Investors Report. Third Quarter 2016

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Mildred Douglas
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1 Investors Report Third Quarter 2016

2 Disclaimer This document has been elaborated as a part of the information policies and transparency of BBVA Continental and contains public information, own source and provided by third parties, that can be corroborated with their sources. This document has been prepared solely for informational purposes and does not constitute an offer, or invitation or solicitation of an offer to subscribe or purchase securities. This document and its contents does not constitute the basis for any contract or commitment. This document may not be photocopied, reproduced and/or distributed in whole or in part, without prior authorization from BBVA Continental.

3 Sections 1 Peru: Attractive economy and financial system 2 Organization 3 BBVA Continental vs. Peers 4 Ratings 5 Social responsibility and Awards

4 Peru: Attractive economy & financial system

5 Peru: one of the most stable and fastest-growing economies in the region Peru is one of the economies with fastest growth in Latin America Real GDP with one of the lowest inflation rates in the region Inflation (End of Period) 4.8% 4.6% 7.1% 7.0% 6.9% 3.9% 3.8% 2.4% 2.8% 1.8% 1.7% 1.0% -3.0% 3.7% 3.5% 3.5% 3.5% 3.1% 3.0% 2.9% Peru Colombia Mexico Chile Brazil Average 2016 Projected Brazil Colombia Chile Peru Mexico Average 2016 Projected Source: IMF, Central Bank of Peru & BBVA Research 5

6 sovereign investment grade, relatively stable currency and low levels of debt Ratings AA- BBB+ BBB+ BBB BB Investment Grade: BBB- BB B- CCC Public Debt as a percentage of GDP 65.7% Average debt of the General Government / GDP for countries with BBB+ rating for % 22.2% Source: Standard & Poor s Currency depreciation against USD 5% 0% -5% -10% -15% -20% -25% -30% -35% -40% Jan-15 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Chile Brazil Colombia Mexico Peru -7.72% % % % % 20.4% 20.1% 19.6% T16 Source: Central Bank of Peru Source: Bloomberg 6

7 Peru has a solid Financial System with great opportunities of expansion The Peruvian Banking System has shown strong growth Performing loans and Deposits PEN thousands of millions with great potential for future expansion Loans to private sector as a percentage of GDP 2015 CAGR L: 15.9% D: D: 14.5% % YOY 4.9% 68% YOY 5.7% 47% 37% 33% Dec-12 Dec-13 Dec-14 Dec-15 Sep-16 Loans Deposits* Chile Brazil Colombia Peru Mexico *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP Source: World Bank. 7

PEN USD and an active Central Bank, which promotes PEN denomination of Loans PEN -

50% 2.55 2.78 50% Loans PEN 54% 53% 55% 2.80 2.80 57% 52% 53% Exchange rate PEN/USD 2.

18 50% *Other obligations are excluded from deposits Source; Superintendencia de Banca,

Reserve Requirement in foreign currency (FC) for growing FC loans.

exchange rate. Increase in the marginal reserve requirement in FC.

2013 2014 2015 2016 Steady reduction of the legal reserve requirement in PEN in order

8 PEN USD and an active Central Bank, which promotes PEN denomination of Loans PEN - denominated Loans and Deposits at the Banking System 70% 65% 60% 55% 50% 45% 58% 58% 50% % Loans PEN 54% 53% 55% % 52% 53% Exchange rate PEN/USD % 67% % *Other obligations are excluded from deposits Source; Superintendencia de Banca, Seguros y AFP % 69% % Deposits PEN* 67% % Objective: Reducing credit exchange rate risk Central Bank Mesures: Additional Legal Reserve Requirement in foreign currency (FC) for growing FC loans. Additional Legal Reserve Requirement for Derivatives to reduce the upward pressure on exchange rate. Increase in the marginal reserve requirement in FC. Increase the legal reserve requirement in FC linked to targets to reduce loans in FC* Steady reduction of the legal reserve requirement in PEN in order to encourage loan growth in PEN New Currency Repos to convert liquidity in FC to liquidity in PEN. Auction of deposit of the Public Sector. *Excluded operations higher than USD10MM and 3 years (before 4 years) from June Source: Banco Central de Reserva del Perú, BCRP 8

