Itaú CorpBanca Colombia Institutional Presentation
September 2017 Agenda
1. Itaú Unibanco
2. Itaú CorpBanca
3. Itaú CorpBanca Colombia Itaú Unibanco | At a Glance
Leading position in Brazil through key competitive strengths Financial Highlights and Ratios As of and for the quarter ended September 2017 • USD$ 89.0 billion market cap 1
• 96,326 employees in Brazil and abroad Highlights • 4,919 branches and CSBs in Brazil and abroad Total Assets USD 437.8 Bn • 46,702 ATMs in Brazil and abroad Total Loans(1) USD 166.9 Bn • Brazilian multinational bank Stockholders’ Equity USD 35.8 Bn • Major provider of finance for the expansion of Brazilian companies Recurring Net Income 2016 (2) USD 6.7 Bn • Among the best talent pool in the Brazilian financial system Recurring Net Income 3Q17 (3) USD 1.9 Bn • For the 13th consecutive time Itaú Unibanco was elected by the Interbrand Long Term Foreign Currency Moody’s: Ba3 consultancy the most valuable brand in Brazil (USD$ 8.4 billion in 2016) (Itaú Unibanco Holding) Fitch BB+
Financial Ratios Global Footprint of Brazil’s Top Private Sector Bank | As of Sep. 30, 2017 (4) Recurring ROE 2016 20.3%
(5) Recurring ROE 3Q17 21.5%
(6) Efficiency Ratio 4Q16 44.8%
(6) Efficiency Ratio 3Q17 45.7%
(7) BIS III CET I Ratio 14.7%
(1) Includes endorsements and sureties. (2) Represents Net Income adjusted for certain non recurring events described, please refer to Historical Series Spreadsheet. (3) Represents Net Income adjusted for certain non recurring events described in the 3Q17 MD&A – Executive Summary. (4) Calculated using Recurring Net Income / Average Equity. For annualized calculation method, please refer to Historical Series Spreadsheet. (5) Calculated using Recurring Net Income / Average Equity. For annualized calculation method, please refer to the 3Q17 MD&A – Executive Summary. (6) See “Efficiency Ratio” slides for criteria.
1/ Source: Bloomberg. As of September 2017 | 3 | Exchange rate of BRL 3,1625 / US$1 as of September 30, 2017 Itaú Unibanco | Universal Bank¹
• Approximately 28.8 million credit card accounts and • 4.397 branches and client service branches 25.9 million debit card accounts; and 45.502 ATMs in Brazil; • Leader in Brazilian credit card market, extensive • Premier banking brand in Brazil; number of joint ventures and partnerships with retailers. • Strategically positioned for growth in mortgage market (partnerships with Lopes).
• Total portfolio for individuals of USD$ 4.4 billion;
• Lease and finance through over 12 thousand • Full coverage of corporate clients with dealers; Itaú Unibanco annual sales above USD$ 60 million; • Leadership in IB products with top Risk-based Large distribution positions in major league tables pricing model network • Treasury operations for the • One of the largest players based on direct Leader in Diverse lines of conglomerate premiums; performance in products and • Association with Porto Seguro for auto and Brazil services residential insurance; • Purpose: to be recognized as “the bank Intensive use expert in Latin America” • 3Q17 net income: USD$ 202.7 million. of technology • •Presence in Latin America: Mexico, Colombia, Peru, Paraguay, Chile, • Small and Medium Enterprises with annual sales up to Argentina, Uruguay. USD$ 9.5 million;
• Total assets under administration of • Corporate clients with annual sales from USD$ 9.5 approximately USD$ 296,6 billion; million to USD$ 63.2 million. • Leader in Private banking services in Latin America.
1 As of September 2017 | 4 | Exchange rate of BRL 3,1625 / US$1 as of September 30, 2017 Itaú Unibanco | Global Footprint
Itaú Unibanco has an important presence in key financial centers supported by a unique recognition and reputation
We want to be recognized as: The bank expert in Latin America
CIB London, Lisbon, Madrid, Paris, Frankfurt
Institutional clients / Asset London CIB NY, Cayman, Bahamas Private Banking Zurich Institutional clients / Asset NY, Cayman
Private Banking CIB / Institutional clients / Asset Cayman, Bahamas, Miami Tokyo, Dubai, Hong Kong
CIB Mexico
CIB Brazil, Argentina, Chile, Peru, Colombia, Uruguay, Paraguay, Panamá
Institutional clients / Asset Brazil, Argentina, Chile, Uruguay
Private Banking Brazil, Chile, Paraguay
Retail Banking Brazil, Argentina, Chile, Paraguay, Uruguay, Colombia, Panamá
Highlights
• In line with our Latin America expansion strategy, and with a vision to create value and sustainable performance, in June 2015, the merger of Banco Itaú Chile and CorpBanca was approved by the shareholders’ of both institutions. • In September 2015 the merger was approved by the Chilean regulator. • The transaction creates an important platform for expansion and search for new business in the region. In Chile, it will allow us to move from the 7th to the 4th position in the ranking of the largest banks in terms of loans. • On April 1st, 2016, the merger of operations between Banco Itaú Chile and CorpBanca was consummated (“Legal Day One”).
