Credicorp : INFORMES DE CLASIFICACIÓN DE RIESGO.

Published: 2025-05-13 17:42:06 ET BAP

Published on 05/13/2025 at 17:42

Credicorp Ltd.

This report does not constitute a rating action.

‌Ratings Score Snapshot

Anchor

bbb-

Business position

Strong

Capital and earnings

Adequate

Risk position

Adequate

Funding

Adequate

Liquidity

Adequate

CRA adjustment

ALAC support

GRE support

Group support

Sovereign support

Primary contact

Camilo Andres Perez

Mexico City

52-55-5081-4446

Issuer credit rating

BBB-/Stable/--

Holding company ICR

BBB-/Stable/--

camilo.perez @spglobal.com

Secondary contact

Ivana L Recalde Buenos Aires 54-11-4891-2127

ivana.recalde @spglobal.com

‌Credit Highlights

Overview

Key strengths Key risks

High-quality and diverse asset base with dominant positions in most business segments.

Sufficient liquidity at the holding company to meet obligations, limiting dependence on dividends from operating subsidiaries.

Complex political landscape dents short- to medium-term economic growth in Peru, affecting business conditions.

Firmado Digitalmente por:

GUILLERMO JESUS MORALES VALENTIN

Fecha:w1w3/w05.s/2p0g2lo5b0a4l.:1c6o:m06/rpa.tmin.gsdirect May 13, 2025 1

limits the group credit profile on Credicorp because we don't think such a local entity could withstand a sovereign default scenario, given large asset exposure to the country.

7,000 Others

6,000

(Mil. PEN)

5,000

4,000

3,000

2,000

1,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Atlantic Security Holdings (Private banking)

Credicorp Capital (Asset manager)

Banco de Credito de Bolivia (Bank)

Prima (Pension fund)

Pacifico (Insurer)

Banco de Credito del Peru (Bank)*

Dividends paid by holdco

*Banco de Credito del Peru includes MiBanco, Atlantic Security Holding includes the treasury shares it holds from Credicorp. e--Estimate. PEN--Peruvian nuevo sol. Source: S&P Global Ratings.

Credicorp

‌Outlook

The stable rating outlook on Credicorp for the next 12-24 months reflects that on Peru, which will continue influencing the group's credit fundamentals. Credicorp receives a substantial portion of dividends from its Peruvian operations across various financial segments. In addition, the holding company has substantial liquid assets that would ensure debt service coverage even in a scenario of low or no dividends.

The stable outlook also indicates the resilience of the group's largest subsidiary, Banco de Credito del Peru, which we don't expect to downgrade unless its stand-alone credit profile falls below 'bbb-', which is unlikely.

A downgrade of Peru could trigger a similar action on Credicorp. We could also lower the rating on Credicorp if its liquidity decreases and challenging business conditions significantly weaken dividends received.

We could upgrade Credicorp if we were to take a similar action on the sovereign while the group's intrinsic credit fundamentals remain unchanged.

‌Anchor: 'bbb-' For Financial Institutions Operating In Peru

Our bank criteria use our Banking Industry Country Risk Assessment's economic risk and industry risk scores to determine a bank's anchor, the starting point in assigning an issuer credit rating. Our anchor for a financial entity operating in Peru (where Credicorp mostly operates) is 'bbb-'. (See "Banking Industry Country Risk Assessment: Peru," Dec. 17, 2024.)

‌Business Position: Largest Financial Group In Peru With Ample Business Stability

Credicorp's solid business position reflects its leadership in Peru's financial sector, primarily through its largest subsidiary, Banco de Credito del Peru (BCP; BBB-/Stable/A-3), which owns MiBanco Banco de la Microempresa S.A. (BBB-/Stable/A-3). BCP, which has diversified operations across all retail and wholesale segments, is the leading bank in Peru, with a lending market share of about 37%, including its microlender subsidiary, MiBanco. These factors support the stability of the bank's business and dividend flows to Credicorp.

The group also has smaller banking operations, including ASB Bank Corp. (BB+/Stable/B) based in Panama and Banco de Credito de Bolivia (not rated) based in Bolivia, as well as activities in the Peruvian insurance and pension funds industries through Pacifico Seguros and Prima AFP, respectively (both not rated). Pacifico Seguros is one of the leaders in the life, health, and property/casualty insurance segments. AFP Prima is the second-largest player in the pension industry, with a 30% share in assets under management.

