Itaú Corpbanca
Institutional Investors Presentation
August 2019
Institutional Investors Presentation Ita Corpbanca August 2019 - - PowerPoint PPT Presentation
Institutional Investors Presentation Ita Corpbanca August 2019 Disclaimers This presentation is not an offer for sale of securities. This material has been prepared solely for informational purposes and is not to be construed as a
August 2019
should not be treated as giving investment advice. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Any opinions expressed in this material are subject to change without notice and neither Itaú Corpbanca (the “Bank”) nor any other person is under obligation to update or keep current the information contained
“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 merger of Banco Itaú Chile with and into Corpbanca, the integration process of both banks, 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
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 the Bank or its controlling shareholders expect; (4) the industry may be subject to future regulatory or legislative actions that could adversely affect the Bank; and (5) the Bank may be adversely affected by other economic, business, and/or competitive factors
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
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 Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the U.S. Securities and Exchange Commission (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
U.S. Securities Act of 1933, as amended, or the applicable laws of other jurisdiction
that you deem it necessary, and make your own investment, hedging and trading decision based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this material
Valores, or the Santiago Stock Exchange, the Bolsa Electrónica de Chile— Bolsa de Valores, or Electronic Stock Exchange, and the Bolsa de Corredores—Bolsa de Valores, or the Valparaiso Stock Exchange, which we jointly refer to as the “Chilean Stock Exchanges,” under the symbol “ITAUCORP.” The Bank’s American Depositary Shares are traded on the New York Stock Exchange under the symbol “ITCB.” Accordingly, we are currently required to file quarterly and annual reports in Spanish and issue hechos esenciales o relevantes (notices of essential or material events) to the CMF, and provide copies of such reports and notices to the Chilean Stock Exchanges and the SEC. All such reports are available at www.cmf.cl, www.sec.gov and ir.itau.cl. 2
Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
GDP Growth (%) Interest Rates (EOP) - % Inflation (CPI) - %
Source: Central Bank of Chile and Central Bank of Colombia. Itaú Corpbanca’s projections
Exchange rates – CLP/USD & CLP/COP
4
3.3 5.3 5.0 4.5 3.0 3.5 3.5 2.5 2.8 2.0 2.0 3.0 4.8 4.3 3.3 4.5 5.8 7.5 4.8 4.3 4.0 3.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(e) 2020(e)
Chile Colombia 5.8 6.1 5.3 4.0 1.8 2.3 1.7 1.3 4.0 2.4 2.9 4.0 7.4 3.9 4.6 4.7 3.0 2.1 1.4 2.6 2.6 2.8
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(e) 2020(e)
Chile Colombia 3.0 4.4 1.5 3.0 4.6 4.4 2.7 2.3 2.6 2.8 2.9 3.2 3.7 2.4 1.9 3.7 6.8 5.8 4.1 3.2 3.8 3.2
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019(e) 2020(e)
Chile Colombia
0.20 0.21 0.22 0.23 0.24 0.25 0.26 0.27 580 600 620 640 660 680 700 720 740
CLP/USD CLP/COP
Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
6
To be the leading bank in sustainable performance and customer satisfaction
7
We seek to create a culture based on seven attitudes that define our identity and identify us in the way we do business. Each one of them represents the core of what we focus on as institution.
We are people providing service to people, with passion and excellence. We work with the client and for the client –because they are the main reason behind why we do what we do.
Generating sustainable results is in our DNA. The continuous challenge of seeking leadership in performance has brought us to where we are –and will continue guiding our company towards our objectives.
Everything we do is carried out by people. Talented people who enjoy working in a collaborative atmosphere, based on meritocracy and high performance.
We encourage a challenging work environment, which is open to questioning and constructive discussion. For us, the hierarchy which counts is the hierarchy of the best idea.
We believe that simplicity is the best path to efficiency. That’s why we strive not to mistake depth for complexity, and simplicity for simplism.
We always think like business owners, leading by example and putting collective objectives before personal ambition.
We do what is right, without using shortcuts or devious ways to do business. We exercise leadership in a transparent and responsible way, fully committed to society and the best governance and management practices.
8
Merger Transition Construction
management
management framework and other policies
strenghtening
sustainable results
integration and advancing with digital agenda
throughout the organization
segmentation in Chile
Colombian retail Market
Consolidation
management model (commercial growth; people management; risk management)
transformation
experience, listening and engaging customers
9
We are key part of Itaú Unibanco’s Internationalization Strategy
Regional footprint & main indicators 1 2
10.2% 4.6% 3
Market Share
US$ 25.5 bn US$ 7.0 bn
Loans 1
US$ 32.5 bn
5,510 4 3,430 5
Headcount 1
8,940 194 157
Branches 1
351
US$ 36.1 bn US$ 9.8 bn
Assets 1
US$ 45.9 bn US$ 78 mn US$ 11 mn
Recurring Net Income 2Q19
US$ 89 mn
13.0% 7.6%
Recurring RoTAE 2Q19 6
11.9%
1 Information as of June 30, 2019; 2 Figures were converted at an exchange rate of 678.42 CLP/USD; 3 Information as of May 31, 2019; 4 Includes headcount of our New York branch and since 1Q’18 also from our RepOffices in Lima and Madrid; 5 Includes
headcount of Itaú (Panamá); 6 Tangible Equity: Shareholders equity net of goodwill, intangibles from business combination and related deferred tax liabilities. Sources: Itaú Corpbanca, CMF and SFC.
