Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Investor Presentation (January 2023)
54 slides from Intercorp Financial Services's investor presentation, January 2023
Slide 1: Investor Presentation January 2023
Investor Presentation January 2023
Slide 2: Four key businesses
Universal bank Insurance company with strategic focus on focused on retail life & annuities Advisory firm for the Pillar for building our emerging payments wealthy ecosystem
Slide 3: Our transformation path to a digitally-driven organization
Our transformation path to a digitally- driven organization Prior to 2014 2015 - 2018 2019 - 2021 2022 onwards 1 2 3 4 Store-centric Omnichannel Digital Two-tier model platform first digital strategy focused on physical with strong focus with growth to foster profitable convenience on building digit
Slide 4: Building a leading digital financial platform
Building a leading digital financial platform Financial highlights Four key businesses 99.3% 99.8% 100.0% Universal bank with Insurance company Advisory firm for strategic focus on focused on life & the emerging As of Sep22 S/ mn | US$ mn retail annuities wealthy Total assets (1) 88,707 | 22,283 Con
Slide 5: 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. 4 1) Related companies excluding Aviva and Urbi.
Slide 6: Consistently delivering strong return to our shareholders
Consistently delivering strong return to our shareholders (S/ mn) (S/ mn) Net profit (2) 875 902 1,040 1,222 265 1,201 Net profit (2) 86 104 361 436 257 304 Payout Ratio 45% 45% 45% 25% n.m. 50% Payout Ratio 50% 96% 68% 46% 78% 66% Dividends declared(1) 600 245 467 200 200 202 394 406 302 100 43 n.m
Slide 7: Solid capitalization levels
Solid capitalization levels Banking System 15.1% 14.7% 14.5% 155.7% 128.9% 128.6% TCR Insurance 100.0% Reg. min. 16.3% 3Q21 2Q22 3Q22 15.2% 15.2% 12.0% 11.1% 11.6% Solvency ratio Banking 9.6% Reg. management min. 23.9% 19.1% Wealth 19.4% 8.0% Reg. min. 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 TC
Slide 8: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 9: Cloudy macro outlook
1 Cloudy macro outlook GDP growth YoY (%) Interest rates (%) Soles reference rate (BCRP) Jan23 Dollar reference rate (FED) 7.75% 6.75 3.8 Oct22 3.2 3.3 2.1% Dec22 2.50 4.50% 1.7 1.00 3.25 0.25 0.25 0.25 0.25 4Q21 1Q22 2Q22 3Q22 Jan21 Sep21 Dec21 Sep22 USD/PEN Inflation YoY (%) 4.13 Dec22 Dec22 8.5 8
Slide 10: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 11: Resilient banking activity, moderating consumer dynamics
Resilient banking activity, moderating 2 consumer dynamics +46% YoY +11% YoY +37% YoY 3.8 4.1 86 77 8.8 9.0 69 6.6 2.8 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Credit cards & personal loans balances Credit cards turnover (S/ bn) Credit cards sales (th units) (S/ bn) +24% YoY -7% YoY +34% YoY 2.5
Slide 12: Growth across all revenue lines in banking
Growth across all revenue lines in 2 banking % YoY +24% +28% +3% +22% +47 +3 +161 1,175 964 3Q21 Net interest and Fee income from Other income 3Q22 similar income financial services, net Banking – Revenue bridge from 3Q21 to 3Q22 (S/ mn) 11
Slide 13: Shift in loan mix and repricing expand NIM further
Shift in loan mix and repricing expand 2 NIM further Reactiva Commercial Mortgages Payroll deduction loans Yield on loans NIM Risk-adjusted NIM Credit cards & personal loans 6% 13% 9.8% 9.1% 42% 8.3% 8.3% 39% 7.9% 4.9% 5.0% 21% 4.4% 4.5% 20% 4.0% 12% 48% 10% 52% 3.6% 3.7% 3.8% Retail 3.3% Retail 21%
Slide 14: Rising funding costs with best LDR among peers
Rising funding costs with best LDR 2 among peers Sep19 Sep21 Sep22 Cost of funds Cost of deposits Interbank 104% 90% 98% 2.8% Bank 1 105% 97% 101% 2.2% 1.8% 2.4% 1.5% 1.6% Bank 2 105% 106% 103% 1.7% 1.2% 0.8% 0.9% Ref. rate YoY Bank 3 110% 124% 128% +575 bps (S/) +300 bps (US$) System 105% System 10
