Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q4 2020 Earnings Presentation
57 slides from Intercorp Financial Services's earnings presentation, February 2021
Slide 1: Earnings Presentation 4Q20 & FY20 Results
Earnings Presentation 4Q20 & FY20 Results
Slide 2: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 1
Slide 3: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 2
Slide 4: IFS profitability recovers in 4Q20
IFS profitability recovers in 4Q20 Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 20.3%(1) 16.7%(2) 18.1%(2) ROAE 23.6%(1) 11.5%(2) 13.7%(2) -11.4% -43.3% 442(1) 391(2) 366(1) 29 339(2) 14 29 20 208(2) 167(2) 413 377 337 14 319 20 147 194 4Q19 3Q20 4Q20 4
Slide 5: IFS FY20 earnings impacted by higher provisions at Interbank
IFS FY20 earnings impacted by higher provisions at Interbank Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 18.6%(1) 6.0%(2) ROAE 21.3%(3) 2.0%(2) 1,479(1) 29 1,229 3 1,450 514(2) 1,225(3) 130 125(2) 384 130 -6 2019 2020 2019 2020 Insurance Wealth Managem
Slide 6: Highlights
Highlights FY20 profits undermined by high provisions and soft top line due to COVID-19, yet recovering in 4Q20 • 12.8% (+20 bps YoY) market share in loans and 13.9% (+40 bps YoY) in retail deposits by year-end • 150 bps YoY reduction in cost of funds, down to 1.6% in 4Q20 Banking • FY20 cost of ris
Slide 7: IFS key indicators
IFS key indicators Intercorp Financial Services Business segments 18.6% 20.3% 18.1% 5.8% 4.8% 5.7% 4.9% 16.7% 4.4% ROAE(1) 6.0% NIM(1) 4Q19 3Q20 4Q20 2019 2020 4Q19 3Q20 4Q20 2019 2020 2.3% 4.5% 2.1% 6.1% 1.5% 1.7% 2.8% 3.1% Cost of 2.6% ROAA 0.5% risk(2) 4Q19 3Q20 4Q20 2019 2020 4Q19 3Q20 4Q20 2019
Slide 8: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 7
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 IFS 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) 11.5% 3.7% 3.6% 13.3% 14.1% 12.3% TBU 7.7% 8.7% -2.0% -3.7% 4.4% -6.9% -11.5% -14.2% -12.2% -17.9% -2.0% -4.6% -39.2% -42.2% Feb20 Apr20 Jun20 Sep20 Dec20(E) FY20(E) FY21(E) Feb
Slide 11: Continued improvement in our core operating indicators
Continued improvement in our core operating 1 indicators Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 113 111 100 100 100 119 121 94 100 38 52 8 Feb20 Apr20 Dec20 Jan21 Feb20 Apr20
Slide 12: New lockdown, yet not as restrictive as in 2020
1 New lockdown, yet not as restrictive as in 2020 New lockdown New government measures Extension of grace periods and tenors of Reactiva Peru loans State of emergency extended until February 28 Cash transfers of S/ 600 to 4.2 million households Focalized lockdowns implemented from January Cash trans
Slide 13: Liquidity levels remain high in 4Q20 with growing deposit base at Interbank
Liquidity levels remain high in 4Q20 with 2 growing deposit base at Interbank Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of December 31, 2020 S/ million Total LDR MS total 13.3% 13.1% 13.3% deposits 110% MS retail 13.5% 13.9% 13.9% 93% 96% 97% System: deposits 97% +25.3%
Slide 14: Strengthened capital ratios at all IFS' segments
2 Strengthened capital ratios at all IFS’ segments 165.7% 155.0% 144.5% Banking System 14.6% 15.6% 15.4% 100.0% regulatory TCR minimum 17.0% 17.0% 4Q19 3Q20 4Q20 15.2% 11.6% 11.4% 11.5% Solvency ratio 10.7% regulatory minimum 17.0% 17.0% 15.2% 28.4% 24.7% 23.8% 4Q19 3Q20 4Q20 4Q19 3Q20 4Q20 8.0% Tot
Slide 15: Continuous improvement in our digital indicators
Continuous improvement in our digital 3 indicators Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally 75% 51% 58% 42% 63% 32% Dec19 Dec20 Dec19 Dec20 Dec19 Dec20 Interbank – Retail digital acqu
Slide 16: Growing customer base, thanks to digital
3 Growing customer base, thanks to digital Interbank - Retail customers Interbank - Commercial customers Thousand Thousand +14.4% +45.7% 4,001 104 3,498 71 Dec19 Dec20 Dec19 Dec20 Interbank - Retail 100% digital customers Interbank - Tunki & Plin users Thousand N° of users (thousand) +111.8% Tunki I
Slide 17: Lower rescheduled loan balances
4 Lower rescheduled loan balances Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 385 41% (Thousand) at System Level(1) Clients 343 459 400 24% Rescheduled 34% 43% (Thousand) 39% at System balance (%) Level(1) Rescheduled 8.6 30% 31% 25% 6.9
Slide 18: 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 17.0 17.1 Payments of rescheduled loans 16.6 Collected Requested relief Not paid 6.5 6.3 92.6% 96.2% 1.2% 0.5% 6.2% 3.3% 6.