10
(US$ Bn) US$ Bn US$ Bn
4 Caixa
Santander Bradesco 9 Citibank Banco do Brasil 8 BBVA Scotiabank 1 2 3 4 5 6 7 8 9 15 BCI Grupo Aval
Santander Scotiabank Banco del Estado de Chile 1 2 3 5 6 7 Banco de Chile Bancolombia Itaú Corpbanca3 9 8
Itaú Corpbanca represents 23%
loan portfolio6
Itaú Unibanco2 10 Itaú Corpbanca3 Itaú LatAm5
1 Data as of March 31, 2019. Includes Brasil, México, Colombia, Chile, Argentina, Paraguay, Peru and Uruguay; 2 Includes Brasil, México, Argentina, Peru, Uruguay, Paraguay, Chile and Colombia; 3 Includes Chile and Colombia (Itaú Corpbanca Chile with ~US$34MMM in assets); 4 Data as of March 31, 2019. Includes Colombia, Chile, Argentina, Paraguay, Peru and Uruguay; 5 Includes Colombia, Chile, Argentina, Paraguay, Peru and Uruguay; 6– Considering the consolidated loan portfolios of Itaú Unibanco and Itaú Corpbanca reported in their respective 2Q’19 MD&As at a R$ 3.8336 / US$ and a Ch$ 678.42 / US$ foreign exchange rates as of 30.06.2019. Source: Central Banks, local regulators, companies filings, Itaú Corpbanca.
Banks by Assets in Latin America1 Banks by Assets in South America (ex-Brazil)4 Loan portfolio as of Jun.19
Itaú Corpbanca is currently the 5th largest private bank in Chile and we contribute to position Itaú LatAm as the 10th and 6th largest bank in terms of assets within South America (ex-Brazil)
11 387 421 326 105 351 75 334 162 60 44 52 53 58 51 44 77 79 60 58 48
US$ 4.0 Bn Market Cap. (Aug. 16, 2019)
Average daily traded volumes 12 months ended June 30, 2019
Source: Sell-side reports.
1 – For Itaú Corpbanca and BCI consider shareholders equity net of goodwill and intangibles from business combination.
Buy: 3 Hold: 5 Sell: 0
Sell-side rating:
12
% Total share capital as of July 31, 2019
3.05 0.20 3.26
Santiago NY Total
Price-to-Book1
Board Chile
Wholesale
Manuel Olivares
Treasury Marketing & Products IT Human Resources Retail CRO Legal
Álvaro Pimentel
Treasury Derek Sassoon CRO Juan Ignacio Castro
Frederico Quaggio IT Bernardo Alba Legal & General Secretary Dolly Murcia Human Resources María Lucía Ospina Wholesale Jorge Villa Communications & Institutional Relations Carolina Velasco Operations Liliana Suárez Retail Hernando Osorio
Chairman
Manuel Olivares
Matrix reporting to CEO Colombia and functional reporting to ITCB Functional reporting to CEO Colombia and matrix reporting to ITCB for coordination of specific themes
Board Colombia
Board Colombia
Roberto Brigard Holguín Luis Fernando Martínez Lema Carmiña Ferro Iriarte Rafael Pardo Soto Juan Echeverría González Gabriel Moura Cristián Toro Mónica Aparicio Smith Chairman
Manuel Olivares
Colombia Pedro Silva Mauricio Baeza Luciana Hildebrandi Álvaro Pimentel Christian Tauber Julián Acuña Marcela Jiménez Cristián Toro Luis Rodrigues
Itaú Corpbanca Colombia CEO Itaú Corpbanca CEO
Board Chile1 2
Chairman
Jorge Andrés Saieh Guzmán
Ricardo Villela Marino Caio Ibrahim David Milton Maluhy Filho Andrés Bucher Cepeda Pedro Samhan Escandar Fernando Concha Ureta Jorge Selume Zaror Fernando Aguad Dagach Gustavo Arriagada Morales Bernard Pasquier
1 Itaú Unibanco and CorpGroup appoint the majority of the members of the board of directors; 2 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.
Audit Committee CAE Emerson Bastián Franchise, Products & Digital Marcos Aulicino Andrade CFO Gabriel Moura CFO Juan Pablo Michelsen Operations Jorge Novis
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Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
