Itaú CorpBanca Conference Call

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1 Itaú CorpBanca Conference Call

Itaú CorpBanca Representatives Today s Presenters Milton Maluhy Chief Executive Officer Mr. Maluhy joined Itaú Unibanco in 2002 and became a partner in 2010. Previously, he was CEO of Rede S.A.

2 Itaú CorpBanca Representatives Today s Presenters Milton Maluhy Chief Executive Officer Mr. Maluhy joined Itaú Unibanco in 2002 and became a partner in Previously, he was CEO of Rede S.A. (Redecard), a card processing subsidiary and Executive Director at Itaú Unibanco, responsible for the management of the credit card segment and retail store alliances. Previously, he worked at Itaú BBA, holding leadership positions in areas such as international, products, operations, treasury, and trading desk. Prior to joining the bank, he worked at J.P. Morgan Crédit Commercial de France (CCF Brasil), and Lloyds TSB. Mr. Maluhy holds a B.A. in Business Administration from Fundação Armando Álvares Penteado FAAP. Gabriel Moura Chief Financial Officer Mr. Moura joined Itaú Unibanco in 2000 and became an associate partner in He has more than 20 years of experience in asset management, risk management, finance and M&A. Mr. Moura held the position of Chief Investment Officer for Itaú s pension funds, endowments and insurance businesses. He was also Chief Risk Officer for Wealth Management as well as member of the Board of Directors of different companies in Brazil and abroad. Prior to joining the bank, he worked at BBVA Asset Management and Itaú Bankers Trust. Mr. Moura holds a M.B.A. from the Wharton School at the University of Pennsylvania, USA. Claudia Labbé Head of Investor Relations Ms. Labbé has held the position of Head of Investor Relations in CorpBanca since 2011 and has more than 20 years of experience in the financial industry. Prior to joining CorpBanca, she was Head of Financial Institutions at Feller Rate, a former local affiliate of Standard & Poor s. Itaú CorpBanca 1

3 1 Itaú Unibanco Holding

4 Itaú Unibanco Highlights (as of 31/12/2015) Itaú Unibanco has a US$ 55 billion¹ Market Capitalization, with shares listed in São Paulo, New York and Buenos Aires Stock Markets The Bank is present in 19 countries, in the Americas, Europe and Asia, with over 90 thousand employees, 5 thousand branches and 26 thousand ATMs More than 60 million clients Regional Presence (Itaú + CorpBanca pro forma) Peru 2 Rep. Office Paraguay Branches and CSBs 3 : 37 Employees: 799 Assets: US$ 3.1 Billion Chile Branches and CSBs: 223 Employees: 6.4 Thousand Assets: US$ 33.4 Billion Itaú in Latin America* 550 branches 13.7 thousand employees US$ 55 billion in assets *As of Dec.31, excluding Brazil Colombia 1 Branches and CSBs: 177 Employees: 3.7 Thousand Assets: US$ 10.8 Billion Uruguay (includes OCA) Branches and CSBs: 24 OCA service sites: 36 Employees: 1.2 Thousand Assets: US$ 4.4 Billion Argentina Branches and CSBs: 89 Employees: 1.6 Thousand Assets: US$ 2.5 Billion 1 As of Apr/15/2016. Calculated based on the closing price of the ADR in the NYSE multiplied by the number of outstanding shares. 1 Includes information of the operations of CorpBanca in Panamá; 2 Rep. office in Peru is part of Itaú CorpBanca; 3 CSBs: Client Service Branches (Puestos de Atención) Source: Itaú Unibanco: Financial Statements. CorpBanca: Superintendency of Banks and Financial Institutions (SBIF) and Financial Statements Itaú CorpBanca 3

5 Loans¹ Assets¹ Latam within Itaú Unibanco BEFORE AFTER US$ Billion Breakdown by Country Total Latam Assets US$ 55 Bn Itaú ARG 5% % 15% Itaú Corp CHL Itaú Corp COL 20% 62% 82% Itaú PRY 6% Itaú URY 8% Itaú ARG 5% Total Latam Loans US$ 38 Bn % % Itaú Corp CHL Itaú Corp COL 21% 64% 85% Itaú PRY 5% Itaú Latam w/o CorpBanca Itaú Latam with CorpBanca Brazil and Other Countries Itaú URY 5% 1 Considering a BRL per 1.00 USD conversion rate, as of Dec/31/2015. Source: Itaú Unibanco: Financial Statements. CorpBanca: Superintendency of Banks and Financial Institutions (SBIF) and Financial Statements as of December 31, Itaú CorpBanca 4

