conference call 1q 2020 earnings review...-pierre morgon-dr. daniel apolo-brian chase 13,776 total...
TRANSCRIPT
1
Conference call
1Q 2020 Earnings review
Gabriel MouraChief Executive Officer
Claudia LabbéHead of Investor Relations
May 4th, 2020
2
COVID-19 Update
3
Macro
3
Projections
GDP (%)
-1.9
4.6
-3.0
4.6
-5.0
4.4
2017 2018 2019 2020 2021 2022 2023
3.0 2.9
4.5
3.6
6.0
4.5
2017 2018 2019 2020 2021 2022 2023
CPI (%)
Monetary Policy (%)
0.501.00
0.50
0.00 0.00
2017 2018 2019 2020 2021 2022 2023
FX
830800
880860
950920
2017 2018 2019 2020 2021 2022 2023
Base Slow V U
4
Macro
4
Projections
Minimum Medium Maximum
GDP (%) CPI (%)
Monetary Policy (%) FX
5
Channels
5
Branch Network
63% 121 branches open
65 in the Metropolitan Area56 in the rest of country
30%57 branches open
24 in the Metropolitan Area33 in the rest of country
95% 182 branches open
104 in the Metropolitan Area78 in the rest of country
100% presence since the beginning of the crisis
March 1
April 15
May 4
% Network
6
Digital channels
6
Client access
Wide rangeof services and productsto meet the needs of our clients in this period
41% Number of login to web & app(Mar-20 vs. Mar-19)
Availability of our digital channels
99.5%
(Mar-20)
Co
mp
anie
sIn
div
idu
als
57% Number of login to web & app(Mar-20 vs. Mar-19)
Access to digital have increased significantly; despite this trend, availability of digital channels is at highest level ever
7
Clients
7
Digital channels | Client transactions
March 2020
150
February 2020
100
Transfers and Payments
Co
mp
anie
sIn
div
idu
als
March 2020
136
February 2020
100
Time Deposits
March 2020
130
February 2020
100
Increase in Credit Lines$, Credit Card
March 2020
139
February 2020
100
Transfers and Payments
March 2020
158
February 2020
100
Time Deposits
March 2020
187
February 2020
100
Loans
Use of digital channels gets more significant with end-to-end transactions, gaining relevance for Individuals and Companies
8
Clients
8
Digital Communication
1
2
Launch of “Visión de Líderes" Communication
Launch of the “Vision of leaders“- Live streaming with the leaders of the most important sectors of the economy
We have held 15 sessions:- Andrés Velasco- José de Gregorio- André Ferraz- Ricardo Marino- Raphael Bergoeing- Pierre Morgon- Dr. Daniel Apolo- Brian Chase
13,776 Total Views
9
People
9
Home office
1,259
2,3092,459
01-mar 16-mar 31-mar 15-abr 30-abr
VPNsVDIsLaptops
All employees with access to videoconferences
through Teams
Deploying Office 365 cloud solutions
Capacity for 10,000 remote accesses through VPN
0
413
700
01-mar 16-mar 31-mar 15-abr 30-abr1-Mar 15-Mar 23-Apr
+1,200
200
2,070
2,420
01-mar 16-mar 31-mar 15-abr 30-abr
1-Mar 15-Mar 23-Apr 1-Mar 15-Mar 23-Apr
+700 +2,220
Infrastructure capable of supporting our operations in a remote environment ensuring business continuity1,684
Employees in home office
10
Government Actions
10
Latest Initiatives
CMF Ministry of FinanceCentral Bank of Chile
Bank financing facility (FCIC) conditional to banks loan growth
FCIC for 6 months, up to 4-year tenor, initial amount up to 3% of the commercial and consumer
portfolios of banks, at a preferential interest rate
Basel III roll-in process that would start in December 2020 was
postponed for 1 year
The Council of the CMF has postponed the commencement date for the implementation of
Basel III regulations
Working capital lines for companies with net sales up to UF
1 million according to the credit risk policies of each institution,
for a maximum amount of up to 3 months of average sales and 75% guaranteed by the government
11 Initiatives targeting provisions and capital
