CORPBANCA · Avg.'07-'11 Avg.'12E-'16E Source: IMF, World Economic Outlook as of April, 2012...
Transcript of CORPBANCA · Avg.'07-'11 Avg.'12E-'16E Source: IMF, World Economic Outlook as of April, 2012...
CORPBANCA A MAJOR PLAYER IN THE COLOMBIAN MARKET
October 2012
CORPBANCA
TODAY
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Strong track record of robust growth with profitability
The fastest growing bank in Chile
# 1 private bank in growth by loans in Chile: 15% CAGR ’06 – ’11 (34% in the last 12 m period)
4th largest private bank in Chile // 8.36% market share as of Aug-12 (358 bp gain organically in the last 10 yrs)
9th largest bank in Colombia // 2.97% market share as of Jul-12 (27 bp gain in the last 7 months)
Leader in efficiency and risk management in Chile
Efficiency ratio (Oper. Expenses / Avg Assets): 1.5% vs. 2.2% of the Industry (Aug-12)
Best Risk Index* among main banks: 1.7% vs. 2.3% of the Industry (Aug-12)
National network coverage in Chile and Colombia
CHILE: 256,300 clients, 121 branches, 436 ATM and internet banking
COLOMBIA: 298,500 clients, 85 branches, 108 ATM
Potential access to ~5,000,000 clients and to the largest retail network in Chile (~600 stores) through SMU alliance
Competitive advantage in consumer loans across customer segments with low acquisition cost, low transaction cost and low provisions
Current strategy leverages from all CorpGroup´s companies, taking advantage of the variety of products to offer of added value proposals to our customers, employees and suppliers
Highest standard of corporate governance Listed BCS (2002) and NYSE (2004)
Investment grade: “BBB+” in the global scale (Standard & Poor’s and Moody´s)
Controlling Group with LatAm banking management experience
*Risk Index = Loan loss allowances / Total Loans // Note: Figures expressed in USD were converted at CLP 479.72/USD
CORPBANCA
UNIQUE GROWTH STRATEGY
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Outstanding performance with high growth and profitability
Remarkable increase in loan market share over the years Net income at record levels
Leader in efficiency Sustained healthy asset quality
Source: SBIF, CorpBanca // * As of Aug-12
4.16 4.29 4.78
5.40
6.25 6.46 6.35 6.31 6.82 7.04 7.27 7.30
7.75 8.36
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Au
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g-1
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%
Ch
ile +
Co
lom
bia
∆+ 352 bp
0.5 4.5
-6.9 -4.5
14.7
28.4 35.5
50.1 50.8 52.6
39.1 51.1
56.3
85.1
119.0 122.9
71.7
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*
(Figures in Ch$bn)
82.0
98.8 91.3
78.7
59.3
47.6 38.8 38.2 39.8 39.9
50.1 52.6 46.1
39.0 38.1 41.2 49.8
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* Cost / Income (%)
3.1
2.6
3.2
2.5 2.2 2.2 2.2 2.1
1.7 1.6 1.4 1.3
1.5
1.9 2.0
1.5 1.4
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*
Loan loss allowances / Total loans (%)
CORPBANCA
CROSS-BORDER EXPANSION
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4 5 6
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Cross-border expansion in the
region
Superior value proposition for high net worth
clients
Risk management to favor high
returns
STRATEGIC
PRIORITIES
Consolidate a financial retail operation for
individuals segments
Increased cross-selling in corporate
banking Leadership in cost and operational
efficiency
Leadership in service quality
Human talent as key driver to compete in competitive
markets
Synergy leverage within CorpBanca’s and throughout its sister companies
CorpBanca’s strategic priorities defined in 2011
COLOMBIA
WHY EXPAND IN THIS MARKET?
