Credicorp (BAP) Q4 2025 Earnings Call Transcript

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Date

Friday, Feb. 13, 2026 at 10:30 a.m. ET

Call participants

• Chief Executive Officer — Gianfranco Ferrari
• Chief Financial Officer — Alejandro Perez-Reyes

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Takeaways

• Loan growth guidance -- Management projects total loan growth of approximately 8.5% for the full year, reflecting anticipated currency pressures tied to the Bolivia loan book.
• Retail growth drivers -- BCP and Mibanco are projected to deliver double-digit loan growth, with BCP and Mibanco combined expected to reach around 11% growth at constant exchange rates, unlike the consolidated 8.5% due to Bolivian currency risk.
• Bolivia headwind -- The company noted an expected “potentially big impact” on consolidated loan growth from Bolivian devaluation and related exchange rate movements.
• NIM outlook -- Management expects net interest margin (NIM) to be maintained in the “mid- to high 6% range” over the year.
• Cost-to-income focus -- Alejandro Perez-Reyes stated that cost-to-income “We will reduce it,” with the upper end of guidance set below the prior year’s result due to income acceleration.
• Asset quality & cost of risk -- Asset quality is “improving”; the cost of risk remains within targeted bounds and has seen additional reductions in the mid and higher segment individuals.
• Fee income -- Fee income is guided to grow at a “low double digits” rate moving forward, based on accelerated digital initiatives and platform performance.
• Pension fund withdrawals -- Out of total PEN 25 billion in pension withdrawals, BCP captured more than PEN 11 billion, with management calculating about a 0.5% positive deposit impact and a potential 0.4% reduction in credit for the coming year.
• Ruta del Lima exposure -- The only exposure to Ruta del Lima is within subsidiary Pacifico, comprising less than 1% of the portfolio, 80% provisioned, with arbitration-driven recoveries expected at 5%-10% of the bond in the near term, and no further deterioration anticipated.
• Capital planning -- Core equity Tier 1 capital currently stands at 14% for BCP and 17% for Mibanco; capital will be brought down to internal limits—11% for BCP and 14.5% for Mibanco—via ordinary dividend declarations in March, returning excess capital to the holding company.
• Dividend policy -- The company targets an “increasing ordinary dividend each year,” with the possibility of a second extraordinary dividend depending on annual conditions, subject to board and shareholder approval.
• Yape credit portfolio -- The Yape credit book, consolidated within BCP, is expected to triple in coming years, though it remains a small part of total loans but generates above-average margins.
• Transparency on digital units -- Management stated efforts are underway to enhance disclosure on Yape’s financials, recognizing its integration with BCP limits clean separation for external reporting.

Summary

Credicorp (NYSE:BAP) provided explicit guidance for consolidated loan growth at 8.5%, shaped by Bolivian currency risk, while highlighting robust expansion in its core Peruvian businesses. Strategic priorities remain focused on scaling the digital ecosystem, with Yape’s rapid loan book growth and strong margins contributing incrementally, though still limited in overall group impact. The balance sheet remains well-capitalized before planned dividend distributions, enabling management to reaffirm commitment to rising ordinary dividends and potential extraordinary payouts. Fee income is expected to increase at low double-digit rates, fueled by digital initiatives and platform-wide synergies.

• Management places emphasis on "Execute with discipline" through actionable profit thresholds to sustain both core and disruptor investments.
• The phased pension fund withdrawals, captured significantly by BCP, have offered a near-term boost to deposits and liquidity but are expected to have a modest negative effect on credit demand in the upcoming period.
• The isolated Ruta del Lima exposure, held solely within Pacifico and heavily provisioned, is managed with arbitration-driven recoveries anticipated, with no further deterioration currently expected per management’s comments.
• The upcoming capital return cycle in March and April is structured to optimize holding company balance levels and directly support the dividend policy framework outlined in the call.

Industry glossary

• NIM (Net Interest Margin): A key banking metric denoting net interest income as a proportion of average earning assets.
• CET1 (Core Equity Tier 1 Capital): The core measure of a bank's financial strength from a regulator’s perspective, primarily common equity capital.
• Yape: A digital payments and micro-lending platform operated by BCP, used broadly in Peru and integral to Credicorp’s digital ecosystem strategy.
• Pacifico: Insurance and pension subsidiary of Credicorp, with standalone asset portfolios and credit exposures distinct from BCP.
• PEN: Peruvian sol, the official currency of Peru.

Full Conference Call Transcript

Operator: Or less Gomez with HSBC. Please go ahead.

Carlos Gomez: Hello, good morning and thank you for taking my question. I wanted to ask you about your exposure to Ruta del Lima the corporate in Lima. Whether you see any potential for recoveries from that particular credit if you have an exposure? And second, to what degree do you think that

Operator: the

Carlos Gomez: positive performance of the economy of business has been helped by the withdrawal from the pension fund. And could that be a break on activity when they are finished this year or next? Thank you.

