Earnings Call: Q2 2026

Sep 1, 2026

Summary

H1 profit rose 44.7% to CLP 160 billion, with stronger banking, pensions and healthcare. Acquisition-led RedSalud growth and improved bank earnings were partly offset by weaker Confuturo investments and a one-time health-insurance charge.

Hello, everyone, and thank you for joining ILC's second quarter 2026 results conference call. With me today are Juan Pablo Undurraga, Chief Financial Officer, Ignacio González Recabarren, Chief of People, Sustainability and Corporate Affairs Officer, and Catalina Frías, Investor Relations Associate. Before we begin, I will invite everyone to download from our website the presentation prepared especially for this call. This document provides an overview of the key events and achievements of the period, as well as the financial performance and context of each of our businesses. Today's call will be divided into five sections. First, we will review the economic context for the period, followed by ILC's consolidated results for 2Q26. Next, we will analyze our subsidiaries' financial performance and key highlights for the period. After that, we will provide an update on our financial position. Finally, we will conclude with a Q&A section. Slide five presents the macroeconomic context for 2Q26 compared to 2Q25. Looking at the top left chart, the IPSA delivered 1.9% return in 2Q26 compared to 7.8% in the 2Q25. The S&P 500 posted a 14.9% variation in the quarter compared to 10.6% in the second quarter of 2025. While the Pension Fund C delivered a real return of 5.6% in 2Q26 compared to 4.7% in the same period last year. On the monetary policy front, as shown in the monetary policy rate chart, the central bank held the monetary policy rate at 4.5% throughout 2Q26, a level it has maintained following the easing cycle of 2025 with a basic scenario of stability for the remainder of the year. As shown in the bottom left chart, the quarterly CPI variation reached 1.4% in 2Q26 compared to no variation in 2Q25. The UF variation accumulated 2.5% in the quarter compared to 1% in the same period last year. Regarding the main events of 2026, the following milestones stand out. On January 21st, RedSalud completes the acquisition of Nuevo Sanatorio Alemán in Concepción, one of the leading hospital centers in southern Chile. The transaction price amounted to CLP 33.7 billion. Second, and in the same line, on April 5th, RedSalud's extraordinary shareholders' meeting approved a capital increase of CLP 30 billion aimed at financing the mentioned transaction and maintaining solid solvency ratios. Third, Confuturo was awarded five portion fraction of the contract, 13 of the disability and survivor insurance, covering the period between August 2026 and July 2027, with three fraction of men and two of women of offered rates of 1.76% and 1.39%. Fourth, on July 27, ILC's board of directors agreed to request RedSalud's board to call an extraordinary shareholders' meeting to approve a capital increase payable with the contribution of ILC's stake in Compañía de Seguros Vida Cámara. The transaction is part of the simplification of the group's corporate structure, and ILC will retain indirect control of Vida Cámara. Now, we turn to slide number eight. We highlight the results ILC achieved as of the end of the second quarter of 2026, driven by solid operational execution across our business line. On a cumulative basis, first half profit reached CLP 160 billion, a 44.7% increase compared to the CLP 114 billion recorded in the same period last year. This performance was driven by improved banking results, the contribution of the pension fund managers, and the expansion in the health sector. With these results, ILC achieved an ROE of 36.1% as of June 2026, up from 23.4% at the close of 2025. As shown in the historical chart, ILC maintained double-digit profitability over the years, demonstrating both steady growth and resilience across different market cycles. Regarding the quarter, during the second quarter of 2026, ILC recorded a consolidated profit of CLP 75.9 billion, compared to CLP 74.5 billion in 2Q25. Banco Internacional contribution increased by CLP 40.5 billion, explained by higher volumes of commercial and consumer loans, the greater contribution of its subsidiary, Autofin, and lower credit risk expenses. Confuturo for its part, contribution decreased by 17.6 billion, reaching 8 billion in the quarter, mainly explained by lower investment results in its portfolio. AFP Habitat contribution increased by 3.7 billion year-over-year, mainly due to higher level of service return and a higher average taxable income per contribution. AAISA contribution increased by 9 billion due to higher commission, better in-cash return at AFP Habitat Perú and Colfondos, and the positive contribution of Andina Vida. Ivis Seguros contribution increased by 4 billion, mainly explained by the performance of SIS contract number 8. In the healthcare