Credicorp (BAP) 8 May 222022 Q1 Earnings call transcript

Good morning, everyone. I would like to welcome all of you to the Credicorp Ltd, First Quarter 2022 Conference Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Credicorp's website. Today's conference call is being recorded. [Operator Instructions].

pleasure Ciguenas. the my Credicorp's over is Milagros IRO, it to conference turn to Now

begin. may You

Thank you, morning, and good everyone.

Chief in Speaking and Universal on be Chief Officer; Insurance our Risk Executive of Ferrari, Francesca Cesar our Officer. today's call Officer; Pensions. Cavero, and will Rivera, and be Raffo, Chief Officer; Cesar Head Reynaldo will Diego Q&A Banking; session the Gianfranco Innovation Chief Financial also Participating Llosa, Rios, of Head

no safe would the on and like to Today's to earnings and Before harbor we to and reflect update in will Ferrari our work, to following financial statements based Rios, statement. by of uncertainties, filings and any will new a circumstances. performance are Gianfranco which beliefs We our proceed, you our forward-looking start ahead. Cesar on or strategic refer management's the obligations release recent the statements Gianfranco or update please forward-looking macro contain risks SEC. I environment or for I discussing on a the XXXX. an number subject outlook call followed call assume statements make forward-looking of go will events expectations to with our and we revise and initiatives, which are current comment provide changed who section

position Please approach and expand and pleased us maintain you to Thank X earnings Day Thank beyond were ourselves many to you, to we of everyone. Milagros. our We Peru turn leadership regionally. continuing challenge have recently to our to Slide as today. the morning, to for our joining to you our presentation. opportunity introduce in Digital holistic transform Good of at

XXXX our to us discuss metrics turmoil, also and increase our the the maintain to to we soles market deliver of enabled declared dividend LOBs this on XX strong our quarter effectiveness across shareholder successful period. will PEN we shortly. brands synergies financial XXXX on to our Credicorp. value. and more the the detail in strategy first current capture to Our are operational scale solvency initiatives political Cesar and leverage enhance our multiple Despite fiscal underscore as and results Today, execution for for capitalized share outlook milestones, opportunities, adjusting of per

Now to please X. Slide turn

important As after you all having when the key years it to we operating role business. earlier of on even additions working that focused remain years are how of the and year, sustainability know, hand-in-hand was foundation remain I many CEO prior would our structures core to the governance today. to ensure spent more do strategic we came announced with established initiatives that we become this ago, Two part a the what and leadership, of

internal long-term of it priorities have society. is future and strategy the businesses our fact, of that outlined guiding At key and X Day of core Credicorp's Digital is the governance structure we place want the enhanced our of and achieved in early anticipate initiatives that expanding customer intensifying meet BCP to the our successes throughout ensure digital be and focus in base. transformation the all replicated disruption would would and and we also the the to on took mid-March, our impact needs company, that external In one that at innovation we on while

putting to have they deliver are our on in Finally, with us. is the on trust customers our relationships everything do and we we the based ability

digital expansion X to guided depth, Slide potential. to with our more by fundamental under strategy. and these a starting turn success such, and talent key initiatives. framework attracting, allow Please these to all skill acceleration disruptive, of retaining the us to the scalable initiatives will Credicorp's X priorities our our of unlock review As of full Working is market in

in by countries while adding by purpose, structure innovation the Innovation market Fundamentally, As Credicorp of our contribute and our I objective Raffo, Innovation growth digital This expanding to Francesca innovation. operational expanded both the an governance Officer. our BAP Committee our X just lives our our bodies while sustainable ability culture and adding and facilitating creativity designed to the Table improving layer at on total support and the level; addressable to extra aimed is strengthening optimizing changes Execute drivers. driving at led our foster is live return that and the new on enhance investment disruptive governance our our entrepreneurship our achieve Chief Innovation mentioned, values we've strategy to by to of our need.

through initiatives focuses to their generating our remote parallel business transformation know a this strategy. competitive initiatives are is proposition tech proposal potential, Please ourselves value we with for innovation model development a and hybrid a gender work-from-home facilitating at and and approach. environment development, successfully between continuing with a and are to our This us subsidiaries, while Corporate capabilities talent and specifically modalities In attractive compensation the on strategy talent includes committed and evolving succession capacities technological potential to Our best and executive Krealo, well-being, turn objectives, and Venture strikes disrupting and and meet developing our comprehensive digital an our Talent the Center. is business equality. are of committed we're that to X. growth new approach innovation transformation all taking opportunities by while data-driven our focusing current our through internally, employees This where place Capital flexibility borderless each including talent, and that balance hiring. laboratories Slide human externally to offer and on the for To both for accelerating attract their We to addressing perspectives. managing XXXX, personal expanding retain and

Moving ESG X. on to Slide on an update

within During progress the social and we to journey. our the we especially front were ESG quarter, continue environmental and active along

reaching year. million product our doubled On in Eco-factoring disbursement quarter the first down the $X the environmental during front, of we

acquisition products Bolivia green BCP and Capital. such on imports of We sustainability financing Credicorp at vehicles at continue electric also issuance and develop capabilities to as launched

digital through financially our During XXX,XXX the wallet. quarter, we people included

initiatives with accelerated our Mibanco, our more than also supporting gender X,XXX We product women. Mujer Peru at Credito quality

