Credito Real Sab De Cv Sofom Enr · BMV:CREAL
Credito Real Sab De Cv Sofom Enr — Crédito Real — Q3 2018 Earnings Presentation
24 slides from Credito Real Sab De Cv Sofom Enr's earnings presentation, October 2018
Slide 1: 3Q18 Investor Presentation
3Q18 INVESTOR PRESENTATION CONTACT Renata González Muñoz +52 (55) 5228 9753 rgonzalez@creditoreal.com.mx Investor Relations +52 (55) 5340 5200 Ext. 2182 investor_relations@creditoreal.com.mx
Slide 2: In a Nutshell…
In a Nutshell… Credito Real operates with stability and high profitability in segments where traditional banks are not efficient. STRATEGIC ALLIANCES SELECTIVE ORIGINATION • Extensive commercial presence • Centralized system of analysis, giving greater control using an aligned distributor base • Ana
Slide 3: Where we are
Where we are Loan Portfolio Environment Performance Solidity • Payroll • Stabilization of interest rates • Economies of scale • Portfolio > Ps. 35.0 billion • Instacredit • Stable growth • Centralized strategy • NPL: 2.1% • Used Cars • Solid & resilient credit demand • New markets (CR & USA) • Solid
Slide 4: History
History First issuance in the local market of 1,000 million MXN. Acquisition of 65% of AFS. The first issuance for MXP Acceptance shares. 800 million under securitization program. Acquisition of 55.21% of Resuelve. Award for excellence in Corporate Governance Introduction of New corporate image Inst
Slide 5: Credito Real is well-positioned to handle arising challenges in the market
Credito Real is well-positioned to handle arising challenges in the market Market Changes Credito Real’s Outlook • Increase in interest rates • 41.5% of total debt at a fixed rate • Increased inflationary pressures • Minimal effect due to the high quality of our portfolio • FX movements • Low exposu
Slide 6: Long-Term Portfolio Growth
Long-Term Portfolio Growth Geographic Concentration of Total Portfolio (Ps. Million) Mexico Internacional • By 2022, we estimate to double the size of portfolio.1 15-20% • 50% of total loan portfolio should be in Mexico and 50% should be international. Ps. 56,000 • Growth driven by organic improveme
Slide 7: Payroll Loans
Payroll Loans NPL Segment statistics 2.4% 2.3% Average loan amount– Ps. 60,513 Average term- 48 months 2.0% 1.9% Average interest rate– 50% Yield – 27% 1.5% 1.5% Portfolio Growth 1.3% 1.2% 1.2% 1.2% $24,195 $22,704 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 $21,227 One of the lowest NPLs in t
Slide 8: Instacredit
Instacredit As of 3Q18: Portfolio reached Ps. 4,400 million, increasing 3.2% YoY Products Personal Used cars Small business Home equity $4,613 $4,679 % Mix Portfolio $4,391 $4,406 $4,400 48.0% 42.1% 7.0% 2.9% $4,213 $4,264 Customers $3,959 125,739 25,414 28,775 795 $3,633 Avg. Loan Amount ($) $812 $
Slide 9: Used Cars
Used Cars NPL Geographical Concentration of Revenue Cars MX Cars US 3.9% 3.7% 2.9% 2.9% 35.3% 2.6% 1.6% 1.5% 1.4% 1.4% 64.7% 1.3% 1.2% 1.2% 1.4% 0.6% 0.6% 0.7% 0.7% 0.5% 0.5% 0.4% 0.5% 0.3% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Cars US Cars MX Outstands the high-quality of the Used
Slide 10: Current Businesses Growth Strategy
Current Businesses Growth Strategy Yield 3Q18 Yield 2022 • Consolidated growth Payroll 26.5% 35% • Effect of acquiring 51% of Credito Maestro US: 23.4% Used cars • Enlarge dealers network in Mexico and US > 30% MX: 33.6% • Efficiency in cost of funding and general expenses Instacredit 54.1% 60% • Ex
Slide 11: Diversified Funding Sources
Diversified Funding Sources Debt profile Cost of funding Ps. 24,692.7 Ps. 27,865.6 Average TIIE Spread 2015 3.3% 3.0% 6.3% 3.1% 14.0% Securitization 2016 4.5% 3.7% 8.2% Local Notes 41.5% 39.1% Credit Lines 2017 7.0% 4.4% 11.4% Senior Notes 55.4% 3Q17 7.4% 3.8% 11.2% 46.9% 3Q18 8.1% 3.9% 12.0% 3Q 17
Slide 12: Credito Real´s Maturity Profile
Credito Real´s Maturity Profile $22 $1,955 $4,306 $11,794 $244 $510 $267 $5,888 $3,041 $3,401 $1,713 $267 $579 2018 2019 2020 2021 2022 2023 Swiss Bond Credit Lines Senior Notes Securitization Subordinated Notes Source: Credito Real, as of 3Q18. Figures are expressed in Ps. Million. (1) All the figu
Slide 13: 3Q18 Results
3Q18 Results Loan Portfolio NIM % CAGR ’15–’17: 28.4% 34,946 21.0% 21.2% 22.0% 21.5% 29,015 20.2% 26,678 23,927 17,610 2015 2016 2017 3Q17 3Q18 2015 2016 2017 3Q17 3Q18 Interest income Net income CAGR ’15–’17: 40.9% CAGR ’15–’17: 10.1% 8,463 1,661 1,542 6,665 1,371 4,264 2,562 505 2,066 403 2015 201
Slide 14: 3Q18 Results
3Q18 Results Capitalization Efficiency 50.9% Excluding 52.1% 50.2% Subordinated 49.0% 43.8% 45.4% 38.1% 36.4% Perpetual Notes 38.1% 31.8% 35.2% 35.9% 3.1% 2015 2016 2017 3Q17 3Q18 2015 2016 2017 3Q17 3Q18 ROAA ROAE Excluding Subordinated 6.0% 22.2% Perpetual Notes 5.0% 18.4% 4.5% 4.6% 4.4% 17.5% 17.
