Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q3 2022 Earnings Presentation
61 slides from Intercorp Financial Services's earnings presentation, November 2022
Slide 1: Earnings Presentation 3Q22 Results
Earnings Presentation 3Q22 Results
Slide 2: Financial highlights, Key messages, Results by segment
1 Financial highlights 2 Key messages 3 Results by segment
Slide 3: 3Q22 earnings of S/ 613 million, recurring S/ 391 million
3Q22 earnings of S/ 613 million, with recurring earnings of S/ 391 million IFS net profit (S/ mn) 26.5%(1) ROE 23.1% 11.1% 17.1% ROE 18.6% 19.4% 21.4% 5.3% 31.6% 46.8% 366 100 Banking(2) Insurance 299 321 613 77 551 13 223 Extraord. income 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 391 +14% QoQ | +22% YoY +31% Q
Slide 4: 9M22 earnings of S/ 1,268 million, recurring S/ 1,046 million
9M22 earnings of S/ 1,268 million, with recurring earnings of S/ 1,046 million IFS net profit (S/ mn) 18.2%(2) ROE 22.1%(1) 15.1% ROE 18.8% 19.8% 34.9% 31.3% +247 in WM 1,009 259 Banking(3) Insurance 893 216 +223 in IFS 1,536 -239 in WM 1,268 9M21 9M22 9M21 9M22 223 +13% YoY -17% YoY ROE 39.5% n.m.
Slide 5: Highlights: Another solid quarter in core banking activity
Highlights Another solid quarter in core banking activity IFS Banking • Resilient banking activity and moderating consumer dynamics, growth across all revenue lines • Shift in loan mix and repricing expand NIM further, up to 5.0% • CoR builds up in line with shift in loan mix and new macro outlook,
Slide 6: IFS key indicators 3Q22
IFS key indicators 3Q22 23.1% 26.5%(1) 1.8% 1.9% 11.1% 17.1% 1.1% ROE CoR 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Banking 2.4% 16.3% 15.2% 15.2% 1.2% 1.8% 2.8%(1) ROA TCR 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 5.0% 5.2% 7.7% 7.9% Insurance 4.1% 6.6% IFS NIM ROIP 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 management 33.0%(1) 33.6%
Slide 7: IFS key indicators 9M22
IFS key indicators 9M22 22.1% 18.2%(1) 1.5% 1.7% 15.1% ROE CoR 9M21 9M22 9M21 9M22 Banking 2.3% 1.9%(1) 16.3% 15.2% 1.6% ROA TCR 9M21 9M22 9M21 9M22 4.9% 8.3% 6.9% Insurance 4.0% IFS NIM ROIP 9M21 9M22 9M21 9M22 management 36.6%(1) 32.0% 38.4% 23.6 22.0 Wealth C/I ratio AUM (S/ bn) 9M21 9M22 9M21 9M
Slide 8: 12% QoQ growth in revenues at IFS
12% QoQ growth in revenues at IFS IFS revenues (S/ mn) NIM 4.1% 5.0% 5.2% 1,095 1,175 413 Insurance 964 361 396 Banking 1,622 1,661 (1) 1,479 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 +7% QoQ | +22% YoY +4% QoQ | +15% YoY management Payments(2) 223 94 89 Wealth 86 3 -78 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3
Slide 9: Operating leverage drives quarterly C/I ratio improvement
Operating leverage drives quarterly C/I ratio improvement, 40.1% in banking IFS expenses (S/ mn) 33.0%(2) Banking expenses (S/ mn) 5x C/I 33.6%(1) 40.6% 37.5% C/I 47.1% 42.3% 40.1% operating leverage 688 468 481 488 670 648 (3) +1% QoQ +4% YoY 3Q21 2Q22 3Q22 YoY +17% +9 % +14% +5% +10% Banking’ brid
Slide 10: Solid capitalization levels
Solid capitalization levels Banking System 15.1% 14.7% 14.5% 155.7% 128.9% 128.6% TCR Insurance 100.0% Reg. min. 16.3% 3Q21 2Q22 3Q22 15.2% 15.2% 12.0% 11.1% 11.6% Solvency ratio Banking 9.6% Reg. management min. 23.9% 19.1% Wealth 19.4% 8.0% Reg. min. 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 TC
Slide 11: Financial highlights, Key messages, Results by segment
1 Financial highlights 2 Key messages 3 Results by segment
Slide 12: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 13: Cloudy macro outlook
