SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

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

Securities Exchange Act of 1934

For the month of May 2023

Commission File Number: 001-14014

CREDICORP LTD.

(Translation of registrant’s name into English)

Of our subsidiary

Banco de Credito del Peru:

Calle Centenario 156

La Molina

Lima 12, Peru

(Address of principal executive office)

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

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

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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.

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	Operating and Financial Highlights		03
	Senior Management Quotes		05
	Fourth Quarter 2023 Earnings Conference Call		06
	Summary of Financial Performance and Outlook		07
	Financial Overview		12
	Credicorp’s Strategy Update		13
	Analysis of 1Q23 Consolidated Results
	01	Loans and Portfolio Quality	16
	02	Deposits	24
	03	Interest Earning Assets and Funding	26
	04	Net Interest Income	27
	05	Provisions	30
	06	Other Income	33
	07	Insurance Underwriting Results	36
	08	Operating Expenses	39
	09	Operating Efficiency	41
	10	Regulatory Capital	42
	11	Economic Outlook	44
	12	Appendix	48

 

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Earnings Release 1Q / 2023

Operating and Financial Highlights

Credicorp Ltd. Reports First Quarter 2023 Financial and Operating Results

ROE of 18.7% Driven by Resilient Core Income

Cost of Risk Stable Sequentially Remaining High impacted by Social and Climatic Events in Peru

Lima, Peru – May 5, 2023 – Credicorp Ltd. (“Credicorp” or “the Company”) (NYSE: BAP | BVL: BAP), the leading financial services holding company in Peru with a presence in Chile, Colombia, Bolivia and Panama today reported its unaudited results for the quarter ended March 31, 2023. Financial results are expressed in Soles and are presented in accordance with International Financial Reporting Standards (IFRS). Effective 1Q23, the Company reports under IFRS 17 accounting standards for insurance contracts. While the impact on consolidated net income is not material, the reclassification of line items in the P&L has impacted the efficiency ratio. To facilitate comparability, figures for 1Q22 and 4Q22 have been restated to reflect IFRS 17.

1Q23 OPERATING AND FINANCIAL HIGHLIGHTS

SENIOR MANAGEMENT QUOTES

FIRST QUARTER 2023 EARNINGS CONFERENCE CALL

*Contributions to Credicorp reflect eliminations for consolidation purposes (eliminations for transactions among Credicorp’s subsidiaries or between Credicorp and its subsidiaries).

- At BCP Stand Alone, the figure is lower than net income because it does not include gains on investments in other Credicorp subsidiaries (Mibanco).

- At Mibanco, the figure is lower than net income because Credicorp owns 99.924% of Mibanco (directly and indirectly).

- The contribution of Grupo Pacífico presented here is higher than the earnings reported for Pacífico Seguros because it includes 100% of Crediseguros (including 48% under Grupo Credito).

Financial Overview

(1) Net Interest Margin = Net Interest Income (Excluding Net Insurance Financial Expenses) / Average Interest Earning Assets

(2) Funding Cost = Interest Expense (Does not include Net Insurance Financial Expenses) / Average Funding

(3) Internal Overdue Loans: includes overdue loans and loans under legal collection, according to our internal policy for overdue loans. Internal Overdue Ratio: Internal overdue loans / Total loans

(4) Non-performing loans (NPL): Internal overdue loans + Refinanced loans. NPL ratio: NPL / Total loans.

(5) Cost of risk = Annualized provision for loan losses, net of recoveries / Total loans.

(6) Efficiency Ratio = (Salaries and employee benefits + Administrative expenses + Depreciation and amortization + Association in participation) / (Net interest, similar income and expenses + Fee Income + Net gain on foreign exchange transactions + Net Gain From associates + Net gain on derivatives held for trading + Result on exchange differences + Insurance Underwriting Result)

(7) Regulatory Capital / Risk-weighted assets (legal minimum = 10% since July 2011).

(8) Tier 1 = Capital + Legal and other capital reserves + Accumulated earnings with capitalization agreement + (0.5 x Unrealized profit and net income in subsidiaries) - Goodwill - (0.5 x Investment in subsidiaries) + Perpetual subordinated debt (maximum amount that can be included is 17.65% of Capital + Reserves + Accumulated earnings with capitalization agreement + Unrealized profit and net income in subsidiaries - Goodwill).

(9) Common Equity Tier I = Capital + Reserves – 100% of applicable deductions (investment in subsidiaries, goodwill, intangibles and net deferred taxes that rely on future profitability) + retained earnings + unrealized gains.

