Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Investor Presentation (July 2022)
52 slides from Intercorp Financial Services's investor presentation, July 2022
Slide 1: Investor Presentation July 2022
Investor Presentation July 2022
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
Leading financial services platform with solid balance sheet and diversified source of dividends Financial highlights Four key businesses 99.3% 99.8% 100.0% Universal bank with Insurance company Advisory firm for As of Mar22 S/ mm | US$ mm strategic focus on focused on life & the emerging retail ann
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$ 8.5bn Revenues in 2021 ~3.9% of Peru 2021 GDP Education Other (1) Source: Company information and BCRP. 4 1) Related companies excluding Aviva and Urbi.
Slide 6: Consistently delivering strong return to our shareholders
Consistently delivering strong return to our shareholders Dividends declared (1) (S/ mm) (S/ mm) Net profit (2) 875 902 1,040 1,222 265 1,201 Net profit (2) 86 104 361 436 257 304 Payout Ratio 45% 45% 45% 25% n.m. 50% Payout Ratio 50% 96% 68% 46% 78% 66% 245 600 200 200 202 406 467 394 302 100 43 n.
Slide 7: Solid capital ratios at all IFS' regulated companies
Solid capital ratios at all IFS’ regulated companies 165.7% 144.5% 152.8% 152.2% Banking System 15.1% 15.1% 14.9% 15.1% 100.0% regulatory TCR minimum Considering dividends distributed in 17.0% Mar22 15.9% 12.5% 2019 2020 2021 Mar22 15.2% 15.5% 11.6% 11.5% 10.9% Solvency ratio 9.0% 17.0% 15.9% regula
Slide 8: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 9: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 10: Volatile macro and political scenario
1 Volatile macro and political scenario Interest rates USD/PEN (%) 4.13 Policy rate 10Y Sovereign rate 7.8 6.4 6.6 5.9 4.9 5.4 3.7 3.83 5.50 4.00 2.50 3.63 1.00 0.25 0.25 0.25 Jan21 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Jan21 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Inflation Expectations on economic activ
Slide 11: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 12: Solid performance in consumer finance and SME
Solid performance in consumer finance and SME 2 Indicators, credit cards & personal loans up 41% YoY Credit cards turnover Credit card sales Credit cards & personal loans balances S/ billion Thousand units S/ million +87% +92% +41% 3.6 92 90 3.4 8,145 7,472 5,778 1.9 47 1Q21 4Q21 1Q22 1Q21 4Q21 1Q22
Slide 13: Double digit growth in NII and fee income
2 Double digit growth in NII and fee income Interbank – Revenue bridge from 1Q21 to 1Q22 S/ million % Chg +15.6% +14.3% -39.8% +5.1% +16.5% YoY YoY Excl. 1Q21 extraord. gain on investments +23 +101 -74 Excl. 1Q21 Interest on Fees from extraord. consumer credit card gain on loans services 1,042 inves
Slide 14: Shift in loan mix and higher rates driving NIM
Shift in loan mix and higher rates driving NIM, 2 reaching 4.5% in 1Q22 Performing loans breakdown NIM and risk-adjusted NIM Credit cards & personal loans Payroll deduction loans Mortgages Commercial Reactiva NIM Risk-adjusted NIM Mar22 9% 9% 4.9% 16% 4.4% 4.5% 42% 39% 3.7% 39% 3.6% 3.2%(1) 21% 2.6%
Slide 15: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 16: Consistent credit quality metrics, CoR at 1.4%
3 Consistent credit quality metrics, CoR at 1.4% Interbank - Cost of risk (1) Interbank – Non performing loans NPL 213% 159% 169% FY19: 158% FY19: 8.9% FY19: 2.5% coverage ratio 1.8% 10.8% 9.1% 9.6% 1.4% FY19: 2.2% 1.9%(1) 3.1% 3.1% 2.9% n.m. 1Q21 4Q21 1Q22 1Q21 4Q21 1Q22 (2) (S2+S3) ratio S3 NPL ra
Slide 17: Rescheduled loans decreased 55% from peak
3 Rescheduled loans decreased 55% from peak Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 240 (Thousand) Clients 343 459 249 Rescheduled 34% 43% (Thousand) 19% balance (%) -51% Mar22/Jun20 Rescheduled 8.6 30% 31% 14% 6.9 balance (%) 4.2 12.
