Banco de Crédito del Perú: Information from Answers.com Mobile

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Key Dates
1888: Banco Italiano, the predecessor of Banco de Crédito del Perú (BCP), is founded.
1909: The bank's holdings include four branches and two insurance companies.
1920s: Banco Italiano has become Peru's largest private bank.
1942: With World War II underway, the bank changes its name to Banco de Crédito del Perú.
1958: BCP moves into new headquarters in central Lima.
1979: The Romero family group takes control of BCP.
1993: BCP acquires control of Banco Popular de Bolivia.
1995: BCP becomes a subsidiary of Bermuda-based Credicorp Ltd.
2002: BCP purchases a competitor, Banco Santander Hispano-Perú.

Banco de Crédito del Perú

Type: Wholly Owned Subsidiary of Credicorp Ltd.
Address: Calle Centenario 158, Lima, 12, Peru
Telephone: (51 1) 313-2000
Fax: (51 1) 313-2353
Web: http://www.viabcp.com
Employees: 10,771
Total Assets: PEN 33.71 billion ($10.55 billion) (2006)
Founded: 1888
NAIC: 522110 Commercial Banking; 522210 Credit Card Issuing; 522291 Consumer Lending; 523110 Investment Banking and Securities Dealing; 523120 Securities Brokerage; 523920 Portfolio Management; 523930 Investment Advice; 523991 Trust, Fiduciary and Custody Activities
SIC: 6021 National Commercial Banks; 6022 State Commercial Banks; 6029 Commercial Banks Nec; 6081 Foreign Banks - Branches & Agencies; 6141 Personal Credit Institutions; 6211 Security Brokers & Dealers; 6282 Investment Advice; 6091 Nondeposit Trust Facilities; 6733 Trusts Nec

Banco de Crédito del Perú (BCP) is Peru's largest commercial bank. Unusually for contemporary Latin America, where banking is dominated by outside financial institutions, it remains Peruvian-owned. While primarily commercial in focus, its activities include investment and retail banking. It ranks first among Peruvian banks in total assets, total loans, deposits, and shareholders' equity, and it has the largest branch network of any commercial bank in Peru. As a full service bank, it offers such products to its customers as custody and trust, research, advice, brokerage, and asset management. BCP is the largest unit in Credicorp Ltd., the Bermuda-based holding company that is Peru's largest financial services corporation.

Banco Italiano: 1888-1942

BCP was founded in 1888 as Banco Italiano by Italian citizens residing in Lima and Callao (Lima's port); the company had seven employees by the following year. The fledgling bank financed small Italian-owned ventures in Peru, particularly food businesses. By 1909 it had four branches, a mortgage section, two insurance companies, and other subsidiaries. The bank was the first in Peru to provide short-term loans, extending them in 1918 to cotton growers against the year's crop. In the 1920s it became Peru's leading bank (other than the central bank). By the end of 1940 the bank was in 43 cities besides Lima, and there were 59 customer offices.

Originally the directors of Banco Italiano were almost always merchants, but by the 1930s a mix of agriculturists and ranchers, merchants, industrialists, financiers, and property holders were on the board. Among them were Luis Nicolini, member of a family that remains an economic power in Peru, and Federico Milne, who with Nicolini was owner of the major processor of local grains.

With World War II underway and Italy allied with Germany, Peru (likely prodded by the United States) grew concerned about Banco Italiano's perceived Axis ties, and legislation adopted in 1941 forced it to change its name to Banco de Crédito del Perú the following year.

Continuing Under Italian Control: 1942-79

Although bearing a new name, BCP remained controlled by the Banca Comerciale Italiana, acting through a French subsidiary, Banque Sudameris et Italianne pour l'Amérique de Sud (renamed Banque Sudameris in 1978). Although BCP's chairman was a Peruvian, the general director and the most important managers were Italian. BCP built a new headquarters in central Lima in 1958 and had 123 offices two years later.

The next major event in the history of Banco de Crédito del Perú was a result of the military coup of 1968, which brought to power in Peru a group of intensely nationalistic army officers. A decree aimed concretely at BCP established a ceiling of one-third of the commercial banking sector that any single bank could hold, in terms of total obligations on reserve in national money. The military also looked with suspicion on the domination of BCP by Banque Sudameris et Italianne, which held 48 percent of the shares. This participation fell to 20 percent in 1971, when a decree limited shareholding in a Peruvian company by foreign enterprises to one-fifth of the stock. Nevertheless, Italians continued to run the bank until nearly the end of the decade.

