Itaú CorpBanca
Transcript of Itaú CorpBanca
Itaú CorpBanca 1
Itaú CorpBanca Representatives
Today’s Presenters
Mr. Maluhy joined Itaú Unibanco in 2002 and became a partner in 2010. Previously, he was CEO of Rede S.A.
(Redecard), a card processing subsidiary and Executive Director at Itaú Unibanco, responsible for the management of
the credit card segment and retail store alliances. Previously, he worked at Itaú BBA, holding leadership positions in
areas such as international, products, operations, treasury, and trading desk. Prior to joining the bank, he worked at J.P.
Morgan Crédit Commercial de France (CCF Brasil), and Lloyds TSB. Mr. Maluhy holds a B.A. in Business Administration
from Fundação Armando Álvares Penteado – FAAP.
Milton Maluhy – Chief Executive Officer
Mr. Moura joined Itaú Unibanco in 2000 and became an associate partner in 2010. He has more than 20 years of
experience in asset management, risk management, finance and M&A. Mr. Moura held the position of Chief Investment
Officer for Itaú’s pension funds, endowments and insurance businesses. He was also Chief Risk Officer for Wealth
Management as well as member of the Board of Directors of different companies in Brazil and abroad. Prior to joining the
bank, he worked at BBVA Asset Management and Itaú Bankers Trust. Mr. Moura holds a M.B.A. from the Wharton
School at the University of Pennsylvania, USA.
Gabriel Moura – Chief Financial Officer
Ms. Labbé has held the position of Head of Investor Relations in CorpBanca since 2011 and has more than 20 years of
experience in the financial industry. Prior to joining CorpBanca, she was Head of Financial Institutions at Feller Rate, a
former local affiliate of Standard & Poor’s.
Claudia Labbé – Head of Investor Relations
Itaú CorpBanca 3
Colombia1
Branches and CSBs: 177
Employees: 3.7
Thousand
Assets: US$ 10.8 Billion Peru2
Rep. Office
Paraguay
Branches and CSBs3 : 37
Employees: 799
Assets: US$ 3.1 Billion
Uruguay (includes OCA)
Branches and CSBs: 24
OCA service sites: 36
Employees: 1.2 Thousand
Assets: US$ 4.4 Billion
550 branches
13.7 thousand employees
US$ 55 billion in assets
*As of Dec.31, 2015 - excluding Brazil
Chile
Branches and CSBs: 223
Employees: 6.4 Thousand
Assets: US$ 33.4 Billion
Argentina
Branches and CSBs: 89
Employees: 1.6 Thousand
Assets: US$ 2.5 Billion
• Itaú Unibanco has a US$ 55
billion¹ Market Capitalization,
with shares listed in São Paulo,
New York and Buenos Aires Stock
Markets
• The Bank is present in 19
countries, in the Americas,
Europe and Asia, with over 90
thousand employees, 5
thousand branches and 26
thousand ATMs
• More than 60 million clients
1 – As of Apr/15/2016. Calculated based on the closing price of
the ADR in the NYSE multiplied by the number of outstanding
shares.
Itaú in Latin America*
1 Includes information of the operations of CorpBanca in Panamá; 2 Rep. office in Peru is part of Itaú CorpBanca; 3 CSBs:
Client Service Branches (Puestos de Atención)
Source: Itaú Unibanco: Financial Statements. CorpBanca: Superintendency of Banks and Financial Institutions (SBIF) and
Financial Statements
Itaú Unibanco
Highlights (as of 31/12/2015) (Itaú + CorpBanca pro forma)
Regional Presence
Itaú CorpBanca 4
Latam within Itaú Unibanco
39 104
5%
62%
20%
6%
8%
Itaú ARG
Itaú Corp CHL
Itaú Corp COL
Itaú PRY
Itaú URY
25
323
18
104
Assets
¹ L
oa
ns
¹
US$ Billion Breakdown by Country
5%
64%
21%
5%
5%
Itaú ARG
Itaú Corp CHL
Itaú Corp COL
Itaú PRY
Itaú URY Itaú Latam
w/o CorpBanca Brazil and
Other Countries
Itaú Latam
with CorpBanca
55 323
BEFORE
7% 15%
AFTER
27%
14%
1 – Considering a BRL 3.9048 per 1.00 USD conversion rate, as of Dec/31/2015.
Source: Itaú Unibanco: Financial Statements. CorpBanca: Superintendency of Banks and Financial Institutions (SBIF) and Financial Statements as of December 31, 2015.
Total Latam Assets US$ 55 Bn
Total Latam Loans US$ 38 Bn
82%
85%
Itaú CorpBanca 6
April 14, 2016
Source: Itaú CorpBanca.
1 Includes 802,125,023 shares owned by Saga that are under custody.
Shareholders Structure after Merger
3rd largest Market Cap among Peers
Note: Figures were converted at an exchange rate of Ch$670.80/US$1 (as of April 14, 2016).
