IFS — Intercorp Financial Services Inc.

Summary of Intercorp Financial Services (IFS) Q3 2025 Earnings Call

1. Key Financial Results and Metrics:

• Net Income: PEN 456 million for Q3 2025, up 81% year-over-year.
• Return on Equity (ROE): Approximately 16% for the quarter; 17.4% year-to-date, which would have been 18.3% excluding a one-off provision related to Rutas de Lima.
• Net Interest Margin (NIM): Improved to 3.8%, with a 40 basis point increase in the last quarter.
• Loan Portfolio Growth: Expanded by over 5% year-over-year, with higher-yielding loans growing 7% year-over-year.
• Cost of Risk: Remained low at 2.1%, with a slight increase expected as consumer and small business portfolios expand.

2. Strategic Updates and Business Highlights:

• Core Business Growth: Strong performance in wealth management and insurance, with double-digit growth in written premiums (up 58% year-over-year) and assets under management reaching new highs.
• Digital Initiatives: Continued enhancement of digital banking services, with PLIN and Izipay driving customer engagement and transaction volumes.
• Focus on Higher-Yielding Loans: Consumer and small business segments now represent 22% of the loan portfolio, with a strategic emphasis on increasing profitability through these segments.
• Synergies: Interseguro and Inteligo are collaborating to enhance private annuity sales and integrated bancassurance solutions.

3. Forward Guidance and Outlook:

• Economic Context: Peru's GDP growth is projected at 3.2% for 2025, with a cautious outlook due to political uncertainties and global market volatility.
• Loan Growth Expectations: Anticipated to moderate in the last quarter of 2025 due to pension fund withdrawals but expected to resume growth in 2026, with a target to outpace market growth.
• NIM Outlook: Slight recovery expected for the remainder of the year, supported by lower cost of funds.

4. Bad News, Challenges, or Points of Concern:

• Rutas de Lima Provision: A provision of PEN 78 million this quarter due to ongoing legal issues, with total exposure of approximately $60 million, representing less than 1% of the investment book.
• Impact of Pension Fund Withdrawals: Anticipated short-term negative effects on retail loan growth, with potential declines in consumer loans for 1-2 months before recovery.
• Corporate Lending Outlook: Limited growth expected in corporate lending due to a lack of large projects and refinancing trends in the market.

5. Notable Q&A Insights:

• Rutas de Lima Impairment: Management indicated that 40% of the impairment has been booked, but the situation remains fluid with ongoing legal proceedings.
• Retail Growth Impact: The pension fund withdrawals may initially flatten growth, but increased liquidity in November and December could positively affect collections and funding.
• Corporate Disbursements: Expected to remain subdued in the near term, with a focus on working capital replenishment rather than new large-scale projects.

Overall, IFS demonstrated strong financial performance in Q3 2025, with a solid outlook tempered by external economic factors and specific challenges related to Rutas de Lima and pension fund withdrawals.