Banco De Credito E Inversiones · BCS:BCI
Banco De Credito E Inversiones — Q2 2020 Earnings Presentation
36 slides from Banco De Credito E Inversiones's earnings presentation, August 2020
Slide 1: Investor Relations Department August 2020
Investor Relations Department | Email: Investor_Relations_Bci@Bci.cl August 2020
Slide 2: Chilean financial system
Bci Investor Relations Chilean financial system
Slide 3: …with a robust financial system…
1 …with a robust financial system… CHILE. Evolution of GDP growth projections Total loans in the banking system1 (US$bn) 2. 20% 5 NPL 254.7 2. 15% 239.2 217.5 2. 10% 0 184.4 192.3 2.07% 2. 05% 174.7 2.02% 2. 00% -5 1. 95% 1.93% 1. 90% 1.90% -10 1. 85% 1.86% 1.85% 1. 80% -15 1. 75% 2015 2016 2017 201
Slide 4: Bci at a glance
Bci Investor Relations Bci at a glance
Slide 5: Leading financial institution in Chile in Loans…
Leading financial institution in Chile in Loans… Profitable and financially sound Diversified business model as of June 2020 Largest bank in Chile (total loans) US$74.12 bn US$47.3 bn 3rd Largest Florida-based bank (+41.3% YoY) (+24.1% YoY) Total assets Total loans CNB : 24% Assets Bci Miami : 4% As
Slide 6: …with a successful strategy supported by its strong corporate governance
…with a successful strategy supported by its strong corporate governance Long-term support from its controlling shareholders… …and strong corporate governance Private Board of Directors is composed by experts in various pension fields, academics, economists, bankers and individuals funds connected w
Slide 7: …Balance sheet
…Balance sheet CAGR US$ million (*) 2016 2017 2018 2019 2Q 2019 2Q 2020 %D 2016-2019 Cash 1,921 1,821 2,507 3,840 25.97% 2,493 5,117 105.26% Securities 4,619 5,760 6,418 7,587 17.99% 6,366 10,094 58.57% Loans 27,005 29,601 36,380 41,000 14.93% 37,458 46,409 23.90% Other Financial Instruments 371 270
Slide 8: …Financial results
…Financial results CAGR US$ million (*) 2016 2017 2018 2019 2Q 2019 2Q 2020 %D 2016-2019 Net Interest Income 1,102 1,138 1,315 1,609 13.45% 402 437 8.75% Net Service Fee Income 331 327 373 428 9.00% 104 94 -9.95% Operating Income 1,433 1,466 1,688 2,037 12.45% 506 531 4.89% Other Operating Income 13
Slide 9: …and where Bci has a relevant position in the market…
…and where Bci is has a relevant position in the market… Chilean banking system benchmark (local) Chilean banking system benchmark (consolidated) In US$mm, as of June 2020 In US$mm, as of June 2020 Other Other banks banks (12) (12) 14.5% 18.4% 14.3% 16.1% 13.8% 10.1% 12.8% 18.2% 18.2% 14.0% 13.8% 12
Slide 10: Domestic loan growth
Domestic loan growth Total loans (US$mm) Commercial & Interbank loans (US$mm) 24.1% 32,091 47,334 32.3% 41,814 15.1% 38,149 14.0% 26,872 21,501 37,058 31,591 24,255 23,590 29,166 18,792 30,090 28,301 27,456 18,148 19,438 16,741 17,137 24,690 23,058 14,904 14,619 10,591 12,822 8,081 8,757 10,223 8,98
Slide 11: Successful organic growth in Chile…
Successful organic growth in Chile… Return on average Equity (ROAE)1 Total loans market share - local2 (%) As of June 2020 Chile 13.9% 15.6% 8.7% 8.5% 11.2% 19.0% 18.2% 17.0% (19.9%) 16.0% +164 bps of 15.0% market share 14.6% Return on average assets (ROAA)1 as of June 2020 13.7% 1.3% 13.0% 0.9% 0.6
Slide 12: …with diversified and low funding cost…
…with diversified and low funding cost… In terms of maturity, currency and geography Funding Sources Breakdown by type1 Other Long term funding composed primarily of UF local bonds Liabilities Demand in the Chilean market, complemented by other 20.5% Equity deposits 5.2% international issuances, thr
Slide 13: …while maintaining prudent risk
…while maintaining prudent risk Highlights Cost of risk index (Allowances / Average Gross Loans) Bci's asset quality is supported by proactive risk management and 3.10% monitoring, as well as a continued focus 3.1% 3.09% Due to all these efforts, our risk ratios have remained at healthy 2.90% levels
Slide 14: Non-Performing Loans (NPLs)
Non-Performing Loans (NPLs) NPL Ratio (NPLs/Total Loans) NPL Ratio (Commercial & Interbank Loans) 1.65% 1.58% 1.42% 1.40% 1.41% 1.36% 1.36% 1.37% 1.31% 1.24% 1.19% 1.12% 2016 2017 2018 2019 2Q2019 2Q2020 2016 2017 2018 2019 2Q2019 2Q2020 NPL Ratio (Consumer Loans) NPL Ratio (Mortgage Loans) 3.04% 2.
