Thiago Batista : Hi, guys. Good morning. My question is about Yape. When you look [Indiscernible] for Yape. What do you believe be the main source of revenue of Yape? And among the 10 million monthly active users of Yape, how much of those guys were already [Indiscernible] Credicorp comp.
Cesar Rios :
Could :
Thiago Batista : Yes. Not sure. I’m not sure if the line is better now.
Cesar Rios : Yes.
Thiago Batista : But when you look in a couple of years, or what do you believe will be the main source of revenues of Yape?
Cesar Rios : Right, now very clear.
Thiago Batista : And among the 10 million clients of Yape, how much of those guys are — aware already BCP or Credicorp clients?
Cesar Rios : Okay. So in your first question, and we currently expect a payments to continue growing as our number one line of revenue. But definitely we expect in two or three years, lending to become much more relevant. So I would say that around 40% to 50% will be payments revenue, then a third around the lending. And the rest will be come from the retailer marketplace that’s more or less where we’re aiming to and what we expect of course, that might change a bit. Regarding the second part of the 10 million clients. It’s a tough question, because there were a lot of — so there’s like two, 2.5 million of those clients that are Yape with then that they open exclusively in accounts without being BCP clients. But of the ones that were BCP clients, there’s a big group that opened the BCP account to have Yape in the future.
So really, it’s a mixed number. It definitely a lot of those clients are much more active in Yape than at BCP. So I know it’s half and half of 10 million, I would say that you could attribute to Yape.
Thiago Batista : That’s clear. Thanks.
Operator: The next question comes from Yuri Fernandes with JP Morgan. Please go ahead.
Yuri Fernandes : Hello, everyone. I have a question on revenues. So far. So good, right? You are — you have margin expanding. So your NII is still really healthy. But what is the outlook for 2024? Because you already mentioned that credit origination should be like less term given like a more cautious outlook and makes total sense. You have a lower rates, right, that should be bad for your sensitivity on margins. And on the flip side, I guess it’s a weaker economy. So my question is, what should we expect for revenues NII for the next year? Should we be a little bit more cautious on these also, like what is the — I know you don’t have a guidance but just on a trend? What should be the ultimate here for revenues? Thank you.
Cesar Rios: Thank you, Yuri. I think if we have the impact of El Nino as we expect, we should expect a slight increase in revenues, that is the combination of a manage NII and increasing volumes is starting probably in the second quarter of the year. In terms of fees, we still expect an increasing fees driven by the transactional activity that we are developing and increasing through our traditional channels and Yape, in particular.
Yuri Fernandes : But I think like more decelerating 2024 versus 2023? Or should remain those low-single digits just as a more consultative target?
Cesar Rios : I will be considering single digit. We still expect next year GDP to be around 2%? No, a booming year?
Yuri Fernandes : No, perfect, super clear. And if I may, just asset quality just to see if I got correctly. This quarter, the third Q, you had a very high NIM formation higher charge offs. So this was basically the clients’ payment behaviors were seen, right the provisions that everything was sewn out. And for the fourth Q, the increase you should see on the guidance, this is a — I mean, this is more, more or less, the delta should be mostly down in right. So this quarter, basically bad macros, and for the next quarter, a little bit of bad macro, but also down right. Is this correct like [indiscernible] on asset quality?
Cesar Rios : Totally Correct. That’s 100% correct. We are ending up the [indiscernible] of the bad portfolio we had during in the year, but the most impact explained by El Nino was you referenced too.
Yuri Fernandes : Perfect, thank you very much, guys.
Operator: The next question is from Sergey Dubin with HL. Please go ahead.
Sergey Dubin : Yes, hello. All my questions would be on asset quality and cost of risk. Very surprised to see this significant jump in Q3, especially on wholesale loans, or wholesale NPLs, I should say. Could you comment, what do you mean by 22% of Credicorp NPL volumes, which will refinance loans? What are these loans?
Cesar Rios : Well, basically, what we have done is there have been two specific cases in the tourism sector and then real estate commercial real estate without falling in default, which are recognizing in the NPLs. But also we are now that that activity is starting to recover in some of those activities on those businesses. And we have, we are able to project a cash flow for those businesses we are refinancing those loans. And that portfolio is included on the NPL ratio. So that’s basically why this number has been growing in during the year.
Sergey Dubin : So are you saying that these loans or these, these borrowers had hit problems and you basically refinance, or, you know, refinance the loans so that they’re going to be performing? Again, I don’t quite understand like, how are these? Are these borrowers in trouble? Or is it just an issue of having you extended and maybe soften some terms, so they can pay on a different schedule? How should I think about that underlying credit quality of the borrowers?
Cesar Rios : Yes. I mean, two things about your comment. Those were loans that we were monitoring the short term, because we were unable to project a cash flow in the long term. Once we extend a structurally the final term of the loans, we mark them as refinance loans. And then we included — we include them in the NPL ratio. And having said that these are loans that have significant collateral mostly over 150% because they are basically hotels and real estate projects, which have guarantees that support extensively the amount of position with those clients.
