Scotiabank Perú A : INFORMES DE CLASIFICACIÓN DE RIESGO.

Scotiabank Peru S.A.A.

Key Rating Drivers

Parent Support: Scotiabank Peru S.A.A.'s (SBP) Issuer Default Ratings (IDRs) and Shareholder Support Rating (SSR) are based on expected support it would receive from its parent, The Bank of Nova Scotia (BNS; AA-/Stable), if needed. Fitch Ratings believes the parent's propensity to support SBP is high given the strategic role that this subsidiary plays in its regional goals, as well as the significant management and operational integration. According to agency methodology, the shareholder support assessment (not considering any sovereign-related restrictions) would imply a difference of -1 notch to SBP from its parent BNS. When applying the Peruvian Country Ceiling's (currently at A-) limitation to the subsidiary's rating, SBP's SSR reaches 'a-'. Therefore, this results in SBP's 'A-'Long-Term Foreign Currency IDR.

SBP's 'A-' Local Currency IDR is two notches above Peru's 'BBB' Local Currency IDR and at the same level of Peru's 'A-' Country Ceiling, consistent with Fitch's criteria. SBP's 'A-'Long-Term Foreign Currency IDR is capped by the Country Ceiling due to transfer and convertibility risks.

Challenging Operating Environment (OE): Fitch expects the banks' financial performance will stabilize after downside risks observed in 2023. Fitch believes the Peruvian banking system has been resilient, despite political instability, weather-related events and continued negative impacts from slow global growth. Expected economic growth of 1.9% in 2024 will be mostly a rebound from the low-base effect in 2023.

Headwinds will remain for private investment and consumption, in part due to political and social unrest. This economic downside could result in some deterioration of asset quality, but the banking system's performance will remain solid and stable. The sound bank capitalization and liquidity levels are expected to absorb any downside risks in 2024.

Consolidated Business Profile: SBP's 'bbb' Viability Rating (VR) is in line with the implied VR, which is underpinned by its solid business profile, sound market position and adequate capitalization. The bank is the third-largest Peruvian universal bank, with a market share of approximately 13.8% by assets and 12.6% by deposits as of YE 2023.

The bank's consolidated business profile has translated into a stable and solid financial profile through the cycle, with an average of total operating income between 2023 and 2019 of USD1.2 billion, similar to its closest foreign peer. SBP's business model has benefited from flight to quality under stressed environments.

Stable Asset Quality: SBP's 90+ days past due loans (PDL) ratio deteriorated slightly in 2023, given the systemic deterioration of the consumer portfolio and the gross portfolio reduction. Fitch expects asset quality to gradually improve in the near term due to the bank's prudent approach and conservative risk preference for secured portfolios, which should mitigate the impact of a still challenging OE in 2024. Fitch expects SBP's 90+ days PDL ratio to hover around 3.5% to 3.7% at YE 24 (YE23: 3.8%), and these loans are not expected to be a relevant source of risk over the rating horizon, given the bank resilience through economic cycles and its good record of managing credit risk.

Challenging OE impact Profitability: SBP's profitability is underpinned by its risk appetite adjustments, good efficiency levels and solid business generation amid local political uncertainty. The ratio of operating profit-to-risk-weighted assets (RWAs) ratio declined to 1.4% at YE23 from 2.9% at YE22. However, it remained resilient in the face of a 7.6% reduction in gross loans and pressure on net interest margins (NIMs).

In addition, provisioning expenses driven by asset deterioration reduced net income, though this was partially offset by cost control and higher net fees and commissions. Fitch expects the

Banks

Universal Commercial Banks

Peru

Ratings

Foreign Currency

Long-Term IDR	A-
Short-Term IDR	F1

Local Currency

Long-Term IDR	A-
Short-Term IDR	F1
Viability Rating	bbb
Shareholder Support Rating	a-

Sovereign Risk (Peru)
Long-TermForeign-Currency	BBB
IDR
Long-TermLocal-Currency IDR	BBB
Country Ceiling	A-
Outlooks
Long-TermForeign-Currency
IDR	Negative
Long-TermLocal-Currency IDR	Negative
Sovereign Long-Term Foreign-
Currency IDR	Negative
Sovereign Long-Term Local-
Currency IDR	Negative

Applicable Criteria

Bank Rating Criteria (March 2024)

Related Research

Latin American Banks Outlook 2024 (December 2023)

Peru (October 2023)

Fitch Affirms Bank of Nova Scotia at 'AA-'; Outlook Stable (June 2023)

Analysts

Ricardo Aguilar

[phone] [e-mail]

Sergio Pena

[phone] [e-mail]

Rating Report | April 3, 2024

fitchratings.com

1

Banks

Universal Commercial Banks

Peru

bank's core metric of operating profit/ RWAs at YE24 to improve to around 2.0%, the average of the last four years.

