Corporate Presentation. As of June 30, Banco de Chile

Transcription

1 Corporate Presentation As of June 30, 2016 Banco de Chile

2 Chile: Macro Environment and Financial System

3 Chile: General Overview 0 Sound and prudent Fiscal Policy Long Term Credit Rating Net Fiscal Debt S&P: AA- Moody s: Aa3 Fitch: A+ As a result of: Strong policy framework (independent Central Bank, inflation targeting since 1989, and counter cyclical fiscal rule since 2001) Strong institutional foundation Strong resilience to recent international events Best performance in LATAM during the last 30 years; per capita GDP is 50% above LATAM average. (Debt / GDP, %) 120 Gross Fiscal Debt (Debt / GDP, %) Strong Relative Position Global Competitiveness Index World Economic Forum #1 st in LATAM #35 Out of 140 Countries Soundness of Banks World Economic Forum 2015 #1 st in LATAM #9 Out of 140 Countries Economic Freedom Index Heritage Foundation Chile Emerg. Ec. Adv. Ec. #1 st in LATAM /2 nd in America #7 Out of 166 Countries Best Countries for Business Forbes 2015 #1 st in LATAM #30 Out of 144 Countries 3

4 Chile: General Overview An Economy open to the World Free Trade Agreements with 85% Global GDP 1 Foreign Direct Investment 9% of GDP 1 Trade Volume 50% of GDP 1 GDP by Sector (Main sectors, % of total, 2015) Fishing Rest. & hotels Agriculture Comunication Utilities Government Houses Services Transport Financial Services Construction Retail Manufacturing Education & health Mining Services 0% 1% 2% 3% 4% 4% 4% 5% 6% 7% 9% 10% 11% 12% 12% GDP per Capita (ppp) 2015 ( 000 USD) Chile Mexico Brazil Colombia Peru FDI Inflows (Main Countries, %, ) USA 20% Netherlands 15% Spain 10% UK 5% Canada 4% Japan 4% Brazil 2% Exports by Sector (% of total, 2015) Grain Wine Forestry Machinery Processed Salmon Pulp & Paper Chemicals Fruit Other Proc. Food Copper Total Exports: USD 62 Bn 30 FDI in Chile (Main Sectors, %, ) Mining 45% Services 15% Electricity, Gas & Water 9% Manufacturing 7% Transport & Communication 5% Commerce 5% Exports by Destination (% of total) Rest Asia 23% LATAM 14% Other 8% US 13% China 26% Europe 16% Source: International Monetary Fund (IMF) 2015 (1) As of December Source: Central Bank of Chile 4

5 Economy 2016 Expected GDP growth (YoY%) World LATAM Chile Chile s Monthly GDP growth (%YoY, MA3) 2Q15 3Q15 4Q15 1Q16 2Q Source: Bloomberg, Central Bank of Chile. 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2, Unemployment Rate (% of Labor Force) 0, Evolution of CLP Exchange Rate (CLP/USD)

6 Economy GDP Growth (YoY%) 4,0 Headline Inflation (YoY%, end of period) 4,7 4,4 1,8 2,1 1,6 2,0 2,8 3,4 3, f 2017f Monetary Policy Rate (%, end of period) f 2017f Current Account & Fiscal Balance (% of GDP) 4,5 3,5 3,5 3,0 3, Source: Bloomberg, Central Bank of Chile. 2016f 2017f -3,7-0,5-1,3-1,5-2,0 Current Account Fiscal Balance -2,3-2,1-2,7-3,0-3, f 2017f 6

7 Solid and Profitable Banking Industry GDP and Total Loan Growth in Chilean Banking Industry (1) (Var. Real YoY) Loan Elasticity / GDP = 2x (2) 12,6% 15,3% 12,8% 13,6% 12,9% CAGR : Total Loans 8.2% Consumer 11.1% Mortgage 10.9% Commercial 6.7% 8,3% 3,3% 1,5% 3,2% 3,8% 2,7% 9,7% 7,0% 6,2% 5,7% 5,2% 3,3% -0,3% 9,7% 6,1% 5,8% 5,8% 5,5% 8,0% 4,0% 4,7% 6,6% 1,9% 2,1% 1,6% -1,0% e ROAE 15.7% 13.5% 14.9% 15.3% 16.4% 16.8% 16.0% 14.3% 15.7% 19.3% 18.8% 15.7% 16.0% 18.2% 14.7% LLP Ratio 1.5% 1.5% 1.3% 0.8% 0.6% 0.8% 1.0% 1.4% 1.8% 1.3% 1.2% 1.3% 1.3% 1.3% 1.2% 1. - Excludes subsidiaries abroad 2. - Linear average Note: Real loan growth using the value of the UF at the end of each year. Source: Chilean Central Bank, SBIF GDP Total Loans 7

