Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Net income reached PEN 640 million with an 18.5% ROE, exceeding midterm targets despite a normalization of investment results and cost of risk.
Higher-yielding loan segments accelerated to 12% year-over-year growth, specifically driven by a 31% increase in small business and a 9% rise in consumer lending. Management attributed a slight quarter-over-quarter revenue decline at the bank to lower financial transaction results and funding cost pressure, while noting that year-over-year comparisons were affected by a high base from extraordinary investment gains in the prior year. and lower financial transaction results. The payments ecosystem, anchored by Izipay and PLIN, continues to serve as a strategic lever for deepening primary banking relationships and securing low-cost funding.
Interseguro and Inteligo maintained strong momentum, with Inteligo's assets under management reaching a record $10 billion., supported by healthy client engagement and advisory models. Operating expenses increased 11% year-over-year, reflecting strategic investments in digital capabilities, cybersecurity, Gen AI, and the expansion of the insurance sales force. Management maintains a full-year ROE guidance of above 17%, adopting a prudent stance due to potential El Niño impacts in the second half of 2026.
GDP growth for Peru is projected at 3.4% for 2026, supported by resilient domestic demand and a market-friendly agenda from the new administration. The company expects a recovery in risk-adjusted NIM in the coming quarters as the funding mix improves and higher-yielding loan growth matures. Management anticipates booking forward-looking credit provisions in the second half of the year to mitigate risks associated with a potential 'strong to extraordinary' El Niño event.
Loan growth is expected to remain in the high single digits for the full year, supported by recovering consumer confidence and private investment. El Niño probability for Q4 2026 has risen to 80%, posing risks to primary sectors like agriculture and fishing, though management notes a lower-risk portfolio than in 2023. Funding costs increased 20 basis points quarter-over-quarter, partially due to temporary inflation-pegged funding and a conservative liquidity build-up during the election period.
A 'forward arbitrage strategy' in the treasury department impacted NIM negatively but contributed positively to financial transaction results, which grew 26% year-over-year. The eighth release of private pension funds concluded in February, leading to a gradual normalization of the excess liquidity that had previously suppressed cost of risk. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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