ITCB - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Itaú CorpBanca's Third Quarter 2020 Financial Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Claudia Montevecchi, Head of Investor Relations. Thank you. Please go ahead.

Claudia Montevecchi

Good morning. our for joining XXXX third for results. financial you conference our call quarter Thank

a attention criteria events, our discussion that managerial me our materially analysis to performance mention our how cost Pages we of results included and forward-looking better you let your income and management, I statement. to by proceeding, Before of our clearer This and XX and that through different to which to like presentation, refer adjust our management measure, discussed financial this financial management communicating draw results managerial would risk is for also our information, remarks efficiency. actual this our X information Please financial could to nonrecurring We what differ risk from we model model discuss managerial in report presentation. financial apply and perspectives. include of credit is we reflects disclose believe the view will for segregating details. this in performance, and based on these commercial analyse results may further form give

with continue the presentation. let's Now,

Moura, this be session. call Afterwards, to Moura XXXX for Mr. on we and conference are call over second Rodrigo CEO; available the Gabriel It Mr. us turn question-and-answer will in quarter in will With First, a is today comment now -- Couto, pleasure results. CFO. will he my Gabriel. Mr. to Santiago

call is and to third will It now available well recent we as on session. First, be turn pleasure Mr. to Gabriel. as Moura question a events. will quarter the my results, strategy, XXXX over our comment for Afterwards, answer

Gabriel Moura

Corpbanca XXXX and Today's you, welcome conference everyone, parts. three to morning, call. Thank third Good quarter Itaú presentation has earnings Claudia.

results release of Our strategic and agenda. on the early end quarter XXXX results, October an our update at our third

Slide straight number X. moving to So

stable and on improved As slightly outlook Chile Colombia. we Slide showed in in X, remained macroeconomic the

so decline X.X% the review, and may Chile. is XXXX. an in Chile new growth for in latest expectation in probably from a The also second X.X% positive, year, upward GDP current withdraw ESPs Our we'll been see this the has include which vaccine

can you X. the please next If go slide Page on to

loss as of the provisions our billion in balance expected a a made have for credit to of result to mainly we loss the cycle, frame. quarter, our third We sheet provisioning additional this challenging according CLPXX reinforce

second were which from well impacted as revenues revenues was X.X% low lower as very the Our by had which third derivatives, inflation, only quarter. by in the been in strong quarter,

made which the of is in in the On and discuss biggest reductions sign presentation. headcount efficiency simplification of merger, since we'll management the front, we which the last more progress the cost a prompts, clear the our part

especially was with in which capital drivers the a were return derivatives, of as and growing main financial to an the our Commercial the market quarter, has decline credit than mortgages The lower wave well I first these are that to commercial after Moving we better in the perform credit, we margin portfolio been from we demand quarter the third with been strong second this before, had revenues X.X% as mentioned clients, margin, declined quarter-on-quarter which basis. basically than less our while Slide continue X, the financial Apart show of adjustment for returns, which lower consumer improving student as the quarter. the market. margin weak selective capital. from of the second with also our of we we clients required both been well Slide terms in program, present as as risk, On by X, line two in financial in on focus on stable a our impacted been in in our in also positively have FOGAPE effects, income portfolio. have and terms of

low Moving about the margins severance US the to quite our markets the as driver than very X, third the market, was billion was showed one-year increased of average much the fourth XXXX. Still, negatively On as that which impacted since the our Slide we were where stable been billion factors. varied expense well the CLPXX.X Despite with under seasonal quarter very quarter, which Slide non-interest maintain remain costs, by had growing CLPX.X margins for that year X.X% to showed impact, have structure exposure is of third lower the this that X.X% biggest quarter, in We of lower in adjustment quarter, reduction X, financial the market only the with date. inflation bigger main quarter, with simplified quarter. only while organization of main to CLPXX we for able the the The since been the pyramid. trillion. the margin to was highlight US the headcount financial X.X% moving to reductions our which the merger. of our control, at structural top The we the financial the second our with proportionally expenses

way great in for We let extended as future. well insurance, providing our and sets took also adjustment benefits. healthcare This our in training as a of a negative efficiency the by in that care go, us the did it quarter, had placement impact were employees but who

strategy branches of had XX four of our of the footprint, in optimizing months. part closed total our also closures We last branches as XX

Slide very NSFR both Now, at position remains moving levels. that strong, liquidity LCR X; to our and showed with high historically we

Slide to Let's look XX.

the our in efficiency, billion quarter of focus reduction risk widely. Consistent income Colombian net it credit X.X% COP cost our Here network, as as highlighted well our year-over-year credit we an the can felt in portfolio the we branch net the Colombian where management our see our and XX.X% in of and X.X headcount operation in reached reduction evolution with Colombia. in income