1 Cloudy macro outlook GDP growth YoY (%) Interest rates (%) Soles reference rate (BCRP) Oct22 Jul22: 1.4% Dollar reference rate (FED) 7.00% 6.75 3.8 Aug22: 1.7% 3.2 3.3 Nov22 2.50 4.00% 1.7 1.00 3.25 0.25 0.25 0.25 0.25 4Q21 1Q22 2Q22 3Q22(E) Jan21 Sep21 Dec21 Sep22 USD/PEN Inflation YoY (%) 4.13 O
Slide 14: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 15: Resilient banking activity, moderating consumer dynamics
Resilient banking activity, moderating 2 consumer dynamics +46% YoY +11% YoY +37% YoY 3.8 4.1 86 77 8.8 9.0 69 6.6 2.8 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Credit cards & personal loans balances Credit cards turnover (S/ bn) Credit cards sales (th units) (S/ bn) +24% YoY -7% YoY +34% YoY 2.5
Slide 16: Growth across all revenue lines in banking
Growth across all revenue lines in 2 banking % YoY +24% +28% +3% +22% +47 +3 +161 1,175 964 3Q21 Net interest and Fee income from Other income 3Q22 similar income financial services, net Banking – Revenue bridge from 3Q21 to 3Q22 (S/ mn) 16
Slide 17: Shift in loan mix and repricing expand NIM further
Shift in loan mix and repricing expand 2 NIM further Reactiva Commercial Mortgages Payroll deduction loans Yield on loans NIM Risk-adjusted NIM Credit cards & personal loans 6% 13% 9.8% 9.1% 42% 8.3% 8.3% 39% 7.9% 4.9% 5.0% 21% 4.4% 4.5% 20% 4.0% 12% 48% 10% 52% 3.6% 3.7% 3.8% Retail 3.3% Retail 21%
Slide 18: Rising funding costs with best LDR among peers
Rising funding costs with best LDR 2 among peers Sep19 Sep21 Sep22 Cost of funds Cost of deposits Interbank 104% 90% 98% 2.8% Bank 1 105% 97% 104% 2.2% 1.8% 2.4% 1.5% 1.6% Bank 2 105% 106% 103% 1.7% 1.2% 0.8% 0.9% Ref. rate YoY Bank 3 110% 124% 128% +575 bps (S/) +300 bps (US$) System 105% System 10
Slide 19: CoR builds up in line with shift in loan mix and new macro outlook
CoR builds up in line with shift in loan 2 mix and new macro outlook NPL coverage 210% 186% 182% FY19: 158% FY19: 10.0% (1) ratio (S2+S3) ratio S3 NPL ratio 1.8% 1.9% FY19: 2.2% 12.8% 12.8% FY19: 2.5% 9.0% 1.1% 2.7% 2.6% 2.5% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Banking – Cost of risk Banking – Non perfomi
Slide 20: Asset quality metrics remain stable
2 Asset quality metrics remain stable Impairment loss on loans, net (S/ mn) Cost of risk 13.4% Total Retail Commercial 23.4% 3.4% 4.5% 2.6% 3.1% 1.7% 1.8% 1.7% 1.9%(1) 1.4% 1.8% 1.9% 1.1% 1,291 13.4% 463 8.5% 313 328 4.3% 4.5% 224 193 210 2.6% 2.5% 1.7% 189 178 199 (1) 3.1% 148 152 1.1% 1.9% 110 0.4
Slide 21: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 22: Positive developments in banking digital indicators
Positive developments in banking 3 digital indicators… 70% 56% 53% 67% 64% 68% 39% 51% 63% Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Digital customers Digital acquisition Digital sales (% of digital customers) (% of monthly retail customers “born digitally” ) (% of products sold digitall
Slide 23: ... as well as in insurance
3 … as well as in insurance 80% 80% 80% 39% 34% 25% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 SOAT digital sales Vida cash life premiums (% of products sold digitally) (% of total life premiums)
Slide 24: Continues solid growth in customer base to over 5 million
Continues solid growth in customer 3 base to over 5 million +17% YoY +29% YoY +19% YoY 4.9 5.1 1.9 2.0 145 138 4.3 1.6 122 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Banking – retail customers (mn) Banking – digital customers (mn) Banking – commercial customers (th) 24
Slide 25: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 26: Strong investment results in insurance
