Exhibit 99.1
Itaú CorpBanca
(This page was intentionally left blank)
|
Itaú CorpBanca
|
2
|
Itaú CorpBanca Announces
First Quarter 2016 Financial Report
Santiago, Chile, May 13, 2016. ITAÚ CORPBANCA (NYSE:ITCB; SSE: ITAUCORP) announced today its financial results for the first quarter ended March 31, 2016. Itaú CorpBanca is the entity resulting from the merger of Banco Itaú Chile (BIC) with and into CorpBanca on April 1, 2016. After the merger, the surviving entity's name changed to "Itaú CorpBanca". The legal acquisition of BIC by CorpBanca is deemed a reverse acquisition pursuant to standard No. 3 of the International Financial Reporting Standards (or IFRS). BIC (the legal acquiree) is considered the accounting acquirer and CorpBanca (the legal acquirer) is considered the accounting acquiree for accounting purposes. In this context, CorpBanca's 1Q 2016's results presented here will not be part of Itaú CorpBanca's historical financial results, because BIC is deemed to be the predecessor entity.
In light of the foregoing, this report is based on both CorpBanca's and BIC's unaudited financial statements prepared in accordance with the Compendium of Accounting Norms of the Superintendence of Banks and Financial Institutions (Superintendencia de Bancos e Instituciones Financieras, or the SBIF) pursuant to Chilean Generally Accepted Accounting Principles (Chilean GAAP) which conform with the international standards of accounting and financial reporting issued by the International Accounting Standards Board (IASB) to the extent that there are not specific instructions or regulations to the contrary by the SBIF. Based on this and for the purposes of analysis, we have prepared a pro forma for balance sheet but not for results since CorpBanca's 1Q 2016's results presented here will not be part of Itaú CorpBanca 2016's results but part of the equity of the merged bank.
Solely for the convenience of the reader, U.S. dollar amounts (US$) in this report have been translated from Chilean nominal peso (Ch$) at our internal exchange rate as of March 31, 2016 of Ch$667.08 per U.S. dollar. Industry data contained herein has been obtained from the information provided by the SBIF. Additionally "Year over Year" (YoY) states for the comparison between 1Q 2016 and 1Q 2015 and "Quarter over Quarter" (QoQ) states for the comparison between 1Q 2016 and 4Q 2015;
|
CorpBanca Financial Highlights
In 1Q 2016, Net Income attributable to shareholders totalled Ch$26.1 billion (-Ch$0.08 per share or US$0.17 per ADR), decreasing YoY and QoQ. Increase in provisions for loan losses due to downgrades of corporate clients in the energy sector both in Chile and Colombia and new regulatory requirements for standard credit-provisioning model on residential mortgage; a negative translation effect of the Colombian peso (COP) to Ch$ of our Colombian subsidiary and the negative impact of higher monetary policy interest rates both in Chile and Colombia are the main drivers for the first quarter losses.
Total loans1 reached Ch$14.6 trillion as of March 31, 2016, increasing 1.2% YoY and decreasing 1.6% QoQ. This trend is highly impacted by the negative translation effect COP/Ch$. When considered the portfolios of Chile and Colombia separately in each local currency, total loans in Chile increased 2.7% YoY and decreased 1.5% QoQ and total loans in Colombia decreased 1.5% YoY and 1.8% QoQ. Last quarters have shown a slower pace, though the strategy has been to focus only in segments with a higher risk-adjusted profitability.
Net operating profit before loan losses decreased by 29.6% YoY and by 35.0% QoQ. In 1Q 2016 we achieved an annualized net interest margin (NIM) of 3.19%, higher than the 3.09% in 1Q 2015 and lower than 3.74% in 4Q 2015. This decrease in NIM is mainly the result of the aforementioned devaluation of the COP and negative impacts of a higher monetary interest rate policy both in Chile and Colombia. This lower NIM along with a mild commercial activity of our Chilean distribution desk with a lower benefit from regular loan portfolios sales impacted our Net operating profit before loan losses.
Net provisions for loan losses increased by 163.2% YoY and 149.9% QoQ, mainly as the result of the downgrade of corporate clients in the energy sector, including gas&oil, both in Chile and Colombia.
Total operating expenses increased less than inflation YoY (4.1%) and decreased by 16.3% QoQ. This decrease is mainly due to the Ch$21.8 billion fine imposed by the SBIF in 4Q 2015 and also pre-merger expenses and special bonuses of the period.
|
BIC Financial Highlights
In 1Q 2016, Net Income attributable to shareholders totalled Ch$6.1 billion (Ch$2,863 per share), decreasing by 56.1% YoY and by 83.7%QoQ. Increase in provisions for loan losses due to new regulatory requirements for standard credit-provisioning model on residential mortgage loans and lower treasury gains.
Total loans2 reached Ch$6.9 trillion as of March 31, 2016, increasing 10.6% YoY and 0.7% QoQ.
Net operating profit before loan losses decreased by 3.9% YoY and by 23.9% QoQ. In 1Q 2016 we achieved an annualized net interest margin (NIM) of 2.89%, higher than the 2.71% in 1Q 2015 and than 2.81% in 4Q 2015. This increase in NIM is mainly the result of a higher variation in the quarter of the Unidad de Fomento (indexed unit of account, "UF").
Net provisions for loan losses increased by 40.2% YoY and 81.7% QoQ, mainly as a result of new regulatory requirements for standard credit-provisioning model on residential mortgage.
Total operating expenses increased by 8.3% YoY and by 7.5% QoQ. This increase is mainly due to the increase in bonuses and severances.
|
1 Excludes interbank and contingent loans.
2 Excludes interbank and contingent loans.
|
Itaú CorpBanca
|
3
|
 |
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
I) Consolidated Financial Performance Review
The following table sets forth the components of CorpBanca's and BIC's consolidated net income for the quarters ended March 31, 2016 and 2015 and December 31, 2015.
The negative shareholders' net income in CorpBanca is mainly explained by higher provisions for loan losses both in Chile and Colombia. The lower net operating profit before loan losses primarily due to negative impact in fiscal hedge due to the appreciation of the Ch$ against the US$ as well as lower fees on structured corporate loan due to economic slowdown is partly offset by lower income tax expense.
|
CorpBanca Quarterly Consolidated Income Statements (unaudited)
|
||||||
|
Quarter
|
Change (%)
|
|||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Net interest income
|
134,746
|
158,564
|
125,202
|
7.6%
|
-15.0%
|
|
|
Net fee and commission income
|
28,960
|
41,528
|
36,579
|
-20.8%
|
-30.3%
|
|
|
Net total financial transactions(1)
|
(4,764)
|
35,487
|
49,735
|
-
|
-
|
|
|
Other operating income, net
|
(3,948)
|
2,789
|
8,559
|
-
|
-
|
|
|
Net operating profit before loan losses
|
154,994
|
238,368
|
220,075
|
-29.6%
|
-35.0%
|
|
|
Provision for loan losses(2)
|
(102,575)
|
(41,044)
|
(38,970)
|
163.2%
|
149.9%
|
|
|
Net operating profit
|
52,419
|
197,324
|
181,105
|
-71.1%
|
-73.4%
|
|
|
Operating expenses
|
(117,244)
|
(139,999)
|
(112,580)
|
|
4.1%
|
-16.3%
|
|
Operating income
|
(64,825)
|
57,325
|
68,525
|
-
|
-
|
|
|
Income from investments in other companies
|
518
|
22
|
907
|
-42.9%
|
2254.5%
|
|
|
Income before taxes
|
(64,307)
|
57,347
|
69,432
|
-
|
-
|
|
|
Income tax expense
|
38,499
|
(10,289)
|
(22,239)
|
-
|
-
|
|
|
Net income
|
(25,808)
|
47,058
|
47,193
|
-
|
-
|
|
|
Minority interest
|
(259)
|
(4,111)
|
(7,504)
|
-96.5%
|
-93.7%
|
|
|
Net income attributable to shareholders
|
(26,067)
|
42,947
|
39,689
|
-
|
-
|
|
(1) Includes Net income from financial operations and Net foreign exchange profit (loss); (2) Includes provision for contingent loans.
The negative shareholders' net income in BIC is mainly explained by lower treasury gains and by the increase in provisions for loan losses due to new regulatory requirements for standard credit-provisioning model on residential mortgage loans.
|
BIC Quarterly Consolidated Income Statements (unaudited)
|
||||||
|
Quarter
|
Change (%)
|
|||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Net interest income
|
53,349
|
51,560
|
46,456
|
14.8%
|
3.5%
|
|
|
Net fee and commission income
|
15,067
|
18,098
|
19,098
|
-21.1%
|
-16.7%
|
|
|
Net total financial transactions(1)
|
2,702
|
23,401
|
7,771
|
-65.2%
|
-88.5%
|
|
|
Other operating income, net
|
(2,425)
|
(2,738)
|
(1,852)
|
30.9%
|
-11.4%
|
|
|
Net operating profit before loan losses
|
68,693
|
90,321
|
71,473
|
-3.9%
|
-23.9%
|
|
|
Provision for loan losses(2)
|
(14,644)
|
(8,059)
|
(10,443)
|
40.2%
|
81.7%
|
|
|
Net operating profit
|
54,049
|
82,262
|
61,030
|
-11.4%
|
-34.3%
|
|
|
Operating expenses
|
(46,950)
|
(43,681)
|
(43,368)
|
|
8.3%
|
7.5%
|
|
Operating income
|
7,099
|
38,581
|
17,662
|
-59.8%
|
-81.6%
|
|
|
Income from investments in other companies
|
-
|
32
|
12
|
-100.0%
|
-100.0%
|
|
|
Income before taxes
|
7,099
|
38,613
|
17,674
|
-59.8%
|
-81.6%
|
|
|
Income tax expense
|
(959)
|
(906)
|
(3,683)
|
-74.0%
|
5.8%
|
|
|
Net income
|
6,140
|
37,707
|
13,991
|
-56.1%
|
-83.7%
|
|
|
Minority interest
|
(2)
|
(2)
|
(2)
|
0.0%
|
0.0%
|
|
|
Net income attributable to shareholders
|
6,138
|
37,705
|
13,989
|
-56.1%
|
-83.7%
|
|
(1) Includes Net income from financial operations and Net foreign exchange profit (loss); (2) Includes provision for contingent loans.
II) Unconsolidated Financial Performance Review: Chile and Colombia
The following table presents CorpBanca's results in Chile and Colombia separately for 1Q 2016. The financial results of CorpBanca Chile include some expenses associated with our Colombian operations which have to be excluded from our Chile's book in order to observe Chile's stand-alone results. For these purposes, we have made two adjustments, namely: (i) amortization of the intangible assets generated in the Banco Santander Colombia's
|
Itaú CorpBanca
|
4
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
acquisition that affected operating expenses in Chile; and (ii) the impact of our fiscal hedge3, which is a consequence of a management's decision to hedge the impact of the volatility of the US$/Ch$ exchange rate in the net income attributable to shareholders, through its effect on taxable income related to the revaluation/devaluation of our taxable investment in Colombia.
