4Q11 Fixed Income Presentation March 2012 PERUS ECONOMY AND BANKING - - PowerPoint PPT Presentation

March 2012

4Q11 Fixed Income Presentation

PERU’S ECONOMY AND BANKING SYSTEM

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Highlights

Strong Economic Metrics Low Country Risk Perception Improved Credit Ratings

BBB- BBB BBB BBB- A+

 Fitch upgraded Peru’s foreign currency long-term rating to BBB on November 10th, 2011  On August 30th, S&P upgraded Peru’s foreign currency long- term credit rating to BBB  Moody’s changed its outlook on Peru from stable to positive

• n March 21th, 2011

Source: BCRP, S&P

FC-LT Rating Outlook Date S&P BBB Stable Aug 30th, 2011 Moody's Baa3 Positive Mar 21st, 2011 Fitch BBB Stable Nov 10th, 2011

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Source: BCRP, SBS, Bloomberg

145 173 201 195 201 418 Chile Colombia Peru Mexico Brazil Latam

EMBIG (12Month average)

100 150 200 250 300 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

EMBI spread (pbs)

2.65 2.70 2.75 2.80 2.85 2.90 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

PEN / USD

3.73 (0.13) 1.52 2.48 3.48 1.49 1.14 3.93 6.65 0.25 2.08 4.74 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual inflation (%)

44 12 38 54 71 28 6 35 45 58 21 9 34 42 53 Peru Chile Mexico Colombia Brazil

'01-'05 '06-'10 '11-'15E

4.2 4.2 1.5 3.6 2.8 7.2 3.3 1.9 4.6 4.4 5.4 4.9 3.5 4.5 4.6 Peru Chile Mexico Colombia Brazil

'01-'05 '06-'10 '11-'15E

Economic and social indicators

5-Year Average External Debt/GDP (%) 5-Year Average Fiscal Balance/GDP (%) Poverty as a % of Total Population 5-Year Average Real GDP Growth (%)

Source: EIU, INEI Note: EIU data as of August 2011

(1.6) 0.9 (0.5) (1.9) (3.5) 1.0 3.4 (1.0) (1.0) (2.6) (0.8) 1.2 (0.1) (2.2) (2.5) Peru Chile Mexico Colombia Brazil

'01-'05 '06-'10 '11-'15E

48.7 44.5 39.3 36.2 34.8 31.3 2005 2006 2007 2008 2009 2010

Improving Poverty Indicators Controlled Fiscal Balance GDP Growth Decreasing Indebtedness

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35.5 36.5 38.7 42.0 42.7 44.6 44.7 47.6 Mar-10 Jun-10 Sep-10 Dic-10 Mar-11 Jun-11 Sep-11 Dic-11 31.1 33.1 34.7 36.8 38.1 41.2 42.0 44.8 Mar-10 Jun-10 Sep-10 Dic-10 Mar-11 Jun-11 Sep-11 Dic-11

Peruvian Banking System

Net Income (USD Bn) Loans & Deposits penetration (As a % of GDP) Banking System Loans (USD Bn) Banking System Deposits (USD Bn)

Dic’10– Dic’11 Growth: 21.9% Dic’10 – Dic’11 Growth: 13.3% 68 44 28 26 16 59 30 27 27 20 Chile Brazil Colombia Peru Mexico

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Note: Data as of June 30, 2011 Source: SBS as of December 31, 2011.

1.1 1.1 1.3 1.6 2008 2009 2010 2011

Peruvian Banking System II

Source: BCRP, EIU, SBS and Felaban

Regulatory Capital / RWAs Dollarization Past due loans / Total loans Profitability

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1.27% 1.56% 1.49% 1.47% 2008 2009 2010 2011 66.3% 60.3% 61.8% 51.2% 57.0% 55.0% 50.0% 48.5% 2008 2009 2010 2011 Loans Deposits 31.1% 24.5% 24.2% 24.5% 2.56% 2.27% 2.35% 2.32% 2008 2009 2010 2011 ROAE ROAA 11.9% 13.5% 13.6% 13.5% 2008 2009 2010 2011

BANCO DE CRÉDITO DEL PERÚ - BCP

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425.0 319.9 430.5 533.8 2008 2009 2010 2011

Source: BCP as of December 31, 2011.

