SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

 

For the period of November 9, 2007

 

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CREDICORP LTD.

(Exact name of registrant as specified in its charter)

 

Clarendon House

Church Street

Hamilton HM 11 Bermuda

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F o

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

 

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Aida G. Kleffmann

Investor Relations Officer

Credicorp Ltd.

Calle Centenario 156

La Molina, Lima - 12, PERU

 

Phone: (+51 1) 313-2123

E-mail: akleffmann@bcp.com.pe

 

Guillermo Castillo / Antonella Monteverde /

Luis Enrique Pérez

Investor Relations

Credicorp Ltd.

Calle Centenario 156

La Molina, Lima - 12, PERU

 

Phone: (+51 1) 313 2170

E-mail: guillermocastillol@bcp.com.pe

 amonteverde@bcp.com.pe

 leperez@bcp.com.pe

 

CREDICORP Ltd. Reports Third Quarter 2007 Earnings

 

Lima, Peru, November 8, 2007 - Credicorp (NYSE:BAP) announced today its unaudited results for the third quarter of 2007. These results are reported on a consolidated basis in accordance with IFRS in nominal U.S. Dollars. This full report is presented after a release of a report on the highlights of Credicorp on October 29, 2007.

 

HIGHLIGHTS

 

·

Following the strong growth trend of the year, in 3Q07 Credicorp reported an increase of its net income by 3.3% QoQ and 75.9% YoY, totaling net earnings of US$ 90.3 million.

 

·

ROAE reached 23.02% for the quarter and 22.87% for the year to date.

 

·

Loan growth of its banking business continued strong revealing a 6.8% QoQ loan growth in both gross and net terms.

 

·

Interest income followed this trend with a robust 8.5% QoQ growth despite the persistent competition and pressure on rates, revealing the success of our strategy to shift our portfolio mix increasing our share of the retail business.

 

·

NII however, increased in less proportion and reflects the change in our funding structure and the need to complement our solid deposit base with debt.

 

·

An also strong fee income growth of 13.4% QoQ reveals further increases in bank transactional activity and the fee expansion at the pension fund business. Operational FX-transactional income also grows 15% QoQ, but gains from the sale of securities drop significantly following the international markets’ evolution.

 

·

Net interest margin reflects though a small drop from 5.5% for the previous quarter, reaching 5.2% this 3Q07. The drop follows the competitive pressures and increased funding costs, but could be contained given the better earnings structure resulting from the continuing change in loan mix.

 

·

Loan portfolio quality continued strengthening, reaching a PDL/Loans ratio of only 0.91%, down from 0.96% for 2Q07. Net provisioning at US$ 7.9 million for 3Q07 reflects increased gross provisions in line with loan growth but also continuing recoveries.

 

·

BCP’s consolidated numbers reflect a very healthy and dynamic banking environment with core revenues up 4.8% QoQ and 31.4% for the year. Such improved income combined with controlled operating expenses and an important positive translation effect given the revaluation on the Peruvian Nuevo Sol against the weak USDollar, led to a 10.6% QoQ higher net income for BCP for 3Q07 which reached US$ 90.7 million, and translates into a solid contribution to Credicorp of US$ 88.2 million for this 3Q07.

 

·

BCB, which is consolidated in BCP, continues its consistent growth and reports a contribution 22% higher QoQ and 91% higher YoY, reaching US$ 6.7 million for 3Q07.

 

·

ASHC remains a stable and growing business in line with the increasing wealth in the country and reports a remarkable contribution improvement of 42% QoQ at US$ 6.2 million.

 

·

PPS had a difficult quarter hit by the devastating August 15th earthquake and reported a negative contribution to Credicorp of US$2.96 million for 3Q07.

 

·

Finally, Prima AFP reflects its turn around through controlled operating costs reaching a positive contribution of US$ 1.8 million for 3Q07.

 

·

Credicorp performance indicators reveal these improvements with ROAE rising to 23.02% from 16.3% YoY and the efficiency ratio recovering to 40.8% from 42.2% QoQ as a result mainly of the lower operating costs in the pension fund business.

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I. Credicorp Ltd.

Overview

 

Continuing the growth trend and income improvements reported throughout the first half of the year 2007, Credicorp closed its 3Q07 with a total net income after minority deductions of US$ 90.3 million, reflecting a 75.9% earnings growth from 3Q06 and 3.3% growth QoQ, resulting in an improved ROAE of 23.02% for the quarter, and 22.9% for the year to date.

 

Credicorp’s core banking business reported a strong performance, with total loan growth this last quarter reaching 6.8% QoQ, fueled, as expected, by the retail segment with 12.3% QoQ loan growth in this segment.

 

Growth in interest income followed this robust loan growth and reached 8.5% QoQ despite the persistent competition and pressure on rates, revealing the success of our strategy to shift our portfolio mix increasing our share of the retail business.

 

NII however, increased in significantly less proportion (+1.1%) and reflects the change in our funding structure and the need to complement our solid deposit base with debt in order to support our accelerating loan growth. Thus, the strong loan growth was funded by a reduction of excess liquidity (-4.9% QoQ), a moderate expansion of deposits (+1.7% QoQ) and additional structured debt.

 

Net interest margin reflects though a small drop from 5.5% the previous quarter, but could be sustained above the 5% minimum target reaching 5.2%, despite the competitive pressures given the better earnings structure resulting from the continuing change in loan mix.

 

Non Financial income reported 4.6% QoQ growth. However, this number hides a strong fee income growth of 13.4% QoQ revealing further increases in bank transactional activity and the fee expansion at the pension fund business. Operational FX-transactional income also grows 15% QoQ. It is the lower gains in the sale of securities given the international markets’ evolution, lower by 65% compared to the excellent performance of the capital markets in the previous quarter, which led to an overall moderate growth of non-financial income.

 

Credicorp Ltd.		Quarter									Change %
US$ thousands		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Net Interest income			161,055			159,305			120,667			33.5	%		1.1	%
Total provisions, net of recoveries			(7,922	)		(6,090	)		9,795			-180.9	%		30.1	%
Non financial income			112,942			108,026			85,286			32.4	%		4.6	%
Insurance premiums and claims			9,809			19,278			19,383			-49.4	%		-49.1	%
Operating expenses			(163,125	)		(159,886	)		(152,042	)		7.3	%		2.0	%
Translation results			13,811			1,728			832			1559.2	%		699.3	%
Worker's profit sharing and income taxes			(33,418	)		(28,633	)		(28,600	)		16.8	%		16.7	%
Net income			93,152			93,727			55,322			68.4	%		-0.6	%
Minority Interest			2,848			6,324			3,997			-28.8	%		-55.0	%
Net income attributed to Credicorp			90,304			87,403			51,324			75.9	%		3.3	%
Net income/share (US$)			1.13			1.10			0.64			75.9	%		3.3	%
Total loans			7,509,085			7,031,734			5,592,231			34.3	%		6.8	%
Deposits and Obligations			10,322,832			10,152,601			7,974,586			29.4	%		1.7	%
Net Shareholders' Equity			1,603,026			1,535,154			1,296,917			23.6	%		4.4	%
Net interest margin			5.2	%		5.5	%		4.9	%
Efficiency ratio			40.8	%		42.2	%		42.9	%
Return on average shareholders' equity			23.0	%		23.7	%		16.3	%
PDL/Total loans			0.9	%		1.0	%		1.6	%
Coverage ratio of PDLs			299.4	%		284.4	%		215.7	%
Employees			15,621			15,009			15,760

 

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The insurance business did have a difficult quarter. The strong 8.0 (Momentum scale - Mw) earthquake that stroke the southern area of our country on August 15^th, was devastating for the region and generated significant human and material losses. In such events, it is the insurance companies that carry the financial burden more than any other business. Pacífico Peruano Suiza had a share equivalent to its business market share of the insured claims in the affected region. These claims for PPS amounted to approximately US$ 44 million. Having recently applied a more conservative risk management policy, PPS had a catastrophic re-insurance policy that covered risks of this nature in excess of US$ 5 million. However, an additional US$ 1 million cost related to the damage to power lines had to be added, and PPS had to absorb these amounts, plus the policy re-instatement costs which altogether amounted to approximately US$ 8 million for the quarter.

 

Putting the earthquake effects apart, PPS is certainly on the right track and showing improved results. Net premiums earned for PPS remained flat QoQ as a result of some seasonality in the P&C business.

 

Looking at the 9 months performance, PPS’s Gross Premium grew 27%, 9% was the growth achieved for that same period in Life and 14% for Health. In terms of market share, PPS continues recovering its leadership, reaching 30.5% market share for P&C and Life, 3.2% higher than a year ago, and 53.8% in the Health business.

 

On the cost side, the increases reflected up to date are fairly moderate given the rate of expansion of the business. Total operating costs are up by only 2% QoQ for a business which is growing at significantly higher rates and led to further improvements in Credicorp’s efficiency ratio, which dropped further to 40.77% from 42.16% QoQ. This hides a more important growth of operating expenses at BCP (up 2.8% QoQ) and specifically of personnel costs (up 4.9% QoQ), which has been partially offset by a strong reduction of operating costs at Prima AFP. Prima has been able to reduce its sales force from close to 1,000 by the end of last year to around 613 by the end of September, a significant effort which was carefully monitored to avoid negative effects in the market and on Prima’s image.

 

Nevertheless, total growth of operating cost for BCP was lower than expected, since income generation continues growing quicker than projected. Despite this, we still expect an increase of operating costs basically related to the important expansion of BCP’s network, which is projected to grow close to 30% until the end of 2008. This expansion brings along strong investments in new premises, systems and personnel which will certainly impact our income statement. Thus, the reported better efficiency ratio for 3Q07 may not be sustainable in the near future.

 

This expansion is in line with Credicorp’s strategy for its banking business and is a continuation of the growth achieved throughout the year. BCP went from 237 branches at the beginning of the year to 254 at the end of September, from 655 ATMs to 724, and from 551 Agentes BCP to 1017. This represents an expansion of our network by 38% within the year to date (9 months) or 50% on an annualized basis. Furthermore, we have increased the number of bank accounts at BCP from ca. 4.4 million to ca. 4.9 million, and of clients from ca. 2.3 million to ca. 2.5 million in this same period of time, all of these reflecting an important achievement in our effort to increase bank penetration and capture growth.

 

Another positive development is that this strong loan growth continues while portfolio quality remains healthy with an even improving PDL/Loans ratio which reached in 3Q07 only 0.9% vs. 1.6% for 3Q06. Total provisions net of recoveries however, reveal an increase in provisions at BCP in line with loan growth which reached US$ 17.5 million for the quarter reflecting a provisioning ratio of 12.2% of interest income or 0.2% of loan portfolio. These provisions, however, were again to a good extent offset by recoveries of US$ 8.2 million, leaving a net provision at BCP of US$ 9.2 million, which was further offset in the consolidation by reversals at Grupo Crédito, leaving US$ 7.9 million of net provisions for 3Q07 at Credicorp.