7 Initiatives for liquidity injection to the economy
COVID-19 credit lines
11
Government Actions
11
COVID-19 Line | First Tender Results
Tramo
1 201 215 135 52 49 49 711
2 100 215 43 46 43 126 588
3 63 215 126 29 77 215 754
4 29 215 29 29 23 77 422
Total 393 861 333 155 192 468 2.476
65%
35%
Unmet Demand Demand Met
Itaú Demand
US$ 547 million
Total Demand
US$ 2.9 billion
Total Demand Met
US$ 1.0 billion
Itaú Demand Met
US$ 189 million
To
tal S
yst
em
D
em
an
d
Demand by bank and by tranche (US$ mn)
2,476
Tranche
235
74
34
117
460
252
252
252
252
1,007
158
148
34
50
390
61
34
34
54
183
57
90
27
50
225
57
252
90
148
547
833
883
494
689
2,899
12
Clients
12
Credit deferral campaign
Deferral of next three installments of non
overdue contracts, with a preferential rate through
a new loan with 60 installments and the first
payment in 6 months
Consumer and Commercial Loans
Credit CardsMortgage Loans
Deferral of next three installments of non
overdue contracts, with a preferential rate
Our clients, with non overdue contracts, can choose zero minimum
payment in April
|
20-25%20-25%48%% Client
acceptance
35%% Client
acceptanceClient acceptance rate
13
Clients
13
We want to be part of the solution
Itaú Corpbanca joins the Emergency Private Fund for Health in Chile with a
contribution to the “Confederación de la
Producción y del Comercio” to collaborate with the country in this fight against COVID-19
Itaú Corpbanca tripled the
value of donations made by
employees, totaling
US$ 810,000
Itaú Corpbanca
supported Chilean
female entrepreneurs
with US$ 41,000 to make
masks for staff working
with vulnerable childrenClients
US$ 570,000
Employees
US$ 60,000
Bank
US$ 180,000
US$ 1.9 million
World Giving Index (%)
28%
35%
37%
0% 20% 40% 60%
14
About the 1st quarter of 2020
15
1Q20
higher volume of credit inChile (+12.2%) and better weighted average spread
offset the increase of the growth in the average portfolio, margin with
clients in Chile
Cost of credit increased in Chile
52.1%
Non-interest expenses in Chile decreased
1.9% mainly driven by corporate credit events and regulatory and internal credit risk models implementation
58.6%Efficiency ratio
improved by 70 b.p.15
About our quarter
Recurring
Net
4.3%
Ch$33.8 billion
Ch$29.5 billion
Consolidated
Chile
1.1%
1.0%
10 b.p.Consolidated
Chile 1.1 p.p.
6.8 %
8.4 %Income
Recurring
Return onTangible
(yoy)
(yoy)
(yoy)
Equity (RoTE)
16
Convergencein 2019
1Q20 Loan growth
1 – Ex Student loans portfolio
Mortgage
Financial SystemItaú Corpbanca
12.2%
12.8%
Total Loans
13.4%16.2%
Convergencein 2019
14.6%
12.3%
1.2x market 4.9%
2.5%
2.0x market
Consumer
Commercial1
17
Financial margin with clients1Q20
Ch$ billlion
Change in financial margin with clients
Annualized average rateFinancial margin with clients
-8.9%
+4.3%
140.8 146.5 144.0
161.3146.9
1Q'19 2Q'19 3Q'19 4Q'19 1Q'20
3.0%2.9% 2.8%
3.3%
3.0% 3.0%
2.8%3.0%
2.6%
2.5% 2.5% 2.5%
2.7% 2.9% 2.9%
2.4%
1.8%
1.6%
1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 3Q'19 4Q'19 1Q'20
Financial margin with clients Average TPM
161.3 146.9(2.1)
1.9
(1.0) (1.8) (10.5) (1.0)
4Q'19 Loan Portfolio Mix Average Loan Portfolio,Loan Spreads andLiabilities Margin
Lower number ofcalendar days
Comercial spreads onderivatives and FX
transactions with clients
Sale of student loansportfolio
Working Capital andother
1Q'20
18
Financial margin with the market1Q20
Quarterly evolution breakdown
In Ch$ billion
1 – UF (Unidad de Fomento) is an official unit of account in Chile that is constantly adjusted for inflation and widely used in Chile for pricing several loans and contracts.
