48 slides from Intercorp Financial Services's investor presentation, December 2020
Slide 1: Investor Presentation December 2020
Investor Presentation December 2020
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 IFS’ busin
Slide 3: IFS at a glance
Cd Intercorp Financial Services IFS ata glance
Slide 4: Leading financial services platform with solid balance sheet and diversified source of dividends
Leading financial services platform with solid balance sheet and diversified source of dividends Financial highlights Three operating segments 99.3% 99.8% 100.0% Universal bank with strategic Insurance company with Leading provider of wealth As of Sep 2020 S/ mm | US$ mm focus on retail focus on lif
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$ 8.2bn Revenues in 2019 ~3.5% of Peru 2019 GDP Education Other (1) Source: Company information and BCRP. 4 1) Related companies excluding Aviva and Urbi.
Slide 6: Story of sustained growth and strong returns for our shareholders
Story of sustained growth and strong returns for our shareholders Sustained growth and market share gains over the years Delivering strong returns for our shareholders Total assets (S/ mm) Net profit (US$ mm) (3) 9.4% 11.3% 12.6% Dividends 40 181 202 MS loans (1) paid (US$ mm) MS deposits (1) 9.3% 1
Slide 7: Strategically positioned to capture significant growth opportunities
Strategically positioned to capture significant growth opportunities What distinguishes 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 analytics
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 Strong liquidity and Macro expectations and Digital trends and new Lower provisions QoQ, still Double-digit reduction in capital position banking activity gradually alliances continue to above pre COVID-19 levels expenses due to cost recovering, good results support IFS’ strat
Slide 10: Liquidity levels remain high with continuous growth in deposits at Interbank
Liquidity levels remain high with continuous 1 growth in deposits at Interbank Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of October 31, 2020 S/ million Total LDR Market 12.7% 13.2% 13.1% Share 109% 98% 99% 102% System: 100% +26.1% 41,449 42,538 33,742 Interbank BCP BBVA
Slide 11: Strengthened capital ratios at all IFS' segments
1 Strengthened capital ratios at all IFS’ segments 167.4% 166.7% 142.6% 144.5% Banking System 14.9% 14.8% 15.6% 15.5% 100.0% regulatory TCR minimum 16.7%(1) 17.0% 16.9% 11.4% 11.4% 11.4% 11.1% Sep19 Jun20 Sep20 Oct20 15.4% Solvency ratio 10.6% regulatory minimum 16.7% 17.0% 16.9% 15.4% 25.5% 23.3% 2
Slide 12: Moderate recovery in macro activity and expectations
Moderate recovery in macro activity and 2 expectations GDP Mining and fuel GDP Credit to private sector (YoY % Chg) (YoY % Chg) (YoY % Chg) 11.0% 3.7% 13.3% 14.1% 13.1% 3.6% 7.7% 8.7% TB -3.8% -2.8% 4.4% -7.0% U -12.7% -14.2% -12.2% -17.9% -2.0% -39.2% -42.2% -3.9% Feb20 Apr20 Jun20 Sep20 Oct20 FY20
Slide 13: Gradual improvement in our core operating indicators
Gradual improvement in our core operating 2 indicators Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 100 100 100 100 86 88 91 80 76 77 64 50 52 38 8 Feb20 Apr20 Jun20 Sep20 Oct20 Fe
Slide 14: Reactiva Peru Program as an opportunity to gain relevance in the mid-sized and SME segments
Reactiva Peru Program as an opportunity to gain 2 relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +42.7% 20,545 +14.2% 22,825 10,286 9,759 20,545 8,549 742 678 16,000 3,833 6,783 3,833 16,000 9,544 9,081 16,713 16,042 Mar20 J
Slide 15: Digital KPIs continue to show positive trends
3 Digital KPIs continue to show positive trends Interbank - Digital users Interbank - 100% digital customers Interbank - Business accounts % of digital users 100% digital customers N° and % of business accounts opened digitally (thousand) 52% 47% 75% 53% 5 61% 32% 2 Sep19 Sep20 Sep19 Sep20 Sep19 Sep
Slide 16: Growing customer base in retail and commercial, digitally driven