Slide Moving XX, early October release forward about results. talk to let's

our our and losses as well allowed from in you protect a forward-looking loan possible loan from risk impacts increased for factor a future, client prospects which credit might As of product know, that balance month which have in the allowance framework we materialize as way. losses, to the sheet in in we Colombia, the In pandemic specific October, we in aspects. provisioning considering macro-economic us Chile recognize

this make that goal front-load Our process and view going we was operational in sure the a forward, clear have cycle bank. of provisioning to the the performance of

of of credit billion pandemic, As in portfolio, CLPXX and by this the FOGAPE of a for Chile, COVID We of billion as SME driven and, process, additional of CLPXXX cost result additional spot, credit implemented billion the a Considering In result, a deductible this of and billion. October income mainly process of provisions for CLPXX for were the loans. we of a credit cost of same CLPXXX CLPXX the for had which corporate CLPXX the CLPXX provision billion, we by billion October had for a cost billion billion, XXXX. the Colombia clients provisions. in retail had was impacted negative sectors we of our CLPXXX net

Slide see On coverage. terms the of provisions XX, the results in increasing these of we next number our NPL

can sector. you of our the banking in the Chilean strongest As one see, is coverage

we levels the costs of fairly Therefore, provisions confident our believe going have will normal for cycle. are credit be current that credit We sufficient forward. we

in mainly capital cycle be for our in probably improved below we X% credit even see since the impact but at the XX have and density Slide In considering a efficiency the little basis in will target treasury, of between we provisions We X.X% growth second reached XX, we to negative that X.X% due sheet opportunities, in saw and X% higher range, believe we more XXXX. have recovers, fact, have a just of there. improvements impact October on way due to project with end with it project in situation CETX the and for recovery, provisions. believe our we the of year us put new and forward XXXX, plan. will levels depend discussed, cost will ratio we our weighted Ultimately, transformation evolves. well-protected fully-loaded points our move October Colombia, the we and very the third since in as behind us a than On how XXXX Where a the economic leaving of We economic balance still given up XXXX of economy assets a in have where we we prepare we improvement profitability, sustained and that high-risk quarter, we bench. quarter, the the

see moved of in the call, future. Let's we we presentation. this move customer model, next Starting sustainable our crisis to in all centricity, is we transformation present pillars quarter from the experience, management a results. centricity. client back Slide conference the on XX, on on build to portability On transformation to agenda as part example the have we agile of of our digital [ph], our an wafer XX, key slide, Slide second to great leading our working On mentioned which simplification, financial talent development plan,

are a offering to attract and portability value, new freedom We of convenience, attacking choice that with customers. combines powerful

our On the digital payments. well channels offer digital as experience, digital convenient portability as we with side, XXX%

account a of data data their aggregation, We also in manually for with them. facilitate process do that it customers our payment our transfer new to automatically to we not portability bank to their by enter so us, do have

have which growth of called advantage We take environment. the launched [indiscernible], current rate rate to mortgage customers allows mixed a product low-interest

choice, freely enabling their tickets program, for loyalty points products exchange and their cashback. our opened as well also as have We customers to of travel Itaú

We on investment platform will about the next number XX. talk open Slide

best global a market, XX. integrated have That freedom asset also with asset product our governance shown a management the example well of architecture, the own as with and would research. This is open Slide is partnering to into like to business. as investment business we our side, how recognized our responsible as are ESG We are the in On on aspects offering sustainability available highlight and local as top I independent why good corporate options in of that advice. investment leader have is choice clients investment, we managers. want

The of XXXX environment of mentioned channels at our We good that believe I communities As the back do. and in and, with digital remember conference March transaction had we the that governance, in core towards continues. taking have. things is society you of general, in quarter positively trend being strong engaged the business part the having that responsible banking care are year, this we call, in in that might fourth the

of digital and first the companies providing for bank convenience and from corporate Itau to new this for token additional have components XXX,XXX were a to technological We leveraging SME app. our clients. Unibanco; migrated see digital a clients transfer we That we we why this in Slide quarter, on our in have XX, high whole maintaining As in see a launched app, three-fold heavily been while a two In deposits investing or new year-over-year channels. the is lot availability. increases already the over launch security we

more customer We and also website, transaction optimized preferences. launched have based a new on personal convenient banking

a we a As result, have experienced in utilization. XX% increase

which customer our on XX; two our and structure. a of element key simplification simplification to to Process examples let's efficiency. we and of Slide Moving Robert satisfaction On [ph] about talk this is give initiatives, our bit simplification, slide, of strategy a Automation drive little organization

We have base our in XXXX. while Robert us been having have over the is been unit in giving XX%, almost with enabled [ph] of boarding key customer Automation to our growth save We for projects a we reduced now, on a cost Process XX customer X.X% costs working experiencing in which completed base. our

organization. top our lower since the with proportionally in the most significant layers reduction in We the the reduction headcount organization higher merger, also of structure, in simplified

