INVESTORS REPORT THIRD QUARTER, 2017 1 of 26
COSTA RICA: ECONOMIC ACTIVITY IMAE (1) (QoQ variation annualized, %) 8,0 Balance of Payments (last year, million USD) 4,000 7,0 6,77 3,000 6,0 5,83 2,000 5,0 5,53 1,000 4,0 3,0 2,0 2,54 1,93 3,97 3,19 3,09 2,83 0-1,000 1,0 1,67-2,000 0,0 I-2016 II-2016 III-2016 IV-2016 I-2017-3,000 I-2016 II-2016 III-2016 IV-2016 Total Ex ZF Current account Goods an services Financial account FDI (1) IMAE stands for Índice Mensual de Actividad Económica, it is a gauge of economic activity computed by the Central Bank 2 of 26
COSTA RICA: INFLATION AND UNEMPLOYMENT Consumer Price index (CPI) Unemployment 2.5 9.70 9.50 2.0 1.5 1.65 1.43 9.10 1.0 8.50 8.50 0.5 0.0 III-2016 IV-2016 I-2017 II-2017 III-2017 QoQ (annualized) YoY III-2016 IV-2016 I-2017 II-2017 III-2017 Source: Banco Central de Costa Rica e Instituto Nacional de Estadística y Censos (INEC) 3 of 26
Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Juntos somos COSTA RICA: FISCAL PERFORMANCE Central government: revenues and expenditures ( last year, million CRC) Central Government Deficit / GDP (%) 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0-10,000,000 6.0 5.0 4.5 4.0 3.0 2.0 1.0 0.0 Sep-16 Central Government Debt/ GDP (%) 40.0 34.0 30.0 37.6 5.3 Sep-17-20,000,000 20.0 10.0 9.8 10.3 CG revenues CG expenditures Result 0.0 Sep-16 Internal Debt External Debt Sep-17 Source: Costa Rica Ministry of Finance 4 of 26
COSTA RICA: INTEREST AND EXCHANGE RATES Tasa básica pasiva Average exchange rate USDCRC (Monex) 6.5 580.0 575.0 572.03 6.0 5.5 5.0 4.5 5.85 570.0 565.0 560.0 555.0 550.0 545.0 540.0 535.0 4.0 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Source: Banco Central de Costa Rica 530.0 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 5 of 26
BANK SYSTEM: CREDIT (GROSS) Quarterly growth (3Q 2017) Year growth (3Q 2017) System 1.1 System 9.8 Private banks 1.0 Private banks 11.5 Government banks (exbncr) -5.6 Government banks (exbncr)-3.1 Special purpose 5.7 Special purpose 12.9 Cooperatives and mutuals 4.5 Cooperatives and mutuals 9.6 Other 2.4 Other 24.6 BNCR 1.6 BNCR 12.6 6 of 26
BANK SYSTEM: DEPOSITS Quarterly growth (2Q 2017) Year growth (2Q 2017) System 1.5 System 12.2 Private banks 2.6 Private banks 15.9 Government banks (exbncr) -3.2 Government banks (exbncr) 5.1 Special purpose 1.1 Special purpose 12.9 Cooperatives and mutuals 2.5 Cooperatives and mutuals 10.0 Other 4.6 Other 18.3 BNCR 3.4 BNCR 10.0 7 of 26
CORPORATE GOVERNANCE Governance Structure Independent Board of Directors Board of Directors Chairman Ana Isabel Solano Vice-chairman Víctor Hugo Carranza Salazar Secretary Luis Pal Hagedüs Directors Xinia Herrera Durán Olman Briceño Fallas Jorge Mendez Zamora Jeannette Ruiz Delgado Internal and external independent auditors 100% independent Appointed by the Counsel of Ministers. 7-year term. Every 4 years, 3 or 4 members change. Chief Executive Officer Juan Carlos Corrales Salas Officers and Support Committees 8 of 26
CORPORATE GOVERNANCE (CONT.) BANCO NACIONAL DE COSTA RICA Assets (Sept-17) BN Valores (Brokerage) BN Vital (Pensions) BN SFl (Mutual funds) BN Seguros (Insurance brokerage) BN Vital; 0.1 BN SAFI; 0.1 BN Seguros; 0.0 BICSA; 12.3 Equity (Sept-17) BN Valores; 0.7 BNCR; 86.7 BICSA; 16.2 BN Vital; 0.8 BN SAFI; 0.9 BN Seguros; 0.2 BNCR owns a 49% stake in BICSA BN Valores; 2.0 Total assets and equity of BNCR Group amount CRC BNCR; 79.9 8,087,945 million and equity CRC 642,073 million (excluding BICSA) 9 of 26