Mibanco governance, first entrepreneurs. raising a at corporate good and in bond Peru. ranked While of microloans recognized women focus fund top were X the On we social best for for gender Colombian million XX $XX with their our Colombia, issued the MERCO to companies subsidiaries by were reputation among

section our You in and included approach. earnings that report outlining a we ESG will new note our priorities have

Not the upgrade to Credicorp's improved in progress We sustainability but making XXXX. also category Sustainalytics the is the this did ESG on will our we're past journey risk February our recognized by only on Leader's MSCI a ESG rating Risk be Score basis. updating that pleased market. We progress were Credicorp's quarterly December, being

Report. Finally, XXXX Execution review Strategy Sustainability I Annual X and you and on publications recent on to all of and our sustainability. our An invite XXXX-XXXX Sustainability our update

Now let the me the go who Cesar, ahead. Cesar operating will please overview turn financial brief Rios, performance call provide for a our quarter. to and of

you, morning, everyone. Gianfranco, and Thank good

As delivered we results. Gianfranco overall mentioned, favorable operating financial and

more by quarter, compared income grew The X.X% low-cost are uptick period. funding registered by was driven Mibanco portfolios. rates investment I've year-over-year income loss funding on respectively. volatility, favorable BCP As XX%, Core ongoing in mix, to base. fixed securities interest which income XX.X% Fees I an typically the of and grew of and by loans deposits ratio was gains while remained the interest account higher insurance the an asset the Other effects. structural while discussed Pacifico with also associated income results, on low, was Cost Net half-life control. which the business Credicorp to previous will results continues and transaction and FX risk by focus cost grew in Capital's levels seasonality impacted negatively XX% with a higher and transactional registered not our gain impacted the for line on boosted in net and market improve. of the

Finally, remained mentioned generated summary, by consolidated Monetary base, increasing and in from some We brief for macro provide on global to funding Please mounting reference for a in world innovation to and responded this securing rate despite has accelerate In the I'll X and down expectation the we been interest excise during prices. controlling Day, Digital a stuff as rates to to negative the to The in prices temporarily where and Peru a of maintained we were This rising substantially more BCP rise rates. our markets. has Peruvian countries. impact X.X% tax the its has rise of the their to contributed imports. social strategy. profits as quarter. Mibanco parallel, interest higher rate commodity operating disruption their our reduced capital raised achieve Central number fuels digital dynamics solid of Slide expected economy continue been The and interest inflationary inflation by I of of around XX%. chain expenses neutral move Bank our inflation significantly ROE taxes authorities supply to decisive and our to overview world. across has robust sales inflation and led mitigate expected been accelerated real crude have In a plus impact resilient

higher to and to grow a a challenging around to recent potential. exits interest remains improving, indicate per economic X constitution. economy have for approve year The rates increased to XXXX. assembly BCP, economy has the the for prices at commodity and of Moreover, measures that certainty a likely and the continue developing constitutional funding Additionally, high if across X.X% the portfolios growth impact group sub-commodities, rising of GDP still been increased has on dynamics expectations recently items Chilean more negatively of resilient. balance Colombian date. The expected approved only natural and investment as year. at of investment interest the have that value The wealth impact are increased, was payments the is businesses. context marginally grow Colombia rates X.X%, business, business environment has increase end exchange challenges are to a businesses. negative income and this our a of impact macro new outcomes our the and expected little finance long-term and In micro is while minimum banking inflation interest Peru, to board Nevertheless, X.X% on margins polls the appreciated to gas, Chile, regarding expected X.X% are although oil, to although our slowly our PEN fertilizers, climate is grow all rates of is our for poll dropped management political the in cost salary Chile -- fixed while experiencing generate mixed In quickly. copper X.XX they significantly, the high from year-to-date. are indicators political Peru These rate such across dollar the crude PEN affected,

just While strong, dynamics performance clients' we remains closely are the described. payment I monitoring

performance our Now I discuss lines the of business. will of

total to register driven structural in a our slide, segments was XX% structural loans analytics In penetrating the BCP of and interest by this -- Digital by driven a Retail grew first Next data subsegments due loans and strong income, of core new by daily quarter. the a SME-Pyme clients average X.X% structural in are to grew rising please. profitability represented growth a facilities. rate continues we base where fueled digital balances. income sales Banking, a XX% that sold by which in was given XX.X% of capabilities. effect In the amortized units year-over-year corporate in 'XX quarter uptick leveraging Wholesale the number loans short-term net the Consumer on basis and XX.X% measured interest Banking,

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results return compensation. uptick for operating true grew an this digital particularly growth at to in the the investments seasonal equity impacted due expenses transaction were in higher cost XX% increase due XX.X% average on this This was context, the Finally, In to Quarter-over-quarter, effects. by in variable transactional strategy, quarter. stood in our an expenses. and volumes

