Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Investor Presentation (September 2021)
50 slides from Intercorp Financial Services's investor presentation, September 2021
Slide 1: Investor Presentation September 2021
Investor Presentation September 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 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 Insurance company Leading provider of As of Jun21 S/ mm | US$ mm strategic focus on with focus on life & wealth manage
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: 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) MS loans (1) 9.4% 12.8% Dividends 40 89 paid (US$ mm) MS deposits (1) 9.3% 13.3% Divide
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 1994 - 2014 2015 - 2018 2019 - Onwards Store-centric model Omnichannel platform with Digital first, search focused on physical strong focus on digital and for exponential convenience analytics growth Physical supports growth Digital supports physical Physic
Slide 9: Key messages
Key messages 1 2 3 Economic recovery Solid capitalization, Strong recovery in core continues strong liquidity and operating indicators manageable dollarization 4 5 6 Digital indicators 2nd consecutive quarter Continued focus continue to support with cost of risk below on efficiency IFS’ strategy pre
Slide 10: GDP continues to recover
1 GDP continues to recover Apr21: GDP +58.5% GDP by economic sector (Jan21-Jun21) (YoY % Chg) May21: (YoY % Chg) +47.8% FY21(E) Jun21: +23.5% 41.9% GDP 21% +10.1% 3.8% Construction 100% +17.4% -1.7% -9.0% TB U -30.0% Manufacturing 36% +18.1% 2Q20 3Q20 4Q20 1Q21 2Q21 Commerce 33% +18.0% Expectations
Slide 11: Solid capital ratios at all IFS' segments
2 Solid capital ratios at all IFS’ segments 162.9% 160.8% 144.5% Banking System 14.8% 16.3% 15.4% 100.0% regulatory TCR minimum 16.7%(1) 16.9% 16.5% 2Q20 1Q21 2Q21 11.4% 11.5% 11.1% Solvency ratio 8.6% 16.7% 16.9% 16.5% regulatory minimum 29.9% 21.1% 22.6% 2Q20 1Q21 2Q21 2Q20 1Q21 2Q21 8.0% Total ca
Slide 12: Liquidity levels remain high
2 Liquidity levels remain high Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of June 30, 2021 S/ million Total LDR MS total 13.2% 13.7% 13.4% deposits Aug21 90% MS retail 13.8% 14.1% 14.5% 110% 114% deposits 93% 95% System: 100% +9.1% 46,637 45,209 41,449 Interbank BCP BBVA
Slide 13: Manageable dollarization at Interbank
2 Manageable dollarization at Interbank Gross Loans by segment & percentage in S/ Currency mix Jul21 93% 94% 94% 94% 94% 94% 94% 93% Gross Loans Total Assets 78% 77% 77% USD 76% 77% 76% USD 73% 74% 29% 24% 64% 63% 62% 60% 61% 60% 51% 49% S/ 76% S/ 2018 2019 2020 Mar21 Apr21 May21 Jun21 Jul21 71% Tot
Slide 14: Strong recovery in core operating indicators
3 Strong recovery in core operating indicators Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 145 146 128 131 164 115 136 100 100 106 107 100 38 52 8 Feb20 Apr20 Apr21 Jul21 Aug21 Fe
Slide 15: 17.2% YoY growth in revenues in 1H21
3 17.2% YoY growth in revenues in 1H21 Intercorp Financial Services Banking S/ million S/ million NIM 4.7%(1) 3.8% 4.0% 4.9%(1) 3.9% 5.0%(1) 3.7% 3.9% 5.2%(1) 3.8% +15.0% +3.6% 1,546 1,515 3,061 992 1,966(1) 1,957 2,612(1) 931(1) 965 1,317(1) 185 132 316 160 163 303 323 113 212 102 579 647 670 1,314
Slide 16: Digital indicators stabilizing
Digital indicators stabilizing 4 Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally Aug21 Aug21 Aug21 78% 57% 53% 78% 60% 72% 77% 58% 57% 43% 60% 31% Jun19 Jun20 Jun21 Jun19 Jun20 Jun21 Jun19 J
Slide 17: Growing customer base supported by increasing 100% digital users
Growing customer base supported by increasing 100% digital users 4 Interbank - Retail customers Interbank - Commercial customers Thousand Thousand CAGR: +14.1% CAGR: +37.0% 4,160 116 3,627 3,194 82 62 Jun19 Jun20 Jun21 Jun19 Jun20 Jun21 Interbank - Retail 100% digital customers Interbank – Tunki and
Slide 18: Declining rescheduled loan balances
Declining rescheduled loan balances 5 Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 306 (Thousand) Clients 343 459 318 Rescheduled 34% 43% (Thousand) 28% balance (%) Rescheduled 8.6 30% 31% 19% 6.9 balance (%) 5.6 12.7 Apr20 Jun20 Jun21 10.
