Sergey Dubin: Okay, got it. Okay. That’s all for me. Thank you very much.
Operator: Our next question comes from Carlos Gomez from HSBC. Please go ahead with your question.
Carlos Gomez: Yes, hi, good morning, and congratulations on the results. I wanted to know if you can give us an idea about how much you have invested in Tenpo [indiscernible] and what your expectation is for future investments until it reaches profitability? And second, I don’t know if you have mentioned this already, but what do you expect for dividend this year? And what would your target CET1 be? I think you are at 13.2%. That’s probably a bit higher than what you normally operate as. So that would be [indiscernible] capital dividend and Tenpo. Thank you.
Gianfranco Ferrari: Yes, good morning, Carlos. I’ll take the second question and then I really don’t have the figures for Tenpo top of mind. Maybe Cesar can help me here. Regarding dividends, obviously, we cannot provide a figure now since the dividend has to be approved by the Board in April, what it is, but what is relevant – what I would say is relevant is the logic behind paying dividends. Along the history of Credicorp what we’ve done is that the subsidiaries pay whatever is in excess of what they need for growth in terms of capitalization, and they pay dividends to Credicorp and then obviously Credicorp if it doesn’t have any transformational investment or something like that, it pays dividends. Last year in 2023 we decided to withhold some dividends, specifically at Mibanco and at BCP, because of the social unrest and the projections of a strong El Nino we had at the time.
That’s the reason why as you correctly mentioned, BCP is today the common equity Tier 1 of BCP is much higher than what we normally have, which is 11.5% or 11%, which is…
Unidentified Company Representative: 11%.
Cesar Rios: 11%. Which is 11% and as you mentioned is above 13%. So, yes that’s the answer regarding dividends. I don’t know if that’s enough for you.
Carlos Gomez: Well, I mean, we should expect, therefore, more distribution from the subsidiaries to be holding, and therefore perhaps more general distribution this year than in previous years. That’s the logic, right?
Cesar Rios: That’s the correct math.
Carlos Gomez: Okay.
Cesar Rios: Sorry. Sorry, I cannot be more specific but the board has to approve.
Carlos Gomez: No, I understand, but obviously the board is going to what management…
Gianfranco Ferrari: Totally valid logic, yes. Regarding Tenpo, Cesar, can you help me with that?
Cesar Rios: We have providing a general figure but I would say Tenpo can be around 170 million and 180 million around of cash costs.
Carlos Gomez: As of today?
Cesar Rios: As of today, yes. And maybe what is more relevant, Carlos is that how we manage the disruptive initiatives is that we’re fully committed for the next, I don’t know, five years. Each of the initiatives that we set indicators what we call early or operating indicators depending on the stage. And if they achieve those indicators with our capital or the capital calls are met. We are constantly supervising and Francesca’s team is constantly looking at the performance of the initiatives and that’s the way we manage them.
Carlos Gomez: Okay, but it’s fair to say that and then you have highlighted Tenpo indeed as something which is working. So one would expect that you will invest more in this particular venture because you are far from breakeven as well, right?
Cesar Rios: Yes, and far not only in terms of money, but also in terms of time. Yes, that’s correct. We cannot provide exact figure as of today, but let us revise it and we will be more specific maybe next quarter.
Carlos Gomez: Thank you so much.
Operator: Our next question comes from Beatriz Abreu from Goldman Sachs. Please go ahead with your question.
Beatriz Abreu: Hi, everyone. Good morning and thank you for taking my question. I have a question on provisions. Do you expect any additional provisions related to El Nino at all in the coming quarters? And is there any risk of El Nino becoming more severe in the next couple of quarters maybe, and you having to make additional provisions related to that? And then going forward, what would be a more normalized cost of risk that we should consider? And how should we think about the evolution of cost of risk throughout the year also? Thank you.
Gianfranco Ferrari: Yes, good morning. Good morning Beatriz. Reynaldo, could you take that one, please?
