institutional presentation - itau.co. corporate... · bank #6 in colombia, with over 485 thousand...

December 2017

Itaú Colombia Institutional Presentation

| 2 |

Itaú Colombia | Who we are?

We maintain the group’s structure with Itaú CorpBanca in Chile as our parent company and Itaú in

Brazil as controlling shareholder.

Source: Itaú CorpBanca Colombia 1. Since April 2016 Itaú Unibanco increased it´s participation by 2.48%, percentage sold by the Saieh Family according to what was established in the Shareholder´s Agreement. 2. Includes 182,125,023 shares owned by Cia. Inmobiliaria and Inversiones Saga S.A that are under custody. 3. Itaú (Panama) has international license.

Itaú

CorpBanca

Itaú CorpBanca

Colombia

CorpGroup Helm Minority

66.28% 12.36% 20.82% 0.54%

Itaú Fiduciaria Itaú Securities

Services

Itaú

Comisionista

de Bolsa

Itaú (Panamá)3

Itaú Corredor

de Seguros

94.0% 94.5% 95.0% 100%

Itaú Casa de

Valores

(Panamá)

100%

Itaú

Unibanco

Saieh Family 2

IFC

Others

36.06%

30.65%

3.32%

29.97%

80.0%

1

| 3 |

Leading position in Brazil

(*) Includes the consolidation of Citibank in the 4Q17. (1) Includes financial guarantees provided. (2) Represents Net Income adjusted for certain non recurring events described in the 4Q17 MD&A – Executive Summary. (3) Represents Net Income adjusted for certain non recurring events described in the 4Q17 MD&A – Executive Summary. (4) Calculated using Recurring Net Income / Average Equity. For annualized calculation method, please refer to Historical Series Spreadsheet. (5) Calculated using Recurring Net Income / Average Equity. For annualized calculation method, please refer to the 4Q17 MD&A – Executive Summary. (6) See “Efficiency Ratio” slides in this presentation for criteria.

• US$83.3 billion market cap1

• 96,435 employees in Brazil and abroad

• 4,910 branches and CSBs in Brazil and abroad

• 46,965 ATMs in Brazil and abroad

• Brazilian multinational bank

• Major provider of finance for the expansion of Brazilian companies

• In 2017 Itaú Unibanco was elected the The Best Company in People

Management (by “Valor Carreira” magazine) and also recognized as a pro-ethics

company (Pró-Ética), an initiative between the Office of the Comptroller General2

with the private sector, which encourages the voluntary adoption of integrity

measures and corruption prevention in the business sector, being the only

financial institution among the companies approved.

Global Footprint of Brazil’s Top Private Sector Bank| Dec. 31, 2017

Financial Highlights and Ratios As of and for the quarter ended December 2017

Exchange rate of BRL 3,2440 / USD as of December 29, 2017 1. As of December 31 2017. Source: Economatica. 2. Controladoria-Geral da União (CGU)

Itaú Unibanco | At a glance

Total Assets (*)

Total Loans (1)

Stockholders’ Equity

Recurring Net Income 2017 (2) (*)

Recurring Net Income 4Q17(3) (*)

Long Term Foreign Currency

Recurring ROE 2017(4) (*)

Recurring ROE 4Q17(5) (*)

Efficiency Ratio 2017(6)

Efficiency Ratio 4Q17(6)

USD 463.6 Bn

USD 171.9 Bn

USD 39.1 Bn

USD 7.7 Bn

USD 1.9 Bn

Moody’s: Ba3

Fitch BB+

S&P BB-

21.8%

21.9%

46.3%

48.6%

16.2%

Highlights

Financ ial Ratios

(Itaú Unibanco Holding)

Common Equity Tier I

Liquidity Coverage Ratio 190%

| 4 |

Employees: 1,700

Branches + CSBs: 87

ATMs: 178

Argentina

Employees: 5,922

Branches + CSBs: 201

ATMs: 469

Chile

Employees: 82.640

Branches + CSBs: 4.383

ATMs: 45,769

Brazil

Colombia¹

Employees: 3,644

Branches + CSB: 174

ATMs: 176

Employees: 1,122

Branches +CSBs: 26

Points of Service OCA: 35

ATMs: 61

Uruguay

Itaú Unibanco | Retail Footprint in Latin America

CIB

Minorista

Mexico | CIB

Employees: 9

(1) Considers employees and branches from Panama

Employees: 829

Branches + CSBs: 39

ATMs: 312

Non-bank Correspondents: 57

Paraguay

Peru

Representative

Office

Panama

| 5 |

Organizational Structure | Strong and integrated Corporate Governance

1- Itaú Unibanco and CorpGroup appoint the majority of the members of the board of directors; 2- 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. 3- Responsible for the technological integration process in Colombia