Strong investment results in insurance… 4 Insurance – ROIP (%) Results from investments (S/ mn) +6.4% ‘19-21 avg. 7.9% 240 7.7% 239 216 6.6% 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 +20 bps QoQ | +130 bps YoY -1% QoQ | +11% YoY 26
Slide 27: ... but still impacted in wealth mgmt
… but still impacted in wealth mgmt 4 Wealth mgmt – ROIP(1) (%) Other income (S/ mn) 29.4% 147 +10.4% ‘19-21 avg. -10.3% -68 -26.4% -147 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 27 1) Annualized returns
Slide 28: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 29: Strong growth in number of merchants and transactional volumes
Strong growth in number of merchants and transactional volumes 5 924 799 560 +16% QoQ +5% QoQ +9% YoY +65% YoY 3Q21 2Q22 3Q22 94 Merchants (th) 89 86 E-commerce 13% 16% 18% (%) 13.3 12.0 9.4 +11% QoQ +41% YoY 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Transactions in payments acquirer (S/ bn) Revenues(1) (S/ mn)
Slide 30: 9.0 million users in Plin and 2.3 million in Tunki
9.0 million users in Plin and 2.3 million in Tunki 5 +80% YoY +95% YoY Oct22 8.6 9.0 887 7.5 779 4.8 455 Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Users (mn) Merchants (th) +57% YoY +2x YoY Oct22 2.2 2.3 425 470 2.0 1.4 222 Sep21 Jun22 Sep22 Sep21 Jun22 Sep22 Users (mn) Merchants (th) 30
Slide 31: Transactions accelerating
Transactions accelerating 5 Transactions (units in mn) Oct22 Transactions (units in mn) Oct22 16.4 3.6 14.5 3.1 10.9 2.2 8.5 7.3 1.5 1.2 4.7 0.7 Sep21 Dec21 Mar22 Jun22 Sep22 Sep21 Dec21 Mar22 Jun22 Sep22 +34% QoQ | +3x YoY +43% QoQ | +4x YoY 31
Slide 32: Key messages
Key messages 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 33: Developments on sustainability, improvement in CSA score
Developments on sustainability, improvement in CSA score 6 CSA Score 2022 Latest updates YoY Corporate Sustainability Sustainability programs for 62 +9 pts Assessment employees in leadership positions 38 pts Ind. avg. 2021 Environmental 25 +6 pts 1st loan linked to sustainability in retail sector fo
Slide 34: Operating trends 9M22
Operating trends 9M22 Capital Profitability Loan growth 2022 9M22 2022 9M22 High single digit growth in IBK TCR >15% 15.2% IFS ROE >16% 18.2% total loans led by double digit growth in consumer loans(2) IBK CET1 >11% 11.6% 15.1%(1) 3Q22 growth YoY To remain at sound levels Continued path to recovery
Slide 35: Takeaways
Takeaways 1 Cloudy macro outlook 2 Another solid quarter in core banking activity 3 Positive developments in digital indicators Strong investment 4 results in insurance but still impacted in wealth management 5 Continuous strong growth in payments 6 Developments on sustainability
Slide 36: Financial highlights, Key messages, Results by segment
1 Financial highlights 2 Key messages 3 Results by segment
Slide 37: Banking: Moderating consumer dynamics
Banking Moderating consumer dynamics Performing loans (S/ mn) Breakdown of loans (S/ mn) %chg %chg +2% QoQ | +7% YoY 3Q21 2Q22 3Q22 QoQ YoY Consumer loans Credit cards & other loans 6,577.6 8,774.4 8,998.9 2.6% 36.8% Payroll deduction loans (2) 4,611.2 4,552.2 4,529.1 -0.5% -1.8% 42,386 43,046 Total
Slide 38: Strong growth in retail deposits of 9% QoQ
Strong growth in retail deposits of 9% Banking QoQ, driving mkt. share up to 14.8% Funding breakdown (S/ mn) Funding structure (S/ mn) %chg %chg LDR(2) 90% 101% 98% 3Q21 2Q22 3Q22 QoQ YoY System’s Deposits 46,565.6 43,576.8 45,493.7 4.4% -2.3% 100% 108% 101% Retail 23,290.7 21,686.3 23,726.1 9.4% 1.
