UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE

SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20112012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Date of event requiring this shell company report ______________

For the transition period from      to

Commission file number 1-14014

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Securities registered or to be registered pursuant to Section 12(g) of the Act.                                     None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.                  None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.     Common Shares, par value $5.00 per share                    94,382,317

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes           x                  No       ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes           ¨                  No       x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes           x                  No       ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes           x                  No       ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17  ¨                       Item 18  x

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes           ¨                  No       x

ABBREVIATIONS

PRESENTATION OF FINANCIAL INFORMATION

Unless otherwise specified or the context otherwise requires, references in this Form 20-F (also referred to as the Annual Report), to “$,” “US$,” “Dollars,” “foreign currency” or “U.S. Dollars” are to United States Dollars, and references to “S/.”, “Nuevo Sol” or “Nuevos Soles” are to Peruvian Nuevos Soles. Each Nuevo Sol is divided into 100 céntimos (cents).

Credicorp Ltd. is a Bermuda limited liability company (and is referred to in this Annual Report as Credicorp, the Company, we, or us, and means either Credicorp as a separate entity or as an entity together with our consolidated subsidiaries, as the context may require). We maintain our financial books and records in U.S. Dollars and present our financial statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). IFRS differ in certain respects from United States Generally Accepted Accounting Principles (U.S. GAAP).

We operate primarily through our four operating segments: banking (including commercial(mainly wholesale banking and investmentretail banking), investment banking, insurance, and pension funds, and brokerage and other.funds. See information about operating segments in “Item 4.-Information on the Company: (A) History and Development of the Company, and (B) Business Overview”.

Our fourfive principal operating subsidiaries are: (i) Banco de Crédito del Perú (which, together with its consolidated subsidiaries, is referred to as BCP)BCP and includes wholesale and retail banking); (ii) Atlantic Security Bank, which we hold through Atlantic Security Holding Corporation (which, are referred to as ASB and ASHC, respectively); (iii) El Pacífico-Peruano Suiza Compañía de Seguros y Reaseguros (which together with its consolidated subsidiaries, is referred to as Grupo Pacífico); and (iv) Prima AFP. BCP’s activities include wholesale banking,AFP; and (v) Credicorp Investments (which eventually will consolidate the companies of our investment banking and retail banking.business). As of and for the year ended December 31, 2011,2012, BCP accounted for 87.4%87.7% of our total assets, 75.2%84.3% of our net income and 69.3%65.3% of our net equity. Unless otherwise specified, the individual financial information for BCP, ASB, Grupo Pacífico, and Prima AFP and Credicorp Investments included in this Annual Report has been derived from the audited consolidated financial statements of each such entity. See “Item 3. Key Information—(A) Selected Financial Data” and “Item 4. Information on the Company—(A) History and Development of the Company.” We refer to BCP, ASB, Grupo Pacífico, and Prima AFP and Credicorp Investments as our main operating subsidiaries, and we refer to Grupo Crédito and ASHC as our two main holding subsidiaries.

“Item 3. Key Information—(A) Selected Financial Data” contains key information related to our performance. This information was obtained mainly from our consolidated financial statements as of December 31, 2007, 2008, 2009, 2010, 2011 and 2011.2012.

Our management’s criteria on foreign currency translation, for the purpose of preparing the Credicorp Consolidated Financial Statements, isare described in “Item 5. Operating and Financial Review and Prospects—(A) Operating Results—(1) Critical Accounting Policies—Foreign Currency Translation.”

Some of our subsidiaries maintain their operations and balances in Nuevos Soles. As a result, this Annual Report contains certain Nuevo Sol amounts translated into U.S. Dollars which is solely for the convenience of the reader. You should not construe any of these translations as representations that the Nuevo Sol amounts actually represent such equivalent U.S. Dollar amounts or could be converted into U.S. Dollars at the rate indicated as of the dates mentioned herein, or at all. Unless otherwise indicated, these U.S. Dollar amounts have been translated from Nuevos Soles at an exchange rate of S/.2.696.2.55 = US$1.00, which is the December 31, 20112012 exchange rate set by the Peruvian Superintendencia de Banca, Seguros y AFP (the Superintendency of Banks, Insurance and Pension Funds or the SBS)(SBS by its Spanish initials). The average of the bid and offered free market exchange rates published by the SBS for April 20, 201224, 2013 was S/.2.651.2.624 per US$1.00. Translating amounts expressed in Nuevos Soles on a specified date (at the prevailing exchange rate on that date) may result in the presentation of U.S. Dollar amounts that are different from the U.S. Dollar amounts that would have been obtained by translating Nuevos Soles on another specified date (at the prevailing exchange rate on that different specified date). See also “Item 3. Key Information—(A) Selected Financial Data—Exchange Rates” for information regarding the average rates of exchange between the Nuevo Sol and the U.S. Dollar for the periods specified therein. The Federal Reserve Bank of New York does not publish a noon buying rate for Nuevos Soles. Our Bolivian subsidiary operates in Bolivianos, a currency that has been maintained stable over recent years. Our Bolivian subsidiary´ssubsidiary’s financial statements are also presented in U.S. Dollars. Our recently acquired companies, Correval S.A. Sociedad Comisionista de Bolsa in Colombia (Correval) and IM Trust S.A. Corredores de Bolsa in Chile (IM Trust), operate in Colombian Pesos and Chilean Pesos, respectively, and their financial statements are converted into U.S. Dollars for consolidation purposes.

CAUTIONARY STATEMENT WITH RESPECT TO

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report are not historical facts, including, without limitation, certain statements made in the sections entitled “Item 3. Key Information,” “Item 4. Information on the Company,” “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures about Market Risk,” which are forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934 (or the Exchange Act). These forward-looking statements are based on our management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in the forward-looking statements. Therefore, actual results, performance or events may be materially different from those in the forward-looking statements due to, without limitation:

See “Item 3. Key Information—(D) Risk Factors,” and “Item 5. Operating and Financial Review and Prospects.”

We are not under any obligation to, and we expressly disclaim any obligation to, update or alter any forward-looking statements contained in this Annual Report whether as a result of new information, future events or otherwise.

PART I

Not applicable

Not applicable.

The following table presents a summary of our consolidated financial information at the dates and for the periods indicated. This selected financial data is presented in U.S. Dollars. You should read this information in conjunction with, and qualify this information in its entirety by reference to, the Consolidated Financial Statements, which are also presented in U.S. Dollars.

The summary of our consolidated financial data as of, and for the years ended, December 31, 2007, 2008, 2009, 2010, 2011 and 20112012 is derived from the Consolidated Financial Statements audited by Medina, Zaldívar, Paredes & Asociados S.C.R.L, member of Ernst & Young Global, independent registered public accountants.

The report of Medina, Zaldívar, Paredes & Asociados S.C.R.L on the Consolidated Financial Statements as of December 31, 20102011 and 20112012 and for the years ended December 31, 2009, 2010, 2011 and 20112012 appears elsewhere in this Annual Report.

SELECTED FINANCIAL DATA

(1)          Provision for loan losses and reserve for loan losses include provisions and reserves with respect to total loans and contingent credits, net of write-off recoveries.

(2)          We have 100 million authorized common shares. As of December 31, 2011,2012, we had 94.4 million common shares issued and outstanding, of which 14.615.5 million were held by ASHC. The per common share data given considers net outstanding shares (common shares net of shares held by BCP, ASHC and PPS)Grupo Pacífico) of 79.7 million in 2002 to 2011.2012. See Notes 1617 and 2526 to the Consolidated Financial Statements.

As of As of December 31, 2011,2012, the Group had granted 549,529706,000 shares of Credicorp as part of its stock awards compensation program, of which 333,294 shares were outstanding.

599,000 had vested.

(3)          Net of unearned interest, but prior to reserve for loan losses. In addition to loans outstanding, we had contingent loans of US$1,455.4 million, US$1,564.5 million, US$1,755.9 million, US$2,528.1 million, US$3,135.2 million, US$3,728.0 million and US$3,728.04,520.1 million, as of December 31, 2007, 2008, 2009, 2010, 2011 and 2011,2012, respectively. See Note 1920 to the Consolidated Financial Statements.

(4)          Net interest income as a percentage of average interest-earning assets, computed as the average of period-beginning and period-ending balances on a monthly basis.

(5)          Net income as a percentage of average total assets, computed as the average of period-beginning and period-ending balances.

(6)          Net income as a percentage of average equity attributable to our equity holders, computed as the average of period-beginning and period-ending balances, and calculated on a monthly basis.

(7)          Sum of the salaries and employee’s benefits, administrative expenses, depreciation and amortization, as a percentage of the sum of net interest income and non-interest income, less net gains from sales of securities and other income.

(8)          Regulatory capital calculated in accordance with guidelines by the Basel Committee on Banking Regulations and Supervisory Practices of International Settlements (or the BIS I Accord) as adopted by the SBS. See “Item 5. Operating and Financial Review and Prospects—(B) Liquidity and Capital Resources—Regulatory Capital and Capital Adequacy Ratios.”

(9)          Depending on the type of loan, BCP considers loans past due for corporate, large business and medium business loans after 15 days; for small and micro business loans after 30 days; and for consumer, mortgage and leasing loans after 90 days. ASB considers past due all overdue loans except for consumer loans, which are considered past due when the scheduled principal and/or interest payments are overdue for more than 90 days. For IFRS 7 disclosure requirements on past-due loans, Seesee Note 29.130.1 to the Consolidated Financial Statements. See “Item 4. Information on the Company—(B) Business Overview—(12) Selected Statistical Information—(iii) Loan Portfolio—Classification of the Loan Portfolio Based on the Borrower’s Payment Performance.”

(10)        Other contingent credits primarily consist of guarantees, stand-by letters and letters of credit. See Note 1920 to the Consolidated Financial Statements.

(11)        Reserves for loan and contingent credit losses, as a percentage of all past-due loans, with no reduction for collateral securing such loans. Reserves for loan and contingent credit losses include reserves with respect to total loans and other credits.

(12)        Reserves for loan and contingent credit losses as a percentage of loans classified in categories C, D or E. See “Item 4. Information on the Company—(B) Business Overview—(12) Selected Statistical Information—(iii) Loan Portfolio—Classification of Loan Portfolio.”

Exchange Rates

The following table sets forth the high and low month-end rates and the average and end-of-period rates for the sale of Nuevos Soles for U.S. Dollars for the periods indicated.

Source: Bloomberg

The following table sets forth the high and low rates for the sale of Nuevos Soles for U.S. Dollars for the indicated months.

Source: Bloomberg

The average of the bid and offered free market exchange rates published by the SBS for April 20, 201224, 2013 was S/.2.651.2.624 per US$1.00.

Not applicable.

Not applicable.

Our businesses are affected by many external and other factors in the markets in which we operate. Different risk factors can impact our businesses, our ability to effectively operate and our business strategies. You should consider the risk factors carefully and read them in conjunction with all the information in this document. You should note that the risk factors described below are not only risks to consider. Rather, these are the risks that we currently consider material. There may be additional risks that we consider immaterial or of which we are unaware, and any of these risks could have similar effects to those set forth below.

Our geographic location exposes us to risk related to Peruvian political, social and economic conditions.

Most of BCP’s, Grupo Pacífico’s and Prima AFP’s operations and customers are located in Peru. In addition, although ASB is based outside Peru, most of its customers are located in Peru. Accordingly, our results of operations and financial condition are dependent on the level of economic activity in Peru. Changes in economic or other policies of the Peruvian government, which has exercised and continues to exercise a substantial influence over many aspects of the private sector could affect our results of operations and financial condition. Similarly, other political, economic and social developments in Peru, including government-influenced effects on inflation, currency devaluation and economic growth could affect our operations and financial condition.

For several decades, Peru had a history of political instability that has included military coups and a succession of regimes with differing policies and programs. During the last 15 years, however, Peru has experienced a period of relative political and economic stability which has led to positive economic performance, including a GDP compounded annual growth rate of 5.8%5.2% for the last ten years (2002(2003 to 2011)2012). The government of Alberto Fujimori, who took office in July 1990, initiated a series of reforms aimed at: (i) stabilizing the economy, (ii) restructuring the national government (by reducing bureaucracy), (iii) privatizing state-owned companies, (iv) promoting private investment, (v) eradicating corruption and bribery in the judicial system, (vi) developing and strengthening free markets, (vii) institutionalizing democratic representation; and (viii) enacting programs designed to strengthen basic services related to education, health, housing and infrastructure. While serving his third term, President Fujimori was forced to call for general elections under extreme protest in July 2000when2000 when corruption in his government was exposed to the public. Fujimori later resigned in favor of a transitory government. In April of 2009, following a 15-month trial in Lima, Fujimori was sentenced to 25 years in prison for violations of human rights in connection with government-linked death squads. The two administrations that followed the Fujimori administration, after the transitional government led by Valentin Paniagua (2000-2001)(2000 - 2001), were the Toledo administration (2001-2006)(2001 - 2006) and the García administration (2006-2011)(2006 - 2011). Both governments followed similar economic policies, which focused on achieving sustained economic growth; increasing exports of Peruvian goods; reducing unemployment, underemployment and poverty; reforming the tax system; fostering private investment and increasing public investment in education, public health and other social programs, while reducing overall public spending.

Peru’s current president, Ollanta Humala from the Gana Perú political coalition, took office on July 28, 2011. As part of his economic policies, President Humala has named Harvard University trained economist Luis Miguel Castilla as economy minister, Oscar Valdes as prime minister, and Jorge Urquizo as production minister.2011 for a five-year term through 2016, after winning a run-off election. President Humala has, since his inauguration, substantially maintained the moderate economic policies of former president Alan García, whose administration was characterized by business-friendly and open-market economic policies that sustained and fostered economic growth, while controlling the inflation rate at historically low levels. However, we cannot assure you that the current or any future administration will maintain business-friendly and open-market economic policies or policies that stimulate economic growth and social stability, in particular given President Humala’s left-leaning political history and statements made during his presidential campaigns in 2006 and 2011. Any changes in the Peruvian economy or the Peruvian government’s economic policies may have a negative effect on our business, financial condition and results of operations.

Peru also has a history of domestic terrorism and social unrest. The terrorist organizations that were particularly active in Peru during 1980s and the early 1990s were theMovimiento Revolucionario Tupac Amaru (MRTA) and theSendero Luminoso (Shining Path). The leader of the Shining Path, Abimael Guzmán, was captured and imprisoned in 1992. In 2012, the most recent significant leader of this organization, Florindo Flores, commonly known as Artemio, was also captured. Nevertheless, terrorism, narcotrafficking and narco-terrorism remain key challenges for the Government. Remnants of the Shining Path rebel group have survived and the group is now split into two relatively independent factions; one in Peru’s Upper Huallaga Valley and one in the Apurimac and Ene River Valley (VRAE). These regions constitute the largest areas of coca cultivation and the main centers of “narco-terrorism” in Peru. Any resumption in terrorist activity by the MRTA, the Shining Path or other organizations may adversely affect our operations and financial condition.

In recent years, Peru has experienced social unrest in geographic areas that contribute to the country’s mining industry. Mining is an important sector of the Peruvian economy, representing approximately 60% of the country’s exports and 20% of its tax revenues. However, while recent governments have concentrated on increasing the revenues and profitability of the mining industry, there has been less focus on improving the social and economic conditions of local communities affected by the industry, which has increased political tension. The most recent manifestation of this tension can be seen in social conflict around Conga, a gold-copper project located in northern Peru. The project, which included investments of between US$4.2 billion and US$4.8 billion, failed to launch because of social protests led by residents concerned about its potential impact on the local water supply. In December 2011, the Peruvian government declared a state of emergency in the area, which lasted for approximately 10 days, and afterwards requested a new environmental impact study from independent consultants. The results of the study were delivered on April 16, 2012, and the Peruvian government has established a series of new conditions to improve the project that the mining company would be required to accept to continue with the project. The final outcome will depend onproject.. At the answer fromsametime, however, four new copper mine projects (in Las Bambas, Cerro Verde, Constancia, and Quellaveco) are planned, which may multiply the mining company.production of copper in next four years. A possible cancellation of this projectmajor projects may have an impact on present and future foreign investment decisions and plans, which in turn could negatively affect Peru’s GDP growth and, as a result, the expansion of the Peruvian financial system.

Foreign exchange fluctuations and exchange controls may adversely affect our financial condition and results of operations.

Even though the functional currency of our financial statements is U.S. Dollars and our dividends are paid in U.S. Dollars, BCP, Grupo Pacífico and Prima AFP for local statutory purposes, prepare their financial statements and pay dividends in Nuevos Soles. The Peruvian government does not impose restrictions on a company’s ability to transfer U.S. Dollars from Peru to other countries, to convert Peruvian currency into U.S. Dollars or to pay dividends abroad. Nevertheless, Peru has implemented restrictive exchange controls in its history, and the Peruvian government might in the future consider it necessary to implement restrictions on such transfers, payments or conversions. See “Item 10. Additional Information—(D) Exchange Controls.” In addition, depreciation of the Nuevo Sol against the U.S. Dollar would decrease the U.S. Dollar value of any dividends BCP, Grupo Pacífico and Prima AFP pay us, which would have a negative impact on our ability to pay dividends to shareholders.

