Slide 1: Investor Presentation August 2023
Investor Presentation August 2023
Slide 2: Universal bank, insurance, advisory and payments businesses
Universal bank Insurance company with strategic focus on focused on retail life & annuities Advisory firm for the Pillar for building our emerging payments wealthy ecosystem
Slide 3: Intercorp Group: making Peru the best place to raise a family
Intercorp Group: striving to make Peru the best place to raise a family in Latin America Financial services Retail US$ 8.4bn Revenues in 2022 ~4.0% of Peru 2022 GDP Education Other (1) Source: Company information and BCRP 2 1) Related companies excluding Aviva and Urbi
Slide 4: Building a leading digital financial platform
Building a leading digital financial platform Financial highlights Four key businesses 99.3% 99.8% 100.0% Universal bank with Insurance company Advisory firm for strategic focus on focused on life & the emerging As of Jun23 S/ mn | US$ mn retail annuities wealthy Total assets (1) 88,338 | 24,349 Con
Slide 5: Consistently delivering strong return to our shareholders
Consistently delivering strong return to our shareholders (S/ mn) (S/ mn) Net profit (2) 902 1,040 1,222 265 1,201 1,172 Net profit (2) 104 361 436 257 304 203 Payout Ratio 45% 45% 25% n.m. 50% 50% Payout Ratio 96% 68% 46% 78% 66% 49% Dividends declared(1) 600 586 245 467 200 200 202 406 302 100 100
Slide 6: On track for Basel III transition at banking
On track for Basel III transition at banking Banking System 14.7% 15.6% 16.0%(1) 145.6% 136.1% 128.9% TCR Insurance 100.0% Reg. min. 15.2% 15.2% 15.2% 11.1% 11.1% 11.4% 2Q22 1Q23 2Q23 Solvency ratio Banking 10.7% Reg. 6.4% management min. Reg. min. 19.4% 16.7% Wealth 16.2% 12.0% Reg. min. 2Q22 1Q23
Slide 7: Macro outlook slightly improving, but still challenging
Macro outlook slightly improving, but still challenging Quarterly GDP growth YoY (%) Interest rates (%) Soles reference rate (BCRP) Dollar reference rate (FED) 2023E Jul23 1.2%-2.0% 7.50 7.75 7.75 7.75 3.9% 5.50 3.4% Jul23 2.0% 2.50 5.25 5.5 1.7% 4.50 4.75 0.25 -0.4% -0.5% 1.75 1Q22 2Q22 3Q22 4Q22 1
Slide 8: Growing customer base & sustainable earnings
1 2 3 Growing Consolidating customer base Our key our digital & sustainable businesses strategy earnings
Slide 9: Expanding customer base at IFS
1 Expanding customer base at IFS 5.8 2.6 5.0 +15% YoY 2.2 +17% YoY Jun22 Jun23 Jun22 Jun23 Banking – customers (mn) Insurance – customers (mn) 70 1.2 64 +10% YoY 0.8 +53% YoY Jun22 Jun23 Jun22 Jun23 Wealth management – customers (th) Payments – merchants (mn) 8
Slide 10: Continuous focus on efficiency
1 Continuous focus on efficiency Optimizing our distribution channels (Units) Variable expenses drive costs higher – Other expenses (S/ mn) 2020 1H23 % Change +7% Financial stores 215 158 -27% 2,684 YoY 2,263 1,911 ATMs 1,640 1,597 -3% 1,285(4) 1,370 Correspondent 5,529 5,627 +2% agents(1) Sales for
Slide 11: Growth in total revenues driven by NIM recovery
Growth in total revenues driven by NIM 1 recovery Total revenues (1) (S/ mn) NIM (%) +17% YoY 5.5%(2) 6,557 5.0% 4.7% 5,488 5,922 4.5% 4.1% 3,704(2) 3,163 2020 2021 2022 1H22 1H23 2020 2021 2022 1H22 1H23 Net profit (S/ mn) ROE (%) 1,800 1,671 19.3% 17.7% 16.5% (2) 13.7% 703 639(2) 384 4.5% 2020 202
