Deposits - BBVA Continental

Investors Report
Fourth Quarter 2015
Disclaimer
This document has been elaborated as a part of the information policies and transparency of BBVA
Continental and contains public information, own source and provided by third parties, that can be
corroborated with their sources.
This document has been prepared solely for informational purposes and does not constitute an
offer, or invitation or solicitation of an offer to subscribe or purchase securities. This document and
its contents does not constitute the basis for any contract or commitment.
This document may not be photocopied, reproduced and/or distributed in whole or in part, without
prior authorization from BBVA Continental.
Sections
1
2
3
4
5
6
Peru: Attractive economy and financial system
Organization
BBVA Continental vs. Peers
Ratings
Social responsibility and Awards
Appendix
Peru:
Attractive economy &
financial system
Peru: one of the most stable and fastest-growing economies
in the region…
Peru is one of the economies with fastest
growth in Latin America…
GDP growth
…with one of the lowest inflation rates in the
region
Inflation
6.9%
4.8%
4.6%
5.5%
5.4%
3.9%
3.6%
3.7%
2.8%
3.5% 3.7%
2.5%
2.0%
3.6%
3.2%
3.5%
3.2%
1.8%
1.2%
Peru
Mexico
Colombia
2011 - 2015 Average
Source: Central Bank of Peru & BBVA Research
Chile
2016 Projected
Brazil
Brazil
Colombia
Chile
2011 - 2015 Average
Peru
Mexico
2016 Projected
5
…sovereign investment grade, relatively stable currency and
low levels of debt
Ratings
AABBB+
BBB+
BBB
Investment Grade: BBB-
Public Debt as a percentage of GDP
43.5%
BB+
BB
Average debt of the General Government /GDP for countries
with BBB+ rating for 2013
CCC
22.1%
SDu
21.2%
20.4%
20.1%
Source: Standard & Poor’s
19.6%
Currency depreciation against USD
5%
0%
-5%
-10%
-12.73%
-14.30%
-14.39%
-15%
2011
2012
2013
2014
3T15
Source: Central Bank of Peru
-20%
-25%
-25.14%
-30%
-32.90%
-35%
Jan-15
Mar-15
Chile
Source: Bloomberg
Brasil
Jun-15
Colombia
Sep-15
Mexico
Dec-15
Peru
6
Peru has a solid Financial System with great opportunities of
expansion…
The Peruvian Banking System has shown
strong growth…
…with great potential for future expansion
Performing loans and Deposits
Loans to private sector as a percentage of GDP
PEN thousands of millions
2014
CAGR
109%
15.9%
CAGR
14.5%
L: 15.9%
D: 14.5%
218
186
164
140
170
211
178
69%
140
53%
17.2%
34%
18.4%
Dec-12
Dec-13
Loans
Dec-14
Dec-15
Chile
Brazil
Colombia
Peru
31%
Mexico
Deposits*
*Other obligations are excluded from deposits
Source: Superintendencia de Banca, Seguros y AFP
Source: World Bank. Last available information.
7
…and an active Central Bank, which promotes PEN denomination of
Loans
Objective: Reducing credit exchange rate risk
Central Bank Mesures:
PEN - denominated Loans and Deposits at the
Banking System
Additional Legal Reserve
Requirement for Derivatives
to reduce the upward
pressure on exchange rate.
3.50
3.41
67%
3.40
3.30
65%
63%
3.18
60%
58%
3.20
USD
70%
Additional Legal Reserve
Requirement in foreign
currency (FC) for growing
FC loans.
3.10
58%
57%
Increase in the marginal
reserve requirement in FC.
3.00
Increase the legal reserve
requirement in FC linked to
targets to reduce loans in FC*.
56%
55%
55%
53%
2.78
50%
2.70
49%
50%
2015
2016
52%
2.80
53%
Steady reduction of the legal reserve requirement in
PEN in order to encourage loan growth in PEN
2.70
49%
50%
2.67
2.60
47%
2.55
45%
2014
2.80
2.80
53%
2013
2.90
2.50
PEN
50%
2.98
54%
New Currency Repos to
convert liquidity in FC to
liquidity in PEN.
