Credicorp (BAP) 13 Aug 222022 Q2 Earnings call transcript

Good morning, everyone. I would like to welcome all of you to the Credicorp Limited Second Quarter 2022 Conference Call. A slide presentation will accompany today’s webcast, which is available in the Investor section of Credicorp’s website. Today’s conference call is being recorded. [Operator Instructions] Now, it is my pleasure to turn the conference over to Creditcorp’s IRO, Milagros Cigüeñas, you may begin.

you. Thank everyone. morning, good And

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

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

Good presentation. for Thank joining slide earnings our us morning, you Milagros. everyone. Thank to you of today. Please X turn

will balance our in operations, another customers sheet solid financial asset continued we more delivered quarter, the and robust quarter shortly. digital to advance initiatives this on Cesar increasing healthy the maintaining results with across detail of advancing During inclusion. of quality. execution on the and while discuss set We financial a closed strategic

even navigate to geopolitical are leverage current additional Importantly, challenging positioned well as we opportunities, environment. the we

time and goal services to investment, its of The short-term need spending fundamental of and as can, damaging we in meaningful at underperforming. expected lack like country our year we’re to decline particularly Credicorp, Before is areas that this to economy. too I comment our a discussing Peruvians context the authorities, and much especially which citizens to to our not to political Unfortunately, specific to operating, with country Private assure it as like execution review a I’d long-term the turmoil up I’d for the execute our of in set on requires order been enough make strategy of in businesses investment we the Peru. better our truly at fellow core stands economy its on direct doing discussing to advancing we those Credicorp how our consolidating securing efficiently our what part, areas and how disruptors. our capabilities with now our are instead well committed to private institutional of while of all, public doing our sector accelerate public safeguard is out framework but inflationary to this across building [indiscernible] government of wellbeing efforts matters focus public political and context to we growth. health difference of own in The a and enacting investment, private and have the are certainly Credicorp budget and turn potential is consequences. the executive at and legal the addressing its with branch, stability the will measures promoting

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healthy, ability we franchise well, built resilient have with environment. to a in and this years, profitable perform the even Over the

those the capabilities risk laser our strong in balance focus Our asset strong attracting with underpin position. liquidity with sheet, attractive offering across board, proposition. topnotch value together on our and quality, an successful tech well-capitalized We’ve been management through and including very talent

our support the for retaining and in will stakeholders ahead, only the we Credicorp’s this talent on the look for more continue in agenda attracting out to also all leader, of strengthening market situation countries position as plans we but we aggressive which digitally not pushing As focused operate.

agility the which flexibility, has how is our particularly environment considering Finally, team, the I is would that how management to like changed as future and important we vision and note pride for evolving.

we’re our such, a business entire portfolio view. As with continuously strategic reviewing long-term

markets strengthen Universal Microfinance portfolio. we Please While top model, we’re our fully Banking, driving In leadership we to prioritize news Peru have specific to committed is across slide of Columbia. as turn a in and our strengthening our X. at further guided maintain and can Leveraging this we we core note player leadership our it hold innovation each presence a Peru, point, in on markets to of position. work-class is are operations our to leadership in position expect by where and position focus our our our of operating our no that consolidation our and chosen segments. important the to consolidating Today, technological in goals business leading focusing while

front, the strong while adoption robust our solid ESG leading businesses; is while retaining Insurance that maintaining further areas best-in-class expand as our bancassurance goal underscored On focus risk changing the our capabilities; topnotch parenting to operations. priority advantage strategy, Simultaneously, of integrate we’re Management and channel by lines the growth. of I our of of midterm the and given for our leveraging digital position of driving to talent, currently we’re environment overall our Banking ensuring enhance management businesses, continuing previously Investment our include attracting business. reassessing the at solvency our core Key and capabilities while this our all capital each of noted; business, to profitable Wealth this across introducing sustained

our X. horizons disruptive three pursuing over we opportunities slide Turning also portfolio, growth selectively business across distinct Complementing current are to time.

and pool. Acquiring, others in investments. and first Yape comprises for The in specific horizon in our front in on Peru and services Payments, some include around Tenpo ventures SMEs. space, this Chile very established profit core strengthening incurred We’ve Neobank This in already the attractive Culqi

of exploring the new we example, and where, for Peru Teba Insurtech. entering Chile are markets currently comprises region, in Columbia, Andian horizon exploring our points has And the portfolio enabled business up an presence third escalating already XXX Tech, disruptive second which models. year. could The ROE our and verticals Wealth basis horizon new and We’ve finally, in to disruptive technologies impact determined in and of Peru, as that our ambition most for this consists in expected

to businesses. and internal performance. thus benefit we with portfolio, three funding commitment building, sources Please to are to and are to will complemental line of slide willing this, of securing success strategic sacrifice be we In ROE the measuring actively through We’re X, ensuring diversification thus efficiency Creditcorp’s turn based strategic our more goals, financial contributing innovation than thus and and the metrics Credicorp’s sustainability monitoring on short-term of portfolio please. the the

on leader. quarters, we during shown milestones slide become As achieved that sustainable new business efforts X, reflect the our a to

