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 March 2024
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 15026
Lima, 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): ____
March 04, 2024
Securities and Exchange Commission - SEC
Re.: MATERIAL EVENT
Dear Sirs:
Please find attached a copy of the audited consolidated financial statements of Credicorp Ltd. (the Company”) and its subsidiaries, for the fiscal year ended on December 31, 2023, including the report of the external auditors Tanaka, Valdivia y Asociados Sociedad Civil de Responsabilidad Limitada, members of EY in Peru, approved by the Company’s Board of Directors in its session held on February 29, 2024, and which will be presented to the Annual General Meeting of Shareholders on March 27, 2024.
The information in this Form 6-K (including any exhibit hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the ‘Exchange Act’) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.
Sincerely,
/s/ Guillermo Morales
Authorized Representative
Credicorp Ltd.
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.
Date: March 04, 2024
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CREDICORP LTD. (Registrant) |
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| By: | /s/ Guillermo Morales | ||
| Guillermo Morales | |||
| Authorized Representative | |||
Exhibit 99.1
| CREDICORP LTD. AND SUBSIDIARIES | ||
| CONSOLIDATED FINANCIAL STATEMENTS | ||
| AS OF DECEMBER 31, 2023 AND 2022 (RESTATED) | ||
CREDICORP LTD. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2023 AND 2022 (RESTATED)
| CONTENTS | Pages |
| Independent auditor’s report | |
| Consolidated statement of financial position | 11 |
| Consolidated statement of income | 12 - 13 |
| Consolidated statement of comprehensive income | 14 |
| Consolidated statement of changes in equity | 15 - 16 |
| Consolidated statement of cash flows | 17 - 20 |
| Notes to the consolidated financial statements | 21 – 190 |
| US$ | = United States dollar |
| S/ | = Sol |
| Bs | = Boliviano |
| $ | = Colombian peso |
| ¥ | = Yen |
 |
Tanaka, Valdivia & Asociados Sociedad Civil de R. L |
Report of the Independent Auditors
To the Shareholders and Directors of Credicorp Ltd. and Subsidiaries
Opinion
We have audited the consolidated financial statements of Credicorp Ltd. and Subsidiaries (hereinafter “the Group”), which comprise the consolidated statement of financial position as of December 31, 2023, and the consolidated statements of income, comprehensive income, changes in equity and cash flows for the year then ended; as well as the explanatory notes to the consolidated financial statements, which include a summary of material accounting policies.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023, as well as its consolidated financial performance and cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board.
Basis for opinion
We conduct our audit in accordance with the International Standards on Auditing (ISAs) approved for application in Peru by the Board of Deans of Associations of Public Accountants of Peru. Our responsibilities under these standards are described in more detail in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Code of Ethics for Accounting Professionals of the International Ethical Standards Council for Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Peru, and we have complied with our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained provides a sufficient and adequate basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of the greatest importance in the audit of the financial statements for the current period. These matters were addressed in the context of the audit of the financial statements as a whole, and in forming our opinion thereon; so we do not provide a separate opinion on these matters. Based on the above, below is how each key issue was addressed during our audit.
| Lima | Lima II | Arequipa | Trujillo |
| Av. Víctor Andrés | Av. Jorge Basadre 330 | Av. Bolognesi 407 | Av. El Golf 591 Urb. Del Golf III |
| Belaunde 171 | San Isidro | Yanahuara | Victor Larco Herrera 13009, |
| San Isidro | Tel: +51 (1) 411 4444 | Tel: +51 (54) 484 470 | Sede Miguel Ángel Ouijano Doig |
| Tel: +51 (1) 411 4444 | La Libertad | ||
| Tel: +51 (44) 608 830 |
Inscrita en la partida 11396556 del Registro de Personas Juridicas de Lima y Callao
Miembro de Ernst & Young Global
Report of the Independent Auditors (continue)
We have complied with the responsibilities described in Auditor’s responsibilities for the audit of the consolidated financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to the risks of material misstatement assessed in the consolidated financial statements. The results of the audit procedures, including the procedures undertaken to address the matters mentioned below, form the basis for the audit opinion on the accompanying consolidated financial statements.
| Key Audit Matters | Audit Response | |
| Information Technology (IT) Environment | ||
|
The Group’s information technology (IT) environment consists of an infrastructure of a large number of key systems for the processing of its operations, accounting records and preparation of its consolidated financial statements. In addition, the Group’s Management has designed a series of automatic controls, interfaces between the systems and executed calculations of the applications; with the aim of ensuring the completeness and accuracy of accounting records and accurate financial reports, and thus mitigating the potential risk of fraud or error.
In light of the above, we consider the information technology environment to be a key issue, as the Group depends on the efficient and continuous operation of IT applications as well as their automatic controls, so there is a risk that breaches in the IT control environment may result in accounting records being materially misstated. |
With the support of our Information Technology (IT) specialists, our audit efforts focused on the key systems related to the processing of its operations, accounting records and preparation of the Group’s consolidated financial statements; performing the following procedures:
- Evaluation of the Group’s IT governance framework. - Understanding of the control environment and identification of risks of IT processes. - Testing key controls over application and data access management, program changes and application development, and IT operations. - Testing of the design and operational effectiveness of the key automatic controls identified in the various relevant processes of the Group. - Testing of the design and operational effectiveness of applicable compensation controls. |
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Report of the Independent Auditors (continue)
| Key Audit Matters | Audit Response | |
| Provision for credit losses on loan portfolio | ||
|
As described in notes 3(j), 7 and 30.1 of the Group’s consolidated financial statements, the measurement of expected credit loss is based primarily on the product of the probability of default (PD), the loss given the default (LGD), and the exposure at the time of default (EAD), discounted at the reporting date and considering the expected macroeconomic effects. The expected credit loss impairment model reflects the present value of all cash deficit events related to the default events, either (i) over the next twelve months or (ii) over the expected life of the loan depending on its impairment from inception.
Significant assumptions and judgments considered by the Group, with respect to the estimation of the expected loss, include: (i) the probability of default, based on the debtor’s payment behavior and credit risk management based primarily on the Group’s internal rating and scoring models; (ii) the loss assigned for default, which is considered to determine the fair value of the guarantees and recoveries; (iii) the determination of the exposure balance at a future default date, which takes into account expected changes in exposure after the reporting date, including principal and interest repayments; (iv) forward-looking forecasts for multiple economic scenarios and the probability weighting of those scenarios; (v) the determination of when a loan has experienced a significant increase in credit risk; (vi) the individual analysis of corporate clients classified in phase 3, mainly considering the situation of the recoverability of the guarantees, analysis of financial statements and sector in which the debtor operates; (vii) the calculation of credit losses for 12 months and over the expected life of the credit agreement; and (viii) the application of the judgment specifically for the current situation of the El Niño phenomenon affecting our country.
|
We gained an understanding, evaluated the design and tested the operational effectiveness of the controls of the expected loss provision estimation process for the Group’s loan portfolio, which included the following procedures: - Evaluation of the methodology and criteria established for the calculation according to IFRS9. - Evaluation of the methodology and criteria related to the estimate made by the Group corresponding to the current situation of the El Niño phenomenon. - Evaluation of the significant models and assumptions established by the Group in the calculation, such as: PD, LGD, EAD, scores, rating and forward-looking information forecasts for multiple economic scenarios and the probability weighting of those scenarios. - Completeness and accuracy of the database in the Group’s systems. - Identification of impairment indicators and determination of significant changes in credit risk. - Individual analysis of corporate clients classified in phase 3. - Calculation of the expected loss estimate for the loan portfolio. - Review of disclosures included in the notes to the consolidated financial statements.
In addition, with the support of our specialists, we carried out detailed substantive procedures, which included: - Assessment that the methodology, assumptions and judgments used in the expected loss estimation models are consistent with the requirements of IFRS9 and the Group’s accounting policies. - Testing the completeness and accuracy of the data used in the calculation of the provision and, selectively, checking the main data against the source systems. |
|
Report of the Independent Auditors (continue)
| Key Audit Matters | Audit Response | |
| In view of the above, we consider that the estimate of expected loss for the loan portfolio is a key audit matter, given that any change in assumptions and/or judgments could have material effects on the calculation of the provision. In addition, the determination of accounting figures requires the participation of specialists due to the inherent complexity of the models, assumptions, judgments, prospective nature of the key assumptions, and the interrelationship of critical variables in the measurement. |
- Comparison of the Group’s macroeconomic projections (forward-looking information) with publicly available information from independent sources. - Assessment of significant changes in credit risk triggers. - Evaluation of the estimate made by the Group related to the current situation of the El Niño phenomenon. - Evaluation of corporate clients classified in phase 3 that the Group analyzes individually. - Independently testing the calculation of the estimate of the provision of credits. - Assessment of adequate disclosure in the notes to the consolidated financial statements. |
|
| Estimation of liabilities for life insurance contracts under the general valuation model | ||
|
As described in notes 3(f), 8 and 30.9 of the Group’s consolidated financial statements, the estimation of insurance contract liabilities is based primarily on: (i) review and identification of insurance contracts; (ii) grouping of insurance contracts; (iii) determination of the valuation models by product (general model or block construction - BBA, variable rate - VFA and the simplified model - PPA); (iv) definition of the discount rate; (v) calculation of the risk adjustment and (vi) calculation of the contractual service margin (CSM). The projections of cash inflows and outflows related to each portfolio of insurance contracts consider their probability of occurrence, and all cash flows that are within the contract limit are included. |
We gained an understanding, evaluated the design, and tested the operational effectiveness of the controls of the valuation process of life insurance contracts under the overall model, which included the following procedures: - Review of the methodology and criteria established for calculation according to actuarial methods that are accepted under IFRS 17. - Evaluation of the actuarial models, assumptions and assumptions of general acceptance, established by the Group. - Review of the completeness and accuracy of the database used in the Group’s information systems to manage, calculate and raise awareness of these liabilities. |
|
Report of the Independent Auditors (continue)
| Key Audit Matters | Audit Response | |
|
To determine the assumptions and estimates, the Group relies on parameters derived from the experience of managing its portfolio. However, existing circumstances and assumptions about future developments could change due to changes in the market or circumstances beyond the Group’s control. The parameters are kept up to date to reflect such changes in assumptions where necessary. In addition, the Group re-evaluates the CSM each period considering the experience that the Group has had. The parameters used to estimate estimated future cash flows is a comparison between actual rates and estimated rates and the following assumptions are evaluated: mortality, longevity, disability, expenses, and falls.
Considering the above, we consider insurance liabilities to be a key audit matter, as any changes in assumptions and data could have material effects on the valuation of liabilities; In addition, the determination of accounting figures is complex and requires the involvement of specialists due to actuarial models. |
- Review of the correct allocation of discount rates for the calculation of liabilities for life insurance contracts. - Review of the calculation of the liability valuation estimate. - Review of disclosures included in the notes to the consolidated financial statements.
In addition, with the support of our actuarial specialists, we carried out detailed substantive procedures, which included: - Assessment that the methodology defined by the Group on actuarial models and assumptions is consistent with the application of IFRS 17. - Independent evaluation of the actuarial model and assumptions used in the calculation. - Proof of the completeness and accuracy of the policy data used, as well as the variables used in the calculation. - Evaluation of the proper determination of the discount rate used in the calculations. - Reconciliation of the discount rates charged to the application, where the calculations are determined, comparing them with those defined by the risk area. - Proof, independently, of the calculation made by the Group. - Evaluation of the appropriate movement of liabilities considering changes in actuarial assumptions at the end of the year. - Evaluation of the sensitivity of changes in certain variables in the determination of these liabilities. - Assessment of the adequacy of disclosures in the notes to the consolidated financial statements. |
Report of the Independent Auditors (continue)
Other Matter
As described in Note 3(b) to the consolidated financial statements as of and for the year ended December 31, 2022, which are presented for comparative purposes, they have been restated due to the initial implementation of IFRS 17, Insurance Contracts. These restated consolidated financial statements, including their opening balance as of January 1, 2022, as well as the respective adjustments related to the retroactive effect of the implementation of IFRS 17 on those financial statements, were audited by other independent auditors, who expressed an unchanged opinion.
Other information included in the Group’s 2023 Annual Report
Other information consists of the information included in the Annual Report, other than the consolidated financial statements and our audit report thereon. Management is responsible for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge gained in the audit or whether it otherwise appears to be materially misstated. If, based on the work we have done, we conclude that there is a material error in this other information, we are obliged to report that fact. We have nothing to report in this regard.
Responsibilities of the Group’s management and those charged with corporate governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, Management is responsible for assessing the Group’s ability to continue as a going concern, disclosing as appropriate matters relating to the going concern and using the going concern’s accounting basis, unless Management intends to liquidate the Group or cease operations, or have no realistic alternative to doing so.
Report of the Independent Auditors (continue)
Those responsible for the Group’s corporate governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance as to whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report that includes our opinion. Reasonable assurance is a high level of assurance, but it does not guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements may arise due to fraud or error and are considered material if, individually or cumulatively, you could reasonably expect them to influence the economic decisions that users make based on the consolidated financial statements.
As part of an audit in accordance with the International Standards on Auditing (ISAs) approved for application in Peru by the Board of Deans of Associations of Public Accountants of Peru, we exercise professional judgment and maintain professional skepticism throughout the audit. Also:
| - | We identify and evaluate the risks of material misstatement in the consolidated financial statements, whether due to fraud or error, design and execute audit procedures that respond to those risks, and obtain audit evidence that is sufficient and appropriate to provide us with a basis for our opinion. The risk of not detecting a material misstatement due to fraud is greater than that resulting from an error, as fraud may involve collusion, falsification, intentional omissions, misrepresentations, or overstepping the internal control system. |
| - | We obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. |
| - | We evaluate the adequacy of the accounting policies used, the reasonableness of the accounting estimates and the respective disclosures made by management. |
| - | We conclude on the adequacy of Management’s use of the going concern accounting basis and, based on the audit evidence obtained, whether there is material uncertainty related to events or conditions that may raise significant doubts about the Group’s ability to continue as a going concern. If we conclude that there is a material uncertainty, we are required to draw attention in our audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. The findings are based on the audit evidence obtained to date from our audit report. However, future events or conditions may cause the Group to cease to continue as a going concern. |
| - | We evaluate the overall presentation, structure, content of the consolidated financial statements, including disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves a fair presentation. |
Report of the Independent Auditors (continue)
| - | We obtained sufficient and adequate audit evidence in relation to the financial information of the entities or business activities that are part of the Group, in order to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and execution of the Group’s audit and therefore for our audit opinion. |
We communicate to those charged for the Group’s corporate governance, among other matters, the planned scope and timing of the audit, the significant findings of the audit, as well as any significant internal control deficiencies identified in the course of the audit.
We also provide those charged for the Group’s corporate governance with a statement that we have complied with relevant ethical requirements in relation to independence and have communicated to them about all relationships and other matters that could reasonably affect our independence and, as appropriate, including the respective safeguards.
Among the matters that have been the subject of communication with those responsible for the Group’s corporate governance, we have identified those that have been of the greatest significance in the audit of the consolidated financial statements for the current period and, therefore, are the key audit matters. We have described such matters in our audit report unless legal or regulatory provisions prohibit public disclosure of the matter or, in extremely rare circumstances, we determine that a matter should not be disclosed in our report because it would reasonably be expected that the adverse consequences of doing so would outweigh the public interest benefits of the report.
Lima, Peru
February 29, 2024
Endorsed by:
 |
 |
Victor Tanaka
Partner-in-Charge
C.P.C.C. Registration No. 25613
CREDICORP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2023, 2022 (RESTATED) AND JANUARY 01, 2022 (RESTATED)
| Note | As of December 31, 2023 |
As of December 31, 2022 (Restated) (*) |
As of January 01, 2022 (Restated) (*) |
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| S/(000) | S/(000) | S/(000) | ||||||||||||
| Assets | ||||||||||||||
| Cash and due from banks: | ||||||||||||||
| Non-interest-bearing | 7,952,371 | 7,286,624 | 6,925,332 | |||||||||||
| Interest-bearing | 25,978,577 | 26,897,216 | 32,395,408 | |||||||||||
| 4 | 33,930,948 | 34,183,840 | 39,320,740 | |||||||||||
| Cash collateral, reverse repurchase agreements and securities borrowing | 5(a) | 1,410,647 | 1,101,856 | 1,766,948 | ||||||||||
| Investments: | ||||||||||||||
| At fair value through profit or loss | 6(a) | 4,982,661 | 4,199,334 | 5,928,538 | ||||||||||
| At fair value through other comprehensive income | 32,774,078 | 29,678,061 | 34,440,091 | |||||||||||
| At fair value through other comprehensive income pledged as collateral | 4,269,862 | 1,108,100 | 318,352 | |||||||||||
| 6(b) | 37,043,940 | 30,786,161 | 34,758,443 | |||||||||||
| Amortized cost | 7,924,830 | 6,905,201 | 4,411,592 | |||||||||||
| Amortized cost pledged as collateral | 2,264,097 | 3,540,528 | 3,853,967 | |||||||||||
| 6(c) | 10,188,927 | 10,445,729 | 8,265,559 | |||||||||||
| Loans: | 7 | |||||||||||||
| Loans | 144,976,051 | 148,626,374 | 147,597,412 | |||||||||||
| Allowance for loan losses | (8,277,916 | ) | (7,872,402 | ) | (8,477,308 | ) | ||||||||
| 136,698,135 | 140,753,972 | 139,120,104 | ||||||||||||
| Financial assets designated at fair value through profit or loss | 810,932 | 768,801 | 987,082 | |||||||||||
| Reinsurance contract assets | 8(a) | 872,046 | 744,008 | 812,466 | ||||||||||
| Property, furniture and equipment, net | 9 | 1,357,525 | 1,281,098 | 1,308,779 | ||||||||||
| Due from customers on banker’s acceptances | 7(b) | 412,401 | 699,678 | 532,404 | ||||||||||
| Intangible assets and goodwill, net | 10 | 3,225,499 | 2,899,429 | 2,710,080 | ||||||||||
| Right-of-use assets, net | 11(a) | 499,715 | 543,833 | 586,417 | ||||||||||
| Deferred tax assets, net | 17(c) | 1,182,195 | 1,134,747 | 1,146,468 | ||||||||||
| Other assets | 12 | 6,224,617 | 5,871,671 | 6,199,844 | ||||||||||
| Total assets | 238,840,188 | 235,414,157 | 243,443,872 | |||||||||||
| Note |
|
As of 2023 |
As of December 31, 2022 (Restated) (*) |
As of January 01, 2022 (Restated) (*) |
||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||||
| Liabilities | ||||||||||||||
| Deposits and obligations: | ||||||||||||||
| Non-interest-bearing | 42,234,498 | 43,346,151 | 51,851,206 | |||||||||||
| Interest-bearing | 105,470,496 | 103,674,636 | 97,745,339 | |||||||||||
| 13(a) | 147,704,994 | 147,020,787 | 149,596,545 | |||||||||||
| Payables from repurchase agreements and securities lending | 5(b) | 10,168,427 | 12,966,725 | 22,013,866 | ||||||||||
| Due to banks and correspondents | 14(a) | 12,278,681 | 8,937,411 | 7,212,946 | ||||||||||
| Due from customers on banker’s acceptances | 3(o) | 412,401 | 699,678 | 532,404 | ||||||||||
| Lease liabilities | 11(b) | 512,579 | 578,074 | 655,294 | ||||||||||
| Financial liabilities at fair value through profit or loss | 3(z) | 641,915 | 191,010 | 337,909 | ||||||||||
| Insurance contract liability | 8(b) | 12,318,133 | 11,154,008 | 11,920,974 | ||||||||||
| Bonds and notes issued | 15 | 14,594,785 | 17,007,194 | 17,823,146 | ||||||||||
| Deferred tax liabilities, net | 17(c) | 107,517 | 75,005 | 74,167 | ||||||||||
| Other liabilities | 12 | 6,993,691 | 7,189,052 | 6,444,097 | ||||||||||
| Total liabilities | 205,733,123 | 205,818,944 | 216,611,348 | |||||||||||
| Equity | 16 | |||||||||||||
| Equity attributable to Credicorp’s equity holders: | ||||||||||||||
| Capital stock | 1,318,993 | 1,318,993 | 1,318,993 | |||||||||||
| Treasury stock | (208,033 | ) | (207,518 | ) | (207,534 | ) | ||||||||
| Capital surplus | 228,239 | 231,556 | 228,853 | |||||||||||
| Reserves and others | 26,548,361 | 23,383,454 | 21,768,421 | |||||||||||
| Retained earnings | 4,572,444 | 4,277,159 | 3,183,119 | |||||||||||
| 32,460,004 | 29,003,644 | 26,291,852 | ||||||||||||
| Non-controlling interest | 647,061 | 591,569 | 540,672 | |||||||||||
| Total equity | 33,107,065 | 29,595,213 | 26,832,524 | |||||||||||
| Total liabilities and equity | 238,840,188 | 235,414,157 | 243,443,872 |
(*) See note 3(b).
The accompanying notes are an integral part of these consolidated financial statements.
CREDICORP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 (RESTATED) AND 2021
| 2022 | ||||||||||||||
| Note | 2023 | (Restated) | 2021 | |||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||||
| Interest and similar income | 19 | 18,798,495 | 15,011,282 | 11,850,406 | ||||||||||
| Interest and similar expenses | 19 | (5,860,523 | ) | (3,919,664 | ) | (2,490,802 | ) | |||||||
| Net interest, similar income and expenses | 12,937,972 | 11,091,618 | 9,359,604 | |||||||||||
| Provision for gross credit losses on loan portfolio | 7(c) | (3,957,143 | ) | (2,158,555 | ) | (1,558,951 | ) | |||||||
| Recoveries of written-off loans | 334,798 | 347,017 | 346,728 | |||||||||||
| Provision for credit losses on loan portfolio, net of recoveries | (3,622,345 | ) | (1,811,538 | ) | (1,212,223 | ) | ||||||||
| Net interest, similar income and expenses, after provision for credit losses on loan portfolio | 9,315,627 | 9,280,080 | 8,147,381 | |||||||||||
| Other income | ||||||||||||||
| Commissions and fees | 20 | 3,804,459 | 3,642,857 | 3,493,734 | ||||||||||
| Net gain on foreign exchange transactions | 886,126 | 1,084,151 | 922,917 | |||||||||||
| Net gain on securities | 21 | 425,144 | 5,468 | 28,650 | ||||||||||
| Net gain on derivatives held for trading | 53,665 | 65,187 | 221,064 | |||||||||||
| Exchange difference result | 45,778 | 387 | (3,215 | ) | ||||||||||
| Others | 25 | 440,653 | 268,046 | 266,567 | ||||||||||
| Total other income | 5,655,825 | 5,066,096 | 4,929,717 | |||||||||||
| Technical result of insurance | ||||||||||||||
| Insurance service result | 22 (a) | 1,602,421 | 1,302,347 | – | ||||||||||
| Underwriting result | 22 (a) | (391,321 | ) | (460,899 | ) | – | ||||||||
| Net premiums earned | 22 (g) | – | – | 2,671,530 | ||||||||||
| Net claims incurred for life, general and health insurance contracts | 22 (h) | – | – | (2,341,917 | ) | |||||||||
| Acquisition cost | – | – | (333,334 | ) | ||||||||||
| Total technical result of insurance | 1,211,100 | 841,448 | (3,721 | ) | ||||||||||
| Other expenses | ||||||||||||||
| Salaries and employee benefits | 23 | (4,265,453 | ) | (3,902,161 | ) | (3,668,476 | ) | |||||||
| Administrative expenses | 24 | (3,803,203 | ) | (3,414,065 | ) | (2,953,717 | ) | |||||||
| Depreciation and amortization | 9 and 10(a) | (511,174 | ) | (485,207 | ) | (521,967 | ) | |||||||
| Impairment loss on goodwill | 10(b) | (71,959 | ) | – | – | |||||||||
| Depreciation for right-of-use assets | 11(a) | (147,833 | ) | (151,282 | ) | (161,287 | ) | |||||||
| Others | 25 | (534,601 | ) | (364,298 | ) | (435,114 | ) | |||||||
| Total other expenses | (9,334,223 | ) | (8,317,013 | ) | (7,740,561 | ) | ||||||||
CONSOLIDATED STATEMENT OF INCOME (continued)
| 2022 | ||||||||||||||||
| Note | 2023 | (Restated) | 2021 | |||||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||||||
| Net result before income tax | 6,848,329 | 6,870,611 | 5,332,816 | |||||||||||||
| Income tax | 17(b) | (1,888,451 | ) | (2,110,501 | ) | (1,660,987 | ) | |||||||||
| Net result after income tax | 4,959,878 | 4,760,110 | 3,671,829 | |||||||||||||
| Attributable to: | ||||||||||||||||
| Credicorp’s equity holders | 4,865,540 | 4,647,818 | 3,584,582 | |||||||||||||
| Non-controlling interest | 94,338 | 112,292 | 87,247 | |||||||||||||
| 4,959,878 | 4,760,110 | 3,671,829 | ||||||||||||||
| Net basic and dilutive earnings per share attributable to Credicorp’s equity holders (in soles): |
||||||||||||||||
| Basic | 26 | 61.22 | 58.44 | 45.09 | ||||||||||||
| Diluted | 26 | 61.08 | 58.32 | 44.99 |
The accompanying notes are an integral part of these consolidated financial statements.
CREDICORP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 (RESTATED) AND 2021
| 2023 | 2022 | 2021 | ||||||||||||||
| (Restated) | ||||||||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||||||
| Net profit for the year | 4,959,878 | 4,760,110 | 3,671,829 | |||||||||||||
| Other comprehensive income: | ||||||||||||||||
| To be reclassified to profit or loss in subsequent periods: | ||||||||||||||||
| Net Gain (loss) on investments at fair value through other comprehensive income | 16(d) | 1,334,943 | (1,614,053 | ) | (2,491,907 | ) | ||||||||||
| Income tax | 16(d) | (58,489 | ) | 82,459 | 52,086 | |||||||||||
| 1,276,454 | (1,531,594 | ) | (2,439,821 | ) | ||||||||||||
| Net movement of cash flow hedge reserves | 16(d) | (17,443 | ) | 1,246 | 58,586 | |||||||||||
| Income tax | 16(d) | 5,104 | (158 | ) | (16,834 | ) | ||||||||||
| (12,339 | ) | 1,088 | 41,752 | |||||||||||||
| Other reserves | 16(d) | (762,811 | ) | 1,144,140 | 769,291 | |||||||||||
| Income tax | 16(d) | - | - | (26,846 | ) | |||||||||||
| (762,811 | ) | 1,144,140 | 742,445 | |||||||||||||
| Exchange differences on translation of foreign operations | 16(d) | 73,464 | (302,083 | ) | 161,168 | |||||||||||
| Net movement in hedges of net investments in foreign businesses | 16(d) | 18,950 | 39,587 | (57,319 | ) | |||||||||||
| 92,414 | (262,496 | ) | 103,849 | |||||||||||||
| Total | 593,718 | (648,862 | ) | (1,551,775 | ) | |||||||||||
| Not to be reclassified to profit or loss in subsequent periods: | ||||||||||||||||
| Net loss on equity instruments designated at fair value through other comprehensive income | 16(d) | (8,329 | ) | (38,563 | ) | (113,686 | ) | |||||||||
| Income tax | 16(d) | (3,791 | ) | 2,109 | 5,402 | |||||||||||
| Total | (12,120 | ) | (36,454 | ) | (108,284 | ) | ||||||||||
| Total other comprehensive income | 16(d) | 581,598 | (685,316 | ) | (1,660,059 | ) | ||||||||||
| Total comprehensive income for the year, net of income tax | 5,541,476 | 4,074,794 | 2,011,770 | |||||||||||||
| Attributable to: | ||||||||||||||||
| Credicorp’s equity holders | 5,437,495 | 3,967,497 | 1,954,586 | |||||||||||||
| Non-controlling interest | 103,981 | 107,297 | 57,184 | |||||||||||||
| 5,541,476 | 4,074,794 | 2,011,770 |
The accompanying notes are an integral part of these consolidated financial statements.
CREDICORP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 (RESTATED) AND 2021
| Attributable to Credicorp’s equity holders. | ||||||||||||||||||||||||||||
| Other reserves | ||||||||||||||||||||||||||||
| Treasury stock |
Instruments that
will not be
reclassified to
income
|
Instruments that will be reclassified to the consolidated statement of income | ||||||||||||||||||||||||||
| Capital stock | Shares of the Group | Share-based payment | Capital surplus | Reserves and others | Investments in equity instruments | Investments in debt instruments | Cash flow hedge reserve | Insurance reserves | Foreign currency translation reserve | Retained earnings | Total | Non-controlling interest | Total equity | |||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||
| Balances as of January 1, 2021 | 1,318,993 | (204,326) | (4,107) | 192,625 | 21,429,635 | 315,202 | 2,256,531 | (41,102) | (892,598) | 227,865 | 347,152 | 24,945,870 | 499,777 | 25,445,647 | ||||||||||||||
| Changes in equity in 2021 - | ||||||||||||||||||||||||||||
| Net profit for the year | - | - | - | - | - | - | - | - | - | - | 3,584,582 | 3,584,582 | 87,247 | 3,671,829 | ||||||||||||||
| Other comprehensive income, Note 16(d) | - | - | - | - | - | (108,317) | (2,399,931) | 40,829 | 733,932 | 103,491 | - | (1,629,996) | (30,063) | (1,660,059) | ||||||||||||||
| Total comprehensive income | - | - | - | - | - | (108,317) | (2,399,931) | 40,829 | 733,932 | 103,491 | 3,584,582 | 1,954,586 | 57,184 | 2,011,770 | ||||||||||||||
| Transfer of retained earnings to reserves, Note 16(c) | - | - | - | - | 346,994 | - | - | - | - | - | (346,994) | - | - | - | ||||||||||||||
| Dividend distribution, Note 16(e) | - | - | - | - | (398,808) | - | - | - | - | - | - | (398,808) | - | (398,808) | ||||||||||||||
| Dividends paid to interest non-controlling of subsidiaries | - | - | - | - | - | - | - | - | - | - | - | - | (4,156) | (4,156) | ||||||||||||||
| Additional dividends | - | - | - | - | - | - | - | - | - | - | - | - | (7,822) | (7,822) | ||||||||||||||
| Purchase of treasury stock, Note 16(b) | - | - | (1,369) | (57,538) | - | - | - | - | - | - | - | (58,907) | - | (58,907) | ||||||||||||||
| Sale of treasury stocks | - | - | 84 | 3,668 | - | - | - | - | - | - | - | 3,752 | - | 3,752 | ||||||||||||||
| Share-based payment transactions | - | - | 2,184 | 90,098 | (13,549) | - | - | - | - | - | - | 78,733 | - | 78,733 | ||||||||||||||
| Others | - | - | - | - | - | - | - | - | - | - | (28,459) | (28,459) | (4,311) | (32,770) | ||||||||||||||
| Balances as of December 31, 2021 | 1,318,993 | (204,326) | (3,208) | 228,853 | 21,364,272 | 206,885 | (143,400) | (273) | (158,666) | 331,356 | 3,556,281 | 26,496,767 | 540,672 | 27,037,439 | ||||||||||||||
| Impact of initial application of IRFS 17, Note 3(b) | - | - | - | - | - | - | - | - | 158,666 | - | (369,494) | (210,828) | - | (210,828) | ||||||||||||||
| Others | - | - | - | - | - | - | 3,900 | - | - | 5,681 | (3,668) | 5,913 | - | 5,913 | ||||||||||||||
| Balances as of January 1, 2022 (restated) | 1,318,993 | (204,326) | (3,208) | 228,853 | 21,364,272 | 206,885 | (139,500) | (273) | - | 337,037 | 3,183,119 | 26,291,852 | 540,672 | 26,832,524 | ||||||||||||||
| Changes in equity in 2022 - | ||||||||||||||||||||||||||||
| Net profit for the year | - | - | - | - | - | - | - | - | - | - | 4,647,818 | 4,647,818 | 112,292 | 4,760,110 | ||||||||||||||
| Other comprehensive income, Note 16(d) | - | - | - | - | - | (36,477) | (1,516,059) | 1,061 | 1,133,536 | (262,382) | - | (680,321) | (4,995) | (685,316) | ||||||||||||||
| Total comprehensive income | - | - | - | - | - | (36,477) | (1,516,059) | 1,061 | 1,133,536 | (262,382) | 4,647,818 | 3,967,497 | 107,297 | 4,074,794 | ||||||||||||||
| Transfer of retained earnings to reserves, Note 16(c) | - | - | - | - | 2,354,859 | - | - | - | - | - | (2,354,859) | - | - | - | ||||||||||||||
| Dividend distribution, Note 16(e) | - | - | - | - | - | - | - | - | - | - | (1,196,422) | (1,196,422) | - | (1,196,422) | ||||||||||||||
| Dividends paid to interest non-controlling of subsidiaries | - | - | - | - | - | - | - | - | - | - | - | - | (48,577) | (48,577) | ||||||||||||||
| Non-controlling interest stock put option, Note 3(k) | - | - | - | - | (42,964) | - | - | - | - | - | - | (42,964) | - | (42,964) | ||||||||||||||
| Minority purchase | - | - | - | - | - | - | - | - | - | - | - | - | (5,877) | (5,877) | ||||||||||||||
| Purchase of treasury stock, Note 16(b) | - | - | (1,923) | (81,682) | - | - | - | - | - | - | - | (83,605) | - | (83,605) | ||||||||||||||
| Sale of treasury stocks | - | - | 231 | 9,718 | - | - | - | - | - | - | - | 9,949 | - | 9,949 | ||||||||||||||
| Share-based payment transactions | - | - | 1,708 | 74,667 | (16,541) | - | - | - | - | - | - | 59,834 | - | 59,834 | ||||||||||||||
| Others | - | - | - | - | - | - | - | - | - | - | (2,497) | (2,497) | (1,946) | (4,443) | ||||||||||||||
| Balances as of December 31, 2022 (restated) | 1,318,993 | (204,326) | (3,192) | 231,556 | 23,659,626 | 170,408 | (1,655,559) | 788 | 1,133,536 | 74,655 | 4,277,159 | 29,003,644 | 591,569 | 29,595,213 | ||||||||||||||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
| Attributable to Credicorp’s equity holders. | ||||||||||||||||||||||||||||
| Other reserves | ||||||||||||||||||||||||||||
| Treasury stock |
Instruments that
will not be
reclassified to
income
|
Instruments that will be reclassified to the consolidated statement of income | ||||||||||||||||||||||||||
| Capital stock | Shares of the Group | Share-based payment | Capital surplus | Reserves and others | Investments in equity instruments | Investments in debt instruments | Cash flow hedge reserve | Insurance reserves | Foreign currency translation reserve | Retained earnings | Total | Non-controlling interest | Total equity | |||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||
| Balances as of December 31, 2022 - Restated | 1,318,993 | (204,326) | (3,192) | 231,556 | 23,659,626 | 170,408 | (1,655,559) | 788 | 1,133,536 | 74,655 | 4,277,159 | 29,003,644 | 591,569 | 29,595,213 | ||||||||||||||
| Changes in equity in 2023 - | ||||||||||||||||||||||||||||
| Net profit for the year | - | - | - | - | - | - | - | - | - | - | 4,865,540 | 4,865,540 | 94,338 | 4,959,878 | ||||||||||||||
| Other comprehensive income, Note 16(d) | - | - | - | - | - | (12,247) | 1,258,137 | (12,191) | (754,192) | 92,448 | - | 571,955 | 9,643 | 581,598 | ||||||||||||||
| Total comprehensive income | - | - | - | - | - | (12,247) | 1,258,137 | (12,191) | (754,192) | 92,448 | 4,865,540 | 5,437,495 | 103,981 | 5,541,476 | ||||||||||||||
| Transfer of retained earnings to reserves, Note 16(c) | - | - | - | - | 2,593,598 | - | - | - | - | - | (2,593,598) | - | - | - | ||||||||||||||
| Dividend distribution, Note 16(e) | - | - | - | - | - | - | - | - | - | - | (1,994,037) | (1,994,037) | - | (1,994,037) | ||||||||||||||
| Dividends paid to interest non-controlling of subsidiaries | - | - | - | - | - | - | - | - | - | - | - | - | (62,051) | (62,051) | ||||||||||||||
| Subsidiary acquisition | - | - | - | - | - | - | - | - | - | - | - | - | 14,192 | 14,192 | ||||||||||||||
| Minority purchase | - | - | - | - | - | - | - | - | - | - | - | - | (1,773) | (1,773) | ||||||||||||||
| Purchase of treasury stock, Note 16(b) | - | - | (2,279) | (83,296) | - | - | - | - | - | - | - | (85,575) | - | (85,575) | ||||||||||||||
| Sale of treasury stocks | - | - | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||
| Share-based payment transactions | - | - | 1,764 | 79,979 | (12,225) | - | - | - | - | - | - | 69,518 | - | 69,518 | ||||||||||||||
| Dividends not collected | - | - | - | - | 11,579 | - | - | - | - | - | - | 11,579 | - | 11,579 | ||||||||||||||
| Result from exchange of strategic shares | - | - | - | - | - | - | - | - | - | - | 14,425 | 14,425 | - | 14,425 | ||||||||||||||
| Others | - | - | - | - | - | - | - | - | - | - | 2,955 | 2,955 | 1,143 | 4,098 | ||||||||||||||
| Balances as of December 31, 2023 | 1,318,993 | (204,326) | (3,707) | 228,239 | 26,252,578 | 158,161 | (397,422) | (11,403) | 379,344 | 167,103 | 4,572,444 | 32,460,004 | 647,061 | 33,107,065 | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
CREDICORP LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 (RESTATED) AND 2021
| Note | 2023 | 2022 (Restated) | 2021 | |||||||||||||
| S/000 | S/000 | S/000 | ||||||||||||||
| CASH AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES | ||||||||||||||||
| Net profit for the year | 4,959,878 | 4,760,110 | 3,671,829 | |||||||||||||
| Adjustment to reconcile net profit to net cash arising from operating activities: | ||||||||||||||||
| Provision for credit losses on loan portfolio | 7(c) | 3,957,143 | 2,158,555 | 1,558,951 | ||||||||||||
| Depreciation and amortization | 9 and 10(a) | 511,174 | 485,207 | 521,967 | ||||||||||||
| Depreciation of right-of-use assets | 11(a) | 147,833 | 151,282 | 161,287 | ||||||||||||
| Depreciation of investment properties | 12(h) | 8,115 | 7,107 | 7,302 | ||||||||||||
| Provision for sundry risks | 12(j) | 95,873 | 43,846 | 70,824 | ||||||||||||
| Deferred (income) tax expense | 17(b) | (76,088 | ) | 113,063 | 547,393 | |||||||||||
| Adjustment of technical reserves | - | - | 914,852 | |||||||||||||
| Net gain on securities | 21 | (425,144 | ) | (5,468 | ) | (28,650 | ) | |||||||||
| Impairment loss on goodwill | 10(b) | 71,959 | - | - | ||||||||||||
| Net Gain on financial assets designated at fair value through profit and loss | - | - | (54,663 | ) | ||||||||||||
| Net gain of trading derivatives | (53,665 | ) | (65,187 | ) | (221,064 | ) | ||||||||||
| Net Income from sale of property, furniture and equipment | 25 | (1,654 | ) | (14,979 | ) | (16,083 | ) | |||||||||
| Net Loss (net gain) from sale of seized and recovered assets | 1,867 | (11,355 | ) | (10,684 | ) | |||||||||||
| Expense for share-based payment transactions | 23 | 83,328 | 81,679 | 73,997 | ||||||||||||
| Net gain from sale of written-off portfolio | 25 | (83,515 | ) | (18,712 | ) | (15,700 | ) | |||||||||
| Intangible losses due to withdrawals and dismissed projects | 25 | 96,978 | 25,140 | 17,630 | ||||||||||||
| Others | 3,005 | 28,840 | (5,538 | ) | ||||||||||||
| Net changes in assets and liabilities | ||||||||||||||||
| Net (increase) decrease in assets: | ||||||||||||||||
| Loans | (1,105,306 | ) | (5,385,064 | ) | (9,636,648 | ) | ||||||||||
| Investments at fair value through profit or loss | (456,626 | ) | 1,575,498 | 745,156 | ||||||||||||
| Investments at fair value through other comprehensive income | (5,164,701 | ) | (460,914 | ) | 7,508,131 | |||||||||||
| Cash collateral, reverse repurchase agreements and securities borrowings | (330,448 | ) | 622,589 | 783,010 | ||||||||||||
| Sale of written off portfolio | 239,599 | 24,543 | 24,477 | |||||||||||||
| Other assets | 520,331 | 413,307 | (294,130 | ) |
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
| Note | 2023 | 2022 (Restated) | 2021 | |||||||||||||
| S/000 | S/000 | S/000 | ||||||||||||||
| Net increase (decrease) in liabilities | ||||||||||||||||
| Deposits and obligations | 2,271,524 | (46,199 | ) | 2,485,794 | ||||||||||||
| Due to Banks and correspondents | 3,455,502 | 1,804,784 | 1,103,063 | |||||||||||||
| Payables from repurchase agreements and securities lending | (2,790,671 | ) | (9,034,940 | ) | (5,935,578 | ) | ||||||||||
| Bonds and notes issued | (2,213,122 | ) | (298,572 | ) | (90,217 | ) | ||||||||||
| Short-term and low-value lease payments | (108,357 | ) | (106,356 | ) | (86,417 | ) | ||||||||||
| Other liabilities | 2,604,047 | 3,107,346 | 1,303,118 | |||||||||||||
| Income tax paid | (2,139,140 | ) | (1,106,572 | ) | (1,130,415 | ) | ||||||||||
| Net cash flow from operating activities | 4,079,719 | (1,151,422 | ) | 3,972,994 | ||||||||||||
| NET CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
| Revenue from sale of property, furniture and equipment | 53,152 | 5,373 | 11,457 | |||||||||||||
| Loss from sale of investment property | - | (359 | ) | - | ||||||||||||
| Revenue from sales and reimbursement of investment to amortized cost | 1,245,434 | 1,006,325 | 590,605 | |||||||||||||
| Purchase of property, furniture and equipment | 9 | (322,371 | ) | (192,700 | ) | (107,790 | ) | |||||||||
| Purchase of investment property | 12(h) | (37,667 | ) | (87,132 | ) | (12,068 | ) | |||||||||
| Purchase of intangible assets | 10(a) | (828,803 | ) | (703,670 | ) | (532,244 | ) | |||||||||
| Purchase of investment at amortized cost | (1,359,245 | ) | (1,122,802 | ) | (3,677,671 | ) | ||||||||||
| Acquisition of subsidiaries, net of cash received | (5,564 | ) | - | - | ||||||||||||
| Net cash flows from investing activities | (1,255,064 | ) | (1,094,965 | ) | (3,727,711 | ) | ||||||||||
| NET CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
| Dividends paid | 16(e) | (1,994,037 | ) | (1,196,422 | ) | (398,808 | ) | |||||||||
| Dividends paid to non-controlling interest of subsidiaries | (62,051 | ) | (48,577 | ) | (4,156 | ) | ||||||||||
| Principal payments of leasing contracts | (157,386 | ) | (156,529 | ) | (155,141 | ) | ||||||||||
| Interest payments of leasing contracts | (25,574 | ) | (25,054 | ) | (27,374 | ) | ||||||||||
| Purchase of treasury stock | 16(b) | (85,575 | ) | (83,605 | ) | (58,907 | ) | |||||||||
| Sale of treasury stock | - | 9,949 | 3,752 | |||||||||||||
| Acquisition of non-controlling interest | (1,773 | ) | (5,877 | ) | (7,822 | ) | ||||||||||
| Subordinated bonds | 62,044 | (94,700 | ) | 183,160 | ||||||||||||
| Net cash flows from financing activities | (2,264,352 | ) | (1,600,815 | ) | (465,296 | ) |
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
| Note | 2023 | 2022 (Restated) | 2021 | |||||||||||||
| S/000 | S/000 | S/000 | ||||||||||||||
| Net increase (decrease) of cash and cash equivalents before effect of changes in exchange rate | 560,303 | (3,847,202 | ) | (220,013 | ) | |||||||||||
| Effect of changes in exchange rate of cash and cash equivalents | (760,651 | ) | (1,325,381 | ) | 2,779,791 | |||||||||||
| Cash and cash equivalents at the beginning of the period | 34,120,962 | 39,293,545 | 36,733,767 | |||||||||||||
| Cash and cash equivalents at the end of the period | 33,920,614 | 34,120,962 | 39,293,545 | |||||||||||||
| Additional information from cash flows | ||||||||||||||||
| Interest received | 18,658,791 | 14,717,523 | 11,615,448 | |||||||||||||
| Interest paid | (5,080,522 | ) | (2,847,538 | ) | (2,230,990 | ) | ||||||||||
| Transactions that do not represent cash flow | ||||||||||||||||
| Recognition of lease operations | 103,715 | 108,751 | (116,511 | ) | ||||||||||||
| Reclassification from investments at amortized cost to fair value with changes in equity | - | 2,232,663 | - | |||||||||||||
| Sale option of minor shares of MiBanco Colombia | - | (42,964 | ) | - |
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
Reconciliation of liabilities arising from financing activities:
| Changes that generate cash flows | Changes that do not generate cash flows | |||||||||||
| 2023 | As of January 1, 2023 | Received | Paid | Exchange difference |
Others | As of December 31, 2023 |
||||||
| S/000 | S/000 | S/000 | S/000 | S/000 | S/000 | |||||||
| Subordinated bonds | 5,738,414 | 284,944 | (222,900) | (150,568) | 30,230 | 5,680,120 | ||||||
| Lease liabilities | 578,074 | - | (182,960) | (8,627) | 126,092 | 512,579 | ||||||
| 6,316,488 | 284,944 | (405,860) | (159,195) | 156,322 | 6,192,699 | |||||||
| Changes that generate cash flows | Changes that do not generate cash flows | |||||||||||
| 2022 | As of January 1, 2022 | Received | Paid | Exchange difference |
Others | As of December 31, 2022 |
||||||
| S/000 | S/000 | S/000 | S/000 | S/000 | S/000 | |||||||
| Subordinated bonds | 6,061,301 | - | (94,700) | (253,293) | 25,106 | 5,738,414 | ||||||
| Lease liabilities | 655,294 | - | (181,583) | (14,782) | 119,145 | 578,074 | ||||||
| 6,716,595 | - | (276,283) | (268,075) | 144,251 | 6,316,488 | |||||||
| Changes that generate cash flows | Changes that do not generate cash flows | |||||||||||
| 2021 | As of January 1, 2021 | Received | Paid | Exchange difference |
Others | As of December 31, 2021 |
||||||
| S/000 | S/000 | S/000 | S/000 | S/000 | S/000 | |||||||
| Subordinated bonds | 5,381,323 | 2,018,216 | (1,835,056) | 475,132 | 21,686 | 6,061,301 | ||||||
| Lease liabilities | 750,578 | - | (182,515) | 36,866 | 50,365 | 655,294 | ||||||
| 6,131,901 | 2,018,216 | (2,017,571) | 511,998 | 72,051 | 6,716,595 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
CREDICORP LTD. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2023 AND 2022 (RESTATED)
| 1 | OPERATIONS |
Credicorp Ltd. (hereinafter “Credicorp”) is a limited liability company incorporated in Bermuda in 1995 to act as a holding company and according to Bermuda’s economic substance regulation, Credicorp Ltd. as an independent legal entity, is considered a “Pure Equity Holding Entity” (PEHE). Credicorp’s activity is to maintain equity interests and receive passive income such as dividends, capital gains and other income from investments in securities.
In order to keep Credicorp’s structure and organization fully aligned with the new legislation on economic substance approved by the Government of Bermuda on January 11, 2019, as of October 29, 2020, the decisions of the Credicorp Board of Directors will be limited to issues related to Credicorp’s strategy, objectives and goals, main action plans and policies, risk control and management, annual budgets, business plans and control of their implementation, supervision of the main expenses, investments, acquisitions and disposals, among other “passive” decisions related to Credicorp. The authority to make decisions applicable to Credicorp’s subsidiaries, such as the adoption of relevant strategic or management decisions, the assumption of expenses for the benefit of its affiliates, the coordination of group activities, and the granting of credit facilities in favor of its affiliates, it has been transferred to Grupo Crédito SA, a subsidiary of Credicorp.
Credicorp, through its banking and non-banking subsidiaries and its associate Pacífico S.A. Entidad Prestadora de Salud (hereinafter Pacífico EPS), offers a wide range of financial, insurance and health services and products, mainly throughout Peru and in other countries (see Note 3 (c)). Its main subsidiary is Banco de Crédito del Perú (hereinafter “BCP” or the “Bank”), a multiple bank incorporated in Peru.
Credicorp’s legal address is Clarendon House 2 Church Street Hamilton, Bermuda; likewise, the main offices from where Credicorp’s businesses are managed are located at Calle Centenario N ° 156, La Molina, Lima, Perú.
The consolidated financial statements presented correspond to the financial statement of Credicorp and subsidiaries (hereinafter “the Group”). The consolidated financial statements as of December 31, 2022, and for the year then ended were approved by the Board of Directors on February 23, 2023, and presented to the Annual General Meeting of Shareholders on March 27, 2023. The consolidated financial statements as of December 31, 2023, and for the year ended on that date were approved and authorized for issuance by the Board of Directors and Management on February 29, 2024 and will be presented for final approval in the Annual General Meeting of Shareholders, which will be held within the deadlines established by law; in Management’s opinion, these will be approved without modifications.
Due to the adoption of IFRS 17 Insurance Contracts, the Group has restated its consolidated financial statements as of December 31, 2022 and for the year ended on that date, which have been approved on February 29, 2024.
Credicorp is listed on the Lima and New York Stock Exchanges.
| 2 | SIGNIFICANT TRANSACTIONS |
| a) | Main acquisitions, incorporations and mergers – |
In 2023 and 2022, the Group has not carried out significant transaction of acquisitions, incorporations, or mergers of companies.
| b) | Current situation – |
Between the months of December 2022 and December 2023, Peru was affected by political and social events, as well as natural events that affected different regions, as indicated below:
In December 2022, in response to various political events that occurred in Peru, a series of riots and social protests occurred in different regions of the country, which resulted in a decrease in commercial activity in said regions and, therefore, the liquidity restriction in certain people and companies.
On June 8, 2023, the Government declared a State of Emergency for 60 days in certain areas, due to intense rainfall and possible El Niño Phenomenon, a measure that has been extended to date.
As of December 31, 2023, the Bank maintains a balance of rescheduled loans for a total of S/692.6 million of retail loans (S/116.9 million as of December 31, 2022). In the opinion of Management, this situation has not affected the Group’s operations, nor has it generated any significant impact on the financial statements presented as of December 31, 2023 and 2022.
| 3 | SIGNIFICANT ACCOUNTING POLICIES |
The significant accounting policies applied in the preparation of Credicorp’s consolidated financial statements are set out below:
| a) | Basis of presentation, use of estimates and changes in accounting policies - |
The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
The consolidated financial statements as of December 31, 2023, and 2022, have been prepared following the historical cost criteria, except for investments at fair value through profit or loss, investments at fair value through other comprehensive income, financial assets designated at fair value through profit or loss, derivative financial instruments, and financial liabilities at fair value through profit or loss, which have been measured at fair value.
The consolidated financial statements are presented in Soles (S/), which is the functional currency of Group, see paragraph (c) below, and values are rounded to thousands of soles, except when otherwise indicated.
The preparation of the consolidated financial statements in accordance with IFRS requires Management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of significant events in notes to the consolidated financial statements.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. The final results could differ from said estimates; however, the Management expects that the variations, if any, will not have a material impact on the consolidated financial statements.
The most significant estimates included in the accompanying consolidated financial statements are
related to the calculation of the allowance of the expected credit loss on loan portfolio and the estimation of the liability for life insurance contracts under the general valuation model.
Furthermore, other estimates exist, such as: valuation of investments, technical reserves for claims, intangible, impairment of goodwill, credit loss for investments at fair value through other comprehensive income and investments at amortized cost,
the valuation of derivative financial instruments and deferred income tax. The accounting criteria used for these estimates are described below.
The Group has adopted the following standards and modifications for first time for its annual period that starts on January 1, 2023, as described below:
| (i) | IFRS 17 “Insurance contracts” – See note 3(b). |
| (ii) | Definition of Accounting Estimates – Modifications to IAS 8- |
The amendments to IAS 8 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. They will also clarify how entities use measurement techniques and inputs to develop accounting estimates.
The modifications had no impact on the Group’s consolidated financial statements.
| (iii) | Disclosure of accounting policies – Amendments to IAS 1 and Statement of Practice IFRS 2- |
They provide guidance and examples to help entities apply materiality judgments to accounting policy disclosures. The amendments are intended to help entities provide more useful disclosures of accounting policies by replacing the requirement that entities disclose their “material” accounting policies with a requirement to disclose their “material” accounting policies and adding guidance on how entities apply the concept of materiality. in making decisions on accounting policy disclosures.
The amendments have had an impact on the disclosures of the Group’s accounting policies, but not on the measurement, recognition, or presentation of any item in the Group’s financial statements.
| (iv) | Deferred Taxes related to Assets and Liabilities – Modifications to IAS 12- |
These modifications establish that deferred taxes arising from a single transaction that, upon initial recognition, give rise to taxable and deductible temporary differences of the same value must be recognized. This will generally apply to transactions such as leases (for lessees) and decommissioning or remediation obligations, where recognition of deferred tax assets and liabilities will be required. These modifications must apply to transactions that occur on or after the beginning of the first comparative period presented. Additionally, deferred tax assets (to the extent it is probable that they can be utilized) and deferred tax liabilities should be recognized at the beginning of the first comparative period for all deductible or taxable temporary differences associated with:
- Right-of-use assets and lease liabilities, and
- Liabilities for dismantling, restoration and similar, and the corresponding amounts recognized as part of the cost of the related assets.
The cumulative effect of these adjustments is recognized in retained earnings or another component of equity, as appropriate.
Previously, IAS 12 did not establish any particular accounting treatment for the tax effects of leases that are recognized on the balance sheet and for similar transactions, so different approaches were considered acceptable. Entities that are already recognizing deferred taxes from these transactions will have no impact on their financial statements.
The modifications will be effective for the annual reporting periods beginning on or after January 1, 2023, with early adoption permitted.
The modifications had no impact on the Group’s consolidated financial statements.
In 2022, the Group adopted the following modifications:
| (i) | Modifications to IFRS 3 - Reference to the Conceptual Framework – |
Minor amendments were made to IFRS 3 Business Combinations to update references to the Conceptual Framework for Financial Reporting and add an exception to recognize liabilities and contingent liabilities within the scope of IAS 37 Provisions, Contingent Liabilities and IFRIC Interpretation 21 Liens.
The amendments also confirm that contingent assets should not be recognized on the acquisition date. The modification became effective for annual reporting periods beginning on January 1, 2022.
The modification of the standard did not have an impact on the consolidated financial statements.
| (ii) | Onerous Contracts - Cost of fulfilling a contract - Modifications to IAS 37 – |
In May 2020, the International Accounting Standards Board issued amendments to IAS 37 to specify what cost an entity should include when assessing whether a contract is onerous or loss-making. The amendment to IAS 37 clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and the allocation of other costs directly required to fulfill the contracts. Before recognizing a separate provision for the onerous contract, the entity shall recognize any impairment loss that has occurred in relation to the assets used to fulfill the contract.
The Amendment is effective for annual reporting periods beginning on or after January 1, 2022.
The modification had no impact on its consolidated financial statements.
| (iii) | Annual improvements to IFRS Cycle 2018 - 2020 – |
As part of its 2018-2020 annual improvements to the IFRS standard process, in May 2020, the International Accounting Standards Board issued the following amendments:
| - | IFRS 9 Financial Instruments – clarification that commissions must be included in the 10.0 percent test for the derecognition of financial liabilities. |
| - | IFRS 1 First-time adoption of international financial reporting standards – allows entities that have measured their assets and liabilities at the book value recorded in the books of their parent company to also measure any accumulated translation differences using the amounts reported by the headquarters. |
This modification will also apply to associates and joint ventures that have assumed the same expectation with IFRS 1.
The amendment is effective for annual reporting periods beginning on or after January 1, 2022.
The modification had no impact on its consolidated financial statements.
| b) | Change in accounting policies, adoption of new IFRS and disclosures- |
IFRS 17 replaces IFRS 4 Insurance Contracts for annual periods beginning on or after January 1, 2023. The Group has restated the 2022 information applying the transitional provisions of IFRS 17.
The nature of the changes in accounting policies is summarized as follows:
Changes in classification and measurement:
IFRS 17 establishes specific principles for the recognition and measurement of insurance contracts issued and reinsurance contracts maintained by the Group.
