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CREDICORP Jorge Ramirez-del-Villar Head of Planning & Finance Banco de Credito del Peru.

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Presentation on theme: "CREDICORP Jorge Ramirez-del-Villar Head of Planning & Finance Banco de Credito del Peru."— Presentation transcript:

1 CREDICORP Jorge Ramirez-del-Villar Head of Planning & Finance Banco de Credito del Peru

2 2 CONTENTS PERUVIAN ECONOMY AND BANKING SYSTEM CREDICORP –BCP –Other Major Subsidiaries –Overview 3Q 2003

3 3 PERUVIAN ECONOMY AND BANKING SYSTEM

4 4 PERU’S HIGHLIGHTS Regime: Democracy with three independent Powers: Executive, Congress and Judiciary Area : 496,234 sq. miles Population: 27 million (Urban 72.3%, Rural 27.7%) GDP per capita: US$ 2,100 Unemployed or sub-employed : 56.5% Major cities : Lima (capital), Arequipa and Trujillo Religion: Catholic Chile Colombia Brasil Bolivia Ecuador Households’ Indicators

5 5 MexicoBrazil Colombia ChilePeru GDP (US$ Bn) 590.5 497.577.168.361.1 GDP Growth (%)1.50.72.83.23.8 Inflation (%)3.59.66.33.61.7 Devaluation (%)22.029.129.1(2.7)(0.7) Deposits/GDP (%)16.632.524.462.222.7 Fiscal Surplus *(0.5)(5.0)(5.0)(0.8)(2.1) Current Account *(2.1)0.0(2.0)(0.3)(1.6) Int. Reserves/Mthly Imports3.19.27.98.511.2 Country Risk (bps)**187568448143290 * As a % of GDP ** JP Morgan Index EMBI : Spread of Government Bonds over US Treasury Bonds as of Nov. 2003 PERUVIAN ECONOMY vs. OTHER LATIN AMERICAN ECONOMIES 2003(e) Source : The Economist Intelligence Unit, BCP (Peru)

6 6 BrazilMexicoChile ColombiaPeru Assets 320.5 163.2 68.2 26.3 17.6 Loans90.3 90.0 42.3 16.5 10.6 Deposits128.8 121.8 27.3 19.3 13.2 Equity25.3 16.3 5.7 2.6 1.8 Past Due Loan/ Loans12.5%4.8%2.0%10.2%8.0% Reserves/Past Due Loans105.4%136.2%135.2%77.8%133.0% Cost/Income53.9%64.5%51.5%84.7%60.5% ROE8.8%12.8%14.8%11.3%8.2% PERUVIAN BANKING SYSTEM vs. OTHER LATIN AMERICAN BANKING SYSTEMS 2002 Source: Fitch Ratings, IMF US$ Bn

7 7 GDP growth of 4.0% for years 2003-2004. Inflation and devaluation under 2.0%. Marginal improvement in fiscal position Growth of loans and deposits in line with the economy Slight increase of private investment Gradual reduction of spreads due to increased competition (Banks and Capital Markets), as well as excess of liquidity Continued improvement of loan quality ratios Lower growth of non-financial revenues due to banking transaction taxes Reduction of bank’s operating costs MOST LIKELY SCENARIO FOR THE ECONOMY AND THE PERUVIAN BANKING SYSTEM FOR 2003-2004

8 8

9 9 CREDICORP’S ORGANIZATION BCP accounts for 85% of Credicorp’s assets Ic INV.CREDITO

10 10 One of the top 20 financial institutions in Latin America Established in Bermuda in 1995 Presence in Peru, Bolivia, Colombia, USA (Miami) and Cayman Total Assets US$ 8,224 Mn, Net Equity US$ 892 Mn 353 offices, 489 ATM’s 9,321 employees Listed in the NYSE CREDICORP HIGHLIGHTS

11 11 Assets43.156.316.94.88.2 Loans22.724.311.62.64.5 Deposits29.320.08.13.36.3 Net Equity5.94.41.40.50.9 Net Income (Mn)49954521211257 RATIOS Past Due/ Loans 5.6%7.9%2.4%1.5%7.6% Reserves/Past Due Loans119.7%142.1%94.3%324.6%113.7% Cost/Income 53.0%55.9%45.1%56.0%49.2% ROE 13.1%16.7%24.3%31.0%9.0% CREDICORP vs. LARGEST BANKS OF OTHER LATIN AMERICAN COUNTRIES Sept. 2003 BBVA México Bradesco Brazil Bancolombia Santander Chile Source: Bank’s 3Q Reports US$ Bn Credicorp

