Credicorp Ltd. (BAP) Earnings Call Transcript & Summary

Good morning, everybody and welcome to our Credicorp 2023 Investor Day. I am Milagros Ciguenas, IRO of Credicorp. Thanks to all of you for being here and thank you who are connected through the webcast. During the next few hours, you will hear about how we are powering growth through different economic cycles, our disciplined approach to innovation and the different milestones that we have achieved. Our management will also share about our future strategies, the opportunities we see in our markets and how we are driving sustainable value creation as we look towards the future. You will also have the opportunity to ask questions. On this slide, you can see a detailed agenda for this morning with the different topics that we will cover. The micro finance presentation will be made in Spanish. If you need translation, please use the headphones that you have available on your tables. After management presentations, we will have a 5-minute break. And after that, we will have the Q&A session. We will first cover the questions that we have here at the room and later on, we will cover the questions that we are -- that we will receive through the webcast. For those of you who are connected through the webcast, you will see at the lower right side of your screen that there is a QR code. Please scan the QR code to submit your questions, and you can submit them at any time during the presentations. Now I will pass for a moment so you can read our safe harbor. And let me go just through a couple of considerations. Today's management presentations include forward-looking statements reflecting our management's current beliefs and expectations about Credicorp's future plans, strategies, growth and results. These forward-looking statements are based on current information and actual results will depend upon a number of known and unknown risks and uncertainties that could cause actual performance to differ materially from what we currently expect. Therefore, you should not rely on these forward-looking statements as an assurance of the company's future performance. Please take a moment to read this slide. Finally, as you may have noticed, our Executive Chairman, Luis Romero, is not here with us in New York. As he will explain shortly he was not able to travel. But we made some adjustments so we can have him through a video. After Luis Romero's welcome remarks, we will have Gianfranco Ferrari, our CEO, here with us to start with the presentations. Let's hear Luis Romero.

Good morning, everyone. Welcome to Credicorp's Investor Day. I'm so sorry. I'm unable to be there with you in New York as planned. I was very much looking forward to meeting with all of you in person, something I think we all come to appreciate after the pandemic. Unfortunately, I fractured a rib and my doctor have advised against traveling in my condition. So I find myself presenting remotely once again and look forward to seeing many of you in future meetings. But you are in a very able hands of the management and IR team there. What we've come to present and discuss today will be great pride as we report on the substantial progress we made since my initial address at [ Sherman ] 3 years ago. After today's event, we hope we will share our enthusiasm for what's ahead at Credicorp. With that, let's get started. The operating environment for Credicorp in Peru has significantly improved in recent months restoring a renewed source of optimism compared to just 7 months ago. The current government comprises ministers whose collective experience and skills are superior to also previous administrations, [indiscernible] private sector companies. Peru has current strength, including abundant natural resources, a diversified economy, and a strong macroeconomic management contribute to overall a serious growth potential. And with the lost energy transition now rapidly accelerating, a significant surge in global corporate demand is anticipated in the coming decades. With Peru, a strategically positioned to play a crucial role as one of the new corporate producers worldwide today. These favorable dynamics position the country for sustained economic expansion beyond potential short-term volatility providing an opportunity for Credicorp to advance its leadership agenda of inclusion and financial education, both crucial to alleviate poverty. In 2020, we convened 30 members of our leadership team from across our organization to embark on an ambition to endeavor, integrating sustainability into our core business strategy to ensure long-term competitiveness. Over a 6-month period, this team developed a comprehensive road map with unwavering support from the Board. We initiated a cultural transformation within Peru's third most financial institution, empowering it to become a catalyst for significant change in the markets where we operate. Reflecting on our progress today, I take great pride in having surpassed our expectation for realigning our entire organization while further advancements are needed, particularly with respect to the environment, so we recently closed the implementation of our corporate environmental strategy. Credicorp aims to assume leadership in the realm of sustainability and [indiscernible] fostering the transition through our customer while serving as a guiding force for other industry to embrace similar commitment unchanged. In November, I had the privilege of going on the road to meet a number of our investors. This occasion is served as a crucial platform not only to update you on Credicorp's progress on many fronts, but more importantly, to actively listen to your perspectives. Your input and feedback have been very valuable throughout our sustainability journey and now we suggested [indiscernible] between management and the long-term sustainability and value creation that you as investors in Credicorp seek. I am pleased to report that we have taken action and are currently implementing a program that means executive compensation to the fulfillment of indicators, which promote long-term value generation. Today's presentation will highlight Credicorp's remarkable ability to achieve sustainable growth amid various market cycles. This reflects our dedication to a consistent, long-term strategy, complemented by our capacity for [indiscernible] adaptation and transformation. We prioritize long-term objectives while effectively navigating short-term challenges. Our strong foundation for sustainable growth is provoked upon attracting and maintaining top tier timing embracing cutting-edge digital capabilities and maintaining prudent operating practices. Three years ago, we implemented a new operating structure that actively manages our previously independent lives of business, enabling us to optimize performance, leverage best practices, softer synergies and regulatory successive models across our organization. During today's presentation, you will hear how this model generate sustainable value for our stakeholders. Finally, I would like to extend my sincere appreciation for the trust you have placed in our board, our management team. We are committed to advancing our agenda of financial inclusion and financial education, executing strategies that enhance our competitiveness, deliver value creation and extracting our business resilience. We'll continue to [ provoke ] as we navigate the path ahead is highly appreciated. Thank you.

Good morning, everyone, and apologies for the initial glitch. When we started watching the video, I thought we are all going through a leap reading challenge, but that was not the case. It's really a pleasure to be here and to see a lot of familiar faces in person after a few years -- complicated years that we all went through. I'm very excited to be here with all the Credicorp senior team, hosting our fifth Investor Day to update you on our corporate strategy, our key -- the key milestones and deals ahead. But before moving forward with my presentation, I would like to share a video with you who encapsulates who we are, our purpose, strategy and main achievements as we continue to power sustainable growth. So can we go with the video. [Presentation]

With this, let's take a deeper dive on how we are powering sustainable growth through economic cycles. Credicorp has successfully navigated economic challenges and grew our prices by implementing a robust long-term strategy, embracing short-term adaptability and demonstrating a willingness to serve this route. Our capacities to manage through prices is a key competitive advantage particularly in Peru, where we've seen significantly volatility over the years, driven by political, macro and climate-related events. Notwithstanding these challenges, we operate in markets with significant growth potential and seek to decouple from the macro by including more people in the financial system, increasing engagement and capturing a higher share of wallet within an ever-growing customer base. Even in the most challenging environment, our core principles, almost all remain unchanged. We continue to strengthen our core while investing in transformation and disruption, all driven by our long-term vision. This fundamental approach has consistently generated sustainable value for our stakeholders. Our primary goal is to improve lives, increase financial inclusion and strengthen businesses to maximize their full potential. We are confident that investing in disruptive initiatives will allow us to continue to anticipate our customer needs and evolving trends. While investments in disruption have temporarily impacted our efficiency ratio, we anticipate improving this ratio over time by continuing to strengthen our parenting advantage and capitalize on synergies among our businesses. Simultaneously, we will maintain a solid ROE as we continue implementing these strategies. On the next slide, you'll see how each of our businesses is leveraging investments in innovation to build on core capabilities and strengthen our position even further. We proactively manage our business portfolio, leveraging our core strengths, our brand, scale and our extensive network of long-term client relationships. We prioritize such disruption to stay ahead of others, ensuring we are well positioned for future growth and for continued delivery of sustainable value. Our agile and self-disruptive mindset is part of Credicorp's DNA. We encourage each business to constantly test and strengthen its leading position and competitive moats and to capture new opportunities by leveraging innovation. Throughout the morning, you'll hear from our business leaders on how disciplined innovation has played a key role in driving disruption and growth opportunities across our organization. And as Francesca and Raimundo will show you, we are complementing our line of businesses with disciplined growth of digital disruptors while multiple monetization opportunities. As we continue to expand these initiatives, a robust set of governance practices has been put in place that we introduced to you at last year's Digital Day. And Francesca will provide you an update today on how we are finally evaluating and win our red-lighting projects. All this innovation, disruption and investment is aimed at unlocking the vast potential of the markets in which we operate. Let's have a look at how we view the opportunity in front of us. We operate in an unserved market with great potential. When compared to its neighbors, Peru's financial market continues to offer significant room for growth in terms of loan penetration and financial inclusion. We maintain a long-term perspective on our market opportunity, supported by a well-defined strategy and strong core capabilities. We're building ecosystems and further developing our digital payment solutions to expand the addressable market while simultaneously incorporating new verticals that will drive increasing engagement. Increasing financial services penetration enable us to sustain our leadership, enlarge our market potential and successfully navigate through business cycles, while our long-term strategy remains unchanged. Our core principles of North Stars serves as the foundation of our long-term strategy, which are outlined on the left side of the slide. These principles are the primary drivers behind our ability to achieve strong performance independent of GDP growth. In addition to our 3 main areas of focus, we adapt to our current operating context in the short term by implementing current risk, management practices at the low end of the cycle. Throughout this process, we relied on our client centricity to improve our product value proposition and prepare for future growth. By combining this management flexibility with our dedication to serving our clients, we're willing to strengthen our position and drive sustainable growth. This approach is also aligned with achieving our targeted efficiency ratio and ROE to meet our financial objectives. One of our North Stars is enhancing customer experience. We recognize that financial services are becoming increasingly commoditized and what will continue to truly set us apart is our commitment to delivering an exceptional customer experience. Our second star is efficiency. Through the development of digital distribution ecosystems and the implementation of cost-effective physical distribution across all of our businesses, we expect to boost income and realize unitary cost reductions. Finally, our third North Star is sustainable growth. As I mentioned before, we operate in high potential, largely untapped markets and segments. To achieve sustainable growth, we are expanding into new verticals within payments and not quickly bringing the previously unbanked into the financial system. We are also scaling business models in a more cost-effective way such as the hybrid model at Mibanco, Bancassurance of Pacifico and digital platforms for the affluent at Credicorp Capital. A fundamental differentiator is our parenting advantage. We'll have a look on the next slide at how we leverage synergies among our businesses to create more value for our stakeholders. As mentioned by Mr. Romero in his opening remarks, 3 years ago, we implemented an operating structure that effectively manages our previously independent line of businesses. This structure allows us to optimize performance through all the cycles, leverage best practices, foster synergies and replicate successful models through our organization. We'll refer to this approach as parenting advantage. By standardizing and coordinating a number of our operations, we have achieved greater efficiency, knowledge synergies and the ability to drive consistent success across our diverse business units. We have prioritized coordinating our standardizing activities in 3 key areas: first, attraction and retention of topnotch talent. We consider talent a critical aspect for successfully accelerating our innovation agenda. Therefore, we actively invest in building strong tech capabilities and cultivate digital talent from both within and outside organization. Second, we have made significant progress in developing a very robust data lake that houses extensive data. This infrastructure empowers us to model client behavior in detail. Enabling personalized offerings and pricing but aligned with their unique needs and preferences. And finally, the last element of the parenting advantage is the development of robust processes and controls throughout our organization. By coordinating these efforts, we can establish standardized and effective practices that promote efficiency, risk management and compliance across all areas of our organization. All these efforts have yielded swift and positive results. By leveraging these initiatives, we've achieved notable progress in delivering enhanced customer experience and driving overall organizational growth. These achievements, which will be explained in detail, are reflected on this slide, showcasing enhanced customer experience, improved operating efficiency and strong customer growth across our lines of business. We believe a substantial part of this growth will be achieved, supported by our continuous focus on driving financial education and inclusion. As a [indiscernible] of change, financial education is one of the primary ways in which we can foster sound decision-making, promote economic equality, and ultimately increase the positive impact of our initiatives in the communities in which we operate. BCP's financial educational web series, [indiscernible] reached a record of 110 million visits last year proving how wide and impactful our actions can be. At the same time, 2.7 million people became part of our financial system through Yape, while 56% of individuals financially included by Mibanco were women. We believe that our role in financial inclusion and education is key to continue growing and further decouple from macro volatility. As we tap into new segments and markets in a way that is sustainable, profitable and adequate to clients. In closing, I would like to share with you an additional step in our sustainability journey. We're happy to announce the completion of a comprehensive corporate environmental strategy set to be implemented starting this quarter. This strategy covers the development of capabilities, including environmental risk management, promotion of transition financing and measurement of our portfolio's carbon footprint. As we move forward, our commitment to sustainable growth and responsible business practices will remain at the center of all we do. Now I will leave the floor to Francesca Raffo, Chief Innovation Officer. Thank you.