Source: Santiago Stock Exchange.
10.23 9.33
4.62 4.59
1.42
PEER-A PEER-B ITAUCORP PEER-C PEER-D
US
$B
N
ADRs holders and Foreign investors 14.08%
Securities Brokerage 6.74%
Santo Domingo Group 1.92%
Insurance Companies 1.58%
AFPs 0.32%
Other minority shareholders 5.33%
ITAÚ CORPBANCA Total shares: 512,406,760,091(100%)
Itaú Unibanco
33.58%
April, 2016
Shareholders - % Total share capital
#3
Saieh Family1
33.13%
IFC
3.32%
Others
29.97%
Itaú CorpBanca 7
Bo
ard
of
Dir
ec
tors
Strong Corporate Governance
Chairman
Vice Chairman
Jorge Selume Zaror
Fernando Aguad Dagach
Gustavo Arriagada Morales*
Directors
Candido Botelho Bracher
Boris Buvinic Guerovich
Boris Nicolás Abovic Wiegand
Héctor Valdés Ruiz*
Alternate Directors
Camilo Morales Riquelme José Luis Mardones Santander*
(*) Independent Director under Chilean corporate law.
Jorge Andrés Saieh Guzmán
Ricardo Villela Marino
João Lucas Duchene*
Fernando Concha Ureta*
• Itaú Unibanco and CorpGroup appoint the majority of the members of the board of directors
• 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
Itaú CorpBanca 8
Senior Management Structure
BOARD OF DIRECTORS
Itaú CorpBanca Chief Executive Officer
Audit Committee
Milton Maluhy
Wholesale
José Francisco
Sánchez
Retail
Victor Orellana
Treasury
Pedro Silva
Marketing &
Products
Rogério Braga
CRO
José Valencia
CFO
Gabriel Moura
IT & Operations
Luis Rodrigues
Legal &
Compliance
Cristián Canales
Human
Resources
Marcela
Jiménez
CorpBanca Colombia CEO
Jaime Munita
Comptroller
José Manuel Mena
Itaú CorpBanca 9
Itaú CorpBanca at a glance
Commercial 68%
Mortgage 10%
Consumer 22%
4th largest private bank by loans in
Chile
5th largest bank by loans in
Colombia
1 Pro forma financials do not include merger effects; 2 Gross Loans; 3 Includes US$553 million of capital increase in Banco Itaú Chile; 4 For 2014 Net Income considers US$45 million of pre integration
expenses and for 2015 it considers US$50 million of pre-integration expenses and US$30 million of the SBIF fine imposed to CorpBanca.
Note: Figures expressed in USD were converted at CLP 710.32/USD (as of December 31, 2015);
Source: CorpBanca and Banco Itaú Chile financials.
December 2015
Colombia 24%
Consumer
8%
Mortgage
20%
Commercial 72%
Chile 76%
Pro forma Loan Portfolio Breakdown
Dec 31, 14 Dec 31, 15
Total Assets (US$BN) 39.7 41.4
Total Loans2 (US$BN) 28.7 30.5
Total Deposits (US$BN) 23.7 25.1
Equity attributable to shareholders3 (US$BN) 4.0 3.8
Net Income attributable to shareholders4 (US$MN) 439 431
Loan Loss Allowances / Total Loans 2.1% 2.2%
Branches 395 395
ATMs 664 668
Headcount 9,895 10,016
Pro forma1 Consolidated Financial and Operating Highlights
Itaú CorpBanca 10
* Pro forma
1 Company management and filings with local regulatory authorities as of 12.31.2015.
2 Pro forma rankings showing private banks only, based on gross loans as reported to the SBIF and SFC, excluding loans from CorpBanca Colombia. Including loans from Colombia,
Itaú CorpBanca would have a loan market share of 15.2% in Chile.
3 Based on gross loans as reported to the SFC. Peer-A in Colombia includes aggregate gross loans for different banks of the same group.
Market Share by Loans in Chile 1,2 Market Share by Loans in Colombia 1,3
#5
Regional Platform
18% 18% 15%
12%
7% 7% 6% 5%
10%
Peer-
B
Pe
er-
A
Pe
er-
C
ITA
Ú-C
OR
PB
AN
CA
*
Co
rpB
anca
Pe
er-
D
Pe
er-
E
Ita
ú
Oth
ers
#4
28% 23%
14% 11%
6% 5% 3% 3% 2% 2% 4%
Pe
er-
A
Pe
er-
B
Pe
er-
C
Pe
er-
D
Co
rpB
anca
Pe
er-
E
Peer-
F
Pe
er-
G
Pe
er-
H
Pe
er-
I
Oth
ers
Itaú CorpBanca 11
Business Mix
US$ MN as of December 31, 2015
15.5
Avg
Top 3
8.2
15.1
7.5
Total
Current interest rates
w/ Top 3 mix
Top 3
Top 3 interest rate
w/ current mix
Current
8.2 8.0
6.5 6.5
Itaú
CorpBanca
60 54
65 72
25 30
22
20
15 16 13 8
32,518 34,344 22,640 22,130 100% =1
Consumer
Mortgage
Commercial
Mix difference explains most of the Yield gap
with the Top 3
Source: SBIF; CorpBanca; Team Analysis.
