Banco Hipotecario SA Earnings Release - Third Quarter 2010

Transcription

1 Banco Hipotecario SA Earnings Release - Third Quarter 2010

2 Banco Hipotecario cordially invites you to participate in its Third Quarter 2010 conference call Tuesday, November 16, 2010, 10:00 ET If you would like to participate, please call: USA: (800) International: (612) PIN # Slideshow available at: Preferably 10 minutes before the call is due to begin. The conference will be in English. 2

3 U Contacts: Tomás Godino Capital Markets Tel. (54-11) Fax (54-11) Buenos Aires, Argentina Gabriel Saidon Chief Financial Officer Tel. (54-11) /5212 Fax (54-11) /5113 Buenos Aires, Argentina Banco Hipotecario SA reports Third Quarter 2010 results Highlights Executive Summary Total net income for the quarter was Ps million, 90.3% and 135.6% higher than last quarter and same quarter of last year, respectively. Net financial margins of Ps million in the quarter were 53.4% and 91.6% higher than previous quarter and a year ago, respectively. Net income from services for the quarter were Ps million, 6.6% higher than previous quarter, and 10.1% higher than third quarter Loans to the private sector increased 6.5% in the quarter and 31.0% YoY 1. Deposits increased 11.1% in the quarter and 43.0% YoY. NPL ratio decreased from 6.0% to 3.2% in the year while coverage ratio increased from 91.6% to 116.7% in the same period. Equity ratio of 24.6%, higher than the 23.1% of September BH ranks fifth in terms of net worth, seventh in terms of household financing, and eleventh in terms of assets in the local financial system. 1 As adjusted for outstanding MBS at the end of each period. 3

4 Buenos Aires, November 10, 2010 Three-month period results Total net income for the quarter was Ps million, 90.3% and 135.6% higher than last quarter and same quarter of last year, respectively. Quarter ended (in thousands of pesos) 09/30/10 06/30/10 09/30/09 QoQ YoY Financial income 354, , , % 25.7% Interests on private sector loans 165, , , % -3.4% Trading and Position 166, , , % 24.7% Interests on public sector loans 3,038 3,568 2, % 19.0% Futures on exchange rates 4,125 3, % N/A Hedging transactions 14,773 18,606 (25,769) -20.6% % Financial expenditure (171,680) (173,679) (186,554) -1.2% -8.0% Capital Markets expenses (48,977) (56,919) (72,093) -14.0% -32.1% Interests on deposits (101,568) (84,995) (90,360) 19.5% 12.4% Interests on other borrowings (334) (19) (2) N/A N/A Futures on exchange rates (11,326) 3,640 - N/A N/A Differences on exchange rate 1,449 (17,371) (1,162) % % Hedging transactions 4,730 (1,376) (929) N/A N/A Public sector assets adjustment (1,331) (5,274) (7,407) -74.8% -82.0% Taxes (14,323) (11,365) (14,601) 26.0% -1.9% Net financial margin 182, ,055 95, % 91.6% Provision for loan losses (16,262) (20,220) (25,148) -19.6% -35.3% Net income from services 75,523 70,841 68, % 10.1% Administrative expenses (147,893) (142,179) (114,096) 4.0% 29.6% Miscellaneous income, net (10,221) 16,506 10, % % Net income 83,721 44,003 35, % 135.6% During the quarter financial income increased 21.0% while financial expenditures decreased 1.2%. Compared to same quarter of last year, financial income increased 25.7% while financial expenditures decreased 8.0%. Such changes resulted in higher net financial margins of Ps million in the quarter, 53.4% and 91.6% higher than previous quarter and a year ago, respectively. Financial margins on an annualized basis represented 6.4% over average assets in the quarter, compared to 4.2% of previous quarter and 3.1% of 3Q Financial Income & Financial Expenditure (in million of pesos) Net Financial Margin (in million of pesos) Sep 09 Jun 10 Sep 10 Sep 09 Jun 10 Sep 10 Financial income Financial expenditure 4

