BBVA CONTINENTAL. Investors Report. Second Quarter 2018

Transcription

1 CONTINENTAL Investors Report Second Quarter 2018

2 DISCLAIMER

3 INDEX 01 Peruvian Economy & Financial System 02 About 04 Ratings 05 Social Responsibility & Awards 03 Financial Highlights Appendix Debt Issuances

4 01 Peruvian Economy & Financial System

5 GDP Growth (Real) Inflation (End of Period) 3.6% 3.6% 3.2% 3.2% 6.4% 2.6% 2.3% 2.2% 2.6% 2.1% 3.7% 4.5% 3.3% 4.1% 4.1% 3.4% 2.5% 3.0% 2.0% Brazil Colombia Mexico Chile Peru -0.6% Peru Colombia Chile Mexico Brazil Average 2018 Projected Average 2018 Projected Source: Research. International Monetary Found (IMF) & Central Bank of Peru (BCRP) 5

6 Credit Risk Profile A+ Peruvian Public Debt (% of GDP) BBB+ BBB+ BBB - Investment Grade: BBB- 48.5% Average debt of the General Government / GDP for countries with BBB+ rating for 2017 BB BB - B+ Chile Peru Mexico Colombia Bolivia Brazil Argentina 20% 23% 24% 25% 24% Source: Standard & Poor s Currency Depreciation Against USD 5% 0% -5% -10% -15% -20% -25% -30% -35% -40% -7.30% -9.06% % % % T18 Source: BCRP Chile Brazil Colombia Mexico Peru Source: Bloomberg 6

7 Performing Loans and Deposits (S/ Billion) Loans to Private Sector (% of GDP, 2016) CAGR L: D: 8.0% D: 8.8% 112% YOY 8.1% 62% YOY 9.5% 47% 36% 35% Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Chile Brasil Colombia Perú México Loans Deposits 1 Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP (SBS) / World Bank (WB) 1 7

8 Local Currency Loans & Deposits (% Total Loans & Deposits) Steady reduction of legal reserve requirements in PEN to support loan growth. From 20.1% to 5% as of Dec % 65% 60% 55% 50% 45% 54% % % 53% Higher legal reserve requirement in USD linked to targets to reduce loans in USD 2. 67% 68% 67% 67% % Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 1 Loans Deposits Exchange rate PEN/USD % % % Measures to promote de-dollarization Measures to support de-dollarization Higher marginal reserve requirement in USD, reached 70%. Currency Repos to convert liquidity in USD into PEN. Lower marginal reserve requirements to increase liquidity in USD. 1 Other obligations are excluded from deposits 2 Excluded operations higher than USD10MM and 3 years from June 2015 Source: SBS & BCRP 8

9 (March 2018) Financial system Banking system Other financial institutions Institution S/ Million Net loans Mar-18 1 Deposits Mar-18 Net Income Mar-18 Banks (16) 236, ,025 2,061 Banco de la Nación 8,669 22, Cajas Municipales (12) 18,336 19, Financieras (11) 10,437 6, Cajas Rurales (6) 1,394 1,174 1 Edpymes (9) 1, Leasing (1) COFIDE 4, Agrobanco % 10% 7% Loans Deposits 1 Net Income Banking System Other Financial Institutions 87% 90% 93% The 4 th largest player concentrate around 83% of the banks loans and deposits 1 Other obligations are excluded from deposits Source: SBS 9

10 02 About

11 and Subsidiaries are part of the Economic Group formed by Group and Breca: (Newco Peru S.A.C) BRESCIA (Holding S.A.) 50% 50% % 92.24% Comercializadora Corporativa S.A.C 0.009% Others 7.76% 100% 99.99% 99.99% 100% 100% 100% 100% Inmuebles y Recuperaciones S.A. Forum Comercializador a del Perú S.A. Forum Distribuidora del Perú S.A. 0.01% 0.01% Consumer Finance EDPYME Bolsa SAB S.A Asset Management SAF S.A. Sociedad Titulizadora S.A. 11

