Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q3 2020 Earnings Presentation
49 slides from Intercorp Financial Services's earnings presentation, November 2020
Slide 1: Earnings Presentation 3Q20 Results
Earnings Presentation 3Q20 Results
Slide 2: Agenda
Agenda Financial Key highlights messages 3Q20 Takeaways results 1
Slide 3: Agenda
Agenda Financial Key highlights messages 3Q20 Takeaways results 2
Slide 4: IFS profitability recovers on lower provisions at Interbank and strong results at Interseguro and Inteligo
IFS profitability recovers on lower provisions at Interbank and strong results at Interseguro and Inteligo Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 16.8% n.m. 16.3%(1) 18.0% 1.8%(1) ROAE 19.8% n.m. 10.8%(1) 20.4%(2) n.m. -1.7% -46.1% 335 329(1) 1,03
Slide 5: Highlights
Highlights 3Q20 earnings positively impacted by lower provisions and top line recovery • 12.9% market share in loans, boosted by Reactiva Peru disbursements • Quarterly recovery in revenues with adjusted NII growing 5.7% and total other income 26.8% Banking • 50 bps QoQ reduction in cost of funds, d
Slide 6: IFS key indicators
IFS key indicators 3Q20 %chg 9M20 %chg S/ million 3Q19 2Q20 3Q20 9M19 9M20 QoQ YoY YoY (1) Total revenues 1,369.2 1,315.2 1,510.4 3,958.1 4,118.4 14.8% 10.3% 4.0% (1) Net interest and similar income 879.4 870.5 919.6 2,560.0 2,698.8 5.6% 4.6% 5.4% (1) Efficiency ratio 34.7% 29.9% 27.9% 34.5% 31.2% -
Slide 7: Agenda
Agenda Financial Key highlights messages 3Q20 Takeaways results 6
Slide 8: 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 9: Liquidity levels remain high in 3Q20 with continuous growth in deposits at Interbank
Liquidity levels remain high in 3Q20 with 1 continuous growth in deposits at Interbank Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of September 30, 2020 S/ million Total LDR Market 12.7% 13.2% 13.1% Share 104% 107% 99% 99% System: 100% +26.1% 41,449 42,538 33,742 BCP Inte
Slide 10: Strengthened capital ratios at all IFS' segments
1 Strengthened capital ratios at all IFS’ segments 167.4% 142.6% 144.5% Banking System 14.9% 14.8% 15.6% 100.0% regulatory TCR minimum 16.7%(1) 17.0% 11.4% 11.4% 11.1% 3Q19 2Q20 3Q20 15.4% Solvency ratio 10.6% regulatory minimum 16.7% 17.0% 15.4% 23.3% 23.8% 21.1% 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 8.0%
Slide 11: 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% 3.9% 4.0% 13.3% 14.1% TB 8.7% U 7.7% -8.2% -12.7% -14.4% -12.2% 4.4% -18.1% -42.3% -40.5% -2.0% Feb20 Apr20 Jun20 Sep20(E) FY20(E) FY21(E) Feb20 Apr20 Jun
Slide 12: 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 13: 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 14: 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 15: 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 16: Outstanding rescheduled loans slightly decreasing
Outstanding rescheduled loans slightly 4 decreasing Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 431 46% (Thousand) at System Level(1) Clients 343 459 447 28% Rescheduled 34% 43% (Thousand) 42% at System balance (%) Level(1) 8.6 8.3 Resche
Slide 17: 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 18: 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 19: 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 20: Agenda
Agenda Financial Key highlights messages 3Q20 Takeaways results 19
Slide 21: Key banking indicators recovering from COVID-19 impacts
Key banking indicators recovering from COVID-19 Banking impacts Net interest and similar income Loan provision expense S/ million S/ million Including Negative NIM(1) 5.8% 5.0% impact on NII: 4.7% Including Cost of risk 2.6% 13.4% 4.5% impact on provisions from 4.0% impact on NII: NIM: 4.6% COVID-19
Slide 22: 30 bps QoQ gain in market share in loans, to 12.9%