| 5 | Itaú Unibanco | Retail Footprint in Latin America September 2017
Mexico | CIB Employees: 9
Panamá
Colombia¹ Employees: 3,694 Branches and CSBs : 175 ATMs: 176 Brasil Employees : 82,401 Peru Representative Branches and CSBs: 4,397 office IBBA ATMs: 45,502
Paraguay Chile Employees : 5,972 Employees : 814 Branches: 196 Branches and CSBs : 39 ATMs: 472 ATMs: 311 Non-Bank Uruguay Correspondents : 52 Argentina CIB Employees : 1,120 Minorista Employees : 1,682 Branches and CSBs : 25 Branches and CSBs : 87 Points of Service OCA : 35 ATMs: 178 ATMs: 61
(1) Considers employees and branches from Panama. | 6 | Itaú Unibanco | Evolution and Breakdown of Total Assets
466,5 437,8 USD$ billions 451,3
29.6% Loans ¹ 137,1
Cash, Cash Equivalents and 29.5% 136,9 Short-term Interbank Deposits
28.2% Securities 130,5 10.9% Other 50,6 8,4 1.8% Permanent 2015 2016 3Q17
Securities Breakdown Loans Breakdown 2
Corporate
LatAm Pension Plans Fund Quotas SMEs Domestic Government Bonds Credit Cards Corporate Securities Mortgage (includes individuals and companies) Derivatives Payroll Loans to individuals + BMG International Government Bonds Personal Loans
Vehicles
(1) Net of Allowance for Loan Losses | 7 | (2) Gross Loans, including endorsements and sureties Exchange rate of BRL 3,1625 / US$1 as of September 30, 2017 Itaú Unibanco | Evolution and Breakdown of Funding
Funding from Clients¹ In USD$ millions Without CorpBanca With CorpBanca 537 552 515 520 532 490 Demand and savings Deposits 446 460 465
357 369 353 333 335 Time Deposits + Debentures + 299 310 Funds from Bills 277 284
Assets under administration + Technical Provisions for Insurance 106 108 110 104 105 104 89 97 92 Pension Plan and Premium Bonds 53 54 52 52 52 53 53 55 54
Total funds from Clients + Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Interbank Deposits
(1) Includes institutional clients in the proportion of each type of product invested by them. Ratio between Loan Portfolio and Funding2 (USD Bn, %) % Funding (Maturity Breakdown)
90,3% 89,0% 88,8% 88,9% 90,0% 89,8% 90,8% 85,5% 86,5% 181-365
31-180 78,3% 74,4% 74,4% 76,2% 75,4% 74,3% 74,6% 73,9% 73,9%
30 30 31 30 31 34 34 36 37 Over 365 196 205 191 177 175 165 177157 176157 175155 168151 169152 163148
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 0-30 Funding from Clients Loan Portfolio/ Funding (4) Loan Portfolio(3) Loan Portfolio/ Gross Funding(3) Reserve requirements and Cash
(2) Includes demand, savings and time deposits plus debentures, mortgage-backed notes, onlending, borrowings, funds from acceptance and issuance of securities abroad, net of reserve requirements and available funds; (3) The loan portfolio balance does not include endorsements and sureties. (4) Gross funding, ex-deductions of reserve requirements and cash and cash | 8 | equivalents Exchange rate of BRL 3,1625 / US$1 as of September 30, 2017 Itaú Unibanco | Recurring ROE
Consolidated ROE / ROA
24.9% 24.9% 24.8% 24.8% 24.7% 24.7% 24.5% 24.5% 24.1% 24.1% 22.1% 22.1% 20.6% 20.6% 19.6% 19.6% 19.9% 19.9%