1 Yearly average gross loans; 2 Loan interests by segments; Source: CMF; Itaú Corpbanca; Team Analysis.
Loans breakdown by segment¹
LTM Jun 2019, Ch$ Bn
13.8 7.2 13.8 6.8 Total 6.3 6.3 5.8 5.9
Itaú Corpbanca Average Top 3
Interest Rates
27,700
Consumer Commercial
16,263 22,511
Mortgage
30,319
∆ -36 bp
Peer-A Peer-B Peer-D
Current rate w/ top 3 mix Current Top 3 Top 3 rates w/ current mix
Mix difference explains most es the Yield gap with the Top 3
100% =2
55.2% 50.8% 48.9% 65.7% 29.1% 33.3% 36.4% 23.6% 15.8% 15.9% 14.6% 10.7%
17
7.2 7.3 6.8 6.8
18
Portfolio Mix (%)
66.7% 23.2% 10.0%
Mar-18
66.6% 22.8% 10.6%
Mar-19 Retail: 33.4% Retail: 33.5% Market Share (Jun.2019)
Commercial Mortgage Consumer
Total Loans
Share
12- months
+10 bp
23.3%
Jun-18 Jun-19
66.6% 10.1% 66.5% 10.7%
19
Total Loans Mortgage Commercial1 Consumer
8.6%
6.7%
jun-15 jun-16 jun-17 jun-18 jun-19 7.9%
7.7%
jun-15 jun-16 jun-17 jun-18 jun-19
10.1%
4.4%
jun-15 jun-16 jun-17 jun-18 jun-19
9.1%
12.4%
jun-15 jun-16 jun-17 jun-18 jun-19
(1) Ex Student loans portfolio
6.8% 7.8%
20
Commercial1 Middle Market – Credit Portfolio (Base 100) Real Estate – Credit Portfolio (Base 100)
7.9%
7.7%
jun-15 jun-16 jun-17 jun-18 jun-19
100.0 113.1 jun-18 sep-18 dec-18 mar-19 jun-19 100.0 112.0 jun-18 sep-18 dec-18 mar-19 jun-19 100.0 96.0 jun-18 sep-18 dec-18 mar-19 jun-19
(1) Ex Student loans portfolio
7.8%
Corporate – Credit Portfolio (Base 100)
Total Funding Breakdown
Interest Rates
32,484 20,252
Debt Issued
36,230
Others1
100%
27,609
Checking accounts and deposits
3.0 2.5 3.3 3.0 Total 0.3 0.3 4.9 5.3
Itaú Corpbanca
1.4 1.1
Average Top 3 ∆ 49 bp 35 bp por mix
Peer-A Peer-B Peer-D
Top 3 rates w/ current mix Current rate w/ top 3 mix
Non-interest bearing liabilities are the main reason for the gap when compared to the 3 players
Time Deposits
1 Others: Repurchases contracts, financial derivatives, bank obligations, letters of credit, other financial obligations, taxes, differed taxes, provisions, other liabilities.
LTM Jun 2019, Ch$ Bn Top 3 Current
21
15.1% 17.7% 24.5% 21.3% 22.7% 23.1% 22.3% 27.5% 33.4% 35.9% 38.9% 39.0% 28.9% 23.3% 14.4% 12.2%
2.9 3.0 2.7 2.5
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
Individuals
By monthly income
(CLP MM)
Companies
By annual sales
(USD MM) Over $8.0 From $2.5 to $8.0 From $0.6 to $2.5 Up to $0.6
Private Bank Personal Bank Itaú Branches Condell
Over $100 From $8 to $100 From $1 to $8 From $0.1 to $1
Corporate Large Middle Very Small and Small Wholesale Banking Retail Banking
23
Fully implemented segmentation model with well defined identity and value proposition, aimed at optimizing service level, satisfaction and profitability per client.
23 Itaú Personal Bank + 34 Corners PB 114 Itaú Sucursales 55 Condell (Consumer Finance)
Itaú Personal Bank Itaú Sucursales
24
Branch profile in Chile
Continuous improvement of the look and feel of our digital channels. Review and improvement of benefits and
and relationship. Advancing with roll-out of new digital services and offerings. Executing a well defined pipeline of digital solutions.
25
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
20+ multidiciplinary teams fully dedicated that are looking at
processes with a disciplined and focused approach.
150+ releases and new functionalities, user interface and offers through our digital channels Advanced work methodologies and tools Back-end to front-end digitalization of opening of digital accounts process
27
28
Small Companies
Individuals
ADOPTION IN 12 MONTHS
1Q17 1Q19
Consumer Credit
41% 86% 45 p.p.
Credit Limits
29% 75% 46 p.p.
Credit Card Advance
79% 89% 10 p.p.
Time Deposits
59% 75% 16 p.p.
Digital Approach Multi-Channel Remote Access Extended Hours Account Load
Digital Branch
Jan/19
198
Jun/19
650
Personal Bank Clients
Jun-18 Jun-19
(1) Considers the number of current accounts opened in each month. (2) May-19
DEC 2014
MAR 2015
MAR 2016
MAR 2017
DEC 2017
12-months installment loans growth: Itau vs. Financial System
MAR 2018 MAR 2019
DEC 2018
29
5.8% 8.9% 1.7% 13.1%
abr-16 jun-16 sep-16 dic-16 mar-17 jun-17 sep-17 dic-17 mar-18 jun-18 sep-18 dic-18 mar-19 jun-19
Financial System Itaú CorpBanca
JUN 2019
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
Average: 11.9% ; 10.5%
Adjusted Non-Interest Expenses annualized growth (%)
1 – Includes commissions expenses, personnel expenses, administrative expenses, depreciation and amortization, impairment charges and other operational expenses. All data is Proforma 2 – Consisting of provisions for assets received in lieau of payment and provisions for Country risk. 3 – Does not include amortization of intangibles generated through business combination, already considered as a non-recurring expense.
