Credicorp (BAP) 8 Nov 24 2024 Q3 Earnings call transcript

In the third quarter of 2024, Credicorp Limited, a leading financial services provider in Latin America, reported a record-breaking bottom line of PEN 1,923 million, a testament to the company's resilience and strategic initiatives. The company's performance was driven by an improving macroeconomic climate, equity inflows from pension withdrawals, and a relatively stable political environment.

Strategic Initiatives and Operational Excellence

Credicorp's CEO, Gianfranco Ferrari, highlighted the company's strategic initiatives, including the diversification of revenue streams and the focus on innovation, which have been instrumental in decoupling the company's performance from external macroeconomic factors. The company's prudent approach to managing retail loan growth and reducing non-performing loans (NPLs) is also noteworthy, indicating a strong focus on risk management and financial stability.

Macroeconomic Outlook and Strategic Expansion

The positive macroeconomic environment in Peru, marked by a GDP growth projection of 3% for 2024 and 2.8% for 2025, bodes well for Credicorp's future growth prospects. The company's strategic expansion into Chile, with the creation of a new banking entity named Tenpo Bank Chile, is a significant milestone that underscores Credicorp's ambition to strengthen its presence in the region and revolutionize the financial ecosystem.

Financial Performance and Outlook

Credicorp's strong financial performance is reflected in its robust ROE of 18.5% for the third quarter, driven by Universal Banking and insurance. The company's risk-adjusted NIM improved, underscoring its disciplined interest rate management strategy and lower provisions. Despite challenges such as geopolitical tensions in the Middle East and ongoing developments in the U.S. elections, Credicorp remains optimistic about its future prospects.

Dividend Payout and Future Growth

Credicorp's distribution of a special dividend of PEN 11 per share, amounting to a total dividend payout of 75.3%, underscores the company's commitment to shareholder value. Looking ahead, Credicorp is focused on maintaining its GDP growth expectations of 3% for 2024 and 2025, while exploring untapped business segments and accelerating the adoption of transformative technologies.

Key Takeaways

Credicorp Limited's third quarter earnings call presented a positive outlook for the company, characterized by strong financial performance, strategic initiatives, and a focus on innovation and financial inclusion. The company's strategic expansion into Chile and its commitment to enhancing financial security for retirees through pension system reform are significant steps towards strengthening its position in the market. Despite challenges, Credicorp's robust performance and strategic moves position it well for future growth and success in the evolving financial services landscape.