DATE

Tuesday, Nov. 10, 2026

CALL PARTICIPANTS

• Chief Executive Officer, Intercorp Financial Services - Luis Felipe Castellanos
• Chief Financial Officer, Intercorp Financial Services - Michela Casassa
• Chief Executive Officer, Interbank - Carlos Tori
• Chief Executive Officer, Interseguro - Gonzalo Basadre
• Chief Executive Officer, Inteligo - Bruno Ferreccio

TAKEAWAYS

• Reported Net Income -- PEN 457 million, representing a 22% decrease compared to the previous quarter due to proactive provisioning for the El Nino phenomenon.
• Adjusted Net Income -- PEN 544 million, excluding the PEN 86 million after-tax impact of extraordinary provisions at Interbank and SIP.
• Return on Equity -- 14%, or 16.6% when adjusted for environmental risk provisions, as management maintained its full-year guidance of approximately 17%.
• Higher-Yielding Loans -- 21% growth, driven by accelerating momentum in the consumer and small business segments.
• Net Interest Margin -- 5.1%, expanding 20 basis points in the quarter due to a shift in asset mix toward higher-yielding products and lower funding costs.
• Performing Loan Book -- 10% growth, reflecting stronger credit demand across both retail and commercial sectors.
• Consumer Loan Disbursements -- 44% increase in cash loans and 21% growth in credit card turnover, supported by improving consumer confidence.
• Small Business Loans -- 34% growth, aided by the integration of banking services with the Izipay merchant ecosystem.
• Assets Under Management -- USD 10.1 billion, a 13% increase supported by market performance and net client inflows at Inteligo.
• Written Premiums -- 52% growth, reflecting strong momentum in annuities and individual life insurance products.
• Efficiency Ratio -- 37.8% for the first nine months, remaining within guidance despite a 15% increase in technology spending for cybersecurity and infrastructure.
• Core Equity Tier 1 Ratio -- 11.6%, which management noted remains above internal buffers and upcoming regulatory requirements.
• Total Capital Ratio -- 15.1%, declining from 15.5% in the previous quarter as risk-weighted assets rose 4.2% due to loan growth.
• Digital Penetration -- 86% of retail customers are now digital, which management stated is a primary driver for reducing the cost of funds.
• PLIN Transactions -- 257 million transactions in the quarter, representing 43% growth as the platform expanded its use cases.
• Izipay Ecosystem -- 58% growth in transaction flows to Interbank, with the bank's share of total Izipay flows reaching 48%.
• Cost of Risk -- 1.9% excluding extraordinary provisions, reflecting stable asset quality and positive payment behavior across portfolios.
• Cost of Funds -- 2.9% at the banking segment, a 10 basis point decrease in the quarter driven by a higher mix of low-cost transactional deposits.
• Contractual Service Margin -- PEN 1.2 billion, an 8% increase resulting from higher premium volumes in long-term insurance lines.
• Peru GDP Forecast -- 3% projected for 2027, with management expecting a challenging first half followed by a recovery in the second half.
• Sovereign Bond Demand -- $4.5 billion issued by the Peruvian government with demand reaching fivefold to sevenfold the offering amount.
• Stock Liquidity -- $10 million to $15 million in average daily trading volume on the NYSE, reflecting a significant recovery in liquidity over the last three years.
• Peru Investment Pipeline -- USD 124 billion in projects identified for 2026 to 2030, with mining projects accounting for 52% of the total value.

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RISKS

• Castellanos stated, "We are especially focused on the El Nino event, which we are now assuming that will be an extraordinary magnitude," noting that primary sectors such as agriculture and fishing would be affected.
• Ramat warned that approximately 3% of the total loan portfolio consists of retail and small business loans in regions most exposed to environmental impact, which the company classifies as medium risk.

SUMMARY

Intercorp Financial Services Inc. (NYSE:IFS) reported third-quarter results characterized by growth in higher-yielding loan segments and the continued scaling of its digital payments ecosystem. Management maintained its full-year profitability guidance while taking a proactive approach to risk management through extraordinary provisioning for climate-related contingencies. The company reported a recovery in net interest margins, driven by a shift toward consumer and small business lending and a reduction in funding costs. Operations were supported by a resilient macroeconomic environment in Peru, where private investment and domestic demand reached multiyear highs. The company continues to prioritize its digital transformation, reporting high penetration across its banking, insurance, and wealth management platforms.

