20-F: Intercorp Financial Services Reports Strong 2025 Performance

Intercorp Financial Services Inc. (IFS) announced robust financial results for the year ended December 31, 2025, with net profit increasing by 48.6% to S/1,943.2 million.

Summary

• Intercorp Financial Services Inc. (IFS) reported a significant increase in net profit for the year ended December 31, 2025, reaching S/1,943.2 million, a 48.6% rise from S/1,307.5 million in 2024.
• This growth was primarily driven by a substantial decrease in impairment loss on loans, improved other income, better insurance results, and increased net interest and similar income.
• The company's ROE improved to 16.8% in 2025 from 12.6% in 2024, reflecting enhanced profitability across its segments.
• Total assets grew by 3.8% to S/99,097.4 million, while total liabilities increased by 2.5% to S/86,675.6 million, resulting in a 13.1% increase in net equity to S/12,421.8 million.
• Interbank, the banking segment, saw its profit increase by 46.4% to S/1,475.0 million, with an improved ROE of 15.6%.
• Interseguro, the insurance segment, reported a profit of S/274.5 million, a 36.0% increase from 2024, with an ROE of 39.5%.
• Inteligo, the wealth management segment, also showed strong performance with a net profit of S/231.1 million, a 68.3% increase from 2024, and an ROE of 21.5%.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to the significant increase in net profit, improved asset quality, and strong performance across all business segments, indicating effective strategic execution and a healthy financial position.

Positives

• Significant increase in net profit by 48.6% to S/1,943.2 million.
• Substantial decrease in impairment loss on loans by S/583.5 million, leading to an improved cost of risk.
• Strong growth in other income by S/406.3 million, driven by gains on financial assets and investment properties.
• Improved insurance results by S/122.0 million, primarily due to higher CSM release and better performance in the D&S portfolio.
• Increased net interest and similar income by S/80.3 million, reflecting efficient funding strategies.
• Growth in fee income from financial services by S/76.7 million, driven by higher commissions in banking and wealth management.
• Interbank's profit increased by 46.4% to S/1,475.0 million, with ROE improving to 15.6%.
• Interseguro's profit increased by 36.0% to S/274.5 million, with a strong ROE of 39.5%.
• Inteligo's profit increased by 68.3% to S/231.1 million, with an ROE of 21.5%.
• Total assets increased by 3.8% to S/99,097.4 million, with loans growing by 2.8% and financial investments by 4.9%.
• Net equity increased by 13.1% to S/12,421.8 million, reflecting strong retained earnings.
• Interbank's past-due loan ratio remained low at 2.5% as of December 31, 2025, below the banking system average.
• Interbank's total capital ratio was 16.0%, exceeding regulatory requirements.
• Interseguro's solvency ratio exceeded the regulatory minimum, indicating prudent risk management.
• Inteligo Bank's capital ratio was 21.7%, well above the regulatory limit.
• Strong digital adoption across segments, with 83.8% of Interbank's retail customers being digital users.
• Positive recognition for employee development and diversity across subsidiaries.
• Successful integration of Izipay into the payments ecosystem, processing S/71.3 billion in transactions.

Negatives

• Loss due to impairment of financial investments increased by S/216.2 million, primarily due to exposures in Rutas de Lima and Integratel Peru.
• Other expenses increased by S/263.0 million, largely due to higher technology and personnel costs in banking, and increased expenses in insurance.
• Income tax increased by S/215.9 million, reflecting the higher profits.
• Interbank's market share in commercial loans slightly decreased to 10.8% from 10.9%.
• Interbank's retail loans represent a higher percentage (52.9%) of its total loan portfolio compared to the banking system average (40.7%), potentially indicating higher credit risk.
• Interbank's past-due loan ratio in retail and consumer loans was higher than its commercial loans and the banking system average.
• Interseguro's solvency ratio decreased slightly to 120.4% from 125.2% in the previous year, although still comfortably above regulatory requirements.
• Inteligo Bank's loan portfolio decreased by 7.6% to S/1,499.2 million.
• Inteligo's net profit declined between December 31, 2020, and December 31, 2025, due to negative mark-to-market valuations of its proprietary portfolio.

