Grupo Supervielle S.A.

Good morning everyone and welcome to the Grupo Supervielle second quarter 2021 earnings call. This is Ana Bartesaghi, Treasurer and IRO. A slide presentation will accompany today's webinar, which is available in the investor section of Grupo Supervielle's investor relations website, gruposupervielle.com. Today's conference call is being recorded. As a reminder, all participants will be in listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. If you want to ask a question, you need to be connected to the Zoom platform from any device. We will not be able to take your questions if you are connected from a phone line. Also, please make sure your name and last name appear in the Zoom platform you are using. To ask a question by voice, please press the raise your hand button located in the Zoom platform. To withdraw your questions, press raise your hand again. You can also send your questions in written form via the Q&A box in the Zoom platform anytime during the call. We will ask you to limit yourself to one question and a follow-up and then you can raise your hand again. Speaking during today's call will be Patricio Supervielle, our chairman and CEO, and Mariano Biglia, our financial officer. Also joining us are Alejandro Stengel, second vice chairman of the board, and Bank CEO, and Jorge Ramirez, first vice chairman of the board. Alejandra Norton, board member of several Grupo Supervielle subsidiaries, will also be joining us for today's call. All will be available for the Q&A session. Note that starting first Q20 as per central bank regulations, we began reporting results applying hyperinflation accounting in accordance with IFRS rule IAS 29. Therefore, all results in this presentation are adjusted for inflation as of June 30, 2021, unless otherwise noted. In addition, following the retrospective application of the Central Bank Communication A7211 effective January 1st, 2021, figures for all quarters of 2020 have been restated. For your convenience, our earnings report filed yesterday after market close also includes managerial results in nominal terms. Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, including as a result of the COVID-19 pandemic. And I refer you to the forward-looking statement section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances. Today, Mariano Biglia, our CFO, will start the call discussing our performance for the quarter and our near-term outlook. Patricio Supervielle, our chairman and CEO, will follow with an update on our mid-term strategic initiatives.

