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1 CREDICORP November, 2005. 2 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions.

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Presentation on theme: "1 CREDICORP November, 2005. 2 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions."— Presentation transcript:

1 1 CREDICORP November, 2005

2 2 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions Overview

3 3 Macroeconomic Highlights 1/ End of each period. (e) Estimated by BCP for the whole year *Accumulated as of August 2005 **Inflation rate during the last 12 moths from August

4 4 Going Forward Opportunities  Camisea Gas Project: LNG, Mercosur  Minning Projects:Cerro Verde, Las Bambas, etc.  Free Trade Agreement US:Agriculture, textiles  Investment Grade Risks  Commodity Prices  Fiscal Deficit  Presidential and Congressional elections 2006  Etno / Coca / Anti-Minning movement

5 5 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions Overview

6 6 Credicorp’s structure Bolivia Banking Peru 96% Banking Bolivia 100% Banking Cayman 100% Insurance Peru 76% Investment Peru 100% Pension Fund Peru 100% Atlantic Security Holding

7 7 Credicorp - Financial Highlights ** Acquisition of BSCH’s loan portfolio US$719 Mn, in Dic Acquisition of Bank Boston’s loan portfolio US$353 Mn, in January and February Sale of Banco Tequendama’s US$ 307 Mn, in March 2005 Source: Audited Financial Statements and for 2005, Credicorp’s 3Q05 report

8 8 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions Overview

9 Sept05 Loans in dollars (%) Deposits in dollars (%) PDL / Loans (%) Reserves / PDLs (%) ROE (%) Bank Deposits (US$Bn) Bank Loans (US$Bn) Mutul Funds (US$Mn)1,5032,0071,7671,965 Corporate Bonds (US$Mn)1,1821,7512,2932,325 Peruvian Financial System - Highlights Source: SBS

10 10 Source: ASBANC, Superintendencia de Banca y Seguros (1) Includes: Loans from banks and Financial Inst. Peruvian Financial System - Loan Structure

11 11 Peruvian Financial System - Market Share (1) (1) Includes Banks, Finance Institut., Leasing Companies, S&L Regional Institut.. Loan Deposits Source: BCP, SBS

12 12 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries - BCP Consolidated - Banco de Credito de Bolivia - Atlantic Security Holding - Pacifico Peruano Suiza - Prima AFP Credicorp’s earnings contributions Overview

13 13 BCP Consolidated : Strategic Approach  Market penetration in segments C and D  “Banking made simple”  Transactional Businesses and Services  Highly efficient and profitable distribution network  Excellence in quality service: Leadership  Cost Control, high level of efficiency

14 14 Corporate Middle Market Institutional N°of clients Segmentation Aprox. 1,000 companiesAprox. 4,200 companies Aprox. 600 institutions Corporate Finance Finance Trade Finance Leasing BusinessService Underwriting and Financial Advisory Services to corporate clients and middle market business Maintains commercial relations with foreign financial institutions. As of Sep, 2005 BCP financed 34.3% and 33.7% of total Peruvian imports and exports respectively Offers and manages financial leasing operations. BCP is the leader in the system with a market share of 38.6% of total leasing Develops transactional services that handles the exchange of information and money transfers to corporations, midsize companies, institutions and micro-business companies. Provides loans and banking services to companies with annual income over US$15Mn Organizations with annual income between US$1Mn and S$15Mn through 7 regional managers nationwide Serves state and local government entities, international organizations, non governmental organizations and educational institution Limited growth prospect due to : (i) high market penetration and (ii) competition from Capital market in loans Additional comments Expected growth is to match growth of GDP Serves clients with financial needs :deposits and investments of transactional products in general and to a lower degree with loans Support Units BCP Consolidated: Wholesale Banking

15 15 BCP Consolidated: Market Share Wholesale Banking

16 16 ConsumerExclusive Small Business Micro-Business N°of clients 1,653,481 households 54,132 households 8,149 clients 139,004 clients Segmentation Offers traditional products to the mass consumer segment Profitable segment. Generates high volume of business. Segment:US$10 thousand in loans and US$20 thousand in deposits Serves small and middle market business with annual sales less than US$1Mn Serves small and micro-business, mostly personal and family businesses, which are offered standard and simple products BCP Consolidated: Retail Banking Figures as of Sep 2005

17 17 BCP Consolidated: Distribution Network 32.6% 25.8% 19.4% 12.1% Sep-05

18 18 PROFITABILITY EFFICIENCY Figures are in IFRS NET INCOME (US$ MN) BCP Consolidated : Financial Highlights

19 19 Past due Ratio (%) Coverage Ratio (%) BCP Consolidated : Loan portfolio quality Substandard loans (C+D+E) /Total Risk Ratio (%)

20 20 US$ 6,169 Mn Deposits Loans US$ 4,479 Mn Figures as of Sept 2005 BCP Consolidated: Deposits and Loans Structure