 

These developments resulted in improved ratios for the quarter, with ROAE climbing to 23.02% from 16.3% a year ago.

 

3

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Earnings Contribution

 

(1)	Includes Banco de Crédito de Bolivia.

 

(2)	Includes Grupo Crédito, Servicorp

 

(3)	Includes taxes on BCP's and PPS's dividends, and other expenses at the holding company level.

 

Credicorp – the Sum of its Parts
 

Having experienced a devastating earthquake in the middle of the 3Q07 has been a hard test on Credicorp and its ability to respond quickly and efficiently to reinstate its operational capabilities and absorb the financial impact, especially in the insurance business. We are very pleased to have been able to withstand such a test, and be in a position to report the excellent results we can show as a financial group.

 

In fact, despite this important hurdle which mobilized massive resources of the bank to recover from its effects, BCP reported excellent 3Q07 results, confirming its expanding earnings generation capacity reaching for 3Q07 earnings of US$ 90.7 million, which resulted in a contribution to Credicorp of US$ 88.2 million for the quarter. This confirms BCP’s aggressive growth track, fueled by the country’s strong economic growth and reflects an impressive 11% growth over the previous quarter and 72% over the previous year, and an equally excellent 36.1% ROAE for the quarter.

 

BCB, which is consolidated within BCP, reported a contribution of US$ 6.7 million for 3Q07, higher by a remarkable 22% QoQ and 91% YoY. Thus, the performance of BCB is not being negatively affected by the continuing uncertain political scenario of Bolivia, and in fact, continues growing and gaining market share and brand positioning.

 

ASHC reports an impressive contribution improvement of 42% QoQ reaching US$ 6.2 million for the 3Q07. ASHC’s business is constantly expanding as a result also of the increasing wealth generation in the country, and represents a stable, no-risk investment, for which its ROEA of 17% is more than satisfactory.

 

As explained before, PPS did have a difficult quarter. Of all the companies of the Credicorp group, it was hardest hit by the August 15th earthquake and reported a total income for the year to date 12% lower than last year reaching US$ 11.6 million. However, bottom-line numbers after minority interests for 3Q07 reached a loss of US$ 3.9 million, which in turn resulted in a negative contribution to Credicorp of US$ -2.96 million for 3Q07. Excluding the earthquake effect, PPS reported somewhat lower 3Q07 earnings than 2Q07, as several important casualties resulted in claims in both the P&C and Life businesses. Nevertheless, its performance still reflects the improving general trend at the insurance business, with results in line with the previous quarters.

 

Finally, following the cost reduction plan, by which Prima’s sales force was reduced from 1,000 to 613 within the first three quarters of the year, Prima closed the 3Q07 with a positive result of US$ 1.8 million. Furthermore, Prima has established its dominant position in the market, capturing important market shares (31.3% of AuM, 35.3% of collections and 48.2% of voluntary contributions to the funds) and is increasing its fee income by incorporating a new administration fee for voluntary funds which used to have no management charges. This performance is therefore expected to improve as the company improves its income levels, reaches further control of operating costs and works on improving its capital structure, which today hides significant profits.

 

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II. Banco de Crédito – BCP Consolidated

 

Overview 3Q07

 

Net earnings at BCP continue surpassing expectations and reached another record level for 3Q07 with US$ 90.7 million, up 10.6% from US$ 82.1 million in 2Q07 and 71.7% higher than earnings of 3Q06.

 

This superb earnings growth results from the continuation of what we have been reporting throughout this year regarding the implementation of a coordinated strategy focused on growth of the retail/consumer sector and expansion of our network, strong investment activity in the corporate sector and the strength of the Peruvian economy which is growing at an average rate of around 8%, but was also boosted this quarter by important translation earnings (of US$ 12 million) in our US Dollar accounting generated by a Nuevos Soles assets position at BCP due to the revaluation of the Sol vis-à-vis the weak US Dollar.

 

As indicated, total loans on September 30, 2007 reflected growth of 6.6% QoQ and 35.1% YoY. Once again the driver behind BCP’s growth was the expanded lending activity both in the commercial and consumer sectors.

 

In fact, BCP’s loan book in the retail segment reached 12.3% QoQ growth, being the strongest performers the consumer sector with +18.1% for the quarter, SME or PYMES with +16.5% quarterly growth and credit cards with 9.5% QoQ growth. This is no doubt the result of stronger domestic demand through the increase of purchasing power in the population, as well as the further incursion in new segments by BCP, in line with its strategy to increase bank penetration. Furthermore, mortgages grew 8.2% QoQ and offer the strongest future growth potential given the low penetration of this product in the market.

 

On the other hand, the strong growth again this quarter of corporate loans (+8.9%) confirms the increased investment activity in this sector with companies increasing its production capacity. Altogether, in terms of daily average balances, total loans were up 9.7% QoQ and 32.2% YoY.

 

Funding this growth is however today a more important challenge. BCP did require this time some additional fund raising in the international markets and issued US$ 500 million structured securitized bonds within the 3Q07, which given the use of a “vehicle” in the structure for the sale of future USDollar flows, were booked as deposits at a BCP subsidiary and consolidated as such. Thus, this significant loan growth was financed to a great extent by deposit growth (+8.5% QoQ) including that external financing and a reduction of its excess liquidity (-2.2% QoQ).

 

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Banco de Crédito and Subsidiaries		Quarter									Change
US$ 000		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Net Financial income			142,756			141,147			107,063			33.3	%		1.1	%
Total provisions, net of recoveries			(9,241	)		(6,885	)		7,392			-225.0	%		34.2	%
Non financial income			91,987			88,829			74,176			24.0	%		3.6	%
Operating expenses			(119,814	)		(116,527	)		(115,478	)		3.8	%		2.8	%
Translation results			12,028			970			703			1611.0	%		1140.0	%
Worker's profit sharing and income taxes			(26,981	)		(25,470	)		(21,019	)		28.4	%		5.9	%
Net income			90,735			82,064			52,837			71.7	%		10.6	%
Net income/share (US$)			0.071			0.064			0.041			71.5	%		10.5	%
Total loans			7,450,674			6,989,841			5,514,218			35.1	%		6.6	%
Deposits and obligations			10,263,180			9,459,008			7,455,066			37.7	%		8.5	%
Shareholders equity			1,045,006			964,164			890,422			17.4	%		8.4	%
Net financial margin			5.2	%		5.5	%		5.0	%
Efficiency ratio			48.3	%		49.3	%		50.9	%
Return on average equity			36.1	%		35.6	%		24.6	%
PDL/Total loans			0.9	%		1.0	%		1.5	%
Coverage ratio of PDLs			300.7	%		286.8	%		221.6	%
BIS ratio			11.3	%		10.7	%		10.4	%
Branches			254			250			230
ATMs			724			699			624
Agentes BCP			1,017			837			420
Employees			12,216			11,611			10,507

Interest income on loans outperformed once again this loan growth, increasing by 11.6% QoQ, reflecting the better lending mix. Interest income from investments was also in line with 9.2% quarterly growth. However interest expense reflected both the increased and more expensive interest on borrowed funds (up by 20.5% QoQ) and increased interest paid on deposits (up 19.5% QoQ). The latter includes (i) interest on deposits related to the structured bonds and which reflect borrowing costs, and (ii) the effect on interest expense of a change in deposit mix since all interest bearing deposits increased their proportion of total deposits by 8% QoQ.

 

The net effect of these changes was a small reduction of Net Interest Margin (NIM) from 5.5% to 5.2%

 

Net Provisions for 3Q07 reached US$ 9.2 million, reflecting gross provisions of US$ 17.5 million and US$ 8.2 million of recoveries vs. US$ 13.3 million of gross provisions and US$ 6.4 million of recoveries in 2Q07. This level of provisions represents 0.2% of total loan portfolio for 3Q07. It is certainly the constant improvement of the economic performance and high liquidity in the market which allows such further improvements in portfolio quality. Thus, further drops in non-performing loans led to a PDL ratio of 0.91% for 3Q07 vs. 0.95% for 2Q07.

 

Fee income and gains in foreign exchange transactions continue growing reaching a strong 12.2% and 5.9% growth rate respectively for the quarter. However, non financial income was up only 3.6% QoQ, since significantly lower income from the sale of securities (-79.7%) offset the very good growth reported for fee and FX income. Such drop followed the international financial crisis which obviously affected the Lima Stock Exchange generating some drops in the capital markets. As reference, the index of the Lima Stock Exchange (IGBVL) registered a drop of 2.4% QoQ.

 

On the cost side, operating costs is a result of BCP’s business expansion, though it was up by a modest 2.8% QoQ. This increase continues in line with the announced investments in expanding our branch & sales points’ network and is expected to continue. In fact, the strongest growing costs: “personnel and administrative” and “other expenses” grew 4.9% and 5.2% respectively. Nevertheless, we continue advising to expect investment related expenditures to affect more our costs by the end of the year.

 

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Finally, the translation result for 3Q07 high rocketed due to the weakness of the dollar in the international markets and revaluation of the Nuevo Sol from S/.3.168 in June to S/.3.08 by the end of September, and led to a strong gain of US$ 12 million vs. US$ 0.97 million 2Q07, given the net Soles position in BCP’s balance sheet.

 

As a result of these developments, BCP’s quarterly ratios reflect additional improvements continuing this way its growth trend reaching again record levels: ROAE was 36.1%, the efficiency ratio 48.3% and portfolio quality ratios reached 0.91% delinquencies ratio and 300.7% coverage ratio.

 

Core Earnings 

Core Revenues		Quarter									Change
US$ 000		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Net interest and dividend income			142,756			141,147			107,063			33.3	%		1.1	%
Fee income, net			75,146			66,986			59,440			26.4	%		12.2	%
Net gain on foreign exchange transactions			13,526			12,778			9,674			39.8	%		5.9	%
Core Revenues			231,428			220,911			176,177			31.4	%		4.8	%

 

Core Revenues were up 4.8% QoQ and 31.4% YoY. Despite the good growth of fee income (+12.2%) and gains from FX transactions (+5.9%), it is still NII the main component of core earnings, and this recorded a modest 1.1% growth QoQ and 33.3% YoY, reflecting the effect of a changed funding structure for the quarter. Furthermore, some financing cost was generated by a swap transaction and exacerbated this effect. However it should be noted that interest income on loans does report excellent growth by 11.6% QoQ.