Slide 12: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by 1 appropriate funding Total gross loans (S/ mn) Total deposits (S/ mn) 44,688 47,025 45,600 47,852 47,149 48,898 48,531 47,278 48,735 43,082 2020 2021 2022 Jun22 Jun23 2020 2021 2022 Jun22 Jun23 AUM evolution (S/ mn) Net shareholders’ equity (S/ mn) 22,981 9,555
Slide 13: Consolidating our digital strategy
1 2 3 Growing Consolidating customer base Our key our digital & sustainable businesses strategy earnings
Slide 14: Our transformation path to a digitally-driven organization
Our transformation path to a digitally- 2 driven organization Prior to 2014 2015 - 2018 2019 - 2021 2022 onwards 1 2 3 4 Store-centric Omnichannel Digital Two-tier model platform first digital strategy focused on physical with strong focus with growth to foster profitable convenience on building dig
Slide 15: Our two-tier digital strategy
Our two-tier digital strategy to foster 2 profitable & sustainable growth 1. Digitalization 2. Accelerated growth Focus on growing and allowing Focus on increasing velocity customers to fulfill their of new sources of revenues financial needs 100% digitally & sustainable profitability Digital Paymen
Slide 16: 100% digital solutions for the customer journey
We are building 100% digital solutions for 2 the customer journey IzipayYa Digital bank Cuenta Sueldo ERNI Digital insurance Loyalty Digital program My financing Payments finances Piggy Bank 100% digital account
Slide 17: Positive development in digital indicators across banking
Positive development in digital indicators 2 across banking… 73% 47 46 83% 68% 75% Jun22 Jun23 Jun22 Jun23 Jun22 Jun23 Digital customers NPS – digital customers Digital self-service (% of digital self-service) (% of digital customers – Retail banking) (Points – Retail Banking) 63% 65% 29% 29% 92% 95
Slide 18: Digital indicators in insurance and wealth management
… as well as in insurance and wealth 2 management Insurance Wealth management 54% 43% 9.4% 7.6% 40% 33% 2Q22 2Q23 2Q22 2Q23 Jun22 Jun23 Digital premiums Digital self-service Digital transactions Interfondos (% of digital transactions) (% of total premiums) (% of digital self-service) 17
Slide 19: Strengthening our payments ecosystem
We continue to strengthen our payments 2 ecosystem Merchant financing Interoperability MVPs Phase 1 Launching of Izipay and Niubiz QRs May 2023 Apr 2022 Tunki+ Izipay Apr combine to launch IzipayYa 2022 Izipay’s value added service Leading player offering Jan Jan in the acquiring 2020 business 2018
Slide 20: Our key businesses
1 2 3 Growing Consolidating customer base Our key our digital & sustainable businesses strategy earnings
Slide 21: Increasing market shares
3 Increasing market shares Banking 22.7 18.6 19.4 21.7 2Q22 2Q23 2Q22 2Q23 Consumer banking loans (%) Retail banking loans (%) 15.1 9.4 14.5 8.9 2Q22 2Q23 2Q22 2Q23 Retail deposits (%) Commercial banking loans (%) 20
Slide 22: Moderation in activity with focus on lower risk segments
Moderation in activity with 3 Banking more focus on lower risk segments 6.9 7.0 559 5.9 +1% QoQ 386 428 +11% QoQ +18% YoY -23% YoY 2Q23 1Q23 2Q23 2Q22 1Q23 2Q23 Credit & debit cards purchases (S/ bn) Mortgage disbursements (S/ mn) 1,048 301 267 784 867 -17% QoQ 234 +14% QoQ +11% YoY -11% YoY 2Q22 1Q
Slide 23: Double digit growth across recurring revenue lines
