44 slides from Intercorp Financial Services's investor presentation, September 2021
Slide 1: Management Presentation
Management Presentation September 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 Interbank’
Slide 3: Interbank at a glance
CJ Interbank Interbank at a glance
Slide 4: Leading bank in Peru with strong financial performance
Leading bank in Peru with strong financial performance Financial highlights Leading position in the Peruvian financial system(1) As of June 30, 2021 Assets S/ 68,621 mm 2 2 1 Gross loans S/ 41,889 mm 11.7% 22.0% 26.7% Deposits S/ 45,225 mm Market share in Market share in ROE consumer loans payroll l
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$ 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: Milestones in Interbank's history
Milestones in Interbank’s 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 executes a SEC Interco
Slide 7: Strategically positioned to capture significant growth opportunities in Peru
Strategically positioned to capture significant growth opportunities in Peru What differentiates 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 a
Slide 8: Scalable digital platform already in place
Scalable digital platform already in place 1994 - 2014 2015 - 2018 2019 - Onwards Store-centric model Omnichannel platform with Digital first, search focused on physical strong focus on digital and for exponential convenience analytics growth Physical supports growth Digital supports physical Physic
Slide 9: Key messages
Key messages 1 2 3 Economic recovery Solid capitalization, Strong recovery in core continues strong liquidity and operating indicators manageable dollarization 4 5 6 Digital indicators Normalizing levels of cost of Continued focus continue to support risk and PDLs with on efficiency Interbank’s stra
Slide 10: GDP continues to recover
1 GDP continues to recover Apr21: GDP +58.5% GDP by economic sector (Jan21-Jun21) (YoY % Chg) May21: (YoY % Chg) +47.8% FY21(E) Jun21: +23.5% 41.9% GDP 21% +10.1% 3.8% Construction 100% +17.4% -1.7% -9.0% TB U -30.0% Manufacturing 36% +18.1% 2Q20 3Q20 4Q20 1Q21 2Q21 Commerce 33% +18.0% Expectations
Slide 11: Solid capital ratios
2 Solid capital ratios Key initiatives Capital ratio evolution Solvency Banking System 14.8% 16.3% 15.4% TCR ▪ Capitalization of 2019 earnings to strengthen CET1 and TCR ratio 16.7% 16.9% 16.5% 11.4% 11.5% 11.1% ▪ Called USD 200 million hybrid Tier 1 bond to reduce interest expense on bonds that no
Slide 12: Liquidity levels remain high
2 Liquidity levels remain high Loan to deposit ratio (LDR) Total deposits % as of June 30, 2021 S/ million Total LDR MS total 13.2% 13.7% 13.4% deposits Aug21 92% MS retail 13.8% 14.1% 14.5% 110% 114% deposits 93% 95% System: 100% +9.1% 46,653 45,225 41,467 Interbank BCP BBVA Scotiabank 2Q20 1Q21 2Q
Slide 13: Manageable dollarization
2 Manageable dollarization Gross Loans by segment & percentage in S/ Currency mix Jul21 93% 94% 94% 94% 94% 94% 94% 93% Gross Loans Total Assets 78% 77% USD 77% 76% 77% 76% USD 73% 74% 29% 24% 64% 63% 62% 60% 61% 60% 51% 49% S/ 76% S/ 2018 2019 2020 Mar21 Apr21 May21 Jun21 Jul21 72% Total Loans % in
Slide 14: Strong recovery in core operating indicators
3 Strong recovery in core operating indicators Credit and debit cards turnover (Index; 100 = Feb20) Payroll deduction loans disbursements (Index; 100 = Feb20) 145 128 115 113 100 94 100 106 38 8 Feb20 Apr20 Dec20 Apr21 Jul21 Feb20 Apr20 Dec20 Apr21 Jul21 Mortgages disbursements (Index; 100 = Feb20)
Slide 15: Digital indicators stabilizing