Thank you, Gianfranco. And good morning to all here and connected through the web as well. So on our Digital Day, we shared a Credicorp's decision to create an innovation office. This in response to what we believe, which is disruption is a key skill for Credicorp in the future since we have been implementing our approach to our corporate innovation. And we've been clarifying strategy around domains, horizons and also governance. But in addition to that, we are building a portfolio view, which I will share in a few minutes. During the year, we have been sharing with you our ambition to contribute to Credicorp through disruptive innovation, 10% of revenues by 2025. This is our most goal ambition and it's also governed by clear investment boundaries. Boundaries expressed in ROE. As you can see, between 120 and 150 basis points of ROE and also 300 basis points of efficiency cost. We've been improving our discipline to gain efficiency, to gain speed and transparency. And today, I want to share the 3 ways where we are working through innovation and in a disciplined way to enhance our disruptive entrepreneurial model to provide an extra level of support to the entire corporation and how we are building our portfolio view around our ventures. So let me start with the entrepreneurial model. At the left, you see how we govern ourselves. At the top, you see the innovation committee, which is responsible for strategy, ambition and also for making clear decisions on specific ventures. The innovation office in the middle is in charge of orchestrating the entire innovation process throughout the different business lines. And also giving an effort and sharing knowledge of each individual lab throughout the innovation units. We also are very keen in lessons learned and consistency throughout the innovation process and to be very fast to adapt to market conditions. The other issue here is the way we execute. This is the entrepreneurial model. We do it through a decentralized model using different innovation units. Whether these are labs, accelerators or speedboats, these units remain strategically located within the LOBs to foster disruption alignment among them. And this also leverages the parent advantage, the capability of the innovation unit to use what the parent brings to the innovation. The teams also meet monthly. So in this way, we can share lessons, methods and execution and also challenge performance. So let me share a couple of examples of what we've been doing this year. Since 2022, 10 independent board members, 4 of future women have joined Krealo's venture board. We have also changed Krealo's compensation model, linking it to driving a more long-term value creation for Credicorp that's attracting a more entrepreneural and also disruptive talent. Using the speedboat model, we are soon to launch a 100% virtual credit card EO to the Peruvian Market. And this is also done with an independent team that uses the capabilities that BCP offers like risk, licensing, accounting and so forth. Another more known example for you is Yape, which through its independent model has been able to use BCP's power to create a new way of serving customers and therefore, achieving what we call irrational goals made real. On the second front, on providing an accelerated support for the corporation, our innovation system around strategy, governance and enablers gives us a better view of the entire innovation process. For example, on strategy, we continue to double click on our $20 billion ton horizon 1 opportunities. By, for example, shedding light on initiatives that are performing below potential, like Buy Now, Pay later, deprioritizing certain terms in Chile, for example, SME and corporate and also identifying white spaces where we think we can contribute more and move faster such as remittances. On [indiscernible], we have created a special payment strategy team, which includes Yape, cookies acquirer, BCP's invoicing teams and C2B payments to bring our go-to-market strategy to capture 50% of the payment flow in Peru. We're also dedicating flexible teams to explore moving [indiscernible] the paths; one in health tech and also in generative AI opportunities. On the enabling side, we have improved our valuation methods. And these are very based on innovation stage. Led by the finance team, we have set clear methods and parameters to calculate value, whether it's cost, market or an income approach. We're also enhancing design thinking, agile abilities to reduce product market [ fleet ] by 5 months. On the third front, we are building the portfolio disruption view. Here, we are doing a lot of things to track, coverage, performance at our portfolio, domain and venture level, and we're also tracking accurately initiatives and how initiatives are targeting their TAMs or their serviceable markets, and how they are performing and how confident we are and that we are achieving the financial objectives. For example, on the payment and the retail domain, our coverage is mostly on target. Clients in Peru and Chile, we're working to give them a more value-added proposition through wallets, micro lending, Buy Now Pay Later virtual cards. Our performance is mixed. As I mentioned before, we are challenged on growth in Buy Now Pay Later, and we're also working on alternatives to fund our neobank in Chile giving the market size. Another key factor to construct a healthy portfolio is the discipline to track initiatives and their key results required on each of the final stages. Today, all execution teams have Credicorp, and labs and speedboats know what they need to achieve in order to receive more funds to go to a next stage. Additionally, this allows us to make better and more timely decisions. Like taking maybe larger risks in more certain areas like the one I mentioned, EO or buying or building to leapfrog some stages like [indiscernible], which I will cover in a couple of minutes. So mostly -- briefly let me share 4 examples to show you how disciplined and how this method is working throughout our ventures. EO is a 100% virtual credit card soon to be launched in the market, where we have signed a considerable investment compared to other initiatives because we are planning to gain 10% of the affluent credit card market in Peru. We are working with a new core system, better architecture and improved UX tools. All of these much needed by BCP and will probably soon be used once EO is launched. Monokera illustrates how we pursue expanding terms. As mentioned before, we have an underserved market in terms of insurance in the region. This Colombian insurtech platform will help us achieve connectivity between the insurer, the creation of the products and the distribution where you see Mibanco, BCP and Yape to be able to embed finance, embed insurance in different customer journeys much, much faster. This is an opportunity for growth for us. Tenpo is a push to a new market where the opportunity to grow in the mass retail banking segment is very big. Over the past 12 months, Tenpo has grown from a wallet to a more robust financial offering with much more products and also a much broad portfolio with users reaching approximately 15% of the Chilean adult population. Thus, it's time to shift into lending and to a clear pass-through monetization. All the results are promising and gross processed volumes in the first quarter for 2023 are 3x larger than the previous year, reflecting high engagement and a clearer path to revenue. We are awaiting regulatory approval to launch our card and expected to be the first non-bank insurer for Chile. Now I will leave Raimundo to share Yape's strategy, imperative results and the monetization path. Thank you.