1.8% 1.8%1.8% 1.8%1.7% 1.8% 1.8%1.8% 1.7% 1.8%1.6% 1.6%1.4% 1.4%1.6% 1.6%1.6% 1.6%
3Q14 3Q144Q14 4Q141Q15 1Q152Q15 2Q153Q15 3Q154Q15 4Q151Q16 1Q162Q16 2Q163Q16 3Q16
AnnualizedAnnualized Recurring RecurringAnnualized ReturnReturn Recurring on AverageAverage Return Equity Equity on Average (quarterly) (quarterly) Equity (quarterly)Annualized RecurringAnnualizedAnnualized Return Recurring Recurring on Average ReturnReturn Assets on AverageAverage (quarterly) Assets Assets ( quarterly)(quarterly)
Brazil ROE ¹
25.5% 25.5% 25.4% 25.1% 24.2% 22.8% 20.7% 21.1% 20.8%
3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
AnnualizedAnnualized Recurring Recurring Return onon Average Average Equity Equity (quarterly (quarterly)
(1) Includes units abroad ex-Latin America | 9 | Itaú Unibanco | Efficiency and Risk-Adjusted Efficiency Ratios
72,4 69,8 69,6 68,6 63,4 65,5 64,5 63,4 63,3
48 47,3 44,0 45,8 43,6 44,9 44,8 43,6 45,7
67,7 69,3 70,1 68,2 62,8 63,7 65,9 66,6 65
44,2 44,0 44,1 44,6 45,6 45,3 45,3 45,5 45,3
3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Trailing 12-month Efficiency Ratio (%) Trailing 12-month Risk-Adjusted Efficiency Ratio (%) Quarterly Efficiency Ratio (%) Quarterly Risk-Adjusted Efficiency Ratio (%)
Risk-Adjusted Non-Interest Expenses (Personnel Expenses + Administrative Expenses + Operating Expenses + Other Expenses) + Cost of Credit = Efficiency Ratio (Managerial Financial Margin + Commissions and Fees + Result of Insurance, Pension Plan and Premium Bonds – Tax Expenses for ISS, PIS, Cofins and Other Taxes)
| 10 | Itaú Unibanco | Information Technology
Evolución de clientes en canales remotos
Clients (millions)
(1) Standard channels: Branches, ATM, Telephone. (2) Electronic Remote Channels: Mobile and Internet | 11 | Agenda
1. Itaú Unibanco
2. Itaú CorpBanca
3. Itaú CorpBanca Colombia Itaú CorpBanca | Highlights
We are the 4th largest private bank in Chile and the 5th 1 banking group in Colombia
Regional footprint & main indicators Itaú CorpBanca 2 3 September 30, 2017 3
Itaú (Panamá) Itaú CorpBanca US$ 4.6BN 4 Assets: US$ 0.6 BN Colombia Market Cap Headcount: 52 Assets: US$ 10.3 BN 8 Headcount: 3,636 US$ 45.6BN 34.7 10.9 Branches: 175 Assets 25.0 7.68 US$ 32.6BN Loans 11.05 5.25 Market Share Itaú CorpBanca Rep Office Perú Started operation on November 1, 2017 9,662 5,9746 3,6887 Headcount #
384 209 175 Branches # Itaú CorpBanca Chile Assets: US$ 34.7 BN 3 3 Headcount: 5,974 US$ 58.5BN 118.1 (59.6)3 Recurring Net Income 2016 Branches: 219
US$ 5.0BN 3 9.03 (4.0)3 Recurring Net Income 3Q17
2.2% RoTAE8 6.2% -7.9% Recurring RoTAE8 2016
0.7% RoTAE8 1.6% -2.6% Recurring RoTAE8 3Q17