Strong Capital Levels: Fitch views the bank's capitalization as robust, underscored by its substantial loan loss reserves and solid asset quality. The bank demonstrates a consistent capacity for earnings generation, underpinned by competent risk management practices and ordinary support. Limited asset growth and profit recovery continue underpinning an improvement in capitalization.

Fitch expects SBP's common equity Tier 1 (CET1)/RWA to stabilize at around 13.5% to 14% over the next two years (December 2023: 13.8%), maintaining its capitalization score of 'bbb+', commensurate with its planned growth and financial performance. Fitch's capitalization assessment positively incorporates the bank's capital flexibility and ordinary support from its ultimate parent.

Adequate Liquidity and Stable Funding: SBP has appropriately managed its liquidity to fund asset growth while closely matching the maturities of its liabilities. SBP's funding profile is strengthened by its diversified mix of deposits, short-term funding and long-term debt. Fitch expects deposit base and regular access to capital markets to continue boosting loan growth. Its loans to customer deposits ratio of 126.4% as of December 2023 is explained by SBP's usage of long-term debt that aims for a composition of stable resources in line with the liquidity policies and coverage ratios.

Rating Sensitivities

Factors that Could, Individually or Collectively, Lead to Negative Rating

Action/Downgrade

A sovereign downgrade would result in similar rating actions on SBP's SSR, VR, and Foreign and Local Currency IDRs, as Fitch rarely rates VRs above the sovereign or SSRs and Foreign Currency IDRs above the Country Ceiling.

Although not likely over its parent's rating horizon (given its Stable Outlook) and absent a sovereign downgrade, a downgrade of BNS (from AA-/Stable) by three or more notches would trigger a downgrade of SBP. However, in the event of a downgrade of BNS's IDRs to the level of Peru's current sovereign ratings (BBB/Negative) or below, SBP's ratings would remain at the level determined by its own VR (currently at bbb).

Pressure on SBP's VR could arise from a downgrade in the OE currently with negative trend or significant asset quality and profitability deterioration that erodes SBP's reserve and capital cushion, specifically operating profit/RWA sustained below its historical average of 2.0% and CET1 ratio below 13%.

Factors that Could, Individually or Collectively, Lead to Positive Rating

Action/Upgrade

A rating upgrade of SBP's IDRs, SSR or VR is unlikely over the rating horizon given the Negative Outlook on the sovereign's Long-Term IDRs. Over the medium term, these ratings could be upgraded if the sovereign's ratings and Country Ceiling are upgraded.

Significant Changes from Last Review

On Oct. 25, 2023, Fitch affirmed Peru ratings at 'BBB', with a Negative Outlook. The Negative Outlook reflects the continued high level of political uncertainties in Peru and further deterioration in governance that have undermined private investment and are weighing on economic growth prospects. The political backdrop could damage medium-term growth potential and lead to a shift toward a more expansionary policy to support the economy and address social discontent, potentially impairing the fiscal trajectory relative to 'BBB' rated peers.

Fitch believes the bank's credit profile is sensitive to a material deterioration in the local OE or a negative sovereign rating action. As a result, the outlook on the OE score remains negative, as a slowdown in economic and loan growth, an increase in borrowing costs, and persistent political uncertainty are detracting from Peruvian banking sector activity. However, sustained capitalization, improving profitability and lower loan impairment charges provide sufficient resilience to face stress from political uncertainty and external shocks.

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	2

Banks

Universal Commercial Banks

Peru

Ratings Navigator

Scotiabank Peru S.A.A.

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D or RD

The Key Rating Driver (KRD) weightings used to determine the implied Viability Rating (VR) are shown as percentages at the top. In cases where the implied VR is adjusted upward or downward to arrive at the VR, the KRD associated with the adjustment reason is highlighted in red. The shaded areas indicate the benchmark-implied scores for each KRD.

VR - Adjustments to Key Rating Drivers

The OE score has been assigned above the implied score due to the following adjustment reasons: sovereign rating (positive).

The Asset Quality Score has been assigned below the implied score due the following adjustment reasons: concentrations (negative).

