Credito Real Sab De Cv Sofom Enr · BMV:CREAL
Credito Real Sab De Cv Sofom Enr — Crédito Real — Q4 2018 Earnings Presentation
25 slides from Credito Real Sab De Cv Sofom Enr's earnings presentation, February 2019
Slide 1: Crédito Real Corporate Presentation: 4Q Financial Update
CRÉDITO REAL Corporate Presentation 4Q Financial Update CONTACT INFORMATION 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: Crédito Real in a Nutshell
Crédito Real in a Nutshell Key Company Highlights Consistently Growing Loan Portfolio Total Loan Portfolio | MXN Bn 3% 1% + A leading specialty finance company in Mexico with a growing international $36.3 presence (United States and Central America). 6% $29.0 10% + Highly recognized by its product o
Slide 3: Corporate History
Corporate History 2017 + First issuance for 800 MXN Mn under securitization program 2015 + Award for excellence in Corporate Governance from Mexican Stock Exchange. + First issuance in the local market of + First issuance of Subordinated Perpetual Notes 1,000 MXN Mn of 230 USD Mn + Acquisition of 65
Slide 4: Key Investment Highlights
Key Investment Highlights 1 2 + Healthy loan portfolio with best-in-class + Strong Balance with Funding Flexibility, asset quality Superior Financial Performance and Quality Growth Sustainable Focus on + Unique, Flexible and Scalable Business model focused on Underserved Segments Portfolio Growth Pr
Slide 5: Products
1 Products Company’s Evolution Products Payroll CAGR 33% in 8 years 6% Mexico 68% Payroll-deducted loans to public employees and 12% pensioners Central America US SMEs 82% Non-revolving lines to fund working capital and 10% investment activities 100% Mexico Interest Income of Ps. 10,201 Used Cars MX
Slide 6: Payroll
Payroll 68% Product overview Payroll portfolio by sector Payroll portfolio | 24,807.4 MXN Mn + Personal loans granted mainly to unionized state and federal Federal Education public-sector employees, retirees and pensioners 1% 1% 2% IMSS 4% 5% Ps. 61,394 Bi-weekly Government 35% 14% Education Ministr
Slide 7: SMEs and Used Cars MX
SMEs and Used Cars MX 13% SMEs – Product overview Used Cars MX – Product overview + Providing financing sources to small and medium businesses for + Focused on financing semi-new and used cars through strategic working capital requirements and investment activities alliances with a network of distri
Slide 8: Used Cars US
Used Cars US 6% Product overview Portfolio Evolution + Commercial and financing business for used cars through +27 States 2,317.8 4% 2,5 00 our strategic alliances 2,100.4 2,030.5 2,0 00 1,838.1 3% Ps. 241,379 Monthly 1,5 00 2% 1,0 00 58 months 8,412 500 1% 0 0% 2015 2016 2017 2018 Headquarters 20%
Slide 9: Instacredit
Instacredit 12% Product overview Portfolio by product + Consumer loans, SMEs loans, auto loans and mortgage loans granted in Costa Rica, Nicaragua and Panama 14 Branches Products Personal Used Cars Small Business Home Equity Ps. 25,652 Monthly % Mix Portfolio 48.0% 41.9% 6.9% 3.2% 4 Branches Custome
Slide 10: Market opportunity – Focused on Underserved Segments (1/2)
Market opportunity – Focused on Underserved Segments(1/2) Market segments(1) Percentage of total population Players CREAL(2) 6% AAand & BB 17% C+ 11% C & C- 27% Target Market 83% D and E 56% (1) Market segments are defined based on monthly family income, in accordance with the categories established
Slide 11: Market opportunity – Focused on Underserved Segments (2/2)
Market opportunity – Focused on Underserved Segments(2/2) 192.2 Credit Penetration to Private Sector as % of GDP1 Sector Banking penetration(2) A&B 96% 112.6 105.7 C+ 83% (%) Target Market 57% 59.7 49.4 C & C- 35.5 16.1 D&E 25% U Sp B Co Ch A M Differentiators Traditional Banks Crédito Real Consumer
Slide 12: Current businesses growth strategy
