50 slides from Intercorp Financial Services's investor presentation, December 2021
Slide 1: Investor Presentation December 2021
Investor Presentation December 2021
Slide 2: 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 3: IFS at a glance
Cd Intercorp Financial Services IFS ata glance
Slide 4: Leading financial services platform with solid balance sheet and diversified source of dividends
Leading financial services platform with solid balance sheet and diversified source of dividends Financial highlights Three operating segments 99.3% 99.8% 100.0% Universal bank with Insurance company Leading provider of As of Sep21 S/ mm | US$ mm strategic focus on with focus on life & wealth manage
Slide 5: Intercorp Group: striving to make Peru the best place to raise a family in Latin America
Intercorp Group: striving to make Peru the best place to raise a family in Latin America Financial services Retail US$ 7.2bn Revenues in 2020 ~3.7% of Peru 2020 GDP Education Other (1) Source: Company information and BCRP. 4 1) Related companies excluding Aviva and Urbi.
Slide 6: Story of sustained growth and strong returns for our shareholders
Story of sustained growth and strong returns for our shareholders Sustained growth and market share gains over the years Delivering strong returns for our shareholders Total assets (S/ mm) Net profit (US$ mm) (3) MS loans (1) 9.4% 12.8% Dividends 40 89 paid (US$ mm) MS deposits (1) 9.3% 13.3% Divide
Slide 7: Strategically positioned to capture significant growth opportunities
Strategically positioned to capture significant growth opportunities What distinguishes us How we do it Universal franchise Customer Ready-to-scale Deep knowledge Digital first Innovation at with strong focus centricity omnichannel of Peruvians strategy the core on retail platform through analytics
Slide 8: Scalable digital platform already in place
Scalable digital platform already in place 1994 - 2014 2015 - 2018 2019 - Onwards Store-centric model Omnichannel platform with Digital first, search focused on physical strong focus on digital and for exponential convenience analytics growth Physical supports growth Digital supports physical Physic
Slide 9: Key messages
Key messages 1 2 3 GDP growth Solid capitalization and Core indicators above decelerating strong liquidity pre COVID-19 levels 4 5 6 Growing customer base Credit risk profile better Continued focus thanks to digital than pre COVID-19 levels on efficiency adoption 8
Slide 10: GDP growth decelerating
1 GDP growth decelerating GDP GDP (YoY % Chg) Jul21: (YoY % Chg) +12.9% Aug21: +11.8% FY20 FY21(E) FY22(E) 41.9% Sep21: +9.7% Private Consumption -8.7% 9.2% 4.0% 4.5% 11.4% Public Consumption 7.2% 9.0% 1.5% 0.2% -3.9% -1.4% Private Investment -16.5% 24.5% 0.0% -8.8% TB Public Investment -15.5% 20.0%
Slide 11: Currency and inflation rate still impacted by political uncertainty
Currency and inflation rate still impacted by 1 political uncertainty Peru vs. LatAm peers Inflation rate LTM (Index; 100 = Jan20) (%Chg YoY) Peru Chile Mexico Colombia Brazil CPI %Chg YoY (Sep21) Brazil 10.3% 5.8 141 Mexico 6.0% Chile 5.3% Peru 5.2% 121 Colombia 4.5% 3.8 117 3.0 110 2.7 2.4 Central
Slide 12: Solid capital ratios at all IFS' segments
2 Solid capital ratios at all IFS’ segments 155.0% 160.8% 155.7% Banking System 15.6% 15.4% 15.1% 100.0% regulatory TCR minimum 17.0% 16.5% 16.3% 3Q20 2Q21 3Q21 12.0% 11.4% 11.5% Solvency ratio 8.5% 17.0% 16.5% 16.3% regulatory minimum 23.8% 22.6% 23.9% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 8.0% Total capit
Slide 13: High liquidity with market share in retail deposits at all-time high of 15.2%
