管理層發言
Good morning and welcome to Intercorp Financial Services First Quarter 2026 Conference Call. All lines have been placed on mute to prevent any background noise. Please be advised that today's conference is being recorded. After the presentation, we will open the floor for questions. At that time, instructions will be given as to the procedure to follow if you would like to ask a question. Also, you can submit online questions at any time today using the window on the webcast and they will be answered after the presentation during the Q&A session. Simply type your question in the box and click submit question. It is now my pleasure to turn the call over to Mr. Ivan Peill from Inspire Group. Sir, you may begin.
Thank you, and good morning, everyone. On today's call, Intercorp Financial Services will discuss its first quarter 2026 earnings. We are very pleased to have with us Mr. Luis Felipe Castellanos, Chief Executive Officer, Intercorp Financial Services; Ms. Michela Casassa, Chief Financial Officer, Intercorp Financial Services; Mr. Carlos Tori, Chief Executive Officer, Interbank; Mr. Gonzalo Basadre, Chief Executive Officer, Interseguro; and Mr. Bruno Ferreccio, Chief Executive Officer, Intelligo. They will be discussing the results that were distributed by the company yesterday. There is also a webcast video presentation to accompany the discussion during this call. If you did not receive a copy of the presentation or the earnings report, they are now available on the company's website ifs.com.pe. Otherwise, if you need any assistance today, please call Inspire Group in New York at (646) 940-8840.
I would like to remind you that today's call is for investors and analysts only. Therefore, questions from the media will not be taken. Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company's future performance, or financial results. As such, statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the earnings presentation and report issued yesterday. It is now my pleasure to turn the call over to Mr. Luis Felipe Castellanos, Chief Executive Officer of Intercorp Financial Services, for his opening remarks. Mr. Castellanos, please go ahead, sir.
Thank you. Good morning, and thank you all for joining our first quarter 2026 earnings call. Let me start on the macro front. 2026 started better than expected, with first quarter GDP growth of around 3.6%, supported by private spending and favorable commodity prices. However, going forward, the outlook remains subject to certain risks. The international environment has become more volatile with higher energy prices and external uncertainty potentially pressuring inflation and the growth outlook. In addition, the potential impact of El Niño could affect activity in the coming quarters if weather-related disruptions materialize. While Peru's monetary framework and macro fundamentals continue to provide support, we believe it is appropriate to remain prudent and closely monitor how both domestic and external risks evolve. Turning to IFS's first quarter results. We delivered record quarterly net income of 602 million soles and an ROE above 19%.
These results reflect disciplined execution across our platform and the benefits of our model. At Interbank, we also delivered record quarterly net income, supported by a low cost of risk and an improving risk-adjusted NIM. Loan growth has been more measured due to pension fund withdrawals, although higher-yielding segments continue to grow at a high-single-digit pace. In parallel, we are making progress with EasyPay, strengthening our merchant franchise and capturing joint business opportunities with the bank. We are also enhancing our small business value proposition through our recently launched business app, while PLIN continues to deepen engagement through new features such as PLIN Credit Card. Interseguro continues to grow in its core business, supported by private annuities and life insurance. It is also leveraging synergies with Intelligo to expand private annuities and with Interbank to advance integrated bancassurance solutions.
Intelligo, our wealth management segment, continues to grow at a double-digit rate, reaching a new record in assets under management, thanks to our customers' trust and consistent engagement. IFS remains committed to focused profitable growth with customers at the center of our decisions. We are reinforcing this through digital excellence, deeper primary relationships, and continued investments in technology, generative AI, and innovation to improve productivity and customer experience. A highlight of this quarter was our strategic partnership within retail. As announced in April, IFS and InRetail agreed to acquire Infinance XP, formerly Financiera O, through the purchase of EXP Holding for $130 million. We believe this transaction will strengthen our consumer finance and payments ecosystem by combining IFS's capabilities with InRetail's reach — a powerful combination to create a superior value proposition to enhance customer experience in everyday uses through a scalable digital platform.
We are committed to make the investments required to make this possible. Looking ahead, we remain focused on executing our strategy in an environment that may continue to be volatile. Our platform and diversified sources of revenue have proven resilient across cycles. We believe we are well positioned to keep executing our growth strategy with discipline, sustaining profitability, and continuing to strengthen our leadership in Peru. We maintain a strong focus on risk management, efficiency, and disciplined investments. Now let me pass it on to Michela for further explanation of this quarter's results. Thank you.
