Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q2 2024 Earnings Presentation
52 slides from Intercorp Financial Services's earnings presentation, Aug 15, 2024
Slide 1: Earnings Presentation 2Q24 results
Earnings Presentation 2Q24 results
Slide 2: Economic indicators show signs of recovery
Economic indicators show signs of recovery Quarterly GDP growth YoY (%) Interest rates (%) Soles reference rate (BCRP) Dollar reference rate (FED) 5.2% 2024(E) 7.75 7.50 Ago24 3.1% 5.50% 6.75 1.4% 6.00 5.75 5.25 5.50 5.50 5.50 5.50 -0.5% -0.3% -1.0% (1) 2Q23 3Q23 4Q23 1Q24 2Q24 Jun23 Sep23 Dec23 Mar
Slide 3: Improvement in leading indicators
Improvement in leading indicators Consumer confidence index & business trust (%) FY24 public investment growth estimate Consumer confidence index Business trust 12.0% 59 59 52 55 51 44 Jul24 39 39 40 4.0% 35 44 Jun23 Sep23 Dec23 Mar24 Jun24 Jun23 Jun24 Monthly domestic demand YoY (%) FY24 private in
Slide 4: Strategic focus on key businesses and profitability
Strategic focus on key businesses and profitability Growth Digital Focus Leading digital platform with Creating the best Boosting core profitable growth digital experience businesses +2x -70pbs 81% 13.6% 21.8% MS total MS consumer QoQ QoQ Digital banking deposits loans net income cost of risk custom
Slide 5: Sustainable growth
1 2 Building a Sustainable digital platform growth 3 Key businesses 4 Takeaways
Slide 6: Sustainable growth
1 2 Building a Sustainable digital platform growth 3 Key businesses 4 Takeaways
Slide 7: Key messages
Key messages 1 2 3 Improving banking and Lower CoR translates Continuous improvement insurance results drive into better results for IBK in cost of funds earnings recovery S/ 286mn -70bps -40pbs QoQ CoF Net profit IFS QoQ CoR 4 Significant growth in commercial banking 5 Double digit growth in insura
Slide 8: IFS' 2Q24 earnings recover
IFS’ 2Q24 earnings recover IFS quarterly net profit (S/ mn) ROE 14.8% 7.1% 11.1% 274 221 Banking(2) 140 +58% QoQ -20% YoY ROE 14.3% 5.6% 11.2% 2Q23 1Q24 2Q24 331 ROE 130.5% n.m. 58.5% 286 88 79 Insurance +4.0x QoQ -11% YoY -20 141 2Q23 1Q24 2Q24 ROE 9.7% 11.2% 2.7% management Wealth 26 22 -76% QoQ 2
Slide 9: 2% YoY growth in revenues at IFS
2% YoY growth in revenues at IFS IFS quarterly revenues (S/ mn) NIM IBK 5.6% 5.3% 5.2% 1,287 1,209 1,249 NIM 5.2% 5.1% IFS 5.5% Banking +3% QoQ -3% YoY 2Q23 1Q24 2Q24 1,721 1,733 1,758 362 384 400 Insurance +4% QoQ +10% YoY 2Q23 1Q24 2Q24 management 67 Wealth 57 47 -29% QoQ -17% YoY 2Q23 1Q24 2Q24 2
Slide 10: 70 bps decline in QoQ CoR
70 bps decline in QoQ CoR Banking Retail Commercial 7.9% Credit cards & 7.2% personal loans 6.0% 24% 19% Payroll deductible 4.7% 4.0% 44% 47% loans 3.6% 13% 11% Mortgages 0.6% 21% 21% 0.6% Commercial 0.1% 2Q23 1Q24 2Q24 2Q23 2Q24 Cost of risk (%) Banking – Performing loans breakdown 258% 3.4% 173% 1
Slide 11: Improved payment behavior in consumer loans
Improved payment behavior in consumer loans Non-rescheduled Rescheduled (S/ mn) 11,100 10,660 10,076 9,559 (2) Payment of rescheduled loans Collected Not paid 14% 20% 20% 19% 84.2% 89.5% 15.8% 10.5% Mar24 Jun24 Mar24 Jun24 (2) 86% 80% 80% 81% Payment of non-rescheduled loans Collected Not paid 98.1%