The key principles of IFRS 17 applied are:
| - | The Group identifies insurance contracts as those under which it accepts a significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specific uncertain future event (the insured event) adversely affects to the policyholder. |
| - | The Group evaluates the products and separates the implicit derivatives, the different investment components and the different goods or services of the insurance contract services and accounts for them in accordance with the standards that apply to them. |
| - | The Group divides insurance and reinsurance contracts into groups that it will recognize and measure. |
| - | The Group determines the Unit of Account (UoA) requested by the new regulation, for long-term businesses, taking into consideration the product portfolio, currency, cost and year of issue. |
| - | For general insurance and short-term life insurance contracts, the measurement principles of the premium allocation approach (PAA) do not differ significantly from the considerations used by the Group under IFRS 4: |
| - | The Liability for Remaining Coverage reflects accrued premiums less insurance acquisition cash flows plus deferred premiums. |
| - | The Group determines the level of onerousness of each group of contracts by calculating the combined ratio of each Unit of Account. If the Unit of Account is onerous, the liability for remaining coverage involves explicit recognition of the loss component. |
| - | The measurement of the liability for incurred claims is determined based on the discounted value considering the expected payment flows and includes an explicit risk adjustment for non-financial risk. |
| - | For long-term life insurance contracts, the Group recognizes and measures groups of insurance contracts in: |
| - | A present value of expected future cash flows that incorporates all available information on fulfillment cash flows and considers market interest rates. A risk adjustment for non-financial risk is included. |
| - | An amount that represents the future technical profit (the contractual service margin or CSM) in the group of contracts. |
| - | Recognizes the gain from a group of insurance contracts during each period in which the Group provides insurance contract services, as the Group frees itself from risk. If a group of contracts is expected to be onerous (i.e. loss-making) during the remaining coverage period, the Group recognizes the loss immediately. |
Changes in presentation and disclosure –
For presentation in the consolidated statement of financial position, the Group groups together the insurance and reinsurance contracts and presents them separately:
| - | Reinsurance Contract Assets. |
| - | Insurance Contract Liability. |
The portfolios mentioned above are those established on initial recognition in accordance with the requirements of IFRS 17.
The descriptions of items in the income statement and other comprehensive income have changed compared to last year. Previously, the Group reported the following items:
| - | Net Claims. |
| - | Incurred for life general and health insurance contracts. |
| - | Acquisition costs. |
Instead, IFRS 17 requires the separate presentation of:
| - | Insurance Service result of the insurance service (which includes income and expenses of the insurance service). |
| - | Underwriting result (which includes income and expenses from reinsurance contracts). |
| - | The net financial expenses of the insurance activity, which are presented in the headings of interest and similar expenses, see note 19. |
The Group provides disaggregated qualitative and quantitative information in the notes to the financial statements on:
| - | Amounts recognized in their financial statements for insurance contracts. |
| - | Significant judgments, and changes in those judgments, when applying the standard. |
Transition settings. -
On the transition date, January 1, 2022, the Group:
| - | Has identified, recognized, and measured each group of insurance contracts as if IFRS 17 had always been applied. |
| - | Existing balances that would not exist if IFRS 17 had always been applied were derecognized. |
| - | Recognized any resulting net difference in equity. |
The Group decided to apply the fair value transition methodology as obtaining reasonable and supportable information to apply the full retrospective approach was impracticable without disproportionate cost or effort. The fair value method consists of obtaining the amount for which a portfolio of liabilities could be transferred to a third party. This amount was compared with the balance of the estimate of technical provisions (Best Estimation of Liabilities – “BEL”) and Risk Adjustment existing on the transition date, and the result was the CSM on said date. Likewise, the future benefit provided by the insurance contracts (Contractual Service Margin – “CSM”) was determined and will be released in the income statement to the extent that the Group provides its services to the insured. In determining the fair value, the Group has applied the requirements of IFRS 13 Fair Value Measurement.
To apply the fair value approach, the Group has used reasonable and sustainable information available at the transition date in order to:
| - | Identify groups of insurance contracts. |
| - | Determine if any contract is a direct participation insurance contract. |
| - | Identify any discretionary cash flows for insurance contracts without direct participation features. |
The discount rate for the group of contracts applying the fair value approach was determined on the transition date. Therefore, to measure compliance cash flows at the transition date, the discount rate (locked-in rate) was determined using the bottom-up approach at inception.
The Group has chosen to disaggregate insurance financial income or expenses between the amounts included in results and the amounts included in other comprehensive income and readjust to zero the accumulated amount of insurance financial income or expenses recognized in other comprehensive income on the date of Transition. The Group used the fair value approach for those contracts with initial recognition prior to January 1, 2022, and the full retrospective approach for contracts recognized on this date or later.
As a result of the initial application of IFRS 17, the Group has restated its consolidated financial statements as of January 1, 2022, mainly recognizing a decrease in equity of S/210.8 million and as of December 31, 2022, an increase in equity of S/15.5 million and net income of S/14.7 million. Additionally, IFRS 17 requires that the net balances of insurance and reinsurance contract portfolios be presented as assets or liabilities, as appropriate, in the consolidated statement of financial position. In this sense, the amounts related to these accounts differ from what was previously presented under IFRS 4 as of December 31, 2022, and January 1, 2022 (transition date).
| c) | Basis of consolidation – |
Investment in subsidiaries -
The consolidated financial statements comprise the financial statements of Credicorp and its Subsidiaries for all the years presented.
Under IFRS 10 all entities over which the Group has control are subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:
| - | Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee). |
| - | Exposure, or rights, to variable returns from its involvement with the investee, and |
| - | The ability to use its power over the investee to affect its returns. |
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
| - | The contractual arrangement with the other vote holders of the investee. |
| - | Rights arising from other contractual arrangements. |
| - | The Group’s voting rights and potential voting rights. |
The Group assesses whether or not it controls an investee if the facts and circumstances indicate that there are changes in any of the elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. The consolidated financial statements include assets, liabilities, income and expenses of Credicorp and its subsidiaries.
Profit or loss for the period and each component of the other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interest, even if this results in the non-controlling interest with a negative balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
Assets in custody or managed by the Group, such as investment funds and private pension funds (AFP funds) and others, are not part of the Group’s consolidated financial statements, note 3(x).
Transactions with non-controlling interest -
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction and any resulting difference between the price paid and the price for which non-controlling interests are adjusted is recognized directly in the consolidated statement of changes in equity.
The Group does not record any additional goodwill after the purchase of the non-controlling interest, nor does it recognize a gain or loss from the sale of the non-controlling interest.
Loss of control -
If the Group loses control over a subsidiary, it derecognizes the carrying amount of the related assets (including goodwill) and liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognized in profit or loss. Any residual investment retained is recognized at fair value.
Investments in associates -
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the entity, but without exercising control over said policies.
The Group’s investments in its associates are recognized initially at cost and are subsequently accounted for using the equity method. They are included in “Other assets” in the consolidated statement of financial position; the returns resulting from the use of the equity method of accounting are included in “Net gain on securities” of the consolidated statement of income.
As of December 31, 2023, and 2022, the following entities comprise the Group (the individual or consolidated figures of their financial statements are presented in accordance with IFRS and before eliminations for consolidation purposes, except for the elimination of Credicorp’s treasury shares and its related dividends):
| Entity |
Activity and country of
incorporation
|
Percentage of interest
(direct and indirect)
|
Assets | Liabilities | Equity | Net profit (loss) | ||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
| % | % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||
| Grupo Crédito S.A. and Subsidiaries (i) | Holding, Peru | 100.00 | 100.00 | 213,520,111 | 211,585,283 | 181,336,108 | 181,786,223 | 32,184,003 | 29,799,060 | 4,562,831 | 4,598,002 | |||||||||||||||||||||
| Pacífico Compañía de Seguros y Reaseguros S.A and Subsidiaries (ii) | Insurance, Peru | 98.86 | 98.86 | 16,549,171 | 15,895,361 | 13,443,688 | 13,486,189 | 3,105,483 | 2,409,172 | 803,384 | 460,326 | |||||||||||||||||||||
| Atlantic Security Holding Corporation and Subsidiaries (iii) |
Capital Markets, Cayman Islands | 100.00 | 100.00 | 6,870,781 | 9,536,197 | 5,729,744 | 7,643,879 | 1,141,037 | 1,892,318 | 474,780 | 228,474 | |||||||||||||||||||||
| Credicorp Capital Ltd. and Subsidiaries (iv) | Capital Markets and asset management, Bermuda | 100.00 | 100.00 | 5,817,259 | 4,504,629 | 4,655,097 | 3,559,262 | 1,162,162 | 945,367 | (135,495 | ) | 31,089 | ||||||||||||||||||||
| CCR Inc.(v) | Special purpose Entity, Bahamas | 100.00 | 100.00 | 347 | 388 | 69 | 4 | 278 | 384 | (106 | ) | (646 | ) | |||||||||||||||||||
| (i) | Grupo Crédito is a company whose main activities are to carry out management and administration activities of the Credicorp Group’s subsidiaries and invest in shares listed on the Peruvian Stock Exchange and unlisted shares of Peruvian companies. we present the individual or consolidated figures of their financial statements are presented in accordance with IFRS and before eliminations for consolidation purposes: |
| Entity |
Activity and country of
incorporation
|
Percentage of interest
(direct and indirect)
|
Assets | Liabilities | Equity | Net profit (loss) | ||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
| % | % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||
| Banco de Crédito del Perú and Subsidiaries (a) | Banking, Peru | 97.74 | 97.74 | 193,804,856 | 193,278,232 | 168,645,448 | 170,005,995 | 25,159,408 | 23,272,237 | 4,583,662 | 4,683,775 | |||||||||||||||||||||
| Inversiones Credicorp Bolivia S.A. and Subsidiaries (b) |
Banking, Bolivia | 99.92 | 99.92 | 13,558,260 | 12,740,036 | 12,740,067 | 11,826,789 | 818,193 | 913,247 | 84,898 | 80,377 | |||||||||||||||||||||
| Prima AFP (c) | Private pension fund administrator, Peru | 100.00 | 100.00 | 740,728 | 734,966 | 240,656 | 238,177 | 500,072 | 496,789 | 149,549 | 109,511 | |||||||||||||||||||||
| Tenpo SpA and Subsidiaries (d) | Holding, Chile | 100.00 | 100.00 | 387,355 | 242,754 | 185,502 | 90,186 | 201,853 | 152,568 | (111,692 | ) | (124,748 | ) | |||||||||||||||||||
| a) | BCP was established in 1889 and its activities are regulated by the Superintendency of Banks, Insurance and Pension Funds -Perú (the authority that regulates banking, insurance and pension funds activities in Perú, hereinafter “the SBS”). |
Its main Subsidiary is Mibanco, Banco de la Microempresa S.A. (hereinafter “MiBanco”), a banking entity in Perú oriented towards the micro and small business sector. As of December 31, 2023, the assets, liabilities, equity and net result of Mibanco amount to approximately S/16,897.8 million, S/13,902.2 million, S/2,995.6 million and S/203.8 million, respectively (S/17,225.4 million, S/14,444.8 million, S/2,780.6 million, and S/424.9 million, respectively December 31, 2022).
| b) | Inversiones Credicorp Bolivia S.A. (hereinafter “ICBSA”) was established in February 2013 and its objective is to make capital investments for its own account or for the account of third parties in companies and other entities providing financial services, exercising or determining the management, administration, control and representation thereof, both nationally and abroad, for which it can invest in capital markets, insurance, asset management, pension funds and other related financial and/or stock exchange products. |
Its principal Subsidiary is Banco de Crédito de Bolivia (hereinafter “BCB”), a commercial bank which operates in Bolivia. As of December 31, 2023, the assets, liabilities, equity and net result of BCB were approximately S/13,500.9 million, S/12,612.3 million, S/888.6 million and S/83.1 million, respectively (S/12,697.8 million, S/11,838.0 million, S/859.8 million and S/68.0 million, respectively as of December 31, 2022).
| c) | Prima AFP is a private pension fund and its activities are regulated by the SBS. |
| d) | Tenpo SpA (hereinafter “Tenpo”, before “Krealo SpA”) was established in Chile in January 2019; and is oriented to make capital investments outside the country. On July 1, 2019, Tenpo (Krealo SpA) acquired Tenpo Technologies SpA (before “Tenpo SpA”) and Tenpo Prepago S.A. (before “Multicaja Prepago S.A.”). |
| (ii) | Pacífico Seguros is an entity regulated by the SBS and its activities comprise the contracting and management of all types of general risk and life insurance, reinsurance and property investment and financial operations. Its Subsidiaries are Crediseguro Seguros Personales, Crediseguro Seguros Generales and Pacifico Asiste and it has Pacífico EPS as an associate, which are dynamic participants in the business of multiple and health insurance, respectively. |
| (iii) | Its most important subsidiary is ASB Bank Corp. (merged with Atlantic Security Bank on August 2021, was established in September 9, 2020 in the Republic of Panama; its main activities are private and institutional banking services and trustee administration, mainly for BCP’s Peruvian customers. |
| (iv) | Credicorp Capital Ltd. was formed in 2012, and its main subsidiaries are Credicorp Capital Holding Peru (owner of Credicorp Capital Perú S.A.A.), Credicorp Holding Colombia (owner of Credicorp Capital Colombia and Mibanco – Banco de la Microempresa de Colombia S.A.), and Credicorp Capital Holding Chile (owner of Credicorp Capital Chile), which carry out their activities in Peru, Colombia and Chile, respectively. We present below the consolidated financial statements in accordance with IFRS and before eliminations for consolidation purposes: |
| Entity | Percentage of interest (direct and indirect) | Assets | Liabilities | Equity | Net profit (loss) | |||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| % | % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||
| Credicorp Holding Colombia S.A.S. and Subsidiaries (a) | 100.00 | 100.00 | 4,803,072 | 2,889,479 | 3,997,781 | 2,322,263 | 805,291 | 567,216 | (163,342) | 16,198 | ||||||||||||||||||||
| Credicorp Capital Holding Chile and Subsidiaries (b) | 100.00 | 100.00 | 681,338 | 1,194,663 | 502,248 | 1,000,676 | 179,090 | 193,987 | (10,716) | 12,658 | ||||||||||||||||||||
| Credicorp Capital Holding Perú S.A. and Subsidiaries (c) | 100.00 | 100.00 | 296,083 | 374,768 | 149,459 | 230,261 | 146,624 | 144,507 | 4,318 | 5,268 | ||||||||||||||||||||
| a) | Credicorp Holding Colombia was incorporated in Colombia on March 5, 2012, and its main purpose is the administration, management and increase of its equity through the promotion of industrial and commercial activity, through investment in other companies or legal persons. |
Its main subsidiaries are Credicorp Capital Colombia S.A, which was acquired in Colombia in 2012 and merged with Ultraserfinco S.A. In June 2020, this subsidiary is oriented to the activities of commission agents and securities brokers. Likewise, Mibanco Colombia (before Banco Compartir S.A.) was acquired in 2019 and merged with Edyficar S.A.S. in October 2020, this subsidiary is oriented to grant credits to the micro and small business sector. As of December 31, 2023, Credicorp Holding Colombia has recognized an impairment of the goodwill of Mibanco Colombia for S/64.1 million (Credicorp’s equity holders), see note 10(b). As of December 31, 2023, and 2022, the direct and indirect interest held by Credicorp and the assets, liabilities, equity and net income were:
| Entity | Percentage of interest (direct and indirect) | Assets | Liabilities | Equity | Net profit (loss) | |||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||
| % | % | S/000 | S/000 | S/000 | S/000 | S/000 | S/000 | S/000 | S/000 | |||||||||||||||||||||
|
Credicorp Capital Colombia S.A.
|
100.00 | 100.00 | 2,328,169 | 1,050,130 | 2,123,915 | 898,518 | 204,254 | 151,612 | 37,120 | 33,045 | ||||||||||||||||||||
|
MiBanco – Banco de la Microempresa de Colombia S.A.
|
85.58 | 85.58 | 2,113,333 | 1,530,270 | 1,848,607 | 1,289,569 | 264,726 | 240,701 | (72,608 | ) | 13,513 | |||||||||||||||||||
| b) | Credicorp Holding Chile was incorporated in Chile on July 18, 2012, and aims to invest for long-term profitable purposes, in corporeal goods (movable and immovable property) and incorporeal, located in Chile or abroad. Its main subsidiary is Credicorp Capital Chile S.A. |
| c) | Credicorp Capital Holding Perú S.A. was incorporated in Peru on October 30, 2014, and aims to be the Peruvian holding of investment banking. Its main subsidiary Credicorp Capital Perú S.A.A.; which has as its main activity the function of holding shares, participations and transferable securities in general, providing advisory services in corporate and financial matters, and investment in real estate. |
| (v) | CCR Inc. was incorporated in the year 2000. Its main activity is to manage funding granted to BCP by foreign financial entities or investors. These loans matured in the course of 2022 and were guaranteed by transactions carried out by BCP. |
The information presented is based on the legal structure of the Group. The information grouped according to the business lines is revealed in note 27 Operating segments.
|
d) |
Functional, presentation and foreign currency transactions – |
| (i) | Functional and presentation currency - |
Credicorp and its Subsidiaries which operate in Peru consider the sol as their functional and presentation currency since it reflects the nature of the economic events and relevant circumstances for most of the Group´s entities, given the fact their major transactions and/operations, such as: loans granted, financing obtained, sale of insurance premiums, interests and similar income, interest and similar expenses, as well as a significant percentage of their purchases; they are agreed and settled in soles.
| (ii) | Transactions and balances in foreign currency - |
Foreign currency transactions are those entered into in currencies other than the functional currency. These transactions are initially recorded by Group entities at the exchange rates of their functional currencies at the transaction dates. Monetary assets and liabilities denominated in foreign currency are adjusted at the exchange rate of the functional currency prevailing at the date of the consolidated statement of financial position.
The differences arising from the exchange rate prevailing at the date of each consolidated statement of financial position presented and the exchange rate initially used in recording transactions are recognized in the consolidated statement of income in the period in which they occur, in “Exchange differences result”, except for those that correspond to monetary items that are part of a hedging strategy for a net investment abroad, said accumulated difference is recognized in the caption “Exchange differences on translation of foreign operations” in the consolidated statement of comprehensive income. Non-monetary assets and liabilities acquired in foreign currency are recorded at the exchange rate prevailing at the initial transaction date and are not subsequently adjusted.
| (iii) | Group entities with functional currency other than the presentation currency - |
Given that the Group’s entities in Colombia, Chile, Cayman Islands, Panama and Bolivia, Mexico, United States of America and Spain have a functional currency different from the sol, the balances were translated into Soles for consolidation purposes in accordance with IAS 21, “The Effects of Changes in Foreign Exchange Rates” as follows:
| - | Assets and liabilities, at the closing rate prevailing at the date of each consolidated statement of financial position. |
| - | Income and expense, at the average exchange rate for each month of the year. |
All resulting exchange differences were recognized within “Exchange differences on translation of foreign operations”, including the differences in financial instruments designated as accounting hedges of said investments, in the consolidated statement of comprehensive income.
| e) | Recognition of income and expenses from banking activities - |
Effective interest rate method:
Interest income is recorded using the effective interest rate (EIR) method for all financial instruments measured at amortized cost and at fair value through other comprehensive income. Interest expenses corresponding to liabilities measured at amortized cost are also recorded using the EIR.
The EIR is the rate that exactly discounts future cash flows that are estimated to be paid or received during the life of the instrument or a shorter period, if appropriate, to the gross carrying amount of the financial asset or financial liability. The EIR (and, therefore, the amortized cost of the financial asset or liability) is calculated taking into account any discount, premium and transaction costs that are an integral part of the effective interest rate of the financial instrument, but the expected credit loss are not included.
Interest income and expenses:
The Group calculates interest income by applying the EIR to the gross carrying amount of those financial assets that are not impaired.
When a financial asset becomes impaired and, therefore, is considered in Stage 3 (as set out in Note 3(j) impairment of financial assets), the Group calculates interest income by applying the interest rate effective at the carrying amount of the asset, net of its provision for credit loss. If the evidence that the criteria for the recognition of the financial asset in Stage 3 are no longer met, the Group recalculates interest income in gross terms.
Interest income and expenses accrued from all financial instruments that generate interest, including those related to financial instruments carried at fair value through profit or loss, are recorded under the heading “Interest and similar income” and “Interest and similar expenses” of the consolidated statement of income.
Dividends:
Dividends are recorded as income when they are declared.
Commissions and fees:
Income from commissions (which are not an integral part of the TIE) and fees are recognized as they are earned. Commissions and fees include, among others, the commission charged for the banking service in general such as account maintenance, shipping, transfers, loan syndication fees and fees for contingent credits.
Income from commissions and fees is recognized at an amount that reflects the consideration to which the Group expects to be entitled in exchange for providing the services. Performance obligations, as well as the timing of their satisfaction, are identified and determined at the time of contract. The Group’s revenue contracts do not include multiple performance obligations.
When the Group provides a service to its clients, the consideration is invoiced and generally collected immediately after the provision of a service at a given time or at the end of the contract period for a service provided over time.
The Group has generally concluded that it is the principal in its revenue arrangements because it normally controls the services before transferring them to the client.
Other income and expenses:
All other income and expenses are recorded in the period in which the performance obligation is satisfied.
| f) | Insurance activities – |
Below is the accounting policy for the insurance activity applying IFRS 17 for the periods 2023 and 2022:
Classification of insurance and reinsurance contracts:
Insurance contracts are those contracts when the Group (the insurer) has accepted a significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. This definition also includes reinsurance contracts that the Group holds.
Once a contract has been classified as an insurance contract, it remains an insurance contract for the remainder of its lifetime, even if the insurance risk reduces significantly during this period, unless all rights and obligations are extinguished or expire. Life insurance contracts offered by the Group include retirement, disability and survival insurance, annuities and individual life which includes Investment Link insurance contracts. The non-life insurance contracts issued by the Group mainly include automobile, fire and allied lines, technical branches and healthcare.
Accounting treatment of insurance and reinsurance contracts:
Separation of the components of insurance and reinsurance contracts-
The Group evaluates its insurance and reinsurance products to determine if they contain components that must be accounted for under another IFRS instead of IFRS 17.
After separating the various components, an entity must apply IFRS 17 to all remaining components of the (host) insurance contract.
Currently, the Group’s products do not include differentiated components that require separation.
Investment components are the amounts that an insurance contract requires an insurer to reimburse a policyholder, even if an insured event does not occur.
Investment components that are highly interrelated with the insurance contract of which they are a part are considered non-distinct and are not accounted for separately. However, the receipts and payments of the investment components are excluded from the income and expenses of the insurance activity.
Some reinsurance contracts issued contain profit commission arrangements. Under these agreements, there is a guaranteed minimum amount that the policyholder will always receive, whether in the form of profit commission, claims, or other contractual payment, regardless of whether the insured event occurs.
The components of the profit commission are assessed to be highly interrelated with the insurance component of reinsurance contracts so that they are considered non-distinct investment components so that separate accounting is not required.
Aggregation level and classification -
The grouping of contracts into units of account is carried out based on the types of products, currency, cost and year of subscription; because they have similar risks, they are managed jointly and no contract portfolio can contain contracts issued more than one year apart.
The Group classifies a portfolio of insurance contracts into two categories based on the expected profitability at the policy or contract level at the time of its recognition based on reasonable and sustainable information in:
| - | Onerous contracts: A contract will be classified as onerous on the initial recognition date as long as the present value of the expected outflows is greater than the inflows. |
| - | Non-onerous contracts: Will contain contracts for which, upon initial recognition, the present value of the expected outflows is less than the present value of the inflows. |
It should be noted that a contract for accounting purposes may differ from what is considered a contract for other purposes (i.e. legal or management).
The expected return of these portfolios at inception is determined based on existing actuarial valuation models that take into account new and existing businesses.
Recognition of insurance and reinsurance contracts -
The Group recognizes the groups of insurance contracts it issues starting from the first of the following:
| - | The beginning of the coverage period of the group of contracts. |
| - | The due date of the first payment of an insured group, or when the first payment is received if there is no due date. |
| - | For a group of onerous contracts, as soon as the facts and circumstances indicate that the group is onerous. |
The Group recognizes a group of reinsurance contracts that it has entered into as follows:
| - | Whether the reinsurance contracts held provide proportional coverage at the beginning of the coverage period of the group of reinsurance contracts held or at the initial recognition of any underlying contract, whichever is later. |
| - | In all other cases from the beginning of the coverage period of the group of reinsurance contracts maintained. |
Contract limit -
The Group includes in the measurement of a group of insurance contracts all future cash flows within the limit of each contract in the group. Cash flows are within the limits of an insurance contract if they arise from substantive rights and obligations that exist during the reporting period in which the Group has a substantive obligation to provide the policyholder with insurance services. insurance contract.
The substantive obligation to provide the services of the insurance contract ends when:
| - | The Group has the practical ability to reassess the risks of the particular policyholder and, as a result, can establish a price or level of benefits that fully reflects those risks. |
| - | The following two criteria are met: |
| - | The Group has the practical ability to reassess the risks of the portfolio of insurance contracts contained in the contract and, as a result, can establish a price or profit level that fully reflects the risk of that portfolio. |
| - | The price of the premium until the date of re-evaluation of the risks does not take into account the risks that relate to periods after the date of re-evaluation. |
A liability or asset related to expected premiums or claims outside the limit of the insurance contract is not recognized. These amounts refer to future insurance contracts.
For life contracts with renewal periods, the Group assesses whether the premiums and related cash flows arising from the renewed contract are within the limits of the contract.
Renewal prices are established by the Group considering all risks covered for the insured that would be considered when signing equivalent contracts on the renewal dates of the remaining service.
The Group re-evaluates each group’s contract limit at the end of each reporting period.
Measurement at initial recognition -
General model – Insurance contracts
The general model measures a group of insurance contracts as the total of:
| - | Fulfillment cash flows. |
| - | A risk adjustment for non-financial risk |
| - | The contractual service margin (CSM) which represents the unearned technical profit that the Group will recognize as it provides services in the future. |
Compliance cash flows comprise:
| - | Estimates of future cash flows considering their probability of occurrence. |
| - | An adjustment to reflect the time value of money and the financial risks related to future cash flows. |
The cash flows for each scenario are weighted according to the probability of their occurrence based on the experience of the Group’s portfolio and are discounted using current interest rate assumptions (risk-free curve + Matching Adjustment).
When estimating future cash flows, the Group includes all cash flows that are within the contract limit, including:
| - | Premiums and related cash flows. |
| - | Expected future claims and benefits: |
| - | Payments to beneficiaries for the occurrence of insured events. |
| - | Payments to policyholders resulting from the incorporated surrender and maturity options. |
| - | Acquisition expenses attributable to the portfolio to which the contract belongs. |
| - | Claim settlement expenses. |
| - | Attributable policy maintenance expenses, including recurring commissions expected to be paid to intermediaries. |
| - | An allocation of fixed and variable overhead expenses directly attributable to compliance with insurance contracts. |
If at the time of initially estimating the fulfillment flows of a group of contracts a net outflow is obtained, these contracts become onerous contracts and a liability will be recognized at that initial time in the statement of financial position. This amount is what we call the “loss component”.
A group of contracts that were not onerous on initial recognition may subsequently become onerous if assumptions change, even though the classification of their grouping or Unit of Account remains unchanged.
Simplified Model – initial recognition
The simplified model of the general method is the Premium Allocation Approach (PAA), which is applied by the Group for contracts with a duration equal to or less than one year or for which the amount of the provision does not differ significantly. of the general model.
If significant variability in cash flows from compliance is initially expected that would affect the measurement of the remaining coverage liability, the simplified method cannot be applied.
Under the premium allocation approach, the Group will assume that no contract is onerous unless the facts and circumstances indicate otherwise, which is why initially all contracts are grouped based on risk and how they are managed. To evaluate this possibility, a premium sufficiency test will be used that will evaluate the need to provide an additional provision and classify the Group of contracts as onerous (Onerousness Test).
For insurance contracts that apply the PAA approach, the Group initially recognizes written premiums net of commissions and deferred premiums as provision of remaining coverage (Liability for Remaining Coverage, LRC).
Post measurement – insurance contracts
The book value of a group of insurance contracts after initial recognition will consist of:
(a) Liability for Remaining Coverage (LRC) comprising compliance cash flows, risk adjustment for non-financial risk and CSM of the Contract Group at the end of the reporting period.
(b) Incurred claims liability, which comprises compliance cash flows relating to the payment of reported and pending claims, incurred but not reported claims (IBNR) and claim settlement expenses. A risk adjustment for non-financial risk is also included.
The Group will recognize income or expenses for the variation in the book value of the Liability for Remaining Coverage and the liability for claims incurred:
(a) Income from insurance activity: the reduction of the liability for the service provided in the period.
The CSM at the end of the reporting period represents the gain in the Insurance Contract Group that has not yet been recognized in profit or loss, because it relates to the future service to be provided.
For a group of insurance contracts without direct participation components, the carrying value of the CSM at the end of the reporting period is equal to the carrying value at the beginning of the reporting period adjusted as follows:
| - | The effect of new contracts added to the group. interest accrued on the carrying amount of the CSM during the reporting period, measured at the discount rates at initial recognition. |
| - | Changes in compliance cash flows related to future service such as: |
| ○ | Adjustment for experience: it must be disaggregated to reflect the different factors that cause such adjustments in the expected future benefits of the Group: |
| ● | Adjustment in compliance flows due to claims experience is the variation in actual claims compared to expected claims. Likewise, this variation in the accident rate may lead to changes in the expected compliance flows. This variation will be recorded in a change in the CSM amount. |
| ● | Adjustment for variation in operating assumptions - A variation in the projection operating assumptions (mortality, expenses, rescues, etc.) will be recorded against the CSM for the period. This change will be cumulative with the adjustments made previously. |
| ● | Adjustment for premiums collected: Insurance premiums that relate to future service that have been received in the period require an adjustment to the contractual service margin. Likewise, an additional analysis must be carried out on the extraordinary contributions that the policyholder may make. Whether these new contributions made by the insured, different from regular premiums, should be considered new contracts or part of existing contracts. Therefore, it must be evaluated whether the new contributions are valued using the same conditions as at the beginning of the contract or if they are modified (mortality table, administration expenses, guaranteed rates, etc.). |
| - | In the event that the conditions of the contract are not modified in the extraordinary contribution, that is, it has the same conditions as the original contribution, it is considered that the cash flows are within the limits of the contract, and therefore Both the variation in expected cash flows will be considered as a variation in experience. |
| - | Changes in estimates of the present value of future cash inflows in the remaining coverage liability measured at discount rates. |
| - | Differences between the investment components that are expected to become payable in the period and the actual investment component that becomes payable in the period, measured at discount rates. |
| - | Changes in risk adjustment for non-financial risk that relates to future service. |
| - | The effect of currency exchange differences on the CSM. |
| - | The amount recognized as insurance income due to the transfer of insurance contract services in the period, determined by the allocation of the remaining CSM at the end of the reporting period (before any allocation) during the current coverage period and remaining. |
For a group of insurance contracts with direct participation components, the amount of CSM to be reported in the books will be obtained by applying a series of adjustments to the value of the CSM of the previous period:
| - | The effect of the new contracts added to the group. |
| - | The entity’s participation in the change in the fair value of the underlying elements. |
| - | Changes in compliance cash flows, such as a change in the entity’s loss experience and future expenses compared to those expected in the previous period. |
| - | The effect of currency exchange differences on the CSM. |
| - | The amount recognized as revenue from ordinary insurance activities due to the transfer of services in the period, determined by allocating the remaining contractual service margin at the end of the reporting period (before any allocation) over the current coverage period. |
(b) Insurance activity expenses: for losses in onerous contract groups and reversals of these losses.
The Group will recognize a loss in the period’s results for the net outflow for the Group of onerous contracts, causing the Group’s liability book amount to equal the cash flows from compliance, with the Group’s contractual service margin being zero.
The loss component is released based on a systematic allocation of subsequent changes related to future service in compliance cash flows to:
| (i) | The loss component; and |
(ii) the remaining coverage liability excluding the loss component. The loss component is also updated for subsequent changes related to future service in estimates of compliance cash flows and risk adjustment for non-financial risk.
Systematic allocation of subsequent changes to the loss component results in total amounts allocated to the loss component being zero at the end of the coverage period of a contract group.
(c) Financial expenses and income from insurance: for the time value of money and financial risk effect.
The Group disaggregates financial income or expenses for insurance contracts issued for its immediate annuity and term life portfolios between profit or loss and OCI.
The impact of changes in market interest rates on the value of life insurance and related reinsurance assets and liabilities is reflected in OCI to minimize accounting mismatches between the accounting for financial assets and insurance assets and liabilities. The Group financial assets supporting the insurance portfolios issued are predominantly measured at amortized cost or fair value with changes in other comprehensive income. Financial income or expenses from reinsurance contracts issued by the Group are not disaggregated because the related financial assets are managed on a fair value basis and are measured at fair value with changes in income.
For presentation in the consolidated statement of financial position, the Group aggregates insurance and reinsurance contract portfolios that are assets or liabilities and presents them separately in the following items:
| - | Reinsurance Contract Assets. |
| - | Insurance Contract Libility. |
The presentation in the statement of comprehensive income is as follows:
| - | Insurance service result (including insurance service income and expenses). |
| - | Underwriting (including income and expenses from reinsurance contracts). |
| - | Net financial expenses from insurance activity, presented in interest and similar expenses. See note 19. |
The Company terminates insurance contracts when:
| - | The rights and obligations relating to the contract are extinguished (i.e. released, canceled or expire). |
Significant judgments and estimates.
The Group bases its assumptions and estimates on parameters derived from portfolio experience and these are used to prepare the financial statements. However, existing circumstances and assumptions about future developments could change due to changes in the market or circumstances beyond the Group’s control. Parameters are updated to reflect such changes in assumptions as necessary.
The Group reassesses the CSM in each period with the adjustment for the entity’s experience. Parameters used for estimating future cash flows are a comparison between current and estimated rates, and the following hypotheses are evaluated: mortality, longevity, disability, expenses, and lapses.
For the measurement of the present value of future cash flows, it is necessary to define discount rates that consistently reflect the time value of money.
For the general method, it should be noted that in each valuation, it will be necessary to have two types of differentiated interest rates for discounting cash flows:
| - | Market rate or current valuation rate: the interest rate obtained from current market data and assumptions. The discount rate as of the valuation date will be equal to the risk-free rate of the corresponding currency plus the Matching Adjustment described later. |
| - | Established initial rate or Locked-In Rate (LiR): an interest rate defined at the time of initial recognition of the insurance contract and will remain fixed until the termination of it, and will be used to: |
| - | Measuring cash flows from fulfillment at initial valuation; |
| - | Determining the amount of financial expenses or income from insurance included in the income statement for the period; |
| - | Determining accrued interest on the CSM; |
| - | Determining the portion of the financial effect on Cashflows that will be imputed to interest on liabilities; |
| - | Measuring changes in the contractual service margin. |
For the determination of the discount curve of the established initial rate on the initial recognition date of the contract, the Matching Adjustment methodology (calibration adjustment) will be used. This methodology starts from the assets that cover the Group’s liabilities. Conceptually, the Matching Adjustment is a spread added to the risk-free curve (RFR) for calculating the present value of the Group obligations. This differential will be calculated as the IRR of “de-risked” assets minus the IRR of liabilities, minus the average “Cost of Downgrade” of the portfolio, and an adjustment for sub-”Investment Grade” investments in the portfolio. The determination of the Matching Adjustment is made by product type and currency.
As of December 31, 2023, and December 31, 2022, the Group classified financial liabilities upon initial recognition as measured at amortized cost, except for financial liabilities at fair value through profit or loss. These liabilities include derivatives measured at fair value. Incurred interest is accrued in the “Interest and similar income” item in the consolidated statement of comprehensive income.
Likewise, at the time of initial recognition, Management may irrevocably designate financial liabilities as measured at fair value through profit or loss when one of the following criteria is met:
| - | An inconsistency in measurement that would otherwise arise using different criteria for measuring assets or liabilities is eliminated or significantly reduced; |
| - | They are part of a group of financial liabilities that are managed and their performance is evaluated on a fair value basis, according to a documented investment or risk management strategy; or |
| - | The financial liability contains one or more embedded derivatives that significantly modify the cash flows otherwise required. |
| (i) | Reclassification of financial assets and liabilities – |
The reclassification of financial assets will take place whenever the business model managing the financial assets changes. It is expected that this change will be very infrequent. These changes are determined by approval of the Group’s management as a result of external or internal changes, which must be significant to the Group’s operations and demonstrable to third parties. Financial liabilities are never reclassified.
When the Group changes its business model for managing financial assets, it will prospectively reclassify all affected financial assets from the date of reclassification. The Group will not restate previously recognized gains, losses, or interest (including gains or losses on impairment) recognized.
If the Group reclassifies:
| - | A financial asset from the amortized cost measurement category to the fair value through profit or loss category: its fair value will be measured at the reclassification date. Any gain or loss arising from differences between the previous amortized cost of the financial asset and the fair value will be recognized in profit or loss for the period. |
| - | A financial asset from the fair value through profit or loss measurement category to the amortized cost category: its fair value at the reclassification date becomes its new gross carrying amount. |
| - | A financial asset from the amortized cost measurement category to the fair value through other comprehensive income category: its fair value will be measured at the reclassification date. Any gain or loss arising from differences between the previous amortized cost of the financial asset and the fair value will be recognized in other comprehensive income. The effective interest rate and the measurement of expected credit losses will not be adjusted as a result of reclassification. |
| - | A financial asset from the fair value through other comprehensive income measurement category to the amortized cost category, the financial asset will be reclassified at its fair value at the reclassification date. However, previously recognized accumulated gains or losses in other comprehensive income will be removed from equity and adjusted against the fair value of the financial asset at the reclassification date. As a result, the financial asset will be measured at the reclassification date as if it had always been measured at amortized cost. This adjustment affects other comprehensive income but not profit or loss for the period. |
| - | A financial asset from the fair value through profit or loss measurement category to the fair value through other comprehensive income category, the financial asset will continue to be measured at fair value. |
| - | A financial asset from the fair value through other comprehensive income measurement category to the fair value through profit or loss category, the financial asset will continue to be measured at fair value. The previously recognized accumulated gain or loss in other comprehensive income will be reclassified from equity to profit or loss for the period. |
| g) | De-recognition of financial assets and liabilities - |
Financial assets:
A financial instrument is any agreement that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
The Group determined the classification of its financial instruments at the time of initial recognition.
All financial instruments are initially recognized at their fair value plus the incremental costs related to the transaction that are directly attributable to the purchase or issuance of the instrument, except in the case of financial assets or liabilities carried at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of the assets within a period established in accordance with regulations or conventions in the market (regular market deadlines) are recognized at the negotiation date, that is, the date on which the Group undertakes to buy or sell the asset.
As of December 31, 2023 and 2022, the Group classified financial assets into one of the categories defined by IFRS 9: financial assets at fair value through profit or loss, at fair value through other comprehensive income and at amortized cost based on:
| - | The business model to manage financial assets and |
| - | The characteristics of the contractual cash flows of the financial asset |
Business model -
It represents how financial assets are managed to generate cash flows and is not dependent on Management’s intention with respect to an individual instrument. Financial assets can be managed for the purpose of: i) obtaining contractual cash flows; ii) obtaining contractual cash flows and sale; or iii) others. To evaluate business models, the Group considers:
| - | The risks that affect the performance of the business model and, in particular, the way in which these risks are managed. |
| - | How the performance of the business model and the financial assets held within this business model are evaluated and reported to key Group management personnel. |
If cash flows after initial recognition are realized differently from the Group’s expectations, the classification of the remaining financial assets held in this business model is not modified.
When the financial asset is maintained in business models i) and ii) the application of the only principal and interest payments test is required - “SPPI”.
SPPI Test (Principal and Interest Payment Only) –
Evaluation of the cash flows generated by a financial instrument in order to verify whether the contractual conditions of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest. To conform to this concept, cash flows should include only consideration of the time value of money and credit risk. If the contractual terms introduce exposure to cash flow risk or volatility, such as exposure to changes in equity instrument prices or commodity prices, the financial asset is classified at fair value with changes in results. Hybrid contracts should be evaluated as a whole, including all built-in features. The accounting of a hybrid contract that contains an embedded derivative is carried out jointly, that is, the entire instrument is measured at fair value through profit or loss.
| (i) | Financial assets at amortized cost – |
A financial asset is classified at amortized cost if the following conditions are met:
| - | It remains within a business model whose objective is to maintain the financial asset to obtain contractual cash flows, and |
| - | The contractual conditions give rise, on specified dates, to cash flows that are solely payments of principal and interest. |
After initial recognition, financial assets in this category are valued at amortized cost, using the effective interest rate method, less any credit loss provision. The amortized cost is calculated taking into account any discount or premium incurred in the acquisition and fees that constitute an integral part of the effective interest rate. Interest income is included in the “Interest and similar income” item in the consolidated statement of income.
Financial assets at amortized cost include direct credits that are recorded when the funds are disbursed to clients, and indirect credits (contingent) that are recorded when the documents that support said credit facilities are issued. Likewise, the Group considers as refinanced or restructured those loans that change their payment schedule due to difficulties in payment by the debtor.
The impairment loss is calculated using the expected loss approach and is recognized in the consolidated statement of income in the item “Net gain on securities” for investments and in the item “Credit loss provision for loan portfolio” for credits.
The balance of financial assets, measured at amortized cost, is presented net of the provision for credit losses in the consolidated statement of financial position.
| (ii) | Financial assets at fair value with changes in other comprehensive income – |
The financial assets that the Group maintains in this category are: a) investments in debt instruments, and b) investments in equity instruments, for non-trading purposes, irrevocably designated in the initial recognition.
Investments in debt instruments -
A financial asset is classified and measured at fair value through other comprehensive income when the following conditions are met:
| - | The financial asset is maintained within a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets, and |
| - | The contractual conditions give rise, on specified dates, to cash flows that are solely payments of principal and interest. |
After initial recognition, investments in debt instruments are measured at fair value, recording unrealized gains and losses in the consolidated statement of comprehensive income, net of the corresponding income tax and non-controlling interest, until the investment is sold; in which the accumulated gain or loss is recognized in the “Net gain on securities” item of the consolidated statement of income.
Interest is recognized in the consolidated statement of income in the item “Interest and similar returns” and is reported as interest income using the effective interest rate method.
When a debt instrument is designated in a fair value hedging relationship, any change in fair value due to changes in the hedged risk is recognized in “Interest and similar income” in the consolidated statement of income.
Foreign exchange gains or losses related to the amortized cost of the debt instrument are recognized in the consolidated statement of income, and those related to differences between the amortized cost and the fair value are recognized as part of the unrealized gain or loss. in the consolidated statement of comprehensive income.
The estimated fair value of investments in debt instruments is determined primarily on the basis of quotes or, in the absence of these, on the basis of discounted cash flows using market rates consistent with the credit quality and maturity of the debt instruments. the investment.
The loss due to impairment of investments in debt instruments is calculated using the expected loss approach and is recognized in the consolidated statement of comprehensive income with a charge to the item “Net gain on securities” of the consolidated statement of income; In this sense, it does not reduce the carrying amount of the financial asset in the consolidated statement of financial position, which is maintained at its fair value. The impairment loss recognized in the consolidated statement of comprehensive income is recycled in the consolidated statement of income upon derecognition of the debt instrument.
Investments in equity instruments, for non-trading purposes, irrevocably designated at the initial moment (equity instruments designated at the initial moment) -
At the time of initial recognition, the Group may make an irrevocable election to present equity instruments, which are not held for trading but for strategic purposes, in the category of “At fair value through other comprehensive income”.
After initial recognition, equity investments are measured at fair value, recording unrealized gains and losses in the consolidated statement of comprehensive income, net of the corresponding income tax and non-controlling interest, until the investment is sold, in which the accumulated gain or loss is transferred to the “Retained earnings” item of the consolidated statement of changes in equity; That is, they are never subsequently reclassified to the consolidated statement of income.
Consequently, capital instruments classified in this category do not require an impairment loss assessment.
Dividends are recognized when the right to collection has been established and are recorded in the “Interest and similar income” item in the consolidated statement of income.
| (iii) | Financial assets at fair value through profit or loss – |
Financial assets must be classified and measured at fair value through profit or loss unless they are classified and measured at “Amortized cost” or “At fair value through other comprehensive income”.
The financial assets that the Group maintains in this category are: a) Investments in debt instruments, b) investments in equity instruments for trading purposes, c) financial assets designated at fair value with changes in results from the moment of their recognition. initial, and d) derivative financial instruments for trading purposes.
Debt instruments -
Such instruments are classified in this category because: a) they are held for trading purposes, or b) their cash flows are not solely payments of principal and interest.
After initial recognition, they are measured at fair value, recording the changes in the “Net gain on securities” item in the consolidated statement of income. The accrued interest is calculated using the contractual interest rate and is recorded in the “Interest and similar income” item in the consolidated statement of income.
Capital instruments -
Equity instruments are classified and measured at fair value through profit or loss, unless an irrevocable election is made, at the time of initial recognition, to designate them at fair value through other comprehensive income.
After initial recognition, they are measured at fair value, recording the changes in the “Net gain on securities” item in the consolidated statement of income. Dividend income is recorded in the “Interest and similar income” item in the consolidated statement of income when the right to payment has been recognized.
Financial assets designated at fair value through profit or loss from the moment of initial recognition -
At the time of initial recognition, Management may irrevocably designate financial assets as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from the measurement of the assets or liabilities. or the recognition of their profits and losses on different bases.
After their initial recognition, they are measured at fair value, recording the changes in the consolidated statement of income.
As of December 31, 2023 and 2022, the Group classified financial liabilities in their initial recognition as measured at amortized cost, except in the case of financial liabilities at fair value through profit or loss. These liabilities include derivatives that are measured at fair value.
The interest incurred is accrued in the “Interest and similar income” item in the consolidated statement of income.
Likewise, at the time of initial recognition, Management may irrevocably designate financial liabilities as measured at fair value through profit or loss when one of the following criteria is met:
| - | A measurement inconsistency that would otherwise arise when using different criteria to measure assets or liabilities is eliminated or significantly reduced; either |
| - | They are part of a group of financial liabilities, which are managed and their performance is evaluated on a fair value basis, in accordance with a documented investment or risk management strategy; either |
| - | The financial liability contains one or more embedded derivatives that significantly modify the otherwise required cash flows. |
| (iv) | Reclassification of financial assets and liabilities – |
The reclassification of financial assets will take place as long as the business model that manages financial assets changes. This change is expected to be very infrequent. These changes are determined by approval of the Group’s management as a result of external or internal changes, which must be significant for the Group’s operations and demonstrable to third parties. Financial liabilities are never reclassified.
When the Group changes its business model for the management of financial assets, it will reclassify all affected financial assets prospectively from the reclassification date. The Group will not restate previously recognized gains, losses or interest (including impairment gains or losses).
If the Group reclassifies:
| - | A financial asset from the amortized cost measurement category to that of fair value through profit or loss: its fair value will be measured on the reclassification date. Any gain or loss that arises due to differences between the previous amortized cost of the financial asset and the fair value will be recognized in the profit or loss of the period. |
| - | A financial asset from the fair value through profit or loss measurement category to the amortized cost category: its fair value on the reclassification date becomes its new gross carrying amount. |
| - | A financial asset from the amortized cost measurement category to that of fair value with changes in other comprehensive income: its fair value will be measured on the reclassification date. Any gain or loss that arises due to differences between the previous amortized cost of the financial asset and the fair value will be recognized in other comprehensive income. The effective interest rate and the measure of expected credit losses will not be adjusted as a result of the reclassification. |
| - | A financial asset from the measurement category of fair value with changes in other comprehensive income to that of amortized cost, the financial asset will be reclassified at its fair value on the reclassification date. However, accumulated gains or losses previously recognized in other comprehensive income will be eliminated from equity and adjusted against the fair value of the financial asset on the reclassification date. As a result, the financial asset will be measured on the reclassification date as if it had always been measured at amortized cost. This adjustment affects the other comprehensive income but not the result for the period. |
| - | A financial asset from the measurement category of fair value through profit or loss to fair value through other comprehensive income, the financial asset continues to be measured at fair value. |
| - | A financial asset from the measurement category of fair value through other comprehensive income to that of fair value through profit or loss, the financial asset continues to be measured at fair value. |
| - | The accumulated gain or loss previously recognized in other comprehensive income will be reclassified from equity to profit or loss for the period. |
| h) | Disposal of financial assets and liabilities – |
Financial assets:
A financial asset (or, where applicable, a portion of a financial asset or a portion of a group of similar financial assets) is derecognized when: (i) the rights to receive cash flows from the asset have expired; or (ii) the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full immediately to a third party under a pass-through arrangement; and the Group has also transferred substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When contractual rights to receive cash flows from the financial asset have been transferred, or a transfer agreement has been entered into, the Group assesses whether it has retained, and to what extent, the risks and benefits inherent in ownership of the asset. When the Group has neither transferred nor retained substantially all risks and benefits inherent in ownership of the asset, nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of its continued involvement with the asset.
In that case, the Group also recognizes the related liability. The transferred asset and related liability are measured in such a way as to reflect the rights and obligations that the Group has retained.
Continued involvement in the form of a guarantee over the transferred asset is measured as the lower of (i) the carrying amount of the asset, and (ii) the maximum consideration received that the Group would be required to repay.
Financial liabilities:
A financial liability is derecognized when the obligation to pay is discharged, cancelled, or expires. When an existing financial liability is exchanged for another from the same borrower under significantly different terms (fails the 10% test established in IFRS 9), or the terms are substantially modified, such exchange or modification is treated as a derecognition of the original liability and a new liability is recognized, with the difference between the carrying amount of the initial financial liability and the consideration paid recognized in the consolidated statement of comprehensive income.
| i) | Offsetting financial instruments - |
Financial assets and liabilities are offset and the net amount is presented in the consolidated statement of financial position when there is a legally enforceable right to offset them and the Management intends to settle them on a net basis or to realize the asset and settle the liability simultaneously.
| j) | Impairment of financial assets - |
As of December 31, 2023, and December 31, 2022, the Group applies a three-stage approach to measure the provision for credit losses, using an expected credit loss impairment model as set out in IFRS 9, for the following categories:
| - | Financial assets at amortized cost. |
| - | Debt instruments classified as investments at fair value through other comprehensive income. |
| - | Indirect loans presented in contingent accounts. |
Financial assets classified or designated at fair value through profit or loss and equity instruments designated at fair value through other comprehensive income are not subject to impairment assessment.
Financial assets migrate through three stages based on changes in credit risk from initial recognition.
Expected credit loss impairment model –
Calculations of credit losses result from models with a series of underlying assumptions regarding the choice of variable inputs and their interdependencies. The expected credit loss impairment model reflects the present value of all cash shortfall events related to default events, either (i) over the following twelve months or (ii) over the expected life of a financial instrument depending on credit impairment from inception. Expected credit loss reflects a probability-weighted outcome considering a range of multiple outcomes based on reasonable and supported forecasts.
Provisions for credit losses will be measured at each reporting date following a three-stage expected credit loss model based on the degree of credit deterioration from inception:
| - | Phase 1: Financial assets whose credit risk has not increased significantly since initial recognition will recognize a reserve for losses equivalent to the credit losses expected to occur from defaults in the next 12 months. For instruments with a maturity of less than 12 months, a default probability corresponding to the remaining term to maturity is used. |
| - | Phase 2: Financial assets that have experienced a significant increase in credit risk compared to initial recognition but are not considered impaired will recognize a loss reserve equivalent to the expected credit losses that are expected to occur during the remaining life of the asset. |
| - | Phase 3: Financial assets with credit impairment at the reporting date will recognize a loss reserve equivalent to the expected credit losses over the entire life of the asset. Interest income will be recognized based on the carrying amount of the asset, net of the credit loss provision. |
Measurement of expected loss –
The measurement of expected credit loss is primarily based on the product of the probability of default (PD), the loss given default (LGD), and the exposure at default (EAD), discounted to the reporting date and considering expected macroeconomic effects and all in accordance with the new regulations.
The details of these statistical parameters are as follows:
| - | PD: It is an estimate of the probability of default over a specified time horizon. Default can only occur at a given point in time during the estimated remaining life, provided the financial asset has not been derecognized previously and still remains in the portfolio. |
| - | LGD: It is an estimate of the loss that occurs in the event of default at a given point in time. It is based on the difference between contractual cash flows owed and those the lender would expect to receive, including from the realization of any collateral. It is typically expressed as a percentage of the EAD. |
| - | EAD: It is an estimate of exposure at a future default date, taking into account expected changes in exposure after the reporting date, including principal and interest repayments, either scheduled by contract or otherwise, and interest accrued for overdue payments. |
The fundamental difference between credit loss considered in Phase 1 and Phase 2 is the PD horizon. Phase 1 estimates use a 12-month horizon, while those in Phase 2 use an expected loss calculated with the remaining term of the asset and consider the effect of significant risk increase. Finally, in Phase 3, the expected loss will be estimated based on the best estimate (“ELBE”), given the status of the collection process for each asset.
Changes from one phase to another –
The classification of an instrument as phase 1 or phase 2 depends on the concept of “significant increase in credit risk” on the reporting date compared to the origination date; in this sense, the definition used considers the following criteria:
| - | If it is more than 30 days late. |
| - | If the probability of default (“PD”) at the reporting date exceeds the PD at the origination date by 50% (absolute thresholds) in all portfolios. |
| - | If the PD at the reporting date exceeds the PD at the origination date at an individualized level for each risk level and by portfolio (relative thresholds). |
| - | The follow-up, alert and monitoring systems for risk portfolios that depend on the current risk policy in Wholesale and Retail Banking are integrated. |
Additionally, all accounts classified as defaults at the reporting date are considered Phase 3. Assessments of significant risk increase from initial recognition and credit impairment are independently conducted at each reporting date. Assets can move in both directions from one phase to another. Reference added: See further detail in note 30.1(c).
Prospective Information –
The measurement of expected credit losses for each phase and the assessment of significant increases in credit risk must consider information about past events and current conditions, as well as projections of future events and economic conditions. For estimating risk parameters (PD, LGD, EAD) used in calculating the provision in Phases 1 and 2, macroeconomic variables that differ between portfolios were included. These projections have a three-year period and, additionally, a long-term projection.
The estimation of expected loss for Phases 1, 2, and 3 will be a weighted estimate considering three future macroeconomic scenarios. Base, optimistic, and pessimistic scenarios are based on macroeconomic projections provided by the internal economic studies team and approved by Senior Management. This same team also provides the probability of occurrence of each scenario. It should be noted that the scenario design is adjusted at least once a year, possibly more frequently if environmental conditions require.
Macroeconomic Factors –
In its models, the Group relies on a wide range of prospective information as economic inputs, such as gross domestic product (GDP) growth, unemployment rates, central bank base rates, among others. The inputs and models used to calculate expected credit losses may not always capture all market characteristics at the date of the financial statements. To reflect this, qualitative adjustments or overlays may be made using expert judgment.
Expected Lifetime –
For instruments in Phase 2 or 3, loss reserves will cover expected credit losses during the instrument’s lifetime. For most instruments, the expected lifetime is limited to the remaining term of the product, adjusted for expected prepayments. For revolving products, an analysis was conducted to determine the expected lifetime period.
Presentation of Credit Loss Provision in the Statement of Financial Position –
| - | Financial assets measured at amortized cost: as a deduction from the gross carrying amount of financial assets; |
| - | Debt instruments measured at fair value through other comprehensive income: no provision is recognized in the statement of financial position because the carrying amount of these assets is their fair value; however, the expected credit loss is presented in accumulated other comprehensive income; |
| - | Indirect credits: the provision for credit loss is presented under “Other liabilities” in the statement of financial position. |
Renegotiated Credits –
When a credit is modified, it is not considered past due but maintains its previous classification as impaired or unimpaired. If the borrower complies with the new agreement for the next six months, and the analysis of their repayment capacity supports a new risk rating improvement, the credit is classified as unimpaired. If after the credit is modified, the borrower defaults on the new agreement, it is considered impaired and past due. See further detail in note 30.1(c).
| k) | Business Combinations – |
Business combinations are accounted for using the acquisition method as set out in IFRS 3 “Business Combinations”, regardless of whether they are equity instruments or other acquired assets.
The cost of an acquisition is measured as the sum of the consideration transferred, measured at fair value at the acquisition date, and the amount of any non-controlling interest in the acquired entity. For each business combination, the Group decides whether the non-controlling interest in the acquired entity should be measured at fair value or at the proportionate share of the identifiable net assets of the acquired entity. Acquisition-related costs are recognized as expenses and included in the “Administrative expenses” line item in the consolidated statement of profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for proper classification and naming in accordance with contractual terms, economic circumstances, and conditions relevant at the acquisition date. This includes the separation of implicit derivatives in contracts entered into by the acquiree.
Any contingency transferred by the acquirer must be recognized at its fair value at the acquisition date. The contingency classified as a financial instrument and within the scope of IFRS 9: “Financial Instruments” is measured at fair value through profit or loss or other comprehensive income in the consolidated statement of profit or loss or in the consolidated statement of comprehensive income. If the contingency is classified as equity, it should not be remeasured, and its subsequent settlement is accounted for within equity.
The acquisition of the non-controlling interest is recognized directly in equity; the difference between the amount paid and the net assets acquired is recognized as an equity transaction. Therefore, the Group does not recognize any additional goodwill after acquiring the non-controlling interest, nor does it recognize a gain or loss on the sale of the non-controlling interest.
If there is a contractual obligation to acquire the shares of the non-controlling interest through a put option, the Group will initially recognize a liability at fair value through profit or loss equivalent to the market value of the non-controlling interest against the “Reserves and others” account in equity. After initial recognition, the liability is measured at fair value, recording changes in the statement of profit or loss until the option is exercised. If the option expires without being exercised, the liability is derecognized, adjusting equity.
The equity attributable to the non-controlling interest is presented separately in the consolidated statement of financial position. Profit attributable to the non-controlling interest is presented separately in the consolidated statement of profit or loss and in the consolidated statement of comprehensive income.
If the business combination is achieved in stages, the acquisition date and previous interest in the acquiree are remeasured at fair value at the acquisition date. Gains or losses arising from such remeasurement are recognized in profit for the period. Likewise, in accordance with IFRS 3, from the acquisition date of a company not under common control, the acquirer has a 12-month period to make adjustments to the initial recognition of goodwill.
