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MeneamePeru's largest financial services group Credicorp (NYSE: BAP) reported third quarter net income of US$122mn, up 5.6% on the second quarter and rising 31.4% year-on-year, the group said in its latest earnings release.
Credicorp's ROAE for Q3 was 24.0%, down from 25.6% in 2Q09 but up from 20.7% in 3Q08.
Net interest income totaled US$215mn in the quarter, decreasing 8.1% from Q2 but up 7.0% year-on-year.
Credicorp's main asset, Peru's largest banking player Banco de Crédito (BCP) - and its Bolivian unit - was the largest earnings contributor to the group's third quarter results, with US$90.7mn.
BCP's net loans totaled US$10.4bn at end-September, up 0.5% from end-Q2. In the 12 months through September, loans rose 6.6%, down from 14.2% growth in the 12 months through June.
Assuming Peru's GDP grows 4-5% next year, BCP maintains its prediction of loan growth of some 15% for 2010, with retail possibly being above 15% and wholesale possibly coming in lower, CFO Alvaro Correa told a conference call.
The bank "is preparing itself for sustained GDP growth of about 5% over the next 5-6 years, and we are getting ready in terms of infrastructure, capital and funding," CEO Walter Bayly added.
The past due loan ratio worsened to 1.56% at end-September from 1.39% at end-June and 0.78% at end-September 2008.
Bayly said he expects the ratio to deteriorate further in Q4, but to start improving in the first quarter or first half of next year, as loan book and GDP growth resume.
Provisions, which dropped in Q3 from the previous quarter due to the decreasing rate of loan deterioration, should remain constant for the fourth quarter or increase slightly, he said.
Increased competition will eventually pressure spreads in retail lending, as has happened in corporate lending, but that should not be an issue in the short term, Correa said, adding that the bank will look to make alliances with midsize retailers in the credit card business and to increase distribution channels for microlending.
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