Banco De Chile · BCS:CHILE
Banco De Chile — Investor Presentation (July 2021)
40 slides from Banco De Chile's investor presentation, July 2021
Slide 1: Corporate Investor Presentation 2021
CORPORATE INVESTOR CORPORATE INVESTOR 2021 PRESENTATION PRESENTATION
Slide 2: Contents
1.Chilean Macro Environment CONTENTS 1. 2.Chilean Banking Industry 2. 3. Banco de Chile Overview 4. 1Q21 Financial Results
Slide 3: 1. Chilean Macro Environment
1. Chilean Macro Environment 3
Slide 4: Chile: Key Factors of Development
Chile Key Factors of Chile’s Development • Strong structural reforms implemented in previous decades Strong Relative Position • Policy framework based on fiscal and monetary rules • Deep integration into the global economy, with floating exchange rate Global Competitiveness Index World Economic Foru
Slide 5: Snapshot of the Chilean Economy
Snapshot of the Chilean Economy FDI in Chile (Stock, 2019) FDI in Chile (Stock, 2019) An Economy Open to the World • Free Trade Agreements with 85% United States 13% Mining 32% Global GDP Spain 13% Financial Services 23% • Foreign Direct Investment 5% of Canada 13% Electricity, Gas & Water 13% GDP i
Slide 6: The consolidation of a positive trend
4% 9% 14% -16% -11% -6% -1% 0 2 4 6 8 10 12 14 May-14 May-11 Nov-14 MA3 YoY, % % of Labor Force May-12 May-15 May-13 Nov-15 Unemployment Rate Source: Central Bank of Chile and Bloomberg. May-16 May-14 Monthly Economic Activity Nov-16 May-15 May-17 May-16 Nov-17 May-18 May-17 Nov-18 May-18 May-19 Nov
Slide 7: Supported by better sanitary conditions and sound policy responses
…supported by better sanitary conditions and sound policy responses Evolution of Vaccination in Chile Evolution of Covid-19 in Chile Share of population that received at least one dose, as of July 1st, 2021. Total of Cases 67% 90,000 1,600,000 Active Cases Recovered (right axis) 80,000 1,400,000 70,
Slide 8: Our view of the Chilean economy
Our view of the Chilean economy Average expected growth 2020 - 2021 (YoY, %) Bloomberg survey, June 2021 2018 2019 2020 2021f 2022f GDP 3.7 0.9 -5.8 8.1 3.0 Chile Consumption 3.7 0.8 -6.8 13.5 2.8 Brazil Gross investment 5.1 4.4 -11.5 9.0 3.1 Exports 5.3 -2.6 -1.0 4.5 4.0 Colombia Imports 8.1 -2.4 -
Slide 9: 2. Chilean Banking Industry
2. Chilean Banking Industry 9
Slide 10: Snapshot of Chilean Banking Industry
Snapshot of Chilean Banking Industry 18 Banks Operating in Chile Debt Service Ratio Risk Weighted Assets Density⁴ Monthly debt obligations to monthly income As of December, 2020 9 Locally controlled banks 8 Foreign controlled banks 1 State owned bank 2017 23.0% Colombia 73% 93% Loans to GDP 2018 23.
Slide 11: Growth Potential in SMEs
Growth Potential in SMEs Loan Penetration¹ (% of 2020 GDP) Breakdown of Commercial Loans (% as of December 2020) Number of Total Loans Debtors 93% 1,371,920 Commercial loan volumes breakdown 0.2% by size 1.3% Personal 40% 21% 98.4% US$ 157Bn Commercial 60% 53% 19% SMEs Large Companies Corporations 1
Slide 12: Growth Potential in Personal Banking
Growth Potential in Personal Banking Household Debt1 Total,% of net disposable income 300 250 200 150 100 50 0 RUS LVA HUN COL LTU BRA SVN POL CZE CHL SVK EST ITA AUT DEU USA GRC ESP JPN BEL FRA PRT NZL IRL GBR FIN CAN KOR LUX SWE AUS CHE NOR NLD DNK Latam Consumer Loan Penetration2 Latam Mortgage L
Slide 13: Improving trends in the Banking Industry
Improving trends in the Banking Industry Quarterly Net Income¹ Net Income Billions of CLP ROAE 889 Nominal Loan Growth 614 QoQ 16.6% 459 418 11.3% 8.7% 7.9% 6.3% Total Commercial Mortgage Consumer 4.1% -5.5% 3.7% 2.8% 3.0% -312 1Q20 2Q20 3Q20 4Q20 1Q21 1.6% 1.3% 2.8% 0.9% Inflation (△UF) 1.0% 0.3% 0
Slide 14: 3. Banco de Chile Overview
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Slide 15: Our Shareholder Structure
Our Shareholder Structure Free Float As of March 2021 Top 5 companies in the IPSA Index As of March 2021 1.SQM 11.9% 2.Banco de Chile 9.9% 44.4% 3.Enel 8.7% 4.Copec 7.7% 5.Santander Chile 7.2% Other 38.5% Ownership Structure Avg. Daily Trading Volume As of March 2021 44.4% in US$ Millions Local Pens
