Credicorp (BAP) 10 Feb 232022 Q4 Earnings call transcript

Good morning, everyone. I would like to welcome you all to the Credicorp Limited Fourth 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.

As a reminder, all participants will be in a listen-only mode. to at opportunity today's end be presentation. will ask the question of There Instructions]. [Operator

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

You may begin.

Thank good you, and morning.

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

proceed, and refer to of Before and the on beliefs following contain uncertainties update changed recent management's new Today's would forward-looking I we harbor assume will you risks and and expectations are release I SEC. statements the section subject to event like to no circumstance. with call obligation earnings based forward-looking current reflect safe to statements make statements, filings any a forward-looking our are the which or of or statements. or revise We number to and

and our will provide guidance who comment the ahead. Ferrari for environment on Gianfranco, will call we Cesar achieved will followed and the open milestones comment on the Rios, which in please go macro financial in XXXX, performance Gianfranco work, key by XXXX. our

Milagros. Good us. joining you, Thank morning, everyone. for Thank you

like on some reflect accomplishments year. I of to the While would we quarter, a reported key of solid the

first am year Credicorp. my CEO I all, closing of First as of

BCP. group, already in at As the earlier with spent you role had XXXX, many in when years and know, I the into I particular, came

initiatives how that guide I are establish of operating ensuring structures part would leadership us the today. an as we important and last years proud prior governance the in key the do sustainability am our worked work of very to three had particular, part important the we've advancing business. foundation I over the at In of aimed what that done remain strategic of

into positive how our aspire ability as to business in core act integrated is think driving the that in being is changed in inclined becomes sustainability strategy, which the every operate our with impact countries become sustainability present which Today, strategy, and we we of our agent and the be day. more propelling to we

in shifted the have our down of time way because education have our We in bottom Andean we competitive been enabler operate advantages a and be up, record from commitment to purpose financial region. leveraging to top key and inclusion the financial embraced

we than across and from I educational like We've XXXX, X.X our financially included launched views. in people multiple subsidiaries. more through million would million surpassed XX initiatives web have highlight Yape BCP series that to financial our

wealth flex has and a to businesses, this our for overall all knowledge advanced including area. been more where digital me strength. transformation insurance are year were I I opportunity a newer to my an which my based also me. Moreover, experience BCP of in at and we our on This my learning year of to lend reinforced management, strategy hand

sustainable our strategy achieve to our total our strengthening market objective expanding addressable at growth and digital ability drivers. our our purpose aimed is facilitating live Fundamentally, for and our operational

our our highlighted subsidiaries. through approach We place disrupting innovation taking labs of in that initiatives data-driven last and are ourselves each of Digital year, at the our innovation Day expanding were capabilities March tech and

Peru, use the financial in growing low approximately the solving To Our Peru and of initial their the of exponentially users are society. more positively Yape. of XX million such year, life half Yape mature initiatives prevalent keep daily end Yapero's you a Yaperos needs. had Peru of population At give are disruptive impacting sense in part over how as Yape in

the We be Peru. for network are to payment on the track

our solid but very a Now say already basis, we based grew On most income on negative I Overall, that the managing as full on X. importantly, positive holding, to cost have our not Slide of financial absorbed a road to please COVID. had risk we a due results, have maintain to only turn would year stance almost and our risk was XX% impacts our prudent is in net XX.X%. normalization. the year, and We ROE

into to very that of experienced relatively low central political XXXX board. independent fundamentals important and strong, well We remains us. near-term a go to international technical highlight Peru is led both stability, debt and GDP, strong with of navigate balance levels in levels in despite initiatives the to an bank including sheet our front It any as important as of a reserves by support continued volatility

there that, like important of to are point that said the would out. highlights year some Having I

of strong of turning XX% very year. for ROE an the performance the First, BCP in

Mibanco reservations on expect the deliver from And finally, business. of Second, has you is the to express in business to ROEs a have ROE that now reached Pacifico, an XX.X%. track where we past,

to business. our about levels this ability of optimistic of penetration increasing the are keep We

hand, environment us On face regard a will for going requiring our aspire to able to on be the expect redefine strategy and reach more management, we ROEs these banking during we that the details with wealth share other investment next call. I forward challenging this we our still to businesses.

up operate. proactively concerned most our in structural the issues in Cesar, We, Peru we're on again, at countries December to coup our and and to Credicorp, after in we seriously to its the businesses, responsibility and very experiencing fulfilling citizens. to to Before only and take that, focused has continued remain more fundamental up, obligation work headwinds, the I purpose to on Peru want pass near-term and turmoil are our failed the do the solve how not but the we importantly, I step speak political X, unrest social word acknowledge resulted

to to inclusion accelerating granular are greater offer poverty and independence. allocation We related we of savings, alleviation. vulnerable financial our Through through generation to income key and economic inclusion, security agenda factors those aim levels of

ahead. go please Cesar,

everyone. morning, good and Gianfranco, Thanks,

reflects by provision and expenses where higher into seasonality which a habitual to start year-end. We in want some key I good quarter-over-quarter the very measuring to grew highlighting daily context less quarter dynamics. across balances, at Peru, average drop closing X.X% Deposits lower loans and The macroeconomic Mibanco. at retail X% marked the BCP a financial system. are a translated in driven the by by primarily perspective deposits structural in fourth liquidity year favorable due demand contracted banking

in a which in at base fallen to after XX.X% measures represent quarter funding in have proportion deposits with Low-cost relief our compared recent significantly having increased weighing quarters share pre-pandemic the still due of pandemic levels. end to significant at XX% XXXX

portfolio. particularly in turn, NPL by expected. macroeconomic by our XX X.XX% an sectors, of key to Consumer a quality, real estimates asset of structural has by that behavior edged for after reflects driven inflation, wholesale and up update negative at payment such and tourist In had to we in segment. also interest basis X.XX%. aforementioned estate points was improvement on increased the Consumer in the BCP, stand of to risk banking, ratio and cost inflation partially segment GDP terms the rate The rising was as provisions At as in variables In impact and growth structural growth the financing a growth Mibanco NPL offset

to rates portfolio credit vintages, policy increased of interest which due higher of perspective, our change a by quarter to in expansion Provisions this a driven an at ratio. improvements the loans our structural us quarter of low comparative XXXX. by strong in and This Mibanco led to competitive in base. context increase default also specific initially balances, products Gains in was growth to very base ongoing FX channels. due an the XX.X% materially increased in second low of of From evolution and income transactions average driven and maturities very funding year-over-year net registered portfolio in on XX.X%, daily measured repricing a

drop increased income investment management, Fee a and which by last stand-alone. was over year. materially low Provision typically base banking at registered offset decreased a wealth to expenses due growth BCP partially in

