Credicorp (BAP) Q1 2026 Earnings Transcript

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Date

May 15, 2026, 10:30 a.m. ET

Call participants

• Chief Executive Officer — Gianfranco Piero Dario Ferrari de Las Casas
• Chief Financial Officer — Alejandro Perez-Reyes
• Chief Innovation Officer — Francesca Raffo Paine
• Chief Risk Officer — César Ríos

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Takeaways

• Return on Equity (ROE) -- 21.1% for the quarter, surpassing management’s own expectations and supported by core business strength.
• Loan growth -- 8.2% increase in quarter-end balances, mainly driven by BCP and Mibanco, with further acceleration anticipated in Retail and Microfinance.
• Net interest margin (NIM) -- 6.6% for the quarter, aided by improved asset yields, favorable funding mix, and sequential strengthening in risk-adjusted NIM.
• Net interest income -- Rose 10.9% year over year, attributed to loan portfolio expansion and contracting interest expenses.
• Non-performing loan (NPL) ratio -- Declined to 4.3%, reflecting improvements in asset quality and better debt repayment across segments.
• Cost of risk -- 1.3% overall, with BCP’s segment at a quarter-end low of 0.8% and Mibanco’s ratio remaining stable but expected to gradually normalize as new segments are added.
• Fee income -- Increased 15.6%, driven by robust transactional activity at Yape and BCP, with Yape now contributing 17% of group fee income.
• FX transaction gains -- Up 30.6% reflecting higher transactional volumes, mainly through BCP’s digital channels.
• Innovation portfolio revenue -- Accounted for 9% of risk-adjusted revenues this quarter, tracking toward a 10% target by year-end.
• Low-cost deposits -- Represented 63.9% of total funding at quarter-end, reflecting sustained client confidence and strong liquidity.
• Efficiency ratio -- 45.8% overall and within guidance; Yape’s growth kept BCP’s efficiency ratio at 38.6%, with Mibanco’s at 49.2% despite ongoing digital investments.
• Dividend -- Record high ordinary dividend declared at PEN 50 per share as capital levels move closer to targets.
• Yape user metrics -- Monthly active users reached 16.4 million, equal to coverage of 82% of Peru's economically active population; revenue per user increased 65%, with average 67 transactions per month.
• Yape loan disbursement -- Over 5.7 million loans issued through the platform, with credit penetration at 30% of MAUs and lending revenue up 3.6x year over year.
• Risk management actions -- Implementation of tighter origination standards, enhanced analytics, improved collections, and deliberate risk repricing led to improved credit performance.

Summary

Credicorp (NYSE:BAP) delivered record net income, citing diversified growth in risk-adjusted revenues and robust operating trends across segments. Management maintained GDP growth expectations for Peru at 3.5% but noted downside risks from macro indicators and potential El Niño effects. Yape, now consolidated under a new neobanking unit, demonstrated rapid scale and monetization, with international expansion underway in Bolivia and Chile. Strategic capital allocation remains biased toward growth, supported by ongoing digital investments, expanding loan mix, and data-driven risk assessment. Upcoming Peruvian presidential elections and regional inflation trends shape a conservative outlook, while structural shifts in funding and digital adoption bolster financial resilience.

• Management preserved ROE guidance at 19.5% for the year, but signaled potential to "be on the upper side of that number" if current trends persist.
• Deposit growth was explained as half attributable to pension fund withdrawals—expected to fade—and half to core transactional momentum shifting Peru toward a less cash-driven economy.
• The BCP segment reported NPL volumes down 11.1% and provisions down 35.1%, citing improved SME payment performance and reversals in corporate recoveries.
• Grupo Pacífico’s consolidated net income rose 19% year over year with the inclusion of Pacífico Salud, despite Life segment growth being partially offset by P&C declines.
• Fee income and FX gains achieved their highest combined contribution since 2022, highlighting the accelerated trajectory of digital transaction revenue.
• Operating expenses at BCP rose 15.1%, primarily due to technology and marketing spend; innovation portfolio expenses increased 40%, now representing 84% of disruptive investments.
• Management confirmed they are reevaluating medium-term targets for both disruptive initiatives and group ROE, with new metrics expected post-election.
• Structural constraints in Peru's legislative framework—specifically the Senate’s veto power—are viewed as stabilizing factors for macroeconomic policy, even amid upcoming leadership transition.

Industry glossary

• MAU (Monthly Active User): Number of unique users transacting on a digital platform within a month, used to assess scale and engagement for fintech initiatives such as Yape.
• NIM (Net Interest Margin): The ratio of net interest income to interest-earning assets, measuring profitability on lending and funding activities.
• NPL (Non-Performing Loan) ratio: Proportion of loans in default or close to default; a key asset quality metric for banks.
• Risk-adjusted NIM: Net interest margin after provisioning for loan losses, highlighting profitability net of credit risk.
• PEN: The Peruvian sol, Peru's official currency.
• Neo banking unit: An organizational structure consolidating digital banking platforms under a common management and technological framework.
• P&C: Property and Casualty insurance business lines.

Full Conference Call Transcript

Gianfranco Ferrari will begin the call with remarks on recent macro and political environment, The key levers of our decoupling strategy, and a brief overview of our quarterly results. Followed by Alejandro Perez-Reyes, who will provide a more detailed analysis of key macroeconomic indicators our financial performance and our outlook for full year 2026. Gianfranco, please go ahead.

Gianfranco Piero Dario Ferrari de Las Casas: Thank you, Milagros. Good morning, everyone, and thank you for joining us today. Let me begin by thanking our shareholders for the strong support at our recent Annual General Meeting. The outcome of the Board elections reflects a deliberate strategy led refreshment process fully aligned with Credicorp's long term priorities. As announced, shareholders approved the appointment of 3 new directors and the reelection of 6 current members. The new directors bring complementary expertise in areas that are increasingly critical for us, particularly technology and AI, financial and regulatory oversight and strategic execution. As we continue advancing our transformation and strengthening our operating model. Importantly, our governance framework remains robust. With key safeguards firmly in place.

Including a fully independent audit committee and independent directors leading critical committees. This provides a strong foundation as we navigate different operating environments. At the global level, recent geopolitical tensions particularly in The Middle East, have increased uncertainty. Mainly through higher energy prices and their potential impact on inflation and the outlook of foreign interest rates. Since our last conference call, Peru's economic activity has been affected by a series of temporary supply side shocks. Including higher oil prices related to the conflict in The Middle East a localized energy disruption and adverse weather conditions that led to contraction in primary sectors. That said, the positive momentum of the economy continues to remain solid.

Several activities indicator including private investment, continue posting double digit growth. Supported by resilient macroeconomic fundamentals and favorable export prices, with copper currently trading at around $66.5 per pound. Against this backdrop, we are maintaining our GDP growth expectation for 2026 at around 3.5%, though our outlook has become more skewed to the downside. With recent macroeconomic indicators tracking closer to 3.2%. More importantly, domestic demand remains particularly dynamic growing above 4%. Which we view as the more relevant driver for loan growth going forward. As we await the official confirmation of results, the presidential runoff appears likely to feature candidates with markedly different economic visions. Including 1 advocating for a significantly more interventionist role for the state.