Adjusted Risk-Weighted Assets = Risk-weighted assets - (RWA Intangible assets, excluding goodwill, + RWA Deferred tax assets generated as a result of temporary differences in income tax, in excess of 10% of CET1, + RWA Deferred tax assets generated as a result of past losses).”

(10) Consider shares held by Atlantic Security Holding Corporation (ASHC) and stock awards.

(11) Common Equity Tier I calculated based on IFRS Accounting.

Credicorp’s Strategy Update

Credicorp is advancing in its execution of a long-term strategy that focuses on three priorities: accelerating digital transformation and innovation; ensuring with have the best talent in place; and integrating sustainability at the core of our businesses.

On June 20, 2023, we will hold Credicorp’s Investor Day in New York through a hybrid format. Senior Management will present relevant advances and provide details on how each business leverages its synergies and Credicorp’s new capacities to strengthen the Group’s sustainable growth.

The following link contains details on this event https://www.credicorpday.com/

Main KPIs of Credicorp’s Strategy

(1) Figures for March 2022, December 2022, and March 2022

(2) Retail Monetary Transactions conducted through Retail Banking, Internet Banking, Yape and Telecredito/Total Retail Monetary Transactions in Retail Banking.

(3) Disbursements generated through leads/Total disbursements.

(4) Disbursements conducted through alternative channels/Total disbursements.

(5) Number of loans disbursed/ Total relationship managers.

(6) Amount transacted through Mobile Banking, Internet Banking, Yape y POS/ Total amount transacted through Retail Banking.

(7) Units sold by Retail Banking through digital channels/ Total number of units sold by Retail Banking.

Credicorp’s Strategy Update

Disruptive Initiatives: Yape

At the end of 1Q23, Yape had more than 12.3 million users, 71% of whom made transactions at least once a month. Additionally, 63% of Yape’s users utilize a BCP savings account to channel payments and 31%, Yapecard. The remaining 6% use Yape’s partnership platforms with Mibanco, Banco de la Nación and different Municipal Saving Banks. As of 2Q23, Yape users will be able to make transfers to users of other digital wallets that coexist in the Peruvian ecosystem.

Yape continues to grow by focusing on three main pillars:

As part of this first pillar, Yape has launched four major initiatives:

In September 2022, we launched Yape Promos, a functionality that offers Yape clients special discounts at affiliated establishments. In 1Q23, 476 thousand transactions were conducted through Yape Promos, which represented a total transaction amount of S/9.8 million.

Yape launched a Microloan functionality at the end of August 2022. In 1Q23, 148 thousand disbursements were made for a total of S/33.5 million. Additionally, thanks to data analysis, Yape has begun to derive Yaperos with larger credit needs to other channels for a complete credit risk assessment.

(1) Yape users that are Microbusinesses/ Total Yape Users

(2) BCP clients that are Yape users/ Total Yape Users

(3) Yapecard Users / Total Yape Users

(4) Yape users that have conducted at least one transaction in the last month

(5) Yape users that have conducted at least one transaction in the last month/Total Yape users

(6) Number of Yape users/ Active users

Integrating sustainability in our businesses

For more information about our sustainability strategy, program and initiatives, please review the following documents:

“Sustainability Strategy 2020-25” and “Annual and Sustainability Report 2022.” Noteworthy milestones hit in the first quarter of 2023 in the framework of the Sustainability Program include:

Governance Front – Strengthening our governance structure

Environmental Front – Driving environmental sustainability from the financial sector

Social Front – Expanding financial inclusion and educating about finance and entrepreneurship

Financial Inclusion:

Financial Education:

	The structural loan volume, measured in average daily balances, fell QoQ due to amortizations of Wholesale Banking loans due to a seasonal effect that is present every first quarter. This reduction was partially offset by a slight increase in loans volumes in ADB in Retail Banking and Mibanco, which have shifted their focus to concentrate on lower-risk clients in an adverse environment marked by social protests and damaging rains. YoY, structural loans in average daily balances grew due to expansion in Retail Banking segments; disbursements for working capital loans in Wholesale Banking; and growth in Mibanco’s portfolio during the second half of 2022.   The Structural NPL Ratio rose QoQ and YoY due to (i) growth in the NPL loan volume in Wholesale Banking, where the new overdue portfolio was already 100% provisioned given that provision models had collected said impairment in advance; (ii) deterioration in Mibanco’s portfolio, which was impacted by social protests and damaging rains; and (iii) growth in the overdue portfolio in Retail Banking, which was concentrated in the higher-risk disbursements made in 2022. This growth was partially offset by the sale of a judicial portfolio and write-offs registered in Retail Banking in 1Q23.