Asset adequate, structural losses loans. to maintain and to continue are equivalent X.X% which for quality strong of a loan remains allowances we

or XX.X%, to diversified structured close registered continued which capital business base reflects levels, in the nonperforming quarter fell of Our maintain and pre-pandemic substantial and ROE although a business, ratio In to XXX.X%. of in portfolio. the the both, loans significantly and aforementioned coverage the In remained loss sound context, to the a level XX.X% COVID-XX. insurance impacts at still Credicorp

due Next slide, please. two At main for improved conditions to drivers. the markets beginning emerging of XXXX,

down inflation First, it's from many far to the U.S. rate the surprise most four peak what its has slowed hike is in cycle raised of already in This is and the the is of increases further in pace has trending pinwheel now decades. June. expectations rate aggressive that in even downward

growth. economic to of Chile's a Prices shore government Gold, effect shifted for export nine-month Both COVID-XX $X.X gears have the stands restricted level factors seeking and Chinese main these product X real eased to primary the its positive and on reached estate the propel metal months sector Peru's per up highest move high. Second, another around a of of exports, shipped prices. pound. had Peru highly and copper, in

yields environment whole. for as inflation treasury favorable which a emerging U.S. As more generates decelerates, have dropped markets a

of that X.X% the after unrest Next ceases We Central anchoring rates in around Banks of decelerate expectations. is maintained slide, turn, decisive X.X%. the world of grow quarter. Colombia and in context XXXX. to four Chile believe this please. same the sessions. Chile inflation the Peru's in a in GDP posting slowing to GDP policy consecutive growth rate inflation, X% contract this LatAm monetary year is expected in In expected Bank Central the to in highest have social will one preventing been

outrage. hikes to given inflation In other on signs rate hand, risk shows recently have emerged inflation social Colombia context no Peru, at a Central pace of of the in Bank, a instituted peaking. strong the upside

continue future As previously scenario, such, be the may of by Central current that which indemnity record Bank high than decisions, interest likely longer influenced the rates in impact expected. to mean are

slide, challenging BCP strong profitability. continues context, Despite a Next to deliver please. the

X.X% the structurally registered key of income by fact variation. that core skewed in quarter-over-quarter while dynamics, This interest were balances net despite the results little rose in driven growth was an average evolution income. of which XX.X% increase Regarding a long daily

funding Our in results. transactional rising of disciplined through coupled as of our a pass bolstered funding rising interest with to context rate to has costs the ability lever approach the mitigate our impact base to

volatile gains we growth quarter, leverage market. intelligence FX a transaction FX capabilities This in in as

eliminated The between XXXX. September by for fees reference offset this in aforementioned quarter transactional parties third to transfers inflation, rates Nonetheless, provisioning new to were banking higher different growth fell perspective retail to up Accordingly, due in cities fees an for were GDP. macroeconomic in increase after and paid was due mainly income volumes.

behavior segment by payment consumer inflation. impacted was in Additionally, raising the

skewed year a wholesale context, seasonality stood to average net was XX.X% in due income net by a increased in structural interest expenses and XX.X% up in rate also on were a last Growth which raising low was XX.X% provision income, full daily bolstered equity balances. in expenses in in banking over loans basis. on Operating base Finally, measured this by quarter. increase interest a average return increase at

Banking retail Wholesale while grew expanded banking XX%. XX.X%,

through income offerings. of growth increased as and POS FX transactional XX.X% improvements in XX.X% fee manage FX gain in Additionally, by levels, roll digital in we in products channels transactions and an out volatility net fueled channel uptick and particularly the and

XX.X% SME the in Consumer low increased driven inflation payment XXXX. and segments. higher In provisions segment, loss Loan by affected the an behavior and Consumer unusually observed was by base

compensation in expenses These line respond initiatives. indicators the rates. Operating variable respectively. reflect particularly correlates driven this XX.X%, stood to higher an points, expenses IT segments, uptick grew through digital ratio in basis context, provisions interest higher growth in offer, ROE XX.X% income, efficiency growth capabilities with which improvements by higher XXX and investments and higher disruptive SME-Pyme, risk in with in of transactional in which was at an In increase BCP's In bolstered and XX%. XXX at new

on users. to turn of X.X next generate Now XX% one active make million has is Currently, the that target users of month, users. users is Yape XX XX number closer million Yape transaction and active more and If active reaching rise. we users its please revenue, the per than at this consider least Yape's to slide. million XXXX

see XX.X reached to measurement including grew of million XXXX per the trends with We our users. and to than X.X transactional PENXX.X December. of in metrics, Yape this reach year trending which positive active billion upward more time across transactions X.X monthly continue our are most volume in

Peruvian market the into XX% total market. share translated This in of pop-ups of

through As Yape distribution channel, new of affiliates Yape important micro we is financial expect access Credicorp income Yape. creating Yape one will X most and of million have By XXXX, product for Peru's sources through Promos to loans.

