Banco De Chile · BCS:CHILE
Banco De Chile — Q4 2021 Earnings Presentation
37 slides from Banco De Chile's earnings presentation, Feb 4, 2022
Slide 1: Corporate Investor Presentation 2021
CORPORATE CORPORATE INVESTOR 2021 PRESENTATION PRESENTATION
Slide 2: Contents
1.Chilean Macro Environment 1. CONTENTS 2.Chilean Banking Industry 2. 3. Banco de Chile Overview 4. Full Year 2021 & 4Q21 Financial Results 2
Slide 3: 1. Chilean Macro Environment
1. Chilean Macro Environment 3
Slide 4: Chilean economy
Chilean economy Evolution Per Capita GDP Per Capita GDP 2021* An Economy Open to the World (1980 = 100, 1980 - 2021) (PPP, US$) • Free Trade Agreements with 85% Global GDP 26,513 900 • Foreign Direct Investment 5% of GDP in the 800 22,892 20,820 last 3 years 700 • Trade Volume 53% of GDP 600 16,169
Slide 5: An unprecedented recovery in the economic growth
An unprecedent recovery in the economic growth… Monthly Economic Activity Economic Activity YoY, Ma3 Jan 2020=100 25% 140 20% 130 15% 120 13% 10% 110 109 5% 100 0% 90 -5% 80 -10% 70 Imacec Commerce Services -15% 60 -20% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov
Slide 6: …that has driven higher inflation and interest rates
…that has driven higher inflation and interest rates Headline and Core Inflation Exchange Rate YoY CLP/USD 8% 900 7% 850 CPI Core CPI 6% 800 5% 750 4% 700 3% 650 2% 600 1% 550 0% 500 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-21 Dec-21 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Jun-2
Slide 7: Our view of the Chilean economy
Our view of the Chilean economy Average Expected Growth Average 2020-2022 (YoY, %) 2018 2019 2020 2021f 2022f 2.8% GDP 3.7 0.9 -5.8 12.0 2.2 Consumption 3.7 0.8 -6.8 16.0 0.4 2.2% Gross investment 5.1 4.4 -11.5 15.0 -2.6 1.6% Exports 5.3 -2.6 -1.0 0.5 5.2 Imports 8.1 -2.4 -12.7 23.0 -1.5 CPI 2.6 3.0
Slide 8: 2. Chilean Banking Industry
2. Chilean Banking Industry 8
Slide 9: Banking Industry: Key Figures
Banking Industry: Key Figures As of September 2021 2021 As of December Total Loans¹ Total Deposits¹ 17 Banks Operating in Chile Billions of US$ Billions of US$ 8 Locally controlled banks Demand Deposits Time Deposits Total 8 Foreign controlled banks 26% 1 State owned bank +24% 189 163 175 240 149 21
Slide 10: Growth Potential in SMEs
Growth Potential in SMEs Loan Penetration¹ (% of LTM Sep-21 GDP) Breakdown of Commercial Loans (% as of September 2021) Number of Total Loans Debtors 86% 1,440,109 Commercial loan volumes breakdown 0.2% by size 1.3% Personal 37% 20% 98.4% US$ 143Bn Commercial 49% 62% 18% Total Loans Breakdown SMEs L
Slide 11: 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 Latam Mortgage L
Slide 12: Recovery in loan growth and profitability
Recovery in loan growth and profitability Quarterly Net Income¹ Net Income ROAE Billions of CLP 1,114 889 Nominal Loan Growth 854 845 QoQ 18.9% 16.6% 15.7% 418 15.3% Commercial Mortgage Consumer Total Loans 6.0% 4.1% 7.9% 3.6% 4.2% 3.0% 2.7% 3.6% 2.8% 4Q20 1Q21 2Q21 3Q21 4Q21 2.7% 1.3% 1.4% 3.0% 2.7
Slide 13: 3. Banco de Chile Overview
3. Banco de Chile Overview 13
Slide 14: Banco de Chile at a glance
Banco de Chile at a glance As of December 2021 Shareholder Structure Loans by Segment Leading the Chilean Financial Industry As of December 2021 % of Total, December 2021 (% Market Share) Ergas 17% Total Loans² Group Retail 62% Wholesale 38% 22% Demand Deposit² 21% Net Income 50.0% 4.3% 18% Total De
Slide 15: Strategic Goals & Aspirations