Auction of
deposit of the
Public Sector.
Loans PEN
Deposits PEN*
*Other obligations are excluded from deposits
Source; Superintendencia de Banca, Seguros y AFP
Tipo de cambio
*Excluded operations higher than USD10MM and 3 years (before 4 years) from June 2015 .
Source: Banco Central de Reserva del Perú, BCRP
8
Organization
Shareholders
BBVA Continental and Subsidiaries are part of the Economic Group formed by Holding Continental,
whose shareholders are BBVA Group and Breca
Breca
Group
BBVA Group
50.00%
BBVA Consumer
Finance
50.00%
36.00%
Holding Continental
Comercializadora
Corporativa
Others
99.998%
92.24%
7.76%
BBVA Continental
0.002%
100.00%
IRCSA
Source: BBVA Continental.
100.00%
Continental
Bolsa
100.00%
Continental
Titulizadora
100.00%
Continental
Fondos
10
BBVA Group
Appropriate balance between developed and emerging markets that allows the BBVA Group to diversify
its sources of income by providing a high degree of recurrence in their results
31
Countries
750 €
51
Billion
In Assets
Million
Customers
United States
Leader Regional Bank
in the Sunbelt
Spain
North America
1st. / 2nd.
• USA
• Mexico
Mexico
Market leader
South America
• Argentina
• Bolivia
• Brazil
•Chile
• Colombia
• Paraguay
• Peru
• Uruguay
•Venezuela
South America
1st. / 2nd.
9,145
137,968
Branches
Employees
Turkey
Asia / China
Strategic participation
In Garanti Bank
Strategic alliance
Asia – Pacific
• Abu Dhabi, UAE
• Australia
• China
• India
• Japan
• Singapore
• South Korea
• Taiwan
• Indonesia
Europe
• Belgium
• France
• Germany
• Italy
• Portugal
• Russia
• Spain
• Switzerland
• Turkey
• U.K.
Gross Income Dec-15 (1)
Developed
Emerging
Weight: 42%
Weight: 59%
YoY var.:+4.3%
YoY var.: +21.1%
Source: BBVA Group
1/ Excludes Corporate activities; YoY change in constant Euros
South America:
18.9% of BBVA
Group’s Gross
Income
11
Breca
Business group founded by the Brescia Cafferata family, is one of the largest business conglomerates
in Peru, with operations in Peru, Chile and Brazil
Board of
Directors
Management
Committee
FINANCIAL
SERVICES
INSURANCE
AND HEALTH
INDUSTRY
MINING
TOURISM
REAL ESTATE
FISHING AND
AGROINDUSTRY
SPECIALIZED
SERVICES
Marcobre
12
Peruvian Financial System
December 2015
Institution
PEN Million
Financial system
Banking system
Banks (17)
Banco de la Nación
Other financial
institutions
Cajas Municipales (12)
Financieras (12)
Cajas Rurales (7)
Edpymes (12)
Leasing (2)
COFIDE
Agrobanco
Net loans
Dec-15
Deposits
Dec-15
Net Income
Dec-15
216,684
10,198
210,767
24,892
7,040
741
13,472
8,404
415
1,705
442
7,000
1,550
14,603
4,995
489
235
-
355
277
-18
-3
8
82
17
The four largest banks concentrate around 83% of the banks loans and deposits
13%
Loans
Loans
Net Income
Deposits
87%
92%
92%
Banking System
*Other obligations are excluded from deposits
Source: Superintendencia de Banca, Seguros y AFP
8%
8%
Other Financial Institutions
13
Key performance indicators of BBVA Continental:
December2015
Leading
Bank in
Peru
Strong
shareholders
BBB (S&P)
A- (Fitch)
Operates in one of the
most attractive economies
of the region
Peru, one of the most dynamic and attractive economies in the region
BBVA Continental: second largest bank in the country and leading
institution for over 60 years
Strong shareholders: BBVA Group, leading global financial institution,
and Breca, one of the largest business conglomerates in Peru
Ranking among the 4 largest banks in terms of assets.
