Credicorp Ltd 6-K, filed May 10, 2023

Credicorp Ltd (BAP)

6-K 2023-05-10 For: 2023-05-08

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Added on April 07, 2026

About this 6-K

Credicorp Ltd filed this 6-K on May 10, 2023.

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	CREDICORP LTD.
	(Registrant)

	By:	/s/ Guillermo Morales
		Guillermo Morales
		Authorized Representative

Operating and Financial Highlights		03

Senior Management Quotes		05

Fourth Quarter 2023 Earnings Conference Call		06

Summary of Financial Performance and Outlook		07

Financial Overview		12

Credicorp’s Strategy Update		13

Analysis of 1Q23 Consolidated Results

01	Loans and Portfolio Quality	16

02	Deposits	24

03	Interest Earning Assets and Funding	26

04	Net Interest Income	27

05	Provisions	30

06	Other Income	33

07	Insurance Underwriting Results	36

08	Operating Expenses	39

09	Operating Efficiency	41

10	Regulatory Capital	42

11	Economic Outlook	44

12	Appendix	48

Credicorp Ltd.	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Net interest, similar income and expenses	2,431,707	3,134,778	3,132,089	-0.1%	28.8%

Provision for credit losses on loan portfolio, net of recoveries	(257,590)	(730,681)	(726,998)	-0.5%	182.2%

Net interest, similar income and expenses, after provision for credit losses on loan portfolio	2,174,117	2,404,097	2,405,091	0.0%	10.6%

Total other income	1,239,398	1,338,227	1,328,064	-0.8%	7.2%
Insurance underwriting result	206,667	211,594	296,341	40.1%	43.4%
Total other expenses	(1,874,519)	(2,398,955)	(2,121,697)	-11.6%	13.2%
Profit (loss) before income tax	1,745,663	1,554,963	1,907,799	22.7%	9.3%
Income tax	(546,000)	(476,236)	(493,466)	3.6%	-9.6%
Net profit (loss)	1,199,663	1,078,727	1,414,333	31.1%	17.9%
Non-controlling interest	27,786	24,231	30,060	24.1%	8.2%
Net profit (loss) attributable to Credicorp	1,171,877	1,054,496	1,384,273	31.3%	18.1%
Net profit (loss) / share (S/)	14.69	13.22	17.36	31.3%	18.1%
Loans	144,621,513	148,626,374	145,165,713	-2.3%	0.4%
Deposits and obligations	147,915,964	147,020,787	148,623,300	1.1%	0.5%
Net equity	26,818,054	28,997,731	30,359,898	4.7%	13.2%
Profitability
Net interest margin ⁽¹⁾	4.46%	5.75%	5.84%	9 bps	138 bps
Risk-adjusted Net interest margin	4.01%	4.45%	4.54%	9 bps	53 bps
Funding cost ⁽²⁾	1.32%	2.35%	2.61%	26 bps	129 bps
ROAE	17.0%	15.3%	18.7%	340 bps	170 bps
ROAA	1.9%	1.9%	2.3%	40 bps	40 bps
Loan portfolio quality
Internal overdue ratio ⁽³⁾	4.06%	4.00%	3.99%	-1 bps	-7 bps
Internal overdue ratio over 90 days	3.06%	3.11%	3.02%	-9 bps	-4 bps
NPL ratio ⁽⁴⁾	5.25%	5.41%	5.45%	4 bps	20 bps
Cost of risk ⁽⁵⁾	0.71%	1.97%	2.00%	3 bps	129 bps
Coverage ratio of IOLs	140.7%	132.5%	136.7%	420 bps	-400 bps
Coverage ratio of NPLs	108.9%	97.9%	100.1%	220 bps	-880 bps
Operating efficiency
Efficiency ratio ⁽⁶⁾	47.2%	49.3%	44.3%	-500 bps	-290 bps
Operating expenses / Total average assets	2.98%	3.76%	3.43%	-33 bps	45 bps
Capital adequacy - BCP Stand-alone
Global Capital ratio ⁽⁷⁾	15.79%	14.43%	14.93%	50 bps	-86 bps
Tier 1 ratio ⁽⁸⁾	10.74%	10.02%	10.74%	72 bps	0 bps
Common equity tier 1 ratio ^{(9) (11)}	11.63%	12.59%	11.93%	-66 bps	30 bps
Capital adequacy - Mibanco
Global Capital ratio ⁽⁷⁾	15.61%	14.69%	14.79%	10 bps	-82 bps
Tier 1 ratio ⁽⁸⁾	13.24%	12.38%	12.48%	10 bps	-76 bps
Common equity tier 1 ratio ^{(9) (11)}	14.91%	16.10%	16.25%	15 bps	134 bps
Employees	36,202	36,970	37,166	0.5%	2.7%
Share Information
Issued Shares	94,382	94,382	94,382	0.0%	0.0%
Treasury Shares ⁽¹⁰⁾	14,862	14,849	14,887	0.3%	0.2%
Outstanding Shares	79,520	79,533	79,495	0.0%	0.0%