Slide 18: Reactiva Peru loan balances down 34% YoY
Reactiva Peru loan balances down 34% YoY, 3 representing 9% of total portfolio Reactiva Peru loan balances by segment S/ million, Local GAAP -34% 1Q22 Segment %chg YoY 6,348 107 485 Corporate -56% 4,896 272 52 4,194 214 77 3,644 Mid-sized -34% 2,808 2,402 SME -29% 2,113 1,764 1,501 Total -34% 1Q21 4
Slide 19: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 20: ROIP impacted by market conditions
ROIP impacted by market conditions 4 ROIP evolution 7.4% 3-year 3-year average 12.1% average 6.0% 6.4% 10.4% 5.9% 10.3% 5.1% 8.8% -1.1% 2019 2020 2021 1Q22 2019 2020 2021 1Q22 19
Slide 21: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 22: Consolidating "Two-tier" digital strategy to foster growth
“Two-tier” digital strategy to foster growth 5 1. Digitalization +20 NPS Digital customers 2. New growth vs. non-digital customers 100% digital services points (Mar22) Payments | Neobank | Open Banking Consolidating growth Piggy bank My Finances Rewards program 100% digital Digital wallet P2P & QR c
Slide 23: Digitalization indicators continue to improve
Digitalization indicators continue to improve 5 1. Digitalization 100% digital services IBK - Digital customers (1) IBK - Digital sales IBK - Personalized campaigns % of digital customers % of products sold digitally % of campaigns 65% 65% 61% 25% 23% 58% 60% 55% 11% Mar21 Dic21 Mar22 Mar21 Dic21 Ma
Slide 24: Tunki, our ally to bank the unbanked
Tunki, our ally to bank the unbanked 5 2. New growth Connects the banked + unbanked through plin Tunki Users Micromerchants Million Thousand 1.0 1.6 1.8 2x 314 368 5x Users 68 Micromerchants Mar21 Dic21 Mar22 Mar21 Dic21 Mar22 Transactions Strategic rationale ▪ Enlarging ecosystem to the unbanked an
Slide 25: Plin, ~7 million users and growing
Plin, ~7 million users and growing 5 2. New growth Plin Users(1) IBK - Micromerchants Million Thousand IBK’s MS 40% 41% 42% ~7.0 3X Transactions(1) 5.7 6.6 MM 568 672 (Mar22 vs. Mar21) 3.2 (Apr22) 260 Mar21 Dic21 Mar22 Mar21 Dic21 Mar22 Daniel Jiménez Talledo 2x Users 3x Micromerchants Partners Stra
Slide 26: Early stage initiatives
Early stage initiatives 5 2. New growth Credit cards NPS Users Share of wallet Thousand Thousand % 6% 21 60 66 49 65 K NPS 3% (Apr22) 8 3 (Mar-22) points Mar21 Dic21 Mar22 Mar21 Mar22 Mar21 Mar22 3x Users 2x Share of wallet 25
Slide 27: Two-tier digital strategy allowed us to grow our customer base ~20%
Our “two-tier” digital strategy allowed us to grow our customer base ~20% 5 IBK - Retail customers IBK – Digital customers IBK - Commercial customers Million Million Thousand 4.7 1.8 132 4.5 1.7 127 4.0 109 1.4 Mar21 Dic21 Mar22 Mar21 Dic21 Mar22 Mar21 Dic21 Mar22 +19% YoY +34% YoY +21% YoY (Mar22)
Slide 28: Key messages
Key messages 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 29: Sustainability operating framework and updates
Sustainability operating framework and updates 6 Strategic Goal To create sustainable value by incorporating responsible management for the environment and society and acting under robust corporate governance policies Sustainability as an Collaborative agenda Business model with IFS recognized as a
Slide 30: Takeaways
Takeaways 1 Volatile macro and political scenario 2 Strong recovery in core banking business 3 Consistent credit quality metrics 4 Other income impacted by mark-to-market 5 Update on “two-tier” digital strategy 6 Update on sustainability
Slide 31: Solid start of the year for IFS
Solid start of the year for IFS Capital Profitability Loan growth 2022 1Q22 2022 1Q22 High single digit growth in IBK TCR >15% 15.5% total loans led by double IFS ROE >16% 17.4% digit growth in consumer loans(1) IBK CET1 >11% 10.9% 1Q22 growth YoY To remain at sound levels Continued path to recovery
Slide 32: 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 33: 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 34: Strategic focus on consumer loans
Strategic focus on consumer loans Interbank Distinctive loan breakdown… …when compared to the banking system Gross loans breakdown (as of March 2022) Gross loans breakdown (as of March 2022) Banking System Commercial Commercial 48.3% 66.5% Mortgages Mortgages 39.7% Consumer Consumer loans Retail 48.
Slide 35: Solid risk management capabilities
Solid risk management capabilities Interbank Better asset quality than the system despite focus on retail Best total PDL ratio among peers PDL ratio evolution PDL ratio as of March 2022 Interbank System Commercial loans Retail loans Total loans 3.8% 3.8% 3.8% BBVA BBVA 4.5% 2.6% 4.0% 3.0% BCP BCP 4.
