Intercorp Financial Services (IFS) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 more than doubled year-over-year, reaching S/ 390 million, with ROE above 15% and strong recovery across all business lines.

• Earnings recovery was driven by improved banking and investment results, lower cost of risk, and a better funding mix.

• Customer base expanded across all segments, with digital banking customers up 12% YoY and insurance customers up 16% YoY.

• Digital transformation advanced, with 81% of retail banking customers now digital and strong growth in digital sales and self-service.

• ESG and sustainability scores improved, with the CSA score rising from 61 to 69, percentile 93%.

Financial highlights

• Net income for Q3 2024 doubled year-over-year and rose 36% sequentially, with ROE at 15.1% and NIM at 5.3%.

• Total revenues for Q3 2024 were S/ 1,758 million, up 4% QoQ and 5% YoY.

• Cost of risk dropped to 3.1% in Q3, nearing normalized levels, and NPLs at 2.9%-3.1%.

• Fee income increased 5% quarter-over-quarter, mainly from banking and wealth management.

• Deposits grew 13% year-over-year, with savings deposits up 18%.

Outlook and guidance

• NIM expected to recover in 2025, supported by lower funding costs and a gradual shift back to higher-yield consumer loans.

• Cost of risk anticipated to remain around current levels, with some upward pressure as state guarantees mature.

• Fee income growth expected to accelerate in 2025, driven by Izipay, consumer loans, and wealth management.

• ROE targeted to approach 18% by late 2025, contingent on consumer loan recovery and stable cost of risk.

• Loan growth expected to rebound in Q4 2024, with a strategic aim to outpace market growth sustainably in 2025.