Peruvian Bank Makes Provision For Offshore Madoff Losses

Rachel Walsh

4 February 2009

Credicorp, Peru's biggest financial holding company, said on Monday it will set aside $33 million in its end-of-year results to cover the exposure that one of its units had to US financier Bernard Madoff.

The Lima-based firm said in December that Atlantic Security Bank, a subsidiary of Credicorp specialising in asset management, has a Cayman-based fund that invested on behalf of its clients in products managed by Madoff Securities.

Atlantic Security Bank holds a direct exposure to such investments for $1 million and potential contingencies for up to $3.5 million related to transactions secured by these investments.

Credicorp is expected to release quarterly results this week and has said none of its other units was affected.

Its units include Banco de Credito del Peru, insurance firm Pacifico Peruano Suiza and pension fund administrator Prima AFP.

The first bank hit by Madoff to make such provisions was Banco Santander, which last week offered clients compensation through preferred shares at 2 per cent.