Should that candidate prevail, some initial market uncertainty could emerge. However, we believe the composition of the Senate is the more decisive factor and is trending toward a configuration that supports macroeconomic fundamentals and institutional continuity. In our view, this legislative balance will act as an effective counterweight, helping to preserve a quality of stability. Peru's structural safeguards, including the Senate's Veto Authority, and constitutional hurdles, to significant policy shifts are likely to act as effective constraints. Helping preserve independence of the Central Bank and its mandate. Particularly regarding monetary financing to the treasury. Given this, we remain confident that Peru's economic model will continue to prove resilient. Supported by solid institutional frameworks.

Against this backdrop, we continue to closely monitor price dynamics and monetary conditions. Inflation has seen an uptick to 4% year over year, mainly driven by transport energy and food costs. As a result, monetary conditions are likely to remain somewhat tighter than previously anticipated. Across the region, the operating environment remains mixed. Reflecting the initial impact of external pressures. In Colombia, activity remains relatively resilient. Supported by consumption, while policy uncertainty persists ahead of the presidential elections on May 31. In Chile, growth has softened amid weaker early year activity and higher oil prices. At the same time, the new government offers improved prospects for private investment. In Bolivia, macroeconomic conditions remain challenging with performance exceeding expectations.

Overall, while external conditions remain dynamic, the resilience of our core markets combined with the strengths and attractiveness of our offerings give us confidence that 2026 will remain a solid year. As we look ahead, we will further execute our decoupling strategy through 4 differentiated growth anchors. First, we are strengthening our leading position in the unpenetrated markets, where we continue to see clear avenues of growth. We see significant room to deepen financial inclusion and expand our reach across client segments where structural gaps persist. This enables us to grow while maintaining disciplined risk standards. Second, we are scaling our integrated digital ecosystem.

In 2026, we will leverage our platforms to accelerate client acquisition deepen engagement and increase cross sell. While also improving efficiency and customer experience. A key component in our innovation portfolio is our neobank unit, which, effective April 1, brings together Yape and Eo in Peru Tenpo in Chile and Yape in Bolivia under a common umbrella. Led by Raimundo Morales. These platforms expand our reach and open new avenues for growth particularly in payments and lending. More broadly, we are deepening our competitive moat by leveraging our scale client base and ecosystem integration to drive sustained differentiation and progressively higher monetization. Third, we are unlocking synergies by leveraging share capabilities across our ecosystem.

We are placing greater emphasis on data analytics and risk management capabilities that can be deployed across businesses. This also includes advancing our knowledge sharing agenda so that best practices can be applied across subsidiaries. Improving decision making, client targeting and risk assessment. While we are still in the early stages, we are already seeing tangible benefits. And we believe this represents a meaningful opportunity going forward. Finally, delivering strong and resilient returns across economic cycles. This is underpinned by a prudent and holistic approach to risk and capital management across the organization. We continue to strengthen our capabilities across credit, liquidity and operational risk. While maintaining a disciplined approach to capital allocation.

This integrated framework is translating into more consistent performance and reinforces our resilience. Enhancing our ability to navigate volatility support sustainable growth and protect returns across different macro environments. Turning now to the first quarter results. We reported a very solid ROE of 21.1%, which exceeded expectations and reflects strong fundamentals across our core businesses. Operational performance was robust across core businesses. Additionally, we achieved 9% of risk adjusted revenues from our innovation portfolio this quarter. Advancing toward our 10% target by the end of this year. We are seeing an acceleration of credit demand across our main lending segments. In the first quarter, loan growth was robust in BCP and Mibanco.

We expect Retail segments and Microfinance to accelerate in the coming quarters. Risk adjusted NIM strengthened sequentially, supported by improved asset quality and a resilient underlying NIM. As our loan portfolio expanded and funding mix improved. Deposit growth remained strong, reflecting system liquidity and sustained client confidence. While continued investments in service and digital capabilities deepened our client relationships and drove market share gains in low cost funding, reaching 41.2% this quarter. Asset quality reflects proactive measures, taken since 2023, including tighter origination standards risk repricing, enhanced loan rescheduling and greater investments in analytics alongside a favorable macro environment. Additionally, our strong solvency has enabled us increase our dividend to PEN 50 per share.

While also supporting our plans for sustained long term growth. Our efficiency ratio is at 45.8%, with our guidance 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. These results underscore the strength of our core operations and our long term commitment building a more agile, client centric and resilient financial platform. Before I turn the call over to Alejandro, I would like to congratulate him on his appointment to lead our Finance, our microfinance business, at Mibanco. These transitions reflect the depth of talent we continue to build across Credicorp, and our disciplined approach to succession planning and leadership development.

We are also very pleased that Ignacio Belaounde will assume the CFO role later this year. Bringing strong financial and strategic experience to the position. In the meantime, we still have Alejandro with us for 1 more quarter of earning calls before this transition takes effect. With that, Alejandro, please go ahead.

Alejandro Perez-Reyes: Thank you, Gianfranco, and good morning, everyone. As Gianfranco mentioned, we delivered remarkable overall operating results. Including record high net income, which reflects solid growth in risk adjusted revenue streams in our business ecosystem. As I discussed the quarter highlights, I will focus on the year over year operating trends. Loans measured in quarter end balances increased 8.2%. This uptick was driven primarily by BCP through both retail and wholesale banking and by Mibanco. Asset quality improved across the board, with Credicorp's NPL ratio declining to 4.3% for the quarter.

This positive trend was driven by higher debt repayments especially among retail banking clients supported by ongoing refinements in underwriting standards, and collections management and growth in liquidity through pension inflows. In this context, the cost of risk stood at 1.3%, bolstered by improvements in payment performance, in a more favorable macroeconomic environment and by strengthened risk management. Net interest income increased 10.9% spurred by growth in interest income driven mainly by loan portfolio expansion by a contraction in interest expenses as interest rates fell and low cost deposits continued to gain share to account for 63.9% of the funding base at quarter end. This context, NIM stood at 6.6%.

Other core income grew 19.5% Fee income increased 15.6% boosted by transactional activity at Yape and BCP. Gains on FX transactions rose 30.6% through higher volumes at BCP. Lastly, the insurance underwriting results fell 9.1% on the back of lower premiums in the P&C business and inflationary pressures on expenses for claims in the Life business have no impact on the bottom line given that these claims are compensated with inflation linked financial Excluding inflation based impacts on claims expenses, the underwriting result rose 4% year-over-year. Driven mainly by the Life business. We delivered 21.1% ROE this quarter. Fueled by strong loan growth strengthened asset quality and diversified income sources.

Showcasing the success of our decoupling strategy risk management measures and investment in digital capabilities. Finally, as Gianfranco mentioned, we recently declared a record high ordinary dividend of PEN50 per share as we moved capital levels closer to target across our subsidiaries. Next slide, please. GDP is expected to have grown close to 3% year-over-year in the first quarter. Reflecting solid momentum in the economy despite localized energy disruptions and higher oil prices in March. More importantly, domestic demand is expected to have expanded by more than 5% year-over-year for the 6th consecutive quarter. High frequency indicators continue to signal broad based and robust expansion. With several indicators posting double digit year over year growth.