8 Substantial Growth Potential Loan Penetration % of GDP, as of December 2015 Breakdown of Commercial Loans As of December 2015 Total Loans Commercial Loan Volumes Breakdown by Size Number of Debtors Consumer Mortgage 85% 11% 23% US$ 128 Bn 1,337, % 1.1% Commercial 51% 64% 20% 16% 98.8% Source: Central Bank of Chile, SBIF Debtors: < US$30,000 Debtors: US$ to US$300,000 Debtors: > US$300,000 8

9 Introduction to Banco de Chile

10 Snapshot of Banco de Chile As of June 2016 US$47 billion in Assets US$28 billion in Total Deposits Highly Profitable and Strongest Private Bank ROAE June ,5% Rating S&P A+ US$4.2 billion in Equity Santander CL 17,6% A S&P: A+ Moody s: Aa3 (Strongest Private Bank in Latam) BCI 14,8% A Listed locally and internationally Itau-Corp* 0,7% BBB Source: SBIF, Bloomberg (*) Estimated proforma 10

11 Ownership Structure Free Float Evolution Simplified Ownership Structure As of July 2016 Pre Capital Increase ,1% 50.0% 50.0% Pre Capital Increase ,7% 26.6% 58.2% LQIF s Direct and Indirect Stake in Banco de Chile 51.1% SM-Chile 100% Pre LQIF Secondary Offering ,6% 27.2% Free Float 12.4% 29.3% SAOS Ergas Group 4.5% Current 27.2% Free Float Board of Directors Composition (11) Six appointed by Quiñenco Three appointed by Citi Two independent directors 11

12 Diversified Business Model Total Loans As of June 30, 2016 Income Before Taxes As of June 30, % 2% 16% 53% US$37.2 bn 27% 47% US$498.7 mn 20% 17% 5% 10% 1 Subsidiaries Individuals and SMEs Consumer Finance Large Companies Corporate Treasury Note: CLP/US$ = as of June 30, Information in Chilean GAAP. 1.- Subsidiaries include Banchile Corredores de Bolsa S.A., Banchile Administradora General de Fondos S.A., Banchile Corredores de Seguros Ltda., Banchile Asesoría Financiera S.A., Banchile Securitizadora S.A., Promarket S.A., Socofin S.A. 12

13 BCH Customer Centric Strategy 13

14 BCH Customer Centric Strategy Service Quality Continually Improving Customer Experience Net Promoter Score (%) Jun-16 Complaints (Avg. # of complaints per month for every Customer) 17,2 13,9 8, Aligned and Committed Team Positioning Banco de Chile as an Attractive Place to Work Work Climate Survey: 87% Ranked 1 st in the Financial industry Benefits Satisfaction Survey: 87% Ranked 1 st in the Financial industry Avg. Turnover: 9 years Training & Development Coverage: 680 workshops in 2015 Participants: 48% of total employees Employee training satisfaction: 94% Operational Excellence Better serving customers by incorporating new and secure technology Online and Mobile Banking Monetary Transactions (Avg. Mthly Transactions, in millions) Up-Time (May 2016) CRM 99% 2,8 Webpage 98% 3, to Jun-16 Mobile 99% Corporate Reputation 1 st Companies that best attract and retain talented staff in Financial Institutions Corporate Reputation Ranking by Merco Source: Banco de Chile, Sernac, KPI Estudios, Mercer, Merco, Reputation Institute 1 st Most Reputable Company Financial Institutions RepTrack Chile 2016 Ranking by Reputation Institute 14

15 Solid Competitive Position 15

16 Santander BCI Itau CorpBanca Santander BCI Itau CorpBanca Santander BCI Itau CorpBanca Solid Competitive Position: Brand First Mention by Attribute % of Total Mentions, December 2015 Top of Mind Bank You Would Change to Security and Solvency 30% 25% 32% 16% 16% 9% 14% 10% 14% 3% 3% 4% 4% 2% 1% Source: Adimark GFK. Includes all brands from each institution. 16