Growing customer base in retail and commercial, 3 digitally driven Interbank - Retail customers Interbank - Commercial customers Thousand Thousand +14.8% +46.0% 3,868 96 3,370 66 Sep19 Sep20 Sep19 Sep20 Interbank - Retail 100% digital customers Interbank - Tunki accounts & Plin users Thousand N° of
Slide 17: New partnership with Rappi to deliver 100% digital financial products in Peru
New partnership with Rappi to deliver 100% 3 digital financial products in Peru • Market leader in credit cards • Leading SuperApp in Peru(1) • Proven risk management • Growing customer base, accelerated capabilities in retail banking by the COVID-19 pandemic • Ready to scale Open Banking API • Adva
Slide 18: Outstanding rescheduled loans slightly decreasing
Outstanding rescheduled loans slightly 4 decreasing Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 422 46% (Thousand) at System Level(1) Clients 343 459 438 28% Rescheduled 34% 43% (Thousand) 42% at System balance (%) Level(1) 8.6 8.1 Resche
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 payments 91% 96% due 16.6 16.1 Payments of rescheduled loans Collected Requested relief Not paid 6.3 6.6 86.4% 92.6% 6.5% 1.2% 7.1% 6.2% (39%) (40%)
Slide 20: QoQ reduction in provisions, still above pre COVID-19 levels
QoQ reduction in provisions, still above pre 4 COVID-19 levels Interbank - Cost of risk Interbank - Non-performing exposure NPL 126.4% 196.6% coverage ratio After adjustments to the expected 13.4% 7.1% loss model: 15.1% (S2+S3) ratio: 23.7% 13.4% NPL ratio: 5.7% 9.5% 4.5% 2.5%(1) 2.6% 3.0% 3.4% 3.4%
Slide 21: Double-digit reduction in expenses due to cost containment measures
Double-digit reduction in expenses due to cost 5 containment measures Interbank - Other expenses bridge from 3Q19 to 3Q20 Other expenses YoY growth by line 3Q20 YoY growth +5.6% -24.3% -30.8% +3.8% -10.8% IFS -10% +4 +5 Interbank -11% -41 -12 412 367 Interseguro -15% Inteligo -21% 3Q19 Technology Sa
Slide 22: 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 commitment to ESG
Slide 23: 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 commitment to ESG
Slide 24: Distinctive focus on retail customers and consumer loans
Distinctive focus on retail customers and consumer loans Interbank Strategic focus on retail and consumer loans… …when compared to the banking system Gross loans breakdown (as of September 2020) Gross loans breakdown (as of September 2020) Banking System Credit Commercial Commercial Credit Cards Car
Slide 25: 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 September 2020 Commercial loans Retail loans Total loans Interbank System 3.3% 3.0% 3.0% 3.0% Scotiabank Scotiabank 4.
Slide 26: 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 Sep20 13.1% MS 2014 12.1% MS Sep20 13
Slide 27: Key player in Peru's life insurance business
Key player in Peru’s life insurance business Interseguro Strategic focus on life insurance… … when compared to the insurance system Insurance premiums and collections breakdown (as of September 2020) Insurance premiums and collections breakdown (as of September 2020) Insurance System Regulated annui
Slide 28: Outgrowing the insurance industry
Outgrowing the insurance industry Interseguro Introduction of new products to continue diversifying Outgrowing insurance industry in Other life (1) Gross premiums and collections by business unit (S/ mm) YoY growth in premiums (as of September 2020) Regulated Private Annuities Individual Life Other
Slide 29: Resilient wealth management business due to solid fee income
Resilient wealth management business due to solid fee income Inteligo Positive trend in AUM growth Solid fee generation due to client mix Inteligo Group AUM (S/ mm) Fees / Avg. AUM 19,880 0.9% 0.9% 17,593 18,293 18,087 0.9% 0.9% 16,230 2017 2018 2019 Sep19 Sep20 2017 2018 2019 9M20 Strong core reven
Slide 30: 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 6x • Predictive and prescriptive models to Increasing levels of adoption improve effectiveness and customer satisfaction • Machine learning and 2017 May20
Slide 31: Efficiency as our guiding principle to deal with the adverse environment
