Core Viewpoint - Investors in the Financial - Miscellaneous Services sector should consider Intercorp Financial Services Inc. (IFS) and HA Sustainable Infrastructure Capital (HASI) for potential value opportunities [1] Valuation Metrics - IFS has a forward P/E ratio of 8.60, while HASI has a forward P/E of 12.10, indicating IFS may be undervalued [5] - The PEG ratio for IFS is 0.38, suggesting a favorable valuation relative to its expected earnings growth, compared to HASI's PEG ratio of 1.05 [5] - IFS has a P/B ratio of 1.54, while HASI's P/B ratio is 1.7, further supporting IFS's valuation advantage [6] Earnings Outlook - IFS is currently exhibiting an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, suggesting it is the superior value option compared to HASI [7]

Core Viewpoint - A conflict has arisen between Intercorp, a major Peruvian conglomerate, and the local government of Miraflores, Lima, following the temporary closure of approximately 15 of its commercial spaces due to alleged safety violations [1][3]. Group 1: Company Overview - Intercorp is led by billionaire Carlos Rodríguez-Pastor and owns significant assets including Peru's third-largest bank, Interbank, and various retail and commercial chains [2]. - The conglomerate operates through subsidiaries such as Intercorp Financial Services Inc and Inretail Peru Corp, which manage banks and malls respectively [2]. Group 2: Incident Details - The closures began last week and affected various types of businesses, including banks, retail stores, restaurants, and movie theaters in the Miraflores neighborhood [1]. - The local mayor, Carlos Canales, stated that the closures were due to "critical" safety issues found during inspections, which he claimed were random [2][5]. Group 3: Legal and Regulatory Context - While Lima's municipalities have the authority to close businesses for local code violations, the scale of the closures targeting a single owner is considered unusual [3]. - Intercorp has contested the legality of the closures, asserting that they lack a technical or legal basis and coincided with a dispute over a canceled real estate deal with the municipality [3][4]. Group 4: Safety Concerns - The municipality cited safety concerns, including unreported gas cylinders at some Intercorp locations, and referenced a past incident involving a fatal roof collapse at a mall owned by an Intercorp subsidiary as a reason for heightened scrutiny [5]. - The exact status of the closures remains unclear, with reports indicating that some businesses, such as a movie theater chain, were not operational as of the latest updates [6]. Group 5: Industry Response - Several Peruvian business associations have expressed concerns regarding the fairness and proportionality of the closures, advocating for adherence to reasonable standards [6].

Group 1 - The article discusses the role of buy-side hedge professionals who conduct fundamental, income-oriented, long-term analysis across various sectors in developed markets globally [1] - It emphasizes the importance of engaging in discussions about investment ideas and strategies among professionals in the hedge fund industry [1] Group 2 - The article includes a disclosure from the analyst indicating a beneficial long position in the shares of IFS, highlighting personal investment interests [2] - It clarifies that the opinions expressed are those of the author and not influenced by any business relationships with companies mentioned [2]

