Credicorp Stock

Credicorp Ltd. (Credicorp) operates as a financial services holding company.

The company’s principal activity is to coordinate and manage the business plans of its subsidiaries to implement a universal banking service mainly in Peru, Bolivia, Colombia, Chile, and Panama and to develop its Insurance and Pension and Investment Banking and Wealth Management businesses. Though the company primarily focuses on the aforementioned countries, it also makes limited investments in other countries in the same region. Credicorp’s main subsidiaries, BCP Stand-alone, Mibanco, Grupo Pacífico, Prima AFP, and Credicorp Capital Peru, are located in Peru and they offer banking and financial services. Furthermore, they are regulated by Peruvian laws and supervised by the Peruvian Financial Regulators.

The company operates primarily through its four lines of business (LoBs): Universal Banking, Microfinance, Insurance & Pensions, and Investment Banking & Wealth Management. Additionally, the company complements the operations of its LoBs through its innovation portfolio which is managed by the Innovation Committee at the Credicorp level.

Universal Banking

The company’s Universal Banking LoB, which focuses on lending and investment, is organized into retail banking activities, including its Individuals, SME-Business, SME-Pyme (small and micro firm) segments, which are carried out by BCP Stand-alone’s Retail Banking Group (RBG); wholesale banking activities, including its corporate and middle-market banking business segments, which are carried out by BCP Stand-alone’s Wholesale Banking Group (WBG); treasury activities, including asset and liabilities management (ALM); sales and trading; and foreign exchange and derivatives distribution, which are carried out by BCP Stand-alone’s Treasury function; and wholesale and retail banking activities in Bolivia, which are carried out by BCP Bolivia.

The majority of the company’s banking business is carried out through BCP Stand-alone, the leading bank in Peru by loans and deposits with close to 30% market share in loans and 32% market share in deposits according to the SBS. The company conducts banking activities in Bolivia through BCP Bolivia, a full-service commercial bank.

BCP Stand-alone

BCP Stand-alone’s operations are supervised and regulated by the SBS, SMV and the BCRP in Peru, by the Office of Financial Regulation of the state of Florida Department of Financial Services and the FED in the United States, and by the SBP in Panama. As of and for the year ended December 31, 2022, BCP Stand-alone represented 75.1% of the company’s total assets, and 70.4% of its equity attributable to Credicorp’s equity holders. SBS authorization is required for an AFP to begin operations.

BCP Stand-alone Strategy

The company offers a WOW experience in each touchpoint with its customers; and aims to provide solutions to their needs; and to support them at critical moments.

The company continually develops new products and services to serve its customers and provide financial solutions to more Peruvians. In addition, the company focuses on optimizing its current revenue streams to their highest potential.

The company optimizes its products and processes with an overall portfolio perspective. The company incorporates technology and innovation to offer the most cost-efficient option.

The company works to develop key internal capabilities, its enablers, that will help it to stay on course towards its ambitions.

The company seeks to bring value to the market by increasing the amount, quality, and speed in its tech releases. The company seeks to capture and exploit data in the most effective and intelligent manner.

The company uses internally developed initiatives to study its customer population (including customers and non-customers) by using non-traditional data sources, as well as data from its digital channels.

The company offers its tech talent the opportunity to develop leading edge capabilities in an environment in which it aims to lead in technology. The company continues to make progress in digitizing its customers by launching new functions and products in its mobile applications.

BCP Stand-alone’s Business Segments

Retail Banking Group (RBG)

As of December 31, 2022, retail banking-related loans represented 50.8% of BCP Stand-alone’s total loans, while retail banking-related deposits represented 64.5% of BCP Stand-alone’s total deposits.

Individuals’ business segments within RBG are:

Enalta

Enalta services include investment advisory, securities-based lending, financial planning, and day-to-day banking services, such as loans and cash accounts. In addition to regular branches, Enalta clients have access to exclusive branches (Lima and Arequipa), where they are able to make financial transactions in a secure, private space, as well as experience personalized advice of investment, insurance and loan experts who offer exclusive, invitation-only products. The Enalta segment has close to 50,000 clients.

Affluent

Customers in RBG’s Affluent segment receive a differentiated value proposition that includes dedicated remote customer service, such as specialized account managers, preferential service by tellers at branches, an exclusive call center number, and preferential interest rates on loans. Approximately 80% of these clients are serviced through specialized remote account managers responsible for improving per-client profitability and achieving long-term relationships through personalized service, cross-selling, and share-of-wallet strategies. The company offers greater personalized services than other banks in Peru, with more products and therefore a stronger value proposition. The Affluent segment has approximately 334,000 clients, of which 273,000 are served by 298 relationship managers.

Consumer Banking

The company’s Consumer Banking segment is in charge of developing strategies for the retail customers who are not included in affluent banking or small business banking. Its customer base consists of approximately 10.3 million (only considers clients with at least one product) medium-to-low-income individuals. Consumer Banking focuses on customers who receive their payroll through BCP Stand-alone (which represents around 1.4 million clients). Its strategies vary from basic acquisition of new accounts for wage-earners with special terms regarding fees and interest rates, to more sophisticated, aggressive cross-sell and retention programs that may include non-banking benefits (such as access to discounts on non-banking products) and access to payroll advances.

The main products offered to individuals are:

Mortgage

According to the SBS and the Association of Banks of Perú (Asociación de Bancos del Peru or ASBANC by its Spanish initials), as of December 31, 2022, BCP Stand-alone was the largest mortgage lender in Peru.

One of the product lines responsible for growth in BCP Stand-alone’s mortgage lending to low-income customer is loans funded by the credit program of the Peruvian Housing Development Bank (Fondo MiVivienda). The Fondo MiVivienda credit program provides government-funded loans with down payment aid for the purchase of properties valued up to S/464,200.

Credit Card and Consumer Loans

At BCP Stand-alone, the company focuses on improving the shopping experience of its cardholders. In 2022, the company launched Apple Pay with its VISA debit and credit cards, it promoted BCP Mobile Payments, and it carried out a recurring educational campaign to educate its customers on how to enable/disable the option on their mobile banking application so that they can safely make online purchases.