6 2 Itaú CorpBanca

7 US$BN Shareholders Structure after Merger Shareholders - % Total share capital April, rd largest Market Cap among Peers April 14, 2016 ITAÚ CORPBANCA Total shares: 512,406,760,091(100%) #3 Itaú Unibanco Saieh Family 1 IFC Others % 33.13% 3.32% 29.97% 1.42 ADRs holders and Foreign investors 14.08% Securities Brokerage 6.74% Santo Domingo Group 1.92% Insurance Companies 1.58% AFPs 0.32% Other minority shareholders 5.33% PEER-A PEER-B ITAUCORP PEER-C PEER-D Note: Figures were converted at an exchange rate of Ch$670.80/US$1 (as of April 14, 2016). Source: Santiago Stock Exchange. 1 Includes 802,125,023 shares owned by Saga that are under custody. Source: Itaú CorpBanca. Itaú CorpBanca 6

8 Board of Directors Strong Corporate Governance Chairman Jorge Andrés Saieh Guzmán Vice Chairman Ricardo Villela Marino Candido Botelho Bracher Boris Buvinic Guerovich Boris Nicolás Abovic Wiegand Héctor Valdés Ruiz* Camilo Morales Riquelme Directors João Lucas Duchene* Fernando Concha Ureta* Alternate Directors Jorge Selume Zaror Fernando Aguad Dagach Gustavo Arriagada Morales* José Luis Mardones Santander* (*) Independent Director under Chilean corporate law. Itaú Unibanco and CorpGroup appoint the majority of the members of the board of directors Pursuant to the Shareholders Agreement, the Directors appointed by Itaú Unibanco and CorpGroup shall vote together as a single block according to Itaú Unibanco s recommendation Itaú CorpBanca 7

9 Senior Management Structure BOARD OF DIRECTORS Audit Committee CorpBanca Colombia CEO Jaime Munita Itaú CorpBanca Chief Executive Officer Milton Maluhy Comptroller José Manuel Mena Wholesale José Francisco Sánchez Retail Victor Orellana Treasury Pedro Silva Marketing & Products Rogério Braga CRO José Valencia CFO Gabriel Moura IT & Operations Luis Rodrigues Legal & Compliance Cristián Canales Human Resources Marcela Jiménez Itaú CorpBanca 8

10 Itaú CorpBanca at a glance Pro forma 1 Consolidated Financial and Operating Highlights Dec 31, 14 Dec 31, 15 Total Assets (US$BN) Total Loans 2 (US$BN) Total Deposits (US$BN) Equity attributable to shareholders 3 (US$BN) Net Income attributable to shareholders 4 (US$MN) Loan Loss Allowances / Total Loans 2.1% 2.2% Branches ATMs Headcount 9,895 10,016 4 th largest private bank by loans in Chile 5 th largest bank by loans in Colombia Pro forma Loan Portfolio Breakdown December 2015 Consumer 22% Mortgage 10% Commercial 68% Colombia 24% Chile 76% Mortgage 20% Consumer 8% Commercial 72% 1 Pro forma financials do not include merger effects; 2 Gross Loans; 3 Includes US$553 million of capital increase in Banco Itaú Chile; 4 For 2014 Net Income considers US$45 million of pre integration expenses and for 2015 it considers US$50 million of pre-integration expenses and US$30 million of the SBIF fine imposed to CorpBanca. Note: Figures expressed in USD were converted at CLP /USD (as of December 31, 2015); Source: CorpBanca and Banco Itaú Chile financials. Itaú CorpBanca 9

Peer-B Peer-A Peer-C ITAÚ-CORPBANCA* CorpBanca Peer-D Peer-E Itaú Others Peer-A Peer-B Peer-C Peer-D CorpBanca Peer-E Peer-F Peer-G Peer-H Peer-I Others Regional Platform Market Share by Loans in

11 Peer-B Peer-A Peer-C ITAÚ-CORPBANCA* CorpBanca Peer-D Peer-E Itaú Others Peer-A Peer-B Peer-C Peer-D CorpBanca Peer-E Peer-F Peer-G Peer-H Peer-I Others Regional Platform Market Share by Loans in Chile 1,2 Market Share by Loans in Colombia 1,3 #4 #5 18% 18% 15% 12% 7% 7% 6% 5% 10% 28% 23% 14% 11% 6% 5% 3% 3% 2% 2% 4% * Pro forma 1 Company management and filings with local regulatory authorities as of Pro forma rankings showing private banks only, based on gross loans as reported to the SBIF and SFC, excluding loans from CorpBanca Colombia. Including loans from Colombia, Itaú CorpBanca would have a loan market share of 15.2% in Chile. 3 Based on gross loans as reported to the SFC. Peer-A in Colombia includes aggregate gross loans for different banks of the same group. Itaú CorpBanca 10