12 (June 2018) Appropriate balance between developed and emerging markets that allows the Group to diversify its sources of income by providing a high degree of recurrence in its results Well diversified & self sufficient subsidiaries 1 Gross Income Emerging Markets 63% Developed Markets 37% South America 18% 1 Excludes Corporate activities. Leading franchises in Developed (Spain and EEUU) and Emerging Markets (South America, Mexico and Turkey). Source: Group 12

13 Self-sufficient subsidiaries from a liquidity point of view, with robust supervision and control by parent company Retail profile of Group balance sheet with limited dependence on wholesale funding Parent and subsidiaries proven ability to access the wholesale funding markets (medium & long term) on a regular basis Ample high quality collateral available, compliant with regulatory liquidity requirements at a Group and Subsidiary level No liquidity transfers between the parent and subsidiaries or among subsidiaries No liquidity transfers between the parent and subsidiaries, or among subsidiaries 13

14 (June 2018) Assets ( millions) ROE ROA 689, % 0.95% Cost Control (YoY, %) Administrative Expenses +2.9% Efficiency Ratio 49.2% Net Income ( millions) 2,045 30% 2,649 Digital Strategy (YoY, %) +43% +26% Mobile customers Digital customers Great Asset Quality NPL Cost of Risk Coverage Ratio Jun-17 Jun % 0.82% 71% Strong Capital & Liquidity Ratios Global Capital CET1 15.5% Liquidity Coverage Ratio 11.1% > 127% 14

15 03 Financial Highlights

16 (June 2018) Assets (S/ million) ROE 73, % Cost Control Efficiency Ratio 38.35% Administrative Expenses % ROA 1.92% (YoY, %) Net Income (S/ million) 645 9% 703 Digital Strategy (YoY, %) + 98% + 58% Active Mobile Customers Active Digital Customers Great Asset Quality NPL Cost of Risk Jun-17 Jun % 1.23% Strong Capital & Liquidity Ratios Global Capital CET % 10.55% Coverage Ratio 159.7% Loan-to-Deposit 108% 1 Administrative Expenses include depreciation and amortization. 15

17 Distribution network 1 One of the largest in the country Evolution in transactions per channel 14,006 points of service More than 5.5 million customers 14,064 14,002 14, % 32% Branches 11,387 Ranking Market Share 15% 1% 26% ATM Express Agent 7,459 9,231 11,902 11,721 11,721 1st 19.3% 8% 2% 6% 2% Internet Banking 5,488 1,649 1,825 1,840 1,961 1, rd 2nd 27.0% 15.6% June % 31% Mobile Banking Others 2 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Express agents ATM Branches Source: Branches & ATMs from SBS, ATMS from ASBANC. Transactions per channel from. 16

18 Creando Oportunidades Digital Sales Units (thousands) 413% 217% % Share Units 1 Main Growth Drivers 1 Product digitalization New products for business clients: leasing, commercial loans, trade loans. New sale channels: credit cards hiring by mobile banking and internet banking. Opening accounts by mobile banking and insurances hiring by ATMs. 54 Digital Sales by Product (June 2018) 1 Digital sales between total sales (consider only products that are currently sold by digital channels). Source: 171 2S16 2S17 2S18 4% 4% 2% Insurance 14% Consumer Loans % Credit Cards Saving Accounts Mutual Funds New Developments Credit card sale by web forms with risk evaluation fully online for clients and no clients. Clients digitalization and branches incentives with a better post-lead management Salesforce objectives based on digitalization, incentive programs, tracking dashboards Investment in digital marketing and media optimization Improvement of digital sales processes through AB tests 19