1 Ranking for assets and loans consider Grupo Aval as the combination of Banco de Bogotá, Occidente, Popular, AV Villas; 2 Consolidated information as of September 30, 2017; 3 Figures were converted at an exchange rate of 639.14 CLP/USD; 4 As of November 9, 2017; 5 As of September 30, 2017; 6 Includes employees of Itaú CorpBanca New York Branch as of September 30, 2017; 7 Includes Panamá as of | 13 | September 30, 2017; 8 Tangible Equity: Shareholders equity net of goodwill, intangibles from business combination and related deferred tax liabilities; 9 Considers assets, headcount and branches for Chile only. Sources: Itaú CorpBanca, SBIF and SFC. Itaú CorpBanca | Relevance in LatAm and South America
Itaú CorpBanca is currently the 4th largest private bank in Chile. The merger positions Itaú CorpBanca and Itaú LatAm as the 3rd largest bank in terms of assets within South America (ex-Brazil) Banks by Assets in Latin America 1 Banks by Assets in South America (ex-Brazil) 5 US$ BN US$ BN
Santander Itaú Unibanco 438 1 Itaú Unibanco2 1 Santander 68 2 Banco do Brasil Banco do Brasil 437 2 BBVA BBVA 61
Banco del Estado 3 Caixa Caixa 386 3 Banco del Estado de Chile de Chile 55 4 Bradesco3 Bradesco 366 4 Itaú LatAm6 Itaú LatAm 54 5 Santander Santander 332 55. Grupo Aval Grupo Aval 49
68. BBVA BBVA 168 6 Banco de Chile Banco de Chile 49
7 Citibank Citibank 64 7 BCI BCI 48
89. Scotiabank Scotiabank 59 8 Bancolombia Bancolombia 47
Banorte 97. Banorte 55 9 Itaú CorpBanca4 Itaú CorpBanca 44
4 Itaú CorpBanca Banco de Crédito 16 Itaú CorpBanca 44 10 Banco de Crédito del Perú del Perú 37
Loan Portfolio as of Sep. 2017
US$ BN7
Itaú CorpBanca represents 22% of Itaú Unibanco’s consolidated loan portfolio 7
Itaú Unibanco's Itaú CorpBanca's Loan Portfolio 8 Loan Portfolio
1 Data as of June 30, 2017. Includes Brasil, México, Argentina, Perú, Chile and Colombia; 2 Includes Brasil, México, Argentina, Perú, Uruguay, Paraguay, Venezuela, Chile y Colombia; 3 Since September 30, 2016 Bradesco consolidates with HSBC Brasil; 4 Includes Chile y Colombia (Itaú CorpBanca Chile with ~US$35MMM in assets); 5 Data as of June 30, 2017. Includes Argentina, Perú, Chile y Colombia; 6 Includes Argentina, Perú, Uruguay, Paraguay, Venezuela, Chile y Colombia; 7– Considering the consolidated loan | 14 | portfolios of Itaú Unibanco and Itaú CorpBanca reported in their respective 3Q’17 MD&As and a R$ 3.1663 / US$ and a Ch$ 639.14 / US$ foreign exchange rates as of 30.09.2017; 8– As of September 30, 2017, Itaú Unibanco held a 36.06% equity stake in Itaú CorpBanca but as the controlling shareholder, fully consolidates Itaú CorpBanca’s Financial Statements.
Source: Central Banks , local regulators, companies filings, Itaú CorpBanca.
Introduction | Shareholders Structure after Merger
Shareholders - % Total share capital 4th largest Market Cap among Peers
July 31, 2017 August 11, 2017 ITAÚ CORPBANCA #4 Total shares: 512,406,760,091(100%) 13,79 13,73
Itaú Saieh IFC Others Unibanco Family1
35.71% 31.00% 3.32% 29.97% 7,68 US$BN
ADRs holders and Foreign investors 10.84% 4,73 Securities Brokerage 8.69% Santo Domingo Group 1.92% Insurance Companies 1.07% AFPs 0.52% 1,47 Other minority shareholders 6.93%
PEER-A PEER-B PEER-C ITAUCORP PEER-D 1- Includes 182,125,023 shares owned by Cía. Inmobiliaria y de Inversiones Saga SpA that are under custody.
