Why Grupo Security
At Grupo Security we are focused on delivering shareholder value through financial discipline and profitable and efficient growth, maintaining tight risk management standards. With a commitment to customer service and transparency, we are creating a differentiated investment for our shareholders as we focus on leadership, performance and value.
|Well-Established Brand in the Attractive Chilean Market|
Chile offers market-friendly regulated industries with attractive growth potential and strong macroeconomic dynamics. Banco Security’s strategy centers on providing innovative and segmented products to a well-defined niche market of large and medium-sized companies and affluent individuals. The Chilean insurance market provides attractive opportunities with penetration levels at 4%, below the 8-11% in developed countries. Gross life written premiums for the sector have expanded at a 10-year CAGR of 12.2% in Ch$. Chile also has a strong asset management industry, with mutual funds expanding at a 15.1% 10-year CAGR. Recognized for its client service, Banco Security ranks among the first Chilean banks in Customer Satisfaction.
|Successful Track Record of Acquiring and Integrating Operations Capitalizing on Industry Consolidation Opportunities|
Over the past 20 years, Grupo Security has successfully completed 12 strategic acquisitions for a total investment of US$728 million, expanding its service offering and market share in its target segments while achieving significant synergies. The acquisition of the Cruz del Sur insurance, asset management and brokerage businesses in mid-2013 for approx. US$300 million resulted in annual synergies equivalent to US$25.9 million, above the US$15.8 million originally anticipated. In 2012, Grupo Security began its regional expansion strategy in the Andean region through the acquisition of the leading corporate travel agency in Peru to gain experience in that market and pave the way for further expansion. In 3Q15 Grupo Security completed the US$22.5 million acquisition of insurance company Protecta, the country's 9th largest insurance company establishing a foothold in the Peruvian financial market.
|Expansion within the Andean Region Offers Long-Term Growth Potential|
Peru offers one of the most attractive high-growth financial markets in LatAm, with low penetration of loans and insurance services. Despite high industry concentration, insurance to GDP stood at 1.8% in Dec’14, similar to that in Chile in 1990. System premiums and investments have expanded at a 10-year US$ CAGR of 14% and 15%, respectively, compared with 10% and 7% in Chile. Furthermore, loans to GDP in Peru stood at 31% in Dec’13, compared with 77% in Chile, while system loans have expanded at a 10-year CAGR of 18.0% in US$, compared with 8.0% in Chile. Expected GDP growth of 3.5% for 2016 and 4.0% for 2017, ahead of most other countries in LatAm, low inflation and a growing middle class also support growth. Peru’s legal, regulatory and operational environment shares similarities with Chile promoting the development of this market.
|Consistent Financial Performance Leveraging Operating and Financial Synergies|
Through a combination of organic growth and acquisitions, a strategy based on segmentation and innovation, and leveraging our strong corporate brand and client loyalty, we have reported consistent profitability since 1991, achieving a 9.7% CAGR in profits over the past 5 years, and ROE of 12.1% in 2015. All businesses contributed to this performance, with the lending area reporting a 7.5% 5-year CAGR. As of June 2016, profit at our asset management area reached Ch$ 3,009 million, 8% of the LTM profit of all Grupo Security’s businesses, and our insurance business reported profit of Ch$ 23,230 million, 37% of the LTM profit of all Grupo Security’s businesses.
|Solid Balance Sheet Supported by Conservative Financial Policies and Risk Management|
Grupo Security maintains a strong balance sheet with a stable debt to equity ratio of 33% on average for the last 10 years. The company has been supported by a group of long-term shareholders, which hold 74% of the shares outstanding and have exhibited a strong commitment with eight capital increases totaling US$520 million over the past two decades. Banco Security maintains strong asset quality with risk levels consistently below industry average. As of June’16, the bank posted NPL and coverage ratios of 1.47% and 126% respectively, driven by tight credit standards and exposure to corporate and high-income clients.