Credicorp (BAP) Q4 2023 earnings summary

Executive summary

• FY23 net income rose 4.7% to S/4,865.5 million with ROE of 15.8%; 4Q23 net income was S/841.8 million, down 16.7% YoY, amid higher credit costs and El Niño provisions.

• Performance was supported by diversified earnings and disciplined risk management; FY23 efficiency improved to 46.1%, while management targets sustainable mid-term ROE of 18%.

Financial highlights

• FY23 net interest income rose 16.6%; 4Q23 NII increased 2.9% QoQ to S/3,347.7 million. Core income grew 11.4% to S/17,629 million.

• FY23 operating income increased 13.2%, outpacing operating expense growth of 9.8%; excluding disruption expenses, expense growth was 5.6%.

• 4Q23 NIM was 6.21%, up 10 bps QoQ; low-cost deposits were 54.5% of funding and structural loans grew 0.4% QoQ.

• FY23 insurance underwriting result increased 43.9%; 4Q23 fell 13.2% QoQ but rose 110.0% YoY.

Outlook and guidance

• FY24 guidance: GDP growth ~2.5%, structural loan growth 3.0%–5.0%, NIM 6.0%–6.4%, cost of risk 2.0%–2.5%, efficiency ratio 46.0%–48.0% and ROE ~17%.

• Management expects gradual recovery as El Niño risk declines, rates fall and economic activity improves; sustainable mid-term ROE target remains 18%.

• Yape is on track for cash-flow breakeven in 2024; 2023 revenue per monthly active user rose 34.5% QoQ.