Alejandro Perez-Reyes: Maybe, Eduardo, I don't want to do Yes. Yes. I can

Carlos Gomez: represents less than 1% of our portfolio. It's a position which currently provision at 80%. We're not accruing interest And are currently a couple of arbitration processes in The US that if successful, we think that

Alejandro Perez-Reyes: it would take a long time, but it will be benefit to the actual position that we have. Do expect in the near short term a payment that could be somewhere in the round between 5–10% of the of the of the of the bond. So and we do not expect further deterioration in the position that we have right now.

Alejandro Perez-Reyes: Marcelo, would you take your first Sure. So, hi, Carlo. Going to the part of the question. The withdrawals on the pension plans, of course, have different types of impact. Withdrawal has been of 25,000 million or PEN25 billion in U.S. terms. We at BCP have captured a little north of 11,000,000,000 of those 25,000,000,000. The payments are gonna continue until this until March, actually. There's the last payment is in March. And the effect in the economy it will it depends on how much goes to consumption.

But it certainly does help GDP We have a calculation that again, they need understanding that not necessarily everything is gonna go into in consumption, would be around 0.4% of the impact on GDP potentially if everything went to

Alejandro Perez-Reyes: to

Alejandro Perez-Reyes: consumption. And if you think about the impact on our

Alejandro Perez-Reyes: business,

Alejandro Perez-Reyes: we expect for 2026 an impact of around 0.5% on loans I'm sorry, on deposits on local funding that's a positive result. And in the credit part, it could have a negative impact of around 0.4%. Those are our calculations thinking about 2026. I mean, all in all, the short term effect are positive, certainly not negative. I think the main issue is the long term effect on pensions and the Peruvian economy. But in the short term, the impacts are not that material. And probably an a small addition also reduction in cost of risk in a specific segment

Operator: particularly

Alejandro Perez-Reyes: mid and higher segment individuals.

Carlos Gomez: Very clear. Thank you. Thank you. Next question comes Sorry, Carlo. Jafarago here. Just to clarify, Eduardo Monteiro from Bracitico took the question regarding Ruta Del Lima.

Alejandro Perez-Reyes: Because the only subsidiary at Credicorp Ltd. that has a position with Ruta del Lima which is less than 1% of our portfolio of Pacifico is Pacifico. BCP or near BCP nor any other subsidiary has a position in root of the limit. Sorry.

Alejandro Perez-Reyes: And we were in the last quarter.

Carlos Gomez: That was that was good underwriting. Thank you.

Alejandro Perez-Reyes: Thank you.

Operator: Our next question comes from Daniel Boss with Safra. Please go ahead.

Daniel Vaz: Thank you, and hi, everyone. Congrats on the full year results and also guidance. Thank you for the guidance on 2026. I'm looking to the loan growth if we compare to '25. You already grew 8.5% if you exclude the impacts on the FX and also the Bolivia And I'm seeing your 26% guidance also like around 8.5%. And I look at Peru's GDP around 3.5%, domestic consumption close to 5%. And also, if we take into consideration that you're accelerating in Mibanco, NPLs and multiyear lows BCPs, consumer lending also growing above 10%. I mean, what are we missing here What is currently holding overall credit below the double digit level?

I mean, what would need to change for you accelerate more meaningfully? Maybe, I don't know, middle market corporate loans or other segment that's pushing you behind. And if I may have a second follow-up, Are you planning to open Yape's P and L in separate from BCP, so we can have a clear and cleaner vision on the efficiency ratio and etcetera. For the yep. Thank you.

Alejandro Perez-Reyes: Hi, Daniel. This is Alejandro. I'll I'll take the first question and thanks for asking the question because it will give us an opportunity to clarify something. 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, probably gonna have to have some devaluation of the currency. And if that were to happen, that would impact our book. And that is considered in the eight and a half.

If you take BCP and Mibanco alone, we're expecting double digit growth for this year. In loans. And at actually, constant exchange rate, it's a little bit higher, around 11% for the year. So we are expecting and seeing an acceleration in the market. We expect that to continue and loan growth should be very strong this year. But there's this particular headwind in Bolivia that will have an impact on the whole of

Alejandro Perez-Reyes: Credicorp. When it materializes.

Alejandro Perez-Reyes: Regarding the Yape, maybe regarding the Yape question. The issue here is that Yape is within BCP. So Yape as a institution does not exist. So what we're currently so it's very hard to come up with a financial pure financial statement. But what we're working on is in order to provide you with more information, is working on how to be to provide more information but all within the transparency, we've always provided to the market. So that's how work in progress and we may came up come up with something in that line in the future.

Daniel Vaz: All right. Thank you. Thank you, Alejandro. Thank you, everyone.

Alejandro Perez-Reyes: Thank you. Three months. Yeah.

Operator: Our next question comes from Andre So to with Santander. Please go ahead.

Alejandro Perez-Reyes: Good morning to all. Thank you for the presentation. My first question is

Alejandro Perez-Reyes: regarding your logo guidance, but specifically connected this to YAPI.

