4Q12 Fixed Income Presentation March 2013 PERUS ECONOMY AND BANKING - - PowerPoint PPT Presentation

March 2013

4Q12 Fixed Income Presentation

PERU’S ECONOMY AND BANKING SYSTEM

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145 143 179 174 137 376 Chile Peru Mexico Brazil Colombia Latam

EMBIG (12 Month Average)

Highlights

Strong Economic Metrics Low Country Risk Perception Improved Credit Ratings

BBB- BBB BBB BBB AA- Source: BCRP, S&P.

FC-LT Rating Outlook Date S&P BBB Positive Aug 30th, 2011 Moody's Baa2 Positive Aug 16th, 2012 Fitch BBB Stable Nov 10th, 2011

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Source: BCRP, SBS, Bloomberg.

• Moody’s changed its outlook on Peru to positive on August 16th,

2012.

• On August 30th, 2011 S&P upgraded Peru’s foreign currency

long-term credit rating to BBB and changed its outlook to positive on August 28th, 2012.

• Fitch upgraded Peru’s foreign currency long-term rating to BBB
• n November 10th, 2011.

3.73 (0.13) 1.52 2.48 3.48 1.49 1.14 3.93 6.65 0.25 2.08 4.74 2.65

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Annual Inflation (%)

2.40 2.50 2.60 2.70 2.80 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13

PEN/USD

80 120 160 200 240 280 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13

EMBI Spread (pbs)

46 13 24 42 51 30 5 26 33 44 20 10 35 35 36 Peru Chile Mexico Colombia Brazil

'00-'04 '05-'09 '10-'14E

(2.2) 0.1 (0.7) (4.5) (3.9) 1.3 4.1 (0.5) (3.1) (3.1) 1.0 0.4 (2.4) (2.0) (2.3) Peru Chile Mexico Colombia Brazil

'00-'04 '05-'09 '10-'14E 3.4 4.2 2.1 3.3 3.0 6.8 3.9 1.4 4.7 3.6 6.8 5.4 4.1 4.8 3.8 Peru Chile Mexico Colombia Brazil '00-'04 '05-'09 '10-'14E

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 (%)

Improving Poverty Indicators Controlled Fiscal Balance GDP Growth Decreasing Indebtedness

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Source: Focus Economics and INEI as of December 31, 2012. (1) Preliminary figure as of december, 2011.

48.7 44.5 39.3 36.2 34.8 31.3 28.4 2005 2006 2007 2008 2009 2010 2011(1)

Peruvian Financial System I

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

Dic’11– Dic’12 Growth: 19.0% Dic’11 – Dic’12 Growth: 18.4%

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Source: SBS as of December 31, 2012. Note: Banking System data as of December 31, 2012.

Dic’11 – Dic’12 Growth: 16.7% 68 44 28 26 16 59 30 27 27 20 Chile Brazil Colombia Peru Mexico Loans/GDP Deposits/GDP 44.2 53.1 60.3 71.4 2009 2010 2011 2012 1.4 1.6 2.0 2.3 2009 2010 2011 2012 35.5 43.7 53.6 63.8 2009 2010 2011 2012

Peruvian Financial System II

Regulatory Capital/RWAs Dollarization Past due loans/Total loans & Coverage Ratio Profitability

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Source: BCRP and SBS as of December 31, 2012.

1.9% 1.9% 1.8% 2.2% 216% 220% 225% 204% 2009 2010 2011 2012 14.0% 14.0% 13.7% 13.9% 2009 2010 2011 2012 46.3% 45.7% 44.4% 43.2% 48.7% 41.7% 41.0% 35.7% 52.7% 52.6% 51.4% 50.2% 56.1% 48.0% 47.5% 42.1% 2009 2010 2011 2012 Net Loans Deposits Banking System Net Loans 20.9% 24.6% 25.2% 22.4% 1.7% 2.0% 2.0% 1.8% 2009 2010 2011 2012 ROAE ROAA

BANCO DE CRÉDITO DEL PERÚ - BCP

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Credicorp Ltd.

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* The structure chart shows the main subsidiaries of Credicorp ** Credicorp directly owns 4.08% of BCP Bolivia and 14.00% of Pacifico Vida ***Spin-off in process ****There is a % of Credicorp Investments held indirectly by Grupo Crédito IFRS Figures as of December 2012. Percentages data as of December 2012.

**

Source: SMV. 100% 66.24% 99.99% 86.00% 12.73% 99.79% FuM: US$ 12.0 billion Collections: US$ 608 million (YTD 2012) Employees: 876 95.92% 100% 84.92% 100% 31.44% Bolivia Assets: US$ 41.1 billion Net Income attributable to Credicorp: US$ 788.8 million (2012) Employees: 26,541 Assets: US$ 35.8 billion NII: US$ 1473.6 million (2012) Employees: 22,538 AuM: US$ 5.4 billion Deposits: US$ 1.4 billion Employees: 81 Life Insurance Health Insurance

Atlantic Security Holding Corporation

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100% Assets: US$ 2.7 billion Net Earned Premiums: US$ 723.4 million (2012) Employees: 3,038

Credicorp Investments

100% 100% 51% 61% 100%

*** ****

Source: BCP and SBS as of December 31, 2012.