Slide 16: Corporate Governance
Corporate Governance • Active Board involvement in committees Directors & Audit; 5 Risk Committees; 4 Business Committees • Best practices pursuant to NYSE and SEC standards • Successful Partnership with Citi supporting international business opportunities Board of Directors: Senior Management: Name
Slide 17: Snapshot of Banco de Chile
Snapshot of Banco de Chile As of March, 2021 Loans by Segment % of Total, Mar-21 Business Scale1 17% Total Loans Market Share Retail 64% US$ 36% Wholesale 21% Demand Deposits Market Share 2% 16% 11% 35% 44.2 Consumer SMEs Consumer Residential and non Billion Wholesale 2 MM Customers Finance middle &
Slide 18: Competitive Advantages and Strategic Pillars
Competitive Advantages and Strategic Pillars 18
Slide 19: Proven Digital Banking and Business Intelligence
Proven Digital Banking and Business Intelligence Online & Branch Monetary Innovative Digital Bank Transactions The European, 2020 % of total monetary transactions 1Q21 79% 21% 1Q20 72% 28% Online Branch Online Monetary Transactions In thousands Breakdown of Consumer Loans Origination 31,789 % of tot
Slide 20: Creating a high impact Digital Banking Journey
Creating a high impact Digital Banking Journey Corporate Banking Cuenta FAN • Fogape Reactivate Loans • Online bank account #1 to offer Reactivate loans 100% digital • ~300 thousand FAN customers 75% operations granted online • Over 3.6 million of purchases • App Banconexión for businesses through F
Slide 21: Key actions to reinforce our productivity and efficiency
Key actions to reinforce our productivity and efficiency Streamlining and automating processes by Identifying costs savings and implementing leveraging technology and simply procedures purchasing desk to aid in further reducing overall expenses Optimizing branch network with a new service Productivi
Slide 22: The best customer service and loyalty program
The best customer service and loyalty program Top of Mind¹ Preferred bank to change to?¹ % total mentions, 1Q21 % total mentions, 1Q21 25% 21% 21% 16% 15% 14% 6% 6% BCH Santander BCI Itau BCH BCI Santander Itau Net Promoter Score² Best Loyalty Program¹ % total mentions, 1Q21 % of total mentions 37.4
Slide 23: Premium Customer Base
Premium Customer Base Customer Base Current Account Balance-Personal Banking Market Share of debtors, February 2021 February 2021 18.1% 29.2% US$7.228 Banco deChile 16.4% 22.4% US$3,784 Santander 11.1% 13.9% US$5,111 BCI 7.3% Itaú-Corp 6.1% US$4,161 Market Share Avg DDA Balance per Account Personal
Slide 24: Diversified and Large Business Scale
Diversified and Large Business Scale Demand Deposits Market Share¹ Net Fees and Commisions Market Share, as of March 2021 Local Currency, as of March 2021 21.1% 20.2% 20.9% 13.6% 15.3% 14.6% 7.1% 5.0% BCH Santander BCI ItauCorp BCH BCI Santander ItauCorp Total Loans¹ Assets Under Management Market S
Slide 25: Leaders in Funding
Leaders in Funding Liability Structure Demand Deposits to Total Assets % Over Total Assets, as of March 2021 As of March 2021 34.9% 28.8% Equity 17.9% Financial Institutions 11.8% Savings Accounts Other and TimeDeposits BCH BCI Santander Itau Tier I Capital Ratio Est. Basel III Ratio As of March 202
Slide 26: Prudent Risk Management
Prudent Risk Management Coverage Ratio¹ BancodeChile Santander BCI BCH + AdditionalProvisions (Allowances for Loan Losses / Past-Due Loans) 3.6 3.5 Prudent and Proactive Risk Management: 2.8 2.7 1.Solid Track Record 2.5 2.5 2.5 2.4 2.1 2.1 2.Superior and Stable Asset Quality 2.0 1.8 2.0 2.0 2.3 1.6
Slide 27: ESG: A key pillar for our long-term strategy
ESG: A key pillar for our long-term strategy Customers Community • #1 in the National Customer • Best Bank for Financial Inclusion according to Satisfaction Award by Procalidad 2020. The European 2020. • 464 thousand Personal Banking loans • 4,634 people trained in financial education rescheduled in