Note: Figures were converted at an exchange rate of Ch$646.96 US$1 (as of August 11, 2017). | 15 | Source: Itaú CorpBanca & Santiago Stock Exchange. Introduction | Strong and integrated Corporate Governance
Board Chile Audit Committee
Itaú CorpBanca CEO CAE Emerson Bastián Milton Maluhy
CFO CRO Treasury Marketing & Colombia Wholesale Retail Human Legal & IT & Products Resources Compliance Operations Álvaro Christian Julián Gabriel Mauricio Pedro Rogério Pimentel Tauber Acuña Marcela Cristián Luis Moura Baeza Silva Braga Jiménez Toro Rodrigues 3
Board Colombia Chairman Milton Maluhy Itaú CorpBanca Colombia CEO Álvaro Pimentel
CFO CRO Treasury Communic. Franchise, Products Wholesale Retail Human Legal & General IT Operations & Institut. Relat. & Digital Resources Secretary
María C. Edson Derek Carolina Luciana Jorge Claudia María Lucía Dolly Murcia Lilian Liliana Vandame Da Silva Sasoon Velasco Hildelbrandi Villa Vélez Ospina Barrios Suárez
Board Chile 1 2 Board Colombia Chairman Chairman Matrix reporting to CEO Colombia Jorge Andrés Saieh Guzmán Milton Maluhy and functional reporting to ITCB
Ricardo Villela Marino Fernando Concha Ureta Roberto Brigard Holguín Juan Echeverría González Functional reporting to CEO Eduardo Mazzilli de Vassimon Jorge Selume Zaror Luis Fernando Martínez Lema Gabriel Moura Colombia and matrix reporting to ITCB for coordination of specific Boris Buvinic Guerovich Fernando Aguad Dagach Carmiña Ferro Iriarte Rogério Braga themes Andrés Bucher Cepeda Gustavo Arriagada Morales Rafael Pardo Soto Mónica Aparicio Smith Pedro Samhan Escandar 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. 3- | 16 | Responsible for the technological integration process in Colombia
Ratings | Improvements will contribute to lowering cost of funds
Current International Ratings
Moody's S&P Timeline S&P Rating Scale Rating Scale Financial Capacity LT ST LT ST
Extremely A+ A+ A+ A+ Aaa AAA strong
Aa1 AA+ A A-1+ A Very Aa2 AA A A A strong P-1 Aa3 AA- A- A- A-
A1 A+ A-1 BBB+ Strong A2 A BBB+ BBB+ A3 A- P-2 A-2 BBB BBB Baa1 BBB+ +3n +1n Adequate Baa2 BBB
P-3 A-3
2010 2008 2009 2011 2012 2013 2014 2015 2016 2017 Baa3 BBB- 2007
Source: Itaú CorpBanca, Moody’s, S&P | 17 | Agenda
1. Itaú Unibanco
2. Itaú CorpBanca
3. Itaú CorpBanca Colombia
Itaú CorpBanca Colombia | Our History
In the last years we have had interesting experiences and learned to know people, their tastes, their customs and their dreams. After one century Itaú arrives to Colombia, we are working in having a bank made for you.
Change in the controlling Shareholder, Introduction of Itaú brand and acquisition of Assets and Liabilities from Itaú BBA 1 Footprint 2017 2 Assets: USD 10,2 Bn # Headcount: 3.604 # Branches: 176
Acquisition of Helm Bank and its subsidiaries Footprint 2014 3 Assets: USD 9,3 Bn. # Headcount: 3232. # Branches: 170
Acquisition of Santander and brand change: Banco CorpBanca Footprint 2012 Assets: USD 3,0 Bn. Headcount: 1500. # Branches: 82
Banco Santander in Colombia Highlights 2011 Assets: USD 2,6 Bn. # Headcount: 1367. # Branches: 77
Source: Itaú CorpBanca Colombia,
| 19 | 1. Itaú CorpBanca Colombia acquired the Assets and Liabilities from Itaú BBA Colombia at their book value. Transaction approved by the SFC on April 2017. Assets book value of COP 398 thousand millions and Liabilities book value of COP 84.5 thousand millions as of February 2017. 2. Numbers as of June 2017 3. Helm CorpBanca Legal merger took place on June 2014
Itaú CorpBanca Colombia | Highlights
Bank #6 in Colombia, with over 485 thousand clients1 and presence in 30 locations in Colombia and one in Panama.
Itaú CorpBanca Colombia’s Footprint as of September 30, 2017
MS: 5,1% 2 #Player: 6 TIER I: 9,35% USD$ 11BN Total Capital Ratio: 12,68% Assets NPLs 30-days: 3,7% Net Inc. FY16: USD~ -51,39 MM USD$ 7BN Net Inc. 3Q17: USD~ -32,12 MM Gross Loans
485M Clients # 3.636 Headcount # 2 176 ATMs # 175 Branches # Two brands in Colombia
Source: Itaú CorpBanca Colombia, Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 | 20 | 1: Depuration in the number of accounts due to the technologic migration process. 2. Bank and subsidiaries. includes Panamá Itaú CorpBanca Colombia | Shareholders Structure
On May 22nd 2017 the Itaú brand was introduced in Colombia. The Bank and it’s subsidiaries changed their legal names.
