22. INFORMES DE CLASIFICACIÓN DE RIESGO.

Banks

Universal Commercial Banks

Peru

Scotiabank Peru S.A.A.

Update

Key Rating Drivers

Parent Support: Scotiabank Peru S.A.A.'s (SBP or the bank) Issuer Default Ratings (IDRs) are based on expected support from its parent, The Bank of Nova Scotia (BNS, AA-/Negative). Fitch Ratings' assessment of support for SBP places high importance on its role in the group as a strategically important subsidiary, and is capped by the country risks related to transfer and convertibility. Our rating also incorporates SBP's operational integration with the parent.

Operating Environment High Influence Factor: SBP's Viability Rating (VR) is highly influenced by the operating environment (OE). The stabilization of the OE mirrors the Stable Outlook of the sovereign rating and indicates that Fitch expects any modest additional fallout from the rapidly developing external shocks and political uncertainty could be absorbed by the current OE level.

Strong Capital Levels: The bank's VR is also highly influenced by its capitalization. SBP continues to report one of the strongest capitalization metrics among the largest Peruvian banks. Fitch Core Capital/risk weighted assets (FCC/RWAs) increased to 15% at June 2021 from an average of 14.5% during 2016-2020, reflecting limited growth and earnings generation. SBP benefits from being part of a larger financial group, and parent support, if required, should be feasible.

Ratings

Foreign Currency

Long-Term IDR	BBB+
Short-Term IDR	F1

Local Currency

Long-Term IDR	A-
Short-Term IDR	F1
Viability Rating	bbb
Support Rating	1

Sovereign Risk

Long-Term
Foreign Currency IDR	BBB
Long-Term
Local Currency IDR	BBB
Country Ceiling	BBB+

Outlooks

Long-Term
Foreign Currency IDR	Stable
Long-Term
Local Currency IDR	Stable
Sovereign Long-Term
Foreign Currency IDR	Stable
Sovereign Long-Term
Local Currency IDR	Stable

Asset Quality Improving: SBP's asset quality during 2020 was affected by limited loan growth	Applicable Criteria
and higher delinquency levels due to the pandemic, mainly for unsecured loans. Consolidated
Bank Rating Criteria (February 2020)
past due loans (PDLs) increased as expected to 6.5% from an average of 3.6% from 2016 to
2019. PDLs decreased to 4.9% as of June 2021, and reserve coverage remains at 1.5x as part
of the process to protect the bank's exposure to the coronavirus.	Related Research
Profitability Challenges: Fitch expects SBP's profitability to continue to be challenged in 2021	Fitch Takes Actions on Peruvian FIs Following
Sovereign Downgrade (October, 2021)
given the economic effects from the pandemic, such as limited growth and lower interest rates.
The recession pressured credit costs, with loan-impairment charges consuming 93% of pre-
impairment operating profit in 2020. Significant reduction in loan-impairment charges amid
lower net interest margins and its derisking strategy allowed SBP to gradually recover pre-
pandemic profitability.
Financial Data
Fitch's core metric ratio of operating profit to RWAs was 1.48% at June 2021. Profitability
Scotiabank Peru S.A.A.
could modestly improve in 2021, but it is not expected to return to pre-pandemic levels.
(PEN Mil.)	6/30/21 12/31/20
Adequate Liquidity and Stable Funding: SBP has appropriately managed its liquidity to fund
Total Assets (USD Mil.)	21,133.7	22,100.6
asset growth while closely matching the maturities of its liabilities. SBP's funding profile is
Total Assets	81,343.8	80,004.1
strengthened by its diversified mix of deposits, short-term funding and long-term debt. SBP
Total Equity	10,257.2	10,021.5
conforms with Basel III regulatory liquidity requirements and significantly reduced its historical
asymmetry of loans/deposits in local currency (LC) versus foreign currency (FC), which could
alleviate pressures amid the pandemic.	Analysts
Subordinated Debt: SBP's subordinated debt rating of 'BBB' is one notch below what Fitch
Robert Stoll
considers the appropriate anchor rating, the bank's own support-driven LT FC IDR of 'BBB+'.
[phone]
Because this anchor rating is capped by Peru's Country Ceiling of 'BBB+', which addresses
transfer and convertibility risks, the overall notching for this issue rating is only one notch lower	[e-mail]
than the anchor to reflect loss severity risk partially mitigated by institutional support, instead
of the baseline case of two notches lower.	Sergio Pena
			[phone]
			[e-mail]

Firmado Digitalmente por:

FRANCISCO GUILLERMO

RIVADENEIRA GASTANETA

Fecha: 09/11/2021 07:16:51 p.m.	fitchratings.com	1
Update │ November 9, 2021

Banks

Universal Commercial Banks

Peru

Rating Sensitivities

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

Action/Downgrade

• Under Fitch's current support assessment, SBP's IDRs will likely remain at the level determined by its own VR, or one notch below its parent's IDR, whichever is higher, but subject to sovereign rating and Country Ceiling considerations;
• SBP's Support Rating would be affected by a negative change in its parent's ability or willingness to support the bank;
• Pressure on SBP's VR could arise from a significant asset quality or profitability deterioration that erodes SBP's reserve and capital cushion, specifically operating profit/RWA sustained below its historical average of 2.3% and an FCC ratio below 10%.

