Intercorp Financial Services Inc. Common Shares

Good morning and welcome to the Intercorp Financial Services fourth quarter 2020 conference call. All lines have been placed on a mute to prevent any background noise. After the presentation, we will open the floor for questions. At that time, instructions will be given as the procedure to follow if you would like to ask a question. Also, you can submit online questions at any time today using the window on the webcast, and they will be answered after the presentation during the Q&A session. Simply type your question in the box and click Submit question. It is now my pleasure to turn the call over to Rafael Borja of iAdvise Corporate Communications. Sir, you may begin.

Thank you, operator, and good morning, everyone, on today's call, Intercore Financial Services. We discussed its fourth quarter 2020 earnings. We are very pleased to have with us Mr. Luis Felipe Castellano, Chief Executive Officer of Intercore Financial Services. Mr. Gisela Casasa, Chief Financial Officer of Intercom Financial Services, Mr. Gonzalo Basadre, Chief Executive Officer of Interseguro, and Mr. Bruno Ferrecho, Chief Executive Officer of Interlevo. They will be discussing the results that were distributed by the company yesterday. There is also a webcast video presentation to accompany discussion during this call. If you didn't receive a copy of the presentation or the earnings report, they are now available on the company's website. rss.com.be to download a copy. Otherwise, for any reason, if you need any assistance today, please call our advice in New York at 212-406-3693. I would like to remind you that today's call is for investors and analysts only. Therefore, questions from the media will not be taken. Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company's future performance, or financial results. As such, the statements made are based on several assumptions and factors that could change causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the earnings presentation and report issued yesterday afternoon. It is now my pleasure to turn the call over to Mr. Bufelite Castellanos, Chief Executive Officer of Intel Core Financial Services, for his opening remarks. Mr. Castellanos, please go ahead, sir.

Okay, thank you. Good morning. First, I wanted to thank everyone for making the time to attend our call. I hope all of you and your families remain healthy and safe during these challenging times. As you are aware, Peru continues to struggle from the effects of the pandemic. After an improvement in the number of cases by the end of the year, we now face a second wave that has overloaded our health system and the number of cases and fatalities continues to rise. As a result, by late last month, the government announced new lockdown measures, being more strict in certain regions, including Lima. As of now, We know those measures will be in place at least until the end of February, and our expectation is that they will continue for some more days after that. However, unlike the past lockdown, the new restrictions will likely have a more moderate impact in the economy, since most businesses are allowed to operate, at least partially. Good news were announced recently. The vaccination program has already started, and the country has finally secured an important number of vaccines from different companies that should reduce the effects of the pandemic on the months to come. Moving on, despite the health situation, the economic activity is gradually recovering. The recovery is mainly driven by more activity in domestic demand-oriented sectors. We foresee a strong recovery in 2021, mainly due to better terms of trade, higher private consumption, and the base effect when compared with 2020. Obviously, the effective control of the pandemic will be directly related to the economic performance of the country. An element of uncertainty continues to be the political landscape. Presidential and congressional elections will take place in April. At this point, it is hard to tell who has a higher probability of being elected. On the congressional front, certain populist measures continue to be proposed or debated. Some of them, such as the interest rate cap proposal or the integrated universal pension system bill, may impact the financial system. Different institutions have made public statements against this initiative, and the executive branch has found relief in certain rulings by the constitutional court. we will continue to closely monitor the evolution of political news in the coming months. In this environment, banks have continued to help Peruvians to overcome the crisis by offering payment relief to individuals and companies. At the system level, gross loans grew 12% year-on-year as of December, driven by a 23% increase in commercial loans, mainly boosted by the Reactiva Peru program. However, retail loans at the system level decreased 3% on a yearly basis. Deposits continue to grow strongly. At IFS, our platform continues to show strong resilience and has recovered nicely from a very low second quarter 2020. The trend we saw in the third quarter has continued with strong activity at Inteligo and Interseguro. Interbank continues to see an improvement in all of its main operating and financial indicators. We expect this trend to continue with a very strong capital base, a world-class level efficiency and levels and digital solutions and services that continue to gain preference of our customers. We continue to be focused on helping our customers during these times and to deploy our resources in an efficient way to maintain the path for profitable growth. Now, let me pass it on to Miquela for a detailed review of our results. Thank you again and please remain safe.