Intercorp Financial Services Inc. · NYSE:IFS
Intercorp Financial Services — Q3 2021 Earnings Presentation
53 slides from Intercorp Financial Services's earnings presentation, November 2021
Slide 1: Earnings Presentation 3Q21 Results
Earnings Presentation 3Q21 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/ 551.5 million in 3Q21, ROAE at 23.1%
Record earnings of S/ 551.5 million in 3Q21, ROAE at 23.1% Intercorp Financial Services Banking Net profit in S/ million Net profit in S/ million ROAE 15.8% 20.0% 23.1% 0.1% 22.1% ROAE 10.1% 17.3% 18.6% n.m. 18.8% +73.1% >2x 552 1,536 893 299 456 274 319 147 552 1536 299 893 456 274 319 6 3Q20 2Q21
Slide 5: Highlights
Highlights Earnings of S/ 299.1 million and ROAE at 18.6%, extending its positive run this year • Retail loans grew 3.6% QoQ, gaining 10 bps market share to 18.8% • Market share in retail deposits at all-time high of 15.2% Banking • Sequential improvement in NIM continues, up 10 bps in the quarter •
Slide 6: IFS key indicators
IFS key indicators Intercorp Financial Services Business segments 23.1% 22.1% 4.6% 4.7% 20.0% 15.8% 4.0% 3.9% 3.9% ROAE 0.1% NIM 3Q20 2Q21 3Q21 9M20 9M21 3Q20 2Q21 3Q21 9M20 9M21 2.4% 2.3% 4.5% 7.1% 2.0% 1.5% Cost of 1.7% ROAA 1.1% 1.5% n.m. risk 3Q20 2Q21 3Q21 9M20 9M21 3Q20 2Q21 3Q21 9M20 9M21 4.5
Slide 7: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 6
Slide 8: Key messages
Key messages 1 2 3 GDP growth Solid capitalization and Core indicators above decelerating strong liquidity pre COVID-19 levels 4 5 6 Growing customer base Credit risk profile better Continued focus thanks to digital than pre COVID-19 levels on efficiency adoption 7
Slide 9: GDP growth decelerating
1 GDP growth decelerating GDP GDP (YoY % Chg) (YoY % Chg) Jul21: +12.9% Aug21: FY20 FY21(E) FY22(E) 41.9% +11.8% Private Consumption -8.7% 9.2% 4.0% 4.5% 9.5% Public Consumption 7.2% 9.0% 1.5% 0.2% -3.9% -1.4% Private Investment -16.5% 24.5% 0.0% -8.8% TB Public Investment -15.5% 20.0% 4.5% U -29.9%
Slide 10: Currency and inflation rate still impacted by political uncertainty
Currency and inflation rate still impacted by 1 political uncertainty Peru vs. LatAm peers Inflation rate LTM (Index; 100 = Jan20) (%Chg YoY) Peru Chile Mexico Colombia Brazil CPI %Chg YoY (Sep21) Brazil 10.3% 5.8 141 Mexico 6.0% Chile 5.3% Peru 5.2% 121 Colombia 4.5% 3.8 117 3.0 110 2.7 2.4 Central
Slide 11: Solid capital ratios at all IFS' segments
2 Solid capital ratios at all IFS’ segments 155.0% 160.8% 155.7% Banking System 15.6% 15.4% 15.1% 100.0% regulatory TCR minimum 17.0% 16.5% 16.3% 3Q20 2Q21 3Q21 12.0% 11.4% 11.5% Solvency ratio 8.5% 17.0% 16.5% 16.3% regulatory minimum 23.8% 22.6% 23.9% 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 8.0% Total capit
Slide 12: High liquidity with market share in retail deposits at all-time high of 15.2%
High liquidity with market share in retail deposits 2 at all-time high of 15.2% Interbank - Loan to deposit ratio (LDR) Interbank - Total deposits % as of September 30, 2021 S/ million Total LDR MS total 13.1% 13.4% 13.6% deposits 124% MS retail 13.9% 14.5% 15.2% deposits 97% 106% 90% System: +9.5%
Slide 13: Core indicators above pre COVID-19 levels
3 Core indicators above pre COVID-19 levels Credit and debit cards turnover Payroll deduction loans disbursements Gross premiums plus collections (Index; 100 = Feb20) (Index; 100 = Feb20) (Index; 100 = Feb20) 143 124 168 100 100 88 80 100 77 38 52 8 Feb20 Apr20 Sep20 Sep21 Feb20 Apr20 Sep20 Sep21 Fe
Slide 14: 17.8% YoY growth in revenues in 9M21
3 17.8% YoY growth in revenues in 9M21 Intercorp Financial Services Banking S/ million S/ million NIM 4.5% 4.0% 4.1% 4.5% 4.0% 4.6% 3.9% 4.0% 4.7% 3.9% +8.3% -5.1% 1,622 4,683 1,015 965 2,844 2,920 1,498 1,515 -0.1% 964 3,974 116 433 268 149 268 179 377.1 146.1 153 132 163 166 457 489 175 201 199.1
Slide 15: 160 bps YoY improvement in Interbank's risk-adjusted NIM in 3Q21