17 Solid Competitive Position: Products and Services Total Loans 1 Market Share, as of June 2016 Ranking 1,2 Product Mkt Share 1 st Commercial 17.6% 2 nd Consumer 21.3% 2 nd Mortgage 17.4% Commercial Loans 1 Market Share, as of June ,1% 18,0% 13,0% 12,0% 17,6% 16,8% 14,0% 14,6% Santander BCI ItauCorp Santander BCI ItauCorp Net Fees and Commissions Market Share, as of June 2016 Assets Under Management Market Share, as of June ,1% 17,0% 16,9% 8,3% 21,3% 15,9% 13,7% 6,2% 6,2% Santander BCI ItauCorp Santander BCI Security LV Source: SBIF, Mutual Fund Association. 1.- Excludes subsidiaries outside Chile. 2.- Mortgage loan ranking excludes Banco Estado 17

18 Solid Competitive Position: Funding Liability Structure % Over Total Assets, as of June 2016 Demand Deposits Market Share %, as of June 2016 Financial Institutions 5% Equity 9% Other 8% Current Accounts and Demand Deposits 25% 22,7% 20,9% 14,9% 7,4% Debt Issued 19% Savings Accounts and Time Deposits 34% Wholesale 49% Wholesale 58% Retail 51% Retail 42% Cost of Funding %, YTD June 2016, Local Currency 3,3% Santander BCI ItauCorp 3,8% 3,8% 4,7% Source: SBIF. Information in Chilean GAAP (*) Estimated proforma Santander BCI ItauCorp* 18

19 Solid Competitive Position: Risk Delinquency Ratio %, Past Due Loans 1 / Total Loans Coverage Ratio Allowances for Loan Losses / Past-Due Loans 1 2,66% 2,30% 1,20% 3,17% 2,95% 2,34% 2,07% 1,03% 0,97% 2,93% 2,39% 1,14% 2,81% 2,29% 1,25% 2,54% 2,16% 1,68% 1,53% 1,22% 1,28% 2,06 2,14 1,06 1,02 1,10 1,04 1,11 2,34 0,92 2,03 1,94 2,01 1,22 1,09 0,99 1,17 0,97 0,95 1,89 1,49 1, Jun Jun-16 Santander BCI Renowned risk management based on: Proven capacity for origination and structuring Solid follow-up and collection processes Senior management deeply involved Source: SBIF. Information in Chilean GAAP. 1.- Loans overdue 90 days or more, including overdue installments, as well as outstanding capital and interests. 19

20 Solid Competitive Position: Corporate Governance Solid Corporate Governance Practices Successful Partnership with Citi Active Board involvement 11 board members (2 are independent) 5 risk committees, including weekly sessions of Loan Portfolio Committee 6 monthly business committees Best Practices in pursuant to NYSE and SEC standards Three active board members Growth of existing businesses Transactional and Multinational Banking, Treasury, Investment Banking, Consumer Finance International Connectivity provide us with significant growth potential to develop: International business opportunities Regional and multinational client development Best practices in internal management processes 20

21 Proven Value Creation Capabilities Highest Profitability in the Local (1) Industry ROAE Based on Superior Risk Management and Efficiency Operating Margin % Over Average Loans, YTD June 2016 YTD June ,2% 6,5% 6,1% 20,5% 17,6% 14,8% Loan Loss Provisions, ex additional provisions %, Provisions for Loan Losses / Average Loans, YTD June ,5% 0,9% 1,0% 4,7% Santander BCI ItauCorp 2 1,7% Santander BCI ROAA: 1.8% 1.4% 1.1% 0,7% ItauCorp 2 0.1% Santander BCI ItauCorp 2 Efficiency Ratio Operating Expenses / Operating Revenues, YTD June ,1% 46,0% 53,6% 68,0% Source: SBIF (1) Listed Banks (2) Estimated proforma Santander BCI ItauCorp 2 21