For instance, during the first quarter, light vehicle sales led the gain rising by nearly 40%, followed by uptick of nearly 20% in capital goods imports and 14% for cement consumption. Historic high terms of trade and ongoing business cycle momentum remain the key drivers of this performance. While higher oil prices introduce uncertainty, Peru is less vulnerable than other peers of the region given its lesser net importer position. Another source of uncertainty going forward will be the impact of Enel Nino event. So far, this has been felt in the first anchovy fishing season but it is still early to tell how we will develop going forward.

Also, as Gianfranco mentioned, while the presidential elections may generate some near term uncertainty, broader institutional framework, including the role of the Senate, should help limit the scope of our broad changes and provide a measure of stability. Next slide, please. The Federal Reserve has maintained its policy rate since December. As it continues to assess incoming economic data and determine how rising oil prices impact inflation and employment. In Peru, annual inflation rose to 4% year-over-year in April. Its highest level in more than 2 years, reflecting primarily higher local transportation prices. Central Bank has indicated that inflation is expected to return to the target range within the forecast horizon and converge to 2% next year.

As the effects of these shocks gradually dissipate. In Colombia, annual inflation accelerated to 5.6% in March due in part by the 23% minimum wage increase rolled at the beginning 26. To contain inflation expectations, the Central Bank has increased its rate by 200 basis points since December. Residential elections will be held in 2 weeks and polls suggest a runoff is likely in June. In Chile, investment sentiment improved after President Cast election although recent gasoline price increases have tempered the outlook. Annual inflation reached 4% in April and the Central Bank has held the policy rate at 4.5%. Next slide please. BCP's profitability posted solid start to the year.

Supported by loan growth under disciplined risk management and diversified sources of revenue. In this context, ROE stood at 30.5%. A year over year basis, total loans measured in end of period balances rose 7.3%. In FX neutral terms, loan growth stood at 9.1% driven by both wholesale and retail banking. Notably, disbursements of long term wholesale loans were buoyed by a favorable outlook for private investment. Retail banking, loan growth accelerated mainly in individuals. Reflecting an increase in our risk appetite for consumer loans and an uptick in mortgage loan disbursements. Also on the back of lower interest rates. SME payment loan disbursements were also boosted by an increase in our risk appetite.

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. NPL volumes declined 11.1%. Mainly due to debt cancellations by SME-Pyme clients under judicial recovery and secondarily by debt repayments from individuals who avail those funds from pension fund withdrawal. Improvement in the quality of origination and in collections management also contributed to the result. Provisions fell 35.1% driven mainly by retail banking, which was positively impacted by improvements in payment performance across earlier vintages in consumer, and credit card loans and by reversals in wholesale banking after a corporate client regularized issues regarding refinanced exposure.

In this scenario, the cost of risk decreased to 0.8%. While risk adjusted NIM stood at a record high of 5.5%. Other core income rose 18.7% driven mainly by an increase in fee income strong transactional activity was channeled through Yape and other transactional products at BCP. A secondary driver was growth in gains on FX transactions, which was fueled mainly by retail clients served through the digital channel. Variations in volume reflect volatility related to tensions in The Middle East and the Electoral Calendar. Although the ratio of other core income to assets stabilized this quarter due to asset growth, the contribution of fee income plus net gains from FX transactions reached its highest level since 2022.

Reflecting the strength of our diversified sources of revenue. Operating expenses rose 15.1%, mainly due to an uptick in administrative expenses. Evolution was driven primarily by Yape's use of cloud infrastructure and IT related services and secondarily by marketing and consulting expenses in the traditional business. Our personnel expenses rose this quarter as we ramped up core business projects to develop commercial and technological capabilities. In this context, operating expenses and personnel expenses in particular led the efficiency ratio to stand at 38.6%. Next slide please. With 16.4 million monthly active users Yape continues to expand its MAU base while shifting its focus towards deeper engagement and monetization.

Reaching approximately 82% of Peru's economically active population, the platform has achieved nationwide scale. At this level of penetration, incremental growth is driven by higher recurrence broader multi product adoption and monetization of an already large installed base. Positioning Yape to continue cutting into cashless share of payments. The platform's positive evolution into a super app is reflected in its engagement metrics. Users transact 67x per month supported by consistently strong customer satisfaction. With an NPS of 77 deeper engagement translate into unit economics, with revenue per MAU increasing 65% year-over-year to while this surpassing growth in expenses per MAU, which rose 26%. This proves that operating leverage is on the rise consistent with Yape's asset-light and scalable model.

Payments account for 47% of total revenues. While also serving as a core engine for data generation and cross selling. Revenue generating total payment volume grew 80% year-over-year. Reinforcing Yape's position as Perdue's leading digital payment network. Lending revenue grew 3.6x year-over-year. Positioning as the platform's fastest growing vertical. In the 2026, more than 5.7 million loans were disbursed, leveraging proprietary data digital underwriting and distribution to serve the underbanked. With credit penetration at approximately 30% of MAUs, is still a significant upside to accelerate adoption. Yape has the potential to significantly scale its contributions to Credicorp over time.

As of the first quarter, the app represented 17% of the group's fee income and 8% of the group's risk adjusted revenues year over year. Up from 1% and 2.5% respectively. Next slide please. As Peru's microfinance system continues to gain traction amid a more dynamic economic backdrop, its performance has followed an upward trend. In this context, Mibanco outperformed its peers by strengthening its transactional value proposition gaining productivity and strengthening credit risk management. As a result, Mibanco sustained double digit loan growth and robust profitability of 21.7% this quarter. From a year over year perspective, loans measured in quarter end balances grew 12.4%, riding an upswing in loan disbursements, which hit a new all time high in March.

The NPL ratio continued with a downward trajectory that began last year falling to 4.9%, an all-time low. Our active pricing management coupled with a decrease in the cost of funding boosted NIM. Which stood at a strong 14.9%. The cost of risk fell 29 basis points on the back of lower risk vintages currently account for 88% of total loans. The cost of risk remained low this quarter, anticipate some gradual normalization in the 2026 as we incorporate newer and smaller customer segments to bolster portfolio growth while remaining comfortably within our risk appetite. In parallel, risk adjusted NIM stood at 11.3%. Slightly below the 4 year high achieved last quarter.

Operating expenses increased due to higher administrative expenses related to ongoing investments in strategic projects. Primarily linked to digital transformation initiatives to modernize our technological architecture and improve client experience. Efficiency improved despite these investments and stood at 49.2% at quarter end. Mibanco Colombia's results continue to register double digit loan growth both quarter over quarter and year over year. Bolstered by control risk management and improving productivity. Consequently, profitability stood at 18.3% at quarter end. Which represents a sizable improvement over the single digit levels reported at the same time last year. Next slide please. Grupo Pacifico delivered solid underlying results in the first quarter with ROE of 18.9% for the quarter. Organic net income grew 11% year-over-year.