31
15.6% 7.4% 19.1% 8.1% 16.1% 5.3% 1.4% 3.0% 2.2%
18.9% 3.0% 8.1% 8.4% 16.3% 8.3% 4.5% 5.4% 8.1% 7.4%
2010 2011 2012 2013 2014 2015 2016 2017 2018 6M19 x 6M18 Itaú CorpBanca Chile Chilean Financial System
In millon of Chilean Pesos
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 6M'18 6M'19 Total Non-Interest Expenses - Itaú CorpBanca1 220 255 275 402 545 732 736 801 766 791 390 399 (-) Itaú CorpBanca Colombia
(191) (290) (253) (253) (274) (273) (134) (136) Total Non-Interest Expenses - Itaú CorpBanca Chile 220 255 275 328 354 441 483 548 492 518 256 263 (-) Credit risk related provisions2 (3) (4) (4) (6) (4) (4) (2) (11) (9) (16) (11) (5) (-) Non-recurring expenses
(54) (101) (31) (39) (14) (14) (-) Depreciation y amortization3 (10) (12) (14) (16) (20) (22) (24) (26) (29) (32) (15) (31) Adjusted Non-Interest Expenses - Itaú CorpBanca Chile 207 239 257 306 331 384 404 410 422 432 217 214 Annual growth rate 15.6% 7.4% 19.1% 8.1% 16.1% 5.3% 1.4% 3.0% 2.2%
Adjusted Non-Interest Expenses - Chilean Financial System 2,254 2,680 2,761 2,983 3,233 3,760 4,073 4,255 4,484 4,848 2,323 2,495 Annual growth rate 18.9% 3.0% 8.1% 8.4% 16.3% 8.3% 4.5% 5.4% 8.1% 7.4%
Average: 1.3% ; 6.3%
≠
10 27
Ch$ 68 billion or US$ 101 million1 in synergies captured since the merger Adjusted Total Expenses evolution – actual1 (Ch$ Bln) Adjusted Total Expenses evolution – System growth rates1 (Ch$ Bln)
≠
19
≠
1 – Exchange rate of Ch$ 678.42 / 1 US$, as of June 28th, 2019
32
207 239 257 306 331 384 404 422 445 481 217 233 18 23 36 16
2009 2010 2011 2012 2013 2014 2015 increase 2016 increase 2017 increase 2018 6M18 increase 6M19
207 239 257 306 331 384 404 410 422 432 217 214 6 12 9 ( 3 )
2009 2010 2011 2012 2013 2014 2015 increase 2016 increase 2017 increase 2018 6M18 increase 6M19
+1.4% +4.6% +3.5% +5.6% +2.2% +8.1%
+7.4%
≠
12
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
Notes: 1 Capital Básico = Core Capital, according to CMF BIS I definitions; includes corresponding adjustments from merger effects of the business combination 2 Patrimonio efectivo = Regulatory Capital, according to CMF BIS I definitions 3 BIS ratio = Patrimonio efectivo / RWA, according to CMF BIS I definitions
Ch$ Tn*
1.02
Capital Básico1 Subord. Bond Minority Interest Patrimonio Efectivo2 Goodwill
*Data as of June 30, 2019 Source: Itaú Corpbanca consolidated balance sheet
3.38 0.23 3.45
14.5% BIS Ratio3
1.18
34
35
10,2%
7,6%
Regulatory Capital Ratio (Jun. 19) Other Intangible Assets / Net Deferred Taxes Net effect
Estimated Fully Loaded BIS III Capital
4.3% 14.5%
CET 1
4.5%
New LGB (Dec. 2024)
SIFI (est.) CCB AT1
11.5% 1,5% 1.0%
Total Capital
2.5% 8.0%
Tier II
9.5%
CET 1 Tier I
2.0% 3.8% 11.4%
Max use of Tier II
10.2%
7.6%
Tier I Tier II
Regulatory Capital Ratio (Jun.2019)
Growth
Digital Transformation Client Centricity Efficiency
Capital Generation
Colombia
37
Contribution to the Consolidated Recurring Net Income Highlights
(1) Evolution in constant currency
∆
2Q19 x 1Q19
Recurring Net Income RoTE 7.6% +2.5 p.p. Loan Portfolio1 Total Assets1 2Q19 Ch$ 4.7 Tn +1.2% Ch$ 7.6 Bn +52.3% Ch$ 6.7 Tn +3.2%
Recurring Net Income Evolution
In Ch$ Billion Ch$ million
38
Cost of Credit1 Operating Revenues1 Efficiency
57.4% 56.3% 54.9% 50.4% 54.3% 96.1% 77.0% 68.4% 71.3% 66.8%
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
Efficiency Risk-Adjusted Efficiency In Ch$ Billion In Ch$ Billion
31.8 21.0 16.1 25.0 15.5 2.6% 1.7% 1.4% 2.1% 1.3%
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
Cost of Credit Risk Cost of Credit Risk / Average Loans
45.2 44.0 44.7 42.9 44.8
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
Non-Interest Expenses1
In Ch$ Billion
79.0 78.3 81.5 85.1 82.7
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
+4.7%
(1) Figures in constant currency
4.4% +
Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
The financial information included in this section is based in our managerial model that we adjust for non-recurring events, for the amortization of intangibles arising from business combination, and for the tax effect of the hedge of our investment in Colombia. At the same time, we adjust the Managerial Income Statement with additional reclassifications of P&L lines in order to provide a better clarity of our performance. Please refer to pages 9 and 10 of our Management Discussion & Analysis Report (“MD&A Report”) for further details, available at ir.itau.cl.
40
Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
Consolidated
Ch$ bn
2.2 22.1 11.9
Recurring Net Income Recurring RoTE Loans NPL 90+ days Financial Margin with Clients Commissions and Fees Cost of Credit Non-Interest Expenses
76.7%
Chile
Ch$ bn 80.8%
2Q19 vs. 1Q19 2Q19 vs. 1Q19
Consolidated
5.0
Chile
1.9% 2.4%
2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19
Consolidated
Ch$ bn
Chile
Ch$ bn
2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19
Consolidated
Ch$ bn
Chile
Ch$ bn
2Q19 vs. 1Q19 2Q19 vs. 1Q19
Consolidated
Ch$ bn
Chile
Ch$ bn
2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19 2Q19 vs. 1Q19
Consolidated
Ch$ tn
Chile
Ch$ tn
2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19 2Q18 3Q18 4Q18 1Q19 2Q19
64.9
2Q18 3Q18 4Q18 1Q19 2Q19
43.8 50.7 34.2 60.4 13.7
2Q18 3Q18 4Q18 1Q19 2Q19
8.9 10.5 6.9 21.2
2Q18 3Q18 4Q18 1Q19 2Q19
21.5 21.2 21.7 2.3
2Q18 3Q18 4Q18 1Q19 2Q19
2.1 2.2 2.2
60.4 52.8
Consolidated
Ch$ bn
Chile
Ch$ bn 11.9 13.0
p.p. p.p.