1.1.

Loans

Structural Loans (S/ millions)	As of			Volume change		% change		% Part. in total structural loans
	Mar 22	Dec 22	Mar 23	QoQ	YoY	QoQ	YoY	Mar 22	Dec 22	Mar 23
BCP Stand-alone	101,453	112,342	111,263	-1,078	9,810	-1.0%	9.7%	81.4%	81.6%	81.4%
Wholesale Banking	51,063	55,622	53,775	-1,847	2,712	-3.3%	5.3%	41.0%	40.4%	39.3%
Corporate	30,663	33,400	32,545	-855	1,881	-2.6%	6.1%	24.6%	24.3%	23.8%
Middle - Market	20,400	22,222	21,230	-992	831	-4.5%	4.1%	16.4%	16.1%	15.5%
Retail Banking	50,390	56,720	57,488	768	7,098	1.4%	14.1%	40.4%	41.2%	42.0%
SME - Business	4,709	5,750	5,546	-205	837	-3.6%	17.8%	3.8%	4.2%	4.1%
SME - Pyme	11,844	13,033	13,257	224	1,413	1.7%	11.9%	9.5%	9.5%	9.7%
Mortgage	18,830	20,073	20,282	209	1,452	1.0%	7.7%	15.1%	14.6%	14.8%
Consumer	10,975	12,738	12,984	247	2,009	1.9%	18.3%	8.8%	9.2%	9.5%
Credit Card	4,032	5,126	5,420	294	1,388	5.7%	34.4%	3.2%	3.7%	4.0%
Mibanco	11,411	13,121	13,335	214	1,924	1.6%	16.9%	9.2%	9.5%	9.8%
Mibanco Colombia	1,077	1,174	1,250	76	173	6.5%	16.0%	0.9%	0.9%	0.9%
Bolivia	8,602	9,034	8,951	-82	349	-0.9%	4.1%	6.9%	6.6%	6.5%
ASB	2,103	2,039	1,958	-81	-145	-4.0%	-6.9%	1.7%	1.5%	1.4%
BAP's total loans	124,647	137,710	136,758	-952	12,112	-0.7%	9.7%	100.0%	100.0%	100.0%

Total Loans (S/ millions)	As of			Volume change		% change		% Part. in total  loans
	Mar 22	Dec 22	Mar 23	QoQ	YoY	QoQ	YoY	Mar 22	Dec 22	Mar 23
BCP Stand-alone	117,349	121,963	118,707	-3,256	1,358	-2.7%	1.2%	82.2%	82.1%	81.9%
Wholesale Banking	54,604	57,497	55,141	-2,356	537	-4.1%	1.0%	38.3%	38.7%	38.0%
Corporate	31,054	33,617	32,717	-899	1,663	-2.7%	5.4%	21.8%	22.6%	22.6%
Middle - Market	23,550	23,881	22,424	-1,456	-1,126	-6.1%	-4.8%	16.5%	16.1%	15.5%
Retail Banking	62,744	64,465	63,566	-900	821	-1.4%	1.3%	44.0%	43.4%	43.8%
SME - Business	9,509	8,583	7,884	-699	-1,625	-8.1%	-17.1%	6.7%	5.8%	5.4%
SME - Pyme	19,398	17,947	16,996	-951	-2,402	-5.3%	-12.4%	13.6%	12.1%	11.7%
Mortgage	18,830	20,073	20,282	209	1,452	1.0%	7.7%	13.2%	13.5%	14.0%
Consumer	10,975	12,738	12,984	247	2,009	1.9%	18.3%	7.7%	8.6%	9.0%
Credit Card	4,032	5,126	5,420	294	1,388	5.7%	34.4%	2.8%	3.5%	3.7%
Mibanco	13,582	14,261	14,098	-163	516	-1.1%	3.8%	9.5%	9.6%	9.7%
Mibanco Colombia	1,077	1,174	1,250	76	173	6.5%	16.0%	0.8%	0.8%	0.9%
Bolivia	8,602	9,034	8,951	-82	349	-0.9%	4.1%	6.0%	6.1%	6.2%
ASB	2,103	2,039	1,958	-81	-145	-4.0%	-6.9%	1.5%	1.4%	1.4%
BAP's total loans	142,713	148,471	144,964	-3,507	2,251	-2.4%	1.6%	100.0%	100.0%	100.0%

