Genterab De Cv Stock

Good morning, and welcome to the Second Quarter 2026 Gentera's Conference Call.

Now I would like to turn the call to Mr. Enrique Barrera, Investor Relations Officer of the company. Sir, you may begin.

Good day to everyone. Thank you all for joining us and for your continued interest in Gentera. I'm Enrique Barrera, the company's Investor Relations Officer. I'm very pleased to introduce our management team.

With us today are Mr. Enrique Majos, Gentera's Chief Executive Officer; Mr. Mario Langarica, Gentera's Chief Financial Officer. Enrique and Mario will present Gentera's results for the second quarter period as per the report that was issued yesterday, and we'll actively participate in the Q&A session of this conference call.

[Operator Instructions] Now, please note that during this presentation, Gentera may make forward-looking statements. These do not account for future economic circumstances, industry conditions, company performance or financial results. Additional information on forward-looking statements can be found in the disclaimer located in our earnings release. If you did not receive a copy of the release or if you have any questions, please do not hesitate to contact our Investor Relations department in Mexico City. If you are a member of the media, we ask you to contact us directly.

I would now like to turn the call over to Mr. Enrique Majos for his presentation. Enrique, please go ahead.

Good morning. Thank you, Enrique, and thank you all for joining us today in our second quarter 2026 Gentera's report.

As of the end of the second quarter of this year, we are pleased to once again report solid operating and financial results. These results reflect the successful execution of our business strategy as well as the efficiencies that we have achieved over the past several years. Gentera's loan portfolio reached MXN 94.6 billion, representing year-over-year growth of more than 13%. Our total customer base in Mexico and Peru reached 6.7 million people served. Likewise, accumulated net income for the first half of the year reached MXN 4.8 billion, the highest first half results in our history, representing 12% in a year-over-year growth.

The modernization and efficiency initiatives we have implemented over the past years have enabled us to keep operating expenses growth below the increase of both loan portfolio and our revenues. And regarding asset quality, our Stage 3 nonperforming loans ratio closed the quarter at 4.04%. This level remains within the expected range of our current product mix and represents a slight improvement compared to the first quarter of the year, which was 4.13%. We will continue working diligently to keep delinquency levels under control in both Mexico and Peru.

And our subsidiaries continue to deliver strong growth. ConCrédito's loan portfolio increased by nearly 15% year-over-year. Banco Compartamos Peru grew by more than 14% in local currency, while Banco Compartamos Mexico also achieved growth of nearly 14% despite our decision to slightly slow the pace of the growth in our individual loan product, which, by the way, I will elaborate in greater detail in a moment.

Looking ahead to the second half of 2026, our priorities remain very clear. We will continue executing our business plan with discipline while staying close to our customers. We remain committed to delivering EPS growth between 13% and 16% in 2026. And regarding Gentera's consolidated loan portfolio growth, in this quarter, we will report and revise our full year growth guidance. This adjustment primarily reflects the slowdown in the consumer economy in Mexico, which could affect our customers' payment capacity. The adjustments of this guidance is also considering the stabilization of the quality of our individual loan portfolio in Mexico after a long period of sustained growth.

Nevertheless, we remain fully committed to keep our leadership position in the market while continue creating value for our customers and all our stakeholders. Now while recognizing that the quality of our individual loan portfolio in Mexico has been an important topic of discussion over the past quarter, now we want to, in fact, address this matter during our first quarter earnings call. We mentioned in the first quarter call that we have acknowledged early signs of portfolio deterioration and the need to implement corrective actions, which we began putting in place during February and March this year.

With that in mind, let me provide additional context on this matter. As you know, the growth of individual loan business over the past several years has been extraordinary. Over the past 4 years, this portfolio has expanded more than 5x. And in 2025 alone, it grew more than 30%. This growth has generated significant benefit for both our customers and Banco Compartamo's financial performance. However, as is typical in the lending business, periods of rapid growth are naturally followed by a stabilization phase before getting back to growth periods again.

As we have mentioned on several occasions, our lending portfolio follows a natural cycle. We first grow, then we follow a period of stabilization of the portfolio quality, and then we start growing again. Consistent with this approach, during the first -- the past quarter, we have taken the following actions. First, we concluded a compelling assessment of the situation, and we have a clear identification of both internal and external factors behind the portfolio deterioration. Based on that assessment, we developed a clear action plan and implementation of these actions began at the end of the first quarter of this year. Today, we are already seeing early signs of a stabilization in the quality of this portfolio, and we are very confident that the delinquency levels will return to normal by the end of this year.

Addressing these challenges is strengthening both our lending methodology and our operating processes, allowing us to build a stronger product for future growth. Now, at the consolidated level in Gentera, after incorporating the impact of these adjustments into our projections, we are revising Gentera's loan portfolio growth guidance, and now we expect to close the year with a portfolio growth in the range of 6% to 9%. The good news is that we are maintaining our EPS growth guidance of 13% to 16%. We expect to achieve this by maintaining our expected growth of our other products and subsidiaries and together with the efficiencies that we have captured and the strong expense discipline that we have maintained over the past several years. And we both expect ConCrédito and the Banco Compartamos Peru to continue delivering double-digit growth for this year.

Overall, we remain cautiously optimistic while recognizing that the current economic slowdown in Mexico is likely to persist throughout the rest of this year. Finally, our digital transformation process for the group lending business in Mexico continues to make steady progress. Since group lending is the bank's largest business line, we are taking a disciplined and carefully phased approach to the implementation and scaling of this project. Therefore, over the coming quarters, we will continue refining both our processes and the technology through the controlled rollout of this platform in a couple of regions across the country. We currently expect a full nationwide deployment during 2027. Well, thank you for your interest in Gentera and for joining us today.

I will now turn the call over to Mario, who will provide additional details on the financial results. And, as always, afterwards, we will be able to take your questions.

Thank you, Enrique, and good day to everyone. As always, we appreciate your interest in Gentera. As Enrique just mentioned, we are enthusiastic with the financial results that Gentera is presenting for the first semester of 2026, following our strategy and the different initiatives that we have implemented in the last years and that we have explained in previous calls. In second Q '26, we reached a new record of 6.79 million people actively using our financial services, adding 657,000 people and growing 10.7% compared to second Q '25. Our loan portfolio amounted to MXN 94.6 billion, representing a 13.1% growth compared to the same period of last year.

Our 3 credit subsidiaries showed double-digit growth compared to second Q '25 with Banco Compartamos growing 13.8%, Banco Compartamos Peru growing 14.5% in local currency and ConCrédito growing 14.9%. As Enrique mentioned above, we expect that for year-end, Banco Compartamos Peru and ConCrédito will continue growing double digits and Banco Compartamos Mexico growing single digits for Gentera's portfolio to grow between 6% to 9% on a year-end to year-end basis.

Very important to note is that Gentera's average portfolio for the year will be around 10% higher than in 2025. It is also worth to mention that our decision to slow down the growth of the portfolio in Banco Compartamos Mexico in the second half results from the adjustments that our credit business requires after high levels of growth following natural cycles and dynamics as explained by Enrique. Regarding the evolution of the different lines of our income statement, one, in second Q '26, Gentera's interest income grew 9.8% compared to second Q '25, amounting to MXN 12.96 billion, following the observed growth in portfolio and clients. And as I just mentioned, and given the fact that the average portfolio for the year will be above 10%, we expect that NII should also grow at the same rate.

Also in the same period, financing expenses decreased 9.9%, mainly driven by the reduction in reference interest rates in Mexico. Therefore, net interest income grew 13.9% to amount to MXN 11.1 billion. NIM amounted to 41.2% in second Q '26. For the first semester of the year, NIM stood at 40.6%. For year-end, we expect NIM to move around 41%. At the consolidated level, Gentera's second Q '26 NPLs amounted to 4.04% compared to 4.13% in the previous quarter. Gentera's cost of risk for the first semester amounted to 13.7%.

It's important to say that we have seen stabilization trends in these metrics due to the implementation of the different actions to control asset quality that we have deployed, particularly in Banco Compartamos Mexico, such as reinforcing origination, monitoring and collection processes, adjusting the incentives program, strengthening our sales force, fine-tuning training and targeting strategies as described in our past conference call. Banco Compartamos Peru and ConCrédito have shown stable and healthy risk levels. So for year-end and based on the data that we have today, we expect that consolidated NPLs should be moving around 4% and consolidated cost of risk for the year around 13.5%. Gentera's second Q provisions for loan losses amounted to MXN 3.43 billion, a 29.7% growth, which is in line with its current asset quality and its loan portfolio mix and growth.

NIM after provisions for second Q '26 amounted to 28.5%, similar level presented in the previous quarter at 28.8% in first Q '26. We expect this ratio to be between 29% and 30% by the end of the year. Net fees amounted to MXN 1.6 billion in second Q, growing 14.2% compared to second Q '25, mostly driven by the growth of our insurance business. Operational expenses for second Q '26 amounted to MXN 6.9 billion, representing a 7.7% increase compared to second Q '25.

The modernization initiatives and investments in technology that we have described in past conference calls have benefited us to allow the adjustment of the operational expenses growth for the year to move around 10%. After all these effects, net income reached the second best quarter ever, amounting to MXN 2.353 billion in second Q '26, growing 11.6% compared to the same period last year. Gentera's controlling participation of net income in second Q amounted to MXN 2.284 billion growing 8.5%, implying an EPS of MXN 1.45 and around 8.5% above second Q EPS of the previous year.

