simonmayer The worst looks to be over for Peruvian financial conglomerate Credicorp (NYSE:BAP) after some big external shocks in 2023 - recall the political unrest early in the year (from the coup against former President Castillo) and weather-related headwinds in the back half. After a torrid few months, Q4 numbers finally saw some resilience, with the updated guidance (both qualitative and quantitative) also pointing to a much better year ahead. Management's near-term targets aren’t all that demanding ...

Investors with an interest in Banks - Foreign stocks have likely encountered both Credicorp (BAP) and Royal Bank (RY) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision tre ...

Investors with an interest in Banks - Foreign stocks have likely encountered both Credicorp (BAP) and Royal Bank (RY) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and ...

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

IT Environment and Financial Reporting - The Group's IT environment is critical for processing operations, accounting records, and preparing consolidated financial statements, with a focus on ensuring completeness and accuracy of accounting records to mitigate fraud or error risks[8] - The Group's financial reporting process is overseen by those responsible for corporate governance, with significant findings and internal control deficiencies communicated during the audit[15] - The Group's consolidated financial statements for 2023 were approved on February 29, 2024, and will be presented for final approval at the Annual General Meeting of Shareholders[36] - The consolidated financial statements are prepared in accordance with IFRS and presented in Soles (S/), with values rounded to thousands of soles[40] - The Group's consolidated financial statements include assets, liabilities, income, and expenses of Credicorp and its subsidiaries, with intra-group transactions eliminated[51] Expected Credit Loss Model and Loan Portfolio - The Group's expected credit loss model for loan portfolios is based on probability of default (PD), loss given default (LGD), and exposure at default (EAD), considering macroeconomic effects and forward-looking forecasts[9] - Significant assumptions in the expected credit loss model include debtor payment behavior, internal rating models, fair value of guarantees, and forward-looking economic scenarios[9] - The Group's loan portfolio provision for credit losses is a key audit matter due to the complexity of models, assumptions, and judgments, which could materially affect the provision calculation[10] - The Group applies a three-stage expected credit loss model for financial assets at amortized cost, debt instruments at fair value through other comprehensive income, and indirect loans[107] - Expected credit loss is calculated using probability of default (PD), loss given default (LGD), and exposure at default (EAD), considering macroeconomic effects[108] - Phase 1 financial assets recognize a reserve for losses equivalent to 12-month expected credit losses, while Phase 2 and Phase 3 cover the remaining life of the asset[107] - A significant increase in credit risk is defined as more than 30 days late, or a 50% increase in PD compared to origination date[110] - The Group uses three macroeconomic scenarios (base, optimistic, pessimistic) to estimate expected credit losses, with a three-year projection period[110] Insurance Contracts and Liabilities - The Group's life insurance contract liabilities are estimated using actuarial methods under IFRS 17, including discount rates, risk adjustments, and contractual service margins (CSM)[11] - Insurance liabilities are a key audit matter due to potential material effects from changes in assumptions and data, requiring complex actuarial models and specialist involvement[12] - The Group re-evaluates the Contractual Service Margin (CSM) each period based on experience and updates parameters to reflect changes in assumptions, including mortality, longevity, disability, expenses, and falls[12] - The Group's consolidated financial statements for 2022 were restated due to the initial implementation of IFRS 17, Insurance Contracts, with adjustments related to the retroactive effect of the implementation[13] - The Group adopted IFRS 17 "Insurance Contracts" starting January 1, 2023, which significantly impacts the recognition and measurement of insurance contracts[44] - The Group restated its 2022 financial statements under IFRS 17, resulting in a decrease in equity of S/210.8 million as of January 1, 2022, and an increase in equity of S/15.5 million as of December 31, 2022[51] - The Group uses the fair value transition methodology for insurance contracts, with a discount rate determined using the bottom-up approach[49] - The Group's insurance contracts are grouped and measured based on product portfolio, currency, cost, and year of issue[46] - The Group's insurance service result and underwriting result