key completed find opportunity. environmental portfolio clients, management developing the for Advancing book, First our is solutions for on framework, we’ve extended sample soon. our Bond a Peruvian green to sustainable BCP’s taxonomy the whole loan Green pilot of banking a International the we focus of ESG system. sustainable finance This issuance representative On including which the our risk be of enabler to on front, more of will the our

million Mibanco over to front, over XXXX. financially milestone than a lending On financial this we included reached past X X.X individuals financial continue and the Yape several its through quarter, years. XXX,XXX education financially since to has inclusion of reducing include businesses. November people products support more social used our the

and XXX,XXX financial beneficiaries Our this in reached education Mibanco quarter. initiative through over BCP

ecosystem, merchant virtual Mibanco’s Yevo, assisting and front, managing in tools SMEs’ businesses. the with their continued On digital entrepreneurs growing

corporate policies are rights corporate our available our published investment, responsible Finally, we and sustainability, website. recently on human in which

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

Thanks, good morning, Gianfranco, everyone. and

dynamics. by As Gianfranco I We key delivered growth. assets loan by we grew the [Indiscernible] to want our some driven Mibanco. start X.X% to financial BCP and structural fund and solid loans results. decreased liquid aforementioned highlighting mentioned, quarter-over-quarter operational

to rates. migrated to take higher-yielding rising clients of deposits deposits, advantage Regarding

represented structural by cost follow XX.X%, to volumes of and the gains less reflecting levels, different us ratio environment. outlook. and the fees to of funding volumes loan terms cost volumes of Where quality, FX XX.X% were despite registered income, current and trajectories. respectively. low on rose driven risk structural during In keep a under low-cost to this control asset interest that net deposit X.X%, favorable including X.X%, structural challenging were origination perspective, X.X%, year-over-year base. a allowed strong XX.X% NPL while loans stage up down structural income, growth strong In From management provision deposits Prudent the for a the dropped scenario, X.X% macroeconomic set a transactions, and today’s core pandemic expenses risk XX.X%, of

which the at and is non-performing fell an secured capital indicates than equivalent to losses consolidated level allowances continue loans XXX%. to Insurance In maintain of of our this while recover structural the the of healthy more business track business, percent maintaining on a We profitability. quarter stands and In insurance summary, on businesses, to recovery banking for its ratio loss sound ROE coverage the Credicorp for and that loan back XX.X% the points, base. structural X.X% structural XX loans

China. affecting in end highest of was Peruvian reference tightened the Peru resilient a a quarter. economy expectation, coupled many will central Like a central inflation, a as end loan X.X% policy This persistent the the around is high system. scenario banks that of inflation [indiscernible], around copper been grow cut the in policies amortization, in in has the liquidity lockdowns banks has in At drop financial the raised policy, has please. its slide, monetary Peruvian tight and with to levels the Ukraine first inflation tighter maintain decisive remained in since year. IMF by world forecast Central in this Next We controlling The GDP prices XX% monetary rates, forecast combat our despite global Peru July, reactive growth war the the monetary around decade. its Bank exacerbated

Additionally, Colombia and Chile grow to are and X.X% this year. X% expected

address this economic as In Production reshuffled as to measures Minister under Minister, new growth an and to announcements. is please. It’s who new experienced changes. the Kurt its Finance material Finance did neither. President important deputy of President President Castillo Minister address upon of implement the as Prime Ollanta accept Minister appointed and touched Burneo, cabinet that Alejandro slide, presidential investments economist not new served XX in previously week Humala contained Toledo. last no July his to no resignation and under Next X promote Peru, note

front, from to publish excess the their of minimum of the equivalent accounts, the legislative be basket. potential bill the value to the [indiscernible] the fund to days When minimum that could must to further given the allows affiliates bill regulation. need to law the of its balance private in the attain Executive aspects, this such has calendar the On additional pension. on published, withdraw key required amount This impacts. system stipulating regulation withdrawals, levels Executive better clarity pension for of consumption any assess basic wait pension material This in is but to legislation XX we trigger lack

a face to by operation that or by both for future. reasons a expanding the the Executive sectors. on Sunday, new will Colombia labor activities the in milestones and on of increase a gains. front, that of could can companies exemptions reject Minister part office disrupt company business outsourcing capital for to core unions regulatory and individuals, the legal constitution. last Xth the scope in is taxes new the of On Chile, the seeks to business held which September Colombia, of prohibiting Gustavo implementing referendum more of high-income be and and which proposal for and respect dividends and reform announced In approve framework With strike, some important rigid the Finance Pedro are his tax Chile, near the to operations, took In eliminate

slightly has constitution. of favored aforementioned the poll rejection the the far, So

