Credicorp's Q1 2025: Navigating Contradictions in Macroeconomic Confidence, Loan Growth, and Risk Assessment

Peru's macroeconomic confidence, loan growth expectations, cost of risk and loan growth expectations, Yape's growth strategy and impact on revenue, and Mibanco's portfolio risk assessment and performance are the key contradictions discussed in Credicorp's latest 2025Q1 earnings call.



Macroeconomic Performance and Credicorp's Positioning:
- Peru reported 3.9% GDP growth in the first quarter, driven by private spending, lower inflation, and record-high terms of trade.
- Credicorp's confidence in Peru's macroeconomic fundamentals is supported by the economy's resilience despite political uncertainty.

Business Growth and Strategic Investments:
- The company experienced resumed loan growth, particularly in wholesale banking and individuals, with risk-adjusted NIM improving year-over-year.
- This growth is attributed to intentional strategic investments in modernized core systems, expanded digital capabilities, and redesigned client journeys across various business segments.

Sustainability and ESG Initiatives:
- Credicorp is integrating sustainability into its strategy, focusing on initiatives like inclusive finance, financial education, and green loans.
- These initiatives align with long-term value creation and are outlined in the company's updated sustainability framework from 2025 to 2030.

Strong Financial Performance and Dividend Increase:
- Credicorp reported a high ROE of 20.3%, boosted by extraordinary gains from the acquisition of a joint venture stake, with operational performance strong across universal banking and insurance.
- The company's strong solvency enabled a dividend increase to $40 per share, while supporting long-term growth plans.

Risk Management and Digital Transformation:
- Proactive measures since 2023, such as tightening origination standards and enhancing risk management capabilities, have improved asset quality and facilitated digital transformation.
- The company expects its risk transformation project to deliver more material impact starting in 2026, contributing to scalable growth and client-centric operations.