I were an mitigate would in company was in which a due by disbursements, two dynamics. a this high helped yield in for growth quarter, record results Next funds. look higher Nonetheless, to quarter-over-quarter slide, please. by the of like impacted factors. Mibanco uptick in us in cost the registered key primarily profitability to hit drop disbursement The provisions. driven provision growth at

registered last was which anticipated, review as increased quarter vintages expected ratio. in reflect our to low The methodology decision XXXX. of an second, after on model; quarter and First, appetite improvements the to incorporated vintages drove we second higher default the initially mature our risk the and base these portfolio risk were specific

structural an ratio NPL to uptick and X%. Mibanco's stood dropped due write-offs in at

was disbursement attributable quarterly driven XX% interest year in growth by expenses increase an full a Provision dropped income in and As loan risk structural from variation earnings in our a rates. XXXX, perspective. quarter-over-quarter XX% appetite. and Mibanco's XX% a to Net rose loans in which in result, XXXX, grew

year-over-year, pricing and of rates. funds, In new growth dropped well of expenses reflected grew in cost and fulfillment of while which controlled develop X% by which in to and rise operating mainly evolution significant with Mibanco expenses Colombia, Provision line expenses XX.X%. XX.X% IT challenged in ratio variable expansion context, the stood expenses growth by and marketing were portfolio reflected commercial targets. at loan were initiative in Operating At grew and a the capabilities. XXXX, strategies compensation, earnings and driven to efficiency quick market by the this ROE

due primarily higher net perspective. net partially to the claims claims In income was over This Next earning the year from XX.X% in by premiums increased dynamic commercial of business, uptick a This in slide, drop pace offset particularly to offset in net a earning due lines Life decreased COVID-XX. PC an net effects. full a in please. high Pacifico's partially quarter-over-quarter. Grupo lines evolution seasonal commercial by renewals. decreased premiums is business, was In

primarily and net driven through and by premiums a and Life income an both net price was sales in secondarily were COVID-XX complementary an adjustments business. increased the the the claims by This the insurance product business, Pacifico's earning of disability occupational rebounded by driven In accompanied Life Grupo XXXX. substantial PC in Life in dynamic increase risk survivorship. by base increase in drop which for and in positive affiliate Group

activities to protection In growth Claim products through lines levels. via These XX%, at bank earning in loss this in is commercial & net business, led the dynamics total normalized. line assurance equity Property increased to year. premiums particularly on sales of ratio personal car return oncological XX.X% assistance. Casualty economic growth, after In primarily in Grupo the products stand which at due and the close stood this pre-pandemic Pacifico's to context, medical

where corporate deals quarter-over-quarter capital secondarily recent market in and rose were a by business, a fixed wealth registered at please. were slight number slide, banking primarily and The income quarters. On conditions finance management closed still registered the where has portfolio Next gains investment challenged recovery in year-end. while by basis, proprietary a by earnings driven markets of

flat. management management and wealth Asset remained

occurred year management by fell of outflows dropped market context, driven under primarily fund perspective, by This a in income when upfront and from we to a marked strong base political high reduction a year in due anticipated products over last to context offshore fees risk. redemptions migration value and assets decreasing Peru management. in Chile a asset full XX.X% and In registered funds. XX.X% gain third-party From this

initiate business, in a close which strategic The lets completion. review market change to us is the this environment to for

and used levers efficiencies. long-term capture are for which greatest platform profitability as can which represent determining have opportunity to We identified key and be business the achieve row to

slide, please. Next

offset On a in Credicorp drop and investments loans assets and funds, fell Reactiva basis, will X.X% Amortizations a banking interest grew consolidating growth. and Retail to quarter-over-quarter our wholesale we available structural partially by in about due driven earning Now X.X% loans dynamics. talk Mibanco. segments this clients

dropped demand base is a in funding decrease by Our mainly X.X% skewed deposits.

a cost in earning basis yield versus in impact the basis XX in interest positive assets expansion the The the XX follow those to trends full increase this points points funding the quarter. year of on repricing in funding rose cost. our an funding offset and assets structurally and assets basis, higher of On asset similar interest-earning this context, yield

higher On segments. loans in finance launched in where that and the the asset mix a than side, name there reduced was other yield micro higher growth shift consumer a seen in structurally

of share of deposit transactional market funding. of fact cost in In to the growth terms a increase in maintain to our cost mix dynamics large up to led base, higher deposits obtain were deposits the XX%. time tilted we These products, the asset yields where our the that and

slide, Next please.

fell core On of interest I net also basis net income decrease to income. basis Nevertheless, the elimination due driven increased. Risk grew X.XX%. the income. fixed stand volumes. increase third a income stand pay to Consequently, X% and an intercity NIM basis, primarily the of XX interest in mainly of at Now margin core stood fee driven net while quarter-over-quarter gains discuss to will structural X in at evolution the the transfer points fell adjusted fees X.X%, NIM transactional by X.XX%, by points for primarily for X.XX%. Moreover, FX higher parties, transactions rose

and in funds. fees transfer. disbursements uptick result. increase in income fee X.X% increase in Fee an banking fees income for year mutual full bank-to-bank also rates. a grew core NIM in NIM transactions, an loan at uptick net and driven POS drop reached growth offset interest services X.XX%. growth XX in in XX.X% Net was XX.X%, XX.X% gains higher grew by X.X% transactions FX income loans in line volumes On XXXX for and by core which The and boosted risk-adjusted interest the an with rose fueled by grew income X.XX% stood on a from basis basis, in partially points personal

of loan I to structural some basis, NPL increased On will now in after in dynamics. after margins. hotel And quality please. mainly having SME-Pyme our Credicorp's due segment volumes risk move slide, increased retail reprogrammed slightly. overdue loans also to profiles, abated wholesale structural higher clients with the financing sector in higher NPL been a clients and of the in pandemic. a during banking quarter-over-quarter volumes Next but

within remain each provision expectations adequate. and in quality levels segment Asset remains our

charge-off were similar expected primarily increases consumer and Year-over-year, Mibanco was write-offs. and in The loans and aforementioned higher the clients a and has both to it loan that wholesale reduction loans by SME-Pyme. at driven possesses continue NPL in flat regulatory in or Credicorp's Mibanco partially loans was by in NPL balances. Write-off after restrictions offset lifted. of to are to was due NPL X.XX% quarter-over-quarter, SME-Pyme that been basically volumes, given volumes by at to while volumes increase decreasing offset NPL structural Reactiva ratio structural

slide, please. Next

on in last portfolio base me drivers impacted quarter-over-quarter the in provisions the rate interest inflation, basis, particular. rise. segment loan let consumer at were were the of led was BCP On Mibanco. structural explain to growth ratios payment main dynamics. at for The main the which Now of in by GDP, mainly for Mibanco, low unusually a and quarter maturity retail to high the projections macroeconomic structural and drivers behavior banking an updates provisions driven BCP fall inflation impact and vintages The specific loss to which