Combinations of Entities under Common Control
A business combination between entities or businesses under common control is outside the scope of IFRS 3, as it represents a business combination in which all entities or businesses being combined are ultimately controlled by the same party or parties, both before and after the business combination. In these transactions, the Group recognizes acquired assets under the pooling of interest method, whereby the assets and liabilities of the combined companies are reflected at their carrying values and no goodwill is recognized as a result of the combination.
The consolidated financial statements of the Group have been presented considering the aforementioned.
| l) | Intangibles – |
They mainly comprise internal developments and acquisitions of software licenses used by the Group. Such intangibles are initially recognized at cost and are amortized using the straight-line method over their estimated useful life (between 3 and 5 years).
Intangible assets identified as a result of the acquisition of subsidiaries are recognized in the consolidated statement of financial position at their estimated market value determined on the acquisition date and are amortized using the straight-line method over their estimated useful life, as follows:
|
Estimated useful |
||
| Client relationship - Prima AFP (AFP Unión Vida) | 20.0 | |
|
Client relationship – Credicorp Capital Holding Chile (Inversiones IMT) |
22.0 | |
| Client relationship - Edyficar Peru | 10.0 | |
| Client relationship - Ultraserfinco | 9.2 | |
| Client relationship – Mibanco | 7.0 | |
| Brand - Mibanco | 25.0 | |
| Brand – Joinnus | 20.0 | |
| Brand - Culqi | 5.0 | |
| Fund manager contract - Credicorp Capital Colombia | 20.0 and 28.0 | |
|
Fund manager contract - Credicorp Capital Holding Chile (Inversiones IMT) |
11.0 and 24.0 | |
| Fund manager contract - Ultraserfinco | 23.0 | |
| Core deposits - Mibanco | 6.0 | |
| Others | Between 2.0 and 7.5 |
The period and method of amortization of intangible assets are reviewed at the end of each period. If they differ from the expected useful life of previous estimates, the amortization period should be changed to reflect the change. If there is any change in the expected pattern of future economic benefits embodied in the asset, the amortization method should reflect these changes.
Gains or losses arising from the disposal of an intangible asset are measured as the difference between the net proceeds from the disposal of the asset and the carrying amount of that asset and are recognized in the consolidated statement of income on the date the asset is derecognized.
| m) | Goodwill – |
Goodwill is the excess of the sum of the consideration transferred and the fair value recognized for the acquisition of the net assets acquired and liabilities assumed. If the fair value of the net assets acquired exceeds the consideration transferred, the gain will be recognized in the consolidated statement of income.
After initial recognition, goodwill is measured at cost less accumulated impairment losses. For impairment testing purposes, goodwill acquired in a business combination is, from the acquisition date, allocated to each cash-generating unit (CGU) of the Group that is expected to benefit from the business combination, regardless of whether other assets or liabilities of the acquired entity have been allocated to these units.
If goodwill has been allocated to a cash-generating unit and part of the assets with which that unit operates is disposed of, the goodwill and the disposed assets are included in the transaction’s carrying amount when determining the loss or disposal. Under these circumstances, disposed goodwill is measured based on the relative value of the disposed assets and the portion of the retained cash-generating unit.
The impairment of goodwill is determined by evaluating the recoverable amount for each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than the carrying amount, an impairment loss is recognized. Impairment losses related to goodwill cannot be reversed in future periods.
| n) | Impairment of Non-Financial Assets – |
The Group assesses, at each reporting date, whether there is any indication that an asset may be impaired in value. If there is any indication or when an annual impairment test of an asset is required, the Group estimates the recoverable amount of the asset. The recoverable amount of an asset is the higher of the asset or CGU’s fair value less costs of disposal and its value in use and is determined for each asset individually, unless the asset generates cash flows that are largely independent of those of other assets or group of assets.
When the carrying amount of an asset or its CGU exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is reduced to its recoverable amount. When assessing the value in use, future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the specific risks of the asset. For the determination of fair value less costs of disposal, recent market transactions, if any, are taken into account. If such transactions cannot be identified, a valuation model that is appropriate is used. These calculations are verified against valuation multiples, stock quotes for subsidiaries listed on the stock exchange, and other available indicators of fair value.
For non-financial assets, excluding goodwill, an assessment is made at each reporting date of whether there are indications that previously recognized impairment losses may no longer exist or may have decreased. If such an indication exists, the Group estimates the recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized.
The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined net of depreciation, as if no impairment had been recognized in previous years. Such reversal is recorded in the consolidated statement of income.
| o) | Bank Acceptances – |
Customer debt for acceptances corresponds to accounts payable by customers for import and export transactions, the obligations of which have been accepted by the Group. Obligations to be assumed by the Group are recorded as liabilities.
| p) | Financial Guarantees - |
In the ordinary course of business, the Group provides financial guarantees, such as letters of credit, guarantees, and bank acceptances. Financial guarantees are initially measured at fair value, which is equivalent to the initial consideration received; likewise, letters of credit and guarantees are recorded in the “Other Liabilities” line item of the consolidated statement of financial position and bank acceptances are presented in the consolidated statement of financial position. Subsequent to initial recognition, the Group’s liability for each guarantee is measured at the higher of the amount recognized initially, less the accumulated amortization recognized in the consolidated statement of income, and the best estimate of the expense required to settle any obligation arising from the financial guarantee.
Any increase in the liability related to a financial guarantee is included in the consolidated statement of income. The consideration received is recognized in the “Commissions and Fees” line item of the consolidated statement of income, based on its straight-line amortization over the term of the granted financial guarantee.
| q) | Provisions – |
Provisions are recognized when the Group has a present obligation (legal or implicit) as a result of a past event, and it is probable that resources will be required to settle that obligation, and the amount can be determined in a reliable manner.
The expense related to any provision is presented in the consolidated statement of income net of any reimbursement. If the effect of the time value of money is material, the provision is discounted using a current pre-tax rate that reflects, where appropriate, the specific risks of the liability. When discounting is used, the increase in the provision over time is recognized as a financial cost.
| r) | Contingencies – |
Contingent liabilities are not recognized in the consolidated financial statements. These are disclosed in notes unless the possibility of a payout is remote. Contingent assets are not recorded in the financial statements; these are disclosed if it is probable that an inflow of economic benefits will occur.
| s) | Income Tax – |
Income tax is calculated based on the individual financial statements of each Group entity.
Deferred income tax reflects the effects of temporary differences between the carrying amounts of assets and liabilities for accounting purposes and those determined for tax purposes. Deferred assets and liabilities are measured using the tax rates expected to apply to taxable income in the years in which these differences are expected to be recovered or settled. The measurement of deferred assets and liabilities reflects the tax consequences derived from how Credicorp and its Subsidiaries expect to recover or settle the value of their assets and liabilities at the date of the consolidated statement of financial position.
The carrying amount of deferred tax assets and liabilities may change, even when the amount of temporary differences has not changed, due to a change in the income tax rate. The effect of the change in deferred tax, corresponding to the rate change, will be recognized in the consolidated statement of income for the period, except for items previously recognized outside the consolidated statement of income (either in other comprehensive income or directly in equity).
Deferred tax assets and liabilities are recognized regardless of the time it is estimated that temporary differences are offset. Deferred assets are recognized when it is probable that there will be sufficient future tax benefits for the temporary difference to be applied. At the date of the consolidated statement of financial position, Credicorp and its Subsidiaries assess unrecognized deferred assets and the balance of recognized ones.
Credicorp and its Subsidiaries determine their deferred tax based on the tax rate applicable to their undistributed profits, recognizing any additional tax for dividend distribution on the date the liability is recognized.
Deferred tax assets and liabilities are offset if there is a legal right to offset them and the deferred taxes are related to the same taxable entity and the same tax authority.
| t) | Earnings for Share – |
Basic earnings per share are calculated by dividing the net income for the year attributable to Credicorp shareholders by the weighted average number of common shares outstanding during the period, excluding common shares purchased and held as treasury shares.
Diluted earnings per share are calculated by dividing the net income for the year attributable to Credicorp shareholders by the weighted average of common shares outstanding during the period, excluding common shares purchased and held as treasury shares, plus the weighted average of common shares that would have been issued if all potential dilutive common shares had been converted into common shares.
| u) | Derivative Financial Instruments and Accounting Hedging – |
Negotiable –
The Group trades derivative financial instruments to meet the needs of its clients. The Group may also take positions with the expectation of to benefit from favorable movements in prices, rates, or indices.
Part of the derivative transactions that provide effective economic hedges under the Group’s risk management positions do not qualify as hedges under the specific rules of IFRS 9 and are therefore treated as derivatives for trading purposes.
Derivative financial instruments are initially recognized in the consolidated statement of financial position at fair value and subsequently measured at fair value. Fair values are obtained based on market exchange rates and interest rates. All derivatives are considered assets when fair value is positive and liabilities when fair value is negative. Gains and losses from changes in fair value are recorded in the consolidated statement of income.
Hedging -
The Group uses derivative instruments to manage its exposure to interest rates and foreign currency. In order to manage specific risks, the Group applies hedge accounting for transactions that meet the specific criteria for it.
According to IFRS 9, to qualify as hedging transactions, all the following conditions must be met:
| - | The hedging relationship consists only of hedging instruments and eligible hedged items. |
| - | At the beginning of the hedging relationship, there is a formal designation and documentation of the hedging relationship and the entity’s risk management objective and strategy to undertake the hedge. This documentation will include the identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the entity will assess whether the hedging relationship meets the hedge effectiveness requirements. |
The hedging relationship meets all of the following hedge effectiveness requirements:
| - | There is an economic relationship between the hedged item and the hedging instrument. |
| - | The effect of credit risk does not dominate the value changes that come from this economic relationship. |
| - | The hedge ratio of the hedging relationship is the same as that arising from the amount of the hedged item that the entity actually hedges and the amount of the hedging instrument that the entity actually uses to hedge that amount of the hedged item. |
The accounting treatment is established according to the nature of the hedged item and the fulfillment of the hedging criteria.
(i) Cash flow hedges -
The effective portion of the cumulative gain or loss on the hedging instrument is recognized directly in other comprehensive income in the “Cash flow hedge reserve” line of the consolidated statement of changes in equity, and is reclassified to the consolidated statement of income in the same period or periods in which the hedged transaction affects results; that is, when the income or financial expenses related to the hedge are recorded, or when an anticipated transaction occurs.
The part of the gain or loss on derivatives that represents the ineffective portion is recognized immediately in the consolidated statement of income.
Amounts originally recorded in other comprehensive income and subsequently reclassified to the consolidated statement of income are recorded in the corresponding expense or income lines in which the hedged item is reported.
If the anticipated transaction or firm commitment is no longer expected to occur, the cumulative gain or loss in the cash flow hedge reserve is transferred to the consolidated statement of income. If the derivative expires or is sold, settled, or exercised without replacement or renewal, or if its designation as a hedge has been revoked, any unrealized gain or loss accumulated in the cash flow hedge reserve remains in that reserve until the anticipated transaction or firm commitment affects results. At the same time, the derivative is recognized as a tradable derivative financial instrument.
(ii) Fair value hedges -
The change in the fair value of a fair value hedge and the change in the fair value of the hedged item attributable to the hedged risk are recorded by affecting the book value of the hedged item and are recognized in the consolidated statement of income.
For fair value hedges related to items recorded at amortized cost, any adjustment to the book value of such items as a result of hedge discontinuation will be amortized through the consolidated statement of income over the remaining term of the hedge. Amortization at the effective interest rate may begin as soon as an adjustment occurs, but no later than when the hedged item is no longer adjusted for changes in its fair value attributable to the hedged risk.
If the hedged item is derecognized, the unamortized fair value is recognized immediately in the consolidated statement of income.
If a hedging instrument expires, is sold, settled, or exercised, or if its designation as a hedge no longer meets the criteria to be recorded as such, the hedging relationship is terminated. For fair value hedges related to items recorded at amortized cost, the difference between the fair value and the book value of the hedged item at the end and the face value is amortized over the remaining term of the initial hedge, using the effective interest rate. If the hedged item is derecognized, the unamortized fair value is immediately recognized in the consolidated statement of income. At the same time, the derivative is recognized as a tradable derivative financial instrument.
(iii) Foreign currency net investment hedges -
Foreign currency net investment hedges are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument related to the effective portion of the hedge is recognized in other comprehensive income and accumulated in the “Translation of operations abroad” line of the consolidated statement of changes in equity. The gain or loss related to the ineffective portion is recognized immediately in the consolidated statement of income within “Other income” or “Other expenses”.
Accumulated gains and losses in the consolidated statement of changes in equity are reclassified to the consolidated statement of income when the net investment abroad is disposed of or partially sold.
(iv) Implicit derivatives -
Implicit derivatives in a principal (or host) contract are treated as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the principal contract and such principal contract is not held for trading or measured at fair value with effect on income.
The Group has investments indexed to certain liabilities from life insurance contracts, called “Investment Link”. These instruments have been classified by the Group since their initial recognition as “Financial instruments at fair value with changes in income”.
| v) | Fair value measurement - |
Fair value is the price that would be received for selling an asset or that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurement is based on the assumption that the transaction to sell the asset or transfer the liability takes place, either:
| - | In the principal market for the asset or liability, or |
| - | In the absence of a principal market, in the most advantageous market for the asset or liability. |
The principal or most advantageous market must be accessible to the Group. Also, the fair value of a liability reflects its default risk.
When available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is considered active if transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on a continuous basis.
If there is no quoted price in an active market, the Group uses valuation techniques that maximize the use of relevant observable data and minimize the use of unobservable data.
The valuation technique chosen incorporates all factors that market participants would consider when setting the price of a transaction.
All assets and liabilities for which fair values are determined or disclosed in the consolidated financial statements are classified within the fair value hierarchy, described below, based on the lowest level of data used that is significant to the fair value measurement as a whole:
| - | Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| - | Level 2: Valuation techniques by which the lowest level of information that is significant to the fair value measurement is directly or indirectly observable. |
| - | Level 3: Valuation techniques by which the lowest level of information that is significant to the fair value measurement is not observable. |
The Group determines for assets and liabilities that are recognized at fair value in the consolidated financial statements on a recurring basis, whether transfers occurred between different levels within the hierarchy by reviewing the categorization at the end of each reporting period.
For fair value disclosure purposes, the Group has determined the classes of assets and liabilities based on the nature, characteristics, and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Also, the fair value of financial instruments measured at amortized cost is disclosed in note 30.11(b).
| w) | Segment information - |
The Group reports financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specific criteria.
Operating segments are a component of an entity for which separate financial information is available and is evaluated periodically by the chief operating decision-maker (“CODM”) related to the allocation of resources and performance evaluation. The Group discloses the same financial information that is used internally to assess the performance of operating segments and decide how to allocate resources to segments, note 27.
| x) | Fiduciary activities, fund management, and pension funds - |
The Group provides custody, administration, investment management, and advisory services to third parties that result in holding or lending assets on their behalf. These assets and the results on them are excluded from the consolidated financial statements, as they are not Group assets, note 30.12.
Commissions generated by this activity are included in the “Commissions and fees” line of the consolidated statement of income.
| y) | Cash and cash equivalents - |
For the purposes of the consolidated statement of cash flows, cash and cash equivalents correspond to cash balances, funds deposited with central banks, “overnight” deposits, interbank funds, and deposits with maturities of three months or less from the acquisition date, excluding restricted funds, see note 4(a).
Guarantee funds committed as part of a repurchase agreement are presented in the “Guarantee funds, repurchase agreements, and financing with securities” line of the consolidated statement of financial position, see note 5(a).
Guarantee funds committed in trading of derivative financial instruments are presented in the “Other assets” line of the consolidated statement of financial position, see note 12(c).
Unrealised gains and losses arising from changes in foreign currency exchange rates are not cash flows. However, the effect of exchange rate changes on cash and cash equivalents held or due in a foreign currency is reported in the statement of cash flows in order to reconcile cash and cash equivalents at the beginning and the end of the period. This amount is presented separately from cash flows from operating, investing and financing activities and includes the differences, if any, had those cash flows been reported at end of period exchange rates.
| z) | Repurchase and resale agreements and loans and financing with securities - |
Securities sold under agreements to repurchase on a specific future date are not derecognized from the consolidated statement of financial position because the Group retains substantially all risks and benefits inherent in ownership. The cash received is recorded as an asset in the “Available funds” line, and the corresponding obligation to return it, including accrued interest, is recorded as a liability in the “Accounts payable for repurchase agreements and securities loans” line, reflecting the economic substance of the operation as a loan received by the Group. The difference between the selling price and the repurchase price is accrued during the contract term using the effective interest rate method and is recorded in the “Interest and similar expenses” line of the consolidated statement of income.
As part of this transaction, the Group delivers assets as collateral. When the counterparty receives securities and has the right to sell them or re-deliver them as collateral, the Group reclassifies these securities to the “Investments at fair value with changes in other comprehensive income under collateral” or “Investments at amortized cost under collateral” lines, as appropriate, in the consolidated statement of financial position. When the counterparty receives guarantee funds that will be restricted until the contract maturity, the Group reclassifies such cash to the “Guarantee funds, repurchase agreements, and financing with securities” line of the consolidated statement of financial position. When the counterparty receives credit portfolios as collateral, the Group maintains these credits in the “Credit portfolio, net” line in the statement of financial position, the control of which is kept in off-balance sheet accounts.
On the other hand, securities purchased under agreements to resell on a specific future date are not recognized in the consolidated statement of financial position. The cash granted is recorded as an outflow of an asset from the “Available funds” line, and the corresponding right to collect it, including accrued interest, is recorded in the “Guarantee funds, repurchase agreements, and financing with securities” line, reflecting the economic substance of the operation as a loan granted by the Group. The difference between the purchase price and the resale price is accrued during the contract term using the effective interest rate method and is recorded in the “Interest and similar income” line of the consolidated statement of income.
If securities purchased under a resale agreement are subsequently sold to third parties, the obligation to return the securities is recorded as a short sale in the “Financial liabilities at fair value with changes in income” line of the consolidated statement of financial position, and is measured at fair value, recording gains or losses in the “Net gain on securities” line of the consolidated statement of income.
Loans and financing are usually secured by securities. The transfer of securities to counterparties is only reflected in the consolidated statement of financial position if the risks and benefits inherent in ownership are also transferred.
| aa) | International Financial Reporting Standards issued, but not yet effective - |
The Group decided not to early adopt the following standards and interpretations that were issued but are not yet effective as of December 31, 2023.
Modifications to IAS 1: Classification of Liabilities as Current or Non-Current
In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments clarify the following points:
| - | The meaning of the right to defer settlement of a liability. |
| - | That the right to defer settlement of the liability must exist at the end of the period. |
| - | That classification is not affected by the probability that the entity will exercise its right to defer settlement of the liability. |
| - | That only if any implicit derivative in a convertible liability represents an equity instrument in itself, the terms of the liability would not affect its classification. |
In addition, a disclosure requirement was introduced when a liability derived from a loan agreement is classified as non-current and the entity’s right to defer settlement is subject to the fulfillment of future commitments within a period included in a twelve-month period.
The amendments will be effective for periods beginning on or after January 1, 2024, and must be applied retrospectively. The Group is assessing the impact these amendments will have on its current practices.
The amendments are not expected to have a material impact on the Group’s financial statements.
Supplier Financing Agreements - Modifications to IAS 7 and IFRS 7
In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the characteristics of supplier financing arrangements and require additional information about such arrangements to be disclosed. The objective of the disclosure requirements imposed by the amendments is to help users of financial statements have a better understanding of the effects of supplier financing arrangements on liabilities, cash flows and exposure to liquidity risk. of an entity.
The amendments will be effective for annual periods beginning on or after January 1, 2024. Early application is permitted as long as this fact is disclosed.
The amendments are not expected to have a material impact on the Group’s financial statements.
There are no other standards and amendments to standards that have not yet come into force and that are expected to have a significant impact on the Group, either in the current or future period, as well as in foreseeable future transactions.
| 4 | CASH AND DUE FROM BANKS |
| a) | The composition of the item is presented below: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Cash and clearing (b) | 5,227,446 | 5,410,294 | ||||||
| Deposits with Central Reserve Bank of Peru (BCRP) (b) | 23,673,777 | 24,160,723 | ||||||
| Deposits with Central Reserve Bank of Bolivia and bank Republic of Colombia (b) | 1,397,469 | 634,684 | ||||||
| Deposits with foreign banks (c) | 2,951,396 | 2,582,838 | ||||||
| Deposits with local banks (c) | 600,180 | 1,009,997 | ||||||
| Interbank funds | - | 269,314 | ||||||
| Accrued interest | 70,346 | 53,112 | ||||||
| Total cash and cash equivalents | 33,920,614 | 34,120,962 | ||||||
| Restricted funds | 10,334 | 62,878 | ||||||
| Total cash | 33,930,948 | 34,183,840 |
Cash and cash equivalents presented in the consolidated statement of cash flows exclude restricted funds, see note 3(y).
| b) | Cash, clearing and deposits with Central Banks and Bank of the Republic - |
These accounts mainly include the legal cash requirements that Subsidiaries of Credicorp must keep to be able to honor their obligations with the public. The composition of these funds is as follows:
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Legal cash requirements (i) | ||||||||
| Deposits with Central Reserve Bank of Peru | 21,182,492 | 21,103,687 | ||||||
| Deposits with Central Reserve Bank of Bolivia | 1,352,378 | 628,399 | ||||||
| Deposits with Republic Bank of Colombia | 45,091 | 6,285 | ||||||
| Cash in vaults of Bank | 4,490,602 | 4,714,275 | ||||||
| Total legal cash requirements | 27,070,563 | 26,452,646 | ||||||
| Additional funds | ||||||||
| Overnight deposits with Central Reserve Bank of Peru (ii) | 1,546,478 | 2,013,703 | ||||||
| Term deposits with Central Reserve Bank of Peru (iii) | - | 545,000 | ||||||
| Cash in vaults of Bank and others | 736,844 | 696,019 | ||||||
| Other Deposits BCRP | 944,807 | 498,333 | ||||||
| Total additional funds | 3,228,129 | 3,753,055 | ||||||
| Total | 30,298,692 | 30,205,701 |
| (i) | As of December 31, 2023 cash and deposits that generate interest subject to legal cash requirements in local and foreign currency are subject to an implicit rate of 6.01 percent and 34.87 percent, respectively, on the total balance of obligations subject to legal cash requirements, as required by the BCRP; as of December 31, 2022, 6.01 percent and 34.55 percent, respectively. |
As of December 31, 2023, part of the additional reserve funds in dollars at a variable rate amounting to US$150.0 million, equivalent to S/556.4 million, have cash flow coverage through interest rate swaps (IRS), through which said funds are converted into dollars at a fixed rate, see note 12(c).
The reserve funds, which represent the minimum mandatory, do not earn interest; however, the mandatory reserve deposited in BCRP in excess of minimum mandatory, earns interests at a nominal rate established by BCRP.
In Management’s opinion, the Group has complied with the calculation legal cash requirements established by current regulations.
| (ii) | As of December 31, 2023, the Group maintains four “overnight” deposits with the BCRP, of which one is denominated in soles in amount of S/1,160.0 million and two are denominated in U.S. Dollar in amount of US$104.2 million, equivalent to S/386.5 million. At said date, the deposit in soles and deposits in U.S. Dollar accrue interest at annual rates of 4.00 percent and 5.34 percent, respectively, and have maturities at 5 days. |
As of December 31, 2022, the Group maintained three “overnight” deposits with the BCRP, which one were denominated in soles in amount of S/35.0 million and two in US Dollar in amount of US$518.8 million, equivalent to S/1,978.7 million. At said date, deposits in soles and deposits in U.S. Dollar accrued interest at annual rates of 5.25 percent and 4.39, respectively, and had maturities at 4 days.
| (iii) | As of December 31, 2023, the Group no maintains term deposits with the BCRP. As of December 31, 2022, the group held four term deposits denominated in soles, accruing interest at an annual rate between 7.30 percent and 7.49 percent and expired on January 3, 2023. |
| c) | Deposits with local and foreign banks - |
Deposits with local and foreign banks mainly consist of balances in soles and U.S. Dollar; these are cash in hand and earn interest at market rates. As of December 31, 2023 and 2022 Credicorp and its Subsidiaries do not maintain significant deposits with any bank.
| 5 | CASH COLLATERAL, REVERSE REPURCHASE AGREEMENTS AND SECURITIES BORROWING AND PAYABLES FROM REPURCHASE AGREEMENTS AND SECURITIES LENDING |
| a) | We present below the composition of cash collateral, reverse repurchase agreements and securities borrowing: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Cash collateral on repurchase agreements and security lendings (i) | 607,639 | 649,769 | ||||||
| Reverse repurchase agreement and security borrowings | 719,722 | 452,087 | ||||||
| Receivables for short sales | 83,286 | - | ||||||
| Total | 1,410,647 | 1,101,856 |
| (i) | As of December 31, 2023, the balance mainly comprises cash guarantees in U.S. Dollar and Bolivianos. Cash guarantees were delivered to the Central Bank of Bolivia, in Bolivians and U.S. Dollar for the equivalent of S/590.7 million (S/424.8 million, as of December 31, 2022). As of December 31, 2022, cash collateral for approximately US$52.5 million, equivalent to S/200.4 million to secure a borrowing in Soles of approximately S/185.0 million. |
Cash collateral granted bears interest at an average annual effective interest rate according to market rates. The related liability is presented in “Payables from repurchase agreements and securities lending” of the consolidated statement of financial position, see paragraph (c) below.
| (ii) | Credicorp, mainly through its subsidiaries, provides financing to its customers through reverse repurchase agreements and securities borrowing, in which a financial instrument serves as collateral. Details of said transactions are as follows: |
| 2023 | 2022 | |||||||||||||||||||||||||
| Currency | Average interest rate | Up to 3 days | From 3 to 30 days |
More
than 30
days
|
Carrying amount | Fair value of underlying assets | Average interest rate | Up to 3 days | From 3 to 30 days |
More
than 30
days
|
Carrying amount | Fair value of underlying assets | ||||||||||||||
| % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||
|
Instruments issued by the Colombian Government |
Colombian peso |
6.09 | - | 603,441 | 82,075 | 685,516 | 687,878 | 4.66 | - | 205,480 | 26,979 | 232,459 | 254,226 | |||||||||||||
| Other instruments | Several | 0.96 | 6,722 | 25,585 | 1,899 | 34,206 | 34,223 | 1.69 | 42,616 | 128,232 | 48,780 | 219,628 | 218,859 | |||||||||||||
| 6,722 | 629,026 | 83,974 | 719,722 | 722,101 | 42,616 | 333,712 | 75,759 | 452,087 | 473,085 | |||||||||||||||||
| b) | Credicorp, through its subsidiaries, obtains financing through “Payables from repurchase agreements and securities lending” by selling financial instruments and committing to repurchase them at future dates, including interest at a fixed rate. The details of said transactions are as follows: |
| 2023 | 2022 | |||||||||||||||||||||||||
| Currency |
|
Average interest rate |
Up to 3 days |
From 3 to 30 days |
More
than 30
days
|
Carrying amount | Fair value of underlying assets |
Average interest rate |
Up to 3 days |
From 3 to 30 days |
More
than 30
days
|
Carrying amount | Fair value of underlying assets | |||||||||||||
| % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | % | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||
| Debt instruments, cash and credit portfolio (c) | - | 9,582 | 8,596,559 | 8,606,141 | 9,268,346 | - | 64,273 | 12,268,416 | 12,332,689 | 12,449,218 | ||||||||||||||||
|
Instruments issued by the Colombian Government |
Colombian pesos |
6.22 | - | 1,410,328 | - | 1,410,328 | 1,408,486 | 6.12 | - | 539,731 | - | 539,731 | 536,398 | |||||||||||||
|
Instruments issued by the Chilean Government |
Chilean pesos |
0.75 | 57,066 | - | - | 57,066 | 57,095 | 0.96 | 38,192 | - | - | 38,192 | 38,192 | |||||||||||||
| Other instruments | 6.91 | 41,056 | 53,836 | - | 94,892 | 94,659 | 3.77 | 15,840 | 40,273 | - | 56,113 | 56,193 | ||||||||||||||
| 98,122 | 1,473,746 | 8,596,559 | 10,168,427 | 10,828,586 | 54,032 | 644,277 | 12,268,416 | 12,966,725 | 13,080,001 | |||||||||||||||||
| c) | As of December 31, 2023, and 2022, the Group has repurchase agreements secured with: (i) cash, see Note 4(a), (ii) investments, see Note 6(b), and (iii) loans, see Note 7(a). This item consists of the following: |
| 2023 | 2022 | |||||||||||||
| Carrying | Carrying | |||||||||||||
| Counterparties | Currency | Maturity | amount | Collateral | Maturity | amount | Collateral | |||||||
| S/(000) | S/(000) | |||||||||||||
| BCRP | Sol | January 2024 / September 2025 | 5,436,564 | Investments and credit portfolio | January 2023 / September 2025 | 3,263,472 | Investments and credit portfolio | |||||||
| BCRP - Reactiva Perú (*) | Sol | May 2024 / December 2025 | 1,779,934 | Loans guaranteed by National Government | May 2023 / December 2025 | 6,981,698 | Loans guaranteed by National Government | |||||||
| Banco Central de Bolivia | Boliviano | December 2024 / March 2025 | 590,715 | Cash | January 2023 / December 2023 | 424,822 | Cash | |||||||
| Natixis S.A. | Sol | August 2028 | 270,000 | Investments | August 2028 | 270,000 | Investments | |||||||
| Citigroup Global Markets Limited (i) | U.S. Dollar | August 2026 | 166,905 | Investments | August 2026 | 171,630 | Investments | |||||||
| BCRP - Reactiva Perú Especial (*) | Sol | June 2024 / December 2025 | 133,309 | Loans guaranteed by National Government | June 2023 / December 2025 | 793,734 | Loans guaranteed by National Government | |||||||
| Natixis (ii) | U.S. Dollar | August 2026 | 92,725 | Investments | August 2026 | 95,350 | Investments | |||||||
| Banco de la República | Colombian peso |
January 2024 | 9,569 | Investments | January 2023 | 58,955 | Investments | |||||||
| BCRP, note 5(a)(i) | Sol | - | - | - | March 2023 | 185,000 | Cash with BCRP | |||||||
| Other minors | - | - | - | - | January 2023 | 5,099 | Investments | |||||||
| Accrued interest | 126,420 | 82,929 | ||||||||||||
| 8,606,141 | 12,332,689 | |||||||||||||
(*) Throug Repo Operations, BCP and MiBanco sell representing credit securities guaranteed by the BCRP, they receive soles and are obliged to buy them back at a later date. The credit representing securities with guarantee of the National Government may have the form of a portfolio of credit representing titles or of Certificates of Participation in trustee of the loan portfolio guaranteed by the National Government (Reactiva Especial). The BCRP will charge a fixed interest annual rate in soles of 0.50 percent for the operation and will include a grace period of twelve months without payment of interest or principal. As of December 31, 2023, the total credits granted through the Reactiva Peru program are S/2,877.2 million (S/8,877.2 million, as of December 31, 2022), see Note 7(a).
As of December 31, 2023, said operations accrue interest at fixed and variable rates between 0.50 percent and 13 percent and SOFR 7.42 percent and 7.63 percent, (between 0.50 percent and 12.84 percent and between Libor 6M + 1.68 percent and Libor 6M + 1.90 percent, respectively, as of December 31, 2022). Credicorp and its Subsidiaries are in the process of negotiating with the counterparties to make the change to SOFR.
In July 2023, cross currency swaps (CCS) that hedged certain repurchase agreements were canceled early, the details of which are as follows:
| (i) | Cross currency swaps (CCS) which was designated as cash flow hedge of certain repurchase agreements in U.S. dollars at a variable rate for a nominal amount of US$45 million (US$45 million, equivalent to S/171.6 million, as of December 31, 2022). Through the cross currency swap (CCS), these repurchase agreements were economically converted into Soles at a fixed rate, see Note 12(c). |
| (ii) | Cross currency swap (CCS) which was designated as cash flow hedge of certain repurchase agreements in U.S. dollars at a variable rate for a nominal amount of US$25 million (US$25 million, equivalent to S/95.3 million, as of December 31, 2022). Through the cross currency swap (CCS), these repurchase agreements were economically converted into Soles at a fixed rate, see Note 12(c). |
| 6 | INVESTMENTS |
| a) | Investment at fair value through profit or loss consist of the following: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Government Bonds (i) | 1,555,548 | 651,219 | ||||||
| Investment funds (ii) | 1,199,026 | 885,574 | ||||||
| Mutual funds (iii) | 1,106,548 | 1,582,050 | ||||||
| Restricted mutual funds (iv) | 334,162 | 351,317 | ||||||
| Corporate bonds | 228,302 | 103,330 | ||||||
| Certificates of deposit BCRP (v) | 192,666 | - | ||||||
| Participation in RAL Funds (vi) | 145,414 | 167,781 | ||||||
| Bonds from financial organizations | 92,907 | 47,770 | ||||||
| Shares | 38,723 | 47,820 | ||||||
| Subordinated bonds | 31,582 | 84,121 | ||||||
| ETF (Exchange - Traded Fund) | 29,582 | 25,042 | ||||||
| Central Bank of Chile bonds | 12,655 | 202,986 | ||||||
| Hedge funds | 291 | 280 | ||||||
| Others | 8,917 | 48,269 | ||||||
| Balance before accrued interest | 4,976,323 | 4,197,559 | ||||||
| Accrued interest | 6,338 | 1,775 | ||||||
| Total | 4,982,661 | 4,199,334 |
| (i) | As of December 31, 2023, and 2022 the balance of these instruments includes the following government treasury bonds: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Colombian Government Bonds | 1,401,000 | 609,255 | ||||||
| Peruvian Government Bonds | 141,349 | - | ||||||
| Chilean Government Bonds | 8,497 | 38,153 | ||||||
| Swiss Government Bonds | 4,702 | - | ||||||
| United States of America Government Bonds | - | 3,811 | ||||||
| Total | 1,555,548 | 651,219 |
| (ii) | As of December 31, 2023, the balance corresponds mainly to investment funds in Peru, the United States of America, Colombia and other countries, which represent 54.3 percent, 28.1 percent, 10.0 percent, and 7.6 percent respectively. As of December 31, 2022, the balance corresponds mainly to investment funds in Peru, the United States of America, Colombia and other countries, which represented 44.3 percent, 30.8 percent, 15.5 percent and 9.4 percent respectively. |
| (iii) | As of December 31, 2023, the balance corresponds to mutual funds from Luxembourg, Bolivia, Ireland, and other countries, which represent 52.0 percent, 35.5 percent, 6.7 percent, and 5.8 percent of the total, respectively. As of December 31, 2022, the balance corresponds to mutual funds from Luxembourg, Bolivia, Peru, and other countries, which represent 64.2 percent, 23.5 percent, 4.8 percent, and 7.5 percent of the total, respectively. |
| (iv) | The restricted mutual funds comprise the participation quotas in the private pension funds managed by Prima AFP and are maintained in compliance with the legal regulations in Peru. Their availability is restricted, and the yield received is the same as that received by the private pension funds managed. |
| (v) | As of December 31, 2023, the balance corresponded to 520 certificates of deposit for US$51.9 million, equivalent to S/192.7 million, which accrue interest at an effective annual rate of 5.68 percent, and maturing in January 2024 |
| (vi) | As of December 31, 2023, these funds are approximately Bs194.6 million, equivalent to S/105.2 million, and US$10.8 million, equivalent to S/40.2 million. As of December 31, 2022, these funds amounted to approximately Bs218.7 million, equivalent to S/121.7 million, and US$12.1 million, equivalent to S/46.1 million; and include the investments made by the Group in the Central Bank of Bolivia as guarantee for deposits received from the public. These funds have restrictions for their use and are required from all banks in Bolivia. |
| b) | Investments at fair value through other comprehensive income consist of the following: |
| 2023 | 2022 | |||||||||||||||
| Unrealized gross amount | Unrealized gross amount | |||||||||||||||
| Cost | Profits | Losses | Estimated fair value | Cost | Profits | Losses | Estimated fair value | |||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||
| Debts instruments: | ||||||||||||||||
| Corporate bonds (i) | 13,643,405 | 177,408 | (643,985) | 13,176,828 | 13,914,118 | 61,336 | (1,194,756) | 12,780,698 | ||||||||
| Certificates of deposit BCRP (ii) | 10,924,181 | 11,125 | (53) | 10,935,253 | 7,021,219 | 868 | (2,608) | 7,019,479 | ||||||||
| Government Bonds (iii) | 10,387,141 | 185,055 | (207,320) | 10,364,876 | 9,139,100 | 59,788 | (670,177) | 8,528,711 | ||||||||
| Securitization instruments (iv) | 710,695 | 15,611 | (48,421) | 677,885 | 772,737 | 1,564 | (107,377) | 666,924 | ||||||||
| Negotiable certificates of deposit (v) | 458,503 | 6,501 | (2,368) | 462,636 | 577,286 | 9,988 | (1,516) | 585,758 | ||||||||
| Subordinated bonds | 282,368 | 2,243 | (6,793) | 277,818 | 377,111 | 462 | (17,467) | 360,106 | ||||||||
| Others | 340,867 | 1,210 | (1,739) | 340,338 | 117,123 | 958 | (6,831) | 111,250 | ||||||||
| 36,747,160 | 399,153 | (910,679) | 36,235,634 | 31,918,694 | 134,964 | (2,000,732) | 30,052,926 | |||||||||
| Equity instruments designated at the initial recognition | ||||||||||||||||
| Shares issued by: | ||||||||||||||||
| Alicorp S.A.A. | 12,197 | 134,185 | − | 146,382 | 12,197 | 144,641 | − | 156,838 | ||||||||
| Inversiones Centenario | 112,647 | 23,214 | − | 135,861 | 112,647 | 14,158 | − | 126,805 | ||||||||
| Holding Bursatil Chilena S.A. | 20,457 | − | (1,761) | 18,696 | − | − | − | − | ||||||||
| Holding Bursatil Regional S.A. | 20,599 | − | (2,318) | 18,281 | − | − | − | − | ||||||||
| Corporación Andina de Fomento | 4,441 | 776 | − | 5,217 | 4,441 | 930 | − | 5,371 | ||||||||
| Compañía Universal Textil S.A. | 6,195 | − | (2,415) | 3,780 | 9,597 | − | (3,191) | 6,406 | ||||||||
| Bolsa de Valores de Colombia | 33 | − | 149 | 182 | 3,541 | − | (1,152) | 2,389 | ||||||||
| Bolsa de Valores de Lima | − | − | − | − | 18,367 | 6,632 | − | 24,999 | ||||||||
| Bolsa de Comercio de Santiago | − | − | − | − | 3,995 | 4,006 | − | 8,001 | ||||||||
| Pagos Digitales Peruanos S.A. | 5,611 | − | (5,611) | − | 5,611 | − | (5,611) | − | ||||||||
| Others | 3,522 | 2,906 | (25) | 6,403 | 2,844 | 3,392 | (690) | 5,546 | ||||||||
| 185,702 | 161,081 | (11,981) | 334,802 | 173,240 | 173,759 | (10,644) | 336,355 | |||||||||
| Balance before accrued interest | 36,932,862 | 560,234 | (922,660) | 36,570,436 | 32,091,934 | 308,723 | (2,011,376) | 30,389,281 | ||||||||
| Accrued interest | 473,504 | 396,880 | ||||||||||||||
| Total | 37,043,940 | 30,786,161 | ||||||||||||||
The variation in the fair value of the investments is mainly due to the decrease in interest rates in soles and in foreign currency, which positively affected the investment portfolios at fair value with changes in other comprehensive income as of December 31, 2023. Credicorp’s management has determined that the unrealized losses of investments at fair value through other comprehensive income as of December 31, 2023 and December 31, 2022 are of a temporal nature; considering factors such as the planned strategy in relation to the security or portfolio identified, the related guarantee and the credit rating of the issuers. During 2023, as a result of the evaluation of the impairment loss of investments at fair value with changes in other comprehensive income, the Group has recorded a provision for credit loss of S/4.3 million (provision for credit loss of S/58.3 million ended December 31, 2022), which is presented in the caption “Net gain in securities”, see note 21 of the consolidated statement of income. Furthermore, Management has decided and has the ability to hold each of these investments for a period of time to allow an early recovery in fair value, even before their sufficient recovery or maturity.
The maturities and annual market rates of investments at fair value through other comprehensive income during 2023 and 2022, are as follows:
| Maturities | Annual effective interest rate | |||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||
| S/ | US$ | Other currencies | S/ | US$ | Other currencies | |||||||||||||||||||||||
| Min | Max | Min | Max | Min | Max | Min | Max | Min | Max | Min | Max | |||||||||||||||||
| % | % | % | % | % | % | % | % | % | % | % | % | |||||||||||||||||
| Corporate bonds | Jan-2024 / Nov-2095 | Jan-2023 / Nov-2095 | 3.17 | 18.23 | 2.26 | 54.02 | 2.98 | 15.67 | 4.10 | 13.45 | 0.29 | 29.61 | 2.60 | 14.89 | ||||||||||||||
| Certificates of deposit BCRP | Jan-2024 / Dec-2024 | Jan-2023 / Sep-2023 | 5.42 | 6.74 | − | − | − | − | 7.13 | 7.48 | − | − | − | − | ||||||||||||||
| Government bonds | Jan-2024 / Feb-2055 | Jan-2023 / Feb-2055 | 0.90 | 6.82 | 0.92 | 8.89 | 4.19 | 4.19 | 1.87 | 8.13 | − | 8.19 | − | − | ||||||||||||||
| Securitization instruments | Sep-2025 / Sep-2045 | Aug-2023 / Sep-2045 | 4.11 | 29.78 | 6.09 | 16.11 | 5.80 | 6.00 | 5.03 | 30.87 | 5.64 | 16.63 | 3.50 | 7.50 | ||||||||||||||
| Negotiable certificates of deposits | Jan-2024 / Nov-2037 | Jan-2023 / Jul-2033 | − | − | − | − | 0.53 | 5.74 | 8.76 | 8.76 | 2.48 | 4.80 | 1.00 | 13.50 | ||||||||||||||
| Subordinated bonds | Apr-2024 / Aug-2045 | Jan-2023 / Aug-2045 | 3.23 | 9.42 | 2.81 | 7.14 | − | − | 2.15 | 10.01 | 3.36 | 23.73 | − | − | ||||||||||||||
| Others | Jan-2024 / Feb-2035 | Apr-2023 / Feb-2035 | 0.14 | 1.76 | 8.12 | 9.08 | 0.25 | 6.10 | 2.22 | 9.56 | 8.03 | 8.58 | 0.05 | 0.08 | ||||||||||||||
Likewise, as of December 31, 2023, the Group entered into repurchase agreements for government bonds and BCRP certificates of deposit classified as investments at fair value through other comprehensive income, for an estimated fair value of S/4,269.9 million (S/1,108.1 million as of December 31, 2022), whose related liability is presented in “Accounts payable for repurchase agreements and securities lending” of the consolidated statement of financial position, see note 5(c).
As of December 31, 2023, the Group maintains IRS, which have been designated as hedges of the fair value of certain fixed-rate bonds in US dollars issued by corporate companies classified as investments at fair value through other comprehensive income, for a nominal amount of S/778.9 million (S/926.5 million as of December 31, 2022), see note 12(c); through said IRS these bonds were economically converted to a variable rate.
| (i) | As of December 31, 2023, the balance corresponds to corporate bonds issued by companies in the United States of America, Peru, Colombia and other countries, which represent 40.2 percent, 34.2 percent, 4.3 percent and 21.3 percent of the total, respectively. As of December 31, 2022, the balance corresponds to corporate bonds issued by companies in the United States of America, Peru, Chile and other countries, which represent 39.2 percent, 37.4 percent, 4.4 percent and 19.0 percent of the total, respectively. |
Likewise, as of December 31, 2023, the Group maintains Cross currency swaps (CCS), which were designated as cash flow hedges of certain corporate bonds for nominal amounts of S/126.6 million. As of December 31, 2022, it held CCS for an amount of S/131.4 million, see note 12(c); Through said Cross currency swaps (CCS) the bonds were economically converted to soles at a fixed rate.
As of December 31, 2023, the most significant individual unrealized loss amounts to approximately S/25.2 million of Inversiones Nacionales de Turismo - Intursa S.A, S/34.2 million as of December 31, 2022. The variation of the unrealized loss with respect to to the balance of 2022 is due to the behavior of the market.
| (ii) | As of December 31, 2023, the Group maintains 111,613 BCRP certificates of deposit. As of December 31, 2022, it held 70,253 BCRP certificates of deposit; which are instruments issued at a discount through public auction, negotiated in the Peruvian secondary market and payable in soles. The increase in the balance is mainly due to the acquisition of new instruments. |
| (iii) | As of December 31, 2023 and December 31, 2022, the balance includes the following Government Treasury Bonds: |
| 2023 | 2022 | ||
| S/(000) | S/(000) | ||
| Peruvian Government Bonds | 8,260,261 | 6,126,564 | |
| United States of America Government Bonds | 1,740,125 | 2,103,713 | |
| Colombian Government Bonds | 204,525 | 130,883 | |
| Chilean Government Bonds | 78,034 | 78,383 | |
| Bolivian Government Bonds | 41,436 | 67,040 | |
| Others | 40,495 | 22,128 | |
| Total | 10,364,876 | 8,528,711 |
| (iv) | As of December 31, 2023 and December 31, 2022, the balance of securitization instruments includes the following: |
| 2023 | 2022 | ||
| S/(000) | S/(000) | ||
| Inmuebles Panamericana S.A. | 153,034 | 133,079 | |
| ATN S.A. | 77,666 | 77,047 | |
| Colegios Peruanos S.A. | 77,560 | 61,109 | |
| Multimercados Zonales S.A.C. | 53,540 | 47,643 | |
| Inmobiliaria Terrano S.A. y Operadora Portuaria S.A. | 40,530 | - | |
| Costa de Sol S.A. | 36,717 | 37,653 | |
| Nessus Hoteles Perú S.A. | 34,330 | 32,519 | |
| Concesionaria La Chira S.A. | 27,457 | 25,906 | |
| Ferreyros S.A. | 25,068 | - | |
| Redesur y Tesur | 24,504 | 27,718 | |
| Centro Comercial Plaza Norte S.A.C. | 24,504 | 21,996 | |
| Compañía de Turismo La Paz S.A.C. | 24,174 | 23,375 | |
| Asociación Civil San Juan Bautista | 23,565 | 24,122 | |
| Aeropuertos del Perú S.A. | 14,730 | 30,301 | |
| Homecenters Peruanos S.A. | - | 22,804 | |
| Fábrica Nacional de Cemento S.A. | - | 22,529 | |
| Telefónica Celular de Bolivia S.A. | - | 21,470 | |
| Others | 40,506 | 57,653 | |
| Total | 677,885 | 666,924 |
The instruments have periodic payments until 2045.The pool of underlying assets consists mainly of accounts receivable from income, revenues for services and from maintenance and marketing contributions (Inmuebles Panamericana S.A.), and accounts receivable for electrical transmission services from the Carhuamayo - Cajamarca line (ATN S.A.).
| (v) | As of December 31, 2023, the balance corresponds to certificates equivalent to S/462.6 million in other currencies. issued mainly by the financial systems of Colombia and Bolivia. As of December 31, 2022, the balance corresponds to certificates in other currencies for an amount equivalent to S/573.2 million, certificates in soles for an amount of S/5.9 million and certificates in dollars for an amount of US$1.8 million, equivalent to S/6.7 million. |
| c) | Amortized cost investments consist of the following: |
| 2023 | ||||
| Carrying | Fair | |||
| amount | value | |||
| S/(000) | S/(000) | |||
| Peruvian Government Bonds (i) | 9,323,970 | 8,860,624 | ||
| Corporate bonds (i) | 447,245 | 447,774 | ||
| Other government bonds (i) | 89,484 | 89,482 | ||
| Negotiable certificates of deposits | 55,336 | 29,672 | ||
| Subordinated bonds (i) | 29,648 | 29,801 | ||
| Certificates of payment on work progress (CRPAO) (ii) | 22,717 | 22,433 | ||
| 9,968,400 | 9,479,786 | |||
| Accrued interest | 220,527 | 220,527 | ||
| Total investments at amortized cost, net | 10,188,927 | 9,700,313 | ||
| 2022 | ||||
| Carrying | Fair | |||
| amount | value | |||
| S/(000) | S/(000) | |||
| Peruvian Government Bonds (i) | 9,573,026 | 8,055,873 | ||
| Corporate bonds (i) | 442,558 | 445,684 | ||
| Other government bonds (i) | 114,262 | 113,759 | ||
| Subordinated bonds (i) | 49,597 | 49,830 | ||
| Certificates of payment on work progress (CRPAO) (ii) | 47,584 | 46,786 | ||
| 10,227,027 | 8,711,932 | |||
| Accrued interest | 218,702 | 218,702 | ||
| Total investments at amortized cost, net | 10,445,729 | 8,930,634 | ||
The expected loss of investments at amortized cost as of December 31, 2023 and 2022 is S/2.3 million and S/3.9 million, respectively.
| (i) | As of December 31, 2023, said bonds have maturities between January 2024 and February 2042; accruing interest at an effective annual rate between 5.59 percent and 6.82 percent annually for bonds issued in soles, between 4.53 percent and 21.23 percent for bonds issued in US dollars, and between 8.67 percent and 11.53 percent annually for bonds issued in other currencies. As of December 31, 2022, they have maturities between January 2023 and February 2042; accruing interest at an effective annual rate between 6.65 percent and 8.13 percent annually for bonds issued in soles, between 2.59 percent and 16.30 percent for bonds issued in US dollars, and between 5.66 percent and 11.24 percent annually for bonds issued in other currencies. |
Credicorp Management has determined that, as of December 31, 2023, the difference between the amortized cost and the fair value of these investments is of a temporary nature and Credicorp has the intention and ability to hold each of these investments until maturity.
As of December 31, 2023, the Group has investment repurchase agreement operations at amortized cost for an estimated fair value of S/2,264.1 million. As of December 31, 2022, the amount amounted to S/3,540.5 million, the related liability of which is presented in the item “Accounts payable for repurchase agreements and securities lending” of the condensed interim consolidated statement of financial position, see note 5(c).
| (ii) | As of December 31, 2023, there are 26 certificates of Annual Recognition of Work Progress Payment - CRPAO (57 CRPAO as of December 31, 2022), issued by the Peruvian State to finance projects and concessions. Said issuance is a mechanism established in the concession contract signed between the State and the concessionaire, which allows the latter to obtain financing to continue with the work undertaken. Said investment matures between January 2024 and April 2026, accruing interest at an effective annual rate between 7.12 percent and 7.75 percent (between January 2023 and April 2026, accruing interest at an effective annual rate between 6.20 percent and 7.59 percent as of December 31, 2022). |
The increase in bonds at amortized cost is due to the fact that, in October 2022, Banco de Crédito del Perú reclassified its portfolio of bonds at fair value through other comprehensive income at amortized cost due to a change in its business model, see note 6(b).
| d) | The table below shows the balance of investments classified by maturity, without consider accrued interest or provision for credit loss: |
| 2023 | |||||
| At fair value through other comprehensive income |
Amortized cost |
||||
| S/(000) | S/(000) | ||||
| Up to 3 months | 5,297,064 | 102,203 | |||
| From 3 months to 1 year | 7,778,579 | 1,309,800 | |||
| From 1 to 3 years | 5,409,142 | 733,057 | |||
| From 3 to 5 years | 5,378,056 | 1,193,767 | |||
| More than 5 years | 12,372,792 | 6,629,573 | |||
| Without maturity | 334,803 | - | |||
| Total | 36,570,436 | 9,968,400 | |||
| 2022 | |||||
| At fair value through other comprehensive income |
Amortized cost |
||||
| S/(000) | S/(000) | ||||
| Up to 3 months | 8,246,819 | 191,098 | |||
| From 3 months to 1 year | 2,599,972 | 343,670 | |||
| From 1 to 3 years | 4,088,478 | 1,456,530 | |||
| From 3 to 5 years | 4,374,806 | 459,604 | |||
| More than 5 years | 10,742,851 | 7,776,125 | |||
| Without maturity | 336,355 | - | |||
| Total | 30,389,281 | 10,227,027 |
| 7 | LOANS, NET |
| (a) | This item consists of the following: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Direct loans - | ||||
| Loans | 115,170,158 | 119,602,591 | ||
| Credit cards | 7,112,268 | 6,187,910 | ||
| Leasing receivables | 5,735,973 | 6,174,850 | ||
| Factoring receivables | 3,431,323 | 3,976,898 | ||
| Discounted notes | 3,170,887 | 2,982,291 | ||
| Advances and overdrafts in current account | 321,962 | 219,932 | ||
| Refinanced loans | 2,407,516 | 2,100,018 | ||
| Total direct loans | 137,350,087 | 141,244,490 | ||
| Internal overdue loans and under legal collection loans | 6,133,167 | 5,945,779 | ||
| 143,483,254 | 147,190,269 | |||
| Add (less) - | ||||
| Accrued interest | 1,492,797 | 1,436,105 | ||
| Total direct loans | 144,976,051 | 148,626,374 | ||
| Allowance for loan losses (c) | (8,277,916) | (7,872,402) | ||
| Total direct loans, net | 136,698,135 | 140,753,972 | ||
The loan portfolio is partially backed by guarantees received from clients, consisting mostly of mortgages, bonds, securities, industrial pledges and commercial pledges. Additionally, the Bank has participated in the Reactiva Perú I and II Program (liquidity program launched by the Peruvian Government in 2020, aimed at providing a quick and effective response to the liquidity needs that companies faced due to the impact of COVID-19). 19, ensure continuity in the payment chain).
