Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q1 2021 Earnings Presentation
50 slides from Intercorp Financial Services's earnings presentation, May 2021
Slide 1: Earnings Presentation 1Q21 Results
Earnings Presentation 1Q21 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: Record earnings of S/ 528.7 million in 1Q21, ROAE at 23.7%
Record earnings of S/ 528.7 million in 1Q21, ROAE at 23.7% Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 6.6% 18.1%(1) 23.7% ROAE 13.8% 13.7%(1) 20.5% >3x +44.4% 529 320 391(1) 221 208(1) 14 14 529 320 145 377 221 194 145 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 In
Slide 5: Highlights
Highlights Strong recovery in earnings in 1Q21, thanks to lower provisions and higher results from investments • Key banking indicators recovering while retail loans resume growth • Strong deposit franchise with 14.1% market share in retail deposits. Cost of funds down almost by half from last Banki
Slide 6: IFS key indicators
IFS key indicators Intercorp Financial Services Business segments 23.7% 5.6% 18.1% 4.4% 3.7% ROAE(1) 6.6% NIM(1) 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 2.4% 3.4% 3.1% 1.7% Cost of 1.8% ROAA 0.8% risk 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 16.1% 17.0% 17.0% 5.3% 12.0% 4.4% 3.8% Capital 11.5% 11.5% NIM(1) TCR CET1 1Q20
Slide 7: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 6
Slide 8: Key messages
Key messages 1 2 3 Macro recovery Strong liquidity, Ongoing improvement continues manageable dollarization in activity and solid capitalization 4 5 6 Digital trends continue Cost of risk below Continued focus to support IFS’ strategy pre COVID-19 levels on efficiency 7
Slide 9: Positive trends in GDP and public investment
1 Positive trends in GDP and public investment GDP Expectations on economic activity (YoY % Chg) (Index > 50, indicates positive sentiment) 18.4% 3 months 12 months 10.7% 3.8% 4.5% 66 65 66 0.5% 61 61 57 53 52 48 50 51 30 47 41 44 40 TB 29 U -39.1% 9 Feb20 Apr20 Dec20 Mar21(E) FY21(E) FY22(E) Feb20
Slide 10: Liquidity levels remain high
2 Liquidity levels remain high Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of March 31, 2021 S/ million Total LDR MS total 12.5% 13.3% 13.7% deposits Apr21 112% 91% 103% MS retail 13.7% 13.9% 14.1% 89% 90% System: deposits 95% +33.0% 46,637 44,577 35,062 Interbank BCP BBV
Slide 11: Manageable dollarization levels at Interbank
2 Manageable dollarization levels at Interbank Total loans Retail loans Commercial loans % PEN 68% 74% 84% 91% 60% 66% System 10% 6% 27% 23% 45% 37% 90% 94% 73% 77% 55% 63% 1Q16 1Q21 1Q16 1Q21 1Q16 1Q21 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Mic
Slide 12: Solid capital ratios at all IFS' segments
2 Solid capital ratios at all IFS’ segments 165.7% 162.9% 138.5% Banking System 14.3% 15.5% 16.3% 100.0% regulatory TCR minimum 17.0% 17.0% 16.1% 1Q20 4Q20 1Q21 12.0% 11.5% 11.5% Solvency ratio 10.6% regulatory minimum 16.1% 17.0% 17.0% 28.4% 29.9% 22.4% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 8.0% Total capi
Slide 13: Ongoing improvement in our core operating indicators
Ongoing improvement in our core operating 3 indicators Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 113 106 115 119 100 100 107 94 100 52 38 8 Feb20 Apr20 Dec20 Apr21 Feb20 Apr20 D
Slide 14: Strong recovery in revenues at IFS mainly due to insurance business
Strong recovery in revenues at IFS mainly due to 3 insurance business Intercorp Financial Services(1) Banking(1) S/ million S/ million +19.4% -4.1% 1,534 1,546 1,034 1,023 992 1,295 125 123 125 282 388 112 185 39 190 163 220 186 110 160 201 910 941 734 747 647 834 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 Insur
Slide 15: Continuous improvement in our digital indicators
Continuous improvement in our digital indicators 4 Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally Apr21 Apr21 Apr21 78% 57% 53% 76% 54% 54% 48% 69% 42% 38% 57% 27% Mar19 Mar20 Mar21 Mar19 M
Slide 16: 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: +14.4% CAGR: +38.7% 4,024 112 3,539 3,076 76 58 Mar19 Mar20 Mar21 Mar19 Mar20 Mar21 Interbank - Retail 100% digital customers Interbank – Tunki and
Slide 17: Lower rescheduled loan balances
Lower rescheduled loan balances 5 Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 335 (Thousand) Clients 343 459 348 Rescheduled 34% 43% (Thousand) 35% balance (%) Rescheduled 8.6 30% 31% 22% 6.9 6.6 balance (%) 12.7 Apr20 Jun20 Mar21 10.9 In