22 2Q16 Results 22

23 2Q16 Highlights Banco de Chile Net Income & ROAE (In billions of CLP and ROAE in %) Earnings down 10% YoY (+14% QoQ) Revenue up 14% YoY (+16% QoQ) 168 Fees up 9% YoY (+4% QoQ) Strong consumer loan and deposit growth Loans up 13% YoY (+2% QoQ) 117 Deposits up 11% YoY (+2% QoQ) 26% NPLs remain stable despite economic 21% 18% 20% 21% 19% 22% slowdown Quarterly Operating efficiency 43.2% ROAE 22% 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 UF (QoQ) 1.9% 0% 1.5% 1.5% 1.1% 0.7% 0.9% Market Share Net Income 26% Basel Ratio 13.4% 23

24 2Q16 BCH Operating Income Quarterly Operating Income 1 (In billions of CLP) ,6% 9.0% % 22,1 23,4 24,0 23,9 24, % % YoY 9.0% Total Loans & Demand Deposits (In trillions of CLP, %) 7,2 7,3 8,3 7,9 7, % 2Q15 3Q15 4Q15 1Q16 2Q16 2Q15 3Q15 4Q15 1Q16 2Q16 UF (QoQ) 1.5% 1.5% 1.1% 0.7% 0.9% Total Loans Loan Spread Evolution (Over Avg. Daily Loans) DDA Customer Interest income Net Fees Non-customer income 1.- Non-customer income Includes income from the contribution UF GAP position and treasury activities. 3,07% 2,93% 2,91% 2,90% 2,94% 2Q15 3Q15 4Q15 1Q16 2Q16 24

25 2Q16 BCH Risk Quarterly Loan Loss Provisions (In billions of CLP and LLP ratio in %) Variation in Loan Loss Provisions (In billions of CLP) ,4 52,1 92,9 1,1% 1,8% 73 1,2% 1,1% 1,5% 41 5,8 9,6 3,1 2Q15 3Q15 4Q15 1Q16 2Q16 Loan Loss Provisions Additional Provisions LLP Ratio Banking Industry Evol. LLPs & GDP (GDP and Loan Loss Provisions to Avg. Loans, %) 1,5% 3,3% 1,5% 2,7% 3,8% 1,3% 7,0% 0,8% 6,2% 0,6% 5,7% 0,8% 5,2% 1,0% 1,4% 3,3% 1,8% 5,8% 5,8% 1,3% 1,2% 5,5% 4,0% 1,2% 1,0% 1,2% 1,2% 1,9% 2,1% 1,1% 1,6% -1,0% * Source: SBIF. LLP GDP *Regulatory change that reduced the credit conversion factors for certain contingent loans from 50% to 35% *GDP 2016 forecast, LLP as of May

26 2Q16 BCH Operating Expenses Operating Expenses (In billions of CLP) Personnel expense growth due to inflation-indexed salary adjustments, higher non-recurring bonuses, and higher severance payments. Administration expense growth due mainly to higher expenses in IT-related items, marketing, product delivery, buildings and utilities. Other expenses growth as a result of non-credit related contingency provisions. Efficiency Ratio (Op. Expenses/Op. Revenues, %) ,4% 54,7% 52,1% 2Q15 3Q15 4Q15 1Q16 2Q16 Personnel Administration & Others 41,3% 47,2% 43,2% Dep., Amort. & Impairments. Other 2Q15 3Q15 4Q15 1Q16 2Q16 BCH System 26

27 BCH Retail Banking Trends Loans (In trillions of CLP) Breakdown of Loans (In trillions of CLP) 12,4 13.3% 13,8 14,0 Product 2Q15 1Q16 2Q16 YoY QoQ Commercial % 1.9% Instalment Consumer loans % 1.8% 1.7% Credit Card % 2.3% Lines of Credit % -0.3% Mortgage % 1.9% 2Q15 1Q16 2Q16 Demand Deposits (In trillions of CLP) 11.2% 3,9 4,0 Consumer Finance % -1.1% 1. Includes Credichile credit card loans Non-lending Revenues/ Lending Revenues 1 (Times) 0,65 0,63 0,64 3,6 2.1% 2Q15 1Q16 2Q16 2Q15 1Q16 2Q16 1. Non Lending Revenues includes the contribution of deposits, fee income and other op. income. Lending Revenues includes interest income from loans. 27