Thank you, Luis Felipe. Good morning, and welcome everyone to Intercorp Financial Services' first quarter earnings call. We would like to begin with our quarterly key messages. In 2026, we see a robust start to the year, delivering a solid performance across all segments as mentioned by Luis Felipe. Net income reached a quarterly record of 602 million soles, marking a 35% increase compared to the prior year and a return on equity of 19.4%. Second key message is that higher-yielding loans continue with a positive momentum, showing a 9% growth on a year-over-year basis. Third, risk-adjusted NIM increased 90 basis points over the year, reaching 4.2% in the last quarter, while we maintain a low cost of risk at 1.4% and cost of funds below 3%. Fourth, we continue to deepen primary banking relationships, and as a result, our retail banking primary customers grew by 14% and our NPS reached 68 points.
Fifth, our insurance and wealth management business continues to deliver double-digit growth with written premiums growing by 35% year over year, mainly due to the growth in private annuities, and with assets under management growing 13% year over year. On this slide, I will start with a quick update on our latest acquisition. InRetail Peru Corp. and Intercorp Financial Services announced the acquisition of Infinance XP, formerly Financiera O. We executed the transaction through the purchase of EXP Holding Corp from InRetail for $130 million, implying a 1.19 price over book value multiple. Following the closing, InRetail and IFS each own 50% of EXP Holding. Additionally, we wanted to mention that as part of Infinance's digital strategy, they have recently launched SIP, an app that brings together financial products, payments, and the loyalty program in one application. On slide 4, we wanted to highlight three key points.
First, this is a strategic partnership to strengthen our consumer finance and payments ecosystem. We are building on Infinance XP's scale with close to 3 million customers, 1.8 billion soles in loans, and PEN 1.5 billion in deposits. Second, we are combining IFS' solid financial position and integrated capabilities with InRetail's leading retail platform, which has more than 4,000 stores nationwide to accelerate adoption and distribution. Third, we are enhancing the customer value proposition through a scalable digital platform, expanding access and convenience and making everyday payments and consumer credit simpler and more seamless. Now let's start with our first key message. On slide 6, let me start with a brief update on the macro environment. We entered 2026 with stronger momentum than expected. GDP growth for the first quarter is tracking around 3.6%, following a solid finish to 2025 supported by private spending and still favorable commodity prices.
That said, the near-term outlook has become more challenging. Inflation has sped up above the Central Bank's target due to temporary supply shocks and global conditions have turned more volatile, particularly with higher energy prices. Looking ahead, growth should remain close to 3%, supported by sectors such as construction, commerce and services, even though political uncertainty related to the presidential elections could slightly slow the pace. Nonetheless, monetary policy remains supportive with a reference rate at 4.25%, which is 50 basis points below the Fed. At this point, we do not expect rate cuts from the Central Bank. Moreover, while the sol has shown an appreciation trend over the last 12 months, more volatile global conditions and domestic political dynamics have led to a depreciation of 2.2% year to date as of May. In sum, Peru continues to offer strong fundamentals and attractive long-term opportunities even as we navigate a more volatile environment in the near term.
In terms of domestic demand, growth continues to be led by private investment, which is expected to expand by around 7% this year. This reflects a mining project pipeline of over $60 billion across more than 60 projects, together with the infrastructure works already underway, particularly in transportation and energy. This momentum is clearly visible in strong construction activity. Private consumption remains solid supported by real wage growth and a still tight labor market with a formal wage bill expanding by over 5% in real terms. While consumer and business confidence softened in April as the electoral cycle intensified, this has not yet translated into fundamentals. Business confidence has remained in the positive part of the range on the back of record copper and gold prices. There are still some risks to monitor. Weather conditions, including a higher probability of a moderate coastal El Niño, could affect sectors such as fishing and trade, while higher global energy prices may continue to pressure costs.
That said, current momentum and underlying fundamentals point to resilient domestic demand even as the electoral process adds uncertainty. In this context, credit growth remains slightly positive led by retail lending, which continues to outpace commercial credit. On Slide 8, we delivered a very strong start to the year with record quarterly net income at IFS. Earnings were up 35% year over year and ROE above 19%. Earnings also improved substantially versus last quarter. At the bank, results were supported by lower cost of risk and strong financial transaction results, including gains on our sovereign bond portfolio and dividends received from IFS which we net of IFS consolidation, as well as strong FX gains. Net income increased 44% versus last year and the bank's ROE improved to 19.5%. Interseguro and Intelligo also posted another quarter of double-digit growth supported by healthy core trends.
