Slide 1: Earnings Conference Call August 2023
Earnings Conference Call August 2023
Slide 2: Safe Harbor
Earnings Conference Call Safe Harbor This material includes “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. All statements other than statements of historical fact are forward-looking and m
Slide 3: Powering Growth Through the Cycles
Earnings Conference Call Powering Growth Through the Cycles Decoupling Increasing from the focus on macro sustainability Strengthening our competitive moats 3
Slide 4: Financial Performance Reflects Progress on Strategy Despite the Challenging Context
Earnings Conference Call Financial Performance Reflects Progress on Strategy Despite the Challenging Context Net Income ROE 1 Favorable 2Q23 Financial Results 1 +22.6% 18.6% YoY MS of Low-Cost Strong Balance Sheet Ensures CET1 BCP 2 Continued Resilience 12.8% Deposits2 40.6% Strengthening Credit Ris
Slide 5: 2Q23 Key Financial Highlights
Earnings Conference Call 2Q23 Key Financial Highlights 1 2 3 4 Mixed Volume Dynamics Managing Asset Quality Managing Efficiency Diversified Portfolio and NII Growth and Solid Capital Base Structural Loans1 CoR Operating Expenses Earnings Contribution3 +5.5% 2.3% +9.1% 77.1% Universal Banking YoY +12
Slide 6: Amid Lower Inflation and Weak Economic Growth, EM Central Banks Consider Relaxing Monetary Policies
Earnings Conference Call Amid Lower Inflation and Weak Economic Growth, EM Central Banks Consider Relaxing Their Monetary Policies Expected Economic Growth in 2023 U.S. 1.8 Colombia 1.6 Peru 1.0 Chile 0.0 (YoY % change)1 Inflation CPI Rates Central Bank Policy Rates (% YoY as of Aug 10) 2 (%, as of
Slide 7: Core Income Drives Strong Profitability, While Loan Provisions Remain High in Universal Banking
Earnings Conference Call Core Income Drives Strong Profitability, While Loan Provisions Remain High in Universal Banking Earnings Contribution BCP Stand-alone 75.7% BCP’s drivers BCP Bolivia 1.4% (% change) QoQ YoY ROE1 Structural (%, Annualized) -1.0% +5.2% Loans2 24.2% NII +0.9% +29.6% 22.8% 20.7%
Slide 8: Yape's Growing Engagement With Its More Than 9MM Active Users
Earnings Conference Call Yape's Growing Engagement With Its More Than 9MM Active Users Drives Progress On Its Path Toward Break-Even More than 9MM of MAU Conduct an Average Revenue/MAU Getting Closer to Cash Cost/MAU of 23.5 Transactions per Month Figures in Millions Figures in Soles 6,7 12,3 12,6 5
Slide 9: Mibanco Peru's Results Reflect Modest Recovery Driven by Lower Provisions and Higher NII
Earnings Conference Call Mibanco Peru’s Results Reflect Modest Recovery Mainly Driven by Lower Provisions and Higher NII Earnings Contribution Mibanco 4.2% Mibanco Peru Drivers Mibanco Colombia -0.6% (% change) QoQ YoY ROE1 Structural (%, Annualized) +3.1% +11.7% Loans2 NII +4.6% +1.0% 20.8% 20.3% 9
Slide 10: Strong Boost in Profitability YoY as Pacifico Capitalized on Transitory Tailwinds
Earnings Conference Call Strong Boost in Profitability YoY as Pacifico Capitalized on Transitory Tailwinds in the Life Business Earnings Contribution Grupo Pacifico 13.3% Grupo Pacifico's drivers (% change) QoQ YoY Pacifico Stand-Alone’s Insurance Service Results Insurance (S/ millions, %) Underwrit
Slide 11: Non-Recurrent Income Drove QoQ Profitability Growth; WM&AM Remained Challenged
Earnings Conference Call Non-Recurrent Income Drove QoQ Profitability Growth; WM&AM Businesses Remained Challenged While Undergoing Restructuring Earnings Contribution ASB & IB & WM drivers Credicorp Capital 3.2% (in US$ millions) Jun 22 Jun 23 Variation ROE1 and Income by Business2 (%, S/ millions)
Slide 12: Structural Loans Grow While Low-Cost Deposits Decrease Amid Shift to Time Deposits
Earnings Conference Call Structural Loans Grow While Low-Cost Deposits Decrease Amid a System-wide Shift to Time Deposits Structural Loan YoY Growth Driven Primarily by Retail Banking at While System-wide Deposits Mix Shift to Time Continued, BCP and Mibanco We Remain Market Share Leaders in Low Cos
Slide 13: Core Income Growth is Driven Mainly by Net Interest Income and Fees
Earnings Conference Call Core Income Growth is Driven Mainly by Net Interest Income and Fees Core Income YoY Growth Driven by NII and Fees NII and NIM Increased YoY Reflecting Volume Dynamics, Repricing and Higher-Cost of Funding Core Income NIM and Risk Adjusted NIM (S/ millions) (%) 6.02% 5.84% +1
Slide 14: Structural NPL Portfolio Volumes Increased Amid Sluggish Internal Demand
Earnings Conference Call Structural NPL Portfolio Volumes Increased Amid Sluggish Internal Demand, High Inflation and High Interest Rates NPL Volumes Remain High as Refinancing Increased in Wholesale Key Drivers of QoQ NPL Volumes Dynamics and Tough Macro Backdrop Impacted Retail and Mibanco Structu
Slide 15: Provisions Remain High as Tough Macro Conditions in 1H Impacted Payment Behavior
Earnings Conference Call Provisions Remain High as Tough Macro Conditions in 1H Impacted Payment Behavior Across Retail Banking and Mibanco Higher Provisions in 2Q23 Due to Deterioration in Specific Retail High Levels of 2Q23 Provision Expenses Explained By: Portfolios and Challenging Macroeconomic
