Equity Research - Chile

Industry AlertJanuary 10

th, 2018

Chilean banking review Nov -17Strong month for the industry; Itau Corpbanca

reported a new monthly net loss

Banks

We believe that results for the banking industry in Nov - 17 were positive

as banks posted a strong recovery in the top line compared to prior

month. Net income in Nov - 17 for the industry reached CLP 207.1 bn,

equivalent to an increase of 42.1% m/m and 172.6% y/y, respectively.

Given the result on net earnings, profitability, measured in terms of

quarterly ROAE, reached 12.2% compared to 11.5% and 9.0% reported in

Oct - 16 and Nov - 16. Loan growth stayed relatively flat, advancing 4.9%

y/y; this sluggish performance continued to be mainly driven by a 1.8%

y/y growth on the commercial segment. Despite moderate growth,

positive performance across the industry was mainly driven by a 14.3%

y/y increase in the top line. Higher spreads on loans led to a quarterly NIM

of 3.8% relative to 3.7% in Nov - 16. Provision expenses declined 28.1%

y/y, while cost of credit reached 1.1% relatively in line with Oct - 17. On

the other hand, banks maintained efficient cost control policies as OPEX

advanced just 3.6% y/y. We maintain a positive view across the Chilean

banks for 2018 primarily explained by i) better macro outlook, ii) higher

loan growth relative to 2017, and iii) asset quality under control.

Banco de Chile (HOLD; T.P.: CLP 103/share). Solid month for the bank. Net

earnings reached CLP 58.8 bn, compared to CLP 34.4 bn reported last month.

This performance was driven by an increase of 9.2% m/m and 14.3% y/y on the

bank’s operating income. Furthermore, net provision expenses declined 19.3%

m/m and 64.3% y/y as the bank continues to focus on existing clients, while

being conservative on the corporate segment. Our HOLD is unchanged.

Banco Santander Chile (BUY; T.P.: CLP 52.7/share). Positive month for

Santander Chile. Revenues climbed 7.8% m/m and 9.9% y/y, respectively. Net

provision expenses declined 8.6% y/y; however, we acknowledge that

provisions of CLP 29.2 bn were the highest on a YTD basis. On the other hand,

Santander continues to deliver on OPEX as this account advanced a mere

3.9% y/y compared to 7.9% y/y of Banco de Chile. Given this operating

performance, net profits reached CLP 47.9 bn, equivalent to a 39.8% m/m and

42.1% y/y increase. Our BUY is unchanged.

BCI (HOLD; T.P.: CLP 45,500/share). Good month for BCI but below

Santander and Banco de Chile. Net profits grew 25.6% m/m but a mere 2.6%

y/y. We highlight a 30.6% m/m decline on net provision expenses to CLP 13.8

nm. The latter was the lowest level since Jun - 17. Going forward, we will

continue to monitor the evolution of the recent M&A activity as BCI should be

focused on the consolidation of the new acquired assets.

Grupo Security (HOLD; T.P.: CLP 280/share). Great month for Banco

Security. The bank reported net earnings of CLP 6.2 bn, equivalent to a 42.7%

m/m and 65.1% y/y increase. In Nov - 17, Security was able to deliver solid

results on the top line and provision expenses.

Itau Corpbanca (HOLD; T.P.: CLP 6.6/share). A new disappointing month. In

fact, the bank reported a net loss of CLP 390 mn. We suspect that the bank

added provisions on the Alto Maipo case; in fact, this account reached CLP

50.7 bn, vs an average of CLP 22.9 bn on a YTD basis.

CREDICORP CAPITAL RESEARCH

Sebastian Gallego

+(571) 3394400 ext 1594

sgallego@credicorpcapital.com

Carolina Ratto

+(562) 24461768 ext 768

cratto@credicorpcapital.com

IMPORTANT NOTICE (US FINRA RULE 2242) This document is intended for

INSTITUTIONAL INVESTORS and is not subject to all of the independence and

disclosure standards applicable to debt research reports prepared for retail

investors. Credicorp Capital may do or seek to do business with companies

covered in its research reports. As a result, investors should be aware that the firm

may have a conflict of interest that could affect the objectivity of this report.