Source: Superintendencia de Banca, Seguros y AFP
#1 in Cost of risk*
#1 in NPL ratio
#1 in Coverage ratio
1.42%
2.17%
203.57%
#3 in profitability
ROE: Annualized net income / Average
equity
23.92%
#3 in efficiency
38.92%
#2 in assets
S/.81,116
million
#2 in performing loans
S/.47,788
million
#2 in deposits***
S/.47,287
million
#2 in number of branches
331
*Cost of risk: Provisions for the last 12 months between total loans (average of the last 12 months).
**Other obligations are excluded from deposits.
14
BBVA Continental
vs.
Peers
Strong banking platform
December 2015
Distribution network:
One of the largest in the country
Evolution in transactions per channel
2015
2008
7%
9,263 points of service
More than 4.5 million customers
26%
32%
1%
Ranking
Market
vs.
Share
Peers
7,200
7,155
3,552
4,071
2nd
17.4%
5,207
21%
5%
15%
9,263
25%
24%
18%
26%
Branches
Internet Banking
ATM
Mobile Banking
Express Agent
Others**
Digital Banking:
Our objective: To be the leading Digital Bank in the region
Online forms to apply for LifeMiles credit cards
1,974
2,330
More digital campaigns: Online registration
1,777
3rd
14.4%
1,290
1,671
Lending platform
1,444
288
297
322
331
2nd
15.4%
Improvements in the user experience on the web
Dec-12
Dec-13
Dec-14
Dec-15
Express agents*
ATM*
Branches
* ATM & EA as of September 2015, last available public information.
** Other channels include Telephone Banking, POS, Net Cash and Automatic debit.
Source: Superintendencia de Banca, Seguros y AFP & BBVA Continental
16
Outstanding growth
PEN Million
Deposits*
Performing loans
CAGR
13.5%
13.7%
13.7%
19.4%
47,287
47,788
42,041
38,510
32,698
237
1,149
2,126
7,149
1,491
84
1,154
2,132
66
1,191
2,254
9,562
8,433
1,199
1,412
3,046
36,811
32,178
1,201
2,262
2,788
16,011
2,815
12,607
12,171
9,816
12,480
9,308
9,505
7,956
28,230
10,851
21,825
24,212
17,437
6,562
Dec-12
39,607
10,391
9,094
8,869
5,116
105
1,548
2,419
12,803
8,032
7,824
Dec-13
Dec-14
Dic-15
Corporate
Large enterprise
Middle enterprise
SME
Mortgage
Consumer
Credit card
Microfinance
*Other obligations are excluded from deposits
Source: Superintendencia de Banca, Seguros y AFP
Dec-12
Dec-13
Demand + Saving
Dec-14
Term
Dec-15
CTS
17
Performing loans
Retail customers
10.4%
PEN Million and percentage (%)
-67 bps
BBVA Continental shows steady loan growth…
14,358
13,007
Performing loans
20.24%
19.57%
13.7%
Dec-14
Loans
-29 bps
47,788
42,041
Dec-15
Market share*
Banking System
73,380
Annual variation
14.2%
Business customers
22.17%
15.1%
21.88%
-11 bps
33,430
29,034
Dec-14
Dec-15
Loans
Banking System
Annual variation
23.16%
23.05%
Market share*
218,437
15.2%
Dec-14
Loans
Banking System
*Market share of December 2014 affected by the inclusion of Edyficar in the Banking System (February 2015).
