Credicorp Ltd. · NYSE:BAP
Credicorp — Q3 2020 Earnings Presentation
38 slides from Credicorp's earnings presentation, Nov 9, 2020
Slide 1: Earnings Conference Call 3Q/2020
Earnings Conference Call 3Q/2020
Slide 2: Agenda
1. COVID-19 Update 2. 3Q20 Results 3. Outlook 4. Key Takeaways 5. Appendix
Slide 3: COVID-19 Update
CREDICORP 1. COVID-19 Update
Slide 4: Economic Reactivation in Peru continues
Economic Reactivation in Peru continues Almost a “V” shaped recovery … Excess deaths between 2020 and 2019 in Peru and Seasonally-adjusted GDP Metropolitan Lima (weekly tally) (1) (4Q19 = 100)(2) Cement, Vehicles and Real Estate Payrolls through BCP (2019 = 100)(3) (% change YoY)(4) (1) Source: Sour
Slide 5: … and Macroeconomic Expectations Improve
… and Macroeconomic Expectations Improve Peru is expected to lead economic recovery in the region Economic Activity indicators in LatAm Consensus 2021 GDP expectations for Peru Expected GDP Growth (2019 = 100)(1) (% change)(2) (% change)(3) Brazil Mexico Chile Country 2020 2021E Colombia Peru Argent
Slide 6: The Peruvian Financial System…
The Peruvian Financial System… …evolves in line with economic recovery and with the boost from Government Programs, is expected to post the highest growth in the Region BCP Debit and Credit Card Transactions in 2020 (1) Business loans in September Loans to the private sector (Jan/11-Mar = 100) (% ch
Slide 7: Economic Reactivation is also evident at Credicorp
Economic Reactivation is also evident at Credicorp through stabilization in loan reprogramming, higher demand for products and an uptick in digital adoption Actively offered reprogramming facilities, and Demand for retail products has accelerated in Digital adoption continues to increase today the r
Slide 8: 3Q20 Results
CREDICORP 2. 3Q20 Results
Slide 9: Credicorp's Key Financial Highlights for 3Q20
Credicorp’s Key Financial Highlights for 3Q20 The worst is behind us and Credicorp is on the road to recovery. Important to note non-recurring events this quarter. S/136 bn S/2,162 m 3.84% Loan Net Interest Cost of Portfolio (1) Income Risk -3.3% YTD +349 bps YTD 2.6 QoQ +21.3% YoY +10.2% QoQ -5.0%
Slide 10: Universal Banking
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Slide 11: BCP's 3Q20 Loan Growth Driven by Reactiva; Funding Mix Optimized
BCP´s 3Q20 Loan Growth is Driven by Reactiva and the Funding Mix is Optimized Figures in S/ millions Loan Growth is mainly driven by Reactiva, while September Funding Structure is optimized through an improvement in the structural origination figures reflect an inflection point in recovery Deposit m
Slide 12: BCP Retail Banking On-time Payments Improve; Reprogrammed Portfolio Stabilizes
BCP Retail Banking´s On-time Payments on Loans Due Improve and the Reprogrammed Loan Portfolio Stabilizes Figures in S/ millions Payments on Structural Loans Due (1) Sub-Segments Payment Ratio (%, As of Sep-20) On-time Payments continue to improve, driven by SMEs that benefited from Reactiva and Ind
Slide 13: Lower Forward-Looking Provisions while Asset Quality Deteriorates
Improvement in Macroeconomic Expectations and Customer Behavior leads to a decrease Forward-Looking Provisions while Asset Quality Deteriorates Figures in S/ millions Retail Banking provision expenses decreased QoQ, while Structural Portfolio quality deteriorates, mainly driven by Wholesale Banking
Slide 14: As Sources of Income Start to Recover…
As Sources of Income Start to Recover… Figures in S/ millions NIM and Risk-Adjusted NIM (%) NIM is impacted by (i) Structural NIM decrease: Lower interest rates Active Investment Portfolio Management Funding Structure optimization (ii) Reactiva / Structural loan portfolio mix (iii) Extraordinary exp
Slide 15: Expenses are Controlled, Adjusted Efficiency Improves 100 bps QoQ
… and Expenses are Controlled, Adjusted Efficiency Improves 100 bps QoQ Expenses decrease faster than Adjusted Income While BCP continues its journey to become the most efficient Bank in Latam Efficiency and Operating Leverage (Quarterly) Cost-to-Income (C/I) Ratio (1st Semester 2020) (2) (1) Adjust
Slide 16: Microfinance
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Slide 17: Mibanco's 3Q20 Loan Growth Driven by Government Programs
Mibanco´s 3Q20 Loan Growth is Driven by Government Programs, while Funding Mix Improves Figures in S/ millions Loan Portfolio (Average daily balances) GP Loans Loan growth boosted by Reactiva; by the end of Structural (1) September, Mibanco had disbursed more than S/ 2.3 billion in GP loans YTD Fund
Slide 18: Positive Trends in Mibanco's On-time Payments and Reprogrammed Portfolio
Positive Trends in Mibanco´s On-time Payments and Reprogrammed Portfolio Figures in S/ millions Payments on Structural Loans Due (1) (2) On-time payments are trending upward, but some reprogramming facilities are still needed Overdue Portfolio is reduced from 9% to 4% and the High Uncertainty Portfo