Risks

• Holding company structure where ability to pay corporate expenses and dividends depends on subsidiaries' ability to pay dividends to IFS.
• Subsidiaries are subject to extensive regulation and supervision, and changes in regulations could adversely affect financial condition and results.
• Potential for increased capital requirements and cost of funds due to adoption of new international banking and insurance guidelines.
• Intense competition from other financial institutions and fintech providers, which could adversely affect financial condition and results.
• Failure to anticipate or adapt to emerging technologies or changes in customer behavior could negatively impact financial conditions and results.
• Exposure to macroeconomic shocks in banking and insurance markets.
• Potential losses if Interbank's asset quality declines or if its loan portfolio diversification is reduced.
• Interbank's provisions for loan losses may not be adequate to cover future losses.
• Inability to realize collateral or guarantees securing Interbank's loans could adversely affect results.
• Financial results may be negatively affected by changes to IFRS Accounting Standards.
• Financial results may be negatively affected by investment losses.
• Interest rate changes could materially adversely affect financial condition and results of operations.
• Interseguro is exposed to the impact of changes in interest rates on other comprehensive income.
• Actual mortality and morbidity rates may differ from assumptions in calculating technical reserves, potentially affecting Interseguro's financial condition.
• Interbank may not be able to obtain the funding required to support growth and implement its strategy.
• Reduction in subsidiaries' credit ratings could increase borrowing costs and make raising new funds more difficult.
• Interseguro's failure to accurately underwrite and price insurance premiums could adversely affect financial condition and results.
• Reliance on Peruvian sovereign and global bonds in investment portfolios leaves IFS vulnerable to default on such debt.
• Interseguro may suffer losses in its investment portfolio due to risks associated with real estate investments.
• Tax exemptions applicable to Interseguro's investment earnings could change in the future.
• Dependence on key personnel for operations and growth.
• Interruption, mismanagement, or failure in subsidiaries' information technology systems could adversely affect operations.
• Cybersecurity events could negatively affect reputation or results of operations and may result in litigation.
• Subsidiaries are susceptible to fraud, unauthorized transactions, and operational errors.
• Existing insurance coverage may be insufficient, and future coverage may be difficult or expensive to obtain.
• Organized labor actions, including work stoppages, could adversely affect business.
• Misappropriation or challenge of trademarks and trade names.
• Failure to comply with anti-corruption, anti-bribery, anti-money laundering, and antitrust laws could damage reputation or expose to penalties.
• Subject to litigation and other legal, administrative, and regulatory proceedings.
• Legal restrictions on clients may reduce demand for services.
• Risk management structure may not be fully effective.
• Implementation of global minimum tax laws may increase subsidiaries' tax liabilities.
• Disruptive innovation by fintechs and insurtechs may result in increased competition.
• Transition to a low-carbon economy may adversely affect subsidiaries' results of operations.
• Public health crises and epidemics/pandemics could adversely affect business, financial condition, and results of operations.
• Economic, social, and political developments in Peru, including political instability, social unrest, inflation, and unemployment, could adversely affect businesses.
• Political uncertainty may adversely affect business, financial condition, and results of operations.
• The 2026 general elections in Peru may result in changes to the political landscape.
• Fluctuations in the value of the sol could adversely affect financial condition and results of operations.
• A downgrade in Peru's credit ratings may affect the perception of Peru and its economy, consequently adversely affecting IFS.
• Potential exchange controls implemented by the Peruvian government could adversely affect the ability to pay dividends.
• Increased inflation in Peru could adversely affect the Peruvian long-term credit market and the Peruvian economy.
• The stability of the Peruvian financial system depends on public confidence in Peruvian banking and financial institutions.
• The Peruvian economy could be adversely affected by economic developments in regional or global markets.
• A decline in commodity prices in international markets could adversely affect financial condition and results of operations.
• Market volatility generated by distortions in international financial markets may affect Peruvian capital markets and the Peruvian banking system.
• Operations of subsidiaries could be adversely affected by earthquakes, flooding, or other natural disasters.
• Corruption and ongoing high-profile corruption investigations may hinder economic growth and negatively impact business and operations.
• Changes in tax laws may increase tax liabilities.
• The dollarization of the Peruvian economy hampers monetary policy.
• Potential lack of liquidity and market for common shares.
• The price of common shares may be volatile.
• Future offerings of equity securities may result in dilution of shareholders' interests.
• Significant share ownership by the controlling shareholder may conflict with shareholder interests and adversely affect share price.
• Holders of common shares may have fewer and less well-defined rights than shareholders of U.S. companies.
• Difficulty in enforcing judgments against IFS, its officers, and directors.
• Judgments of Peruvian courts with respect to common shares will be payable only in soles.
• IFS could be considered a passive foreign investment company (PFIC) for U.S. federal income tax purposes, potentially resulting in adverse tax consequences for U.S. investors.
• One or more subsidiaries could be classified as a PFIC.
• Inability to maintain effective internal control over financial reporting could adversely affect results of operations and share price.
• Requirements of being a public company may strain resources and divert management attention.
• Status as a foreign private issuer allows IFS to follow alternate corporate governance standards, potentially limiting investor protections.
• Lack of active following by securities or industry analysts, or unfavorable research, could decline share price and trading volume.
• Future offerings of debt or preferred securities may limit operating and financial flexibility and dilute common share value.
• Peruvian corporations, including subsidiaries, may be jointly and severally liable for unpaid Peruvian capital gains tax related to the transfer of common shares.