Slide 12: Continuous tight management of opex
Continuous tight management of opex IFS expenses (S/ mn) Banking expenses (S/ mn) C/I 37.2% 37.3% 38.6% C/I 37.3% 38.7% 39.7% 719 498 515 690 690 488 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 +4% QoQ | +4% YoY +6% QoQ | +3% YoY 12
Slide 13: Building a digital platform
1 2 Building a Sustainable digital platform growth 3 Key businesses 4 Takeaways
Slide 14: IFS digital platform
IFS digital platform IzipayYa Izipay Digital bank Investments Insurance Cuenta Sueldo Marketplace Loyalty & promotions Digital My financing Piggy Payments finances bank 100% digital account
Slide 15: Growing digital customer base
Growing digital customer base 68% 81% 64% 75% Jun23 Jun24 Jun23 Jun24 Digital sales - Retail Digital customers - Retail (% of products sold digitally) (% of digital customers – Retail banking) 76% 77% 63 61 Jun23 Jun24 Jun23 Jun24 Digital self-service NPS Retail (Points – Retail Banking) (% of digit
Slide 16: Growth in Plin transactions increases customer engagement
Growth in Plin transactions increases customer engagement IBK Share 44% 44% 44% (%) 9.5 +27% 7.4 9.0 YoY 105.1 +2.8x YoY 83.4 Jun23 Mar24 Jun24 Users (mn) (1) IBK Share 38% 42% 43% (%) 37.5 11.9 14.1 +2.2x YoY 6.5 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 IBK Transactions (mn) Volume (S/ bn) 16 (1) Change in me
Slide 17: Digitalization in insurance & wealth management
Digitalization in insurance & wealth management 66% 82% 77% 54% 13% Insurance 12% 2Q23 2Q24 2Q23 2Q24 2Q23 2Q24 Digital self-service SOAT digital sales Digital premiums – Vida cash (% of digital self-service) (% of products sold digitally) (% of total premiums Vida cash) 50% 43% 23% 18% WM 2Q23 2Q24
Slide 18: Key businesses
1 2 Building a Sustainable digital platform growth 3 Key businesses 4 Takeaways
Slide 19: Double digit YoY growth in lower-risk products & segments
Double digit YoY growth in lower-risk Banking products & segments 729 492 7.0 6.5 6.9 673 590 429 438 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Payroll deductible loans disbursements (S/ mn) Mortgage disbursements (S/ mn) Credit & debit cards purchases (S/ bn) +24% YoY | +8% QoQ +15% YoY | +12% Q
Slide 20: Loan book boosted by Impulso MyPeru
Banking Loan book boosted by Impulso MyPeru SME Mid-sized +1,400 +S/ 11,600 mm 50%-98% 24 auctions guarantee 65% levels +500 66% 35% < 13% 6 months 34% Average Grace period 1Q24 2Q24 auction rate Impulso MyPeru disbursements (S/ mn) 20 Source: COFIDE from January 2024 to June 30th, 2024
Slide 21: 50 bps increase in QoQ risk-adjusted NIM
Banking 50 bps increase in QoQ risk-adjusted NIM % of unsecured 24% 21% 19% NIM Risk-adjusted NIM loans retail(1) Retail loans Commercial loans Yield on loans Return on interest-earning assets Financial investments Cash and banks 65,895 68,572 68,268 15% 18% 14% 11.5% 11.6% 11.3% 10.8% 10.6% 19% 9.1
Slide 22: 40 bps decrease QoQ in cost of funds