are presented separately in the income statement under IFRS 17[47] - The Group measures insurance contracts using the general model, which includes fulfillment cash flows, a risk adjustment for non-financial risk, and the contractual service margin (CSM)[79] - For insurance contracts with a duration of one year or less, the Group applies the Premium Allocation Approach (PAA) under the simplified model[79] - The Group recognizes income or expenses for variations in the book value of the Liability for Remaining Coverage (LRC) and the liability for claims incurred[81] - Changes in compliance cash flows related to future service, such as adjustments for claims experience and operating assumptions, are recorded against the CSM[81] - The Group recognizes a loss in the period's results for net outflows from onerous contract groups, with the loss component released based on systematic allocation of subsequent changes[83] Financial Performance and Key Metrics - Total assets increased to S/238,840,188,000 in 2023 from S/235,414,157,000 in 2022, reflecting a growth of 1.5%[18] - Net interest income rose to S/12,937,972,000 in 2023, up 16.6% from S/11,091,618,000 in 2022[19] - Provision for credit losses on loan portfolio, net of recoveries, increased to S/3,622,345,000 in 2023, up 99.9% from S/1,811,538,000 in 2022[19] - Net result after income tax grew to S/4,959,878,000 in 2023, a 4.2% increase from S/4,760,110,000 in 2022[21] - Equity attributable to Credicorp's equity holders increased to S/32,460,004,000 in 2023, up 11.9% from S/29,003,644,000 in 2022[18] - Total other income reached S/5,655,825,000 in 2023, a 11.6% increase from S/5,066,096,000 in 2022[19] - Net basic earnings per share attributable to Credicorp's equity holders rose to S/61.22 in 2023, up 4.8% from S/58.44 in 2022[20] - Loans decreased to S/144,976,051,000 in 2023, down 2.5% from S/148,626,374,000 in 2022[18] - Total liabilities remained stable at S/205,733,123,000 in 2023, a slight decrease from S/205,818,944,000 in 2022[18] - Technical result of insurance improved to S/1,211,100,000 in 2023, up 43.9% from S/841,448,000 in 2022[19] - Net profit for 2023 increased to S/4,959,878,000, up 4.2% from S/4,760,110,000 in 2022[23] - Total comprehensive income for 2023 reached S/5,541,476,000, a 36% increase from S/4,074,794,000 in 2022[23] - Net gain on investments at fair value through other comprehensive income was S/1,334,943,000 in 2023, compared to a loss of S/1,614,053,000 in 2022[23] - Exchange differences on translation of foreign operations resulted in a gain of S/73,464,000 in 2023, reversing a loss of S/302,083,000 in 2022[23] - Net movement in hedges of net investments in foreign businesses showed a gain of S/18,950,000 in 2023, compared to a gain of S/39,587,000 in 2022[23] - Total other comprehensive income for 2023 was S/581,598,000, a significant improvement from a loss of S/685,316,000 in 2022[23] - Credicorp's equity holders' share of total comprehensive income was S/5,437,495,000 in 2023, up 37% from S/3,967,497,000 in 2022[23] - Non-controlling interest in total comprehensive income was S/103,981,000 in 2023, slightly down from S/107,297,000 in 2022[23] - Net profit for the year 2021 was $3,584,582,000[26] - Total comprehensive income for 2021 was $1,954,586,000[26] - Dividend distribution in 2021 amounted to $346,994,000[26] - Net profit for the year 2022 increased to $4,647,818,000[26] - Total comprehensive income for 2022 was $3,967,497,000[26] - Dividend distribution in 2022 was $2,354,859,000[26] - Dividends paid to noncontrolling interest of subsidiaries in 2022 totaled $48,577,000[26] - Purchase of treasury stock in 2022 amounted to $83,605,000[26] - Share-based payment transactions in 2022 totaled $59,834,000[26] - Total equity as of December 31, 2022, was $29,595,213,000[26] - Net profit for the year 2023 increased to S/4,959,878,000, up from S/4,760,110,000 in 2022[30] - Provision for credit losses on loan portfolio rose to S/3,957,143,000 in 2023, compared to S/2,158,555,000 in 2022[30] - Total comprehensive income for 2023 reached S/5,541,476,000, including net profit and other comprehensive income[27] - Retained earnings as of December 31, 2023, stood at S/4,572,444,000, up from S/4,277,159,000 in 2022[27] - Dividends paid to noncontrolling interests of subsidiaries amounted to S/62,051,000 in 2023[27] - Depreciation and amortization expenses for 2023 totaled S/511,174,000, slightly higher than S/485,207,000 in 2022[30] - Net gain on securities in 2023 was S/425,144,000, a significant increase from S/5,468,000 in 2022[30] - Investments at fair value through other comprehensive income decreased by S/5,164,701,000 in 2023[30] - Total equity as of December 31, 2023, was S/33,107,065,000, up from S/29,595,213,000 in 2022[27] - Net cash flow from operating activities in 2023 was S/4,079,719, a significant increase from S/(1,151,422) in 2022[31] - Net cash flows from investing activities in 