Credicorp Q2 Earnings Call Highlights

Credicorp delivered strong profitability , with second-quarter ROE of 20.3%, improved asset quality and a 13.1% year-over-year increase in loans. Management raised its medium-term ROE expectation to approximately 22%. The company raised its 2026 outlook for loan growth to around 12% and fee-income growth to the high teens, supported by momentum at BCP and Mibanco, while reaffirming ROE guidance of about 19.5%. El Niño remains the key near-term risk ; Credicorp recorded PEN 106 million in related provisions and may see slower loan and fee-income growth if conditions worsen. Meanwhile, digital platform Yape continued expanding, reaching more than 16 million monthly active users and PEN 1.8 billion in loans.

Credicorp NYSE: BAP reported a second-quarter return on equity of 20.3% and raised its medium-term ROE expectation to approximately 22%, citing stronger loan growth, improved portfolio quality, a low-cost funding base and increasing contributions from digital and fee-based businesses. Chief Executive Officer Gianfranco Ferrari said the company has become more confident in Peru’s medium-term economic outlook, pointing to recovering business confidence, growth in private investment and domestic demand, and favorable commodity prices. He said private investment was growing by approximately 13% year over year and domestic demand by more than 5%.

Ferrari said political developments also could support a more predictable economic environment, including continuity at Peru’s central bank and the appointment of a new technical team at the Ministry of Economy and Finance. However, management identified El Niño as the principal near-term risk, though it characterized the weather event as a temporary and manageable shock rather than a structural change to the country’s growth outlook.

Chief Financial Officer Alejandro Perez-Reyes said loans measured at quarter-end balances rose 13.1% year over year, driven primarily by retail and wholesale banking at BCP as well as Mibanco. Net interest income increased 13.3%, supported by lower interest expenses and a higher-yielding loan mix, while consolidated net interest margin stood at 6.6%. Asset quality improved, with the nonperforming loan ratio declining to 4.1%. Cost of risk was 1.9%, including 27 basis points related to El Niño provisions based on currently available information. The company recorded approximately PEN 106 million in additional provisions related to the event during the quarter. Excluding that impact, cost of risk was 1.6%.

Perez-Reyes said the company expects to reassess El Niño-related expected losses around the end of the third quarter or beginning of the fourth quarter, when management expects to have better information on the event’s likely severity. Credicorp expects its full-year 2026 cost of risk to remain within its guidance range, including under a severe scenario based on current information. Chief Risk Officer Cesar Rios said Credicorp has identified potentially affected portions of the portfolio by segment, geography and client profile. The company plans to adjust risk appetite “very surgically” in more vulnerable areas while maintaining growth ambitions in the rest of the country, subject to economic conditions. Management said a more severe El Niño could slow loan growth and fee income in 2027, when the economic effects may be more pronounced. Still, Ferrari said the company expects both wholesale and retail portfolios to generate double-digit growth over the longer term, excluding a potential short-term disruption from El Niño.

BCP posted quarterly ROE of 29.2%. I...