Banking 40 bps decrease QoQ in cost of funds LDR(1) 101% 97% 99% Ref. rate YoY - 200bps (S/) System’s +25bps (US$) LDR(1) 105% 97% 98% +4.7% 4.2% 4.2% YoY 59,075 61,460 61,511 7% 7% 4.0% 4.0% 7% 15% 14% 15% 3.6% 3.8% 3.8% 38% 38% -40bps 38% 3.6% QoQ 3.4% 3.2% 40% 40% 41% 2Q23 1Q24 2Q24 2Q23 3Q23 4Q2
Slide 23: Continuous increase in float from Izipay
Banking Continuous increase in float from Izipay 4.9 5.3 Increased float in merchants’ 4.1 +27% IBK accounts YoY +40% YoY 2Q23 1Q24 2Q24 Cash flow coming to IBK accounts (S/ bn) 1.1 More float from 0.5 0.7 ~2.2x micro merchants YoY +17% YoY 2Q23 1Q24 2Q24 Volumes from micro merchants (S/ bn) 23
Slide 24: 25% YoY growth on premiums with diversified revenue generation
25% YoY growth on premiums with Insurance diversified revenue generation Annuities %chg %chg market 28.8% 28.0% 31.3% 29.0% QoQ YoY share(1) 333 +8% +25% 309 266 61 84 +38% +130% 37 212 90 87 -3% +11% 44 78 71 77 80 67 +4% +19% 34 57% 49% 61 84 82 82 - -2% (2) 2019 2Q23 1Q24 2Q24 Quarterly gross pre
Slide 25: Solid results in the insurance investment portfolio
Solid results in the insurance investment Insurance portfolio Insurance - ROIP (%) Insurance - Portfolio breakdown 6.4% 6.0% 9% 9% 6% 5% 85% 86% 2Q23 2Q24 2Q23 2Q24 Fixed Income Equity and Mutual Funds Real Estate 25
Slide 26: 15% YoY growth in AUM leads recovery of fee income in WM
Wealth 15% YoY growth in AUM leads recovery of management fee income in WM AUM (US$ mn) Diversified revenue generation (S/ mn) 42 6,462 6,817 +15.0% YoY 38 +22.0% YoY 5,930 +5.5% QoQ 35 +10.5% QoQ 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 Fee’s as % 0.7% 0.6% 0.7% of AuM 26
Slide 27: Takeaways
1 2 Building a Sustainable digital platform growth 3 Key businesses 4 Takeaways
Slide 28: Sustainability update
Sustainability update Enviromental First qualitative assessment of climate risk at Interbank in partnership with a third- party consultant Accumulated +US$200 mn in sustainable loans Established a strategic alliance with EnelX to enhance our green loan identification process Social + 1.0 mn peruvian
Slide 29: Operating trends 1H24
Operating trends 1H24 Capital Profitability Loan growth 2024 1H24 2024 2Q24 1H24 Guidance Guidance Mid single digit growth IBK TCR > 14% 15.0% in total loans (1) IFS ROE > 12% 11.2% 8.4% IBK CET1 ∼ 11% 11.2% To remain at sound levels Still below midterm range Real 2Q24= 4.5% (2) Revenues Cost of ris
Slide 30: Takeaways
Takeaways 1 2 3 Improving banking and Lower CoR translates Continuous improvement insurance results drive into better results for IBK in cost of funds earnings recovery 4 Significant growth in commercial banking 5 Double digit growth in insurance premiums 6 Strong increase in AuM in WM 30
Slide 31: Appendix
Appendix
Slide 32: IFS' 1H24 earnings
IFS’ 1H24 earnings 9.1% IFS net profit (S/ mn) ROE 14.1% 525 12.8% 8.4% 361 Banking(2) ROE -31% YoY 598 1H23 1H24 ROE 79.1% 23.3% 427 119 Insurance 59 -51% YoY 1H23 1H24 ROE 6.6% 6.9% management 29 32 Wealth 1H23 1H24 +10% YoY -29% YoY 1H23 1H24 32 1) 1Q24 earnings were impacted by a S/ 100 mn non-r
Slide 33: 2% YoY growth in revenues at IFS