Traditional Business Transformation ⁽¹⁾	Subsidiary	1Q22	4Q22	1Q23
Day to Day
Digital monetary transactions⁽²⁾	BCP	52%	65%	69%
Transactional cost by unit	BCP	0.15	0.08	0.08
Disbursements through leads ⁽³⁾	Mibanco	77%	76%	77%
Disbursements through alternative channels ⁽⁴⁾	Mibanco	46%	45%	43%
Mibanco Productivity ⁽⁵⁾	Mibanco	28.8	25.9	28.0
Cashless
Cashless transactions ⁽⁶⁾	BCP	36%	48%	48%
Mobile Banking rating	BCP	4.3	3.7	3.7
Digital Acquisition
Digital sales ⁽⁷⁾	BCP	50%	61%	48%

Disruptive Initiatives: Yape	1Q22	4Q22	1Q23
Day to Day
% Microbusiness users ⁽¹⁾	19%	19%	19%
Monthly Mobile Top-offs (thousands)	6,190	26,216	30,399
Cashless
Users (millions)	9.1	11.9	12.3
% of Users that are BCP Clients ⁽²⁾	63%	63%	66%
% of Yapecard Users ⁽³⁾	34%	34%	31%
Active Users (millions) ⁽⁴⁾	5.1	8.2	8.8
% Users who are active monthly users ⁽⁵⁾	56%	70%	71%
No. of transactions a quarter (millions)	177.9	399.5	480.3
Monthly transaction quarterly (millions)	10,698	20,845	24,046
Monthly transactions by Active Yapero ⁽⁶⁾	13.6	19.6	20.3


	The structural loan volume, measured in average daily balances, fell QoQ due to amortizations of Wholesale Banking loans due to a seasonal effect that is present every first quarter. This reduction was partially offset by a slight increase in loans volumes in ADB in Retail Banking and Mibanco, which have shifted their focus to concentrate on lower-risk clients in an adverse environment marked by social protests and damaging rains. YoY, structural loans in average daily balances grew due to expansion in Retail Banking segments; disbursements for working capital loans in Wholesale Banking; and growth in Mibanco’s portfolio during the second half of 2022. The Structural NPL Ratio rose QoQ and YoY due to (i) growth in the NPL loan volume in Wholesale Banking, where the new overdue portfolio was already 100% provisioned given that provision models had collected said impairment in advance; (ii) deterioration in Mibanco’s portfolio, which was impacted by social protests and damaging rains; and (iii) growth in the overdue portfolio in Retail Banking, which was concentrated in the higher-risk disbursements made in 2022. This growth was partially offset by the sale of a judicial portfolio and write-offs registered in Retail Banking in 1Q23.

