Letter from the Chairman
As we celebrate our 25th anniversary, we continue to look towards the future with optimism. We start 2018 with a new organizational structure – Enterprises, Auto-Financing and Tanner Investments divisions – so that we can serve our customers with agility and customized solutions. Today we have a dedicated and committed team, which enabled us to achieve well-balanced loan book of Ch$ 961,131 million (~US$ 1,563 million) in 2017, with a 26% increase in Factoring and 25% increase in the Auto-Financing business.
In a year characterized by low economic growth driven by reduced investment and the deterioration of the country’s sovereign credit rating, not only did we manage to keep our international rating of “BBB-” ratified by the rating agencies – maintaining our investment grade – but we were also proud to achieve a profit of Ch$ 25,319 million (~US$ 41 million), increasing 13% compared to the previous year, and a return on equity of 9.7%, better than the 9.2% of the previous year.
We were also able to venture into the Swiss market for the second year in a row, placing a 3-year bond for 100 million Swiss francs (~US$ 100 million), with a spread of 178.8 basis points, almost 100 points lower than the spread obtained in 2016, mainly due to the increased participation of institutional investors. Meanwhile, we made a successful placement in the local market of UF 1.5 million (~US$ 65 million), with a 4-year term and 186-point spread, which is less than the 258 points of a similar bond issued in 2016, with Tanner Investments Division as the sole advisor and bookrunner.
The aforementioned was possible, in part, due to our commitment to continue to invest in our technological capabilities. We are committed in placing the customer at the forefront of our organization through the delivery of innovative solutions and our efforts to continually adapt to an ever-evolving market reality. In 2017, with that same intense desire, we focused on our core business, implementing a private customer site for Factoring, which, among other functionalities, enables invoices to be entered online with a 24/7 approval operation. We also implemented the commercial CRM, which provides complete business intelligence information for the commercial area. Meanwhile, we also developed a new integrated credit management system for the Auto-Financing Division and made available a private site to our customers which allows them to pay installments online and view their current debt conditions.
We continue to move forward, not only by improving the quality of our products by delivering a pleasant, agile experience to our customers, but also by maximizing the profitability of our business through a series of initiatives to boost the Company’s productivity. This allows us to develop the talent that ultimately defines Tanner as an organization, in a cultural environment where meritocracy prevails.
I would also like to highlight the work of our Board of Directors, which I currently lead, since our Board has been instrumental in Tanner’s accomplishments over the past 24 years and I am certain that it will continue to steer the Company towards the path of success. In particular, I would like to celebrate the Board’s constant focus on strengthening our corporate governance by always keeping in mind the five pillars that support the governance function: Profitability, Equity Protection, Transparency, Participation and Sustainability.
The future looks very promising for the achievement of our core objective to create value for our shareholders, creditors, customers, employees, investors and society.
Kind regards,
Ricardo MassuChairman of the Board