Slide 28: 4. 1Q21 Financial Results
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Slide 29: Superior profitability for our shareholders
Superior profitability for our shareholders Quarterly Net Income¹ Leader in Profitability and Capital Billions of CLP As of March 2021 162 1.8 137 126 1.6 112 BCH 88 1.3 Santander ROA 1.1 BCI 1Q20 2Q20 3Q20 4Q20 1Q21 0.8 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% ROAE ¹ 16.2% 12.5% 9.8% 13.7% 18
Slide 30: Leading Profitability in 1Q21
Leading Profitability in 1Q21 Breakdown of Comprehensive Income Billions of CLP, 1Q21 Net Income and Comprehensive Income Billions of CLP, 1Q21 BCH +1% Net Income 184 162 0.5 1.5 -0.6 164 Comprehensive Income 162 164 149 141 Net Income Fair value available Fair value of OCI taxes Comprehensive for s
Slide 31: Diversified fee based business supporting operating revenues
Diversified fee based business supporting operating revenues Customer Income Breakdown Billions of CLP 354 14.0 0.7 358 - 1.1 - 4.1 - 5.6 Quarterly Operating Revenues Billions of CLP Customer Income Non-customer Income 4Q20 Loans Deposits Insurance Recurrent Sales & 1Q21 Alliance Fee Fees Distributi
Slide 32: Improving loan growth trends
Improving loan growth trends Total Loans Nominal Loan Growth Trillions of CLP QoQ Total Commercial Mortgage Consumer +3% 5.7% 3.9% 3.4% 30.9 30.9 31.8 2.8% 2.7% 1.5% 1.5% 1.8% 2.6% 0.1% 0.0% 0.3% -0.3% 0.2% -0.1% -2.0% -1.2% -3.0% -6.0% -5.6% 1Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 Wholesale Banking
Slide 33: The Best Funding Structure of the Chilean Industry
The Best Funding Structure of the Chilean Industry Liability Structure Demand Deposits Market Share % Over Total Assets, as of March 2021 Local Currency, as of March 2021 21.1% 20.2% 13.6% 5.0% BCH Santander BCI ItauCorp Tier I Capital Ratio Est. Basel III Ratio Personal Banking Current Accounts 1Q2
Slide 34: Proactive and Responsible Risk Management
Proactive and Responsible Risk Management Loan Loss Provisions Coverage Ratio Billions of CLP Allowances for loan losses + Additional Provisions to NPLs, March 2021 Risk Model Adjustment Add Prov 3.54 2.61 2.22 1.78 139 126 - 113 BCH Santander BCI Itau 70 85 - Delinquency Ratio 78 NPLs to Total Loan
Slide 35: Diversified Loan Portfolio
Diversified Loan Portfolio Loans by Segment Loans by Economic Sector % of Total, 1Q21 % of Total, As of March 2021 Retail, Hotels, Construction Rest. Retail 64% 8% Wholesale 8% Manufacturing 36% 5% Financial Agriculture 9% 6% Transport 4% Communication 1% Social 16% Loans to Individuals 41% Utilitie
Slide 36: Robust Cost Control Management
Robust Cost Control Management Total Expenses Variation in Total Expenses Billions of CLP Billions of CLP +2% 220 232 224 232 224 -24 15 1.8 1Q20 4Q20 1Q21 4Q20 Salaries Administrative Dep, Amort & 1Q21 Other Efficiency Ratio Cost to Income, 1Q21 Comparison to Peers Total Expenses, 4Q19=100. BCH San
Slide 37: Key Takeaways
Key Takeaways • GDP recovering in 2021 to ~6.2%, driven by consumption. • Inflation for 2021 at ~3.4%. • Solid 18% ROAE in 1Q21 and highest profitability amongst peers in comprehensive income. • Lowest NPL level among peers of 0.96%. • Loan growth in 2021 for industry ~8%. We expect to pick up marke
Slide 38: Appendix: Main Financial Indicators
Appendix: Main Financial Indicators (1) (2) Figures are expressed in nominal Chilean pesos. Figures are calculated considering nominal net income, the shares outstanding and the exchange rate existing at the end of each period. (3) Ratios consider daily average balances. (4) Annualized data. 38
Slide 39: Appendix: Main Financial Indicators
Appendix: Main Financial Indicators (1) (2) Figures are expressed in nominal Chilean pesos. Figures are calculated considering nominal net income, the shares outstanding and the exchange rate existing at the end of each period. (3) Ratios consider daily average balances. (4) Annualized data. 39
Slide 40: 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