Future Outlook

The company anticipates continued growth driven by its digital transformation strategy, focus on key business segments (consumer financing, wealth management, life insurance), and leveraging synergies across its subsidiaries. The Peruvian economic outlook, while subject to political and macroeconomic factors, is generally viewed positively, supporting the company's expansion plans.

Management Comments

• Our purpose is centered around building financial well-being together, by providing profitable solutions and exceptional support to empower our customers to achieve their financial goals and secure a prosperous future.
• We strive to (i) become the leading digital financial platform, with a clear strategic focus on key businesses such as payments, consumer financing, wealth management and life insurance; (ii) place the customer at the center of its decisions, offering a comprehensive suite of services backed by a superior digital experience and analytics as its competitive advantages; and (iii) fostering a unified approach, leveraging the best talent, innovation and a collaborative mindset, as we believe that together, we are stronger.
• We believe our digital efforts are vital to our continued growth and profitability, and for this reason we have been investing in developing the capabilities necessary to offer digital products and services to our customers.
• Risk management has been and remains a primary focus of our operations and at the center of our culture.
• We believe that a motivated workforce leads to high-quality customer service, which leads to satisfied customers and better results.

Industry Context

StockSavvy.ai notes that Intercorp Financial Services operates within the Peruvian financial sector, which is characterized by a growing middle class, low financial services penetration, and a well-capitalized banking system. The company is well-positioned to capitalize on these trends through its diversified business model and strong digital transformation initiatives. Competition from fintechs is noted as a growing factor, but IFS is also leveraging technology and partnerships to enhance its offerings.

Comparison to Industry Standards

• Interbank's ROE of 15.6% for 2025 compares favorably to the Peruvian banking system's average ROE of 19.0% for the same period.
• Interbank's past-due loan ratio of 2.5% as of December 31, 2025, is lower than the Peruvian banking system's average of 3.3%.
• Interseguro's ROE averaged 23.8% from 2021 to 2025, outperforming the Peruvian insurance industry's average ROE of 18.0% during the same period.
• Interseguro's market share in annuities (25.5% by premiums) and individual life insurance (15.9%) positions it as a leader in these segments within Peru.
• Inteligo's assets under management grew at a CAGR of 6.5% between 2020 and 2025, indicating strong growth in the wealth management sector.
• The Peruvian banking system's loans-to-GDP ratio of 30.6% as of December 31, 2025, remains lower than the average ratio of 3.2% for peer countries in Latin America, suggesting continued growth potential.

