Credicorp Ltd (BAP) Q3 2024 Earnings Call Highlights: Record Net Income and Strategic Expansion

GuruFocus.com11-09

Net Income: Record high of $1,523 million for the third quarter. Dividend Payout: Total dividend payout of 75.3% to date, including a special dividend of $11 per share. Return on Equity (ROE): 18.5% ...

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17.7% year-to-date.Net Interest Income: Increased by 3.5% quarter over quarter.Net Interest Margin : Increased 10 basis points to 6.4%.NPL Ratio: Dropped 12 basis points to 5.9%.Loan Growth: Contraction of 1.2% in average daily balances and 3% in quarter-end balances.Efficiency Ratio: Improved to 44.6% for the first nine months of 2024.GDP Growth Forecast: Maintained at 3% for 2024 and 2.8% for 2025.GuruFocus has detected 3 Warning Signs with AAUCF.For the complete transcript of the earnings call, please refer to the full earnings call transcript.Credicorp Ltd  reported a record high net income of $1,523 million for the third quarter, driven by strategic initiatives and an improving macroeconomic environment.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"BAP":"Credicorp Ltd"},"translate_title":"Credicorp Ltd(BAP)2024年第三季度收益看涨期权亮点：创纪录的净利润和战略扩张","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BAP":1},"content_text":"Net Income: Record high of $1,523 million for the third quarter.\nDividend Payout: Total dividend payout of 75.3% to date, including a special dividend of $11 per share.\nReturn on Equity (ROE): 18.5% for the third quarter; 17.7% year-to-date.\nNet Interest Income: Increased by 3.5% quarter over quarter.\nNet Interest Margin (NIM): Increased 10 basis points to 6.4%.\nCost of Risk: Decreased to 2.4%.\nNPL Ratio: Dropped 12 basis points to 5.9%.\nLoan Growth: Contraction of 1.2% in average daily balances and 3% in quarter-end balances.\nEfficiency Ratio: Improved to 44.6% for the first nine months of 2024.\nGDP Growth Forecast: Maintained at 3% for 2024 and 2.8% for 2025.\n\n\nWarning! GuruFocus has detected 3 Warning Signs with AAUCF.\n\nRelease Date: November 08, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nCredicorp Ltd (NYSE:BAP) reported a record high net income of $1,523 million for the third quarter, driven by strategic initiatives and an improving macroeconomic environment.\nThe company distributed a special dividend, achieving a total dividend payout of 75.3% to date.\nCredicorp Ltd (NYSE:BAP) maintained a strong ROE of 18.5% for the quarter, supported by universal banking and insurance businesses.\nThe company is witnessing significant benefits from investments in innovation and digital capabilities, enhancing customer relationships and promoting financial inclusion.\nCredicorp Ltd (NYSE:BAP) received provisional approval to create Tempo Bank Chile, marking a significant milestone in its expansion into the Chilean financial market.\n\n Negative Points \n\nDespite strong financial performance, Credicorp Ltd (NYSE:BAP) faced negative loan growth and an elevated cost of risk, indicating challenges in the lending environment.\nNon-interest income contracted due to regulatory changes impacting foreign transfer services, particularly affecting BCP Bolivia.\nThe insurance underwriting results fell by 7.5%, reflecting less favorable reinsurance outcomes in the P&C business.\nThe company revised its guidance for total loan growth to around 0% due to low demand for long-term financing and cautious origination in retail banking.\nThere is uncertainty regarding the impact of geopolitical tensions and the results of the US elections, which could introduce volatility into the market.\n\n Q & A Highlights \nQ: How do you see the cost of risk evolving in 2025 given the strategy to increase exposure to the retail segment? A: Alejandro Perez-Reyes, Chief Operating Officer, mentioned that the cost of risk is expected to continue decreasing in 2025, although not returning to pre-pandemic levels due to a change in portfolio mix. The expectation is for a lower cost of risk next year compared to 2024, even without returning any provisions like this year.\nQ: Which subsidiaries have an ROE below Credicorp's overall ROE, and what is the strategy to improve their performance? A: Gianfranco Ferrari, CEO, stated that the microfinance business is underperforming but is expected to improve next year. BC P Bolivia is also underperforming due to its market environment. The strategy includes focusing on innovation and efficiency to improve ROE.\nQ: Is the impact of excess liquidity from pension fund withdrawals short-lived, and how does it affect growth perspectives for next year? A: Alejandro Perez-Reyes explained that while the pension fund withdrawals are a short-lived event, the overall improvement in employment and economic conditions should support continued improvement in asset quality and growth in 2025.\nQ: Given the strong ROE performance this year, is there potential upside to the 17% ROE guidance for 2024? A: Alejandro Perez-Reyes noted that while there is seasonality in the fourth quarter, they expect to end the year on the upper side of the 17% ROE guidance.\nQ: How sensitive is the net interest margin (NIM) to changes in interest rates, particularly with expected rate cuts? A: Alejandro Perez-Reyes indicated that a 100 basis point shift in rates could impact the NIM by about 15 basis points in the first year and 25 basis points cumulatively in the second year. However, they expect to sustain or improve NIM through local funding advantages and portfolio mix adjustments.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"2","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2482419182"}