YoY Growth: 17.9% YoY Growth: 4.3% YoY Growth: 24.0%

BCP´s Distribution Network & Transaction Breakout Deposits (USD Bn) Net Loans (USD Bn) Net Income (USD MM)

BCP Highlights

% of USD denominated loans % of USD denominated deposits

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14.0 14.5 17.1 17.8 57% 55% 50% 52% 2008 2009 2010 2011 10.2 11.2 13.9 16.4 66% 60% 62% 57% 2008 2009 2010 2011 3,064 4,081 5,002 6,504 73% 76% 80% 86% 2008 2009 2010 2011

Branches ATM's Agents Electronic Transactions

Loans by economic sector Investments Assets (USD Bn) Loans by Business Unit & Dollarization

Asset Structure

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Source: BCP as of December 31, 2011.

5.5; 21% 3.5; 13% 16.4; 61% 1.3; 5% Cash and due from banks Investments Net loans Other assets 58% 11% 4% 10% 6% 11% Peruvian Central Bank certificated notes Peruvian Bonds Foreign government bonds Corporate and leasing bonds Listed equity securities Other 16% 9% 13% 62% Mortgage Microbusiness Consumer Commercial 30% 20% 10% 9% 8% 5% 18% Other Communication, storage and transportation Mining Leaseholds and real estate activities Electricity, gas and water Commerce Manufacturing

30% 32% 34% 39%

70% 68% 66% 61% 44% 37% 36% 32% 76% 72% 75% 75% 2008 2009 2010 2011

Retail Wholesale Dollarization Retail banking Dollarization Wholesale banking

PDL by Currency (%) PDL by Days Overdue (%) PDL & Coverage Ratios (%) PDL by Product (%)

Asset Quality

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Source: SBS, BCP as of December 31, 2011. (1) As per Basel II definition

0.70% 1.41% 1.35% 1.50% 0.44% 0.47% 0.51% 0.56% 303% 195% 196% 199%

• 200%
• 100%

0% 100% 200% 300% 2008 2009 2010 2011

PDL / Total loans Refinanced Loans / Total Loans PDL Coverage ratio

0.33% 0.60% 0.47% 0.53% 0.41% 0.96% 0.96% 0.97% 0.41% 1.13% 0.98% 0.97% 2008 2009 2010 2011

Overdue 16-119 days / Total Loans Overdue 120 days or more / Total Loans Overdue 90 days / Total Loans(1)

0.33% 0.71% 0.54% 0.56% 3.35% 6.85% 5.55% 5.25% 1.69% 2.81% 2.67% 2.60% 0.71% 1.15% 1.40% 1.31%

2008 2009 2010 2011 Commercial Microfinance Consumer Mortgage 1.12% 2.21% 2.23% 2.42% 0.48% 0.88% 0.81% 0.71% 2008 2009 2010 2011 Nuevos Soles Foreign currency

Liabilities & Funding Structure

Others $1bn Equity $2bn

Total Deposits (USD Bn) Liabilities (USB Bn) Deposits by Business Unit & Dollarization Deposits / Loans

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Source: BCP as of December 31, 2011.

7; 37% 5; 29% 2; 10% 4; 24% Demand deposits Savings deposits CTS deposits Time Deposits 189% 133% 147% 138% 121% 137% 107% 100% 143% 136% 123% 115% 2008 2009 2010 2011

Nuevos Soles Foreign currency Total

17.8; 73% 3.0; 12% 3.1; 13% 0.5; 2% Deposits Due to banks Bonds issued Other liabilities

56% 58% 57% 50% 44% 42% 43% 50%

61.4% 65.8% 49.7% 51.1% 58.0% 53.7% 50.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

• 30%

20% 70% 120% 170%

2008 2009 2010 2011

Wholesale Retail Dollarization Wholesale Dollarization Retail

Funding Structure & Maturity Profile

Others $1bn Equity $2bn

Average Rates Core Deposits(%) (1) Maturity Profile (MM USD)