Total Loans	Local Currency (LC) - S/ millions						% change		% Structural change		Foreign Currency (FC) - US$ millions			% change		% part. by currency
	Total			Structural							Total					Dec 22
	Mar 22	Dec 22	Mar 23	Mar 22	Dec 22	Mar 23	QoQ	YoY	QoQ	YoY	Mar 22	Dec 22	Mar 23	QoQ	YoY	LC	FC
BCP Stand-alone	85,290	85,106	82,117	67,221	74,059	75,485	-3.5%	-3.7%	1.9%	12.3%	8,513	9,490	9,615	1.3%	12.9%	69.4%	30.6%
Wholesale Banking	29,124	28,351	25,984	24,898	26,511	26,475	-8.4%	-10.8%	-0.1%	6.3%	6,766	7,505	7,662	2.1%	13.2%	48.8%	51.2%
Corporate	15,503	16,044	15,065	14,652	16,028	15,827	-6.1%	-2.8%	-1.3%	8.0%	4,129	4,525	4,639	2.5%	12.3%	47.1%	52.9%
Middle - Market	13,621	12,307	10,919	10,246	10,482	10,648	-11.3%	-19.8%	1.6%	3.9%	2,637	2,980	3,023	1.5%	14.6%	51.2%	48.8%
Retail Banking	56,166	56,755	56,133	42,323	47,549	49,009	-1.1%	-0.1%	3.1%	15.8%	1,747	1,985	1,953	-1.6%	11.8%	87.9%	12.1%
SME - Business	7,061	5,530	4,970	2,597	2,594	2,698	-10.1%	-29.6%	4.0%	3.9%	650	786	766	-2.6%	17.8%	63.7%	36.3%
SME - Pyme	19,240	17,779	16,830	11,398	12,476	12,866	-5.3%	-12.5%	3.1%	12.9%	42	43	44	1.1%	3.4%	99.0%	1.0%
Mortgage	16,919	18,005	18,264	16,391	17,682	18,005	1.4%	7.9%	1.8%	9.8%	507	532	530	-0.4%	4.5%	89.7%	10.3%
Consumer	9,617	11,192	11,514	8,898	10,851	11,192	2.9%	19.7%	3.1%	25.8%	361	398	386	-2.9%	7.0%	87.9%	12.1%
Credit Card	3,329	4,249	4,555	3,039	3,946	4,249	7.2%	36.8%	7.7%	39.8%	187	226	227	0.7%	21.8%	82.8%	17.2%
Mibanco	13,109	13,784	13,619	10,519	12,309	12,644	-1.2%	3.9%	2.7%	20.2%	126	123	126	2.5%	0.2%	96.7%	3.3%
Mibanco Colombia	-	-	-	0	0	0	-	-	-	-	286	303	329	8.6%	14.8%	-	100.0%
Bolivia	-	-	-	0	0	0	-	-	-	-	2,284	2,326	2,352	1.2%	3.0%	-	100.0%
ASB Bank Corp.	-	-	-	0	0	0	-	-	-	-	558	525	515	-2.0%	-7.8%	-	100.0%
Total loans	98,399	98,890	95,735	77,740	86,368	88,129	-3.2%	-2.7%	2.0%	13.4%	11,767	12,766	12,936	1.3%	9.9%	66.3%	33.7%

Structural Portfolio quality and Delinquency ratios	As of			% change
S/ 000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Structural loans (Quarter-end balance)(2)	127,585,105	139,115,242	138,073,343	-0.7%	8.2%
Structural Allowance for loan losses(2)	8,061,670	7,733,575	7,779,501	0.6%	-3.5%
Structural Write-offs	378,093	754,326	677,148	-10.2%	79.1%
Structural IOLs	4,850,191	4,791,245	4,952,108	3.4%	2.1%
Structural Refinanced loans	1,714,074	2,098,748	2,121,068	1.1%	23.7%
Structural NPLs	6,564,265	6,889,993	7,073,176	2.7%	7.8%
Structural IOL ratio	3.80%	3.44%	3.59%	15 bps	-21 bps
Structural NPL ratio	5.15%	4.95%	5.12%	17 bps	-3 bps
Structural Allowance for loan losses over Structural loans	6.3%	5.6%	5.6%	7 bps	-69 bps
Structural Coverage ratio of NPLs	122.8%	112.2%	110.0%	-225 bps	-1282 bps

•

Wholesale Banking, due to an uptick in overdue loans after letters of credit were executed to cover loans to a client in the construction sector. It is important to note that these loans were already 100% provisioned given that provisions models had anticipated deterioration.

