Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q2 2018 Earnings Presentation
34 slides from Intercorp Financial Services's earnings presentation, 2018
Slide 1: Earnings Presentation Second Quarter 2018
Earnings Presentation Second Quarter 2018 EJ Intercorp Financial Services
Slide 2: Highlights 2Q18
Highlights 2Q@18 * Recordearnings of S/289 millionin 2Q18 Interbank * Loan growth accelerated to 14% YoY, supported by a 15% YoY growthin credit cards 22% QoQ growth in gross premiums plus collections Inte rseguro * 15% ROAE, excluding one-time adjustment of S/-145 MM due to the adoption of new mort
Slide 3: IFS 2Q18 recurring profits increased 20.6% QoQ and 43.2% YoY
IFS 2Q18 recurring profits increased 20.6% QoQ and 43.2% YoY IFRS® IFS Interbank Net profit in S/ million Net profit in S/ million +43.2% +38.3% | 75% a Pe 246 244 2Qi17 1Q18 2Q18 2Q17 1Q18 2Q18 Interseguro Inteligo Net profit in S/ million Net profit in S/ million +103.3% v | -18.0% | % 31 15 14 pa
Slide 4: IFS key indicators 2Q18
10} (2) 3) 4 (3) © a” IFS key indicators 2Q18 IFRSO S/million 2Q17 1Q18 2Q18 %chgQoQ_ %chg YoY Total revenues 1,094.9 1,227.0 1,242.6 1.3% 13.5% Net interest and similar income 642.1 769.4 784.2 1.9% 22.1% Efficiency ratio™ 37.8% 34.2% 34.4% 20bps -340 bps IFS Profit for the period 244.1 290.0 204.9
Slide 5: Relevant net income
Interbank — Local GAAP Relevant net income Local GAAP & IFRS Interseguro — Local GAAP Inteligo —IFRS® Net profitin $/ million a (2) 3) «@ (3) (6) 412.7% 284 250 3.4% Net profitin $/ million +170.8% 2Q17 1Q18 2Q18 2Q17 Relevant net income for dividend payments 149 1218 Nonrecurring gain on sale of se
Slide 6: Interbank
EJ Intercorp Financial Services
Slide 7: Improvement in NIM and cost of risk
10} (2) 3) 4) ©) © io) Improvement in NIM and cost of risk IFRSO Net interest and similar income Loan provision expense S/ million S/ million Risk- NIM@ — +6.0% | 214 _tS%y . 619 = : i = 601 173 t ' 13 2Qi17 1Q18 2Q18 2Q17 1Q18 2Qi8 4 Construction sector Total other income©®) Other expenses®) S/ mil
Slide 8: Clear focus on digital transformation
10} @ @) (4) Clear focus on digital transformation 2Q18 (— Digital \ (— Off-branch \ customers® transactions® 45% 94% 34% 87% Ne 2Q17 2a18 Se 2Q17 2a18 ) /— @ Digital ‘\ “Wer Disitalsales a a @ functionalities self-service 94% 29% 2Q18 Digital customers: % of retail clients that use digital platform
Slide 9: Sustained growth in digital functionalities
Sustained growth in digital functionalities Continuous growth in digitally-driven Increased use of credit card : ~ features on digital platforms functionalities gitalp PY $ma rt ica) New rewards program: &*) Interbank Benefit X y, ( ») @ Activate to use abroad Piggy Bank (Alcancia) p<) Activate to s
Slide 10: Loan growth accelerated to 13.6% YoY, supported by credit cards
Loan growth accelerated to 13.6% YoY, supported by a 15.2% YoY growth in credit cards Performing loans Breakdown of loans S/ million +13.6% 413.4%) 25,588 2Q17 1Q18 2Q18 =Retail =™Commercial % chgexcluding exchange rate effect (1)Basedon Local GAAP figures S/million %chg %chg 2Q17 1Q18 2Q18 QoQ YoY
Slide 11: Retail deposits increased 1.8% QoQ and 11.4% YoY
iO) @ @) (3) Retail deposits increased 1.8% QoQ and 11.4% YoY; market share improved 10 bps @oQ Funding structure Funding breakdown S/million %chg %chg S/ million 2Q17 1918 2Q18 QoQ YoY Gross Loans, Deposits' 258136 29,1548 28,9928 -0.6% 12.3% Retail 11,6622 127689 12,9926 1.8% 11.4% Commercial 1415