At Interseguro, results were mainly supported by a stronger insurance result, excluding the impact of inflation mainly in annuities and life. At Intelligo, results benefited from a stronger return on the investment portfolio with ROE reaching 22%. Overall, it was a solid quarter across all IFS business lines with core operating performance as the main driver of profitability. On Slide 9, you can see that IFS revenues grew 10% year over year. At the bank, top-line growth was up 8% year over year, supported by ongoing improvements in our cost of funds, stronger fee generation and better investment and FX results. Interseguro also showed strong revenue growth of 18% driven by a better insurance result in life and annuities. And at Intelligo, revenues increased 34%, reflecting steady fee growth in line with higher assets under management. Investment performance also improved in the quarter as we reflect a softer fourth quarter comparison as the portfolio delivered a 12-month return of above 12%.
On Slide 10, IFS expenses increased 13% year over year, reflecting the investments we are making to support our long-term growth. This includes accelerated spending in technology to strengthen resilience, enhance the user experience, improve cybersecurity, expand capacity, and advance our generative AI capabilities. We are also investing in leadership and talent across key teams because people remain central to executing our strategy. As a result, the cost-to-income ratio at IFS level stands at 36.6%. Now let's move on to our second key message. On Slide 12, we are seeing consistent growth across products and segments with a 9% growth in our higher-yielding loans. Our total loan portfolio grew around 6% year over year or 7% excluding FX. Growth was driven by mortgages, midsized companies, and small businesses, with this last one up nearly 30% over the past year. In retail banking, we continue to see healthy momentum across segments.
Mass market remains our core retail franchise representing roughly 66% of the retail portfolio while affluent continues to expand as well. Consumer balances were broadly stable quarter on quarter reflecting the expected excess liquidity, yet still grew 5% year on year, with disbursements growing 15% year over year during the month of March. Good news came in April, where growth came in very strong, showing an acceleration. Mortgage lending also continued to outperform growing more than 8% year over year. We gained 20 basis points of market share reaching 16.2%, which is more than 100 basis points above the fourth largest bank, hence firmly positioning us as the third largest player in the system. In commercial banking, performance was strong across corporate, midsized companies and small business. Small business stood out again, growing almost 30% year over year, and disbursements more than doubling year over year during the month of March.
This means we not only replaced all Impulso MyPeru maturities, but expanded our book to more than 3x that level. Over the past year, disbursements have doubled, reflecting the strength of our enhanced value proposition. And we have recently launched our new business banking app for small business, which now brings together both Interbank and EasyPay functionalities in one place. This is a key step to make our clients more digital, improve day-to-day interactions with the bank, and ultimately deepen primary banking relationships. Following with the third message we continue to see improvement in risk-adjusted NIM. On Slide 14, let me share a quick update on asset quality. Our quarterly cost of risk continued to improve reaching 1.4% this quarter, the lowest level in the past four years. This reflects a healthier loan mix and a more supportive credit environment together with the positive impact from the excess liquidity in the retail portfolio.
In retail, cost of risk is now below 3%, down 100 basis points versus last quarter and well below our risk appetite. Consumer lending continues to perform better with cost of risk improving from around 7% to below 5% year over year, supported by healthier customers and the positive impact of recent liquidity events. Importantly, new vintages are also tracking well. On the commercial side, asset quality remains strong with cost of risk stable. Overall, nonperforming loan ratios remain healthy and our coverage ratio is solid at around 140%. Looking ahead, as our consumer and small business portfolios continue to grow and now represent around 22% of total loans, we would expect cost of risk to gradually normalize from these very low levels. Even in a volatile environment, these trends point to a healthier operating backdrop and reinforce that our disciplined risk management is supporting sustainable growth.
On slide 15, there is some good news to highlight in terms of risk-adjusted NIM. We continue to make meaningful progress on a risk-adjusted basis. The risk-adjusted NIM is up 90 basis points year over year reaching 4.2%. The last quarter alone added another 20 basis points mainly driven by the lower cost of risk. On the asset side, average loan yields were slightly lower. This mainly reflects the risk mix of the portfolio. On the funding side, our cost of funds declined by another 20 basis points quarter over quarter, reflecting continued improvement in our deposit mix and pricing and offsetting the impact from loan yields. As a result, reported NIM declined by 10 basis points versus last quarter, but it remained stable year over year. It is worth noting that the bond issuance completed in January added a negative impact of around 20 basis points to NIM, which will disappear later this year.