5 Aggregated income from interest on private sector loans has increased over the last quarters, despite of the issuance of MBS for Ps million and Ps million in December 2009 and July 2010, respectively. Income from interest on private sector loans (in millions of pesos) % 73.4% 72.3% 71.0% 73.5% 28.0% 26.6% 27.7% 29.0% 26.5% 3Q09 4Q09 1Q10 2Q10 3Q10 Mortgage Non-mortgage Net income from services increased 6.6% in the quarter and 10.1% over the year as a result of more products offered to our clients Net income from services (in million of pesos) Q09 4Q09 1Q10 2Q10 3Q10 Private sector loan portfolio increased 31.0% YoY and 6.5% in the quarter, as adjusted by total outstanding MBS at the end of each period. BH s private sector loan portfolio consists of 38% of mortgage loans and the remaining 62% principally of personal loans, credit card financing and corporate lending. Private Sector Loan Diversification (in millions of pesos) 5,813 4,207 4,649 4,847 1,899 2,241 3,141 90% 38% Q10 Mortgages MBS Non-mortgages 5

6 Private loans as of September 30, 2010 are composed of 69.5% of retail financing and housing loans (34.9% consumer and 34.6% housing) and 30.5% of corporate loans, providing, on average, for a diversified, low leveraged and highly secured portfolio (34.6% of credit exposure to the private sector is secured with mortgages with loan to values averaging 50%). Consumer and Housing; 69.5% Composition of Loan Portfolio (Non-financial private sector loans) Corporate; 30.5% NPL ratio decreased from 6.0% to 3.2% in the year, and provisions of Ps million were charged to income in the quarter, 35.3% lower than same period of last year. Coverage ratio was 116.7%, compared to 91.6% of 3Q09. Provisions recorded represent 134.7% of those required by the Argentine Central Bank % Non-performing loans (in millions of pesos and as a percentage of total loans) 14.0% % % % 8.0% 6.0% 4.0% 2.0% 0.0% Q10 More than 180 days (left axis) Up to 180 days (left axis) NPL as % of total loans (right axis) Administrative expenses increased 4.0% in the quarter and 29.6% over the year, mainly as a result of salary adjustments and some increase in advertisement expenses. Higher margins and fees resulted in improved efficiency ratios (defined as administrative expenses over net financial margin plus net income from services) from 69.6% a year ago to 57.3% this quarter. Coverage ratios (defined as net income from services over administrative expenses) increased over the last quarters to 51.1%. 69.6% Efficiency (administrative expenses over net financial margin plus net income from services, as a percentage) 66.1% 70.3% 74.9% 57.3% 60.1% Coverage Ratio (net income from services over administrative expenses as a percentage) 42.4% 46.6% 49.8% 51.1% 3Q09 4Q09 1Q10 2Q10 3Q10 3Q09 4Q09 1Q10 2Q10 3Q10 BH continues diversifying its sources of funding. On this regards, deposits grew 43.0% YoY while capital market s debt decreased 35.2% in the same period. 6

7 Funding (in millions of pesos) 236 (7%) ,349 2,622 3,731 4,971 (67%) 3,207 3,323 (93%) 3,727 4,272 4,043 2,930 2,496 (33%) Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Sep-10 Foreing Currency Debt Deposits The Bank has an asset and liability structure with solvency levels of 24.6%. Balance Sheet Period ended (in thousands of pesos) 09/30/ /30/ /30/2009 Cash and due from banks 1,166, , ,482 Government and private securities 1 3,408,553 3,201,802 2,934,529 Loans 4,706,469 4,638,184 3,707,915 Non-financial public sector 55,258 59,457 70,485 Financial sector 56,885 37,043 2,411 Non-financial private sector 4,594,326 4,541,684 3,635,019 Advances 337, , ,290 Mortgage loans 2 1,779,991 1,888,122 1,670,266 Documents 88,001 68,688 50,995 Pledge loans 12,630 33,661 0 Personal loans 405, , ,688 Credit cards 1,215,119 1,128, ,519 Other 881, , ,455 Interest accrued on uncollected loans 57,449 51,165 55,819 Reserve for loan losses -183, , ,013 Other receivables from financial operations 1,782,748 1,678,752 2,837,434 Miscellaneous assets 930, ,825 1,315,006 Total assets 11,995,279 11,164,733 11,699,366 Deposits 4,970,856 4,474,494 3,476,356 Other liabilities from financial operations 3,779,403 3,510,841 5,301,529 Miscellaneous liabilities 298, , ,209 Total liabilities 9,048,503 8,303,067 9,001,094 Shareholders equity 2,946,776 2,861,666 2,698,272 1 Includes Argentine Central Bank securities. 2 Includes loans pending for securitization. 7