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	3

Banks

Universal Commercial Banks

Peru

Company Summary and Key Qualitative Factors

Operating Environment

Challenging Operating Environment

Fitch expects the banks' financial performance will stabilize after downside risks observed in 2023. Fitch believes the Peruvian banking system has been resilient, despite political instability, weather-related events and continued negative impacts from slow global growth. Expected economic growth of 1.9% in 2024 will be mostly a rebound from the low-base effect in 2023.

Headwinds will remain for private investment and consumption, in part due to political and social unrest. This economic downside could result in some deterioration of asset quality, but the banking system's performance will remain solid and stable. The sound bank capitalization and liquidity levels are expected to absorb any downside risks in 2024.

Business Profile

Consolidated Business Profile

SBP's 'bbb' VR is in line with the implied VR, which is underpinned by its solid business profile, sound market position and adequate capitalization. The bank is the third-largest Peruvian universal bank, with a market share of approximately 13.8% by assets and 12.6% by deposits as of YE 2023.

The bank's consolidated business profile has translated into a stable and solid financial profile through the cycle, with an average of total operating income between 2023 and 2019 of USD1.2 billion, similar to its closest foreign peer. SBP's business model has benefited from flight to quality under stressed environments.

SBP has a diverse and stable business model, and its overall business is weighted toward commercial traditional banking and, increasingly, retail operations. Its reliance on volatile businesses is modest. Furthermore, SBP's funding comes roughly 50% from corporate and 50% from retail; therefore, it has a stable and diversified deposit base.

SBP is 99.31% owned by BNS, Canada's third-largest banking group, with an increasing focus on Latin America and the Caribbean. SBP is BNS's third-largest investment outside of Canada after Mexico and Chile and is part of Scotiabank's Pacific Alliance strategy. Within BNS Canada, SBP contributed roughly 2% of assets and 7% of income as of YE 2023. SBP's management is experienced and well focused, and the corporate culture of the firm is consistent with BNS's culture.

SBP Strategy Aligns with BNS's Global Vision

The bank's strategy aims to achieve balanced and profitable growth, while increasing its profitable and stable customer base, improving operational efficiency, and enhancing clients' digital experience. Starting in 2023, the bank adjusted its growth strategy to focus on customers segments with a more complete range of products and services according to the characteristics of each segment, allocating capital to more profitable products and focusing on core deposits on the liabilities side.

For the commercial loan portfolio, the bank's main objective is to build long-term relationships with customers and satisfy their needs with local and international financial products and services, leveraged on SBP's deep knowledge of its customers and specialized units in corporate finance, cash management, transaction banking and leasing. The bank also focuses on maintaining a liquid portfolio of assets and a diversified foreign exchange profile while monitoring liquidity ratios and gaps and performing stress tests.

Execution

Fitch considers SBP's business plan execution adequate, as it generally meets its business and financial objectives in different stages of the economic cycle. The bank's digital transformation has been central to improving speed of service, increasing its client focus and reducing its operating costs. Over the last year, SBP continued to transform its digital channels and increased its secured loans contribution as well as its concentration in resilient sectors.

SBP's annual performance in 2023 showed a decline in profitability, mainly explained by a reduction in business volume and Caja Cencosud's goodwill impairment as of October 2023 (for PEN231.3 MM). In addition, inflation and international crises continue to affect private investment.

Risk Profile

Risk Profile Aligned with Parent BNS

SBP's adjustment to its risk appetite has contributed to the return of asset quality to pre-pandemic levels. Additionally, continued adjustment of its internal models and ongoing monitoring of the loan portfolio and warning

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	4

Banks

Universal Commercial Banks

Peru

signals, as well as a strengthened collection process, have supported asset quality performance. SBP's underwriting standards are in line with international guidelines and processes; these include internally defined exposure limits, collateral requirements and internal risk ratings. Its underwriting standards are generally in line with industry practices and reflect medium-term expectations. The bank has a three-year comprehensive risk appetite framework and provides quarterly follow-up reports to the board of directors. The bank's risk management structure is fully integrated with that of its parent, and it applies to all of BNS's global risk management policies.

The bank has strict parameters to monitor, measure, control and mitigate risks. It has specific procedures and policies for leadership, risk appetite and measurement, including follow-up procedures. The bank's credit risk is mitigated by adequate diversification by economic sector and moderate concentration among its largest debtors. The combination of moderate risk appetite, strengthened risk management processes and a stringent collection process should sustain the loan portfolio's relatively good performance.

