Credicorp (BAP) Q4 2025 earnings review
Credicorp Cements Recovery with 41% Earnings Jump and Digital Pivot
Credicorp closed 2025 with a powerhouse performance, delivering S/1,587M in Net Income—a 40.9% YoY surge. While QoQ results dipped 8.7% due to seasonal OpEx and the normalization of insurance reversals, the full-year story is one of structural improvement. The 'Yape' digital ecosystem is no longer just a payments app; it is now a lending engine, with credit contributing 23% of its revenue. Asset quality reached a multi-year high as the NPL ratio dropped to 4.5%. Management has set a high bar for 2026, guiding for a 19.5% ROE and accelerating loan growth to 8.5%.
🐂 Bull Case
The NPL ratio hit 4.5%, down 71 bps YoY. This structural improvement in payment behavior allowed Risk-Adjusted NIM to reach a record 5.55%.
Yape lending base grew 151% YoY to 4.1M clients. Credit now makes up 23% of Yape's revenue, up from just 11% a year ago, proving the monetization strategy is working.
🐻 Bear Case
The efficiency ratio worsened to 49.0% this quarter from 46.4% in Q3. OpEx is growing at 12% YoY, outpacing revenue growth and threatening the long-term 42% target.
Management signaled a 'potentially big impact' from expected currency devaluations in Bolivia, which could act as a significant drag on the total loan book in 2026.
⚖️ Verdict: 🟢
Bullish. Credicorp is successfully transforming from a traditional bank into a digital-first ecosystem. Record-high risk-adjusted margins and strong 2026 guidance outweigh concerns over temporary expense spikes.
Key Themes
Yape: From Payments to Profit Engine
Yape reached 15.9 million MAUs, covering 84% of Peru's economically active population. The shift to credit is the primary catalyst: disbursements hit 5 million per quarter with multi-installment loans now dominating the balance. Monthly revenue per user jumped 56% YoY to S/9.6, while expenses per user remain stable at S/6.1, driving massive operating leverage.
Asset Quality Super-Cycle
Portfolio quality is **Stable/Improving**. The NPL ratio fell for four consecutive quarters to 4.5%, a level lower than the pre-recession period of 2023. This was driven by BCP Stand-alone's wholesale repayments and better quality 'vintages' in consumer lending. Provisioning expenses fell 31.6% for the full year, a massive boost to the bottom line.
Expense Bloat from Innovation
Total Operating Expenses rose 12% YoY, and the 4Q25 efficiency ratio spiked to 49.0%. Management explicitly warned that fast-growing disruptive ventures like Yape currently have higher cost-to-income ratios than the core business. While necessary for growth, the efficiency ratio is **Decelerating** (moving away from target), adding 160 bps to the FY25 ratio compared to FY24.
Peruvian Macro Tailwinds
Management highlighted record terms of trade (highest in 75 years) and domestic demand growing at 5.7% in 2025. The 8th pension fund withdrawal provided PEN 25B in liquidity, of which BCP captured PEN 11B. While this hurts Prima's fee income (-10% projected for 2026), it significantly lowers cost of funding for the banking units.
Other KPIs
**Accelerating/Record High**. Improved from 5.1% a year ago. This reflects the dual benefit of lower funding costs (from low-cost Yape deposits) and lower credit risk provisions.
**Stable**. Growth was led by Consumer loans (+11.3%) and Mortgages (+9.9%). The company is successfully shifting its mix toward these higher-yielding assets.
**Concern**. While BCP and Mibanco are growing, ASB (offshore banking) saw its loan book shrink nearly 20% in nominal terms (9.2% FX neutral) and net income drop 16% YoY.
Guidance
**Accelerating**. Improving from the 19.0% achieved in FY25 (18.6% recurring). This signals management's confidence that digital monetization will offset the end of the high-interest-rate environment.
**Accelerating**. This is a significant jump from the nominal 2.9% reported in FY25. Management expects the Peruvian economic rebound and BCP's increased risk appetite to drive volume.
**Stable**. Despite falling reference rates (4.25% at end of 2025), Credicorp expects NIM to hold steady due to its high share of zero-cost deposits (61% of funding base).
**Accelerating**. The innovation portfolio currently contributes 8.1% of risk-adjusted revenues, up from 5.6% a year ago. Management reaffirmed it is on track for the double-digit target next year.
Key Questions
Efficiency Recovery Bridge
Efficiency deteriorated to 49% this quarter. What specific cost levers will be pulled in 2026 to bring this back toward the 42% medium-term target?
Bolivia Currency Hedge
Management expects a 'big impact' from Bolivian exchange rates. What percentage of the group's equity is at risk, and are there active hedging strategies in place?
Yape SME Credit Risk
Yape is piloting SME loans with tickets averaging S/2,200. How does the NPL performance of these fully digital, 'untested' SME loans compare to Mibanco's traditional high-touch model?