Credicorp (NYSE:BAP) Q3 2025 Earnings Call November 14, 2025 09:30 AM ET Company ParticipantsAlejandro Perez-Reyes - CFOGianfranco Ferrari - CEOMilagros Cigüeñas - Head of Investor RelationsCesar Rios - Chief Risk OfficerConference Call ParticipantsAndres Soto - AnalystLindsey Shema - AnalystMarcelo Mizahi - AnalystYuri Fernandes - AnalystDaniel Vaz - AnalystAlonso Aramburu - AnalystBrian Flores - AnalystRenato Meloni - AnalystCarlos Gomez - AnalystErnesto Gabilondo - AnalystOperatorGood morning, everyone. ...

Credicorp (NYSE:BAP) Q3 2025 Earnings Call November 14, 2025 09:30 AM ET Company ParticipantsAlejandro Perez-Reyes - CFOGianfranco Ferrari - CEOMilagros Cigüeñas - Head of Investor RelationsCesar Rios - Chief Risk OfficerConference Call ParticipantsAndres Soto - AnalystLindsey Shema - AnalystMarcelo Mizahi - AnalystYuri Fernandes - AnalystDaniel Vaz - AnalystAlonso Aramburu - AnalystBrian Flores - AnalystRenato Meloni - AnalystCarlos Gomez - AnalystErnesto Gabilondo - AnalystOperatorGood morning, everyone. ...

Financial Data and Key Metrics Changes - The company reported a return on equity (ROE) of 19.6%, reflecting strong performance across core businesses and contributions from the innovation portfolio [10][13] - Total assets contracted by 2.1% year-over-year due to the revaluation of Bolivia's balance sheet [13] - Net interest income increased by 2.7%, supported by a contraction in interest expenses and an increase in low-cost deposits [15][31] Business Line Data and Key Metrics Changes - Universal banking and insurance and pensions delivered strong results, while microfinance progressed towards its profitability target [10] - Fee-based and transactional income grew, with gains on foreign exchange transactions rising by 23.4% [15][33] - Yape contributed 6.6% of Credicorp's risk-adjusted revenue, with plans to expand its user base and revenue streams significantly by 2028 [24][25] Market Data and Key Metrics Changes - Peru's GDP growth for 2025 is projected at 3.4%, driven by higher export prices and increased domestic consumption [8][17] - Inflation in Peru is forecasted to remain below 2%, with the central bank's policy rate cut to 4.25% [9][18] - Economic conditions in Chile and Colombia are improving, with GDP growth expected to rise in both countries [9][18] Company Strategy and Development Direction - The company is focused on three key pillars: scaling its digital ecosystem, unlocking growth through business synergies, and executing with discipline on profitability and capital allocation [4][5] - The medium-term targets include an ROE of 19.5% and an efficiency ratio around 42% over the next three to four years [5] - The company aims to deepen financial inclusion and scale monetization through its digital platforms [24] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the economic resilience of Peru despite political changes, emphasizing a strong capital and liquidity position [6][7] - The macroeconomic environment is stable, with expectations for continued growth supported by favorable terms of trade and domestic demand [8][9] - The company anticipates a gradual increase in the cost of risk as it shifts towards higher-yield segments in its loan portfolio [41] Other Important Information - The efficiency ratio for the first nine months of the year stood at 45.7%, with operating expenses growing primarily due to investments in innovation [34][36] - The company expects to maintain its full-year ROE guidance at around 19%, reflecting solid core performance and disciplined risk management [38] Q&A Session Summary Question: Regarding asset quality and cost of risk - The company noted that asset quality has improved, with NPLs and cost of risk performing better than expected, and guidance for cost of risk is around 1.8% [40][41] Question: On operating expenses growth - Management indicated that operating expenses growth is planned and will likely be lower in the core business while remaining stable in innovation initiatives [42] Question: About growth expectations in the first quarter of the upcoming year - Management expects some slowdown in the first quarter due to elections but does not anticipate a significant reduction in long-term growth [43][45] Question: Impact of the eighth pension fund withdrawal - The withdrawal is expected to have a positive impact on local funding but may reduce loan growth by about half a percentage point next year [57] Question: Update on Yape's unit economics - The company is scaling multi-installment loans in Yape, which are showing positive business metrics [59]