Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Investor Presentation (April 2021)
44 slides from Intercorp Financial Services's investor presentation, April 2021
Slide 1: Management Presentation April 2021
Management Presentation April 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 Interbank’
Slide 3: Interbank at a glance
CJ Interbank Interbank at a glance
Slide 4: Leading bank in Peru with strong financial performance
Leading bank in Peru with strong financial performance Financial highlights Leading position in the Peruvian financial system(1) As of December 31, 2020 Assets S/ 67,824 mm 3 1 1 Gross loans S/ 41,594 mm 4.3% 27.5% 26.7% Deposits S/ 44,596 mm Market share in Market share in ROE credit cards payroll
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: Milestones in Interbank's history
Milestones in Interbank’s history Interbank issues $300 million in subordinated Tier 2 bonds in the international capital markets Interbank issues $200 Interbank issues $200 million in senior bonds million in hybrid Tier 1 in the international bonds in the capital markets, IFS executes a SEC Interco
Slide 7: Strategically positioned to capture significant growth opportunities in Peru
Strategically positioned to capture significant growth opportunities in Peru What differentiates 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 a
Slide 8: Scalable digital platform already in place
Scalable digital platform already in place 2010 - 2014 2015 - 2018 2019 - Onwards Store-centric model Omnichannel platform with Search for focused on physical strong focus on digital and exponential growth convenience analytics • Transactional online banking • Digital sales and self-service capabili
Slide 9: Key messages
Key messages 1 2 3 4 5 Activity recovering Strong balance Digital trends support Lower provisions continue Continued focus despite macro and sheet Interbank’s strategy to reflect better payment on efficiency political uncertainty behavior 8
Slide 10: Moderate recovery in macro activity
1 Moderate recovery in macro activity GDP Mining and fuel GDP Credit to private sector (YoY % Chg) (YoY % Chg) (YoY % Chg) 3.6% 14.1% 13.3% 12.3% 11.6% 8.7% 10.0% TBU 7.7% -3.7% 4.4% -8.5% -5.3% -14.2% -12.2% 10.7% -2.0% -4.6% -5.3% -6.7% -42.2% 3.7% 0.5% Feb20 Apr20 Jun20 Sep20 Dec20 Jan21 Feb21 Fe
Slide 11: Government measures 2021
1 Government measures 2021 New government measures and extension of loan relief programs Rescheduling program for up to S/ 19.5 bn (32% of the initial program) Extension of grace periods and tenors of Reactiva Peru loans Applications deadline: 15th July 2021 Cash transfers of S/ 600 to 4.2 million h
Slide 12: Evolution of our core operating indicators
1 Evolution of our core operating indicators Credit and debit cards turnover (Index; 100 = Feb20) Payroll deduction loans disbursements (Index; 100 = Feb20) 113 111 105 100 100 100 94 82 38 8 Feb20 Apr20 Dec20 Jan21 Feb21 Feb20 Apr20 Dec20 Jan21 Feb21 Mortgages disbursements (Index; 100 = Feb20) Net
Slide 13: Reactiva Peru Program as an opportunity to gain relevance in mid-sized and SME segments
Reactiva Peru Program as an opportunity to gain 1 relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +35.7% 20,545 +3.9% 22,308 21,720 9,114 8,886 8,549 16,000 6,617 6,460 3,833 573 525 16,000 8,541 8,361 15,691 15,260 Mar20 Dec
Slide 14: Liquidity levels remain high with growing deposit base
Liquidity levels remain high with growing 2 deposit base Loan to deposit ratio (LDR) Total deposits % as of December 31, 2020 S/ million MS total 13.3% 13.1% 13.3% deposits 110% MS retail 13.5% 13.9% 13.9% 93% 96% 97% System: deposits 97% +25.2% 44,596 42,555 35,610 Interbank BCP BBVA Scotiabank 4Q1
Slide 15: Strengthened capital ratios
