Core Viewpoint - The comparison between Intercorp Financial Services Inc. (IFS) and SoFi Technologies, Inc. (SOFI) indicates that IFS is currently a more attractive option for value investors based on various valuation metrics [1][6]. Valuation Metrics - IFS has a forward P/E ratio of 8.59, significantly lower than SOFI's forward P/E of 81.67, suggesting that IFS is undervalued relative to SOFI [5]. - The PEG ratio for IFS is 0.35, indicating a favorable valuation when considering expected earnings growth, while SOFI's PEG ratio stands at 3.09, suggesting overvaluation [5]. - IFS's P/B ratio is 1.45, which is more favorable compared to SOFI's P/B ratio of 4.14, further supporting the argument that IFS is the superior value option [6]. Earnings Outlook - Both IFS and SOFI hold a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and an improving earnings outlook for both companies [3].

Core Insights - Intercorp Financial Services Inc. (IFS) is currently more attractive to value investors compared to Brookfield Asset Management (BAM) based on various valuation metrics and earnings estimate revisions [1][3][7] Valuation Metrics - IFS has a forward P/E ratio of 8.74, significantly lower than BAM's forward P/E of 38.52, indicating that IFS is undervalued relative to BAM [5] - The PEG ratio for IFS is 0.36, while BAM's PEG ratio is 2.20, suggesting that IFS has a better growth outlook relative to its valuation [5] - IFS has a P/B ratio of 1.42 compared to BAM's P/B of 11.16, further indicating that IFS is more attractively priced [6] Earnings Estimate Revisions - IFS has a Zacks Rank of 2 (Buy), reflecting positive earnings estimate revisions, while BAM has a Zacks Rank of 4 (Sell), indicating a less favorable earnings outlook [3][7] - The stronger estimate revision activity for IFS suggests a more favorable earnings outlook compared to BAM [7]

Leveraging our expertise in the European banking sector, we identified a mispriced opportunity in South America. Since our initiation of coverage with the report titled Intercorp Financial Services Is Ready to Buy-side hedge professionals conducting fundamental, income oriented, long term analysis across sectors globally in developed markets. Please shoot us a message or leave a comment to discuss ideas.DISCLOSURE: All of our articles are a matter of opinion, informed as they might be, and must be treated a ...

Financial Data and Key Metrics Changes - The company reported a net income of $580 million for Q2 2025, which is double the amount reported a year ago and 30% higher than the previous quarter [21] - Return on equity (ROE) reached approximately 21%, reflecting strong year-over-year recovery [15][21] - Cost of risk stood at 2.5%, which is 150 basis points lower than the previous year, indicating improved asset quality [15][33] - Total loans grew by 6% year over year, outperforming the system by a multiple of around 3x [29] Business Line Data and Key Metrics Changes - The Wealth Management segment, through Intelligo, saw assets under management grow by 14% year over year, reaching new highs [12][44] - Interseguro reported a 77% increase in written premiums year over year, driven by growth in private annuities and life insurance [15][44] - The commercial banking segment gained 90 basis points in market share, supported by a focus on mid-sized companies and synergies with EasyPay [10][29] Market Data and Key Metrics Changes - The Peruvian economy showed an accumulated growth of 3.1% as of May 2025, with private investment projected to grow by 5% this year [7][8] - Inflation remains under control, with the reference rate at 4.5%, contributing to a stable economic environment [17] - Consumer confidence is improving, supporting domestic consumption, although loan growth remains below 2% year over year [19][20] Company Strategy and Development Direction - The company aims to achieve digital excellence, focusing on becoming the leading digital platform in Peru with a comprehensive suite of services [12][13] - There is a strategic emphasis on strengthening the payment ecosystem through Plin and EasyPay, enhancing transactional volumes and customer engagement [31] - The company is investing in technology to support long-term growth, with a focus on resilience, user experience, and advanced analytics [25][39] Management's Comments on Operating Environment and Future Outlook - Management expressed moderate optimism about Peru's growth outlook, despite potential volatility from international contexts and upcoming elections [8][9] - The company expects a more dynamic second half for the financial system, with total loans projected to grow around 5% [20] - Management highlighted the importance of maintaining a cautious approach to ensure healthy growth in the consumer portfolio [28] Other Important Information - The company reported a 10% year-over-year growth in retail primary banking customers, indicating a strengthening of primary banking relationships [15][40] - The cost of funds remained stable, with an improvement of 40 basis points year over year due to a better funding mix [15][37] - The company is focused on sustainability, with a sustainable loan portfolio reaching $400 million and various initiatives to promote inclusive growth [52][53] Q&A Session Summary Question: NIM expectations and asset quality trends - Management expects NIM to improve in the second half of the year, driven by a shift in portfolio mix towards more consumer loans [62] - Cost of risk is expected to remain below guidance, with a slight increase anticipated as the consumer loan book resumes growth [65][66] Question: OpEx growth trends for the second half and next year - OpEx is expected to continue increasing, but at a slower rate compared to the current year, aligning more closely with business growth [76][77] - Investments in technology and analytics will contribute to OpEx growth, but the focus remains on maintaining efficiency [72][75]