Slide 15: Outstanding asset quality
Outstanding asset quality Stable levels of NPLs with sufficient reserves1 NPL Reserves / Total loan portfolio 3.9% 3.8% 3.7% 3.7% 3.7% 3.7% 3.5% 3.4% 3.4% 3.2% 3.1% 2.8% 2.8% 2.7% 2.5% 2.4% 2.3% 2.3% 2.2% 2.2% 2.1% 2.1% 2.1% 2.0% 1.9% 1.9% 3Q 15 4Q 15 1Q 16 2Q 16 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 4Q 17
Slide 16: Corporate Governance
Corporate Governance Proprietary members Shareholders structure Ángel Francisco Romanos Berrondo Chairman Credito Real CEO José Luis Berrondo Ávalos Member Non-executive 8% Float Eduardo Berrondo Ávalos Member Non-executive 24% Berrondo Family Moisés Rabinovitz Ohrenstein Independent Member Non-exec
Slide 17: Sustainability Strategy
Sustainability Strategy CORPORATE GOVERNANCE • Board Structure • Responsibilities and Committees • Stakeholders’ value • Philosophy of Transparency SOCIAL RESPONSABILITY • Distinctive ESR (Corporate Social Responsibility) • Join the United Nation’s Global Compact • Corporate citizenship and philanth
Slide 18: Transparency in information
Transparency in information • To prevent and to fight acts of corruption • To ensure that all of the staff and third parties, with whom we do business have an awareness of and comply with the applicable laws and regulations which relate to prevent Anti-corruption Policy (Foreign different forms of c
Slide 19: Profit & Loss
Profit & Loss Ps. million 3Q18 3Q17 % Var. 3Q18 (million YTD'18 YTD'17 % Var. YTD'18 dollars) (million dollars) Interest Income 2,562.0 2,065.8 24.0 136.8 7,465.7 6,110.8 22.2 398.7 Interest Expense (833.0) (669.5) 24.4 (44.5) (2,428.9) (1,924.1) 26.2 (129.7) Financial Margin 1,728.9 1,396.3 23.8 92
Slide 20: Balance Sheet
Balance Sheet Ps. million 3Q18 3Q17 Var. % 4Q17 Var. % 3Q18 (USD) Cash and cash equivalents 459.7 580.2 (20.8) 810.6 (43.3) 24.6 Investments in securities 997.7 740.9 34.7 356.3 - 53.3 Securities and derivatives transactions - - - 1,920.9 - - Total performing loan portfolio 34,210.1 26,054.7 31.3 28
Slide 21: Financial Ratios
Financial Ratios 3Q18 3Q17 % Var. YTD'18 YTD'17 % Var. Yield 29.9% 31.9% (2.0) 30.9% 32.6% (1.7) Net Interest Margin 20.2% 21.5% (1.4) 20.8% 22.3% (1.5) Return on Average Loan Portfolio 5.9% 6.2% (0.3) 5.7% 6.5% (0.8) ROAA: Return on average assets 4.4% 4.6% (0.2) 4.2% 4.6% (0.5) ROAE: Return on ave
Slide 22: Distribution Platform to Reach our Target Clientele
Distribution Platform to Reach our Target Clientele Key Subsidiaries | Ownership Distribution Presence 100% + 11 distributors + Mexico 49% + +6,000 sale representatives + Honduras Payroll 49% + 46 branches in Costa Rica + Costa Rica, (1) NA 70% + 18 branches in Nicaragua and Panama Nicaragua and Pan
Slide 23: Specialized Products to Reach our Target Segments
Specialized Products to Reach our Target Segments Portfolio Target Annual Avg. Term Avg. Loan Product Description Customers Strategy Contribution Customer Interest Rate (months) Amount (Ps$) Unionized state Payroll and federal public deductible loans 69% employees, PAYROLL 50% 48 399,836 60,513 Pens
Slide 24: Disclaimer
Disclaimer This presentation does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or