CreditCorp Ltd. (NYSE: BAP) - Investing in Peru.

After unleashing a tirade of obscenities that would raise an eyebrow from even the likes of the “Dice Man” himself, Andrew Dice Clay, I’m still kicking myself for not accumulating some shares of CreditCorp Ltd. (NYSE: BAP) when the getting was good in the $30 range last week.

Sure, the sky was falling and emerging markets were spiraling downwards at warp speed. But, as I continued to preach to subscribers about the economic collapse of many developing nations that were considered “hot” markets just a few weeks before and the fact the Peru was showing signs of imperviousness to the ongoing meltdown; I neglected to follow my own advice.

BAP is Compelling at Current Levels

Still down more than 50% from its 52-week high of $86.91, BAP is one of the most compelling Latin America growth plays that I’ve come across to date.  The company has been around since 1889 (talk about staying power) and remains Peru’s premier financial services company.

CreditCorp is the holding company for such a diverse array of stellar assets that it can’t even be realistically compared to any largest U.S. firms.  Two of the company’s biggest assets are Banco De Credito – Peru’s largest bank - and insurance company - Peruano Suiza – which holds a close to 30% market share in the country.

Net Income Rises 2.5%, Loan Growth 32% in 3rd Quarter

While U.S. banks largely imploded during the third quarter, BAP is saw its business thrive in Peru as well as well as other nations including Columbia. As a point of reference, BofA saw Q3 net income drop more than 200% on a quarterly year-over-year basis while overall U.S. consumer borrowing fell by nearly $8 billion in August, the largest percentage decrease ever since statistics begin being compiled.

Meanwhile, BAP experienced 3rd quarter net income expansion of 2.5% as well as a 24.5% increase in net interest income. Both improvements were reportedly largely driven by loan growth and relatively calm currency markets. Furthermore, the company’s loan portfolio grew by nearly 32% approaching $10 billion.

Is Peru the Antithesis of the United States?

Peru reminds me of the U.S. in its prime, with a heck of a lot more natural resources and BAP represents a solid play on the country’s future growth potential. Unlike in the U.S., there is no credit crisis in Peru. Must be nice. Converse to the U.S. where consumer borrowing is dipping for the first time ever and loan default rates surge, Peru’s credit market is just beginning to mature.

Similar to our parents and grandparents back in the 50’s and 60’s, a growing number of Peruvians are just now becoming qualified for bank loans, which they pay back with religious fervor. In response to this trend, BAP experienced 2007 loan growth of 40% and has about 1% of all loans due.

Peruvian Economy Growing despite Global Economic Slowdown

Peru’s economy grew by about 7.5% in 2007 and is set to expand by about 9% this year. Over the past five years, the country has experienced average year-over-year economic growth of roughly 5%. Moreover, the country is chock full of natural resources including silver (world’s top producer), copper (world’s 2nd leading producer), tin (3rd), lead (4th), Gold (5th), natural gas, iron ore, coal, and zinc.

In a testament to the country’s growth potential and current strength, Fitch Ratings, a leading independent global rating agency, recently upgraded Peru’s long-term foreign currency issuer default rating to BBB-, investment grade, from BB+, citing strong improvement in fiscal and external solvency ratios. In addition to a booming tourist industry, Peru is also the world’s premier source of high-grade coffee and holds the potential to export some US$ 3 billion per year of wood and by-products.

Net-Net

Although I am quite bullish on Peru’s future, a number of risk factors must be taken into consideration before investing in this emerging region. The big ones include a high poverty rate (nearly 50%), political instability and potential for corruption at the top, a narrow tax base, limited export business, and high susceptibility to changes in commodity prices.

That being said, BAP enjoys a position as the Crème de le Crème of the Peruvian marketplace and has been valued as such in recent years. However, this most recent global meltdown may have created a historical buying opportunity for well-heeled investors willing to roll the dice.