Slide 36: Diversified funding base with strength in retail deposits
Diversified funding base with strength in retail deposits Interbank Significant deposits base A growing retail deposit-gathering franchise Funding base breakdown (as of March 2022) Total retail deposits growth evolution Other MS 2016 12.8% MS Mar22 14.8% 5.4% Bonds 14.3% Demand Savings 11.4% 10.9% 2
Slide 37: 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 2022) Insurance premiums and collections breakdown (as of March 2022) Insurance System Regulated Other life 14
Slide 38: Annuities leading recovery in premiums
Annuities leading recovery in premiums Interseguro Strong performance in most products Outgrowing the overall insurance industry Gross premiums and collections by business unit (S/ mm) YoY growth in premiums (as of March 2022) Regulated Private Annuities Individual Life Other Life P&C D&S Annuities
Slide 39: 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 CAGR: 12.1% 22,981 22,345 0.9% 0.9% 20,989 21,310 0.8% 0.8% 18,293 0.7% 2019 2020 2021 1Q21 1Q22 2019 2020 2021 1Q21 1Q22 Diversified revenue g
Slide 40: Expense growth driven by recovery in activity and digital investments
Expense growth driven by recovery in activity and digital investments Optimizing our distribution channels Variable expenses drive costs higher Units Other expenses (S/ mm) 2019 Mar22 % Change Financial 2,263 255 182 -29% stores 1,978 1,911 ATMs 1,598 1,563 -2% Correspondent 4,183 5,945 +42% agents
Slide 41: 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 42: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by appropriate funding IFS Total gross loans Total deposits S/ mm S/ mm CAGR +8.1% CAGR +13.3% 43,082 44,688 43,094 43,934 47,149 48,898 49,396 46,503 38,257 38,093 2019 2020 2021 1Q21 1Q22 2019 2020 2021 1Q21 1Q22 AUM evolution Net shareholders’ equity S/ mm S/ mm
Slide 43: Growth in total revenues driven by NIM recovery
Growth in total revenues driven by NIM recovery IFS Total revenues (1) NIM S/ mm CAGR +4.9% 5,922 5,384(2) 5,488 5.3%(2) 4.5% 4.5% 4.1% 3.8% 1,546 1,430 2019 2020 2021 1Q21 1Q22 2019 2020 2021 1Q21 1Q22 Net profit ROAE S/ mm CAGR +0.8% 23.7% 1,479(2) 1,504(3) 18.6%(2) 17.4% 16.3%(3) 529 384 403 4.5%
Slide 44: 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 45: 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 20 years 2011 - 202
Slide 46: Strong corporate governance
Strong corporate governance Board of Directors BOD with majority of independent members Carlos Rodríguez-Pastor IFS: 3 out of 7 Chairman Strong corporate Felipe Morris Fernando Zavala governance Director Director Highly supervised related party exposure, well below regulatory limits Alfonso Bustaman
Slide 47: 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 48: Appendix
Cd Intercorp Financial Services oooeeen | Appendix
Slide 49: Resilient financial system
Resilient financial system Steady loan growth Profitability recovering after COVID-19 pandemic Banking system gross loans (S/ bn) Banking system net profit (S/ mm) ROAE 18.5% 4.0% 13.3% 7.4% 17.8% CAGR +10.6% CAGR 2019-21 350 349 326 326 9,082 286 14.8% 7,218 222 238 222 232 181 2,112 2,506 3.0% 988
Slide 50: IFS income statement – IFRS
IFS income statement – IFRS % chg % chg % chg Incom e S t a t e m e nt ( S / m m ) 2019 2020 2021 1Q21 1Q22 '20/ '19 '21/ '20 1Q22/ 1Q21 Interest and similar income 4,847.2 4,665.0 4,605.6 1,085.7 1,248.1 (3.8%) (1.3%) 15.0% Interest and similar expenses (1,424.0) (1,192.3) (1,057.9) (251.8) (303.4)
Slide 51: IFS balance sheet – IFRS
IFS balance sheet – IFRS % chg % chg % chg Ba la nce S he e t ( S / m m ) 2019 2020 2021 1Q21 1Q22 '20/ '19 '21/ '20 1Q22/ 1Q21 Cash and due from banks 11,128.9 18,765.5 17,104.5 19,260.5 13,440.8 68.6% (8.9%) (30.2%) Inter-bank funds 85.0 18.1 30.0 0.0 250.0 (78.7%) 65.7% n.m. Financial investments
Slide 52: Slide 52
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