Financial Data and Key Metrics Changes - The company reported a record net income of PEN 1.9 billion, marking a 49% increase compared to the prior year [10][12] - Return on equity (ROE) was strong at 16.8%, with an adjusted ROE of 18.5% excluding the Rutas de Lima impairment [10][20] - Risk-adjusted net interest margin (NIM) increased by 50 basis points to 4% in the last quarter, with a low cost of risk at 2.1% [12][13] Business Line Data and Key Metrics Changes - Interbank achieved a record net income of PEN 1.4 billion, supported by a decrease in cost of risk and an increase in risk-adjusted NIM [7][10] - Interseguro's written premiums grew by 61% year-over-year, driven by private annuities [12][13] - Inteligo reported a 68% increase in revenues, achieving an ROE of 21.5% [17][20] Market Data and Key Metrics Changes - The Peruvian economy is expected to grow by 3.3% in 2025, driven by consumption-related sectors and private investment [4][14] - The Peruvian sol appreciated by approximately 10% over the year, with inflation remaining stable around 1.5% [6][15] - Private investment is projected to grow by 9.5% for the full year, supported by a rebound in mining investment [15][16] Company Strategy and Development Direction - The company remains committed to a focus on profitable growth, prioritizing digital excellence and customer relationships [8][9] - Investments in technology and innovation are key to maintaining competitive advantage and enhancing customer experiences [9][22] - The company aims to strengthen its position in the Peruvian market while managing risks prudently [6][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's outlook, citing resilience in downturns and a solid foundation for long-term growth [9][10] - The company anticipates continued growth in higher-yielding loans and a gradual increase in cost of risk as the consumer and small business portfolios expand [29][51] - Management remains cautious due to political cycles and global market volatilities, but expects to maintain a stable growth trajectory [15][16] Other Important Information - The company made a PEN 205 million impairment related to Rutas de Lima, with no further material impairments expected [18][19] - The cost-to-income ratio stands at 36.8%, reflecting ongoing strategic investments [22][30] Q&A Session Summary Question: Impact of Rutas de Lima on future results - Management indicated that they expect no further material impacts from Rutas de Lima, having provisioned around 80% of the expected impairment [45][49] Question: Loan growth and asset quality expectations - Management expects continued growth in higher-yielding loans, with a slight increase in cost of risk anticipated as these loans grow [46][51] Question: Operating expenses growth outlook - Management indicated that operating expenses will likely grow in line with previous years as they continue to invest in technology and strengthen teams [47] Question: Long-term ROE targets - Management targets a midterm ROE of 18%, with potential for 20% as the higher-yielding loan book recovers [56][70]

Financial Data and Key Metrics Changes - The company reported a record net income of PEN 1.9 billion, marking a 49% increase compared to the prior year [11][19] - Return on equity (ROE) was strong at 16.8%, with an adjusted ROE of 18.5% excluding the Rutas de Lima impairment [14][22] - Risk-adjusted net interest margin (NIM) increased by 50 basis points to 4% in the last quarter, with a low cost of risk at 2.1% [14][28] Business Line Data and Key Metrics Changes - Interbank achieved a record net income of PEN 1.4 billion, supported by a decrease in cost of risk and an increase in risk-adjusted NIM [7][19] - The insurance segment, Interseguro, grew its written premiums by 61% year-over-year, driven by private annuities [14][15] - Inteligo, the wealth management segment, reported a double-digit growth in assets under management, reaching new record highs [9][39] Market Data and Key Metrics Changes - The Peruvian economy is projected to grow by 3.3% in 2025, supported by strong private investment and consumption [5][15] - The Peruvian sol appreciated by approximately 10% over the year, with inflation remaining stable [6][17] - Private investment is expected to grow by 9.5% in 2025, driven by mining and non-mining sectors [17][18] Company Strategy and Development Direction - The company is focused on profitable growth, prioritizing digital excellence and deepening primary customer relationships [10][34] - Investments in technology, including GenAI, are key to maintaining competitive advantage and enhancing customer experiences [10][25] - The strategy includes leveraging synergies between business segments to enhance value propositions, particularly in the payments ecosystem [9][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's outlook, citing resilience in the platform and a solid foundation for long-term decision-making [10][19] - The company remains cautious due to political cycles and global market volatilities, but expects to maintain profitability and market leadership [5][17] - Future growth is anticipated to be driven by higher-yielding loans and continued investment in technology [14][28] Other Important Information - The company made a PEN 205 million impairment related to Rutas de Lima, with no further material impairments expected [20][48] - The cost-to-income ratio stands at 36.8%, reflecting ongoing strategic investments [25][42] Q&A Session Summary Question: Impact of Rutas de Lima on 2026 - Management expects no further material impacts from Rutas de Lima, with 80% of provisions already accounted for [48][51] Question: Loan Growth and Asset Quality - Loan growth is expected to continue, particularly in higher-yielding segments, with a projected cost of risk around 2.5% [53][54] Question: Operating Expenses Growth - Operating expenses are expected to grow similarly to 2025 as the company continues to invest in technology and strengthen teams [49][50] Question: Sustainable ROE - Management targets a midterm ROE of 18%, with potential for higher returns depending on market conditions and growth in higher-yielding loans [57][58]

4Q25 IFS earnings presentation is.com.pe 2025 k ey messages 1 3 Solid performance across businesses +49 % YoY FY25 net profit 1,943 FY25 Net income IFS S/ mn 4 Strengthening primary banking relationships +11% +14% YoY retail primary banking customers 5 Insurance delivering solid double -digit growth + YoY written Higher -yielding loans continue positive trend +8 % YoY Improving risk - adjusted NIM 2.3 % CoR banking FY25 3.7 % FY25 Risk-adjusted NIM 3.1% Cost of funds FY25 61 premiums % WM continues to deliv ...