Slide 19: Quarterly provision expenses closer to pre COVID-19 levels
Quarterly provision expenses closer to pre 4 COVID-19 levels Interbank - Cost of risk Interbank - Non-performing exposure NPL 117.7% 181.5% coverage ratio 4.5% 6.1% 15.1% 14.2% 3.1% 2.8%(1) 8.9% 2.6%(1) 2.9% 3.4% 3.6% 4Q19 3Q20 4Q20 2019 2020 4Q19 3Q20 4Q20 (S2+S3) ratio NPL ratio (S3 + refinanced l
Slide 20: Cost containment measures in 2020 offset negative impacts from COVID-19 on revenues
Cost containment measures in 2020 offset 5 negative impacts from COVID-19 on revenues Interbank - Other expenses bridge from 4Q19 to 4Q20 Other expenses YoY growth by line 2020 growth +5.8% -17.8% -12.7% -3.3% -8.3% (1) IFS -5% +4 (1) Interbank-7% -29 -5 -4 413 379 Interseguro -4% Inteligo 4% 4Q19 T
Slide 21: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 20
Slide 22: Key banking indicators recovering from COVID-19 impact
Key banking indicators recovering from COVID-19 Banking impact Net interest and similar income Loan provision expense S/ million S/ million Negative NIM(1) 5.8% 4.8% 4.4% Cost of risk 2.8%(2) 4.5% 3.1% impact on provisions from NIM(1) excl. Reactiva Peru: COVID-19 4.9% NIM after 3.8% 1.9% 2.5% provi
Slide 23: Market share in loans reached 12.8%
Banking Market share in loans reached 12.8% Performing loans Breakdown of loans S/ million S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY System’s growth(1) Consumer loans Credit cards 5,870.0 4,895.4 4,339.5 -11.4% -26.1% Payroll deduction loans (2) 4,302.4 4,292.5 4,318.9 0.6% 0.4% +12.1% Other consu
Slide 24: Reactiva Peru Program as an opportunity to gain relevance in mid-sized and SME segments
Reactiva Peru Program as an opportunity to gain Banking relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +39.4% 20,545 +6.6.% 22,639 -1.5% 22,308 9,556 9,114 8,549 725 16,000 6,709 6,617 3,833 573 16,000 8,830 8,541 15,929 15,
Slide 25: Strong deposit franchise with cost of funds down 150 bps YoY
Strong deposit franchise with cost of funds down Banking 150 bps YoY Funding structure Funding breakdown S/ million S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY LDR(2) 101.6% 99.0% 93.3% Deposits 35,577.8 42,538.2 44,576.8 4.8% 25.3% Retail 15,981.9 19,561.2 20,810.5 6.4% 30.2% System’s Commercial(1)
Slide 26: Capitalization remains at comfortable levels, substantially above minimum requirement
Capitalization remains at comfortable levels, Banking substantially above minimum requirement Tier I Tier II CET1 Banking system 14.6% 14.3% 14.8% 15.6% 15.4% Total Capital 17.0% 17.0% 16.7%(1) Ratio 16.1% 15.2% 14.7% 4.0% 5.5% 5.5% 3.9% 3.4% • Interbank’s capital ratio of 17.0%, above 12.0% regulat
Slide 27: Interbank was recognized with three important awards in 2020
Interbank was recognized with three important Banking awards in 2020 Best Bank Bank of the Year Bank of the Year Peru Peru Peru 26
Slide 28: Private and regular annuities leading recovery in premiums
Private and regular annuities leading recovery Insurance in premiums Gross premiums plus collections – Quarterly evolution Gross premiums plus collections – Monthly evolution S/ million S/ million Annuities market 25.3% 27.5% 27.6% YoY %Chg. 23.4% share(1) +19.1% 83 228 70 19 191 56 172 22 54 14 61
Slide 29: Investment portfolio increased 5.9% QoQ, ROIP at 6.8%
Investment portfolio increased 5.9% QoQ, ROIP Insurance at 6.8% Investment portfolio Results from investments(1) S/ million S/ million ROIP(2) 5.8% 6.3% 6.8% Impact on investments: 4Q19: S/ -16 mm +12.1% +28.0% 3Q20: S/ +9 mm 13,939 229 4Q20: S/ +31 mm 13,163 1,044 12,436 1,045 203 1,250 972 1,205 1
Slide 30: Strong revenues in 4Q20, positively affected by M2M on the investment portfolio
Strong revenues in 4Q20, positively affected Wealth Management by M2M on the investment portfolio Net interest and similar income Fees from financial services S/ million S/ million Fees / Avg. 1.0% 0.8% 0.8% AUM(1) +63.4% -13.9% 47 40 40 40 25 25 4Q19 3Q20 4Q20 4Q19 3Q20 4Q20 Other income Revenues S