9 Organization

10 Shareholders BBVA Continental and Subsidiaries are part of the Economic Group formed by BBVA Group and Breca: % % Comercializadora Corporativa S.A.C Holding Continental S.A % Newco Peru S.A.C 46.12% 0.009% 92.24% BBVA Continental Otros 7.76% 100% 99.99% 99.99% 100% 100% 100% 100% BBVA Asset Continental Inmuebles y Forum Forum BBVA Consumer Continental Management Sociedad Recuperaciones Comercializadora Distribuidora del Finance EDPYME Bolsa SAB S.A Continental SAF Titulizadora Continental S.A. del Perú S.A. Perú S.A. S.A. S.A. 0.01% 0.01%

BBVA Group September 2016 Appropriate balance between developed and emerging markets that allows the BBVA Group to diversify its sources of income by providing a high degree of recurrence in their

11 BBVA Group September 2016 Appropriate balance between developed and emerging markets that allows the BBVA Group to diversify its sources of income by providing a high degree of recurrence in their results Gross Income Sep-16 (1) 16.4% of BBVA Group s Gross Income Developed Weight: 39% YoY var.: -5% Emerging Weight: 61% YoY var.: +34% 1/ Excludes Corporate activities; YoY change in constant Euros Source: BBVA Group 11

12 12 Breca Business group founded by the Brescia Cafferata family, is one of the largest business conglomerates in Peru, with operations in Peru, Chile and Brazil Board of Directors Management Committee FINANCIAL SERVICES INSURANCE AND HEALTH INDUSTRY MINING TOURISM REAL ESTATE FISHING AND AGROINDUSTRY SPECIALIZED SERVICES Marcobre

13 Peruvian Financial System September 2016 Financial system Banking system Other financial institutions Institution PEN Million Net loans Sep-16 Deposits* Sep-16 Net Income Sep-16 Banks (16) 222, ,488 5,258 Banco de la Nación 9,523 20, Cajas Municipales (12) 14,718 15, Financieras (11) 8,729 5, Cajas Rurales (6) Edpymes (10) 1,394-0 Leasing (2) COFIDE 6, Agrobanco 1,604-5 The four largest banks concentrate around 82% of the banks loans and deposits 13% 9% 8% Loans Loans 87% Deposits 91% Net Income 92% *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP Banking System Other Financial Institutions 13

14 Key performance indicators of BBVA Continental: September 2016 Ranking among the 4 largest banks in terms of assets: #1 in Cost of risk* #1 in NPL ratio #1 in Coverage ratio 1.30% 2.45% % Leading Bank in Peru Strong shareholders #3 in profitability ROE: Annualized net income / Average equity #3 in efficiency 21.42% 39.93% BBB (S&P) A- (Fitch) #2 in assets S/.76,892 million Operates in one of the most attractive economies of the region #2 in performing loans #2 in deposits** S/.47,990 million S/.46,616 million Peru, one of the most dynamic and attractive economies in the region BBVA Continental: second largest bank in the country and leading institution for over 60 years Strong shareholders: BBVA Group, leading global financial institution, and Breca, one of the largest business conglomerates in Peru #2 in number of branches 321 *Cost of risk: Provisions for the last 12 months between total loans (average of the last 12 months). **Other obligations are excluded from deposits. Source: Superintendencia de Banca, Seguros y AFP 14

15 BBVA Continental vs. Peers

Strong banking platform Distribution network: One of the largest in the country 3,552 1,974 9,263 points of service More than 4.