Financial Performance - Intercorp Financial Services' net profit for FY2025 was S/ 1,943 million, an increase of 48.6% YoY[5]. - The annualized ROE reached 16.8%, up from 12.6% in FY2024[4]. - Interbank's profit for 2025 was S/ 1,475 million, an increase of S/ 467.6 million, or 46.4% YoY[32]. - Interseguro's profits reached S/ 274.5 million in 2025, an increase of S/ 72.6 million, or 36.0%, compared to 2024[99]. - Inteligo reported a net profit of S/ 231.1 million in 2025, an increase of S/ 93.8 million compared to the previous year, reflecting a growth of 68.3%[124][128]. - Net profit for the year 2025 was S/ 1,943.2 million, compared to S/ 1,307.5 million in 2024, representing a significant increase[158]. - The company's total comprehensive income for the year, net of income tax, was S/ 2,110.2 million in 2025, compared to S/ 1,525.2 million in 2024[159]. Asset and Equity Growth - Total assets rose to S/ 99,097.4 million, a 3.8% increase YoY[15]. - Total equity attributable to IFS' shareholders increased by 3.9% YoY to S/ 12,348.6 million[15]. - The total assets of the company as of December 31, 2025, were S/ 99,097.4 million, up from S/ 95,503.8 million in 2024[156]. - The balance as of December 31, 2024, showed total equity of $10,978 million, reflecting a solid financial position[161]. Income and Revenue Streams - Fee income from financial services increased by 6.7% YoY, reaching S/ 1,219.6 million[9]. - Other income surged by 51.3% YoY, totaling S/ 1,197.9 million[9]. - The banking segment's net interest and similar income increased by S/ 82.6 million, attributed to a decrease of 40 basis points in the cost of funds, alongside a 12.7% increase in efficient funding[35]. - Other income increased by S/ 106.7 million, mainly due to higher income from FX transactions and property valuations[34]. - Net fee income from financial services increased by S/ 19.3 million YoY, or 9.2%, primarily due to stronger banking and credit card fee commissions[85]. Loan and Deposit Metrics - Higher-yielding loans grew by 8% YoY, representing 21.9% of the total loan book[4][25]. - Performing loans increased by 0.7% QoQ and 3.4% YoY, driven by a 4.6% growth in retail loans[44]. - Retail loans saw a 7.9% increase in mortgages and a 2.3% rise in credit cards and personal loans[46]. - Total deposits reached S/ 53,667.2 million, a 4.8% increase QoQ and 4.9% YoY[56]. - Retail deposits increased by S/ 2,473.9 million, with an 8.7% increase attributed to pension fund withdrawals[52]. Risk and Efficiency Metrics - The cost of risk for FY2025 was 2.3%, a reduction of 130 basis points compared to FY2024[25]. - The efficiency ratio for the banking segment was 41.1% in 2025, compared to 38.9% in 2024[33]. - The efficiency ratio worsened to 42.3% in 4Q25, an increase of 150 basis points QoQ and 410 basis points YoY[91]. - The S3 NPL ratio improved to 2.3% as of 4Q25, down from 2.5% in 4Q24, indicating better asset quality[83]. Digital and Market Expansion - The company aims to enhance its digital platform and maintain a significant market share in consumer banking loans, with approximately 20% market share[146][147]. - The share of retail digital customers rose from 81% in 2024 to 84% in 2025, while digital self-service usage among retail clients improved from 78% to 82%[149]. - Plin transactions increased by 48% YoY, with active users growing by 11% YoY, while Izipay transaction volumes rose by 7% YoY[150]. - Digital insurance premiums reached S/ 33.6 million in 4Q25, up from S/ 27.2 million in 4Q24, reflecting a growing digital adoption rate[151]. Investment and Financial Instruments - Total financial investments reached S/ 28,173,806 as of December 31, 2025, up from S/ 26,857,925 in 2024, indicating a year-over-year increase of 4.7%[193]. - The fair value of these investments increased to approximately S/ 4,026,559,000 in 2025 from S/ 3,775,935,000 in 2024, with effective annual interest rates ranging from 4.36% to 7.76%[197]. - The total financial instruments at fair value through profit or loss increased to S/ 1,965,991,000 in 2025 from S/ 1,776,567,000 in 2024[200]. - The company held investments in local and foreign mutual funds amounting to S/ 1,726,722,000 as of December 31, 2025, compared to S/ 1,396,582,000 in 2024[200].