Slide 16: Efficiency Improvement Driven by Higher Operating Income at BCP and Pacifico
Earnings Conference Call Efficiency Improvement Driven by Higher Operating Income at BCP and Pacifico Operating Expense Increased on an Accumulated Basis Mainly BCP Registered Positive Operating Leverage while Mibanco was Driven by Expenses at BCP and Disruptive Initiatives Impacted by Decelerating
Slide 17: Net income and ROE
Earnings Conference Call Maintained Favorable Profitability, Mainly Supported by BCP and Pacifico Net income and ROE (S/ millions, %) IFRS17 Full Year Results (figures in IFRS4) ROE 2022: Accumulated Results (figures in IFRS17) 16.8% 18.9% 16.7% 17.0% 17.6% 13.9% 1.4% Net Income ROE 2019 2020 2021 2
Slide 18: 2023 Guidance Update
Earnings Conference Call 2023 Guidance Update 1H23 Results Previous 2023 Guidance Updated 2023 Guidance Real GDP Growth1 -0.5% 1.8% - 2.2% around 1.0% Structural Loan Portfolio Growth2 5.5% 6% - 10% 1.0% - 4.0% Net Interest Margin 6.0% 5.8% - 6.2% 5.8% - 6.2% Cost of Risk 2.1% 1.5% - 2.0% 2.1% - 2.5
Slide 19: Appendix
Earnings Conference Call August 2023
Slide 20: Appendix: Macro Backdrop, Coverage Ratio Evolution, IFRS17 Implementation
Earnings Conference Call Appendix 1. 2. 3. Macro Backdrop Analyzing Coverage Implementation Ratio Evolution: of IFRS17 - Restatement Example Wholesale of Figures and Ratios vs. Consumer Segments for FY2022. 20
Slide 21: Conditions remain supportive for Emerging Markets
Earnings Conference Call 1. Conditions remain supportive for Emerging Markets Portfolio Debt Flows EM ex-China Copper Price EM Exchange rate variation YTD (USD billion) (USD/lb, as of August 8) (%, as of August 8) Colombia 17,1 Mexico Poland Brazil 60 5,00 Hungary Mar-22: 4,84 Peru 50 4,80 3,0 Bulga
Slide 22: Regarding El Niño Costero Phenomenon, Uncertainty Remains
Earnings Conference Call 1. Regarding El Niño Costero Phenomenon, Uncertainty Remains NOAA: Sea surface temperature anomaly in the North-Centre Loses due to very strong (1983, 1998) and moderate Coast of Peru (change. ºC)1 "El Niño Costero" (2017) calculated by the BCRP and MEF (pp)2 5 1983 1998 201
Slide 23: Analyzing Coverage Ratio Evolution: Wholesale vs. Consumer Segments
Earnings Conference Call 2. Analyzing Coverage Ratio Evolution: Example Wholesale vs. Consumer Segments Wholesale NPL Portfolio 83%1 Collateralized Impacted Evolution of the Structural NPL Coverage Ratio High level of Wholesale NPL volumes driven by Refi- Structural NPL Composition by Product: nance
Slide 24: Introduction to the new standards IFRS17
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.1. Introduction to the new standards IFRS17 IFRS 17 was published in May 2017 as a replacement to IFRS4 “Insurance Contracts.” The aim of this change is to ensure that consistent measurement criteria
Slide 25: Recognition of Profit and Loss
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.3. Recognition of Profit and Loss The P & L under IFRS17 shows the difference between a company’s expected cash flows (valued in liabilities) and real flows that occur. Anticipated flows must be based
Slide 26: Valuation Methods and Impact on Equity Under IFRS17
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.4. Valuation Methods IFRS17 introduces different approaches to valuate underwriting provisions based on the product’s characteristics (contract duration, cash flow). General Method (GM) or Building Bl
Slide 27: Reformulation of Profit and Loss Statement at Grupo Pacifico for 2022
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.6. Reformulation of Profit and Loss Statement at Grupo Pacifico for the year 2022 Restatement of the Profit and Loss Statement (IFRS4 to IFRS17) Pacifico Grupo Asegurador (Figures for 2022) P & L Stat
Slide 28: Reformulation of Profit and Loss Statement at Credicorp for 2022
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.7. Reformulation of Profit and Loss Statement at Credicorp for the year 2022 Restatement of the Profit and Loss Statement (IFRS4 to IFRS17) Credicorp Ltd. (Figures for the 2022) P & L Statement - IFRS
Slide 29: Changes in Methodology: Net Interest Margin
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.8. Changes in the Methodology to Calculate Financial Indicators and their Reformulation for the year 2022 - Net Interest Margin Under IFRS17, we need to adjust the formula because Interest Expenses no
Slide 30: Changes in Methodology: Cost of Funding
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.8. Changes in the Methodology to Calculate Financial Indicators and their Reformulation for the year 2022 - Cost of Funding We are adjusting the formula given that, under IFRS17, Interest Expenses now
Slide 31: Changes in Methodology: Efficiency Ratio
Earnings Conference Call 3. Implementation of IFRS17 – Restatement of figures and ratios for 2022 1.8. Changes in the Methodology to Calculate Financial Indicators and their Reformulation for the year 2022 - Efficiency Ratio We are adjusting the formula for the efficiency ratio given that two compon