Next chance to please. hope had discuss slide, hear Yape you at Raimundo I our Day. all a Digital

to main become to is As Yape this, evolving X goal mentioned, into a with app achieve go-to is SuperApp ambitions. Peruvian's Yape's

main Yape in made low to this, accomplish is are become Peru cash. with payment ambition the cash. ticket competing network that To focused payments usually on first in The

launch XXX monthly billion that the active represent million X.X users XX average the transactions PEN to #X In had than this Yape March, XX of journey month, gross of is made XXX% to marketplace As X.X Yape users market In this amounts quarter services. a year. started day to day. annually. its ambition PEN X.X% more XXXX, transacts on month. long-term of merchandise capturing who the of number that of first objective million to target billion billion November of long-term grew Peru's active the user in Yape's for Yape's XXXX. of top-ups is a context, become in top-ups top during and is second products Yape's levels a X to with

app. Finally, users. products Yape nano more solve provide needs. Yape and allowed feature group seeks to clients goal BCP long-term Yape loans to services financial to is as The Peru's a pilot launched X through every small financial acquire the a that million lever of than to to

results channels. offering breaking boosting please. XX% the core driven was a structural by distribution levels increase of income Next in interest continues XX.X% This in loan At record income, an disbursements to a and in goal growth fueled has turn structural year-over-year play Mibanco, model was in in on The hybrid a yields. uptick assessment net in basis. centralized loans alternative by slide, led to by crucial growth and which

levels. in bolstered were operating client this partially offset bancassurance rose subsided. sales. XX.X% XX% and context, provisions. Mibanco's in payment end. after basis, drop XX%. was by On was portfolio earnings in The this equity at seasonality the by environment to quarter-over-quarter tandem quality evolution quarter. coupled the The in more largely commissions quarter by in Improvements income average stood typical with operating in XXX% were levels return In expenses, on operating in provision Mibanco led core growth a expenses growth a At Additionally, macro fell income pandemic to slight the reduction the in due a a performance more to increase return of Colombia, a in offset typical uptick by provisions core grew activity Nonetheless, marked which context in with in an strong. quarter-over-quarter profits and growth which fell

on channel. were premiums. cancellation the This a the In drop equity largely to in last is pre-pandemic investments. a in continued basis, to summary, decrease decrease policy underwriting a total quarter-over-quarter as line earned closer due restrictions quarter its an increased and to premiums reflected alliance basis. note net stands insurance the channels income impacted downgrade situation FX in high the which XX.X%, please. a The business, improved. were reopening Grupo and digital Life return All earned a to to in negatively COVID-XX positive some increase loosening stood levels. personal a recover claims P&C business, business, situate fixed reduction Claims business, P&C and Pacifico slide, evolution charge offset the operating drop at due all, ratio movements. a to commercial Next Pacifico underwriting origination quarter. to a renewal was total results the in in claims premiums net on premiums there to typical These Pacifico's context to and to complemented price in results increased improve to more earned lines. XX.X%. economic In claims. by in This earned of On increases was It price year-over-year net origination. in quarter. by primarily this contract and seasonal in At dynamics impacted sanitary Life increased that net in continue of results higher this the claims by The at the rates dynamic important by medical normalize was subside led as of impairment due P&C of assistance a loss mainly due line and adjustments large

reduction withdrawal. fees with and businesses Banking volumes which sales Next mix drop rates funds trends, fund fund in Asset XXXX. lower In last of results of transactional assets year-over-year remained Wealth and contracts slide, Wealth third-party scenario by negatively Management and both volatility. XXXX, deteriorated. year. and registered this value where were of finance in and asset by by offshore impact quarter please. market of dropped primarily Peruvian lower Furthermore, Management as management outflows. in uncertainty Asset Corporate The is seasonality platforms, driven from affected in negatively pro-corporate businesses. quarter business income to first market of and capital upfront impact local less finance the quarter-over-quarter, reported quarterly the Also, the management Investment management challenged volatility in and The Total year's the volumes gains impacted In current Wealth be line context, and stable last by of income are income income These year-over-year the outflows impact seems impacting profitable market Management X% higher a environment, of our the the in reflects affected Mutual fell businesses. also activity values, in higher was in In but market which and materialized year-over-year. of the buffer from offset the proprietary under fees assets redemption were under was the and quarter-over-quarter. Fund third-party portfolio and income were securities anticipated lower the and management by at XXXX the political of

campaigns and We are penetrate net recover new money. segments new launching in to volumes to different initiatives and bring

results. explain Next and slide, dynamics net interest consolidated net please. interest margin will income I the within

asset the income increase asset increase average XX.X% was daily and basis and currency XX.X% currency as basis equivalents such, more X.X% which the expenses. points structural basis Our XXX short-term in classes loans gradual foreign in government of: increased interest and in profitable average minor of XX.X% cash program yield lower balances in year. XX has effect since XX increasing which changes with increase and And points the such increased interest income of while August interest liquid yields. which mix portfolio, reflects only primarily result of interest yield as in on income year-over-year market interest and total measured assets volumes, The in of decreased. an year, loans a by last rate asset asset a of of and increased rate driven investment in an points this reflects the net rise reduction a foreign currency yields little local The the

