Record Q1 profit: Intercorp Financial Services reported quarterly net income of PEN 602 million, with ROE above 19%. Management said the strong result was driven by better banking profitability, lower credit costs, and double-digit growth in insurance and wealth management.
Banking and funding trends improved: Interbank posted record earnings as loan growth, lower cost of risk, and stronger funding costs supported results. Deposits rose 8% year over year, and the company’s risk-adjusted net interest margin improved to 4.2%.
Outlook and strategic investments: IFS raised its full-year ROE outlook to above 17% and still expects high single-digit loan growth in 2026. The company is also investing in digital payments and expanding through the $130 million acquisition of InFinance XP to strengthen consumer finance and payments.
Intercorp Financial Services (NYSE:IFS) reported a record first-quarter 2026 profit as stronger banking profitability, double-digit growth in insurance and wealth management, and lower credit costs helped lift returns above prior expectations.
Chief Executive Officer Luis Felipe Castellanos told investors that the company delivered quarterly net income of PEN 602 million and return on equity above 19%. Chief Financial Officer Michela Casassa said net income rose 35% year over year, while ROE reached 19.4%.
Management said Peru’s economy began 2026 with better-than-expected momentum, with first-quarter GDP growth tracking around 3.6%, supported by private spending and favorable commodity prices. However, executives also pointed to risks from global volatility, higher energy prices, inflation pressures, potential weather disruptions from El Niño and political uncertainty tied to the presidential election cycle.
Banking Results Supported by Lower Credit Costs
Interbank, the company’s banking unit, also posted record quarterly net income, according to Castellanos. Casassa said the bank’s net income increased 44% year over year, with ROE improving to 19.5%. Results were supported by lower cost of risk, gains tied to sovereign bonds, strong foreign exchange gains and improved funding costs.
The company said total loans grew about 6% year over year, or 7% excluding foreign exchange effects. Higher-yielding loans grew 9% from the prior year, with growth led by mortgages, mid-sized companies and small businesses. Small business lending stood out, rising nearly 30% year over year, while mortgage lending grew more than 8%.
Casassa said consumer balances were broadly stable compared with the prior quarter due to excess liquidity from pension fund withdrawals, but consumer loans still grew 5% year over year. She added that April showed a “clear acceleration” in growth, a point management reiterated during the question-and-answer session.
Cost of risk fell to 1.4% in the quarter, its lowest level in four years, according to Casassa. Retail cost of risk dropped below 3%, while consumer lending cost of risk improved to below 5% from around 7% a year earlier. Non-performing loan ratios remained healthy, and the coverage ratio stood at about 140%.
In response to an analyst question, Interbank CEO Carlos Tori said the company does not have a target to increase cost of risk, but expects risk to gradually normalize as liquidity fades and higher-yielding loans grow. He said the bank’s risk appetite is in the 2.5% to 2.8% cost-of-risk range over the long term, not the short term.
Risk-Adjusted Margin Improves as Funding Costs Decline
IFS reported a 90-basis-point year-over-year increase in risk-adjusted net interest margin, reaching 4.2%. Casassa said the metric improved another 20 basis points from the prior quarter, mainly driven by lower cost of risk.
Reported net interest margin declined 10 basis points from the prior quarter but remained stable year over year. Casassa said a January bond issuance had a negative impact of about 20 basis points on NIM, which she said should disappear later this year.
Deposits remained the company’s main funding source, representing about 82% of total funding. Total deposits grew 8% year over year, or 9% excluding foreign exchange effects. Retail deposits rose more than 13%, while efficient commercial deposits increased 27%. Casassa said cost of funds fell 40 basis points year over year and 10 basis points from the previous quarter.
Digital Payments and Customer Engagement Remain Key Focus Areas
Management highlighted continued investment in digital capabilities, payments, cybersecurity, technology infrastructure and generative artificial intelligence. Expenses increased 13% year over year, and the company’s cost-to-income ratio stood at 36.6%.
Plin, the company’s digital payments platform, ended the quarter with 2.7 million monthly active clients and more than 70 million monthly transactions, with 60% of transactions going to merchants. Retail digital adoption reached 84%, while commercial digital clients stood at 75%. Retail net promoter score reached a record 68, and commercial NPS reached 73.
Casassa said Plin WhatsApp, described by the company as the first bank-led payments experience on WhatsApp in Peru, reached nearly 7,000 affiliates by the end of March. The company also launched Plin Credit Card, a buy-now-pay-later solution that had more than 30,000 active clients.
During the Q&A session, Tori said the Central Bank is developing an additional payment “highway” through a service provided by UPI from India. He said the system could come online around December, though he said January 2027 may be more realistic for most banks given December’s high transaction volume. Tori said the new rail would be complementary to existing Plin infrastructure.
Insurance and Wealth Management Post Double-Digit Growth
Interseguro, the insurance business, continued to grow in private annuities and life insurance. Written premiums increased 35% year over year, mainly due to private annuities, while contractual service margin rose 15%. Casassa said annuities increased 19% and individual life rose 17%.
In response to a question about client growth, Interseguro CEO Gonzalo Basadre said the total client count was growing more slowly because many insurance clients come from bancassurance products that are large in number but small in revenue per client. He said growth is being driven by private annuities and life insurance, which have fewer clients but much larger average premiums.
Inteligo, the wealth management unit, reached a new high in assets under management of $9.5 billion, including deposits. Casassa said assets under management grew 13% year over year, while fee income increased 9%. Inteligo’s ROE reached 22% in the quarter.
IFS Raises ROE Outlook After Strong Start
Management revised its full-year ROE view upward. Casassa said the company now sees year-end ROE above 17%, compared with prior guidance of around 17%, while still expecting high single-digit loan growth for 2026. The company said its cost-to-income ratio remained within its guidance range.
IFS also discussed its recently announced acquisition of InFinance XP, formerly Financiera Oh!, through IXP Holding for $130 million. InRetail Peru Corp. and IFS each own 50% of IXP Holding following the closing. Casassa said InFinance XP has nearly 3 million customers, PEN 1.8 billion in loans and PEN 1.5 billion in deposits.
Castellanos said the partnership with InRetail is intended to strengthen IFS’ consumer finance and payments ecosystem by combining the company’s financial capabilities with InRetail’s retail footprint. He said the launch of Sip, an app combining financial products, payments and loyalty, has exceeded the company’s initial expectations, though he described the opportunity as medium- to long-term and requiring further investment.
Looking ahead, Castellanos said the company remains focused on profitable growth, risk management, efficiency and disciplined investment as it navigates a more volatile environment.
About Intercorp Financial Services (NYSE:IFS)
Intercorp Financial Services (NYSE:IFS) is a Lima-based financial holding company that brings together a suite of banking and non-banking financial businesses under the Intercorp Group umbrella. Through its network of subsidiaries, the company provides a broad range of products and services designed to meet the needs of individual consumers, small and medium-sized enterprises, and large corporations across Peru.
The company’s core banking operations are conducted through Interbank, which offers deposit accounts, personal and business loans, credit and debit cards, trade finance and electronic banking solutions.
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