4Q13 Fixed Income Presentation March 2014 PERUS ECONOMY AND BANKING - - PowerPoint PPT Presentation

March 2014

4Q13 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 AA- Source: BCRP, S&P.

FC-LT Rating Outlook Date Moody's Baa2 Positive Aug 16th, 2012 S&P BBB+ Stable Aug 19th, 2013 Fitch BBB+ Stable Oct 23th, 2013

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Source: BCRP, SBS, Bloomberg.

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

2012.

• On August 19th, 2013 S&P upgraded Peru’s foreign currency

long-term credit rating to BBB+ and changed its outlook to stable.

• Fitch upgraded Peru’s foreign currency long-term rating to BBB+
• n October 23th, 2013.

0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20 1.25 1.30 1.35 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14

Exchange Rates

154 159 189 211 159 382 Chile Peru Mexico Brazil Colombia Latam

EMBI (LTM Average)

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 2.86 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Annual Inflation (%)

80 120 160 200 240 280 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14

EMBI Spread (pbs)

Economic and Social Indicators

3-Year Average Public Debt/GDP (%) 3-Year Average Fiscal Balance/GDP (%) Poverty as a % of Total Population 3-Year Average Real GDP Growth (%)

Improving Poverty Indicators Controlled Fiscal Balance GDP Growth Decreasing Indebtedness

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Source: Focus Economics as of February 28, 2014 and INEI as of December 31, 2012.

54.8 25.8 15.1 51.2 34.1 21.4 Peru (2001) Peru (2012) Chile Mexico Colombia Brazil

7.3 5.7 4.3 4.1 3.7 5.4 4.1 2.8 4.4 2.2 5.9 4.6 4.0 4.8 3.0 Peru Chile Mexico Colombia Brazil '10-'12 '13-'15E '16-'18E

1.2 0.6 (2.6) (2.5) (2.5) 0.2 (0.7) (3.0) (1.8) (3.5) 0.2 (0.2) (2.2) (1.1) (3.2) Peru Chile Mexico Colombia Brazil

'10-'12 '13-'15E '16-'18E 21 11 35 33 38 19 12 36 32 35 16 14 41 31 36 Peru Chile Mexico Colombia Brazil

'10-'12 '13-'15E '16-'18E

1.6 2.0 2.3 2.2 2010 2011 2012 2013 20.0 23.8 27.6 28.1 22.2 24.7 25.5 31.3 2010 2011 2012 2013 Net Loans Foreign Currency Deposits Foreign Currency 66.8 80.3 92.4 115.1 86.9 95.9 117.1 2010 2011 2012 2013 Net Loans Local Currency Deposits Local Currency

Peruvian Financial System I

Net Income (USD Bn) Local Currency Net Loans & Deposits (S/. Bn) Net Loans & Deposits (USD Bn) Foreign Currency Net Loans & Deposits (USD Bn)

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Source: SBS as of December 31, 2013.

131.4 43.7 53.6 63.8 69.3 53.1 60.3 71.4 78.4

45.7% 44.4% 43.2% 40.5% 41.7% 41.0% 35.7% 40.0%

2010 2011 2012 2013 Net Loans Deposits Net Dollarization Deposits Dollarization

Peruvian Financial System II

Regulatory Capital/RWAs Loans & Deposits Penetration (As a % of GDP) Past due loans/Total loans & Coverage Ratio Profitability

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Source: BCRP and SBS as of December 31, 2013. (1) Substandard Loans = Past Due Loans + Refinanced and restructured loans Note: Banking System data as of December 31, 2012.

68% 44% 28% 26% 16% 59% 30% 27% 27% 20% Chile Brazil Colombia Peru Mexico Loans/GDP Deposits/GDP 1.9% 1.9% 2.2% 2.6% 1.2% 1.1% 1.1% 1.0% 219% 225% 204% 177% 137% 144% 137% 128%

• 200%
• 150%
• 100%
• 50%

0% 50% 100% 150% 200% 250% 2010 2011 2012 2013 Refinanced Loans Financial System PDL Financial System PDL Coverage Ratio Substandard Loans Coverage Ratio (1) 14.0% 13.7% 13.9% 13.8% 2010 2011 2012 2013 24.6% 25.2% 21.8% 19.7% 2.0% 2.0% 2.3% 2.0% 2010 2011 2012 2013 ROAE ROAA

BANCO DE CRÉDITO DEL PERÚ - BCP

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Credicorp Ltd.

