Financial Data and Key Metrics Changes - The company reported fourth quarter sales of approximately $1.4 billion, with full year sales of approximately $5.8 billion, reflecting a decrease from $6.12 billion in 2024 [6][16] - Adjusted EBITDA for the fourth quarter was $169 million, or 12.2% of sales, while for the full year it was $743 million, or 12.7% of sales, up from 12.2% in the previous year [6][7] - Adjusted earnings per share in the fourth quarter was $0.07, compared to a loss of $0.06 per share in the same quarter of 2024, and for the full year, it was $0.53 versus $0.51 in 2024 [19] Business Line Data and Key Metrics Changes - The company experienced margin improvement in both metal forming and driveline business units, focusing on operational efficiency [7][10] - The sale of the commercial vehicle axle business in India negatively impacted sales by $27 million in the fourth quarter [16] Market Data and Key Metrics Changes - North American production is expected to be approximately 15 million units in 2026, Europe at approximately 17 million units, and China at approximately 33 million units, with global production at approximately 93 million units [12] Company Strategy and Development Direction - The company aims to achieve efficient integration of the Dowlais acquisition, targeting $300 million in synergies with a focus on operational excellence and profitability [10][11] - The strategic combination is expected to enhance the product portfolio and customer base, supporting electric, hybrid, and ICE powertrains [10][14] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment due to ongoing trade policy discussions and macroeconomic factors, but remains optimistic about achieving financial targets [12][30] - The company expects to generate adjusted free cash flow of $235 million to $325 million in 2026, with a focus on margin growth and capital allocation [25][26] Other Important Information - The company has changed its name from American Axle & Manufacturing Holdings, Inc. to Dauch Corporation, reflecting its new identity post-acquisition [13][14] - The company expects to incur cash costs associated with synergy capture in the range of $100 million to $125 million for 2026 [26] Q&A Session Summary Question: What is the outlook for the two individual businesses? - Management noted that both legacy businesses are experiencing similar market conditions, with slight declines in production forecasts for North America and Europe [34][35] Question: Can you clarify the cash flow situation considering restructuring costs? - Management expects to generate positive cash flow from operations even after accounting for restructuring and synergy costs, projecting $50 million of cash flow available for debt repayment in 2026 [40] Question: Is there potential for upside in the $300 million synergies? - Management expressed confidence in achieving the $300 million synergies and indicated potential for additional savings as they assess the Dowlais plants [48][49] Question: How will Dowlais's equity income be reported? - Dowlais's equity income will be reported as equity income in the P&L, contributing approximately $65 million to $75 million to adjusted EBITDA [61]

Financial Data and Key Metrics Changes - The operating EBITDA for Q4 2025 was negative $20 million, an improvement of $8 million compared to Q3 2025, primarily due to stable production and the One Goal One Hundred program, despite market headwinds [3][4] - The company reported a consolidated net loss of $309 million for Q4 2025, or $4.61 per share, which included non-cash impairments totaling approximately $239 million [12][3] - Aggregate liquidity improved by over $54 million to $430 million, consisting of about $187 million in cash and $243 million in undrawn revolvers [11] Business Line Data and Key Metrics Changes - Both the pulp and solid wood segments reported negative quarterly EBITDA of $11 million in Q4 2025 [4] - Pulp sales volumes increased by 20,000 tons to 472,000 tons, while pulp production remained stable at 460,000 tons [7][19] - Lumber production decreased by about 6% to 109 million board feet, with sales volumes dropping to 103 million board feet, a decline of about 7% from Q3 2025 [9] Market Data and Key Metrics Changes - Softwood sales realizations decreased to $702 per ton, down from $728 per ton in Q3 2025, while North American NBSK list prices averaged $1,568 per ton, a reduction of about $132 [5][6] - The average net price for eucalyptus hardwood in Q4 was $540 per ton, an increase of $37 from Q3, while hardwood sales realizations remained flat at $528 per ton [6] - The average price gap between softwood and hardwood pulp in China narrowed to approximately $130 per ton [6] Company Strategy and Development Direction - The company is focusing on strategic initiatives to return the Peace River mill to profitability, including expanding softwood pulp production and exploring government support for energy generation [4][15] - The One Goal One Hundred program aims to improve profitability by $100 million by the end of 2026, with approximately $30 million in cost savings realized in 2025 [11][14] - The company is transitioning from hardwood to softwood production at the Peace River mill, aiming for a 50/50 split by the end of 2026 [47] Management's Comments on Operating Environment and Future Outlook - Management noted that ongoing market headwinds and trade uncertainties are impacting operational performance, but underlying performance has improved [13][14] - The company expects modest price improvements for NBSK and NBHK in Q1 2026, while trade uncertainty continues to affect supply-demand dynamics [19] - Management expressed confidence in the mass timber business as a growth engine, with expected revenues of over $120 million in 2026 [25][26] Other Important Information - The company plans to maintain a capital expenditure budget of $60 million to $80 million in 2026, focusing on maintenance and environmental projects [27] - The company is actively lobbying against policies that prioritize wood for biofuel over higher-value wood products [80][81] Q&A Session Summary Question: Can you say how much headroom you have under any of your maintenance covenants as of December 31? - The company is comfortable that it is well under the covenants at the end of the quarter, but expects them to tighten as the year progresses [30] Question: Any thoughts on asset recycling opportunities to expedite deleveraging? - The company is analyzing asset sales or restructuring but acknowledges that current market conditions are not favorable for claiming reasonable value [40] Question: Is there any thought to potentially closing the Peace River mill? - The company is focused on transitioning from hardwood to softwood production at the Peace River mill and is working on energy projects to support profitability [47][48] Question: What are the expectations around working capital for this year? - The company expects a modest cash outflow from working capital in 2026 [51] Question: How do you see the outlook for the market, particularly for softwood pulp? - Recent developments in supply disruptions may indicate potential upward pressure on prices for both hardwood and softwood [56][58]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net income of $155 million or $1.60 per diluted share, compared to $1.67 in the previous quarter and $1.58 in Q4 2024 [4][11] - For the full year 2025, net income was $690 million or $6.90 per diluted share, with a return on average equity of 12% [4][5] - Book value per share increased by 13% year-over-year to $60.31 as of December 31 [5] - The mortgage insurance in force was $248 billion, reflecting a 2% increase year-over-year [5] Business Line Data and Key Metrics Changes - The mortgage insurance segment ended Q4 2025 with insurance in force of $248.4 billion, a decrease of $452 million from Q3 2025 but an increase of $4.7 billion or 1.9% year-over-year [12] - Persistency for the mortgage insurance portfolio was 85.7% at the end of Q4 2025, down from 86% in Q3 2025 [12] - The average base premium rate for the mortgage insurance portfolio remained stable at 41 basis points, while the average net premium rate decreased by 1 basis point to 34 basis points [13] Market Data and Key Metrics Changes - The portfolio default rate increased to 2.5%, up 21 basis points from the previous quarter, reflecting normal seasonality and aging of the insurance in force [13] - The weighted average FICO score of the insurance in force was 747, with a weighted average original loan-to-value (LTV) of 93% [5] Company Strategy and Development Direction - The company is focused on a disciplined capital management strategy, returning nearly $700 million to shareholders in 2025 through dividends and share repurchases [10] - A 13% increase in the quarterly dividend to $0.35 per share was approved, effective Q1 2026 [10] - The company is expanding into the Lloyd's market as part of its strategy to diversify and leverage higher investment yields, with a focus on property and casualty (P&C) insurance [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted that the current housing market presents challenges, but the company remains well-positioned for future growth as demographics shift towards homeownership [40] - The credit quality of the portfolio remains strong, and management is optimistic about the potential