provider segment, RedSalud recorded 1.3 billion increase in its contribution, supported by the consolidation of Sanatorio Alemán and by greater complexity in the services provided by the network. Consalud contribution decreased by 6.4 billion. The variation was mainly explained by the provision for the early payment of the liability arising from the Ley Corta for people over 70 years of age, which implied an after-tax charge of 7.9 billion, partially offset by lower medical costs with the period inflation and GES tariff and base price adjustments. Now we have reviewed ILC's performance, we will take a closer look at the performance of each of main subsidiaries. In this section, we will go division by division to better understand the key drivers behind each businesses, the challenges faced in the quarter, and the strategic progress achieved in line with our long-term plan. Now, I will turn the call over to Catalina, who will review the main operational events and key figures of ILC's financial subsidiaries. Thank you, Gustavo. Let us begin with Banco Internacional. As of June 2023, Banco Internacional's total loans portfolio grew by 9.6% year-over-year, reaching $5 billion US, positioning the bank above the industry, which expanded by just 4.8%. The commercial loan portfolio grew by 5.8%. Meanwhile, consumer loans increased by 28.8%, driven by the expansion of Autofin's portfolio, which grew 34.3% year-over-year. As a result, Banco Internacional market share increased in commercial loans from 2.9% to 3%, in consumer loans from 1.3% to 1.58%, and in mortgage loans from 0.15% to 0.22%. In terms of client growth, the bank continues to expand its footprint. Commercial clients increased by 5.5%, reaching close to 9,000 companies. In retail banking, it increased 22.5%, totaling more than 118,000 clients, including Banco Internacional and Autofin, of which 71,000 are also Autofin clients. With this, the bank has reached 127,000 total clients. On slide 13, we see that Banco Internacional has continued to consolidate its funding structure, reflecting a clear shift towards greater diversification and long-term stability. As of June, the bank's funding base continued to shift towards retail deposits, which now represent 68% of total deposits, with a 33% increase in retail balances. Looking ahead, we continue to see three main opportunities. First, scaling retail financing by improving client acquisition and retention. Second, expanding the corporate funding base. Third, developing digital financing products aligned with an efficient onboarding process. As shown on slide 14, Banco Internacional's gross operating results grew 22.6% year-over-year, reaching CLP 65.8 billion. This increase was supported by higher commercial and consumer loans volume and improved financial management, together with the better operational performance of Autofin, which contributed a CLP 3.8 billion improvement. Operating expenses increased 4.4%, reaching CLP 31.4 billion, mainly due to higher personal related expenses of CLP 2.5 billion, reflecting higher headcount and inflation adjustments. As a result, the efficiency ratio improved by 833 basis points year-over-year, reaching 47.8% compared to the 56.1% of the second quarter 2025. On slide 15, the data shows that credit risk provisions reached CLP 4.1 billion in second quarter 2026, a 66% decrease compared to the second quarter of the last year. This lower spend was primarily driven by lower provision in commercial loans and partially offset by the increase in Autofin provisions, resulting from the expansion of its portfolio. In terms of asset quality indicators, the non-performing loans ratio stood at 2.7% as of June 2026, representing nine basis point decrease compared to the same period of the last year. The risk index reached 1.8%, decreasing 17 basis points year-over-year. Meanwhile, the collateral coverage ratio reached 68.3% of total loans. Finally, Banco Internacional remains fully compliant with Basel III requirements, with a solvency ratio of 17.1 as of June 2026, a common equity tier one and capital adequacy ratios of 10.4% and 16.3% respectively. Slide 16 chart shows Banco Internacional's profit and ROE evolution. In the second quarter of 2026, the bank reported a net income of CLP 28.2 billion, compared to CLP 9.8 billion in the second quarter of 2025. Consequently, the bank reported a ROE of 17.3% and a return over average assets of 1.28% as of June 2026. Autofin accounted for 19% of Banco Internacional's quarterly earnings, reflecting its role within the bank consolidated results. Now, shifting to the annuity market, as shown in slide 18. In the second quarter of 2026, we continued to see strong demand for annuities. During the quarter, the average annuity sales rate stood at 2.85%, 36 basis points below the level recorded in the second quarter of the last year, compared to the programmed withdrawal rate of 3.31%, which decreased 23 basis points. This spread continued to favor annuities, an attractive retirement option. 