Credicorp (BAP) Q4 FY25 earnings call: guidance and Q&A

Can you provide an update on the latest polls for the upcoming elections, including leading candidates and their proposals? Also, when will Congress members be renovated and what is the impact of the dual chamber system?

Lopez Aliaga leads polls with 12%, followed by Mrs. Fujimori at 8%, with 42% undecided. Both leading candidates have pro-market plans. The new dual chamber system (Senate and Congress) and party thresholds are expected to provide more political stability. All elections (President, Congress, Senate) will occur on April 12.

“In the second place is Mrs. Fujimori at 8%. And there's like -- I believe it's 4 candidates that are basically tied at 4%. Sorry, I said 4% Keiko Fujimori is 8% and 4% -- there are 4 candidates around 4%. I would say that both Mr. Aliaga and Mrs. Fujimori pro market economic plans or government plans.”

asked by Ernesto María Gabilondo Márquez · answered by Gianfranco Piero Ferrari de Las Casas

OpEx grew double-digit in 2025. Should we expect more moderate OpEx growth in 2026? How are digital initiatives expected to contribute to adjusted revenues beyond the 10% ambition for 2025, and what about non-credit related revenues?

OpEx growth is expected to moderate in 2026, with the company anticipating operational leverage from digital initiatives to improve the cost-to-income ratio to 42% midterm. The 10% risk-adjusted revenue target for innovation is achievable for 2025, and while no specific target is set for 2027/2028, current initiatives are expected to continue scaling. Fee income growth is projected to be in the low double digits for 2026.

“Going forward, we do expect to continue investing in these different initiatives. Having said that, I think we're going to start seeing more and more the operational leverage of these initiatives right now, I guided to a lower number for next year. And if you remember in the Investor Day, we guided to a midterm, which is a 2- to 3-year term really of 42% in cost to income.”

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

Yape's lending now represents over 20% of revenue, shifting towards multi-installment loans. How does this duration shift affect provisioning for 2026? Can you disclose the ROE target for Yape's financial business versus its transactional side?

Yape's shift to multi-quota loans helps build portfolios faster and increases duration, but the expected cost of risk should remain controlled as the company started with higher-risk, short-term loans and now understands client behavior. The risk-adjusted NIM for Yape should remain comparable, with potentially less rates and less cost of risk for longer loans. The company does not provide a breakdown of ROE for Yape's financial vs. transactional segments.

“And the expected cost of risk should remain very controlled because as a prerequisite, we began with the higher risk short-term duration loans. And as we mentioned previously, understand the behavior we scale the size and duration.”

asked by Brian Flores · answered by César Ríos

Given the healthy pace of growth at year-end 2025, are there upside risks for Peru's economic growth in 2026, especially compared to typical election year slowdowns?

Yes, there are upside risks. The current economic activity trend does not reflect a typical election year slowdown. Consumer confidence in February 2026 is the highest since February 2020, supported by increased real salaries (+3.7% last year) and formal employment (+6% last year). The short answer is yes, there is upside.

“The trend we're seeing in terms of economic activity is like there was -- this wasn't an election year. And actually, I was reading earlier a report by Apollo Cosutoria, which is one of the most renowned fintanks in Peru and the level of consumer confidence in February of 2026 is the highest since February of 2020, so right before the pandemic.”

asked by Brian Flores · answered by Gianfranco Piero Ferrari de Las Casas

Considering Yape's revenue growth and other digital initiatives, how should we think about the net accretion to ROE, especially as investments might offset some gains?

The ROE from digital initiatives is expected to be positive starting in 2026, achieving the target set four years ago. The trend is for this positive ROE contribution to increase in upcoming years. Yape's cost per MAU is growing much slower than its revenue per MAU, and its cost-to-income ratio is expected to fall below BCP's (ex-Yape) in the next couple of years, providing a very positive impact.

“So this year, we expect the digital initiatives overall. So obviously, Yape being positive, others being negative. But overall, it's going to be positive starting this year. And the trend is that, that level of positive ROE should increase during the upcoming years.”

asked by Daer Labarta · answered by Gianfranco Piero Ferrari de Las Casas

Given the current ROE and expected loan growth, why is the midterm ROE guidance not higher? When do you expect to see larger midterm ROEs, and what is the long-term cost-to-income ratio target?