for supplemental earnings from the P&C segment [27][28] - The company aims to optimize unit economics rather than focus solely on market share, indicating a long-term growth strategy [54][55] Other Important Information - The consolidated cash and investments totaled $6.6 billion, with an aggregate yield of 3.9% for the year [9] - The company has a strong liquidity position, including $1.3 billion in cash and investments at the holding companies [9][16] Q&A Session Summary Question: Why enter the Lloyd's market now? - Management explained that the decision is part of a long-term strategy to expand and leverage higher investment yields, with a focus on diversifying the business [21][22] Question: Is the decrease in insurance in force a strategic decision? - Management clarified that the decrease is not a reflection of a strategic pullback but rather a normal ebb and flow of the market [29] Question: What is the outlook for insurance in force growth? - Management expects modest growth in insurance in force, with potential for a spike when younger demographics enter the housing market [40][41] Question: How does the company view credit quality and defaults? - Management indicated that the current credit quality is strong, and while defaults are monitored, they are not overly concerned at this time [45][47] Question: What is the company's approach to pricing and market share? - Management emphasized a focus on optimizing unit economics rather than pursuing market share aggressively, indicating a preference for returning capital to shareholders [54][58]

Financial Data and Key Metrics Changes - In 2025, the company achieved record net income of $227 million, up 10% year-over-year, with an adjusted return on equity (ROE) of 15.8% [8][9] - Net interest income reached another record, increasing by 5% year-over-year, with a net interest margin (NIM) of 2.36%, slightly above guidance [4][25] - Non-interest income grew 54% year-over-year, now representing 20% of total revenues, up from 13% four years ago [5][26] Business Line Data and Key Metrics Changes - The commercial portfolio grew 11.5% year-over-year, driven by a solid expansion in the loan book and a contingent portfolio increase of over 20% [3][11] - Loan growth was led by Guatemala, Colombia, Mexico, the Dominican Republic, and Argentina, reflecting selective origination in attractive risk-adjusted opportunities [3][12] - Non-interest income from letters of credit increased by 20% year-over-year, while syndication fees rose more than 70% [5][26] Market Data and Key Metrics Changes - The investment portfolio totaled $1.4 billion, representing a 19% increase year-over-year, with approximately 91% investment-grade exposure [15] - Total liquidity closed the quarter at $1.9 billion, representing about 15% of total assets, with 91% of liquidity placed with the Federal Reserve [15] Company Strategy and Development Direction - The company aims to transition into a more transactional trade banking platform for Latin America, focusing on scalability and capturing trade flows [34][35] - The 2026 guidance reflects a disciplined approach to profitable growth, with expectations for commercial portfolio growth between 13% and 15% [36] Management's Comments on Operating Environment and Future Outlook - The macro environment remains uncertain, with expectations of two additional rate cuts in 2026, but the company anticipates continued growth supported by a resilient Latin American market [32][33] - The company is well-positioned to expand the loan book without altering its credit risk profile, focusing on prudent capital management [14] Other Important Information - The efficiency ratio closed at 26.7%, reflecting ongoing cost discipline while investing in strategic initiatives [30] - The board approved an increase in quarterly cash dividends to $0.6875 per share, representing a 46% payout of fourth-quarter earnings [23] Q&A Session Summary Question: Clarification on ROE guidance - The guidance is for adjusted ROE, excluding the impact of additional Tier 1 capital issued in September [39] Question: Expectations for non-interest income in 2026 - Fee income is expected to be around what was seen in 2025, with nominal growth but similar relative performance due to one-off transactions in 2025 [40] Question: Impact of portfolio duration on NIM - The record NIM in 2025 was influenced by medium-term transactions and efficient liquidity management, with expectations for stability in 2026 [41][43] Question: Portfolio growth guidance breakdown - The growth is expected to be well-balanced across regions, with specific opportunities in Guatemala and Argentina, while monitoring risks in Colombia and Brazil [60][61]