Slide 39: Banking: Main financial indicators
Banking Main financial indicators NIM 4.0% 4.9% 5.0% CoR 1.1% 1.8% 1.9% 790 842 193 210 681 110 +7% QoQ +8% QoQ +24% YoY +91% YoY 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Net interest and similar income (S/ mn) Loan provision expense (S/ mn) % 29% 28% 28% C/I 47.1% 42.3% 40.1% Revenues 304 333 481 488 282 468
Slide 40: Insurance: Gross premiums plus collections grew 11% QoQ
Gross premiums plus collections Insurance grew 11% QoQ, 33% mkt share in annuities Gross premiums plus collections – Quarterly evolution (S/ mn) Annuities market 29% 28% 33% share(1) %chg YoY +11% QoQ -4% YoY 327 314 +29% 65 283 84 75 +20% 49 59 77 53 38 -51% 46 136 133 109 -2% 3Q21 2Q22 3Q22 Annuit
Slide 41: Insurance: ROIP at 7.9% in 3Q22
Insurance ROIP at 7.9% in 3Q22 Investment portfolio (S/ mn) Results from investments (S/ mn)(1) ROIP 6.6% 7.7% 7.9% 12,871 240 239 12,162 11,968 1,242 216 1,280 1,285 1,082 863 868 10,547 10,019 9,815 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Fixed Income Equity and Mutual Funds Real Estate -2% QoQ | -7% YoY -1
Slide 42: Wealth management: AUM restrained, loans start to pick up
AUM restrained due to market trends, Wealth management yet loans start to pick up AUM (S/ mn) Deposits (S/ mn) Loans (S/ mn) 23,586 4,718 1,926 21,424 21,992 1,755 1,769 3,943 4,019 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 +3% QoQ | -7% YoY +2% QoQ | -15% YoY +9% QoQ | +10% YoY 42
Slide 43: Wealth management: Revenues recover on lower losses in other income
Revenues recover due to lower losses Wealth management in other income and higher NII Fees / Avg. 0.9% 0.8% 0.7% AUM(1) 31 50 26 24 45 40 +29% QoQ -10% QoQ +19% YoY -20% YoY 3Q21 2Q22 3Q22 3Q21 2Q22 3Q22 Net interest and similar income (S/ mn) Fees from financial services (S/ mn) 147 223 -68 -54% Qo
Slide 44: Appendix
Appendix
Slide 45: bps expansion in IFS' 9M22 NIM
90 bps expansion in IFS’ 9M22 NIM IFS revenues (S/ mn) NIM 4.0% 4.9% 4,683 3,312 1,216 4,570(1) 1,140 Insurance 2,920 Banking 9M21 9M22 9M21 9M22 +13% YoY -6%YoY management Payments(2) 480 271 211 Wealth -33 9M21 9M22 9M21 9M22 9M21 9M22 -2% YoY n.m. YoY +28% YoY 45 1) IFS’ revenues in 9M22 were S/
Slide 46: Reactiva loan balances down 47% YoY
Reactiva loan balances down 47% YoY, representing 6% of total portfolio Reactiva Peru loan balances by segment (S/ bn) 3Q22 5.5 Segment YoY Corporate -80% 3.5 Mid-sized -49% 2.9 SME -35% Total -47% 3Q21 2Q22 3Q22 46 SME Mid-sized Corporate
Slide 47: Rescheduled loans decreased 58%
Rescheduled loans decreased 58% Banking – Rescheduled loans (S/ bn) Clients 343 459 224 8.6 (Thousand) 6.9 Rescheduled 30% 31% 12% Retail 3.9 balance (%) 12.7 Apr20 Jun20 Sep22 10.9 Commercial Total 5.3 4.0 4.1 1.4 Apr20 Jun20 Sep22 Apr20 Jun20 Sep22 47
Slide 48: Manageable dollarization levels
Manageable dollarization levels Total loans Retail loans Commercial loans % PEN 67% 72% 87% 92% 57% 61% System 8% 5% 26% 27% 47% 50% 92% 95% 74% 73% 53% 50% 3Q17 3Q22 3Q17 3Q22 3Q17 3Q22 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Micro 95% 96% 80% 9
Slide 49: IFS' 3Q22 statement of financial position
IFS’ 3Q22 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Assets Cash and due from banks and inter-bank 20,330.7 12,504.0 12,941.6 3.5% -36.3% funds Financial investments 24,154.7 23,594.4 24,899.4 5.5% 3.1% Lo
Slide 50: IFS' 3Q22 P&L
