Intercorp Financial Services (IFS) 10 Aug 232023 Q2 Earnings call transcript

Good morning and welcome to Intercorp Financial Services' Second Quarter 2023 Conference Call. [Operator Instructions]. Please be advised that today's conference is being recorded.

It is now my pleasure to turn the call over to Natalia Nirenberg of InspIR Group.

You may begin.

discuss quarter will earnings. Services Financial its XXXX second Intercorp

Chief us to Felipe and Financial Financial We Interseguro, Financial Mr. Casassa, Officer, Executive pleased President Chief and Basadre, with Mr. Services, Officer Mr. Gonzalo Services. Services, Michela Bruno Intercorp are very Vice Officer, Officer, Intercorp Mr. have Carlos Luis Payments Chief Executive Intercorp at Executive Castellanos, Ms. Executive Ferreccio, Financial Inteligo, Chief Tori,

yesterday. were will during also There discussing company results by They to this discussion is that webcast the distributed presentation be video a the the accompany call.

any receive of copy. today, they a company's Group InspIR If a you York please earnings on ifs.com.pe the website presentation Otherwise, report, for didn't XXX-XXX-XXXX. call now the assistance available New copy need in the any download or at reason to are you if

I for to do made the Please for is economic may forward-looking industry that investors questions circumstances, not future today's will statements future and be not would call from remind company's call. These therefore financial taken. this conference results. the or be that media only like performance account you advised during conditions analysts be

results the factors statements on materially such based causing several to current from actual assumptions will As differ expectations. are change on made that

For presentation refer please and note a earnings complete on to the yesterday. the forward-looking statements, report issued

opening Services his to Felipe Castellanos, Luis for call Mr. Chief go Mr. my of now over It's Officer Intercorp to turn Financial the pleasure Castellanos, Executive ahead. remarks. please

our you second XXXX morning, you. earnings Good our today. call. thank Thank attending very for everyone, all quarter and to welcome much Okay, call

assessing the always, as situation macro start by in will Peru. I

on indicators to some second in improvement year. of challenging the mild for operate environment. But half we a of the the expect key continue a We

the the for between unrest you inclement have of year. in X% and know, the toll a in And growth. range. now taken weather XXXX. and down social wrong expectations off with numbers GDP first the X% Peru, half to with This the has year negative a growth had As early on foot GDP got country full trimmed

point year inflation meantime, helped currency, them that and uncertain. probably at recovered again. El Interest Nuevo its some year, hopefully second pressure start for began value. of that in Peru rates has towards on to Bank phenomenon the or half have In the impact and in some is XXXX prices. peaked the has of target. lowering And potential will Central Central alleviate early still the moderated in The Nino the we later its The Sol Bank the expect journey have of

as heard, So you a environment. it's know -- you've as challenging

year when a impacted in growth of inflation, results only market below register with efficiency XX% last in compared to business wealth quarter and growth our expanding of to the has earnings through across this fostered key it a quarter, terms X% year-over-year the investment lines. increase in and led customers grow IFS of our conditions has XX% Moving number business of in But quarter. This revenue management level sound shares market continues XX% business. same expenses IFS to

in At growth NIM we the despite same expanded Interbank, has gross the to moderation banking have lines revenue X.X%. at further activity.

mentioned. economic social and digesting increase of the are dislocations of inflation banking consumer However, we effect retail growth, in the the continue the impact especially Peruvian in provisions as and slower weather to previously high

growth half of expect our continue. year the in to consumer second book of the We moderation

total which business, the in have the returns the we remains to annuity importantly market contribution a see retail Interseguro, while The premiums and well-hedged higher fixed At good life last with growth increased segments leader and as to [cheering] portfolio. income such predominantly in year. individual company investment insurance

to AUM to managed normalize. investment starts resilience shows results terms and grow as dollar in has Inteligo

which larger and streams represents increased Izipay, customer Finally, new engagement, profitable that ecosystem better our started for income. to we us operation income through continue to a float, has provide business strengthen and growing fees with payments to interest our net

Going put on have profitability and cost and ROE detail backdrop adjusted profile temporarily back our guidance pressure I mentioned, at accordingly, Michela IFS, first will has risk risk the to on. macro for further as explain of in and we what

our the we the move of we credit midterm topic, loan we're XX% will sustainable ROE. around confidently, to On provide on be next outlook, that strong And on first the cycle, once loss coverage. allowances towards track profitability confident achieve target

about in growth, and outlook are key about IFS our to strategic and forward on such, As priorities, optimistic businesses. we focus key remain digital build which Peru going and continue

for me pass in let the Now figures our further it Michela of on explanation to quarter.