The adjusted 1Q 2016 results present, in our opinion, the closest approximation of CorpBanca Chilean operation on a stand-alone basis:
|
|
1Q16 Financial Statements
|
1Q 2016 Chile
Adjusted Financial Statements
|
|||||||
|
|
Change (%)
1Q16/1Q15
|
Change (%)
|
|||||||
|
(Expressed in million of Chilean peso)
|
Consolidated
|
Chile
|
Colombia
|
Chile
|
Colombia
|
Adjustments
|
|
1Q16/
1Q15
|
1Q16/
4Q15
|
|
|
|
|
|
|
|
|
|||
|
Net interest income
|
134,746
|
76,643
|
58,103
|
-15.3%
|
-14.7%
|
-
|
76,642
|
12.3%
|
-19.4%
|
|
Net fee and commission income
|
28,960
|
16,335
|
12,625
|
-44.8%
|
5.6%
|
-
|
16,335
|
-28.6%
|
-44.8%
|
|
Total financial transactions, net(1)
|
(4,764)
|
(20,859)
|
16,095
|
-
|
-45.0%
|
21,615
|
756
|
-95.2%
|
-77.1%
|
|
Other operating income, net
|
(3,948)
|
(3,570)
|
(378)
|
-
|
-41.9%
|
1
|
(3,569)
|
96.5%
|
-
|
|
Net operating profit before loan losses
|
154,994
|
68,549
|
86,445
|
-47.1%
|
-20.5%
|
21,615
|
90,164
|
-14.2%
|
-31.4%
|
|
Provision for loan losses(2)
|
(102,575)
|
(62,511)
|
(40,064)
|
1739.1%
|
6.4%
|
-
|
(62,511)
|
440.8%
|
1739.1%
|
|
Net operating profit
|
52,419
|
6,038
|
46,381
|
-95.2%
|
-34.7%
|
21,615
|
27,653
|
-70.4%
|
-78.4%
|
|
Operating expenses(3)
|
(117,244)
|
(71,972)
|
(45,272)
|
-18.1%
|
-13.1%
|
2,609
|
(69,363)
|
22.3%
|
-18.6%
|
|
Operating income
|
(64,825)
|
(65,934)
|
1,109
|
-
|
-94.2%
|
24,224
|
(41,710)
|
-
|
-
|
|
Income from investments in other companies
|
518
|
2
|
516
|
-90.9%
|
-
|
-
|
2
|
100.0%
|
-90.9%
|
|
Income before taxes
|
(64,307)
|
(65,932)
|
1,625
|
-
|
-91.4%
|
24,224
|
(41,708)
|
-
|
-
|
|
Income tax expense
|
38,499
|
39,030
|
(531)
|
-
|
-91.6%
|
(19,129)
|
19,901
|
-
|
-
|
|
Net income
|
(25,808)
|
(26,902)
|
1,094
|
-
|
-91.3%
|
5,095
|
(21,807)
|
-
|
-
|
|
Net income attributable to shareholders
|
(26,067)
|
(26,767)
|
700
|
-
|
-91.6%
|
5,095
|
(21,672)
|
-
|
-
|
|
|
|
|
|
||||||
|
Efficiency Ratio
|
75.6%
|
105.0%
|
52.4%
|
|
|
|
73.2%
|
|
|
(1) Includes Net income from financial operations and Net foreign exchange profit (loss); (2) Includes Provision for contingent loans.
These adjustments to the Chilean operation to present it on a stand-alone basis are related to:
|
i.
|
Ch$21.6 billion of fiscal hedge in US$.
|
|
ii.
|
Ch$2.6 billion of intangible assets amortization and integration costs in Colombia.
|
Taking into account these factors, our estimated result for our stand-alone operation in Chile is -Ch$21.7 billion of Net Income in 1Q 2016.
Consolidated Net Interest Income
In 1Q 2016 CorpBanca net interest income totalled Ch$134.7 billion, increasing 7.6% YoY and decreasing 15.0% QoQ.
The YoY increase was mainly the result of a higher quarterly UF variation in Chile (+0.71% in 1Q 2016 vs. -0.02% in 1Q 2015).
The QoQ decrease was due to a negative translation effect COP/Ch$4 of our Colombian subsidiary (Ch$0.2222 per 1COP in 1Q 2016 vs. Ch$0.2266 per 1COP in 4Q 2015) as well as a lower UF variation (+0.71% in 1Q 2016 vs. +1.45% in 4Q 2015). When considered the net interest income of CorpBanca Colombia in its local currency under Chilean GAAP, it increased 12.9% YoY.
The aforementioned factors negatively impacted our net interest margin (net interest income divided by average interest- earning assets), that decreased to 3.19% in 1Q 2016 from 3.74% in 4Q 2015.
The gap between assets and liabilities indexed to the UF was approximately Ch$980.8 billion in 1Q 2016, resulting in an impact of Ch$9.8 billion for each 100 bp of variation of the UF. This quarterly impact has maintained stable between Ch$7.0 billion and Ch$9.0 billion in the last 12-month (LTM).
3 For tax purposes, the "Servicio de Impuestos Internos" (Chilean IRSInternal Revenue Service (Servicio de Impuestos Internos) considers that our investment in Colombia is denominated in US dollar. As we have to translate the valuation of this investment from US dollar to Chilean peso in our book each month, the volatility of the exchange rate generates a significant impact on the net income attributable to shareholders. In order to limit that effect, the management decided to hedge it with a derivative that has to be analyzed along with income tax expenses.
4 Consolidated financial statements for CorpBanca use the Chilean peso as functional currency. CorpBanca Colombia financial statements are translated from Colombian peso to Chilean peso for consolidation purposes, being only the exchange rate variation in its income statement accounts reflected in Year to Date (YTD) results. CorpBanca has decided not to hedge this translation risk effect in profit and loss statement (P&L) as long as net income from Colombian operations is retained as primarily source of capitalization. Since we have decided to retain earnings to support future grow in Colombia, an FX hedge for financial statement balances is not efficient as it would be if there were a cash flow coming from our Colombian subsidiary. CorpBanca's management revaluates this strategy on an annual basis.
|
Itaú CorpBanca
|
5
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
Consolidated Fee and Commission from Services
|
CorpBanca Fee and Commission from Services
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Banking services(*)
|
24,125
|
29,049
|
25,023
|
-3.6%
|
-17.0%
|
|
|
Securities brokerage services
|
93
|
153
|
177
|
-47.2%
|
-39.2%
|
|
|
Mutual fund management
|
1,625
|
1,982
|
1,854
|
-12.4%
|
-18.0%
|
|
|
Insurance brokerage
|
2,614
|
2,979
|
2,433
|
7.4%
|
-12.2%
|
|
|
Financial advisory services
|
39
|
6,737
|
6,610
|
-99.4%
|
-99.4%
|
|
|
Legal advisory services
|
465
|
628
|
482
|
-3.5%
|
-26.0%
|
|
|
Net fee and commission income
|
28,960
|
41,528
|
36,579
|
-20.8%
|
-30.3%
|
|
(*) Includes consolidation adjustments.
|
BIC Fee and Commission from Services
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Banking services(*)
|
9,634
|
12,346
|
13,742
|
-29.9%
|
-22.0%
|
|
|
Securities brokerage services
|
630
|
630
|
567
|
11.1%
|
-0.1%
|
|
|
Mutual fund management
|
2,423
|
2,647
|
2,666
|
-9.1%
|
-8.5%
|
|
|
Insurance brokerage
|
2,381
|
2,475
|
2,123
|
12.2%
|
-3.8%
|
|
|
Financial advisory services
|
-
|
-
|
||||
|
Legal advisory services
|
-
|
-
|
||||
|
Net fee and commission income
|
15,067
|
18,098
|
19,098
|
-21.1%
|
-16.7%
|
|
(*) Includes consolidation adjustments.
In 1Q 2016 CorpBanca and BIC net fee and commission income decreased by 20.8% YoY and 30.3% QoQ the former and by 21.1% YoY and 16.7% the latter.
These trends are explained by lower fees on high complexity structuring project finance and to loans syndication structured in CorpBanca and lower investment banking and corporate credit structuring fees both due to economic slowdown.
Consolidated Net Total Financial Transactions
|
CorpBanca Consolidated Net Total Financial Transactions
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Trading and investment income:
|
||||||
|
Trading investments*
|
13,723
|
11,355
|
7,203
|
90.5%
|
20.9%
|
|
|
Trading financial derivatives contracts
|
(59,333)
|
83,354
|
46,103
|
-
|
-
|
|
|
Other
|
169
|
870
|
14,222
|
-98.8%
|
-80.6%
|
|
|
Net income from financial operations
|
(45,441)
|
95,579
|
67,528
|
-
|
-
|
|
|
Foreign exchange profit (loss), net
|
40,677
|
(60,092)
|
(17,793)
|
-
|
-
|
|
|
Net total financial transactions result
|
(4,764)
|
35,487
|
49,735
|
-
|
-
|
|
* Market risk exposure related to proprietary trading investment is strongly limited.
|
BIC Consolidated Net Total Financial Transactions
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Trading and investment income:
|
||||||
|
Trading investments*
|
264
|
838
|
101
|
161.4%
|
-68.5%
|
|
|
Trading financial derivatives contracts
|
6,818
|
(1,607)
|
(12,625)
|
-
|
-
|
|
|
Other
|
379
|
14,577
|
1,185
|
-68.0%
|
-97.4%
|
|
|
Net income from financial operations
|
7,461
|
13,808
|
(11,339)
|
-
|
-46.0%
|
|
|
Foreign exchange profit (loss), net
|
(4,759)
|
9,593
|
19,110
|
-
|
-
|
|
|
Net total financial transactions result
|
2,702
|
23,401
|
7,771
|
-65.2%
|
-88.5%
|
|
* Market risk exposure related to proprietary trading investment is strongly limited.
|
Itaú CorpBanca
|
6
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
In 1Q 2016 net total financial transactions result in CorpBanca was Ch$4.8 billion, decreasing YoY and QoQ impacted by the appreciation of Ch$ in the fiscal hedge which is offset by lower income tax expense. In BIC, net total financial transactions result was Ch$2.7 billion in 1Q 2016, decreasing by 65.2% YoY and by 88.5% QoQ impacted by lower treasury gains.