19 (S/ Million, %) Performing loans Deposits 1 CAGR 5.5% YOY YOY 8.4% CAGR 7.1% YOY 0.6% 42, ,191 2,254 47, ,548 2,419 10,391 49,714 49,432 50, ,723 1,848 1,941 2,558 2,832 3,330 10,917 11,638 12,061 39,607 2,788 47,287 3,046 48,714 48,646 3,168 3,267 46,761 3,292 16,011 16,763 14,732 12,825 9,562 1,201 1,134 1,112 1,196 12,607 1,194 9,016 9,816 10,128 9,951 9,821 8,633 9,505 9,093 8,678 8,664 24,212 28,230 28,784 30,647 30,644 10,125 12,803 14,070 13,280 13,435 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Corporate Large enterprise Middle enterprise SME Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Demand + Saving Term CTS Mortgage Consumer Credit card Microfinance 1 Other obligations are excluded from deposits Source: SBS 20

20 (S/ Million, %) Retail Loans 8.4% -10 bps 15, bps 13.1% 71 bps 16,318 17,332 46,588 49,432 50, % 20.01% 20.22% Jun-17 Dec-17 Jun-18 Loans Market share Banking System 85,728 YOY Variation 9.1% 20.74% 21.06% 20.63% Business Loans 6.1% -71 bps 31, bps 33,114 33,177 Jun-17 Dec-17 Jun-18 Loans Market share Sistema bancario 244,784 Variación Interanual 9.0% 21.57% 21.61% 20.86% Jun-17 Dec-17 Jun-18 Loans Market share Banking System 159,056 YOY Variation 9.8% 21

21 SME % 13% % 11% Consumer 25% 24% 19% 18% 20% 20% Bank 1 Bank 3 Bank 4 Credit card 24% 23% 22% 24% 19% 14% 14% 16% 8% 26% +97 9% % 29% 36% 28% Middle enterprise 38% 16% 15% 15% 16% Bank 1 Bank 3 Bank 4 Falabella 4% Bank 1 Bank 3 Bank 4 9% Bank 1 Bank 3 Bank 4 5% 8% 22% % 34% Large enterprise 35% 18% 15% 11% 12% % 29% 32% 32% Mortgage 15% 15% 13% 14% Bank 1 Bank 3 Bank 4 YoY changes in basis points. 23% 21% Bank 1 Bank 3 Bank 4 Bank 1 Bank 3 Bank 4 Source: ASBANC % Corporate 38% 22% 24% 7% 8%

22 (June 2018) Loans by economic sector Loans breakdown 0.2% 0.2% 0.1% 1.4% 3.0% 3.7% 3.8% 5.5% 5.7% 7.4% 6.6% 10.6% 21.9% 23.5% 23.9% 17.0% 3.7% 2.3% 2.4% 5.3% Microfinance Credit card Consumer Mortgage Construction, 3% Financial Services, 3% Electricity and water, 3% Agriculture and livestock, 4% Mining, 4% Transport, storage and communications, 8% Real estate, 9% Others, 13% Manufacturing, 27% Commerce, 26% 24.2% 20.1% 19.4% 15.0% SME Concentration Risk 20.7% 17.6% 17.2% 16.7% Middle enterprise Large enterprise Top 20 Clients 12.59% 20.9% 26.9% 26.6% 26.7% Corporate Dec - 13 Dec - 17 Jun-18 Jun-18 Banking System Others 87.41% Source: ASBANC 23

23 (S/ Million, %) 0.6% -150 bps Retail Deposits 18, % -45 bps 20,029 20,337 46,501 48,646 46, % 20.03% 20.07% Jun-17 Dec-17 Jun-18 Deposits Market share Banking System 101, % 21.21% 20.12% Business Deposits YOY Variation 11.4% -5.0% -227 bps 27,828 28,618 26,424 Jun-17 Dic-17 Jun-18 Deposits Market share 22.44% 22.12% 20.17% Banking System 232,362 YOY Variation 8.1% Jun-17 Dec-17 Jun-18 Deposits Market share Banking System 131,018 Source: SBS YOY Variation 5.6% 24

