Full Year 2013 & Q4 13

Transcription

1 Financial Results December 31, 2013 Full Year 2013 & Q4 13

2 AGENDA: Full year 2013 and 4Q13 Banco de Chile at the top of the industry 1. Economic Environment 2. Banking Industry 3. Financial Results and Risk Analysis 4. Peer Analysis 5. Secondary Offering by LQIF 2

3 Stable Macroeconomic Environment in Chile Positive and Stable Performance Gross Domestic Product Real Annual Growth, % -1,0% 5,8% 5,9% 5,6% 4,0% 1 Average Unemployment % 10,8% 8,2% 7,1% 6,4% 5,9% E Investment Investment 5 / Real GDP, % 21,9% 23,3% 25,2% 26,8% 26,8% 2 Inflation 12 Month Variation, % -1,4% 3,0% 4,4% 1,5% 3,0% E Source: Banco de Chile estimate. 2.- Source: Central Bank of Chile. 3.- Source: INE; Average unemployment over 11 months ending in November Source: Central Bank of Chile. Actual 2013 Inflation. 5.- Gross fixed capital formation. 3 3

4 Stable Macroeconomic Environment in Chile Low Risk and Attractive Business Environment Country Real GDP Growth 2013E 1 (%) GDP per Capita 1 (US$ thousands) Inflation 2013E 1 (%) Public Debt Rating2 % of GDP 1 and Spread 3 Economic Freedom Index (Rank) 4 Doing Business Index (Rank) 5 4.0% % % AA- 80 #7 #34 1.2% % 37.5% BBB+ 97 #50 #53 2.5% % 59.1% BBB 192 #100 # % % 39.7% BBB 123 #37 #43 5.1% % 15.3% BBB+ 134 #44 # Source: The Economist Inteligence Unit as of December 20, S&P Rating based on foreign currency debt. Source Bloomberg as of January 10, Source: Factset CDS 5 year spread as of January 10, Source: Heritage Foundation. 5.- Source: World Bank. 6.- Source: Banco de Chile estimates. 7.-Source: Central Bank of Chile. Actual 2013 inflation. 4 4

5 Attractive Financial System in Chile Substantial Growth Potential Assets in the Chilean Financial System Banking System Loan Penetration % of GDP 1 % of GDP 235% Total Loans Assets Under Management Bank Loans Penetration (%) 171% 202% Consumer Mortgage 82% 11% 20% 60% 17% 28% 35% 56% 82% 122% 130% 114% Commercial 51% 15% 18% GDP per Capita (US$ Thousands) Banks Pension Funds Mutual Funds Insurance Source: Banco Central, SBIF, SAFP, AAFM, and SVS. 1.- Nominal LTM figures as of September Source: The Economist Intelligence Unit as of December 20, 2013, central banks and regulators. 2.- Source: Central Bank of Chile and SBIF. 5 5

6 Banking System Upwards trend in net income due to loan volumes growth Highlights Total loans expanded 10% YoY in 2013, in line with the deceleration of the economy. Commercial, mortgage and consumer loans grew 9%, 11% and 14%, respectively. On a QoQ basis, loan increase was above the average of previous quarters, steered by consumer (+7.4%) mortgage loans (+3.3%), and commercial loans (+2.0%). As of Dec-13, net income grew 18% due to a solid trend in operating income boosted by a stable and profitable expansion in loan volumes. ROAE rose 30 basis points over last year, reaching 15.2% in Total Loan Growth (% in nominal terms) 12,4% 11,2% 10,1% 10,8% 10,3% 3,6% 3,2% 1,5% 2,1% 3,0% Source: SBIF 4Q12 1Q13 2Q13 3Q13 4Q13 QoQ YoY Accumulated Net Income & ROAE ($Bn. and %) % ,9% 15,2% Note: Loan figures exclude foreign subsidiaries. UF % Var.: Dic-12 Net Income Dic-13 ROAE 2.5% 2.1% 6