•

Mibanco, which was heavily impacted by the protests in the south of the country, damaging rains in the north and an adverse macroeconomic climate. These events have generated an increase in the IOL portfolio given that some clients who received early relief measures at the end of 4Q22 or 1Q23; nonetheless fell delinquent. In 1Q23, an additional tranche of clients was offered refinancing.

•

Consumer and Credit Cards, which reported deterioration in the portfolio disbursed in 2022 after penetrating segments with higher risk profiles. In this scenario, adjustments were made to credit guidelines to shift the focus to clients with better profiles.

•

Wholesale Banking, given that in 2022, loans were refinanced for clients in the commercial real estate and tourism sectors, both of which were heavily impacted by the pandemic. It is important to note that these loans are backed by collateral levels that far exceed total debt.

•

Consumer and Credit Cards, where deterioration was driven by the same factors as those presented in the QoQ analysis.

•

Mibanco, where deterioration was spurred by the same factor as those outlined in the QoQ analysis

Loan Portfolio Quality and Delinquency Ratios	As of			% change
S/ 000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Total loans (Quarter-end balance)	144,621,513	148,626,374	145,165,713	-2.3%	0.4%
Allowance for loan losses	8,262,383	7,872,402	7,915,350	0.5%	-4.2%
Write-offs	378,093	754,326	677,148	-10.2%	79.1%
Internal overdue loans (IOLs) (1)(2)	5,872,999	5,939,744	5,789,497	-2.5%	-1.4%
Internal overdue loans over 90-days (1)	4,424,384	4,620,461	4,386,959	-5.1%	-0.8%
Refinanced loans (2)	1,714,074	2,098,748	2,121,068	1.1%	23.7%
Non-performing loans (NPLs) (3)	7,587,073	8,038,492	7,910,565	-1.6%	4.3%
IOL ratio	4.06%	4.00%	3.99%	-1 bps	-7 bps
IOL over 90-days ratio	3.06%	3.11%	3.02%	-9 bps	-4 bps
NPL ratio	5.25%	5.41%	5.45%	4 bps	20 bps
Allowance for loan losses over Total loans	5.71%	5.30%	5.45%	15 bps	-26 bps
Coverage ratio of IOLs	140.7%	132.5%	136.7%	418 bps	-400 bps
Coverage ratio of IOL 90-days	186.7%	170.4%	180.4%	1005 bps	-632 bps
Coverage ratio of NPLs	108.9%	97.9%	100.1%	200 bps	-880 bps

	At the end of 1Q23, 67.9% of deposits were low-cost, which represents a competitive advantage in a context of record-high interest rates. YoY, low-cost deposits fell 11.0%, which was primarily fueled by on-going growth in Time Deposits after corporate clients migrated funds to this deposit type to take advantage of higher rates. However, low-cost deposit levels remain high. Demand deposits at BCP Stand-alone and Mibanco also dropped over the period, which reflected a normalization in liquidity levels. At the end of March 2023, the market share (MS) for total deposits, which consolidates BCP Stand-alone and Mibanco, stood at 34.8% (-90bps with regard to March 22).

Deposits	As of			% change		Currency
S/ 000	Mar 22	Dec 22	Mar 23	QoQ	YoY	LC	FC
Demand deposits	56,923,859	48,467,247	47,483,662	-2.0%	-16.6%	46.7%	53.3%
Saving deposits	56,454,479	54,769,045	53,418,288	-2.5%	-5.4%	55.9%	44.1%
Time deposits	30,029,261	38,897,010	43,194,573	11.0%	43.8%	46.5%	53.5%
Severance indemnity deposits	3,750,593	3,824,629	3,322,691	-13.1%	-11.4%	70.2%	29.8%
Interest payable	757,772	1,062,856	1,204,086	13.3%	58.9%	50.3%	49.7%
Total Deposits	147,915,964	147,020,787	148,623,300	1.1%	0.5%	50.3%	49.7%

•

Growth of 11.0% in Time Deposits, which was driven primarily by FC deposits by corporate clients at BCP Stand-alone and secondarily by Mibanco, where clients moved to take advantage of higher rates.