Thank you, Francesca. Good morning to everyone. Really happy to be here again to talk a little bit about Yape's results and our plans going forward. So we truly believe that Yape is the best example of our disciplined approach to innovation through our -- through constant decision-making and fast execution. We started Yape and you can see this through the results of Yape. We started Yape facing a lot of challenges since the beginning. One, we had -- we must stop the initial target segment. University students were not interested in digital payments. We have discussions around why a new brand. This doesn't have a business case and so forth. Despite all that, we followed our conviction that this was our best bet to win the world cash and we went through. After finding the right product market fit, we felt very comfortable and decided to scale it, right? We defined a maximum CAC. We leveraged operating advantage through BCP's network and set up our first irrational goal, which was PEN 1 million. In 2018, we achieved that goal and immediately figured out, hey, this is a network business. This is a [indiscernible] situation and we really need to double down. So we defined again the next irrational goal, PEN 10 million. And we put everything behind that. We -- management incentives, investment, BCP's parenting advantage, independents, whatever it takes to get to that PEN 10 million. After a couple of years -- 2, 3 years, in 2022, we reached that goal last July. And now we come to the next phase. What is that? It's okay. What comes next when a decision -- launching new business lines, et cetera, and this is what I'm going to talk to you about in the next slides. So as one of the top 3 digital banks in the country, we continue to focus on growth, usage and customer experience. We are very happy that in the last year, our monthly active users have reached almost 9 million and even more relevant is that each monthly active user is doing 10 more transactions a month in the app, 10 more payments [indiscernible]. In parallel, we worked a lot in terms of stability and in terms of user experience, and this has allowed us to increase our NPS to 73, which is significantly higher than any other financial institution or wallet in the country. Last year, we presented 3 business lines with very aggressive targets. On payments, we are executing very fast, and we feel very comfortable that we are reaching numbers that we expected to reach in 2026. We have 9 million active users, over 10 billion of transaction volume every month. And our first product, which is mobile top-ups, already has around 35% of market share. In our second business line around the marketplace, we launched Yape Promos, which is the first a proof of concept of that we can sell products and services in Yape. The most promising result is that we have over 7 million sessions in the Yape Promos a month, which is around 1/3 of the top e-commerce in Peru despite being a very limited portfolio. And the third front, we have launched our initial loans product, which I will share in detail in a couple of slides. So as I mentioned, we continue to be the top payment networks in Peru. Our activity and transaction levels are growing around 2 -- more than 2x a year, that together with what Gianfranco presented means that there is still a huge potential to grow. We have -- and relative to competition or to other alternatives with 9x the size of [indiscernible], and we are 2x in terms of volume, the size of the largest acquirer in the country. In terms -- going to detail in the payments products, we have launched 4 relevant products in the last months. And here in the chart, you can see the number of payments based on the month since launch. Our first product, which is the top line is the mobile top-ups, which I mentioned. We're reaching almost 12 million top-ups a month, which is around 35% of the [indiscernible]. The newest product we launched is utility payments and launched early this year, and it's following a very similar trajectory than what we saw with top-ups. This is still probably closer to 2% of the TAM where we are. So the potential is very significant. And this line in the bottom, which seems to be growing slower, it's still growing around 10% a month is our payment in POS, our QR payments in POS, which generated admission fees for us. It has more challenges to scale because we need to train agents, talk to them and work a lot in the physical world. But it's still growing at a very relevant rate and the potential is huge. Again, that's overall, so very close, only close to around 2% of our TAM, and this is the checkout. So what we're doing is increasing our revenue generating payments volume. It's growing 3x our total payments volume in terms of fee. And this means that a year ago, it was almost nonexistent. Today, it's around 3%, 3.5% of our total payments volume, and we aspire this to become above 20% of our total payments volume to have revenue generating, TPV. In our second line of business, like I mentioned, we launched Yape Promos with very promising initial results. In terms of sessions, we started last September, we have almost 7 million sessions a month. Like I mentioned, the top e-commerce in Peru has like 15 million to 20 million sessions a month. This is becoming a great success. I mean, we had the biggest doubt that if Yape could serve products and services that are nonfinancial. And this is showing that we can take the traffic towards the Promos. We are expecting in the next couple of months, we will launch our marketplace and we will launch all the verticals that we're working with partners. And we expect similar results to those business lines. Finally, in the third business line, we have a floating revenue, which is increasing basically with the activity, and it should continue going at the same line. But what I would like to talk to you more about is the loans. We launched our first product, which is, we call it the nano loan, up to SOL 300 or $100, if you say, for -- 20 or 30 days is the duration. After -- 5 months after launch, we became the first -- the #1 channel in terms of number of loans disbursed at BCP. Very successful. We have a low provision over balance lower than 2%. And most importantly, 50% of the clients that have gone in this loan never had a loan from BCP before. 30% of them never had a loan from the financial system. So we are starting the financial inclusion in the loans side through Yape. We should launch multi-installment loans also in 2 or 3 months. And we're working with Pacifico Monokera to launch a series of insurance products through Yape. So with all of this, we expect Yape to reach breakeven during 2024. Here, we see 2 lines. Basically, the cost -- the cash cost is increasing [indiscernible] cost per month the active user and the revenue per month active user. We started focusing on revenue in 2022. Before, it was more about the 10 million clients. Payments and top-ups starting being our first line of revenue and continues to drive through the lines that we shared, it's today what is increasing the highest. Financial revenue, we expect it to pick up later this year, and we're looking for all the marketplace revenue to become relevant in 2024. With this, which includes a lot of launching new functionalities in the next 12 months, we would expect to reach breakeven during 2024. In the cost side, this year, we have a significant step-up in capabilities. We went from 6 [ squats ] to almost 25 [ squats ]. We built teams on digital marketing, data and analytics, IT, et cetera. Total FTEs went from 350 to around 800, but we don't expect that growth to continue because it was kind of a step change. We expect in terms of cost per active user to stay more or less flat for the rest of the year. And then in the long-term revenue to increase twice as fast. So in summary, Yape was the first of our innovation disruption initiatives, which allowed us to include 2.7 million people in the first 4 years. It started with the digital account, and we continuously added features that increased our revenue and user engagement. We are -- we've invested to create the main payments network in Peru with 9 million active users, 10 billion in TPV per month and is 1 of the top 3 digital banks in the country. We expect revenues per user to grow twice as fast as costs as we incorporate the new products and verticals around [indiscernible] loans, e-commerce, travel, games. Also we're building on those capabilities. And with that, I'll hand over to Diego, who will speak about Universal Bank.

Thanks, Raimundo. Good morning, everyone. I'm Diego Cavero, and I'm the Head of Universal Banking, LOB at Credicorp. Today, we will cover BCP, which as you all know, represents -- is Credicorp's main subsidiary, it represents -- and represents more than 80% of Credicorp's net income on average over the last four years. BCP has a 134-year history of leadership in Peru. As of today, BCP lets almost every single market in which it participates. In this slide, we are presenting our strong competitive position not only in deposits, but also across different segments. It is worth to highlight that more than 45% of all monetary transactions in the Peruvian banking system reaches a BCP account. And this is in Soles terms. If we look at this metric, a number of transactions, more than 70% of all the monetary transactions in the Peruvian banking system reaches a BCP account. This fact has relevant consequences in terms of low-cost funding and fee income. We have delivered consistent profitability over the course of our history. In the last 15 years and with the only exception of the COVID-19 period, we have delivered a return on average equity above 20%. This high profitability and solid franchise we have developed reflected in the strong competitive position that we saw in the previous slide is fruit of our long-term vision and our big knowledge of our market. What are the opportunities to grow in the financial services in Peru? Although the Peruvian financial services penetration has progressed in the last years, when compared to other countries in the region, it presents vast untapped opportunities yet. We believe Peru is a very, very attractive market to grow in financial products. For instance, BCP serves roughly [ 13 ] million customers and only 1.5 million customers use a credit product. Our aim is to unlock this potential through technology and capabilities. We have been investing in developing these technologies and capabilities, and we believe we are well prepared to capitalize on these opportunities. What are the avenues for growth for BCP? Although we can marginally grow in SMEs and individuals in some segments, SMEs and individuals in particular. And while the country will continue to grow, these factors, especially the last one, will have less impact than in the past, at least in the short run. So where the additional nonconventional income will come from, within the 2 sources? Firstly, we aim to penetrate the market prudently and efficiently through financial inclusion. In the last 2 years, we have incorporated 2.7 million Peruvians into the financial system. And secondly, we intend to boost growth by developing new businesses such as Yape, EO, Buy Now Pay Later, ecosystems and so on. This innovative platforms are fruit of our digital transformation, and we believe they provide relevant growth opportunities. So given our strong competitive position and the market opportunities we have discussed, what is the strategy and how does it fit in our purpose. Our inspiring purpose is to become an ally to our customers, employees and community, helping transform their plans into reality. It's not an easy task in a market that is characterized by some commoditization, reducing switching costs and increasingly inform and digitally empower customers, our strategy is geared towards providing them an extraordinary efficient experience to remain competitive while we continue to invest in developing a long-term sustainable growth. We want to win the #1 in customer experience but to provide our customers the best experience in the market, and we want to be the most efficient bank. And by doing so, having a positive impact in society fostering a sustainable business. We are striving for a comprehensive experience focusing heavily in digital coverage and high transactionality. In order to serve all our customer needs, whenever and whatever they want. This high transactionality and our presence in our customers' day-to-day activities led to a very positive network effect. For example, low-cost deposits, which are highly correlated to high transactionality represent 60% of our funding structure. This is a huge competitive advantage. Fees, which are also correlated to high transactionality represent roughly 30% of our income which, in turn, enhances our resilience against interest rate and risk volatility. And finally, tons of transactional data is a valuable asset for future growth. This strategy is delivered to the market through the different business units. As mentioned before, SMEs and individuals are the segments that provide the highest growth potential through financial inclusion and growth in market share. On the other hand, the wholesale banking segment where we have a strong franchise with a market share of more than 38% will face growth challenges due to macroeconomic outlook. In this context, we seek to continue to be a more retail-oriented bank, as you -- as we have -- as it has been in the past and as you can see on the left-hand side of this slide. For us to succeed in this context, our digital and analytical capabilities are pivotal to the strategy. Some -- a decade ago, we launched our transformation in order to develop this and other capabilities. And today, I would like to share with you some concrete progress in some of those capabilities, especially those related to technology and efficiency. Underpinning these technological capabilities of IT, cybersecurity and data and analytics, we rely on a highly skilled and talented team that operates on a, I would say, very consolidated [ IL ] delivery model. Our [ stick ] strategy stems from our business strategy. If we wanted to excel in customer experience, we needed extraordinary up-time in our digital channels and deliver to the market new functionalities in record time, and to do this efficiently, we neither -- we needed modern and cheaper technologies and reutilization of components. As of today, 100% of our customer-facing webs and apps are cloud-based and we have developed more than 500 reusable APIs. Results, as you can see, are very impressive. We are operating at a 99.7% at time in all our channels. This metric is world-class. We have 90% less incidents. We delivered 6x more futures, and we have dramatically reduced our time to market and our unit transactional costs. In cybersecurity, we have developed a strong governance with a consistent framework. We have heavily invested in talent and top-notch technology to dramatically reduce and mitigate cybersecurity risk. And in data and analytics, we have coupled our unparallel data pool with relevant investments in advanced analytics that are delivering huge benefits such as personalization. For example, 50% of our digital sales comes from lease to credit underwriting or to international recognition for our analytical capabilities as such received from FICO last year. We are proud of this progress, and we believe our tech capabilities are being consolidated as a very strong competitive advantage. Efficiency is one of our North Stars. We want to be the most efficient bank in the region. In the last decade, we have made significant progress, reducing our cost-to-income ratio from 49% to roughly 41% or 38% if you take or not take into consideration disruptive initiatives. Our approach towards efficiency is not only focused on enhancing competitiveness but also in creating the resources to continue investing in disruptive initiatives. We are, on the one hand, very focused on growing and diversifying our sources of income. And on the other hand, in optimizing our costs and our operations through automation, digitalization and capacity optimization. A clear example of this is that in the last 2 years, we have dramatically reduced our footprint, closing 125 branches. Clear examples of efficient growth is that the evolution in the number of digital channels and relevant reduction in unit transactional costs. Now I would like to share with you some impressive progress of our transformation. Our organization is very different from 5 years ago. In any metric you choose, number -- asset size, low-cost deposits, digital transactions, digitalization of process, digital capabilities and so on. We have made significant progress in experience -- in customer experience, which is our other North Star. In this slide, we are presenting the evolution of our NPS for the consumer segment only last year with an increase from 37% to 45%. Our transformation is leading us towards a more digital and loyal customer with more products, more news of digital channels and more income per customer. In the last 5 years, we have seen a new default growth in most of our operational metrics. Here, just some examples, number of customers, number of active users in our digital platforms, number of transactions, a totally different bank. This lead for evolution is a clear evidence of our capacity to grow and to implement a successful transformation. Finally, I will touch on sustainability. Sustainability, of course, is a key pillar of our strategic approach, focused on having a positive impact in society, well aligned with our purpose and our business. We have implemented several initiatives related to financial inclusion, financial education, support or training to our business -- micro business owners and also helping our customers in order to reduce their carbon footprint. Results are very impressive. You can see those numbers in this slide. Over the course of over 134 years history, we have undergone several transformations. It's not just the last years. And we have made considerable progress in a market that we deeply know and understand, and that we continue to believe that provides significant growth opportunities. As we evolve, we stay committed to our purpose, transform plans into reality and to a sound strategy, focused on customer experience, and efficiency. I would like to close my presentation with the idea that looking forward, we will continue growing to -- by penetrating an unserved market through a more digital, transactional, data-driven and client focused bank. Thank you very much. And I will pass to Javier Ichazo, Head of the Microfinance LOB at Credicorp. Thank you.