Financial Data and Key Metrics Changes - The operating EBITDA for Q4 2025 was negative $20 million, an improvement of $8 million compared to Q3 2025, primarily due to stable production and the One Goal One Hundred program, despite market headwinds [3][4] - The consolidated net loss for Q4 2025 was $309 million, or $4.61 per share, compared to a net loss of $81 million, or $1.21 per share in Q3 2025 [13] - Total non-cash impairment charges for the quarter amounted to $260 million, or $3.22 per share, largely due to the ongoing weakness in the hardwood pulp market [3][4] Business Line Data and Key Metrics Changes - Both the pulp and solid wood segments reported negative quarterly EBITDA of $11 million in Q4 2025 [4] - Pulp sales volumes increased by 20,000 tons to 472,000 tons, while pulp production remained stable at 460,000 tons [7][20] - Lumber production decreased by about 6% to 109 million board feet, with sales volumes dropping to 103 million board feet, a decrease of about 7% from Q3 2025 [10][22] Market Data and Key Metrics Changes - Softwood sales realizations decreased to $702 per ton, down from $728 per ton in Q3 2025, while North American NBSK list prices averaged $1,568 per ton, a reduction of about $132 from Q3 [5][6] - The average net price for eucalyptus hardwood in Q4 was $540 per ton, an increase of $37 from Q3, while hardwood sales realizations remained flat at $528 per ton [6][20] - The average price gap between softwood and hardwood pulp in China narrowed to approximately $130 per ton [6] Company Strategy and Development Direction - The company is focusing on strategic initiatives to return the Peace River mill to profitability, including expanding softwood pulp production and exploring government support for energy generation [4][15] - The One Goal One Hundred program aims to improve profitability by $100 million by the end of 2026, with approximately $30 million in cost savings realized in 2025 [12][14] - The company is transitioning from hardwood to softwood production at the Peace River mill, aiming for a 50/50 split by the end of 2026 [50] Management's Comments on Operating Environment and Future Outlook - Management noted that ongoing market headwinds and trade uncertainties are impacting operational performance, but underlying performance has improved quarter-over-quarter [14][20] - The company expects modest price improvements for NBSK and NBHK in Q1 2026, while trade uncertainty continues to affect supply-demand dynamics [20][22] - Management expressed confidence in the mass timber business as a growth engine, with expected revenues of over $120 million in 2026 [25][27] Other Important Information - The company reported an improvement in aggregate liquidity of over $54 million to $430 million, attributed to working capital management and cost reduction activities [12] - Planned capital expenditures for 2026 are expected to be between $60 million and $80 million, focusing on maintenance and environmental projects [28] Q&A Session Summary Question: Can you say how much headroom that you have under any of your maintenance covenants as of December thirty-first? - Management indicated comfort with being well under the covenants at the end of the quarter, but expects them to tighten as the year progresses due to a weak outlook [32] Question: Any thoughts on asset recycling opportunities to expedite potential deleveraging of the balance sheet? - Management is analyzing asset sales or restructuring as part of their debt reduction plans, but noted that current market conditions are not favorable for claiming reasonable value for assets [43] Question: Is there any thought to potentially closing the Peace River mill? - Management clarified that they are focused on transitioning the mill from hardwood to softwood production, which is expected to enhance profitability [50] Question: Any updates on the extension of your two RCFs? - Management stated that discussions with lenders are ongoing and are expected to conclude before the end of Q2 2026 [75][78] Question: How do you see the outlook for the market, particularly regarding softwood pulp? - Management acknowledged significant supply disruptions and indicated potential upward pressure on prices for both hardwood and softwood due to recent developments in Indonesia [59][60]