2023 were S/(1,255,064), compared to S/(1,094,965) in 2022[31] - Dividends paid in 2023 amounted to S/1,994,037, up from S/1,196,422 in 2022[31] - Cash and cash equivalents at the end of 2023 were S/33,920,614, down from S/34,120,962 at the end of 2022[33] - Interest received in 2023 was S/18,658,791, compared to S/14,717,523 in 2022[33] - Subordinated bonds as of December 31, 2023, were S/5,680,120, down from S/5,738,414 at the beginning of the year[35] - Lease liabilities as of December 31, 2023, were S/512,579, down from S/578,074 at the beginning of the year[35] - The Group rescheduled retail loans totaling S/692.6 million as of December 31, 2023, up from S/116.9 million in 2022[38] - The Group did not carry out significant acquisitions, incorporations, or mergers in 2023 and 2022[38] Financial Assets and Liabilities - The Group classifies financial assets into categories based on business model and contractual cash flow characteristics, including fair value through profit or loss, fair value through other comprehensive income, and amortized cost[93] - Financial assets at amortized cost are valued using the effective interest rate method, with interest income included in "Interest and similar income"[95] - Investments in debt instruments at fair value through other comprehensive income are measured at fair value, with unrealized gains/losses recorded in comprehensive income until sold[97] - Equity instruments designated at fair value through other comprehensive income are measured at fair value, with gains/losses recorded in comprehensive income and transferred to retained earnings upon sale[99] - Financial assets at fair value through profit or loss include debt instruments, equity instruments for trading, and derivatives, with changes recorded in "Net gain on securities"[99] - Financial liabilities are classified as measured at amortized cost, except for those at fair value through profit or loss, which include derivatives measured at fair value[102] - The Group uses the expected loss approach for impairment of financial assets, with losses recognized in the income statement for investments and credit loss provisions for loans[97] - Financial assets are reclassified only when the business model changes, with gains/losses recognized in profit or loss or other comprehensive income depending on the reclassification[90] - The Group uses the Matching Adjustment methodology to determine discount rates for insurance contracts, adding a spread to the risk-free rate based on asset-liability IRR differences[88] - Insurance contract liabilities are measured using discount rates reflecting the time value of money, with separate rates for market valuation and locked-in rates[86] - The Group reassesses the Contractual Service Margin (CSM) each period, adjusting for experience and evaluating hypotheses like mortality, longevity, and disability[86] Investments and Securities - Total investments at fair value through other comprehensive income increased to S/37,043.9 million in 2023 from S/30,786.2 million in 2022, reflecting growth in corporate bonds and equity instruments[166] - Corporate bonds accounted for S/13,176.8 million in 2023, with unrealized profits of S/177.4 million, compared to S/12,780.7 million in 2022[166] - Government bonds and securitization instruments increased to S/10,364.9 million and S/677.9 million respectively in 2023, up from S/8,528.7 million and S/666.9 million in 2022[166] - Equity instruments designated at initial recognition grew to S/36,235.6 million in 2023, with unrealized profits of S/399.2 million, compared to S/30,052.9 million in 2022[166] - The company's investment funds in Peru, the USA, Colombia, and other countries represented 54.3%, 28.1%, 10.0%, and 7.6% respectively in 2023, showing a shift from 2022 allocations[161] - Mutual funds from Luxembourg, Bolivia, Ireland, and other countries accounted for 52.0%, 35.5%, 6.7%, and 5.8% of the total in 2023, with Luxembourg's share decreasing from 64.2% in 2022[161] - The company held 520 certificates of deposit worth US$51.9 million (S/192.7 million) as of December 31, 2023, accruing interest at an effective annual rate of 5.68%[163] - Repurchase agreements for government bonds and BCRP certificates of deposit reached an estimated fair value of S/4,269.9 million in 2023, up from S/1,108.1 million in 2022[169] - The Group entered into IRS agreements for a nominal amount of S/778.9 million in 2023, down from S/926.5 million in 2022, to hedge fixed-rate bonds in US dollars[169] - Corporate bonds issued by companies in the United States of America, Peru, Colombia, and other countries represent 40.2%, 34.2%, 4.3%, and 21.3% of the total as of December 31, 2023, compared to 39.2%, 37.4%, 4.4%, and 19.0% respectively as of December 31, 2022[171] - The Group maintains Cross Currency Swaps (CCS) for nominal amounts of S/126.6 million as of December 31, 2023, down from S/131.4 million as of December 31, 