Source: Superintendencia de Banca, Seguros y AFP
Annual variation
Dec-15
Market share*
145,058
15.7%
18
High quality of loan portfolio
Loans by economic sector
December 2015
Construction
3%
Utilities
4%
Agriculture and
livestock
4%
Mining
6%
Loans breakdown
0.2%
3.2%
5.1%
1.4%
7.4%
9.6%
21.7%
16.5%
2.5%
Microfinance
5.7%
Transport,
storage and
communications
8%
Credit card
Others
14%
Industry
27%
Commerce
26%
Real estate
8%
Consumer
20.5%
17.0%
Mortgage
SME
Top 20 clients and others
Middle enterprise
19.9%
17.9%
Large enterprise
12.60%
Corporate
Top 20 Clients
Others
26.8%
BBVA Continental
Source:
24.5%
87.40%
Banking System
Asociación de Bancos del Perú
19
Deposits
Retail customers
14.8%
-43 bps
PEN Million and percentage (%)
Growth continues also in deposits…
19.4%
37 bps
17,265
15,036
20.27%
19.84%
Dec-14
Dec-15
47,287
39,607
Deposits
Banking System
Annual variation
22.07%
Market share*
87,015
17.3%
22.44%
Business customers
22.2%
93 bps
93 bps
30,022
24,571
Dec-14
Dec-15
24.26%
23.33%
Deposits
Banking System
Annual variation
Market share*
210,767
17.4%
Dec-14
Dec-15
Deposits
Banking System
*Market share of Dec14 affected by the inclusion of Edyficar in the Banking System.
Source: Superintendencia de Banca, Seguros y AFP
Annual variation
Market share*
123,752
17.5%
20
Liabilities and Capital Breakdown
USD
PEN
28.9%
29.1%
32,783
42,245
6%
7%
17%
15%
30,114
38,871
2%
2%
Equity
36%
32%
Wholesale funding
4%
Others
14%
26%
5%
21%
4%
3%
19%
25%
39%
38%
Dic-14
Dic-15
CTS
15%
Term
38%
32%
Demand + Saving
Dic-14
Source:
Dic-15
Superintendencia de Banca, Seguros y AFP / Asociación de Bancos del Perú
21
High level of self-financing and balance sheet denomination in PEN
December 2015
Loans and Deposits
PEN-denominated Performing Loans
67%
PEN Thousands of millions
100.1%
63%
103.1%
106.1%
101.1%
57%
48
33
54%
47
42
39
66%
40
37
50%
49%
49%
49%
50%
51%
50%
52%
62%
55%
57%
54%
50%
Dec-11 Jun-12 Dec-11 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15
33
BBVA Continental
Banking System Average
PEN-denominated Deposits
61%
59% 58%
58%
56%
56%
54%
53%
53%
53% 52% 53%
50%
Dec-12
Loans
Dec-13
Dec-14
Deposits*
Dec-11 Jun-12 Dec-11 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15
BBVA Continental
*Other obligations are excluded from deposits
Source: Superintendencia de Banca, Seguros y AFP
50%
47%
47%
46%
Dec-15
Loans/Deposits
55%
Banking System Average
22
Financial margin
Implicit rate of loans2
PEN Million and percentage (%)
12.20%
11.47%
8.14%
10.01%
8.05%
7.41%
6.75%
5.09%
6.55%
4.69%
8.00%
10.45%
9.78%
8.92%
6.55%
6.10%
4.35%
5.47%
6.00%
7.97%
10.28%
8.81%
9.98%
9.71%
9.51%
8.71%
8.66%
8.63%
8.06%
7.10%
7.01%
7.03%
7.11%
7.17%
Dic-14
TOT
Mar-15
PEN
Jun-15
USD
Sep-15
Dic-15
4.00%
3.61%
2.00%
Dic-12
Dic-13
0.00%
3,309
3,631
3,741
4,052
-2.00%
Implicit rate of deposits 3
-4.00%
2.20%
-6.00%
1.73%
-8.00%
1.11%
1.97%
(980)
(1,117)
(1,055)
(1,346)
1.85%
1.85%
1.79%
1.78%
1.77%
1.12%
1.10%
1.04%
1.00%
0.98%
1.63%
1.16%
-10.00%
Dec-12
Dec-13
Dec-14
Financial Expenses
Financial Income
NIM PEN
NIM USD
0.31%
Dec-15
0.29%
0.29%
0.28%
0.30%
Mar-15
PEN
Jun-15
USD
Sep-15
Dic-15
NIM 1
Dic-12
Dic-13
Dic-14
TOT
1
NIM ratio: Interest margin for the last 12 months divided by average interest earning assets (interbank funds, investments, net loans).