BNCR: INVESTMENT HIGHLIGHTS (3Q 2017) Profitability Net income CRC 8,423 million 38.0% QoQ 51.2% YoY ROAE 5.54% 358 b.p. QoQ 682 YoY ROAA 0.49% 35 b.p. QoQ 3 b.p. YoY Credit Loan portfolio CRC 4,397,471 million 4.50% QoQ 13.43% YoY Provisions CRC 12,331 million 76.39% QoQ 23.29% YoY Cost of risk (1) 1.15% 69.5 b.p. QoQ 9.4 b.p. YoY NII and NIM Net Financial income CRC 50,868 million 13.57% QoQ 0.64 % YoY NIM 4.42% 39 b.p. QoQ 33 b.p. YoY Net NIM (2) 3.93% 79 b.p. QoQ 29 b.p. YoY Efficiency Efficiency ratio (3) 67.3% 275 b.p. QoQ 188 b.p. YoY Capital ISP (4) 13.58% 34 b.p. QoQ 14 p.b. YoY (1) Cost of risk: annualized provisions for loan loses on average gross loans. (2) After allowances for impairment and recovery of assets and decrease in allowances (3) Administrative expenditure on gross operational income. (4) Regulatory Capital Adequacy Ratio 10 of 26
BNCR (STAND-ALONE): BALANCE SHEET BREAKDOWN Assets (million CRC) 6,257,435 7,036,581 6,984,996 Liabilities and Equity (million CRC) 6257,435 7,036,581 6,984,996 62.4 63.4 62.5 17.3 13.9 14.7 15.2 18.5 18.8 III-2016 II-2017 III-2017 Cash and due frombanks Investments Loan portfolio Others assets 66.7 65.5 67.0 11.1 14.9 14.4 III-2016 II-2017 III-2017 Equity Others Obligations with entities Dep. público Foreign currency; 39.5 Foreign currency; 40.3 CRC; 60.5 CRC; 59.7 11 of 26
BNCR (STAND-ALONE): LOAN PORFOLIO Loan portfolio gross (million CRC) 4,600,000 4,400,000 4,200,000 4,000,000 3,969,562 4,116,451 4,207,916 4,397,471 4,469,930 3,800,000 3,600,000 III-2016 IV-2016 I-2017 II-2017 III-2017 Portfolio composition (%) Loan portfolio by currency (%) 17.0 17.1 16.9 16.8 16.4 39.6 38.4 37.6 36.8 35.6 39.5 30.3 39.8 30.4 39.6 30.7 40.1 30.2 40.6 30.4 60.4 61.6 62.4 63.2 64.4 III-2016 IV-2016 I-2017 II-2017 III-2017 III-2016 IV-2016 I-2017 II-2017 III-2017 Corporate Retail Enterprises Development CRC Foreign currency 12 of 26
BNCR (STAND-ALONE): LOAN PORTFOLIO Contribution to portfolio growth QoQ (million CRC) 4,397,471 24,149 51,916 87,734 71,378 15,539 2,789 4,469,930 II-2017 Consumer Mortgages Corporate Enterprises Development Exchange rate III-2017 Contribution to portfolio growth YoY (million CRC) 3,969,562 117,911 151,122 19,427 110,206 56,204 45,499 4,469,930 III-2016 Consumer Mortgages Corporate Enterprises Development Exchange rate III-2017 13 of 26
BNCR (STAND-ALONE): LOAN PORTFOLIO BY SEGMENT III-2017 28.0 13.9 16.5 29.7 9.2 2.7 II-2017 30.4 12.6 16.4 29.0 8.8 2.7 III-2016 30.4 12.6 17.1 29.5 7.5 2.9 Corporate Enterprises Development Mortgages Consumer Credit cards Loans million CRC As of the end of 2Q 2016 1Q 2017 2Q 2017 % Part. 2Q 2017 % nominal change QoQ YoY % real change QoQ YoY Corporate 1,175,692 1,272,421 1,338,974 30.4 5.2 13.9 4.8 11.9 Development Enterprises SME Consumer Mortgages Credit cards Consumer 508,679 660,193 1,148,391 106,960 276,837 541,917 706,642 1,223,958 116,999 345,978 551,997 723,308 1,276,075 119,814 387,302 Total 3,876,752 4,207,916 4,397,471 100 4.5 13.4 4.0 11.5 12.6 16.4 29.0 2.7 8.8 1.9 2.4 4.3 2.4 11.9 8.5 9.6 11.1 12.0 39.9 1.4 1.9 3.8 1.9 11.4 6.6 7.6 9.2 10.1 37.5 14 of 26