 

II.1 Interest Earning Assets

 

Growth of IEA remains strong, reaching 3.8% QoQ and 32.1% YoY

Interest Earning Assets		Quarter									Change
US$ 000		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
BCRP and Other Banks			1,740,636			1,773,450			2,009,055			-13.4	%		-1.9	%
Interbank funds			1,000			17,133			206			385.2	%		-94.2	%
Trading Securities			49,465			53,569			67,817			-27.1	%		-7.7	%
Available For Sale Securities			1,998,309			2,001,172			950,332			110.3	%		-0.1	%
Current Loans, net			7,383,196			6,923,441			5,430,468			36.0	%		6.6	%
Total interest earning assets			11,172,606			10,768,765			8,457,878			32.1	%		3.8	%

 

Growth of IEA of 3.8% QoQ and 32.1% YoY, follows the strong growth of BCP’s total loan portfolio for 3Q07, which reached 6.6% QoQ and 35.1% YoY as a result of increased demand for credit across all banking segments. Investments available for sale, dropped slightly 0.1% QoQ but were up compared to the previous year by 110%. The drop is a result of the reduction of our bank’s BCRP CDs position as liquidity was channeled to fund loan growth.

 

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Loan Portfolio

 

Loan portfolio continues its expanding trend reaching total net loans of US$ 7,247.8 million as of the end of September, revealing a 6.6% QoQ and 36% YoY growth. Analyzing this evolution, and measured by average monthly balances, an even higher QoQ growth rate is reflected of 9.7%, though 32.2% YoY. This loan growth is in line with the evolution and dynamism of the Peruvian economy in the last year, and especially of internal demand and private investments. Furthermore, the focus of BCP’s strategy in developing the retail banking segment resulted in this business segment reporting the strongest growth. Nevertheless, the Corporate and Middle Market banking segments revealed also a good performance for the quarter.

 

After having had an unprecedented strong quarterly growth in 2Q07, corporate loans reached an average monthly balance of US$ 2,468.4 million, reflecting a continuation of a still unusually strong quarterly growth reaching 8.9% expansion QoQ (vs. 11.7% in 2Q07) and further leading to an equally strong yearly growth of 32.5%. This is certainly a reflection of the increased investment activity, the increasing volumes of these investments in this sector, and certainly also of the dominant market share BCP holds in this segment, which allows BCP to capture and/or participate in almost every important investment.

 

 

The Middle Market portfolio also performed extremely well this quarter, reaching an average monthly balance of US$ 1,671 million which reflects quarterly growth 10.3%, and an important 37.7% YoY growth.

 

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Net interest income		Quarter									Change
US$ 000		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Interest income			240,182			220,181			174,829			37.4	%		9.1	%
Interest on loans			183,127			164,101			137,090			33.6	%		11.6	%
Interest and dividends on investments			-			3,082			24			-100.0	%		-100.0	%
Interest on deposits with banks			18,985			15,497			21,703			-12.5	%		22.5	%
Interest on trading securities			35,521			32,531			14,773			140.4	%		9.2	%
Other interest income			2,549			4,970			1,239			105.7	%		-48.7	%
Interest expense			97,426			79,034			67,766			43.8	%		23.3	%
Interest on deposits			69,241			57,927			47,509			45.7	%		19.5	%
Interest on borrowed funds			13,515			11,220			7,023			92.4	%		20.5	%
Interest on bonds and subordinated note			8,698			8,165			6,386			36.2	%		6.5	%
Other interest expense			5,972			1,722			6,848			-12.8	%		246.8	%
Net interest income			142,756			141,147			107,063			33.3	%		1.1	%
Average interest earning assets			10,970,685			10,203,348			8,543,953			28.4	%		7.5	%
Net interest margin*			5.20	%		5.53	%		5.01	%

 

 

III. 3 Assets and Liabilities

 

Total loans as of September 2007 reached US$454.5 million, reflecting growth of 6.2% QoQ. BCP Bolivia holds a very diversified loan portfolio in different business segments. During the current quarter, the growth of the Middle market segment stands out at 28.9%, meanwhile Corporate and Retail segment grew 6.6% and 3.7% respectively. It is also noteworthy that the retail segment contributed to 42% of total loan portfolio as of September 2007. Finally, BCP Bolivia holds market shares of 14.6% and 14.9% of loans and deposits, respectively, which represent the third place in the Bolivian Banking System.

 

As mentioned before, loan portfolio quality for BCP Bolivia is superior than the average systems. PDL ratio improved with respect to the previous quarter from 2.7% to 2.5% in September; meanwhile, the whole system had a slight improvement from 7.0% to 6.9% during the same period.

 

On the other hand, deposits also experienced growth of 8.0% QoQ and 35.3% YoY, as a result of increased confidence of clients and a relative stabilization of the political scenario, strong campaigns to promote savings and better deposit rates. Thus, saving deposits grew 12.6% QoQ, meanwhile, time and demand deposits grew 6.9% and 4.6%, respectively.

 

The following chart presents some numbers and financial indicators for BCP Bolivia:

Banco de Crédito de Bolivia		Quarter									Change %
US$ million		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Total Loans			454.5			428.0			383.0			18.7	%		6.2	%
Past due loans			11.3			11.5			16.4			-31.1	%		-1.7	%
Loan loss reserves			-20.6			-21.2			-24.6			-16.3	%		-2.8	%
Total Assets			761.3			710.8			580.0			31.3	%		7.1	%
Deposits			615.6			569.7			455.1			35.3	%		8.0	%
Shareholders net equity			75.4			68.1			66.3			13.7	%		10.7	%
Net income			7.0			5.5			3.5			101.8	%		29.2	%
PDL/Total loans			2.5	%		2.7	%		4.3	%
Coverage ratio of PDLs			181.9	%		184.3	%		149.9	%
ROAE			31.3	%		29.9	%		21.0	%
Branches			58			58			54
ATMs			152			143			138
Employees			1329			1214			1084

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IV. Atlantic Security Holding Corporation

ASHC		Quarter									Change %
US$ Million		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Net Interest income			4.8			4.8			3.1			54.3			-0.4
Dividend Income			0.1			0.1			0.1			-10.9			-6.9
Fees and commissions from services			2.7			2.3			1.3			105.7			16.3
Net gains on foreign exchange transactions			1.2			0.0			-0.2			741.7			3,510.6
Core Revenues			8.7			7.3			4.3			101.3			20.5
Total provisions, net of recoveries			-1.1			-0.8			0.4			-384.8			-43.0
Net gains from sale of securities			-0.2			-0.2			0.4			-140.0			15.5
Other income			1.1			0.2			0.6			79.7			389.8
Operating expenses			-2.3			-2.1			-2.0			14.7			10.4
Net income			6.2			4.4			3.8			64.4			42.3
Net income / share			0.1			0.1			0.1			64.4			42.3
Total loans			125.5			107.3			132.7			-5.4			16.9
Total investmenst available for sale			826.4			885.6			691.4			19.5			-6.7
Total assets			1,486.1			1,606.7			1,367.8			8.6			-7.5
Total deposits			1,256.8			1,387.0			1,164.1			8.0			-9.4
Shareholders equity			208.8			201.8			171.4			21.8			3.5
Net interest margin			1.38	%		1.37	%		1.02	%
Efficiency ratio			24.0	%		29.0	%		37.5	%
Return on average equity *			17.0	%		15.9	%		16.6	%
PDL/Total loans			0.00			0.00			0.00
Cover ratio			1.0	%		1.2	%		1.9	%
BIS ratio *			15.00	%		13.40	%		16.10	%

*	Figures of ASB, on an accumulated basis

Net income for Atlantic Security Holding Corporation (ASHC) of USD 6.2 million reflects growth of 64.4% YoY and 42.3% QoQ.

 

Core revenues grew by 101.3% YoY driven by greater asset volumes, wider margins and increased commissions income. On a QoQ basis, core revenue growth was 20.5% due almost entirely to foreign exchange gains. Most of these gains, however, were offset by losses in options that hedge currency exposures. Additionally, these gains had not been accounted for in the statement of income and expense until 3Q07, so they reflect gains over a 9 month period. Core revenues have therefore grown markedly on a YoY basis but when compared to the last quarter have remained stable. Nevertheless, the positive growth trend in commissions income that began in 3Q06 of approximately USD 350 thousand per quarter has continued unabated.

 

In 3Q07 USD 1.1 million of provisions were redistributed based on portfolio performance and did not have an effect on net income as there were no new provisions; asset quality remains high and shows no sign of deterioration despite current market conditions. Correcting for the foreign exchange and provision redistribution effect, actual QoQ net income growth was on the order of USD 800 thousand, attributed mainly to higher commissions income and less provision expenses.

 

Net interest margin has remained stable at 1.38%, as was predicted last quarter. We expect it to widen in the following quarters as the combined effects of lower short-term rates and larger credit spreads translates into a positively sloped yield curve. With Libor-Treasury spreads remaining high, however, this widening could develop slowly.

 

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As mentioned, Fees and commissions continue to grow at a brisk clip, posting growth of 16.3% QoQ and 105.7% YoY. Most of the growth in this income stems from larger placement fees due to an increase in assets under management. However, as in the previous quarter, the positive performance of funds has allowed incentive fees to play an important role in the results posted for this item.

 

The efficiency ratio improved from 37.5% for 3Q06 to 24.0% for 3Q07. It is important to note however that the redistribution of provisions has distorted the efficiency ratio calculation for this quarter. Without adjusting for provisions, the ratio is 27%, which still represents an improvement over both 3Q06 and 2Q07.

 

The -7.5% QoQ drop in asset levels is explained by the withdrawal of large deposits received during 2Q07 that we anticipated in our previous commentary were not likely to remain. The 8.6% YoY growth is a more accurate measure of our actual asset growth rate which has slowed considerably with respect to 2006 but that continues at a pace several points above our base case reference rate of deposit yield reinvestment.

 

Interest Earning Assets

 

Interest earning assets reached US$ 1.358 MM, as shown in the table below. QoQ asset levels fell 8.1%, while YoY posted growth of 10.7%. As mentioned before, during 2Q07 we received several large deposits whose permanence was considered unlikely. These deposits were largely withdrawn during 3Q07, explaining the quarterly reduction. The YoY result is more in line with actual growth rates. For 2007, we expect asset growth to fall in the 8-10% range. The QoQ drop in Investments also reflects a temporary hold on new investment activity during most of 3Q07 as market developments dictated caution. By quarter’s end, however, investment activity resumed and we expect that for 4Q07 levels will reach USD 800-830 million, with most of the new investment coming from a similar reduction in Due from banks. The share of investment-grade securities in the investment portfolio remains at 75%, emphasizing ASB’s prudent investment policy of concentrating its portfolio in high credit quality, high liquidity securities.