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The chart shows the main subsidiaries of Credicorp after the establishment of the regional investment banking platform under Credicorp Investments. IFRS Figures as of December 31, 2013. Life Insurance Health Insurance

Assets: US$ 35.2 billion NII: US$ 1,683 million Employees: 22,657 FuM: US$ 11.6 billion Collections: US$ 241 million Employees: 708 Assets: US$ 2.7 billion Net Earned Premiums: US$ 613.5 million Employees: 3,154 Assets: US$ 41 billion Net Income attributable to Credicorp: US$ 567.1 million Employees: 27,638 Credicorp Capital Securities Credicorp Capital Peru

BCP’s Competitive Position (1)

# 1 in Deposits # 1 in Loans Leading Financial Institution in Peru # 1 in Net Income

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Source: SBS as of December 31, 2013. (1) Market share is calculated from Peruvian Financial System. BCP includes Financiera Edyficar, Scotiabank includes Crediscotia and Interbank includes Financiera Uno.

Rank Market Share (%) Wholesale Loans 1 35% SME Loans 1 26% Microfinance Loans 1 20% Consumer Loans 1 21% Mortgage Loans 1 32% Total Loans 1 30% Demand Deposits 1 28% Savings Deposits 1 34% Time Deposits 1 27% CTS Deposits 1 43% Total Deposits 1 28% Shareholders Equity 1 26% Regulatory Capital 1 34%

29% 21% 15% 10%

BCP BBVA Scotiabank Interbank

30% 20% 14% 10%

BCP BBVA Scotiabank Interbank

28% 17% 14% 9%

BCP BBVA Scotiabank Interbank

14.7 18.1 22.2 29.3 22.7 23.6 31.5 32.0 2010 2011 2012 2013 Net Loans Local Currency Deposits Local Currency 8.7 9.7 11.3 11.0 9.0 8.8 10.5 11.7 2010 2011 2012 2013 Net Loans Foreign Currency Deposits Foreign Currency

Source: BCP and SBS as of December 31, 2013.

BCP´s Distribution Network & Transaction Breakout Local Currency Net Loans & Deposits (S/. Bn) Total Net Loans & Deposits (USD Bn) Foreign Currency Net Loans & Deposits (USD Bn)

BCP Highlights

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3,513 4,674 5,712 5,820 1,159 1,485 1,844 2,091 330 345 367 389 5,002 6,504 7,923 8,300 80% 86% 87% 89% 2010 2011 2012 2013 Agents ATM's Branches Electronic Transactions 13.9 16.4 20.0 21.5 17.1 17.5 22.8 23.2 62% 59% 57% 51% 53% 50% 46% 51% 2010 2011 2012 2013 Net Loans Deposits Dollarization Net Loans Dollarization Deposits

17% 14% 56% 10% 3% Mortgage Consumer Wholesale SME Microfinance 25% 22% 8% 10% 7% 6% 22% Other Communication, Storage and Transportation Mining Realty Business and Leasing Services Electricity, Gas and Water Commerce Manufacturing

Loans by economic sector Investments Assets (USD 35.0Bn) Loans by Business Unit

Asset Structure

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Source: BCP as of December 31, 2013.

51% 15% 5% 13% 6% 10% Peruvian Central Bank certificated notes Peruvian Bonds Foreign government bonds Corporate and leasing bonds Listed equity securities Other 21.5 ; 61% 7.7 ; 22% 4.4 ; 13% 1.4 ; 4% Net loans Cash and Due from Banks Investments Other assets 59% 58% 55% 56% 41% 42% 45% 44% 2010 2011 2012 2013 Wholesale Retail

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, 2013. (1) As per Basel II definition. (2) Substandard Loans = Past Due Loans + Refinanced and restructured loans