Political Uncertainty Narrows Asset Growth

Local and international political uncertainty in 2022 and 2023, higher inflation, and funding cost pressures weighed on the banking sector's growth rate. By segment, loan growth was supported by mortgage and consumer performance, while commercial loans decreased slightly due to investor confidence and interest rates.

In 2023, SBP's loan growth of -7.6% was mainly due to lower demand for commercial products, while mortgage and personal loan growth of around 4% and 8%, respectively, were focused on lower risk clients. This was in line with SBP's focus on secured portfolios and cautious approach to market conditions. Deposits grew at a low rate of 0.7%, characterized by a preference for term deposits in the retail portfolio and cash management in the corporate portfolio, amid new regulatory requirements for liquidity ratios.

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	5

Banks

Universal Commercial Banks

Peru

Financial Profile

Asset Quality

Stable Asset Quality

SBP 90+ days past-due loans (PDLs) deteriorated slightly in 2023, given the systemic deterioration of the consumer portfolio and the gross portfolio reduction. Fitch expects asset quality to gradually improve in the near term due to the bank's prudent approach and conservative risk preference for secured portfolios, which should mitigate the impact of a still challenging OE in 2024. Fitch expects SBP's 90+ days PDLs to hover around 3.5% to 3.7% at YE 2024 (YE2023: 3.8%), and these loans are not expected to be a relevant source of risk over the rating horizon, given the bank's resilience through economic cycles and its good record of managing credit risk.

Moderate risk concentrations by debtor and economic sector and real guarantees mitigate risks from the OE. The bank is broadly diversified by economic sector. Only two sectors represented more than 10% of total loans at YE 2023, with manufacturing at 13% and wholesale/retail trade at 13%; these segments are diversified into several subsegments. SBP's 20 largest exposures by economic group amounted on average to 25% of total loans in 2022- 2023, or 1.2x equity, which Fitch considers moderate. None of the largest debtors represented individually more than 30% of total equity.

Net chargeoffs were negative 0.2% of average gross loans for 2023 after peakingto 4.34% in 2021 as part of measures to de-risk the loan portfolio, greater recoveries of chargeoffs and in connection with the end of relief programs and the migration of PDLs to nonrecovery categories. The result was below its 2016-2019 average of 2%. Reserve coverage remains high, with the 90+ day PDLs at 197%, following local and matrix requirements. In Fitch's view, reserve levels provide an adequate cushion to protect loan portfolio deterioration.

Impaired Loans/Gross Loans

(%)	SBP
5

4
3
2
1
0
Dec 21	Dec 22	Dec 23

Source: Fitch Ratings, Fitch Solutions, banks

	bbb
	a
Dec 24F	Dec 25F

Operating Profit/Risk-Weighted Assets

(%)		SBP
7				a
6
5
4
3				bbb
2
1
0
2021	2022	2023	2024F	2025F

Source: Fitch Ratings, Fitch Solutions, banks

Earnings and Profitability

Challenging OE impact Profitability

SBP's profitability is underpinned by its risk appetite adjustments, good efficiency levels and solid business generation amid local political uncertainty. The ratio of operating profit-to-RWAs ratio declined to 1.4% at YE23 from 2.9% at YE 2022. However, it remained resilient in the face of a 7.6% reduction in gross loans and pressure on NIMs.

In addition, provisioning expenses have been driven by asset deterioration and reduced net income but partially offset by cost control and net fees and commissions. Fitch expects the bank's core metric of operating profit/RWAs at YE 2024 to improve to around the average of the last four years of 2.0%, maintaining the profitability score in the 'bbb' range; however, political headwinds could affect investor and consumer confidence, which will limit profits in the near term.

Pressures on NIMs are expected to continue in 1H24, reflecting limited business growth and still high funding costs. SBP's operating profit/RWA ratio at YE23 of 1.4% was lower than the Peruvian bank average of 2.5% in the same period.

Efficiency was 48.3% at YE 2023, and loan impairment charges-to-pre-impairment operating profits increased to 60% due to limited business volume and additional provisions. Also, a goodwill impairment decision was made in relation to Caja Cencosud for approximately PEN231 million, reducing profitability.

Capital and Leverage

Strong Capital Levels

Fitch views the bank's capitalization as robust, underscored by its substantial loan loss reserves and solid asset quality. The bank has demonstrated a consistent capacity for earnings generation, underpinned by competent risk

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	6

Banks

Universal Commercial Banks

Peru

management practices and ordinary support. Limited asset growth and profit recovery continue underpinning an improvement in capitalization.

