Banco De Chile · BCS:CHILE
Banco De Chile — Q3 2020 Earnings Presentation
42 slides from Banco De Chile's earnings presentation, Nov 6, 2020
Slide 1: Corporate Investor Presentation 2020
CORPORATE INVESTOR CORPORATE INVESTOR 2020 PRESENTATION PRESENTATION
Slide 2: Contents
1.Chilean Macro Environment CONTENTS 1. 2.Chilean Banking Industry 2. 3. Banco de Chile Overview 4. Banco de Chile 3Q20 Financial Results
Slide 3: 1. Chilean Macro Environment
1. Chilean Macro Environment
Slide 4: Chile: A Successful Story
Chile: A Successful Story Key Factors of Chile’s Development • Strong structural reforms implemented in previous decades Strong Relative Position • Policy framework based on fiscal and monetary rules • Deep integration into the global economy, with floating exchange rate Global Competitiveness Index
Slide 5: Snapshot of the Chilean Economy
Snapshot of the Chilean Economy FDI in Chile (Stock, 2018) FDI in Chile (Stock, 2018) An Economy Open to the World • Free Trade Agreements with 85% Canada 11% Minning 27% Global GDP Spain 13% Electricity, Gas & Water 8% • Foreign Direct Investment 5% of Netherlands 7% Manufacturing 4% GDP in the las
Slide 6: Signs of Recovery in Chile's Activity
Signs of Recovery in Chile’s Activity... Monthly Economic Activity Headline and Core Inflation QoQ SAAR YoY 6% 10% 30% 20% 5% 5% CPI Core CPI 10% 0% 4% 0% -5% -10% 3% Imacec YoY Imacec QoQ (right axis) -20% 2% -10% -30% -15% 1% -40% -20% -50% 0% Unemployment Rate Change in Employment and Labor force
Slide 7: Highly Attributable to the Improvement in Covid-19
Highly Attributable to the Improvement in Covid-19 Evolution of Covid-19 in Chile Share of Positive Tests Total As of October 2nd, 2020, rolling 7-day average 70% 80,000 500,000 Active Cases Recovered (right axis) 450,000 60% 70,000 400,000 60,000 50% 350,000 50,000 300,000 40% 40,000 250,000 30% 30
Slide 8: Our Baseline Scenario for Chile
Our Baseline Scenario for Chile Average expected GDP growth 2020 - 2021 IMF Forecasts, WEO Oct 2020 (YoY, %) 2017 2018 2019 2020f 2021f -4.0 -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 GDP 1.2 3.9 1.1 -5.3 4.5 Chile Consumption 3.6 3.8 0.8 -5.0 5.0 Gross investment -3.1 4.8 4.2 -11.0 6.2 Brasil Exports -
Slide 9: 2. Chilean Banking Industry
2. Chilean Banking Industry 9
Slide 10: Snapshot of Chilean Banking Industry
Snapshot of Chilean Banking Industry 18 Banks Operating in Chile Debt Service Ratio Risk Weighted Assets Density5 Monthly debt obligations to monthly income As of December, 2019 9 Locally controlled banks 8 Foreign controlled banks 1 State owned bank 2017 23.0% Colombia 89% 96% Loans to GDP 2018 23.
Slide 11: Growth Potential in SMEs
Growth Potential in SMEs Loan Penetration¹ (% of LTM Sept-20 GDP) Breakdown of Commercial Loans (% as of August 2020) Number of Total Loans Debtors 96% 1,407,232 Commercial loan volumes breakdown 0.3% by size 1.2 % 40 Personal % 21% 98. 5% US$ 148Bn Commercial 56 61% 18% % SMEs Large Companies Corpo
Slide 12: Growth Potential in Personal Banking
Growth Potential in Personal Banking Household Debt1 Total,% of net disposable income 300 250 200 150 100 50 0 RUS LVA HUN COL LTU BRA SVN POL CZE CHL SVK EST ITA AUT DEU USA GRC ESP JPN BEL FRA PRT NZL IRL GBR FIN CAN KOR LUX SWE AUS CHE NOR NLD DNK Latam Consumer Loan Penetration2,3 Latam Mortgage
Slide 13: A Resilient Industry
A Resilient Industry Quarterly Net Income¹ Nominal Loan Growth² Billions of CLP YoY Net Income 17.7% 15.9% Inflation (△UF) 11.2% 10.7% 12.3% 10.6% 11.5% 587 587 9.7% 10.1% 8.6% 517 9.7% 12.8% 437 473 9.1% 12.1% 9.9% 7.1% 5.4% 0.9% 1.0% 2.3% 0.5% 0.3% 0.0% -5.7% Total Commercial Mortgage Consumer -12
Slide 14: 3. Banco de Chile Overview
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Slide 15: Our Shareholder Structure
Our Shareholder Structure Free Float As of September 2020 Top 5 companies in the IPSA Index As of September 2020 1.SQM 10.5% 2.Enel 9.9% 44.3% 3.Banco de Chile 9.4% 4.Copec 6.9% 5.CMPC 6.2% Other 39.1% Ownership Structure Avg. Daily Trading Volume As of September 2020 44.3% in US$ Millions Local Pen
Slide 16: Corporate Governance
Corporate Governance • Active Board involvement in committees Directors & Audit; 5 Risk Committees; 4 Business Committees • Best practices pursuant to NYSE and SEC standards • Successful Partnership with Citi supporting international business opportunities Board of Directors: Senior Management: Name