2022[171] - The Group holds 111,613 BCRP certificates of deposit as of December 31, 2023, up from 70,253 as of December 31, 2022[171] - Peruvian Government Bonds increased to S/8,260,261 thousand in 2023 from S/6,126,564 thousand in 2022, while United States Government Bonds decreased to S/1,740,125 thousand from S/2,103,713 thousand[172] - The balance of securitization instruments increased to S/677,885 thousand in 2023 from S/666,924 thousand in 2022, with Inmuebles Panamericana S.A. contributing S/153,034 thousand[174] - The balance of certificates in other currencies decreased to S/462.6 million in 2023 from S/573.2 million in 2022[174] - Peruvian Government Bonds at amortized cost decreased to S/9,323,970 thousand in 2023 from S/9,573,026 thousand in 2022, with a fair value of S/8,860,624 thousand[176] - The expected loss of investments at amortized cost decreased to S/2.3 million in 2023 from S/3.9 million in 2022[176] Loans and Credit Portfolio - Direct loans decreased to S/137,350,087 thousand in 2023 from S/141,244,490 thousand in 2022, with credit cards increasing to S/7,112,268 thousand from S/6,187,910 thousand[181] - The gross credit balance decreased to S/163,947,270 thousand in 2023 from S/168,818,002 thousand in 2022, with direct loans accounting for S/143,483,254 thousand[184] - Commercial loans balance as of December 31, 2023, decreased to S/83,928,787 from S/86,190,457 in 2022, a decline of 2.6%[185] - Residential mortgage loans balance increased to S/19,150,069 in 2023 from S/18,640,432 in 202

Credicorp Ltd. 4Q23 and FY23 Earnings Release [Operating and Financial Highlights](index=3&type=section&id=Operating%20and%20Financial%20Highlights) Credicorp maintained resilient profitability in 4Q23 and FY23, with a 15.8% FY23 ROE, despite a S/250 million El Niño provision, while Yape achieved strong user growth and is on track for 2024 breakeven 4Q23 and FY23 Key Financial Metrics | Metric | 4Q23 | FY23 | 3Q23 | 4Q22 | FY22 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Income (Attributable, S/ millions)** | 841.8 | 4,866 | 1,238.2 | 1,010.2 | 4,648 | | **Return on Equity (ROE)** | 10.6% | 15.8% | 16.2% | 14.4% | 16.8% | | **Net Interest Margin (NIM)** | 6.21% | 6.01% | 6.11% | 5.75% | 5.09% | | **Risk-Adjusted NIM** | 4.10% | 4.38% | 4.45% | 4.45% | 4.29% | | **Structural NPL Ratio** | 5.6% | - | 5.53% (implied) | - | - | | **Structural NPL Coverage** | 102.4% | - | - | - | - | | **Cost of Risk** | 3.2% | 2.5% | 2.5% | 2.0% | 1.2% | - A significant provision of approximately **S/250 million** was set aside for the El Niño Phenomenon (FEN) in 4Q23, impacting profitability metrics for the quarter[5](index=5&type=chunk)[8](index=8&type=chunk) - Yape, the company's digital wallet, reached **11 million monthly active users (MAU)** with revenue per MAU increasing by **34.5% QoQ**. It is expected to achieve cashflow break-even in **2024**[10](index=10&type=chunk) - Capital adequacy remains strong, with BCP's IFRS CET1 Ratio at **13.2%** and Mibanco's at **18.4%**, both exceeding their internal targets of **11%** and **15%** respectively[10](index=10&type=chunk) [Senior Management Quotes](index=5&type=section&id=Senior%20Management%20Quotes) Senior management expressed confidence in Credicorp's resilience, highlighting portfolio diversity, digital capabilities, and prudent risk management, while anticipating improved macroeconomic conditions and Yape's 2024 breakeven - **CEO's Outlook:** Anticipates improved macroeconomic conditions in **2024**, driven by a waning El Niño, lower interest rates, and controlled inflation. Yape is expected to reach breakeven in **2024**[12](index=12&type=chunk) - **CFO's Performance Summary:** Acknowledged that 4Q23 results were impacted by provisions for El Niño and a goodwill impairment for Mibanco Colombia. However, favorable balance sheet dynamics led to a higher NIM, driven by retail loan growth and an increase in low-cost deposits[13](index=13&type=chunk) [Summary of Financial Performance and Outlook](index=7&type=section&id=Summary%20of%20Financial%20Performance%20and%20Outlook) Credicorp's FY23 net income grew 4.7% to S/4,866 million with a 15.8% ROE, driven by Universal Banking and Insurance, and projects a 17.0% ROE for 2024 - **2024 Outlook:** Credicorp expects to close **2024** with an ROE of around **17.0%**, driven by a resilient NIM, a reduction in the cost of risk, and economic reactivation boosting loan and fee growth[39](index=39&type=chunk) 4Q23 Net Income Contribution by Subsidiary (S/ millions) | Subsidiary | Net Income Contribution | ROE | | :--- | :--- | :--- | | BCP (stand-alone) | 811.4 | 17.9% | | Grupo Pacifico | 134.5 | 43.8% (ex-goodwill) | | Mibanco | 52.7 | 7.3% | | Credicorp Capital | 28.0 | 14.0% | | Prima AFP | 40.4 | 33.7% | | BCP Bolivia | 19.7 | 8.8% | | ASB Bank Corp | 21.6 | 11.9% | | Mibanco Colombia | (64.1) | - | | Others & Eliminations | (282.5) | - | - **Segment Performance FY23:** - **Universal