Structural Loans (S/ millions)	As of			Volume change		% change		% Part. in total structural loans
	As of			Volume change		% change		% Part. in total structural loans
	Mar 22	Dec 22	Mar 23	QoQ	YoY	QoQ	YoY	Mar 22	Dec 22	Mar 23
BCP Stand-alone	101,453	112,342	111,263	-1,078	9,810	-1.0%	9.7%	81.4%	81.6%	81.4%
Wholesale Banking	51,063	55,622	53,775	-1,847	2,712	-3.3%	5.3%	41.0%	40.4%	39.3%
Corporate	30,663	33,400	32,545	-855	1,881	-2.6%	6.1%	24.6%	24.3%	23.8%
Middle - Market	20,400	22,222	21,230	-992	831	-4.5%	4.1%	16.4%	16.1%	15.5%
Retail Banking	50,390	56,720	57,488	768	7,098	1.4%	14.1%	40.4%	41.2%	42.0%
SME - Business	4,709	5,750	5,546	-205	837	-3.6%	17.8%	3.8%	4.2%	4.1%
SME - Pyme	11,844	13,033	13,257	224	1,413	1.7%	11.9%	9.5%	9.5%	9.7%
Mortgage	18,830	20,073	20,282	209	1,452	1.0%	7.7%	15.1%	14.6%	14.8%
Consumer	10,975	12,738	12,984	247	2,009	1.9%	18.3%	8.8%	9.2%	9.5%
Credit Card	4,032	5,126	5,420	294	1,388	5.7%	34.4%	3.2%	3.7%	4.0%
Mibanco	11,411	13,121	13,335	214	1,924	1.6%	16.9%	9.2%	9.5%	9.8%
Mibanco Colombia	1,077	1,174	1,250	76	173	6.5%	16.0%	0.9%	0.9%	0.9%
Bolivia	8,602	9,034	8,951	-82	349	-0.9%	4.1%	6.9%	6.6%	6.5%
ASB	2,103	2,039	1,958	-81	-145	-4.0%	-6.9%	1.7%	1.5%	1.4%
BAP's total loans	124,647	137,710	136,758	-952	12,112	-0.7%	9.7%	100.0%	100.0%	100.0%

Total Loans (S/ millions)	As of			Volume change		% change		% Part. in total loans
	As of			Volume change		% change		% Part. in total loans
	Mar 22	Dec 22	Mar 23	QoQ	YoY	QoQ	YoY	Mar 22	Dec 22	Mar 23
BCP Stand-alone	117,349	121,963	118,707	-3,256	1,358	-2.7%	1.2%	82.2%	82.1%	81.9%
Wholesale Banking	54,604	57,497	55,141	-2,356	537	-4.1%	1.0%	38.3%	38.7%	38.0%
Corporate	31,054	33,617	32,717	-899	1,663	-2.7%	5.4%	21.8%	22.6%	22.6%
Middle - Market	23,550	23,881	22,424	-1,456	-1,126	-6.1%	-4.8%	16.5%	16.1%	15.5%
Retail Banking	62,744	64,465	63,566	-900	821	-1.4%	1.3%	44.0%	43.4%	43.8%
SME - Business	9,509	8,583	7,884	-699	-1,625	-8.1%	-17.1%	6.7%	5.8%	5.4%
SME - Pyme	19,398	17,947	16,996	-951	-2,402	-5.3%	-12.4%	13.6%	12.1%	11.7%
Mortgage	18,830	20,073	20,282	209	1,452	1.0%	7.7%	13.2%	13.5%	14.0%
Consumer	10,975	12,738	12,984	247	2,009	1.9%	18.3%	7.7%	8.6%	9.0%
Credit Card	4,032	5,126	5,420	294	1,388	5.7%	34.4%	2.8%	3.5%	3.7%
Mibanco	13,582	14,261	14,098	-163	516	-1.1%	3.8%	9.5%	9.6%	9.7%
Mibanco Colombia	1,077	1,174	1,250	76	173	6.5%	16.0%	0.8%	0.8%	0.9%
Bolivia	8,602	9,034	8,951	-82	349	-0.9%	4.1%	6.0%	6.1%	6.2%
ASB	2,103	2,039	1,958	-81	-145	-4.0%	-6.9%	1.5%	1.4%	1.4%
BAP's total loans	142,713	148,471	144,964	-3,507	2,251	-2.4%	1.6%	100.0%	100.0%	100.0%

