43 slides from Intercorp Financial Services's investor presentation, September 2022
Slide 1: Management Presentation
Management Presentation September 2022
Slide 2: Safe Harbor for Forward-Looking Statements
Safe Harbor for Forward-Looking Statements This corporate presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this corporate presentation regarding Interbank’
Slide 3: Interbank in numbers
Interbank in numbers 599 Earnings 22% MS consumer 9% MS commercial 18% (S/ mn) loans banking ROE 44% C/I 5.0 Customers 68% Digital ratio (mn) customers As of June 30, 2022 2
Slide 4: Interbank at a glance
Interbank at a glance 3
Slide 5: Leading bank in Peru with strong financial performance
Leading bank in Peru with strong financial performance Financial highlights Leading position in the Peruvian banking system(2) As of June 30, 2022 S/ mn | US$ mn Assets (1) 65,637 | 17,160 Gross loans (1) 43,886 | 11,473 #3 #2 #1 21.7% 23.2% Deposits (1) 18.4% Market share in Market share in 43,600
Slide 6: Solid capital ratios
Solid capital ratios Key initiatives Capital ratio evolution Solvency Banking ▪ Fully capitalized 2019 earnings to strengthen System 15.1% 15.1% 14.9% 14.7% CET1 and TCR ratio TCR ▪ Called US$ 200 million hybrid Tier 1 bond in 17.0% 12.5% 15.9% 11.6% 11.5% April 2020 to reduce interest expense on 15
Slide 7: Milestones in Interbank’s capital markets history
Milestones in Interbank’s capital markets history Interbank issues $300 million in subordinated Tier 2 bonds in the international capital markets Interbank issues $200 Interbank issues $200 million in senior bonds million in hybrid Tier 1 in the international bonds in the capital markets, IFS execut
Slide 8: Intercorp Group: striving to make Peru the best place to raise a family in Latin America
Intercorp Group: striving to make Peru the best place to raise a family in Latin America Financial services Retail US$ 8.5bn Revenues in 2021 ~3.9% of Peru 2021 GDP Education Other (1) Source: Company information and BCRP. 7 1) Related companies excluding Aviva and Urbi.
Slide 9: Key messages
Key messages 8
Slide 10: Key messages
Key messages 1 Challenging macro scenario 2 Strong core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous focus on efficiency 6 Developments on sustainability
Slide 11: Challenging macro scenario
1 Challenging macro scenario Interest rates Inflation YoY USD/PEN (%) (%) Aug22 4.13 Soles reference rate (BCRP) 8.4 Dollar reference rate (FED) 8.8 Aug22 Sep22 3.84 6.75 5.50 6.4 3.83 2.50 Aug22 3.63 2.50 3.3 0.25 0.25 1.75 2.7 0.25 0.25 0.25 Jan21 Jun21 Dec21 Jun22 Jan21 Jun21 Dec21 Jun22 Jan21 Ju
Slide 12: Key messages
Key messages 1 Challenging macro scenario 2 Strong core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous focus on efficiency 6 Developments on sustainability
Slide 13: Banking activity still strong
2 Banking activity still strong +65% YoY +50% YoY +45% YoY 3.5 3.8 89 86 8,170 8,793 2.3 58 6,053 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Credit cards & personal loans balances Credit cards turnover (S/ bn) Credit cards sales (th units) (S/ mn) +38% YoY +44% YoY +72% YoY 2.1 2.1 884 784 301 1.5
Slide 14: Double-digit growth in NII and fees
2 Double-digit growth in NII and fees % YoY +21% +16% -23% +14% +21 +136 -28 1,044 914 2Q21 Net interest and Fee income from Other income 2Q22 similar income financial services, net Banking – Revenue bridge from 2Q21 to 2Q22 (S/ mn) 13
Slide 15: Shift in loan mix and repricing of new loan disbursements boosts NIM
Shift in loan mix and repricing of new 2 loan disbursements boosts NIM Reactiva Commercial Mortgages Payroll deduction loans Yield on loans NIM Credit cards & personal loans 8% 8.9% 15% 7.9% 8.1% 7.4% 7.6% 40% 39% 4.7% 4.4% 20% 4.1% 20% 3.7% 3.8% 46% 11% 52% 11% Retail Retail 21% 15% 2Q21 2Q22 2Q21
Slide 16: Rising funding costs with best LDR among peers
Rising funding costs with best LDR 2 among peers Jun19 Jun21 Jun22 Cost of funds Cost of deposits Interbank 102% 93% 101% 2.1% Bank 1 107% 95% 104% 1.6% 1.3% 1.3% 1.4% 1.5% Bank 2 106% 110% 114% 1.1% 0.8% 0.6% 0.6% Ref. rate YoY Bank 3 111% 114% 129% +525 bps (S/) +150 bps (US$) System 106% System 1
Slide 17: Key messages
Key messages 1 Challenging macro scenario 2 Strong core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous focus on efficiency 6 Developments on sustainability
Slide 18: Solid risk management capabilities
3 Solid risk management capabilities Better asset quality than the system despite focus on Best total PDL ratio among peers (%) retail – PDL ratio evolution (%) Interbank System Commercial loans Retail loans Total loans 3.8% 3.8% 3.6% 3.8% BBVA BBVA 4.7% 2.7% 4.0% 3.0% BCP BCP 4.5% 2.6% 4.0% 3.4% 3.