X.XX% structural normalized On full-year risk increased stood XXX.X%. coverage low the this The structural context, ratio structural levels. an stood this are X.XX% and basis, provision base this moving cost of quarter XX% towards year. and a at over the at expenses In exceptionally

Next slide, please.

To which the last and XX.X% finally, in acceleration expenses salaries expenses evolution to cybersecurity in transactions; we registered portion in and an our expenses in full and reflected was efficiency the every uptick significant basis, quarter in and figures, expenses of benefits. in in base analysis in explained and an reflect year. comparable As digital-transactional growth quarter, administrative for Growth terms. IT grew volumes, last initiatives. are expenses employee functionalities, driven a fees by increase in increase annual administrative new which significant accumulated destructive Operating related an expenses on a a year of of our the mentioned higher

in variable IT. compensation of driven for hiding Salaries and efficiency year XX.X% projects specialists on this uptick full improved an a grew benefits by Credicorp's year points Mibanco. basis by initiatives employee by context, higher and XXX driven stand-alone XXX and in basis, In disruptive growth for which investments the stands represents we exclude and disruptive XX.X%, such figure. difference If at the core income as points Krealo, reported a BCP basis efficiency in and Yape ratio ratio from of the

accounts XXX operating which XXX to basis operating of in At significant ratio points faster expenses basis BCP XXXX. grew this BCP Mibanco income Mibanco operating In efficiency and for than context, fell part and a points. expenses,

Banking Next profitability slide, year on and results please. by better Credicorp's at insurance and solid a front. microfinance recovery fueled full Universal was the

level the were higher by lower results a mainly In negative addition, by proceeds. Net the bond in for taxes. with an at and carry the to due of results net senior profitability investments was impacted impacted withholding the at results line decrease expenses the financial holding of made these holding financial the use of with in the devaluation in increase

at holding withholding expectations tax XXXX, tax expenses payments. the the increased, dividend provisions higher of for reflecting Regarding in

basis As a at full for XX.X% above of result, this XXX year points XXXX. year, the level the stood ROE

somewhat figure reflected of even at the ROEs and full was Finally, second This than for unrealized equity note at of of the the and year semester half balance lower. first the the the that dividend higher end were end year. first payments losses the the accumulation June of

current Peru's social and political volatility remain will we I solid, Despite GDP to X.X% grow outlook. the X.X% in and Peru on between fundamentals move XXXX. expect and macro to Now unrest,

to by toward mainly interest shift banking. balances levels High loan growth portfolio, retail. risk are X.X% cost will loan higher total our we the positively X.X% X%. range of of which and loans rates, will measured we and pace loan the is an evolution at structural uncertainty balances retail to of terms portfolio This and towards impact on NIM to depend X.X%. average of the and NIM. in XX% ongoing trend shift portfolio competitive higher and expect reflects between our our and In guidance daily stand grow at funding mix of X% back between base amortized. Accordingly, The pre-pandemic mix between a our our driven segment figures the level yield The Reactiva expect loan

transformation In bolster long-term disruptive between position. ratio and we digital the to our we the to around in continue XX.X%. XX%. initiatives context, in our and this competitive is XXXX, will situate to In In invest ROE XX% to significantly scenario, situate aforementioned efficiency expected expect

that guidance standard. Finally, XX is the IFRS these to please accounting consider this based we on business. implement adjust the application lead in X insurance as in may numbers us May of IFRS This the

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

you. Thank

the Roberto comes We Instructions] question Q&A [Operator of session. now will [ph] with America. Our go Bank first Please Durono ahead. begin from

This from expenses of and strategy. America. first the Gabilondo Bank Hi, question on good operating [ph] is digital morning. investment My is

seen pathway to monetize that client been to an for have versus in a deposits growth, We trend digital experience clients. has accelerated client, also the in is to and and the monetize the have the in region loans looking profitability region digital focusing

digital the And not asset management, or not to with products the from I that been side. coming digital seen Also, both, insurance are wealth that the the elementary digital it clients. have think starting or more payments, has we funding monetize enough marketplace,

other that initiatives banks neo a place have. been has to you launch and has Credicorp among in investments unlike exploring payments and digital into seen in some the investing have fintechs We

it competition on reasonable wouldn't maybe Brazil, like those that you. operating expenses digital in use in the to Colombia, earnings the expect to digital should is on be or in then we and and safe in like in I Mexico still terms considering Peru multi-initiatives? strategy Thank However, your hear refocus this to profitability not would investments? accelerated invest and thoughts fintech of how the

Hi, good morning, question. your Roberto. Thank you for

because positive two I same call, As as do it we happy previous was you dried us see I new the money incumbents up mentioned we if or what has recall -- for call the positive reasons calls exact new competitive as like ago, in mentioned the for don't of, -- ventures. for somehow environment

that strategy, have right we our one. the do believe strategy Regarding we current the is

basis Credicorp points digital cost to As Cesar basis XXX XXX cost-to-income to provided we XXX points and the in initiatives. of out ROE. of of the sorry, That's believe, range up which -- in income mentioned, of I expensed basis points was up is to within

regarding coming We to So is more don't we -- ventures. new what Having that because believe we're our digital track. there's we're on seeing there's said commitment that, need change no money less into is to to Yape The faster. that sense. right monetization -- these have, we is ventures, mature on the is path more which most venture in track be mature the going

faster what number transactions We with usage of originally positive number the of very seeing. of We a pace number planned. We're you already we're with also income we keep and shared per per the the at number the than increasing users. active users -- user of generating which is

make Obviously, track. right will ventures diverge, we of some on the corrections. So these we're

rate related seems wider risk on XXXX. know to second it ones much impacts. the quarter give don't Then compared we quality. how look can if my guided asset of the your the I to the you guidance, is provision charges were question into in of culture of when you And when us section

be So hear is would of that. you on see realistic then around like your case I thoughts in X.X%. on conservative wanted increases. your a risk And rent guidance question to X% cost the to

