Earnings Call: Q1 2026

May 27, 2026

Summary

Q1 profit rose 125% YoY to CLP 89.1 billion, with stronger banking, investment and healthcare results. RedSalud’s acquisition expanded its network, while debt-to-equity stood at 0.31x.

Hello, everyone, and thank you for joining ILC's first quarter 2026 results conference call. Joining me today are Juan Pablo Undurraga, CFO of ILC, and Catalina Arias, Investor Relations. Before we begin, I will invite everyone to download from our website the presentation prepared especially for this call. The document provides an overview of the key events and achievements of the period, as well of 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 the first quarter of 2026. Next, we will analyze our subsidiaries' financial performance and highlights for the period. After that, we will provide an update on our financial position. Finally, we will conclude with a Q&A section. Let's start. First, if you go to slide number five, it presents the macroeconomic context for the first quarter of 2026 compared to the first quarter of 2025. Looking at the top left chart, the IPSA delivered a 1.5% return in this quarter, below the 14% gain recorded the same quarter last year, reflecting a context of greater global volatility. The S&P 500 posted a 5.3% decline this quarter compared to a 4.6% drop in the first quarter of 2025. While Pension Fund C, which is a proxy of legal reserve returns in Habitat, closed the quarter flat at 0.2%, down from 2.3% in the same period last year. On the monetary policy front, as shown in the monetary policy rate chart, the Banco Central de Chile held the monetary policy rate at 4.5% throughout the first quarter 2026, following the rate cut cycle carried out during 2025. As shown in the bottom left chart, quarterly CPI variation reached 1.4% in the first quarter 2026, down from 2% in the first quarter 2025. While the UF variation accumulated 0.3% in the quarter, compared to 1.2% in the same period last year. Now moving to slide number seven. Regarding the main events of this period, three milestones stand out. First, in January of this year, RedSalud completed the acquisition of Nuevo Sanatorio Alemán, marking an expansion of our healthcare network. This transaction increases our regional footprint and reinforces our commitment to providing comprehensive healthcare coverage across the country. Second, in April 2026, RedSalud carried out a capital increase, strengthening its financial structure to support the integration of Nuevo Sanatorio Alemán and the network growth plan. Third, also in April, ILC held its annual ordinary shareholders' meeting, where the board of directors was renewed and a dividend of CLP 860 per share was approved, which will be distributed tomorrow, May 28th. ILC stock has continued to deliver strong results, outperforming the IPSA in both 2025 and year-to-date 2026. Our shares delivered a 139% return in 2025, compared to the IPSA's 55% gain over the same period. So far in 2026, ILC shares have accumulated an 18% return year-to-date, with a dividend yield of 4.7%, compared to a total return of 2.5% for the IPSA. Turning to slide number nine, we highlight the strong results ILC achieved in the first quarter of 2026, driven by solid operational execution across all our subsidiaries. ILC closed first quarter 2026 with a profit of CLP 89.1 billion, representing a 125% increase compared to the same period last year. This stronger performance was driven by improved banking results, Confuturo's solid performance, and expansion in the health sector. With these results, ILC achieved an ROE of 33.4%. As shown in this vertical chart, ILC has maintained double digits for ROE over the past years, demonstrating both steady growth and resilience across different market cycles. During the first quarter of 2026, ILC reported a consolidated profit of CLP 89.1 billion, compared to CLP 39.6 billion in the first quarter of 2025. All subsidiaries within the portfolio recorded an increase in their operational results during the period. Confuturo contribution increased by CLP 17.6 billion, mainly explained by stronger performance of its investment portfolio. AFP Habitat's contribution increased to CLP 0.5 billion quarter-over-quarter, mainly due to a weaker performance of its legal reserve result. AFP Habitat results increased due to a higher commission revenue and cash return at AFP Habitat Peru and Colfondos, and a positive contribution of Andina Vida. Seguros reflects the award of two franchises under the SIS contract. In the healthcare provider segment, RedSalud recorded a CLP 3.1 billion increase in profit, a result linked to the inpatient activity levels during the quarter and the consolidation of Nuevo Sanatorio Alemán. Consalud, for its part, reported a CLP 9.2 billion increase. This variation was due to two factors, a reduction in the loss ratio following a decrease in medical leave costs and fee adjustments such as IPC variation and IPC streaming. Now I will turn the call over to Catalina Arias, who will review the main operational events and the key figures of ILC's financial figures. Thank you, Paul. Now that we have reviewed ILC consolidated 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 business, the challenges faced in the quarter, and the strategic progress achieved in line with our long-term plan. Let's begin with Banco Internacional. Moving to slide 13. As of March 2026, Banco Internacional loans portfolio grew by 8.7% year-over-year, positioning the bank well above the industry, which expanded by just 4%. The commercial loan portfolio grew by 