The net income that Gentera generated in the first 6 months of '26 was the best result in any other first half of the year ever. Gentera's controlling ROE for second Q '26 stood at 24.5%, in line with our original expectation for the year. And for the full year of '26, we should expect Gentera's controlling ROE to move between 24% and 25%. As always, these results have been achieved preserving solid and healthy liquidity, strong and diverse access to funding and robust capitalization at Gentera and its subsidiaries.

Now to conclude my remarks. As you can see, in the first half of the year, we're delivering results as promised. While one of the objectives in the coming months will be to control the asset quality, we expect to comply with double-digit growth in Gentera's EPS within the range guided between 13% to 16%. Finally, we at Gentera are very motivated by the fact that we're concluding the semester with solid operational and financial dynamics, servicing millions of clients in Mexico and Peru, supporting them with their different financial needs so they can reach their dreams and at the same time, keep generating total value for all of our different stakeholders.

Thank you. That is all for my remarks. And if you want, we can move to the Q&A session.

[Operator Instructions] Our first question comes from Yuri Fernandes of JPMorgan.

Good to see the stabilization of the new NPL formation. But I would like to ask more about growth here, Mario, and less about 2026, and I know maybe a little bit too early, but for 2027. I know for this year, you have all the cost efficiency agenda that you have been delivering. So keeping the EPS, I think it's a good thing. But for 2027, how do you see the leverage for you to deliver like EPS expansion? Like do you believe you can have better margins because maybe individual lending will grow less and maybe your margins can expand more? Do you see another year for lower growth? You have higher taxes this year, can taxes help? So just help us to understand, given your end of period loan book should be smaller, how to continue to deliver those double-digit EPS for next year? So that's the first question.

And number two, just on dividend payout. I know you just approved the 40%. But any time we see a company growing a little bit less than in your case is more like an asset quality control, we tend to debate payout, right? So if this is -- maybe this takes longer for you to recover the growth outlook, can we start to see debates around higher dividend payout for Gentera?

Thank you very much, Yuri. Yes. Well, as we have always said, the market that we serve and the product that we have, we feel very confident that we can deliver a double-digit growth in our portfolio and in our earnings in the medium term. Having said that, obviously, we will be looking very closely to how we finish the year, and we will give you the specific 2027 guidance as soon as we have all of this evidence.

But fixing that objective that we have to deliver double-digit growth in the portfolio and EPS, that is what we remain committed to do. Specifically in the EPS, the first driver will be the growth of the interest income that should come from the growth of the portfolio. Then we will be managing interest expenses to make sure that financial margins grow double digit. We will stabilize provisions in order to also keep at the NIM after provisions a double-digit growth. And then after all the efficiencies and discipline that we have had over several years, keeping positive jaws, we feel comfortable that we will also be able to deliver the EPS growth. Having said that, please just wait until February so we can give you the exact '27 guidance.

Based on your question about dividends, again, our medium-term objectives don't change. So when we decided to increase the payout from 40% to 45%, that was accounting for, if you want, a medium-term strategy. And even with that equation, we have always said that the first thing that we need to make sure is that we have sufficient capital for organic growth. The second is that we will be looking how we can bring new products or new services to our clients through organic development or potentially inorganic. And then at the end, if we still have capital -- excess capital, the idea will be to distribute it to our shareholders. But at this point, the objective is that for next year, we will present to our assembly again to our shareholders' meeting, the proposal to increase to 45%, and that is where we stand at this point.

No, super clear, Mario. If I may, just a follow-up on the growth. Last time we discussed this, I think the message was there were specific regions on asset quality, right, like 3, 4 regions, especially around Mexico City, like maybe a little bit of training regarding the loan officers. And it seems like now that the individual new NPL formation is kind of peaking that maybe things are a little bit more under control. The question is, what is the message for investors that this will not repeat? Because I remember in the past, you're saying like, oh, we have a new underwriting model, we have better technology, the loan officers, they have less power to decide, right? And still, we face some problems. So whenever you start accelerating again for 2027, what gives you confidence that growth will not be followed by asset quality issues?

Yes. As Enrique said, we think that even though that the context is more complicated in general and that we need to be looking at the context in much detail, we believe that part of the things that happened were because of some changes that we did in our processes. And as we said since the last conference call, we have been addressing. And I just mentioned some of the things that we have been doing. So we feel very comfortable that the things that are under control will allow us to come back to the levels where we feel comfortable.

Yes, Yuri, and let me give you more detail on this because I'm sure that this will be something that maybe is in the questions of many of you. So let me explain you with a little bit more detail what happened and the current situation in our loan portfolio in general, but specifically also in Credito Individual in Mexico. First of all, we have to say that the reason why we have higher NPLs in the group -- individual lending portfolio in Mexico are basically in two, let's say, perspective. The first one is an internal perspective and the second one is the external perspective. So let me start by the external perspective.

This year, we know that we have had and since last year, a deceleration of the economic activity in Mexico. Last year was a very good year for us, and our customers didn't feel that much that deceleration. But this year, they started to feel it a little bit more. We have observed that our customers are renewing their loans more cautiously and requesting smaller loan amounts, recognizing a more challenging economic environment. And we see this as a positive sign since it demonstrates that our customers are managing their indebtedness responsibly. And likewise, we have always been committed to ensuring that our customers do not become overleveraged. But for this reason is that we have revised our loan portfolio in general, and we are guiding 6% to 9%, not only because the individual loan portfolio deceleration, but also because we see this dynamic in the market. So these are the external factors, let's say.

Now let me talk -- tell you about the internal factors that will explain why this is happening and why this should not be happening in the future or how could the future look on this. For the individual loan portfolio in our individual products, throughout the history of the individual loan business, we have experienced several periods of rapid expansion of the portfolio. Actually, I can remind that between 2011 and 2012, our portfolio in the credit individual grew like 3x in these 2 years. And between 2014 and 2016, it doubled its size also. And in both cases, NPL levels increased to figures similar to those we are experiencing today.

In the first case, it grew to 7.9% and in the second case, it was 5.8%. And in each instance, we deliberately slowed our portfolio growth in order to strengthen the portfolio quality before resuming expansion with this cycle that I explained in which we grow and then we control. Today, after growing this portfolio approximately 5x since 2021, that's the rate of growth that we have had in individual lending now. Since 2021, the portfolio grew 5x. Our ratio now stands at 6.5%. Consequently, we have decided to moderate the growth while implementing the corrective measures. And we have already begun to observe signs of stabilization and expect NPLs levels to improve over the maybe two next quarters.

So in summary, following periods of rapid expansion is natural to have -- after we have this rapid expansion, it is natural to have slowdown periods to stabilize the quality of the portfolio. Secondly, we have experienced 4 consecutive years of strong portfolio growth in Credito Individual recently. Then we have successfully managed similar portfolio quality levels in the past and consistently restored the portfolio performance before resuming growth. And the good news is that based on our experience, we are already seeing early signs of stabilization and expect clear evidence of recovery over the next 2 quarters.

So that's the general situation, and I hope this will give you a better color of what we are facing now, which is, I believe, or I will define it as a natural cycle of our business and the confidence that we will -- and we are putting our actions in place, and we are looking signs of recovery.

Our next question comes from Tito Labarta of Goldman Sachs.

I guess just following up a little bit on credit quality, but also, I guess, the provisioning from here, right? Because I think in the past, you said cost of risk 13%, 13.5%, right? You provision a lot more given some of the issues that you're seeing. Should we expect this to moderate already beginning next quarter? Or could it take some time just as you sort of get through some of the problem loans? Just to think about the cost of risk evolution and how it should go from here?

And then also following up on the loan growth side of things, right? I know you're feeling a little bit more confident here. But given the sort of short-term slowdown that you're doing, how quickly can you return? I mean, given that some of the issues were because you grew too fast the last several years, would you need to sort of slow down sort of for an extended period of time before you're really able to accelerate growth maybe back to the double digits? Or do you think it will be much faster than that in terms of your ability to recover growth?

Thank you. Well, regarding the expectations, let me give you the expectations for year-end. We expect that NPLs should be around 4%, maybe a little higher and cost of risk should start coming back to levels around 13.5%, as I said. So that is for this year. Obviously, and we will be giving updates every year in the future, given the new mix that we will be having and we will be taking a higher share of the mix, we would expect that these levels would be growing in a very controlled way going forward. But for the end of the year, we should expect around 4% NPLs and around 13.5% cost of risk.

Now regarding loan growth, we think that we have the tools, as Enrique just mentioned, to speed up growth with the new digitalization tools that we implemented last year, specifically individual lending, we are very, very efficient to be able to answer to the clients very fast, to be able to be more productive. So I think that we have already the capabilities to accelerate. But we obviously -- and it has been proven because we were able to grow a lot in the last years, as Enrique just explained. But we need to be also very, very prudent using also the control tools that we also have deployed. So we're really not worried about accelerating growth. We want to accelerate growth with control. But I think we have the tools to do both.

Okay. Great. That's helpful, Mario. And just to clarify, right, and then I get the 13.5% for the full year. But is it sort of like an immediate improvement, right? It was just you had to book additional provisions this quarter? Or is it more a moderation, right? Because I mean, you had a relatively low level, right, 12.8% in 1Q. So just to think like on how that evolves, sort of you sort of gradually get back to 13.5%? Or is it sort of you had just a bad quarter of provisions this quarter and you can immediately adjust next quarter?

No. I mean it obviously has a lag. And again, as mentioned before, and we expect that in 2 quarters, we're going to be seeing these adjustments where things are normalized.