Reynaldo? Yeah,

year. are country I watching mentioned calls, has as previous to environment this fact Llosa. the we the the for macroeconomic and Reynaldo we the Yeah. several there in also have we've is the the retail the explained reasons total Basically, the fact months levels that guidance normal Cesar his in in are Yes. actually, previous for than that challenging faster been market. return in and the wholesale due This as what to market also presentation, growing mean, impacting that in risk are the is during

uncertainty Having of a said that, still for the lot following months. I mean, there's

a that's we be number open number a that say, the middle, year. some will we have have And in will I provided final the soon a why too it's point is So to X. the or little precise reasonable it -- but guidance be for we and that between X.X would

very you Thank much. Helpful.

Our from Goldman ahead. Labarta next go with question comes Daer Sachs. Please

question for morning. your you guess good my guidance. call I guess, Hi, my on particularly question. is Thank and the the taking guidance, ROE I

closer risk you're Just to for XX.X% is cost just year? like they expected, mean, that seem cost that outlook, not that. increasing X.X% macro how margin risk, seems I does uncertain you to but of to if looking than even of understand I taking political know and to given be XQ to this try number and and the better of would the the be end of that that it expecting get above higher

just to can to maybe you income provide XX.X%. try that? growth And growth get expense you're that like to achieve thinking help what see you -- maybe fee So will some or think that do you and what you on if

Cesar?

Thank you for the question.

provided previous middle we I risk the end, a we in see, of where had, think as that's at of range. you as coherent the cost the in more whole. that can guidance But the numbers little the bit a

different factors an that would And like figure is to So that that call And have XXXX, the it's by basically. previous the the the something with not around us argue XX.X%. in explains modeling lead combination points. exact that are decimal stress we the for XX.X%, will of to sense the I similar, around, I

pre-pandemic year same a back have to portfolio. question during levels more retail specific Reynaldo risk, at more the regarding already to expected the and was shift mentioned, time as that Regarding come to we the

in between a than have look see and for that Pyme in whole, you been mortgages, Consumer is radical it retail. example. as the retail, doesn't But significantly wholesale within growing faster whole If we and shift

risk has changed. profile the So

behavior during the We same XXXX. expect

specific led events the segment we you. X% shift all and in impact reason. this don't consider year. to political believe review according this of retail towards the more know specific of out risk of that of us trend the risk year take to this the I'm quarter is general the profile and you the going range quarter that and is impacted level, first on to to package put of in X.X% cost we I the the last and helps between if back that rates fourth to, this impacts portfolio, And that range I say, will if come reasonable the the last quarter short-term are the So a a if going

to those specific I just doing, investments can Maybe the try particularly, that any everything. fee the the like IT you on on income color growth the Yeah. expect just segments, Any in provide, lines? color very color the guess, and you also helpful. gave expenses. that to growth on given growth you're efficiency. just for But give No, that's because expenses on guidance just you triangulate can in any all I you those know

Yeah. Probably, additional comments.

capabilities. rebound by our fees, are of year of specific fees activity of for disbursement transactional mentioned to rebounds of at BCP beginning above of terms have specific aligned very in that pre-pandemic In that lines last the in Mibanco levels significantly that digital significant experienced in the comeback the a commissions we we propelled the example, case with well related,

are and the an of asset has rebound is at significant transactional going in same And digitalization we with now volumes this the already on deposit aligned But what the business XXXX. and but the increased more capabilities side at beginning not side, increase to that have pace occurred.

the a fee grow whole, interest reason as this than For income to net less going margin. is the

market growing income volumes core but And terms. significant two and that impacts expenses, and in than initiatives still XXXX more a but the ratio the increase that expenses, in whole be that faster expenses. terms are are three the lastly, rates significant a significantly or think activity, and relative to transactional accounts. product in trends growing associate with -- efficiency IT the similar a variable as compensation of offering, expenses disruptive increase different general in being slight increase I are in to And going

Okay. Great. Thank you, Caser.

Our next comes Geoffrey question ahead. go with from Autonomous. Elliott Please

increased those taking loans they Hello, detail wanted bit adjusted Thank second for and when this much little quarter? been seems if known couple customers quarters thank you little of think Mibanco question. it bit are for we a help that on seeing back very Can dig a were a said into what more characteristics originated, in the the the to vintages underwriting us in you mentioned. like more new detail understand provisions you. were the I also you us the you why has issue of I the now give a

Reynaldo?

Yeah.

as in in semester, vintages, of first risk of portfolio. that, have semester, on And you end seen evolution said those Mibanco first increase quite some identified quality specific had in the important the those -- optimistic we segments the segments. by the of Having the of quite the terms specific growth of the we In performance we're the the in market.

us our the So on on put decided we second out to semester. strategy

event. growth basically expectations those losses been basically with that's has These associated by the happened. for has we ending and up happened. helped Our vintages identifying the That's process what segments. have what the of are maturing that And portfolio

very much. Thanks Great.

