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CREDICORP Jorge Ramirez-del-Villar

CREDICORP Jorge Ramirez-del-Villar Head of Planning & Finance

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CREDICORP Jorge Ramirez-del-Villar

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

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

  3. PERUVIAN ECONOMY AND BANKING SYSTEM

  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 Colombia Ecuador Brasil Bolivia Chile Households’ Indicators

  5. PERUVIAN ECONOMY vs. OTHER LATIN AMERICAN ECONOMIES 2003(e) Mexico Brazil Colombia Chile Peru GDP (US$ Bn) 590.5 497.5 77.1 68.3 61.1 GDP Growth (%) 1.5 0.7 2.8 3.2 3.8 Inflation (%) 3.5 9.6 6.3 3.6 1.7 Devaluation (%) 22.0 29.1 29.1 (2.7) (0.7) Deposits/GDP (%) 16.6 32.5 24.4 62.2 22.7 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 Imports 3.1 9.2 7.9 8.5 11.2 Country Risk (bps)** 187 568 448 143 290 * As a % of GDP ** JP Morgan Index EMBI : Spread of Government Bonds over US Treasury Bonds as of Nov. 2003 Source : The Economist Intelligence Unit, BCP (Peru)

  6. PERUVIAN BANKING SYSTEM vs. OTHER LATIN AMERICAN BANKING SYSTEMS 2002 Brazil Mexico Chile Colombia Peru Assets 320.5 163.2 68.2 26.3 17.6 Loans 90.3 90.0 42.3 16.5 10.6 Deposits 128.8 121.8 27.3 19.3 13.2 Equity 25.3 16.3 5.7 2.6 1.8 Past Due Loan/ Loans 12.5% 4.8% 2.0% 10.2% 8.0% Reserves/Past Due Loans 105.4% 136.2% 135.2% 77.8% 133.0% Cost/Income 53.9% 64.5% 51.5% 84.7% 60.5% ROE 8.8% 12.8% 14.8% 11.3% 8.2% US$ Bn Source: Fitch Ratings , IMF

  7. MOST LIKELY SCENARIO FOR THE ECONOMY AND THE PERUVIAN BANKING SYSTEM FOR 2003-2004 • 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

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

  9. CREDICORP HIGHLIGHTS • 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

  10. CREDICORP vs. LARGEST BANKS OF OTHER LATIN AMERICAN COUNTRIESSept. 2003 BBVA México Santander Chile US$ Bn Bradesco Brazil Credicorp Bancolombia Assets 43.1 56.3 16.9 4.8 8.2 Loans 22.7 24.3 11.6 2.6 4.5 Deposits 29.3 20.0 8.1 3.3 6.3 Net Equity 5.9 4.4 1.4 0.5 0.9 Net Income (Mn) 499 545 212 112 57 RATIOS Past Due/ Loans 5.6% 7.9% 2.4% 1.5% 7.6% Reserves/Past Due Loans 119.7% 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% Source: Bank’s 3Q Reports

  11. CREDICORP vs. LARGEST BANKS OF OTHER LATIN AMERICAN COUNTRIES (Cont.) Sept. 2003 Branches 1,643 3,033 346 364 353 ATM’s 3,875 21,585 1,098 760 489 Employees 28,613 77,154 7,684 6,364 9,321 Market Share - Loans 25.6% 19.5% 25.9% 13.2% 32.9%* - Deposits 27.7% 15.2% 25.5% 11.5% 35.4%* BBVA México Santander Chile Bradesco Brazil Credicorp Bancolombia * BCP’s Market Share Source: Bank’s 3Q Reports

  12. CREDICORP OVERVIEW • Summary of Results (USMn) 3Q02 3Q03 9M02 9M03 • Net Interest Income 77.2 90.0 247.5 267.9 • Provisions 32.2 23.8 87.9 77.8 • Other Income 89.9 105.3 275.2 327.4 • Claims on Insurance Activities 25.5 24.7 73.4 76.3 • Operating Expenses 94.9 102.7 295.9 324.2 • BSCH Peru Merger Costs - - - 17.5 • Translation Result -0.9 0.4 -2.9 -3.7 • Earnings before Taxes and Min. Int. 13.6 44.5 62.6 95.8 • Income Tax -8.8 -13.3 -26.6 -29.8 • Minority Interest -1.8 -5.2 -7.2 -9.2 • NET INCOME 3.0 26.0 28.8 56.8 • 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

  13. CREDICORP OVERVIEW • Earnings Contribution (USMn) 3Q02 3Q03 9M02 9M03 • Banco de Credito 10.0 28.7 37.3 63.8 • Pacifico 2.7 0.1 6.3 6.9 • Atlantic 0.1 2.5 1.5 4.7 • Tequendama* -3.1 -0.2 -3.5 -0.4 • Credicorp & Others** -6.6 -5.1 -12.7 -18.2 • Financial & administrative expenses 0.7 -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 INCOME 3.1 26.0 28.8 56.8 Assets 7,399 8,224 7,399 8,224 Net Equity 798 892 798 892 BIS Ratio (%) 12.2 11.1 12.2 11.1 * Excludes transfers to Credicorp and others **Includes income from ICSA

  14. 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

  15. 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.

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

  17. BCP OVERVIEW • 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

  18. BCP’S RESULTS • 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.

  19. Consolidated w/o Bolivia BCP’S LOAN QUALITY PDLs / LOANS RESERVES / PDLs

  20. CREDICORP’S OTHER MAJOR SUBSIDIARIES

  21. CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003

  22. CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 23

  23. CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 23

  24. CREDICORP’S OTHER MAJOR SUBSIDIARIES Sept. 2003 23

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

  26. ATLANTIC SECURITY BANK Key Figures (US$Mn) 9M02 9M03 Assets 657 747 Equity 102 129 - 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 Loans 154 151 Investments 299 423 Deposits 537 585 Managed Funds 510 598 NIM (%) 3.4 2.4 PDLs/ Loans (%) 0 0 OPEX / Income (%) 37.8 20.7 CONTRIBUTION TO CREDICORP 1.5 4.7 24

  27. Key Figures (US$Mn) 9M02 9M03 • Assets 468 480 • Equity 57 55 • Deposits 330 387 • Mkt Share (%) 12.5 12.8 • Loans 322 320 • Mkt Share (%) 11.9 12.3 • PDLs / Loans (%) 25.3 21.7 • Reserves / PDLs (%) 47.9 77.0 25

  28. Key Figures (US$Mn) 9M02 9M03 • Assets 293 273 • Equity 37 36 • Deposits 159 154 • Mkt Share (%) 0.9 0.8 • Loans 210 230 • 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

  29. Key Figures (US$MN) 9M02 9M03 • Equity 102 109 • Premiums 192 225 • - General Insurance 121 129 • - 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 *Sum of net claims, general expenses and commissions / net premiums 27

  30. CREDICORP OVERVIEW 3Q03 • Good results for Credicorp during the third quarter - Significant increase in BCP´s revenues with control on costs - Positive trends in most subsidiaries • BCB - Improved results during the quarter with lower provisions - Loan portfolio clean-up concluded - Focus on restructure operations following BCP´s business model • 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 • Tequendama - Search for alternatives to provide viability for its business 28

  31. CREDICORP OVERVIEW 3Q03 (Cont.) • 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 • 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 29

  32. 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

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

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