Consolidated Provisions for Loan Losses (for Commercial and Retail Loans) (1)
|
CorpBanca Consolidated Provisions for Loan Losses
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Commercial, net of loan loss recoveries
|
(66,876)
|
(28,389)
|
(25,788)
|
159.3%
|
135.6%
|
|
|
Residential mortgage, net of loan loss recoveries
|
(6,204)
|
(561)
|
3,904
|
-
|
1005.9%
|
|
|
Consumer, net of loan loss recoveries
|
(15,059)
|
(12,431)
|
(16,644)
|
-9.5%
|
21.1%
|
|
|
Others
|
112
|
67
|
(99)
|
-
|
67.2%
|
|
|
Net provisions for loan losses
|
(88,027)
|
(41,314)
|
(38,627)
|
127.9%
|
113.1%
|
|
(1) Excludes provisions for Contingent loans.
|
BIC Consolidated Provisions for Loan Losses
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Commercial, net of loan loss recoveries
|
(66,876)
|
(28,389)
|
(25,788)
|
159.3%
|
135.6%
|
|
|
Residential mortgage, net of loan loss recoveries
|
(6,204)
|
(561)
|
3,904
|
-
|
1005.9%
|
|
|
Consumer, net of loan loss recoveries
|
(15,059)
|
(12,431)
|
(16,644)
|
-9.5%
|
21.1%
|
|
|
Others
|
112
|
67
|
(99)
|
-
|
67.2%
|
|
|
Net provisions for loan losses
|
(88,027)
|
(41,314)
|
(38,627)
|
127.9%
|
113.1%
|
|
(1) Excludes provisions for Contingent loans.
Net provisions for loan losses in CorpBanca increased 127.9% YoY and 113.1% QoQ. The decrease was mainly due to downgrades of corporate clients in the energy sector both in Chile and Colombia and new regulatory requirements for standard credit-provisioning model on residential mortgage loans in Chile.
Net provisions for loan losses in BIC increased 27.2% YoY and 33.6% QoQ mainly driven by new regulatory requirements for standard credit-provisioning model on residential mortgage loans.
Under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors", 4Q 2015 provisions for loan losses in CorpBanca and BIC did not include provisions related to the new SBIF's standard credit-provisioning model for residential mortgage loans that is effective in Chile since January 2016. Accordingly to a "change in accounting estimate" under IFRS the impacts have to be recognized prospectively and directly in the P&L of the period in which they apply. Therefore, the new regulation impacted as a one-timer expense in January 2016 for approximately Ch$4.9 billion in CorpBanca that management estimates will be reduced to half by the end of 2016 and in BIC, Ch$3.2 billion.
The chart below illustrates CorpBanca consolidated total loan loss allowances / total loans ratio and BIC total loan loss allowances / total loans ratio compare to the industry average in Chile.
It is important to note that the regulatory criterion that we have to follow for the Colombian loan portfolio for consolidation purposes only is to apply the most conservative provisioning rule between Chile and Colombia. This results in higher reserves in Chile for the Colombian portfolio, which are even higher than the expected incurred loss for our Colombian portfolio. Quarterly impacts of this regulatory criterion are enhanced when changes in provisions for loan losses under Colombian regulation are more conservative than under Chilean regulation.
According to the SBIF CorpBanca has maintained, in its Chilean operations, one of the lowest credit risk indices (total loan loss allowances / total loans) in the Chilean banking industry over the past five years, consistent with one of CorpBanca core pillars related to high quality loan portfolio.
The following chart compares CorpBanca and BIC consolidated non-performing loan (NPL) ratio with the industry's average in Chile. CorpBanca´s high asset quality was maintained following the acquisition of Banco Santander Colombia in May 2012 and Helm Bank in August 2013.
|
Itaú CorpBanca
|
7
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
| * | According to SBIF criteria for NPLs statistics, prior to October 2015, statistics for NPLs were presented on an unconsolidated basis, though they did not include local nor foreign subsidiaries' NPLs. Nevertheless, CorpBanca did include in its reports NPLs for CorpBanca Colombia using the same criteria, i.e., on an unconsolidated basis (only the banks in Chile and Colombia). These SBIF criteria changed in October 2015, though since 4Q 2015 statistics for NPLs are presented on a consolidated basis. In this context, also since 4Q 2015, CorpBanca's NPLs not only include CorpBanca Colombia's NPLs but also our New York Branch, Helm Bank Panamá and other local subsidiaries' NPLs when applicable. Therefore, 4Q 2015 NPLs and NPL ratios for CorpBanca and the Chilean Banking Industry are not fully comparable to prior quarter. |
For a country breakdown, see "Section VIII.1", page 2.
Consolidated Operating Expenses
|
CorpBanca Consolidated Operating Expenses
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Personnel salaries and expenses
|
50,146
|
50,603
|
50,202
|
-0.1%
|
-0.9%
|
|
|
Administrative expenses
|
56,962
|
78,610
|
51,561
|
10.5%
|
-27.5%
|
|
|
Depreciation and amortization
|
10,119
|
10,672
|
10,806
|
-6.4%
|
-5.2%
|
|
|
Impairment
|
17
|
114
|
11
|
54.5%
|
-85.1%
|
|
|
Operating expenses
|
117,244
|
139,999
|
112,580
|
4.1%
|
-16.3%
|
|
|
BIC Consolidated Operating Expenses
|
Quarter
|
Change (%)
|
||||
|
(Expressed in million of Chilean peso)
|
1Q16
|
4Q15
|
1Q15
|
1Q16/1Q15
|
1Q16/4Q15
|
|
|
Personnel salaries and expenses
|
22,168
|
25,447
|
18,754
|
18.2%
|
-12.9%
|
|
|
Administrative expenses
|
21,939
|
15,657
|
22,251
|
-1.4%
|
40.1%
|
|
|
Depreciation and amortization
|
2,843
|
2,577
|
2,363
|
20.3%
|
10.3%
|
|
|
Impairment
|
-
|
-
|
-
|
-
|
-
|
|
|
Operating expenses
|
46,950
|
43,681
|
43,368
|
8.3%
|
7.5%
|
|
CorpBanca's operating expenses increased by 4.1%YoY, lower than inflation, and decreased by 16.3% QoQ. This QoQ decrease is mainly due to the Ch$21.8 billion fine imposed by the SBIF which, as instructed by the SBIF, had to be fully recognized as an administrative expense in 4Q 2015.
Regarding BIC, operating expenses increased by 8.3%YoY and by 7.5% QoQ due to the increase in bonuses and severances related to the merger process.
Consolidated Tax Expenses
On a YoY basis, tax expenses' increase is explained by higher tax rates and a higher Ch$ depreciation that results in a higher tax expense over our investment in Colombia which despite of been made in COP, for tax purposes is considered to be in US dollars (as detailed in footnote 3 on page 5) this impact is offset by the losses on the fiscal hedge as previously mentioned on page 6, which at the same time lead to lower tax expenses.
On a YoY basis, tax expenses' increase is explained by higher tax rates partly offset by a higher CLP appreciation that results in a lower tax expense over our investment in Colombia which despite of been made in COP, for tax purposes is considered to be in US dollars (as detailed in footnote 2 on page 4) this impact is offset by the losses on the fiscal hedge as previously mentioned on page 7.
BIC income tax expenses decreased 74.0% YoY QoQ and increased 5.8% QoQ.
|
Itaú CorpBanca
|
8
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
III) Consolidated Assets and Liabilities
Pro forma Consolidated Loan portfolio (1) (2)
|
As of
|
Change (%)
|
|||||
|
(Expressed in million of Chilean peso)
|
31-Mar-16
|
31-Dic-15
|
31-Mar-15
|
Mar-16/Mar-15
|
Mar-16/Dic-15
|
|
|
Wholesale lending
|
15,233,881
|
15,390,109
|
14,580,108
|
4.5%
|
-1.0%
|
|
|
Chile
|
11,719,249
|
11,827,427
|
11,003,738
|
6.5%
|
-0.9%
|
|
|
Commercial loans
|
10,122,784
|
10,150,654
|
9,304,118
|
8.8%
|
-0.3%
|
|
|
Foreign trade loans
|
902,268
|
950,659
|
986,979
|
-8.6%
|
-5.1%
|
|
|
Leasing and factoring
|
694,197
|
726,114
|
712,641
|
-2.6%
|
-4.4%
|
|
|
Colombia
|
3,514,632
|
3,562,682
|
3,576,370
|
-1.7%
|
-1.3%
|
|
|
Commercial loans
|
2,968,228
|
3,032,607
|
3,072,854
|
-3.4%
|
-2.1%
|
|
|
Foreign trade loans
|
-
|
-
|
-
|
-
|
-
|
|
|
Leasing and factoring
|
546,404
|
530,075
|
503,516
|
8.5%
|
3.1%
|
|
|
Retail lending
|
6,205,160
|
6,244,004
|
6,030,917
|
2.9%
|
-0.6%
|
|
|
Chile
|
4,603,302
|
4,598,472
|
4,410,618
|
4.4%
|
0.1%
|
|
|
Consumer loans
|
1,313,828
|
1,322,532
|
1,263,363
|
4.0%
|
-0.7%
|
|
|
Residential mortgage loans
|
3,289,474
|
3,275,940
|
3,147,255
|
4.5%
|
0.4%
|
|
|
Colombia
|
1,601,858
|
1,645,532
|
1,620,299
|
-1.1%
|
-2.7%
|
|
|
Consumer loans
|
1,108,113
|
1,143,678
|
1,129,775
|
-1.9%
|
-3.1%
|
|
|
Residential mortgage loans
|
493,745
|
501,854
|
490,524
|
0.7%
|
-1.6%
|
|
|
TOTAL LOANS
|
21,439,041
|
21,634,113
|
20,611,025
|
4.0%
|
-0.9%
|
|
|
Chile
|
16,322,551
|
16,425,899
|
15,414,356
|
5.9%
|
-0.6%
|
|
|
Colombia
|
5,116,490
|
5,208,214
|
5,196,669
|
-1.5%
|
-1.8%
|
|
|
(1)
|
Pro forma considers CorpBanca and BIC excluding merger effects.
|
|
(2)
|
Contingent loans under IFRS are not considered part of the loan portfolio.
|
Our total pro forma loan portfolio increased by 4.0% YoY and decreased by 0.9%QoQ. These trends are highly impacted by the negative translation effect COP/Ch$ for consolidation purposes. When considered separately our Chilean and Colombian loan portfolios in their relevant currencies, total loans in Chile increased 5.9% YoY and decreased 0.7% QoQ and total loans in Colombia increased by 7.6% YoY and 1.2% QoQ. Last quarters have shown a slower pace, though the strategy has been to focus only in segments with a higher risk-adjusted profitability.