At the beginning of 2022, the company focuses on increasing its product offering to allow more customers to start building a credit record and be included in the financial system. To reach these objectives, the company offered 157,947 customers low credit limits and gradually increased limits for customers with good payment behavior.

The company also improved its value proposition by using an elasticity model to set interest rates.

The SME segments within RBG are:

SME-Pyme

The SME-Pyme segment served approximately 2.0 million clients as of December 31, 2022. The increase in the number of clients is due to a migration of clients from Consumer Banking due to a new definition of individuals that qualify as SME-Pyme. The SME-Pyme credit portfolio totaled S/19,243 million as of December 31, 2022, with the decrease due mainly to the repayment of Reactiva Peru (or Reactiva) loans that had been issued by the Peruvian government during the COVID-19 pandemic and the small credit portfolio of clients that migrated from Consumer Banking. Additionally, the company’s SME-Pyme segment had a market share of 20.0% in Peru as of December 2022, according to the SBS (Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones or Superintendence of Banks, Insurance and Pension Funds – Peru). In 2022, the company continued to serve its clients while digitizing its processes and systems.

SME-Business

The SME-Business segment served approximately 11,841 clients as of December 31, 2022. In 2022, SME-Business experienced a reduction in loans and deposits.

Distribution Channels

Digital channels

Mobile Banking: In 2022, more than 452.9 million monetary transactions were channeled through mobile banking at BCP Stand-alone, which represented growth of 21.34% compared to the number of such transactions in 2021. This growth was driven by client migration to digital channels.

Internet Banking: Transactions through Internet banking at BCP Stand-alone grew 10.07% from 2021 to 2022, with a total of 45.0 million monetary transactions in 2022.

Yape: Yape registered higher growth in monetary transactions than any of the company’s other channels.

Cocos y Lucas: In December 2019, BCP Stand-alone launched its platform to change soles and dollars, Cocos y Lucas. This offered clients a new alternative for exchange transactions. Transactions through Internet banking at Cocos y Lucas grew 5.8% from 2021 to 2022, with a total of 427 thousand FX transactions, which represented S/879.6 million transacted in 2022.

Self-Service Channels

ATMs: In 2022, BCP Stand-alone’s Automated Teller Machine (ATM) monetary transactions increased 10.39% from 2021 levels. BCP Stand-alone increased its ATM pool by 61 from the end of 2021 to close 2022 at 2,283 units.

Kioskos BCP: Kioskos BCP are digital self-service platforms at which customers can open savings accounts and/or pick up debit cards. Approximately 8.5 million transactions were conducted through Kioskos BCP in 2022.

Physical Channels

BCP Agentes: BCP Agentes are legally separated points of contact at allied Small and Medium Enterprise (SMEs) with which the company contracts to enable its clients to carry out certain transactions. BCP Agentes continue to constitute a highly effective channel for providing services to the company’s clients given their wide availability in Peru. At the end of 2022, BCP Stand-alone had 9,580 BCP Agentes, which reflected an increase of 1,526 BCP Agentes. BCP Agentes conducted 411.6 million monetary transactions in 2022.

Retail Banking Innovations

Yape

In Peru, the company offers Yape, an app used to make money transfers and payments through a cell phone. Yape users can send or receive money transfers to their bank accounts linked to their cell phone number and/or a unique QR code, make cell phone credit recharges (Mobile Top-Ups), pay for basic services, request credit, view promotions, and other functions.

The company intends to make Yape into Peruvians’ go-to app. To achieve this, Yape has three main ambitions. The first ambition is to become the main payment network in Peru, competing with cash. To accomplish this, Yape focuses on small-amount payments that are otherwise made in cash. Yape’s second ambition is to be present in its users’ day-to-day lives. Yape’s third ambition is to seek to provide solutions for Yape users’ financial needs. Yape started this journey with the launch of microloans in August 2022.

Yape is Credicorp’s main vehicle to support financial inclusion for the almost two-thirds of Peruvians which today do not have access to banking services in the country. For this purpose, the company launched Yapecard, which is a digital account enrolled directly from Yape, in May 2020. Peruvian citizens 18 years of age or older can register with an ID and use Yape without previously owning a BCP Stand-alone bank account (subject to meeting the bank’s compliance criteria). During 2022, Yapecard was a key contributor in the distribution and payment of the Bono 600 and Bono Yanapay bonuses given by the Peruvian government to more than 290,000 Peruvians who were not users of the formal banking system. Yape has also carried out financial education campaigns in seven regions of Peru, allowing the company to reach more than 50,000 Peruvians.

As of December 2022, Yape had more than 11 million users, 160 million monthly average transactions, S/66 billion transferred annually, and more than 2.2 million small businesses affiliated. More than 70% (a 30% increase compared to 2021) of Yape clients use Yape regularly for an average of 19 transactions per month (a 58% increase compared to 2021). The average monthly number of new Yape users grew from 288,451 in 2021 to 300,000 in 2022, of whom more than 200,000 were already BCP Stand-alone clients and approximately 90,000 enrolled with a Yapecard.

In late 2021, Yape started its monetization process by launching features that solve users’ day-to-day needs with two main objectives at the core of its design: simplicity (always keeping the users’ journey and interface simple and easy) and value (all features adding tangible value to the users and the organization). To achieve these main objectives, during 2022, Yape grew its Mobile Top-Ups business, which was launched in late 2021 to allow users to buy cell phone credit from the Yape app, and on which more than 9.5 million monthly transactions were made in 2022, to become the main top-ups channel for BCP Stand-alone (with a share of 81% of BCP Stand-alone’s mobile top-ups in 2022). The Mobile Top-Ups feature allows Yape to capture income as a share of the interchange fee charged by payment facilitators to merchants. BCP Stand-alone’s other top-ups channels include Mobile Banking (12% of BCP Stand-alone’s mobile top-ups in 2022) and BCP Agentes (7% share).

