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MERRILL LYNCH ROUNDTABLE Lima, March 2004 Walter Bayly Chief Financial Officer Banco de Credito del Peru.

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Presentation on theme: "MERRILL LYNCH ROUNDTABLE Lima, March 2004 Walter Bayly Chief Financial Officer Banco de Credito del Peru."— Presentation transcript:

1 MERRILL LYNCH ROUNDTABLE Lima, March 2004 Walter Bayly Chief Financial Officer Banco de Credito del Peru

2  PERUVIAN ECONOMY AND FINANCIAL SYSTEM  CREDICORP  BCP  OTHER SUBSIDIARIES  CREDICORP OVERVIEW 2003  CREDICORP OUTLOOK 2004

3 3 PERUVIAN ECONOMY Source : Banco Central de Reserva del Perú, INEI 2001200220032004(e) GDP Growth (%)0.34.94.03.9 Inflation (%)-0.11.52.52.5 Devaluation (%) -2.32.0-1.40.5 Fiscal Deficit *-2.6-2.3-1.9-1.5 Int’l Reserves (US$Bn)8.69.610.210.5 Int’l Reserves/Mthly Imports14.415.514.914.8 Trade Balance (US$Mn)-2662077101,249 Country Risk (bps)**513621318344 * As a % of GDP ** JP Morgan Index EMBI: Spread of Government Bonds over US Treasury Bonds as of March, 25 2004

4 4 PERUVIAN ECONOMY YEAR 2004

5 5 PERUVIAN FINANCIAL SYSTEM 2000200120022003 M3/GDP (%)25.025.525.524.5 Loans in US$ (%)84.180.379.677.8 Deposits in US$ (%)73.472.171.569.8 PDL/ Loans (%)9.89.07.65.8 Reserves/PDLs (%)104.2118.9133.2141.1 ROE3.14.58.410.9 Bank Deposits (US$Bn)12.912.913.713.2 Bank Loans (US$Bn)11.910.710.910.3 Source: Superintendencia de Banca y Seguros( SBS)

6 6 PERUVIAN FINANCIAL SYSTEM MARKET SHARE Source: Superintendencia de Banca y Seguros( SBS) BCP includes BSCH-Peru’s market share in Loans & Deposits in 2003 MARKET SHARE (Deposits) MARKET SHARE (Loans)

7 7 PERUVIAN FINANCIAL SYSTEM - LOAN STRUCTURE Source: Superintendencia de Banca y Seguros * Includes: Loans from Banks, Finance Institut. and Regional S&Ls.

8 8 PRIVATE PENSION FUNDS (US$MM) % GDP Funds MUTUAL FUNDS (US$MM) PERUVIAN FINANCIAL SYSTEM  An important disintermediation has taken place  Private Pension Funds reached US$6.4Bn as of Dec 2003. Mutual Funds amounted to US$2.0Bn  Stock prices are back to peak levels CAPITAL MARKETS (US$ MM) Corporate Bonds Market Capitalization BVL(Lima Stock Exchange)

9 9

10 10 CREDICORP’S ORGANIZATION BCP accounts for 85% of Credicorp’s assets Ic INV.CREDITO SECURITIES INC.

11 11 Credicorp Overview * Based on 79.8 million net outstanding shares in all periods. The total number of shares is 94.4 million, 14.6 million are held by affiliates as treasury shares

12 12 Credicorp Overview * Includes transfers from Credicorp and others to Tequendama **Includes income from ICSA

13 13 Credicorp Overview, Break down * Includes transfers from Credicorp and others to Tequendama **Includes income from ICSA

14 14 Credicorp - Dividend Payout * Includes an extraordinary dividend of US$0.20 (Backus & Johnston)

15 15

16 16 BCP & Subsidiaries DEPOSIT & LOAN STRUCTURE Loans US$ 4,102 Mn US$ 5,648 Mn Deposits Loans’ Interest Rates US$S/. Corporate 3.5%3.8% Middle Mkt 6.6%8.3% Mortgages 9.4% - - PYME 40.0%52.9% Consumer 15.5%23.7% Credit Cards 20.9%35.4% Figures as of Dec. 2003

17 17 BCP Peru - LOAN PORTFOLIO Source: Superintendencia de Banca y Seguros

18 18 US$Million BCP & Subsidiaries Interest, Fees and Non-interest Income 599 554 542 529 537 CAGR:8.3%

19 19 BCP OVERVIEW

20 20 Past due ratio(%) Past due Coverage(%) BCP’S LOAN QUALITY

21 21 Positive trends during year 2003: - Provisioning requirements declined in line with the improvement in the quality of loan portfolio - Significant growth of non interest income, 14.8% more than in year 2002 - Operating cost remained under control Merger with BSCH Peru concluded successfully. Results are better than expected. Strong recovery of written-off loans in BCP and BSCH-Peru. US$15MM during 2003. Market share consolidated with a slight reduction in loans after BSCH- Peru acquisition. NIM continued falling due to excess liquidity in the market, increasing competition in middle market and retail segments, and growth in domestic capital market. Focus on the informal sector at outskirts of Lima. Large population density, very active in small businesses. Acquisition of 45% of Financiera Solucion. Ownership increased to 100%. Merger completed in February 2004. BCP’S RESULTS

22 22 SUBSIDIARIES

23 23 ATLANTIC SECURITY BANK

24 24

25 25

26 26 * ( Net claims + general expenses and commissions) / Net premiums

27 27

28 28 Credicorp Overview Year 2003 1. Banco de Crédito BCP l Continued pressure on financial margin due to increased corporate funding in local capital market and higher competition in retail segment l Strong recovery of written-off loans contributed significantly to the growth in Non Interest Income. l During 2003 banking services grew by 12% mainly due to fees for debit & credit cards, checking accounts, mutual funds and transfers abroad 2. Banco de Crédito de Bolivia l Break even since 2H2003 l Loan portfolio clean-up concluded l Focus on restructure following BCP´s business model 3. Atlantic Security Bank l Improved results in the investment portfolio changing from US$7MM loss to US$11 MM in non- realized gains l Reduction of risk profile of investment portfolio. Investment grade 10% in 2001, 37% in 2003 l Growth in administered funds due to increased focus on wealth management

29 29 Credicorp Overview Year 2003 4. Pacífico Peruano Suiza l Results benefitted from lower claims and growth in premiums l Increased competition and higher reinsurance costs in property and casualty l Attractive growth opportunities in life insurance with short-term increase on reserves 5. Banco Tequendama l Search for alternatives to provide viability for its business l Focus on personal loans, consumer and small businesses with an increase from 13% to 26% of portfolio.

30 30 Trends  Banco de Crédito BCP - Lower provisioning requirements, better quality of loan portfolio and improved profitability. Tax on financial transactions (ITF) will impact on market and fee income.  Banco de Crédito de Bolivia - Operations to be at break-even during this year. We anticipate that all provisioning requirements have been met.  Atlantic Security - Reduced risk profile, more stable earnings.  Banco Tequendama - Colombian operations at break-even. Focus on personal loans, consumer and small businesses.  Pacífico - Continues to provide positive contributions and improve profitability. 100%Acquisition of NovaSalud EPS. Increase in Life insurance and Life annuaties business.  Credicorp - Debt has been reduced, lower interest expense Credicorp Outlook Year 2004

31 31 Safe Harbor for forward-looking statements This material includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. 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.

32 MERRYL LYNCH ROUNDTABLE Lima, March 2004 Walter Bayly Chief Financial Officer Banco de Credito del Peru


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