Just a quick reminder. This presentation will be made in Spanish. So if you need translation, just use the headphones you have.

[Interpreted] Good morning, and thank you so much for joining us this morning. I will talk about Mibanco. This is the Credicorp microfinance business and the company that I head since end of 2017. My -- Mibanco has a double roll, social and financial. It is a leader -- lead company in Peru and is micro finance sector in Latin America. In this slide, we're trying to convey some qualitative and quantitative data of the segment that we deal with, which is the base of the pyramid. These are the most vulnerable customers. I would like to touch upon the value that our customers give, the relationship that they have with their advisers, basically because the level of education of our clients is low, which is why they need support and advice from someone so that they can meet their business goals. What is the impact of Mibanco in its clients? It's very big. The increase in income, for instance, is quite substantial. It's -- for us, it's important also to generate employment in countries like mine. To have -- to create jobs, it's important and through the support that we give this clients, we generate employment in the country. It is also relevant that we have the capacity to educate the -- for them to educate their children. This is important in countries like ours. It is also important for us to have a sustainable and profitable company, not only because of the contributions to credit card balance sheet, but because if we are profitable, we will reach more people, and we will transform more lives in Peru and in Latin America. It is important that the company is sustainable and profitable. We have a position of capital and liquidity that can allow us to face the current situation and any variability in the market in which we move. Our risk appetite is conservative for the segment. And the corporate limits are quite more demanding than regulatory limitations, which allow us to navigate sort of calmly and freely. It's important to mention that we have repositioned the bank so that we add value for the segments of liabilities. The first results of the repositioning lead us to provide that over 50% of the bank funding would be from the retail funding by 2025. A few years ago, we decided to meet the evolution of the microfinance sector. We did this through the hybrid model. That I'm sure you've heard about before. The model is somewhere between the traditional model, which has a lot of offices and business advisers and purely digital model. The heart of the model is the capacity to evaluate in a centralized manner, which is centralized intelligence. That is the most important component. It is the heart of the system. It also has 2 other portions to develop alternative channels and to have seamless execution because we have over 5,000 advisers working in the field who need to have a very sound business management model, and you saw the tools that we provide for them. This has allowed us to have a clear competitive message -- advantage in the Peruvian market, speed and convenience. From what we've seen elsewhere like in Colombia, we see that we have a model that can be exported to any country in the region. This is the performance. You can see the performance here of the different components of the hybrid model beyond the numbers that are quite good. Let me double click so that I can show you more clearly what this means. Having 78% of our credits disbursed monthly, which have been proved behind in a centralized manner allows us to control risk. Had we -- if we see that there is some early crop that starts to deviate, then we could correct the model. And immediately, the entire network and alternative channels can correct the centralized commercial offer so we can control the risk. Alternative channels. As you can see, we are disbursing 45%. That's a number of disbursement, which is 16% in volume. This is important because we were able to bring to the alternative channels which are more cost efficient, the high-risk tickets of service in relative terms. Finally, execution. We have excellent execution because our advisers were able to absorb the technology to facilitate their operation, which has made them much more productive. And now we are disbursing 30% more than -- with 25% less advisers. Here, we can see concrete results in terms of the bank's performance. In terms of experience, improvements are substantial, and the NPS data that is shown in this slide at the local market are up on top of the 2/3. In terms of productivity and efficiency. Let's talk about efficiency. We've, throughout these last years, have been investing in our evolution and transformation process. We've done this by self-financing. And even so, we were able to improve our efficiency which is quite relevant and important. We have a, once again, sustainable business with a good level of growth, which can control risk quite rigorously. What is our clear competitive advantage, which -- it is convenience and speed in the last few -- next years. I think it would be much more profitable than it is today in international and local forums. We're talking about the components of the hybrid model, which are what we need to follow in order to evolve the business. And therefore, we need to continue to evolve so that we can keep this competitive advantage which would allow us to sustain our market position. This is why we say that separate from speed and convenience, we will add in more -- we will go more into depth in the relationship with our clients because our clients have a clear trust or goal to take business decision. In other words, if they want to take a decision to buy, say, building a machine or whatever, they have a very clear circle of trust. First, family, then there are commercial neighbors. And thirdly, the over 25,000 business advisers that we have in the Peruvian market. So as you can see, they value business advisers. And we believe, the way forward to sustain this competitive advantage to maintain it would be to give them more to have a better relationship. How? By investing in technology, improving our models, investing and improving the analytics and data world. And at the same time, we're really working on bringing and reinforce seeing the internal talent, which will allow us to work on this evolved model. So far, I talked about how the hybrid model has evolved in our Mibanco. But we've also created important partnerships that would allow us to go beyond our model. Let me give you a couple of examples of companies that we've been working with when you look at it from the credit perspective. Yape will be an excellent distribution channel for credits and collections, and we've already launched [indiscernible] or collections. We've already collected 16,000 credit quotas for Mibanco. In terms of deposits, we want to replicate what we are doing with Mibanco Colombia, which is a digital deposit, which we're working on right now. We also need to mention that because we are a company, which is part of credit card, and we don't -- we have, therefore, the best technology and latest technologies, and we have the best talent to meet our goals. In the digital world, we've been working on ecosystems and a different model from the model that we have as a hybrid models. We have a digital model that have -- has two clear goals. First, an ecosystem that will allow us to know our clients better and to get involved in their daily life so that we can improve our value offers and to have a complementary offer from -- to our hybrid model, which would allow us to include some learnings from the digital models in order to strengthen our hybrid model. This is our digital platform. This is a community of communities. These are the first 2 we've worked on; women and today, we're working with convenience stores or neighborhood stores, grocery stores. And we've learned from the interaction with them, which is enriching not just our models, but our understanding of the clients. And what I add is digital partner, we're learning from. It's much more complex, but we are seeing elements that we're bringing to the hybrid model. Finally, while our countries today face a lot of challenges, I think we have still much to do in the future to continue to work, grow in microfinance -- in the microfinance business. We are focused on managing this situation at the moment, but we look forward to growth goals were close. And when the situation improves, we will go back to having an appetite for more growth. Thank you so much. Let me give the floor to Cesar Rivera who is the leader of Insurance in Credicorp.

Thank you, and good morning to you all. The Peruvian insurance market has registered interesting levels of growth in the last few years, in many cases, outpacing the expansion rate of other markets in Latin America. Nevertheless, the low penetration of insurance as a percentage of GDP clearly tell us that untapped potential still exists. We are at a very auspicious moment for a working industry as people become increasingly aware of the need for protection against risk. What evidence do we have about this? In the last years, confidence in insurance have grown 40%, meaning that today, the typical Peruvian has more faith in the insurance offered -- in the protection offered by insurance. And this is particularly true. And on the age between 25 to 39 years old which grew up with more knowledge of what insurance is, how it works or how insurance impacts people's life. And one of the impacts on people that COVID-19 pandemic left on its way is the increased awareness of the need of protection against mortality. During the pandemic, 65% of deceased had no life insurance, whether public or private, leaving thousands of families unprotected. Additionally, over the past months, extra rains has battered the country raising Peruvian families' consciousness of the need for personal and property protections. In summary, as insurers, we know we need to leverage the momentum created by the current context with an eye on protecting more Peruvians. At Pacifico, our leadership position and diversified portfolio has generated excellent results. The non-life [indiscernible] represents 43% of our premiums and the Life business, where we are the leaders in market share, represent 57% of our business. Given the situation in Peru over the last years, having a diversified portfolio, has consolidated our strength and help us manage volatility to ensure we continue with our obligations now and in the future. Our resilient model and leading role in the Peruvian insurance market has positioned us to offer the best customer experience. We are also the most efficient insurance company with the lowest cost to income ratio, and it helped us to be in the first position in the market in terms of market share of profits. So a relevant question here will be how have we achieved these results. Our strategic priorities having consistent over time, focusing on becoming a more retail-oriented insurance company and taking advantage of our bancassurance strengths. This vision is based on 3 fronts that responds to our objective to be #1 in experience, in growth and in efficiency. We are convinced that this coherence will help us achieve our purpose which is to protect more Peruvians' happiness. Let's look at each strategic front. The first one is delivering an extraordinary experience for our customers. Our tireless journey to generate an extraordinary experience for our customers has produced digital assets as our chatbot nicknamed Vera, which have seen a fourfold increase in use. We also developed an app called [indiscernible] Pacifico, where clients can check the status of their policies, follow up on their claims or build their policy benefits among other functionalities. It has allowed us to increase the number of active users by 10. And in addition to these in-house advances, we have strengthened our services through alliances with insuretechs where we now, for example, you are using artificial intelligence to service claims. For example, 55% of our car claims are processed using AI. And we have used the power of this technology to reduce processing times in the home claims by 75%. These actions not only help us to provide a better service for our clients, but also position us to obtain a world-class recommendation levels at some key points of contacts, such as our call center, our e-commerce sites or our auto assistant service. Now our second front. We know that talent is key for our strategy. And therefore, our talent mix is consistently evolving year after year. Over the time, 25% of our staff people are tech talent. And they will be critical for key enablers like pricing, data analytics, IT and architecture. But now where do we want to take our tech talent? On our data capabilities, we want to become a truly data-driven company, where business will be powered by analytical models and architecture. On our technology stack. We are building a modular and digital architecture that will allow us to integrate into other ecosystem through APIs with built-in cybersecurity risk management. And for our pricing enabler, we are moving towards more granular risk selection and personalized pricing models, our profitable growth and customer retention objectives. Finally, our third front, our bancassurance strategy. Two words here, distribution and data. We know that through the channel, we will achieve the capillarity we need to distribute insurance on a mass scale. As we pursue our sustainable -- sustainability objective which is to increase the insurance inclusion in our country. And in addition, we will leverage the use of data to create personalized products and to offer a completely client center value proposition. Today, at [indiscernible], we are fully embedded in all the bank's digital sales channels. We are offering more than [indiscernible] that meets our client needs. So Mibanco, we launched new inclusive insurance products. And finally, through Yape, we have embedded the options to buy SOAT which is the small and mandatory car accident product, and our goal is to have at least through 3 new products in the next month. All of these actions has allowed us to multiply the number of insurance policies by 8 and protect more than 2.6 million customers with inclusive insurance. Now in closing, we are certain that our role to protect a larger share of the population is more relevant now than ever. Looking forward, we will sustain growth by offering new and inclusive products that meet our country's needs at different stage of people life protecting more Peruvian's peace of mind and wellbeing. Thank you. And now let me give the floor to Eduardo Montero, CEO of Credicorp Capital.