Thank you, Ana. Good morning, everyone. Thank you for joining us today. Please turn to slide four of our earnings presentation. We are navigating recessionary environment with activity in the quarter, further penalized by the second wave of COVID-19, resulting in system loan demand growing below inflation and remaining at historical lows. Central bank regulations for volumes and prices of banking assets and liabilities have also been putting significant pressure in NIM in past quarters. These, together with higher turnover taxes, along with increased loan loss provisions after the deferral programs finalized last March, resulted in a net loss of 318 million pesos and negative ROE of 2.8% this quarter. For the first half of the year, and excluding non-recurring severance charges, we will have reported a net income of 643 million pesos and ROE in real terms In terms of efficiency, our comparable efficiency ratio, excluding non-recurring severance payments and early retirement charges, deteriorated to 72% from 66% in the prior quarter. This mainly reflects a nearly mid-single-digit decline in revenues, while comparable total expenses were relatively flat. Looking at the first six months of the year, when excluding non-recurring charges, comparable expenses were down 6%, while personal expenses dropped 9% year-on-year. Finally, we maintained strong liquidity and a solid capital base, closing the quarter with a Tier 1 ratio of 14.3%, up 50 basis bonds sequentially. Now, turning to our strategic initiatives. To deepen our commitment to long-term value creation, Patricio will discuss shortly how we are advancing on our digital transformation agenda. Moving on to our loan performance on slide 5. Our loan book posted a slight sequential contraction reflecting poor or weak credit demand. The peso loan portfolio remained relatively stable sequentially as a decline in the retail loan portfolio was partially offset by financing to corporates and mandatory SME lines. Consumer finance loans increased mid-single digits sequentially, although we maintain tight credit scoring standards in underwriting policies. Finally, U.S. dollar loans in original currency were up 5% sequentially. Note that government mandatory credit lines accounted for 10% of our loan portfolio. have 100 basis points sequentially and includes close to 14 billion pesos in SME loans at preferential rates. Turning to funding on slide six. Equity remains solid. The loan-to-deposit ratio continued to contract this quarter, reaching a record low of 53%. Peso deposits rose in the low single digits sequentially driven mainly by seasonal increase in core retail deposits following the 50% payment of the 13th salary in June. Note that average balance of peso deposits posted increases of nearly 12% year over year and over 5% sequentially. Dollar deposits in original currency were up 4% sequentially, accounting for slightly over 12% of total deposits compared to 13% in the prior quarter. Now moving on to the P&L on slide seven. Peso NIM stabilized at 18.7% after contracting several consecutive quarters pressured by regulatory controls and the recessionary macro. The bottom right chart shows how the share of average Peso loans over total average Peso interest earning assets has compressed since the highs of 85% In the first quarter of 2018, two levels of 46% this quarter, negatively impacting total need. Net financial income increased sequentially in the low single digits to 11 billion pesos, mainly reflecting increased volumes of central bank lilies, together with higher yields and volumes of peso government bonds. Loan repricing, including the new government mandatory credit lines, granted to SMEs at preferential interest rates also contributed to offset over a week loan demand. Moving on to asset quality on slide eight. Loan loss provisions net were 1.7 billion pesos up from 1 billion pesos in the prior quarter with cost of risk net rising to 5.7%, although below 2020 levels. Higher delinquency in retail loans observed since the lifting of automatic deferrals in March resulted in higher provisions this quarter. Taking a conservative stance, we did not apply the COVID-19 anticipatory provisions created in 2020 to these loans. At quarter end, COVID-19 anticipatory provisions amounted to 2.4 billion pesos versus 2.8 billion pesos as of March 31st. The top right chart of this page depicts our total provisioning ratio, which increased to 7.2% in June from 6.9% in March. The MPI ratio increased quarter-in-quarter by 40 basis points to 4.4%, driven by credit cards after the end of the grace period and the mandatory reclassification of customers performing with Supervielle but not performing with other banks. By contrast, we observed an improvement in corporate NPLs. On slide nine, we provide an update on our loan performance and asset quality for July. Keep in mind, this is management information. In terms of asset quality, NPLs for July increased to 5.5% from 4.4% in the second quarter, mainly driven by retail customers and to a much lesser extent by corporates which reflects a single fully collateralized loan that was reclassified as NPL for the wind central bank regulations. Fortunately, 80% of our non-performing commercial loans are collateralized. Now on slide 10. While guidance remains suspended due to the continued limited visibility ahead, On slide 10, we share our views on the main drivers of the business for the remainder of the year. Basically, nominated loans, which are today's historical lows, are expected to grow below inflation for both commercial and consumer loans. At the same time, we see deposits growing above inflation, but dampened by FX restrictions and interest rate flows and time deposits. Note, the mix has been changing with non-remunerated Thank you very much. We expect cost of risk to be below 2020 figures, but above the historical average in line with our expected loss models. With respect to margins, short-term NIMs remain pressured by several factors. Weak credit demand, the impact on cost of funds from the forward interest rates on time deposits, and subsidized rates on loans. Personal and administrative expenses are likely to grow above inflation, Thank you very much. to remain at comfortable levels supporting long-term sustainability. As I mentioned earlier, note that 100% of our capital is hedged against inflation. Now let me turn the call to Patricio Supervielle, who will provide an update on our strategic initiatives. Patricio, please go ahead. Thank you, Mariano.