Yape QR business payments, a feature launched in July 2021, has experienced remarkable growth in just a short period of time. In December 2022, the Yape QR business payments service recorded S/102.7 million in Gross Payment Volume (GPV) and 2.7 million transactions, reflecting significant growth from December 2021, which saw GPV of S/10.4 million and 253,909 transactions. These figures demonstrate a monthly average growth rate of 21% for GPV and 22% for transactions from December 2021 to December 2022, Yape QR business payments had a monthly average of S/40.3 million in GPV for 2022, an increase of 486% from the monthly average of S/6.9 million in the last six months of 2021. In December 2022, more than 3.4 million Yape clients used one or more of these new features.

Wholesale Banking Group (WBG)

As of December 31, 2022, wholesale banking loans represented 46.8% of BCP Stand-alone’s total loans, while wholesale banking deposits represented 33.6% of BCP Stand-alone’s total deposits. WBG competes with local and foreign banks in Peru. The WBG provides its customers with cash management solutions, short- and medium-term loans in local and foreign currencies, foreign trade-related financing, and lease and project financing.

WBG is divided into the following divisions and support areas:

Corporate and International Division (CID)

The CID served 3,101 clients as of December 31, 2022. The CID provides financing for capital expenditures and investments, sales, international trade, and inventories. It offers medium- and long-term financing, financial leases, and project financing and includes the following subdivisions:

Corporate banking subdivision, which provides loans and other credit and financial services. This subdivision focuses on serving large companies in Peru.

International banking and leasing subdivision, which manages relationships with financial institutions (locally and abroad) and provides trade products, international operational services, and financial leasing products.

BCP Stand-alone’s Correspondent Banking Unit focuses on obtaining and providing short-term funding for international trade, as well as medium-term lines of credit funded by international commercial banks and other countries’ governmental institutions. This unit also earns fees by confirming letters of credit and guarantees issued by international banks and by providing other international payment and trade finance services. The unit also provides funding to some other Latin American banks which send their international trade and guarantee flows to Peru through BCP Stand-alone. BCP Stand-alone’s Correspondent Banking Unit also promotes international trade activities with its local clients by structuring trade products and services, organizing and sponsoring conferences, and advising customers through a wide range of trade products.

Through the CID, BCP Stand-alone assists its corporate clients with financial services, cash management solutions, and short- and medium-term financing. BCP Stand-alone’s corporate banking loans, measured in average daily balances and including Reactiva program loans.

Middle-Market Banking Division (MMD)

The MMD served 7,427clients as of October 31, 2022.

The MMD serves mid-sized companies, organizations, and institutions. MMD considers a mix of different characteristics in identifying potential clients, such as annual revenues, financial leverage, overall debt, product penetration, and complexity.

MMD focuses principally on serving for-profit and non-profit organizations, state-owned companies, and other significant institutions.

Furthermore, the Institutional Banking Unit, which operates within the MMD, serves 1,586 clients throughout Peru. In Lima, a specialized MMD team serves governmental entities, educational institutions, religious organizations, international bodies, non-governmental organizations, civil associations, and regulated entities, such as microfinance institutions, insurance companies, pension funds, and other private funds. BCP Stand-alone has also deployed specialized MMD teams in the largest provinces in Peru. In the smaller provinces in Peru, MMD is supported by the Retail Banking Division team in attending to the company’s customers' needs.

The cash management and transactional services subdivision, which operates within the MMD, develops products and services to support clients’ daily cash management activities, collections payments, and investments, among others.

The products offered to middle-market clients are similar to those offered to corporate banking clients. The major types of products are:

Revolving credit lines to finance working capital needs and international trade financing;

Standby letters of credit and bond guarantees;

Structured long-term and medium-term financing, through loans or financial leasing; and

Cash management, transactional products, and electronic banking.

WBG Transformation

As part of WBG's transformation process, the company created Tribes that, through the use of the agile methodology, allow it to better understand customer pain points and create new products that help it solve them. These Tribes are:

Tribe of Business Credit Products: Giving their business clients efficient financial solutions through an outstanding and unique experience that satisfies their main needs.

Tribe of Transactional Products for Businesses: Giving their business clients integral solutions that simplify their cash management processes and generate customer loyalty.

Tribe of Digital Platforms for Businesses: Giving their business clients an outstanding and unique digital experience to become their ‘top

During 2022, the company deployed campaigns to attract new users and worked closely with Yape to enable its application as an additional channel for its Wholesale Banking clients to collect payments from their customers.

Update of the company’s online banking platform for companies named Office Banking, aiming to deliver the best digital platform in the local financial market that allows it to accompany its clients in all their journeys, offering a digital end to end solution with 24/7 accessibility to its product and services portfolio.

The company focuses on creating an interconnected services network that allows users to satisfy multiple needs through a single integrated digital experience.

Sustainable Finance

WBG is committed to the sustainability objectives of Credicorp, which intends to create a more sustainable and inclusive economy. In 2022, the company offered green financing alternatives to its WBG clients, such as green loans and eco-factoring credit lines, which are working capital credit lines to finance the accounts payable of sustainable suppliers with a special rate with the aims of empowering them to finance projects within particular sectors (specifically, renewable energy, clean transportation, green building and sustainable water resource management), promoting seeking for sustainable utilization of natural resources in their operations and promoting formalization of SMEs. The company has granted six green loans for sustainable development projects and initiatives and conducted ESG financing training for the commercial team of the WBG.

Treasury

BCP Stand-alone’s Treasury function is divided into four primary units, such as the ALM Group, the Sales and Trading Unit, the Foreign Exchange and Derivatives Distribution Unit, and the Treasury Tribe.