High liquidity with market share in retail deposits 2 at all-time high of 15.2% Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of September 30, 2021 S/ million Total LDR MS total 13.1% 13.4% 13.6% deposits 124% MS retail 13.9% 14.5% 15.2% deposits 97% 106% 90% System: +9.5%
Slide 14: Core indicators above pre COVID-19 levels
3 Core indicators above pre COVID-19 levels Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 143 124 168 100 100 88 80 100 77 38 52 8 Feb20 Apr20 Sep20 Sep21 Feb20 Apr20 Sep20 Sep21 Fe
Slide 15: 17.8% YoY growth in revenues in 9M21
3 17.8% YoY growth in revenues in 9M21 Intercorp Financial Services Banking S/ million S/ million NIM 4.5% 4.0% 4.1% 4.5% 4.0% 4.6% 3.9% 4.0% 4.7% 3.9% +8.3% -5.1% 1,622 4,683 1,015 965 2,844 2,920 1,498 1,515 -0.1% 964 3,974 116 433 268 149 268 179 377.1 146.1 153 132 163 166 457 489 175 201 199.1
Slide 16: 160 bps YoY improvement in Interbank's risk-adjusted NIM in 3Q21
160 bps YoY improvement in Interbank’s 3 risk-adjusted NIM in 3Q21 Yield on loans after provisions NIM after provisions % % 8.9% 9.1% 4.6% 4.7% Yield 7.7% 7.9% 7.7% 3.9% 4.0% 3.9% NIM on loans +240 +410 +160 +290 Chg YoY Chg YoY bps bps bps bps 6.8% 6.2% 3.3% 2.9% 6.0% 2.8% 4.4% 1.7% 2.1% n.m. 3Q20
Slide 17: Digital indicators improving
Digital indicators improving 4 Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally 79% 58% 49% 75% 53% 46% 39% 61% 32% Sep19 Sep20 Sep21 Sep19 Sep20 Sep21 Sep19 Sep20 Sep21 Interbank – Savings a
Slide 18: Growing customer base thanks to digital adoption
Growing customer base thanks to digital adoption 4 Interbank - Retail customers Interbank - Commercial customers Thousand Thousand CAGR: +14.3% CAGR: +36.1% 4,339 122 3,746 3,323 96 66 Sep19 Sep20 Sep21 Sep19 Sep20 Sep21 Interbank - Retail 100% digital customers Interbank – Retail digital acquisitio
Slide 19: Users of digital payment solutions accelerating
Users of digital payment solutions accelerating 4 Interbank – Tunki users Interbank – Plin users N° of users (million) N° of users (million) IBK >8x >7x 42% 1.5 5.1 1.4 4.8 1.3 4.0 1.0 3.2 0.8 2.6 0.6 2.0 1.3 0.3 0.2 0.7 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Oct21 Mar20 Jun20 Sep20 Dec20 Mar21 J
Slide 20: Rescheduled loan balances down 45% from peak
Rescheduled loan balances down 45% from peak 5 Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 272 (Thousand) Clients 343 459 283 Rescheduled 34% 43% Var.% (Thousand) 25% balance (%) Sep21/Jun20: -42% Rescheduled 8.6 30% 31% 17% 6.9 balance (
Slide 21: Reactiva Peru loan balances down 18% YoY
Reactiva Peru loan balances down 18% YoY 5 Reactiva Peru loan balances by segment S/ million, Local GAAP Sep21 3Q21 6,709 Segment Rescheduled %chg YoY 106 6,082 725 101 419 5,510 Corporate 5% -53% 338 94 3,833 69 3,900 3,463 Mid-sized 31% -22% 742 3,050 SME 37% +3% 2,640 1,978 2,099 2,028 381 Total
Slide 22: Credit risk profile better than pre COVID-19 levels
Credit risk profile better than pre COVID-19 levels 5 Interbank - Cost of risk Interbank - Non-performing exposure NPL FY19: 2.2% 196.5% 169.2% coverage FY19: 8.9% FY19: 2.9% ratio 4.5% 7.1% 15.1% 8.8% 9.0% 1.7% 1.1% 1.5% 3.4% 3.2% 3.0% 3Q20 2Q21 3Q21 9M20 9M21 3Q20 2Q21 3Q21 (S2+S3) ratio NPL ratio
Slide 23: Recovery in expenses driven by banking activity and digital investments, IFS' efficiency at 32%
Recovery in expenses driven by banking activity and digital investments, IFS’ efficiency at 32% 6 Efficiency ratio Interbank – Other expenses bridge from 9M20 to 9M21 % YoY growth by line (S/ million) +17.8% +8.0% +75.8% +9.3% +15.4% +63 +36 45.6% +40 +34 42.9% 38.2% 32.3% 32.0% 21.2% Digital Profit
Slide 24: Summary & Trends
Summary & Trends 1 2 3 GDP growth Solid capitalization and Core indicators above decelerating strong liquidity pre COVID-19 levels 4 5 6 Growing customer base Credit risk profile better Continued focus thanks to digital than pre COVID-19 levels on efficiency adoption 23