Strategic Goals & Aspirations The Best Bank for Innovating and Simple our Customers Value Offering An appreciated Bank, with solid Reputation Customer Centric Aproach Fast, Timely, Secure and Digital Efficiency & Commitment to A Bank that supports Productivity Chile Entrepreneurship Collaboration, C
Slide 16: Main focus and competitive advantages
Main focus and competitive advantages Multi-Channel Distribution Market-Leading Position Premium Customer Base Leader in Service Quality and Strongest Brand Proven Digital Banking and Business Intelligence Solid Funding and Capital Prudent Risk Management Committed to Sustainability 16
Slide 17: Comprehensive Multi-Channel Distribution
Comprehensive Multi-Channel Distribution Overview Branch Network Banco de Chile’s distribution network provides integrated financial services and products to its customers through a wide range of channels Arica y Parinacota Professional and highly skilled sales force Tarapacá Antofagasta Multich
Slide 18: Market-Leading Position
Market-Leading Position Economies of scale providing superior profitability… Demand Deposits1 Net Fees and Commisions Market Share, as of December 2021 Market Share, as of December 2021 Operating Margin Operating income divided by average interest earning assets 21.6% As of December 2021 20.9% 20.3%
Slide 19: Premium Customer Base
Premium Customer Base Customer Base Current Account Balance-Personal Banking Market Share of debtors, November 2021 December 2021 18.1% 27.6% US$6.209 Banco deChile 16.8% 23.3% US$2,951 Santander 11.1% 13.5% US$4,640 BCI 7.2% Itaú-Corp 6.2% US$3,716 Market Share DDA Balance per Account Personal Bank
Slide 20: Leader in Service Quality and Strongest Brand
Leader in Service Quality and Strongest Brand Net Promoter Score¹ The most committed to its clients² % total mentions, as of Dec-21 % total mentions, 4Q21 68% 67% 66% 25% 22% 18% 15% 48% BCH Santander BCI Itau BCH Santander BCI Itau Customer Attrition Rate Preferred bank to change to?² Voluntary Cus
Slide 21: Creating sustainable growth through digital innovation
Creating sustainable growth through digital innovation Our customers have increasingly adopted BCH digital channels 2021 figures Increasing sales & Expanding digital channels platforms, customer acquisition through digital Analytics and data Transforming operational process Talent and digital +47.9%
Slide 22: Solid Funding and Capital
Solid Funding and Capital Liability Structure Tier I Capital Ratio % Over Total Assets, as of December 2021 13.0% 12.2% 11.5% 10.8% 11.1% 10.9% 10.5% 10.7% 10.6% 11.0% 10.2% 10.0% 10.5% 10.1% 10.1% 10.3% 10.1% 9.6% 2016 2017 2018 2019 2020 2021 Banco de Chile BCI Santander Personal Banking Current A
Slide 23: Prudent Risk Management Best Coverage
Prudent Risk Management Best Coverage Delinquency Ratio¹ Additional Provisions % Past Due Loans (>90d) / Total Loans Billions of CLP, stock as of December 2021 1.9% 2.1% 1.6% 540 1.3% 1.4% 1.1% 1.0% 0.8% 350 258 2018 2019 2020 2021 133 Coverage Ratio Allowances for Loan Losses / Past Due Loans (>90d
Slide 24: Commitment to Sustainability – 2021 highlights
Commitment to Sustainability – 2021 highlights Governance • Creation of new Sustainability and Diversity & Inclusion policies. • Incorporation of ESG criteria at credit risk policy. 2021 Awards • Sustainability guidelines, procedures and requirements for suppliers. Bank of The Year – The European •
Slide 25: 4. Full Year 2021 & 4Q21 Financial Results
4. Full Year 2021 & 4Q21 Financial Results 25
Slide 26: Historical bottom line
Historical bottom line Quarterly Net Income¹ Full Year Net Income Billions of CLP Billions of CLP 284 793 184 162 162 463 126 4Q20 1Q21 2Q21 3Q21 4Q21 2020 2021 ROAE ¹ 13.7% 17.3% 16.8% 18.6% 27.6% ROAE ¹ 12.8% 20.2% Net Income¹ Leader in Profitability and Capital Billions of CLP, as of December 202