Investors should consider this report as only a single factor in making their

investment decision. Refer to important disclosures on page 9 to 13, Analyst

Certification on Page 9. Additional disclosures on page 13.

chile ci Low er prov isions

bsan ci Strong top line

bci ci Better asset quality figures

secur ci Best month in earnings

itaucorp ci Net losses again

Industry

View on Nov - 17 results

LTM YTD

chile ci 34.0% 4.3%

bsan ci 36.4% 3.8%

bci ci 30.2% 1.9%

secur ci 30.0% 2.1%

itaucorp ci 3.6% 3.2%

IPSA 37.2% 2.6%

Perfomance (local currency)

Source: SBIF, Bloomberg, Credicorp Capital

Performance IPSA & Chilean Banks (under coverage)

80

90

100

110

120

130

140

150

Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18

Banco de Chile Santander Chile BCI

Security ItauCorpbanca IPSA

Nov - 17 bank results relative to our 4Q17 estimates

Data Model 4Q17 Data Model 4Q17 Data Model 4Q17 Surprise

-45.1% -44.7% -0.92% -1.02% 139,821 154,970 -9.8%

-41.0% -41.4% -1.16% -1.12% 123,249 150,270 -18.0%

-52.6% -52.7% -0.87% -0.9% 78,411 85,165 -7.9%

-60.8% -60.4% -1.76% -1.25% 25,623 35,201 -27.2%

-46.0% -48.9% -1.08% -0.81% 15,941 18,024 -11.6%

-50.9% -1.13% 529,229

Data Model 4Q17 Data Model 4Q17 Data Model 4Q17 Difference

0.4% 4.4% 4.5% 4.4% 18.3% 20.4% -2.0%

2.8% 3.7% 4.6% 4.4% 16.5% 19.8% -3.2%

7.9% 10.5% 3.3% 3.2% 11.6% 12.4% -0.9%

-0.2% 3.6% 3.7% 3.2% 3.2% 4.3% -1.1%

7.7% 9.7% 3.0% 2.9% 12.9% 13.8% -0.9%

4.9% 3.8% 11.8%

Net income*

Bank

Cost of creditCost to income

Industry

Banco de Chile

Santander Chile

BCI

Itau Corpbanca

Banco Security

ROAE*

Banco Security

Industry

Bank

Banco de Chile

Santander Chile

BCI

Itau Corpbanca

Loan growth NIM

*Level if monthly figure is maintained; other indicators compare last three month data vs our valuation model estimate

*Colors according to the following table

-100% <50%

-50% -50% - 0%

50% 0% - 50%

100% >50%

2

Market share by loans (total gross loans in Chile)

November 2016 November 2017

Source: SBIF, Credicorp Capital

3

Monthly Result by banking institution

CLP bn Nov-16 Oct-17 Nov-17 Nov-16 Oct-17 Nov-17 Nov-16 Oct-17 Nov-17

Income Statement

NII 549.8 520.5 612.7 104.2 105.5 120.9 100.4 93.2 114.2

Net fee income 133.2 143.1 146.4 20.9 22.5 21.0 24.9 28.2 27.8

Operating revenue 706.5 739.3 807.4 132.9 135.5 146.1 135.6 126.0 149.3

Provision expenses -234.4 -139.8 -168.5 -32.0 -26.2 -29.2 -51.5 -22.8 -18.4

Operating expenses -393.8 -388.1 -407.9 -58.8 -60.5 -61.1 -59.9 -59.8 -64.6

Net income 76.0 145.7 207.1 33.7 34.3 47.9 24.5 34.4 58.8

YoY % -53.2% -2.4% 172.6% 7.4% -15.1% 42.1% -53.2% -17.6% 140.6%

MoM % -49.1% -25.5% 42.1% -16.5% -28.0% 39.8% -41.4% -31.8% 71.1%

Accum. net income 1,795.2 1,867.8 2,074.9 437.8 464.4 512.3 494.4 468.0 526.9

YoY % -11.2% 8.6% 15.6% 1.6% 14.9% 17.0% -6.4% -0.4% 6.6%

Ratios (L3M annualized except for capital ratio)

Profitability & efficiency

NIM 3.7% 3.6% 3.8% 4.3% 4.4% 4.6% 4.3% 4.2% 4.5%

Cost-to-income ratio -55.4% -52.0% -50.9% -43.5% -41.6% -41.0% -46.5% -46.1% -45.1%

ROAA 0.8% 1.0% 1.0% 1.3% 1.6% 1.6% 1.4% 1.7% 1.8%

ROAE 9.0% 11.5% 12.2% 15.8% 17.3% 17.4% 15.3% 18.1% 18.8%

Asset Quality

Cost of credit -1.3% -1.0% -1.1% -1.3% -1.1% -1.2% -1.5% -0.9% -0.9%

NPL ratio 1.9% 1.9% 1.9% 2.1% 2.2% 2.2% 1.2% 1.2% 1.2%

NPL coverage 160% 156% 158% 146% 136% 135% 269% 251% 251%

Capital ratio

BIS ratio 13.7% 13.8% n.a. 13.3% 13.8% n.a. 13.8% 14.4% n.a.