Our objective: To be the leading Digital Bank in the region Digital Sales: Credit Cards, Consumer Loans Insurances & Mutual Funds More digital campaigns: Online registration

16 Strong banking platform Distribution network: One of the largest in the country 3,552 1,974 9,263 points of service More than 4.5 million customers 4,071 2,330 7,200 5,207 9,263 7,155 1,290 1,444 1,671 1, Dec-12 Dec-13 Dec-14 Dec-15 Ranking vs. Market Peers Share 2nd 3rd 2nd 17.4% 14.4% 15.4% Evolution in transactions per channel September % 15% 1% Digital Banking: % 32% 22% 35% Branches ATM Express Agent Internet Banking Mobile Banking Others** Our objective: To be the leading Digital Bank in the region Digital Sales: Credit Cards, Consumer Loans Insurances & Mutual Funds More digital campaigns: Online registration Optimization in the Online Banking enrollment process and UX improvements in Online and Mobile Banking. Improvements in the user experience on the web 5% 17% 17% 4% Express agents* ATM* Branches * ATM & EA as of September 2015, last available public information. ** Other channels include Telephone Banking, POS, Net Cash and Automatic debit. Source: Superintendencia de Banca, Seguros y AFP & BBVA Continental 16

17 Outstanding growth PEN Million Performing loans Deposits* CAGR 13.5% YOY 5.0% CAGR 13.7% YOY 3.8% 47,788 47,990 47,287 46,616 32, ,149 2,126 7,149 1,491 8,869 6,562 5,116 42,041 38, , ,254 1,154 2,132 9,562 8,433 1,194 1,408 9,016 9,103 8,633 7,497 8,700 10, ,548 2,419 1,678 2,541 10,391 10,852 1,201 1,113 9,816 9,931 9,505 9,086 12,803 12,703 32,178 2,262 12,480 17,437 36,811 2,815 12,171 21,825 39,607 2,788 12,607 24,212 3,046 2,902 16,011 15,833 28,230 27,881 Dec-12 Dec-13 Dec-14 Dec-15 Set-16 Corporate Large enterprise Middle enterprise SME Dec-12 Dec-13 Dec-14 Dec-15 Set-16 Demand + Saving Term CTS Mortgage Consumer Credit card Microfinance *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP 17

18 Performing loans PEN Million and percentage (%) BBVA Continental shows steady loan growth Retail customers 7.1% -14 bps 14,069 14,358 15,071 Performing loans 19.84% 19.57% 19.70% 45, % -13 bps 47,788 47,990 Sep-15 Dec-15 Sep-16 Loans Market share Banking System 76,489 YOY Variation 7.9% 21.54% 21.88% 21.42% Business customers 4.1% -9 bps 31,621 33,430 32,919 Sep-15 Dec-15 Sep-16 Loans Market share 22.40% 23.05% 22.31% Banking System 224,074 YOY Variation 5.7% Sep-15 Dec-15 Sep-16 Loans Market share Banking System 147,585 Source: Superintendencia de Banca, Seguros y AFP YOY Variation 4.5% 18

4% Microfinance Credit card Consumer Mortgage SME Agriculture and livestock 4% Transport, storage and communications 8% Construction 3%

19 High quality of loan portfolio September 2016 Loans by economic sector Loans breakdown 0.2% 1.3% 3.5% 5.3% 7.5% 9.9% 22.6% 16.7% 2.3% 5.5% 20.7% 16.4% Microfinance Credit card Consumer Mortgage SME Agriculture and livestock 4% Transport, storage and communications 8% Construction 3% Others Utilities 13% 4% Mining 5% Real estate 8% Top 20 clients and others Industry 28% Commerce 27% 18.9% 17.1% Middle enterprise 12.64% Large enterprise Top 20 Clients 26.5% 25.5% Corporate 87.36% Others BBVA Continental Banking System Source: Asociación de Bancos del Perú 19

20 Deposits Retail customers 11.7% 65 bps PEN Million and percentage (%) 16,039 17,265 17,917 Growth continues also in deposits 3.8% -23 bps 19.74% 19.84% 20.39% 44,901 47,287 46,616 Sep-15 Dec-15 Sep-16 Deposits Market share Banking System 87,890 YOY Variation 8.2% 22.37% 22.44% 22.15% Business customers -0.6% -76 bps 28,862 30,022 28,699 Sep-15 Dec-15 Sep-16 Deposits Market share 24.17% 24.26% 23.41% Banking System 210,488 YOY Variation 4.9% Sep-15 Dec-15 Sep-16 Deposits Market share Banking System 122,597 Source: Superintendencia de Banca, Seguros y AFP YOY Variation 2.7% 20