24 % 40% Retail Deposits Demand 48% 50% 8% 7% 2% 1% % 22% Business Deposits Demand 38% 35% 17% 19% 11% 13% 21% 20% Bank 1 Bank 3 Bank 4 45% 45% Save 14% 14% 14% 14% Bank 1 Bank 3 Bank % 15% 16% 23% 14% 13% 13% 13% 21% % Bank 1 Bank 3 Bank 4 45% 45% Term CTS 8% 9% 10% 11% % 43% Bank 1 Bank 3 Bank 4 Save 19% 16% 14% 12% 17% Bank 1 Bank 3 Bank % 24% 15% Term 22% 18% 21% 11% 20% 10% Bank 1 Bank 3 Bank 4 Bank 1 Bank 3 Bank 4 YoY changes in basis points. Source: ASBANC 25

25 Local Currency Foreign Currency 6% 7% +25% 11% 8% Others 2% +29% 4% 5% 6% 17% 16% 17% 19% Equity 37% 29% 26% 27% 8% 7% 5% 8% 8% 9% 4% 3% 4% 5% 5% 23% Wholesale funding REPOS 5% 4% 4% 14% 16% 3% 21% 22% 18% 24% CTS 20% 42% 35% 37% 32% Term Demand + Saving 35% 49% 49% 42% Dec-13 Dec-17 Jun-18 Jun-18 Dec-13 Dec-17 Jun-18 Jun-18 CONTINENTAL (PEN) Banking System CONTINENTAL (USD) Banking System Source: SBS & ASBANC 26

26 Loan-To-Deposit by currency 145% 135% 124% 115% 106% 110% 101% 102% 102% 108% 97% 88% 86% 63% 69% 1 Loan-To-Deposit - Peer group 120% 118% 116% 114% 114% 106% 105% 104% 104% 101% 102% 102% 102% 95% 95% 89% 114% 106% 108% 102% Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 PEN USD Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Bank 1 Bank 3 Bank 4 Domestic Currency Performing Loans (% Total Loans) 67% 68% 67% 67% 66% 67% 65% 66% 57% 57% Domestic Currency Deposits (% Total Deposits) 60% 53% 52% 57% 53% 47% 51% 46% 58% 58% Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Banking System Average 1 Other obligations are excluded from deposit. Source: SBS Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Banking System Average 27

27 (S/ Million) Jun-18 Jun-17 % Gross Financial Margin 1,493 1, Provisions for direct loans (351) (325) 8.1 Net Financial Margin 1,142 1, Income from financial services Expenses from financial services (166) (146) 13.6 Gain / Loss From Financial Operations (ROF) Operating Margin 1,830 1, Administrative expenses (760) (732) 3.8 Depreciation and amortization (72) (59) 22.6 Net Operating Margin Asset valuation and other provisions (5) (36) Other Income and Expenses (11) (32) Profit / Loss Before Income Tax Income tax (279) (236) 18.5 Net Profit % Net Profit 1S17 Gross Financial Margin 1 Includes administrative expenses, depreciation and amortization Provisions for direct loans Net Financial Services ROF Administrative 1 Expenses Other Results 2 Income tax Net Profit 1S18 2 Includes asset valuation, other provisions, and other income and expenses Source: ASBANC 28

28 (S/ Million,%) 7.41% 6.10% 4.35% 6.55% 6.35% 6.05% 6.07% 5.47% 5.47% 5.31% 5.25% 3.61% 3.45% 3.49% 3.30% 8.00% 6.00% 4.00% 2.00% 0.00% 3,741 4,052 4,506 4,380 4, % -4.00% (1,055) (1,346) (1,623) (1,510) (1,327) -6.00% -8.00% Dec-14 Dec-15 Dec-16 Dec-17 Jun % Financial Expenses Financial Income NIM NIM PEN NIM USD 1 1 NIM ratio: Gross financial margin for the last 12 months divided by average interest earning assets (interbank funds, investments, net loans). Source: SBS & ASBANC 29

