Earnings call transcript Q1 2023

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Operator

Thank you for standing by. At this time, I would like to welcome everyone to the Banco Itaú Chile First Quarter 2023 Financial Results Conference Call and Webcast. [Operators Instructions]

Thank you. Rodrigo Couto, CFO.

conference. your begin may You

Rodrigo Couto

statement and managerial Good presentation. morning. the to conference for I forward-looking joining you differ results materially from would you we quarter presentation, financial the Management of for in for what information include like first draw may like in which based our our our and XXXX. criteria also actual is included apply that to which could remember your income this call to discussed remarks Thank information that attention I since model I on events remind would nonrecurring disclose our and adjust statement. for Analysis in that the managerial Discussion Please our cost This same in performance; management; and one, first management; risk we from do these two, financial as this a managerial to discuss view details. in MD&A performance segregating: risk our the we the efficiency. report will of form of XX XXXX, financial clearer perspectives. our of quarter and for and Please you measure, to service. manner commercial financial results our We reflects pages different we refer give four, model how our representing better are by analyze credit results income of that X three, further presenting believe

presentation. Gabriel the Now with CEO, continue our will Moura,

Gabriel Moura

results. morning, XXXX Good you quarter well for implementing update for highlights present as Thank of Rodrigo. progress everyone. Today, conference on call. our as of you, we first strategy Thank our joining our quarter you us this first the will

X. Slide on Starting

bank now on, is that We are Itaú name the from proud of to you our Chile. tell

from Itaú changes this Itaú as May ITCB necessary the of York of Bolsa connection And XX, de to of in April effective the depository the code to changes Stock X, Exchange from the Chile of ITAUCL on all Banco XXXX. ticker as And Santiago identification New for traded in the March ITCL Chile completed shares have symbol change, American XXXX. share XX, formalities XXXX. We with the

and On Directors, Consequently, in present Itaú Annual of new on appointed with the Slide bylaws. Samhan member and XXXX. principal XX, in members, alternate of Luis composition elected were Independent one accordance Meeting General Mr. were Board the was appointed Banco Board Directors. Shareholders' of members X, following Mr. April the bank's Octavio Bofill seven the Chile as we our held which Pedro

show the the On split reverse proposal. we next #X, page, stock

our the a subscribed of capital. of the We shares divided amount maintaining will decreasing in of while ratio of number the X,XXX:X, by shares group bank bank's capitally the paid and

Meeting Our share goal is improving for that process. the with and price this There make will fractions fiscal user with minutes who stock for prices XX are comparable be the Extraordinary investors cease investors the result approved in compensating will The the shareholder of -- negligible. a in are no financial of detailed Shareholder stock split rules to of to this more a as own friendliness split reverse cost investors, investors. share our the be after no to the The bank market, of reverse to January the it. impact process shares

process complete XXXX. by end of the this to expect May We

and centricity Under first on electronic prevent pillar, initiatives one is In focus customer to of Slide on we Moving fraud. foremost, banking targeting and are non-clients to X. customer because alike. to our customers and our case, help we of our clients highlight this

protecting our of for customers and We information everyone's are security the creating because digital is financial personal responsibility. our content

and recommended our companies bank Chile. Our by customer made focus us by in most has been which clients, individuals recognized the

launch cards is excellence. oldest We Award of most and world's that iF campaign of independent won iF announce the of in organization praised Award Design Design the in design category. Germany for in RappiCard and the iF excellence hallmark as to from one proud design Itaú are we partnership a with International design. one in is recognition communication the the world of the X, Slide our our marketing On Rappi the credit received award

Moving on to Slide X.

share We are Managers as we also were Fixed Asset happy in recognized to in for that XXXX. Best the Morningstar by Income Chile

clients, We and to commitment offering our best while also the awards. investment choice have through our ample first for position fixed open according the the architecture. Salmon achievement income funds best achieved make products demonstrates in mutual the to performance the This our also

our on Now to app. Itaú where let's move X, Slide of latest mobile functionalities the show we

which new functionalities deployment accelerated experience. app squads, working We on through agile continuously our of are have improving our

We ways to continue functionality different our customer for rank find satisfaction #X in continue make new and to develop to easier customers. life to

On Slide largest show bank the we that media are in XX, with we follower the social Chile.

as approach of trends have those on of We different such communities is worked that content are across setting developing LinkedIn, #X and This in YouTube through worked has as Instagram, all our and we current TikTok. platforms, and terms potential customers to platforms. clearly interest

progress are hard this to our a another of Let's keep and most customer dimensions Great XX each that bank customer we and and one as performance according we building by in us in each in where in one as well satisfaction to Work. achieved Place now is of those it. reinforce it momentum, Therefore, leadership recommended we are made of lot satisfaction well of to as result certainly forward Best long not in improves. pushing took will Slide employee Companies upon to a as satisfaction the move we customers. or create Chile positive to in that time as as in of work show effort satisfaction we It The a XX, employee the put have Work for It financial a coincidence.