Peru’s foreign reserves currently compare favorably with those of many other Latin American countries. However, a reduction in the level of foreign reserves will impact the country’s ability to meet its foreign currency-denominated obligations. A decline in Peruvian foreign reserves to inadequate levels, among other economic circumstances, could lead to currency devaluation or a volatility of short-term capital inflows. We have taken steps to manage the gap between our foreign currency-denominated assets and liabilities in several ways, including closely matching the volumes and maturities of our Nuevo Sol-denominated assets against our Nuevo Sol-denominated liabilities. Nevertheless, a sudden and significant devaluation of the Nuevo Sol could have a material adverse effect on our financial condition and results of operations. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Risk.”

Also, a significant group of BCP’s borrowers and Grupo Pacífico’s insureds generate Nuevo Sol revenues from their own clients. Devaluation of the Nuevo Sol against the U.S. Dollar could negatively impact BCP’s and Grupo Pacífico’s clients’ ability to repay loans or make premium payments. Despite any devaluation, and absent any change in foreign exchange regulations, BCP and Grupo Pacífico would be expected to continue to repay U.S. Dollar-denominated deposits and U.S. Dollar-denominated insurance benefits in U.S. Dollars. Therefore, any significant devaluation of the Nuevo Sol against the U.S. Dollar could have a material adverse effect on our results of operations and financial condition.

Finally, BCP Bolivia, Correval and IM Trust utilize the local currencies (Bolivian Pesos, Colombian Pesos and Chilean Pesos, respectively) of the countries in which they operate and therefore are also exposed to foreign exchange fluctuations and any exchange control imposed in these countries that may adversely affect their financial condition and results of operations.

It may be difficult to serve process on or enforce judgments against us or our principals residing outside of the United States.

A significant majority of our directors and officers live outside the United States (principally in Peru). All or most of our assets and those of our principals are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon us or our principals to bring forth a civil suit under the United States securities laws in United States courts. We have been advised by our Peruvian counsel that liability under the United States federal securities laws may not be enforceable in original actions in Peruvian courts. Also, judgments of United States courts obtained in actions under the United States federal securities laws may not be enforceable. Similarly, Bermudan counsel advised us that courts in Bermuda may not enforce judgments obtained in other jurisdictions, or entertain actions in Bermuda, against us or our directors or officers under the securities laws of those jurisdictions.

In addition, our bye-laws contain a broad waiver by shareholders of any claim or right of action, both individually and on our behalf, against any of our officers or directors. This waiver limits the rights of shareholders to assert claims against our officers and directors for any action taken by an officer or director. It also limits the rights of shareholders to assert claims against officers for the failure of an officer or director to take any action in the performance of his or her duties, except with respect to any matter involving any willful negligence, willful default, fraud or dishonesty on the part of the officer or director.

Our ability to pay dividends to shareholders and to pay corporate expenses may be adversely affected by the ability of our subsidiaries to pay dividends to us.

As a holding company, our ability to make dividend payments, if any, and to pay corporate expenses will depend upon the receipt of dividends and other distributions from our operating subsidiaries. Our principal operating subsidiaries are BCP, Grupo Pacífico, ASB and Prima AFP. If our subsidiaries do not have funds available, or are otherwise restricted from paying us dividends, we may be limited in our ability to pay dividends to shareholders. Currently, there are no restrictions on the ability of BCP, ASB, Grupo Pacífico or Prima AFP to pay dividends abroad. In addition, our right to participate in the distribution of assets of any subsidiary, upon any subsidiary’s liquidation or reorganization (and thus the ability of holders of our securities to benefit indirectly from such distribution), is subject to the prior claims of creditors of that subsidiary, except where we are considered an unsubordinated creditor of the subsidiary. Accordingly, our securities will effectively be subordinated to all existing and future liabilities of our subsidiaries, and holders of our securities should look only to our assets for payments.

Also, we depend upon the receipt of dividends and other distributions from entities in which we, directly or indirectly, have an ownership interest. Any restriction on dividends applicable to Correval or IM Trust (our recently acquired companies in Colombia and Chile, respectively) may adversely affect our ability to make distributions.

Changes to banking regulations may adversely affect our operating performance and financial condition.

Because we are subject to regulation and supervision in Peru, Bolivia, Colombia, Chile, the Cayman Islands, the United States of America, and Panama, changes to the regulatory framework in any of these countries or changes in tax laws could adversely affect our business.

We are mainly subject to extensive supervision and regulation through the SBS’s consolidated supervision regulations, which regulate all of our subsidiaries and offices including those located outside Peru. The SBS and the Banco Central de Reserva del Perú (BCR), or the Central Bank, supervise and regulate BCP’s operations. Peru’s constitution and the SBS’s statutory charter grant the SBS the authority to oversee and control banks and other financial institutions including pension funds and insurance companies. The SBS and the Central Bank have general administrative responsibilities over BCP, including designation of capitalization and reserve requirements. In past years, the Central Bank has, on numerous occasions, changed the deposit reserve requirements applicable to Peruvian commercial banks as well as the rate of interest paid on deposit reserves and the amount of deposit reserves on which no interest is payable by the Central Bank. Such changes in the supervision and regulation of BCP may adversely affect our results of operations and financial condition. See “Item 4. Information on the Company—(B) Business Overview—(11) Supervision and Regulation—(ii) BCP.” Furthermore, changes in regulation related to consumer protection may also affect our business.

In Colombia, we are subject to supervision and regulation through the Superintendencia Financiera de Colombia and the Autorregulador del Mercado de Valores de Colombia In Chile, we are subject to supervision and regulation through the Superintendencia de Valores y Seguros. See “Item 4. Information on the Company—(B) Business Overview—(11) Supervision and Regulation—(v) Investment Banking.”

We are also regulated by the United States Federal Reserve System, which shares its regulatory responsibility with the State of Florida Department of Banking and Finance - Office of Financial Regulation, with respect to BCP’s Miami agency, and by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority, Inc. (FINRA), with respect to Credicorp Securities, a U.S. broker dealer. Similarly, we are regulated by other governmental entities in other jurisdictions. In the Cayman Islands, we are subject to the supervision and regulation of the Cayman Islands Monetary Authority, or CIMA, while in Bolivia, we are subject to the supervision of the Financial System Supervisory Authority (or FSSA or ASFI in Spanish)(FSSA) that has assumed all regulatory functions held previously beby the Superintendency of Banks and Financial Entities and the Superintendency of Pensions, Securities and Insurance. In Panama, we are subject to the supervision of the Superintendency of Banks and the regulatory framework set forth in the Decree Law 9 of February 25, 1998. Changes in the supervision and regulation of our subsidiaries in other countries may adversely affect our results of operations and financial condition.

In mid-2011, politicians outside of Peru's governing coalition introduced a bill in Congress that, if enacted, would set a cap on interest rates charged by the country's financial institutions. However, the SBS recently indicated that such a cap should only be used as a last resort for lowering rates if the SBS doesn’t succeed in getting Peru’s banks to voluntarily reduce interest rates in the next two to four years, the period in which several foreign banks are likely to establish or expand operations in Peru. Congress may nevertheless impose a cap, and an interest rate ceiling may adversely affect our Net Interest Margin (NIM) and consequently our operating performance.

On February 15, 2011, the Peruvian government enacted Law 29663. On July 21, 2011 Law 29663 was amended by Law 29757. This new Law partially modifies the country’s income tax regime by subjecting to taxation in Peru capital gains derived from an indirect transfer of shares and expanding the type of income that will qualify as Peruvian-source income. Under the new law, any transfer of shares issued by a non-resident entity will be subject to taxation in Peru (30% or 5%) if at any point during the 12 prior months to such transfer:

a.  50% or more of the fair market value of the foreign shares –to be transferred—is derived from shares or participation rights representing the equity capital of one or more Peruvian entities. There is a rebuttable presumption that the threshold is met if the non-resident entity is a resident in a tax heaven.

b.  The shares to be transferred represent at least 10% or more of the equity capital of the non-resident entity.

At the same time, two new obligations were imposed on Peruvian domiciled companies:

(1)   Each Peruvian domiciled company is now required to report to the Peruvian TaxSuperintendency of Tributary Administration (SUNAT)(SUNAT by its Spanish initials) transfers of its own shares or transfers of the shares of the non-Peruvian domiciled company that is the owner of its shares; and

(2)   Each Peruvian domiciled company is jointly liable for the income tax not paid by a non-Peruvian domiciled transferor that is directly or indirectly linked to the domiciled company (whether by means of control, management or equity participation) in connection with the transfer of the domiciled company’s shares, except in the event that the purchaser or acquirer of the shares is a Peruvian individual or entity.

The effectiveness of the obligations mentioned in (1) and (2) above is subject to additional regulations which have not been enacted yet by the Peruvian government. Until definitive regulations are enacted by the Peruvian government, which may clarify any obligation by Credicorp to withhold income tax for non-Peruvian domiciled transferors, we do not know what impact, if any, this new law will have on our company, subsidiaries or shareholders.

A deterioration in the quality of our loan portfolio may adversely affect our results of operations.

Given that a significant percentage of our revenues are related to banking activities, a deterioration of loan quality may have an adverse impact on our financial condition and results of operations. On the one hand, loan portfolio risk associated with lending to certain economic sectors or clients in certain market segments can be mitigated through adequate diversification policies. On the other hand, our pursuit of opportunities in which we can charge higher interest rates, thereby increasing revenues, may reduce diversification of our loan portfolio and expose us to greater credit risk. We believe that significant opportunities exist in middle market, consumer lending and microfinance in Peru. We also believe that we can, on average, charge higher interest rates on such loans as compared with interest charged on loans in our core corporate banking business, which primarily consists of clients that operate in industrial and commercial economic sectors.

Accordingly, our strategy includes a greater emphasis on middle market, consumer loans and microfinance, as well as continued growth of our loan portfolio in general. An increase in our portfolio’s exposure to these areas could be accompanied by greater credit risk. Such a greater credit risk would not only be affected by the speed and magnitude of the increase, but also by the shift to lending to these sectors, which have higher risk profiles compared with loans to large corporate customers. Given the changing composition of our loan portfolio, historical loss experience may not be indicative of future loan loss experience.

Our banking and capital market operations in Bolivianeighboring countries expose us to risk related to Bolivian political and economic conditions.

Banco de Crédito de Bolivia or BCP Bolivia, is BCP’s commercial bank in Bolivia. MostBolivia, and most of BCP Bolivia’sits operations and customers are located in Bolivia.there. Accordingly, our results of operations and financial conditionscondition depend on the level of economic activity in Bolivia. Bolivia’sBolivia´s macroeconomic indicators have been generally positive over the last several years, including steady growth rates, positive fiscal balances, and increasing international reserves. Inflation closed with a ratefor 2012 was 4.54%, below the Central Bank´s target of 6.9% in 2011, indicating that inflationary pressures are easing due to decreases in international food prices and commodity prices. At the same time,5%. However, Bolivia continues to experience a volatilelag other countries in the region in terms of foreign direct investment (FDI), despite an increase in FDI in 2012. The political environment in Bolivia also continues to be unstable and a reductionthe country’s legal framework is weak. During 2013 we expect an increase in private investment activity. We expect to face some increased costsBolivia’s consumer price index as a result of imported inflation due to a government decree establishing wage increases indexed to the inflation rate,recovery in global economic activity, mainly in Brazil, and also certain regulatory changes that could impact our earnings. Another important issue isin China. Also, we expect the Bolivian government announcement that during the first quarter of 2012 they plan to approve aenact new law that applies a new tax burden on thebanking laws in 2013 and increase regulations throughout Bolivia’s banking industry. New banking laws could lead to instability in Bolivia’s financial system regulated by ASFI. Any institution with profits exceeding 13% of return on equity will be taxed an additional 12.5%. In this environment,and adversely affect our strategy will be to control costs and expenses, increase efficiency and maintain a prudent and proactive risk management. Any material negative effect on BCP Bolivia’s operations or financial results could have a material adverse effect on Credicorp’s own results of operations.

Our recently acquired companies Correval and IM Trust expose us to risk related to Colombian and Chilean political and economic conditions, respectively.

Changes to insurance regulations in Peru may impact the ability of our insurance subsidiary to underwrite and price risk effectively, and may adversely affect our operating performance and financial condition.

Our insurance business is carried out by Pacífico Seguros and Pacífico Vida which together with Pacíficosalud EPS S.A.fico Salud are part of Grupo Pacífico. The insurance business is subject to regulation by the SBS. New legislation or regulations may adversely affect Grupo Pacífico’s ability to underwrite and price risks accurately, which in turn would affect underwriting results and business profitability. Grupo Pacífico is unable to predict whether and to what extent new laws and regulations that would affect its business will be adopted in the future. Grupo Pacífico is also unable to predict the timing of any such adoption and the effects any new laws or regulations would have on its operations, profitability and financial condition.

The Group also assumes reinsurance risk in the normal course of business for non-life insurance contracts when applicable. Premiums and claims on assumed reinsurance are recognized as revenue or expenses in the same manner as they would be if the reinsurance were considered direct business, taking into account the product classification of the reinsured business.

Our operating performance and financial condition depend on Grupo Pacífico’s ability to underwrite and set premium rates accurately across a full spectrum of risks. Grupo Pacífico must generate sufficient premiums to offset losses, loss adjustment expenses and underwriting expenses in order to be profitable.

To price premium rates accurately, Grupo Pacífico must:

If Grupo Pacífico fails to assess accurately the risks that it assumes or does not accurately estimate its retention, it may fail to establish adequate premium rates. Failure to establish adequate premium rates could reduce income and have a materially adverse effect on its operating results or financial condition. Moreover, there is inherent uncertainty in the process of establishing property and casualty loss reserves. Reserves are estimates based on actuarial and statistical projections at a given point in time of what Grupo Pacífico ultimately expects to pay out on claims and the cost of adjusting those claims, based on the facts and circumstances then known. Factors affecting these projections include, among others, changes in medical costs, repair costs and regulation. Any negative effect on Grupo Pacífico could have a material adverse effect on our results of operations and financial condition.

Natural disasters in Peru could disrupt our businesses and affect our results of operations and financial conditions

We are exposed to natural disasters in Peru, such as earthquakes and mudslides. Earthquakes in Peru are common occurrences as the country is located in a seismic zone: the interface between the Nazca and South American tectonic plates. Peru has been adversely affected by earthquakes in the past, including an 8.0 magnitude earthquake that struck the central coast of Peru in 2007.

A natural disaster of this nature or any other type of disaster could impair. Our operational capacity, our business continuity plans, which are designed to sustain Credicorp’s critical operations, include emergency response, disaster recovery, operations continuity, crisis management, data protection and recovery, and critical systems redundancy. Although we test our business continuity plans annually these plans may prove to be ineffective which could have a material adverse effect on our ability to carry out our businesses, especially if incidence disaster affects computer-based data systems or destroys customer or other data. In addition, if a significant number of our employees were affected by the natural disaster, our ability to conduct business could be impaired.

Our subsidiary Grupo Pacífico is further exposed to risks associated with natural disasters in Peru as an insurance business. To protect Grupo Pacífico’s solvency and liquidity, our insurance business historically has obtained reinsurance for a substantial portion of its earthquake-related risks through automatic excess loss treaties; however, there can be no assurance that a major catastrophe would not have a material adverse impact on our results of operations or financial condition or that our reinsurance policies will be an effective hedge against our exposure to risks resulting from natural disasters.

Regulatory changes to the private pension fund and banking system in Peru could impact our earnings and adversely affect our operating performance.

Prima AFP manages our Pension Fund Administration business. In Peru, private pension fund managers are closely regulated by the SBS. UnderIn 2012, the current regulatory framework, wePeruvian Government adopted the Law to Reform the Private Pension System, which modifies the commissions that fund managers, may collect from pension fund participants. Prior to the adoption of the Law to Reform the Private Pension System, Peruvian pension fund participants, known as “affiliates”, were charged commissions based on their salaries. Under the salary of each subscriberLaw to ourReform the Private Pension System, pension fund managers, known as AFPs, will apply a mixed fee to manage funds. This commission-based system couldnew fee structure will be modified or eliminated by regulations. There are some optionscalculated based on monthly remuneration of the affiliate plus a fee on the fund that is set up with new contributions. By May 31, 2013, affiliates that are under analysis by a Commission such as fees based onalready in the balance of funds under management by pension fund managers. Any regulations requiring us to use a different methodology to calculate fees could negatively impact our performance.

In October 2011, the Ministry of Finance named a Technical Committee to propose changes in regulation to increase private pension fund system coverage and promote competition. This Committee will present its findingsmust choose between (i) continuing to be subject to the Ministry, whofee structure based on remuneration that was in place prior to the adoption of the Law to Reform the Private Pension System; and (ii) changing to the new fee structure (mixed commission). All new affiliates will be subject to the mixed fee structure. The mixed fee structure will be in turn propose regulatory changes that shouldplace for a 10-year transitional period after which an AFP´s fees will be approved by Congress.based sole on its funds under management. These changes in regulation could negativelythe fee structure of Peru’s pension funds are designed, to align the interest of AFPs and their clients.

