3Q 16 Financial Results Conference Call October 28, 2016

Transcription

1 3Q 16 Financial Results Conference Call October 28, 2016 Rodrigo Aravena Chief Economist, Senior VP Institutional Relations and Public Policy Pablo Mejia Head of Investor Relations Daniel Galarce Head of Financial Control

2 Agenda 1. Overview of the Chilean Economy 2. Strategy & Competitive Advantages 3. Analysis of Results 2

3 Economy Chile s Monthly GDP growth (YoY%) Headline and Core CPI (YoY%) Mining Non Mining Monthly GDP CPI Source: Bloomberg, Central Bank of Chile, INE. CPI ex food & energy Unemployment rate (% Labor Force) Fiscal Spending (YoY%)

4 Economy Global GDP Growth (YoY%) 5,0 4,0 3,0 2,0 1,0 0,0-1,0 Headline CPI (YoY%, end of period) World Adv. Ec. G7 Emerging Ec. LATAM Chile s GDP growth (YoY%) 4,0 1,8 2,1 Monetary Policy Rate (%) 1,6 2, f 2017f 4,7 4,4 4,50 2,8 3,2 3,0 3,00 3,50 3,50 3, f 2017f Source: Bloomberg, Central Bank of Chile f 2017f 4

5 Agenda 1. Overview of the Chilean Economy 2. Strategy & Competitive Advantages 3. Analysis of Results 5

6 BCH Consistent Profitability Track Record Return On Average Equity (ROAE) (%, Times over Peers) Return On Average Assets (ROAA) (%, Times over Peers) Banco de Chile s Multiple over Peers 1.5x 1.4x 1.5x 1.6x 1.6x 1.5x 1.7x 1.8x 23,5% 24,7% 21,4% 20,7% 2,1% 2,2% 1,9% 1,9% 16,0% 18,2% 14,7% 12,9% 1,3% 1,5% 1,1% 1,0% Aug Aug-16 Industry 6

7 BCH Competitive Advantages 1. Brand 2. Scale Top of Mind % of Total Mentions, As of June % 20% 15% 4% 2% Total Loans 1 Market Share, As of Aug ,1% 18,0% 13,0% Ranking 1,2 Product Mkt Share 1 st Commercial 17.6% 2 nd Consumer 21.3% 2 nd Mortgage 17.4% 11,9% Net Fees and Commissions Market Share, As of Aug ,8% 16,8% 16,9% 9,0% Santander BCI Itau Corp Santander BCI ItaúCorp Santander BCI ItaúCorp 3. Funding 4. Risk Management 5. Corporate Governance Cost of Funding %, YTD Aug 2016, Local Currency 3,3% 3,7% 3,8% 4,7% Coverage and NPL Ratio 90d past due / allowances for loan losses & 90d past due / total loans 1,94 2,01 1,95 1,25% 1,22% 1,21% Active Board involvement 11 board members (2 are independent) 5 risk committees, including weekly sessions of Loan Portfolio Committee 6 monthly business committees BCI Santander ItaúCorp Sep-16 Best Practices in pursuant to NYSE and SEC standards NPL Coverage Source: SBIF, Mutual Fund Association. 1.- Excludes subsidiaries outside Chile. 2.- Mortgage loan ranking excludes Banco Estado Estimated proforma

8 BCH Customer Centric Strategy 8

9 Agenda 1. Overview of the Chilean Economy 2. Strategy & Competitive Advantages 3. Analysis of Results 9

10 Banco de Chile - 3Q16 Highlights Banco de Chile Net Income & ROAE (In billions of CLP and ROAE in %) 168 Net income -4% (3Q16/2Q16) +8% (3Q16/3Q15) ROAE $145 bn -133 bps (3Q16/2Q16) -3 bps (3Q16/3Q15) 20.4% % % 26% % 21% % % % Operating Revenues -10% (3Q16/2Q16) -1% (3Q16/3Q15) Net Fees and Commissions +3% (3Q16/2Q16) +7% (3Q16/3Q15) Non-performing loans -8 bps (3Q16/2Q16) -8 bps (3Q16/3Q15) $428 bn $82 bn 1.21% NPL 90d 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 UF (QoQ) 1.9% - 1.5% 1.5% 1.1% 0.7% 0.9% 0.7% Operating Efficiency +293 bps (3Q16/2Q16) +300 bps (3Q16/3Q15) 46.2% 10

11 3Q16 BCH Operating Income Quarterly Operating Income 1 (In billions of CLP) YoY -0,9% -19.5% 6.5% 7.1% Total Loans & Demand Deposits (In trillions of CLP, %) 24,0 23,4 24,5 24,7 0.8% 25,0 7,3 4.1% 4.6% 8,3 7,9 7,9 7,6 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16 Customer Interest income Net Fees Non-customer income Total Loans Loan Spread Evolution (Over Avg. Daily Loans, base 360 days) DDA UF (QoQ) 2,87% 2,84% 2,87% 2,91% 2,96% YoY +9 bps 1.- Non-customer income Includes income from the contribution UF GAP position and treasury activities. 3Q15 4Q15 1Q16 2Q16 3Q16 11

