Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q2 2019 Earnings Presentation
38 slides from Intercorp Financial Services's earnings presentation, August 2019
Slide 1: Earnings Presentation 2Q19 Results
Earnings Presentation 2Q19 Results
Slide 2: Highlights 2Q19
Highlights 2Q19 Strong quarter with 21.7% ROAE • Adjusted net profit(1) increased 12.3% QoQ and 5.1% YoY Banking • 12.7% YoY loan growth, with a 17.3% increase in retail loans and a slower growth in commercial loans • Retail deposits grew 14.5% YoY, gaining 80 bps in market share in the year • NIM u
Slide 3: IFS 2Q19 profits remained stable
IFS 2Q19 profits remained stable IFRS Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 21.4%(1) 19.0% 18.5% ROAE 23.9% 19.8%(2) 21.7% +13.1% YoY ROAE: 19.2% growth excl. excl. M2M in reversion of investments provisions in for S/-14.9 mm 2Q18 and +0.1% at In
Slide 4: IFS key indicators 2Q19
IFS key indicators 2Q19 IFRS S/ million 2Q18 1Q19 2Q19 %chg QoQ %chg YoY (1) Total revenues 1,221.2 1,290.8 1,312.2 1.7% 7.5% Net interest and similar income 784.2 831.0 859.4 3.4% 9.6% (2) Efficiency ratio 34.1% 33.7% 34.8% 110 bps 70 bps Profit for the period 204.9 352.7 350.1 -0.7% 70.8% IFS Adju
Slide 5: IFS 1H19 profits increased 9.9% YoY
IFS 1H19 profits increased 9.9% YoY IFRS Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 20.4%(1) 18.9% ROAE: 19.3% ROAE 22.1% 20.7%(2) excl. M2M in +11.7% growth investments excl. reversion for S/-14.9 mm of provisions in at Inteligo 1H18 and 1H19(3) 703
Slide 6: IFS key indicators 1H19
IFS key indicators 1H19 IFRS S/ million 1H18 1H19 %chg YoY (1) Total revenues 2,400.3 2,603.0 8.4% Net interest and similar income 1,553.5 1,690.3 8.8% Efficiency ratio(2) 34.0% 34.3% 30 bps Profit for the period 494.9 702.8 42.0% IFS (3) Adjusted profit for the period 639.7 702.8 9.9% Adjusted ROAE
Slide 7: Relevant net income reached S/ 945 million in 1H19
Relevant net income(1) reached S/ 945 million in 1H19, a 10% increase YoY 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 22.8% 21.5% 42.3% 42.7% 24.7% 27.9% 572 261 112 534 234 93 540(3
Slide 8: Positive evolution of our digital transformation indicators
Positive evolution of our digital transformation indicators Digital users and 100% digital customers Off-branch transactions % of digital users and 100% digital customers at Interbank % of total transactions performed through digital platform 60% 25% 46% 19% 95% 95% 20% 17% 75% 78% June 2018 June 20
Slide 9: Continuous growth in digital sales
Continuous growth in digital sales Savings accounts Business accounts (Cuenta Negocio) Innovative features launched in 2Q19 % of savings accounts opened digitally % of business accounts opened digitally 44% 29% Cardless withdrawals from ATMs 3% 0% June 2018 June 2019 June 2018 June 2019 Digital open
Slide 10: Banking
Cd Intercorp Financial Services Banking
Slide 11: Improvement in NIM
Improvement in NIM IFRS Net interest and similar income Loan provision expense S/ million S/ million NIM 5.6% 5.5% 5.8% Cost of risk 1.5% 2.3% 2.3% Risk-adj. Adjusted cost 4.1% 4.0% 3.9% 2.4% 2.3% 2.8% NIM(1) of risk(1) +13.8% +31.8% 704 232(2) 619 658 176(2) 186 39 63 193 113 2Q18 1Q19 2Q19 2Q18 1Q
Slide 12: 12.7% YoY loan growth, with 17.3% increase in retail loans
12.7% YoY loan growth, with a 17.3% increase in retail loans and a slower growth in commercial loans Performing loans Breakdown of loans S/ million S/ million %chg %chg 2Q18 1Q19 2Q19 QoQ YoY System’s growth(1) Consumer loans +12.7% Credit cards 4,330.9 5,125.0 5,396.9 5.3% 24.6% Other consumer 5,20
Slide 13: Retail deposits grew 14.5% YoY
Retail deposits grew 14.5% YoY, gaining 80 bps in market share in the year Funding structure Funding breakdown S/ million %chg %chg S/ million 2Q18 1Q19 2Q19 QoQ YoY LDR(2) 103.9% 102.2% 102.3% Deposits 28,995.0 32,561.7 33,112.4 1.7% 14.2% Retail 12,992.6 14,626.0 14,878.8 1.7% 14.5% System’s Comme
