Credicorp .(BAP) - 2024 Q4 - Annual Report

Financial Performance - Net income attributed to Credicorp in 4Q24 was S/1,126.7 million, a decline of 26.1% QoQ but an increase of 33.8% YoY, with ROE at 13.3% impacted by one-off charges related to the Sartor case[6] - Core income expanded by 1.7% QoQ and 8.9% YoY, supported by strong net interest income and record-high transactional volumes[6] - Net profit attributable to Credicorp for 4Q24 was S/1,126,713, a 33.8% increase year-over-year[42] - Credicorp expects a ROE of approximately 17.5% for 2025, driven by loan portfolio growth, resilient NIM, and reduced cost of risk[41] - Total other income increased by 11.8% year-over-year, reaching S/6,404,119[42] Loan and Deposit Growth - Total loans measured in average daily balances (ADB) rose 0.7% QoQ to S/141,838 million, driven by short-term corporate loans and government program loans[13] - Total deposits increased by 4.8% QoQ and 9.6% YoY, with low-cost deposits accounting for 69.4% of total deposits[15] - Total loans in average daily balances reached S/ 142.57 billion, reflecting a QoQ increase of 0.7% and a YoY decrease of 0.5%[69] - Total loans increased to S/ 91,779 million, reflecting a 1.1% QoQ growth and a 0.9% decline YoY[75] - Total loans in average daily balances for Mibanco fell by 11.8% YoY, indicating challenges in the small-ticket loan segment[69][73] Risk Management and Provisions - The NPL ratio improved by 60 bps QoQ and 63 bps YoY to 5.3%, reflecting better risk management and repayments[6] - Provisions fell by 14.4% QoQ, driven by improved payment performance in SMEs and individuals, with a cost of risk of 2.4% for the full year[23] - The gross provision for credit losses on the loan portfolio fell by 12.6% QoQ and 31.9% YoY, indicating improved payment performance in SME-Pyme and Mortgage segments[144] - The total NPL Coverage Ratio at Credicorp reached 104.3% at the end of 4Q24, up 566 bps QoQ, reflecting a decrease in NPL volumes[163][164] - Credicorp's NPL Ratio decreased by 60 bps QoQ to 5.3%, primarily due to improved portfolio quality metrics and loan growth[137] Digital Transformation and Client Engagement - Yape reached 13.7 million monthly active users, with monthly revenues per active user increasing to S/6.5[4] - Credicorp's digital clients increased from 68% in 4Q23 to 76% in 4Q24, with digital monetary transactions rising from 80% to 86% in the same period[50] - Yape generated total income of S/233.2 million in 4Q24, up 22.9% quarter-over-quarter and 117.3% year-over-year, with the Payments business contributing 55% of total income[60] - Monthly transactions per MAU for Yape increased from 35.3 in 4Q23 to 51.1 in 4Q24, reflecting a 44.6% year-over-year growth[55] - Credicorp's financial inclusion efforts resulted in 5.7 million people being financially included, an increase of 1.8 million compared to 2023[62] Insurance Performance - Insurance underwriting results rose by 7.2% QoQ and 8.8% YoY, driven by stronger reinsurance results in the P&C business[28] - Year-over-Year, the Insurance Underwriting Result rose by 8.8%, attributed to lower Insurance Service Expenses in Life and higher income in P&C[190] - P&C Insurance segment's Insurance Underwriting Result rose by 56.4% YoY, driven by increased claims recovered from reinsurers[196] - Overall, the company reported a decrease in Insurance Service Expenses by 10.1% YoY, which contributed to the increase in Insurance Underwriting Results[191] - The company experienced a 10.7% increase in Insurance Service Expenses QoQ, impacting overall profitability despite the growth in income[191] Fee Income and Other Income - Fee income for 4Q24 was S/1.10 billion, showing a 11.9% increase YoY, despite a slight QoQ decline[171] - Total Net Fee Income for Q4 2024 reached S/1,103,548, reflecting a 0.4% decrease QoQ but an 11.9% increase YoY[172] - The growth in Fee Income at BCP Stand-Alone was primarily driven by Payments and Transactional services, which accounted for 11.1% growth YoY[181] - Yape contributed significantly to the growth in Fee Income, accounting for 54% of the total increase, with a YoY growth of 278.9%[181] - Other Non-Core Income totaled S/334,503 in Q4 2024, showing a 1.6% decrease QoQ but an 18.4% increase YoY[182]