On Slide 16, I want to spend a moment on funding. The trends are moving in the right direction. Deposits continue to be our main source of funding, representing about 82% of the total. Total deposits grew 8% year over year, or 9% excluding FX effect. Retail deposits continued to grow, up more than 13% with savings and transactional balances up over 20%, supported by the pension fund release. On the commercial side, the continued expansion of our payment ecosystem led to a 27% increase in efficient commercial deposits. All of this is translating into lower funding costs, as our cost of funds is down 40 basis points year over year, and a further 10 basis points over the last quarter. Cost of deposits improved by 20 basis points just in the quarter. With efficient funding now at about 40% of the mix, we still see additional room for improvement. Moving on to our digital strategy, our payment ecosystem with PLIN and EasyPay is driving our growth in low-cost funding.
We have continued working to generate further synergies as we drive the growth of our payment ecosystem, focusing on increasing transactional volumes, offering value-added services, and leveraging EasyPay as both a distribution network for Interbank products and a source to increase float. As mentioned, one key development has been the new banking app for small business, which allows us to deliver an integrated solution and maximize the value we bring to our clients. As such, the flows from EasyPay were up 60% over the past year for the segment, contributing to a 40% increase in deposits, which now account for 12% of wholesale deposits or 33% of wholesale low-cost deposits. Additionally, the flows from EasyPay to Interbank expanded by 16% in the same period as Interbank's share of EasyPay flows is around 40%. PLIN continues to gain scale and deepen engagement. PLIN WhatsApp, the first bank-led payments experience on WhatsApp in Peru, reached almost 7,000 affiliates by March.
Usage keeps accelerating, with transactions per user up 44% quarter over quarter. In March, we launched PLIN Credit Card, our buy-now-pay-later solution where we already have more than 30,000 active clients. Our digital initiatives continue to create tangible value and deepen primary banking relationships with PLIN playing a central role. Over the past year, our retail primary banking base grew 14% and now represents more than 35% of total retail clients. PLIN closed the quarter with 2.7 million monthly active clients and more than 70 million monthly transactions with 60% going to merchants. We also continue to see encouraging trends in our digital indicators. Retail digital adoption increased to 84%, and commercial digital clients now stand at 75%. The good news is that NPS improved quarter over quarter reaching 68 in retail, a record high, and 73% in commercial supported by agility and simplicity of our app and consistently strong service quality.
Finally, we are upgrading the app experience with a clear focus on security, speed, and self-service. We added anti-fraud alerts on the home screen and piloted temporary credit card blocking, increasing alert contactability by over 40%. In addition, we enabled digital tracking of customer requests helping reduce customer assistance by 20% and we reduced physical debit card issuance by 30%. All of these reinforce our commitment to delivering the best possible experience for our customers. In insurance, we continue to focus on enhancing the digital experience for our clients and expanding our sales from digital channels. The development of internal capabilities has allowed us to increase digital self-service to 70% and the digital premiums to grow 25% in the last year. In Wealth Management, we are committed to improve our digital adoption to 38%. Additionally, digital transactions now represent 58% of all activity on the platform.
Moving on, solid results with double-digit growth in insurance and wealth management. On slide 22, we continue to build contractual service margin, which increased 15% year over year. Growth was mainly driven by annuities, up 19%, followed by Individual Life, up 17%. Individual Life remains a key priority for us given its low penetration and high profitability. While our traditional channels continue to perform well, we are also broadening distribution and refining the product to reach new segments and sustain growth. On investments, results were affected by higher inflation which impacted a portion of the portfolio linked to inflation. This same effect flows through insurance results largely netting out at the bottom line. Excluding this impact, the investment portfolio return would have been 6.3% in line with our historical levels. On Slide 23, Intelligo continues to show solid momentum.
Assets under management have grown at a double-digit pace reaching again new highs and now totaling 9.5 billion including deposits. Fee income continues to improve, up 9% year over year adding to the positive trend in results. Now let me move to the final part of the presentation where we provide some key takeaways. Before we move on to our operating trends, we would like to summarize where we are focusing our growth efforts. The consumer portfolio was flat quarter on quarter, yet it posted 5% year over year growth. April has seen a clear acceleration in growth which we expect to continue in the coming months. At the same time, the mortgage segment continued its positive trajectory with 8% growth continuing to gain market share now above 16%. In commercial banking, we have seen important growth in small business which increased by 29% year over year. We continue to see a strong potential in this business given our current small market share.
