Slide 1: Earnings Presentation 2Q22 Results
Earnings Presentation 2Q22 Results
Slide 2: Important disclosure
Important disclosure Acquisition of Procesos de Medios de Pago S.A. and Subsidiary (Izipay) In April 2022, IFS acquired 50 percent of the capital stock of Procesos de Medios de Pago S.A. and its subsidiary Izipay S.A.C. (henceforth “Izipay Group”, “Izipay” or "acquired entities"). The amount paid fo
Slide 3: Financial highlights, Key messages, Results by segment
1 Financial highlights 2 Key messages 3 Results by segment
Slide 4: Strong results in banking, insurance and payments. Negative impact in WM
Strong results in banking, insurance and payments. Negative impact in WM… IFS net profit (S/ mn) ROE 20.0% 17.4% 11.1% ROE 17.3% 19.1% 19.4% 43.2% 15.7% 31.6% 456 274 322 321 109 Insurance Banking(1) 77 403 39 -147 Other income in WM 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 251 0% QoQ | +17% YoY +99% QoQ | -29
Slide 5: … affecting IFS' 1H22 profitability
… affecting IFS’ 1H22 profitability IFS net profit (S/ mn) ROE 21.7% 14.2% ROE 18.8% 19.1% 50.0% 24.6% 984 594 644 246 Insurance Banking(1) -171 (1H22) 116 +100 (1H21) Other income in WM 655 1H21 1H22 1H21 1H22 +8% YoY -53% YoY ROE 30.9% n.m. 27.0% 30.9% management -171 (1H22) 28 Payments(2) 177 +10
Slide 6: Highlights
Highlights IFS Strong quarter in core banking activity Banking • Banking activity still strong, double-digit growth in NII and fees • Shift in loan mix and repricing of new loan disbursements boosts NIM, up to 4.9% • Increasing levels of CoR in line with shift in loan mix, up to 1.8% • ~20% growth i
Slide 7: IFS key indicators 2Q22
IFS key indicators 2Q22 20.0% 17.4% 17.5%(1) 1.7% 1.4% 1.8% 11.1% ROE CoR 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Banking 2.0% 1.8% 1.9%(1) 16.5% 15.5% 15.2% 1.2% ROA TCR 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 4.0% 4.5% 5.0% 7.7% 7.7% Insurance 5.1% IFS NIM ROIP 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 management 32.4% 37.2% 40.
Slide 8: IFS key indicators 1H22
IFS key indicators 1H22 21.7% 2.4% 14.2% 17.3%(1) 1.6% ROE CoR 1H21 1H22 1H21 1H22 Banking 2.2% 16.5% 15.2% 1.5% 1.8%(1) ROA TCR 1H21 1H22 1H21 1H22 3.9% 4.7% 9.1% Insurance 6.4% IFS NIM ROIP 1H21 1H22 1H21 1H22 management 31.2% 38.7% 36.9%(1) 22.6 21.4 Wealth C/I ratio AUM (S/ bn) 1H21 1H22 1H21 1H
Slide 9: Sustained revenues with important NIM expansion
Sustained revenues with important NIM expansion IFS revenues (S/ mn) NIM 4.0% 4.5% 5.0% -147 430 1,515 965 1,042 1,095 396 Insurance Other income 331 Banking in WM 1,470 1,430 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 +5% QoQ | +13% YoY +20% QoQ | -8% YoY management -147 131 80 81 Payments(1) Other income 60 We
Slide 10: Stable C/I ratio in banking, IFS' C/I ratio impacted by wealth management
Stable C/I ratio in banking, IFS’ C/I ratio impacted by wealth management IFS expenses (S/ mn) 36.6%(1) C/I 32.4% 37.2% 40.2% C/I 42.5% 41.7% 42.3% (2) 662 420 455 481 635 Banking 569 (2) +6% QoQ +15% YoY 2Q21 1Q22 2Q22 YoY +17% +14 % +24% +9% +14% Banking’ bridge +29 +41 +21 +24 938 824 2Q21 1Q22 2
Slide 11: Solid capitalization levels
Solid capitalization levels Banking System 15.4% 15.1% 14.7% 160.8% 152.2% 131.1% TCR Insurance 100.0% Reg. min. Considering dividends distributed in 16.5% Mar22 2Q21 1Q22 2Q22 15.5% 15.2% 11.5% 10.9% 11.1% Solvency ratio Banking 9.0% Reg. 26.3% management min. 22.6% 19.4% Wealth 8.0% Reg. min. 2Q21
Slide 12: Financial highlights, Key messages, Results by segment
1 Financial highlights 2 Key messages 3 Results by segment
Slide 13: Key messages
Key messages Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 14: Challenging macro scenario
1 Challenging macro scenario Interest rates Inflation YoY USD/PEN (%) (%) Jul22 4.13 Soles reference rate (BCRP) 8.7 Dollar reference rate (FED) 8.8 Jul22 Aug22 3.90 6.50 5.50 6.4 3.83 2.50 Jul22 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 15: Key messages