•

A 2.5% reduction in Savings Deposits in both LC and FC, which was mainly attributable to a drop in volumes at BCP Stand-alone and at BCP Bolivia. The reduction in volumes at BCP Stand-alone was driven by clients’ moves to migrate funds to higher-yield deposits to take advantage of record-high interest rates while at BCP Bolivia, the decline reflects the impact of an adverse macroeconomic environment.

•

The 2.0% decline in Demand Deposits. This decline was triggered by a drop in FC deposits, which was in turn spurred by a reduction in the demand deposits at BCP and ASB after funds migrated to higher-yield deposits.  The drop in FC was partially offset by an increase in LC over the period.

	At the end of 1Q23 IEAs registered QoQ growth of 0.2%, driven by an uptick in Available Funds and Investments. Growth in both of the aforementioned accounts was offset by a drop in the Loan balance in a context of amortizations of Government Loans (GP). YoY, the IEAs balance fell 0.6% due to a reduction in balances of Available Funds and Investments in a context marked by lower liquidity system-wide. This decline was partially offset by the increase in the loans volume. Structural loans balance, in quarter end figures, rose 8.2%, driven primarily by the evolution of loans in Retail Banking at BCP and Mibanco.   Funding fell 0.6% QoQ and 2.6% YoY due to a drop in balances of BCRP, and Bonds and Issued Notes, which reflects amortization of Reactiva loans and the expiration of a bond at BCP at the end of March.

Interest Earning Assets	As of			% change
S/000	Mar 22	Dec 22	Mar 23	QoQ	YoY
Cash and due from banks	29,563,512	26,897,216	28,158,941	4.7%	-4.8%
Total investments	48,145,429	45,431,224	47,729,504	5.1%	-0.9%
Cash collateral, reverse repurchase agreements and securities borrowing	1,516,855	1,101,856	1,468,180	33.2%	-3.2%
Total loans	144,621,513	148,626,374	145,165,713	-2.3%	0.4%
Total interest earning assets	223,847,309	222,056,670	222,522,338	0.2%	-0.6%

	In 1Q23, Net Interest Income remained stable QoQ. Our disciplined management of pricing led growth in IEA yields to slightly outpace expansion in the Funding Cost. It is relevant to note that comparatively speaking, there were two fewer business days in 1Q23 than in 4Q22, which negatively impacted Net Interest Income. YoY, Net interest Income rose 28.8%, driven by higher interest rates. Rising rates favorably impacted IEA Yields (+244bps), where growth helped mitigate the downside of rate increases at the funding cost level (+129bps).  Growth in structural loans also contributed, although to a lesser extent, to higher NII over the period. In this context, in 1Q23, the Net Interest Margin rose 9bps QoQ and 138bps YoY to stand at 5.84% and the Structural Net Interest Margin, 6.02%

Net Interest Income / Margin	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Interest Income	3,172,346	4,362,142	4,456,106	2.2%	40.5%
Interest Expense	(740,639)	(1,227,364)	(1,324,017)	7.9%	78.8%
Interest Expense (excluding Net Insurance Financial Expenses)	(638,881)	(1,119,124)	(1,208,267)	8.0%	89.1%
Net Insurance Financial Expenses	(101,758)	(108,240)	(115,750)	6.9%	13.8%
Net Interest Income	2,431,707	3,134,778	3,132,089	-0.1%	28.8%
Balances
Average Interest Earning Assets (IEA)	227,279,809	225,604,596	222,289,504	-1.5%	-2.2%
Average Funding	193,179,562	190,660,720	185,377,296	-2.8%	-4.0%
Yields
Yield on IEAs	5.58%	7.73%	8.02%	29bps	244bps
Cost of Funds	1.32%	2.35%	2.61%	26bps	129bps
Net Interest Margin (NIM) (1)	4.46%	5.75%	5.84%	9bps	138bps
Risk-Adjusted Net Interest Margin	4.01%	4.45%	4.54%	9bps	53bps
Peru’s Reference Rate	4.00%	7.50%	7.75%	25bps	375bps
FED funds rate	0.50%	4.50%	5.00%	50bps	450bps

	QoQ, the provisions expense rose due to (i) deterioration in payment behavior in Retail Banking, which was concentrated in disbursements made in 2022 in segments with higher risk profiles and in SME-Pyme, Consumer and Credit Cards in particular; and (ii) the impact in Mibanco in the context marked by social protests, intense rains and deterioration in macroeconomic factors. This growth was offset by a drop in expenses in Wholesale Banking, which was driven by a decrease in exposure this quarter. Provisions rose YoY, triggered by deterioration in the payment behavior in Consumer and Credit Cards and by Mibanco, which have been impacted by the current environment in Peru and macroeconomic factors. SME-Pyme provisions levels remain high in line with its portfolio deterioration. This uptick was partially offset by an improvement in payment behavior in Wholesale Banking. In the aforementioned context, the Structural Cost of Risk (CofR) stood at 2.10% in 1Q23.

