Credicorp Ups ROE on Digital Gains

Credicorp(NYSE:BAP) reported Q2 2025 results on August 14, 2025, delivering a 20.7% return on equity (ROE) and raising full-year ROE guidance to approximately 19%. The quarter featured robust digital revenue growth, accelerating retail loan origination, and strong capital positions, while a one-time PEN 1.6 billion tax payment temporarily constrained extraordinary dividends.

ROE guidance rises as Credicorp targets higher-yielding loans

Management increased its loan growth forecast to 6.5% year over year (end-of-period), driven by retail and microfinance expansion at Banco de Crédito del Perú (BCP) and Mibanco. Risk-adjusted net interest margin (NIM) reached a record 5.44% for the quarter, reflecting improved asset quality and a favorable funding mix.

"We are increasing our full-year ROE guidance to around 19%. This new guidance already includes extraordinary gains from the Valmedica transaction which we estimate will have an impact of 50 basis points by year-end. This revision reflects both solid core performance and sustained discipline on the risk front. Global uncertainties remain, believe that fundamentals are in place to support this higher level of profitability. Finally, as Gianfranco mentioned, we are revising our long-term sustainable ROE range upwards, from 18% to around 19.5%. This adjustment is primarily driven by strong expectations of loan growth dynamics particularly through the penetration of new higher-yielding segments which leads to a more favorable loan mix evolution and an improvement in risk-adjusted NIM."
-- Milagros Cigüeñas, IRO

This upward revision in sustainable ROE and efficiency targets signals Credicorp’s confidence in balancing accelerated retail risk-taking, digital investment, and disciplined cost management to drive higher long-term returns.

Yape drives digital revenue surge for Credicorp

Yape, the company’s digital wallet, ended the quarter with 15 million monthly active users, representing 75% of Peru’s economically active population. Lending through Yape now serves 3 million users and accounts for 18% of Yape’s revenue, while the platform contributed 5.5% of Credicorp’s risk-adjusted revenue for the quarter.

"With platforms like Yape and promising ones like Tempo, our soon-to-be digital bank, we're scaling high-impact services that grow revenues and deepen relationships, transaction by transaction, not just loan by loan. As part of our long-term vision, we're building the next-generation capabilities to future-proof our businesses and redefine value creation for clients, employees, and shareholders. This includes advancing digital onboarding, behavioral scoring, embedded finance, and ecosystem-based distribution."
-- Gianfranco Ferrari, CEO

Credicorp’s digital strategy is creating new high-frequency fee streams, reducing customer acquisition costs, and establishing a scalable digital banking ecosystem that advances financial inclusion in Peru.

Risk and capital management support Credicorp’s margins

The non-performing loan (NPL) ratio declined to 5% group-wide, aided by tightened origination at Mibanco and BCP, while the cost of risk was 1.6%—below initial expectations. Net interest income (NII) increased 4.2% year over year, and the NPL coverage ratio rose to 109.5% as provisions declined.

"Asset quality has improved materially year over year. NPLs contracted across the board and Credicorp's NPL ratio stood at 5% this quarter. The cost of risk fell to a low of 1.6% on the back of fortified risk management and supported by improvements in payment performance in the Peruvian economy. Net interest income increased 4.2%, spurred by a contraction in interest expenses after interest rates fell and low-cost deposit expanded, accounting for 57.2% of the funding base."
-- Alejandro Perez-Reyes, CFO

Maintaining low risk costs while shifting credit toward higher-yielding retail segments demonstrates operational discipline and positions Credicorp to benefit from macroeconomic recovery without sacrificing credit quality or profitability.

Looking ahead

Management expects loan growth of approximately 6.5% year over year (end-of-period) and full-year ROE of around 19%, including 50 basis points from extraordinary income. Fee income is projected to grow at a low double-digit rate, and insurance underwriting results should remain stable year over year. The company will not issue extraordinary dividends in 2025 due to the PEN 1.6 billion tax payment, but ordinary dividend policy remains unchanged.

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