Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Investor Presentation (May 2021)
50 slides from Intercorp Financial Services's investor presentation, May 2021
Slide 1: Investor Presentation May 2021
Investor Presentation May 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 Mar21 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) MS loans (1) 9.4% 12.8% Dividends 40 89 paid (US$ mm) MS deposits (1) 9.3% 13.3% Divide
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 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 Macro recovery Strong liquidity, Ongoing improvement continues manageable dollarization in activity and solid capitalization 4 5 6 Digital trends continue Cost of risk below Continued focus to support IFS’ strategy pre COVID-19 levels on efficiency 8
Slide 10: Positive trends in GDP and public investment
1 Positive trends in GDP and public investment GDP Expectations on economic activity (YoY % Chg) (Index > 50, indicates positive sentiment) 18.2% 3 months 12 months 10.7% 3.8% 4.5% 66 65 66 0.5% 61 61 57 53 52 48 50 51 30 47 41 44 40 TB 29 U -39.1% 9 Feb20 Apr20 Dec20 Mar21 FY21(E) FY22(E) Feb20 Apr
Slide 11: Liquidity levels remain high
2 Liquidity levels remain high Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of March 31, 2021 S/ million Total LDR MS total 12.5% 13.3% 13.7% deposits Apr21 112% 91% 103% MS retail 13.7% 13.9% 14.1% 89% 90% System: deposits 95% +33.0% 46,637 44,577 35,062 Interbank BCP BBV
Slide 12: Manageable dollarization levels at Interbank
2 Manageable dollarization levels at Interbank Total loans Retail loans Commercial loans % PEN 68% 74% 84% 91% 60% 66% System 10% 6% 27% 23% 45% 37% 90% 94% 73% 77% 55% 63% 1Q16 1Q21 1Q16 1Q21 1Q16 1Q21 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Mic
Slide 13: Solid capital ratios at all IFS' segments
2 Solid capital ratios at all IFS’ segments 165.7% 162.9% 138.5% Banking System 14.3% 15.5% 16.3% 100.0% regulatory TCR minimum 17.0% 17.0% 16.1% 1Q20 4Q20 1Q21 12.0% 11.5% 11.5% Solvency ratio 10.6% regulatory minimum 16.1% 17.0% 17.0% 28.4% 29.9% 22.4% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 8.0% Total capi
Slide 14: Ongoing improvement in our core operating indicators
Ongoing improvement in our core operating 3 indicators Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 113 106 115 119 100 100 107 94 100 52 38 8 Feb20 Apr20 Dec20 Apr21 Feb20 Apr20 D
Slide 15: Strong recovery in revenues at IFS mainly due to insurance business
Strong recovery in revenues at IFS mainly due to 3 insurance business Intercorp Financial Services(1) Banking(1) S/ million S/ million +19.4% -4.1% 1,534 1,546 1,034 1,023 992 1,295 125 123 125 282 388 112 185 39 190 163 220 186 110 160 201 910 941 734 747 647 834 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 Insur
Slide 16: Continuous improvement in our digital indicators
Continuous improvement in our digital indicators 4 Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally Apr21 Apr21 Apr21 78% 57% 53% 76% 54% 54% 48% 69% 42% 38% 57% 27% Mar19 Mar20 Mar21 Mar19 M
Slide 17: Growing customer base supported by increasing 100% digital users
Growing customer base supported by increasing 100% digital users 4 Interbank - Retail customers Interbank - Commercial customers Thousand Thousand CAGR: +14.4% CAGR: +38.7% 4,024 112 3,539 3,076 76 58 Mar19 Mar20 Mar21 Mar19 Mar20 Mar21 Interbank - Retail 100% digital customers Interbank – Tunki and
Slide 18: Lower rescheduled loan balances
Lower rescheduled loan balances 5 Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 335 (Thousand) Clients 343 459 348 Rescheduled 34% 43% (Thousand) 35% balance (%) Rescheduled 8.6 30% 31% 22% 6.9 6.6 balance (%) 12.7 Apr20 Jun20 Mar21 10.9 In
Slide 19: Continued improvement in payment behavior among Interbank's retail clients
Continued improvement in payment behavior among Interbank’s retail clients 5 Retail loan balances with payments due Payment behavior S/ billion % of retail loans with 99% 99% payments due Payments of rescheduled loans 17.1 17.3 Collected Requested relief Not paid 5.7 6.3 (37%) (38%) (33%) 96.2% 97.0
Slide 20: 1.8% CoR in 1Q21, below pre COVID-19 levels
1.8% CoR in 1Q21, below pre COVID-19 levels 5 Interbank - Cost of risk Interbank - Non-performing exposure NPL coverage 136.1% 181.5% 170.5% ratio 3.4% 12.3% 3.1% 10.8% 9.7% 1.8% FY19: 2.2% 3.6% 2.7% 3.4% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 (S2+S3) ratio NPL ratio (S3 + refinanced loans) Cost of risk – Re
Slide 21: Continued focus on efficiency and branch rationalization
Continued focus on efficiency and branch rationalization 6 Efficiency ratio Interbank – Other expenses bridge from 1Q20 to 1Q21 % YoY growth by line +12.3% -19.3% +18.1% +3.8% -2.8% 38.8% 39.1% +9 36.3% 30.0% -33 +6 +5 25.4% 416 404 11.9% 10.0% n.m. 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 Techn
