Andrés Soto

Andrés Soto from Santander inquired about Grupo Cibest's guidance assumptions, specifically if an 11% policy rate is factored in and if higher rates would necessitate a model update or additional provisions, posing a downside risk to the ROE guidance. He also asked about the factors that could balance out the uncertainties on taxes and interest rates to achieve the projected 18-18.5% ROE. Additionally, he questioned the comfortable level for the double leverage ratio (currently 101%) and requested quantification of capital planned for new ventures.

Answer

Juan Carlos Mora, Chief Executive Officer, confirmed the guidance incorporates current information, acknowledging that rising interest rates positively impact NIM but also increase risk, and expressed confidence in balancing these factors to meet guidance. Mauricio Botero Wolff, Chief Strategy and Financial Officer, added that scenarios up to 12% interest rates were simulated, ranges were used in guidance, consumer lending risk profiles were adjusted, and COP 300 billion in provisions were anticipated for minimum wage and a specific corporate client. Regarding capital deployment, Mr. Wolff stated plans to inject COP 600 billion into Nequi and COP 50 billion each into Wenia and Wompi, along with internal AT1 instruments. He noted the double leverage of 101% is well within the 120% limit, providing ample flexibility.

Andrés Soto questioned the 2026 guidance, specifically if it assumes an 11% policy rate and whether higher rates would necessitate a model update or additional provisions, posing a downside risk. He also asked what factors could balance out tax uncertainties to achieve the projected 18-18.5% ROE.

Answer

CEO Juan Carlos Mora stated the guidance incorporates current information, acknowledging that rising interest rates, while positive for NIM, also increase risk. He expressed confidence in balancing higher margins with a potentially higher cost of risk to meet guidance. CFO Mauricio Botero Wolff added that scenarios up to 12% interest rates were simulated, risk brackets in consumer lending were closed, and COP 300,000 in provisions were anticipated for the minimum wage increase and a specific corporate client. Regarding capital deployment, he detailed plans to invest COP 600 billion in Nequi, COP 50 billion each in Wenia and Wompi, and significant IT projects, noting the double leverage of 101% is well below the 120% limit.

Andres Soto sought a breakdown of Nequi's financial income (floating vs. lending interest), the economics of Nequi's lending (average loan yield, cost of risk), and the expected growth in Nequi's loan customer base for 2026.

Answer

Juan Carlos Mora (CEO) stated Nequi has ~600,000 loan customers, with an average loan of COP 2.5 million and interest rates near the 25% maximum. Mauricio Botero Wolff (CFO) detailed that Nequi's financial income is roughly split between investment and loan portfolios, with a low loan-to-deposit ratio (~24-25%). He mentioned Nequi's 30-day past due loans are around 6-7%, with an expected cost of risk below 5%.

Andres Soto from Santander sought a deeper understanding of Nequi's revenue structure, specifically the contribution of lending to its financial income versus floating money from transactions. He also requested details on the economics of Nequi's lending, including average loan yield, expected average cost of risk, and the projected growth in Nequi's loan customer base for 2026.

Answer

CEO Juan Carlos Mora noted Nequi started lending in early 2024, with close to 600,000 customers and an average loan of COP 2,500 at interest rates near 25%. He expects financial income from lending to grow significantly. CFO Mauricio Botero Wolff clarified that Nequi's financial income is currently split roughly equally between investment portfolio and loan portfolio, with a low loan-to-deposit ratio of 24-25%. He stated that Nequi's 30-day past due loans are around 6-7%, with an expected cost of risk below 5%, supported by very low cost of funds from savings accounts. He mentioned more detailed Nequi plans for 2026 would be shared with Q4 results.

Andrés Soto from Santander Investment Securities Inc. requested a deep dive into the economics of NEKI's lending business, asking about its cost of risk, margins, average loan size, scalability, and potential market size. He also followed up on the average loan duration and the volume of new disbursements.

Answer

CEO Juan Carlos Mora Uribe detailed NEKI's loan economics: an average loan of COP 2.5 million, interest rates near 25%, a 30-day past-due level of around 5%, and a cost of risk of 9-10%, resulting in a profitable product. He highlighted the vast potential within NEKI's 25 million user base. VP of Strategy & Finance, Mauricio Botero Wolff, added that the average loan duration is 28 months. Mr. Mora also noted that NEKI is adding approximately 50,000 new loan customers per month.