You've heard Mariano address our financial results and expectations for the remainder of the year as we navigate a challenging backdrop characterized by three years of economic recession, further deepened by the pandemic, which drove industry loan demand to historical lows. As Mariano also discussed, increasing central bank regulations on budgets and prices of banking assets and liabilities since 2018 have continued to put significant pressure on me. At the same time, the pandemic accelerated digital adoption and remote working. In this context, we decided to accelerate our transformation program and increase efficiencies, prioritizing long-term value creation. We are working on three key fronts. First, accelerating the digital and operational transformation at Banco Supervielle. Second, Udo, our consumer finance subsidiary, is building a full digital banking service. Third, diversifying revenue regeneration beyond Argentina. On the next few slides, I will provide greater visibility on this transformation. In the exhibit at the back of our earnings call presentation, you can find additional information on the progress of our digital KPIs. and as well as a more detailed description of these initiatives and timeline. Moving to slide 12, let's start with our strategy of accelerating the digital and operational transformation of the group. Our goals are twofold. On the one hand, we seek to expand our clan base while retaining loyalty and primary banking relationship remain in a solid position when demand resumes. At the same time, we expect to accelerate cost efficiencies while preserving an 11% tier one ratio by 2024. These goals run investments of approximately 20 billion pesos in real terms of which close to 8 billion pesos are anticipated to be deployed this year Slightly over 7 billion pesos next year and 4.5 billion pesos in 2023. Note this does not include investments in the regionalization initiatives, which I will discuss briefly, starting with the transformation of Banco Supervielle. First, we are executing our IC strategy, adding APIs to Accelerate Digital Development and Time to Market, a data lake to become a data-driven enterprise and migrate into a hybrid multi-cloud to provide us with the required flexibility to grow efficiently. We are advancing at full speed to transform the journeys of our customers into a superlative experience. Second, our branch network has been transformed using best-in-class technologies to facilitate self-service banking and expand SMEs reach with the vision of everywhere and anytime banking. Third, we are right-sizing our branch network and accelerating headcount efficiencies. Fourth, we are moving towards a hybrid work-based model optimizing our real estate infrastructure and providing for more flexibility among our colleagues. In this sense, we are gradually reducing rental space in our corporate headquarters with the resulting cost savings of $5 million over the next three years. We expect that these efficiency measures will be repaid in 24 to 30 months through cost savings and revenue growth when demand resumes. Please turn to slide 13. In terms of the transformation of UDO, our consumer finance divisions, our goals are to offer the best digital banking mobile platform for retail customers while stepping up revenue, free revenue growth and lowering cost of funds by attracting retail deposits. The launch on August 15 of UDO's mobile We have an attractive pipeline for the next six months with a planned edition of payment, wallet, insurance, investment products, U.S.-denominated accounts, and well-being services. This move also allows us to target high-income customers looking for digital-only banking services. Importantly, We recently renewed the financial services agreement with the Denarvaez Group, which acquired Wallmet Operations in Argentina under more flexible conditions. Now, please move to slide 14. In terms of diversifying revenue origination beyond Argentina, we plan to approach this through two businesses, starting with our broker, The goal is to offer US investment products to select countries in Latam, excluding Brazil, through mobile apps and online applications. Our subsidiary in Uruguay has recently submitted a request for approval from the central bank to operate as a digital securities broker. In the next 12 months, we expect to launch a mobile-first investment marketplace and to gradually expand in key countries of the region where access to online trading in the U.S. market is limited to high-end customers. This initiative will be fully financed by funds at the subsidiary. In addition, this month, our board of directors also approved the crypto strategy we plan to deploy in the region, again tapping unsatisfied market needs. YOL Invertir Online aims to offer the possibility of buying and selling cryptocurrencies to customers through a wallet, concentrating stock and crypto asset investments in the same platform. This service will be offered to individuals in Argentina, which are the core of current YOL business and will be powered by a third party. Now please turn to page 15. The other business that will spur our geographical diversification is Udo Servicios, for which we will deploy well-being and health services under the B2C or B2B2C format in certain countries, in Latam excluding Brazil. We aim to leverage over 15 years of successful experience as a leading service aggregator and marketeer of non-financial services in banking industry in Argentina. These services provided by third parties seek to tap unmet demands in health, dentistry, ophthalmology, among other areas that contribute to the well-being of our customers in their everyday lives. As of today, we have reached agreements with two world-class healthcare providers present in the region, one of which we have been working with in Argentina for many years, and we plan to continue adding services over the next month. In closing, we expect near-term profitability to remain impacted by overall weak demand and pressure on needs, coupled with the required costs and investments of the transformation strategy. We are stepping up our transformation strategy to meet and anticipate the new banking and wellness demands of our clients, while also attracting new digital clients. We are aggressively pursuing cost savings opportunities While offering flexibility to our workforce through a hybrid working structure and have set in motion strategies to expand and diversify our revenue streams beyond Argentina. With a comfortable capital position, we expect to achieve our ambitious goals. Now we are open to the questions.

Thank you, Patricio. At this time, we will be conducting the question and answer session. As a reminder, to ask a question, you need to be connected to a Zoom platform. We will not be able to take your questions if you are connected from a phone line. To ask a question by voice, please press the raise your hand button and press it again to withdraw your question. You can also send your questions in written form via the Q&A box. We will ask you to limit yourself to one question and a follow-up, and then you can raise your hand again in another round. One moment while we poll for questions.

Thank you. Thank you, Ana. Hi, good morning, Patricio, Mariano, and all your team. And thanks for the opportunity. My first question is on asset quality. You mentioned in your presentation that you're expecting the peak of MPLs in third quarter. So, just wondering if you have a potential range for that NPL pick. Also, in the presentation, you are already presenting July numbers, and they are showing that the reserve coverage ratio continued to normalize to 128%. So, what would be the level of reserve coverage ratio that you're expecting for the rest of the year? And Just wondering if it's considering a potential impact from the Delta of the third wave of the COVID-19. Thank you.