When analyzing the loan portfolio by segments, retail lending in Chile increased by 4.4% YoY and by 0.1% QoQ, reflecting the impact of a significant lower pace in residential mortgage loans, where the bank continue to focus on loans with loan-to-values (LTV) below 80% at origination. In Colombia, retail loans increased 8.1% YoY and 0.3% QoQ when measured in COP. Wholesale lending in Chile increased 6.5% YoY and decreased 0.9% QoQ and in Colombia increased 7.4% YoY and increased 1.6% QoQ in its local currency reflecting the current economic environment. These trends show that our loan portfolio grew in all segments in Colombia in 2016, however, at a slower pace when compared to 2015.
According to the SBIF, our pro forma market share in Chile, on an unconsolidated basis, was 12.1% in March 31, 2016, reflecting a decrease of 54 bp compared to March 31, 2015. In Colombia, the current economic environment has impacted our market share more than the ongoing integration process related to the Helm Bank merger, reaching 6.1% as of December 30, 2015, according to the Colombian Financial Superintendence (Superintenencia Financiera de Colombia or SFC).
Pro forma(1) Consolidated Securities Portfolio
|
As of
|
Change (%)
|
|||||
|
(Expressed in million of Chilean peso)
|
31-Mar-16
|
31-Dic-15
|
31-Mar-15
|
Mar-16/Mar-15
|
Mar-16/Dic-15
|
|
|
Trading investments
|
569,031
|
341,664
|
546,636
|
4.1%
|
66.5%
|
|
|
Available-for-sale investments
|
2,142,850
|
2,437,298
|
1,746,526
|
22.7%
|
-12.1%
|
|
|
Held-to-maturity investments
|
166,395
|
170,191
|
203,357
|
-18.2%
|
-2.2%
|
|
|
Total Financial Investments
|
2,878,276
|
2,949,153
|
2,496,519
|
15.3%
|
-2.4%
|
|
|
(1)
|
Pro forma considers CorpBanca and BIC excluding merger effects.
|
Our total financial investments portfolio increased 15.3% YoY and decreased 2.4% QoQ. Our investment portfolio consists of trading, available-for-sale and held-to-maturity securities. Trading instruments correspond to fixed income securities acquired to generate gains from short-term price fluctuations or brokerage margins. Trading instruments are stated at fair value.
|
Itaú CorpBanca
|
9
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
Investment instruments are classified in two categories: held-to-maturity investments and instruments available-for-sale. On a consolidated basis, we currently have a small portfolio of held-to-maturity investments, allocated in Colombia. All other financial investment securities are classified available-for-sale. Investment securities are initially recognized at cost, which includes transaction costs. Securities available-for-sale at each subsequent period-end are valued at their fair value according to market prices or based on valuation models. Unrealized gains or losses arising from changes in the fair value are charged or credited to equity accounts.
In addition to regulatory liquidity risk controls, we have also set internal liquidity limits, in order to safeguard the bank's payment capacity in the event of illiquid conditions. We have also established a minimum for our securities portfolio that enables cash flows to be quickly generated either through liquidation or because they can be used as collateral for new funding sources. As part of our policy, we have developed two internal liquidity models:
|
1.
|
Minimum Liquidity Requirement: In order to ensure that the bank will permanently hold enough liquid assets to meet all payments derived from obligations to third parties over the next three days, we set a limit on the minimum amount of liquid assets to be held on a daily basis.
|
|
2.
|
Liquidity Coverage Ratio (LCR): We seek to ensure that, even under adverse conditions, we have access to the funds necessary to cover customers' needs and maturing liabilities. The purpose of the LCR model is to evaluate our funding capacity assuming a hypothetical scenario of illiquidity. The LCR is based on a stress scenario which assumes that an unusually large proportion of liabilities would be withdrawn over the next 20 days according with a stressed volatility and liquid assets will have to cover excess requirements.
|
Pro forma(1) Consolidated Funding
|
As of
|
Change (%)
|
Breakdown (%)
|
||||||||
|
(Expressed in million of Chilean peso)
|
31-Mar-16
|
31-Dic-15
|
31-Mar-15
|
Mar-16/Mar-15
|
Mar-16/Dic-15
|
|
31-Mar-16
|
31-Dic-15
|
31-Mar-15
|
|
|
Demand deposits
|
|
|
|
|
||||||
|
Time deposits and saving accounts
|
5,244,363
|
5,412,968
|
4,758,548
|
10.2%
|
-3.1%
|
|
20.7%
|
21.5%
|
20.4%
|
|
|
Investments sold under repurchase agreements
|
12,094,627
|
12,448,176
|
12,124,029
|
-0.2%
|
-2.8%
|
|
47.8%
|
49.6%
|
51.9%
|
|
|
Mortgage finance bonds
|
776,629
|
304,358
|
480,950
|
61.5%
|
155.2%
|
|
3.1%
|
1.2%
|
2.1%
|
|
|
Bonds
|
98,323
|
105,022
|
123,771
|
-20.6%
|
-6.4%
|
|
0.4%
|
0.4%
|
0.5%
|
|
|
Subordinated bonds
|
3,595,753
|
3,598,491
|
2,954,530
|
21.7%
|
-0.1%
|
|
14.2%
|
14.3%
|
12.6%
|
|
|
Interbank borrowings
|
1,008,491
|
1,028,376
|
984,098
|
2.5%
|
-1.9%
|
|
4.0%
|
4.1%
|
4.2%
|
|
|
Foreign borrowings
|
30,354
|
35,744
|
32,041
|
-5.3%
|
-15.1%
|
|
0.1%
|
0.1%
|
0.1%
|
|
|
(1)
|
Pro forma considers CorpBanca and BIC excluding merger effects.
|
Our funding strategy is to optimize all sources of funding in accordance with their costs, their availability and our general asset and liability management strategy. The funding structure in the period of time analyzed in this report remained stable; the limited changes are mostly related to debt maturity profile and debt placements.
During the last twelve months CorpBanca successfully placed senior notes in the local market. Between July and September 2015, issued Ch$3.5 billion and UF 1.64 billion senior notes in local market, to refinance part of debt maturity profile and fund loan growth. Additionally, on September 2015, CorpBanca prepaid a syndicated loan facility for US$490 million due on October 2015 and obtained a new facility for US$315 million due in April 2017 in line with our strategy to diversify funding sources, strengthen liquidity and financed commercial activities.
Additionally, it is important to note that Itaú CorpBanca successfully placed a senior bond in the local market in April 2016 being its first issuance after the merger in the following terms:
|
|
|
|
Ranking
|
Senior unsecured
|
|
Issue rating
|
AA (Feller Rate / Humphreys)
|
|
Size
|
Ch$40 billion
|
|
Coupon
|
5.00%
|
|
Issue price
|
99%
|
|
Yield
|
5.28%
|
|
Benchmark (BCP5)
|
4.10% due 2021
|
|
Spread vs. Benchmark
|
118 bps
|
|
Maturity
|
September 2021
|
|
Itaú CorpBanca
|
10
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
Pro forma(1) Consolidated Shareholders' Equity and Regulatory Capital
|
Quarter ended
|
Change (%)
|
|||||
|
(Expressed in million of Chilean peso)
|
31-Mar-16(2)
|
31-Dic-15
|
31-Mar-15
|
Mar-16/Mar-15
|
Mar-16/Dic-15
|
|
|
Equity
|
||||||
|
Capital
|
2,708,056
|
1,126,128
|
1,126,128
|
34.9%
|
34.9%
|
|
|
Reserves
|
448,878
|
912,328
|
895,929
|
7.7%
|
5.7%
|
|
|
Valuation adjustment
|
80
|
(215,284)
|
(147,298)
|
49.9%
|
2.6%
|
|
|
Retained Earnings
|
3,069
|
|
|
|||
|
Retained earnings or prior periods
|
-
|
282,707
|
-65.4%
|
-
|
||
|
Income for the period
|
306,107
|
53,678
|
-
|
-
|
||
|
Minus: Provision for mandatory dividend
|
(153,054)
|
(62,692)
|
-95.1%
|
-98.0%
|
||
|
Attributable to Bank shareholders
|
3,160,083
|
1,976,225
|
2,148,452
|
8.8%
|
18.3%
|
|
|
Non-controlling interest
|
283,613
|
313,916
|
315,652
|
-2.4%
|
-1.9%
|
|
|
Total Equity
|
3,443,696
|
2,290,141
|
2,464,104
|
7.4%
|
15.5%
|
|
|
Quarterly RoAE (3)
|
15.1%
|
8.9%
|
|
|
||
|
YTD RoAE(3)
|
13.7%
|
8.9%
|
|
|
||
|
(1)
|
Except otherwise stated, pro forma considers CorpBanca and BIC excluding merger effects.
|
|
(2)
|
March 2016 's results consider merger effects and include:
|
|
a.
|
CorpBanca Tier I capital1 as of March 31, 2016.
|
|
b.
|
BIC Tier I capital 1as of March 31, 2016, including US$553MN of capital increase on March 22, 2016 (679.70 Ch$ / US$).
|
|
c.
|
Corresponding adjustments from merger effects of the business combination based on pro forma balance sheet.
|
|
(3)
|
Annualized figures.
|
As of March 31, 2016, according to the SBIF, on a pro forma basis, Itaú CorpBanca was the third largest bank in Chile, based on equity (Ch$3,443.7 billion, or US$4.7 billion, as of March 31, 2016). After the merger, we have 512,406,760.1 thousand shares outstanding and a market capitalization of Ch$3,147.2 billion, or US$4.7 billion, (based on a share price of Ch$6.142 peso per share) as of the day of the merger on April 1, 2016.
