Credicorp Stock

Good morning, everyone. I would like to welcome you to the Credicorp Limited Third Quarter 2026 Conference Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Credicorp's website. Today's conference call is being recorded. [Operator Instructions]

Now it is my pleasure to turn the conference over to Credicorp's IRO, Milagros Cigüeñas. You may begin.

Thank you, and good morning, everyone. Speaking on today's call will be Gianfranco Ferrari, our Chief Executive Officer; and Ignacio Belaunde, our Chief Financial Officer. Participating in the Q&A session will also be Francesca Raffo, Chief Innovation Officer; Cesar Rios, Chief Risk Officer; Diego Cavero, Head of Universal Banking; Eduardo Montero, Head of Insurance and Pensions; and Rocio Benavides, CFO at Mibanco.

Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Gianfranco Ferrari will begin the call with remarks on recent macro and political environment, and a brief overview of our quarterly results, followed by Ignacio Belaunde, who will provide a more detailed analysis of key macroeconomic indicators, our financial performance and our outlook for full year 2026. Gianfranco, please go ahead.

Thank you, Milagros. Good morning, everyone, and thank you for joining us today. Last quarter, I spoke about our growing confidence in Peru's medium-term outlook. Today, that confidence remains intact. Peru continues to show a strong economic momentum. Domestic demand and private investment remains strong, while high copper prices continue to support exports and the country's external position. Business expectations and consumer confidence also remain positive. Our economists expect domestic demand to grow close to 6% this year and private investment close to 14%, even as El Niño weighs on some primary activities.

Importantly, the political transition has continued to evolve broadly in line with our expectations. The government has signaled continuity in macroeconomic policy and a focus on supporting private investment while taking steps to accelerate investment and expand the project pipeline. Peru also enters the coming months from a position of macroeconomic strength. International reserves are high, public demand -- public debt remains low and the country has a strong external position. These are important buffers as we prepare for the effects of El Niño.

In addition, the Ministry of Finance has announced a fiscal stimulus plan to mitigate the potential adverse economic impacts of El Niño. Since our last call, the expected intensity of event has increased. The latest official forecast indicate a high probability that the coastal El Niño will persist into 2027 with the greatest risk concentrated over the coming months, including heavier rainfall across parts of Peru's Northern and Central Coast and the potential drought conditions in Southern Peru associated with the global El Niño. We're taking this risk seriously.

Across Credicorp, we've been preparing early. We are closely monitoring the customers, sectors and regions most exposed and reinforcing our contingency plans across our physical and digital channels. We're also taking preventive actions in our credit portfolios, including moderating origination in consumer and SME segments where we see greater vulnerability. At the same time, we want to be there for our customers when they need us. Our responsibility is to manage risk with discipline while helping businesses and families navigate potential disruptions.

There is still uncertainty around the ultimate impact of El Niño. What we can control is how well we prepare and how quickly we respond. We believe the actions we're taking put us in a strong position to navigate the months ahead, protect portfolio quality and support our customers. Against this backdrop, the strong operating momentum we saw during the first half of the year continued into the third quarter.

Before discussing our results, I also want to invite you to our strategic update on November 17. We look forward to sharing how our integrated ecosystem and the capabilities we have built are translating into new opportunities and stronger growth, profitability and sustainable value creation across Credicorp. I hope many of you will join us.

We delivered another quarter of strong execution, generating a 19.9% return on equity, which keeps us on track toward our medium-term ROE of around 22%, supported by solid operating performance across our businesses and increasingly diversified sources of earnings. Growth momentum remains strong. Credit demand continued to expand across our main lending businesses, reflecting the strength of domestic activity and our ability to capture opportunities across customer segments.

Our profitability continues to benefit from disciplined execution and our structural funding advantage. Risk-adjusted NIM improved to 5.7%, supported by a favorable funding mix with low-cost deposits representing 62% of our funding base. At the same time, we remain focused on preserving portfolio quality and have incorporated our quarter-end assessment for El Niño-related risk into our provisioning. Our coverage ratio increased to 120.9%, reflecting our prudent approach to risk management. This discipline is particularly important as we prepare for the potential effect of El Niño, balancing growth opportunities with preventive measures in more vulnerable segments.

We also continue to make progress in building a more scalable and diversified business. Our efficiency ratio improved to 45.1%, while our innovation portfolio contributed 10.7% of risk-adjusted revenues, surpassing our 10% ambition. These results reinforce our confidence that the capabilities we have built are increasingly translating into stronger operating performance and sustainable profitability.

Overall, we are pleased with our performance this quarter and with the progress we continue to make across all of our businesses.

Ignacio will now take you through our results in greater detail.

Thank you, Gianfranco, and good morning, everyone. As Gianfranco mentioned, we delivered a 19.9% ROE this quarter with strong operating performance supported by accelerating loan growth, healthy underlying credit trends and robust revenues. Importantly, these results include additional provisions based on our assessment of El Niño risk at quarter end.

As I discuss the quarter highlights, I will focus on the year-over-year operating trends. Loans measured in quarter end balances rose 14.8%. This evolution was driven primarily by BCP, where growth was led by retail banking and secondarily by wholesale banking. Mibanco also contributed to loan growth, although to a lesser extent. The NPL ratio dropped to 3.9%, supported by enhanced origination quality and stronger collection capabilities. The cost of risk stood at 2% this quarter, reflecting both portfolio growth and our updated assessment of El Niño risk at quarter end.

Underlying cost of risk remained healthy at 1.6% this quarter. Net interest income increased 17.7% on the back of loan growth in higher-yielding segments. Against this backdrop, NIM stood at 6.9%. Other core income grew 18.8%. Fee income increased 20.4%, boosted by strong levels of transactional activity. Gains on FX transactions rose 14.3% through higher volumes at BCP, which rose in the context of higher volatility.

Lastly, the insurance underwriting results decreased, mainly reflecting a base effect from reserve releases recorded in the third quarter of last year in the Life business. Overall, the quarter demonstrates the resilience of our businesses, which are supported by a robust capital position and sound asset quality.

Next slide, please. Peru's economy maintained a solid momentum in the third quarter with GDP estimated to have grown by around 3.3% year-over-year. Domestic demand, which continued to be a key driver, expanded above 5%, supported by another quarter of double-digit growth in private investments. This strength helped offset lingering weaknesses in primary sectors, which continue to face El Niño-related disruptions. High frequency indicators continue to point to strong domestic activity while private investment expectations remain near historical highs.

The new administration has signaled its intention to streamline administrative procedures and facilitate the execution of major investment projects, particularly in mining and infrastructure. If successfully implemented, these measures would help extend the current investment cycle and support medium-term growth.

Next slide, please. In Peru, annual inflation rose to 5.3% in October, while core inflation, excluding transportation costs remained around 2%. The Central Bank is closely monitoring potential second round effects and El Niño-related pressures.

In Colombia, annual inflation stood at 6.3% in September, well above the Central Bank's target range. As a result, monetary policy has tightened with cumulative interest rate hikes reaching 300 basis points since December. Meanwhile, the new administration has adopted market-friendly stance but execution and its ability to strengthen fiscal credibility will be critical to sustaining investor confidence.

In Chile, the growth outlook has continued to weaken amid higher oil prices and weaker-than-expected copper production. Meanwhile, inflation stands at 4.5% year-over-year, while the Central Bank has kept its policy rate unchanged at 4.5%.

In Bolivia, the IMF approved in October a 3-year USD 1.9 billion program. This is also expected to catalyze around $4 billion in additional financing from other international financial institutions, supporting efforts to restore macroeconomic stability and sustainable growth.

Next slide, please. As Gianfranco mentioned, El Niño remains a transitory downside risk to the near-term outlook and the extent of its impact remains uncertain. We continue to monitor its evolution closely and incorporate new developments, including the recently announced fiscal stimulus plan into our outlook and our assessment of potential impacts on our businesses. Since our last earnings call, our base case shifted from a strong to a very strong El Niño scenario at quarter end. We adjusted our credit assessment and mitigation actions accordingly.

The Peruvian government has announced a temporary and targeted fiscal package of close to 1.5% of GDP to mitigate the impact of El Niño and other external shocks. The package includes cash transfers to vulnerable households, infrastructure and maintenance spending, credit guarantees for MYPEs to support new lending and loan rescheduling as well as temporary tax deferrals for affected businesses. With an annualized fiscal deficit of just 0.9% of GDP as of September, Peru has ample room for this response.

Based on our quarter end assessment, estimated direct exposure to potentially affected clients is approximately 8% of total loans. Importantly, we continue to see this as a concentrated rather than broad-based risk while underlying portfolio quality remains healthy. We believe we have been actively managing this risk ahead of its potential peak impact with a broad-based approach that includes close monitoring of exposed clients and sectors, early warning analytics, targeted underwriting adjustments and proactive client engagement. This allows us to identify vulnerabilities earlier and respond as conditions evolve.

Looking ahead, the outlook for El Niño is evolving from a very strong to potentially extreme scenario, while the ultimate economic impact will also depend on the effectiveness of mitigation measures, we remain confident that additional provisions required can be absorbed within our current guidance ranges. Overall, healthy portfolio quality, stronger risk capabilities and robust balance sheet provide significant capacity to absorb potential volatility while continuing to support our clients and deploy our strategy.

Next slide, please. BCP delivered a 27.7% ROE this quarter, underscored by accelerated loan growth, healthy underlying credit trends and strong transactional income. Profitability remained solid while incorporating additional provisions based on our assessment of El Niño risk at quarter end. From a quarter-over-quarter perspective, total loans grew 5.1% or 4.9% in FX-neutral terms. Retail loans fueled expansion, primarily through consumer loans and secondarily through SME-PYME working capital.

Wholesale loans also registered growth, which was primarily attributable to an uptick in corporate loans. NIM stood at 6.4% as the portfolio shifted towards higher-yielding retail segments, while the funding cost remained stable. Other core income rose 6.4%, driven by a 10.2% increase in fee income. Fee growth was supported by a seasonal pickup in transactions and stronger activity at Yape, reflecting higher engagement. To a lesser extent, BCP's integration of Culqi merchant payment fees also contributed as part of the efforts to bring the platform closer to our core banking franchise.

The NPL ratio fell to 3.7%. This result was driven by improvements across business segments on the back of fortified management capabilities. Underlying risk credit trends remained healthy. This quarter, we also recognized additional provisions based on our assessment of El Niño risk as of quarter end. By segment, underlying provisioning was mainly driven by portfolio growth in specific retail segments, particularly consumer and SME-Pyme, while higher-yielding products continue to perform within our expectations.

In this context, the cost of risk stood at 1.6%, while risk-adjusted NIM stood at 5.3%. On a year-over-year basis, total loans rose 14.6% and 15% in FX-neutral terms, led by retail banking and secondarily by wholesale banking. NIM rose 28 basis points, mainly driven by lower funding costs as low-cost deposits increased their share of total funding with a shift towards higher-yielding assets also contributing. The NPL ratio dropped 103 basis points, fueled primarily by the SME-Pyme and individual segments, which registered improvements in origination and collection capabilities.

Cost of risk rose 30 basis points, impacted by additional El Niño-related provisions. Underlying credit trends nevertheless remain healthy. Other core income rose 20.8%, driven mainly by growth in the fee income where strong transactional activity was channeled through Yape and other transactional products at BCP. Gains on FX transactions also contributed to this result, albeit to a lesser extent as transacted volumes rose significantly in a context marked by high volatility. As a result, the ratio of the core income to assets ticked upwards, reflecting growth in revenues from diversified streams.

Finally, operating expenses increased 15% year-over-year in the first 9 months of 2026, fueled by investments to support business growth and higher activity levels. Administrative expenses increased mainly due to IT-related services and cloud infrastructure, particularly at Yape as transactional volumes continue to scale. Personnel expenses also increased as we continue to strengthen technological and risk management capabilities, and secondarily, as variable compensation runs alongside strong performance across our businesses. In this context, the efficiency ratio stood at 38.8% for the first 9 months of the year.

Next slide, please. Moving on to Yape. Yape closed this quarter with 17 million monthly active users. Engagement continued to deepen with MAU completing an average of 71 transactions per month. This scale and engagement position Yape to deepen financial relationships and play a broader role in customers' lives. Monetization continued to advance and total risk-adjusted revenue was 1.8x the level recorded in the same quarter last year. Revenue per MAU reached PEN 11.9, while expenses per MAU remained relatively stable, standing at PEN 6.1. In this scenario, Yape's contribution to Credicorp risk-adjusted revenues increased to 9.8% this quarter.

Payments remains a significant source of revenue, supported by broader adoption of mature services such as QR payments, bill payments and checkout, complemented by a strong growth in emerging use cases such as remittances. Beyond payments, Yape is expanding its neobanking value proposition. Lending is an important part of this evolution and growth this quarter was driven primarily by multi-installment and SME loans. The total lending portfolio reached PEN 2.3 billion. Today, more than 6 million customers have at least once borrowed through Yape.

By leveraging our capabilities, we will continue to penetrate a broader market responsibly. The objective is to ensure that lending remains aligned with customers' repayment capacities and our risk appetite as we strive to maintain resilient risk-adjusted returns. At Yape, we continue to focus on transforming everyday engagement into deeper customer relationships as we expand service offerings, steer transactional activity towards profitable growth and capture operating leverage.

Next slide, please. Mibanco delivered a strong 20% ROE this quarter, evolving positively on the back of loan growth and disciplined risk management while incorporating additional El Niño-related provisions based on our quarter end assessment. We continue to bolster revenue diversification efforts to enhance the resilience and quality of earnings. On a quarter-over-quarter basis, loans measured in quarter end balances grew 5.8%, driving an upswing in loan disbursements, which hit an all-time high in September. Net interest income was boosted by strong loan growth, which was also partially offset by a slight increase in the cost of funding.

In this scenario, NIM rose 16 basis points to stand at 15.3%. The NPL ratio in turn continued to trend downward, dropping to 4.8%. Cost of risk rose and stood at 5.8%, reflecting additional El Niño-related provisions, while underlying credit performance remains healthy. Against this backdrop, risk-adjusted NIM stood at 10.7%. From a year-over-year perspective, loans were up 18.7%, driven by growth in smaller ticket loans. In this context, our NIM rose 29 basis points, fueled mainly by higher-yielding asset mix and supported by a drop in the funding costs, which fell alongside growth in low-cost deposit share of the mix.

Other income rose 40.1% this quarter, bolstered primarily by growth in insurance premiums, which rose on the back of a record-breaking quarter for loan disbursement and increase in sales of optional insurance policies. The cost of risk rose 64 basis points year-over-year, reflecting the same dynamics explained on a quarter-over-quarter basis. Operating expenses increased 9.1% year-over-year in the first 9 months of 2026, reflecting investments in digital and transactional capabilities alongside higher personnel expenses associated with business growth and improved performance. Strong operating income drove an improvement of more than 3 percentage points in the efficiency ratio, which reached 47.6% for the first 9 months of the year.

Mibanco Colombia maintained a strong momentum, delivering solid client growth while preserving disciplined risk management and improving commercial productivity. As a result, ROE reached 18.4% in the quarter.

Next slide, please. Grupo Pacífico delivered a solid 20.6% ROE this quarter on the back of strong commercial execution across businesses. On a year-over-year basis, net income for the quarter increased led by our Life business, the largest contributor to net income. Our Life business posted healthy returns, healthy growth this quarter, while annuities and individual life, supported by strong momentum in bancassurance and retail sales were the top contributors to growth. This performance was partially offset by lower results in the disability and survivorship line, which reflects the base effect associated with provision reversals in the third quarter of last year.

In the P&C business, net income fell, driven primarily by commercial lines and vehicles, where lower underwriting results were recorded. Our Corporate Health business posted higher net income for the quarter, supported by stronger premium production as the customer base expanded. Meanwhile, results in our Medical Services business remained relatively stable, supported by resilient commercial dynamics and disciplined cost management.

Next slide, please. Net income in our Investment Management and Advisory business was supported by resilient performance across our recurring businesses. ROE stood at 14.7%, normalizing after a particularly strong second quarter in capital markets, which benefited from heightened market volatility. From a year-over-year perspective, revenues increased, supported by solid performance across our recurring businesses. Capital markets led contributions primarily through the sales business and its corporate unit, which benefited from higher FX trading volumes.

Wealth management was the second largest driver of revenue this quarter, followed by asset management, both supported by growth in AUM. The positive evolution of revenues was largely offset by growth in operating expenses as increasing commercial activity and business drove growth personnel expenses higher alongside increased variable compensation. In this scenario, net income dropped 9%.

Next slide, please. Now I would like to examine the evolution of our consolidated balance sheet. Quarter-over-quarter, interest-earning assets remained relatively flat as loan growth was offset by a decline in cash and due from banks. This resulted in higher-yielding asset mix. On the liability side, total funding declined 1.6%, mainly reflecting the scheduled call of a BCP subordinated bond. The continued shift towards lower cost funding sources also reduced our reliance on Central Bank funding instruments.

On a year-over-year basis, interest-earning assets rose 10.8%, led by loan growth. As a result, the yield on interest-earning assets increased and stood at 8.8%. On the liability side, the increase in low-cost deposits drove a reduction in the funding cost, which stood at 2.2% for the quarter. In this context, NIM rose 36 basis points year-over-year to stand at 6.9% for the quarter.

Next slide, please. Moving on to portfolio quality. Asset quality continued to improve this quarter with an NPL ratio that dropped to 3.9%, supported by stronger origination, monitoring and collection capabilities. Provisioning this quarter incorporated additional provisioning following our assessment of El Niño risk as of quarter end. Underlying credit performance, nevertheless, remains healthy overall. In this context, cost of risk stood at 2% this quarter. Coverage strengthened further to 100.9% (sic) [ 120.9% ], which positions us to absorb potential volatility and focus on growth, mindful of targeted underwriting adjustments in this context. As conditions evolve, our expected credit loss estimates will continue to reflect the latest information.

Next slide, please. Core income grew 18% year-over-year on the back of diverse revenue streams with net interest income, fees and FX gains reporting double-digit expansion. Profitability metrics continue to strengthen year-over-year with risk-adjusted NIM standing at 5.7% this quarter, reflecting disciplined pricing, portfolio mix optimization and a solid underlying credit performance. The efficiency ratio for the first 9 months of the year decreased 26 basis points year-over-year and stood within guidance at 45.4%.

Operating expenses grew 13.6% year-over-year for the first 9 months of 2026, fueled primarily by core business at BCP and investments in our innovation portfolio. Growth in expenses in core businesses at BCP was driven mainly by ongoing investments in commercial, technological and risk management capabilities and secondarily by growth in variable compensation aligned with strong business performance. Expenses for our innovation portfolio rose 33% over the same period, supporting growth in transactional activity and revenues across these businesses.

Next slide, please. ROE reached 20.4% in the first 9 months of the year, supported by strong operating performance across our integrated business ecosystem and favorable economic conditions. Net income remained solid, underpinned by accelerating loan growth and healthy asset quality. Growth in our diversified revenue streams was driven by strong transactional activity as investments in digital capabilities fuel expansion in our transactional businesses.

Given the attractive opportunities we see to deploy capital to support profitable growth, we do not expect to declare an extraordinary dividend this year. We believe this is consistent with our disciplined capital allocation framework and our focus on maximizing long-term shareholder value.

Now I will move on to our guidance. Next slide, please. We maintain our expectation that Peru's GDP will grow around 3.5% in 2026, including the estimated impact of El Niño. Our outlook for loan growth measured in quarter end balances remains at around 12%, underpinned by strong momentum in retail banking at BCP and Mibanco. We expect the full year cost of risk to remain within guidance range through the year despite a likely increase in the last quarter as our loan book continues to expand and we incorporate available information related to El Niño risk into our model. Additionally, accelerating loan growth and the ongoing mix shift towards retail should help position NIM and risk-adjusted NIM at the higher end of the respective guidance ranges. This interest rate outlook remains positive for asset yields.

In the case of fee income, we expect high teens growth supported by strong transactional activity, ongoing momentum -- ongoing economic momentum and our strategy to strengthen principality. The efficiency ratio is expected to remain within guidance. Against this backdrop, we expect our performance trends will keep us on track to reaching our 2026 ROE guidance of around 19.5%. Looking beyond 2026, we reaffirm our medium-term ROE target of around 22%.

Now I would like to open the Q&A session.

[Operator Instructions] And the first question will be from Ernesto Gabilondo from Bank of America.

Congrats on your results. My first question will be on El Niño. So total exposure to El Niño is around 8% of the total loan portfolio. I believe in the past, you have provisioned around 10% of that 8% exposure. So do you expect to reach that level between the fourth quarter and the first quarter of next year? Just wanted to understand how much additional provisions you would be considering in total for El Niño? And how should we think about its creation during the next quarters?

This is Gianfranco. Thank you for the question. I'll ask Cesar to answer it.

Thank you for the question. Going through your information, you are considering 8% exposure that we mentioned around PEN 160 billion portfolio will lead to PEN 13 billion total exposure. But to cascade that to actually really impact the clients, you need to consider a panel considering geography, more specifically location, sector and risk sensibility. So with the figures that we have, we are not expecting to have 10% provision for El Niño for this amount.

The figures that we have at the end of the quarter are around PEN 500 million. It's PEN 100 million provision in the second quarter and around PEN 400 million this quarter. And we expect, as Ignacio mentioned, to constitute additional provisions this quarter, considering that the increase of the expected severity, but also the positive effects of the measures that have been announced by the government in October 22 and November 1.

Just to add, Ernesto, building on what Cesar mentioned is, we do expect to -- even though we may do more provisioning in the last quarter to end up within guidance.

Understood. And just again, to clarify the numbers. So you have already created like around PEN 200 million of provision, you expect to create more in the fourth quarter up to PEN 500 million. Can we expect these additional provisions to be recognized during the fourth quarter and the first quarter? Or do you think will end in the fourth quarter?

To clarify the figures. The second quarter, we made around PEN 100 million provision in the third quarter, about PEN 400 million additional provisions. Probably some -- this figure need to be explained a little bit more because the total impact that you see in the P&L is slightly below. But during this quarter, we released specific provisions for risk that doesn't materialize better performance of pilots, specific recoveries in wholesale, and a recovery for insurance coverage loans.

So the total impact in the P&L is less than this PEN 400 million, but the total amount is around PEN 500 million at the end of the third quarter. We expect to have additional provisions with the information that we have, not at the end of the third quarter, but today, we expect to be within guidance even without considering the positive impact of the measures announced by the government that we need to finally calibrate because at this point are very general in the description.

Perfect. And then just a second question on the political side. Just wanted to hear if you have any advances or proposals from the government on the economy, any potential reform or any regulatory issue on the pipeline?

So there are actually 2 answers to that question, Ernesto. The Congress -- you know that we're dual chamber now, but Congress didn't approve any executive powers so that the executive power could take or could make decisions in that sense. So in that line, nothing specifically. However, I just read in the newspaper today that yesterday, the Ministry of Finance announced that they're working on a set of specific legislation so as to fasten and improve the process of investment authorizations, mining projects and so on, but nothing specific as we speak really.

And the next question today will come from Tito Labarta from Goldman Sachs.

I think also following up on the question on El Niño. I understand that you'll be within the cost of risk guidance. But just to clarify because currently, you're running at 1.7% cost of risk. The guidance is between 1.7% to 2.1%. So if you're at 1.7%, then it's modest provisions, but if you're 2.1%, there could still be a lot more provisions. So I wasn't quite clear. I think you had mentioned that provisions should be higher in 4Q relative to 3Q.

Just really trying to get a sense of how much more is left to provision? And I understand there's some uncertainty regarding that, but it wasn't really clear how much more you still may need to provision. And along those lines, just, kind of, thinking about 2027, I know you have a long-term guidance of 22% ROE. But given the El Niño risk in the short term, is 2027, you're probably below that because of El Niño? Or just like any other impact on El Niño that could impact 2027 as we think about that as of now?

Go ahead, Cesar.

Yes. I will answer you based in 2 kind of things. The calculation of the provisions and the measures taken to control the risk. In terms of provision, yes, we expect to have more provisions during the fourth quarter. The end result, the most current information is to be within range and the range, as you mentioned, is between 1.7% and 2.1% is within range. And we expect to have covered the identifier risk with this level of provisions. We don't know if there are going to be additional information at the end of the year that will change this perspective. We are considering now a very severe scenario.

Now the anomaly in the temperature, we are considering the latest one to give you this information. The impact of El Niño is going to be also in the loan growth and the underlying quality of the general portfolio. But the direct impact should be captured with the provisions that we do during this year. As a reference in our expectation of GDP growth, we are considering around 0.9% impact this year of El Niño and around another 1% impact next year. So in our expectations, we are already considering a general slight deterioration in the credit quality and the loan growth, but not considering the direct exposure, but the general impact in the economy.

Tito, this is Gianfranco. Maybe complementing what Cesar mentioned. As you know, the provisioning under IFRS 9 is forward-looking. Therefore, the bulk of the provisions should be made this year. Maybe there might be some impact because -- next year, I mean, because of what you just mentioned of the uncertainty. But the bulk of the provisioning should be made this year.

Going to your ROE question -- sustainable ROE question, we do see the El Niño impact as a bump in the road really. The -- as I mentioned at the beginning of my speech, the whole macro environment, the private investment, private consumption and so on, we really believe that we have -- as a country, I mean, we have a lot of tailwinds. Obviously, the El Niño effect may have an impact this quarter, yes, fourth quarter and maybe the first half of this year as well as next year. But in the medium term, we do -- we reconfirm our vision of 22% sustainable ROE.

Okay, great. No, thanks, Gianfranco and Cesar. That's helpful. Yes, clearly, I think just the short-term impact that we're trying to figure out, but yes, long term definitely looks very good.

And the next question will be from Carlos Gomez-Lopez with HSBC.

It appears that, that line has just disconnected, perhaps taking them off mute. We'll move to our next question, and that is Yuri Fernandes with JPMorgan.

I have one regarding loan growth. We have been debating a lot provisions and El Niño, and thank you for clarifying the PEN 400 million. We were getting to a smaller amount on our estimates here. So good to know this was higher. But the growth has been very strong, right? And revenues, they also have been very strong. So my question is, can you keep this growth on Yape, on Mibanco and everything, given the higher level of uncertainty from El Niño? Or should we expect some slowdown? So just trying to get some more color on growth outlook ahead given the uncertainties.

Ignacio?

Thank you, Yuri. We do see a substantial -- this is Ignacio, by the way. We do see a substantial opportunity to grow lending over several years. although we do not necessarily assume that we are going to grow mid-teens every single year as Gianfranco and Cesar were mentioning, 2027 is a bump in the road. The actual pace actually will depend on demand and most importantly, whether we can generate attractive risk-adjusted returns on our path to growth. But essentially, we have 2 sources in that opportunity. The first is a stronger Peruvian economy supported by domestic demand and private investment. That has increased demand in credit in all segments that we service.

But second and very important is that Peru remains underpenetrated in credit and our investments in capabilities such as data, underwriting and more efficient distribution are allowing us to expand the number of customers we can serve profitably. So that allows us to reach new customers and to deepen existing relationships. We do not -- are going to grow for growth's sake. Our idea is that economic conditions, portfolio performance and risk-adjusted NIM will determine how quickly we can expand in that context.

Maybe Yuri is complementing Ignacio's answer, and this is a conversation we have had in the past. Bear in mind that basically, our loan book has been flattish over the last 5 years. And 2 main reasons -- 2 different reasons there. One of the retail portfolio was at some point in time after the COVID and the political turmoil we had, the quality of those portfolios deteriorated.

And the other one was because of the political situation, there was basically no private investment. Whereas nowadays, as I mentioned, private investment is growing at 14% this year, and that figure could be sustainable at least the next 2 or 3 years. And also consumer -- sorry, the consumer portfolios, the retail portfolios are much -- are performing much better.

