Banco del Trabajo - Perú

1. Banco del Trabajo - Perú MAX CHION

2. 2000 2005 2000 2005 Peruvian Market Growth and Market Potential MAIN INDICATORS MARKET PENETRATION 16% A GROWING MARKET - Outstanding loan volume 1/ 103% In spite of the good results of the recent years: growth of the market, increase of the customer base and of the number of player, there is still a large market to develop and to serve. Source : Superintendence of Banking and Insurance of Peru (*) Population older than 20 years that has a familiar monthly income over $ 150 Source : Superintendence of Banking and Insurance of Peru WITH MORE GROWTH TO COME $ Billion 1/ Outstanding loans includes consumer, microfinance, mortgage and credit cards. 2/ Compound annual growth rate Source: The McKinsey Quarterly. “ Financing Latin America´s Low-income consumers” 2005

3. Peruvian low income segments ECONOMICALLY ACTIVE POPULATION, by enterprise type. (2005) BUSINESS DISTRIBUTION, by number of workers. (2005) Unemployed / Unskilled workers 9.4% Medium and Large Companies; 11.1% Small Companies; 11.3% Civil servants, self-employed Small, medium and large company workers. 38.3% Microentrepreneurial 77.6% Microentrepreneurial (From 2 to 9 workers) 52.3% 46% in the city 54% in the country Microentrepreneurial (From 2 to 9 workers) 77.6% Small Companies (From 10 to 49 workers). 11.3% Medium and large Companies ( More than 49 workers) 11.1% Source: The Ministry of Work Source: The Ministry of Work ECONOMICALLY ACTIVE POPULATION, by sex and monthly income. (2005) Percentage Source: The Ministry of Work

4. TARGET MARKET BANCO DEL TRABAJO Focus on the middle and low income segments of the population* Segmentation by distribution channel (own or trough strategic alliances) and per source of income. MICROFINANCE CONSUMER LENDING ALLIANCES • Development of informal markets • Accurate solutions to their needs. • Product simplification. • Quick approval and disbursement. • Pricing strategy. 1.5 million possible combination and the real price combination actually used are 200 thousand. • Flexible collection process. Reward for payment on time. • Additional loans for good customers • Nearness to the client business: personalized attention from the Sales force. • Supply of new and specialized products. • Short-term loans of a small amount. • Flexible and easy approval conditions. • Quick approval and disbursement. • Flexibility in payment. • Pre-Approved disbursement. • Payment through payroll deduction. • Debt acquisition. • Alliances with companies that own a large base of clients • Being closer to the end customer and the purchasing decision. • Being better informed over use and type of consumption. • Attractive marketing campaigns. Insurance. Life insurance / Technical support insurances Remittance. The bank subsidize the money transfer costs. Business with Japan, USA, Spain and Chile ATM / Debit card. Free Maintenance. / Four transactions free of charge Integrated financial solution: loans, insurance, credit cards, remittances and savings COMPETITIVE ATTRIBUTES Customization of the Financial Products Requirement simplification Time to market Risk Model Payment Flexibility Short-term loans of a small amount, with flexible payment conditions, and technical support. * Large group of people who usually didn’t have access to financial supply.

5. Evolution of the Strategic Approach FOCUS ON THE PRODUCT CUSTOMER RELATIONSHIP CONSUMER LENDING CONSUMER LENDING + MICROFINANCE Migration from a sales organization to a client focus organization. • Personal Loans for employees. • Payments in equal and fixed quotas. • Emphasis in a great force of sales. • A new customers segment: Microfinance. • Adaptation of the consumption model to microfinance. • Beginning of product crosselling. • Beginning of the Model of Financial Retail. • Better knowledge of the client and segmentation of them. • Models different from evaluation for consumption and microfinance. • A new management model: integration of sales, evaluation, collecting and customer retention processes. Aligned with the sales force incentives. • Integral financial solution (personal or microfinance loans, credit cards, insurance, remittance, saving account, Debit card)