Thank you, Ernesto. First, let me state that basically what happened in this water mainly reflects the reality We are fully comfortable with the coverage position and this is constantly reviewed with the risk models. Please, I would like to have Mariano give more specific details on answering your question.

Sure, Patricio. Hello, Ernesto. Yes, let me give you some regarding MPLs and coverage ratio US. As you know, as of June, as of March, in fact, automatic deferrals have been ended by the central bank. Thus, any debtors that didn't resume payments in April and haven't done that so far are being past due more than 90 days. and thus entering the MPL ratio in July. That's why we showed some managerial information showing July figures regarding MPLs. So what you see in July is an increase of a little bit more of one percentage point in MPLs and this reflects All debtors that haven't been paying in maybe for six months or maybe for one year and you're seeing them all together in one month. For the end of the third quarter and the end of the year, we think that NBLs may peak in the next quarter as but that would be similar to July figures or slightly higher as any new MPS that haven't been shown as of July entering in August or September. And then we have the new portfolio originated after these automatic deferrals. So we should be seeing MPS Mariano Biglia, Mariano Biglia, Mariano Biglia, Mariano Biglia, Mariano Biglia, Mariano Biglia, Mariano Biglia, Mariano Biglia, Mariano Biglia, Thank you very much and then for my second question is on your digital transformation.

We have seen different traditional banks in the region exploring to create independent digital banks. So considering that you have Yudo and you have other digital initiatives such as the online investments, cryptocurrencies, insurance, have you explored the idea to incorporate all those initiatives in an independent digital bank?

Alejandro, would you like to answer this question?

Yes, thank you, it's a very interesting question. Right now, the thrust of our strategy is to make sure that our traditional bank, Banco Supervielle, goes through a successful digital transformation. We are doing this through a series of initiatives, but basically it has to do with We are also making great progress in the digital adoption of different segments notably great progress has been made during the pandemic in the retiree segment which we thought would be There are reasons that have to do with the business model, with our agreement with the Grupo de Nervais, which deploys the consumer division on what was the Walmart network, to make that unit sustainable, stand-alone, and to focus on increasing their funding capabilities by taking deposits from the public. We are, however, working on an ecosystem initiative which will contemplate certain customer journeys to be integrated throughout the different companies, and many of the ones you mentioned are included, like journeys that would integrate banks IOL, the online broker, insurance, and other aspects of the division. So this is a long answer to say, yes, we are assessing the possibility of integrating them into an ecosystem. I wouldn't call it one independent digital bank, but yes, we are looking forward to integrating this ecosystem, which is a concept close to the one you point out.

Perfect. Thank you so much.

Thank you, Ernesto. Our next question comes from Gabriella Nobrega with Citi. Gabriel, go ahead.

Hi, everyone. Good morning, and thank you for the opportunity to ask questions. I'm also going...

I think we lost you, Gabriel.

Sorry, sorry. Can you hear me now?

Yes, perfect.

Okay, cool. So... So my question is also on this digital transformation. We acknowledge all of the efforts here and we understand the investments as well. But I wanted to understand how you were looking at the competitive landscape, even more so as we saw the recent valuation of Wallah. And we also see increased efforts from Mercado Pago. And so I just really wanted to understand Thank you. I will pass this question to Alejandro again. Good morning, Gabriel. It's a great question, actually.

First of all, you must remember that the Argentine competitive scenario has been very different and very difficult for fintechs as compared to other parts of the world and the region. The reason being that the profit pools that you typically found, for example, in the US, that had to do with the costs of transfers and the cost of maintenance of accounts in Argentina have long been reduced to zero and we have immediate transfers available for at least 10 years now. And we also have universal savings account free of charge. These two conditions have made the typical profit pools where a fintech start from to cherry pick the value proposition of banks more difficult in Argentina than in other competitive scenarios. Having said that, the fintechs that have sprung up, including the digital banks that have arisen, have had a significant difficulty in developing integral relationships. They have been able to create some balances in the accounts, but they have had significant difficulties on the asset side. And when you look at them in detail, what you will find is that they've been basically lending to the central bank or to the Argentine state. So integral relationships and principality developed by digital banks in Argentina still remains to be proven. In the case of other players like Wallah, they have actually moved into requesting a license through an agreement and a merger with Willow Bank to be operating as a digital bank and what they've done so far is be extremely successful in creating a large amount of clients but we have yet to see the profitability of those operations going forward and the funding of those operations because otherwise they will be operating in the mode of a narrow bank and as you know narrow banks are not very profitable. So we think there is a significant opportunity for banks, traditional banks like us, that manage to transform their models into digital. And what we see is acquisition costs. and Scaling Costs, Marginal Acquisition Costs and Marginal Scaling Costs actually getting very close to fintechs. And this is providing a significant evening of the playing field for traditional banks to be able to expand. In terms of Mercado Paro, if I recall your last point, there is a very good progress done on Morro, which is the platform, the payments and clearing payment platform that has been launched by a group of banks. Banco Supervielle is a shareholder at Modo. And the last figures I recall is that Modo has been able to recruit 4 million merchants to its platform and is continuing to grow very successfully. This, as you might recall, follows a pattern of what banks responded in the U.S. by the creation of Zelle. Here we call it Modo and it's doing pretty well. I don't know if I've covered your question, Gabriel.