Total Loans	Local Currency (LC) - S/ millions						% change		% Structural change		Foreign Currency (FC) - US$ millions			% change		% part. by currency
	Total			Structural			% change		% Structural change		Total			% change		Dec 22
	Mar 22	Dec 22	Mar 23	Mar 22	Dec 22	Mar 23	QoQ	YoY	QoQ	YoY	Mar 22	Dec 22	Mar 23	QoQ	YoY	LC	FC
BCP Stand-alone	85,290	85,106	82,117	67,221	74,059	75,485	-3.5%	-3.7%	1.9%	12.3%	8,513	9,490	9,615	1.3%	12.9%	69.4%	30.6%
Wholesale Banking	29,124	28,351	25,984	24,898	26,511	26,475	-8.4%	-10.8%	-0.1%	6.3%	6,766	7,505	7,662	2.1%	13.2%	48.8%	51.2%
Corporate	15,503	16,044	15,065	14,652	16,028	15,827	-6.1%	-2.8%	-1.3%	8.0%	4,129	4,525	4,639	2.5%	12.3%	47.1%	52.9%
Middle - Market	13,621	12,307	10,919	10,246	10,482	10,648	-11.3%	-19.8%	1.6%	3.9%	2,637	2,980	3,023	1.5%	14.6%	51.2%	48.8%
Retail Banking	56,166	56,755	56,133	42,323	47,549	49,009	-1.1%	-0.1%	3.1%	15.8%	1,747	1,985	1,953	-1.6%	11.8%	87.9%	12.1%
SME - Business	7,061	5,530	4,970	2,597	2,594	2,698	-10.1%	-29.6%	4.0%	3.9%	650	786	766	-2.6%	17.8%	63.7%	36.3%
SME - Pyme	19,240	17,779	16,830	11,398	12,476	12,866	-5.3%	-12.5%	3.1%	12.9%	42	43	44	1.1%	3.4%	99.0%	1.0%
Mortgage	16,919	18,005	18,264	16,391	17,682	18,005	1.4%	7.9%	1.8%	9.8%	507	532	530	-0.4%	4.5%	89.7%	10.3%
Consumer	9,617	11,192	11,514	8,898	10,851	11,192	2.9%	19.7%	3.1%	25.8%	361	398	386	-2.9%	7.0%	87.9%	12.1%
Credit Card	3,329	4,249	4,555	3,039	3,946	4,249	7.2%	36.8%	7.7%	39.8%	187	226	227	0.7%	21.8%	82.8%	17.2%
Mibanco	13,109	13,784	13,619	10,519	12,309	12,644	-1.2%	3.9%	2.7%	20.2%	126	123	126	2.5%	0.2%	96.7%	3.3%
Mibanco Colombia	-	-	-	0	0	0	-	-	-	-	286	303	329	8.6%	14.8%	-	100.0%
Bolivia	-	-	-	0	0	0	-	-	-	-	2,284	2,326	2,352	1.2%	3.0%	-	100.0%
ASB Bank Corp.	-	-	-	0	0	0	-	-	-	-	558	525	515	-2.0%	-7.8%	-	100.0%
Total loans	98,399	98,890	95,735	77,740	86,368	88,129	-3.2%	-2.7%	2.0%	13.4%	11,767	12,766	12,936	1.3%	9.9%	66.3%	33.7%

Structural Portfolio quality and Delinquency ratios	As of			% change
S/ 000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Structural loans (Quarter-end balance)⁽²⁾	127,585,105	139,115,242	138,073,343	-0.7%	8.2%
Structural Allowance for loan losses⁽²⁾	8,061,670	7,733,575	7,779,501	0.6%	-3.5%
Structural Write-offs	378,093	754,326	677,148	-10.2%	79.1%
Structural IOLs	4,850,191	4,791,245	4,952,108	3.4%	2.1%
Structural Refinanced loans	1,714,074	2,098,748	2,121,068	1.1%	23.7%
Structural NPLs	6,564,265	6,889,993	7,073,176	2.7%	7.8%
Structural IOL ratio	3.80%	3.44%	3.59%	15 bps	-21 bps
Structural NPL ratio	5.15%	4.95%	5.12%	17 bps	-3 bps
Structural Allowance for loan losses over Structural loans	6.3%	5.6%	5.6%	7 bps	-69 bps
Structural Coverage ratio of NPLs	122.8%	112.2%	110.0%	-225 bps	-1282 bps

Loan Portfolio Quality and Delinquency Ratios	As of			% change
S/ 000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Total loans (Quarter-end balance)	144,621,513	148,626,374	145,165,713	-2.3%	0.4%
Allowance for loan losses	8,262,383	7,872,402	7,915,350	0.5%	-4.2%
Write-offs	378,093	754,326	677,148	-10.2%	79.1%
Internal overdue loans (IOLs) (1)(2)	5,872,999	5,939,744	5,789,497	-2.5%	-1.4%
Internal overdue loans over 90-days (1)	4,424,384	4,620,461	4,386,959	-5.1%	-0.8%
Refinanced loans (2)	1,714,074	2,098,748	2,121,068	1.1%	23.7%
Non-performing loans (NPLs) (3)	7,587,073	8,038,492	7,910,565	-1.6%	4.3%
IOL ratio	4.06%	4.00%	3.99%	-1 bps	-7 bps
IOL over 90-days ratio	3.06%	3.11%	3.02%	-9 bps	-4 bps
NPL ratio	5.25%	5.41%	5.45%	4 bps	20 bps
Allowance for loan losses over Total loans	5.71%	5.30%	5.45%	15 bps	-26 bps
Coverage ratio of IOLs	140.7%	132.5%	136.7%	418 bps	-400 bps
Coverage ratio of IOL 90-days	186.7%	170.4%	180.4%	1005 bps	-632 bps
Coverage ratio of NPLs	108.9%	97.9%	100.1%	200 bps	-880 bps