Driven mainly by the Life business and partially offset by the P&C business. In our Life business, commercial execution was strong, supported by growth in our bank assurance channel and an uptick in issuances of optional policies in retail segment. Both consistent with our strategy to deepen penetration in high value customer segments. The net loss on securities dropped this quarter, reflecting a base effect generated by credit downgrades on a couple of assets in the investment portfolio the first quarter of last year. In our P&C business, net income fell. This evolution was fueled primarily by a drop in premiums in the corporate segment and secondarily by an uptick in claims in the personal and medical assistance lines.

In addition to organic growth, net income accelerated year over year following the consolidation of Pacifico Salud which includes medical assistance, corporate health insurance and medical businesses that continue to advance through solid commercial dynamics and disciplined cost management which bolsters our confidence in Pacifico Salud's long term earnings contribution. If we include the full consolidation of Pacifico Salud's operations, Grupo Pacifico results, consolidated net income rose 19% year-over-year. Next slide please. ROE for our investment management and advisory business stood at 15.7% in the first quarter. Let me give a brief overview of this quarter's year over year dynamics and underlying structural trends.

Quarter results showed mixed dynamics, Revenues benefited from stronger performance in our wealth and asset management businesses with AUMs expanding by 28% and 34%, respectively. Our capital market line also evolved favorably in line with market conditions. These favorable business dynamics were partially offset by an increase in operating expenses. Which was mainly attributable to a particularly low comparative base of 2025. In this context, net income fell 8% over the period. Next slide please. Now I would like to review Credicorp's consolidated evolution. Its interest-earning assets rose sequentially. Driven mainly by growth in investment balances as we took advantage of tactical opportunities capitalize on our cash position.

Loan growth fueled by BCP also contributed to the uptick in interest earning assets albeit to a lesser extent. On the liability side, low cost deposits posted an increase, thanks to our solid transactional offering and inflows from pension fund withdrawals. Structural balance sheet trends are better explained on a year over year basis. Loan growth, which was driven mainly by BCP and Mibanco, led the interest earning asset mix to generate higher yield despite cash buildup. In this context, the yield on interest earning assets rose 10 basis points year-over-year.

On the liability side, lower interest rates along with an increase in the share of low cost deposits resulted in a 31-basis-point decrease in the funding cost over the same period. In this context, NIM stood at 6.6% for the quarter. Next slide please. Moving on to loan portfolio quality. Asset quality continued to improve this quarter as NPL volumes contracted across segments. The NPL ratio at quarter end was 4.3%, and is below the levels reported prior to the 23 recession. Provisions dropped over the last 12 months buoyed by steady economic recovery which strengthened repayment dynamics and by effective risk management at both BCP and Mibanco. In this context, the NPL coverage ratio rose and stood at 113.8%.

Going forward, we will continue to accelerate retail while maintaining a disciplined approach to risk. We expect loan growth to maintain dynamism. The cost of risk in turn is expected to increase modestly, but remain within our risk appetite. Next slide please. Core income reached new record levels. Supported by this quarter's operating momentum across core businesses. Which was driven by loan growth in higher yield segments. A drop in the funding cost and an upward trajectory for transactional activity. On a yearly basis, 13.3% growth in core income was driven by revenue streams with net interest income, fees and FX gains reporting double digit gains. Net interest income grew 10.9%.

Benefiting from sustained growth in our low cost deposit base and resilient asset yields. Fee income in turn rose 15.6% on the back of dynamic bancassurance, Assurance, payments and transactions transactional services, while the 30.6% uptick in FX gains supported by higher transactional volumes and disciplined pricing. Profitability metrics continue to strengthen with risk adjusted NIM trending upward to 5.81%. Reflecting improved pricing, portfolio mix optimization and effective risk management. The efficiency ratio for the year stood within guidance at 45.8%. Operating expenses grew 13.1% fueled primarily by core businesses at BCP and investments in our innovation portfolio. Growth in core expenses at BCP was driven mainly by IT expenses for commercial and transactional capabilities.

Expenses for our innovation portfolio, which were led by Yape, Tenpo and Culqi, rose 40% and represented 84% of disruptive expenses for the quarter. Next slide please. ROE for the quarter was 21.1%. Supported by solid business performance and a favorable economic backdrop. Net income reached a record high once again. We achieved this by capitalizing on our structural strength. Our differentiated digital and transactional capabilities, low funding cost advantage loan portfolio growth, particularly in retail segments and sustained improvements in risk management. Now, we will move on to our guidance. Next slide, please.

We maintain our expectation for Peru GDP growth stand at around 3.5% in 2026 though we recognize that risk to this outlook are tilted to the downside. We expect our total loan book to grow around 8.5% measured in quarter end balances. Or around 10.5% on an FX neutral basis. Amid a dynamic economic backdrop and strengthened origination levels, we expect growth in balances to continue accelerating over the remainder of the year. Driven primarily by retail banking at BCP and by Mibanco. The acceleration anticipated for loan growth and the shift in the mix towards retail should support NIM. Which we expect to stand between 6.4% and 6.7%. This quarter's cost of risk was below expectations.

We anticipate that retail origination will continue to increase As a result, the cost of risk is expected to approach the lower end of our guidance range and our risk adjusted NIM is expected to remain within guidance. On the efficiency front, we maintain our guidance range for 2026. Turning to non interest income. As we mentioned in our previous earnings call, continue to expect fee income to grow in the low double digits this year driven by an ongoing uptick in economic activity and in the diversification of our income sources. The insurance side, our underlying insurance business is expected to continue performing solidly.

However, insurance underwriting result which was bolstered by extraordinary reversal for the D&S business in 2025 is expected to drop by high single digits. Excluding the D&S business, the result is on track to deliver high single digit growth. Although we are reaffirming our ROE guidance of around 19.5% for 2026, the strength of our first quarter performance and the ongoing positive trends suggest that we are well positioned to achieve results on the upper side of this level. Remain prudent in the face of global and local uncertainties but our outlook reflects confidence in our ability to deliver strong value for shareholders. With this comment, I would like to open the Q&A session.

Operator: Thank you. We will now begin the Q&A session. If you would like to ask a question, If you have connected to the call using the HD web phone on your computer, please use the keypad on your computer screen. You are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Will pause for just a moment to allow everyone the opportunity for questions. We ask that you please only ask 1 question at a time. After each question has been addressed by our speakers, you will then be allowed to ask as many follow ups as needed. But, again, please only ask 1 question at a time.

Thank you. Our first question comes from Ernesto Gabilondo with Bank of America. Please go ahead.

Analyst: Thank you. Hi. Good morning, Gianfranco. Alejandro, César, Francesca, and Milagros. Alejandro, best of luck in your new position. And Ignacio, wishing you the same. Congrats on your record high results. My first question is whether you could provide some color on the presidential election and the potential impact of El Nino. Regarding the election, with almost 100% of the votes counted. And as you mentioned in your remarks, the second round appears likely to be in between Fujimori and Sanchez. Could you share any insights on potential alliances or support these candidates may receive from other potential contenders are not passing to the second round. And on El Nino, expectations are currently pointing to a strong event.

Super Nino is being ruled out for now. But based on your experience with this type of weather phenomenon, how likely is that this outlook change throughout the year? And in case of a strong El Nino, what measures would you expect to evaluate or implement? Thank you.

