Banco de Credito e Inversiones · BCS:BCI
Banco de Credito e Inversiones — Q4 2023 Earnings Presentation
52 slides from Banco de Credito e Inversiones's earnings presentation, February 2024
Slide 1: February 2024
This presentation includes references to certain non-GAAP measures. We believe these non-GAAP measures provide useful information to both management and investors. These non-GAAP measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with
Slide 2: Strategy
Strategy RELATIONSHIP DIVERSIFICATION SCALABILITY BANKING Strategy. Supported by our robust technological and digital capabilities.
Slide 3: Strategy: strength of our teams, culture and values
Strategy And, of course, thanks to the strength of our teams, culture and values.
Slide 4: Financial Results: US$778 million net income
Financial Results + US$778 million net income
Slide 5: Results: 1st place in Chilean banking industry
Results 1st place Chilean banking industry → 19.7% total loans *Market share (14.7% without CNB) + 50 bp compared to 2022
Slide 6: Results: Investments abroad
Results Investments abroad More than US$2.3 billion in capital CET 1 of 13% More than US$26 billion Assets 30% of Bci´s total assets
Slide 7: Results: Investments abroad, Perú
Results Investments abroad Perú Loan portfolio US$1 billion
Slide 8: Results: International Platform
Results International Platform More than US$35 billion assets outside of Chile 35% Bci´s consolidated assets Perú
Slide 9: Results: $90.4 billion in total assets
Results $90.4 billion in total assets 8th largest bank in Latin America in terms of assets Last 7 years
Slide 10: Milestones: Capital increase completed in 2023
Milestones Capital increase completed in 2023 US$700 million Local & international growth strategy
Slide 11: Digital Ecosystem
Strategy Digital Ecosystem * ~4 million customers * Highest number of users in the market * 400.000 digital checking account
Slide 12: Digital Ecosystem: loyalty system
Strategy Digital Ecosystem * Goal: to have the BEST loyalty system * In first 7 months: associated business have multiplied their sales x 10
Slide 13: Acquiring strategy
Strategy Acquiring strategy + products & services leader of the acquiring market in the world
Slide 14: Retail
Strategy Retail Onboarding capabilities D&A Digital channels
Slide 15: Retail: grow affluent segments
Strategy Retail To grow affluent segments Focused greater engagement through investment, insurance, and payment products
Slide 16: Distribution and Service Model
Strategy Distribution and Service Model simplicity resolution closeness Digital-first service model
Slide 17: Distribution and Service Model: New Branch Experience
Strategy Distribution and Service Model New Branch Experience transform: physical spaces, roles, and processes
Slide 18: Retail Ecosystem
Strategy Retail Ecosystem = Digital Ecosystem + Retail Banking to integrate to unify to give new and the customer consistency traditional vision to the customer businesses experience among Bci Group products
Slide 19: Wealth Management
Strategy Wealth Management Challenge: To grow significantly in assets under Wealth management by 2026 across all segments. Management The best investment platform in Latin America, connecting:
Slide 20: Wholesale Banking
Strategy Wholesale Banking Continue promoting companies' sustainability 360 First class technology to support Connect corporate names To support corporate clients internationalization plans:
Slide 21: International Platform: Perú
Strategy International Platform Perú US$3 billion return on equity in Loans by 2026 between: 12% - 13% US$24 million technological transformation (3 years)
Slide 22: IT Capabilities
IT Capabilities From a traditional-analog bank to a physical-digital bank. Investment: U$540 million Deep transformation: business model + technological capabilities + working methods. (last 5 years) Corporate Cybersecurity program
Slide 23: IT Capabilities: software development efficiency
IT Capabilities + Efficiency in software development processes (supported AI) Improving development Deep cultural Stability + resilience of change cycle time 4 times platforms, networks, and systems, reducing customer impact 12 times
Slide 24: Sustainability: Strategic Focuses
Sustainability Purpose of daring to make a difference in the lives of our customers, employees, and the community. Strategic Environmental care Focuses Sustainable financial enablement Sustainable investment Inclusive and equitable society
Slide 25: Sustainability: sustainable financing
Sustainability Leaders in the local market in sustainable financing with a stock of US$1 billion Net Zero Banking Alliance (NZBA) 0 greenhouse gas emissions
Slide 26: Financial inclusion strategy
Sustainability Financial inclusion strategy. Valor Pyme platform: Chile´s largest open community: 260,000 SMEs Partnerships:
Slide 27: Recognitions
Recognitions Collaborator experience: Sustaintability: Corporate:
Slide 28: 87 years of history
Conclusion 87 years of history.