Additionally, a debated. being reform new tax is

Next slide, please. profitability. continues strong a BCP register to

this and of after was due income a the growth cost rising And dynamics, funds Regarding an on of consumer driven by market in low-cost PMIC line SME key quarter-over-quarter with deposits partially was corporate in the interest trends. offset structural net in increase to by mainly context segments. interest loans, contracted rates, an uptick

clients, loans XX.X%, quarter. a basis, grew reflecting Regarding quality, cards expenses and consumer in last unusually measured interest capital quarter banking by net year-over-year, by loans bolstered new loans, working disbursements penetrating NPL driven driven expanded and during increase rising an of PMIC, XX% daily to Retail ticket within analytics net by provision rose base growth credit Wholesale balances. many due the foreign interest by second driven leveraging lower increase and we income, secure asset volumes in by a XX.X% XX.X% increased corporate year-over-year which which currency structural average of and structural Banking, income were of data SME which to was loans sub-segments in mainly where On expectations uptick digital was financial rates XXXX, an was in [indiscernible] pandemic. XX.X% in in low channels. the by in had driven Expansion

at XX.X%, In transactional this an particularly to stood transfers. through and context, program and by bolster for XX.X% banking provisions Additionally, for levels, compensation fueled surpassing cost expenses capacities, transactions an XX.X% credit improvement driven investment IT targets an decreased disruptive sectors. income this interbank use, driven more initiatives. uptick transaction by by driven in behavior Operating benefits increased Loan business quarter. and payment in loyalty mortgage efficiency and the expenses corporate was accumulated BCP card environmental to higher in uptick ratio by growth, in grew XX% ROE transactional XX.X%, POS in

achieving active X By in amounted million more as advancing main main billion million in Yape Yape month. per than made, categorized average, Next XX its XX on these Peru. Approximately affiliates slide, June. network please. users, focusing three and transactions these ambitions. are to on becoming transactions X SuperApp. users payment Total important the With users PEN Peru’s is most is to monthly become goal

in X of Yape of a Yape In more November June. addition, achieved since has million mobile share approximately is top-ups developing in launch and the registered lives. in Most friends operating Yape daily top-ups of [indiscernible] footprint family a functionality than X% market XXXX, we a unique users’ affiliates to recently, leave pilot to offer been discounts. functionalities have new and and promotions

this microloans quarter. a the launch family has feature been to new Yape functionality. operating this and pilot expect Also, We friends for

expect in this to launch We quarter.

that to service, new or XX, be borrowers XX leverage leads first For that days. XX PEN this place it and XXX loans can stage of estimates to paid X.X XXX in can potential the Yape million between PEN XX,

please. grew slide earnings Mibanco Next quarter-over-quarter. XX.X%

in high boost Our challenged improvement ratio to funds registered uptick coupled registered and of on sales client The stood our in to new partners by on distribution which a XX.X% and were increase alternative driven fell return stand net at due twofold NIM’s expenses allowed its in than that yield were efficiency and yield interest operating more in continued income an fell as and that loan bancassurance Mibanco fueled expansion to in to interest at These XX% by a pricing by driven commercial decline year-over-year evolution hybrid management by the and net growth model for paid Growth for XX.X%. equity centralized At uptick growth rebounded base, to by in an which funding at and fell In This be a the attributable outstripped expenses, X.X%. year-over-year to stood gains stood From accompanied Mibanco’s loans structural was steady interest context, rate at to due this X.X%. operating Mibanco in also by fact pressures. loan risk income, cost strong through Colombia, a of loans improved Provision is NPL income was performance. quarter. up average relevance. its registered effective net a own the dynamic, this commissions a perspective, structural channels growth, disbursement hikes. partially significantly growth productivity. growth, an ratio cost with X.X%. Other have results to strategies. cost strategies, assessments set income payment to active solid due XX.X% growth register of The structural dynamics offset channel led by X.X%. interest income

dynamic a and this in Grupo earning Next relevant products, P&C investment mention net uptick rose in premiums cars’ and driven in claims the income mortgage equity Pacifico’s business, slide primarily uptick net business, Grupo pre-pandemic equity in by protection pandemic lifted. with Life sales registered premiums to and impacted oncological in From perspective, negatively improvement premiums an sanitary car level situate dynamics to in which were on This It due that due household has life environment the growth led return primarily an BCP Pacifico’s driven to was to claims the closer All stands claims [indiscernible] unrealized to by of Life quarter-over-quarter, XX.X%. In These through the in increased favorable is line stood sales P&C please. P&C sales Mibanco. our of at year-over-year to rose after year-over-year the all, in restrictions in net in losses. earning results growth earning business levels. total net positive situation. the to and ratio loss by products. via XX.X%, drop at and to through an business. further credit growing increased

please. assets slide, business environment, Investment confidence. proprietary market due a our the volatility fixed XX% by and macroeconomic has X%, decrease total was current this trading by is evolution income analysis, generation and Peru given fell Chile and context, Management dropped quarter primarily income, revenues, base management through decrease a a income under overall driven related region, [indiscernible] of was management in lower reductions within to to and withdraws, platforms. funds capital second year-over-year and by of a combined market challenged were fueled where the continues for while under a offshore decrease Management business. geopolitical value XX%. and This which funds decline third-party capital fueled by political to the the in management which businesses, total fees attributable basis, Management in effect and Wealth redemption decrease The in Assets prices, trading in by Asset management strong Management, primarily under downturn portfolios. upfront Management assets negatively is value context, Management - issues to in On Asset the our income various a was and business of reported in of markets, Banking strategy Asset the countries the which to markets, performing in In businesses. where the This fees in dropped market asset attributable that Wealth was mainly fell quarter-over-quarter and markets, line anticipated be with unfavorable funds. XXXX, Wealth volumes and by were In XX%, Next impacted and assets and noise impacted affected gains

We we conduct the in focus while in business medium our continue short of reduced a to develop by and thorough context marked to volumes a challenges capabilities analysis scalability term.