Slide 15: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 16: CoR builds up in line with shift in loan mix and new macro outlook
CoR builds up in line with shift in loan 3 mix and new macro outlook NPL coverage 210% 186% 182% FY19: 158% FY19: 10.0% (1) ratio (S2+S3) ratio S3 NPL ratio 1.8% 1.9% FY19: 2.2% 12.8% 12.8% FY19: 2.5% 9.0% 1.1% 2.7% 2.6% 2.5% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Banking – Cost of risk Banking – Non perfomi
Slide 17: Asset quality metrics remain stable
Asset quality metrics remain stable 3 Impairment loss on loans, net (S/ mn) Cost of risk 13.4% Total Retail Commercial 23.4% 3.4% 4.5% 2.6% 3.1% 1.7% 1.8% 1.7% 1.9%(1) 1.4% 1.8% 1.9% 1.1% 1,291 13.4% 463 8.5% 313 328 4.3% 4.5% 224 193 210 2.6% 2.5% 1.7% 189 178 199 (1) 3.1% 148 152 1.1% 1.9% 110 0.4
Slide 18: Manageable dollarization levels
Manageable dollarization levels 3 Gross Loans by segment & percentage in S/ Currency mix Sep22 93% 94% 94% 94% 95% 89% 92% 92% Gross Loans Total Assets 85% 78% 76% 73% 74% 73% 74% 73% USD USD 71% 64% 27% 32% 63% 58% 52% 52% 52% 51% 50% 49% 41% S/ S/ 73% 68% 2014 2015 2016 2017 2018 2019 2020 2021 Se
Slide 19: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 20: Our two-tier digital strategy to foster profitable & sustainable growth
Our two-tier digital strategy to foster profitable & sustainable growth 4 1. Digitalization 2. Accelerated growth Focus on growing and allowing Focus on increasing velocity customers to fulfill their of new sources of revenues financial needs 100% digitally & sustainable profitability Digital Paymen
Slide 21: Digitalization: building 100% digital solutions for the customer journey
Digitalization: building 100% digital solutions for the customer journey 4 Digital bank Cuenta Sueldo ERNI Digital Loyalty insurance program My finances Payments Piggy Digital Bank 100% digital financing account
Slide 22: Positive developments in banking digital indicators
Positive developments in banking digital indicators… 4 70% 56% 53% 67% 64% 68% 39% 51% 63% Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Digital customers Digital acquisition Digital sales (% of digital customers) (% of monthly retail customers “born digitally” ) (% of products sold digitall
Slide 23: … as well as in insurance
… as well as in insurance 4 80% 80% 80% 39% 34% 25% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 SOAT digital sales Vida cash life premiums (% of products sold digitally) (% of total life premiums)
Slide 24: Continues solid growth in customer base to over 5 million
Continues solid growth in customer base to over 5 million 4 +17% YoY +29% YoY +19% YoY 4.9 5.1 1.9 2.0 145 138 4.3 1.6 122 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Banking – retail customers (mn) Banking – digital customers (mn) Banking – commercial customers (th) 23
Slide 25: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Solid risk management capabilities 4 Positive development in digital indicators 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 26: 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 9M22 Fee income share 9M22 Fee income share 9M22 25
Slide 27: Strong growth in number of merchants and transactional volumes
Strong growth in number of merchants and transactional volumes 5 924 799 560 +16% QoQ +5% QoQ +9% YoY +65% YoY 3Q21 2Q22 3Q22 94 Merchants (th) 89 86 E-commerce 13% 16% 18% (%) 13.3 12.0 9.4 +11% QoQ +41% YoY 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Transactions in payments acquirer (S/ bn) Revenues(1) (S/ mn)
Slide 28: 9.4 million users in Plin and 2.5 million in Tunki