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378
292
100
150
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350
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Strong macroeconomic fundamentals
Real GDP growth Nominal GDP 2012E (US$bn)
Inflation FDI (US$bn) Sovereign rating and risk* (bps)
1,7%2,5%
3,9%5,3% 4,7%
6,7% 6,9%
3,5%
1,7%
4,0%
5,9%4,7% 4,4%
(4)%
(2)%
0%
2%
4%
6%
8%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E
Colombia Chile Advanced economies
Colombia did not enter recession during the financial crisis
Source: IMF, World Economic Outlook as of April, 2012 Source: IMF, World Economic Outlook as of April, 2012
4.5% Long term
GDP growth 4.2%
4,2%
3,0%
4,5%
3,0%
Avg.'07-'11 Avg.'12E-'16E
Source: IMF, World Economic Outlook as of April, 2012 Source: J.P. Morgan as of June 2012 Source: Bloomberg, as of September 6, 2012. * 5 years term.
1715
14
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2011 2012E
90
106
BBB-
Baa3
BBB-
A+
Aa3
A+
“Positive” Outlook <12 m after investment grade upgrade
Colombian economy is more resilient
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Attractive market size and population dynamics
Total population (mm) GDP per capita growth
Consumer spending evolution (US$/capita) Unemployment and formalization
Source: IMF, World Economic Outlook as of April 2012
100%
120%
140%
160%
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Chile Colombia GDP per capita 2012E (US$)
15,453
Source: IMF, ILO, EIU Note: Data as of December 2010. Unemployment reflects average rate during the year
Increase in formal sector size expected to channel significant resources to the financial system
8,027
Unemployment(%)
2,235
3,928
5,867
2005 2010 2015E
Colombia
4,228
6,665
9,778
2005 2010 2015E
Chile
Source: Planet Retail
46.0
17.4
1.2% 1.0% Avg. Growth
rate ’12E-’17E
Source: IMF, World Economic Outlook as of April, 2012
Form
aliz
atio
n (%
)
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Colombia’s financial sector remains underpenetrated with wide room for further depth and sophistication
Loan portfolio (% GDP) Deposits (% GDP) ATM’s and branches per
1,000 inhabitants
Source: Superintendencia Financiera de Colombia. Superintendencia de Bancos e Instituciones Financieras de Chile
Loans/GDP elasticity ( Avg 2008 - 2011)
86,3%
43,4%
10%
30%
50%
70%
90%
110%
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Chile Colombia
Colombia pre ’99 crisis level
1,1 1,6 1,6
0,4
2,4 2,6
1,8 1,8
Consumer Housing Checking Accounts Term deposits
Chile Colombia
42,0%
8,9%
17,0% 17,8%
8,4% 2,7%
Commercial Consumer Housing
Chile Colombia
16,8%
42,3%
5,4%
21,7%
Checking accounts Term deposits
Chile Colombia
58,7
14,9
29,6
14,3
ATM's Branches
Chile Colombia
Source: IMF, World Economic Outlook as of April 2012
Source: Superintendencia Financiera de Colombia. Superintendencia de Bancos e Instituciones Financieras de Chile
Domestic credit provided by banking sector (% GDP)
HELM BANK + CORPBANCA COLOMBIA
TRANSACTION RATIONAL
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Previous acquisition is a strong platform to capitalize on market opportunities
Sound financial profile
Growing ROE and ROA
Well diversified loan portfolio
Large customer base
High reciprocity
Healthy asset quality
High NPL Coverage
Strong risk and control policies and governance
Potential to generate synergies given CorpBanca’s strong track record in Chile
Product portfolio
Increasing client base (Chilean companies entering the Colombian market)
Efficiency ratios
Funding costs
CorpBanca has a proven track-record in a more sophisticated market, which will be key in the next stage of its new operation in Colombia
Colombian Tax Law provides tax benefits through goodwill amortization
US$mm Jul 2012 MkSh/Rank
Total assets 5,177 2.6% / #12
Total loans 3,410 3.0% / #11
Total deposits 3,342 3.0% / #11
ROAA 1.4% #9
ROAE 17.4% #9
Efficiency ratio 57.5% #8
PDLs/Gross loans 1.7% #1
Reciprocity 16.2% #5
BIS ratio 13.4% #8
N° Branches 77 #11
