Credicorp (NYSE:BAP) reported a 19.9% return on equity for the third quarter of 2026 as lending and transaction activity grew, while the financial group increased provisions for potential El Niño-related losses.
Executives maintained their full-year guidance, including a return on equity of around 19.5%, even as they warned that the weather event could be more severe than previously anticipated. The company also reaffirmed its medium-term return-on-equity target of around 22%.
Quarter-end loans rose 14.8% year over year, led by retail lending at BCP, Chief Financial Officer Ignacio Belaúnde said. Net interest income increased 17.7%, while fee income climbed 20.4%. The nonperforming loan ratio fell to 3.9%, which management attributed to improvements in loan origination and collections.
El Niño provisions expected to rise
Credicorp’s quarter-end base case had shifted from a strong to a very strong El Niño scenario, and the outlook has since evolved toward a potentially extreme event, Belaúnde said. The company estimates that clients potentially affected represent about 8% of its total loan portfolio.
Chief Risk Officer César Ríos said Credicorp had accumulated approximately PEN 500 million in El Niño provisions by the end of the third quarter, including about PEN 100 million in the second quarter and PEN 400 million in the third. Special recoveries and provision releases of roughly PEN 200 million offset part of the third-quarter charge, bringing its net impact on the income statement to about PEN 200 million.
Ríos said most of the expected impact on provisions comes from BCP’s retail customers, including individuals and small businesses, as well as Mibanco. The company has moderated lending in some vulnerable areas and is monitoring exposed customers and sectors.
Management expects to add provisions in the fourth quarter but did not specify an amount. Ríos said the company still expects full-year cost of risk, including El Niño provisions, to remain within its 1.7% to 2.1% guidance range. Third-quarter cost of risk was 2%, while the underlying measure was 1.6%.
Chief Executive Officer Gianfranco Ferrari said the bulk of El Niño provisioning should be recorded this year under forward-looking accounting rules, although uncertainty could lead to some impact next year. He described the event as a “bump in the road” rather than a change to Credicorp’s medium-term outlook.
Digital activity and lending drive growth
BCP posted a 27.7% return on equity in the quarter. Its loans increased 14.6% year over year, and its nonperforming loan ratio fell to 3.7%. Mibanco reported a 20% return on equity and 18.7% annual loan growth, with disbursements reaching a record in September.
Yape ended the quarter with 17 million monthly active users, each completing an average of 71 transactions per month. Its risk-adjusted revenue was 1.8 times the level of a year earlier, and its lending portfolio reached PEN 2.3 billion. Yape contributed 9.8% of Credicorp’s risk-adjusted revenues in the quarter.
Asked about slowing growth in revenue-generating transactions, Chief Innovation Officer Francesca Raffo pointed to the size of the customer base and population. She said Yape still has opportunities to develop cross-border transactions and expand consumer and small-business lending.
Ferrari said Credicorp sees room for double-digit portfolio growth over the longer term, although he declined to forecast a specific pace for the next two quarters because of El Niño. Belaúnde said the group sees room to lend outside the portion of the portfolio directly exposed to the event, subject to customer credit capacity and returns.
Guidance and capital plans
Credicorp maintained its forecast for Peru’s economy to grow around 3.5% in 2026, including the estimated impact of El Niño, and expects full-year loan growth of around 12%. Management also expects high-teens fee-income growth and said net interest margin and risk-adjusted net interest margin could finish at the higher end of their respective guidance ranges.
The company does not expect to declare an extraordinary dividend this year, Belaúnde said, citing opportunities to deploy capital for profitable growth. Credicorp plans to provide a strategic update on Nov. 17.
About Credicorp (NYSE:BAP)
Credicorp is a financial services holding company based in Lima, Peru. Through its subsidiaries, it provides commercial and retail banking, insurance, pension-fund management, investment banking, wealth management, microfinance and digital payment services. Its businesses include Banco de Crédito del Perú (BCP), the country’s largest bank; Pacífico Seguros; pension administrator Prima AFP; investment and wealth-management firm Credicorp Capital; and microfinance bank Mibanco. BCP traces its history to 1889, when it was established as Banco Italiano.
