Is the controlled cost of risk due to better underwriting/collections or macro tailwinds, and how much is idiosyncratic vs. macro-driven?

Both factors contribute. While the positive economic environment helps, Credicorp has made disciplined improvements in origination models, monitoring, and collections across all subsidiaries. They manage by risk-adjusted NIM, not just cost of risk, and are developing higher capabilities internally. “the environment health, but we are doing our job improving internally.”

Which companies in the holding carry the most upside for the 22% ROE target, or is it expected across the board?

The 22% ROE is driven by continued growth in underpenetrated segments (lending, investment, insurance), higher risk-adjusted margins, increased fee income, monetization of the innovation portfolio (especially Yape), and positive operating leverage. Improvement is expected across the board, not just 1-2 companies, with disruptive initiatives being very accretive. “we believe there is space for improvement across the board.”

BAP

Credicorp (BAP) Q2 FY26 earnings call: guidance and Q&A

Q: How will loan growth be distributed between risky/conservative portfolios given El Nino, and should we expect double-digit growth for both wholesale and retail?

Management expects double-digit loan growth for both wholesale and retail, with temporary adjustments in risk appetite for specific segments/geographies impacted by El Nino. They emphasize the overall positive macro environment and low loan penetration in Peru. “without considering the hiccup coming from El Nino, we are expecting double-digit loan growth for both wholesale and retail.”

Q: Was the $106 million provision client/sector specific? Will it be recurring, or is it sufficient for the foreseeable future?

Provisions were granular, based on client segment, geography, and profile. A new assessment will be made in September/October based on updated climatology data to calibrate expected losses for the year. IFRS 9 is a forward-looking provision system. “we are going to have probably a second important point of control at the end of the second quarter, the beginning of the -- sorry, at the end of the third quarter, beginning of the fourth because in our conversation with the specialists, the climatologist, at this point, September, October, we are going to have a much better assessment of the severity.”

Earnings call· Jun 2026 (Q2 FY26)· Financials· Aug 14, 2026

Source: earnings call transcript

Executive summary

Credicorp Ltd. Q2 FY26 — Medium-Term ROE Target Raised to 22% Amid Strong Performance

Credicorp delivered a strong Q2 FY26, reporting a 20.3% ROE, driven by accelerated loan growth and diversified revenue streams. The company raised its medium-term ROE expectation to 22%, reflecting a more favorable operating environment in Peru and structural transformations across its ecosystem. While El Nino poses a temporary risk, management views it as manageable, having incorporated provisions and adjusted risk appetite in affected segments.

Highlights

Reported a strong Q2 FY26 ROE of 20.3%, reflecting a diversified business model.
Raised medium-term ROE expectation to approximately 22%, up from 19.5%.
Loan growth accelerated to 13.1% year-over-year (quarter-end balances).
Yape's risk-adjusted revenue contribution increased to 8.9% of Credicorp's total.
Net interest income increased 13.3% year-over-year, driven by lower interest expenses and higher yield loan mix.

Concerns

Registered $106 million in additional provisions related to El Nino risk in Q2 FY26.
El Nino is expected to cause short-term volatility and potentially moderate loan growth and fee income in 2027.
Peru's primary GDP estimated to have fallen by nearly 5% year-over-year in Q2 FY26 due to El Nino-related disruptions.

