Transcript Análisis RAROC - Portafolio ASB

MERRILL LYNCH ROUNDTABLE
Lima, March 2004
Walter Bayly
Chief Financial Officer
Banco de Credito del Peru
PERUVIAN ECONOMY AND FINANCIAL
SYSTEM
CREDICORP
BCP
OTHER SUBSIDIARIES
CREDICORP OVERVIEW 2003
CREDICORP OUTLOOK 2004
PERUVIAN ECONOMY
GDP Growth (%)
Inflation (%)
Devaluation (%)
Fiscal Deficit *
Int’l Reserves (US$Bn)
Int’l Reserves/Mthly Imports
Trade Balance (US$Mn)
Country Risk (bps)**
2001
2002
2003
2004(e)
0.3
-0.1
-2.3
-2.6
8.6
14.4
-266
513
4.9
1.5
2.0
-2.3
9.6
15.5
207
621
4.0
2.5
-1.4
-1.9
10.2
14.9
710
318
3.9
2.5
0.5
-1.5
10.5
14.8
1,249
344
* As a % of GDP
** JP Morgan Index EMBI: Spread of Government Bonds over US Treasury Bonds as of March, 25 2004
Source : Banco Central de Reserva del Perú, INEI
3
PERUVIAN ECONOMY
YEAR 2004

CAMISEA PROJECT: Begins production phase in August 2004,
it will impact the economy as a whole through lower energy costs
while increasing exports. Camisea 2, a US$2 Bn LNG export
project, in final negotiation steps.

HIGH LEVEL OF COMMODITIES PRICES: The trade balance is
positively impacted and will generate increased tax revenues.

FINANCIAL TRANSACTIONS TAX (ITF): Negative impact on
demand for banking services, market development and
penetration of the formal economy.