Let's than move our model market, home new that the to will an in flexible XX; means remote-first, is we pioneering working working that banking rather the in announced be for Slide have employees, from exception. a default option a initiative that Chilean

have the show as than we On grow in XX well in managed the will market competitive search that we expect it working some and more convenience of working found so possible, come. advantage talent far. we model preferable, XX; efficiency in flexibility flexible months, Slide new last provides achieved In model to to employees. a not but this the results years We as acquisition to in accounts. have We can have and retention, because our is only the fully be

Itaú X. the X.X the are working look with account a we we the Itaú [indiscernible]. at number Chief Baruc requests experience. far, attacking so the the It To still November last early But lately times we Unibanco in Baruc been as for four process. has digital are Sáez, the before, trend, Investment versus Banking. of effective individuals, shown We two portability, we inbound we have enhance If XX; financial Slide second as openings portability this Columbia, and XX are is On the on times times present fully Executive bank Latam with have that now months, in year. this we we years, new grew market also for in Head companies. XX

he international period economics conclude our take leadership the the wholesale you our strong Bank, will Brandeis comes any lead Management, ABN Colombia. in joining phase of Colombian at of College. Asset from for AMRO Before under we a He has Deutsche [indiscernible] banking worked presentation Barings. Itaú, And a background questions of bank the today. have With master's in with evolution next have. to adjustment ING investment our operations, the of gladly and in this, positions a we and and of commercial you might management, in we that University reorganization finance After from bachelor and a Marathon Bard

Operator

question first comes Your Mollin Jason from of Scotiabank. Instructions] [Operator

is Your line open.

Jason Mollin

for in presentation, of return the the in us account that that just the we've seen returns think in Thanks in presents of CorpBanca opening basis Gabriel, and on environment, follow cost forward imagining this obviously you and that on Maybe Itaú at showed Itaú on can Itaú much. talk tangible in to a Perhaps on about up a second detailed secondly, looks versus what difficult I'm you line in then, your very bank fashion a on Unibanco? XXXX, the tangible equity is about that's give Chile. opportunity and a And lot equity. equity, you you consolidated you the how couldn't negative questions. -- Thank bottom ask pressure on

you you. you what's that? are tell your Thank driving products differentiating to us If and how that achieve can

Gabriel Moura

Perfect. Thank you for your question, Jason.

a have see a our when I year, look P&L two forces do that typical on We take I at impact the tangible different return and equity.

and one The the one are major provisions. first the

we And formation that's the this are the in we mentioned, all why and a without forward-looking you that provisions this saw portfolio. are for the in As now market. jumping we that second we need corporation the I Chilean think year in And coverage. are doing this way, incorporating our we largest

So we terms better for in are will phase of our sheet start for that preparing results. its looking of the bank new in XXXX, terms balance in a

especially results down the with drives margin year with also that force second The capital. rates, financial our liabilities this is interest and

still you growth. got certain a were able of of quite do terms because the going the on to a revenues, were corporate side that to In on we spreads But and year, when do the terms the the line credits, to to main little we of rate interest grow process. next have bit low maintain economic spreads But the to were on stabilize in regulations, able a driving from We this of see clients, portfolio part mix I at new consumer in we look But market. we especially the affected. then our we defend of expect pressure as this a we're margins, we again, we is pickup force; look a that take continue. if see take at provisions

But think twice second your we the been and a our the in from have a question. somehow Going business basis we I now. compared the consumer mix, from in market terms years for along in of banks, growing We've still comparison. part direction. that's the from moving other is a of to still different lower pieces some key wholesale, We of to right have business, in the the came we mix forward, challenge connects retail growth are

are absolutely us. -- in of efficiency terms are SKU crucial in So profitability, growth for

forward far, we the of was proposition so we've put retail, value the -- strong. it been our in that quite in that things terms In doing

up our feelers with we came for before, retail and mentioned different business. offers seven I As

investments in we for We For of app with came transition giving digital have, that while and the made repainting as from the clients. our for from the instance, process We Brazil interest aggregation is we flexibility of for mortgages all business aggregations in portability bit fully have we We account our make we the banks digitally, that up opened to also day a the did new other possible. product products this website eight the that all period. architecture interest order at the to ago. a little the rates generated have fully the clients some process lower -- in meeting gain, one other for we

been I think so so enough and those And look we to credit -- offer. that value I is blanches market a from when at in approved, see have growing for perceiving so we than we've forth, products propositions the fortunate far I aside from bank be take have the the the that offer offer the on that digital more this do portability as market. the

we times and offer As X.X have. outbound I are with inbound we mentioned, that the

the better see convergence of have year the and first was we going XXXX. to year equity are results, we're of path in we return terms to have a a best the that tangible the then had results. with little Chile, we that on That's of convergence In probably XXXX, in next XX.X% bank the in which We're much expecting. path in bit XXXX what to

of Columbian the the risk, equity around that, think strategy. the a targets, an course, bank of don't the operation, at and the think are possible. have. of bank, we we that and converge target interest changing the on on we changed, part the that will -- the go-to years structure, I When innards in timing us. last phase involved market they do more that's years But enter return Chilean social from next will in to changing a XX%, the the the we the we for less unrest, now more three the five to digitalizing less arranging -- terms with are we And policies, In were that's you pandemic, we without think a what generated ready of which the new look is at operation, a take the tangible