Balance Sheet (exc. International operations)

Gross loans 140,443 145,471 147,289 26,913 27,312 27,667 25,279 25,426 25,385

YoY % 5.9% 4.7% 4.9% 6.8% 2.4% 2.8% 3.7% 2.2% 0.4%

Source: SBIF, Credicorp Capital

Industry Santander Chile Banco de Chile

Santander Chile19.2%

Banco de Chile18.0%

BCI13.1%

Itau Corpbanca

11.5%

BBVA6.6%

Security3.2%

Banco de Estado14.8%

Others13.7%

Santander Chile18.8%

Banco de Chile17.2%

BCI13.5%

Itau Corpbanca

10.9%

BBVA6.7%

Security3.3%

Banco de Estado15.3%

Others14.3%

Funding structure per bank (includes foreign subsidiaries)

Source: SBIF, Credicorp Capital

4

Monthly Result by banking institution

CLP bn Nov-16 Oct-17 Nov-17 Nov-16 Oct-17 Nov-17 Nov-16 Oct-17 Nov-17

Income Statement

NII 75.6 67.8 75.3 71.4 69.8 86.3 12.1 13.2 13.7

Net fee income 14.8 13.3 16.0 21.9 22.8 23.4 3.8 5.1 5.3

Operating revenue 50.9 93.5 98.6 100.8 109.8 113.8 18.8 19.5 22.1

Provision expenses -71.3 -14.9 -50.7 -13.7 -19.9 -13.8 -4.5 -6.2 -3.2

Operating expenses -60.0 -55.0 -57.5 -57.2 -59.1 -62.1 -12.9 -7.6 -10.9

Net income -47.7 17.5 -0.4 28.4 23.2 29.1 3.8 4.4 6.2

YoY % -320.4% -651.7% -99.2% 8.9% -12.4% 2.6% -614.1% 5.0% 65.1%

MoM % 1406.9% 1545.2% -102.2% 7.2% -18.5% 25.6% -9.3% -16.0% 42.7%

Accum. net income 3.0 102.5 102.1 309.0 337.9 367.0 47.8 49.2 55.4

YoY % -99.0% 102.0% 3272.3% 3.0% 20.4% 18.8% 4.2% 11.7% 15.9%

Ratios (L3M annualized except for capital ratio)

Profitability & efficiency

NIM 3.2% 3.4% 3.7% 3.5% 3.2% 3.3% 2.8% 3.0% 3.0%

Cost-to-income ratio -84.5% -67.3% -60.8% -54.4% -52.7% -52.6% -64.2% -44.4% -46.0%

ROAA -0.7% 0.3% 0.2% 1.1% 1.0% 1.0% 0.8% 1.0% 1.0%

ROAE -6.2% 2.5% 2.3% 13.2% 11.8% 11.9% 10.8% 12.0% 12.8%

Asset Quality

Cost of credit -2.5% -1.4% -1.8% -1.0% -0.9% -0.9% -0.8% -1.2% -1.1%

NPL ratio 1.8% 2.1% 2.0% 1.5% 1.5% 1.4% 1.4% 1.3% 1.3%

NPL coverage 157% 141% 157% 134% 129% 134% 131% 130% 134%

Capital ratio

BIS ratio 14.0% 14.6% n.a. 13.4% 13.5% n.a. 13.2% 13.2% n.a.

Balance Sheet (exc. International operations)

Gross loans 16,148 15,811 16,117 18,448 19,703 19,909 4,446 4,746 4,789

YoY % -0.7% -1.7% -0.2% 8.1% 8.6% 7.9% 11.1% 10.1% 7.7%

Source: SBIF, Credicorp Capital

SecurityBCIItau Corpbanca

26% 32% 33%19%

12%23%

43%39% 41%

44% 52%

53%

7% 4%7%

11% 4%

5%

24% 25% 19%26% 32%

20%

0%

20%

40%

60%

80%

100%

Santander Chile Banco de Chile BCI Itau Corpbanca Security Banco de Estado

Demand deposits Time deposits Interbank loans Bonds

Relative Valuation and Summary

Credicorp Capital Coverage

Latam Relative Valuation

From Credicorp Capital earnings models

Source: Bloomberg, Company Reports, Credicorp Capital

5

Price Target Market Cap CC Dvd Yield

(local) (local) (USD mn) Rating 2015 2016 2017E 2018E 2016 2017E 2018E 2018E 2015 2016 2017E 2018E

Chile CL 102.8 103.0 16,512 HOLD 12.0 13.8 17.3 15.7 2.7 3.3 3.1 3.1% 21.2% 19.6% 19.6% 20.6%

BCI CL 43,575 45,500 8,956 HOLD 8.8 11.8 13.5 14.1 1.7 1.9 1.8 2.6% 17.4% 15.1% 15.1% 13.3%

Itaucorp CL 5.78 6.6 4,870 HOLD nm nm 21.1 14.2 0.9 0.9 0.9 1.4% 14.8% -0.9% 4.4% 6.3%

Security CL 286 280 1,733 HOLD 9.6 9.9 13.1 12.2 1.3 1.7 1.6 3.8% 12.1% 13.1% 12.6% 13.4%

Bsan CL 50.0 52.7 15,506 BUY 13.3 14.9 16.4 15.1 2.4 3.0 2.8 4.0% 16.8% 16.9% 19.3% 19.4%

Bcolo CO 30,800 31,000 10,162 HOLD 8.2 9.1 13.4 12.3 1.2 1.3 1.2 3.3% 13.9% 14.1% 10.1% 10.4%

Dav iv ienda CO 30,000 34,200 4,656 HOLD 7.8 7.8 10.0 8.6 1.4 1.3 1.1 3.0% 15.4% 18.6% 13.0% 13.9%

Av al CO 1,290 1,330 9,876 HOLD 11.9 12.3 14.5 12.0 1.7 1.8 1.7 4.6% 14.6% 14.2% 12.7% 14.8%

IFS PE 39.7 38.0 4,491 HOLD 6.9 14.1 16.4 13.8 2.4 2.5 2.2 2.4% 28.9% 18.0% 15.9% 16.8%

Banking Coverage Median 8,956 9.2 12.0 14.5 13.8 1.7 1.8 1.7 3.1% 15.4% 15.1% 13.0% 13.9%

LATAM BANKS MEDIAN 9,266 9.5 12.1 12.0 12.0 2.0 1.9 1.7 3.2% 18.5% 16.7% 16.1% 16.4%

CountryP/E P/B ROAE

Banco de Chile

BCI

Itau Corpbanca

Grupo Security

Santander Chile

Bancolombia

Dav iv ienda

Grupo Av al

IFS

Credicorp

Banco de Brasil

Bradesco

Itau

Santander Brasil

Banrisul

Banorte

Gentera

Santander Mex icoGrupo InbursaBanregio

Macro

Galicia

BBVA Frances

y = 14.922x + 1.3224R² = 0.7387

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

-6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

20

18

E P

/B

(2018E ROAE - Ke)

Credicorp Capital Estimates

Not cov ered (consensus)

Inflation vs NIM Real GDP growth vs Industry loan growth

Source: SBIF

6

Loan mix

-1%

1%

3%

5%

7%

9%

11%

13%

15%

17%

-1%

1%

3%

5%

7%

9%

11%

Nov

-10

Nov

-11

Nov

-12

Nov

-13

Nov

-14

Nov

-15

Nov

-16

Nov

-17

Lo

an g

row

th

GD

P

Real GDP growth Industry loan growth

Commercial51.0%

Consumer16.4%

Mortgage32.6%

Commercial54.9%

Consumer15.7%

Mortgage29.3%

Commercial64.5%

Consumer11.8%

Mortgage23.7%

Commercial68.0%

Consumer12.2%

Mortgage19.9%

Commercial78.1%

Consumer9.0%

Mortgage12.9%

Santander ChileBanco de Chile

BCI SecurityItau Corpbanca

Commercial57.9%Consumer

13.6%

Mortgage28.5%

Industry

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

3.0%

3.5%

4.0%

4.5%

5.0%

Nov

-11

Nov

-12

Nov

-13

Nov

-14

Nov

-15

Nov

-16

Nov

-17

Inflatio

nNIM

NIM Inflation

Loan growth y/y Deposit growth y/y

Demand deposit growth y/y LTD ratio

NPL coverage (>90 days)NPL ratio (>90 days)

Source: SBIF

7

-10%

0%

10%

20%

30%

40%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

-20%

-10%

0%

10%

20%

30%

40%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

-20%

-10%

0%

10%

20%

30%

40%

50%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

100%

110%

120%

130%

140%

150%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

Quarterly NIM Quarterly cost of credit

Cost-to-income Quarterly ROAA

BIS ratioQuarterly ROAE

Source: SBIF

8

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

20.0%

40.0%

60.0%

80.0%

100.0%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Nov-10 Nov-11 Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Santander Chile Banco de Chile BCI

Security Itau Corpbanca Industry

7.5%

10.0%

12.5%

15.0%

17.5%

Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17

Santander Chile Banco de Chile

BCI Security

Itau Corpbanca Industry

Important DisclosuresThis research report was prepared by Credicorp Capital Peru S.A and/or Credicorp Capital Colombia Sociedad Comisionista de

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Credicorp Capital Securities Inc. or its affiliates currently have or had, within the past 12 months, the following company as

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Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for investment banking

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Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for non-investment-

baking securities-related services from the following company(ies): Banco de Chile, BCI, Itaú Corpbanca, Santander

Credicorp Capital Securities Inc. or its affiliates currently provides or have provided, within the past 12 months, non-securities-related

services to the following company(ies): Banco de Chile

Credicorp Capital Securities Inc. or its affiliates also have received compensation, within the past 12 months, for non-securities

services from the following company(ies): Banco de Chile

E. Market Making

Credicorp Capital Securities Inc. or its affiliates act as market maker in the following company (ies): Grupo Security

Type of instruments More than USD 1,000,000

Other equity securitiesBanco de Chile, BCI, Santander,

Itaú Corpbanca

Debt securities BCI

Derivatives on

equity /debt securities-

F. Rating System

Stock ratings are based on the analyst’s expectation of the stock’s total return during the twelve to eighteen months following

assignment of the rating. This view is based on the target price, set as described below, and on the analyst’s opinion, general market

conditions and economic developments.

Buy: Expected returns of 5 percentage points or more in excess over the expected return of the local index, over the next 12-18

months.

Hold: Expected returns of +/- 5% in excess/below the expected return of the local index over the next 12-18 months.

Underperform: Expected to underperform the local index by 5 percentage points or more over the next 12-18 months.

Under Review: Company coverage is under review.

The IPSA, COLCAP and IGBVL indexes are the selective equity indexes calculated by the Bolsa de Comercio de Santiago, the

Bolsa de Valores de Colombia, and the Bolsa de Valores de Lima, respectively.

In making a recommendation, the analyst compares the target price with the actual share price, and compares the resulting

expected return for the IPSA, the COLCAP, and/or the SPBVL indexes, as estimated by Credicorp Capital S.A. Corredores de Bolsa,

Credicorp Capital Colombia Sociedad Comisionista de Bolsa, and/or CredicorpCapital Peru S.A, and then makes a recommendation

derived from the difference in upside potential between the shares and the respective index.

G. Distribution of Ratings

H. Price Target

Unless otherwise stated in the text of this report, target prices in this report are based on either a discounted cash flow valuation or

comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of

this fundamental valuation is adjusted to reflect the analyst’s views on the likely course of investor sentiment. Whichever valuation

method is used there is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include

unforeseen changes in competitive pressures or in the level of demand for the company’s products. Such demand variations may

result from changes in technology, in the overall level of economic activity or, in some cases, in fashion. Valuations may also be

affected by changes in taxation, in exchange rates and, in certain industries, in regulations. Investment in overseas markets and

instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, and

political and social conditions. This discussion of valuation methods and risk factors is not comprehensive – further information is

available upon request.

Buy Hold Underperform Restricted / UR

Companies covered with this rating 32% 41% 18% 9%

29% 40% 31% 43%

*Percentage of investment banking clients in each rating category.

Compensation for investment banking

serv ices in the past 12 months*

II.ADDITIONAL DISCLOSURES

This product is not for retail clients or private individuals.

The information contained in this publication was obtained from various publicly available sources believed to be reliable, but has not

been independently verified by the companies jointly referred as Credicorp Capital, therefore they do not warrant the completeness

or accuracy of such information and does not accept any liability with respect to the accuracy or completeness of such information,

except to the extent required by applicable law.

This publication is a brief summary and does not purport to contain all available information on the subjects covered. Further

information may be available on request. This report may not be reproduced for further publication unless the source is quoted. This

publication is for information purposes only and shall not be construed as an offer or solicitation for the subscription or purchase or

sale of any securities, or as an invitation, inducement or intermediation for the sale, subscription or purchase of any securities, or for

engaging in any other transaction. This publication is not for private individuals.

Any opinions, projections, forecasts or estimates in this report are those of the author only, who has acted with a high degree of

expertise. They reflect only the current views of the author at the date of this report and are subject to change without notice. The

companies jointly referred to as Credicorp Capital have no obligation to update, modify or amend this publication or to otherwise

notify a reader or recipient of this publication in the event that any matter, opinion, projection, forecast or estimate contained herein,

changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. The analysis, opinions,

projections, forecasts and estimates expressed in this report were in no way affected or influenced by the issuer. The author of this

publication benefits financially from the overall success of Credicorp Capital.

The investments referred to in this publication may not be suitable for all recipients. Recipients are urged to base their investment

decisions upon their own appropriate investigations that they deem necessary. Any loss or other consequence arising from the use

of the material contained in this publication shall be the sole and exclusive responsibility of the investor and Credicorp Capital

accepts no liability for any such loss or consequence. In the event of any doubt about any investment, recipients should contact their

own investment, legal and/or tax advisers to seek advice regarding the appropriateness of investing. Some of the investments

mentioned in this publication may not be readily liquid investments. Consequently it may be difficult to sell or realize such

investments. The past is not necessarily a guide to future performance of an investment. The value of investments and the income

derived from them may fall as well as rise and investors may not get back the amount invested. Some investments discussed in this

publication may have a high level of volatility. High volatility investments may experience sudden and large falls in their value which

may cause losses. International investing includes risks related to political and economic uncertainties of foreign countries, as well

as currency risk.