• Management identified a shift in credit demand, with Ramat noting that consumer loans increased 18% and outpaced the broader market by gaining 20 basis points of market share.
• Tori indicated that the implementation of TAPP, a platform with functionality similar to the Brazilian Pix system, is expected to accelerate transaction volumes in the first half of 2027.
• The company introduced new security features to its banking app, including "Modo Calle," which management stated is designed to reduce fraud risks associated with phone theft.
• Interfondos expanded its digital adoption, with digital users growing from 30% to 42% of the customer base as the platform transitioned into a digital advisor model.
• Ramat stated, "Peru continues to stand out for the strength of its macroeconomic fundamentals," noting that the country maintains some of the lowest public debt and country risk levels in Latin America.
• The company completed its previous buyback program, having purchased an equivalent of $200 million in shares, and is currently reviewing alternatives for future capital allocation.

INDUSTRY GLOSSARY

• PEN: The Peruvian Sol, the national currency of Peru.
• NIM: Net interest margin, the difference between the interest income generated by a bank and the amount of interest paid out to their lenders.
• ROE: Return on equity, a measure of financial performance calculated by dividing net income by shareholders' equity.
• CSM: Contractual service margin, a component of the carrying amount of insurance contracts representing the unearned profit the entity will recognize as it provides services.
• PLIN: A peer-to-peer digital payment platform in Peru.
• Izipay: A Peruvian merchant acquirer and payment processor.
• SBS: Superintendencia de Banca, Seguros y AFP, the regulatory body that oversees the financial system in Peru.
• CET1: Core Equity Tier 1, a capital measure that includes common stock and retained earnings as a percentage of risk-weighted assets.
• TAPP: An upcoming Peruvian instant payment platform designed to facilitate interoperability between financial institutions.

Full Conference Call Transcript

Operator: Good morning, and welcome to the Intercorp Financial Services' Third Quarter 2026 Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded. [Operator Instructions] It is now my pleasure to turn the call over to Mr. Ivan Peill of InspIR Group. Sir, you may begin.

Ivan Peill: Thank you, and good morning, everyone. On today's call, Intercorp Financial Services will discuss its third quarter 2026 earnings. We are very pleased to have with us Mr. Luis Felipe Castellanos, Chief Executive Officer, Intercorp Financial Services; Ms. Michela Casassa, Chief Financial Officer, Intercorp Financial Services; Mr. Carlos Tori, Chief Executive Officer, Interbank; Mr. Gonzalo Basadre, Chief Executive Officer, Interseguro; and Mr. Bruno Ferreccio, Chief Executive Officer, Inteligo. They will be discussing the results that were distributed by the company yesterday. There is also a webcast video presentation to accompany the discussion during this call. If you didn't receive a copy of the presentation or the earnings report, they are now available on the company's website, ifs.com.pe.

Otherwise, if you need any assistance today, please call InspIR Group in New York on (646) 940-8843. I would like to remind you that today's call is for investors and analysts only. Therefore, questions from the media will not be taken. Please be advised that forward-looking statements may be made during this conference call. These do not account for future economic circumstances, industry conditions, the company's future performance or financial results. As such, statements made are based on several assumptions and factors that could change, causing actual results to materially differ from the current expectations. For a complete note on forward-looking statements, please refer to the earnings presentation and report issued yesterday.

It is now my pleasure to turn the call over to Mr. Luis Felipe Castellanos, Chief Executive Officer of Intercorp Financial Services, for his opening remarks. Mr. Castellanos, please go ahead, sir.

Luis Castellanos López-Torres: Thank you. Good morning, and thank you all for joining us on our third quarter 2026 earnings call. Let me start with the macro environment. In the first half of 2026, private investment grew 15%, its fastest growth since 2012, and domestic demand grew almost 6%, which is the highest since 2013. Exports have reached new historical records, and all of this has come with a prudent fiscal deficit and debt-to-GDP ratio. Business confidence is also at its highest level in recent years. On the political front, we see the executive pushing forward its investment agenda, which is consistent with expectations for a stronger private investment and should help bring Peru back to its medium-term growth potential.

All in all, we are optimistic about what lies ahead for Peru, and we believe the coming years should be positive. In the short-term, we are especially focused on the El Nino event, which we are now assuming that will be an extraordinary magnitude. We expect that impact to be temporary, mainly affecting primary sectors such as agriculture and fishing and -- extending into the first half of 2027. Depending on the strength of the rains, infrastructure primarily in certain regions of the North will be affected. Even so, we continue to expect GDP growth of around 3% next year. We believe the country is well-positioned to return to its medium-term growth path once these effects fade.