Slide 25: Operating trends 9M21
Operating trends 9M21 Capital Profitability Loan growth 2021 9M21 2021 9M21 Slow recovery in retail, IBK TCR >15% 16.3% Old New and decreasing volumes in commercial IFS ROAE >14% >18% 22.1% IBK CET1 >11% 12.0% Growth YTD To remain at sound levels Above guidance Retail +8.1% / Commercial -4.0%(1) Rev
Slide 26: Highlights: Unique culture and commitment to ESG
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 27: Highlights: Unique culture and commitment to ESG
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 28: Rebalanced loan portfolio due to Reactiva Peru
Rebalanced loan portfolio due to Reactiva Peru Interbank Distinctive loan breakdown… …when compared to the banking system Gross loans breakdown (as of September 2021) Gross loans breakdown (as of September 2021) Banking System Commercial Commercial 51.9% Mortgages 69.0% Mortgages Consumer Consumer 4
Slide 29: Solid risk management capabilities
Solid risk management capabilities Interbank Better asset quality than the system despite focus on retail Balanced asset quality among businesses PDL ratio evolution PDL ratio as of September 2021 Interbank System Commercial loans Retail loans Total loans 3.8% 3.7% 3.0% 3.0% Scotiabank Scotiabank 4.
Slide 30: Diversified funding base with strength in retail deposits
Diversified funding base with strength in retail deposits Interbank Consistently delivering higher deposit growth than the system A growing retail deposit-gathering franchise Total deposits growth evolution Total retail deposits growth evolution MS 2014 11.6% MS Jun21 13.6% MS 2014 12.1% MS Jun21 15
Slide 31: Key player in Peru's life insurance business
Key player in Peru’s life insurance business Interseguro Strategic focus on life insurance… … when compared to the insurance system Insurance premiums and collections breakdown (as of September 2021) Insurance premiums and collections breakdown (as of September 2021) Insurance System Regulated Other
Slide 32: Annuities leading recovery in premiums
Annuities leading recovery in premiums Interseguro Introduction of new products to continue diversifying Outgrowing the overall insurance industry Gross premiums and collections by business unit (S/ mm) YoY growth in premiums (as of September 2021) Regulated Private Annuities Individual Life Other L
Slide 33: Resilient wealth management business
Resilient wealth management business Inteligo Positive trend in AUM growth Solid fee generation due to client mix Inteligo Group AUM (S/ mm) Fees / Avg. AUM 23,586 0.9% 0.9% 0.9% 20,989 19,880 0.8% 17,593 18,293 2018 2019 2020 Sep20 Sep21 2018 2019 2020 9M21 Strong core revenue generation High profi
Slide 34: Our strategy is based on digital and analytics
Our strategy is based on digital and analytics We have built an scalable digital platform… … leveraging advanced analytics More and better models • Predictive and prescriptive models to improve effectiveness Increasing levels of adoption and customer satisfaction • Machine learning and deep learning
Slide 35: Efficiency as our guiding principle to deal with the adverse environment
Efficiency as our guiding principle to deal with the adverse environment Optimizing our distribution channels Disciplined cost control helps efficiency Units Other expenses (S/ mm) 2018 Sep21 % Change Financial 1,978 270 193 -29% 1,911 stores 1,837 1,623 ATMs 1,975 1,585 -20% 1,374 Correspondent 2,5
Slide 36: Highlights: Unique culture and commitment to ESG