To the extent permitted by applicable law, no liability whatsoever is accepted for any direct or consequential loss, damages, costs or

prejudices whatsoever arising from the use of this publication or its contents.

This report may not be independent of Credicorp Capital’s proprietary interests. Credicorp Capital trades the securities covered in

this report for its own account and on a discretionary basis on behalf of certain clients. Such trading interests may be contrary to the

recommendation(s) offered in this report

Credicorp Capital (and its affiliates) has implemented written procedures designed to identify and manage potential conflicts of

interest that arise in connection with its research business, which are available upon request. The Credicorp Capital research

analysts and other staff involved in issuing and disseminating research reports operate independently of Credicorp Capital’s

Investment Banking business. Information barriers and procedures are in place between the research analysts and staff involved in

securities trading for the account of Credicorp Capital or clients to ensure that price sensitive information is handled according to

applicable laws and regulations.

Country and region disclosures

United Kingdom: This document is for persons who are Eligible Counterparties or Professional Clients only and is exempt from the

general restriction in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements

to engage in investment activity on the grounds that it is being distributed in the United Kingdom only to persons of a kind described

in Articles 19(5) (Investment professionals) and 49(2) (High net worth companies, unincorporated associations, etc.) of the Financial

Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on,

directly or indirectly, to any other class of persons. Any investment to which this document relates is available only to such persons

and other classes of person should not rely on this document.

United States: This communication is only intended for, and will only be distributed to, persons residing in any jurisdictions where

such distribution or availability would not be contrary to local law or regulation. This communication must not be acted upon or relied

on by persons in any jurisdiction other than in accordance with local law or regulation and where such person is an investment

professional with the requisite sophistication to understand an investment in such securities of the type communicated and assume

the risks associated therewith.

This communication is confidential and is intended solely for the addressee. It is not to be forwarded to any other person or copied

without the permission of the sender. This communication is provided for information only. It is not a personal recommendation or an

offer to sell or a solicitation to buy the securities mentioned. Investors should obtain independent professional advice before making

an investment.

Notice to U.S. Investors: This material is not for distribution in the United States, except to “major US institutional investors” as

defined in SEC Rule 15a-6 ("Rule 15a-6") and related guidance. Credicorp Capital and its affiliates has entered into arrangements

with Credicorp Capital Securities Inc., which enables this report to be furnished to certain U.S. recipients in reliance on Rule 15a-6

through Credicorp Capital Securities Inc., which is registered under the U.S. Securities Exchange Act of 1934, as amended.

Each U.S. recipient of this report represents and agrees, by virtue of its acceptance thereof, that it is a "major U.S. institutional

investor" (as such term is defined in Rule 15a-6) and that it understands the risks involved in executing transactions in such

securities. Any U.S. recipient of this report that wishes to discuss or receive additional information regarding any security or issuer

mentioned herein, or engages in any transaction to purchase or sell or solicit or offer the purchase or sale of such securities, should

contact a registered representative of the Credicorp Capital Securities Inc. that provided the report.

Credicorp Capital Securities Inc. is a broker-dealer registered with the SEC, a member of FINRA and SIPC. You can reach

Credicorp Capital Securities Inc. At 121 Alhambra Plaza, suite 1200, Coral Gables, Miami 33134, phone (305) 4480971 Equity

trading: 786 999 1633.

You may obtain information about SIPC, including the SIPC brochure, by contacting SIPC directly at 202-371-8300; website:

http://www.sipc.org

Credicorp Capital Securities Inc., is a wholly owned subsidiary of Credicorp Capital Ltd.

Nothing herein excludes or restricts any duty or liability to a customer that Credicorp Capital Securities Inc. have under applicable

law. Investment products provided by or through Credicorp Capital Securities Inc. are not insured by the Federal Deposit Insurance

Corporation and are not deposits or other obligations of any insured depository institution, may lose value and are not guaranteed by

the entity that published the research as disclosed on the front page and are not guaranteed by Credicorp Capital Securities Inc.

Investing in non-U.S. Securities may entail certain risks. The securities referred to in this report and non-U.S. issuers may not be

registered under the U.S. Securities Act of 1933, as amended, and the issuer of such securities may not be subject to U.S. reporting

and/or other requirements. Rule 144A securities may be offered or sold only to persons in the U.S. who are Qualified Institutional

Buyers within the meaning of Rule 144A under the Securities Act. The information available about non-U.S. companies may be

limited, and non-U.S. companies are generally not subject to the same uniform auditing and reporting standards as U.S. companies.