Double digit growth across all recurring 3 Banking revenue lines % YoY +22% +11% +13% +19% +343 +42 +28 2,550 2,137 (1) 1H22 Net interest income Fee income Other income 1H23 Revenue bridge from 1H22 to 1H23 (S/ mn) 22 1) Net interest and similar income, and total revenues grew 18% and 16%, respectiv
Slide 24: Further NIM expansion to 5.6%
Further NIM expansion to 5.6% due 3 Banking to increasing yield on loans… 63,420 65,895 17% 11.5% 17% 10.9% 10.5% 9.8% 16% 9.1% 9.1% 16% 8.7% 8.3% 7.5% 30% 6.8% 32% 5.4% 5.5% 5.6% 4.9% 5.0% 35% 37% 3.7% 3.8% 3.8% 3.3% 3.2% (1) 2Q22 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Interest-earning assets Evolution of y
Slide 25: Rising funding costs
3 … partially offset by rising funding costs Banking LDR(1) 101% 102% System’s 108% 105% LDR(1) Ref. rate YoY (2) +225 bps (S/) +350 bps (US$) 57,683 58,572 8% 11% 13% 13% 4.0% 39% 3.6% 38% 3.2% 2.8% 79% 2.2% 3.6% 3.3% 2.8% 2.4% 38% 40% 1.7% 2Q22 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Retail deposits Commerc
Slide 26: Retail cost of risk continues to increase, strong coverage
Retail cost of risk continues to increase, 3 Banking strong coverage Credit cards & personal loans Payroll deduction loans NPL coverage ratio Cost of risk Mortgages Commercial Reactiva 8% 2% 258% 42% 252% 40% 6.0% 5.4% 247% 173% 178% 21% 20% 3.6% 3.6% 186% 3.2% 11% 52% 11% 56% 68% Retail Retail 1.8%
Slide 27: Increased contribution of individual life & retail insurance
Increased contribution of individual life & 3 Insurance retail insurance to total premiums Annuities market 28.8% 27.2% 25.5% 28.0% (1) share %chg 285 YoY 266 266 46 37 37 -20% 212 44 109 76 78 -28% 71 65 67 53 +28% 34 57% 46% 88 84 61 77 +9% (2) 2019 2Q22 1Q23 2Q23 Quarterly gross premiums (S/ mn)
Slide 28: Investment portfolio delivers sound returns
3 Investment portfolio delivers sound returns Insurance ROIP (%) Portfolio breakdown 7.8% 11% 9% 6% 6.4% 7% 82% 85% 2Q22 2Q23 Fixed Income Equity and Mutual Funds Real Estate 2Q22 2Q23 27
Slide 29: 6% YoY growth in AUM
3 6% YoY growth in AUM Wealth Mgmt AUM (US$ mn) Deposits (US$ mn) Loans (US$ mn) 5,793 5,930 1,037 983 448 459 436 5,601 926 2Q22 1Q23 2Q23 2Q22 1Q23 2Q23 1Q22 1Q23 2Q23 +2% QoQ | +6% YoY -6% QoQ | -10% YoY -5% QoQ | -6% YoY 28
Slide 30: Solid YoY growth in key business drivers
3 Solid YoY growth in key business drivers Payments 1.2 191.1 0.8 +53% YoY 177.4 +8% YoY Jun22 Jun23 1H22 1H23 Merchants (mn) Revenues (S/ mn) E-commerce 15% 16% (%) 27.4 61.8 62.6 22.9 +20% YoY +1% YoY 1H22 1H23 1H22 1H23 29 Transactional volumes in payments acquirer (S/ bn) EBITDA (S/ mn)
Slide 31: Over 11.9 million users in Plin and merchants in IzipayYa
Over 11.9 million users in Plin and 3 Payments 600 thousand merchants in IzipayYa +57% YoY +84% YoY +2x YoY 11.9 1.8 6.5 7.5 1.0 3.0 Jun22 Jun23 Jun22 Jun23 2Q22 2Q23 Users (mn) Merchants (mn) Volume (S/ bn) +43% YoY +2x YoY 607 1.3 425 0.5 Jun22 Jun23 2Q22 2Q23 Merchants (th) Volume (S/ bn) 30
Slide 32: Takeaways
[J Intercorp Financial Services Takeaways Sere Wis
Slide 33: 1H23 update on operating trends
1H23 update on operating trends Capital Profitability Loan growth 2023 1H23 2023 1H23 High single digit growth in IBK TCR ∼ 15% 15.2% IFS ROE ∼ 18.0% 13.7%(1) total loans(2) led by low double digit growth in consumer loans IBK CET1 ∼ 11% 11.4% Revised: ∼ 14.0% To remain at sound levels Continued pat