Pro forma(1) Consolidated Capital Adequacy
|
Quarter ended
|
Change (%)
|
|||||
|
(Expressed in million of Chilean peso)
|
Mar-16(3)
|
Dic-15(2)
|
Mar-15
|
Mar-16/Mar-15
|
Mar-16/Dic-15
|
|
|
TIER I Capital (Core Capital)
|
3,160,084
|
1,976,226
|
2,148,452
|
8.8%
|
18.3%
|
|
|
TIER II Capital
|
96,290
|
561,512
|
699,596
|
-22.4%
|
-3.3%
|
|
|
Regulatory Capital
|
3,256,374
|
2,537,737
|
2,848,048
|
1.1%
|
13.5%
|
|
|
Risk Weighted Assets
|
25,033,383
|
24,787,411
|
24,157,895
|
3.4%
|
0.8%
|
|
|
TIER I (Core Capital) Ratio(4)
|
12.6%
|
8,0%
|
8,9%
|
|
|
|
|
BIS Ratio(5)
|
13.0%
|
10,2%
|
11,8%
|
|
|
|
|
(1)
|
Except otherwise stated, pro forma considers CorpBanca and BIC excluding merger effects.
|
|
(2)
|
CorpBanca paid its annual 2015 dividend of Ch$0.3321397925/share in Chile on March 13, 2015 (equivalent to a payout ratio of 50%) and additionally paid a special dividend of Ch$0.704728148/share on July 1, 2015. For purposes of capital requirements, annual dividends are provisioned at the current dividend policy rate set by the shareholders meeting in 2011 (50%).
|
|
(3)
|
March 2016 do consider merger effects and 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.
|
|
(4)
|
Tier I Capital = Basic Capital, according to SBIF BIS I definitions.
|
|
(5)
|
BIS ratio = Patrimonio efectivo / RWA , according to SBIF BIS I definitions
|
On January 29, 2014 Itaú Unibanco Holding S.A. ("Itaú Unibanco"), Banco Itaú Chile, CorpBanca, Inversiones Corp Group Interhold Limitada ("CGI") and Inversiones Gasa Limitada (together with CGI, "CorpGroup") entered into an agreement, regarding the following matters:
|
i.
|
The merger of Banco Itaú Chile with and into CorpBanca, with CorpBanca as the surviving legal entity, renamed "Itaú-CorpBanca";
|
|
i.
|
the control of Itaú-CorpBanca by Itaú Unibanco;
|
|
ii.
|
a Shareholders' Agreement, to be signed by Itaú Unibanco and CorpGroup; and
|
|
iii.
|
the control of CorpBanca's and Itaú Unibanco's Colombian entities, by Itaú CorpBanca, among other matters.
|
In the extraordinary shareholders' meetings held on June 26 and 30, 2015, respectively, the shareholders' of both, CorpBanca and Banco Itaú approved the proposed merger.
Once the merger was consummated, the combined capital ratios improved significantly boosted by pre merger TIER I capital of Banco Itaú Chile including a capital injection of US$553 million in March 2, 2016. Furthermore, the shareholders' agreement between CorpGroup and Itaú Unibanco
|
Itaú CorpBanca
|
11
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
contemplates a strict policy regarding minimum capital levels of the merged bank, requiring the maximum between 1.2x above the regulatory minimum and the average of the three largest banks. Under the Chilean General Banking Act, current definitions of capital requirements and risk-weighted assets (RWA), the pro forma BIS Ratio achieved a 13% as of March 31, 2016 along with a TIER one Ratio in 12.6%.
The Chilean Ministry of Finance, the Central Bank of Chile and the SBIF have announced a new bill amending current laws in order to align Chilean regulation for capital requirements to Basel II/III standards and it is expected a 6-year period for gradual implementation.
BIS Ratio & TIER I capital
* 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$553MN of capital increase on March 22, 2016 (679.70 CLP / USD).
|
|
c)
|
Corresponding adjustments from merger effects of the business combination based on pro forma balance sheet.
|
1- Tier I Capital = Basic Capital, according to SBIF BIS I definitions.
2 - BIS ratio = Patrimonio efectivo / RWA, according to SBIF BIS I definitions
Note: Figures converted to US dollars at a rate of 694.77 CLP/USD (as of February 29, 2016) and 667.08 CLP/USD (as of March 31, 2016), respectively.
IV) Ownership Structure and Share Performance
Ownership structure
After the merger was completed on April 1st, 2016, Itaú CorpBanca is being controlled by Itaú Unibanco S.A. As of April 30, 2016 shareholders structure was as follows:
1- Includes 802,125,023 shares owned by Saga that are under custody
|
Itaú CorpBanca
|
12
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
ADR Price Evolution and Local Share Price Evolution
Average daily traded volumes 12 months ended March 31, 2016
(US$ million)
(US$ million)
|
ADR Price
|
|
|
As of 3/31/2016
|
US$13.75
|
|
Maximum (LTM)
|
US$18.78
|
|
Minimum (LTM)
|
US$10.87
|
|
Local Share Price
|
|
|
3/31/2016
|
Ch$6.126
|
|
Maximum (LTM)
|
Ch$7.903
|
|
Minimum (LTM)
|
Ch$5.197
|
|
Itaú CorpBanca
|
13
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
|
Market capitalization
|
US$2.1 billion
|
|
P/E (LTM)
|
15.33
|
|
P/BV
|
1.43
|
|
Dividend yield*
|
5.3%
|
* Based on closing price on the day the dividend payment was announced.
Dividends
The following table shows dividends per share distributed during the past five years:
|
Charge to
Fiscal Year
|
Year paid
|
Net Income (Ch$mn)
|
% Distributed
|
Distributed Income (Ch$mn)
|
Peso per Share
(Ch$ of each year)
|
|
2011
|
2012
|
122,849
|
100%
|
122,849
|
0.4906940357
|
|
2012
|
2013
|
120,080
|
50%
|
60,040
|
0.1764023878
|
|
2013
|
2014
|
155,093
|
57%
|
88,403
|
0.2597360038
|
|
2014
|
2015
|
226,093
|
50%
|
113,047
|
0.3321397925
|
|
Retained Earnings
|
2015
|
239,860
|
100%
|
239,860
|
0.7047281480
|
|
2015
|
2016
|
201,771
|
50%
|
100,886
|
0.2964098300
|
|
2015
|
2016
|
201,771
|
UF 124,105
|
3,197
|
0.0093918800
|
Itaú CorpBanca (former CorpBanca) paid its annual dividend of Ch$0.3321397925/share in Chile on March, 13, 2015, equivalent to a payout ratio of 50% and to a dividend yield of 4.4%, as well as an increase of 27.9% compared to the dividend paid in 2014. Additionally, Itaú CorpBanca (former
|
Itaú CorpBanca
|
14
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
CorpBanca) paid a special dividend of Ch$0.704728148/share on July 1, 2015. Pending UF 124,105 of the special dividend distribution were paid on March 2016.
For purposes of capital requirements, annual dividends are provisioned at the current dividend policy rate set by the shareholders meeting in 2011 (50%).
V) Credit Risk Ratings
International credit risk ratings
On a global scale, Itaú CorpBanca is rated by two world-wide recognized agencies: Moody´s Investors Service and Standard & Poor´s Ratings Services.
On April 28, 2016, Moody´s Investors Service (Moody's) upgraded to 'A3' from 'Baa3' following the merger of Banco Itaú Chile with and into CorpBanca on April 1, 2016.
|
Moody´s
|
Rating
|
|
Long-term foreign currency deposits
|
A3
|
|
Long-term foreign currency debt
|
A3
|
|
Short-term foreign currency deposits
|
Prime-2
|
|
Outlook
|
Stable
|
On April 7, 2016, Standard & Poor´s Ratings Services (S&P) Placed Itaú CorpBanca's 'BBB/A-2' on 'Watch Positive' following the completion of merger of Banco Itaú Chile with and into CorpBanca
|
Standard & Poor´s
|
Rating
|
|
Long-term issuer credit rating
|
BBB
|
|
Short-term issuer credit rating
|
A-2
|
|
CreditWatch
|
Positive
|
Local Credit risk ratings
On a national scale, CorpBanca is rated by Feller Rate, International Credit Rating Chile and Humphreys.
On April 1, 2016, Feller Rate Affirmed local ratings in 'AA' following the completion of merger of Banco Itaú Chile with and into CorpBanca. Outlook was confirmed as 'Stable'.
|
Feller Rate
|
Rating
|
|
Long-term issuer credit rating
|
AA
|
|
Senior unsecured bonds
|
AA
|
|
Subordinated bonds
|
AA-
|
|
Short-term issuer credit rating
|
Nivel 1+
|
|
Shares
|
1ª Clase Nivel 1
|
|
Outlook
|
Stable
|
On April 24, 2016, Humphreys Affirmed local ratings in 'AA' following the completion of merger of Banco Itaú Chile with and into CorpBanca. Outlook was confirmed as 'Stable'.
|
Humphreys
|
Rating
|
|
Long-term issuer credit rating
|
AA
|
|
Senior unsecured bonds
|
AA
|
|
Subordinated bonds
|
AA-
|
|
Short-term issuer credit rating
|
Nivel 1+
|
|
Shares
|
1ª Clase Nivel 1
|
|
Outlook
|
Stable
|
|
Itaú CorpBanca
|
15
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
VI.1) CorpBanca | Quarterly Consolidated Income Statements (unaudited)
|
|
For the three months ended
|
Change (%)
|
||||||
|
31-Mar-16
|
31-Mar-16
|
31-Dec-15
|
31-Mar-15
|
Mar.16/
Mar.15
|
Mar.16/
Dec.15
|
|||
|
US$ thousand
|
Ch$ million
|
|||||||
|
Interest income
|
485,189
|
323,660
|
338,850
|
268,976
|
20.3%
|
-4.5%
|
||
|
Interest expense
|
(283,195)
|
(188,914)
|
(180,286)
|
(143,774)
|
31.4%
|
4.8%
|
||
|
Net interest income
|
201,994
|
134,746
|
158,564
|
125,202
|
7.6%
|
-15.0%
|
||
|
Fee and commission income
|
60,327
|
40,243
|
53,717
|
47,786
|
-15.8%
|
-25.1%
|
||
|
Fee and commission expense
|
(16,914)
|
(11,283)
|
(12,189)
|
(11,207)
|
0.7%
|
-7.4%
|
||
|
Net fee and commission income
|
43,413
|
28,960
|
41,528
|
36,579
|
-20.8%
|
-30.3%
|
||
|
Net income from financial operations
|
(68,119)
|
(45,441)
|
95,579
|
67,528
|
-
|
-
|
||
|
Foreign exchange profit (loss), net
|
60,978
|
40,677
|
(60,092)
|
(17,793)
|
-
|
-
|
||
|
Total financial transactions, net
|
(7,142)
|
(4,764)
|
35,487
|
49,735
|
-
|
-
|
||
|
Other operating income
|
(5,918)
|
(3,948)
|
2,789
|
8,559
|
-
|
-
|
||
|
Net operating profit before loan losses
|
232,347
|
154,994
|
238,368
|
220,075
|
-29.6%
|
-35.0%
|
||
|
Provision for loan losses (1)
|
(153,767)
|
(102,575)
|
(41,044)
|
(38,970)
|
163.2%
|
149.9%
|
||
|
Net operating profit
|
78,580
|
52,419
|
197,324
|
181,105
|
-71.1%
|
-73.4%
|
||
|
Personnel salaries and expenses
|
(75,172)
|
(50,146)
|
(50,603)
|
(50,202)
|
-0.1%
|
-0.9%
|
||
|
Administrative expenses
|
(85,390)
|
(56,962)
|
(78,610)
|
(51,561)
|
10.5%
|
-27.5%
|
||
|
Depreciation and amortization
|
(15,169)
|
(10,119)
|
(10,672)
|
(10,806)
|
-6.4%
|
-5.2%
|
||
|
Impairment
|
(25)
|
(17)
|
(114)
|
(11)
|
54.5%
|
-85.1%
|
||
|
Operating expenses
|
(175,757)
|
(117,244)
|
(139,999)
|
(112,580)
|
4.1%
|
-16.3%
|
||
|
Operating income
|
(97,177)
|
(64,825)
|
57,325
|
68,525
|
-
|
-
|
||
|
Income from investments in other companies
|
777
|
518
|
22
|
907
|
-42.9%
|
2254.5%
|
||
|
Income before taxes
|
(96,401)
|
(64,307)
|
57,347
|
69,432
|
-
|
-
|
||
|
Income tax expense
|
57,713
|
38,499
|
(10,289)
|
(22,239)
|
-
|
-
|
||
|
Net income from ordinary activities
|
(38,688)
|
(25,808)
|
47,058
|
47,193
|
-
|
-
|
||
|
Net income from discontinued operations
|
-
|
-
|
-
|
-
|
-
|
-
|
||
|
Net income attributable to:
|
(38,688)
|
(25,808)
|
47,058
|
47,193
|
-
|
-
|
||
|
Minority interest
|
(388)
|
(259)
|
(4,111)
|
(7,504)
|
-96.5%
|
-93.7%
|
||
|
Net income attributable to shareholders
|
(39,076)
|
(26,067)
|
42,947
|
39,689
|
-
|
-
|
||
|
|
|
|
|
|
|
|
||
(1) Includes provision for contingent loans and net of loan loss recoveries.