As of December 31, 2023, the direct credits of the Reactiva Perú program amount to S/2,877.2 million and the credits of the
FAE-MYPE program amount to S/3.6 million and S/10.1 million for FAE-MYPE 1 and FAE-MYPE 2, respectively. As of December 31, 2022, the direct credits of the Reactiva Perú program amounted to S/8,877.2 million and the credits of the FAE-MYPE program to
S/3.9 million and S/83.6 million for FAE-MYPE 1 and FAE-MYPE 2, respectively.
| (b) | As of December 31, 2023, and 2022, the composition of the gross credit balance is as follows: |
| 2023 | 2022 | ||
| S/(000) | S/(000) | ||
| Direct loans, Note7(a) | 143,483,254 | 147,190,269 | |
| Indirect loans, Note 18(a) | 20,051,615 | 20,928,055 | |
| Due from customers on banker’s acceptances | 412,401 | 699,678 | |
| Total | 163,947,270 | 168,818,002 |
Below is the movement of the gross balance of the loan portfolio, direct, indirect and banker’s acceptances by phase for the periods 2023 and 2022:
| Stage 1 | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2022 |
Transfer to Stage 2 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portafolio | Exchange differences and others | Balance as of December 31, 2023 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 86,190,457 | (7,735,234) | (390,080) | 6,837,244 | 113,232 | 865,954 | (957,315) | − | (995,471) | 83,928,787 | ||||||||||
| Residential mortgage loans | 18,640,432 | (3,890,376) | (87,230) | 2,834,608 | 68,812 | − | 1,680,893 | − | (97,070) | 19,150,069 | ||||||||||
| Micro-business loans | 13,425,653 | (10,427,681) | (193,852) | 4,537,627 | 15,883 | (865,954) | 9,439,846 | − | 134,324 | 16,065,846 | ||||||||||
| Consumer loans | 15,386,935 | (6,597,935) | (466,950) | 3,352,518 | 68,103 | − | 3,555,141 | − | (63,752) | 15,234,060 | ||||||||||
| Total | 133,643,477 | (28,651,226) | (1,138,112) | 17,561,997 | 266,030 | − | 13,718,565 | − | (1,021,969) | 134,378,762 | ||||||||||
| Stage 2 | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2022 |
Transfer to Stage 1 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2023 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 8,850,173 | (6,837,244) | (1,901,832) | 7,735,234 | 149,554 | 505,667 | (2,566,703) | − | 2,348 | 5,937,197 | ||||||||||
| Residential mortgage loans | 3,207,081 | (2,834,608) | (498,299) | 3,890,376 | 109,625 | − | (301,840) | − | (14,233) | 3,558,102 | ||||||||||
| Micro-business loans | 7,266,464 | (4,537,627) | (2,151,478) | 10,427,681 | 104,183 | (505,667) | (6,021,879) | − | 48,637 | 4,630,314 | ||||||||||
| Consumer loans | 3,471,604 | (3,352,518) | (1,888,270) | 6,597,935 | 66,491 | − | (1,552,101) | − | (25,687) | 3,317,454 | ||||||||||
| Total | 22,795,322 | (17,561,997) | (6,439,879) | 28,651,226 | 429,853 | − | (10,442,523) | − | 11,065 | 17,443,067 | ||||||||||
| Stage 3 | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2022 |
Transfer to Stage 1 |
Transfer to Stage 2 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2023 |
||||||||||
| S/(000) | que | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 8,150,200 | (113,232) | (149,554) | 390,080 | 1,901,832 | (86,176) | (2,325,958) | (377,652) | (82,364) | 7,307,176 | ||||||||||
| Residential mortgage loans | 1,388,061 | (68,812) | (109,625) | 87,230 | 498,299 | − | (248,110) | (69,258) | (9,037) | 1,468,748 | ||||||||||
| Micro-business loans | 1,741,559 | (15,883) | (104,183) | 193,852 | 2,151,478 | 86,176 | (2,231,402) | (21,388) | 2,621 | 1,802,830 | ||||||||||
| Consumer loans | 1,099,383 | (68,103) | (66,491) | 466,950 | 1,888,270 | − | (1,763,126) | (21,689) | 11,493 | 1,546,687 | ||||||||||
| Total | 12,379,203 | (266,030) | (429,853) | 1,138,112 | 6,439,879 | − | (6,568,596) | (489,987) | (77,287) | 12,125,441 | ||||||||||
| Consolidated 3 Stages | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2022 |
Written off and forgivens | New loans and liquidation, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2023 |
|||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Commercial loans | 103,190,830 | (369,307) | 1,285,445 | (5,480,669) | (377,652) | (1,075,487) | 97,173,160 | |||||||||||||
| Residential mortgage loans | 23,235,574 | (25,205) | − | 1,156,148 | (69,258) | (120,340) | 24,176,919 | |||||||||||||
| Micro-business loans | 22,433,676 | (1,519,522) | (1,285,445) | 2,706,087 | (21,388) | 185,582 | 22,498,990 | |||||||||||||
| Consumer loans | 19,957,922 | (1,410,633) | − | 1,650,547 | (21,689) | (77,946) | 20,098,201 | |||||||||||||
| Total | 168,818,002 | (3,324,667) | − | 32,113 | (489,987) | (1,088,191) | 163,947,270 |
| Stage 1 | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2021 |
Transfer to Stage 2 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2022 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 90,281,463 | (10,689,388) | (782,333) | 7,640,908 | 356,896 | (21,784) | 1,067,360 | - | (1,662,665) | 86,190,457 | ||||||||||
| Residential mortgage loans | 18,702,189 | (4,019,065) | (84,000) | 1,995,000 | 27,176 | 7,496 | 2,247,060 | - | (235,424) | 18,640,432 | ||||||||||
| Micro-business loans | 10,803,696 | (11,398,414) | (235,229) | 4,142,176 | 95,327 | (739,253) | 10,960,618 | - | (203,268) | 13,425,653 | ||||||||||
| Consumer loans | 11,993,823 | (6,578,251) | (300,120) | 3,313,501 | 58,137 | 753,541 | 6,176,605 | - | (30,301) | 15,386,935 | ||||||||||
| Total | 131,781,171 | (32,685,118) | (1,401,682) | 17,091,585 | 537,536 | − | 20,451,643 | − | (2,131,658) | 133,643,477 | ||||||||||
| Stage 2 | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2021 |
Transfer to Stage 1 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2022 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 11,342,409 | (7,640,908) | (2,586,811) | 10,689,388 | 434,550 | 614,296 | (3,906,923) | − | (95,828) | 8,850,173 | ||||||||||
| Residential mortgage loans | 1,758,125 | (1,995,000) | (292,259) | 4,019,065 | 23,225 | 427 | (286,590) | − | (19,912) | 3,207,081 | ||||||||||
| Micro-business loans | 8,927,358 | (4,142,176) | (1,627,919) | 11,398,414 | 93,396 | (599,450) | (6,722,150) | − | (61,009) | 7,266,464 | ||||||||||
| Consumer loans | 2,921,075 | (3,313,501) | (1,025,878) | 6,578,251 | 71,775 | (15,273) | (1,741,617) | − | (3,228) | 3,471,604 | ||||||||||
| Total | 24,948,967 | (17,091,585) | (5,532,867) | 32,685,118 | 622,946 | − | (12,657,280) | − | (179,977) | 22,795,322 | ||||||||||
| Stage 3 | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2021 |
Transfer to Stage 1 |
Transfer to Stage 2 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2022 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 8,756,743 | (356,896) | (434,550) | 782,333 | 2,586,811 | (95,866) | (2,934,746) | (7,803) | (145,826) | 8,150,200 | ||||||||||
| Residential mortgage loans | 1,371,146 | (27,176) | (23,225) | 84,000 | 292,259 | − | (283,888) | (2,442) | (22,613) | 1,388,061 | ||||||||||
| Micro-business loans | 1,906,210 | (95,327) | (93,396) | 235,229 | 1,627,919 | 85,153 | (1,905,488) | (909) | (17,832) | 1,741,559 | ||||||||||
| Consumer loans | 1,099,329 | (58,137) | (71,775) | 300,120 | 1,025,878 | 10,713 | (1,205,204) | (304) | (1,237) | 1,099,383 | ||||||||||
| Total | 13,133,428 | (537,536) | (622,946) | 1,401,682 | 5,532,867 | − | (6,329,326) | (11,458) | (187,508) | 12,379,203 | ||||||||||
| Consolidated 3 Stages | ||||||||||||||||||||
| Loans by class | Balance as of December 31, 2021 |
Written off and forgivens | New loans and liquidation, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance as of December 31, 2022 |
|||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Commercial loans | 110,380,615 | (421,522) | 496,646 | (5,352,787) | (7,803) | (1,904,319) | 103,190,830 | |||||||||||||
| Residential mortgage loans | 21,831,460 | (33,940) | 7,923 | 1,710,522 | (2,442) | (277,949) | 23,235,574 | |||||||||||||
| Micro-business loans | 21,637,264 | (1,164,440) | (1,253,550) | 3,497,420 | (909) | (282,109) | 22,433,676 | |||||||||||||
| Consumer loans | 16,014,227 | (955,356) | 748,981 | 4,185,140 | (304) | (34,766) | 19,957,922 | |||||||||||||
| Total | 169,863,566 | (2,575,258) | − | 4,040,295 | (11,458) | (2,499,143) | 168,818,002 |
| (c) | As of December 31, 2023, and 2022, the allowance for loan losses for direct loans, indirect loans and due from customers on banker’s acceptances, was determined under the expected credit loss model as established in IFRS 9. The movement in the allowance for loan losses is shown below for direct loans and indirect loans and due from customers on banker’s acceptances: |
| Stage 1 | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2022 |
Transfer to Stage 2 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2023 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 86,190,457 | (7,735,234) | (390,080) | 6,837,244 | 113,232 | 865,954 | (957,315) | − | (995,471) | 83,928,787 | ||||||||||
| Residential mortgage loans | 18,640,432 | (3,890,376) | (87,230) | 2,834,608 | 68,812 | − | 1,680,893 | − | (97,070) | 19,150,069 | ||||||||||
| Micro-business loans | 13,425,653 | (10,427,681) | (193,852) | 4,537,627 | 15,883 | (865,954) | 9,439,846 | − | 134,324 | 16,065,846 | ||||||||||
| Consumer loans | 15,386,935 | (6,597,935) | (466,950) | 3,352,518 | 68,103 | − | 3,555,141 | − | (63,752) | 15,234,060 | ||||||||||
| Total | 133,643,477 | (28,651,226) | (1,138,112) | 17,561,997 | 266,030 | − | 13,718,565 | − | (1,021,969) | 134,378,762 | ||||||||||
| Stage 2 | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2022 |
Transfer to Stage 1 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2023 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 8,850,173 | (6,837,244) | (1,901,832) | 7,735,234 | 149,554 | 505,667 | (2,566,703) | − | 2,348 | 5,937,197 | ||||||||||
| Residential mortgage loans | 3,207,081 | (2,834,608) | (498,299) | 3,890,376 | 109,625 | − | (301,840) | − | (14,233) | 3,558,102 | ||||||||||
| Micro-business loans | 7,266,464 | (4,537,627) | (2,151,478) | 10,427,681 | 104,183 | (505,667) | (6,021,879) | − | 48,637 | 4,630,314 | ||||||||||
| Consumer loans | 3,471,604 | (3,352,518) | (1,888,270) | 6,597,935 | 66,491 | − | (1,552,101) | − | (25,687) | 3,317,454 | ||||||||||
| Total | 22,795,322 | (17,561,997) | (6,439,879) | 28,651,226 | 429,853 | − | (10,442,523) | − | 11,065 | 17,443,067 | ||||||||||
| Stage 3 | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2022 |
Transfer to Stage 1 |
Transfer to Stage 2 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2023 |
||||||||||
| S/(000) | que | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 8,150,200 | (113,232) | (149,554) | 390,080 | 1,901,832 | (86,176) | (2,325,958) | (377,652) | (82,364) | 7,307,176 | ||||||||||
| Residential mortgage loans | 1,388,061 | (68,812) | (109,625) | 87,230 | 498,299 | − | (248,110) | (69,258) | (9,037) | 1,468,748 | ||||||||||
| Micro-business loans | 1,741,559 | (15,883) | (104,183) | 193,852 | 2,151,478 | 86,176 | (2,231,402) | (21,388) | 2,621 | 1,802,830 | ||||||||||
| Consumer loans | 1,099,383 | (68,103) | (66,491) | 466,950 | 1,888,270 | − | (1,763,126) | (21,689) | 11,493 | 1,546,687 | ||||||||||
| Total | 12,379,203 | (266,030) | (429,853) | 1,138,112 | 6,439,879 | − | (6,568,596) | (489,987) | (77,287) | 12,125,441 | ||||||||||
| Consolidated 3 Stages | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2022 | Written off and forgivens | New loans and liquidation, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2023 |
|||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Commercial loans | 103,190,830 | (369,307) | 1,285,445 | (5,480,669) | (377,652) | (1,075,487) | 97,173,160 | |||||||||||||
| Residential mortgage loans | 23,235,574 | (25,205) | − | 1,156,148 | (69,258) | (120,340) | 24,176,919 | |||||||||||||
| Micro-business loans | 22,433,676 | (1,519,522) | (1,285,445) | 2,706,087 | (21,388) | 185,582 | 22,498,990 | |||||||||||||
| Consumer loans | 19,957,922 | (1,410,633) | − | 1,650,547 | (21,689) | (77,946) | 20,098,201 | |||||||||||||
| Total | 168,818,002 | (3,324,667) | − | 32,113 | (489,987) | (1,088,191) | 163,947,270 |
| Stage 1 | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2021 |
Transfer to Stage 2 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2022 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 90,281,463 | (10,689,388) | (782,333) | 7,640,908 | 356,896 | (21,784) | 1,067,360 | - | (1,662,665) | 86,190,457 | ||||||||||
| Residential mortgage loans | 18,702,189 | (4,019,065) | (84,000) | 1,995,000 | 27,176 | 7,496 | 2,247,060 | - | (235,424) | 18,640,432 | ||||||||||
| Micro-business loans | 10,803,696 | (11,398,414) | (235,229) | 4,142,176 | 95,327 | (739,253) | 10,960,618 | - | (203,268) | 13,425,653 | ||||||||||
| Consumer loans | 11,993,823 | (6,578,251) | (300,120) | 3,313,501 | 58,137 | 753,541 | 6,176,605 | - | (30,301) | 15,386,935 | ||||||||||
| Total | 131,781,171 | (32,685,118) | (1,401,682) | 17,091,585 | 537,536 | − | 20,451,643 | − | (2,131,658) | 133,643,477 | ||||||||||
| Stage 2 | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2021 |
Transfer to Stage 1 |
Transfer to Stage 3 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2022 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 11,342,409 | (7,640,908) | (2,586,811) | 10,689,388 | 434,550 | 614,296 | (3,906,923) | − | (95,828) | 8,850,173 | ||||||||||
| Residential mortgage loans | 1,758,125 | (1,995,000) | (292,259) | 4,019,065 | 23,225 | 427 | (286,590) | − | (19,912) | 3,207,081 | ||||||||||
| Micro-business loans | 8,927,358 | (4,142,176) | (1,627,919) | 11,398,414 | 93,396 | (599,450) | (6,722,150) | − | (61,009) | 7,266,464 | ||||||||||
| Consumer loans | 2,921,075 | (3,313,501) | (1,025,878) | 6,578,251 | 71,775 | (15,273) | (1,741,617) | − | (3,228) | 3,471,604 | ||||||||||
| Total | 24,948,967 | (17,091,585) | (5,532,867) | 32,685,118 | 622,946 | − | (12,657,280) | − | (179,977) | 22,795,322 | ||||||||||
| Stage 3 | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2021 |
Transfer to Stage 1 |
Transfer to Stage 2 |
Transfer from |
Transfer from |
New loans, liquidation and write-offs, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2022 |
||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Commercial loans | 8,756,743 | (356,896) | (434,550) | 782,333 | 2,586,811 | (95,866) | (2,934,746) | (7,803) | (145,826) | 8,150,200 | ||||||||||
| Residential mortgage loans | 1,371,146 | (27,176) | (23,225) | 84,000 | 292,259 | − | (283,888) | (2,442) | (22,613) | 1,388,061 | ||||||||||
| Micro-business loans | 1,906,210 | (95,327) | (93,396) | 235,229 | 1,627,919 | 85,153 | (1,905,488) | (909) | (17,832) | 1,741,559 | ||||||||||
| Consumer loans | 1,099,329 | (58,137) | (71,775) | 300,120 | 1,025,878 | 10,713 | (1,205,204) | (304) | (1,237) | 1,099,383 | ||||||||||
| Total | 13,133,428 | (537,536) | (622,946) | 1,401,682 | 5,532,867 | − | (6,329,326) | (11,458) | (187,508) | 12,379,203 | ||||||||||
| Consolidated 3 Stages | ||||||||||||||||||||
| Loans by class | Balance at December 31, 2021 | Written off and forgivens | New loans and liquidation, net | Transfers between classes of loans | Sale of loan portfolio | Exchange differences and others | Balance at December 31, 2022 |
|||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Commercial loans | 110,380,615 | (421,522) | 496,646 | (5,352,787) | (7,803) | (1,904,319) | 103,190,830 | |||||||||||||
| Residential mortgage loans | 21,831,460 | (33,940) | 7,923 | 1,710,522 | (2,442) | (277,949) | 23,235,574 | |||||||||||||
| Micro-business loans | 21,637,264 | (1,164,440) | (1,253,550) | 3,497,420 | (909) | (282,109) | 22,433,676 | |||||||||||||
| Consumer loans | 16,014,227 | (955,356) | 748,981 | 4,185,140 | (304) | (34,766) | 19,957,922 | |||||||||||||
| Total | 169,863,566 | (2,575,258) | − | 4,040,295 | (11,458) | (2,499,143) | 168,818,002 |
(*) The movement includes the following effects:
| (i) | calibrations to the PD, LGD and EAD models; |
| (ii) | updating of macroeconomic models and projections; |
| (iii) | increase or decrease in credit risk due to phase changes; |
| (iv) | increase or decrease in the credit risk inherent to the loans that remain in the same phase. |
(**) The movement of the credit loss provision for the 2023 period includes the provision for direct and indirect credits and bank acceptances for approximately S/8,277.9 million y S/368.0 million, respectively (S/7,872.4 million and S/658.6 million , respectively, as of December 31, 2022). The expected loss for indirect credits is included in the “Other liabilities” caption of the consolidated statement of financial position, note 12(a).
In Management’s opinion, the credit loss provision for loans recorded as of December 31, 2023 and 2022, has been determined in accordance with IFRS 9 and is sufficient to cover losses in the loan portfolio.
Gross balance of the portfolio of direct and indirect loans and bank acceptances:
As of December 31, 2023, the gross balance of the loan portfolio decreased compared to the end of December 2022. The decrease was mainly due to:
| (i) | the amortization of Reactiva Perú loans within BCP’s commercial credit portfolio, |
| (ii) | the write-offs of consumer loans from BCP and loans to small and micro businesses from Mibanco Perú and BCP, |
| (iii) | to a lesser extent, the fall in the PEN/USD exchange rate. |
The above effects were partially offset, among other things, by the disbursements of general loans from BCP and loans to small and micro businesses from Mibanco Perú.
Credit loss provision for direct and indirect credits and bank acceptances:
As of December 31, 2023, the credit loss provision of the loan portfolio increased compared to the end of December 2022. This growth was mainly due to:
| (i) | the deterioration of BCP’s consumer loan portfolio, which was reflected in the migrations to stage 3, and which was generated, among other things, by greater client leverage within a macroeconomic context of high inflation, |
| (ii) | the migration to stage 3 of loans to small and micro businesses from Mibanco Perú, |
| (iii) | the record of the expected impact of the El Niño Phenomenon on provisions. |
The above effects were partially offset, among other things, by the payments, recoveries and improvement in the credit profile of specific companies of BCP’s Wholesale Banking, and, in addition, by the write-offs of BCP and Mibanco Perú.
Comments on the calibrations carried out on the internal credit risk models are found in greater detail in note 30.1(c).
| d) | Interest rates on loans are set considering the rates prevailing in the markets where the Group’s subsidiaries operate. |
| e) | A portion of the loan portfolio is collateralized with guarantees received from customers, which mainly consist of mortgages, trust assignments, securities and industrial and mercantile pledges. |
| f) | The following table presents the gross direct loan portfolio as of December 31, 2023, and 2022 by maturity based on the remaining period to the payment due date: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Outstanding loans - | ||||
| From 1 to 3 months | 30,957,809 | 34,192,006 | ||
| From 3 months to 1 year | 36,107,936 | 35,338,442 | ||
| From 1 to 3 years | 29,251,425 | 29,576,654 | ||
| From 3 to 5 years | 10,906,617 | 11,572,896 | ||
| From 5 to 15 years | 27,995,370 | 27,144,332 | ||
| More than 15 years | 2,130,930 | 3,420,160 | ||
| 137,350,087 | 141,244,490 | |||
| Internal overdue loans - | ||||
| Overdue up to 90 days | 1,459,603 | 1,264,436 | ||
| Over 90 days | 4,673,564 | 4,681,343 | ||
| 6,133,167 | 5,945,779 | |||
| Total | 143,483,254 | 147,190,269 |
See credit risk analysis in Note 30.1
| 8 | INSURANCE AND REINSURANCE CONTRACTS ASSETS AND LIABILITIES |
| a) | The details of the assets per reinsurance contract are: |
| As of December 31, 2023 | ||||||||||||||||||||
| Remaining coverage assets | Assets for incurred claims for contracts not measured by PAA | Assets for incurred claims for contracts measured by PAA | Accounts receivable from reinsurers and co-insurers | Accounts payable to reinsurers and co-insurers | Excess of loss contracts | Total | ||||||||||||||
| Present value of future cash flows | ||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Balances as of January 1 | 308,270 | - | 730,006 | 110,964 | (419,217 | ) | 13,985 | 744,008 | ||||||||||||
| Expenses incurred directly attributable | - | - | 660,468 | - | - | - | 660,468 | |||||||||||||
| Past Service Changes - LIC Adjustments | - | 21 | (219,236) | - | - | - | (219,215) | |||||||||||||
| Future Service Changes - Changes in the FCF that do not adjust the CSM for the underlying group of contracts | 7,238 | - | - | - | - | - | 7,238 | |||||||||||||
| Reinsurance recoveries | 7,238 | 21 | 441,232 | - | - | - | 448,491 | |||||||||||||
| Expenses for assigning the premiums paid to the reinsurer | (837,543) | - | (2,269) | - | - | - | (839,812) | |||||||||||||
| Result of the reinsurance service | (830,305) | 21 | 438,963 | - | - | - | (391,321) | |||||||||||||
| Net financial expenses for reinsurance contracts | - | - | 43,419 | - | - | - | 43,419 | |||||||||||||
| Other changes | (7,611) | - | (12,114) | 59,346 | (52,716) | 3,521 | (9,574) | |||||||||||||
| Cash flow: | ||||||||||||||||||||
| Premiums paid net of commissions ceded and other directly attributable expenses paid | 885,524 | - | 2,270 | - | - | - | 887,794 | |||||||||||||
| Reinsurance recoveries | (34,505) | (21) | (367,754) | - | - | - | (402,280) | |||||||||||||
| Net cash flow | 851,019 | (21) | (365,484) | - | - | - | 485,514 | |||||||||||||
| Balances at the end of the period | 321,373 | - | 834,790 | 170,310 | (471,933 | ) | 17,506 | 872,046 | ||||||||||||
| As of December 31, 2022 | |||||||||||||||||||||
| Remaining coverage assets | Assets for incurred claims for contracts not measured by PAA | Assets for incurred claims for contracts measured by PAA | Accounts receivable from reinsurers and co-insurers | Accounts payable to reinsurers and co-insurers | Excess of loss contracts | Total | |||||||||||||||
| Present value of future cash flows | |||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||
| Balances as of January 1 | 322,427 | - | 746,346 | 194,365 | (463,886) | 13,214 | 812,466 | ||||||||||||||
| Expenses incurred directly attributable | - | - | - | - | - | - | - | ||||||||||||||
| Past Service Changes - LIC Adjustments | - | - | 316,077 | - | - | - | 316,077 | ||||||||||||||
| Future Service Changes - Changes in the FCF that do not adjust the CSM for the underlying group of contracts | 1,033 | - | - | - | - | - | 1,033 | ||||||||||||||
| Reinsurance recoveries | 1,033 | - | 316,077 | - | - | - | 317,110 | ||||||||||||||
| Expenses for assigning the premiums paid to the reinsurer | (775,719) | - | (2,290) | - | - | - | (778,009) | ||||||||||||||
| Result of the reinsurance service | (774,686) | - | 313,787 | - | - | - | (460,899) | ||||||||||||||
| Net financial expenses for reinsurance contracts | - | - | (18,608) | - | - | - | (18,608) | ||||||||||||||
| Other changes | (13,389) | - | (17,298) | 3,303 | (789) | - | (28,173) | ||||||||||||||
| Cash Flow: | |||||||||||||||||||||
| Premiums paid net of commissions ceded and other directly attributable expenses paid | 773,918 | - | (294,221) | (86,704) | 45,458 | 771 | 439,222 | ||||||||||||||
| Reinsurance recoveries | - | - | - | - | - | - | - | ||||||||||||||
| Net cash flow | 773,918 | - | (294,221) | (86,704) | 45,458 | 771 | 439,222 | ||||||||||||||
| Balances at the end of the period | 308,270 | - | 730,006 | 110,964 | (419,217) | 13,985 | 744,008 | ||||||||||||||
| b) | The details of the liability for insurance contracts are: |
| As of December 31, 2023 | ||||||||||||||||||||||||
| Remaining coverage liabilities | Liabilities for incurred claims for | Liabilities for incurred claims for contracts measured by PAA |
Accounts receivable |
Debts to intermediaries, marketers and auxiliaries
|
Total | |||||||||||||||||||
| Excluding loss component | Loss component | contracts not measured by PAA | Present value of future cash flows | Risk adjustment |
for insurance contracts
|
|||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||
| Balances as of January 1 | 8,396,418 | 163,555 | 1,073,412 | 2,274,827 | 14,158 | (869,455 | ) | 101,093 | 11,154,008 | |||||||||||||||
| Insurance income | (3,855,739) | 331 | - | - | - | - | - | (3,855,408) | ||||||||||||||||
| Claims incurred and other insurance service expenses | 11,544 | - | 772,038 | 2,104,635 | - | - | - | 2,888,217 | ||||||||||||||||
| Adjustments relating to the past to liabilities for incurred claims | (592) | - | (588,726) | (71,098) | 4,871 | - | - | (655,545) | ||||||||||||||||
| Losses and recoveries for losses in onerous contracts | (8,812) | 25,993 | - | - | - | - | - | 17,181 | ||||||||||||||||
| Amortization of insurance acquisition cash flows | 3,134 | - | - | - | - | - | - | 3,134 | ||||||||||||||||
| Insurance service expenses | 5,274 | 25,993 | 183,312 | 2,033,537 | 4,871 | - | - | 2,252,987 | ||||||||||||||||
| Result of the insurance service | (3,850,465) | 26,324 | 183,312 | 2,033,537 | 4,871 | - | - | (1,602,421) | ||||||||||||||||
| Net financial expenses for insurance contracts | 1,051,939 | (4,492) | 140,934 | 146,732 | 1,759 | - | - | 1,336,872 | ||||||||||||||||
| Total changes in the income statement | (2,798,526) | 21,832 | 324,246 | 2,180,269 | 6,630 | - | - | (265,549) | ||||||||||||||||
| Investment components | (901,136) | (10) | 901,131 | - | - | - | - | (15) | ||||||||||||||||
| Other changes | (163,289) | 22,700 | (1,609) | 33,651 | (317) | (70,408) | (8,028) | (187,300) | ||||||||||||||||
| Cash Flow: | ||||||||||||||||||||||||
| Premiums received. | 4,773,477 | (382) | - | - | - | - | - | 4,773,095 | ||||||||||||||||
| Claims and other service expenses paid. | - | - | (1,084,324) | (1,991,308) | - | - | - | (3,075,632) | ||||||||||||||||
| Insurance acquisition cash flows. | (80,474) | - | - | - | - | - | - | (80,474) | ||||||||||||||||
| Net Cash Flow | 4,693,003 | (382) | (1,084,324) | (1,991,308) | - | - | - | 1,616,989 | ||||||||||||||||
| Balances at the end of the period | 9,226,470 | 207,695 | 1,212,856 | 2,497,439 | 20,471 | (939,863) | 93,065 | 12,318,133 | ||||||||||||||||
| As of December 31, 2022 | ||||||||||||||||||||||||
| Remaining coverage liabilities | Liabilities for incurred claims for | Liabilities for incurred claims for contracts measured by PAA |
Accounts receivable |
Debts to intermediaries, marketers and auxiliaries
|
Total | |||||||||||||||||||
| Excluding loss component | Loss component | contracts not measured by PAA | Present value of future cash flows | Risk adjustment |
for insurance contracts
|
|||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||
| Balances as of January 1 | 9,246,468 | 135,365 | 994,581 | 2,357,336 | 14,383 | (916,859 | ) | 89,700 | 11,920,974 | |||||||||||||||
| Insurance income | (3,533,270) | - | - | - | - | - | - | (3,533,270) | ||||||||||||||||
| Claims incurred and other insurance service expenses | 1,953 | - | 554,692 | 6,266 | - | - | - | 562,911 | ||||||||||||||||
| Adjustments relating to the past to liabilities for incurred claims | (13,440) | - | (262,588) | 1,836,194 | (425) | - | - | 1,559,741 | ||||||||||||||||
| Losses and recoveries for losses in onerous contracts | - | 92,530 | - | - | - | - | - | 92,530 | ||||||||||||||||
| Amortization of insurance acquisition cash flows | 15,741 | - | - | - | - | - | - | 15,741 | ||||||||||||||||
| Insurance service expenses | 4,254 | 92,530 | 292,104 | 1,842,460 | (425) | - | - | 2,230,923 | ||||||||||||||||
| Result of the insurance service | (3,529,016) | 92,530 | 292,104 | 1,842,460 | (425) | - | - | (1,302,347) | ||||||||||||||||
| Net financial expenses for insurance contracts | (793,873) | (9,058) | (29,644) | (40,648) | 338 | - | - | (872,885) | ||||||||||||||||
| Total changes in the income statement | (4,322,889) | 83,472 | 262,460 | 1,801,812 | (87) | - | - | (2,175,232) | ||||||||||||||||
| Investment components | (658,211) | - | 658,211 | - | - | - | - | - | ||||||||||||||||
| Other changes | 357,096 | (55,282) | (3,221) | 16,583 | (138) | 178 | (61) | 315,155 | ||||||||||||||||
| Cash Flow: | ||||||||||||||||||||||||
| Premiums received. | 3,849,115 | - | - | - | - | 47,226 | 11,454 | 3,907,795 | ||||||||||||||||
| Claims and other service expenses paid. | - | - | (838,619) | (1,900,904) | - | - | - | (2,739,523) | ||||||||||||||||
| Insurance acquisition cash flows. | (75,161) | - | - | - | - | - | - | (75,161) | ||||||||||||||||
| Net Cash Flow | 3,773,954 | - | (838,619) | (1,900,904) | - | 47,226 | 11,454 | 1,093,111 | ||||||||||||||||
| Balances at the end of the period | 8,396,418 | 163,555 | 1,073,412 | 2,274,827 | 14,158 | (869,455) | 101,093 | 11,154,008 | ||||||||||||||||
| c) | The components of the movement are presented below: |
| As of December 31, 2023 | ||||||||||||||||
| CSM | ||||||||||||||||
| Present value of future cash flows |
Risk adjustment |
Fair value contracts |
Total | |||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||
| Balances as of January 1 | 7,186,948 | 254,151 | 1,154,236 | 8,595,335 | ||||||||||||
| Changes in the statement of income: | ||||||||||||||||
| Changes in estimates that adjust the CSM | 50,644 | (97,658) | 39,919 | (7,095) | ||||||||||||
| Changes in estimates that result in losses and recoveries for contract losses onerous | 4,483 | (10,842) | (5,615) | (11,974) | ||||||||||||
| Initial recognition contracts | (94,546) | 8,226 | 106,833 | 20,513 | ||||||||||||
| Changes Related to Future Services | (39,419) | (100,274) | 141,137 | 1,444 | ||||||||||||
| CSM recognized for services provided | - | - | (128,639) | (128,639) | ||||||||||||
| Changes in the risk adjustment recognized for the expired risk | - | (22,759) | - | (22,759) | ||||||||||||
| Experience Adjustments | 871,245 | 5 | 174 | 871,424 | ||||||||||||
| Changes Related to Current Services | 871,245 | (22,754) | (128,465) | 720,026 | ||||||||||||
| Adjustments to liabilities for incurred claims | (764,140) | 9,443 | - | (754,697) | ||||||||||||
| Changes related to past services | (764,140) | 9,443 | - | (754,697) | ||||||||||||
| Result of the insurance service | 67,686 | (113,585) | 12,672 | (33,227) | ||||||||||||
| Net financial expenses for insurance contracts | 1,140,937 | 7,125 | 40,142 | 1,188,204 | ||||||||||||
| Total changes in the income statement | 1,208,623 | (106,460) | 52,814 | 1,154,977 | ||||||||||||
| Other changes | (100,717) | (3,484) | (21,294) | (125,495) | ||||||||||||
| Cash flow: | ||||||||||||||||
| Premiums collected | 1,091,817 | - | - | 1,091,817 | ||||||||||||
| Benefits and expenses paid | (1,085,630) | - | - | (1,085,630) | ||||||||||||
| Acquisition fees paid | (80,474) | - | 16,484 | (63,990) | ||||||||||||
| Net cash flow | (74,287) | - | 16,484 | (57,803) | ||||||||||||
| Balances at the end of the period | 8,220,567 | 144,207 | 1,202,240 | 9,567,014 | ||||||||||||
| As of December 31, 2022 | ||||||||||||||||
| CSM | ||||||||||||||||
| Present value of future cash flows |
Risk adjustment |
Fair value contracts |
Total | |||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||
| Balances as of January 1 | 7,789,688 | 284,348 | 1,292,358 | 9,366,394 | ||||||||||||
| Changes in the statement of income: | ||||||||||||||||
| Changes in estimates that adjust the CSM | 167,426 | 10,241 | (147,298) | 30,369 | ||||||||||||
| Changes in estimates that result in losses and recoveries for contract losses onerous | 65,410 | 279 | - | 65,689 | ||||||||||||
| Initial recognition contracts | (116,222) | 10,178 | 120,623 | 14,579 | ||||||||||||
| Changes Related to Future Services | 116,614 | 20,698 | (26,675) | 110,637 | ||||||||||||
| CSM recognized for services provided | - | - | (114,272) | (114,272) | ||||||||||||
| Changes in the risk adjustment recognized for the expired risk | - | (15,379) | - | (15,379) | ||||||||||||
| Experience Adjustments | 667,764 | - | - | 667,764 | ||||||||||||
| Changes Related to Current Services | 667,764 | (15,379) | (114,272) | 538,113 | ||||||||||||
| Adjustments to liabilities for incurred claims | (442,907) | 1,316 | - | (441,591) | ||||||||||||
| Changes related to past services | (442,907) | 1,316 | - | (441,591) | ||||||||||||
| Result of the insurance service | 341,471 | 6,635 | (140,947) | 207,159 | ||||||||||||
| Net financial expenses for reinsurance contracts | (879,839) | (26,978) | 42,268 | (864,549) | ||||||||||||
| Total changes in the income statement | (538,368) | (20,343) | (98,679) | (657,390) | ||||||||||||
| Other changes | (162,140) | (9,854) | (39,443) | (211,437) | ||||||||||||
| Cash Flow: | ||||||||||||||||
| Premiums collected | 1,011,547 | - | - | 1,011,547 | ||||||||||||
| Benefits and expenses paid | (838,619) | - | - | (838,619) | ||||||||||||
| Acquisition fees paid | (75,160) | - | - | (75,160) | ||||||||||||
| Net cash flow | 97,768 | - | - | 97,768 | ||||||||||||
| Balances at the end of the period | 7,186,948 | 254,151 | 1,154,236 | 8,595,335 | ||||||||||||
| 9 | PROPERTY, FURNITURE AND EQUIPMENT, NET |
| a) | The movement of property, furniture and equipment and accumulated depreciation, for the years ended December 31, 2023, 2022, and 2021 is as follows: |
| Land |
Buildings and other constructions |
Installations | Furniture and fixtures | Computer hardware | Vehicles and equipment | Work in progress | 2023 | 2022 | 2021 | |||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Cost - | ||||||||||||||||||||
| Balance as of January 1 | 375,485 | 1,146,905 | 731,678 | 467,134 | 571,046 | 112,161 | 58,787 | 3,463,196 | 3,500,890 | 3,515,202 | ||||||||||
| Additions | - | 3,008 | 16,056 | 41,287 | 93,782 | 360 | 167,878 | 322,371 | 192,700 | 107,790 | ||||||||||
| Acquisition of business | - | - | - | 364 | 91 | - | - | 455 | 419 | - | ||||||||||
| Transfers | - | - | 45,603 | 10,434 | 1,192 | 285 | (57,514) | - | - | - | ||||||||||
| Disposals and others | (48,372) | (9,269) | (13,856) | (33,432) | (51,900) | (5,011) | (51,896) | (213,736) | (230,813) | (122,102) | ||||||||||
| Balance as of December 31 | 327,113 | 1,140,644 | 779,481 | 485,787 | 614,211 | 107,795 | 117,255 | 3,572,286 | 3,463,196 | 3,500,890 | ||||||||||
| Accumulated depreciation - | ||||||||||||||||||||
| Balance as of January 1 | - | 725,590 | 550,001 | 324,080 | 492,609 | 89,818 | - | 2,182,098 | 2,192,111 | 2,140,327 | ||||||||||
| Depreciation of the period | - | 22,575 | 34,658 | 30,904 | 35,643 | 5,328 | - | 129,108 | 128,443 | 140,173 | ||||||||||
| Acquisition of business | - | - | - | - | - | - | - | - | 102 | - | ||||||||||
| Disposals and others | - | (3,479) | (13,603) | (27,138) | (47,278) | (4,947) | - | (96,445) | (138,558) | (88,389) | ||||||||||
| Balance as of December 31 | - | 744,686 | 571,056 | 327,846 | 480,974 | 90,199 | - | 2,214,761 | 2,182,098 | 2,192,111 | ||||||||||
| Net carrying amount | 327,113 | 395,958 | 208,425 | 157,941 | 133,237 | 17,596 | 117,255 | 1,357,525 | 1,281,098 | 1,308,779 |
Banks, financial institutions and insurance entities operating in Peru cannot pledge their fixed assets.
During the years 2023 and 2022, the Group, as part of the investment in fixed assets, has made disbursements related mainly to the purchase of computer equipment, furniture and fixtures and the remodeling of its various agencies. During 2021, as part of the investment in fixed assets that it makes annually, it has made disbursements related mainly to the remodeling of its headquarters located in La Molina, San Pedro office, Lima office.
During the year 2023, Management decided to sell various land and buildings, the approximate sale price of which was S/53.1 million, with a net cost of S/51.4 million (as of December 31, 2022, an approximate sale price of S/51.4 million). (S/46.1 million, with a net cost of S/33.8 million).
Credicorp Ltd. subsidiaries maintain insurance on their main assets in accordance with the policies established by Management.
Due to the implementation of IFRS 17, the expense for depreciation and amortization of fixed assets is distributed in the consolidated income statement in the depreciation and amortization item S/125.0 million and S/4.1 million corresponding to the attributable expense in the item insurance technical result.
Management periodically reviews the residual value, useful life and the depreciation method used of the Group’s property, furniture and equipment; in order to ensure that these are consistent with your current economic benefit and life expectations. In the opinion of Management, as of December 31, 2023, 2022 and 2021, there is no evidence of impairment of the Group’s properties, furniture and equipment.
| 10 | INTANGIBLE ASSETS AND GOODWILL, NET |
| a) | Intangible assets – |
The movement of intangible assets with limited useful life for the years ended December 31, 2023, 2022 and 2021 is as follows:
| Description | Client relationships (i) | Brand name (ii) | Fund manager contract (iii) | Relationships with holders | Software and developments | Intangible in progress | Other | 2023 | 2022 | 2021 | ||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Cost - | ||||||||||||||||||||
| Balances at January 1 | 373,602 | 171,864 | 73,412 | 21,100 | 3,642,091 | 867,213 | 17,953 | 5,167,235 | 4,708,305 | 4,293,864 | ||||||||||
| Additions | - | - | - | - | 244,879 | 577,462 | 6,462 | 828,803 | 703,670 | 532,244 | ||||||||||
| Acquisition of business | 2,507 | 3,457 | - | - | 10,678 | - | - | 16,642 | 7,533 | - | ||||||||||
| Transfers | - | - | - | - | 436,050 | (436,050) | - | - | - | - | ||||||||||
| Disposals and others | (204) | - | 4,303 | - | (54,676) | (107,063) | 6,339 | (151,301) | (252,273) | (117,803) | ||||||||||
| Balance as of December 31 | 375,905 | 175,321 | 77,715 | 21,100 | 4,279,022 | 901,562 | 30,754 | 5,861,379 | 5,167,235 | 4,708,305 | ||||||||||
| Accumulated amortization - | ||||||||||||||||||||
| Balance at January 1 | 302,513 | 60,488 | 12,824 | 21,100 | 2,637,685 | - | 5,409 | 3,040,019 | 2,795,084 | 2,475,466 | ||||||||||
| Amortization of the period | 15,025 | 5,827 | 3,573 | - | 407,583 | - | 4,576 | 436,584 | 403,726 | 381,794 | ||||||||||
| Disposals and others | (307) | - | (24) | - | (42,326) | - | 416 | (42,241) | (158,791) | (62,176) | ||||||||||
| Balance as of December 31 | 317,231 | 66,315 | 16,373 | 21,100 | 3,002,942 | - | 10,401 | 3,434,362 | 3,040,019 | 2,795,084 | ||||||||||
| Net carrying amount | 58,674 | 109,006 | 61,342 | - | 1,276,080 | 901,562 | 20,353 | 2,427,017 | 2,127,216 | 1,913,221 |
During 2023, activated disbursements were mainly related to the implementation and development of various IT projects such as Yape, Collection Suite, Telecredit - Office Banking, Data Lake - Data Vault, Integrated Management of Payment Solutions, Operational CRM, IO App, Among others.
During 2022, the Group has made disbursements mainly related to the implementation and development of various IT projects such as Cubo – Mis Financiero, Yape, DataLake – Data Vault, IFRS 9 Strategic Tool, Office Banking, Vision Plus, among others.
During 2021, the Group has made disbursements mainly related to the implementation and development of various IT projects such as Data Lake - Data Vault, Mobile Banking I14, Telephone Banking by voice call I15 and improvements in Yape, among others.
Due to the implementation of IFRS 17, the expense for depreciation and amortization of intangibles is distributed in the consolidated income statement in the depreciation and amortization item by S/386.1 million and S/50.5 million corresponding to the attributable expense in the item insurance technical result.
In the opinion of Management, the net book value of intangibles does not exceed their recoverable value as of December 31, 2023, 2022 and 2021.
| (i) | Client relationships - |
This item consists of the following:
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Prima AFP - AFP Unión Vida | 37,701 | 45,262 | ||
| Credicorp Capital Holding Chile - Inversiones IMT | 13,410 | 15,564 | ||
| Joinnus S.A.C. | 2,507 | - | ||
| Ultraserfinco S.A. | 2,000 | 6,971 | ||
| Compañía Incubadora de Soluciones Móviles S.A-Culqi | 1,792 | 1,809 | ||
| Tenpo SpA | 1,264 | 1,483 | ||
| Net carrying amount | 58,674 | 71,089 |
| (ii) | Brand name – |
This item consists of the following:
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| MiBanco | 105,244 | 111,009 | ||
| Joinnus S.A.C. | 3,457 | - | ||
| Compañía Incubadora de Soluciones Móviles S.A-Culqi | 305 | 367 | ||
| Net carrying amount | 109,006 | 111,376 |
| (iii) | Fund management contract - |
This item consists of the following:
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Credicorp Capital Holding Chile - Inversiones IMT | 29,553 | 30,495 | ||
| Credicorp Capital Colombia | 29,229 | 27,620 | ||
| Ultrasefinco S.A. | 2,560 | 2,473 | ||
| Net carrying amount | 61,342 | 60,588 |
Management has assessed at each reporting date that there was no indication that customer relationships, brand name, fund management contract and software and developments may be impaired.
| b) | Goodwill - |
Goodwill acquired through business combinations has been allocated to each subsidiary or groups of them, which are also identified as a CGU for the purposes of impairment testing, as follows:
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| MiBanco - Edyficar Perú | 273,694 | 273,694 | ||
| Prima AFP - AFP Unión Vida | 124,641 | 124,641 | ||
| Credicorp Capital Colombia S.A | 111,799 | 92,188 | ||
| Banco de Crédito del Perú | 52,359 | 52,359 | ||
| MiBanco Colombia | 49,629 | 99,979 | ||
| Pacífico Seguros | 36,354 | 36,354 | ||
| Joinnus S.A.C | 35,700 | − | ||
| Atlantic Security Holding Corporation | 29,795 | 29,795 | ||
| Tenpo SpA | 22,697 | 23,441 | ||
| Monokera S.A.S | 22,656 | − | ||
| Wally POS S.A.C | 21,046 | 24,214 | ||
| Tenpo Technologie SpA | 11,719 | 13,155 | ||
| Sami Shop S.A.C | 4,000 | − | ||
| Compañía Incubadora de Soluciones Móviles S.A-Culqi | 2,297 | 2,297 | ||
| Crediseguro Seguros Personales | 96 | 96 | ||
| Net carrying amount | 798,482 | 772,213 |
The recoverable amount of all of the CGUs has been determined based in the present value of the discounted cash flows or dividends determined principally with assumptions of revenue and expenses projection (based on efficiency ratios).
Goodwill balance of Credicorp Capital Colombia S.A, Mibanco Colombia, Tenpo SPA and Tenpo Technologie SpA. are affected by the volatility effect of the local exchange rate currency of the country in which they operate against the exchange rate of functional currency of Credicorp Ltd. and subsidiaries.
As of December 31, 2023, the Group recorded an impairment of MiBanco Colombia (formerly Bancompartir S.A) for $75,199 million Colombian peso equivalent S/64.1 million and S/7.8 million of minority interest. To determine this impairment, a fair value of $438,259 million Colombian peso, equivalent to US$113.2 million, and a book value of $513,458 million Colombian peso, equivalent to US$132.5 million, were estimated. For the estimation, a discount rate of 15.1 percent and a perpetual growth rate of 6.8 percent were used as assumptions. During 2022, no impairment losses were recorded.
The following table summarizes the key assumptions used for the calculation of fair value less selling costs in 2023 and 2022:
| 2023 | ||||
| Description | Terminal value growth rate | Discount rate | ||
| % | % | |||
| Mibanco - Edyficar Perú | 5.60 | 13.10 | ||
| Prima AFP - AFP Unión Vida | 1.60 | 15.50 | ||
| Mibanco Colombia | 6.80 | 15.10 | ||
| Credicorp Capital Colombia S.A | 4.60 | 14.90 | ||
| Banco de Crédito del Perú | 4.60 | 12.40 | ||
| Pacífico Seguros (*) | 4.60 | 11.8 y 13.9 | ||
| Atlantic Security Holding Corporation | 2.30 | 12.60 | ||
| Tenpo SpA | − | 25.00 | ||
| Compañía Incubadora de Soluciones Móviles S.A-Culqi | − | 25.00 | ||
| Wally POS S.A.C. | − | 25.00 | ||
| Sami Shop S.A.C. | − | 25.00 | ||
| 2022 | ||||
| Description | Terminal value growth rate | Discount rate | ||
| % | % | |||
| Mibanco - Edyficar Perú | 5.60 | 14.30 | ||
| Prima AFP - AFP Unión Vida | 1.60 | 16.10 | ||
| MiBanco - Colombia | 6.00 | 16.80 | ||
| Credicorp Capital Colombia S.A. | 4.80 | 17.90 | ||
| Banco de Crédito del Perú | 4.60 | 12.80 | ||
| Pacífico Seguros (*) | 4.60 | 13.0 y 14.3 | ||
| Atlantic Security Holding Corporation | 2.30 | 15.20 | ||
| Tenpo SpA | − | 25.00 | ||
| Compañía Incubadora de Soluciones Móviles S.A-Culqi | − | 25.00 | ||
| (*) | As of December 31, 2023, and 2022, it corresponds to the discount rates used to determine the recoverable value of the cash flows that correspond to the general and life insurance business lines. |
Cash flows of 5 to 10 years were included, depending on the maturity of the business in the discounted cash flow model. Estimated growth rates are based on historical performance and Management’s expectations regarding market development. A long-term growth rate in perpetuity has been determined considering account forecasts included in industry reports.
Discount rates represent the assessment of the specific risks of the CGU. The discount rate originates from the financial asset pricing model (MVAF). The cost of capital is derived from the benefits that the Group’s investors expect to obtain, the specific risk incorporated by applying comparable individual beta factors adjusted to the debt structure of each CGU and the specific country and market risk premiums for each CGU. Beta factors are evaluated annually based on available market information.
As a result of the evaluation carried out on the goodwill, a deterioration in the goodwill of Mibanco Colombia was recognized, which is explained by a combination of lower projected flows and higher contributions in 2023 and 2024, partially offset by a lower discount rate. The macroeconomic context has had a relevant impact on business results. The higher rates have put downward pressure on the intermediation margin due to a higher cost of funding and the difficulty of transferring this increase to active rates. Additionally, the portfolio has deteriorated in a context of low economic growth and high inflation rates; mainly due to the greater transfer of credits to Stage 2 and Stage 3. It is expected that these impacts on margin and provisions will be controlled in the medium term.
The key assumptions described above may change if market and economic conditions change. As of December 31, 2023, and 2022, the Group estimates that the reasonableness of these possible changes in these assumptions would not cause the recoverable amount of all CGUs to decrease below their book value.
| 11 | RIGHT-OF-USE ASSETS, NET AND LEASE OBLIGATIONS |
| a) | Right-of-use |
The Group has leased agreements according to the following composition:
|
Property: Agencies and offices |
Servers and technology platforms |
Transport units | Other leases | 2023 | 2022 | 2021 | ||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||
| Cost - | ||||||||||||||
| Balance as of January 1, | 807,422 | 151,363 | 3,305 | 64,801 | 1,026,891 | 969,355 | 990,148 | |||||||
| Additions | 101,585 | 3,239 | 3,308 | 14,709 | 122,841 | 113,948 | 110,005 | |||||||
| Disposal and others | (61,753) | (2,231) | (505) | − | (64,489) | (56,412) | (130,798) | |||||||
| Balance as of December 31 | 847,254 | 152,371 | 6,108 | 79,510 | 1,085,243 | 1,026,891 | 969,355 | |||||||
| Accumulated depreciation - | ||||||||||||||
| Balance as of January 1, | 386,108 | 71,512 | 2,052 | 23,386 | 483,058 | 382,938 | 287,220 | |||||||
| Depreciation of the period | 105,163 | 27,831 | 682 | 14,157 | 147,833 | 151,335 | 161,287 | |||||||
| Disposal and others | (42,614) | (2,247) | (502) | − | (45,363) | (51,215) | (65,569) | |||||||
| Balance as of December 31 | 448,657 | 97,096 | 2,232 | 37,543 | 585,528 | 483,058 | 382,938 | |||||||
| Net carrying amount | 398,597 | 55,275 | 3,876 | 41,967 | 499,715 | 543,833 | 586,417 |
| b) | Lease Liabilities |
The Group maintains contracts, with certain renewal options and for which the Group has reasonable certainty that this option will be exercised. In those cases, the period of lease used to measure the liability and assets corresponds to an estimation of future renovations.
| 12 | OTHER ASSETS AND OTHER LIABILITIES |
| a) | This item consists of the following: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Other assets - | ||||
| Financial instruments: | ||||
| Receivables (b) | 1,523,052 | 1,449,079 | ||
| Derivatives receivable (c) | 987,663 | 1,478,726 | ||
| Receivables from sale of investments (d) | 411,599 | 142,765 | ||
| Operations in process (e) | 137,952 | 155,568 | ||
| 3,060,266 | 3,226,138 | |||
| Non-financial instruments: | ||||
| Deferred fees (f) | 1,197,457 | 908,399 | ||
| Investment in associates (g) | 748,663 | 726,993 | ||
| Investment properties, net (h) | 565,274 | 548,558 | ||
| Income tax prepayments, net | 348,578 | 186,372 | ||
| Adjudicated assets, net | 107,562 | 136,079 | ||
| Improvements in leased premises | 100,919 | 71,747 | ||
| VAT (IGV) tax credit | 86,661 | 58,329 | ||
| Others | 9,237 | 9,056 | ||
| 3,164,351 | 2,645,533 | |||
| Total | 6,224,617 | 5,871,671 |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Other liabilities - | ||||
| Financial instruments: | ||||
| Accounts payable (i) | 2,367,204 | 2,058,229 | ||
| Salaries and other personnel expenses | 1,082,059 | 930,622 | ||
| Derivatives payable (c) | 891,999 | 1,345,665 | ||
|
Accounts payable for acquisitions of investments (d) |
448,046 | 153,681 | ||
| Allowance for indirect loan losses, Note 7(c) | 368,029 | 658,584 | ||
| Operations in process (e) | 258,197 | 89,480 | ||
| Dividends payable | 62,976 | 73,607 | ||
| 5,478,510 | 5,309,868 | |||
| Non-financial instruments: | ||||
| Taxes | 727,052 | 1,062,691 | ||
| Provision for sundry risks (j) | 661,737 | 624,149 | ||
| Others | 126,392 | 192,344 | ||
| 1,515,181 | 1,879,184 | |||
| Total | 6,993,691 | 7,189,052 |
| b) | As of December 31, 2023, the balance is mainly composed of accounts receivable from Niubiz, margin call of operations with derivates, for sale of goods and services, accounts receivable for the sale of foreign currency, operations to be settled, funds restricted by Central Bank of Reserve of Bolivia, works for taxes, accounts paid by third parties, commissions receivable, payment protection insurance premium receivable, accounts receivable from clients for stock market operations, advances to personnel, dividends receivable, rents, among others. As of December 31, 2022, the balance mainly comprises funds restricted by the Central Reserve Bank of Bolivia, margin call of operations with derivatives, taxes receivable, accounts receivable from the sale of deferred foreign currency, protection insurance premium of payments receivable, works for taxes, accounts paid by third parties, accounts receivable for the sale of goods and services, commissions receivable, receivable from clients for stock market operations, advances to personnel, operations to settle rents receivable, dividends for charge, among others. |
| c) | The risk in derivative contracts arises from the possibility of the counterparty failing to comply with the terms and conditions agreed and that the reference rates at which the transactions took place change. |
The table below shows as of December 31, 2023, and 2022 the fair value of derivative financial instruments, recorded as an asset or a liability, together with their notional amounts and maturities. The nominal amount, recorded gross, is the amount of a derivative’s underlying asset and is the basis upon which the fair value of derivatives is measured.
| 2023 | 2022 | 2023 and 2022 | ||||||||||||||||||
| Assets | Liabilities | Notional amount | Maturity | Assets | Liabilities | Notional amount | Maturity | Related instruments | ||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||
| Derivatives held for trading (i) - | ||||||||||||||||||||
| Foreign currency forwards | 334,505 | 205,341 | 32,206,841 | January 2024 / March 2026 | 500,348 | 288,857 | 34,224,865 | January 2023 / August2024 | - | |||||||||||
| Interest rate swaps | 341,898 | 204,775 | 17,471,629 | January 2024 / September 2033 | 415,034 | 277,988 | 10,834,324 | January 2023 / December 2032 | - | |||||||||||
| Currency swaps | 230,818 | 429,365 | 12,895,649 | January 2024 / August 2033 | 410,439 | 749,420 | 16,000,208 | January 2023 / January 2033 | - | |||||||||||
| Foreign exchange options | 1,104 | 4,002 | 501,189 | January 2024 / March 2025 | 1,349 | 3,168 | 362,324 | January 2023 / June 2024 | - | |||||||||||
| Futures | 1,187 | 1,618 | 40,428 | March 2024 | 794 | 1,450 | 48,819 | March 2023 | - | |||||||||||
| 909,512 | 845,101 | 63,115,736 | 1,327,964 | 1,320,883 | 61,470,540 | |||||||||||||||
| Derivatives held as hedges | ||||||||||||||||||||
| Cash flow hedges (ii) - | ||||||||||||||||||||
| Cross currency swaps (CCS) | 15(a)(i) | 13,843 | 25,524 | 815,980 | January 2025 | 20,114 | 8,418 | 839,080 | January 2025 | Bonds issued | ||||||||||
| Cross currency swaps (CCS) | 5(c)(i) | - | - | - | - | 21,935 | - | 171,630 | August 2026 | Repurchase agreements(*) | ||||||||||
| Cross currency swaps (CCS) | 15(a)(v) | 1,552 | - | 78,969 | November 2025 | - | 13,688 | 145,715 | December 2023 | Bonds issued | ||||||||||
| Cross currency swaps (CCS) | 6(b)(i) | 20,359 | 9,784 | 126,624 | February 2024 / January 2025 | 41,746 | 2,123 | 131,382 | January 2023 / January 2025 | Investments | ||||||||||
| Cross currency swaps (CCS) | 14(b)(ii) | - | 11,253 | 222,540 | May 2025 / June 2025 | - | 156 | 38,140 | June 2025 | Debts to bank | ||||||||||
| Cross currency swaps (CCS) | 5(c)(ii) | - | - | - | - | 14,861 | - | 95,350 | August 2026 | Repurchase agreements(*) | ||||||||||
| Cross interest rate swaps (IRS) | 4(b)(i) | 786 | 337 | 556,350 | April 2026 / May 2026 | - | - | - | Cash and due from banks | |||||||||||
| Foreign currency forwards | 14(b) | 57 | - | 54,392 | June 2024 | - | - | - | Debts to bank | |||||||||||
| Fair value hedges - | ||||||||||||||||||||
| Interest rate swaps (IRS) | 6(b) | 41,554 | - | 778,890 | March 2025 / February 2028 | 52,106 | 397 | 926,497 | January 2023 / February 2028 | Investments | ||||||||||
| 78,151 | 46,898 | 2,633,745 | 150,762 | 24,782 | 2,347,794 | |||||||||||||||
| 987,663 | 891,899 | 65,749,481 | 1,478,726 | 1,345,665 | 63,818,334 | |||||||||||||||
| (*) | Corresponds to investments classified at the fair value through other comprehensive income under IFRS 9 as of December 31, 2023 and 2022. |
| (i) | Held-for-trading derivatives are principally negotiated to satisfy customers’ needs. On the other hand, the Group may also take positions with the expectation of profiting from favorable movements in prices or rates. Also, this caption includes any derivatives which do not comply with IFRS 9 hedge accounting requirements. Fair value of derivatives held for trading classified by contractual maturity is as follows: |
| 2023 | 2022 | |||||||||||||||||||||||
| Up to 3 | From 3 months | From 1 to 3 | From 3 to 5 | Over 5 | Up to 3 | From 3 months | From 1 to 3 | From 3 to 5 | Over 5 | |||||||||||||||
| months | to 1 year | years | years | years | Total | months | to 1 year | years | years | years | Total | |||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||
| Foreign currency forwards | 201,816 | 129,504 | 3,185 | - | - | 334,505 | 276,887 | 226,117 | (2,656) | - | - | 500,348 | ||||||||||||
| Interest rate swaps | 8,870 | 11,790 | 94,681 | 128,141 | 98,416 | 341,898 | 12,395 | 43,395 | 58,726 | 122,943 | 177,575 | 415,034 | ||||||||||||
| Currency swaps | 4,955 | 45,436 | 69,962 | 78,513 | 31,952 | 230,818 | 63,465 | 60,940 | 86,950 | 84,650 | 114,434 | 410,439 | ||||||||||||
| Foreign exchange options | 471 | 592 | 41 | - | - | 1,104 | 153 | 1,163 | 33 | - | - | 1,349 | ||||||||||||
| Futures | 1,187 | - | - | - | - | 1,187 | 794 | - | - | - | - | 794 | ||||||||||||
| Total assets | 217,299 | 187,322 | 167,869 | 206,654 | 130,368 | 909,512 | 353,694 | 331,615 | 143,053 | 207,593 | 292,009 | 1,327,964 | ||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||
| Up to 3 | From 3 months | From 1 to 3 | From 3 to 5 | Over 5 | Up to 3 | From 3 months | From 1 to 3 | From 3 to 5 | Over 5 | |||||||||||||||
| months | to 1 year | years | years | years | Total | months | to 1 year | years | years | years | Total | |||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||
| Foreign currency forwards | 142,293 | 57,319 | 5,729 | - | - | 205,341 | 203,269 | 85,222 | 366 | - | - | 288,857 | ||||||||||||
| Interest rate swaps | 20,615 | 20,739 | 48,110 | 36,596 | 78,715 | 204,775 | 8,073 | 37,418 | 45,352 | 62,460 | 124,685 | 277,988 | ||||||||||||
| Currency swaps | 78,941 | 129,935 | 86,455 | 99,804 | 34,230 | 429,365 | 140,363 | 258,962 | 100,267 | 127,404 | 122,424 | 749,420 | ||||||||||||
| Foreign exchange options | 1,355 | 2,525 | 122 | - | - | 4,002 | 554 | 2,483 | 131 | - | - | 3,168 | ||||||||||||
| Futures | 1,618 | - | - | - | - | 1,618 | 1,450 | - | - | - | - | 1,450 | ||||||||||||
| Total liabilities | 244,822 | 210,518 | 140,416 | 136,400 | 112,945 | 845,101 | 353,709 | 384,085 | 146,116 | 189,864 | 247,109 | 1,320,883 | ||||||||||||
| (ii) | The Group is exposed to variability in future cash flows on assets and liabilities in foreign currency and/or those that bear interest at variable rates. The Group uses derivative financial instruments as cash flow hedges to cover these risks. |
A schedule indicating the periods when the current cash flow hedges are expected to occur and affect the consolidated statement of income, net of deferred income tax is presented below:
| 2023 | 2022 | |||||||||||||||||||
| Up to 1 | From 1 to 3 | From 3 to 5 | Over 5 | Up to 1 | From 1 to 3 | From 3 to 5 | Over 5 | |||||||||||||
| year | years | years | years | Total | year | years | years | years | Total | |||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Cash inflows (assets) | 160,643 | 1,742,147 | - | - | 1,902,790 | 250,835 | 938,513 | 76,280 | - | 1,265,628 | ||||||||||
| Cash outflows (liabilities) | (153,240) | (1,749,748) | - | - | (1,902,988) | (294,548) | (934,119) | (73,232) | - | (1,301,899) | ||||||||||
| Consolidated statement of income | 485 | (17,192) | - | - | (16,707) | 397 | (7,222) | 7,070 | - | 245 | ||||||||||
As of December 31, 2023, the accumulated balance of the unrealized result from cash flow hedges, net of the corresponding deferred income tax, results from current hedges which maintain an unrealized loss of approximately S/16.7 million and revoked hedges that maintain an unrealized gain of S/5.8 million (As of December 31, 2022, current hedges maintained an unrealized gain of approximately S/0.2 million) See in note 16(c).
| d) | As of December 31, 2023 and 2022, corresponds to accounts receivable and payable for the sale and purchase of financial investments negotiated during the last days of the month, which were settled during the first days of the following month. |
| e) | Transactions in process include deposits received, granted and collected loans, funds transferred and other similar types of transactions, which are made in the final days of the month and not reclassified to their final accounts in the interim condensed consolidated statement of financial position until the first days of the following month. The regularization of these transactions does not affect the Group’s net income. |
| f) | As of December 31, 2023, the balance corresponds mainly to the payment in advance in favor of Latam Airlines Group S.A. Perú Branch for US$169.7 million, equivalent to S/629.5 million, (US$128.0 million, equivalent to S/488.4 million as of December 31, 2022) on account of the Latam Pass Miles that the Bank has been crediting to its clients for the use of your credit and debit cards, and other financial products BCP Latam Pass. Customers can use these miles directly with Latam to exchange tickets, goods or services offered by them. |
| g) | Credicorp’s principal associate is Pacífico S.A Entidad Prestadora de Salud (Pacífico EPS), whose balance amounts to S/686.6 million and S/627.9 million as of December 31, 2023 and 2022, respectively. |
| h) | Investment properties - |
The movement of investment properties is as follows:
| 2023 | 2022 | |||||||
| Land | Buildings | Total | Total | |||||
| S/(000) | S/(000) | S/(000) | S/(000) | |||||
| Cost | ||||||||
| Balance at January 1 | 328,131 | 285,188 | 613,319 | 526,935 | ||||
| Additions (i) | − | 25,034 | 25,034 | 87,132 | ||||
| Disposals and others | 14,486 | (13,146) | 1,340 | (748) | ||||
| Ending Period | 342,617 | 297,076 | 639,693 | 613,319 | ||||
| Accumulated depreciation | ||||||||
| Balance at January 1 | − | 63,351 | 63,351 | 56,412 | ||||
| Depreciation for the period | − | 8,115 | 8,115 | 7,107 | ||||
| Disposals and others | − | 1,543 | 1,543 | (168) | ||||
| Ending Period | − | 73,009 | 73,009 | 63,351 | ||||
| Impairment losses (ii) | 689 | 721 | 1,410 | 1,410 | ||||
| Net carrying amount | 341,928 | 223,346 | 565,274 | 548,558 | ||||
Land and buildings are mainly used for office rental, which are free of all encumbrances.
| (i) | As of December 31, 2023, the Group has made disbursements for the acquisition of land and real estate for S/25.0 million. As of December 31, 2022, the Group has made disbursements for property improvements for S/87.1 million. |
| (ii) | The Group’s Management has determined that the recoverable value of its investment properties is greater than their net carrying amount. |
As of December 31, 2023, and 2022, the market value of the properties amounts to approximately S/1,235.2 million and S/1,206.5 million, respectively; which was determined through a valuation made by an independent appraiser.