INTEREST EARNING ASSETS *		Quarter									% change
(US$ Million)		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07
Due from banks			452			531			463			-2.4	%		-15.0	%
Loans			126			107			133			-5.4	%		16.9	%
nvestments			781			838			631			23.7	%		-6.9	%
Total interest-earning assets			1,358			1,477			1,226			10.7	%		-8.1	%

(*)	Excludes investments in equities and mutual funds

 

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Asset Management Business

 

Third party managed funds include customers’ deposits, and investments such as proprietary mutual funds and securities custody. The total of these funds has grown -0.2% and 30.6% QoQ and YoY, reaching US$ 3.266 billion as of 3Q07 (US$ 3.274 billion in 2Q07). Quarterly growth was nil as the withdrawal of large time deposits were offset by a 6.5% QoQ growth in third-party investments, which continue to post strong growth albeit at a slower rate, in part due to the fact that higher asset prices contributed less to asset levels than in previous quarters. As we concluded in the previous quarter, the management of third party funds in off-balance sheet accounts continues to command most new business.

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V. PRIMA AFP

 

V1. Market developments

 

During 3Q07, competition in the Private Pension Fund System was slightly softer than in the previous quarter as reflected by lower number of transfers, probably as a result of the important reduction of the sales force. Thus, transfers dropped to an average of 36 thousand per month in 3Q07 from an average of 42 thousand per month in 2Q07. With respect to new affiliations, they registered an increase from 55 to 57 thousand per month for 3Q07.

 

In terms of funds under management (FUM) and in spite of the impact of the international market, these did continue growing with respect to the previous quarter (+4.9% to US$ 20.2 billion). Furthermore, appetite for investments in the Stock market continued increasing, resulting in the AFP’s fund N° 3 -which concentrates in Stocks- increasing its share of the total FUM to 22.0% as of September 2007 (17.2% as of June 2007).

 

Private Pension Fund System: Main Indicators

		3Q07			2Q07			1Q07
Affiliates (thousands)			4.049			3.993			3.939
% Change (1)			1.4	%		1.4	%		1.5	%
Sales force(as of the end period)			3,135			4,199			5,179
Assets under management US$ (US$ mm)			20,286			19,334			16,763
% Change (1)			4.9	%		15.3	%		16.5	%
Income (US$ mm)			56.0			45.9			51.5
Operating expenses (US$ mm)			44.7			46.4			44.5
Operating income (US$ mm)			11.3			(0.6	)		7.0
Net Income (US$ mm)			10.7			19.5			22.0

(1)	Quarterly change

Source: SBS according to Peruvian GAAP. In local Peruvian Accounting, legal reserves are included in the income statement, as opposed to the IFRS

The first and third quarter include double collection

 

The Peruvian Pension Fund started receiving in August free disaffiliation applications, according to the Free Disaffiliation law (Law N°28991), ruled in May of 2007. The law granted affiliated individuals who comply with certain requirements, the possibility to disaffiliate from the Private Pension Fund (SPP) and return to the National Pension System (SNP). The requirements are oriented to affiliates who belonged to the SNP until December 1995 and after incorporating to SPP had a pension for retirement. The financial effects on Prima AFP related to the free disaffiliation will not be significant, due to the characteristics and requirements established by the law.

 

V2. Prima AFP

 

During the 3Q07, Prima focused on preserving its income base. Prima could sustain its leadership in terms of returns achieved in funds 2 and 3, which represented 95.9% of total funds under management. This contributed to a solid attractiveness of its funds which resulted in increasing the voluntary contributions that affiliates can make to the funds, positioning Prima at the top in terms of percentage of collections in the whole system.

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		PRIMA 3Q07			System 3Q07			% Share			PRIMA 2Q07			PRIMA 1Q07
Affiliates (1)			1,019,576			4,049,419			25.2	%		1,013,420			1,005,505
New affiliations (2)			11,706			57,156			20.5	%		12,155			12,847
Funds under management US$ mm (1)			6,347			20,286			31.3	%		5,840			5,001
Collections US$ mm (3)			143.4			406.7			35.3	%		159.9			164.4
Voluntary contributions to te funds US$ mm (1)			188.6			391.4			48.2	%		175.6			119.6

 

Source: Superintendencia de Banca y Seguros:

(1)	At end of period

(2)	Accumulated to the Quarter.

(3)	Indicator compounded by legal and voluntary contributions. Voluntary contributions increased in 1Q07 and 2Q07 when compared with 3Q07

 

- Voluntary contributions (APV):

 

During 3Q07, the voluntary contributions administered by Prima AFP kept its upward trend and registered as of September 2007 a balance of US$ 188.6 million, amount that represented the highest share in the whole system (48.2%).

 

In order to consolidate and strengthen the voluntary contribution system, Prima has established a fee administration for such contributions, which will be charged at the beginning of December 2007. At this point, the company will generate additional earnings, which will allow it to cover the cost related to the administration of such funds. The favorable perspective for growth of this system, supported by the excellent returns generated by the funds administered, will allow Prima to boost the growth of this business.

 

- Monthly Accumulated Salary (RAM):

 

The earnings generated by the company are based on the accumulated income provided by the active affiliates. According to the earnings generated by the 1.5% commission in 3Q07, the total amount of the base customer’s income kept in a very solid level, reporting the highest market share in the system (31%). This indicator is estimated according to the official earnings reported by the companies in the system.

		PRIMA 3Q07			Total System 3Q07			PRIMA % Share
Income (US$ millions)			14.76			55.83			26	%
Administration Fee			1.5	%		-			-
RAM estimated base (1) US$ million			273.3			877.8			31	%

 

Commercial Results

 

During 3Q07, Prima continued its process of reducing its sales force to rationalize and reduce its operating costs. Looking to preserve its income base, the company focused on increasing its efficiency per sales person, increasing the number of new affiliation/transfers per sales person and targeting customers with higher average income.

 

Prima achieved these objectives during 3Q07, as the result of about 35 thousand new affiliations/transfers vs. 32 thousand transfers away from Prima. Furthermore, the higher average income level of its new affiliations, and voluntary contributions added up to make Prima the strongest fund in terms of collections, reaching US$ 143.4 million or 35.3% of collections for the system for September 2007. This contributed to positioning Prima as N°2 in the market in terms of FUM reaching S/. 19,594 million of administered funds or 31.3% market share.

 

Investments

 

Prima maintained its leadership position in returns achieved for two of its three different administered funds.

 

Fund N° 1 obtained the second highest return with 16.34% year to date (September).

 

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Fund N°2 obtained the highest return during the last year, as well as accumulated for 2 years since Prima started operations (37.44% during the last 12 months and 74.71% during the last 24 months).

 

Likewise, fund N° 3 was the leader in the market with a 73.2% return during the last 12 months, a 6% superior figure with respect to next competitor in the system.

 

As of September 2007 and based on risk adjusted returns, Prima obtained the highest return for fund N° 3 and obtained the second position in funds N°1 and 2.

		September 2007			Share per Fund
Fund 1			259			4.1	%
Fundo 2			4,207			66.3	%
Fundo 3			1,881			29.6	%
Total US$ mm			6,347			100.0	%

 

Financial Results

 

In 3Q07 Prima reported net income of US$ 1.8 million. On an accumulated basis as of September 2007, the net income was US$ 0.7 million, in line with expectations. The company generated an important level of income (US$ 14.8 million, which include the double effect of July in terms of collections) following the good results of its commercial management and the support of the collections process. In this way, the company has consolidated a higher base of income generation.

 

Results for the 3Q07 are explained by the following developments:

 

(1)

Expenses of sales personnel continue with a downward trend, as a result of the lay-offs in its sales force made in former months.

 

(2)

Lower administrative expenses related to the sales force support and offices maintenance and the decreased flows of funds into and between funds.

 

(3)

Expenses related still to the merger as charge offs of assets continue being amortized. Thus, amortization and depreciation of investments in systems and premises add up to US$ 2.2 million for 3Q07 and a total of US$ 6.4 million as of September 2007.

 

(4)

Financial charges for loans incurred to finance the acquisition of the Prima Headquarters and partially the acquisition of Unión Vida, which add up to US$ 1.1 million for 3Q07 and US$ 3.1 as of September 2007.

 

(5)

Net gains on foreign exchange transactions of US$0.9 million, due to the appreciation (2.6%) of the local currency during the 3Q07.

Main financial indicators for Prima are shown below

		3Q07			2Q07			1Q07			Jan-Sep 2007			Jan-Sep 2006
Income			14,759			12,121			13,657			40,536			14,502
Total General Expenses			(12,947	)		(13,385	)		(13,479	)		(39,811	)		(24,346	)
Net Income / Loss			1,811			(1,264	)		178			725			(9,844	)
Total Assets			244,050			239,120			229,159			244,050			183,809
Total Liabilities			114,959			112,150			106,055			114,959			58,484
Equity			129,090			126,971			123,104			129,090			125,325

(1)

Information based on IFRS

 

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According to Peruvian accounting principles and for comparison purposes within the System, we have estimated Prima’s EBITDA in 3Q07 at US$ 3.8 million, i.e. 26% of System’s EBITDA

 

		PRIMA			Competition			Total System
Income			14,759			40,937			55,696
Net Income			1,622			9,645			11,267
+ D&A			742			1,137			1,879
+ amortization			1,419			-			1,419
EBITDA			3,783			10,782			14,565
% Share EBITDA			26.0	%		74.0	%		100	%

(1)

Figures are according to Peruvian local accounting

 

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VI. EL PACIFICO PERUANO SUIZA AND SUBSIDIARIES (PPS)

 

Results of PPS, which includes Property & Casualty (PPS), Life (PV) and Health (EPS), for the 3Q07 have been negatively affected by the strong 8.0 Momentum scale (Mw, according to the US Geological Service) earthquake that stroke the southern area of our country, and a higher provisioning level as a consequence of an increase of the income tax for the Life insurance business. As of September, the Property & Casualty Company (PPS) had received claims related to the earthquake for a total amount close to US$44 million. PPS had a catastrophic re-insurance policy that covered risks of this nature leaving an exposure of only US$6 million. In addition, PPS has paid premiums for the reinstatement of its catastrophic policy for about US$1.8 million, leading to a total earthquake related cost of approximately US$8 million for the 3Q07.

 

Nevertheless, the accumulated underwriting results of the consolidated company as of September 2007 reached US$14.9 million, one of the highest in the insurance industry of the country.

 

On the other hand, it is important to mention that PPS continues recovering its market share throughout this current year. The total market for Property & Casualty and Life Insurance generated total gross premiums of US$896 million as of September 2007, 7.3% above the cumulated premiums for the same period of last year. During this period PPS and PV grew altogether at 19.9% and the market share for both, in terms of total premiums, reached 30.5%, a 3.2 percentage points increase from the previous year.

 

It is important to highlight that the re-composition of the risk portfolio favoring the retail segment is moving forward. Thus, for the retail segments such as the medical assistance, automobiles, personal injuries, property insurance and SOAT segments, the total production grew 41% YoY and 10% QoQ.