8 09/30/ /30/ /30/2009 Profitability ROAA (Return on average assets) 1 2.0% 1.5% 1.3% ROAE (Return on average shareholders equity) 1 7.8% 6.0% 5.9% Net financial margin 1 5.0% 4.3% 4.2% Efficiency % 67.6% 52.4% Capital Total shareholders equity / total assets 24.6% 25.6% 23.1% Funding / total shareholders equity 2.6x 2.4x 2.4x Liquidity Current assets / deposits 92.0% 89.6% 110.4% Loans / deposits 94.0% 102.8% 105.3% Asset Quality Non-performing loans / total loans 3.2% 3.2% 6.0% Reserves for loan losses / total non-performing loans 116.7% 118.5% 91.6% Non-performing loans, net of reserves / shareholders equity -0.9% -1.0% 0.8% Cumulative Net Income Nine-month Period Ended Change (in thousands of pesos) 09/30/ /30/2009 $ % Financial income 956,756 1,052,403 (95,647) -9.1% Interests on private sector loans 474, ,531 (46,653) -8.9% Trading and Position 408, ,275 (69,553) -14.5% Interests on public sector loans 10,450 6,968 3, % Futures on exchange rates 10,632-10,632 N/A Hedging transactions 52,074 45,629 6, % Financial expenditure (529,816) (668,769) 138, % Capital Markets expenses (165,175) (222,952) 57, % Interests on deposits (270,060) (290,968) 20, % Interests on other borrowings (1,665) (6,480) 4, % Futures on exchange rates (14,945) - (14,945) N/A Differences on exchange rate (33,904) (82,876) 48, % Hedging transactions 3,354 (2,977) 6, % Public sector assets adjustment (10,450) (19,944) 9, % Taxes (36,971) (42,572) 5, % Net financial margin 426, ,634 43, % Provision for loan losses (62,486) (138,188) 75, % Net income from services 207, ,708 29, % Administrative expenses (421,210) (316,389) (104,821) 33.1% Miscellaneous income, net 17,103 11,744 5, % Net income 167, ,509 49, % 1 Based on annualized results. 2 Administrative expenses (excluding severance payments and bonuses) over net financial income and net income from services. 8

9 Assets and liabilities denominated in foreign currency as of September 30, 2010 were converted to pesos at the exchange rate of Ps /USD1.00 and Ps /EUR1.00, which was the reference exchange rate published by the Central Bank on such date. Unless otherwise indicated, all figures are stated in thousands of pesos. Disclaimer Any comment made in this release in relation to future events is subject to many conditions and risks detailed and described in our Offering Memorandums and financial statements available at our website ( / Institutional / Financial Information and Bonds). The words believe, may, will, aim, estimate, continue, anticipate, intend, expect and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. This release is a summary analysis of Banco Hipotecario's financial condition and results of operations as of and for the period indicated, which might have certain reclassification from the Financial Statements. For a correct interpretation, this release must be read in conjunction with all other material periodically filed with the Comisión Nacional de Valores ( and the Bolsa de Comercio de Buenos Aires ( In addition, the Central Bank ( may publish information related to Banco Hipotecario as of a date subsequent to the last date for which the Bank has published information. 9