Slide 15: Financial Services
Validar D Financial Services Total Loans (US MM$) 873.3 648.8 NPL Ratio 4.25% 4.92% Note: Figures are converted to US$ using an FX of USD/CLP of 821.23 (July1st 2020) 15
Slide 16: Bci has implemented several initiatives that prepare it for the future
Bci has implemented several initiatives that prepare it for the future Our strategy is rapidly embracing digital transformation MACH: disruptive innovation rapidly penetrating the market 2,320,209 2,082,352 1,826,061 1,666,833 1,673,657 1,448,808 1,444,127 1,471,934 1,275,741 1,176,875 1,033,189 939
Slide 17: City National Bank of Florida
Bci Investor Relations City National Bank of Florida 17 17
Slide 18: Executive Summary
Executive Summary Strong Q2 loan growth primarily due to $1.8B in PPP loans Second Quarter Client deposits increased by $1.5B in Q2 with PPP loan fundings contributing ≈$867MM of the Results increase Net income of $25.1MM has declined by $7.7MM QoQ due to $26MM of loan loss provisions recorded The B
Slide 19: Our COVID-19 Response has been robust & comprehensive
Our COVID-19 Response has been robust & comprehensive Prioritized seamless continuity of business & the safety & financial needs of employees, customers & communities Operational Resilience Customer Support Employee Programs Business continuity plan All branches remain Enhanced health benefits
Slide 20: Our digital capabilities have enabled our success
Our digital capabilities have enabled our success % increase QoQ in registered online 22,000 number of members 22% 24% + customers enrolled QoQ in Bill Pay Nearly 80% of PPP loans 80% members were 9,000+ processed remotely active in June Users transferred MSLP loan 1,500+ money via Zelle and 600+ ap
Slide 21: Balance Sheet Consolidated
Balance Sheet Consolidated $ Var % Var $ Var % Var Jun-19 Mar-20 Jun-20 $236MM decline in C&I BALANCE SHEET ($ millions) QoQ QoQ YoY YoY Commercial & Industrial $2,112 $2,233 $1,997 ($236) -10.6% ($115) -5.4% loans primarily due to PPP Loans $0 $0 $1,822 $1,822 0.0% $1,822 0.0% Commercial Mortgages
Slide 22: Loans & deposits both increased significantly in the 2nd quarter
Loans & deposits both increased significantly in the 2nd quarter Total Loans & Leases Total Deposits $1.4B increase in deposits realized despite $134MM reduction in brokered deposits Note: Information in millions Source: City National Bank 22
Slide 23: Our deposit mix continues to improve with DDAs increasing
Our deposit mix continues to improve with DDAs increasing Total Deposits ($) $11,806 $11,559 $11,854 $11,891 $13,266 We reduced our cost of deposits by 51 bps QoQ Note: Information in millions Source: City National Bank 23
Slide 24: Cash and investments represent 22% of our total assets
Cash and investments represent 22% of our total assets Total Assets Total Investments Jun-20 Yield on Investments 1.90% Duration 1.5 Unrealized Gains / (Losses) 73.5 Investments / Total Assets (%) 19.0% Source: City National Bank 24
Slide 25: We have a liquid balance sheet with ample off-balance sheet sources
We have a liquid balance sheet with ample off-balance sheet sources Our liquidity is strong with $7.3B of Total Liquidity Sources The Bank has ample On Balance Sheet Liquidity at 14.73% as of 6/30/2020 Unused availability at FHLB is over $1.3 billion, which can be drawn at an instant An additional $