160 bps YoY improvement in Interbank’s 3 risk-adjusted NIM in 3Q21 Yield on loans after provisions NIM after provisions % % 8.9% 9.1% 4.6% 4.7% Yield 7.7% 7.9% 7.7% 3.9% 4.0% 3.9% NIM on loans +240 +410 +160 +290 Chg YoY Chg YoY bps bps bps bps 6.8% 6.2% 3.3% 2.9% 6.0% 2.8% 4.4% 1.7% 2.1% n.m. 3Q20
Slide 16: Digital indicators improving
Digital indicators improving 4 Interbank - Digital users Interbank - 100% digital customers Interbank – Digital sales % of digital users 100% digital customers % of products sold digitally 79% 58% 49% 75% 53% 46% 39% 61% 32% Sep19 Sep20 Sep21 Sep19 Sep20 Sep21 Sep19 Sep20 Sep21 Interbank – Savings a
Slide 17: Growing customer base thanks to digital adoption
Growing customer base thanks to digital adoption 4 Interbank - Retail customers Interbank - Commercial customers Thousand Thousand CAGR: +14.3% CAGR: +36.1% 4,339 122 3,746 3,323 96 66 Sep19 Sep20 Sep21 Sep19 Sep20 Sep21 Interbank - Retail 100% digital customers Interbank – Retail digital acquisitio
Slide 18: Users of digital payment solutions accelerating
Users of digital payment solutions accelerating 4 Interbank – Tunki users Interbank – Plin users N° of users (million) N° of users (million) IBK >8x >7x 42% 1.5 5.1 1.4 4.8 1.3 4.0 1.0 3.2 0.8 2.6 0.6 2.0 1.3 0.3 0.2 0.7 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Oct21 Mar20 Jun20 Sep20 Dec20 Mar21 J
Slide 19: Rescheduled loan balances down 45% from peak
Rescheduled loan balances down 45% from peak 5 Interbank – Loan rescheduling Interbank – Retail loans rescheduling S/ billion S/ billion Clients 332 441 272 (Thousand) Clients 343 459 283 Rescheduled 34% 43% Var.% (Thousand) 25% balance (%) Sep21/Jun20: -42% Rescheduled 8.6 30% 31% 17% 6.9 balance (
Slide 20: Reactiva Peru loan balances down 18% YoY
Reactiva Peru loan balances down 18% YoY 5 Reactiva Peru loan balances by segment S/ million, Local GAAP Sep21 3Q21 6,709 Segment Rescheduled %chg YoY 106 6,082 725 101 419 5,510 Corporate 5% -53% 338 94 3,833 69 3,900 3,463 Mid-sized 31% -22% 742 3,050 SME 37% +3% 2,640 1,978 2,099 2,028 381 Total
Slide 21: Credit risk profile better than pre COVID-19 levels
Credit risk profile better than pre COVID-19 levels 5 Interbank - Cost of risk Interbank - Non-performing exposure NPL FY19: 2.2% 196.5% 169.2% coverage FY19: 8.9% FY19: 2.9% ratio 4.5% 7.1% 15.1% 8.8% 9.0% 1.7% 1.1% 1.5% 3.4% 3.2% 3.0% 3Q20 2Q21 3Q21 9M20 9M21 3Q20 2Q21 3Q21 (S2+S3) ratio NPL ratio
Slide 22: Recovery in expenses driven by banking activity and digital investments
Recovery in expenses driven by banking activity and digital investments, IFS’ efficiency at 32% 6 Efficiency ratio Interbank – Other expenses bridge from 9M20 to 9M21 % YoY growth by line (S/ million) +17.8% +8.0% +75.8% +9.3% +15.4% +63 +36 45.6% +40 +34 42.9% 38.2% 32.3% 32.0% 21.2% Digital Profit
Slide 23: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 22
Slide 24: Sequential improvement in NIM continues
Banking Sequential improvement in NIM continues Net interest and similar income Loan provision expense S/ million S/ million 4.2% NIM NIM 4.6% 3.9% 4.0% excl. Cost of risk 4.5% 1.7% 1.1% Reactiva NIM after Peru 1.7% 2.8% 3.3% provisions -8.2% -76.3% 463 742 670 681 742 463 178 670 681 110 3Q20 2Q21
Slide 25: Retail loans grew 3.6% QoQ, gaining 10 bps market share
Retail loans grew 3.6% QoQ, gaining 10 bps Banking market share Performing loans Breakdown of loans S/ million S/ million %chg %chg System’s growth(1) 3Q20 2Q21 3Q21 QoQ YoY Consumer loans -0.6% Credit cards & other loans 6,824.1 5,992.0 6,577.6 9.8% -3.6% Payroll deduction loans(2) 4,292.5 4,534.9
Slide 26: 15.2% market share in retail deposits
Banking 15.2% market share in retail deposits Funding structure Funding breakdown S/ million S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY LDR(2) 99.0% 92.6% 90.2% Deposits 42,538.2 45,209.3 46,565.6 3.0% 9.5% Retail 19,561.2 20,967.0 23,290.7 11.1% 19.1% System’s 100.3% 100.4% 100.2% Commercial(1) 22
