Peru’s Credicorp posts above-expected profit on banking, insurance boost

MEXICO CITY, Aug 10 (Reuters) – Credicorp, one of Peru’s biggest financial holding companies, posted a 22.6% year-on-year rise in its second-quarter net profit on Thursday, pushed up by its banking and insurance divisions, beating analysts’ forecasts.

The South American lender, which offers universal banking, microfinance, insurance, pensions and investment banking services, recorded a net profit of 1.4 billion soles ($383 million)

Refinitiv analysts had forecast it at 1.3 billion soles.

The company’s return on equity (ROE) landed at 18.6% for the quarter, up over a percentage point from the same period last year.

Structural loans were also up 5.5% year-on-year, and net interest income rose 21.5%; fueled by higher benchmark interest rates.

Nonetheless, the financial group said its strong results came despite difficult macro conditions.

“The first half of the year was tougher than expected due to social and climate events which led GDP to stagnate in the first half of 2023,” Chief Executive Gianfranco Ferrari said in a statement.

Indeed, the company saw a 3.5% rise in non-performing loans in the period.

Peru’s economy, one of the region’s fastest growing, has suffered from waves of protests that began after the ouster of former President Pedro Castillo late last year.

Looking forward, the company said it was “closely monitoring” the potential impact of the El Nino weather phenomenon, which the country’s central bank has also warned is an area of potential economic risk.

Still, the company maintained its 2023 guidance on ROE, at around 17.5%. Net interest margin expectations also remained unchanged.

Credicorp’s digital wallet app Yape is also set to reach break-even at some point in 2024, it said. ($1 = 3.6503 soles) (Reporting by Valentine Hilaire and Isabel Woodford; Editing by Sarah Morland and Stephen Coates)

Image by: Credicorp

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