Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q4 2017 Earnings Presentation
47 slides from Intercorp Financial Services's earnings presentation, 2018
Slide 1: Intercorp Financial Services Fourth Quarter 2017 Earnings Presentation
Intercorp Financial Services Fourth Quarter 2017 Earnings Presentation
Slide 2: Highlights FY17 & 4Q17
Highlights FY17 & 4Q17 IFRS Record earnings in 2017, 30 bps quarterly improvement in cost of risk due to lower Interbank provisions in credit cards Interseguro Strong growth in net income excluding discount rate impact, S/ 60 million Local GAAP + S. Sura profits coming from S. Sura Inteligo Solid ye
Slide 3: IFS FY17 profits supported by good core performance in all 3 subsidiaries
IFS FY17 profits supported by good core performance in all 3 subsidiaries IFRS Interbank Inteligo Net profit in S/ million Net profit in S/ million ROAE 25.4% 21.4% 20.1% ROAE 20.0% 28.4% 27.3% 188 905 171 868 847 106 2015 2016 2017 2015 2016 2017 Interseguro + S. Sura IFS Net profit in S/ million N
Slide 4: IFS key indicators FY17
IFS key indicators FY17 IFRS Intercorp Financial Services' key indicators S/ million %chg 2016 2017 17/16 Net interest and similar income 2,623.0 2,689.1 2.5% Fee income from financial services, net 862.5 910.8 5.6% Results Profit for the period 833.7 837.8 0.5% Profit excl. discount rate impact on
Slide 5: 11% growth in additional relevant net income to IFS from the 3 subsidiaries in 2017
11% growth in additional “relevant net income” to IFS from the 3 subsidiaries in 2017 IFRS Interbank - Local GAAP Interseguro + S. Sura - Local GAAP Inteligo - IFRS Net profit in S/ million Net profit in S/ million Net profit in S/ million ROAE 26.6% 23.2% 20.8% ROAE 29.0% 25.7% 16.2% ROAE 20.0% 28.
Slide 6: Quarterly Results
Quarterly Results CJ Intercorp Financial Services
Slide 7: IFS 4Q17 net profit increased 7.9% QoQ
IFS 4Q17 net profit increased 7.9% QoQ IFRS Interbank Inteligo Net profit in S/ million Net profit in S/ million ROAE 21.1% 20.0% 22.7% ROAE 23.6% 25.3% 23.2% +22.2% +6.2% 273 224 228 43 41 38 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Interseguro + S. Sura IFS Net profit in S/ million Net profit in S/ million R
Slide 8: IFS key indicators 4Q17
IFS key indicators 4Q17 IFRS Intercorp Financial Services' key indicators S/ million 4Q16 3Q17 4Q17 %chg QoQ %chg YoY Net interest and similar income 675.7 668.3 709.4 6.1% 5.0% Fee income from financial services, net 221.4 240.4 231.4 -3.8% 4.5% Results Profit for the period 386.3 223.6 241.2 7.9%
Slide 9: Interbank
CJ Intercorp Financial Services
Slide 10: Strong 4Q17 at Interbank
Strong 4Q17 at Interbank IFRS Net interest and similar income Loan provision expense S/ million S/ million NIM 5.7% 5.7% 5.6% Cost of Risk 3.0% 3.0% 2.7% NIM on 10.0% 9.4% 9.5% Loans -2.8% +1.4% 202 194 189 581 589 571 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Total other income Other expenses S/ million S/ mil
Slide 11: Performing loans grew 6.2% YoY, outgrowing the industry
Performing loans grew 6.2% YoY, outgrowing the industry Performing loans Breakdown of loans S/ million S/ million %chg %chg 4Q16 3Q17 4Q17 QoQ YoY +6.2% Consumer loans: Credit cards 3,853.5 3,726.8 3,792.6 1.8% -1.6% +5.2% Other consumer 4,479.9 4,760.5 4,854.8 2.0% 8.4% 26,808 Total consumer loans
Slide 12: Interbank increased its market relevance in deposits in 4Q17
Interbank increased its market relevance in deposits in 4Q17 Funding structure Funding breakdown S/ million %chg %chg S/ million 4Q16 3Q17 4Q17 QoQ YoY Gross Loans Deposits 97.5% 105.3% 91.2% Deposits* 26,898.6 25,819.1 30,559.3 18.4% 13.6% Retail 11,756.7 11,935.7 12,709.2 6.5% 8.1% (1) Commercial
