Intercorp Financial Services(IFS) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net income of PEN 456 million for the quarter, representing an 81% increase year-over-year, with a return on equity (ROE) of approximately 16% [9][16] - The accumulated ROE for the first nine months of 2025 stands at 17.4%, which would have been 18.3% excluding the one-off impact from Rutas de Lima [9][16] - Risk-adjusted net interest margin (NIM) improved by 60 basis points over the past quarter, with a current NIM of 3.8% [9][28] Business Line Data and Key Metrics Changes - Interbank's loan portfolio grew by over 5% year-over-year, with higher-yielding loans increasing by 7% year-over-year and 3% in the last quarter [21][39] - Interseguro reported strong performance in private annuities and life insurance, with retail premiums growing by 58% year-over-year [10][35] - Inteligo's assets under management reached new record highs, growing at a double-digit pace [7][32] Market Data and Key Metrics Changes - Peru's GDP growth was reported at 3.3% as of August, with projections for private investment growth at 6.5% by year-end [4][12] - Inflation in Peru remains low at around 1.7% for 2025, and the Peruvian sol has appreciated by approximately 10% this year [11][12] - The internal demand projection for 2025 has been revised upward to 5.1%, driven by solid growth in private investment and consumption [13][14] Company Strategy and Development Direction - The company aims for focused and profitable growth, emphasizing digital excellence and deepening primary client relationships through data-driven services [7][10] - There is a commitment to enhancing the payments ecosystem with PLIN and EasyPay, focusing on increasing transactional volumes and offering value-added services [23][25] - The company is investing in technology to improve user experience, cybersecurity, and AI capabilities, reflecting a strategic focus on long-term growth [20][36] Management's Comments on Operating Environment and Future Outlook - Management maintains a cautious outlook due to international conditions and the pre-election period, but remains optimistic about Peru's economic stability and growth prospects [4][5] - The company is closely monitoring the Rutas de Lima situation, with current exposure representing less than 1% of the investment book [5][48] - Future growth is expected to be supported by strong consumer demand and liquidity from pension fund withdrawals, although short-term impacts may be negative [50][51] Other Important Information - The company has made significant progress in sustainability, with a sustainable loan portfolio exceeding $350 million [40][41] - The cost-to-income ratio at the IFS level stands at 37.7%, reflecting ongoing investments in strategic growth initiatives [20][39] Q&A Session Summary Question: Can you provide details about the impairment related to Rutas de Lima and its outlook? - The company has already reduced the value of its holdings in Rutas de Lima by 40%, and further clarity is expected by the end of the fourth quarter [45][48] Question: How will pension fund withdrawals impact retail growth? - Pension fund withdrawals may have a short-term negative impact on growth, but they will also provide liquidity that could benefit collections and funding [49][51] Question: What are the expectations for loan growth in 2025 and 2026? - The company expects to continue accelerating growth in credit cards and consumer finance, with a focus on gaining market share [56][59] Question: What is the outlook for corporate-level disbursements in 2026? - Corporate activity is expected to remain mild, with no large projects anticipated, primarily focusing on working capital replenishment and small CapEx [62][64]