Why did IFS miss earnings forecasts in Q4 2023?

Intercorp Financial Services Inc. (IFS) did not miss earnings forecasts in Q4 2023. In fact, IFS surpassed earnings expectations with a reported EPS of $1.14 for the quarter, higher than the anticipated $0.94. This achievement can be attributed to strategic initiatives and strong financial performance across key segments.

1. **Digital Transformation and Cost Management**: IFS's digital transformation efforts have been successful, with over 80% of retail banking customers now using digital channels. This shift has improved operational efficiency and reduced costs, contributing to the better-than-expected earnings.
2. **Strong Net Income Growth**: The company reported a significant improvement in net income, which doubled from the previous quarter to PEN286 million. This growth is a result of strategic focus on core banking operations and effective risk management.
3. **Effective Risk Management**: IFS's cost of risk decreased by 70 basis points quarter-over-quarter, indicating better risk management practices. This has led to a downward trend in risk indicators, which has positively impacted the bottom line.

In summary, IFS's performance in Q4 2023 exceeded expectations due to digital transformation, cost management, strong net income growth, and effective risk management. These factors collectively contributed to the company's robust financial performance despite market challenges.