Shareholders Structure Financial Group in Colombia
Itaú Itaú CorpBanca Itaú Corredor CorpBanca CorpGroup Helm Minority Colombia de Seguros en Chile
66.28% 12.36% 20.82% 0.54%
94.0% 94.5% 95.0% 100%
Itaú Itaú Securities Itaú Fiduciaria Comisionista Itaú (Panamá)1 Itaú CorpBanca Services Colombia de Bolsa
100%
Itaú Casa de Valores (Panamá)
Source: Itaú CorpBanca Colombia | 21 | 1 Itaú (Panamá) has International License Itaú CorpBanca Colombia | Risk Ratings
Itaú CorpBanca Colombia has an Investment Grade rating of BBB-, and two local ratings in Colombia: one AAA and one AA+
FITCH S&P Moody´s
BBB / Stable BBB / Negative Colombia Sovereign Baa2 / Stable Mar./2017 Jan./2017 May./2016
Banco CorpBanca Colombia BBB- / Negative IDR (Issuer Default Rating) Apr./2017
Banco CorpBanca Colombia AA+ / Negative AAA / Stable National, Long-Term Apr./2017 Mar./2017
Banco CorpBanca Colombia F1+ BRC 1+ National, Short-Term Apr./2017 Mar./2017
Fitch’s sustains its rating downgrade in national scale on the deterioration in loan-portfolio quality and profitability. Fitch includes a Target Profit to regain Stable outlook. AA+ Banks in Colombia: Sudameris, Finandina, Procredit
| 22 | Source: Itaú CorpBanca Colombia, rating agencies, FitchRatings, INC Itaú CorpBanca Colombia | Loan Provisions
The Bank made relevant LLPs on 4Q16. In 2017 the expense returns to previous levels, ending with a Ratio of LLP / Gross Loans equal to the average of Banks
LLP Expense / Gross Loans (%) 1
1,8
1,0 0,7 0,7 0,8 0,6 0,6 0,7 0,8 0,8 0,8 0,7 0,6 0,5 0,6 0,5 0,6 0,6 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Itaú Total Banks
Risk Indicator = Allowance for Loan Losses / Gross Loans (%)
5,5 5,3 5,2 5,0 4,6 4,7 5,5 4,3 4,4 4,5 5,2 5,0 4,7 4,8 4,3 4,3 3,9 4,0
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Itaú Total Banks
Source: Superintendencia & Itaú CorpBanca Colombia | 23 | 1. Quarterly Expense Itaú CorpBanca Colombia | Credit-Risk Ratios
2017 shows an increase in the loan-portfolio quality of the average of banks, in NPLs as well as B,C,D,E Loans. Itaú CorpBanca maintains better quality and coverage levels than the total banks for NPLs. The system increased its B, C, D, E Loans decreasing the gap with Itaú CorpBanca.
NPLs 30 days (%) B, C, D, E Loans / Gross Loans (%)
4,2 4,4 3,9 9,8 9,9 9,9 10,0 3,1 3,3 9,0 3,0 2,8 3,0 3,1 3,7 3,5 9,4 9,6 3,2 3,0 7,1 8,9 2,9 6,3 6,5 6,8 2,4 2,5 2,5 7,8 2,2 7,1 7,2 6,5 6,6 5,9
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Itaú Total Banks Itaú Total Banks
Coverage (%) 1 B, C, D, E Loans Coverage (%)
185,7 179,6 68,5 67,8 169,2 171,5 66,5 163,9 164,5 64,0 64,9 61,6 150,5 145,1 146,8 66,3 65,5 55,7 56,9 155,9 155,5 61,9 55,3 150,7 60,8 146,7 143,7 55,0 142,8 54,1 128,2 52,8 53,3 125,2 124,9 50,3 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Itaú Total Banks Itaú Total Banks
Source: Superintendencia & Itaú CorpBanca Colombia, | 24 | 1: Loan Loss Provisions / Past Due loans above 30 days Itaú CorpBanca Colombia | Loan-portfolio quality by type
The Bank has been no stranger to the increase in the loan-portfolio quality of the Financial system in Colombia. Still, it maintains levels of past due loans above 30 days, below those of the average of total banks.
Commercial >30 days (%) 3,5 3,8 3,3 3,3 2,3 2,1 2,4 2,2 2,8 3,4 3,6 2,5 2,9 2,3 2,3 1,9 1,8 2,2
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Itaú Total Banks
Consumer >30 days (%)
5,8 5,9 5,4 4,8 4,8 4,8 4,9 4,5 4,4
4,8 4,9 4,2 4,1 4,1 4,2 3,7 3,9 3,9
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Itaú Total Banks
Mortgage >30 days (%) 1
2,7 2,9 2,2 2,3 2,4 1,9 2,0 2,0 2,1
2,0 2,0 1,4 1,4 1,5 1,6 1,1 1,1 1,2 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Itaú Total Banks
Source: Superintendencia & Itaú CorpBanca Colombia | 25 | 1. Includes past due payments from 1 to 4 months Itaú CorpBanca Colombia | Net Interest Margin
Taking into account the downward cycle of the interest rates from the Central Bank at the end of 2016, where the reference rate dropped by 225 during 2017, the Bank’s NIM has increased 50 bps on average.
