Credicorp Ltd. · NYSE:BAP
Credicorp — Q2 2024 Earnings Presentation
23 slides from Credicorp's earnings presentation, Aug 9, 2024
Slide 1: Earnings Conference Call August 2024
Earnings Conference Call August 2024
Slide 2: Safe Harbor
2Q24 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
Slide 3: Sound 2Q24 Amid a Better Economic Environment
2Q24 Earnings Conference Call Sound 2Q24 Amid a Better Economic Environment Core Income + Insurance Sound Results on the Back of Strong ROE 1 and Diversified Revenue Streams 16.2% +10.2% vs 2Q23 Resilient Risk-Adjusted Margins, Risk Adj. NIM MS of Low-Cost Deposits1 2 Supported by Leadership in Low-
Slide 4: Ongoing Investment to Transform Our Core Businesses
2Q24 Earnings Conference Call Ongoing Investment to Transform Our Core Businesses To Become #1 in Efficiency and Experience to Deliver Sustainable Growth At BCP We Invest in… To achieve… World-class Sustainable Efficiency Experience Growth (Variations vs. 2022)1 (Variations vs. 2019) (Variations vs.
Slide 5: Key Financial Highlights
2Q24 Earnings Conference Call 2Q24 Key Financial Highlights 1 2 3 4 Improved Volume Dynamics Strong Core Income Managing Asset Quality Diversified Business and Insurance and Solid Capital Base Total Loans1 NII CoR3 Earnings Contributions4 +2.9% +8.2% 3.0% 79.0% Universal Banking YoY YoY +81 YoY 14.9
Slide 6: Economic Recovery Gradually Gaining Traction
2Q24 Earnings Conference Call Economic Recovery Gradually Gaining Traction GDP and Payment Transactions with BCP Credit /Debit Card Terms of trade (y/y % change, as of July 15)1 (index 2007=100)2 130 120 25 Transactions / number of cards 11 110 GDP (RHS) 100 20 9 90 Non-primary GDP (RHS) 80 15 7 70
Slide 7: Latam Central Banks Cut Rates at a Slower Pace in 2Q24
2Q24 Earnings Conference Call Latam Central Banks Cut Rates at a Slower Pace in 2Q24 as Core Inflation Persists 2.5% 2.7% 3.0% 2.5% 1.8% 0.6% -0.6% 0.2% Expected Economic Growth 2023 2024 2023 2024 2023 2024 2023 2024 (YoY % change) 1 U.S. Colombia Peru Chile Inflation CPI Rates Central Bank Policy
Slide 8: Universal Banking: BCP Continued to Boost Profitability
2Q24 Earnings Conference Call Universal Banking: BCP Continued to Boost Profitability Amid an Economic Rebound, While Provisions Remain High Earnings Contribution BCP Stand-alone 76.9% BCP’s Drivers BCP Bolivia 2.1% (% change) QoQ YoY ROE1 Total (%, Annualized) +1.8% +0.6% Loans2 NII +1.9% +10.4% 24
Slide 9: Yape: Achieved Break Even in May
2Q24 Earnings Conference Call Yape: Achieved Break Even in May; Revenue Acceleration Supports High Monetization Potential Total Revenues Accelerate… …Surpassing Expenses Quarterly Total Revenue1, 2 Monthly Unitary Metrics1 (S/ million) (S/) Expenses/MAU Revenue/MAU Cash-cost/MAU 5.1 +1 .5x YoY 4.3 4
Slide 10: Microfinance: Mibanco's Recovery Taking Longer
2Q24 Earnings Conference Call Microfinance: Peruvian System Facing Persistent Credit Cycle Challenges; After Adjustments, Mibanco’s Recovery is Taking Longer to Materialize Than Anticipated Earnings Contribution Mibanco 2.3% Mibanco Peru Drivers Mibanco Colombia -0.5% (% change) QoQ YoY ROE1 (%, Ann
Slide 11: Insurance Business: Robust Results in Life Business
2Q24 Earnings Conference Call Insurance Business: Continued to Deliver Robust Results Underpinned by Strong Underlying Performance in the Life Business Earnings Contribution Grupo Pacifico 12.5% Grupo Pacifico's Drivers (% change) QoQ YoY Grupo Pacifico’s Insurance Service Results Insurance (S/ mill
Slide 12: IM & A: Favorable Business Dynamics
