Intercorp Financial Services (IFS) Q3 2024 earnings summary

Executive summary

• Net profit for 3Q24 reached S/ 390 million, doubling year-over-year and up 36% sequentially, with ROE at 15.1% and strong recovery across all business lines.

• Earnings recovery was driven by improved banking and investment results, lower cost of risk, and better funding mix.

• Customer base expanded across all segments, with digital banking customers up 12% YoY and insurance customers up 16% YoY; 81% of retail banking customers are now digital.

• Strategic focus on digital transformation, profitable growth, and sustainability, with digital customers at 81% and a CSA score improvement to 69.

Financial highlights

• Total revenues for 3Q24 were S/ 1,758 million, up 4% QoQ and 5% YoY; net interest margin at 5.3%.

• Cost of risk decreased to 3.1% in Q3, down 90 bps sequentially and 210 bps from Q4 2023 peak.

• Fee income increased 5% sequentially, driven by banking and wealth management.

• Efficiency ratio was 38.1%, slightly improved QoQ but higher YoY.

• EPS increased to S/ 3.39 in 3Q24 from S/ 1.69 in 3Q23.

Outlook and guidance

• 2024 guidance targets ROE above 12%, NIM above 5.5%, and efficiency ratio around 37%.

• Loan growth expected in mid-single digits, with cost of risk below 4.3%.

• NIM expected to recover in 2025 due to lower funding costs and a shift to higher-yielding loans.

• ROE expected to approach 18% by late 2025, contingent on consumer loan recovery and stable cost of risk.

• Capital ratios projected to remain at sound levels, with IBK TCR above 14%.