Banking (BCP):** Increased profitability driven by higher Net Interest Income - **Microfinance (Mibanco):** Decreased profitability due to a substantial increase in provisions - **Insurance (Grupo Pacífico):** Extraordinarily high results due to positive dynamics in the Life business - **Investment Management & Advisory:** Benefitted from improved market performance and cost control[34](index=34&type=chunk)[36](index=36&type=chunk)[38](index=38&type=chunk) Financial Overview [Credicorp Ltd. Financials](index=12&type=section&id=Credicorp%20Ltd%2E%20Financials) Credicorp's 4Q23 net income was S/841.8 million (10.6% ROE), while FY23 net income grew 4.7% to S/4,865.5 million (15.8% ROE), with improved efficiency Credicorp Ltd. Financial Summary (S/ thousands) | Metric | 4Q23 | 3Q23 | 4Q22 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net interest income (S/ thousands)** | 3,347,684 | 3,254,043 | 3,140,404 | 12,937,972 | 11,091,618 | | **Net profit attributable (S/ thousands)** | 841,827 | 1,238,173 | 1,010,155 | 4,865,540 | 4,647,818 | | **Total loans (S/ thousands)** | 144,976,051 | 145,129,260 | 148,626,374 | 144,976,051 | 148,626,374 | | **Total deposits (S/ thousands)** | 147,704,994 | 148,471,535 | 147,020,787 | 147,704,994 | 147,020,787 | | **Net equity (S/ thousands)** | 32,460,004 | 31,267,592 | 29,003,644 | 32,460,004 | 29,003,644 | | **ROE** | 10.6% | 16.2% | 14.4% | 15.8% | 16.8% | | **NPL ratio** | 5.9% | 6.0% | 5.4% | 5.9% | 5.4% | | **Cost of risk** | 3.2% | 2.5% | 2.0% | 2.5% | 1.2% | | **Efficiency ratio** | 49.0% | 46.3% | 49.5% | 46.1% | 47.5% | Credicorp's Strategy Update [Disruptive Initiatives: Yape](index=14&type=section&id=Disruptive%20Initiatives%3A%20Yape) Yape achieved significant user and transaction growth in 2023, reaching 10.7 million MAU and over 1 billion transactions, and is on track for 2024 breakeven Yape Key Performance Indicators | Metric | 4Q23 | 3Q23 | 4Q22 | | :--- | :--- | :--- | :--- | | **Users (millions)** | 14.2 | 13.4 | 11.9 | | **Monthly Active Users (MAU, millions)** | 10.7 | 9.8 | 7.9 | | **Fee Income Generating MAU (millions)** | 7.9 | 6.5 | 3.4 | | ** Monthly Transactions (millions)** | 378.3 | 285.8 | 162.5 | | **TPV (S/ millions)** | 137.8 | 90.7 | 66.2 | | **Monthly Revenues / MAU (S/)** | 3.9 | 2.9 | 1.8 | | **Microloans Disbursements (thousands)** | 290.5 | 219.8 | 105.7 | - Yape is on a clear path to profitability, with a target to reach breakeven in **2024**. At the end of 2023, **73%** of active users were engaged in transactions that generate income for Yape[43](index=43&type=chunk) [Integrating Sustainability in Our Businesses](index=16&type=section&id=Integrating%20Sustainability%20in%20Our%20Businesses) Credicorp advanced its sustainability program in 4Q23, publishing its first TCFD report, significantly increasing green financing to US$585.8 million, and expanding financial inclusion - **Environmental:** Published its first TCFD report. BCP approved 59 green transactions for **US$585.8 million** by 4Q23, nearly doubling the amount from 3Q23[45](index=45&type=chunk) - **Social:** Expanded financial inclusion, reaching **4.1 million** people through BCP since 2020. Extensive financial education programs were conducted, training over **614,000** people through BCP's online courses and over **272,000** clients through Mibanco's digital guidance program in 2023[46](index=46&type=chunk)[47](index=47&type=chunk) Analysis of 4Q23 Consolidated Results [Loans and Portfolio Quality](index=17&type=section&id=01%20Loans%20and%20Portfolio%20Quality) Structural loans grew 0.4% QoQ in 4Q23, driven by BCP Retail Banking, while the structural NPL ratio increased to 5.6% due to portfolio deterioration Structural Loans Growth (Average Daily Balances, S/ millions) | Metric | Dec 23 | Sep 23 | Dec 22 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Structural Loans** | 138,348 | 137,745 | 137,934 | +0.4% | +0.3% | | BCP Stand-alone | 112,644 | 111,857 | 112,566 | +0.7% | +0.1% | | Mibanco | 13,102 | 13,642 | 13,121 | -4.0% | -0.1% | Structural Portfolio Quality (Quarter-end Balance) | Metric | 4Q23 | 3Q23 | 4Q22 | | :--- | :--- | :--- | :--- | | **Structural NPLs (S/ thousands)** | 7,966,571 | 7,832,083 | 6,889,993 | | **Structural NPL Ratio** | 5.6% | 5.6% | 5.0% | | **Structural NPL Coverage Ratio** | 102.4% | 101.4% | 112.2% | - Loan growth was led by BCP's Retail Banking, particularly SME-Pyme and Mortgages. This was offset by contractions in Corporate Banking due to low private investment and at Mibanco due to tighter credit policies[49](index=49&type=chunk)[51](index=51&type=chunk) - The increase in the Structural NPL ratio was driven by deterioration in older SME-Pyme vintages, consumer/credit card loans overdue more than 120 days, and high-ticket loans at Mibanco[56](index=56&type=chunk)[59](index=59&type=chunk) [Deposits](index=24&type=section&id=02%20Deposits) Credicorp's total deposits decreased slightly by 