I Good Thank starting will Today, earnings to to X welcome, review our presentation, on and Slides Felipe. our of morning, an X again. with results everyone, X. introduction sections you,

XXXX. negative rates, the is X%. Slide the by X% shown macro of growth new On considered to month last of challenge sole's registered the first as is represents the mentioned. X, in the be improving, the trend together the and below last new expectation Felipe a GDP Still, a of for semester rate, time exchange relatively a evidenced in Bank quarter outlook the target stabilization the inflation with long worst decrease as in economic stable year-end in by the the quarter as estimate The Central of of reaching and the slightly for inflation

financial the quarter the with to X.X% at has Slide slide. in and X.X% of risk increase, cost growth quarter XX% results. quarter There in the this than quarter, weaker continues messages increase pushing banking risk of a pace, continues stronger There moderation XX% but year-over-year further On to top-line investment risk loans. consumer performance of NIM and and key commercial XX% finance been from less a X, continues been of ROE has Good the to risk growth cost consumer a Interbank. IFS year-over-year coming a bank with in this in reaching by impacted first of with to lower lending, this from X in to soft in cost at growth at cost X%. moderation high loan post

consistent a climate in many portfolio this of economy is high and high sustained GDP the seen and of the disruptions negative growth and year result of social the semester of the as consumer and in The first other countries quarter. Peruvian inflation the in risk first

We have seen consumer last behavior during a the coverage healthy. payment quarter. remains deterioration in ratios the Nonetheless,

to as We continue bank, cost-income improvement at monitoring to costs, level ratio see which are and versus in IFS of the quarter, due strictly good strong operating leverage. year, last has managing at reached bank good the especially XX% efficiency both at a levels the and we the a mainly

quarter of cost are Interbank at XX.X% soft this ROE been has and incredible. IFS by impacted of risk results investment

XX Finally, to equity basis we capital Tier ratio XX.X% ratio points X core in reaching total with quarter, the at XX.X%. capital some register up and continue levels

priorities, On key of XX% XX% million digital. NPS growth, growing Slide X, on Interbank reaching retail being Digital, are: clients year-over-year earnings at our clients we strategic X.X banking and our with which XX% retail continue first, digital X of to build and a

Third, at shares XX% focus market in key XX.X%, on business our at businesses with annuities acquiring finance in XX%. growing at consumer

IFS and XX% X, in XX% first customer base the XX, -- Page merchants. growing at or insurance, in let's sustainable Slide payment XX% about year-over-year XX% customer our base Now, On banking, and continuous earnings. to wealth on growth management in of talk X on in

reported XX% as are mainly results and Q investment recovery X% due grow X, quarterly of The double year-over-year IFS' million in the XX% on or in despite strong continues EBITDA quarterly earnings and ROE and nicely, performed at basis Slide second has management in grow, PEN results to up earnings in most with coming digits. decrease wealth of to Interseguro. On Payments a from and KPIs the yearly are XXX an increases a XX.X%. adjusted earnings

of from On growth revenues year-over-year, X ago territory XX%; due continued Slide total is or payments top-line news X%. Good grow in digit double registered wealth management recovering of year to the X. negative mainly and to as XX% banking

source revenues which banking, year-over-year represents incremental and of On Slide which almost positive XX%. XX% IFS's a is fees income, growing our X, of another diversified payments, XX% and constitutes represents which in fee

growing levels operating sound of bank, the at ratio with banking very This year-over-year. bank year-over-year was has in and for the efficiency ratios good, quarter, XX, basis which being only and of XX.X% X%. very helped quarter growing the XX% costs IFS revenues Slide leverage the to On points with mainly the strong both the to at improve efficiency in XX.X% thanks XXX

for to includes IzipayYa. our management this On customer planning, would we solutions [Izi] which part digital, building financing, start [merchants] through and that highlighting of wealth are reinforcing journey, savings, I acquiring digital insurance, XXX% and from and financial by banking, day-to-day like presentation the

believe we nice in indicators show digital On there which compared to and to way the positive in a to Slide year. XX moving our previous Still, indicators, XX, trends when is these further. go news continue

XXXX, last And points in customers XX% XX next June reached quarters. digital customers previous continue, reached top expect the improved XX%. digital customers a for our has the to who digital days, stable points past from X XX XX% self-service retail relatively in the last X% during sharply NPS XX%, up reaching interact year. versus As indicator to from NPS sales become this years, year. quarter, the Digital up of bank of with

individuals new opened see of We both businesses. continue being to an and accounts for number important digital

digital were transactions opened indicators wealth June, developments show the digital and and of XX%. businesses well for reaching of with management but XX% As positive digital digital X.X%, premiums fund still reaching small, self-service, new end as accounts XX% of digital. management Insurance reaching

with we of in shares, XX.X% continued of deposits on Now let's in in to consumer move XXXX, as XX. loans Starting XX.X% focused June in X.X% and retail increasing loans. to our and XX.X% commercial the four loans, in segments with Slide line key market strategy, our retail reaching performance XX banking

However, riskiness has loans had standards which an further businesses, of portfolio, credit have in we our increased new disbursements. and the line the in impact underwriting tightened already on small with consumer

growing across increase lines XX% XX%, in all in fees other by and yield from with Slide banking sustained net mainly increased increased mainly increased from in the with XX, mainly credit volume explained trading. on coming year-over-year quarter FX growth income in revenue On in loans. X%, income growth cards line debit interest and top income second XX%, from Fee came coming

reaching XXX and points XX.X% mix year, market loans as funding costs. points XX year-over-year. on efforts deposits XX Slide rates in and soles and the to increase basis rising points in in of in to both consumer points XX, been interest-earning to in Cost news quarter Risk-adjusted remuneration by pushed basis on yield a of offset to a level points the XX quarter, institutional migration continuous in funds two rising repricing assets commercial and due offset NIM in upwards the year, the loans. basis of and the soles Cost dollars On to rates of risk higher XX deposits, mainly basis the [mean] and points cost in by up as in has continuous more continue the expensive been reaching continued increase the quarter reasons: has partially be as basis stabilized X.X%. XXX funds basis reached yields high in yields quarter has retail basis in term of in increase. and quarterly deposits dollars as have X% and and Good been

in soles, During funds. a first turning the rate the of point first in of see constitutes started we overnight the which July, correction to have month deposit of cost

retail share ratio in industry's average Deposits to has XXX%. to continued market increase. the than total loan-to-deposit deposits continues of its and to be continued XXX% of funding better increase Our share