FREE TRADE AGREEMENT WITH USA: Goverment is actively
seeking to begin formal negotiations. Trade Balange generated a
surplus of US$710 Mn in 2003 and may grow to US$1.4 Bn in
2004.
4
PERUVIAN FINANCIAL SYSTEM
2000
2001
2002
2003
M3/GDP (%)
25.0
25.5
25.5
24.5
Loans in US$ (%)
84.1
80.3
79.6
77.8
Deposits in US$ (%)
73.4
72.1
71.5
69.8
9.8
9.0
7.6
5.8
104.2
118.9
133.2
141.1
3.1
4.5
8.4
10.9
Bank Deposits (US$Bn)
12.9
12.9
13.7
13.2
Bank Loans (US$Bn)
11.9
10.7
10.9
10.3
PDL/ Loans (%)
Reserves/PDLs (%)
ROE
Source: Superintendencia de Banca y Seguros( SBS)
5
PERUVIAN FINANCIAL SYSTEM
MARKET SHARE
MARKET SHARE
(Loans)
35.0%
30.0%
25.0%
2000
2001
2002
2003
20.0%
15.0%
10.0%
5.0%
MARKET SHARE
(Deposits)
s
tro
35.0%
O
ba
nk
Ci
ti
nk
rb
a
In
te
BW
S
BB
VA
BC
P
0.0%
30.0%
25.0%
2000
2001
2002
2003
20.0%
15.0%
10.0%
5.0%
BCP includes BSCH-Peru’s market share in Loans & Deposits in
2003
s
O
tro
ba
nk
Ci
ti
nk
BW
S
rb
a
In
te
Source: Superintendencia de Banca y Seguros( SBS)
BB
VA
BC
P
0.0%
6
PERUVIAN FINANCIAL SYSTEM - LOAN
STRUCTURE
Dec 01 Dec 02 Dec 03
US$ Million
BANKS
Credit Cards
Consumer
Mortgages
Micro-businesses
Commercial Loans
Total
CAGR
03/01
253
664
1,032
269
8,277
357
654
1,150
246
8,201
474
722
1,322
298
7,281
37.01
4.33
13.18
5.15
-6.21
10,494
10,610
10,097
-1.91
208
253
304
20.89
298
414
570
38.30
11,000 11,277 10,971
-0.13
FINANCE Cos.
REGIONAL S&Ls
Caja Rur+Muni+Edpym
TOTAL
MIVIVIENDA*
34
104
232
160.09
Source: Superintendencia de Banca y Seguros
* Includes: Loans from Banks, Finance Institut. and Regional S&Ls.
7
PERUVIAN FINANCIAL SYSTEM
Market Capitalization
BVL(Lima Stock Exchange)
CAPITAL MARKETS
Corporate
Bonds
(US$ MM)
2,400
21,000
2,100
18,000
1,800
15,000
1,500
12,000
1,200
9,000
900
6,000
600
3,000
300
0
 An important disintermediation has
taken place
 Stock prices are back to peak
levels
 Private Pension Funds reached
US$6.4Bn as of Dec 2003. Mutual
Funds amounted to US$2.0Bn
0
91
92
93
94
95
96
97
98
99
00
01
02
03 04(e)
MUTUAL FUNDS
PRIVATE PENSION FUNDS
Funds
% GDP
(US$MM)
(US$MM)
10,000
14
2500
12
8,000
2000
10
6,000
8
6
4,000
1500
1000
4
2,000
500
2
0
0
94
95
96
97
98
99
00
01
02
03
04(e)
0
97
98
99
00
01
02
03
04(e)
8
9
CREDICORP’S ORGANIZATION
Ic
INV.CREDITO
SECURITIES
INC.
BCP accounts for 85% of
Credicorp’s assets
Industry
Banking
Banking
Banking
Insurance
Investments
Brokerage
Peru/Bolivia
97%
Cayman
100%
Colombia
100%
Peru
76%
Peru
100%
USA
100%
Assets(US$Mn)
Equity(US$Mn)
Funds Adm(US$Mn)
6,688
645
1,034
776
113
664
294
29
26
511
109
NA
51
41
NA
0.7
0.7
NA
N°Employees
N°Branches
5,583
213
53
1
306
15
1,107
37
NA
NA
12
1
Countryship
Ownership
10
Credicorp Overview
Summary of Results (US$Mn)
Net Interest Income
Provisions
Other Income
Claims on Insurance Activities
Other Expenses
BSCH Peru Merger Costs
Translation Results
Earnings before Taxes and Min. Int.
Income Tax
Minority Interest
NET INCOME
EPS (US$)
ROAE
12M02
335.3
111.6
374.8
97.9
411.1
1.7
-2.5
85.3
-32.6
-10.3
42.4
0.53
5.27%
12M03
Growth %
358.9
93.9
424.7
99.8
438.1
18.6
-2.7
130.5
-39.7
-10.3
80.5
1.01
9.39%
7.0
-15.9
13.3
1.9
6.6
994.1
8.0
53.0
21.8
0.0
89.9
90.6
-
* 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
11
Credicorp Overview
Earnings Contribution (US$Mn) 12M02
12M03 Growth %
Banco de Credito BCP
Pacifico Peruano Suiza
Atlantic Security Bank
Tequendama*
Credicorp & Others**
TOTAL INCOME
59.8
7.0
1.6
-17.2
-8.9
42.3
91.3
3.3
7.8
-5.5
-16.3
80.6
52.7
-52.9
387.5
68.0
-83.1
90.5
Total Assets
Net Equity
8619
824
8299
911
-3.7
10.6
* Includes transfers from Credicorp and others to Tequendama
**Includes income from ICSA
12
Credicorp Overview, Break down
(US$ Mn)
BCP
Net Income
Deferred taxes
Dividends received from Credicorp
Headquarters depreciation
PPS's losses from previous years
Credicorp loss from Tequendama loan portfolio*
Investments Provisions
BCP's profit
96.2
(0.2)
(0.5)
(0.7)
ASH
10.9
(3.1)
PPS
10.7
(0.8)
Credicorp and
Others**
0.1
(6.8)
Tequen
Total
111.1
(4.1)
(0.5)
(0.7)
(6.6)
(5.6)
(5.5)
-
(13.4)
(2.9)
(5.6)
(6.6)
1.1
88.2
(4.6)
(2.9)
(6.6)
(-) Minority Interest
Goodwill Amortization
94.9
(3.6)
-
7.8
-
1.1
4.4
(1.1)
-
Consol. Earnings Contrib.as of Dec'03
91.3
7.8
3.3
(5.5)
(16.3)
80.6
Consol. Earnings Contrib.as of Dec'02
59.8
1.6
7.0
(17.2)
(8.9)
42.3
Net Income after adjusting
* Includes transfers from Credicorp and others to Tequendama
**Includes income from ICSA
13