Structural Loan Portfolio Provisions	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Gross provision for credit losses on loan portfolio	(354,553)	(799,864)	(799,129)	-0.1%	125.4%
Recoveries of written-off loans	93,091	84,908	75,109	-11.5%	-19.3%
Provision for credit losses on loan portfolio, net of  recoveries	(261,462)	(714,956)	(724,020)	1.3%	176.9%
Structural Cost of risk (2)	0.82%	2.06%	2.10%	4 bps	128 bps

•	SME-Pyme, spurred by a deterioration in payment behavior after the bank incurred in higher-risk segments in 2022.

•

Individuals, due to primarily to deterioration in payment behavior in Consumer and Credit Cards given that in 2022, new segments with higher risk profiles were penetrated, and secondarily to an update in macroeconomic factors, which capture new expectations for higher inflation and lower GDP in 2023.

•	Mibanco, whose portfolio was severely impacted by an environment punctuated by social protests in the south and intense rains in the north and by updates of macroeconomic factors to better capture deterioration in the macroeconomic context.

GP Loan Portfolio Provisions	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Gross provision for credit losses on loan portfolio	3,872	(15,725)	(2,978)	-81.1%	-506.1%
Recoveries of written-off loans	-	-	-	-	-
Provision for credit losses on loan portfolio, net of  recoveries	3,872	(15,725)	(2,978)	-81.1%	-176.9%
GP Cost of risk (1)	-0.09%	0.66%	0.17%	-49 bps	26 bps

Loan Portfolio Provisions	Quarter			% change
S/ 000	1Q22	4Q22	1Q23	QoQ	YoY
Gross provision for credit losses on loan portfolio	(350,681)	(815,589)	(802,107)	-1.7%	128.7%
Recoveries of written-off loans	93,091	84,908	75,109	-11.5%	-19.3%
Provision for credit losses on loan portfolio, net of  recoveries	(257,590)	(730,681)	(726,998)	-0.5%	182.2%
Cost of risk (1)	0.71%	1.97%	2.00%	3 bps	129 bps

6.1 Other Core Income

QoQ and YoY, other core income fell. This decline was primarily driven by a drop in the Net gain on FX transactions, which was in turn fueled by:

Additionally, net fee income fell due to the elimination of inter-city fees in universal banking. This reduction was partially offset by BCP Bolivia, which increased its fee for foreign transfers from 2.5% to 7.5% of the total transfer amount. For more details, see the section on fee income in the banking business.

Fee income in the banking business

Composition of fee income in the banking business

(1) Corresponds to fees from: credit and debit cards; payments and collections.

(2) Corresponds to fees from: Account maintenance, interbank transfers, national money orders y international transfers.

(3) Corresponds to fees from retail and wholesale loan disbursements.

(4) Use of third-party network, other services to third parties and Commissions in foreign branches.

Commissions for banking services rose slightly QoQ. This evolution was driven primarily by:

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Earnings Release 1Q / 2023

Analysis of 1Q23 Consolidated Results

The aforementioned was partially offset by:

Passive and Transactional Accounts due to:

 YoY, growth in banking fees was driven by:

Growth in YoY terms was partially offset by the same drivers as those that offset expansion QoQ.

6.2 Other non-core income

Other non-core income rose QoQ, which was driven mainly by:

The aforementioned was partially offset by a drop in the Net gain on securities in the Miscellaneous line, which was driven by a drop in the value of Credicorp’s investments in mutual funds.

Other Non-Core Income rose YoY, which was primarily attributable to:

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Earnings Release 1Q / 2023

Analysis of 1Q23 Consolidated Results

Insurance contracts combine service and financial aspects and, in many cases, generate long-term variable cash flows. To adequately reflect the impact of these aspects, IFRS 17 combines measuring future cash flows with reporting of insurance contract results during the period that the service is provided. This requires companies to present separate results for insurance, reinsurance and financial results.

