Banco De Chile · BCS:CHILE
Banco De Chile — Q4 2020 Earnings Presentation
42 slides from Banco De Chile's earnings presentation, Feb 5, 2021
Slide 1: Corporate Investor Presentation 2021
CORPORATE INVESTOR CORPORATE INVESTOR 2021 PRESENTATION PRESENTATION
Slide 2: Contents
1.Chilean Macro Environment CONTENTS 1. 2.Chilean Banking Industry 2. 3. Banco de Chile Overview 4. Full Year 2020 & 4Q20 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, 2019) FDI in Chile (Stock, 2019) An Economy Open to the World • Free Trade Agreements with 85% United States 13% Mining 32% Global GDP Spain 13% Financial Services 23% • Foreign Direct Investment 5% of Canada 13% Electricity, Gas & Water 13% GDP i
Slide 6: The beginning of a better cycle...
The beginning of a better cycle... Monthly Economic Activity Headline and Core Inflation (QoQ SAAR and YoY) YoY 6% 10% 50% 40% 5% 5% CPI Core CPI 30% 20% 4% 0% 10% 3% -5% 0% -10% -10% 2% Imacec YoY Imacec QoQ (right axis) -20% -30% 1% -15% -40% -20% -50% 0% Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
Slide 7: ...supported by strong fundamentals
…supported by strong fundamentals Vaccination in Latin America As of March 31st, 2021. Share of population vaccinated. Evolution of Vaccination in Chile¹ 35.6% As of April 4th, 2021. Number of vaccinated people. 15,000,000 7.1% 7.0% 5.4% 3.9% 1.7% 6,937,113 Chile Argentina Brazil Mexico Colombia Per
Slide 8: Our Baseline Scenario for Chile
Our Baseline Scenario for Chile Average expected growth 2020 - 2021 Bloomberg Consensus, Jan 2021 (YoY, %) 2017 2018 2019 2020 2021f -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 GDP 1.2 3.7 0.9 -5.8 6.0 Chile Consumption 3.6 3.7 0.8 -6.8 8.5 Brasil Gross investment -3.1 5.1 4.4 -11.5 6.0 LATAM Exports -1.
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, 2020 9 Locally controlled banks 8 Foreign controlled banks 1 State owned bank 2017 23.0% Colombia 73% 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 November 2020) Number of Total Loans Debtors 96% 1,379,503 Commercial loan volumes breakdown 0.2% by size 1.3 % 40 Personal % 21% 98. 5% US$ 161Bn Commercial 56 61% 18% % SMEs Large Companies Cor
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 Latam Mortgage L
Slide 13: Is this the Inflection Point for the Banking Industry?
Is this the Inflection Point for the Banking Industry? Nominal Loan Growth Quarterly Net Income¹ YoY Millions of US$ Net Income 15.9% 17.7% Inflation 11.2% 11.5% 853 12.1% 8.1% 824 10.1% 12.8% 726 9.7% 12.3% 10.6% 8.6% 3.6% 665 614 2.3% 7.1% 5.4% 2.4% 1.3% 0.9% 1.0% -5.7% -12.6% -13.9% 0.3% 0.0% Tot
Slide 14: 3. Banco de Chile Overview
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Slide 15: Our Shareholder Structure
Our Shareholder Structure Free Float As of December 2020 Top 5 companies in the IPSA Index As of December 2020 1.SQM 12.5% 2.Banco de Chile 9.9% 44.4% 3.Enel 9.8% 4.Copec 7.3% 5.Santander Chile 6.4% Other 38.9% Ownership Structure Avg. Daily Trading Volume As of December 2020 44.4% in US$ Millions L
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 December, 2020 Loans by Segment % of Total, December 2020 Business Scale1 17% Total Loans Market Share Retail 64% US$ 36% Wholesale 21% Demand Deposits Market Share 2% 16% 11% 35% 43.5 Consumer SMEs Consumer Residential and non Billion Wholesale 2 MM Customers Financ
Slide 18: Competitive Advantages and Strategic Pillars
Competitive Advantages and Strategic Pillars 18
Slide 19: Proven Digital Banking and Business Intelligence
Proven Digital Banking and Business Intelligence Online & Branch Monetary Innovative Digital Bank Transactions The European, 2020 % of total monetary transactions 2020 85% 15% 2019 73% 27% Online Branch Online Monetary Transactions In thousands Breakdown of Consumer Loans Origination 118,057 % of to
Slide 20: Confirming our Leadership in Digital Banking...