BNCR (STAND-ALONE): LOAN PORTFOLIO BY SEGMENT Corporate Enterprises Development Mortgages Consumer 16.4 15.9 20.2 17.2 21.6 13.6 61.8 60.9 69.3 62.7 83.6 84.1 79.8 82.8 78.4 86.4 38.2 39.1 30.7 37.3 Credit cards 16. 4 83. 6 16. 2 83. 8 III-2016 III-2017 III-2016 III-2017 III-2016 III-2017 III-2016 III-2017 III-2016 III-2017 III-2016 III-2017 CRC USD CRC USD CRC USD CRC USD CRC USD CRC USD Loans Million CRC Local currency (million CRC) 2Q 2016 1Q 2017 2Q 2017 QoQ (%) YoY (%) Foreign currency (million CRC) 2Q 2016 1Q 2017 2Q 2017 QoQ (%) YoY (%) Corporate 435,866 485,045 524,206 7.5 20.3 739,826 787,376 814,769 1.5 5.5 Development Enterprises SME Consumer Mortgages Credit cards Consumer 146,552 551,181 908,835 89,625 211,148 193,551 593,830 999,997 97,912 289,819 205,963 608,110 1,056,808 100,383 334,512 6.0 2.3 5.4 2.5 13.4 40.5 10.3 16.3 12.0 58.4 Total 2,343,207 2,660,155 2,829,982 6.4 20.8 1,533,545 1,547,761 1,567,489-0.7-2.1 362,127 109,011 239,557 17,335 65,690 348,366 112,812 223,961 19,087 56,159 346,034 115,198 219,267 19,431 52,790-2.6 0.2-4.1-0.1-8.4-8.4 1.3-12.3 7.4-23.0 15 of 26
BNCR (STAND-ALONE): ASSET QUALITY NPLs 1 percentage of the loan portfolio (gross) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2.4 2.3 2.3 2.1 2.0 2.1 2.2 I-2016 II-2016 III-2016 IV-2016 I-2017 II-2017 III-2017 Coverage ratio 2 120.0 100.0 80.0 60.0 40.0 20.0 0.0 97.3 99.7 101.3 103.5 90.8 82.3 73.4 I-2016 II-2016 III-2016 IV-2016 I-2017 II-2017 III-2017 (1) NPL: credits more delay 90 days (2) Allowances for loan impairments over NPLs 16 of 26
BNCR (STAND-ALONE): LOAN-TO-DEPOSIT RATIO 130.0 120.0 120.4 125.2 125.2 125.6 110.0 107.2 100.0 90.0 80.0 90.2 77.9 95.2 82.6 96.8 85.2 98.8 88.0 92.8 86.3 101.5 91.4 91.2 94.5 99.7 99.2 70.0 I-2016 II-2016 III-2016 IV-2016 I-2017 II-2017 III-2017 Total CRC USD 17 of 26
BNCR (STAND-ALONE): FUNDING STRUCTURE By product By currency 5,451,593 6,254,546 74.2 77.3 5,912,863 15.7 17.0 16.5 77.1 5,451,593 6,254,546 53.7 54.5 5,912,863 46.3 45.5 47.6 52.4 III-2016 II-2017 III-2017 Obligations with public FCD Bonds and subord. Obligations Demand obligations with entities Term obligations with entities III-2016 II-2017 III-2017 CRC USD CRC Foreign currency Obligations with public Obligations with public Demand obligations with entities Demand obligations with entities 38.5 FCD Term obligations with entities Bonds and subord. Obligations 93.8 FCD Term obligations with entities Bonds and subord. Obligations 4.9 51.9 18 of 26
BNCR (STAND-ALONE): DEPOSIT BREAKDOWN Structure of deposits Deposits and average cost (CRC) 3,986,610 4,548,871 38.8 40.1 4,555,197 43.6 29.7 28.7 29.8 30.2 26.2 28.9 III-2016 II-2017 III-2017 1,600,000 1,200,000 800,000 400,000 0 804,849 828,370 1,335,127 Current account Savings deposits Term obligations with the public 47,832 Other deposits 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Current account Savings deposits Term obligations with the public Other Deposits and average cost (other) 30.6 III-2016 II-2017 III-2017 CRC 34.5 USD 33.8 69.4 66.2 65.5 1,400 1,200 1,000 800 600 400 200 0 705 Current account 791 1,152 Savings deposits Term obligations with the public 42 Other deposits 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 19 of 26
BNCR: OUTSTANDING DEBT Security Issue date Maturity Initial term (years) Currency Issued amount (million) Outstanding amount Interest rate BNCR$2D 15-nov-2012 15-nov-2017 5 años USD 5 MM 1.08 5.00% BNCRC2D 15-nov-2012 15-nov-2017 5 años CRC 5,000 MM 3,996 11.46% BNCRC2F 05-feb-2014 05-feb-2018 4 años CRC 10,000 MM 8,577 8.73% BNCRC3B 22-oct-2014 22-oct-2017 3 años CRC 20,000 MM 20,000 8.74 BNCR$2E 12-nov-2015 12-nov-2017 2 años USD 20 MM 10.1 3.69% BNCRC4A 05-set-2016 05-set-2018 2 años CRC 20,000 MM 20,000 5.60% BNCR4A 12-jul-2017 12-jul-2019 2 años CRC 20,000 MM 20,000 8.03% Subordinada 27-may-2014 15-nov-2023 9.6 años USD 100 MM 100 MM Libor6m+5.00% Subordinada 2-nov-2014 23-oct-2029 15 años USD 30 MM 30 MM Libor6m+5.25% RegS / 144A 1-nov-2013 1-nov-2018 5 años USD 500 MM 500 MM 4.875 RegS / 144A 25-abr-2016 25-abr-2021 5 años USD 500 MM 500 MM 5.875 RegS / 144A 1-nov-2013 1-nov-2023 10 años USD 500 MM 500 MM 6.25 Long term obligations MM de USD % Local International 293 5.13 Total 20 of 26