IFRS was issued in 2017 to replace IFRS 4 “Insurance Contracts” to ensure that companies apply consistent criteria to improve the usefulness, transparency and comparability of Financial Statements. The standard went into effect in January 2023.

Components		Benefits
Cash flows (premiums, claims and expenses), adjusted according to the discount rate. Risk adjustment (RA), compensation required for assuming non-financial risk. Contractual service margin (CSM), which represents unearned underwriting income that is recognized as income during the coverage period These components are subject to updates of cash flows based on estimates of the amount, temporality and risk of flows and discount rates		Improves the comparability of insurance entities at a global level. IFRS 4 allowed entities to use a broad range of accounting practices for insurance contracts. Adequately reflects the economic value of insurance contracts.  Some previous practices for insurance accounting permitted under IFRS did not adequately reflect true underlying financial situations or the financial yields of these insurance contracts. Provides better information to users of financial statements.

Valuation methods

IFRS 17 introduces different approaches to valuing underwriting provisions based on the product’s characteristics (Contract duration, cash flow)

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Earnings Release 1Q / 2023

Analysis of 1Q23 Consolidated Results

Insurance Underwriting Result

	The insurance underwriting result rose 43.4% YoY due to an improvement in the results of Life Insurance. This evolution was attenuated by a drop in P&C’s results. The uptick in Life was mainly driven by D&S and Credit Life, which reflects growth in premiums due to an increase in sales and price adjustments and to a drop in claims for both regular cases and COVID-19.  The decrease in P&C’s results reflects an uptick in claims in P&C Risks and Cars.

Income from Insurance Contracts*

*The products corresponding to Life and P&C businesses have changed from previous reported.

(3) Includes Cars, and SOAT.

(4) Includes Wholesale Risks and Personal Lines without AP.

(5) Includes SCTR (Complementary Insurance for High-risk Occupations, Statutory Life and Group Life.

In the YoY analysis, income from insurance contracts increased 13.4%. This evolution was driven primarily by Life and to a lesser extent, P&C. In the Life business, income was up 23.7%, spurred by (i) D&S, which reflected an improvement in the terms of tender for the SISCO VI contract⁽¹⁾ versus those attached to the SISCO V tender; (ii) Credit Life, due to growth in premiums from bancassurance policies at BCP Stand-alone and Banco de la Nación, which was triggered by rate adjustments and loan growth; (iii) Group Life, through the SCTR (Complementary Insurance for High-Risk Occupations). In P&C, income rose 1.0%, driven by Cars and Medical Assistance.

⁽¹⁾ Public tender to select the insurance companies that will collectively manage disability, survivorship and burial risks for AFP affiliates in the 2023 period.

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Earnings Release 1Q / 2023

Analysis of 1Q23 Consolidated Results

Expenses for Insurance Contracts

In the YoY analysis, expenses for insurance contracts rose 3.0%, driven by P&C. In the P&C, business, expenses rose 13.6% YoY due to: (i) P&C Risks, through the Card Protection product, which experienced growth in the incidence of unrecognized internet purchases; and (ii) Cars, due to the increase in case frequency. The aforementioned was partially offset by Medical Assistance, which reported a release of COVID-19 IBRN reserves. Life Insurance contracts fell 4.2%, driven mainly by D&S and Credit Life after COVID-19 cases fell in comparison to 1Q22.

Expenses for Reinsurance Contracts

Expenses for reinsurance contracts rose 7.7%. This increase was attributable to the Life Business and led by the D&S product, which registered an uptick in ceded premiums under the new SISCO VI contract. The aforementioned was mitigated by the evolution at the P&C business, which reported growth in claims under our reinsurance policies for P& C Risks.

Insurance Underwriting Results

The insurance underwriting result increased 43.4% YoY, driven by the Life Business. The increase reported in the Life business was driven by growth in premiums and a drop in claims in the Credit Life and D& S lines. The drop reported in the result for P&C was attributable to an increase in claims P&C Risks and Cars, which was mitigated by decrease in claims in Medical Assistance.

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Earnings Release 1Q / 2023

Analysis of 1Q23 Consolidated Results

Total operating expenses¹

(1)  Due to the application of IFRS 17, which impacts reporting for Insurance contracts, Operating Expenses have been restated and as such, differ with regard to calculations in previous reports. For more details, review annex 12.1.8.

The expense analysis will focus on YoY movements to eliminate seasonality effects between quarters.

Operating expenses continue to rise due to: