Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Investor Presentation (April 2021)
48 slides from Intercorp Financial Services's investor presentation, April 2021
Slide 1: Investor Presentation April 2021
Investor Presentation April 2021
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 IFS’ busin
Slide 3: IFS at a glance
Cd Intercorp Financial Services IFS ata glance
Slide 4: Leading financial services platform with solid balance sheet and diversified source of dividends
Leading financial services platform with solid balance sheet and diversified source of dividends Financial highlights Three operating segments 99.3% 99.8% 100.0% Universal bank with Insurance company Leading provider of As of Dec20 S/ mm | US$ mm strategic focus on with focus on life & wealth manage
Slide 5: Intercorp Group: striving to make Peru the best place to raise a family
Intercorp Group: striving to make Peru the best place to raise a family in Latin America Financial services Retail US$ 7.2bn Revenues in 2020 ~3.7% of Peru 2020 GDP Education Other (1) Source: Company information and BCRP. 4 1) Related companies excluding Aviva and Urbi.
Slide 6: Story of sustained growth and strong returns for our shareholders
Story of sustained growth and strong returns for our shareholders Sustained growth and market share gains over the years Delivering strong returns for our shareholders Total assets (S/ mm) Net profit (US$ mm) (3) 9.4% 11.3% 12.8% Dividends 40 181 89 MS loans (1) paid (US$ mm) MS deposits (1) 9.3% 11
Slide 7: Strategically positioned to capture significant growth opportunities
Strategically positioned to capture significant growth opportunities What distinguishes us How we do it Universal franchise Customer Ready-to-scale Deep knowledge Digital first Innovation at with strong focus centricity omnichannel of Peruvians strategy the core on retail platform through analytics
Slide 8: Scalable digital platform already in place
Scalable digital platform already in place 2010 - 2014 2015 - 2018 2019 - Onwards Store-centric model Omnichannel platform with Search for focused on physical strong focus on digital and exponential growth convenience analytics • Transactional online banking • Digital sales and self-service capabili
Slide 9: Key messages
Key messages 1 2 3 4 5 Activity recovering Strong balance Digital trends support Lower provisions continue Continued focus despite macro and sheet IFS strategy to reflect better payment on efficiency political uncertainty behavior 8
Slide 10: Moderate recovery in macro activity
1 Moderate recovery in macro activity GDP Mining and fuel GDP Credit to private sector (YoY % Chg) (YoY % Chg) (YoY % Chg) 3.6% 14.1% 13.3% 12.3% 11.6% 8.7% 10.0% TBU 7.7% -3.7% 4.4% -8.5% -5.3% -14.2% -12.2% 10.7% -2.0% -4.6% -5.3% -6.7% -42.2% 3.7% 0.5% Feb20 Apr20 Jun20 Sep20 Dec20 Jan21 Feb21 Fe
Slide 11: Government measures 2021
1 Government measures 2021 New government measures and extension of loan relief programs Extension of grace periods and tenors of Reactiva Peru Rescheduling program for up to S/ 16 bn (27% of the initial program) loans Applications deadline: 15th July 2021 Cash transfers of S/ 600 to 4.2 million hou
Slide 12: Evolution of our core operating indicators
1 Evolution of our core operating indicators Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 113 111 100 100 100 105 94 119 121 120 82 100 38 52 8 Feb20 Apr20 Dec20 Jan21 Feb21 Feb20
Slide 13: Reactiva Peru Program as an opportunity to gain relevance in mid-sized and SME segments
Reactiva Peru Program as an opportunity to gain 1 relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +35.7% 20,545 +3.9% 22,308 21,720 9,114 8,886 8,549 16,000 6,617 6,460 3,833 573 525 16,000 8,541 8,361 15,691 15,260 Mar20 Dec
Slide 14: Liquidity levels remain high with growing deposit base at Interbank
Liquidity levels remain high with growing 2 deposit base at Interbank Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of December 31, 2020 S/ million Total LDR MS total 13.3% 13.1% 13.3% deposits 110% MS retail 13.5% 13.9% 13.9% 93% 96% 97% System: deposits 97% +25.3% 44,577
Slide 15: Strengthened capital ratios at all IFS' segments
2 Strengthened capital ratios at all IFS’ segments 165.7% 164.6% 155.0% 144.5% Banking System 14.6% 15.6% 15.4% 15.4%(1) 100.0% regulatory TCR minimum 17.0% 17.0% 16.8% Dic19 Sep20 Dic20 Feb21 15.2% 11.6% 11.4% 11.5% 11.6% Solvency ratio 10.6% regulatory minimum 17.0% 17.0% 16.8% 15.2% 28.4% 29.1% 2
Slide 16: Continuous improvement in our digital indicators