5.7
% %
22.1 17.4
Consolidated
0.0
Chile
2.2 1.9
p.p. p.p.
0.0
% %
2.4% 4.0%
196.2 220.1 194.1 202.2 206.9
206.9 146.5 3.6% 4.8%
47.4 51.7 49.2 48.6 50.3
50.3 41.1
14.7%
59.0 66.9 51.4 61.6 57.4
57.4 41.9 1.8% 1.2%
157.2 158.4 157.0 154.4 157.2
157.2 112.5
2nd Quarter 2019
42
43
In Ch$ billion
2Q'19 1Q'19 % $ 2Q'18 % $ Operating Revenues 212.0 187.4 13.1% 24.6 205.5 3.1% 6.4 Managerial Financial Margin 170.9 148.2 15.3% 22.7 167.6 1.9% 3.2 Financial Margin with Clients 146.5 140.8 4.0% 5.7 134.3 9.1% 12.2 Financial Margin with the Market 24.4 7.4 229.7% 17.0 33.3
Commissions and Fees 41.1 39.2 4.8% 1.9 37.9 8.5% 3.2 Cost of Credit
14.7%
62.4%
Provision for Loan Losses
18.0%
17.4%
Recovery of Loans Written Off as Losses 11.5 8.5 35.1% 3.0 11.8
CVA 0.3 0.5
8.1
Non-interest Expenses
1.2%
2.2%
Income before Tax and Minority Interests 57.5 39.7 45.0% 17.9 69.7
Income Tax
5.8
2.5 Recurring Net Income 52.8 29.2 80.8% 23.6 62.5
29.2 52.8 5.7 17.0 1.9
5.8 1Q'19 Financial Margin with Clients Financial Margin with the Market Commissions and Fees Cost of Credit Non-interest Expenses Income Tax & Other 2Q'19
B A C D
44
In Ch$ billion 134.3 132.6 157.4 140.8 146.5
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 + 134.3 146.5 2.1 7.6 2.7
2Q'18 Loan Portfolio Mix Average Loan Portfolio, Loan Spreads and Liabilities Margin Comercial spreads on derivatives and FX transactions with clients Working Capital and
2Q'19
140.8 146.5 0.1 4.0 0.0 1.0 0.3 0.3
1Q'19 Loan Portfolio Mix Average Loan Portfolio, Loan Spreads and Liabilities Margin Comercial spreads on derivatives and FX transactions with clients Calendar days Sale of student loans portfolio Working Capital and other 2Q'19
4.0% 9.1% +
A
In Ch$ billion
Quarterly evolution breakdown (Ch$ billion) UF1 net exposure (Ch$ trillion) UF – Unidad de Fomento1 ( value)
1 – UF (Unidad de Fomento) is an official unit of account in Chile that is constantly adjusted for inflation and widely used in Chile for pricing several loans and contracts.
45
1.7 2.2 1.7 1.9 2.0
jun-18 sep-18 dec-18 mar-19 jun-19
0.7% 0.7% 0.8% 0.0% 1.2%
0.0% 0.5% 1.0% 1.5%
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
B
7.4 24.4
46
Cost of Credit Coverage Non Perfoming Loans (90+ days -%) and NPL Creation (Ch$ billion)
In Ch$ Billion Cost of Credit R
Commercial (exStudent Loans) Mortgage Consumer
25.8 29.4 50.7 36.6 41.9
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
0.6% 0.7% 1.2% 0.9% 1.0%
113% 114% 122% 131% 126% 129% 2.5% 2.4% 2.4% 2.4% 2.4% 2.4%
mar-18 jun-18 sep-18 dec-18 mar-19 jun-19 NPL90 Coverage Provisions / Loans
1.9% 1.8% 1.6% 1.4% 1.5% 1.4%
mar-18 jun-18 sep-18 dec-18 mar-19 jun-19
2.0% 1.8% 1.7% 1.7% 1.8% 1.7%
mar-18 jun-18 sep-18 dec-18 mar-19 jun-19
1.8% 1.5% 1.8% 1.7% 2.0% 1.7%
mar-18 jun-18 sep-18 dec-18 mar-19 jun-19
12 11
24 6
3 3
21 18 27 23 29 21
C
47
in Ch$ billion
2Q'19 1Q'19 % $ 2Q'18 % $ 1S'19 1S'18 % $
Personnel Expenses
52.5 49.9
5.3% 2.6
47.4
10.8% 5.1
102.4 96.0
6.7% 6.4
Adminsitrative Expenses
50.6 52.3
55.2
102.9 108.7
Personnel and Administrative Expenses
103.1 102.1
1.0% 1.0
102.6
0.5% 0.5
205.3 204.7
0.3% 0.6
Depreciation, Amortization and Impairment
9.4 9.1
3.7% 0.3
7.4
26.5% 2.0
18.4 14.3
29.1% 4.2
Non-Interest Expenses
112.5 111.2
1.2% 1.3
110.1
2.2% 2.5
223.7 219.0
2.2% 4.8 change change change
53.5% 55.6% 53.1% 59.3% 53.1% 61.2% 65.2% 69.6% 73.7% 66.2%
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 Efficiency ratio Risk-ajusted Efficiency ratio 202 202 201 201 193 1 1 1
202 202 194
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19 Sucursales Sucursal Digital
D
Itaú Corpbanca has presented a noticeable convergence to peers
Spreads Itaú vs.Peers1: 30-day (annualized) Spreads Itaú vs.Peers1: 5-year (annualized)
1 – Average of top 3 peers in Chile. As of Aug 14, 2019; 2 – As of June 30, 2019.