UF 1 net exposure (Ch$ trillion)
UF – Unidad de Fomento1 (∆ value)
1.9 2.02.2
1.9
2.7
mar-19 jun-19 sep-19 dec-19 mar-20
0.0%
1.2%
0.5%
0.9%1.0%
1Q'19 2Q'19 3Q'19 4Q'19 1Q'20
21.1
49.1
3.3
20.8
7.3
-53.5
7.7
3Q'19 Trading
Institutional
Banking 4Q'19 Trading
Institutional
Banking 1Q'20
19
Non Performing Loans (90+ days - %) and NPL Creation (Ch$ billion)
Commercial (ex-students loans) Mortgage Consumer
Coverage ratio (90-day NPL - %)Cost of creditIn Ch$ billion
Cost of credit and credit quality1Q20
Cost of Credit Risk Cost of Credit Risk / Average Loans
36.6 41.9 40.9
110.1
55.6
1Q'19 2Q'19 3Q'19 4Q'19 1Q'20
0.9% 1.0% 0.9%
2.4%
1.2%
36.6 55.6
3M19 3M20
0.9%1.2% 126% 129% 132%
113% 115%
2.4% 2.4% 2.4% 2.8%2.9%
70%
80%
90%
100%
110%
120%
130%
mar-19 jun-19 sep-19 dec-19 mar-20
NPL90 Coverage Provisions / Loans
1.4% 1.5% 1.4% 1.4%
2.3% 2.3%
dec-18 mar-19 jun-19 sep-19 dec-19 mar-20
0 24
6 30
121
32 3 3
-1
1 9 4
1.7% 1.8% 1.7% 1.6% 1.7% 1.6%
dec-18 mar-19 jun-19 sep-19 dec-19 mar-20
1.7%2.0%
1.7%2.0%
2.2%2.5%
dec-18 mar-19 jun-19 sep-19 dec-19 mar-20
23 29
21 31 35 37
20
como foi nosso ano?1Q20 Non-interest expenses
Efficiency ratioquarterly (%)
In Ch$ billion
Total
(52.2)
(54.8)
(107.0)
(9.9)
1Q20 4Q19
(47.8)
(51.3)
(99.1)
(10.0)
Personnel
Administrative
Total Personnel and Administrative
Depreciation, Amortization and Impairment
(116.9)(109.1)
-8.5%
-6.4%
-7.4%
1.3%
-6.7%
193branches in Chile in 1Q20
5.56 5.60
5.81
Mar-19 Mar-20Mar-18
5.60 thousandemployees
in 1Q20
59.3
53.1 55.0
46.7
58.6
1Q'19 2Q'19 3Q'19 4Q'19 1Q'20
branch closed in Chile YoY
9 ( 4.5%)
21
Capital structure1Q20
CET 1
New LGB(Dec. 2025)
SIFI (est.)
CCB
AT1
Total Capital
Tier II
CET 1
Tier I
4.1%
4.5%
11.5%
1.5%
1.0%
2.5%
8.0%
9.5%
2.0%3.5%
9.6%
-0.7%
Max use of Tier IITier II
Tier I
8.3% -1.8%
-0.2% 6.4%
Regulatory CapitalRatio (March. 20)
Other Intangible Assets /Net Deferred Taxes
Net effectof changes in RWA
Estimated Fully LoadedBIS III Capital
12.2%
Regulatory Capital Ratio (Mar. 2020)
3.9%3.2%
221 – LCR: Liquidity Coverage Ratio calculated according to BIS III rules. Regulatory LCR ratios are still under construction in Chile. 2 – NSFR: Net Stable Funding Ratio, the methodology used to estimate NSFR consist of liquidity ratio proposed by the “Basel III Committee on Banking Supervision” (“BIS III”) that was adopted by the CMF and the Brazilian Central Bank (BACEN) and only the BACEN set a limit for NSFR.
Source: Quarterly liquidity status report as of April 28, 2020.
Liquidity1Q20
LCR1 NSFR2
Total Deposits
10.4 10.6 11.6
12.5 14.1
mar.19 jun.19 sep.19 dec.19 mar.20
125.4%
80.0%
90.0%
100.0%
110.0%
120.0%
130.0%
140.0%
Mar.19 Jun.19 Sep.19 Dec.19 Mar.20 Apr.20
LCR Chile + NY Internal LCR limit
100 %
95.4%
82.0%
84.0%
86.0%
88.0%
90.0%
92.0%
94.0%
96.0%
98.0%
Mar.19 Jun.19 Sep.19 Dec.19 Mar.20 Apr.20
NSFR Chile + NY Internal NSFR limit
90 %
13.2%
+36.2%
85 %
23
3.31 thousandemployees
in 1Q20
Highlights1Q20
-30.7 bn
-4.9%
20.2 tn
27.9 tn
1Q20 4Q19
24.3 bn
3.8%
20.7 tn
30.8 tn
Net Income
RoTE
Loan Portfolio
Total Assets
(443.1)(451.5)
n.a.
+8.7 p.p.