Slide 27: Revenue generation outpacing the competition
Revenue generation outpacing the competition Net Interest Income Evolution Quarterly Operating Revenues Billions of CLP Billions of CLP 524 506 456 444 2,230 391 1,938 350 707 4Q20 1Q21 2Q21 3Q21 4Q21 409 BCH Santander BCI 704 Net Fees Evolution Billions of CLP 441 Recurrent 545 386 482 499 291 111
Slide 28: Recovering the lost ground
Recovering the lost ground Breakdown of Loans Total Loans QoQ growth Total Commercial Mortgage Consumer Trillions of CLP 5.6% 3.4% 3.6% 3.7% +11% 2.5% 2.5% 3.6% 2.5% 1.8% 2.7% 2.4% 34.3 2.6% 2.3% 33.1 1.7% 1.6% 0.3% 30.9 -1.2% -0.3% -1.5% -3.0% 4Q20 1Q21 2Q21 3Q21 4Q21 Loan Market Share Evolution¹ 1
Slide 29: Proactive and Responsible Risk Management
Proactive and Responsible Risk Management Loan Loss Provisions Additional Provisions Billions of CLP 463 Billions of CLP, stock as of December 2021 Add Prov Loan Loss Provision 149 540 373 185 350 258 80 133 93 85 220 - 77 BCH BCI Santander Itau 54 50 50 278 Coverage Ratio 80 40 69 Allowances for lo
Slide 30: Diversified Loan Portfolio
Diversified Loan Portfolio Loans by Segment Loans by Economic Sector % of total, as of December 2021 % of total, December 2021 Retail, Hotels, Construction Rest. Retail Wholesale 8% 7% Manufacturing 5% 62% 38% Financial Agriculture 11% 5% Transport 5% Communication 1% Social 15% Loans to Individuals
Slide 31: Successful cost control
Successful cost control Total Expenses Annual Variation in Total Expenses Billions of CLP Billions of CLP +0.6% 882 5.7 5.9 888 882 888 -6.2 232 227 4Q 209 218 3Q 2Q 222 217 1Q 220 224 2020 Salaries Administrative Dep, Amort & 2021 2020 2021 Other Efficiency Ratio Efficiency vs Peers Comparison to P
Slide 32: A continuous improvement in efficiency
A continuous improvement in efficiency… 2021 Productivity and Streamlining and automating Optimizing branch network with Efficiency Program Efficiency Ratio a new service model and accelerating the processes by leveraging 39.8% combining consumer finance implementation of technology and simplifying
Slide 33: The most reliable results
The most reliable results Net Income and Comprehensive Income Breakdown of Comprehensive Income Billions of CLP, as of Dec-21 Billions of CLP, as of Dec-21 Net Income Comprehensive Income 821 +3% 793 775 772 821 793 182 -44 -110 520 225 Net Income MtM available MtM account OCI taxes Comprehensive BC
Slide 34: Key Takeaways
Key Takeaways • We expect the economy to grow 2.2% in 2022, after the pick-up of 12% last year. Gradual recovery in employment. • BCH posted a strong bottom line in 2021, overpassing all peers in Chile, and lead the industry in capital, coverage and demand deposits. • Strong advances in ESG and digi
Slide 35: Appendix: Main Financial Indicators
Appendix: Main Financial Indicators (1) Figures are expressed in nominal Chilean pesos. (4) Annualized data. (2) Figures are calculated considering nominal net income, the shares outstanding and the exchange rate existing at the end of each period. (5) Including additional allowances. (3) Ratios con
Slide 36: Appendix: Main Financial Indicators
Appendix: Main Financial Indicators (1) Figures are expressed in nominal Chilean pesos. (4) Annualized data. (2) Figures are calculated considering nominal net income, the shares outstanding and the exchange rate existing at the end of each period. (5) Including additional allowances. (3) Ratios con
Slide 37: 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