Obviously, we have to be cautious because of El Niño. But again, this is a temporary issue. So overall, we do see the opportunity to keep growing at this pace or similar pace over the upcoming years. Sorry, just to finish, because I forgot that, is that if you see credit penetration today to GDP is lower than pre-COVID. So it is that we are, "recovering that level that we were as a country 5, 6 years ago."

Super clear, Gianfranco. So you have the room to go back to 2018 penetration, better commercial confidence, low leverage of consumer. So growth, even though 2027, as Ignacio mentioned, may be little bit more challenging, the outlook for the coming years is still good. If I may, just quickly on Yape, here, it's pretty good, the growth on APAC, way above cost to serve, like you're growing revenues 10% of the risk-adjusted revenue. So don't get me wrong here on my question, but we are starting to see a few metrics slowing down a little bit, and we know there are a limited number of Peruvians to use Yape. So number of users is slightly down. But what caught my attention was revenue generating TPV, growing only 0.5% quarter-over-quarter. What was this? Why was there a slowdown on the revenue-generating TPV for Yape?

We need to increase the birth rate in Peru to get more Yaperos. Yape, actually, as a follow, this is a joke. But as a matter of fact, I recently read that the level of penetration of digital wallets in Peru is the largest in the world compared to the population of that country. So yes, the number of Yaperos is not going to grow at a faster pace. I'll ask Francesca for the specific answer on the TPV, but we are really positive in terms of growth potential for Yape, and we may further discuss these issues next week on our Investor Day. But Francesca, complement me.

Yes. So the actual number of revenue-generating transactions, the growth at the transaction pace, as you mentioned, is slowing down just because the number of customers and the population. So that is the main reason why there's not that much growth there. Having said that, we've shared in the past that Yape has several monetization paths still to be developed. One is cross-border, which has to do with transactions, and we're working hard there.

Also on the loan portfolio side, where we are continuing to grow on the consumer segment and also on the MYPE segment, now, early on, on the MYPE segment. So I think on the Yape view, this is more on a neobank view and beginning to see not only the transaction fees, but also on the whole value proposition for the customer base. And we've shared that also that the number of users, we are continuing to not only look at transactions, but the number of features that customers are using. And that continues to grow at a healthy path, but slower than transactions.

Congrats again on very strong revenue quarter.

And the next question will be from Carlos-Gomez Lopez with HSBC.

And apologies, my line dropped before. I wanted to go back to the provisions for El Niño. And I know you are trying to clarify, but I was not very, very clear. So you have gross provisions, if I understand correctly, of PEN 400 million for El Niño, which are offset by a number of factors. You may want to go over them again, which is recoveries in wholesale recoveries in insurance and better performance from some pilots. Could you quantify that? What is the gross recovery that you have there that offsets the PEN 400 million more or less in El Niño provisions?

These special recoveries are around PEN 200 million.

Okay. So the net that we could call extraordinary this quarter would be around PEN 200 million?

That's correct. Yes. But I would like to emphasize that with that, you have adequate coverage for the PEN. The other are special releases for a specific very particular situations, a recovery in a wholesale, a recovery in mortgage portfolio. So the provision for El Niño totals around PEN 500 million.

The stock of provision around PEN 500 million. The impact on the P&L this quarter has been PEN 200 million.

Very good, very clear. And then for the fourth quarter, given the information that you have today, are those PEN 500 million enough? Or is it a reasonable expectation that you may go from PEN 500 million to, I believe I heard mentioned PEN 800 million before or something like that?

We expect to constitute additional provisions with the information that we have in the recent months. But the end result is that we are going to be within guidance that is between 1.7% and 2.1%.

That's very wide, right? Can you narrow a little bit?

Carlos, we cannot provide specific forward-looking figures. That's what we can provide. With the information we -- as Cesar mentioned before, with the information we have before -- so by September 30, we were quite...

sure that we covered.

The reasonable coverage. However, the data on El Niño is updated, I believe, every 15 days, something like that. We are recalculating the level of provisions needed because the recent data is that El Niño -- as a matter of fact, the temperature of the sea is higher today than it was in September 30 and things like that. So we do not have a specific figure to date. So beyond not being able to provide forward-looking data, we are still working on that. So some impact is going to have still this quarter.

Okay. And the 1.7% to 2.1%, that includes all provisions, including El Niño?

Excuse me?

The 1.7% to 2.1%...

Yes, the guidance is from the whole book.

The next question is from Renato Meloni from Autonomous Research.

So first on provisions, just to clarify something. My understanding from your comments is that the buildup in provisions for El Niño are mostly on the -- are all on the wholesale and commercial book. So I'm wondering if you factor in some second order effects on the consumer side or if this is something that naturally comes up in your expected loss models and then provisions there adjust or if we might see some effect there? And then within this context, do you think that you can still grow at the current level, like there was a decent acceleration in consumer lending this quarter. So do you think you can still grow at that pace over the next couple of quarters?

Renato, I think it's important to clarify the most important impact in provisions come from the retail portfolio of BCP, individuals, PYME and Mibanco. And we have, as we previously mentioned, a model that quantifies the potential impact, the sensitivity of the client, the geography and the sector in which the client operates and most of the impact come from the retail segment. The mention to the wholesale was differently, that in the third quarter, we released provisions because we have specific payments of clients already provision that they have put in fulfilled the obligations, 2 different factors.

Regarding the growth question, as we mentioned before, Renato, we cannot be too specific on the quarters because, again, the next couple of quarters or this quarter and next quarter are going to be affected directly by El Niño. Having a longer-term vision is what we expect the portfolio to grow at double digits.

Yes, that's understood. And if we can stay in this point a little bit. So you've been -- I mean, there's the increase in penetration, like the segment is growing broadly for the industry, but you've also been gaining share, right? Do you think you can still continue to gain share? Do you see a limitation there, you might converge to industry levels?

Yes. The short answer is yes. However, we do see the most relevant -- more relevant than gaining share is first that the economy is performing quite well. And as you mentioned, penetration is at lower levels than it was around 5, 6 years ago. And on top of that, we're creating markets really or expanding markets. So basically through Yape. So I would say those 2 are much more relevant than gaining market share.

The next question will be from Andres Soto from Santander.

I have a couple of questions here. The first one is regarding your loan growth. Gianfranco, you have mentioned in the past, the impact of El Niño in 2027 is via loan growth more than on provisions, assuming that you already made enough of them in 2026. When we think about loan growth for Credicorp next year, can we assume that the area that is exposed to El Niño, which you mentioned, is 8% of the portfolio. That's the one that is going to be hit by lower loan growth. But for the remaining of the portfolio, the 90-plus percent -- 90% plus, sorry, you may expect continued loan growth based on the drivers that you described before?

Andres, this is Ignacio. That's exactly right. What we expect is that outside of that share of the portfolio that would be directly impacted, we have ample room to grow. What we will be looking towards growth in 2027, and we monitor very closely is the returns and the credit capacity of our customers within that context. That being said, we also think other segments are continuing to be growing considering the current macroeconomic context of Peru.

And then a question on provisions. But now thinking about El Niño compared to this event with the one in 2023, the El Niño that didn't happen, I will call it that way. Obviously, the cycle was very different back then. But when you look at the provisions that you guys made, it represented 70 bps of the annual cost of risk on that year. And it looks like on the upper end of your guidance, this is what you are including here as the worst-case scenario. What I would like to understand is for that 70 bps in 2023, what was the portion of the portfolio that you were covering or what makes that different from the scenario that we are seeing today, assuming that this is on the flip side, a worse El Niño based on the current assessment?

Thank you for the question. I wouldn't take the 2023 as a reference point because this situation is different. Our tools are different. The underlying situation of the country is significantly different. We were in 2023 in a weakness situation that we are in a position of strength. So for the actual calculations, we have considered all these tools. And the other thing that I would like to probably emphasize is not only the calculation of the provisions, but the measures that we have taken to reduce and to manage the risk.

For example, in wholesale banking, we are managing specific exposures, extending maturities, taking additional coverage. In retail banking, we selectively have identified clients that need support. In other cases, we have reducing origination in specific areas to reduce through the last quarters, the expected losses. So of course, we consider the last Ninos as a reference, but more in terms of geographical impact that in terms of direct impact in the specific portfolio due to these differences.

And also, if you go back to 2023, you should also see what happened with provisions on 2024 because recall that, yes, again, this is a forward-looking methodology. So in the end, 2023, we "over-provisioned," because of the data we had at that time. So this is a balancing act really.

And the next question is from Marcelo Mizrahi from Bradesco BBI. Please go ahead. Marcelo, your line is open. Perhaps your line is muted. Marcelo, we are still unable to hear you.

Alright, we will move to the next question, which will come from Sam Roy with Nexa. Sam, you have the floor. Mr. Roy, your line is open. Are you there?

All right, we will move to Alonso Aramburú from BTG. Please go ahead.

So one more on provisions. It looks like your recurring cost of risk is around 1.5%, 1.6%. Maybe if you can give us some direction as to where do you see that moving, excluding the El Niño provisions? And second, can you give us an update on what's happening with Eo and Tenpo?

This is Ignacio. Yes. So as I mentioned, our current underlying cost of risk for the overall portfolio is sitting at around 1.6%, excluding all onetime or extraordinary effects due to El Niño and other reversals that Cesar has commented in detail. And that is consistent with the second quarter, while at the same time, we have expanded our risk-adjusted NIM, excluding the extraordinaries from around 5.7% in the second quarter to 5.9% in the third quarter.

So all in all, we are very comfortable with how this is trending in terms of the profitability. Of course, as we move forward into increasing our share of the retail mix in these new capabilities, we anticipate that cost of risk could go up in the following years. However, that is translating also into a better risk-adjusted NIM and one of the key drivers of our medium-term ROE guidance of around 22%.

Francesca, could you answer the Eo and Tenpo questions, please?

Yes. So around Tenpo, we're very proud that we are processing transactions now as a bank. We're beginning the process with Chile on time. We still have until the end of January to finish the whole thing. And the number of active customers around the credit card business continues to grow, not at the pace we expected. We were more on being a bank and trying to complete all the regulatory pieces. But now that, that is done, we will continue the path to growth. And I would like to share that the percentage in terms of market share for credit card is a little over 1% and on the deposit side, a little over that, closer to 2%.

So with beginning of presence being #9 or #10 in the Chilean market. So that's an interesting path. And also, we've shared that we are going to be changing management by next year, also very, very coherent to what we are trying to achieve in terms of growth and a path to monetize faster. On the Eop, growth is also constant. We're close to a portfolio of 100,000 credit card customers. And we're very satisfied with the number of the activity, the level of constructing the loan book for revolving and also the NPS level. And as you know, we created the neobank path, which is Yape and Eo together to share technology, and we'll hear more of that in the strategic update. To actually create a value proposition that is more robust, not only around payments and lending, but also on a neobank perspective.

And ladies and gentlemen, this concludes today's question-and-answer session. I will now turn the call back over to Mr. Gianfranco Ferrari, Chief Executive Officer, for closing remarks.

Thank you for your questions. As we look ahead, I remain very confident in both Credicorp and Peru. Peru has enormous potential when investment growth, businesses expand and confidence improves, will create more opportunities for Peruvians. But realizing that potential requires us to continue investing, improving productivity and building the capabilities that will allow the country to grow over the long term.

As a country's lean financial group, we have an important role to play in that process, helping people and businesses progress, expanding access to financial services and investing in capabilities that can contribute to Peru's development for many years to come. That responsibility is particularly important as we prepare for the potential impact of El Niño. We recognize the challenges it may bring to families, businesses and communities. We have taken preventive measures across our operations and credit portfolios, and we stand ready to support our customers through potential disruptions. Our priority is to navigate this period with prudence while continuing to be there for those who depend on us.

Our results this quarter reinforce our confidence in Credicorp's ability to deliver on that responsibility while generating sustainable returns with a medium-term ROE of around 22%. We continue to see the benefits of the investments we have made, the strength of our diversified business model and our disciplined approach to execution. That is also the context for our strategic update next week.

We have built a stronger, more innovative Credicorp, and we're entering a new phase in which we expect to translate those capabilities into deeper customer relationships, new avenues for growth, greater operating leverage and sustainable value for our shareholders. There will always be uncertainty. What matters is our ability to make good decisions, adapt and continue building opportunities. We have done that through Credicorp's history, and I am confident in our ability to continue doing so. I look forward to sharing more with you next week. Thank you again for joining us today.

Thank you, sir. And thank you, ladies and gentlemen, for attending today's call. This concludes today's event. You may now disconnect your lines. Take care.

Good morning, everyone. I would like to welcome you to the Credicorp Limited Second Quarter 2026 Conference Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Credit Corp's website. Today's conference call is being recorded. [Operator Instructions]. Now it is my pleasure to turn the conference over to Credicorp's IRO, Milagros Cigüeñas. You may begin.

Thank you, and good morning, everyone. Speaking on today's call will be Gianfranco Ferrari, our Chief Executive Officer; and Alejandro Perez-Reyes, our Chief Financial Officer. Participating in the Q&A session will also be Francesca Raffo, Chief Innovation Officer; Cesar Rios, Chief Risk Officer; Diego Cavero, Head of Universal Banking; Eduardo Montero, Head of Insurance and Pensions; and [indiscernible].

Before we proceed, I would like to make the following sort safe harbor statements. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, and I refer you to the forward-looking statements section in our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Gianfranco Ferrari will begin the call with remarks on the current operating environment, credit of strategic priorities and the key drivers underpinning our confidence in achieving a medium-term ROE of around 2%. He will also highlight our strong performance this quarter. Alejandro Perez-Reyes will then review our financial performance in ready and discuss our outlook for Gianfranco, please go ahead.

Thank you, Milagros. Good morning, everyone, and thank you for joining us today. Before reviewing our quarterly performance, I would like to begin by showing why we have greater confidence in there's medium-term outlook and what this means for Credicorp. We believe Peru is entering a more favorable environment for growth. This confidence is grounded first in the continued improvement of the country's underlying economic fundamentals.

Private investment, domestic demand, favorable commodity prices and business confidence, we're already gaining momentum before the recent election. The political transition could help reinforce this momentum. Greater visibility around the public agenda and less submitted congress and continued commitment to produce sound macroeconomic framework and private investments with further support contracts. Everything notes of policy continuity and discipline, including the formation of a new and solid technical team at the Ministry of Economy and Finance and continuity at the Central Bank are encouraging and consistent with a more predictable economic environment. Data supports this view.

Business confidence has recovered to its highest level in years. Private investment is growing by approximately 13% year-over-year and domestic demand by more than 5%. Peru also continues to benefit from exceptional favorable commodity prices, with gold prices having roughly doubled since 2033 and copper prices increasing nearly 60%. Together, these factors are strengthening investment, trading demand and economic activity, providing a solid foundation for a stronger medium-term growth. The principal near-term risk to this outlook is [indiscernible].

While we recognize its potential impact on families, communities and small businesses, we continue to view it as a temporary and manageable shop rather than a structural cage in Peru's growth trajectory. At [ Tencor ], we are prepared to support our clients and communities through this period. leveraging our ecosystem, distribution channels and digital capabilities to help them anticipate and manage potential disruptions. Alejandro will provide more details on expected financial impact and how we're incorporating currently available information related to a minor risk into our financial outlook.

Importantly, based on the information currently available, [indiscernible] does not alter our power confidence in Peru's medium-term outlook prorability to continue delivering sustainable growth. Across the region, the outlook remains mixed as consulting over the medium term. In Chile, while near-term activities have been softer than expected the investment type elevated copper prices and policies aimed at encouraging investment support a better outlook. In Colombia, despite ongoing challenges and the terrible impact of the recent earthquake market sentiment has improved following recent political development reflected in a stronger currency and lower sovereign yields.

Overall, the improving operating environment reinforces our confidence in Credicorp's long-term outlook. Against this backdrop, we delivered a strong second quarter with solid performance across our businesses and continued progress against our strategic priorities. Let me now walk you through the key results. We delivered another quarter of strong execution, reporting a 20.3% ROE, reflecting the strength of our diversified business model and solid performance across our core businesses.

Operational momentum remained robust across the franchise. Our innovation portfolio contributed 9.9% of credit cost risk-adjusted revenue, keeping us firmly on track to our strategic objectives while demonstrating that [indiscernible] is becoming an increasing in meaningful contributor to our earnings profile. We're also seeing fresh demand continue to strengthen. Loan growth accelerated across our main lending businesses, supported by both retail and Wholesale Banking and BCP as well as [indiscernible].

Our profitability continues to benefit from disciplined execution. Risk-adjusted NIM stood at 5.5%, supported by our low-cost funding advantage, healthy pool mix and digital life. Our strong capital position and disciplined risk management continue to provide resilience. We're actively monitoring nears reinforcing our ability to support clients while maintaining a sound risk profile. At the same time, we remain focused on building the business for the long term.

Our efficiency ratio stood at 45.4%, while investments in innovation and digital capabilities continue to broaden our revenue base. deepened customer engagement, foster financial inclusion and support most scalable growth. As we have discussed in recent quarters, our premium medium-term ROE expectation of around 19.5% have become increasingly conservative as our performance strengthened and the underlying economics of our business continued to improve. We created across our key markets and earning drivers we believe the right -- the time is right to update our medium-term ROE expectations.

We now believe Credicorp has the capacity to deliver a medium-term return on equity of approximately 22%. This reflects a more favorable operating environment, but more importantly, the structural transformation of our ecosystem. Over the past several years, we've strengthened the drivers of our earnings. Improving the quality of our loan portfolio, enhancing risk management capabilities, reinforcing our structural funding advantage and diversifying our sources of revenue.

At the same time, we have invested consistency in technology, data and talent, creating a more scalable and efficient business model. Innovation is an increasingly important part of the transformation. It is expanding financial inclusion and deepening customer relationships while becoming a more meaningful contributor to growth, any diversification and long-term resilience. Together, these structural improvements position us to deliver stronger and more sustainable profitability across economic cycles.

We look forward to sharing more information about our innovation strategy is becoming an increasingly important driver of growth and value creation across Credicorp at our visual strategic update on November 17.

Now let me turn the call over to Alejandro.

Thank you, Gianfranco, and good morning, everyone. As Jan Franco mentioned, we delivered a 20.3% ROE this quarter supported by strong operating performance, accelerated loan growth and higher risk-adjusted revenues across our diversified business ecosystem. I discuss the quarter's highlights, I will focus on the year-over-year operating trends. Loans measured in quarter end balances increased 13.1%. This uptick was driven primarily by BCP through both retail and wholesale banking and by Miba. Asset quality improved further with credit cards NPL ratio declining to 4.1% for the quarter, supported by better origination quality and enhanced collections capabilities.

The cost of risk stood at 1.9% and reflecting portfolio growth within our risk appetite and an impact of 27 basis points due to near-related provisions based on currently available information. Net interest income increased 13.3% in mainly driven by lower interest expenses, supported by our low-cost funding structure and by a higher yield in loan mix. Against this backdrop, NIM stood at 6.6%. Other core income grew 19.7%. Fee income increased 15.9%, boosted by transactional activity at Japan BCP.

Gains on FX transactions rose 29.8% through higher volumes at BCP, which rose in context of a higher volatility in the comparative Lasting results decreased, mainly reflecting a base effect from provision reversals recorded in the second quarter of last year in the life business. Our diversified business portfolio strong capital position and healthy asset quality puts us in good stead to navigate potential El Nino impacts as we continue to execute our strategic priorities. Next slide, please.

[indiscernible] economy remained resilient in the second quarter of the year with GDP estimated to have grown by around 3% year-over-year. Robust domestic demand supported by historically high terms of trade employment gains and ongoing business cycle momentum helped offset a sharp contraction in primary activity. Primary GDP is estimated to have fallen by nearly 5% year-over-year, marking its sites decline since 2014, excluding the pandemic. As El Nino related disruptions weighted on fishing, agriculture and primary manufacturing. Despite these headwinds, domestic demand is estimated to have expanded roughly 5% year-over-year, reporting the seventh consecutive quarter of strong growth.

High-frequency indicators continue to sign our broad-based and robust economic expansion with several indicators posting double-digit year-over-year growth. Private investment expectations have rebounded sharply following the residential deletion, reaching their highest level since the series began in 2013. [indiscernible] has confirmed full elates continuation as governor of the Central Bank and appointed Elmer cola, a respected macroeconomist and former Central Bank Director, a finance minister, reinforcing expectations of solid and predictable macroeconomic policy under the new administration.

Next slide, please. Under Chairman [indiscernible], the Federal Reserve has emphasizes commitment to price stability and in limited tolerance for persistently elevated inflation. Economies remain divided between expectations of additional rate hikes and an extended cost in monetary policy. In Peru, annual inflation remained around 4% year-over-year between April and July, its highest level since late 2023, driven primarily by higher local transportation costs. Core inflation, excluding transportation is still below 2%.

In Colombia, annual inflation is slightly to 6% year-over-year in July, down from 6.1% in June, marking the first moderation after 4 consecutive monthly increases. Inflation remains elevated, however, partly reflecting the significant minimum wage increase implemented at the beginning of the year. The Central Bank has responded by raising its policy rate by 275 basis points in December. Investor sentiment in turn has improved following the election of [indiscernible] elated. In this context, the peso has appreciated sharply, making its strongest showing against the U.S. dollar since 2019.

In Chile, higher oil prices and weaker than expected mining production have weighted on the economic outlook this year. Annual inflation is 3.5% year-over-year in July after reaching its highest level in 9 months in June. While the Central Bank has kept the policy rate unchanged at 4.5%. In June 2026, Bolivia transitioned to a market-based FX framework, replacing its long and intake. We do not anticipate a material impact on Credicorp given that we incorporated market exchange rate dynamics in Bolivia in our reporting of the first quarter of last year.

In parallel, the IMF and authorities reached a staff level agreement on a new program of about $1.9 billion to support the country's economic reform program. Although uncertainty persists around oil prices, geopolitical developments in the Middle East and the potential impact of aluminum during the remainder of the year, as Gianfranco mentioned, we believe that improvements in the regional operating environment supports our confidence in a more favorable medium-term outlook.

Next slide, please. Before moving on, I would like to address a El Nino risk in Peru, a key topic for investors, assessing our earnings, asset quality and capital generation resilience. El Nino is a transitory event that periodically affects. While it may create short-term volatility, it does not alter our long-term view of the trivia economy or its underlying strength. So far in 2026, El Nino [indiscernible] has mainly affected Peru fishing, agriculture and related activities in the North, while the broader economy has remained resilient.

The strongest impact would likely materialize in the first quarter of next year is the event intensified or converged with the global engineered scenario. From a macro perspective, we estimate 2027 GDP growth to remain resilient around 3% under a moderate strong line scenario, while an extraordinary event could lead to a more pronounced slowdown. Importantly, Peru is entering this period with stronger fundamentals and higher liquidity across the financial system than in prior is. For Credicorp, estimated direct exposure to potentially affected clients is approximately 9% of total loans. While visibility should improve towards the last quarter of this year, we are already incorporating the currently available information related to a linear risk, resulting in additional provisions starting in June. Under the scenario currently assessed, we expect full year 2026 cost of risk to remain within guidance.

Looking towards 2027, a more severe event put moderate loan growth and fee income through downward pressures on activity. However, we are better prepared than in previous similar events, supported by lower direct exposure, early mitigation, a stronger risk management and analytics and healthier portfolio quality. More broadly, this is not a new risk for us. We have a robust governance framework and mitigation playbook supported by enhanced data and digital capabilities. This helps us identify burner our clients earlier, communicate at scale and deploy target deductions faster.

In short, we are approaching this scenario from a position of strength. Portfolio quality remains healthy. Our balance sheet is strong, and we are confident in our ability to manage potential revenue impact while supporting clients, communities and the broader Peruvian economy and preserving profitability. Next slide, please. This quarter, BCP's profitability remains strong with a favorable economic batter Loan growth continues to accelerate as underlying credit risk trends remain positive. In parallel, currently available information related to a linear risk has been incorporated into provisions.

In this context, ROE stood at 29.2%. From a quarter-over-quarter perspective, total loans rose 4.7%. In FX-neutral terms, loan growth stood at 5.5%. The Retail loans led the expansion bolstered by performance in the consumer and SME PM segment. Additionally, wholesale loans rose primarily on the lack of long-term loans as the outlook for private investment continued to improve. NIM stood at 6.1% as the loan portfolio shifted to a higher yield mix, while funding costs remained stable. The NPL ratio fell to 3.9%. This result was driven by improvements across business segments where the NPL ratio fell on the back of 45% is management capabilities. The cost of risk rose to 1.4%, reflecting the normalization of underlying cost of risk and additional mine related provisions.

Underlying provisioning was mainly driven by portfolio growth in specific retail segments, particularly consumer and SME Tim, where higher yielding products continue to perform within our expectations. As a result, BCP's risk-adjusted NIM stood at 5.2%. On a year-over-year basis, total loans rose 10.9% and 12.2% in FX inflow terms, led by retail banking and secondarily by wholesale banking through the same factors mentioned in the quarter-over-quarter analysis. NIM rose 12 basis points, mainly driven by funding cost improvement alongside an increase in low-cost deposit share of total tau. The NPL ratio dropped 93 basis points, fueled mainly by the SME team and individual segments, mostly driven by better origination and enhanced collection capabilities.

Cost of risk rose 25 basis points, mainly as a result of higher loan volumes rather than a deceleration in underlying patents. [indiscernible] income rose 15.4% and driven mainly by fee income, strong transactional activity was channeled through [indiscernible] and BCP. Gains on FX transactions also contributed to this result, albeit to a lesser extent, transacted volumes rose significantly in a context marked by high volatility. As a result, the ratio of other core income to assets remain strong, supported by our diversified industries.

Finally, operating expenses, which are better explained on an accumulated basis, rose for 14.9% year-to-date due to an uptick in both administrative and personnel expenses. Administrative expenses rose on the back of growth in IT-related services and use of cloud infrastructure. Personnel expenses rose driven by the continued development of commercial technological capabilities and by an uptick in variable compensation. In this context, the efficiency ratio stood at 38.6% for the first half of the year.

Next slide, please. Yape continues to strengthen its position of Peru's leading digital ecosystem. The platform remains highly engaged with more than 15 million [indiscernible] users transacting 69 per month and maintaining an NPS of $78 million. Customer engagement remains exceptionally strong, and we continue to see that translate into stronger unit economics. Revenue per mile reached 11.1, outpacing growth in expenses per month, which stood at -- as a result, APE contribution to Credicorp's risk-adjusted revenues increased to 8.9%, reinforcing its growing relevance within the group.

At the same time, continues to expand its financial services footprint. Loans reached PLN 1.8 billion, up 4x year-over-year, while the number of clients receiving loan disbursements increased to $5.6 million. With loan penetration at around 1/3 of monthly active users, we continue to see significant opportunities to further expand lending adoption, increase customer lifetime value and deepen financial inclusion across Peru.

As Yape scales, the composition of Yape revenues continues to evolve. Lending further increases contribution to 28%, while payment contribution stood at 45%. Moreover, revenue-generating payment transactions grew 42% year-over-year, continuing to strengthen Gas' ability to generate data, enhance customer engagement and unlock cross-selling opportunities across CrediCorp as strong engagement, improving monetization and significant headroom for deeper product and service adoption position the platform to sustain scalable, profitable growth.

Next slide, please. EAA continues to strengthen its trace, combining healthy growth with disciplined risk management. At the same time, we continue fostering revenue diversification to enhance the resilience and quality of earnings. This strong execution translated into a quarterly ROE of 22.9%. On a quarter-over-quarter basis, loans measured in quarter end balances grew 4.4%. The supported by continued growth in low-ticket loans, the main driver of recent quarters and a greater focus on higher ticket segments where larger loan sizes accelerated volume growth.