Core Viewpoint - Intercorp Financial Services Inc. (IFS) will host its Fourth Quarter 2025 earnings conference call on February 12, 2026, at 9:00 a.m. E.T. / 9:00 a.m. Lima Time, following the release of its financial results on February 11, 2026 [1][2]. Company Overview - Intercorp Financial Services Inc. is incorporated under the laws of Panama and has securities listed on both the Lima Stock Exchange and the New York Stock Exchange [4]. - IFS is a leading provider of financial services in Peru, with main subsidiaries including Interbank, Interseguro, and Inteligo [4]. - Interbank offers full-service banking to retail and commercial customers, while Interseguro provides various insurance products, including annuities and life insurance [4]. - Inteligo focuses on wealth management services and brokerage services [4]. Conference Call Details - The conference call will feature presentations from key executives, including the CEO of IFS, the CFO, and CEOs of its subsidiaries [2]. - Access to the conference call is available 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]. Quiet Period - IFS has entered a Quiet Period starting January 20, 2026, during which it will not disclose any financial information or comment on its financial results until after the Fourth Quarter 2025 results are published [3].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Intercorp Financial Services (IFS) as a strong value stock based on its financial metrics and Zacks Rank [1][3][6] Value Investing - Value investing is a popular strategy for identifying great stocks across various market conditions, utilizing established valuation metrics [2] Intercorp Financial Services (IFS) Overview - IFS currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [3] - The stock has a Price-to-Book (P/B) ratio of 1.46, which is attractive compared to the industry average of 3.24 [4] - Over the past year, IFS's P/B ratio has fluctuated between a high of 1.53 and a low of 1.04, with a median of 1.26 [4] - IFS has a Price-to-Cash Flow (P/CF) ratio of 7.19, significantly lower than the industry average of 16.94, suggesting it may be undervalued [5] - The P/CF ratio for IFS has ranged from a high of 8.71 to a low of 6.22 over the past 12 months, with a median of 7.53 [5] - These financial metrics indicate that IFS is likely undervalued and has a strong earnings outlook, making it an impressive value stock [6]

Core Insights - IFS has launched IFS Cloud 25R2, introducing advanced agentic AI capabilities that enhance industrial operations by integrating Digital Workers into the workforce, addressing labor shortages and operational challenges [2][3][4] Group 1: Product Features and Innovations - IFS Cloud 25R2 features IFS Loops Digital Workers that can think, decide, and act autonomously, significantly increasing operational efficiency in industrial settings [2][7] - The new release embeds AI deeply into industrial workflows, enabling automation of complex processes and reducing the burden of repetitive tasks that consume 40-60% of staff capacity [6][10] - Digital Workers are designed to operate 24/7, ensuring continuous workflow execution without downtime, and are fully auditable for compliance in regulated industries [7][8] Group 2: Market Context and Challenges - The industrial sector is facing a capacity crisis, with £17 trillion of capital being invested to modernize infrastructure and address labor shortages, as 50% of the workforce is set to retire in the next five years [3][4] - IFS emphasizes that generic AI solutions are inadequate for industrial applications, highlighting the need for specialized AI tools that can handle the complexities of industrial operations [5][8] Group 3: Customer Impact and ROI - IFS customer Kodiak Gas Services reported that engaging with IFS Loops could yield an ROI of $3 million annually and free up 90,000 hours for field service technicians [4] - The integration of AI in operations has led to significant cost savings, with one customer achieving a 30% reduction in operational costs through streamlined processes [9][10] Group 4: Sustainability and Compliance - IFS Cloud 25R2 incorporates sustainability practices into operational decisions, enhancing compliance and sustainability reporting while driving profitability [10] - New AI-driven capabilities in the suite support real-time orchestration of operations, ensuring that sustainability is integrated into everyday business processes rather than treated as an afterthought [10][12]