29 Outstanding Asset quality (June 2018) NPL Ratio by Product and Segment (June 2018) Car-loan 5.55% % % % % % Credit Card Consumer Mortgage 1.79% 1.73% 1.89% Microfinance 2.01% 2.23% 2.17% 2.41% 2.68% 2.95% SME Middle enterprise 6.85% 8.42% Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Large enterprise Corporate 0.00% 1.95% NPL ratio Coverage ratio Source: SBS 31

30 Best Cost of Risk 1 vs. Peer Group 2.80% 2.92% 3.05% 3.03% YOY (bps) +3 NPL Ratio & Coverage Ratio (June 2018) Average Banking System % % % % % 2.03% 2.06% 1.88% 1.86% 2.20% 1.70% 1.74% 2.11% 1.81% 1.58% 1.32% 1.28% 1.42% 1.26% 1.27% 1.23% Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 Bank 1 Bank 3 Bank Maintaining High Levels of Voluntary Provisions (S/ Million) 3.26% 3.10% 2.95% 2.90% 2.72% Bank 4 Bank 1 Bank 3 NPL ratio Coverage ratio 1 Risk Cost: Provisions for the last 12 months between average loans from the last 12 months. Source: SBS 3,692 3, % 3,258 Bank 1 3,331 2, , % 2, ,151 1,728 1, ,495 1, % 11.7% 1,631 1,855 1,117 1,156 Jun-17 Jun-18 Jun-17 Jun-18 Jun-17 Jun-18 Jun-17 Jun-18 Bank 3 Required Voluntary Bank 4 32

31 Efficiency Ratio (June 2018) YOY (bps) Administrative Expenses 1 (S/ Million, %) Bank % -40 1,667 1,677 Bank % -52 Bank % % Banking System Average Number of Employees (June 2018) 41.32% 0.6% 5.2% -2.4% 4.4% Jun-17 Jun-18 Jun-17 Jun-18 Jun-17 Jun-18 Jun-17 Jun-18 21,551 Market Share 9.5% 6,808 5,993 5,969 Bank 1 Bank 4 Bank 3 1 Includes Amortization and Depreciation Source: SBS Bank 1 Bank 4 Bank 3 30

32 Net Profit (S/ Million, %) Return on Equity ROE (June 2018) Bank % YOY (bps) +81 1,653 Bank % -86 1, % -35 Bank % -55 Banking System Average 18.70% Return on Assets ROA (June 2018) Bank % YOY (bps) % 9.0% 9.4% 28.6% Bank % +24 Bank % +6 Jun-17 Jun-18 Jun-17 Jun-18 Jun-17 Jun-18 Jun-17 Jun-18 Bank 1 Bank 3 Bank % Banking System Average 2.19% +18 Source: SBS 33

33 Regulatory capital & RWA (S/ Million) Capital Ratios 10,000 8,000 6,000 53,495 7,371 2,139 61,682 63,146 63,012 64,440 9,528 9,001 8,947 8,209 2,205 2,182 2,115 2,247 60,000 50,000 40,000 30, % 4.00% 14.79% 14.25% 14.20% 13.31% Total Capital 3.42% Requirement 3.46% 3.36% 12.16% 3.64% 4,000 2,000 5,232 5,962 6,819 6,832 7,324 20,000 10, % 9.67% (CE T1 (CE 8.69%) (CE T1 T1 8.75%) 8.32%) 10.80% 10.84% 11.37% (CET %) - Dec-14 Dec-15 Dec-16 Dec-17 Jun-18-10,000 Dec-14 Dec-15 Dec-16 Dec-17 Jun-18 TIER I TIER 2 RWA TIER I TIER 2 Source: SBS 34