The midterm ROE guidance of 19.5% for 2-3 years was conservative due to the electoral cycle in Latin America. The company intends to revise this guidance after the electoral cycle (likely in August), expecting it to be north of 20%. The midterm cost-to-income target is 42%, but this will be revised over time as future investments are considered.

“So we guided for this midterm ROE in October of last year. And one clarification. When we're thinking about midterm, we're thinking 2 to 3 years, not necessarily the potential of Credicorp going forward. And we guided that, I would say, it was a conservative guidance given the fact that we are entering into an electoral cycle in Latin America.”

asked by Renato Meloni · answered by Alejandro Perez-Reyes

What is Credicorp's exposure to Grupos de Lima, and do you see any potential for recovery from this credit?

Credicorp's only exposure to Grupos de Lima is through Pacifico, representing less than 1% of Pacifico's portfolio and is 80% provisioned. The position is not accruing interest. There are ongoing arbitration processes in the U.S. that could provide long-term benefits, and a near-term payment of 5-10% of the bond is expected. No further deterioration is anticipated.

“This is a position that represents less than 1% of our portfolio. It's a position which is currently provisioned at 80%. We're not accruing interest. And -- there are currently a couple of arbitration processes in the U.S. that if successful, we think that it would take a long time, but it will be a benefit as the actual position that we have.”

asked by Carlos Gomez · answered by Eduardo Dasso

To what extent has the positive economic performance been helped by pension fund withdrawals, and could there be a slowdown in activity once these withdrawals conclude?

Pension fund withdrawals totaled $25 billion, with BCP capturing over $11 billion. Payments will continue until March. These withdrawals contribute to GDP (estimated ~0.4% if fully consumed). For 2026, a positive impact of ~0.5% on low-cost deposits and a negative impact of ~0.4% on credit are calculated. Short-term effects are positive or not material, but long-term effects on pensions are the main concern.

“This withdrawal has been of 25,000 million or $25 billion in U.S. terms. We, as BCP has captured a little north of $11 billion of those 25 billion. The payments are going to continue until this -- until March, actually, the last payment is in March.”

asked by Carlos Gomez · answered by Alejandro Perez-Reyes

Why is overall loan growth guided at 8.5% for 2026, given Peru's GDP and consumer growth, and strong performance in Mibanco and BCP consumer lending? What would need to change for double-digit growth? Also, are there plans to separate Yape's P&L from BCP for cleaner vision?

The 8.5% loan growth guidance for Credicorp includes a potential negative impact from Bolivia's currency devaluation. Excluding Bolivia, BCP and Mibanco are expected to achieve double-digit loan growth (around 11% at constant exchange rates), indicating strong market acceleration. Regarding Yape's P&L, since Yape is within BCP and not a separate legal entity, a pure financial statement is difficult. However, the company is working on providing more transparent information in the future.

“The guidance we've just given is for all of Credicorp. And there is one particular book, which is the Bolivia book, where we are expecting a big -- a potentially big impact from exchange rates. So basically, we believe Bolivia is in the right direction. But in order to move forward, it's probably going to have some devaluation of the currency. And if that were to happen, that would impact our book, and that is considered in the 8.5%.”

asked by Daniel Vaz · answered by Alejandro Perez-Reyes

With BCP's CET1 at 14% and Mibanco's at 17%, how do you feel about these capital levels given the cycle, improved asset quality, and faster loan growth? What are your comfort levels for what's ahead, and is excess capital distributed to shareholders?

The company maintains internal CET1 limits of 11% for BCP and 14.5% for Mibanco. The current high ratios reflect capital built throughout the year. Excess capital will be reduced towards these levels in March (subject to board/shareholder approval) and sent to the holding company. The holding company will then propose and declare an ordinary dividend, aiming for an increasing ordinary dividend each year, with potential for a second extraordinary dividend depending on yearly conditions. These levels are comfortable for expected loan growth.

“The way in which we usually work is we have internal limits of 11% for BCP and 13.5% for Mibanco. And we... 14.5% for Mibanco. And what we do is -- in March, we declared dividends and take the CET1 close to those levels. So the number you're seeing right now is pretty high because we've been building capital throughout the year.”

asked by Andres Soto · answered by Gianfranco Piero Ferrari de Las Casas