2 Strengthened capital ratios Key initiatives Capital ratio evolution Solvency Banking System 14.6% 15.6% 15.4% 15.4%(1) TCR • Capitalization of 2019 earnings to strengthen CET1 and TCR ratio 17.0%) 17.0% 16.8% 11.6% 11.6% 11.4% 11.5% 15.2% • Called USD 200 million hybrid Tier 1 bond to reduce inter
Slide 16: Continuous improvement in our digital indicators
Continuous improvement in our digital 3 indicators Digital users and 100% digital consumers Digital sales % of products sold digitally Digital users 100% digital customers 75% 51% 58% 42% 63% 32% Dec19 Dec20 Dec19 Dec20 Dec19 Dec20 Retail digital acquisition Savings accounts % of monthly retail cust
Slide 17: Growing customer base, thanks to digital
3 Growing customer base, thanks to digital Retail customers Commercial customers Thousand Thousand +14.4% +45.7% 4,001 104 3,498 71 Dec19 Dec20 Dec19 Dec20 Retail 100% digital customers Tunki & Plin users Thousand N° of users (thousand) +111.8% Tunki IBK 39.0% 2,628 1,317 762 622 162 224 Dec19 Dec20
Slide 18: Lower rescheduled loan balances
4 Lower rescheduled loan balances Loan rescheduling Retail loans rescheduling S/ billion S/ billion Clients 332 441 348 41% (Thousand) at System Level(1) Clients 343 459 361 24% Rescheduled 34% 43% (Thousand) 36% at System balance (%) Level(1) Rescheduled 8.6 30% 31% 24% 6.9 6.9 balance (%) 12.7 Apr
Slide 19: Improving payment behavior among Interbank's retail clients
Improving payment behavior among Interbank’s 4 retail clients Retail loan balances with payments due Payment behavior S/ billion % of retail loans with 96% 99% 99% payments due Payments of rescheduled loans 17.0 17.1 16.6 Collected Jan21 Requested relief Not paid 96.2% 6.6 6.5 6.2 (36%) 92.6% 94.8%
Slide 20: High provisions following a precautionary approach
High provisions following a precautionary 4 approach Cost of risk Past due loans Coverage 176.5% 239.8% 202.3% ratio 5.7% 5.4% 3.4% 5.1% 2.6% 2.7% 2.9% 2.7% 4Q19 3Q20 4Q20 2019 2020 4Q19 3Q20 4Q20 Cost of risk – Retail banking Cost of risk – Commercial banking 10.6% 9.0% 1.1% 9.8% 1.6% 1.1% 0.6% 4.4
Slide 21: Efficiency as our guiding principle to deal with the adverse environment
Efficiency as our guiding principle to deal with 5 the adverse environment Optimizing our distribution channels Reducing total expenses(3) following cost containment measures Units 2018 2020 % Change Financial -9.8% 270 215 -20% stores ATMs 1,975 1,640 -17% 402 1,570 358 363(4) 1,456(4) Corresponden
Slide 22: Summary & Trends
Summary & Trends 1 2 3 4 5 Activity recovering Strong balance Digital trends support Lower provisions continue Continued focus despite macro and sheet Interbank’s strategy to reflect better payment on efficiency political uncertainty behavior 21
Slide 23: Operating trends 2021
Operating trends 2021 Capital Loan growth To remain at sound levels, well above regulatory requirements Slow recovery in retail, and decreasing volumes in commercial TCR > 15% CET1 > 11% Revenues Cost of risk Soft top line recovery Pressure on NII and NIM despite lower cost Lower cost of risk after
Slide 24: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 25: Highlights
Highlights Unique and diversified bank with 01. ready-to-scale omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 26: 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 December 2020) Gross loans breakdown (as of December 2020) Banking System Credit Commercial Commercial Credit Cards Cards 68.2% 53.6% Mortgages 26.4%
Slide 27: 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 December 2020 Commercial loans Retail loans Total loans Interbank System 3.8% 3.0% 3.0% 3.0% Scotiabank Scotiabank 4.6
Slide 28: 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 2020 13.3% MS 2014 12.1% MS 2020 13.9