2% YoY growth in revenues at IFS IFS revenues (S/ mn) NIM 5.4% 5.3% 2,480 2,457 NIM 5.3% 5.1% -1% YoY Banking 3,413 3,490 1H23 1H24 754 784 Insurance +4% YoY 1H23 1H24 114 management 103 Wealth +11% YoY 1H23 1H24 1H23 1H24 +2% YoY 33 1) Includes: S/-34 mn from investments
Slide 34: Customer base growth continues across businesses
Customer base growth continues across businesses +12% YoY +13% YoY +17% YoY 5.3 3.0 4.7 79 2.6 70 Jun23 Jun24 Jun23 Jun24 Jun23 Jun24 Banking – customers (mn) (1) Wealth management – customers (th) Insurance – customers (mn) 34 (1) New methodology
Slide 35: IFS key indicators 2Q24
IFS key indicators 2Q24 14.3% 11.2% 5.6% 5.3% 5.2% 5.6% ROE NIM 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 3.6% 4.7% 4.0% 1.5% 1.2% Banking 0.6% ROA CoR 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 IFS 5.5% 5.2% 5.1% 37.3% 38.7% 39.7% NIM C/I ratio 2Q23 1Q24 2Q24 2Q23 1Q24 2Q24 5.9 6.5 6.8 37.2% 37.3% 38.6% C/I ratio AUM manag
Slide 36: IFS key indicators 1H24
IFS key indicators 1H24 12.8% 5.4% 5.3% 8.4% ROE NIM 1H23 1H24 1H23 1H24 3.4% 4.4% 1.4% Banking 0.9% ROA CoR 1H23 1H24 1H23 1H24 IFS 5.3% 5.1% 38.2% 39.2% NIM C/I ratio 1H23 1H24 1H23 1H24 5.9 6.8 37.2% 38.0% C/I ratio AUM management (US$ bn) 1H23 1H24 1H23 1H24 Wealth Insurance 6.2% 74.2 80.7 ROIP
Slide 37: Contained banking NPLs despite growth in provisions
Contained banking NPLs despite growth in provisions, S2 reflects rescheduling (S2+S3) ratio & S3 NPL ratio (%) Impairment loss on loans, net (S/ mn) & Cost of risk (%) 6.0% 616 14.0% 1,291 549 12.7% 12.8% 5.0% 5.2% 474 4.0% 417 5.0% 4.7% 3.0% 4.0% 3.6% 2.7% 3.4% 3.2%2.0% 1.0% 0.0% 2Q23 1Q24 2Q24 2Q2
Slide 38: Sound capitalization levels
Sound capitalization levels Banking 136.3% 129.3% 127.2% System 16.2% 15.8% 15.8%(1) TCR Insurance 100.0% Reg. min. 11.4% 11.3% 11.2% 2Q23 1Q24 2Q24 15.2% 15.1% 15.0% Solvency ratio Banking 11.2% Reg. 6.5% management min. Reg. min. 16.7% 17.6% 16.6% Wealth 12.0% Reg. min. 2Q23 1Q24 2Q24 2Q23 1Q24 2Q
Slide 39: Focusing on low-risk loans & retail deposits
Focusing on low-risk loans & retail deposits Breakdown of loans (S/ mn) Funding structure (S/ mn) %chg %chg %chg %chg 2Q23 1Q24 2Q24 QoQ YoY 2Q23 1Q24 2Q24 QoQ YoY Consumer loans Credit cards & other loans 10,778.9 9,340.1 8,864.1 -5.1% -17.8% Deposits 45,623.2 48,090.4 48,472.9 0.8% 6.2% (1) Payrol
Slide 40: Reactiva loan balances down 63% YoY
Reactiva loan balances down 63% YoY, representing 1% of Interbank’s portfolio Reactiva Peru loan balances by segment (S/ bn) 2Q24 Segment YoY 1.2 Corporate -5% Corporate: n.m. Mid-sized -62% Mid-sized: S/ 0.3 bn 0.6 SME: S/ 0.1 bn 0.5 SME -67% Total -63% 2Q23 1Q24 2Q24 40 SME Mid-sized Corporate
Slide 41: Manageable dollarization levels at Interbank
Manageable dollarization levels at Interbank Total loans Retail loans Commercial loans % PEN 69% 72% 90% 93% 57% 58% System 7% 4% 26% 26% 50% 52% 93% 96% 74% 74% 50% 48% 2Q19 2Q24 2Q19 2Q24 2Q19 2Q24 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Micro
Slide 42: IFS' 2Q24 statement of financial position
IFS’ 2Q24 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 06.30.23 03.31.2024 06.30.24 06.30.24 06.30.24 03.31.2024 06.30.23 Assets Cash and due from banks and inter-bank 11,159.1 13,361.2 10,413.4 -22.1% -6.7% funds Financial invest