|
Itaú CorpBanca
|
16
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
VI.2) Banco Itaú Chile | Quarterly Consolidated Income Statements (unaudited)
|
|
For the three months ended
|
Change (%)
|
||||||
|
31-Mar-16
|
31-Mar-16
|
31-Dec-15
|
31-Mar-15
|
Mar.16/
Mar.15
|
Mar.16/
Dec.15
|
|||
|
US$ thousand
|
Ch$ million
|
|||||||
|
Interest income
|
182,554
|
121,778
|
128,072
|
91,107
|
33.7%
|
-4.9%
|
||
|
Interest expense
|
(102,580)
|
(68,429)
|
(76,512)
|
(44,651)
|
53.3%
|
-10.6%
|
||
|
Net interest income
|
79,974
|
53,349
|
51,560
|
46,456
|
14.8%
|
3.5%
|
||
|
Fee and commission income
|
26,415
|
17,621
|
20,595
|
21,649
|
-18.6%
|
-14.4%
|
||
|
Fee and commission expense
|
(3,829)
|
(2,554)
|
(2,497)
|
(2,551)
|
0.1%
|
2.3%
|
||
|
Net fee and commission income
|
22,586
|
15,067
|
18,098
|
19,098
|
-21.1%
|
-16.7%
|
||
|
Net income from financial operations
|
11,185
|
7,461
|
13,808
|
(11,339)
|
-
|
-46.0%
|
||
|
Foreign exchange profit (loss), net
|
(7,134)
|
(4,759)
|
9,593
|
19,110
|
-
|
-
|
||
|
Total financial transactions, net
|
4,050
|
2,702
|
23,401
|
7,771
|
-65.2%
|
-88.5%
|
||
|
Other operating income
|
(3,635)
|
(2,425)
|
(2,738)
|
(1,852)
|
30.9%
|
-11.4%
|
||
|
Net operating profit before loan losses
|
102,976
|
68,693
|
90,321
|
71,473
|
-3.9%
|
-23.9%
|
||
|
Provision for loan losses (1)
|
(21,952)
|
(14,644)
|
(8,059)
|
(10,443)
|
40.2%
|
81.7%
|
||
|
Net operating profit
|
81,023
|
54,049
|
82,262
|
61,030
|
-11.4%
|
-34.3%
|
||
|
Personnel salaries and expenses
|
(33,231)
|
(22,168)
|
(25,447)
|
(18,754)
|
18.2%
|
-12.9%
|
||
|
Administrative expenses
|
(32,888)
|
(21,939)
|
(15,657)
|
(22,251)
|
-1.4%
|
40.1%
|
||
|
Depreciation and amortization
|
(4,262)
|
(2,843)
|
(2,577)
|
(2,363)
|
20.3%
|
10.3%
|
||
|
Impairment
|
-
|
-
|
-
|
-
|
-
|
-
|
||
|
Operating expenses
|
(70,381)
|
(46,950)
|
(43,681)
|
(43,368)
|
8.3%
|
7.5%
|
||
|
Operating income
|
10,642
|
7,099
|
38,581
|
17,662
|
-59.8%
|
-81.6%
|
||
|
Income from investments in other companies
|
-
|
-
|
32
|
12
|
-100.0%
|
-100.0%
|
||
|
Income before taxes
|
10,642
|
7,099
|
38,613
|
17,674
|
-59.8%
|
-81.6%
|
||
|
Income tax expense
|
(1,438)
|
(959)
|
(906)
|
(3,683)
|
-74.0%
|
5.8%
|
||
|
Net income from ordinary activities
|
9,204
|
6,140
|
37,707
|
13,991
|
-56.1%
|
-83.7%
|
||
|
Net income from discontinued operations
|
-
|
-
|
-
|
-
|
-
|
-
|
||
|
Net income attributable to:
|
||||||||
|
Minority interest
|
(3)
|
(2)
|
(2)
|
(2)
|
0.0%
|
0.0%
|
||
|
Net income attributable to shareholders
|
9,201
|
6,138
|
37,705
|
13,989
|
-56.1%
|
-83.7%
|
||
|
|
|
|
|
|
|
|
||
(1) Includes provision for contingent loans and net of loan loss recoveries.
|
Itaú CorpBanca
|
17
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
VII) Pro forma1 Consolidated Balance Sheet (unaudited)
|
As of
|
Change (%)
|
|||||||
|
31-Mar-16
|
31-Mar-16
|
31-Dec-15
|
31-Mar-15
|
Mar-16/Mar-15
|
Mar-16/Dec-15
|
|||
|
US$ thousand
|
Ch$ million
|
|||||||
|
Assets
|
||||||||
|
Cash and deposits in banks
|
3,658,035
|
2,440,202
|
1,482,566
|
1,300,966
|
87.6%
|
64.6%
|
||
|
Unsettled transactions
|
475,964
|
317,506
|
238,596
|
535,649
|
-40.7%
|
33.1%
|
||
|
Trading investments
|
853,018
|
569,031
|
341,664
|
546,636
|
4.1%
|
66.5%
|
||
|
Available-for-sale investments
|
3,212,283
|
2,142,850
|
2,437,298
|
1,746,526
|
22.7%
|
-12.1%
|
||
|
Held-to-maturity investments
|
249,438
|
166,395
|
170,191
|
203,357
|
-18.2%
|
-2.2%
|
||
|
Investments under resale agreements
|
52,198
|
34,820
|
34,967
|
111,684
|
-68.8%
|
-0.4%
|
||
|
Financial derivatives contracts
|
1,903,517
|
1,269,798
|
1,244,435
|
1,129,537
|
12.4%
|
2.0%
|
||
|
Interbank loans, net
|
449,771
|
300,033
|
551,227
|
599,522
|
-50.0%
|
-45.6%
|
||
|
Loans and accounts receivable from customers
|
32,138,636
|
21,439,041
|
21,634,113
|
20,611,025
|
4.0%
|
-0.9%
|
||
|
Loan loss allowances
|
(785,294)
|
(523,854)
|
(465,773)
|
(419,442)
|
24.9%
|
12.5%
|
||
|
Loans and accounts receivable from customers, net of loan loss allowances
|
31,353,341
|
20,915,187
|
21,168,340
|
20,191,583
|
3.6%
|
-1.2%
|
||
|
Investments in other companies
|
25,265
|
16,854
|
17,123
|
18,278
|
-7.8%
|
-1.6%
|
||
|
Intangible assets
|
1,109,678
|
740,244
|
717,073
|
763,177
|
-3.0%
|
3.2%
|
||
|
Property, plant and equipment
|
183,934
|
122,699
|
125,600
|
124,111
|
-1.1%
|
-2.3%
|
||
|
Current taxes
|
74,375
|
49,614
|
26,428
|
35,010
|
41.7%
|
87.7%
|
||
|
Deferred taxes
|
374,696
|
249,952
|
228,171
|
233,507
|
7.0%
|
9.5%
|
||
|
Other assets
|
919,546
|
613,411
|
600,058
|
482,407
|
27.2%
|
2.2%
|
||
|
Total Assets
|
44,895,059
|
29,948,596
|
29,383,737
|
28,021,950
|
6.9%
|
1.9%
|
||
|
-
|
-
|
-
|
-
|
|||||
|
Liabilities
|
||||||||
|
Deposits and other demand liabilities
|
7,861,670
|
5,244,363
|
5,412,968
|
4,758,548
|
10.2%
|
-3.1%
|
||
|
Unsettled transactions
|
388,258
|
258,999
|
131,818
|
440,220
|
-41.2%
|
96.5%
|
||
|
Investments sold under repurchase agreements
|
1,164,222
|
776,629
|
304,358
|
480,950
|
61.5%
|
155.2%
|
||
|
Time deposits and other time liabilities
|
18,130,699
|
12,094,627
|
12,448,176
|
12,124,029
|
-0.2%
|
-2.8%
|
||
|
Financial derivatives contracts
|
1,646,330
|
1,098,234
|
991,833
|
971,036
|
13.1%
|
10.7%
|
||
|
Interbank borrowings
|
3,682,696
|
2,456,653
|
2,187,185
|
1,924,528
|
27.6%
|
12.3%
|
||
|
Issued debt instruments
|
7,049,480
|
4,702,567
|
4,731,889
|
4,062,399
|
15.8%
|
-0.6%
|
||
|
Other financial liabilities
|
44,653
|
29,787
|
35,208
|
32,021
|
-7.0%
|
-15.4%
|
||
|
Current taxes
|
22,685
|
15,133
|
14,249
|
15,749
|
-3.9%
|
6.2%
|
||
|
Deferred taxes
|
337,914
|
225,416
|
242,188
|
277,495
|
-18.8%
|
-6.9%
|
||
|
Provisions
|
207,768
|
138,598
|
310,040
|
175,234
|
-20.9%
|
-55.3%
|
||
|
Other liabilities
|
393,014
|
262,172
|
283,684
|
295,637
|
-11.3%
|
-7.6%
|
||
|
Total Liabilities
|
40,929,391
|
27,303,178
|
27,093,596
|
25,557,846
|
6.8%
|
0.8%
|
||
|
Equity
|
-
|
-
|
||||||
|
Capital
|
2,277,000
|
1,518,941
|
1,126,128
|
1,126,128
|
34.9%
|
34.9%
|
||
|
Reserves
|
1,445,848
|
964,496
|
912,328
|
895,929
|
7.7%
|
5.7%
|
||
|
Valuation adjustment
|
(331,019)
|
(220,816)
|
(215,284)
|
(147,298)
|
49.9%
|
2.6%
|
||
|
Retained Earnings:
|
||||||||
|
Retained earnings or prior periods
|
146,443
|
97,689
|
-
|
282,707
|
-65.4%
|
-
|
||
|
Income for the period
|
(29,875)
|
(19,929)
|
306,107
|
53,678
|
-
|
-
|
||
|
Minus: Provision for mandatory dividend
|
(4,601)
|
(3,069)
|
(153,054)
|
(62,692)
|
-95.1%
|
-98.0%
|
||
|
Attributable to bank shareholders
|
3,503,796
|
2,337,312
|
1,976,225
|
2,148,452
|
8.8%
|
18.3%
|
||
|
Non-controlling interest
|
461,873
|
308,106
|
313,916
|
315,652
|
-2.4%
|
-1.9%
|
||
|
Total Equity
|
3,965,668
|
2,645,418
|
2,290,141
|
2,464,104
|
7.4%
|
15.5%
|
||
|
Total Equity and Liabilities
|
44,895,059
|
29,948,596
|
29,383,737
|
28,021,950
|
6.9%
|
1.9%
|
||
|
(1)
|
Pro forma considers CorpBanca and Banco Itaú Chile., excluding merger effects.