NIM (%) 1 5,2 2015 Average NIM 2015 4,0 2016 Average NIM 4,5 2017 Average NIM
7,50 7,50 7,75 7,75 7,75 7,75 7,50 7,50 7,00 7,25 7,25 7,00 7,00 6,50 6,00 6,25 6,25 6,25 5,50 5,75 5,50 5,50 5,24 5,25 5,25
4,91 4,83 4,72 4,81 4,78 4,75 4,69 4,69 4,41 4,40 4,51 4,57 4,43 4,24 3,96 4,17 4,04 4,07 4,20 4,09 4,16 4,01 3,66 3,39 3,40
NIM CenBank Rate
Loans and Deposits Implicit Rates (%)
13% 12% 11% 11,09 10% 9% 8% 8,18 7% 7,22 6% 5% 5,25 4% 4,34 3%
Loans Bonds TDs CanBank Savings
Fuente: Superintendencia & Itaú CorpBanca Colombia | 26 | 1 NIM Loans Interest – Deposits Interest expenses / Gross Loans. Includes the cost of bonds, rediscounted loans and foreign currency loans. Annualized monthly NIM Itaú CorpBanca Colombia | Funding Evolution
In 2017 The Bank mantains its funding structure with 61% in time deposits and bonds. The proportion of value at risk on the capital adecuacy ratio has decreased. The Bank is using hedges as an instrument to reduce risk.
Funding Mix (%)
7 8 7 8 10 12 12 12 11
42 40 40 49 53 51 53 50 50 Bonds TDs Savings 42 44 43 36 Checking 30 28 27 31 31
11 9 9 9 8 8 8 8 7 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
VaR weight on capital adequacy ratio (USD millions, %)1
1,4% 1,3% 1,3% 1,3% 1,2% 1,2% 1,1% 1,1% VAR 0,9%
1,0% Ratio Itaú 0,9% 0,9% 0,9% 0,9% 0,9% 0,9% 0,8% 0,7% Ratio Banks 76,4 77,9 86,7 74,6 75,1 51,0 60,5 63,5 66,0
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Source: Superintendencia & Itaú CorpBanca Colombia, | 27 | 1 Total Capital Adequacy ratio minus capital adequacy ratio without VaR. Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 Itaú CorpBanca Colombia | Term Deposit Certificates
As of September 2017 The Bank has TDs for USD $3,5 billion where 55% of them have duration of 18 months or more. The average duration for The Bank’s TDs went from 0,46 years to 0,82 years between Sep. 2016 and Sep. 2017. As of August, the System shows a similar composition where 52% of the TDs have a duration over 1,5 years.
TDs by duration - Itaú (%, USD billion) TDs by Duration – Banks (%, USD billion)
sep-16 sep-17 sep-16 sep-17
17% 14% 18% 17%
42% 15% 47% 52% 17% $3,9 20% 55% $3,5 $44,1 20% $50,2
15% 14% 21% 15%
Less than From 6 months and From 12 months and 18 months Less than From 6 months and From 12 months and 18 months 6 months less than 12 months less than 18 months or more 6 months less than 12 months less than 18 months or more
Source: Superintendencia & Itaú CorpBanca Colombia | 28 | Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 Itaú CorpBanca Colombia | Funding mix and Loan Portfolio
The Bank’s funding mix has a greater share of term deposits and bonds compared to that of the total banks, showing convergence of its liquidity indicators towards Basel III. In the composition of loans by type The Bank is similar to the average of the system. At the moment The Bank´s focus in terms of Loan Portfolio is profitability more than growth in market share. Funding Mix (USD Bn,%) Gross Loans by type (USD Bn,%)
Itaú CorpBanca Sep/17: 7,0 Bn Itaú CorpBanca Sep/17: 7,3 Bn Growth 2016/2017: -5,2% Growth 2016/2017: -2,0%
TDs 50% -11,1% Commercial 66% -3,3%
Savings 31% +1,1% Consumer 23% -2,3%
Bonds 11% +8,1% Mortgage 11% +6,5%
Checking 8% -5,6% Microloans
Banks Sep/17: 136,9 Bn Banks Sep/17: 139,6 Bn Growth 2016/2017: +9,7% Growth 2016/2017: +10,3%