12 12 Branches 1,6433,033346364353 ATM’s3,87521,5851,098760489 Employees 28,61377,1547,6846,3649,321 Market Share - Loans25.6%19.5%25.9%13.2%32.9%* - Deposits27.7%15.2%25.5%11.5%35.4%* BBVA México Bradesco Brazil Bancolombia Santander Chile * BCP’s Market Share Source: Bank’s 3Q Reports CREDICORP vs. LARGEST BANKS OF OTHER LATIN AMERICAN COUNTRIES (Cont.) Sept. 2003 Credicorp

13 13 CREDICORP OVERVIEW Summary of Results (USMn)3Q023Q039M029M03 Net Interest Income77.290.0247.5267.9 Provisions32.223.887.977.8 Other Income89.9105.3275.2327.4 Claims on Insurance Activities25.524.773.476.3 Operating Expenses94.9102.7295.9324.2 BSCH Peru Merger Costs---17.5 Translation Result-0.90.4-2.9-3.7 Earnings before Taxes and Min. Int.13.644.562.695.8 Income Tax-8.8-13.3-26.6-29.8 Minority Interest-1.8-5.2-7.2-9.2 NET INCOME3.026.028.856.8 EPS* 0.04 0.33 0.36 0.71 * 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

14 14 CREDICORP OVERVIEW Earnings Contribution (USMn) 3Q02 3Q039M029M03 Banco de Credito 10.028.737.363.8 Pacifico2.70.16.36.9 Atlantic0.12.51.54.7 Tequendama*-3.1-0.2-3.5-0.4 Credicorp & Others**-6.6-5.1-12.7-18.2 Financial & administrative expenses0.7-0.3 -0.4-4.2 Tequendama’s loan loss provissions & translation losses-6.0-2.0-6.1-5.3 Venezuela’s operation translation loss-0.5--4.0- Generic provision--2.0--6.5 Goodwill amortization-0.8-0.8-2.2-2.2 TOTAL INCOME3.126.028.856.8 Assets7,399 8,224 7,3998,224 Net Equity798892 798892 BIS Ratio (%) 12.211.1 12.211.1 * Excludes transfers to Credicorp and others **Includes income from ICSA

15 15

16 16 BCP HIGHLIGHTS Largest bank in Peru 114 years old Total Assets US$ 6.7 Bn, Net Equity US$ 611 Mn Market share of 35.4% in deposits and 32.9% in loans More than 1.2 million of customers (40% of the market) 213 offices, 427 ATM’s 5,583 employees Considered in year 2002 by LatinFinance as the best bank in Latin America

17 17 BCP’S BUSINESS SCOPE Wholesale Banking: Commercial Banking, Investment Banking and transactional products offered to corporate and middle market companies. Retail Banking: Wide range of products and services for individuals, small businesses and non-profit institutions. Capital Markets: Brokerage, mutual funds, foreign exchange trading, custody, asset management, securitization and trusts. Distribution Network: 213 offices, 427 ATMs, 11,645 POS, telephone banking and home banking for over 1.2 million clients.

18 18 BCP’S DEPOSIT & LOAN STRUCTURE Loans US$ 4,102 Mn US$ 5,694 Mn Deposits

19 19 Key Figures (US$Mn) 3Q02 3Q03 9M02 9M03 Deposits 5,329 5,694 5,329 5,694 Mkt Share (%) 32.9 36.4 32.9 36.4 Total Loans 3,699 4,102 3,699 4,102 Mkt Share (%) 32.9 33.8 32.9 33.8 Net Interest Income 76.0 84.1 236.8 247.5 Provisions 31.9 22.6 87.2 75.0 Non-Interest Income 56.6 64.5 164.2 196.8 Operating Expenses 84.5 84.1 253.8 259.2 Merger Costs - - - 17.4 Gain (Loss) on Inflation Adjustment 7.9 0.2 14.9 -5.9 Income tax 6.3 11.6 21.1 23.8 NET INCOME 17.8 30.5 53.8 63.0 OPEX / Income (%) 52.9 48.6 55.2 51.9 CONTRIBUTION 10.0 28.7 37.3 63.8 BCP OVERVIEW

