EPU - Amidst Ongoing Turmoil Credicorp Still Offers Attractive Upside

• Credicorp had a weak fourth quarter on a core pre-provision basis, with excess liquidity, weak loan demand, and IT investments, pressuring results, but provision expense was substantially lower than expected.
• Credicorp is still seeing accelerating non-performing loan formation, but the reserves look adequate, deferred loans are regaining paying status, and Peru's economy should rebound in '21.
• Political turmoil, including a proposed cap on some loan rates, is not helpful but hasn't been all that unusual in Credicorp's history.
• Investments in digital services are weighing on near-term results, but Credicorp is seeing increasing digital customer engagement, paving the way for more efficient long-term operations.
• Credicorp should see a strong earnings recovery over the next two to three years, and long-term growth of 7% to 8% supports a double-digit annualized return today.

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