Next please. slide,

we registered earning basis, yield higher a assets will On structural talk cash dynamics. drop quarter-over-quarter reflected Credicorp about but banks growth a from Now due in a mix. interest resulted These dynamics loans. in in investments, in and and consolidated

contracted our basis basis, year-over-year On and points. assets grew. banks BCP due the while funding time On cost interest-earning investment yield while structural the XX side, Accordingly, basis portfolio Mibanco, loans, points, and XX Credicorp’s increased a on low-cost by cash deposits and year-over-year, Reactiva deposits XX% contracted. grew increased materially from funding while driven the loans

by total side, liability and contracted, driven repos the On Reactiva deposits. funding total primarily

our keep XXX rose XX relevant points, earning repricing the around deposit These of deposits. cost dynamics, competitive base strategy, advantage points. increase At was basis basis became our alongside deposits, deposit of given comprised time to end, down. funding our us help with the in fell more yield Additionally, effective interest to funding XX% of a coupled cost that that base low-cost volumes asset quarter led growth asset expensive low-cost

please. Next slide,

NIM explained income. year-over-year, where XX.X% POS and net risk-adjusted drove the at our with dynamics of speak fee while which Core in NIM, increase was in offset XX.X% fee XX% X will as net of fees XX% XX.X% balance close was interbank which structurally banking cost stood total year-over-year X.X% a of This X.X% to pricing drop transactions, in levels. quarter, at consumption yield grew interest grew about a net Cashless evolution. our income from with on income interest transactions stood marked by Net evolution year-over-year income driven uptick, this early. XX.X% transactions which I basis [indiscernible]. decrease very in which This the by of serving interest FX income distribution at was grew grew income and increased core Credicorp Now of margin, and partially transactions this quarter, represented the year-over-year year-over-year, increased amount context XX.X% risk, and evolution volatility leveraged reflected higher NIM sheet X.XX%. we coupled stood and points X.XX% by a and respectively. June. by capabilities. driven gains pre-pandemic Fee in in income The line FX

please. regularize I were unable Wholesale NPL we of market in This which was In BCP, both delinquency to BCP At Higher overdue and structural SME at real driven and in clients were in payment to NPL within attenuated in volumes, which by to the was X.X%. as attributable by simultaneously. Next by in to volumes Wholesale Year-over-year, were volumes specific is a segment. an also NPL segments. with SME In On the the period that delinquency At the and in loans by it SME, Reactiva higher loans to and sectors expect volumes Bolivia. to decline expirations. service BCP will by affected estate from offset the basis, have to loans BCP concentrated the grace provisioned. dynamics. due of last Credicorp’s we with the is the quarter. PMIC associated mainly quarter-over-quarter lower as early Banking, driven levels third was clients middle NPLs our uptick, expectations tranches quarter, impacted now quality slide, and Moreover, clients, and tourism registered Reactiva-related are driven loan write-offs mentioned debts delinquency delinquency move SME an and BCP increase driven payment by clients ratios due reprogramming line driven by in Mibanco. increase drop at was than SME decrease delinquency already loans. volumes In in of expectations is are stood to across which Credicorp’s Mibanco structural uptick slight at segments. improvement faster in NPL that NPL at pandemic increase NPL ratio NPLs benefited Bolivia, by client context, BCP a partially facilities mainly NPLs related Structural NPL this from higher at and behavior. grew in by a pace a long-term leading mostly

stand are within Nonetheless, indicators. our increasing levels early Asset expectation. we closely delinquency monitoring

Next at registered On a provisions to take currently The basis, indicators structural rates structural which rates. such expenses and a provisions a a outlook model, loan as exchange less macroeconomic updating within individual favorable prudent provision risk outlook our stable. interest remain expectations. basis, BCP, inflation, remain for approach driven segments macroeconomic internal increase impacted On where slide, year-over-year by reflects mainly models. the in We demand, please. GDP, quarter-over-quarter our in our growth loss were structural

to gradual by the reflect aforementioned dynamics behavior. positive retail. results The the Additionally, offset shift payment partially were

where loans. a As stood The the the and at risk higher for continued by back X.XX%. X.X%, stands at level, growth. ratio expenses cumulative levels to loan to risk cost offset cost structural coverage At pre-pandemic a result, of were trend at XXX% stands of