Slide 12: Asset quality continued to improve in 2Q18
Asset quality continued to improve in 2Q18 IFRS Cost of risk (IFRS vs. Local GAAP) Non-performing exposure NPL Coverage Ratio — SD @ & 3.1% 19, 13.8% 9 > tw 13.1% 12.1% impact of construction panies 3.2% 3.1% 3.1% 3.2% 25% 2Q17 1A18 2Q18 2Q17 1a18 2Q18 IFRS = —#—Local GAAP ™(S2+S3)ratio © NPL ratio
Slide 13: Stable PDL ratio QoQ. Cost of risk improved in 2Q18
Stable PDL ratio QoQ. Cost of risk™ improved 30 bps in 2Q18 Local GAAP PDL vs. System Loan provision expense vs. System = Interbank —i=System =" Interbank =te=System 40% Interbank | Coversxe => £76.5%) Ratio 3.1% 3.1% 3.1% 3.1% a —_ 2.3% 2Q17 1Q18 2Q18 2Qi17 1Q18 2Q18 PDL retail banking vs. System P
Slide 14: Dollarization levels sustained in retail and slightly increased in corporate loans
Dollarization levels sustained in retail and slightly increased in corporate loans Total loans Retail loans Commercial loans %PENSysten EE t 67.0%) 26.1% 47.3% 49.9% 2Q17 2Q18 2Qi17 2Qi8 2Qi17 2Q18 Retail loans breakdown Commercial loans breakdown Consumer Credit Cards Mortgages Corporate Medium Sma
Slide 15: Solid core capital levels for Interbank
Solid core capital levels for Interbank om > GD => => cD 17.5% 16.6% 16.7% 2Q17 3Q17 4Q17 1Q18 2Q18 me Tier) === Tier || —®=CETI _ +1.7% Additional Regulatory Capital Requirement - 10.0% Total Regulatory Minimum 15
Slide 16: Interseguro
Iinterseguro
Slide 17: Main accounting changes in 2Q18 in the Insurance Segment
Main accounting changes in 2Q18 in the Insurance Segment Item Description Impact on 2Q18 figures fi Discount rates VL ————— Adoption of new mortality tables YY ! regulator Former rate: Risk-adjusted portfolio rate plus 3% fixed for mismatched portion of assets and liabilities New rate: Risk free rat
Slide 18: 21.6% QoQ growth in gross premiums plus collections
21.6% QoQ growth in gross premiums plus collections IFRS Gross premiums plus collections by business unit S/ million +59.6% | 238 r 38 j 195 va i © Annuities (Private and Regulated) increased 50.1% QoQas a result of a higher market share in a more dynamic market 38 149 * — Retaillnsuranceincreased 6
Slide 19: Adoption of new mortality tables caused a one-time adjustment
Adoption of new mortality tables caused a one-time adjustment of S/ -145 MM on technical reserves Net premiums Adjustment of technical reserves S/million S/million Annuities C 23.2% ) (24.5%) market share t 30.6%] 164 161 18 139 30 31 } a 145 SS 47 52 48 66 44 43 19 2Qi17 1Q18 2Q18 2Q17 1Q18 2Q18 mA
Slide 20: Interseguro's fixed income portfolio decreased QoQ
Interseguro’s fixed income portfolio decreased QoGQasa result of higher interest rates Investment portfolio Results from investments S/million S/million roe => & & impact of IFRS 9: 1018: S/-5MM OMM 491.4% t 1271 2.4% 160 149 = 3 5,748 ies 145 2 3 42 -2 2Q17 1018 2a18 2Q17 1018 2018 "Fixed income =E
Slide 21: Inteligo
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Slide 22: Net interest and similar income grew 19.5% QoQ and 14.9% YoY
Net interest and similar income grew 19.5% QoQ and 14.9% YoY IFRS® Net interest and similar income Fees from financial services S/ million S/ million wi? E> o 3.1% osx J +12.3% 414.9% | = 19%, | 5 32 49.5% eer 29 29 2Q17 1Q18 2Qi8 2Q17 1Q18 2al8 Other income Other expenses S/ million S/ million -82.