Slide 19: Manageable dollarization levels
3 Manageable dollarization levels Gross Loans by segment & percentage in S/ Currency mix Jun22 93% 94% 94% 94% 95% 89% 92% 92% Gross Loans Total Assets 85% 78% 76% 76% USD 73% 74% 73% 74% USD 71% 24% 31% 63% 64% 58% 56% 52% 52% 52% 51% 49% 41% S/ S/ 76% 69% 2014 2015 2016 2017 2018 2019 2020 2021 Ju
Slide 20: Key messages
Key messages 1 Challenging macro scenario 2 Strong core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous focus on efficiency 6 Developments on sustainability
Slide 21: Positive development in all digital indicators
Positive development in all digital indicators 4 68% 56% 67% 65% 43% 48% 61% 63% 58% Jun21 Mar22 Jun22 Jun21 Mar22 Jun22 Jun21 Mar22 Jun22 Digital customers Digital acquisition Digital sales (% of digital customers) (% of monthly retail customers “born digitally” ) (% of products sold digitally) 66%
Slide 22: More than 8 million users in Plin and 2 million in Tunki
More than 8 million users in Plin and 2 million in Tunki 4 +88% YoY +2x YoY +3x YoY Aug22 7.5 8.3 779 10.9 6.6 672 8.5 4.0 351 3.4 Jun21 Mar22 Jun22 Jun21 Mar22 Jun22 Jun21 Mar22 Jun22 Users (mn) Merchants (th) Transactions (units in mn) +56% YoY +3x YoY +4x YoY Aug22 2.0 2.2 425 2.2 1.8 368 1.3 1.5
Slide 23: ~20% growth in customer base, reaching 5 million
~20% growth in customer base, reaching 5 million 4 +18% YoY +28% YoY +19% YoY 4.7 4.9 1.8 1.9 138 132 4.1 1.5 116 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Banking – retail customers (mn) Banking – digital customers (mn) Banking – commercial customers (th) 22
Slide 24: Key messages
Key messages 1 Challenging macro scenario 2 Strong core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous focus on efficiency 6 Developments on sustainability
Slide 25: Continuous focus on efficiency
Continuous focus on efficiency 5 Variable expenses drive costs higher – Total expenses(2) Optimizing our distribution channels (Units) (S/ mn) 2019 Jul22 % Change Financial stores 255 171 -33% 1,696 1,570 1,491 ATMs 1,598 1,562 -2% 800 899 Correspondent 4,183 5,789 +38% agents(1) Sales force 588 594
Slide 26: Key messages
Key messages 1 Challenging macro scenario 2 Strong core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous focus on efficiency 6 Developments on sustainability
Slide 27: Developments on sustainability
Developments on sustainability 6 Environmental Social Governance Focus • Eco-efficiency • Inclusion of our people • Corporate Governance • ESG finances • Financial Inclusion • Cybersecurity Areas • Climate risk • International Standards #3 Interbank +600k sessions Latest #1 Interbank +490k users 4.8
Slide 28: Increasingly involved in green & sustainable financing
Increasingly involved in green & sustainable financing 6 160(US$ mn) 60 (US$ mn) 20 (US$ mn) Syndicated Green medium Syndicated sustainability loan term loan sustainability loan (Lead arranger) (Structurer) (Structurer) We help our customers grow their businesses in a sustainable way 27
Slide 29: Our way of working will enable us to achieve our goals
Our way of working will enable us to achieve our goals 6 Great Place to Work Our strategic values Top 20 in Peru for the past 20 years #3 in Latin America in 2022 Integrity Courage #1 in Peru in 2022 #13 for women in Peru in 2022 Innovation Collaboration #2 for millennials in Peru in 2022 #1 for wor
Slide 30: Strong corporate governance
Strong corporate governance 6 Board of directors BOD with majority of Carlos Rodríguez-Pastor independent members Chairman Interbank: 5 out of 9 Ramón Barúa Fernando Zavala Director Director Strong corporate governance Felipe Morris Cayetana Aljovín Director Independent Director Relevant committees:
Slide 31: Appendix
Appendix 30
