Credicorp (BAP) Q2 2026 earnings review
Yape Monetization and Accelerating Loans Trigger Major ROE Upgrade
Credicorp delivered a robust 20.3% ROE in Q2, absorbing S/106 million in preemptive El Niño provisions without losing momentum. The core banking engine is accelerating: total loans grew 13.1% YoY, breaking previous conservative estimates, while Net Interest Income rose 13.3%. The standout driver is Yape, Credicorp's digital super-app, which has decisively crossed into strong profitability—generating S/11.1 in revenue per active user against S/6.0 in expenses. Bolstered by a resilient Peruvian consumer and this structural shift toward digital, fee-based revenues, management aggressively raised 2026 loan guidance to ~12% and unveiled a highly ambitious medium-term ROE target of ~22%.
🐂 Bull Case
Yape is generating massive operating leverage. Revenue per user jumped 72.4% YoY while expenses per user grew only 37.4%. Yape now contributes 8.9% of Credicorp's total risk-adjusted revenues.
Low-cost deposits (demand + savings) now represent an impressive 74.4% of total deposits, up 440 bps YoY. This structurally defends margins, driving the funding cost down 29 bps YoY to 2.15%.
🐻 Bear Case
Management booked S/106M in preemptive El Niño provisions. A severe climate event hitting in early 2027 could severely decelerate loan growth and fee generation.
Operating expenses grew 13.8% YoY, heavily driven by cloud infrastructure costs and IT talent acquisition. High investments in the disruption portfolio will continue to limit efficiency ratio improvements in the near term.
⚖️ Verdict: 🟢
Bullish. Management's confidence to guide for a 22% mid-term ROE is fully backed by accelerating loan growth, declining NPLs, and the explosive, profitable scaling of Yape. The preemptive El Niño provisioning shows mature risk management rather than structural weakness.
Key Themes
Mid-Term ROE Target Upgraded to ~22%
Management fundamentally shifted its profitability narrative. Previously guiding for a sustainable ROE of ~19.5%, Credicorp upgraded its mid-term target to ~22%. This accelerating profitability profile is driven by deep penetration in underbanked retail segments, a shift to high-yield loans, and expanding fee monetization from Yape.
Yape Lending Evolution and Monetization
Yape's transformation into a massive profit center is accelerating. Lending balances quadrupled YoY to S/1.8 billion, accounting for 28% of Yape's risk-adjusted revenues. With 16.7 million MAUs and only 34% credit penetration among them, the runway for cross-selling multi-installment and SME loans remains enormous.
El Niño Provisions and 2027 Headwinds
While Peru's current macro environment is strong, El Niño remains a looming concern. Credicorp recorded S/106 million in preemptive provisions based on current climate data. Management noted that roughly 9% of total loans are directly exposed, warning that if a severe event hits in early 2027, loan growth could significantly decelerate.
Peru's Macro Resilience Counters Primary Sector Shocks
Despite a ~5% YoY drop in primary GDP (fishing, agriculture) due to El Niño disruptions, domestic demand is acting as a powerful offset, growing roughly 5% YoY. This stable domestic consumption environment is giving BCP the confidence to accelerate Consumer and SME-Pyme loan disbursements.
Cost of Risk Reversing Upward by Design
While overall NPLs dropped to an impressive 4.1% (down 91 bps YoY), underlying Cost of Risk (excluding El Niño) increased to 1.6% from 1.3% in Q1. This is a reversing trend driven by management's deliberate strategy to originate higher-risk, higher-yield consumer and SME loans. Managing this mix without breaching risk guardrails will be a critical execution test.
Operating Expenses Outpacing Operating Income
Total Operating Expenses grew 13.8% YoY in Q2, while Operating Income grew 12.7%. The efficiency ratio stood at 45.4%. Management attributes this to crucial investments in cloud infrastructure, IT talent, and disruptive initiatives (Yape, Tenpo). However, this dynamic creates a short-term drag on consolidated efficiency.
Other KPIs
Accelerating. Up 21 bps YoY and 5 bps QoQ. This expansion was driven by a 29 bps plunge in funding costs, aided by a deliberate shift toward low-cost demand and savings deposits.
Accelerating. Up 19.7% YoY. Fee income surged 15.9% driven by massive transactional volume from Yape and BCP, while Foreign Exchange gains spiked 29.8% capitalizing on regional currency volatility.
Decelerating. Down 17.9% YoY. A notable weak spot caused by a base effect from prior-year reserve releases in the Life business, alongside higher claims in Property & Casualty (P&C) lines.
Guidance
Accelerating heavily from the previous FY25Q4 guidance of ~8.5%. Management is capitalizing on strong momentum in Retail Banking at BCP and Mibanco.
Stable compared to prior 2026 guidance, though management explicitly noted they could beat this target were it not for the uncertainties regarding El Niño's severity.
Accelerating. Upgraded from previous 'low double-digit' guidance, directly reflecting Yape's hyper-growth in transactional monetization and strong core BCP activity.
Reversing upward. Management expects the cost of risk to climb in the second half of the year as they continue to digest El Niño variables and intentionally mix into higher-yielding, higher-risk retail segments.
Key Questions
Bridge to 22% ROE vs El Niño 2027
You set an ambitious 22% mid-term ROE target while simultaneously flagging Q1 2027 as the potential peak impact window for El Niño. Does the 22% target assume a mild climate event, or is the structural earnings power now strong enough to absorb a severe shock and still hit 22%?
Yape SME Lending Scale vs NPLs
Yape lending is scaling aggressively, increasing 4x YoY. As you transition from single-installment micro-consumer loans to multi-installment SME loans, how are early-stage delinquency indicators tracking against Mibanco's traditional portfolio?
Operating Expense Normalization
IT and cloud infrastructure expenses are driving a ~14% YoY growth in total OpEx. At what specific revenue or scale threshold do you expect Yape and the Neobanking unit to generate enough operating leverage to permanently pull the consolidated efficiency ratio down toward the 40% mark?