68.6% of pension industry premium were direct to annuities during this quarter, and in the first half of 2026, annuity reached 66% share versus program withdrawals. Total annuity industry premiums reached $40.5 million in the quarter, a 15.8 real increase compared to the second quarter of the last year. Confuturo's annuity premium amounted $4.5 million, up 7.6% in real terms, with a market share of 11%, positioning the company fifth in the industry. We aligned our sales performance with investment opportunities and the generation of shareholding spread. Confuturo remains one of the leading players in the annuity market, supported by sustained demand and regulatory developments. On slide 19, we show the investment results of Confuturo's portfolio in the second quarter of 2026. Confuturo's proprietary portfolio delivered an investment result of CLP 96.6 billion in the second quarter of this year, 12.4% below the same quarter of the previous year. The decline was concentrated in investment funds, which contributed CLP 17.4 billion less than the second quarter 2025, mainly reflecting a weakness performance of local and international alternative funds. By asset class, real estate added CLP 13 billion to the results, partially offset declines of CLP 1.9 billion in equities, CLP 7.2 billion in derivatives and other investments. Investment income from funds also associated to Cuenta Única de Inversión increased by 37.9%. As a result, this is reversed in other income accounts, given the fiduciary nature of this fund. On slide 20, in the second quarter of 2026, Confuturo reported a net income of CLP 13.7 billion, compared to the CLP 28.9 billion reported in the second quarter 2025, a 52.8% decrease. On a cumulative basis, first half profit reached CLP 39.4 billion, 2.5% above the six months of the last year. The quarterly variation was mainly explained by lower investment results from the proprietary portfolio mentioned on the slide before. As of June 2026, Profuturo remains the third life insurance company in terms of number of pensioners and the fourth largest by AUM. The company is staying focused on its long-term investment strategy, especially by growing its portfolio of alternative assets, including real estate, to improve future returns and diversification. Moving now to AFP Habitat, as shown on slide 22. In the second quarter of 2026, revenues reached CLP 67.4 billion, a 4.2% increase compared to the second quarter of 2025. This growth was mainly supported by higher fee income from mandatory contributions, driven by a 7.9% increase in taxable income per contributor. As of June 2026, Habitat contributors had a taxable income 33% higher than the industry average, reinforcing the company's strong position in mid- to high-income segments. This was partially offset by a 6.5% decrease in the number of contributors year-over-year. Also, Habitat's G&A expenses increased 5.6%, reaching CLP 27.2 billion, and legal reserve returns reached CLP 34.2 million. That is 37.3% higher than the second quarter of 2025. This result was driven by a better performance of the funds, especially the ones that had greater exposure to equity. As shown on slide 23, both our international operations, Peru and Colombia, reported better results in the second quarter of this year, supported by growth in fee income, higher legal reserve returns, and the incorporation of the SIS insurance in Habitat Andina Vida. In Peru, revenues increased 18% year-over-year, reaching CLP 13.6 billion. Legal reserve returns improved, totaling CLP 6.5 million, compared to the CLP 2 billion of the second quarter of last year. At Colfondos in Colombia, revenues decreased 3.9% year-over-year, reaching CLP 21.9 billion. Legal reserve returns increased, reaching CLP 14.9 billion, compared to CLP 6.5 billion in the second quarter. Andina Vida contributed a profit of CLP 16.6 billion this quarter, compared to the CLP 2 billion in the last year, reflecting the incorporation of the SIS insurance business and a larger pensioner base, primarily from Colfondos. On slide 24, we show the evolution of profit before taxes and in cash for AFP Habitat and AAISA. AFP Habitat reported a quarterly profit of CLP 66 billion compared to the CLP 46 billion in the second quarter of 2025, a 19% increase, mainly explained by the higher legal reserve return. Excluding this effect, profit before taxes and legal reserve reached CLP 4.2 billion, as you can see in the second quarter of 2026, 55.2% above the same quarter in the previous year. AAISA posted a profit before taxes and legal reserve of CLP 22.6 billion, a 55.9% increase compared to the second quarter of 2025, and a net income of CLP 39.9 billion compared to the CLP 17.5 billion in the second quarter of 2025. This result was primarily explained by higher revenues in AFP Habitat Perú, better in-cash returns at AAISA Perú and