The commercial portfolio as a whole grew 8% year over year, when adjusted by FX. This strong performance is supported by our strategy to deepen relationships with key midsized company clients and leveraging synergies with EasyPay to enhance our value proposition. In insurance, we are maintaining our focus on long-term products as individual life has shown encouraging growth this year. Finally, in wealth management, assets under management continues to grow at a healthy pace, up 13% year over year reaching a new record level, a reflection of both market performance and continued client engagement. On Slide 26, let's go through our first quarter operating trends. Our ROE for the first quarter was 19.4% above our guidance for 2026. Given this result, we see our year-end ROE above 17% rather than around 17% as stated in the previous call. In terms of loan growth, we were up 5.6% or close to 7% adjusting for FX appreciation.
We continue to expect high-single-digit growth for the full year. Finally, we remain focused on efficiency at IFS. Our cost-to-income ratio was below 37% within our guidance range. Let me finalize the presentation with some key takeaways. First, we saw a robust start to the year. Second, our higher-yielding loans continue with a positive momentum, especially in the small business segment. Third, we continue to see sustained improvement in the risk-adjusted NIM helping profitability. Fourth, we are strengthening primary banking relationships with our retail clients. And finally, our insurance and wealth management business continued delivering double-digit growth. Thank you very much. Now we welcome any questions you may have.
分析師問答
Thank you. At this time, we will open the floor for your questions. First, we will take the questions from the conference call and then the webcast questions, followed by the phone queue. To ask your question on your touch-tone phone now, please press star 1. Questions will be taken in the order in which they are received. If at any time you would like to remove yourself from the questioning queue, just press star 2. Again, to ask a question, please press star 1 now. For the webcast viewers, simply type your question in the box and click submit questions. We will pause momentarily to compile a list of questioners. The first question will come from Ernesto Gabilondo with Bank of America. Please go ahead.
Thank you. Hi. Good morning, Luis Felipe, Carlos, and Michela, and good morning to all your team. And congrats on your results. My first question will be about the political outlook. Can you provide us more color on the latest update on the presidential elections? When is the court expecting to decide who will be the second candidate and what is the next date we should be following? My second question is on the weather phenomenon of El Niño. Also, can you provide us the latest news on the probability of having a moderate or a strong El Niño this year and what should be the date or what should we be monitoring to think about this phenomenon of El Niño? And my third question is on your customer risk outlook. As you pointed out, it behaved much better than expected. You also mentioned that you have this risk appetite over higher-yield loans, credit cards, and SMEs, and we should be thinking a gradual higher cost of risk. But I remember last time you were guiding around 2.5% for the year. So after a very, very good first quarter, just wondering how do you see the cost of risk in 2026? And then how should we think about the next years? Thank you.
Okay, Ernesto. Thanks very much for your questions. Let me go through some of them, and then I will pass it on to the team. On the political outlook, actually, it is not exactly clear when the final counts will be completed. There is an expectation that probably by the fifth of this month the 100% of the count will be completed. Right now, it is very close; it is at 99.755%. So it is very close. The difference is only around 15 thousand votes. So I guess it will be prudent to wait until everything is accounted for. I have heard that it could be as early as this Friday, the fifteenth, but the entities are doing their work. So I guess that is what we need to pay attention to. Then the second round is scheduled for June 7, so that is another important date to focus on because obviously that will define who comes into office afterwards. So that is what we have on the political outlook so far.
In terms of El Niño, I was looking at some numbers and the chances of a moderate El Niño have increased as we reported in the presentation. There was around a 21% probability in January and it has increased to 43% now. However, that situation can change over time. We are preparing; we have lots of experience in terms of managing this with our customers and clients. The effect would probably not be felt very strongly during the course of this year, but we may see some additional hot weather in the North of Peru and some drops in the South. The impact should come more towards the latter part of the year or early next year — that is when the actual weather phenomenon should hit. But it is something we are paying attention to and getting ready to be prepared. In terms of cost of risk, yeah, as mentioned during the presentation, the system as a whole is behaving very well in terms of cost of risk, and in particular Interbank is having a very good result given all the measures that we have been taking.
For the outcome of the year, let me pass it on to Carlos. He can elaborate a little bit more around our strategy to continue growing in higher-yielding segments, which is the one that at the end will impact how fast cost of risk should go back to more normal levels. Carlos, if you can help me there, it will be great.
Yeah. Thank you, Felipe. Hello, Ernesto. So the way we look at it is that we obviously do not have a target to increase the cost of risk. The way we look at it is the yield on loans. Usually, when you go to higher-yielding loans, the cost of risk goes up together and you manage that spread. We have been getting better with our models and being able to assess risk better. But also, as Luis Felipe mentioned, the whole system has had low cost of risk over the last five or six months because of year-end gratifications and the AFP withdrawal. So it has been a very liquid system for consumers, and that has two effects. One is, obviously, overall risk goes down. Also on credit cards, on revolving credit cards, not only risk goes down, but our customers repay a larger amount of their credit card bills, so the balance goes down as well. In terms of that, it hurts the yield a little bit, but it also improves the risk.