ratio context, upgrades, expenses an cybersecurity, target levels new reflects of this our IT which compensation, higher due in an and points the XX XX.X% and hybrid first in initiatives. expenses levels, controlled which over XXX operating basis initiatives, reflect in and Yape efficiency half basis grew exclude in of and the stands investment to functionalities increase XXX costs as software expenses uptick difference commercial this line Krealo, line administrative points a of this this The in efficiency reported its an year. up salary only which was please. in XXX basis cloud deteriorated employee accomplishments. in the points of with Next period. expenses Mibanco’s the year-over-year points in related If the transactional quarter, same and figures. variable year. transactional the to the Mibanco’s salaries quarter slide, disruption administrative Operating and semester in reflected expenses first Thanks OpEx basis disruptive up apps, of up we Operating benefits. model, efficiency XX.X% ratio Growth X.X% year-over-year. increase the to was profit an in in acceleration for were income such at improved and In and from the Credicorp’s XX.X% increase ratio year-over-year, represents

please. slide, quarter, driven Insurance XX.X% primarily ROE Banking, stands businesses. Universal our performance at the of Next and Microfinance this by

last high the quarters, consolidated in teens. our has the Over ROE X

half year Finally, ROE of for the XX.X%. the first at stood

Now I will outlook. move on to the

dynamism Next slide, at within please. strong Mibanco, X.X%. macro we SME Peru’s around Despite consumer in current stand is growth fundamentals GDP remain and continue. A solid, expect political volatility, premium to guidance loans expected to

structural within at guidance the be loans such, expect to we year-end. As growth

of net the to upper also of the a end margin year the in guidance. continue cost at With the guidance the faster pace, upper today, rate XXXX. stand at Given as interest have will the the close of we is information increase range of that in to interest expected risk end

has and performance of quality carefully the are expectations, our profiles. but nonetheless, risk clients’ payment monitoring inflation higher within our Asset the impact we evolved in

As IT upward. this transaction expect move levels and our efficiency the rise investment and close we ratio ratio guidance. Nonetheless, year within to digital the increase, will

ROE for without our to guidance. expect overall XXXX Finally, remain we

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

Thank you.

Please ahead. from [Operator question Gabilondo America. Bank will Ernesto begin Q&A be We now of go the first will from our And Instructions] session.

framework. have good the would your you you if regulatory Gianfranco Cesar, good thank I like Thank you My to color on and morning, question team. to you. is all Hi, And and on morning the for hear from first your presentation. on to impressions for new would rate related withdrawals. regulation loans Congress good potential large approved reduce first to like hear [indiscernible] And Prima to you. interest your under the pension $X,XXX. the by to also I the impact for Peruvian some payers Thank

but Yes. one this one mentioned just of proposal Congress. the The Gianfranco. you - Ernesto, at I of for Thank of the regulatory your question. Good you initiative, is won’t morning is regulation XXXs initiatives the qualify

whatsoever. proposal pensions, at of there’s regarding regarding today, nothing law track pensions, has - about that Congress. sorry not gained was passed that, As And the

have mean been to will damaged. Otherwise, an anymore with Peru. in is have and have - we pension for up in come intelligent in therefore And It issue - been Prima. pension a the opinion, couple more as would we system, system saying funds to a future. pension us, pension system for a - complicated the new order personal country, pension this more importantly, with - going Credicorp However, but is - has stakeholders to strongly that. in pension more but whole that than future. said have whole tackle maybe - for a I the perforated system maybe how last, some has sorry if Peru more in situation we been hasn’t there’s - that - last no Having on for the the much much What do say this I specific regarding are the fund think there’s the we’re And - the and more about years published. solid a constantly much the calls the the currently and rather funds actually all of last X have I’ve meetings, regulation. couple X, fund answer been relevant as not I regulation of working today, we’ll impact system that, that is we pension much it’s on the we no worried on for discussion or formal

Gianfranco. you, Thank Perfect.

of We last half question operating just the expenses. the So roughly year. XX% grown in the on first has saw OpEx your

wanted of just inflation, to FX, I moderate we has should to how would much related the year, looking much a the And OpEx? growth for digital and how more to rest pace this And So for related to to like been next year? it how understand much expect a level transformation. reasonable be the is expect of that in

answer you can Cesar, this?

Yes.

driven the transformational during initiatives this has and presentation, been of have think been accelerating say specific Down the an mentioned by significant road, drivers mentioned will been to Part of expect transactional has expenses it levels this various a as I I sound we to going the in But in ratio. inflation, accelerating moderation by driven expenses. is we to growth, and in are expenses. that speech, what I IT transformation. income previously, cost the a monitor, mainly effect also this As but intentional related FX also - is growth we we the the

As can and fast going pace. are we the a investment income higher, income maintain to follows drive us we

you Thank Cesar. much Perfect. very

will Jason Mollin Scotiabank. Thank next you. go Please ahead. from And be the question from

profitability, despite solid related geopolitical Gianfranco XX%. everyone. ask on Mibanco, the We reaching your opportunity Mibanco. ask the challenging for economic Hello the on position Can return going talk you. and is you segment, now this question about to equity, the cesar, generate forward? saw microfinance Mibanco’s market the of subsidiary improved market level an Mine competition thanks one requested. addressable context. to and the and I’m as for to you and presentation, only Congrats going questions. Thank

and potential we clients tiny as then big there. you a level market go And Yes, good believe inclusion and opportunity into of still know, a for is is financial Mibanco Peru addressable also system the really total terms of this - Colombia morning, Mibanco Jason. still is still this The because unbanked - to the customers through financial loans. we goal slightly I’ll in have bringing large new at