Slide 23: Strong profitability in 2Q18 with 26.5% ROAE
Strong profitability in 2Q18 with 26.5% ROAE IFRS® AUM + Deposits Loans S/ million S/ million -2.1% -23.4% 1,651 13,999 +4.2% 2,167 -2.6% 11,831 288 2Qi17 1Q18 2Q18 2Qi17 1Q18 2Q18 @ Deposits m@ AUM Revenues Net profit S/ million S/ million Fee” ED Cox) @ none ED &> & ‘AUMS [=3.2% | [18.0% | 75 7 56
Slide 24: Summary
Summary
Slide 25: Takeaways
Takeaways * Recordearnings of S/289 millionin 2Q18 Interbank * Loan growth accelerated to 14% YoY, supported by a 15% YoY growthin credit cards 22% QoQ growth in gross premiums plus collections Inte rseguro * 15% ROAE, excluding one-time adjustment of S/-145 MM due to the adoption of new mortality t
Slide 26: Appendix
Appendix EJ Intercorp Financial Services |
Slide 27: IFS 2Q18 Statement of financial position
IFS 2Q18 Statement of financial position IFRS® Intercorp Financial Services' Statement of financial position S/ million %chg 30.06.2017 31.03.2018 30.06.2018 30.06.18/ (IAS 39) (IFRS 9) (IFRS 9) 31.03.18 Assets Cash and due from banks and inter-bank funds 9,975.3 9,795.7 7,941.3 -18.9% Total investm
Slide 28: IFS 2Q18 P&L
IFS 2Q18 P&L IFRS® Intercorp Financial Services' P&L statement S/ million %chg %chg 2Q17 1Q18 2Q18 QoQ YoY Interest and similar income 919.3 1,036.3 1,070.2 3.3% 16.4% Interest and similar expense -277.2 -266.9 -286.0 7.2% 3.2% Net interest and similar income 642.1 769.4 784.2 1.9% 22.1% Provision f
Slide 29: Interbank 2Q18 P&L
0) @ @ Interbank 2Q18 P&L IFRS Banking Segment's P&L Statement S/ million %chE %chE 2Q17 1Q18 2Q18 QoQ YoY Interest and similar income 845.1 843.6 880.3 44% 4.2% Interest and similar expenses -260.6 -242.4 -260.9 77% 0.1% Net interest and similar income 584.6 601.3 619.4 3.0% 6.0% Provision for loan
Slide 30: Interbank's net profit IFRS vs. Local GAAP
Interbank’s net profit IFRS vs. Local GAAP Net profit — IFRS Net profit bridge from Local GAAP to IFRS (2Q18) S/ million S/ million Retail: S/ 18.2MM Higher 438.3% Commercial: deferred oMM jcome tax 12 aly BBs 246 56 2Q17 1A18 2Q18 : of fees on loans, from interest income to fee income Net profit —
Slide 31: Interseguro 2Q18 P&L
Interseguro 2Q18 P&L IFRS® Interseguro's P&L Statement S/ million %chg %chg 2Q17 1Q18 2Q18 QoQ YoY Interest and similar income 59.4 157.6 157.5 -0.1% 165.0% Interest and similar expenses 3.1 -13.7 -12.9 5.9% nm. Net Interest and similar income 56.3 143.9 144.6 0.5% 156.7% Fee income from financial s
Slide 32: Interseguro's net profit IFRS vs. Local GAAP
Interseguro’s net profit IFRS vs. Local GAAP Net profit — IFRS Net profit bridge from Local GAAP to IFRS (2Q18) S/ million S/ million +103.3% 4.6% Different 15 a attributable Dnt De expenses related . tothe acauisition Use of different 14 145 of SSura ablesto 2017 14818 2ars Net profit — Local GAAP
Slide 33: Inteligo 2Q18 P&L
Inteligo 2Q18 P&L IFRS Wealth Management Segment's P&L Statement S/million %chg %chg 2Q17 1Q18 2Q18 QoQ YoY Interest and similar income 39.2 33.2 39.5 19.2% 0.8% Interest and similar expenses -14.2 -9.1 -10.8 18.4% -24.0% Net interest and similar income 25.0 24.0 28.7 19.5% 14.9% Provision for loan
Slide 34: Intercorp Financial Services
(J Intercorp Financial Services
Intercorp Financial Services — Q2 2018 Earnings Presentation on 6ix