Financial Data and Key Metrics Changes - The company reported a net income of $580 million for Q2 2025, which is double the amount reported a year ago and 30% higher than the previous quarter, resulting in a return on equity (ROE) of approximately 21% [16][22][55] - The cost of risk stood at 2.5%, which is 150 basis points lower than the previous year, indicating improved asset quality [16][34] - The cost of funds remained stable this quarter, showing an improvement of 40 basis points year over year, primarily due to a better funding mix [16][38] Business Line Data and Key Metrics Changes - Interbank showed solid momentum in commercial banking, gaining 90 basis points in market share within the mid-sized companies segment [11][30] - The Wealth Management segment through Intelligo delivered strong results, with assets under management growing 14% year over year [13][45] - Interseguro reported significant growth in private annuities and life insurance, with written premiums increasing by 77% year over year [16][48] Market Data and Key Metrics Changes - The Peruvian economy experienced an accumulated growth of 3.1% as of May 2025, driven by increased consumption and private investment projected to grow by 5% this year [8][9] - The Central Bank revised its internal demand forecast for 2025 from 3.5% to 4.4%, indicating strong private consumption and investment [20][19] - Total loans grew 6% year over year, outperforming the system by a multiple of around 3x, resulting in a gain of 30 basis points in total market share [30][52] Company Strategy and Development Direction - The company aims to achieve digital excellence for customers, focusing on becoming the leading digital platform in the country with a comprehensive suite of services [13][14] - There is a strategic focus on strengthening the payment ecosystem with Plin and EasyPay, enhancing transactional volumes and customer engagement [32][40] - The company is investing in technology to support long-term growth, with a focus on resilience, user experience, and advanced analytics [26][72] Management's Comments on Operating Environment and Future Outlook - Management expressed moderate optimism about Peru's growth outlook, despite potential volatility from international contexts and upcoming presidential elections [9][10] - The company expects an improvement in NIM in the second half of the year, driven by a recovery in the consumer loan portfolio [63][64] - The cost of risk is anticipated to remain below guidance, supporting profitability despite lower margins [52][66] Other Important Information - The company reported a 10% growth in retail primary banking customers over the last year, reflecting strengthened primary banking relationships [16][41] - The digital customer base increased, with retail digital customers reaching 83% and commercial digital clients at 74% [43][44] - The company continues to focus on sustainability, with a sustainable loan portfolio reaching $400 million and various initiatives supporting environmental and social goals [53][54] Q&A Session Summary Question: NIM expectations and asset quality trends - Management indicated that NIM is expected to improve in the second half of the year, with a potential close to the target of 5.4% as the consumer portfolio resumes growth [63][64] - The cost of risk is expected to increase slightly as the consumer loan book grows, with guidance around 3% for the year [66] - OpEx growth is anticipated to continue but at a slower rate, aligning more closely with inflation [76][78]

Financial Performance Highlights - IFS's quarterly net profit in 2Q25 reached S/ 579.6 million, a 29.9% increase QoQ [207] - IFS achieved a ROE of 20.7% in 2Q25 [34] - Banking sector ROE was 11.1% in 2Q25 [35] - Wealth Management saw a significant ROE increase to 43.9% in 2Q25, approximately 20x YoY [35] - Insurance sector ROE was 58.3% in 2Q25 [35] Business Trends and Growth - System loan book as of June 2025 showed a QoQ increase of 3.1% and a YoY increase of 1.7% [31] - Total commercial loans increased by 4.1% QoQ and 9.8% YoY [202] - Total retail loans increased by 1.1% QoQ and 1.2% YoY [202] - Total deposits increased by 2.7% QoQ and 7.4% YoY, reaching S/ 52,036.0 million [204] Key Ratios and Indicators - IFS's cost-to-income (C/I) ratio was 35.9% in 2Q25 [45] - Banking sector's C/I ratio was 42.3% in 2Q25 [49] - Banking sector's NIM was 5.1% [136] - The cost of risk for the banking sector is at 2.5% [139]

