Credicorp (BAP) Investor Update summary

Strategic Innovation and Growth Objectives

• Aims to generate 10% of risk-adjusted revenues from disruptive initiatives by 2026, with Yape, Tenpo, Culqi, and iO as leading contributors and a growing focus on insurtech, health tech, and transformative technology.

• Digital transformation has increased BCP's digital customer base to 72%, improved engagement, and reduced costs, with digital transactions now 83% of total monetary transactions.

• Yape has reached profitability ahead of forecasts, is expanding lending and payments, and is expected to represent 65% of disruption revenue by 2025, with lending projected to become its main business by 2027.

• Tenpo in Chile is scaling rapidly, aiming for a full banking license in 2025, and demonstrates strong credit discipline and customer satisfaction.

• New 2026 aspirations for Yape include 16.5 million active users and S/600 billion in annual transactions.

Portfolio Management and Collaboration

• Innovation initiatives are sourced and developed at the business line level, with centralized strategy and governance ensuring alignment and agility.

• Krealo, the corporate venture fund, prioritizes strategic fit and value creation for both Credicorp and startups, with a VC-inspired, hands-on approach and structured exits.

• Collaboration across business units accelerates product launches and market penetration, as seen with Monokera (embedded insurance), tyba (wealth tech), and Culqi (payments), leveraging group assets and expertise.

• Portfolio health is monitored through metrics on activity, performance, and confidence, with a disciplined approach to scaling or discontinuing initiatives.

• Incentive structures are tailored to foster self-disruption, with startup-like compensation for innovation leaders and ongoing review to balance competition and collaboration.

Financial Performance and Capital Allocation

• Consolidated ROE reached 17.6% in H1 2024, on track for the 18% target by 2025, with BCP already at 23.7% ROE, despite macroeconomic headwinds.

• Core income growth has outpaced expenses, driven by digital and innovative initiatives, while risk appetite remains aligned with GDP trends.

• Disruptive initiatives currently account for about 8% of income, expected to exceed 10% by 2025-2026, with Yape, Tenpo, Culqi, and iO as main contributors.

• Yape's revenue mix is shifting, with payments at 40-50%, floating revenue declining, and lending expected to reach 20-30% by 2026, eventually becoming the largest segment.

• Dividend policy remains focused on distributing excess capital, with a payout ratio of 75% of profits for the current year.