34 Global capital ratio (YTD, %) 14.20% -27 bps -2 bps +11 bps -1 bps +2 bps +77 bps 14.79% Dec-17 RWA Exchange rate Reserves Detractions Provision Capitalization of Profits Jun-18 Common Equity Tier I (YTD, %) +77 bps 10.55% 9.92% - 19 bps - 4 bps +11 bps - 1 bps Dec-17 RWA Exchange rate Reserves Detractions Capitalization of profits Jun-18 Source: 35

35 04 Ratings

36 Rating agencies have granted the best international and local ratings: Instrument Fitch Ratings Standard & Poors Foreign currency long term issuances BBB+ BBB+ Foreign currency short term issuances F2 A-2 Local currency long term issuances BBB+ BBB+ Local currency short term issuances F2 A-2 Outlook Stable Stable Instrument Apoyo & Asociados Equilibrium Negotiable Certificate of Deposits (CD) CP-1+ (pe) EQL 1+.pe p1+ Short term deposits CP-1+ (pe) EQL 1+.pe Categoría I Term deposits > 1 year AAA (pe) AAA.pe paaa Corporate bonds AAA (pe) AAA.pe paaa Subordinated bonds AA+ (pe) AA+.pe paa+ Leasing bonds AAA (pe) AAA.pe paaa Common shares 1a (pe) 1a Clase.pe PC N1 Issuer rating A+ A+ A+ PCR 37

37 05 Social Responsibility and Awards

38 SOCIAL RESPONSIBILITY AWARDS Social, Economical and Environmental Responsibility Report Most Recommended Bank 2017 Reading Program: Leer es estar adelante Best Digital Bank 2017 is part of the Best Corporate Governance Principle s Index of companies. Source: 39

39 Appendix Debt Issuances

40 International Local Issued Amount (m) Bond Issue Date Call Date Due Date Currency ISIN Corporate Ago-12 - Ago-22 USD 500, % US05537GAA31-USP16260AA28 Subordinated Set-14 Set-24 Set-29 USD 300, % US05537GAD79-USP16236AG98 Subordinated May-07 May-22 May-27 USD 20, % PEP11600D029 Subordinated Jun-07 - Jun-32 PEN 55, % PEP11600D037 Subordinated Nov-07 - Nov-32 PEN 50, % PEP11600D052 Subordinated Feb-08 - Feb-28 USD 20, % PEP11600D060 Corporate May-08 - May-18 PEN 60, % PEP11600M137 Subordinated Jul-08 - Jul-23 PEN 45, % PEP11600D078 Subordinated Set-08 - Set-23 PEN 50, % PEP11600D086 Subordinated Dec-08 - Dec-33 PEN 30, % PEP11600D094 Corporate Ago-10 - Ago-20 PEN 40, % PEP11600M145 Corporate Ago-10 - Ago-20 PEN 80, % PEP11600M152 Corporate Dec-11 - Dec-26 PEN 150, % PEP11600M186 Corporate Apr-12 - Apr-19 PEN 200, % PEP11600M194 Subordinated Oct-13 Oct-23 Oct-28 USD 45, % PEP11600D102 Corporate Apr-16 - Apr-19 PEN 150, % PEP11600M210 Corporate Apr-16 - Apr-19 PEN 100, % PEP11600M228 Corporate Jun-16 - Jun-21 PEN 150, % PEP11600M236 BAF Oct-16 - Oct-19 PEN 205, % PEP11600K057 BAF Jan-17 - Jan-20 PEN 200, % PEP11600K065 Corporate Nov-17 - Nov-20 PEN 350, % PEP11600M244 BAF Dec-17 - Dec-20 PEN 158, % PEP11600K073 Corporate Jun-18 - Jun-21 PEN 132, % PEP11600M251 Corporate Jun-18 - Jun-21 PEN 69, % PEP11600M269 Corporate Jul-18 - Jul-23 PEN 100, % PEP11600M277 Coupon Rate International 49% Local 51% Total Debt S/ Millions Local 2,693 International 2,621 Total 5,315 Source: 41

41 CONTINENTAL Investors Report Second Quarter 2018