Slide 32: Strategic focus on consumer loans
Strategic focus on consumer loans Distinctive loan breakdown… …when compared to the banking system Banking System Commercial Commercial 48% Mortgages 66% Consumer Mortgages Consumer 39% loans Retail 48% loans Retail 61% 34% 52% 52% S/ 43.9BN S/ 22.9BN S/ 359.3BN S/ 122.7BN Leading position in consum
Slide 33: Loan growth driven by positive consumer dynamics
Loan growth driven by positive consumer dynamics Performing loans (S/ mn) Breakdown of loans (S/ mn) %chg %chg +4% QoQ | +5% YoY 2Q21 1Q22 2Q22 QoQ YoY Consumer loans Credit cards & other loans 6,052.5 8,169.8 8,793.0 7.6% 45.3% 42,404 Payroll deduction loans(2) 4,534.9 4,545.3 4,552.2 0.2% 0.4% 40,
Slide 34: Diversified funding base with strength in retail deposits
Diversified funding base with strength in retail deposits Significant deposits base A growing retail deposit-gathering franchise MS 2016 12.8% MS Jun22 14.5% Other 6% Bonds Demand Savings 14.3% 11% 26% 47% 10.9% Deposits Due to banks 76% 13% 3.5% 3.6% Time 21% CAGR 2016-21 2Q22 YoY Interbank System
Slide 35: Deposits represent 76% of funding
Deposits represent 76% of funding Funding breakdown (S/ mn) Funding structure (S/ mn) %chg %chg LDR(2) 93% 99% 101% 2Q21 1Q22 2Q22 QoQ YoY Deposits 45,225.0 42,905.2 43,600.4 1.6% -3.6% System’s 100% 106% 108% Retail 20,967.0 22,190.3 21,686.3 -2.3% 3.4% LDR(2) Commercial(1) 24,258.1 20,714.9 21,914
Slide 36: Reactiva loan balances down 42% YoY, representing 9% of total portfolio
Reactiva loan balances down 42% YoY, representing 9% of total portfolio Reactiva Peru loan balances by segment (S/ bn) 2Q22 Segment YoY 6.1 0.5 Corporate -56% 4.2 Mid-sized -36% 0.3 3.5 3.5 0.2 2.4 SME -33% 2.2 2.1 Total -42% 1.5 1.2 2Q21 1Q22 2Q22 35 SME Mid-sized Corporate
Slide 37: Rescheduled loans decreased 57%
Rescheduled loans decreased 57% Banking – Rescheduled loans (S/ bn) Clients 343 459 237 8.6 (Thousand) 6.9 Rescheduled 30% 31% 13% 4.1 Retail balance (%) 12.7 Apr20 Jun20 Jun22 10.9 Commercial Total 5.5 4.0 4.1 1.4 Apr20 Jun20 Jun22 Apr20 Jun20 Jun22 36
Slide 38: Manageable dollarization levels
Manageable dollarization levels Total loans Retail loans Commercial loans % PEN 68% 73% 87% 92% 57% 63% System 8% 5% 26% 24% 47% 44% 92% 95% 74% 76% 53% 56% 2Q17 2Q22 2Q17 2Q22 2Q17 2Q22 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Micro 94% 96% 79% 9
Slide 39: Overview of Peruvian banking system
Overview of Peruvian banking system Profitability recovering after COVID-19 pandemic – Banking Steady loan growth – Banking system gross loans (S/ bn) system net profit (S/ mn) ROE 18.5% 4.0% 13.3% 9.5% 17.8% CAGR +10.6% CAGR 359 2019-21 326 350 340 9,082 286 7,218 14.8% 222 238 234 237 5,043 181 2,
Slide 40: Interbank’s income statement
Interbank’s income statement % chg % chg % chg % chg Incom e S t a t e m e nt ( S / m m ) 2019 2020 2021 1H21 1H22 '19 / '18 '20/ '19 '21/ '20 1H22/ 1H21 Interest income 4,094.8 3,865.1 3,510.8 1,686.8 2,090.0 14.1% (5.6%) (9.2%) 23.9% Interest expenses (1,231.0) (983.9) (811.0) (391.0) (536.4) 18.3
Slide 41: Interbank’s balance sheet
Interbank’s balance sheet % chg % chg % chg % chg Fina ncia l S t a t e m e nt s 2019 2020 2021 1H21 1H22 '19 / '18 '20/ '19 '21/ '20 1H22/ 1H21 As s e t s Cash and due from banks 9,861.5 17,716.8 14,413.6 16,680.4 10,663.9 20.1% 79.7% (18.6%) (36.1%) (1) Investments, net 5,559.4 8,951.2 10,047.1 9,
Slide 42: Definitions
Definitions Concept Definition Total revenues Gross financial margin + fee income from financial services, net + gain on financial transactions Efficiency ratio (Administrative expenses + Depreciation + amortization) / (total revenues) NIM (Annualized gross financial margin) / (Average interest-earn
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