Thank you, Cesar, and good morning to everyone, and thank you for coming here. In the next few minutes, I would like to share with you some of the adjustments we have recently made to our business strategy. But first, I would like to share with you a brief story of our company, a 10-year company. We started by merging the investment banking operations at BCP with 2 market leaders in Colombia and Chile. Then we created the Investment Banking and Wealth Management business line by incorporating Atlantic Security Bank in Panama and the Wealth Management Division and BCP. And with that, carried along a 40-year track record -- proven track record in the business. During the pandemic, we acquired 2 companies, [ Ultraserfinco ] in Colombia, which allowed us to double our assets under management in Colombia and Ultraserfinco, a registered broker dealer in the U.S. that allowed us to enhance the optionality for our clients. During these past years, we have focused on consolidating our regional vision, a shared culture across countries and launching a technological and operational transformational project to support future growth. In this year, we have grown our events. We have consolidated leadership positions in the capital markets and developed a profound knowledge of our local markets. That along with growing optionality for our clients. 2021 or during 2021 and 2022, our business model and capabilities were tested by political and social instability in the region as well as global market macro headwinds. Our clients shifted a larger share of their portfolios overseas and the investment capacity of some of the institutional clients, especially pension funds, reduced dramatically due to withdrawals. In addition, inflation and higher interest rates impacted more volatile businesses such as trading and significantly lower the activity in investment banking. Thanks to our comprehensive value proposition and flexible business model, we were able or manage to be net winners in the funds that migrated overseas, leveraged by our platforms in the United States and in Panama. By the end of 2021, the year of the highest outsource, we were able to grow our offshore assets under management by more than 30%. Our recently launched Credicorp Capital 2025 program, we revised our strategy to achieve more stable, scalable revenue growth as well as sustainable profitability levels. Over the next 3 years, we will focus on the following: the first thing is we'll be restructuring our business portfolio, focusing on recurring and scalable businesses such as wealth management, asset management and transactional capabilities in the capital markets. With this, we will rationalize our exposure to more volatile and capital-consuming businesses such as trading and less capable ones, such as investment banking. We will focus on those businesses that today represent more than 85% of the contribution margin of the company, but more importantly, that have shown consistent growth in the past years. We will continue to develop operational and technological capabilities as key enablers for efficient and scalable growth. We have already established a shared service center in Colombia and a renewal and standardization of our technological platforms. As a third point, we will be implementing a new governance approach with a rigorous performance management plan, continuous monitoring and proactive deviation management. We will maintain our north stars, but be able to recalculate the route when necessary. The fourth item is that we will be leveraging our experience and learn lessons in 3 integration processes in the past to explore and capitalize on new and organic growth opportunities. And last but not least, we will continue to implement ESG practices as a cross-cutting access on all our strategic fronts. For the past years, we have developed a comprehensive value proposition for our wealth management clients focused on the high net worth and the ultra-high net worth clients. This advisory model is -- provides a one-stop shop for our clients with -- that includes specialized investment products as well as access to local, regional and international platforms. Our customers are at the core of this model in which the private bankers act at a primary point of contact, understanding the needs and bringing to the table for the conversation, the appropriate or the correct specialist. Recently, we created Credicorp Capital U.S. and with that enhanced our value proposition for wealth management clients. We successfully connected clients from Peru, Chile, Colombia and increased our assets under management by 3x in the past 2 years. We're strengthening critical capital U.S. with our comprehensive value proposition and wealth managed proposition as well as connecting institutional clients to the region for our capital markets capabilities, led by U.S. business head, we seek to generate further opportunities for our clients in this new platform. Recent weakening of the institutional segment in the region and the growing prominence in the individual segments in the global industry represents a significant opportunity for which we are working hand-in-hand with [ Teva, ] the wealth tech developed by Krealo. Together, we will create a joint venture where a value proposition focused on the affluent segment. This new unit will leverage on the one hand, all the transformational and technological capabilities of Teva with those commercial teams advisory models as well as products and services of Credicorp Capital. A challenging business environment requires us to adapt and generate profitable, sustainable and focused growth. Our medium-term strategy will focus on recurring and scalable businesses, operational and technological enhancements, ceasing inorganic growth opportunities and incorporating sustainable investment practices with a ESG focus. Let me now hand it to Cesar Rios, our CFO.