This On focused in of of employees public which to favorable cost portfolio, reached relatively seen mainly mainly have better. and the performed risk personal risk from [loans] is a a the up to loans to due on sector XX, has increase we cost X.X%, retail mortgages credit X%. and cards the Slide pickup of have impact as

of portfolio high first in of and the year mentioned, the Peruvian the growth consistent consumer semester social the result climate in previously and quarter. the economy in this a countries, many other and in sustained As first high is of the seen risk the disruptions inflation also country as the GDP of negative

component quarter, we in customers retail large for programs first high cost the line the disruption due social impacts unilateral quarter. with credit and El Nino guidelines granted already at of phenomenon. banking the process solutions a and the to impacting NPL in to bank the XXX% [indiscernible] rescheduling climate risk pre-COVID. higher in and Those be the coverage -- the at During which XXX%, of much level continues some are this card social of [superintendency] than ratio at had bank XXX%, at [EMR] maturing

insurance has has there XX% been our Slide at On decrease on insurance market which a insurance continued to to to for constitutes both and insurance, share business year-over-year moving XX% levels in of lines our to pre-COVID market contribution recovered or and business to due for normalization life their and life grow retail high individual lines, XX, profitability increasing total a X% is business, premiums. nicely annuities retail the and

quarterly The of June. income, the high XX, composed and insurance portfolio the below as at funds mutual the X.X%. the Slide return and On estate X.X%, fixed end investment extraordinary equity of XX% X% second X% quarter is came real portfolio of on of

in On management. not Slide Returns positive of terms fully XX, under recovered up remain yet. territory wealth and management is asset X% in are

of XXXX, our of want and inventory the merchants. April we service integrated billing ecosystem, On developments Slide have a we value-added first in strengthening. acquisition the XX% launched Arisale, management remaining an After continued for in which of payment solution the you we XX, the Izipay to give for summary

quarter reaching as second of paying of adoption our than The monthly X,XXX already more July, the of seen nice end has fees. solution, merchants

on Transactional within Moreover, in or the and and availability transactions same-day XX% X% Tunki coming during represents XX% May reaching increased with our merchants merchants e-commerce continues to reaching Izipay of million XX% in a increase merchants well XX of share continued of as continues. this as operation. cash. competition. transactional year-over-year, increase volumes end micro X.X PEN grew volumes June. supported some Izipay And reaching volumes IzipayYa, plus gaining transactional from million. nicely, X% pressure a targeting solution increased to Izipay to QR merchants launch year-over-year. interoperable MDRs with are Revenues year-over-year, by the the the and combine EBITDA growing in year-over-year, in grow codes moreover, Growth profitable quarter. year, volumes

growth towards by working We have work all of our a ecosystem having strategy. accelerate common the to payment our assets been

use increasing distribution loans source products a low-risk a to We offering merchants as are focusing Izipay on float. transactional merchants additional Interbank network increase for to well and volumes, pilot services, continue as to as

are well volumes flows, as of coming increased Interbank as which in year-over-year float micro in grown As coming from Xx year-over-year, Slide IzipayYa. merchants, sources shown starting which XX, thanks we transactional from from have and have provide to XX% increased from revenue new to Izipay greater

of its to June, system. participation increase of twice And the well of Plin of the pace almost in at increased transactions XX% for from On financial new the landscape Number in country. with X continue to Slide of Plin as high and of started merchants be interoperable the XX, reducing quarter a with registered financial continues XX% Interbank country, has the more should the an users has volume to help year accelerated for June. been use the year-over-year XX Interbank ago. April. [progress] for Plin of Number has growth, April same at Plin reaching million has XX%. into in bring Central This by encouraged Yape has continued to which system, reached Interbank inclusion volume as and interoperability important PXP cash, in participation transactions Bank XX%. end strong the development the been which the which of have at

On risk. and revised an XX, me second our ROE quarter cost update operating for Slide results let for a guidance you and of on the give

though X.X% above moderation NIM our risk Interbank XX.X% our XX% and further semester coming Thus, end guidance, the months. guidance. of growth loan X the first core of above of the for the our downwards to first are of semester, of in we in cost has we quarter, of expect ROE. X.X% ratio total ratio consumer First, ROE the Cost XX.X% the capital XX% higher in above as in lending first was in XX.X% X.X% confirmed guidance. of guidance of in investment around line XX.X% guidance. is and was for growth in with in trend the total revising results. the equity end the and are risk semester banking Tier June

portfolio. Following of challenging be on quarters depending consumer might continue the behavior the to

upward for for Interbank, for guidance. X.X% yearly to of Efficiency continue our and cost at We and good XX.X%, to the first semester are guidance levels to X.X% IFS respectively, within and risk. be revising XX.X% the

have upon strengthen On to we sustainability Slide XX, continued our strategy our focus areas.