|
|
Itaú CorpBanca
|
18
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
VIII.1) CorpBanca Quarterly Consolidated Evolution Selected Performance Ratios (unaudited)
|
As of and for the three months ended
|
|||||
|
31-Mar-15
|
30-Jun-15
|
30-Sep-15
|
31-Dec-15
|
31-Mar-16
|
|
|
Profitability
|
|||||
|
Net interest income / Avg. interest-earning assets(1)(2) (NIM LTM)
|
3.89%
|
3.77%
|
3.77%
|
3.71%
|
3.84%
|
|
Net interest income / Avg. interest-earning assets(1)(2) (NIM annualized)
|
3.09%
|
4.23%
|
3.87%
|
3.74%
|
3.19%
|
|
Net operating profit before loan losses / Avg. total assets(1)
|
4.36%
|
4.67%
|
5.17%
|
4.56%
|
2.95%
|
|
Net operating profit before loan losses / Avg. interest-earning assets(1)(2)
|
5.43%
|
5.80%
|
6.45%
|
5.62%
|
3.67%
|
|
RoAA (before taxes), over Avg. total assets(1)
|
1.37%
|
1.62%
|
2.18%
|
1.10%
|
-1.23%
|
|
RoAA (before taxes), over Avg. interest-earning assets(1)(2)
|
1.71%
|
2.01%
|
2.73%
|
1.35%
|
-1.52%
|
|
RoAE (before taxes)(1)(3)
|
17.97%
|
21.64%
|
34.70%
|
18.87%
|
-19.22%
|
|
RoAA, over Avg. total assets(1)
|
0.93%
|
1.24%
|
1.28%
|
0.90%
|
-0.49%
|
|
RoAA, over Avg. interest-earning assets(1)(2)
|
1.16%
|
1.54%
|
1.60%
|
1.11%
|
-0.61%
|
|
RoAE(1)(3)
|
9.46%
|
14.14%
|
17.33%
|
12.31%
|
-7.24%
|
|
Efficiency
|
|||||
|
Operating expenses / Avg. total assets(1)
|
2.23%
|
2.21%
|
2.18%
|
2.68%
|
2.24%
|
|
Operating expenses/ Avg. total loans(1)
|
3.15%
|
3.10%
|
3.10%
|
3.80%
|
3.19%
|
|
Operating expenses / Operating revenues
|
51.15%
|
47.19%
|
42.04%
|
58.68%
|
75.63%
|
|
Capitalization
|
|||||
|
Risk Weigthed Assets (Ch$ million)
|
17,149,965
|
17,442,229
|
17,649,991
|
17,451,302
|
17,561,388
|
|
TIER I Capital (Core capital) (Ch$ million)(4)
|
1,407,163
|
1,214,395
|
1,165,159
|
1,183,723
|
1,147,904
|
|
TIER II Capital (Ch$ million)
|
622,211
|
479,782
|
474,144
|
482,986
|
464,624
|
|
Regulatory Capital (Ch$ million)(4)
|
2,029,374
|
1,694,177
|
1,639,303
|
1,666,708
|
1,612,527
|
|
TIER I (Core capital) Ratio(4)
|
8.21%
|
6.96%
|
6.60%
|
6.78%
|
6.53%
|
|
BIS Ratio(4)
|
11.83%
|
9.71%
|
9.28%
|
9.54%
|
9.17%
|
|
Shareholders' equity / Total assets
|
8.59%
|
7.37%
|
7.04%
|
7.17%
|
6.91%
|
|
Shareholders' equity / Total liabilities
|
9.40%
|
7.96%
|
7.58%
|
7.72%
|
7.43%
|
|
Market information (period-end)
|
|||||
|
Diluted Earnings per share before taxes (Ch$ per share)
|
0.2040
|
0.2433
|
0.3358
|
0.1685
|
(0.1889)
|
|
Diluted Earnings per ADR before taxes (US$ per ADR)
|
0.4904
|
0.5716
|
0.7227
|
0.3558
|
(0.4248)
|
|
Diluted Earnings per share (Ch$ per share)
|
0.1166
|
0.1661
|
0.1839
|
0.1262
|
(0.0766)
|
|
Diluted Earnings per ADR (US$ per ADR)
|
0.2803
|
0.3902
|
0.3959
|
0.2665
|
(0.1722)
|
|
Total Shares Outstanding (Thousands)(4)
|
340,358,194,2
|
340,358,194,2
|
340,358,194,2
|
340,358,194,2
|
340,358,194,2
|
|
Ch$ exchange rate for US$1.0
|
623.96
|
638.47
|
696.86
|
710.32
|
667.08
|
|
COP exchange rate for Ch$1.0
|
0.2405
|
0.2454
|
0.2265
|
0.2266
|
0.2200
|
|
Quarterly UF variation
|
-0.02%
|
1.46%
|
1.45%
|
1.45%
|
0.71%
|
|
Monetary Policy Interest Rate in Chile(5)
|
3.00%
|
3.00%
|
3.00%
|
3.35%
|
3.50%
|
|
Monetary Policy Interest Rate in Colombia(5)
|
3.25%
|
4.00%
|
4.75%
|
5.75%
|
6.50%
|
(1) Annualized figures when appropriate.
(2) Interest-earning assets: Total loans and financial investments.
(3) Equity: Average equity attributable to shareholders excluding net income and accrual for mandatory dividends.
(4) During the second and first quarters 2012 and 2013, respectively, the bank increased its capital base.
(5) As of the end of the month.
|
Itaú CorpBanca
|
19
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
|
As of and for the three months ended
|
|||||
|
31-Mar-15
|
30-Jun-15
|
30-Sep-15
|
31-Dec-15
|
31-Mar-16
|
|
|
Asset quality
|
|||||
|
Risk Index (Loan loss allowances / Total loans )
|
2.19%
|
2.32%
|
2.38%
|
2.40%
|
2.84%
|
|
Prov. for loan losses / Avg. total loans(1)
|
1.09%
|
1.21%
|
1.15%
|
1.12%
|
2.79%
|
|
Prov. for loan losses / Avg. total assets(1)
|
0.77%
|
0.86%
|
0.81%
|
0.78%
|
1.96%
|
|
Prov. for loan losses / Net operating profit before loans losses
|
17.7%
|
18.4%
|
15.6%
|
17.2%
|
66.2%
|
|
Prov. for loan losses / Net income
|
82.6%
|
69.2%
|
62.9%
|
87.2%
|
-397.5%
|
|
PDL / Total loans(2)
|
0.60%
|
0.59%
|
0.72%
|
0.75%
|
0.75%
|
|
Coverage PDLs
|
363.2%
|
395.6%
|
328.6%
|
318.7%
|
376.2%
|
|
NPL / Total loans(3)
|
1.25%
|
1.28%
|
1.42%
|
1.37%
|
1.40%
|
|
Coverage NPLs
|
179.03%
|
184.86%
|
170.95%
|
172.44%
|
186.57%
|
|
Total NPLs(4) (Ch$ million)
|
169,329
|
178,508
|
195,175
|
196,806
|
197,905
|
|
NPLs Chile (Ch$ million)
|
119,247
|
116,834
|
124,571
|
127,558
|
124,967
|
|
NPLs Colombia (Ch$ million)
|
50,082
|
61,674
|
70,604
|
69,248
|
72,938
|
|
Total Loans(4) (Ch$ million)
|
13,572,250
|
13,962,608
|
13,757,159
|
14,810,136
|
13,816,804
|
|
Loans Chile (Ch$ million)
|
8,652,136
|
8,748,718
|
8,893,583
|
9,601,922
|
9,453,335
|
|
Loans Colombia (Ch$ million)
|
4,920,114
|
5,213,890
|
4,863,576
|
5,208,214
|
5,116,490
|
|
Total NPLs / Total Loans(4)
|
1.25%
|
1.28%
|
1.42%
|
1.33%
|
1.36%
|
|
NPLs Chile / Loans Chile
|
1.38%
|
1.34%
|
1.40%
|
1.33%
|
1.32%
|
|
NPLs Colombia / Loans Colombia
|
1.02%
|
1.18%
|
1.45%
|
1.33%
|
1.43%
|
|
Total LLR(4) (Ch$ million)
|
303,150
|
329,989
|
333,644
|
355,779
|
413,184
|
|
LLR Chile (Ch$ million)
|
113,212
|
118,733
|
123,748
|
128,979
|
172,648
|
|
LLR Colombia (Ch$ million)
|
189,938
|
211,255
|
209,897
|
226,800
|
240,536
|
|
Coverage Total NPL(4)
|
179.03%
|
184.86%
|
170.95%
|
180.78%
|
208.78%
|
|
Coverage NPL Chile
|
94.94%
|
101.63%
|
99.34%
|
101.11%
|
138.15%
|
|
Coverage NPL Colombia
|
379.25%
|
342.53%
|
297.29%
|
327.52%
|
329.78%
|
|
Total Write-offs (Ch$ million)
|
28,411
|
26,981
|
25,213
|
36,061
|
31,687
|
|
Write-offs Chile (Ch$ million)
|
10,861
|
11,253
|
10,401
|
10,838
|
12,273
|
|
Write-offs Colombia (Ch$ million)
|
17,550
|
15,728
|
14,812
|
25,223
|
19,414
|
(1) Annualized figures when appropriate.
(2) PDL: Past due loans; all installments that are more than 90 days overdue.