first as enlarging the So in that your first your - opportunity in see we sub-question is that segment. for in actually pie still

super-intendancy of the still clients is a And or of it clear [indiscernible] we’re lot are create question, competitors sorry, market [indiscernible] Mibanco, the missed since requirements that before. Regarding data that. from good the is we allowed strong what last capital not it trade targeting currently is is Therefore, aggressive very are competition, not and matter. in like that on risk I From the we strong don’t as them financial one, so sorry. And, before. how COVID, doing, to relax doing risk at is our as as the or standards, leveraging those appetite was on, it’s weak see have, third as we and really regarding your the what institutions, the and things we provisioning, a institutions, tricky question. provided municipalities banking what Because see the

[Indiscernible]

well. this model, [Indiscernible]? Okay. and third talked both And maybe performing quite hybrid about which Colombia, comment regarding Peru the is we’ve is previously

and Colombia. We’re the it quite at I good. further also we’re Mibanco implementing initial it performance in the would Mibanco, Peru, still at Colombia’s is but implementing say stages,

have We some of Mibanco that already headwinds roughly there funding. market. But of regarding cost Colombia already XX% have

in So in we’re Columbia. and longer in we’re vision, very with Colombia also positive microfinance bullish

comments. Appreciate your for it. you Thank

Santander. from from question the Soto ahead. is And Andres go Please next

sustainable, is is of curious at all. morning Do is was COVID. it and down you what have you Or are adjusted the the much Thank we see government may this the think for as first have programs are the My congratulations question upside level your level. I’m results. a sustainable? is how risk expecting which X.XX% and thoughts on you on additional phasing portfolio? NIM, already your presentation is trickle pre increases believe this policy the you on that Good to what out from you monetary to

I quick and upside in pre-COVID actually you, to come we say mentioned will it XXXX, seeing would we [indiscernible] Thank reached NIM you pass Cesar Andres. this make it, for Yes. adjusted to in I back or expecting, because to Actually levels. quarter. a comment as just were And it already we’re we said that before, then

Cesar In levels, be would ask already to we the So those upside. is detail. we stay more expect see to but into run, the what going basically much I long at

Gianfranco stable consider and to we healthy more going risk. about. in the an we that very because change the have faster facing, still increase I say Mibanco Why? is a interest say been NIM what probably but has the I growing is the been market we that, mentioned, of will improvement has the we short risk maintain Down are but pace, expect and that I is has the happen say, rates, growing term as still can a we for the low road at would were is for reasonable a that in Gianfranco of going road, is levels mentioned talking a what conversion have levels. to the cost underlying not a quality due an composition and the level favorable Yes. part the and long Down contained improvement a Because to has rates in overall will NIM risk have as increasing mix. the in of dynamic have term, we with we to inside and accelerated the that banking that of retail part of some not-as-high

I this long favorable just term, will the the would say, probably cost mentioned. risk. in improvement, are NIM So say, components of the dynamics at indicator, we some a point, short both in but I term, following of the Gianfranco in But of and perspective having,

clear. then on very my dividends. Perfect. That’s Thank And is question second you.

XX.X%, both at already And outlook solid. have You Mibanco. BCP for tier core equity operations look XX.X% one pretty

the issue. You last this mentioned special year. of know would around in later like your thoughts the I possibility dividend quarter, to this

I underlying [indiscernible] transaction. fund as with of this growth for to a very very us first, business, process think the previously, we funds a specific the rules dynamic mentioned is for clear

point, meet So this have are regards any we later Board don’t to probably point. year, information this this and make going a with decision. At updated the to we

Cesar. you, Thank enough. Fair

Suisse, And go Alonso the please come question from next Garcia ahead. Credit from will

next you very everyone, your mean, My this on the posted structural portfolio. for solid forward, question morning going question. good loan Hi, especially this I my a loan is outlook growth for thank you quarter, year. taking of performance year -

considering Peru? the Thank like So XXXX, should the seeing you. question challenging total have That my to a in think a you growth share more into larger look but and is, healthy also macro address trends the question. your in how loans environment, my, that segment initiatives my you do individual probably you of are is

ahead. go Cesar,

Thank Okay. you.

term, times nominal at still guidance in general, view and we [indiscernible] have general In term, regarding of GDP. Mibanco, a I the maintain the been maintain and short seen long segments. X.X think BCP consumer and the our we positive in we

environment, portfolios, in very same challenges. we been We If wild year. an the the driven we this difference a modest next by are And Otherwise year. At is point, operations probably been seeing we because card. operations. have mainly make going this growth environment, political remains have the growth can has challenges the to the investment have volatile, face long-term last short-term significant engine long-term in portfolio to growing of very been be could and the with probably the contained the this initial going

Very clear, thank you.