XX% first structural quarter of on this to year-over-year low interest yield our of by still and impacted shorter-term charge the base yield wholesale management nonrecurring clients subsequently, effect by expansion our a been by and key loans keeping for that points has X.XX XXXX in liability XXXX in is banking reach fact interest increased deposits deposits. this average quarter. by NIM partially the was All expenses expenses to time reflect an 'XX the in in quarter. The interest control. outpaced retail low-cost base comprised bank of in on the under generated Our disbursements bond, is XX all, the and stock loans wholesale lower fact of reduction growth interest basis a in funding rates that to in The which expenses offset recurring increase in

sensitivity increasing in rate local not mainly interest assets, of have balance rates and we in structural relevant structure sheet currency particular. concentrated that growing and factors: is Given floating in our a on First, do X to forward, will depend loans going volume our

in accelerate been rates has which hikes, rate long-term foreign to short of a in target magnitude in currency. has and currencies the and it local substantial Second,

in And assets side portfolio on loans. to products loans market degree and our the more rates, consequently a pass-through wholesale time wholesale liquid assets, or asset consumer of liquid lesser the duration duration faster. Third, the on finally, funding short-term have X short-term and sensitive and side loans and a with of short-term the to deposit situated are where liability lower than equal short-term and investment, repriced in year

POS growth bolstered context XX.X% was X.X% XX.X% of each FX and on by transactions, which and its in establishments. and in adoption, that note to increased Year-over-year, to in in establishment year-over-year cashless uptick year-over-year, in grew a FX It transactions strong which please. is important reflected income income consumption at by driven transaction components. slide, transaction due Fee to and XX.X% consumption growth growth by volatility. higher an Next a was respectively. Interbank gains core marked transactions Net small XX.X% increased increased

seasonality. core our We Quarter-over-quarter, income, distribution have increased growth due net FX leveraged X.X% in and while income on interest front transactions capabilities. pricing to to fee income due

evolve portfolio, not and period. an in points. a structural please. volume led increase banking to ratio bank fell basis to XX SME-segment improvement I structural drop NPL seasonality. provisions primarily On exchange led delinquency loan was move payment It favorably volumes and slide, Reactiva contracted dynamics. and overdue to mainly wholesale Credicorp's within you. [Technical an driven loan in a expected loans Year-over-year, at period with in noting behavior the Thank Next better grace reprogrammed risk NPL BCP levels. loan slightly new now in increase by rate in with improvements and with disbursements quality and a banking have behavior NPL structural Difficulty]. payment growth to clients in to grew The were in led contraction, This continued the Year-over-year, profiles. NPL during that effect structural retail due an the in cycle. basis, portfolio that loans the is which worth Mibanco. due and client ratio retail that have payment initiated XX.X% will quarter-over-quarter that Mibanco's is structural to and loans the an to increase coupled volumes This to increase structural

levels. at this historically expenses ratio grew in registering levels constructed provisions X.XX%, In a mainly pre-pandemic to fourth of context, payment the retail I trend the Sorry at after point. Mibanco at originated due of improvements coverage due risk XXXX. for less this recently the stood banking, structural profile of and behavior to where towards retake in technical to normally risky going Provision this low quarter loans. -- in quarter-over-quarter Year-over-year, cost problem. am low

transactional volumes year-over-year, which an Operating XX.X% expenses in higher Next salaries administrative which transaction slide, the expenses driven employee and please. in keeping in due earnings pace administrative a expenses and in digital increase cost to Growth this by the disruptive and was an The of increase salary was context year. and an reflected up in anticipated transformation this increase are benefits. higher compensation line initiatives. our grew reflects quarter of variable

Credicorp's in model from ratio result, we XX boosted XX% points disruptive XXX represents ratio a of just that basis Yape XX.X% year-over-year. hybrid efficiency enabled by check such it As Krealo, If stands efficiency exclude basis reported deteriorated expenses OpEx as XX.X%, investments by efficiency has a in XXX while and a initiatives at basis Mibanco's keeping points points, at the year-over-year. figure. ratio improved to in increase operating the difference income for growth which

strong this banking upcoming a to and In XX% capital with XX to businesses. a of dividend we plan generating summary, by dividend our capital year. evolution and this By our paid complementary quarter XXXX continue our maintaining investments, in the announced secure we a results driven distributing payout we Last to may ROE results, gradually which of evaluate generate in across week, year regular PEN businesses, share per of strength as we was reflects Next June, our the increase be primarily last robust profitability. return of in equivalent be slide, an positive will This to please. quarter, consistent a payments. XX% position continue solvency dividend consolidate to we to and dividend

Now I revised will explain our outlook.

please. Next slide,

geopolitical the guidance adopted current situation the typically for Central have Bank, the measures Given by our XXXX. revised and we

portion rate Our We impacts structural towards the loan XX% SME a between an in that the believe NIM loan more experienced and additional to With we X.X% especially GDP growth at of related loan micro for we The X.X% Retail insurance remains in finance daily results, COVID-XX expect expect significant retail, have interest and balances. impact segments. and and to to and be X% been quarter growth and our portfolio between should average regards has absorbed situate increases shift year. estimate smaller. consumer, pace in unchanged uptick, this this underwriting of year. this accelerate grow now X.X% measured

carefully monitoring profile. clients' and risk are of inflation our part payment the the We on performance higher

not cost With we income and the different maintaining that and that have income, feel across to this also for fees interest information year segments. but gains today, only our risk X.X% through net of performances between the comfortable we transactions X.X% guidance range reflects us have the between Higher-than-expected the this initial result, and to our Based expect XX%. of the led ROE an around on for FX adjust on vicinity range to end high in guidance achieve of XX.X%. XX% to of ratio efficiency we guidance

these comments, session. Q&A start I the like With to would

Instructions]. [Operator

Our of first question comes from Ernesto Gabilondo Bank with America.

uncertainty, us financial the if Difficulty] sector? your a question could be regulation the on recent political some Congratulations potential results the my your and provide regardless guidance affecting the of [Technical political uncertainty? on ROE there you So first is on macro color Can outlook.