Confirming our Leadership in Digital Banking… CUENTA FAN Premium Loyalty Program Open a bank account 100% Online. Promotions Discounts Restaurants Leisure Travel Products Permits local and international purchases. Access to all discounts and benefits of Banco de Access to thousands Chile customers.
Slide 21: ...and 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 22: Reinforcing our productivity and efficiency
Reinforcing our productivity and efficiency Loans per Employee (Millions of US$) Key Actions 3.31 Streamlining and automating processes by 3.11 2.84 leveraging technology and simply procedures 2.44 2.55 Optimizing branch network by implementing new service model and merging consumer finance offices
Slide 23: Superior Brand and Reputation
Superior Brand and Reputation Top of Mind¹ Preferred bank to change to?¹ % total mentions, 4Q20 % total mentions, 4Q20 BCH 23% Others BCH Others 42% 23% 34% Santander 21% Santander Itau 17% 7% BCI Itaú BCI 15% 6% 12% Best Service Quality¹ Complaints Received % total mentions, 4Q20 Number of formal c
Slide 24: Premium Customer Base
Premium Customer Base Customer Base Current Account Balance-Personal Banking Market Share of debtors, November 2020 November 2020 18.1% 29.1% US$6.620 Banco deChile 16.4% 22.5% US$4,766 Santander 11.1% 14.2% US$3,875 BCI 7.3% Itaú-Corp 6.0% US$3,784 Market Share Avg DDA Balance per Account Personal
Slide 25: Diversified and Large Business Scale
Diversified and Large Business Scale Demand Deposits Market Share¹ Net Fees and Commisions Market Share, as of December 2020 Market Share, as of December 2020 22.5% 20.8% 19.9% 17.0% 13.5% 13.5% 7.1% 5.4% BCH Santander BCI ItauCorp BCH BCI Santander ItauCorp Total Loans¹ Assets Under Management Mark
Slide 26: Leaders in Funding
Leaders in Funding Demand Deposit Evolution 15,167 Billions of CLP 14,561 Liability Structure % Over Total Assets, as of December 2020 10,254 9,799 9,647 6,269 Equity Financial Institutions 3,940 Savings Accounts 2,641 Other and TimeDeposits Oct-19 Nov-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Banco de
Slide 27: Prudent Risk Management
Prudent Risk Management Coverage Ratio¹ BancodeChile Santander BCI BCH + AdditionalProvisions (Allowances for Loan Losses / Past-Due Loans) 3.6 Prudent and Proactive Risk Management: 2.9 2.8 2.7 2.7 2.7 1.Solid Track Record 2.5 2.4 2.5 2.5 2.5 2.4 2.1 2.1 2.1 2.1 2.Superior and Stable Asset Quality
Slide 28: Committed to ESG
Committed to ESG Corporate Reputation Inclusion Corporate Volunteering Inclusion • Outstanding Crisis Leadership² • 337,542 beneficiaries • 41-year Partnership with • 1st to Attract & Retain Talent³ • 238 activities Teleton Foundation • Best Bank in Chile² • 33,351 hours of volunteering • Employees
Slide 29: Strong Commitment to Sustainability
Strong Commitment to Sustainability Social Customer Support Plan $2.4 billion pesos raised to support the health emergency in alliance with Personal Banking Desafío Levantemos Chile benefiting 439,816 people with diverse initiatives. Rescheduling of Personal loans up to 6 installments. 5th Nat
Slide 30: 4. Full Year 2020 & 4Q20 Financial Results
4. Full Year 2020 & 4Q20 Financial Results