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

Action/Upgrade

• A rating upgrade on SBP's Long-Term LC IDR is unlikely in the near future. Over the medium term, this rating could be upgraded if the parent's ratings are upgraded, or if Fitch's support assessment of SBP changes to an equalization of its IDRs with those of the parent, but is subject to constraints on the maximum uplift above the sovereign rating;
• While unlikely in the current OE, SBP's Long-Term FC IDR would be upgraded if Peru's sovereign rating and Country Ceiling were to be upgraded.

Subordinated Debt

• SBP's subordinated debt ratings would move in line with the bank's Long-Term FC IDR.

Debt Rating Classes

Rating Level	Rating
Subordinated Debt	BBB
Source: Fitch Ratings.

Scotiabank Peru S.A.A.
Update │ November 9, 2021	fitchratings.com	2

Banks

Universal Commercial Banks

Peru

Ratings Navigator

Scotiabank Peru S.A.A.

ESG Relevance:

Banks

Ratings Navigator

Operating

Management &

Financial Profile

Institutional

Issuer Default

Peer Ratings

Company Profile

Risk Appetite

Earnings &

Capitalisation &

Funding &

Viability Rating

Environment

Strategy

Asset Quality

Support

Rating

Profitability

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Liquidity

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Stable D or RD

Stable

Significant Changes

Fitch took selected actions on Peruvian Financial Institutions (FIs) following Peru's sovereign rating being downgraded to 'BBB' from 'BBB+' and its Rating Outlook being revised to Stable from Negative. The review also follows Fitch's adjustment of its OE assessment for Peruvian FIs to 'bbb-'/Stable from 'bbb'/Negative. For additional details on the sovereign rating action see Fitch Downgrades Peru to 'BBB'; Outlook Stable.

Fitch downgraded SBP's FC IDR by one notch to 'BBB+' from 'A-', as it is capped by Peru's Country Ceiling of 'BBB+'. The downgrade on SBP's LC IDR to 'A-' from 'A' mirrors the current downgrade on the sovereign LC IDR, because Fitch will likely maintain a maximum two-notch difference between these two ratings. Based on the subsidiary's role in the group and its integration with the parent, Fitch considers SBP a strategically important subsidiary for BNS. According to Fitch's assessment of support, SBP's ratings are highly influenced by Peruvian country risk, which captures the transfer and convertibility risks and is reflected in the Country Ceiling of 'BBB+'. It also constrains Fitch's assessment of the shareholder's ability to support its subsidiary.