Thank you, Eduardo. Good morning, everyone. It is my pleasure to close the first section of Credit Corp Investor Day. I will review governance and financial perspectives, given the fact that my colleagues have discussed already our purpose, strategy and recent execution. The question you usually pose focus on our ability to decouple from the macro context, which although challenging has been proving global. We are also frequently asked, are your capital and your liquidity adequate to the current circumstances and the near-term environment? When are you going to spend so much in IT? can you sustain your profitability when the interest rates come down, what is going to happen with the underperforming businesses. I hope to address some of the more pressing issues today. We operate in our environment subject to political, regulatory and climate risk, like the rest of the world, we are subject to market and business disruption. This unpredictability and volatility offer a flip side of opportunities to our business, which when coupled with low levels of market penetration, allow us to drive above the GDP growth potential. If GDP growth will stand at 6% undoubtedly, the opportunity for expansion will be greater. Nonetheless, our growth will be substantial, even if the GDP growth to 5 points percent in the following years. We will face challenge anchored in a strong foundation and prudent management. Discipline is at the core of our governance framework and grounds every strategy and planning decision that we made. The Board and Corporate Risk Committee oversees the system establishing clear parameters of risk appetite, establishing clear boundaries ensuring accountability and rapidly responding to close to changes in variations and exposure. We actively manage with multi platforms and can pivot quickly. I would like to take a more in-depth look at some key dimensions: capital, liquidity and accounting practices. Our capital requirements are aligned with local regulation expectation of risk rating agencies and a regional benchmark. We conduct very rigorous stress test analysis based on scenarios even more demanding than the recent pandemic crisis to establish boundaries and appetite for our core equity Tier 1 in the banks. We monitor and manage liquidity based on a set of metrics, including regulatory and internal LCRs, a stable funding and duration gaps. The objective is to remain liquid under the stress without triggering systemic effects. At the accounting level, we are prudent. Cost and investment relating to new ventures are mainly expense instead of recorded in the balance sheet, which occurs when the maturity of the initiative is more secure. Additional, our implementation of new standards of accounting like IFRS 9 and IFRS 17 has generated no material impacted our balance sheet or P&L. Our perspective on creating value is long term. We make sure that our business are well capitalized prior to paying dividends. At Credicorp, prudence and discipline around alongside in-depth transformation. We manage shifts in economic cycles to leverage our leadership in tough times and thrive in good times. Our business model was tested during the pandemic but we pivoted showing up provisions and insurance reserves in a complete unprecedented environment. Our profitability was challenged, but our solvency remained robust. Moreover, we emerged from the pandemic with a stronger businesses. We anticipate and navigate the short term without compromising our long-term ambitions and strengthening our businesses. IT expense management during the pandemic is a case in point. Once we secure our solving a control risk, we doubled down on investments to capture opportunities and rebound with competitive advantages after that. We ran in, in avoidable costs while focusing on building capabilities for the future. During this period comparing 2022 with 2019, we increased expenses to transform the core of our business by 1.5x while expanding in Yape, our key and more mature disruptive initiatives rose from PLN 25 million to PLN 211 million. As a result, we significantly expand our number of clients, increase transactions and materially improve customer experience. If we had paused our transformation expenses, now we will be executing the 2021 agenda. We deployed our strategy and transformation process through a 3-pronged approach, optimizing business and capital allocation, monetizing, parenting advantage and driving the full potential of each of our business lines. At portfolio level, we define our appetite and execute our strategic capital allocation with a medium and long-term perspective. At this level, we continuously assess strengths and potential market spaces to profitably compete or disrupt. Identify cross companies, sources of growth and profitability and take action when some business are not performing as expected. Assuming that our cost of capital is now around 11%, 13%, 90% of our capital is generating ROEs well above this threshold. Disruptive initiatives impact less than 150 basis points of ROE and excluding withholding taxes, corporate expenses that generates -- that generate synergies and parenting advantage represents 50 basis points of ROE. We also manage our corporate reserve fund to tap into internal resources when unforeseen events materialize. We pace investments to balance short-term objectives of profitability with the need to build future capabilities and sources of long-term growth, so we establish limits and return parameters. As Gianfranco has mentioned, another source of value creation is our parenting advantage. We have developed several sources of capabilities and talent pools to ensure that Credicorp is more than the sum of its parts and to shorten development cycles. But we recently have evolved from reducing skilled efficiencies to focusing on profitability. Example of this approach includes leveraging a corporate approach to pricing, data analytics, ALM and procurement with very tangible and concrete results that I am sharing you in this page. We actively challenge our business unit strategic plans and current results to heightened performance. For example, the insurance business while generating returns below expectations a few years ago and now is well above the cost of capital as you can see. The health business also were underperforming, now has almost doubled its profitability in the last 4 years. BCP is expanding its leadership in Peru and macro finance [indiscernible] as a driver of profitable growth. Credicorp Capital is focusing on fewer initiatives at the aims to increase profitability. PRIMA is more efficient now and capable to withstand regulatory changes, while Bolivia, which represents around 3% of our consolidated equity is defending its position and protecting its liquidity. Finally, as Francesca has explained, we have the systems in place to drive successful, disruptive initiatives while reading out the less promising ones. Our path moving forward is clear as our business leaders has clearly explained it today. Our strategy is based on ambition where efficiency and customer experience and growth are interconnected and interdependent. Within this strategy, our approach to space management interpreting initiatives that optimize customer experience and maximize growth at the low feasible cost to boost at the end, profitability and resilience. Our IT efforts have strengthened our competitive moats. We currently reach more clients in more efficient ways, which translate in the capacity to grow faster. Consequently, we grow the pie while filling empty spaces and maximizing our competitive position to make the competition a little bit tougher. In some segments and markets, we have found that the best way is the self-disruption. Cocos y Lucas and FX transaction platform and EO, our new payment and digital lending solutions are good examples. This initiative will challenge our profitability in the short term, but hold immense potential to create value down the line. This proactive approach is far better than being blindsided by a competitor. We have forecasted the outcomes of our strategy and have established shape points as well as contingency plans. From 2016 to 2019, we maintain cost to income while transforming the traditional business and funding the initial stages of the disruption. When the pandemic struck our rock solid foundation helped us navigate an environment of high risk, low risk recessionary environment, and we emerge with a stronger business. In 2023, we continue to roll out the efforts began in 2022 to ramp up the transformation and disruption. BCP and Pacifico are leveraging high interest rates and have risk under control. IT-related expenses are expected to rise substantially this year within our benchmark and appetite and return for early investments are already materializing. Investments and disruption has accelerated and the benefits are expected to roll in at a faster pace in the coming years. We have the mechanisms to rapidly adjust the pace and investment when necessary. The guidance provided for 2013 -- '23, sorry, will be affected by the new GDP growth estimation of 1.3% that already contemplates a [ Costa les Nino ] as well as 2 more factors. High interest rate that can remain high for the longer term and the potential occurrence of a global El Nino. We have taken anticipatory measures and we're monitoring the situation carefully. We expect 2024 to be a transition year where we will shift from high interest rates, high claims related pricing in Pacifico and high inflation to more normal conditions and increasingly visible benefit from the transformation. As a result, the top line is expected to grow at a slower pace during this adjustment year from 2024 to 2026, we expect the following trends. At BCP, we expect to maintain a competitive and better than prepandemic level, low-cost deposit base and a relatively stable NIM where the impact of lower interest rate is offset by a shift in volume mix to favor retail businesses. We expect GDP -- we expect BCP to maintain an ROE in the low 20s through 2026. We expect Pacifico to expand in bancassurance base through digitalization. Accordingly, we expect the company to deliver an ROE in the low '20s of a larger capital base through 2026. Regarding Mibanco, we expect to increase NIMs to customizing prices and a lower cost of funding and more fee income streams. At Mibanco, Peru we expect to operate with ROEs close to 20% by 2026 and achieve higher, more profitable scale in Colombia. Credicorp Capital is expected to achieve a strategic alignment with ROEs in the high teens by 2026. Profitability at Prima and Bolivia will be affected by regulation and macro variables, respectively, and we will monitor events to leverage opportunities. Finally, we expect Yape to be profitable by 2024. Oil disruptive initiatives are expected to follow suit in sequence and become cash flow neutral. Incorporating the impact of withholding tax and corporate expenses, we expect to maintain an ROE of around 18% by 2026. We know how our investors measure our performance, value and outlook. We provide real term value to our clients and to the societies in which we operate in this context, discounted cash flows have a reasonable perpetuity assumption. Within a well-defined horizon, the return our businesses is expected to be higher than the cost of capital. We believe that growth will be driven by multiple sources which acts as a buffer if one source temporarily underperformed. And finally, the discount rate is expected to moderate from today's levels because risk in this wide definition is understood and managed. Jumping from financial to a strategic term. This is exactly what we are doing, and we strive to continue doing. Thank you very much, and we can now move to the break. [Break]

Please, could you take your seats. We are going to start with a Q&A session. [Foreign Language]. Okay. So we are going to start the Q&A session. As I mentioned earlier, we will first cover the questions here in the room. And then we will answer the questions through -- that we are receiving through the webcast. Please raise your hand, say your name and the company you are representing.

I'm Tito Labarta from Goldman Sachs. Thank you everybody for the presentation. Very helpful and informative. A couple of questions, if I may. I guess, first one, maybe for Cesar. You mentioned a little bit there could be some impact from El Nino, weaker GDP growth, lower interest rates for this year and perhaps next year. If you can just kind of quantify that in any way it would be helpful to think about that. And then my second question, more -- given all the investments in digital initiatives, I mean, which I think definitely the right strategy that you need to do, and it's great that you're disrupting yourself before somebody else does. But you're already a market leader pretty much in every segment. So when we think about the potential benefits, do you think it will be driven more by cost savings or the -- I know Yape is going to be profitable soon, but help us think about the monetization aspect of it, given your leadership positions.

Thank you for the question. As I explained during the presentation, we have already changed our expectation of GDP growth contemplated already local El Nino that is going to move the GDP expectation from 1.8%, let's say, to 1.3%. And to adjust the perspective for 2023, we should take into consideration probably 2 more factors. These that conceptually are going to impact provisions and loan growth. And in the positive side, higher interest rate for longer than we were expecting previously. So with this concept, probably we weren't thinking significant changes on our guidance. But now we are evaluating the potential occurrence of a global El Nino. It is too early to have an indication right now, we have more information, probably we are going to make some more concrete information in our next conference call. A global El Nino impact performance results already, but it's too early to put a number on this perception.

So on the more disruptive view, our view is more income generated. Looking at underserved markets, so gaining new sources of income of something that we don't have, whether it's the same customer or a new customer, but it's marginal income. You saw in Diego's presentation, the level of engagement. So cost is managed. We look at cost, we look at it. But the type of relationship we're having is a much more intense relationship. So we're looking more at the income side in the disruption, which doesn't mean that in the transformation, we don't look at efficiency in terms of cost of transactions and the technological platform we need for that. So it's both around the disruption, I would say, more income.

Just a complement on what Francesca just mentioned, Bear in mind that in Peru, still 85%, 90% of total transactions are done in cash. And as a matter of fact, if you go a couple of steps back, Yape's business case is switching from a cost generating and 0 data generating to a model when you generate income plus you generate the data. So -- and this -- I would like to tie it up to your previous question, which is, yes, GDP growth, if it's lower obviously, it's going to impact the traditional business. But the overarching vision behind what we've been talking about this morning is how to, again, decouple our growth, therefore, our profitability from GDP, which is like the traditional leading indicator for our growth.

Okay. If I can maybe just one quick follow-up. On the Yape, just thinking about the monetization, would it be primarily on payments? Can you -- will you be able to cross-sell other products like credit and things like that, just to help us think about that?

So definitely, payments where we are first -- or is being our first monetization driver because of what we can -- the products we can scale faster right now, right? Because there's a lot of transaction volume, and we see payments become very relevant. We do expect, as we launch multi-installment loans to 12 months, et cetera, for financial income to become relevant, probably starting in the final Q of this year, but effects we'll see them next year. And then on our more, I would say, distant business, which is the marketplace on the more retail business, which is a take rate business. We expect that to start gaining traction next year or relevant traction next year, and we should see the revenue results more towards 2025. So I would say those -- the 3 business lines should be relevant when we think of 2025, '26, but it will start with payments first, then financial and then retail.

Ernesto Gabilondo from Bank of America. Thank you very much for your presentation, very detailed. So I also have questions. The first one will be on competition. I believe you have been investing a lot in the digital transformation. Probably you are one of the leaders in the country and in the region. So how do you see the competition? I'm talking about not only about the incumbent banks but also Fintech once, what do you think will be the next rival in -- for you. And then my second question is on profitability. You have been talking that because of all these digital initiatives, your long-term ROE could be around 18%. We just used to thought in the past of Credicorp being a bank with ROEs of 19%, 20%. So again, you're thinking long term, so how do you see that? Do you think that you can return again to the 19% and I will say, how do you see that relative to the region?

Yes. Let me answer the last question, and then I'll pass it to Diego, and maybe Francesca. Diego regarding incumbents, Francesca regarding newcomers. As I always say, we rather underpromise and or achieve than the other way around. And as I believe I don't recall it to as Francesca or Cesar, we're willing -- or the Board has allowed us to invest or expand up to 300 basis points of cost to income and up to 150 points of ROE. Several times we've been asked, okay, when are you going to finish that process? We don't know. I'm sure that if we had this meeting in October of last year, none of us would be talking about artificial intelligence or generative artificial intelligence? What is generative artificial intelligence, what impact is going to generate? Positive or negative, in terms of profitability. Today, we don't know. We expect that to have a very positive impact, but we don't have those figures yet. We're exploring on how to organize ourselves, how to prioritize where to work on and so on. So going forward, we feel quite comfortable that the 18% ROE as our share is sustainable in the long run. I would say, with a positive with upside -- potential upside. And Diego, on the...