Slide 27: Gross premiums plus collections increased 16.9% QoQ and 89.8% YoY
Gross premiums plus collections increased 16.9% Insurance QoQ and 89.8% YoY Gross premiums plus collections – Quarterly evolution Gross premiums plus collections – Monthly evolution S/ million S/ million Annuities market 27.5% 31.2% 29.3% share(1) +89.8% >3x 327 117 280 65 22 55 17 49 70 43 172 23 7
Slide 28: S/ 12.9 billion investment portfolio with ROIP of 6.7% in 3Q21
S/ 12.9 billion investment portfolio with Insurance ROIP of 6.7% in 3Q21 Investment portfolio Results from investments(1) S/ million S/ million ROIP(2) 6.3% 7.7% 6.7% -2.2% Impact on investments: 13,163 13,128 3Q20: S/ +9 mm 12,871 +7.4% 254 2Q21: S/ +12 mm 3Q21: S/ -8 mm 1,045 1,227 1,242 218 1,205
Slide 29: Other income boosted by M2M on investments
Wealth Other income boosted by M2M on investments Management Net interest and similar income Fees from financial services S/ million S/ million Fees / Avg. 0.8% 0.9% 0.9% AUM(1) +4.1% +25.9% 30 49 50 25 26 40 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Other income Revenues S/ million S/ million +95.0% +59.0% 147
Slide 30: AUM & deposits grew 4.2% QoQ and 22.8% YoY
Wealth AUM & deposits grew 4.2% QoQ and 22.8% YoY Management AUM & deposits Loans S/ million S/ million +22.8% +7.9% 27,153 28,304 1,719 1,753 1,624 23,045 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Other expenses Net profit(1) S/ million S/ million ROAE 53.5% 30.4% 56.7% Positive impact on +34.7% +66.2% investm
Slide 31: Agenda
Agenda Financial Key highlights messages Results Trends and by segment takeaways 30
Slide 32: Operating trends 9M21
Operating trends 9M21 Capital Profitability Loan growth 2021 9M21 2021 9M21 Slow recovery in retail, IBK TCR >15% 16.3% Old New and decreasing volumes in commercial IFS ROAE >14% >18% 22.1% IBK CET1 >11% 12.0% Growth YTD To remain at sound levels Above guidance Retail +8.1% / Commercial -4.0%(1) Rev
Slide 33: Takeaways
Takeaways 1 2 3 GDP growth Solid capitalization and Core indicators above decelerating strong liquidity pre COVID-19 levels 4 5 6 Growing customer base Credit risk profile better Continued focus thanks to digital than pre COVID-19 levels on efficiency adoption 32
Slide 34: Appendix
Cd Intercorp Financial Services Appendix
Slide 35: Relevant net income of S/ 1,214 million in 9M21
Relevant net income of S/ 1,214 million in 9M21 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 5.6% 15.9% 15.1% 20.5% 14.5% 39.5% 733 237 360 168 360 253 89 (1) 111 (1) 121 89 9M20 9M21
Slide 36: IFS 3Q21 statement of financial position
IFS 3Q21 statement of financial position Intercorp Financial Services' Statement of financial position S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Assets Cash and due from banks and inter-bank 17,573.1 19,410.4 20,330.7 4.7% 15.7% funds Financial investments 22,787.9 24,278.1 24,154.7 -0.5% 6.0% Loa
Slide 37: IFS 3Q21 P&L
IFS 3Q21 P&L Intercorp Financial Services' P&L statement S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Interest and similar income 1,186.1 1,112.3 1,170.5 5.2% -1.3% Interest and similar expenses -279.4 -244.9 -270.5 10.5% -3.2% Net interest and similar income 906.6 867.5 900.0 3.7% -0.7% Impairment l
Slide 38: Banking segment's 3Q21 statement of financial position
Banking segment’s 3Q21 statement of financial position Banking Segment' Statement of financial position S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Assets Cash and due from banks and inter-bank 16,338.4 16,686.2 17,433.8 4.5% 6.7% funds Financial investments 8,470.4 9,733.9 9,337.6 -4.1% 10.2% Loans
Slide 39: Banking segment's 3Q21 P&L
Banking segment’s 3Q21 P&L Banking Segment's P&L statement S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Interest and similar income 987.0 881.3 907.0 2.9% -8.1% Interest and similar expenses -244.8 -211.2 -225.9 6.9% -7.7% Net interest and similar income 742.1 670.1 681.1 1.6% -8.2% Impairment loss o