Gianfranco Piero Dario Ferrari de Las Casas: Good morning, Ernesto. This is Gianfranco. Thank you for your words. Let me take the political question, and then I will ask César and Alejandro if you want to comment on the El Nino, which, by the way, there are actually 2 El Ninos. As we speak. 2 El Nino effects, you know, effects as we as we speak. Yeah. You are right. Officially, there is no official results, and so we do not know who the 2 candidates that are gonna go to the Ballotage or the runoff. But yes, we are close to 100%, so the probability of Fujimori and Sanchez going to the second round is very high.

Regarding your question on alliances and so on, there is nothing there is nothing material as we speak. But on top of that, also bear in mind that the endorsement power that there is in Peru is quite limited. So we will have to see what happens going on. The actual the only poll that was published or that is public after the first round is that they are basically when I say they missus Fujimori and mister Sanchez are basically tied. So with that, I will ask César to go with the comments on El Nino, please.

César Ríos: Yes, Franco. Hi, Ernesto. Regarding El Nino, I think, first, it is important to clarify that we deal with 2 different phenomena, the Costa del Nino that we are already in El Nino phenomenon at this point. I am going to detail a little bit more. And the second 1 that probably is the more globally awareness is the Central Pacific El Nino. They are 2 different phenomenons. Depending on the period of the year, this can affect Peru differently and particularly are dangerous when the confluence of these phenomena coincide with the summer. Even say that, regarding the local El Nino, we are already in a low moderate effect at this point.

It has already affected the efficiency zone, has been temporarily halted after only 1-fourth of the usual harvest volume is expected for this year. So these effects are already impacting the economy. And we are also closely monitoring the effects at this point in the agricultural sectors. Usually the impact is diminished the level of productivity But in some cases, it is also compensated by higher prices. So we are in the point that where we are closely monitoring We are still not changing our policy credit policy.

And probably around September, we are going to have much clearer indication of the real impact And in this point, we should start taking measures considering not only these already mentioned in effect, but heavy rains in the north part of the city. So in our expectation, we are already considering this moderate impact and closely monitoring potential higher impact for the last part of the year. I do not know if this helps.

Analyst: Yes. Thank you very much. And yes. Sorry.

Alejandro Perez-Reyes: Hi. This is Alejandro. First, thanks for your words. I was I just wanted to give you a little bit more color or numerical color on the impact of El Nino over time. In 2 thousand we had what is considered an extraordinary El Nino. And the impact on GDP in Peru was 1.7%. The moderate del Nino of 2017 was 0.8% and the strong El Nino of 2023 was 1.1%.

So depending on going back to César's comments, it is still very early to know what kind of El Nino will get depending on the summer and the confluence of both the El Nino Costero and the lower El Nino, whether it is going to be moderate or strong, we are going to see the impact around 1% of GDP of Peru if it to materialize.

Analyst: Great. Super helpful. Good color. And then just my second question is related to asset quality The cost of risk has become very well below your guidance. So just wondering whether there are potential downside risks or it is still early to assess that considering and we need to wait for the outcome of the presidential election and to evaluate the impact of El Nino.

Gianfranco Piero Dario Ferrari de Las Casas: Yes. César?

César Ríos: Yes. Thank you, Ernesto. I will like to highlight 2 different behaviors in our portfolio. Let's say, Mibanco, as Alejandro has mentioned, has had a very good performance, but not a dramatical change recently, as you can see in the recent evolution. And these numbers reflect improved risk performance because at the same time that we are decreasing the cost of risk, we are increasing our exposure in low segment tickets. Particularly below PEN 5 thousand. So a good performance, but not a dramatical change on the quarter. In the case of BCP, you can see a significant change on the quarter. And I would like to mention 2 different kinds of effects.

1 is a more structural effect that is the combination of the origination and that we have taken recently that has improved the quality of risk segment by segment. And we are reaping the benefits of these measures taken. And additionally, we are starting to see also the contribution, the increased contribution of all provisions of the new originations in higher yielding segment that has been more pronounced the last quarter of last year and this first quarter as you have seen in our figures. that is structural And segment by segment, we are still seeing an improvement, but it is not a dramatically improvement.

But the effect that has been changing recently has been some 1 off effect that has impacted the quarter in particular. We have an unusually high as a product of the boom in the mining sector, of profit sharing So this profit sharing has improved the 1 off payment capacity of the middle segment that was the focus, our origination in the last 2 years. So good payment additional payment from this source. The liberated funds from the pension funds that has improved also in the same segment. And on top of that, a combination of payments in the wholesale portfolio.

In contrast with the last quarter in which we have additional provision for a number of construction related segment clients. In this quarter, we have a liberation of provision. So you have good underlying behavior in BCP with the slight decrease of the cost of risk gradually increasing as we shift the portfolio. But the combination of 3 very point in time effects in the quarter that I would say that exacerbate the decrease of the cost of risk. As we start to originate faster and faster in higher yield segments.

We are going to increase the cost of risk towards the expected risk that Alejandro has shared and our expectation is to be with the information that we have in the lower range of this the guidance.

Analyst: Super helpful, César. Thank you very much.

Operator: The next question comes from Brian Flores with Citi. Please go ahead.

Analyst (Brian Flores): Hi, team. Thank you for the opportunity to ask questions. I have 1 quick question or sorry, a follow-up on Ernesto's question regarding asset So, is it fair to say that these maybe extraordinary cost of risk that we have seen is allowing you to maybe allocate a bit more capital on, as you mentioned, higher yielding credit. We should see this maybe during this year? And then maybe my question is on your ROE guidance. I think you mentioned that maybe you could be on the upper side given the trends that you are seeing. And I think maybe cost of risk is perhaps the 1 that is allowing you to already be mentioning this.

So I just wanted to see if besides cost of risk, you see also another of these key variables, maybe efficiency, allowing you to be on the upper side of the range, as you were mentioning? Thank you.

Gianfranco Piero Dario Ferrari de Las Casas: Good morning, Brian. Let provide more let's say, longer term vision regarding the question on cost of risk, and then I will ask both César and Alejandro to answer on the both cost of risk and ROE. First of all, we do not manage the company by only taking a look at cost of risk but most importantly, taking a look at risk adjusted NIM. So we have been providing, I believe Alejandro mentioned it in when he commented about guidance, is that we do expect cost sorry, risk adjusted NIM to increase even though we expect cost of risk at the same time to increase.

And the main reason is because the retail portfolio mostly microfinance and the Yape lending book is going to go are going to grow at a much faster pace. We are not having said that, we are not making decisions based on a short term cost of risk results but on a much more longer and structural vision regarding the opportunities we see mostly again in the retail portfolio, in the underbanked and the unbanked and leveraging a lot on the data we have been gathering over the last actually 10 years through Yape and other digital channels. Maybe I will end up with the comment on guidance on ROE. it is not only a matter of cost of risk.

And well, the first quarter has been over 20% already. The economy in Peru is really performing quite well. Therefore, we have a lot of tailwinds. So it is not only a matter of what we are doing as a company, but also the environment is quite good. I do not know if César and Alejandro would like to add something in that sense. I think Gianfranco has explained perfectly our general approach.