7 Banco de Chile Quarterly and Full Year 2013 Financial Results (In billions of CLP, except percentages) 1Q 13 2Q 13 3Q 13 4Q 13 % 4Q Full Year 2013 Operating Income % % Provision Expenses (49.8) (53.9) (70.1) (67.8) 34.0% (241.6) 28.4% Operating Expenses (149.2) (150.5) (154.0) (169.2) 9.2% (622.9) 1.8% Income before taxes (3.2%) % Income Taxes (18.9) (19.2) (18.6) (23.3) 7.6% (79.9) 47.0% % YoY Effective Tax Rate 13.5% 13.6% 11.9% 14.9% n/a 13.5% n/a Net Income (4.9%) % 7

8 Operating Income Excellent growth in both customer and non-customer revenue Quarterly Operating Income (In billions of CLP) Annual Operating Income (In billions of CLP) % y/y % y/y 4Q12 1Q13 2Q13 3Q13 4Q13 Customer income QoQ 4Q12 1Q13 2Q13 3Q13 4Q13 UF 1.11% 0.13% -0.07% 1.04% 0.95% CLP/USD *Includes income from the contribution UF GAP position and treasury activities Non-customer income* YoY UF 2.45% 2.05% CLP/USD

9 Net Fees A universal bank with an effective strategy of revenue diversification Net Fees Market Share (%, as of December 2013 ) Net Fees by Segment (% of total fees) 22,2% 17,8% 15,1% 9,1% 50% 36% Retail Subsidiaries 3,9% 14% Wholesale + Treasury Santander BCI BBVA Corpbanca 9

10 Loans Double digit YoY growth in retail and wholesale loans Loans by Product (In trillions of CLP) ,1 5,2 +11% % ,2 3,9 6,0 6,4 2,5 2,7 2,7 4,2 4,6 4,7 2,1 2,2 2,3 0,8 0,8 0,8 YoY +12% +11% Market Share by Product* (December 2013, %) 20,9% 17,4% 19,5% 19,1% 4Q12 3Q13 4Q13 Corporate Banking Large Companies SME Loans Mortgage Consumer - Traditional Individuals + SMEs Consumer - Credichile Lg Companies + Coporates Note: Prior to 3Q13, factoring subsidiary loans have been distributed across divisions *System figures do not include loans from foreign subsidiaries 10

11 Solid Funding Structure Low cost funding due to leadership in demand deposits and high credit rating Liability Structure % Over Total Assets, as of December 2013 Equity 8,8% Debt Issued 16,8% Financial Institutions 3,8% Other 7,3% Current Accounts and Demand Deposits 23,1% Saving Accounts and Time Deposits 40,1% Wholesale 62,4% Wholesale 53,7% Retail 37,6% Retail 46,3% Demand Deposits Market Share 1 %, as of December ,1% 20,7% Cost of Funding 2 Rate, December ,5% 3,4% 3,5% 3,7% 4,6% 3,5% Santander BCI BBVA Corpbanca 4,2% 4,8% BCI Santander Corpbanca BBVA Source: SBIF. Information in Chilean GAAP, as of November 30, Source: SBIF. Information in Chilean GAAP, as of November 30, Excludes subsidiaries outside Chile. 2.- Cost of funding is defined as the quotient between interest paid and the sum of interest bearing liabilities and non interest bearing deposits, excluding derivatives months annualized ratios ending in November 30,

12 Loan Loss Provisions LLP increase was largely due to factors other than deterioration Quarterly Loan Loss Provisions (In billions of CLP) +34% Q12 1Q13 2Q13 3Q13 4Q13 Annual Loan Loss Provisions (In billions of CLP) +28% FX Countercyclical Provisions Retail Wholesale 12

13 Superior Asset Quality Effective risk models and prudent policies Delinquency Ratio %, Past Due Loans / Total Loans (December 2013) 2,91% Loan Loss Provisions Ratio Provisions for Loan Losses/ Average Loans (2013) Coverage Ratio Allowances for Loan Losses / Past-Due Loans, times (December 2013) 2.5 1,11% 2,38% 1,49% 1,21% 1,23% 1,84% 1,17% 1,08% 0,89% ,0 1,0 1,0 1,1 1,9 (1) Excludes CorpBanca Colombia (2) Counter cyclical provisions 13

14 Operating Expenses Outstanding efficiency of 42.8% for the year Operating Expenses (In billions of CLP) +9% Operating Expenses (In billions of CLP) +2% % y/y Q12 1Q13 2Q13 3Q13 4Q13 Efficiency Ratio (%) 42.1% 44.0% 43.7% 40.6% 43.0% UF YoY 46.3% 42.8% +4% y/y Personnel Admin., Dep & Impairments Other 14