Other regulatory changes from the Law to Reform the Private Pension System include: (i) the establishment of an auction process to determine which AFP will manage the accounts of new affiliates; (ii) the packaging of insurance for survivors, disability and burial costs; (iii) the creation of a capital protection fund designed to establish a stable source of funds for seniors; and (iv) other measures designed to expand coverage. It also contemplates changes related to employers, outside service contracts and the operating processes. These regulatory changes may reduce the fees that we collect and adversely affect our performance, results of operatingoperations. The Law to Reform the Private Pension System will be implemented in phases. Changes in 2013 will be focused on modifying processes and financial condition.systems. See “Item 4. Information on the Company—(B) Business Overview—(11) Supervision and Regulation—(vii) Prima AFP.”

In the case of the banking system, the last main changes in regulation were the elimination of fees related to our Retail Banking Business and higher standards in transparency regarding information offered to clients about interest rates and features of financial products. Although the impact on our banking business’ fee income was not material, pressure from Congress may continue and the regulator could persist on increasing the regulation of fees.

Recent legislation regarding the financial services industry may subject us to significant and extensive regulation, which may have an impact on our operations.

Government measures to regulate the financial industry, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) and the Foreign Account Tax Compliance Act (FATCA) of the United States are likely to increase our regulatory compliance burden and related costs. These and other regulatory developments are likely to impact Credicorp, and may require us to change certain aspects of our business practices and impose additional costs on us, ultimately having an impact on our operations. With respect to FATCA and Dodd Frank, Credicorp has hired outside consultants to help determine the impact that the implementation of these two laws will have on our institution. Based on our analysis to date, we do not expect the implementation of FATCA to have a material impact on our business given our limited number of U.S. accountholders. Also, we do not expect that the implementation of the Dodd-Frank Act, including the Volcker Rule and regulations related to swap transactions, will materially impact our business or cause us to incur material costs. However, until final implementations of the regulations under these new laws are issued, we cannot assure you of the extent of the impact these new laws will have on Credicorp.

We operate in a competitive banking environment that may limit our potential to grow, particularly in the medium term as more foreign banks establish or expand operations in Peru.

BCP has experienced increased competition, including increased pressure on margins. This is primarily a result of the presence of the following:

Larger Peruvian companies have gained access to new sources of capital through the local and international capital markets, and BCP’s existing and new competitors have increasingly made inroads into the higher margin, middle market and retail banking sectors. Such increased competition, with entrants who may have greater access to capital at lower costs, has affected BCP’s loan growth as well as reduced the average interest rates that BCP can charge its customers.

Competitors may also dedicate greater resources to, and be more successful in, the development of technologically advanced products and services that may compete directly with BCP’s products and services. Such competition would adversely affect the acceptance of BCP’s products and/or lead to adverse changes in the spending and saving habits of BCP’s customer base. If competing entities are successful in developing products and services that are more effective or less costly than the products and services developed by BCP, BCP’s products and services may be unable to compete successfully. BCP may not be able to maintain its market share if it is not able to match its competitors’ loan pricing or keep pace with their development of new products and services. Even if BCP’s products and services prove to be more effective than those developed by other entities, such other entities may be more successful in marketing their products and services than BCP because of their greater financial resources, higher sales and marketing capacity or other similar factors.

As a result of strong Peru’s economic growth, which has outpaced growth by nearby countries, several banks have sought and obtained authorization to open representative offices in Peru. Itaú Unibanco, Banco Latinoamericano de Comercio Exterior (Bladex), Morgan Stanley Bank, and Bank of Tokyo and the Industrial and Commercial Bank of China are among those banks receiving authorization. With the increased competition, more individuals will have access to credit, and the percentage of the population using baking services will likely climb. This will eventually put downward pressure on interest rates. Any negative impact on BCP could have a materially adverse effect on our results of operations and financial condition.

Economic and market conditions in other countries may affect the Peruvian economy and the market price of Peruvian securities.

Economic conditions in other countries may impact Peru’s GDP growth. Peru’s exports are highly concentrated in the oil and mining industry. This industry represents almost 25% of Peru’s total income tax revenues, and gold and copper alone constitute around 45% of Peru’s total exports. Therefore, an economic downturn in Peru’s major importers of mining goods may adversely affect Peru’s economic growth.

Nearly one quarter of the expected growth in Peru’s economy over the next year depends on economic conditions in China, which generates considerable demand for basic metals mined in Peru. An economic slowdown in China over the next several years may adversely affect the growth of the Peruvian economy as a result of lower exports, lower levels of foreign investment and lower tax revenues. The aforementioned could affect the growth of our business as these reflect on the Peruvian economy.

Fluctuation and volatility of capital markets and interest rates may decrease our net income.

We may suffer losses related to the investments by BCP, ASCH,ASHC, Grupo Pacífico Grupo Crédito (a wholly-owned subsidiary of Credicorp) and other subsidiaries in fixed income and equity securities, and to their respective positions in currency markets, because of changes in market prices, defaults, fluctuations in market interest rates or exchange rates or other reasons. A downturn in capital markets may result in a decline in the value of our positions and lead us to register net losses. In addition, a downturn in capital markets could also lead to volatile prices and negative net revenues from trading positions, even in the absence of a general economic downturn.

Fluctuations in market interest rates, or changes in the relative structure between short-term interest rates and long-term interest rates, could cause a decrease in interest rates charged on interest-earning assets, relative to interest rates paid on interest-bearing liabilities. Such an occurrence could adversely affect our financial condition by causing a decrease in net interest income.

A failure in, or breach of, our operational or security systems could temporarily interrupt our businesses, increasing our costs and causing losses.

Although we have a strong IT infrastructure and high-skilled professionals managing IT operations, we are still vulnerable to failure of our operational systems. This could temporarily interrupt our business, increasing our costs and causing losses. Temporary interruptions or failures in hardware and software that support our business and customer’s transactions could result mainly in regulatory fines, penalties, and reputational loss.

Acquisitions and strategic partnerships may not perform as expected, which could have an adverse effect on our business, financial condition and results of operation.

Acquisitions and strategic partnerships, as those made in our investment banking and insurance businesses, may not perform as expected since our assessment could be based on assumptions with respect to operations, profitability and other matters that may subsequently prove to be incorrect. Future acquisitions, investments and alliances may not produce the anticipated synergies or perform in accordance with our expectations, which could have an adverse effect on our business, financial condition and results of operation.

We are a limited liability company that was incorporated in Bermuda on October 20, 1995 to act as a holding company, coordinate the policy and administration of our subsidiaries, and engage in investing activities. Our principal activity is to coordinate and manage the business plans of our subsidiaries in an effort to implement universal banking services and develop our insurance business, focusing on Peru and Bolivia along with limited investments in other countries of the region. Our registered address is Clarendon House, 2 Church Street, Bermuda. The management and administrative office (i.e., principal place of business) in Peru of our subsidiary, Banco de Crédito del Perú, is located at Calle Centenario 156, La Molina, Lima 12, Peru, and the phone number is 51-1-313-2000.

As of December 31, 2011,2012, our total assets were US$30.740.8 billion and our net equity was US$3.54.4 billion. Our net income attributable to our equity holders in 2010, 2011 and 20112012 was US$571.3 million, US$709.3 million and US$709.3788.8 million, respectively. See “Item 3. Key Information—(A) Selected Financial Data” and “Item 5. Operating and Financial Review and Prospects.”

We were formed in 1995 for the purpose of acquiring, through an exchange offer, the common shares of BCP, ASHC and PPS.Grupo Pacífico. We currently hold 97.7% of BCP, 97.7%97.8% of PPSGrupo Pacífico and 100% of ASHC. See “Item 4. Information on the Company—(C) Organizational Structure.”

In February 2005, we were authorized by Peruvian regulatory authorities to establish Prima AFP, of which Grupo Crédito is the main shareholder. Prima AFP started operations in August 2005.

In August 2006, Prima AFP acquired Unión Vida AFP, which is a pension fund operating in the Peruvian market. Prima AFP’s acquisition of Unión Vida AFP, which was formerly held by Grupo Santander Perú S.A., was a strategic move toward consolidation as part of its efforts to gain a leading position in the pension fund market. As of the date of the acquisition, Prima AFP was the second largest pension fund company in terms of market share terms (defined as the amount of affiliates and assets under corporate management), with the second highest returns and the lowest commission for affiliates (who invest a portion of their salary each month). Today, Prima AFP is the largest pension fund manager in Peru. The merger between Prima AFP and Unión Vida AFP was consummated in December 2006.

In October 2009, BCP acquired from the Cooperative for Assistance and Relief Everywhere Inc. (CARE) – Perú, all the shares that this entity owned of Empresa Financiera Edyficar S.A. (Edyficar), representing 77.12% of Edyficar’s capital stock. In accordance with Peruvian legal requirements in effect at the time, BCP made a public offering to Edyficar’s minority shareholders to acquire the remaining 22.67% of the company’s stock. The total purchase price for the acquisition was US$96.1 million, including related direct acquisition costs. As of December 31, 20112012 BCP owned 99.79% of Edyficar.

In October 2010, the Credicorp group acquired American Life Insurance Company (ALICO)’s 20.1% and 38% stakes in PPSPacífico Seguros and Pacífico Vida, respectively. Pacífico Vida’s shares were acquired through Credicorp Ltd. and its subsidiary, Grupo Credito,Crédito, acquired PPS´Pacífico Seguros´s shares. Consequently, at the conclusion of this transaction, Credicorp and its subsidiary Grupo CreditoCrédito held 97.68% of Pacífico Seguros, and jointly controlled 100% of Pacífico Vida. The total investment amounted to approximately US$174 million, making it the largest transaction ever completed in the Peruvian insurance market. We expect the acquisition to permit the Credicorp group to realize synergies in its decision making process and through the integration of all its insurance business lines. The closer proximity between companies will also allow Grupo Pacífico to improve its value proposition to customers, who seek integral insurance solutions. On April 28, 2011, Credicorp transferred its 24% stake in Pacífico Vida to PPS.Pacífico Seguros. As a result of that transfer, PPSPacífico Seguros now directly owns 86% of the shares of Pacífico Vida and Credicorp owns the remaining 14%. This transfer did not affect Credicorp’s consolidated financial statements.

In November 2010, Credicorp’s Board of Directors approved the transfer of 84.9% of BCP’s total shares to Grupo Crédito S.A. (its Peruvian wholly owned subsidiary) through a capital contribution, in order to facilitate Credicorp’s future investments in Peru without modifying the controlling structure of BCP. Under the new structure, Credicorp directly holds 12.7% of BCP’s total shares and, in conjunction with its subsidiary Grupo Crédito, continues to control the same 97.7% of such shares without modifying the internal governance structure. Before this change in ownership structure, dividends to Credicorp from its Peruvian subsidiaries, such as BCP, were remitted abroad and had to be remitted back to Peru when capital for new investments in the country were required. With the new structure, Grupo Crédito, which acts as the local holding company for some of Credicorp’s investments in Peru (Prima AFP, Grupo Pacífico and others), will manage Credicorp’s future Peruvian investments, and directly transfer the dividends to Credicorp when it is required to do so under Credicorp’s dividend policy. This modified organizational structure will not affect the way Credicorp and BCP manage their day-to-day operations, and Credicorp’s dividend policy has not changed as a result of this transaction.

In the second half of 2011, Pacíficosalud EPSfico Salud invested approximately US$ 82.7 million to create the largest private medical services network in Peru by acquiring majority shares to directly manage: (i) the El Golf, San Borja and Oncocare clinics in Lima, (ii) the Galeno clinic in Arequipa, (iii) Laboratorios ML, a clinical laboratory, and (iv) Doctor+, which is a house call/ambulance service. In 2012, Pacífico Salud invested US$ 38.6 million to increase its integrated insurance and health providing services by acquiring: (i) Clínica Belén S.A., (ii) Centro Odontológico Americano, (iii) Prosemedic S.A., (iv) Clínica Sánchez Ferrer S.A. and Inversiones Marsfe S.R.L., and (v) Bio Pap Service S.A.C. We believe that these acquisitions enable Pacificosalud EPSPacífico Salud to directly benefit from this sector’s growth and to strategically defend against potential changes in the healthcare service supply chain, where vertical integration in the insurance business is becoming more frequent.

During 2012, Credicorp, as part of the strategic plan, initiated the creation of a regional investment bank. On November 30, 2011,April 27, 2012, Credicorp, through its subsidiary BCP, reached an agreement with the shareholders ofacquired a 51 percent stake in Correval S.A. Sociedad Comisionista de Bolsa, a brokerage entity established in Bogota, Colombia, to acquire a 51 percent stake in such entity for approximately US$76.572.3 million. To date the acquisition was approved by the relevant regulatory authorities in Colombia and Peru and the precedent conditions were fulfilled. Hence the settlement of the transactionThis entity will take place in the upcoming days.

Alsobe transferred to Credicorp Investments Ltd.. On July 31, 2012, Credicorp, through its subsidiary BCP, on April 23, 2012 reachedacquired 60.6 percent of IM Trust S.A. Corredores de Bolsa (IM Trust), an agreement in principle with the shareholders of IMTrust S.A., a brokerageinvestment banking entity established in Santiago, Chile, for approximately US$131.5 million, of which US$110.9 million were paid in cash consideration at the acquisitions date and US$20.6 million will be paid in cash in August 2013. In November 2012, IM Trust was transferred to acquire 60.6 percent stakeCredicorp Investments without any impact on Credicorp’s financial statements. For the investment banking operations in such entity forPeru, we created BCP Capital S.A.A. (BCP Capital), a company incorporated in Peru that was established in April 2012 through the split of an equity block of BCP. This split resulted in a reduction of BCP’s assets, liabilities and net equity in an amount that represents approximately 3.5% of US$71.2 million, US$18.0 million and US$53.2 million, respectively. Assets transferred included Credibolsa S.A.B., Creditítulos S.T., Credifondos S.A.F.M. and BCP’s investment banking activities. The equity block split had no effect in Credicorp’s net equityconsolidated financial statements; no gains or losses arose from it.

Finally, we established Credicorp Investments Ltd. (Credicorp Investments) in Bermuda to hold the Group’s investment banking activities in Chile, Colombia and thatPeru and as of December 31, 2012, the consolidated financial statements of this subsidiary only include IM Trust operations from November to December 2012. We will be finally defined subjectalso transfer Correval (at book value) to Credicorp Investments as soon as we obtain the completion of a due diligence process and approval from the supervisors in Chile and Peru, among other precedent conditions.Colombian supervisors.

General

We are the largest financial services holding company in Peru. For management purposes, the Group is organized into four operating segments based on our products and services. According to IFRS, an operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses; whose operating results are regularly reviewed by the entity’s chief who makes decisions about resources allocated for the segment and assesses its performance; and for which discrete financial information is available. We conduct our financial services business through our operating segments as follows:

Banking:Banking: principally handling loans, credit facilities, deposits and current accounts, and providing investment banking services, including corporate finance, both for corporate and institutional customers.accounts. Banking also includes handling deposits, consumer loans and credit cards products for individual customers.

Insurance:Insurance: including commercial property, transportation and marine hull, automobile, life, health and pension fund underwriting insurance. Private hospital services are also included under this operating segment.

Pension funds:funds: providing private pension fund management services to customers.

BrokerageInvestment Banking: including corporate finance (structured lending, capital markets and other: including the structuringM&A), sales & trading (equity, fixed income, and placement of primary market securities issuesderivatives), and the execution and trading of secondary market transactions. This segment also includes offers of local securitization structuring to corporate entities,asset management of(investment funds, mutual funds, advisory and other services.

mandates).

The following table provides certain financial information about our principal business segments as of and for the year ended December 31, 20112012 (See Note 2627 to the Consolidated Financial Statements):

* Operating income includes the net interest income from banking activities and the amount of the net premiums earned, less insurance claims.

We conduct our wholesale banking, treasury and retail banking and wealth management activities primarily through BCP, the largest (in terms of total assets, loans, deposits, net equity and net income) full-service Peruvian commercial bank, and our ASB private banking and asset management firm. We conduct our pension fund business through Prima AFP (the largest pension fund in terms of funds under management) and our insurance activities through Grupo Pacífico, which is the second largest Peruvian insurance company in terms of premiums, fees and net income. We conduct our investment banking business primarily through BCP Capital S.A.A. in Peru, Correval S.A. in Colombia, and IM Trust S.A. in Chile, each of which is a leading company in its respective market. It should be noted that the term “Peruvian commercial bank,” “Peruvian insurance company” and other similar terms used in this Annual Report do not include the assets, results or operations of any foreign parent company or foreign subsidiary of such Peruvian company.

Primarily as a result of the strong microeconomic environment in PerúPeru in 2011,2012, we recorded net income after minority interestsinterest of US$ 788.8 million in 2012, US$709.3 million which was 24.2% higher thanin 2011 and US$571.3 million in 2010. The 2012 result reflected an increase of 11.2% in our net income, in 2010. This result reflectedprimary as a consequence of the strong performance of all our subsidiaries.