In this context, the NPL ratio continued its downward trend, reaching a record low of 4.8%. The average yield on interest saving assets maintained an upward trend offsetting a slight uptick in the cost of filing. As a result, NIM rose 23 basis points to stand at 15.2%. The cost of risk rose 30 basis points and stood at 5.1%, reflecting higher underlying provisions and additional aluminum-related provisions. Provisioning for underlying credit risk growth driven primarily by portfolio growth within our risk appetite and to a lesser extent, a slight increase in rigs. Risk-adjusted NIM stood at 11.2%, down 5 basis points.

From a year-over-year perspective, loans rose 15%, supported by improved productivity amid a dynamic economy. In this context, our portfolio's margin increased despite a slight uptick in the cost of fund. As a result, NIM rose 78 basis points. The cost of risk fell 24 basis points on the back of lower risk vintages. Despite ongoing investments in the strategic initiatives to fuel digital transformation and modernize technology, the efficiency ratio for the first half of the year dropped 4 percentage points to stand at 4%. Mibanco Colombia continued to deliver strong results with double-digit loan growth, disciplined risk management and enhanced commercial productivity.

As a result, ROE reached 18.5% for the quarter. Next slide, please. Grupo Pacifico delivered solid results this quarter on the back of strong commercial execution across all businesses. In this context, ROE stood at 19.1% at quarter end. Net income remained relatively flat year-over-year. Pacifico continues to deliver solid profitability led by our Life business, the largest contributor to Medico. Our life business posted healthy organic growth this quarter driven by strong momentum in bancassurance and retail sales. Nevertheless, net income reported lower results due to a base effect associated with provision reversals in the disability and survivorship line in the second quarter of last year.

In the P&C business, net income fell driven primarily by lower underwriting results, which raised the higher claims. Our Corporate Health business posted higher net income for the quarter, supported by stronger premium production as the customer base expanded. Meanwhile, results in our medical services business remained relatively stable, supported by resilient commercial dynamics and disciplined cost management.

Next slide, please. Profitability in our investment management and advisory business strengthened significantly this quarter. Sustained growth in recurring businesses, coupled with an uptick in trading contribution due to temporary market volatility drove a strong ROE of 23.5%. From a year-over-year perspective, revenues increased, supported by solid performance across our recurring business. Asset Management and Wealth Management contributed positively with AUM up 44% and 30%, respectively.

The capital market line also contributed significantly to results where heightened market volatility and increased activity among corporate clients created favorable conditions to boost trading and client as Higher revenues were partially offset by an increase in operating expenses, where the uptick was driven by a comparatively low base in the first half of 2025. As a result, net income increased 47% year-over-year.

Next slide, please. Now I'd like to examine the evolution of our consolidated balance sheet. Sequentially, interest earning assets grew 1.8%, driven primarily by loan growth at BCP and to a lesser extent, by higher investment balances as we capitalize from practical opportunities by leveraging our cash position. On the liability side, the 3.5% funding increase was driven by growth in demand and time deposits and an uptick in the balance of Central Bank funding instruments. On a year-over-year basis, interest selling assets rose 12.2% led by loan growth at BCP and Milan. The impact of this shift in the asset mix offset the impact of decreasing interest rates. Keeping the yield on interest-earning assets stable at 8.4%. On the liability side, lower interest rates and an increase in the share of low cost deposits drove a 29 basis point decline in the funding cost which stood at 2.2% at quarter end. Against this backdrop, NIM was 6.6% for the quarter. Next slide, please.

Moving on to loan portfolio quality. Portfolio quality continues to evolve favorably this quarter as NPLs dropped to 4.1%, driven by improvements in origination, monitoring and collection it. Based on current available information, we registered approximately $106 million in additional provisions related to El Nino risk. This brought our reported cost of risk to 9%. Excluding this impact, cost of risk stood at 1.6%, primarily reflecting portfolio growth within our risk appetite. Underlying portfolio trends remain solid, supported by healthier vintages and enhanced risk capabilities.

As a result, coverage levels remain strong, reinforcing the balance sheet's ability to observe future volatility while preserving capacity to support growth. In this context, the NPL coverage ratio rose and stood at 117.3%. Next slide, please. Core income grew 15.1% year-over-year on the back of diverse revenue streams with net interest income, fees and FX pace reporting double-digit expansion. Profitability metrics continued to strengthen year-over-year with risk-adjusted NIM standing at 5.5% this quarter, reflecting disciplined pricing, portfolio mix optimization and solid underlying credit performance.

The efficiency ratio for the first half of the year stood within guidance of 45.6%. Operating expenses grew 13.5%, fueled primarily by core business and BCP and investments in our innovation portfolio. Growth in core expenses at BCP was due mainly by IT expenses for commercial and transactional capability development. Expenses for our innovation portfolio, which were led by [indiscernible] rose 33% and represented 84% of disruptive expenses for the world. Next slide, please. First half ROE reached 21.2%, supported by the strength of our integrated business ecosystem and ongoing improvement in economic conditions.

Net income remained robust, bolstered primarily by accelerated loan growth across key businesses. Loan expansion was achieved alongside prudent risk management and complemented by an increase in contributions from diversified revenue streams which rose on the back of market leading transactional and digital capabilities. Now I will move on to our guidance. Next slide, please. We continue to expect [indiscernible] to grow around 3.5% in 2026, including the estimated impact of I. We are raising our outlook for loan growth measured in quarter end balances to around 12%.

And reflecting stronger-than-expected momentum primarily in retail banking at BCP and [indiscernible]. The expected loan in shift towards retail, coupled with a more recent scenario, where interest rates are expected to remain higher for longer should support NIM and risk-adjusted NIM, which we expect to stand at the higher end of our guidance rate. As retail origination continues to expand and we incorporate currently available information related to a no risk we expect the cost of risk to increase in the second half of the year and to remain within our guidance range.

We are also raising our fee income outlook, now expecting high-teens growth supported by stronger transactional activity continued economic momentum and our strategy to strengthen principally. The efficiency ratio is expected to remain within guidance. We are reaffirming our cargoes ROE guidance of around 19.5% with a current bias to the upside, subject to how El Nino evolves. Our operating income came in ahead of our expectations. Visibility on the potential severity of El Nino remains limited. As new information becomes available, we will continue to reflect updated and a related provisions.

Looking ahead to the medium term, as Gianfranco mentioned earlier, we expect ROE to move structurally higher. This outlook is supported by stronger loan growth across our core businesses, higher yield or volume mix sustained funding advantage and increasing contributions from 3 based revenues. As our ecosystem made initiatives continue to scale, we expect to capture greater operating leverage while maintaining disciplined risk management and capital allocation.

Together, these drivers strengthen our ability to deliver a medium-term ROE of around 22%. Before we begin the Q&A and given that this will be my last conference call as Credicorp CFO. I would like to take a moment to thank all of you for your support, engagement and constructive dialogue throughout my [indiscernible]. Your questions [indiscernible] have helped us make us better, and I'm deep [indiscernible].

As I take on my new role leading [indiscernible] Microfinance business, I look forward to staying connected with many of you and sharing our progress and perspectives on the opportunities ahead. I would also like to wish Ignacio every success in role. Having worked closely with him for the last 2.5 years, I am confident he will do an outstanding job, and I know Credicorp will continue to benefit under his leadership and expertise. Now I would like to open the Q&A session.

[Operator Instructions]. The first question will come from Ernesto Gabilondo with Bank of America.

Thank you. Hi, good morning, Gianfranco, Alejandro, Ignacio, Cesar, Francesca and Milagros. Congrats on your second quarter results and in your conviction of reaching a medium-term ROE of 22% in the next years. And also very helpful the slide that you provided about El Nino, very, very careful.

So my question would be on loan growth. Congrats on returning to a double-digit loan growth, and I noted that you're expecting around 12% growth in this year. But having said that, how should we think about the loan growth breakdown by segment? Just to understand if you would be conservative in the risky portfolio or how comfortable you are to grow the portfolio under a potential strong amino.

Thank you, Ernesto, for your questions. Regarding El Nino, I will say that our approach has been both a comprehensive trying to address the different dimensions on the impact and also very granular at the same time. As Alejandro has highlighted we have identified the parts of the portfolio by segment, by geography per field of the client that has going to be more impacted under the scenarios that we have contemplated. And we are adjusting and going to adjust gradually the appetite in this segment very heroically. So our impact is going to be related to this part of the portfolio, depending on the severity. But in the rest of the country, economic growth, our ambition and expectations remains strong.

[indiscernible] complementing Cesar's comments are -- actually, the question has like it's a twofold answer. One is specifically on amino we cease answered I would only add there that we're also trying to be proactive in helping our clients to be more prepared for the impact by industry, by region, really as [indiscernible]. But the other answer is more -- a longer-term answer is, as we mentioned along the presentation, business confidence is record levels. Traffic investments have been growing at double digits.

Private consumption has been growing at over 5% over the last, I think, 6 quarters already. And well, commodity prices are where they are and so on. So yes, no is, I would say, like a hiccup in terms of potential negative impact. But in a more longer-term vision, we are very confident that the macro environment is very, very positive.

This is Alejandro. Maybe just to add one more important data point to Gianfranco's comment is the loan penetration. I think I mentioned this some time before, but if you take constant exchange rate of December of 2025. At the end of last quarter, the penetration of loans in Peru fell 34%. In 2019, it was 42% to GDP. So I mean there's still an opportunity even to go back numbers that we've already seen. So we think the opportunity is big. And if we add to that the capabilities that we have developed, we are really confident in the midterm loan growth regardless of the hiccup that might come from the short term.

No, perfect. Very helpful. And just a follow-up on all these in terms of the trend for example, wholesale and retail, should we expect in both loan portfolios to be at the double digit because of what you were mentioning private investment, primary consumption, commodities prices, all that should be helping. And in that scenario, very, very granular in what could be exposed related to El Nino. So how should we think about the loan growth for both segments, double-digit for Bolt? Or how are you thinking about it?

Yes. We are expecting -- I mean, again, without considering the hiccup coming from El Nino, we are expecting double-digit loan growth for both wholesale and retail. Retail has been already showing it. And as we were mentioning, wholesale is picking up again. We did very high expectations from private investments. So yes, the short answer is yes, both portfolios should grow double digit.

The next question will come from Brian Flores with Citibank.

Good morning. Congratulations on the results and best of luck to Alejandro and Ignacio on the respective roles. I have a question on asset quality. The cost of risk seems to be very, very controlled despite the fast growth you're showing, right, across the board in SMEs, in AP, in consumer. So we wanted to understand strategically if we, as analysts, do you think we're I don't know, maybe underestimating how much better your underwriting is or the collection have improved because -- or do you think this is more extraordinary regarding the extraordinary liquidity in the system, the good conditions from the macro. I just wanted to understand how much do you think this is idiosyncratic and how much could this be more of a tailwind from the macro side?

Yes. Thank you, Brian, for the question. I think without that, the positive economic environment is a significant factor. But as we have mentioned previously, we have been working very discipline in several parts of the risk capabilities in the origination models, monitoring collections. And we have entered, I would say, after an initial phase of identifying particular improvements in a new phase in which we are developing, I would say, better, higher capabilities, and we are starting to reap the benefits of that.

The approach is very disciplined. BCP, Mibanco, also in the other subsidiaries of the group level by level, and we are developing and deploying these capabilities. These capabilities are also going to help us to withstand the potential impact of El Nino. But our long-term vision is that we are going to increase the capacity to originate higher -- in general, higher yielding loans with controlled risk monitoring very closely the risk appetite. Alejandro highlighted, specifically the collections. We have been more focused on models, origination, monitoring. And recently, we have started to develop additional capabilities and collections that are showing results in BCP and ban. So the short answer is the environment health, but we are doing our job improving internally.

Brian, just one quick comment on top of what a just mentioned. Don't forget that we don't manage that in by cost of risk, we manage by risk-adjusted NIM. So yes, the cost of risk may increase. But what we're convinced is that the risk-adjusted NIM is going to increase more than that because as we go into new markets, the Yape portfolio is a great example. Yes, the cost of this is higher, but the risk adjusted NIM is also higher.

No, super clear, Gianfranco. Just also, if I may, a quick follow-up on your recent comment. We know, obviously, we have a new administration coming in. Just wanted to check with you after maybe your initial approaches with them if you feel the tone in terms of partnerships in terms of growth is a bit more of it or are you a bit more constructive in terms of the outlook here for particularly growth, right?

Yes. Yes. Yes. As Alejandro mentioned before, the penetration and the financial system, we've gone back. It's not that it's still very low, and we've gone back. So we haven't had any specific contracts with the new administration. But from what we see and listen, the whole environment is much -- it's going to be much more proactive in terms of promoting financial inclusion, promoting growth, promoting private investments. And obviously, that environment is much more benign for growth of the financial system.

The next question will come from Renato Meloni with Autonomous Research.

I wanted you to expand your comments on the provisions for El Nino and what to expect going forward. So first, on the 106 million this quarter, was that like client specific? Or was that more sector-specific and the ones that you mentioned before? And then going forward, is this going to be like a recurring level for the next couple of quarters? Or this is enough for the foreseeable future?

Thank you. Thank you for the question, Renato. As we mentioned, we have done a very thorough analysis of the portfolio. talking specifically the provision thing we have gone print by client segment by segment in the wholesale part of the portfolio. And in the retail, we have used an approach of geography and profile of the client and we have several scenarios. And we are with the logic of expected losses that is embedded in the logic of IFRS 9, we are constituting provisioning, and we are going to have probably a second important point of control at the end of the second quarter, the beginning of the -- sorry, at the end of the third quarter, beginning of the fourth because in our conversation with the specialists, the climatologist, at this point, September, October, we are going to have a much better assessment of the severity.

We are moving in the expectation of medium and strong mind at this point, we are going to make a reassessment to calibrate the expected losses that we need to book this year. Perfect. So September, October, a potential new adjustment, and that's going to be it for this year. And when we go to 2027, when you mentioned it's the when the economy will see the impact, maybe another one there or potentially be first [indiscernible] what was that?

Yes, the way we provision through IFRS 9 is a forward-looking provision. Therefore, you're completely right. Depending on the data, I just mentioned, depending on the data, we can analyze in September, October, we will make a new assessment as we move forward and the real impact of El Nino comes into place, we will decide what that more than we. The model will tell us what the provision should be. remind our provision system is forward-looking

The next question will come from Daniel Vaz with Safra.

Hi guys, good morning. Congrats on the results. Alejandro, Ignacio, wishing you the success in your new roles. So my question is regarding your refreshed midterm ROE guidance. So we often as you are a bank, we often do a bottom-up analysis to your model. But Credicorp, you still are holding also, right? So you have a lot of businesses we could look at a top-down view or some of the parts view also.

So I guess my question is, which companies in your holding carry the most upside right now. So Mibanco is already running above the 22% guidance. BCP runs at 30s and Pacifico and the advisory runs below. So should we expect even better ROEs at the ones that already run above it or ROEs improving at the ones which we this level right now?

Yes. Thank you, Daniel. I'll first start talking about the levers that we believe are behind the new midterm ROE that we've shared and then give you some color on the specific question. So basically, we believe this comes from continuing to grow in the underpenetrated financial product segment. And this, by the way, is lending, but it's also investment, it's also insurance. So all in all, they are all underpenetrated segments, even if you compare them to countries like Colombia and of course, Chile, so there's still an opportunity to continue penetrating the other thing is that we are expecting higher risk-adjusted margins.

This is supported by pricing, the shift in portfolio mix that I mentioning, risk capabilities also. So we should see an impact there. The other important thing is an increase in fee income and monetization of our innovation portfolio. Seeing the most visible one, but other ones coming down the pipeline that should start to generate also more fee income and a positive operating leverage where basically income should grow faster than our expenses. So all of those things bring us to the new around 22% ROE.

When you talk specifically, I think there's both things can be true in the sense that we believe there's still space for some improvement in ROE in the companies that are performing strong to BCP, Mibanco, going back to this penetration in lending, et cetera, but if you think about also the under penetration in insurance and their penetration in mutual funds, there is still space also in the other company. So we are not seeing this like specifically in 1 or 2 companies. We believe there is space for improvement across the board.

On what [indiscernible] just mentioned. Also bear in mind the impact on the disruptive initiatives. They are very -- in terms of ROE, they are very accretive. So they're going to be accretive this year. And obviously, as we move forward, they should be -- or we expect them to be much more accretive. So that's another lever that you should take into account.

The next question will come from Carlos Gomez-Lopez with ABC.

And the first in, congratulations, and thank you to Alejandro for this time with us. It has been brief, but it has been good. And [indiscernible] I want to talk about the same question, which is the target priority. My question is a little bit different what is the urgency to increase the midterm ROE? You were around 17% for a long time. increased on last October to 18.5%. Now you got 22. At this point in time, where arguably everything is going right, you're delivering 21%, is this something that you are setting an internal goal or something has changed fundamentally that makes you believe that you actually need to be there.

And I also start because I go back in time over the last 10 or 20 years, your REs have been my number, 7.5%, 19%, that's even taking out of it. And you actually are less leveraged now than you were then to have more capital. So I mean it would stand to reason that maybe it doesn't get that high. So I want to understand why you need to move the target now? And again, I don't know that I can achieve it. I just wondering why?

This is Alejandro. So I'll begin by saying that, yes, we did mention the 19.5% in October of last year, but I specifically mentioned there that we were going into a big political cycle in all of Latin America. If you remember at that time, we were about to have elections in Colombia, a Chile, Bolivia, Colombia, Peru. And -- so we basically decided to take a conservative stance, and we were explicit about it. And we did mention then that we would come back after that cycle with a revised number, which is what we're doing right now. And when you look and I was just explaining the drivers, the ecosystem we've built our ability, the principality we build and our ability to better serve all these clients it makes us confident that we can achieve a higher ROE than the around 9.5%.

Even -- I mean, just to give you an example, even this year, if there was El Nino, we would have outperformed clearly that 19.5% and probably would have been above the 20% mark. So our ability to generate returns today is higher than the number we gave on a stable situation, I mean, taking away specific things like El Nino. So we thought it was the right thing to basically give a more realistic number on what we can achieve. In the coming years.

Yes. And Carlos, this is [indiscernible] on the spot. We also are a more -- a less leveraged company. So the risk of [indiscernible] lower than a few years before current liquidity ratio was in single digits. So -- but we're confident that the 22% is more than achievable.

The next question will come from Yuri Fernandes with JPMorgan.

I have -- and congrats also on the quarter, pretty good 20% despite the additional provisions. I have a curious about the quarter here on other income especially the noncore income. It moved up a lot this quarter, some 40% quarter-over-quarter. So if you can explain what drove it? I guess, on your comments in the automation effects, maybe secure mark-to-market. So what drove this? Is this client activity? Should this be more recurring? Or should we see a normalization of this other income line?

Yes, sure. So basically, I would say it's come from a lot of different sources as we increment this principality, we've been talking about there's more transactional fees that we generate both at BCP, Yape. I mentioned FX as a driver also which has been growing for the last few years. It had a very good return due to the volatility related to elections, but we still believe it can continue to have very strong results going forward. And in general, again, as we move further down with our strategy to increase principality we are getting a larger share of fees in the market, and we expected that to continue. And that's why we -- I mentioned earlier, we're now achieving the guidance that we're talking about high teens or mid- to high teens expected growth there. And we believe that should continue going forward.

No, super clear. And if I may, a second one here guys, just on cost and efficiency, could we see for the 22 ROE cost to income be much better? Because I know today, expenses and revenues, they are growing somewhat at a similar pace, but you are accelerating on growth you are pretty confident with risk-adjusted margins. I know you have your new initiatives, 350 bps guidance for cost-to-income headwind. But I don't know, could we start to see expenses slowing down? And maybe efficiency become a powerful tailwind for you?

Yes, the short answer is yes. This number hasn't changed when we were -- in October of last year, we talked about the mid-term cost-to-income closer to 3%. We are expecting to go in that direction, our view of the market takes in that direction as our innovation scale, Gianfranco mentioned, today, the innovation portfolio is positive in but it has around 300 basis points of drag on cost to income that is going to change as Yape scaling and goes from its current cost to income, which is higher than BTP and going below those numbers. more kind of like large neo banks. So all in all, what we see going forward is an improvement in the operating leverage. So basically, income growing much faster than expenses and going to be around 40% cost-to-income in the midterm.

The next question will come from Julianna Ohara with Goldman Sachs.

Congratulations on your results. I just have a quick follow-up on a comment you made earlier. I think you mentioned you're adjusting your portfolios based on what you're seeing for El Nino. I just wanted to know if you could share A bit more color is that would have some mix impact into NIM and your asset quality expectations. Thank you.

Yes. Thank you. The change is actually in the origination mix in specific areas. So we continue improvement in general, but identifying areas that are going to be more severely impacted as it meets with the profile of the clients. We adjust lowering the risk appetite temporarily in this segment. So temporarily, we are going to have, let's say, a less pronounced change in the mix of the portfolio, but the general trend continues.

Maybe I'll just add [indiscernible], as I mentioned in the guidance, we -- this is a -- we are expecting this year to have around 12% loan growth. So again, it's going to be a very strong year, where we might see a little bit of a lower loan growth is in 2027 when all the things that said mentioning will take place. Again, the main effect of El Nino are expected to be in 2027, and that could mean probably a little bit of a lower rate of growth in loans.

The next question will come from Andres Soto with Santander.

Good morning, everybody. Thank you for the presentation. I have two questions. The first one is a follow-up on the El Nino provisions. I understand you guys do a new assessment by the end of third quarter, the beginning of the fall on, but I would like to understand from your guidance for the full year, how much of additional provisions are you already considering for El Nino? Is it going to be similar to this quarter, we added 30 bps to the cost of rates, it's going to be higher, lower? Any color there will be helping.

Andres, this is Alejandro. The main color I'll give is that what we're expecting is to remain within guidance even with a severe line case. So I mean, we still don't know how far it's going to get, but given the dynamics we've seen this year where we were coming on the lower end of the guidance, what would probably happen is that we'll move towards the middle to higher end of the guidance, but stay within guidance even with the full provisioning of a severe need.

Okay. That helps. My second question is on Yape lending. We saw a significant acceleration this quarter I would like to understand this acceleration is coming from increasing the balances for your existing customers as you exchange duration? Or is it coming from new customers? Or is already reflecting the lending initiatives with SMEs within Japan.

So it's actually coming from both. As you have heard us, we start Yape with a mono quota, a mono installment. And then once we know your behavior, we go into a multi-installment, we do this for SME and for individuals. The growth is today primarily in individuals just because the SME is a little further behind. We started later. So we're seeing growth on both sides. And what we are seeing as well is recurrent in customers, so repayment and a secondary loan a third loan and we are seeing ticket growth and also term growth. Those contribute both on the loan portfolio side and of course, on.

So this is still gradual. This is very slow, but this is what we're seeing on both segments.

At some point, you mentioned what is the potential number of customers that you could reach via lending. Do you have any update to that number based on the performance that you have achieved over the past few quarters?

Yes. So Yape, as you know, has a base of over 160 million. You've heard that credit penetration in Peru is still low. We have today reached over 5 million customers through a loan, and the portfolio is around, I would say, we disbursed around 2 million loans -- so the growth rate here is important. We don't have a set target in terms of like 50% of Yape customers should have a loan or anything like that. But of course, we feel because of the product and the type of customer we serve. This is going to be a large scale in terms of loans. Small loans, again, this is not going into high loans, that's more BCP and more Bianco. This is very long short launch and shorter term as well. So growth should be expected.

The next question will come from Alvaro Galicia, Private Investor.

Well, you've just upgraded your medium-term ROE target to an impressive 22% driven by structural improvements and digital monetization. However, you also mentioned that the strongest impact of El Nino will likely materialize in Q1 2027. And a severe scenario could pressure along growth and fee income. Realistically, how much of that 22% of ROE guidance is at risk [indiscernible] shifts from a mantle shock to a severe even later this year. And what is the specific cost of risk threshold that would force you to work back in this new profitability target?

This is Alejandro. So when we talk about the midterm ROE, we're talking an ROE for the next 2 to 3 years. and we believe it is completely this mentioning, we are not necessarily expressing a specific guidance for 2027, which would, of course, be impacted by a severe El Nino and good potentially 2027, we could guide for a lower ROE than the 22%. Again, we're not saying anything as of now. but it doesn't change our expectation of achieving this 22% midterm ROE at all. It would just have a shorter-term impact. the same with loan growth. I mean we're expecting double-digit loan growth for the coming years, not necessarily the -- it's not necessarily going to be the case in 2027, depending on how severe El Nino happens to be.

The next question will come from Alonso Aramburu with BTG.

Yes. Just following that on a little bit on Alvino as well. How are you thinking about dividends, potential extraordinary dividends for the second half of the year? And maybe if I can ask about on a separate -- on a different way, if it's a severe El Nino what's the amount of provisions that you think you can -- you will have to book this year? Is it 500 million? Is it 1 billion? Maybe if you can provide a figure for that?

Yes. You mean the total provision? Yes. So again, we are not providing a number because, as was mentioned earlier, this is information that gated to our model and comes out with a certain number that we will include and we'll give more color as we put more provisions into the numbers. But again, as I mentioned, we are expecting to remain in guidance even in the case of a severe El Nino from what we see today.

So again, without giving a number, just to give you some color, imagine us going up to the upper side of our guidance, and that should give you a sense of what could end up happening, but it's going to depend on information that keeps coming in the coming weeks and months.

Yes. And maybe also. On the dividend question, we believe that we are very well capitalized. So the potential provisions or additional provisions because of our very strong Nino shouldn't affect the extraordinary dividend that we may pay this year because actually, we're paying profits that were generated last year. So yes, that's it.

It appears there are no further questions at this time. I will now turn the call back over to Mr. Gianfranco Ferrari, Chief Executive Officer, for closing remarks.

Thank you. As we close today's discussion, I want to come back to the main message I shared at the beginning of the call. We have greater confidence in Peru's medium-term outlook, and Credicorp is well positioned to capture the opportunities ahead. The results we discussed today, together with the updated medium-term ROE expectations we shared reflect that only a more constructive operating environment but also the structural progress we've made across our ecosystem.

Credicorp today has a deeper customer relationship, stronger digital capabilities, disciplined risk management and a more scalable business model. Importantly, our growth remains anchored in our purpose, improving lives by helping people and business drive. That purpose guides how we invest expand financial inclusion and support our customers and communities through changing conditions. We believe in Peru, and we believe Credicorp has an important role in shaping its future. Every day, we have the privilege of helping millions of people and businesses move forward, and there is no way of opportunity than that.

Before closing, I want to thank Alejandro for his partnership and leadership as CFO. I look forward to continuing to work closely with him in his new role being our microfinance business and Mibanco Peru. I also want to welcome Ignacio, who will join us as CFO and will be with us on next quarter's call. Thank you all for joining us today.

Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect.

Good morning, everyone. I would like to welcome you to the Credicorp Limited First Quarter 2026 Conference Call. A slide presentation will accompany today's webcast which is available in the Investors section of Credicorp's website. Today's conference call is being recorded. [Operator Instructions]

Now it is my pleasure to turn the conference over to Credicorp's IRO, Ms. Milagros Ciguenas, you may begin.

Thank you, and good morning, everyone. Speaking on today's call will be Gianfranco Ferrari, our Chief Executive Officer; and Alejandro Perez-Reyes, our Chief Financial Officer. Participating at the Q&A session will also be Francesca Raffo, Chief Innovation Officer; Cesar Rios, Chief Risk Officer; and Eduardo Montero, Head of Insurance and Pensions.

Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties. And I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Gianfranco Ferrari will begin the call with remarks on recent macro and political environment, the key levers of our decoupling strategy and a brief overview of our quarterly results, followed by Alejandro Perez-Reyes, who will provide a more detailed analysis of key macroeconomic indicators, our financial performance and our outlook for full year 2026.

Gianfranco, please go ahead.