Slide 19: Continued improvement in payment behavior among Interbank's retail clients
Continued improvement in payment behavior among Interbank’s retail clients 5 Retail loan balances with payments due Payment behavior S/ billion % of retail loans with 98.7% 99.6% payments due Payments of rescheduled loans 18.2 17.3 Collected Requested relief Not paid (38%) 5.3 (29%) 97.0% 97.4% 0.4%
Slide 20: 2nd consecutive quarter with cost of risk below pre COVID-19 levels
2nd consecutive quarter with cost of risk below pre COVID-19 levels 5 Interbank - Cost of risk Interbank - Non-performing exposure NPL FY19: 2.2% 182.7% 168.7% coverage FY19: 8.9% FY19: 2.9% ratio 13.4% 8.5% 13.4% 10.8% 8.8% 3.4% 3.4% 3.2% 1.8% 1.8% 1.7% 2Q20 1Q21 2Q21 1H20 1H21 2Q20 1Q21 2Q21 (S2+S
Slide 21: Recovery in expenses driven by banking activity with continued focus on efficiency
Recovery in expenses driven by banking activity with continued focus on efficiency 6 Efficiency ratio (1) Interbank – Other expenses bridge from 1H20 to 1H21 % YoY growth by line +16.6% -0.8% +61.5% +6.2% +9.5% 40.8% 37.2% +24 33.1% 31.2% +34 +16 -3 25.5% 752 824 11.2% 9.9% n.m. 1H20 1H21 1H20 1H21
Slide 22: Summary & Trends
Summary & Trends 1 2 3 Economic recovery Solid capitalization, Strong recovery in core continues strong liquidity and operating indicators manageable dollarization 4 5 6 Digital indicators 2nd consecutive quarter Continued focus continue to support with cost of risk below on efficiency IFS’ strategy
Slide 23: Operating trends 1H21
Operating trends 1H21 Capital Profitability Loan growth 2021 1H21 2021 1H21 Slow recovery in retail, IBK TCR >15% 16.5% and decreasing volumes in IFS ROAE >14% 21.7% commercial IBK CET1 >11% 11.5% Growth YTD To remain at sound levels Above guidance Retail +4.3% / Commercial -1.0% Revenues Cost of ri
Slide 24: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 25: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
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 June 2021) Gross loans breakdown (as of June 2021) Banking System Commercial Commercial 52.9% Mortgages 68.9% Mortgages Consumer Consumer 42.8% 51.3%
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 June 2021 Interbank System Commercial loans Retail loans Total loans 3.8% 3.6% 3.0% 3.0% Scotiabank Scotiabank 4.2% 4.