the on a front sustainability. development on co-hosted include latest environmental risk event Our Peru with climate

In addition, our XXXX target aiming PEN been more business. sustainable to XXX for has sustainable financing build set for to million,

launch as recognized Ranking attraction as and as Aequales committed as Talento our that are front, Interbank Aprendemas On a and platform, solutions by certified company the the to was diverse. been has services IzipayYa financial are equality inclusion. talent Merco #X well with the social contributing for financial in of retention Moreover, education and

our the Group aligned and Principles Inteligo Interseguro its on responsible policy Finally, GRI in investment with line released Investment. sustainability the front, approved governance the companies framework first Responsible report to for

let XX, me the Slide takeaways. with key On presentation finalize some

have factors. of aggravated we seen first challenging social scenario by First, unrest XXXX macro climate the with and a a half

we year-over-year base, focus. and key have customer of expansions market areas a revenue our Second, growing XX% increase in share

to coverage continue Sixth, Third, on operation. and at XX.X% expansion XX.X% earnings on up growing loans. we income yield XX% back Izipay to America. and our of in continues a strengthen scenario, retail represents due ecosystem risk year-over-year quarter. X% macro Latin cost in NIM benchmarks the in IFS have X.X% we at profitable levels, further at sound wealth banking are IFS insurance are banking. payment the management, Retail banking to cost second to efficiency ratio Seven, results of driving and normalizing investment and Five, increased of strong on increase

risk year. of ROE cost revising are for guidance we for and Finally, our this

credit ROE our midterm current remains around after sustainable XX% target. However, the cycle,

much. very you Thank

you welcome questions any have. we might Now

[Operator Instructions]. you. Thank

America. with Gabilondo from The first audio comes question of Bank Ernesto

the provide looking outlook. you like what El don't on My an I end, I on year. understand between whether Can will don't low know could to floods the tend be question impact be if on And also early moderate. to to you been Peru be in could expectation. what first next if know the the institutions at could update be us it to Nino. have Peru's materialize

with ago. at seen president I double that new couple early we are believe, place And of some the for material end, remove the But weeks the a a didn't then go country to of to impact. demonstrations wanted hearing to in have you possibility check So They demonstrations. and the wanted that took elections. you. have

Nino any outlook be appreciated. again, So color on El potential the and will

my Then on guidance. on ROE second question is your

lowering expectations do you So and it what could drivers are a for would XX%. understand to at year, it you it could when behind you are Or you reach And ratio? be I the your year? that? be like of probably normalization it are But coverage expect cost to this risk what think Do maintaining XX%. medium-term next achievable and more Would on be it? normalized a the the to

very Okay much your questions. Ernesto, for thanks

Let's following see, it it's Unfortunately, not closely. are obviously, we here very yet. on El Nino,

probability low El moderate a going every But being high. Nino new information. are to to that -- meeting, been say being a not It's again, the reading, XX% say, the XX-XX think there's week, of strong been probabilities follow people we've probably we've Nino. You or these the extreme El of based would on get that would what would I tanks we agencies phenomenon it be chance and

U.S. probably them more and we see agencies, other, something there's agency in say, collide next see from less we they week, Australian and some, Some probabilities, the with of the get likelihood. each the let's

So it's unclear. pretty

the and in that is country fact are expected. than temperatures, in higher region the The well,

usually as prepare France, to while are [indiscernible] reasons but just moderating happens, it That's floods a risk will of which preparing the more growth, higher but into where some mentioned, you is #X that It's also moderating year, which of affected if of we're going but happen to that are not later, for because probably, early Michela rains heavy are of unlikely year, the some something. Nino. usual it. one regional they not get why probably are we segments, next by growth the January If in late elaborate scenario. that's -- something the to it's discarded, we So starting have and by terms [indiscernible] will to El work segments, likely in is end or growth, happen another our we come in the February,

of similar there everybody you lots mean, the to there's get year we've like -- The -- seen. government is very the following doing. government the not in of sure infrastructure is things make But phenomenon we to news, again, So funds update we're certain that have order as are we to complete lots just yet, of information. reinforce putting the that, bad once not not prepared I is new play what to probably as as again,

has In and XX,XXX has things happened saw the terms announcement not of about actually year, to report we the of July, down in to turmoil of going unrest think political of Those people some the trying XXth beginning that come demonstrations. very end, the those the that was been I There at people that social do XX,XXX significantly. July. specifically through were At the successful. continued

pick think an expect up. come not to it I these significantly. not things I them has has level personally, -- So that the impact. We of do down had

our is around again, again going that's that comes so something news-dependent. government something very However, could happen. If people to push it's But the far. makes low be probability some that scenario

front we think of So the to that us. under water news the continue case. bridge I And that's in right will with have now that hopefully, the be

and There's cost market the with we of What have clarity. in ROE, year. cost things, back briefly. the seeing has Again, to moving next for two the of we things then risk detail numbers around. of mentioned. Michela haven't terms to just do in in we in will you Obviously, we're front, more worked lots when And come increased as of risk

that's also high fact, a that's a impacting months, economy, the fact. slower for First, inflation so consumer many

of social had semester will because And these phenomenon impact repeat. and the probably so of the the unrest we [indiscernible] that dislocations the not there, Yaku first in change

