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2nd Quarter 2019 | Earnings Review Conference CallGabriel Moura
Chief Financial Officer
Claudia Labbé
Head of Investor Relations
August 1st, 2019
2019 Macroeconomic Outlook
2016 2017 2018 2019 2016 2017 2018 2019
2
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%
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%
GDP
Loan Growth
Inflation
Interest Rate
5.6%4.5%
10.2% 8-10%12.2%
6.1% 5.8%
8-10%
Initial projection for 2019Current projection for 2019
3.5%
2.5% 2.75%
2.0%
3.5%7.50%
4.75%4.25%
4.00%
4.75%
2.7%
2.3%2.6%
2.8%
2.7%
5.8%
4.1%3.2% 3.4%
Itaú Corpbanca
Highlights2nd Quarter 2019
3
Consolidated
Ch$ bn
2.222.111.9
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
Consolidated5.0
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
43.850.7 34.2 60.4 13.7
2Q18 3Q18 4Q18 1Q19 2Q19
8.910.5 6.9 21.2
2Q18 3Q18 4Q18 1Q19 2Q19
21.521.2 21.7 2.3
2Q18 3Q18 4Q18 1Q19 2Q19
2.12.2 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
Consolidated0.0
Chile
2.2
1.9
p.p.
p.p.0.0
%
%
2.4%
4.0%
196.2 220.1194.1 202.2 206.9
206.9
146.5
3.6%
4.8%
47.4 51.749.2 48.6 50.3
50.3
41.1
-7.0%
14.7%
59.0 66.951.4 61.6 57.4
57.4
41.9
1.8%
1.2%
157.2 158.4157.0 154.4 157.2
157.2
112.5
Credit Portfolio Growth Rate
Mortgage
Commercial 1
Consumer
Total Loans
(1) Ex Student loans portfolio
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
4
Commercial Credit Portfolio
Middle Market – Credit Portfolio (Base 100)
Corporate – Credit Portfolio (Base 100)
Inmobiliaria – Credit Portfolio (Base 100)
Commercial 1
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
7.9%
7.7%
jun-15 jun-16 jun-17 jun-18 jun-19
5
In Ch$ billion
Financial Margin with Clients
134.3 132.6
157.4
140.8146.5
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
+
134.3146.5
2.17.6 2.7 -0.2
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
other
2Q'19
140.8 146.5
0.14.0 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%+
6
In Ch$ billion
Financial Margin with the Market
15.7
7.4
24.4
0.2
-8.5
-1.0
18.0
4Q'18 TradingInstitutional
Banking 1Q'19 TradingInstitutional
Banking 2Q'19
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.
0.7% 0.7% 0.8%
0.0%
1.2%
-0.5%
0.0%
0.5%
1.0%
1.5%
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
1.7
2.2
1.71.9 2.0
jun-18 sep-18 dec-18 mar-19 jun-19
7
Cost of Credit and Credit Quality
Cost of Credit Coverage
Non Perfoming Loans (90+ days - %) and NPL Creation (Ch$ billion)
In Ch$ Billion
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
-14
0 24
6 -2 -3 -0
3 3
-1 21 18 27 23
29 21
8
9
Digital Transformation
Retail Banking
77%
Small
CompaniesRetail
Digital
Clients2
+5%
Individuals
AD
OP
TIO
NIN
12 M
ON
TH
S
68%
+24%
1Q17 1Q19
Consumer
Credit41% 86% 45 p.p.
Credit
Limits29% 75% 46 p.p.
Credit Card
Advance 79% 89% 10 p.p.
Time
Deposits59% 75% 16 p.p.
Digital
Branch
Digital
Approach
Multi-Channel
Remote
Access
Extended
Hours
Account
Load
Digital
Branch
Jan/19 198
Jun/19650Personal Bank
Clients
New Clients1
Transactions Though digital channels
- Pilot
1,0x 1,8xJun-18 Jun-19
(1) Considers the number of current accounts opened in each month. (2) May-19
9
Non-Interest Expenses and Efficiency
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 -3.1% -1.6 55.2 -8.3% -4.6 102.9 108.7 -5.4% -5.8
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
10
15.6%
7.4%
19.1%
8.1%
16.1%
5.3%
1.4%3.0% 2.2%
-1.3%
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
Synergies Update | Evolution of Total Expenses
Average: 11.9% ; 10.5%
Average: 1.3% ; 6.3%
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.
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 - - - (74) (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 - - - - - (32) (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% -1.3%
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%
11
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
Synergies Update | Estimated Synergies Captured to Date
≠12
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)
+1.4%
1 – Exchange rate of Ch$ 678.42 / 1 US$, as of June 28th, 2019
+4.6%
+3.5%
+5.6%
+2.2%
+8.1%
-1.3%
+7.4%
≠10
≠27
≠19
12
Capital Structure
10,2% -2,4%
-0,2% 7,6%
Regulatory CapitalRatio (Jun. 19)
Other Intangible Assets/ Net Deferred Taxes
Net effectof changes in RWA
Estimated Fully LoadedBIS III Capital
Tier I
4.3%
14.5%
Tier II
CET 14.5%
New LGB
(Dec. 2024)
SIFI (est.)
CCB
AT1
11.5%
1,5%
1.0%
Total Capital
2.5%
8.0%
Tier II
9.5%
CET 1
Tier I
2.0%3.8%
11.4%
-0.5%
Max use of Tier II
10.2% -2.4%
-0.2% 7.6%
13
Highlights
Recurring Net Income Evolution
FY2018 2Q19
Contribution to the Consolidated Recurring Net Income
12.6%
Highlights
2Q19 x 1Q19
Ch$ 6.7 Tn + 3.2 %
ROTE
Loan
Portfolio 1
Total
Assets 1
2Q19
Ch$ 7.6 Bn + 52.3 %
Ch$ 4.7 Tn + 1.2 %
Recurring
Net Income
7.6% 2.5 p.p.
(1) Evolution in constant currency
14
5.5%3.6%
In Ch$ Billion
+
Highlights
Cost of Credit1Operating 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$ BillionIn 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
45.244.0
44.7
42.9
44.8
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
Non-Interest Expenses1
In Ch$ Billion
79.0 78.381.5
85.182.7
2Q'18 3Q'18 4Q'18 1Q'19 2Q'19
+4.7%
-2.9%
15
(1) Figures in constant currency
4.4%+
-0.9%
Perspectives for 2019
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 increase of retail in loan mix
16
• 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 solicitation or an offer to buy or sell any securities and 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 herein. The information contained herein does not purport to be complete and is subject to qualifications and assumptions, and neither the Bank nor any agent can give any representations as to the accuracy thereof. The Bank and its respective affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material
• Certain statements in this presentation may be considered 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 merger of Banco ItaúChile 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
• These statements are based on the current expectations of the Bank’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 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
• Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to the Bank’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 ItaúCorpBanca’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
• This presentation may not be reproduced in any manner whatsoever. Any reproduction of this document in whole or in part is unauthorized. Failure to comply with this directive may result in a violation of the U.S. Securities Act of 1933, as amended, or the applicable laws of other jurisdiction
• The information contained herein should not be relied upon by any person. Furthermore, you should consult with own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent 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
• The Bank is an issuer in Chile of securities registered and regulated by the Financial Market Commission, or “CMF”. Shares of our common stock are traded on the Bolsa de Comerciode Santiago—Bolsa de 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 hechosesenciales 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.
Disclaimers
17
2nd Quarter 2019 | Earnings Review Conference CallGabriel Moura
Chief Financial Officer
Claudia Labbé
Head of Investor Relations
August 1st, 2019