In this context, IFS net income was PEN 457 million with an ROE of 14%. These results mainly reflect the provisions that were booked in anticipation of El Nino at Interbank and to a lower extent at SIP, in line with our prudent approach to risk management. Excluding these provisions, net income would have been PEN 543 million with an ROE of close to 17%. As mentioned, we see the impact of El Nino as short-term, while our medium-term view has actually improved. We see our medium-term ROE target to be above 20% now. At Interbank, the underlying business continued to show positive trends. Excluding El Nino provisions, risk-adjusted NIM expanded to 3.9% from 3.5% last quarter.

Loan growth accelerated in consumer and in small businesses, both higher-yielding segments, which is contributing to the NIM expansion. Asset quality is also performing very well with a positive trend. Year-to-date cost of risk, excluding El Nino provisions, is 1.8% and NPLs is at 2%, reflecting the quality of our portfolio and our risk management capabilities. As a result, we believe the bank is better positioned as we enter this El Nino period as compared to the previous ones. We continue to strengthen our payments ecosystem through Izipay and PLIN. These platforms are important levers to deepen our relationships, increase engagement, and support the growth of low-cost funding.

Interseguro maintained strong momentum in its core business while preserving its leadership in annuities. The business continues to leverage synergies with Inteligo and Interbank to advance more integrated solutions for our customers. Inteligo continued to grow at double-digit rate, reaching a new record in assets under management, supported by healthy client engagement and strong advisory model. The investment portfolio had more moderate quarter, but this does not change the trend of its core business. Overall, this quarter shows that we remain on-track in terms of results and profitability, supported by a diversified platform, clear growth opportunities across businesses and a disciplined execution of our model. El Nino event should be a short-term effect.

Our strategy remains focused on profitable growth with the customer at the center of our decisions and continued investments in the capabilities that support long-term value creation, including digital solutions, data analytics, cybersecurity, and GenAI. Looking ahead, we believe IFS is well-positioned to continue growing with discipline while sustaining profitability and strengthening our leadership in Peru over the long term. Now let me pass it on to Michela, who will walk you through this quarter results in more detail. Thank you.

Michela Ramat: Thank you, Luis Felipe. Good morning, and welcome again, everybody, to Intercorp Financial Services' Third Quarter 2026 Earnings Call. I would like to begin with our key messages for the quarter. First, Peru remains resilient ahead of El Nino. Even after incorporating a stronger El Nino, the Central Bank projects GDP growth of 3% for 2027. Second, core earnings maintained a positive growth trajectory. Excluding El Nino-related provisions, net income was PEN 544 million with an ROE of around 17%. Third, accelerating momentum in higher-yielding loans, which grew 21% year-over-year and 10% in the quarter alone. Fourth, NIM recovery on a better asset mix.

NIM expanded 20 basis points to 5.1% and risk-adjusted NIM, excluding El Nino provisions, improved 40 basis points quarter-over-quarter to 3.9%. Finally, insurance and wealth management continued to deliver strong growth with written premiums up 30% in the first 9 months and assets under management up 13% year-over-year. Let's start with our first key message, which is that Peru remains resilient ahead of El Nino. On Slide 4, let me update you on the macro environment. The economy is regaining speed. GDP is tracking around 3.4% in the third quarter based on data through August, up from 2.6% in the previous quarter. Nonprimary sectors continue to support growth.

The Central Bank now expects GDP to grow 3.2% this year and 3% in 2027, below its previous estimates of 3.4% and 3.2%, as it incorporates a stronger El Nino. Growth remains supported by commerce, services, and construction, with exports at record levels. Looking ahead to 2027, we expect a more challenging first half as El Nino would weigh on activity during the summer months. However, we anticipate a significant recovery in the second half, supported by reconstruction spending and the fiscal response. The impact will not be the same everywhere.

The North, the most exposed region, would contract in the first half and rebound in the second, while other regions would be less affected, limiting the impact on overall annual growth. Inflation reached 5.3% in October, remaining above the Central Bank's target range. Core inflation is lower at 4.6%. And excluding transportation, which was affected by fuel prices increases, it would be close to 2%, consistent with the target range. That said, the reference rate has remained at 4.25% over the past year and a rate increase over the next 6 months cannot be ruled out. Overall, Peru continues to stand out for the strength of its macroeconomic fundamentals. Public debt remains among the lowest in Latin America.

Country risk is one of the lowest in the region, and financing conditions remain favorable across the yield curve, supporting a constructive medium-term outlook. On Slide 5. For a bank, what matters is whether this macro recovery translates into credit demand, and we are beginning to see clear signs that it does. Business confidence rose to 69, its highest level in recent years, while consumer confidence reached 50 points. This improving sentiment is translating into stronger spending in investment decisions. In fact, the Central Bank expects domestic demand to grow 6.2% this year and private investment 14%, one of its strongest expansions in more than a decade, with private investment remaining resilient at 8.5% in 2027.