Thank you for the question. I will separate the answer in 2 parts. I would say that fintech competition is going to be less relevant in the short term because increasing the difficulty to find some funding for those initiatives. And all what we have seen in the market in terms of -- related to the fintechs. In terms of the traditional competition, of course, we are going to face competition. But as I mentioned, I think that we are well prepared to capitalize on all the capabilities that we have bee developing in the last years. Our strong competitive position in terms of transactional banking, providing our customers a very comprehensive platform where they can do almost every thing what they want is a very strong competitive advantage. And that is reflected in our funding structure that when interest rates were close to 0, it was irrelevant. But as of today, having 60% of our funding structure in low-cost deposits is a very strong competitive advantage. In terms of customer experience and in terms of digitalization, all the banks -- all the incumbent banks are working and doing a good job. But I think that we have relevant competitive positions to be successful in that -- in -- not only maintaining our market share in the most relevant segments where we have a strong franchise, but to grow through digitalization and through new models in individuals and SMEs.

Maybe just to add, competition is cash, competition is underserved, the informality of a region. I think that's where the opportunity lies. And solving that friction, making whether it's financial access to loan payment health. I think that's the competition in addition to what Diego said. So I think there's a clear opportunity in the current environment to embrace that because of lack of others trying to come in into those markets at the time.

This is Andres Soto from Santander. Thank you very much for a very complete presentation. I have 2 questions. The first one is as you guys are looking to decouple Credicorp growth from the growth -- GDP growth of the country what that implies in terms of your loan growth expectations for the next few years? And how that changes the historical cost of risk of Credicorp. And how do you see going to these new segments of the population changing the profile of the company? That's what I'm heading to.

Thank you for the question. I will answer probably in 2 parts. Part of the decoupling is not only going through the traditional risk-taking business. So in these cases, we are thinking not only in penetrating like we have been doing lower segments of the population that has a connotation of cost of risk that is naturally higher margin, higher risk. But we are talking about new sources, for example, when Yape goes into new markets, selling, distributing products, making a market place. We are starting to go into different markets that are the couple from the GDP impact in our traditional business. It doesn't mean that this business doesn't have an impact for GDP, but our new blue oceans for ourselves. And in many cases, doesn't have implied risk taken in the traditional sense.

That's very clear. And my second question is regarding the opportunity that you guys have with Yape, already 9 million users. I would like to understand a little bit more of the -- profile of that you serve in terms of what is the percentage of those users that are already customers of Credicorp which are not customers of Credicorp, but clients from other financial institutions and which are of the race which is the really addressable market. I mean, I imagine some of them don't -- I'm not going to qualify for a loan. So I would like to understand better how you can monetize Yape.

So when we think about the 9 million users, we have actually around 3 million, 3.5 million that opened the Yape we call it with their [ DNA, ] with their ID that they never had an account -- that they didn't have an account before with PCP. Others operate on top of their BCP account, EUR 5.5 million or EUR 6 million. So -- but definitely -- even those with the bank account, some of them were new that opened the bank account and Yape together in the last couple of years. In terms of what the customer looks like? I mean we have Peru as a customer, right? We have the person that sells ice cream in the industry. And probably we have private banking clients that you sell. Not probably. We definitely have private banking clients that use Yape . So it is a present based -- it is a representation of all of Peru. Our aspiration is to reach 75% of adult population and to continue growing at 300,000, 400,000 a month. So we continue to grow on, we believe that most Peruvians will be Yaperos, that is kind of an operation. In terms of monetization, we have different lines of monetization. So for example, mobile top-ups, we have 6 million Yaperos or telephone numbers have at least once done a mobile top-up in Yape. And every month there's like 3.5 million or 4 million now that are doing. Then we have another 1.5 million that are paying in POS. So we receive an issuance fee. So it becomes -- and our aspiration is that -- and there's another 1.5 million that have paid their utility services. We want to take those numbers as close as possible to the $9 million or whatever the total number of Yaperos. So we have an increasing payments or fee-based business. Then we'll go into the lending side, which we don't expect, of course, to have 9 million Yaperos with loans, but a few million we do. We want to expand the number of clients that we have at BCP [indiscernible]. So it's not all or nothing. It's -- we're going to have some clients that will use a moving profitable because they recharge, they buy top-ups, they use something others even in the afferent segments that buy tickets for -- we recently acquired as Credicorp ticketing for concert events. So you have the whole spectrum of value proposition for the Peruvian population. That's kind of the vision. Yes. So it is a super app. I mean, our vision is to go from being the wallet of the Peruvians to solve every day-to-day needs of the Yapero. And that touches a lot of points which we will start experimenting. We just did a huge technological change that just finished, so we can put things faster and try out and change. So in the next 6 months, we will see a lot of experimentation and new product launches with Yape to test this. And obviously, not everything will be for everyone. We have to segment and give different offerings.

Maybe just to complement what Raimundo just mentioned and going back to your first question regarding the number of PCP clients at apparel and so on. For those of you who follow us for a few years, you may recall that maybe 10 years ago, we launched a strategy, which we call war on cash. And actually, Yape didn't exists at that time. And so it was basically bank credit card usage and debit card usage. Yape was born under that strategy. So regarding BCP clients using Yape, on average, they use the mobile app, the average transaction is like PLN 500. In Yape is PLN 60. So again, it goes to the idea of what's the payment mechanism that generates less friction to the user. So that's the whole idea. Because something that we haven't talked about at all in this morning is how credit card usage and debit card usage has been growing over the last 4, 5 years. It's growing at anything between 15% to 25% per year. So again, very much in mind, the main competitor is cash. So we really don't care about self cannibalization. There might be some, but it's nothing as compared to the blue ocean that stays there regarding payments.

Carlos Lopez [indiscernible]. Thank you for the presentation and thank you for being here. Can you hear me? Okay. Again, thanks again for being here. And going back to the previous question, which is essentially what Peru do you expect for the next 5 or 10 years and what type of asset growth, GDP growth, inflation you expect which -- again, I don't think that was answered because part of the success of the company over the last 25 years has been the success of Peru, and we have had a bit of turmoil. Do you see a better path ahead for the next few years? Again, everything that you are doing on the corporate is one thing, but you are working in a certain environment. And the second question refers to what you intend to invest again, you mentioned 150 basis points of ROE, 300 basis points of cost/income ratio, very clear, very well defined is that cost that the Board is willing to take for the next year, 2 years, 3 years? What is the parameters of that group.

I don't know if you initial question was a question about 5 to 10 years, 5 to 10 months or 5 to 10 weeks. Having said that, we believe that the current situation of Peru is a much better situation than what actually 6 months -- slightly over 6 months ago. Level of corruption, the level of -- the lack of capabilities to actually run a country and you name it, previously, the government was really, really bad. Whereas today's government, the executive branch has shown a much better -- much better management capabilities regarding how to run the country. Having said that, say, that we are today fragile equilibrium -- political fragile equilibrium. Our base case scenario, and we've been public about it is that the current government will and its constitutional period, which is July of 2026. I'm not saying that there's is severe probability that something crazy will show up in the next months. But we do believe that we are in a much better position today than a few months ago. Going into a more structural vision of the country and not an extra whatsoever on metals and mining and so on. But from what I've read and talked to some experts they're very bullish on what's going to happen on copper and lithium. Peru is not a lithium -- there's no major lithium mines in Peru, but they are in -- copper mines in Peru. So the energy transition that is going to happen in the next 10 to 15 years, provide a superb opportunity for copper producers in the world. And Peru is not only the second largest copper producer, but most importantly, has the best cash cost in the world. So we are positive on that. Obviously, we need political stability. We need much more institutionality and things like that. So that private investment picks up again. That's more or less at the vision we have for the next 5, 10 years. And sorry for not being more specific, but that's as far as we feel comfortable. Regarding your question on the Board, it's a long-term mandate. Obviously, this discipline, the discipline we have today on what to invest, where to invest, how to invest, and more importantly, how to follow up those investments is much better than the one we had when we started. Maybe should I -- shouldn't tell you how we started because it was -- actually, the Board gave us a blank check, and we started this digital transformation, I don't know, 8, 9 years ago. Whereas today, obviously, the check is much larger but we have much more discipline in how we are running and pursuing our transformation initiatives or disruptive initiatives. Obviously, we shared with you some of the initiatives, let's say, the most mature or successful ones. We've killed a lot of initiatives along the way or pivoted initiatives along the way.

We will move to the questions that we have received from the webcast. So the first question would be from Serge Davin from Harbin Lerner. You mentioned Investment in innovation cost you 300 basis points of cost-to-income and 150 basis points of ROE. How long until this investment yields tangible results? And what are the KPIs by which you measure success? When would start reducing costs and enhance ROE?

Okay. So it's 300 basis points, not 200. I don't know if the question was wrong or...

No, no, no. It was 300.

Yape is the most mature of the ventures in disruption. And as you see, it's path to monetization is clear. By 2024, it's exceeding performance in certain metrics and moving forward in others. So this is -- I think this is the way we are following suit on all ventures. Depending on the stage of innovation, the type of metrics we measure. Very initially, we look at customer growth, repeat customers' number of engaged customers and so forth. As they move into second stage of investment, we begin to understand what the revenue paths are like. Can we charge? Is there a cost reduction and we start looking at metrics in terms of revenue. And then when they're in the scale of -- in the scale stage, this is where we actually begin to unleash the parenting advantage, use the different channels to distribution, use the intelligence that we have in terms of data and look at monetization, whether it's revenue, income generating to see cash post positive or not. Having said that, the normal path to monetize something that is very disruptive is between 5 and 7 years. It's not faster than that. We've monetized for example, a savings pocket. But this is not a huge venture. This is something that initially -- it's a feature that is not going to be a brand by itself that is going to be a feature in one of the segments for BCP. So there's different paths to the innovation and the disruption that we are looking at.

Probably to add something very, very briefly. I will say in the traditional business, the results are already visible, I think, has bring us tremendous value as we have seen today in terms of capacity distribution, efficiency and so on. In terms of the disruption only to add to what Francesca already said, these parameters are limited. There are not a set number for all the time. There are limits like site like an appetite. And down the road, what we expect to have is a lower impact in ROE and is still a significant impact in cost-to-income ratio because the new disruptive initiatives are going to grow in relative size to the traditional ones. So down the road, what they are going to do is accelerate income generation, increase the path of growth impact somehow in ROE, but still continued impacting in terms of cost-to-income ratio. Let think in something like is growing, that is still profitable but has a cost-to-income ratio let's say, in 70%, 80%. What is expected to happen down the road?

Okay. Next question. With a strong focus on financial inclusion and disruptive technology, how do you balance aspirations for earnings growth with the risk associated with entering new markets and the different risk profile that is involved with the new markets or customer segments?