Our next question comes from Eric Ito of Bradesco.

I have 2 questions as well. The first one is regarding OpEx and efficiency. When we look at your initial remarks, Enrique, you mentioned, I think you updated the guidance for 2026. Maybe we have a slightly higher NIM for this year, running around 41% and then OpEx around 10%, which implies your efficiency ratio for this year is probably better than you had in the beginning of the year as you control operating expenses under this, let's say, more cautious scenario. But then I'd just like to get your thoughts here for 2027, if we can maybe see a continuous improvement in efficiency ratio. I think in the previous call, you mentioned and you announced some rebate programs for the good clients. Maybe these are on hold. So I just want to get and pick your brains on your expectations for this program and efficiency for 2027.

And then I guess my second question is regarding Peru. I think Peru is developing a very good performance for now. Just that we are starting to hear some concerns with El Niño potentially impacting Peru. So just want to get your thoughts here on how do you see provisioning for Peru? And if there could be any impact on your loan growth similar to what we have with Mexico because of these concerns with El Niño?

Okay. Regarding efficiency, well, again, I'd like to say that our objective in medium term is to keep improving the efficiency ratio. And our plans are to bring it below 60% in a couple of years, hopefully. So we are absolutely committed to keep doing that. And again, we have drivers on the top line that will allow us to grow, as we just mentioned. And also, we have drivers in the cost side through all of the improvements that we have been doing that should allow us to maintain efficiency. And again, we will maintain this also medium-term permanent rule where our income needs to be growing faster than our expenses, meaning that we will maintain positive jaws. And that are the drivers that will allow us to get efficiency ratios lower.

Yes, Eric. And regarding Peru, I can happily say that our results and operations in Peru are running very, very well. In our individual loan portfolio, we continue to grow at a strong pace, and we are maintaining solid asset quality. Actually, a year-to-year growth in the individual lending in Peru has been 12% with a 3.2% NPLs. And also, our group lending portfolio has experienced a growth of 7% with a 3.3% NPL. So we are doing good there. And yes, El Niño is something that we are very aware of. Actually, it has been in our conversation, not only in the management team, but also in our Boards in Mexico and in Peru regarding El Niño in Peru. And yes, we have provisions considered and maybe Mario can tell you a little bit more about this, but this is in our forecast also.

Okay. So it's already -- so just to be clear here on the provisions for El Niño, you are still -- you're already considering that for the guidance of 13.5%, but we haven't seen anything, let's say, in the first half yet?

No, we believe that the provisions that we have today, we are covered. We will be reviewing as things go through. We have voluntary provisions in Peru above IFRS provisions that we feel comfortable with. But it's something that we will continuously looking at. Important to say that all of the weather impacts -- we need to see them community by community because the impact that you have, it's not generalized. It's always in each community. So we need to be looking very closely all of our offices, both in Mexico and Peru, but we feel comfortable with the provisions that we have today.

And just to clarify, for loan growth, you still maintain your expectations, let's say, to keep this double digit for this year. So for now, no concerns on slowing down?

Yes. In Peru, yes, double digit.

Our next question comes from Ernesto Gabilondo of Bank of America.

We were a little concerned with the monthly data from the regulator, especially in April, but you were able to meet expectations, in the first half, net income is expanding 12%. So the only Mexican financial with that growth and likely for the next year. So congrats on your results.

My first question will be a follow-up to Yuri's question on loan growth. As you mentioned, you now expect loan growth between 6% to 9%, recognizing a tough year-over-year comp in the last quarter of the year and that you are prioritizing asset quality over loan growth. Having said that, how should we think about loan growth next year? When are you expecting to reaccelerate and that translating into NII and fee income growth?

And for my second question is if you can provide more details on which geographies or micro sectors were the most affected in the asset quality of the individual sector? I believe you were nicely expanding this product with the digitalization process. So I just wanted to see also if there were some adjustments in the digitalization process or how can we be more comfortable that you can return again to grow this portfolio?

Okay. Yes. Well, thank you first. Yes, you're right. We have been delivering a very strong quarter with double-digit growth in earnings. And again, our commitment, as we have said, is to reach the 13% to 16% guide in EPS, and we think that we feel comfortable doing that. As I mentioned in my remarks, even though that we're saying that the loan growth will be 6% to 9%, it's important to note that it's a year-end to year-end number or December to December. And remember that December of '25 was a very high growth quarter. So in order to make the numbers right, it's important to look at the average portfolio for the year. And the average portfolio of the year will be, as I said, around 10% or double digit.

Having said that, we expect that the interest income will follow more or less that route. And with improvement in the interest expenses, we should have a double-digit growth in the NIM, as we said. And even after the growth of provisions, we will be able to maintain double-digit growth in the NIM after provisions and through the cost controls that we already said because our objective is to reach the EPS guidance.

Having said that, again, our medium-term objective is to maintain double-digit growth in the portfolio and the earnings. We would like to restore that as soon as possible. But now most important is to do with control. So we really need to see how the next 2 quarters develop in order to build the full 2027 year plan and then give you very specific guidance on what we should expect specifically in '27. But our objective is to restore double digit both in portfolio and in earnings. That's our medium-term goal.

Ernesto, regarding the individual lending portfolio, let me speak a little bit more in detail about the main factors behind the deterioration because it doesn't have to do that much with geographies. First of all, I think that we have this economic slowdown that is affecting the consumer activity in Mexico, which is general. So that's one of the reasons I already explained. On the other hand, some of the things that we did and that we are now changing after a long period of growth. So first of all, we have to take in account that we come from 4 or 5 years of very aggressive growth and we hired more loan officers, we trained more loan officers. So that's a challenge itself. And then we also made some product adjustments to -- with the intention of simplifying the process for loan officers and the experience, making a better experience for our clients. And also, we implement changes in the incentive models for the loan officers that were directly putting emphasis on the growth.

So all of these factors, some of them gave us very good results, and that's why we grew for so long, having a very good quality of the portfolio. But in some other cases, we made some mistakes. So -- and that's the things that we are changing now. So having said that, and I believe this will give you more color of what is causing this and why this is more like a matter of making adjustments to our processes, methodology, et cetera. But some of these changes proven beneficial, others didn't deliver the expected results. We have learned from that experience, and we have implemented the necessary corrective actions. And it is worth to emphasize that addressing these changes is also contributing to a stronger lending methodology and enabling us to build a more efficient operating process for the future growth.

Our next question comes from Ricardo Buchpiguel of BTG Pactual.

I have a question for growth, but now looking more in the long run. Gentera has been growing at double-digit pace for -- since 2021, and it's way above the Mexican credit industry. And there has been some volatile moments like we are seeing now where you are adjusting a little bit through the cycle. But in your view, how long can you keep sustaining this double-digit loan growth and doing that without moving towards new markets? And just to get a better sense on the size of the opportunity, if you could comment on what is you view for the market share of Compartamos Mexico in your specific segment, which is microfinance?

And for my second question, can you provide more color on the drivers for the 41% NIM that you indicated in this call? And now the easing cycle is mostly behind us, I'm not sure if you're embedding some improvement in terms of funding costs or higher spreads because you are being a little bit more restrictive on the second half. So any color on that would be helpful.

Regarding loan growth, as we have said, it's -- the most important thing is the addressable market. And as we have always said, we believe -- well, in the segments of the population in Mexico, there are around 90 million people, out of which around 60 million people are adults. And of the remaining 30 million, many are kids that will join the workforce in the next years. So we serve 6.7 million persons about, and in Mexico, 5.7 million people. So as you can see, the addressable market is very large. With the products that we have in Mexico, we think that those -- the segments that they serve still have chance to keep growing at 10%. But going forward in the long run, we have some strategic initiatives that we need to develop in order to be able to have more services to serve a larger share of this big addressable market. So I think that we have a lot of work in the future. And I think that this double-digit growth is something that is achievable.

And Ricardo, let me remind some of the specific data that we have given around market share and market potential in Mexico as well as in Peru. But here, as Mario was saying, we have a huge market potential. We still have a huge market potential in both countries. In Mexico, if we take the people, the 18 years old and elder from our segment, we are talking about around 50 million people from which 36% have a formal credit, but the rest don't have a formal credit. So we are talking around 30 million people that still we can serve. And in Peru, that number is also big. We have 14 million people, 18 years older in our segment. And we have -- half of that have a formal credit, but the other half doesn't.

So that's why we believe looking forward, we can still grow at double digit for the following years. And in terms of our market share in Mexico, yes, we are a leader there. We have 70% of market share in Mexico in the group lending methodology. But we have 40% in the individual lending methodology, so we still can grow also there. And in Peru, those numbers are we have -- in the group lending methodology, we were the only players there. Now they're coming new players in the group lending methodology. But anyway, we have 70% of the market share. And in the individual lending, we have a stronger microfinance industry in Peru, and we are competing there with several players having 6% of the market share.

And regarding the NIMs, given the fact that the average portfolio has been growing this year double digit, as Mario was describing in his remarks, the interest income that we have been generating is growing at double digit. And also, the good reference interest rate environment that we have in both countries, Mexico and Peru has allowed us to have a more convenient interest expense line. And that is the factor that the NIMs that we are expecting in Gentera, as Mario was describing, is -- will be moving around 41% before risk and after risk around 29%, 30%.

Our next question comes from Gustavo Araujo of UBS.