As long as the equation keeps the yield and we are still profitable on the loan, we are fine with that, and that is what has been happening. What we foresee over the next couple of months is that risk will go up a little bit as liquidity normalizes and we will continue to see growth. That is what we have seen in April: growth has accelerated versus previous months, but risk is still controlled. So those are the two levers that we look at, and we would expect a little bit more growth. It will not be a rapid increase in cost of risk, but our appetite for risk is in the 2.5% to 2.8% range in the long term, not in the short term. I do not know if that answers the question.
Oh, excellent. Perfect. Thank you. Thank you so much. So just the last question on your ROE expectations. As you mentioned, this year the ROE could be above your previous guidance and now could be above 17% for the year. I know that the quarter was also favored by financial transactions, especially market-wise revenues and other income. So just wanted to know or understand if that could be recurring and also what will be the drivers behind your new guidance?
Okay. Thank you, Ernesto. Well, that is basically the strong start to the year. As mentioned during the call, we are cautiously optimistic. The risks to ROE to the upside are present. As Michela mentioned, we were guiding around 17%; we feel more comfortable saying that it is going to be higher than 17%. However, it is early in the year and there are many moving parts still. We have the international environment that creates some volatility. We have the political situation. And obviously, we need to see what happens with El Niño. So we would not want to move strongly on guidance yet. But the beginning of the year and the trends that we are seeing put us in a very optimistic situation in terms of what 2026 can deliver for us. The drivers are the low cost of risk that we are seeing, the economy of Peru growing (expected around 3%), strong commodity prices creating positive momentum for Peru, and a positive start in business confidence and investment environment. Those indicators are driving the increase in expectation for our ROE. Thank you very much.
Thank you. The next question will come from Yuri Fernandes with JPMorgan. Please go ahead.
Congrats Michela, Luis Felipe. I will try to explore some of the topics that Ernesto did not touch in his few questions here. Maybe on margins, if you can provide a little bit more color — I think the mix towards more consumer loans may help the margins to move up, and I think that is part of the explanation: risk-adjusted NIM going up. So if cost of risk moves up, NIM should also go up. Can you help us quantify the magnitude of that? Are you talking about kind of 10 bps risk-adjusted going up over the years, 20 bps, 30 bps? Just trying to understand how powerful the combination of margins minus cost of risk is for the company. Then I can ask a second question. Thank you.
Hey, Yuri. Yeah. You are right. In terms of trends, that is correct. As cost of risk goes up, yields should go up, and the overall impact should be positive. To go over specific numbers, let me pass it on to Michela to see if she has the model or more detail on the numbers. Michela?
Good morning, Yuri. Listen, we did have a budget with NIM, cost of risk, and risk-adjusted NIM. But as you can see from the numbers in this first quarter, the numbers have been substantially better, especially in terms of cost of risk. At the end of the day, the risk-adjusted NIM is better than what we expected. What we expect for the rest of the year is a gradual recovery in NIM, which has not happened this quarter because the portfolio mix has not changed much due to the excess liquidity and the private pension funds withdrawal. So one thing that we should see in the coming months is that yield on loans should start to pick up because of the mix, and at the same time cost of risk will also increase. So risk-adjusted NIM will be stable or roughly at or above the level you see now, but the components should start to go up — both yields on loans and cost of risk.
Super clear, Michela and Felipe. And if I may ask a second one. Just on insurance, I think that was a highlight this quarter. There was some impact from inflation. But thinking ahead, what should I expect about this business unit? When I look at your premiums, they are growing. But the number of insurance clients — I think there is a slide on your presentation about this — it caught my attention that the number of clients is mostly stable, growing 1% year over year. That is a little bit less than what we see in wealth and banking. So, again, it was a good quarter. Premiums are fine. You had financial income. But looking ahead, how should we think about insurance? I guess part of my concern is maybe this subsidiary is not doing as well as the others given the number of clients, but maybe I am just wrong because private annuities explain part of the annuities strength here. So if you can help me understand what should we expect for insurance, I would appreciate it. Thank you.
