Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q4 2016 Earnings Presentation
34 slides from Intercorp Financial Services's earnings presentation, 2017
Slide 1: Intercorp Financial Services Fourth Quarter 2016 Earnings Presentation
Intercorp Financial Services Fourth Quarter 2016 Earnings Presentation
Slide 2: Highlights FY16 & 4Q16
Highlights FY16 & 4Q16 IFRS Strengthened capitalization and funding structure, with stable profits despite lower loan growth and FX activity 9.9% YoY growth in retail deposits led to a 60 bps gain in market share Interbank Stable PDL ratio QoQ at 2.6%, remaining below the system’s average of 2.8
Slide 3: IFS FY16 result affected by a negative discount rate impact on technical reserves
IFS FY16 result affected by a negative discount rate impact on technical reserves for annuity premiums IFRS Interbank Inteligo Net profit in S/ million Net profit in S/ million ROAE 24.9% 25.4% 21.4% ROAE 28.1% 20.0% 28.4% 868 847 171 731 134 106 2014 2015 2016 2014 2015 2016 Interseguro IFS Net pro
Slide 4: IFS key indicators FY16
IFS key indicators FY16 IFRS Intercorp Financial Services' key indicators S/ million %chg 2015 2016 16/15 Net interest and similar income 2,421.0 2,623.0 8.3% Fee income from financial services, net 818.4 862.4 5.4% Results Profit for the period 1,238.8 833.7 -32.7% Profit excl. discount rate impact
Slide 5: IFS 4Q16 net profit increased 85.1% QoQ and 74.9% YoY
IFS 4Q16 net profit increased 85.1% QoQ and 74.9% YoY IFRS Interbank Inteligo Net profit in S/ million Net profit in S/ million ROAE 24.2% 22.0% 21.1% ROAE 1.9% 33.7% 23.6% +1.7% >14x 48 38 220 222 224 3 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 Interseguro IFS Net profit in S/ million Net profit in S/ million
Slide 6: IFS key indicators 4Q16
IFS key indicators 4Q16 IFRS Intercorp Financial Services' key indicators S/ million 4Q15 3Q16 4Q16 %chg QoQ %chg YoY Net interest and similar income 652.1 657.5 675.7 2.8% 3.6% Fee income from financial services, net 214.7 219.0 221.4 1.1% 3.1% Results Profit for the period 220.9 208.7 386.3 85.1%
Slide 7: Interbank
CJ Intercorp Financial Services
Slide 8: Interbank's profits increased 1.0% QoQ and 1.7% YoY
Interbank’s profits increased 1.0% QoQ and 1.7% YoY IFRS Banking Segment's P&L Statement S/ million %chg %chg 4Q15 3Q16 4Q16 QoQ YoY Interest and similar income 802.5 830.6 837.3 0.8% 4.3% Interest and similar expenses -242.7 -260.2 -256.1 -1.6% 5.5% Net interest and similar income 559.8 570.4 581.2
Slide 9: Performing loans grew 4.1% YoY, in line with the industry trend
Performing loans grew 4.1% YoY, in line with the industry trend Performing loans Breakdown of loans S/ million S/ million %chg %chg 4Q15 3Q16 4Q16 QoQ YoY +4.1% Consumer loans: Credit cards 3,703.1 3,953.9 3,853.5 -2.5% 4.1% +4.5% Other consumer 4,229.9 4,476.4 4,479.9 0.1% 5.9% 25,248 Total consume
Slide 10: Interbank increased its market relevance in deposits during 2016
Interbank increased its market relevance in deposits during 2016 Funding structure Funding breakdown S/ million %chg %chg S/ million 4Q15 3Q16 4Q16 QoQ YoY Gross Loans Deposits 97.0% 102.2% 97.5% Deposits* 25,880.9 25,529.9 26,898.6 5.4% 3.9% Retail 10,685.9 11,269.1 11,747.4 4.2% 9.9% +1.0% Commerc
Slide 11: Total PDL ratio remained below system's average in 4Q16
Total PDL ratio remained below system’s average in 4Q16 Local GAAP & IFRS figures PDL vs. System Loan provision expense vs. System Interbank System Interbank System Interbank Coverage 193.9% 177.0% 179.8% Ratio 2.9% 2.4% 2.8% 2.5% 2.0% 2.0% 2.3% 2.6% 2.6% 3.3% 2.8% 2.9% 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16