Our comes go from Yuri with next Fernandes ahead. JPMorgan. question Please

Milagros. strong, to had the guidance, when follow-up imply, right, loans like to midpoint this a NII assume structural your know, are you the you I pace at I regard-- XX%, have meaning plug look to a just grow same we of will Gianfranco, this don't extending with interest like growing as XX Thanks efficiency. more assets question right? if than X% bps. When And earning margins very on we growth, NII, low, your the XX%

line, the to very totally It's right? a of I solid looking clear. growth, versus expenses they this it's And it's and guess, kind information. leading XX%, So flat about efficiency year, your XX% top guidance, year, are had this but digital BCP we

XX%, main calculation I those revenue doing your expenses? our happen assuming here But going to job. think is a to NII correct. line, should good we're grow What's given

see we in have expenses much? I'm to this getting should I so you. given we not if should here previously? it's Thank approaching are increase a these calling as fees little that you G&A for XX% such it, discussing get curious those of just strong, we Like you I'm were accelerating like consider expenses? understand levels are because expenses a or bit investment as should plan. no, Like combination the an revenue But be

Yeah, Yuri.

very it's I a think sensible question.

I think interest Think it's have we in a net very reasonable margin. one. I just try the to way. explain P&L, the this

NIMs the NIM average with going As you through volumes have the is and mentioned, volume important year. the increase, by an higher to driven the combination and

explained more that and beginning of that fee is a number significant also capabilities. attached last reason a volume income fees. I experienced at to the source this of deploy pace previously, the grow second income significant going year is to specific the before, continue in we of for The than to clients at And although FX the of slower we rebound that

on number we project are that events cannot year, volatility specific of we to going cure Last a that have that capitalized we again.

explanation. So summarizing and part, growth part in of the solid margins okay? very terms the fees, in income is of terms of a slower This

The second expenses. relates part to

plan disruptive we out, units to business in developing point you investing inside capabilities the and heavily continue ones. the in As

the very figures the and business although bigger And the initiatives happen a of also to the at and grow year relative cost and growth base the are expansion disruptive pace starting the line these so faster on. a us than units, going is exact a what to than in weight and increase, in not previous are to example to Inside previous year with are the all. transactional going be are going of going be income that the the significant of simple initiatives, contribution, terms of disruptive is the is going lets client to activity see at the to initiatives

money. to we but than is disruptive when size less an the XXX still XXX% I improvement a have But relative If initiative XXX% say that of something have because have been significant is efficiency efficiency we double. ratio ratio lose total impact size of the

Do we're XXXX not these that the significant ratio figures. the you -- to margins in net of efficiency we clear? an if from quarters see still increase different actual very combination why So are interest the margin, a explains having I expect have am four you

see you developing super clear, like thank two Like the from not just CapEx expenses, XX? here. but are all target, on efficiency products. color -- and calls, for and and guess said, should say, one this -- like They structural what explanation. some let's already a the are are some because, You I now, they do And were No, discussed to and components as you final previous that's this years in -- of kind doing there you kind of going right? efficiency be

some inflation is at should when we expect levels, we that So the down point, Credicorp? G&A happens, should to more for right? like So level coming what see

itself, around reflects have in factor relative whole that of more Digital XX%. the in am around That reflects portfolio. the weight on but the by I I provide already including the mentioned a and number to composition, initiatives the relative terms you going in our communicated Yeah. that of changes market our to continues P&L have disruptive efficient we bigger to is figure and a that the that to Day

Got it. Thank you.

Scotiabank. Our next ahead. Juan question with from go comes Recalde Please

Hi, funding. is good to for Thank you and my question morning. taking deposits My question. related

low deposits had percentage interest-bearing relatively a the same funding And at saw of been So deposits total flat decreasing time, we XXXX. as deposits and in cost increasing. year-on-year the

for evolution growth So deposit Yape XXXX? funding how the deposit what you breakdown and play in breakdown? can about growth think should the think and we And do role

Okay.

the need deposits low-cost pandemic the come to the relative of of that can funding terms. a the dynamics, previous back certain period. in pandemic, the relative base Because and remember short-term structure during we pandemic, think to infusion if understand was and I deposits to low-cost system to financial in the the sizes the a had I in we significant

the Reactiva. of have impact We

billion As XX short-term much and Reactiva you being Central from remember, recirculating the end PEN XX-something up PEN very of significant almost that. that we're billion the deposits, funds imposed of Bank with is transactional economy

went the lot of -- of the to had finally, the the these combination of in in levels, releases we during floating, economy funds to The income the money period deposits high economy. some to using that increased the capitalize due our factors of releases. the who of And opportunity restrictions capabilities. time, and was short-term temporarily Peru didn't pension A the transactional transactional record source three impact much deposits. five funds, the have at people spend the these Another and

we So share. only our share, but market captured increased not we our

the starting or economy, reverse. these dilute When we normalize to factors start all are to

not were funds. Reactiva importantly, again. more money significant from paid. people example, For the disbursement There spending And the started pension the were

funds So already liquidity is out at the paid. initial that Reactiva That Reactiva has market. you of funds, XX% this around point, the XX% of been take

in to significant X%. And increase have excess so from deposits in addition almost who for opportunity rates, we cost X.XX% increases interest the to a the people that, have

that our the high very and So levels our we promoted terms is What that. to digitalization, the explained temporary levels transactional between composition general the and not pre-pandemic to expect are come something levels capabilities. going back, for for but figures pre-pandemic

bank when out role this, What the the the make play transactional of and your the of is average in that transactional you instead you only money, bills, digitalize Yape money in client we you And let bank And the take to around, as an in transfers. XX% the figure that with measured. payments and XX% can all going or additional of of electronic identified average deposits. we volume we have have maintain our

a whole. that to the measure So performance it's a contribution. Yape and measure We significant valuable as of

Helpful. Thank you comment. for the

from go comes next Our ahead. Please question [Indiscernible].

good one gentlemen. have just Yes, by one. I morning, three to questions, go going

first growth. regarding loan The one

course, of in loans. total for is I'm to X% your that guess growth what interested would of X% Reactiva you X% But which be growth think, is -- I or XX%. would loan guidance around X%, total loan announced because of structural So said your I

would loans be Reactiva that believe you implicitly, repaid. fully So

repaid So XX%, the zero. let's is X.X%. more to or that's X% or that structural correct is assumption no? Once Is Reactiva less it, call of

as But marginal. is Reactiva stated, it is assumption. very of reasonable in P&L Yeah, a we the impact the

Yeah. Gianfranco. This is

your assumption So correct. is

will very So basically, of be total it in loans. terms flattish

Reactiva margin. As mentioned, loans Cesar basically have no

different. completely impact is the on So margin

Okay.