IFS’ 3Q22 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Interest and similar income 1,170.5 1,392.1 1,547.1 11.1% 32.2% Interest and similar expenses -270.6 -360.3 -462.9 28.5% 71.1% Net interest and similar income 899.9 1,031.8 1,084.2 5.1% 20.5% Impair
Slide 51: Banking segment's 3Q22 statement of financial position
Banking segment’s 3Q22 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Assets Cash and due from banks and inter-bank 17,433.8 10,676.2 11,144.2 4.4% -36.1% funds Financial investments 9,337.6 10,525.3 12,025.9 14.3% 28.8% L
Slide 52: Banking segment's 3Q22 P&L
Banking segment’s 3Q22 P&L Banking Segment's P&L statement S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Interest and similar income 907.0 1,107.4 1,260.6 13.8% 39.0% Interest and similar expenses -225.9 -316.9 -418.6 32.1% 85.3% Net interest and similar income 681.1 790.5 842.0 6.5% 23.6% Impairment
Slide 53: Insurance segment's 3Q22 statement of financial position
Insurance segment’s 3Q22 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Assets Cash and due from banks and inter-bank 907.1 538.8 663.7 23.2% -26.8% funds Financial investments 11,629.3 10,882.4 10,683.9 -1.8% -8.1% Prop
Slide 54: Insurance segment's 3Q22 P&L
Insurance segment’s 3Q22 P&L Insurance Segment's P&L statement S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Interest and similar income 224.8 249.9 243.2 -2.7% 8.2% Interest and similar expenses -31.8 -31.6 -31.2 -1.3% -2.0% Net interest and similar income 193.0 218.3 212.0 -2.9% 9.9% Recovery (loss)
Slide 55: Wealth management segment's 3Q22 statement of financial position
Wealth management segment’s 3Q22 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Assets Cash and due from banks and inter-bank 2,048.5 1,210.8 1,107.6 -8.5% -45.9% funds Financial investments 2,474.3 1,952.8 1,971
Slide 56: Wealth management segment's 3Q22 P&L
Wealth management segment’s 3Q22 P&L Wealth Management Segment's P&L statement S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Interest and similar income 36.7 34.6 43.3 25.0% 17.9% Interest and similar expenses -10.6 -10.6 -12.4 16.6% 16.5% Net interest and similar income 26.1 24.0 30.9 28.7% 18.5% Imp
Slide 57: Payments segment's 3Q22 statement of financial position
Payments segment’s 3Q22 statement of financial position Payments Segment' Statement of financial position ( 1) S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Assets Cash and due from banks and inter-bank 82.8 185.5 104.7 -43.6% 26.5% funds Financial investments - - - - - Loans, net of unearned interest
Slide 58: Payments segment's 3Q22 P&L
Payments segment’s 3Q22 P&L Payments Segment's P&L statement ( 1) S/ million %chg %chg 3Q21 2Q22 3Q22 QoQ YoY Interest and similar income 0.0 0.2 0.5 n.m. n.m. Interest and similar expenses -0.6 -0.5 -0.4 -18.7% -37.4% Net interest and similar income -0.6 -0.3 0.1 n.m. n.m. Fee income from financial
Slide 59: Definitions
Definitions Concept Definition Net interest and similar income + Fee income from financial services + Other income + Net Total revenues premiums earned (Salaries and employee benefits + Administrative expenses + Depreciation and amortization) Efficiency ratio / (Net interest and similar income + Fee
Slide 60: 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 61: Intercorp Financial Services
[J Intercorp Financial rVviC
Intercorp Financial Services — Q3 2022 Earnings Presentation on 6ix