The end of Italian dominance in Banco de Crédito's affairs was largely the work of the Romero group. Its 19th century founder, Calixto Santos Romero y Hernández, left Spain at the age of 14 and came to Peru after arriving successively in Cuba, Bolivia, and Chile. He established C. Romero y Cía., a commercial enterprise, in Piura in 1886. His chief business at first was the export of Panama hats. Financed by cotton growers, Romero next established a ginning business. By 1922 the Romeros were cotton growers themselves, often taking control of property when loans by them could not be repaid. By 1940 the family was a major power whose holdings included a rice mill and enterprises turning out a variety of other foodstuffs, textiles, hardware, and general machinery. The Romeros also sold imported cars and trucks.

The Romero family group, with others, founded Banco Continental in 1951 and was its chief shareholder until 1964, when Chase Manhattan Bank purchased majority control. Banco Continental was expropriated by the military government in 1970. By this time, however, the Romeros, who had held shares in Banco Italiano since 1918, had set their sights on BCP. Dionisio Romero Seminario, a grandson of Calixto, joined the board of directors in 1966. During the next two years BCP acquired two smaller banks, Banco Gibson S.A. and Banco Unión.

Under the Romero Family Group: 1979-90

The Romeros, with their allies, held about one-third of BCP's shares in 1979, when they wrested control of the bank from the Italians and made Dionisio Romero Seminario the president, or chairman, of the board. The Romero family, and allied family business groups, wanted credits from the bank to finance imports of raw materials for industrial production or to finance sales of the products that their enterprises offered to consumers. The Romeros' chief allies were the Brescia, Ruffo, Nicolini, and Luis Barchero families.

Sudameris sold the majority of its shares in Banco de Crédito in 1984 to Uebersee Bank AG, which held 13.6 percent of the stock in 1987. The Romero family group held 14.14 percent. Sudameris still had 4.86 percent. Some 6,225 smaller shareholders held 38 percent. The BCP of the 1980s was, among other things, a merchant bank--that is, one that made investments on its own account--with many holdings in real estate and manufacturing firms. It built a new $40 million headquarters about 12 miles from central Lima; although only eight stories high, the building was clad in black and white marble and blue crystal glass imported from Europe. There were two branches abroad: in New York City and Nassau, Bahamas. The bank also had $350 million in deposits in Atlantic Security Bank and Atlantic Security Financial Services, both of them located in the Cayman Islands.

The 1980s were a period of great political and economic distress in Peru. The nation's financial institutions, already mainly under state control, became even more so as the government tried to deal with its debts and runaway inflation by nationalizing even more banks. By 1987 state institutions held 84 percent of financial assets and nongovernment commercial banks only 11 percent. Of the latter, BCP remained by far the biggest, with 45 percent of the total assets in this shrinking sector. When the government of President Alan García attempted to nationalize BCP that year, the majority shareholders forestalled the action by selling a controlling interest to the employees and transferring management to them. After market-friendly Alberto Fujimori assumed the presidency in 1990, the Romeros again reestablished their holding and direction of the bank.

One bright spot in the dismal picture during this period was Banco de Crédito's leasing contracts with businesses seeking to purchase buildings, vehicles, or equipment. These transactions remained free of government regulation and were more profitable than conventional loans. BCP's finance company was the nation's leading lessor. In 1988 the bank connected almost all its offices to a central computer in Lima and installed an extensive network of ATMs.

A Liberalized Operating Climate: 1990-2000

Under Fujimori, the economic climate changed markedly in the early 1990s. Two of Banco de Crédito's main competitors were privatized, and foreign financial institutions began buying Peruvian banks. In the liberalized business climate, corporations were able to find alternative means of financing. Accordingly, Peruvian banks, notorious for rude treatment of individual customers and open for as few as two and a half hours per working day, displayed new interest in retail banking, offering such products as mortgages, personal loans, guaranteed checks, automatic tellers, credit cards, and electronically linked branch banking. BCP joined in this effort but remained more cautious than others in extending personal loans, despite the high margin of profit, for fear of default.