As of December 31, 2023, and 2022, the balance corresponds mainly to accounts payable to suppliers, accounts payable to client investors in stock exchange, for accounts payable to policyholders, account payable to intermediaries, accounts payable for premiums to the deposit insurance fund, dividend payable to minor shareholders, accounts payable for foreign exchange sale, interbank operations to be settled with the BCRP, among others.
| i) | The movement of the provision for sundry risks for the years ended December 31, 2023, 2022 and 2021 was as follows: |
| 2023 | 2022 | 2021 | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Balance at the beginning of the year | 624,149 | 614,012 | 514,382 | |||
| Provision, note 25 | 95,873 | 43,846 | 70,824 | |||
| Increase (decrease), net | (58,285) | (33,709) | 28,806 | |||
| Balances at the end of the year | 661,737 | 624,149 | 614,012 |
Because of the nature of its business, the Group has various pending lawsuits, which provisions are recorded when, in Management’s and its in-house legal advisors opinion, it is likely that these may result in an additional liability and such amount can be reliably estimated. Regarding lawsuits against the Group which have not been recorded as a provision, in Management’s and its in-house legal advisors opinion, they will not result in an additional liability other than those recorded previously and they will not have a material effect on the Group’s consolidated financial statements.
| 13 | DEPOSITS AND OBLIGATIONS |
| a) | This item consists of the following: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Saving deposits | 52,375,813 | 54,769,045 | ||
| Demand deposits | 48,229,323 | 48,467,248 | ||
| Time deposits (c) | 41,290,011 | 37,478,269 | ||
| Severance indemnity deposits | 3,185,603 | 3,824,629 | ||
| Bank’s negotiable certificates | 1,194,653 | 1,418,740 | ||
| Total | 146,275,403 | 145,957,931 | ||
| Interest payable | 1,429,591 | 1,062,856 | ||
| Total | 147,704,994 | 147,020,787 | ||
The Group has established a policy to remunerate demand deposits and savings accounts according to a growing interest rate scale, based on the average balance maintained in those accounts; on the other hand, according to its policy, balances that are lower than a specified amount for each type of account do not bear interest. Also, time deposits earn interest at market rates.
Interest rates are determined by the Group considering the interest rates prevailing in the market in which each of the Group’s subsidiaries operates.
| b) | The amounts of non-interest-bearing and interest-bearing deposits and obligations are presented below: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Non-interest-bearing - | ||||
| In Peru | 37,627,288 | 39,370,497 | ||
| In other countries | 4,607,210 | 3,975,654 | ||
| 42,234,498 | 43,346,151 | |||
| Interest-bearing - | ||||
| In Peru | 94,452,833 | 92,276,991 | ||
| In other countries | 9,588,072 | 10,334,789 | ||
| 104,040,905 | 102,611,780 | |||
| Total | 146,275,403 | 145,957,931 | ||
| c) | The balance of time deposits classified by maturity is as follows: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Up to 3 months | 23,975,997 | 17,201,364 | ||
| From 3 months to 1 year | 11,420,212 | 12,688,483 | ||
| From 1 to 3 years | 2,472,740 | 4,144,424 | ||
| From 3 to 5 years | 327,136 | 502,291 | ||
| More than 5 years | 3,093,926 | 2,941,707 | ||
| Total | 41,290,011 | 37,478,269 | ||
In Management’s opinion the Group’s deposits and obligations are diversified with no significant concentrations as of December 31, 2023, and 2022.
As of December 31, 2023 and 2022, the balance of deposits and obligations, guaranteed by the Peruvian “Fondo de Seguro de Depositos” (Deposit Insurance Fund) amounts to approximately S/51,875.6 million and S/52,745.2 million, respectively. At said dates, maximum amount of coverage per depositor recognized by “Fondo de Seguro de Depositos” totaled S/123,810.0 and S/125,603.0, respectively.
As of December 31, 2023 and 2022, the balance of deposits and obligations of Banco de Crédito Bolivia guaranteed by the “Fondo de Protección al Ahorrista” (FPAH, for its Spanish acronym) of Bolivia, amounts to Bs 1,409.9 million Bolivianos (equivalent to S/762.3 million) and Bs 1,369.4 million Bolivianos (equivalent to S/762.1 million), respectively. At said dates, maximum amount of coverage per depositor recognized by “FPAH” totaled Bs 90,240.3 Bolivianos and Bs 96,359.0 Bolivianos (equivalent to S/48,790.4 and S/53,627.0, respectively).
As of December 31, 2023 and 2022, the balance of deposits and obligations of MiBanco Colombia guaranteed by the “Fondo de Garantía de las Instituciones Financieras” (FOGAFÍN, for its Spanish acronym) of Colombia, amounts to $53,049.4 million Colombian pesos (equivalent to S/50.8 million) and $61,349.2 million Colombian pesos (equivalent to S/48.2 million), respectively. At said dates, maximum amount of coverage per depositor recognized by “FOGAFÍN” totaled $50,000,000.0 Colombian pesos (equivalent to S/47,850.0 and S/39,300.0, respectively).
| 14 | DUE TO BANKS AND CORRESPONDENTS |
| a) | This item consists of the following: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| International funds and others (b) | 7,362,734 | 4,694,617 | ||
| COFIDE and FONCODES credit line (c) | 4,389,433 | 4,107,294 | ||
| Inter-bank funds | 324,400 | − | ||
| 12,076,567 | 8,801,911 | |||
| Interest payable | 202,114 | 135,500 | ||
| Total | 12,278,681 | 8,937,411 |
| b) | This item consists of the following: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Bank of America N.A. | 1,019,975 | 149 | ||
| Club Deal Loan (i) | 923,965 | 946,605 | ||
| Wells Fargo Bank N.A. | 898,275 | 190,699 | ||
| Bank of New York Mellon | 593,440 | 572,100 | ||
| International Finance Corporation (IFC) (ii) | 567,240 | 382,840 | ||
| Standard Chartered Bank Hong Kong LTD | 483,654 | - | ||
| Sumitomo Mitsui Banking Corporation | 426,535 | - | ||
| Corporación Financiera de Desarrollo (COFIDE) | 409,890 | 503,538 | ||
| Caixabank | 370,900 | 190,700 | ||
| Commerzbank AG | 370,900 | - | ||
| Banco de la Nación | 355,000 | - | ||
| Citibank N.A. | 185,450 | 381,400 | ||
| Zürcher Kantonalbank | 185,450 | 95,350 | ||
| Bradesco Bac Florida Bank | 92,725 | 76,280 | ||
| Banco BBVA Perú | 60,000 | 114,000 | ||
| Bancolombia S.A. | 58,171 | 59,604 | ||
| Banco Bisa S.A. | 51,364 | - | ||
| Banco Nacional de Bolivia S.A. | 50,994 | - | ||
| Banco Internacional del Perú S.A.A. (Interbank) (iii) | 50,933 | 150,000 | ||
| ICBC Perú Bank S.A. | 50,000 | 100,000 | ||
| Banco de Occidente | 47,463 | 84,096 | ||
| Bancoldex | 45,292 | 126,957 | ||
| Standard Chartered Bank | - | 266,923 | ||
| Scotiabank Perú S.A.A. | - | 120,000 | ||
| The Toronto Dominion Bank | - | 247,910 | ||
| Others | 65,118 | 85,466 | ||
| Total | 7,362,734 | 4,694,617 |
As of December 31, 2023, the loans have maturities between January 2024 and April 2035 (between January 2023 and December 2031, as of December 31, 2022) and accrue interest in soles currency at rates that fluctuate between 2.23 percent and 9.33 percent (between 2.23 percent and 9.45 percent, as of December 31, 2022) and accrue interest in foreign currency as follows:
| 2023 | 2022 | |||||||
| Min | Max | Min | Max | |||||
| % | % | % | % | |||||
| Boliviano | 4.90 | 6.90 | 6.00 | 6.00 | ||||
| Colombian peso | 0.45 | 17.64 | 0.40 | 17.04 | ||||
| U.S. Dollar | 5.78 | 7.09 | 1.50 | 6.32 | ||||
| (i) | The balances as of December 31, 2023 and 2022, include a loan under Club Deal Loan for 25 months for US$250.0 million equivalent to S/927.3 million, having five foreign banks as borrowers: Wells Fargo Bank NY – Agent Administrative, Standard Chartered Bank, JP Morgan Chase Bank N.A., HSBC Bank and Bank of America. |
Subsequently, in April 2023, JP Morgan Chase Bank carried out a partial assignment of its collection rights in favor of ICBC Perú Bank S.A. for US$20.0 million or S/74.2 million, making it the sixth borrower of the Deal Club.
The loan accrues interest at a 3-month SOFR variable rate plus a spread of 1.5 percent. Likewise, the expenses linked to said transaction were deferred and are coming accruing proportionally over the life of the loan.
| (ii) | As of December 31, 2023, Mibanco maintain cross currency swaps (CCS) that were designated as cash flow hedges of certain repo operations in U.S. dollars for a nominal amount of US$60.0 million, equivalent to S/222.5 million. |
| (iii) | As of December 31, 2023, Mibanco maintain a foreign currency forward for a nominal amount of US$14.7 million, equivalent to S/54.4 million. |
| c) | Promotional credit lines represent loans granted by Corporación Financiera de Desarrollo and Fondo de Cooperación para el Desarrollo Social (COFIDE and FONCODES for their Spanish acronyms, respectively) to promote the development of Perú, they mature between January 2024 and January 2032 and bear annual interest in soles at rates that fluctuate between 3.50 percent and 7.60 percent and interest in foreign currency 7.75 percent as of December 31, 2023 (between January 2023 and January 2032 and with annual interest in soles between 3.50 percent and 7.60 percent and interest in foreign currency 7.75 percent as of December 31, 2022). These lines of credit are guaranteed with a portfolio of Fondo Mi Vivienda mortgage loans amounting to S/4,389.4 million and S/4,107.3 million, as of December 31, 2023 and 2022, respectively. |
| d) | The following table presents the maturities of due to banks and correspondents as of December 31, 2023 and 2022 based on the period remaining to maturity: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Up to 3 months | 3,513,860 | 1,420,872 | ||
| From 3 months to 1 year | 3,514,114 | 1,562,224 | ||
| From 1 to 3 years | 1,568,163 | 2,660,926 | ||
| From 3 to 5 years | 795,765 | 694,308 | ||
| More than 5 years | 2,684,665 | 2,463,581 | ||
| Total | 12,076,567 | 8,801,911 |
| e) | As of December 31, 2023 and 2022, lines of credit granted by various local and foreign financial institutions, to be used for future operating activities total S/11,752.2 million and S/8,801.9 million, respectively. |
| f) | Certain debts to banks, correspondents and other entities include specific agreements on how the funds received should be used, the financial conditions that the Bank must maintain, as well as other administrative matters. In Management’s opinion, these specific agreements have been fulfilled by the Bank as of December 31, 2023 and 2022. |
| 15 | BONDS AND NOTES ISSUED |
| a) | This item consists of the following: |
| Hedge Accounting | As of December 31, 2023 |
As of December 31, 2022 |
|||||||||||||||||||
| Annual interest rate | Interest payment | Type |
Notional |
Notional Equivalent |
Maturity |
Issued amount |
Carrying amount |
Maturity |
Issued amount |
Carrying amount |
|||||||||||
|
% |
(000) |
S/(000) |
(000) |
S/(000) |
(000) |
S/(000) |
|||||||||||||||
|
Senior notes - BCP (i)
|
2.70 | Semi-annual | CCS | US$220,000 | 815,980 | January 2025 | US$700,000 | 2,571,032 | January 2025 | US$700,000 | 2,623,445 | ||||||||||
|
Senior notes - BCP (ii)
|
4.65 | Semi-annual | - | - | - | September 2024 | S/2,900,000 | 2,496,413 | September 2024 | S/2,900,000 | 2,490,872 | ||||||||||
|
Senior notes - Credicorp Ltd. (iii)
|
2.75 | Semi-annual | - | - | - | June 2025 | US$500,000 | 1,706,587 | June 2025 | US$500,000 | 1,827,682 | ||||||||||
|
Senior notes - BCP (iv)
|
5.05 | Semi-annual | - | - | - | June 2027 | US$30,000 | 111,143 | June 2027 | US$30,000 | 114,246 | ||||||||||
|
Senior notes - BCP (v)
|
0.97 | Semi-annual | CCS | ¥3,000,000 | 78,969 | November 2025 | ¥3,000,000 | 78,828 | - | - | - | ||||||||||
|
Senior notes - BCP (v)
|
0.45 | Semi-annual | - | - | - | - | - | - | December 2023 | ¥5,000,000 | 145,522 | ||||||||||
|
Senior notes - BCP
|
4.25 | Semi-annual | - | - | - | - | - | - | April 2023 | US$716,301 | 2,713,911 | ||||||||||
|
|
|||||||||||||||||||||
|
Corporate bonds -
|
|||||||||||||||||||||
|
First program
|
|||||||||||||||||||||
|
First issuance (Series A) - Mibanco Colombia
|
9.00 | Quarterly | - | - | - | January 2025 | $112,500 | 82,712 | January 2025 | $112,500 | 72,118 | ||||||||||
| 7,046,715 | 9,987,796 | ||||||||||||||||||||
|
Hedge Accounting |
As of December 31, 2023 |
As of December 31, 2022 |
|||||||||||||||||||
| Annual interest rate | Interest payment |
Type |
Notional |
Notional Equivalent |
Maturity |
Issued amount |
Carrying amount |
Maturity |
Issued amount |
Carrying amount |
|||||||||||
|
% |
(000) |
S/(000) |
(000) |
S/(000) |
(000) |
S/(000) |
|||||||||||||||
|
Subordinated bonds -
|
|||||||||||||||||||||
|
Subordinated bonds - BCP (vi)
|
From 3.13 to 3.25 | Semi-annual | - | - | - | July 2030 / September 2031 | US$1,350,000 | 4,954,968 | July 2030 / September 2031 | US$1,350,000 | 5,064,963 | ||||||||||
|
First program
|
|||||||||||||||||||||
|
First issuance (Series A) - Pacífico Seguros (vii)
|
6.97 | Quarterly | - | - | - | - | - | - | November 2026 | US$60,000 | 228,840 | ||||||||||
|
Second program
|
|||||||||||||||||||||
|
Second issuance (Series A) - Pacífico Seguros
|
4.41 | Semi-annual | - | - | - | December 2030 | US$50,000 | 205,952 | December 2030 | US$50,000 | 173,635 | ||||||||||
|
Second issuance (Series B) - Pacífico Seguros
|
8.00 | Semi-annual | - | - | - | May 2033 | US$60,000 | 185,450 | - | - | - | ||||||||||
|
First issuance (Series B) - MiBanco
|
7.22 | Semi-annual | - | - | - | June 2027 | S/30,000 | 30,000 | June 2027 | S/30,000 | 30,000 | ||||||||||
|
Third program
|
|||||||||||||||||||||
|
Issuance IV - Banco de Crédito de Bolivia
|
5.85 | Semi-annual | - | - | - | February 2033 | Bs137,200 | 65,562 | - | - | - | ||||||||||
|
Issuance III - Banco de Crédito de Bolivia
|
6.00 | Semi-annual | - | - | - | August 2030 | Bs100,000 | 54,067 | August 2030 | Bs100,000 | 55,653 | ||||||||||
|
Issuance I - Banco de Crédito de Bolivia
|
6.25 | Semi-annual | - | - | - | August 2028 | Bs70,000 | 37,847 | August 2028 | Bs70,000 | 39,047 | ||||||||||
|
Fourth program
|
|||||||||||||||||||||
|
First issuance (Series A) - MiBanco
|
5.84 | Semi-annual | - | - | - | March 2031 | S/155,000 | 146,274 | March 2031 | S/155,000 | 146,276 | ||||||||||
| 5,680,120 | 5,738,414 | ||||||||||||||||||||
|
Negotiable certificate of deposit - MiBanco Colombia
|
From 1.0 to 17.90 | To maturity | - | - | - | January 2024 / January 2027 | $1,295,640 | 1,239,824 | January 2023 / January 2027 | $978,455 | 769,132 | ||||||||||
|
Negotiable certificate of deposit - MiBanco
|
From 3.30 to 8.41 | Annual | - | - | - | January 2024 / June 2025 | S/407,101 | 407,101 | January 2023 / June 2024 | S/356,547 | 356,547 | ||||||||||
| 14,373,760 | 16,851,889 | ||||||||||||||||||||
| Interest payable | 221,025 | 155,305 | |||||||||||||||||||
| Total | 14,594,785 | 17,007,194 | |||||||||||||||||||
International issues maintain certain operating covenants, which, in Management’s opinion, the Group has complied with at the dates of the statement of financial position.
| (i) | The Bank issued Senior Notes under the Medium-Term Program proof approximately US$700.0 million at a semi-annual coupon rate of 2.70 percent maturing in January 2025. The Bank can redeem all or part of the notes at any date, between October 11, 2021 and December 11, 2024, at a redemption price equal to or greater than: (i) 100 percent of the aggregate principal amount of the notes to be redeemed; and (ii) the sum of the present value of each remaining scheduled payment discounted at interest rate equal to the Treasury of the United States of America’s rate plus 20 basis points. From December 11, 2024 onwards, the Bank can redeem the total or part of the notes to a redemption price equal to 100 percent of the aggregate principal amount of the notes to be redeemed. The payment of principal will take place on the due date or when the Bank redeems the notes. |
On December 31, 2023, the Bank maintains a CCS which was designated as cash flows hedges of a part of Senior Notes in U.S Dollar subject to exchange rate risk for a notional amount of US$220.0 million, equivalent to S/816.0 million (US$220.0 million equivalent to S/839.1 million, as of December 31, 2021), see note 12(c). By means of the CCS, the cover part of senior notes was economically converted to soles.
| (ii) | The Bank can redeem the whole or part of the Senior Notes between October 17, 2021 and August 16, 2024, at a redemption price equal to or greater than: (i) 100 percent of the aggregate principal amount of the notes, and (ii) the sum of the present value of cash flows discounted at interest rate equivalent to sovereign bonds issued by the government of Perú or other comparable titles plus 25 basis points. As of August 17, 2024, the Bank may redeem all or part of the senior notes at a redemption price equal to 100 percent of the aggregate amount of the principal to be redeemed. The payment of principal will take place on the due date or when the Bank redeems the notes. |
| (iii) | As of December 31, 2023, Credicorp Ltd. maintains Senior Notes for approximately US$486.0 million, equivalent to S/1,802.6 million (US$500.0 million, equivalent to S/1,907.0 million as of December 31, 2022) at fixed interest rate, whose maturity date is on June 17, 2025. |
These Senior Notes can redeem the whole or part mainly by the following ways (i) at any time prior to May 17, 2025, make whole or partial call, at Treasury plus 40 basis points, and (ii) at any time on or after May 17, 2025, at par value. The payment of principal will take place on the due date or when Credicorp Ltd. redeems the notes.
In December 2023, the Group decided to unwind the accounting hedge of a net investment of a foreign operation, it held for a portion of these bonds issued for approximately US$228.8 million (US$228.8 million, equivalent to S/912.2 million, as of December 31, 2021) which covered by the same amount the exposure of the net investment in the subsidiary Atlantic Security Holding Corporation (ASHC), established in Cayman Islands and whose functional currency is the US dollar, see note 30.2(b)(ii). This hedge was intended to mitigate the exchange rate risk associated with the conversion of the net investment held in ASHC to the Group’s functional currency (soles).
| (iv) | On June 21, 2022, the Bank issued senior notes under the Medium-Term Bond Program amounting to US$30.0 million at a semi-annual rate of 5.05 percent maturing in June 2027. An amount equivalent to the net proceeds from the offering will be used to finance or refinance, in whole or in part, new or existing green Eligible Projects, as per BCP’s Sustainability Financing Framework dated January 2022. The Bank may redeem all or part of the notes at a redemption price equal to 100 percent of the aggregate amount of the principal of the notes to be redeemed. |
| (v) | On December 2023, the cross currency swap (CCS) matured for a nominal amount of ¥5,000.0 million (¥5,000.0 million equivalent to S/145.7 million as of December 31, 2022) designated to hedge cash flows of bonds issued in yen at a fixed rate, which were converted to soles, see note 12(c). |
On September 19, 2023, the Bank issued Senior Notes for approximately ¥3,000.0 million equivalent to S/79.0 million, as of December 31,2023, with a fixed rate of 0.97 percent, whose maturity on November 19, 2025.
As of December 31, 2023, the bank maintains a cross currency swap (CCS) for a nominal amount of ¥3,000.0 million equivalent to S/79.0 million, see note 12(c), which was decomposed by risk variables into two cross currency swaps (CCS) with the purpose of being designated as a cash flow hedge of a bond issued in yen at a fixed rate, which was converted to soles through this swap and as a cash flow hedge of placements.
| (vi) | On July 1, 2020, the Bank issued Subordinated Notes under the Medium-Term Bond Program amounting to US$850.0 million at a semiannual rate of 3.125 percent maturing in July 2030 called “3.125% Fixed Rate Subordinated Notes Due 2030 (Callable 2025).” As of July 1, 2025, It will be paid a fixed interest rate equal to the United States Treasury interest rate, comparable to 5 years, plus 300.0 basic points. On July 1, 2025, the Bank may redeem all or part of the notes at a redemption price that is equal to 100 percent of the aggregate principal amount of the notes to be redeemed. Thereafter, the Bank may redeem all or part of the notes at a redemption price equal to the higher of (i) 100 percent of the principal amount of the notes and (ii) the sum of the remaining flows discounted to a rate equivalent to the United States Treasury interest rate plus 45 basis points. The payment of the principal will take place on the expiration date of the notes or when the Bank redeems them. |
On the other hand, effective March 30, 2021, the Bank issued Subordinated Notes under the Medium-Term Bond Program for US$500.0 million at a semi-annual coupon rate of 3.25 percent maturing in September 2031. called “Subordinated Bonds at a Fixed Interest Rate at 3.250% maturing in 2031 (Callable in 2026)”. As of September 30, 2026, a fixed interest rate will be paid equal to the United States Treasury interest rate, comparable to 5 years, plus 245.0 basis points. On September 30, 2026, the Bank may redeem all or part of the subordinated notes at a redemption price that is equal to 100 percent of the aggregate principal amount of the subordinated notes to be redeemed. Thereafter, the Bank may redeem all or part of the subordinated notes at a redemption price that is equal to the greater of (i) 100 percent of the principal amount of the subordinated notes and (ii) the sum of the cash flows remaining discounted at a rate equivalent to the United States Treasury interest rate plus 40 basis points. Principal payment will take place on the maturity date of the subordinated notes or when the Bank redeems them.
| (vii) | On May 17, 2023, Pacífico Compañía de Seguros y Reaseguros S.A. has completed the total redemption of the subordinated bonds called ’First issuance of the First Pacífico Subordinated Bonds Program’ for a notional of US$60.0 million, with maturity in the year 2026. |
| b) | The table below shows the bonds and notes issued, classified by maturity, without accrued interests: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Up to 3 months | 174,341 | 128,442 | ||
| From 3 months to 1 year | 3,660,915 | 3,671,142 | ||
| From 1 to 3 years | 4,728,629 | 7,184,334 | ||
| From 3 to 5 years | 159,754 | 388,396 | ||
| More than 5 years | 5,650,121 | 5,479,575 | ||
| Total | 14,373,760 | 16,851,889 | ||
| 16 | EQUITY |
| a) | Capital stock - |
As of December 31, 2023, 2022 and 2021 a total of 94,382,317 shares have been issued at US$5 per share.
| b) | Treasury stock - |
We present below the stocks of Credicorp Ltd., the number of shares that the Group’s subsidiaries own in Credicorp Ltd. as of December 31, 2023, 2022 and 2021:
| Number of shares | |||||
| As of December 31, 2023 | Shares of the Group | Shared-based payment (*) |
Total | ||
| Atlantic Security Holding Corporation | 14,620,846 | − | 14,620,846 | ||
| BCP | − | 109,185 | 109,185 | ||
| Atlantic Security International Financial Services | − | 39,309 | 39,309 | ||
| Grupo Crédito | − | 36,698 | 36,698 | ||
| Pacífico Seguros | − | 19,912 | 19,912 | ||
| Mibanco | − | 14,128 | 14,128 | ||
| Credicorp Capital Servicios Financieros | − | 13,267 | 13,267 | ||
| ASB Bank Corp | − | 12,041 | 12,041 | ||
| Other minors | − | 20,710 | 20,710 | ||
| 14,620,846 | 265,250 | 14,886,096 | |||
| Number of shares | |||||
| As of December 31, 2022 | Shares of the Group | Shared-based payment (*) | Total | ||
| Atlantic Security Holding Corporation | 14,620,846 | − | 14,620,846 | ||
| BCP | − | 120,505 | 120,505 | ||
| Grupo Crédito | − | 23,214 | 23,214 | ||
| Pacífico Seguros | − | 20,606 | 20,606 | ||
| Credicorp Capital Servicios Financieros | − | 15,007 | 15,007 | ||
| Mibanco | − | 14,260 | 14,260 | ||
| ASB Bank Corp | − | 11,791 | 11,791 | ||
| Other minors | − | 22,994 | 22,994 | ||
| 14,620,846 | 228,377 | 14,849,223 | |||
| Number of shares | |||||
| As of December 31, 2021 | Shares of the Group | Shared-based payment (*) | Total | ||
| Atlantic Security Holding Corporation | 14,620,846 | − | 14,620,846 | ||
| BCP | − | 134,133 | 134,133 | ||
| Pacífico Seguros | − | 22,966 | 22,966 | ||
| Credicorp Capital Servicios Financieros | − | 15,561 | 15,561 | ||
| Mibanco | − | 14,418 | 14,418 | ||
| ASB Bank Corp (Atlantic Security Bank) | − | 11,193 | 11,193 | ||
| Grupo Crédito | − | 7,871 | 7,871 | ||
| Other minors | − | 23,381 | 23,381 | ||
| 14,620,846 | 229,523 | 14,850,369 | |||
(*) It corresponds mainly to the treasury shares that were granted to employees and Senior Management, for which they have the right to vote, and to a lesser extent to the shares acquired for coverage purposes for the new complementary retention program. These shares are not released on said dates.
During 2023, 2022 and 2021, the Group purchased 163,067, 137,604 and 97,951 shares of Credicorp Ltd., respectively, for a total of US$22.5 million (equivalent to S/85.6 million), US$22.5 million (equivalent to S/83.6 million) and US$16.1 million (equivalent to a S/58.9 million), respectively.
| c) | Reserves - |
Certain Group’s subsidiaries are required to keep a reserve that equals a percentage of paid-in capital (20, 30 or 50 percent, depending on its activities and the country in which production takes place); this reserve must be constituted with annual transfers of not less than 10 percent of net profits. As of December 31, 2023, 2022 and 2021, the balance of this reserves amounts approximately to S/8,621.7 million, S/7,783.3 million and S/7,088.6 million, respectively.
At the Board meetings held on April 27, 2023, April 28, 2022 and February 25, 2021, the decision was made to transfer from “Retained earnings” to “Reserves” S/2,593.6 million, S/2,354.9 million and S/347.0 million, respectively.
“Other reserves” include unrealized gains (losses) on fair value of investments through other comprehensive income and on cash flow hedges derivative instruments, net of deferred income tax and non-controlling interest. Movement was as follows:
| Other reserves: | ||||||||||||
| Instruments that will not be reclassifed to profit or loss | Instruments that will be reclassified to consolidated statement of income | |||||||||||
| Equity instruments at fair value | Debt instruments at fair value | Reserve for cash flow hedges | Insurance reserves |
Foreign currency translation reserve |
Total | |||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||
| Balance as of January 1, 2021 | 315,202 | 2,256,531 | (41,102) | (892,598) | 227,865 | 1,865,898 | ||||||
| Decrease in net unrealized gains on investments | (108,317) | (2,411,900) | − | − | − | (2,520,217) | ||||||
| Transfer to results of the net realized loss of investments | − | 3,848 | − | − | − | 3,848 | ||||||
| Transfer of recovery of credit loss of investments to profit or loss | − | 8,121 | − | 8,121 | ||||||||
| Change in net unrealized gain on cash flow hedges derivatives | − | − | 97,251 | − | − | 97,251 | ||||||
| Transfer of net realized gain on cash flow hedges derivatives to profit or loss | − | − | (56,422) | − | − | (56,422) | ||||||
| Other reserves | − | − | − | 733,932 | − | 733,932 | ||||||
| Foreign exchange translation | − | − | − | − | 160,810 | 160,810 | ||||||
| Net movement in hedges of net investments in foreign businesses | − | − | − | − | (57,319) | (57,319) | ||||||
| Balance as of December 31, 2021 | 206,885 | (143,400) | (273) | (158,666) | 331,356 | 235,902 | ||||||
| Impact of initial application of IRFS 17 | − | − | − | 158,666 | − | 158,666 | ||||||
| Others | − | 3,900 | − | − | 5,681 | 9,581 | ||||||
| Balances as of January 1, 2022 - Restated | 206,885 | (139,500) | (273) | − | − | 404,149 | ||||||
| Decrease in net unrealized gains on investments | (36,477) | (1,629,016) | − | − | − | (1,665,493) | ||||||
| Transfer to results of the net realized loss of investments | − | 49,754 | − | − | − | 49,754 | ||||||
| Transfer of recovery of credit loss of investments to profit or loss | − | 63,203 | − | − | − | 63,203 | ||||||
| Change in net unrealized gain on cash flow hedges derivatives | − | − | 29,109 | − | − | 29,109 | ||||||
| Transfer of net realized gain on cash flow hedges derivatives to profit or loss | − | − | (28,048) | − | − | (28,048) | ||||||
| Other reserves | − | − | − | 1,133,536 | − | 1,133,536 | ||||||
| Foreign exchange translation | − | − | − | − | (301,969) | (301,969) | ||||||
| Net movement in hedges of net investments in foreign businesses | − | − | − | − | 39,587 | 39,587 | ||||||
| Balance as of December 31, 2022 - Restated | 170,408 | (1,655,559) | 788 | 1,133,536 | 74,655 | (276,172) | ||||||
| Decrease (increase) in net unrealized gains on investments | (12,247) | 1,241,632 | − | − | − | 1,229,385 | ||||||
| Transfer to results of the net realized loss of investments | − | 7,789 | − | − | − | 7,789 | ||||||
| Transfer of recovery of credit loss of investments to profit or loss | − | 8,716 | − | − | − | 8,716 | ||||||
| Change in net unrealized gain on cash flow hedges derivatives | − | − | 18,359 | − | − | 18,359 | ||||||
| Transfer of net realized gain on cash flow hedges derivatives to profit or loss | − | − | (30,550) | − | − | (30,550) | ||||||
| Other reserves | − | − | − | (754,192) | − | (754,192) | ||||||
| Foreign exchange translation | − | − | − | − | 73,498 | 73,498 | ||||||
| Net movement in hedges of net investments in foreign businesses | − | − | − | − | 18,950 | 18,950 | ||||||
| Balance as of December 31, 2023 | 158,161 | (397,422) | (11,403) | 379,344 | 167,103 | 295,783 | ||||||
| d) | Components of other comprehensive income - |
The movement of the item is as follows:
| 2023 | 2022 | 2021 | ||||
| (Restated) | ||||||
| S/(000) | S/(000) | S/(000) | ||||
|
To be reclassified to the consolidated statement of income in later periods comprehensive income |
||||||
| Debt instruments at fair value through other - | ||||||
| Net unrealized gain (loss) | 1,241,632 | (1,629,016) | (2,411,900) | |||
| Transfer to results of net realized loss | 7,789 | 49,754 | 3,848 | |||
| Transfer of recovery of credit loss to profit or loss | 8,716 | 63,203 | 8,121 | |||
| Sub total | 1,258,137 | (1,516,059) | (2,399,931) | |||
| Non-controlling interest | 18,317 | (15,535) | (39,890) | |||
| Income tax | 58,489 | (82,459) | (52,086) | |||
| 1,334,943 | (1,614,053) | (2,491,907) | ||||
| Cash flow hedge reserves - | ||||||
| Net gain on cash flow hedges | 18,359 | 29,109 | 97,251 | |||
|
Transfer of net realized gain on cash flow hedges derivatives to profit or loss
|
(30,550) | (28,048) | (56,422) | |||
| Sub total | (12,191) | 1,061 | 40,829 | |||
| Non-controlling interest | (148) | 27 | 923 | |||
| Income tax | (5,104) | 158 | 16,834 | |||
| (17,443) | 1,246 | 58,586 | ||||
| Other reserves - | ||||||
| Insurances reserves | (754,192) | 1,133,536 | 733,932 | |||
| Non-controlling interest | (8,619) | 10,604 | 8,513 | |||
| Income tax | − | − | 26,846 | |||
| (762,811) | 1,144,140 | 769,291 | ||||
| Foreign exchange traslation - | ||||||
| Exchange gains or losses | 73,498 | (301,969) | 160,810 | |||
| Net movement in hedges of net investments in foreign businesses | 18,950 | 39,587 | (57,319) | |||
| Sub total | 92,448 | (262,382) | 103,491 | |||
| Non-controlling interest | (34) | (114) | 358 | |||
| 92,414 | (262,496) | 103,849 |
| 2023 | 2022 | 2021 | ||||
| (Restated) | ||||||
| S/(000) | S/(000) | S/(000) | ||||
|
Not to be reclassified to the consolidated statement of income in later periods:
|
||||||
|
Equity instruments at fair value through other comprehensive income -
|
||||||
| Net unrealized loss | (12,247) | (36,477) | (108,317) | |||
| Non-controlling interest | 127 | 23 | 33 | |||
| Income tax | 3,791 | (2,109) | (5,402) | |||
| (8,329) | (38,563) | (113,686) | ||||
| Attributable to: | ||||||
| Credicorp’s equity holders | 571,955 | (680,321) | (1,629,996) | |||
| Non-controlling interest | 9,643 | (4,995) | (30,063) | |||
| 581,598 | (685,316) | (1,660,059) |
| e) | Dividend distribution – |
The chart below shows the distribution of dividends agreed by the Board of Directors:
| 2023 | 2022 | 2021 | ||||
| Date of Meeting - Board of Directors | 27.04.2023 | 28.04.2022 | 26.08.2021 | |||
|
Dividends distribution, net of treasury shares effect (in thousands of soles)
|
1,994,037 | 1,196,422 | 398,808 | |||
| Payment of dividends per share (in soles) | 25.0 | 15.0 | 5.0 | |||
| Date of dividends payout | 09.06.2023 | 10.06.2022 | 07.10.2021 | |||
| Exchange rate published by the SBS | 3.6901 | 3.7560 | 4.1310 | |||
| Dividends payout (equivalent in thousands of US$) | 540,375 | 318,536 | 96,540 |
In accordance with current Peruvian legislation, there is no restriction for overseas remittance of dividends or the repatriation of foreign investment. As of December 31, 2023, 2022 and 2021 dividends paid by the Peruvian subsidiaries to Credicorp are subject to a 5.0 percent withholding tax.
| f) | Regulatory capital - |
As of December 31, 2023 and 2022, the regulatory capital requirement (“patrimonio efectivo” in Perú) applicable to Credicorp subsidiaries engaged in financial services and insurance activities in Perú, determined under the provisions of the Peruvian banking and insurance regulator, SBS, totals approximately S/33,452.6 million and S/31,754.6 million, respectively. At those dates, the Group’s regulatory requirement exceeds by approximately S/7,731.9 million and S/8,157 million, respectively, the minimum regulatory capital required by the SBS.
| 17 | TAX SITUATION |
| a) | Credicorp is not subject to income tax, wealth tax, capital gains tax or property tax in Bermuda. |
Credicorp’s Peruvian subsidiaries are subject to the Peruvian tax regime.
The Peruvian corporate income tax rate at December 31, 2023, 2022 and 2021 was 29.5 percent of taxable income after calculating workers’ participation, which is determined using a rate of 5.0 percent.
The corporate income tax rate in Bolivia is 25.0 percent as of December 31, 2023 and 2022. Bolivian financial entities are subject to an additional rate to the extent that the ROE exceeds 6.0 percent; in that case, they must consider an additional rate of 25.0 percent, which would bring the rate to 50.0 percent. As of 2021, the aforementioned additional rate is also applicable to brokerage firms, mutual fund management companies and insurance companies.
In the case of Chile, the tax legislation changed in 2020, establishing two new regimes currently in force: the general regime and the Pro-Pyme regime, the latter applicable to smaller companies. Credicorp Capital Holding Chile, as well as all its subsidiaries, are taxed under the general regime, whose corporate income tax rate for domiciled legal entities remains at 27.0 percent as of December 31, 2023.
Individuals or legal entities not domiciled in Chile will be subject to an additional tax at rates between 4.0 percent and 35.0 percent, depending on the nature of the income.
In Colombia, according to Law No.2277 of 2021 issued on December 13, 2022, the general income tax rate for the year 2023 is 35.0 percent and for financial institutions an additional 5.0 percent is added for the taxable years 2023 to 2027, totaling a general income tax rate of 40.0 percent (for the taxable year 2022 3.0 percentage points were added to the general tax rate, totaling an income tax rate of 38.0 percent).
The additional rate of 5.0 percent will be applicable only to financial institutions that in the corresponding taxable year have a taxable income equal to or greater than 120,000 Unidad de Valor Tributario (“UVT”), which as of December 31, 2023 and 2022 is equivalent to a total of S/4.4 million and S/3.6 million respectively. In this sense, Credicorp Capital Colombia, Credicorp Capital Fiduciaria and Mibanco Colombia must pay income tax taking into account the above.
Additionally, in case of receiving occasional profits, listed and established by the National Government in the Tax Statute and which are not subject to income tax, a differential rate of 10.0 percent must be applied on the net profit and the associated expenses respectively.
In fiscal year 2021, the Colombian Tax Reform Law repealed, as from fiscal year 2022, the rule that allowed taking 100.0 percent of the industry and commerce tax as a tax discount of the income tax, notices and boards. Therefore, in fiscal year 2023 only 50.0 percent of the industry and commerce tax, signs and boards may be taken as tax discount.
The deadlines for the finality of the income and complementary tax return for the taxable periods 2022 and 2023 are established as follows:
|
Increase in net income tax
compared to the previous year
|
Firmness of the declaration |
| 35 percent | 6 months |
| 25 percent | 12 months |
The reconciliation of the statutory income tax rate to the effective tax rate for the Group is as follows:
| 2023 | 2022 | 2021 | ||||||||||
| In millions | % | In millions | % | In millions | % | |||||||
|
Theoretical tax and income tax rate in Perú
|
(2,040.9) | (29.50) | (2,022.5) | (29.50) | (1,573.2) | (29.50) | ||||||
|
Decrease (Increase) in the statutory tax rate due to:
|
||||||||||||
| (i) Decrease (Increase) due to the profit of subsidiaries not domiciled in Perú | 52.8 | 0.77 | (75.8) | (1.11) | (12.8) | (0.24) | ||||||
| (ii) Provision tax on dividends | (235.7) | (3.44) | (168.4) | (2.46) | (78.6) | (1.47) | ||||||
| (iii) Non-taxable income, net | 335.3 | 4.59 | 156.2 | 2.29 | 3.5 | 0.06 | ||||||
| Income tax and effective income tax rate | (1,888.5) | (27.58) | (2,110.5) | (30.78) | (1,661.1) | (31.15) | ||||||
| b) | Income tax expense for the years ended December 31, 2023, 2022 and 2021 comprises: |
| 2023 | 2022 | 2021 | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Current - | ||||||
| In Perú | 1,669,370 | 1,799,467 | 945,937 | |||
| In other countries | 295,169 | 197,971 | 167,657 | |||
| 1,964,539 | 1,997,438 | 1,113,594 | ||||
| Deferred - | ||||||
| In Perú | (28,734) | 37,447 | 548,920 | |||
| In other countries | (47,354) | 75,616 | (1,527) | |||
| (76,088) | 113,063 | 547,393 | ||||
| Total | 1,888,451 | 2,110,501 | 1,660,987 |
| c) | The following table presents a summary of the Group’s deferred income tax: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Deferred income tax asset, net | ||||
| Deferred asset | ||||
| Allowance for loan losses for loan portfolio | 1,023,000 | 1,108,687 | ||
| Provision for profit sharing | 70,908 | 73,402 | ||
| Provision for sundry expenses and risks | 59,984 | 35,393 | ||
| Carry forward tax losses | 63,668 | 50,675 | ||
| Provision for pending vacations | 32,370 | 31,724 | ||
| Depreciation of improvements for leased premises | 20,436 | 23,762 | ||
|
Unrealized losses due to valuation of investments at fair value through other comprehensive income
|
5,837 | 5,160 | ||
| Provision of Stock awards | 13,821 | 45,510 | ||
|
Unrealized losses due to valuation of investments at fair value through other comprehensive income
|
39,364 | 71,214 | ||
| Unrealized gain from valuation of fair value hedging derivatives | − | 8,246 | ||
| Others | 209,491 | 120,239 | ||
| Deferred liability | ||||
| Intangibles, net | (176,271) | (253,696) | ||
|
Adjustment for difference in exchange of Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT) and SBS
|
(45,016) | (61,858) | ||
| Buildings depreciation | (63,839) | (64,462) | ||
| Deferred acquisitions costs | (16,070) | (16,537) | ||
|
Unrealized gain due to valuation of investments at fair value through other comprehensive income
|
(3,743) | (1,099) | ||
| Buildings revaluation | (2,552) | (3,113) | ||
| Unrealized gain in valuation on cash flow hedge derivatives | (804) | (5,262) | ||
| Others | (48,389) | (33,238) | ||
| Total | 1,182,195 | 1,134,747 |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Deferred income tax liability, net | ||||
| Deferred asset | ||||
| Provision for sundry expenses and risks | 12,395 | 21,192 | ||
| Carry forward tax losses | 19,757 | 19,757 | ||
|
Unrealized losses due to valuation of investments at fair value through other comprehensive income
|
8,731 | 41,146 | ||
| Provision for workers profit sharing | 17,897 | 12,911 | ||
| Deferred income from commissions on remuneration | 5,274 | 4,992 | ||
| Others | (16,564) | 10,270 | ||
| Deferred liability | ||||
| Intangibles, net | (36,569) | (37,315) | ||
| Gain generated in the reorganization of Pacífico EPS | (39,515) | (39,515) | ||
| Deferred acquisitions costs | (8,186) | (22,991) | ||
|
Unrealized gain due to valuation of investments at fair value through other comprehensive income
|
(13,846) | (10,716) | ||
| Reserve for reinstatement premium costs and deductibles | (10,942) | (11,251) | ||
| Leasing operations related to loans | (3,038) | (3,224) | ||
| Buildings revaluation | (3,296) | (3,296) | ||
| Others | (39,615) | (56,965) | ||
| Total | (107,517) | (75,005) |
As of December 31, 2023, the Group has a deferred income tax asset of S/36.3 million corresponding to unrealized gains and losses generated by investments at fair value with changes in other comprehensive income and cash flow hedges. As of December 31, 2022, the Group has a deferred income tax asset of S/114.0 million corresponding to unrealized gains and losses generated by investments at fair value with changes in other comprehensive income and cash flow hedges.
| d) | The Peruvian Tax Authority has the right to review and, if necessary, amend the annual income tax returns filed by Peruvian subsidiaries up to four years after their filing date. Income tax returns of the major subsidiaries open for examination by the tax authorities are as follows: |
| Banco de Crédito del Perú S.A. | 2016, 2017, 2020 to 2023 |
| Mibanco | 2018, 2021 to 2023 |
| Pacífico Compañía de Seguros y Reaseguros | 2018 to 2023 |
| Credicorp Capital Servicios Financieros | 2018 to 2023 |
| Credicorp Capital Perú | 2018 to 2023 |
| Credicorp Capital Holding Perú S.A.A. | 2018 to 2023 |
| Grupo Credito | 2018 to 2023 |
It is worth mentioning that the Tax Authority is auditing the sworn declaration of:
| Banco de Crédito del Perú | 2019 |
| Mibanco | 2021 |
| Grupo Crédito | 2017 |
The Bolivian, Chilean and Colombian Tax Authorities have the power to review and, if applicable, make a new determination for the income tax the subsidiaries to Credicorp located in said countries, upon presentation of their Income Tax declarations. Additionally, in the case of Colombia, a period of 6 years was established for the taxpayers obliged to apply Transfer Prices or taxpayers who report tax losses. The annual income tax declarations pending examination by the overseas tax authorities are the following:
| Banco de Crédito de Bolivia | 2015 to 2023 |
| Credicorp Capital Colombia | 2017 to 2023 |
| Mibanco Colombia | 2019 to 2023 |
Since tax regulations are subject to interpretation by the different Tax Authorities where Credicorp’s subsidiaries are located, it is not possible to determine at the present date whether any significant additional liabilities may arise from any eventual tax examinations of the Credicorp’s subsidiaries. Any resulting unpaid taxes, tax penalties or interest that may arise will be recognized as expenses in the year in which they are determined. However, Management of Credicorp and its Subsidiaries and their legal counsel consider that any additional tax assessments would not have a significant impact on the consolidated financial statements as of December 31, 2023 and 2022.
| e) | International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12 |
The amendments to IAS 12 have been introduced in response to the OECD’s BEPS Pillar Two rules and include:
| i) | A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional implementation of the Pillar Two model rules; and |
| ii) | Disclosure requirements for affected entities to help users of the financial statements better understand an entity’s exposure to Pillar Two income taxes arising from that legislation, particularly before its effective date. |
These modifications to IAS 12 came into force on January 1, 2023, and have not had an impact on the Group’s consolidated financial statements, to the extent that Pillar Two legislation is not in force at the date of presentation of these annual accounts.
The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities arising from Pillar Two income taxes.
At the date of this report, the corresponding legislation is still pending and there is no certainty, to date or whether such legislation will be enacted and, if applicable, what the effective date of the resulting legislation will be.
In 2023, the Group is in the process of evaluating its exposure to the Pillar Two legislation.
Furthermore, the Group based on the analysis carried out, at the end of the 2023 financial year the Group does not anticipate substantial economic impacts resulting from the Additional Tax that would arise as a consequence of the application of Pillar Two.
| 18 | CONTINGENT RISKS AND COMMITMENTS |
| a) | This item consists of the following: |
| 2023 | 2022 | ||||
| S/(000) | S/(000) | ||||
| Contingent credits – indirect loans (b) | |||||
| Endorsements and standby letters | 17,737,645 | 18,244,865 | |||
| Import and export letters of credit | 2,313,970 | 2,683,190 | |||
| Sub-total, Note 7(b) | 20,051,615 | 20,928,055 | |||
| Responsibilities under credit line agreements (c) | 87,091,701 | 86,597,041 | |||
| Total | 107,143,316 | 107,525,096 |
The reference values of transactions with derivative financial instruments are recorded in accounts outside the statement of financial position in the committed currency, as presented in note 12(c).
| b) | In the normal course of their business, the Group’s banking subsidiaries are party to transactions with off-balance sheet risk. These transactions expose them to credit risk in addition to the amounts recognized in the consolidated statement of financial position. |
Credit risk for contingent credits is defined as the possibility of sustaining a loss because one of the parties to a financial instrument fails to comply with the terms of the contract. The risk of credit losses is represented by the contractual amounts specified in the related contracts. The Group applies the same credit policies in making contingent commitments and other obligations as it does for on-balance sheet instruments (Note 7(a)), including the requirement to obtain collateral when it is deemed necessary.
