The AR$42 billion in annualized savings only pays off if capital holds, and CET1 has already slipped from 15.4% to 14.2%. Commercial delinquency, not the retail book, looks like the next thing to watch, since it moved the wrong way even as consumer credit quality improved.
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