Slide 18: 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 99% 99% payments due Payments of rescheduled loans 17.1 17.3 Collected Requested relief Not paid 5.7 6.3 (37%) (38%) (33%) 96.2% 97.0
Slide 19: 1.8% CoR in 1Q21, below pre COVID-19 levels
1.8% CoR in 1Q21, below pre COVID-19 levels 5 Interbank - Cost of risk Interbank - Non-performing exposure NPL coverage 136.1% 181.5% 170.5% ratio 3.4% 12.3% 3.1% 10.8% 9.7% 1.8% FY19: 2.2% 3.6% 2.7% 3.4% 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 (S2+S3) ratio NPL ratio (S3 + refinanced loans) Cost of risk – Re
Slide 20: Continued focus on efficiency and branch rationalization
Continued focus on efficiency and branch rationalization 6 Efficiency ratio Interbank – Other expenses bridge from 1Q20 to 1Q21 % YoY growth by line +12.3% -19.3% +18.1% +3.8% -2.8% 38.8% 39.1% +9 36.3% 30.0% -33 +6 +5 25.4% 416 404 11.9% 10.0% n.m. 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1Q20 Techn
Slide 21: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 20
Slide 22: Recovering key banking indicators, NIM still under pressure
Recovering key banking indicators, NIM still Banking under pressure Net interest and similar income Loan provision expense S/ million S/ million 4.8% NIM excl. NIM(1) 5.6% 4.4% 3.7% Reactiva Cost of risk 3.4% 3.1% 1.8% Peru and excess cash NIM after 3.2% 2.5% 2.6% provisions(2) -11.9% -39.6% 734 747
Slide 23: Retail loans resume growth
Banking Retail loans resume growth Performing loans Breakdown of loans S/ million S/ million %chg %chg System’s growth(1) 1Q20 4Q20 1Q21 QoQ YoY Consumer loans +12.3% Credit cards & other loans 7,925.0 6,135.7 5,778.0 -5.8% -27.1% Payroll deduction loans(2) 4,361.4 4,318.9 4,445.2 2.9% 1.9% +10.3% T
Slide 24: Strong deposit franchise with cost of funds down almost by half
Strong deposit franchise with cost of funds down Banking almost by half from last year Funding structure Funding breakdown S/ million S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY LDR(2) 103.4% 93.3% 89.0% Deposits 35,062.1 44,576.8 46,636.8 4.6% 33.0% Retail 16,816.6 20,810.5 21,115.3 1.5% 25.6% Syst
Slide 25: Regular annuities leading recovery in premiums in 1Q21
Regular annuities leading recovery in premiums Insurance in 1Q21 Gross premiums plus collections – Quarterly evolution Gross premiums plus collections – Monthly evolution S/ million S/ million Annuities market 27.9% 27.6% 28.7% share(1) +25.1.% >2x 260 83 228 74 57 208 70 19 56 16 41 69 22 14 39 14
Slide 26: Strong results from investments, ROIP at 10.4%
Insurance Strong results from investments, ROIP at 10.4% Investment portfolio Results from investments(1) S/ million S/ million ROIP(2) 4.3% 6.8% 10.4% Impacts on investments: 1Q20: S/ -50 mm +13.0% 4Q20: S/ +39 mm 13,939 >2x 1Q21: S/ +122 mm 13,298 355 1,044 1,204 11,770 1,250 985 1,384 921 229 11,
Slide 27: Significant growth in fee income at Inteligo
Wealth Significant growth in fee income at Inteligo Management Net interest and similar income Fees from financial services S/ million S/ million Fees / Avg. 1.0% 0.8% 0.9% AUM(2) +10.5% +14.7% 40 49 43 40 28 26 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 Other income Revenues S/ million S/ million n.m. n.m. Posi
Slide 28: AUM grew 6.5% QoQ and 24.1% YoY
Wealth AUM grew 6.5% QoQ and 24.1% YoY Management AUM Loans S/ million S/ million +24.1% +7.0% 22,345 1,661 1,724 20,989 1,611 18,006 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 Other expenses Net profit S/ million S/ million ROAE n.m. 62.8% 30.7% -7.2% n.m. 39 Positive 35 155 impact on 32 investments: S/ +50 mm
Slide 29: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 28
Slide 30: Operating trends 1Q21
Operating trends 1Q21 Capital Profitability Loan growth 2021 1Q21 2021 1Q21 Slow recovery in retail, IBK TCR >15% 17.0% and decreasing volumes in IFS ROAE >14% 23.7% commercial IBK CET1 >11% 11.5% Growth YTD To remain at sound levels Above guidance Retail +0.2% / Commercial flat Revenues Cost of ris
Slide 31: 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 To be a responsible and sustainable financial platform that contributes to the country’s developm
Slide 32: Takeaways
Takeaways 1 2 3 Macro recovery Strong liquidity, Ongoing improvement continues manageable dollarization in activity and solid capitalization 4 5 6 Digital trends continue Cost of risk below Continued focus to support IFS’ strategy pre COVID-19 levels on efficiency 31