TDs 37% +13,2% Commercial 57% +9,4%
Savings 40% +7,0% Consumer 27% +9,5%
+10,5% Bonds 12% +18,1% Mortgage 13%
+7,2% Checking 12% +9,0% Microloans 3%
Source: Superintendencia & Itaú CorpBanca Colombia | 29 | Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 Itaú CorpBanca Colombia | Loan Portfolio
3% 5% 2% 6% 32%
1 10% Loans by Segment As of September 2017 the bank has 7 customer segments
33%
32% 33% 10% 6% Corporate Individuals Medium Enterprises Small Enterprises
5% 2% 3% Construction Institutional Private Banking
Source: Itaú CorpBanca Colombia | 30 | 1. Gross Loans Itaú CorpBanca Colombia | Liquidity
Itaú CorpBanca strengthened its liquidity management, sufficiently fulfills regulatory indicators and maintains a ratio of Net Loans over Funds below one. The Bank manages its liquidity under Basel III standards with an LCR above 100%
Liquid Coverage Ratio - IRL 30 days - (USD Bn)
600% 550% 500% 450% 400% 350% 300% 250% 239% 200% 150% 100% 8/1/16 7/2/16 8/3/16 7/4/16 7/5/16 6/6/16 6/7/16 5/8/16 4/9/16 4/10/16 3/11/16 3/12/16 2/1/17 1/2/17 3/3/17 2/4/17 2/5/17 1/6/17 1/7/17 31/7/17 30/8/17 29/9/17
Ratio between Loan Portfolio and Funding (%, USD billion)1
97,3% 95,4% 93,9% 96,3% 95,2% 97,7% 89,4% 92,5% 90,5%
Net Loans
Deposits
7,8 7,8 6,9 7,1 6,9 7,0 7,5 7,1 7,1 7,4 6,9 7,4 6,9 7,2 7,0 7,3 6,9 7,0 Ratio
Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17
Source: Itaú CorpBanca Colombia, | 31 | 1: Funding: Savings and Checking accounts, Term Deposit and Bonds Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 Itaú CorpBanca Colombia | Capital Ratios
Itaú CorpBanca shows a Regulatory Capital above required levels with a Tier 1 of 9,0% (regulatory minimum of 4,5%).
Non-consolidated regulatory capital ratio Sep/17 (USD MM, %) Consolidated regulatory capital ratio Jun/17 1 (%)
12,7% 21,6%
9,4% Non- 1.043 1.079 15,8% 247 268 15 Consolidated 15,5% 13,3% 12,7% 796 Tier1+Tier2 Consolidated 14,3% 14,2% 12,8% 12,6% 12,2%
Tier 1 Consolidated 10,3% 10,2% 9,4% 9,0% 7,8%
Tier 1/ Good will Tier 1 Subordinated Other Regulatory Bancolombia Bogotá Occidente Davivienda Itaú Deductions Debt Capital
Source: Superintendencia & Itaú CorpBanca Colombia | 32 | Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 1: Source: Annual reports of each bank. Itaú CorpBanca Colombia | P&L 1Q2017 and Profitability Ratios
So far on 2017 the bank shows losses of USD 32 million. LLPs increase according to the market’s situation, expenses are affected by brand change, technological integration and fiscal reform.
Net Income Sep. 2017 (USD millions)
615,2 318,3
35,5 32,7 159,3 116,4 89,3 31,5 0,6 -32,1
Interest Income Derivatives Net Interest Administrative Personnel Other Net from Loans and and portfolio Commissions Net LLP Taxes Expense expenses expenses Expenses Income Leases income and fees Annual Growth +3% -6% -64% -7% -6% +13% +15% +31% -97%
ROE & ROA (%)1
510,97 7,84 5,94 ROE 2,73 0,93 0,7 1,32 ROA 0,32 Dec-0,47-16 Mar-17 Jun-17 Sep-17 Mar-16 Jun-16 Sep-16 -0,77 -0,99 -0,79 System -4,03 -6,55 -6,84 -8,43
Source: Itaú CorpBanca Colombia 1 - 12 months net Income over 12 months average of equity and assets | 33 | Exchange rate of COP 2936,67 per 1 USD as of September 30, 2017 Itaú CorpBanca Colombia Institutional Presentation
September 2017