0.5% QoQ to S/147.7 billion, with a favorable shift to low-cost deposits, which now comprise 68.1% of the total base Deposit Composition (S/ thousands) | Deposit Type | Dec 23 | Sep 23 | Dec 22 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Deposits (S/ thousands)** | 147,704,994 | 148,471,535 | 147,020,787 | -0.5% | +0.5% | | Demand deposits (S/ thousands) | 48,229,322 | 45,120,127 | 48,467,247 | +6.9% | -0.5% | | Saving deposits (S/ thousands) | 52,375,813 | 49,395,543 | 54,769,045 | +6.0% | -4.4% | | Time deposits (S/ thousands) | 42,484,664 | 49,213,763 | 38,897,010 | -13.7% | +9.2% | - There was a notable shift from higher-cost Time Deposits to lower-cost Demand and Savings deposits during 4Q23, improving the funding mix[66](index=66&type=chunk) - Low-cost deposits (Demand + Savings) recovered to represent **68.1%** of the total deposit base, up **445 bps QoQ**. Credicorp leads the Peruvian market with a **41.6%** share in this category[68](index=68&type=chunk)[84](index=84&type=chunk) [Interest Earning Assets and Funding](index=27&type=section&id=03%20Interest%20Earning%20Assets%20and%20Funding) Interest Earning Assets grew 0.7% QoQ to S/224.3 billion, driven by investments, while total funding decreased 0.5% QoQ to S/184.7 billion due to reduced BCRP instruments IEA and Funding Composition (S/ thousands) | Category | Dec 23 | Sep 23 | QoQ Change | | :--- | :--- | :--- | :--- | | **Total Interest Earning Assets (S/ thousands)** | 224,336,482 | 222,667,631 | +0.7% | | - Total investments (S/ thousands) | 52,215,528 | 51,116,913 | +2.1% | | - Total loans (S/ thousands) | 144,976,051 | 145,129,260 | -0.1% | | **Total Funding (S/ thousands)** | 184,746,887 | 185,617,598 | -0.5% | | - Deposits and obligations (S/ thousands) | 147,704,994 | 148,471,535 | -0.5% | | - BCRP instruments (S/ thousands) | 7,461,674 | 9,616,150 | -22.4% | | - Due to banks and correspondents (S/ thousands) | 12,278,681 | 10,493,411 | +17.0% | [Net Interest Income (NII)](index=28&type=section&id=04%20Net%20Interest%20Income%20%28NII%29) Net Interest Income rose 2.9% QoQ to S/3,348 million, expanding NIM to 6.21%, but Risk-Adjusted NIM fell to 4.10% due to El Niño provisions NII and Margin Performance | Metric | 4Q23 | 3Q23 | 4Q22 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Interest Income (S/ thousands)** | 3,347,684 | 3,254,043 | 3,140,404 | 12,937,972 | 11,091,618 | | **Net Interest Margin (NIM)** | 6.21% | 6.11% | 5.75% | 6.01% | 5.09% | | **Risk-Adjusted NIM** | 4.10% | 4.45% | 4.45% | 4.38% | 4.29% | | **Cost of Funds** | 3.03% | 3.15% | 2.35% | 2.91% | 1.83% | - The QoQ increase in NIM was driven by a stable yield on interest-earning assets (**8.72%**) while the cost of funding fell by **12 bps** to **3.03%**, thanks to a recovery in low-cost deposits[90](index=90&type=chunk)[92](index=92&type=chunk) - Risk-adjusted NIM dropped significantly QoQ to **4.10%**, with provisions for the El Niño Phenomenon (FEN) accounting for a **45 bps** negative impact[92](index=92&type=chunk) [Provisions](index=32&type=section&id=05%20Provisions) Provisions for loan losses significantly increased in 4Q23, primarily due to a S/250 million charge for El Niño, raising the Cost of Risk to 3.2% for the quarter - A key driver for the quarter's provisions was an additional charge of approximately **S/250 million** for expected losses from the El Niño Phenomenon (FEN)[97](index=97&type=chunk)[98](index=98&type=chunk) Provisions and Cost of Risk (CoR) | Metric | 4Q23 | 3Q23 | 4Q22 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Provision for credit losses, net (S/ thousands)** | (1,173,454) | (917,642) | (730,681) | (3,622,345) | (1,811,538) | | **Cost of Risk (Total Portfolio)** | 3.2% | 2.5% | 2.0% | 2.5% | 1.2% | | **Structural Cost of Risk** | 3.3% | 2.6% | 2.1% | 2.5% | 1.3% | - Excluding the FEN impact, the QoQ rise in provisions was driven by a base effect in Wholesale Banking and deterioration in SME-Pyme, partially offset by reversals in Mortgages and lower provisions at Mibanco[98](index=98&type=chunk) [Other Income](index=34&type=section&id=06%20Other%20Income) Other Core Income rose 2.1% QoQ, driven by FX gains and fees, while Other Non-Core Income grew 29.6% QoQ due to higher net gains on securities Other Income Breakdown (S/ thousands) | Category | 4Q23 | 3Q23 | 4Q22 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Other Core Income (S/ thousands)** | 1,204,220 | 1,184,575 | 1,188,510 | +1.7% | +1.3% | | - Fee income (S/ thousands) | 986,173 | 975,955 | 895,295 | +1.0% | +10.2% | | - Net gain on FX (S/ thousands) | 218,047 | 208,620 | 293,215 | +4.5% | -25.6% | | **Total Other Non-Core Income (S/ thousands)** | 282,603 | 218,028 | 139,352 | +29.6% | +102.8% | | - Net gain on securities (S/ thousands) | 115,825 | 53,591 | 77,513 | +116.1% | +49.4% | - BCP Bolivia's adjusted fee structure for foreign transfers significantly impacted fee income and FX gains. Excluding this, core income