During the early 1990s Banco de Crédito established a brokerage and securities management subsidiary named Credibolsa Sociedad Agento de Bolsa S.A. and a pension fund management subsidiary called Inversiones Crédito del Perú that took a 20 percent stake in the pension fund AFP Unión. In 1993 BCP acquired a majority share in Banco Popular de Bolivia, that nation's second largest lender, renaming it Banco de Crédito de Bolivia. The following year BCP established Credifondo S.A. Sociedad de Administradora de Fondo, a subsidiary dedicated to the promotion of mutual funds.

Banco de Crédito itself became a subsidiary in 1995, when its management established the Credicorp holding company. Although Credicorp was registered in Bermuda and listed on the New York (as well as Lima) Stock Exchange, its headquarters remained in Lima. In 1995 or 1996 BCP established Crédito Leasing S.A. for financial leasing products. The bank's subsidiaries in 1998, besides Credibolsa, Credifondo, and Crédito Leasing, included Solución Financiera de Crédito del Perú S.A., a consumer finance company.

BCP itself had 29 percent of deposits and 23 percent of all assets in Peru's banking system in 1998, more than any other bank. Lending to big corporations was, and had long been, the source of its strength. It also sought business from small and medium sized companies and to extend its retail banking activities, but it was not willing to make loans to customers of dubious creditworthiness. The bank invested heavily in central risk evaluation systems so that loans to individual customers would be approved only after being thoroughly analyzed by objective data. Even so, BCP experienced a deterioration in its loan portfolio between 1997 and 2000, a period in which its net income fell by more than two-thirds.

BCP in the Early 21st Century

By 2001, however, a resurgent Banco de Crédito was considered sound enough to warrant the highest investment-grade rating in issuing $100 million of seven-year bonds. The key to this rating, far above that of the Peru government's own, was BCP's leading share in remittances made by Peruvians abroad. BCP agreed to divert these funds into a trust account.

Banco de Crédito, in 2002, purchased Banco Santander Hispano-Perú for $50 million. In 2005 it paid $353.8 million for the loan portfolio of Bank Boston N.A. and the loan portfolio of Peruvian nationals with Fleet Boston N.A. BCP had survived Peru's political and economic troubles and remained in Peruvian hands, while its two main rivals, Banco Wiese and Banco Continental, had been purchased by foreign financial companies. It accounted, in 2006, for 82.2 percent of Credicorp's total assets, 69.7 percent of Credicorp's total revenues that year, and 88.3 percent of the holding company's net income, which came to a record $247.8 million and constituted a 28.6 percent return on equity.

Besides leading all other Peruvian banks in loans, assets, and deposits, Banco de Crédito was the largest mortgage lender in Peru and, in addition, had issued 378,677 credit cards. It also had the largest commercial bank network in Peru, with 237 offices, and was operating a branch in Panama and an agency in Coral Gables, Florida. Dionisio Romero was chairman and chief executive officer of both Credicorp and BCP. Luis Nicolini was deputy chairman. While the Romero family remained the chief shareholder, pension funds were collectively more important, holding at least 25 percent of Credicorp's shares. Credicorp owned 86 percent of BCP's shares in 2005.

Much of the credit for Banco de Crédito's continued dominance of commercial banking in Peru went to Raimundo Morales, its general manager from 1990 to 2007. Under his guidance, by 2003 BCP's assets had grown more than twelvefold. Interviewed for LatinFinance's 15th anniversary issue, Morales, who saw the bank's future as a regional bank, said, "Eventually we have to be present in different markets. I think we will keep seeing more of a globalized world as economies keep opening up and financial and trade flows increase with free trade agreements in the Americas. Many of the countries have dollar-based economies and eventually we will end up with one currency in the Americas."

Principal Subsidiaries

Banco de Crédito de Bolivia (Bolivia; 96%); Credibolsa Sociedad Agento de Bolsa S.A.; Credifondo S.A. Sociedad Administradora de Fondo; Crédito Leasing S.A.

Principal Operating Units

Capital Markets Group; Retail Banking Group; Service Banking Group; Wholesale Banking Group.

Principal Competitors

Banco Internacional del Perú S.A.A.; BBVA Banco Continental; Scotiabank Perú S.A.A.