Securities of some non-U.S. companies may not be as liquid as securities of comparable U.S. companies. Securities discussed

herein may be rated below investment grade and should therefore only be considered for inclusion in accounts qualified for

speculative investment.

Analysts employed by one of the companies jointly referred to as Credicorp Capital, all of which are non-U.S. broker-dealers, are not

required to take the FINRA analyst exam. The information contained in this report is intended solely for certain "major U.S.

institutional investors" and may not be used or relied upon by any other person for any purpose. Such information is provided for

informational purposes only and does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of

1933, as amended, or under any other U.S. federal or state securities laws, rules or regulations. The investment opportunities

discussed in this report may be unsuitable for certain investors depending on their specific investment objectives, risk tolerance and

financial position.

In jurisdictions where Credicorp Capital Securities Inc. is not registered or licensed to trade in securities, or other financial products,

transactions may be executed only in accordance with applicable law and legislation, which may vary from jurisdiction to jurisdiction

and which may require that a transaction be made in accordance with applicable exemptions from registration or licensing

requirements.

The information in this publication is based on sources believed to be reliable, but Credicorp Capital Securities Inc. does not make

any representation with respect to its completeness or accuracy. All opinions expressed herein reflect the author's judgment at the

original time of publication, without regard to the date on which you may receive such information, and are subject to change without

notice.

Credicorp Capital Securities Inc. or its affiliates may have issued other reports that are inconsistent with, and reach different

conclusions from, the information presented in this report. These publications reflect the different assumptions, views and analytical

methods of the analysts who prepared them. Past performance should not be taken as an indication or guarantee of future

performance, and no representation or warranty, express or implied, is provided in relation to future performance.

Credicorp Capital Securities Inc. and any company affiliated with it may, with respect to any securities discussed herein: (a) take a

long or short position and buy or sell such securities; (b) act as investment and/or commercial bankers for issuers of such securities;

(c) act as market makers for such securities; (d) serve on the board of any issuer of such securities; and (e) act as paid consultant or

advisor to any issuer. The information contained herein may include forward-looking statements within the meaning of U.S. federal

securities laws that are subject to risks and uncertainties. Factors that could cause a company's actual results and financial condition

to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely

affect the level of demand for the company's products or services, changes in foreign exchange markets, changes in international

and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking

statements contained in this report are qualified in their entirety by this cautionary statement.

Other countries: Laws and regulations of other countries may also restrict the distribution of this report. Persons in possession of

this document should inform themselves about possible legal restrictions and observe them accordingly.

Heinrich Lessau Hugo Horta

Director of Research Director of Sales & Trading

hlessau@credicorpcapital.com hhorta@credicorpcapital.com

# (562) 2446 1704 # (511) 416 3333 Ext 36088

CHILE PERU COLOMBIA CHILE PERU COLOMBIA

Carolina Ratto Mallie Héctor Collantes Juan Camilo Dauder René Ossa Rodrigo Zavala Juan A. Jiménez

Head of Equity Research - Retail Head of Equity Research - Mining Head of Equity Research International Equity Sales Head of Equity - Peru Head of International Equity Sales

cratto@credicorpcapital.com hcollantes@credicorpcapital.com jdauder@credicorpcapital.com reneossa@credicorpcapital.com rzavala@credicorpcapital.com jjimenez@credicorpcapital.com

# (562) 2446 1768 # (511) 416 3333 Ext 33052 # (571) 339 4400 Ext 4155 # (562) 2651 9324 # (511) 313 2918 Ext 36044 # (571) 339 4400 Ext 1701

Tomás Sanhueza Luis Vicente Sebastián Gallego Sebastian Kreis Santiago Castro

Senior Analyst: Utilities & Small-Caps Associate: Banks Head Equity Sales Chile International Sales & Trading

lvicente@credicorpcapital.com sgallego@credicorpcapital.com skreis@credicorpcapital.com scastro@credicorpcapital.com

tsanhueza@credicorpcapital.com # (511) 416 3333 Ext 37854 # (571) 339 4400 Ext 1594 # (562) 2446 1738 # (571) 339 4400 Ext 1344

# (562) 2446 1751

Ursula Mitterhofer

Andrés Cereceda Raúl F. Jacob Steffania Mosquera Sales & Trading

Analyst: Cement & Construction Senior Analyst: Infraestructure, umitterhofer@credicorpcapital.com

rjacob@credicorpcapital.com consumption # (562) 2450 1613

acereceda@credicorpcapital.com # (511) 416 3333 Ext 36065 smosquera@credicorpcapital.com

