Banco de Chile · BCS:CHILE
Banco de Chile — Q3 2015 Earnings Presentation
18 slides from Banco de Chile's earnings presentation, Nov 2, 2015
Slide 1: Financial Results Q3|15
Financial Results November 2nd, 2015 Banco de Chile Q3|15
Slide 2: Agenda – 3Q15 BCH Financial Results
AGENDA – 3Q15 BCH Financial Results Banco de Chile 1. Economic at the top of the industry Environment 2. Banking Industry 3. BCH Strategic Focus 4. BCH Financial Results 2
Slide 3: Economy: Below-trend growth led by international and domestic issues
Economy Below-trend growth led by international and domestic issues Output Global Slowdown (YoY%) (WEO Expected 2015 growth, YoY%) 13 GDP Investment 9 oct-13 oct-14 oct-15 8 7 2.4 1.9 5 3 2.0 3 -2 -1.2 1 -7 -1 2012 2013 2014 2015e 2016e World LATAM China Copper and Peso Slump Confidence (CLP/USD and
Slide 4: Economy: Above-target inflation led Central Bank to increase rate
Economy Above-target inflation led the Central Bank to increase the interest rate Inflation Monetary Policy Rate (YoY%) (%) 5 4.7 4.6 6 4 3.3 3.4 5 3.0 3 4 2 1.8 3.25 3 1 0 2 2011 2012 2013 2014 2015e 2016e 2011 2012 2013 2014 2015 Fiscal Policy Labor Market (YoY% and % GDP, respectively) (% and YoY
Slide 5: Agenda – 3Q15 BCH Financial Results
AGENDA – 3Q15 BCH Financial Results Banco de Chile 1. Economic at the top of the industry Environment 2. Banking Industry 3. BCH Strategic Focus 4. BCH Financial Results 5
Slide 6: Banking Industry: Loans continue to show weak growth
Banking Industry Loans continue to show weak growth Industry Loan Growth Accumulated Net Income & ROAE (Var. Real YoY) (In billions of CLP and %) Net Income ROAE Commercial Consumer Mortgage Total 10.4% 10.7% 10.5% 10.1% 10.3% 679 665 554 546 466 5.6% 6.0% 20% 5.1% 18% 4.7% 4.9% 16% 15% 4.8% 13% 5.0
Slide 7: Agenda – 3Q15 BCH Financial Results
AGENDA – 3Q15 BCH Financial Results 1. Economic Environment 2. Banking Industry 3. BCH Strategic Focus 4. BCH Financial Results 7
Slide 8: BCH Strategic Focus: Main strategic pillars
BCH Strategic Focus Main strategic pillars Lead the Retail Business Lead the Wholesale Business Operational Excellence Service Quality Aligning People/ Culture/Strategy Building Social Reputation 8
Slide 9: Lead the Retail and Wholesale Business
Lead the Retail and Wholesale Business Important organic growth, in addition to loan portfolio acquisition Type 3Q15 YoY QoQ (Tr. of CLP) (%) (%) Nominal Loan Growth (%, QoQ) Retail 12,923 14.0% 4.7% 7.1% • Mortgage 6,099 17.1% 5.2% 5.1% 5.2% • SMEs 3,305 14.0% 5.3% • Consumer: 3.8% Middle/ Upper 2,
Slide 10: Service Quality & Aligning People/Culture/Strategy
Service Quality & Aligning People/Culture/Strategy Continued improve in recommendation and high employee satisfaction Service Quality Aligning People/Culture/Strategy (Net Promoter Score, %) • Workplace Climate Survey Organizational 69.9 71.4 67.9 69.3 Climate Workplace 66.6 Organizational Satisfact
Slide 11: Agenda – 3Q15 BCH Financial Results
AGENDA – 3Q15 BCH Financial Results Banco de Chile 1. Economic at the top of the industry Environment 2. Banking Industry 3. BCH Strategic Focus 4. BCH Financial Results 11
Slide 12: Strong net income despite additional provisions
3Q15 BCH Results Strong net income despite additional provisions Quarterly Net Income and ROAE Adjusted Net Income (In billions of CLP, %) and ROAE excluding additional provisions 168 158 151 154 159 137 133 134 121 122 128 117 26% 26% 26% 24% 25% 24% 25% 24% 23% 23% 20% 18% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
Slide 13: High inflation boosts Q3 income while customer income grows in line
3Q15 BCH Results High inflation boosts Q3 income while customer income grows in line with economic cycle Quarterly Operating Income Operating Margin Breakdown (In billions of CLP) (Operating Income / Avg. Daily Loans) 8.1% 440 419 432 7.6% 386 7.3% 7.4% 381 7.0% 141 119 127 89 84 4.4% 4.2% 4.1% 4.1%
Slide 14: Fees drive growth in quarterly customer operating revenues
3Q15 BCH Results Fees drive growth in quarterly customer operating revenues Quarterly Fee Evolution Fee Composition (In billions of CLP) (% of Total Net Fees, YTD as of September 2015) 17% 77.4 73.7 47% 71.7 72.1 66.1 16% 37% Subsidiaries Retail Wholesale 3Q14 4Q14 1Q15 2Q15 3Q15 14
Slide 15: Additional provisions largely explain higher credit risk during 3Q15
3Q15 BCH Results Additional provisions largely explain higher credit risk during 3Q15 Quarterly Variation in LLP Coverage Ratio and LLP Ratio (Times) (LLP in billions of CLP and LLP ratio in %) 7 2 3 104 2.29x 2.36x 31 0.43 0.52 62 1.78% 1.86 1.84 1.07% Sep-14 Sep-15 Coverage Ratio Additional Provis
Slide 16: Increase in expenses and efficiency ratio
3Q15 BCH Results Past inflation, peso depreciation and country risk charges mostly explain increase in expenses Operating Expenses Efficiency Ratio (In billions of CLP) (Operating Expenses/Operating Revenues, %) 217 179 186 50.3% 169 173 88 45.2% 85 82 92 82 40 44.3% 1 43.2% 86 89 94 91 94 3Q14 4Q14
Slide 17: Profitability remains above peers
3Q15 BCH Results Profitability remains above peers Return On Average Equity (ROAE) (%, based on SBIF data and monthly average volumes) 27.8% 26.9% 25.7% 26.2% 24.7% 23.5% 24.5% 20.3% 18.4% 21.7% 17.9% 18.7% 18.7% 17.5% 17.4% 13.8% 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15 Local Peers1 1- Santander, BC
Slide 18: 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