Source: BCP as of December 31, 2011 (1) % Core Deposits / Total deposits

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1,299 558 743 216 1,026 241 119 258 808 540 38

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+

Long Term Foreign Currency Short Term Foreign Currency Long Term Local Currency

3.06% 2.07% 0.94% 1.22% 5.82% 5.39% 5.02% 4.94% 2008 2009 2010 2011 Total deposits Due to banks and issued bonds 64% 69% 60% 65% 59% 59% 71% 84% 61% 63% 66% 75% 2008 2009 2010 2011

Nuevos Soles Foreign currency Total

Capital Management

Tier I Tier II and III

Tier II + Tier III / Regulatory Capital (%) BIS Ratio (%) (1) Regulatory Capital (USD MM) Tier I Common(2)/RWA (%)

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Source: BCP as of December 31, 2011. (1) Regulatory Capital / Risk Weighted Assets (2) Tier I Common = Capital + Reserves – 100% of applicable deductions + retained utilities adjusted by average payout

1,020 1,450 1,559 1,907 283 438 405 765 1,303 1,888 1,964 2,671 2008 2009 2010 2011 11.5 14.5 12.8 14.5 2008 2009 2010 2011 8.1 8.5 9.3 9.1 2008 2009 2010 2011 21.7% 23.2% 20.6% 28.6% 2008 2009 2010 2011

Provisions / Gross Financial Margin (%) Fees Breakdown Net Income (US$MM) Net Interest Margin

P&L Highlights

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Source: BCP as of December 31, 2011.

64% 70% 9% 3% 12% 19% 16% 9% 2010 2011 Other FX transactions Gains from sales

• f securities

Fees and commissions 5.60% 8.10% 7.75% 10.06% 3.78% 3.31% 2.84% 1.53% 4.51% 4.81% 4.87% 4.98% 2008 2009 2010 2011 Nuevos Soles Foreign currency Weighted-average 12.6% 21.1% 22.7% 21.7% 2008 2009 2010 2011 425 320 431 534 46% 48% 50% 45% 42% 43% 44% 45% 46% 47% 48% 49% 50% 51% 2008 2009 2010 2011 Net income Fees/Revenues

Avg. 52.6 Avg. 4.8 Avg. 2.1 2.6 1.7 1.9 2.0 2008 2009 2010 2011 4.5 4.8 4.8 5.0 2008 2009 2010 2011 Avg. 27.6

Efficiency (%)(3) ROAA (%) (1) ROAE (%)(1) Net Interest Margin (%)(2)

Key Financial Indicators

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Source: SBS and ASBANC as of December 31, 2011 (1) BCP shareholder’s equity and total asset averages computed as the average of month-end balances (2) Net interest income reported to SBS, as a percentage of average interest-earning assets. Average earning interest assets computed on a monthly basis (3) Efficiency calculated as administrative expenses plus depreciation and amortization divided by total operating revenue

37.8 20.9 24.1 25.2 2008 2009 2010 2011 45.3 54.4 56.2 52.9 2008 2009 2010 2011

BCP’s Competitive Position

# 1 in Deposits # 1 in Loans Leading Financial Institution in Peru # 1 in Asset Quality (Substandard Loans(1)/Total Loans)

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Source: SBS and ASBANC as of December 31, 2011 (1) Substandard loans includes past due, refinanced and restructured loans

2.1% 2.3% 2.2% 2.8%

BCP BBVA Interbank Scotiabank

34% 24% 15% 11%

BCP BBVA Scotiabank Interbank

34% 23% 15% 10% BCP BBVA Scotiabank Interbank

Rank Market Share (%) Commercial Loans 1 36% Microfinance Loans 1 22% Consumer Loans 1 25% Mortgage Loans 1 35% Total Loans 1 34% Total Deposits 1 34% Shareholders Equity 1 33%

APPENDIX

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Credicorp Ltd.

