The manager of BCP’s Corporate, Institutional and Multinational Banking, Giovanni Terzano, takes stock of the business.
What are the characteristics of these clients?
The division comprises four customer segments. The first is business banking, which includes companies that invoice between US$10 million and US$120 million. Here we serve approximately 3,000 companies. Then, we have institutional banking, which includes state companies, mainly in the education sector. Also, we have multinational banks, which are international companies that operate in Peru and have a global presence. Finally, we have the BCP Xplore segment.
Who are BCP Xplore clients?
This bank is exclusively dedicated to serving digital and fintech startup companies with ad hoc products. In this bank we have approximately 470 clients and we have been working with them for the last three years.
How did the business do in 2024?
The business and corporate banking business has had an adequate year. I wouldn’t say that it is a spectacular or extraordinary year, but rather that it has been a good year, because we have had three quite important levers. Firstly, because thank God the El Niño phenomenon did not materialize. Secondly, inflation moderated throughout the year and, thirdly, interest rates have begun to fall. These three things have motivated companies and investors to carry out some projects or encourage themselves to invest again with greater activity compared to previous years.
What was the demand for financing by sectors?
Last year there was demand for financing for capex in the fishing sector because the campaigns were good. There have been some sales of fishing companies, which boosted the demand for credits. The agricultural sector also improved and is investing a little more. In Peru there are 250,000 hectares dedicated to agro-exports, that means more or less US$12,000 million of exports from agro-industrial companies and represents only 3% of Peruvian agricultural land. So naturally, we have enormous potential to grow in that industry. Clients see this and make the decision to start investing.
Are these investments already happening?
Yes, but these investments do not materialize in a day or a year. Setting up a plantation takes two or three years to start seeing the fruits, so they are planned for the long term. They couldn’t do it in 2022 and 2023 when interest rates were high, but this is the best time because you are already beginning to see a certain drop in rates. There is also a little more peace of mind in the tourism sector and with a lot of room to grow. If we manage to boost this sector, the investment that could be made in the country is impressive. I am optimistic that in the following years we should resume that growth.
Have interest rates already dropped to previous levels?
Still. Before the pandemic, the Central Bank’s reference rate was 3.75% and it was at those levels for a long time. Today it is at 5%. The truth is that the short-term rate has gone down as the Central Bank has been lowering the rate, but the long-term rate not so much. This is because the withdrawal of funds from the AFPs has hit the country’s long-term rate. That rate has not increased as much as we expected.
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