Digital indicators stabilizing 4 Digital users 100% digital customers Digital sales % of digital users 100% digital customers % of products sold digitally Jul21 Jul21 Jul21 78% 56% 55% 78% 60% 72% 77% 58% 57% 43% 60% 31% Jun19 Jun20 Jun21 Jun19 Jun20 Jun21 Jun19 Jun20 Jun21 Retail digital acquisitio
Slide 16: Growing customer base supported by increasing 100% digital users
Growing customer base supported by increasing 100% digital users 4 Retail customers Commercial customers Thousand Thousand CAGR: +14.1% CAGR: +37.0% 4,160 116 3,627 3,194 82 62 Jun19 Jun20 Jun21 Jun19 Jun20 Jun21 Retail 100% digital customers Tunki and Plin users Thousand N° of users (thousand) CAGR
Slide 17: Declining rescheduled loan balances
Declining rescheduled loan balances 5 Loan rescheduling Retail loans rescheduling S/ billion S/ billion Clients 332 441 306 (Thousand) Clients 343 459 318 Rescheduled 34% 43% (Thousand) 28% balance (%) Rescheduled 8.6 30% 31% 19% 6.9 balance (%) 5.6 12.7 Apr20 Jun20 Jun21 10.9 Commercial loans resch
Slide 18: Continued improvement in payment behavior among retail clients
Continued improvement in payment behavior among retail clients 5 Retail loan balances with payments due Payment behavior S/ billion % of retail loans with 98.7% 99.6% payments due Payments of rescheduled loans 18.2 17.3 Collected Requested relief Not paid (38%) 5.3 (29%) 97.0% 97.4% 0.4% 0.1% 2.6% 2
Slide 19: Lower provisions continue to reflect better payment behavior
Lower provisions continue to reflect better payment behavior 5 Cost of risk Past due loans Coverage 229.4% 205.0% 208.9% ratio 5.8% 3.3% 3.0% 4.0% 2.4% 2.0% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 Cost of risk – Retail banking Cost of risk – Commercial banking 10.1% 1.5% 7.3% 1.0% 0.7% 3.5% 2Q20 1Q20 2Q21 2Q2
Slide 20: Recovery in expenses driven by activity with continued focus on efficiency
Recovery in expenses driven by activity with continued focus on efficiency 6 Optimizing our distribution channels Disciplined cost control helps efficiency Units Total expenses(3) (S/ mm) 2018 Jul21 % Change Financial 270 194 -28% 1,570 stores 1,444 1,491 ATMs 1,975 1,586 -20% Correspondent 800 2,50
Slide 21: Summary & Trends
Summary & Trends 1 2 3 Economic recovery Solid capitalization, Strong recovery in core continues strong liquidity and operating indicators manageable dollarization 4 5 6 Digital indicators Normalizing levels of cost of Continued focus continue to support risk and PDLs with on efficiency Interbank’s
Slide 22: Operating trends 1H21
Operating trends 1H21 Capital Loan growth 2021 1H21 TCR >15% 16.5% Slow recovery in retail, and decreasing volumes in commercial CET1 >11% 11.5% Growth YTD To remain at sound levels Retail +3.9% / Commercial -1.0% Revenues Cost of risk Soft top line recovery Pressure on NII and NIM despite lower cos
Slide 23: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 24: Highlights
Highlights Unique and diversified bank with 01. ready-to-scale omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 25: Rebalanced loan portfolio due to Reactiva Peru
Rebalanced loan portfolio due to Reactiva Peru Distinctive loan breakdown… …when compared to the banking system Gross loans breakdown (as of June 2021) Gross loans breakdown (as of June 2021) Banking System Commercial Commercial 52.9% Mortgages 68.9% Mortgages Consumer Consumer 42.8% 51.3% loans Ret
Slide 26: Solid risk management capabilities
Solid risk management capabilities Better asset quality than the system despite focus on retail Balanced asset quality among businesses PDL ratio evolution PDL ratio as of June 2021 Interbank System Commercial loans Retail loans Total loans 3.8% 3.6% 3.0% 3.0% Scotiabank Scotiabank 4.2% 4.8% Scotiab
Slide 27: Diversified funding base with strength in retail deposits