Andrés Soto from Santander inquired about the detailed economics of Neki's lending business, including its margins, cost of risk, average loan size, duration, and overall scalability.

Answer

President & CEO Juan Carlos Mora Uribe detailed Neki's loan economics, noting an average loan of COP 2.5 million, a 30-day past-due level around 5%, and a cost of risk of 9-10%, which still results in profitability due to high margins. VP of Strategy & Finance Mauricio Botero Wolff added that the average loan duration is 28 months. Mr. Mora emphasized the significant growth potential within Neki's 25 million user base, with risk management being the key focus for scaling.

Andrés Soto requested a deep dive into the economics of Neki's lending business, asking about its cost of risk, margins, average loan size, scalability given interest rate caps, potential market size, average loan duration, and the volume of new disbursements.

Answer

CEO Juan Carlos Mora Uribe and VP of Strategy & Finance Mauricio Botero Wolff provided detailed metrics. They stated Neki's average loan is COP 2.5 million with a 30-day past-due level of ~5% and a cost of risk around 9-10%, which is profitable given the low cost of funds. The average duration is 28 months. The business is scaling rapidly, adding around 50,000 new loan customers per month, with significant potential for growth within its 25 million user base.

Andres Soto asked if Yape's contribution was included in the 8.5% loan growth guidance for 2026 and how much Yape is expected to contribute to Credicorp's lending. He also inquired about the ramp-up of multi-installment consumer loans and SME pilots. Additionally, he asked about total expense growth expectations for 2026 and Credicorp's comfort level with BCP's and Mibanco's Core Equity Tier 1 ratios (14% and 17% respectively), considering asset quality improvements and faster loan growth.

Answer

Alejandro Pérez-Reyes, CFO, confirmed that Yape's lending is included in BCP's book and thus in the overall guidance. He stated that Yape's loan book is expected to triple in the next couple of years but will remain a smaller proportion of Credicorp's total book. Regarding expenses, he reiterated the guidance for a reduced cost-to-income ratio in 2026, driven by accelerating income from initiatives and continued investments. On capital, Alejandro Pérez-Reyes explained that BCP's internal CET1 limit is 11% and Mibanco's is 14.5%. The current high levels reflect capital built throughout the year, and Credicorp intends to declare dividends in March to bring CET1 closer to these targets, with excess capital flowing to the holding company for ordinary and potentially extraordinary dividends. He expressed confidence that no capital problems are expected despite increasing loan growth.

Andres Soto asked about Credicorp's comfort level with BCP's (14% CET1) and Mibanco's (17% CET1) capital ratios, considering improved asset quality and faster loan growth, and the company's capital distribution strategy.

Answer

CFO Alejandro Pérez-Reyes explained that internal CET1 limits are 11% for BCP and 14.5% for Mibanco. He stated that excess capital accumulated during the year will be distributed to the holding company in March through dividends, which will then propose an ordinary dividend to shareholders. He confirmed the intention to increase ordinary dividends annually, with potential for an extraordinary dividend depending on yearly conditions, all subject to governance approval.

Andres Soto asked about Yape's projected revenue growth, specifically if tripling by 2028 would mean a 15% contribution to Credicorp's total revenue and if this implied an earnings accretion exceeding 10%, making the 19.5% medium-term ROE target sound conservative.

Answer

CFO Alejandro Perez-Reyes confirmed Yape is expected to contribute around 15% of Credicorp's net results (not just revenue) in the next three years. He acknowledged that Andres's numbers make sense and that the 19.5% ROE target is conservative, given upcoming elections and execution risks, but suggested it would likely be on the "higher end" or "upside" if everything works as planned. CEO Gianfranco Ferrari agreed that the pushback on conservatism is correct, citing Latin American volatility and execution risk, but affirmed Yape's potential positive impact on the upside. Chief Risk Officer Cesar Rios added that potential cannibalization between vehicles (e.g., Yape and Mibanco) could generate value.

Andres Soto from Santander inquired about Yape's projected revenue growth (tripling by 2028) and its implications for Credicorp's overall revenue and earnings contribution, suggesting it could reach 15% of net income by 2028. He questioned if this potential earnings accretion, combined with Credicorp's current ROE, makes the medium-term ROE target of 19.5% seem conservative.