Slide 13: Cost of risk improved considerably in 4Q17
Cost of risk improved considerably in 4Q17 Local GAAP & IFRS figures PDL vs. System Loan provision expense vs. System Interbank System Interbank System Interbank 179.8% 170.3% 167.2% Coverage Ratio 3.1% 3.0% 2.8% 2.0% 2.0% 1.9% 2.6% 2.8% 2.9% 2.9% 3.1% 2.8% 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 IBK IBK PDL
Slide 14: Dollarization levels remained below system's average
Dollarization levels remained below system’s average Local GAAP figures Total loans Retail loans Commercial loans %PEN System 68.2% 67.1% 85.7% 87.4% 59.0% 56.2% 8.5% 8.2% 27.0% 26.5% 47.9% 47.7% 91.5% 91.8% 73.0% 73.5% 52.1% 52.3% 4Q16 4Q17 4Q16 4Q17 4Q16 4Q17 Retail loans breakdown Commercial loan
Slide 15: Solid core capital levels for Interbank
Solid core capital levels for Interbank System 15.0% 15.8% 15.8% 15.8% 15.2% 20.00% 17.1% 16.6% 16.5% 15.9% 16.1% 15.00% 5.2% 4.9% 4.9% 4.8% 5.2% +1.9% Additional Regulatory Capital Requirement 10.00% 10.0% Total Regulatory Minimum CET1: 11.9% 11.7% 11.6% 11.3% 10.1% 5.00% 10.7% 0.00% 4Q16 1Q17 2Q17
Slide 16: Strong 2017 at Interbank due to higher revenues and relatively stable expenses
Strong 2017 at Interbank due to higher revenues and relatively stable expenses IFRS Total revenues(1) Net Interest Margin (NIM) S/ million NIM NIM on loans 9.9% 9.9% 9.5% 3,403 3,532 3,343 6.0% 5.8% 5.7% 2015 2016 2017 2015 2016 2017 2015 2016 2017 Operating expenses Net profit S/ million S/ million
Slide 17: Interseguro + S. Sura
Interseguro + S. Sura CJ Intercorp Financial Services
Slide 18: Interseguro + S. Sura's 4Q17 premiums analysis
Interseguro + S. Sura’s 4Q17 premiums analysis IFRS Net premiums by business unit Annuities net premiums S/ million S/ million +17.3% +23.3% +4.6% +12.2% 105 103 175 168 7 19 9 14 149 2 14 84 12 2 32 21 49 48 24 53 38 22 42 105 5 94 84 30 32 24 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Disability Private Annuit
Slide 19: Adjustment of technical reserves decreased QoQ
Adjustment of technical reserves decreased QoQ Net premiums Adjustment of technical reserves S/ million S/ million Annuities Negative 23.5% 26.2% 25.0% discount rate -102 44 53 market share impact 168 175 149 156 14 19 7 12 14 1 127 49 53 48 30 8 147 105 94 90 84 -6 2 5 -13 -1 4Q16 3Q17 4Q17 4Q16 3Q
Slide 20: Interseguro's investment portfolio almost doubled with the acquisition of S. Sura's portfolio
Interseguro’s investment portfolio almost doubled with the acquisition of S. Sura’s portfolio Investment portfolio Results from investments(1) S/ million S/ million S. Sura´s (2) +109.7% Portfolio: ROIP 7.5% 6.9% 5.9% 5,190 +13.4% 11,311 1,119 132 685 104 103 41 12 6,074 33 21 10 5,395 786 6 21 745
Slide 21: Update of S. Sura acquisition
Update of S. Sura acquisition
Slide 22: Interseguro + S. Sura merger update
Interseguro + S. Sura merger update Pre-integration Merger approval (Closing) Legal merger Operational merger Purchase agreement (May-17) Closing Merger filing submitted for Personnel reduction from 548 to 54 Completed IFS bond issuance US$ 300MM approval to SBS and SMV FTEs Sale of TCHN
Slide 23: Inteligo
Inteligo CJ Intercorp Financial Services
Slide 24: Inteligo's 4Q17 P&L analysis
Inteligo’s 4Q17 P&L analysis IFRS Net interest and similar income Fees from financial services S/ million S/ million +1.8% +5.5% 30 31 28 21 23 23 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Other income Other expenses S/ million S/ million +61.4% +137.0% 40 27 25 24 15 11 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 24 24
