IFS · Intercorp Financial Services Inc.

Intercorp Financial Services’ 1Q26 earnings reflect broad-based operational strength across all three core businesses. The S/ 601.9 million net profit increase was primarily driven by a S/ 158.7 million YoY reduction in loan provisions—attributed to improved client payment behavior and a cost of risk of just 1.4%, down 140 bps YoY—alongside a S/ 75.0 million YoY rise in net interest income, fueled by higher returns on inflation-linked investments (especially VAC bonds in insurance) and lower funding costs in banking. Banking’s S/ 495.0 million profit (+44.4% YoY) benefited from 9% YoY growth in higher-yielding loans and a risk-adjusted NIM expansion to 4.2%, while Insurance’s +35% YoY written premium growth and Wealth Management’s 13% YoY AuM growth confirm resilient demand for financial services. Notably, the S/ 113.8 million QoQ improvement in recovery (loss) due to impairment of financial investments reflects reversal of a one-off 4Q25 provision related to Rutas de Lima, and the S/ 78.3 million YoY jump in other income stems from FX transaction gains and sovereign bond valuation gains in banking, plus proprietary portfolio mark-to-market gains in wealth management. Operating expenses rose S/ 99.6 million YoY, mainly from technology, personnel, and marketing investments—consistent with strategic growth initiatives. With no forward guidance disclosed, investors should monitor the sustainability of the 1.4% cost of risk and the impact of rising inflation on annuity expenses and funding mix evolution.