 

VI.1 Net Income

 

Net consolidated income after minority interest for 3Q07 reflects a loss of US$3.9 million vs. a net income of US$6.8 million in 2Q07 and US$5.5 million in 3Q06. Nevertheless, on a cumulative basis the net income after minority interest reached US$11.6 million, hardly US$1.6 million lower than the net income registered during the same period of last year, despite the catastrophic effects mentioned before.

 

As a result, PPS’s contribution to Credicorp for 3Q07 (after consolidation adjustments and minority interest) reached a loss of US$2.96 million.

 

VI.2 Revenue and Operating Expenses

 

Total Premiums amounted to US$115.6 million in 3Q07; representing an improvement of 20.7% YoY and a moderate 1.6% decrease QoQ. The YoY improvement is fueled mainly by the P&C businesses in automobiles, medical assistance and SOAT; by the life insurance business in the pension fund segment and individual life, and by the health insurance business in fees to private companies.

 

The QoQ moderate decrease is driven by the 16% lower premiums generated by the P&C, explained by a seasonality in some businesses such us aviation, marine hull and others, with peak levels during the second and fourth quarter of the year.

 

On a cumulative basis, total premiums reached US$338.3 million as of September 2007 vs. US$285 million a year ago.

 

During the 3Q07, Technical reserves increased by 10.7% YoY, explained mainly by the increase of total premiums in this period. However, on a QoQ basis, reserves decreased by 18% due to seasonality mentioned before driven by the P&C business. A reduction in P&C reserves on a quarterly basis responds to seasonal evolution since these respond to the seasonality of its insurance contracts, which lead to lower reserves build-up in the months of lower production, which are typically in the 1st and 3th quarters, while reserves are higher in the 2nd and 4th quarters.

 

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Net Premiums Earned reached a level of US$ 77.1 million in 3Q07, reflecting a growth of 4.2% QoQ and 14.5% YoY, mainly as a result of general Premiums growth in P&C and Health. On a QoQ basis comparison, the increase in net premiums earned is explained by higher retained premiums and by a reduction in reserves, both in the P&C segment.

 

As of September 2007, net premiums earned amounted to US$223.2 million, 16% higher than that of the same period a year ago. 

 

		Quarter									Change
US$ MM		3Q07			2Q07			3Q06			3Q07 / 2Q07			3Q07 / 3Q06
Total Gross Premium			115.6			117.4			95.7			-1.6	%		20.7	%
Retained Premium			91.4			91.4			80.2			0.0	%		13.9	%
Reserve Adjustments			14.2			17.4			12.9			-18.0	%		10.7	%
Net Premiums Earned			77.1			74.0			67.4			4.2	%		14.5	%

Financial Income for 3Q07 reached US$ 13.4 million, up 1.4% QoQ and 35.6% YoY. These increases respond to basically higher dividends received by the P&C portfolio and to higher interest on investments in the Life business as the portfolio of administered funds expands. As of September 2007, financial income reached US$39.5 million vs. US$33.8 million a year ago.

 

Other income increases significantly by 130.5% YoY and 16.8% QoQ, mainly due to higher capital gains from the sale of equity investments on PPS’s books and from the sale of debt investments on PV’s books, as a consequence of the excellent performance of the Lima Stock Exchange during September. This income amounted to US$4.7 million in 3Q07 and US$17.7 million year to date (as of September 2007).

 

Salaries and Employees Benefits were 1.8% and 0.1% below when compared to 3Q06 and 2Q07, respectively. On a YoY basis comparison, the decrease was the consequence of the reclassification of SARs provisions to the “operating expenses” caption. Excluding this effect, the growth attained was 4.9% .

 

General expenses and Other operating expenses showed an increase with respect to 3Q06, however, a significant part is non-recurrent expenses and is explained by:

 

1)	Reclassifications of some accounts in order to improve the accounting analysis, which however do not represented significant higher expenses i.e a) provisions of SARs in P&C and Life businesses that were registered in “personnel expenses” in 2006 are reclassified to “operating expenses” in 2007, b) in the Health business, the collection of medical assistance services that were registered in “technical income” in 2006 is reclassified to “operating expenses recoveries” and c) In Life business, the expenses of collection fees from “Seguros Multiples” that were registered net of its sales until last year, are reclassified to “operating expenses”.
2)	Extraordinary provisions corresponded to previous fiscal earnings and provisions for premiums not collected according to Superintendence’s regulations.
3)	Expenses related to the August earthquake, which include voluntary donations for about US$220 thousand and non-recurrent professional fees.

Excluding the effect of such accounting reclassifications and provisions, the operating expenses variation was 26.5% YoY, which is highly related to higher production costs, higher payment for fee intermediation with brokers and higher advertising campaigns in line with the company growth in the retail segment, which grew 41% YoY in P&C; meanwhile individual life grew 33%.

 

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The higher operating expenses reported during the last quarters responds to the idea of increasing the individual client base and the cross-sale of products for these clients, which should allow the company to generate a more stable income and have a better estimate of claims related expenses.

 

With respect to the 2Q07, a 12.6% growth of operating expenses was reported and is explained mainly by higher expenses related to an increase in retail products mentioned before as well as higher expenses for donations, some provisions for premiums collections and extraordinary provisions corresponding to former periods.

 

VI.3 Claims

 

Net Earned Loss ratio (NEL) reached 83.9% in 3Q07, 15.4 percentage points above 3Q06 and 13.1 percentage points above 2Q07; as a consequence of the increase in claims for the P&C. business. NEL of 98.7% for P&C is mainly explained by the August 15^th earthquake. Overall, net provisions for losses related to the earthquake accounted for 26.2% of net premiums earned for P&C during the 3Q07.

 

On the other hand, in the Life segment, NEL decreases from 75.3% in 3Q06 to 69.7% in 3Q07 but increases 2.7 percentage points with respect to 2Q07 basically following the growth of the business and for an additional reserve for claims in the Pension fund segment affected by the inflation rate.

 

In addition, the NEL in the Health segment is slightly higher by 0.3 percentage points than that in 2Q07 but is lower by 1.6 percentage points with respect to 3Q06.

 

As of September 2007, the NEL consolidated reached 76.0% vs. 71.9% attained during the same period of last year.

 

The Net Claims reached US$64.7 million, reflecting an increase of 23.5% QoQ and 40.2% YoY. In both cases, the increase is mainly explained by the effect of the earthquake that stroke the southern area of the country, for which PPS retained the risk for US$6 million, plus US$1.8 million for the policy reinstatement costs. Likewise, in PV, the Net claims increased 25% QoQ, as a consequence of the business growth and for additional reserves in claims for the Pension fund business, which are adjusted to inflation.

 

It is however noteworthy, that the subsidiaries of PPS Group have lower level of retained claims when compared to their competitors in the different business segments

 

VI.4 Investment Portfolio

 

Financial income reported for 3Q07 was S$13.4 million, reflecting an increase of 1.4% QoQ and 35.6% YoY, following a reduction of international rates which was compensated by the growing investment portfolio. At the same time, some important capital gains were reported due to a better performance of the Lima Stock Exchange General Index, amounting to US$4.7 million in 3Q07 and US$17.7 million year to date.

 

The investment/securities portfolio reached US$ 798.9 million by the end of 3Q07, up from US$ 778.9 million at the end of 2Q07 and US$ 750.1 million by the end of 3Q06.

 

VI.5 Market Share

 

The total market for P&C and Life reported Total Gross Premiums reaching US$ 896.0 million for the 9M07, which were 7.3% larger than total premiums for 9M06. As of September 2007, PPS grew 26.8% YoY meanwhile PV did 9.1%. Altogether, PPS and PV registered an improvement of 19.9% during the 9M07.

 

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V1.6 Business Lines

 

Total contribution to BAP
(In US$, thousands)

											Consolidated			Ajustments for			Total
											Net Earnings			Consolidation			Contribution
Period		PPS			PV			EPS			at PPS			and Minorities			to BAP
3Q06			2,500			1,740			1,278			5,519			(933	)		4,586
4Q06			35,165			4,095			885			40,144			(35,610	)		4,534
1Q07			1,883			6,147			705			8,735			(2,119	)		6,616
2Q07			2,263			3,931			585			6,779			(1,645	)		5,134
3Q07			-6,615			2,108			598			(3,908	)		948			(2,960	)
Var% 3Q07/2Q07			-392	%		-46	%		2	%		-158	%					-158	%

 

Property & Casualty (PPS)

 

Premiums for the P&C business grew 20.7% YoY and dropped 16% QoQ, mainly due to seasonality in segments such us Aviation, Marine Hull, and others. Total premiums accumulated as of September 2007 grew 26%, reaching US$175.9 million vs. US$138.8 million achieved during the same period of last year. This important growth is led by the decision taken by the company to increase its production in the retail segment and by its re-composition of its corporate segment, mainly in the marine hull, aviation and technical segment.

 

This growth led to increased reserves provisions for about 56% or US$3.8 million. For this reason, Net Premiums Earned reflected an increase of 8% during the year.

 

As was mentioned before, due to the August earthquake, PPS has registered total claims of US$44 million as of the end of September. However, as a result of the excess of loss coverage in the catastrophic policies, the net retained loss by PPS was US$ 6.0 million, plus the reinstatement costs related to those policies, which amounted to US$1.8 million. For this reason and having also experienced this quarter severe claims related to the fire segment, medical assistance and technical segment, the underwriting result for the 3Q07 was US$-5.7 million and the net income after minority interest was US$-6.6 million, compensated in part by better financial returns and gains on the sales of securities, which were 134% higher YoY and 6.7% QoQ.

 

As of September 2007, PPS registered an accumulated loss of US$ 2.5 million vs. a net income of US$ 4.8 million achieved in the same period of last year.

 

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Life (PV)

 

Total premiums amounted to US$36.8 million in 3Q07, up 22.0% QoQ and 22.8% YoY. The QoQ growth is explained by the larger production in the pension fund segment as a result of the favorable performance of Prima AFP and as a consequence of double collection in the month of July (gratificaciones). Total premiums generated by PV are growing by 9% for the year to date.

 

The NEL in 3Q07 reached 69.7%, 5.6 percentage points lower YoY led by larger production, and 2.7 percentage points higher QoQ, mainly due to a higher inflation rate in September (0.6%), which generated an additional reserve for claims in the Pension fund segment adjusted for inflation. Nevertheless, these larger reserves will be compensated in the next quarter with the adjustment in the assets that originated such reserves.

 

On the other hand, financial income increased by 4.4% QoQ and 35.8% YoY, basically due to the better investment portfolio performance; even though this was partially compensated by the larger provisions for income tax generated this quarter given the revaluation in local currency of the US dollar debt. Net income after minority interest in 3Q07 amounted to US$2.4 million, 30% higher YoY but 44% lower QoQ.

