Corporacion Financiera de Desarrollo : 22. INFORMES DE CLASIFICACIÓN DE RIESGO.

08 SEP 2022

Fitch Affirms COFIDE's IDRs at 'BBB'; Outlook Stable

Fitch Ratings - Monterrey - 08 Sep 2022: Fitch Ratings has affirmed the Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) of Corporacion Financiera de Desarrollo S.A. (COFIDE) at 'BBB'. The Rating Outlook Is Stable. A full list of rating actions follows at the end of this release.

The affirmation of COFIDE's IDRs reflects Fitch's unchanged view of potential support, if needed, from the government of Peru.

Fitch has withdrawn COFIDE's Support Rating and Support Rating Floor of '2' and 'BBB', respectively, as they are no longer relevant to the agency's coverage following the publication of Fitch's updated Bank Rating Criteria on Nov. 12, 2021. In line with the updated criteria, Fitch has assigned a Government Support Rating (GSR) of 'bbb'.

Key Rating Drivers

IDRs AND SENIOR DEBT

COFIDE's IDRs and senior debt ratings reflect Fitch's expectation that the entity would receive support from the Peruvian government if needed. In Fitch's view, COFIDE is a key policy bank for the government, as it is critical in implementing economic and social development policies. Peru's ability to offer support is reflected in its sovereign rating (BBB/Stable); although the government does not extend an explicit guarantee, ratings are equalized given that the state is the majority shareholder and the bank has operational and financial synergies with the public administration.

For the Peruvian government, COFIDE plays a key role as a development bank focused in infrastructure, economic and social welfare. The bank plays a critical role in implementing policies directed at sectors with limited funding access or projects underserved by commercial banks. During the pandemic, the bank had a crucial role in the Peruvian handling of the economy by managing key funds, such as Reactiva or FAE, created to support SMEs, which further supports Fitch's view on the entity's relevant policy role.

Although COFIDE's ratings are based purely on Fitch assessment of expected government support, the financial profile is still relevant to the agency's appreciation about the policy role of the entity for the government. COFIDE's financial performance reflects its development bank nature where profitability is not the main goal but the operation is well supported by good capital metrics.

Profitability has been typically weak, as reflected in its four-year average ratio of operating profit to risk-weighted assets of 0.5%. Asset quality reflects the risks posed by high per borrower concentrations which drove an average non-performing loan ratio of 7.6% over the past four years, although provision

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SANGUINETI CORZO Carmen Angela

Celeste FAU 20100116392 soft

Fecha: 08/09/2022 05:19:00 p.m.

RATING SENSITIVITIES

--The bank's subordinated notes are sensitive to any positive or negative change in COFIDE's ratings.

Best/Worst Case Rating Scenario

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector- specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/ 10111579

Summary of Financial Adjustments

All intangible assets were deducted from total equity to obtain the Fitch Core Capital since the agency believes the capacity for these to absorb losses is low.

Sources of Information

The main sources of information used in the analysis are described in the Applicable Criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

Public Ratings with Credit Linkage to other ratings

Corporacion Financiera de Desarrollo S.A. ratings are support driven from the Peruvian sovereign rating.

ESG Considerations

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.

Fitch Ratings Analysts

Ricardo Aguilar

Director

Primary Rating Analyst +52 81 4161 7086

Fitch Mexico S.A. de C.V. Prol. Alfonso Reyes No. 2612, Edificio Connexity, Piso 8, Col. Del Paseo Residencial, Monterrey 64920

Andres Marquez

Senior Director Secondary Rating Analyst +57 601 241 3254

Theresa Paiz-FredelSenior Director Committee Chairperson +1 212 908 0534

Media Contacts

Elizabeth Fogerty

New York

+1 212 908 0526 elizabeth.fogerty@thefitchgroup.com

Rating Actions

RATINGS KEY OUTLOOK WATCH

POSITIVE

NEGATIVE

EVOLVING

STABLE

Applicable Criteria

Bank Rating Criteria - Effective from 12 November 2021 to 7 September 2022 (pub.12 Nov 2021) (including rating assumption sensitivity)

Additional Disclosures

Solicitation Status

Endorsement Status

DISCLAIMER & DISCLOSURES

All Fitch Ratings (Fitch) credit ratings are subject to certain limitations and disclaimers. Please read these limitations and disclaimers by following this link: https://www.fitchratings.com/ understandingcreditratings. In addition, the following https://www.fitchratings.com/rating-definitions-document details Fitch's rating definitions for each rating scale and rating categories, including definitions relating to default. ESMA and the FCA are required to publish historical default rates in a