Slide 43: IFS' 2Q24 P&L
IFS’ 2Q24 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 2Q23 1Q24 2Q24 QoQ YoY Interest and similar income 1,808.3 1,800.2 1,737.1 -3.5% -3.9% Interest and similar expenses -645.1 -667.0 -623.3 -6.6% -3.4% Net interest and similar income 1,163.3 1,133.2 1,113.8 -1.7% -4.3% Imp
Slide 44: Banking segment's 2Q24 statement of financial position
Banking segment’s 2Q24 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 06.30.23 03.31.2024 06.30.24 06.30.24 06.30.24 03.31.2024 06.30.23 Assets Cash and due from banks and inter-bank 9,837.3 12,200.0 9,374.2 -23.2% -4.7% funds Financial investme
Slide 45: Banking segment's 2Q24 P&L
Banking segment’s 2Q24 P&L Banking Segment's P&L statement S/ million %chg %chg 2Q23 1Q24 2Q24 QoQ YoY Interest and similar income 1,544.5 1,510.4 1,484.4 -1.7% -3.9% Interest and similar expenses -592.0 -596.2 -559.4 -6.2% -5.5% Net interest and similar income 952.5 914.2 925.0 1.2% -2.9% Impairmen
Slide 46: Insurance segment's 2Q24 statement of financial position
Insurance segment’s 2Q24 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 06.30.23 03.31.2024 06.30.24 06.30.24 06.30.24 03.31.2024 06.30.23 Assets Cash and due from banks and inter-bank 418.3 539.4 403.5 -25.2% -3.5% funds Financial investments
Slide 47: Insurance segment's 2Q24 P&L
Insurance segment’s 2Q24 P&L Insurance Segment's P&L statement S/ million %chg %chg 2Q23 1Q24 2Q24 QoQ YoY Interest and similar income 214.1 238.8 205.9 -13.8% -3.8% Interest and similar expenses -30.3 -42.3 -36.4 -13.9% 20.1% Net interest and similar income 183.7 196.4 169.5 -13.7% -7.8% Recovery (
Slide 48: Wealth management segment's 2Q24 statement of financial position
Wealth management segment’s 2Q24 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 06.30.23 03.31.2024 06.30.24 06.30.24 06.30.24 03.31.2024 06.30.23 Assets Cash and due from banks and inter-bank 764.5 509.2 551.8 8.4% -27.8% funds Financ
Slide 49: Wealth management segment's 2Q24 P&L
Wealth management segment’s 2Q24 P&L Wealth Management Segment's P&L statement S/ million %chg %chg 2Q23 1Q24 2Q24 QoQ YoY Interest and similar income 47.6 48.0 44.3 -7.8% -6.9% Interest and similar expenses -21.9 -27.6 -27.2 -1.2% 24.1% Net interest and similar income 25.6 20.5 17.1 -16.6% -33.4% I
Slide 50: Definitions
Definitions Concept Definition Net interest and similar income + Net fee income from financial services + Other income Total revenues + Income from insurance results (Salaries and employee benefits + Administrative expenses + Depreciation and amortization) / (Net Efficiency ratio interest and simila
Slide 51: Safe Harbor for Forward-Looking Statements
Safe Harbor for Forward-Looking Statements This corporate presentation contains “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1955. Other than statements of historical or current facts, all statements included in this presentation regarding IFS’ b
Slide 52: Intercorp Financial Services
; EJ Intercorp Fina
Intercorp Financial Services Inc. Common Shares — Q2 2024 Earnings Presentation on 6ix