Financial Data and Key Metrics Changes - The company reported fourth quarter sales of approximately $1.4 billion, with full year sales at approximately $5.8 billion, a decrease from $6.12 billion in 2024 [5][16] - Adjusted EBITDA for the fourth quarter was $169 million, or 12.2% of sales, while full year adjusted EBITDA was $743 million, or 12.7% of sales, up from 12.2% in the previous year [6][17] - Adjusted earnings per share in the fourth quarter was $0.07, compared to a loss of $0.06 per share in the same quarter of 2024, with full year adjusted earnings per share at $0.53, up from $0.51 in 2024 [19] Business Line Data and Key Metrics Changes - The company experienced margin improvement in both metal forming and driveline business units, focusing on operational efficiency [6][10] - The sale of the commercial vehicle axle business in India negatively impacted sales by $27 million in the fourth quarter [16] Market Data and Key Metrics Changes - North American production is expected to be approximately 15 million units in 2026, Europe at approximately 17 million units, and China at approximately 33 million units, with global production at approximately 93 million units [11][12] Company Strategy and Development Direction - The company aims to achieve efficient integration of the Dowlais acquisition, targeting $300 million in synergies with a focus on operational excellence and profitability [9][10] - The strategic combination is expected to enhance the product portfolio and customer base, supporting electric, hybrid, and ICE powertrains [9][10] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging operating environment due to ongoing trade policy discussions and macroeconomic volatility, but remains focused on managing controllable factors [11][12] - The 2026 financial outlook includes targeted sales of $10.3 billion to $10.7 billion and adjusted EBITDA of approximately $1.3 billion to $1.4 billion [12][23] Other Important Information - The company has changed its name from American Axle & Manufacturing Holdings, Inc. to Dauch Corporation, reflecting its new identity post-acquisition [12][14] - The company expects to generate adjusted free cash flow in the range of $235 million to $325 million for 2026 [24] Q&A Session Summary Question: What is the outlook for the two individual businesses? - Management noted that both legacy businesses are experiencing similar market conditions, with slight declines in production forecasts for North America and Europe [31][33] Question: Can you clarify the cash flow situation considering restructuring and integration costs? - Management expects to generate positive cash flow from operations even after accounting for restructuring and synergy costs, estimating a net cash flow of $50 million for 2026 [39] Question: Is there potential for upside in the $300 million synergies from the Dowlais combination? - Management expressed confidence in achieving the $300 million synergies and indicated potential for additional savings as they assess the plants post-acquisition [46][48] Question: How are Dowlais's equity income and IFRS adjustments impacting financials? - Management explained that Dowlais's equity income will be reported in the P&L and highlighted significant differences between IFRS and GAAP accounting that affect revenue and EBITDA comparisons [50][51]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported net income of $155 million or $1.60 per diluted share, compared to $1.67 in the previous quarter and $1.58 in Q4 2024 [4][11] - For the full year 2025, net income was $690 million or $6.90 per diluted share, with a return on average equity of 12% [4][10] - Book value per share increased by 13% year-over-year to $60.31 as of December 31 [5][10] - The company generated operating cash flow of $856 million for the full year 2025 [10] Business Line Data and Key Metrics Changes - The mortgage insurance in force was $248 billion, a 2% increase year-over-year, but a decrease of $452 million from the previous quarter [5][12] - Persistency for the mortgage insurance portfolio was 86% as of December 31, reflecting a slight decrease from 86% in the previous quarter [5][12] - The average base premium rate for the mortgage insurance portfolio remained stable at 41 basis points, while the average net premium rate decreased by 1 basis point to 34 basis points [13] Market Data and Key Metrics Changes - The portfolio default rate increased modestly to 2.5%, up 21 basis points from the previous quarter [13] - The weighted average FICO score for the insurance in force was 747, with a weighted average original loan-to-value (LTV) of 93% [5] Company Strategy and Development Direction - The company is focused on a disciplined capital management strategy, returning nearly $700 million to shareholders in 2025 through dividends and share repurchases [10] - The company has entered the Lloyd's market to expand its reinsurance capabilities, viewing it as a strategic opportunity rather than a new line of business [20][22] - The company aims to optimize unit economics rather than prioritize market share, focusing