Slide 31: A Successful 2020
A Successful 2020 Quarterly Net Income¹ Full Year Net Income Billions of CLP Net and Adjusted, Billions of CLP 147 593 137 126 112 463 88 4Q19 1Q20 2Q20 3Q20 4Q20 2019 2020 ROAE ¹ 16.9% 16.2% 12.5% 9.8% 13.7% ROAE ¹ 17.5% 13.0% Net Income¹ Leader in Profitability and Capital Net and Adjusted, As of
Slide 32: Moderate reduction in revenues despite the pandemic
Moderate reduction in revenues despite the pandemic Quarterly Operating Revenues Customer Income Breakdown Billions of CLP Billions of CLP 1,617 6.2 1,529 - 34.7 - 47.8 - 11.3 2,015 1,939 397 410 2019 Loans Deposits Fees Sales & 2020 Distribution 530 Fees Margin 479 Net Fees/Avg. Interest Earnings A
Slide 33: Growth Supported by Covid Loans
Growth Supported by Covid Loans Total Loans Loans Growth Evolution Trillions of CLP Trillions of CLP +3% 30.0 31.3 30.9 1.9 30.9 30.0 0.2 - 0.6 - 0.6 4Q19 3Q20 4Q20 2019 Mortgage Commercial Covid Loans Consumer 2020 Wholesale Banking Loans SME Banking Loans Personal Banking Loans Trillions of CLP Tr
Slide 34: COVID-19 Fogape Loans
COVID-19 Fogape Loans Covid Loans Participation % of total loans Covid Loans Breakdown1 $1.9 Trillion¹ Billions of pesos, Size of companies COVID-19 733 Loans 597 Total loans² 6.0% 540 $30.9 Trillion Small Medium Large Nº of Customers 32,158 5,391 1,627 Covid Support Program² Covid-19 Loans Market S
Slide 35: The Strongest Funding and Capital Base
The Strongest Funding and Capital Base Liability Structure Demand Deposits to Total Assets % Over Total Assets, as of December 2020 As of December 2020 32.9% 26.1% 17.1% 11.0% BCH Santander BCI ItauCorp Liabilities Evolution Tier I Capital Ratio Trillions of CLP 12.2% 11.5% 3.8 1.1 11.1% 3.1 46 10.8
Slide 36: Proactive and Responsible Risk Management
Proactive and Responsible Risk Management Coverage Ratio Allowances for loan losses + Additional Provisions to NPLs, December 2020 Loan Loss Provisions 3.56 Billions of CLP 2.28 2.27 2.07 Risk Model Adjustment Add Prov 463 139 BCH BCI Santander Itau 126 113 347 185 Delinquency Ratio 101 NPLs to Tota
Slide 37: Diversified Loan Portfolio
Diversified Loan Portfolio Loans by Segment Main Banking Industry High Risk % of Total, December 2020 Economic Sector Concentrations Retail 64% US$ 36% Wholesale (% of Total, September 2020) 2% 16% 11% 35% 43.5 Consumer SMEs Consumer Residential and non Billion Wholesale Finance middle & residential
Slide 38: Cost Control Management is Bearing Fruit
Cost Control Management is Bearing Fruit Total Expenses Annual Variation in Total Expenses Billions of CLP Billions of CLP -3.1% 911 911 882 882 237 -18 - 11 0.6 232 222 209 232 222 2019 Salaries Administrative Dep, Amort & 2020 221 220 Other 2019 2020 Comparison to Peers¹ 1Q 2Q 3Q 4Q Base=100, Trai
Slide 39: A Proven Track Record
A Proven Track Record Share Evolution Price Base 100, Quarterly since December 31, 2019 to December 31, 2020. 100 80 60 40 20 - Banco de Chile IPSA Index BCI Itau BBA Bancolombia Santander Credicorp Itau Corp △4Q20/4Q19 -4% -11% -11% -11% -15% -16% -19% -40% 39
Slide 40: 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. 40
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