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.
Loan Growth and Asset Quality
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, Mibanco and Yape Performance
BCP posted quarterly ROE of 29.2%. Its total loans increased 4.7% sequentially, or 5.5% on an FX-neutral basis, led by consumer, SME-PYME and long-term wholesale lending. BCP’s NPL ratio fell to 3.9%, while cost of risk rose to 1.4% as underlying provisions normalized and El Niño-related provisions were added. Its net interest margin was 6.1% and risk-adjusted NIM was 5.2%.
Mibanco reported quarterly ROE of 22.9%, with loans increasing 4.4% sequentially and 15% year over year. Its NPL ratio reached a record low of 4.8%. Mibanco’s NIM increased 23 basis points sequentially to 15.2%, while cost of risk rose 30 basis points to 5.1%, reflecting portfolio growth, a modest increase in write-offs and additional El Niño-related provisions.
The company’s digital platform Yape had more than 16 million monthly active users, who conducted an average of 69 transactions per month. Yape generated revenue per month of PEN 11.1 against expenses per month of PEN 6, according to management. Its contribution to Credicorp’s risk-adjusted revenues rose to 8.9%.
Yape loans reached PEN 1.8 billion, four times the year-earlier level, while 5.6 million clients received loan disbursements. Chief Innovation Officer Francesca Raffo said growth reflected both new users and repeat borrowers, as well as increases in loan ticket sizes and terms. Lending represented 28% of Yape revenue, while payments accounted for 45%.
Diversified Revenue and Efficiency
Other core income grew 19.7% year over year. Fee income rose 15.9%, supported by transactional activity at Yape and BCP, while gains on foreign-exchange transactions climbed 29.8% as volumes increased amid market volatility. Insurance underwriting results declined, largely because the prior-year period included provision reversals in the life business.
Grupo Pacífico reported ROE of 19.1%, with relatively flat net income year over year. The life business recorded organic growth in bancassurance and retail sales, but reported lower net income due to the comparison with prior-year provision reversals. The property and casualty business saw lower net income amid higher claims, while corporate health earnings improved on premium growth and a larger customer base.
Credicorp’s investment management and advisory business delivered ROE of 23.5%, with net income rising 47% year over year. Management attributed the result to recurring-business growth and higher trading contributions amid temporary market volatility. Asset management assets under management increased 44%, while wealth management AUM rose 30%.
The consolidated efficiency ratio was 45.6% for the first half, within guidance. Operating expenses increased 13.5%, mainly reflecting BCP technology spending and investments in the innovation portfolio. Expenses associated with Yape, Tenpo and Culqi rose 33% and represented 84% of disruptive expenses during the quarter.
Updated Outlook and Management Transition
Credicorp raised its 2026 loan-growth outlook to around 12% from its prior expectation, citing stronger-than-anticipated momentum in BCP retail banking and Mibanco. It also increased its fee-income outlook to high-teens growth. Management expects NIM and risk-adjusted NIM to finish at the upper end of their guidance ranges and expects the efficiency ratio to remain within guidance.
The company reaffirmed 2026 ROE guidance of around 19.5%, with a bias to the upside depending on El Niño’s development. For the medium term, management expects ROE of about 22%, supported by growth in underpenetrated lending, insurance and investment products, higher risk-adjusted margins, fee-income growth, monetization of innovation initiatives and operating leverage.
Perez-Reyes said this was his final earnings call as Credicorp CFO before moving to lead Mibanco and Credicorp’s microfinance business. Ferrari said Ignacio will succeed him as CFO and participate in the next quarterly call.
About Credicorp (NYSE:BAP)
Credicorp Ltd. NYSE: BAP is a Lima-based financial services holding company that operates a diversified group of banking, insurance, and investment businesses. Established in the mid-1990s, Credicorp's principal subsidiaries include Banco de Crédito del Perú (BCP), Mibanco (microfinance), Credicorp Capital (investment banking and asset management) and Pacífico Seguros (insurance). The company serves retail, commercial and corporate clients and is one of the largest financial conglomerates in Peru.
Through Banco de Crédito del Perú and its retail network, Credicorp provides a full suite of banking products including deposit accounts, consumer and commercial loans, mortgages, payment and transaction services, and digital banking solutions.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
Before you consider Credicorp, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Credicorp wasn't on the list.
While Credicorp currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Enter your email address and we’ll send you MarketBeat’s list of ten stocks set to soar in Summer 2026, despite the threat of tariffs and what's happening in Iran. These ten stocks are incredibly resilient and are likely to thrive in any economic environment.
Get This Free Report