9.4 million users in Plin and 2.5 million in Tunki 5 +80% YoY +95% YoY Nov22 8.6 9.4 887 7.5 779 4.8 455 Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Users (mn) Merchants (th) +57% YoY +2x YoY Nov22 2.2 2.5 425 470 2.0 1.4 222 Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Users (mn) Merchants (th) 27
Slide 29: Transactions accelerating
Transactions accelerating 5 Transactions (units in mn) Nov22 Transactions (units in mn) Nov22 17.2 3.7 14.5 3.1 10.9 2.2 8.5 7.3 1.5 1.2 4.7 0.7 Sep21 Dec21 Mar22 Jun22 Sep22 Sep21 Dec21 Mar22 Jun22 Sep22 +34% QoQ | +3x YoY +43% QoQ | +4x YoY 28
Slide 30: 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 Our payments business 6 Developments on sustainability
Slide 31: Developments on sustainability, improvement in CSA score
Developments on sustainability, improvement in CSA score 6 CSA Score 2022 Latest updates YoY Corporate Sustainability Sustainability programs for 62 +9 pts Assessment employees in leadership positions 38 pts Ind. avg. 2021 Environmental 25 +6 pts 1st loan linked to sustainability in retail sector fo
Slide 32: Increasingly involved in green & sustainable financing
Increasingly involved in green & sustainable financing 6 160(US$ mn) 60(US$ mn) 20 (US$ mn) 100 (S/ mn) Syndicated Green Sustainability Sustainability sustainability loan loan loan loan (Lead arranger) (Arranger) (Arranger) (Arranger) We help our customers grow their businesses in a sustainable way
Slide 33: Our way of working will enable us to achieve our goals
Our way of working will enable us to achieve our goals 6 Top 20 in Peru Top 10 in Peru for the past 20 years 2011 - 2022 #3 in Latin America #5 in Peru in 2022 in 2022 #1 in Peru #6 for work from home in Peru in 2022 in 2022 #13 for women in Peru in 2022 #2 for millennials in Peru Top 15 in Peru in
Slide 34: Strong corporate governance
Strong corporate governance 6 Board of directors BOD with majority of independent members Carlos Rodríguez-Pastor Chairman IFS: 3 out of 7 Felipe Morris Fernando Zavala Director Director Strong corporate governance Highly supervised related party Alfonso Bustamante Cayetana Aljovín exposure, well be
Slide 35: 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 Our payments business 6 Developments on sustainability
Slide 36: Operating trends 9M22
Operating trends 9M22 Capital Profitability Loan growth 2022 9M22 2022 9M22 High single digit growth in IBK TCR >15% 15.2% IFS ROE >16% 18.2% total loans led by double digit growth in consumer loans(2) IBK CET1 >11% 11.6% 15.1%(1) 3Q22 growth YoY To remain at sound levels Continued path to recovery
Slide 37: Appendix
Appendix
Slide 38: Expense growth driven by recovery in activity and digital investments
Expense growth driven by recovery in activity and digital investments Optimizing our distribution channels (Units) Variable expenses drive costs higher – Other expenses (S/ mn) 2019 Sep22 % Change Financial stores 255 166 -35% 2,263 1,978 1,911 1,939 1,623 ATMs 1,598 1,554 -3% Correspondent 4,183 5,
Slide 39: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by appropriate funding Total gross loans (S/ mn) Total deposits (S/ mn) 44,688 46,647 48,898 50,905 49,280 43,082 43,566 47,149 38,257 38,093 2019 2020 2021 3Q21 3Q22 2019 2020 2021 3Q21 3Q22 AUM evolution (S/ mn) Net shareholders’ equity (S/ mn) 22,981 23,586 9,555
Slide 40: Growth in total revenues driven by NIM recovery
Growth in total revenues driven by NIM recovery Total revenues (1) (S/ mn) NIM (%) 5,922 5.3% 5,362 5,488 4.9% 4,683 4,793 4.5% 4.1% 4.0% 2019 2020 2021 9M21 9M22 2019 2020 2021 9M21 9M22 Net profit (S/ mn) ROE (%) 1,800 22.1% 1,536 18.3% 19.3% 18.2% 1,450 1,268 384 4.5% 2019 2020 2021 9M21 9M22 201
Slide 41: Overview of Peruvian financial system
Overview of Peruvian financial system Steady loan growth – Banking system gross loans (S/ bn) Profitability recovering – Banking system net profit (S/ mn) CAGR +10.6% ROE 18.5% 4.0% 13.3% 11.6% 18.0% CAGR 350 362 2019-21 326 346 9,082 286 7,218 7,776 14.8% 238 239 236 4,672 181 222 2,112 126 3.0% 10