5%. Meanwhile, consumer loan increased by 29%, driven by the expansion of Autofin's portfolio. As a result, Banco Internacional market share increased in, first, commercial loans from 2.8% to 2.9%, consumer loans from 1.3% to 1.5%, and mortgage loans from 0.15% to 0.21%. In terms of client growth, the bank continued to expand its footprint. Commercial clients increased by 7.9%, reaching over 8,900 companies, and retail clients increased by 25%, totaling more than 116,000 clients, including Banco Internacional and Autofin. With this, the bank has reached 124,000 clients in total. Looking ahead, Banco Internacional remains focused on, first of all, expanding its presence in large corporate segments. Second, consolidation of the retail banking and auto finance segments. In third place, diversifying both its product offerings and funding sources. In this line, as shown in slide 14, Banco Internacional has continued to consolidate its funding structure, reflecting a clear shift towards greater diversification and long-term stability. As of March 2026, the bank's funding base showed an increased reliance on retail time deposits, which now represents 25% of total funding. At the same time, the share of bank funding declined from 11% to 6%, reducing the dependence on short-term sources. Looking ahead, we continue to see three main opportunities on this area. First of all, 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. On slide 15, Banco Internacional's gross operating results grew 3.6% year-over-year, reaching 59.2 billion Chilean pesos. This increase was supported by higher loan volumes and the contribution from Autofin, partially offset by lower spreads. Operating expenses increased 6.8%, mainly due to the higher personnel-related expenses and inflation adjustments. As a result, the efficiency ratio increased by 162 basis points year-over-year, reaching 52.9%. Banco Internacional remains focused on sustaining profitable growth by expanding the loan portfolio while continuing to manage costs and integration efforts with Autofin. If we go to slide 16, the data shows that the total risk expense decreased from 21.7% in the first quarter of 2023 compared to the first quarter of 2025. This lower expense was partially driven by the lower provisions of commercial loans, partially offset by the increase of Autofin's provisions, resulting from the expansion of Autofin's portfolio. In terms of asset quality indicators, the non-performing loans ratio stood at 2.7% as of March 2026, representing a 101 basis point decrease compared to the same period of the previous year, and the risk index reached 1.9%, decreasing 18 basis points year-over-year. Meanwhile, the collateral coverage ratio increased from 66.8% to 67.0% of total loans. Finally, Banco Internacional remains fully compliant with Basel III requirements, with a solvency of 17.0% as of February 2026. On slide 17, chart shows Banco Internacional profit and ROE evolution. In the first quarter of 2026, the bank recorded a net income of 16.6 billion CLP compared to 12.8 billion CLP in the first quarter of 2025. That's why the bank reported a return on average equity of 13.4% for the last 12 months on March 2026. Autofin accounted for 24.5% of Banco Internacional quarterly earnings, reflecting its role within the bank consolidated results. Now shifting to the annuity market, as shown on slide 19. In the first quarter of 2026, we continue to see a strong demand for annuities. During the quarter, the annuity rate stood at 2.82%, compared to the program withdrawal rate of 3.31%. This spread continues to favor annuity, an attractive retirement option. As a result, 66% of the pensioners choose annuity, while 34% opted to the program withdrawal. Total industry premiums reached 38 million USD, increasing 32% year-over-year, and Confuturo's premium amounts 4.5 million USD, with a market share of 12%. We align our sales performance with the investment opportunities and the generation of shareholder spread. That's why Confuturo remains one of the leader players in the annuity market, supported by sustained demand and regulatory development. If we go to slide 20, highlights Confuturo focus on strengthening in its direct channels and maintaining strict cost efficiency. In the first quarter of 2026, 41% of the life annuity premiums came from direct channels, above the industry average, that is 35%. On the cost side, SG&A expenses reached 10.8 billion Chilean pesos, increasing 18.7% compared to the first quarter of 2026, mainly due to the higher personnel and IT-related costs. Annualized administrative expenses over AUM reached 0.39%, compared to the 0.36% recorded in the same quarter of 2025. On slide 21, we show the investment results of Confuturo portfolio in the first quarter of 2026. The investment results of Confuturo portfolio in the first quarter 2026 totals CLP 111 billion, representing an increase of 25.9% year-over-year. This strong performance was mainly explained by higher returns in local fixed income, which contributed CLP 10.2 billion, and investment funds, which added CLP 17.9 billion, primarily due to the revaluation of local alternative bonds. In addition, equity decreased CLP 4.5 billion and real estate portfolio increased its contribution in CLP 1.9 billion. We go to slide 22. In the first quarter of 2026, Confuturo reported a net income of CLP 25.7 billion compared to the CLP 9.5 billion recorded in the first quarter of the last year, representing a 169% of increase. This better result was mainly driven by higher investment income. As of March 2026, Confuturo achieved a ROE of 21.5%. 