Our total assets grewamounted to US$30.7 billion as of December 31, 2011, an 8.2% increase from the US$28.4 billion in assets we held as of December 31, 2010. Our2010, US$30.7 billion in 2011 and US$40.8 billion in 2012. The 32.8% increase in total assets in 2012 was primarily a result of the continued growth of our loan portfolio, which grew by 21.3%23.1% in 20112012 (compared to a growth of 21.3% in 2011 and 24.2% in 2010, 9.9% in 2009 and 27.8% in 2008)2010), in line with the expansion of the Peruvian economy, which had GDP growth rate of 6.9%6.3% in 2011.2012. Our past-due andloan ratio (which includes loans under legal collection loancollection) was 1.70% at the end of 2012 (compared to a ratio was 1.50%of 1.46% at the end of 2011 (compared to a ratio of 1.47%and 1.44% at the end of 2010 and 1.6% at the end of 2009)2010). We had a coverage ratio of 200.6% (i.e., reserves for loans as a percentage of past-due loans) of 187.7% (compared to a ratio of 200.6% at the end of 2011 and 198% at the end of 2010), and our return on average net equity (ROAE) increasedreached 20.2% in 2012 (compared to 22.9%22.2% in 2011 (compared toand 21.3% in 2010).

Banking segment

BCP

BCP’s year-end 20112012 net income totaled US$578.7660.8 million, which resulted in a contribution to Credicorp of US$ 564645.8 million. This earnings contribution was 21.5%13.8% higher than the 2011 contribution (US$564.1 million) and higher than the 2010 contribution (US$of US$464.4 million) andmillion. This was mainly a product of our improved net interest income which was in turn attributable to an 18.1%a 22.5% increase in gross loans. As a result, BCP registered a ROAE of 27.6%.25.6% in 2012.

The main drivers behind BCP’s performance were:Performance in 2012 was primarily a result of:

•         the 25.3% increase

•         the 2.5%

•

Performance in these areas enabled BCP to offset the company’s 22.6%75.7% increase in provisions for loan losses and 11.7%21.6% increase in operating expenses. The increase in provisions did not indicate a deterioration of portfolio quality and instead reflected the determinationrelative growth of provisions requirements based on the upper limitretail banking as a percentage of the range defined by IFRS compliant internal modelingour total loan portfolio. Retail banking segments have historically had higher levels of reserves.past-due loans and higher margins than other banking segments.

TheBCP’s higher operating expenses were a result of BCP’s greater administrative and general expenses and, to a lesser degree, higher salary expenses and employee benefits.benefits and higher administrative and general expenses. These higher operating expenses were exacerbated by the 4%5.4% appreciation of the Nuevo Sol against the U.S. Dollar over the course of 2011,2012, as a significant portion of BCP’s operating expenses are denominated in local currency.

BCP’s total assets reached US$26.834.2 billion at the end of 2011, representing an2012 a 32.6% increase from the US$26.8 billion of 5.8% over the previous year (US$total assets that BCP had as of December 31, 2011. As of December 31, 2010 BCP’s total assets were US$25.3 billion). Thisbillion. The increase in total assets in 2012 was a result of the 17.9%22.2% expansion of BCP’s loans net of provisions, which totaled US$16.420.1 billion at the end of 2011. 2012.

The loan portfolio constituted 61.2%58.5% of BCP’s total assets at the end of 2011.2012 (61.2% in 2011 and 55% in 2010). BCP’s total past-due loans reached US$370.4 million from US$258.3 million (23.5% higher thanregistered in 2011 (a 43.4% increase from the previous year) and US$209.1 million registered in 2010)2010 while refinanced and restructured loans increased by 25.2%48.1%, from US$76.796 million in 20102011 to US$96142.2 million at the end of 2011.2012 (US$76.7 million in 2010). The composition of BCP’s loan portfolio in 20112012 changed significantly. As of December 2011,2012, the average daily balances in our retail banking operationsbusiness accounted for 46.6%51.2% (compared to 42%46.9% in December 2011 and 42% at the end of 2010) and wholesale banking operationsbusiness accounted for 53.4%48.8% of BCP’s total portfolio (compared to 58%53.1% in December 2011 and 58% at the end of 2010). This outcome is a result of BCP’s strategic focus on increased market penetration in middle and lower segments, which are generally characterized by higher margins.

The average daily balances of BCP’s wholesale banking loans grew by 11.8%12.1% in 20112012 (8.1% in 2011) as a result of the financing provided for large investments, inventories and working capital to keep pace with Peru’s dynamic economy. As a result, BCP continued to lead the Peruvian financial system with a market share of 44.3%47.2% for the corporate segment (46.5%(44.3% in 2010)2011) and 34.3%33.2% for the middle market (34.1%(34.3% in 2010)2011).

BCP’s retail banking portfolio continued its upward trend and grew 35%32.8% in 2011.2012 (average daily balance). In terms of growth and yields, BCP’s small and medium enterprise (SME) loans were its best performing product, growing by 40.1%35.4% (measured in average daily balances) to a total volume of US$3.14.1 billion, followed by credit cards which grew 39.5%27.7% to US$809 million,1 billion, in each case as of December 31, 2011.2012. Consumer loans grew 34.3%35.4% to US$1.31.8 billion, while mortgages expanded 28.2%29.8%, totaling US$2.53.2 billion.

On the liabilities side, BCP’s deposits reached US$17.622.8 billion on December 31, 2012 from US$17.6 billion in 2011 (a 4.5%30% increase from the previous year). and US$ 16.8 billion in 2010. This increase in deposits not only continues to reinforce BCP’s funding structure, as deposits account for 71.8%72.3% of all funding sources, but it also serves to maintain BCP’s status as an industry leader with a market share of 31.6%33.7%. It is important to note that coreBCP’s time deposits grew while time deposits fell 25.8%, a dynamic which favor cost of funds for BCP.58.7%. Demand deposits were BCP’s largest deposit type, totaling US$6.37.6 billion as of December 31, 2011.2012. Savings deposits, BCP’s second-largest deposit type, reached US$5.16.1 billion. Time deposits totaled US$4.26.7 billion while Severance Accounts, or CTS,Indemnity Deposits (CTS by its Spanish initials) totaled US$1.82.2 billion.

BCP’s issuance of bonds gained greater relevance within the funding structure. In March, 2011,April 2012, BCP completed a second international issuance of benchmark sized corporate bonds for US$700 million. Additionally, in September 2011, we conducted BCP’s largest subordinated bond issuance to date for US$350 million. This transaction was entered into in order to fully align BCP with the new capital requirements established by local regulators pursuant to Basel III, which go into effect in July 2012.regulators. As of December 31, 2011,2012, the aggregate outstanding principal amount of BCP’s bonds totaled US$3,1223,605 million (59.3%(15.5% higher than the level registered in 2010)2011).

BCP maintains adequate provisioning and long-term risk management policies. Its coverage ratio increaseddecreased to 188.6% in 2012 from 200.8% in 2011, which in turn was higher than the coverage ratio of 198.5% in 2010 to 200.8% in 2011.2010. Total cumulative provisions reached US$518.9705.5 million as of December 31, 2011,2012, which is 25.1%34.6% higher than provisions in the previous year.

In 2011,2012, BCP continued to focusexpanding its strategy on strengtheningchannel network as part of its customer service which is related to its goal offocus. By providing quality and widespread customer access to BCP’s financial services, BCP sought to increase its penetration of the financial system and thereby increasing the company’s penetration into thePeruvian market. In following its2012, the network expansion plan BCP focused on cost-efficient channels, by opening ATMs and Agentes BCP locations, which grew by 28.1%24.2% and 33%22.2%, respectively. ByAt the end of 2011,2012, BCP had a total of 1,4851,844 ATMs (1,485 in 2011 and 4,6741,159 in 2010) and 5,713 Agentes BCP locations, which(4,674 in 2011 and 3,513 in 2010). Agentes BCP are BCP representatives located in retail establishments, such as grocery and drug stores. As a result of this strategy, BCP’s average number of transactions in 20112012 increased 21.3%17.8% compared to 20102011 and its transactional business was therefore able to generate higher income from fees and commissions.

Overall, BCP’s results met our expectations and remained profitable in line with the growth of Peruvian economy, which posted a 6.9%6.3% GDP growth in 20112012 despite internal concernsuncertainty about the presidential elections in the first half of 2011 and uncertainty concerning the global economy during the second half of the year.economy.

BCP Bolivia

BCP Bolivia’s year-end 2012 net income totaled US$20.6 million, a 7.7% decrease from its 2011 net income (US$22.3 million). The decrease from 2011 to 2012 was attributable to a 363.4% increase in income tax expense associated with new taxes enacted in 2012. In 2011, BCP Bolivia had a net income ofwas US$22.3 million, a 41% increase from its 2010 net income of US$(US$15.8 million. Thismillion). The increase in 2011 was primarily attributabledue to growth in interest income driven by growth in BCP Bolivia’s loan portfolio, and a 38% increase in gains on foreign exchange transactions.

In 2012, 2011 and 2010 BCP Bolivia maintained its position as one of the leading banks in Bolivia. In each2012, BCP Bolivia reported a return on average assets of the following categories,1.6%, a past-due loan ratio of 1.2%, and a coverage ratio of 301.3%, compared to industry averages of 1.5%, 1.5% and 291.2% respectively. In 2011, the bank either outperformed or equaled the industry average in the Bolivian banking system:following ratios, return on average equity (22.3%assets (1.7%), past-due loan ratio (1.2%) and coverage ratio (314%) (as compared to industry averages of 20.2%1.7%, 1.7% and 281.1%, respectively).respectively. In 2010, return on average assets (1.4%), past-due loan ratio (1.5%) and coverage ratio (272.6%) were also on par with or exceeded industry averages of 1.4%, 2.2% and 220.7%, respectively

BCP Bolivia’s loan portfolio expanded by 26%grew from US$ 602 million in December 2010 totalingto US$758 million in 2011. This expansionDecember 2011 and US$ 901 million in 2012. The increase in 2011 was mainly due todriven primarily by a 33% growthincrease in wholesale banking.banking loans while the increase in 2012 was driven by a 25% increase in retail banking loans.

Although BCP Bolivia made a positive contribution to our results in 2011, the countryeach of Bolivia continues to experience a volatile political environment notwithstanding evidence of decreasing inflationary pressures through the last quarter of 2011.three years, the bank´s earnings generation capacity is increasingly under pressure due to a more stringent regulatory environment and a significantly higher tax burden.

Edyficar

Edyficar focuses on SME lending and, together with BCP, it held a 23.3%, 21.4% and 19.6% market share in terms of loans at the end ofyear-ended 2012, 2011 (compared toand 2010, respectively. Edyficar closest competitor has a market share of 15.0% held by its closest competitor).14.3% at the end of 2012. The consolidation of Edyficar’s results into BCP’s financial statements resulted in a total contribution to BCP of US$36.5 million in 2012, compared to US$26.2 million in 2011. As of December 31, 2011 and US$22.1 million in 2010.

Edyficar registered total assets of US$1,064.4 million, US$591 million and US$465.9 million at year-end 2012, 2011 and 2010, respectively; which consisted of US$708.6 million, US$479.1 million, US$336.2 million from the company’s net loan portfolio, its main asset.asset, at year-end 2012, 2011 and 2010, respectively. Total liabilities increased to US$966 million in 2012 (compared to US$515.2 million in 2011 and US$413.5 million in 2010), which included US$236301.6 million from banking activities.banks. Net shareholders’ equity reached US$98.4 million, US$75.8 million and US$52.4 million at the end of 2011.

year-end 2012, 2011 and 2010, respectively.

As of December 31, 2011, Edyficar’s2012, Edyficar had a client base registeredof 443,406 clients, representing an increase of 24.6 % compared to the client base reported in 2011. In 2011, Edyficar had a client base of 356,000 clients a base 24.5 % larger thanwhich represented an increase of 24.5% compared to the 286,000 clients reported in 2010. The average amount of an Edyficar loan was S/. 4,411 (approximately US$1,730) in 2011 was2012, S/. 3,837 (approximately US$ 1,423). in 2011, and S/.3,502 (approximately US$1,247) in 2010. Edyficar registered a Past-due loans (PDL)past-due loan ratio of 4.0%3.9% at the end of 2011,2012, a reflection ifof its portfolio quality.quality (compared to 4.0% obtained in 2011 and 2010). Edyficar reached a ROAE of 26.5%, 22.9% and 25.2% in 2012, 2011 and 2010, respectively (including a goodwill of US$ 50.7 million for each of the last three years) and an efficiency ratio of 55.3 %.54.2%, 55% and 56.1% in 2012, 2011 and 2010, respectively.

The acquisition of Edyficar was part of BCP’s strategy to capture a significant portion of the growth of the Peruvian SME segment, which is expected to expand significantly over the next several years. BCP intends to support Edyficar’s growth and development by improving its funding cost and structure and providing necessary capital and technology.

ASBAtlantic Security Bank (ASB)

2011 was characterized by slowed growthDespite low economic performance in many developed economies.the global economy, in 2012 ASB achieved an increase in net profit due to strategic allocation in its investment portfolio and an increase the volume of interest earning assets. ASB’s net earnings for 2011 amounted2012 were US$48.4 million, an increase of 17.8% compared to the US$41.1 million compared toreported in 2011 and US$48.9 million reported in 2010. Notwithstanding this 16% decrease, given the global economic situation we believe that these results reflect a sustainable trend over the past two years, which reflects a high quality risk portfolio and diversified investment strategies. Credicorp received a corresponding contribution of US$41.148.4 million from ASB.ASB in 2012.

Net interest and dividend income from interest in 20112012 totaled US$31.938.6 million, which represented an increase of 21.0% compared to the US$ 31.9 million reported in 2011, which in turn represented a decrease of 15% from13.1% decline compared to the previous year.US$36.7 million reported in 2010. This decreaseincrease was primarily due to the company’sASB’s investment strategies, which were affected by the slowdown in economiesand increasing volume of interest earning assets. ASB also benefited from the European Union (EU) and the United States. Despite the environment, ASB sustained a financial margin above US$31 million, which in turn waslower funding cost, as a result of the company’s lower funding cost, considering the levels ofchanging LIBOR in 2012. Short-term customer deposits, which have interest rates during the year, a favorable scenario for the bank given the short-term structure of its customers’that reset frequently, permitted ASB to pay low rates on deposits and their fast re-pricing, in contrast toaccounts while earning higher interest income on assets engaged for middle and longer terms and at higher interest rates. Non-financialterms. ASB’s financial income, reached US$18.4 million and includedwhich includes income from fees, the sale of securities, and foreign exchange operations.operations, was US$18.6 million in 2012.

ASB’s total assets were US$1,523.51,768.5 million as of December 31, 2011,2012, an increase of 14% from16.1% compared to 2011. ASB’s total assets were US$1,523.5 million in 2011 and US$1,337.8 million in 2010. ThisThe increase in total assets from 2011 to 2012 was mainly a result of significant growth in the funds that ASB managed on behalf of its strategyclients, which in turn is related to obtain funds by taking advantage of the economic growthpositive performance of the Peruvian market.economy.

At the end of 2011,2012, ASB’s assets under management totaled US$3,1943,961 million, compared to US$3,1773,194 million in 2011 and US$3,178 million in 2010. This growth was primarily a result of increases in our customers’the global positions of ASB’s customers and the market value of their portfolio, despite of the turbulence and heightened concerns about recovery in global financial markets.ASB’s portfolio.

Insurance segment

Grupo Pacífico

In 2011,2012, Grupo Pacífico, which encompasses Pacífico Seguros, Pacífico Vida and Pacíficosalud EPS,fico Salud , reported net income, after deducting minority interests, of US$57.158.9 million (compared to US$55.457.1 million of net income in 2011 and US$ 55.4 million in 2010). However, theThe contribution we received from Grupo Pacífico increased, from a gain of US$48.2 47.4 million in 2010 to a gain of US$65.6 million in 2011.2011 and US$ 66.0 million in 2012. This contribution includes net income, after minority interest, as well as the participation of Grupo Crédito (a subsidiary of Credicorp) in the minority interest.

This increase in net income was primarily a resultconsequence of Grupo Pacifico’s acquisition of a greater ownership interestPacífico’s total premiums, which increased 17% in Pacifico Vida, which in turn resulted the consolidation of 100% of Pacifico Vida’s net income after the acquisition of ALICO’s stake in October 2010.

Grupo Pacífico’s underwriting result2012 (from US$ 872.4 million to US$ 1,019.9 million) and 16% in 2011 which reflects the company’s core business performance for the year, was(from US$100.4 751.9 million which represented an increase of 9.1% compared to 2010’s figure. This improvement was mainly due to a 16%US$ 872.4 million). A 23% increase in net earned premiums from US$752 million(NEP) and a 17.2% increase in 2010financial income also contributed to US$872 millionthe increase in 2011.net income.

We believe that there is substantial growth potential in Peru’s insurance market, given the industry’s weak market penetration. Efficiency and risk management will continue to be key indicators in measuring Grupo Pacífico’s performance. Efficiently utilizing

We believe that there is substantial growth potential in Peru’s insurance market, given the BCP network is an essential component ofindustry’s weak market penetration. Efficiency and risk management will continue to be key indicators in measuring Grupo Pacífico’s growth strategy 2011,performance, as we believe that capitalizing on synergies between the insurance business and the distribution channels of the banking business will lead Grupo Pacífico to greater penetration in the insurance market. Developing alternative sales channels, efficiently utilizing BCP’s network, maintaining relationships and market share through traditional brokerage channels, and expanding services in underserved regions of Peru are essential components of Grupo Pacífico’s growth strategy for 2013.