Slide 17: Snapshot of Banco de Chile
Snapshot of Banco de Chile As of September, 2020 Loans by Segment % of Total, September 2020 Business Scale1 17% Total Loans Market Share Retail 63% US$ 37% Wholesale 2% 16% 11% 35% 22% Demand Deposits Market Share Consumer SMEs Residential and non 39.9 Wholesale Consumer 2 MM Customers Finance midd
Slide 18: Strong Competitive Advantages
Strong Competitive Advantages 18
Slide 19: Proven Digital Banking and Business Intelligence
Proven Digital Banking and Business Intelligence Best Bank in Chile, Best Digital Bank, Best Online Portal Online & Branch Monetary Global Finance, 2019 Transactions % of total monetary transactions Innovative Digital Bank, Bank of the Year The European, 2020 3Q20 89% 11% 3Q19 73% 27% Online Branch
Slide 20: Setting a New Standard for Digital Banking in Chile
Setting a New Standard for Digital Banking in Chile… Comparison to Peer CUENTA FAN Thousands of new accounts* 90.6 Open a bank account 100% Online. Permits local and international purchases. 52.2 Access to all discounts and benefits of Banco de 39.8 Chile customers. No entrance or maintenance fees.
Slide 21: Premium Loyalty Program
…with our Premium Loyalty Program Access thousands of Discounts and Promotions with exclusive brands for being a Banco de Chile customer Promotions Discounts Restaurants Leisure Travel Products Exclusive Discounts in the Best Restaurants and Delivery Platforms Benefits to Access Highly Demanded Even
Slide 22: A Renewed Experience
…and a Renewed Experience. New front-office digital New Version Update platforms Cuenta Fan Digital onboarding platform Updated webpage Secure Improved customer experience Multiple Payments and analytic tools Visual Collections Messages Renewed Apps Fast Faster, easier and safer QR Code Payments Fri
Slide 23: Superior Brand and Reputation to Face Financial Portability
Superior Brand and Reputation to Face Financial Portability Top of Mind¹ Best Service Quality¹ % total mentions, 3Q20 %, 3Q20 BCH 23% BCH 32% National Customer Satisfaction Award³ Santander 20% BCI 30% 2020 BCI 16% Santander 28% ItauCorp 6% ItauCorp 13% Preferred bank to change to?¹ Voluntary Custom
Slide 24: Premium Customer Base
Premium Customer Base Customer Base Current Account Balance-Personal Banking Market Share of debtors, August 2020 August 2020 18.0% 29.7% 4.4Mn Banco deChile 16.0% 22.7% 2.9Mn Santander 11.0% 14.3% 3.1Mn BCI 7.6% Itaú-Corp 5.8% 2.4Mn Market Share Avg DDA Balance per Account Personal Banking Customer
Slide 25: Diversified and Large Business Scale
Diversified and Large Business Scale Demand Deposits Market Share¹ Net Fees and Commisions Market Share, as of September 2020 Market Share, as of September 2020 23.1% 21.5% 20.6% 17.4% 13.8% 13.3% 7.1% 5.4% BCH Santander BCI ItauCorp BCH BCI Santander ItauCorp Total Loans¹ Assets Under Management Ma
Slide 26: Leaders in Funding
Leaders in Funding Demand Deposit Growth from Oct-2019 Net inflows in billions of CLP, market share in % Demand Deposit Evolution Billions of CLP 4,264 4,261 Market Share 14,518 3,000 13,908 20% 20% Equity 1,020 14% 5% Financial Institutions 10,254 Savings Accounts BCH Santander BCI ItauCorp Other a
Slide 27: Prudent Risk Management
Prudent Risk Management Coverage Ratio¹ BancodeChile Santander BCI BCH + AdditionalProvisions (Allowances for Loan Losses / Past-Due Loans) Prudent and Proactive Risk Management: 3.3 2.9 2.8 1.Solid Track Record 2.7 2.7 2.5 2.4 2.5 2.5 2.7 2.5 2.4 2.4 2.1 2.1 2.1 2.1 2.Superior and Stable Asset Qual
Slide 28: Committed to ESG
Committed to ESG Leader in Corporate Reputation Inclusion Volunteering Inclusion • Best Corporate Reputation of • 337,542 beneficiaries • 41-year Partnership with the Decade² • 238 activities Teleton Foundation • 1st to Attract & Retain Talent³ • 33,351 hours of volunteering • Employees with • Best
Slide 29: Strong Commitment to ESG
Strong Commitment to ESG BCH is the bank that did the best in taking Operational Continuity Plan actions during this health crisis³ Most branches open and attending public with strict sanitary measures. % of total answers Reinforced communication to workers and customers, promoting the use of di