Efficiency as our guiding principle to deal with the adverse environment Optimizing our distribution channels Reducing other expenses following cost containment measures Units 2018 Sep20 % Change Financial 270 233 -14% 1,464 stores 1,374 ATMs 1,975 1,607 -19% Correspondent 2,506 3,293 +31% agents Sa
Slide 32: 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 commitment to ESG
Slide 33: Sustained loan growth supported by appropriate funding
Sustained loan growth supported by appropriate funding IFS Total gross loans Total deposits S/ mm S/ mm 43,562 45,209 38,257 36,582 34,055 38,093 36,277 29,175 32,608 33,682 2017 2018 2019 Sep19 Sep20 2017 2018 2019 Sep19 Sep20 AUM evolution Net shareholders’ equity S/ mm S/ mm 19,880 8,903 8,481 18
Slide 34: Growth in total revenues despite impacts from the COVID-19 pandemic
Growth in total revenues despite impacts from the COVID-19 pandemic IFS Total revenues (1) NIM S/ mm 5,384(3) 4,889(2) 4,310 5.3% 5.4% 5.3%(3) 3,958 4,118(4) 4.8%(4) 2017 2018 2019 9M19 9M20 2017 2018 2019 9M20 Net profit ROE S/ mm 1,479(3) 1,236(2) 19.3% 18.4%(2) 18.6%(3) 1,033 1,037 113(4) 1.8%(4)
Slide 35: Consistently delivering strong return to our shareholders
Consistently delivering strong return to our shareholders… Dividends declared (1) (S/ mm) (S/ mm) Net profit (2) 875 902 1,038 1,209 Net profit (2) 86 104 361 436 Payout Ratio 45% 45% 45% 25% Payout Ratio 50% 96% 38% 46% 467 394 406 200 302 138 100 43 2016 2017 2018 2019 2016 2017 2018 2019 (US$ mm)
Slide 36: 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 commitment to ESG
Slide 37: Evolving cultural transformation
Evolving cultural transformation Comprehensive transformational approach New initiatives User Empower IT all Peruvians to achieve financial well-being Org More than 100 teams working with agile framework Innovation Labs Over 400 workers organized in more than 80 squads 36
Slide 38: 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 Top 10 in Peru for the past 18 years for the pa
Slide 39: Strong corporate governance
Strong corporate governance Board of Directors BOD with majority of independent members Carlos Rodríguez-Pastor IFS: 4 out of 7 Chairman Strong corporate governance Felipe Morris Fernando Zavala Director Director Highly supervised related party exposure, well below regulatory limits Alfonso Bustaman
Slide 40: 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 Inclusion integrity 4 out of 7 independent OxI directors 31 Tons less paper Board of Specialized commi
Slide 41: 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 commitment to ESG
Slide 42: Appendix
Cd Intercorp Financial Services oooeeen | Appendix
Slide 43: 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 44: Sound and profitable financial system
Sound and profitable financial system Gross loans growth and asset quality Sustained profitability Banking system gross loans (S/ bn) Banking system net profit (S/ mm) PDL 3.0% 3.0% 3.0% 3.1% 3.3% ROE 18.3% 18.5% 18.5% 19.3% 5.8% ratio CAGR 327 2017-19 271 286 280 9,082 246 8,220 7,442 7,000 6.2% 22
Slide 45: Underpenetrated Peruvian financial system
Underpenetrated Peruvian financial system Banking Insurance Loans penetration Insurance premiums penetration 2019 – Loans to GDP 2019 - Premiums to GDP 98.2% 4.7% 4.0% 2.8% 46.5% 2.4% 42.4% 37.2% 1.8% 22.3% Wealth management Retail loans Cards Mortgage penetration penetration penetration Mutual fund
Slide 46: IFS income statement – IFRS
IFS income statement – IFRS (1) % chg Incom e S t a t e m e nt ( S / m m ) 2017 2018 2018 9 M 19 9 M 29 % chg '19 / '18 9 M 20 / 9 M 19 Interest and similar income 3,809.0 4,321.3 4,847.2 3,597.3 3,477.8 12.2% (3.3%) Interest and similar expenses (1,121.8) (1,179.6) (1,428.7) (1,037.3) (930.1) 21.1%
Slide 47: IFS balance sheet – IFRS
IFS balance sheet – IFRS (1) % chg Ba la nce S he e t ( S / m m ) 2017 2018 2019 9 M 19 9 M 20 % chg '19 / '18 9 M 20 / 9 M 19 Cash and due from banks 11,204.8 8,380.4 11,128.9 11,710.7 17,573.1 32.8% 50.1% Inter-bank funds 403.5 495.0 85.0 0.0 0.0 (82.8%) n.m. Financial investments 16,924.1 17,629.
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