Corporate Governance

Legal Proceedings

• IFS is not involved in any legal or arbitration proceedings that could have a material adverse effect on its financial position.
• Interbank is involved in certain legal proceedings in the ordinary course of its banking activities, including labor disputes and tax disputes.
• Interseguro is routinely involved in legal or arbitration proceedings with respect to liabilities that are the subject of policy claims.

Related Party Transactions

• Interbank extends loans to related parties, including executive officers and directors, in accordance with Peruvian law and SBS regulations, on an arm's-length basis.
• IFS holds S/39.0 million in bonds of InRetail Shopping Malls, with an annual interest rate of 7.88% maturing in July 2034.
• Interbank has lease agreements with Supermercados Peruanos S.A. (now Compaa Food Retail S.A.C.) for supermarket space and ATMs.
• Interbank has loan agreements with GTP Inversionistas S.A.C. (an affiliate) for the acquisition of UTP shares.
• Interbank has lease agreements with Homecenters Peruanos S.A. (HPSA) for equipment and infrastructure.
• Interbank has loan agreements with HPSA for S/5.0 million and S/9.3 million, and a new agreement for S/80 million.
• Interbank has loan agreements with UTP for S/62.0 million and with IDAT for S/18.0 million.
• Interseguro has usufruct agreements with Colegios Peruanos S.A. (CPSA) for properties in Trujillo and Cusco, Peru, for operating Innova Schools.
• Interseguro has agreements with HPSA and Supermercados Peruanos related to real estate properties.
• Interbank has a loan agreement with Supermercados Peruanos for up to S/200 million.
• Interbank has a club deal loan agreement with Cineplex S.A. for S/320 million.
• Interbank has a loan agreement with P.F. Interproperties Per for S/285 million.
• Interbank has a financial lease agreement with Real Plaza for advertising equipment.
• Interbank has a financial lease agreement with Homecenters Peruanos Oriente for equipment and infrastructure.
• Interbank has a loan agreement with Tiendas Peruanas for S/120 million.
• Interbank has a loan agreement with Intercorp Education Holding Corp. for U.S.$51.1 million.
• San Borja Global Opportunities S.A.C. (Shopstar) has secured two structured financing facilities with Interbank.
• All related-party transactions are evaluated by senior management and the board in accordance with market conditions and transfer pricing regulations.

Stakeholder Impact

• Shareholders benefit from increased net profit and improved ROE, indicating enhanced value.
• Customers benefit from continued investment in digital platforms and improved customer experience.
• Employees are recognized for their development and diversity, with strong workplace culture initiatives.
• Creditors and debt holders are supported by the company's strong capital position and compliance with debt covenants.
• Regulators are assured by the company's compliance with banking and insurance regulations, including capital adequacy and risk management frameworks.

Next Steps

• Continue to focus on digital transformation and enhancing customer experience.
• Leverage synergies between business segments, particularly with Izipay, to expand the payments ecosystem.
• Invest in developing advanced analytics capabilities, including GenAI, to deepen understanding of Peruvian customers.
• Attract and retain top talent by fostering a unique working environment and development opportunities.
• Continue to monitor and manage risks, including cybersecurity and macroeconomic factors in Peru.

Key Dates

Recommendation

The company demonstrates strong financial performance and strategic execution, with significant profit growth and improved key metrics. However, the inherent risks associated with operating in Peru, including political instability and regulatory changes, coupled with the competitive landscape in the financial services sector, warrant a cautious approach. While the company is well-positioned for future growth, the identified risks suggest a 'hold' recommendation at this time, pending further clarity on the macroeconomic and political environment in Peru and the successful integration of recent acquisitions.

Keywords

Intercorp Financial Services, IFS, Interbank, Interseguro, Inteligo, Izipay, Peru, Banking, Insurance, Wealth Management, Financial Services, Form 20-F, SEC Filing, Annual Report, IFRS, Credit Risk, Market Risk, Liquidity Risk, Operational Risk, Capital Adequacy, Digital Transformation, Customer Experience, Financial Inclusion