Core Insights - Intercorp Financial Services Inc. (IFS) is expected to report second-quarter 2025 results on August 11, with anticipated year-over-year earnings growth driven by higher revenues despite increased provisions for credit losses and expenses [1][10]. Revenue Factors - A significant portion of IFS's revenue comes from spread income, and a recent 25 basis point cut in Peru's benchmark interest rate to 4.50% is expected to support loan demand [3]. - The company is likely to have experienced a decline in deposit costs, contributing to an increase in net interest and similar income, as well as an expansion in net interest margin due to lower deposit repricing [4]. - Strong asset inflows from a decent equity market performance are expected to enhance IFS's assets under management, benefiting its wealth management operations and increasing net fee income from banking services and credit card activity [5][10]. Expense Factors - Higher salaries, employee benefits, and administrative expenses are anticipated to keep the expense base elevated, alongside increased costs related to the company's digitization efforts [6][10]. Earnings Expectations - The consensus estimate for IFS's earnings is $1.07 per share, reflecting a 62.1% increase from the previous year [2][10]. - The company's earnings surprise history shows it has surpassed the Zacks Consensus Estimate in four of the last five quarters, with an average beat of 17.26% [2]. Zacks Model Insights - The quantitative model indicates that IFS lacks the necessary combination of positive Earnings ESP and a Zacks Rank better than 3 (Hold) for a conclusive prediction of an earnings beat this time [7][8].

Core Viewpoint - Intercorp Financial Services Inc. (IFS) is set to host its Second Quarter 2025 earnings conference call on August 12, 2025, following the release of its financial results on August 11, 2025 [1][2]. Group 1: Earnings Conference Call Details - The conference call will feature key executives including Mr. Luis Felipe Castellanos (CEO), Ms. Michela Casassa (CFO), and other CEOs from its subsidiaries [2]. - The call can be accessed via specific phone numbers for both U.S. and international participants, with a dedicated conference ID [2]. - A live video webcast will be available, and a replay will be accessible shortly after the call concludes [2]. Group 2: Corporate Disclosure Policy - IFS will enter a Quiet Period starting July 20, 2025, which will last until the financial results are published, during which no financial information will be disclosed [3]. Group 3: Company Overview - Intercorp Financial Services Inc. is incorporated in Panama and listed on both the Lima Stock Exchange and the New York Stock Exchange [4]. - The company is a leading provider of financial services in Peru, with main subsidiaries including Interbank, Interseguro, and Inteligo [4]. - Interbank offers general banking services, Interseguro provides various insurance products, and Inteligo focuses on wealth management and brokerage services [4].

Core Viewpoint - Intercorp Financial Services (IFS) is highlighted as a strong investment opportunity with a Zacks Rank 1 (Strong Buy) and a notable increase in earnings estimates [1]. Company Summary - Intercorp Financial Services provides financial products and services and has seen a 2.6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1]. - The company has a price-to-earnings ratio (P/E) of 8.74, significantly lower than the industry average of 25, indicating strong value characteristics [1]. - Intercorp Financial Services possesses a Value Score of A, further emphasizing its attractiveness to investors [1].

Core Viewpoint - The article compares Intercorp Financial Services Inc. (IFS) and American Express (AXP) to determine which stock is more attractive to value investors [1]. Group 1: Company Rankings and Outlook - IFS currently holds a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to AXP, which has a Zacks Rank of 3 (Hold) [3]. - The improvement in earnings outlook for IFS is noted to be stronger than that of AXP [3]. Group 2: Valuation Metrics - IFS has a forward P/E ratio of 8.71, significantly lower than AXP's forward P/E of 20.86, suggesting that IFS may be undervalued [5]. - The PEG ratio for IFS is 0.35, while AXP's PEG ratio is 1.54, indicating that IFS has a better valuation relative to its expected earnings growth [5]. - IFS has a P/B ratio of 1.46 compared to AXP's P/B of 7.12, further supporting the notion that IFS is undervalued [6]. - These metrics contribute to IFS earning a Value grade of A, while AXP has a Value grade of C, making IFS a more attractive option for value investors [6].