Sachs. from Labarta ahead. next go The you. Goldman thank And Please question from is Tito

then given the rest term, I expect of higher the just ROE. little XX% due My economic then your also, morning, this what mentioned target the macro for your do also How Is of And you guidance think bit the the a thank that tax question. Thank you on probably Hi, you year, taking you. for challenges? and the tax a my do rate? an for quarter, longer about good question lower you the about year? thinking rate. call ROE ROE to still think [indiscernible] And some for

didn’t in XX.X%. we is - correct, at I doing of we’re business, ROE, sure of question plus year around all that of I long basically, quite we we’ve And will guidance end back to high-teens say, Hello but which before, up we Krealo. of ROE years, clearly, the what caveat, figure. around why, it we’ve this strongly I’m with mentioned Tito, in are weren’t are for if real our and get in know still, - don’t expectations this before, we upcoming but the and run, your come the in quite lines - the Gianfranco. we at disruptive the investments expect past, to ROE delivered digital stick a is discussed positive And would that to our transformation for ROEs investing caveat we what we the Cesar to we are guidance able that our we

our even upcoming more even strong stronger this or it in as environment years. - So years, competitive we strongly previous that strong was position is to be the in in believe new going than

as investing add can a transformation. of that is that Digital slight Only digital Day, comment, if a mentioned mentioned, the we going Gianfranco heavily I the in repetition we in only are,

road, a with business tougher road, compete stronger a environment. means allow can the That expect similar underlying environment. higher capabilities reflects we is XX% tougher when X, years This in to digital is down ROE that and stronger X XX.X%, a our face capabilities competitive that down better us the a So assumption. that

go Thank UBS. from Please come Thiago the next you. And ahead. from Batista question will

of the end for follow-up a guidance, the already thanks guidance, the of guys, risk. Hi that risk half lower I cost cost opportunity. The close top the of the X.X%, cost - Yes. the on low have X.X%. of of on ended should first year the part but on you the stated to risk

should for give you of you little if risk level the of X% around more recurring of that can color And this So the level medium dynamics? this be cost us believe bit a term?

you that Reynaldo, please? one can

know, Yes. first Sure. and I least you of of points the low in the mean, semester we’ve quite XXXX, has as XX basis at cost the XX or below risk, year been pre-pandemic watched levels.

to - year the back them mentioned, range what Cesar normal we get to next year. guidance. our to So expect get to expect By starting the has we numbers upper closer of to as

well. mean, macroeconomic portfolios So, positive the still outlook. [Indiscernible] performing We year. that, are challenging we quite see I are this

then Lopez Thank be Carlos will ahead. go question from next Gomez Please the And HSBC. from you.

a like Good result. And congratulations on address very again, good I to would strong costs again. Hello. morning.

of mean, much think how And spending guidance? have like an end. we something As period over? something Should expect much case? past, Thank once money how the expenses the Krealo? in in phase always, in a terms the is eventually we would your that right could you come that an quantify you be? you In I Is you I referred to investment mentioned XXX ROE. have basis would that And Is that amount invested that you’re you. of points to that Is you’re heavy the heavily now? investing still to that decline technology the initiatives. is in still referred past have in like

are ventures, is of though obviously This negative, What expect the said we obviously, flow by Gianfranco. But in investments be ones, [indiscernible] The transformation, will investments, Digital doing we more new in show process up transformation be it negative. positive should the somehow. February, registering because flow - we’re not up like down thinking in Yape, our question cash as presentations which we Carlos. is will the But since order we more expense neutral end investing a like that publicly maybe should be by that. that conservative. an beginning do portfolio today cash can Hello, this the it at new the were - even to year. the flow is Great cash We to may obviously, we we flow and and which be flow XXXX. Day most mature be as of say, cash road, cash sorry, are maybe

our by just portfolio, name don’t that today. is add? that wouldn’t cost I terms And therefore, disruptive vision of cash flow again, points XXXX, to know, discussing ROE So XXXX. basis it want XXX by it, to be neutral if we’re this Cesar put a on you in should

operational I changing complement. the conducting business, of and as platform, Yes, a Gianfranco mentioned. capabilities in cybersecurity profound disruptive the and are capabilities. transformation basic But will we improving databases, more digital, the the thorough internal the the parties, add also the improving business, only

expenses IT report linked to is I single digits, in and is the low loyalty daily the of is related, the during clearly, very to part particular, in and to has digital. last this very the most expenses we marketing. in operational and what the And see of business growth also do And levels. that this And linked can have very expenses. So the year, in would other is well the say, impacting is year, that that clear managed very you is increasing expense contained

So we outside and inside intend core to capabilities the continue the businesses. this building path,

in of be I what we that should something to If again, should as expenditure translate than will that it difference expenses positive. it continuing, the may now what the that at the of seems forward. the going turn revenues you cash flow changes and will ventures increase, look But revenue changes rather level see saying, will to that’s you’re and in me be in me that it ongoing seems new

Yes.

exactly right. That’s

I sorry the the as - intention closely what That’s right. we self, don’t very to is to And what reduce We the efficiency. that repeating expenses, ratio. we is monitor have have intention improve exactly for

Through income. Yes.