Slide 33: Appendix
Cd Intercorp Financial Services Appendix
Slide 34: Relevant net income of S/ 235 million in 1Q21
Relevant net income of S/ 235 million in 1Q21 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 15.2% 8.8% 11.8% 27.4% n.m. 30.7% 112 87 232 134 40 (1) 36 (1) 14 1Q20 1Q21 1Q20 1Q21 Growth
Slide 35: IFS 1Q21 statement of financial position
IFS 1Q21 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Assets Cash and due from banks and inter-bank 11,733.3 18,783.6 19,260.5 2.5% 64.2% funds Financial investments 18,634.9 24,277.1 24,678.8 1.7% 32.4% Loa
Slide 36: IFS 1Q21 P&L
IFS 1Q21 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Interest and similar income 1,248.2 1,187.2 1,085.7 -8.6% -13.0% Interest and similar expenses -338.1 -266.5 -251.8 -5.5% -25.5% Net interest and similar income 910.1 920.7 833.9 -9.4% -8.4% Impairme
Slide 37: Banking segment's 1Q21 statement of financial position
Banking segment’s 1Q21 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Assets Cash and due from banks and inter-bank 10,295.8 17,720.5 17,968.5 1.4% 74.5% funds Financial investments 6,052.4 8,966.3 10,003.1 11.6% 65.3% Loa
Slide 38: Banking segment's 1Q21 P&L
Banking segment’s 1Q21 P&L Banking Segment's P&L statement S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Interest and similar income 1,037.1 959.2 865.0 -9.8% -16.6% Interest and similar expenses -302.8 -231.9 -218.1 -6.0% -28.0% Net interest and similar income 734.3 727.3 647.0 -11.0% -11.9% Impairme
Slide 39: 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 (1Q21) S/ million S/ million +44.4% 320 221 208(1) 14 320 221 194 225 76 1Q20 4Q20 1Q21 Reclassification of fees on loans, from interest 320 income to fee income Net profit – Local GAAP 9 28
Slide 40: Reactiva Peru Program as an opportunity in mid-sized and SME
Reactiva Peru Program as an opportunity to gain relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +39.6% 20,545 +10.4% 22,308 22,340 9,114 9,442 8,549 485 16,000 6,617 6,348 3,833 573 16,000 8,541 8,957 15,691 15,992 Mar20 Dec2
Slide 41: Capitalization remains at comfortable levels
Capitalization remains at comfortable levels, substantially above minimum requirement Tier I Tier II CET1 Banking system 14.3% 14.8% 15.6% 15.5% 16.3% Total Capital 17.0% 17.0% 17.0% Ratio 16.7%(1) 16.1% 14.7% 4.0% 5.5% 5.5% 5.4% 3.4% • Interbank’s capital ratio of 17.0%, above 12.0% regulatory risk
Slide 42: Insurance segment's 1Q21 statement of financial position
Insurance segment’s 1Q21 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Assets Cash and due from banks and inter-bank 500.3 358.0 425.0 18.7% -15.1% funds Financial investments 10,785.0 12,895.0 12,094.4 -6.2% 12.1% Prop
Slide 43: Insurance segment's 1Q21 P&L
Insurance segment’s 1Q21 P&L Insurance Segment's P&L statement S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Interest and similar income 167.9 176.0 175.9 0.0% 4.7% Interest and similar expenses -19.8 -22.7 -22.5 -1.0% 13.5% Net interest and similar income 148.1 153.2 153.4 0.1% 3.6% Recovery (loss) d
Slide 44: 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 212 178 178 56 67 55 40 38 33 -53 -53 116 78 86 -89 1Q20 4Q20 1Q21 1Q20 4Q20 1Q21 Annuities Individual life Retail Insurance D&S Net claims and benefits incurred Net in
Slide 45: 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 (1Q21) S/ million S/ million 137 76 76 38 47 4 16 (22) 1Q20 4Q20 1Q21 1 10 137 Net profit – Local GAAP 112 S/ million +178.0% 112 Net profit Net Recurrent Net gain on Other Impairment Trans
Slide 46: Wealth management segment's 1Q21 statement of financial position
Wealth management segment’s 1Q21 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Assets Cash and due from banks and inter-bank 758.8 596.8 767.4 28.6% 1.1% funds Financial investments 1,395.1 1,881.0 1,916.3 1.9%
Slide 47: Wealth management segment's 1Q21 P&L
Wealth management segment’s 1Q21 P&L Wealth Management's P&L statement S/ million %chg %chg 1Q20 4Q20 1Q21 QoQ YoY Interest and similar income 41.1 51.1 37.8 -26.0% -8.0% Interest and similar expenses -15.5 -10.8 -9.6 -10.9% -38.3% Net interest and similar income 25.5 40.4 28.2 -30.1% 10.5% Impairme
Slide 48: 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 49: 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 — Q1 2021 Earnings Presentation on 6ix