Congratulations on the results. So just to understand on Compartamos Peru, we haven't seen the operation delivering ROE above 25% over the past few quarters. Do you believe this level is sustainable? And what could you consider a level of profitability going forward? And second, also in Compartamos Peru. in this quarter, we saw a deterioration on the NPL ratio. Could you give a little bit more color on that? And do you see concerns for the second half of the year?

Yes, sure. Gustavo, let me start with the context in Peru, actually, as I said, we are performing very well in Peru. And let me divide this conversation in individual and group lending. As you know, it was strategic for us to buy the operation in Peru in 2011 because we wanted to, one, to learn from the individual lending methodology and bring it to Mexico, which has been successful. And the second thing is to take the group lending methodology to Peru, and we have grown very, very -- not fast maybe, but very solidly and in an important way in Peru and group lending.

By now, I can tell you that in the group lending methodology, we remain as the leaders, and we are starting to see other players to come into the market, which is good because the industry is going to be more complete, let's say. But we are very strong there and the potential that we have on growing in Peru is still very high in the group lending methodology. And in the individual lending methodology, we feel very strong to -- and actually, we are having very good numbers in the individual lending despite that, that's a very competitive environment and industry.

And the reason why we feel strong and we are having good results is because we implemented 2 years ago the digital platform, BALPA, which allows our loan officers to manage their portfolios through digital technologies. So now we are competing very strongly with the usual suspects that we have there. And that's why we are having very good growth in digital lending with very good portfolio quality. And well, maybe I will leave Mario to speak a little bit more about the quality of the portfolio.

Yes. And even though there has been a little pickup, it's performing better than expected. So maybe just for the year-end, we should expect NPLs around 5% or so and cost of risk around 8.8%. So I think that even though it has picked up a little bit, it's below our original expectations for the year.

Our next question comes from Brian Flores of Citi.

I just wanted to ask you a strategic question, just to see if I understand correctly what is happening, right? Because I think you're undergoing a transformation. And if I understand correctly, we, as analysts, we should be comfortable with the trade-off between a structurally higher cost of risk that is being compensated by higher fees, perhaps a more efficient model in terms of OpEx and that this naturally sustains both higher growth in the midterm and also above or similar levels to around 24%. I just wanted to check with you if this is making sense or is there anything here that is different to think about?

You got it perfect. We couldn't say it better.

You're absolutely right. We are evolving, and we have been evolving for a while. But just as you described it, the idea is with this new mix of products and with the growth of the different subsidiaries, with the contribution of the different products because now it's not only the mix of the portfolio, it's the mix of earnings, the mix of the different sources of income. We're following that route. We will have different metrics on risk different metrics on efficiency and different metrics of growth. But the idea is that we maintain, as we have already said, a double-digit growth in portfolio, double-digit growth in earnings with ROEs above 23%, as we have said, 23%, 24% and still with a very strong capitalization. So as you described it, it's exactly what we're thinking.

Our next question comes from Pablo Ordóñez from GBM.

I have a couple of questions on growth dynamics first and then a second one in Peru. Enrique, you mentioned that in your remarks, the external and internal factors affecting your products in Mexico. In the external, you mentioned the economic weakness. But also, I would like to hear your update on the competitive environment from other banks and fintechs. Have your individual clients also been receiving products from other institutions? We have heard some other banks, for instance, like mentioning that they are observing weaker numbers in the credit bureau data. That's on individual.

And then a second question also in Mexico on group loans. We also observed a weak quarter with a sequential contraction in the portfolio. 2025 was also a portfolio that had a single-digit growth. So what is the potential for this group portfolio methodology in Mexico? I'll stop here and then I'll ask my question on Peru.

Sure. Thank you, Pablo. And let me talk a little bit about competition. So as we have mentioned in previous discussions, Gentera primarily serves customers seeking working capital and consumer financing. And we are talking about C and D segments. So we have seen a lot of players coming in. Most of them fintech companies that are not focused on this market in this segment. I mean, not this segment and maybe they are more focused on the consumer lending. But having said that, we are seeing a broader expansion of credit availability across the market, which is also reaching some of our customers. So -- and these examples include fintechs expanding into the segment like Nu or Mercado Pago or Plata.

But we also have in the market government programs designed for small businesses such as Tandas para el Bienestar, which is something that we have always had in Mexico, and we believe that those programs actually helps our customers to maintain their economy. And we also have the traditional competitors to -- that continue to maintain a strong market presence, including -- and I'm speaking about microfinance, but Provident or Caja Popular Mexicana and even Banco Azteca and BanCoppel more in the consumer side. So how are we responding to this?

So we continue to grow responsibly while ensuring that our customers not become overleveraged. So that's our main concern on this side. As we see more competitors getting in, our main concern is how can we take care of our customers and be careful not to over indebt them. So our strategy is to remain our customers' first payment priority. So -- and for that, what we do is that we maintain very close to our customers because on this environment in which we do see more credit offering, being close to the customers and be the first payment priority is very, very important. So that's what we also do.

And we accomplished this by maintaining close relationships through loan officers to this physical presence that for us is very, very important. But this is precisely why we have decided to moderate our portfolio growth during 2026. So it's an important matter that you put on the table now. And it's a complement on the explanation that we gave previously. Above all, we are maintaining ourselves close to our customers, having this long-term relationship that we have always seen.

Yes. And regarding the second question, it's also our objective to maintain group lending growing double-digit growth. As of this year, or as of the first semester, it grew almost 17%. But we expect that for the full year, we will have the same effects that Enrique just explained for the whole portfolio of the bank in Mexico and then restoring double-digit growth also in group lending as soon as possible. Important to say that, obviously, the growth of individual lending typically is and will be higher than the growth in the group lending portfolio. But we have the same objectives for both products.

And then my question on Peru. So you already explained the loan dynamics. But on profitability, 2 consecutive quarters with ROE around 26%. We have seen some improvements in the cost of risk. So my question here is if we should continue to expect this 25% ROE for Peru for the second half. And in particularly, we have observed also that in general, in the Peruvian banking system, there has been some benefit in cost of risk from people taking money out from their pension accounts. Have you seen a benefit -- extraordinary benefit from this impact in Peru and if we should continue to expect this 25% ROE in the second half?

Yes. Well, I think that we should aim to have an ROE above 20%. That's where we are. '25, it was a great period. But I think it should be something between 20% and around 23%, something around 23% should be sustainable. And based on your second question, well, we haven't seen anything particular regarding the pension payments.

Our next question comes from Carlos Gomez-Lopez of HSBC.

Congratulations on the results. Two questions. First, I don't think we have talked about ConCrédito. That is a part of the business that probably is more linked to the Mexican economy. And we see that although the loan portfolio is going up by 15%, you actually have fewer users. So the loan per client is up 16%. Is that a segment where you think you could be reaching over indebtedness? And what do you expect for it for the rest of the year and into the coming years? Is that a segment that has more or less potential than Banco Compartamos? Second, if you have this available, could you give us your insurance fees for the quarters? We find them on an annual basis, but I don't think we -- you break them down for the company as a whole for this quarter. I believe it is the entirety of your fee income. Could you confirm that?

Thank you, Carlos. Let me talk a little bit about ConCrédito. ConCrédito is really performing very well and as expected. So this 15% that you mentioned, it is in line with projections. And yes, actually, we have seen maybe that the port portfolio has been taken care very carefully by our management team because what the strategy that we are following is that we want our Empresarias, which you know is our sales channel and distribution channel for the product. We want our Empresarias to become more mature. We have seen that as we have more mature Empresarias, we have a more efficient business. And now we are looking that the loans that are disbursing the Empresarias, which get more mature, are better loans in terms of the quality of the portfolio, but also they are increasing the ticket. So that's the strategy that we are following. And that's why maybe you're looking some different dynamics that what you expected, I don't know. But yes, in the quality of the portfolio that we are having in ConCrédito is also very good. It's in the lower end of the ranges that we define as healthy.

Okay. So it's in line with your expectations. We are not too concerned about over indebtedness. This is what you want to do with fewer entrepreneurs to have more loans. And what would you -- what about the final demand? Again, that is in connection with how Mexico is doing. We know we had a slow beginning of the year. Has there been any change in the recent months that suggests higher demand or the economy is still relatively?

No. On the one hand, yes, the business is being affected by the slowdown of the economy in general, yes. But on the other hand, as you know, ConCrédito's product, the Vale de Dinero is purely consumer loan and consumer loans for us have a very, very high potential. But we are not seeing a restricted demand on that product. On the contrary, we believe we can grow at the pace we have forecast.

And to add one example of that is also CrediTienda. -- the growth that we are experiencing in this product line is moving around 27% year-on-year. So some dynamics in Credit. And regarding the insurance business, Carlos, more or less 90% of the fee income line that is reflected in the P&L comes from the insurance business in the different.

And that will be 90% of the fee income, which then gets netted out with fee expenses. Is that correct?

Well, yes, there are different concepts. The fee income comes mostly from insurance, as Enrique said. And fee expenses come mostly from the use of third-party channels. So we -- I mean, the right way is to see them independently. But when you look at net fees, they are growing because of the growth of the insurance business and staying stable and even diminishing because of our use of third-party channels.

On Page 12 of the press release, we published a graph where you can see how the insurance -- I mean, how the fee income is generated and how the fee expenses are paid to these different channels.

That's right. But that's for Compartamos Banco, that was the Mexican business, right? So I was asking about.

Similar dynamics also in Peru. And the insurance business is not reflected in the fee income line. It's reflected in the other operating and income line.

Our next question comes from Andres Soto of Santander.