In addition, Credicorp has asset and wealth management operations in Colombia, Chile, and Peru through Credicorp Capital (not rated). BCP has made up 75%-80% of Credicorp's earnings and dividends in recent years, while insurance and pension fund business have made up 10%-15% and banking operations in other jurisdictions and Credicorp Capital the rest.

The steady investments in digital initiatives over the past years have started to pay off, benefiting Credicorp's competitiveness in the Peruvian financial industry. In particular, Yape, the most used digital financial services app in Peru, with about 17 million total users, has been increasing its functionalities and supplementing banking and insurance products, increasing the group's client base and benefiting income and profitability. We expect investments in digitalization to continue, supporting the group's adaptability and competitive position amid continued disruptions in the financial industry.

‌Capital And Earnings: Adequate Capitalization To Support Business Strategy

We consider Credicorp's capitalization metrics commensurate with its business strategy. We expect its risk-adjusted capital ratio (calculated according to our methodology) to remain stable at roughly 9.9% in 2025-2026 thanks to its main operating subsidiaries' high and stable capacity to build earnings.

Our base case considers the following:

Annual GDP growth in Peru close to 3.0%;

Annual inflation stabilizing at 2.5%;

Policy rate gradually dipping to 4.25%;

Moderate annual loan growth of 6%-8%;

High net interest margins amid focus on growing retail segments and consistently low funding costs;

Cost of risk decreasing slightly to about 2.2%;

NPLs stabilizing at 3.5%-4.0% and remaining well covered by loan loss reserves, with net charge-offs of 1.8%-2.2%;

Continued investment in digital initiatives;

Return on average equity remaining adequate at 16%-18%; and

Dividend distributions from Credicorp to its shareholders of 50%-70% of results but with flexibility to reduce them if needed, as in 2021.

Credicorp has good regulatory capital metrics, with total regulatory capital above 1.3x the minimum requirement.

Credicorp has delivered solid earnings since 2022 mainly thanks to consistently sound net interest margins resulting from increasing investment income, falling interest rates on funding, and BCP's strong competitiveness in the transactional deposits segment. In addition, the group's profitability has been stable due to sound insurance underwriting results and stable cost efficiencies despite continued investments in technology and marketing.

On the other hand, a few factors have somewhat limited higher profits--namely the challenging economic conditions in Peru that affected lending growth and cost of risk during part of 2023 and 2024, and the significant one-time expense in 2024 related to the Sartor case.

We expect Credicorp's profitability to remain stable in 2025 as retail lending growth resumes amid relatively stable interest rates and the cost of risk normalizes. We also expect low funding costs, operating efficiencies, and insurance results to persist. Innovative strategies will also continue supporting bussiness growth and profitability. We expect return on average equity to remain stable at 16%-18% this year.

‌Risk Position: Diversified Business Mix And Improving Asset Quality

Credicorp has good business diversification, conservative growth strategies, and manageable credit risks, in our view. Meanwhile, BCP's banking operations focus on lending, with no relevant concentrations among economic sectors or customers.

As in the overall Peruvian banking industry, BCP's asset quality has been improving in recent quarters thanks to more stable local economic conditions, higher liquidity amid the seventh pension funds withdrawal, and banks' conservative underwriting of new loans. Thus, Credicorp's NPL ratio decreased to 3.8% as of December 2024 (in line with the industry average) from 4.3% in December 2023. In 2023 and part of 2024, volatile political conditions and adverse climate events eroded the quality of microcredits, loans to small and midsize enterprises, and consumer credits to middle- and low-income borrowers.

Our base-case scenario assumes adequate macroeconomic fundamentals and recent improvements to new loan originations will help keep asset quality manageable in 2025, with NPLs stable at 3.5%-4.0%. Although risks around political uncertainties and climate events in Peru have receded recently, we will continue monitoring these factors. Credicorp's good credit loss provisions coverage and capitalization also help keep pressure on asset quality manageable.