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. Now, I will turn the call over to Gustavo again, who will review the main operational events and key figures of ILC Pension and Health subsidiaries. Thank you, Catalina. Moving now to AFP Habitat, as shown in slide 24. In the first quarter of 2026, revenues reached CLP 68.2 billion, a 3% increase compared to the same quarter last year. This growth was mainly supported by higher fee income from mandatory contributions, driven by a 6.8% increase in the average taxable income per contribution. As of March 2026, Habitat contributors had an average taxable income 24% higher than the industry average, reinforcing the company's strong positioning in the middle to high-income segment. This was partially offset by a 3.7% decrease in the number of contributors year-on-year. Legal reserve returns reached CLP 1.4 billion, compared to CLP 9.1 billion gain in the first quarter 2025. This result was mainly due to the weaker performance of the funds with greater exposure to fixed income and local investments, Funds C, D, and E, which were benefited during the first quarter of the last year. As shown in slide 25, both our international operations in Peru and Colombia reported higher revenues in the first quarter of 2026, supported by growth in fees income and the incorporation of the D&S insurance in Habitat Vida. In Peru, revenues increased 18% quarter-over-quarter, reaching CLP 11.8 billion, and legal reserve returns improved, totaling CLP 2.9 billion. At Colfondos in Colombia, revenues decreased 5% quarter-over-quarter, reaching CLP 20.7 billion. Legal reserve returns increased, reaching CLP 0.9 billion gain compared to CLP 0.3 billion loss in the first quarter last year. It is worth noting that Habitat Vida contributed CLP 10 billion this quarter, reflecting the incorporation of the D&S insurance business and the larger pension base, primarily from Colfondos. In this slide, we show the evolution of profit before taxes and encaje for both AFP Habitat and Aisa. Results in AFP Habitat were mainly explained by lower legal reserve returns, reflecting the global volatility during the first quarter of 2026. Excluding this effect, in the first quarter of 2026, AFP Habitat reported a profit before taxes and legal reserves of CLP 42.3 billion, 18.5% higher compared to the first quarter of 2025. Habitat's quarterly increase was driven by lower SG&A during the quarter. Aisa posted a profit before taxes and legal reserves of CLP 21.1 billion, a 100% increase compared to the same quarter last year. This result was primarily explained by higher revenues in AFP Habitat Peru, together with the contribution of Habitat Vida, the new insurance company. Moving to the health segment, slide 28 shows RedSalud activity indicators. It is important to note that at the beginning of 2026, the company completed the acquisition of Nuevo Sanatorio Alemán, expanding the network coverage to a catchment area of 2 million people. This transaction was again consolidated at the beginning of 2026 at 152 beds and 135 outpatient consulting rooms, and contributed 9% of both revenue and EBITDA for the healthcare network during the quarter. In the first quarter of 2026, RedSalud's revenues reached CLP 242 million, a 25% increase compared to the same period last year. Growth was driven by the incorporation of Nuevo Sanatorio Alemán, which recorded a cumulative revenues of CLP 22 million and by a broad base with inpatient, outpatient, and digital services rising 16.9%, 10.8%, and 7%. In the patient, inpatient care revenue growth was mainly driven by higher income from surgical procedures, critical care units, and hospitalization. The number of surgeries increased 2.4% quarter-over-quarter, while occupancy across the network rose 79% compared to 74% in the first quarter of 2025, reflecting a more complex case mix. Outpatient revenues grew 10.8%, supported by higher activity in laboratory services, imaging, and medical consultation, as well as continued expansion of clinics and medical centers. Dental revenues increased 7%, boosted by higher demand. Moving to slide 29, RedSalud's EBITDA margin reached 12.2% in the first quarter of 2026, expanding 10 basis points compared to 12.1% recorded in the same quarter last year. This improvement was primarily driven by more complex patient mix, reflecting higher demand for operation room and critical patient units, together with positive contribution from medical fees, personnel, and G&A, and lower impairments. These effects were partially offset by higher clinical material costs, which reduced the margin by 1.7%, also reflecting the shift towards more complex services. On slide number 30, we can see that RedSalud EBITDA grew across all segments of the network. Consolidated EBITDA reached CLP 39.5 billion in first quarter 2026, a 36% increase compared to last year, with an EBITDA margin of 12.2%, up from 12.1%. This growth was mainly driven by greater complexity in services provided by the network, reflected in higher demand for operating room and critical patient units. Sanatorio Alemán also contributed an EBITDA of CLP 2.7 billion during the quarter. By business unit, EBITDA increased by CLP 2.2 billion, and metropolitan region hospital reached a margin of 12.4%, up from 9.9% in the same quarter last year. Regional hospital showed strong expansion, together with the consolidation of Nuevo Sanatorio Alemán, with an increase of CLP 5.2 million and a margin of 9.6% compared to CLP 5.1 billion in the first quarter of 2025. Outpatient and other centers' EBITDA increased by CLP 1.1 billion, reaching a