Thank you, Milagros. Good morning, everyone, and thank you for joining us today. Let me begin by thanking our shareholders for the strong support at our recent Annual General Meeting. The outcome of the Board elections reflects a deliberate strategy-led refreshment process, fully aligned with Credicorp's long-term priorities. As announced, shareholders approved the appointment of three new directors and the reelection of six current members. The new directors bring complementary expertise in areas that are increasingly critical for us, particularly technology and AI, financial and regulatory oversight and strategic execution as we continue advancing our transformation and strengthening our operating model. Importantly, our governance framework remains robust with key safeguards firmly in place, including a fully independent audit committee and independent directors leading critical committees. This provides a strong foundation as we navigate different operating environments.

At the global level, recent geopolitical tensions, particularly in the Middle East, have increased uncertainty, mainly through higher energy prices and their potential impact on inflation and the outlook for interest rates. Since our last conference call, Peru's economic activity has been affected by a series of temporary supply side shocks, including higher oil prices related to the conflict in the Middle East, a localized energy disruption and adverse weather conditions that led to contraction in primary sectors. That said, the positive momentum of the economy continues to remain solid. Several activities indicators, including private investment, continue posting double-digit growth, supported by resilient macroeconomic fundamentals and favorable export prices with copper currently trading at around $6.50 per pound.

Against this backdrop, we're maintaining our GDP growth expectation for 2026 at around 3.5%, though our outlook has become more skewed to the downside, with recent macroeconomic indicators tracking closer to 3.2%. More importantly, domestic demand remains particularly dynamic, growing above 4%, which we view as the more relevant driver for loan growth going forward.

As we await the official confirmation of results, the presidential runoff appears likely to feature candidates with markedly different economic visions, including one advocating for a significantly more interventionist role for the state. Should that candidate prevail, some initial market uncertainty could emerge. However, we believe the composition of the Senate is the more decisive factor and is trending toward a configuration that supports macroeconomic fundamentals and institutional continuity. In our view, this legislative balance will act as an effective counterweight helping to preserve political stability.

Peru's structural safeguards, including the Senate's veto authority and constitutional hurdles to significant policy shifts are likely to act as effective constraints, helping preserve the independence of the Central Bank and its mandate, particularly regarding monetary financing to the treasury. Given this, we remain confident that Peru's economic model will continue to prove resilient, supported by solid institutional frameworks. Against this backdrop, we continue to closely monitor price dynamics and monetary conditions. Inflation has seen an uptick to 4% year-over-year, mainly driven by transport, energy and food costs. As a result, monetary conditions are likely to remain somewhat tighter than previously anticipated.

Across the region, the operating environment remains mixed, reflecting the initial impact of external pressures. In Colombia, activity remains relatively resilient, supported by consumption, while policy uncertainty persists ahead of the presidential elections on May 31. In Chile, growth has softened amid weaker early year activity and higher oil prices. At the same time, the new government offers improved prospects for private investment. In Bolivia, macroeconomic conditions remain challenging with performance exceeding expectations. Overall, while external conditions remain dynamic, the resilience of our core markets, combined with the strength and attractiveness of our offerings give us confidence that 2026 will remain a solid year.

As we look ahead, we will further execute our decoupling strategy through four differentiated growth anchors. First, we're strengthening our leading position in the underpenetrated markets where we continue to see clear avenues of growth. We see significant room for -- to deepen financial inclusion and expand our reach across client segments where structural gaps persist. This enables us to grow while maintaining disciplined risk standards.

Second, we're scaling our integrated digital ecosystem. In 2026, we will leverage our platforms to accelerate client acquisition, deepen engagement and increase cross-sell while also improving efficiency and customer experience. A key component in our innovation portfolio is our neobank unit, which effective April 1, brings together Yape and iO in Peru, Tenpo in Chile and Yape in Bolivia under a common umbrella, led by Raimundo Morales. These platforms expand our reach and open new avenues for growth, particularly in payments and lending. More broadly, we're deepening our competitive moat by leveraging our scale, client base and ecosystem integration to drive sustained differentiation and progressively higher monetization.

Third, we are unlocking synergies by leveraging shared capabilities across our ecosystem. We're placing greater emphasis on data analytics and risk management capabilities that can be deployed across businesses. This also includes advancing our knowledge sharing agenda so that best practices can be applied across subsidiaries, improving decision-making, client targeting and risk assessment. While we are still in the early stages, we're already seeing tangible benefits, and we believe this represents a meaningful opportunity going forward.

Finally, delivering strong and resilient returns across economic cycles. This is underpinned by a prudent and holistic approach to risk and capital management across the organization. We continue to strengthen our capabilities across credit, liquidity and operational risk while maintaining a disciplined approach to capital allocation. This integrated framework is translating into more consistent performance and reinforces our resilience, enhancing our ability to navigate volatility, support sustainable growth and protect returns across different macro environments.

Turning now to the first quarter results. We reported a very solid ROE of 21.1%, which exceeded expectations and reflects strong fundamentals across our core businesses. Operational performance was robust across core businesses. Additionally, we achieved 9% of risk-adjusted revenues from our innovation portfolio this quarter, advancing toward our 10% target by the end of this year. We're seeing an acceleration of credit demand across our main lending segments. In the first quarter, loan growth was robust in BCP and Mibanco. We expect retail segments and microfinance to accelerate in the coming quarters.

Risk-adjusted NIM strengthened sequentially, supported by improved asset quality and a resilient underlying NIM as our loan portfolio expanded and funding mix improved. Deposit growth remained strong, reflecting system liquidity and sustained client confidence, while continued investments in service and digital capabilities deepened our client relationships and drove market share gains in low-cost funding, reaching 41.2% this quarter. Asset quality reflects proactive measures taken since 2023, including tighter origination standards, risk repricing, enhanced loan rescheduling and greater investments in analytics alongside a favorable macro environment.

Additionally, our strong solvency has enabled us to increase our dividend to PEN 50 per share, while also supporting our plans for sustained long-term growth. Our efficiency ratio is at 45.8% with our guidance -- within our guidance range as strategic investments in innovation and digital capabilities continue to drive diversified income streams and scalable growth through deeper market penetration. These results underscore the strength of our core operations and our long-term commitment to building a more agile, client-centric and resilient financial platform.

Before I turn the call over to Alejandro, I would like to congratulate him on his appointment to lead our finance -- our microfinance business at Mibanco. These transitions reflect the depth of talent we continue to build across Credicorp and our disciplined approach to succession planning and leadership development. We're also very pleased that Ignacio Belaunde will assume the CFO role later this year, bringing strong financial and strategic experience to the position. In the meantime, we still have Alejandro with us for one more quarter of earnings calls before this transition takes effect.

With that, Alejandro, please go ahead.

Thank you, Gianfranco, and good morning, everyone. As Gianfranco mentioned, we delivered remarkable overall operating results, including record high net income, which reflects solid growth in risk-adjusted revenue streams in our business ecosystem. As I discuss the quarter highlights, I will focus on the year-over-year operating trends. Loans measured in quarter-end balances increased 8.2%. This uptick was driven primarily by BCP through both retail and wholesale banking and by Mibanco. Asset quality improved across the board with Credicorp's NPL ratio declined to 4.3% for the quarter. This positive trend was driven by higher debt repayments, especially among retail banking clients, supported by ongoing refinements in underwriting standards and collections management and growth in liquidity through pension inflows.

In this context, the cost of risk stood at 1.3%, bolstered by improvements in payment performance in a more favorable macroeconomic environment and by strengthened risk management. Net interest income increased 10.9% spurred by growth in interest income, driven mainly by loan portfolio expansion by a contraction in interest expenses as interest rates fell and low-cost deposits continue to gain share to account for 63.9% of the funding base at quarter end. In this context, NIM stood at 6.6%.

Other core income grew 19.5%. Fee income increased 15.6%, boosted by transactional activity at Yape and BCP. Gains on FX transactions rose 30.6% through higher volumes at BCP. Lastly, the insurance underwriting results fell 9.1% on the back of lower premiums in the P&C business and inflationary pressures on expenses for claims in the Life business, which have no impact on the bottom line given that these claims are compensated with inflation-linked financial income. Excluding inflation-based impacts on claims expenses, the underwriting result rose 4% year-over-year, driven mainly by the Life business.

We delivered 21.1% ROE this quarter, fueled by strong loan growth, strengthened asset quality and diversified income sources, showcasing the success of our decoupling strategy, risk management measures and investment in digital capabilities. Finally, as Gianfranco mentioned, we recently declared a record high ordinary dividend of PEN 50 per share as we moved capital levels closer to target across our subsidiaries. Next slide, please.

GDP is expected to have grown close to 3% year-over-year in the first quarter, reflecting solid momentum in the economy despite localized energy disruptions and higher oil prices in March. More importantly, domestic demand is expected to have expanded by more than 5% year-over-year for the sixth consecutive quarter. High-frequency indicators continue to signal broad-based and robust expansion with several indicators posting double-digit year-over-year growth. For instance, during the first quarter, light vehicle sales led the gains, rising by nearly 40%, followed by uptick of nearly 20% in capital goods imports and 14% for cement consumption. Historic high terms of trade and ongoing business cycle momentum remain the key drivers of this performance.

While higher oil prices introduce uncertainty, Peru is less vulnerable than other peers of the region given its lesser net importer position. Another source of uncertainty going forward will be the impact of an El Nino event. So far, this has been felt in the first anchovy fishing season, but it is still early to tell how it will develop going forward. Also, as Gianfranco mentioned, while the presidential elections may generate some near-term uncertainty, the broader institutional framework, including the role of the Senate, should help limit the scope of abrupt changes and provide a measure of stability.

Next slide, please. The Federal Reserve has maintained its policy rate since December as it continues to assess incoming economic data and determine how rising oil prices impact inflation and employment. In Peru, annual inflation rose to 4% year-over-year in April, its highest level in more than 2 years, reflecting primarily higher local transportation prices. The Central Bank has indicated that inflation is expected to return to the target range within the forecast horizon and converge to 2% next year as the effects of these shocks gradually dissipate.

In Colombia, annual inflation accelerated to 5.6% in March, driven in part by the 23% minimum wage increase rolled at the beginning of 2026. To contain inflation expectations, the Central Bank has increased its rate by 200 basis points since December. Presidential elections will be held in 2 weeks and polls suggest a runoff is likely in June. In Chile, investment sentiment improved after President Kast's election, although recent gasoline price increases have tempered the outlook. Annual inflation reached 4% in April and the Central Bank has held the policy rate at 4.5%.

Next slide, please. BCP's profitability posted a solid start to the year, supported by loan growth under disciplined risk management and diversified sources of revenue. In this context, ROE stood at 30.5%. On a year-over-year basis, total loans measured in end-of-period balances rose 7.3%. In FX-neutral terms, loan growth stood at 9.1%, driven by both wholesale and retail banking. Notably, disbursements of long-term wholesale loans were buoyed by a favorable outlook for private investment. In Retail Banking, loan growth accelerated mainly in individuals, reflecting an increase in our risk appetite for consumer loans and an uptick in mortgage loan disbursements, which rose on the back of lower interest rates.

SME-Pyme loan disbursements were also boosted by an increase in our risk appetite. NIM rose 21 basis points to stand at 6%, mainly due to a decrease in the funding cost, while the yield on interest-earning assets remained resilient in an environment of lower interest rates. NPL volumes declined 11.1%, mainly due to debt cancellations by SME-Pyme clients under judicial recovery and secondarily by debt repayments from individuals who availed funds from pension fund withdrawals. Improvements in the quality of origination and in collections management also contributed to the result.

Provisions fell 35.1%, driven mainly by retail banking, which was positively impacted by improvements in payment performance across early vintages in consumer and credit card loans and by reversals in wholesale banking after a corporate client regularizes refinance exposure. In that scenario, the cost of risk decreased to 0.8%, while risk-adjusted NIM stood at a record high of 5.5%. Other core income rose 18.7%, driven mainly by an increase in fee income where strong transactional activity was channeled through Yape and other transactional products at BCP. A secondary driver was growth in gains on FX transactions, which was fueled mainly by retail clients served through digital channels.

Variations in volumes reflect volatility related to tensions in the Middle East and the electoral calendar. Although the ratio of other core income to assets stabilized this quarter due to asset growth, the contribution of fee income plus net gains from FX transactions reached its highest level since 2022, reflecting the strength of our diversified sources of revenue. Operating expenses rose 15.1%, mainly due to an uptick in administrative expenses. This evolution was driven primarily by Yape's use of cloud infrastructure and IT-related services and secondarily by marketing and consulting expenses in the traditional business. Our personnel expenses rose this quarter as we ramped up core business projects to develop commercial and technological capabilities. In this context, operating expenses and personnel expenses, in particular, led the efficiency ratio to stand at 38.6%.

Next slide, please. With 16.4 million monthly active users, Yape continues to expand its MAU base while shifting its focus towards deeper engagement and monetization. Reaching approximately 82% of Peru's economically active population, the platform has achieved nationwide scale. At this level of penetration, incremental growth is driven by higher recurrence, broader multiproduct adoption and monetization of an already large installed base, positioning Yape to continue cutting into cash's share of payments. The platform's positive evolution into a super app is reflected in its engagement metrics. Users transact 67x per month, supported by consistently strong customer satisfaction with an NPS of 77.

This deeper engagement translates into unit economics with revenue per MAU increasing 65% year-over-year to PEN 10.3, widely surpassing growth in expenses per MAU, which rose 26% to PEN 5.9. This proves that operating leverage is on the right, consistent with Yape's asset-light and scalable model. Payments account for 47% of total revenues, while also serving as a core engine for data generation and cross-selling. Revenue-generating total payment volume grew 80% year-over-year, reinforcing Yape's position as Peru's leading digital payment network. Lending revenue grew 3.6x year-over-year, positioning as the platform's fastest-growing vertical. In the first quarter of 2026, more than 5.7 million loans were disbursed, leveraging proprietary data, digital underwriting and distribution to serve the underbanked. With credit penetration at approximately 30% of MAUs, there's still significant upside to accelerate adoption.

Yape has the potential to significantly scale its contributions to Credicorp over time. As of the first quarter, the app represented 17% of the group's fee income and 8% of the group's risk-adjusted revenues year-over-year, up from 12% and 5%, respectively. Next slide, please. As Peru's microfinance system continues to gain traction amid a more dynamic economic backdrop, its performance has followed an upward trend. In this context, Mibanco outperformed its peers by strengthening its transactional value proposition, gaining productivity and strengthening credit risk management. As a result, Mibanco sustained double-digit loan growth and robust profitability of 21.7% this quarter.

From a year-over-year perspective, loans measured in quarter end balances grew 12.4%, riding an upswing in loan disbursements, which hit a new all-time high in March. The NPL ratio continued with a downward trajectory that began last year, falling to 4.9%, an all-time low. Our active pricing management, coupled with a decrease in the cost of funding boosted NIM, which stood at a strong 14.9%. The cost of risk fell 29 basis points on the back of lower risk vintages, which currently account for 88% of total loans. While the cost of risk remained low this quarter, we anticipate some gradual normalization in the second half of 2026 as we incorporate newer and smaller customer segments to bolster portfolio growth while remaining comfortably within our risk appetite. In parallel, risk-adjusted NIM stood at 11.3%, slightly below the 4-year high achieved last quarter.

Operating expenses increased due to higher administrative expenses related to ongoing investments in strategic projects, primarily linked to digital transformation initiatives to modernize our technological architecture and improve client experience. Efficiency improved despite these investments and stood at 49.2% at quarter end. Mibanco Colombia's results continued to rise and registered double-digit loan growth both quarter-over-quarter and year-over-year, bolstered by controlled risk management and improving productivity. Consequently, profitability stood at 18.3% at quarter end, which represents a sizable improvement over the single-digit levels reported at the same time last year.

Next slide, please. Grupo Pacifico delivered solid underlying results in the first quarter with ROE of 18.9% for the quarter. Organic net income grew 11% year-over-year, driven mainly by the Life business and partially offset by the P&C business. In our Life business, commercial execution was strong, supported by growth in our bancassurance channels and an uptick in issuances of optional policies in retail segments, both consistent with our strategy to deepen penetration in high-value customer segments. The net loss on securities dropped this quarter, reflecting a base effect generated by credit downgrades on a couple of assets in the investment portfolio in the first quarter of last year.

In our P&C business, net income fell. This evolution was fueled primarily by a drop in premiums in the corporate segment and secondarily by an uptick in claims in the personal and medical assistance lines. In addition to organic growth, our net income accelerated year-over-year following the consolidation of Pacifico Salud, which includes medical assistance, corporate health insurance and medical services. These businesses continue to advance through solid commercial dynamics and disciplined cost management, which bolsters our confidence in Pacifico Salud's long-term earnings contribution. If we include the full consolidation of Pacifico Salud's operations in Grupo Pacifico results, consolidated net income rose 19% year-over-year.

Next slide, please. ROE for our Investment Management & Advisory business stood at 15.7% in the first quarter. Let me give a brief overview of this quarter's year-over-year dynamics and underlying structural trends. Quarter results showed mixed dynamics. Revenues benefited from stronger performance in our Wealth and Asset Management businesses with AUMs expanding by 28% and 34%, respectively. Our capital markets line also evolved favorably in line with market conditions. These favorable business dynamics were partially offset by an increase in operating expenses, which was mainly attributable to a particularly low comparative base in the first quarter of 2025. In this context, net income fell 8% over the period.

Next slide, please. Now I would like to review Credicorp's consolidated evolution. Interest-earning assets rose sequentially, driven mainly by growth in investment balances as we took advantage of tactical opportunities to capitalize on our cash position. Loan growth fueled by BCP also contributed to the uptick in interest-earning assets, albeit to a lesser extent. On the liability side, low-cost deposits posted an increase, thanks to our solid transactional offering and inflows from pension fund withdrawals.

Structural balance sheet trends are better explained on a year-over-year basis. Loan growth, which was driven mainly by BCP and Mibanco, led the interest-earning asset mix to generate higher yields despite cash buildup. In this context, the yield on interest-earning assets rose 10 basis points year-over-year. On the liability side, lower interest rates, along with an increase in the share of low-cost deposits resulted in a 31 basis point decrease in the funding cost over the same period. In this context, NIM stood at 6.6% for the quarter.

Next slide, please. Moving on to loan portfolio quality. Asset quality continued to improve this quarter as NPL volumes contracted across segments. The NPL ratio at quarter end was 4.3%, which is below the levels reported prior to the 2023 recession. Provisions dropped over the last 12 months, buoyed by steady economic recovery, which strengthened repayment dynamics and by effective risk management at both BCP and Mibanco. In this context, the NPL coverage ratio rose and stood at 113.8%. Going forward, we will continue to accelerate retail origination while maintaining a disciplined approach to risk. We expect loan growth to maintain its dynamism. The cost of risk, in turn, is expected to increase modestly, but remain within our risk appetite.

Next slide, please. Core income reached new record levels, supported by this quarter's operating momentum across core businesses, which was driven by loan growth in higher-yield segments, a drop in the funding cost and an upward trajectory for transactional activity. On a yearly basis, 13.3% growth in core income was driven by diverse revenue streams with net interest income, fees and FX gains reporting double-digit gains. Net interest income grew 10.9%, benefiting from sustained growth in our low-cost deposit base and resilient asset yields. Fee income in turn rose 15.6% on the back of dynamic bancassurance, payments and transactional services, while the 30.6% uptick in FX gains was supported by higher transactional volumes and disciplined pricing.

Profitability metrics continue to strengthen with risk-adjusted NIM trending upward to 5.81%, reflecting improved pricing, portfolio mix optimization and effective risk management. The efficiency ratio for the year stood within guidance at 45.8%. Operating expenses grew 13.1%, fueled primarily by core businesses at BCP and investments in our innovation portfolio. Growth in core expenses at BCP was driven mainly by IT expenses for commercial and transactional capability development. Expenses for our innovation portfolio, which were led by Yape, Tenpo and Culqi, rose 40% and represented 84% of disruptive expenses for the quarter.

Next slide, please. ROE for the quarter was 21.1%, supported by solid business performance and a favorable economic backdrop. Net income reached a record high once again. We achieved this by capitalizing on our structural strength, our differentiated digital and transactional capabilities, low funding cost advantage, loan portfolio growth, particularly in retail segments and sustained improvements in risk management.

Now I will move on to our guidance. Next slide, please. We maintain our expectation for Peru's GDP growth stand at around 3.5% in 2026, though we recognize that risks to this outlook are tilted to the downside. We expect our total loan book to grow around 8.5% measured in quarter end balances or around 10.5% on an FX-neutral basis. Amid a dynamic economic backdrop and strengthening origination levels, we expect growth in balances to continue accelerating over the remainder of the year, driven primarily by retail banking at BCP and by Mibanco. The acceleration anticipated for loan growth and the shift in the mix towards retail should support NIM, which we expect to stand between 6.4% and 6.7%.

This quarter's cost of risk was below expectations. We anticipate that retail origination will continue to increase. As a result, the cost of risk is expected to approach the lower end of our guidance range and our risk-adjusted NIM is expected to remain within guidance. On the efficiency front, we maintain our guidance range for 2026. Turning to noninterest income. As we mentioned in our previous earnings call, we continue to expect fee income to grow in the low double digits this year, driven by an ongoing uptick in economic activity and in the diversification of our income sources. On the insurance side, our underlying insurance business is expected to continue performing solidly. However, the insurance underwriting result, which was bolstered by extraordinary reversals for the D&S business in 2025, is expected to drop by high single digits. Excluding the D&S business, the result is on track to deliver high single-digit growth.

Although we are reaffirming our ROE guidance of around 19.5% for 2026, the strength of our first quarter performance and the ongoing positive trends suggest that we are well positioned to achieve results on the upper side of this level. We remain prudent in the face of global and local uncertainties, but our outlook reflects confidence in our ability to deliver strong value for shareholders.

With this comment, I would like to open the Q&A session.

[Operator Instructions] Our first question comes from Ernesto Gabilondo with Bank of America.

Alejandro, best of luck in your new position, and Ignacio wishing you the same. Congrats on your record high results. My first question is whether you could provide some color on the presidential election and the potential impact of El Nino. Regarding the election, with almost 100% of the votes counted. And as you mentioned in your remarks, the second round appears likely to be in between Fujimori and Sanchez. Could you share any insights on potential alliances or support these candidates may receive from other potential contenders that are not passing to the second round?

And on El Nino, expectations are currently pointing to a strong event. A super El Nino is being ruled out for now. But based on your experience with this type of weather phenomenon, how likely is that this outlook change throughout the year? And in case of a strong El Nino, what measures would you expect to evaluate or implement?

Ernesto, this is Gianfranco. Thank you for your words. Let me take the political question, and then I'll ask Cesar and Alejandro, if you want to comment on the El Nino, which, by the way, there are actually two El Ninos as we speak -- El Nino effects as we speak. Yes, you're right. Officially, there's no official results. And so we do not know who the two candidates that are going to go to the ballotage or the runoff. But yes, we're close to 100%. So the probability of Fujimori and Sanchez going to the second round is very high.

Regarding your question on alliances and so on, there's nothing material as we speak. But on top of that, also bear in mind that the endorsement power that there is in Peru is quite limited. So we'll have to see what happens going on. Actually, the only poll that was published or that is public after the first round is that they're basically -- when I say they, Mrs. Fujimori and Mr. Sanchez are basically tied.

So with that, I will ask Cesar to go with the comments on El Nino, please.

Ernesto, regarding El Nino, I think first, it's important to clarify that we deal with two different phenomenon. The coastal El Nino that we are already in a El Nino phenomenon at this point. I am going to detail a little bit more. And the second one that probably is the more global awareness is the Central Pacific El Nino. These are two different phenomenon. Depending on the period of the year, this can affect Peru differently and particularly are dangerous when the confluence of these phenomenon coincide with the summer. Even say that, regarding the local El Nino, we are already in a low moderate effect at this point. It has already affected the fishing season, has been temporarily halted after only 1/4 of the usual harvest volume is expected for this year. So these effects are already impacting the economy.

And we are also closely monitoring the effects at this point in the agricultural sector. Usually, the impact is diminish the level of productivity, but in some cases, is also compensated by higher prices. So we are in the point that we are closely monitoring. We are still not changing our credit policy. And probably around September, we are going to have much clear indication of the real impact. And in this point, we should start taking measures considering not only this already mentioning effects, but heavy rains in the north part of the city. So in our expectations, we are already considering this moderate impact and closely monitoring potential higher impact for the last part of the year. I don't know if this helps.

Yes.

Ernesto, this is Alejandro. First, thanks for your words. I just wanted to give you a little bit more color or numerical color on the impact of El Nino over time. In 1998, we had what is considered an extraordinary El Nino and the impact on GDP in Peru was 1.7%. The moderate El Nino of 2017 was 0.8% and the strong El Nino of 2023 was 1.1%. So depending -- and going back to Cesar's comments, it's still very early to know what kind of El Nino we will get depending on the summer and the confliction of both the El Nino Costero and the El Niño, whether it's going to be moderate or strong, we're going to see the impact around 1% of GDP of Peru if it were to materialize.

Great. Super helpful. Good color. And then just my second question is related to asset quality. The cost of risk has become very well below your guidance. So just wondering whether there are potential downside risks or it's still early to assess that considering and we need to wait for the outcome of the presidential election and to evaluate the impact of El Nino?

Thank you, Ernesto. I would like to highlight two different behaviors in our portfolio. Let's say, Mibanco, as Alejandro has mentioned, has had a very good performance, but not a dramatical change recently, as you can see in the recent evolution. And these numbers reflect improved risk performance because at the same time that we are decreasing the cost of risk, we are increasing our exposure in low segment tickets, particularly below PEN 5,000. So a good performance, but not a dramatical change on the quarter.

In the case of BCP, you can see a significant change on the quarter. And I would like to mention two different kind of effects. One is a more structural effect that is the combination of the origination and the measures that we have taken recently that has improved the quality of risk segment by segment, and we are reaping the benefits of these measures taken. And additionally, we are starting to see also the contribution -- the increased contribution of more provisions of the new origination in higher-yielding segments that has been more pronounced the last quarter of last year and this first quarter, as you have seen in our figures. That's structural. And segment by segment, we are still seeing an improvement, but it's not a dramatical improvement.

But the effect that has been changing recently has been some one-off effect that has impacted the quarter in particular. We have an unusually high as a product of the boom in the mining sector of profit sharing. So this profit sharing has improved the one-off payment capacity of the middle segment that was the focus of our origination in the last 2 years. So good payment -- additional payments from the source. The liberated fund from the pension funds that has improved also in the same segment. And on top of that, a combination of payments in the wholesale portfolio. In contrast with the last quarter in which we have additional provision for a number of construction-related segment clients. In this quarter, we have liberation of provisions. So you have good underlying behavior in BCP with a slight decrease of the cost of risk gradually increasing as we shift the portfolio, but the combination of three very point in time effects in the quarter that I would say, exacerbated the decrease of the cost of risk.

As we start to originate faster and faster in higher-yield segments, we are going to increase the cost of risk towards the expected rates that Alejandro has shared, and our expectation is to be with the information that we have in the lower range of this -- the guidance.

The next question comes from Brian Flores with Citi.

I have one quick question or sorry, a follow-up on Ernesto's question regarding asset quality. So is it fair to say that this maybe extraordinary cost of risk that we have seen is allowing you to maybe allocate a bit more capital on, as you mentioned, higher-yielding credit, and we should see this maybe during this year? And then maybe my question is on your ROE guidance. I think you mentioned that maybe you could be on the upper side given the trends that you're seeing. And I think maybe cost of risk is perhaps the one that is allowing you to already be mentioning this. So I just wanted to see if besides cost of risk, you see also another of these key variables, maybe efficiency, allowing you to be on the upper side of the range, as you were mentioning.