Slide 25: Inteligo's key indicators
Inteligo’s key indicators AUM + Deposits Loans S/ million -5.8% S/ million -21.3% -2.5% -18.5% 15,113 14,810 -3.9% 14,236 3,226 2,774 2,253 1,695 1,611 11,887 12,036 11,983 1,335 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Deposits AUM Revenues Net profit S/ million S/ million Fee (1) 0.9% 0.9% 0.9% ROAE 23.6% 25
Slide 26: Summary
CJ Intercorp Financial Services
Slide 27: Takeaways
Takeaways Record earnings in 2017, 30 bps quarterly improvement in cost of risk due to lower Interbank provisions in credit cards Interseguro Strong growth in net income excluding discount rate impact, S/ 60 million Local GAAP + S. Sura profits coming from S. Sura Inteligo Solid year in revenues, ef
Slide 28: Appendix
Appendix CJ Intercorp Financial Services
Slide 29: IFS FY17 P&L
IFS FY17 P&L IFRS Intercorp Financial Services' P&L Statement S/ million %chg %chg 2015 2016 2017 17/16 16/15 Interest and similar income 3,342.7 3,704.8 3,809.0 2.8% 10.8% Interest and similar expense -921.7 -1,081.9 -1,119.9 3.5% 17.4% Net interest and similar income 2,421.0 2,623.0 2,689.1 2.5% 8
Slide 30: IFS 4Q17 P&L
IFS 4Q17 P&L IFRS Intercorp Financial Services' P&L statement S/ million %chg %chg 4Q16 3Q17 4Q17 QoQ YoY Interest and similar income 951.4 947.8 997.5 5.2% 4.8% Interest and similar expense -275.7 -279.4 -288.1 3.1% 4.5% Net interest and similar income 675.7 668.3 709.4 6.1% 5.0% Provision for loan
Slide 31: Relevant net income
Relevant net income* Local GAAP & IFRS Interbank - Local GAAP Interseguro + S. Sura - Local GAAP Inteligo - IFRS Net profit in S/ million Net profit in S/ million Net profit in S/ million ROAE 23.4% 20.3% 22.9% ROAE 18.3% 12.9% 6.5% ROAE 23.6% 25.3% 23.2% +11.0% -7.6% +6.2% +50.5% Interseguro: +28.3
Slide 32: Interbank FY17 P&L
Interbank FY17 P&L IFRS Banking Segment's P&L Statement S/ million %chg %chg 2015 2016 2017 17/16 16/15 Interest and similar income 2,961.4 3,279.4 3,348.0 2.1% 10.7% Interest and similar expenses -858.5 -1,009.8 -1,047.0 3.7% 17.6% Net interest and similar income 2,102.9 2,269.6 2,301.0 1.4% 7.9% P
Slide 33: Interbank 4Q17 P&L
Interbank 4Q17 P&L IFRS Banking Segment's P&L Statement S/ million %chg %chg 4Q16 3Q17 4Q17 QoQ YoY Interest and similar income 837.3 835.3 852.6 2.1% 1.8% Interest and similar expenses -256.1 -264.3 -263.3 -0.4% 2.8% Net interest and similar income 581.2 571.0 589.2 3.2% 1.4% Provision for loan los
Slide 34: Interbank's FY17 net profit bridge to IFRS
Interbank’s FY17 net profit bridge to IFRS Local GAAP vs. IFRS $1,000 S/ million 13 7 8 $900 45 46 $800 $700 Mainly re-classifications of credit Higher card commissions from interest Higher provisions administrative income to fee income, plus $600 due to IFRS Lower losses on and tax expenses deferre
Slide 35: Interbank's net profit IFRS vs. Local GAAP
Interbank’s net profit IFRS vs. Local GAAP Net profit – IFRS Net profit bridge from Local GAAP to IFRS (4Q17) S/ million S/ million +22.1% $300 3 0 7 $250 273 224 228 $200 4Q16 3Q17 4Q17 $150 253 265 252 273 Net profit – Local GAAP S/ million $100 +11.0% $50 265 $0 239 222 Net profit (SBS) Fee incom
Slide 36: Insurance Segment's FY17 net profit was S/ -156.0 million
Insurance Segment’s FY17 net profit was S/ -156.0 million Insurance Segment's P&L Statement S/ million %chg %chg 2015 2016 2017 17/16 16/15 Interest and similar income 259.6 293.0 334.8 14.3% 12.9% Interest and similar expenses -11.9 -14.4 -18.2 25.9% 21.6% Net Interest and similar income 247.7 278.