Slide 34: ESG updates
ESGon Focus updates building a sustainable business Environmental Social Governance & Economic 180k new users 16k new clients 8 new webinars 3 new courses Inteligo Group companies approved their Responsible Investment Policy aligned to: Co-host at climate risk New app for small management conference
Slide 35: Our way of working will enable us to achieve our goals
Our way of working will enable us to achieve our goals Top 20 in Peru Top 10 in Peru for the past 21 years 2011 - 2023 #3 in Latin America #3 in Peru in 2022 in 2023 #4 in Peru #6 for work from home in Peru in 2023 in 2022 #5 for women in Peru in 2023 #2 for millennials in Peru Top 15 in Peru in 202
Slide 36: Strong corporate governance
Strong corporate governance Board of directors BOD with independent members Carlos Rodríguez-Pastor Chairman IFS: 4 out of 7 Felipe Morris Fernando Zavala Director Director Strong corporate governance Highly supervised related party Alfonso Bustamante Cayetana Aljovín exposure, well below regulatory
Slide 37: Appendix
[J Intercorp Financial Services Appendix Sere Wis
Slide 38: Overview of Peruvian banking system
Overview of Peruvian banking system Steady loan growth – Banking system gross loans (S/ bn) Profitability recovering – Banking system net profit (S/ mn) ROE 4.0% 13.3% 17.3% 17.8% 16.9% CAGR +4.6% CAGR 350 357 359 350 2020-22 10,119 326 1.2% 7,218 238 228 237 215 5,043 5,289 222 2,112 129 134 11.4%
Slide 39: Strategic focus on consumer loans
Banking Strategic focus on consumer loans Distinctive loan breakdown… …when compared to the banking system Banking System Commercial Commercial 44% 62% Mortgages Consumer Mortgages Consumer 37% loans Retail 46% loans Retail 63% 38% 54% 56% S/ 46.4BN S/ 26.1BN S/ 349.7BN S/ 134.4BN Leading position i
Slide 40: Diversified funding base with strength in retail deposits
Diversified funding base with strength Banking in retail deposits Significant deposits base A growing retail deposit-gathering franchise MS 2017: 12.6% MS Jun23: 15.1% MS 2022: 14.9% Other 6% Bonds Demand 13.3% 7% Savings 22% 40% 9.6% Due to banks Deposits 7.9% 15% 78% 3.8% Time 32% CAGR 2017-22 2Q2
Slide 41: Solid risk management capabilities
Banking Solid risk management capabilities Better asset quality than the system despite focus on Best total PDL ratio among peers (%) retail – PDL ratio evolution (%) Interbank System Commercial loans Retail loans Total loans 3.9% 4.1% 3.8% 3.8% 3.8% BBVA BBVA 5.9% 2.3% BBVA 4.6% BCP BCP 4.7% 3.0% B
Slide 42: Asset quality metrics evolving with macro outlook
Asset quality metrics evolving with Banking macro outlook (S2+S3) ratio & S3 NPL ratio (%) Impairment loss on loans, net (S/ mn) & Cost of risk (%) 16.0% 800 12.8% 12.7% 1,291 14.0% 700 11.2% 12.0% 13.4% 600 10.0% 463 500 417 8.0% 368 400 313 328 278 6.0% 300 189 199 (1) 193 210 178 2.5% 2.6% 2.7% 4
Slide 43: Reactiva loan balances down 65% YoY
Reactiva loan balances down 65% YoY, Banking representing 2% of total portfolio Reactiva Peru loan balances by segment (S/ bn) 2Q23 3.5 Segment YoY Corporate -87% Corporate: n.m. 1.7 Mid-sized: S/ 0.8 bn SME: S/ 0.4 bn Mid-sized -49% 1.2 SME -54% Total -65% 2Q22 1Q23 2Q23 42 SME Mid-sized Corporate
