Intercorp Financial Services (IFS) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 doubled quarter-over-quarter to S/ 286.2 million, driven by improved banking and insurance results, though still down year-over-year.

• ROE rose to 11.2% in Q2, with expectations to exceed 12% by year-end and a mid-term target of 18%.

• Digitalization advanced, with 81% of banking customers using digital channels and 76% of retail products sold digitally.

• Commercial loan growth reached 15% year-over-year, and insurance premiums grew 25% year-over-year, with annuities market share at 29%.

• Recognized by Euromoney as Peru's Best Bank, Best Digital Bank, and Best Bank for Corporate Responsibility.

Financial highlights

• Net income for Q2 2024 was S/ 286.2 million, up 100% quarter-over-quarter but down 13.5% to 20% year-over-year.

• ROE reached 11.2% in Q2, up from 5.6% in Q1; H1 2024 ROE was 8.4%.

• Revenues grew 2% year-over-year, mainly from insurance, offset by lower wealth management revenues; NIM at 5.2% in Q2.

• Cost of risk decreased to 4% from 4.7% in Q1; cost of funds improved by 40bps quarter-over-quarter.

• Efficiency ratio was 38.6% for IFS and 39.7% for Interbank.

Outlook and guidance

• Year-end ROE expected above 12%, with a mid-term target of 18%.

• Loan growth guidance at 4.5% to mid-single digit for 2024, supported by commercial banking.

• NIM expected to recover slightly as cost of funds continues to decrease.

• Cost of risk projected to continue declining, ending the year near 3.5% to 4.3%.

• Focus remains on cost control, risk management, and digital/ESG improvements.