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 37: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by appropriate funding IFS Total gross loans Total deposits S/ mm S/ mm 43,082 43,562 +0.2% 43,656 50,905 38,257 47,149 45,209 34,055 38,093 33,682 2018 2019 2020 Sep20 Sep21 2018 2019 2020 Sep20 Sep21 AUM evolution Net shareholders’ equity S/ mm S/ mm 23,586 20,989
Slide 38: Growth in total revenues despite pressure on NIM
Growth in total revenues despite pressure on NIM IFS Total revenues (1) NIM S/ mm 5,488 5.4% 5.3%(3) 5,384(3) 4,889(2) 4,683 4.5% 4.5% 3,974 4.0% 2018 2019 2020 9M20 9M21 2018 2019 2020 9M20 9M21 Net profit ROAE S/ mm 1,536 22.1% 1,479(3) 18.6%(2) 18.6%(3) 1,236(2) 384 4.5% 6 0.1% 2018 2019 2020 9M2
Slide 39: Consistently delivering strong return to our shareholders
Consistently delivering strong return to our shareholders Dividends declared (1) (S/ mm) (S/ mm) Net profit (2) 875 902 1,040 1,222 265 Net profit (2) 86 104 361 436 257 Payout Ratio 45% 45% 45% 25% n.m. Payout Ratio 50% 96% 68% 46% 78% 467 245 394 406 200 200 302 100 43 n.m. 2016 2017 2018 2019 202
Slide 40: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 41: Evolving cultural transformation
Evolving cultural transformation Comprehensive transformational approach New initiatives User Empower IT all Peruvians to achieve financial well-being Org More than 100 teams working with agile framework Innovation Labs Over 400 workers organized in more than 80 squads 40
Slide 42: A "Great Place to Work" with a distinctive culture and strong sense of achievement
A “Great Place to Work” with a distinctive culture and strong sense of achievement for new talent Our commitment to fostering a performance-based culture is demonstrated by being ranked among the top Peruvian and Latin American companies Top 20 in Peru Top 10 in Peru for the past 19 years 2011 - 201
Slide 43: Strong corporate governance
Strong corporate governance Board of Directors BOD with majority of independent members Carlos Rodríguez-Pastor IFS: 4 out of 7 Chairman Strong corporate Felipe Morris Fernando Zavala governance Director Director Highly supervised related party exposure, well below regulatory limits Alfonso Bustaman
Slide 44: IFS' milestones towards a stronger Corporate Governance and ESG disclosure
IFS’ milestones towards a stronger Corporate Governance and ESG disclosure NYSE IPO Higher reporting SOX implementation with Appointment of Jul19 standards following KPMG resulting in independent NYSE listing improved internal controls Audit Committee (2Q19) and procedures (2Q20) (3Q19 – 1Q21) New d
Slide 45: Highlights: Unique culture and commitment to ESG
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 46: Appendix
Cd Intercorp Financial Services oooeeen | Appendix
Slide 47: Resilient financial system
Resilient financial system Gross loans growth and asset quality Profitability recovering after COVID-19 pandemic Banking system gross loans (S/ bn) Banking system net profit (S/ mm) PDL 3.0% 3.0% 3.8% 3.3% 3.7% ROAE 18.5% 18.5% 4.0% 5.8% 11.6% ratio CAGR 346 2018-20 326 327 271 286 9,082 8,220 12.4%
Slide 48: IFS income statement – IFRS
IFS income statement – IFRS % chg Incom e S t a t e m e nt ( S / m m ) 2018 2019 2020 9 M 20 9 M 21 % chg '19 / '18 % chg '20/ '19 9 M 21/ 9 M 20 Interest and similar income 4,321.3 4,847.2 4,665.0 3,477.8 3,368.6 12.2% (3.8%) (3.1%) Interest and similar expenses (1,177.3) (1,424.0) (1,192.3) (925.8
Slide 49: IFS balance sheet – IFRS
IFS balance sheet – IFRS % chg Ba la nce S he e t ( S / m m ) 2018 2019 2020 9 M 20 9 M 21 % chg '19 / '18 % chg '20/ '19 9 M 21/ 9 M 20 Cash and due from banks 8,380.4 11,128.9 18,765.5 17,573.1 20,330.7 32.8% 68.6% 15.7% Inter-bank funds 495.0 85.0 18.1 0.0 0.0 (82.8%) (78.7%) n.m. Financial inves
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