Credicorp Ltd. · NYSE:BAP
Credicorp — Q4 2022 Earnings Presentation
53 slides from Credicorp's earnings presentation, Feb 14, 2023
Slide 1: 4Q/2022
Slide 2: CEO message
cli ) Credicorp delivered another set of robust fourth quarter results on top of a very positive year. Importantly, }am pleased to announce that at a holding level we have already absorbed the negative impacts due to Covid. While we are accustomed to operating in adverse environments, the final quar
Slide 3: CFO message
FF aa, . tf Despite current political volatility and social unrest, Peru’s macro fundamentals remain solid and Credicorp delivered strong fourth quarter and full year results. Fourth quarter registered an ROE of over 15% on solid core income and higher cost of risk. Positive volumes, active repricin
Slide 4: Loans in ADB
Loans in ADB {5/ millions) Toil A 29% Structural 410.4% Total Structural oe Ae 145,057 150,626 062 «148109 a. piemes ‘Sheil wii Wai al vet can
Slide 5: Deposits
Deposits {5/ mitions) vue a visa a 149,597 151,958 147,021 22.7% 28.5% 29.8% 73 715% 70.2% aot saz 42 "Others Non-Care (Tine and Severance Indemnity Deposit) ‘{SLew-Cont jpeend end Suing Dapeat)
Slide 6: NII & NIM
NII & NIM. (6/ mitions) ‘mmm Net interest income —==Net interest Margin
Slide 7: sre at
sre at
Slide 8: NPL and Coverage Ratio
a a 9 strata NPL Coverage Ratio —mibaneo 26 1% 23% cresico a 0. a P Stand a i 80° stand lon
Slide 9: Insurance Underwriting Result
Insurance Underwriting Result The insurance underwriting result fell 7.4% QoQ. This result was attributable to a drop in net earned premiums in the Life business, due to a particularly high base in 3Q22, as well as higher claims in the General business, associated with Commercial Lines and Cars. In
Slide 10: Insurance Underwriting Result
Insurance Underwriting Result (s/ ns) a wii Sheeeee: ita
Slide 11: Efficiency Ratio
Efficiency Ratio
Slide 12: Contributions and ROE by subsidiary in 4Q22
Contributions* and ROE by subsidiary in 4Q22 (S/ millions)
Slide 13: Notes on contributions to Credicorp
*Contributions to Credicorp reflect the eliminations for consolidation purposes (eliminations for transactions among Credicorp’s subsidiaries or between Credicorp and its subsidiaries). - The figure is lower than the net income of BCP Stand Alone as contribution do not consider investments in other
Slide 14: Structural Portfolio quality and Delinquency ratios
Structural Portfolio quality and Delinquency ratios (1) As of % change S/ 000 Dec 21 Sep 22 Dec 22 QoQ YoY Structural NPLs Structural IOL ratio Structural Coverage ratio of NPLs (1) The FC share of Credicorp’s loan portfolio is calculated including BCP Bolivia and ASB Bank Corp., however the chart s
Slide 15: Segments driving growth in structural NPL portfolio
In the QoQ and YoY analysis, the segments that drove growth in the structural NPL portfolio were: ● Wholesale Banking , due to an increase in refinanced loans for a small number of clients in the real estate sector (builders and office rental companies) and the tourism sector, mainly in Corporate Ba
Slide 16: Structural loan charge-offs