Slide 19: Mibanco's Provisions are Still Impacted by COVID-19
Mibanco´s Provisions are Still Impacted by COVID-19 Figures in S/ millions Asset Quality Ratios (%) Forward looking provision expenses 180% 206% NPL Coverage 139% drive NPL Coverage to a record high (1) (2) NPL impacted by refinancing and by delinquency in clients that did not take a facility (1) Co
Slide 20: Mibanco's 3Q20 NIM Impacted; Expense Control Measures Underway
Mibanco´s 3Q20 NIM is Impacted by Different Factors, while Expense Control Measures are Underway Figures in percentages NIM and Risk-Adjusted NIM NIM is impacted by (i) Structural NIM decrease: (1) Accrued interest reversals due to delinquency Improved Funding Structure (ii) GP / Structural loan por
Slide 21: Insurance & Pension Funds
Insurance & Pension Funds
Slide 22: Insurance Results Decrease due to Higher Net Claims in Life
Insurance Results Decrease this Quarter due to higher Net Claims in the Life Insurance Business Figures in S/ millions Higher net claims in the Life Business led to negative results Higher net claims due to higher provisions at Pacifico this quarter but claims were down in P&C, (COVID-19 IBNR) and a
Slide 23: In Pensions, Lower Reserve Fund Profitability Offset by Higher Fees
In Pensions, Lower Reserve Fund Profitability is Partially offset by Higher Fees this Quarter, as Contribution Exemptions Expired Total AuMs of the Private Pension Fund On a YoY basis, Income was impacted by lower System remained stable QoQ employment due to the pandemic Prima AFP - Total AuMs (S/ b
Slide 24: Investment Banking & Wealth Management
Investment Banking & Wealth Management
Slide 25: IB & WM's AuMs Fully Recovered; Recurring Income Grows 13%
IB & WM's AuMs have fully Recovered and Recurring Income Grows 13%, while Results are Hit by Non-Recurring Events in 3Q20 Figures in S/ millions AuMs increased QoQ, fully bridging the gap produced by Recurring Contribution recovered to pre-pandemic levels, COVID-19’s impact while non-recurring charg
Slide 26: Consolidated Performance
Consolidated Performance 26
Slide 27: Asset Growth Driven by GP Loans and Investments
Credicorp´s Asset Growth in 3Q20 was Driven by GP Loans and Investments, while Funding Mix was Optimized Figures in S/ millions Interest Earning Assets (IEA) are driven by GP Loans and Funding was optimized through growth in low-cost an actively managed Investment Portfolio deposits, repayment of de
Slide 28: Cost of Risk Improved 4pp QoQ; NIM Still Impacted
Cost of Risk Improved 4pp QoQ but Remains Above Pre-COVID-19 Levels, while NIM is Still Impacted by Several Factors Figures in percentages Cost of Risk Evolution Forward-looking provisions dropped, while asset quality ratios deteriorated as facilities expired. NIM is impacted by: Lower structural NI
Slide 29: Non-Financial Income Boosted by Fee Recovery; Efficiency Impacted
Non-Financial Income was Boosted by Fee Recovery, while Efficiency was Impacted by Non-recurring Events and Microfinance LoB Figures in S/ millions Fees income increase (+54% QoQ) drives NFI growth, while YTD Efficiency deteriorated, impacted by non-recurring Net gains on Securities was impacted by
Slide 30: Adjusted ROAE Improved QoQ to 4.9%; Capital Ratios Within Targets
All in all, Adjusted ROAE Improved QoQ to 4.9%, while Capital Ratios Remained within Internal Targets Adjusted Net Income (S/ millions) Adj. -7.7% 4.9% 1.8% ROAE BCP Stand-Alone CET1 Mibanco CET1 (1) 2Q20 Adjustetd Net Income: Adjusted for zero-interest-rate loan impairments in BCP and Mibanco, COVI
Slide 31: Outlook
CREDICORP 3. Outlook
Slide 32: Outlook
Outlook GDP outlook 9% - 12% Retail and Microfinance By December 20, pre-pandemic levels for Individuals, and 75-85% of pre- Loans Origination pandemic levels for SMEs and Microfinance The negative impact of the Government Programs on NIM should stabilize, NIM while Structural NIM will benefit from
Slide 33: Key Takeaways
CREDICORP 4. Key Takeaways
Slide 34: Key Takeaways
Key Takeaways 1. Clear signs of reactivation in the economy and the financial system. We continue to closely monitor developments on the economic policy and regulatory fronts. 2. Client payments, demand for loans in the Individuals segment and digital adoption continue to improve. Our base scenario
Slide 35: Appendix
CREDICORP 5. Appendix
Slide 36: Non-Recurring Events 3Q20
Non-Recurring Events 3Q20 Figures in S/ millions 36
Slide 37: Glossary
Glossary Loan Portfolio related to Reactiva Peru and FAE-Mype programs to respond quickly Government Program Loans (“GP or GP loans”) and effectively to liquidity needs and maintain the payment chain. Structural Loans Loan Portfolio excluding GP Loans IFRS9 modification loss / amortization related
Slide 38: Earnings Conference Call 3Q/2020
Earnings Conference Call 3Q/2020