And I will say, if we are taking confidence to increase our risk taking is because segment by segment, we are having results within our expectation or slightly better. that is what gives us confidence to continue growing and accelerating risk taking in higher yield, higher risk segment. The temporary effect were exactly that temporary effect that are very welcome But our strategy continues to perform based on the that we are building and the results that we are monitoring and adjusting.

Alejandro Perez-Reyes: Yes. Hi, Brian. This is Alejandro. I am going to add something on the ROE guidance. We have not changed the guidance, which is around 19 and a half percent But as I mentioned in my remarks, we are expecting to be on the upper side of that number. Given what we have already seen this first quarter and we 've had ROE above 20% and the strength of the economy. Having said that, there are of course some important events that we need to monitor that might have an impact like the elections and the Nino that we were already discussing.

But we believe that given the strength of the economy given all the things that we have been developing both in risk management, transactional capabilities, etcetera, and what we see the we should be able to be on the upper side of the 19.5 for this year. Going forward. And again, it is not just cost of risk, there is also the loan growth that we are expecting that can be a little bit stronger. And hence the and then you have the risk adjusted NIM that Gianfranco mentioned.

Probably being strong for the year and all those figures together will probably allow us to be above the 90.5 But again, we are at a moment in the year where we have seen an amazing first 4 months because April has also been very strong in the economy. But we are about to choose a new president and there is this El Nino effect going on. So the reason why we want to remain prudent as of now.

Analyst (Brian Flores): No. Very clear, Tim. I appreciate just if I understood correctly, given the improvement in margin of ROE, your priority in capital allocation if I understood correctly, should be reinvestment in growing, right, rather than extraordinary dividends, all of that, because I think the unit economics are healthier. Right?

Gianfranco Piero Dario Ferrari de Las Casas: Sure. I mean, the priority is definitely growth and we believe there is a big opportunity in many of the segments that we serve. Perfect.

Analyst: Thank you.

Operator: The next question comes from Thiago with UBS. Please go ahead.

Analyst: Hi, guys. Congratulations for the results. Very strong numbers. Can you give us some indication about the performance of Yape in Bolivia? And also, if you believe this platform can be implemented in other places, let's say in Chile, for instance? So those 2 points how Yape is performing in Bolivia and if it is possible to see a kind of internationalization of Yape?

Gianfranco Piero Dario Ferrari de Las Casas: Francesca, could you answer that please?

Francesca Raffo Paine: Sure. Thank you, Thiago, for the question. Yape Bolivia has been growing at a steady pace. I would say that last year, it is accelerated growth, reaching over 2 million customers. For a smaller country that is Bolivia. But bear in mind that Bolivia had a different starting point as a rule. It had an interoperable system in place. So it is a different it is a different model. But we have been successful to gain my and to be the leader in the market. Having said that, we have a very solid competitor that is close by. So at a transactional pace, we are growing different again than Peru.

More than just P2P transactions, there is a lot of P2M transactions. So it is a merchant driving system. And we are following the past similar to Peru in having in a monetization which is putting a lot of services around utility payments and so forth and digitizing payments as a whole. And then gaining a lot of information to go into value added services around lending and other and other products. So Bolivia is performing good. We have worked a lot around technology as well. As you know, we have a bank there, and we began that process with their technology. That brings me to the next your next comment around the internationalization.

So Chile for tour with Tempo as a new bank there as Gianfranco mentioned leveraging capabilities and there is a cash based economy in Chile as well that we are, of course, looking at. The technological piece, I think, is super important. And Yape, has been working around creating a platform that is much more exportable.

Gianfranco Piero Dario Ferrari de Las Casas: Yes. Maybe Thiago, just to complement Francesca's answer, we announcing that on April 1, we created neo banking unit under Raimundo Morales, the current CEO of Yape, Yape Peru, I mean. And under that unit, Yape Peru, Yape Bolivia, Eo, and Tenpo are going to be operating. The logic part of the logic well, most of the logic is to leverage on tech capabilities, knowledge of the markets and so on. And part of the logic is what you just said. Is there are there any possibilities to grow elsewhere? No, they are clear.

Analyst: For the answers.

Operator: The next question comes from Renato Meloni with Autonomous Research. Please go ahead.

Analyst (Renato Meloni): Hi, everyone. Congrats on the results My question is on growth. Right? You had been mentioning earlier this year that you expected resale growth to remain solid. But this quarter, we saw a nice pickup on wholesale lending. So I wonder if you could explain a bit the drivers for that, if you expect this to continue? And then if you see some upside to the loan growth guidance? Thank you.

Gianfranco Piero Dario Ferrari de Las Casas: Morning, Renato. Thank you for your words. And regarding your question on wholesale growth, and please, after anyone can help me in that sense. But what we have been so let me go a step back. If you if you were to look our book in the last I do not know, 5 years, it is been basically flattish. And mostly in the corporate world or in the wholesale world. Because I would say that Peru has gone through the perfect storm over the last 5 years. COVID, then, I do not know, 6 presidents in 5 years or whatever. Lack of stability and so on. And therefore, investment in general, and this was across industries, really stalled.

We started to see and I believe we commented last call, private investment grew double digits. I believe it was 11% last year. And that has kept that pace has so private investment has been has kept its pace this quarter the last quarter, sorry. And what has happened on the other hand is that the domestic demand, as Alejandro mentioned, has been growing between 4% to 5% consistently over the last I believe, 6 quarters. So across industries, there are companies that are operating at full capacity. So that is the main reason for loan growth in the wholesale portfolio. that is perfect.

But if you also consider this positive economic background that you have been mentioning, do not you think that the 8.5% loan growth guidance for the year might be a bit too conservative? Could be, yes. But again, on the other hand you are right. On the other hand, the uncertainty that we mentioned at the beginning regarding global uncertainty, definitely, oil prices are going to peruse a net importer So oil prices could hit the economy and the uncertainty because of the elections. And we are going back basically to a somehow a binary scenario. Could bring some slowdown in that sense. We will have much more clarity after the second round. Thank you. Have a nice day.

Operator: The next question comes from Lindsey Shema with Goldman Sachs. Please go ahead.

Analyst: Hi, good morning. Congrats on the results. And thank you for taking my question. First on deposits, we saw a really favorable improvement in deposit mix which was partially attributed to deposits from the pension fund withdrawal. First off, how much would you attribute to pension fund withdrawal deposits? Know the last time we had talked, was running pretty strong and you would captured a good percentage of the liquidity into the system. And then also how sticky would you consider those deposits? Is it something that we can expect as kind of a tailwind going forward? And then I have a second question, but I will ask after that.

Gianfranco Piero Dario Ferrari de Las Casas: Sure. Thank you, Lindsey. Alejandro, can you take that 1?

Alejandro Perez-Reyes: Sure. Hi, So we did capture an important part of the withdrawal of the pension plan. But it is money that starts to get used and reduces over the following months. I would say that of the growth that we have seen in our deposit base around half of it has been related to the pension fund withdrawals The other half of it is our transactional capabilities and people operating and our principality and people operating in our system. An economy that is slowly but turning more and more or less cash driven. So the money remains in the accounts. I think there is a structural reason why we have been growing fairly on that type.

