Intercorp Financial Services: Better Cost of Risk Outperforms Insurance Impairment, Justifying a Buy Case

Intercorp Financial Services (IFS) has emerged as a standout performer in the Peruvian financial sector, demonstrating resilience amid non-core headwinds and delivering robust profitability. Despite a one-off impairment from its Rutas de Lima investment, the company's core return on equity (ROE) remains strong, underpinned by disciplined risk management, digital innovation, and double-digit growth across key segments. For investors, this positions IFS as a compelling buy, with its fundamentals insulated from short-term noise.

, according to quarterly data. as reported, this highlights the company's ability to generate strong returns from its core operations. based on Q3 results. These metrics align with a long-term ROE trajectory that outperforms regional peers, making the impairment a temporary drag rather than a structural concern.

Segment Strength: Banking, Insurance, and Wealth Management Lead Growth

IFS's diversified business model is a key driver of its resilience. The banking segment delivered improved net interest margins and a lower cost of risk in Q3 2025, while insurance and wealth management segments posted double-digit growth in core businesses as per Q3 results. This cross-segment momentum reflects IFS's ability to capitalize on digital innovation-such as AI-driven customer insights and streamlined service delivery-to enhance client retention and expand market share. For instance, the company's focus on digital-first strategies has reduced operational costs and accelerated product adoption, particularly in wealth management according to financial reports.

Rutas de Lima Impairment: A One-Off, Not a Trend

The Rutas de Lima impairment, though notable, is a non-core issue with minimal long-term impact. While the exact impairment amount remains undisclosed in Q3 reports according to press releases, , indicating that the impairment's effect is largely confined to the third quarter as reported by financial analysts. according to financial data further illustrates its financial flexibility. The company has also emphasized its commitment to sustainable growth, prioritizing investments in high-margin digital services over risky infrastructure projects as stated in Q3 earnings.

Buy Case: Disciplined Execution in a Volatile Environment

IFS's strategic focus on risk mitigation and digital transformation creates a durable competitive advantage. The reduction in provisions and improved cost of risk demonstrate a proactive approach to navigating macroeconomic uncertainties as reported in Q3 results. Meanwhile, its double-digit growth in high-margin segments like insurance and wealth management provides a buffer against sector-specific volatility. For investors, the current valuation appears undervalued relative to IFS's long-term ROE potential and its track record of navigating challenges-such as the Rutas de Lima impairment-without compromising core profitability.

Conclusion

Intercorp Financial Services exemplifies how disciplined risk management and digital innovation can drive outperformance even in the face of non-core headwinds. , resilient segment growth, and a clear focus on sustainable value creation, IFS offers a compelling buy case. The Rutas de Lima impairment, while a short-term drag, does not detract from the company's long-term fundamentals. For investors seeking exposure to a high-conviction, well-managed financial services firm, IFS represents an opportunity to capitalize on its momentum.