Okay.

the question you morning, Ernesto. problem. to for answer. A everyone. Ernesto Thank Good Good technical difficult your for Sorry words, morning, Ernesto.

the there's being turmoil. same As a that time. A you might lot be reading in news, at juggled lot are of balls of the political

However, this going as doesn't any regulation. system speak. nothing That on We don't there see forward, we time. the specific anything mean that financial be specifically as might of

Okay. Perfect.

mortgages, So then in products higher the interest is and as my loan rate. could have specific maybe on level second the expectations. growth impact an to high think activity some inflation is in long-term growth are such question the fixed you interest of or what you do at which Considering start and which rates, see loan the rates

Cesar, can you take that question please?

Yes. Ernesto, thank you for question. the

and the corporate market segments rate in part challenged a interest combination operations political What of investments. we growth are the in are seeing impacts general pace being of has the pass-through long-term see in of of some microfinance captured I are the already you framework. already also deterrents have very think by is rates good we higher to which mortgages, middle already our in in able in this of long-term guidance and a and further clients, consumer uncertainty

Pyme and medium-term operations. consumer, in So different dynamics

The from next question comes from Scotiabank. Mollin Jason

for is mainly the profitability. outlook question My on

big You good about we Prima at generating And of but do guidance ROE the the PEN the Mibanco pretty and evolution a longer-term in bank, BCP, at course. almost we're Pacifico XX%, Grupo subsidiaries had XX%. for contributing Pacifico then this I with group seeing XX% In XX% over improvement, changes contributors, million ROE, ROE range. story imagine would quarter, -- has with should a XX think pretty imagine at tells a the BCP of Mibanco Credicorp. XX% ROE? contribution. talked think, been, at XX% constructive How the to Pacifico lot almost XX% for contribution these we of about the largest you Clearly, of BCP, in the I an at it's the the

and going Prima see what's to -- on. So

If give outlook, sense a be to of you helpful. us the profitability the outlook, contributions that the would can

general in expectations Your terms.

we Jason, I'll Cesar, portfolio. take then want to feel maybe if answer, as and conceptual add a it Actually, you see something, free. more please a

COVID. the the business, to So But the specifically trying mid-term, the to what banks, the And the environment the influenced pre-COVID end BCP improve on -- that, by ROE to the mid-term. that's the by obviously, for And in would that to in expect goal goal. Mibanco talked related to said Mibanco and back Having obviously in very insurance year-end. in of it's say, coming moreover, and teens. ROE, we BCP end, an and or ROEs, the is is but I depending subsidiaries, to, to performance overall before, reach as aim high each always we've

in insurance there impact This type relevant anything know, business on ROE so want else? was going quarter, of of We the you impact don't still the in forward, if also any business. business, don't further some I Cesar, see insurance should add profit to improve. the terms the in insurance impact

this is only pre-pandemic. to risk to Yes, expect return more probably case of higher in the little But cost overall, bit the in margins profitability, is ending are case to as the a some same good the line, challenges Gianfranco Pacifico, similar color. to to XX%. superior cost we a have funds. and putting to In short as have In BCP, we going to having having of dynamic probably the are improving, and In mentioned, term, the up mentioned, they higher are quarter. we Mibanco improving. going which probably Gianfranco of profitability due and of levels

of these some with the midterm with the impact the We have and that I but X% also comfortable these of term, the short And creating down with our from the consider to improving we operated we of think cost In dividends. we in business building income, around And to probably for medium the a perspective are the are in road, Digital term to still grow figure been profitability in of short-term In the the but And and the high profitability the biggest Day input teens to corporate COVID close digital future. need providing That impact with in we factors, grow the going we we withholding sales. that. some All in are disruptive feel correlation results and in and initiatives midterm. banking, the tax. for in all, due in are and caused, couple see bancassurance sustain the finally, business management, provided we these is businesses general challenges between guidance dynamics. that ballpark market the impacted that expected significant and a short-term investment all, line to growing impairments, the see a business. for

Tito next Goldman Labarta Sachs. The question from comes from

change how particularly think to do in understand and structural with see your risk risk want is you historical cost sustain is levels? didn't noticed you My coverage -- your I ratio coverage question these the cost you on line of deterioration, I of just ratio portfolio, around long guidance. slowing, growth levels. did is SME some in GDP we the the guidance, but the can

I longer-term And here When on cost So with risk? do NPLs. this basis. on you that, I thinking from just quality normalized risk. one have of guidance of a guess the get the the to on know outlook then you for levels asset the about is in back but more year, it for cost