Supporting this outlook is a robust investment pipeline for 2026-2030, totaling USD 124 billion. Mining represents 52% of the total and infrastructure, another 28%, led by projects such as Tia Maria, Trapiche, Pampa de Pongo, Anillo Vial Periferico, de la Sierra Tramo 4. Beyond their direct impact, these projects should continue supporting employment, business activity and financing needs across sectors. We can already see this momentum in the financial system. As of September, loans grew 11.8% year-over-year with retail expanding 13.8%. We are seeing a similar trend in our own portfolio, which reinforces our view that renewed confidence is translating into stronger credit demand. On Slide 6, before turning to the results, let me spend a moment on El Nino.

ENFEN's October update raised the probability of an extraordinary cost at El Nino in the first quarter of 2027 to 55% from 9% in June. So we are facing the possibility of an extraordinary event, and therefore, we decided to provision in line with this scenario. Around 11% of our loan portfolio is flagged as potentially exposed with about 8% through direct exposure to agriculture and fishing, which we consider very low risk, and about 3% through consumer and small business loans in the affected zones, which we consider medium risk. The 8% is made up entirely of commercial clients with direct exposure and all of them already have sent clauses that allow them to refinance or defer payments.

So we do not expect the agriculture and fishing exposure to generate provisions for the bank. On the 3%, retail clients do not have these clauses, which is why we see it as medium risk, but we are ready to support them through rescheduling programs allowed by the superintendency. This quarter, Interbank set aside PEN 185 million in total provisions for El Nino, comprising PEN 81 million of already held under expert criteria and PEN 104 million of additional provisions. SIP recorded PEN 37 million as well, of which 50% or PEN 18.5 million was recognized by IFS. Including our share of SIP, the after-tax impact on IFS net income was PEN 86 million.

This provisioning reflects the scenario we see today, which assumes a stronger El Nino than previously expected, but we will reassess as the event evolves. We are already acting by tracking the exposed portfolio on a daily basis, tightening underwriting standards in the affected areas and supporting our employees in those areas. Once the event has passed, we will be there to support recovery in the affected regions. On the government side, the Ministry of Economy has announced a broad support package that includes additional fiscal funding, cash transfers to affected families, state-backed loan guarantees for SMEs and accelerated public work programs.

Together with reconstruction spending, these measures should help mitigate the economic impact of El Nino and support a stronger recovery in the second half of 2027. Let's now turn to our second key message, which is that core earnings maintained a positive growth trajectory. On Slide 8, in the context of what we just discussed, our core earnings are on the right track. Excluding El Nino-related provisions, net income was PEN 544 million, up 19% year-over-year with an ROE of 16.6%. Compared to last quarter, net income was down 7%, mainly because investment results at Inteligo and Interseguro normalized after a strong second quarter.

Once we include the El Nino provisions at Interbank and SIP, reported net income was PEN 457 million with an ROE of 14%. Overall, setting El Nino aside, the underlying trends remain solid year-over-year and the bank is leading the way. At the bank, the net income, excluding El Nino was PEN 439 million, up 10% from last year and 9% from last quarter, with an ROE of 16.4%. This was driven by higher loan income and lower funding costs, which are also behind the NIM recovery. At Interseguro, net income was PEN 97 million with an ROE above 30%.

That's below an exceptionally strong second quarter, but 2.6x what we reported a year ago when the results included a credit loss provision on financial investments. At Inteligo, net income was PEN 38 million with an ROE of 13.5% as investments return normalized after a very good first half of the year. Importantly, the recurring part of the business is on-track, and fees and assets under management continue to grow. On Slide 9. Looking at the first 9 months of the year, net income excluding El Nino was PEN 1,731 million, up 17% year-over-year with an ROE of 18.1%. Including El Nino, reported net income was PEN 1,644 million, up 11% year-over-year with an ROE of 17.2%.

The important point is that even after absorbing El Nino, we remain in line with our full year ROE guidance of around 17%. On Slide 10, revenues grew 8% year-over-year to PEN 2.1 billion and flat versus the previous quarter. At the bank, the trend is encouraging. Revenues were up 4% in the quarter and 8% year-over-year with NIM recovering to 5.1%, in line with our strategy to grow in higher-yielding loans. We also benefited from lower funding costs, partly offset by lower FX results. At Interseguro and Inteligo, revenues declined versus the previous quarter by 3% and 30%, respectively, due to investment results, which were very strong in the previous quarter.