Reynaldo Llosa: Yes. Beatriz, with the latest information we have, we don’t expect at all any extra provisions for the El Nino effect. Alejandro has mentioned we are considering as of today a reversal of provision we made in the last quarter of 2023. And in terms of the normalized guidance it will depend how successful are we in terms of the projected growth in the retail portfolio, which as you can understand, we would require a higher cost of risk than the wholesaler portfolio. So basically it will be around the current number, but it could grow a little bit if we are successful in the growth in the retail market.
Gianfranco Ferrari: Maybe just to complement Reynaldo, what we look at is a risk adjusted name. So that’s what Reynaldo just mentioned is totally correct. But the retail portfolio has higher names. Therefore they can bear higher cost of risk, while what matters is risk adjustment NIM.
Beatriz Abreu: Just to make sure I understand. So in case retail loan portfolio growth does turn out to be better this year, then cost of risk should be closer to the top end of the guidance. Is that what you mean?
Gianfranco Ferrari: Yes. That would be the case, but with a higher NIM as well. So overall, it will be better for the bank to be in that case.
Beatriz Abreu: Perfect very clear. Thank you.
Operator: Our next question comes from Yuri Fernandes from JPMorgan. Please go ahead with your question.
Yuri Fernandes: Hello. Hi. Gianfranco, Cesar, Milagros everybody. I have a – I joined the call a little bit late, so I’m not sure if this was explored or not. But I’m having a hard time to conciliate your 17% ROE with your expenses growing somewhat in line with 2023. So if you can provide a little bit more color. I know you discussed that NIMs should remain resilient, loan growth accelerate and cost of risk, but still it seems too positive and I would like to understand a little bit the bridge. Perhaps this is Yape getting to break even. But if you can help us understand the ROE path to the 17%, that would be great? Thank you.
Reynaldo Llosa: Sure. Good morning, Yuri. Cesar, please, could you answer that?
Cesar Rios: Yes, please. I would like to invite you to revise the basic of the year. We have the year 15.8%. If we consider that next year we are considered an increase in average daily balances and an improve in NIM. We are going to have a relevant increase in net interest margins and a controlled cost of risk that shouldn’t increase in developing absolute returns over the last year. Adding to that we are going to have an acceleration in fee income driven by the underlying businesses and also for the disruptive initiatives, mainly Yape. This is going to provide, and I will say pre-expenses significant improve in income. And as we adapt to these figures, cost that increases more or less in line with previous year with the change in the composition, as Gianfranco has explained for the relative weight of the new initiative, we can have a higher profitability this year than the 2023 with the addition that we are not considering one-time events like the provision of El Nino and the impairments that impacted 2023.
Reynaldo Llosa: Maybe. Yuri, just to compliment Cesar, let me go back to my original comment regarding the overall situation of Peru. It’s not only the macroeconomics but also the social situation, the political situation and so on. So we see a much better – we feel that we’re in a much better position as a country, I mean, today than what we were exactly twelve months ago.
Yuri Fernandes: Perfect, guys. And now it makes sense and good luck with that. If I may, just a second one and kind of a follow-up on Yape. And congrats on the numbers for Yape like impressive. Again, I just noticed an increase on the cost serve. Like, you provide this chart in the presentation and our pack is almost crossing the cost to serve. But the cost to serve was up, I don’t know, like some 20%, quarter-over-quarter in the 4Q. So just asking if the cost to serve is seasonal. If you like, when you say breakeven of Yape, is this cost to serve getting a little bit more normalized and returning to, I don’t know, like the previous levels of four soles per active user, or is this their pack? Crossing the cost to serve. So just checking the cost to serve on the appetite.
Gianfranco Ferrari: Yes. Definitely. You’re right on your assessment. As – Cesar mentioned it during the speech, the last quarter we have some, well, first of all, the seasonality, because of the number of transactions, there’s a spike in the last quarter, especially in December. Plus there were some costs related to performance. But we expect that cost to serve to go back to similar to previous levels. Therefore, Cesar said we’re going to reach breakeven this year. I would say we’re going to reach breakeven the first half of the year. So we’re on the right track.
Yuri Fernandes: Super clear. Gianfranco, thank you. Congrats on the results and the guidance. Thank you.
Operator: [Operator Instructions] Our next question comes from Andres Soto [Santander]. Please go ahead with your question.