(3) NPL: Non-performing loans; full balance of loans with one installment 90 days or more overdue.
(4) According to SBIF criteria for NPLs statistics, prior to October 2015, statistics for NPLs were presented on an unconsolidated basis, though they did not include local nor foreign subsidiaries' NPLs. Nevertheless, CorpBanca did include in its reports NPLs for CorpBanca Colombia using the same criteria, i.e., on an unconsolidated basis (only the banks in Chile and Colombia). These SBIF criteria changed in October 2015, though since 4Q 2015, statistics for NPLs are presented on a consolidated basis. In this context, also since 4Q 2015, CorpBanca's NPLs not only include CorpBanca Colombia's NPLs but also our New York Branch, Helm Bank Panamá and other local subsidiaries' NPLs when applicable. Therefore, 4Q 2015 NPLs and NPL ratios for CorpBanca and the Chilean Banking Industry are not fully comparable to prior quarters.
|
Itaú CorpBanca
|
20
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
VIII.2) Banco Itaú Chile Quarterly Consolidated Evolution Selected Performance Ratios (unaudited)
|
As of and for the three months ended
|
|||||
|
31-Mar-15
|
30-Jun-15
|
30-Sep-15
|
31-Dec-15
|
31-Mar-16
|
|
|
Profitability
|
|||||
|
Net interest income / Avg. interest-earning assets(1)(2) (NIM LTM)
|
1.35%
|
3.12%
|
4.62%
|
3.06%
|
3.17%
|
|
Net interest income / Avg. interest-earning assets(1)(2) (NIM annualized)
|
2.71%
|
3.53%
|
3.37%
|
2.81%
|
2.89%
|
|
Net operating profit before loan losses / Avg. total assets(1)
|
3.62%
|
4.43%
|
3.82%
|
4.30%
|
3.16%
|
|
Net operating profit before loan losses / Avg. interest-earning assets(1)(2)
|
4.17%
|
5.13%
|
4.41%
|
4.93%
|
3.72%
|
|
RoAA (before taxes), over Avg. total assets(1)
|
0.90%
|
1.84%
|
1.39%
|
1.84%
|
0.33%
|
|
RoAA (before taxes), over Avg. interest-earning assets(1)(2)
|
1.03%
|
2.13%
|
1.61%
|
2.11%
|
0.38%
|
|
RoAE (before taxes)(1)(3)
|
11.05%
|
21.57%
|
16.81%
|
23.56%
|
3.13%
|
|
RoAA, over Avg. total assets(1)
|
0.71%
|
1.44%
|
1.17%
|
1.79%
|
0.28%
|
|
RoAA, over Avg. interest-earning assets(1)(2)
|
0.82%
|
1.67%
|
1.36%
|
2.06%
|
0.33%
|
|
RoAE(1)(3)
|
7.71%
|
14.94%
|
12.67%
|
20.35%
|
2.55%
|
|
Efficiency
|
|||||
|
Operating expenses / Avg. total assets(1)
|
2.20%
|
1.95%
|
1.84%
|
2.08%
|
2.16%
|
|
Operating expenses/ Avg. total loans(1)
|
2.80%
|
2.47%
|
2.32%
|
2.62%
|
2.74%
|
|
Operating expenses / Operating revenues
|
60.68%
|
44.04%
|
48.06%
|
48.36%
|
68.35%
|
|
Capitalization
|
|||||
|
Risk Weigthed Assets (Ch$ million)
|
7,007,930
|
7,007,066
|
7,354,578
|
7,336,110
|
7,419,433
|
|
TIER I Capital (Core capital) (Ch$ million)(4)
|
741,289
|
763,017
|
775,225
|
792,503
|
794,076
|
|
TIER II Capital (Ch$ million)
|
77,385
|
77,540
|
78,633
|
78,526
|
78,463
|
|
Regulatory Capital (Ch$ million)(4)
|
818,673
|
840,557
|
853,858
|
871,029
|
872,539
|
|
TIER I (Core capital) Ratio(4)
|
10.57%
|
10.89%
|
10.54%
|
10.80%
|
10.70%
|
|
BIS Ratio(4)
|
11.68%
|
11.99%
|
11.61%
|
11.87%
|
11.76%
|
|
Shareholders' equity / Total assets
|
9.30%
|
9.57%
|
9.31%
|
9.34%
|
13.39%
|
|
Shareholders' equity / Total liabilities
|
10.25%
|
10.59%
|
10.26%
|
10.30%
|
15.46%
|
|
Market information (period-end)
|
|||||
|
Diluted Earnings per share before taxes (Ch$ per share)
|
|||||
|
Diluted Earnings per ADR before taxes (US$ per ADR)
|
|||||
|
Diluted Earnings per share (Ch$ per share)
|
|||||
|
Diluted Earnings per ADR (US$ per ADR)
|
|||||
|
Total Shares Outstanding (Thousands)
|
|||||
|
Ch$ exchange rate for US$1.0
|
623.96
|
638.47
|
696.86
|
710.32
|
667.08
|
|
COP exchange rate for Ch$1.0
|
0.2405
|
0.2454
|
0.2265
|
0.2266
|
0.2200
|
|
Quarterly UF variation
|
-0.02%
|
1.46%
|
1.45%
|
1.45%
|
0.71%
|
|
Monetary Policy Interest Rate in Chile(4)
|
3.00%
|
3.00%
|
3.00%
|
3.35%
|
3.50%
|
(1) Annualized figures when appropriate.
(2) Interest-earning assets: Total loans and financial investments.
(3) Equity: Average equity attributable to shareholders excluding net income and accrual for mandatory dividends.
(4) As of the end of the month.
|
Itaú CorpBanca
|
21
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
|
As of and for the three months ended
|
|||||
|
31-Mar-15
|
30-Jun-15
|
30-Sep-15
|
31-Dec-15
|
31-Mar-16
|
|
|
Asset quality
|
|||||
|
Risk Index (Loan loss allowances / Total loans )
|
1.66%
|
1.70%
|
1.69%
|
1.61%
|
1.61%
|
|
Prov. for loan losses / Avg. total loans(1)
|
0.67%
|
0.83%
|
0.75%
|
0.48%
|
0.86%
|
|
Prov. for loan losses / Avg. total assets(1)
|
0.53%
|
0.65%
|
0.59%
|
0.38%
|
0.67%
|
|
Prov. for loan losses / Net operating profit before loans losses
|
14.6%
|
14.7%
|
15.6%
|
8.9%
|
21.3%
|
|
Prov. for loan losses / Net income
|
74.6%
|
45.2%
|
50.7%
|
21.4%
|
238.5%
|
|
PDL / Total loans(2)
|
0.77%
|
0.80%
|
0.81%
|
0.74%
|
0.80%
|
|
Coverage PDLs
|
217.0%
|
212.4%
|
207.7%
|
217.79%
|
201.4%
|
|
NPL / Total loans(3)
|
1.33%
|
1.34%
|
1.47%
|
1.33%
|
1.49%
|
|
Coverage NPLs
|
124.87%
|
126.94%
|
115.04%
|
120.74%
|
107.91%
|
|
Total NPLs(4) (Ch$ million)
|
82,783
|
84,919
|
96,130
|
91,096
|
102,554
|
|
NPLs Chile (Ch$ million)
|
82,783
|
84,919
|
96,130
|
91,096
|
102,554
|
|
NPLs Colombia (Ch$ million)
|
|||||
|
Total Loans(4) (Ch$ million)
|
6,210,220
|
6,357,125
|
6,536,948
|
6,824,032
|
6,869,245
|
|
Loans Chile (Ch$ million)
|
6,210,220
|
6,357,125
|
6,536,948
|
6,824,032
|
6,869,245
|
|
Loans Colombia (Ch$ million)
|
|||||
|
Total NPLs / Total Loans(4)
|
1.33%
|
1.34%
|
1.47%
|
1.33%
|
1.49%
|
|
NPLs Chile / Loans Chile
|
1.33%
|
1.34%
|
1.47%
|
1.33%
|
1.49%
|
|
NPLs Colombia / Loans Colombia
|
-
|
-
|
-
|
-
|
-
|
|
Total LLR(4) (Ch$ million)
|
103,372
|
107,794
|
110,589
|
109,994
|
110,670
|
|
LLR Chile (Ch$ million)
|
103,372
|
107,794
|
110,589
|
109,994
|
110,670
|
|
LLR Colombia (Ch$ million)
|
|||||
|
Coverage Total NPL(4)
|
124.87%
|
126.94%
|
115.04%
|
120.74%
|
107.91%
|
|
Coverage NPL Chile
|
124.87%
|
126.94%
|
115.04%
|
120.74%
|
107.91%
|
|
Coverage NPL Colombia
|
|||||
|
Total Write-offs (Ch$ million)
|
14,408
|
11,250
|
11,121
|
11,580
|
16,253
|
|
Write-offs Chile (Ch$ million)
|
14,408
|
11,250
|
11,121
|
11,580
|
16,253
|
|
Write-offs Colombia (Ch$ million)
|
|||||
(1) Annualized figures when appropriate.
(2) PDL: Past due loans; all installments that are more than 90 days overdue.
(3) NPL: Non-performing loans; full balance of loans with one installment 90 days or more overdue.
(4) According to SBIF criteria for NPLs statistics, prior to October 2015, statistics for NPLs were presented on an unconsolidated basis, though they did not include local nor foreign subsidiaries' NPLs. Nevertheless, CorpBanca did include in its reports NPLs for CorpBanca Colombia using the same criteria, i.e., on an unconsolidated basis (only the banks in Chile and Colombia). These SBIF criteria changed in October 2015, though since 4Q 2015, statistics for NPLs are presented on a consolidated basis. In this context, also since 4Q 2015, CorpBanca's NPLs not only include CorpBanca Colombia's NPLs but also our New York Branch, Helm Bank Panamá and other local subsidiaries' NPLs when applicable. Therefore, 4Q 2015 NPLs and NPL ratios for CorpBanca and the Chilean Banking Industry are not fully comparable to prior quarters.
|
Itaú CorpBanca
|
22
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Press Release 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 Press Release 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 Press Release are expressly qualified by this cautionary statement.
|
Itaú CorpBanca
|
23
|
|
|
|||
|
Management Discussion & Analysis
|
Executive Summary
|
||
CONTACT INFORMATION:
Gabriel Moura
CFO. Itaú CorpBanca
Santiago. Chile
Phone: (562) 2686-0558
IR@corpbanca.cl
Claudia Labbé
Head of Investor Relations. Itaú CorpBanca
Santiago. Chile
Phone: (562) 2660-2555
claudia.labbe@corpbanca.cl
Nicolas Bornozis
President. Capital Link
New York. USA
Phone: (212) 661-7566
nbornozis@capitallink.com
|
Itaú CorpBanca
|
24
|