Colfondos, together with the contribution of Andina Vida. Now, I will turn the call over to Gustavo, who will review the main operational events and key figures of ILC Health Solutions. Thank you, Catalina. Moving now to the Health segment. Slide 26 shows RedSalud activity indicators. It is important to note here that at the beginning of 2026, the company completed the acquisition of Sanatorio Alemán, expanding the network coverage to a catchment area of 2 million people. This transaction adds more than 150 beds and 135 outpatient consulting rooms and recorded cumulative revenues of CLP 24 billion for the period. In the second quarter of 2026, RedSalud's revenues reached CLP 251 billion, a 19% increase compared to the same period of the last year. Growth was mainly driven by the incorporation of Sanatorio Alemán and by improved performance in the inpatient, outpatient, and dental center areas across the rest of the network. Excluding Sanatorio Alemán, hospital revenues grew 8%, outpatient 7%, and dental centers 4.9%. Inpatient care revenue growth was mainly driven by greater activity in operating rooms, hospitalization, and the critical patient unit, where the occupancy across the network reached 78.4%, up from 76.3%, reflecting a more complex case mix. Outpatient revenues grew 7.1%, driven by greater activity in imaging and procedures, which increased 7% and 12%. On a consolidated basis, including Sanatorio Alemán, revenues in metropolitan region, regional hospitals, and outpatient and dental centers grew 8.2%, 52.4%, and 10.9%. During the quarter, the public insurer FONASA accounted for 49.9% of sales, while ISAPRE represented 30.4%. Now, if we move to slide 37, RedSalud's EBITDA margin reached 11.6% during the quarter, compared to 12.9% recorded in the same quarter of the previous year. This variation was mainly explained by the higher receivable impairment, mainly in the metropolitan region, higher personal expenses, and lower activity at the regional clinics, especially at Clínica RedSalud Elqui. This was mainly offset by the consolidation of Sanatorio Alemán and the greater complexity in the services provided by the network, reflecting a higher demand for operating room and critical patient unit services. Cost of sales increased 20.7% compared to the same period last year. When we exclude Sanatorio Alemán, the cost-to-revenues ratio reached 75%, compared to 74.2% in the same quarter previous year, primarily explained by clinical material costs, in line with a revenue mix more oriented towards the inpatient segment. On slide 28, we can see RedSalud's EBITDA evolution over the last eight years. We can see RedSalud's consolidated EBITDA reached CLP 29.2 million in 2Q 2026, a 7.3% increase compared to 2Q 2025, with an EBITDA margin of 11.6% compared to 12.9% in the same quarter last year. When we analyze by business unit, EBITDA increased by CLP 230 million in metropolitan region hospital, reaching a margin of 12.5% compared to 13.8% in 2Q 2025. Regional hospitals increased their EBITDA by CLP 775 million, with a margin of 7.6% compared to 10% in the 2Q 2025. Outpatient and dental centers EBITDA increased by CLP 693 million, reaching a margin of 17.3%, in line with the 17.6% recorded the same period last year. Now, if we move to the mandatory health insurance, the ISAPRE industry. This chart shows the evolution of inflows and outflows in the ISAPRE industry. Regarding the ISAPRE industry, we have seen that the implementation of the ISAPRE short law has restored legal certainty to the system. This, together with lower medical leave costs, has reactivated sales across the industry. Over the last few months, we have once again recorded positive sales, with the net balance between inflows and outflows returning to a positive territory. Slide number 30 illustrates how RedSalud has consolidated the recovery observed since the implementation of the Ley Corta. Lower medical leave costs also contributed to the quarterly results, with the number of medical leaves decreasing 22.7%. This decline was mainly driven by a lower volume of licenses related to mental health and respiratory conditions, which translated into a lower cost of CLP 10.6 billion. The loss ratio stood at 81.8% in the second quarter of 2026, 56 basis points higher than 2Q 2025. Revenues increased 3.9%, reaching CLP 196.1 billion, explained by the inflation effect and the GES and base price tariff adjustments. This was partially offset by a 3.1% decrease in beneficiaries. RedSalud recorded a net income of CLP 3.3 billion during the quarter, compared to CLP 9.7 billion in the same quarter previous year. It was mainly due to the provision for the early payment of the late portal liability for people over 70 years of age. Which implied an after-tax charge of CLP 7.9 billion. When we see the gray bars, our recurring results have followed a stable trend, reaching CLP 11.2 billion during the quarter, compared to CLP 9.7 billion in 