Corporate Presentation. As of September 30, Banco de Chile

Transcription

1 Corporate Presentation As of September 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 #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 Chile Emerg. Ec. Adv. Ec. 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 Source: Central Bank of Chile 4 (1) As of December 2015

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

6 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 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% GDP Total Loans 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 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% Debtors: < US$30,000 Debtors: US$ to US$300,000 Debtors: > US$300,000 Source: Central Bank of Chile, SBIF 8

9 Introduction to Banco de Chile

10 Snapshot of Banco de Chile As of Sept US$47 billion in Assets US$28 billion in Total Deposits Highly Profitable and Strongest Private Bank ROAE Sept ,5% Rating S&P A+ US$4.3 billion in Equity Santander CL 17,6% A S&P: A+ Moody s: Aa3 (Strongest Private Bank in Latam) BCI 14,9% A Listed locally and internationally Itau-Corp* 1,1% BBB+ Source: SBIF, Bloomberg (*) Estimated proforma 10

11 Ownership Structure Free Float Evolution Simplified Ownership Structure As of Sept 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 11

12 Diversified Business Model Total Loans As of Sept. 30, 2016 Income Before Taxes As of Sept. 30, % 3% 17% 54% US$38.0 bn 26% 47% US$757.7 mn 20% 17% 5% 8% 1 Subsidiaries Individuals and SMEs Consumer Finance Large Companies Corporate Treasury Note: CLP/US$ = as of September 31, 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 68 17,2 Service Quality Continually Improving Customer Experience Net Promoter Score (%) Sep-16 Complaints (Avg. # of complaints per month for every Customer) 13,9 8,3 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 Incorporating new and secure technology Online and Mobile Banking Monetary Transactions (Avg. Mthly Transactions, in millions) 1,7 28% 72% +68% 2, Sep-16 Consumer Loan Sales (# of transactions breakdown by channel,%) 50% 50% Corporate Reputation Source: Banco de Chile, Sernac, KPI Estudios, Mercer, Merco, Reputation Institute 1 st Companies that best attract and retain talented staff in Financial Institutions Corporate Reputation Ranking by Merco 2013 Sep-16 Online Branches* 1 st Most Reputable Company Financial Institutions RepTrack Chile 2016 Ranking by Reputation Institute 14

15 Solid Competitive Position 15

16 Santander BCI Itaú CorpBanca Santander BCI Itaú CorpBanca Santander BCI Itaú CorpBanca Solid Competitive Position: Brand First Mention by Attribute % of Total Mentions, June 2016 Top of Mind Bank You Would Change to Best Mobile APP 27% 30% 20% 20% 25% 23% 15% 12% 13% 4% 2% 6% 2% 4% 2% Source: Adimark GFK. Includes all brands from each institution. 16

17 Solid Competitive Position: Products and Services Total Loans 1 Market Share, as of Sept Ranking 1,2 Product Mkt Share 1 st Commercial 17.7% 2 nd Consumer 21.2% 2 nd Mortgage 17.4% Commercial Loans 1 Market Share, as of Sept ,2% 18,0% 13,1% 11,8% 17,7% 17,0% 14,2% 14,4% Santander BCI ItaúCorp Santander BCI ItaúCorp Net Fees and Commissions Market Share, as of Sept Assets Under Management Market Share, as of Sept ,8% 16,9% 16,6% 9,3% 21,0% 16,3% 13,9% 6,0% Santander BCI ItaúCorp Santander BCI 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 Sept Demand Deposits Market Share %, as of Sept Financial Institutions 5% Equity 9% Other 8% Current Accounts and Demand Deposits 25% 23,1% 20,8% 14,8% 6,6% Debt Issued 19% Savings Accounts and Time Deposits 34% Wholesale 49% Wholesale 58% Retail 51% Retail 42% Cost of Funding %, YTD Sept. 2016, Local Currency 3,2% Santander BCI ItaúCorp 3,6% 3,7% 4,6% BCI Source: SBIF. Information in Chilean GAAP (*) Estimated proforma Santander ItaúCorp* 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% 2,09% 1,68% 1,59% 1,22% 1,21% 2,06 2,14 1,06 1,02 1,10 1,04 1,11 2,34 0,92 2,03 1,94 2,01 1,95 1,46 1,22 1,09 0,99 1,34 1,17 0,97 0, Sept Sept-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 Sept YTD Sept ,1% 6,5% 20,5% 6,1% 4,7% 17,6% 14,9% Loan Loss Provisions, ex additional provisions %, Provisions for Loan Losses / Average Loans, YTD Sept ,9% Santander BCI ItauCorp 2 1,5% 1,0% 1,5% 1,1% Santander BCI ItauCorp 2 Santander BCI ItauCorp 2 Efficiency Ratio Operating Expenses / Operating Revenues, YTD Sept ROAA: 1.8% 1.4% 1.2% 0.1% 45,4% 45,1% 53,4% 67,5% Source: SBIF (1) Listed Banks (2) Estimated proforma Santander BCI ItauCorp 2 21