Although dollarization in the Peruvian financial system has fallen in the past decade thanks to the central bank's measures, it remains high at about 30% of total loans, similar to Credicorp's 35%. However, we believe banks mostly offer dollar-denominated loans to borrowers with revenue in that currency, such as exporters, or others that count with other coverages such as financial derivatives on their debt.

‌Funding And Liquidity: Stable Funding Base And Healthy Liquidity

We think the group has adequate funding structure and liquidity, in line with our assesment on BCP. According to our calculations, Credicorp's stable funding ratio has been 110%-120% in recent years. Its broad liquid assets represented 34% of total assets, 54% of customer deposits, and 2.9x its short-term wholesale funding as of December 2024, indicating ample capacity to cover needs in 2025.

Customer deposits make up roughly 80% of Credicorp's consolidated funding base, and half are retail deposits, which we deem more stable, particularly during times of market distress. The funding base also includes interbank credit lines, market debt, and central bank repurchase agreements.

The NOHC's substantial liquidity support its creditworthiness. We expect the company to maintain high liquid unencumbered assets to meet its financial obligations on its own. In 2020, Credicorp issued $500 million (which matures June 2025) to enhance the cash cushion for potential contingencies. Its double leverage remains adequate at about 100%.

‌Support: No Uplift To The Group Credit Profile

Credicorp is 12.2% owned by the Romero family (based on floating shares), and the rest is held by private and institutional investors. Because of this, we base our rating on Credicorp on its own credit quality, excluding parental support.

Despite the relevance of banking operations, our rating on Credicorp doesn't include potential extraordinary government support. Although BCP would receive support, given its high systemic importance in Peru, we don't expect such support would be extended to the holding company.

‌Environmental, Social, And Governance

Environmental, social, and governance (ESG) factors have no material influence on our credit rating analysis of Credicorp, as with industry and domestic peers. Peru is somewhat exposed to natural disasters such as earthquakes, volcanic activity, landslides, and the El Niño climate pattern. However, Credicorp, like other domestic financial entities, has been able to keep credit and operating losses moderate during such conditions. The group has solid loan diversification with low exposure to the agriculture sector, which is vulnerable to these conditions.

The Peruvian economy depends to some extent on the commodity metals sector, which domestic banks generally don't directly finance. Still, banks are indirectly exposed to those sectors through the supply chain (suppliers, subcontractors, and employees who are also retail clients).

Credicorp operates in sectors that provide services and products supporting Peru's social development. It provides financing to micro, small, and midsize companies, which make up 21% of the lending portfolio. Also, insurance and pension operations play an important role in the society's welfare and economic stability. Yape contributes to increased financial inclusion in Peru.

Credicorp has a satisfactory oversight framework and corporate governance practices that comply with local regulations. The board of directors is well balanced to represent shareholders' interests adequately.

‌Key Statistics

Credicorp Ltd.--Key figures

Mil. PEN

2024

2023

2022

2021

2020

Adjusted assets

253,522

236,217

233,854

242,112

234,767

Customer loans (gross)

145,732

144,976

148,626

147,597

137,660

Adjusted common equity

29,173

27,629

25,775

21,967

17,292

Operating revenues

21,691

19,733

17,288

14,285

13,336

Noninterest expenses

10,347

9,262

8,621

7,740

7,127

Core earnings

5,623

4,960

4,745

3,672

398

PEN--Peruvian nuevo sol.

Credicorp Ltd.--Business position

(%)

2024

2023

2022

2021

2020

Total revenues from business line (currency in millions)

21,691

19,733

17,288

14,285

13,336

Commercial & retail banking/total revenues from business line

81.2

84.4

83.1

Corporate finance/total revenues from business line

4.7

6.0

7.4

Insurance activities/total revenues from business line

5.7

5.9

8.5

Asset management/total revenues from business line

8.4

2.8

2.9

Investment banking/total revenues from business line

4.7

6.0

7.4

Return on average common equity

16.5

15.8

16.7

13.9

1.4

Credicorp Ltd.--Capital and earnings

(%)

2024

2023

2022

2021

2020

Adjusted common equity/total adjusted capital

100.0

Net interest income/operating revenues

65.1

67.9

66.6

65.5

64.3

Fee income/operating revenues

18.7

19.3

21.1

24.5

21.8

Market-sensitive income/operating revenues

8.7

6.9

6.7

7.9

8.9

Cost to income ratio

47.7

46.9

49.9

54.2

53.4

Preprovision operating income/average assets

4.6

4.4

3.6

2.7

2.9

Core earnings/average managed assets

2.3

2.1

2.0

1.5

0.2

Credicorp Ltd.--Risk position

(%)