2Q 2025. Moving on to slide 31, we can see that Vida Cámara continues to expand its operation during the second quarter of 2026. Total beneficiaries reached 665,000, up 2.3 years year-over-year. Individual health insurance beneficiaries grew 51%, reaching 63,000 people, supported by policies associated with preferred provider agreements with RedSalud. This growth translated into higher premium income, which reached CLP 36.9 billion, 10.5% above 2Q 2025. Claims costs increased by 3.2%, mainly driven by higher inpatient coverage in group health insurance. While the loss ratio reached 74.8% in 2Q 2026, compared to 80.1% in 2Q 2025. As a result, Vida Cámara recorded a profit of CLP 836 million, compared to a loss of CLP 684 million in the same quarter last year. Slide 33 shows ILC's well-managed maturity profile and liquidity position. As of June 2026, net financial debt at the individual level totaled CLP 434.8 billion, with a net financial debt to equity ratio of 0.31 times, compared to 0.33 times at the close of 2025. Liquidity at ILC's individual level stood at CLP 119.1 billion, composed mainly of cash and equivalents and an investment portfolio of liquid assets. To sum up, turning to slide 35, I would like to highlight the key advances towards our strategic goals. First, at Banco Internacional, we continue expanding our client base, reaching 127,000 clients as of June 2026, delivering 9.6% loan growth above the industry's 4.8%. In Confuturo, we maintain the position in the annuity market, supported by the efficiency and value creation, achieving an 11.9% market share in the quarter with 49.5% of its premium originating through the own channel, well above the industry average. AFP Habitat remains focused on the mid to high-income segment, while continuing its preparation for the regulatory changes and the focus on efficiency. In the healthcare business, RedSalud reinforced its leadership in private coverage, increasing high complexity services. EBITDA reached CLP 29 billion with 11.6% margin during the quarter, while Vida Cámara's individual health insurance grew 51% year-over-year, reaching 63,000 beneficiaries. On the regulatory front, implementation of the ISAPRE short law, together with lower costs from medical leave, has contributed to steadying the health insurance system with positive effects at Consalud, which reached a first half profit of CLP 18.9 billion. Finally, at ILC consolidated levels, we closed the first half of 2026 with record results, reflecting the strong performance across all the companies that are part of the group. These results also set a demanding standard going forward, being able to sustain this level of performance over time. To that end, we will remain focused on consolidation of our operation and moving ahead with long-term view. One that allows us to keep advancing projects and investments that generate social and economic value for our beneficiaries, clients, and shareholders. This concludes today's presentation. We will now open the floor for questions. If you have a question, you can raise your hand or send it directly for the email box. I have a question from Daniel Ballenas from Moneda. Go ahead, Daniel. Morning, Gustavo. Do you hear me well? Yes. Super well. Thanks for taking my question. Briefly, could you please update us? How is the regulatory environment in Colombia? We saw very strong results in your business there, the AAISA, Andina Vida. Trying to understand if there are any updates on that with Andina Vida. Are you more isolated now from the regulatory standpoint? Daniel, regarding the regulatory framework in Colombia and Andina Vida, what we see right now is that the reform is still under review. Some of the review will pass in the Congress, but it is expected to be implemented on April of 2027. In this scenario, the results of Andina Vida came from the disability and survivor insurance that started this year. It is a new business, and the company is prepared to the new regulatory framework. What we see from the future is that the company will continue with these results, but it is probably that the reform will be discussed in the future. There is a lot of reviews in the constitutional court that are not addressed right now, and will be addressed probably in 2027. The reform will be reviewed and also the new government probably will include some changes in the reform or will include some terms that to be discussed in the Congress related to the reform. In the coming years, the reform will be part of the discussion in the Congress, and we expect to see what happens. Regarding 2027, probably the result of the company will be in line with what we have seen right now. Thank you, Gonzalo. I don't see another question. If there's no more questions, that's all for today. If you have any further questions, please feel free to contact our investor relations team. Thank you for joining this conference call, and we hope to see you next.