 

As of September 2007, PV reported a net income after minority interest of US$12.2 million vs. US$5.4 million registered during the same period of last year.

 

Health (EPS)

 

Premiums for Health business grew 6.8% QoQ and 17.6% YoY, mainly due to higher production in corporate health plans. The underwriting result reached US$3.7 million, 60.9% superior YoY, given the larger production and lower claims. With respect to the previous quarter, the underwriting result had no significant variation due to a compensation generated by a higher NEL in 79.5%, 0.3 percentage points above the previous quarter. Net income in 3Q07 reached US$0.6 million, 2.4% above the previous quarter and 53.2% below YoY. In 3Q06, the health business registered an extraordinary earning given the reversals of provisions for the tax income payment according to the tax ruling in technical reserves.

 

Net income as of September 2007 reached US$1.9 million, lower than US$2.9 million registered during the same period of last year. The reduction is explained by the reversals in provisions for income tax in 3Q06 mentioned above, and larger operating expenses during this year.

 

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VII. ECONOMIC OUTLOOK

The Peruvian economy continued showing a positive development during 2007, with an annual growth of +7.7% between January and August, led by the dynamism of the private investments, and the sectors associated with domestic demand, such as construction and non-primary manufacture. In the construction sector, accumulated year to date growth reaches +15.8% as a result of the public infrastructure dynamism, the private productive infrastructure development and increasing auto construction.

 

Furthermore, the industrial non-primary sector shows growth of +12% in the same period explained by the increased production of consumption goods and intermediate goods, especially those related to construction. On the other hand, primary sectors show certain stagnation, especially the mining industry, where the lower production of gold (-22%) could not be compensated by the expansion registered in the extraction of zinc (+25.5%) and cooper (+13.7%). In spite of this, the official economic perspectives recently revised and published by the MEF and BCR, have improved, projecting a sustainable dynamic in the private sectors, which should bring growth for this year over 7 % and for the following years to about 6%.

 

 

External Sector
 

Between January and August 2007, the trade balance surplus was of US$ 5,015MM, an amount US$ 355MM lower than the surplus achieved for the same period 2006. This is explained by annualized import growth which is already higher than exports in a context of domestic demand growing at a higher pace than economic activity. Thus, exports grew 16.5% in the first eight month of the year., reaching US$ 17,286MM though this growth is explained by higher international prices of exported goods (+14.7%), since volumes increased by only 1.6% On the other hand, imports grew +29.6% in the same period, due mainly to investments in capital assets (+44.6). Finally the international reserves continued growing, closing the third quarter in US$22,827MM.

 

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Prices and Exchange rate

 

To the closing of 3Q07, annualized inflation reached 2.8% within the range set as goal of the Central Bank BCR between (1% and 3%), despite to the growing trend of the last months. The price increases of the last months are due to specific factors related to the supply side, especially to the increases in the international prices of oil and some cereals. Nevertheless, there is a perception of increasing underlying inflation. In this context, BCR increased its reference rate to 50 bp. throughout the quarter, as a preventive measure to moderate the internal demand expansion which puts pressure on the referred underlying inflation. With regards to the exchange rate, it closed in September at S/. 3.085 per dollar, even thought on the fist two weeks of October the Sol appreciation lead the US Dollar to a market value of about S/. 3.02. This reflects an accumulated appreciation of the Nuevo Sol that surpassed 5.0% over the year. Due to this development the Central Bank had to support the US currency through interventions in the foreign exchange market, to reduce volatility, accumulating US$ 6,737MM on net purchases for the closed of 3Q07.

 

 

32

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During the period of January through August May, tax collections increased to S/. 35,368MM. This figure is 15.1% more in real terms than tax collections in the same period of 2006. This growth is explained principally, by increased collections of Income Tax (IR, +21.9 %), especially from corporation (+25.1% without regularizations) and Value Added Tax (IGV, +17.3%), fueled especially in the last months by imports. On the public spending side of the Central Government, an increase of 18.2 % up to August is observed and explained by an increase of +19.3% in the current expenditure and lower growth of public investments (+8.7%), . Hence, the economic result of the Central Government to the closing of August reveals a surplus of S/. 6,708MM, S/.644MM above the one registered on the same period in 2006.

 

 

Banking System

 

At the closing of August 2007, total loan placements in the banking system continued to grow and reached US$19,496MM, amount that represents an increase of +35.63% compared to the same period of 2006 and of +23.7 with respect to the closing of 2006. This result is mainly supported by the stronger credit activity in the retail segments such as consumer loans (+55.0% YoY), though SME lending revealed also strong growth (+33.9% YoY), as did mortgages (+22.6% YoY). The lending dynamism came along with a stable and low delinquencies level of 1.6%.

 

Looking at the banking system’s main source of funding, deposits also continued increasing and reached US$22,263MM, which represents a growth rate of +25.6% YoY and of +17.7% for the year to date. Growth was observed in demand deposits (+33.2%) savings deposits (+17.2%) and time deposits (+27.2%).

 

Dollarization of the banking system continues decreasing in both loans and deposits. This way, dollar lending grew by +27.6% YoY, while soles lending grew at a more accelerated rate of +52.3%. Furthermore, dollar loans represent now 63.6% of total loan portfolio (as of August 2007), while these used to make up for 67.6% a year ago.

 

Dollarization of deposits also dropped from levels of 63.8% to 59.0% in the same period, which reflects an increasing preference for saving in national currency in view of the appreciation experienced by the Nuevo Sol in the last year.

 

Finally, interest rates have stabilized in the last months. This way, the TAMN (local currency lending rate) closed 3Q07 at 22.5%, below the closing level of 3Q06 (23.9%), while TAMEX (foreign currency lending rate) closed 3Q07 at 10.5%, (10.6% and 10.8% at the closing of 3Q06 and 4Q06, respectively). On the funding side, the TIPMN (local currency deposit rate) and the TIPMEX (Foreign currency deposit rate) closed this 3Q07 at 3.2% and 2.2% respectively, which are basically the same levels from December 2006.

 

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Main Financial Indicators

		2006															2007
		IQ			2Q			3Q			4Q			Year			IQ			2Q			3Q			Year (f)
GDP (US$ MM)			20,455			24,095			23,523			25,036			93,108			23,871			27,479			n.d.			106,586
Real GDP (var.%)			7.9			5.8			8.6			8.1			7.6			8.0			7.6			n.d.			7.5
GDP per-cápita (US$)			3,019			3,537			3,434			3,635			3,294			3,447			3,947			n.d.			3,817
Domestic demand (var. %)			11.1			7.1			10.3			12.0			10.1			10.6			10.2			n.d.			9.2
Consumption (var. %)			5.1			6.4			6.2			7.3			6.2			7.7			7.5			n.d.			7.0
Private Investment (var. %)			22.4			17.0			16.7			19.7			18.9			17.3			22.9			n.d.			19.0
CPI (annual change, %)			2.5			1.8			2.0			1.5			1.1			0.3			1.6			2.8			3.2
Echange rate, eop (S/. per US$)			3.36			3.26			3.25			3.20			3.20			3.19			3.17			3.09			3.00
Devaluation (annual change, % )			2.9			0.2			-2.8			-6.8			-6.8			-5.1			-2.8			-5.1			-6.1
Exchange rate , average (S/. per US$)			3.34			3.29			3.24			3.22			3.27			3.19			3.17			3.15			3.13
Non- Financial Public Sector (% of GDP)			3.9			5.7			1.5			-2.6			2.1			4.9			8.2			n.d.			2.0
Central govermment current revenues (% of GD			17.7			18.5			16.9			16.2			17.3			17.3			20.5			n.d.			17.9
Tax Income (% of GDP)			15.1			16.4			14.2			14.0			14.9			14.9			17.7			n.d.			15.6
Non Tax Income (% of GDP)			2.6			2.1			2.7			2.1			2.4			2.4			2.8			n.d.			2.3
Current expenditures (% of GDP)			11.7			10.8			12.7			13.6			12.2			11.7			14.2			n.d.			12.4
Capital Expenditures (% of GDP)			0.8			1.3			2.4			3.2			2.0			0.8			1.4			n.d.			2.5
Trade Balance (US$ MM)			1,257			2,190			2,885			2,602			8,934			1,455			2,167			n.d.			8,600
Exports (US$ MM)			4,640			5,824			6,559			6,777			23,800			5,687			6,647			n.d.			26,400
Imports (US$ MM)			-3,383			-3,635			-3,673			-4,175			-14,866			-4,232			-4,480			n.d.			17,800
Current Account Balance (US$ MM)			-219			426			1,273			1,110			2,589			-14			480.4			n.d.			1,900
Current Account Balance (% of GDP)			-1.1			1.8			5.4			4.4			2.8			-0.1			1.7			n.d.			1.8

 

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Credicorp Ltd. (NYSE: BAP) is the leading financial services holding company in Peru. It primarily operates via its four principal Subsidiaries: Banco de Credito del Peru (BCP), Atlantic Security Holding Corporation (ASHC), El Pacífico-Peruano Suiza Compañía de Seguros y Reaseguros (PPS) and Grupo Credito. Credicorp is engaged principally in commercial banking (including trade finance, corporate finance and leasing services), insurance (including commercial property, transportation and marine hull, automobile, life, health and pension fund underwriting insurance) and investment banking (including brokerage services, asset management, trust, custody and securitization services, trading and investment). BCP is the Company's primary subsidiary.

 

Safe Harbor for forward-looking statements:
 

This material includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statement other than statements of historical information provided herein are forward-looking and may contain information about financial results, economic conditions, trends and known uncertainties.

 

The Company cautions readers that actual results could differ materially from those expected by the Company, depending on the outcome of certain factors, including, without limitation: (1) adverse changes in the Peruvian economy with respect to the rates of inflation, economic growth, currency devaluation, and other factors, (2) adverse changes in the Peruvian political situation, including, without limitation, the reversal of market-oriented reforms and economic recovery measures, or the failure of such measures and reforms to achieve their goals, and (3) adverse changes in the markets in which the Company operates, including increased competition, decreased demand for financial services, and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

 

The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in the Company’s business strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.