20 20 Positive outlook for the bank during year 2003: - Lower provisioning requirement - Significant growth of non interest income. 20% more than in year 2002 - Marginal increase of operating expenses Merger with BSCH Peru concluded successfully. Results are better than expected. Strong recovery of written-off loans in BCP and BSCH-Peru. 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 of the perimeters of Lima. Large population density, very active in small businesses. Acquisition of 45% of Financiera Solucion. Ownership increased to 100%. Merge will be completed by February 2004. BCP’S RESULTS

21 21 BCP’S LOAN QUALITY PDLs / LOANS RESERVES / PDLs Consolidatedw/o Bolivia

22 22 CREDICORP’S OTHER MAJOR SUBSIDIARIES

23 23 CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003

24 CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 23

25 CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 23

26 CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 23

27 CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 * AIG 25% ** Total Premiums 23

28 Key Figures (US$Mn) 9M029M03 Assets657 747 Equity102 129 - Share Capital 40.7 40.7 - Unrealized gain/losses on investments -15.1 8.9 - Dividends -25.0 -5.0 - Retained earnings 96.3 77.1 - Net income 5.6 7.8 Net Loans154 151 Investments299 423 Deposits537 585 Managed Funds510 598 NIM (%) 3.4 2.4 PDLs/ Loans (%) 0 0 OPEX / Income (%) 37.8 20.7 CONTRIBUTION TO CREDICORP1.5 4.7 ATLANTIC SECURITY BANK 24

29 Key Figures (US$Mn) 9M029M03 Assets468480 Equity 57 55 Deposits330387 Mkt Share (%)12.512.8 Loans322320 Mkt Share (%)11.912.3 PDLs / Loans (%)25.321.7 Reserves / PDLs (%)47.977.0 25

30 Key Figures (US$Mn) 9M029M03 Assets293273 Equity 37 36 Deposits159154 Mkt Share (%) 0.9 0.8 Loans210230 Mkt Share (%) 1.5 1.5 PDLs / Loans (%) 4.7 1.2 Reserves / PDLs (%) 73.8 191.0 CONTRIBUTION TO CREDICORP-0.2 -0.4 26

31 Key Figures (US$MN) 9M029M03 Equity102 109 Premiums 192 225 - General Insurance121 129 - Health Insurance 19 19 - Life Insurance 52 77 Mkt Share (%) 32.7 30.2 Net Loss Ratio (%) 58.4 47.4 Combined Ratio* (%) 93.7 93.0 CONTRIBUTION TO CREDICORP 6.3 6.9 *S um of net claims, general expenses and commissions / net premiums 27

32 CREDICORP OVERVIEW 3Q03 l Good results for Credicorp during the third quarter - Significant increase in BCP´s revenues with control on costs - Positive trends in most subsidiaries l BCB - Improved results during the quarter with lower provisions - Loan portfolio clean-up concluded - Focus on restructure operations following BCP´s business model l ASB - Improved results during the present quarter with US$9 MM in non- realized gains in the investment portfolio - Reduction of risk profile of investment portfolio - Growth in administered funds due to increased focus on wealth management business l Tequendama - Search for alternatives to provide viability for its business 28

33 l PPS - Results benefited from lower claims and growth in premiums - Lower margins in property & casualty business due to increased competition and higher reinsurance costs - Attractive growth opportunities in life insurance with short-term increase on reserves CREDICORP OVERVIEW 3Q03 (Cont.) 29 l BCP - Continued pressure on margins due to increased corporate funding in local capital market and higher competition in middle market and retail segments - Positive outlook based on: -- Lower provisioning requirements -- Growth in non-financial income -- Increased revenues from purchase of BSCH-Peru assets and full ownership of Financiera Solucion -- Control on expenses with increased business volumes

34 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. 30

35 CREDICORP Jorge Ramirez-del-Villar Head of Planning & Finance Banco de Credito del Peru


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