1 Yearly average gross loans; 2 Loan interests by segments;
Note: Exchange rate CLP/710.32/USD (as of December 31, 2015).
Peer-A Peer-B Peer-C
Loans breakdown by segment
8.2
8.2
7.6
7.5
Interest rate2 (%)
Itaú CorpBanca 12
Funding Mix
Funding Breakdown
Source: SBIF; CorpBanca; Team Analysis.
Note: Exchange rate CLP/710.32/USD (as of December 31, 2015).
US$ MN as of December 31, 2015
3.4
Avg
Top 3
2.6
3.8
3.5
Total
14 18 21 17
21 20 16 21
36 38 38
50
28 24 25
12
Others
Debt Issued
42,941 37,925
Checking accounts &
Demand Deposits
Time Deposits
31,125 27,541 100% =
0.1 0.1
5.7 6.7
3.5
3.1
2.6
2.9
Itaú
CorpBanca
1.0 1.2
Current
Top 3 interest rate
w/ current mix
Current interest rate
w/ Top 3mix
Top 3
Non-interest bearing liabilities are the main
reason for the gap when compared to the
top 3 players
Peer-A Peer-B Peer-C
Interest rate (%)
Itaú CorpBanca 13
Note: Figures were converted at an exchange rate of 667.08 CLP/USD (as of March 31, 2016).
1 Companies filings with local regulatory authorities as of March 31, 2016.
Company pro forma balance sheet as of 03.31.2016.
Pro forma Financials as of March 31, 2016 (US$ MN)
Banco Itaú Chile 1 CorpBanca 1
PPA & IFRS
consolidation
effects
Pro forma
Assets
Cash and deposits in banks 1,263 2,395 0 3,658
Derivative financial instruments 381 1,475 -16 1,840
Loans Portfolio, net 10,132 21,222 - 31,353
Financial investments 668 3.647 -4 4,312
Intangible assets 79 1,031 1.340 2,450
Goodwill 0 508 1.208 1,717
Customer relationship & Core deposits 0 337 168 505
Others 79 186 -37 228
Other assets 724 1,809 25 2,559
Total Assets 13,248 31,577 1,346 46,171
Liabilities
Deposits 7,193 18,799 -15 25,978
Demand Deposits 1,476 6,386 0 7,862
Time Deposits 5,717 12,413 -15 18,116
Derivative financial instruments 377 1,222 -16 1,583
Debt issued 2,280 4,770 182 7,232
Deferred income taxes 136 202 25 363
Other liabilities 1,479 4,402 -27 5,854
Total Liabilities 11,465 29,395 149 41,009
Non controlling interest 0 462 -37 425
Total Shareholders’ Equity 1,783 1,721 1,233 4,737
Total Liabilities and Shareholders’ Equity 13,248 31,577 1,346 46,171
Itaú CorpBanca 14
Pro forma Capital Levels as of March 31, 2016
Note: Estimated by company management, based pro forma balance sheet as of March 31, 2016.
Includes:
• US$552.99MN of capital increase in Banco Itaú Chile (679.70 CLP / USD)
• Corresponding adjustments from merger effects of the business combination based on company pro forma balance sheet.
1 Core Capital = Tier I Capital = Capital Básico, according to SBIF BIS I definitions; 2 Regulatory Capital = Patrimonio efectivo, according to SBIF BIS I definitions
* Figures were converted at an exchange rate of 667.08 CLP/USD (as of March 31, 2016).
US$ BN*
CorpBanca
BIC
Merger
effects
Regulatory Capital2 Goodwill
4.88
0.43
1.72
Minority Interest
1.78
1.44
1.23
4.74
Core Capital1 Subord. Bond
1.72
Itaú CorpBanca 15
9.5
11.9
13.4 12.6 12.0
13.0
CorpBanca BIC Peer-B Peer-A Peer-C Itaú CorpBanca
(e)
Significant Expected Improvement in Capital Position
Itaú CorpBanca will have a larger capital base to support further growth
Itaú CorpBanca will target a capital ratio based on the greater of 120% of the minimum regulatory capital requirement or the
average regulatory capital ratio of the three largest private banks in Chile and Colombia. After the necessary earnings have
been reserved to comply with this requirement, all excess cash earnings will be distributed to its shareholders
* Pro forma estimated by company management, based on March 31, 2016 pro forma balance sheet, which includes:
a) CorpBanca Tier I capital1 as of March 31, 2016.
b) Banco Itaú Chile (BIC) Tier I capital 1as of March 31, 2016, including US$553MN of capital increase on March 22, 2016 (679.70 CLP / USD).
c) Corresponding adjustments from merger effects of the business combination based on pro forma balance sheet.
