SEP ı 2019 Corporate Presentation 3Q 2019 1
SEP ı 2019 Index • Tanner at a Glance • Our Business Lines • Pillars 2
Tanner at a Glance NET LOANS ‘15 - ’18 CAGR: 14,3% (MUS$) » Tanner is a non-bank financial institution from Chile with over 25 years of experience and a leading position within the auto financing and factoring industries. $ 1,739 $ 1,685 $ 1,378 » Stands on highly diversified, strategically built loan and $ 1,178 $ 1,165 funding portfolios: No business line represents more than 33% of total gross 2015 2016 2017 2018 3Q2019 loans. Loans distributed across 17+ industries. YIELD (1)(2) 11,69 Top five customers represent less than 10% of our loan 10,76 9,73 9,15 8,82 portfolio. No single creditor represents more than 5% of our funding. 2,43 2,35 2,31 2,30 2,28 » Our business model is based on operational excellency, offering timely services enabled by vanguard technological developments. 2015 2016 2017 2018 3T 2019 » Highest standards of corporate governance, with a ROAE (%) ROAA (%) premier management team and board, supported by NET PROFIT ‘15 - ’3Q19 CAGR: 15,0% experienced shareholders. ( MUS$) Physical Branch » One of Chile’s highest ROAA across the finance industry Virtual Branch $ 47 $ 44 $ 37 $ 33 $ 30 Intl. Local BBB- AA- Rating Rating 2015 2016 2017 2018 3Q2019 (LTM) 3 3
Tanner at a Glance: Our divisions CORPORATE DIVISION AUTO FINANCING DIVISION FACTORING Products 1) Fixed payments: conventional loans with a fixed payment for a 1) Invoices: Traditional Factoring, 2) Confirming: Reverse Factoring, where Tanner finances a debtors period of 12 to 60 months. 2) Smart option: smaller payments throughout the loan with a larger accounts payable. 3) Check’s and Promissory notes: these are documents are given to payment upon expiration (balloon payment approximately 45% of the total value) tanner by different institutions to finance a percentage of their value. 3) Floor Planning: financing of vehicle stock for partner dealers. Channels Channels 1) Traditional: branch offices, phone lines. 1) AMICAR 2) Digital: SPF, AMF and Chita 2) Dealer: Commercial representatives located at dealerships. 3) Direct: Commercial representatives contacted directly. CORPORATE LENDING & LEASING A. CORPORATE LENDING TANNER INVESTMENTS - Traditional loans, generally secured with collateral. - Guaranteed tailored loans, backed by promissory notes from real - Asset intermediation within the local market: Tanner Corredores de estate projects and an insurance policy. Bolsa is one of the main non bank institutions operating, both in terms of brokered volumes and customers serviced. B. LEASING - Leading position within Fixed Income intermediation. Real Estate: guaranteed by the property. - Vendor: guaranteed by IT and software. - - Tanner Asset Management alternative private investment assets. Machinery and Vehicles: Guaranteed by the machines and - vehicles. Tanner is not currently pursuing these types of leasing as a result of a shift in our strategy regarding this business. 4
SEP ı 2019 Index • Tanner at a Glance • Our Business Lines • Pillars 5
Solid growth during the first nine months, maintaining risk within expected levels. NET LOANS DISTRIBUTION HIGHLIGHTS (MUS$) Tanner grew in profits 22,3% YoY and 11,6% YoY in net loans. Others Corporate Auto Lending NPL’s over 90 days reached 2,6% (2,5% in 2018). +11.6% During this year Tanner has placed two bonds in the local $ 1,739 $1,685 4% $ 1,510 5% market totaling UF 4 million, as well as another bond in $ 1,378 4% 30% 32% 4% $ 1,178 $ 1,165 31% 3% 3% Switzerland for CHF 125 million. Furthermore our first placement 32% 27% 30% in Switzerland was paid in full for an amount of CHF 150 million. 65% 63% 65% 64% 70% 67% 2015 2016 2017 2018 9M2018 9M2019 NON PERFORMING LOANS (1) GROSS MARGIN DISTRIBUTION (MUS$) NPLs > 30 days NPLs > 90 days Others Corporate Auto Lending +15,4% 7.4% $87 6.9% 6.9% $ 112 $ 76 5,4% $ 94 19% 22% 5,0% $ 86 20% 4.9% 4.8% $ 75 18% 4.4% 13% 23% 4.1% 29% 7% 27% 30% 33% 34% 2,6% 2,5% 2.3% 55% 52% 61% 48% 52% 58% 2015 2016 2017 2018 9M2018 9M2019 2015 2016 2017 2018 9M2018 9M2019 6 NPL’S = Non performing loans / (Loans + Provisions) (1)
