Gentera (GENTERA) Q2 2024 earnings summary

Executive summary

• Served 5.39 million clients in 2Q24, with credit clients up 16.8% YoY and total loan portfolio at MXN 68.8 billion, up 19.3% YoY, driven by Mexican subsidiaries.

• Net income for 1H24 was MXN 2.8 billion, up 13.4% YoY, marking the best semester ever.

• EPS for 2Q24 was MXN 0.75; controlling company net income for 2Q24 was MXN 1,185 million.

• Over 64 million insurance policies placed in 1H24, more than 2.5x YoY, expanding social impact.

• Digital transformation and ESG initiatives are progressing, enhancing efficiency and customer experience.

Financial highlights

• Interest income in 2Q24 rose 24% YoY to MXN 9.6 billion; net interest income after provisions increased 8.1% to MXN 5.51 billion.

• Provisions for loan losses surged 59.7% YoY in 2Q24, reflecting portfolio growth and higher credit risk.

• Operating expenses for 1H24 were MXN 9.2 billion, up 13% YoY, mainly due to sales force expansion and infrastructure upgrades.

• Net fees grew 70% YoY to MXN 1.01 billion in Q2, driven by insurance products.

• EPS for Q2 was MXN 0.75, a 10.6% increase YoY.

Outlook and guidance

• Confident in meeting full-year guidance for portfolio growth (18–20%) and ROE (>20%).

• Double-digit portfolio growth expected for 2025, supported by a large, underserved market and weakened competition.

• Cost of risk expected to normalize to 11.5–12% in 2025 after a temporary increase due to Peru.

• Long-term ROE target set at 23% by 2027, with potential to share profitability gains with clients.

• Management expects to reach a new all-time high in net income by year-end 2024.