Key messages Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 16: Investments results recovering in insurance…
Investments results recovering in 2 insurance… Insurance – ROIP (%) Results from investments (S/ mn) 7.7% 7.7% 254 240 5.1% 166 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 +260 bps QoQ | 0 bps YoY +45% QoQ | -5% YoY 15
Slide 17: … but still impacted in wealth mgmt
2 … but still impacted in wealth mgmt Wealth mgmt – ROIP(1) (%) Other income (S/ mn) S&P 500 +28.8% -41.2% Index(1) 14.7% 100 100 -12.5% -171 1H21 1H22 1H21 1H22 n.m. YoY n.m. YoY 16 1) Annualized returns
Slide 18: Key messages
Key messages Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 19: Banking activity still strong
Banking activity still strong 3 +65% YoY +50% YoY +46% YoY 3.5 3.8 89 86 8,146 8,774 2.3 58 5,992 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 20: Double-digit growth in banking NII and fees
Double-digit growth in banking NII 3 and fees % YoY +18% +17% -14% +13% +27 +120 -18 1,095 965 2Q21 Net interest and Fee income from Other income 2Q22 similar income financial services, net Banking – Revenue bridge from 2Q21 to 2Q22 (S/ mn) 19
Slide 21: Shift in loan mix and repricing of new loan disbursements boosts NIM
Shift in loan mix and repricing of new 3 loan disbursements boosts NIM Reactiva Commercial Mortgages Payroll deduction loans Yield on loans NIM Risk-adjusted NIM Credit cards & personal loans 8% 9.1% 15% 8.3% 8.3% 7.7% 7.9% 40% 39% 4.9% 4.4% 4.5% 20% 3.9% 4.0% 20% 46% 11% 52% 3.6% 3.7% 11% Retail 3.
Slide 22: Rising funding costs with best LDR among peers
Rising funding costs with best LDR 3 among peers Jun19 Jun21 Jun22 Cost of funds Cost of deposits Interbank 102% 93% 101% 2.2% Bank 1 107% 95% 104% 1.8% 1.5% 1.6% 1.4% 1.7% Bank 2 106% 110% 114% 1.2% 0.8% 0.9% 0.7% Ref. rate YoY Bank 3 111% 114% 129% +525 bps (S/) +150 bps (US$) System 106% System 1
Slide 23: Increasing levels of CoR in line with shift in loan mix
Increasing levels of CoR in line with 3 shift in loan mix NPL coverage 210% 169% 186% FY19: 158% FY19: 10.0% (1) ratio (S2+S3) ratio S3 NPL ratio 1.7% 1.8% FY19: 2.2% 12.8% FY19: 2.5% 1.4% 10.2% 10.8% 2.9% 2.9% 2.6% 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Banking – Cost of risk Banking – Non perfoming loans N
Slide 24: Key messages
Key messages Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 25: Positive development in all banking digital indicators…
Positive development in all banking 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 digit
Slide 26: … as well as in insurance
… as well as in insurance 4 80% 81% 80% 33% 34% 22% 2Q21 1Q21 2Q22 2Q21 1Q22 2Q22 SOAT digital sales Vida cash life premiums (% of products sold digitally) (% of total life premiums)
Slide 27: ~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) 26
Slide 28: Key messages
Key messages Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 29: Our payments business
Our payments business 5 1 Izipay, fast growing and profitable business Banking Insurance 2 Carlos Tori appointed as EVP of Payments at IFS, formerly EVP of Retail Banking Wealth management Payments 3 New business segment, focused on creating the largest payments ecosystem 28
Slide 30: Izipay, pillar for building our payments ecosystem
Izipay, pillar for building our payments ecosystem 5 Our business lines and main clients Payments Correspondent Credit cards acquirer banking processor 89% 7% 4% Fee income share 1H22 Fee income share 1H22 Fee income share 1H22 29
Slide 31: Strong growth in number of merchants and transactional volumes
Strong growth in number of merchants and transactional volumes 5 799 693 521 +53% YoY +33% YoY 2Q21 1Q22 2Q22 80 81 Merchants (th) 60 E-commerce 12% 15% 16% (%) 10.9 12.0 +66% YoY 7.2 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Transactions in payments acquirer (S/ bn) Revenues(1) (S/ mn) 30 1) Proforma for 2Q21