Let's Nino. with El see what happens

what already we an kind that's So economy. of see external factor that affected slow-growing what our

going to going sorry, but some at growth or starting quarter year, X%, point of not probably it's hopefully hopefully year, And some next going -- X% the next this not up be basic should for and of -- that the hopefully, is come around will negative negatively. So also should continue same. mediocre to negative, year but growth next picking relief. [start] it's to start be not moderate down, put to growth, Inflation

-- I to next So conditions year, that project don't turn to again, want but there are should many positive. macro the

year, a It those pass because quarter the water from should but this I'm and let's in last they partially the of only we should quarter, Let's stage of certainly, our cost they to we're very the we growth very, soon happened explained the the quarter, factor and of the not be [indiscernible] the by achievable portion. mentioned. hopefully, due coming and quarter first to that not say, this first that investments higher the important first of that are, as lower the for negative slow but the very quarter risk efficiency for doing, dislocations headwinds Q. we we're the It running, our in were growth not has it's also the the has project, businesses, inflation where Again, an under terms captured confident events are positive of XX% That the captured midterm, that should given see bridge how go, in nature operations. significant that have is our trying very closed mentioned, impacts that inflation.

probably not the as quarter hopefully, first but as next levels, normalization obviously something as in the much the we expect next quarter, see year. pre-COVID not year as the and year, for this This but part we'll there's for of of seen probably that latter we've good semester

Juan with question Scotiabank. The comes next from Recalde

So the higher of have than weakened and has cost risk anticipated. growth expectations economic been

still the almost X% book we However, expanding are quarter-on-quarter. seeing loan consumer

are and are growth consumer consumer you cost of can what clients of growth talk the in the type So And portfolio? the how products in driving risk about the portfolio? you balancing with

is Sure. like Thank Well, you a as you consumer we very very know, portfolio towards -- are much. not that's geared surprise. our

familiar afraid this So the as is. is we We -- with are cycle. happens or -- that's credit we're know not credit the cycle

been and make leaders As strategic we're sure building factors, mentioned, consumer, it's consumer. that our is [indiscernible] to our want in to certain reflects but continue we're sustainable. all being our group by to external exacerbated pillars strategy We and

be have we to the on situations. tactical depending very Obviously,

So what continue grow, has towards to some growth we lower not there. segments, to proposition put we're we're doing growth, something and value is brakes challenges it's risk gearing To automatic. presents in of the come

easier But use to credit -- customers, be lines. the on. Obviously, do. brakes the consumer part is You have what we them. card they Consumer customers responsible to for already had. credit, be their the your certain of have [regular] cash using the have in is They we terms to growth put of situations in there loans them tough our -- existing customers very and the lines we they have

because, second gearing probably do to still it our So we've half. started seen been and structure has management collateral portfolio towards that's we've the we've -- are we again, continue to we the able already will growing of the of portfolio what lower seen like decelerate, The risk during segments. -- have,

in also are We've our gone been boosting we've But We terms customers healthy. deductible doing toll XX years. It's risk through come. a of relationship this that ready of and to through moderating and is the appetite helping quarters them, matter the of payroll reward That efforts. cycles. what it's go part what just profitability. will situation, And risk the have with for again, a of tough engagement our these last the good drivers to is loans in we're remain do probably that,

The Aramburú BTG. with Instructions]. Alonso next from [Operator question comes

three have I questions.

of when can reported to better happened it little can the rate first resilient will I than which to is see which margins numbers, exactly move as or -- usual. as expect what so think or holding to already similar do quarters. the mean were margins, marked to on -- now numbers regarding in one decline there? rates some a Can mark-to-market it better decline. just of has higher, comment marked exactly Or likely And the But your your in you -- comes your but also, you comment continued good we which expenses, that news. which it as couple is The way just Second, what been being sensitivity bit finally, cycle to continues on can more months Inteligo, be next you a start so, rates fully you -- continue down? to a have is to down show losses. Can larger down, as couple continues

Okay.

thank you, Alonso. -- me Let

On expenses, that Basically, the Basically, been regular. month. There're only yes, of a is it's structure like we very have like overhead simple. particular lots expenses. don't holding

the what that is it small impacting So -- portfolio have is there. a we --

you of our a level. As related to about portfolio Holdco many have in you the this at local strategy -- in let's remember, directly, say, part just not is I've fintechs talked past, to in we like times small do invest the or the companies,

$XX million is of It names total We small. not investment have asset base funds. than X that It's the among a of It's or there, no out with $XX.X them big. million. is like deployed more different only X

are U.S. a However, quarter payment which happened valuation is the actualization. investments, those have of in or the credit-related in -- also what has some companies last fintechs mainly

because up, during tech come it year all fintech reflecting and deployed some last late with the at last the that company. portfolio, moment that our the valuations capital companies early this early what new at year in, happened basically, So valuations that value when came actual of up of they're and marked the we million of went frequently, year $XX is that point don't and