N° Employees 1,250 NA
CorpBanca Colombia Key Highlights
Loan portfolio Funding
Consumer 34.2%
Housing 6.1%
Commercial 59.7%
Time deposits
47.0%
Saving accounts 19.4%
Checking accounts
13.8%
Borrowings 13.7%
Bonds 4.1%
Other 2.0%
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Helm Bank: probably the last sizeable franchise available in Colombia
Broad range of products and services for individuals and corporates
Deep/consolidated relationships with most large corporates
Leading player in the high-income market segment
Relevant private banking franchise
Strong brand recognition
Award-winning customer service
Leader in Customer Satisfaction for 5 consecutive years
Leading customer’s loyalty rate for the last 3 years
Specialized Global Business Segment (Asia-Pacific region)
Conservative risk management
Healthy asset quality
High NPL Coverage
Diversified loan portfolio by borrower and sector
Significant room to improve profitability
US$mm Jul 2012 MkSh /Rank
Total assets 6,643 4.0%/#8
Total loans 4,610 4.1%/#7
Total deposits 4,510 4.4%/#8
ROAA 1.2% #11
ROAE 11.6% #11
Efficiency ratio 63.9% #10
PDLs/Gross loans 2.1% #4
Reciprocity 10.6% #11
BIS ratio 11.7% #11
N° Branches 89 #9
N° Employees 2,159 NA
Loan Portfolio Loan portfolio
Consumer 14.7%
Housing 9.2%
Commercial.76.1%
Funding
Time deposits
34.0%
Saving accounts
40.7%
Bonds 10.3%
Other 1.0%
Checking accounts
8.5%
Helm Bank Key Highlights
Borrowings 5.6%
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Fuente: Superintendencia Financiera de Colombia Nota: Aval es la suma de Bogota, Occidente, Popular y AV Villas; GNB Sudameris y HSBC se consideran juntos; Scotiabank y Colpatria se consideran juntos.
Activos
3 2 1 4 5 6 7 8 9 10 11
Utilidad
Cartera de Crédito
Depósitos
Créditos Comerciales
Créditos de Consumo
Créditos y Leasing Hipotecario
Cuentas Corrientes
Cuentas de Ahorro
Depósitos a Plazo
Cartera Morosa/Cartera Total
Provisión/Cartera Morosa
Margen de Interés Neto
Ingreso No-Interés/ Ingreso Total
Ratio de Eficiencia
ROAA
ROAE
6.6%
3.8%
6.8%
6.8%
8.0%
5.4%
5.7%
5.4%
5.5%
11.7%
2.1%
198%
4.0%
40%
61%
1.4%
13.7%
Plataforma
relevante y
de escala
Cartera de
Crédito
atractiva
Oportunidad
para
optimizar el
funding
Calidad de
activos
sobresaliente
Mucho
espacio para
mejorar
eficiencia y
rentabilidad
Helm Bank may be the last sizeable franchise available in Colombia
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The business combination of both entities would have a solid strategic rationale
Creation of a prominent market player
... benefiting from complementary operations
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… and providing attractive shareholder returns
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1 • Large scale across all business lines, with a balanced business mix focused on commercial
and retail operations
– The combined entity would become the 5th largest banking group in Colombia significantly narrowing the gap with market leaders
– Difficult position to achieve via organic growth in short time
– Larger scale entails systemic risk, improving combined risk outlook
• Complementary platforms in client segments, products, services and expertise (skills/know how)
– CorpBanca Colombia: Consumer lending, mortgages, reciprocity level, treasury activity, governance standards
– Helm: Corporate and high income segments, client service, offshore products, housing leasing
• Good reputation and brand positioning (Helm owns the brand “Crédito”)
• Leverage of CorpBanca’s strong expertise in a deeper and more sophisticated market
• Large value creation potential, substantial NIM and cost synergies
• CorpBanca has an outstanding track record increasing penetration, market shares, efficiency and profitability
OPPORTUNITIES
SYNERGIES AND VALUE CREATION
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Higher rating to reduce funding cost and bargaining power as a larger sized bank
Cross-selling opportunities between Helm and CorpBanca’s clients segments, e.g.