QoQ , structural loans fell -10%. This evolution was attributable to the fact that regulatory restrictions that impeded taking charge-offs on structural loans held by clients that also possess Reactiva loans were lifted. Consequently, the first wave of charge-offs was rolled out in the SME-Pyme sect
Slide 17: NPL loans in the Government Loan Portfolio
NPL loans in the Government Loan Portfolio (in quarter-end balances– S/ thousands)
Slide 18: Loan Portfolio Quality and Delinquency Ratios
Loan Portfolio Quality and Delinquency Ratios As of % change S/ 000 Dec 21 Sep 22 Dec 22 QoQ YoY Internal overdue loans over 90-days (1) Non-performing loans (NPLs) (3) IOL ratio Coverage ratio of IOLs Coverage ratio of IOL 90-days Coverage ratio of NPLs QoQ, the reduction in the Structural NPL cove
Slide 19: Deposit dollarization
At the end of December 2022, the level of dollarization of Total Deposits fell 10bps QoQ (-93bps excluding the exchange rate effect). This decline was driven by a drop in Time Deposits, which were impacted by fund migration from FC to LC in the Wholesale Portfolio at BCP Stand-alone. In YoY terms, t
Slide 20: Loan / Deposit Ratio (L/D Ratio)
Loan / Deposit Ratio (L/D Ratio)
Slide 21: Loan to deposit ratio evolution
In QoQ terms, the L/D ratio increased 119 bps at BCP Stand-alone and declined 365 bps at Mibanco. The L/D ratio at BAP situated at 101.1%. The increase at BAP was driven by two factors: i) a decrease in total deposits, which was fueled primarily by a drop in Demand Deposits at BCP Stand-alone after
Slide 22: Liquidity coverage ratios
170.4% 164.5% 1599% 135.7% 129.4% 131.2% 2330 127.7% eaaanital Dec 21 sep22 Dec 2
Slide 23: Share of the Market for Deposits in the Peruvian Financial System
Share of the Market for Deposits in the Peruvian Financial System
Slide 24: Deposit market share
At the end of November 2022, Total Deposits at BCP Stand-alone and Mibanco registered a MS of 32.2% and 2.5% respectively (-120bps + 20bps respectively with regard to December 2021). BCP Stand-alone reported a noteworthy increase in its share of Time Deposits (+270 bps), which reflected the migratio
Slide 25: Structural NIM and net interest income
Structural NIM stood above pre-pandemic level, bolstered by the positive pricing effect generated by our active interest rate management within our business segments. Notwithstanding, a large volume of loan provisions was set aside; this affected risk-adjusted NIM, which stood at 4.44% in 4Q22. To a
Slide 26: Loan portfolio provisions and cost of risk
GP Loan Portfolio Provisions Quarter % change Year % change S/ 000 4Q21 3Q22 4Q22 QoQ YoY 2021 2022 2022 / 2021 -1.17% 1.30% -64 bps 183 bps 94 bps Loan Portfolio Provisions Quarter % change Year % change S/ 000 4Q21 3Q22 4Q22 QoQ YoY 2021 2022 2022 / 2021 0.34% 1.22% 75 bps 163 bps 0.82% 40 bps Gro
Slide 27: Cost of risk by subsidiary
BSR PHA RER Cie RECENT CONT AU. a0, 008% 2.00% 100% ose i | saz2 cP ibanco Others) 4az2 OP @hucherd Stendaicne Pibsscery saz
Slide 28: Full Year Evolution of the Cost of Risk
(1) Others include BCP Bolivia, Mibanco Colombia, ASB Bank Corp and eliminations. (1) Others include BCP Bolivia, Mibanco Colombia, ASB Bank Corp and eliminations. Full Year Evolution of the Cost of Risk
Slide 29: Fee income and other core income
(1) Others include BCP Bolivia, Mibanco Colombia, ASB Bank Corp and eliminations.