Bar Chart Legend

Vertical bars - VR range of Rating Factor Bar Colors - Influence on final VR

Higher influence Moderate influence Lower influence

Bar Arrows - Rating Factor Outlook

		Positive		Negative
		Evolving		Stable

Scotiabank Peru S.A.A.
Update │ November 9, 2021	fitchratings.com	3

Banks

Universal Commercial Banks

Peru

Summary Financials

	Six Months - Interim 6/30/21		2020	2019	2017	2017
	(USD Mil.)	(PEN Mil.)	(PEN Mil.)	(PEN Mil.)	(PEN Mil.)	(PEN Mil.)
					Audited -	Audited -	Audited -
(Year End as of Dec. 31)	Unaudited	Unaudited	Unaudited	Unqualified	Unqualified	Unqualified
Summary Income Statement
Net Interest and Dividend Income	390.0	1,502.8	4,130.2	4,398.3	3,828.4	3,589.7
Net Fees and Commissions	80.0	306.4	532.5	685.4	646.3	637.0
Other Operating Income	59.0	227.3	425.0	524.7	299.6	315.5
Total Operating Income	529.0	2,036.5	5,087.7	5,608.4	4,774.3	4,542.2
Operating Costs	238.0	916.1	2,022.7	2,062.5	1,768.5	1,691.5
Pre-Impairment Operating Profit	291.0	1,120.4	3,065.0	3,545.9	3,005.8	2,850.7
Loan and Other Impairment Charges	170.0	653.9	2,845.3	1,599.1	1,286.5	1,212.2
Operating Profit	121.0	466.5	219.7	1,946.8	1,719.3	1,638.5
Other Non-Operating Items (Net)	0.0	0.6	35.7	11.6	37.1	13.9
Tax	26.0	98.6	3.0	485.8	479.7	439.3
Net Income	96.0	368.5	252.4	1,472.6	1,276.7	1,213.1
Other Comprehensive Income	(33.0)	(128.0)	(118.6)	32.9	(43.4)	(0.5)
Fitch Comprehensive Income	62.0	240.5	133.8	1,505.5	1,233.3	1,212.6
Summary Balance Sheet
Assets
Gross Loans	14,801.0	56,969.5	54,929.4	53,843.8	49,660.5	44,638.0
- of Which Impaired	722.0	2,780.2	3,560.8	2,017.7	1,905.1	1,554.4
Loan Loss Allowances	1,122.0	4,317.4	5,374.7	2,912.9	2,627.6	2,271.0
Net Loan	13,679.0	52,652.1	49,554.7	50,930.9	47,032.9	42,367.0
Interbank	161.0	618.1	90.5	38.0	66.5	406.1
Derivatives	139.0	534.8	189.6	158.1	99.1	41.7
Other Securities and Earning Assets	2,862.0	11,014.6	8,875.3	6,492.0	4,554.8	5,474.2
Total Earning Assets	16,841.0	64,819.6	58,710.1	57,619.0	51,753.3	48,289.0
Cash and Due from Banks	3,138.0	12,078.3	17,501.3	15,072.2	10,566.0	9,376.5
Other Assets	1,155.0	4,445.9	3,792.7	3,623.6	4,553.6	3,123.9
Total Assets	21,134.0	81,343.8	80,004.1	76,314.8	66,872.9	60,789.4
Liabilities
Customer Deposits	12,083.0	46,507.5	48,575.2	44,763.0	39,951.1	37,862.3
Interbank and Other Short-Term Funding	1,238.0	4,763.5	16,709.3	12,718.3	8,845.3	7,680.3
Other Long-Term Funding	4,431.0	17,054.4	3,312.9	7,340.9	6,409.0	5,592.3
Trading Liabilities and Derivatives	121.0	466.3	181.6	129.7	86.2	68.0
Total Funding	17,873.0	68,791.7	68,779.0	64,951.9	55,291.6	51,202.9
Other Liabilities	596.0	2,294.9	1,203.6	1,464.7	2,769.9	1,397.9
Preference Shares and Hybrid Capital	N.A.	N.A.	N.A.	N.A.	N.A.	N.A.
Total Equity	2,665.0	10,257.2	10,021.5	9,898.2	8,811.4	8,188.6
Total Liabilities and Equity	21,134.0	81,343.8	80,004.1	76,314.8	66,872.9	60,789.4
Exchange Rate		USD1 =	USD1 =	USD1 =	USD1 =	USD1 =
		PEN3.849	PEN3.620	PEN3.312	PEN3.373	PEN3.240

N.A. - Not available.

Source: Fitch Ratings, Fitch Solutions.

Scotiabank Peru S.A.A.
Update │ November 9, 2021	fitchratings.com	4

Banks

Universal Commercial Banks

Peru

Key Ratios

Ratios (x, Annualized as Appropriate)	6/30/21	12/31/20	12/31/19	12/31/18	12/31/17
Profitability
Operating Profit/Risk-Weighted Assets	1.5	0.4	2.9	2.9	3.1
Net Interest Income/Average Earning Assets	4.9	6.9	8.0	7.7	7.8
Non-Interest Expense/Gross Revenue	45.3	39.9	36.9	37.2	37.4
Net Income/Average Equity	7.3	2.5	15.9	15.4	15.9
Asset Quality
Impaired Loans Ratio	4.9	6.5	3.8	3.8	3.5
Growth in Gross Loans	3.7	2.0	8.4	11.3	7.3
Loan Loss Allowances/Impaired Loans	155.3	150.9	144.4	137.9	146.1
Loan Impairment Charges/Average Gross Loans	2.4	5.1	3.0	2.6	2.7
Capitalization
Common Equity Tier 1 Ratio	N.A.	N.A.	N.A.	N.A.	N.A.
Fully Loaded Common Equity Tier 1 Ratio	N.A.	N.A.	N.A.	N.A.	N.A.
Fitch Core Capital Ratio	14.9	16.0	13.6	13.8	14.5
Tangible Common Equity/Tangible Assets	11.6	11.5	11.8	12.4	12.6
Basel Leverage Ratio	N.A.	N.A.	N.A.	N.A.	N.A.
Net Impaired Loans/Common Equity Tier 1	N.A.	N.A.	N.A.	N.A.	N.A.
Net Impaired Loans/Fitch Core Capital	(16.5)	(20.0)	(10.0)	(8.8)	(9.4)
Funding and Liquidity
Loans/Customer Deposits	122.5	113.1	120.3	124.3	117.9
Liquidity Coverage Ratio	N.A.	N.A.	N.A.	N.A.	N.A.
Customer Deposits/Funding	68.1	70.8	69.1	72.4	74.0
Net Stable Funding Ratio	N.A.	N.A.	N.A.	N.A.	N.A.

N.A. - Not available.

Source: Fitch Ratings, Fitch Solutions.

Scotiabank Peru S.A.A.
Update │ November 9, 2021	fitchratings.com	5