Intercorp Financial Services, Inc. Q3 FY2024 earnings call

• Macroeconomic outlook: Peru's GDP grew 2.9% year-to-date in 2024, expected to be ~3% for the year, with optimism for 2025 due to infrastructure and mining investment. - IFS resilience: Emerging from credit cycle challenges with effective risk management and diversification. - Interbank: Grew market share in loans/deposits, cost of risk converging, and gained share in key products. - Interseguro: Premium growth, especially in private annuities and individual life, and market leader in annuities. - Wealth Management: Assets under management at all-time high. - Operational issues: Interbank had service interruptions in late October, and a data breach occurred, with normal service restored and security measures reinforced. - Sustainability: CSA score improved to 69, first climate report published, green loan portfolio expanded. - Digital update: Increased digital customers, sales, and self-service across segments, with over 81% of retail banking customers being digital and NPS for retail banking at 66 points. - Key business segments: Gained market share in consumer and retail loans, retail deposits, and commercial loans; insurance premiums grew, and Wealth Management assets under management continued to grow.

Interbank has grown market share in loans and deposits, with cost of risk converging to normalized levels. Loan growth was moderate but cash loan disbursements rebounded 8% from the previous quarter, and gained market share in key products. Interseguro saw relevant growth in premiums, particularly in private annuities and individual life, and is the market leader in annuities. Wealth Management had assets under management reach an all-time high, with double-digit growth. Inteligo continued to capture business opportunities, contributing to the funding mix enhancement.

• Peru's GDP expected to be ~3% in 2024 and cautiously optimistic for 2025 with infrastructure and mining investment. - IFS expects positive trend to continue, with ROE above 15% in Q3. - Interbank expects cost of risk to continue converging to normalized levels. - Wealth Management assets under management to continue growing double-digit. - Loan growth had moderate quarter but potential rebound in Q4, with commercial banking, mortgages, and consumer portfolio expected to drive growth. - NIM expected to recover in 2025 due to cost of funds improvement and portfolio mix shift.

• Operational issue at Interbank led to service interruptions on October 30-31. - Data breach event occurred, with ongoing collaboration with authorities to address, and no immediate material impact on operations reported yet, but potential regulatory sanctions possible.

Q: Ernesto Gabilondo asked about NIM expectations, asset quality cost of risk evolution, and fee income growth.

A: Michela Casassa responded on NIM expecting recovery in 2025 due to cost of funds and portfolio mix, cost of risk expected to be around current levels with portfolio mix considerations, and fee income expected to grow nicely in 2025.

Q: Yuri Fernandes inquired about credit card loan book trends and margins.

A: Carlos Tori and Luis Felipe Castellanos mentioned credit cards remain important, cautious growth expected as economy recovers, and credit cards are accretive to NIM.

Q: Andres Soto asked about loan growth outlook and impact of data breach.

A: Luis Felipe Castellanos stated aim to outpace market in 2025, and no material short-term impact from data breach on operations.

Q: Juan Nicolás Pardo Ayala asked about potential regulator sanctions from data breach.

A: Luis Felipe Castellanos responded that they are collaborating with authorities and no sanctions anticipated yet.