12 BCH Retail Banking Trends Loans (In trillions of CLP) Breakdown of Loans (In trillions of CLP) 10.6% Product 3Q15 2Q16 3Q16 YoY QoQ 12,9 14,0 14,3 Commercial % +3.5% Instalment % +2.1% 2.1% Credit Card % +0.7% Lines of Credit % +4.1% Mortgage % +1.8% 3Q15 2Q16 3Q16 Demand Deposits (In trillions of CLP) 3,7 7.8% 4,0 3,9-0.5% Consumer Finance % - Time Deposits (In trillions of CLP) 4,1 10.1% 1. Includes Credichile credit card loans 4,5 4,5 0.5% 3Q15 2Q16 3Q16 3Q15 2Q16 3Q Non Lending Revenues includes the contribution of deposits, fee income and other op. income. Lending Revenues includes interest income from loans. 12

13 BCH Retail Banking Trends Banking Customers (# of debtors, in 000, As of July 2016) Webpage Traffic 1 (In 000, Avg. Monthly traffic, Jan-Jul 2016) 331 Banco de Chile Santander BCI ItaúCorp Digital Channels at Banco de Chile Online Banking Monetary Transactions (Avg. Mthly Transactions, in millions) 1,7 +68% 2, sep Banco de Chile Santander BCI ItaúCorp ATM Productivity (Average number of transactions per ATM, Avg. May - July 2016) Consumer Loan Sales (# of transactions breakdown by channel,%) Online 28% Branches* 72% 50% 50% Banco de Chile Santander ItaúCorp BCI 2013 sep-16 Source: SBIF (1) Corresponds to individuals navigating the website for a period of uninterrupted 13 time, regardless of the number of pages to seen during the session. *Branches and other sales channels

14 BCH Wholesale Banking Trends Loans (In trillions of CLP) Breakdown of Loans (In trillions of CLP) 11,1-3.6% 10,7 10,7 Product 3Q15 2Q16 3Q16 YoY QoQ Commercial % -0.3% Foreign Trade % +2.4% Leasing % -0.5% Factoring % - 3Q15 2Q16 3Q16 Demand Deposits (In trillions of CLP) Reciprocity (Demand Deposits to Loans) 1.4% 3,6 3,9 3,7 30,4% 31,8% 30,5% -5.4% 3Q15 2Q16 3Q16 3Q15 2Q16 3Q Non Lending Revenues includes the contribution of deposits, fee income and other op. income. Lending Revenues includes interest income from loans. 14

15 3Q16 BCH Risk Quarterly Loan Loss Provisions (In billions of CLP and LLP ratio in %) Variation in Loan Loss Provisions (In billions of CLP) ,2 3,8 12,4 64,7 1,8% 73 1,2% 1,1% 1,5% 41 1,1% 30,9 3Q15 4Q15 1Q16 2Q16 3Q16 Loan Loss Provisions Additional Provisions LLP Ratio Quarterly NPLs (%) 1,35% 1,29% 1,29% 1,22% 1,28% 1,29% 1,21% 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 15

16 3Q16 BCH Operating Expenses Operating Expenses (In billions of CLP) Personnel Dep., Amort. & Impairments. 75 Administration & Others Other Personnel expense growth due to inflationindexed salary adjustments and higher nonrecurring collective bargaining agreement bonuses. Administration expense growth due mainly to higher expenses in IT-related items, building maintenance and marketing. Other expenses decrease due to lower non-credit related contingency provisions. Efficiency Ratio (YTD August 2016, Op. Expenses/Op. Revenues, % ) 66,2% ,1% 45,1% 53,2% 3Q15 4Q15 1Q16 2Q16 3Q16 Efficiency Ratio 43.2% 45.4% 47.3% 43.2% 46.2% BCH Santander BCI ItaúCorp* (*) The ItaúCorp ratio has been computed in a pro-forma basis order to adjust the effect of the merger 16

17 BCH Achievements I Recognition II Innovation 2016 Achievements Global Finance - Best Emerging Markets Bank in Latam The Banker - Most Valuable Brand in Chile Latin Finance - Best Investment Bank Successful issuance of subordinated bonds Global Finance - Best Consumer Digital Bank in Chile New company online personal banking website We launched a new Buy / Sell Currency platform III Commitment to our employees IV Record Current Accounts Sales V Service Quality Merco Corporate Reputation Ranking: Ranked as best financial institution to attract and retain talented staff Record sales of new Current Accounts in 3Q16 ( ) Strong YoY improvement in Service quality within an environment of more demanding customers Leader in Benchmark Recommendation Successful completion of three collective bargaining agreements, ratifying our commitment with our employees 29,7% YTD monthly average increase of new Current Accounts Uptime ATM 99% 17

18 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. 18