Banking 30 bps QoQ gain in market share in loans, to 12.9% Performing loans Breakdown of loans S/ million S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY System’s growth(1) Consumer loans Credit cards 5,662.4 5,285.0 4,895.4 -7.4% -13.5% Other consumer 6,189.2 6,360.5 6,221.2 -2.2% 0.5% +19.8% Total con
Slide 23: Reactiva Peru Program as an opportunity to gain relevance in the mid-sized and SME segments
Reactiva Peru Program as an opportunity to gain Banking relevance in the mid-sized and SME segments Commercial loans Corporate loans S/ million, Local GAAP S/ million, Local GAAP +41.5% 20,545 +11.8% 22,639 10,286 20,545 9,556 8,549 742 6,709 725 16,000 3,833 3,833 16,000 9,544 8,830 16,713 15,929 M
Slide 24: Strong deposit franchise with cost of funds down 120 bps YoY
Strong deposit franchise with cost of funds down Banking 120 bps YoY Funding structure Funding breakdown S/ million S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY LDR(2) 103.8% 97.2% 99.0% Deposits 33,741.8 41,449.4 42,538.2 2.6% 26.1% Retail 15,316.3 18,834.4 19,561.2 3.9% 27.7% System’s Commercial(1)
Slide 25: Capitalization remains at comfortable levels, substantially above minimum requirement
Capitalization remains at comfortable levels, Banking substantially above minimum requirement Tier I Tier II CET1 Banking system 14.9% 14.6% 14.3% 14.8% 15.6% Total Capital 17.0% 16.7%(1) Ratio 16.1% 15.4% 15.2% 14.7% 4.0% 5.5% 4.1% 3.9% 3.4% • Interbank’s capital ratio of 17.0%, above 12.0% regulat
Slide 26: Private annuities leading recovery in premiums
Insurance Private annuities leading recovery in premiums Gross premiums plus collections – Quarterly evolution Gross premiums plus collections – Monthly evolution S/ million S/ million Annuities market 26.1% 25.5% 27.5% YoY %Chg. -2.9% share(1) -14.7% 70 64 202 22 54 172 53 19 62 135 56 18 19 11 36
Slide 27: Investment portfolio increased 4.1% QoQ, ROIP at 6.2%
Investment portfolio increased 4.1% QoQ, ROIP Insurance at 6.2% Investment portfolio Results from investments(1) S/ million S/ million ROIP(2) 6.1% 6.3% 6.2% +7.0% Impact on investments: +8.1% 2Q20: S/ +5 mm 201 3Q20: S/ +9 mm 13,163 12,650 191 12,303 186 1,045 1,031 962 1,205 926 1,049 10,569 10,91
Slide 28: Strong revenues in 3Q20, positively affected by M2M on the investment portfolio
Strong revenues in 3Q20, positively affected by Wealth Management M2M on the investment portfolio Net interest and similar income Fees from financial services S/ million S/ million Fees / Avg. 0.9% 0.8% 0.8% AUM(1) -5.6% -3.0% 27 25 41 40 -0.9 % 40 21 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 Other income Reven
Slide 29: AUM grew 3.0% QoQ and 9.9% YoY
Wealth AUM grew 3.0% QoQ and 9.9% YoY Management AUM Loans S/ million S/ million +9.9% +3.5% 19,302 19,880 1,569 1,662 -2.3% 1,624 18,087 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 Other expenses Net profit S/ million S/ million ROAE 9.7% 17.2% 53.5% Positive impact on -20.9% >5x investments: S/ +77 mm 35 111 27
Slide 30: Agenda
Agenda Financial Key highlights messages 3Q20 Takeaways results 29
Slide 31: Summary
Summary 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’ strategy c
Slide 32: Appendix
Cd Intercorp Financial Services Appendix
Slide 33: Relevant net income of S/ 509 million in 9M20
Relevant net income of S/ 509 million in 9M20 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 23.6% 5.6% 33.0% 15.1% 21.7% 14.5% 131 963 328 88 168 (1) 253 205 (2) 111 9M19 9M20 9M19 9M2
Slide 34: IFS 3Q20 statement of financial position
IFS 3Q20 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Assets Cash and due from banks and inter-bank 11,710.7 15,156.3 17,573.1 15.9% 50.1% funds Financial investments 18,353.2 21,198.7 22,787.9 7.5% 24.2% Lo
Slide 35: IFS 3Q20 P&L
IFS 3Q20 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Interest and similar income 1,228.9 1,043.5 1,186.1 13.7% -3.5% Interest and similar expenses -349.5 -309.7 -281.0 -9.3% -19.6% Net interest and similar income 879.4 733.8 905.1 23.3% 2.9% Impairment