Slide 40: 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 (3Q21) S/ million S/ million >2x Reclassification 299 of fees on loans, 274 from interest income to fee income 147 274 299 147 +30 +4 3Q20 2Q21 3Q21 374 +45 299 Net profit – Local GAAP -154 S
Slide 41: Manageable dollarization levels at Interbank
Manageable dollarization levels at Interbank Total loans Retail loans Commercial loans % PEN 68% 73% 85% 91% 58% 65% System 10% 6% 27% 23% 48% 39% 91% 94% 73% 77% 53% 61% 3Q16 3Q21 3Q16 3Q21 3Q16 3Q21 Retail loans breakdown Commercial loans breakdown Consumer Mortgages Corporate Medium Small & Micro
Slide 42: Manageable dollarization at Interbank
Manageable dollarization at Interbank Gross Loans by segment & percentage in S/ Currency mix Sep21 93% 94% 94% 94% 94% 94% 94% 94% Gross Loans Total Assets 78% 77% 77% 77% 77% USD 74% 76% USD 73% 30% 23% 64% 63% 62% 60% 61% 61% 51% 49% S/ S/ 77% 2018 2019 2020 Mar21 Apr21 May21 Jun21 Sep21 70% Total
Slide 43: Continued improvement in payment behavior among Interbank's retail clients
Continued improvement in payment behavior among Interbank’s retail clients Retail loan balances with payments due Payment behavior S/ billion % of retail loans with 99.4% 99.8% payments due Payments of rescheduled loans 18.7 17.9 Collected Requested relief Not paid 5.1 5.4 (38%) (27%) 97.1% 97.9% 0.
Slide 44: Capitalization remains at comfortable levels, substantially above minimum requirement
Capitalization remains at comfortable levels, substantially above minimum requirement Tier I Tier II CET1 Banking system 15.6% 15.5% 16.3% 15.4% 15.1% Total Capital 17.0% 17.0% 16.9% Ratio 16.5% 16.3% 5.5% 5.5% 5.3% 5.3% • Interbank’s capital ratio of 16.3%, above 5.4% regulatory risk-adjusted minim
Slide 45: Insurance segment's 3Q21 statement of financial position
Insurance segment’s 3Q21 statement of financial position Insurance Segment' Statement of financial position S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Assets Cash and due from banks and inter-bank 447.6 555.8 907.1 63.2% n.m. funds Financial investments 12,118.7 11,901.6 11,629.3 -2.3% -4.0% Proper
Slide 46: Insurance segment's 3Q21 P&L
Insurance segment’s 3Q21 P&L Insurance Segment's P&L statement S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Interest and similar income 160.5 190.3 224.8 18.1% 40.0% Interest and similar expenses -20.7 -22.6 -31.8 40.6% 53.5% Net interest and similar income 139.8 167.7 193.0 15.1% 38.0% Recovery (los
Slide 47: Higher adjustment of technical reserves in 3Q21
Higher adjustment of technical reserves in 3Q21 Net premiums Adjustment of technical reserves S/ million S/ million 255 10 225 63 53 140 47 41 -46 54 35 130 144 -109 50 3Q20 2Q21 3Q21 3Q20 2Q21 3Q21 Annuities Individual life Retail Insurance D&S Net claims and benefits incurred Net insurance underwr
Slide 48: 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 (3Q21) S/ million S/ million -79.8% 109 67 4 108.9 13 66.5 13 29 13.4 105 3Q20 2Q21 3Q21 69 2 19 Net profit – Local GAAP 28 13 S/ million Net profit Net Recurrent Net gain on Other Impairme
Slide 49: Wealth management segment's 3Q21 statement of financial position
Wealth management segment’s 3Q21 statement of financial position Wealth Management Segment' Statement of financial position S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Assets Cash and due from banks and inter-bank 854.8 2,212.2 2,048.5 -7.4% n.m. funds Financial investments 1,725.1 2,016.8 2,474.3 2
Slide 50: Wealth management segment's 3Q21 P&L
Wealth management segment’s 3Q21 P&L Wealth Management's P&L statement S/ million %chg %chg 3Q20 2Q21 3Q21 QoQ YoY Interest and similar income 37.9 39.3 36.7 -6.5% -3.2% Interest and similar expenses -12.8 -9.5 -10.6 11.3% -17.4% Net interest and similar income 25.1 29.7 26.1 -12.3% 4.1% Impairment
Slide 51: 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 52: 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 — Q3 2021 Earnings Presentation on 6ix