 

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CREDICORP LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In US$ thousands, IFRS)

 

		As of
											Sep 07/			Sep 07/
		September 2007			June 2007			September 2006			Sep 06/			June 07
Assets
Cash and due from banks
Non-interest bearing			541,062			516,676			447,091			21.0	%		4.7	%
Interest bearing			1,891,059			2,041,200			2,248,202			-15.9	%		-7.4	%
Total cash and due from banks			2,432,122			2,557,876			2,695,293			-9.8	%		-4.9	%
Marketable securities, net			49,465			53,569			70,534			-29.9	%		-7.7	%
Loans			7,509,085			7,031,734			5,592,231			34.3	%		6.8	%
Current			7,440,873			6,964,320			5,504,991			35.2	%		6.8	%
Past Due			68,212			67,414			87,240			-21.8	%		1.2	%
Less - Reserve for possible loan losses			(204,204	)		(191,747	)		(188,198	)		8.5	%		6.5	%
Loans, net			7,304,881			6,839,987			5,404,033			35.2	%		6.8	%
Investments securities available for sale			4,657,859			4,686,444			2,803,636			66.1	%		-0.6	%
Reinsurance assets			91,325			65,831			37,880			141.1	%		38.7	%
Premiums and other policyholder receivables			86,779			85,780			69,835			24.3	%		1.2	%
Property, plant and equipment, net			254,820			256,822			239,705			6.3	%		-0.8	%
Due from customers on acceptances			51,040			46,331			50,761			0.5	%		10.2	%
Other assets			853,365			726,776			486,987			75.2	%		17.4	%
Total Assets			15,781,656			15,319,416			11,858,664			33.1	%		3.0	%
Liabilities and shareholders' equity
Deposits and Obligations
Non-interest bearing			2,474,260			2,339,402			1,721,411			43.7	%		5.8	%
Interest bearing			7,848,572			7,813,199			6,253,175			25.5	%		0.5	%
Total deposits and Obligations			10,322,832			10,152,601			7,974,586			29.4	%		1.7	%
Due to banks and correspondents			1,695,923			1,685,689			924,499			83.4	%		0.6	%
Acceptances outstanding			51,040			46,331			50,761			0.5	%		10.2	%
Reserves for property and casualty claims			638,270			578,754			528,258			20.8	%		10.3	%
Reserve for unearned premiums			118,986			112,086			90,029			32.2	%		6.2	%
Reinsurance payable			30,247			25,024			33,502			-9.7	%		20.9	%
Bonds and subordinated debt			494,234			504,948			406,734			21.5	%		-2.1	%
Other liabilities			693,131			548,719			445,090			55.7	%		26.3	%
Minority interest			133,968			130,111			108,288			23.7	%		3.0	%
Total liabilities			14,178,629			13,784,262			10,561,747			34.2	%		2.9	%
Net Shareholder's equity			1,603,026			1,535,154			1,296,917			23.6	%		4.4	%
Total liabilities and net shareholder's equity			15,781,656			15,319,416			11,858,664			33.1	%		3.0	%
Contingent Credits			4,702,435			4,393,139			3,555,593			32.3	%		7.0	%

 

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CREDICORP LTD. AND SUBSIDIARIES

QUARTERLY INCOME STATEMENT

(In US$ thousands, IFRS)

 

		Quarter									Change						Year ended						Change
		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07			Sept 07			Sept 06			Sept 07/Sept 06
Interest income and expense
Interest and dividend income			270,182			248,976			198,339			36.2	%		8.5	%		740,005			571,199			29.6	%
Interest expense			(109,127	)		(89,671	)		(77,672	)		40.5	%		21.7	%		(280,787	)		(205,545	)		36.6	%
Net interest and dividend income			161,055			159,305			120,667			33.5	%		1.1	%		459,218			365,653			25.6	%
Provision for loan losses			(7,922	)		(6,090	)		9,795			-180.9	%		30.1	%		(18,430	)		5,997			-407.3	%
Non financial income
Fee income			86,270			76,100			63,935			34.9	%		13.4	%		236,446			174,218			35.7	%
Net gain on foreign exchange transactions			14,710			12,796			9,515			54.6	%		15.0	%		39,462			31,095			26.9	%
Net gain on sales of securities			5,124			14,644			6,616			-22.6	%		-65.0	%		37,714			12,857			193.3	%
Other			6,837			4,486			5,220			31.0	%		52.4	%		18,540			18,254			1.6	%
Total fees and income from services, net			112,942			108,026			85,286			32.4	%		4.6	%		332,162			236,424			40.5	%
Insurance premiums and claims
Net premiums earned			74,511			71,657			65,521			13.7	%		4.0	%		216,159			186,521			15.9	%
Net claims incurred			(19,617	)		(14,017	)		(9,553	)		105.4	%		40.0	%		(47,173	)		(32,429	)		45.5	%
Increase in cost for life and health policies			(45,085	)		(38,363	)		(36,585	)		23.2	%		17.5	%		(122,536	)		(105,692	)		15.9	%
Total other operating income, net			9,809			19,278			19,383			-49.4	%		-49.1	%		46,450			48,400			-4.0	%
Operating expenses
Salaries and employees benefits			(75,649	)		(74,385	)		(61,676	)		22.7	%		1.7	%		(219,013	)		(172,532	)		26.9	%
Administrative, general and tax expenses			(48,703	)		(47,981	)		(39,669	)		22.8	%		1.5	%		(140,528	)		(113,489	)		23.8	%
Depreciation and amortization			(12,857	)		(12,488	)		(10,115	)		27.1	%		3.0	%		(37,809	)		(32,549	)		16.2	%
Merger Expenses			-			-			(271	)		100.0	%		100.0	%		-			(271	)		-100.0	%
Other			(25,916	)		(25,031	)		(40,312	)		-35.7	%		3.5	%		(75,472	)		(90,637	)		-16.7	%
Total operating expenses			(163,125	)		(159,886	)		(152,042	)		7.3	%		2.0	%		(472,821	)		(409,478	)		15.5	%
Income before translation results, workers' profit sharing and income taxes			112,758			120,633			83,089			35.7	%		-6.5	%		346,579			246,997			40.3	%
Translation result			13,811			1,728			832			1559.2	%		699.3	%		17,184			9,501			80.9	%
Workers’ profit sharing			(4,274	)		(2,874	)		(3,216	)		32.9	%		48.7	%		(10,910	)		(8,723	)		25.1	%
Income taxes			(29,144	)		(25,759	)		(25,384	)		14.8	%		13.1	%		(79,065	)		(69,319	)		14.1	%
Net income			93,152			93,727			55,322			68.4	%		-0.6	%		273,788			178,456			53.4	%
Minority interest			2,848			6,324			3,997			-28.8	%		-55.0	%		17,068			11,513			48.2	%
Net income attributed to Credicorp			90,304			87,403			51,324			75.9	%		3.3	%		256,720			166,943			53.8	%

 

 

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CREDICORP LTD. AND SUBSISIARIES

SELECTED FINANCIAL INDICATORS

 

		Quarter									Year ended
		3Q07			2Q07			3Q06			September 07			September 06
Profitability
Net income per common share (US$ per share)(1)			1.13			1.10			0.64			3.22			2.09
Net interest margin on interest earning assets (2)			5.16	%		5.46	%		4.88	%		5.43	%		5.15	%
Return on average total assets (2)(3)			2.32	%		2.41	%		1.74	%		1.84	%		1.48	%
Return on average shareholders' equity (2)(3)			23.02	%		23.66	%		16.34	%		22.87	%		18.35	%
No. of outstanding shares (millions)(4)			79.76			79.76			79.76			79.76			79.76
Quality of loan portfolio
Past due loans as a percentage of total loans			0.91	%		0.96	%		1.56	%		0.91	%		1.56	%
Reserves for loan losses as a percentage of
total past due loans			299.37	%		284.43	%		215.72	%		299.37	%		215.72	%
Reserves for loan losses as a percentage of
total loans			2.72	%		3.71	%		3.37	%		2.72	%		3.37	%
Operating efficiency
Oper. expense as a percent. of total income (5)			40.77	%		42.16	%		42.93	%		41.77	%		42.06	%
Oper. expense as a percent. of av. tot. assets(2)(3)(5)			3.53	%		3.71	%		3.78	%		3.80	%		3.76	%
Average balances (millions of US$) (3)
Interest earning assets			12,491			11,669			9,893			11,280			9,463
Total Assets			15,551			14,525			11,795			13,938			11,309
Net equity			1,569			1,478			1,256			1,451			1,200

 

(1) Based on Net Income attributed to BAP. Number of shares outstanding of 79.8 million in all periods.

(2) Ratios are annualized.

(3) Averages are determined as the average of period-beginning and period-ending balances.

(4) Net of treasury shares. The total number of shares was of 94.38 million.

(5) Total income includes net interest income, fee income, net gain on foreign exchange transactions and net premiums earned.

Operating expense does not include Other expenses.

 

38

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BANCO DE CREDITO DEL PERU AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(In US$ thousands, IFRS)

 

		As of
		Sep-07			June 07			Sep-06			Sep07/ Sep 06			Sep07/ June07
ASSETS
Cash and due from banks			2,250,986			2,301,566			2,452,360			-8.21	%		-2.20	%
Cash and BCRP			1,975,785			1,848,191			1,994,080			-0.92	%		6.90	%
Deposits in other Banks			269,723			431,090			454,960			-40.72	%		-37.43	%
Interbanks			1,000			17,133			206			385.24	%		-94.16	%
Accrued interest on cash and due from banks			4,478			5,151			3,114			43.82	%		-13.07	%
Marketable securities, net			49,465			53,569			67,817			-27.06	%		-7.66	%
Loans
Current			7,383,196			6,923,441			5,430,468			35.96	%		6.64	%
Past Due			67,478			66,400			83,750			-19.43	%		1.62	%
Less - Reserve for possible loan losses			(202,877	)		(190,413	)		(185,608	)		9.30	%		6.55	%
Loans, net			7,247,797			6,799,427			5,328,609			36.02	%		6.59	%
Investment securities available for sale			2,854,728			2,858,817			1,357,617			110.27	%		-0.14	%
Property, plant and equipment, net			196,567			197,980			187,808			4.66	%		-0.71	%
Due from customers acceptances			50,962			46,220			50,761			0.40	%		10.26	%
Other assets			578,789			465,636			272,564			112.35	%		24.30	%
Total Assets			13,229,294			12,723,215			9,717,537			36.14	%		3.98	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and obligations			10,263,180			9,459,008			7,455,066			37.67	%		8.50	%
Demand deposits			3,199,876			3,258,797			2,361,330			35.51	%		-1.81	%
Saving deposits			2,167,592			2,026,729			1,768,181			22.59	%		6.95	%
Time deposits			4,067,677			3,317,527			2,608,251			55.95	%		22.61	%
Severance indemnity deposits (CTS)			785,398			820,026			684,988			14.66	%		-4.22	%
Interest payable			42,637			35,928			32,317			31.93	%		18.67	%
Due to banks and correspondents			811,398			1,301,216			507,526			59.87	%		-37.64	%
Bonds and subordinated debt			523,298			537,217			432,114			21.10	%		-2.59	%
Acceptances outstanding			50,962			46,220			50,761			0.40	%		10.26	%
Other liabilities			535,450			415,391			381,648			40.30	%		28.90	%
Total liabilities			12,184,288			11,759,051			8,827,115			38.03	%		3.62	%
NET SHAREHOLDERS' EQUITY			1,045,006			964,164			890,422			17.36	%		8.38	%
Capital stock			364,706			364,706			364,706			0.00	%		0.00	%
Reserves			282,189			282,189			242,889			16.18	%		0.00	%
Unrealized Gains and Losses			56,411			66,066			46,428			21.50	%		-14.61	%
Retained Earnings			96,245			96,484			56,337			70.84	%		-0.25	%
Income for the year			245,454			154,719			180,062			36.32	%		58.65	%
TOTAL LIABILITIES and NET SHAREHOLDERS' EQUITY			13,229,294			12,723,215			9,717,537			36.14	%		3.98	%
CONTINGENT CREDITS			4,392,006			4,070,415			3,234,918			35.77	%		7.90	%