• Products: housing leasing
• For corporates: fees from loan syndication
• Wealth mng’t: offshore offering through Panama and Cayman
Synergies and Value Creation Opportunities Three drivers of synergies
Revenue synergies
Expenses synergies
Tax synergies
Significant tax benefits derived from acquisition structure
Closing of overlapping branches
Management team optimization - blending of the best
Personnel and back office streamlining
CorpBanca low cost IT model implementation
US$80-110 mn
Description Est. pretax
impact / yr*
* Estimations at steady-state, ramp up in ~3 years
US$50-60 mn
US$25-35 mn
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CorpBanca vs. Banco Santander as parent company
CorpBanca benefits from CorpBanca Banco Santander S.A.
Similar Issuer Credit Rating on the global scale
BBB+/A-2/CW Neg BBB/A-2/Negative
Better Sovereign Credit Rating for its main operation environment
A+/A-1/Positive BBB-/A-3/Negative
Colombian market is strategic => Long term investor Not strategic => divest
Full commitment Colombian subsidiaries rebranded t o “CorpBanca”
Also committed
No credit limits restrictions => Better position to satisfy customer needs // CorpBanca track record to grow organically
=> Many segments restricted // Inability to expand MkSh organically
Experienced Controlling Group Track record of LatAm regional presence
Track record of global presence
TRANSACTION
DESCRIPTION AND IMPACT SUMMARY
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Transaction Structure
Considers the legal vehicles required to serve high income segments and corporations
Additionally includes the stock brokerage company and the trustee company
Helm Bank Miami does not plays an important or critical role on Colombia strategy. Its a community bank with just few common customers
Companies included
Helm Colombia
Helm Panamá
Helm Cayman
Helm Stock Brokerage
Helm Trustee
Helm Insurance Brokerage
Companies not included
Helm Bank USA
Helm Investment Bank
Rep offices in LA banks
Non bank subsidiary
Bank subsidiary
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Transaction summary
Key factors Description
Total acquisition valuation • US$1,300 million: US$1,278.6 mn for the bank, US$ 21.4 mn for ins. broker
Acquiring entity • CorpBanca Colombia
Payment • US$ 1.278,6 million in cash, paid by CorpBanca Colombia
Financing in Colombia
• Capital raise in CorpBanca Colombia of ~US$ 1,000 mn: US$ 285 mn to come from CB Chile, US$ 260 from third party investors and US$ 440 mn from current Helm controllers
• CorpBanca Colombia’s own resources of US$ 300 mn
Financing in Chile • Capital raise in CorpBanca Chile of US$ 600 mn (including the recently
announced capital commitment of IFC)
Approvals • Regulatory approvals requires in both countries (Colombia and Chile)
Agreement execution date • October 9, 2012
Settlement expected date • 1Q 2013 (following regulatory approvals and capital increases)
Expected impact • Increase in CorpBanca´s EPS due to strong synergies and growth • CorpBanca Chile´s BIS Ratio 12.7% // CorpBanca Colombia BIS Ratio: +17% • Regulatory limit (art. 80) would be adequately complied
Resulting property structure changes
• CorpBanca Chile will own ~64% of new CorpBanca Colombia merged bank • Controlling Group will maintain over 55% controlling equity in CorpBanca
For US$1.3 bn P.P. Helm Bank’s Acq. Colombia bank avg.
P / BV 1,63x 1,8x
P / E 14,2x 14,8x
P / Mkt Share US$ 310 mn US$ 460 mn
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Disclaimer
This Presentation contains forward-looking statements, including statements related to the planned acquisition of Helm Bank and the timing thereof. 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. Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to CorpBanca concerning anticipated financial performance, business prospects, strategies and regulatory developments. 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. Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release and 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 press release are expressly qualified by this cautionary statement.
Contact
Claudia Labbé Manager Investor Relations +56 (2) 660 2699 Rosario Norte 660, 10th Floor, Las Condes Santiago - Chile [email protected]