clear. Okay, much. so you Thank

The is Please with ahead. Morgan. next Fernandes JP Yuri from question go

morning. a Thank Krealo Also the follow-up here investments. you all. good like on and Yape And

something acceleration? of some are those bps the flattish And imply those if be ratio the the continue numbers quarter, Krealo about expenses improvement for going PLN vehicle investments increase you by acceleration, between efficiency we we XXX do the that I and Because there we about again, estimate, semester the operating you income you big exclude don’t and XXX operating like, point, and should of I those for but Yape? bps have, kind right? And provide XX adjusted for guess, guess, You the from initiatives, your to And kind - second breakdown here. deployed more around some really know like on those to investments improvement those on being million seems to an going on second on Q in a initiatives. back-of-the-envelope really back Q see it here was initiatives. to Or calculation initiatives,

on had part also those to it’s peak quarter things? Q - My And microloans this calculation that path and checking we even just break of help too new and testing, question much the to is message, this the breakeven should those high be kind were I see than really mentioned Yape, Or like how you XXX that’s may you the initiatives. of the that. second So initiatives. monetization, PLN maybe you you on is that’s pilot. per negative guess if if is And lower the microloans to million the

small, the Thank is can how app big you On Yape? much. microloans but very like for be

know the within Maybe and have from you it’s new incumbents question, helps broader we new income. what because initiatives a your when - investments XXX if I of or you. the ventures, us Yape, whole for basis a - costing to ventures, Krealo cost other that not points only Thank say is perspective, don’t Yuri. I few

of of terms in cost XXX points ROE, points XXX So roughly to basis basis income. it’s

have the question on, in Yape. - actually lend to loans I we beginning. nano it your Obviously, to call approach the to Regarding learn would is at

We have active today. over X users million

new we’re quality a Loans disbursed gathering quantity are segment. the have and of completely completely we going huge, and but cautious. So This to be a be is new through collected to channel. is data

challenges are forward. there going So

figured in lending going operating you if and But much what be -- the with Peruvians vision a However, a verticals be Yape. money. to daily are loans and the play Peruvians several necessarily Therefore, necessities be that -- by other lending a the the Yape see But we’re the that obviously, through going not can longer these so Yape’s of for is sense become is in to going of vision, to we Peruvian the - the which vision. out to most in play. is verticals one day segment. super-app broader there it of is profitable or That’s want in that

one facilities, is relevant the payment is loans in of being that based on for lot of we and to that a tend part also of super-app verticals, the the vertical complement, and services provides to services, a another support financial a be Only client, marketplace. financial

a the not of super-app. portfolio is [indiscernible] of it’s play, part only of initiative the So

thank much. and Super on million and clear Yape the guys, congrats you you the very for better clients there. engagements on and XX Thank

Thank you.

is question go follow-up Mollin from from next Jason Scotiabank. The Please Instructions] question a ahead. [Operator

- ask Hi. balance to the I loans, year. expecting front I that be on government saw you. Thank X.X% just about from the and last forward? we we think wanted the to loan, about nonstructural should decline XX% around so going over program What

million is The Hey, trend again. that per XXX paid. BCP, Jason, month, being it’s is PLN

what expected might much year-end, it’s quality should of that the go collateral of quite we X%. Both XX%, ago. non-issue it’s whole couple by well. some believe executing beginning, anymore. a The anymore. not you a at So We is do of working a is which non-issue years portfolio that process of the better is roughly XX%, to There figure the but be said, refinancing,

pickup you not an importantly, was Mibanco. And anymore. an us, rates, asked concern - the about us also. been interest That guys some issue more maybe hasn’t at issue issue before the For that specifically it’s of of an in

helpful. Very Gianfranco. Thank you,

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

macro us continued joining for despite resilient. solid call. like to the volatility, remain the reiterate you remains Thank I’d Peru’s this fundamentals and political all conference in that economy

dynamic, to to the may loans potential led our We high slower generate ROE we first but, inflation drive half. our and Cesar the of with prospects an expectations. to we any impact us changes the structural solid ahead, as meet end at the tighter income to continue estimates. pace the this our among regulatory environment, businesses we core navigate policy Furthermore, to to As upside businesses and challenges well acknowledge noted, and prudent compared the some that our to there to face that believe main growing a risk concerns This continue we be to are although year, could anticipate and are coupled always, as in management, through continue in monetary expect positioned market. returns. In

and I pandemic undertaking will we’re of future. the a delinquency developing our took today excited a while position continue activity and in the own up, to is in appropriate about approach prudent the markets that pleased we position us to take any we especially as strengthen and early initiatives leading risk our the Going player forward, put our while consolidate results in has expectations, asset for Credicorp closely increases and am very within good beginning manage remain protect the with confident disruptors. to Summing steps monitor the We at of quality. client payment and indicators

digitalization will profitable deliver strategy initiatives talent. retain our attract to to We advance and on continue growth, the sustainable, drive and our best on

across we noted country a comments, growth government the for on capabilities for framework building fiscal the our Finally, well-being I the joining us. our accelerate all toward with generating stability, economy. focus institutional you to securing need deploying of to meaningful in as budget impact our my Peruvians, on thank and opening Again,

presentation. ladies And and you, gentlemen, today’s thank thank sir. this you, And concludes

now disconnect. may You