Slide 30: el ng |
oo el ng | otra i reso eros [2 saw a» ones me ow
Slide 31: Other non-core income
(1) Others includes Grupo Credito, Credicorp Individual, eliminations and others. Other non-core income rose QoQ and YoY, driven primarily by: ● A increase in the Net gain on securities at Credicorp Stand-alone due to positive fluctuations in the fixed income portfolio. ● Investment Banking and Weal
Slide 32: Foy nae: ‘a, pic acer
Foy nae: ‘a, pic acer
Slide 33: Net earned premiums
In the QoQ analysis, net earned premiums in the Life Business fell 6.1%. This drop was driven mainly by (i) Group Life, which reported extraordinary premiums due to seasonal bonuses pending registration and regularizations of SCTR (complementary insurance for high-risk occupations) in 3Q22, and (ii)
Slide 34: Net Loss Ratio
The Net Loss Ratio stood at 65.4%, (+180 bps QoQ). This result was driven primarily by the increase in the Net Loss Ratio of the Life business (+360 bps QoQ). The aforementioned was mainly associated with a reduction in net earned premiums and with an increase in claims for the following products: (
Slide 35: BCP Stand-alone's Regulatory Capital
Figures in millions S/. 10.2 BCP Stand-alones’ Regulatory Capital
Slide 36: BCP Stand-alone Tier 1 and Global Capital Ratios
At the end of 4Q22, the Tier 1 and Global Capital Ratios at BCP Stand-alone stood at 10.0% (+8bps QoQ) and 14.4% (-50bps QoQ), respectively. This slight increase in the Tier 1 ratio was driven primarily by a drop in the volume of risk-weighted assets (RWAs). The decrease in the Global Capital Ratio
Slide 37: ase
ase =
Slide 38: Pam
Pam
Slide 39: Mibanco Tier 1 and Global Capital Ratios
At the end of 4Q22, the Tier 1 and Global Capital Ratios at Mibanco stood at 12.4% (+2bps QoQ) and 14.7% (+8bps QoQ) respectively. These variations respond to a 1.2% decrease in risk-weighted assets (RWAs), which was attributable to a drop in the loan volume. The YoY evolution shows that the Tier 1
Slide 40: Peruvian economy growth outlook
Sources: BCRP In Q422, the Peruvian economy is expected to grow around 1.6% YoY (Q322 1.7% YoY). Estimates indicate that recovery in the primary sectors is primarily attributable to the launch of commercial operations at Quellaveco while growth in the primary sectors has continued to slow as private
Slide 41: Annual Inflation and Central Bank Reference Rate
Sources: BCRP and INEI Inflation, measured through the Consumer Price index for Metropolitan Lima, closed Q422 at 8.5%, the highest print in 26 years and above the upper boundary of the BCRP´s target range of 1%3% for the second year in a row. In the same period, core inflation (excludes food and en
Slide 42: Fiscal deficit and sovereign ratings
The annualized fiscal deficit to December was 1.6% of GDP, compared to 2.5% of GDP at the end of 2021. This reduction was primarily driven by an increase in tax revenues (12.7%). Over the same period, current expenditures fell 0.9% due to a decrease in expenses related to COVID-19 while expenses for
Slide 43: Exchange rate and international reserves
According to BCRP, the exchange rate closed 4Q22 in USDPEN 3.8125, which represents an appreciation of 4.3% compared to the figure at the end of Q322, and 4.1% compared to the print at the end of 2021. The political events of December 2022 (the attempted coup of Pedro Castillo, his subsequent impeac
Slide 44: GP Portfolio quality and Delinquency ratios
GP Portfolio quality and Delinquency ratios (1) As of % change S/ 000 Dec 21 Sep 22 Dec 22 QoQ YoY Government Program (GP) Loan Portfolio Quality (in Quarter-end Balances) GP Total loans (Quarter-end balance) 18,640,827 12,201,370 9,511,132 -22.0% -49.0% GP Allowance for loan losses 196,841 154,552
Slide 45: SME-Business
SME-Business
Slide 46: o structurt nP
o structurt nP
Slide 47: sexo Sp ape
sexo Sp ape x © soth oan Ne coral 239% soy 2am 24% 200m 29% a ee me ee ee a ee mE et ey
Slide 48: Loan quality: IOL ratio, NPL ratio and early delinquency
Slide 49: Loans, IOL ratio and early delinquency
Loans (right ext) t=dOL ratio cc Nptmntio —o-Earty delingueney 60 -<180)
Slide 50: ccutdieuns cipal, “giatias <iabebtiieceNte
ccutdieuns cipal, “giatias <iabebtiieceNte
Slide 51: BCP Bolivia
BCP Bolivia
Slide 52: Oecl4 WndS Oec1S mdé Oeclé lund? Deck? Wind Oecd hnd® Oecl9 Wun20 Deed n2i
20% Oecl4 WndS Oec1S mdé Oeclé lund? Deck? Wind Oecd hnd® Oecl9 Wun20 Deed n2i Oecd hund2 Oecd ii aa a a aa a a is
Slide 53: Notes and definitions
(1) Averages are determined as the average of period-beginning and period-ending balances. (2) Includes total deposits, due to banks and correspondents, BCRP instruments, repurchase agreements and bonds and notes issued. (3) Does not include Life insurance business. (4) Tier 1 = Capital + Legal and