	At the end of 1Q23, 67.9% of deposits were low-cost, which represents a competitive advantage in a context of record-high interest rates. YoY, low-cost deposits fell 11.0%, which was primarily fueled by on-going growth in Time Deposits after corporate clients migrated funds to this deposit type to take advantage of higher rates. However, low-cost deposit levels remain high. Demand deposits at BCP Stand-alone and Mibanco also dropped over the period, which reflected a normalization in liquidity levels. At the end of March 2023, the market share (MS) for total deposits, which consolidates BCP Stand-alone and Mibanco, stood at 34.8% (-90bps with regard to March 22).


	At the end of 1Q23 IEAs registered QoQ growth of 0.2%, driven by an uptick in Available Funds and Investments. Growth in both of the aforementioned accounts was offset by a drop in the Loan balance in a context of amortizations of Government Loans (GP). YoY, the IEAs balance fell 0.6% due to a reduction in balances of Available Funds and Investments in a context marked by lower liquidity system-wide. This decline was partially offset by the increase in the loans volume. Structural loans balance, in quarter end figures, rose 8.2%, driven primarily by the evolution of loans in Retail Banking at BCP and Mibanco. Funding fell 0.6% QoQ and 2.6% YoY due to a drop in balances of BCRP, and Bonds and Issued Notes, which reflects amortization of Reactiva loans and the expiration of a bond at BCP at the end of March.

Interest Earning Assets	As of			% change
S/000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Cash and due from banks	29,563,512	26,897,216	28,158,941	4.7%	-4.8%
Total investments	48,145,429	45,431,224	47,729,504	5.1%	-0.9%
Cash collateral, reverse repurchase agreements and securities borrowing	1,516,855	1,101,856	1,468,180	33.2%	-3.2%
Total loans	144,621,513	148,626,374	145,165,713	-2.3%	0.4%
Total interest earning assets	223,847,309	222,056,670	222,522,338	0.2%	-0.6%

Funding	As of			% change
S/ 000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Deposits and obligations	147,915,964	147,020,787	148,623,300	1.1%	0.5%
Due to banks and correspondents	6,362,990	8,937,411	10,199,650	14.1%	60.3%
BCRP instruments	17,532,350	11,297,659	9,780,540	-13.4%	-44.2%
Repurchase agreements with clients and third parties⁽²⁾	1,856,645	1,669,066	1,905,955	14.2%	2.7%
Bonds and notes issued	16,044,671	17,007,194	14,313,030	-15.8%	-10.8%
Total funding	189,712,620	185,932,117	184,822,475	-0.6%	-2.6%


	In 1Q23, Net Interest Income remained stable QoQ. Our disciplined management of pricing led growth in IEA yields to slightly outpace expansion in the Funding Cost. It is relevant to note that comparatively speaking, there were two fewer business days in 1Q23 than in 4Q22, which negatively impacted Net Interest Income. YoY, Net interest Income rose 28.8%, driven by higher interest rates. Rising rates favorably impacted IEA Yields (+244bps), where growth helped mitigate the downside of rate increases at the funding cost level (+129bps). Growth in structural loans also contributed, although to a lesser extent, to higher NII over the period. In this context, in 1Q23, the Net Interest Margin rose 9bps QoQ and 138bps YoY to stand at 5.84% and the Structural Net Interest Margin, 6.02%

Net Interest Income / Margin	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Interest Income	3,172,346	4,362,142	4,456,106	2.2%	40.5%
Interest Expense	(740,639)	(1,227,364)	(1,324,017)	7.9%	78.8%
Interest Expense (excluding Net Insurance Financial Expenses)	(638,881)	(1,119,124)	(1,208,267)	8.0%	89.1%
Net Insurance Financial Expenses	(101,758)	(108,240)	(115,750)	6.9%	13.8%
Net Interest Income	2,431,707	3,134,778	3,132,089	-0.1%	28.8%