Yuri Fernandes: Are you already including in this 8.5% something from JAPI? How much we can expect JAPI to contribute to lending of Credicorp in 2026? And if you can elaborate on the ramp up that you are seeing towards the multi installment in the consumer loans and also the pilots that you are conducting in SMEs?

Alejandro Perez-Reyes: Alejandro? Yes. Sure. The numbers

Alejandro Perez-Reyes: do include it. Let's remember that Yapi's meeting is in BCP's book. So when I was talking about this double digit growth in BCP, I was including already the amount from Yape. As for the growth, we are expecting the book to grow fast in the in the coming years. The number we're expecting I mean, we're we're not giving guidance for the number of the specific book, but it should probably triple in the next couple of years. So that's the speed of which it's growing. Having said that, it's still a small portfolio for credit corp's whole book. Okay? So it is growing fast.

And it has a good margin, so probably a bigger margin than other books, but it's still gonna be a smaller proportion of the whole book of the of the group. In the coming years.

Yuri Fernandes: And in terms of expenses, cost of income is always tricky because there are there are multiple variables involved, but what are you looking to in terms of total expense growth in 2026?

Alejandro Perez-Reyes: You're talking about

Yuri Fernandes: Credicorp? Or Credicorp. Right? Well, yes and a half. Yes.

Alejandro Perez-Reyes: Okay. So we actually got for cost to income as so and as I mentioned, we're expecting cost to income to reduce in the coming year We you look at the guidance we've just given, the upper side of the guidance is below the result of this year. We're seeing a lot of acceleration on the income of some of these initiatives. So on the expense side, we are gonna continue to invest in all of these not only disruptive initiatives, but also of the ongoing business and improving our capabilities to better serve the clients, you know. So yeah.

Yuri Fernandes: Okay. And then finally, on capital, when I look at 14%, core equity Tier one, Mibanco at 17%, How do you feel about those numbers considering the cycle both in terms of improved asset quality, but also faster loan growth Where do you guys feel comfortable for the for what is coming ahead?

Alejandro Perez-Reyes: Sure. The way in which we usually work is we have internal limits of 11% for BCP and 13 and a half for Mibanco. And we I'm sorry? 14 and a half. Yeah. 14 and a half for Mibanco. And what we do is

Alejandro Perez-Reyes: in March,

Alejandro Perez-Reyes: we declare 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.

Alejandro Perez-Reyes: We will reduce it

Alejandro Perez-Reyes: toward those levels in March. It has to be approved by the board and by the shareholders meeting. But that idea and so in that case, we will go back to those levels We do see increasing loan growth, but it's already in our numbers there shouldn't be any problems with capital. Going forward.

Yuri Fernandes: Perfect. And just with here, so that money is going to go is going to the holding company. And from the holding company, your the intention is to distribute to shareholders.

Alejandro Perez-Reyes: Exactly. So the way which it works is the policy is we basically send all excess capital

Alejandro Perez-Reyes: to the holding company.

Alejandro Perez-Reyes: Usually, this happens in March. And then in April, the credit or the holding company will propose a dividend and then and then declare it. An ordinary dividend. And what we're aiming for I mentioned in our call, is

Alejandro Perez-Reyes: an

Alejandro Perez-Reyes: increasing ordinary dividend each year. And we're in line to being able to do that. And then depending on how the year goes, we might give a second extraordinary dividend, but that is dependent on the conditions of the year.

Alejandro Perez-Reyes: I know you need this subject to approval. Exact. Governance approval.

Yuri Fernandes: Perfect. Thank you very much. And congratulations on the results.

Alejandro Perez-Reyes: Thank you.

Operator: It appears there are no further questions at this time. I will now turn the call back over to Gianfranco Ferrari Chief Executive Officer, for closing remarks.

Yuri Fernandes: As we look ahead to 2026,

Alejandro Perez-Reyes: I'm very confident in our positioning. We're entering the year with a healthy pipeline across businesses. An improving trade environment, and a clear strategic focus. We expect loan growth of around 8.5% supported by retail momentum at BCP and continued expansion at Mibanco. Alongside stable and healthy margins. With NIM expected to remain in the mid- to high 6% range. Asset quality is improving. And we expect the cost of risk to remain within our target range. Supporting risk adjusted profitability. Our focus remains on three priorities: scale and monetize our digital ecosystem expanding inclusion and accelerating new revenue streams. Leverage synergies across businesses, through data, talent and shared platforms to unlock growth and efficiency.

Execute with discipline applying clear profitability thresholds and long term value creation across core and disruptive initiatives. These are not new things, They reflect the strategy we've been executing on consistently. And they're paying off. We're seeing tangible results across our platforms, with fee income expected to grow at low double digits. Continued progress in efficiency and sustained investment in digital capabilities. Thank you for your trust in Credicorp Ltd.. We look forward to speaking with you next quarter.

Operator: Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect.

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