Slide 31: AUM grew 5.6% QoQ and 14.7% YoY
Wealth AUM grew 5.6% QoQ and 14.7% YoY Management AUM Loans S/ million S/ million +14.7% +2.2% 19,880 20,989 1,661 18,293 1,625 1,624 4Q19 3Q20 4Q20 4Q19 3Q20 4Q20 Other expenses Net profit S/ million S/ million ROAE 33.6% 53.5% 62.8% Positive +18.3% impact on investments: >2X S/ +108 mm 39 33 27 15
Slide 32: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 31
Slide 33: Operating trends 2021
Operating trends 2021 Capital Profitability Loan growth To remain at sound levels, well Slow recovery in retail, above regulatory requirements IFS ROAE >14% and decreasing volumes in IBK TCR > 15% commercial IBK CET1 > 11% Revenues Cost of risk Efficiency Soft top line recovery Lower cost of risk Pr
Slide 34: Committed to a vision of sustainability
Committed to a vision of sustainability E S G (Environmental) (Social) (Governance) Operational eco-efficiency and waste Community; Diversity, Equity and Corporate governance, Ethics and management(1) Inclusion integrity 4 out of 7 independent OxI directors 31 Tons less paper Board of Specialized co
Slide 35: Summary
Summary 1 2 3 4 5 Activity recovering Strong balance Digital trends support Lower provisions continue Continued focus despite macro and sheet IFS strategy to reflect better payment on efficiency political uncertainty behavior 34
Slide 36: Appendix
Cd Intercorp Financial Services Appendix
Slide 37: Relevant net income of S/ 765 million in 2020
Relevant net income of S/ 765 million in 2020 Local GAAP & IFRS Interbank – Local GAAP Interseguro – Local GAAP Inteligo – IFRS Net profit in S/ million Net profit in S/ million Net profit in S/ million ROAE 22.0% 4.3% 31.9% 18.0% 24.7% 28.0% 1,222 436 243 200 257 (1) 273 265 (2) 167 2019 2020 2019
Slide 38: IFS revenues
IFS revenues Intercorp Financial Services(1) Banking(1,2) S/ million S/ million +6.4% -4.2% 1,527 1,534 5,404 5,673 1,441 1,068 1,043 4,035 4,032 149 125 421 515 1,023 107 777 382 444 182 268 282 592 107 120 112 723 220 153 827 620 250 175 186 926 163 902 935 941 3,466 3,658 741 771 747 2,826 2,968
Slide 39: IFS 4Q20 statement of financial position
IFS 4Q20 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Assets Cash and due from banks and inter-bank 11,213.9 17,573.1 18,783.6 6.9% 67.5% funds Financial investments 19,072.7 22,787.9 24,277.1 6.5% 27.3% Loa
Slide 40: IFS FY20 P&L
IFS FY20 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 2018 2019 2020 20/19 19/18 Interest and similar income 4,321.3 4,847.2 4,665.0 -3.8% 12.2% Interest and similar expenses -1,177.3 -1,424.0 -1,192.3 -16.3% 21.0% Net interest and similar income 3,144.0 3,423.3 3,472.7 1.4%
Slide 41: IFS 4Q20 P&L
IFS 4Q20 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Interest and similar income 1,249.9 1,186.1 1,187.2 0.1% -5.0% Interest and similar expenses -390.0 -279.4 -266.5 -4.6% -31.7% Net interest and similar income 859.9 906.6 920.7 1.6% 7.1% Impairment l
Slide 42: Banking segment's 4Q20 statement of financial position
Banking segment’s 4Q20 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Assets Cash and due from banks and inter-bank 9,870.9 16,338.4 17,720.5 8.5% 79.5% funds Financial investments 5,574.5 8,470.4 8,966.3 5.9% 60.8% Loans,
Slide 43: Banking segment's FY20 P&L
Banking segment’s FY20 P&L Banking Segment's P&L statement S/ million %chg %chg 2018 2019 2020 20/19 19/18 Interest and similar income 3,559.1 4,074.0 3,836.4 -5.8% 14.5% Interest and similar expenses -1,067.7 -1,290.1 -1,053.4 -18.3% 20.8% Net interest and similar income 2,491.4 2,783.9 2,783.1 0.0
Slide 44: Banking segment's 4Q20 P&L