Balances
Average Interest Earning Assets (IEA)	227,279,809	225,604,596	222,289,504	-1.5%	-2.2%
Average Funding	193,179,562	190,660,720	185,377,296	-2.8%	-4.0%

Yields
Yield on IEAs	5.58%	7.73%	8.02%	29bps	244bps
Cost of Funds	1.32%	2.35%	2.61%	26bps	129bps
Net Interest Margin (NIM) ⁽¹⁾	4.46%	5.75%	5.84%	9bps	138bps
Risk-Adjusted Net Interest Margin	4.01%	4.45%	4.54%	9bps	53bps
Peru’s Reference Rate	4.00%	7.50%	7.75%	25bps	375bps
FED funds rate	0.50%	4.50%	5.00%	50bps	450bps

Interest Income / IEA	1Q22			4Q22			1Q23
S/ millions	Average			Average			Average
	Balance	Income	Yields	Balance	Income	Yields	Balance	Income	Yields
Cash and equivalents	30,979	35	0.5%	28,114	236	3.4%	27,528	277	4.0%
Other IEA	1,642	19	4.5%	1,344	48	14.3%	1,285	16	5.0%
Investments	48,549	433	3.6%	46,137	563	4.9%	46,580	592	5.1%
Loans	146,109	2,686	7.4%	150,009	3,515	9.4%	146,896	3,571	9.7%
Structural	128,256	2,619	8.2%	139,153	3,459	9.9%	138,594	3,528	10.2%
Government Programs	17,853	66	1.5%	10,856	56	2.1%	8,302	43	2.1%
Total IEA	227,280	3,172	5.6%	225,605	4,362	7.7%	222,290	4,456	8.0%
IEA (LC)	58.0%	78.8%	7.6%	56.6%	73.1%	10.0%	56.9%	71.2%	10.0%
IEA (FC)	42.0%	21.2%	2.8%	43.4%	26.9%	4.8%	43.1%	28.8%	5.3%

Interest Expense⁽¹⁾/ Funding	1Q22			4Q22			1Q23
S/ millions	Average			Average			Average
	Balance	Expense	Yields	Balance	Expense	Yields	Balance	Expense	Yields
Deposits	148,756	259	0.7%	149,489	582	1.6%	147,822	677	1.8%
BCRP + Due to Banks	25,400	116	1.8%	21,843	240	4.4%	20,108	239	4.8%
Bonds and Notes	16,934	174	4.1%	17,430	189	4.3%	15,660	183	4.7%
Others	1,257	90	28.6%	1,079	108	40.1%	1,091	109	40.1%
Total Funding	193,180	639	1.3%	190,661	1,119	2.3%	185,377	1,208	2.6%
Funding (LC)	51.2%	53.6%	1.4%	50.8%	59.0%	2.7%	50.5%	55.7%	2.9%
Funding (FC)	48.8%	46.4%	1.3%	49.2%	41.0%	2.0%	49.5%	44.3%	2.3%

NIM	227,280	2,533	4.5%	225,605	3,243	5.7%	222,290	3,248	5.8%
NIM (LC)	58.0%	85.2%	6.5%	56.6%	78.0%	7.9%	56.9%	77.0%	7.9%
NIM (FC)	42.0%	14.8%	1.6%	43.4%	22.0%	2.9%	43.1%	23.0%	3.1%


	QoQ, the provisions expense rose due to (i) deterioration in payment behavior in Retail Banking, which was concentrated in disbursements made in 2022 in segments with higher risk profiles and in SME-Pyme, Consumer and Credit Cards in particular; and (ii) the impact in Mibanco in the context marked by social protests, intense rains and deterioration in macroeconomic factors. This growth was offset by a drop in expenses in Wholesale Banking, which was driven by a decrease in exposure this quarter. Provisions rose YoY, triggered by deterioration in the payment behavior in Consumer and Credit Cards and by Mibanco, which have been impacted by the current environment in Peru and macroeconomic factors. SME-Pyme provisions levels remain high in line with its portfolio deterioration. This uptick was partially offset by an improvement in payment behavior in Wholesale Banking. In the aforementioned context, the Structural Cost of Risk (CofR) stood at 2.10% in 1Q23.