My first question is regarding -- I would like to hear your thoughts on the economics of individual lending versus group lending. In the past, I understood when you compare both, they provided similar levels of ROE, considering that you will have higher cost of risk for individual lending, but that was partially offset by improved efficiency as you perform less visits to the clients. As you recalibrate your model, how do you expect -- how do you see the economics evolving? Do you require -- based on your assessment, will you require more visits for your customers in the individual lending model? Therefore, efficiency is going to be similar to the group lending and then you will need to increase interest to compensate for that? Or how do you think in terms of the relative value of each of these segments?

Yes, thank you. Well, the P&L equation is basically the same. It doesn't change that much. As you said, number one, first, we start with higher tickets. That's very important to take into consideration. So it's a higher loan in amount. Then rates are typically lower than group lending. Then risk is higher than group lending. But then at the expense level, it can be, if you want, more efficiently managed. So both products are very profitable. And independently of the product, we have different drivers and incentives in terms of the variable of the equation that we want to address in certain moments.

So for example, we have incentives to grow the portfolio size. We have also incentive when we want to increase the ticket or reduce it. If we see that risk is increasing, we can use incentives to make our sales force focus more on visiting, as you say. So we can use the different levers, operational levers that we have to address the different P&Ls. But as you said, rates are typically lower, risk is typically higher. Expenses are typically lower relative to the group lending methodology, but profitability is very good in both products.

And let me talk a little bit about the expectations that we have in the individual portfolio looking forward. I have very interesting numbers around here. So let me share with you some of them. But I already said that we grew like 5x in the past 4 years this portfolio. 4 years ago, we were around MXN 3 billion in the portfolio. Today, we are around MXN 19 billion in the portfolio. And yet we have a market share with that MXN 19 billion of a little bit less than 40%. So it's a lot of potential there. I think that we are becoming a very relevant player in that product. And we believe there's still a large market to address there. And I'm talking about specifically working capital loans to small businesses. So that's our individual lending client. And we are sure that after we go through this control phase after the big growth now controlling. When we start growing again, we're going to keep on growing on a similar pace. So we are enthusiastic about the product, and we feel it has a lot of potential yet.

My second question is regarding your new loan growth guidance for 2026. I would like to understand how much of that is going to be driven by slower origination and how much for additional write-offs. We saw significant write-offs for individual lending this quarter. Should we expect this level of write-offs to continue or even increase in the second half of the year?

I mean, it's mainly driven by the loan growth that we're expecting and then it's the full dynamics of the portfolio that we were going to be following. But again, as we said, for year-end, we will have growth, and we will have an average portfolio that will be higher than last year. And again, as soon as we can, we will restore double-digit growth.

And specifically on write-offs, do you expect write-offs to increase in the second half of the year?

Write-offs have obviously the lag. We start with NPLs, then -- and provisions, then we have to follow all the process. And that's why write-offs will continue to be higher, but we hope that stable in the next quarters until we empty all of the write-offs that we have to empty because of the increased risk that we observed in these quarters. And remember that individual lending takes a little longer than group lending.

We don't have any questions at this time. I would like to hand the floor back over to management for closing comments.

Well, thank you very much all for your attention and your presence here today. As you have heard, we had a good first semester. We presented very good and solid results. We are aware that we are facing challenges and that we see them as part of our business as usual, most of them. On the other hand, we are aware that the local economy in Mexico contact is slowing down. So we have to be very aware of that also and take it into consideration.

But taking all this in consideration, we are looking at, let's say, kind of recovery phase for individual lending looking forward this year. We are looking as a prudent focus on the growth that we are going to still looking at the other subsidiaries and products. And we believe we're going to have a very good close of the results of this year. We are confident because we also know that we have a very clear diagnosis. We have a plan. We are executing. So thank you for your trust on this. Thank you for your questions, and see you next quarter.

With this, concludes the conference of today. You may now disconnect.

Good morning, and welcome to the Fourth Quarter 2025 Gentera's Conference Call. Now I would like to turn the call to Mr. Enrique Barrera, Investor Relations Officer of the company. Sir, you may begin.

Good day. Thank you all for joining us and for your continued interest in Gentera. I'm Enrique Barrera, the company's Investor Relations Officer. I'm very pleased to introduce our management team.

With us today are Mr. Enrique Majos, Gentera's Chief Executive Officer; Mario Langarica, Gentera's Chief Financial Officer. Enrique and Mario will present Gentera's results for the fourth quarter period and the full year 2025 as per the report that was issued yesterday and we will actively participate in the Q&A session of this conference call.

[Operator Instructions]. Now please note that during this presentation, Gentera may make forward-looking statements. These do not account for future economic circumstances, industry conditions, company performance or financial results. Additional information on forward-looking statements can be found in the disclaimer located in our earnings release. If you did not receive a copy of the release or if you have any questions, please do not hesitate to contact our Investor Relations department in Mexico City. If you are a member of the media, we ask you to contact us directly. I would now like to turn the call over to Mr. Enrique Majos for his presentation. Enrique, please go ahead.

Thank you. Hello. Good morning to most of you, and good afternoon to some of you. Thank you for your interest in today's call. Today, we will share with you our fourth quarter 2025 results as well as some notes on our full year results.

As you have already seen in our press release, Gentera's financial results continue to be extraordinary. In 2025, we delivered record growth in clients, loan portfolio and net income. And beyond economic value, we continue to generate social and human value for our clients, our employees and our investors. Today, we will also be sharing with you our business guidance for 2026, which reflects both the strength of our operations and also the momentum of the market we serve.

To begin, I would like to take a moment to talk about our present and future vision and of course, our priorities for 2026. Our vision for the future must start with our purpose as an organization and also based on the needs of our clients. Empowering the dreams of our clients and employees is what gives meaning to our work. And to achieve that, we must clearly understand what our clients truly need.

Our 35 years of history and experience, together with the constant feedback we receive from our clients confirm that those needs are defined around 5 basic needs and services. Those 5 needs are: first, working capital loans; second, credit for consumption needs; third, protections through different types of insurance products; fourth, payment method and digital transaction solutions; and fifth, savings products. These needs are what guide our priorities and our strategy. And based on them, we have defined our 5 strategic pillars. These pillars determine where we invest our resources, define our initiatives and give direction to our efforts.

So let me briefly walk you through them. First, we will continue to grow our working capital credit products while maintaining our market leadership. Second, through [ ConCrédito ] and Creditienda, we will continue increasing our participation in the consumer credit market. Third, we will keep expanding our insurance offering, further strengthening the relevance of these products within our financial solutions portfolio. Fourth, we will strengthen our savings products, making them more convenient and increasingly supported by digital platforms and tools. And fifth, we will continue strengthening our technological and digital capabilities, including the productive, responsible and secure use of artificial intelligence.

This is not optional. It's essential for Gentera and for any company that aims to remain relevant over the long run. I would also like to update you on the impact of our transformation plan, which we launched several years ago and which is directly tied to these strategic initiatives. As you may remember, last year, I shared this chart showing how the transformation initiatives we launched in 2019 marked a clear inflection point in Gentera's growth.

Between 2010 and 2019, our compounded annual growth in net income was 6.5%. After planning and executing our transformation initiatives, the growth doubled to 14.3% in the 2019 to 2024 period. And now when we include 2025, our compounded annual growth in net income increases even further to 17.1%. These results are not a coincidence. They are mainly the result of a set of fundamental strengths that define Gentera as an organization.

So let me highlight a few of them. First, we have valuable and relevant products, and there is still strong unmet demand in our markets, both in Mexico and in Peru. Second, over the past years, we have evolved from a single product fully manual process organization into a multi-company group with more productive and automated processes. This has allowed us to broaden our product offering, diversifying our revenues and operate more efficiently.

Third, our financial strength has been a key enabler, not only to capture growth opportunities, but also to navigate difficult periods in crisis. And fourth and most importantly, Gentera is built on extraordinary people, capable, committed, honest and deeply focused on serving our clients. From our loan officers to the senior management, this team is, without a doubt, our greatest strength. These elements don't just explain our past results. They are also the foundation of Gentera's future growth.

Finally, I would like to highlight 2 core principles that guide everything we do at Gentera. The first one, our commitment to total value creation, meaning social value, economic value and human value. Over the past few years, especially after the pandemic, we have demonstrated this commitment in every and very tangible ways. Second, our conviction that this value must be shared among our clients, our employees and our investors as well as the community where we operate. In line with these principles, this year, we are launching 3 specific initiatives to share that value.

On one hand, this year, we will introduce new loyalty programs that will return economic value to our clients. These programs will not only benefit our clients directly, but also will improve our customer retention rate and strengthen our competitive position. On the other hand, our Board of Directors will propose to the shareholders' meeting an increase in our dividend payout policy. From the current 40% profit distribution, we will be able to increase our dividend policy up to 45% starting this year. And finally, the Board of Directors will also propose to the shareholders' meeting to increase Gentera Economico's contribution to its foundation.

Today, [indiscernible] receives 2% of the group's profit and the proposal is to increase this to 3%. With these actions, we continue to honor our principles of value creation and share of value. So with that, I will now turn the call over to Mario Langarica, who will walk you through our fourth quarter 2025 results and our guidance for 2026. As always, after that, we will be happy to take any questions you may have. So thank you very much.

Thank you, Enrique, and good day to everyone. As always, we appreciate your interest in Gentera. As Enrique mentioned in his remarks, we are very enthusiastic with the progress of our strategy and the remarkable and solid results that Gentera is presenting for 2025. And we are very excited with the positive dynamics and opportunities that we are seeing for '26 and the following years.

