Credicorp's Q2 Results and Tax Resolution Bolster Investment Narrative

Credicorp Ltd. reported strong Q2 and H1 2025 financial results, updated earnings guidance, and canceled a S/1.6 billion tax assessment. The bank now expects a more favorable risk profile and lower provisioning. The tax resolution removes a significant overhang, but regulatory risks in Peru remain a concern. Management's revised earnings guidance and positive credit quality support the narrative that Credicorp's investments in risk management and digital expansion are positively impacting results. The company projects PEN26.6 billion revenue and PEN7.9 billion earnings by 2028, with a fair value of $243.83, a 3% downside to its current price.

Credicorp Ltd. has reported robust financial results for the second quarter and the first half of 2025, along with updated earnings guidance and the cancellation of a significant tax assessment. The bank's performance is a reflection of its investments in risk management and digital expansion, which are positively impacting its results.

In Q2 2025, Credicorp reported a return on equity (ROE) of 20.7%, a record risk-adjusted net interest margin (NIM) of 5.4%, and an efficiency ratio of 44.2%. The bank's loan growth was 2.6% for the quarter, excluding currency effects, while the non-performing loan (NPL) ratio stood at 5%. The cost of risk was 1.6%, and net interest income increased by 4.2% year-over-year. Fee income also grew by 8.2% year-over-year, while insurance underwriting results surged by 11.2%.

The bank's Yape platform, which offers digital financial services, has nearly 15 million monthly active users, contributing 5.5% to its revenue.

The cancellation of a S/1.6 billion tax assessment is a significant development, removing a substantial overhang and improving the bank's risk profile. However, regulatory risks in Peru remain a concern.

Credicorp's revised earnings guidance for 2025 projects PEN26.6 billion in revenue and PEN7.9 billion in earnings. The fair value of the bank's shares is estimated to be $243.83, a 3% downside from its current price.

The bank's strong performance indicates that its strategic initiatives are paying off, and investors can expect continued growth and stability in the coming years. However, the regulatory environment in Peru will require close monitoring.

[1] https://finance.yahoo.com/news/credicorp-ltd-bap-q2-2025-070450850.html