Fitch expects SBP's CET1/RWA to stabilize at around 13.5%-14% over the next two years (December 2023: 13.8%), maintaining its capitalization score of 'bbb+', commensurate with its planned growth and financial performance. Fitch's capitalization assessment positively incorporates the bank's capital flexibility and ordinary support from its ultimate parent. Additionally, SBP's CET1/RWA is above the largest Peruvian banks' average of 12.0% over the same period.

CET1 Ratio

(%)		SBP
35
30				a
25
20
15				bbb
10
5
0
Dec 21	Dec 22	Dec 23	Dec 24F	Dec 25F

Source: Fitch Ratings, Fitch Solutions, banks

Gross Loans/Customer Deposits

(%)		SBP
160
140
120
100			bbb
80
60
40			a
20
0
Dec 21	Dec 22	Dec 23	Dec 24F Dec 25F

Source: Fitch Ratings, Fitch Solutions, banks

Funding and Liquidity

Adequate Liquidity and Stable Funding

SBP has appropriately managed its liquidity to fund asset growth while closely matching the maturities of its liabilities. SBP's funding profile is strengthened by its diversified mix of deposits, short-term funding and long-term debt. Fitch expects deposit base and regular access to capital markets to continue boosting loan growth. Its loans to customer deposits ratio of 126.4% as of December 2023 is explained by SBP's usage of long-term debt that aims for a composition of stable resources in line with the liquidity policies and coverage ratios

SBP's competitive deposit rate offerings and consumer confidence in the bank position the entity as the third-largest in the Peruvian banking system in terms of deposits. Its deposit mix has changed toward low-cost funds and decreased dependence on term deposits, and it is also capturing transactional resources to generate income for financial services. Top 20 concentration for deposits remained stable at around 19% of total deposits at YE 2023.

SPB's deposit growth, its primary funding source, demonstrated resilience despite recent system deceleration. Core deposits increased 0.7% in 2023, due to lower wholesale loan demand. Liquidity remained comfortably high given the level of cash and marketable securities, which represented 33% of total deposits and short-term funding as of YE 2023, compared with 32% for 2022. The current regulatory liquidity coverage ratio requirement is 100%, which SBP surpassed in both local and foreign currency. SBP reported a 116% coverage ratio in local currency and 142% in foreign currency, while the net stable funding ratio (NSFR) was 125% at YE23.

Additional Notes on Charts

The forecasts in the charts in this section reflect Fitch's forward view on the bank's core financial metrics, per Fitch's Bank Rating Criteria. They are based on a combination of Fitch's macroeconomic forecasts, outlook at the sector level and company-specific considerations. As a result, Fitch's forecasts may materially differ from the guidance provided by the rated entity to the market

To the extent Fitch is aware of material nonpublic information with respect to future events, such as planned recapitalizations or M&A activity, Fitch will not reflect these nonpublic future events in its published forecasts. However, where relevant, such information is considered by Fitch as part of the rating process.

Black dashed lines represent boundaries for indicative quantitative ranges and implied scores for Fitch's core financial metrics for banks operating in the environments that Fitch scores in the 'bbb' category. Light-blue columns represent Fitch's forecasts.

Peer average includes Banco de Credito del Peru S.A. (VR: bbb), Banco BBVA Peru (bbb), Bancolombia S.A. (bb+), Banco de Bogota, S.A. (bb+) and Grupo Financiero BBVA Mexico, S.A. de C.V. Unless otherwise stated, financial year (FY) end is Dec. 31 for all banks in this report.