Additionally, during 2012, Pacifico Salud continued its initiative (which launched in 2011) to create the largest private medical services network in Peru by investing an additional US$ 38.6 million to acquire entities that specialized in providing health and wellness programs, primary and specialized ambulatory services, and comprehensive acute care services, Entities acquired by Pacífico Salud as a part of this initiative include: (i) Clínica Belén S.A., (ii) Centro Odontológico Americano, (iii) Prosemedic S.A., (iv) Clínica Sánchez Ferrer S.A. and Inversiones Marsfe S.R.L., and (v) Bio Pap Service S.A.C. We believe that these acquisitions enable Pacífico Salud to directly benefit from this sector’s growth and to strategically defend against potential changes in the healthcare service supply chain, where vertical integration in the insurance business is becoming more frequent.

Pension fund segment

Prima AFP

During 2011,2012, the growth of the Peruvian economy resulted in positive results for the Private Pension System (SPP)(SPP by its Spanish initials), achievingwhich experienced growth in new affiliates, number of contributors and collections during the year. However, the international financial crisis present throughout the year affected the value of assets under management.

These economic conditions and the increased uncertainty in financial markets, led to a decreasean increase in the value of funds under management by the SPP as a whole,during 2012, which reached US$30.4 38.0 billion as of December 31, 20112012 and represented a 2.3%25.1% year-over-year decreaseincrease compared to December 31, 2010.2011 (US$30.4 billion). As of December 31, 2010, SPP had US$31.1 billion in funds under management.

Prima AFP was able to strengthen its position in the market by adjusting its processes and organization to provide high-quality services and timely and transparent information to its clients. As a result, the contribution we received from Prima AFP in 2011 reached2012 was US$32.4 35.0 million as compared to US$25.5 32.4 million in 2010.2011. In 2010, Prima AFP’s contribution was US$25.5 million.

Funds under management at Prima AFP decreased 2.9%increased from US$9.8 9.5 billion in 20102011 to US$9.5 12.0 billion as of December 2011.2012. In 2010, this indicator reached US$ 9.8 billion. By year-end 2011,2012, Prima AFP’s market share of total funds under management was 31.2%31.5%, representing a slight year-over-year decrease.increase. Prima AFP is the largest pension fund management company in Peru by funds under management.

Prima AFP’s revenues from commissions in 2012 totaled US$ 117.2 million, a 12.2% increase from 2011 when revenues from commissions totaled US$104.4 million. In 2010, revenues from commissions reached US$104.4 million, a 22.6% increase from 2010. 85.2 million. This improvement was a result of a stable and superiorhigh-quality portfolio of contributing members. Revenues in 2011, as was the case in 2010, included 12 contribution periods, as a result of the Peruvian government extending until 2014 the exemption from deductions on additional salaries paid in July and December under Peruvian labor law.

To improve its operating results, Prima AFP will continue to focus on increasing efficiency and reducing costs. Emphasis will also be placed on improving Prima AFP’s long-term stability through improved risk management, which is one of the company’s highest priorities.

Brokerage

In 2012, a series of reforms to the SPP were implemented. These reforms are discussed in “Item 4. Information on the Company — (B) Business Overview— (11) Supervision and otherRegulation— (vii) Prima AFP.”

Investment banking segment

A strategic focus for Credicorp involves the regionalization of Latin American markets. This has been reflected in the creation of the MILA (by its Spanish initials), a Latin American integrated market -among Chile, Colombia and Peru. The majorityMILA opens up opportunities to further integrate asset management, brokerage and corporate finance operations which can offer benefits for companies that have a significant presence in these markets. Since the formation of our brokerage activities are conductedthe MILA, Credicorp’s investment banking business is carried out through BCP ASB, Credicorp Securities Inc.,Capital, Correval and IM Trust, which ishold considerable market shares in the Peruvian, Colombian and Chilean markets, respectively. These three companies perform operations in three business lines: Asset Management, Sales & Trading and Corporate Finance.

Asset Management

In terms of asset management, BCP Capital posted a U.S. registered broker-dealer with its officestotal of US$ 4,593 million in Miami, and Credicorp Ltd.,assets under management in 2012, which mainlyrepresented a market share of 39% at the end of 2012. This figure includes expenses and the tax withheldUS$2,749 million of assets managed by BCP Capital’s mutual funds, Correval posted a total of US$ 1,534 million in connection with the estimation of the dividends to be distributed to us by our Peruvian subsidiaries (BCP and Grupo Pacifico). BCP offers clients a wide range of brokerage products and services,assets under management, including mutual funds and custody services through its branch networkinvestment funds managed. Correval’s assets under management represented market share of 4.3% at the end of 2012. Finally, as of December 31, 2012 IM Trust had a total of US$ 2,126 million in Limaassets under management, including US$ 460 million in mutual funds and on a more limited basis, throughout the rest of Peru. In addition, we also offer a wide range of brokerage products and services through ASB.investment funds managed.

Sales & Trading

In 2011, our brokerage activities2012, BCP Capital traded a total of US$ 2,073 million in equity securities and US$ 511 million in fixed income securities, which represented 2.2%a market share of 16.8%, Correval traded a total consolidatedof US$ 9,505 million in equity securities and US$ 139,748 million in fixed income securities, which represented market shares of 12.9% and 1.3%11.6% respectively. IM Trust traded a total of total consolidated assets.US$ 5,620 million in variable income instruments and US$ 31,599 million in fixed income instruments, which represented market shares of 7.13% and 11.3% respectively.

Corporate Finance

In 2012, BCP Capital’s corporate finance business structured mid-term transactions totaling US$ 1,660 million. The primary transactions were:

Consolidated ContributionsCorporate Finance

In 2012, BCP Capital’s corporate finance business structured mid-term transactions totaling US$ 1,660 million. The following table sets forth the contribution to the consolidated net income attributable to our equity holders by each of our principal subsidiaries:

(1)         Includes Banco de Crédito de Bolivia, which contributed US$22.3 million in 2011, US$15.8 million in 2010 and US$30.3 million in 2009; and Edyficar, which contributed US$26.2 million in 2011, US$21.5 million in 2010 and US$1.1 million in 2009 (BCP acquired Edyficar in October 2009).

(2)         Includes Prima AFP (which recorded a net income of US$32.4 million in 2011, US$25.5 million in 2010 and US$20.8 million in 2009), Credicorp Securities, Credicorp Ltd. (which mainly includes expenses and the tax withheld in connection with the estimation of the dividends to be distributed to us by our Peruvian subsidiaries (BCP and Grupo Pacífico)) and others.

Credicorp was established to create a financial group that would benefit from synergies among the group’s companies and would become a leader within each business market in which the companies operate. In moving steadily toward achieving these strategic goals, we have become a leading financial group. However, we do not operate in a static environment, and the last three years have demonstrated how quickly and dramatically the world can change. Peru’s economic growth slowed significantly in 2009 as a result of the international financial crisis. In response to this, we took steps toward improving our long-term sustainability and worked to position our companies for growth as the Peruvian market continues to evolve. In 2010 Peru’s economy returned to the dynamism it showed in the pre-crisis period, and we continued, and completed in many cases, the implementation of various initiatives that were designed to ensure the sustainability of Credicorp’s business segments.

The Peruvian market offers one of the strongest growth opportunities in South America. In the banking, insurance and pension fund industries, market penetration by service providers remains low. Accordingly, our business plans incorporate strategies that will enable us to reach underserved segments of the Peruvian population and achieve higher returns on our capital. As our businesses expand, it becomes increasingly important for us to maximize efficiencies and control risk. Our strength in these areas is the cornerstone of our strategy to achieve healthy, sustained and profitable growth.

The growth strategies we have adopted for each of our companies include a focus on retail markets. Our strategy provides a launching pad for two points of financial inclusion: our Agente BCP covers the liabilities’ side by promoting banking penetration and the subsequent point for access to credit, which gives low income sectors the opportunity to improve standards of living and become part of the country’s economic model for growth. Using our collective resources, we are developing information systems that can collect commercial sales information and provide us with the data we need to process scoring models by segment. This will enhance our ability to assess and control risk, as well as cross-selling our products between our business segments.

Another strategic focus for Credicorp involves the regionalization of Latin American market, which has picked recently increased in relevance due to problem in developed markets. This has been reflected in the creation of the MILA (Integrated Latin American Market), which we believe provides strong possibilities for growth. The integration of equity trading in Chile, Colombia and Peru has created the largest exchange in Latin America by number of issuers and the second-largest exchange in Latin America by market capitalization after the Brazilian BM&F Bovespa. Credicorp has seized this opportunity by:primary transactions were:

This acquisitions reflect our commitment to concretize our regional presence in the investment banking and capital markets sectors.

We also continue to make strides toward greater integration of our companies by more extensively sharing our talents and experience.

Outlook for 2012

We expect that the favorable economic conditions in Peru that characterized 2011 will continue in 2012. Throughout the year, we will continue to take a development-oriented approach, preparing for changes in the Peruvian market, which is expected to have high growth rates in the upcoming years. Given the low levels of penetration in Peru’s banking and insurance markets, we believe that our subsidiaries will be well positioned to expand. Our high equity levels, technical and professional expertise and strong relationships built on the trust of our customers are all indicative of a positive outlook for the Company.

Banking

The majority of our banking business is carried out through BCP, which is our largest subsidiary and the oldest bank in Peru. A portion of our banking business is also carried out by ASB, which principally serves Peruvian private banking customers through offices in Panama. We conduct banking activities in Bolivia through BCP Bolivia, a full service commercial bank which maintained an 11.3% market share of current loans and 11.3% of total deposits, which situates it in third place in terms of loans and fifth with regard to deposits in the banking system.

Our banking business is organized into wholesale banking activities, which are carried out by BCP’s Wholesale Banking Group (which includes the corporate banking operations of ASB), and retail banking activities, which are carried out by BCP’s retail banking group. To increase our visibility and raise our market share in the retail banking industry, BCP bought Edyficar, which is a scaled, high-growth and highly profitable microfinance business. Edyficar has a solid risk management strategy and a proven track record in both loan portfolio growth and social impact. Edyficar provides financial services for low-income micro-entrepreneurs and unbanked communities.

We apply uniform credit policies and approval and review procedures, which are based on conservative criteria adopted by BCP, to all of BCP’s subsidiaries. Our general manager is in charge of setting the general credit policies for our different business areas. These policies are set within the guidelines established by Peruvian financial sector laws and SBS regulations (See “(11) Supervision and Regulation—(ii) BCP”) and the guidelines set forth by our Board of Directors.

Our deposit-taking operations are principally managed by BCP’s retail banking group and ASB’s private banking group. See “(12) Selected Statistical Information—(iv) Deposits.”

Insurance

We conduct our insurance operations exclusively through Grupo Pacífico and its subsidiaries, which provide a broad range of insurance products. Grupo Pacífico focuses on three business areas, property and casualty insurance through Pacífico Seguros, life and pension insurance through Pacífico Vida, and health care insurance through Pacíficosalud EPS. Grupo Pacífico, like other major Peruvian insurance companies, sells its products both directly and through independent brokers and agents. Directly written policies tend to be for large commercial clients, as well as for life and health insurance lines.

Pension funds

Credicorp conducts all of its pension fund activities through its private pension fund administrator Prima AFP. During 2011, Credicorp through its subsidiary Prima AFP, focused mainly on obtaining new affiliates (approximately 86,000 new affiliates, topping previous year figure by 55%) and building stronger relations with its client base, by providing permanent information and diverse channels of communication.

In terms of funds under management, the year 2011 was marked by uncertainty in the financial markets due to global economic outlook and European fiscal crisis, resulting in negative impact on our funds under management. Despite this scenario, the Peruvian economic indicators have remained solid and outlook remains favorable. Funds under management by Prima AFP at the end of December 2011 reached US$ 9,486 million, which falls below 2010’s value (US$9,765 million) due to impact of market yields. On the other hand, monthly affiliate remuneration reached US$535 million in 2011 topping the figure in 2010 by 23.6% (US$ 433 million).

Brokerage and other

The majority of our trading and brokerage activities are conducted through BCP, ASB and Credicorp Securities Inc. (also referred to as Credicorp Securities), which is one of our wholly-owned subsidiaries. Credicorp Securities is a U.S. registered broker-dealer with its offices in Miami. Our asset management business is carried out by BCP in Peru, through its subsidiary Credifondo, and by ASB.

We offer brokerage and other services through BCP and ASB. BCP offers clients a wide range of such products and services, such as brokerage, mutual funds and custody services through its branch network in Lima and, on a more limited basis, throughout the rest of Peru. In addition, ASB also offers brokerage and other services.

In the last few years, we have consolidated an important line of business, asset management, for our customers. As of December 31, 2011 our assets under management totaled US$ 4.1 billion (without including private pension funds under management), a decrease of 31.1% from 2010, which was mainly due to the transfer of an important portfolio of shares and mutual funds from Credicorp Securities to another broker-dealer custodian.

Mutual funds represent another important contributor to our asset management business, carried out through BCP’s mutual funds subsidiary, Credifondo Sociedad Administradora de Fondos Mutuos (or Credifondo). Credifondo leads the Peruvian market with a share of 42% of the total assets currently under management. Creditítulos is an asset securitization entity 100% owned by BCP. Finally, Atlantic Security Bank offers the international mutual funds and financial advisory services to private banking customers.

We established a corporate supervision project entitled “Asset Management” due to the size of these businesses, the importance of the commissions they generate and, above all, the fiduciary responsibility they entail. The main objective is to establish homogeneous risk control and investment policies based on best international practices. The Asset Management business has four main components:

General

BCP’s activities include wholesale banking, asset management, treasury and retail banking. As of December 31, 2011, the consolidated operations of BCP ranked first among Peruvian banks in terms of total assets (US$26.8 billion), total loans (US$16.4 billion), deposits (US$17.5 billion) and net equity (US$2.4 billion). At the end of 2011, BCP’s loans, on an unconsolidated basis, represented approximately 33% of the total Peruvian banking system (lower than the 33.6% registered at the end of 2010) and BCP’s deposits represented approximately 34% of the total Peruvian banking system (below the 36.3% reported at the end of 2010).

As of December 31, 2011, BCP had the largest branch network of any commercial bank in Peru with 342 branches. BCP also operates an agency in Miami and a branch in Panama. In addition, as of December 31, 2011, BCP Bolivia and Edyficar had 42 and 123 offices, respectively, through which they serve their clients.

As of and for the year ended December 31, 2011, BCP accounted for 87.4% of our total assets, 75.2% of our net income and 69.3% of our net equity. BCP’s operations are supervised and regulated by the SBS and the Central Bank.

BCP groups its client base according to the following criteria:

The grouping was a result of an analysis which addressed factors beyond the simple size and volume of activity for each client, such as clients’ affiliation with other companies or groups, the degree of follow-up required, and their credit ratings.

Subsidiaries

BCP’s corporate structure consists of a group of local subsidiaries offering specialized financial services, which complement BCP’s commercial banking activities. In addition to its local subsidiaries, BCP has an agency in Miami, a branch in Panama and a subsidiary in Bolivia.

BCP and its principal subsidiaries as of December 31, 2011 are as follows:

Business Lines

BCP’s wholesale banking group (Wholesale Banking Group), which competes with local and foreign banks, has traditionally represented the majority of BCP’s loans. BCP’s traditional long term relationships with medium and corporate companies provide its Wholesale Banking Group with a competitive advantage.

BCP’s Wholesale Banking Group maintained its positive trend in loan placements, posting average portfolio levels of US$8,391 million in 2011 (20% higher than in 2010). It also maintained its leadership in the wholesale banking market with a 40.1% market share in direct loans and a 55.0% stake in debt placements in the Peruvian capital markets, BCP has the largest capital base among Peruvian banks, which provides it with more resources to meet the financing needs of its corporate clients. BCP has established longstanding client relationships with virtually all of the major industrial and commercial groups in Peru. The Wholesale Banking Group provides its customers with cash management solutions, short- and medium-term loans in local and foreign currencies, foreign trade-related financing and lease and project financing.

The Wholesale Banking Group is divided into the following areas:

Net income from the wholesale banking sector reached US$210 million in 2011 (compared to US$138 million in 2010). The 2011 result reflected increases in net interest income (loans and deposits) of 29% and in fee income of 17%.

Corporate Banking

BCP continues to meet the needs of its corporate clients, assisting them with financial services, cash management solutions and short and medium-term financing. As a result, BCP’s corporate banking direct credits grew from US$5,155 million to US$5,477 million from 2010 to 2011, and income from financial services increased by 21%, from US$68 million to US$83 million. These increases, coupled with a very low default ratio (less than 0.1%), enabled the Corporate Banking Area to meet its financial targets with a net income of US$110 million, an increase of 57% over the US$70 million of net income achieved in 2010.

Client Profile: The Corporate Banking Area is focused on serving large-sized companies that have an annual turnover of over US$50 million, audited financial statements and dominant market positions in their particular brands or product areas. Even if they do not meet the above criteria, BCP may classify other firms in this category if they belong to very large economic groups from industries that are important to Peruvian economy.

The Corporate Banking Area offers a broad range of products and tailors its product offerings to meet each client’s unique requirements. In general, this area is expected to offer high-value-added products and services, particularly cash management services, at competitive prices.