Brian, let me provide a more, let's say, longer-term vision regarding the question on cost of risk, and then I'll ask both Cesar and Alejandro to answer on both the cost of risk and the ROE. First of all, we do not manage the company by only taking a look at cost of risk, but most importantly, by taking a look at risk-adjusted NIM. So what we've been providing, and I believe Alejandro mentioned it when he commented about guidance is that we do expect cost -- sorry, risk-adjusted NIM to increase even though we expect cost of risk at the same time to increase. And the main reason is because the retail portfolio and mostly microfinance and the Yape lending book is going to -- are going to grow at a much faster pace.

We are not -- having said that, we're not taking -- making decisions based on a short-term cost of risk results, but on a much more longer and structural vision regarding the opportunities we see mostly again in the retail portfolio in the underbanked and the unbanked and leveraging a lot on the data we've been gathering over the last actually 10 years through Yape and other digital channels.

And maybe I'll end that with the comment on guidance on ROE. It's not only a matter of cost of risk. And well, the first quarter has been over 20% already. The economy in Peru is really performing quite well. Therefore, we have a lot of tailwinds. So it's not only a matter of what we're doing as a company, but also the environment is quite good. I don't know if Cesar and Alejandro would like to add something in that sense.

I think Gianfranco has explained perfectly our general approach. And I will say, if we are taking confidence to increase our risk taking is because segment by segment, we are having results within our expectation or slightly better. That's what gives us confidence to continue growing and accelerating the risk taking in higher yield, higher risk segments. The temporary effects were exactly the temporary effects that are very welcome, but our strategy continues to perform based on the capabilities that we are building and the results that we are monitoring and adjusting.

Yes. Brian, this is Alejandro. I'm going to add something on the ROE guidance. We haven't changed the guidance, which is around 19.5%. But as I mentioned in my remarks, we are expecting to be on the upper side of that number given what we've already seen in this first quarter, and we've had an ROE above 20% and the strength of the economy. Having said that, there are, of course, some important events that we need to monitor that might have an impact like the elections and the El Niño that we were already discussing. But we believe that given the strength of the economy, given all the things that we've been developing, both in risk management, transactional capabilities, et cetera, and what we see, we should be able to be on the upper side of the 19.5% for this year going forward.

And again, it's not just cost of risk. There's also the loan growth that we're expecting that can be a little bit stronger. And hence the -- and then you have the risk-adjusted NIM that Gianfranco mentioned probably being strong for the year and all those figures together will probably allow us to be above the 19.5%. But again, we are at a moment in the year where we've seen an amazing first 4 months because April has also been very strong in the economy. But we are about to choose a new President, and there's this El Nino effect going on. So that's the reason why we want to remain prudent as of now.

Very clear, team. I appreciate. Just if I understood correctly, given the improvement in marginal ROE, your priority in capital allocation, if I understand correctly, should be reinvestment in growing, right, rather than extraordinary dividends, all of that because I think the unit economics are healthier, right?

Sure. I mean the priority is definitely growth, and we believe there's a big opportunity in many of the segments that we serve.

The next question comes from Thiago Batista with UBS BB.

Congratulations for the results, very strong numbers. Can you give me some indication about the performance of Yape in Bolivia? And also, if you believe this platform can be implemented in other places, let's say, in Chile, for instance. So those two points, how Yape is performing in Bolivia and if it's possible to see kind of internationalization of Yape?

Francesca, could you answer that, please?

Sure. Thank you, Thiago, for the question. Yape Bolivia has been growing at a steady pace. I would say that last year, it accelerated growth, reaching over 2 million customers for a smaller country that is Bolivia. But bear in mind that Bolivia has a different starting point than Peru, it had an interoperable system in place. So it's a different model, but we have been successful to gain market and to be the leader in the market. Having said that, we have a very solid competitor that is close by. So at a transactional pace, we are growing different again than Peru. More than just P2P transactions, there's a lot of P2M transactions. So it's a merchant driving system.

And we are following the path similar to Peru in having the monetization, which is putting a lot of services around utility payments and so forth and digitizing payments as a whole, and then gaining a lot of information to go into value-added services around lending and other products. So Bolivia is performing good. We've worked a lot around technology as well. As you know, we have a bank there, and we began that process with their technology.

And that brings me to the next -- your next comment around the internationalization. So Chile, for sure, with Tenpo as a neobank there, as Gianfranco mentioned, leveraging capabilities and there is a cash-based economy in Chile as well that we're, of course, looking at. The technological piece, I think, is super important, and Yape has been working around creating a platform that is much more exportable.

Yes. Maybe, Thiago, just to complement Francesca's answer, we announcing that -- on April 1, we created the neobanking unit under Raimundo Morales, CEO -- the current CEO of Yape -- Yape Peru. I mean, under that unit, Yape Peru, Yape Bolivia, iO and Tenpo are going to be operating. The logic -- part of the logic -- well, most of the logic is to leverage on tech capabilities, knowledge of the market and so on. And part of the logic is what you just said. Is there -- are there any possibilities to grow elsewhere?

The next question comes from Renato Meloni with Autonomous Research.

Congrats on the results. My question is on growth, right? You had been mentioning earlier this year, there still expected retail growth to remain solid. But this quarter, we saw a nice pickup on wholesale lending. So I wonder if you could explain a bit the drivers for that you expect this to continue? And then if you see some upside to the loan growth guidance.

Renato, thank you for your words. And regarding your question on the wholesale growth, I'm pleased after anyone could help me in that sense. But what we've been -- so let me go a step back. If you were to look at our book in the last, I don't know, 5 years, it's been basically flattish and mostly in the corporate world or in the wholesale world because I would say that Peru has gone through the perfect storm over the last 5 years. COVID, then I don't know, 6 presidents in 5 years or whatever, a lack of stability and so on. And therefore, private investment in general, and this was across industries, really stalled.

We started to see, and I believe we commented in last call, private investment grew double digits. I believe it was 11% last year. And that has kept -- that pace has -- so private investment has been -- has kept its pace this quarter -- the last quarter, sorry. And what has happened on the other hand, is that the domestic demand, as Alejandro mentioned, has been growing between 4% to 5% consistently over the last, I believe, it's 6 quarters. So across industries, there are companies that are operating at full capacity. So that's the main reason for loan growth in the wholesale portfolio.

That's perfect. But if you also consider this positive economic background that you mentioned, don't you think that the 8.5% loan growth guidance for the year might be a bit too conservative?

Could be, yes. But again, on the other hand -- you're right. On the other hand, the uncertainty that we mentioned at the beginning regarding global uncertainty, definitely, oil prices are going to -- Peru is a net importer. So oil prices could hit the economy and the uncertainty because of the elections, and we're going back basically to somehow a binary scenario, could bring some slowdown in that sense. We will have much more clarity after the second round.

The next question comes from Lindsey Shema with Goldman Sachs.

Congrats on the results. First, on deposits, we saw a really favorable improvement in deposit mix, which was partially attributed to deposits from the pension fund withdrawal. First off, how much would you attribute to pension fund withdrawal deposits? I know the last time we had talked, it was running pretty strong and you captured a good percentage of the liquidity into the system. And then also, how sticky would you consider those deposits? Is it something that we can expect as kind of a tailwind going forward? And then I have a second question, but I'll ask after that.

Sure. Thank you, Lindsey. Alejandro, can you take that one?

Sure. So yes, we did capture an important part of the withdrawal of the pension plan, but it's money that starts to get used and reduces over the following months. I would say that of the growth that we've seen in our deposit base, around half of it has been related to the pension fund withdrawals. The other half of it is our transactional capabilities and people operating in our principality and people operating in our system, in an economy that is slowly but turning more and more or less cash driven. So the money remains in the accounts.

So I think there's a structural reason why we've been growing steadily on that side, plus there's also this pension fund withdrawal that we should see decrease during this year and probably basically disappear. And it's also related to the prior question, it's also part of some of the retail repayments that we've seen. People use that money to repay retail and has an impact on the retail growth in the first quarter. But I would say, again, half and half between pension fund withdrawals and more structural reasons.

That was very clear. And then my second question is just on operating leverage and expenses at Yape. I mean, saw a pretty solid increase in operating leverage. How much of that was kind of just seasonality in expenses? How much is sustainable, especially with this new digital bank initiative? And then you mentioned that you could see some material impacts from that. Is that on the expense side? Is that on revenue growth because you're talking about going into different markets, expanding on that end? Just kind of what are the impacts there?

Francesca, can you take that one or Alejandro, whoever?

Yes. So for sure, there's a seasonality end of the year and also the elections, Yape has been very active in the branding positioning around the long-term view for growth for the country. So that's one part of the seasonality. But you're spot on in terms of there's still a lot of technological capability and investment being built in Yape around lending, around distribution, around the internationalization of the platform. So we're very mindful of the expenses. So they are not exceeding our expectations in terms of what we are planning for growth, for revenue and cost as well. So I would say under control, but yes, there's still investments to be done.

And maybe complementing that, Lindsey, how we see this as far as income grows at a faster pace than expenses, we're okay. We really believe that Yape in 2, 3 years should be operating at a much lower cost to income, which is what we care about it. And we'll have also an impact -- this actually is a double impact. So the cost to income will be lower. Yape will be a much more relevant business within Credicorp, Therefore, the positive impact in cost to income overall.

The next question comes from Carlos Gomez-Lopez with HSBC.

Let me join in the congratulations to Alejandro. You've been here for such a short time, we'll miss you, but congratulations. And congratulations in particular, for the increase in the margin. You've been telling us it was going to go up. We said it would not, but it went. So congratulations on that.

My question would be again on the asset quality and the cost of risk, which is lower this time. Could you please quantify what those recoveries in the corporate portfolio would be like? I mean when I look at the numbers, I guess your number is $120 million, $140 million lower than what we have expected. How much did you recover? Is that $40 million, $50 million, $60 million? Could you quantify that amount?

Cesar?

Thank you. In a usual month at BCP, you have a cost of risk of wholesale between 0.1%, 0.2%. The last quarter of last year was unusually high at 0.5%. And in this quarter was minus 0.1%. So you can say between 20 and maximum 30 basis points impact as a difference between what is usual. In relation to the last quarter, it's very significant, but the last quarter of last year was unusually high for the special cases that I previously described.

Okay. So 20 or 30 basis points on the wholesale portfolio?

Yes.

And if I can ask a question on Yape and we understand that the Central Bank is bringing in UPI from India. Could you tell us what impact, positive or negative that might have on your business?

Fran, can you take that one, please?

Yes, Carlos. Definitely, there's two views or two dimensions around the UPI. So we do believe that there is still an opportunity to capture cash. Still Peru is a cash-based economy. So there is potential to grow in transactions. And having said that, of course, there's going to be other players, new entrants in this payment ecosystem. But if you look at Yape's results and Yape's plans over time of being a super app and now a neobank to that, we have consistently been able to cross-sell more products. We're almost reaching three features per active users in Yape, different features, not just payments, but whether it's utilities or lending. So it gives us an opportunity to tap into a bigger market. And this is the view we're having, and we're participating aggressively with the Central Bank in the pilot.

And the project could be another payment network or you would join the payment network or you will be connected?

We will definitely be connected. So this is a completely interoperable system, and we could have our own closed loop for our own transactions wherever we want -- we believe this is better, whether it's a UX experience or, of course, if it's a cost issue, but it makes the market bigger because it becomes -- everything becomes interoperable.

The next question comes from Andres Soto with Santander.

My question also is around Yape, but this time around in terms of the contribution to Credicorp. When I look at the contribution to revenue, it's already at 8% for the quarter. Contribution to EBITDA is at 7%. So I have three separate questions around these numbers. The first one is, previously, you have mentioned that you expected disruptive initiatives to represent 10% of Credicorp revenue. Yape alone is already almost at that level. So what will be your new target for your disruptive initiatives in terms of the revenue contribution to Credicorp?

Andres, great question. All yours, Francesca.

So initially, we've shared many times with you in the Investor Days and the digital conversations we've been having. We set ourselves a target 4 years ago to represent 10% of risk-adjusted income for Credicorp. We're very happy, of course, as you mentioned, that Yape is one of the big ones. And our initial expectation was once these initiatives got into specific growth, they would graduate into more mature businesses.

In the case of Yape, what we are seeing is that it's still offering growth at a much faster pace than the other lines of businesses that are more incumbent. So we are actually today working around what the new North metric of that would be. And as you know, we're going to set aggressive metrics in terms of the contribution of the initiatives. Having said that, we're also beginning to see relevant contributions. Of course, they're smaller around Culqi, around other initiatives as Garda, what we've mentioned before. And we are currently reviewing to set a new appetite for the next 4 years or 3 years.

Thank you, Francesca. And the metric will be still around revenue because for Yape specifically, the number for contribution to profitability is almost the same as for revenue. So in my numbers, I have that Yape could represent as much as 30% of earnings of Credicorp by 2028. And do you see any reasons for that not to happen? Or in terms of how you measure your digital appetite will be still revenue the relevant metric or you will start looking at profitability?

So we're actually going to look at two things. One is the portfolio for disruptive initiatives. We think revenue is still the correct metric. And as you remember, we also set limits in terms of investments around ROE and around cost to income, which is something that we are constantly looking at and reviewing. But once we have a venture that is profitable, of course, we're going to set profitability indicators as well. And once we have this much clearer, we'll share what initiatives actually contribute to the limits of whether it's ROE or cost to income or the amount of cash expenditures and ones that need still time to mature where revenue adjusted income is the right metric. So this is a work in progress, and we will have this clear for the next 2 months or 3 months.

Exactly. Just to complement Francesca, Andres, and I don't remember if I said goodbye at the beginning. Not goodbye, good morning, Andres. We're exactly in that process. When we set that goal, it was 2, 3 years ago, we -- there was a lot of uncertainty because these are disruptive initiatives. As we all know, Yape has been quite a success. It is, I would say, much more advanced in terms of results than what we originally expected in terms of size of the results and timing of the results. And we're in that -- exactly in that process. Should we start measuring something and providing something different to the market. And that's the process. We hope that by next quarter, we will share that with you. And just a quick comment. We do expect this year that the overall disruptive initiatives ROE are going to be accretive to Credicorp's ROE.

Perfect. And on that note, Gianfranco, to setting new targets. I think that the other new target that we need to hear from you is regarding the overall medium-term target for Credicorp as a whole. In my numbers, if Yape is bound to represent, as I said, 30% of earnings, that will represent -- that will imply that Credicorp ROE by 2028 is going to be 25%. So the 19.5% is extremely, extremely conservative.

I'm taking note so as to set goals for the team. No, jokes aside. Remember last call that when we provided the -- actually, Alejandro provided guidance. He said, which is all of us, that by next call, after the results of the elections, we -- depending on the results, we may provide a what we call a sustainable ROE that might be in north of 20%. So let's wait. We're, I don't know, 3, 4 months away from that, and let's see what happens. And at the same time, we're working on what Francesca just mentioned.

Congratulations to Alejandro on his new responsibilities.

The next question comes from Yuri Fernandes with JPMorgan.

Congrats, Ignacio and also Alejandro. So repeating the words of everybody here. I'm going to miss you, Alejandro. So just a follow-up on trying to match two different questions on the call, margins and cost of risk for the guidance on risk adjusted, right? So what I understood from the call is cost of risk was low on wholesale and all the seasonality and you're growing, so cost of risk should move up, but you feel very comfortable with asset quality. But margins, the funding question, I think it's good, right? You have a very good funding. I think that helps.

And on the asset mix, this quarter, another question was wholesale, right? You're growing more on wholesale after years of not growing, and now it's going to be coming from retail. So the way I see here is there is upside risk for your margins. and correct me if you disagree, but cost of risk should also move up. Thinking those things together, Gianfranco, do you believe like you can continue to have your risk-adjusted NIM above the guidance as we are seeing here? Because, again, asset quality has been good, NIMs could have an upside. So just trying to understand if the guidance for risk-adjusted margins would be a little bit better or at least stay on the high level that we are seeing this quarter.

Yes, again, if there wasn't this uncertainty -- global uncertainty and the political situation in Peru, maybe we would have provided a new guidance today. So I will be providing a strong yes to you. But there are two ifs -- too many ifs, we believe as we speak. So everything tells us that your question is totally valid and your hypothesis is correct, but we'd rather wait and see really. And sorry for being so vague in my response, but that's what we feel today, what we believe.

No. It helps to understand the potential upside risk, but you are somewhat being conservative given the uncertainties in the scenario. It helps us here. If I may just a second one.

Sorry, this is Alejandro. I'm going to miss you too, Yuri. So no, I just wanted to say that your assumption is correct in the sense that given the low cost of risk we're experiencing and the strong NIMs, we should be on the upper side of the risk-adjusted NIM for the year. But again, as Gianfranco has mentioned, there are a lot of questions still out there. But we believe we can have a risk-adjusted NIM that continues to improve in the coming quarters.

If I may, just a second one, quick one. Just thinking about the profitability of the subsidiaries, right, when you go to Credicorp Capital, Pacifico or Mibanco, well, BCP was amazing this quarter. All the subsidiaries, they are running on levels of ROEs that historically, I believe, is the number that you usually mentioned. I think maybe Pacifico is a little bit below the 20s, but very close to that. Maybe to Gianfranco, like where do you see upside risk other than Yape on the subsidiaries? Do you think like there is room for further improvements on profitability of any of the subsidiaries? Or most of your take here is maybe Yape being the main driver for further profitability improvement for the group?

Great question, Yuri. And specifically on Pacifico, what we believe, and we've been vocal about it is that Pacifico over the last couple of years, its ROE has been over, I believe, 25%. We believe that's not sustainable. What we believe is it's sustainable, it's around 20%, which is where it is today. About the other subsidiaries, Mibanco is where we want to have it in terms of ROE. Maybe at Credicorp Capital, there's a potential opportunity to slightly increase ROE, even though we do have opportunities for growth there. So we might be investing a little bit more. And you're right, Yape and -- Yape is going to be a driver for sure. But also bear in mind, as I just mentioned, that the overall disruptive initiatives are being accretive. And Yape is the most obvious one, but there are others that they're either positive already or less negative and reaching breakeven. So overall, there might be a further positive impact going forward.

Congrats on the execution all those years.

There appears there are no further questions at this time. I will now turn the call back over to Mr. Gianfranco Ferrari, Chief Executive Officer, for closing remarks.

Thank you. Let me close by putting things in perspective and reflecting on the strength of our franchise. Credicorp has been around for over 30 years. And through BCP, we have more than 135 years of experience navigating complex and often volatile environments. Over that time, we've played a key role in supporting Peru's development, consistently working to expand access to financial services and advance the progress of individuals, businesses and communities. This commitment is deeply connected to our mission of improving lives through financial inclusion, and it is what has allowed us to build a resilient institution with a truly long-term perspective.

Looking ahead, we continue to see compelling opportunities in the region. The external backdrop remains favorable with what could evolve into a new commodity super cycle and countries such as Peru and Chile, particularly well positioned to benefit. Peru, in particular, is entering this period with healthy domestic demand, low inflation and a financial system that remains solid and liquid. These conditions create an important opportunity to accelerate investment, employment and productivity over the coming years.

Credicorp is uniquely positioned to capture that opportunity. This quarter is another clear reflection of that position with record high results that demonstrate both the consistency and strength of our franchise. At the same time, we have increasing clarity around our strategic priorities and are seeing tangible progress across our key growth anchors, reinforcing our confidence in our ability to sustain performance over the medium term while continuing to support our clients and the broader economy.

Before closing, I would like to briefly step back from the short-term political debate. While the leading candidates -- presidential candidates represent different visions for the country's economic future, we believe Peru's institutional framework and system of checks and balances continue to provide important safeguards for stability and policy continuity. What matters most now is preserving the conditions that allow the country to move forward while continuing to advance key social priorities such as education, health care, infrastructure and poverty reduction. Peru has a unique opportunity to achieve a more profound and lasting transformation, and it cannot afford to lose that momentum.

Thank you for your time today, and we look forward to speaking with you again next quarter.

Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect.

Good morning, everyone. I would like to welcome you to the Credicorp Limited Fourth Quarter 2025 Conference Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Credicorp's website. Today's conference call is being recorded. [Operator Instructions] Now it is my pleasure to turn the conference over to Credicorp's IRO, Milagros Cigüeñas. You may begin.

Thank you, and good morning, everyone. Speaking on today's call will be Gianfranco Ferrari, our Chief Executive Officer; and Alejandro Perez-Reyes, our Chief Financial Officer. Participating in the Q&A session will also be Francesca Raffo, Chief Innovation Officer; Cesar Rios, Chief Risk Officer; Eduardo Montero, Head of Insurance and Pensions; and Jose [ Navire], Mibanco, Chief Financial Officer.

Before we proceed, I would like to make the following -- sorry, and also here in the Q&A session will be Diego Cavero, BCP CEO or Head of [indiscernible] banking.

Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Gianfranco Ferrari will begin the call with remarks on key strategic highlights for the year 2025, our recent macro environment and a brief overview of our quarterly results. Followed by Alejandro Perez-Reyes, who will provide a more detailed analysis of key macroeconomic indicators, our financial performance and our outlook for 2026. Gianfranco, please go ahead.

Thank you, Milagros, and good morning, everyone. We closed 2025 on a very solid footing, entering the new year in a stronger position than we did at the end of 2024. This was a year where the hard work of our teams, the clarity of our strategy and the strength of our ecosystem came together to deliver results, not just in financial terms, but in how we showed up for our clients, our people and the markets we serve.

The backdrop was favorable. Peru's economy exceeded expectations with GDP growing around 3.5%, fueled by strong domestic demand, resilient consumption and record high exports above $90 billion.

Key commodity prices further increased to new highs, particularly copper, silver and gold, supporting investment flows and sentiment. The estimated mining investment pipeline for 2025 stands at $64 billion across multiple minerals, up 17% from 2024. Inflation remained low. Monetary policy became more supportive and employment and real income trends improved. Domestic demand significantly exceeded GDP and grew around 6%, supported by stronger confidence and access to credit.

Private investment exceeded expectations, expanding close to 10%, its strongest performance in 13 years, excluding the pandemic.

Peru enters 2026 from a fundamentally stronger position than in previous election years. In 2021, we faced an economic crisis, a public health crisis and deep institutional uncertainty. Today, we have a stable macro framework, strong external accounts supported by high commodity prices and record exports and a more pragmatic tone from policymakers. That doesn't mean there won't be noise in the political arena, but it does mean we're starting from a position of strength.

Across the region, the operating environment remained dynamic but generally supportive. In Colombia, growth came in at around 2.7%, supported by consumption, while investment remains subdued. More recently, new challenges have arisen after the increase of the minimum wage. In Chile, GDP also expanded around 2.7%, driven primarily by investment and to a lesser extent, by consumption, while inflation stood slightly above target. And in Bolivia, GDP contracted for a second consecutive year, while inflation doubled to around 20%, although the new government from Pro Pass has taken positive pragmatic first steps towards a favorable transition.

The economic decline, however, contrasts sharply with the country's strong digital adoption, where Yape has consolidated its position as the leading digital wallet.

Let me now shift to how our businesses performed in 2025 and the progress we've made across the group. Alejandro will provide more details in a moment.

In Universal Banking, BCP continued to reinforce its leadership in Peru, underpinned by disciplined execution, operational excellence and an increasingly seamless digital experience. Our transition towards a more efficient multichannel distribution model, supported by enhanced data and AI capabilities drove growth in retail lending, enabling us to serve over 3.2 million loan clients. We also reinforced our transactional leadership while consolidating our NPS advantage, reaffirming BCP's position as the bank of choice for millions of Peruvians.

In microfinance, we delivered double-digit loan growth and increased our profitability, strengthening the resilience of the business and setting the foundation for sustainable growth. In Peru, Mibanco consolidated its leadership and strengthened profitability by deepening its hybrid model, combining in-person advisory with digital tools and AI-driven risk analytics. This drove higher productivity and growth in smaller ticket loans, aligned with our risk appetite.

We also diversified revenue through transactional services and saving deposits, increasing fee income and strengthening our funding base. In Colombia, despite a challenging environment, Mibanco delivered double-digit loan growth and improved profitability, supported by disciplined risk management and operational efficiency.

In the insurance and pensions business, Grupo Pacifico increased its policyholders by 50% in the last 3 years, supported by integrated distribution and digital innovation, including one-click claims.

In health, the full consolidation of Pacifico Salud enabled broader access and stronger medical service offerings. In pensions, despite systemic challenges, Prima made significant strides in digital adoption, efficiency and client experience, improving NPS by 3 points.

In Investment Management and Advisory, our diversified portfolio and the strategic transformation executed over recent years delivered solid and sustainable results. Assets under management surpassed the $20 billion mark in Wealth Management and in Wealth Management and increased nearly 35% in Asset Management. We further strengthened our platform with Viva, our wealth tech offering in Peru, Colombia, Chile, which now manages over $1.5 billion in assets and is a key growth driver in the affluent segment, combining a digital-first experience with personalized advisory through a hybrid model.

In capital markets, the launch of our financial corporation in Colombia, Core, marked a key milestone, enhancing our local capabilities and advancing our regional strategy.

Regarding our innovation portfolio, risk-adjusted revenues represented 8.1% by the fourth quarter, advancing towards our 10% ambition. Yape, our most mature disruptive initiative, closed the year with nearly 16 million monthly active users who engage with the platform an average of 66 times per month. a testament to its growing role in driving both financial inclusion and monetization.

Lending activity scaled meaningfully with 4.1 million clients with a loan disbursed, highlighting the significant growth potential that remains ahead. In Chile, Tenpo reached an important milestone, surpassing 2.5 million clients and becoming the country's first neobank following the approval of its banking license in January. Meanwhile, [ Monocera ] continued to scale efficiently, enabling modular low-cost insurance distribution across multiple channels.

What unites these businesses is a disciplined purpose-driven approach to expanding access to financial services across the region. This same strategic clarity guides our entire organization, shaping day-to-day execution and long-term capital allocation through four core pillars: expanding financial inclusion across geographies and client segments, deepening risk and capital discipline as a foundation for profitable growth, scaling AI, data and digital platforms to unlock productivity, client experience and engagement and optimize business decisions and building trust and leadership in every market we serve through client experience and operational excellence.

Aligned with these priorities, we advanced key M&A moves. We took full ownership of our medical insurance business, which demonstrated strong strategic fit and execution discipline. We also announced at year-end an agreement to acquire [ Helm Bank ]. Let me take a moment and discuss the strategic rationale of this addition to Credicorp.

This transaction is fully aligned with our strategy to strengthen Credicorp's cross-border capabilities through a focused niche approach, enhancing our U.S. offering without pursuing a universal banking model in that market. We agreed to acquire 100% of First [ Helm Bank ] for $180 million, fully cash funded and consistent with our disciplined capital allocation framework. Helm contributes over $1 billion in assets and a solid presence in Florida, serving both the local community and a predominantly Latin American client base.

This move reflects a clear structural trend. Latin America clients continue to migrate assets to the U.S., where Florida stands out as a highly convenient location for investment, banking services and real estate exposure. Our target market is equally clear.

On the deposit side, we focus on affluent clients and regional corporates, while on the lending side, our priority segments are affluent LatAm clients and Florida-based residents. Helm meaningfully strengthens our platform by adding a fully licensed FDIC insured bank with core transactional capabilities that we do not currently offer in the U.S. while our Miami presence today focuses on corporate banking and private banking through our registered investment adviser and broker-dealer services.

Helm fills the gap with a franchise that offers full daily banking, residential real estate financing and credit cards, thus perfectly complementing our value proposition for internationally active clients.

With that, let me turn to our financial results. We delivered strong financial performance in the fourth quarter and for the full year, underscoring the strength of our execution and the favorable operating momentum across our businesses. We closed the quarter with a 16.9% ROE and 19% for the full year, reflecting not only record high net income, but also the continued diversification of our revenue sources across banking, transactional services, insurance, health, asset management and our digital platforms, strengthening the quality and resilience of our earnings.