22 3Q16 Results 22

23 Banco de Chile - 3Q16 Highlights Banco de Chile Net Income & ROAE (In billions of CLP and ROAE in %) % % % % 21% % % % 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 UF (QoQ) 1.9% - 1.5% 1.5% 1.1% 0.7% 0.9% 0.7% Net income -4% (3Q16/2Q16) ROAE +8% (3Q16/3Q15) 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) $145 bn -133 bps (3Q16/2Q16) -3 bps (3Q16/3Q15) 20.4% Operating Efficiency +293 bps (3Q16/2Q16) +300 bps (3Q16/3Q15) $428 bn $82 bn 1.21% NPL 90d 46.2% 23

24 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 24

25 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 Consumer Finance % - 1. Includes Credichile credit card loans Demand Deposits (In trillions of CLP) 3,7 7.8% 4,0 3,9 Time Deposits (In trillions of CLP) 4,1 10.1% 4,5 4,5-0.5% 0.5% 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 25

26 BCH Retail Banking Trends Banking Customers (# of debtors, in 000, As of July 2016) Banco de Chile Santander BCI ItaúCorp Webpage Traffic 1 (In 000, Avg. Monthly traffic, Jan-Jul 2016) 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 Consumer Loan Sales (# of transactions breakdown by channel,%) ATM Productivity (Average number of transactions per ATM, Avg. May - July 2016) Online Branches* 28% 50% % 50% Banco de Chile Santander ItaúCorp BCI Source: SBIF (1) Corresponds to individuals navigating the website for a period of uninterrupted time, regardless of the number of pages to seen during the session. *Branches and other sales channels 2013 sep-16 26

27 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. 27

28 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 28

29 3Q16 BCH Operating Expenses Operating Expenses (In billions of CLP) Personnel Dep., Amort. & Impairments 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 29

30 3Q16 BCH Capital Adequacy Basel Ratio (% of RWA) Preparing for Basel III Capitalizing more with a new dividend provisioning policy 60% 12,4% +0.38% +0.55% +0.19% +0.30% 13,8% Cash Dividend 70% Cash Dividend based on Distributable Earnings NI less Inflation on Capital & Reserves Solid Tier 1 Capital of 10.7% Important gap on usage of subordinated bonds for Tier II Capital (39%) Sep-15 Tier I Cap. Sub. Bonds Add. Prov. Credit Conv. Factors Sep-16 Strong focus on retail deposits Issuance of long-term bonds 30

31 Peer Comparison Operating Margin (Operating Income / Avg. Loans, as of 2016) Loan Loss Provisions, ex additional provisions (LLP / Avg. Loans, as of Sept 2016) 7,1% 6,5% 6,1% 4,7% 0,9% 1,5% 1,0% 1,5% Santander BCI ItauCorp* Santander BCI ItauCorp* Efficiency Ratio (Op. Expenses / Op. Income, as of Sept 2016) ROAE (Net Income / Avg. Equity, as of Sept 2016) 45,4% 45,1% 53,4% 67,5% 20,5% 17,6% 14,9% 1,1% Santander BCI ItauCorp* Santander BCI ItauCorp* * Estimated proforma 31

32 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% 32

33 Year-end Financial Information 33

34 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. 34

35 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. 35