12 Business Mix Loans breakdown by segment US$ MN as of December 31, 2015 Interest rate 2 (%) 100% = 1 Consumer 32,518 34,344 22,640 22, Avg Top Itaú CorpBanca 15.1 Current 7.5 Mortgage Top 3 interest rate w/ current mix 7.6 Current interest rates w/ Top 3 mix 8.2 Top Commercial Mix difference explains most of the Yield gap with the Top 3 Total Peer-A Peer-B Peer-C Note: Exchange rate CLP/710.32/USD (as of December 31, 2015). 1 Yearly average gross loans; 2 Loan interests by segments; Source: SBIF; CorpBanca; Team Analysis. Itaú CorpBanca 11

13 Funding Mix Funding Breakdown US$ MN as of December 31, 2015 Interest rate (%) 37,925 42,941 31,125 27, % = Avg Top 3 Itaú CorpBanca Checking accounts & Demand Deposits Current 3.5 Time Deposits Top 3 interest rate w/ current mix Current interest rate w/ Top 3mix Top Debt Issued Others Non-interest bearing liabilities are the main reason for the gap when compared to the top 3 players Total Peer-A Peer-B Peer-C Note: Exchange rate CLP/710.32/USD (as of December 31, 2015). Source: SBIF; CorpBanca; Team Analysis. Itaú CorpBanca 12

14 Pro forma Financials as of March 31, 2016 (US$ MN) Banco Itaú Chile 1 CorpBanca 1 consolidation PPA & IFRS effects Pro forma Assets Cash and deposits in banks 1,263 2, ,658 Derivative financial instruments 381 1, ,840 Loans Portfolio, net 10,132 21,222-31,353 Financial investments ,312 Intangible assets 79 1, ,450 Goodwill ,717 Customer relationship & Core deposits Others Other assets 724 1, ,559 Total Assets 13,248 31,577 1,346 46,171 Liabilities Deposits 7,193 18, ,978 Demand Deposits 1,476 6, ,862 Time Deposits 5,717 12, ,116 Derivative financial instruments 377 1, ,583 Debt issued 2,280 4, ,232 Deferred income taxes Other liabilities 1,479 4, ,854 Total Liabilities 11,465 29, ,009 Non controlling interest Total Shareholders Equity 1,783 1,721 1,233 4,737 Total Liabilities and Shareholders Equity 13,248 31,577 1,346 46,171 Note: Figures were converted at an exchange rate of CLP/USD (as of March 31, 2016). 1 Companies filings with local regulatory authorities as of March 31, Company pro forma balance sheet as of Itaú CorpBanca 13

15 Pro forma Capital Levels as of March 31, 2016 US$ BN* Merger effects 1.23 CorpBanca 1.72 BIC 1.78 Core Capital 1 Subord. Bond Minority Interest Goodwill Regulatory Capital 2 Note: Estimated by company management, based pro forma balance sheet as of March 31, Includes: US$552.99MN of capital increase in Banco Itaú Chile ( CLP / USD) Corresponding adjustments from merger effects of the business combination based on company pro forma balance sheet. 1 Core Capital = Tier I Capital = Capital Básico, according to SBIF BIS I definitions; 2 Regulatory Capital = Patrimonio efectivo, according to SBIF BIS I definitions * Figures were converted at an exchange rate of CLP/USD (as of March 31, 2016). Itaú CorpBanca 14

16 US$BN Significant Expected Improvement in Capital Position Itaú CorpBanca will have a larger capital base to support further growth Itaú CorpBanca will target a capital ratio based on the greater of 120% of the minimum regulatory capital requirement or the average regulatory capital ratio of the three largest private banks in Chile and Colombia. After the necessary earnings have been reserved to comply with this requirement, all excess cash earnings will be distributed to its shareholders Comparative Capital Levels & ratios and Itaú CorpBanca Pro forma Dec Mar * c) 9.5 Dec-15 Chilean Banking Ind. Avg: 12.6% Mar b) a) CorpBanca BIC Peer-A Peer-B Peer-C Itaú CorpBanca(e) CorpBanca BIC Peer-B Peer-A Peer-C Itaú CorpBanca (e) Tier I Capital (Core capital) 1 BIS Ratio (%) 2 * Pro forma estimated by company management, based on March 31, 2016 pro forma balance sheet, which includes: a) CorpBanca Tier I capital 1 as of March 31, b) Banco Itaú Chile (BIC) Tier I capital 1 as of March 31, 2016, including US$553MN of capital increase on March 22, 2016 ( CLP / USD). c) Corresponding adjustments from merger effects of the business combination based on pro forma balance sheet. 1 Tier I Capital = Basic Capital, according to SBIF BIS I definitions; 2 BIS ratio = Patrimonio efectivo / RWA, according to SBIF BIS I definitions Note: Figures converted to US dollars at a rate of CLP/USD (as of December 31, 2015) and CLP/USD (as of March 31, 2016), respectively. Itaú CorpBanca 15