6. Banco del Trabajo - Business Strategy VALUE CREATION TO THE CUSTOMERS Strategy Experience • Segmented marketing campaigns by client, distribution channel or geography. • Responding to microentrepreneurial needs according to their size and type of business (i.e. to define customer service and business opportunity). • Middle and low income consumers, who usually don’t have access to financial supply. • Segmentation by distribution channel (traditional or thought strategic alliances) and source income. Market Segmentation Distribution Channels • Cost Control. • Proximity to the client • Growth through strategic alliances, Own Forces of Sales and Channels. • Being with the client at the decisive moment of purchase. • Format of channels in alliances tailored to clients needs. Product Portfolio • Knowledge of client behavior. • Product package: Loans, insurance, credit cards, remittances and savings. • Product innovation with greater options of payment • Creating products that fit the clients everyday activities and needs, such as capital of work for merchandise, technical support insurances, credit lines from US$ 33. • Supply of products to large groups of people with consumption. (e.g. self-construction) Price • Price flexibility. • Segmented price. • Relation Price - Risk • Microprice strategy by type of product, client, term, geography, risk of the segment. • Experience of the Risk Management needs of each type of client. • Continuous monitoring to avoid fraud. • Flexibilities in payment (e.g. payment zero, weekly payment, partial payments) • Knowledge credit lines in sectors with low bank penetration. • Different scoring (Origination Scoring and Collection Scoring). • Integrated Risk Management Policy (e.g. segmentation / price) • Creating an effective and flexible collection process • Preventive Collection to 90% of the portfolio, prioritized by risk profile. Risk Administration ACHIVE A LARGER PARTICIPATION INTO THE SHARE OF WALLET AND THE SHARE OF LIFE OF OUR CUSTOMERS.

7. Customer Focus • Personal or microfinance loans • Micro / Small enterprise loan (e.g. guarantee, commercial mortgage, plain loans, etc.) Term: At least 3 years. Amount: Up to US$ 20,000 Use of proceeds: Working Capital / Asset Financing • Home Mortgage Term: Up to 20 years. Amount: Up to US$ 35,000 Use of proceeds: Home mortgage or commercial mortgage • Credit Card • Credit Lines since $ 200. • Partial or total payment. • Credit assessment. • No insurance fees • Insurance • Life insurance. • “Muerte Accidental”  Cover=US$ 6 M • “Siempre a Mano”  Cover= US$ 12,5 M • Technical support insurances • Remittance • The bank covers with the money transfer costs • Saving account • Local currency or US$. • Competitive interest rates. • Zero initial fee and minimum maintenance. • ATM / Debit card • Free Maintenance. • Four transactions free of charge.

8. Banco del Trabajo in numbers LOAN PORTFOLIO (MM US$) LOANS ORIGINATION (MM US$) 2002 2007 (P) GEOGRAPHICAL BRANCHES 10 31 13 59 38 21 32 11 P CUSTOMERS Loans Customers Savings Customers Thousand Customers Growth 2007 (P) vs. 2001 Loans  166% Savings  206% Total Customers  177%

9. Microfinance Evolution – Interest Rates vs. Loans Regulation Transparency of Information Software to compare credits´ costs. Microfinancial Institutions can offer services nationwide. Interest rates reduction associated to an important loans growth, which are consequence of the free market. Banks participation promote to the acceleration of interest rates reduction. Authorization to Municipal Saving and Credit Institution to operate in Lima Merger between BCP and Financiera Solución Creation of Planning Management and customer support areas Microinsurance Regulation Banks Number Loans (MMUSD) Interest Rates (%) Market Share Banks Interest rates reduction = - 55% Loans Growth = 221% Competitors Number 2 2 3 3 4 6 7 20% 23% 32% 39% 46% 49% 50% 43 43 43 43 44 45 45 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07

10. Consumer Lending Evolution – Interest Rates vs. Loans Regulation Transparency of Information Authorization to Municipal Saving and Credit Institution to operate in Lima Merger between BCP and Financiera Solución Microfinancial Institutions can offer services nationwide. Software to compare credits´ costs. The reduction of the interest rates has occurred mainly by Loans growth, because unlike the microfinances Banks always have participated in this segment. Creation of Planning Management and customer support areas Microinsurance Regulation Loans (MMUSD) Banks Number Interest Rates (%) Market Share Banks Interest rates reduction = - 32% Loans Growth = 205% Competitors Number 15 15 14 14 12 11 11 83% 78% 75% 75% 75% 75% 77% 46 46 45 44 42 40 40 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07