2024

2023

2022

2021

2020

Growth in customer loans

0.5

(2.5)

0.7

7.2

19.1

Total managed assets/adjusted common equity (x)

8.8

8.6

9.2

11.2

13.7

New loan loss provisions/average customer loans

2.4

2.5

1.2

0.9

4.7

Net charge-offs/average customer loans

2.4

2.0

1.5

1.8

0.8

Gross nonperforming assets/customer loans + other real estate owned

3.8

4.3

4.1

3.9

3.5

Loan loss reserves/gross nonperforming assets

142.9

132.6

128.8

148.8

205.3

Credicorp Ltd.--Funding and liquidity

(%)

2024

2023

2022

2021

2020

Core deposits/funding base

81.0

79.53

78.5

76.0

73.5

Customer loans (net)/customer deposits

85.1

92.6

95.8

92.5

89.7

Long-term funding ratio

87.1

85.3

86.1

89.5

86.5

Stable funding ratio

121.7

113.4

110.8

110.5

115.7

Short-term wholesale funding/funding base

15.0

17.1

15.8

11.8

15.1

Broad liquid assets/short-term wholesale funding (x)

2.9

2.3

2.6

2.5

Broad liquid assets/total assets

34.1

30.8

28.4

25.2

30.6

Broad liquid assets/customer deposits

54.0

49.8

45.7

41.0

51.1

Net broad liquid assets/short-term customer deposits

44.4

35.3

31.9

31.8

51.9

Short-term wholesale funding/total wholesale funding

78.8

83.5

73.8

49.3

56.8

‌Related Criteria

General Criteria: Hybrid Capital: Methodology And Assumptions, March 2, 2022

Criteria | Financial Institutions | General: Risk-Adjusted Capital Framework Methodology, April 30, 2024

Criteria | Financial Institutions | Banks: Banking Industry Country Risk Assessment Methodology And Assumptions, Dec. 9, 2021

Criteria | Financial Institutions | General: Financial Institutions Rating Methodology, Dec. 9, 2021

General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021

General Criteria: Group Rating Methodology, July 1, 2019

General Criteria: Ratings Above The Sovereign--Corporate And Government Ratings: Methodology And Assumptions, Nov. 19, 2013

General Criteria: Principles Of Credit Ratings, Feb. 16, 2011

‌Related Research

Banco de Credito del Peru, March 28, 2025

Banking Industry Country Risk Assessment: Peru, Dec. 17, 2024

Bulletin: Peru's Banking Economic Risk Trend Is Stabilizing On Sector's Resilience To Economic Adversities, Dec. 17, 2024

Mibanco - Banco de la Microempresa S.A., Aug. 9, 2024

Ratings Detail (as of May 06, 2025)* Credicorp Ltd.

Issuer Credit Rating BBB-/Stable/--

Senior Unsecured BBB-

Issuer Credit Ratings History

26-Apr-2024 BBB-/Stable/--

15-Oct-2021 BBB/Negative/--

08-Jun-2020 BBB/Stable/--

Sovereign Rating

Bermuda A+/Stable/A-1

Related Entities ASB Bank Corp.

Issuer Credit Rating BB+/Stable/B

Banco de Credito del Peru

Issuer Credit Rating BBB-/Stable/A-3

Senior Unsecured BBB-

Ratings Detail (as of May 06, 2025)*

Subordinated BB+

Banco de Credito del Peru, Panama Branch

Subordinated BB+

MiBanco Banco de La Microempresa S.A.

Issuer Credit Rating BBB-/Stable/A-3

*Unless otherwise noted, all ratings in this report are global scale ratings. S&P Global Ratings' credit ratings on the global scale are comparable across countries. S&P Global Ratings' credit ratings on a national scale are relative to obligors or obligations within that specific country. Issue and debt ratings could include debt guaranteed by another entity, and rated debt that an entity guarantees.

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Disclaimer

Credicorp Ltd. published this content on May 13, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 13, 2025 at 21:41 UTC.