Slide 32: ~8 million users in Plin and 2 million in Tunki
~8 million users in Plin and 2 million in Tunki 5 +88% YoY +2x YoY +3x YoY Jul22 7.5 7.9 779 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 Jul22 2.0 2.1 425 2.2 1.8 368 1.3 1.5 138 0.5
Slide 33: Key messages
Key messages Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 34: 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 #17 Inteligo Bank #37 Inteligo Group #49 Intersegu
Slide 35: Takeaways
Takeaways Investments results 1 Challenging macro scenario 2 recovering in insurance but still impacted in wealth management 3 Strong quarter in core banking activity 4 Positive development in digital indicators 5 Our payments business 6 Developments on sustainability
Slide 36: Operating trends 1H22
Operating trends 1H22 Capital Profitability Loan growth 2022 1H22 2022 1H22 High single digit growth in IBK TCR >15% 15.2% total loans led by double IFS ROE >16% 14.2% digit growth in consumer loans(1) IBK CET1 >11% 11.1% 2Q22 growth YoY To remain at sound levels Continued path to recovery Total loa
Slide 37: Financial highlights, Key messages, Results by segment
1 Financial highlights 2 Key messages 3 Results by segment
Slide 38: Loan growth driven by positive consumer dynamics
Loan growth driven by positive Banking 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 5,992.0 8,145.5 8,774.4 7.7% 46.4% 42,386 Payroll deduction loans (2) 4,534.9 4,545.3 4,552.2 0.2%
Slide 39: Deposits represent 76% of funding
Banking 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 System’s Deposits 45,209.3 42,885.9 43,576.8 1.6% -3.6% 100% 106% 108% Retail 20,967.0 22,190.3 21,686.3 -2.3% 3.4% LDR(2) Commercial(1) 24,242.3 20,695.
Slide 40: Main financial indicators
Banking Main financial indicators NIM 3.9% 4.5% 4.9% CoR 1.7% 1.4% 1.8% 748 791 178 193 670 152 +6% QoQ +28% QoQ +18% YoY +9% YoY 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Net interest and similar income (S/ mn) Loan provision expense (S/ mn) % 21% 28% 28% C/I 42.5% 41.7% 42.3% Revenues 295 294 304 455 481 420
Slide 41: Contraction in annuities business during the quarter
Contraction in annuities business Insurance during the quarter Gross premiums plus collections – Quarterly evolution (S/ mn) Annuities market 31% 32% 27% share(1) %chg YoY -14% QoQ +1% YoY 328 +36% 280 73 283 55 75 +23% 51 43 51 53 66 -30% 46 153 116 109 -6% 2Q21 1Q22 2Q22 Annuities Private annuitie
Slide 42: Gains on investments drive ROIP to 7.7% in 2Q22
Gains on investments drive ROIP to Insurance 7.7% in 2Q22 Investment portfolio (S/ mn) Results from investments (S/ mn)(1) ROIP 7.7% 5.1% 7.7% 13,128 12,707 12,162 1,227 1,200 254 1,225 1,007 1,280 240 863 166 10,677 10,499 10,019 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Fixed Income Equity and Mutual Funds Re
Slide 43: Slight quarterly growth in AUM and loans
Slight quarterly growth in AUM Wealth management and loans AUM (S/ mn) Deposits (S/ mn) Loans (S/ mn) 22,558 4,596 1,720 1,769 21,307 21,424 1,658 3,835 3,943 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 +1% QoQ | -5% YoY +3% QoQ | -14% YoY +7% QoQ | +3% YoY 42
Slide 44: Investment income still impacted by market trends
Investment income still impacted by Wealth management market trends Fees / Avg. 0.9% 0.7% 0.8% AUM(1) 30 49 26 24 41 45 -8% QoQ +9% QoQ -19% YoY -9% YoY 2Q21 1Q22 2Q22 2Q21 1Q22 2Q22 Net interest and similar income (S/ mn) Fees from financial services (S/ mn) 52 131 43 -24 n.m. QoQ n.m. QoQ -147 n.m
Slide 45: Appendix
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Slide 46: bps growth in IFS' 1H22 NIM
80 bps growth in IFS’ 1H22 NIM IFS revenues (S/ mn) NIM 3.9% 4.7% -171 3,061 Other income 1,957 2,137 855 Insurance 727 Banking in WM 2,901 1H21 1H22 1H21 1H22 +9% YoY -15%YoY management 256 161 Payments(1) -171 113 Wealth Other income -36 1H21 1H22 1H21 1H22 1H21 1H22 -5% YoY n.m. YoY +42% YoY 45 1