Continuous improvement in our digital 3 indicators Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally 75% 51% 58% 42% 63% 32% Dec19 Dec20 Dec19 Dec20 Dec19 Dec20 Interbank – Retail digital acqu
Slide 17: Growing customer base, thanks to digital
3 Growing customer base, thanks to digital Interbank - Retail customers Interbank - Commercial customers Thousand Thousand +14.4% +45.7% 4,001 104 3,498 71 Dec19 Dec20 Dec19 Dec20 Interbank - Retail 100% digital customers Interbank - Tunki & Plin users Thousand N° of users (thousand) +111.8% Tunki I
Slide 18: Lower rescheduled loan balances
4 Lower rescheduled loan balances Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 348 41% (Thousand) at System Level(1) Clients 343 459 361 24% Rescheduled 34% 43% (Thousand) 36% at System balance (%) Level(1) Rescheduled 8.6 30% 31% 24% 6.9
Slide 19: Improving payment behavior among Interbank's retail clients
Improving payment behavior among Interbank’s 4 retail clients Retail loan balances with payments due Payment behavior S/ billion % of retail loans with 96% 99% 99% payments due Payments of rescheduled loans 17.0 17.1 16.6 Collected Jan21 Requested relief Not paid 96.2% 6.6 6.5 6.2 (36%) 92.6% 94.8%
Slide 20: Quarterly provision expenses closer to pre COVID-19 levels
Quarterly provision expenses closer to pre 4 COVID-19 levels Interbank - Cost of risk Interbank - Non-performing exposure NPL 117.7% 181.5% coverage ratio 4.5% 6.1% 15.1% 14.2% 3.1% 2.8%(1) 8.9% 2.6%(1) 2.9% 3.4% 3.6% 4Q19 3Q20 4Q20 2019 2020 4Q19 3Q20 4Q20 (S2+S3) ratio NPL ratio (S3 + refinanced l
Slide 21: Cost containment measures in 2020 offset negative impacts from COVID-19
Cost containment measures in 2020 offset 5 negative impacts from COVID-19 Interbank - Other expenses bridge from 4Q19 to 4Q20 Other expenses YoY growth by line 2020 growth +5.8% -17.8% -12.7% -3.3% -8.3% (1) IFS -5% +4 (1) Interbank-7% -29 -5 -4 413 379 Interseguro -4% Inteligo 4% 4Q19 Technology Sa
Slide 22: Summary & Trends
Summary & Trends 1 2 3 4 5 Activity recovering Strong balance Digital trends support Lower provisions continue Continued focus despite macro and sheet IFS strategy to reflect better payment on efficiency political uncertainty behavior 21
Slide 23: Operating trends 2021
Operating trends 2021 Capital Profitability Loan growth To remain at sound levels, well Slow recovery in retail, above regulatory requirements IFS ROAE >14% and decreasing volumes in IBK TCR > 15% commercial IBK CET1 > 11% Revenues Cost of risk Efficiency Soft top line recovery Lower cost of risk Pr
Slide 24: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 25: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 26: Rebalanced loan portfolio due to Reactiva Peru
Rebalanced loan portfolio due to Reactiva Peru Interbank Distinctive loan breakdown… …when compared to the banking system Gross loans breakdown (as of December 2020) Gross loans breakdown (as of December 2020) Banking System Credit Commercial Commercial Credit Cards Cards 68.2% 53.6% Mortgages 26.4%
Slide 27: Solid risk management capabilities
Solid risk management capabilities Interbank Better asset quality than the system despite focus on retail Balanced asset quality among businesses PDL ratio evolution PDL ratio as of December 2020 Commercial loans Retail loans Total loans Interbank System 3.8% 3.0% 3.0% 3.0% Scotiabank Scotiabank 4.6
Slide 28: Diversified funding base with strength in retail deposits
Diversified funding base with strength in retail deposits Interbank Consistently delivering higher deposit growth than the system A growing retail deposit-gathering franchise Total deposits growth evolution Total retail deposits growth evolution MS 2014 11.6% MS 2020 13.3% MS 2014 12.1% MS 2020 13.9
Slide 29: Key player in Peru's life insurance business
Key player in Peru’s life insurance business Interseguro Strategic focus on life insurance… … when compared to the insurance system Insurance premiums and collections breakdown (as of December 2020) Insurance premiums and collections breakdown (as of December 2020) Insurance System Regulated annuiti
Slide 30: Premiums growth affected by the COVID-19 pandemic
Premiums growth affected by the COVID-19 pandemic Interseguro Introduction of new products to continue diversifying Gross premiums and collections by business unit (S/ mm) Regulated Private Annuities Individual Life Other Life P&C D&S Annuities CAGR 2017-2020 937 6.1% 840 160 12 102 744 5.4% 97 9 91
Slide 31: Resilient wealth management business
Resilient wealth management business Inteligo Positive trend in AUM growth Solid fee generation due to client mix Inteligo Group AUM (S/ mm) Fees / Avg. AUM 20,989 0.9% 0.9% 0.9% 17,593 18,293 0.8% 16,230 2017 2018 2019 2020 2017 2018 2019 2020 Strong core revenue generation High profitability S/ mm