Slide 12: De-dollarization trends start to stabilize YoY
De-dollarization trends start to stabilize YoY Local GAAP figures Total loans Retail loans Commercial loans %PEN System 67.1% 68.2% 82.8% 85.7% 59.2 % 59.0% 11.3% 8.5% 28.8% 27.0% 48.3% 47.9% 88.7% 91.5% 71.2% 73.0% 51.7% 52.1% 4Q15 4Q16 4Q15 4Q16 4Q15 4Q16 Retail loans breakdown Commercial loans br
Slide 13: Efficiency ratio slightly increased amid relatively stable fee income
Efficiency ratio slightly increased amid relatively stable fee income Fee income Operating expenses S/ million S/ million 350 30.0% 300 23.6% 23.5% 500 .0 50.00% 22.6% 25.0% 450 .0 40.8% 41.3% 42.2% 250 400 .0 40.00% 20.0% 350 .0 200 300 .0 30.00% 15.0% 250 .0 150 200 .0 20.00% 369.0 10.0% 100 201.6
Slide 14: Interbank's BIS ratio remained above regulatory requirements and the system average
Interbank’s BIS ratio remained above regulatory requirements and the system average System 14.2% 14.7% 15.0% 15.2% 15.0% 20.00% 16.4% 16.2% 16.1% 15.5% 15.9% 15.00% 5.4% 5.3% 5.4% 5.2% 5.6% +1.9% +1.7% +1.8% +1.9% Additional Regulatory Capital +1.6% Requirement 10.00% 10.0% Total Regulatory Minimum
Slide 15: Stable 2016 at Interbank despite lower loan growth and pressured margins
Stable 2016 at Interbank despite lower loan growth and pressured margins IFRS Total revenues(1) Net Interest Margin (NIM) S/ million NIM NIM on loans NIM on loans after provisions 3,343 3,403 9.4% 9.9% 9.9% 2,751 6.1% 6.0% 7.4% 7.1% 6.8% 5.8% 2014 2015 2016 2014 2015 2016 2014 2015 2016 2014 2015 20
Slide 16: Interseguro
Interseguro CJ Intercorp Financial Services
Slide 17: Interseguro's net profit excluding discount rate impacts grew 18.9% QoQ and 11.0% YoY
Interseguro’s net profit excluding discount rate impacts grew 18.9% QoQ and 11.0% YoY Insurance Segment's P&L Statement S/ million %chg %chg 4Q15 3Q16 4Q16 QoQ YoY Net Interest and similar income 65.3 67.4 73.1 8.4% 11.9% Fee income from financial services, net -0.5 -0.7 -0.9 30.1% 95.2% Other incom
Slide 18: Interseguro's net profit IFRS vs. Local GAAP
Interseguro’s net profit IFRS vs. Local GAAP Net profit – IFRS* Net profit bridge from Local GAAP to IFRS (4Q16) S/ million 132 S/ million 3 -1 102 7 4 11 26 25 29 -23 33 -79 33-119 -54 4Q15 3Q16 4Q16 Adjustment of technical reserves resulting from 92 132 changes in discount rate Net profit – Local
Slide 19: Net premiums improved QoQ as Interseguro increased its market share in annuities
Net premiums improved QoQ as Interseguro increased its market share in annuities, yet still below 4Q15 levels Net premiums Adjustment of technical reserves S/ million S/ million Annuities 20.8% 21.5% 23.5% Negative 23 79 -102 market share discount rate impact 151 164 177 3 4 149 1 5 136 46 11 53 50
Slide 20: Interseguro's investment portfolio grew 10.6% YoY
Interseguro’s investment portfolio grew 10.6% YoY Investment portfolio Results from investments(1) S/ million S/ million ROIP 6.6% 7.8% 7.5% +10.6% 5,634 79 107 104 5,416 4,897 764 766 713 523 11 435 33 9 536 7 20 6 15 67 71 4,347 61 4,215 3,647 -4 -6 4Q15 3Q16 4Q16 Fixed Income Realized gain/loss o
Slide 21: Inteligo
Inteligo CJ Intercorp Financial Services
Slide 22: Inteligo's 4Q16 net profit decreased 20.6% QoQ but exhibited a significant recovery YoY