Sorry, Gabriel. I'd like to further a little bit the answer of Alejandro. Concerning the pure digital banks in Argentina, so far they have been, let's say, I think they have achieved a good customer and many other digital banks that are operating in Argentina. But their business, they have no assets. So they only lend to the central bank, the leagues and so on. So they have basically, this is a problem situation for the digital banks, which in our case, the UDO launch, we believe we have a better competitive advantage because we have assets already, We have the capability to create assets, personal loans, credit cards. We have a strong capability on that. And we believe that attracting deposits will be an easier task because basically recently will be sort of provided to the 250,000 customers that are operating already with assets at YouTube. Concerning also another aspect I'd like to point out is that some of the recent valuations or capital raisings of fintechs in the region, they reflect, I think, For instance, the case of Wallah, they reflect the revenue generation or revenue expectations that they might get beyond Argentina. And this is also the reason why we believe in our case that we need to move beyond Argentina with certain businesses where we have capabilities. And this is why we are making the moves we're making.

All right. That makes sense. And I completely agree with you. I don't know if you guys saw, but NewBank is trying a valuation of $100 billion. So I think it's exactly in line with what you just said on the recent capital raises. And if you just allow me a follow-up here, I understand that you are going to see efficiency gains over the coming 12 to 24 months. But I wanted to understand, how are you seeing client engagement? You're doing a lot of great things here, launching really good products. Alejandro, do you want to answer that? Sure. Another great question, Gabriel. We track customer satisfaction very closely, and you're right.

We are seeing a significant increase in our NPS. We do this at different levels and the investments are actually panning out in terms of increasing customer satisfaction. Things that have driven this customer satisfaction is the increase of our self-service areas in our lobbies. On average, we are moving from something that used to be around 30 square meters to a new format of 100 square meters, which is a significant increase in what we call espacio 24. And digital and automatic channel adoption has shot up, including in the segments of the retirees, and as well as satisfaction in that segment, which has proven very, very successful. We have also introduced several changes in our mobile app. There has been also a recognition in that this usability is getting better. We typically see a pattern in which initially when you change the configuration, there is some customers that actually complain about having to change. But then it picks up very quickly and is proving to be a great booster of satisfaction. So I think client engagement is increasing. We are seeing this also on the small and medium enterprises as we deploy a value proposition on small and medium enterprises in some points of our network where we did not have them. And we continue to explore this kind of format including hubs and virtual hubs that will allow for, we believe, a very enhanced customer experience too. So we are investing and we're starting to see the results. There are some KPIs in exhibits that can help you track them as we publish them every quarter. I don't know, I've addressed your question.

Alejandro, let me build on your answer. There's another aspect which we are working and I think which will be very powerful in building strong relationship with customers, in this case individual customers. As you know, in our bank, we believe that We started to work on an investment platform that will be integrated with our ecosystem. The bank connected with the Thank you very much. We believe this is very important and I think we are one of the few banks doing this and looking forward, this is going to be a very strong part of our strategy. And also, excuse me, also you do, we have the same features connected with the investment platform.

All right, Alejandro and Patricio, thank you very much. This is really clear and congratulations on these new efforts.

Thank you, Gabriel. Now our next questions come from Yuri Fernandez with JP Morgan. Hello, Yuri. You can proceed with your question.

Thank you, Ana. Hi, Patricio, Alejandro, Mariano. Good morning, everyone. I have also follow up regarding the digital strategy, more specifically about the fee and NII mix. Right. I guess it's clear that you want to go forward. and many more. I guess where I'm trying to access here is that maybe our ROEs can improve in the long term because of this strategy, not only because of lower capital allocation, right? You're not required to have Basel and capital requirements on that, but also because you are less regulated, right? So that's my first question, and I will do another one after this.