In 2025, we reached a new milestone of 6.5 million people using our financial services, adding 684,000 people in a year with an 11.8% growth compared to 2024. The strategic decisions we have taken in previous years have allowed Gentera to finalize the year with a historic loan portfolio of MXN 93.6 billion, growing 13.1% compared to 2024. It is important to highlight that our credit subsidiaries, Banco [ Compartamos ] Mexico, Banco Compartamos Peru and ConCrédito closed the year with double-digit growth in their specific loan portfolios in local currencies. Special notice to [ Compartamos ] Peru that presented a strong recovery compared to 2024. For 2026, we expect double-digit growth in the portfolios of our 3 credit subsidiaries aligned with Gentera's loan growth guidance.

Now let me talk about the performance of the different lines of our income statement. Gentera's 2025 interest income grew 20.3% versus 2024, reaching MXN 48.4 billion and net interest income grew 22.9% to amount MXN 40.5 billion, following the solid growth in clients and portfolio. NIM amounted to 41% in 2025, in line with our expectations for the year and a slight improvement compared to 2024 of level of 39.8%. For 2026, we expect to have our NIM moving around 41% to 42%.

Cost of risk for 2025 amounted to 13%, mainly explained by the mix, the growth and the asset quality of our portfolio. We feel comfortable with the observed level of cost of risk, and we expect to maintain it around 13% for year 2026. Gentera's 2025 provision for loan losses amounted to MXN 11.2 billion, a 21.7% growth, and we finished the year with a 222% coverage ratio compared to 209.5% in 2024. NIM after provisions for year 2025 amounted to 29.7% compared to 28.7% last year -- in 2024.

For year 2026, we expect to have a NIM after provisions around 30% Net fees amounted to MXN 6.2 billion compared to MXN 4.65 billion in 2024, representing a 31.5% growth. These fees have been mostly driven by the strong results of our insurance business that represents around 90% of the collected commissions. It is also important to keep signaling the important contribution that [indiscernible], our Banco Compartamos branches and our digital applications have in the business model that allows Gentera to depend less on third-party channels, therefore, reducing fee expenses in relative terms.

Operational expenses for 2025 amounted to MXN 23.6 billion, representing a 19.3% increase compared to 2024. Most of this growth follows the growth of our business, including a larger sales force and upgraded infrastructure, strategic initiatives and investments to make our operation more productive and larger variable compensation explained by the extraordinary results achieved during the year. Worth highlighting in the OpEx line for 4Q '25 is that Banco Compartamos changed its methodology for potential tax contingencies, aligning it with practices similar to those used by other banks and financial institutions in Mexico. This new methodology is based on expected value applied to different statistical analysis scenarios.

The calculation obtained with this new methodology represented an effect or a reserve amounting to MXN 500 million, which was recorded in operating expenses line in 4Q '25. Operational expenses for 2026 should grow between 12% and 13%. In 2025, our net income amounted to MXN 8.5 billion, a historic record, growing 31.8% compared to '24. Gentera's controlling participation of net income in '25 amounted to MXN 8.2 billion, representing an EPS of MXN 520 per share for the year, above our original guidance and 36.8% above 2024 EPS of MXN 3.80.

Gentera's controlling ROE for '25 stood at 24.8%, also above our original expectation for the year. The ROE reached this year is the best level achieved in the past 10 years. For 2026, we expect Gentera's controlling ROE to be between 24% and 25%. All of this while maintaining solid and healthy liquidity levels, strong and diverse access to funding sources and robust capitalization.

Before finalizing my remarks, some additional comments about ConCredito. We would like to inform you about the decision that was made during 4Q '25. As you may remember, in year 2024, we communicated the corporate restructuring of ConCrédito. As a result of this, in 2025 and on a nonrecurring basis, it was decided to generate a reserve related to the deferred tax assets due to the uncertainty of the future recovery. The later resulted in the cancellation of the deferred tax asset with an impact of MXN 328 million in 4Q '25. Excluding this effect, ConCrédito would have concluded the year with a net income above MXN 1 billion and in line with our original business expectation.

Now to conclude my remarks, after finalizing a remarkable year 2025, we expect that 2026 will represent another year of great achievements and a year in which we will keep consolidating our modernization initiatives. As a result of this and as you probably read in our press release, our guidance for 2026 is the following: loan portfolio growth between 13% and 16%, net income growth between 13% and 16%, representing an EPS between MXN 5.88 and MXN 6.03. As you can see, this new guidance is in line with the double-digit growth that we have experienced in past years and the one that we keep expecting for the following years.

As explained by Enrique, this guidance also includes 3 very important initiatives that will strengthen our commitment to keep generating total value. First, we expect to launch improvements in the commercial proposal for our customers in the second half of '26. Second, we will increase the contribution of our net income from 2% to 3% to [indiscernible] Banco Compartamos to support more social programs. And third, we are proposing to our shareholders' meeting to increase the maximum limit of our dividend payout from 40% to 45%. With these 3 initiatives, we will keep sharing value with our customers, with the society and with our shareholders.

Now to conclude, I can tell you that we're strongly motivated by the results achieved in 2025, and we continue very excited about the transformation that is being implemented in the company and the strategic pillars, which will help us to keep improving our service and increasing our product offering. We are fully committed to continue working hard in servicing millions of clients in Mexico and in Peru, aiming to support them in their different financial needs. That is all for my remarks. Thank you all for your attention. Now you can -- we can move forward to the Q&A session.

[Operator Instructions] Our first question comes from Eric Ito of Bradesco.

First, congrats on your transformation plan since 2019, pretty good outcome. I have 2 questions here on my side. First one, I'd like to ask on one of your initiatives that you mentioned during the presentation about the new loyalty program. So if you could give us more sense on that on what we can expect for this, more details? I don't know if you're going to give back some money to the clients depending on the performance. And will that be recorded in new operating expenses and if that 13% that you guided already includes the new loyalty program?

And then my second question is on cost of risk. You mentioned that expectation for this year is of 13% but when we look at the fourth quarter, you delivered 14.5%, a slight pressure on NPLs. So I just want to get more color here on the expectation for cost of risk and your -- what's implied for NPLs and performance of loans for this year?

Thank you, Eric. This is Enrique Majos. And yes, about your first question about our new loyalty program. This program, we are very excited about it, first of all. And this program is in the process of being designed by our commercial team. So we believe that this will be out there by the second half of this year. We don't have very precise numbers yet, but I can tell you that these numbers are already in a [indiscernible] way, are already included in our guidance for this year.

Thank you, Eric. Regarding cost of risk, yes, we saw a little pickup in the last quarter. But again, we expect that we will be controlling and focusing a lot on making sure that asset quality keeps in line. And we would expect to have NPLs around 4% for the year and cost of risk around 13%. So we feel comfortable about that.

Okay. And just a follow-up on the first one on the operating expenses that you mentioned that are already included in the guidance. Still on OpEx, can we expect efficiency gains this year with this growth that you guys are expecting, especially with the initiatives?

No. As Enrique said, under this specific guidance that we gave on operational expenses, we're considering that in the second half, we will have a space for the commercial upgrades.

And the OpEx should be stable compared to 2025.

Our next question comes from Ernesto Gabilondo of Bank of America.

Congrats on surpassing your [ 2020 ] guidance despite the couple of nonrecurring impacts. My first question will be on your loan growth expectations. Just wondering if you can elaborate the loan growth per segment for group lending, individual, ConCrédito, Peru. Then my second question is on fees. We have seen fees surpassing our expectations in the last years. We have been forecasting to be growing roughly in line with loan growth. But just wondering if there's still room for positive surprises, especially as you are now on the way to digitalize the group lending methodology, you will be start using artificial intelligence. So can you elaborate on how this artificial intelligence and the utilization of the group lending methodology could help to fees or other revenues?

And my last question is a follow-up on your guidance. As you mentioned last quarter, you have a couple of hits, [indiscernible] this contingency tax. And the other one, the deferred taxes related to ConCrédito. So for 2026, we shouldn't expect that MXN 500 million to show up in the OpEx for this year. And also on the other hand, we shouldn't expect the effective tax rate to be at 34%. It should be probably returning to 30% this year. So I just wanted to check that.

And then on this contingency tax, is this related to the litigation you have for a credit tax of MXN 1.2 billion? Or as you mentioned, it's just to be aligned with the other banks practices and maybe aligning to the auditor's recommendation. So any color on this and the update on this litigation will be very helpful.

Thank you, Ernesto. A lot of very relevant questions. Thank you so much. Let me start with the first one. In the long run, how do we see our portfolio mix? As you know, we have these 2 products, the group lending, the individual lending, and we have these 2 markets, Mexico and Peru. So as we have seen in the recent years, the potential for the individual lending products in Mexico is very good as well as the potential that group lending methodology has in Peru. And on the other side, we have a more mature market for the individual lending in Peru and high potential growth in individual lending in Mexico, but a more mature market in the group lending in Mexico.

So taking that in account, what we have seen in the recent year, let's say, the last year is that in Mexico, the individual lending portfolio has grown in a very important way. Now if I give you numbers of how we closed 2025, we have 42% of our portfolio in Mexico with individual group portfolio and 58% of the portfolio is group lending. In Peru, is that -- now is not that much different, but it's different. In Peru, 53% of the portfolio is individual and 47% is group lending portfolio.