2.23% 2.42% 2.97% 3.51% 0.81% 0.71% 0.70% 1.06% 2010 2011 2012 2013 Nuevos Soles Foreign currency 1.43% 1.50% 1.75% 2.32% 0.51% 0.56% 0.67% 0.60% 217% 219% 203% 167% 164% 165% 147% 132% 2010 2011 2012 2013 Refinanced Loans/Total Loans PDL/Total loans PDL Coverage ratio Substandard Loans Coverage Ratio(2) 0.47% 0.53% 0.70% 0.97% 0.96% 0.97% 1.06% 1.35% 0.98% 0.97% 1.08% 1.40% 2010 2011 2012 2013 Overdue 120 days or more/Total Loans Overdue 16-119 days/Total Loans Overdue 90 days/Total Loans(1) 0.54% 0.56% 0.79% 1.30% 6.02% 5.68% 6.14% 8.70% 3.28% 2.28% 1.89% 2.69% 2.67% 2.60% 3.08% 3.52% 1.40% 1.31% 1.12% 1.39% 4.01% 4.03% 3.92% 3.91% 2010 2011 2012 2013 Wholesale SME Microfinance Consumer Mortgage Edyficar

Liabilities & Funding Structure

Others $1bn Equity $2bn

Total Deposits (USD 23.2 Bn) Liabilities (USD 32.1 Bn) Deposits by Business Unit Loans-to-deposits

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Source: BCP as of December 31, 2013. (1) Includes BCB, Edyficar and other business units

23.2; 72% 4.3; 13% 4.1; 13% 0.5; 2% Deposits Due to Banks Bonds Issued Other Liabilities 7.4; 32% 6.4; 28% 2.4; 10% 6.9; 30% Demand Deposits Savings Deposits CTS Deposits Time Deposits 68% 81% 74% 95% 102% 116% 115% 97% 86% 99% 93% 96% 2010 2011 2012 2013 Nuevos Soles Foreign Currency Total

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

2010 2011 2012 2013

Wholesale Retail Others (1)

Funding Structure & Maturity Profile

Equity $2bn

Average Rates Core Deposits(%)(1) Maturity Profile (MM USD) (2)

Source: BCP as of December 31, 2013. (1) % Core Deposits (Savings , demand and CTS deposits) /Total deposits. (2) Figures from BCP unconsolidated as of December 31,2013.

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60% 70% 66% 71% 71% 80% 74% 69% 66% 75% 70% 70% 2010 2011 2012 2013 Nuevos Soles Foreign Currency Total 0.94% 1.22% 1.37% 1.30% 5.02% 4.94% 4.93% 4.79% 2010 2011 2012 2013 Total Deposits Due to banks and issued bonds

1,687 532 1,154 344 183 439 941 591 911 733 24 16 16 198

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2026+

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

1,559 1,907 2,405 2,574 405 765 1,097 1,274 1,964 2,671 3,502 3,848 2010 2011 2012 2013

Capital Management

Tier I Tier II and III

Tier II + Tier III/Regulatory Capital (%) BIS Ratio (%)(1) Regulatory Capital (USD MM)

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Source: BCP as of December 31, 2013. (1) Regulatory Capital / Risk Weighted Assets. (2) Common Equity Tier 1 = Capital + Reserves – 100% of applicable deductions (investment in subsidiaries, goodwill, intangibles assets and deferred taxes) + retained earnings + unrealized gains.

Common Equity Tier 1(2)/RWA (%)

20.6 28.6 31.3 33.1 2010 2011 2012 2013 8.7 8.0 7.4 7.5 2010 2011 2012 2013 12.8 14.5 14.7 14.5 2010 2011 2012 2013

114 66 86 29 63 23 41

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87 142 149 184 462 536 637 628 2010 2011 2012 2013 Fees and Commissions FX Transactions Gains from Sales of Securities Others (875) (975) (1,217) (1,242) 2010 2011 2012 2013

Net Income (USD MM) Non Financial Income (USD MM) Provisions / Gross Financial Margin (USD MM) Operating Expenses (USD MM)

P&L Highlights

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Source: BCP as of December 31, 2013.