# (562) 2446 1798 # (571) 339 4400 Ext 1025 Credicorp Capital UK Ltd.

Frederic Cartallier, CFA Ángela María González Marilyn Macdonald Cristián Castillo

Senior Analyst: Utilities Senior Analyst: Transport, TMT & NBFS International Equity Sales International Sales Trader

fcartallier@credicorpcapital.com agonzalezc@credicorpcapital.com mmacdonald@credicorpcapital.co.uk ccastillo@credicorpcapital.com

# (562) 2651 9332 # (571) 339 4400 Ext 1365 # (4477) 7151 5855 # (786) 999 1633

Felipe Navarro

Analyst

fnavarro@credicorpcapital.com

# (562) 2450 1688 Andrés Nariño Alfredo Bejar

Director Sales Offshore Head of International FI

Ana María Bauzá anarino@credicorpcapital.com alfredobejarg@credicorpcapital.com

Research Coordinator # (571) 339-4400 Ext. 1459 # (511) 205 9190 Ext 36148

abauza@credicorpcapital.com

# (562) 2450 1609 CHILE PERU COLOMBIA

Gonzalo Covarrubias Evangeline Arapoglou Carlos Sanchez

Head of Capital Markets Head of international FI Sales Head of Fixed Income

CHILE PERU COLOMBIA gcovarrubias@credicorpcapital.com earapoglou@credicorpcapital.com csanchez@credicorpcapital.com

# (562) 2450 1635 # (511) 416 3333 Ext 36099 # (571) 323 9154

Maria Eugenia Diaz Diego Cavero Daniel Velandia, CFA

Head of Fixed Income Research Senior Fixed Income Analyst Head of Research & Chief Economist Guido Riquelme Andrés Valderrama Camilo Moreno

mediaz@credicorpcapital.com dcavero@credicorpcapital.com dvelandia@credicorpcapital.com Head of Sales Fixed Income Sales Head of Sales

# (562) 2651 9308 # (511) 416 3333 Ext 37946 # (571) 339 4400 Ext 1505 griquelme@credicorpcapital.com jvalderrama@credicorpcapital.com cmoreno@credicorpcapital.com

# (562) 2446 1712 # (511) 416 3333 Ext 40352 # (571) 323 9252

Ignacio Sabelle Juan Pablo Brosset Camilo A. Durán

Fixed Income Analyst Fixed Income Analyst Macro Analyst Belén Larraín Natalia Jurado Andrés Agudelo

isabelle@credicorpcapital.com jpbrosset@credicorpcapital.com caduran@credicorpcapital.com Head of International FI Sales Fixed Income Sales Fixed Income Sales

# (562) 2651 9368 # (511) 416 3333 Ext 36018 # (5511) 339 4400 Ext. 1383 blarrain@credicorpcapital.com njurado@credicorpcapital.com aagudelo@credicorpcapital.com

# (562) 2446 1720 # (511) 416 3333 Ext 36027 # (571) 339 4400 Ext 1768

Felipe Guzmán

Senior Economist Juan Francisco Mas Lizeth Espiritu Emilio Luna

fguzman@credicorpcapital.com Fixed Income Sales Fixed Income Sales Fixed Income Sales

# (562) 2651 9385 jfmas@credicorpcapital.com lespiritu@credicorpcapital.com eluna@credicorpcapital.com

# (562) 2446 1792 # (511) 416 3333 Ext 36143 # (571) 339 4400 Ext 1761

Rafael Gaete Guillermo Arana

Local Fixed Income Sales Fixed Income Sales

rgaete@credicorpcapital.com garana@credicorpcapital.com

# (562) 2651 9336 # (511) 313 2902 Ext. 36144

Diego Hidalgo Patricio Luza

Local Fixed Income Sales Fixed Income Sales

dhidalgo@credicorpcapital.com pluza@credicorpcapital.com

# (562) 2450 1693 # (511) 416 3333 Ext. 36168

Jhonathan Rico Michael Tafur

Fixed Income Sales Fixed Income Sales

jrico@credicorpcapital.com mtafur@credicorpcapital.com

# 1 (786) 999 1614 # 1 (786) 999 1607

Credicorp Capital Securities INC

Senior Analyst: Food & Beverages,

Transport, Telecom & I.T.

CONTACT LIST

ANDEAN RESEARCH TEAM SALES & TRADING

EQUITY RESEARCH EQUITY SALES & TRADING

Senior Analyst: Healthcare, Pension

Funds, Pulp & Paper.

FIXED INCOME SALES & TRADING

FIXED INCOME & ECONOMICS RESEARCH

Credicorp Capital Securities INC