BAP Q1 2026 Earnings Call Summary

Summary of Credicorp Limited Q1 2026 Earnings Call

1. Key Financial Results and Metrics

Return on Equity (ROE): 21.1%, exceeding expectations.
Net Income: Achieved record high, driven by strong growth in risk-adjusted revenue streams.
Loan Growth: Increased by 8.2%, primarily from BCP and Mibanco.
Non-Performing Loan (NPL) Ratio: Improved to 4.3%, reflecting better asset quality.
Net Interest Margin (NIM): Strengthened to 6.6%, supported by a favorable funding mix and lower interest expenses.
Dividend: Increased to PEN 50 per share, reflecting strong solvency.

2. Strategic Updates and Business Highlights

Decoupling Strategy: Focused on four growth anchors: expanding into unpenetrated markets, scaling digital ecosystems (notably Yape), unlocking synergies across businesses, and maintaining strong returns through disciplined risk management.
Digital Initiatives: The neobank unit consolidating Yape and Tenpo aims to enhance digital offerings and customer engagement.
Mibanco Performance: Reported robust loan growth of 12.4% and a declining NPL ratio of 4.9%, outperforming peers.
Yape's Growth: Reached 16.4 million active users, contributing significantly to fee income and risk-adjusted revenues.

3. Forward Guidance and Outlook

GDP Growth Expectation: Maintained at 3.5% for 2026, though risks are skewed to the downside.
Loan Book Growth: Expected to grow around 8.5% year-over-year, driven by retail banking and Mibanco.
Cost of Risk: Anticipated to modestly increase as retail origination accelerates, but remain within risk appetite.
ROE Guidance: Aiming for around 19.5%, with potential to exceed this based on strong Q1 performance and economic conditions.

4. Challenges and Points of Concern

Political Uncertainty: Upcoming presidential elections could introduce market volatility, especially with candidates presenting differing economic visions.
Geopolitical Risks: Ongoing tensions in the Middle East and their impact on oil prices could affect inflation and economic stability.
El Niño Impact: Potential adverse effects on agriculture and economic performance, with ongoing monitoring required.
Asset Quality Risks: While current metrics are strong, the management highlighted that the low cost of risk may not be sustainable in the long term.

5. Notable Q&A Insights

Presidential Elections: Candidates Fujimori and Sanchez are likely to face off in the runoff, with uncertain implications for economic policy.
El Niño Effects: The current moderate impact is being monitored, with potential GDP impacts estimated between 0.8% to 1.7% depending on severity.
Asset Quality: The low cost of risk is attributed to temporary factors, and while improvements are noted, management remains cautious about future risks.
Yape's Performance: Strong growth in Bolivia and potential for international expansion discussed, with a focus on leveraging technology for broader market penetration.
Investment Focus: Management emphasized growth over extraordinary dividends, indicating a preference for reinvesting in higher yielding segments.

Overall, Credicorp reported solid financial performance in Q1 2026, with strategic initiatives aimed at enhancing digital capabilities and expanding market reach, while navigating potential political and economic challenges.

BAP — Credicorp Ltd.