Slide 32: Our strategy is based on digital and analytics
Our strategy is based on digital and analytics We have built an scalable digital platform… … leveraging advanced analytics More and better models • Predictive and prescriptive models to improve effectiveness Increasing levels of adoption and customer satisfaction • Machine learning and deep learning
Slide 33: Efficiency as our guiding principle to deal with the adverse environment
Efficiency as our guiding principle to deal with the adverse environment Optimizing our distribution channels Reducing other expenses following cost containment measures Units 2018 2020 % Change Financial 270 215 -20% 1,978 stores 1,876(1) ATMs 1,975 1,640 -17% Correspondent 2,506 3,331 +33% agents
Slide 34: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 35: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by appropriate funding IFS Total gross loans Total deposits S/ mm S/ mm 43,082 47,149 38,257 34,055 38,093 29,175 32,608 33,682 2017 2018 2019 2020 2017 2018 2019 2020 AUM evolution Net shareholders’ equity S/ mm S/ mm 20,989 8,903 8,954 17,593 18,293 16,230 7,088 5
Slide 36: Growth in total revenues despite impacts from the COVID-19 pandemic
Growth in total revenues despite impacts from the COVID-19 pandemic IFS Total revenues (1) NIM S/ mm 5,673(4) 5,384(3) 5.3% 5.4% 5.3%(3) 4,889(2) 4.7%(4) 4,310 2017 2018 2019 2020 2017 2018 2019 2020 Net profit ROAE S/ mm 1,479(3) 19.3% 18.6%(2) 18.6%(3) 1,236(2) 1,033 514(4) 6.0%(4) 2017 2018 2019
Slide 37: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 38: Evolving cultural transformation
Evolving cultural transformation Comprehensive transformational approach New initiatives User Empower IT all Peruvians to achieve financial well-being Org More than 100 teams working with agile framework Innovation Labs Over 400 workers organized in more than 80 squads 37
Slide 39: A "Great Place to Work" with a distinctive culture
A “Great Place to Work” with a distinctive culture and strong sense of achievement for new talent Our commitment to fostering a performance-based culture is demonstrated by being ranked among the top Peruvian and Latin American companies Top 20 in Peru Top 10 in Peru for the past 19 years 2011 - 201
Slide 40: Strong corporate governance
Strong corporate governance Board of Directors BOD with majority of independent members Carlos Rodríguez-Pastor IFS: 4 out of 7 Chairman Strong corporate governance Felipe Morris Fernando Zavala Director Director Highly supervised related party exposure, well below regulatory limits Alfonso Bustaman
Slide 41: Committed to a vision of sustainability
Committed to a vision of sustainability E S G (Environmental) (Social) (Governance) Operational eco-efficiency and waste Community; Diversity, Equity and Corporate governance, Ethics and management(1) Inclusion integrity 4 out of 7 independent OxI directors 31 Tons less paper Board of Specialized co
Slide 42: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 43: Appendix
Cd Intercorp Financial Services oooeeen | Appendix
Slide 44: Historical macroeconomic performance
Historical macroeconomic performance Growing economy with low inflation levels Growing GDP per capita and declining poverty rates 2015 – 2019 average consumer price GDP per capita (US$) % of population in poverty 2015 – 2019 average real GDP growth rate inflation rate LatAm Peers LatAm Peers 5.7% 3.
Slide 45: Resilient financial system
Resilient financial system Gross loans growth and asset quality Sustained profitability, yet affected by COVID-19 Banking system gross loans (S/ bn) Banking system net profit (S/ mm) PDL 3.0% 3.0% 3.0% 3.8% ROAE 18.3% 18.5% 18.5% 4.0% ratio CAGR 326 2017-20 271 286 9,082 246 8,220 7,442 6.7% 222 176
Slide 46: IFS income statement – IFRS
IFS income statement – IFRS (1) Incom e S t a t e m e nt ( S / m m ) 2017 2018 2019 2020 % chg '19 / '18 % chg '20/ '19 Interest and similar income 3,809.0 4,321.3 4,847.2 4,665.0 12.2% (3.8%) Interest and similar expenses (1,121.8) (1,177.3) (1,424.0) (1,192.3) 21.0% (16.3%) = Ne t int e r e s t a
Slide 47: IFS balance sheet – IFRS
IFS balance sheet – IFRS (1) Ba la nce S he e t ( S / m m ) 2017 2018 2019 2020 % chg '19 / '18 % chg '20/ '19 Cash and due from banks 11,204.8 8,380.4 11,128.9 18,765.5 32.8% 68.6% Inter-bank funds 403.5 495.0 85.0 18.1 (82.8%) (78.7%) Financial investments 16,924.1 17,629.4 19,072.7 24,277.1 8.2%
Slide 48: Slide 48
Intercorp Financial Services — Investor Presentation (April 2021) on 6ix