Credicorp Limited Powers Through Q1 2025 with Resilient Loan Growth and Strong Profitability
Credicorp Limited, the Peruvian financial conglomerate, has reported a solid first quarter in 2025 despite lingering global uncertainty. In its Q1 conference call, the company's CEO, Gianfranco Ferrari, highlighted Peru's rebounding economy, with GDP growth exceeding expectations at 3.9%.
Ferrari emphasized that Peru's economic fundamentals remain strong, driven by private spending, lower inflation, and record terms of trade. The country's business cycle recovery has stimulated credit demand, unlocking growth in the private sector. Credicorp, as a leading player in the Peruvian economy, is well-positioned to capture this momentum.
The company's Q1 results reflect its resilience in the face of global uncertainty. Loan growth resumed across wholesale banking and individuals, with risk-adjusted net interest margin (NIM) improving year-over-year due to lower provisioning. Profitability remained strong, driven by operating dynamics and Credicorp's ability to leverage Peru's cyclical rebound.
Ferrari noted that the company has intentionally invested in modernized core systems, expanding digital capabilities, and redesigned client journeys across universal banking, microfinance, insurance, and wealth management. These strategic investments have contributed to the company's solid fundamentals, as evidenced by a high return on equity (ROE) of 20.3%.
Excluding extraordinary gains related to the acquisition of a joint venture stake, ROE would have been 18.4%, still exceeding expectations and reflecting strong performance across core businesses. Operational performance improved in microfinance, with continued growth in non-interest income from fee-based and transactional volumes.
Credicorp's strategic focus on new businesses has yielded promising results, with 5.4% of risk-adjusted revenues coming from these segments in Q1. The company is advancing towards its target of 10% revenue contribution from new businesses by 2026. Loan growth was particularly robust in wholesale banking and short-term loans, while individuals and Mibanco also showed some growth.
As the global environment continues to evolve, Credicorp remains vigilant, closely monitoring developments such as President Trump's announcement of a 10% tariff on U.S. imports from all its trading partners. While the direct impact on Peru's GDP is expected to be limited, the company is prepared to act as necessary.
Overall, Credicorp Limited has demonstrated its resilience and potential for growth in Q1 2025, underpinned by strong fundamentals across its core businesses and strategic investments. As the Peruvian economy continues to rebound, the company is well-positioned to capitalize on this momentum and drive value creation.