Okay. Yuri, so yes, I see you are referring to the fact that we closed March 2025 with 3.2 million customers in insurance and 3.3 million in March 2026. Those are probably what you are referring to. We have Gonzalo Basadre here, who will help us. The drivers of insurance overall are very strong. As you have seen, premiums are growing double digit. The result from investments is doing very well and it is a very efficient operation. To address your question specifically, Gonzalo can help us with that.
Yes. Hi, Yuri. I think the confusion lies in that the total number of clients is not growing very fast, but that is because a big proportion of our clients are bancassurance clients, which are very big in number but very small in individual revenues. What is growing very fast is private annuities and life insurance, which have a smaller number of clients with much bigger premiums. In total, as you have seen, premiums are growing very fast. So what we should expect for the following months is premiums continuing to grow very fast, but the number of clients not increasing as much, simply because most of them come from bancassurance. That does not mean the business is not growing at a very healthy pace. I hope that explains it.
No, it helps. That was exactly it — premiums growing, clients not growing, but it is clear. So basically the growth of bancassurance clients in the end also helps you to grow your premiums on the insurance division, right? You do not need to have proper insurance clients to keep delivering premium growth. That is basically it. Bank clients have lower average premiums, while private annuities and life have much higher average premiums. Thank you very much, guys.
The next question will come from Carlos Gomez-Lopez with HSBC. Please go ahead.
Hello. Good morning, and congratulations on the results, and thank you for your detailed presentation as always. I have two questions for the longer term. First, regardless of the outcome of the elections, what do you expect in terms of growth in your planning for the medium term, say the next three to five years? What are you expecting in terms of asset growth, perhaps returns, but mostly asset growth for the medium term? And second, are there any regulatory changes that affect PLIN and UPI that you expect in the next year or two that could affect your strategy? Thank you so much.
Regarding medium- to long-term growth, the way we see it specifically for loans or assets is that the system should be growing between two and three times GDP. So as long as GDP continues to grow at three-plus percent, we should see low-single-digit or start to get into high-single-digit or low-double-digit growth. Particularly Interbank has always focused on gaining a little market share given that we have opportunities in specific segments. So probably our growth will be above what we expect for the system as a whole. Premiums, on the contrary, will probably grow faster because the level of penetration of insurance in Peru, particularly life and annuities, is low and presents opportunities. We expect to continue to see double-digit growth in those areas for some years. For our private bank and wealth management, the emerging wealthy class should also bring low-double-digit growth for the coming years. In terms of PLIN and UPI, I did not get your question exactly, but the dynamic is as we have seen: both PLIN and other instant payment solutions are getting traction as Peruvians use more digital solutions. PLIN continues to gain traction and we are starting to build use cases into our solutions, such as PLIN Credit Card. We see this as an important opportunity. Carlos Tori can complement this view around the payment dynamics and potential regulatory developments.
So the regulation regarding instant payments was put in place about two to two-and-a-half years ago requiring interoperability so PLIN can send to Yape and Yape can send to PLIN. There are updates in terms of SLAs and stability that the regulator (the Central Bank) continues to monitor. In terms of new regulation, we do not foresee anything in the short term. What could affect how we interact is that the Central Bank may offer a new 'highway' — similar to UPI — that would allow interconnection. The Central Bank offering a highway would provide an additional rail through which we can interact, but as far as we know, it will not be mandated that we use it. The idea is to offer a highway with better terms or more use cases to incentivize issuers to use it. This could be the first use of broader open banking rails where the highway can source funds from different accounts to send a transaction. The target date the Central Bank is considering is December, but many banks may not go into production in December due to the high transactional month; January 2027 is a more realistic timeframe.
That is very clear and very complete. Thank you so much.
The next question will come from Alonso Aramburú with BTG. Please go ahead.
Yes. Hi. Good morning. Thank you for the call. Just following up on your comments on loan growth in April that you are seeing acceleration. Just curious, where are you seeing that? Is it broad-based? Are you referring more to your consumer and credit card book? And what is driving that? Is it more appetite from the bank, or is it normalization of liquidity, or maybe a combination of the two? And then a second question regarding your acquisition of Infinance XP. Just curious, I know it is only a month since the acquisition, but if you can provide some comments on the initial reaction to the app from the public — how is the launch going? Thank you.
Thank you, Alonso. On your first question, I think it is a combination of both. The money from the pension funds is starting to be used already, so demand is starting to come back into the system. We are seeing growth in consumer financing, particularly in our small business segment. For us, that is more driven by the fact that we are building a value proposition and going out to look for clients given the low market share we have there. In commercial banking, the activity is mixed and seasonal. Let me hand it over to Carlos to complement this part of the question, and then I will return to your question about SIP and Infinance XP.