Slide 29: Contents
Key Financial Results Contents. Guidance City National Bank of Florida
Slide 30: Financial Results 2023 Consolidated
Financial Results 2023 Consolidated Operations Note: Figures are converted to US$ using an FX of 877.12 (January 2nd 2024) *2021 and 2022 under new version Compendium of accounting standards for banks
Slide 31: Loan growth driven by mortgage & commercial loans
Loan growth driven by mortgage & commercial loans Local Operations Total loans (US$mm) Commercial & Interbank loans (US$mm) CAGR CAGR Consumer lending loans (US$mm) Mortgage loans (US$mm) CAGR CAGR Source: Financial Market Commission (CMF) as of December 2024 Note: Figures are converted to US$ using
Slide 32: ~4 million customers already have a free MACH account
~4 million customers already have a free MACH account and +50% of monthly active users are heavy users ~4 million Registered clients ~400k Checking Account opting for a free account +570k clients have already paid with P2M in 2023 ~1 million active clients making value transactions 49k clients have
Slide 33: Evolution of NIM and Fees
Evolution of NIM and Fees Local Operations Annual NIM** (%) Net Fees (US$mm) *2022 under new version Compendium of accounting standards for banks ** Average of the last 7 months for interest-earning assets. Interest-earning assets include total loans, trading portfolio financial assets, investments
Slide 34: Operating Expenses
Operating Expenses Local Operations Annual Efficiency Ratio** as of December 2023 Operating Expenses Expense Breakdown as of December 2023 (US$ million) as of December 2023 *2021 - 2022 under new version Compendium of accounting standards for banks ** Efficiency ratio as calculated by the CMF (opera
Slide 35: Capital Increase and Basel III Capital Ratios
Capital Increase is Expected to Position Bci Above the Consolidated Operations Capital Ratios Imposed by Basel III Basel III implementation for Bci: 120 pb Estimated Impact +312pb of Capital ● Bci’s capital management Increase(1) policies contemplate 11,08% implementing additional 9,79% 1,19% Counte
Slide 36: Trend of Risk Indicators: Total loans
Trend of Risk Indicators Local Operations Total loans Nota: Excludes City National Bank of Florida and Bci Peru Figures are converted to US$ using an FX of 877.12 (January 2nd 2024). *2022 under new version Compendium of accounting standards for banks **LLP = Loan loss provisions
Slide 37: Trend of Risk Indicators: Commercial loans
Trend of Risk Indicators Local Operations Commercial loans Nota: Excludes City National Bank of Florida. Figures are converted to US$ using an FX of 877.12 (January 2nd 2024) * LLP = Loan loss provisions *2022 under new version Compendium of accounting standards for banks
Slide 38: Trend of Risk Indicators: Mortgage loans
Trend of Risk Indicators Local Operations Mortgage loans Nota: Excludes City National Bank of Florida. Figures are converted to US$ using an FX of 877.12 (January 2nd 2024) *2022 under new version Compendium of accounting standards for banks * LLP = Loan loss provisions
Slide 39: Trend of Risk Indicators: Consumer loans
Trend of Risk Indicators Local Operations Consumer loans Nota: Excludes City National Bank of Florida. Figures are converted to US$ using an FX of 877.12 (January 2nd 2024) * LLP = Loan loss provisions *2022 under new version Compendium of accounting standards for banks
Slide 40: City National Bank of Florida
City National Bank of Florida.