Implicit rate of loans: Loans interest income for the last 12 months divided by average net loans.
3 Implicit rate of deposits: Deposits interest expenses for the last 12 months divided by average deposits (excluding other obligations).
2
Source: Superintendencia de Banca, Seguros y AFP / Asociación de Bancos del Perú
23
Expenses management
We manage an attractive efficiency ratio
Administrative expenses*
Efficiency Ratio
PEN Million
December 2015
3,338
3,100
Bank 3
38.29%
Bank 1
38.59%
BBVA
Continental
38.92%
Bank 4
43.03%
Promedio
Sistema Bancario
1,606
1,398
7.7%
42.30%
1,248
Number of employees
1,362
1,288
1,114
14.8%
9.1%
15.5%
Dec-14 Dec-15
Dec-14 Dec-15
Dec-14 Dec-15
Dec-14 Dec-15
Bank 1
BBVA Continental
Bank 4
Bank 3
December 2015
21,615
Market
Share
8.9%
7,032
Bank 1
* Includes Amortization and Depreciation
Source: Superintendencia de Banca, Seguros y AFP
Bank 4
5,601
5,529
Bank 3
BBVA Continental
24
Risk management
Outstanding asset quality
Past due loan ratio by product and segment
BBVA Continental
December 2015
Microfinance
1.12%
366.81%
SME
Middle enterprise
258.87%
203.57%
202.11%
2.23%
Dec-12
1.74%
Dec-13
Past due loan ratio
Dec-14
Coverage ratio*
Source: Superintendencia de Banca, Seguros y AFP
5.92%
Large enterprise
Corporate
1.19%
7.72%
Car-loan
1.43%
0.00%
1.66%
2.17%
Credit Card
1.47%
Consumer
1.54%
Dec-15
Mortgage
1.09%
25
Risk management
Best Past Due Loan Ratio and Coverage Ratio
December 2015
Best Risk Cost ratio vs. Peer Group
Annual
Variation
3.08%
2.80%
2.17%
Banking
System
Average
203.57%
2.10%
193.87%
166.57%
1.70%
157.12%
Bank 4
77 bps
2.11% Bank 1
2.06% Bank 3
-9 bps
36 bps
2.20%
2.03%
2.09%
2.06%
1.70%
1.39%
1.47%
Dec-12
Dec-13
BBVA
14 bps
1.42% Continental
1.28%
Dec-14
Dec-15
132.29%
Maintaining high levels of voluntary provisions
PEN Million
3,057
2.89%
Required
311
2.54%
2.35%
Voluntary
2,456
2.43%
2,079
552
2.17%
2,322
871
24.5%
2,746
BBVA
Continental
Bank 4
Bank 1
Bank 3
1,904
774
1,431
11.7%
1,451
1,305
Past due loan ratio
Coverage ratio
*Risk Cost: Provisions for the last 12 months between total loans (average
of the last 12 months)
Source: Superintendencia de Banca, Seguros y AFP
1,064
86
87
34.5%
1,345
977
1,195
950
222
148
25.7%
802
974
Dec-14 Dec-15
Dec-14 Dec-15
Dec-14 Dec-15
Dec-14 Dec-15
Bank 1
BBVA
Continental
Bank 3
Bank 4
26
Profitability management
Net income
Return on Equity - ROE
PEN million
December 2015
26.30%
Bank 4
2,778
Bank 1
25.76%
BBVA
Continental
2,468*
1,915
23.92%
17.26%
Bank 3
22.13%
Banking System
Average
1,344 1,372
Return on Assets - ROA
956 1,014
December 2015
709
45.1%
860
Bank 1
2.1%
6.0%
2.47%
21.4%
Bank 4
Bank 3
Dec-14 Dec-15
Bank 1
Dec-14 Dec-15
BBVA
Continental
Dec-14 Dec-15
1.94%
Dec-14 Dec-15
BBVA
Continental
Bank 3
2.31%
Bank 4
1.87%
2.14%
Banking System
Average
*Net Income of Bank 1 without considering an extraordinary income of PEN 310MM due to a sale of shares in subsidiary. Net Growth adjusted 28.9%.