On ESG we Slide address two XX, topics. will

XX% On as this the Despite is decrease to next such seven reached that renewable reduction a have committed our we accomplishment, our side, years. and initiatives, footprint further show carbon to switching to XXX% XXXX, of ambition our reducing the on left-hand In greater, footprint. different in result we are the energy. chart this carbon managed emission we as systematically

by XXXX goal XX% of our emissions according the initiatives. reduce impact to nonfinancial by Our to science-based carbon target is

diversity supporting I'm commit inclusion. and in Chile Nations pleased strategy to women's empowerment gender we United going to bank the announce which to guide private became that equity forward. towards first Moving our principles, will

we of Now moving present highlights where quarter XX, to Slide the for first XXXX. financial

cost the over in Chile reached billion, both of volumes, of income was of Colombia grew decreased by result as ratio months well XXXX, credit clients as base first assets as the income XXX.X% XX.X% of the in Chile. by previous income grew net especially fund the primarily credit-related Colombia. and Chile fee Consolidated fees. as Chile in and billion. which in Ch$XX.X XX.X% average liability as low due increased high by Consolidated also by consolidated basically well financial by by withdrawal year-over-year. services margin higher at efficiency noninterest rates a high positively year inflation portfolios during the the mainly and observed year, Our higher higher Consolidated boosted Advisory results Net Ch$XX.X to X.X% stable X.X%, in in XX.X%, Consolidated to recorded developed increased a year-over-year pension in decreasing expense interest impacted in leaving with Financial XX.X%.

the year margin currency Chile our represent a as mortgage higher little quarter X.X% and look market, see plan. than wholesale little came to at cycle, as predictable. the XX.X% with a in which expected within of credit start grew later, biggest difficult you line results -- our is constant March to a result according in portfolios, consumer cost Colombia less of with The in contributors. guidance. Chile of lending a than When is financial at our compared at This a in and this in weaker in capital of but we came market our in loans which Colombia our in line we scenario Colombia more XXXX will and that a is as first credit that At there. expected Chile point bit

improves equity, the XX.X%, quarter our below was XX% which on range recover and a our next XX% was medium-term consolidated As between but should margins of base, target on in result, to Cardif tangible on we markets a Insurance. credit as and begin alliance our financial on return with this cost impact fees the pressure of low the subsides, the see with from

low couple can seasonal the that sale financial of and increased to that we notice relative has clients decreased margin namely by this the of in previous to our effects, and the XX, decrease Slide the Chile this with first calendar quarter QX. positively impacted quarter to during loans with year. the of The days in number student a do XX.X% fourth Moving quarter X.X% over

which deposits, time interest Another the trend factor deposits to industry-wide to migration related rates. higher demand of an was is

Ch$XX.X first can XX% Slide see of is which financial with quarter XXXX, market fourth X.X the On our we during was the percentage by is margins largely decrease points billion, decrease from quarter. The XX, inflation lower explained this a period. in that the

as inflation been exposure reducing inflation our have falls. We

financial not So decreases with expect do to we the further inflation margins impact significantly market.

was of last XX, allow fees. expect the the though exclusive where The us non-credit-related fees, growth On our commissions credit-related driven grew from will as partnership and Insurance we with which one by products. Financial boost our improve slightly as of well big even relative insurance a year-over-year fell higher fees Slide quarter. Advisory they to which is penetration year-over-year, brokerage X.X% lines Cardif, to

an credit on indicators X.X%, at of remained credit which was Chile. is represents by NPL cost of XX points The first in of In the annualized Ch$XX.X our and increased we XXX%. which the to risk high XX, of to declined Here within guidance of rate but cost total credit slightly coverage Slide portfolio the major ratio present billion, X.X%. credit basis our X.X% quarter,

on to the collection concession focused the as well -- capabilities credit point policies made prudent managing as well boosted necessary this having as point as We point the additional the believe cycle right adjustments have pricing fully strategy we credit are for including provisions, level and cycle, efforts. We of this execution the of and of the provisions.