Reynaldo, please? one, would you take that

the semester your year. will you, for of as level rest the levels provisions the this Having these with by mean for comfortable normal is of we the have the Yes. year mentioned, XXXX. below second Thank the expected beginning Tito, back of of I And to pre-pandemic it get today. question. said, by year, feel we we we'll

in country quarters. in want portfolios. to said between the I to I of see are difference following the the think we'll the conditions that, Having the have still different emphasize average, we how levels. the economic develop coverage in terms of And ratios above pre-pandemic

coverage XXX%, Credicorp's it portfolio And levels, And our a which no XXX%. And almost presentation, BCP, important also we was the collaterals of XXX%. that's in collateral. has remember, is which our pre-pandemic there. see have with Mibanco portfolio around nonperforming has You above in

quite space have levels. some So of the with year this the would further without we and following for profitability I actual we comfortable say feel affecting years. still that provisioning the I mean

guess, When improving. deterioration Great. the expect segments SME also other particularly, in And you the That's further? there? portfolio. see Other any guess, these outlook. did helpful. Do improve you segments kind asset We I follow-up, on deterioration the do And portfolio. on some of quality just SME to expect a some still I

was there on portfolio well? but think as how see you there, some for outlook I FX that do impact

write been own the government But and see increase this programs there portfolios, a an of quarter, during that off effect including the terms we whole you non-performing loans. the In portfolios. the we in special it's portfolio, our write off has SME backed SME position,

some takes a months. that So process this is

authorization and government actual write-off delaying actually BCP both the the of are write-off for Mibanco, portfolio, So the we some SME of waiting the for in the to loan.

paid lot expectations. are portfolio mean, seen SME be below government we Remember terms the said today. is and what that loans the there I I deterioration it's of like mean, by that, of portfolio. Having some receiving starting to performance our of have feel the in our the you expected some report. in of of projects a comfortable the So with we the numbers clients

the to segments probably start loans. come loans And are personal wholesale will payable. book the personal [indiscernible] of we of starting markets strategy the the terms our new the because of little bit a say underwrite which to segments, would just or with other along real in be would In on I the portfolios, pick up little a

comes with UBS. Arthuzo Olavo question next from The

renegotiated in my Tito the is expect selling from or you I these just in rates SME well renegotiated one and can I mention Actually, loans the credit from question the wanted just X hear just portfolios. hear for behavior this the selling couldn't what very in quarter the of I release. for what we the alone loans wholesale understand with portfolio from you portfolio. to to about or further, made the year increase And segment. delinquency delinquent the wanted next credit do to as and I about any line of the because about for you wanted find expect of

wanted are portfolio? the expectations these more bank So I going related forward loans of credit of potential just the selling and to from for hear to what you renegotiation

I'm watching some in hearing Reynaldo. was troubles He having you.

got I your question. think I

So things. correct? portfolio is that do second is is that one let me One me got Reactiva it and I how overall Is maybe the program interrupt wasn't going. two answer it is going And the and the What forward. question, your if again.

good. it's yes, Yes,

hear you did Reynaldo, me? Okay.

mean, would wholesale portfolio. months the pickups have I say, rest in for of I the probably and following see year. we'll in average, probably the stable we'll an will for the be portfolio segments some some the or I results at mean Yes. better

our good when year-end the That's a in the are seen I this first than things in better why costs So you've had and of mean, of looking average, XXXX, our made. quarter. I by a forecast books -- below we initially say, are would bit we guidance all are budgeted performance

of numbers that's around we X-digit today. number loans, in Reactiva default the had of a as terms We and in expected. of today, of low Reactiva, than In XX% as the I better mean, are general number

So well well, pay loans the as trying general sure our help I we are bonds a government-backed as clients debts pay also clients well portfolio mean, those that have are making loans. to own we to performing government and our policy both because as of

comes with next Elliott Geoffrey The Autonomous. question from

a us terms of think when net like you it positive I'm very both seems us can rate few any environment a have And has a mentioned that benefit in talking And interest months would earlier rates about think that to sense much than was shifted as ago. go The of the it's of clearly faster point there I deposits into you much or higher. a starts out is margins. repricing decrease point, I at think And accelerate this demand, you for deposit for you'd give point less to credit see you But expected where interest-bearing. level, of if it and could see a there you start as consider inflation up, terms in where credit but quality, as to of positive also, noninterest-bearing continues of continue it go to we'll is think positive? but accelerate, rates to now, a shift if start

Cesar, can you up? take

in is you significant a as really factors goes capability. it which I the most rate. our of minimum, actually our also the balance Yes. the loans repricing part will back at to for Probably, Geoffrey, think the part that of thank main sheet, And fixed variable back impact portfolio, it structure come question. I we to don't have the

had in the So market that increases. to short-term have now, for we need solid, rates interest we in but in dollars, of increase quarter What significant take the we to to the and are rate from long-term interest is, portfolios. third in relevant, rates the last a have wholesale year particularly

has the know you real As this than only us, to happen better increase started year.