100% 100%

**

99.99% 86.00% 12.73%

*

99.79% 95.93%

Atlantic Security Holding Corporation

100% 84.90% 100% 31.44% 14.00% Bolivia Life Insurance Fitch: BBB- (since 2007) Health Insurance

Atlantic Security Bank

66.24%

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Selected Financial Information

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Income Statement Summary 2008 2009 2010 2011 YoY Growth

Financial income 1,212 1,286 1,367 1,738 27.1% Financial expense (523) (435) (425) (530) 24.8% Gross financial margin 689 851 943 1,208 28.2% Provision for loan losses (87) (179) (212) (263) 24.1% Gross financial margin after provision for loan losses 602 672 731 946 29.4% Gain (loss) for exchange difference 16 (87) 9 (14) (257.3%) Net financial margin 618 584 740 932 26.0% Fees and commissions from banking services 316 377 462 536 16.1% Net gains (loss) from sales of securities 24 88 62 22 (64.5%) Net gains on foreign exchange transactions 103 70 87 142 63.0% Other income 75 94 114 66 (42.3%) Operating expenses 616 (780) (875) (975) 11.5% Income before workers’ profit sharing and income tax 520 433 590 722 22.5% Income tax (95) (114) (159) (189) 18.7% Net income 425 320 431 534 23.9%

US$ in millions

Selected Financial Information

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Balance Sheet Summary 2008 2009 2010 2011 YoY Growth

Cash and due from banks, and interbank funds 3,530.0 3,734.0 8,492.0 5,483.7 (35.4%) Investments at fair value through profit or loss and available-for-sale investments, net 3,076.0 3,095.0 1,615.0 3,549.2 119.8% Gross loans 10,442.0 11,578.0 14,319.0 16,934.2 18.3% Reserve for loan losses (236.0) (357.0) (404.7) (526.9) 30.2% Other assets 862.0 1,081.0 1,224.6 1,298.7 6.0% Total assets 17,674.0 19,131.0 25,245.9 26,738.9 5.9% Deposits and obligations 13,943.0 14,458.0 17,061.0 17,813.6 4.4% Due to banks, correspondents and other entities, and interbank funds 1,180.0 1,278.0 3,641.8 2,956.7 (18.8%) Bonds and subordinated notes issued 795.0 1,236.0 1,959.2 3,121.8 59.3% Other liabilities 450.0 487.0 611.9 511.7 (16.4%) Total liabilities 16,368.0 17,460.0 23,273.8 24,403.7 4.9% Return on average shareholders’ equity 37.8% 20.9% 24.1% 25.2% 4.6% Return on average total assets 2.6% 1.7% 1.9% 2.0% 5.3% Equity-to-asset ratio 7.4% 8.1% 8.2% 8.3% 0.9% Past due loans as a percentage of total gross loans 0.8% 1.6% 1.5% 1.5% 2.0%

US$ in millions

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BCP Fitch Standard & Poors Moody´s Date of last review Sep-09 Sep-11 Mar-11 Outlook Stable Stable Pos Issuer Rating BBB/F2 BBB Baa3 Bank Strength D+ Foreign Currency Long Term BBB BBB Baa3 Short Term F2 A-3 P-3 Local Currency Long Term BBB BBB Baa2 Short Term F2 A-3 P-2 Outstanding debt (144A/Regs) Subordinated BCP 2021 BBB- Baa3 Subordinated BCP 2022 BBB- Baa3 Subordinated BCP 2026 BBB- Baa3 Junior Subordinated 2069 BB+ BB Senior BCP 2016 (US$ 700MM) BBB Baa2 Senior BCP 2020 (US$ 800MM) BBB Baa2

BCP’s ratings

International Credit Rating Agencies

BCP Apoyo y Asociados Equilibrium Date of last review Jun-11 Jun-11 Date of last report Jun-11 Jun-11 Institution A+ A+ Long term Debt Corporate Bonds AAA AAA Mortgage Bonds AAA AAA Leasing Bonds AAA AAA Long Term Deposits AAA AAA Short Term Debt Short Term Deposits CP-1+ EQL 1+ CDs CP-1+ EQL 1+ Capital Debt Subordinated Tier II AA+ AA+ BCP Emisiones Latam Feller Rate Last review Sep-10 Outlook Stable Solvency A

Local Credit Rating Agencies