Structural Loan Portfolio Provisions	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Gross provision for credit losses on loan portfolio	(354,553)	(799,864)	(799,129)	-0.1%	125.4%
Recoveries of written-off loans	93,091	84,908	75,109	-11.5%	-19.3%
Provision for credit losses on loan portfolio, net of recoveries	(261,462)	(714,956)	(724,020)	1.3%	176.9%
Structural Cost of risk ⁽²⁾	0.82%	2.06%	2.10%	4 bps	128 bps

GP Loan Portfolio Provisions	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Gross provision for credit losses on loan portfolio	3,872	(15,725)	(2,978)	-81.1%	-506.1%
Recoveries of written-off loans	-	-	-	-	-
Provision for credit losses on loan portfolio, net of recoveries	3,872	(15,725)	(2,978)	-81.1%	-176.9%
GP Cost of risk ⁽¹⁾	-0.09%	0.66%	0.17%	-49 bps	26 bps

Loan Portfolio Provisions	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Gross provision for credit losses on loan portfolio	(350,681)	(815,589)	(802,107)	-1.7%	128.7%
Recoveries of written-off loans	93,091	84,908	75,109	-11.5%	-19.3%
Provision for credit losses on loan portfolio, net of recoveries	(257,590)	(730,681)	(726,998)	-0.5%	182.2%
Cost of risk ⁽¹⁾	0.71%	1.97%	2.00%	3 bps	129 bps


	Other Core Income fell QoQ and YoY by 4.8% and 1.8% respectively. This evolution was driven by drop in the Net gain on FX transactions in BCP, which reflected a decrease in the volatility of the US Dollar and the elimination of the inter-city transfers commission in BCP. Non-core other income increased 31.4% QoQ, which reflects an uptick in other non-financial income at BCP, and rose 124.6% YoY, fueled by growth in Net gains on securities in the Insurance and Pension businesses.

Core Other Income	Quarter			% Change
(S/ 000)	1Q22	4Q22	1Q23	QoQ	YoY
Fee income	891,628	894,552	881,781	-1.4%	-1.1%
Net gain on foreign exchange transactions	259,710	293,215	248,515	-15.2%	-4.3%
Total other income Core	1,151,338	1,187,767	1,130,296	-4.8%	-1.8%

Banking Business Fees	Quarter			% Change
S/ 000	1Q22	4Q22	1Q23	QaQ	YoY
Payments and transactionals ⁽¹⁾	290,197	333,779	325,994	-2.33%	12.34%
Liability accounts ⁽²⁾	217,956	226,496	177,971	-21.42%	-18.35%
Loan Disbursement ⁽³⁾	90,576	97,336	95,201	-2.19%	5.11%
Off-balance sheet	60,370	63,247	61,654	-2.52%	2.13%
Mibanco (Peru and Colombia)	33,276	34,164	59,208	73.30%	77.93%
Insurances	30,303	28,617	31,102	8.68%	2.64%
BCP Bolivia	27,400	24,479	37,765	54.28%	37.83%
Wealth Management and Corporate Finance	18,785	12,880	15,254	18.43%	-18.80%
ASB	12,280	11,040	3,098	-71.94%	-74.77%
Others ⁽⁴⁾	4,596	-16,494	12,830	n.a	179.15%
Total	785,739	815,544	820,077	0.56%	4.37%

Non-core Other income	Quarter			% Change
(S/ 000)	1Q22	4Q22	1Q23	QoQ	YoY
Net gain on securities	(56,866)	77,512	70,036	-9.6%	n.a
Net gain from associates ⁽¹⁾	24,014	25,422	27,212	7.0%	13.3%
Net gain on derivatives held for trading	(5,982)	5,857	(6,570)	n.a	9.8%
Net gain from exchange differences	(8,363)	22,039	22,963	4.2%	n.a
Other non-financial income	135,257	19,630	84,127	328.6%	-37.8%
Total other income Non-Core	88,060	150,460	197,768	31.4%	124.6%

Components		Benefits
Cash flows (premiums, claims and expenses), adjusted according to the discount rate. Risk adjustment (RA), compensation required for assuming non-financial risk. Contractual service margin (CSM), which represents unearned underwriting income that is recognized as income during the coverage period These components are subject to updates of cash flows based on estimates of the amount, temporality and risk of flows and discount rates		Improves the comparability of insurance entities at a global level. IFRS 4 allowed entities to use a broad range of accounting practices for insurance contracts. Adequately reflects the economic value of insurance contracts. Some previous practices for insurance accounting permitted under IFRS did not adequately reflect true underlying financial situations or the financial yields of these insurance contracts. Provides better information to users of financial statements.