Slide 44: Manageable dollarization levels
Banking Manageable dollarization levels Total loans Retail loans Commercial loans % PEN 67% 72% 88% 93% 56% 59% System 8% 4% 27% 25% 50% 53% 92% 96% 73% 75% 50% 47% 2Q18 2Q23 2Q18 2Q23 2Q18 2Q23 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Micro 96% 9
Slide 45: Manageable dollarization levels
Banking Manageable dollarization levels Gross Loans by segment & percentage in S/ Currency mix Jun23 94% 94% 94% 95% 96% 92% 92% 93% Gross Loans Total Assets 89% 85% 78% USD 73% 74% 73% 74% 76% 74% 75% USD 71% 25% 30% 63% 64% 58% 52% 52% 52% 51% 50% 49% 47% 41% S/ S/ 75% 2014 2015 2016 2017 2018 201
Slide 46: Key player in Peru's life insurance business
Key player in Peru’s life insurance Insurance business Strategic focus on life insurance… …when compared to the insurance system (Insurance premiums and collections breakdown) (Insurance premiums and collections breakdown) Insurance System Other life Regulated 23% annuities Regulated 11% D&S annuiti
Slide 47: Annuities market contraction offset by growth in life insurance
Annuities market contraction offset by Insurance growth in life insurance Strong performance in most products Outgrowing the industry with digital innovation (Gross premiums and collections by business unit - S/ mn) (YoY growth in Individual Life premiums) Interseguro System 1,271 8 1,209 109 9 27.6
Slide 48: Resilient wealth management business
Wealth management Resilient wealth management business AUM growth – Inteligo Group AUM (S/ mn) Fee origination – Fee/Avg. AUM (%) 22,981 0.8% 0.8% 0.8% 20,989 21,317 21,424 21,515 0.7% 0.7% 2020 2021 2022 1H22 1H23 2020 2021 2022 1H22 1H23 Diversified revenue generation (S/ mn) Recovering profitabil
Slide 49: Izipay, pillar for building our payments ecosystem
Izipay, pillar for building our payments Payments ecosystem Our business lines and main clients Payments Correspondent Credit cards acquirer banking processor 91% 5% 4% Fee income share 1H23 Fee income share 1H23 Fee income share 1H23 48
Slide 50: IFS income statement
IFS income statement % chg Income Statement (S/ mm) 2022 1H 22 1H 23 1H 23/ 1H 22 Interest and similar income 5,871.3 2,640.2 3,466.4 31.3% Interest and similar expenses (1,661.7) (663.4) (1,212.5) 82.8% = N et i nteres t and s i mi l ar i ncome 4,209.6 1,976.8 2,253.9 14.0% Impairment loss on loans
Slide 51: IFS balance sheet
IFS balance sheet % chg Bal ance Sheet (S/ mm) 20 22 1H 22 1H 23 1H 23/ 1H 22 Cash and due from banks 13,193.4 12,304.0 11,159.1 (9.3%) Inter-bank funds 296.1 200.0 0.0 (100.0%) Financial investments 22,787.6 23,594.4 25,561.1 8.3% Loans, net of unearned interest 47,530.9 46,024.9 48,399.9 5.2% Impa
Slide 52: Definitions
Definitions Concept Definition Net interest and similar income + Net fee income from financial services + Other income Total revenues + Income from insurance results (Salaries and employee benefits + Administrative expenses + Depreciation and amortization) / (Net Efficiency ratio interest and simila
Slide 53: Safe Harbor for Forward-Looking Statements
Safe Harbor for Forward-Looking Statements This corporate presentation contains “forward looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this corporate presentation regarding IFS’ busin
Slide 54: [J Intercorp
[J Intercorp Financial rVviC