28 BCH Wholesale Banking Trends Loans (In trillions of CLP) 10,3 3.9% 10,7 10,7 0,4% Breakdown of Loans (In trillions of CLP) Product 2Q15 1Q16 2Q16 YoY QoQ Commercial % 1.1% Foreign Trade % -8.4% Leasing % -1.5% Factoring % 1.2% 2Q15 1Q16 2Q16 Demand Deposits (In trillions of CLP) 5,4% Non-lending Revenues/ Lending Revenues 1 (Times) 1,51 2,9 3,3 3,1 1,47 1,46 5,3% 2Q15 1Q16 2Q16 2Q15 1Q16 2Q16 1. Non Lending Revenues includes the contribution of deposits, fee income and other op. income. Lending Revenues includes interest income from loans. 28

29 2Q16 BCH Capital Adecuacy Basel Ratio (% of RWA, As of June 2016) Preparing for Basel III Capitalizing more with a new dividend provisioning policy 12.84% +0.32% +0.32% 13.37% 60% Cash Dividend 70% Cash Dividend -0.82% +0.71% based on Distributable Earnings NI less Inflation on Capital & Reserves Solid Tier 1 Capital of 10.5% Important gap on usage of subordinated bonds for Tier II Capital (39%) 2Q15 RWA Tier I Cap. Add. Prov. Credit Conv. Factors 2Q16 Strong focus on retail deposits +11.5% YoY Issuance of long-term bonds 29

30 First Half 2016 BCH Peer Comparison Operating Margin (Operating Income / Avg. Loans, as of June 2016) Loan Loss Provisions, ex additional provisions (LLP / Avg. Loans, as of June 2016) 7,2% 6,5% 6,1% 4,7% 0,9% 1,5% 1,0% 1,7% Santander BCI ItauCorp* Santander BCI ItauCorp* Efficiency Ratio (Op. Expenses / Op. Income, as of June 2016) ROAE (Net Income / Avg. Equity, as of June 2016) 45,1% 46,0% 53,6% 68,0% 20,5% 17,6% 14,8% 0,7% Santander BCI ItauCorp* Santander BCI ItauCorp* * Estimated proforma 30

31 Year-end Financial Information 31

32 Year-end Financial Information Variation / 2014 Statement of Income (in billions of CLP) Net Interest Income ,059 1,245 1,219 (2.1)% Total Operating Revenue 1,224 1,342 1,456 1,646 1,646 (0.0)% Provisions for Loan Losses (125) (188) (242) (284) (303) 6.7% Total Operating Expenses (614) (634) (623) (715) (726) 1.6% Net income (5.4)% Balance Sheet (in billions of CLP) Total Loans 17,378 18,762 20,870 21,877 24, % Total Assets 21,741 23,261 25,934 27,646 31, % Total Equity 1,739 2,007 2,284 2,535 2, % Profitability Indicators Net Interest Margin % 4.62% 4.71% 5.15% 4.62% (53) bp Operating Margin % 6.41% 6.47% 6.81% 6.24% (57) bp ROAE - Return on Average Equity % 23.31% 21.30% 24.43% 21.41% (302) bp ROAA - Return on Average Assets % 2.09% 2.13% 2.25% 1.91% (34) Bp Credit Quality Provisions for Loan Losses/ Average Loans 0.79% 1.04% 1.23% 1.34% 1.32% (2) bp Non-Performing Loans / Total Loans 1.03% 0.97% 1.13% 1.25% 1.22% (3) bp Allowances for Loan Losses / Non-Performing Loans 2.1x 2.4x 2.0x 1.9x 2.0x 0.07x Operational Efficiency Operating Expenses / Operating Revenues 50.16% 46.26% 42.78% 43.41% 44.11% +70 bp Capital Ratios Total Regulatory Capital / Risk-weighted Assets 12.91% 13.22% 13.05% 13.32% 12.58% (74) bp Tier 1 Capital / Risk-weighted Assets 8.88% 9.69% 9.94% 10.39% 9.97% (42) bp Source: Banco de Chile, based on historical Financial Statements submitted to the SBIF and not including reclassifications. Information in Chilean GAAP. 1.- Annualized net interest income divided by average interest earning assets. The average balances for interest earning assets, including interest and readjustments, have been calculated on the basis of our daily balances and on the basis of monthly balances for our subsidiaries. 2.- Annualized net income (loss) divided by average equity. The average balances for equity have been calculated on the basis of our daily average balances. 3.- Annualized net income (loss) divided by average total assets. The average balances for total assets have been calculated on the basis of our daily balances and on the basis of monthly balances for our subsidiaries. 32

33 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. 33