expenses graph we noninterest which after at show back over by XX XXX digital. and percentage by between ratio XXXX relocated progress of XXXX, XXXX and In significant we to the long-term expenses on of high period, while The the headcount shows commitment efficiency for level line page strategy fell ratio our to the our Over in side of XX, made but grew last X% our in shows almost IT QX efficiency and towards the business quarter, XX with points. seasonally long-term That in year's. Slide accordance efficiency, right efficiency technology as a on normal inflation the came even last XX.X%, development. Here we the that months. significantly only fell also below the that to our have people dedicated that not and resources improved view bank digital noninterest

profits to move we Slide slight in to a XX despite Let's a quarter, Where on and last relative returns more saw difficult Colombia. macro environment. improvement

team the as well cycle. forward in push the the improvement as a with side, a reduction quarter more of continues cost Progress on XX% year-over-year. continues we most bank while first through headcount in in with visible stage closed XX the Our managing Colombia be where the in branches challenging to transformation to fewer

of position picture our returns strength is On is convergence to That well, achieved. highlights that convergency have and have our capital complement you the financial of are those and showing profitability, the been and peers, of our in critical liquidity the will we of that I of industry. we Slide competitors. with dimensions may XX, main the to ratios line the That those in quality capitalization again main say, show that we pretty comparable our as and of with performance credit much in add which liquidity that

return XX, with the On on and started for recap XX.X% of in Chile. We messages tangible year consolidated this on tax-law the Slide equity presentation. XX.X% equity return we key a

margins which the is relative returns bit market, to While line little with with with which of exception quarters, fell plans financial less expected, results in was a the prior our predictable. were broadly

cost income. as low quarter's financial fee stronger base, impact the be from will this credit of alliance margin our to see pressure the quarters subsides, on we market improves coming begin of the that expect and with We with Cardif

well double to satisfaction. We employee with in ESG performance multiple through as concessions economic across both continue managing of the dimensions inflation. having structured focus management risk policy as cycle, credit current and pricing adjusted well market external internal manage our make of focused collections interest customer on to remain rates on and asset adjust exposure fronts, in to as sensitivity satisfaction, and We progress as key dimensions

as business our manage actively comes cycle to the unfolds information continue in. will We and new

are strength have capital but also line competitors, our and financial convergence only peers. more those as Finally, main returns, in of in liquidity in achieved ratios we with broadly our our not strong with

presentation you might that that have. had With would this, questions the you any we for we take we conclude today, gladly and

Operator

Instructions] is from Recalde [Operators Scotiabank. Your question Juan first of

Juan Recalde

My first NPL the question is ratios. related to

continued a increases? NPLs and seen and ask where do in that in further have see peaking we the both And And increase. we wanted So we can Chile I you are expect whether you when cycle Colombia? think to

Gabriel Moura

Hi, Juan.

I think this perhaps the the that greatest is about cycle. here question NPL

have that think Perhaps that we market. this indicators, quarter normalized levels. still convergence way, We are see as see are conference we at that a NPLs. is will last end would see let's NPL I what the we we we about of we leading predicted, in put the As -- a -- in credit tight of that more think first that the the mid-cycle. talked we don't a call, it to we are cycle more pressured

I lower see need still we think interest right we see now. to than rates

this cycle it's monetary in too perhaps to perhaps policy So early and in the see of in year, second I at that going an to Colombia, the of Colombia. say we're think start in easing Chile semester

think the margin, Colombia we I lower lower we easing But rates rise So little in seeing at are NPLs cycle Chile, numbers. I bit now. inflation, right better that should think see interest It's are will XXXX. In more a and lower in see the we in level NPLs higher to NPLs. also seeing a that we our are impact saw, have in to least to that similar at that those to case, convergence levels important a than of

this the cycle. NPLs view the is waiting we are think But for information So of our in I order clearer there a of also in still mean have of to a effect conversion models end cycle. incorporating

Juan Recalde

expectation to but line the margin this But that second, I And have improve. to ask related market, the a is you you follow-up, you, mentioned financial I the that I -- have with think to wanted we improvement market particularly about we than in can see that XX there? the negative Colombian operations. margin couple with the think seen of financial have the that of past billion Do quarters. you I more think an for

right just how is, that. is evolve? week? last rates there they to expect So you understand how question this my So do in the impacted this I'm to by And trying Colombia because were

Gabriel Moura

Sure.

year. also the volatility, predicted I the most that's think in terms of line will have that this impact we

As in us know, and manage Chile, book more the as well you banking market the in real terms.