we in at this only point. books combination and are looking impacting what moderately books is dollars So our of our really a solid very

without and can the the particularly in there which care other rate, we the long-term have of carefully, the is of reasonably competition, We portfolio, the affecting through because translate lot but in the interest parts we with mortgages. rate parts of but are demand, a passing are portfolio interest loans, there

to going we a of We and which long-term, in real are and high to rates in we sustainable. a too and of what The challenges demand. nominal and this in expect myself, combination around see the think I is and we a little to in and longer-term short-term of pass-through facilities X.X%. next mentioned, interest rate general our point, rule. and goal I Bank X%, But in corporate that we long-term a have to volumes interest all, bit X% half All this middle facilities solid probably companies have of inflation good middle for because the rates seeing, year a is be of after repeated an solid some have high are rate have are year. as As is challenging decrease with the environment Central

rate, and starting if So increase in in rates. the hamper this We we decrease don't much probably helps I at too growth. see know should economic this next you. an don't year, of middle a

does. down quite your comments on go optimistic. to like I guess again, it That sounds from you're rates expecting And

from truckers Bank On nearly the is to unhappy. reverse? seeing inflation X% year, you're you to stickier, the think for outlook there that. kind the that Central in anything inflation are entrenched, Peru that makes clearly, might the of going We know But last more be X% getting over harder

import, of the price I key is difference. inflation In with significant that the Allow It we this of the inflation our me of a demand driven, was a case. things commodities, a was driver local rates, In most only driven you. agree part comment. in and demand for the not but supply to inflation we not make the driven a for slight the rate, part. a It's that have probably international

Garcia Credit with Suisse. next Alonso question comes The from

dividends. My question is on capital and

of last level So forward. to XXXX XX of are which even going last year's the XX% expected you accumulate above a are capital you on minimum is to per payout represents internal around the below which a CETX you your earnings fact prior share, XXXX and of you though on week PEN announced dividend XX%, still what based and paid pandemic, earnings,

seeing this on for your are capital, conservative what is, led approach Or if a uses question more second you something? opportunities in the maybe could expect my take And if a So you other later we or some payment year? M&A to year?

stated, we've Alonso, dividends. quite simple Yes. always a to distribute in order as it's equation

if to retain everything So safely. the on portfolio the that. there prior the you our of of there's nothing said, that, in excess year, is, bank on an of as On profits cash M&A for terms needed distributed. opportunity, made And keep as speak, whatever we the keep out is we table, top we at of is top we some relevant that, which growth

now. for dividend times. second We've several be policy years year, that's the more special the of a So been it. again, that, And stated on the we've few do following we to specific might

we you move giving slightly vision maintaining anything We try divident, forward we but haven't policy dividends increase yet. a more as to regarding decided same following long-term Maybe will is that over years. the the

Okay.

growth, mostly it's loan outlook to related for you So the right? see stronger

correct, correct. That's that's

comes question JPMorgan. Yuri The Fernandes from next with

OCI markets XXX Congrats million, on very quick I million increase, volatile, your you here? on the my rates. guidance the We have PEN some on and have FX, the one expect equity. impact a been saw results is guess, PEN what question And I this Because XXX quarter.

this OCI like of the is the we lot. would up look tenure moved a since to here tenure, Peru, parts my like I here the when your moving equity to concern growth. for So March, in it understand And

because keep guess accounts So later dividend my is potential if mentioned is, payment, question being during should impacted this additional this I year. your this important like dividend for your should a payment And OCI year? you expect we

So later just trying impact to understand your how year. this could payout some in have the on

about talking If you're it bond portfolio, I the sovereign right, got right?

OCI you of see portion equity, Yes. a guess, it's I'm you talking And right? when quarter. big shareholders' lot to a I that. there about talks this look a Like your was that things, shareholders' of negative treasury, hit the equity. the like

take Sure. that can one. Cesar, you

Yes.

of that as the you of have to gain equity a path effect due of explained, period the some of company, losses. the regard, groups Gianfranco levels increases the of follow have profit the in unrealized this the and we dividends, establish in and negative To mentioned. the current we Okay. And rate you

ratios and our prices are our Credicorp in going are in books right, that have Pacifico But have, change first that of the road. have ASB, in relative you some impact the nothing solvency Capital one, the BCP, impact this rates could a next several we but interest through and the the affects particular. We in fundamentally rising, quarter, in or in are long-term we investments think down and had we the policy to probably

with The comes HSBC. next from question Gomez Carlos

I have that probability or on more is discussion in a the in current the question no pension to changes mentioned, been I the the constitution? changes are to And regulation. will to discussions, on what has the the we But about bank have you side. where the there mining sector? funds political we as mean, changes

answer in Thank We you, roulette your to can question. order Carlos. play first the

change and low. in the but not in as I was recall, met with the was, of ending I the most you that gravity over mentioned, you still believe the that very March in table, at We If probability constitution discussion time is because Maybe low. That's that, table our March base scenario case on wouldn't change changed Having case is base Congress. is to the what said it again. that is scenario. has from the shouldn't pass that our it today March, through

changed for actually, is healthy the whole that promoting As system. we been is mentioned regarding there more some financial system, what which believe regulations competition, has has I

been lot to lot mistake. the place, legal but structurally damaged of pension a pension pension years. over would a I pension not from is a fund we we as speak, thorough sector, speak. regarding changes mining happening made seen because what the pension huge reform fund opinion, And as anything released. funds structural of In the damage the Hopefully, mean that's because another it Regarding funds, into system overall and comes has yesterday, we noise, last say, of few approved haven't our being I but any system. a but was Actually, this the regarding fund, that has been, could low, withdrawal of be

Okay.

