Credicorp .(BAP) - 2025 Q4 - Annual Report

Financial Performance - Net income attributable to Credicorp increased 40.9% YoY to S/1,587.0 million, with ROE at 16.9% for 4Q25[7] - Net income attributable to Credicorp in 4Q25 was S/1,587.0 million, down 8.7% QoQ but up 40.9% YoY, with a full-year increase of 25.9% to S/6,925.4 million[40] - BCP reported a nearly 25% profitability in 2025, supported by growing margins and improved risk management, with core income rising 6.4%[44] - Mibanco's profitability showed recovery, nearing mid-term ROE targets in the low 20s, driven by growth in disbursements and effective pricing strategies[46] - The company expects to achieve an ROE of around 19.5% by the end of 2026, driven by loan portfolio growth, increased NIM, and controlled cost of risk[49] Loan and Deposit Growth - Total loans increased 2.9% YoY and 3.6% QoQ, with an 8.5% YoY increase when excluding certain adjustments[7] - Total loans increased to S/149,984,954 in 4Q25, representing a 3.6% increase QoQ and a 2.9% increase YoY[50] - Total deposits rose 5.3% YoY and 7.6% QoQ, with a 12.2% YoY increase when excluding adjustments, primarily due to low-cost deposits[7] - Deposits and obligations rose to S/170,401,633 in 4Q25, marking a 7.6% increase QoQ and a 5.3% increase YoY[50] - Demand deposits rose by 12.0% QoQ and 8.5% YoY, while savings deposits increased by 11.9% QoQ and 13.5% YoY[104] Risk Management and Asset Quality - The NPL ratio improved to 4.5%, down 71 bps YoY, reflecting better payment performance and debt repayments[7] - The coverage ratio of non-performing loans (NPLs) improved to 112.4% in 4Q25, an increase of 230 bps QoQ and 810 bps YoY[50] - Provisions declined 13.1% YoY, with a cost of risk of 1.8%, down 31 bps YoY[7] - Provisions dropped 31.6% YoY, reflecting improved risk management and payment performance across segments[153] - The allowance for loan losses decreased by 0.1% QoQ and 4.1% YoY, mainly due to Retail Banking at BCP Stand-alone[179] Income Sources and Diversification - Other Core Income reached a record high, growing 6.0% QoQ and 13.7% YoY, reflecting strong performance at BCP Stand-alone and Yape, indicating successful diversification of income sources[30] - Other Non-Core Income increased 29.4% QoQ and 13.5% YoY, supported by improved performance at Pacifico and BCP Stand-alone, with a full-year rise of 8.8% due to Banmedica's consolidation[31] - The financial segment of Yape generated 45% of total income, with lending becoming the main source of revenue, increasing its share to 23% by year-end[75] - Total Other Non-Core Income for 4Q25 was S/254,473, representing a 29.4% QoQ increase and a 13.5% YoY increase[198] Innovation and Digital Growth - Yape reached 15.9 million Monthly Active Users (MAU), contributing 7.2% to Credicorp's risk-adjusted revenue[7] - By 4Q25, the innovation portfolio accounted for 8.1% of Credicorp's risk-adjusted revenues, progressing towards a 10% target[55] - Total Payment Volume (TPV) for Yape increased by 42.8% year-over-year, reaching S/437.7 billion, with payments through QR/POS rising by 72.1% year-over-year[69] - The number of loans disbursed through Yape reached 5,118 thousand in 4Q25, a 138.6% increase year-over-year[61] - Tenpo, a neobank in Chile, surpassed 2.5 million clients after receiving its banking license in January[55] Operational Efficiency - The efficiency ratio stood at 46.6% for FY25, in line with full-year guidance[7] - The efficiency ratio improved to 49.0% in 4Q25, a decrease of 260 bps QoQ and an increase of 60 bps YoY[50] - Credicorp's total operating expenses in 4Q25 were S/259.8 million, a 40.6% increase year-over-year[64] Market Position and Share - The market share of total deposits held by BCP and Mibanco in Peru was 33.0% and 2.5%, respectively, at the end of December 2025[120] - Low-cost deposits represented 73.0% of total deposits, with a market share of 40.7% at the end of December 2025[108] - The dollarization level of total deposits decreased by 206 bps QoQ to 42.6%, remaining below the 4-year average of 48.1%[111]