on long-term growth in book value per share [56] Management's Comments on Operating Environment and Future Outlook - Management noted that the current housing market presents challenges, with modest growth expected in insurance in force due to high mortgage rates and limited supply [41] - The company believes that the embedded home equity in its portfolio will help mitigate future claims [6] - Management expressed confidence in the strength of the balance sheet and the ability to return capital to shareholders while maintaining a cautious outlook on credit [59] Other Important Information - The company repurchased nearly 10% of its shares outstanding at the end of 2024 and approved a 13% increase in its quarterly dividend to $0.35 per share starting in Q1 2026 [10][16] - The consolidated cash and investments totaled $6.6 billion, with an aggregate yield of 3.9% for the year [9] Q&A Session Summary Question: Why enter the Lloyd's market now? - Management indicated that the decision was part of a long-term strategy to expand and leverage existing assets, with a focus on capital efficiency and diversification [20][22] Question: Is the decrease in insurance in force a strategic decision? - Management clarified that the decrease should not be over-interpreted, as it reflects market dynamics rather than a specific strategic pullback [30] Question: What is the outlook for insurance in force growth? - Management expects modest growth in insurance in force, with potential for a spike when younger demographics enter the homeownership market [41] Question: How does the company view credit risk? - Management stated that credit quality remains benign, and they are not currently making significant changes based on credit concerns [46][58]

Banco Latinoamericano de Comercio Exterior (NYSE:BLX) Q4 2025 Earnings call February 13, 2026 10:00 AM ET Speaker4Good morning, ladies and gentlemen, and welcome to Bladex's fourth quarter 2025 earnings conference call. A slide presentation is accompanying today's webcast and is also available on the Investor section of the company's website, www.bladex.com. There will be an opportunity for you to ask questions at the end of today's presentation. Please note, today's conference call is being recorded. As a ...

Financial Data and Key Metrics Changes - For Q4 2025, sales volumes increased by 8.2% compared to the same period last year, and for the full year 2025, there was a 7.2% increase relative to 2024 [8] - EBITDA for Q4 2025 reached PEN 158.7 million, an 11.4% increase year-over-year, while full year EBITDA was PEN 584.2 million, marking a 6.4% year-over-year increase when excluding one-off expenses [9][10] - Consolidated net income for Q4 2025 was negative due to transactional expenses, but excluding these, net income would have been PEN 59.8 million, a 19.6% increase over the same period last year [26] Business Line Data and Key Metrics Changes - Cement sales in Q4 2025 increased by 13.6%, driven by strong demand in the self-construction sector, while for the full year, cement sales rose by 8.7% compared to 2024 [19][20] - Sales of concrete, pavement, and mortar decreased by 25.1% year-over-year in Q4 2025, primarily due to lower sales volume from the halted Motupe Riverbank Defense Project, but increased by 6.3% for the full year [21][23] - Precast materials sales decreased by 16% in Q4 2025 but increased by 3% for the full year, driven by higher demand from the public sector [25] Market Data and Key Metrics Changes - The growth in sales volumes was attributed to stronger demand for infrastructure projects and consistent performance in the self-construction segment [8] - The agro-industrial and fishing sectors, key income drivers in the north, contributed to the elevated demand for cement [20] Company Strategy and Development Direction - The acquisition agreement with Holcim for a controlling stake in Cementos Pacasmayo is seen as a strong endorsement of the company's long-term strategy and operational excellence [5][6] - The company aims to promote sustainable development and create new opportunities while contributing to the growth of Peru and the wider region [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining EBITDA margins at current levels, with potential improvements due to energy-saving projects planned for the second half of the year [36] - The company anticipates a stronger year in 2026 in terms of volumes and competitive pricing, which should support revenue growth and stable EBITDA margins [38] Other Important Information - The company achieved three-star recognition from Peru's Minister of Environment for reducing greenhouse gas emissions, reflecting its commitment to sustainability [11] - Cementos Pacasmayo has been recognized as the industry leader in the Merco ESG Sustainability Ranking for ten consecutive years, highlighting its focus on sustainability [12][13] Q&A Session Summary Question: Details about the transaction with Holcim and pending steps - The transaction involves Holcim acquiring Inversiones ASPI, which controls 60.01% of Pacasmayo, pending regulatory approval from Indecopi, which is expected to be approved soon [29] Question: Why acquisition-related expenses are high - Most expenses are related to long-standing change of control issues, with part of the costs to be assumed by Hochschild, and the board deemed these expenses reasonable given the share price [30][32] Question: Recognition of PEN 77 million in expenses related to the Holcim transaction - The decision to incur these costs was based on contractual obligations and was approved by the board, with no anticipated impediments from regulatory authorities [32] Question: Expectations for project-related disruptions and margin pressures - Management believes EBITDA margins should remain stable or improve slightly, with expectations for increased spending from authorities later in the year [36] Question: Guidance on revenue growth and EBITDA margins for 2026 - Management is optimistic about volume growth and stable EBITDA margins, with expectations for efficiencies to enhance margins in the second half of the year [38]

Financial Data and Key Metrics Changes - The company closed the quarter with a 16.9% ROE and 19% for the full year, reflecting record high net income and diversification of revenue sources across various segments [16][45] - Net interest income increased by 4.2%, driven by loan portfolio growth and a contraction in interest expenses, resulting in a NIM of 6.6% [20][43] - The NPL ratio stood at 4.5%, indicating improved asset quality, while the cost of risk was 1.8% [19][42] Business Line Data and Key Metrics Changes - In Universal Banking, BCP reinforced its leadership in Peru, serving over 3.2 million loan clients and achieving a full-year ROE of 24.7% [9][25] - Microfinance, through Mibanco, delivered double-digit loan growth and improved profitability, with a NIM of 15.2% [10][34] - The insurance and pensions business, Grupo Pacífico, achieved a solid ROE of 21.4%, with net income rising 13% [36][37] Market Data and Key Metrics Changes - Peru's GDP grew around 3.5% in 2025, supported by strong domestic demand and high commodity prices [6][22] - In Colombia, GDP growth was around 2.7%, while inflation accelerated to 4.51% [8][24] - Chile's GDP also expanded around 2.7%, driven by investment, with inflation slightly above target [8] Company Strategy and Development Direction - The company aims to expand financial inclusion, deepen risk and capital discipline, scale AI and digital platforms, and build trust through operational excellence [13] - A strategic acquisition of Helm Bank for $180 million aims to enhance cross-border capabilities and strengthen the U.S. offering [14][15] - The company plans to continue investing in data transformation and disruptive initiatives to bolster long-term competitive positioning [47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Peru's economic stability and growth potential, expecting GDP growth around 3.5% in 2026 [22][46] - The company anticipates total loan growth of approximately 8.5% in 2026, driven primarily by retail banking [46] - Despite local political uncertainties, management believes the fundamentals are in place to support profitability levels [49] Other Important Information - Yape, the company's digital wallet, closed the year with nearly 16 million monthly active users, significantly contributing to revenue growth [12][31] - The company expects non-interest income growth to pick up in the low double digits in 2026, driven by increased activity and diversification efforts [47] Q&A Session Summary Question: Update on political outlook and upcoming elections - Management noted that López Aliaga is leading the polls with 12%, while Keiko Fujimori follows at 8%, with a significant portion of undecided voters [51][53] - The elections for Congress members will occur on April 12, 2026, which is expected to provide more political stability [56][57] Question: Expectations for operating expenses growth - Management indicated that operating expenses are expected to moderate compared to 2025, with a focus on achieving operational leverage from ongoing investments [60][62] Question: Yape's revenue contribution and cost of risk - Yape's lending now represents over 20% of revenue, with a shift towards multi-installment loans expected to maintain controlled provisioning levels [69][71]