Slide 41: Strengthened liquidity and capital in 2023
We strengthened our liquidity position in 2023, improved our capital ratios and our CRE portfolio is well managed Insured Client Deposits Liquidity Capital Investments CRE Deposits Client deposits We maintained We reduced our Our CET 1 ratio 99% of our Our commercial remained stable ~$11B of availab
Slide 42: Client deposits remained stable in 2023
Despite turmoil and deposits outflows in the banking system, our client deposits remained stable in 2023 Total Deposits ($MM) Banking Industry - Total Deposits ($B) Client Deposits QoQ change: +92MM +0.5% QoQ change: +$46B +0.3% +$788 (+4%) ($304) $21,482 (-2%) $20,253 $21,041 $17,725 $17,375 $17,42
Slide 43: Core loans grew $952MM in 2023
Our core loans grew $952MM in 2023 while maintaining strong asset quality (low NPLs and past dues) Total Assets ($MM) Total Loans & Leases ($MM) QoQ change: +$88MM +0.3% Core loans QoQ change: -$48MM -0.3% Non-owner +$910 occupied CRE represents (3%) 48% of total $17,476 $17,423 portfolio $25,218 $2
Slide 44: CRE loans well diversified across property types
CRE loans are well diversified across various property types with low LTVs, strong DSC and excellent asset quality CRE by Property Type % Commitment % Balance % Accr % Property Type ($M) Total ($M) Total % of RBC WAvg LTV % WAvg DSCR % 30+ DPD Non-Accrual Retail 2,217 22.0% 2,128 25.3% 75.9% 54% 1.7
Slide 45: Operating income in 2023 was 18% lower than 2022
Operating income in 2023 was 18% lower than 2022 Q4 Q3 Q4 $ Var % Var $ Var % Var INCOMESTATEMENT($ millions) 2022 2023 2023 QoQ QoQ 2022 2023 YoY YoY (+) Net Interest Income $158.6 $114.7 $113.5 -$1.2 -1.0% $626.8 $500.6 -$126.1 -20.1% (+) Non-Interest Income $25.1 $23.9 $22.7 -$1.2 -5.0% $96.3 $91
Slide 46: Net income in Q4 included several special items
Net income in Q4 included several special items. Normalizing for those, net income remained in line with prior quarter Net income after taxes ($MM) ($2) (-4%) $5 ($10) $43 $41 $15 $20 $12 Q3-2023 Q4-2023 FDIC one-time fee Additional loan Loss on sale of Tax impact Q4-2023 loss provisions corp. bonds
Slide 47: NIM stabilized in Q4 2023
NIM stabilized in Q4 2023 after compressing in previous quarters due to DDA migration to IB deposits and deposit repricing given the historic increase in short-term rates Quarterly average NIM (overall and core) (%) Quarterly average cost of funds versus effective fed funds and quarterly change in D
Slide 48: Management's response to the current environment
Management’s response to the current environment Increased required spreads on new loan originations and renewals to at least 300 bps in early 2023 with current minimum of 325 bps Executed $3.75B of pay fixed interest rate swaps during 2023, which generated $32MM in additional NIM in 2023 Sold
Slide 49: Well positioned to succeed in 2024 and beyond
We are well positioned to continue to succeed in 2024 and beyond Our right to win Our 2024 Priorities Strong Economic Conditions in Florida Growth Focused Best in Class Talent Technology & Digital Capabilities NIM Top talent Deposit growth enhancement acquisition Ability to execute Proven
Slide 50: Guidance 2024
Guidance 2024 Local Guidance ➔ Loan growth: High-single digit (7% - 9%) ❏ Mortgage loans: Slowdown is expected due to the macroeconomic conditions ❏ Consumer loans: Have started to show signs of recovery and we expect a growth in high -single digit ❏ Commercial Loans: High-single digit (7% - 9%%) ➔
Slide 51: Thank you
● Thank you. 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”, “p
Slide 52: Largest Digital Ecosystem in Chile
Largest Digital Ecosystem in Chile Leveraging Capabilities to Deliver a Differentiated Value Proposition, Paving the Way to Increase Profitability MACH: Higher Number of Active Users has Come Hand-by-Hand With Increased Transactionality Across Products Client Base Number of Transactions Transaction
Banco de Crédito e Inversiones (Bci) — Q4 2023 Earnings Presentation on 6ix