Corporate Division YIELD (1) NET LOANS (MUS$ mm) Crédito Leasing Factoring +8% 11.9% 11.9% 11.7% 11.4% 11.0% 1,133 $ 1.057 10.4% $ 975 32% 36% 876 38% 814 787 2015 2016 2017 2018 9M2018 9M2019 32% 10% 11% 36% 45% NON PERFORMING LOANS (2) 12% 17% NPLs > 30 days NPLs > 90 days 21% 3.0% 5.7% 20% 5.3% 2.7% 4.9% 58% 53% 4.2% 4.2% 50% 3.6% 1.8% 1.7% 51% 2.4% 43% 35% 1.4% 9M2018 9M2019 2015 2016 2017 2018 2015 2016 2017 2018 9M2018 9M2019 7 (1) Yield = LTM Income / Average Net Loans NPL’S = Non performing loans / (Loan Stock + Provisions) (2)
Factoring HIGHLIGHTS PROCESS Tanners targeted segment are SME’s as our factoring services aim to Credit analysis offer affordable funding alternatives that differ from the conventional Client products offered by banks. Double payment sources Invoice Accounts Income is obtained from interests charged as well as from fees Invoice receivable discounted from the invoices original value. Client centered Local debtor Tanner offers the following services: - Invoices : they add up to over 70% of total factoring volume. Accounts receivable Confirming represents approximately 2%. International debtor - Checks and Promissory Notes: they represent around 20% and 8% Notification and payment of total Factoring volume. monitoring NON PERFORMING LOANS (1) GROSS PROFFIT (MUS$) NPLs > 30 Days NPLs > 90 Days 7.3% +62,6% 6.3% 5.7% $ 42 $ 37 $ 32 5.0% $ 27 $ 26 3.4% 2.9% 2.6% 2.1% 2.1% 1.5% 1.4% 1.1% 2015 2016 2017 2018 2015 2016 2017 2018 3Q 2019 (LTM) 9M2018 9M2019 8 NPL’S > 90 Days = NPL’s > 90 Days / (Loan stock + Provisions) (1)
Factoring NET LOANS AND # OF CLIENTS YIELD (1) Clients Net Loans (MUS$) 13.9% 14.2% 13.5% 12.9% 3,644 11.8% 12.0% 3,281 3,177 3,345 2,548 $ 654 $ 558 $ 490 $ 447 1,880 $ 340 $ 284 2015 2016 2017 2018 9M2018 9M2019 2015 2016 2017 2018 9M2018 9M2019 NON PERFORMING LOANS (2) LOAN PORTFOLIO INDUSTRY DISTRIBUTION (3) Commerce Others 21% 25% 12% 8% Financial Int. Real Estate 9% 12% Agriculture 12% Non Metal Manufacturers Construction 9 (3) Based on SII’s criteria. (1) Yield = LTM Income / Average Net Loans NPL’S = Non performing loans / (Loan Stock + Provisions) (2)
Corporate Lending & Leasing HIGHLIGHTS YIELD (1) This division’s primary objective is to diversify the loan portfolio . Most of Tanner’s customers are part of the Factoring client base. 10.5% 9.5% 9.9% 8.8% 9.3% 7.9% During the year 2018 Tanner stopped granting leasing operations for assets other than real estate, focusing on safer assets. 2015 2016 2017 2018 9M2018 9M2019 CORPORATE LENDING & LEASING COLLATERALS GROSS MARGIN CORPORATE LENDING + LEASING (MUS$) No Physical Collateral Others 6% Mortgage / 2% +62,2% 37% 31% $ 24 Corporate lending + $ 22 / 11% $ 18 $ 15 $ 14 / 9% Leasing represent 29,6% of total loans 26% / 8% Pledge % Specified Portfolio / % Total Portfolio 2015 2016 2017 2018 9M 2019 (LTM) 10 (1) Yield = LTM Income / Average Net Loans
Corporate Lending & Leasing CORPORATE LENDING: NET LOANS AND # OF CLIENTS LEASING: NET LOANS AND # OF CLIENTS Clients Net Loans (MUS$) Vendor Machinery Clients 646 Auto Leasing Real State 1.261 788 1.269 971 1.073 398 837 $ 367 $ 362 857 445 $ 281 $ 281 560 $ 379 $ 369 578 $ 166 $ 163 $ 148 $ 120 $ 116 $ 44 $ 116 $ 28 $ 65 $ 14 $ 23 $ 14 $ 16 $ 51 $ 44 $ 29 $ 27 $ 45 $ 16 $ 17 $ 19 $ 21 $ 21 $ 70 $ 56 $ 58 $ 59 $ 50 $ 32 2015 2016 2017 2018 9M2018 9M2019 CORPORATE LOANS: NPL’S > 90 DAYS (1) LEASING: NPL’S > 90 DAYS (1) 1.6% 9.1% 4.4% 2.3% 8.2% 8.0% 3.6% 1.3% 7.0% 1.5% 1.5% 0.6% 3.3% 2018 2018 2015 2016 2017 9M2018 9M2019 2014 2015 2016 2017 9M2018 9M2019 11 NPL’S > 90 Days = NPL’s > 90 Days / (Loan stock + Provisions) (1)
Auto Financing HIGHLIGHTS PROCESS This product has an attractive risk to return profile, with the vehicle as guarantee and sizeable down payments. Sales Executive Monitoring & Collection Tanner has diversified into three sales channels: 1) AMICAR AMICAR 2) Dealers Private Individual’s 3) Direct. Dealer Credit analysis Portfolio is comprised of 73% new cars / 27% used. Company’s Tanner increasing its market share with the better behaved new cars. Directo Cross-selling of insurance with Tanner Corredora de Seguros. YIELD(1) GROSS MARGIN (MUS$) 25.2% 23.2% 24.9% 24.6% 24.5% 21.9% +6,1% $ 30 $ 26 $ 26 $ 24 $ 21 2015 2016 2017 2018 9M2018 9M2019 2015 2016 2017 2018 9M 2019 (LTM) 12 (1) Yield = LTM Income / Average Net Loans
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