Inteligo’s 4Q16 net profit decreased 20.6% QoQ but exhibited a significant recovery YoY Wealth Management Segment's P&L Statement S/ million %chg %chg 4Q15 3Q16 4Q16 QoQ YoY Interest and similar income 40.6 34.7 38.5 11.0% -5.1% Interest and similar expenses -13.7 -14.9 -17.1 14.8% 24.5% Net interes
Slide 23: Inteligo's key indicators
Inteligo’s key indicators AUM + Deposits Loans S/ million S/ million +12.7% +0.6% 14,605 14,864 1,708 1,695 13,192 1,686 3,139 3,226 2,508 10,685 11,465 11,638 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 Deposits AUM Revenues Net profit S/ million S/ million Fee (1) 1.0% 1.1% 0.9% ROAE 1.9% 33.7% 23.6% AUMs +35.6
Slide 24: Summary
CJ Intercorp Financial Services
Slide 25: Takeaways
Takeaways Interbank Strengthened capitalization and funding structure, with stable profits despite lower loan growth and FX activity 9.9% YoY growth in retail deposits led to a 60 bps gain in market share Stable PDL ratio QoQ at 2.6%, remaining below the system’s average of 2.8% as of Dec-16
Slide 26: Appendix
Appendix CJ Intercorp Financial Services
Slide 27: Highlights FY16 & 4Q16
Highlights FY16 & 4Q16 IFRS IFS results affected by discount rate impact on technical reserves for annuities Intercorp FY16 net profit was S/ 833.7 million, a 32.7% decrease YoY, mainly a result of higher requirements of technical reserves at Interseguro and a decrease in foreign exchange gains at
Slide 28: IFS 4Q16 P&L
IFS 4Q16 P&L IFRS Intercorp Financial Services' P&L statement S/ million %chg %chg 4Q15 3Q16 4Q16 QoQ YoY Interest and similar income 912.0 935.6 951.4 1.7% 4.3% Interest and similar expense -259.9 -278.1 -275.7 -0.8% 6.1% Net interest and similar income 652.1 657.5 675.7 2.8% 3.6% Provision for loa
Slide 29: IFS FY16 P&L
IFS FY16 P&L IFRS Intercorp Financial Services' P&L Statement S/ million %chg %chg 2014 2015 2016 16/15 15/14 Interest and similar income 2,828.7 3,342.7 3,704.8 10.8% 18.2% Interest and similar expense -788.9 -921.7 -1,081.9 17.4% 16.8% Net interest and similar income 2,039.8 2,421.0 2,623.0 8.3% 1
Slide 30: Interbank's FY16 net profit bridge to IFRS
Interbank’s FY16 net profit bridge to IFRS Local GAAP vs. IFRS $1,000 S/ million $900 33 11 3 $800 $700 374 371 Higher tax Higher provisions expenses $600 due to IFRS Lower losses on accounting valuation of trading $500 securities under IFRS accounting 875 847 $400 Mainly re-classifications of credi
Slide 31: Interseguro's FY16 net profit bridge to IFRS
Interseguro’s FY16 net profit bridge to IFRS Local GAAP vs. IFRS S/ million Differences on costs of Different discount sold securities due to 86 rates in valuation of previous impairments DCF RE investments under IFRS resulted in a higher result -185 -115 Different stocks of Use of different Assets
Slide 32: Interbank's net profit IFRS vs. Local GAAP
Interbank’s net profit IFRS vs. Local GAAP Net profit – IFRS Net profit bridge from Local GAAP to IFRS (4Q16) S/ million S/ million +1.7% $300 $250 3 2 9 220 222 224 $200 99 97 4Q15 3Q16 4Q16 $150 Net profit – Local GAAP 239 224 S/ million $100 +23.6% $50 $0 239 Net profit (SBS) Net interest and Fee
Slide 33: Interseguro's 4Q16 net profit bridge to IFRS
Interseguro’s 4Q16 net profit bridge to IFRS Local GAAP vs. IFRS S/ million 3 -1 Use of different 8 discount rates and mortality tables to 11 calculate technical reserves Different stocks of Assets and Liabilities in IFRS compared to SBS GAAP resulted in a lower Differences on costs of sold translat
Slide 34: Fl _—_._ Financial Services
Fl _—_._ Financial Services
Intercorp Financial Services — Q4 2016 Earnings Presentation on 6ix