So us plus hit that basically around of XX million. gave PEN a

So impact there. that's basically the

still All above capital are deployment. valuations the the

because gone valuations, of up intake However, part. had on frenziness valuations we saw in of frenziness last that it saw we on of because terms the fintech the the down it what of went and

$XX went in to market reflecting that and And deployed million up so at years -- $XX -- went conditions. about quarter, sorry, again, this point down last the Xx X some million X

happens, something [indiscernible] past. And future. you it as we in that as basically, not because done we So as have said, report I will well we in hope the repeat will if the that

can on going In Michela in Inteligo, on question terms there, back then pass the what's let us come [indiscernible]. and I'll view with it give with terms so of to a Bruno better me margin of he

Yes.

is there's terms the as private the of Felipe portfolio the mentioned, we've to and seen that sense, felt which in that same to funds, portfolio, are, completely of effect marked expect the invested is year. a were some So just we last similar one be in due funds some in Mr. that have we or effects Inteligo's effects portion would of some that this year, equity

mark-to-market. Now of the the majority is portfolio

it's on and move the again, because, so to going would to on are hard lot do. be fixed prices it's, And down. a dependent income up this market the is going market equity very on to or it side, largely so mark-to-market, predict whether and what It I say, depends the would

as that for opposed are a going The is fixed equity income as through go There market stocks portion But the equity valuations the of portfolio then that fluctuate the is -- has in year. rebalanced. the portion P&L. rest so to we to going -- hold portfolio been now good is

how been So seen say performance have seen stable year, going to saying, hard better to much forward expect in we've much portfolio. and us but we we've the that be for would this like -- more much we more,

actually Holdco I in to what not It's you, in created get where the company Alonso, Yes. to say rights forgot access model have different terms what we investments do they're the Bruno. because learn And or -- the at the of we these company. underwriting, portfolio Thank we doing credit expenses. to are insurance building access of the the just [indiscernible] to to solution. their to access their observer boards. their These of in We terms get in in we management get payment fintechs know-how, something

have we're our then we like Peru, work strategic of again something very very the own, for we investments we Again, it's those is million it's learning. the get deployment there. order feel we we we building only the to of in strategic can to them order our know-how in each, into digital behind market a PEN initiatives, that X coming limited, do investments the rationale those solutions So the our to Instead us do special them. have access put transfer but of So from we in and which bank, way local okay? if that's to believe

in your was terms question last then margins. And of

so [Indiscernible]. on Let can to it pass she Michela, me

happened on of In terms terms yet And where of increasing Did not in rates, the saw I'd to also that different have in the [indiscernible]. has lines both on increase like soles rates cost in to pace? is a going what evident high be dollars go a We we very little bit in very you context see I net it's big yield because what funds. impact mean, a in loans. of and seen then at been of have

if has So basis increased only and catch funds this the like continued last yield months, to XX quarter up be that why on by see has NIM cost you points. loans, XX of is

because and we should some which going different important an short-term overnight soles at in rates forward, the are decreasing, have start some still have actually to year-end, our part So funding. of of institutional terms which especially soles trends dollars which before in cost for of deposits, positive see funding, and impacts point,

a about So little And should July, decrease in I actually, those mentioned that. sharply. bit

already We inflection to have see okay? started there, an point

soles. rates. asset the to a can be even sensitive more there're much rates we because the [indiscernible] In decreasing little we of focused with as on different so see our also terms stick book, higher there try and And a should bit reason in retail, in little it's no less we should commercial book should as

continued until increase rate, dollar still and happens what has about we rate see when need year-end. Now even we talk to the to dollar recently,

decrease part in could point funds dollars, where full an in cost in year. decrease of So rates there commercial the rates next a have of the we loan funds next of year, effect now book, year there and terms still if yields. could impact year biggest loans, because cost the of we then the start in the is And in to next see inflection dollars increase see an will still this we the in -- also of increasing dollar of

with yet to So I together, happen sure not NIM. am completely going putting is what everything

mix running third portfolio portfolio year yield our also mix We estimates of because and the now, of just that the the growth it the to has next on be could depend this is the case. improve year, are continue helped loans, also component, will which depending on

sorry, different straightforward different are directions So in answer, is think a now. I trends there but I'm it moving not

with comes JPMorgan. The Medina from next question Marlon

have provide Actually, for a on been the my than dollar questions you but understand different for quick most points follow-up answered, is move? But And sensitivity portion the basis for XXX it can I of that rates just margins. the portion. every soles

of like been happened the points a that this [theory] going Listen, -- from in the the in to okay? the I provided rates. The has been sensitivity up, past, reality that have move. sensitivity sensitivity positive neutral in was Yes. rates XXX when and has But -- of increases has of basis effects different many little okay? what we And because the were cumulative

time. that day, the it at of end more we the at So when estimated the being positive up ended

decreasing on with back So let we in the soles rates are that to working the still because now for one. for you me now dollars sensitivity come

before, to book it's actually. more I mainly it it's risk correlate funds the and Michel , does consumer related that mentioned soles the pricing especially appetite to [indiscernible] be not Yes, of there really, sensitive, think and less should cost

the sensitive the be rates shouldn't So commercial the on as as book. downturn of

in Yes. movements speed and And competitive been have liquidity. the also of the that impacted one maybe by additional dynamics rates [indiscernible]

higher liquidity So for the because of this the a system market we've financial example, soles rate in decrease of being the reference year, seen in rates than overall.