Board Chile

Itaú CorpBanca CEO

Milton Maluhy

CFO

Gabriel

Moura

CRO

Mauricio

Baeza

Treasury

Pedro

Silva

Marketing &

Products

Rogério

Braga

Colombia

Álvaro

Pimentel

Wholesale

Christian

Tauber

Retail

Julián

Acuña

Human

Resources

Marcela

Jiménez

Legal &

Compliance

Cristián

Toro

IT

Luis

Rodrigues

Itaú CorpBanca Colombia CEO

Álvaro Pimentel

CFO

María C.

Vandame

CRO

Juan Ignacio

Castro

Treasury

Derek

Sassoon

Communic.

& Institut. Relat.

Carolina

Velasco

Wholesale

Jorge

Villa

Retail

TBD

Human

Resources

María Lucía

Ospina

Legal & General

Secretary

Dolly Murcia

Operations

Liliana

Suárez

IT

Lilian

Barrios

Board Colombia

Chairman

Milton Maluhy

Chairman

Jorge Andrés Saieh Guzmán

Board Chile 1 2 Board Colombia

Chairman

Milton Maluhy

Ricardo Villela Marino

Eduardo Mazzilli de Vassimon

Boris Buvinic Guerovich

Andrés Bucher Cepeda

Pedro Samhan Escandar

Roberto Brigard Holguín

Luis Fernando Martínez Lema

Carmiña Ferro Iriarte

Rafael Pardo Soto

Juan Echeverría González

Gabriel Moura

Rogério Braga

Mónica Aparicio Smith

Matrix reporting to CEO

Colombia and functional

reporting to ITCB

Functional reporting to CEO

Colombia and matrix reporting to

ITCB for coordination of specific

themes

Franchise, Products

& Digital

Luciana

Hildebrandi

3

Fernando Concha Ureta

Jorge Selume Zaror

Fernando Aguad Dagach

Gustavo Arriagada Morales

Bernard Pasquier

Audit Comitee

CAE

Emerson Bastián

Operations

Eduardo

Meynet

| 6 |

Itaú CorpBanca Colombia | Highlights

Source: Superintendencia Financiera & Itaú CorpBanca Colombia, Exchange rate of COP 2984,00 per 1 USD as of December 31, 2017 1. Depuration in the number of accounts due to the technologic migration process. 2. Includes cities and major municipalities 3. NPLs 30-days 4. Bank and subsidiaries. includes Panamá

Bank #6 in Colombia, with over 485 thousand clients1 and presence in 30 locations in Colombia 2 and one in Panama

Itaú CorpBanca Colombia’s Footprint as of December 30, 2017

USD$ 10BN

USD$ 7BN

3.594

Gross Loans

Assets

Employees # 4

ATMs #

176

485MIL Clients#

Branches #

174

MS: 5,0%

#Player: 6

TIER I: 9,3%

Total Capital Ratio: 12,7%

NPLs 30-days: 3,8% 3

Net Inc. FY16: COP~ -150,93 MMM

Net Inc. FY17: COP~ -121,28 MMM

Two brands in Colombia

| 7 |

Itaú CorpBanca Colombia | Accomplishments

Source: Itaú CorpBanca Colombia

The Bank continues with its plan of implementation of Itaú’s model in Colombia. Successfully completes the milestones set for 2017.

Sustainable performance in the long term

2016 2017 2018

Change of strategy for the IT integration

Liquidity and Market risks alignment

Gradual reduction in the market-risk limits

Implementation of operational-risk standards

Beginning of Wholesale Loan Portfolio revision

Completion of IT migration

Digital strategy

Reorientation of Retail Banking

Customer Service Quality

Culture phase II

Reorientation of financial results

Incorporation of Corporación Financiera Itaú BBA (people and assets)

Introduction of the Itaú Brand

Beginning of technological migration

Wholesale-Credit project

Restructuring of the Retail-Credit area

Beginning of Retail Loan Portfolio revision

Creation of Franchise, Products & Digital

Evaluation of products and businesses

Creation of the Commission of Capital

Culture phase I

| 8 |

IT integration | Migration stages

Source: Itaú CorpBanca Colombia,

From January 22 the 100% of the branches are branded Itaú, getting ahead of the set schedule