1 Tier I Capital = Basic Capital, according to SBIF BIS I definitions; 2 BIS ratio = Patrimonio efectivo / RWA , according to SBIF BIS I definitions
Note: Figures converted to US dollars at a rate of 710.32 CLP/USD (as of December 31, 2015) and 667.08 CLP/USD (as of March 31, 2016), respectively.
Tier I Capital (Core capital)1 BIS Ratio (%)2
Comparative Capital Levels & ratios and Itaú CorpBanca Pro forma
1.7
1.1
3.9 3.8
2.8
4.7*
CorpBanca BIC Peer-A Peer-B Peer-C Itaú CorpBanca(e)
US
$B
N
Dec-15 Mar-16
Mar-16 Dec-15
Chilean Banking Ind. Avg: 12.6%
a)
b)
c)
0.6
1.7
Itaú CorpBanca 16
We estimate these synergies to be fully achieved in 3 years post-merger
We also expect further funding cost improvements and substantial revenue synergies, which are not included in the
cost synergies below
We estimate total one-time integration costs of approximately US$85MN to occur during the first 3 years
1 Denotes low-end and high-end fully phased-in pre-tax synergies from year 3 onward.
Note: Figures converted to US dollars at a rate of 667.08CLP/USD.
Source: Management estimates.
Human
Resources
Relevant synergies related to optimization of
organizational structures US$63MN
1
Administration
Savings derived from a reduction in administrative expenses
Reduction of costs from services rendered by mutual service
providers
US$17MN
2
Information
Technology Relevant savings from scalable IT systems US$18MN
3
Others Savings derived from enhanced branch network US$9MN
4
Indicative Total Fully Phased-in Pre-Tax Synergies Range
Description
Low-End
Pre-Tax Synergies1
High-End
Pre-Tax Synergies1
US$52MN
US$14MN
US$15MN
US$8MN
US$107MN US$88MN
Updated Synergies
Itaú CorpBanca 17
Transaction in Colombia
Contemplated Structure in Colombia
Itaú
CorpBanca
100%
CorpBanca
Colombia
CorpBanca offered to acquire the 33.18%
aggregate minority stakes in CorpBanca
Colombia:
‐ CorpBanca and Helm Co. did not reach an
agreement on the final terms and conditions of the
proposed acquisition
‐ CorpGroup has agreed to sell shares in proposed
transaction (12.36% ownership - US$330MN
aggregate cash offer1 2 )
Itaú CorpBanca will acquire Itaú BBA
Colombia at a price equivalent to its book
value2 3
CorpGroup Helm
Corporation
Other
Minorities
Itaú BBA
Colombia
66.28% 12.36% 20.82% 0.54%
1 This amount accrues interest of Libor + 2.7% per year from August 4, 2015 until the closing date
2 Transaction pending on approvals by regulators
3 Book value of Itaú BBA Colombia = COP 319.2 BN as of December 31, 2015 (equivalent to US$102 million at an exchange rate of COP3,135.17/US$1)
Offer to Acquire Minority Stake in CorpBanca Colombia
Itaú CorpBanca 18
• The legal name of the merged entity is “Itaú CorpBanca”, notwithstanding the commercial
brand is going to be “Itaú”
• The merged entity will benefit from stronger balance sheet structure and capital ratios to
support growth
• In following quarters we will deliver
1. Legal Day One and systems integration
2. Filing first combined financial statements on May 10, 2016 with SBIF
3. Brand and branches integration completed by December 2016
• Our ambition is to be among the 3 largest Banks in Chile in terms of total loans
Going Forward…
Itaú CorpBanca 20
Cautionary Note
Certain statements in this Presentation may be considered as 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 recent merger of Banco Itaú Chile with and into CorpBanca, the
integration process of both banks, the expected timing of completion of the transaction, 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, including the Tax Reform in
Chile.
These statements are based on the current expectations of Itaú CorpBanca’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 Itaú CorpBanca or its
controlling shareholders expect; (4) the business of Itaú CorpBanca may suffer as a result of uncertainty surrounding the merger; (5) the industry
may be subject to future regulatory or legislative actions that could adversely affect Itaú CorpBanca; and (6) Itaú CorpBanca 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 Itaú
CorpBanca’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 Itaú CorpBanca’s financial results is included from time to time in the “Risk Factors” section of
Itaú CorpBanca’s (formerly CorpBanca) Annual Report on Form 20-F for the fiscal year ended December 31, 2015, filed with 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.