Intercorp Financial Services (IFS) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw strong economic recovery in Peru, with GDP growth above 5% in April and May, and inflation trending downward to 2% in May, supporting improved financial results.

• Net profit for 2Q24 was S/ 286.2 million, doubling quarter-over-quarter but down year-over-year; annualized ROE reached 11.2%.

• Core banking franchise advanced with significant growth in commercial banking, improved risk indicators, and continued digital transformation, with 81% of banking customers using digital channels.

• Interbank consolidated its position as the third largest bank in mid-sized companies and total deposits, while Interseguro maintained market leadership in annuities with a 29% share.

• Strategic focus remains on profitable growth, digital excellence, ESG improvements, and leveraging synergies among business units.

Financial highlights

• Net income more than doubled quarter-over-quarter to PEN 286 million, with ROE rising to 11.2%.

• Cost of risk decreased by 70 basis points quarter-over-quarter to 4.0%, and cost of funds improved by 40 basis points.

• Revenue grew 2% year-over-year, mainly from insurance, while wealth management revenues declined; NIM at 5.2% in Q2.

• Efficiency ratio at 38.6% for IFS and Interbank in Q2 2024.

• Banking segment net profit S/221mn (+58% QoQ, -20% YoY); insurance S/88mn (+4x QoQ, -11% YoY); wealth management S/9mn (2x QoQ, -14% YoY).

Outlook and guidance

• GDP growth for Peru expected at 3% in 2024, with internal demand and private investment showing optimism.

• Year-end ROE projected above 12%, with mid-term target of 18%.

• Loan growth guidance at 4.5% for the year, supported by commercial banking; mid-single digit loan growth expected.

• Cost of risk expected to continue declining, aiming for mid-3% by year-end; efficiency ratio guidance at ~37%.

• Focus remains on cost control, risk management, and digital/ESG improvements.