Good. Okay.

So margin. question the that was actually next my regarding

are it's you're again, that of to coming So thin if accretive NIM guidance, much you loans. you're margin said But about expansion, and we like significant that that. very you anything, impact things within look spoke and pretty these the because retail, that, I to NIM your hire of at retail, Reactiva expansion margin how a you assuming going mix if are guess that I is shift and Pyme assuming from

rate structural, that -- shift? how much delayed increases? which is the interest impact rate mean is mix that So And from how like much of by of still of interest

rates the to of though I trend the direct because are that the is XXXX, expect even significant the the be average higher XXXX a answer going rate is rates of think than average contribution we are different.

to In to downward is be a the an going 'XX year average going higher. be XXXX, During target point some trend. at the was up it's trend. But of

NIM. this the of going be is So to a expansion of the component key

And is the it's factor, as gradual mentioned. because in significant more second less the shift portfolio composition you the

Okay.

Mibanco. this the And then it. with to final Got Okay. regard question

So I'm what here's not understanding.

think So default you your just sorry, that the that in ratio structural to that actually maturity chart slide your of you in NPL there XX, the led -- NPL spoke, has Mibanco this or XXXX -- your presentation, the your and various to you shown on release, it's for when that and slide. vintages Page shows and lets that have is there of that to earnings But increase at is declined specific X.XX%. December on one risk of cost structural a shows risk, businesses in portfolio presentation which your cost a to I shows ratio I then in rise look

it's been 'XX and X% on under So decline, gradual it's already X%. it's from in and gone like anywhere

is I to between think cost Mibanco? this, question -- about I my ratio So your respect how disconnect trajectory of the can risk and your how NPL should trajectory with

XXX% that to the credit write-off loans ratio NPL and basically -- mean, basically I we've in already strategy aggressive in Basically, the Yeah. provisions. the improvement in reflects Mibanco implemented response

besides it we incorporated reflects the XXXX year-end XXXX. specific of facing macro the expected challenging projections the environment our the is things specific I before, in loss in are And mentioned also remember that the vintages that case the calculations for -- of

factors. are like there two So mix

Okay.

So to I just clear. want very be

those are So some off to nonperforming, you're policy correct? is you've you NPL ratio declined loans, with the write-off saying written your accelerated your because that which reason has So loans right? respect

the Mibanco guaranteed Reactiva with that Correct. basically off loans. government. Reactiva the the write-offs percentage we they have the positions due fact loans written to the also An by of directly And write-off whole positions, have we plus were those important funds, not

Okay.

right, higher squeezed that of there's of whatever, people higher, cost the then be of of loan or you're regarding in inflation higher because right? assumption, potentially maybe your out you IFRS should that And now of -- risk higher defaults, like model your Okay. model an the model whatever your for you That's cost is think this like cost saying higher risk because essentially, like into you spits your income, telling right? terms fit cost risk, and

cost last X.X% the on quarter risk of repeated of of That's Exactly. XXXX. the

mention I is then material that's second very XX of first not? big your Like, brief about? final you said the all, business. question, IFRS Okay. -- or all what in very that Is impact even is something about And insurance it? something about how implementing And heard

in of impact an Thank material Pacifico's we of first in X% Credicorp's reference, not you or for equity. have question. credit cards an important No, X% Pacifico's equity. believe or XX we Pacifico's in equity or reserve their estimations total our represents around impact And are of in Only as need equity. the the around the X% equity -- will IFRS will of initial increase a that equity

levels. So at material at the be end the impact Credicorp's won't

That's much. Okay. very helpful. All Thank right. Understood. you

next from Santander. comes Andres Soto Our go question ahead. Please with

scenario social mentioned presentation. a for Which the that current before And are may context. political Good you regarding you and quality current You the environment. morning tourism about? vis-a-vis My as concerned all. in thank question your areas is to outlook on asset suffer Peru's

if you exposure suffer to concerned would pockets prolongs may beyond business better your Thank or situation the like exposure? where to you I of are So about be also start industry you. mentioned, how to on that this your that you -- quarter you which understand first do this concerned are microfinance

the concerned market, are well as those commercial the I in we what mean, Yeah. tourism in Having in industry well that, said wholesale real are the estate. Basically, portfolios might happen somewhat collateralized.

real estate behind it. have We

hopefully And providing wholesale with go to necessary months. see the patience So on matter a basically it's through those of following we plants the will helps in market. better That's and this crisis. the times

most experience affected, the mean, I ways. that different much the in a provide at on crisis different but portfolios contacting end a in helped segments us and retail, of very than resulted the default we of lower lot expected. the in of terms them necessary some both did pandemic them in SME help COVID revenue the the defining initially the consumers alternatives aggressively low we to are In specific course,

are those So consumer traditional remember, those to on this better are the loans Cesar be to are segments as current the I probably segments that exposed going than But generate both portfolios. crisis. margins that and mentioned, most SME

is Thank you on very tourism loan the your to much. much estate, segments? of exposed that, how And dimension commercial book on the real these and

-- not that concentrated not we but mean, have I number have all is in specific big. basically a the I over cases today, country, this Lima. precise don't basically are hotels and there It's but

them and we to industry is a mean, a effect necessary go time quite I of basically we've it's as the So -- And whole. the for before, manageable seen the as matter time through crisis. providing the

much. very Understood. Thank you

Oak Magesh go Tejkiran Kannaluri from comes Please White with ahead. question Our next Capital.

good have Hi, afternoon. I two questions.