17 Updated Synergies We estimate these synergies to be fully achieved in 3 years post-merger We also expect further funding cost improvements and substantial revenue synergies, which are not included in the cost synergies below We estimate total one-time integration costs of approximately US$85MN to occur during the first 3 years Description Low-End Pre-Tax Synergies 1 High-End Pre-Tax Synergies 1 1 Human Resources Relevant synergies related to optimization of organizational structures US$52MN US$63MN 2 Administration Savings derived from a reduction in administrative expenses Reduction of costs from services rendered by mutual service providers US$14MN US$17MN 3 Information Technology Relevant savings from scalable IT systems US$15MN US$18MN 4 Others Savings derived from enhanced branch network US$8MN US$9MN Indicative Total Fully Phased-in Pre-Tax Synergies Range 1 Denotes low-end and high-end fully phased-in pre-tax synergies from year 3 onward. Note: Figures converted to US dollars at a rate of CLP/USD. Source: Management estimates. US$88MN US$107MN Itaú CorpBanca 16

18 Transaction in Colombia Offer to Acquire Minority Stake in CorpBanca Colombia Itaú CorpBanca 100% Contemplated Structure in Colombia CorpGroup Helm Corporation CorpBanca Colombia Other Minorities 66.28% 12.36% 20.82% 0.54% Itaú BBA Colombia CorpBanca offered to acquire the 33.18% aggregate minority stakes in CorpBanca Colombia: CorpBanca and Helm Co. did not reach an agreement on the final terms and conditions of the proposed acquisition CorpGroup has agreed to sell shares in proposed transaction (12.36% ownership - US$330MN aggregate cash offer 1 2 ) Itaú CorpBanca will acquire Itaú BBA Colombia at a price equivalent to its book value This amount accrues interest of Libor + 2.7% per year from August 4, 2015 until the closing date 2 Transaction pending on approvals by regulators 3 Book value of Itaú BBA Colombia = COP BN as of December 31, 2015 (equivalent to US$102 million at an exchange rate of COP3,135.17/US$1) Itaú CorpBanca 17

19 Going Forward The legal name of the merged entity is Itaú CorpBanca, notwithstanding the commercial brand is going to be Itaú The merged entity will benefit from stronger balance sheet structure and capital ratios to support growth In following quarters we will deliver 1. Legal Day One and systems integration 2. Filing first combined financial statements on May 10, 2016 with SBIF 3. Brand and branches integration completed by December 2016 Our ambition is to be among the 3 largest Banks in Chile in terms of total loans Itaú CorpBanca 18

20 Thank You 19

21 Cautionary Note Certain statements in this Presentation may be considered as forward-looking statements. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook. These forward-looking statements include, but are not limited to, statements regarding expected benefits and synergies from the recent merger of Banco Itaú Chile with and into CorpBanca, the integration process of both banks, the expected timing of completion of the transaction, anticipated future financial and operating performance and results, including estimates for growth, as well as risks and benefits of changes in the laws of the countries we operate, including the Tax Reform in Chile. These statements are based on the current expectations of Itaú CorpBanca s management. There are risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. For example, (1) problems that may arise in successfully integrating the businesses of Banco Itaú Chile and CorpBanca, which may result in the combined company not operating as effectively and efficiently as expected; (2) the combined company may be unable to achieve cost-cutting synergies or it may take longer than expected to achieve those synergies; (3) the credit ratings of the combined company or its subsidiaries may be different from what Itaú CorpBanca or its controlling shareholders expect; (4) the business of Itaú CorpBanca may suffer as a result of uncertainty surrounding the merger; (5) the industry may be subject to future regulatory or legislative actions that could adversely affect Itaú CorpBanca; and (6) Itaú CorpBanca may be adversely affected by other economic, business, and/or competitive factors. Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to Itaú CorpBanca s management. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. More information on potential factors that could affect Itaú CorpBanca s financial results is included from time to time in the Risk Factors section of Itaú CorpBanca s (formerly CorpBanca) Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with the SEC. Furthermore, any forward-looking statement contained in this Presentation speaks only as of the date hereof and Itaú CorpBanca does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this Presentation are expressly qualified by this cautionary statement. Itaú CorpBanca 20

Itaú CorpBanca 3 rd Quarter 2016 Earnings Review Conference Call

Itaú CorpBanca 3 rd Quarter 2016 Earnings Review Conference Call Gabriel Moura Chief Financial Officer Claudia Labbé Head of Investor Relations Disclaimers Itaú CorpBanca is the entity resulting from the