So for now? no changes

Yes.

Andres from next Soto Santander. The comes from Instructions]. question [Operator

of related country, looking you what the that is comment And that portfolio. But regarding system, in same question My In for time, get as at management on pension what sustainable. you profitability the is based and past, subsidiaries. say pension need the a pension of at a system on one. curious the insurance that the at imagine, as the particularly from your is and the by in And this I I I this management the ROE was just the [indiscernible] that reform, business we XX%. is see withdrawals to said, profitability not structural insurance you nonbanking look unit the the structural was probably going

impairments is at some XX%, Now and with impact. it even COVID

thinking So of to enough medium what over that the for reform should term? offset fund? the the about we going structural on the is pension be profitability be any to impact And insurance

there to Yes. actually, in -- that questions answers were X one. Two

Regarding short in the insurance business, I returns, we expect high teen would say, run. the

the For on The even will this has the core of business quarter, healthy. the out very it impairment investment. been take

expect insurance -- teens in in be business high this teens So to end year. we even do the the high the to

that. we're very on positive So

lot As focus of importantly, insurance most lot a initiatives, lot always a in that business, helping bancassurance the digital is including little a of initiatives, on but the business.

politicians, Credicorp, at I'm pension Regarding trying -- when that's a for us results worried pension to but about the pension to us We the we in that fund say and proactive millions next where decade. structural need again, come up just that we, for more reform system is not a our with this are than a as forward, concern be pulling sustainable whole funds, going and Prima. the really Peruvians real and that's I try of for it's and mentioned, specific the pension propose build focus can on to system at they system I risk

The comes from with BTG. next question Alonso Aramburú

on fund up pension time to more the one wanted I withdrawal. follow

right? long ask certainly term? the But I short get of a the And good policy, will would you, impact for what great you, an or sort Cesar, So is in to system in for the is costs. agree probably probably with this wanted not Just which increase Gianfranco short you withdrawal, fixed be funding term. the term, in over the it your

you in of I are what in are So impact second some short can to the talking seeing potentially private maybe And funds you year. the fund those GDP few And X.X% Where investment you investment private the see to the exiting quarters? a entering the Peru. the pension -- us terms over for hearing in could private next believe that in color work you system. company related term estimate you with investments? general the of what forward what moving do to have give of question this and you as be banking or

first the Alonso, Diego, know and take one second who Yes. Cesar the don't maybe I take I'll or one. can

a the pension up funds, end, of withdrawal So and deposits, liquidity, have in because strong we this in of funds excess those very overall, the retail net end deposits. in position the because

all withdrawals one. we a deposits, going share don't before, know, Alonso, have are chunk mentioned But side what's Prima second in we going I either the in more side. the benefit up specifically get because in positive question, structurally Diego of forward that. those the the important or concerned happen end what's as So we the of going on answer than we for your got to of about know, going because system, market for negative can in as Cesar retail or to I BCP we an banking

little impact. Gianfranco, extra expect rates, to a add be one to answer, view, to inflation probably going that with interest short-term and propel we more probably Only your is is local bit is macro this liquidity going more can the comment I small what a what

regarding investment, Cesar? And the private

really funding Regarding of forced X of key terms of local table withdrawals player facilities, regarding to pension adds fund of bonds, long-term these out they private impacts fund, instead have because are investments, of the couple you buying the over private uncertainty factors, an are long-term the sell to goods. think are and in extra the layer funds, the with pension we taking going to because a I

investments all, one private a of the We grow and private being of that in investment expect all large year. business So investment say for they also most held wait terms corporate in terms are maintenance I see don't going and negative is to I mode say, forward. current this sentiment, while impact. are And would investment, in are in would

to back further now Mr. are there Ferrari, I for will this over remarks. no appears call Officer Gianfranco time. It the closing turn questions at Executive Chief

the interest each capital in banking have rates turbulence wealth progress priorities investment experiencing of for a up, Credicorp. negatively recent solid managed our impact consistent for the our experienced the our the strong made advancing microfinance but investment challenge also our portfolio. on to we helped and volatile journey, challenges over quarters global businesses digital us BCP, underscore and this the you, generate Thank focus dividend also power have political earning management costs quarter and income strategic business. sustainability best to at deliver contract dynamics increasing Peru, despite of These in interest joining XX share tailwinds, value increasing and near our funding this and PEN in all, and business. of call. profitability Recent to terms the our our for local And strategy, on a our maintain rates discussed strong represents announced solvency results instability been Wrapping our talent. and week for high cash call: of deliver with us the per our conference Credicorp's midterm we across Moreover, execution long-term X fixed strong particularly shareholders. last and inflation markets and on during generate recovery retaining on goal escalating

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ladies you, and today's concludes gentlemen. Thank This presentation.

now disconnect. You may