still grew **2.1% QoQ**[107](index=107&type=chunk) [Insurance Underwriting Results](index=37&type=section&id=07%20Insurance%20Underwriting%20Results) Insurance Underwriting Result fell 13.2% QoQ to S/287.3 million due to higher claims in P&C and Life, despite a 43.9% full-year increase Insurance Underwriting Result by Segment (S/ millions) | Segment | 4Q23 | 3Q23 | 4Q22 | QoQ Change | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Underwriting Result** | 287.3 | 330.9 | 136.8 | -13.2% | +110.0% | | P&C | 49.3 | 84.2 | 62.4 | -41.4% | -20.9% | | Life | 215.2 | 226.6 | 61.1 | -5.0% | +252.3% | | Crediseguros | 16.5 | 15.0 | 11.4 | +10.2% | +44.9% | - **P&C Insurance:** The QoQ decline was caused by a **26.4%** increase in expenses for insurance services, stemming from higher claims in P&C Risks and Medical Assistance[117](index=117&type=chunk) - **Life Insurance:** The full-year result grew **75.0% YTD**, driven by higher income from D&S (Disability & Survivorship) and Credit Life, coupled with lower claims compared to COVID-19 affected periods[118](index=118&type=chunk) [Operating Expenses](index=39&type=section&id=08%20Operating%20Expenses) Operating expenses grew 9.8% in FY23 to S/8,781 million, primarily driven by disruptive initiatives and BCP's core business, with a 5.6% growth excluding disruption - Operating expenses rose **9.8% YTD**. Growth was driven by disruptive initiatives (**47.2%** of total growth) and BCP's core business (**35.4%** of total growth)[123](index=123&type=chunk) - Expenses for disruptive initiatives (Yape, Tenpo, etc.) grew **66.6% YTD**, representing **10.6%** of total expenses in 2023[123](index=123&type=chunk) - Excluding expenses for disruption, YTD growth in operating expenses was **5.6%**[120](index=120&type=chunk)[121](index=121&type=chunk) [Operating Efficiency](index=41&type=section&id=09%20Operating%20Efficiency) Credicorp's efficiency ratio improved by 142 basis points to 46.1% in 2023, driven by operating income growth outpacing expense growth, primarily at BCP Efficiency Ratio by Subsidiary (YTD) | Subsidiary | 2023 | 2022 | Change (bps) | | :--- | :--- | :--- | :--- | | **Credicorp** | **46.1%** | **47.5%** | **-142** | | BCP | 38.8% | 40.7% | -190 | | Mibanco Perú | 52.7% | 51.3% | +140 | | Pacífico | 26.5% | 34.3% | -780 | - The efficiency ratio improved to **46.1%** in 2023 from **47.5%** in 2022. This was due to operating income growing faster than operating expenses[30](index=30&type=chunk)[125](index=125&type=chunk) [Regulatory Capital](index=42&type=section&id=10%20Regulatory%20Capital) Credicorp maintained a strong capital position in 4Q23, with BCP's CET1 ratio at 13.20% and Mibanco's at 18.37%, both exceeding internal targets IFRS CET1 Capital Ratios (4Q23) | Entity | IFRS CET1 Ratio | Internal Target | | :--- | :--- | :--- | | BCP Stand-alone | 13.20% | 11.0% | | Mibanco | 18.37% | 15.0% | - BCP's Global Capital ratio was **17.46%**, well above the regulatory minimum of **12.59%**[129](index=129&type=chunk) - Mibanco's Global Capital ratio was **20.56%**, significantly higher than the regulatory minimum of **12.81%**[131](index=131&type=chunk) [Economic Outlook](index=44&type=section&id=11%20Economic%20Outlook) Peru's economy contracted 0.5% in 2023 but is projected to rebound with 2.5% GDP growth in 2024, as inflation decelerates and the BCRP eases rates Peru: Economic Forecast | Indicator | 2022 | 2023 (e) | 2024 (f) | | :--- | :--- | :--- | :--- | | **Real GDP (% change)** | 2.7% | (0.5)% | 2.5% | | **Inflation, end of period** | 8.5% | 3.2% | 2.2% | | **Reference Rate, end of period** | 7.5% | 6.8% | 4.8% | | **Exchange rate, end of period** | 3.8 | 3.7 | 3.8 | | **Fiscal balance (% GDP)** | (1.6)% | (2.8)% | (2.5)% | - GDP fell **0.5%** in 2023, the worst performance since **1998** (excluding the pandemic), but is forecast to rebound to **2.5%** growth in 2024[137](index=137&type=chunk)[133](index=133&type=chunk) - Inflation slowed significantly from **8.5%** at end-2022 to **3.2%** at end-2023. The BCRP began a rate-cutting cycle, reducing the policy rate by a cumulative **75 bps** in 4Q23[140](index=140&type=chunk) Appendix [Implementation of IFRS 17](index=50&type=section&id=12%2E1%2E%20Implementation%20of%20IFRS%2017) IFRS 17 implementation, effective January 2023, standardizes insurance accounting, reclassifying P&L items and requiring restatement of 2022 figures for comparability - IFRS 17 was implemented to standardize accounting for insurance contracts, improving transparency and comparability. The impact on Credicorp's net income is **not material**[5](index=5&type=chunk)[150](index=150&type=chunk) - The new standard required the reformulation of key financial indicators, including Net Interest Margin (NIM), Funding Cost, and the Efficiency Ratio, to properly segregate insurance-related financial components. **2022** figures were restated for comparability[157](index=157&type=chunk)[161](index=161&type=chunk)[164](index=164&type=chunk) [Loan