CREDIT RATINGS Local International BNCR Last Long term debt Corporative bonds Mortgage bonds Long term deposits Fitch Jun-17 Fitch AA+ AA+ AA+ BNCR Fitch Moody s Last Jan-17 Feb-17 Outlook Est Neg Stand alone rating foreign currency BB Ba3 Short term debt Fitch Short term deposits F1+ Certificates of deposits F1+ 21 of 26
Savings deposits Term obligations with the public Current account Juntos somos MARKET SHARE Credit Deposits 41.5 29.8 28.2 33.6 0.0 0.0 0.5 BNCR Other Corporatives and mutuals Special purpose Goverment banks (exbncr) Private banks 22.2 37.1 11.8 12.8 14.9 6.1 BNCR Other Corporatives and mutuals 9.2 8.9 Special purpose 17.2 Goverment banks (exbncr) 21.6 Private banks 4.7 37.2 BNCR Other Corporatives and mutuals Special purpose Goverment banks (exbncr) Private banks 20.5 1.0 13.9 BNCR Other Corporatives and mutuals 9.1 Special purpose 18.3 Goverment banks (exbncr) Private banks 22 of 26
FINANCIAL PERFORMANCE Financial income (million CRC) NIM -3.2% -4.1% +0.9% 59,604 57,168 57,684 4.75 4.37 4.42 4.32 3.93 3.52 103,121 110,875 118,548-43,517-53,707-60,864 III-2016 II-2017 III-2017 Financial income Financial expense Fee income (million CRC) -10.0% -20.2% +12.8% 10,586 8,449 9,532 23,595 25,609 25,679-18,882-23,008-21,713 III-2016 II-2017 III-2017 NIM Net NIM Operational expenditure (million CRC) +1.6% +1.5% +0.1% 46,382 47,088 47,124 6,726 6,453 6,710 30,893 30,672 30,626 III-2016 II-2017 III-2017 Commissions Net FX income Other income III-2016 II-2017 III-2017 Personal Operating Infraestructure Depreciation 23 of 26
CAPITALIZATION 12.86 12.95 12.89 12.93 12.57 12.90 12.87 13.07 12.87 13.02 12.74 Minimun Sugef: 10% 8.85 9.80 9.53 9.46 9.12 9.77 9.52 9.49 9.08 9.81 10.56 Razón Sugef Razón Tier I ISP composition (Dec-16) ISP composition (Jun-17) Tier I 1.20 6.35 1.25 1.23 0.50 1.68-2.13 12.87 6.79 1.17 0.26 0.48 0.59 1.65-2.13 12.74 2.73 3.77 29.0 29.0 Ordinary capital Legal reserve Revaluations Earnings from previous periods Result of the period FINADE Subordinated debt Deductions Regulatory capital Ordinary capital Legal reserve Revaluations Earnings from previous periods Result of the period FINADE Subordinated debt Deductions Regulatory capital 24 of 26
EFFICIENCY Efficiency ratio Administrative expenditure (YoY growth, %) 4.7 72.1 1.9 0.4 0.8 3.1 1.6 1.8 1.6 69.2 66.7 67.3 68.5-0.9-1.1-2.9-5.1 II-2016 III-2016 IV-2016 I-2017 II-2017 III-2017 Administrative expenditure Inflation Administrative expenditure breakdown (million CRC) 64.9 64.6 30,936 30,893 30,548 30,623 30,672 30,626 II-2016 III-2016 IV-2016 I-2017 II-2017 III-2017 I-2016 II-2016 III-2016 IV-2016 I-2017 II-2017 III-2017 Personal Operational Infrastructure Depreciation 25 of 26
BRANCHES AND PAYROLL Branches (1) Payroll (1) 181 183 5,508 5,499 5,502 5,498 176 174 175 176 5,474 5,464 5,452 170 5,435 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2015 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 (1) Includes all BNCR Group 26 of 26