Intercorp Financial Services (NYSE:IFS) reported second-quarter 2026 net income of PEN 585 million and return on equity of 18.5%, with management citing continued growth in higher-yielding loans, insurance premiums and wealth-management assets.
Chief Executive Officer Luis Felipe Castellanos said quarterly earnings declined 3% from the prior quarter, largely reflecting the normalization of investment and financial-transaction results following a particularly strong first quarter, as well as a normalization in cost of risk. Still, he said the company remained above its midterm profitability target and was supported by its diversified banking, insurance and wealth-management businesses.
Loan Growth Accelerates in Consumer and Small Business Segments
Chief Financial Officer Michela Casassa said higher-yielding loans grew 12% year over year and nearly 6% from the first quarter. Consumer lending accelerated, with consumer loans rising 9% year over year in June, compared with 5% in March. Cash-loan disbursements rose 37% year over year, while credit-card turnover increased 21%.
Small-business lending continued to expand rapidly, with the portfolio up 31% year over year and disbursements up 54%. Higher-yielding products accounted for 22% of total loans at the end of the period.
Total loans increased 6% year over year, or 7% on an FX-adjusted basis. Commercial loans also gained momentum, supported by the company’s focus on deepening relationships with clients and combining banking and acquiring services.
Management said it expects high-single-digit loan growth for the full year. Castellanos said the company does not expect the potential El Niño event to substantially alter its broader growth trajectory, though it may make targeted adjustments in affected regions and sectors.
Risk Costs Normalize as El Niño Monitoring Continues
Cost of risk rose to 2.1% in the second quarter from an unusually low 1.4% in the first quarter, though it remained below the company’s risk appetite and below the 2.5% reported a year earlier. Casassa said approximately 30 basis points of the sequential increase reflected normalization, while roughly 10 basis points resulted from loan growth and a shift toward higher-yielding segments.
Retail cost of risk increased to 3.3% from 2.7%, while commercial banking cost of risk rose to 0.8%. Management said it was not seeing deterioration in asset quality and that recent consumer vintages were performing in line with expectations.
However, Interbank CEO Carlos Tori said the company could book forward-looking credit provisions in the third and fourth quarters as it gets closer to the expected effects of El Niño. He said the company expects the largest potential impact to be in consumer lending in regions affected by heavy rains, while it does not expect a significant impact among large corporate customers.
Tori said agricultural and fishing clients generally have El Niño clauses in their financing that allow them to defer principal payments during an El Niño year. He added that the current portfolio carries a lower risk profile than it did during the 2023 weather event, which was compounded by post-pandemic conditions, inflation, recessionary pressures and social unrest.
Casassa said cost of risk could continue gradually rising toward 2.5% or slightly above that level due to the mix shift into consumer and small-business products, which require upfront provisioning under IFRS accounting. She said this does not necessarily indicate credit deterioration, as higher-yielding loans also provide higher returns over time.
Margins Face Temporary Funding Pressure
Reported net interest margin faced pressure during the quarter as funding costs increased 20 basis points sequentially to 3%. Management attributed the increase partly to inflation-linked funding, the full-quarter effect of a first-quarter bond issuance, a larger cash position associated with a forward-arbitrage strategy, and conservative liquidity management surrounding Peru’s elections.
Tori said the company held additional liquidity in May and June as a precaution against possible election-related market disruption, though those funds ultimately were not needed. Management characterized the effects as temporary and said cash balances had already normalized after the quarter.
Casassa said the forward-arbitrage strategy increased funding costs and weighed on NIM, but also generated higher financial-transaction income. Financial-operations income rose 26% year over year through June, she said.
Loan yields were stable in the quarter, which management described as encouraging given the move toward higher-yielding products. Tori said the impact of stronger credit-card, cash-loan and small-business originations should become more visible in the following full quarter. The company said it had already seen a partial recovery in NIM and yields during July and expects margins to improve during the second half.
Insurance, Wealth Management and Digital Engagement Grow
Interseguro’s premiums increased 9% year over year, primarily driven by annuities and life insurance. Its contractual service margin rose 10%, while short-term insurance premiums increased 8%. Investment results rose 28% year over year, with return on investment at 7.1%.
Inteligo’s assets under management, including deposits, reached a record close to $10 billion, up 14% year over year. Fee income was broadly stable, but increased 7% on an FX-adjusted basis, according to management.
IFS also highlighted progress in expanding primary banking and digital relationships. Retail primary banking customers increased 16% year over year, while Interbank Plin transactions rose 44% to 234 million. Plin reached 2.8 million monthly active users, and monthly transactions increased 45% year over year.
The company’s cost-income ratio stood at 37%, despite an 11% year-over-year rise in expenses tied to personnel, technology, cybersecurity, infrastructure, data analytics and the expansion of Interseguro’s sales force.
Looking ahead, management expects Peru’s GDP to grow 3.4% in 2026, supported by domestic demand, private investment and consumption. Castellanos said the new administration’s stated focus on investment, security, public-sector modernization and El Niño preparedness was constructive, while cautioning that it remains early in the government’s term.
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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