Slide 30: 4. Banco de Chile 3Q20 Financial Results
4. Banco de Chile 3Q20 Financial Results 30
Slide 31: Sustained Profitability with Superior Financial Indicators
Sustained Profitability with Superior Financial Indicators Net Income Quarterly Net Income Billions of CLP, as of September 2020 Billions of CLP 337 334 224 152 -736 128 Banco de Chile Santander BCI Itau 112 Coverage¹ Billions of CLP, as of September 2020 88 3.30 1.98 1.79 1.68 Banco de Chile Santan
Slide 32: Operating Revenues affected by the Covid-19
Operating Revenues affected by the Covid-19 Customer Income Breakdown Billions of CLP Quarterly Operating Revenues 414 2.1 367 Billions of CLP Non-customer Income - 16.0 - 14.2 -18.5 Customer Income 502 504 88 103 442 3Q19 Loans Deposits Fees Sales & 3Q20 Distribution 75 Fees Margin Net Fees/Avg. In
Slide 33: Covid Loans Supporting Growth
Covid Loans Supporting Growth Total Loans Loans Growth Evolution Trillions of CLP Trillions of CLP +6% 30.8 31.3 0.2 0.3 29.6 1.8 31.3 29.6 - 0.6 3Q19 2Q20 3Q20 3Q19 Covid Loans Commercial Mortgage Consumer 3Q20 Wholesale Banking Loans SME Banking Loans Personal Banking Loans Trillions of CLP Trilli
Slide 34: COVID-19 Loans
COVID-19 Loans Covid Loans Breakdown1 $1.8 Trillion¹ Breakdown of Loans Reprogrammed² Billions of pesos, Size of companies COVID-19 Trillions of pesos Loans 720 Total loans³ 5.9% 529 590 $31.3 3.6 Trillion 1.2 Small Medium Large Nº of Commercial Mortgage 31,469 5,324 1,613 Customers Covid-19 Loans M
Slide 35: Diversified Funding and Capital Structure
Diversified Funding and Capital Structure Liability Structure Tier I Capital Ratio % Over Total Assets, as of September 2020 Other 11.5% 11.6% 13% 10.8% 10.5% 11.1% 10.9% Financial 10.7% 10.3% institutions Demand Deposits 10.6% 10.0% 11.0% 9% 32% 10.1% 10.3% 10.5% 10.2% 9.8% 10.1% Equity 8.5% 8% 201
Slide 36: Proactive and Responsible Risk Management
Proactive and Responsible Risk Management Coverage Ratio Allowances for loan losses + Additional Provisions to NPLs, September 2020 3.30 Loan Loss Provisions Billions of CLP and NPL Ratio in % 1.98 1.79 1.68 Banco de Chile Santander BCI Itau 139 Delinquency Ratio NPLs to Total Loans, September 2020
Slide 37: Diversified Loan Portfolio
Diversified Loan Portfolio Loans by Segment Main Banking Industry High Risk (% of Total, September 2020) Economic Sector Concentrations (% of Total, September 2020) Retail 63% US$ 37% Wholesale 2% 16% 11% 35% Consumer SMEs Residential and non 39.9 Wholesale Consumer Finance middle & residential Bill
Slide 38: Effective Cost Control Management
Effective Cost Control Management Total Expenses Variation in Total Expenses Billions of CLP Billions of CLP 222 209 -5.9% - 10 -3 0.1 222 222 209 107 115 3Q19 Salaries Administrative Dep, Amort & 3Q20 103 Other Efficiency Ratio Cost to Income 56.6% 115 107 105 48.7% 45.4% 44.6% 3Q19 2Q20 3Q20 Perso
Slide 39: Improving Trends in Core Metrics
Improving Trends in Core Metrics Current Account Origination Mortgage Origination Consumer Origination Thousands of New Accounts Billions of Pesos Billions of Pesos 8.9 148 174 8.4 8.0 7.9 162 7.2 119 153 6.8 103 130 92 4.9 74 63 69 76 86 58 53 59 59 62 1.9 2.0 2.4 40 35 Credit Card Purchases Debit
Slide 40: Appendix: Main Financial Indicators
Appendix: Main Financial Indicators Actualización? (1) (2) Figures are expressed in nominal Chilean pesos. Figures are calculated considering nominal net income, the shares outstanding and the exchange rate existing at the end of each period. (3) Ratios consider daily average balances. (4) Annualize
Slide 41: Appendix: Main Financial Indicators
Appendix: Main Financial Indicators (1) (2) Figures are expressed in nominal Chilean pesos. Figures are calculated considering nominal net income, the shares outstanding and the exchange rate existing at the end of each period. (3) Ratios consider daily average balances. (4) Annualized data. 41
Slide 42: Forward Looking Information
Forward Looking Information The information contained herein incorporates by reference statements which constitute ‘‘forward-looking statements,’’ in that they include statements regarding the intent, belief or current expectations of our directors and officers with respect to our future operating p