Thank you, Luis Felipe. Hi Alonso — how are you? It is a mix. There is a little less excess liquidity, so we are seeing a combination of demand and appetite. As I have mentioned in prior calls, our value proposition has traction and we are seeing more transactions. Over the last few weeks, prepayment on credit cards is not as high, which gives you a little growth. We have also put in one or two models that target lower-risk segments which has allowed us to have a little more penetration without increasing risk too much. We have started to see some of that. So I would say it is about 50% appetite and 50% market-driven. We expect this to continue in the coming weeks and months. Commercial banking is as Felipe mentioned; Banca Negocios is doing well with good growth.
On the SIP app and the Infinance XP integration, Alonso, you are right: the launch is recent. The launch has been better than we expected in terms of traction. The new app consolidates financial products, payments and loyalty into one place and we had certain expectations when launching the new brand and solution. I can tell you it is surpassing those expectations. This is an early stage and a medium- to long-term opportunity that will require time and investment to reach its potential within retail. But the start has been successful and the traction is exceeding our expectations so far. Thank you.
The next question will come from Andres Soto with Santander. Please go ahead.
My question is regarding your digital strategy and it has two components. One, a philosophical one: I understand there is an app under Infinance which customers use at stores; you mentioned another app under EasyPay for SME customers; and then there is PLIN, which is used to interconnect with other banks. Is this by design? Are you planning to continue keeping those apps separate or is the plan at some point to migrate to an ecosystem where customers can cover all their financial needs in one place? The second part is operational: regarding investments, what point in the cycle are we in terms of digital investment? You reiterated your guidance for cost-to-income of 37%. Are you expecting additional pressure in 2027, or do you believe that your digital expenses can be absorbed under this efficiency ratio? Thank you very much.
Andres, thanks for the question. Philosophically, we design different solutions for different segments and needs. PLIN is a brand and a payments highway — not an app per se — that connects payment possibilities across customers and banks. SIP (Infinance XP) is a consumer finance and payments app developed in partnership with InRetail; it targets retail customers and has a distinct strategy and customer base. The small business app is targeted at merchants and integrates EasyPay and Interbank functionalities to serve those specific needs. We are building interoperability and APIs to provide services across these solutions, but for now they are separate because they serve different customer segments with distinct value propositions. Whether they will converge into a single app is not our plan right now; we are focused on integration and interoperability where appropriate. On investments, we expect continued pressure in technology, cybersecurity, GenAI and digital capabilities. Digital transformation is ongoing and customers' expectations are increasingly demanding. We plan to manage the cost-to-income ratio around 37% in the near term, which guides our investments. Over a longer horizon and with additional scale, we may target efficiencies below 35%, but that is a longer-term view.
If I may ask a follow-up on PLIN: once the Central Bank's UPI-like system is up and running, is there still a place for PLIN? What will be the use case for PLIN if it is primarily connecting with other banks?
There is space for PLIN. The Central Bank offering an additional rail will be complementary. We will need to see which rails are more efficient and better serve our purposes, but we do not see one completely replacing the other. Carlos, do you want to add on that?
I agree. PLIN is a highway, and technologically you can send funds through different rails today, including Visa Direct and the local clearinghouse. UPI will add a third rail. The Central Bank's rail will be an additional highway through which we can interact and add use cases. It will not necessarily replace existing rails; it will be complementary and likely expand use cases. The Central Bank's initiative is ambitious and will create new opportunities, and we will continue to assess our strategy as that emerges.
Understood. Thank you, Carlos and Luis Felipe. Congratulations on the results.
At this time, we will take the webcast questions. I will now turn the call over to Mr. Ivan Peill from Inspire Group. Thank you, operator.
What should we expect cost of risk for the banking business for the year? Were there any large recoveries in Q1 which led to lower provisions for the bank, or is this the normal run rate going forward?
Okay. I think we kind of answered this question throughout the call, but just to summarize: we did not have any specific one-timer recoveries this quarter. The system as a whole is behaving better on risk and Interbank benefited from that. The level of cost of risk for the year will depend on the speed at which our higher-yielding book builds. Our original budget was conservative relative to what we saw in the first quarter, and we expect cost of risk to marginally increase as the higher-yielding book grows, but we expect it to remain controlled.
There appear to be no further questions on the audio side. I would like to turn the floor back to Ms. Casassa for any closing remarks.
Okay. Thank you very much. Thank you again, everybody, for joining our call, and we will see each other again for the second quarter results. Stay safe. Bye.
This concludes today's conference call. You may now disconnect.