01 Individuals

54% of clients migrated by 2017

91% of clients migrated as of January

2018 with the fifth stage

100% of branches branded Itaú

Contact Center’s key indicators with

positive balance

02 Companies

55% of clients migrated by 2017

88% of clients migrated as of January 2018 with

the fifth stage

Business indicators show normal behavior

Assurance for clients with special features in

stages 6 and 7

| 9 |

15 15 13 13 13 12 11 9 9

13 13 12 11 10 11 11 10 11 10 10 10 6 6 6

14 17

19 19 19

11

20 19 18

28 25

23

37 34

37

43 45

53

47 47 50

40 41

46

Gross Due

6,8 7,5 7,6

8,0 7,9 8,2 8,6

9,0

8,1

7,3

6,5 6,0 5,8 5,5 5,2

4,7 4,7 4,4 4,0

3,4

3,9 4,0 4,1 4,1 4,1

Source: Macroeconomic Studies Itaú CorpBanca Colombia & Superintendencia Financiera

1: 12-month growth

Macroeconomic outlook | Key indicators

Itaú Colombia continues to move forward successfully in it’s integration process despite a low-growth scenario for the country and a downgrade of the sovereign rating by S&P

7.75

7.50

4.75 5.75

5,5

4,3

5,0 5,4

4,3

5,2 4,8

5,4

4,7

3,8

3,2

2,6 3,0

3,3 3,4

2,5 2,5

1,2

1,7 1,3 1,2

2,0

1T15 2T15 3T15 4T15 1T16 2T16 3T16 4T16 1T17 2T17 3T17

Financial System Total

Target 2% - 4%

Central Bank Rate (%) Inflation (y/y) (%)

GDP (%) 1 Nominal growth of the Banking System’s Loans (%)

| 10 |

Net Interest Margin | Positive evolution during 2017

The Bank’s NIM has recovered by 60 bps on average

Source: Superintendencia Financiera & Itaú CorpBanca Colombia

1 NIM Loans Interest – Deposits Interest expenses / Gross Loans. Includes the cost of bonds, rediscounted loans and foreign currency loans. Annualized monthly NIM

NIM (%) 1

2015 Average NIM 2016 Average NIM 2017 Average NIM

Loans and Deposits Implicit Rates (%)

5,2 4,0 4,6

4,69 4,24

4,69 3,96 4,17 4,04 3,66 3,39 3,40

4,07 4,20 4,09 4,16 4,41 4,72 4,01 4,40 4,51 4,57 4,81 4,78 4,43

5,02 4,95 5,03 5,75 6,00 6,25 6,50

7,00 7,25 7,50 7,50 7,75 7,75 7,75 7,75 7,50 7,50 7,25 7,00 7,00 6,25 6,25

5,50 5,50 5,25

5,00 4,75 4,75

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17

NIM CenBank Rate

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

Loans Bonds TDs CanBank Savings

10,78

7,20 7,03

4,75

3,56

| 11 |

Funding Mix (%)

The Bank maintains it’s structural funding and increases the average duration of the TDs…

Source: Superintendencia Financiera & Itaú CorpBanca Colombia. Exchange rate of COP 2984,00 per 1 USD as of December 31, 2017

Funding evolution | Focus on structure

Less than

6 months

From 6 months and

less than 12 months

From 12 months and

less than 18 months

18 months

or more

9 9 9 8 8 8 8 7 8

44 43 36 30 28 27 31 31 29

40 40 49 53 51 53 50 50 51

7 8 8 10 12 12 12 11 11

Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17

Bonds

TDs

Savings

Checking

TDs by duration (%, USD Bn)

15%

15%

24%

45%

Dec-16

15%

14%

16%

55%

Dec-17

16%

16%

15%

53%

Dec-17

$3,7 $3,3 $48,4

Itaú Itaú System

| 12 |

14%

70%

2% 10%

5%

Source: Superintendencia & Itaú CorpBanca Colombia. Exchange rate of COP 2984,00 per 1 USD as of December 31, 2017

Composition of Liabilities | Diversification in international markets

Liabililities Mix (%, USD Bn)

$9,1

Dec-16

Deposits

Other Bonds

Foreign

Entities

Rediscount 14%

66%

3%

9%

8%

$8,7

Dec-17

Deposits

Other

Bonds

Foreign

Entities

Rediscount

Syndicated Credit USD 240 million

Subordinate Credit USD 105 million

… and increases it’s proportion of Liabilities with Foreign Entities following an internationalization strategy

| 13 |

Liquidity | Management under Basel III standards

Source: Itaú CorpBanca Colombia. Exchange rate of COP 2984,00 per 1 USD as of December 31, 2017