+2.5%
+10.4%
1.9%3.49
3.31
3.56
Mar-19 Mar-20Mar-18
About 1Q 2020
128branches in Colombia in 1Q20
Loan Portfolio and RoTE Evolution
In COP
-31.9-17.0
62.0
24.3
1Q17 1Q18 1Q19 1Q20
In billion COP
Recurrent Net Income Evolution
In billion COPRoTE
Loans
branches closed in Colombia YoY
33 ( 20.5%)
24
About 2020
25
Guidance under review2020
Expected
Loan Growth
Loan Mix 1
Cost of credit Risk 2
Adjusted Non-Interest Expenses 3
Results from Colombia 4
6.0%4.0%
Continued increasing retail in loan mix
1.2%1.0%
Continued recovery in profitability
1 – Retail loans refers to mortgage and consumer loan; 2 – Net provision for credit & counterparty risks; 3 – Net of labor agreement costs; 4 – Managerial Net Income Attributable to Shareholders.
4.5%3.5%
26
Build the bankof the future
Execute ourtransition plan
Prepare the bank for the crisis
XXX
COVID -19
27
Resultados
• This presentation is not an offer for sale of securities. This material has been prepared solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities and should not be treated as giving investment advice. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed in this material are subject to change without notice and neither Itaú Corpbanca (the “Bank”) nor any other person is under obligation to update or keep current the information contained herein. The information contained herein does not purport to be complete and is subject to qualifications and assumptions, and neither the Bank nor any agent can give any representations as to the accuracy thereof. The Bank and its respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material
• Certain statements in this presentation may be considered forward-looking statements. Forward-looking information is often, but not always, identified by the use of words such as “anticipate,” “believe,” “expect,” “plan,” “intend,” “forecast,” “target,” “project,” “may,” “will,” “should,” “could,” “estimate,” “predict” or similar words suggesting future outcomes or language suggesting an outlook. These forward-looking statements include, but are not limited to, statements regarding expected benefits and synergies from the merger of Banco Itaú Chile with and into Corpbanca, the integration process of both banks, anticipated future financial and operating performance and results, including estimates for growth, as well as risks and benefits of changes in the laws of the countries we operate
• These statements are based on the current expectations of the Bank’s management. There are risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. For example, (1) problems that may arise in successfully integrating the businesses of Banco Itaú Chile and Corpbanca, which may result in the combined company not operating as effectively and efficiently as expected; (2) the combined company may be unable to achieve cost-cutting synergies or it may take longer than expected to achieve those synergies; (3) the credit ratings of the combined company or its subsidiaries may be different from what the Bank or its controlling shareholders expect; (4) the industry may be subject to future regulatory or legislative actions that could adversely affect the Bank; and (5) the Bank may be adversely affected by other economic, business, and/or competitive factors
• Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to the Bank’s management. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved
• We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. More information on potential factors that could affect Itaú Corpbanca’s financial results is included from time to time in the “Risk Factors” section of Itaú Corpbanca’s Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the U.S. Securities and Exchange Commission (the “SEC”). Furthermore, any forward-looking statement contained in this presentation speaks only as of the date hereof and Itaú Corpbanca does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement
• This presentation may not be reproduced in any manner whatsoever. Any reproduction of this document in whole or in part is unauthorized. Failure to comply with this directive may result in a violation of the U.S. Securities Act of 1933, as amended, or the applicable laws of other jurisdiction
• The information contained herein should not be relied upon by any person. Furthermore, you should consult with own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this material
• The Bank is an issuer in Chile of securities registered and regulated by the Financial Market Commission, or “CMF”. Shares of our common stock are traded on the Bolsa de Comercio de Santiago—Bolsa de Valores, or the Santiago Stock Exchange and the Bolsa Electrónica de Chile— Bolsa de Valores, or Electronic Stock Exchange, which we jointly refer to as the “Chilean Stock Exchanges,” under the symbol “ITAUCORP.” The Bank’s American Depositary Shares are traded on the New York Stock Exchange under the symbol “ITCB.” Accordingly, we are currently required to file quarterly and annual reports in Spanish and issue hechos esenciales o relevantes (notices of essential or material events) to the CMF and provide copies of such reports and notices to the Chilean Stock Exchanges and the SEC. All such reports are available at www.cmf.cl, www.sec.gov and ir.itau.cl.
Disclaimers
28
Conference call
1Q 2020 Earnings review
Gabriel MouraChief Executive Officer
Claudia LabbéHead of Investor Relations
May 4th, 2020