Plus there is also this pension fund withdrawal that we should see decrease during this year and probably basically disappear. And it is also related to the prior question, it is also part of some of the retail repayments that we have seen. People use that money to repay retail and have impact on the retail growth in the first quarter. But would say, and half between pension fund withdrawals and more structural reasons. Thank you, Alejandro.

Analyst: That was very clear. And then my second question is just on operating leverage and expenses at Yape. I mean, SaaS pretty solid increase in operating leverage. How much of that was kind of seasonality in expenses? How much is sustainable, especially with this new digital bank initiative? And then you mentioned that you could see some material impacts from that. Is that on the expense side? Is that on growth? Because you were talking about going into different markets, expanding on that end. Just kind of what are the impacts there? Thank you.

Gianfranco Piero Dario Ferrari de Las Casas: Francesca, can you take that 1 or Alejandro? Whoever?

Francesca Raffo Paine: Yes. So for sure, the tokenality is end of the year and also the election Yape has been very active in the branding positioning around the long term view for growth for the country. So that is 1 part of the seasonality. But you are spot on in terms or there is still a lot of technological capability investment being built in Yape around lending, distribution, around the internationalization of the platform. So we are very mindful of the expenses. So they are not exceeding our expectations in terms of what we are planning for growth for revenue and cost as well. So I would say under control, but yes, there is still investments to be done.

Gianfranco Piero Dario Ferrari de Las Casas: Yes. And maybe complementing that, Lindsey, how we see this as far as income grows at a faster pace than expenses, we are okay. We really believe that Yape in the 2, 3 years should be operating at a much lower cost to income which is what we care about. And we will have also an impact actually a double impact. So the cost to income will be lower, and Yape will be much more relevant business within Credicorp. Therefore, the positive impact in cost to income overall.

Analyst: Okay. Very clear. Thank you so much.

Operator: The next comes from Carlos Gomez-Lopez with HSBC. Please go ahead.

Analyst (Carlos Gomez-Lopez): Hello. Let me join in the congratulations to Alejandro. Be here for such a short time. We will miss you. But congratulations and congratulations in particular for the increase in the margin. You have been telling us it was going to go up. We said it would not, but it is not. So congratulations on that. That. My question would be, again, on the asset quality and the cost of risk which is lower this time. Could you please quantify what those recoveries in the corporate portfolio would be like? I mean, when I look at the numbers I guess your number is $121 billion euros lower than what we have expected. How much did you recover?

Is that €40 million, €50 million, €60 million? Could you quantify that amount? Thank you.

Gianfranco Piero Dario Ferrari de Las Casas: Yes. César, César, take it.

César Ríos: Carlos, thank you. In a usual month in BCP, have a cost of risk of wholesale between 0.1% and 0.2%. The last quarter of last year was unusually high at 0.5% and in this quarter was minus 0.1% So you can say between 20 and a maximum of 30 basis points impact as a difference. Between what is usual In relation to the last quarter, it is very significant. But last but the last quarter of last year was unusually high for the special cases that I previously described. Okay. So 20 or 30 basis points on the wholesale portfolio.

Analyst (Carlos Gomez-Lopez): Yes. And if I can ask a question on Yape and We understand that the Central Bank is bringing in UPI from India. Could you tell us what impact positive or negative, that might have on your business?

Gianfranco Piero Dario Ferrari de Las Casas: Francesca? Can you take that 1, please?

Francesca Raffo Paine: Yes, Definitely, there is there are 2 views or 2 dimensions around the UPI. So we do believe that there is still an opportunity to capture cash Still Peru is a cash based economy, so there is potential to grow in transactions. And having said that, course, there is going to be other players, new entrants in this payment ecosystem. But if you look at the update result, and Ape's plans over time of being a super app, and now a neobanks, we can do that. We have consistently been able to cross sell more products.

We are almost reaching 3 features per active users in Yape, different features not just payments, but, you know, whether it is utilities or lending. So it gives us an opportunity to tap into a bigger market. And this is the view we are having and we are participating aggressively with the regulator in the buyer. And the project could be another payment network? Or you would join the payment network or you would be connected No. How is it supposed to work? Yeah. We will definitely be connected. So this is a completely interoperable system. And we could have our own closed loop for our own transaction wherever we want.

We believe this is better, whether it is a UX experience or whether, of course, if it is a cost issue. But it makes the market bigger because it is becomes everything becomes interoperable. Very good.

Analyst (Carlos Gomez-Lopez): Thank you so much.

Operator: The next question comes from Andres Soto to with Santander. Please go ahead.

Analyst (Andres Soto): Good morning and thank you for the presentation. My question also is around Yape, but this time around in terms of the contribution to Credicorp. When I look at the contribution to revenue, it is already at 8% for the quarter. Contribution to EBT is up to 7%. So I have 3 separate questions around these numbers. The first 1 is previously, you have mentioned that you expected disruptive initiatives to represent 10% of Credicorp's revenue. Yape alone is already almost at that level. So what will be your new target for your disruptive initiatives in terms of the revenue contribution to the Credicorp? Good morning, Andre. Great question.

Gianfranco Piero Dario Ferrari de Las Casas: All yours, Francesca.

Francesca Raffo Paine: So initially, as we have shared many times with you in the Investor Day and the digital conversations we have been having We set our so far target 4 years ago to represent 10% of risk adjusted income for Credicorp. We are very happy, of course, as you mentioned that Yape is 1 of the big 1. And our initial expectation was, 1, once these initiatives got into specific growth, they would graduate into more mature businesses. In the case of Yape, what we are seeing is that it is still offering growth at a much faster pace than cellular than of businesses that are more incumbent.

So we are actually today working around what the new north metric of that would be. And as you know, we are going to set aggressive metrics in terms of the contribution of the initiatives. Having said that, we are also beginning to see relevant contributions. Of course, they are smaller around Kulki around other initiatives as Huarda, what we have mentioned before. And we are currently reviewing to set a new appetite for the next 4 years or 3 years. Thank you, Francesca.

Analyst (Andres Soto): And metric will be still around revenue because for Yape specifically, the number for contribution to profitability is almost the same for revenue. So in my numbers, I have that Yape could represent as much as 30% of the earnings of Credicorp by 2028? And do you see any reasons for that not to happen or in terms how you measure your digital appetite will be still revenue the relevant metric, or you will start looking at profitability?

Francesca Raffo Paine: So we are actually going to look at 2 things. 1 is the for disruptive initiatives. We think revenue is still the correct metric. And as you remember, we also set limits in terms of investments around ROE and around cost to income, which is something that we are constantly looking at and reviewing. But once we have a venture that is profit of course, we are going to set profitability indicators as well. And once we have this much clearer, we will share what initiatives actually contribute to the limits of whether it is ROE or cost to income or the amount of cash expenditures.

And once that needs still time to mature where revenue adjusted income is the right metric. So this is a work in progress, and we will have this here for the next 2 months or 3 months. Exactly.

