Credicorp Ltd. Q3 FY2025 earnings call

• Strategy anchored in 3 key pillars: accelerating digital ecosystem scalability/monetization, unlocking growth via business synergies, executing with discipline for profitability. • Reaffirmed medium-term targets of 19.5% ROE and ~42% efficiency ratio. • Discussed recent political developments in Peru and macro conditions across operating markets. • Third quarter had robust performance across core businesses, driving an ROE of 19.6%. • Credit activity dynamics improved, loan growth accelerated, margins supported by better asset quality and funding base. • Innovation portfolio contribution on track to target.

Universal Banking and Insurance & Pensions delivered very strong results. Microfinance continued progressing steadily towards its medium-term profitability target. The innovation portfolio contributed 7.4% of risk-adjusted revenue, on track to reach the 10% target by 2026. In credit activity, FX-neutral loan growth accelerated to 7% year-over-year. Deposit side saw demand and savings accounts share rise to 39.5%. Asset quality trended favorably. Efficiency ratio was 46.4%. BCP maintained an ROE of 25.6%, with loans growing in FX-neutral terms. Yape had 15.5 million monthly active users, aiming to expand to 18 million by 2028, with revenue from payments, lending, and e-commerce. Mibanco's profitability rose, loans grew, NPL ratio fell, and NIM picked up. Grupo Pacifico's insurance underwriting results were strong. Investment Management and Advisory business had an ROE of 17.4%.

• Maintained GDP growth guidance at 3.4% for 2025. • Expect loan book to grow ~6.5% year-over-year in end-of-period balances. • NIM expected to be within guidance range. • Cost of risk anticipated to close at lower end of guidance. • Efficiency ratio expected to be within guidance. • Fee income and insurance underwriting results expected to grow in low double digits. • Full year ROE guidance maintained at around 19%.

• Local political uncertainties in markets where Credicorp operates, such as potential impacts of elections. • Macroeconomic fluctuations, including varying policy rates in different countries and economic growth disparities.

Q: My question will be related to asset quality. So NPLs and cost of risk are behaving much better than expected this year, is well below your guidance provided. You mentioned you're expecting cost of risk to be at the low end of the guidance. It should be around 2%. So my question is if it's not too conservative, this guidance, because cost of risk will have to be above 2% in the last quarter, so I just wanted to hear your thoughts on that. Looking to 2026 that probably you will accelerate the growth into high-yield segment, how should we think about the cost of risk? Should we start about 2% or similar guidance that you have provided this year?

A: César Ríos: The results are better than initially expected, combination of better risk management and dynamic economic backdrop. Cost of risk expected to be at lower end, around 1.8%. Next year, shift in portfolio composition with gradually increasing cost of risk for higher margin segments but balanced by improving quality of traditional portfolios.

Q: I have a question related to growth, right, because your long-term guidance of ROE is 19.5%, and as you mentioned, you were ramping up. The economy is going well. Just wanted to see what should we think about the first quarter of the year given the political uncertainty. We have elections in April. So just wondering if we might see some deceleration in the first quarter as mostly corporates tend to be a bit more cautious, and as you mentioned, there are some impacts from withdrawals probably carrying into January, February. So if you think maybe we could see ROE levels similar to this year, which obviously are very positive or do you think we are, I would say, converging into this 19.5% long term in a sooner way? And then I'll ask my second question.

A: Gianfranco Piero Ferrari de Las Casas: Previous election quarters had slowdown in first quarter, but current economic indicators are strong. Next year's first quarter not expected to be as low as previous elections. ROE guidance for upcoming years to be provided in next call. Alejandro Perez-Reyes: Economy entering year with positive situation, election-related effects but private investment and consumption strong, expect next year to be strong for growth.

Q: I have one regarding Bolivia. I know this year has been volatile on FX, the impairments, like the readjustments, right, on the portfolio deposits, but now there was an important political shift in Bolivia. I know this is small for your entire operation, but this quarter, it was already better. So if you can comment on what you expect for Bolivia if the elections -- like the new President should have any tailwind for you going forward, like any security gains you may have. Just trying to understand if Bolivia from headwind in the past years may become a tailwind for you here.

A: Gianfranco Piero Ferrari de Las Casas: Initial indicators of new Bolivian government are positive, executive cabinet pro-market and professional. BCP Bolivia has option value, positive on potential outcomes though much to be done on political, economic, and social matters.