The majority of the Corporate Banking Area’s financing is provided to fund capital expenditures and investments, sales, international trade and inventories. The Area also offers term financing (in almost all cases backed by real guarantees), financial leasing, factoring, and domestic collections and nationwide fund transfers.

Additionally, Corporate Banking clients can obtain investment banking, advisory and financing services through the Corporate Finance Area, which operates as part of the Wholesale Banking Group and also serves significant middle-market banking clients.

Guarantees received by this area consist of (i) receivables in the case of sales financing, (ii) warrants or pledges over inventory, in the case of inventory financing and (iii) real guarantees, in the case of financing for fixed asset acquisitions and improvements to their infrastructure.

We believe that prospects for growth in this business are limited, due to high market penetration (45.9%) and increasing competition against direct loans resulting from increased capital markets activity.

Middle-Market Banking

BCP’s Middle Market Banking Area provides banking services targeted to medium-sized companies from various economic sectors. The products offered to middle-market clients are similar to those offered to corporate banking clients. The three major types of products are:

BCP has identified several opportunities to engage middle market companies, particularly in Peru’s manufacturing, wholesale, retail, fishing and construction industries. BCP has created dedicated areas which focus on attending to the needs of these specific economic groups. BCP has a middle market client portfolio of approximately 7,000 companies, including 1,173 economic groups. Generally, these clients are not listed on any stock exchange; however in certain cases they have accessed the capital market either for bonds or commercial paper. These companies are typically family-controlled but professionally managed; their financial information is audited.

Since 2009, the Middle-Market Banking Area has revised its customer segmentation policies. The Area includes mature companies that will eventually become part of our corporate segment, traditional mid-size companies and a group of growing small cap companies. In selecting which small companies are best suited for service by our Middle-Market Banking Area, we consider a mix of different characteristics, such as annual revenues, financial leverage, overall debt and product penetration and complexity. BCP’s middle-market clients’ annual revenues generally vary from US$6.7 million to US$50 million, and are serviced nationwide by 13 BCP regional managers.

The Middle-Market Banking Area made has continued to make significant progress toward implementing its strategic goals by:

According to internal reports, in 2011 net income from the Middle-Market Banking Area increased to US$87 million. This was the result of an increase in net interest income (loans and deposits) of 33% and in fee income of 13%. The Middle-Market Banking Area’s annual average loan portfolio had a market share of 34.5%, (US$2,930 million), making BCP the leading bank in its segment.

We believe that middle market companies have benefited significantly from the overall economic improvements in Peru over the past few years. Loan quality problems have been addressed through procedures and organizational changes that have focused on improving the loan approval and credit-risk assessment processes.

Institutional Banking

BCP’s Institutional Banking Area serves 900 clients in Lima and 300 clients throughout the rest of the country. In Lima, a specialized team in wholesale banking serves governmental entities, educational institutions, religious organizations, international bodies, non-governmental organizations, and microfinance institutions. In other provinces, a specialized remote wholesale banking team partners with BCP’s retail banking area to serve clients.

The annual average deposit amount in BCP’s Institutional Banking Area (Lima and provinces) reached US$2.6 billion in 2011. The Institutional Banking Area is strategically important because of the potential its clients present for generating income from fees and cross-selling opportunities. BCP’s strategy in this Area is focused on building customer loyalty by offering customized services at competitive rates and providing outstanding service quality. Our institutional banking typically requires remote office banking, collections and automated payroll payment services.

International Banking

The International Banking Area focuses on providing short-term credit for international trade, which is usually funded with customer deposits or with credit lines from foreign banks and institutions. Medium-term lines of credit funded by international commercial banks and other countries’ governmental institutions are also provided to clients. In addition, this unit earns fees by confirming guarantees issued by international banks and other fees as a result of the international payment business. The International Banking Unit also promotes international trade activities with its local clients by structuring trade products and services, organizing and sponsoring conferences and advising customers through a wide range of trade products.

Since September 2008 the International Banking Unit has also been supervising our trade back-office unit (International Operations). BCP maintains business relationship with correspondent banks, development banks, multilateral and export credit agencies in countries around the world. At present, BCP manages credit lines for foreign trade transactions, working capital and medium- and long-term investment projects.

In 2011 (based on BCP’s internal report), BCP’s export volumes increased by 19.3% reaching US$19.8 billion (compared to US$16.6 billion in 2010), which represented 43.3% of total Peruvian exports.

Total Peruvian imports were US$ 37.9 billion in 2011, increasing by 26.8% from US$ 29.9 billion in 2010, which was primarily due to higher demand for raw materials and capital goods. BCP’s import letters of credit, collections and transfers amounted to US$12.4 billion in 2011, increasing by 31.9% from US$9.4 billion in 2010, which represented 32.7% of total Peruvian imports.

BCP has a direct presence abroad through its agency in Miami and its branch in Panama. It has access to a wide network of foreign correspondent banks and can offer several internationally competitive products to its customers.

BCP has correspondent banking relationships and uncommitted credit lines with more than 80 banks for foreign trade operations, financing of working capital and medium- and long-term investment projects. At the same time, BCP has been approaching the banking market to fund medium-term needs through the usage of syndicate loans structured by different international banks.

During 2011, Peru had a very active leasing market. Leasing as a way of financing became a more important tool for Peruvian companies over the course of the last year, growing from US$6.4 billion as of December 31, 2010 to US$7.7 billion as of December 31, 2011. BCP has consolidated the leasing activities developed by the bank over several years. BCP ended 2010 with US$2.4 billion outstanding in this product, which represented a 38.8% of the market share in Peru. By the end of 2011, BCP registered a slightly smaller market share, 37.5%, reaching US$2.9 billion in outstanding balances.

Corporate Finance

In 2012, BCP Capital’s corporate finance business structured mid-term transactions totaling US$ 1,660 million. The primary transactions were:

Consolidated Contributions

The following table sets forth the contribution to the consolidated net income attributable to our equity holders by each of our principal subsidiaries:

(1)          Includes Banco de Crédito de Bolivia, which contributed US$20.6 million in 2012, US$22.3 million in 2011 and US$15.8 million in 2010; and Edyficar, which contributed US$36.5 million in 2012, US$26.2 million in 2011 and US$21.5 million in 2010. This amount also includes BCP Colombia, Inversiones BCP Ltda., Inmobiliaria BCP, and Credifondo, Credibolsa and Creditítulos, as of October 2012.

(2)          Includes Prima AFP (which recorded a net income of US$38.2 million in 2012, US$32.4 million in 2011 and US$25.5 million in 2010), BCP Capital (which includes Credifondo, Credibolsa, Creditítulos and BCP Financial Services, for November and December, 2012), Credicorp Securities, Credicorp Investments (which includes IM Trust), Credicorp Ltd. (which mainly includes expenses and the tax withheld in connection with the estimation of the dividends to be distributed to us by our Peruvian subsidiaries (BCP and Grupo Pacífico) and others.

Credicorp was established to create a financial group that would benefit from synergies among the group’s companies and would become a leader within each business market in which the companies operate. In moving steadily toward achieving these strategic goals, we have become a leading financial group. However, we do not operate in a static environment, and the last four years have demonstrated how quickly and dramatically the world can change. Peru’s economic growth slowed significantly in 2009 as a result of the international financial crisis. In response to this, we took steps toward improving our long-term sustainability and worked to position our companies for growth as the Peruvian market continues to evolve. In 2010, Peru’s economy returned to the dynamism it showed in the pre-crisis period, and we continued, and completed in many cases, the implementation of various initiatives that were designed to ensure the sustainability of Credicorp’s business segments.

The Peruvian market offers one of the strongest growth opportunities in South America. In the banking, insurance and pension fund industries, market penetration by service providers remains low. Accordingly, our business plans incorporate strategies that will enable us to reach underserved segments of the Peruvian population and achieve higher returns on our capital. As our businesses expand, it becomes increasingly important for us to maximize efficiencies and control risk. Our strength in these areas is the cornerstone of our strategy to achieve healthy, sustained and profitable growth.

The growth strategies we have adopted for each of our companies include a focus on retail markets. Our strategy provides a launching pad for two points of financial inclusion: our Agente BCP covers the liabilities’ side by promoting banking penetration and providing access to credit, which gives low income sectors the opportunity to improve standards of living and become part of the country’s economic model for growth. Using our collective resources, we are developing information systems that can collect commercial sales information and provide us with the data we need to process scoring models by segment. This will enhance our ability to assess and control risk, as well as cross-sell our products between our business segments. In addition, mobile banking, which is a combined effort of BCP, Movistar and Mastercard, is concentrating on reaching new clients by offering them a transactional platform that introduces them to the financial system through a technology that has become widely used: the mobile phone. There are considerable opportunities to expand these initiatives and their ability to reach underserved segments of the Peruvian population positions us for growth.

Another strategic focus for Credicorp involves the regionalization of Latin American market, which has picked recently increased in relevance due to problem in developed markets. This has been reflected in the creation of the MILA, which we believe provides strong possibilities for growth. The integration of equity trading in Chile, Colombia and Peru has created the largest exchange in Latin America by number of issuers and the second-largest exchange in Latin America by market capitalization after the Brazilian BM&F Bovespa. Credicorp has seized this opportunity by acquiring Correval and IM Trust, which together with BCP Capital reflect our commitment to concretize our regional presence in the investment banking and capital markets sectors. We also continue to make strides toward greater integration of our companies by more extensively sharing our talents and experience.

Banking

The majority of our banking business is carried out through BCP, which is our largest subsidiary, BCP that held 30.4% of the Peruvian market share in loans as of December 31, 2012. A portion of our banking business is also carried out by ASB, which principally serves Peruvian private banking customers through offices in Panama. We conduct banking activities in Bolivia through BCP Bolivia, a full service commercial bank which maintained an 11.2% market share of current loans and a 11.1% market share of total deposits as of December 2012. BCP Bolivia is third with respect to loan market share and fifth with respect to deposit market share in the Bolivian banking system.

Our banking business is organized into (i) wholesale banking activities, which are carried out by BCP’s Wholesale Banking Group, and (ii) retail banking activities, which are carried out by BCP’s Retail Banking Wealth Management Group (RB&WM)

To increase our visibility and raise our market share in the retail banking industry, BCP bought Edyficar, which is a scaled, high-growth and highly profitable microfinance business. Edyficar has a solid risk management strategy and a proven track record in both loan portfolio growth and social impact. Edyficar provides financial services for low-income micro-entrepreneurs and unbanked communities.

We apply uniform credit policies and approval and review procedures, which are based on conservative criteria adopted by BCP, to all of BCP’s subsidiaries. Our Chief Operating Officer (COO) is in charge of setting the general credit policies for our different business areas. These policies are set within the guidelines established by Peruvian financial sector laws and SBS regulations (See “(11) Supervision and Regulation—(ii) BCP”) and the guidelines set forth by our Board of Directors.

We also conduct our banking business through Atlantic Security Bank (ASB), which is a Cayman Islands licensed bank that engages in private banking, asset management and proprietary investment.

Our deposit-taking operations are principally managed by BCP’s RB&WM group and ASB’s private banking group. See “(12) Selected Statistical Information—(iv) Deposits.”

Insurance

We conduct our insurance operations exclusively through Grupo Pacífico and its subsidiaries, which provide a broad range of insurance products. Grupo Pacífico focuses on three business areas, property and casualty insurance through Pacífico Seguros, life and pension insurance through Pacífico Vida, and health care insurance through Pacífico Salud. Grupo Pacífico, like other major Peruvian insurance companies, sells its products both directly and through independent brokers and agents. Directly written policies tend to be for large commercial clients, as well as for life and health insurance business lines.

Pension funds

Credicorp conducts all of its pension fund activities through its private pension fund administrator Prima AFP. During 2012, Credicorpthrough its subsidiary Prima AFP was able to strengthen its position in the market by adjusting its processes and organization to provide high-quality services, with timely and transparent information to its clients.

In early 2012, the pension fund market developed at a stable competitive level. Later in the year the adoption of a new law, the Law Reform the Private Pension, dominated the market. The Law to Reform the Private Pension System establishes a new process for integrating new affiliates into the SPP. See “Item 4. Information on the Company— (B) Business Overview— (11) Supervision and Regulation— (vii) Prima AFP.”

Growth in the Peruvian economy and emerging markets resulted in an increase of Prima AFP’s funds under management. Funds under management grew from US$9.8 billion as of December 2010 to US$9.5 billion as of December 2011 and US$12.0 billion as of December 2012. Prima AFP’s RAM indicator (monthly insurable remuneration), increased from 32.2% in 2011 to 32.4%, achieving (31.6% in 2010). By RAM, Prima AFP has the largest market share in Peru.

Investment Banking

Credicorp’s regional investment banking platform is built mainly around three business units: Asset Management, Sales & Trading and Corporate Finance Investment Banking Business. These platforms are present in each of the companies through which we operate, BCP Capital, Correval and IM Trust (Peru, Chile and Colombia, respectively).

The following chart shows our organizational structure as of December 31, 2012:

The following chart shows our future organizational structure once the regional investment banking platform is consolidated under Credicorp Investments, a subsidiary of Credicorp:

BCP´s Corporate Finance Area is a leading advisor to corporate, middle market and institutional clients in Peru. Our Corporate Finance team is composed of over 25 executives basedBCP Capital

BCP Capital conducts our investment banking business in Peru and was established through the split of an equity block of BCP. This split resulted in a reduction of BCP’s assets, liabilities and net equity in an amount of US$71.2 million, US$18.0 million and US$53.2 million, respectively. Assets transferred included Credibolsa S.A.B., Creditítulos S.T., Credifondos S.A.F.M. and BCP’s investment banking activities. Through each of these businesses, BCP Capital is the largest team of its kinda market leader in the Peruvian marketplace. BCP´s Corporate Finance Area providesinvestment banking segment and it offers a wide range of investment bankingproducts and services to corporate and retail clients.

Correval

Correval is a brokerage firm formed in 1987. Over the last 25 years the Company has retained its leadership in the Colombian brokerage market, with all of its products accounting for almost 12% market share in Colombian brokerage industry over the last four years. Correval has a nationwide presence through its offices in Bogota, Medellin, Cali and Barranquilla. Correval also opened an office in Panama in early 2011.

The firm offers a wide array of products and services, including asset management (mutual and discretionary funds), sales and trading (foreign exchange, fixed income, stock, derivatives and hedging products, e-trading) and corporate finance (M&A and advisory, services, including structured financings, capital raisings, initial public offerings, mergers and acquisitions and corporate restructurings. In 2011,among others).

IM Trust

IM Trust is one of the Corporate Finance Area participatedleading financial corporations in Chile, with over 25 years of experience in the Chilean market. Since 2005, it has placed over US$2,400 million 17 billion in principal amounttransactions in capital markets, advising on complex operations such as M&A and on domestic and international investments. In early 2008, IM Trust expanded operations to Peru and Colombia.

The firm provides services in corporate finance (capital markets and M&A), sales & trading (equity, fixed income, and derivatives), and asset management (investment funds, mutual funds, advisory and mandates), servicing the retail, corporate, institutional and private segments.

Credicorp Securities Inc. (CSI)

CSI is a broker dealer which operates in the state of Florida in the United States and provides access to the global securities markets by providing a wide spectrum of brokerage services.

CSI began operations in March 2003 as an Introducing Broker Dealer (IBD) and Registered Investment Advisor (RIA). Its RIA license was canceled in July 2009, as CSI transferred the functions formerly performed under this license to the Asset Management Division at BCP. The objectives of CSI are to (i) canalize its affiliate’s brokerage activities and those of its customers and products and (ii) new customers into the brokerage business. As an IBD, CSI can open custodial accounts on behalf of its customers only with a clearing broker. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation serves as CSI’s clearing broker

CSI’s core business includes purchasing and selling stocks, fixed income and money markets instruments. Its brokerage services involve corporate debt securities, U.S. Treasury bonds, equities, exchange-listed over-the-counter (OTC) securities, mutual funds (both domestic and international), hedge funds, options and structured transactions, which involved financing through bothproducts. Mutual fund sales are not actively solicited.

CSI also is approved to engage in trading for its own account in fixed income instruments. It is subject to a $100,000 minimum net capital requirement and files a Focus Report on a monthly basis.

BCP’s activities include wholesale banking, retail banking and wealth management and treasury. As of December 31, 2012, the local capital marketconsolidated operations of BCP ranked first among Peruvian banks in terms of total assets (US$35.5 billion), total loans (US$20.0 billion), deposits (US$22.8 billion) and net equity (US$2.8 billion). At the end of 2012, BCP’s loans, on an unconsolidated basis, represented approximately 34.1% of total loans in the Peruvian banking system. BCP’s Corporate Finance team is ranked firstloans represented 33% and 33.6% of total loans in the Peruvian banking system at the end of 2011 local debt capital market league tables having placed over US$780 millionand 2010, respectively. BCP’s deposits represented approximately 37.3% of total deposits in principal amountthe Peruvian banking system (higher than the 34% and 36.3% registered at the end of debt instruments,2011 and 2010, respectively).

As of December 31, 2012, BCP had the largest branch network of any commercial bank in Peru with 365 branches. BCP also operates an agency in Miami and a branch in Panama. In addition, as of December 31, 2012, BCP Bolivia and Edyficar had 41 and 162 offices, respectively, through which accountsthey serve their clients.

