Unidentified Analyst: Okay. Okay. Got it. And then the final question with regard to this Mibanco. So here’s what I’m not understanding. So you just spoke, and you have a slide in your presentation that maturity of specific vintages led to the default ratio in this portfolio to rise and that lets you to increase the cost of risk, which is shown on your slide. But then when I look at your presentation, in your earnings release, there is a chart there that shows — I think it’s on Page 19, that shows the cost of risk or structural NPL — sorry, structural NPL ratio for your various businesses and that one shows that Mibanco has actually declined in December 2022 to 4.96%. So it’s gone anywhere from 7% in ’21 and it’s been on gradual decline, and it’s already like under 5%. So my question is this, how can I — how should I think about the disconnect between your NPL ratio trajectory and your cost of risk trajectory with respect to Mibanco?
Gianfranco Ferrari : Yeah. Basically, I mean, the improvement in the NPL ratio basically in response to the aggressive write-off strategy we’ve implemented in Mibanco and that basically reflects credit — loans already 100% provisions. And remember that besides the specific things — the specific case of the vintages I mentioned before, it also reflects the challenging macro environment we are facing in 2023 that is incorporated in our projections of the expected loss calculations for the year-end 2022. So there are like two mix factors.
Unidentified Analyst: Okay. So I just want to be very clear. So you’re saying that the reason your NPL ratio has declined is because you’ve written off some loans which are nonperforming, right? So you accelerated your write-off policy with respect to those loans, correct?
Gianfranco Ferrari : Correct. An important percentage of those write-offs were basically due to the fact that we have also written off the Reactiva loans. And we write-off the whole positions, Reactiva loans plus the positions they have directly with Mibanco funds, not guaranteed by the government.
Unidentified Analyst: Okay. Okay. And then regarding the cost of risk you’re saying because there’s higher inflation and higher — potentially like higher defaults, right, because people maybe squeezed in terms of income, you now think that your model or your cost of whatever, your IFRS model is telling you that your cost of risk for this loan should be higher, right? That’s like an assumption, like whatever you fit into the model spits out higher cost of risk, essentially, right?
Gianfranco Ferrari : Exactly. That’s repeated on the 5.9% cost of risk of the last quarter of 2022.
Unidentified Analyst: Okay. And then the very final question, I heard something very brief mention about — you said something about IFRS 17 implementing in your insurance business. Like, first of all, what that’s all about? And second is how big impact is it? Is that even material or not?
Gianfranco Ferrari : Thank you for the question. No, we believe that the initial impact of the IFRS 17 will not have an important or material impact in credit cards equity or in Pacifico’s equity. Only as a reference, Pacifico’s equity represents 8% of Credicorp’s equity. And our first estimations are around — we will need an increase in around 2% of their reserve or 8% of total equity in Pacifico’s equity. So the impact at the end won’t be material at Credicorp’s levels.
Unidentified Analyst: Okay. Understood. All right. That’s helpful. Thank you very much.
Operator: Our next question comes from Andres Soto with Santander. Please go ahead.