Guidance & targets

Category	Target	Timeline	Confidence
Medium-term Return on Equity (ROE)	approximately 22% high materiality	Medium-term (next 2-3 years)	High
Full-year 2026 Loan Growth	around 12% high materiality	FY26	High
Full-year 2026 Net Interest Margin (NIM) and Risk-Adjusted NIM	higher end of our guidance rate medium materiality	FY26	Medium
Full-year 2026 Cost of Risk	remain within guidance high materiality	FY26	Medium
Full-year 2026 Fee Income Growth	high-teens growth medium materiality	FY26	High
Full-year 2026 Efficiency Ratio	remain within guidance medium materiality	FY26	Medium
Full-year 2026 Return on Equity (ROE)	around 19.5% with a current bias to the upside high materiality	FY26	Medium
Peru 2026 GDP Growth	around 3.5% medium materiality	FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
BCP Strong profitability with accelerating loan growth, improved asset quality, and stable funding costs. Incorporates El Nino related provisions. Total loans (quarter-end): 4.7% QoQ growthTotal loans (FX-neutral): 5.5% QoQ growthRetail loans: led expansionWholesale loans: roseNIM: 6.1%NPL ratio: 3.9%Cost of risk: 1.4%Risk-adjusted NIM: 5.2%Total loans (year-over-year): 10.9% growthTotal loans (FX-neutral year-over-year): 12.2% growthNIM (year-over-year): rose 12 bpsNPL ratio (year-over-year): dropped 93 bpsCost of risk (year-over-year): rose 25 bpsOther core income (year-over-year): 15.4% growthOperating expenses (year-to-date): 14.9% growthEfficiency ratio (first half): 38.6%	—	—	—	29.2% ROE
Mibanco Healthy growth with disciplined risk management and revenue diversification. Strong execution led to record low NPL ratio. Mibanco Colombia delivered strong results with double-digit loan growth. Total loans (quarter-end): 4.4% QoQ growthNPL ratio: 4.8%Average yield on interest-earning assets: upward trendNIM: 15.2% (up 23 bps QoQ)Cost of risk: 5.1% (up 30 bps QoQ)Risk-adjusted NIM: 11.2% (down 5 bps QoQ)Total loans (year-over-year): 15% growthCost of risk (year-over-year): fell 24 bpsEfficiency ratio (first half): 4% (down 4 percentage points)Mibanco Colombia ROE: 18.5%	—	—	—	22.9% ROE
Grupo Pacifico Solid results driven by strong commercial execution. Life business posted healthy organic growth. P&C net income fell due to higher claims. Corporate Health posted higher net income, and medical services remained relatively stable.	—	relatively flat net income YoY	—	19.1% ROE
Investment Management and Advisory Profitability strengthened significantly due to sustained growth in recurring businesses and an uptick in trading contribution from market volatility. Higher revenues were partially offset by increased operating expenses. Asset Management AUM: up 44% YoYWealth Management AUM: up 30% YoYNet income: increased 47% YoY	increased YoY	—	—	23.5% ROE