what in to the with liquidity the have will we So see happens also market.

with Soto The next Santander. question comes from Andres

questions. two have I

under to payments be And for this business see what the on terms is any We still And to business. you expect changed The the first understand your business related negative? cost. results customer overall portfolio? way, in have for due has expectations of to -- positive you like the so pressure to when have ROE seen acquisition based would one ROE I do in this in far, or accretive the

Andres. Thanks, Tori. pass to Okay. going on I'm to it Carlos

Carlos basically, like here, see by question. me or banking an But the that help to not can specifics like numbers. of will lots for the payments business, or clarity even where obsession -- we're the more at payments looking of this as in is the we company. depleting insurance he like in to universal the probably don't like us more But the little ROE and we're specifically EBITDA provide business, So order CapEx because is opposed Izipay. bit do It's the there we're on growing expansion.

Okay.

Andres. hello, So

some the seen we've in is last had the growth said, of that As couple of that pressure Felipe quarters. you've from work -- comes the

continue -- for We lost will look hear growth think I've sorry, can I to and connection. that you me?

okay. it's No,

It's okay, Carlos.

can Carlos, we Yes, hear you.

okay. Okay,

increase at that. and competition, to we add So we growth. the maintain -- in bit is higher to XX%, physical expected our around the increase has somewhere -- do on trying POSs, which of so the probably pressure we those a at to -- to you're And bank to both have continue seeing Interbank we probably the POS, follow little e-commerce in we to share Izipaya. that services What e-commerce, clients There the like in fees, XX% are increased that in to that somewhere our share share. float margins we then market have and And but will due XX%. would the will we around flow increase than business, been some or XX%,

will we growing in on So e-commerce. focus

and starting income. in more are We aggregated continue to will bring follow that build services the growth that to

I of it. we if that that's don't So know at question, how answers your look -- the Andres. kind

your the see if Nino risk to to El I would cost El or is risk the a what event of an on related cost cost and of for indeed risk is your additional guidance already outlook. risk question follow-up incorporates of this we more year? this to pressure probably of Nino materializes, My should like XXXX: of extent second understand new for Nino El question Or

next come year, Nino effects early No, seen if Yes. they the probably -- can as February. risk -- we've past, I XXXX, cost the of we seen say mentioned we've I El late would in of that probably guidance, the as for usually will January, the

providing incorporating However, El outlook be some Nino. the growth affected some could is areas that part are of restrictions we in heavily by that

growth. terms So of but we're preparing the that, portfolio in for

not One that of some our thing enterprises temperature has very that come issues across commercial well is despite we're is the seeing. portfolio that behaving and

know, in you agriculture. exposure have As on good fishing, exposure well. very we That's behaving

PDLs ones. have the companies. there the the with we solid and We with Our most relationship work

done process as working in we that they that with they've we with also are be limited issues. through El Nino the are go for make we issues to no or are to able with So will and ready in order confident them sure past,

comes whatever with El around to be of hoping the Nino the we'll related but this very any be the resilient. exposure impact from to it's Nino, area even economy, it on very [indiscernible] happy proven in consumers commercial mostly El our So by downturn impacted book

loan retail the conservative are bank, -- Our book. rates a delinquency the we more manage low, on in the commercial bit very and sorry, and that's the more aggressive on commercial way little the book

So we have more a balanced portfolio.

not your is if much of we in should in you cost see your terms mostly past Sorry, that of of including are of or this to to a loan understood is of look I the Nino on be of provisioning, I once in of of so, terms was But if cost as the incidence we X of this reflected, in historical ago or terms quarter swing? it's in years being our in El of growth, events And or year fourth terms guidance, mean risk? type mean, risk. when full event going the effect correctly, what it I impact

different many the for in was year, next very a seen it similar Yes, it what -- very Yaku, to is because we've we second mostly be years. but there quarter the that between in should was not first phenomenon seen have of different which

is it's this things. does to phenomena first X% -- because the not year. in similar seen was not does that certain XXXX affect year, in not the whole related be some I and or Lima. the it we've probably way the It's of you'll it's same included areas. incorporated basically year. very What yes, if past last be should the in to of quarter It very say it So would and the we next of quarter hits, country [indiscernible] portion Peru strong see going expect. in in probably El in of Nino PDLs the increase north specific the specifically and that second whole

will I At InspIR from to the Group. this question. time, Natalia over the turn webcast we take will now the call

Thank you.

in [indiscernible] considering consumer from CrediCorp The first segment consumer segment? outlook do Capital. NPLs? [indiscernible] the Daniel asset the question expectation the in Mora the bank growing of peak the Can quality the indicators from is When and would growth this comes you challenging And reached ahead? the is, appetite for question change what the the of

question. again for thanks Daniel, your Hi

peak the expectation see see. the unrest depends early based have we all for what okay? reprogramming in we're happened have and It those is reached the Well, [indiscernible] social through already for going the -- like again, we through quarter. Let's bank on is reach And we've next quarter. the months. in, the of a of think growth what's with what in It's left going book, today? the overs Yaku you last and portion year of peak. in maturing the big terms we that probably the would But this when some been What