Collateral held varies, but may include deposits in financial institutions, securities or other assets. Many of the contingent transactions reach maturity without any performance being required; therefore, the total committed amounts do not necessarily represent future cash requirements.
| c) | Lines of credit include consumer loans and other consumer loan facilities (credit card receivables) granted to customers and are cancelable upon related notice to the customer. |
| 19 | INTEREST, SIMILAR INCOME AND SIMILAR EXPENSES |
This item consists of the following:
| 2022 | ||||||
| 2023 | (Restated) | 2021 | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Interest and similar income | ||||||
| Interest on loans | 15,044,864 | 12,419,281 | 10,170,680 | |||
|
Interest on investments at fair value through other comprehensive income |
1,984,408 | 1,595,570 | 1,152,542 | |||
| Interest on due from banks | 1,133,211 | 467,387 | 49,637 | |||
| Interest on investments at amortized cost | 456,543 | 382,097 | 323,689 | |||
|
Interest on investments at fair value through profit or loss |
48,376 | 38,550 | 50,562 | |||
| Dividends received | 46,080 | 29,226 | 40,637 | |||
| Other interest and similar income | 85,013 | 79,171 | 62,659 | |||
| Total | 18,798,495 | 15,011,282 | 11,850,406 | |||
| Interest and similar expense | ||||||
| Interest on deposits and obligations | (3,141,307) | (1,688,245) | (865,474) | |||
| Interest on due to banks and correspondents | (1,158,665) | (683,078) | (435,426) | |||
| Interest on bonds and notes issued | (634,299) | (728,218) | (836,977) | |||
|
Financial expenses of insurance activities |
(466,814) | (426,477) | − | |||
| Deposit Insurance Fund | (237,441) | (230,255) | (213,741) | |||
| Interest on lease liabilities | (25,574) | (25,054) | (27,374) | |||
| Other interest and similar expense | (196,423) | (138,337) | (111,810) | |||
| Total | (5,860,523) | (3,919,664) | (2,490,802) |
| 20 | COMMISSIONS AND FEES |
This item consists of the following:
| 2022 | ||||||
| 2023 | (Restated) | 2021 | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Performance obligations at a point in time: | ||||||
|
Maintenance of accounts, transfers and credit and debit card services |
1,465,318 | 1,595,547 | 1,442,966 | |||
| Commissions for banking services | 443,040 | 367,946 | 301,592 | |||
| Collection services | 119,563 | 119,636 | 107,442 | |||
| Commissions for consulting and technical studies | 61,390 | 66,291 | 62,384 | |||
|
Commissions for salary advance and payment of services |
59,903 | 66,330 | 52,557 | |||
|
Commissions for brokerages, stockbrokers and stock markets. |
43,861 | 44,225 | 40,769 | |||
|
Commissions for intermediation in virtual platforms |
41,376 | 35,324 | 29,983 | |||
| Operational commissions | 41,082 | 36,213 | 76,626 | |||
| Commissions for placements | 32,253 | 27,686 | 18,451 | |||
| Penalty commissions | 1,635 | 3,104 | 21,420 | |||
| Others | 97,450 | 127,051 | 81,947 | |||
| 2,406,871 | 2,489,353 | 2,236,137 | ||||
| Performance obligations over time: | ||||||
| Funds and equity management | 700,663 | 628,739 | 717,227 | |||
| Contingent loans and foreign trade fees | 651,392 | 450,874 | 459,165 | |||
| Commissions for custody of securities | 45,533 | 73,891 | 81,205 | |||
| 1,397,588 | 1,153,504 | 1,257,597 | ||||
| Total | 3,804,459 | 3,642,857 | 3,493,734 | |||
| 21 | NET GAIN ON SECURITIES |
This item consists of the following:
| 2023 | 2022 | 2021 | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Net gain (loss) on investments at fair value through profit or loss |
325,808 | (114,892) | (102,761) | |||
| Net gain in associates | 117,089 | 104,461 | 74,021 | |||
| (Provision) of credit loss for investments at fair value with changes in other comprehensive income, note 6(b) |
(4,321) | (58,260) | (6,816) | |||
|
Net (loss) gain on investments at fair value with changes in other comprehensive income
|
(14,917) | 75,273 | 65,976 | |||
| Others | 1,485 | (1,114) | (1,770) | |||
| Total | 425,144 | 5,468 | 28,650 |
| 22 | INSURANCE AND UNDERWRITING RESULT |
| a) | The insurance and reinsurance result consists of the following: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Contracts measured under BBA and VFA (b) | 226,125 | 211,323 | ||
| Contracts measured under PAA | 3,629,283 | 3,321,947 | ||
| Income from the Insurance Service | 3,855,408 | 3,533,270 | ||
| Claims incurred and adjustments related to past claims incurred and other insurance service expenses | (2,232,672) | (2,122,652) | ||
| Losses in onerous contracts and reversal of losses | (17,181) | (92,530) | ||
| Others | (3,134) | (15,741) | ||
| Insurance Service Expenses | (2,252,987) | (2,230,923) | ||
| Insurance Service Result | 1,602,421 | 1,302,347 |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Variation in incurred claim provision - pending Claims - Reinsurance | 448,500 | 317,110 | ||
| Adjustment changes of incurred claim provision - RA - Reinsurance | (9) | − | ||
| Income from reinsurance recoveries | 448,491 | 317,110 | ||
| Premiums assigned to the reinsurance period | (839,812) | (778,009) | ||
| Expenses for assigning the premiums paid to the reinsurer | (839,812) | (778,009) | ||
| Reinsurance result | (391,321) | (460,899) |
| b) | The result of the contracts measured under BBA and VFA of the insurance service is detailed below: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| Amounts related to changes in liabilities for the remaining coverage: | ||||
| CSM recognized for services provided | 128,639 | 131,588 | ||
| Change in risk adjustment for non-financial risk | 12,357 | 15,982 | ||
|
Expenses for insurance services and expected claims occurred |
81,995 | 65,329 | ||
| Cash recovery for the purchase of insurance | 3,134 | (1,576) | ||
| Contracts measured under BBA and VFA | 226,125 | 211,323 |
| c) | The impact of new business for onerous and non-onerous contracts is detailed below: |
| 2023 | ||||||
| Onerous contracts | Non-onerous contracts | Total | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Estimates of the present value of future outflows: | ||||||
| Insurance Acquisition Cash Flows | 21,123 | 85,120 | 106,243 | |||
| Claims and other directly attributable expenses | 135,905 | 658,515 | 794,420 | |||
| Estimates of the present value of future inflows | (138,467) | (856,323) | (994,790) | |||
| Risk adjustment for non-financial risk | 1,913 | 6,225 | 8,138 | |||
| CSM | − | 106,463 | 106,463 | |||
| Impact on provisions for contracts recognized in the period | 20,474 | − | 20,474 | |||
| 2022 | ||||||
| Onerous contracts | Non-onerous contracts | Total | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Estimates of the present value of future outflows: | ||||||
| Insurance Acquisition Cash Flows | 14,022 | 72,277 | 86,299 | |||
| Claims and other directly attributable expenses | 165,170 | 468,718 | 633,888 | |||
| Estimates of the present value of future inflows | (167,263) | (668,931) | (836,194) | |||
| Risk adjustment for non-financial risk | 2,562 | 7,569 | 10,131 | |||
| CSM | − | 120,367 | 120,367 | |||
| Impact on provisions for contracts recognized in the period | 14,491 | − | 14,491 | |||
| d) | Below, we present the estimate of the release of CSM considering the reversals of the loss component: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| One year | 113,378 | 115,614 | ||
| Two years | 115,736 | 148,085 | ||
| Three years | 116,736 | 164,542 | ||
| Four years | 117,284 | 165,924 | ||
| Five years | 114,531 | 152,654 | ||
| from 6 to 10 years | 494,953 | 413,518 | ||
| Older than 10 years | 1,011,435 | 217,278 | ||
| Total | 2,084,053 | 1,377,615 |
| e) | The fair value of the underlying assets is as follows: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| IL Controlled | 91,502 | 84,570 | ||
| IL Controlled Soles | 186,879 | 187,088 | ||
| IL Balanced | 79,671 | 72,059 | ||
| IL Balanced II | 382,326 | 370,484 | ||
| IL Global Balanced | 87,527 | 75,301 | ||
| IL Capitalized | 1,433 | 328 | ||
| IL Capitalized II | 259 | 190 | ||
| IL Global Growth | 1,073 | 198 | ||
| IL Sustainable Capitalization | 804 | − |
| f) | The impact in the current period of the transition approaches adopted to establish CSM for insurance contract portfolios is revealed in the following table: |
| 2023 | 2022 | |||
| S/(000) | S/(000) | |||
| CSM at the beginning of the period | 992,527 | 1,251,473 | ||
| Changes related to future service | (11,385) | (181,050) | ||
| Changes related to the current service | (74,030) | (77,896) | ||
| CSM at the end of the period | 907,112 | 992,527 |
| g) | Below is the composition of the net premiums earned as of December 31, 2021 under IFRS 4: |
| Gross written premiums | Technical reserve adjustment | Total gross written premiums (*) |
Premiums ceded to reinsurers and co-insurers, net (**) |
Results of financial assets designated at fair value through profit and loss, |
Total Net premiums earned |
|||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||
| 2021 | ||||||||||||
| Life insurance | 2,508,154 | (890,216) | 1,617,938 | (214,636) | 54,663 | 1,457,965 | ||||||
| Health insurance | 630,790 | (30,457) | 600,333 | (15,078) | − | 585,255 | ||||||
| General insurance | 1,140,478 | (3,176) | 1,137,302 | (508,992) | − | 628,310 | ||||||
| Total | 4,279,422 | (923,849) | 3,355,573 | (738,706) | 54,663 | 2,671,530 |
| (*) | Gross written premiums by insurance type are described below: |
| 2021 | ||||
| S/(000) | % | |||
| Life insurance (i) | 1,617,938 | 48.22 | ||
| Health insurance (ii) | 600,333 | 17.89 | ||
| General insurance (iii) | 1,137,302 | 33.89 | ||
| Total | 3,355,573 | 100.00 | ||
| (i) | The breakdown of life insurance gross written premiums is as follows: |
| 2021 | ||||
| S/(000) | % | |||
| Disability and survival (*) | 645,194 | 39.88 | ||
| Credit life | 593,370 | 36.67 | ||
| Individual life (**) | 119,220 | 7.37 | ||
| Group life | 150,777 | 9.32 | ||
| Annuities | 109,377 | 6.76 | ||
| Total | 1,617,938 | 100.00 | ||
| (*) | This item includes Complementary Work Risk Insurance (“SCTR” from its Spanish acronym). |
| (**) | Individual life insurance premiums include Investment Link insurance contracts. |
| (ii) | Gross health insurance premiums include medical assistance that amounts to S/519.8 million and represents 86.59 percent in this line of business as of December 31, 2021 |
| (iii) | General insurance gross written premiums consist of the following: |
| 2021 | ||||
| S/(000) | % | |||
| Automobile | 334,939 | 29.45 | ||
| Fire and allied lines | 311,048 | 27.35 | ||
| Theft and robbery | 110,815 | 9.74 | ||
| Third party liability | 109,907 | 9.66 | ||
| Transport | 58,300 | 5.13 | ||
| Technical lines (*) | 63,792 | 5.61 | ||
| Marine Hull | 29,414 | 2.59 | ||
| SOAT (Mandatory automobile line) | 25,662 | 2.26 | ||
| Aviation | 38,275 | 3.37 | ||
| Others | 55,150 | 4.84 | ||
| Total | 1,137,302 | 100.00 | ||
| (*) | Technical lines include Contractor’s All Risk (CAR), Machinery breakdown, All Risk (EAR), Electronic equipment (EE), All Risk Contractor’s Equipment (ARCE). |
| (**) | “Premiums ceded to reinsurers and coinsurers, net” include: |
| 2021 | ||
| S/(000) | ||
| Premiums ceded for automatic contracts (mainly excess of loss) | (355,356) | |
|
Premiums ceded for facultative contracts, |
(392,346) | |
|
Annual variation of reserve risk in progress of premiums ceded |
8,996 | |
| (738,706) |
| h) | Below are the claims incurred by life, general and health insurance contracts as of December 31, 2021 under IFRS 4: |
| 2021 | ||||||||
|
Life insurance |
General insurance |
Health insurance |
Total | |||||
| S/(000) | S/(000) | S/(000) | S/(000) | |||||
| Gross claims | 2,183,789 | 375,162 | 325,307 | 2,884,258 | ||||
| Ceded claims | (406,494) | (120,546) | (15,301) | (542,341) | ||||
| Net insurance claims | 1,777,295 | 254,616 | 310,006 | 2,341,917 | ||||
| 23 | SALARIES AND EMPLOYEES BENEFITS |
This item consists of the following:
| 2022 | ||||||
| 2023 | (Restated) | 2021 | ||||
| S/(000) | S/(000) | S/(000) | ||||
| Salaries | 2,430,121 | 2,176,165 | 2,090,835 | |||
| Vacations, medical assistance and others | 433,441 | 357,879 | 342,435 | |||
| Bonuses | 320,084 | 301,097 | 280,568 | |||
| Workers profit sharing | 286,895 | 311,459 | 165,091 | |||
| Additional participation | 276,177 | 271,995 | 342,065 | |||
| Social security | 254,770 | 234,867 | 213,640 | |||
| Severance indemnities | 180,637 | 167,020 | 159,845 | |||
| Share-based payment plans | 83,328 | 81,679 | 73,997 | |||
| Total | 4,265,453 | 3,902,161 | 3,668,476 |
| 24 | ADMINISTRATIVE EXPENSES |
This item consists of the following:
| 2023 | 2022 (Restated) |
2021 | ||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||
| IT expenses and systems outsourcing | 1,080,001 | 908,339 | 741,429 | |||||||||
| Publicity and loyalty programs | 720,718 | 652,587 | 486,885 | |||||||||
| Audit, consulting and professional fees | 336,715 | 333,325 | 312,978 | |||||||||
| Taxes and contributions | 264,326 | 280,171 | 289,484 | |||||||||
| Transport and communications | 226,860 | 225,491 | 208,244 | |||||||||
| Repair and maintenance | 157,127 | 136,105 | 123,232 | |||||||||
| Outsourcing | 144,534 | 113,211 | 99,440 | |||||||||
| Sundry supplies | 118,510 | 87,844 | 57,093 | |||||||||
| Comissions by agents | 115,120 | 106,356 | 104,700 | |||||||||
| Short term, low value and variable income lease | 108,357 | 91,680 | 86,417 | |||||||||
| Security and protection | 64,432 | 64,480 | 63,500 | |||||||||
| Subscriptions and quotes | 61,945 | 55,914 | 55,331 | |||||||||
| Electricity and water | 56,359 | 50,566 | 48,886 | |||||||||
| Insurance | 56,324 | 62,994 | 62,142 | |||||||||
| Electronic processing | 39,764 | 35,896 | 39,528 | |||||||||
| Cleaning | 22,677 | 20,435 | 20,105 | |||||||||
| Others | 229,434 | 188,671 | 154,323 | |||||||||
| Total | 3,803,203 | 3,414,065 | 2,953,717 |
| 25 | OTHER INCOME AND EXPENSES |
This item consists of the following:
| 2023 | 2022 (Restated) |
2021 | ||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||
| Other income | ||||||||||||
| Net results from sale of loan portfolio | 83,515 | 18,712 | 15,700 | |||||||||
| Rental income | 46,836 | 44,257 | 35,218 | |||||||||
| Income from previous years | 33,969 | 66,531 | 33,969 | |||||||||
| Contract resolution impact | 6,559 | 5,352 | 16,817 | |||||||||
| Recovery of other accounts receivable and other assets | 1,862 | 1,299 | 3,728 | |||||||||
| Net income from the sale of property, furniture and equipment | 1,654 | 14,979 | 16,083 | |||||||||
| Gain from the sale of adjudicated assets | - | 11,355 | - | |||||||||
| Others | 266,258 | 105,561 | 145,052 | |||||||||
| Total other income | 440,653 | 268,046 | 266,567 |
| 2023 | 2022 (Restated) |
2021 | ||||||||||
| S/(000) | S/(000) | S/(000) | ||||||||||
| Other expenses | ||||||||||||
| Reduction of intangibles due to withdrawals and dismissed projects | 96,978 | 25,140 | 17,630 | |||||||||
| Provision for sundry risks, see Note 12(j) | 95,873 | 43,846 | 70,824 | |||||||||
| Losses due to operational risk | 66,302 | 74,512 | 58,956 | |||||||||
| Association in participation | 53,097 | 40,955 | 47,176 | |||||||||
| Administrative and tax penalties | 28,882 | 1,626 | 1,601 | |||||||||
| Donations | 23,354 | 16,362 | 9,949 | |||||||||
| Expenses on improvements in building for rent | 17,445 | 18,962 | 23,814 | |||||||||
| Provision for other accounts receivable | 11,975 | 18,736 | 28,324 | |||||||||
| Operating expenses due to COVID-19 | 7,775 | 20,177 | 50,107 | |||||||||
| Others | 132,920 | 103,982 | 126,733 | |||||||||
| Total other expenses | 534,601 | 364,298 | 435,114 |
| 26 | EARNING PER SHARE |
The net earnings per ordinary share were determined based on the net income attributable to equity holders of the Group as follows:
| 2023 | 2022 | 2021 | ||||||||||
| Net income attributable to equity holders of Credicorp (in thousands of Soles) | 4,865,540 | 4,647,818 | 3,584,582 | |||||||||
| Number of stock | ||||||||||||
| Ordinary stock, note 16(a) | 94,382,317 | 94,382,317 | 94,382,317 | |||||||||
| Less – opening balance of treasury stock | (14,849,223 | ) | (14,850,369 | ) | (14,914,734 | ) | ||||||
| Sale (acquisition) of treasury stock, net | (55,283 | ) | (3,615 | ) | 26,604 | |||||||
| Weighted average number of ordinary shares for basic earnings | 79,477,811 | 79,528,333 | 79,494,187 | |||||||||
| Plus - dilution effect - stock awards | 177,709 | 168,462 | 182,208 | |||||||||
| Weighted average number of ordinary shares adjusted for the effect of dilution | 79,655,520 | 79,696,795 | 79,676,395 | |||||||||
| Basic earnings per share (in Soles) | 61.22 | 58.44 | 45.09 | |||||||||
| Diluted earnings per share (in Soles) | 61.08 | 58.32 | 44.99 | |||||||||
| 27 | OPERATING SEGMENTS |
The Credicorp Board of Directors organized the Group’s subsidiaries according to the types of financial services provided and the sectors on which they are focused; with the objective of optimizing the management thereof. Next, we present the Group´s business lines:
| a) | Universal Banking - |
Includes the operations related to the granting of various credits and financial instruments to individuals and legal entities, from the segments of wholesale and retail banking, such as the obtaining of funds from the public through deposits and current accounts, obtaining of funding by means of initial public offerings and direct indebtedness with other financial institutions. This business line incorporates the results and balances of the Banco de Crédito del Perú (BCP) and Banco de Crédito de Bolivia (BCB).
| b) | Insurance and Pensions - |
| - | Insurance: includes, mainly, the issue of insurance policies to cover losses in commercial property, transport, marine vessels, automobiles, life, health and pensions, operations carried out through Pacífico Compañía de Seguros y Reaseguros. |
| - | Pensions: provides Management Service of private pension funds to the affiliates, operation carried out from Prima AFP. |
| c) | Microfinance - |
Includes the management of loans, credits, deposits and current accounts of the small and microenterprises: carried out through Mibanco, Banco de la Microempresa S.A. and Mibanco – Banco de la Microempresa de Colombia S.A.
| d) | Investment Banking and Wealth Management - |
Brokerage service and investment management services offered to a broad and diverse clientele, which includes corporations, institutional investors, governments and foundations; also, the structuring and placement of issues in the primary market, as well as the execution and negotiation of transactions in the secondary market. Additionally, it structures securitization processes for corporate customers and manages mutual funds.
All of these services are provided through Credicorp Capital Ltd. and subsidiaries and ASB Bank Corp.
Management of these business lines is designed to:
| - | Promote the joint action of our businesses in order to take advantage of the synergies which result from the diversification of our portfolio. |
| - | Strengthening our leadership in the financial sector through our growth in new businesses, and the establishment of an investment banking platform available not only to the corporate world, but also to the retail segment, especially to the Small and Medium Enterprise (SME) and Consumer sectors. |
| - | Improve the ongoing search to adapt our business models, processes and procedures into line with best practices worldwide. |
The operating results of the Group’s new business lines are monitored separately by the Board of Directors and Senior Management on a monthly basis, in order to make decisions regarding the allocation of resources and the evaluation of the performance of each one of the segments. The Chief Operating Decision Maker (CODM) of Credicorp is the Chief Executive Officer (CEO). The performance of the segments is evaluated based on the operating profits or losses and is measured consistently with the operating profits and losses presented in the consolidated statement of income.
Financial information by segment is prepared subject to the minimum controls necessary and on a uniform basis, with coherent grouping according to the type of activity and customer. The transfer prices used for determining income and expenses generated among the operating segments are similar to the prices that would be applicable to transactions carried out at arm’s length.
None of the income derives from transactions carried out with a single customer or counterparty which is equal to or greater than 10 percent or more of the total income of the Group as of December 31, 2023, 2022 and 2021.
| (i) | The following table presents information recorded in the results and for certain items of the assets corresponding to the Group’s reportable segments (in millions of soles) as of December 31, 2023, 2022 and 2021: |
| Income (*) | ||||||||||||||||||||||
| 2023 | External | From other segments (**) | Net interest, similar income and expenses | Other income (***) | Provision for credit losses on loan portfolio | Depreciation, amortization and right in use | Income Tax | Net Profit | Additions of fixed assets, intangibles and goodwill | Total assets |
Total liabilities | |||||||||||
| Universal Banking | ||||||||||||||||||||||
| Banco de Crédito del Perú | 16,987 | 578 | 10,090 | 4,511 | (2,846) | (459) | (1,497) | 4,203 | 765 | 178,834 | 155,913 | |||||||||||
| Banco de Crédito de Bolivia | 920 | - | - | 211 | (50) | (25) | (62) | 83 | 16 | 13,465 | 12,612 | |||||||||||
| 17,907 | 578 | 10,090 | 4,722 | (2,896) | (484) | (1,559) | 4,286 | 781 | 192,299 | 168,525 | ||||||||||||
| Insurance and Pensión funds | ||||||||||||||||||||||
| Pacífico Seguros y subsidiarias | 2,233 | - | 285 | 951 | - | (4) | (40) | 818 | 79 | 15,865 | 13,446 | |||||||||||
| Prima AFP | 395 | - | 4 | 388 | - | (24) | (57) | 150 | 17 | 741 | 241 | |||||||||||
| 2,628 | - | 289 | 1,339 | - | (28) | (97) | 968 | 96 | 16,606 | 13,687 | ||||||||||||
| Microfinance | ||||||||||||||||||||||
| MiBanco | 3,238 | 134 | 2,160 | 161 | (923) | (88) | (47) | 204 | 129 | 16,898 | 13,902 | |||||||||||
| Mibanco Colombia | 489 | - | 255 | 46 | (125) | (16) | 26 | (73) | 44 | 2,113 | 1,849 | |||||||||||
| 3,727 | 134 | 2,415 | 207 | (1,048) | (104) | (21) | 131 | 173 | 19,011 | 15,751 | ||||||||||||
| Investment Banking and Wealth Management | 1,026 | 39 | 114 | 591 | - | (37) | (43) | (167) | 13 | 10,144 | 8,484 | |||||||||||
| Other segments | 377 | 1 | 30 | 8 | (13) | (6) | (168) | (258) | 151 | 4,274 | 2,935 | |||||||||||
| Eliminations | - | - | - | - | - | - | - | - | - | (3,494) | (3,649) | |||||||||||
| Total consolidated | 25,665 | 752 | 12,938 | 6,867 | (3,957) | (659) | (1,888) | 4,960 | 1,214 | 238,840 | 205,733 | |||||||||||
| (*) | Corresponds to total interest and similar income, other income (includes income and expenses on commissions) and technical insurance results. |
| (**) | Corresponds to income derived from transactions with other segments, which were eliminated in the consolidated statement of income. |
| (***) | Corresponds to other income (include income and expenses for commissions) and technical insurance results. |
| Income (*) | ||||||||||||||||||||||
| 2022 | External | From other segments (**) | Net interest similar income and expensese | Other Income (***) | Provision for credit losses on loan portfolio | Depreciation, amortization and right use | Income Tax | Net profit | Additions of fixed assets, intangibles and goodwill | Total assets |
Total liabilities | |||||||||||
| Universal Banking | ||||||||||||||||||||||
| Banco de Crédito del Perú | 13,510 | 518 | 7,828 | 3,139 | (1,448) | (452) | (1,625) | 4,258 | 590 | 177,907 | 157,485 | |||||||||||
| Banco de Crédito de Bolivia | 865 | 9 | 325 | 167 | (69) | (24) | (112) | 68 | 15 | 12,698 | 11,838 | |||||||||||
| 14,375 | 527 | 8,153 | 3,306 | (1,517) | (476) | (1,737) | 4,326 | 605 | 190,605 | 169,323 | ||||||||||||
| Insurance and Pensión funds | ||||||||||||||||||||||
| Pacífico Seguros y subsidiarias | 1,689 | 63 | 301 | 758 | - | (3) | (12) | 467 | 80 | 14,565 | 12,149 | |||||||||||
| Prima AFP | 354 | 4 | - | 354 | - | (23) | (48) | 110 | 29 | 735 | 238 | |||||||||||
| 2,043 | 67 | 301 | 1,112 | - | (26) | (60) | 577 | 109 | 15,300 | 12,387 | ||||||||||||
| Microfinance | ||||||||||||||||||||||
| MiBanco | 2,750 | - | 2,139 | 31 | (597) | (76) | (165) | 425 | 96 | 17,226 | 14,444 | |||||||||||
| Mibanco Colombia | 375 | - | 236 | 45 | (45) | (13) | (7) | 14 | 8 | 1,530 | 1,290 | |||||||||||
| 3,125 | - | 2,375 | 76 | (642) | (89) | (172) | 439 | 104 | 18,756 | 15,734 | ||||||||||||
| Investment Banking and Wealth Management | 923 | 90 | 98 | 666 | - | (41) | (15) | 21 | 41 | 14,051 | 10,670 | |||||||||||
| Other segments | 453 | 41 | 165 | 748 | - | (4) | (127) | (603) | 61 | 3,476 | 2,606 | |||||||||||
| Eliminations | - | - | - | - | - | - | - | - | - | (6,774) | (4,901) | |||||||||||
| Total consolidated | 20,919 | 725 | 11,092 | 5,908 | (2,159) | (636) | (2,111) | 4,760 | 920 | 235,414 | 205,819 | |||||||||||
| (*) | Corresponds to total interest and similar income, other income (includes income and expenses on commissions) and technical results. |
| (**) | Corresponds to income derived from transactions with other segments, which were eliminated in the consolidated statement of income. |
| (***) | Corresponds to other income (include income and expenses for commissions) and technical results. |
| Income (*) | ||||||||||||||||||||||
| 2021 | External | From other segments (**) | Net interest similar, income and expenses | Other income net (***) | Provision for credit losses on loan portfolio | Depreciation and amortization | Income Tax | Net profit | Additions of fixed asset, intangibles and goodwill | Total assets |
Total liabilities | |||||||||||
| Universal Banking | ||||||||||||||||||||||
| Banco de Crédito del Perú | 11,143 | 368 | 6,192 | 3,262 | (1,034) | (441) | (1,275) | 3,391 | 449 | 184,740 | 166,411 | |||||||||||
| Banco de Crédito de Bolivia | 891 | 10 | 337 | 157 | (17) | (23) | (63) | 72 | 27 | 13,800 | 12,965 | |||||||||||
| 12,034 | 378 | 6,529 | 3,419 | (1,051) | (464) | (1,338) | 3,463 | 476 | 198,540 | 179,376 | ||||||||||||
| Insurance and Pensions | ||||||||||||||||||||||
| Pacífico Seguros y subsidiarias | 3,544 | 64 | 610 | 228 | - | (57) | (5) | (130) | 81 | 16,491 | 14,194 | |||||||||||
| Prima AFP | 407 | 1 | (4) | 406 | - | (21) | (65) | 146 | 12 | 840 | 265 | |||||||||||
| 3,951 | 65 | 606 | 634 | - | (78) | (70) | 16 | 93 | 17,331 | 14,459 | ||||||||||||
| Microfinance | ||||||||||||||||||||||
| Mibanco | 2,114 | - | 1,860 | (12) | (504) | (78) | (143) | 266 | 50 | 16,163 | 13,800 | |||||||||||
| Mibanco Colombia (****) | 302 | - | 229 | 35 | (4) | (14) | (16) | 43 | 8 | 1,393 | 1,159 | |||||||||||
| 2,416 | - | 2,089 | 23 | (508) | (92) | (159) | 309 | 58 | 17,556 | 14,959 | ||||||||||||
| Investment Banking and Wealth Management | 866 | 73 | 89 | 767 | 1 | (45) | (25) | 147 | 11 | 14,744 | 12,990 | |||||||||||
| Other segments | 182 | 33 | 47 | 80 | (1) | (4) | (69) | (263) | 2 | 3,377 | 2,634 | |||||||||||
| Eliminations | - | - | - | - | - | - | - | - | - | (6,701) | (6,609) | |||||||||||
| Total consolidated | 19,449 | 549 | 9,360 | 4,923 | (1,559) | (683) | (1,661) | 3,672 | 640 | 244,847 | 217,809 | |||||||||||
| (*) | Corresponds to total interest and similar income, other income (includes income and expenses on commissions) and technical results. |
| (**) | Corresponds to income derived from transactions with other segments, which were eliminated in the consolidated statement of income. |
| (***) | Corresponds to other income (include income and expenses for commissions) and technical results. |
| (ii) | The following table presents (in millions of soles) the distribution of the total revenue, operating revenue and non-current assets of the Group; all assigned based on the location of the clients and assets, respectively, as of December 31, 2023, 2022 and 2021: |
| 2023 | 2022 | 2021 | ||||||||||||||||||||||
|
Total income (*) |
Operate Income (**) | Total current non assets(***) | Total, liabilities |
Total income (*) |
Operate Income (**) | Total current non assets(***) | Total, liabilities |
Total income (*) |
Operate Income (**) | Total current non assets (***) | Total liabilities | |||||||||||||
| Perú | 17,279 | 11,922 | 4,648 | 180,268 | 14,053 | 10,430 | 4,325 | 179,855 | 17,330 | 8,682 | 3,773 | 188,505 | ||||||||||||
| Bermudas | 5,394 | (45) | - | 2,086 | 5,151 | (28) | 134 | 2,123 | 18 | (17) | 134 | 2,174 | ||||||||||||
| Panamá | 384 | 174 | 31 | 5,580 | 295 | 105 | 3 | 8,384 | 309 | 103 | 30 | 10,389 | ||||||||||||
| Cayman Islands | 502 | 358 | - | 154 | 72 | 72 | - | 139 | 17 | - | - | 88 | ||||||||||||
| Bolivia | 1,082 | 328 | 122 | 12,784 | 960 | 377 | 113 | 11,885 | 978 | 373 | 121 | 13,012 | ||||||||||||
| Colombia | 855 | 199 | 193 | 4,060 | 193 | 132 | 22 | 2,283 | 601 | 213 | 415 | 2,610 | ||||||||||||
| United States of America | 29 | - | 14 | 19 | 8 | - | 5 | 15 | 33 | 1 | 1 | 5 | ||||||||||||
| Chile | 129 | 2 | 75 | 778 | 187 | 4 | 119 | 1,132 | 166 | 1 | 131 | 1,026 | ||||||||||||
| Others | 11 | - | - | 4 | - | - | 3 | 3 | - | - | - | - | ||||||||||||
| Total consolidated | 25,665 | 12,938 | 5,083 | 205,733 | 20,919 | 11,092 | 4,724 | 205,819 | 19,452 | 9,356 | 4,605 | 217,809 | ||||||||||||
| (*) | Including total interest and similar income, other income and net premiums earned from insurance activities. |
| (**) | Operating income includes the income from interest and similar expenses from banking activities and insurance underwriting result. |
| (***) | Non-current assets consist of property, furniture and equipment (fixed assets), intangible assets and goodwill and right-for-use assets, net. |
| 28 | TRANSACTIONS AND BALANCES WITH RELATED PARTIES |
| a) | The Group’s consolidated financial statements as of December 31, 2023 and 2022 include transactions with related companies, the Board of Directors, the Group’s key executives (defined as the Management of Credicorp) and the companies which are controlled by these individuals through their majority shareholding or their role as Chairman or CEO. |
| b) |
The following table presents the main transactions and balances with related parties and individuals as of December 31, 2023 and 2022: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Statement of financial position - | ||||||||
| Direct loans | 2,063,739 | 1,804,837 | ||||||
| Investments (i) | 806,700 | 800,021 | ||||||
| Deposits (ii) | (713,503 | ) | (1,138,115 | ) | ||||
| Derivatives at fair value | 516,292 | 336,867 |
| (i) |
As of December 31, 2023, the balance includes mainly S/166.8 million of corporate bonds, S/146.5 million of Alicorp S.A.A. shares; S/135.9 million of Inversiones Centenario shares and S/120.5 million of corporate bonds issued by Corporación Primax. The increase in the balance corresponds mainly to the fluctuation that positively affected the investments in corporate bonds of Alicorp S.A. and Corporación Primax. |
|
As of December 31, 2022, the balance includes mainly S/158.1 million of corporate bonds, S/157.0 million of Alicorp S.A.A. shares; S/155.3 million of corporate bonds issued by Cementos Pacasmayo S.A. and S/126.8 million of Inversiones Centenario shares. |
| (ii) | Corresponds to deposits from legal entities and individuals. As of December 31, 2023 and 2022, the balance corresponds mainly to higher deposits held by companies and related persons. |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Statement of income | ||||||||
| Interest income related to loans | 31,892 | 38,896 | ||||||
| Interest expenses related to deposits | (30,914 | ) | (24,143 | ) | ||||
| Other income | 9,452 | 13,232 | ||||||
| Contingent risks and commitments | ||||||||
| Indirect loans | 584,463 | 433,639 | ||||||
| c) | All transactions with related parties are made in accordance with normal market conditions available to other customers. As of December 31, 2023, direct loans to related companies are secured by collateral, had maturities between January 2024 and August 2030, at an annual soles average interest rate of 7.70 percent and at an annual foreign currency average interest rate of 6.04 percent (as of December 31, 2022, maturities between January 2023 an June 2029, at an annual soles average interest rate of 6.86 percent and at an annual foreign currency average interest rate of 4.59 percent). Also, as of December 31, 2023 and December 31, 2022, the Group maintains an allowance for loan losses for related parties amounting to S/15.2 million and S/8.5 million, respectively. |
| d) | As of December 31, 2023 and 2022, directors, officers and employees of the Group have been involved, directly and indirectly, in credit transactions with certain subsidiaries of the Group, as permitted by Peruvian Banking and Insurance Law Nº26702, which regulates and limits certain transactions with employees, directors and officers of a bank or an insurance company. As of December 31, 2023 and 2022, direct loans to employees, directors, key management and family members amounted to S/1,383.3 million and S/1,179.2 million, respectively; they are repaid monthly and earn interest at market rates. |
| e) | The Group’s key executives’ compensation (including the related income taxes assumed by the Group) as of December 31, 2023 and 2022 was as follows: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Director’s compensation | 7,387 | 7,850 | ||||||
| Senior Management Compensation: | ||||||||
| Remuneration | 49,573 | 40,201 | ||||||
| Stock awards vested | 21,444 | 28,450 | ||||||
| Total | 78,404 | 76,501 | ||||||
| f) | As of December 31, 2023 and 2022 the Group holds interests in various funds managed by certain of the Group’s subsidiaries. The details of the funds are presented below: |
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| At fair value through profit or loss: | ||||||||
| Mutual funds, investment funds and hedge funds | ||||||||
| U.S. Dollars (i) | 516,834 | 626,404 | ||||||
| Bolivianos | 179,131 | 163,701 | ||||||
| Colombian pesos | 170,769 | 70,987 | ||||||
| Soles(ii) | 108,830 | 76,535 | ||||||
| Chilean pesos | 7,198 | 5,735 | ||||||
| Total | 982,762 | 943,362 | ||||||
| Restricted mutual funds, note 6(a)(iv) | 334,162 | 351,317 | ||||||
| 29 | FINANCIAL INSTRUMENTS CLASSIFICATION |
The table below shows the carrying amounts of the financial assets and liabilities captions in the consolidated statement of financial position, by categories as defined under IFRS 9 as of December 31,2023 and 2022:
| 2023 | 2022 | |||||||||||||||||||||||
|
Financial assets and liabilities at fair value through profit or loss |
Financial assets at fair value through other comprehensive income |
|
Financial assets and liabilities at fair value through profit or loss |
Financial assets at fair value through other comprehensive income |
|
|||||||||||||||||||
|
Investments derivates |
Investments designated at inception |
Investments |
Investments designated at inception |
Financial
assets and liabilities measured at amortized cost |
Total |
Investments and derivates |
Investments designated at inception |
Investments |
Investments designated at inception |
Financial assets and liabilities measured at amortized cost |
Total | |||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||
| Assets | ||||||||||||||||||||||||
| Cash and due from banks | — | — | — | — | 33,930,948 | 33,930,948 | — | — | — | — | 34,183,840 | 34,183,840 | ||||||||||||
| Cash collateral, reverse repurchase agreements and securities borrowings | — | — | — | — | 1,410,647 | 1,410,647 | — | — | — | — | 1,101,856 | 1,101,856 | ||||||||||||
| At fair value through profit or loss | 4,982,661 | — | — | — | — | 4,982,661 | 4,199,334 | — | — | — | — | 4,199,334 | ||||||||||||
| Investments at fair value through other comprehensive income, Note 6(b) | — | — | 36,709,138 | 334,802 | — | 37,043,940 | — | — | 30,449,806 | 336,355 | — | 30,786,161 | ||||||||||||
| Amortized cost investments | — | — | — | — | 10,188,927 | 10,188,927 | — | — | — | — | 10,445,729 | 10,445,729 | ||||||||||||
| Loans, net | — | — | — | — | 136,698,135 | 136,698,135 | — | — | — | — | 140,753,972 | 140,753,972 | ||||||||||||
| Financial assets designated at fair value through profit or loss | — | 810,932 | — | — | — | 810,932 | — | 768,801 | — | — | — | 768,801 | ||||||||||||
| Due from customers on banker’s acceptances | — | — | — | — | 412,401 | 412,401 | — | — | — | — | 699,678 | 699,678 | ||||||||||||
| Other assets, Note 12(a) | 987,663 | — | — | — | 2,072,603 | 3,060,266 | 1,478,726 | — | — | — | 1,747,412 | 3,226,138 | ||||||||||||
| 5,970,324 | 810,932 | 36,709,138 | 334,802 | 184,713,661 | 228,538,857 | 5,678,060 | 768,801 | 30,449,806 | 336,355 | 188,932,487 | 226,165,509 | |||||||||||||
| Liabilities | ||||||||||||||||||||||||
| Deposits and obligations | — | — | — | — | 147,704,994 | 147,704,994 | — | — | — | — | 147,020,787 | 147,020,787 | ||||||||||||
| Payables from repurchase agreements and securities lending | — | — | — | — | 10,168,427 | 10,168,427 | — | — | — | — | 12,966,725 | 12,966,725 | ||||||||||||
| Due to banks and correspondents | — | — | — | — | 12,278,681 | 12,278,681 | — | — | — | — | 8,937,411 | 8,937,411 | ||||||||||||
| Due from customers on banker’s acceptances | — | — | — | — | 412,401 | 412,401 | — | — | — | — | 699,678 | 699,678 | ||||||||||||
| Lease liabilities | — | — | — | — | 512,579 | 512,579 | — | — | — | — | 578,074 | 578,074 | ||||||||||||
| Financial liabilities at fair value through profit or loss | 641,915 | — | — | — | — | 641,915 | 191,010 | — | — | — | — | 191,010 | ||||||||||||
| Bonds and notes issued | — | — | — | — | 14,594,785 | 14,594,785 | — | — | — | — | 17,007,194 | 17,007,194 | ||||||||||||
| Other liabilities, Note 12(a) | 891,999 | — | — | — | 4,586,511 | 5,478,510 | 1,345,665 | — | — | — | 3,964,203 | 5,309,868 | ||||||||||||
| 1,533,914 | — | — | — | 190,258,378 | 191,792,292 | 1,536,675 | — | — | — | 191,174,072 | 192,710,747 | |||||||||||||
| 30 | FINANCIAL AND NON-FINANCIAL RISK MANAGEMENT |
The Group’s activities involve principally the use of financial instruments, including derivatives. It also accepts deposits from customers at both fixed and floating rates, for various periods, and invests these funds in high-quality assets. Additionally, it places these deposits at fixed and variable rates with legal entities and individuals, considering the finance costs and expected profitability.
The Group also trades in financial instruments where it takes positions in traded and over-the-counter instruments, derivatives included, to take advantage of short term market movements on securities, bonds, currencies and interest rates.
Given the Group’s activities, it has a framework for risk appetite, a corner stone of the management.
The risk management processes involve continuous identification, measurement, treatment and monitoring. The Group is exposed, principally, to operating risk, credit risk, liquidity risk, market risk, strategic risk and insurance technical risk. Finally, it reports on a consolidated basis the risks to which the Group is exposed.
| a) | Risk management structure - |
The Board of Directors of the Group and of each subsidiary are ultimately responsible for identifying and controlling risks; however, there are separate independent instances in the major subsidiaries responsible for managing and monitoring risks, as further explained below:
| (i) | Group’s Board of Directors - |
Credicorp Board of Directors –
The Credicorp Board of Directors is responsible for the overall approach to risk management of Credicorp Ltd., including the approval of its appetite for risk.
Likewise; take knowledge of the level of compliance of the appetite and the level of risk exposure, as well as the relevant improvements in the integral risk management of Grupo Crédito and Subsidiaries of Credicorp (Group).
Grupo Crédito’s Board of Directors –
Grupo Crédito’s Board of Directors is responsible for the general approach to risk management of the Group’s subsidiaries and the approval of the risk appetite levels that it is willing to assume. Furthermore, it approves the guidelines and policies for Integral Risk Management, promotes an organizational culture that emphasizes the importance of risk management, oversees the internal control system and ensures the adequate performance of the Group’s regulatory compliance function.
Group Company Boards -
The Board of each company of the Group is responsible for aligning the risk management established by the Board of Grupo Crédito with the context of each one of them. For that, it establishes a framework for risk appetite, policies and guidelines.
| (ii) | Credicorp Risk Committee - |
Represents the Credicorp Board of Directors, proposes the levels of risk appetite for Credicorp Ltd. Also, it is aware of the level of compliance of the risk appetite and the level of exposure assumed by Grupo Crédito and Credicorp subsidiaries and the relevant improvements in integral management of risks of said entities.
The Committee will be made up of no less than three directors of Credicorp, at least one of which must be independent. Additionally, the Board of Directors may incorporate as a member one or more directors of Credicorp subsidiaries. Likewise, the coordinator of the Committee will be the Credicorp Risk Manager, with the Internal Audit Manager as an observer member (without voice or vote). Finally, the following officials will attend the sessions as guests, according to the agenda of topics to be discussed and at the invitation of the Coordinator: General Manager, Finance Manager, Manager of the Risk Management Division of BCP, and all those people who criteria assist with the development of the session.
| (iii) | Grupo Crédito Risk Committee - |
Represents the Board of Grupo Crédito in risk management decision-making. Furthermore, proposes to Grupo Crédito’s Board of Directors the levels of risk appetite. This Committee defines the strategies used for the adequate management of the different types of risks and the supervision of risk appetite. In addition to it, they established principles, policies, and general limits to the Group.
The Risk Committee is presided by no less than three Board members of Grupo Crédito, at least one of which must be independent. Additionally, the Board of Directors may incorporate as a member one or more directors of the Group. Likewise, the coordinator of the Committee will be the Grupo Crédito Risk Manager, with the Internal Audit Manager as an observer member (without voice or vote). Finally, the following officials will attend the sessions as guests, according to the agenda of topics to be discussed and at the invitation of the Coordinator: General Manager, Finance Manager, Manager of the Risk Management Division of BCP, and all those people who criteria assist with the development of the session.
In addition to effectively managing all the risks, the Grupo Crédito Risk Committee is supported by the following committees which report periodically on all relevant changes or issues relating to the risks being managed:
Corporate credit Risk Committees (retail and non-retail)-
The Corporate credit Risk Committees (retail and non-retail) are responsible for reviewing the tolerance level of the credit risk appetite, the limits of exposure and the actions for the implementation of corrective measures, in case there are deviations. In addition, they propose credit risk management norms and policies within the framework of governance and the organization for the integral management of credit risk. Furthermore, they propose the approval of any changes to the functions described above and important findings to the Grupo Crédito Risk Committee.
Corporate Committee for Market, Structural, Trading and Liquidity Risks
The Corporate Committee for Market, Structural, Trading and Liquidity Risks is in charge of analyzing and proposing corporate objectives, guidelines and policies for the Management of Market and Liquidity Risks of the Group and the Group’s companies. As well as, monitor the indicators and limits of the market risk appetite and liquidity of the Group and of each one of the companies of the Group. Likewise, it is responsible for escalating managerial decisions above its authority to the Risk Committee of Grupo Crédito.
Corporate Model Risk Committee –
The Corporate Model Risk Committee is responsible for analyzing and proposing the actions corrections in case there are deviations with respect to the degrees of exposure assumed in the Appetite for Model Risk. Likewise, it proposes the creation and/or modification of the government for model risk management, monitoring compliance with the same. The Model Risk Committee monitors the Group’s data and analytical strategy and the health status of the model portfolio. They are also responsible to inform the Committee of Grupo Crédito Risks on exposures, related to model risk, which involve variations in the risk profile.
Corporate Operational Risk Methodology Committee -
The Corporate Methodological Committee of Operational Risk has as main responsibilities to review the main indicators of Operational Risk of the companies of the Group, as well as the progress of the methodologies deployed for Operational Risk and Business Continuity. Likewise, share best practices regarding the main challenges faced by Group companies.
| (iv) | Central Risk Management of Credicorp - |
The Central Risk Management of Credicorp informs the Credicorp Risk Committee of the level of compliance of the risk appetite and the level of exposure assumed by Grupo Crédito and Credicorp subsidiaries. Likewise, it reports the relevant improvements in the integral risk management of Grupo Crédito and Credicorp subsidiaries. In addition, it proposes to the Credicorp Risk Committee the risk appetite levels for Credicorp Ltd.
| (v) | Central Risk Management of Grupo Crédito - |
The Central Risk Management is responsible for the implementation of policies, procedures, methodologies and the actions to be taken to identify, measure, monitor, mitigate, report and control the different types of risks to which the Group is exposed. In addition, it is responsible for participating in the design and definition of the strategic plans of the business units to ensure that they are aligned within the risk parameters approved by the Grupo Crédito Board of Directors. Likewise, it disseminates the importance of adequate risk management, specifying in each of the units, the role that corresponds to them in the timely identification and definition of the corresponding actions.
The units of the Central Risk Management that manage risk at the corporate level are the following:
Credit Division -
The Credit Division proposes credit policies and evaluation criteria and credit risk management that the Group assumes with segment customers wholesaler. Evaluate and authorize loan proposals until their autonomy and propose their approval to the higher instances for those that exceed it. These guidelines are established on the basis of the policies set by the Grupo Crédito Board, respecting the laws and regulations in force. In addition, it assesses the evolution of the risk of wholesale clients and identifies problematic situations, taking actions to mitigate or resolve them.
Risk Management Division -
The Risk Management Division is responsible for ensuring that risk management directives and policies comply with the established by the Board of Directors. In addition, it is responsible for supervising the process of risk management and for coordinating with the companies of Credicorp involved in the whole process, promoting homogeneous risk management and aligned with the best practices. It also has the task of informing Board of Directors regarding: global exposure and by type of risk, as well as the specific exposure of each Group company.
Retail Banking Risk Division -
The Retail Banking Risk Division is responsible for managing the risk profile of the retail portfolio and developing credit policies that are in accordance with the guidelines and risk levels established by Grupo Crédito’s Board of Directors. Likewise, it participates in the definition of products and campaigns aligned to these policies, as well as in the design, optimization and integration of credit evaluation tools and income estimation for credit management. Likewise, there is an active and recurring participation of the BCP Retail Banking Risk Division in the Credit Risk and Collections Committee of Mibanco and in the BCB Retail Banking Risk Committee to ensure alignment of best practices in terms of policies and guidelines. credit ratings, risk segmentation and credit risk models.
Non-financial Risks Division -
The Non-financial Risks Division is responsible for defining a non-financial risks strategy aligned with the objectives and risk appetite set by the Board of Grupo Crédito. This strategy seeks to strengthen the management process, generate synergies, optimize resources and achieve better results among the units responsible for managing non-financial risks in the Group. Additionally, in order to achieve the objectives defined in the non-financial risk strategy, the Division is responsible for promoting risk culture, developing talent, defining indicators and generating and following-up strategic projects and initiatives.
| (vi) | Internal Audit Division and Corporate Ethics and Compliance Division - |
The Internal Audit Division is in charge of monitoring on an ongoing basis the effectiveness and efficiency of the risk management function in the Group, verifying compliance with regulations, policies, objectives and guidelines set by the Board of Directors. On the other hand, it evaluates sufficiency and integration level of Group’s information and database systems. Finally, it ensures that independence is maintained between the functions of the risk management and business units, for each of the Group’s companies.
The Corporate Compliance and Ethics Division reports to the Board of Directors and is responsible for providing corporate policies to ensure that Group companies specifically comply with regulations that specified them, and the guidelines established in the Code of Ethics.
| b) | Risk measurement and reporting systems - |
The risk is measured according to models and methodologies developed for the management of each type of risk. Risk reports that allow to monitor at the level added and detailed the different types of risks of each company which is exposed. The system provides the facility to meet the appetite review needs by risk requested by the committees and areas described above; as well as comply with regulatory requirements.
| c) | Risk mitigation - |
Depending on the type of risk, mitigating instruments are used to reduce its exposure, such as guarantees, derivatives, controls and insurance, among others. Furthermore, it has policies linked to risk appetite and established procedures for each type of risk.
The Group actively uses guarantees to reduce its credit risks.
| d) | Risk appetite - |
Based on corporate risk management, Grupo Crédito’s Board of Directors approves the risk appetite framework to define the maximum level of risk that the organization is willing to take as seeks its strategic and financial objectives, maintaining a corporate vision in individual decisions of each entity. This Risk Appetite framework is based on “core” and specific metrics:
Core metrics are intended to preserve the organization’s strategic pillars, defined as solvency, liquidity, profit and growth, income stability and balance sheet structure and cybersecurity risks.
Specific metrics objectives are intended to monitor on a qualitative and quantitative basis the various risks, to which the Group is exposed, as well as defining a tolerance threshold of each of those risks, so the risk profile set by the Board is preserved and any risk focus is anticipated on a more granular basis.
Risk appetite is instrumented through the following elements:
| - | Risk appetite statement: Establishes explicit general principles and the qualitative declarations | |
| which complement the risk strategy. | ||
| - | Metrics scorecards: These are used to define the levels of risk exposure in the different | |
| strategic pillars. | ||
| - | Limits: Allows control over the risk-taking process within the tolerance threshold established by | |
| the Board. They also provide accountability for the risk-taking process and define guidelines | ||
| regarding the target risk profile. | ||
| - | Government scheme: Seeks to guarantee compliance of the framework through different roles | |
| and responsibilities assigned to the units involved. |
The appetite is integrated into the processes of strategic and capital guidelines, as well as in the definition of the annual budget, facilitating the strategic decision making of the organization.
| e) | Risk concentration - |
Concentrations arise when a reduced and representative number of all of the counterparties of the Group are engaged in similar business activities, or activities in the same geographic region, or have similar economic and political conditions among others.
In order to avoid excessive concentrations of risk, the policies and procedures include specific guidelines and limits to guarantee a diversified portfolio.
| 30.1 | Credit risk - |
| a) | The Group takes on exposure to credit risk, which is the probability of suffering losses caused by debtors or counterparties failing to comply with payment obligations in on or off the balance sheet exposures. |
Credit risk is the most important risk for the Group’s business; therefore, Management carefully manages its exposure to credit risk. Credit exposures arise principally from lending activities that lead to direct loans; they also result from investment activities. There is also credit risk in off-balance sheet financial instruments, such as contingent credits (indirect loans), which expose Credicorp to risks similar to direct loans. Likewise, credit risk arises from derivative financial instruments that present showing positive fair values. Finally, all exposure to credit risk (direct or indirect) is mitigated by the control processes and policies.
As part of managing this type of risk, provisions for impairment of its portfolio are assigned as of the date of the statement of financial position.
Credit risk levels are defined based on risk exposure limits, which are frequently monitored. Said limits are established in relation to one borrower or group of borrowers, geographical and industry segments. Furthermore, the risk limits by product, industry sector and by geographical segment are approved by the Risk Committee of Credicorp.
Exposure to credit risk is managed through regular analysis of the ability of debtors and potential debtors to meet interest and principal repayment obligations and by changing the credit limits when it is appropriate. Other specific control measures are outlined below:
| (i) | Collateral - |
The Group employs a range of policies and practices to mitigate credit risk. The most traditional of these is collateralization which is common practice. The Group implements guidelines on the acceptability of specific classes of collateral or credit risk mitigation. The main types of collateral obtained are as follows:
| - | For loans and advances, collateral includes, among others, mortgages on residential properties; liens on business assets such as plants, inventory and accounts receivable; and liens on financial instruments such as debt securities and equity securities. |
| - | For repurchase agreements and securities lending, collateral consists of fixed income instruments, cash and loans. |
| - | Long term loans and financing to corporate entities are generally guaranteed. Loans to micro business generally have no collateral. In order to minimize credit loss, the Group will seek additional collateral from the counterparty as soon as impairment indicators arise. |
Collateral held as security for financial assets other than loans is determined by the nature of the instrument. Debt securities, treasury and other eligible bills are generally unsecured, with the exception of assets backed securities and similar instruments, which are secured by portfolios of financial instruments.
Management monitors the market value of collateral, requests additional collateral in accordance with the underlying agreement, and monitors the market value of collateral obtained during its review of the adequacy of the allowance for impairment losses. As part of the Group’s policies, the recovered assets are sold in seniority order. The proceeds of the sale are used to reduce or amortize the outstanding debt. In general, the Group doesn’t use recovered assets for its operational purposes.
| (ii) | Derivatives - |
The amount subject to credit risk is limited to the current and potential fair value of instruments that are favorable to the Group (fair value is positive). In the case of derivatives this is only a small fraction of the contract, or notional values used to express the volume of instruments outstanding. This credit risk exposure is managed as a portion of the total credit limits with customers, together with potential exposures from market movements.
| (iii) | Credit-related commitments - |
The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and letters of credit have the same credit risk as direct loans. Documentary and commercial letters of credit - which are written undertakings by the Group on behalf of a customer authorizing a third party to draw drafts on the Group up to a stipulated amount under specific terms and conditions - are collateralized by the underlying shipments of goods to which they relate and therefore have less risk than a direct loan. The Group has no mandatory commitments to extend credit.
| b) | The maximum exposure to credit risk as of December 31, 2023 and 2022, before the effect of mitigation through any collateral, is the carrying amount of each class of financial assets indicated in Notes 30.11(a), 30.11(b) and the contingent credits detailed in Note 18(a). |
| c) | Credit risk management for loans - |
Credit risk management is mainly based on the rating and scoring internal models of each company of the Group. In Credicorp, quantitative and qualitative analysis are made for each client, regarding their financial position, credit behavior in the financial system and the market in which they operate or are located. This analysis is carried out continuously to characterize the risk profile of each operation and client with a loan position in the Group.
In the Group, a loan is internally classified as past due according to three criteria: the number of days past due based on the contractually agreed due date, the subsidiary and the type of loan. The detail is shown below:
| - | Banco de Crédito del Perú, Mibanco y Solución Empresa Administradora Hipotecaria internally classify a loan as past due |
| - | For corporate, large and medium companies, when it has more than 15 days in arrears. |
| - | For small and microbusiness when it has more than 30 days in arrears. |
| - | For overdrafts when it has more than 30 days in arrears. |
| - | For consumer, mortgage and leasing operations, installments are internally classified as past due when they are between 30 and 90 days in arrears; after 90 days, the pending loan balance is considered past due. |
| - | Mibanco Colombia internally classifies a loan as past due: |
| - | For commercial loans when it has more than 90 days in arrears. |
| - | For microbusiness loans when it has more than 60 days in arrears. |
| - | For consumer loans when it has more than 60 days in arrears. |
| - | For mortgage loans when it has more than 30 days in arrears. |
| - | ASB Bank Corp. internally classifies a loan as past due when it has 1 or more days in arrears. |
| - | Banco de Crédito de Bolivia internally classifies a loan as past due when it has 30 or more days in arrears. |
Estimate of the expected credit loss -
The measurement of the expected credit loss is based on the product of the following risk parameters: (i) probability of default (PD), (ii) loss given default (LGD), and (iii) exposure at default (EAD); discounted at the reporting date using the effective interest rate. The definition of the parameters is presented below:
| - | Probability of default (PD): is a credit rating measure that is given internally to a client with the objective of estimating its probability of default within a specific time horizon. The process of obtaining the PD is carried out considering three main components: (i) the risk observed at the portfolio level, (ii) the macroeconomic perspectives of the main countries where Credicorp operates and (iii) the individual risk of each loan, which It is measured through rating and scoring tools. |
The Group considers that a financial instrument is in default if it meets the following conditions, according to the type of asset:
| - | Consumer products, credit card and SME: if the client, at some certain point, presents arrears equal to or greater than 60 days and/or has operations that are refinanced, restructured, in pre-judicial, judicial proceedings or written off. |
| - | Mortgage products: if the client, at some certain point, presents arrears equal to or greater than 120 days and/or has operations that are refinanced, restructured, in pre-judicial, judicial proceedings or written off. |
| - | Commercial banking: if the client, at some certain point, is in the Collections portfolio, or has a risk classification of Deficient, Doubtful or Loss, or has operations that are refinanced, in pre-judicial, judicial proceedings or written off. Also, a client can be considered as default if it shows signs of significant qualitative impairment. It should be noted that, for commercial clients with the highest loan position that are classified in default, the Risk Management performs an individual review to determine the expected credit loss in each case, in which it considers: (i) knowledge of the specific situation of the client, (ii) the coverage of real guarantees, (iii) the financial information available of the company, (iv) the conditions of the sector in which the company operates, (v) among others. |
| - | Investments: if the instrument has a default rating according to external rating agencies such as Fitch, Standard & Poors or Moody’s, or if it has an indicator of arrears equal to or greater than 90 days. In addition, an issuer can be considered as default if it shows signs of significant qualitative impairment. When an issuer is classified as default, all its instruments are also classified as default, that is, in stage 3. |
| - | Loss given default (LGD): this is a measurement which estimates the severity of the loss that would be incurred at the time of the default. It has two approaches in the estimate of the severity of the loss, according to the stage of the client: |
| - | LGD workout: is the real loss of clients who reached the default stage. To calculate this parameter, the recoveries and costs of each of the operations are included (includes open and closed recovery processes). |
| - | LGD ELBE (expected loss best estimate): s the loss of contracts in a situation of default based on the time in default of the operation (the longer the time in default, the higher the level of loss of the operation). |
| - | Exposure at default (EAD): this is a measurement which estimates the exposure at the time of the client’s default, considering changes in future exposure, for example, in the case of prepayments and/or greater utilization of unused credit lines. |
The estimate of the risk parameters considers information regarding the actual conditions, as well as the projections of future macroeconomic events and conditions in three scenarios (base, optimistic and pessimistic), which are weighted to obtain the expected credit loss.
The fundamental difference between the expected credit loss of a loan allocated in stage 1 and stage 2 is the PD’s time horizon. The estimates in stage 1 use a PD with a maximum time horizon of 12 months, while those in stage 2 use a PD measured for the remaining lifetime of the instrument. The estimates in stage 3 are carried out based on an LGD “best estimate”.
For those portfolios that are not material and/or do not have specific credit scoring models, the option was to extrapolate the expected credit loss ratio of portfolios with comparable characteristics.
The main methodological calibrations made in the internal credit risk models during 2023 were:
| - | PD models: in accordance with our internal governance scheme, throughout 2023 we continue to monitor the performance of the PD models and implement the necessary calibrations to maintain an adequate measurement of the credit risk of our loan portfolio. In this sense, in the first half of 2023, a new version of the PD FWL parameter was implemented for the estimation of expected credit loss of the SME portfolio, in which the GDP variable was added to better capture the impact of the macroeconomics condition. |
| - | LGD models: In accordance with our internal governance scheme, throughout 2023 we continue to monitor the performance of LGD models and implement the necessary calibrations to maintain an adequate measurement of the credit risk of our loan portfolio. In this sense, in the fourth quarter of 2023, a new version of the LGD parameter was implemented for the estimation of the expected credit loss of the Hipotecario portfolio, which allowed the Government’s coverage of the Mivivienda program loans to be recognized in a more precise way. |
| - | On an extraordinary basis, the expected impact of the El Niño phenomenon on the credit risk of the Group’s loan portfolio was measured, focusing the analysis on the geographic areas with the greatest potential impact, and the additional provisions associated with this event were recorded. |
Prospective information -
The measurement of the expected credit loss for each stage and the evaluation of significant increase in credit risk consider information on previous events and current conditions, as well as reasonable projections based on future events and economic conditions.
For the estimate of the risk parameters (PD, LGD, EAD), used in the calculation of the expected credit loss in stages 1 and 2, the significance of the macroeconomic variables (or their variations) that have the greatest influence on each portfolio which provide a better prospective and systemic vision to the estimate, based on econometric techniques. Each macroeconomic scenario used in the estimate of the expected credit loss considers projections of relevant macroeconomic variables, such as the gross domestic product (GDP), employment, terms of trade, inflation rate, among others, for a period of 3 years and a long-term projection.
The expected credit loss is a weighted estimate that considers three future macroeconomic scenarios (baseline, optimistic, pessimistic). These scenarios, as well as the probability of occurrence of each one, are projections provided by the internal Economic Studies team and are approved by Senior Management; These projections are made for the main countries where Credicorp operates. The design of the scenarios is reviewed quarterly. All scenarios considered apply to portfolios subject to expected credit loss with the same probabilities.