The a of first the flows. understanding bit is of provision

billion. at consolidated for has this So which X.XX PENXXX X.XX quarter million PENXXX is on allowance by But is loan XXX million. to PENXXX we terms sheet last billion of million. which from around last higher basis quarter, the absolute in around provisions have quarter, balance stock than the than on losses overall was gone the down a And also write-offs lower Credicorp --

lower So write-offs and we allowance losses. loan have higher lower provision but for

the my you. my have That's question. help provisions where you understand I'll come second. extra me Thank with could So first gone? please back

question mean, have reasons the required guarantees are it's have the grown collateralized, don't segment. ratio, that I Basically, know well less if the wholesale a requires the of explained. and that some good we retail with the Remember I provisions than coverage of because for correctly. I segment got specifically we've your we provisions provisions

than other written have faster And at behind. lot the the off it's retail collaterals portfolios segment, that usually a

So that's of questions got the I if general macro basically explanation it the right.

have on you of quarter and the to stressed and the recoveries been from one? upgradations Understood. last recoveries the loans how the comment compared And this rate post can

off important in we've basically, seen like so level of we recoveries the change have and a that seen -- stable written mean, of number basically, haven't last an we I loans few quarters. in

as trend? my is current think SME And last level, you chance on loans the over at of other that's up will well? to gone macro/political XX%. sustained it question environment? levels higher And BCP, to the a dollarization from has you. Thank because difficulties the do And this any specifically of in And XX% that is spill in portfolios is there dollarization

Maybe I can take that one.

funding because price, of XX% sorry, no for you $X,XXX, Regarding business, current political number, the SME situation. but that's -- of the progress, I'm in companies. If the in that SME said limit go number whatsoever the there's checking I mid-market -- the

Either We have basically companies have to -- dollar-generating related are export they quite has that's XX% -- because those XX% or from that a directly last That's are suppliers exposure dollar are year. to to businesses. over gone the they exporters. the

exposure foreign the concerns no have we regarding that segment. in So exchange

Understood. Thank you.

Our ahead. next HSBC. go Please Gomez from question with comes Carlos

see and are on has question. you operations did impact And thank than what ago? X side. better political the It's months more today situation or a do the economic or And again, you day-to-day worse on How the today? And my concerned basis? Hello. your current for you over XX disturbances taking you

this There's of very tunnel. in end all question. lot less today I the of not is table on. was the the as do and today sure yesterday. not same the volatility or noise is opinion. turmoil to that are light how I'm going difficult to compared Carlos, of really so a and sitting concerned more But I opinion, personal I of at political much you -- am I'm This It's terms answer a may Gianfranco. have and in a concerned see this people

lot this of On -- ministers a on the so of executive on the of capacity and this because of and top the was high. There on public very processes is that, power President government prior of of a the corruption. judiciary its and execution was Unfortunately, -- are based is lot lack information.

are we forward. positive in what say, going would I So more we see

three of troubles last months more compared months few Obviously, which even social the over political today unrest six to, we been we've ago But about today, and there's know, talking positive as or a generating lot overall, I minutes. the turmoil are ago. don't is

your And terms the impact of in operations? on

have two In terms some answers there. of operations, we had --

in We that basis. a has correctly. shut managed of of -- at since Basically, Mibanco's rural closed more we've Mibanco some a impact basis hourly we've BCP, been today. had burned. business, much whatsoever. hasn't daily major operating the on a issues areas have But some Mibanco branches had branches because on to had microfinance are which operates were a branches even down two -- on Those

in collect. impact concerned on our portfolio a in of and terms of And -- it because of no XX employees. [ph] there impact. our of we're on clients problems, luckily, small million for personnel around how to our of solid a personnel What somehow happened terms the we're is tiny logistic to Nothing concerned lack and capacity side pay were

on would I major impact. operational side, the So the say, those are,

much. very you Thank

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

we all and our on which involves strategy you the the we many near-term on purpose, underway advancing uncertainty, based more outlook, your XXXX. keep Thank delivering will for our throughout questions. Despite have executing initiatives

However, as risk current we managing the in we always will environment. given prudent be have local been

Although information teens and today. of ROE the on in guidance in our our the it's based potential in our social still unrest our best of the includes XXXX our businesses, early current we economy to impact accurately estimate maintaining estimate have high

continue of increase prolonged, to retail. our portfolio towards will to and towards period continues as risk continue rates of levels. Cost interest be expect the levels to pre-pandemic We will of could normalize loan NIM shift high

the stability the of reduction country macroeconomic which in still an needed of to prior years this loan democracy will growth fundamentals, continue we and disruptive to consecutive make Finally, rebuild investing single-digit maintains the ventures. general the and register to election peace, institutional XX to framework digitalizing next environment in our led businesses high we inclusion. brings that in hopeful poverty pandemic. the book. country traditional to expect possible, And Peru I and the the am

that and structural poverty those that access in hope to equal solving widespread are the those We protect elected and education. prioritize Peru, fundamentals health problems an and

income education financial poverty inclusion. to which By the contributing we the that to alleviation, people the economic agenda as to committed as savings, the and and through achieve goal are of inclusion our We greater greater those security efforts economic list of well increasing is to achieve lower included, support can financial women, elderly, closely of tied education living those in levels rural of levels social accelerating independence. and are areas generation

due the transition have as our global leading energy that for in of has We opportunity to Peru a metrics with process. the through wasted opportunity also context this changes government five advancement in fundamentally country years investments positioning process. shifting The XX fossil in will next environmental policy The renewables. fuels resulting important change of participant and away the believe prior to from an the energy

If governments growing should technologies the capable the can climate required of Andean governments key of is for only demand energy advancing be supplier the addressing our therefore, education And region having our health of on tremendous in to exponentially needs, change. and as Global more metals. positive commit stability a these impact reduction in a and we focus on improvement and quickly on infrastructure poverty then strengthening reach us, front can potential services. fundamental metals realize

speaking all. call. with Thank next look on I you forward our you to

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

may now You disconnect.