BAP operating KPIs by quarter

BAP operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Net interest margin	—	6.2% In this context, NIM remained resilient at 6.2% despite a year-over-year contraction in asset yields. Source: earnings call transcript	6.4% In this context, NIM remained resilient at 6.4%. Source: earnings call transcript	—	6.6% In this context, NIM stood at 6.6%. Source: earnings call transcript	6.6% In this context, NIM stood at 6.6%. Source: earnings call transcript	6.6% Against this backdrop, NIM stood at 6.6%. Source: earnings call transcript	0 pt
Net interest margin BCP	6% NIM decreased 20 basis points to stand at 6%. Source: earnings call transcript	5.8% NIM remained resilient at 5.8% despite decreasing interest rates, cautioned by a lower cost funding structure. Source: earnings call transcript	6% NIM stood at 6% due to an improvement in the asset mix and a drop in the funding cost. Source: earnings call transcript	6.1% NIM stood at 6.1%, increasing 10 basis points on the tail of a shift in the asset mix. Source: earnings call transcript	6.1% NIM remained relatively stable at 6.1%, reflecting resilience in the context of lower interest rates. Source: earnings call transcript	6% NIM rose 21 basis points to stand at 6%, mainly due to a decrease in the funding cost while the yield on interest-earning assets remained resilient in an environment of lower interest rates. Source: earnings call transcript	6.1% NIM stood at 6.1% as the loan portfolio shifted to a higher yield mix, while funding costs remained stable. Source: earnings call transcript	+0.1 pt
Active accounts Yape	<40M Yape reported close to 40 million active users, around 69% of the economically active populatio. Source: earnings call transcript	—	<15M Yape continues to lead Peru's digital financial services landscape with nearly 15 million monthly active users at the end of the second quarter. Source: earnings call transcript	15.5M Yape continues to generate value across the Credicorp ecosystem with 15.5 million monthly active users, which is the equivalent of 82% of the economically active population. Source: earnings call transcript	<16M Yape, our most mature disruptive initiative, closed the year with nearly 16 million monthly active users who engage with the platform an average of 66 times per month. Source: earnings call transcript	—	—	—
Net interest margin Mibanco	14.2% NIM rose 30 basis points to 14.2%, boosted by a drop in the cost of funding after the funding rate decline. Source: earnings call transcript	13.9% NIM contracted due to a less favorable asset mix and stood at a strong 13.9%. Source: earnings call transcript	14.4% NIM rose to a peak of 14.4%, its highest level since before the pandemic, boosted by a shift in the mix towards small ticket, higher-yield loans. Source: earnings call transcript	—	15.2% NIM peaked at 15.2%, boosted by a shift in the mix towards small ticket, higher-yield loans. Source: earnings call transcript	14.9% Our active pricing management, coupled with the decrease in the cost of funding, boosted NIM which stood at a strong 14.9%. Source: earnings call transcript	15.2% As a result, NIM rose 23 basis points to stand at 15.2%. Source: earnings call transcript	+0.3 pt
Efficiency ratio	—	45.7% Our efficiency ratio is at 45.7% within our guidance range as strategic investments in innovation and digital capabilities continue to drive diversified income streams and scalable growth through deeper market penetration. Source: earnings call transcript	44.2% Our efficiency ratio came in at 44.2%, within our expected range, highlighting the scalability of our digital investments and our disciplined approach to cost control. Source: earnings call transcript	46.4% Lastly, from an operational standpoint, our efficiency ratio came in at 46.4%, well within our expected range, reflecting the leverage in our digital capabilities and our disciplined cost management. Source: earnings call transcript	49% From an operational standpoint, our efficiency ratio came in at 49% in the fourth quarter, well within our expected range. Source: earnings call transcript	45.8% Our efficiency ratio is at 45.8% with our guidance -- within our guidance range. Source: earnings call transcript	45.4% Our efficiency ratio stood at 45.4%, while investments in innovation and digital capabilities continue to broaden our revenue base. Source: earnings call transcript	-0.4 pt
Efficiency ratio BCP	—	37.7% The efficiency ratio stood at 37.7% this quarter. Source: earnings call transcript	—	38.7% The efficiency ratio stood at 38.7% at the end of the third quarter. Source: earnings call transcript	—	38.6% In this context, operating expenses and personnel expenses, in particular led the efficiency ratio to stand at 38.6%. Source: earnings call transcript	—	—
Efficiency ratio Mibanco	—	52.9% Operating expenses remained under control and efficiency stood at 52.9%. Source: earnings call transcript	—	51.4% Operating expenses remained under control and efficiency stood at 51.4%. Source: earnings call transcript	—	49.2% Efficiency improved despite these investments and stood at 49.2% at quarter end. Source: earnings call transcript	—	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Risks & headwinds

El Nino weather phenomenon Near-term (strongest impact likely Q1 2027); remainder of 2026.

$106 million in additional provisions in Q2 FY26; estimated 2027 GDP growth around 3% under moderate-strong El Nino, but extraordinary event could lead to more pronounced slowdown.

Mitigation:Incorporating available information into provisions; robust governance framework and mitigation playbook; enhanced data and digital capabilities to identify vulnerable clients and deploy targeted deductions; lower direct exposure and stronger risk management than in previous events.

Macroeconomic uncertainty in the region Medium term.

Colombia inflation 6% YoY (July); Chile inflation 3.5% YoY (July); oil prices volatility.

Mitigation:Improving operating environment in Peru, Chile, and Colombia (post-election sentiment, stronger currency, lower sovereign yields).