But anyway, looking forward and in the long run, what we see, we would like to see in the following, let's say, 3 to 5 years, a convergence of both markets, Mexico and Peru and have maybe 2/3 of the portfolio in individual lending products and 1/3 of the portfolio with a group lending methodology.

Regarding fees, Ernesto, well, we expect a normalization this year. The last couple of years in insurance were very successful because basically, we launched new products, and we expanded the offering to family members of our clients. That's what mostly drove the higher growth compared to the client base. For this year, we expect to normalize it more close to the growth of clients. And obviously, we are -- as Enrique mentioned in his remarks, we're going to be focusing on creating new products or new capacities that in the future should help us to increase this fee line.

But for this year, we expect it to be more normal and close to the growth of clients. In terms of tax, well, your question is about the 2 nonrecurrent events. Number one, yes, the tax rate for next year should move around 30%. The effect of this last quarter and this year was totally related to the ConCredito deferred tax cancellation that we did.

And regarding the new methodology for calculating reserves for potential fiscal contingencies, obviously, the most relevant is the litigation that we are going through right now for [ 2016 ] fiscal year. And things are going very good. Unfortunately, we do not have yet a sentence. We expect it to have it hopefully in the first half of the year. And as soon as we have any new information, we will let you know.

But obviously, that reserve is calculated based on that and also a statistical probability of potential annual reviews. So we don't expect it to grow unless there are new events or different changes in probability. And obviously, it could also reduce if we see positive outcomes.

No, very helpful. Just a follow-up in the use of artificial intelligence. What should we expect on that? Is it on loan origination collection, originating new revenues? Just a little bit color on what you're expecting with the use of artificial intelligence.

Sure, Ernesto. Yes, and it's a very important question too because I think that artificial intelligence is going to -- is actually changing the way we operate, we do business and mostly we -- how we relate with our customers. So I can tell you that we have been working since the second half of last year in a plan to really understand what Gentera wants to do with artificial intelligence. What do we want from the artificial intelligence to do for us and really create value. And this is something that we have to evaluate very carefully in the first place, even before starting doing anything.

So we went through that process in the second half of -- or let's say, the fourth quarter of last year. We are aware and we are very conscious that we have to first understand how this value is going to be created, how are we going to use artificial intelligence. We have to learn about those technologies. I think that we still don't know many things about this technology. We have to start small. We have to learn small, and we have to be very cautious to start upscaling this. At this point, I can tell you that we have a clear idea that we want to have -- or we defined a small set of initiatives.

Most of them have to do with the back-office processes. And that's the way we are going to start. We are going to learn. And after we do and we deploy this, let's say, 3 to 5 back-office initiatives, we can start thinking about deploying another initiatives that has -- that will enable us to give our customers a much better experience. So that's how we are looking at this and we believe we will capture a lot of value in the future, but this is also a long run shot.

Our next question comes from Brian Flores of Citi.

I have 2 questions. The first one is on your funding costs, right? Because we are perhaps entering the second year of what I would say, very good conditions for your funding cost. And naturally, this will be the time where it would be better and perhaps less costly to see what you could do on your funding costs, right, and your funding base because, as you know, you always raise via -- well, some deposits via notes. And naturally, this leaves you exposed to some volatility on the funding cost.

So I just wanted to understand if there's any strategic initiative to change this to maybe lower the sensitivity now that we could have maybe a stable '26, '27, depending on who you read, right? But just thinking -- just wanted to check if you're thinking about this, if M&A could be also a possibility to enhance your funding base? And then I can ask my second question.

Thank you very much, Brian. Yes. Well, as you -- as we have discussed in the past, we have taken advantage of these last couple of years of reducing interest rates. And today, at the end of '25, our cost of funds for Mexico is 7.9%, where the reference rate is 7%. And in Peru, we have a cost of funds of 4.9%, where the reference rate is 4.25%. We have been moving or relying on variable rate funding for the last year, and that is what has allowed us to take advantage of this reduction in rates. We think that now we are at probably the bottom or very close to the bottom of tax rate reductions. And now we are going to be changing a little bit more to have more fixed rate funding.

We just did an issuance this year, which we came back to the long-term fixed rate bonds in Mexico for mostly the long-term investors at [ Fox ], and we will be managing our funding decisions following the idea that fixed rates will be more normal. And second, regarding M&A, as we have always said, with the capital that we accumulate, we have a very clear guide on how we use it.

The number one is for organic growth. Second, it's to support new initiatives and new investments such as the one that Enrique has announced. Third, we know very well what we need to build in the future. If we see an opportunity for M&A, we could do it. But there aren't many, many real options that are very clear and aligned to our strategy. So it's a possibility, but we don't see it in the proximity. And the last is to share part of the value with our shareholders, just as we just did proposing our shareholders' meeting to increase the dividend payout to 45%.

No, super clear, Mario. And maybe just my second question on the asset side. I think Enrique mentioned a very interesting comment, right, in 3 to 5 years, we should see a higher contribution from individual lending. And I think the fintech space is maybe full with offers to individuals. So I just wanted to see on the strategic side, how do you think you can compete and defend? And what is perhaps the strategic advantage that Gentera has now that is maybe -- I wouldn't say doubling down, but just moving to maybe a higher contribution from this segment.

Yes, sure, Brian. And yes, let me start by saying that we really believe on a hybrid model, meaning we will have the same closeness with our customers, this human touch that we have always had, but we have to take advantage of all the technology that is out there. So when I talk about hybrid model, what I mean is we are going to be a kind of fintech that has this strong part on the human side and the human touch with customers.

So that's the way we are addressing the fintech initiatives that we have in Gentera. So -- and yes, the main challenge, not only for the fintechs, but also for any traditional lender in this segment, and I could say in any segment is not that much the origination part, but it is mainly on the collection part. And we believe that as technology advances, the use of data advances, maybe we will find ways to have a better origination process, and that's happening. We are looking at that since many years ago, but not that much in the collection part.

So we believe that what we are going to keep on doing is using technology to enable and to improve and to enhance our processes, the customer experience, the efficiency of our internal ways of managing risk and at the same time, having this human touch with more precise information. I believe this is something that has been out there for a while, this dynamic, I mean.

And I think that we are all learning from each other, and we will keep on learning from each other. So I don't know if that answers the question, but that's the way we see the future, more a hybrid model and taking advantage of any technology we can see out there. And obviously, artificial intelligence is going to also move a lot this landscape.

I would just add that our individual product is mostly linked to micro track records and linked, it's a working capital product. It's not like a personal loan. So that's where we will grow more. And as Enrique said, we will also expand to consumer loans, but this important growth will come mostly from working capital.

Our next question comes from [ Lisa Sherma ] of Goldman Sachs.

Just wondering, first off, if you could provide some color on the drop of other operating income/expenses this quarter? And then maybe how we should see the line progressing in the future? And then my second question is kind of just bigger picture. Should we expect this kind of 24%, 25% ROE is the sustainable level going forward? And then kind of any excess return after that going towards customers, increased dividends and that increased contribution you did to your foundation? And kind of is 2026 the picture of what we should have as a run rate going forward?

Yes. Well, other operating income is mostly driven by ConCredito's participation of Credienda. And it should also be a product that will be growing in the next years. It has been very successful, and we think that we can keep growing there. And regarding the ROE that we're giving, yes, well, we feel comfortable that for 2026, we can deliver an ROE with 24% to 26%, as I mentioned before. And even after doing these 3 initiatives that we talked about sharing value with our main constituencies. So I think that for now, we think that 24%, 25% ROE should be the amount we should be focusing for the next 3 years.

Our next question comes from [ Maripaspodegas ] of GBM.

Congratulations on your outstanding results. I have a question regarding Peru. We saw a turnaround during the year, and congratulations on that. But as I remember on previous calls, you mentioned that you expected an ROE around 15% for this subsidiary. However, as the year progressed, the ROE exceeded 20%. So looking ahead, how do you see this metric evolving? Should we expect it to normalize closer to your original guidance or at the current levels that we have been seeing?

Yes. Thank you, [indiscernible]. Yes. Well, yes, as you have said it very clearly, Peru surpassed our plan and our expectation. We had a great year. The behavior of asset quality was excellent since the beginning of the year. That was the main driver that brought the net income growth faster than expected. Remember that we have always said that we want all of our subsidiaries to have a stable ROE above 20%. So we reached that level in Peru before than expected, which is great. And for this year, we will keep the same objective to have our 3 subsidiaries, credit subsidiaries above those levels. And that's why the ROE expected for the year is between 24% and 25%, as mentioned before.

Our next question comes from [ Daniel Miranda ] of Santander.

Just a very quick follow-up on cost of risk. I know that 13% is a stable level we should think about, but that 13% stands with the current portfolio mix, right? I mean we saw a much higher level in the fourth quarter. And given your expectation for individual to continue leading, how can you reach 13% in 2026? Can we have more color on the provisioning mix between individual and group lending?

Yes. Well, yes, as Enrique said, we will be expecting to have more individual credit risk share. But also what is important and what we are still going -- we're going to be seeing more in the next couple of years is the impact of the modernization of our servicing through what we call our digital, our digital management of individual lending. And that improves a lot the processes of our loan officer, giving him much more time to focus on new clients, but very important on helping clients that have problems with their credits to be treated on time. So that's why we think that we can stabilize and maintain the levels of NPLs and cost of risk for both products. And a lot will come from the use of these new tools that we have.

And regarding the cost of risk in [ Grupa ] and individual, in [ Grupal ], a normal level should be moving around 1 -- I mean, 10% to 11% and individual should be moving around 15% to 16% of the cost of risk.