Thank you. Mariano would like to provide an answer on that. Sure.

Regarding the new initiatives, as you said, they are basically services which will increase our net fee income. Right now, mainly at the bank level, we have a lot of restrictions already set in place. So we don't see there's much room to further create more restrictions like commissions on loans to individuals, like commissions on transfers, all fees that have already been restricted, some of them several years ago. So we are already working with that environment. But where we see more room to increase net fee income, as you mentioned, is on services like our brokerage service or the sale of non-financial services like medical assistance. So as far as we increase those complementary services to our customers or the employees, Thank you very much. Thank you very much.

We are very satisfied with the prospects of insurance, our insurance business in Argentina, and particularly now, I mean, it was impacted, of course, the insurance was impacted by the pandemic in terms of part of it was because when we had less people in branches, it was more difficult to connect with customers. But this is gaining traction, but also the brokerage business, the insurance broker is gaining a strong traction among medium-sized enterprises, SMEs and typical clients of Bank of Supervielle. And this has a huge potential going forward for our franchise.

Thank you, guys.

I think you're quite right on in terms of looking at what we're trying to do in terms of the fee generating businesses because it definitely has a greater efficiency in terms of cost to income and it's got a low capex model for scaling. But a key feature that I would add to that vision is that we are looking to Increasing engagement and loyalty and offering some of these products in a high inflation context is very important for that purpose too.

Thank you, guys. Just to make it all happen, going to the investment plan you announced, are we seeing these already in the second quarter numbers? And also, are you going to capitalize those costs? How should we think about The 7.8 billion for this year. Should we see an acceleration in the second half? Should this be capitalized and then we should see an increase in DNA going ahead? How do you think about the impact of those numbers in your P&L, the numbers in 21, 22 and 23? Thank you.

Sorry, Yuri. Unfortunately, we lost you. Could you repeat this question, please?

No, sure. So you announced an investment plan of 7.8 billion in real terms in 2021, 7.2 billion in 2022 and 4.5 billion in 2023. So I'm just asking how you are going to treat those numbers. Are they going to be capitalized or are we going to see this directly on expenses? Like how should we think about the impact for your P&L from the investment plan?

Okay, again, we lost Julien, but let's talk of your question. Mariano, did you want to answer this?

Yes, let me tell you if there's another part of your question that we couldn't be able to hear, but you asked about investment and what would be the treatment of that investment. That number includes also severance costs, not only investment in the traditional accounting standard. So everything related to severance will be expensed in the quarter it is incurred and not being capitalized. And then on the other hand, we have between 50 and 60% of those investments that are related to new developments. Those are capitalized. We amortized according to the accounting standards in five years. And then also there's a minor part within all those investments that relates to improvements in branches where we are changing the service model that Alejandro mentioned. Thank you guys and good luck with the digital strategy.

Thank you.

We received a question in our Q&A from Santiago Petri. I will read so the audience hears this and then we answer. What expectations do you have on the upcoming midterm elections? Would the result contribute to more rational economic policies? Do you have any expectation about the potential IMF agreement?

Alejandro will answer this question.

Right now, Up to today, Santiago, what most polls show and most analysts are saying is that what seems likely is basically an election that will favor the incumbent, the current incumbent. There is some speculation that because of an issue around a legal process conducted against the president, that the way that this pans out into the public will have an impact on his image and therefore impact the elections. But right now, the mainstream thought is that we will be seeing What would be a victory of the incumbents or the official party that would be somewhere around between 5 to 10% difference between those that come from the opposition. Having said this, we think that After the elections, there will be a process in which the government will have to conduct some form of adjustment, and we foresee an agreement with the IMF, probably not a terribly stringent and severe IMF agreement, but something in the lines of allowing a gradual alignment of and many more. We believe that this could come basically in the first quarter of next year. Having said this, there have been some rumors that that agreement could come I hope I have addressed your question, Santiago. Okay, one moment, if we have any more questions. So,

This is the end of the Q&A session, I think. So, ladies and gentlemen, we have reached the end of today's question and answer session. Thank you for joining us today. We appreciate your interest in our company. And we look forward to meeting more of you over the coming months and providing financial and business updates next quarter. In the interim we remain available to answer any questions that you may have. Thank you and stay safe and healthy. You may disconnect now.