Slide 42: Strategic focus on consumer loans
Banking Strategic focus on consumer loans Distinctive loan breakdown… …when compared to the banking system Banking System Commercial Commercial 48% Mortgages 65% Consumer Mortgages Consumer 39% loans Retail 48% loans Retail 61% 35% 52% 52% S/ 44.8BN S/ 23.3BN S/ 361.9BN S/ 125.6BN Leading position i
Slide 43: Diversified funding base with strength in retail deposits
Diversified funding base with strength Banking in retail deposits Significant deposits base A growing retail deposit-gathering franchise MS 2016 12.8% MS Sep22 14.8% Bonds Demand 30% Savings 14.3% 11% 47% 10.9% Deposits Due to banks 76% 13% 4.1% 1.9% Time 23% CAGR 2016-21 3Q22 YoY Interbank System S
Slide 44: Solid risk management capabilities
Banking 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% 4.0% 3.7% BBVA BBVA 5.0% 2.5% 4.2% 3.0% BCP BCP 4.7% 2.6% 4.0% 3
Slide 45: Reactiva loan balances down 47% YoY, representing 6% of total portfolio
Reactiva loan balances down 47% YoY, Banking representing 6% of total portfolio Reactiva Peru loan balances by segment (S/ bn) 3Q22 5.5 Segment YoY Corporate -80% 3.5 Mid-sized -49% 2.9 SME -35% Total -47% 3Q21 2Q22 3Q22 44 SME Mid-sized Corporate
Slide 46: Commercial: rescheduled loans decreased 58%
Banking Rescheduled loans decreased 58% Banking – Rescheduled loans (S/ bn) Clients 343 459 224 8.6 (Thousand) 6.9 Rescheduled 30% 31% 12% Retail 3.9 balance (%) 12.7 Apr20 Jun20 Sep22 10.9 Commercial Total 5.3 4.0 4.1 1.4 Apr20 Jun20 Sep22 Apr20 Jun20 Sep22 45
Slide 47: Manageable dollarization levels
Banking Manageable dollarization levels Total loans Retail loans Commercial loans % PEN 67% 72% 87% 92% 57% 61% System 8% 5% 26% 27% 47% 50% 92% 95% 74% 73% 53% 50% 3Q17 3Q22 3Q17 3Q22 3Q17 3Q22 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Micro 95% 9
Slide 48: Key player in Peru's life insurance business
Key player in Peru’s life insurance Insurance business Strategic focus on life insurance… …when compared to the insurance system (Insurance premiums and collections breakdown) (Insurance premiums and collections breakdown) Other life Insurance System Regulated 16% annuities D&S 24% 1% Regulated Othe
Slide 49: Annuities leading recovery in premiums
Annuities leading recovery in Insurance premiums Strong performance in most products Outgrowing the overall insurance industry (Gross premiums and collections by business unit - S/ mn) (YoY growth in annuities premiums) (1) Regulated annuities Private annuities Individual Life Other Life P&C D&S YoY
Slide 50: Resilient wealth management business
Wealth management Resilient wealth management business Positive trend in AUM growth – Inteligo Group AUM (S/ mn) Solid fee generation due to client mix – Fee/Avg. Aum (%) 22,981 23,586 0.9% 0.9% 20,989 21,992 0.8% 0.8% 0.8% 18,293 2019 2020 2021 9M21 9M22 2019 2020 2021 9M21 9M22 Diversified revenue
Slide 51: IFS income statement – IFRS
IFS income statement – IFRS % chg % chg % chg % chg Incom e S t a t e m e nt ( S / m m ) 2019 2020 2021 9 M 21 9 M 22 '19 / '18 '20/ '19 '21/ '20 9 M 22/ 9 M 21 Interest and similar income 4,847.2 4,665.0 4,605.6 3,368.6 4,187.3 12.2% (3.8%) (1.3%) 24.3% Interest and similar expenses (1,424.0) (1,19
Slide 52: IFS balance sheet – IFRS
IFS balance sheet – IFRS % chg % chg % chg % chg Ba la nce S he e t ( S / m m ) 2019 2020 2021 9 M 21 9 M 22 '19 / '18 '20/ '19 '21/ '20 9 M 22/ 9 M 21 Cash and due from banks 11,128.9 18,765.5 17,104.5 20,330.7 12,941.6 32.8% 68.6% (8.9%) (36.3%) Inter-bank funds 85.0 18.1 30.0 0.0 (0.0) (82.8%) (7
Slide 53: 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
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