1: Funding: Savings and Checking accounts, Term Deposit and Bonds

Continues with a strong liquidity management maintaining an LCR (Liquid Coverage Ratio) above 100%

Liquid Coverage Ratio - IRL 30 days (%)

Ratio between Loan Portfolio and Funding1 (%, USD Bn)

100%

150%

200%

250%

300%

350%

400%

450%

500%

550%

600%

30/6/16 30/7/16 29/8/16 28/9/16 28/10/16 27/11/16 27/12/16 26/1/17 25/2/17 27/3/17 26/4/17 26/5/17 25/6/17 25/7/17 24/8/17 23/9/17 23/10/17 22/11/17 22/12/17

444%

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

89,4% 92,5% 90,5% 95,4% 93,9% 96,3% 95,2% 97,7% 100,3%


Net Loans

Deposits

Ratio

| 14 |

66% 66% 66% 56%

23% 23% 23%

28%

10% 11% 12% 13%

3%

Dec-15 Dec-16 Dec-17 Total Banks

Commercial Consumer Mortgage Microloans

Loans by Type1 (USD Bn, %)

Loan Portfolio | Evolution and mix

Source: Itaú CorpBanca Colombia. Exchange rate of COP 2984,00 per 1 USD as of December 31, 2017

1. Gross Loans

37%

33%

11%

7%

6% 3% 3%

The focus will be increasing the size of the Retail Banking business, reaching a proportion similar to that of the average of Banks in the medium term.

Loans by Segment1

37% Corporate

33% Individuals

11% Medium

Enterprises

7% Small

Enterprises

6% Construction

3% Institutional

3% Private

$ 7,1 $ 7,2 $ 7,0 $ 140,3

| 15 |

NPLs 30 days (%)

Coverage 1 (%)

Source: Superintendencia Financiera & Itaú CorpBanca Colombia,

1: Loan Loss Provisions / Past Due loans above 30 days

Credit-Risk Ratios | Evolution

B, C, D, E Loans / Gross Loans (%)

B, C, D, E Loans Coverage (%)

Itaú Colombia maintains a more conservative position as to Credit-Risk evaluation and provisions policies, anticipating cases of credit deterioration

2,2 2,5 2,5

3,3 2,9 3,0

3,5 3,7 3,8 2,8

3,1 3,0 3,2 3,1

3,9 4,2

4,4 4,3


Itaú Total Banks

6,5 6,6 7,1

9,0 9,8 9,9 9,9 10,0

11,5

6,5 6,8 7,1

7,2 7,8

8,9 9,4 9,6 9,9


Itaú Total Banks

185,7

169,2 171,5

142,8

179,6

164,5

150,5 146,8

166,0

155,9

143,7 150,7

145,1

155,5

128,2 125,2 124,9

134,0


Itaú Total Banks

61,9

65,5

60,8

52,8 53,3 50,3

54,1 55,0 55,0

67,8 66,5 64,0 64,9

61,6

55,7 55,3 56,9 57,7


Itaú Total Banks

| 16 |

Loan-portfolio quality | Detail by type

Past due loans for individuals maintain the trend to increase, while those of Commercial Banking stabilized

Source: Superintendencia & Itaú CorpBanca Colombia

1. Includes past due payments from 1 to 4 months

Commercial >30 days (%)

Consumer >30 days (%)

Mortgage >30 days 1 (%)

1,8 2,2 2,3

3,3 2,8

2,9 3,4 3,6

3,2 2,1 2,4 2,2

2,5 2,3

3,3 3,5 3,8 3,6


Itaú Total Banks

3,7 4,1 3,9 4,1 3,9 4,2

4,8 4,9

6,2

4,4 4,8 4,8 4,8 4,9

5,4 5,8 5,9

5,7


Itaú Total Banks

1,1 1,4 1,2 1,4 1,5 1,6

2,0 2,0 2,5

2,0 2,0 2,1 2,2 2,3 2,4 2,7 2,9 3,0


Itaú Total Banks

| 17 |

Risk indicator = Allowance for Loan Losses / Gross Loans (%)

Source: Superintendencia Financiera & Itaú CorpBanca Colombia,

1. Quarterly Expense.

Loan Provisions

LLP expense / Gross Loans 1 (%)

On 2016 the Bank evaluates it’s Wholesale Loan Portfolio, and on 2017 the Retail Loan Portfolio

0,7 0,7 0,6

1,0

1,8

0,7 0,8

0,7

1,0

0,6 0,5 0,6 0,6 0,8

0,6 0,8

0,8

0,8


Itaú Total Banks

4,0 4,3 4,3

4,7

5,2 5,0

5,3 5,5

6,3

4,4 4,5 4,6 4,7

4,8 5,0 5,2

5,5 5,7


Itaú Total Banks

| 18 |

Other P&L concepts | Commissions and Investments

The Bank has redirected it’s income generation towards recurring sources and more profitable businesses, resulting in a temporary reduction compared to past periods.