Changes from one stage to another -
The classification of an instrument as stage 1 or stage 2 depends on the concept of “significant increase in credit risk” at the reporting date compared to the origin date. This classification is updated monthly. As the IFRS 9 states, this classification depends on the following criteria:
| - | An account is classified in stage 2 if it has more than 30 days in arrears. |
| - | Additionally, significant risk thresholds were established based on absolute and relative thresholds that depend on the risk level in which the instrument was originated. The thresholds differ for each of the portfolios considered. |
| - | Additional qualitative reviews are carried out based on the risk segmentation used in the management of Retail Banking and an individual review is carried out in Wholesale Banking. |
Additionally, all those accounts classified as default at the reporting date, according to the definition used by the Group, are considered as stage 3.
Evaluations of significant increase in credit risk from initial recognition and credit impairment are carried out independently on each reporting date.
Wholesale Banking assets can be moved in both directions from one stage to another; in this sense, a financial asset that migrated to stage 2 will return to stage 1 if its credit risk did not increase significantly from its initial recognition until a subsequent reporting period. Likewise, an asset that is in stage 3 will return to stage 2 if the asset is no longer considered to be impaired (according to our definition of default) for a certain number of subsequent reporting periods.
On the other hand, Retail Banking assets that migrated to stage 2 will return to stage 1 if their credit risk has not increased significantly since their initial recognition during a certain number of subsequent reporting periods (cure period). In the case of assets housed in stage 3, these will not return to stage 2 except for refinanced loans, which will return to stage 2 if good payment behavior is demonstrated during a certain number of subsequent reporting periods.
Expected life -
For the instruments in stage 2 or 3, the allowance for loan losses will cover the expected credit loss during the expected time of the remaining lifetime of the instrument. For most instruments, the expected life is limited to the remaining contractual life, adjusted by expected prepayments. In the case of revolving products, a statistical analysis was carried out to determine what would be the expected life period.
The following is a summary of the direct credits (without interest) classified into three important groups and their respective allowance for loan losses for each type of loan; it is important to note that impaired loans are loans in default that are in stage 3. Additionally, it should be noted that, in accordance with IFRS 7, the total balance of the loan is considered overdue when the debtor has failed to make a payment at its contractual maturity.
| (i) | Loans neither past due nor impaired, which comprise those direct loans which currently do not have characteristics of delinquency and which are not in default. |
| (ii) | Past due but not impaired loans, which comprise all of the direct loans of customers who are not in default but have failed to make a payment at its contractual maturity, according to IFRS 7. |
| (iii) | Impaired loans, those direct loans considered to be in stage 3 or default, as detailed in note 30.1(c). |
| 2023 | 2022 | |||||||||||||||||||||||||||||||
| Commercial loans | Fase 1 | Fase 2 | Fase 3 | Total | Fase 1 | Fase 2 | Fase 3 | Total | ||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||||
| Neither past due nor impaired | 65,012,679 | 4,076,777 | – | 69,089,456 | 66,885,472 | 6,848,298 | – | 73,733,770 | ||||||||||||||||||||||||
| Past due but not impaired | 937,720 | 693,084 | – | 1,630,804 | 804,155 | 691,215 | – | 1,495,370 | ||||||||||||||||||||||||
| Impaired | – | – | 6,100,142 | 6,100,142 | – | – | 6,439,760 | 6,439,760 | ||||||||||||||||||||||||
| Gross | 65,950,399 | 4,769,861 | 6,100,142 | 76,820,402 | 67,689,627 | 7,539,513 | 6,439,760 | 81,668,900 | ||||||||||||||||||||||||
| Less: Allowance for loan losses | 489,706 | 394,868 | 2,330,978 | 3,215,552 | 503,651 | 489,381 | 2,260,569 | 3,253,601 | ||||||||||||||||||||||||
| Total, net | 65,460,693 | 4,374,993 | 3,769,164 | 73,604,850 | 67,185,976 | 7,050,132 | 4,179,191 | 78,415,299 | ||||||||||||||||||||||||
| Residential mortgage loans | Fase 1 | Fase 2 | Fase 3 | Total | Fase 1 | Fase 2 | Fase 3 | Total | ||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||||
| Neither past due nor impaired | 18,590,193 | 2,952,908 | – | 21,543,101 | 18,213,711 | 2,747,557 | – | 20,961,268 | ||||||||||||||||||||||||
| Past due but not impaired | 559,877 | 605,193 | – | 1,165,070 | 426,722 | 459,525 | – | 886,247 | ||||||||||||||||||||||||
| Impaired | – | – | 1,468,747 | 1,468,747 | – | – | 1,388,060 | 1,388,060 | ||||||||||||||||||||||||
| Gross | 19,150,070 | 3,558,101 | 1,468,747 | 24,176,918 | 18,640,433 | 3,207,082 | 1,388,060 | 23,235,575 | ||||||||||||||||||||||||
| Less: Allowance for loan losses | 54,102 | 121,257 | 785,261 | 960,620 | 83,536 | 126,834 | 757,778 | 968,148 | ||||||||||||||||||||||||
| Total, net | 19,095,968 | 3,436,844 | 683,486 | 23,216,298 | 18,556,897 | 3,080,248 | 630,282 | 22,267,427 | ||||||||||||||||||||||||
| Microbusiness loans | Fase 1 | Fase 2 | Fase 3 | Total | Fase 1 | Fase 2 | Fase 3 | Total | ||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||||
| Neither past due nor impaired | 15,728,517 | 3,862,859 | – | 19,591,376 | 13,128,339 | 6,452,839 | – | 19,581,178 | ||||||||||||||||||||||||
| Past due but not impaired | 264,477 | 767,325 | – | 1,031,802 | 236,253 | 813,423 | – | 1,049,676 | ||||||||||||||||||||||||
| Impaired | – | – | 1,802,572 | 1,802,572 | – | – | 1,741,439 | 1,741,439 | ||||||||||||||||||||||||
| Gross | 15,992,994 | 4,630,184 | 1,802,572 | 22,425,750 | 13,364,592 | 7,266,262 | 1,741,439 | 22,372,293 | ||||||||||||||||||||||||
| Less: Allowance for loan losses | 347,783 | 431,278 | 1,288,068 | 2,067,129 | 315,837 | 540,906 | 1,113,145 | 1,969,888 | ||||||||||||||||||||||||
| Total, net | 15,645,211 | 4,198,906 | 514,504 | 20,358,621 | 13,048,755 | 6,725,356 | 628,294 | 20,402,405 | ||||||||||||||||||||||||
| Consumer loans | Fase 1 | Fase 2 | Fase 3 | Total | Fase 1 | Fase 2 | Fase 3 | Total | ||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||||
| Neither past due nor impaired | 14,934,631 | 2,827,796 | – | 17,762,427 | 15,136,571 | 3,029,538 | – | 18,166,109 | ||||||||||||||||||||||||
| Past due but not impaired | 261,414 | 489,658 | – | 751,072 | 205,944 | 442,066 | – | 648,010 | ||||||||||||||||||||||||
| Impaired | – | – | 1,546,685 | 1,546,685 | – | – | 1,099,382 | 1,099,382 | ||||||||||||||||||||||||
| Gross | 15,196,045 | 3,317,454 | 1,546,685 | 20,060,184 | 15,342,515 | 3,471,604 | 1,099,382 | 19,913,501 | ||||||||||||||||||||||||
| Less: Allowance for loan losses | 285,091 | 435,151 | 1,314,373 | 2,034,615 | 300,321 | 439,572 | 940,872 | 1,680,765 | ||||||||||||||||||||||||
| Total, net | 14,910,954 | 2,882,303 | 232,312 | 18,025,569 | 15,042,194 | 3,032,032 | 158,510 | 18,232,736 | ||||||||||||||||||||||||
| Consolidated of loans | Fase 1 | Fase 2 | Fase 3 | Total | Fase 1 | Fase 2 | Fase 3 | Total | ||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||||
| Total gross direct loans, Note 7(a) | 116,289,508 | 16,275,600 | 10,918,146 | 143,483,254 | 115,037,167 | 21,484,461 | 10,668,641 | 147,190,269 | ||||||||||||||||||||||||
| Total allowance for loan losses, Note 7(a) | 1,176,682 | 1,382,554 | 5,718,680 | 8,277,916 | 1,203,345 | 1,596,693 | 5,072,364 | 7,872,402 | ||||||||||||||||||||||||
| Total net direct loans | 115,112,826 | 14,893,046 | 5,199,466 | 135,205,338 | 113,833,822 | 19,887,768 | 5,596,277 | 139,317,867 | ||||||||||||||||||||||||
The general explanation of the variations in the allowance for loan losses is found in note 7(c).
At Credicorp, we separate renegotiated loans into two groups, focusing on operations that have suffered a significant increase in credit risk since their disbursement, which has generated modifications to the original loan agreement. Both groups are defined below:
| - | Refinanced loans: are those loans that have undergone modifications in the initial loan agreement (term and interest rate), according to the accounting definition. |
| - | Renegotiated loans due to the COVID-19 pandemic: are those loans for which, due to the pandemic, the SBS and other local regulators of the countries where Credicorp operates have established that certain benefits be granted, and that Credicorp has also voluntarily granted to its clients (grace periods, debt consolidation, etc.), which were not in the initial credit agreements. |
Below is the amount of gross portfolio balance and allowance for loan losses for Credicorp’s renegotiated loans. The presentation is made for each of the two groups defined above and by opening the balances by stage. It should be noted that for the construction of the tables, the information of the three subsidiaries that concentrate more than 95.0 percent of the balance of renegotiated loans (BCP, Mibanco and BCB) has been considered.
As of December 31, 2023 and 2022, renegotiated loans, refinanced loans and their expected loss are composed as follows:
| 2023 | 2022 | ||||||||||||||||
| Refinanced loans | Expected loss | Refinanced loans | Expected loss | ||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Stage 1 | 56,439 | 1,445 | 67,619 | 702 | |||||||||||||
| Stage 2 | 41,380 | 5,984 | 23,157 | 1,698 | |||||||||||||
| Stage 3 | 2,288,349 | 1,018,911 | 1,999,383 | 863,751 | |||||||||||||
| Total | 2,386,168 | 1,026,340 | 2,090,159 | 866,151 | |||||||||||||
| 2023 | 2022 | ||||||||||||||||
| Renegotiated loans | Expected loss | Renegotiated loans | Expected loss | ||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||
| Stage 1 | 4,093,815 | 36,800 | 5,137,915 | 60,660 | |||||||||||||
| Stage 2 | 1,536,104 | 146,087 | 2,544,631 | 211,866 | |||||||||||||
| Stage 3 | 1,366,287 | 877,839 | 2,023,938 | 1,268,559 | |||||||||||||
| Total | 6,996,206 | 1,060,726 | 9,706,484 | 1,541,085 | |||||||||||||
The detail of the gross amount of impaired direct loans by type of loan, together with the fair value of the related collateral and the amounts of its allowance for loan losses, are as follows:
| 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||
|
Commercial loans |
Residential mortgage loans |
Microbusiness loans |
Consumer loans |
Total |
Commercial loans |
Residential mortgage loans |
Microbusiness loans |
Consumer loans |
Total | ||||||||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||||||||||||||||
| Impaired loans | 6,100,142 | 1,468,747 | 1,802,572 | 1,546,685 | 10,918,146 | 6,439,760 | 1,388,060 | 1,741,439 | 1,099,382 | 10,668,641 | |||||||||||||||||||||||||||||
| Fair value of collateral | 5,013,453 | 1,257,251 | 347,343 | 370,790 | 6,988,837 | 5,646,832 | 1,204,144 | 440,715 | 279,380 | 7,571,071 | |||||||||||||||||||||||||||||
| Allowance for loan losses | 2,330,978 | 785,261 | 1,288,068 | 1,314,373 | 5,718,680 | 2,260,569 | 757,778 | 1,113,145 | 940,872 | 5,072,364 | |||||||||||||||||||||||||||||
On the other hand, the breakdown of direct loans classified by maturity is shown below, according to the following criteria:
| (i) | Current loans, which comprise those direct loans which do not currently have characteristics of delinquency, nor are they in default or stage 3, according to the rules of IFRS 9. |
| (ii) | Current but impaired loans, which comprise those direct loans which do not currently have characteristics of delinquency, but are in default or stage 3, according to IFRS 9. |
| (iii) | Loans with payment delay of one day or more but that are not past due according to our internal guidelines, which comprise those direct loans of customers who have failed to make a payment at its contractual maturity, that is, with at least one day past due. However, the days of delinquency are insufficient to be considered as past due under the Group’s internal criteria. |
| (iv) | Past due loans under internal criteria. |
The total of the following reflects all overdue loans according to IFRS 7: (i) loans with payment delays of one day or more but that are not considered overdue under internal criteria and (ii) overdue loans under internal criteria.
| 2023 | 2022 | ||||||||||||||||||||||
| Current loans | Current but impaired loans |
Loans with delays in payments of one day or more but not considered internal overdue loans |
Internal overdue loans |
Total |
Total past due under IFRS 7 |
Current loans | Current but impaired loans |
Loans with delays in payments of one day or more but not considered internal overdue loans |
Internal overdue loans |
Total |
Total past due under IFRS 7 |
||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||
| Neither past due nor impaired | 127,986,359 | – | – | – | 127,986,359 | – | 132,442,147 | – | – | 178 | 132,442,325 | 178 | |||||||||||
| Past due but not impaired | – | – | 4,067,581 | 511,167 | 4,578,748 | 4,578,747 | – | – | 3,504,999 | 574,304 | 4,079,303 | 4,079,304 | |||||||||||
| Impaired debt | – | 4,303,046 | 993,101 | 5,622,000 | 10,918,147 | 6,615,101 | – | 4,461,962 | 827,340 | 5,379,339 | 10,668,641 | 6,206,680 | |||||||||||
| Total | 127,986,359 | 4,303,046 | 5,060,682 | 6,133,167 | 143,483,254 | 11,193,848 | 132,442,147 | 4,461,962 | 4,332,339 | 5,953,821 | 147,190,269 | 10,286,161 | |||||||||||
The classification of direct loans by type of loan and type of maturity is shown below:
| 2023 | 2022 | ||||||||||||||||||
| Current loans |
Current but impaired loans |
Loans with delays in payments of one day or more but not considered internal overdue loans |
Internal overdue loans |
Total | Current loans |
Current but impaired loans |
Loans with delays in payments of one day or more but not considered internal overdue loans |
Internal overdue loans |
Total | ||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||
| Commercial loans | 69,089,495 | 2,901,367 | 1,662,457 | 3,167,083 | 76,820,402 | 73,733,752 | 3,115,029 | 1,496,743 | 3,323,376 | 81,668,900 | |||||||||
| Residential mortgage loans | 21,543,100 | 484,375 | 1,405,344 | 744,099 | 24,176,918 | 20,961,268 | 506,639 | 1,076,953 | 690,715 | 23,235,575 | |||||||||
| Microbusiness loans | 19,591,337 | 333,213 | 978,265 | 1,522,935 | 22,425,750 | 19,581,019 | 365,265 | 950,477 | 1,475,532 | 22,372,293 | |||||||||
| Consumer loans | 17,762,427 | 584,091 | 1,014,616 | 699,050 | 20,060,184 | 18,166,108 | 475,029 | 808,166 | 464,198 | 19,913,501 | |||||||||
| Total | 127,986,359 | 4,303,046 | 5,060,682 | 6,133,167 | 143,483,254 | 132,442,147 | 4,461,962 | 4,332,339 | 5,953,821 | 147,190,269 | |||||||||
The credit loss provision for direct and indirect credits is a weighted estimate of three macroeconomic scenarios: baseline, optimistic and pessimistic; which are based on macroeconomic projections provided by the internal Economic Studies team and approved by Senior Management. In each scenario, the Group relies on a wide variety of forward-looking information as economic inputs, which include: the growth of the gross domestic product, the inflation rate, the exchange rate, among others, see further explanation in note 3(j).
Macroeconomic scenario –
The expected credit loss is a weighted estimate of three macroeconomic scenarios: base, optimistic and pessimistic, which are calculated with macroeconomic projections provided by the Economic Studies team and approved by Senior Management. The local and international information flows available during the analysis period are used to feed the projections, which reflect the fact that Peru is a small and open economy, and in this context, approximately 60.0 percent of the volatility in growth economic is driven by external factors including terms of trade, the growth of Peru’s trading partners and external interest rates. Information is collected on each of these factors to build each scenario for the next three years.
The variables mentioned above, along with local variables (fiscal and monetary variables), are incorporated into the economic models. Two types of models are used:
i) Structural projection model.
ii) Financial programming model.
The first is a stochastic dynamic general equilibrium model, which is built with expectations. The second is constructed with the main identities of the national accounts in accordance with the financial programming methodology designed by the IMF (International Monetary Fund) and the methodologies used by a battery of econometric models.
Through this process, projections of GDP growth, inflation, exchange rate and other macroeconomic variables are obtained for the years 2024 and 2025. We expect GDP to grow around 2.0 percent in 2024 (2023: -0.6 percent hundred). The recovery of economic activity will be explained, among other reasons, by:
- A copper price still favorable.
- Inflation will continue to slow down, favoring the purchasing power of households.
- Investment projects that begin or continue their execution.
- Better results in the Agriculture and Fishing sectors.
The Peruvian Government, in a statement dated December 29, 2023, indicated that the Coastal Niño is expected to continue until April 2024. However, for the period of January-March 2024 it revised downwards the probabilities of an event of magnitude moderate at 37 percent (previous: 54 percent) and strong at 12 percent (previous 22 percent). On the contrary, the probabilities of a weak magnitude event increased to 33 percent (previous: 20 percent) and neutral (No Child) to 18 percent (previous: 3 percent). By 2025, the Peruvian economy would grow around 3.0 percent due to the recovery of domestic demand.
For 2024, probabilities of 50 percent, 40 percent and 10 percent were considered for the baseline, optimistic and pessimistic scenarios, respectively. The 2024 probabilities, taking into account the probability of the occurrence of the El Niño phenomenon, the recovery of the economic cycle and the impacts of external factors on the Peruvian economy. For 2025, we return to the probabilities of 50 percent, 25 percent and 25 percent for the baseline, optimistic and pessimistic scenarios, respectively. The probabilities assigned to each scenario and the projections are validated through a fan chart analysis, which uses the likelihood function to identify and analyze:
| i) | The central tendency of the projections. |
| ii) | The dispersion that is expected around this value. |
| iii) | The values that are higher or lower than the central value that are more or less probable. |
The following table provides a comparison between the carrying amount of allowance for loan losses for direct loans, indirect loans and due from customers on banker’s acceptances, and its estimation under three scenarios: base, optimistic and pessimistic.
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Carrying amount | 8,645,945 | 8,530,986 | ||||||
| Scenarios: | ||||||||
| Optimistic | 8,617,203 | 8,457,825 | ||||||
| Base | 8,654,612 | 8,517,295 | ||||||
| Pessimistic | 8,712,061 | 8,631,531 | ||||||
| d) | Credit risk management on reverse repurchase agreements and securities borrowing - |
Most of these operations are performed by Credicorp Capital. The Group has implemented credit limits for each counterparty and most of transactions are collateralized with investment grade financial instruments and financial instruments issued by Governments.
| e) | Credit risk management on investments - |
The Group evaluates the credit risk identified of each of the investments, disclosing the risk rating granted to them by a risk rating agency. For investments traded in Perú, risk ratings used are those provided by the three most prestigious Peruvian rating agencies (authorized by Peruvian regulator) and for investments traded abroad, the risk-ratings used are those provided by the three most prestigious international rating agencies.
In the event that any subsidiary uses a risk-rating prepared by any other risk rating agency, said risk-ratings are standardized with those provided by the above-mentioned institutions.
The following table shows the analysis of the risk-rating of the investments at fair value through profit or loss, at fair value through other comprehensive income and amortized cost provided by the institutions referred to above:
| 2023 | 2022 | |||||||||||||||
| S/(000) | % | S/(000) | % | |||||||||||||
| Instruments rated in Peru: | ||||||||||||||||
| AAA | – | – | 242,679 | 0.5 | ||||||||||||
| AA- a AA+ | – | – | 311,810 | 0.7 | ||||||||||||
| A- to A+ | 65,360 | 0.1 | 1,931,461 | 4.3 | ||||||||||||
| BBB- to BBB+ | 22,584,226 | 43.3 | 18,828,927 | 41.5 | ||||||||||||
| BB- to BB+ | 657,658 | 1.3 | 454,480 | 1.0 | ||||||||||||
| Lower and equal to +B | 132,148 | 0.3 | – | – | ||||||||||||
| Unrated: | ||||||||||||||||
| BCRP certificates of deposit | 11,127,919 | 21.3 | 7,019,479 | 15.5 | ||||||||||||
| Listed and unlisted securities | 312,648 | 0.6 | 344,842 | 0.8 | ||||||||||||
| Restricted mutual funds | 334,162 | 0.6 | 351,317 | 0.8 | ||||||||||||
| Investment funds | 651,307 | 1.2 | 628,476 | 1.4 | ||||||||||||
| Mutual funds | 1,824 | – | 76,111 | 0.2 | ||||||||||||
| Hedge funds | – | – | – | – | ||||||||||||
| Other instruments | 242,310 | 0.5 | 237,174 | 0.5 | ||||||||||||
| Subtotal | 36,109,562 | 69.2 | 30,426,756 | 67.2 | ||||||||||||
| 2023 | 2022 | |||||||||||||||
| S/(000) | % | S/(000) | % | |||||||||||||
| Instruments rated abroad: | ||||||||||||||||
| AAA | 1,007,270 | 1.9 | 2,313,750 | 5.1 | ||||||||||||
| AA- a AA+ | 2,447,819 | 4.7 | 1,201,340 | 2.6 | ||||||||||||
| A- to A+ | 2,709,151 | 5.2 | 1,356,963 | 3.0 | ||||||||||||
| BBB- to BBB+ | 4,273,210 | 8.2 | 4,322,363 | 9.5 | ||||||||||||
| BB- to BB+ | 2,045,242 | 3.9 | 2,790,835 | 6.1 | ||||||||||||
| Lower and equal to +B | 673,757 | 1.3 | 132,760 | 0.3 | ||||||||||||
| Unrated: | ||||||||||||||||
| Listed and unlisted securities | 60,877 | 0.1 | 34,182 | 0.1 | ||||||||||||
| Mutual funds | 1,104,724 | 2.1 | 1,505,939 | 3.3 | ||||||||||||
| Participations of RAL funds | 145,414 | 0.3 | 167,781 | 0.4 | ||||||||||||
| Investment funds | 547,719 | 1.0 | 257,098 | 0.6 | ||||||||||||
| Hedge funds | 291 | – | 280 | – | ||||||||||||
| Other instruments | 1,090,492 | 2.1 | 921,177 | 1.8 | ||||||||||||
| Subtotal | 16,105,966 | 30.8 | 15,004,468 | 32.8 | ||||||||||||
| Total | 52,215,528 | 100.0 | 45,431,224 | 100.0 | ||||||||||||
It is worth mentioning that the change in the risk-rating of the investments has had an impact on the measurement of the expected loss.
| f) | Concentration of financial instruments exposed to credit risk - |
As of December 31, 2023 and 2022, financial instruments with exposure to credit risk were distributed considering the following economic sectors:
| 2023 | 2022 | |||||||||||||||||||
| At fair value through profit for loss |
At fair value through profit for loss |
|||||||||||||||||||
| Held for trading, hedging and others (*) |
Designated at inception |
Financial assets at amortized cost | At fair value through other comprehensive income investments (**) | Total | Held for trading, hedging and others (*) |
Designated at inception |
Financial assets at amortized cost | At fair value through other comprehensive income investments(**) | Total | |||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
|
Central Reserve Bank of Peru
|
192,666 | − | 23,642,580 | 10,935,252 | 34,770,498 | − | − | 24,157,868 | 7,019,479 | 31,177,347 | ||||||||||
|
Financial services
|
3,409,897 | 73,182 | 14,499,904 | 3,900,949 | 21,883,932 | 3,866,108 | 312,993 | 14,507,901 | 4,311,513 | 22,998,515 | ||||||||||
|
Commerce
|
5,969 | 29 | 24,611,067 | 1,007,029 | 25,624,094 | 17,992 | 28 | 26,448,551 | 1,412,625 | 27,879,196 | ||||||||||
|
Manufacturing
|
195,981 | 78 | 22,857,640 | 1,925,973 | 24,979,672 | 139,321 | 35,435 | 23,541,034 | 1,697,174 | 25,412,964 | ||||||||||
|
Government and public administration
|
1,713,104 | 241,294 | 9,808,792 | 12,068,576 | 23,831,766 | 826,279 | 207 | 10,318,450 | 9,547,356 | 20,692,292 | ||||||||||
|
Mortgage loans
|
− | − | 23,395,049 | − | 23,395,049 | − | − | 22,381,290 | − | 22,381,290 | ||||||||||
|
Consumer loans
|
− | − | 18,457,100 | − | 18,457,100 | − | − | 18,740,588 | − | 18,740,588 | ||||||||||
|
Real estate and leasing
|
67,209 | − | 8,989,709 | 3,248 | 9,060,166 | 68,797 | − | 10,088,768 | 15,074 | 10,172,639 | ||||||||||
|
Communications, storage and transportation
|
69,371 | 495,995 | 8,592,952 | 957,512 | 10,115,830 | 55,499 | 270,906 | 6,495,988 | 1,096,852 | 7,919,245 | ||||||||||
|
Community services
|
− | − | 6,463,322 | − | 6,463,322 | − | − | 6,500,918 | − | 6,500,918 | ||||||||||
|
Electricity, gas and water
|
134,229 | 83 | 4,642,005 | 4,056,334 | 8,832,651 | 180,772 | 107,161 | 4,884,840 | 3,250,100 | 8,422,873 | ||||||||||
|
Construction
|
3,336 | − | 3,284,049 | 415,280 | 3,702,665 | 12,899 | − | 3,633,858 | 384,521 | 4,031,278 | ||||||||||
|
Agriculture
|
3,699 | − | 4,569,647 | 15,808 | 4,589,154 | 485 | − | 4,867,488 | 20,942 | 4,888,915 | ||||||||||
|
Mining
|
9,399 | − | 3,755,224 | 155,708 | 3,920,331 | 6,323 | − | 3,883,227 | 149,861 | 4,039,411 | ||||||||||
|
Education, health and others
|
113,028 | 271 | 1,490,560 | 814,761 | 2,418,620 | 89,033 | 42,071 | 1,631,340 | 853,292 | 2,615,736 | ||||||||||
|
Hotels and restaurants
|
− | − | 2,480,313 | − | 2,480,313 | − | − | 2,736,252 | − | 2,736,252 | ||||||||||
|
Insurance
|
5,138 | − | 88,947 | 193 | 94,278 | 1,363 | − | 1,003,613 | 4,542 | 1,009,518 | ||||||||||
|
Fishing
|
139 | − | 658,316 | − | 658,455 | 506 | − | 578,526 | − | 579,032 | ||||||||||
|
Others
|
47,159 | − | 2,426,485 | 787,317 | 3,260,961 | 412,683 | − | 2,531,987 | 1,022,830 | 3,967,500 | ||||||||||
|
Total
|
5,970,324 | 810,932 | 184,713,661 | 37,043,940 | 228,538,857 | 5,678,060 | 768,801 | 188,932,487 | 30,786,161 | 226,165,509 | ||||||||||
(*) It includes non-trading investments that did not pass SPPI test.
(**) OCI: Other comprehensive income.
As of December 31, 2023 and 2022 financial instruments with exposure to credit risk were distributed by the following geographical areas:
| 2023 | 2022 | |||||||||||||||||||
| At fair value through profit for loss |
At fair value through profit for loss |
|||||||||||||||||||
| Held for trading, hedging and others (*) |
Designated at inception |
Financial assets at amortized cost | At fair value through other comprehensive income investments(**) | Total | Held for trading, hedging and others (*) |
Designated at inception |
Financial assets at amortized cost | At fair value through other comprehensive income investments(**) | Total | |||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| America: | ||||||||||||||||||||
| Peru | 1,601,757 | 1,333 | 163,235,790 | 25,099,606 | 189,938,486 | 1,257,305 | 328 | 167,378,965 | 19,370,001 | 188,006,599 | ||||||||||
| Bolivia | 550,271 | − | 11,609,164 | 861,246 | 13,020,681 | 588,484 | − | 10,808,527 | 747,078 | 12,144,089 | ||||||||||
|
United States of America
|
736,813 | 258 | 2,464,455 | 7,260,134 | 10,461,660 | 839,762 | 450,160 | 1,799,795 | 7,332,491 | 10,422,208 | ||||||||||
| Colombia | 1,692,862 | − | 3,939,155 | 796,126 | 6,428,143 | 894,043 | 6,359 | 4,073,211 | 688,313 | 5,661,926 | ||||||||||
| Chile | 310,247 | − | 1,629,984 | 590,346 | 2,530,577 | 622,346 | − | 2,287,020 | 652,915 | 3,562,281 | ||||||||||
| Brazil | 11,837 | − | 121,301 | 168,426 | 301,564 | 3,091 | − | 1,123,155 | 194,138 | 1,320,384 | ||||||||||
| Mexico | 14,040 | − | 195,420 | 396,581 | 606,041 | 16,561 | 40,811 | 132,132 | 385,631 | 575,135 | ||||||||||
| Panama | 4,166 | − | 389,002 | 68,364 | 461,532 | 383 | − | 402,303 | 47,551 | 450,237 | ||||||||||
| Canada | 31,772 | − | 29,760 | 92,571 | 154,103 | 38,413 | − | 34,449 | 103,661 | 176,523 | ||||||||||
| Europe: | ||||||||||||||||||||
| France | 168,648 | − | 9,569 | 136,787 | 315,004 | 163,577 | 7,584 | 28,841 | 152,041 | 352,043 | ||||||||||
| Luxembourg | 617,676 | − | 7,020 | − | 624,696 | 1,038,393 | − | 7,020 | − | 1,045,413 | ||||||||||
|
United Kingdom
|
64,738 | − | 53,576 | 266,628 | 384,942 | 93,717 | 1,978 | 16,017 | 193,810 | 305,522 | ||||||||||
| Spain | 23,356 | − | 14,721 | 198,504 | 236,581 | − | − | 88,723 | 28,840 | 117,563 | ||||||||||
| Switzerland | 4,705 | − | 166 | 32,121 | 36,992 | 4 | − | 175 | 82,129 | 82,308 | ||||||||||
| Netherlands | − | − | 2,247 | 40,112 | 42,359 | − | − | 31,483 | 39,038 | 70,521 | ||||||||||
|
Others in Europe
|
74,709 | − | 293,096 | 92,726 | 460,531 | 80,611 | 10,126 | 51,758 | 136,207 | 278,702 | ||||||||||
| Others | 62,727 | 809,341 | 719,235 | 943,662 | 2,534,965 | 41,370 | 251,455 | 668,913 | 632,317 | 1,594,055 | ||||||||||
| Total | 5,970,324 | 810,932 | 184,713,661 | 37,043,940 | 228,538,857 | 5,678,060 | 768,801 | 188,932,487 | 30,786,161 | 226,165,509 | ||||||||||
| (*) | It includes non-trading investments that did not pass SPPI test. |
(**) OCI: Other comprehensive income.
| g) | Offsetting financial assets and liabilities - |
The disclosures set out in the tables below include financial assets and liabilities that:
| - | Are offset in the Group’s consolidated statement of financial position; or |
| - | Are subject to an enforceable master netting arrangement or similar agreement that covers similar financial instruments, irrespective of whether they are offset in the consolidated statement of financial position. |
Similar agreements include derivative clearing agreements, master repurchase agreements, and master securities lending agreements. Similar financial instruments include derivatives, accounts receivable from reverse repurchase agreements and securities borrowing, payables from repurchase agreements and securities lending and other financial assets and liabilities. Financial instruments such as loans and deposits are not disclosed in the tables below because they are not offset in the statement of financial position.
The offsetting framework contract issued by the International Swaps and Derivatives Association Inc. (“ISDA”) and similar master offsetting arrangements do not meet the criteria for offsetting in the statement of financial position, because said agreements were created in order for both parties to have an enforceable offsetting right in cases of default, insolvency or bankruptcy of the Group or the counterparties or following other predetermined events. In addition, the Group and its counterparties do not intend to settle said instruments on a net basis or to realize the assets and settle the liabilities simultaneously.
The Group receives and gives collateral in the form of cash and trading securities in respect of the following transactions:
| - | Derivatives; |
| - | Accounts receivable from reverse repurchase agreements and securities borrowing; |
| - | Payables from repurchase agreements and securities lending; and |
| - | Other financial assets and liabilities |
Such collateral adheres to standard industry terms including, when appropriate, an ISDA Credit Support Annex. This means that securities received/given as collateral can be pledged or sold during the term of the transaction but have to be returned on maturity of the transaction. The terms also give each party the right to terminate the related transactions upon the counterparty’s failure to return the respective collateral.
Financial assets subject to offsetting, enforceable master offsetting agreements and similar agreements:
| 2023 | ||||||||||||||||||||
| Related amounts not offset in the | ||||||||||||||||||||
| Net of financial | consolidated statement of | |||||||||||||||||||
| assets presented | financial position | |||||||||||||||||||
| Gross amounts | in the consolidated | Cash | ||||||||||||||||||
| recognized | statements of | Financial | collateral | |||||||||||||||||
| Details | financial assets | financial position | instruments | received | Net amount | |||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||
| Receivables from derivatives | 987,663 | 987,663 | (234,550 | ) | (139,833 | ) | 613,280 | |||||||||||||
| Cash collateral, reverse repurchase agreements and securities borrowing | 1,410,647 | 1,410,647 | — | (16,924 | ) | 1,393,723 | ||||||||||||||
| Investments at fair value through other comprehensive income and amortized cost pledged as collateral | 6,533,959 | 6,533,959 | (5,496,964 | ) | — | 1,036,995 | ||||||||||||||
| Total | 8,932,269 | 8,932,269 | (5,731,514 | ) | (156,757 | ) | 3,043,998 | |||||||||||||
| 2022 | ||||||||||||||||||||
| Related amounts not offset in the | ||||||||||||||||||||
| Net of financial | consolidated statement of | |||||||||||||||||||
| assets presented | financial position | |||||||||||||||||||
| Gross amounts | in the consolidated | Cash | ||||||||||||||||||
| recognized | statements of | Financial | collateral | |||||||||||||||||
| Details | financial assets | financial position | instruments | received | Net amount | |||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||
| Receivables from derivatives | 1,500,335 | 1,500,335 | (285,850 | ) | (145,945 | ) | 1,068,540 | |||||||||||||
| Cash collateral, reverse repurchase agreements and securities borrowing | 1,101,856 | 1,101,856 | — | (224,947 | ) | 876,909 | ||||||||||||||
| Investments at fair value through other comprehensive income and amortized cost pledged as collateral | 3,540,528 | 3,540,528 | (3,062,627 | ) | — | 477,901 | ||||||||||||||
| Total | 6,142,719 | 6,142,719 | (3,348,477 | ) | (370,892 | ) | 2,423,350 | |||||||||||||
Financial liabilities subject to offsetting, enforceable offsetting master agreements and similar agreements:
| 2023 | ||||||||||||||||||||
| Net amounts of | ||||||||||||||||||||
| financial liabilities | Related amounts not offset in the | |||||||||||||||||||
| Gross amounts | presented in the | consolidated statement of | ||||||||||||||||||
| of | consolidated | financial position | ||||||||||||||||||
| recognized | statement of | |||||||||||||||||||
| financial | financial | Financial | Cash collateral | |||||||||||||||||
| Details | liabilities | position | instruments | pledged | Net amount | |||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||
| Payables on derivatives | 891,999 | 891,999 | (234,550 | ) | (170,998 | ) | 486,451 | |||||||||||||
| Payables on repurchase agreements and securites lending | 10,168,427 | 10,168,427 | (7,566,773 | ) | (607,639 | ) | 1,994,015 | |||||||||||||
| Total | 11,060,426 | 11,060,426 | (7,801,323 | ) | (778,637 | ) | 2,480,466 | |||||||||||||
| 2022 | ||||||||||||||||||||
| Net amounts of | ||||||||||||||||||||
| financial liabilities | Related amounts not offset in the | |||||||||||||||||||
| Gross amounts | presented in the | consolidated statement of | ||||||||||||||||||
| of | consolidated | financial position | ||||||||||||||||||
| recognized | statement of | |||||||||||||||||||
| financial | financial | Financial | Cash collateral | |||||||||||||||||
| Details | liabilities | position | instruments | pledged | Net amount | |||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||
| Payables on derivatives | 1,367,274 | 1,367,274 | (285,850 | ) | (184,378 | ) | 897,046 | |||||||||||||
|
Payables on repurchase agreements and securites lending
|
12,966,725 | 12,966,725 | (10,655,534 | ) | (649,769 | ) | 1,661,422 | |||||||||||||
| Total | 14,333,999 | 14,333,999 | (10,941,384 | ) | (834,147 | ) | 2,558,468 | |||||||||||||
The gross amounts of financial assets and liabilities disclosed in the above tables have been measured in the statement of financial position on the following basis:
| - | Derivative assets and liabilities are measured at fair value. |
| - | Receivables from reverse repurchase agreements and securities lending are measured at amortized cost. |
| - | Financial liabilities are measured at fair value. |
The difference between the carrying amount in the consolidated statement of financial position and the amounts presented in the tables above for derivatives (presented in other assets Note 12(c)), receivables from reverse repurchase agreement and securities borrowing and payables from repurchase agreements and securities lending and financial liabilities measured at fair value through profit or loss are financial instruments outside of the scope of offsetting disclosure.
| 30.2 | Market risk - |
The Group has exposure to market risk, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks arise from open positions in interest rates, currency, commodities, and equity products; all of which are exposed to general and specific market movements and changes in the level of volatility of prices such as interest rates, credit spreads, foreign exchange rates and equity prices. Due to the order of the Group’s current activities, commodity price risk has not been approved, so this type of instrument is not agreed.
The Group separates exposures to market risk in two groups: (i) those that arise from value fluctuation of trading portfolios recognized at fair value through profit or loss due to movements of market rates or prices (Trading Book) and (ii) those that arise from changes in the structural positions of non-trading portfolios due to movements of the interest rates, prices and foreign exchange ratios (Banking Book) and that are recorded at amortized cost and at fair value with changes in other comprehensive income, this is due to movements in interest rates, prices and currency exchange rates.
The risks that trading portfolios face are managed through Value at Risk (VaR) historical simulation techniques; while non-trading portfolios (Banking Book) are monitored using rate sensitivity metrics, which are a part of Asset and Liability Management (ALM).
| a) | Trading Book – |
The trading book is characterized for having liquid positions in stocks, bonds, foreign currencies and derivatives, arising from market-making transactions where the Group acts as principal with the customers or with the market. This portfolio includes investments and derivatives classified by Management as held for trading.
| (i) | Value at Risk (VaR) – |
The Group applies the VaR approach to its trading portfolio to estimate the market risk of the main positions held and the maximum losses that are expected, based upon a number of assumptions for various changes in market conditions and considering the risk appetite of the subsidiary.
Daily calculation of VaR is a statistically-based estimate of the maximum potential loss on the current portfolio from adverse market movements.
VaR expresses the “maximum” amount the Group might lose, but only to a certain level of confidence (99 percent). There is therefore a specified statistical probability (1 percent) that actual loss could be greater than the VaR estimate. The VaR model assumes a certain “holding period” until positions can be closed (1 - 10 days).
The time horizon used to calculate VaR is one day; however, the one-day VAR is amplified to a 10-day time frame and calculated multiplying the one-day VaR by the square root of 10. This adjustment will be accurate only if the changes in the portfolio in the following days have a normal distribution independent and identically distributed; because of that, the result is multiplied by a non-normality adjustment factor. The limits and consumptions of the VaR are established on the basis of the risk appetite and the trading strategies of each subsidiary.
The evaluation of the movements of the trading portfolio has been based on annual historical information and 129 market risk factors, which are detailed below: 45 market curves, 43 stock prices, 37 mutual fund values and 4 series of volatility.
The Group directly applies these historical changes in rates to each position in its current portfolio (method known as historical simulation).
The Group Management considers that the market risk factors, incorporated in their VaR model, are adequate to measure the market risk to which its trading portfolio is exposed.
The use of this approach does not prevent losses outside of these limits in the event of more significant market movements. Losses exceeding the VaR figure may occur, on average under normal market conditions, not more than once every hundred days.
VaR limits have been established to control and keep track of all the risks taken. These risks arise from the size of the positions and/or the volatility of the risk factors embedded in each financial instrument. Regular reports are prepared for the Treasury Risk Committee and ALM, the Risk Management Committee and Senior Management.
VaR results are used to generate economic capital estimates by market risk, which are periodically monitored and are part of the overall risk appetite of each subsidiary. Furthermore, at Group level, there is also a limit to the risk appetite of the trading portfolio, which is monitored and informed to the Treasury Risks and ALM Corporate Committee.
In VaR calculation, the effects of the exchange rate are not included because said effects are measured in the net monetary position, see note 30.2(b)(ii).
The Group’s VaR showed a decrease as of December 31, 2023, mainly due to lower interest rate risk due to a lower sensitive amount of the portfolio and the registration of fewer upward rate shocks during the last year. The VaR remained contained within the risk appetite limits established by the Risk Management of each Subsidiary.
As of December 31, 2023 and 2022, the Group’s VaR by risk type is as follows:
| 2023 | 2022 | |||||||
| S/(000) | S/(000) | |||||||
| Interest rate risk | 29,399 | 74,343 | ||||||
| Price risk | 5,291 | 5,219 | ||||||
| Volatility risk | 20 | 2,032 | ||||||
| Diversification effect | (5,850 | ) | (7,347 | ) | ||||
| Consolidated VaR by type of risk | 28,860 | 74,247 | ||||||
On the other hand, those instruments that are accounted for at fair value through profit or loss and that are not intended for trading are included in the rate and price sensitivity analysis in the following section. See table of earnings sensitivity at risk, net economic value and price sensitivity.
| b) | Banking Book – |
The non-trading portfolios or, belonging to the banking book (“banking book”), are exposed to different risks, since they are sensitive to movements in market rates, which may result in a negative impact on the value of the assets. with respect to its liabilities, and therefore, in its net worth.
| (i) | Interest rate risk – |
The Banking Book-related interest rate risk arises from eventual changes in interest rates that may adversely affect the expected gains (risk gains) or market value of financial assets and liabilities reported on the balance sheet (net economic value). The Group assumes the exposure to the interest rate risk that may affect their fair value as well as the cash flow risk of future assets and liabilities.
The Risk Committee sets the guidelines regarding the level of unmatched repricing of interest rates that can be tolerated, which is periodically monitored through ALCO.
Corporate policies include guidelines for the management of the Group’s exposure to the interest rate risk. These guidelines are implemented considering the features of each segment of business in which the Group entities operate.
In this regard, Group companies that are exposed to the interest rate risk are those that have yields based on interest, such as credits, investments, and technical reserves. Interest rate risk management in Banco de Crédito del Perú, Banco de Crédito de Bolivia, Mibanco- Banco de la Microempresa, Mibanco - Banco de la Microempresa de Colombia, ASB Bank Corp and Pacífico Seguros, is carried out by performing a repricing gap analysis, sensitivity analysis of the financial margin (GER) and sensitivity analysis of the net economic value (VEN). These calculations consider different rate shocks, which are generated through different scenario simulations and consider periods of high volatility.
Analysis of repricing gap –
The repricing gap analysis is intended to measure the risk exposure of interest rate for repricing periods, in which both balance and out of balance assets and liabilities are grouped. This allows identifying those sections in which the rate variations would have a potential impact.
The table below summarizes the Group’s exposure to interest rate risks. It includes the Group’s financial instruments at carrying amounts, categorized by the earlier of contractual re-pricing or maturity dates, what occurs first:
| 2023 | ||||||||||||||||||||||||||||
| Up to 1 | 1 to 3 | 3 to 12 | 1 to 5 | More than | Non-interest | |||||||||||||||||||||||
| month | months | months | years | 5 years | bearing | Total | ||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||
| Cash and cash collateral, reverse repurchase agreements and securities borrowing | 13,900,784 | 1,707,822 | 3,050,481 | 8,674,709 | 273,214 | 7,734,585 | 35,341,595 | |||||||||||||||||||||
| Investments | 1,331,553 | 4,489,604 | 9,475,564 | 12,827,007 | 18,773,061 | 336,078 | 47,232,867 | |||||||||||||||||||||
| Loans, net | 19,650,760 | 16,975,402 | 38,874,328 | 46,963,496 | 14,420,760 | (186,611 | ) | 136,698,135 | ||||||||||||||||||||
| through profit or loss | – | – | – | – | – | 810,932 | 810,932 | |||||||||||||||||||||
| Reinsurance and insurance contract assets | 872,046 | – | – | – | – | – | 872,046 | |||||||||||||||||||||
| Other assets (*) | 143,214 | 7,053 | 31,753 | – | – | 2,381,135 | 2,563,155 | |||||||||||||||||||||
| Total assets | 35,898,357 | 23,179,881 | 51,432,126 | 68,465,212 | 33,467,035 | 11,076,119 | 223,518,730 | |||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||
| Deposits and obligations | 40,740,255 | 16,793,946 | 22,762,047 | 57,611,088 | 8,418,281 | 1,379,377 | 147,704,994 | |||||||||||||||||||||
|
Payables from repurchase agreements and securities lending |
5,987,961 | 6,344,769 | 3,477,433 | 3,238,356 | 3,026,066 | 372,523 | 22,447,108 | |||||||||||||||||||||
| Insurance and reinsurance contract liability | 116,515 | 178,525 | 496,768 | 1,862,006 | 6,822,694 | 2,841,625 | 12,318,133 | |||||||||||||||||||||
| Financial liabilities at fair value through profit or loss | – | – | – | – | – | 641,915 | 641,915 | |||||||||||||||||||||
| Bonds and Notes issued | 81,635 | 94,831 | 5,711,424 | 7,944,189 | 603,511 | 159,195 | 14,594,785 | |||||||||||||||||||||
| Other liabilities (*) | 497,682 | – | 2,046 | – | – | 4,546,082 | 5,045,810 | |||||||||||||||||||||
| Equity | – | – | – | – | – | 33,107,065 | 33,107,065 | |||||||||||||||||||||
| Total liabilities and equity | 47,424,048 | 23,412,071 | 32,449,718 | 70,655,639 | 18,870,552 | 43,047,782 | 235,859,810 | |||||||||||||||||||||
| Off-balance-sheet accounts | ||||||||||||||||||||||||||||
| Derivative financial assets | 72,943 | – | 676,380 | – | – | – | 749,323 | |||||||||||||||||||||
| Derivative financial liabilities | 630,109 | 401,730 | 54,849 | 1,936,331 | – | – | 3,023,019 | |||||||||||||||||||||
| (557,166 | ) | (401,730 | ) | 621,531 | (1,936,331 | ) | – | – | (2,273,696 | ) | ||||||||||||||||||
| Marginal gap | (12,082,857 | ) | (633,920 | ) | 19,603,939 | (4,126,758 | ) | 14,596,483 | (31,971,663 | ) | (14,614,776 | ) | ||||||||||||||||
| Accumulated gap | (12,082,857 | ) | (12,716,777 | ) | 6,887,162 | 2,760,404 | 17,356,887 | (14,614,776 | ) | – | ||||||||||||||||||
(*) Other assets and other liabilities only include financial accounts.
Investments for trading purposes are not considered (investments at fair value through profit or loss and trading derivatives), because these instruments are part of the trading book and the Value at Risk methodology is used to measure market risks.
| 2022 | ||||||||||||||||||||||||||||
| Up to 1 | 1 to 3 | 3 to 12 | 1 to 5 | More than | Non-interest | |||||||||||||||||||||||
| month | months | months | years | 5 years | bearing | Total | ||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/000 | ||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||
| Cash and cash collateral, reverse repurchase agreements and securities borrowing | 15,413,219 | 1,339,844 | 2,635,747 | 8,875,620 | 184,437 | 6,836,829 | 35,285,696 | |||||||||||||||||||||
| Investment | 6,177,458 | 2,548,155 | 3,088,999 | 10,793,965 | 18,286,282 | 337,031 | 41,231,890 | |||||||||||||||||||||
| Loans, net | 18,513,077 | 20,548,048 | 38,917,974 | 46,932,699 | 15,367,868 | 474,306 | 140,753,972 | |||||||||||||||||||||
| through profit or loss | - | - | - | - | - | 768,801 | 768,801 | |||||||||||||||||||||
| Reinsurance and insurance contract assets | 62,001 | 124,001 | 558,006 | - | - | - | 744,008 | |||||||||||||||||||||
| Other assets (*) | 66,225 | – | - | - | - | 2,531,629 | 2,597,854 | |||||||||||||||||||||
| Total assets | 40,231,980 | 24,560,048 | 45,200,726 | 66,602,284 | 33,838,587 | 10,948,596 | 221,382,221 | |||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||
| Deposits and obligations | 36,293,889 | 13,244,363 | 24,789,328 | 61,459,266 | 8,201,016 | 3,032,925 | 147,020,787 | |||||||||||||||||||||
|
Payables from repurchase agreements and securities lending |
2,919,374 | 2,193,017 | 5,582,701 | 7,368,172 | 3,160,922 | 679,950 | 21,904,136 | |||||||||||||||||||||
| Insurance and reinsurance contract liability | 198,602 | 279,488 | 515,873 | 1,526,519 | 7,329,609 | 1,303,917 | 11,154,008 | |||||||||||||||||||||
| Financial liabilities at fair value through profit or loss | – | – | – | – | – | 191,010 | 191,010 | |||||||||||||||||||||
| Bonds and Notes issued | 48,301 | 73,546 | 3,186,038 | 13,330,687 | 357,352 | 11,270 | 17,007,194 | |||||||||||||||||||||
| Other liabilities (*) | 540,778 | 72,584 | 2,854 | - | - | 4,072,451 | 4,688,667 | |||||||||||||||||||||
| Equity | - | - | - | - | - | 29,595,213 | 29,595,213 | |||||||||||||||||||||
| Total liabilities and equity | 40,000,944 | 15,862,998 | 34,076,794 | 83,684,644 | 19,048,899 | 38,886,736 | 231,561,015 | |||||||||||||||||||||
| Off-balance-sheet accounts | ||||||||||||||||||||||||||||
| Derivative financial assets | 171,485 | 830,415 | 450,835 | 931,208 | – | – | 2,383,943 | |||||||||||||||||||||
| Derivative financial liabilities | 149,938 | 46,232 | 165,610 | 1,844,839 | 95,350 | – | 2,301,969 | |||||||||||||||||||||
| 21,547 | 784,183 | 285,225 | (913,631 | ) | (95,350 | ) | – | 81,974 | ||||||||||||||||||||
| Marginal gap | 252,583 | 9,481,233 | 11,409,157 | (17,995,991 | ) | 14,694,338 | (27,938,140 | ) | (10,096,820 | ) | ||||||||||||||||||
| Accumulated gap | 252,583 | 9,733,816 | 21,142,973 | 3,146,982 | 17,841,320 | (10,096,820 | ) | – | ||||||||||||||||||||
(*) Other assets and other liabilities only include financial accounts.
Investments for trading purposes are not considered (investments at fair value through profit or loss and trading derivatives), because these instruments are part of the trading book and the Value at Risk methodology is used to measure market risks.
Sensitivity to changes in interest rates -
The sensitivity analysis of a reasonable possible change in interest rates on the banking book comprises an assessment of the sensitivity of the financial margins that seeks to measure the potential changes in the interest accruals over a period of time and the expected movement of the interest rate curves, as well as the sensibility of the net economic value, which is a long- term metric measured as the difference arising between the Net Economic Value of assets and liabilities before and after a variation in interest rates.
The sensitivity of the financial margin is the effect of the assumed changes in interest rates on the net financial interest income before income tax and non-controlling interest for one year, based on non-trading financial assets and financial liabilities held as of December 31, 2023 and December 31, 2022, including the effect of derivative instruments.
The sensitivity of the Net Economic Value is calculated by reassessing the financial assets and liabilities sensitive to rates, except for the trading instruments, including the effect of any associated hedge, and derivative instruments designated as a cash flow hedge. Regarding rate risk management, no distinction is made by accounting category for the investments that are considered in these calculations.
The results of the sensitivity analysis regarding changes in interest rates as of December 31, 2023 and December 31, 2022 are presented below:
| 2023 | ||||||||||||||||||
| Currency |
Changes in basis points |
Sensitivity of net profit |
Sensitivity of Net Economic Value |
|||||||||||||||
| S/(000) | S/(000) | |||||||||||||||||
| Soles | +/- | 50 | +/- | 15,052 | -/+ | 511,851 | ||||||||||||
| Soles | +/- | 75 | +/- | 22,578 | -/+ | 767,776 | ||||||||||||
| Soles | +/- | 100 | +/- | 30,104 | -/+ | 1,023,702 | ||||||||||||
| Soles | +/- | 150 | +/- | 45,156 | -/+ | 1,535,553 | ||||||||||||
| U.S. Dollar | +/- | 50 | +/- | 48,060 | +/- | 119,342 | ||||||||||||
| U.S. Dollar | +/- | 75 | +/- | 72,090 | +/- | 179,013 | ||||||||||||
| U.S. Dollar | +/- | 100 | +/- | 96,120 | +/- | 238,684 | ||||||||||||
| U.S. Dollar | +/- | 150 | +/- | 144,180 | +/- | 358,026 | ||||||||||||
| 2022 | ||||||||||||||||||
| Currency |
Changes in basis points |
Sensitivity of net profit |
Sensitivity of Net Economic Value |
|||||||||||||||
| S/(000) | S/(000) | |||||||||||||||||
| Soles | +/- | 50 | +/- | 39,920 | -/+ | 345,530 | ||||||||||||
| Soles | +/- | 75 | +/- | 59,880 | -/+ | 518,295 | ||||||||||||
| Soles | +/- | 100 | +/- | 79,840 | -/+ | 691,060 | ||||||||||||
| Soles | +/- | 150 | +/- | 119,760 | -/+ | 1,036,590 | ||||||||||||
| U.S. Dollar | +/- | 50 | +/- | 103,546 | +/- | 306,792 | ||||||||||||
| U.S. Dollar | +/- | 75 | +/- | 155,319 | +/- | 460,188 | ||||||||||||
| U.S. Dollar | +/- | 100 | +/- | 207,092 | +/- | 613,584 | ||||||||||||
| U.S. Dollar | +/- | 150 | +/- | 310,638 | +/- | 920,375 | ||||||||||||
The interest rate sensitivities set out in the table above are only illustrative and are based on simplified scenarios. The figures represent the effect of the pro-forma movements in the net interest income based on the projected yield curve scenarios and the Group’s current interest rate risk profile. This effect, however, does not incorporate actions that would be taken by Management to mitigate the impact of this interest rate risk.
The Group seeks proactively to change the interest rate risk profile to minimize losses and optimize net revenues. The projections above also assume that the interest rate of all maturities moves by the same amount and, therefore, do not reflect the potential impact on net interest income of some rates changing while others remain unchanged.
As of December 31, 2023, and December 31, 2022, investments in equity securities and funds that are non-trading, recorded at fair value through other comprehensive income and at fair value through profit or loss, respectively, are not considered as comprising investment securities for interest rate sensitivity calculation purposes; however, a 10, 25 and 30 percent of changes in market prices is conducted to these price-sensitivity securities.
The market price sensitivity tests as of December 31, 2023, and December 31, 2022, are presented below:
| Equity securities | |||||||||||
| Measured at fair value through | Change in | ||||||||||
| other comprehensive income | market prices | 2023 | 2022 | ||||||||
| % | S/(000) | S/(000) | |||||||||
| Equity securities | +/-10 | 33,480 | 32,649 | ||||||||
| Equity securities | +/-25 | 83,700 | 81,621 | ||||||||
| Equity securities | +/-30 | 100,440 | 97,946 | ||||||||
| Funds | |||||||||||
| Measured at fair value | Change in | ||||||||||
| through profit or loss | market prices | 2023 | 2022 | ||||||||
| % | S/(000) | S/(000) | |||||||||
| Mutual funds | +/-10 | 108,747 | 157,932 | ||||||||
| Mutual funds | +/-25 | 271,867 | 394,831 | ||||||||
| Mutual funds | +/-30 | 326,241 | 473,797 | ||||||||
| Restricted mutual funds | +/-10 | 33,416 | 35,132 | ||||||||
| Restricted mutual funds | +/-25 | 83,541 | 87,829 | ||||||||
| Restricted mutual funds | +/-30 | 100,249 | 105,395 | ||||||||
| Participation in RAL funds | +/-10 | 14,541 | 16,778 | ||||||||
| Participation in RAL funds | +/-25 | 36,354 | 41,945 | ||||||||
| Participation in RAL funds | +/-30 | 43,624 | 50,334 | ||||||||
| Investment funds | +/-10 | 118,071 | 86,053 | ||||||||
| Investment funds | +/-25 | 295,178 | 215,133 | ||||||||
| Investment funds | +/-30 | 354,214 | 258,160 | ||||||||
| Hedge funds | +/-10 | 29 | 28 | ||||||||
| Hedge funds | +/-25 | 73 | 70 | ||||||||
| Hedge funds | +/-30 | 87 | 84 | ||||||||
| Exchange Trade Funds | +/-10 | 2,958 | 2,504 | ||||||||
| Exchange Trade Funds | +/-25 | 7,396 | 6,261 | ||||||||
| Exchange Trade Funds |
+/-30 | 8,875 | 7,513 | ||||||||
| (ii) | Foreign currency exchange risk – |
The Group is exposed to fluctuations in foreign currency exchange rates, which impact net open monetary positions and equity positions in a different currency than the group’s functional currency.