because a the inflation, is And and interest reduced inflation of pretty to covered So Chile it that combination also sheet for with volatility our next in balance think here exposure rates. have the of much we our we we cycle.

the is there. shift very Colombia, small because compared we our a to rates capital. on rates. exposure In also the Colombia, interest of have But to impact marginally in interest small affected the mark-to-market are is high balance very we in sheet All

impact terms the margins, financial are see this we of full year in going market. to with basis more XX mark-to-market. than less the points pressure it's on on margins So Nevertheless,

that end expectations that I to signal it Colombia is of process. the monetary don't We we tightening different have. were waiting think the from for the

since markets think terms the Central margins is with need But on Bank throughout a in little are meeting of last I conservative are the we we see, those last What that of very incorporate doing time. to financial terms. being information quoted bit we that year.

rates exposure, monetary So this in inflation, look exposures and the Chile convergence have a especially both predicting in if in policy. Colombia, our take we you reduced we at interest and

us. but it is a plan, headwind it So for is according to

Operator

a Mora. question web Your from next is Daniel question

Daniel Mora

much. XX.X% you it XX%. current target XX% so better figure the to below improvements of long-term provide know you Will Colombia? Thank not of where -- higher should in a I operations well observe financial here, long-term reach before clients, the fees, the to RoTE From but do is cost the with margin that we be the goal? control,

Gabriel Moura

in said were for guidance dilute between Chile always equity normally that of on you operation Colombia is guidance the that talking we also XX%. about we the Thank and X% have for That's XX% that question, the us The the X% And your and about main and consolidated. why XX% we between for a results. between of return talk XX% we Daniel. tangible

return separate two we you a XX.X%. If Chile, the had of discussions, in

would I So say for that are line mainly in we our we Chile. with return expected in what

So it's within the range XX%. of XX% to

the for quarter. as as is more why that's the in -- cycle you between first far What consolidated challenged the see in difference it’s predicted I longer bit the Chile. because a Colombia, taking than And Colombia we little of think market in

So in as we we prepared management the we I everything well did that in had confident still the for that the risk that in of transformation with think I bank, terms think we that are cycle are Colombia Colombia. in well,

take of in a especially Colombia, results some of banks were in the Colombia. you If first the the look quarter in at negative the banking industry

challenging to that the sailing continue on push think through are we we forward I but a little cycle expectations, more Nevertheless, a I our than compared worse it's to think this. bit here. industry, So

volatile So the the we In Colombia, in for this return still of and on be to our dependent more a have it’s a dilution year. to within Chile, us are consolidated less basis. we in and range, perhaps Chile expect range within

Operator

from follow-up Mora. Daniel a As

Daniel Mora

I the in the be decrease inflation? zero. this exposure the saw of that net is U.S. effect upcoming considering quarters, the would practically What in

Gabriel Moura

Daniel. Hi,

interest in inflation rates our balance manage in and we way sheet. active know, you an As

the all also policy in we rates we more that monetary started countries that operate. had tightening a saw and scenario inflation, because the exposure So last interest especially year, decreasing for in we we process on of

think exposure to the we and benchmarks the According a have inflation. to bank I this in that have exposure we sheet. are our benchmarks lowest industry exposure compared the to with we interest internal nowadays, cycle order to also to inflation. interest that Chile to do lower to rates management we lower also That's capital, a our the and that the In for -- the balance protect risk active rates to

that the inflation. So accrual in book, to and increase our we exposed less what expect interest volatile movements are we is part also rates of we banking and

our of So level a independent is exposure -- we changes more as hedging are hedged inflation. certain we in inflation of that inflation in month-to-month somehow the to

And number cycle. that hedged exposure that the are we had with. banking through is the think, think I year. the did again, book are That's, banks compared Colombia, to Peru, we level, I management, In used rates in book are I our that the same comfortable interest Paraguay, managing very very in and last months. interest to. are advantage active we to that's Argentina, rates. would in historical in Colombia, we are continues say, And managing are to very defending we in in in that Colombia capable left, are the I that margins that we we then something in XX very was Brazil, way. in very And on it why of Chile, in low of risk actively the we think banking the is used be Uruguay, The main we that this movements

That’s pretty much it.

Operator

this at no We questions have further time.

Gabriel Moura

your Thank time. Fantastic. much so you for

quarter. and are or have, As Take I you see always, any and you follow-ups next for we'll that available Rodrigo care. questions might

Operator

for call. Thank your participation. you This conference concludes today's

disconnect. You may now

Banco Itau Chile (ITCLY) 2 May 232023 Q1 Earnings call transcript