 

 

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BANCO DE CREDITO DEL PERU AND SUBSIDIARIES

QUARTERLY INCOME STATEMENT

(In US$ thousands, IFRS)

 

		Three months ended									Change						Nine months ended						Change
		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07			Sep 07			Sep 06			Sep 07/Sep 06
Interest income and expense
Interest and dividend income			240,181			220,180			174,829			37.4	%		9.1	%		655,750			506,474			29.5	%
Interest expense			(97,426	)		(79,035	)		(67,766	)		43.8	%		23.3	%		(248,559	)		(180,468	)		37.7	%
Net interest and dividend income			142,755			141,146			107,063			33.3	%		1.1	%		407,190			326,006			24.9	%
Provision for loan losses			(9,241	)		(6,885	)		7,392			-225.0	%		34.2	%		(21,986	)		1,241			-1872.1	%
Non financial income
Banking services commissions			75,146			66,986			59,440			26.4	%		12.2	%		204,602			170,148			20.2	%
Net gain on foreign exchange transactions			13,526			12,778			9,674			39.8	%		5.9	%		38,241			31,152			22.8	%
Net gain on sales of securities			1,537			7,586			3,112			-50.6	%		-79.7	%		18,332			3,513			421.8	%
Other			1,778			1,479			1,950			-8.8	%		20.2	%		5,895			8,809			-33.1	%
Total fees and income from services, net			91,987			88,827			74,176			24.0	%		3.6	%		267,070			213,622			25.0	%
Operating expenses
Salaries and employees benefits			(59,669	)		(56,865	)		(46,370	)		28.7	%		4.9	%		(167,836	)		(131,743	)		27.4	%
Administrative expenses			(42,485	)		(42,631	)		(34,690	)		22.5	%		-0.3	%		(122,870	)		(100,494	)		22.3	%
Depreciation and amortization			(9,627	)		(9,396	)		(8,533	)		12.8	%		2.5	%		(28,446	)		(26,476	)		7.4	%
Other			(8,033	)		(7,635	)		(25,885	)		-69.0	%		5.2	%		(25,406	)		(52,664	)		-51.8	%
Total operating expenses			(119,814	)		(116,527	)		(115,478	)		3.8	%		2.8	%		(344,558	)		(311,376	)		10.7	%
Income before translation results, workers' profit sharing and income taxes			105,687			106,562			73,152			44.5	%		-0.8	%		307,717			229,492			34.1	%
Translation result			12,028			970			703			1610.0	%		1139.7	%		14,308			8,419			69.9	%
Workers’ profit sharing			(3,694	)		(3,216	)		(3,246	)		13.8	%		14.9	%		(10,090	)		(8,195	)		23.1	%
Income taxes			(23,287	)		(22,254	)		(17,773	)		31.0	%		4.6	%		(66,480	)		(49,651	)		33.9	%
Net income			90,735			82,062			52,837			71.7	%		10.6	%		245,454			180,065			36.3	%

 

 

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BANCO DE CREDITO DEL PERU AND SUBSIDIARIES

SELECTED FINANCIAL INDICATORS

 

		Three months ended									Nine months ended
		3Q07			2Q07			3Q06			Sep-07			Sep-06
Profitability
Net income per common share (US$ per share)(1)			0.071			0.064			0.041			0.191			0.140
Net interest margin on interest earning assets (2)			5.20	%		5.53	%		5.01	%		5.16	%		5.10	%
Return on average total assets (2)(3)			2.80	%		2.72	%		2.17	%		2.63	%		2.48	%
Return on average shareholders' equity (2)(3)			36.13	%		35.57	%		24.57	%		33.97	%		28.98	%
No. of outstanding shares (millions)			1,286.53			1,286.53			1,286.53			1,286.53			1,286.53
Quality of loan portfolio
Past due loans as a percentage of total loans			0.91	%		0.95	%		1.52	%		0.91	%		1.52	%
Reserves for loan losses as a percentage of
total past due loans			300.65	%		286.77	%		221.62	%		300.65	%		221.62	%
Reserves for loan losses as a percentage of
total loans			2.72	%		2.72	%		3.37	%		2.72	%		3.37	%
Operating efficiency
Oper. expense as a percent. of total income (4)			48.30	%		49.29	%		50.85	%		49.10	%		49.06	%
Oper. expense as a percent. of av. tot. assets(2)(3)(4)			3.45	%		3.61	%		3.69	%		3.42	%		3.56	%
Capital adequacy
Total Regulatory Capital (US$Mn)			877.7			793.2			753.1			877.7			753.1
'Risk-weighted assets (US$Mn)			7,579.0			7,063.3			5,501.5			7,579.0			5,501.5
Regulatory capital / risk-weighted assets (5)			11.3	%		10.7	%		10.4	%		11.3	%		10.4	%
Average balances (millions of US$) (3)
Interest earning assets			10,970.7			10,203.3			8,544.0			10,526.4			8,524.4
Total Assets			12,976.3			12,063.2			9,718.5			12,451.9			9,698.9
Net equity			1,004.6			922.8			860.3			963.6			828.6

 

(1) Shares outstanding of 1,287 million is used for all periods since shares have been issued only for capitalization of profits and inflation adjustment.

(2) Ratios are annualized.

(3) Averages are determined as the average of period-beginning and period-ending balances.

(4) Total income includes net interest income, fee income and net gain on foreign exchange transactions.

Operating expense includes personnel expenses, administrative expenses and depreciation and amortization

(5) Risk-weighted assets include market risk assets

 

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EL PACIFICO-PERUANO SUIZA Y SUBSIDIARIAS

SELECTED FINANCIAL INDICATORS

(In Thousand dollars)

 

		Balance to and for the period
		of three months ending of									Change						Six month ended						Change
		3Q07			2Q07			3Q06			3Q07/3Q06			3Q07/2Q07			Sep-07			Sep-06			Sep06/Sep07
Results
Total Gross Premiums			115,550			117,407			95,748			20.7	%		-1.6	%		338,256			285,038			18.7	%
Net Primiums			91,361			91,386			80,238			13.9	%		0.0	%		265,691			238,390			11.5	%
Increase in Reserves			14,236			17,366			12,865			10.7	%		-18.0	%		42,495			46,155			-7.9	%
Net Premiums Earned			77,125			74,020			67,373			14.5	%		4.2	%		223,195			192,235			16.1	%
Net Claims			64,702			52,379			46,138			40.2	%		23.5	%		169,709			138,121			22.9	%
Underwriting results			-1,765			7,885			11,912			-114.8	%		-122.4	%		14,922			27,740			-46.2	%
Financial income			13,405			13,221			9,889			35.6	%		1.4	%		39,518			33,885			16.6	%
Other Income			8,626			7,385			3,742			130.5	%		16.8	%		28,143			11,604			142.5	%
Salaries and Employees Benefits			9,395			9,409			9,570			-1.8	%		-0.1	%		28,323			24,430			15.9	%
General Expenses			7,342			5,864			4,634			58.5	%		25.2	%		19,414			14,939			30.0	%
Other Operating Expenses			19,201			17,711			11,682			64.4	%		8.4	%		52,094			38,321			35.9	%
Translation Results			1,599			242			109			1369.4	%		559.7	%		2,161			866			149.5	%
Income Tax			2,734			316			2,504			9.2	%		765.9	%		4,403			6,251			-29.6	%
Net Income before Minority Interest			-2,620			9,190			6,586			-139.8	%		-128.5	%		19,074			16,527			15.4	%
Minority Interest			1,288			2,412			1,067			20.7	%		-46.6	%		7,468			3,330			124.3	%
Net Income after Minority Interest			-3,908			6,779			5,520			-170.8	%		-157.7	%		11,606			13,198			-12.1	%
Balance (end of period)
Total Assets			1,115,080			1,044,462			946,283			10.4	%		6.8	%		1,115,080			946,283			17.8	%
Investment on Securities and Real State (4)			798,878			778,850			750,125			3.8	%		2.6	%		798,878			750,125			6.5	%
Technical Reserves			758,482			691,212			618,776			11.7	%		9.7	%		758,482			618,776			22.6	%
Net Equity			208,208			212,582			209,923			1.3	%		-2.1	%		208,208			209,923			-0.8	%
Ratios
Net Underwriting Results			-1.5	%		6.7	%		12.4	%		-			-			4.4	%		9.7	%		-
Net Earned Loss Ratio			83.9	%		70.8	%		68.5	%		-			-			76.0	%		71.9	%		-
Return on Average Equity (1)(2)			-7.2	%		13.7	%		11.9	%		-			-			7.0	%		8.9	%		-
Return on Total Premiums			-3.4	%		5.8	%		5.8	%		-			-			3.4	%		4.6	%		-
Net Equity / Total Assets			18.7	%		20.4	%		22.2	%		-			-			18.7	%		22.2	%		-
Increase in Technical Reserves			15.6	%		19.0	%		16.0	%		-			-			16.0	%		16.0	%		-
Expenses / Net Premiums Earned			25.6	%		23.9	%		23.0	%		-			-			24.9	%		22.5	%		-
Expenses / Average Assets (1)(2)			7.5	%		7.1	%		7.0	%		-			-			7.1	%		6.5	%		-
Combined Ratio of PPS + PS (3)			127.9	%		107.8	%		99.5	%		-			-			114.1	%		100.9	%		-
- Claims / Net Premiums Earned			89.4	%		71.4	%		66.0	%		-			-			77.9	%		67.6	%		-
- Espenses and Commissios / Net Premiums Earned			38.6	%		36.3	%		33.5	%		-			-			36.2	%		33.4	%		-

 

(1) Averages are determined as the average of period-beginning and period-ending balance

(2) Annualized

(3) Without consolidated adjunstments

(4) In 2006 Real Estate Investment were included

 

42

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	CREDICORP LTD.
Date: November 9, 2007	By:	/s/ Guillermo Castillo
		Guillermo Castillo
		Authorized Representative

 

43

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