Credicorp Ltd (BAP) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

November 4, 2022 10:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, everyone. I would like to welcome all of you to the Credicorp Ltd. Third Quarter 2022 Conference Call. A slide presentation will accompany today's webcast, which is available in the Investor section of Credicorp's website. Today's conference call is being recorded.

Now it is my pleasure to turn the conference over to Credicorp's IRO, Milagros Ciguenas, you may begin.

Milagros Ciguenas

Thank you, and good morning, everyone. Speaking on today's call will be Gianfranco Ferrari, our Chief Executive Officer; Francesca Raffo, Chief Innovation Officer; and Cesar Rios, our Chief Financial Officer. Participating in the Q&A session will also be Reynaldo Llosa, Chief Risk Officer; Diego Cavero, Head of Universal Banking; and Cesar Rivera, Head of Insurance and Pensions.

Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties. And I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or change events of circumstances. Gianfranco Ferrari will start the call discussing our strategic initiatives; followed by Francesca Raffo; and finally, Cesar Rios will comment on the macro environment in which we work our financial performance and provide an update on our outlook for 2022. Gianfranco, please go ahead.

Gianfranco Ferrari

Thank you, Milagros. Good morning, everyone. Thank you for joining us. We reported another solid quarter while executing on our strategic priorities. In terms of financial results, we continue to benefit from loan growth with disciplined pass-through of interest rate hike, a differentiated funding structure in which transactional deposits represent 56% of total funding and high transactional levels. As a result, we saw strong growth again in core income, which includes net interest income, fees and gains on FX transactions.

With improving results across all 4 of our business lines, we registered an ROE of 19.6% this quarter on the strength of a solid balance sheet and prudent risk management. While there is still downside risk to overall growth in the region, the fundamentals of Peru remains strong, and our estimate of GDP growth is now 2.8% for this year. Unfortunately, the continued political noise is having clear negative impact on Peru's growth opportunity and deterring public and private investment. This is also detracting from what we should be focusing on with respect to financial inclusion and poverty reduction.