Core Insights - Intercorp Financial Services Inc. (IFS) is currently rated as a Strong Buy with a Zacks Rank of 1, while SoFi Technologies, Inc. (SOFI) holds a Zacks Rank of 3, indicating a Hold status [3] - IFS has demonstrated a stronger improvement in its earnings outlook compared to SOFI, making it a more attractive option for value investors [3][7] Valuation Metrics - IFS has a forward P/E ratio of 8.91, significantly lower than SOFI's forward P/E of 98.77, indicating that IFS may be undervalued [5] - The PEG ratio for IFS is 0.37, while SOFI's PEG ratio stands at 3.73, suggesting that IFS has a better growth-to-price ratio [5] - IFS has a P/B ratio of 1.53 compared to SOFI's P/B of 5.14, further highlighting IFS's relative undervaluation [6] Value Grades - IFS has received a Value grade of B, while SOFI has been assigned a Value grade of F, indicating that IFS is viewed as a more favorable investment based on traditional valuation metrics [6]

Core Points - Intercorp Financial Services Inc. (IFS) will host its Third Quarter 2025 earnings conference call and video webcast presentation on November 07, 2025, at 9:00 a.m. E.T. / 9:00 a.m. Lima Time [1][2] - The company will release its Third Quarter 2025 results on November 06, 2025, after market close [2] - A Quiet Period will commence on October 20, 2025, during which IFS will not disclose any financial information or comment on its financial results or operations [3] Company Overview - Intercorp Financial Services Inc. is incorporated under the laws of Panama and has securities listed on 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, and Inteligo focuses on wealth management and brokerage services [4]

Core Insights - Intercorp Financial Services Inc. (NYSE:IFS) is a dividend stock that is gaining attention due to its integration of AI technology and customer-centric approach [1][2] - The company is focused on digital excellence and profitable growth through technological investments and collaborations [2][3] Company Overview - Intercorp Financial Services Inc. is a Peru-based financial services provider offering banking, insurance, wealth management, and payment services for retail and commercial clients [4] - The company has a long history, being incorporated in 1897, and is dedicated to enhancing financial well-being [4] Investment Activity - Lingohr Asset Management GmbH has recently acquired 40,535 shares of Intercorp Financial Services, making it the firm's fifth largest holding, valued at approximately $1,532,000 [1] Technological Focus - The company is investing in technology to enhance capacity, AI, user experience, and cybersecurity [3] - The CEO, Luis Felipe Castellanos Lopez-Torres, emphasizes the ambition to become the leading digital platform in Peru, focusing on key businesses and providing a comprehensive suite of services [3]

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]

Core Insights - The article highlights a mispriced investment opportunity in South America identified by leveraging expertise in the European banking sector [1] Group 1: Investment Opportunity - The coverage initiation report titled "Intercorp Financial Services Is Ready to Buy" suggests a favorable outlook for Intercorp Financial Services [1] - The analysis is aimed at buy-side hedge professionals focusing on fundamental, income-oriented, long-term investment strategies across global developed markets [1]

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]