Source: Superintendencia de Banca, Seguros y AFP
27
Solvency management
Regulatory capital
Composition of capitalization
PEN million
61,682
10,000
47,207
8,209
38,961
8,000
13.78%
60,000
53,495
7,371
12.43%
12.42%
2.62%
2.59%
50,000
4.00%
13.31%
3.64%
Mín.
11.22%
40,000
2,247
5,866
6,000
4,844
2,139
30,000
1,221
20,000
1,019
4,000
9.82%
2,000
4,645
3,825
5,962
5,232
9.84%
(CE
T1
9.67%
8.69%)
(CE
(CE
(CE
T1T1
T1
9.78%
10,000
8.75%)
8.67%)
8.32%)
-10,000
Dec-12
Dec-13
TIER I
Dec-14
TIER 2&3
Dec-15
RWA
Dec-12
Dec-13
TIER I
Dec-14
Dec-15
TIER 2&3
From July 2012 to July 2016 capital requirements will increase gradually to comply with new local regulations,
based on Basel III standards.
Source:
BBVA Continental / Superintendencia de Banca, Seguros y AFP
28
Ratings
International & Local Rating
Rating agencies have granted BBVA Continental the best international and local ratings:
Fitch
Ratings
Standard
&
Poors
Foreign currency long term issuances
A-
BBB
Foreign currency short term issuances
F1
A-2
Local currency long term issuances
A-
BBB
Local currency short term issuances
F1
A-2
Individual rating
WD
-
Stable
Stable
Instrument
Outlook
Instrument
Apoyo &
Asociados
Equilibrium
PCR
Top local
Short term deposits
CP-1+ (pe)
EQL 1+.pe
Categoría I
Categoría 1
Term deposits > 1 year
AAA (pe)
AAA.pe
pAAA
AAA
Corporate bonds
AAA (pe)
AAA.pe
pAAA
AAA
Subordinated bonds
AA+ (pe)
AA+.pe
pAA+
AA+
Leasing bonds
AAA (pe)
AAA.pe
pAAA
AAA
1a (pe)
1a Clase.pe
PC N1
Categoría 1
A+
A+
A+
A
Stable
-
Stable
Stable
Common shares
Issuer rating
Outlook
30
Social
Responsibility
and Awards
The Bank maintains its commitment to society and is highly
regarded in the market
SOCIAL RESPONSIBILITY
AWARDS
Social, Economical and
Environmental
Responsibility Report
First environmental
facility made in South
America
Green loan to
promote green
lending projects
Program:
“Leer es estar adelante”
BBVA Continental is part of
the Best Corporate
Governance Principle’s
Index of companies
32
Annex
Annex 1: Clients and Products
Retail and Middle
Market Banking
Retail Banking
Individuals and small
businesses with
annual sales under
USD 1.4 million
Middle Market
Banking
Medium-sized
businesses with
annual sales over
USD 1.4 million and
below USD 75 million
Corporate & Investment
Banking
Corporate Banking
Global Markets
Global corporate
groups with annual
sales over USD 75
million
Customers
demanding FX
transactions and
derivatives
Products for individuals: credit cards, consumer loans, mortgages loans, vehicle loans, saving deposits, demand deposits, term
deposits, CTS, funds and investments.
Products for businesses: Leasing, foreign trade loans, discounts, commercial loans, factoring, advance accounts, credit cards, funds,
savings deposits, demand deposits, term deposits. Also syndicated loans and debt issuances.
Treasury: FX transactions (spot and forward), IRS, Cross Currency Swaps, options.
34
Investors Report
Fourth Quarter 2015