Yes. Great question. Peru employment -- formal employment is less than 25%. Actually, I believe it's less than 20%. So for many, many years, it's been a challenge how to get reasonable data in order to build risk models and on top of that, to distribute through the traditional channels. So what we've been -- we're doing, sorry, for the last, I don't know, 10 years, is by leveraging on the data we've been gathering through the digital channels, more recently, Yape, building new risk model on top of that, enhancing the genes of the models BCP has so as to tap those new segments of the population. How we do it is we go little by little. So basically applying agile methodology under which we assign a pocket of money to test for whatever segment we want to tackle. And if that's successful, then we, let's say, launch break for a new segment. That's, I would say, on BCP. At Mibanco, the story is somehow different. The model of Mibanco is very customers -- is a very customer-facing oriented business model. And basically, we're not tackling any new segments. What we're doing is visiting the same -- yes, visiting the same segment. But as Javier mentioned earlier, it's basically leveraging on these malls in order to provide better offers and better prices.

Just to complement on that, we are not only aim to penetrate the market prudently. Loan to grow, these segments, developing these more sophisticated credit models, but also through efficient channels. Now we have to reduce the distribution cost to reach smaller customers in a profitable way. So it's the combination of both.

Okay. Next question. How does the insurance business deal with the challenge of increased risks around climate change?

Okay. Yes. Well, maybe a different perspective for the question. The first one is well, remember that we manage the risk. We are insurers. So part of our portfolio is exposed to climate change and to that kind of risk. So the first thing that we need to do is to protect our balance to protect our portfolio. And for that, you need adequate reinsurance contracts. And we believe that we have adequate reinsurance contracts only to give you an idea in case of a risk related with climate change, which could be called a catastrophic event like [indiscernible] for example, we retain no more than 15% of the risk, of the losses. And inclusive we have a cap in these losses. So the first perspective is we need to protect our portfolio, and we do this through contracts. And for that, we need the confidence of the reinsurance market, and we have that confidence. The other perspective maybe is related with the opportunities. Of course, our business is risk, our businesses to manage risk. Climate change will be one of the most important risks in the future. Now maybe the main risk -- in the P&C market. I'm talking -- I'm referring to a PSC market. Maybe the main risk now is related with Airways or with property damage and things like that. And maybe in the future, one of the main reason will be the risk related with the climate change. So in that case, we have the opportunity to have new and specific products of course to protect part of the population, part of the personal properties and business properties, small business in most of cases. And maybe we have -- maybe not I am sure we have an opportunity to have a new market there. Another perspective could be related with -- remember that as insurers, we are institutional investors. So we have an important part of our portfolio with different investments. And now we are working in identify and to manage and to control the type of risk or how our portfolio or our clients manage their climate risk, of course, aligned with the credit card strategy, sustainability strategy related with the environmental part. And finally, maybe the last part of the question, last part, probably related with our role in the society. I said our business is to manage risk. Yes, but our business is to manage risk of course, to protect population. And having said that, as part of our sustainability strategy, part of the sustainability strategy focused in education and part of these education programs are related to these people, huge community how to protect to this kind of risk. We have a program called[indiscernible]. And which -- and the main objective of this program is to teach the people how to protect about strong rains, landslide and see things like that. So with all of these perspectives, we can accomplish our ports, which is okay managers that protect the population.

Okay. Next question. Congratulations for your new environmental strategy. Can you mention some of the most important initiatives?

Yes. As I've mentioned before, several times, I always say that we at Credicorp, we don't have an ESG program but a GSE program. Because we started a few years ago by redefining and restating all of our governance, structure and policies. A couple of reasons behind. One is a practical reason, and we were talking about earlier in the morning that when we launched Credicorp 25 years ago. And actually, when we launched Credicorp 25 years ago, it was one bank, one insurance company, property and causality and one offshore bank, whereas today, we're several banks, several microfinance institutions. We were only working in Peru, now we're in the [ Indian ] region and so on. And basically, we didn't change the governance structure. On top of that, we strongly believe that in order to redefine or define our environmental strategy and redefine our social programs, we needed to first redefine our governance structure. So that's the main reason why we started with governance. And I would say you never end up these programs, but we have a check on that matter. Then because of the countries where we operate, we focus on the social matters. And finally, we -- a few months ago, we started with this environmental program which I just mentioned in my presentation, we just ended the whole analysis. Basically, each of the subsidiaries has its own program, it's a 3-year program, each of them is focused on specific targets. The common targets are obviously how to measure our carbon footprint and Scope 1, 2 and 3. More importantly is how to generate culture within the company, within the employees as we strongly believe that the best way to manage environmental matters is to incorporate environment matters within our DNA and within our daily operations, that's a cultural change that will take time. And finally, we're setting some specific indicators in some of the subsidiaries, specifically in the corporate banking business at BCP, we're working with our clients in trying to -- not trying, in helping them understand what they need to do in order for their transition and how can we help them.

Okay. What is the mix of different countries that we should expect in assets and income by 2026? Yape, for example? Will it compete with Nubank in Colombia?

No. By 2026, definitely no. What we're currently doing -- so Yape's story is a success in Peru today. What -- obviously, we have had this discussion of should we export Yape somewhere else. We haven't figured out what we're doing today is playing with the idea and doing some testing in Bolivia. You can share the initial results.

Yes. So in Bolivia, we actually have -- BCP Bolivia has a wallet called Soli, so what we've done is bring a little bit the know-how from Yape to Soli. And within, I think, 9 months or so, we've significantly increased the usage. It went from 6% or 7% effective users, now we're close to 30%. We've increased total users, especially in the small businesses. Today, we're reaching, I think we have over 300,000 active users, and we have like 30,000 active users. So the recipe is working we explain how far we go. But working together with PCP's Bolivia team to kind of take right now the know-how and then we need to figure out, hey, should we take the technology, should we take the brand? Should we take -- those are the discussions that we are currently having.

Maybe leveraging on the question, but going -- is a different answer. We still need to bear in mind that we need to prioritize. We need to focus. And we have this cap of 150 basis points of ROE and 300 basis sort of cost to income. So it's like, okay, it's not that we have an unlimited budget and go wherever we want. We still believe that we have a lot of opportunities in the Peruvian market. And obviously, the Bolivia experiment is not going to cost a lot of money. The idea is we can test in another market -- and if that test works out, we'll figure out if we want to go to larger markets.

Can we have a microphone here at the room, please.

Thank you for organizing a very wonderful Investor Day. I just want to build on that question because I thought it's an interesting one to compare Yape with Nubank because actually we look at the business models, they are completely different, right? Yape is a payment app that becomes a super app. Nubank is a credit -- online credit card business that becomes universal bank, if you will. And so in your case, it seems to me that IO is probably closer to Nubank. And if you look at the -- traditionally, you have been very strong in wholesale, and you're trying to get into retail and your -- if you look at the market share and consumer and credit card is still probably the lowest in your bank even though you're the #1. So maybe if you can talk more about how you can use IO and more digital capability to improve your consumer and credit card business?

Well, you're exactly right. We've been working for the past, I think, maybe 15 years trying to increase our presence in the retail segment, in the lending segment, and now with digital competitors such as Nubank and other fintechs, we decided that this was an offensive move to target that 10% that I mentioned in the presentation, there is a market there currently, but we needed to do it with a different value proposition. Because the consumer business that we have is important. It's 20% or 21%, and there's a lot of retention strategies and technological backlog there. So building EO means using a different back end, which is very important for the credit card business, and completely redesigning the user experience. First, because it's completely digital. And second, it's much more modern. It's targeting a much younger and much smaller segment. And this is a segment that is not currently being serviced by BCP. And so there's UX capabilities, there's technological capabilities, and there's also loyalty schemes that we are going to try different things in EU. This is a speedboat model, which is very important, use BCP's capabilities in terms of risk modeling, licensing, accounting, know your customer, compliance and so forth. But bring out what we think we need to improve. So this is the strategy we'll be launching, as I said, very, very soon. We're in the friends and family stage. And we're going -- we're expecting to see relevant growth in this year and also in 2024.

Okay. We have still some more questions, but due to timing, we will follow up by e-mail for these questions. So thank you very much for being here. And now we will have Gianfranco Ferrari to do the closing remarks.

In 134 years, our businesses have been through changing political and economic backdrops. Nevertheless, we have consistently delivered profitable growth throughout the cycles. We will surely face more volatility, but feel confident that our team, together with our ever-expanding skills and experience will succeed and take advantage of the many opportunities inherent to an emerging market context. Let me ask you today -- let me leave you today with our views on how we continue to prepare for the future. First, we've talked a lot about it this morning, decoupling from the macro. Our goal is to continue to reduce the relation between our results and Peruvian GDP. We will do this by further expanding the share of retail business across our portfolio and leveraging low financial product penetrations in our markets. We will increase focus on noninterest income expansion and on gaining share in transactions by incorporating adjacent business which generate new avenues for payment growth. Such as ticketing or marketplaces among other initiatives. As a result, we expect to continue on our path of growth and profitability; second, strengthening our competitive boats. By becoming increasingly digital and data-driven building client engagement and stickiness through an exceptional UX based on a deep understanding of each client's behavior and preferences. We will optimize our efficiency as we continue to invest in digital capabilities. Experience and efficiency are fundamental pillars for all our lines of businesses. Also, by bolstering our parenting advantage, we are attracting and developing the best talent and becoming a tech and data-driven organization while leveraging synergies to expand market access and distribution channels. We will continue to disrupt ourselves to make sure we're not disrupted by others, innovating with discipline as we shape the financial product and customer experience of the future. Lastly, increasing focus on sustainability. You can expect us to continue strengthening governance and transparency while pursuing social impact initiatives such as financial inclusion and financial education, building the workforce of the future as we further develop digital talent profiles and helping businesses to grow. As of 2023, we will fully develop our environmental program and expect to have an increasing influence on our clients and communities to deepen their sustainability efforts. As the leading financial group in Peru, we intend to play a key role in financing the energy transition. Together with our senior management team today and all of the team at Credicorp, who share the goals and commitments we have highlighted before you this morning. I would like to thank you all for all for joining us and hope to see you soon again. Thank you so much.