Credicorp - Dividend Payout
2000
2001
2002
2003
Cash Dividend per share US$ (1)
0.10
0.40 *
0.30
0.40
Total Net Income US$Mn (3)
17.7
54.5
42.4
80.6
Total Outstanding Shares (Mn) (2)
94.4
94.4
94.4
94.4
Treasury Shares (Mn)
14.9
14.3
14.9
14.6
Avge.closing Price per share US$ (4)
8.9
8.2
8.5
10.3
Closing price per share US$
6.0
8.8
9.4
13.4
Cash Payout (1) * (2) / (3)
53.3%
69.3%
66.8%
46.8%
Dividend Yield (1) / (4)
1.12%
4.90%
3.54%
3.87%
* Includes an extraordinary dividend of US$0.20 (Backus & Johnston)
14
15
BCP & Subsidiaries
DEPOSIT & LOAN STRUCTURE
Deposits
US$ 5,648 Mn
Demand
25%
Savings
27%
Loans
US$ 4,102 Mn
Middle Mkt
25%
Retail
32%
Time
48%
PYME
10%
Mortgages
14%
Corporate
43%
Credit Cards
4%
Loans’ Interest Rates
Figures as of Dec. 2003
Consumer
5%
Corporate
Middle Mkt
Mortgages
PYME
Consumer
Credit Cards
US$
S/.
3.5%
6.6%
9.4%
40.0%
15.5%
20.9%
3.8%
8.3%
-52.9%
23.7%
35.4%
16
BCP Peru - LOAN PORTFOLIO
BCP Peru
Dec 01
Comercial
Credit Cards
Consumer
Mortgages
Micro-businesses
Total
BCP Peru
Market Share
2,313
102
109
240
71
2,835
Dec 01
Credit Cards
Consumer
Mortgages
Micro-businesses
Total
Source: Superintendencia de Banca y Seguros
40.4%
12.0%
23.1%
13.5%
20.5%
Dec 02
Dec 03
US$ Million
2,434
2,477
107
143
87
100
347
494
103
141
3,078
3,355
Dec 02
29.9%
9.0%
29.5%
18.0%
23.5%
CAGR
03/01
3.5
18.5
-4.2
43.4
40.9
8.8
Dec 03
30.2%
8.9%
36.2%
19.5%
27.9%
17
BCP & Subsidiaries
Interest, Fees and Non-interest Income
US$Million
537
529
554
542
599
78
40
52
63
136
143
147
168
349
346
343
323
334
1999
2000
2001
2002
2003
500
52
400
187
CAGR:8.3%
600
300
200
100
0
Financ. Margin
FEES
Oth non-int
18
BCP OVERVIEW
Key Figures (US$Mn)
Deposits
Loans
Net Interest Income
Provisions
Non-Interest Income
Operating Expenses
Merger Costs
Gains/Loss on Inflation Adjustment
Income Tax
NET INCOME
OPEX / Income
CONTRIBUTION
ROAE
12M02
6,422
4,610
323.5
108.9
231.0
353.9
1.7
4.9
27.7
67.2
55.8%
59.8
11.96%
12M03
Growth %
5,648
-12.1
4,102
-11.0
334.1
3.3
89.6
-17.7
265.1
14.8
355.8
0.5
18.8
1,005.9
-11.9
-342.9
33.9
22.4
89.2
32.7
51.9%
91.3
52.7
14.86%
-
19
BCP’S LOAN QUALITY
Past due ratio(%)
8.3
8.6
9.1 9.5
8.8
8.1
8.6
7.6
6.1
4.9
BCP cons.
BCP w/o Bolivia
152
Past due Coverage(%)
1999
2000
2001
2002
2003
119
115
105
86
89
1999
94
133
109
98
2000
2001
2002
2003
20
BCP’S RESULTS
• 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$15MM
during 2003.
• Market share consolidated with a slight reduction in loans after BSCHPeru acquisition.
• NIM continued falling due to excess liquidity in the market, increasing
competition in middle market and retail segments, and growth in
domestic capital market.
• Focus on the informal sector at outskirts of Lima. Large population
density, very active in small businesses.
• Acquisition of 45% of Financiera Solucion. Ownership increased to
100%. Merger completed in February 2004.
21
SUBSIDIARIES
22
ATLANTIC SECURITY BANK
Key Figures (US$Mn)
Assets
Equity
Share Capital
Unrealized gain/losses on investments
Dividends
Retained Earnings
Net Income
Net Loans
Investments
Deposits
Managed Funds
NIM (%)
PDLs/Loans
OPEX / Income (%)
CONTRIBUTION
12M02
667
110
12M03 Growth %
776
16.3
113
2.7
40.7
-7.4
-25.0
96.3
5.8
40.7
10.9
-26.7
77.1
10.9
0.0
247.3
-6.8
-19.9
87.9
160
314
544
521
3.0
37.9
1.6
152
430
629
664
2.3
2.4
22.5
7.8
-5.0
36.9
15.6
27.4
387.5
23
Key Figures (US$Mn)
Assets
Equity
Deposits
Mkt Share (%)
Loans
Mkt Share (%)
PDLs/Loans (%)
Reserves/PDLs (%)
NET INCOME
Losses at BCP
CONTRIBUTION
12M02
475
57
383
12.7
313
11.7
25.3
62.5
0.0
-16.0
-16.0
12M03 Growth %
446
-6.1
56
-1.8
362
-5.5
12.5
310
-1.0
12.2
20.7
77.0
1.5
6,718.2
-12.4
22.5
-10.9
31.8
24
Key Figures (US$Mn)
Assets
Equity
Deposits
Mkt Share (%)
Loans
Mkt Share (%)
PDLs/Loans (%)
Reserves/PDLs (%)
NET INCOME
Losses at Credicorp
CONTRIBUTION
12M02 12M03
265
294
29
29
142
183
0.7
0.8
205
226
1.5
1.5
4.3
1.1
69.5
238.2
-4.4
0.1
-12.8
-5.6
-17.2
-5.5
Growth %
10.9
0.0
28.9
10.2
102.3
56.3
68.0
25
Key Figures (US$Mn)
Assets
Equity
Investments
Premiums
General Insurance
Health Insurance
Life Insurance
Mkt Share (%)
Net Loss Ratio (%)
Combined Ratio* (%)
CONTRIBUTION
* (Net
12M02
417
99
245
253
158
26
70
32.2
68.8
96.3
7.0
12M03 Growth %
511
22.5
109
10.1
327
33.5
289
14.3
166
5.4
24
-7.1
99
42.3
30.2
67.4
100.0
3.3
-52.9
claims + general expenses and commissions) / Net premiums
26