These strong results were broad-based and consistent with our strategic priorities. Universal Banking and Insurance and pensions delivered very strong performance, while microfinance continued progressing towards its medium-term profitability target. Fee-based and transactional income continued to grow, underscoring the scalability of our platform.

Our results were supported by healthy momentum in core revenues with margins benefiting from a lower cost of funding and an improved funding mix alongside continued improvements in risk metrics. Risk-adjusted NIM stood at 5.5% for the quarter, supported by better asset quality and a structurally efficient low-cost funding base.

On the liability side, we continue to strengthen our deposit mix, reflecting strong digital engagement and sustained client trust. Importantly, these results were achieved while maintaining strong capital and solvency levels, reinforcing the robustness of our balance sheet. From an operational standpoint, our efficiency ratio came in at 49% in the fourth quarter, well within our expected range.

Overall, these results reflect a business that is more resilient, more diversified and better positioned for sustainable growth while continuing to generate a positive local impact by expanding access to financial services and supporting economic activity across the region.

I will now turn the call over to Alejandro, who will go into further detail on the macro environment, each of our operating businesses and our consolidated results. Alejandro?

Thank you, Gianfranco, and good morning, everyone. As Gianfranco mentioned, we delivered strong overall operating results, including a record high net income, which reflects solid growth in risk-adjusted revenue streams in our business ecosystem. As I discuss the quarter's highlights, I will focus on the quarter-over-quarter operating trends. Loans measured in quarter-end balances increased 3.6%. This uptick was driven primarily by BCP through both retail and wholesale banking and by Mibanco. Asset quality has improved across the board, and Credicorp's NPL ratio stood at 4.5% this quarter. The cost of risk stood at 1.8% on the back of fortified risk management and supported by improvements in payment performance and in the Peruvian economy.

Net interest income increased 4.2%, spurred by an expansion in interest income, mainly driven by loan portfolio growth and by a contraction in interest expenses after interest rates fell and low-cost deposits expanded and accounted for 61.4% of the funding base. In this context, NIM stood at 6.6%.

Other core income grew 6%. Fee income increased 5.2%, boosted by transactional activity at Yape and BCP. Gains on FX transactions rose 8.2% through higher volumes at BCP. Lastly, the insurance underwriting result fell 17.4%, mainly reflecting normalization in the disability and survivorship line of the Life business, which registered a base effect for favorable extraordinary reversals last quarter.

Excluding this line, underlying performance across our insurance operations remained solid with insurance underwriting results remaining relatively stable this quarter. All in all, we delivered 16.9% ROE this quarter, supported by the aforementioned operational dynamics while maintaining sound capital levels. On cumulative terms, ROE stood at 19%.

Next slide, please. Peru's macroeconomic performance in 2025 was strong despite heightened global uncertainty and lingering political concerns following President Boluarte's impeachment. GDP grew around 3% year-on-year in the fourth quarter, slightly lower than the rate observed in the previous period as the solid performance of non-primary sectors partially offset a slowdown in primary activities. The fishing sector registered a sharp contraction given that this year's cat quota was below last year's. Meanwhile, domestic demand remained robust, expanding more than 5% year-on-year.

High frequency indicators point to a continued broad-based strengthening of domestic demand. Most metrics ranging from consumption-related variables to investment and external conditions continue to post double-digit year-over-year growth.

In full year terms, GDP expanded roughly 3.5% in 2025, while domestic demand grew close to 6%, supported by the economic mid-cycle momentum and a boost from terms of trade, which reached their highest level in 75 years.

A similar performance is expected in 2026, marking a third consecutive year of GDP growth around 3.5% with domestic demand expanding above 4%. There is meaningful upside potential. Copper and gold prices recently reached historical highs and stand between 30% and 50% higher than their 2025 average, respectively. If they remain elevated and the post-election environment delivers greater policy predictability, improved governance and a more supportive backdrop for private investment, Peru could grow above its century long average of 4%.

Next slide, please. The Federal Reserve lowered its policy rate 75 basis points last year for a cumulative reduction of 175 basis points since 2024. This year, Fed fund futures are pricing in two additional rate reductions throughout the second half of the year. However, given the resilience of the U.S. economy and institutional changes ahead, including the transition to new leadership as Chair Powell's term expires, there is considerable uncertainty regarding whether further cuts will ultimately materialize.

In Peru, the headline inflation rate closed 2025 at 1.5%, its lowest year-end level in 7 years. After lowering its rate by 350 basis points since September 2023, the Central Bank delivered its most recent rate cut last September, and the outlook for [ Fedalising ] remains uncertain as the policy rate is now broadly aligned with its neutral level and the economy is expanding close to potential.

In Colombia, inflation accelerated to 5.1% in December 2025. Following the 24% increase in the minimum wage, market participants revised their inflation forecast for 2026 upward and now expect a higher policy rate than previously anticipated. In fact, the Central Bank increased its rate by 100 basis points in its most recent meeting to 10.25%.

In Chile, the currency has been the strongest performer among emerging markets after a second electoral round in which Jose Antonio Gas secured a decisive victory and further supported by copper prices rallying to record high. The policy rate stands at 4.5%, and the Central Bank is expected to maintain a wait-and-see stance throughout the year.

Next slide, please. BCP achieved a full year ROE of 24.7%. These strong results demonstrate the company's strategic strength, such as clear market leadership, disciplined risk management, unique digital services and advanced technology and transactional capabilities. These advantages contribute to robust local funding, diverse revenue streams and increased principality with our clients.

On a quarter-over-quarter basis, total loans measured in quarter-end balances rose 1.7%. In FX-neutral terms, loan growth stood at 2.7%, driven by both retail and wholesale banking. Notably, longer-term corporate loans began to recover this quarter despite political uncertainty. NIM remained relatively stable at 6.1%, reflecting resilience in the context of lower interest rates. Other core income grew 5.9%, mainly due to fee income where Yape and other payments and transactional services remain key drivers. NPL volumes declined 3.6%, mainly due to debt repayments by wholesale clients in construction and transportation sectors and due to higher write-offs and repayments of loans under judicial recovery by SME clients. Provisions rose 9.9%, reflecting dynamics in retail banking and a specific impact within Wholesale Banking. In Retail Banking, provisions for individuals remained stable but rose for SMEs. Core underlying risk in SME segments remained stable, but there was an increase in write-offs in SME PM, which drove the increase in total provisioning.

Within Wholesale Banking, risk associated with indirect exposure to certain clients in the construction sector rose. The cost of risk edged up to 1.4%, supported by favorable macroeconomic conditions in Peru. In this context, BCP's risk-adjusted NIM stood at 5.2%.

From a full year perspective, I would like to highlight the following dynamics. Loan balances grew 3.8%. However, loan growth in FX-neutral terms reached 7.8%, led primarily by retail segments, particularly individuals, reflecting the strong momentum of internal demand. It is worth highlighting the strong performance of mortgages, which grew 9.9%, propelled in part by lower interest rates.

In Wholesale Banking, loan growth was fueled by the same dynamics seen quarter-over-quarter, where recovery in private investment was a primary catalyst. NPLs contracted across BCP segments, led primarily by a decrease in Wholesale Banking, which raised debt repayments by corporate clients and secondarily by SMEs and individuals.

In individuals, the reduction in NPLs was attributable to a decrease in debt refinancing. This evolution, which was supported by a positive economic backdrop, reflects improvements in loan origination and collections management. NIM stood at 5.8% as lower interest rates negatively impacted the yield on interest-earning assets. This was partially offset by a decline in the funding cost. The cost of risk fell across segments in individuals and SME PME driven by improvements in payment performance after lower risk vintages increased their share of total loans, supported by a strengthening economic backdrop.

Other core income rose 15.1%. This solid performance was driven by growth in transactions to Yape, an uptick in fee income at BCP and an increase in gains on FX transactions, which grew on the back of higher transacted volumes. The ratio of other core income to assets continued to rise, reflecting the effectiveness of our strategy to diversify BCP's revenue sources. This progress is supported by ongoing relevant investments that strengthen our transactional capabilities and digital platforms.

Key projects on this front are [ Mainfree ], Mobile app 3.0, cybersecurity, among others. As a result, operational expenses and personnel expenses in particular, led the efficiency ratio to stand at 39.7%.

Next slide, please. Yape continues to consolidate its role as a leading driver of longer-term value creation. With nearly 60 million monthly active users, Yape has become the country's most loved and recognized brand. This connection with users has translated into an exceptional NPS, which peaked at 81 points by year-end, well above traditional financial services benchmarks. Our advances have reinforced engagement and users now conduct 66 transactions per month on average.

From a monetization perspective, monthly revenue per MAU continued to expand at a rapid pace, reaching PEN 9.6 as of December 25. Monthly expenses per MAU in turn were fueled largely by seasonal charges. Annually, average monthly revenue per MAU rose 62%, far surpassing the 15% growth in monthly expenses per MAU, demonstrating strong operating leverage. Payments remain the largest contributor, accounting for over half of total revenues. If benchmarked against the banking system, Yape fee generation would rank within the top 5 institutions in Peru. A strong growth in QR payments, bill payments and checkout solutions are evidence of increasing user adoption and revenue generated total payment volume almost doubled year-over-year. Lending has become the main driver of growth within Yape financial business now accounting for 23% of revenues, reflecting the platform's ability to translate engagement, data and risk management capabilities into scalable credit solutions. [indiscernible] disbursed over 16 million loans, expanding create access to 4.1 million users, of whom almost 1/3 are first-time borrowers.

Looking ahead, Yape represents one of Credicorp's most compelling sources of assets and strategic optionality by driving monetization across its existing user base and continue to leverage engagement and data as a powerful competitive mode terpenes strategic relevance within the ecosystem.

As of the fourth quarter of 2025, Yape doubled year-over-year its contribution to Credicorp's risk-adjusted revenue, which stood at 7.2%. This progress reinforces Yape trajectory to become our second largest contributor while maintaining a strong focus on financial inclusion.

Next slide, please. As [indiscernible] micro finance system continues to regain momentum amid the country's steady economic recovery, sector performance has strengthened notably. In this context, Mibanco performed its peers by deepening its hybrid model, gaining productivity and strengthening credit risk management. As a result, Mibanco delivered double-digit loan growth and robust profitability of 20% this quarter.

I would like to highlight key quarter-over-quarter dynamics. Loans grew 3.9% in quarter end balances, writing an upstream in loan disbursement, which hit a new all-time high in October. The NPL ratio continued its downward trajectory over the past year, falling to 5.3%, an 11-year low. NIM peaked at 15.2% and boosted by a shift in the mix towards small ticket higher yield loans.

In parallel, the cost of risk fell 44 basis points to stand at 4.8%. While risk-adjusted NIM reached a new 4-year high of 11.6%. From a full year perspective, loans measured in quarter end balances grew 11.2%. Our active pricing management, coupled with a decrease in the cost of funding, boosted NIM. The cost of risk fell 64 basis points as lower risk vintages continue to gain traction and now account for 84% of total loans.

Operating expenses remained under control and efficiency stood at 50.9%, supported by ongoing investments in strategic projects. In this context, Mibanco's full year contribution to ROE was 16.6%. Transitioning towards our target for medium-term ROE in the low 20s. Mibanco Colombia's results, which were supported by a more favorable economic environment for the micro finance sector continue to rise and registered double-digit loan growth year-over-year, bolstered by control risk management and optimize efficiency. As a result, profitability stood at 13.2% at quarter end and 10.3% for the full year. compared with losses recorded in 2024.

Next slide, please. Grupo Pacifico delivered another year of strong performance in 2025, achieving a solid ROE of 21.4%, supported by robust commercial dynamics across businesses. Growth reflected the expansion in our bancassurance channels and an uptick in the issuance of optional policies, reinforcing the value of our strategy to grow in retail segment.

On a quarterly basis, net income dropped 1% primarily impacted by a decrease in the insurance underwriting results, particularly in the Life business due to a base effect in the disability and survivorship line following extraordinary regularizations last quarter, and by higher operating expenses due to seasonality. This impact were partially offset by a decrease in the net loss on securities.

From a full year perspective, Grupo Pacifico delivered solid performance. Net income rose 13% and primarily on the back of Pacifico's full consolidation of the an Medical transaction. Excluding the consolidation effect, net income increased 4%, mainly driven by a 9% rise in insurance underwriting results. It is important to note that the results of the ongoing operating business grew 21%, partially offset by the contraction of the disability and survivorship line, which did not actively operate in 2025.

If we exclude D&S from our insurance underwriting results, the underwriting performance of the ongoing operating business was driven mainly by the Life business through a favorable performance in created individual lines and by the P&C business, particularly through better results in personal lines and cars. These operating results were partially offset by an increase in the net loss on securities, which was impacted by credit downgrades on a couple of assets in the investment portfolio and by higher operating expenses.

Our Corporate health insurance and medical services operations posted solid results and are well positioned for a strong 2026. Moving forward, we intend to bolster our commitment to providing high-quality products and services for both insurance.

Next slide, please. For our Investment Management and advisory business, full year profitability remained solid with ROE increasing 110 basis points to stand at 16.4%. Let me begin with a brief overview of this quarter dynamics and then move to the full year view on the underlying structural trends.

Quarter results showed mixed dynamics. Revenues benefited from stronger performance in Asset Management and improved treasury results. but declined in Wealth Management due to lower market rates and in capital markets due to a base effect after a high result last quarter. Expenses increased due to seasonal operating dynamics.

Turning to the full year view. Net income rose 2% over the period. This result was driven by a strong year in capital markets, which was led by an upstream activity, mainly through the trading unit. Solid performance in Asset Management, where AUM grew 35% and an improvement in treasury results. These positive dynamics were partially offset by higher operating expenses and lower revenues in Wealth Management despite a 24% growth in AUM.

Next slide, please. Now I'd like to review Credicorp's consolidated evolution regarding quarter-over-quarter dynamics. Growth in cash balances was fueled mainly by higher liquidity, which rose on the back of inflows from pension fund withdrawal. Nonetheless, within a mention of our loan portfolio, helped anchor our yields on interest-earning assets, which remained relatively stable with a minor 4 basis point increase.

On the liability side, Low-cost deposit share of total funding rose significantly, right in the way for higher liquidity in the market. More expensive sources of funding in turn raised a reduction in their share in our funding structure, with the exception of bonds who share grew on the back of a subordinated bond issuance by BCP. In this context, the funding costs dropped 12 basis points.

On a full year basis, loan growth, which was driven mainly by retail segments led the interest-earning asset mix to generate higher yields despite cash buildup. In this context, the yield on interest-earning assets rose 7 basis points.

On the liability side, interest rate dynamics complemented by a decrease in bonds and interest-bearing deposit share in our funding structure led the funding cost to drop 25 basis points. In this context, NIM stood at 6.3% on a full year basis. As the positive credit cycle consolidates, growth in retail lending powered by our strength and risk management and digital distribution capabilities should sustain means growth.

Next slide, please. Moving on to loan portfolio quality. Asset quality continued to improve this quarter as NPL volumes contracted across segments. The NPL ratio at quarter end was a low 4.5% and which is below the levels reported prior to the 2023 recession. Amid a steady economic recovery in the past year provisions have dropped over the past 12 months due to an improvement in payment performance and successful risk management measures, both at BCP and Mibanco. In this context, the NPL coverage ratio rose and stood at 112.4%.

Going forward, we will continue to accelerate retail origination while managing risk. Consequently, we expect loan growth to continue to recover its space and the cost of risk to rise slightly and remain within our appetite. Next slide, please. Core income showed solid sequential improvement in the quarter, supported by strong operating momentum. Net interest income increased 4.2% quarter-over-quarter. Supported by loan origination expansion and stable funding costs.

Other core income also contributed positively with fee income growing 5.2% quarter-over-quarter and FX gains rising 8.2%. These advances, which reflect higher activity at year-end, attest to consistently solid performance across core banking and transactional businesses.

On a full year basis, core income increased 6.4% and driven by diversified revenue streams. Net income rose 4.3% -- net interest income rose 4.3%, fee income 11.7% and FX gains 13.4%. The shift in the earnings mix and discuss credit cards progress in building a more resilient and scalable earning profile. Risk-adjusted NIM rose 51 basis points, standing at 5.8%. This evolution reflects how our pricing and risk management capabilities are becoming a competitive edge and enabling expansion into new market segments. The efficiency ratio for the year stood within guidance at 46.6%. Operating expenses grew 12%, fueled primarily by core businesses at BCP and by investments in our innovation portfolio.

Growth in core expenses at BCP was due mainly by an increase in personnel expenses related to commercial and technological and transactional capability development. Expenses for innovation portfolio rose 18.4% and led by Yape, Tenpo and Culqi, which represented 83% of disruptive expenses this year.

Next slide, please. ROE for the full year was 19%, supported by solid business performance and bolstered by the extraordinary gain from the [ Banmedica ] transaction in the first quarter. If we adjust for this transaction, ROE is 18.6% for the full year 2025.

Net income reached a record high even if we exclude the gain from the America transaction. We achieved this by capitalizing on our structural strength, differentiated the and transactional capabilities low cost of funding advantage and sustained improvements in risk management and loan portfolio growth, particularly in retail segments.

Now I will move on to our guidance. Next slide, please. We revised Peru GDP growth outlook to around 3.5% in 2026. We expect our total loan book to grow around 8.5% measured in quarter-end balances, amid a more dynamic economic backdrop and strengthen origination levels in 2025, we expect growth in balance sheet to continue accelerating this year, driven primarily by retail banking at BCP and [indiscernible].

The acceleration anticipated for loan growth and the shift in the mix towards retail should support NIM despite potential policy rate reductions in soles and dollars down the line. Accordingly, we expect NIM to stand between 6.4% to 6.7%. The cost of risk guidance is between 1.7% and 2.1%, this range reflects the 2025 improvements in asset quality indicators as well as the shift of our loan portfolio mix towards higher yielding segments. Given expected dynamics for NIM and cost of risk, risk-adjusted NIM should stand between 5.3% and 5.6%.

In 2026, we will continue to invest in the to transformation and disruptive initiatives to bolster our long-term competitive position. But we expect some of the efficiency for sale to begin to materialize. Given that, we expect the 2026 efficiency ratio to be situated between 45% and 46.5%.

Regarding noninterest income, we expect fee income growth to pick up and standing the low double digits as activity accelerates and our efforts to further diversify sources of income continue to gain traction. Although our underlying insurance business is expected to perform solidly the insurance underwriting results, which was bolstered by extraordinary reversals for the [ DNC ] [indiscernible] business in 2025 is expected to drop by high single digits. Excluding the [ DNS ] business, the result will grow by high single digits.

Finally, we expect our 2026 ROE to stand at around 19.5%. This year reflects solid core performance, sustained discipline on the risk front and continued revenue diversification. While local political uncertainties remain, we believe the fundamentals are in place to support this level of profitability. With these comments, I would like to open the Q&A session.

[Operator Instructions] Our first question comes from Ernesto Gabilondo from Bank of America.

My first question will be on the political outlook. Can you provide us with some update on the latest falls? What is the next date that we should be monitoring I was just looking to the [ Ipsos ] survey that was published some minutes ago and [ Rafael Lopez Aliaga ] is leading the pulse. So any color on who are the other potential candidates? What are the main proposals so far will be very helpful, especially as we are just 2 months for the election, right? And also related to this, when those Peru renovate Congress members, I think it will also be interesting. And then I will ask my second question after your response.

Yes, we just -- we read the -- I believe it's the same poll. Yes, [ Rafael Lopez Aliaga ] is leading with 12%, in the second place is Keiko Fujimori at 8%. And there's like -- I believe it's four candidates that are basically tied at 4%. Sorry, I said 4% [indiscernible] 8% and 4%, there for candidates around 4%. I would say that both Mr. Aliaga and Ms. Fujimori have pro market, the economic plans or government plans. Having said that, the issue is that still between and decided that people say that they will both blank, it's around 42%, which is very high still, so we're, I don't know, 2 months away from less than 2 months factory away from the elections, and that number is still very high. So the level of uncertainty is still there.

So that's -- I would say that's the environment. We should have pulse again in maybe a couple of weeks. We hope that those 42% of, let's say, undecided start to decide what the alert what their decision is, and we'll have more clarity in maybe 15 days.

Regarding the other part of the question, I would say -- I believe we've talked about it before. The positive side of this new election is that we're going back to a dual chamber, with senate and congress. We expect that to provide more, I would say, stability in terms of the political environment going forward.

On top of that, there are some thresholds that the parties need to reach in order to get seats at either the congress or see. So overall, we see regardless of [indiscernible] press, we see that the new structure -- political structure between executive power and legislative power should provide more stability for the country going forward.

Perfect. Just a follow-up on this one. When we know will be like the final candidate, I don't know if you already have the candidates or not. And also on this dual chamber with the Senate and Congress, the Board will also happen in April? Or when should we expect that?

Yes, yes. So starting with your second part of the question. Yes, everything is voted on April 12, yes, April 12. We already have the candidates definite, Don't ask me who they are because they are like 35% to 37%. So that's the situation.

Okay. No excellent. So then my second question is on your OpEx growth. So OpEx came at double digit during the quarter and the year. I believe you will continue with different strategic investments and strengthening Jay. But should we expect a little bit more moderate OpEx growth this year when compared to 2025.

And also related to this question, all the digital initiatives you are targeting to represent like 10% of adjusted revenues. But how are you thinking that could be moving going into 2027, 2028? I don't know if it's still too soon to provide a potential target for those years. And also related to this, how should we think about non-credited revenues or fees with all these digital initiatives paying off?

This is Alejandro. Thanks for the question. So regarding operating expenses, the day grown, as you mentioned, they are within our guidance, the level of expenses is related to the investments we're doing, both in innovation and in the core business to better serve our clients. And I mentioned a few of those before.

Going forward, we do expect to continue investing in these different initiatives. Having said that, I think we're going to start seeing more and more of the operational leverage of these initiatives. And right now, I've guided to a lower number for next year. And if you remember, in the Investor Day, we guided to a midterm, which is a 2- to 3-year term really of 42% in cost to income. So yes, we are expecting the increase in the income that is coming from all these initiatives to start to be felt in the ratio. So that's what we're expecting.

As for -- going forward, we haven't really guided a number on the impact. I mean I think we're going to get to the 10% this year as has been our appetite, and that should be achievable. And we haven't yet guided for a number going forward, but we do expect the current initiatives to continue to scale and continue to bring more income into Credicorp. So the reason why this change is that if you had -- if you were to have one of the initiatives leave what we call innovation, then that changes the actual number. But we haven't yet provided a new number for that, but all the current initiatives are scaling and growing in an important way.

Perfect. And just in terms of fees, given the monetization on Yape, should we expect that line in the double digits?

SP1 Yes. As I think I mentioned in my speech, we are expecting it to be in the double-digit area, the growth in fee income. .

Our next question comes from Brian Flores with Citibank.

Thank you for the opportunity. I have a question regarding Yape, right? Because lending now is representing over 20% of the revenue, which is more than double the contribution from the last quarter of '24. And I think you have mentioned that the portfolio is shifting towards multi installments, right, with longer durations. So I just wanted to understand connected with cost of risk. Is this shifting duration affecting the provisioning modeling for 2026. And also, I don't know if you could disclose the ROE target for Yape financial business segment versus the transactional side.

Yes. Maybe let me take the second part of the question, I'll ask [indiscernible] to answer the first one. We do not provide that breakdown regarding Yape and maybe as a segue to Sean's answer, bear in mind, risk-adjusted NIM, not only cost of risk. And in the Yape businesses, extremely relevant because, yes, the cost of this is much higher than the one of the traditional portfolio of the bank. But the risk-adjusted NIM is also much higher.

Actually, what Yape is evolving with different lines. At the beginning, the emphasis was in mono quota with a lot of experiments expanding the number of clients with very short term and small loans and as we understand the behavior of these clients, we are emphasizing now the multi quota that helps to build up portfolios much faster because we increased the duration from less than 1 month to more than 6 months and also increase the amount. And the expected cost of risk should remain very controlled because as a prerequisite, we began with a higher risk short-term duration loans. And as we mentioned previously, understand the behavior we scale the size and duration. And also, we are also increasing the participation in a small PMA business with very successful results.

So all in all, the risk-adjusted NIM should remain in comparable levels with probably a different composition of the cost of risk and the interest rates. A little bit less rate, a little less also cost of risk in the higher longer loans.

Perfect. And Gianfranco, if I may follow up. I think last quarter, you mentioned that generally during election years, we have our first part of the year. That tends to be a bit slower. But I would say maybe the end of the year also was with a very, I would say, healthy pace of growth. So I just wanted to check here, if you're sensing here that maybe we could have upside risks for growth. And if we are in line or EBIT ahead in terms of growth at this point of the year based on -- or comparing to your expectations?

Great question. And I bet if you provided the answer. Yes, this -- yes, we -- actually, in the last call, we shared what our chief economist the analysis our Chief Economy did a few months ago regarding your -- the [ FIM ]. This year, so far, -- that's not happening. The trend we're seeing in terms of economic activity is like there was -- this wasn't an election year.

And actually, I was reading earlier report by [ Apollo Cotoia ], which is one of the most renowned think tanks in Peru and the level of consumer confidence in February of 2026 is the highest since February 2020. So right before the pandemic. So yes, the positive sentiment around consumers, real salaries increased 3.7% last year formal employment increased 6% last year. So a long answer to your question, but the short answer is yes.

Our next question comes from Tito Labarta with Goldman Sachs.

Hi. Good morning, everyone. Thank you for the call. I guess, first, another follow-up on Yape, I mean you have guided for revenues tripling by 2028. But just how do you think about expenses for Yape, I assume they'll grow less than that. I don't know if you have any official guidance for how much expenses from Yape should grow over this time? And I guess what I'm trying to get to -- I mean, ultimately, I think Yape should be accretive to ROE. At the same time, you mentioned you will continue to invest in digital initiatives.

So net-net, if you think about Yape and then other digital initiatives combined with the investments in one -- and Yape to become more profitable that should be accretive to ROE. I don't know -- how much do the investments offset to some extent. So like net-net, how should we think about the potential accretion of ROE from those two things?

Yes, you're right. If you may recall, about 4 years ago [indiscernible] Digital Day, we said that the ROE from digital initiatives should be neutral by 2025 and should start to be positive like 2026. And definitely, we're going to reach that target. So this year, we expect the digital initiatives overall.

So obviously, Yape positive or negative. But overall, it's going to be positive starting this year. And the trend is that level of positive ROE should increase during the upcoming years.

Tito, this is Alejandro. Just to complement Gianfranco, costs the speed at which revenue per mile is increasing is much higher than the cost per mile and so Yape today has still a high cost to income, but we expect it in the next couple of years to actually reach levels below current BCP's cost to income. Cost to income. So it should start to have a very positive impact in cost-to-income in the next couple of years.

Okay. Great. And just in terms of quantifying, I mean, is it maybe 50 to 100 bps per year roughly more or less, I mean, just given, I think, excluding some of extraordinary adds in 25 ROEs around 18 for 19.5.

ROE, you mean?

Sort of accretion from...

Yes, it's a good. Yes, within that range.

Our next question comes from Renato Meloni with Autonomous Research.

Hi, everyone. Thanks I would like to stay on the theme of ROE and explore a little bit here the guidance in your midterm ROE, I mean you're already running almost 19.5%, which you guide right and you're expecting loan growth acceleration, margin expansion this year, but your OpEx is essentially eating out. And I understand your making these additional investments. But when do you expect -- do you have the potential to make much larger midterm ROE, right?

So when we're going to start seeing that or you think that they continue investing in disruptive initiatives, we will just maintain the ROE long term around this 19.5% because I think there might be some decent upside here.

Thanks for the question. And for opportunity to address that target that has come up actually in other conversations. So we guided for this midterm ROE in October of last year. And one clarification, what we're thinking about midterm, we're thinking 2 to 3 years, not the potential of Credicorp going forward. And we guided that, I would say, it was a conservative guidance given the fact that we were entering into a an electoral cycle in Latin America.