Slide 26: Our significant excess capital differentiates CNB from its US peers
Our significant excess capital differentiates CNB from its US peers Additional $1.4B in average assets in Q2 related to PPP loans decreased the Bank’s actual leverage ratio by 86bps We are entering this period of uncertainty with a significant capital buffer Excess capital will enable us to increase
Slide 27: We are entering this period of uncertainty with exceptional asset quality
We are entering this period of uncertainty with exceptional asset quality NPLs are at historically low … and as a result the Bank has levels… incurred minimal charge-offs Nonaccruals Breakdown Note: NPL Ratio excludes PPP loans Source: City National Bank Data as of June 30, 2020 (in 000’s) 27
Slide 28: Our loan portfolio is substantially real estate secured with low LTVs
Our loan portfolio is substantially real estate secured with low LTVs Note: Excludes PPP loans Source: City National Bank 28
Slide 29: Deferments are declining rapidly
Deferments are declining rapidly Deferments are declining… …& a significant amount of deferrals are expiring Note: Information in millions Deferrals expiration schedule as of July 16th Source: City National Bank 29
Slide 30: Deferments are down to 14% of total loans, excluding PPP
Deferments are down to 14% of total loans, excluding PPP # of Outstanding Balance Loan Commitment % of Total % with Loans @ 7/16/2020 @ 7/16/2020 Pool Recourse COMMERCIAL MORTGAGES 358 $ 1,035,995 $ 1,044,515 19.84% 80.09% COMMERCIAL 144 $ 178,700 $ 185,660 8.99% 76.00% RESIDENTIAL MORTGAGES 486 $ 2
Slide 31: We are proactively provisioning for loan losses due to COVID-19
We are proactively provisioning for loan losses due to COVID-19 The Bank’s ALLL methodology is under the incurred loss 26,000 model, not CECL Provisio n Note: Information in 000’s Source: City National Bank 31
Slide 32: Consolidated Income Statement
Consolidated Income Statement 2nd Qtr 1st Qtr 2nd Qtr $ Var % Var YTD YTD $ Var % Var Increase in net interest INCOME STATEMENT ($ millions) 2019 2020 2020 QoQ 2019 2020 YoY QoQ YoY income QoQ of (+) Net Interest Income $100.8 $105.3 $110.5 $5.3 5.0% $203.6 $215.8 $12.2 6.0% $5.3MM is (+) Non-Intere
Slide 33: YTD Core Earnings
YTD Core Earnings Core Earnings 4% Increase YoY Note: Core Earnings = Net Income before taxes, provisions for loan and lease losses, amortization of intangibles & other non-recurring items Source: City National Bank 33
Slide 34: We have successfully been able to increase our net-interest income
We have successfully been able to increase our net-interest income Net Interest income has increased as a % of operating income from 85% to 88% YoY Source: City National Bank 34
Slide 35: Key Metrics
Key Metrics 2014 2015 2016 2017 2018 2019 2020 2Q 2020 Loans & Leases/ Assets 61.90% 62.40% 64.50% 69.44% 70.57% 68.96% 71.66% 71.66% Loans / Deposits 79.60% 90.10% 95.00% 90.28% 89.57% 92.15% 94.25% 94.25% DDA / Deposits 44.00% 43.30% 37.70% 32.16% 28.77% 29.87% 33.67% 33.67% ROAA 0.85% 0.80% 0.96%
Slide 36: Forward-looking statements disclaimer
This presentation contains forward-looking statements in various places throughout therein, related to, without limitation, our future business development. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend
Banco de Crédito e Inversiones (Bci) — Q2 2020 Earnings Presentation on 6ix