How Strong Earnings and Tax Clarity at Credicorp (BAP) Have Changed Its Investment Story

• Earlier this month, Credicorp Ltd. reported second-quarter 2025 results showing strong growth in net interest income and net income, and also provided updated earnings guidance for the second half of the year, raising expectations for margin and provisioning levels due to effective risk management.
• Additionally, Credicorp announced that a PEN1.6 billion tax assessment and related fine issued by the Peruvian Tax Authority had been cancelled, bringing greater clarity regarding regulatory obligations.
• We’ll explore how the company’s improved earnings outlook and risk management drive shifts in Credicorp’s investment narrative.

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Credicorp Investment Narrative Recap

To be a Credicorp shareholder right now, you need to believe in its ability to expand digital financial services and maintain earnings momentum as Peru's economy recovers, all while balancing growth in riskier loan segments with asset quality. The recent cancellation of the PEN1.6 billion tax assessment reduces regulatory uncertainty, yet the most important short-term catalyst, continued growth in net interest margin (NIM), remains intact, and the biggest risk continues to be asset quality as retail lending expands. The overall impact of this news on these factors is positive but not transformative.

Among several recent announcements, Credicorp’s updated earnings guidance for the second half of 2025 stands out for investors, as management now expects NIM to be at the upper end of its guided range and has revised the cost of risk lower due to stronger credit quality. This supports near-term earnings strength, aligning with ongoing investment in digital channels and expands on the catalyst of margin improvement from risk management measures. Still, the sustainability of these gains hinges on continued robust portfolio underwriting.

Yet, in contrast to this positive outlook, investors should be aware that risks tied to asset quality in high-growth loan segments may...

Read the full narrative on Credicorp (it's free!)

Credicorp's outlook anticipates PEN26.6 billion in revenue and PEN7.9 billion in earnings by 2028. This implies a 10.2% annual revenue growth rate and a PEN1.6 billion increase in earnings from the current level of PEN6.3 billion.

Uncover how Credicorp's forecasts yield a $243.83 fair value, a 4% downside to its current price.

Exploring Other Perspectives

Fair value opinions from the Simply Wall St Community span a wide spectrum for Credicorp, from S/213.23 to S/324.20 across four user analyses. While updated earnings guidance fuels optimism, the challenge of managing asset quality as retail lending increases will continue to shape performance. Explore multiple viewpoints as you form your own assessment.

Explore 4 other fair value estimates on Credicorp - why the stock might be worth as much as 27% more than the current price!

Build Your Own Credicorp Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Credicorp research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Credicorp research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Credicorp's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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