Slide 37: Insurance Segment's 4Q17 net profit was S/ -29.6 million
Insurance Segment’s 4Q17 net profit was S/ -29.6 million Insurance Segment's P&L Statement S/ million %chg %chg 4Q16 3Q17 4Q17 QoQ YoY Interest and similar income 76.0 77.2 109.4 41.7% 44.1% Interest and similar expenses -2.9 -2.7 -9.6 252.7% 232.0% Net Interest and similar income 73.1 74.5 99.9 34.
Slide 38: Interseguro's results in 2017 excluding rate impact were higher compared with 2016
Interseguro’s results in 2017 excluding rate impact were higher compared with 2016 Interseguro's P&L Statement S/ million %chg %chg 2015 2016 2017 17/16 16/15 Interest and similar income 259.6 293.0 292.8 -0.1% 12.9% Interest and similar expenses -11.9 -14.4 -11.4 -21.2% 21.6% Net Interest and simil
Slide 39: Interseguro's results in 4Q17 were negatively impacted by discount rate impacts
Interseguro’s results in 4Q17 were negatively impacted by discount rate impacts on technical reserves Interseguro's P&L Statement S/ million %chg %chg 4Q16 3Q17 4Q17 QoQ YoY Interest and similar income 76.0 77.2 67.5 -12.6% -11.2% Interest and similar expenses -2.9 -2.7 -2.8 2.1% -3.9% Net Interest
Slide 40: Interseguro + S. Sura's net profit IFRS vs. Local GAAP
Interseguro + S. Sura’s net profit IFRS vs. Local GAAP Net profit – IFRS* Net profit bridge from Local GAAP to IFRS (4Q17) S/ million S/ million 132 -38 -30 102 6 29 25 -44 -54 -27 33 28 33-119 -3 4Q16 3Q17 4Q17 9 3 Adjustment of technical reserves resulting from -4 changes in discount rate -21 Net
Slide 41: Interseguro's FY17 net profit bridge to IFRS
Interseguro’s FY17 net profit bridge to IFRS Local GAAP vs. IFRS S/ million Different discount rates in valuation of DCF RE investments resulted in a higher result in SBS GAAP Different stocks of Adjustment on the Assets and Liabilities cost of previously in IFRS compared to impaired instruments SBS
Slide 42: Interseguro's 4Q17 net profit bridge to IFRS
Interseguro’s 4Q17 net profit bridge to IFRS Local GAAP vs. IFRS S/ million Different discount Adjustment on the Different stocks of rates in valuation of cost of previously Assets and Liabilities DCF RE investments impaired instruments in IFRS compared to resulted in a higher given their sale SBS G
Slide 43: S. Sura's net profit bridge to IFRS
S. Sura’s net profit bridge to IFRS Local GAAP vs. IFRS S/ million -19 -21 -33 -12 28 -38 7 -3 4 Net profit Nov- Adjustment of Premiums and Net gain on sale Loss in Impairments Net profit Nov- Goodwill and S. Sura's Dec 2017 (SBS) technical Debts to pay of securities and intangibles and Dec 2017 (IF
Slide 44: Inteligo's FY17 net profit increased 9.8% compared to FY16
Inteligo’s FY17 net profit increased 9.8% compared to FY16 Wealth Management Segment's P&L Statement S/ million %chg %chg 2015 2016 2017 17/16 16/15 Interest and similar income 139.7 152.1 149.9 -1.4% 8.9% Interest and similar expenses -52.7 -59.4 -53.9 -9.3% 12.7% Net interest and similar income 87
Slide 45: Inteligo's FY17 P&L analysis
Inteligo’s FY17 P&L analysis IFRS Net interest and similar income Fees from financial services S/ million S/ million +0.1% 93 96 122 117 117 87 2015 2016 2017 2015 2016 2017 Other income Other expenses S/ million S/ million 112 103 73 86 47 10 2015 2016 2017 2015 2016 2017 45 45
Slide 46: Inteligo's 4Q17 net profit decreased 4.0% QoQ but increased 6.2% YoY
Inteligo’s 4Q17 net profit decreased 4.0% QoQ but increased 6.2% YoY Wealth Management Segment's P&L Statement S/ million %chg %chg 4Q16 3Q17 4Q17 QoQ YoY Interest and similar income 38.5 36.0 35.0 -2.9% -9.1% Interest and similar expenses -17.1 -13.3 -12.4 -6.8% -27.5% Net interest and similar inco
Slide 47: Fl _—_._ Financial Services
Fl _—_._ Financial Services
Intercorp Financial Services — Q4 2017 Earnings Presentation on 6ix