Slide 14: Cost of risk within our target
Cost of risk within our target IFRS Cost of risk Non-performing exposure NPL coverage 126.0% 131.4% 127.9% ratio(3) 12.1% 2.8%(2) 11.3% 2.4%(1) 10.4% 2.3% 2.3% 2.3% 3.1% 2.9% 2.9% 1.5% 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 (4) (5) (S2+S3) ratio NPL ratio (S3 + refinanced loans) Cost of risk – Retail and com
Slide 15: Risk profile improved QoQ and YoY
Risk profile improved QoQ and YoY IFRS Expected loss Expected loss – Retail banking by product Stock of provisions (% of total exposure) Stock of provisions (% of total exposure) 6.1% 10.3% 5.8% 5.8% 5.6% 5.7% 9.6% 5.5% 9.2% 9.1% 9.0% 9.1% 4.2% 3.9% 3.8% 3.8% 3.8% 3.7% 6.1% 6.1% 6.0% 5.9% 5.8% 5.1%
Slide 16: Solid core capital levels for Interbank
Solid core capital levels for Interbank Capital ratio evolution Capital ratios Tier I Tier II CET1 Banking system 15.1% 15.0% 14.7% 15.3% 14.8% Total Capital 16.7% 16.4% Ratio 16.2% 16.1% 15.8% • Interbank’s capital ratio of 16.1%, 4.8% 4.4% above regulatory risk-adjusted 4.6% 4.3% 4.4% minimum capi
Slide 17: Insurance
Cd Intercorp Financial Services Insurance
Slide 18: Gross premiums plus collections increased 9.6% YoY
Gross premiums plus collections(1) increased 9.6% YoY IFRS Gross premiums plus collections by business unit S/ million +9.6% YoY(1) • Regulated Annuities decreased 6.5% QoQ due to a contraction in annuities 238 227 market, but increased 14.6% YoY 2 220 38 1 • Collections from Private Annuities 59 57
Slide 19: Net premiums increased 2.4% YoY
Net premiums increased 2.4% YoY IFRS Net premiums Adjustment of technical reserves S/ million S/ million Annuities market 30.6% 32.3% 32.2% share 171 164 164 161 1 13 57 56 51 32 32 145 73 64 30 66 81 76 19 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 Annuities Individual life Retail Insurance D&S Net claims and b
Slide 20: Interseguro's investment portfolio increased 3.6% QoQ
Interseguro’s investment portfolio increased 3.6% QoQ IFRS Investment portfolio Results from investments(1) S/ million S/ million ROIP(2) 5.4% 6.0% 6.1% Impact of IFRS9: +10.0% 2Q18: S/ -14 mm 1Q19: S/ +7 mm +22.3% 2Q19: S/ -6 mm 12,100 11,681 182 11,005 1,000 173 990 1,012 801 912 149 815 10,299 9,
Slide 21: Wealth Management
Cd Intercorp Financial Services Wealth Management
Slide 22: 2Q19 results impacted by market dynamics
2Q19 results impacted by market dynamics IFRS Net interest and similar income Fees from financial services S/ million S/ million Fees/AUM(1) 1.0% 0.8% 0.8% -16.1% -12.9% 43 39 37 29 31 25 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 Other income Other expenses S/ million S/ million Efficiency 34.9% 25.2% 45.9% rat
Slide 23: Continuous growth in AUM and loans
Continuous growth in AUM and loans IFRS AUM Loans S/ million S/ million +8.9% +20.0% 17,769 18,479 1,518 16,969 1,464 1,265 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 Revenues Net profit S/ million S/ million ROAE 26.3% 38.1% 16.8% ROAE: 24.0% excl. M2M in -17.7% -32.2% investments for S/-14.9 mm 106 78 76 37 4
Slide 24: Summary
Cd Intercorp Financial Services Summary
Slide 25: Takeaways
Takeaways Strong quarter with 21.7% ROAE • Adjusted net profit(1) increased 12.3% QoQ and 5.1% YoY Banking • 12.7% YoY loan growth, with a 17.3% increase in retail loans and a slower growth in commercial loans • Retail deposits grew 14.5% YoY, gaining 80 bps in market share in the year • NIM up 30 b
Slide 26: Appendix
Cd Intercorp Financial Services Appendix
Slide 27: IFS 2Q19 Statement of financial position