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	7

Banks

Universal Commercial Banks

Peru

Financials

	31 Dec 23		31 Dec 22	31 Dec 21	31 Dec 20
	12 months	12 months	12 months	12 months	12 months
	(USDm)	(PENm)	(PENm)	(PENm)	(PENm)
	Not disclosed	Not disclosed	Not disclosed	Unaudited	Unaudited
Summary income statement
Net interest and dividend income	974	3,628	3,488	3,181	4,130
Net fees and commissions	281	1,048	615	618	533
Other operating income	-48	-177	485	400	425
Total operating income	1,207	4,499	4,588	4,199	5,088
Operating costs	582	2,169	1,822	1,977	2,023
Pre-impairment operating profit	625	2,329	2,766	2,222	3,065
Loan and other impairment charges	375	1,397	729	911	2,845
Operating profit	250	933	2,037	1,311	220
Other non-operating items (net)	19	69	-50	19	36
Tax	60	222	571	298	3
Net income	209	780	1,416	1,032	252
Other comprehensive income	85	315	-94	-416	-119
Fitch comprehensive income	294	1,094	1,322	616	134
Summary balance sheet
Assets
Gross loans	14,926	55,614	60,209	58,927	54,929
- Of which impaired	560	2,086	2,125	1,962	2,598
Loan loss allowances	1,103	4,110	3,855	3,891	5,375
Net loans	13,823	51,505	56,355	55,036	49,555
Interbank	257	956	234	662	475
Derivatives	116	431	426	413	190
Other securities and earning assets	1,562	5,819	5,093	5,256	8,875
Total earning assets	15,757	58,711	62,108	61,367	59,094
Cash and due from banks	2,764	10,299	10,386	13,647	17,117
Other assets	969	3,611	3,142	3,870	3,793
Total assets	19,490	72,621	75,636	78,884	80,004
Liabilities
Customer deposits	11,807	43,994	43,711	47,238	48,575
Interbank and other short-term funding	1,141	4,251	4,998	6,480	16,709
Other long-term funding	2,858	10,651	14,055	12,711	3,313
Trading liabilities and derivatives	178	665	684	398	182
Total funding and derivatives	15,985	59,560	63,446	66,827	68,779
Other liabilities	384	1,432	1,295	1,251	1,204
Preference shares and hybrid capital	-	-	-	-	-
Total equity	3,121	11,629	10,895	10,806	10,022
Total liabilities and equity	19,490	72,621	75,636	78,884	80,004
Exchange rate		USD1 =	USD1 =	USD1 =	USD1 =
		PEN3.726	PEN3.809	PEN3.9849	PEN3.62

Source: Fitch Ratings, Fitch Solutions

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	8

Banks

Universal Commercial Banks

Peru

	31 Dec 23	31 Dec 22	31 Dec 21	31 Dec 20
Ratios (%; annualized as appropriate)
Profitability
Operating profit/risk-weighted assets	1.4	2.9	1.8	0.4
Net interest income/average earning assets	5.9	5.6	5.1	6.9
Non-interest expense/gross revenue	48.3	39.9	47.4	39.9
Net income/average equity	6.8	13.6	10.0	2.5
Asset Quality
Impaired loans ratio	3.8	3.5	3.3	4.7
Growth in gross loans	-7.6	2.2	7.3	2.0
Loan loss allowances/impaired loans	197.1	181.4	198.3	206.9
Loan impairment charges/average gross loans	2.4	1.2	1.6	5.1
Capitalization
Common equity Tier 1 ratio	13.8	-	-	-
Fully loaded common equity Tier 1 ratio	-	-	-	-
Fitch Core Capital ratio	-	14.6	13.8	14.8
Tangible common equity/tangible assets	14.5	13.4	12.7	11.5
Basel leverage ratio	-	-	-	-
Net impaired loans/common equity Tier 1	-	-	-	-
Net impaired loans/Fitch Core Capital	-	-17.3	-19.5	-30.6
Funding and Liquidity
Gross loans/customer deposits	126.4	137.8	124.7	113.1
Gross loans/customer deposits + covered bonds	-	-	-	-
Liquidity coverage ratio	-	-	-	-
Customer deposits/total non-equity funding	74.4	69.6	71.1	70.8
Net stable funding ratio	-	-	-	-

Source: Fitch Ratings, Fitch Solutions

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	9

Banks

Universal Commercial Banks

Peru

Support Assessment

Shareholder Support

Shareholder IDR	AA-
Total Adjustments (notches)	-3
Shareholder Support Rating	a-
Shareholder ability to support
Shareholder Rating	AA-/ Stable
Shareholder regulation	1 Notch
Relative size	Equalised
Country risks	2+ Notches
Shareholder propensity to support
Role in group	1 Notch
Reputational risk	Equalised
Integration	Equalised
Support record	1 Notch
Subsidiary performance and prospects	Equalised
Legal commitments	2+ Notches

The colors indicate the weighting of each KRD in the assessment.

Higher influence Moderate influence Lower influence

Fitch considers SBP a strategically important subsidiary for BNS, underpinning the bank's SSR of 'a-'. SBP's Local Currency IDR of 'A-' is two notches above Peru's Long-Term LC IDR of 'BBB', consistent with Fitch's criteria. SBP's Long-Term Foreign Currency IDR of 'A-' is capped by the Country Ceiling due to transfer and convertibility risks and constrains Fitch's assessment of the shareholder's ability to support its subsidiary. Our rating also incorporates SBP's operational integration within the parent.

Scotiabank Peru S.A.A.
Rating Report | April 3, 2024	fitchratings.com	10