CREDICORP Q4 FY25 earnings call BAP

Peru's economy demonstrated strong performance in 2025, with GDP growing around 3.5% and domestic demand expanding close to 6%, driven by robust consumption and private investment. High commodity prices, particularly copper and gold, reached historical highs, supporting investment flows and sentiment. For 2026, a similar GDP growth of 3.5% is expected, with potential upside if commodity prices remain elevated and policy predictability improves. Inflation closed 2025 at a 7-year low of 1.5% in Peru, while Colombia saw inflation accelerate to 5.1% and Bolivia experienced a contraction in GDP for the second consecutive year with inflation around 20%.

Credicorp's digital initiatives, particularly Yape, are proving to be key drivers of value creation and financial inclusion. Yape closed 2025 with nearly 16 million monthly active users, engaging with the platform an average of 66 times per month, and achieved an exceptional NPS of 81 points. Monthly revenue per MAU expanded by 62% YoY, significantly outpacing the 15% growth in monthly expenses per MAU, demonstrating strong operating leverage. Lending activity scaled meaningfully, with Yape disbursing over 16 million loans to 4.1 million users, and its contribution to Credicorp's risk-adjusted revenue doubled to 7.2% in Q4 FY25.

Credicorp advanced key M&A moves, including taking full ownership of its medical insurance business and announcing the acquisition of Helm Bank for $180 million. The Helm Bank acquisition is strategically aligned to strengthen cross-border capabilities, adding a fully licensed FDIC insured bank in Florida with core transactional capabilities, residential real estate financing, and credit cards. This complements Credicorp's existing Miami presence focused on corporate and private banking, targeting affluent Latin American clients and regional corporates. The company maintains strong capital levels, with internal CET1 limits of 11% for BCP and 14.5% for Mibanco, and plans to distribute excess capital to shareholders through ordinary and potentially extraordinary dividends.

Universal Banking (BCP) reinforced its leadership in Peru with a full-year ROE of 24.7%, driven by disciplined execution and digital services. Microfinance (Mibanco) delivered double-digit loan growth and 20% profitability in Q4 FY25, outperforming peers by deepening its hybrid model and strengthening risk management. Grupo Pacifico achieved a solid full-year ROE of 21.4%, expanding policyholders by 50% in three years. Investment Management and Advisory saw full-year ROE increase to 16.4%, with Asset Management AUMs growing 35% and Wealth Management AUMs growing 24%.

Asset quality improved across the board, with Credicorp's NPL ratio standing at a low 4.5% and the NPL coverage ratio rising to 112.4% in Q4 FY25. The cost of risk stood at 1.8%, supported by fortified risk management and improvements in payment performance. Mibanco's NPL ratio fell to an 11-year low of 5.3%, and its cost of risk decreased by 44 basis points to 4.8%. The company plans to continue accelerating retail origination while managing risk, expecting loan growth to recover pace and the cost of risk to rise slightly within its appetite.