Credicorp’s Record Dividend Signals Confidence Amid Growth Surge

Credicorp (BAP), Peru’s leading financial services holding company, has declared a record dividend of S/40.00 per share (approximately $10.85 USD based on recent exchange rates), marking a significant increase from its S/35.00 dividend in 2024. The payout, payable on June 13, 2025, to shareholders of record as of May 19, underscores the company’s robust financial performance and its commitment to rewarding investors. This move comes amid a backdrop of strong earnings growth and a strategic expansion into regional markets.

A Dividend to Remember

The S/40 dividend represents a 14% increase from the previous year’s S/35 payout and aligns with Credicorp’s record 2024 net income of S/5.50 billion (approximately $1.45 billion USD). This is the highest dividend in the company’s history, surpassing the $9.29 USD equivalent paid in 2024. The dividend will be converted to USD using the weighted exchange rate set by Peru’s Superintendency of Banks (SBS) on June 11, 2025, ensuring transparency and consistency with past practices.

Financial Health and Earnings Momentum

The dividend decision is backed by strong earnings per share (EPS) growth. In 2024, Credicorp reported an annual EPS of $18.39, a 12.59% increase from 2023’s $16.33. This growth reflects the company’s diversified business model, spanning Universal Banking (via Banco de Crédito del Perú), Microfinance (Mibanco), Insurance and Pensions (Grupo Pacifico), and Investment Management (Credicorp Capital).

While quarterly EPS figures showed some volatility—such as a 20.42% jump in Q3 2024 compared to the prior year—the trailing twelve-month (TTM) EPS as of September 2024 was $17.43, slightly below the prior-year period but still indicative of long-term stability. CEO Gianfranco Ferrari emphasized that the dividend reflects “record results” and the resilience of Credicorp’s cross-cycle earnings.

A Competitive Dividend Yield

With a dividend yield of 6.25%, Credicorp currently outperforms global peers like JPMorgan (2.35%) and aligns closely with Chinese state banks such as China Construction Bank (6.29%). This yield, combined with a market capitalization of $14.7 billion, positions Credicorp as an attractive income play in an otherwise low-yield environment.

Stock Performance and Valuation

Despite a dip in its stock price from $164.02 in 2020 to $149.93 in 2024, Credicorp’s valuation metrics remain compelling. Its P/E ratio of 8.94x is lower than JPMorgan’s 13.09x but above the industry average, while its Price-to-Book (P/B) ratio of 1.53x reflects a balance between growth and value. Analysts project the stock to rise to $196.05 by 2026, driven by expected EPS growth to $25.14 by 2027.

Risks and Considerations

Investors should note Credicorp’s exposure to regional economic conditions, particularly in Peru, where inflation and political uncertainty could impact profitability. Additionally, currency fluctuations—since dividends are converted from Soles to USD—introduce volatility. The company’s heavy reliance on its banking segment (which accounts for over 60% of revenue) also poses sector-specific risks.

Conclusion: A Dividend-Powered Growth Story

Credicorp’s record dividend declaration is a testament to its financial strength and disciplined capital allocation. With a dividend yield above 6%, a track record of double-digit EPS growth, and a strategic focus on high-growth markets like Chile and Colombia, the company appears well-positioned to sustain its dividend trajectory.

The S/40 payout not only rewards shareholders but also signals confidence in Credicorp’s ability to navigate challenges and capitalize on opportunities in Latin America. For income-oriented investors, this dividend—paired with a reasonable valuation and growth prospects—makes BAP a compelling long-term holding. As CEO Ferrari noted, this dividend is not just a reward for the past but an investment in the future, backed by a business model that has proven its resilience over decades.

In a world where reliable dividends are scarce, Credicorp’s record payout stands out as a rare blend of income, growth, and stability.