21 Liabilities and Capital Breakdown PEN USD 8.3% -7.8% 38,908 42,245 42,125 37,722 38,871 34,767 7% 7% 5% 15% 15% 16% 6% 5% 5% 23% 21% 19% 4% 4% 4% 15% 15% 19% Others Equity Wholesale funding REPOS CTS 3% 2% 4% 29% 32% 28% 3% 3% 4% 25% 25% 22% 30% 32% 32% Term Demand + Saving 40% 38% 42% Sep-15 Dec-15 Sep-16 Sep-15 Dec-15 Sep-16 Source: Superintendencia de Banca, Seguros y AFP / Asociación de Bancos del Perú 21

22 High level of self-financing and balance sheet denomination in PEN September 2016 Loans and Deposits PEN Thousands of millions PEN-denominated Performing Loans 67% 69% 67% 100.1% 103.1% % % 102.9% % 50% 50% 51% 54% 52% 63% 62% 55% 57% 57% 54% 66% 67% 66% BBVA Continental Banking System Average PEN-denominated Deposits 61% Dec-12 Dec-13 Dec-14 Dec-15 Sep-16 59% 58% 58% 54% 55% 53% 53% 53% 52% 50% 47% 47% 46% 50% 48% 52% 50% Loans Deposits* Loans/Deposits *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP BBVA Continental Banking System Average 22

23 1 Financial margin PEN Million and percentage (%) 8.14% 8.05% 7.41% 6.75% 6.55% 6.10% 5.09% 4.69% 4.35% 6.55% 6.31% 5.47% 5.42% 3.61% 3.48% 8.00% 6.00% 4.00% 2.00% 0.00% 3,309 3,631 3,741 4,052 4, % -4.00% -6.00% (980) (1,117) (1,055) (1,346) (1,622) -8.00% Dec-12 Dec-13 Dec-14 Dec-15 Sep % Financial Expenses Financial Income NIM NIM PEN NIM USD 1 NIM ratio: Interest margin for the last 12 months divided by average interest earning assets (interbank funds, investments, net loans). Source: Superintendencia de Banca, Seguros y AFP / Asociación de Bancos del Perú 23

24 Expenses management We manage an attractive efficiency ratio Administrative expenses* PEN Million Efficiency Ratio September 2016 Bank % 2,411 2,486 Bank % BBVA Continental 39.93% Bank % 1,197 1,230 1,004 1, Number of employees September % Banking System Average 20, % 2.7% 2.5% 0.0% Sep-15 Sep-16 Sep-15 Sep-16 Sep-15 Sep-16 Sep-15 Sep-16 7,215 Market Share 9.2% 5,657 5,617 Bank 1 BBVA Continental Bank 4 Bank 3 * Includes Amortization and Depreciation Source: Superintendencia de Banca, Seguros y AFP Bank 1 Bank 4 Bank 3 BBVA Continental 24

25 Risk management Outstanding asset quality BBVA Continental NPL ratio by product and segment September % Microfinance 1.79% SME 8.78% % Middle enterprise 6.39% % % % Large enterprise 1.39% Corporate 0.00% Car-loan 2.72% 1.19% 1.74% 2.23% 2.17% 2.45% Credit Card 2.76% Consumer 2.36% Dec-12 Dec-13 Dec-14 Dec-15 Sep-16 Mortgage 1.40% NPL ratio Coverage ratio Source: Superintendencia de Banca, Seguros y AFP 25