What to watch in Q3 FY26

El Nino provision assessment

End of Q3 FY26 / beginning of Q4 FY26 (September/October)

Current $106 million in Q2 FY26

Target New assessment and potential adjustment

Why it matters

To calibrate expected losses and understand the full financial impact of El Nino on the cost of risk.

we are going to have probably a second important point of control at the end of the second quarter, the beginning of the -- sorry, at the end of the third quarter, beginning of the fourth because in our conversation with the specialists, the climatologist, at this point, September, October, we are going to have a much better assessment of the severity.

Find out whether BAP delivers this. Inve re-checks your case every morning.

Q&A highlights

How will loan growth be distributed between risky/conservative portfolios given El Nino, and should we expect double-digit growth for both wholesale and retail?

Management expects double-digit loan growth for both wholesale and retail, with temporary adjustments in risk appetite for specific segments/geographies impacted by El Nino. They emphasize the overall positive macro environment and low loan penetration in Peru.

“without considering the hiccup coming from El Nino, we are expecting double-digit loan growth for both wholesale and retail.”

asked by Ernesto María Gabilondo Márquez · answered by Alejandro Perez-Reyes

2 min read 6 chapters

Detailed narrative

Peru's Economic Outlook

Peru is entering a more favorable growth environment, with business confidence at its highest level in years. Private investment is growing approximately 13% year-over-year, and domestic demand has expanded over 5%. Favorable commodity prices, with gold roughly doubled since 2003 and copper up nearly 60%, further strengthen the economy.

The political transition and policy continuity, including a new technical team at the Ministry of Economy and Finance, reinforce expectations of a predictable economic environment.

El Nino Impact and Mitigation Strategy

El Nino is viewed as a temporary and manageable shock, primarily affecting Peru's fishing, agriculture, and related activities in the North. Credicorp incorporated $106 million in additional provisions related to El Nino risk in Q2 FY26, and expects full-year 2026 cost of risk to remain within guidance.

The company has a robust governance framework and mitigation playbook, leveraging enhanced data and digital capabilities to identify vulnerable clients and deploy targeted support, approaching the scenario from a position of strength.

Strategic Transformation and ROE Update

Credicorp has structurally transformed its ecosystem over several years, strengthening earnings drivers through improved loan portfolio quality, enhanced risk management, reinforced structural funding advantage, and diversified revenue sources. Consistent investment in technology, data, and talent has created a more scalable and efficient business model. These structural improvements, combined with a more favorable operating environment, led to an updated medium-term ROE expectation of approximately 22%.

Yape's Expanding Role and Monetization

Yape continues to strengthen its position as Peru's leading digital ecosystem, with over 15 million users transacting 69 times per month and maintaining an NPS of 78%. Its contribution to Credicorp's risk-adjusted revenues increased to 8.9%. Lending through Yape reached PEN 1.8 billion, a 4x year-over-year increase, with 5.6 million clients receiving disbursements.

Lending now contributes 28% to Yape's revenues, while payments contribute 45%, with revenue-generating payment transactions growing 42% year-over-year.

BCP's Strong Performance and Efficiency

BCP reported a strong 29.2% ROE in Q2 FY26, driven by accelerating loan growth (10.9% YoY, 12.2% FX-neutral) led by retail and wholesale banking. The NPL ratio fell to 3.9%, and risk-adjusted NIM stood at 5.2%. Operating expenses rose 14.9% year-to-date, primarily due to IT expenses for commercial and transactional capability development and personnel expenses.

The efficiency ratio for the first half of the year stood at 38.6%.

Mibanco and Grupo Pacifico Highlights

Mibanco delivered healthy growth with disciplined risk management, achieving a 22.9% ROE and a record low NPL ratio of 4.8%. Mibanco Colombia also showed strong results with double-digit loan growth and an 18.5% ROE. Grupo Pacifico posted a 19.1% ROE, with solid profitability led by its Life business, which saw healthy organic growth.

The P&C business experienced lower net income due to higher claims, while Corporate Health and medical services remained stable.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.