Bonds in CLP & UF (expressed in USD MM) Spread vs.Peers1
Bonds issued in Chile LTM2
48
0.00 0.25 0.50 0.75 1.00 1.25 1.50
Peer A Peer B Peer C Itaú Corpbanca
0.0 0.5 1.0 1.5 2.0 2.5
Peer A Peer B Peer C Corpbanca Itaú
123 123 41 44 147 82 101 205 103 82 82 123 82 82 82 82 103 04-04-2017 04-04-2017 08-25-2017 09-25-2017 10-17-2017 02-06-2018 02-21-2018 03-14-2018 04-13-2018 06-05-2018 02-11-2019 02-15-2019 02-25-2019 02-26-2019 03-07-2019 03-14-2019 05-07-2019
8 bp 7 bp 5 bp 5 bp 7 bp 5 bp 4 bp 9 bp 2 bp 6 bp 6 bp 6 bp 6 bp 4 bp 6 bp 5 bp 4 bp
Current International Ratings Moody's S&P
Financial Capacity Rating Scale Rating Scale LT ST LT ST Extremely strong Aaa P-1 AAA A-1+ Very strong Aa1 AA+ Aa2 AA Aa3 AA- Strong A1 A+ A-1 A2 A A3 P-2 A- A-2 Adequate Baa1 BBB+ Baa2 P-3 BBB A-3 Baa3 BBB-
+3n +1n
Timeline S&P
49
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
A+ A A- A+ A+ A A
A+ A
A+ A
A
A- A-
BBB+ BBB+ BBB BBB BBB+
Ch$ Bn Límit Capital Básico¹ Total gap - 30 days Total gap - 90 days Total gap - 30 days Total gap - 90 days Peer-A 100% 3,393 1,393 1,920 41% 28% Peer-B 100% 3,286 1,944 3,842 59% 58% Peer-C 100% 3,603 186 2,051 5% 28% Estado 100% 1,741 825 2,725 47% 78% Itaú CorpBanca (Chile only) 100% 3,377 1,072 1,429 32% 21%
Adjusted liquidity gap Use of limit
Itaú Corpbanca has lowest maturity mismatches compared with peers
BIS III Liquidity Framework – LCR2 & NSFR3
21% 28% 58% 28% 78% Itaú CorpBanca (Chile only) Peer -A Peer -B Peer-C Estado 50
125.2%
70% 90% 110% 130% 150% 170% 190% 210%
04-01-2016 05-01-2016 06-01-2016 07-01-2016 08-01-2016 09-01-2016 10-01-2016 11-01-2016 12-01-2016 01-01-2017 02-01-2017 03-01-2017 04-01-2017 05-01-2017 06-01-2017 07-01-2017 08-01-2017 09-01-2017 10-01-2017 11-01-2017 12-01-2017 01-01-2018 02-01-2018 03-01-2018 04-01-2018 05-01-2018 06-01-2018 07-01-2018 08-01-2018 09-01-2018 10-01-2018 11-01-2018 12-01-2018 01-01-2019 02-01-2019 03-01-2019 04-01-2019 05-01-2019 06-01-2019
LCR CH LCR Limit
4
Chile Colombia LCR (%) 122.2% 170.0% NSFR (%) 91.6% 87.4%
1 – According to CMF BIS I definitions. 2 – LCR: Liquidity Coverage Ratio calculated according to BIS III rules. Regulatory LCR ratios are still under construction in Chile. 3 – NSFR: Net Stable Funding Ratio, the methodology used to estimate NSFR consist of liquidity ratio proposed by the “Basel III Committee on Banking Supervision” (“BIS III”) that was adopted by the CMF and the Brazilian Central Bank (BACEN) and only the BACEN set a limit for NSFR. 4 – Excludes Colombia and Panama. Source: Quarterly liquidity status report as of June 30, 2019 for each bank available in the corresponding websites.
Regulatory Liquidity: Mismatch vs. Peers in Chile
Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
2.1% 1.4% 2.6% 2.6% 3.3%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%2016
GDP Loan Growth Inflation Interest Rate
2017 2018 2019 2016 2017 2018 2019
12.2% 6.1% 5.8% 8-10%
52
Initial projection for 2019
Current projection for 2019
2.7% 2.3% 2.6% 2.8% 2.7% 3.5% 2.5% 2.75% 2.0% 3.5% 5.8% 4.1% 3.2% 3.4% 7.50% 4.75% 4.25% 4.00% 4.75% 1.7% 1.3% 4.0% 2.4% 3.2%
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%5.6% 4.5% 10.2% 8-10%
Loan Growth Loan Mix1 Cost of Credit Risk2 Adjusted Non-Interest Expenses Results from Colombia3 Expected
8.0% 10.0%
1 – Retail loans refers to Mortgage and Consumer loan. ; 2 – Net provision for credit & counterparty risks. ; 3 – Managerial Net Income Attributable to Shareholders.