Dic’11– Dic’12 Growth: 22.1% Dic’11– Dic’12 Growth: 30.0% Dic’11– Dic’12 Growth: 10.5%

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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320 431 535 591 2009 2010 2011 2012 11.2 13.9 16.4 20.0 60% 62% 59% 57% 2009 2010 2011 2012 14.5 17.1 17.5 22.8 64% 55% 53% 48% 2009 2010 2011 2012 4,081 5,002 6,504 7,923 76% 80% 86% 87% 2009 2010 2011 2012 Agents ATM's Branches Electronic Transactions

17% 14% 69% Mortgage Consumer Commercial 25% 22% 10% 10% 5% 5% 23% Other Communication, Storage and Transportation Mining Realty Business and Leasing Services Electricity, Gas and Water Commerce Manufacturing

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, 2012. (1) Others include BCB, Edyficar and other business units.

20.0; 57% 7.8; 22% 4.8; 13% 2.8; 8% Net loans Cash and Due from Banks Investments Other assets 63% 9% 8% 6% 4% 10% Peruvian Central Bank Certificated Notes Corporate and Leasing Bonds Peruvian Bonds Listed Equity Securities Foreign Government Bonds Other 56% 55% 50% 46% 40% 38% 43% 46% 4% 7% 7% 8% 42% 39% 35% 31% 73% 77% 77% 81% 2009 2010 2011 2012

Wholesale Retail Others (1) 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, 2012. (1) As per Basel II definition.

0.71% 0.54% 0.56% 0.79% 6.85% 5.55% 5.25% 5.67% 2.81% 2.67% 2.60% 3.08% 1.15% 1.40% 1.31% 1.12% 2009 2010 2011 2012 Commercial Microfinance Consumer Mortgage 2.21% 2.23% 2.42% 2.97% 0.88% 0.81% 0.71% 0.70% 2009 2010 2011 2012 Nuevos Soles Foreign currency 0.60% 0.47% 0.53% 0.70% 0.96% 0.96% 0.97% 1.06% 1.13% 0.98% 0.97% 1.08% 2009 2010 2011 2012 Overdue 16-119 days/Total Loans Overdue 120 days or more/Total Loans Overdue 90 days/Total Loans(1) 1.56% 1.43% 1.50% 1.75% 0.47% 0.51% 0.56% 0.67% 195% 217% 219% 203% 2009 2010 2011 2012 PDL/Total loans Refinanced Loans/Total Loans PDL Coverage ratio

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, 2012. (1) Includes BCB, Edyficar and other business units

116% 147% 123% 134% 126% 98% 86% 87% 122% 117% 101% 108% 2009 2010 2011 2012 Nuevos Soles Foreign currency Total 7.6; 33% 6.1; 27% 2.2; 10% 6.9; 30% Demand Deposits Savings Deposits CTS Deposits Time Deposits 22.8; 70% 3.7; 12% 3.7; 11% 2.4; 7% Deposits Due to Banks Bonds Issued Other Liabilities

41% 49% 42% 44% 43% 43% 50% 51% 16% 8% 8% 5%

55% 43% 44% 42% 58% 54% 50% 44%

2009 2010 2011 2012

Wholesale Retail Others (1) Dollarization Wholesale Dollarization Retail

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+

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

Funding Structure & Maturity Profile

Equity $2bn

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

Source: BCP as of December 31, 2012. (1) % Core Deposits/Total deposits.

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1,775 874 583 1,224 325 182 434 944 599 729 69% 60% 70% 66% 59% 71% 80% 74% 63% 66% 75% 70% 2009 2010 2011 2012 Nuevos Soles Foreign Currency Total 2.07% 0.94% 1.22% 1.37% 5.39% 5.02% 4.94% 4.85% 2009 2010 2011 2012 Total Deposits Due to banks and issued bonds

1,450 1,559 1,907 2,405 438 405 765 1,097 1,888 1,964 2,671 3,502 2009 2010 2011 2012

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, 2012. (1) Regulatory Capital / Risk Weighted Assets. (2) Tier I Common = Capital + Reserves – 100% of applicable deductions + retained earnings adjusted by average payout.

CAGR: 22.9% 14.5 12.8 14.5 14.7 2009 2010 2011 2012

23.2 20.6 28.6 31.3 2009 2010 2011 2012

8.5 9.3 9.1 8.5 2009 2010 2011 2012

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, 2012. (1) Operating revenue is the aggregate of net financial margin and non financial income.

