Intercorp Financial Services(IFS) - 2025 Q2 - Earnings Call Transcript

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]