margin of 20.6%, in line with the 17.7% recorded the same quarter last year. Slide 32 illustrated how Consalud has consolidated the recovery observed since the implementation of the Isapres Short Law. Lower medical leave costs also contributed to the quarterly results, with the number of medical leaves decreasing by 22%. This decline was primarily driven by a lower frequency of leaves related to mental health and respiratory conditions. Against this backdrop, the loss ratio stood at 79.1% in the first quarter of 2026, down from 88.1% in 1Q 2025, extending the improving trend and pointing a more balanced outlook for Consalud. As shown by the gray bars, our recurring results have followed a stable trend. Together, these factors have not only enabled full compliance with the payment plan mandated by the regulation, but also helped stabilize the sub-results. Regarding Vida Cámara, Vida Cámara continued to expand its operation during the first quarter of 2026. The number of beneficiaries reached 659,000 beneficiaries, up 4.3% year-over-year. We grew across both group and individual health insurance. Individual insurance grew by 54%, supported by policies associated with preferred provider agreements with RedSalud. This growth translated into higher premium collection in both health and life insurance. Claim costs increased by 9.5%, mainly driven by higher inpatient coverage in group health insurance. Loss ratio hit 74% in the first quarter of 2026, compared to 72% the same quarter last year. Now, moving to slide 35, which shows ILC's well-managed debt maturity profile and liquidity position. As of March 2026, net financial debt totaled CLP 411.4 billion, with a net financial debt to equity ratio of 0.31 times. Liquidity stood at CLP 178.4 billion, composed mainly of cash equivalents and investment portfolio of liquid assets. Now to sum up and open the room for questions. If we go to slide 37, I would like to highlight the key advances towards our strategy goals. At Banco Internacional, we continue expanding our client base, reaching 124,000 clients as of March 2026 and delivering 8.7% loan growth above the industry 4%. Confuturo maintains its strong position in the annuity market, supported by higher spread efficiency and value creation, achieving 12% market share in the quarter and a strong financial performance in its investment portfolio. Habitat remains focused on the mid to high-income segment, while continuing its preparation for regulatory changes and focus on efficiency. In the healthcare business, Consalud reinforced its leadership in private coverage, strengthening high-complexity services. EBITDA reached CLP 27 billion with a 4% margin during the quarter, while the accounts individual health insurance grew 54% year-on-year, reaching 59,000 beneficiaries. Now, the implementation of the Isapres Short Law, together with lower costs from medical leaves, has contributed to stabilizing the health insurance system with positive effects at Consalud. Finally, at ILC level, we remain fully committed to our purpose of creating social and economic value. We achieved a quarterly profit of CLP 89 billion in the first quarter of 2026, supported by operational progress across all our businesses. This concludes today's presentation. We will now open the floor for questions. There is a question from Ewald Stark. Ewald, I will allow him to speak. Hi. Thanks for taking my question, Gustavo and Juan Pablo, and congratulations on the results. I have a question regarding Habitat Vida. Revenues have multiplied by almost 10x. I would want to understand better how sustainable are they, given that an important part of this growth is explained by you guys aggregating a contract on disability and survivor insurance contract. How can we forecast those revenues going forward for the company? Thanks. Ewald, regarding Habitat, you have two effects during the period. One is the one that you mentioned, that is this contract that is an annual contract, and this is the insurance coming from Colfondos. This revenue is difficult to forecast because there are some laws in the market of Colombia being analyzing. Depending on this market change, the profits coming from this insurance can continue depending on future. Sorry? Outlook. Yeah. This is something that you can see during this year, and depending on the market conditions of this loss, you can see a new approach probably next year. It is something that is on review. The other explanation of the result comes from the annuity business of Andina Vida. The first part of 2025, these results were very reduced because the company started on January 2025. Annuity business started very low during the first quarter of 2025, and year-to-year, you can see that is a more recurrent business that explain about 40% of the increase of the period. Thank you, Juan Pablo. A question about the Sanatorio Alemán acquisition and integration. What we are expecting timeline for full integration, and how this first quarter results are impacted by integration. Regarding Sanatorio Alemán, as we exposed during the presentation, the results represent about 10% of the results of RedSalud during the period. The performance that we have seen during this quarter match with the performance that we expected. During the year, we probably will increase the knowledge of this hospital, but also started including some. The way that RedSalud do business in its network. We are comfortable with the result this quarter, and expect that it will continue during the year. Thank you, Juan Pablo. 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 time.