IFS Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: PEN 640 million, a 3% decline from the previous quarter, primarily due to normalization of investment results and cost of risk.

Return on Equity (ROE): 18.5%, above the midterm target.

Loan Growth: 12% year-over-year, with a 6% increase in the quarter, particularly strong in consumer loans (9% growth) and small business loans (31% growth).

Cost of Risk: Increased to 2.1%, up from 1.4% in the previous quarter, but still below the risk appetite and previous year's 2.5%.

Net Interest Margin (NIM): Resilient at 3.5%, though slightly pressured by increased funding costs and a shift in deposit mix.

2Strategic Updates and Business Highlights

Digital Strategy: Continued investment in digital channels, data analytics, and cybersecurity, with a focus on enhancing customer engagement through platforms like Izipay and PLIN.

Insurance and Wealth Management: Interseguro reported strong growth, particularly in annuities and life insurance, while Inteligo achieved record assets under management of nearly $10 billion.

Customer Engagement: Retail primary banking customer base grew by 16%, and the Net Promoter Score remained strong at 61 points.

3Forward Guidance and Outlook

Economic Growth: GDP growth expected to be around 3.4% for 2026, supported by resilient domestic demand and private investment.

Loan Growth: High single-digit growth anticipated for the full year, with a focus on maintaining profitability amid potential El Niño impacts.

ROE Guidance: Expected to remain above 17% for the full year, despite potential provisions for El Niño-related risks.

4Bad News, Challenges, or Points of Concern

El Niño Risks: The potential impact of the El Niño phenomenon is being closely monitored, with expectations for increased provisions in the second half of the year, particularly affecting consumer and small business segments.

Cost of Risk Normalization: While the increase in cost of risk is seen as a normalization, it raises concerns about future credit quality, especially in vulnerable sectors.

Funding Costs: Increased funding costs due to higher treasury funding and inflation adjustments, which may pressure margins in the short term.

5Notable Q&A Insights

El Niño Provisions: Management indicated that while provisions may be necessary, they expect a lower impact compared to previous years due to a more stable portfolio and proactive client engagement.

Margins Outlook: Management expects a recovery in NIM in the latter half of the year, driven by growth in higher-yielding loans and normalization of funding costs.

Political Environment: The new administration in Peru is viewed positively, with expectations for economic reforms and stability, which could benefit the financial sector.

Sensitivity to Policy Rates: The theoretical sensitivity to a 100 basis point increase in rates is a 10 basis point negative impact on NIM, indicating a cautious approach to interest rate fluctuations. This summary encapsulates the key points from IFS's Q2 2026 earnings call, highlighting both the strengths and challenges the company faces in the current economic landscape.