Slide 47: 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 46 SME Mid-sized Corporate
Slide 48: 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 47
Slide 49: 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 50: IFS' 2Q22 statement of financial position
IFS’ 2Q22 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Assets Cash and due from banks and inter-bank 19,410.4 13,690.8 12,504.0 -8.7% -35.6% funds Financial investments 24,278.1 24,306.7 23,594.4 -2.9% -2.8%
Slide 51: IFS' 2Q22 P&L
IFS’ 2Q22 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Interest and similar income 1,112.3 1,248.1 1,392.1 11.5% 25.1% Interest and similar expenses -244.9 -303.4 -360.3 18.8% 47.2% Net interest and similar income 867.5 944.7 1,031.8 9.2% 18.9% Impairme
Slide 52: Banking segment's 2Q22 statement of financial position
Banking segment’s 2Q22 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Assets Cash and due from banks and inter-bank 16,686.2 11,518.4 10,676.2 -7.3% -36.0% funds Financial investments 9,733.9 10,549.3 10,525.3 -0.2% 8.1% L
Slide 53: Banking segment's 2Q22 P&L
Banking segment’s 2Q22 P&L Banking Segment's P&L statement S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Interest and similar income 881.3 1,010.0 1,107.4 9.6% 25.7% Interest and similar expenses -211.2 -261.9 -316.9 21.0% 50.0% Net interest and similar income 670.1 748.0 790.5 5.7% 18.0% Impairment l
Slide 54: Insurance segment's 2Q22 statement of financial position
Insurance segment’s 2Q22 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Assets Cash and due from banks and inter-bank 555.8 643.2 538.8 -16.2% -3.0% funds Financial investments 11,901.6 11,506.7 10,882.4 -5.4% -8.6% Prop
Slide 55: Insurance segment's 2Q22 P&L
Insurance segment’s 2Q22 P&L Insurance Segment's P&L statement S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Interest and similar income 190.3 202.6 249.9 23.3% 31.3% Interest and similar expenses -22.6 -30.7 -31.6 2.8% 39.5% Net interest and similar income 167.7 171.9 218.3 27.0% 30.2% Recovery (loss
Slide 56: Wealth management segment's 2Q22 statement of financial position
Wealth management segment’s 2Q22 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Assets Cash and due from banks and inter-bank 2,212.2 1,413.5 1,210.8 -14.3% -45.3% funds Financial investments 2,016.8 2,010.3 1,95
Slide 57: Wealth management segment's 2Q22 P&L
Wealth management segment’s 2Q22 P&L Wealth Management Segment's P&L statement S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Interest and similar income 39.3 35.3 34.6 -1.8% -11.8% Interest and similar expenses -9.5 -9.3 -10.6 14.2% 11.3% Net interest and similar income 29.7 26.0 24.0 -7.6% -19.2% Imp
Slide 58: Payments segment's 2Q22 statement of financial position
Payments segment’s 2Q22 statement of financial position Payments Segment' Statement of financial position ( 1) S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Assets Cash and due from banks and inter-bank 115.0 119.4 185.5 55.4% 61.4% funds Financial investments - - - - - Loans, net of unearned interest
Slide 59: Payments segment's 2Q22 P&L
Payments segment’s 2Q22 P&L Payments Segment's P&L statement ( 1) S/ million %chg %chg 2Q21 1Q22 2Q22 QoQ YoY Interest and similar income 0.0 0.0 0.2 n.m. n.m. Interest and similar expenses -0.6 -0.5 -0.5 -5.8% -23.7% Net interest and similar income -0.6 -0.5 -0.3 -47.0% -59.5% Impairment loss of lo
Slide 60: Definitions
Definitions Concept Definition Net interest and similar income + Fee income from financial services + Other income + Net Total revenues premiums earned (Salaries and employee benefits + Administrative expenses + Depreciation and amortization) Efficiency ratio / (Net interest and similar income + Fee
Slide 61: 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 IFS’ busin
Slide 62: Intercorp Financial Services
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