Diversified funding base with strength in retail deposits 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 Jun21 13.4% MS 2014 12.1% MS Jun21 14.5% 15.0%
Slide 28: 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 29: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 30: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by appropriate funding Total gross loans Total deposits S/ mm S/ mm 41,594 40,316 41,889 44,596 45,225 36,166 41,467 32,518 35,610 31,323 2018 2019 2020 Jun20 Jun21 2018 2019 2020 Jun20 Jun21 Total assets Net shareholders’ equity S/ mm S/ mm 68,621 6,029 6,183 5,989
Slide 31: Interbank's profitability impacted by COVID-19
Interbank’s profitability impacted by COVID-19 Total revenues (1) Net interest margin (NIM) S/ mm 4,093 (2) 3,791 5.7% 5.9% 3,614 5.2% 4.8% 3.8% 1,891 1,859 2018 2019 2020 1H20 1H21 2018 2019 2020 1H20 1H21 Net profit evolution ROE S/ mm 1,222 21.3% 22.0% 1,040 11.7% 7.9% 359 265 239 4.3% 2018 2019
Slide 32: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 33: Evolving cultural transformation
Evolving cultural transformation Comprehensive transformational approach New initiatives We are User side by side IT with Peruvians so they can reach their dreams, today Org More than 100 teams working with agile framework Innovation Labs Over 400 workers organized in more than 80 squads 32
Slide 34: 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 for the past 19 years #1 in Latin America #2 in
Slide 35: Strong corporate governance
Strong corporate governance Board of Directors BOD with majority of independent members Carlos Rodríguez-Pastor Chairman Interbank: 5 out of 9 Strong corporate Ramón Barúa Fernando Zavala governance Director Director Relevant committees: Felipe Morris Cayetana Aljovín - Audit Director Independent Di
Slide 36: Committed to a vision of sustainability
Committed to a vision of sustainability At Interbank, we published our 2020 Sustainability Report where we outlined the actions taken throughout the year in order to achieve our vision of sustainability Aspiration To be a responsible and sustainable financial platform that contributes to the country
Slide 37: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 38: Appendix
CJ Interbank oom ae Appendix
Slide 39: Resilient financial system
Resilient financial system Gross loans growth Asset quality evolution Banking system gross loans (S/ bn) Banking system CoR and PDL ratio PDL 3.0% 3.0% 3.8% 3.1% 3.6% ratio 340 CAGR 326 321 2018-20 271 286 3.9% 3.4% 12.4% 222 217 234 176 181 2.2% 1.9% 2.0% 4.5% 95 105 104 104 106 2018 2019 2020 Jun2
Slide 40: Interbank's income statement
Interbank’s income statement % chg % chg Incom e S t a t e m e nt ( S / m m ) 2018 2019 2020 1H20 1H21 '20/ '19 1H21/ 1H20 Interest income 3,589.8 4,094.8 3,865.1 1,986.8 1,686.8 (5.6%) (15.1%) Interest expenses (1,040.7) (1,231.0) (983.9) (544.2) (391.0) (20.1%) (28.2%) Gr os s fina ncia l m a r g
Slide 41: Interbank's balance sheet
Interbank’s balance sheet % chg % chg Fina ncia l S t a t e m e nt s 2018 2019 2020 1H20 1H21 '20/ '19 1H21/ 1H20 As s e t s Cash and due from banks 8,209.9 9,861.5 17,716.8 13,826.8 16,680.4 79.7% 20.6% Investments, net (1) 5,790.4 5,559.4 8,951.2 7,590.1 9,718.8 61.0% 28.0% Loan portfolio, net 31,
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
Slide 43: Reactiva Peru loan balances at Interbank
Reactiva Peru loan balances at Interbank Reactiva Peru loan balances by segment S/ million, Local GAAP 6,709 6,617 106 110 6,348 6,082 725 573 107 485 101 419 3,833 3,807 69 3,900 3,644 3,463 742 2,640 1,978 2,126 2,113 2,099 381 2Q20 3Q20 4Q20 1Q21 2Q21 SME Mid-sized Corporate Other 42
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