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 Jun21 13.4% MS 2014 12.1% MS Jun21 14
Slide 29: 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 June 2021) Insurance premiums and collections breakdown (as of June 2021) Insurance System Regulated Other life annu
Slide 30: Annuities leading recovery in premiums
Annuities leading recovery in premiums Interseguro Introduction of new products to continue diversifying Outgrowing the overall insurance industry Gross premiums and collections by business unit (S/ mm) YoY growth in premiums (as of June 2021) Regulated Private Annuities Individual Life Other Life P
Slide 31: Resilient wealth management business
Resilient wealth management business Inteligo Positive trend in AUM growth Solid fee generation due to client mix Inteligo Group AUM (S/ mm) Fees / Avg. AUM 22,558 20,989 0.9% 0.9% 0.9% 19,302 17,593 18,293 0.8% 2018 2019 2020 Jun20 Jun21 2018 2019 2020 1H21 Strong core revenue generation High profi
Slide 32: 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 • Predictive and prescriptive models to improve effectiveness Increasing levels of adoption and customer satisfaction • Machine learning and deep learning
Slide 33: 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 Disciplined cost control helps efficiency Units Other expenses (S/ mm) 2018 Aug21 % Change Financial 1,978 270 194 -28% 1,911 stores 1,837 ATMs 1,975 1,589 -20% Correspondent 1,038 2,506 3,3
Slide 34: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 35: Sustained assets growth supported by appropriate funding
Sustained assets growth supported by appropriate funding IFS Total gross loans Total deposits S/ mm S/ mm 43,082 41,804 43,502 38,257 34,055 47,149 49,492 44,145 38,093 33,682 2018 2019 2020 Jun20 Jun21 2018 2019 2020 Jun20 Jun21 AUM evolution Net shareholders’ equity S/ mm S/ mm 22,558 20,989 8,903
Slide 36: Growth in total revenues despite pressure on NIM
Growth in total revenues despite pressure on NIM IFS Total revenues (1) NIM S/ mm 5,673(4) 5.4% 5.3%(3) 5,384(3) 4.9%(4) 4,889(2) 4.7%(4) 3.9% 3,061 2,612(4) 2018 2019 2020 1H20 1H21 2018 2019 2020 1H20 1H21 Net profit ROAE S/ mm 1,479(3) 21.7% 1,236(2) 18.6%(2) 18.6%(3) 984 514(4) 6.0%(4) n.m. -216
Slide 37: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 38: 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 38
Slide 39: 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 19 years 2011 - 201
Slide 40: 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 41: 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 42: Committed to a vision of sustainability
Committed to a vision of sustainability At Interbank, we published our 2020 Sustainability Report where we outlined the actions taken throughout the year in order to achieve our vision of sustainability Aspiration To be a responsible and sustainable financial platform that contributes to the country
Slide 43: IFS' milestones towards a stronger Corporate Governance and ESG disclosure
IFS’ milestones towards a stronger Corporate Governance and ESG disclosure NYSE IPO Higher reporting SOX implementation with Appointment of Jul19 standards following KPMG resulting in independent NYSE listing improved internal controls Audit Committee (2Q19) and procedures (2Q20) (3Q19 – 1Q21) New d
Slide 44: Highlights
Highlights Distinctive platform to benefit from growth 01. potential Outstanding track record of sustainable 02. growth and high profitability 03. Unique culture and commitment to ESG
Slide 45: Appendix
Cd Intercorp Financial Services oooeeen | Appendix
Slide 46: Resilient financial system
Resilient financial system Gross loans growth and asset quality Profitability recovering after COVID-19 pandemic Banking system gross loans (S/ bn) Banking system net profit (S/ mm) PDL 3.0% 3.0% 3.8% 3.1% 3.6% ROAE 18.5% 18.5% 4.0% 8.0% 9.5% ratio CAGR 326 340 321 2018-20 271 286 9,082 8,220 12.4%
Slide 47: Reactiva Peru loan balances
Reactiva Peru loan balances Reactiva Peru loan balances by segment S/ million, Local GAAP 6,709 6,617 106 110 6,348 6,082 725 573 107 485 101 419 3,833 3,807 69 3,900 3,644 3,463 742 2,640 1,978 2,126 2,113 2,099 381 2Q20 3Q20 4Q20 1Q21 2Q21 SME Mid-sized Corporate Other 47
Slide 48: IFS income statement – IFRS
IFS income statement – IFRS % chg Incom e S t a t e m e nt ( S / m m ) 2018 2019 2020 1H20 1H21 % chg '19 / '18 % chg '20/ '19 1H21/ 1H20 Interest and similar income 4,321.3 4,847.2 4,665.0 2,291.7 2,198.0 12.2% (3.8%) (4.1%) Interest and similar expenses (1,177.3) (1,424.0) (1,192.3) (646.3) (496.7
Slide 49: IFS balance sheet – IFRS
IFS balance sheet – IFRS % chg Ba la nce S he e t ( S / m m ) 2018 2019 2020 1H20 1H21 % chg '19 / '18 % chg '20/ '19 1H21/ 1H20 Cash and due from banks 8,380.4 11,128.9 18,765.5 15,124.5 19,410.4 32.8% 68.6% 28.3% Inter-bank funds 495.0 85.0 18.1 31.8 0.0 (82.8%) (78.7%) (100.0%) Financial investme
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