Banking segment’s 4Q20 P&L Banking Segment's P&L statement S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Interest and similar income 1,051.7 987.0 959.2 -2.8% -8.8% Interest and similar expense -353.2 -244.8 -231.9 -5.3% -34.3% Net interest and similar income 698.5 742.1 727.3 -2.0% 4.1% Impairment lo
Slide 45: Banking segment's net profit IFRS vs. Local GAAP
Banking segment’s net profit IFRS vs. Local GAAP Net profit – IFRS Net profit bridge from Local GAAP to IFRS (4Q20) S/ million S/ million Includes S/ 1.1 mm adjustment due -43.3% to adoption of IFRS 16 366(1) Retail: 29 S/ +177 mm 238 60 208(2) Commercial: 167(2) 337 14 S/+61 mm 20 147 194 194 4Q19
Slide 46: Dollarization decreased in retail and commercial loans
Dollarization decreased in retail and commercial loans Total loans Retail loans Commercial loans % PEN 70% 75% 91% 91% 58% 67% System 6% 6% 26% 22% 36% 51% 94% 94% 74% 78% 64% 49% 2019 2020 2019 2020 2019 2020 Retail loans breakdown Commercial loans breakdown Consumer(1) Credit cards Mortgages Corpo
Slide 47: Insurance segment's 4Q20 statement of financial position
Insurance segment’s 4Q20 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Assets Cash and due from banks and inter-bank 459.4 447.6 358.0 -20.0% -22.1% funds Financial investments 11,463.7 12,118.7 12,895.0 6.4% 12.5% Prop
Slide 48: Insurance segment's FY20 P&L
Insurance segment’s FY20 P&L Insurance Segment's P&L statement S/ million %chg %chg 2018 2019 2020 20/19 19/18 Interest and similar income 611.0 612.5 655.0 6.9% 0.3% Interest and similar expenses -61.1 -72.5 -84.0 15.9% 18.7% Net interest and similar income 549.9 540.1 571.0 5.7% -1.8% Recovery (lo
Slide 49: Insurance segment's 4Q20 P&L
Insurance segment’s 4Q20 P&L Insurance Segment's P&L statement S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Interest and similar income 155.6 160.5 176.0 9.6% 13.1% Interest and similar expenses -20.8 -20.7 -22.7 9.7% 9.2% Net interest and similar income 134.8 139.8 153.2 9.6% 13.7% Recovery (loss) d
Slide 50: Higher net claims and benefits offset by a recovery in premiums
Higher net claims and benefits offset by a recovery in premiums Net premiums Adjustment of technical reserves S/ million S/ million 178 10 165 140 55 59 54 38 34 35 71 86 -53 -58 50 4Q19 3Q20 4Q20 4Q19 3Q20 4Q20 Annuities Individual life Retail Insurance D&S Net claims and benefits incurred Net insu
Slide 51: Insurance segment's net profit IFRS vs. Local GAAP
Insurance segment’s net profit IFRS vs. Local GAAP Net profit – IFRS Net profit bridge from Local GAAP to IFRS (4Q20) S/ million S/ million +8.7% 67 35 38 18 4 6 4Q19 3Q20 4Q20 4 17 14 89 16 Net profit – Local GAAP S/ million 38 +139.1% 108 Net profit Net Recurrent Net gain on Other Impairment Trans
Slide 52: Wealth management segment's 4Q20 statement of financial position
Wealth management segment’s 4Q20 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Assets Cash and due from banks and inter-bank 697.5 854.8 596.8 -30.2% -14.4% funds Financial investments 1,592.0 1,725.1 1,881.0 9.
Slide 53: Wealth management segment's FY20 P&L
Wealth management segment’s FY20 P&L Wealth Management's P&L statement S/ million %chg %chg 2018 2019 2020 20/19 19/18 Interest and similar income 154.1 168.0 163.4 -2.7% 9.0% Interest and similar expenses -44.1 -61.5 -51.7 -16.0% 39.4% Net interest and similar income 110.0 106.5 111.8 4.9% -3.2% Im
Slide 54: Wealth management segment's 4Q20 P&L
Wealth management segment’s 4Q20 P&L Wealth Management's P&L statement S/ million %chg %chg 4Q19 3Q20 4Q20 QoQ YoY Interest and similar income 41.0 37.9 51.1 34.9% 24.8% Interest and similar expenses -16.3 -12.8 -10.8 -16.3% -33.9% Net interest and similar income 24.7 25.1 40.4 61.1% 63.4% Impairmen
Slide 55: 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 56: 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
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Intercorp Financial Services — Q4 2020 Earnings Presentation on 6ix