0.7% 0.8%
Continued recovery in profitability In line with inflation Continued increasing retail in loan mix
53
Macroeconomic Backdrop Our Bank Strategic Fronts
Financials
Appendix
All other Assets: Ch$ 29,136 Ch$ 22,542 Ch $6,594 All other Liabilities: Ch$ 26,911 Ch$ 20,912 Ch$ 5,999 Asociado a Intangibles PPA: Ch$ 40 Minority Interest ex GW and PPA Intangibles: Ch$ 195 Assets: 30,565 Liabilities: 26,985 Minority Interest: 225
2Q’19 Average Balance (Ch$ Tn)
Managerial Tangible Equity: Ch$ 2,030 Ch$ 1,628 Ch$ 402 Shareholders’ Equity: 3,355
Managerial Tang. Equity: Recurring Results: Recurring RoTE: Ch$ 2,030 Ch$ 1,628 Ch$ 402 Ch$ 60.4 Ch$ 52.8 Ch$ 7.6
÷ ÷ ÷
11.9% 13.0% 7.6%
= = =
Goodwill: Ch$ 1,175 Ch$ 941 Ch$ 234 Intangibles from PPA: Ch$ 254 Ch$ 123 Ch$ 130 Deferred taxes asociated with intangibles from PPA: Ch$ 74 Ch$ 33 Ch$ 41 Asociated w/ PPA Intangibles: Ch$ 30 GW and PPA Intangibles: Ch$ 1,325 Ch$ 1,031 Ch$ 293
55
Itaú Corpbanca Colombia acquired assets and liabilities of Itaú BBA Colombia
Current Structure in Colombia
Itaú Corpbanca
Itaú Corpbanca Colombia
Colombia assets and liabilities1
12.36% stake of CorpGroup in Itaú Corpbanca Colombia:
‐ The postponement date to purchase is until January 28, 2022 ‐ The purchase price has not changed (US$ 3.5367 per share2) ‐ Itaú Corpbanca will carry out commercially reasonable efforts to register an listing Itaú Corpbanca Colombia in the Colombian Stock Exchange (CSE) ‐ The rational is to create a liquidity mechanism for minorities to sell the stake in the company
‐ On February 28, 2019, a three-member Tribunal of the ICC ordered Helm to sell its shares of Itaú Corpbanca Colombia, which represents 19.44% of the equity of Itaú Corpbanca Colombia at approximately US$299 million (which includes interest at LIBOR plus 2.7% per year running from April 1, 2016) ‐ This price of US$299 million implies a valuation multiple of 1.36 times book value of Itaú Corpbanca Colombia as of December 31, 2018, and is consistent with the valuations of Itaú Corpbanca Colombia in Itaú Corpbanca’s financial statements ‐ The acquisition, when completed, will result in an estimated impact of 0.82% on Itaú Corpbanca’s Common Equity Tier 1 capital, on a fully loaded basis, under the Basel III standards (using exchange rates as of February 28, 2019) ‐ The purchase of shares of Itaú Corpbanca Colombia by Itaú Corpbanca will be subject to regulatory approvals in Colombia, Chile and Brazil CorpGroup Helm Corporation Other Minorities Itaú BBA Colombia (asset and liabilities)
66.28% 12.36% 20.82% 0.54%
Acquisition
1 Itaú Corpbanca Colombia S.A. paid Ch$33,205 million to Itaú BBA Colombia S.A Corporación Financiera; 2 This amount accrues interest from (and including) August 4, 2015 until (but excluding) the payment date at an annual interest rate equal to Libor plus 2.7%.
56
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2011 2012 2013 2014 2015 2016 2017 2018 2019F 2020F GDP Growth (%) - World Economy World 4.2 3.5 3.5 3.6 3.5 3.3 3.7 3.7 3.2 3.0 USA 1.6 2.2 1.8 2.5 2.9 1.6 2.2 3.3 2.2 1.5 Euro Zone 1.7
1.4 2.0 1.9 2.5 1.9 1.0 1.0 China 9.5 7.9 7.9 7.4 6.9 6.7 6.8 6.5 6.2 5.7 Japan
1.5 2.0 0.0 1.3 0.6 1.9 0.8 0.8 0.4 GDP Growth (%) - Latam Brazil 4.0 1.9 3.0 0.5