IFS 2Q19 Statement of financial position IFRS Intercorp Financial Services' Statement of financial position S/ million %chg %chg 06.30.18 03.31.19 06.30.19 06.30.19/ 06.30.19/ 03.31.19 06.30.18 Assets Cash and due from banks and inter-bank 7,941.3 9,730.6 10,823.0 11.2% 36.3% funds Financial investm
Slide 28: IFS 2Q19 P&L
IFS 2Q19 P&L IFRS Intercorp Financial Services' P&L statement S/ million %chg %chg 2Q18 1Q19 2Q19 QoQ YoY Interest and similar income 1,070.2 1,166.7 1,201.7 3.0% 12.3% Interest and similar expenses -286.0 -335.8 -342.3 2.0% 19.7% Net interest and similar income 784.2 831.0 859.4 3.4% 9.6% Impairmen
Slide 29: Banking segment's 2Q19 P&L
Banking segment’s 2Q19 P&L IFRS Banking Segment's P&L Statement S/ million %chg %chg 2Q18 1Q19 2Q19 QoQ YoY Interest and similar income 879.9 965.0 1,019.1 5.6% 15.8% Interest and similar expenses -261.0 -307.4 -314.9 2.4% 20.6% Net interest and similar income 618.9 657.6 704.3 7.1% 13.8% Impairment
Slide 30: Banking segment's net profit IFRS vs. Local GAAP
Banking segment’s net profit IFRS vs. Local GAAP Net profit – IFRS Total other income S/ million S/ million Lowered deferred income tax +5.1% 6 6 286 300 300 11 10 26 Includes 267(1) S/ 2.7 mm Retail: Reclassification adjustment due S/ +26.3 mm of fees on to adoption of loans, from IFRS 16 Commercia
Slide 31: Dollarization levels decreased in retail loans
Dollarization levels decreased in retail loans Total loans Retail loans Commercial loans % PEN 67.0% 68.8% 88.2% 89.9% 55.5% 56.9% System 7.6% 6.8% 27.4% 25.9% 49.9% 49.6% 92.4% 93.2% 72.6% 74.1% 50.1% 50.4% 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 Retail loans breakdown Commercial loans breakdown Consumer(1)
Slide 32: Loan delinquency remained stable YoY
Loan delinquency remained stable YoY Local GAAP PDL vs. System Loan provision expense vs. System PDL ratio Cost of risk Interbank Coverage 176.6% 177.0% 173.4% Ratio 3.1% 3.0% 3.1% 1.9% 1.9% 1.9% 2.7% 2.6% 2.7% 2.3% 2.4% 2.6% 2Q18 1Q19 2Q19 2Q18 1Q19 2Q19 Interbank System Interbank System PDL retail
Slide 33: Further improvement in productivity supported by digital transformation
Further improvement in productivity supported by our digital transformation Retail deposits per branch Products sold per branch Retail deposit balances / n° of branches (S/ mm) N° of products sold / n° of branches (thousands) Number of 272 263 branches +19% +36% 56 47 YoY 1.7 YoY 1.2 June 2018 June
Slide 34: Other expenses grew 8.5% YoY
Other expenses grew 8.5% YoY Growth in other expenses YoY growth in other expenses by line % YoY growth +15.1% +5.6% +40.3% +6.2% +8.5% 10 • Efficiency ratio at 39.1% in 2Q19, 4 compared to 40.3% in 1Q19, when 8 9 adjusted from the gain on sale of Interfondos, and 40.7% in 2Q18 • Total expenses / As
Slide 35: Insurance segment's 2Q19 P&L
Insurance segment’s 2Q19 P&L IFRS Insurance segment's P&L Statement S/ million %chg %chg 2Q18 1Q19 2Q19 QoQ YoY Interest and similar income 157.5 156.8 152.2 -3.0% -3.4% Interest and similar expenses -12.9 -13.6 -12.3 -9.6% -4.6% Net Interest and similar income 144.6 143.2 139.8 -2.3% -3.3% Recovery
Slide 36: Insurance segment's net profit IFRS vs. Local GAAP
Insurance segment’s net profit IFRS vs. Local GAAP Net profit – IFRS Total other income S/ million S/ million +5.5% 31(1) 29 33 22 -145 -114 2Q18 1Q19 2Q19 125 194 Net profit – Local GAAP 14 S/ million 33 Net profit (SBS) Underwriting Investment result Goodwill and Adjusted net profit 2Q19 result In
Slide 37: Wealth management segment's 2Q19 P&L
Wealth management segment’s 2Q19 P&L IFRS Wealth Management Segment's P&L Statement S/ million %chg %chg 2Q18 1Q19 2Q19 QoQ YoY Interest and similar income 40.0 45.6 38.9 -14.6% -2.7% Interest and similar expenses -10.8 -14.9 -14.4 -2.9% 33.4% Net interest and similar income 29.2 30.7 24.5 -20.2% -1
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Intercorp Financial Services — Q2 2019 Earnings Presentation on 6ix