21.1% 22.7% 21.7% 28.3% 2009 2010 2011 2012 320 431 535 591 48% 50% 45% 45% 2009 2010 2011 2012 Net income Non-Financial Income/Operating Revenues (1) 8.10% 8.01% 10.06% 9.64% 3.31% 2.83% 1.53% 1.76% 4.81% 4.94% 4.98% 5.19% 2009 2010 2011 2012 Nuevos Soles Foreign Currency Weighted-average 70% 70% 18% 16% 3% 4% 9% 9% 2011 2012 Others Gains from Sales

• f Securities

FX Transactions Fees and Commissions

Avg. 23.2 Avg. 54.5 Avg. 1.8 20.9 24.1 25.2 22.4 2009 2010 2011 2012 Avg. 5.0 54.4 54.5 52.9 57.2 2009 2010 2011 2012 4.8 4.9 5.0 5.2 2009 2010 2011 2012

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, 2012. (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.

1.7 1.9 2.0 1.8 2009 2010 2011 2012

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, 2012. (1) Substandard loans includes past due, refinanced and restructured loans.

30% 19% 14% 9%

BCP BBVA Scotiabank Interbank

2.4% 2.5% 2.5% 3.2%

BCP BBVA Interbank Scotiabank

31% 18% 11% 8%

BCP BBVA Scotiabank Interbank

Rank Market Share (%) Commercial Loans 1 35% Microfinance Loans 1 19% Consumer Loans 1 20% Mortgage Loans 1 33% Total Loans 1 30% Total Deposits 1 31% Shareholders Equity 1 26%

APPENDIX

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Selected Financial Information

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* Includes net income from discontinued operations (Correval).

Income Statement Summary US$ in millions 2009 2010 2011 2012 YoY Growth

Financial income 1,286 1,367 1,739 2,204 27% Financial expense (435) (425) (530) (666) 26% Gross financial margin 851 943 1,208 1,538 27% Provision for loan losses (179) (212) (263) (436) 66% Gross financial margin after provision for loan losses 672 731 946 1,102 17% Gain (loss) for exchange difference (87) 9 (14) 6

• 141%

Net financial margin 584 740 932 1,107 19% Fees and commissions from banking services 377 462 536 637 19% Net gains (loss) from sales of securities 88 63 23 41 79% Net gains on foreign exchange transactions 70 87 142 149 5% Other income 94 114 66 86 31% Operating expenses (780) (875) (975) (1,217) 25% Income before workers’ profit sharing and income tax 433 591 723 803 11% Income tax (114) (159) (189) (216) 15% Net income 320 431 535 591* 11%

Selected Financial Information

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Balance Sheet Summary US$ in millions 2009 2010 2011 2012 YoY Growth

Cash and due from banks, and interbank funds 3,734 8,492 5,484 7,792 42.1% Investments at fair value through profit or loss and available-for-sale investments, net 3,095 1,615 3,549 4,784 34.8% Gross loans 11,578 14,335 16,934 20,747 22.5% Reserve for loan losses (357) (421) (527) (706) 33.9% Other assets 1,081 1,225 1,281 2,833 121.2% Total assets 19,131 25,246 26,721 35,450 32.7% Deposits and obligations 14,458 17,061 17,544 22,815 30.0% Due to banks, correspondents and other entities, and interbank funds 1,278 3,642 3,207 4,371 36.3% Bonds and subordinated notes issued 1,236 1,959 3,122 3,657 17.1% Other liabilities 487 612 507 1,858 266.3% Total liabilities 17,459 23,274 24,380 32,701 34.1% Return on average shareholders’ equity 20.9% 24.1% 25.2% 22.4% Return on average total assets 1.7% 1.9% 2.0% 1.8% Equity-to-asset ratio 8.1% 8.2% 8.3% 8.3% Past due loans as a percentage of total gross loans 1.6% 1.5% 1.5% 1.8%

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BCP’s ratings

International Credit Rating Agencies Local Credit Rating Agencies

BCP AAI Equilibrium

Date of last review Jun-12 Sep-12 Date of last report Jun-12 Sep-12 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 Fitch Last review Sep-10 Abr-12 Outlook Estable Estable Solvency A AA(Cl)

BCP Fitch S&P Moody´s

Date of last review Abr-12 Ago-12 Feb-13 Outlook Estable Positiva Estable Issuer rating BBB+/F2 BBB Baa2 Bank strength D+ Foreign Currency Long term BBB+ BBB Baa2 Short term F2 A-2 P-2 Local Currency Long term BBB+ BBB Baa2 Short term F2 A-2 P-2 Outstanding debt (144A/Regs) Subordinated BCP 2021 BBB Ba1 Subordinated BCP 2022 BBB Ba1 Subordinated BCP 2026 BBB Ba1 Subordinated BCP 2027 BBB Ba1 Junior Subordinated 2069 BB- BB+ Senior BCP 2016 (US$ 700MM) BBB+ Baa2 Senior BCP 2020 (US$ 800MM) BBB+ Baa2