So it's already been -- we've already seen elections in Bolivia and in Chile with positive results. And we are close to seeing elections in Peru and Colombia in the next few months. So we intend to come back to the market and revise that after that cycle, so probably in the call in August. But given what we're seeing, given the potential of the economy and the positive trend we do believe we're going to come back with something north of the 20% mark, but I don't want to give the exact number right now until we run the numbers and seen the outcome of the elections, which are, of course, big events for the next few years.

Perfect. That's clear. And if you allow me to follow up. So structurally, where maybe like 5 years down the line, when the disruptive investments normalize. Where do you see your cost-to-income ratio?

Well, as I mentioned, in the next 2 to 3 years, we're thinking about the 42% mark. We'll probably be revising that over time and giving closer update, but that's the last number we have right now. Because, of course, it's all going to depend on other potential investments that we do. So it's hard to tell. If we were talking about just the current portfolio, of course, you would see a decrease in that number going forward, but we'll have to see what comes than the pipeline.

Our next question comes from Carlos Gomez with HSBC.

I wanted to ask you about your exposure to [ Rutas, the Lima ], the corporate in and whether you see any potential for recoveries from that particular credit, if you have an exposure.

And second, to what degree do you think that the positive performance of the economy of the business, has been helped by the good role from the pension fund? And could that be a break on activity when they are finished this year or next?

Yes, [indiscernible] comment about [indiscernible]. This is a position that represents less than 1% of our portfolio is a position which really provision of 80%. We're not accruing interest. And there are currently a couple of arbitration processes in the U.S. that is successful. We think that it would take a long time, but it will be benefit the actual position that we have. We do expect in the near short term payment that could be somewhere around between 5% and 10% of the bond. So and we do not expect further deterioration in the position we have in.

Would you take your [indiscernible].

Sure. So Carlos, going to the second part of the question. the withdraws from the pension plan, of course, have different types of impact. The withdrawal has been of 25,000 million -- or $25 billion in U.S. terms. We, as BCP has captured a little north of $11 billion of those $25 billion. The payments are going to continue until this -- until March, actually, the last payment is in March. And the effect in the economy, it depends on how much goes to consumption. But it certainly does help GDP. We have a calculation that, again, take it understanding that not necessarily everything is going to go into consumption, but it would be around 0.4% of impact on GDP potentially if everything went to consumption.

And if you think about the impact on our business, we expect for 2026, an impact of around 0.5% on loans -- I'm sorry, on deposits on low-cost funding. So that's a positive result. And in the credit part, it could have a negative impact of around 0.4%. Those are our calculations thinking about 2026.

I mean all in all, the short-term effects are positive, certainly not negative. I think the main issue is the long-term effect on pensions and the Peruvian economy but in the short term, the impacts are not that material.

And probably a small addition, also a reduction in cost of risk in a specific segment, particularly meat and higher segment individuals.

Sorry Carlos. Just to clarify, [ Egor Montero ] from [ Prazico ] took the question regarding [ Ruta Helima ] because the only subsidiary at Credicorp that has a position with [indiscernible], which is less than 1% of our portfolio of Pacifico is specific on the BCP or near BCP or any other subsidiary has a position in [ Ruta ] [indiscernible].

Our next question comes from Daniel Vaz with Safra.

Thank you. Hi, everyone. Congrats on the full year results and also guidance -- thank you for the guidance on 2026. I'm looking to the loan growth, if we compare to '25, you already grew 8.5% if you exclude the impact on the FX and also the Bolivia. And I'm seeing your '26 guidance also like around 8.5%. And when I look at Peru's GDP around 3.5%, domestic consumption close to 5%. And also if you take into consideration that you're accelerating in Mibanco, NPLs and multiyear lows BCP's consumer lending also growing above 10%. I mean, what are we missing here? What is currently holding overall credit below the double-digit level. I mean, what would need to change for you to accelerate more meaningfully? Maybe, I don't know, middle-market corporate loans or other segment that's pushing you behind?

And if I may have a second follow-up, are you planning to open Yape's P&L and separate from BCP, so you can have a clear cleaner vision on the efficiency ratio and et cetera, for the [indiscernible].

Daniel, this is Alejandro. I'll take the first question, and thanks for asking the question because it will give us an opportunity to clarify something. The guidance we've just given is for all of Credicorp. And there is one particular book, which is the Bolivia book where we are expecting a big -- a potentially big impact from exchange rates. So basically, we believe Bolivia is in the right direction. But in order to move forward, it's probably going to have some devaluation of the currency. And if that were to happen, that would impact our book, and that is considered in the 8.5%.

If you take BCP and Mibanco alone, we're expecting double-digit growth for this year in loans. And actually, at constant exchange rate is a little bit higher, around 11% for the year. So we are expecting and seeing an acceleration in the market. We expect that to continue and loan growth should be very strong this year. But there's this particular headwind in Bolivia that will have an impact on the whole of Credicorp when it materializes.

Regarding the maybe regarding the Yape question. The issue here is that Yape is within BCP. So Yape institution does not exist. So what we're currently. So it's very hard to come up with a financial -- pure financial statement. But what we're working on is in order to provide you with more information is working on how to be to provide more information, but all within the transparency we've always provided to the market. So that's a work in progress, and we may come up with something in that line in the future.

Our next question comes from Andres Soto with Santander.

My first question is regarding your loan growth guidance, but specifically connected this to Yape. Are you already including in this 8.5%, something from Yape, how much we can expect Yape to contribute to lending of credit Corby in 2026. And if you can elaborate on the ramp-up that you are seeing towards the multi-installment in the consumer loans and also the pilots that you are conducting in SMEs.

Yes, sure. The numbers do include it. Let's remember that preventing is in BCP's book. So when I was talking about this double-digit growth in BCP, I was including already the amount from Yape.

As for the growth, we are expecting the book to grow fast in the coming years. The number we're expecting I mean we're not giving guidance for the number of the specific book, but it should probably triple in the next couple of years. So that's the speed at which it's growing. Having said that, it's still a small portfolio for credit cards whole book, okay?

So it is growing fast and it has a good margin, so probably a bigger margin than other groups, but it's still going to be a smaller proportion of the whole book of the group in the coming years.

And in terms of expenses, cost of income is always difficult. There are multiple variables involved. But what are you looking to in terms of total expense growth in 2026.

You're talking about Credicorp? .

Credicorp. Yes, Yes.

Okay. So we actually guide for cost to income. So as I mentioned, we're expecting cost to income to reduce in the coming year. We -- if you look at the guidance we've just given even the upper side of the guidance is below the result of this year. We're seeing a lot of acceleration on the income of some of these initiatives.

So -- on the expense side, we are going to continue to invest in all of these not only disruptive initiatives, but also on the ongoing business and improving our capabilities to better serve the clients. So yes.

Okay. And finally, on capital, when I look at BCP at 14% core equity Tier 1, [indiscernible] -- how do you feel about those numbers considering the cycle both in terms of improved asset quality, but also faster loan growth? Where do you guys feel comfortable for what is coming ahead.

Sure. The way in which we usually work is, we have internal limits of 11% for BCP and 13.5% for Mibanco. And we -- 14.5% for Mibanco. And what we do is in March, we declared dividends and take the [ ED1 ] close to those levels. So the number you're seeing right now is pretty high because we've been building capital throughout the year. We will reduce it towards those levels in March. It has to be approved by the Board and by the shareholder meeting. But that idea, and so in that case, we will go back to those levels. We do see increase in loan growth, but it's already in our numbers, and there shouldn't be any problems with capital. going forward.

Perfect. And just be clear. So that money is going to go -- is going to the holding company and from the holding company, the intention is to distribute to shareholders.

Exactly. So the way which it works is the policy is we basically send all excess capital to the holding company. Usually, this happens in March and then in April, the credit or the holding company will propose a dividend and then declare it an ordinary dividend. And what we're aiming for, as I mentioned in our call is, and an increasing ordinary dividend each year. We're in line to being able to do that. And then depending on how the year goes, we might give a second extraordinary dividend, but that is dependent on the conditions of the year.

And obviously, this is subject to approval of [indiscernible] approval.

It appears there are no further questions at this time. I will now turn the call back over to Gianfranco Ferrari, Chief Executive Officer, for closing remarks.

As we look ahead to 2026, I'm very confident in our positioning. We are entering the year with a healthy pipeline across businesses and improving trade environment and a clear strategic focus. We expect loan growth of around 8.5%, supported by retail momentum at BCP and continued expansion at Mibanco, alongside stable and healthy margins with NIM expected to remain in the mid- to high 6% range. Asset quality is improving, and we expect the cost of risk to remain within our target range, supporting risk-adjusted profitability.

Our focus remains on three priorities: scale and monetize our digital ecosystem, expanding inclusion and accelerating new revenue streams, leverage synergies across businesses through data, talent and shared platforms to unlock growth and efficiency, execute with discipline, applying clear profitability thresholds and long-term value creation across core and disruptive initiatives. These are not new themes. They reflect the strategy we've been executing on consistently, and they're paying off. We are seeing tangible results across our platforms with fee income expected to grow at low double digits, continued progress in efficiency and sustained investment in digital capabilities. Thank you for your trust in Credicorp. We look forward to speaking with you next quarter.

Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect.

RECONNECT

Good morning, everyone. I would like to welcome you to the Credicorp Limited Third Quarter 2025 Conference Call. A slide presentation will accompany today's webcast, which is available in the Investors section of Credicorp's website. Today's conference call is being recorded. [Operator Instructions]

Now it is my pleasure to turn the conference call over to Credicorp's IRO, Milagros Cigüeñas, you may begin.

Thank you, and good morning, everyone. Speaking on today's call will be Gianfranco Ferrari, our Chief Executive Officer; and Alejandro Perez-Reyes, our Chief Financial Officer. Participating in the Q&A session will also be Francesca Raffo, Chief Innovation Officer; Cesar Rios, Chief Risk Officer; Cesar Rivera, CFO of Insurance and Pensions; and Rocio Benavides, Mibanco's Chief Financial Officer.

Before we proceed, I would like to make the following safe harbor statement. Today's call will contain forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties and I refer you to the forward-looking statements section of our earnings release and recent filings with the SEC. We assume no obligation to update or revise any forward-looking statements to reflect new or changed events or circumstances.

Gianfranco Ferrari will begin the call with remarks on key messages of our recent Investor Day, our recent political and macro environment and a brief overview of our quarterly results followed by Alejandro Perez=Reyes, who will provide a more detailed analysis of macroeconomic indicators, our financial performance and our outlook for full year 2025. Gianfranco, please go ahead.

Thank you, Milagros. Good morning, everyone and thank you for joining us to review Credicorp's results for the third quarter of 2025. Just over a month ago, we had the pleasure of hosting our Investor Day in New York, where we marked 30 years since Credicorp's listing on the New York stock Exchange and shared our road map for sustainable growth and impact.

Our strategy is anchored in three key pillars: First, we are accelerating the scalability and monetization of our digital ecosystem by financially including more people and expanding the formal cashless economy. Platforms like Yape, [ Tempo and Garda ] are playing a bigger role across payments, credit and savings and are already generating new revenue streams.

Second, we are unlocking growth through business synergies across all our businesses by leveraging shared capabilities in data and AI talent and cross-business platforms to drive revenue diversification and efficiency.

And third, we're executing with discipline with a focus on profitability thresholds capital allocation and long-term value creation across both our core and disruptive initiatives.

We also reaffirm our medium-term targets an ROE of 19.5% and an efficiency ratio around 42% over a 3- to 4-year period. These goals underpinned by scalable platforms, improving asset quality and disciplined growth.

Before turning to the quarter's results, let me take a moment to acknowledge the recent political developments in Peru and macro conditions across the markets where we operate. Later on October 9, Peru's Congress voted to impeach [indiscernible], citing permanent moral incapacity shortly after the Head of Congress, [indiscernible] was sworn in as present. This follows a period of low approval ratings and growing public frustration with prime and governance.

While a broad leadership transitions have unfortunately become part of Peruvian landscape, the country has also demonstrated a long history of economic resilience and institutional continuity. At Credicorp, we've built our strategy and operating model for resilience. Our geographic and business diversification, strong capital and liquidity position and disciplined risk management allow us to stay focused on delivery even as the external environment shifts.

Over the past 30 years as a listed company, we've generated [ another ] total shareholder return above 14%, consistently outperforming our regional peers. That track record reflects more than strong financials. It speaks to a business model built to navigate uncertainty decoupled from macro cycles and anchored in long-term value creation. That's why when events like recent political changes unfold, we remain rounded and focused on what we can control. As always, we are monitoring developments closely.

The macroeconomic environment during the quarter was relatively stable with key indicators pointing to a [indiscernible] recovery across the region. In Peru, GDP growth for 2025 is now projected at 3.4%, up slightly above 3%. This revision is driven by higher-than-expected export prices and a boost of consumption following the eighth pension fund withdrawal. Domestic demand is forecast to grow nearly 6% its asset space in over a decade outside the pandemic rebound, driven by a more advanced economic cycle, record terms of trade, control inflation supporting real wages and advising trade demand. These trends point to improving business conditions with mining investment outlook strengthened by favorable export prices and new project ramp-ups. Despite the upcoming 2026 elections, we expect GDP growth to remain resilient, between 3% to 3.5%, largely supported by sustained gains in terms of trade. With inflation forecasted at 1.8% for 2025 and 2% for 2026, it remains comfortably within the Central Bank's 1% to 3% target range.

In September, the Central Bank carries positive rate for the third time this year to 4.25%, bringing it close to neutral level. This [ itch ] in cycle is already supporting credit growth and private consumption. [ Affects ] Markets and external balances also remained stable, supported by high commodity prices.

In Chile, GDP growth is driven by favorable terms of trade, mining reinvestment and resilient consumption, with a more pro-market outlook boosting medium-term expectations. Colombia's GDP is expected to grow 2.3% in 2025, up from just 1.6% in 2024, though fiscal pressures keep [indiscernible] cautious.

In Bolivia, economic adjustment challenges remain, but [indiscernible] past elections it ends two decades of [indiscernible] rule raising hopes for a more pragmatic reform-oriented economic agenda. All in all, we continue to navigate a dynamic external environment with products, agility and a focused approach to the areas where we can drive long-term value.

With that context, let me now walk you through the key results of the third quarter. We had another strong quarter with robust performance across our core businesses and consistent delivery on our strategic priorities. These results drove an ROE of 19.6% anchored in healthy operations and a proven risk posture. Universal Banking and insurance and pensions delivered very strong results, while microfinance continued progressing steadily towards its medium-term profitability target. Fee-based and transactional income also grew, underscoring the strength and diversity of our platform. Our innovation portfolio contributed 7.4% of our risk-adjusted revenue, keeping us firmly on track to our 10% target for 2026.

Turning to operate activity, dynamics improved and FX-neutral loan growth accelerated to 7% year-over-year. Origination pipelines remain healthy, particularly in retail banking and microfinance, positioning us for further momentum in the fourth quarter.

The positive credit momentum also supported margins. Risk-adjusted NIM stood at 5.5% in year-to-date figures supported by better asset quality and our structurally efficient low-cost funding base.

On the deposit side, we raised the share of demand and saving accounts to 39.5%, a direct reflection of our digital engagement strategy and the trust we've earned from our clients. Asset quality also continued to trend favorably, benefiting from enhanced origination standards, refined risk-based pricing and stronger collection execution.

Lastly, from an operational standpoint, our efficiency ratio came in at 46.4%, well within our expected range, reflecting the leverage in our digital capabilities and our disciplined cost management. Capital levels remain strong across all businesses.

With that, I'll turn it over to Alejandro to discuss our results and provide more insight into our operational and financial performance. Alejandro, please go ahead.

Thank you, Gianfranco, and good morning, everyone. This quarter's 19.6% ROE reflects sustained momentum in our core businesses and the increasing contribution of our innovation portfolio. We revalued Bolivia's balance sheet using a more market-reflective exchange rate, we generated an accounting year-over-year contraction of 2.1% in Credicorp's total assets this quarter. As I discuss the quarter's highlights, I will focus on the year-over-year operating trends.

Loans measured in quarter end balances increased 1.5%, negatively impacted by the revaluation of Bolivia's balance sheet and the depreciation in BCP's dollar portfolio. Excluding these effects, FX-neutral loan growth for the quarter was 7%. This increase was driven primarily by BCP mainly through mortgages and consumer loans in retail banking and by value.

Asset quality has improved materially year-over-year. NPLs contracted across the board and Credicorp's NPL ratio stood at 4.8% this quarter. The cost of risk fell to 1.7% on the back of fortified risk management and supported by improvements in payment performance and in the Peru and economy. Net interest income increased 2.7% spurred by a contraction in interest expenses after interest rates fell and low-cost deposits expanded and accounted for 58.1% of the funding base. In this context, NIM increased to stand at 6.6%.

Other core income grew 11.9%. Fee income increased 8.2%, boosted by transactional activity at Yape and BCP. Gains on FX transactions rose 23.4% through higher volumes at BCP. Lastly, the insurance underwriting result grew 33.1%, reflecting a stronger insurance service results in the life business. On the efficiency front, our cost-to-income ratio stood within guidance at 46.4%.

Next slide, please. Peru's economic outlook remains positive despite former President [indiscernible] impeachment. So far, there has been no significant impact on key financial variables, such as interest rates and the exchange rate. The pace of GDP growth accelerated in the third quarter to stand around 3.5% year-over-year. Domestic demand continued to outpace overall GDP growth as it has since mid-2024, expanding at a robust 6% for the fourth consecutive quarter. This sustained momentum is attributable to the mid-cycle phase of the economy and to the fact that the terms of trade are at the most favorable level seen in the past 75 years. High-frequency indicators continue to point to robust economic activity, driven by a steady recovery in employment and real wages.

In terms of private investment, business expectations, one of its key drivers remain in optimistic territory. Meanwhile, core proxies such as heavy-duty vehicle sales, capital goods, imports and terms of trade continued to grow at a double-digit pace. We revised our year-end GDP growth forecast upward from slightly above 3% to 3.4% based on two main factors. First, export prices for gold, copper and silver, which together account for half of Peru's local exports have risen significantly faster than expected, driving terms of trade to record highs.

Second, the pension fund withdrawal is expected to boost private spending and support household consumption. We expect economic activity to remain strong throughout the coming year with GDP growth projected in the 3% to 3.5% range despite pending elections in 2026.

Next slide, please. The Federal reserve lowered its policy rate for the second consecutive meeting in response to signs of a cooling labor market. Fed futures have moved another probability of one additional rate cut in December is evenly the split. In Peru, annual inflation has remained below 2% for 11 consecutive months which constitutes one of the lowest prints for both advanced and emerging economies. Following the 25 basis points rate cut in September, which brought the policy rate up to 4.25%, the Central Bank is close to what it considers the mutual rate.

In Colombia, inflation recently accelerated to 5.2% year-over-year in September, which remains above the upper bound of the target range of 4%. Inflation concerns coupled with fiscal challenges have led the Central Bank to keep its polish rate stable at 9.25% during the last three meetings.

In Chile, the Central Bank heads policy rate steady at 4.75% during its most recent meeting. Inflation slowed to 3.4% year-over-year in October, the lowest rate in more than a year, boosting expectations for a December rate cap. This Sunday, Chile will hold its general election and expectations for a more pro-market administration has seen a [indiscernible] for future growth.

Next slide, please. BCP maintained a solid ROE of 25.6%, which reflects resilient margins, diversified revenue streams and low cost of risk. On a quarter-over-quarter basis, total loans measured in quarter-end balances rose 1.7%. In FX-neutral terms, growth reached 2.4%, mainly driven by retail banking segments, which grew 3% while the wholesale banking portfolio increased 1.8%. NIM stood at 6.1%, increasing 10 basis points on the tale of a shift in the asset mix. Other core income grew 1.6% fueled by fee income from Yape. NPL volumes fell 0.9%.

In Retail Banking, NPL volumes declined led by individuals and as a close second by SMEs. Provisions rose 9.6%, reflecting both the recurring dynamics of retail banking and specific impact within Wholesale Banking. In Retail Banking, provisions for individuals remained stable, while provisions for SMEs rose slightly due to a base effect stemming from higher reversals last quarter linked to increased debt repayments in SME business. In Wholesale Banking, there was a relevant increase in the credit risk of one corporate client, which is currently paying up to date. The cost of risk edged up to 1.3%, driven by the dynamics of provisions and loan growth, which were supported by favorable macroeconomic conditions in Peru. In this context, BCP's risk-adjusted NIM stood at 5.2%.

From a year-over-year perspective, I would like to highlight the following dynamics. Loan balances grew 4.6%. However, loan growth in FX-neutral terms reached 7% led primarily by retail segments and closely followed by wholesale loans. Retail segments and consumer loans, in particular, were favored by positive economic conditions, while lower interest rates boosted growth in mortgages. In Wholesale Banking, middle market loans were up this quarter, bolstered by short-term lending to agri businesses. NPLs contracted across all BCP segments, primarily in SMEs and individuals. In individuals, the reduction in NPLs was attributable to repayments, which were fueled by higher liquidity and through improvements in loan origination and debt collection management. NIM decreased 6 basis points, writing a downward trend in the yield on interest-earning assets and partially offset by a lower funding cost, both in line with market rate trends. The cost of risk fell across retail banking segments, driven by improvements in payment performance after low-risk vintages increased their share of total loans, supported by a strengthening economic backlog.

Other core income rose 10.8%, fueled primarily by fee income which reflected solid results in Yape and BCP. Gains on FX transactions, which grew alongside an uptick in transactional activity in retail segments were a secondary driver of growth in other core income.

The ratio for other core income to assets maintained its upward trend, which is the result of our initiatives to diversify BCP's income streams. It is worth noting that this evolution reflects our investments in technological capabilities to bolster our transactional platform. The efficiency ratio stood at 38.7% at the end of the third quarter. Growth in operating expenses was spurred by provisions for variable compensation and hiring of digital talent for strategic projects.

Next slide, please. Yape continues to generate value across the Credicorp ecosystem with 15.5 million monthly active users, which is the equivalent of 82% of the economic Yape population. We aim to expand this user base to 18 million by 2028. Current users conduct an average of 58.5 transactions per month. Only 12% of this transaction generated revenue, indicating considerable room for further monetization. From a financial standpoint, revenue per monthly active user reached [ 7.4 ] while expenses per mile stood at [ 5 ], reflecting continued improvement in profitability and operational scalability. Although marketing campaigns aimed at driving feature adoption led to higher expenses in the quarter, no material shift in cost structure were observed.

In the last quarter, revenue grew almost 2x year-over-year. Looking ahead, we expect revenues to triple by 2028, primarily driven by higher revenue per mile as users adopt more monetizable features. Payments remain the dominant contributor accounting for 53% of Yap's revenue fueled by strong growth in QR, bill payments and checkout functionalities. Lending continues to gain momentum, now accounting for 20% of Yap's revenue. To date, over 3 million clients have received disbursements, 1 million of which constituted first-ever formal loans. Looking ahead, we aim to expand our disbursed client base to 8 million by 2028 as we deepen our understanding of user payment behavior and refine our risk management capabilities.

In e-commerce, [indiscernible] continues to grow, driven by Yape Promos and gaming, establishing a third monetization pillar. In aggregate, Yape contributed 6.6% of Credicorp's risk-adjusted revenue this quarter, advancing its mission to deepen financial inclusion, scale monetization and strengthen its strategic growth as the growth engine of Credicorp's digital ecosystem.

Next slide, please. Ongoing economic recovery continued to exert a positive impact on Peru's micro finance sector with Mibanco's performing sector peers. In this context, Mibanco's profitability kept rising and stood at 18.8% this quarter, supported by a rebound in loan disbursements in recent quarters and strengthened credit risk management.

I would like to highlight key quarter-over-quarter dynamics. Loans grew 2.4% in quarter end balances, writing an upswing in loan disbursements, which hit an all-time high in September. The NPL ratio fell for the fifth consecutive quarter to stand at 5.7%. NIM picked up 15%, boosted by a shift in the mix towards small ticket higher yield loans. In parallel, the cost of risk fell 7 basis points to stand at 5.2% while risk-adjusted NIM reached a 4-year high of 11%. From a year-over-year perspective, loans measured in quarter end balances grew 8%. Our active pricing management, coupled with the decrease in cost of funding, helped NIM increase. The cost of risk fell 101 basis points as lower risk vintages continue to gain traction and now account for 78% of total loans. Operating expenses remained under control and efficiency stood at 51.4%. In this context, Mibanco's year-to-date contribution to ROE was 16%, transitioning towards our target for medium-term ROE in the low 20s.

Mibanco Colombia's results continue to tick up, reflecting double-digit year-over-year loan growth, control risk management and optimized efficiency, supported by a more favorable economic environment for the micro finance sector. As a result, profitability stood at 12.3% at quarter end.

Next slide, please. At Grupo Pacifico, insurance underwriting results remained strong this quarter, supported by solid operational dynamics in both the P&C and Life businesses with ROE standing at 20.9%. On a quarterly basis, net income remained relatively stable. Insurance underwriting results rose 7% on the back of life business, which reported a decrease in insurance service expenses but was primarily driven by a drop in claims. The [indiscernible] business also posted an improvement in its underwriting results, albeit to a lesser extent. These gains were partially offset by a decline in P&C underwriting performance impacted by higher claims. Growth in underwriting results was offset by a drop in net interest income associated with life insurance contracts.

On a year-over-year basis, net income rose 23%, primarily on the back of Pacifico's full consolidation of the Corporate health insurance and medical services operations. Excluding the consolidation effect, net income rose 10%. Insurance underwriting results rose for the Life business, driven mainly by a decrease in claims on disability and survivorship and credit life lines. And for the P&C business, which reported growth in direct premiums in the cars and medical assistance lines. These impacts were partially offset by higher operating expenses and by an increase in the net loss on securities, which was impacted by credit downgrades on a couple of assets in the investment portfolio.

Next slide, please. Profitability, our Investment Management and advisory business increased this quarter with ROE standing at 17.4%. On a quarter-over-quarter basis, core income-generating businesses delivered strong results this quarter, reflecting improved capital markets activity particularly in the trading unit and continued growth in Wealth Management and Asset Management with AUM in U.S. dollars, up 6% and 14%, respectively. These dynamics were partially offset by higher operating expenses. As a result, net income increased 10%.

On a year-over-year basis, net income increased by 5%, mainly due to favorable performance of the trading unit in our Capital Markets business and stronger treasury performance. These dynamics were partially offset by higher operating expenses

Next slide, please.. Now I would like to review Credicorp's consolidated evolution regarding quarter-over-quarter dynamics. Loan growth was fueled by retail segments, leading to a higher yield interest earning asset mix. As a result, the yield on interest-earning assets rose 13 basis points. On the liability side, low-cost deposits raised an increase in their share of total funding and bond maturities triggered a decrease in interest expenses. These favorable dynamics were partially offset by an increase in the balance of time deposits at BCP. As a result, funding cost decreased 1 basis point.

On a year-over-year basis, the positive impact of a higher yield interest earning asset mix was offset by the negative impact of lower market rates. As such, the yield on interest-earning assets fell 9 basis points.

On the liability side, interest rate dynamics complemented by our competitive advantage in local funding, led the funding cost to decline 25 basis points. In this context, NIM stood at 6.6%, up 9 basis points. Going forward, growth in retail lending, powered by our strengthened risk management capabilities should sustain NIM's growth.

Next slide, please. Moving on to loan portfolio quality. Asset quality showed slight further improvement this quarter as NPL volumes continue to contract across segments, falling to levels below those reported prior to the 2023 recession. Amidst ongoing economic recovery, provisions have dropped over the past 12 months due to an improvement in payment performance and successful risk management measures at both BCP and Mibanco. The positive impact of this improvement exceeded expectations, which kept provisioning levels low once again this quarter. In this context, the NPL coverage ratio rose and stood at 110.1%. Going forward, we will continue to accelerate retail origination while managing risks.