Answer

CFO Alejandro Perez-Reyes confirmed that Yape is expected to be a bigger contributor, aiming for around 15% of Credicorp's net results in the next three years. He acknowledged that Andres Soto's numbers make sense and that the 19.5% ROE target might be conservative, especially if everything works as planned. He stated that Credicorp is usually conservative in its views, given political uncertainties in the region, but would revisit the guidance later, implying the ROE could trend towards the higher end or even exceed 19.5%. CEO Gianfranco Ferrari agreed, noting that while the pushback is correct, Latin America's volatility and execution risk for Yape's growth warrant a conservative outlook, but Yape could have a relevant positive impact on the upside. Chief Risk Officer César Ríos added that potential cannibalization between vehicles (like Yape and Mibanco) could also be a factor, but it should generate value.

Andrés Soto from Santander asked for details on the 10% revenue target for digital initiatives by 2026 and questioned if the new 19.5% sustainable ROE target was conservative. He also inquired about the new efficiency target associated with this higher ROE.

Answer

Chief Innovation Officer Francesca Raffo confirmed the 10% revenue target for the innovation portfolio is for the full year 2026. CEO Gianfranco Ferrari explained that setting a specific efficiency target is tricky because fast-growing new ventures like Yape, while profitable, have higher initial cost-to-income ratios, which can negatively impact the consolidated figure even as they boost ROE. Chief Risk Officer César Ríos added that scaling new lending is a 'discovery process' of testing and scaling profitable segments. Management also revealed that the balance of Yape's loans is now 50% in multi-installment products.

Andres Soto asked for an update on Yape's lending business, specifically inquiring about the current mix of multi-installment loans versus single-installment loans and the company's expectations for the ramp-up of lending in either the individual or SME segments.

Answer

Chief Innovation Officer Francesca Raffo responded that the current focus for Yape lending is on individuals, though the ambition is to eventually serve SMEs. She clarified that while single-installment loans still represent the largest share of disbursements, multi-installment loans are becoming more relevant in the outstanding balance. She expects the outstanding balance to be mainly composed of multi-installment loans by the end of the year.

Andres Soto asked about the pro-forma capital and cash position at the holding company after the extraordinary dividend and Banmedica acquisition, and questioned if a 1.5x loan growth multiplier to GDP is reasonable for 2025.

Answer

Chief Executive Officer Gianfranco Piero Ferrari de Las Casas explained the Banmedica payment will come from the holding company, which maintains a cash buffer and had already accounted for the transaction when declaring the dividend. He stated that while loan growth will be positive in 2025, he would not commit to a specific multiplier at this time, promising more detailed guidance in February.

Andres Soto asked about the timing of Banco de Chile's loan growth expectations, considering the deceleration observed in Q4 2025. He also inquired about medium-term lending activity and Chile's GDP expectations for 2027 and beyond, influenced by the new government's regulatory agenda. Finally, he sought clarification on the drivers behind the 39% efficiency ratio guidance, specifically regarding fee income and expense growth.

Answer

Pablo Mejia (Head of Investor Relations) indicated that loan growth is expected to pick up more in the second half of 2026, attributing Q4 2025 weakness to low demand and loan repayments. He also projected better medium-term industry growth (1.4-1.5x GDP elasticity). Rodrigo Aravena (Chief Economist and Institutional Relations Officer) added that medium-term recovery depends on the specific details and timeline of the new government's proposals. Pablo Mejia further explained that the efficiency guidance reflects expense growth slightly above inflation, higher depreciation from technology investments, and fee growth driven by customer acquisition, cross-selling, and Banchile Pagos.

Andres Soto from Santander sought clarification on Banco de Chile's loan growth expectations, specifically whether the pickup would be tilted towards the second half of 2026, considering the deceleration observed in Q4 2025. He also asked about medium-term lending expectations for 2027 and beyond, influenced by the new government's regulatory agenda and Chile's GDP. Additionally, he questioned the drivers behind the 39% efficiency ratio guidance, particularly concerning fee income and expense growth.