Property & Casualty business lines will continue growing following the
performance of the economy and experiencing reduced margins as a
result of increased competition

Life Insurance had 42% of growth during 2003. Growth should continue at
high rates during 2004.

Acquisition of NovaSalud EPS cost US$6.5Mn. It will consolidate the
Health Insurance System. This acquisition will increase premiums to
about US$76Mn annually. Merger cost estimated at US$0.9Mn

Health Insurance business should have attractive growth opportunities in
the future to the extent that the government foresees a larger role for the
private system.

During 2003 the contribution of PPS to Credicorp was lower than that of
previous years. The reduction is primarily explained by adjustments for
minority interests and reserves related to previous years which had not
been registered in Credicorp’s books amounting to US$ 5.0 Mn.
27
Credicorp Overview Year 2003
1. Banco de Crédito BCP



Continued pressure on financial margin due to increased corporate
funding in local capital market and higher competition in retail
segment
Strong recovery of written-off loans contributed significantly to the
growth in Non Interest Income.
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

Break even since 2H2003

Loan portfolio clean-up concluded

Focus on restructure following BCP´s business model
3. Atlantic Security Bank

Improved results in the investment portfolio changing from US$7MM
loss to US$11 MM in non- realized gains

Reduction of risk profile of investment portfolio. Investment grade 10%
in 2001, 37% in 2003

Growth in administered funds due to increased focus on wealth
management
28
Credicorp Overview Year 2003
4. Pacífico Peruano Suiza
 Results benefitted from lower claims and growth in premiums
 Increased competition and higher reinsurance costs in property and
casualty

Attractive growth opportunities in life insurance with short-term
increase on reserves
5. Banco Tequendama

Search for alternatives to provide viability for its business

Focus on personal loans, consumer and small businesses with an
increase from 13% to 26% of portfolio.
29
Credicorp Outlook Year 2004
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
30
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 forwardlooking 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.
31
MERRYL LYNCH ROUNDTABLE
Lima, March 2004
Walter Bayly
Chief Financial Officer
Banco de Credito del Peru