We in a to Colombia. have private tougher path convergence part --

We in and are returning equity going see XX% from Colombia to five between to tangible now, are XX%. years

that of in the and mainly So think that in had, we The and we that, expectations management the in economic the size very have we now we was we as the the technology Itaú remain the I this and possible, remain timing the achieve with XXXX changed. XXXX but we we and XXXX, was optimistic mentioned, targets can expectation had because that is pandemic yes, that for optimistic. haven't expected we of If what and different have environment ambition with that arrangement different terms with the that and we than same, is since operations. Corpbanca those very

Jason Mollin

should know difficulties terms and as the the you year is really what Gabriel, But been -- there you at provisions? lot based show you a to on today face those and are well. It they long-term October That's is Itaú The these for of disruptions. targets due that this the worst was it? next large clearly, address that lot The we're and loss questions. is, could year know this be that today, very that what helpful. of in of if you things enough behind here, -- change. in provisions. on based did Corpbanca, rest we Is going have But is look message still numbers to these a now

Gabriel Moura

credit between X% clearer, -- that to next and even for cost year in message X.X%. the That's guidance giving are of we make a

I of having sheet want XXXX we have incorporating behind about don't are and mentioned, into us, put provisions the to balance or pandemic. discussions credits about worst XXXX I this view -- the a So prepared, to XXXX as in forward our the especially

and take the look shows we need. significant. are of that the big we in putting we the a going a this results, it coverage discussions are It's past all again, putting behind adjustment. at But of having that the the path and in pandemic If impacting then We the that's us. past forward the past,

XX% as And about see and somehow better see on as the AFP of new the market. the we we're for expected than the vaccine, about hoping a scenario talks talks we we

constitutional the process worse. about uncertainties but we remain positive, we but Chile, for still the there's in course, Of prepare

Jason Mollin

you Thank very much.

Gabriel Moura

you. thank thing, Sure

Operator

with Your next question comes CrediCorp from Mora Daniel Capital.

Your line is open.

Daniel Mora

Hi, so one portfolio And for the of good thank at behavior clients of of you I have the the of any benefit? us the Can type of beginning tell much. of payment for morning, the question. percentage everyone. please that evolution ask what you benefit crisis? any is been loan presentation. still the what has under you type And Thank

Gabriel Moura

question. Hi, so you Thank your for Daniel. Sure. much

we I think time a positive evolution terms that that in we in portfolio here more gave of Chile. saw the

those consumer extending due with take that remember clients during the of we for part, of a you May same the came XX thing the the Most mortgages, XX%. When April, the higher a six of terms June, them months In credits. and we months option look payment months. at of did gave than and

are it from and generated is what income, due an why incentives thing. far, excess a there an -- still in So connection believe good. is that so that now to Nevertheless make important We we minor an there we The happening part XX% of provisions mainly Daniel, a income numbers credit, to paying a a coming That and better that with people due. we of is an need their Chile point, with the withdrawal good see government part is also the see that debts, institutionally, still question the fund. perhaps is right the is they saw a expected on from the what people withdrawal second scenario year? an high. But we are we new XX% than expert reactivation the of of economy is still quarter from not, month? It out a in following play sooner levels upside to with next that doing for is -- Net wanted be in we we the conservative the right doing that are has XX% are far the again, that we the are But used. expected. Because We But we at provisions a the uncertainty things there's how be unemployment us is your nevertheless, now. the the related wanted going cautious. generates answering in it to that provisions withdraw point, that and and question, because to it's right been than then now market, for more we pension did. better much think the to But that funds, the in performance excess of performance I this very the the terms so that or or which still to certain that's market. on vaccine than are have

Daniel Mora

so Okay, thank you much. Very clear.

Operator

telephone I'm at I showing this no will over back to further presenters. call turn time. now questions the the

Gabriel Moura

you much Thank so Fantastic. questions. for your

the always, and Rodrigo, questions you Bye-bye. I for As see and Claudia time. you have if the about fully available next will any about bank, Take we are you, economy care.

Operator

this conference Thank you call. for gentlemen, concludes participating. today's and Ladies

disconnect. now may You

Banco Itau Chile (ITCLY) 11 Nov 202020 Q3 Earnings call transcript