2Q24 Earnings Conference Call IM & A: Favorable Business Dynamics at Capital Markets, AM & WM Businesses Drove Profitability Recovery Earnings Contribution ASB & IM & Advisory Drivers Credicorp Capital 4.3% (in US$ millions) Jun 23 Jun 24 Variation ROE1 and Income by Business2 (%, S/ millions) WM 16
Slide 13: Favorable Balance Sheet and Pricing Dynamics
2Q24 Earnings Conference Call Favorable Balance Sheet and Pricing Dynamics Assets: Loans Resume Growth this Quarter while Yields Liabilities: Increased Low-Cost Deposits Remain Resilient in a Context of Decreasing Local Rates Drives Reduction in Funding Cost Interest Earning Asset (IEA) Structure Fu
Slide 14: Resilient Risk-Adjusted NIM Supported by Growth in NII
2Q24 Earnings Conference Call Resilient Risk-Adjusted NIM Supported by Growth in NII which, Alongside Fees and FX Transactions, Boosted Core Income Growth Resilient NIM and Risk-Adjusted NIM Core Income YoY Growth Driven Mainly Despite Decreasing Local Interest Rates by NII and Fee Income Core Incom
Slide 15: Isolating the Impact of El Niño Provision Reversals
2Q24 Earnings Conference Call Isolating the Impact of “El Niño” Provision Reversals, Provision Expense Slightly Increased QoQ Isolating the Impact of El Niño Provision Reversals in 1Q24, Isolating the Aforementioned Impact, the QoQ Increase the Provisions Expense Increased Slightly QoQ, Driven by Mi
Slide 16: Slight QoQ Increase in NPL Volumes via Mibanco
2Q24 Earnings Conference Call Slight QoQ Increase in NPL Volumes via Mibanco was Offset by Better Performance at BCP NPL Volumes Increased QoQ Mainly Driven by Mibanco. Key Drivers of QoQ NPL Volumes Dynamics At BCP, an Increase in NPLs at Individuals was Offset by a Contraction in SME-Pyme Mibanco:
Slide 17: Delivered Improved Efficiency Underpinned by Higher Core Income Growth
2Q24 Earnings Conference Call Delivered Improved Efficiency Underpinned by Higher Core Income Growth Operating Expenses Increased YTD Driven by Personnel Expenses, Improved Efficiency Ratio IT Expenses, Transactional Costs, and Disruption Reflecting Positive Operating Leverage Accumulated Operating
Slide 18: Net Income and ROE
2Q24 Earnings Conference Call Maintained Favorable Profitability, Mainly Supported by BCP and Pacifico Net Income and ROE (S/ millions, %) Annual Results1 First Half Results 17.0% 16.8% 15.8% 18.9% 17.2% 13.9% 1.4% ROE Net Income 2019 2020 2021 2022 2023 1H23 1H24 (1) 2022 and 2023 figures are expre
Slide 19: Our 2024 Guidance
2Q24 Earnings Conference Call Our 2024 Guidance 2024 Guidance 1H24 Results Revised 2024 Guidance (Updated 1Q24) Real GDP Growth around 3.0% +2.7% around 3.0% Total Loan Portfolio Growth1 3.0% - 5.0% -1.5% 1.0% – 3.0% Revised Net Interest Margin 6.0% – 6.4% 6.3% 6.0% – 6.4% Cost of Risk 2.0% - 2.5% 2
Slide 20: 2Q24 Closing Remarks
2Q24 Earnings Conference Call 1 3 ROE of 16.2% on strong core income, Peru’s economic and insurance results; which outlook is favorable, driven more than offset still high by low inflation, public provisions; on track investment, and robust to meet ~17% goal commodity prices for 2024 2 4 Digital adv
Slide 21: Earnings Conference Call
Earnings Conference Call August 2024
Slide 22: Analyzing Coverage Ratio Evolution: Example Wholesale vs. Consumer Segments
2Q24 Earnings Conference Call Appendix 1. Analyzing Coverage Ratio Evolution: Example Wholesale vs. Consumer Segments 22
Slide 23: Analyzing Coverage Ratio Evolution: Example Wholesale vs. Consumer Segments
2Q24 Earnings Conference Call 1. Analyzing Coverage Ratio Evolution: Example Wholesale vs. Consumer Segments Wholesale Portfolio Stage 3 is 80%1 Collateralized and Explains the Evolution of the NPL Coverage Ratio Structural NPL Composition by Product: High level of Wholesale NPL which represent 20%