11. Microfinance Evolution – Delinquency Rate vs. Loans Norm of Credits Provision – Standardization with Financial System Norm of Refinanced Credits Provision Norm of Credits Provision by credit exchange risk Creation Risks Managment in SBS Creation Microfinancial Intendance New Regulation for evaluation and classification to defaulter. The implementation of risks norms, the new credit technologies (origination, behavior and collecting scoring) have taken to the efficient handling of delinquency rates. Delinquency rate reduction = - 60% Loans Growth = 221% Norm for administration of the Overindebtedness risk Regulation for Microinsurance Delinquency Rate (%) Banks Number Loans (MMUSD) Market Share Banks Competitors Number 2 2 3 3 4 6 7 20% 23% 32% 39% 46% 49% 50% 43 43 43 43 44 45 45 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07

12. Credit Consumption Evolution – Delinquency Rate vs. Loans Norm of Credits Provision – Standardization with Financial System Norm of Refinanced Credits Provision Norm of Credits Provision by credit exchange risk Creation Risks Managment in SBS Creation Microfinancial Intendance New Regulation for evaluation and classification to defaulter. The continuous improvements to the tools of credit risk have allowed to improve the delinquency rate in this segment. Delinquency Rate reduction = - 71% Loans growth = 205% Norm for administration of the Overindebtedness Risk. Banks Number Delinquency Rate (%) Loans (MMUSD) Microinsurance Regulation Market Share Banks Competitors Number 11 15 15 14 14 12 11 77% 83% 78% 75% 75% 75% 75% 40 46 46 45 44 42 40 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07

13. Microfinance Evolution – Interest Rate vs. Delinquency Rate Authorization to Municipal Saving and Credit Institution to operate in Lima Merger between BCP and Financiera Solución Microfinancial Institutions can offer services nationwide. Norm of Credits Provision – Standardization with Financial System Norm of Refinanced Credits Provision Norm of Credits Provision by credit exchange risk Creation Risks Management in SBS Creation of Planning Management and customer support areas Creation Microfinancial Intendance Norm for administration of the Overindebtedness risk. The reduction of the risk perception has allowed to a parallel diminution of the delinquency rates and the interest rate of the segment. New Regulation for evaluation and classification to defaulter. Regulation Transparency of Information Interest Rate reduction = - 55% Delinquency Rate reduction = - 60% Software to compare credits´ costs. Banks Number Interest Rate (%) Market Share Banks Delinquency Rates (%) Competitors Number 2 2 3 3 4 6 7 20% 23% 32% 39% 46% 49% 50% 43 43 43 43 44 45 45 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07

14. Credit Consumption Evolution – Interest Rate vs. Delinquency Rate Authorization to Municipal Saving and Credit Intitutions to Lima BCP Absorbed Financiera Solucion Microfinancial Institutions can offer services nationwide. Norm of Credits Provision – Standardization with Financial System Norm of Refinanced Credits Provision Norm of Credits Provision by credit exchange risk Creation Risks Management in SBS Creation of Planning Management and customer support areas Creation Microfinancial Intendance Norm for administration of the Overindebtedness Risk. New Regulation for evaluation and classification to defaulter. The knowledge of this segment has allowed a greater reduction in delinquency rate a diminution in the interest rate Interest Rate reduction = - 32% Delinquency Rate reduction = - 71% Regulation Transparency of Information Banks Number Interest Rate (%) Software to compare credits´ costs. Market Share Banks Delinquency Rates (%) Competitors Number 11 15 15 14 14 12 11 83% 78% 75% 75% 75% 75% 77% 46 46 45 44 42 40 40 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07

15. Learned Lessons as a Microfinancial Institution • Creating synergies between the sales channels. • Growth through alliances. • Identifying necessities and risks by type of client. • Economies of Scales in evaluation models and common processes. To explore business core ECONOMIES OF SCALES AND RISK DIVERSIFICATION To develop a product portfolio • Creating products that fit the clients everyday activities and needs. • Develop bank assurance market. • Cross selling products sales to clients. (E.g. Mortgage Loans) • Product proposal to optimize return-risk. MAINTAINING LOYAL CUSTOMERS • Scoring Models (Origination, Collection and behavior) adapted for Microfinance and Consumer Lending. • Economies of Scales in evaluation models and common processes. • Flexible model of collection. To implement a bundle risk model LEARNING SYNERGIES

16. Learned Lessons as Market Development • To reduce Barriers of formalization for the Mipes and Pymes (SME). E.g. .Cost of formalization. • To create the necessary norms, rules and guarantees for the growth of the Microentrepreneurial sector. E.g. Risk Management • To assure market competition Government • Suitable product offer for Microfinancial Institutions to the Mipes and Pymes (SME). E.g. Insurance, guarantees & collaterals, structure loans, equities. • Access to technologies and best practices. Development Partners