As of and for 55%the year ended December 31, 2012, BCP accounted for 87.7% of our total assets, 84.3% of our net income and 65.3% of our net equity. BCP’s operations are supervised and regulated by the local debt capital markets primary offers. The main projects in 2011 included:SBS and the Central Bank.

BCP groups its client base according to the following criteria:

During 2011,The grouping was a result of an analysis which addressed factors beyond the Corporate Finance Area generated incomesimple size and volume of activity for each client, such as clients’ affiliation with other companies or groups, the degree of follow-up required, and their credit ratings.

BCP’s corporate structure consists of a group of local subsidiaries offering specialized financial services, which complement BCP’s commercial banking activities. In addition to its local subsidiaries, BCP has an agency in excess of US$21.5 million from structuring, advisoryMiami, a branch in Panama and issuance fees.a subsidiary in Bolivia.

CashBCP and its principal subsidiaries as of December 31, 2012 are as follows:

BCP’s WBG competes with local and foreign banks. BCP’s traditional long term relationships with medium-sized and large corporate companies provide its WBG with a competitive advantage.

BCP’s WBG maintained a positive trend in loan placements, posting average portfolio levels of US$6,982 million in 2010 (a 18.7% year-over-year increase), US$8,391 million in 2011 (a 20% year-over-year increase) and US$9,225 million in 2012 (a 10% year-over-year increase). It also maintained its leadership in the wholesale banking market with a 39.1% market share in loans. BCP has established longstanding client relationships with virtually all of the major industrial and commercial groups in Peru. The WBG provides its customers with cash management solutions, short- and transactional servicesmedium-term loans in local and foreign currencies, foreign trade-related financing and lease and project financing.

The WBG is divided into the following two divisions:

Net interest income from BCP’s WBG reached US$187.5 million in 2010, US$260 million in 2011 and US$284 million in 2012. Fee income was US$141.5 million in 2010, US$165.6 million in 2011 and US$192.5 million in 2012.

Corporate and International Division (CID)

BCP continues to meet the needs of its corporate clients, assisting them with financial services, cash management solutions and short and medium-term financing through the CID. As a result, BCP’s corporate banking loans grew from US$5,155 million in 2010 to US$5,477 million in 2011 and US$5,870 million in 2012. These increases, coupled with a very low PDL ratio (less than 0.1%), enabled the CID to obtain a net interest and fee income of US$ 217.3 million in 2012, which represents 45.6% of the total net income of the WBG. The CID obtained a net interest and fee income of US$ 204.3 million in 2011 and US$ 151.7 million in 2010.

The moderate pace of the CID’s growth is due to (i) intense competition from foreign banks, which finance their operations at lower costs due primarily to the fact that the BCR has high reserve requirements for foreign currency for banks that operate locally, and (ii) the availability of alternative financing through capital markets. Nevertheless, BCP has an industry leading 46.24% of the market share for loans.

The CID offers a broad range of products and tailors its product offerings to meet each client’s unique requirements. In general, this division is expected to offer high-value-added products and services, particularly cash management services, at competitive prices.

The majority of the CID’s financing is provided to fund capital expenditures and investments, sales, international trade and inventories. The CID also offers medium and long term financing (in almost all cases backed by real guarantees), financial leasing, factoring, domestic collections and nationwide fund transfers.

Guarantees received by this division consist of (i) receivables in the case of sales financing, (ii) warrants or pledges over inventory, in the case of inventory financing and (iii) collateral, in the case of financing for fixed asset acquisitions and improvements to infrastructure.

International Banking Unit

The International Banking Unit focuses on obtaining and providing short-term funding for international trade. Medium-term lines of credit funded by international commercial banks and other countries’ governmental institutions are also provided to clients. In addition, this unit earns fees by confirming guarantees issued by international banks and other fees as a result of the international payment business. The International Banking Unit also promotes international trade activities with its local clients by structuring trade products and services, organizing and sponsoring conferences and advising customers through a wide range of trade products.

Since September 2008, the International Banking Unit has also been supervising our trade back-office unit (International Operations). BCP maintains business relationship with correspondent banks, development banks, multilateral and export credit agencies in countries around the world. At present, BCP manages credit lines for foreign trade transactions, working capital and medium and long-term investment projects.

BCP’s import letters of credit, collections and transfers amounted to US$ 9.4 billion in 2010, US$12.4 billion in 2011 and US$14.3 billion in 2012, which represented 34.0% of total Peruvian imports. The growth in our import letters of credit corresponded with the growth in total Peruvian imports. According to SUNAT, total Peruvian imports grew from US$29.9 billion in 2010, to US$ 37.9 billion in 2011 and US$ 41.9 billion in 2012. This trend was primarily due to higher demand for raw materials and capital goods.

BCP provided foreign trade financing for exports of a volume that reached US$18.1 billion in 2012, a figure that represented 40.1% of total Peruvian exports and that increased from US$ 19.8 billion in 2011 and US$ 16.6 billion in 2010.

BCP has access to a wide network of foreign correspondent banks and can offer several internationally competitive products to its customers. It has correspondent banking relationships and uncommitted credit lines with more than 80 banks for foreign trade operations and financing of working capital as well as medium and long-term investment projects. BCP also has a direct presence abroad through its agency in Miami and its branch in Panama.

During 2012, Peru had a very active leasing market, which increased from US$ 6.4 billion in 2010 to US$7.7 billion in 2011 and US$9.1 billion in 2012. Following this trend, BCP has consolidated its leadership in the leasing business by slightly increasing its market share from 38.8% in 2010 to 37.5% in 2011 and 39.2% in 2012.

Cash Management and Transactional Services Unit

Our Cash managementManagement and transactional services unitTransactional Services Unit is in charge of developing transactional services that handle the exchange of information among and money transfers toamong corporations, midsize companies, institutions and micro-business companies. This unit is responsible for both, the development and marketing of transactional (or “cash management”) services for our corporate and institutional clients. We offer more than 30 products aimed at strengthening ties with clients and assuring their loyalty, as well as reducing costs usingloyalty. Our electronic channels allow us to reduce costs and increasingincrease fee income. Services managed by this unit include collections (automated trade bill collection), automated payments (direct credits(loans to personnel and suppliers’ accounts, reverse factoring and money transfers), electronic office banking, electronic lending solutions and cash management through checking accounts with special features.

During 2011,In 2012, our transactional services continued to be an important contributor to ouraccounted for 15.5% of the BCP’s overall earnings. The monthly average of the number of currentchecking accounts increased by 4% during two consecutive years and fee revenue increased 7% in 2011 and 30.4% in 2012, due to an increase in commissions from our checking accounts. Other sources of income, such as bills of exchange and collection services have increased by 8.6% and 37.1%, respectively, compared to 2010 which not includes the small business as a segment. Fee income from collection services also increased with letters and companies’ collections commissions increasing by 8% and 27%, respectively, with regard to 20102011, due to performance across all market segments. Additionally, the acquisition of new clients, together with the number of established clients in our strong performanceoffice banking service (Telecredito), has generated a growth of 58.7% in the corporate and midsize market. Our strategic decision to offer value to our clients through the implementation of a more efficient service mechanism explained part of this improvement.  In addition, the higher demand by clients for the remote banking service “Telecredito” generated, in terms of number of transactions a growth of 20% compared(compared to 2010.36.3% in 2011). Tax collections also grew 12%.35.1% in 2012 and 12.3% in 2011. We continue to introduce electronic products that will eventually replace the conventional promissory notes. Likewise, the transaction volume generated by reverse factoring increased 10% in 2012 and 16% in 2011.

Middle-Market Division (MMD)

BCP’s MMD provides banking services targeted to medium-sized companies from various economic sectors. The products offered to middle-market clients are similar to those offered to corporate banking clients. The three major types of products are:

BCP has identified several opportunities to engage middle-market companies, particularly in Peru’s manufacturing, wholesale, retail, fishing, agribusiness and construction industries. BCP has created dedicated areas which focus on attending to the needs of these specific economic groups. BCP has a middle-market client portfolio of approximately 6,855 companies, including 1,180 economic groups. Generally, these clients are not listed on any stock exchange; however in certain cases they have accessed capital markets either for bonds or commercial paper. These companies are typically family-controlled but professionally managed, and their financial information is audited.

Since 2009, the MMD has revised its customer segmentation policies. The division includes mature companies that will eventually become part of our corporate segment, traditional mid-size companies and a group of growing small cap companies.

The MMD has continued to make progress toward implementing its strategic goals by:

According to internal reports, net interest income and fee income from the MMD reached US$177.3 million in 2010, US$221.7 million in 2011 and US$259.3 million in 2012. This trend was consistent with the performance of the MMD loan portfolio, which reached US$2,398 million in 2010, US$3,032 million in 2011 and US$3,601 million in 2012. As of December 31, 2012 BCP had a market share of 35% in this segment.

We believe that middle-market companies have benefited from the overall economic improvements in Peru over the past few years. Loan quality problems have been addressed through procedures and organizational changes that have focused on improving the loan approval and credit-risk assessment processes.

Institutional Banking Unit

BCP’s Institutional Banking Unit, which operates within the MMD, serves 1,310 clients throughout Peru. In Lima, a specialized team in wholesale banking serves governmental entities, educational institutions, religious organizations, international bodies, non-governmental organizations, and microfinance institutions. In other provinces, a specialized remote wholesale banking team partners with BCP’s retail banking area to serve clients.

The annual average deposit amount in BCP’s Institutional Banking Unit (Lima and provinces) increased 7% reaching US$2.4 billion in 2012 (compared to 5.9% from the previous year). The Institutional Banking Unit is important because its clients offer great potential for generating fee income and other cross-selling opportunities. BCP’s strategy in this unit is focused on building customer loyalty by offering customized services at competitive rates and providing outstanding service quality. Our institutional banking typically requires remote office banking, collections and automated payroll payment services.

According to BCP’s internal reports, byAt the end of 2011, retail banking-related2012, RB&WM - related loans represented 42%45% of BCP’s total loans, while retail banking-related deposits accounted for 50%60% of BCP’s total deposits. Net income from retail lendingRB&WMlending constituted 37.3%37.8% of BCP’s net income, while income from retail related fees constituted 62.6%62.5% of BCP’s total fee income.

In 2010,2012, the Retail BankingRB&WM Group’s loan volumes grew by 22.3% as comparedincreased to volumesUS$ 9,351 million in 2009, reaching2012from US$ 7,093 million in 2011 and US$5,322 million. In 2011, loan balances reached US$7,108 million which represented a 33.6% increase over 2010’s figure.in 2010. This 31.8% growth wasin 2012 is a result of strong consumersound increases in all lending businesses, which includesinclude home mortgages, installment loans and credit cards, home mortgages and small and micro business loans. With respect to deposits, BCP’s retail banking-relatedRB&WM- related deposits have also shown consistent growth. Deposits grew by 15.9%increased 27.8% in 2010 reaching2012, and totaled US$ 9,06213,342 million (US$ 7,820 million at the endas of 2009), and by 15.2% in 2011, reaching a total ofDecember31, 2012. Deposits totaled US$10,443 million by the endas of the year.December31, 2011 and US$ 9,061 million as of December 31, 2010.

With the segmentation of its retail client base, BCP is able to focus on cross-selling its products and improving per-client profitability. The Retail BankingRB&WM Group has undertaken several projects to improve one-on-one marketing techniques and tools for the sale of its products to all market segments. BCP’s management expects the retail banking businessRB&WM businesses to continue being one of the principal growth areas for BCP’s lending activities.

BCP’s retail bankingRB&WM serves high net worth individuals and small-sized companies with annual sales levels of up to US$6.78 million. BCP’s objective is to establish profitable long-term relationships with its broad client base, using segmentation strategies that satisfy the specific needs of each type of client. BCP’s retail distribution strategy changed at the beginning of 2007, when BCP started using the branch network as the center for all transactional and commercial activities. BCP now has a commercial division, in charge of most direct sales forces and branches, which in turn are organized on a geographic level. Each branch is responsible for servicing and selling products to three customers groups: affluent, small business and consumer. In addition, each branch manager is responsible for overseeing the different channels offered within the branch, such as account managers, customer service representatives and tellers. Telemarketing, mid sizemid-size business banking and real estate developer financing are not managed directly by local branches because of the specialty level and high growth potential associated with these products.

DuringSince 2008, BCP sawhas made an unprecedented investment in infrastructure and human resources to support its “banking the unbanked” market penetration strategy in Peru. As a result, between 20082010 and 2011,2012, BCP experienced substantial growth in its various channels, including 3,4332,926 new customer contact locations (12(33 branches, 598694 ATMs and 2,8232,199 Agentes BCP). Demonstrating its leadership in attracting new customers, BCP now services over four million customersclients with its network of 342365 branch offices, 1,4851,844 ATMs and 4,6745,713 Agentes BCP (these figures do not include the customer contact locations under Edyficar’s management, which we account for separately).

Affluent Banking

AffluentBCP is constantly improving the value proposition it offers to affluent customers are crucial to increase their loyalty and ultimately their profitability. In May 2012, BCP becausecreated a new super affluent segment called BCP Enalta. This segment and the Private Banking segment operate under the Wealth Management Group.

Private Banking is a segment composed of customers that have over US$ 400,000 available for investment. Customers in private banking receive not only local but also global investment advice. Its value plan is composed of (i) high quality standards in client service by expert account managers, (ii) close and personalized service, (iii) special interest rates, and (iv) exclusive branches. Customers in this segment total approximately 3,000.

Customers served by the BCP Enalta segment must have monthly incomes in excess of US$ 10,000 or have at least US$200,000 available for investment. BCP Enalta customers have access to six exclusive branches in Lima, where they may perform financial transactions and obtain personalized advice from investment, insurance and loan experts based on their highrisk profiles and financial needs. BCP Enalta also offers customers: (i) access to exclusive products, (ii) specialized account managers and/or expert phone banking, (iii) preferential service by tellers at branches, and (iv) preferential interest rates on loans. BCP Enalta has approximately 12,000 customers. The Wealth Management Group generates 15% of the RB&WM Group’s revenue, 10% of the RB&WM Group’s loan and deposit volume and their attractive profitability.18% of its deposit volume.

BCP’s mass affluent customers must have a positive credit record and a monthly income of at least US$2,000. They receive a differentiated value plan which includes: (i) access to innovative products, (ii) dedicated customer services channels such as specialized account managers and/or expert phone banking, (iii) preferential service by tellers at the branches and (iv) specialpreferential interest rates on loans. BCP’s affluent customers, who total approximately 181,000, must have a positive credit record and at least US$20,000 in outstanding loans with BCP or a minimum US$40,000 balance in deposits with BCP. Approximately 120,000102,000 of the most profitablemass affluent clients are serviced through specialized account managers responsible for improving per-client profitability and achieving long-term relationships through personalized service, cross-selling and share of wallet strategies. Account managers are also responsible for new customer acquisition, particularly through mortgage loans.acquisition. BCP has approximately 206,000 mass affluent customers. The mass affluent banking segment is very profitable, generating 33%generates 25% of the retail banking group’sRB&WM Group’s revenue while managing 4% of the RB&WM Group’s total customer base, 40%30% of the retail group’sits loan volume and 33%23% of its deposit volume.

Small Business Banking

BCP’s Small Business Banking AreaSegment accounts for 460,000approximately514,000 clients. Customers are divided into two groups with different business models, services levels, and product access. The first group is top-end small business banking, which serves approximately 12,00013,200 clients with debts between US$0.2 million and US$1.21.5 million and/or annual sales between US$0.5 million and US$6.78 million. The next group of 448,000 smallserves approximately 500,700small business clients, haswhich have debts up to $0.2 million and/or annual sales up to US$0.5 million.

According to BCP’s internal reports, the Small Business Banking loan portfolio grew from US$1,546 million to US$1,9841,707 million in 2010 to US$2,310 million in 2011, and by the end of 20112012 the loan portfolio was US$2,7443,092 million. In terms of deposits, this group increased deposits from US$1,637 million in 2009 to US$1,860 million in 2010 and then to US$1,885 million in 2011 and US$2,237 million by the end of 2011.2012.

Through Edyficar, BCP also serves the microfinance segment,market, and as of December 31, 2011,2012, it registered 356,099433,406 clients with a total loan portfolio equivalent to US$507750 million, which represented an increase of 42%48% compared to the level registered at the end of 2010.2011. Comparing year end 2010 to 2011, loan balances also grew 47% from US$345 million to US$ 507 million. As of December 31, 2011,2012, Edyficar had a client market share of 11.2%12%, making it second in terms of market shareloans within the microfinance segment. The aggregate market share of Edyficar and BCP in the microfinance segment totaled 21.4%23.3% at the end of 2011,2012, and combined, they have the highest market share in the microfinance segment (Micro-Finance is(BCP’s micro-finance operations are part of the Small Business Segment).

Consumer Banking

Our Consumer Banking Area is in charge of developing strategies for the retail customers who are not included in affluent banking or small business banking. Its customer base consists of approximately 3.94.1 million medium to low income individuals. Consumer Banking focuses on customers who receive their payroll through BCP (which represent slightly more than 11.1 million clients). Its strategies vary from basic acquisition of new accounts for wage-earners with special terms regarding fees and interest rates, to more sophisticated, aggressive cross-sell and retention programs that expand benefits to non-banking products (i.e., access to discounted products) and access to payroll advances. BCP has continued to excel in expanding its debit card as a form of payment, maintaining more than half of the Peruvian market share in withdrawals and payments with debit cards, which is a year-to-year increase of more than 674,000 cards. BCP concluded 2011 with more than 3.9 million cards.