431 535 591 590 2010 2011 2012 2013 726 766 912 816 1,367 1,739 2,204 2,355 (425) (530) (666) (727) 943 1,208 1,538 1,629 22.7% 21.7% 28.3% 27.2% 2010 2011 2012 2013 Financial Income Financial Expenses Gross financial margin (USD MM)

56.7 49.7 51.2 49.0 2010 2011 2012 2013 1.9 2.0 1.8 1.7 2010 2011 2012 2013 Avg. 22.9 Avg. 52.2 Avg. 1.8

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, 2013. (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, amortization and taxes divided by the aggregate of gross financial margin, banking services commissions and net gain on foreign exchange transactions.

24.1 25.2 22.4 22.0 2010 2011 2012 2013 8.01% 10.06% 9.64% 8.88% 2.83% 1.53% 1.76% 2.50% 4.94% 4.98% 5.19% 5.35% 2010 2011 2012 2013 Nuevos Soles Foreign Currency Weighted-average

APPENDIX

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Selected Financial Information

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* Includes net income from discontinued operations (Correval).

Income Statement Summary 2010 2011 2012 2013 YoY Growth

Financial income 1,367 1,739 2,204 2,355 6.87% Financial expense (425) (530) (666) (727) 9.07% Gross financial margin 943 1,208 1,538 1,629 5.92% Provision for loan losses (212) (263) (436) (444) 1.80% Gross financial margin after provision for loan losses 731 946 1,102 1,185 7.55% Gain (loss) for exchange difference 9 (14) 6 64 1056.94% Net financial margin 740 932 1,107 1,249 12.82% Fees and commissions from banking services 462 536 637 628

• 1.33%

Net gains (loss) from sales of securities 63 23 41 (26) NA Net gains on foreign exchange transactions 87 142 149 184 23.91% Other income 114 66 86 29

• 66.09%

Operating expenses (875) (975) (1,217) (1,242) 2.10% Income before workers’ profit sharing and income tax 591 723 803 823 2.49% Income tax (159) (189) (216) (233) 7.70% Net income from continuing operations 431 535 587 590 0.57% Net income from discontinuing operations (*)

• 4

Net income 431 535 591 590

• 0.06%

US$ in millions

Selected Financial Information

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Balance Sheet Summary 2010 2011 2012 2013 YoY Growth

Cash and due from banks, and interbank funds 8,492 5,484 7,792 7,674 (1.5%) Investments at fair value through profit or loss and available-for-sale investments, net 1,615 3,549 4,784 4,429 (7.4%) Gross loans 14,335 16,934 20,747 22,312 7.5% Reserve for loan losses (421) (527) (706) (814) 15.4% Other assets 1,225 1,281 2,833 1,442 (49.1%) Total assets 25,246 26,721 35,450 35,042 (1.1%) Deposits and obligations 17,061 17,544 22,815 23,165 1.5% Due to banks, correspondents and other entities, and interbank funds 3,642 3,207 4,371 4,305 (1.5%) Bonds and subordinated notes issued 1,959 3,122 3,657 4,089 11.8% Other liabilities 612 507 1,858 544 (70.7%) Total liabilities 23,274 24,380 32,701 32,104 (1.8%) Return on average shareholders’ equity 24.1% 25.2% 22.4% 22.0% Return on average total assets 1.9% 2.0% 1.8% 1.7% Equity-to-asset ratio 8.2% 8.3% 8.3% 8.1% Past due loans as a percentage of total gross loans 1.5% 1.5% 1.8% 2.3%

US$ in millions

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BCP’s ratings

International Credit Rating Agencies Local Credit Rating Agencies

BCP AAI Equilibrium

Date of last review Sep-13 Sep-13 Date of last report Sep-13 Sep-13 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 Ago-13 Abr-12 Outlook Stable Stable Solvency AA- AA(Cl)

BCP Fitch S&P Moody´s

Date of last review Abr-12 Ago-13 Feb-13 Outlook Stable Stable Stable Issuer rating BBB+ BBB+ Baa2 Bank strength C- 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 BBB Baa3 Subordinated BCP 2022 BBB BBB Baa3 Subordinated BCP 2026 BBB BBB Baa3 Subordinated BCP 2027 BBB BBB Baa3 Junior Subordinated 2069 BB- BBB- Senior BCP 2016 (US$ 365MM) BBB+ BBB+ Baa2 Senior BCP 2020 (US$ 800MM) BBB+ BBB+ Baa2 Senior BCP 2023 (US$ 716MM) BBB+ BBB+ Baa2