Gianfranco Piero Dario Ferrari de Las Casas: Just to complement Francesca, Andre and I do not remember if I said goodbye the beginning. Goodbye. Good morning, Andre. We are in exactly in that process. When we said that, that goal 2 or 3 years ago, we there was a lot of uncertainty because these are disruptive initiatives. As we all know, Yape has been quite success. it is I would say, much more advanced in terms of results than what we originally expected. In terms of size of the results and timing of the results. And we are exactly in that process. Should we start measuring something and providing something different to the market And that is the process.

We hope that by next quarter, we will share that with you. Just a quick comment, we do expect this year that the overall disruptive initiatives ROE are going to be accretive to Credicorp's ROE. Perfect. And on that note, Gianfranco, to set a new targets, I think that the other new target that we need to hear from you is regarding the overall medium term target for Credicorp as a whole. You know, in my numbers, if Yape is bound to represent as I said, 30% of earnings, that will represent that will imply that Credicorp ROE by 2028 is going to be 25%. So the 19.5% is extremely, extremely conservative.

I am taking notes as to say goal for the team. No, jokes aside, remember last call that when we provided the guy when I actually, Alejandro provided the guidance, He said, which is all of us, that by next call, after the results of the elections, we depending on the results, we may provide what we call a sustainable ROE that might be north of 20. So let's wait. We are 3-4 months away from that and let's see what happens. And at the same time, we are working on what Francesca just mentioned. Mentioned. Sounds good. Looking forward to it. You, Gianfranco and Francesca, and congratulations to Alejandro on his new responsibilities. Thank you.

Operator: The next question comes from Yuri Fernandes with JP Morgan. Please go ahead.

Analyst (Yuri Fernandes): Hi, guys. Good morning. Hi, Gianfranco, Alejandro Cesar, Francesca, Milagros. Congrats, Ignacio. Also Alejandro. So repeating the words of everybody here. I am going to miss you, Alejandro. So on just a follow-up on trying match 2 different questions on the call. Margins and cost of risk for the guidance on risk adjusted, right? So what I understood from the call is cost of risk was low on wholesale and all the seasonality and you are growing, so cost of risk should move up. But you feel very comfortable with asset quality. But margins, the funding question, I think it is good, right? You have a very good funding. I think that helps.

And on the asset mix, this quarter another question was wholesale, You are growing more on wholesale after years of not growing. And now it is going to be coming from retail. So, the way I see here is upside risk for your margins. And correct me if you disagree. Cost of risk should also move up Thinking those things together, Gianfranco, do you believe like you can to have your risk adjusted NIM above the guidance as we are seeing here? Because again, asset quality has been good. Means could have an upside.

So just trying to understand if the guidance for risk adjusted margins would be a little bit better or at least stay on the high level that we are seeing this quarter. Thank you.

Gianfranco Piero Dario Ferrari de Las Casas: Good morning, Yuri. Yes, again, if there was not this uncertainty global uncertainty, and the political situation in Peru, maybe we would have provided a new guidance today. So I will be providing a strong yes to you. But there are 2 ifs too many ifs, we believe as we speak. So everything tells us that your question is totally valid and your hypothesis is correct. But we rather wait and see really. I am sorry for being so vague in my response, but that is what we feel today. No, it helps to understand the potential upside risk but you are somewhat being conservative given the uncertainties in the scenario. It helps us here.

Operator: I may just Go ahead.

Alejandro Perez-Reyes: Sorry. Go ahead. Sorry, this is Alejandro. I missed you too Yuri. So no, I just wanted to say that your, assumption is correct in the sense that given the low cost of risk we are experiencing and the strong means, we should be on the upper side of the risk adjusted NIM for the year. But again, as Gianfranco has mentioned, there are a lot of questions still out there. But we believe we can have risk adjusted NIM that continues to improve. The coming quarters. No. Thank you, Alejandro. If I may, just a second 1, quick 1.

Analyst (Yuri Fernandes): Just thinking about the profitability of the subsidiaries, right, when you go to Credit Corp Capital, Pacifico, Mibanco, well, BCP was amazing this quarter. All this subsidiaries they are running on levels of ROEs that historically, I believe, is the numbers that you usually mention. Think maybe Pacific is a little bit below the 20s, but very close to that. Maybe to Gianfranco, where do you see upside risk other than EAP on the subsidiaries? Do you think like there is room for further improvements on profitability of any of the subsidiaries? Or most of your take here is maybe being main driver for further profitability improvement for the group?

Gianfranco Piero Dario Ferrari de Las Casas: Yes. Great question, Yuri. And specifically on Pacifico, what we believe and we have been vocal about it is that Pacific over the last few couple of years its ROE has been over, I believe, 25 believe that is not sustainable. What we believe it is sustainable. it is around 20%, which is where it is today. About the other subsidiaries, Mibanco is where we want to have it in terms of ROE. Maybe at Credicorp Capital, there is a potential opportunity to increase to slightly increase ROE even though we do have opportunities for growth there. So we might be investing a little bit more.

And you are right, Yap and Yape is going to be a driver for sure. But also bear in mind, as I just mentioned, that the overall disruptive initiatives are being accretive. And YAPI is the most obvious ones, obvious ones, but there are others that they are either positive already or less negative and reaching breakeven. So overall, the there might be a further positive impact going forward. No. Thank you very much, Gianfranco, and congrats on the execution in all those years. Thank you. Thank you. Thank you.

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

Gianfranco Piero Dario Ferrari de Las Casas: Thank you. Let me close by putting things in perspective and reflecting on the strengths of our franchise. Credicorp has been around for over 30 years, And through BCP, we have more than 135 and 35 years of experience navigating complex and often volatile environments. Over that time, we have played a key role in supporting Peru's development consistently working to expand access to financial services, and advance the progress of individuals, businesses and communities. This commitment is deeply connected to our mission of improving life through financial inclusion, and it is what has allowed us to build a resilient institution with a truly long term perspective. Looking ahead, we continue to see compelling opportunities in the region.

The external backdrop remains favorable. With what could evolve into a new commodity super cycle. And countries such as Peru and Chile, particularly well positioned to benefit. Peru, in particular, is entering this period with healthy domestic demand, low inflation and a financial system that remains solid and liquid. These conditions create an important opportunity to accelerate investment. Employment and productivity over the coming years. Credicorp is uniquely positioned to capture that opportunity. This quarter is another clear reflection of that position. With record high results that demonstrate both the consistency and strength of our franchise. At the same time, we have increasing clarity around our strategic priorities and are seeing tangible progress across our key growth anchors.

Reinforcing our confidence in our ability to sustain performance over the medium term while continuing to support our clients and the broader economy. Before closing, I would like to briefly step back from the short term political debate. While the leading candidates presidential candidates represent different visions for the country's economic future, we believe Peru's institutional framework and system of checks and balances continue to provide important safeguards for stability and policy continuity. What matters most now is preserving the conditions that allow the country to move forward. While continuing to advance key social priorities such as education, healthcare, infrastructure, and poverty reduction. Peru, has a unique opportunity to achieve a more profound and lasting transformation.

And it cannot afford to lose that momentum. You for your time today, and we look forward to speaking with you again next quarter.

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

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