1.1 1.1 0.8 1.7 Chile 6.1 5.3 4.0 1.8 2.3 1.7 1.3 4.0 2.4 2.9 Colombia 7.4 3.9 4.6 4.7 3.0 2.1 1.4 2.6 2.6 2.8 Mexico 4.0 3.6 1.4 2.8 3.3 2.9 2.1 2.0 0.6 1.1 Peru 6.5 6.0 5.8 2.4 3.3 4.0 2.5 4.0 3.1 3.2 Inflation (eop, %) Brazil (IPCA) 6.5 5.8 5.9 6.4 10.7 6.3 2.9 3.7 3.6 3.6 Chile 4.4 1.5 3.0 4.6 4.4 2.7 2.3 2.6 2.8 2.9 Colombia 3.7 2.4 1.9 3.7 6.8 5.8 4.1 3.2 3.8 3.2 Mexico 3.8 3.6 4.0 4.1 2.1 3.4 6.8 4.8 3.7 3.4 Peru 4.7 2.6 2.9 3.2 4.4 3.2 1.4 2.2 2.1 2.0 Monetary Policy Rate (eop, %) Brazil 11.00 7.25 10.00 11.75 14.25 13.75 7.00 6.50 5.00 5.00 Chile 5.25 5.00 4.50 3.00 3.50 3.50 2.50 2.75 2.00 2.00 Colombia 4.75 4.25 3.25 4.50 5.75 7.50 4.75 4.25 4.00 3.50 Mexico 4.50 4.50 3.50 3.00 3.25 5.75 7.25 8.25 7.50 6.50 Peru 4.25 4.25 4.00 3.50 3.75 4.25 3.25 2.75 2.25 2.25 Unemployment Rate (avg, %) Brazil
7.1 6.8 8.5 11.5 12.7 12.3 11.9 11.7 Chile 7.1 6.4 5.9 6.4 6.2 6.5 6.7 7.0 7.0 7.2 Colombia 10.8 10.4 9.6 9.1 8.9 9.2 9.4 9.7 10.3 10.0 Mexico 5.2 4.9 4.9 4.8 4.4 3.9 3.4 3.3 3.8 3.9 Peru 7.7 7.0 5.9 6.0 6.4 6.7 6.9 6.6 7.0 6.8
GDP Growth | % (YoY) Per Capita GDP | US$ Thousand Unemployment rate | % Inflation and Policy Rate | %
5.1 3.3 2.7 3.8 7.0 6.2 5.7 5.2 3.5
5.8 6.1 5.3 4.0 1.8 2.3 1.7 1.3 4.0 2.4 2.9
1 2 3 4 5 6 7 8 00 05 10 15 20
5.1 4.6 4.5 4.8 6.2 7.6 9.5 10.510.710.6 12.9 14.2 15.3 15.6 14.5 13.314.0 15.215.915.115.8
2 4 6 8 10 12 14 16 18 00 05 10 15 20
9.7 9.9 9.8 9.5 10.0 9.3 8.0 7.0 7.8 10.8 8.3 7.2 6.5 6.0 6.3 6.3 6.5 6.7 7.0 7.0 7.2
4 5 6 7 8 9 10 11 12 00 05 10 15 20
4.5 2.6 2.8 1.1 2.4 3.7 2.6 7.8 7.1
3.0 4.4 1.5 3.0 4.6 4.4 2.7 2.3 2.6 2.8 2.9
2 4 6 8 10 00 05 10 15 20 Inflation Policy Rate
59
International Reserves | % of GDP Current Account Balance | % of GDP Central Government Fiscal Balance | % of GDP External Debt | % of GDP
60 19.420.2 21.920.8 16.1 13.812.6 9.8 13.214.2 12.6 17.1 15.614.915.7 16.215.9 13.913.4 13.9 13.2
5 10 15 20 25 00 05 10 15 20
2.6 1.5 4.6 4.1
1.7 1.3
1 2 3 4 5 00 05 10 15 20
2.1 4.4 7.3 7.8 3.9
1.3 0.6
2 4 6 8 00 05 10 15 20
6.8 5.3 3.7 3.0 2.3 1.9 2.3 2.5 3.0 3.0 3.4 3.9 4.3 5.2 7.8 8.4 49.8 39.0 33.2 29.5 29.7 34.5 38.8 36.438.2 42.9 46.1 55.2 62.9 59.6 56.7 54.5
10 20 30 40 50 60 70 03 09 15 Privado Publico
GDP Growth | % (YoY) Per Capita GDP | US$ Thousand Unemployment rate | % Inflation and Policy Rate | %
2.9 1.7 2.5 3.9 5.3 4.7 6.8 6.8 3.3 1.2 4.3 7.4 3.9 4.6 4.7 3.0 2.1 1.4 2.6 2.6 2.8
1 2 3 4 5 6 7 8 00 05 10 15 20
2.5 2.4 2.4 2.3 2.8 3.4 3.7 4.7 5.3 5.2 6.3 7.3 8.0 8.1 8.0 6.1 5.8 6.3 6.6 6.3 6.7
1 2 3 4 5 6 7 8 9 00 05 10 15 20
13.3 15.015.6 14.113.7 11.812.0 11.211.3 12.011.8 10.810.4 9.6 9.1 8.9 9.2 9.4 9.7 10.310.0
5 7 9 11 13 15 17 00 05 10 15 20
8.7 7.6 7.0 6.5 5.5 4.9 4.5 5.7 7.7 2.0 3.2 3.7 2.4 1.9 3.7 6.8 5.8 4.1 3.2 3.8 3.2
5 10 15 00 05 10 15 20 Inflation Policy Rate
61
International Reserves | % of GDP Current Account Balance | % of GDP Central Government Fiscal Balance | % of GDP External Debt | % of GDP
00 05 10 15 20
20.824.023.326.022.0 16.616.314.012.115.813.812.712.413.715.7 22.525.123.121.8 15.6 15.914.814.2 11.6 9.9 8.5 7.6 7.0 7.1 8.8 9.9 8.8 10.4 11.0 15.5 17.4 16.9 17.8
5 10 15 20 25 30 35 40 45 00 05 10 15 Privado Publico
62 10.411.111.511.6 10.2 9.5 10.110.210.8 9.9 9.6 10.1 11.412.4 15.916.6 15.314.6 16.6 16.7
2 4 6 8 10 12 14 16 18 01 06 11 16
0.9
2 00 05 10 15 20
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August 2019