26 Risk management Best NPL Ratio and Coverage Ratio September 2016 Best Risk Cost* ratio vs. Peer Group 3.08% 3.04% 2.80% Bank 4 Annual Variation 24 bps Average Banking System % 2.86% 2.45% % BBVA Continental % % % 3.32% 2.62% 2.74% Bank 4 Bank 1 Bank 3 NPL ratio Coverage ratio 2.17% 1.70% 1.39% Maintaining high levels of voluntary provisions PEN Million 3, , % 3, , % 2.09% 2.06% 1.47% 2, , % 2.11% 2.03% 1.70% 1.28% 7.4% 2, , % 1.42% 1, % 1.88% 1.30% Dec-12 Dec-13 Dec-14 Dec-15 Sep % 1, ,345 1,546 Bank 3 Bank 1 BBVA -11 bps Continental Required Voluntary 1,195 1, % -5 bps -22 bps 974 1,041 Dec-15 Sep-16 Dec-15 Sep-16 Dec-15 Sep-16 Dec-15 Sep-16 *Risk Cost: Provisions for the last 12 months between total loans (average of the last 12 months) Bank 1 BBVA Bank 3 Bank 4 Continental Source: Superintendencia de Banca, Seguros y AFP 26

27 Profitability management Net income PEN million Return on Equity - ROE September ,099 2,164 Bank 1 Bank 4 BBVA Continental 23.62% 22.67% 21.42% Bank % 1, Return on Assets - ROA September % Banking System Average 3.1% -2.9% 14.8% -4.6% Bank % Bank % Sep-15Sep-16 Sep-15Sep-16 Sep-15Sep-16 Sep-15Sep-16 Bank % Bank 1 BBVA Continental Bank 3 Bank 4 BBVA Continental 1.69% 1.96% Banking System Average Source: Superintendencia de Banca, Seguros y AFP 27

28 Solvency management Regulatory capital PEN million Composition of capitalization 61,682 61,172 10,000 8,000 6,000 4,000 2,000 38,961 4,844 1,019 3,825 47,207 5,866 1,221 4,645 53,495 7,371 2,139 5,232 8,209 2,247 5,962 8,971 2,173 6,797 60,000 50,000 40,000 30,000 20,000 10, % 13.31% 12.43% 12.42% 2.62% 2.59% 4.00% 3.64% 9.82% 9.84% 9.78% 9.67% 14.66% 3.55% (CE T1 (CE 8.69%) (CE T1 T % 8.75%) 8.32%) (CE T %) Mín % - Dec-12 Dec-13 Dec-14 Dec-15 Sep-16-10,000 Dec-12 Dec-13 Dec-14 Dec-15 Sep-16 TIER I TIER 2 RWA TIER I TIER 2 Source: BBVA Continental / Superintendencia de Banca, Seguros y AFP 28

29 Ratings

30 International & Local Rating Rating agencies have granted BBVA Continental the best international and local ratings: Instrument Fitch Ratings Standard & Poors Foreign currency long term issuances A- BBB Foreign currency short term issuances F1 A-2 Local currency long term issuances A- BBB Local currency short term issuances F1 A-2 Outlook Stable Stable Instrument Apoyo & Asociados Equilibrium PCR Negotiable Certificate of Deposits (CD) CP-1+ (pe) EQL 1+.pe p1+ Short term deposits CP-1+ (pe) EQL 1+.pe Categoría I Term deposits > 1 year AAA (pe) AAA.pe paaa Corporate bonds AAA (pe) AAA.pe paaa Subordinated bonds AA+ (pe) AA+.pe paa+ Leasing bonds AAA (pe) AAA.pe paaa Common shares 1a (pe) 1a Clase.pe PC N1 Issuer rating A+ A+ A+ 30

31 Social Responsibility and Awards

32 The Bank maintains its commitment to society and is highly regarded in the market SOCIAL RESPONSIBILITY AWARDS Social, Economical and Environmental Responsibility Report Reading Program: Leer es estar adelante BBVA Continental is part of the Best Corporate Governance Principle s Index of companies. 32

33 Investors Report Third Quarter 2016

Investors Report. First Quarter 2016

Investors Report. First Quarter 2016 Investors Report First Quarter 2016 Disclaimer This document has been elaborated as a part of the information policies and transparency of BBVA Continental and contains public information, own source and