Credicorp Ltd (BAP)

Credicorp Ltd. is a holding company that, through its subsidiaries, provides a wide range of financial services, including universal banking, microfinance, insurance and pension funds, and investment management and advisory services, primarily in Peru, but also in Bolivia, Colombia, Chile, and other countries. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation.

In Universal Banking, Credicorp's main competitors in Peru include Banco BBVA Peru, Banco de la Nacion, Banco Santander Peru, Banco Interbank, Banco Pichincha, Scotiabank Peru, and Banco GNB. In Microfinance, competitors include Compartamos Financiera, Caja Arequipa, Caja Piura, Caja Huancayo, Caja Cusco, Caja Sullana, Caja Trujillo, Caja Ica, Caja Maynas, Caja Tacna, Caja Del Santa, Caja Paita, Caja Los Andes, Caja Rural de Ahorro y Credito, Financiera Confianza, Financiera Credinka, Financiera Efectiva, Financiera ProEmpresa, Financiera Oh!, and Financiera Qapaq. In Insurance & Pensions, competitors include Rimac Seguros, Mapfre Peru, Interseguro, La Positiva, and Protecta. In Investment Management and Advisory, competitors include Credibolsa, Kallpa Securities, Seminario & Cia, Inteligo, and Diviso Bolsa.

Credicorp generates revenue through a diversified business model encompassing net interest income from its banking and microfinance operations, insurance premiums and pension fund management fees, and fees from investment management and advisory services. The company serves a broad range of customer segments, from individuals and small businesses to large corporations, and operates through a multi-channel platform that includes physical branches, digital banking, and mobile applications.

The Universal Banking segment, primarily through Banco de Credito del Peru (BCP), offers a full range of banking products and services, including loans, deposits, and credit cards, to retail, small business, and corporate clients. The Microfinance segment, primarily through Mibanco, focuses on providing financial services to micro-entrepreneurs and small businesses in Peru and Colombia. The Insurance & Pensions segment, through Pacifico Seguros and Prima AFP, offers life and property/casualty insurance products and manages private pension fund accounts. The Investment Management and Advisory segment provides asset management, brokerage, and investment banking services through Credicorp Capital and other subsidiaries.

During the period, Credicorp completed the acquisition of Pacifico EPS, an entidad prestadora de salud (health services provider), for a total consideration of S/ 1,000 million ¹. The company also issued subordinated bonds, including 6.45% Subordinated Fixed-to-Fixed Rate Notes for US$ 500 million ² and 5.65% Subordinated Fixed-to-Fixed Rate Notes for US$ 750 million ³. Additionally, Credicorp repurchased 347,064 ⁴ common shares for US$ 60.0 million ⁵ under its share repurchase program.

For the fiscal year ended December 31, 2025, Credicorp reported total revenues of S/ 23,486 million ⁶, compared to S/ 21,088 million ⁷ in the prior year. Net income attributable to equity holders of the parent was S/ 4,556 million ⁸, up from S/ 4,074 million ⁹ in 2024. Diluted earnings per share were S/ 48.27 ¹⁰, compared to S/ 42.78 ¹¹ in the prior year.

A key growth vector is the expansion of digital financial services, particularly through Yape, a mobile payment platform. Yape had 16.0 million ¹² active users as of December 31, 2025, and processed transactions totaling S/ 107,000 million ¹³ during the year. The company is also focused on growing its microfinance operations in Colombia through Mibanco Colombia, which had a gross loan portfolio of S/ 1,750 million ¹⁴ as of December 31, 2025.

Another growth vector is the expansion of the insurance and pension business. Pacifico Seguros is focused on growing its market share in the property and casualty insurance market, while Prima AFP manages pension fund assets under management (AUM) of S/ 56,000 million ¹⁵ as of December 31, 2025.

The filing discusses the evolution of the cost structure but does not provide specific margin or cost targets for the upcoming period.

The filing discusses technology investments but does not provide specific capital expenditure targets or headcount strategy for the upcoming period.

The filing does not provide specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy figures for the upcoming period.

A significant headwind is the macroeconomic and political environment in Peru, which could impact economic growth and credit demand. The filing notes that the Peruvian economy is sensitive to global commodity prices and political instability.

Another constraint is the regulatory environment, particularly in the insurance and pension sectors, where changes in regulations could affect profitability. The filing also notes that the company is subject to foreign exchange risk, as a portion of its assets and liabilities are denominated in U.S. dollars and other foreign currencies.

Management's message emphasizes the company's strong financial performance in 2025, driven by growth across all business segments. The strategic priorities for the period ahead include deepening digital transformation, particularly through the Yape platform, expanding the microfinance business in Colombia, and integrating the recently acquired Pacifico EPS to create a more comprehensive healthcare offering. Management also highlights the importance of maintaining a strong capital position and managing risks effectively.

Total revenues for the fiscal year ended December 31, 2025, were S/ 23,486 million ²⁰, compared to S/ 21,088 million ²¹ in 2024. Net income attributable to equity holders of the parent was S/ 4,556 million ²² in 2025, compared to S/ 4,074 million ²³ in 2024. Diluted earnings per share were S/ 48.27 ²⁴ in 2025, compared to S/ 42.78 ²⁵ in 2024. Operating income was S/ 6,643 million ²⁶ in 2025, compared to S/ 5,892 million ²⁷ in 2024. The return on average equity (ROE) was 17.3% ²⁸ in 2025, compared to 16.8% ²⁹ in 2024. Cash and cash equivalents were S/ 27,000 million ³⁰ as of December 31, 2025, compared to S/ 24,000 million ³¹ as of December 31, 2024. Total assets were S/ 280,000 million ³² as of December 31, 2025, compared to S/ 260,000 million ³³ as of December 31, 2024. The Universal Banking segment reported net income of S/ 3,500 million ³⁴ in 2025. The Microfinance segment reported net income of S/ 400 million ³⁵ in 2025. The Insurance & Pensions segment reported net income of S/ 700 million ³⁶ in 2025. The Investment Management and Advisory segment reported net income of S/ 100 million ³⁷ in 2025.

A material risk is the company's exposure to the Peruvian economy, which is subject to political instability, social unrest, and fluctuations in commodity prices, all of which could adversely affect credit quality and demand for financial services. The company also faces significant credit risk, with a gross loan portfolio of S/ 180,000 million ¹⁶ as of December 31, 2025, and non-performing loans (NPLs) of S/ 4,500 million ¹⁷, representing an NPL ratio of 2.5% ¹⁸. Another key risk is foreign exchange risk, as a portion of the loan portfolio and funding is denominated in U.S. dollars; a 10% devaluation of the Peruvian sol against the U.S. dollar would result in a loss of S/ 200 million ¹⁹ in net income. The company is also exposed to regulatory risk, particularly in the insurance and pension sectors, where changes in regulations could impact profitability and capital requirements.