Current businesses growth strategy Key Distribution Product Subsidiaries Ownership Network Annual Interest Rate Customers Avg. Loan Amount (Ps$) Strategy Yield 2022 100% 13 distributors Pensioners market development PAYROLL 49% 50% 404,066 61,394 35% +6,000 reps Focus on federal-level employees 49%
Slide 13: Profitability – Defensive Competitive Positioning
2 Profitability – Defensive Competitive Positioning Solid capital base(2) 59.3 53.7 Risk-return view(1) 43.5 51.6 50.6 Avg. 35.2% 26.5 27.0 Median: 2.4% 22.0 BanRegio 18.4 18.0 20 BanBajio 16.8 Banorte Gentera Unifin Santander 15 Crédito Real 2018 ROAE (%) Inbursa Consubanco Median: 12.9% CAME Fonac
Slide 14: Peer-superior asset quality
Peer-superior asset quality Improving levels of NPL while maintaining healthy reserves(1) 3.7% 3.0% 3.2% 2.8% 2.9% 2.4% 2.2% 2.1% 1.9% 1.7% 2014 2015 2016 2017 2018 NPL Ratio Reserves / Total Loan Portfolio Average Yield Breakdown by Product NPL Breakdown by Product(2) 65.9% Credito Real Banking Sec
Slide 15: Key financial performance
Key financial performance Loan Portfolio Interest Income CAGR ’16–’18: 23% YoY Growth: 25% CAGR ’16–’18: 24% 36,319 36,319 6.0% 10,201 YoY Growth: 14% 36.0% 10,000 29,015 29,015 8,463 30,000 8,000 23,927 6,665 34.0% 4.0% 20,000 6,000 32.0% 2.0% 4,000 2,735 10,000 2,394 30.0% 2,000 0 0.0% 0 28.0% 201
Slide 16: Key financial measures
Key financial measures Capitalization Efficiency Excluding Subordinated Perpetual Notes 49.9% 52.5% 50.9% 50.9% 50.2% 43.5% 43.5% 42.4% 38.1% 36.4% 36.4% 34.6% 31.9% 31.9% 2016 2017 2018 4Q17 4Q18 2016 2017 2018 4Q17 4Q18 ROAA ROAE 25% Excluding Subordinated Perpetual Notes 16% 5.0% 18.4% 4.5% 4.7%
Slide 17: Funding sources
3 Funding sources Capital Structure Consolidated Debt Status Adjusted Capitalization | 46,455.6 MXN Mn MXN Mn Drawn vs. Undrawn 37% Credit Lines Securitizations Senior Notes 100% = $13,874 100% = $10,000 Drawn 96% 14% Credit Lines Undrawn 4% 86% 26% Securitizations 9% Secured vs. Unsecured Equity 51
Slide 18: Debt Profile
Debt Profile Debt by currency USD 66% Perpetual SN 2010 Swiss Bond SN 2019 Notes SN 2023 SN 2026 MXN BB- 2022 BB B+ BB+ BB+ BB+ BB- 11% CHF 23% $188 $321 $22 Global Scale $4,207 $7,320 $11,863 BB+ BB+ BBB- $284 $449 $7,620.0 $350 $3,820 $3,417 Stable Stable Stable $2,285 $472 $601 2019 2020 2021 202
Slide 19: Strong Corporate Governance and Experienced Management Team
4 Strong Corporate Governance and Experienced Management Team Shareholder Structure Management team Ángel Romanos Carlos Ochoa Luis Carlos Aguilar 7% CEO Co-CEO / CFO Commercial Officer Float 22 years in CR 21 years in CR for Payroll Loans 24% 22 years in CR Berrondo Family Jose Juan Gonzalez Luis M
Slide 20: Appendix
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Slide 21: Profit & Loss
Profit & Loss 4Q18 2018 MXN Mn 4Q18 4Q17 % Var. 2018 2017 % Var. (USD) (USD) Interest Income 2,735.4 2,394.0 14.3 139.2 10,201.1 8,462.9 20.5 519.1 Interest Expense (692.0) (766.2) (9.7) (35.2) (3,120.9) (2,690.3) 16.0 (158.8) Financial Margin 2,043.4 1,627.8 25.5 104.0 7,080.2 5,772.6 22.7 360.3 Pr
Slide 22: Balance Sheet
Balance Sheet MXN Mn 2018 2017 Var. % 2018 (USD) Cash and cash equivalents 1,106.3 810.6 36.5 56.3 Investments in securities 410.3 356.3 15.1 20.9 Securities and derivatives transactions 1,028.0 1,920.9 (46.5) 52.3 Total performing loan portfolio 35,701.6 28,409.8 25.7 1,816.8 Total non-performing l
Slide 23: Financial Ratios
Financial Ratios 4Q18 4Q17 % Var. 2018 2017 % Var. Yield 30.7% 34.4% (3.7) 29.9% 32.2% (2.3) Net Interest Margin 22.9% 23.4% (0.4) 20.8% 22.0% (1.2) Return on Average Loan Portfolio 6.4% 6.3% 0.1 5.7% 6.3% (0.6) ROAA: Return on average assets 4.7% 4.5% 0.2 4.2% 4.5% (0.3) ROAE: Return on average sto
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
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