21 21 * Acquisition of BSCH’s loan portfolio US$719 Mn, in Dic Acquisition of Bank Boston’s loan portfolio US$353 Mn, in January and February BCP Consolidated: Loans by segment

22 22 BCP Consolidated: Profit & Loss Source: BCP

23 23 (US$ Millions) Sep 05 Net Equity Deposits Mkt. Shr. (%) Loans Mkt. Shr. (%) PDLs / Loans (%) Total Bolivian Bank. Syst. (%) Reserves / PDLs (%) Total Bolivian Banking Syst. (%) Net Income ROE 0.0% 2.7% 8.4% 14.2%  BCB has improved its results by following an aggressive provision requirements. Its loan portfolio has been cleaned-up and its quality is better that the system’s  BCB’s operations is totally integrated to BCP’s business model.  BCB is overcapitalized and in a unique position to grow. Plans have been frozen until political situation is clear. Bolivia Banco de Crédito de Bolivia

24 24 Atlantic Security Holding (US$ Millions) Sep 05 Growth % Sep05/Sep04 Net equity % Deposits % Net loans % Investments % Managed Funds % ROE (%) Net Income %  Increased the contribution of fee income (Fund administration and brokerage services).  Managed funds increased from US$709Mn in Sep to US$900Mn in Sep  Re-balanced investment portfolio with market risk. Lower profitability but more stable results.

25 25 (US$ Millions) Sep 05 % Sep05/Sep04 Net Equity % Total premiums % P&C Insurance % Health Insurance % Life Insurance % Net Income % Net claims/Net prem. Earned (%) Combined ratio* (%) * Net claims + Gral. Expenses and commissions / Net premiums. Does not include the life insurance subsidiary Pacifico Vida Pacifico Peruano Suiza

26 26 Pacifico Peruano Suiza

27 27 Prima AFP has generated higher competition in the Private Pension Fund System. Prima’s strategy to introduce low commission rates is based on a low cost and efficient operating structure. Its commission rate is 1.5% of workers salary, which is 33% lower than the average commission of the system. It started operating in the most relevant cities across the country. Arequipa, Chiclayo, Trujillo and Piura. Average net income expected for each year is between US$6 million and US$8 million. It is expected to generate US$10 million loss during the year and reach break even in first half of Results reached US$3.5 million loss as of Sep 2005 The start up capital contributed to Prima is of US$15 million and is expected to increase by additional US$ 15 million by the end of the year. Prima AFP

28 28 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions Overview

29 Sep05% Sep05/Sep04 Banco de Crédito % Atlantic Security Bank % Pacífico Peruano Suiza % Tequendama (1) % Grupo Credito (formerly ICSA) % Credicorp and Others (2) % Net Income % ROE5.2%9.3% 13.2% 16.8% - (US$ Millions) (1) 2002, 2003 and 2004 do not include provisions on Tequendama’s investment and provisions for loan portfolio transferred to “Credicorp and Others” line. (2) Includes other provisions for contingencies and expenses, and Goodwill Amortization until year Credicorp Earnings Contribution

30 30 Agenda Peruvian Economy Credicorp Ltd. Peruvian Financial System Credicorp’s main subsidiaries Credicorp’s earnings contributions Overview

31 31  Credicorp’s results are ahead of our expectations:  Positive trends in banking subsidiaries.  Lower provisioning requirements for BCP’s loan portfolio, higher net interest income and growth of fee income.  Rigid operating cost control in BCP  ASH will continue to concentrate on increasing its fee income related to its wealth management business and maintaining a lower risk profile in its proprietary investment.. Atlantic’s ROE is 13%  BCB’s has improved its results due to lower provisioning requirements PDL and Coverage ratios are better than the system’s. BCB’s ROE reached 14% during the first nine months of the year compared to 6% reached in the same period a year ago.  PPS had a negative impact in the marine hull business due to higher casualties during the first two quarters of the year. Consolidated total premiums increased during the first nine months of the year mainly in P&C business and Health insurance segment.  Prima AFP started its operations in August. With a low cost strategy, the company offers to its customers competitive rates with value added services. Prima’s commission rate is 33% lower than the average of the system. Prima AFP will generate US$10 million loss during the year. Break even will be reached at first half of Overview

32 32 Safe Harbor for forward-looking statements This material includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of All statement other than statements of historical information provided herein are forward-looking and may contain information about financial results, economic conditions, trends and known uncertainties. The Company cautions readers that actual results could differ materially from those expected by the Company, depending on the outcome of certain factors, including, without limitation: (1) adverse changes in the Peruvian economy with respect to the rates of inflation, economic growth, currency devaluation, and other factors, (2) adverse changes in the Peruvian political situation, including, without limitation, the reversal of market-oriented reforms and economic recovery measures, or the failure of such measures and reforms to achieve their goals, and (3) adverse changes in the markets in which the Company operates, including increased competition, decreased demand for financial services, and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in the Company’s business strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.

33 33 CREDICORP November, 2005


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