The group’s monetary position is made up of the net open position of monetary assets, monetary liabilities and off-balance sheet items expressed in foreign currency for which the entity itself assumes the risk; as well as the equity position generated by the investment in the group’s subsidiaries whose functional currency is different from soles. In the first case, any appreciation/depreciation of the foreign currency would affect the consolidated income statement, on the contrary, in the case of the equity position, any appreciation/depreciation of the foreign currency will be recognized in other comprehensive income.
The Group manages foreign currency exchange risk, which affects the income statement, by monitoring and controlling currency positions exposed to movements in exchange rates. The market risk units of each subsidiary establish limits for said positions, which are approved by their own committees, and monitor and follow up the limits considering their foreign exchange trading positions, their most structural foreign exchange positions, as well as their sensitivities. Additionally, there is a monetary position limit at the Credicorp level, which is monitored and reported to the Group’s Risk Committee.
On the other hand, the Group manages foreign currency exchange risk whose fluctuation is recognized in other comprehensive income, monitoring, and controlling equity positions and their sensitivities, which are reported to the Group’s Risk Committee.
Net foreign exchange gains/losses recognized in the consolidated statement of income are disclosed in the following items:
| - | Net gain on foreign exchange transactions, |
| - | Net result on derivatives held for trading, |
| - | Net gain from exchange difference |
As of December 31, 2023, the foreign currency in which the group has the greatest exposure is the U.S. Dollar. The free-market exchange rate for purchase and sale transactions of each U.S. Dollar as of December 31, 2023 was S/3.709 (S/3.814 as of December 31, 2022).
Transactions in foreign currency are made at free market exchange rates of the countries where Credicorp’s Subsidiaries are established. As of December 31,2023 and 2022, the net open monetary position with effect on results and the equity position of the Group was as follows:
| 2023 | 2022 | |||||||||||||||||||||||
| Other | Other | |||||||||||||||||||||||
| U.S. Dollar | currencies | Total | U.S. Dollar | currencies | Total | |||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||
| Total monetary assets | 77,387,709 | 495,553 | 77,883,262 | 77,853,626 | 364,108 | 78,217,734 | ||||||||||||||||||
| Total monetary liabilities | (79,779,686 | ) | (102,500 | ) | (79,882,186 | ) | (79,016,765 | ) | (217,568 | ) | (79,234,333 | ) | ||||||||||||
| (2,391,977 | ) | 393,053 | (1,998,924 | ) | (1,163,139 | ) | 146,540 | (1,016,599 | ) | |||||||||||||||
|
Total position in currency derivatives
|
2,622,188 | (369,458 | ) | 2,252,730 | 353,166 | (127,382 | ) | 225,784 | ||||||||||||||||
| Hedging a foreign investment (*) | – | – | – | 872,750 | – | 872,750 | ||||||||||||||||||
|
Total monetary position with effect on income
|
230,211 | 23,595 | 253,806 | 62,777 | 19,158 | 81,935 | ||||||||||||||||||
|
Total monetary position with effect on equity
|
904,434 | 2,204,984 | 3,109,418 | 785,030 | 1,872,697 | 2,657,727 | ||||||||||||||||||
| Net monetary position | 1,134,645 | 2,228,579 | 3,363,224 | 847,807 | 1,891,855 | 2,739,662 | ||||||||||||||||||
As of December 31, 2023, the monetary position with effect on equity in other currencies is mainly made up of the equity of subsidiaries in Bolivian pesos for S/860.3 million, in Colombian pesos for S/961.9 million and, in Chilean pesos for S/380.9 million, among other minors. As of December 31, 2022, the monetary position with effect on equity in other currencies was mainly made up of the equity of subsidiaries in Bolivian pesos for S/954.7 million, in Colombian pesos for S/566.7 million and, in Chilean pesos for S/348.0 million, among other minors.
(*) As of December 31, 2023 the accounting hedge of net investment abroad was revoked, where part of our liability position in dollars related to the balance of the caption “bonds and notes issued”, see Note 15(a)(iii), was designated as cover our permanent investment in Atlantic Security Holding.
The following tables show the sensitivity analysis of the main currencies to which the Group is exposed, and which affect the consolidated income statement and other comprehensive income as of December 31, 2023, and December 31, 2022.
The analysis determines the effect of a reasonably possible variation of the exchange rate against the sol for each of the currencies independently, considering all other variables constant. A negative amount shows a potential net reduction in the consolidated income statement and other comprehensive income, while a positive amount reflects a potential increase.
The following is a sensitivity analysis of the foreign exchange position with an effect on the consolidated statement of income:
| Currency rate sensibility |
Change in currency rates |
2023 | 2022 | |||||||||
| % | S/000 | S/000 | ||||||||||
| Depreciation - | ||||||||||||
| Soles in relation to U.S. Dollar | 5 | 10,962 | 2,989 | |||||||||
| Soles in relation to U.S. Dollar | 10 | 20,928 | 5,707 | |||||||||
| Appreciation - | ||||||||||||
| Soles in relation to U.S. Dollar | 5 | (12,116 | ) | (3,304 | ) | |||||||
| Soles in relation to U.S. Dollar | 10 | (25,579 | ) | (6,975 | ) | |||||||
The following is the sensitivity analysis of the foreign exchange position with effect in other comprehensive income, being the main currencies of exposure: U.S. Dollar, Boliviano, Colombian Peso and Chilean Peso. This analysis is shown as of December 31, 2023 and 2022:
| Currency rate sensibility |
Change in currency rates |
2023 | 2022 | |||||||||
| % | S/000 | S/000 | ||||||||||
| Depreciation - | ||||||||||||
| Soles in relation to U.S. Dollar | 5 | 43,377 | 37,382 | |||||||||
| Soles in relation to U.S. Dollar | 10 | 82,812 | 71,366 | |||||||||
| Appreciation - | ||||||||||||
| Soles in relation to U.S. Dollar | 5 | (47,944 | ) | (41,317 | ) | |||||||
| Soles in relation to U.S. Dollar | 10 | (101,214 | ) | (87,226 | ) | |||||||
| Currency rate sensibility |
Change in currency rates |
2023 | 2022 | |||||||||
| % | S/000 | S/000 | ||||||||||
| Depreciation - | ||||||||||||
| Soles in relation to Peso Boliviano | 5 | 40,969 | 45,462 | |||||||||
| Soles in relation to Peso Boliviano | 10 | 78,214 | 86,791 | |||||||||
| Appreciation - | ||||||||||||
| Soles in relation to Peso Boliviano | 5 | (45,282 | ) | (50,247 | ) | |||||||
| Soles in relation to Peso Boliviano | 10 | (95,595 | ) | (106,078 | ) | |||||||
| Currency rate sensibility |
Change in currency rates |
2023 | 2022 | |||||||||
| % | S/000 | S/000 | ||||||||||
| Depreciation - | ||||||||||||
| Soles in relation to Peso Colombiano | 5 | 45,804 | 26,984 | |||||||||
| Soles in relation to Peso Colombiano | 10 | 87,444 | 51,515 | |||||||||
| Appreciation - | ||||||||||||
| Soles in relation to Peso Colombiano | 5 | (50,626 | ) | (29,825 | ) | |||||||
| Soles in relation to Peso Colombiano | 10 | (106,876 | ) | (62,963 | ) | |||||||
| Currency rate sensibility |
Change in currency rates |
2023 | 2022 | |||||||||
| % | S/000 | S/000 | ||||||||||
| Depreciation - | ||||||||||||
| Soles in relation to Peso Chileno | 5 | 18,136 | 16,571 | |||||||||
| Soles in relation to Peso Chileno | 10 | 34,624 | 31,636 | |||||||||
| Appreciation - | ||||||||||||
| Soles in relation to Peso Chileno | 5 | (20,046 | ) | (18,316 | ) | |||||||
| Soles in relation to Peso Chileno | 10 | (42,318 | ) | (38,667 | ) | |||||||
| 30.3 | Liquidity risk |
Liquidity risk is the risk that the Group is unable to meet its short-term payment obligations associated with its financial liabilities when they fall due and to replace funds when they are withdrawn. In this sense, the company that is facing a liquidity crisis would be failing to comply with the obligations to pay depositors and with commitments to lend or satisfy other operational cash needs.
The Group is exposed to daily cash requirements, interbank deposits, current accounts, time deposits, use of loans, guarantees and other requirements. The Management of the Group’s subsidiaries establishes limits for the minimum funds amount available to cover such cash withdrawals and on the minimum level of inter-bank and other borrowing facilities that should be in place to cover withdrawals at unexpected levels of demand. Sources of liquidity are regularly reviewed by the corresponding risk teams to maintain a wide diversification by currency, geography, type of funding, provider, producer and term.
The procedure to control the mismatching of the maturities and interest rates of assets and liabilities is fundamental to the management of the Group. It is unusual for banks to be completely matched, as transacted business is often based on uncertain terms and of different types. An unmatched position potentially enhances profitability, but also increases liquidity risk, which generates exposure to potential losses.
Maturities of assets and liabilities and the ability to replace them, at an acceptable cost are important factors in assessing the liquidity of the Group.
A mismatch, in maturity of long-term illiquid assets against short-term liabilities, exposes the consolidated statement of financial position to risks related both to rollover and to interest rates. If liquid assets do not cover maturing debts, a consolidated statement of financial position is vulnerable to a rollover risk. Furthermore, a sharp increase in interest rates can dramatically increase the cost of rolling over short-term liabilities, leading to a rapid increase in debt cost. The contractual-maturity gap report is useful in showing liquidity characteristics.
Corporate policies have been implemented for liquidity risk management by the Group. These policies are consistent with the particular characteristics of each operating segment in which each of the Group companies operate. Risk Management heads set up limits and autonomy models to determine the adequate liquidity indicators to be managed.
Commercial banking and Microfinance:
Liquidity risk exposure in BCP Perú, BCP Bolivia, Mibanco and Mibanco Colombia is based on indicators such as the Internal Liquidity Coverage Ratio (RCLI, the Spanish acronym) which measures the amount of liquid assets available to meet cash outflows needs within a given stress scenario for a period of 30 days and the Internal Ratio of Stable Net Funding (RFNEI, the Spanish acronym), which is intended to guarantee that long-term assets are financed at least with a minimum number of stable liabilities within a prolonged liquidity crisis scenario and works as a minimum compliance mechanism that supplements the RCLI. The core limits of these indicators are 100% and any excess is presented in the Credicorp Treasury Risk Committee, Credicorp Risk Committee and the Assets Liabilities Committee (ALCO) of the respective subsidiary.
Insurances and Pensions:
Insurances: Liquidity risk management in Pacífico Grupo Asegurador follows a particular approach given the nature of the business. For annually renewable businesses, mainly general insurance, the emphasis of liquidity is focused on the quick availability of resources in the event of a systemic event (e.g. earthquake); for this purpose, there are minimum investment indicators in place relating to local cash/time deposits and foreign fixed-income instruments of high quality and liquidity.
For long-term businesses such as Pacífico Seguros, given the nature of the products offered and the contractual relationship with customers (the liquidity risk is not material); the emphasis is on maintaining sufficient flow of assets and matching their maturities with maturities of obligations (mathematical technical reserves); for this purpose there are indicators that measure the asset/liability sufficiency and adequacy as well as calculations or economic capital subject to interest rate risk, this last under the methodology of Credicorp.
Pensions: Liquidity risk management in AFP Prima is carried out in a differentiated manner between the fund administrator and the funds being managed. Liquidity management regarding the fund administrator is focused on hedge meeting periodic operating expense needs, which are supported with the collection of commissions. The fund administering entity does not record unexpected outflows of liquidity.
Investment banking:
Liquidity risk in the Grupo Credicorp Capital principally affects the security brokerage. In managing this risk, limits of use of liquidity have been established as well as mismatching by dealing desk; follow-up on liquidity is performed on a daily basis for a short-term horizon covering the coming settlements. If short-term unmatched maturities are identified, repos are used. On the other hand, structural liquidity risk of Credicorp Capital is not significant given the low levels of debt, which is monitored regularly using financial planning tools.
In the case of Atlantic Security Bank, the risk liquidity management performs through indicators such as Internal Liquidity Coverage Ratio (RCLI, the Spanish acronym) and the Internal Ratio of Stable Net Funding (RFNEI, the Spanish acronym) with the core limits of 100% and any excess is presented in the Credicorp Treasury Risk Committee, Credicorp Risk Committee and the Assets Liabilities Committee (ALCO) of the respective subsidiary.
Companies perform a liquidity risk management using the liquidity Gap or contractual maturity Gap.
The table below presents the cash flows payable by the Group by remaining contractual maturities (including future interest payments) at the date of the consolidated statement of financial position. The amounts disclosed in the table are the contractual undiscounted cash flows:
| 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| Up to a month |
From 1 to 3 months |
From 3 to 12 months |
From 1 to 5 years |
Over 5 Year |
Total | Up to a month |
From 1 to 3 months |
From 3 to 12 months |
From 1 to 5 years |
Over 5 Year |
Total | |||||||||||||||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/000 | S/000 | |||||||||||||||||||||||||||||||||||||
| Financial assets | 38,552,719 | 26,270,643 | 60,976,000 | 92,329,896 | 47,960,945 | 266,090,203 | 51,659,698 | 29,779,019 | 55,988,081 | 81,860,492 | 45,784,016 | 265,071,306 | ||||||||||||||||||||||||||||||||||||
| Financial liabilities by type - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits and obligations | 42,289,107 | 18,369,890 | 26,491,876 | 55,511,772 | 9,275,728 | 151,938,373 | 37,822,104 | 13,802,039 | 25,833,124 | 64,047,112 | 8,546,334 | 150,050,713 | ||||||||||||||||||||||||||||||||||||
| Payables from reverse purchase agreements and security lendings and due to banks and correspondents | 6,048,623 | 2,581,452 | 5,994,505 | 5,749,977 | 3,901,739 | 24,276,296 | 4,359,993 | 2,368,114 | 6,525,912 | 7,913,422 | 10,387,277 | 31,554,718 | ||||||||||||||||||||||||||||||||||||
| Financial liabilities designated at fair value through profit or loss | 641,915 | — | — | — | — | 641,915 | 191,010 | — | — | — | — | 191,010 | ||||||||||||||||||||||||||||||||||||
| Bonds and notes issued | 214,609 | 188,158 | 5,624,264 | 7,492,224 | 579,266 | 14,098,521 | 217,504 | 171,471 | 3,357,173 | 13,402,553 | 374,935 | 17,523,636 | ||||||||||||||||||||||||||||||||||||
| Lease liabilities | 30,710 | 33,118 | 89,984 | 256,960 | 102,344 | 513,116 | 32,390 | 35,637 | 105,931 | 314,714 | 129,445 | 618,117 | ||||||||||||||||||||||||||||||||||||
| Other liabilities | 3,646,610 | 358,303 | 241,182 | 8,484 | 1,636,332 | 5,890,911 | 3,885,942 | 217,108 | 249,763 | 7,654 | 1,649,079 | 6,009,546 | ||||||||||||||||||||||||||||||||||||
| Total liabilities | 52,871,574 | 21,530,921 | 38,441,811 | 69,019,417 | 15,495,409 | 197,359,132 | 46,508,943 | 16,594,369 | 36,071,903 | 85,685,455 | 21,087,070 | 205,947,740 | ||||||||||||||||||||||||||||||||||||
| Derivative financial liabilities - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Contractual amounts receivable (Inflows) | 961,788 | 1,059,625 | 3,153,643 | 1,394,394 | 30,653 | 6,600,103 | 1,451,819 | 1,931,304 | 972,276 | 876,270 | 384,857 | 5,616,526 | ||||||||||||||||||||||||||||||||||||
| Contractual amounts payable (outflows) | 939,961 | 1,053,036 | 3,185,326 | 1,329,268 | 28,899 | 6,536,490 | 1,454,360 | 1,932,240 | 977,394 | 840,215 | 334,500 | 5,538,709 | ||||||||||||||||||||||||||||||||||||
| Total liabilities | 21,827 | 6,589 | (31,683 | ) | 65,126 | 1,754 | 63,613 | (2,541 | ) | (936 | ) | (5,118 | ) | 36,055 | 50,357 | 77,817 | ||||||||||||||||||||||||||||||||
| 30.4 | Non-financial risk - |
A non-financial risk (NFR) is a broad term that is generally defined by exclusion; that is, any risk other than traditional financial market, credit and liquidity risks. RNFs may have substantial negative strategic, commercial, economic and/or reputational implications. RNF includes operational risks defined in Basel’s seven types of operational risk events, but also other important risks such as technology, cyber, conduct, model, compliance, strategic and third-party risk.
Non-Financial Risk management has become more challenging due to the added complexity of rapid changes in technology, extensive process automation, greater reliance on systems rather than people, as well as transformational processes such as business agility. These changes in the way financial institutions do business have led to new risk exposures, whether in the form of attacks affecting the Group service, data theft or online fraud.
| 30.5 | Operational risk – |
Operational risk is the possibility of the occurrence of losses arising from inadequate processes, human error, failure of information technology, relations with third parties or external events. Operational risks can, lead to financial losses and have legal or regulatory compliance consequences but exclude strategic or reputational risk (except for the companies under Colombian regulations, where reputational risk is included in operational risk).
Operational risks are grouped into internal fraud, external fraud, labor relations and job security, relations with customers, business products and practices, damages to material assets, business and systems interruption, and failures in process execution, delivery and management of processes.
One of the Group’s pillars is to develop an efficient risk culture, and to achieve this, it records operational risks and their respective process controls. The risk map permits their monitoring, prioritization and proposed treatment according to established governance. Likewise carries out an active cybersecurity and fraud prevention management, aligned with the best international practices.
The business continuity management system enables the establishing, implementing, operating, monitoring, reviewing, maintaining and improving of business continuity based on best practices and regulatory requirements. The Group implements recovery strategies for the resources that support important products and services of the organization, which will be periodically tested to measure the effectiveness of the strategy.
In the management of operational risk, cybersecurity, fraud prevention and business continuity, corporate guidelines are used, and methodologies and best practices are shared among the Group’s companies.
Finally, it is incorporated as a mechanism of recovery in front of the materialization of operational risks, the management of the Transfer of Non-Financial Risks, mainly through Insurance Policies contracted individually or corporately in the local and international market, which cover losses due to fraud, civil and professional liability, cyber risks, damage to physical assets, among others. The insurance design is in accordance with the Group’s main operating risks, the coverage needs of key areas and the organization’s risk appetite, constantly seeking efficiencies in the cost of policies, working together with the insurers that make up the Group and the most important insurance/reinsurance brokers in the international market.
| 30.6 | Cybersecurity - |
Credicorp focuses its efforts on the most cost-efficient strategies to reduce the exposure to cybersecurity risk; thus, meeting the Group’s risk appetite. To achieve this, different levels of controls adapted to the different areas and companies potentially exposed are applied. Therefore, it maintains a significant investment program, which allows it to have the necessary technologies and processes to keep the Group’s operations and assets secure.
As part of the Cybersecurity Government, the Group has the CISO Credicorp and a corporate team whose objective is to ensure the deployment and compliance of the Cybersecurity strategy in all companies. The corporate appetite has been defined, which is reviewed annually, and the Strategy and Plan has been established at the corporate level, defining implementation priorities and improvements in accordance with the different realities of the companies. These lines of work include the Cybersecurity Strategy, which is constantly reviewed considering the global scenario, the risk profile, standards, frameworks and regulations, in order to guarantee business continuity, resilience and data privacy, as well as the adoption of the robust cybersecurity framework that allows the adaptation of cybersecurity controls for each of the Group’s companies, adequate management and remediation of vulnerabilities in an early and timely manner.
There is an awareness program, constant training of employees to generate a culture of cybersecurity awareness in all Group companies and cybersecurity indicators, which ensure alignment between the operations and business strategy of the Group’s companies.
Third-party governance allows us to ensure adherence and compliance with the Group’s policies, as well as the implementation of security technologies, to comprehensively secure all business processes.
Finally, the management of information security of information assets is carried out through a systemic process, documented and known by the entire organization under the best practices and regulatory requirements. Guidelines are designed and developed based on policies and procedures to ensure availability, privacy and integrity strategies.
| 30.7 | Corporate Security and Cybercrime - |
As part of the management of non-financial risks, the Corporate Security & Cyber Crime Area is responsible for detecting and responding to fraud and security incidents.
These tasks are carried out through specialized teams of investigations, cybercrime, forensic computing, internal fraud risk assessment, inspections, physical and electronic security, disaster risk management and strategic intelligence activities, which allow the safety of collaborators to be safeguarded, clients, suppliers and assets of the Group; as well as strengthening the organization’s resilience and rapid response capacity.
To this end, the designed strategy includes the use of cutting-edge technological tools in video surveillance, digital video surveillance and advanced risk profile analysis models, among other fronts. Likewise, there is highly specialized and trained talent on these fronts that allows the appropriate use of artificial intelligence, electronics, advanced analytics and cyber forensics, achieving high standards of efficiency and effectiveness in management.
Finally, The Group contributes to the security of the Financial System through union activities that it develops at the local level in the Association of Banks of Peru (ASBANC) and at the Latin American level in the Committee of Security Experts of the Latin American Federation of Banks (FELABAN).
| 30.8 | Model Risk - |
The Group uses models for different purposes such as credit admission, capital calculation, behavior, provisions, market risk, liquidity, among others.
Model risk is defined as the probability of loss resulting from decisions (credit, market, among others) based on the use of poorly designed and/or poorly implemented models. The sources that generate this risk are mainly: deficiencies in data, errors in the model (from design to implementation), use of the model.
The management of model risk is proportional to the importance of each model. In this sense, a concept of “tiering” (measurement system that orders the models depending to the importance according to the impact on the business) is defined as the main attribute to synthesize the level of importance or relevance of a model, from which is determined the intensity of the model risk management processes to be followed.
Model risk management is structured around a set of processes known as the life cycle of the model. The definition of phases of the life cycle of the model in the Group is detailed below: Identification, Planning, Development, Internal Validation, Approval, Implementation and use, and Monitoring and control.
| 30.9 | Risk of the insurance activity - |
The main risk the Group faces under insurance contracts is that the real cost of claims and payments or the timing of them, differ from expectations. This is influenced by the frequency of claims, the severity of the claims, the real benefits paid and the subsequent development of long-term claims.
Risk exposure is mitigated by diversification through a large portfolio of insurance contracts and by having different lines of business. Risks are also mitigated by careful selection and implementation of strategic underwriting guidelines, as well as the use of reinsurance agreements. Reinsurance underwriting is diversified in such a way that the Group is not dependent on any particular reinsurer; likewise, the Group’s operations are not dependent on any particular reinsurance contract.
Life insurance contracts –
The main risks that the Group is exposed to are mortality, morbidity, longevity, investment yield and flow, losses arising from policies due to the expense incurred being different than expected, and the policyholder decision; all of which, do not vary significantly in relation to the location of the risk insured by the Group, type of risk insured or industry.
The Group’s underwriting strategy is designed to ensure that risks are well diversified in terms of type of risk and level of insured benefits. This is achieved through diversification across insurable risks, the use of medical screening in order to ensure that pricing takes account of current health conditions and family medical history, regular review of actual claims experience and product pricing, as well as detailed claims handling procedures. Underwriting limits are in place to enforce appropriate risk selection criteria. For example, the Group has the right not to renew individual policies, it can impose deductibles and it has the right to reject the payment of fraudulent claims.
For contracts where death or disability is the insured risk, the significant factors that could increase the overall frequency of claims are epidemics, widespread changes in lifestyle and natural disasters, resulting in more claims than expected.
For retirement, survival and disability annuities contracts, the most significant factor is continuing improvement in medical science and social conditions that increase longevity.
Non-life insurance contracts (general insurance and healthcare) –
The Group mainly issues the following types of non-life general insurance contracts: automobile, technical branches, business and healthcare insurances. Healthcare contracts provide medical expense cover to policyholders. Risks under non-life insurance policies usually cover 12 months.
For general insurance contracts the most significant risks arise from climate changes, natural disasters and other type of damages. For healthcare contracts the most significant risks arise from lifestyle changes, epidemics and medical science and technology improvements.
The above risk exposures are mitigated by diversification across a large portfolio of insurance contracts and by having different lines of business. The sensitivity of risk is improved by careful selection and implementation of underwriting strategies of insurance contracts, which are designed to ensure that risks are diversified in terms of type of risks and level of insured benefits. This is achieved, in various cases, through diversification across industry sectors and geographic location.
Furthermore, strict claim review policies to assess all new and ongoing claims and in process of settlement, regular detailed review of claims handling procedures and frequent investigation of possible fraudulent claims are all policies and procedures put in place to reduce the Group’s risk exposure. Insurance contracts also entitle the Group to pursue third parties for payment of some or all costs. Also, the Group actively manages and promptly pursues claims, in order to reduce its exposure to unpredictable future developments that can negatively impact the Group.
The Group has also limited its exposure by imposing maximum claim amounts on certain contracts as well as the use of reinsurance arrangements in order to limit its exposure to catastrophic events.
Evolution of accidents
The following table shows the estimates of accumulated claims incurred as of December 31, 2023:
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Total | |||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||
|
Gross estimates of the
undiscounted amount of the claims: |
|||||||||||||||||||||||||||||||||
| At the end of the claim year | 1,397,461 | 963,490 | 1,039,516 | 1,628,377 | 1,154,065 | 1,450,470 | 1,538,564 | 2,000,372 | 1,687,397 | 1,724,774 | 14,584,486 | ||||||||||||||||||||||
| 1 year later | 1,027 | 3,453 | 3,475 | 1,693 | 6,872 | 9,523 | 38,655 | 137,774 | 317,513 | 614,260 | 1,134,245 | ||||||||||||||||||||||
| 2 years later | 129 | 577 | 3,441 | 4,265 | 8,398 | 5,701 | 13,276 | 71,537 | 197,750 | 191,387 | 496,461 | ||||||||||||||||||||||
| 3 years later | — | 53 | 505 | 3,902 | 4,665 | 2,263 | 5,093 | 22,757 | 89,213 | 99,775 | 228,226 | ||||||||||||||||||||||
| 4 years later | — | — | 81 | 278 | 3,148 | 4,684 | 2,712 | 7,511 | 24,184 | 44,274 | 86,872 | ||||||||||||||||||||||
| 5 years later | — | — | — | 28 | 262 | 4,008 | 5,379 | 2,762 | 7,492 | 15,491 | 35,422 | ||||||||||||||||||||||
| 6 years later | — | — | — | — | 40 | 438 | 4,331 | 7,395 | 2,405 | 4,663 | 19,272 | ||||||||||||||||||||||
| 7 years later | — | — | — | — | — | 93 | 358 | 5,953 | 6,962 | 6,197 | 19,563 | ||||||||||||||||||||||
| 8 years later | — | — | — | — | — | — | 42 | 66 | 4,639 | 9,695 | 14,442 | ||||||||||||||||||||||
| 9 years later | — | — | — | — | — | — | — | 29 | 356 | 1,648 | 2,033 | ||||||||||||||||||||||
|
Accumulated gross claims
and other directly attributable expenses paid for the year of occurrence. |
1,398,617 | 967,573 | 1,047,018 | 1,638,543 | 1,177,450 | 1,477,180 | 1,608,410 | 2,256,156 | 2,337,911 | 2,712,164 | 16,621,022 | ||||||||||||||||||||||
|
Liabilities / Gross Obligations
accumulated by claims |
3,672 | 6,335 | 8,955 | 13,396 | 30,289 | 34,361 | 81,747 | 321,842 | 839,516 | 1,421,449 | 2,761,562 | ||||||||||||||||||||||
| Discount event | (527 | ) | (775 | ) | (1,207 | ) | (1,687 | ) | (2,890 | ) | (3,597 | ) | (7,361 | ) | (27,666 | ) | (64,783 | ) | (83,109 | ) | (193,602 | ) | |||||||||||
|
Effect of Risk Adjustment for non-financial risk
|
— | — | — | — | — | — | — | — | — | 21,590 | 21,590 | ||||||||||||||||||||||
|
Gross LIC of the Temporary
Regime and Definitive Regime |
3,145 | 5,560 | 7,748 | 11,709 | 27,399 | 30,764 | 74,386 | 294,176 | 774,733 | 1,359,929 | 2,589,549 | ||||||||||||||||||||||
|
Gross provision for incurred
claims. |
6,290 | 11,120 | 15,496 | 23,418 | 54,798 | 61,528 | 148,772 | 588,352 | 1,549,466 | 2,719,859 | 5,179,099 | ||||||||||||||||||||||
The following table shows the estimates of accumulated claims incurred as of December 31, 2022:
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | Total | ||||||||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | ||||||||||||||||||||||||||||||
|
Gross estimates of the
undiscounted amount of the claims: |
||||||||||||||||||||||||||||||||||||||||
| At the end of the claim year | 1,141,142 | 800,436 | 998,136 | 1,073,982 | 1,698,250 | 1,193,707 | 1,433,243 | 1,538,374 | 1,828,421 | 2,034,760 | 13,740,451 | |||||||||||||||||||||||||||||
| 1 year later | — | 2,967 | 2,876 | 1,752 | 6,463 | 7,683 | 24,014 | 88,496 | 203,932 | 334,135 | 672,318 | |||||||||||||||||||||||||||||
| 2 years later | — | — | 2,797 | 3,113 | 8,586 | 4,570 | 14,697 | 63,339 | 168,287 | 186,582 | 451,971 | |||||||||||||||||||||||||||||
| 3 years later | — | — | — | 2,578 | 4,092 | 2,842 | 4,127 | 29,408 | 94,517 | 77,225 | 214,789 | |||||||||||||||||||||||||||||
| 4 years later | — | — | — | — | 3,178 | 3,085 | 2,408 | 6,004 | 44,507 | 41,660 | 100,842 | |||||||||||||||||||||||||||||
| 5 years later | — | — | — | — | — | 3,207 | 3,298 | 3,340 | 9,036 | 19,976 | 38,857 | |||||||||||||||||||||||||||||
| 6 years later | — | — | — | — | — | — | 2,041 | 4,258 | 4,259 | 9,282 | 19,840 | |||||||||||||||||||||||||||||
| 7 years later | — | — | — | — | — | — | — | 1,888 | 5,650 | 2,918 | 10,456 | |||||||||||||||||||||||||||||
| 8 years later | — | — | — | — | — | — | — | — | 2,022 | 6,941 | 8,963 | |||||||||||||||||||||||||||||
| 9 years later | — | — | — | — | — | — | — | — | — | 6,312 | 6,312 | |||||||||||||||||||||||||||||
|
Accumulated gross claims
and other directly attributable expenses paid for the year of occurrence. |
1,141,142 | 803,403 | 1,003,809 | 1,081,425 | 1,720,569 | 1,215,094 | 1,483,828 | 1,735,107 | 2,360,631 | 2,719,791 | 15,264,799 | |||||||||||||||||||||||||||||
|
Liabilities / Gross Obligations
accumulated by claims |
2,043 | 6,503 | 6,723 | 10,070 | 31,556 | 27,675 | 77,292 | 244,120 | 675,107 | 1,485,336 | 2,566,425 | |||||||||||||||||||||||||||||
| Discount event | (293 | ) | (580 | ) | (740 | ) | (1,101 | ) | (2,256 | ) | (2,051 | ) | (6,629 | ) | (19,828 | ) | (49,865 | ) | (90,322 | ) | (173,665 | ) | ||||||||||||||||||
|
Effect of Risk Adjustment for non-financial risk
|
— | — | — | — | — | — | — | — | — | 13,478 | 13,478 | |||||||||||||||||||||||||||||
|
Gross LIC of the Temporary Regime and Definitive Regime
|
— | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
|
Gross provision for incurred
claims. |
1,750 | 5,923 | 5,983 | 8,969 | 29,300 | 25,624 | 70,663 | 224,292 | 625,242 | 1,408,492 | 2,406,238 | |||||||||||||||||||||||||||||
| 30.10 | Capital management - |
The Group maintains an actively managed capital base to cover risks inherent in its business. The adequacy of the Group’s capital is monitored using, among other measures, the rules and ratios established by the SBS, the supervising authority of its major subsidiaries and for consolidation purposes. Furthermore, capital management responds to market expectations in relation to the solvency of the Group and to support the growth of the businesses considered in the strategic planning. In this way, the capital maintained by the Group enables it to assume unexpected losses in normal conditions and conditions of severe stress.
The Group’s objectives when managing capital are: (i) to comply with the capital requirements set by the regulators of the markets where the entities within the Group operate; (ii) to safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders; and (iii) to maintain a strong capital base to support the development of its business, in line with the limits and tolerances established in the declaration of Risk Appetite.
As of December 31, 2023, and 2022, the regulatory capital for the subsidiaries engaged in financial and insurance activities amounted to approximately S/33,452.6 million and S/31,754.6 million, respectively. The regulatory capital has been determined in accordance with SBS regulations in force as of said dates. Under the SBS regulations, the Group’s regulatory capital exceeds by approximately S/7,731.9 million the minimum regulatory capital required as of December 31, 2023 (approximately S/8,156.9 million as of December 31, 2022).
| 30.11 | Fair values - |
| a) | Financial instruments recorded at fair value and fair value hierarchy– |
The following table analyses financial instruments measured at fair value at the reporting date, by the level in the fair value hierarchy into which the fair value measurement is categorized. The amounts are based on the values recognized in the consolidated statement of financial position:
| 2023 | 2022 | |||||||||||||||||||||||||||||||||||
| Note | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||||||||||||||||||||
|
Financial assets
Derivative financial instruments: |
||||||||||||||||||||||||||||||||||||
| Currency swaps | — | 230,818 | — | 230,818 | — | 410,439 | — | 410,439 | ||||||||||||||||||||||||||||
| Interest rate swaps | — | 384,238 | — | 384,238 | — | 467,140 | — | 467,140 | ||||||||||||||||||||||||||||
| Foreign currency forwards | — | 334,562 | — | 334,562 | — | 500,348 | — | 500,348 | ||||||||||||||||||||||||||||
| Cross currency swaps | — | 35,754 | — | 35,754 | — | 98,656 | — | 98,656 | ||||||||||||||||||||||||||||
| Foreign exchange options | — | 1,104 | — | 1,104 | — | 1,349 | — | 1,349 | ||||||||||||||||||||||||||||
| Futures | — | 1,187 | — | 1,187 | — | 794 | — | 794 | ||||||||||||||||||||||||||||
| 12 | (c) | — | 987,663 | — | 987,663 | — | 1,478,726 | — | 1,478,726 | |||||||||||||||||||||||||||
| Investments at fair value through profit of loss | 6 | (a) | 2,983,312 | 919,499 | 1,079,850 | 4,982,661 | 2,619,090 | 608,714 | 971,530 | 4,199,334 | ||||||||||||||||||||||||||
| Financial assets at fair value through profit of loss | 810,582 | 350 | — | 810,932 | 768,187 | 614 | — | 768,801 | ||||||||||||||||||||||||||||
| Investments at fair value through other comprehensive income: | ||||||||||||||||||||||||||||||||||||
| Debt Instruments | ||||||||||||||||||||||||||||||||||||
| Corporate bonds | 6,176,329 | 7,139,979 | 68,842 | 13,385,150 | 6,103,452 | 6,874,613 | — | 12,978,065 | ||||||||||||||||||||||||||||
| Government treasury bonds | 9,722,319 | 867,883 | — | 10,590,202 | 7,917,699 | 768,441 | — | 8,686,140 | ||||||||||||||||||||||||||||
| Certificates of deposit BCRP | — | 10,935,253 | — | 10,935,253 | — | 7,019,479 | — | 7,019,479 | ||||||||||||||||||||||||||||
| Negotiable certificates of deposit | — | 482,047 | — | 482,047 | — | 607,218 | — | 607,218 | ||||||||||||||||||||||||||||
| Securitization instruments | — | 683,930 | — | 683,930 | — | 673,836 | — | 673,836 | ||||||||||||||||||||||||||||
| Subordinated bonds | 71,590 | 209,349 | — | 280,939 | 176,712 | 186,714 | — | 363,426 | ||||||||||||||||||||||||||||
| Other instruments | — | 297,220 | 54,397 | 351,617 | — | 121,642 | — | 121,642 | ||||||||||||||||||||||||||||
| Equity instruments | 147,681 | 173,253 | 13,868 | 334,802 | 159,240 | 160,738 | 16,377 | 336,355 | ||||||||||||||||||||||||||||
| 6 | (b) | 16,117,919 | 20,788,914 | 137,107 | 37,043,940 | 14,357,103 | 16,412,681 | 16,377 | 30,786,161 | |||||||||||||||||||||||||||
| Total financial assets | 19,911,813 | 22,696,426 | 1,216,957 | 43,825,196 | 17,744,380 | 18,500,735 | 987,907 | 37,233,022 | ||||||||||||||||||||||||||||
|
Financial liabilities
Derivatives financial instruments: |
||||||||||||||||||||||||||||||||||||
| Currency swaps | — | 429,365 | — | 429,365 | — | 749,420 | — | 749,420 | ||||||||||||||||||||||||||||
| Foreign currency forwards | — | 205,341 | — | 205,341 | — | 288,857 | — | 288,857 | ||||||||||||||||||||||||||||
| Interest rate swaps | — | 205,112 | — | 205,112 | — | 278,385 | — | 278,385 | ||||||||||||||||||||||||||||
| Cross currency swaps | — | 46,561 | — | 46,561 | — | 24,385 | — | 24,385 | ||||||||||||||||||||||||||||
| Foreign exchange options | — | 4,002 | — | 4,002 | — | 3,168 | — | 3,168 | ||||||||||||||||||||||||||||
| Futures | — | 1,618 | — | 1,618 | — | 1,450 | — | 1,450 | ||||||||||||||||||||||||||||
| 12 | (c) | — | 891,999 | — | 891,999 | — | 1,345,665 | — | 1,345,665 | |||||||||||||||||||||||||||
| Financial liabilities at fair value through profit or loss | — | 641,915 | — | 641,915 | — | 191,010 | — | 191,010 | ||||||||||||||||||||||||||||
| Total financial liabilities | — | 1,533,914 | — | 1,533,914 | — | 1,536,675 | — | 1,536,675 | ||||||||||||||||||||||||||||
Financial instruments included in the Level 1 category are those that are measured on the basis of quotations obtained in an active market. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
Financial instruments included in the Level 2 category are those that are measured on the basis of observable market factors. This category includes instruments valued using: quoted prices for similar instruments, either in active or less active markets and other valuation techniques (models) where all significant inputs are directly or indirectly observable based on market data.
Following is a description of how fair value is determined for the main Group’s financial instruments where valuation techniques were used with inputs based on market data which incorporate Credicorp’s estimates on the assumptions that market participants would use for measuring these financial instruments:
| - | Valuation of derivative financial instruments - |
Interest rate swaps, currency swaps and forward exchange contracts are measured by using valuation techniques where inputs are based on market data. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs, including the credit quality of counterparties, spot exchange rates, forward rates and interest rate curves. Options are valued using well-known, widely accepted valuation models.
A credit valuation adjustment (CVA) is applied to the “Over-The-Counter” derivative exposures to take into account the counterparty’s risk of default when measuring the fair value of the derivative. CVA is the mark-to market cost of protection required to hedge credit risk from counterparties in this type of derivatives portfolio. CVA is calculated by multiplying the probability of default (PD), the loss given default (LGD) and the expected exposure (EE) at the time of default.
A debit valuation adjustment (DVA) is applied to include the Group’s own credit risk in the fair value of derivatives (that is the risk that the Group might default on its contractual obligations), using the same methodology as for CVA.
As of December 31, 2023, the balance of receivables and payables corresponding to derivatives amounted to S/987.7 million and S/892.0 million respectively, See Note 12(c), generating DVA and CVA adjustments for approximately S/3.2 million and S/6.9 million respectively. The net impact of both items in the consolidated statement of income amounted to S/4.0 million of loss. As of December 31, 2022, the balance of receivables and payables corresponding to derivatives amounted to S/1,478.7 million and S/1,345.7 million, respectively, See Note 12(c), generating DVA and CVA adjustments for approximately S/7.5 million and S/11.2 million, respectively. Also, the net impact of both items in the consolidated statement of income amounted to S/6.0 million of loss.
| - | Valuation of debt securities classified in the category “at fair value through other comprehensive income” and included in level 2 - |
Valuation of certificates of deposit BCRP, corporate, leasing, subordinated bonds and Government treasury bonds are measured by calculating their Net Present Values (NPV) through discounted cash flows, using appropriate and relevant zero coupon rate curves to discount cash flows in the respective currency and considering observable current market transactions.
Certificates of deposit BCRP (CD BCRP) are securities issued at a discount in order to regulate the liquidity of the financial system. They are placed mainly through public auction or direct placement, are freely negotiable by their holders in the Peruvian secondary market and may be used as collateral in Repurchase Agreement Transactions of Securities with the BCRP.
Other debt instruments are measured using valuation techniques based on assumptions supported by prices from observable current market transactions, obtained via pricing services. Nevertheless, when prices have not been determined in an active market, fair values are based on broker quotes and assets that are valued using models whereby the majority of assumptions are market observable.
| - | Valuation of financial instruments included in level 3 - |
These are measured using valuation techniques (internal models), based on assumptions that are not supported by transaction prices observable in the market for the same instrument, nor based on available market data.
As of December 31, 2023 and 2022, the net unrealized loss of Level 3 financial instruments amounted to S/3.4 million and S/0.1 million, respectively. During 2023 and 2022, changes in the carrying amount of Level 3 financial instruments have not been significant since there were no purchases, issuances, settlements or any other significant movements or transfers from level 3 to Level 1 or Level 2 or vice versa.
| b) | Financial instruments not measured at fair value - |
We present below the disclosure of the comparison between the carrying amounts and fair values of the financial instruments, which are not measured at fair value, presented in the consolidated statement of financial position by level of the fair value hierarchy:
| 2023 | 2022 | |||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Fair value | Book value | Level 1 | Level 2 | Level 3 | Fair value | Book value | |||||||||||
| S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | S/(000) | |||||||||||
| Assets | ||||||||||||||||||||
| Cash and due from banks | − | 33,930,948 | − | 33,930,948 | 33,930,948 | − | 34,183,840 | − | 34,183,840 | 34,183,840 | ||||||||||
|
Cash collateral, reverse repurchase agreements and securities borrowing |
− | 1,410,647 | − | 1,410,647 | 1,410,647 | − | 1,101,856 | − | 1,101,856 | 1,101,856 | ||||||||||
| Investments at amortized cost | 9,338,213 | 362,100 | − | 9,700,313 | 10,188,927 | 8,849,683 | 292,335 | − | 9,142,018 | 10,445,729 | ||||||||||
| Loans, net | − | 136,698,135 | − | 136,698,135 | 136,698,135 | − | 140,753,972 | − | 140,753,972 | 140,753,972 | ||||||||||
| Due from customers on banker’s acceptances | − | 412,401 | − | 412,401 | 412,401 | − | 699,678 | − | 699,678 | 699,678 | ||||||||||
| Reinsurance contract assets | − | 872,046 | − | 872,046 | 872,046 | − | 744,008 | − | 744,008 | 744,008 | ||||||||||
| Other assets | − | 3,593,296 | − | 3,593,296 | 3,593,296 | − | 1,747,412 | − | 1,747,412 | 1,747,412 | ||||||||||
| Total | 9,338,213 | 177,279,573 | − | 186,617,786 | 187,106,400 | 8,849,683 | 179,523,101 | − | 188,372,784 | 189,676,495 | ||||||||||
| Liabilities | ||||||||||||||||||||
| Deposits and obligations | − | 147,704,994 | − | 147,704,994 | 147,704,994 | − | 147,020,787 | − | 147,020,787 | 147,020,787 | ||||||||||
|
Payables on repurchase agreements and securities lending |
− | 10,168,427 | − | 10,168,427 | 10,168,427 | − | 12,966,725 | − | 12,966,725 | 12,966,725 | ||||||||||
| Due to Banks and correspondents and other entities | − | 12,308,392 | − | 12,308,392 | 12,278,681 | − | 9,012,529 | − | 9,012,529 | 8,937,411 | ||||||||||
| Due from customers on banker’s acceptances | − | 412,401 | − | 412,401 | 412,401 | − | 699,678 | − | 699,678 | 699,678 | ||||||||||
| Lease liabilities | − | 512,579 | − | 512,579 | 512,579 | − | 578,074 | − | 578,074 | 578,074 | ||||||||||
| Bond and notes issued | − | 14,742,600 | − | 14,742,600 | 14,594,785 | − | 16,610,504 | − | 16,610,504 | 17,007,194 | ||||||||||
| Insurance contract liability | − | 12,318,133 | − | 12,318,133 | 12,318,133 | − | 11,154,008 | − | 11,154,008 | 11,154,008 | ||||||||||
| Other liabilities | − | 4,586,511 | − | 4,586,511 | 4,586,511 | − | 3,964,203 | − | 3,964,203 | 3,964,203 | ||||||||||
| Total | − | 202,754,037 | − | 202,754,037 | 202,576,511 | − | 202,006,508 | − | 202,006,508 | 202,328,080 | ||||||||||
The methodologies and assumptions used by the Group to determine fair values depend on the terms and risk characteristics of the various financial instruments and include the following:
| (i) | Long-term fixed-rate and variable-rate loans are evaluated by the Group based on parameters such as interest rates, specific country risk factors, and individual creditworthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the incurred losses of these loans. As of December 31, 2023 and 2022, the carrying amounts of loans, net of allowances, were not materially different from their calculated fair values. |
| (ii) | Assets for which fair values approximate their carrying value - For financial assets and financial liabilities that are liquid or have a short term maturity (less than three months) it is assumed that the carrying amounts approximate to their fair values. This assumption is also applied to demand deposits, savings accounts without a specific maturity and variable rate financial instruments. |
| (iii) | Fixed rate financial instruments - The fair value of fixed rate financial assets and liabilities carried at amortized cost are estimated by comparing market interest rates when they were first recognized with current market rates offered for similar financial instruments. The estimated fair value of fixed interest bearing deposits is based on discounted cash flows using prevailing market interest rates for financial instruments with similar credit risk and maturity. For quoted debt issued the fair values are calculated based on quoted market prices. When quoted market prices are not available, a discounted cash flow model is used based on a current interest rate yield curve appropriate for the remaining term to maturity. |
| 30.12 | Fiduciary activities, management of funds and pension funds - |
The Group provides custody, trustee, investment management and advisory services to third parties; therefore, the Group makes allocations and purchase and sale decisions in relation to a wide range of financial instruments. Assets that are held in a fiduciary capacity are not included in these consolidated financial statements. These services give rise to the risk that the Group will be accused of mismanagement or under-performance.
As of December 31, 2023 and 2022, the value of the net assets under administration off the balance sheet (in millions of soles) is as follows:
| 2023 | 2022 | |||
| Investment funds and mutual funds | 55,773 | 69,264 | ||
| Pension funds | 36,867 | 30,596 | ||
| Equity managed | 35,016 | 35,062 | ||
| Bank trusts | 3,949 | 4,269 | ||
| Total | 131,605 | 139,191 |
| 31 | COMMITMENTS AND CONTINGENCIES |
Legal claim contingencies
| i) | Madoff Trustee Litigation - |
In September 2011, the Trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) and the substantively consolidated estate of Bernard L. Madoff (the Madoff Trustee) filed a complaint (the Madoff Complaint) against Credicorp’s subsidiary ASB (now ASB Bank Corp.) in the U.S. Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). The Madoff Complaint seeks recovery of approximately US$120.0 million in principal amount, which is alleged to be equal to the amount of redemptions between the end of 2004 and the beginning of 2005 of ASB-managed Atlantic U.S. Blue Chip Fund assets invested in Fairfield Sentry Limited (Fairfield Sentry), together with fees, costs, interest and expenses. The Madoff Complaint seeks the recovery of these redemptions from ASB Bank Corp. as “subsequent transfers” or “avoided transfers” from BLMIS to Fairfield Sentry, which Fairfield Sentry in turn subsequently transferred to ASB Bank Corp. The Madoff Trustee has filed similar “claw back” actions against numerous other alleged “subsequent transferees” that invested in Fairfield Sentry and its sister entities, which, in turn, invested in and redeemed funds from BLMIS.
There has been significant briefing on issues related to these Madoff Trustee actions, and these cases have been pending for many years. In November 2016, the Bankruptcy Court issued a Memorandum Decision Regarding Claims to Recover Foreign Subsequent Transfers (the Memorandum Decision) holding that the recovery of certain subsequent foreign transfers is barred under the doctrine of comity and/or extraterritoriality, and dismissed the claims brought by the Madoff Trustee against a number of parties, including ASB Bank Corp. In March 2017, the Madoff Trustee filed an appeal (the Appeal) of the Memorandum Decision to the United States Court of Appeals for the Second Circuit, which reversed the Dismissal Order and remanded the matter to the Bankruptcy Court (the Second Circuit Opinion). In April 2019, the defendant-appellees, including ASB Bank Corp., filed, and the Second Circuit granted, a motion to stay the issuance of the mandate pending the filing of a petition for a writ of certiorari in the United States Supreme Court. The petition for a writ of certiorari was filed in the United States Supreme Court in August 2019. On or about June 1,2020, the United States Supreme Court denied the petition for a writ of certiorari. Following the denial of the petition for writ of certiorari, the judgment for dismissal by the Bankruptcy Court was vacated and the matter was remanded back to the Bankruptcy Court. The case now remains pending in the Bankruptcy Court. On March 25,2022, ASB Bank Corp. filed a Motion to Dismiss the Complaint. On May 24, 2022, the Madoff Trustee filed its opposition to the Motion to Dismiss. On July 14, 2022, ASB Bank Corp. filed its reply memorandum of law in further support of its Motion to Dismiss. On November 18, 2022, the Bankruptcy Court denied the Motion to Dismiss presented by ASB Bank Corp and give to ASB Bank Corp until February 1, 20223 to file an answer to the Complaint. ASB Bank Corp submitted its response to the complaint within the established period.
| ii) | Fairfield Litigation - |
In April 2012, Fairfield Sentry (In Liquidation) and its representative, Kenneth Krys (the Fairfield Liquidator), filed a complaint (the Fairfield Complaint) against ASB (now ASB Bank Corp.) in the Bankruptcy Court (the Fairfield v. ASB Adversary Proceeding). The Fairfield Complaint seeks to recover US$115.2 million in principal amount from ASB Bank Corp., representing the amount of ASB’s Bank Corp. redemptions of certain investments in Fairfield Sentry, together with fees, costs, interest and expenses. These are essentially the same funds that the Madoff Trustee seeks to recover in the Madoff Trustee litigation as described above. After the Fairfield Complaint was filed, the Bankruptcy Court procedurally consolidated the Fairfield vs. ASB Adversary Proceeding with other adversary actions brought by the Fairfield Liquidator against former investors in Fairfield Sentry.
Similar to the Madoff Trustee litigation described above, the Fairfield v. ASB Adversary Proceeding and related adversary actions have been pending for many years. In October 2016, the Fairfield Liquidator filed a Motion for Leave to Amend (the Motion for Leave) various complaints, including the Fairfield Complaint. Certain defendants, including ASB Bank Corp., filed a motion to dismiss (the Motion to Dismiss) and a consolidated memorandum of law (i) in opposition to the Motion for Leave and (ii) in support of the Motion to Dismiss. In December 2018, the Bankruptcy Court entered a memorandum decision granting in part and denying in part the Motion to Dismiss and the Motion for Leave (the Memorandum Decision). In March 2019, the Fairfield Liquidator submitted a form of a stipulated order dismissing the adversary proceeding against ASB Bank Corp. (the Dismissal Order), as directed by the Bankruptcy Court, but filed notices of appeal, including of the dismissal of the claims asserted against ASB Bank Corp. and other defendants, in May 2019. The appeal remains pending.
Through a Significant Event dated January 30, 2024, Credicorp Ltd. has informed the market that the litigation i) and ii) mentioned above, pending against ASB Bank Corp. before the District Bankruptcy Court, have been totally and definitively resolved. South of New York City, USA (Bankruptcy Court). On January 30, 2024, (i) the Madoff Trustee and ASB Bank Corp. entered into a settlement and release agreement (the “Madoff Agreement”), and (ii) the Fairfield Liquidator and ASB Bank Corp. simultaneously entered into a settlement and release agreement (the “Fairfield Agreement”), which, without admission of liability, resolves all disputes related to the Madoff Lawsuit and the Fairfield Lawsuit, referred to in sections i) and ii) above, between ASB Bank Corp., the Madoff Trustee and the Fairfield Liquidator. Under the terms of the agreements, after the approval of the Madoff Settlement by the Bankruptcy Court, among other things, ASB Bank Corp. will pay the Madoff Trustee the amount of US$42,750,000.00 (for which ASB Bank Corp. and its affiliates are properly provisioned) and the Madoff Trustee and the Fairfield Liquidator will dismiss the Madoff Claim and the Fairfield Claim, as applicable, definitively and without cost to either party. A copy of the Madoff Agreement has been filed with the Bankruptcy Court and is pending approval by the Bankruptcy Court.
| iii) | Government Investigations - |
At the end of 2019, the former Chairman and the current Vice Chairman of the Board of Directors of Credicorp, in their respective capacities as Chairman of the Board and as a Director of BCP Stand-alone, were summoned as witnesses by Peruvian prosecutors, along with 26 other Peruvian business leaders, to testify in connection with a judicial investigation that is being carried out regarding contributions made to the electoral campaign of a political party in the 2011 Peruvian presidential elections. The former Chairman informed prosecutors that in 2010 and 2011 Credicorp made donations totaling US$3.65 million to Fuerza 2011 campaign (in total amounts of US$1.7 million in 2010 and US$1.95 million in 2011). These contributions were made in coordination with the General Manager of Credicorp at that time. While the amount of these contributions exceeded the limits then permitted under Peruvian electoral law, the law in place at that time provided no sanction for contributors, and instead only for the recipient of the campaign contribution.
The former Chairman also informed the prosecutors that in 2016, three subsidiaries of Credicorp (BCP Stand-alone, Mibanco and Grupo Pacifico) made donations totaling S/711,000 (approximately US$200,000) to the Peruanos Por el Kambio campaign. These contributions were made in compliance both with Peruvian electoral law and with Credicorp’s own political contributions guidelines, adopted in 2015.
The Peruvian Superintendencia del Mercado de Valores (’SMV’ for its Spanish acronym) has initiated a sanctioning process against Credicorp, for failing to disclose to the market, in due course, the political campaign contributions in the years 2011 and 2016. The SMV also has initiated a sanctioning process against three subsidiaries of Credicorp (BCP Stand-alone, Mibanco and Grupo Pacifico), for failing to disclose to the market, in due course, the political campaign contributions made in connection with the 2016 presidential elections. The SMV notified Credicorp, BCP, Mibanco and Grupo Pacifico with first instance Resolutions on these proceedings. The mentioned Resolutions imposed pecuniary sanctions (fines) on Credicorp and the three subsidiaries as a consequence of these sanctioning processes. Credicorp, BCP, Mibanco and Grupo Pacifico appealed the Resolutions. As the appeals were not resolved within the period provided for by the legal regulations, Credicorp and each of the three subsidiaries proceeded to file contentious-administrative lawsuits against the SMV Resolution (due to negative administrative silence). However, both Credicorp and its three subsidiaries proceeded to pay the fines imposed by the SMV, in compliance with the provisions of Peruvian legislation. To date, the contentious-administrative actions are being processed before the Judiciary.
Credicorp believes that neither the contributions disclosed by our former Chairman and the current Vice Chairman in 2019 nor the related SMV sanctioning processes pose a significant risk of material liability to the Company. Furthermore, Credicorp does not believe that either of the contributions will have material effect on the Company’s business, financial position or profitability, since the fines imposed by the SMV have already been paid.
On November 11, 2021, Credicorp disclosed that its incoming CEO, Mr. Gianfranco Ferrari de las Casas, informed the company that he was notified of a Prosecutor’s Decision issued by the Corporate Supraprovincial Prosecutor’s Office Specialized in Officer Corruption Offenses Special Team - Fourth Court Division (“Fiscalía Supraprovincial Corporativa Especializada en Delitos de Corrupción de Funcionarios Equipo Especial - Cuarto Despacho”, for its name in Spanish). Through such notice, Mr. Ferrari was informed that he has been included in the preparatory investigation carried out against Mr. Yehude Simon M. and an additional sixty-five (65) individuals on the grounds of, in his particular case, alleged primary complicity in the alleged crime against the public administration, aggravated collusion, incompatible negotiation or improper use of position and criminal organization detrimental to the Peruvian State, in connection with the financial advisory services provided by BCP Stand - alone to the Olmos Project. To date Mr. Ferrari is still included in the preparatory investigation. Mr. Ferrari has already filed certain legal defenses in order to be excluded from the investigation.
Credicorp has reviewed the performance of the officers of Banco de Crédito del Perú in relation to the financial advisory services provided by the Bank in connection with the Olmos Project and has concluded that the facts under investigation do not give rise to any liability of Banco de Crédito del Perú or its officers. Credicorp bases this view on the qualified opinion of external consultants specialized in the matter. Therefore, Credicorp considers that the opening of the aforementioned preparatory investigation will not have any impact on the normal operation of the company, nor will it affect the dedication and performance of its officers in undertaking their regular duties.
| 32 | SUBSEQUENT EVENTS |
At the beginning of January 2024, the Bank issued bonds for a total of US$800 million with a term of 5 years in the international market. This operation included the issuance of bonds valued at US$500 million and bonds in soles for a total of S/1,150 million with coupon rates of 5.85 percent and 7.85 percent, respectively.
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