ALM Group

The ALM Group is responsible for managing BCP Stand-alone’s statement of financial position and for taking reasonable interest rate and liquidity risks under the oversight of the company’s Asset and Liabilities Committee (ALCO). The ALM Group is also responsible for maintaining the company’s investment portfolio, Liquidity Coverage Ratio (LCR) and Capital Management. In addition, the ALM Group participates in money and debt capital markets, oversees reserve requirements, and manages BCP Stand-alone’s liquidity. The ALM Group has been active in auctions held by the BCRP for certificates of deposit, as well as in financing its funding needs, interbank transactions, guaranteed negotiable notes, and other instruments.

Sales and Trading Unit

BCP Stand-alone’s Sales and Trading Unit manages both foreign exchange and interest rate risk exposure and investments for proprietary positions purposes. The managed risk originates mainly from client liquidity transactions and from open proprietary positions. Market risk exposures and limits are independently defined by the Market Risk Unit and closely monitored by the Treasury Risk Unit. Additionally, an Investor Sales team within the Sales and Trading Unit actively reaches out to institutional investors, providing direct access to market maker prices and liquidity.

Foreign Exchange: The Foreign Exchange Desk provides liquidity for spot and forward transactions for its clients and other market makers in the US Dollar-Peruvian Soles (USDPEN), other Latin-American currencies, and G-10 currencies. The Foreign Exchange Trading Desk also manages foreign exchange volatility book for USDPEN. Additionally, the desk participates in foreign exchange transactions related to different instruments designed by the BCRP to smooth out any currency volatility.

Interest Rates (IR): The Interest Rates Desk manages the investments and risk originated from both fixed-income and swap transactions from clients and from proprietary positions. BCP Stand-alone’s fixed-income portfolio consists mainly of government bonds (both in local and hard currency) from Latin-American countries and the U.S. Treasuries. The Interest Rates Desk is one of the main liquidity providers in the Peruvian government bond market, where it is a leading participant of the Market Maker Program of the Ministry of Economy and Finance of Peru (MEF).

Foreign Exchange and Derivatives Distribution Unit

BCP Stand-alone’s Foreign Exchange and Derivatives Distribution Unit helps companies with their foreign exchange needs (spot and hedging) through its Distribution Desk. The broad portfolio of foreign exchange products provided to its client base has allowed the Foreign Exchange and Derivatives Distribution Unit to position itself as a benchmark in the foreign exchange business in the Peruvian market.

Treasury Tribe

The Treasury Tribe is responsible for providing technological support to the different units that make up the Treasury function through the enabling of platforms and technological tools; as well as, through the implementation of different initiatives that allow business scalability. The Tribe is made up of six squads — five for the development of initiatives related to products (Exchange, Foreign Exchange & Derivatives, Investments & Funding, Liquidity and ALM) and one for shared requirements across those products.

Role in LIBOR Transition

The Treasury team has been leading the transition process from LIBOR to other references rates. During this process, the group has measured the exposure and risks regarding the transition in terms of products, clients, funding, contracts, training, infrastructure, and other areas.

BCP Stand-alone has adopted most of the recommendations given by the ARRC convened by the FED. Specifically, Treasury and commercial bank products have been conformed to use SOFR and Term SOFR, administrated by CME Group, as the main alternative floating reference rates. These new alternative rates have been implemented in BCP Stand-alone’s systems that register and valuate contracts. BCP Stand-alone also has adopted the Fallbacks Protocol of the International Swaps and Derivatives Association (ISDA), amended legacy contracts, and advised its clients about changes in the market and current trends. The Treasury team has also trained the commercial teams and kept them up to date, in order to offer the most accurate information to BCP Stand-alone’s clients.

BCP Bolivia

BCP Bolivia’s activities include wholesale banking and retail banking. As of December 31, 2022, BCP Bolivia’s loans represented approximately 8.3% of total loans in the Bolivian banking system, and its deposits represented approximately 8.3% of total deposits in the Bolivian banking system.

BCP Bolivia Strategy

Distribution Channels

Digital Channels

Soli: As part of the company’s commitment to increasing access to banking products and services, BCP Bolivia fosters the development of an ecosystem for digital payments with the mobile app Soli, launched in 2016, which at the end of 2022 had 442,000 users.

Mobile banking: Monetary transactions executed through mobile banking represented 25% of BCP Bolivia’s total monetary transactions in 2022.

Self-Service Channels

ATMs: BCP Bolivia had 312 units on December 31, 2022, which accounted for 20% of its total monetary transaction volume in 2022.

Physical Channels

BCP Agentes: BCP Bolivia added 336 new BCP Agentes in 2022, bringing the total number of BCP Agentes to 1,355 as of December 31, 2022. Monetary transactions through BCP Agentes represented 17% of BCP Bolivia’s total monetary transactions in 2022 (up from 19% in 2021).

BCP Bolivia ESG Program

BCP Bolivia’s ESG program has three strategic pillars: financial inclusion, which is implemented mainly through technological development and digital channels that allow users to carry out most of their transactions without having to go to a bank; the company’s main financial inclusion project in Bolivia is Soli, its mobile wallet; financial education, an initiative that includes the projects BCP Customer Academy and Financial Education for Entrepreneurial Women; and its commitment with Gender Equality, which led it to reduce the gender gap.

Microfinance

Microfinance

The Microfinance LoB focuses on offering commercial banking activities and specialized financial services to small and micro business clients in Peru and Colombia through Mibanco. Mibanco Colombia was created in October 2020 after a reverse merger between Edyficar S.A.S. (known commercially as Encumbra) and Bancompartir (the surviving entity). According to the Economist, the Mibanco franchise is the leading Microfinance group in the Americas and the second largest private microfinance bank in the world with a loan portfolio of S/15,317 million and approximately 1.9 million clients, representing around 7.9% of Credicorp’s total assets and 10.4% of the equity attributable to Credicorp’s equity holders. As of December 31, 2022, Mibanco Peru represented around 92.0% of the total loans of the Microfinance LoB.

Transformation Strategy

Mibanco’s transformation strategy focuses on migrating its traditional business model, which is intensive in people and offices, to a multichannel hybrid model supported by data and analytics.

This new approach will be enabled by a combination of four key areas developed by the best talent, such as data and analytics; risk models; cybersecurity; and IT architecture.

The company deploying Mibanco’s transformation strategy, which has resulted in three primary outcomes: increased productivity and capacity to serve more clients, as demonstrated by an increase of approximately 6.6% from December 31, 2021 to December 31, 2022, in the number of clients served per relationship manager to 179 and an increase of approximately 6.3% over the same period, in the number of loans disbursed per relationship manager; enhanced experiences for its clients and its colleagues, as demonstrated by increases in both its client NPS and employee NPS, which reached 34% and 60%, respectively in 2022 (compared to 31% and 53% in 2021, respectively); and sustainable business growth.

Mibanco Peru

This segmentation is based on an analysis that considers multiple factors, such as business size and client income, sales, and/or total debt, among others, as well as the client’s affiliation with other companies or groups and their credit ratings.

Distribution Channels

Digital Channels

Mibanco Mobile App: In 2022, 10.7 million transactions were processed through Mibanco’s Mobile App. Additionally, 195,182 loans were requested through the app in 2022 (S/387.1 million in disbursements in 2022).

Mibanco Web: Mibanco’s web page processed 1.4 million transactions in 2022.

Yape: Since June 2020, Mibanco’s clients have been able to create a Yape account with their bank account. As of 2022, 180,205 Yape users have a Mibanco bank account linked to their Yape account.

Yevo: Yevo, the company’s digital community for entrepreneurs, had 236,901 affiliates at the end of 2022, and offers these affiliates tools to boost their business, financial services, and education.

Physical Channels

Agentes Kasnet: As part of the services offered to its clients, Mibanco has an agreement with Agentes Kasnet, a network of Multibank correspondents in Peru. At the end of 2022, 14,380 Agentes Kasnet were available for Mibanco clients.

Mibanco Colombia

This segmentation is based on an analysis that considers multiple factors, such as business size, client income, assets and/or total debt, among others, as well as the client’s affiliation with other companies or groups and their credit ratings.

Insurance and Pensions

Grupo Pacífico

The company conducts its insurance business exclusively through Grupo Pacífico, which operates in Peru and Bolivia and is the second-largest Peruvian insurance company by written premiums in 2022, according to the SBS and Peru’s National Health Superintendence (Superintendencia Nacional de Salud or SUSALUD by its Spanish Initials). Grupo Pacífico provides a broad range of insurance products focusing on three business areas: P&C insurance, life insurance, and corporate health insurance and medical services. Grupo Pacífico, like other major Peruvian insurance companies, sells its products both directly (through its own sales force) and through independent brokers, bancassurance, and sponsors.

Grupo Pacífico’s strategy focuses on striving to achieve three pillars, such as protecting more customers by developing new products and distribution channels and taking advantage of its Credicorp channels; surprising its customers with an extraordinary journey and by putting them in the center of everything it does; and to keep leading the insurance market in efficiency so that it can offer the best protection to its customers and value to all its stakeholders.

Grupo Pacífico’s strategy is propelled by the development of key internal enablers:

Agile Transformation: The company’s transformation continued to progress in 2022. As of the end of 2022, Grupo Pacífico had finished implementing its agile operating model at scale and 38% of its employees were working under that model.

Data Analytics: The company has started the implementation of the core elements of its data lake, a centralized data repository designed to host, process, and protect great amounts of data, that can be later used for business development through analytical models. In addition, the company changed the way of working, by going from an analytics team that works in a silo to an analytics specialist that sits inside multiple business teams.

Strategic Axes

Digitalization

In 2022, Credicorp’s digital premiums, which are the premiums sold through the company’s digital channels.

The company also seeks to automate its processes. The company continues to scale its self-service claim process for its retail home insurance product, a claim process that is supported by artificial intelligence software. The company also started to pilot the use of this technology in the auto claim process.

Customer Centric

On the axis of customer-centric services, use of its app, Mi Espacio Pacífico, continues to grow, with an increase of 26% in the number of registered users at year-end 2022 compared to year-end 2021. In addition, the company’s chatbot channel, Vera, resolved over 48,000 customer requests, such as policy downloads, requests for roadside assistance and requests for policy quotes, in 2022.

During 2022, Grupo Pacífico continued to focus on delivering a great experience to its customers and aimed to have the best customer experience in the Peruvian insurance sector as measured by the company’s NPS.

Credicorp Channels

Grupo Pacífico’s digitalization and customer experience are both supported by the development of its digital customer-centric services and taking advantage of the reach provided by Credicorp channels.

Additionally, Grupo Pacifico's focus on leveraging Credicorp channels continues to have positive results.

Distribution Channels

Digital Channels

Mi Espacio Pacífico App: In 2022, 345 thousand clients used Grupo Pacífico’s app.

Pacífico Web: In 2022, over 8.1 million visits were made to Grupo Pacífico’s website.

Physical Channels

Risk Rating

Grupo Pacífico managed to reaffirm the solidity and solvency of the company, maintaining its international credit ratings despite the Peruvian context.

Prima AFP

Credicorp conducts its pension fund business through Prima AFP, the second largest participant in the pensions business in Peru, as measured by funds, affiliates and collections, according to the SBS. Prima AFP operates through individual capitalization accounts and provides its affiliates with retirement, disability, survival, and burial benefits. For this purpose, Prima AFP collects affiliates’ mandatory and voluntary contributions, and invests the funds in local and foreign financial markets. The funds that Prima AFP holds in custody for its affiliates are non-attachable and are autonomous assets, which are not affected by Prima AFP’s financial results. Prima AFP offers four types of funds, which differ by risk profile and the asset classes in which they invest. The investment and risk management policies are defined by internal committees and supervised by the SBS and the SMV.

Distribution Channels

Digital Channels

Prima AFP’s App: Approximately 5 million sessions were initiated in Prima AFP’s mobile app in 2022.

Prima AFP’s Web: In 2022, more than 1 million sessions were initiated through Prima AFP’s web page, which was a similar total to 2021.

Physical Channels

Investment Banking & Wealth Management

Credicorp Capital carries out its investment banking and wealth management operations in the Latin America region through Credicorp Capital Peru, Credicorp Capital Colombia, Credicorp Capital Chile, Credicorp Capital US, CC Asset Management Mexico, and ASB Bank Corp., which are active in the Peruvian, Colombian and Chilean markets, respectively. ASB Bank Corp. is also regulated and holds a securities broker license issued by the Panama SMV that enables the entity to act as securities broker, manager, and custodian. ASB Bank Corp., a subsidiary of ASHC, is regulated by the SBP, registered under an international banking license issued by the SBP, in accordance with Law Decree No. 9 of February 26, 1998, as amended.

In 2018, the company created the Investment Banking & Wealth Management LoB by adding BCP Stand-alone’s Wealth Management Division and ASB to Credicorp Capital to operate as a single regional wealth management model within one business unit. This new structure facilitates sharing of best practices and delivery of a regional value proposition, with ASB supporting all wealth management business units and clients (instead of focusing on Peru-based wealth management customers).

With operations in Chile, Peru, Colombia, Panama, Mexico and the United States, the company is consolidating its leadership position through five main business units: Asset Management, Capital Markets, Corporate Finance, Wealth Management and Trust Services. ASB Bank Corp. manages its banking operation in Panama that supports its Wealth Management business, consolidates some of its Capital Markets Trading Strategies and increasingly provides its balance sheet to support its Corporate Finance business unit.

Asset Management

Through its regional platform, the company’s Asset Management business unit offers a wide array of products, including mutual funds, alternative funds, and portfolio management, as well as structured products, to a broad base of clients, including those in its retail, private and high-net-worth, corporate, and institutional segments. The company also acts as a third-party distributor in Latin America, representing other global asset managers.

Capital Markets

The company’s capital markets business unit has an active role in secondary markets, particularly with equity and fixed-income products, as well as exchange rate products and derivatives. The company’s participation in the placement of equity and debt instruments, vis-à-vis its corporate finance team, is also active, especially for corporate issuances in local markets. The company also has proprietary investments, with trading books managed in Peru, Colombia, Chile, and Panama.

Corporate Finance

The company’s corporate finance business unit provides advisory services for the structuring of mid- and long-term financing and the structuring and placement of equity and fixed-income instruments in capital markets. It also offers a wide range of financial advisory services and advisory services for mergers and acquisitions.

Wealth Management

The company runs a financial and investment advisory model tailored to high-net-worth and ultra-high-net-worth individuals under a comprehensive value proposition where it offers its clients a broad range of products (including investment advisory, investment management, long-term financial planning, banking services, and credit solutions), an expert advisory model (in which a single relationship manager coordinates the various financial services for their clients) and a multi-platform network that provides access to local, regional and international markets, including the United States.

Trust Services

Through its subsidiaries in Colombia and Peru, the company offers products and services focused on the management and future planning of its retail and institutional client’s cash flows. The company manages family, corporate, and real estate trusts led by an advisory and structuring expert commercial team, complemented by legal support with specialized knowledge in this business.

Digital Channels

Via BCP: BCP Stand-alone’s web channel, through which its clients can view their investments in mutual funds and in the stock market. Likewise, through Via BCP, clients can perform mutual funds subscription and redemption operations.

Tyba: The company’s online application that operates as a digital broker in Colombia and Peru, allowing clients to manage their personal finances, making investments according to their own risk profile and tailored to their own investment plans. It provides a simple and secure means for clients to access investment products in a digital platform.

CC Invest: Online web and mobile app investment platform that allows the company’s clients in Peru, Colombia and Chile to invest in globally diversified portfolios in the most simple and efficient way.

Physical Channels and Telephone

Offices: Credicorp Capital’s clients can be served through its regional offices, which are distributed across Peru, Colombia, and Chile, and also has points of contact in Mexico, the United States and Panama. Additionally, BCP clients can access some of Credicorp Capital’s investment products through its network of agencies across Peru.

Call center: Through a specialized team, the company serves and advises its Capital Market clients in the intermediation of fixed-income and variable-income securities in Peru, Colombia, and Chile.

Corporate Compliance and Ethics

The company’s Compliance and Ethics management system is a key enabler in Credicorp's sustainability framework. The company seeks to meet the needs both of its businesses and stakeholders through: ensuring the clarity of the terms and conditions of financial products and services, providing a framework and monitoring it to ensure a good work environment and equal opportunities for all employees, and ensuring responsibility and integrity through all its businesses.

Credicorp and all its subsidiaries, using a comprehensive approach based on international best practices and its principles and ethical values, have established 11 corporate compliance and ethics programs that cover local and international regulations and mitigate conduct risks by encouraging ethical behavior in order to protect the reputation of the company. These programs are the following: anti-money laundering and countering the financing of terrorism (AML/CFT); financial stability; fiscal transparency (FATCA & CRS); regulatory compliance; ethics and conduct; anti-corruption; market abuse prevention; personal data protection; occupational safety and health; market conduct; and antitrust

Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT)

Through this program, the company manages all the procedures and policies related to the risks of entrance or movement of money from illicit activities. In 2022, the company continued to face the presence of new digital businesses. In this increasingly dynamic context, the company has adapted its customer experience and services to all its stakeholders with effective policies, guidelines, and robust AML controls, in order to meet the new demands that are defined by an intensive use of technology as a preferred form of connection.

Furthermore, all of Credicorp’s subsidiaries have continued to manage the AML/CFT program based on KRIs (Key Risk Indicators), aiming for a solid governance, searching for efficiencies, identifying automation opportunities, and using technology and analytics.

In 2023, the company will continue to automate its critical processes, in addition to covering emerging risks related to new products and business models, thus working to ensure responsible business at Credicorp.

Financial Stability

The company’s Financial Stability Program supports its compliance with the applicable regulations derived from the U.S. Dodd-Frank, Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the European Market Infrastructure Regulation (EMIR) and the European Bank Recovery and Resolution Directive. During 2021, the company focused on carrying out actions for the exchange of information with counterparts regarding the regulations that make up the Financial Stability Program. The company also took actions to comply with the requirements of the Initial Margin Rules of the Financial Market Infrastructure Act, which require financial counterparties and large non-financial counterparties with a volume of non-centrally cleared derivatives (AANA) above certain phase-in thresholds to exchange bilateral initial margin from the applicable compliance date.

Fiscal Transparency

The Fiscal Transparency Unit within Credicorp oversees the implementation of two international regulations, FATCA and the OECD’s CRS, which are the global standards for the automatic exchange of financial information between governments and contributes to the global effort against tax evasion and increased collection through exchange of financial information among participating countries. These standards apply to all of Credicorp’s financial institutions. Understanding FATCA and CRS requirements and having a comprehensive tax transparency compliance program are essential for financial institutions to limit non-compliance risk and meet the obligations set out by applicable country Intergovernmental Agreements (IGAs) with the U.S. Internal Revenue Service (IRS) and the commitments signed with the OECD. During 2022, Credicorp sent more than 75 FATCA and CRS reports (compared to 80 reports in 2021) to the tax authorities of a total of eight countries, which demonstrates the company’s commitment to international standards for the prevention of tax evasion. This process begins at the moment that the customer is enrolled in the company’s systems and the related Know Your Customer due diligence processes are commenced.

FATCA at Credicorp: Credicorp has investment vehicles located in countries under IGA Model I (Bahamas, Luxembourg, Colombia, the Cayman Islands and Panama), IGA Model II (Bermuda and Chile), and General Regulation (Bolivia, Mexico and EE.UU.). Obligations include complying with client due diligence, client annual reporting and financial counterparties exchange of status information. Peruvian financial institutions comply with all the obligations of agreement in substance while the government and the U.S. Department of the Treasury continue with the negotiations to sign an IGA Model I.

CRS at Credicorp: Credicorp has financial institutions located in countries that started CRS implementation in 2016 (Colombia, the Cayman Islands and Luxembourg), 2017 (Panama and Chile), 2019 (Peru). In the countries that adopted CRS in 2016 and 2017, the company’s main activities will continue to focus on keeping the information of its clients and counterparts updated, sending annual reports to tax authorities and completing the certifications and audits according to the laws applicable to each country.

In Peru, the implementation of CRS is part of the mandatory requirements of the OECD to grant full membership status to Peru. Therefore, all Credicorp financial institutions in Peru, including BCP, Grupo Pacífico, Mibanco, Prima AFP, Credicorp Capital Bolsa, Credicorp Capital Fondos, and Credicorp Capital Titulizadora, are obliged to comply. Credicorp Capital LLC. provides brokerage services through a clearing agreement with Pershing, LLC. As of November 30, 2021, there were five registered principals at Credicorp Capital LLC., all of whom are Series 7 and Series 24 licensed. At the trading desk, all registered representatives maintain their Series 7 and Series 63 licenses.

Subsidiaries

The company’s eight main operating subsidiaries are:

Within Universal Banking: Banco de Credito del Perú S.A. (BCP Stand-alone), a Peruvian financial institution; and Banco de Credito de Bolivia S.A. (BCP Bolivia) a commercial bank that operates in Bolivia and that it holds through Inversiones Credicorp Bolivia S.A. (ICBSA);

Within Microfinance: Mibanco, Banco de la Microempresa S.A. (Mibanco), a Peruvian banking entity oriented toward the micro and small business sector; and Mibanco – Banco de la Microempresa de Colombia S.A. (Mibanco Colombia), which resulted from the merger between Banco Compartir S.A. (Bancompartir) and Edyficar S.A.S. (Encumbra), which the company holds through Credicorp Holding Colombia S.A.S.;

Within Insurance and Pensions: Pacífico Compañía de Seguros y Reaseguros S.A. (Pacífico Seguros and, together with its consolidated subsidiaries, Grupo Pacífico), an entity that contracts and manages all types of general risk and life insurance, reinsurance and property investment and financial operations; and Prima AFP, a private pension fund; and

Finally, within Investment Banking and Wealth Management: Credicorp Capital Ltd. (together with its subsidiaries), and ASB Bank Corp., resulted from the merger between ASB Bank Corp. and Atlantic Security Bank, which the company holds through Atlantic Security Holding Corporation (ASHC).

Supervision and Regulation

At Credicorp and its subsidiaries, the company is committed to complying and following external legal mandates set forth by regulatory entities, such as the SBS or the relevant governments.

At Credicorp and its subsidiaries, the company is aligned with the United Nations SDGs, adopting a zero-tolerance attitude towards corruption and applying policies to promote a fair and equitable environment, in order to encourage changes in society and value relationships based on integrity.

In this sense, the company is respectful of the regulations aimed at strengthening prevention and investigation mechanisms that contribute to the fight against corruption, such as Law 30424 in Peru with its regulations and amendments, the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act. At Credicorp, there is no tolerance for corruption.

Credicorp's Corporate Policy to Prevent Corruption and Bribery provides guidelines to all Credicorp subsidiaries to ensure transparent relationships with their stakeholders, minimize related risks, and comply with local and international regulations.

Furthermore, Credicorp Capital Colombia confirmed its compliance with the Asset Manager Code of the CFA Institute, being the fifth subsidiary of Credicorp to comply with the Code, along with Prima AFP, Credicorp Capital Peru, Pacífico Seguros and Credicorp Capital Chile.

Credicorp has an Occupational Health and Safety Program, the purpose of which is to guarantee and maintain safe and healthy environments for all employees, suppliers, visitors, and customers to prevent work accidents and occupational diseases.

During 2022, the company implemented new regulatory requirements related to an update of Peru’s Usury Law Regulation, which establishes maximum interest rates for consumer products and eliminates certain commissions. The company also deployed new controls to ensure compliance with market conduct regulations.

The company has adopted the Ambition Model developed by the Netherlands Institute of Internal Auditors. To do this, the company established the potential level and the gaps to be covered to move from the Integrated to the Managed level in the four key activities: internal audit services and functions, professional practices, performance management, and people management and governance.

The company also made progress in the use of machine learning in its audit activities with the introduction of Computer Assisted Audit Techniques (CAAT), such as supervised, unsupervised and grouping models. One of these models, used to forecast branches with areas of improvement in internal control at Mi Banco Colombia, was honored with a second-place award in the Hackathon organized by the Latin American Committee for Internal Audit and Risk Assessment (Comité Latinoamericano de Auditoría Interna y Evaluación de Riesgos) committee of the Latin American Federation of Banks (Federación Latinoamericana de Bancos or FELABAN by its Spanish initials).

As of and for the year ended December 31, 2022, BCP Stand-alone represented 75.1% of the company’s total assets and 70.4% of the company’s equity attributable to Credicorp’s equity holders.

The company refers to BCP Stand-alone, BCP Bolivia, Mibanco, Mibanco Colombia, Grupo Pacífico, Prima AFP, Credicorp Capital and ASB as its main operating subsidiaries.

Some of the company’s subsidiaries, namely Atlantic Security Holding and five of its subsidiaries (Atlantic Security International Financial Services Inc (ASIF), ASB Bank Corp., Atlantic Private Equity Investment Advisor, Atlantic Security Private Equity General Partner, Credicorp Capital Cayman GP), Credicorp Capital USA Inc. (with its subsidiaries Credicorp Capital Advisors LLC., Credicorp Capital LLC. and Tyba LLC.) and Credicorp Capital Asset Management Administradora General de Fondos maintain their operations.

The company’s principal activity is to coordinate and manage the business plans of its subsidiaries to implement a universal banking service mainly in Peru, Bolivia, Colombia, Chile, and Panama and to develop its Insurance and Pension and Investment Banking and Wealth Management businesses. Though the company primarily focuses on the aforementioned countries, it also makes limited investments in other countries in the same region.

Pursuant to Section 404 of the U.S. Sarbanes-Oxley Act of 2002, the company is required to make certain certifications regarding its internal controls over financial reporting. The company has developed internal methods to identify and evaluate risk and controls over its critical processes to determinate how effective internal controls are over financial reporting using the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 Internal Control Framework.

In order to comply with the SBS regulation, the company has a loan portfolio classified in accordance with SBS Resolution No. 11356-2008 and it was amended as of July 1, 2010.

The Autoridad Supervisora del Sistema Financiero or Financial System Supervisory Authority (ASHC) is an entity regulated under the Cayman Islands Companies Law, duly supervised by the Cayman Island Monetary Authority (CIMA).

ASB is registered as an exempt company and is licensed in the Cayman Islands pursuant to the Banks and Trust Companies Law. ASB Casa de Valores holds a Securities Broker license issued by the Superintendence of the Securities Market of the Republic of Panama that enables the entity to act as securities broker, manager and custodian.

The Autoridad Supervisora del Sistema Financiero or Financial System Supervisory Authority – Bolivia also supervises brokerage and mutual fund management activities that the company conducts through BCP Bolivia’s affiliates, Credibolsa and Credifondo. These affiliates operate under the Securities Markets Law No. 1834, enacted on March 31, 1998.

The Comision para el Mercado Financiero or Financial Markets Commission of Chile regulates Credicorp Capital Chile S.A. through the Chilean stock exchange market.

Banco de Credito del Peru, Panama Branch (BCP Panama), a branch of BCP Stand-alone, and ASB Bank Corp., a wholly owned subsidiary of ASHC, were registered in the Republic of Panama in 2002 and 2020 respectively, under an international license issued by the SBP, in accordance with Law Decree No. 9 of February 26, 1998, as amended. ASB also has a Securities Broker License issued by the Superintendency of the Securities Market of the Republic of Panama.

BCP Panama is subject to an inspection made by auditors and inspectors of the SBP, to determine, among other things, its compliance with the Law Decree No. 2 of February 22, 2008 and No. 23 of April 27, 2015, the Law on the Prevention of Money Laundering, Terrorism Financing and Financing of Proliferation of Weapons of Mass Destruction.

The Banco de Credito del Peru, Miami (BCP Miami) Agency is regulated, supervised and examined by the Office of Financial Regulation of the State of Florida Department of Financial Services and by the Federal Reserve through the Federal Reserve Bank of Atlanta. Its direct and indirect nonbanking subsidiaries doing business in the United States also are subject to regulation by the Federal Reserve.

BCP Miami is licensed to operate as an international bank agency in the state of Florida and is authorized to transact business by the Comptroller of Florida. BCP Miami is regulated, supervised, and examined by the Office of Financial Regulation of the State of Florida Department of Financial Services and by the FED through the Federal Reserve Bank of Atlanta.

Credicorp Capital LLC is a broker-dealer registered with the U.S. Financial Industry Regulatory Authority and the U.S. Securities and Exchange Commission.

The company is subject to certain requirements set forth by the Peruvian Banking and Insurance Law, as well by certain banking resolutions issued by the SBS, including the Consolidated Supervision of Financial and Mixed Conglomerates Regulation.

Credicorp Capital Peru is the main shareholder of Credicorp Capital Sociedad Agente de Bolsa S.A., Credicorp Capital Sociedad Titulizadora S.A., and Credicorp Capital S.A. Sociedad Administradora de Fondos. These entities are supervised directly by the SMV.

Credicorp Capital LLC. is a broker-dealer registered with FINRA and the SEC. Credicorp Capital LLC. is owned by Credicorp Capital Limited, which is wholly owned by Credicorp Ltd. Credicorp Capital LLC. has an affiliated SEC investment adviser (CRD No. 290081), Credicorp Capital Advisors LLC. They share the same Board of Directors and ownership.

Credicorp complies with Dodd-Frank Act and EMIR requirements through implementation of ISDA Protocols, addressing management of existing relationships and compliance with counterparty requirements.

History

Credicorp Ltd. was founded in 1889. The company was incorporated in Bermuda in 1995.