89

51

18

13

2016 2017

Investments and Derivatives net income (USD Million)

107

64

Variation

2016-2017

-40,6% CIFIN

Sale

Shares

interchange

Deceval - BVC

Net commissions (USD Million)

44 44

9

2016 2017

Adjusted

variation

2016-2017

-1,3% -43,4%

53 18,7%

Adjusted

variation

2016-2017

Variation

2016-2017

Reduction in

Insurance

| 19 |

Profit | Trend of recovery

In a year of lower profitability for the Financial System, Itaú shows a trend of recovery ending with a ROE of -3,4%


1: 12 months net Income over 12 months average of equity and assets

20 10

-31

-50

-11 -11 -10 -9 1T16 2T16

Quarterly Income (USD Million)

Loss 2016: - $51 Loss 2017: - $412

+ 20%

7,84 5,94

2,73

-4,03

-6,55 -8,43

-6,84

-3,45

10,49

0,93 0,7 0,32

-0,47 -0,77 -0,99 -0,79 -0,40

1,36

Mar-16 Jun-16 Sep-16

ROE ROA

ROE & ROA1 (%)

Total Banks

Dec-17

Dec-16 Mar-17 Jun-17 Sep-17 Dec-17

1T17 2T17 3T17 4T17 3T16 4T16

| 20 |

Tier 1

Consolidated

Tier1+Tier2

Consolidated

Non-

Consolidated

Capital Ratios | Stable Regulatory Capital Ratio

Consolidated regulatory capital ratio Sep-171 (%)

Non-consolidated regulatory capital ratio Dec-17 (USD MM, %)

The Regulatory Capital Ratio remains stable after the results from the years 2016 and 2017


1: Source: Annual reports of each bank.

1.027 247

781

271 14 1.065

Tier 1 w/odeductions

Good will Tier 1 SubordinatedDebt

Other RegulatoryCapital

9,3% 12,7%

10,3% 9,4% 10,2% 7,8%

9,0%

15,5%

21,6%

13,3%

15,8%

12,7%

Bancolombia Bogotá Occidente Davivienda Itaú

14,3%

12,2% 12,6%

14,2% 12,8%

8,5% 8,9% 9,3% 9,7% 9,7% 9,5% 9,3% 9,4% 9,3%

Dic-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17

Tier I Tier I + Tier II

Non-Consolidated Regulatory Capital Evolution Dec-17 (%)

13,0% 12,1%

12,8% 12,8% 13,1% 12,8% 12,7% 12,7% 12,7%

| 21 |

Itaú Colombia | Risk Ratings

Source: Itaú CorpBanca Colombia, agencias calificadoras

Itaú CorpBanca Colombia has an Investment Grade rating of BBB-, and two local ratings in Colombia: one AAA and one AA+

Moody´s FITCH S&P

BBB- / Negative Apr./2017

BBB- / Stable Jan./2018

BBB / Stable Oct./2017

Baa2 / Stable May./2016

Colombia Sovereign

Itaú CorpBanca Colombia IDR (Issuer Default Rating)

Itaú CorpBanca Colombia National, Long-Term

AA+ / Negative Apr./2017

AAA / Stable Feb./2018

Itaú CorpBanca Colombia National, Short-Term

F1+ Apr./2017

BRC 1+ Feb./2018

| 22 |

Itaú Colombia | Key takeaways

Source: Itaú CorpBanca Colombia

We have a better Balance-Risk position compared to past years and a

stronger Liquidity-Risk position than the average for the Colombian Banks.

Our levels of Capital remain stable in spite of the losses reported.

We continue with the implementation of the Itaú model as planned.

We have followed the set schedules for brand change and technological

migration, and completed them in advance.

We diversified, reduced concentration, and increased the duration of our

funding.

We maintain our strength in Credit-Risk evaluation

Our results show a trend of recovery, building sustainable profitability in the

long term.

www.itau.co/grupo/relacion-con-inversionistas

Itaú CorpBanca Colombia Institutional Presentation

institutional presentation - itau.co. corporate... · bank #6 in colombia, with over 485 thousand...

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