Obviously, might important next next in most worse will the numbers. say, probably better I cover than we that. again, but portion what of predict And quarter, be we for but would last months. are it in I quarter change what are quarter the is to have a seen the -- that's, competitive be [indiscernible] we app, seeing cannot for want the do we this. exactly, don't I this So anticipate different

want Obviously, we next portion will But important this. is it worth So of that's, for quarter next don't seeing numbers. I what quarter than would that. seeming say, we seeing cannot the I but this are probably are anticipate a better might most be what be quarter, to lever exactly. we

towards we've we'll last years in our continue do years, retail. different doing XX the been so. we in or go to Obviously, credit -- we to we very have change XX%, This XX% And the the what appetite, like we are the and cycles. competitors is like XX through again, -- will

go the credit when bit what will when up, things seeing is in is the all cycles we're we'll which We period, suffer a down now. and shine right

to during not growth. but go which moderating economy, We're on lower going will change moderation, segments be see radical, are you the in that we're already to risk in We what seen seeing looking based is some pockets grow. July that looking always of We're we seen We've the started. for year. quarter. in has We've where new part will continue can and that this latter probably in

our models. We are looking to reinforce

that the was As you mess the the in put up because of [indiscernible] [indiscernible] COVID into to systems happened model know, and overall. about the liquidity what

situation working and class, we're models able So be we've emerging in the and to lower risk to going grow growth the we're moderation segments. as once a been in doing refine to stabilizes, again, our targeting obviously, past. the middle go And to

the question would The La I IT]. details insurance-- gone question And is, in When from following Positiva. down it quarter? comes about the Ramos has like Alexandra know the more [ROP this insurances, from to

Okay.

think great La a question, Alexandra I that's Positiva. from

you. you cannot Let who on are that sorry can to you I'm with help I pass mute, Gonzalo, hear me in We it answer. think.

something. do Let's

Gonzalo to issues, go technical while next we'll his Let's the back And solves come to him. question.

the have question? do you know third So moderator, I don't --

Yes.

from cross-selling next overall segments, business how be example, for and products significant and each the you bulking strategy both on IFS example, and is IFS multiple will across between Can The Mitchell ABP for impact payments digital within from Greg Ventures. Okay. us question improving system within remind banking business, performance? the comes how please

the Okay. for Thanks, Greg, question.

to so pass she Michela, that. can it me me on with Let help

I think he has at looking that. been already

Okay.

that very a but into which like the strategy, the detail go I to is clear. across bit would me of presentation, is digital call the being reflect little make something to that by generated value try Let we it

is increase helping an first the us that point on digital to base So the base. strategy is customer accelerated

growth in across you that have payments. seen also all wealth and business double-digit banking, management insurance, So lines,

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to in creating are principal means being being in an like the seeing share bank engagement increase helps these retail, we deposits, more [indiscernible] So mainly market is thanks retail which more clients. this with main that of the engagement, of in this more And or sustained is digital, time.

So volumes more they bring to us.

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are we bancassurance. hard very So working in

being our example, insurance for retail products have base client the So the now to app. Interseguro we cross-sell all through

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in growth digital. has the impact this seeing coming share also market are from strong consumer a [indiscernible], and and We

last about this relevance on talks of the the which And what the and the payments. is of synergies numbers also point, the impact with

of this our some is think in already showing I numbers.

both on also for all, And for banking fees for are but customers specific XX% and of to First almost growing due in payments. the related is this focus -- merchants. payments, for

not from coming income net in decrease interest We volumes, seen also have yields. increase in the only in

the digital And thing with growing with is revenues, net growth in grow seeing coming the we think little And a line come in being marginal important the because base another and client for income a does able but so income is that consider the acquisition I is which been has is to costs. of only this cost strategy in digital high we're income. top cost lot, cost from base now IFS interest manage are because very an improving a to improvement and what efficiency, able lower. the [indiscernible] margins are growing client to increase not And improving

the quarter, seen less numbers X% cost. than in this have You increase

that intend from in from regions. how the it's something think continue So constitutes peers extracting I in I to is us we the that something core think digital of value a future. this And our differentiates the strategy

back question we I think to Okay. section. from And number so Gonzalo this now back, is go X can

Alexandra. Thanks, Yes.

Regarding down. One your exchange reasons. there's basically in come small all, for first question, of is interest a two rate earned reduction

is that some a our smaller the of dollar also less the produce sole amount interest the second dividends dividends line during received holdings [indiscernible]. period. We received. includes And in So

part. that that So explains

is estate on The other those valuation make line that reduction. real XX has reduced lines loss explains billion of PEN we the two and of most also

Gonzalo. don't any the Okay. more we questions if have Thank you, moderator. from I know

As there call questions, the further I to no return the are will operator.

to audio the I further questions floor time. And Ms. there turn back at closing on this would for no like appear Casassa any the to be to over side remarks.

we Thanks. everybody, you We'll for Okay. and much. again for when everybody Thank quarter our back very Thank conference our the report questions all results. call. see Bye. third you, attending

today's conference concludes call. This

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