15 Banco de Chile Quarterly and Yearly Financial Results Quarterly Net Income (In billions of CLP) Annual Net Income (In billions of CLP) % 514 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

16 Proven Value Creation Capabilities Distinguishing Itself in the Local Market Highest Profitability in the Local Industry ROAE 1 December 2013, Chile GAAP 21,3% 19,4% 19,3% Based on Superior Risk Management and Efficiency Operating Margin % Over Average Interest Earning Assets, December ,4% 6,2% 6,4% 5,3% 3,8% 11,3% 7,7% Loan Loss Provisions Ratio BCI Santander CorpBanca BBVA %, Provisions for Loan Losses / Average Loans, December ,8% 1,2% 1,2% 0,9% 1,1% BCI Santander CorpBanca BBVA ROAA: BCI Santander CorpBanca BBVA 2.1% 1.6% % 0.5% Efficiency Ratio Operating Expenses / Operating Revenues, December ,8% 48,2% 43,0% 52,9% 58,4% BCI Santander CorpBanca BBVA 1.- Excludes provisions for minimum dividends 16

17 Proven Value Creation Capabilities Consistent Track Record of Profitability Return On Average Equity (ROAE) 1 %, Times over Peers Return On Average Assets (ROAA) %, Times over Peers Banco de Chile s Multiple over Peers 0.8x 1.1x 1.2x 1.4x 1.3x 0.9x 1.2x 1.3x 1.5x 1.5x 21,4% 17,5% 22,2% 20,5% 24,8% 24,0% 23,2% 21,3% 16,8% 16,1% 1,6% 1,5% 2,2% 2,1% 2,1% 2,1% 1,8% 1,6% 1,4% 1,4% Local Peers 2 Source: SBIF. 1. Excludes provision for minimum dividends 2.- BCI, BBVA, CorpBanca and Santander 17 17

18 Successful Secondary Offering of BCH Shares by LQIF Increasing our Free Float and Traded Volumes Free Float Evolution Simplified Ownership Structure Pre Capital Increase ,1% 50.0% 50.0% Pre Capital Increase ,7% LQIF s Direct and Indirect Stake in Banco de Chile Pre Transaction 1 : 58.4% Current 17,6% Pre 1 : 32.7% Post 2 : 25.6% 58.2% SM-Chile 100% Post Transaction 2 : 51.2% Pro Forma Post Transaction 2 24,8% Pre 1 : 17.6% Post 2 : 24.8% Free Float 13.0% 30.7% SAOS Ergas Group 5.9% Free Float Source: Banco de Chile. 1.- Simplification of current situation. 2.- Pro forma post transaction, considers the sale on behalf of LQIF of 6,700,000,000 common stock of Banco de Chile. 18

19 Forward-looking Information The information contained herein incorporates by reference statements which constitute forward-looking statements, in that they include statements regarding the intent, belief or current expectations of our directors and officers with respect to our future operating performance. Such statements include any forecasts, projections and descriptions of anticipated cost savings or other synergies. You should be aware that any such forward-looking statements are not guarantees of future performance and may involve risks and uncertainties, and that actual results may differ from those set forth in the forward-looking statements as a result of various factors (including, without limitations, the actions of competitors, future global economic conditions, market conditions, foreign exchange rates, and operating and financial risks related to managing growth and integrating acquired businesses), many of which are beyond our control. The occurrence of any such factors not currently expected by us would significantly alter the results set forth in these statements. Factors that could cause actual results to differ materially and adversely include, but are not limited to: changes in general economic, business or political or other conditions in Chile or changes in general economic or business conditions in Latin America; changes in capital markets in general that may affect policies or attitudes toward lending to Chile or Chilean companies; unexpected developments in certain existing litigation; increased costs; and unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms. You should not place undue reliance on such statements, which speak only as of the date that they were made. Our independent public accountants have not examined or compiled the forward-looking statements and, accordingly, do not provide any assurance with respect to such statements. These cautionary statements should be considered in connection with any written or oral forward-looking statements that we may issue in the future. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events. 19