	The insurance underwriting result rose 43.4% YoY due to an improvement in the results of Life Insurance. This evolution was attenuated by a drop in P&C’s results. The uptick in Life was mainly driven by D&S and Credit Life, which reflects growth in premiums due to an increase in sales and price adjustments and to a drop in claims for both regular cases and COVID-19. The decrease in P&C’s results reflects an uptick in claims in P&C Risks and Cars.


	Operating expenses rose YoY. This evolution was primarily driven by Administrative and general expenses through the Information Technology (IT) Expenses and Advertising and Fidelity Programs lines. Growth in expenses for these concepts is in line with our transformation strategy and also reflects an uptick in transactions and in costs associated with client fidelity programs. This quarter, Salaries and employee benefits also rose after specialized personnel were hired for IT projects. If we exclude disruption expenses, the YoY variation in Operating expenses stands at 8.9%.

Administrative and general expenses	Quarter			% Change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
IT expenses and IT third-party services	196,985	254,965	240,932	-5.5%	22.3%
Advertising and customer loyalty programs	110,314	212,710	135,767	-36.2%	23.1%
Taxes and contributions	67,657	94,647	85,073	-10.1%	25.7%
Audit Services, Consulting and professional fees	51,692	138,978	51,878	-62.7%	0.4%
Transport and communications	39,117	63,049	51,036	-19.1%	30.5%
Repair and maintenance	29,913	44,734	25,790	-42.3%	-13.8%
Agents' Fees	27,018	27,673	26,152	-5.5%	-3.2%
Services by third-party	22,925	35,285	27,511	-22.0%	20.0%
Leases of low value and short-term	20,931	25,997	25,116	-3.4%	20.0%
Miscellaneous supplies	19,077	22,848	32,993	44.4%	72.9%
Security and protection	15,476	16,365	15,789	-3.5%	2.0%
Subscriptions and quotes	13,012	14,271	13,086	-8.3%	0.6%
Electricity and water	10,550	14,865	11,497	-22.7%	9.0%
Electronic processing	7,693	12,225	8,730	-28.6%	13.5%
Insurance	8,291	8,629	8,750	1.4%	5.5%
Cleaning	4,506	5,368	5,162	-3.8%	14.6%
Others⁽¹⁾	50,908	50,273	69,798	38.8%	37.1%
Total	696,065	1,042,882	835,060	-19.9%	20.0%


	The efficiency ratio improved YoY by 290 bps, in line with an uptick in core income due to growth in net interest income, which reflected the fruits of disciplined pricing management in a context of rising interest rates.

IFRS 17	BCP Stand-alone	BCP Bolivia	Mibanco Peru	Mibanco Colombia	Pacifico	Prima AFP	Credicorp
1Q22	40.6%	59.9%	53.0%	79.0%	32.0%	54.5%	47.2%
4Q22	41.9%	64.5%	52.3%	93.3%	28.7%	46.1%	49.4%
1Q23	36.8%	60.2%	54.1%	93.2%	22.1%	49.6%	44.3%
Var. YoY	-380 bps	30 bps	110 bps	1420 bps	-990 bps	-490 bps	-290 bps


	Credicorp’s Regulatory Capital stood at 1.43 times the minimum level required by the regulatory entity. BCP Stand-alone’s CET1 ratio increased 30 bps to 11.9% An uptick in the balance of Retained Earnings (+57.8%), and Share Capital and Legal Reserves (+1.7%) drove this dynamic. Mibanco’s CET 1 ratio rose 38 bps YoY to stand at 16.4%. Growth in levels for Capital and Reserves and Retained Earnings fueled this dynamic.


	In 1Q23, the Peruvian economy is estimated to have contracted slightly by around 0.4% YoY (compared to 1.7% YoY in 4Q22), affected by social protests in January and February and intense rains and floods caused by Cyclone Yaku in March. These factors exacerbated the slowdown that was already being observed in non-primary sectors, with private consumption continuing to lose momentum and private investment deteriorating. The annual inflation rate closed the year at 8.4% YoY, remaining close to its 26-year high (8.8% in 2Q22). On the other hand, real GDP is estimated to grow by 1.8% this year. According to the Central Reserve Bank of Peru (BCRP), the exchange rate closed at USDPEN 3.7617 in 1Q23, representing an appreciation of 1.3% compared to the end of 4Q22 and a depreciation of 1.9% compared to a year ago.