Financial Performance - Net income for Intercorp Financial Services in Q2 2025 was S/ 579.6 million, a 29.9% increase QoQ and a significant increase of S/ 293.4 million YoY[4]. - The company achieved an annualized ROE of 20.7% in Q2 2025, up from 16.3% in Q1 2025 and 11.2% in Q2 2024[4][25]. - Net profit for the period ended June 30, 2025, was S/ 1,025.7 million, compared to S/ 427.3 million in the same period of 2024[160]. - Earnings per share attributable to IFS's shareholders increased to S/ 9.058 from S/ 3.710 YoY[160]. - Total comprehensive income for the period, net of income tax, was S/ 1,122.9 million, compared to S/ 628.8 million in the prior year[161]. - The return on equity (ROE) for Inteligo stood at 43.9% in 2Q25, significantly higher than 14.2% in 1Q25[125]. Income and Revenue - Other income surged by S/ 211.7 million YoY, primarily due to higher mark-to-market valuations in the wealth management business[12][13]. - Commission income increased by 7.8% QoQ and 17.0% YoY, driven by higher transaction volumes in the banking business[3][16]. - Net fee income from financial services increased by S/ 17.9 million YoY, or 9.2%, mainly due to higher commissions from credit card services and banking services[85]. - Other income increased by S/ 19.0 million YoY, primarily driven by higher net gains on financial investments and property sales[89]. - Total other income for 2Q25 was S/ 147.5 million, a decrease of 5.8% QoQ but an increase of 14.8% YoY[91]. Asset Management - Assets under management (AuMs) grew by 3.5% QoQ and 13.9% YoY, indicating strong performance in wealth management[3]. - Inteligo's net profit reached S/ 117.0 million in 2Q25, an increase of S/ 79.5 million QoQ and S/ 110.7 million YoY, primarily due to mark-to-market profits on proprietary portfolio investments[122]. - Assets under management (AUM) grew by 3.5% QoQ to US$ 7,766 million and by 13.9% YoY, attributed to inflows in mutual funds and private wealth management[128][129]. Loan and Deposit Growth - Total performing loans rose by 2.5% QoQ and 5.2% YoY, totaling S/ 48,282.0 million, driven by a 4.1% increase in commercial loans and a 1.1% increase in retail loans[32]. - Total deposits increased by 2.7% QoQ and 7.4% YoY, reaching S/ 52,036.0 million, with commercial deposits rising by 7.9%[50]. - Direct loans increased to S/ 40,201,836,000 as of June 30, 2025, up from S/ 38,456,682,000 at the end of 2024, reflecting a growth of approximately 4.5%[199]. - Total loans, net, reached S/ 50,415,084,000 as of June 30, 2025, compared to S/ 49,229,448,000 at the end of 2024, indicating a year-over-year increase of about 2.4%[199]. Risk and Loan Quality - The cost of risk (CoR) improved to 2.5%, down 150 basis points YoY, reflecting better payment behavior and a shift towards lower-risk credit segments[3]. - The proportion of past due loans decreased by 19.3% YoY, indicating improved loan quality[32]. - The S3 non-performing loan (NPL) ratio remained stable at 2.5%, with a cost of risk at 2.5% in 2Q25, lower than 2.8% in 1Q25[76]. - The impairment loss on loans, net of recoveries, was S/(000) 651,278 for the first half of 2025, down from S/(000) 1,023,253 in 2024, indicating improved loan performance[164]. Capital and Funding - The bank's total capital ratio stood at 16.9% as of 2Q25, down from 17.2% in 1Q25 but up from 15.0% in 2Q24[95]. - Risk-weighted assets (RWA) increased by 4.6% QoQ, mainly due to higher capital requirements for credit risk resulting from an increase in loans[97]. - The bank's total funding base increased by 2.7% QoQ, with deposits and obligations accounting for 80.4% of total funding[43]. - The average cost of funding remained stable at 3.2% in 2Q25 compared to 1Q25, with a net interest margin of 5.1%[65]. Digital Transformation and Customer Engagement - Digital customer base grew by 5.2% YoY, with retail digital clients increasing from 80% to 83%[145]. - Plin active users grew by 13% YoY, with transaction volumes increasing by 1.5x YoY, while Izipay transaction volumes rose by 12% YoY[146]. - The share of digital self-service in insurance reached 68.8%, up from 65.8% in 2Q24, indicating stronger online channel engagement[153]. - In wealth management, digital users of Interfondos accounted for 28.8% of total users, up from 22.7% in 2Q24[155]. Financial Position - Total assets as of June 30, 2025, amounted to S/ 97,592.3 million, up from S/ 95,503.8 million at the end of 2024[159]. - The company’s cash and cash equivalents at the end of the period were S/(000) 12,173,002, compared to S/(000) 9,829,024 at the end of June 2024, indicating strong liquidity[165]. - Financial investments totaled S/27,313,781 as of June 30, 2025, an increase of 3.47% from S/26,397,552 as of December 31, 2024[192].