Credicorp (BAP) Q2 2024 earnings summary

Executive summary

• Achieved a 16.2% ROE in Q2 2024, driven by universal banking, insurance, and investment management, with robust loan growth and high transactional activity, offsetting high provisions.

• Digital transformation accelerated, with Yape surpassing breakeven ahead of schedule, increased digital engagement, and 12.3 million monthly active users.

• Peru's economic environment is improving, with GDP growth expected at 3% for 2024, supported by strong commodity prices, increased public investment, and low inflation.

• Despite challenges in the microfinance sector, especially at Mibanco, the group remains confident in its hybrid business model and is conducting a thorough risk review.

• Net income attributable to Credicorp was S/1,339.1 million, down 11.4% QoQ and 4.4% YoY; efficiency ratio improved 19 bps YoY to 44.3%.

Financial highlights

• Net interest income (NII) grew 8.2% YoY, with NIM at 6.33% for the quarter and risk-adjusted NIM at 4.4%.

• Total loans grew 2.9% YoY and 1.3% QoQ in average daily balances; deposits grew 2.8% QoQ and 6.0% YoY, with low-cost deposits at 54.5%–68.2% of total.

• Core income rose 3.9% QoQ and 10.5% YoY, mainly from NII, fee income, and FX transactions.

• NPL ratio at 6.0% (+33/34 bps YoY), coverage at 95.0%; cost of risk at 3.0%.

• Efficiency ratio improved to 44.3% year-to-date, reflecting disciplined cost control and digital investments.

Outlook and guidance

• 2024 guidance reaffirmed: GDP growth ~3.0%, loan growth 1.0–3.0%, NIM 6.0–6.4%, cost of risk 2.0–2.5%, efficiency ratio 46–48%, ROE ~17%.

• Mibanco's recovery is slower than anticipated amid persistent credit cycle challenges.