LOANS, NET

12 Months Ended

Dec. 31, 2017

Disclosure of loans and advances to customers [text block]

7	LOANS, NET

a)	This item consists of the following:

	2017		2016
	S/(000)		S/(000)

Direct loans
Loans		77,712,186		71,792,562
Leasing receivables		7,401,018		8,302,898
Credit cards		6,880,017		7,036,975
Discounted Notes		1,999,099		1,921,403
Factoring receivables		1,722,436		1,428,571
Advances and overdrafts in current account		113,630		151,613
Refinanced loans		915,493		844,830
Restructured loans		121		126
Total direct loans		96,744,000		91,478,978

Internal overdue loans and under legal collection loans		3,020,914		2,620,411
		99,764,914		94,099,389
Add (less) -
Accrued interest		779,684		784,391
Unearned interest		(66,823)		(114,879)
Total direct loans		100,477,775		94,768,901
Allowance for loan losses (d)		(4,500,498)		(4,207,133)
Total direct loans, net		95,977,277		90,561,768

Indirect loans, Note 20(a)		19,369,559		19,831,985

b)	Direct loans by class are as follows:

	2017		2016
	S/(000)		S/(000)

Commercial loans		58,455,548		54,133,871
Residential mortgage loans		15,452,087		14,495,454
Micro-business loans		13,927,557		12,951,628
Consumer loans		11,929,722		12,518,436
Total		99,764,914		94,099,389

c)	Interest rates on loans are set considering the rates prevailing in the markets where the Group’s subsidiaries operate.

d)	The movement in the allowance for loan losses (direct and indirect loans) is shown below:

	2017
			Residential		Micro-business
	Commercial loans		mortgage loans		loans		Consumer loans		Total
	S/(000)		S/(000)		S/(000)		S/(000)		S/(000)

Balances at the beginning of the period		1,235,970		193,385		1,353,168		1,634,169		4,416,692
Provision, net of recoveries		715,072		49,505		522,885		501,703		1,789,165
Recovery of written-off loans		22,857		1,158		54,046		190,252		268,313
Loan portfolio written-off		(217,160)		(10,662)		(437,594)		(760,785)		(1,426,201)
Exchange difference and others		(76,613)		(5,099)		(15,927)		(7,322)		(104,961)
Balances at the end of the period (*)		1,680,126		228,287		1,476,578		1,558,017		4,943,008

	2016
			Residential		Micro-business
	Commercial loans		mortgage loans		Loans		Consumer loans		Total
	S/(000)		S/(000)		S/(000)		S/(000)		S/(000)

Balances at the beginning of the period		1,197,713		173,879		1,372,099		1,288,528		4,032,219
Provision, net of recoveries		25,567		26,845		538,233		1,194,850		1,785,495
Recovery of written-off loans		219,986		814		50,588		6,326		277,714
Loan portfolio written-off		(143,871)		(7,877)		(606,546)		(853,844)		(1,612,138)
Exchange difference and others		(63,425)		(276)		(1,206)		(1,691)		(66,598)
Balances at the end of the period (*)		1,235,970		193,385		1,353,168		1,634,169		4,416,692

	2015
			Residential		Micro-business
	Commercial loans		mortgage loans		loans		Consumer loans		Total
	S/(000)		S/(000)		S/(000)		S/(000)		S/(000)

Balances at the beginning of the period		556,270		165,138		1,124,072		1,256,616		3,102,096
Provision, net of recoveries		732,834		(321)		512,052		636,333		1,880,898
Recovery of written-off loans		157,790		362		7,333		5,794		171,279
Loan portfolio written-off		(341,067)		(4,936)		(403,993)		(721,326)		(1,471,322)
Exchange difference and others		91,886		13,636		132,635		111,111		349,268
Balances at the end of the period (*)		1,197,713		173,879		1,372,099		1,288,528		4,032,219

(*)

The movement in the allowance for loan losses includes the allowance for direct and indirect loans for approximately S/4,500.5 million and S/442.5 million, respectively, at December 31, 2017 (approximately S/4,207.1 million and S/209.6 million, respectively, at December 31, 2016 and approximately S/3,840.3 million and S/191.9 million, respectively, at December 31, 2015). The allowance for indirect loan losses is included in “Other liabilities” of the consolidated statement of financial position, Note 12(a). In Management’s opinion, the allowance for loan losses recorded as of December 31, 2017, 2016 and 2015 has been established in accordance with IAS 39 and is sufficient to cover incurred losses on the loan portfolio.

e)	Part of the loan portfolio is collateralized with guarantees received from clients, which mainly consist of mortgages, trust assignments, financial instruments and industrial and mercantile pledges.

f)	The table below shows the gross direct loan portfolio at December 31, 2017 and 2016 by maturity based on the remaining period to repayment due date:

	2017		2016
	S/(000)		S/(000)
Outstanding loans -
Up to 1 year		38,052,430		35,455,309
From 1 to 3 years		20,167,475		19,214,591
From 3 to 5 years		12,082,996		11,907,513
Over 5 years		26,441,099		24,901,565
		96,744,000		91,478,978
Internal overdue loans -
Overdue 90 days		639,329		539,947
Over 90 days		2,381,585		2,080,464
		3,020,914		2,620,411

		99,764,914		94,099,389

See credit risk analysis in Note 32.1.