Credicorp (NYSE:BAP) Margins Improve To 33.5% Reinforcing Bullish Earnings Narratives

Credicorp (NYSE:BAP) has just posted another set of quarterly numbers that keep the focus on earnings power, with Q4 2025 revenue at S/5.4 billion and basic EPS of S/19.9 alongside net income of S/1.6 billion. Over the past few quarters, revenue has moved from S/4.6 billion in Q3 2024 to S/5.1 billion in Q4 2024 and then to S/5.4 billion in Q4 2025. Quarterly EPS shifted from S/14.0 to S/22.4 at the start of 2025 before landing at S/19.9 in the latest period, highlighting trailing earnings and net profit margins as key points of focus for investors parsing this update.

See our full analysis for Credicorp.

With the headline results in place, the next step is to see how these margins, growth rates, and credit trends line up with the prevailing narratives around Credicorp and where the latest figures might start to challenge them.

See what the community is saying about Credicorp

Margins, Profit Growth And Credit Quality

• On a trailing basis, Credicorp generated S/6.9b of net income with a 33.5% net profit margin, compared with 30.2% a year earlier, while non performing loans sat at S/6.8b against total loans of S/148.6b.
• Consensus narrative highlights that expanding digital services and financial inclusion are supporting more resilient earnings, yet the relatively high bad loans ratio of 4.3% means investors still need to balance margin strength against credit risk, especially as loan growth has taken total loans from about S/139.9b to S/148.6b over the disclosed periods.
  • Supporters of the consensus view point to higher client penetration and diversified fee income as helping sustain that 33.5% margin even with a cost to income ratio around 46.6% on the latest trailing figures.
  • At the same time, critics of the bullish angle on digital lending can reasonably flag that the S/6.8b of non performing loans and the 4.3% bad loans ratio leave limited room for error if higher yielding portfolios experience stress.

Loan Book Growth Versus Asset Quality

• Total loans moved from S/141.2b in Q3 2024 to S/148.6b in Q4 2025, while non performing loans declined from S/8.4b to S/6.8b over the same set of reported quarters.
• Bulls argue that expanding into higher yielding retail and microfinance segments through platforms like Yape and Mibanco can support a higher consolidated net interest margin, and the recent move in non performing loans from S/8.4b in Q3 2024 to S/6.8b in Q4 2025 aligns with that view even though the 4.3% bad loans ratio is still above the 2% benchmark cited.
  • Support for the bullish case comes from the combination of loan growth above S/7b over the disclosed periods and a net interest margin around 6.3% on a trailing basis, which together underpin the S/6.9b of trailing earnings.
  • What tempers that enthusiasm is the risk that a shift toward higher risk segments could eventually push the cost of risk higher again, which would show up directly in this S/148.6b loan book if economic conditions soften.

Bulls who see the current credit profile as manageable despite higher risk segments may want to see how that argument is laid out in more detail in the 🐂 Credicorp Bull Case

Valuation Gap And Growth Expectations

• The stock trades at US$316.31 against a DCF fair value of US$427.08 and an analyst price target of US$360.74, while trailing P/E of 12.4x sits above the US Banks industry average of 11.2x but below the peer average of 13.8x.
• Analysts' consensus view points to revenue growth of about 14.7% a year and earnings growth to S/10.0b over the next few years, with profit margins easing from 33.5% to 31.8%, and the current price sitting below both the DCF fair value and the US$360.74 target raises the question of whether the market is discounting those growth assumptions too heavily given that trailing earnings already reached S/6.9b with a 33.5% margin.
  • On one hand, the roughly 25.9% gap between the share price and the DCF fair value, plus an 11.5% gap to the analyst target, lines up with the idea that earnings growth of about 11.1% a year could justify some re rating if it materializes.
  • On the other hand, the higher than industry P/E and an unstable dividend record mean some investors may see the premium to the sector and the 4.3% bad loans ratio as reasons to be cautious about how much weight to place on those growth forecasts.

Skeptics who focus on valuation risks, credit quality and slower forecast growth versus recent history can see how those concerns are framed in the 🐻 Credicorp Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Credicorp on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Given the mix of optimism and concern running through this update, it makes sense to move quickly, review the figures firsthand, and weigh the 3 key rewards and 2 important warning signs

See What Else Is Out There

Credicorp’s higher than industry P/E, relatively high 4.3% bad loans ratio, and unstable dividend record leave some investors questioning its overall risk profile.

If you are concerned about that mix of credit risk and earnings volatility, it is worth quickly checking out 66 resilient stocks with low risk scores to compare stocks with steadier profiles.

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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