Mortgage Lending

As of December 31, 2011,2012, BCP was the largest mortgage lender in Peru with a market share of 34.01%33.7% of total mortgage loans in the Peruvian banking system. This was largely the result of BCP’s extensive marketing campaigns and its improvements in the quality of procedures for extending credit and establishing guarantees.

BCP expects the mortgage lending business to continue to grow because of:

BCP had US$2,4523,182 million in outstanding mortgage loans as of December 31, 20112012 (as compared to US$1,9052,530 million at year-end 20102011 and US$1,5712,012 million at year-end 2009)2010).

All of our mortgage-financing programs are available to customers with minimum monthly income of US$400. TheIn the past, the Peruvian government sponsored a home ownership program known as the MiVivienda program, awhich provided assistance to purchasers of homes valued at up to US$60,000. Under the program, supported by government resources, placed a limit of US$60,000 on the value of the house to be purchased. BCP will financefinanced up to 90% of the appraised value of a property (in either U.S. Dollars or in local currency) where monthly mortgage payments dodid not exceed 30% of the client’s stable net income. The maximum maturity of the mortgage loans BCP offers isoffered under the program was 25 years, in either U.S. Dollars or in local currency. Within the mortgage lending business, in 2011 BCP stopped offering variable and LIBOR-based interest rates and offered fixed interest rates on home mortgage loans denominated in both U.S. Dollars and Nuevos Soles. BCP’s mortgage portfolio is predominantly fixed rate and U.S. Dollar-denominated.years.

In May 2006, the original MiVivienda program was terminated. However, local banks (with governmentalgovernment approval) launched a similar project, known as MiVivienda2, to which proprietary funds contribute. In addition, in March 2007, BCP created a new program financed by the government called Mi Hogar, which targeted people with a lower income profile. The conditions of the new program are almost identical to those of the first MiVivienda program, except that all financing is in local currency. In June 2009, the MiVivienda administration decided to re-launch its newPeruvian government re-launched the MiVivienda program with the objective of financing mortgages between US$17,000 and US$60,000 using government funds (the government offers guarantees to the lending bank or financial institution through Corporación Financiera de Desarrollo S.A., COFIDE). Simultaneously, they re-launched their product, Techo Propio, to finance mortgages between US$7,000 and US$17,000. In both cases, theBoth programs are intended to develop socialaffordable housing in the country. In 2011,2012, nearly 8,8769,926 MiVivienda loans were sold, 31%33.6% of which were sold through BCP.

In 2011, BCP stopped offering variable and LIBOR-based home mortgages. BCP now only offers fixed interest rates on home mortgage loans denominated in both U.S. Dollars and Nuevos Soles. BCP’s main objectivemortgage portfolio is to establish long-term profitable relationships with its clients, by tailoring its productspredominantly fixed rate and services to satisfy the specific needs of each segment.U.S. Dollar-denominated.

As of December 31, 2011, mortgages2012, mortgage loans in the Peruvian banking systems totaled approximately US$ 7,1409,432 million, which represented 14.9%representing 14.8% of total loans ofin the Peruvian banking system and only 4.04% as a percentage4.8% of the Peruvian GDP. In the caseComparatively, as of Credicorp, mortgagesDecember 31, 2012, mortgage loans accounted for 14.06%16.4% of itsCredicorp’s total loan portfolio, andwith an average LTV (loan to value)(loan-to-value) of 61%66% and past-due-loan ratio of 1.3%.The Company, through. Through its subsidiary BCP, Credicorp has increased lending to lower socio-economic segments of the population in Peru through programs sponsored by the government (Mi Vivienda and Mi Hogar). Mortgage loans to this sector represent approximately 11.6%13.9% of Credicorp’s total mortgage loans and 1.82%1.53% of total loans. The Company’s total portfolio also includes mortgage loans granted in Bolivia, which represent 1% of its total loans withand have an average LTV of 57.9%55.4%.

The real estate markets in Peru andhave been more active than markets in Bolivia have grown in recent years, as a result of the shortage of housing in both countries and as a result,continued growth in GDP per capita. Along with this growth, Credicorp has experienced an increase in the volume of mortgage loans it grants per year. Mortgage loans are associated with low losses because of their high LTV, and they have the added benefit of generating opportunities for cross selling other banking products, which has had a positive impact on Credicorp’s results of operations because of the increase in volume of loans granted per year, the cross-selling that the product allows, and the low expected losses considering the high LTV of the products.operations.

Consumer Lending (Credit Cards and Installment Loans)

Consumer lending, credit cards and installment loans have grown significantly as improving economic conditions have led to increased consumer spending.spending in Peru. BCP expects the strong demand for these products to continue. In addition to interest income, BCP derives fee income from customer application, and maintenance, retailer transactions, andtransaction merchant processing, finance and credit card penalty charges on credit cards.fees.

Peru’s economic growth has had a major impact on the consumer credit market, which grew by a total of 30% during 2008, 7% during 2009, 15% in 2010, 22% in 2011 and 36%15% in 2011.2012. The Peruvian national outstanding balance of consumer credit monthly average balanceloans (monthly average) in Peru is slightly under US$2,073 million,12 billion, consisting of US$748 million4.5 billion in credit card loans and US$1,269 million7.3 billion in installment loans. BCP’s market share in consumer lending has consistently increased since 20072010, growing from 17.9%19.6% to 18.7%.21.8% by year-end 2012. This growth in consumer lending was achieved while maintaining a PDL ratio of accounts delinquent (for over 30 days) of below 4%5%.

Between 2007During 2010 and 2008, installment loans experienced an unprecedented growth of US$211 million in outstanding balances, a 43% increase. During 2009 and 20102011 installment loans grew another 16%12% and 17%27%, respectively. In 2011,2012, these loans grew by another 35%23%. This result was due, in part, to a strategic change by BCP, which was designed to broaden its customer base. In 2007, customers with a monthly gross income of less than US$600 represented less than 5% of installment loan sales (by number of credits), while in 2011 they represented 50% of all new installment loans sales (by number of credits), which represented 20% of the volume sold.

In the credit card business, BCP continued to apply segmented strategies. BCP continues to offer value to its high-end customers through partnerships with the airline LAN and with Primax, a related chain of gas stations. These programs, coupled with BCP’s own travel program, enabled itBCP to reach record levels, both in point generationpoints that clients gained for using their credit cards and point usage (exchanges).in points that clients spent to obtain products or services available under loyalty plans. To attract customers in the lower income segment, BCP worked onis streamlining its risk assessment and card delivery processprocesses and generating partnerships with other retailers.

In 2011, Retail Bankingthe RB&WM Group launched a new product called Movistar BCP MasterCard Credit Card, in partnership with Movistar, a global leader in the telecom business, with the intention of strengtheningbusiness. The product is designed to strengthen BCP’s position in the lowerPeru’s low income segmentmarket and issuing forit will be the first time MasterCard credit cards. This complementscard offered by BCP. In addition, the Movistar BCP MasterCard Credit Card will complement our existing AMEX and VISA offer.products.

BCP has been continuously improving its credit monitoring systems and optimizing its scoring models, which include, among others, behavior, payments and income forecasting. As a result, BCP has achieved aan increase of over US$58340 million increase in outstanding balances in 2008 and US$97 million in 2009.form credit cards from December 31, 2010 through December 31, 2012. According to BCP’s internal records, the number of active credit cards has constantly increased from 325,000 in 2006 to 387,000 in 2007 to 430,000 in 2008, to 446,000 in 2009, to 580,000510,000 in 2010, to 763,000 in 2011 and to 750,000910,000 in 2011. In addition, annual purchases have increased from US$592 million in 2006 to US$868 million in 2007, to US$1,131 million in 2008, US$1,203 million in 2009, US$1,525 million in 2010 and US$2,100 million in 2011.2012.

In addition, BCP is also the largest shareholderhas developed sales capacities in alternative channels, such as sales through telephone contact centers, which now represent 40% of VISANETtotal credit card sales (compared to 23% in Peru, holding approximately 35.22% of its total shares. The number of VISANET electronic payment terminals grew to approximately 70,000 in 2011, as compared to 2,816 in 2006.2010).

In addition to BCP’s Wholesale and Retail Banking operations, BCP operates an Asset Management Group, which currently is the largest capital markets and brokerage distribution system in Peru. The principal activities of the Asset Management Group include, investment advisory, brokerage, mutual funds, custody, trust and research.

BCP’s products are distributed through its subsidiaries and branches. BCP’s close relationship and coordination with its subsidiaries has established BCP as the market leader in the capital markets business in Peru.

Credibolsa is BCP’s brokerage subsidiary through which BCP offers a wide variety of equity and fixed-income products and services as well as research. Credibolsa’s activities include the structuring and placement of primary market issues and the execution and trading of secondary market transactions.

Credifondo S.A, Sociedad Administradora de Fondos, or Credifondo is BCP’s mutual fund subsidiary, which offers a variety of investment products and services. Mutual funds offered by Credifondo include short/long term, U.S. Dollar and local currency fixed income funds, equity funds and mixed funds (fixed income plus equity according to different risk profiles). It is the largest mutual fund manager in Peru, according to data published by theSuperintendencia de Mercado de Valores (SMVformerly CONASEV). As of December 31, 2011, Credifondo’s assets under management (AuMs) totaled US$2,131 million and represented 42.11% Peruvian market share. Credifondo manages ten separate funds, with a total of 81,694 participants, compared to 92,626 in 2010. Funds are segmented according to risk profile and invest primarily in Peruvian equities, U.S. Dollar-denominated bonds, Nuevo Sol-denominated bonds and U.S. Dollar-denominated short-term securities. The decrease in the number of participants was due to the political uncertainty that Peru experienced as a result of the 2011 presidential election. Credifondo’s management expects to increase its product offering during 2012 by launching new funds that will invest in securities considered under the MILA Agreement (Mercado Integrado Latinoamericano) in order to deliver a more competitive value proposition to its clients.

Creditítulos is BCP’s asset securitization subsidiary, through which BCP offers local securitization structuring to corporate entities.

BCP held US$31.8 billion in securities, as of December 31, 2011. BCP provides custody services that include physical and electronic custody of securities and the payment of dividends and interest. Our most important clients are Peruvian institutions that invest in domestic and foreign markets, as well as international investors that have chosen our custody services for their domestic investments.

Trading and Brokerage Services

In 2011, the Peruvian capital markets recovered strongly after the international financial crisis. The Lima Stock Exchange General Index (IGBVL) experienced a decrease of 16.69% in 2011.

Credibolsa maintained its leadership position in the Lima Stock Exchange with a 28.2% market share as a result of a trading volume that reached US$4,392 million in 2011. Credibolsa was also the number one stock broker for initial offerings (in terms of transaction principal volume) issuing a total of S/. 789 million and US$494 million in fixed income securities and attaining a market share of 54.9%.

BCP’s management believes that Credibolsa will continue expanding its business based on its ability to provide strategic advice to clients while offering various products that meet their needs. Furthermore, BCP’s wholesale banking marketing represents an important strength that allows Credibolsa reach leading companies in the local market, while BCP’s branch network helps to expand Credibolsa’s business in the retail segment.

Treasury, Foreign Exchange, Derivatives and Proprietary Trading

BCP’s Treasury and Foreign Exchange Groups are active participants in money market and foreign exchange trading. These groups manage BCP’s foreign exchange positions and reserves and are also involved in analyzing liquidity and other asset/liability matters. The trading desk plays an important role in short-term money markets denominated in Nuevos Soles and in foreignother currencies. It has also been active in the auctions of certificates of deposit by Peru’s central bank as well as in financings through certificates of deposit, interbank transactions and guaranteed negotiable notes, among other instruments.

BCP’s derivative group serveshelps companies, ranging from SME to large corporations, inhedge their needs to hedge market risks. This group offers forwards, FX options, interest rate swaps, cross currency swaps as well as tailor-made derivatives for its clients. BCP’s strong balance sheet and experienced professionals allowThe group also offers Overnight Indexed Swap (OIS) in local currency for local institutional clients. In addition to its local presence, the derivative group to provide not only innovative hedging solutions but also competitive pricing to its clients.has a regional presence, serving clients in the Andean region. BCP’s derivative businessgroup is closely supervised by theBCP’s treasury risk unit, which includes professionals trained in best risk practices in the international markets. This allows BCP to minimize risk and provide competitive prices to its clients.

Since 2007, BCP has adheredadheres to international best practices in terms of cash management. In 2007, BCP created the Assets and Liabilities Management Service (or ALM) which is responsible for managing its balance sheet under the Asset and Liabilities Committee (or ALCO) oversight. ALM is responsible for managing BCP’s balance sheet and for accepting reasonable interest rate and liquidity risks through management of the short- and long-term transfer rates.

BCP’s proprietary trading consists of trading and short-term investments in securities, which includes instruments from various countries. These short-term investments are primarily made to facilitate itsBCP’s treasury management and corporate finance efforts. This has become an increasingly important part

Additionally, as of BCP’s business, as BCP seeks returns on excess liquidity pending improved lending conditions.December 31, 2012, investments available-for-sale and held-to-maturity totaled US$7,671 million, which represented 18.8% of Credicorp’s total assets. Approximately US$4,207 million are financial instruments rated in Peru, of which nearly 70% are instruments from the Peruvian Central Bank (the Peruvian Government’s current rating is BBB in both domestic and foreign currency, according to Moody’s) and approximately 16% have local ratings equal to or above A-. Approximately US$3,464 million of Credicorp’s investments available-for-sale and held-to-maturity are financial instruments rated abroad, of which 74.7% hold international ratings equal to or above BBB-. Approximately 68.0% of Credicorp’s total investments available-for-sale and held-to maturity are exposed to Peru country risk; and 11.8% are exposed to United States country risk.

Lending Policies and Procedures

The Bank has adopted a risk appetite framework and established objective metrics and thresholds to periodically monitor the Bank´s evolving risk profile. The framework was approved by the Board of Directors, and will be managed and monitored by the Risk Management unitUnit within the Bank’s Central Risk Management division.Group. The adoption of a risk appetite framework representsreflects the Bank´s guiding commitment to alignaligning its forward-looking business strategy with its corporate risk vision.

BCP’s uniform credit policies and approval and review procedures are based upon conservative criteria and are uniformly applied to all of its subsidiaries. These policies are administered in accordance with guidelines established by Peruvian financial sector laws and SBS regulations. (See “—(11) Supervision and Regulation—(ii) BCP,” and the guidelines set forth by our board of directors.)

BCP’s credit approval process is based primarily on thean evaluation of each borrower’s repayment capacity and commercial and banking references. BCP determines a corporate borrower’s repayment capacity by analyzing the historical and projected financial condition of the company and of the industry in which it operates. Other important factors that BCP analyzes include the company’s current management, banking references, past experiences in similar transactions, and the quality of any collateral to be provided.

For the evaluation of BCP’s corporate borrowers, credit officers analyze the client’s ability to repay obligations, determine the probability of default of the client using an internal risk rating model, and define the maximum credit exposure that BCP wants to hold with the client.

BCP’s individual and small business borrowers are evaluated taking into accountby considering the client’s repayment capacity, for repayment, a documented set of policies (including, among other issues, the client’s financial track record), and, in most cases, credit scores, which assign loan-loss probabilities relatedrelative to the expected return of each market segment. In BCP, about 80% of credit cardcredit-card and consumer loanconsumer-loan application decisions are made bythrough automatic means. The complement, mortgageMortgage and small business loan applications decisions are made by credit officers who use credit scores and profitability models as an inputinputs for their evaluations and report to a centralized unit.

SuccessOur success in small business and personal lending areas depends largely on BCP’s ability to obtain reliable credit information about prospective borrowers. The SBS has an extensive credit bureau which has expanded its credit exposure database service to cover businesses orand individuals withthat have borrowed any amount borrowedamounts from Peruvian financial institutions. This database includes information on the loan risk category in which the borrowers are classified:classifications for each borrower: “Normal,” “Potential Problem,” “Substandard,” “Doubtful” and “Loss.”

BCP has a strictly enforced policy with respect tothat limits the lending authority of its loan officers. It also has procedures to ensure that these limits are adhered to before a loan is disbursed. Under BCP’s credit approval process, the lending authority for middle market, small business, and personal loans is centralized into a specialized credit risk analysis area, whosewhich is operated by officers that have been grantedspecific lending limits. ToIn addition to the controls built into the loan approval workflow systems, the credit department and BCP’s internal auditors regularly examine credit approvals to ensure that loan officers and credit analysis officers are complying with lending policies, the credit department and BCP’s internal auditors regularly examine credit approvals, in addition to the controls built into the loan approval workflow systems.policies.

The following table briefly summarizes BCP’s policy on lending limits for loan officers and credit risk analysis officers. Requests for credit facilities in excess of the limits set forth below are reviewed by BCP’s general manager,COO, executive committee or, if the amount of the proposed facility is sufficiently large, board of directors.