Slide 36: Banking segment's 3Q20 statement of financial position
Banking segment’s 3Q20 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Assets Cash and due from banks and inter-bank 10,025.3 13,830.4 16,338.4 18.1% 63.0% funds Financial investments 5,056.4 7,605.2 8,470.4 11.4% 67.5% Loa
Slide 37: Banking segment's 3Q20 P&L
Banking segment’s 3Q20 P&L Banking Segment's P&L statement S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Interest and similar income 1,038.2 853.1 987.0 15.7% -4.9% Interest and similar expense -314.6 -273.8 -244.8 -10.6% -22.2% Net interest and similar income 723.6 579.3 742.1 28.1% 2.6% Impairment l
Slide 38: Revenue impacts on Interbank's IFRS figures
Revenue impacts on Interbank’s IFRS figures 1 Modification of S/ million 2Q20 3Q20 9M20 contractual cash flows(1) Impact on revenues -136.6 -14.5 -151.1 Total revenue impacts 2 S/ million 2Q20 3Q20 9M20 S/ million 2Q20 3Q20 9M20 Interest on loans Total impact on on Stage 1 and 2(2) -136.6 43.8 -92.9
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 (3Q20) S/ million S/ million Retail: S/ -109 mm -46.1% 120 147 Commercial: S/-26 mm 291 157(1) -10 147 Includes -471(1) S/ 1.2 mm adjustment due -96 Reclassification to adoption of of fees on
Slide 40: Dollarization decreased in retail and commercial loans
Dollarization decreased in retail and commercial loans Total loans Retail loans Commercial loans % PEN 69.0% 74.7% 90.0% 91.2% 56.8% 67.2% System 6.8% 6.0% 26.3% 21.0% 33.9% 50.5% 93.2% 94.0% 73.7% 79.0% 66.1% 49.5% 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 Retail loans breakdown Commercial loans breakdown Cons
Slide 41: Insurance segment's 3Q20 statement of financial position
Insurance segment’s 3Q20 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Assets Cash and due from banks and inter-bank 705.8 462.2 447.6 -3.2% -36.6% funds Financial investments 11,341.1 11,618.4 12,118.7 4.3% 6.9% Proper
Slide 42: Insurance segment's 3Q20 P&L
Insurance segment’s 3Q20 P&L Insurance Segment's P&L statement S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Interest and similar income 148.0 150.5 160.5 6.7% 8.5% Interest and similar expenses -19.3 -22.1 -22.3 0.8% 15.4% Net interest and similar income 128.7 128.4 138.3 7.7% 7.4% Recovery (loss) du
Slide 43: Higher net claims and benefits offset by a recovery in premiums and a positive adjustment of technical reserves
Higher net claims and benefits offset by a recovery in premiums and a positive adjustment of technical reserves Net premiums Adjustment of technical reserves S/ million S/ million 157 131 118 18 61 54 48 33 -3 29 35 -40 64 40 41 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 Annuities Individual life Retail Insuranc
Slide 44: 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 (3Q20) S/ million S/ million +96.0% 67 58 2 1 16 34 80 1 5 3 67 3Q19 2Q20 3Q20 3Q19 2Q20 3Q20 Net profit – Local GAAP S/ million +19.8% Net Profit Net Recurrent Net gain on Other Impairment
Slide 45: Wealth management segment's 3Q20 statement of financial position
Wealth management segment’s 3Q20 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Assets Cash and due from banks and inter-bank 1,027.7 928.9 854.8 -8.0% -16.8% funds Financial investments 1,496.4 1,523.5 1,725.1 1
Slide 46: Wealth management segment's 3Q20 P&L
Wealth management segment’s 3Q20 P&L Wealth Management's P&L statement S/ million %chg %chg 3Q19 2Q20 3Q20 QoQ YoY Interest and similar income 42.5 33.3 37.9 13.9% -10.7% Interest and similar expenses -15.9 -12.5 -12.8 2.7% -19.3% Net interest and similar income 26.6 20.8 25.1 20.7% -5.6% Impairment
Slide 47: 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 48: 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 49: Intercorp Financial Services
Intercorp Financial Services — Q3 2020 Earnings Presentation on 6ix