Our next question comes from Yuri Fernandes of JPMorgan.

I have a follow-up regarding your guidance for the year, the 13% to 16% EPS growth. And you're coming from a very high tax rate during the quarter and for the year, right? I think the effective for the year was 33%, some onetime events and usually, the tax rate should be below 30%. So my question is regarding EBT, right? With this guidance, the implied EBT, assuming that the tax rate goes to 30%, normalizes back is a 7% to 10% EBT growth in 2026.

So just checking if that's the real case, what is driving this deceleration on earnings before taxes for Gentera? And my second question is regarding OpEx. If you can provide a little bit more color. I think this was part of the investments, and there were already questions about technology. So just trying to understand how much should OpEx grow in 2026?

Okay. Let me start with the second. As we said, the OpEx line should cost to grow between 12% and 15%. And regarding the tax rate that we should assume for next year is 30%, as you said. And basically, that is what gives us the 13% to 16% growth in EPS.

And regarding OpEx, Yuri, the 12% to 13% growth should take us the efficiency ratio to a level around 65%, which is similar to the one that we have in 2025.

I get it. But again, the EBT, the earnings before taxes, the implied on the earnings, it's a material deceleration. And I don't get why because OpEx, 14%, 15% is a deceleration, right? This year, I think it was 19% the growth of OpEx. Loans are healthy, right, the guidance for loan growth. So what is the miss here is fees? Is the other operating income? Just trying to understand because maybe your guidance is conservative and your EBT will grow more than 7% to 10%. But the implied earnings before taxes with lower taxes, it's a slowdown. So I'm having a hard time reconciliating this.

Well, the earnings before taxes that we're planning for the year will be around 13%. If you want, we can review those numbers with you in a second call. But what we're seeing for the year is operating results growing around 13% with a tax rate of 30%...

Okay. We can discuss offline because if your tax improve, your tax rate improves, your [ EBITDA ] should grow less, right, on the implied EPS guidance, basically.

[Operator Instructions] Our next question comes from Juan Dominguez of Onyx Capital Group.

Both Enrique and Mario, thanks a lot for the time and congratulations again on the results, very impressive track record in the last 5 years. I just have a broader -- kind of a broader question. I mean, what are you guys seeing in the field regarding change in client behavior, demands that your clients were not asking you, I don't know, 3 to 4 years ago, and now they are kind of asking you. Any sort of color on what your clients are doing differently will be very useful. I don't know, are your clients accepting different payment methods beyond cash? I trying to understand the evolution of the, I would say, the financial sophistication of the client.

Yes, very interesting question. And if you remember in my opening remarks, I talked about the 5 basic needs of customers. And I believe that the working capital loans, consumer loans, saving products and even insurance are not changing that much. Maybe insurance, they are. I believe that one of the first changes that we have seen in the past is a broader offer of insurance products. And I think that the consciousness and the value that the client gives to this product is increasing. And that's why we are -- we have been growing a lot on that line in the business.

So insurance can be one. But the fifth need that I was talking about in the opening remarks is the payment services and the way they access to these products. And yes, I think that the most important change that we have seen and we will continue looking at is the way they access to their products and the way they transact -- we would like to see a more dramatic change from cash to digital money. But to tell you the truth, this is very slow, has been very slow. It has to do with a lot of things. It has to do with infrastructure. It has to do with maybe taxation. But we are pushing our clients to go there. They are actually willing to go there and increase their payments.

Now we have more than 1 million customers using our mobile banking. And the other incentive they have is that they feel more safe using digital money than using cash for obvious reasons, having cash in the street is not safe. So those motivations are moving the needle to a more digital world, not as fast as we would like to, but they are. And in Peru, we have a lot of progress there. In Peru, I think the context is different. I think that the government has made a lot of things very well done to incentive the use of digital money.

Many of the transactions in the streets in Peru are already digital. We have our digital wallet be there that is directly connected with our credit and saving products and with our mobile banking platform. So I think that in Mexico, we would like to see in a more fast or in a faster way, the dynamic that we have been looking in Peru. Are we still connected there? Do you hear us?

It appears that he is not here. He disconnected. Our next question comes from Carlos Gomez-Lopez of HSBC.

Like everybody else, congratulations on an excellent result. Three very brief questions. The first one, a follow-up on Maripatha in Peru. The profitability is certainly much, much higher than you expected. What about the size of the market? I mean you're still growing only 10%. You are not dominant in Peru the way you are in Mexico. How much bigger can that business become for you relative to where it is today?

The second one is how much more potential do you see in insurance? I mean that has given you a lot of fee income that this company did not have 15 or 20 years ago. Can you go into new things I'm thinking about funeral policies or health care. Do you see that as a big avenue of growth? Or do you think that the product set that you have is what corresponds to your business?

And the third question is following up on Yuri. Is your conservativeness in your guidance more a reflection of these initiatives in which you are sharing value to customers or to employees, and therefore, that will perhaps cap the earnings growth that we might see in the coming years.

Thank you, Carlos. Yes, actually, I believe that both in Mexico and in Peru, we have a lot of modernectual steel. In Mexico, we know we have around 130 million people. And in the segment that we serve with the people with more than 18 years old, there are 50 million people population. From those 50 million -- and I'm talking Mexico, now I'm going to talk about Peru. But in Mexico, from those 50 million, 36% have a formal credit and the rest of them don't have a formal credit. So that's why we believe there's a lot of opportunity to keep on serving.

How many people from there are going to take credit? It depends on their activity, but the market potential is there. And those numbers in Peru are -- we have a total population of 34 million people. People in our segment and 18 years and older is 14 million people. From those 14 million people, 54% have a formal or an institutional credit, let's say, and the rest of them close to half of them don't have this formal credit offer. And what we have to take in account there in Peru is that the rural areas are very big.

There -- we have a very, let's say, large number of people not living in these big cities. It's more challenging to get them, yes. But anyway, we believe that even if Peru is a more mature market in the individual lending, the group lending has a very, very large potential. And both in individual and group lending in the rural areas, we have a large opportunity too.

And regarding insurance, we have talked a lot about this. If Mexico and Peru -- and the base of the pyramid in many countries is underbanked, underinsured is even worse. And I think that we have been very successful bringing micro insurance to the communities that we serve. And we think that still there's a lot to do. As you remember, we started with one product some years ago. Now we have 4 products, and now we're doing cross-selling.

So we plan to keep expanding in the next years and insurance is still a product that has a lot of potential to grow in both countries. And regarding the guidance and what we have talked, yes, obviously, this share of value is what somehow we want to do -- to share part of the profitability that we generate with the different constituencies. And that is why we are showing this guidance of 13% to 16% because these initiatives are being considered in the plan.

Our next question comes from [ Aldrin Castro ] of Ashmore Group.

I have a couple of questions. First, regarding the sharing profitability mindset that you guys have, how did you came up with the increased contributions to the foundation from 2% to 3%? How did you came up -- what was the framework that you used to come up with that result? Could we further expect this increasing from 3% to 4% going forward? Or is it a onetime that we should only expect? And secondly, if there is any update in terms of attracting competition in your different markets? Do you start to see some competitors now emerging or getting ready for the following year?

Yes. First of all, we have to say that it is not that common that organizations through their foundation commit -- and this is a commitment that we made from our Board to give this 2% that we have traditionally had of the profits to the foundation. As you know, foundation -- our foundation has a lot of projects. Many of them, we made them with our own staff. Many of them, we make it through the organizations that we partnered with. And at the end, I can tell you that in 2025, we benefit over, let's say, almost 400,000 people through all this project.

So having this 2% outstanding and maybe it's an outlier in the industry. And yes, what we have been talking with our Board and internally with our management and the people of our foundation is that we have the opportunity to increase the number of projects to increase the impact, the social impact that we have to -- we want to make through our foundation. The 2% to 3% is based on those potential projects that we see. We have always been motivated to support projects that have to do with education and with health basically, financial education, many of them.

And we see opportunity to keep on supporting different projects all across the country here in Mexico and in Peru. So that's the logic behind the 2% to 3% -- what we also said is that we can give the foundation up to 3%, not necessarily the 3%, but we now could give 3% if we see that we find the specific projects to support. And we don't see in the short term that this 3% could be increased to 4%. But if in the future, this comes, I'm sure that it will be because we see the value that this could add to the project that we have, but not at this point. I can tell you that 3% will be more than enough for the following years.

And regarding competition, well, yes, obviously, we're seeing many, many participants that are trying to get into the segment, mostly through payments and collections and fintechs and Enrique has talked a lot about competition in the past. But yet, we have not seen a real new player in the credit side. Obviously, our performance and the size of the market and the need should bring more competition, and we welcome that because it's very important for financial.

Thank you. There are no further questions at this time. I would like to hand the floor back over to management for closing comments.

Thank you. Well, just to comment, I believe that under the present context, not only in Mexico and Peru, but globally, maybe the name of the game is how to navigate uncertainty and how to navigate and avoid risk on this uncertain context. So we believe that we have a strong and stable operation and results in Gentera and their subsidiaries.

We also believe that we have a very strong team at every line and department of the company, including our Board members and investors. And we can expect that under this uncertain context, we will have a strong footprint to continue advancing and growing and accomplishing our purpose, which is keep on being there for our customers and their dreams. So thank you for connecting with us today. Thank you for your time, and we hope we will see you soon in the next quarter. Thank you.

With this, concludes the conference of today. You may now disconnect.