IFS — Intercorp Financial Services Inc.

Summary of Intercorp Financial Services (IFS) Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Net Income: Achieved a record PEN 1.9 billion, a 49% increase year-over-year.
• Return on Equity (ROE): Approximately 16.8% for 2025; 18.5% when excluding the Rutas de Lima impairment.
• Loan Growth: Total loan portfolio grew by 4% year-over-year; higher-yielding loans increased by 8%.
• Risk-Adjusted Net Interest Margin (NIM): Improved by 50 basis points to 4% in Q4; full-year NIM at 5.2%.
• Cost of Risk: Maintained at 2.1% for the year, with a quarterly cost of risk at 1.8%.
• Deposits: Increased by 5% year-over-year, with a focus on low-cost deposits.

2. Strategic Updates and Business Highlights

• Interbank: Recorded net income of PEN 1.4 billion, driven by lower cost of risk and improved net interest margins.
• Interseguro: Continued strong performance in private annuities and life insurance, achieving a 61% increase in written premiums.
• Inteligo (Wealth Management): Grew assets under management to $9.1 billion, with a 68% revenue increase.
• Digital Initiatives: Continued investment in technology and digital platforms, including enhancements to PLIN and Izipay, which are driving customer engagement and transaction volumes.

3. Forward Guidance and Outlook

• 2026 Expectations: Anticipated ROE of around 17%, with high single-digit loan growth expected to exceed 2025 levels.
• NIM Outlook: Slight improvement expected as higher-yielding loans grow and cost of funds decrease.
• Market Position: IFS aims to maintain its leadership in the Peruvian market, leveraging a strong macroeconomic backdrop and digital strategy.

4. Bad News, Challenges, or Points of Concern

• Rutas de Lima Impairment: A significant impairment of PEN 205 million impacted results, although no further impairments are expected.
• Political Risks: The upcoming elections pose potential risks to economic stability and investor confidence, with concerns about market-unfriendly candidates.
• Market Share Loss: IFS has seen a decline in market share in certain segments, particularly in consumer loans, due to competitive pressures and the impact of pension fund withdrawals on loan growth.

5. Notable Q&A Insights

• Rutas de Lima: Management expressed confidence that no further impairments would occur, with approximately 80% of the provision already accounted for.
• Loan Growth and Asset Quality: Higher-yielding loans are expected to drive growth, but may also slightly increase the cost of risk.
• ROE Projections: The bank's ROE recovery is contingent on the growth of higher-yielding loans, with management cautious about aggressive growth due to political uncertainties.
• PLIN Market Share: Estimated at around 15% of the P2P and P2M market, with Interbank holding over half of that share, indicating strong growth potential in the digital payments space.

Overall, IFS reported strong financial results and maintained a positive outlook despite facing challenges from political risks and competitive pressures. The focus on digital transformation and strategic investments positions the company well for future growth.