Slide 29: 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 Increasing levels of adoption • Predictive and prescriptive models to improve and customer satisfaction effectiveness • Machine learning and deep learning
Slide 30: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 31: Sustained loan growth supported by appropriate funding
Sustained loan growth supported by appropriate funding Total gross loans Total deposits S/ mm S/ mm 41,594 44,596 36,166 32,518 35,610 27,876 30,595 31,323 2017 2018 2019 2020 2017 2018 2019 2020 Total assets Net shareholders’ equity S/ mm S/ mm 6,029 6,183 67,824 5,307 52,303 4,757 45,322 47,128 20
Slide 32: Interbank's profitability impacted by COVID-19
Interbank’s profitability impacted by COVID-19 Total revenues (1) Net interest margin (NIM) S/ mm 4,093 (2) 3,791 5.7% 5.7% 5.9% 3,614 3,346 4.8% 2017 2018 2019 2020 2017 2018 2019 2020 Net profit evolution ROE S/ mm 1,222 22.0% 20.7% 21.3% 1,040 902 265 4.3% 2017 2018 2019 2020 2017 2018 2019 2020
Slide 33: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 34: Evolving cultural transformation
Evolving cultural transformation Comprehensive transformational approach New initiatives We are User side by side IT with Peruvians so they can reach their dreams, today Org More than 100 teams working with agile framework Innovation Labs Over 400 workers organized in more than 80 squads 33
Slide 35: A Great Place to Work with a distinctive culture
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 #6 for women in Peru for the past 19 years in 2
Slide 36: Strong corporate governance
Strong corporate governance Board of Directors BOD with majority of independent members Carlos Rodríguez-Pastor Chairman Interbank: 5 out of 9 Strong corporate Ramón Barúa Fernando Zavala governance Director Director Relevant committees: Felipe Morris Cayetana Aljovín - Audit Director Independent Di
Slide 37: Highlights
Highlights Unique and diversified bank with ready-to-scale 01. omnichannel platform Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and corporate governance
Slide 38: Appendix
CJ Interbank oom ae Appendix
Slide 39: Historical macroeconomic performance
Historical macroeconomic performance Growing economy with low inflation levels Growing GDP per capita and declining poverty rates 2015 – 2019 average consumer price GDP per capita (US$) % of population in poverty 2015 – 2019 average real GDP growth rate inflation rate LatAm Peers LatAm Peers 5.7% 3.
Slide 40: Sound and profitable financial system with low penetration levels
Sound and profitable financial system with low penetration levels Gross loans growth High asset quality Banking system gross loans (S/ bn) Banking system cost of risk and PDL ratio PDL 3.0% 3.0% 3.0% 3.8% ratio CAGR 326 2017-20 286 3.9% 271 246 6.7% 222 2.1% 176 181 1.9% 2.0% 160 11.5% 85 95 105 104
Slide 41: Interbank's income statement
Interbank’s income statement % chg % chg Incom e S t a t e m e nt ( S / m m ) 2017 2018 2019 2020 '19 / '18 '20/ '19 Interest income 3,369.4 3,589.8 4,094.8 3,865.1 14.1% (5.6%) Interest expenses (1,010.3) (1,040.7) (1,231.0) (983.9) 18.3% (20.1%) Gr os s fina ncia l m a r g in (1 ) 2, 359 . 0 2, 54
Slide 42: Interbank's balance sheet
Interbank’s balance sheet % chg % chg Fina ncia l St a t e m e nt s 2017 2018 2019 2020 '19/'18 '20/'19 As s e t s Cash and due from banks 11,036.5 8,209.9 9,861.5 17,716.8 20.1% 79.7% Investments, net (1) 6,076.4 5,790.4 5,559.4 8,951.2 (4.0%) 61.0% Loan portfolio, net 26,771.4 31,268.5 34,739.2 39
Slide 43: Definitions
Definitions Concept Definition Total revenues Gross financial margin + fee income from financial services, net + gain on financial transactions Efficiency ratio (Administrative expenses + Depreciation + amortization) / (total revenues) NIM (Annualized gross financial margin) / (Average interest-earn
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