Answer

Pablo Mejia, Head of Investor Relations, indicated that loan growth would likely be more prominent in the second half of 2026, aligning with government changes and activity. He noted that Q4 2025 was weaker due to low demand and loan repayments. For 2027 and beyond, he suggested a return to higher industry growth levels (1.4-1.5x GDP elasticity) that were lost in previous years. Rodrigo Aravena, Chief Economist and Institutional Relations Officer, emphasized that the timing of recovery depends on the specific details and timeline of the new government's proposals, especially tax reductions and red tape reforms. Pablo Mejia further explained that the efficiency ratio guidance considers expense growth in line with or slightly above inflation, driven by technology investments and Banchile Pagos, while fee growth is expected to be high single digits to low double digits, supported by customer growth, cross-selling, and Banchile Pagos.

Andrés Soto questioned the potential for an extraordinary dividend, given the bank's CET1 ratio is significantly above its target buffer and its large holdings of additional provisions. He asked what conditions would need to be met for such a payout to be considered.

Answer

Head of Financial Control Daniel Galarce explained that a payout ratio higher than the standard 60% is possible only under specific circumstances, such as consistently lower-than-expected loan growth combined with higher-than-normal net income. Head of IR Pablo Mejia added that the additional provisions are intended for negative cycles and while a release is possible, there is no clear timeframe given current global uncertainties.

Andres Soto from Santander questioned Banco de Chile's medium-term Return on Equity (ROE) target, asking if the bank expects to sustain levels around or above 20%. He also asked for the outlook on loan growth for 2026 and the expected loan-to-GDP multiplier.

Answer

Executive Pablo Ricci affirmed the bank's ambition to be the most profitable in Chile, leveraging its strong capital base for future growth. He revised the 2025 ROE forecast up to approximately 20%. Executive Rodrigo Aravena discussed the structural lag in Chile's loan-to-GDP ratio, suggesting significant pent-up demand. He projected a loan-to-GDP multiplier could normalize to around 1.4x-1.5x, which, combined with 2-2.5% GDP growth, could drive high single-digit loan growth for the system in the coming years.

Andres Soto asked about the bank's plans for its CLP 700 billion in additional reserves, given only a small portion is needed for a regulatory update. He also sought management's view on the overall credit cycle in Chile and whether asset quality deterioration has peaked.

Answer

Executive Pablo Ricci explained that there is no clear trigger to release the majority of the additional provisions, aside from the CLP 66 billion earmarked for the new consumer loan model in 2025. He stated the decision depends on economic and political factors and is reviewed by the Board. Regarding the credit cycle, both Ricci and Executive Rodrigo Aravena conveyed that the worst has likely passed. They cited normalizing factors like a stabilizing labor market, positive real wage growth, and expected lower interest rates as supportive of more stable asset quality going forward.

Andres Soto of Santander inquired about Intercorp's 2025 guidance, asking for confirmation of the ROE target and questioning why it wasn't being raised after a strong Q1. He also sought an updated outlook on loan growth given the improving consumer sentiment.

Answer

Executive Luis Castellanos López-Torres confirmed that the company is maintaining its current guidance for both ROE and loan growth. He explained that while the start to the year was solid, the positive macroeconomic trends need to consolidate further. He highlighted that the consumer portfolio has not yet fully recovered and that the commercial loan book remains the primary growth driver for the year.

Andres Soto of Santander asked for clarification on whether the ROE targets for business units were for 2025 or the medium term. He also suggested the NIM guidance seemed conservative given expected improvements in funding costs and consumer lending recovery.

Answer

Executives Luis Castellanos López-Torres and Michela Ramat clarified that the subsidiary ROE figures are medium-term targets, not 2025 guidance, with Interbank's ROE still in a recovery phase. Regarding NIM, Castellanos López-Torres reiterated a cautious stance due to the gradual pace of consumer recovery and potential volatility from the upcoming pre-electoral year, prioritizing a careful approach over aggressive growth.

Andres Soto questioned if IFS expects to continue outpacing the system's loan growth in the coming year or if growth would align more with the market. He also asked about the recent data breach, inquiring if it caused any short-term impacts like deposit outflows or account closures.

Answer

CEO Luis Castellanos López-Torres addressed both questions. He stated that there has been no material change in operations or customer behavior following the data breach and none is anticipated. Regarding loan growth, he affirmed that the company's strategic goal remains to sustainably grow faster than the market, leveraging ample room for growth in the commercial book and a recovery in the consumer portfolio. He did not provide specific 2025 guidance but maintained a positive outlook.