Portfolio Quality Details](index=55&type=section&id=12%2E3%2E%20Loan%20Portfolio%20Quality) This section provides detailed tables on loan portfolio quality, including Government Program loans with a 15.74% IOL ratio and 21.1% coverage, supporting the main analysis Government Program (GP) Loan Portfolio Quality (4Q23) | Metric | 4Q23 | 3Q23 | | :--- | :--- | :--- | | **GP Total loans (S/ thousands)** | 3,595,503 | 4,179,770 | | **GP IOL ratio** | 15.74% | 19.79% | | **GP Coverage ratio of IOLs** | 21.1% | 13.8% | - This section provides granular, supplementary data tables on loan portfolio quality, including breakdowns by business segment, currency, and for government programs, supporting the analysis in the main report[168](index=168&type=chunk) [Regulatory Capital Details](index=61&type=section&id=12%2E5%2E%20Regulatory%20Capital) This section provides detailed calculations and breakdowns of regulatory capital for Credicorp, BCP, and Mibanco, including Tier 1, Tier 2, and RWAs - Provides detailed tables breaking down the calculation of regulatory capital, risk-weighted assets, and capital adequacy ratios for Credicorp, BCP, and Mibanco, supporting the main capital analysis[187](index=187&type=chunk)[190](index=190&type=chunk)[193](index=193&type=chunk) [Financial Statements and Ratios by Business](index=65&type=section&id=12%2E6%2E%20Financial%20Statements%20and%20Ratios%20by%20Business) This section provides comprehensive financial statements and key indicators for Credicorp's main business segments, enabling deep-dive analysis of each subsidiary's performance - This appendix contains full financial statements and key performance indicators for each major business unit, including BCP, Mibanco, Grupo Pacifico, and Prima AFP, allowing for detailed segmental analysis[199](index=199&type=chunk)[205](index=205&type=chunk)[225](index=225&type=chunk)

Financial Performance Highlights - Credicorp delivered resilient full-year results despite a challenging year, with a Return on Equity (ROE) of 15.8%[9] - Net Interest Income increased by 16.6% compared to 2022[9] - The Risk-Adjusted Net Interest Margin (NIM) stood at 4.38%, supported by a funding advantage[9] - The Common Equity Tier 1 (CET1) ratio under IFRS was 13.2%[9] - The efficiency ratio was 46.1%, and the company financially included 4.1 million people[9] Business Segment Performance - Universal Banking contributed 78.5% to the full-year 2023 earnings[17] - Insurance & Pensions contributed 17.1% to the full-year 2023 earnings[17] - Investment Management & Advisory contributed 3.1% to the full-year 2023 earnings[17] - Microfinance contributed 1.3% to the full-year 2023 earnings[17] Digital Initiatives - Mobile Banking Net Promoter Score (NPS) increased by 80% year-over-year[11] - Digital clients increased by 12 percentage points year-over-year, reaching 67.6%[11] - Yape has nearly 11 million active users[35] Outlook and Guidance - The company expects an improvement in macroeconomic conditions in 2024, with a Gross Domestic Product (GDP) growth estimate of 2.5%[9] - The reference rate as of February 2024 was 6.25%[9] - The company projects a real GDP growth of around 2.5% for 2024[79]

Credicorp Ltd. (NYSE:BAP) Q4 2023 Earnings Conference Call February 9, 2024 9:30 AM ET Company Participants Milagros Ciguenas – Investor Relations Gianfranco Ferrari – Chief Executive Officer Cesar Rios – Chief Financial Officer Reynaldo Llosa – Chief Risk Officer Carlos Otello – Chief Financial Officer-Mibank Conference Call Participants Ernesto Gabilondo – Bank of America Olavo Arthuzo – UBS Sergey Dubin – HL Carlos Gomez – HSBC Beatriz Abreu – Goldman Sachs Yuri Fernandes – JPMorgan Andres Soto – Santand ...

When it comes to understanding the potential movement of stocks, the relative strength index (RSI) is a valuable tool. It is a momentum indicator measuring price changes, giving valuable insights as it oscillates from 0 to 100. Readings over 70 indicate an asset is overbought and below 30 oversold. Typically, these points mark high and low points for a given asset.However, an interesting opportunity lies in the mid-point of the RSI. A reading of 50 represents where an asset may transition towards overbought ...

Group 1 - Sandy Spring Bancorp, Inc. (SASR) has seen a 12.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Sandy Spring Bancorp has a dividend yield of 5.3%, significantly higher than the industry average of 2.9% [1] - Flushing Financial Corporation (FFIC) has experienced a 1.2% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [1] - Flushing Financial Corporation has a dividend yield of 5.1%, compared to the industry average of 3.2% [1] - Credicorp Ltd. (BAP) has seen a 2% increase in the Zacks Consensus Estimate for its next year earnings over the last 60 days [1] Group 2 - The Zacks Rank 1 company mentioned has a dividend yield of 4.5%, which is above the industry average of 4.1% [2]