Slide 22: Summary & Trends
Summary & Trends 1 2 3 Macro recovery Strong liquidity, Ongoing improvement continues manageable dollarization in activity and solid capitalization 4 5 6 Digital trends continue Cost of risk below Continued focus to support IFS’ strategy pre COVID-19 levels on efficiency 21
Slide 23: Operating trends 1Q21
Operating trends 1Q21 Capital Profitability Loan growth 2021 1Q21 2021 1Q21 Slow recovery in retail, IBK TCR >15% 17.0% and decreasing volumes in IFS ROAE >14% 23.7% commercial IBK CET1 >11% 11.5% Growth YTD To remain at sound levels Above guidance Retail +0.2% / Commercial flat Revenues Cost of ris
Slide 24: Highlights: Distinctive platform to benefit from growth potential
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: Outstanding track record of sustainable growth
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 March 2021) Gross loans breakdown (as of March 2021) Banking System Commercial Commercial 68.2% 53.8% Mortgages Mortgages Consumer Consumer 41.9% loa
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 March 2021 Interbank System Commercial loans Retail loans Total loans 3.8% 3.8% 3.0% 3.0% Scotiabank Scotiabank 4.4% 5
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 Mar21 13.7% MS 2014 12.1% MS Mar21 14
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 March 2021) Insurance premiums and collections breakdown (as of March 2021) Insurance System Regulated Other life an
Slide 30: Annuities leading recovery in premiums
Annuities leading recovery in premiums Interseguro Introduction of new products to continue diversifying Outgrowing the overall insurance industry Gross premiums and collections by business unit (S/ mm) YoY growth in premiums (as of March 2021) Regulated Private Annuities Individual Life Other Life
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 22,345 20,989 0.9% 0.9% 0.9% 17,593 18,293 18,006 0.8% 2018 2019 2020 Mar20 Mar21 2018 2019 2020 3M21 Strong core revenue generation High profi
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 Disciplined cost control helps efficiency Units Other expenses (S/ mm) 2018 Apr21 % Change Financial 1,978 270 204 -24% 1,911 stores 1,837 ATMs 1,975 1,595 -19% Correspondent 2,506 3,305 +32
Slide 34: Highlights: Unique culture and commitment to ESG
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 43,094 38,257 38,263 34,055 47,149 49,396 38,093 37,569 33,682 2018 2019 2020 Mar20 Mar21 2018 2019 2020 Mar20 Mar21 AUM evolution Net shareholders’ equity S/ mm S/ mm 22,345 20,989 8,903
Slide 36: Growth in total revenues despite pressure on NIM
Growth in total revenues despite pressure on NIM IFS Total revenues (1) NIM S/ mm 5,673(4) 5.4% 5.3%(3) 5.3% 5,384(3) 4,889(2) 4.7%(4) 3.8% 1,295 1,546 2018 2019 2020 3M20 3M21 2018 2019 2020 3M20 3M21 Net profit ROAE S/ mm 1,479(3) 23.7% 1,236(2) 18.6%(2) 18.6%(3) 514(4) 529 6.0%(4) 6.6% 145 2018 2
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: 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 43: Highlights: Unique culture and commitment to ESG
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 44: Appendix
Cd Intercorp Financial Services oooeeen | Appendix
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% 3.8% 3.1% 3.8% ROAE 18.5% 18.5% 4.0% 13.7% 7.4% ratio CAGR 326 326 2018-20 286 295 271 9,082 8,220 12.4
Slide 46: Reactiva Peru Program as an opportunity in mid-sized and SME segments
Reactiva Peru Program as an opportunity to gain relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +39.6% 20,545 +10.4% 22,308 22,340 9,114 9,442 8,549 485 16,000 6,617 6,348 3,833 573 16,000 8,541 8,957 15,691 15,992 Mar20 Dec2
Slide 47: Interbank has a healthy and balanced currency mix
Interbank has a healthy and balanced currency mix Gross Loans by segment & percentage in S/ Currency mix 1Q21 92.6% 93.6% 94.0% 93.8% Gross Loans Total Assets 78.0% 77.1% USD USD 73.3% 73.8% 28.5% 22.9% 64.2% 62.8% 51.2% 49.2% S/ S/ 77.1% 2018 2019 2020 Mar21 71.5% Total Loans % in S/ Retail % in S/
Slide 48: IFS income statement – IFRS
IFS income statement – IFRS % chg Incom e S t a t e m e nt ( S / m m ) 2018 2019 2020 3M 20 3M 21 % chg '20/ '19 3M 21/ 3M 20 Interest and similar income 4,321.3 4,847.2 4,665.0 1,248.2 1,085.7 (3.8%) (13.0%) Interest and similar expenses (1,177.3) (1,424.0) (1,192.3) (338.1) (251.8) (16.3%) (25.5%)
Slide 49: IFS balance sheet – IFRS
IFS balance sheet – IFRS % chg Ba la nce S he e t ( S / m m ) 2018 2019 2020 3M 20 3M 21 % chg '20/ '19 3M 21/ 3M 20 Cash and due from banks 8,380.4 11,128.9 18,765.5 11,583.3 19,260.5 68.6% 66.3% Inter-bank funds 495.0 85.0 18.1 150.0 0.0 (78.7%) (100.0%) Financial investments 17,629.4 19,072.7 24,
Slide 50: Slide 50
Intercorp Financial Services — Investor Presentation (May 2021) on 6ix