In coming quarters, asset quality may improve from the back of a rising liquidity after the expansion fund withdrawal is rolled out from November 2025 to February 2026. Following that, we expect loan growth to recover space and the cost of risk to rise but remain within our appetite.

Next slide, please. Core income expanded 5.1% year-over-year, underscoring our ability to deliver consistent growth. Net interest income rose 2.7%, supported by a stronger funding mix and a higher yield loan portfolio. This help lead NIM to 6.6%, reinforcing the resilience of our margin. Other core income grew 11.9% driven by a key momentum from Yape and BCP and a 23.4% increase in FX gains on the back of higher volumes.

As highlighted during our Investor Day, other core income is expected to play a growing role in Credicorp's strategy to diversify revenue sources. This includes scaling digital monetization to Yape, expanding bancassurance, accelerating growth in remittances and deepening transactional engagements across traditional platforms.

Risk-adjusted NIM rose 50 basis points year-over-year to stand at a record high of 5.5%. This evolution reflects our risk management is becoming a competitive edge that enables expansion into new market

The efficiency ratio for the first nine months of the year stood within guidance at 45.7%. Operating expenses grew 12.8%, fueled primarily by core businesses at BCP and by investments in our innovation portfolio. Growth in core expenses at BCP was driven mainly by provisions for variable compensation and higher IT expenses. Expenses for our innovation portfolio rose 16.1% led by Yape [indiscernible] which represented 83% of disruptive expenses in the first nine months of this year.

Next slide, please. ROE for the first nine months was 20.1%, supported by solid business performance and bolstered by the extraordinary gain from the [indiscernible] transaction in the first quarter of the year. If we adjust for this transaction, ROE is 19.3% for the first nine months. On an accumulated basis, net income reached a record high, even when excluding the gains from [indiscernible] transaction. We achieved this by leveraging low cost of funding, a reduction in the cost of risk and an increase in lending. We are committed to generating diversified and robust revenue stream to ramp up revenues from other core income and transition toward a stronger, more resilient business [indiscernible].

Now I'll move on to our guidance. Next slide, please. As previously stated, we maintained our GDP guidance as we expect GDP to grow 3.4% this year. We expect our loan book to grow around 6.5% year-over-year measured in end-of-period balances. These figures do not consider the impact of the asset revaluation at BCP Bolivia, but do include the evaluation of the U.S. dollar against the Peruvian Sole. Amid a more dynamic economic backdrop and strengthened origination levels in the first nine months of the year, we expect balanced growth to continue accelerating in the last quarter, driven primarily by retail banking at BCP and by Mibanco. The acceleration anticipated for loan growth and the shift in the mix towards retail should support NIM as interest rates trend downward. Accordingly, we expect NIM to stand within our guidance range. While an increase in the cost of risk is anticipated in the final quarter, driven by a stronger focus on lending to higher-yielding segments, we expect it to close at the lower end of the guidance range. Accordingly, we expect the risk-adjusted NIM to move closer to the upper end of the guidance. On the efficiency front, we expect to be within our guidance range.

Regarding fee income and insurance underwriting results, we expect growth to stand at low double digits this year, supported by an acceleration in economic activity and ongoing diversification of our income sources. As a result, we maintain our full year ROE guidance at around 19%. This year reflects both solid core performance and sustained discipline on the risk front. While local political uncertainties remain, we believe the fundamentals are in place to support this level of profitability.

With these comments, I would like to open the Q&A session.

[Operator Instructions] Our first question comes from Ernesto Gabilondo from Bank of America.

My question will be related to asset quality. So NPLs and cost of risk are behaving much better than expected this year is well below your guidance provided. You mentioned you're expecting cost of risk to be at the low end of the guidance, it should be around 2%. So my question is, if it's not too conservative this guidance because cost to risk will have to be above 2% in the last quarter. So I just wanted to hear your thoughts on that [indiscernible] 2026, that probably you will accelerate the growth in the high-yield segment. How should we think about the cost of risk? Should we start about 2% or similar guidance that you have provided this year?

Ernesto, this is Gianfranco, allow Cesar to get into the details.

So thank you for the question. I would say that, in fact, the results are better than we initially expected at the beginning of the year is a combination of better results in the measures taking in the risk management front, but also a more dynamic economic backdrop. As we were mentioned, and Alejandro has been highlighted, the economy is growing faster, particularly if you consider consumer spending and this is positive for the quality of the portfolio. And at the end of the year, another factor is that we are going to have liquidity events, the ASP withdraws that are going to impact negatively, we'll say, loan growth but positive credit quality. So this is going to contribute to the numbers that we are laying out. And actually, Alejandro mentioned in the guideline that the cost of risk is going to be around the lower end. And the lower end is 1.8% that's the first part of the question.

In the second part, what we expect for the next year is to increase gradually as we have mentioned previously, the shift in the composition of the portfolio. But I will again emphasize that the positive thing is that we expect to do that, increasing the NIM. And so the risk-adjusted NIM should also increase in absolute trends in relation to the current levels.

Excellent. And just for a second question is on OpEx growth. So we noticed this quarter came at a double-digit. As you mentioned, the idea is to have revenue growth outpacing OpEx growth over the next years. But how should we think about OpEx growth next year? I don't know if you can break it down your expectation of OpEx growth, how much will be related to the disruptive initiatives like Yape, Tempo and how much to the ongoing business?

Sure. Yes. So we have seen important operating expenses growth this quarter, but it's inside of our guidance, as we've mentioned. So it's been planned as we are revamping capabilities, both in the core business and the innovation part. We expect to continue to invest in the future. But in the core business, probably at a lower speed than what we've seen in this year because, again, we've done some particular projects during this year. So it should come a little bit lower. And on the innovation side, we'll probably remain in similar numbers that will allow us to generate more income and hence, go to our midterm target that Gianfranco mentioned of 42% in the next 3 years -- around 3 years. So you should see a little bit of a lower growth of expenses in the core business and similar growth in the innovation part.

Our next question comes from Brian Flores from Citi.

have a question related to growth, right? Because your long-term guidance of ROE is 19.5%. And as you mentioned, you're ramping up. The economy is going well. Just wanted to see what should we think about the first quarter of the year given the political uncertainty, we have elections in April. So just wondering if we might see some deceleration in the first quarter as mostly corporates tend to be a bit more cautious. And as you mentioned, there are some impacts from withdrawals probably carrying into January, February. So if you think maybe we could see ROE levels similar to this year, which obviously are very positive? Or do you think we are, I would say, converging into this 19.5 long term in a sooner way? And then I'll ask my second question.

Sure. Brian, this is Gianfranco. I'll answer the uncertainty question regarding elections next year. And maybe based on data, if you do a back testing on what has happened in the last 4 or 5 elections, whatever, there's always -- so the previous year, there's basically no reduction in terms of growth, long-term growth or investment and so on. However, there is a slowdown over the last 4 elections, and there's a slowdown in the first quarter of the year of the election. So that's in line to what you're implying in your question.

Having said that, it's a tricky question because of what [indiscernible] and Alejandro mentioned before, the pace of growth in terms of GDP, consumer -- consumption in general, trade balances and so on. Some of those indicators are at record levels for the last, I don't know, 10 years -- actually, trade balances is at record levels over the last 7 -- last year. So it's tricky. So if you force me to give you an answer, my personal opinion is that next year, the first quarter of next year is not going to be as low as what has happened in previous elections.

Regarding ROE for the upcoming years, we will provide guidance next year. Next call actually rather than nowadays -- than two days, sorry.

I was just going to complement in a couple of comments. Again, Gianfranco has mentioned the economy is finishing the year very strongly [indiscernible] a couple of points, private investment in the last quarter, the third quarter of the year grew 10.4%. That's the highest since 2013. We already mentioned private consumption. So we are entering the year with a very positive situation. And also that's -- basically, there's going to be some election-related effects. But again, it's interesting to see which one is waiting more. So we're not expecting a big change in the first quarter.

Having said that, there is also the withdrawal from the pension plan. What we expect is for it to have an effect of around 0.5% in growth -- in less growth but more related to the extra cash in the hands of our consumers and the prepayments in loans based on that. But again, in this economic backdrop, we expect next year to -- I mean, we'll give guidance in the next call, but we expect next year to be a strong year in growth for Credicorp.

Perfect. Just to clarify, that 0.5% impact is full year? Or is it year-over-year in the first quarter?

It is full year, but it's going to be probably very much in the first quarter because the withdrawal starts in November and finished in February. So it is -- the full year effect is 0.5 percentage point, but again, probably very concentrated in the first part of the year.

No. Okay. Perfect. And then just to confirm, the -- I mean, the base line that we should think about in terms of growth is based on what I understand, similar to this level of 2025, right? The bits in the guidance?

Well, we'll give guidance again in the next call, but the way I would put it is, if you think of 2025, the beginning -- the first half of 2025 growth wasn't very strong. It's accelerated in the last quarter. So I would say that there's probably an opportunity to even better grow when you consider a full year in 2026.

No, perfect. I really appreciate the clarification because as Gianfranco was saying, this is indeed a tricky question, and it has a lot of moving parts. So I really appreciate -- if I can just very quickly on my second question, Yape's contribution nearly close to 7%. Just wondering if we can envision double-digit contribution by 2026?

Definitely.

Yes, very probably.

Our next question comes from Renato Meloni from anonymous research.

Hi, everyone. Congrats on the results. It's Renato from Autonomous Research here. So just a -- first a quick follow-up on loan growth. Just like picking up on your earlier comments, just wanted to know if you should expect to reach the loan growth guidance for this year? And if that's FX adjusted or just the nominal value?

And then my second question is on the NIM expansion. I just wanted to reconcile your comments because I mean we can see the mix shift here driving yields higher. But at the same time, you're commenting on this like lower risk vintages, they're positively impacting cost of risk. So I just wanted to put these two together and see what really happened here.

Alejandro, would you take that, the first one? [indiscernible] loan growth.

Sure. So loan growth, I would say that it's -- the number we've given in guidance is nominal, but it does consider the adjustment of Bolivia's restatement, okay, which is just an accounting incentive because we're using a different exchange rate. So it's not considering any impact of the dollar exchange rate. And we do expect to reach it. I mean if we consider the retail growth we've seen in the third quarter, just by continuing with that retail growth and having some wholesale growth, we should be able to be around that area. And again, with the economic backdrop, we believe it's very achievable in this year.

Yes. Go ahead, Cesar. The second question.

Yes. The second question. I understand your question because you say it's a combination of better quality but after the better quality, higher cost of risk. The issue is that we are talking about fundamentally of two different portfolios. We have been improving the quality of originations so the traditional portfolios are having less cost of risk gradually as Alejandro mentioned, as the year goes, we have moved newly originated part of the portfolio in relation to the originated portfolio in year 2023 that came with higher cost of rates. So this is a trend that grows the cost of risk down as the year passes, we are starting to originate in new segments with purposely higher cost of risk, higher margin, and this percentage is growing gradually. So the combination of these factors explains the initial draw diminishing the cost of risk and they'll gradually improved as the year ends and the next year began. I don't know if it's clarified the points.

Our next question comes from Yuri Fernandes from JPMorgan.

I have one regarding Bolivia. I know this year has been volatile on FX, the impairments like the readjustments, right, on the portfolio deposits. But now there was an important political shift in Bolivia. I know this is small for your entire operation. But this quarter, it was already better. So if you can comment on what you expect for Bolivia if the elections, like the new President should have any tailwind for you going forward, like any security gains you may have? Just trying to understand is Bolivia from headwind in the past years may become a tailwind for you here?

Yuri, let me take that question because I believe you know that I ran that bank for three years. So I'm quite knowledgeable about Bolivia. So even though it's very early stages for the new government, the initial definition or decisions they've made -- they're giving very positive signaling. The executive cabinet is very pro market and professional, they just appointed [indiscernible] yesterday, the day before, the new Central Bank President. He's a very well-seasoned technical guy. So the initial indicators are quite positive.

As you mentioned, Bolivia has -- Bolivia, sorry, has been small for us. I've been seeing it as a option value for us. And that option may become quite relevant going forward. We're positive on what Bolivia -- what can happen in Bolivia as a country. Having said that, there's a lot to be done on the political and economical and social matters for the government. But we're quite positive with the potential outcomes going forward.

No. Thank you, Gianfranco. So we'll keep asking about the uptick, but [indiscernible] that you have the optionality there. If I may, just a quick second one. Payout and dividends, your [indiscernible] accumulation has been pretty strong. I know you have the cash payment of the legal debate that we have on the taxes. But what should we expect here, like guide us through like capital returns for shareholders.

Yes.can you take it, Alejandro?

Yes. So basically, this year, the payout has been 58%. And as you alluded, we did that in just the regular dividend, we didn't pay an extraordinary dividend. Going forward, I mean there's growth in our business that, of course, consumes capital, but we do expect to maintain our increasing ordinary dividend and potentially with also extraordinary dividends. And I would say probably payout ratios should be higher than this year in the high 60s. But again, it's going to depend on whether there's any particular transactions. There's always the possibility of something that changes that. But in ordinary business, we should see an increase from this year not necessarily to the 2024 level where we had a payout of 75% but we were generating a lot of income without loan growth. So that, of course, doesn't consume capital. But again, higher than this year and with increasing ordinary dividends is what I would think we're going to see in the coming years.

Right. In the case of inorganic acquisition, like which areas do you see value for -- like insurance, we just had [indiscernible], but anything that is important for Credicorp nowadays?

So nothing [indiscernible] as we speak. As we mentioned -- actually, Alejandro just mentioned it. We will retain whatever is needed for financing growth, including potential inorganic operations. everything else will be paid as dividend. And the idea is to keep increasing the regular dividend. But as we speak, there's nothing relevant in terms of M&A.

Next question comes from Lindsey Shema from Goldman Sachs.

Just a follow-up on the impacts of the eighth pension fund withdrawal. I was wondering if you could kind of weigh the impacts against each other. I mean, it sounds like there's going to be better asset quality but slower loan growth? And then are you seeing any impacts to [ PRIMA ]? And then net-net, how are you seeing the impacts on the business? And then I'll ask a second follow-up afterwards.

Alejandro?

Yes, sure. So the withdrawal is going to be -- we expect it to be around PLN 25 billion. If we think about the usual share with retained inside Credicorp, that could be around PLN 10 billion. So there's a positive impact in local funding. We expected that to be around 1% more than we already expected in [indiscernible] funding both this year and next year. So that's a positive. As I mentioned, in loan growth as Credicorp, we are expecting around 0.5 percentage point less of loan growth next year. So that is a negative impact for the coming year.

As for Prima, the impact this year are very, very small. If you consider that this actually impacts basically fee income and it's happening very late in the year. Next year, there's certainly going to be an impact in fee income of around 10% of fee income if the numbers that we're assuming of withdrawal remains in place.

Maybe just a quick comment that goes beyond your question, actually, and we've been saying it for a couple of years already is unfortunately, we believe that the pension system in Peru has been destroyed by the politicians. We've been quite active in the past in trying to come up, we have a reasonable proposal that hasn't been taken into consideration. So hopefully, in the upcoming years, that pension fund system, both a public one and the private one can be fixed, and we come up with a value proposition and structuring that is reasonable for Peruvians. Otherwise, there's going to be a major issue, I don't know, 10, 15 years down the road.

And then for my second question, you continue to see strong loan growth at Yape. Could you provide an update on the unit economics, especially as you've started to increase the multi-installment loans?

Yes. I mean, as I mentioned, we are scaling the multi -- as you mentioned, the multi installment loans in Yape. Today, that -- I mean the cost of risk in that versus the rate that we're charging, it's a very positive business. It's still small. So we expect to scale it going forward. I don't have the unit economics to share at this time. But again, it is a growing business that should -- today, it represents around 20% of Yape's income, the whole lending business and we expect it to continue growing and become an even more important contributor to Yape.

Maybe to complement Alejandro's answer for you to understand how we're managing the loan book at Yape. We start lending -- so bear in mind that this is a mostly [ unbanked or underbanked ]. So we start lending on installment [indiscernible], very small ticket loans. And as we gain info and data from the customers, we ship them or increase the value [ prop ] in terms of tenor and size of the ticket both the [indiscernible] overall and the multi-installment are profitable businesses. So again, we don't have unit economics of each single loan, but we manage them by -- actually by vintages. And overall, the results are positive.

Our next question comes from Daniel Vaz from Safra.

I'm particularly interested on Mibanco here, it continues to surprise us, right? So I think ROE expansion, maybe improving asset quality also with good NIMs and you're coming from years, I guess, since maybe 2023, that your loan growth has been decreasing, right? So right now, we see a loan growth on the positive side coming from like 1% last quarter to 8% right now. So also very strong numbers in Colombia. I noticed like 20% year-over-year growth.

So looking at the whole picture, correct me if I'm wrong, but this outperformance and also controlled asset quality should give you even more confidence to accelerate growth in Mibanco, right? So I guess, looking at ahead like 2026, I would expect this loan growth to migrate like from, I don't know, maybe single digit to low teens, maybe mid-teens level portfolio growth, right? So you're seeing very, very good asset quality ROE expanding. Is this the case? I mean, should we think Mibanco like this to the upcoming quarters?

Thank you, Daniel, for your question. But let me get a couple of steps back to -- for you to have a more holistic mission. The whole microfinance sector in Peru has been hit very harshly over the last 4 or 5 years. The worst combination because rates went up, so the funding -- and most of the micro finance institutions funding is not retail funding or transactional funding is time deposits or capital market -- local capital markets. So rates went up that were -- they weren't able -- I'm talking to [ a system ]. They weren't able to pass through that increase in rate. Cost of risk went up, therefore, margins were really squeezed. On top of that, and I've always been very pleasing about it, the microfinance institutions, at least in Peru, the whole transactional business, fee income and so on, and this is the case of Mibanco, is very weak. So you see that when they have the perfect form over the last 3, 4 years. going forward, and I totally agree with what you just said regarding lending because -- at Mibanco because we expect the -- portfolio has already improved dramatically, the new vintages are performing better than the old vintages. So we are quite positive on the lending business going forward.

On top of that, Mibanco, and this is a more long-term strategy. On top of that, Mibanco is currently working in complementing that business. So in the next few years, you'll see that the fee income business, transactional business is going to grow at a faster pace than the lending business or the lending of that margin because we are focusing in bringing in more transactionality to Mibanco and the collateral effect is that the cost of funding should go down.

Our next question comes from Carlos Gomez from HSBC.

Congratulations, particularly in Yape and particularly on [indiscernible] you really took my question because I know that is close to your heart, but in that regard, you have the changes in Bolivia, you have the elections in Chile, the elections in Colombia as well as Peru. So it seems to me that you might have a target rich environment for investment around the region. Does that make you more inclined to perhaps invest more and distribute less? And if so, do you have a particular geographical difference right now? That will be the question. Yes.

Yes. Carlos, our region -- so again, Credicorp has been here for 30 years, BCP has been here for over 130 years. So actually, the vision we have goes beyond the political environment. Obviously, political environment impacts the performance of our countries and our appetite. Having said all of that, we are quite positive to what could happen, especially in Bolivia, Chile and Peru. Let me provide you more detail.

It's not only because -- it's not because of the change in government and government -- the upcoming government being more pro market or whatever, that's definitely relevant but more relevant than that is what's going on with commodity prices, specifically copper and lithium and gold in the case of Peru. So copper prices and you guys or your banks know more than we do. Copper prices should stay at high levels for a long period because of the investments that are being done in data centers and that data centers consume a lot of energy. And lithium, it's a matter of the transition, sorry, to electric vehicles and so on. And gold is like a [indiscernible] dollar basically. So we are positive on that. And well, both Chile and Bolivia are very relevant in lithium reserves, both Chile and Peru and really relevant in copper reserves. So the whole -- there are a lot of moving pieces, but the whole environment, we see a very -- a much more positive environment for the upcoming years when you compare that environment to what we have had in the last I don't know, 4, 5 years in these 3 countries.

We are happy to hear. And if I can sneak in one more question on the rates. Could you give us an update on your sensitivity to raise both U.S. dollars and soles?

Alejandro?

Sure. Carlos, the -- again, we've talked about this before. So we have a theoretical number of 100 basis points decrease in rate, both in soles and dollars parallel [indiscernible]. That number today is at 17 basis points, 15 of those come from the dollar part of the book and just 2 on the solid part. Again, this is a very theoretical example. And I mentioned in the Investor Day, actually, what we've seen in practices, our NIM growing, while the rates in Peru has come down more than 300 basis points. So the theoretical sensitivity to those 70 basis points, we are expecting actually NIM to continue very strong and risk-adjusted into growth in the coming years.

Our next question comes from Marcelo Mizrahi from Bredesco BBI. And we'll move on to our next question. We have Andres Soto from Santander.

My question is regarding Yape. And some of the numbers that you mentioned during the call, you said you expect revenue in Yape to triple by 2028. And the revenue in Yape already represents 6.5% of Credicorp total revenue. So it will be fair to assume that by 2028, that number should increase to 15% the revenue contribution from Yape? And if so and making assumptions also regarding the efficiency, the contribution to the bottom line should be in excess of 20%. Is this the way that you guys look at this?

Yes. Well, to your point, Yape is going to be a [indiscernible] contributor year-over-year for Credicorp. We are expecting it to be around the 15% mark of not necessarily revenue but net result for Credicorp in the next three years or so.

Okay. But even in that conservative assumption, Alejandro, if it represents 15% of income of earnings in 2028. Currently, when you look at the fourth quarter, it represented less than 5% for the full year, I would say, 2.5%, something like that. you will see an earnings accretion in excess of 10% of the level that you have now and the ROE of Credicorp is already at 19%, even higher than that. So the ROE by 2028 would be 21%. My point here is the 19.5% that you present as a medium-term target, sounds conservative considering the potential for earnings accretion coming from Yape.

Sure. No, I think your numbers are -- make a lot of sense. We mentioned around 19.5%. And again, we have elections in all the countries in this coming year. So we certainly -- I would say we are usually conservative in that kind of use. We're certain we'll come back and revise that at a later time when there's more certainty on the political outlook for other countries. But again, if everything works as planned, probably around 19.5%, will be on the higher end of that concept for sure. But again, we'll come and revise that later -- No. I mean we're going to be around 19.5% -- we're going to be on the ramp to the upside more than [indiscernible] that's what I was trying to say.

Andres, your pushback is -- this is Gianfranco, your pushback is correct. But again, even though we're positive on the outlook of what could happen in the region, we're still in Latin America. So volatility is part of the game. And that growth in terms of income at Yape, there are a lot of assumptions, a lot -- there's execution risk and so on. So you know us for a long time, yes, our outlook or our guidance is on the positive side, and Yape may have a relevant -- positive impact on the upside of that.

Not today, but in three years can be also a little bit of cannibalization between several vehicles. That is not relevant at all now.

Yes. That's a fair assumption, Cesar, the cannibalization will come against Mibanco and this [indiscernible] with a much higher potential for ROE. So it will be even accretive if that comes to happen.

You're totally right, Andres. The cannibalization should generate value rather than the destroy value.

Our next question comes from Alonso Aramburú from BTG.

Yes. Just following up on your recent comments, you mentioned that Yape is doing a pilot for the SME segment. So I'm just wondering if you can give us some color on that. How different is that to the strategy you're following compared to Mibanco. Is this targeting the same new Mibanco clients or these different clients? Are you using reps to visit some of these clients? Just to give us some color into how you're approaching this via Yape.

Alonso, this is Gianfranco. We're approaching Yape in a very different way -- a different model than the Mibanco model. It's basically based on transactions we gather through the app. So there's basically no human contact. That said, that model is much cheaper, much more efficient than the Mibanco model, but it's an untested model. So we are at the very initial stages, even though the vintages, which are not relevant yet, are performing quite well. But you see that the Mibanco model is a more expensive model, but it's a very prudent model with high ROEs, high NPS and so on, whereas Yape is an untested model. We still see that there's a lot of space, the larger one is [ land ] bank or under bank. But still, Mibanco only has 20-plus percent of -- low 20s market shares in the micro finance business. So there's a lot of space for gaining share overall. As Cesar mentioned before, as of today, we are not worried whatsoever in terms of cannibalization between Mibanco and Yape. Maybe, I don't know, two, three years down the road, we may we think the whole approach to the microfinance SME businesses here in Peru.

Our next question comes from Marcelo Mizrahi from Bradesco BBI.

Hello, everyone. Thank you for the question. My first time here. Very good to be here with you. So my question is regarding the insurance business. So in the last couple of quarters, the loss ratios are going down on life and also in Crediseguro. My question is to look forward if it is recurring. So look forward, these loss ratios will return to the levels of 50% on life or not. This is a new level of loss ratios to this line and looking to the Crediseguro, the same question.

Sure. Marcelo, there's been a particular effect on the survival business related to restatement done from some pension plans on the number of people [indiscernible]. So the thing is it's been an unusual positive result, and we should go back to more normalized levels going forward.

Okay. But those levels are around 20%, 30% loss ratios or they will come back to 50% as they was in the last year?

Let me -- so the short answer is what Alejandro mentioned, there are some exceptional impact on the loss ratios this quarter. Going forward to your question that is, is it going to be back at 50%. If I were to provide a short answer, it would be, yes, a more structural answer is that the further we go into the bancassurance and life insurance business on a more retail and lower-end segment, that the ratio should improve. Margins there are better. So it's not that we're going to have the ratios we have this quarter, but in the medium to long run, that the ratios we have in the past should be better going forward.

And the last one about insurance. So do you guys believe that this line will maintain this pace of growing more than the other lines, so it will generate value add value comparing to the other lines of the bank?

So yes, a great question. We always talk about the financial system in Peru is under penetrated and so on. When you see the level of penetration in insurance is -- that's even. I don't know if the word is worse or better. Worse in terms of receiving -- the Peruvian population coverage, but better in terms of business opportunity. So going to your question, we are quite positive that business should grow at really high rates for the upcoming years. And we're working very heavily on deploying new products, new channels, improving value propositions and so on, so as to reach the underinsured in Peru.

Ladies and gentlemen, there appear to be no further questions at this time. I would like to turn the floor back over to Mr. Gianfranco Ferrari, Chief Executive Officer, for closing remarks.

Thank you. We're entering the final months of the year with strong operating foundations and a clear sense of strategic direction. I want to reiterate the core message we shared at our Investor Day. Our strategy is built not just to perform in favorable conditions, but to [ lure ] and thrive across cycles.

Over the past 4 years, we have grown net income faster than Peru's nominal GDP, driven by the strength of our diversified business model, scalable platforms and disciplined execution. In that context, we've raised our medium-term ROE target from around 18% to approximately 19.5%, reflecting the benefits of a more inclusive digitally enabled business as we expand into new segments and broaden our addressable market. To get there, our strategy is focused on unlocking operating leverage and driving sustainable profitability. We will deliver higher risk-adjusted NIM through a more retail-oriented loan portfolio while increasing transactional and noninterest income from our disruptive initiatives. Together, these drivers will accelerate income growth, enhance efficiency toward the 42% level and strengthen our ability to generate superior long-term returns.

At the same time, we remain mindful of the broader context. While Peru continues to face political uncertainty, including its seventh presidential transition in under a decade, its macroeconomic institutions remain intact. This is a familiar pattern, political volatility consistent with economic resilience. That said, political uncertainty does carry an opportunity cost. And we hope that in time, greater political stability will allow the country to fully unlock its growth potential.

Early signs from the new administration point to a more pragmatic tone and renewed efforts to engage the private sector. Business sentiment is gradually improving, with more companies planning to invest, hire and expand activity in the upcoming quarters. In this environment, our focus is clear: execute with discipline, expand financial inclusion and deliver long-term value for our shareholders and the societies we serve.

Thank you for your continued trust and partnership.

Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect your lines.