Intercorp Financial Services (IFS) Q1 2025 earnings summary

Executive summary

• Net income for 1Q25 reached PEN 446 million (S/ 446.1 million), up 216% year-over-year, with ROE at 16.3%, driven by improved macroeconomic conditions, commercial banking, insurance, and digital growth.

• Commercial banking led growth with a 19% year-over-year increase in loans and over 120 basis points gain in market share, consolidating position as the third-largest bank.

• Insurance and wealth management segments posted double-digit growth, with assets under management up 16% year-over-year to $7.5 billion and retail premiums up 36%.

• Digital strategy accelerated, with 82% of retail customers now digital and primary banking relationships up 15% year-over-year.

• Funding costs improved, with cost of funds down 80 bps year-over-year and low-cost funding rising to 35% of total funding.

Financial highlights

• Net income reached PEN 446 million, 3.2x last year’s result; ROE at 16.3%; net interest and similar income rose 2.3% year-over-year to S/ 1,158.9 million.

• Fee income from financial services increased 10.3% year-over-year to S/ 296 million; other income up 76.6% year-over-year.

• Cost of risk at 2.8%, down 190 bps year-over-year, but up 20 bps sequentially due to a PEN 144 million provision related to Telefónica; excluding this, cost of risk would be 2.5%.

• Cost to income ratio improved to 35.4% in 1Q25 from 37.2% in 1Q24.

• Deposits and obligations increased 4.4% year-over-year to S/ 53.3 billion; loan-to-deposit ratio at 97%.

Outlook and guidance

• Guidance for ROE remains at 16-18% for 2025, with upside risk but no change yet despite strong Q1.

• Loan growth expected to remain high single digits, led by commercial banking; consumer portfolio recovery is underway but not yet at target levels.

• Cost of risk guidance remains at ~3%, with potential to trend lower if consumer growth is slower.

• NIM expected to recover as consumer lending resumes and cost of funds continues to improve.

• Continued focus on efficiency and digital transformation to drive primary banking relationships.