The underlying trend is moving in the right direction as revenues grew 12% year-over-year at Interseguro, driven by the insurance result and 8% at Inteligo. On Slide 11. Expenses for the first 9 months grew 10% year-over-year, and our cost-to-income ratio was 37.8% compared with around 37% a year ago. The main driver was technology, up 15% versus last year as we continue to invest in cybersecurity, infrastructure, and data and analytics. Personnel expenses are up 14%, reflecting the expansion of Interseguro sales force and key talent that we are adding across the platform. Now let's turn to our third key message, which makes us most optimistic about the coming quarters. On Slide 13.

Our higher-yielding loans, consumer and small businesses are accelerating, growing 21% year-over-year and 10% in the quarter, almost doubling the pace of the previous quarter. In consumer loans, the recovery we anticipated in our last two calls is now materializing. Excess liquidity is normalizing and activity is coming back, supported by better confidence. As a result, consumer loans are up 18% year-over-year and 10% in the quarter, outperforming the market and gaining 20 basis points of market share versus last quarter. In September, cash loan disbursements grew 44% year-over-year and credit card turnover 21%. And so far, we have not seen a pause due to El Nino.

In small businesses, growth continues at an accelerated pace with loans up 34% year-over-year and disbursements up 63% in September. Our business banking app, which brings together Interbank and Izipay, the acquiring business, strengthens our value proposition, and we still see room to continue gaining share. Together, these segments now represent 23% of the performing loan book, which supports NIM recovery. That said, these segments are also the most sensitive to El Nino. So we want to be very clear that we are growing conservatively. We are focusing our growth on zones that we do not expect to be affected by El Nino and on low-risk clients and we have already tightened origination in the exposed areas. On Slide 14.

Our performing loan book grew at a double-digit pace or 10% year-over-year, up from 6% last quarter. In the quarter alone, it grew 4% with good momentum in both retail and commercial. What we like about this growth is that it is broad-based and led by segments with attractive risk-adjusted returns. Starting with retail, we are growing more than 9% year-over-year. Consumer, as previously mentioned, is leading with 18%, and mortgages continue to grow steadily at 8%. The good news is that now mass market is the fastest-growing segment at more than 10%, while the affluent segment is growing as well, but at a more moderate pace. In commercial, we are growing 11%, led by small businesses at 34%.

And I would also highlight midsized companies, which are growing more than 14%. Deepening our relationships and complementing our value proposition with Izipay is helping us grow both in small businesses and midsized companies. Turning to our fourth key message, a NIM recovery on a better asset mix. On Slide 16. The NIM story is positive, and it is driven by lower funding costs and a better asset mix with a higher weight of loans that should keep building in the coming quarters. NIM increased 20 basis points to 5.1% with contributions from both assets and funding. On the asset side, the return on interest-earning assets rose 20 basis points to 7.7%.

Importantly, this came mainly from loan yields, which rose to 9.7%. This marks a change in trend driven by the shift towards consumer and small business loans, which now represent 23% of the performing loan book. At the same time, our asset mix is improving with loans now representing close to 70% of the interest-earning assets. Excluding El Nino provisions, risk-adjusted NIM was 3.9%, which is 40 basis points above last quarter, reflecting our strategy to grow in higher-yielding loans. Including El Nino provisions, it was 3.4%. Looking ahead, we expect the shift in mix towards higher-yielding loans to become a larger driver of NIM together with lower funding costs.

Given the possibility that the Central Bank raises rates, it is worth sharing our sensitivity. For every 100 basis points increase in the soles reference rate, we estimate a negative impact of around 7 basis points on NIM. On Slide 17. Excluding El Nino, cost of risk was 1.9%, below the 2.1% of both last quarter and a year ago. Including it, cost of risk was 2.7%, so El Nino explains the entire increase. The underlying indicators all improved. Delinquencies are declining mainly due to better payment behavior of customers, in line with stronger economic activity. Our recent vintages are also performing well across the portfolio, even with the growth we mentioned in higher-yielding loans.

In retail, excluding El Nino, cost of risk was 3.4%, slightly above the 3.3% of last quarter. That increase reflects the growth of the portfolio. Commercial remained very low at 0.5%, which, together with an NPL ratio of 1.3% shows the portfolio is performing well. El Nino provisions were booked based on expert judgment as we decided to provision for the scenario we see today. We will reassess as the event evolves. Excluding El Nino, we would expect a slight increase in line with portfolio growth in higher-yielding segments while continuing to improve risk-adjusted returns. On Slide 18. The improvement in funding is the other half of the NIM story.

Cost of funds fell 10 basis points in the quarter and 20 basis points from a year ago. This is a result of the mix, which is moving in the right direction as low funding costs increased to 39% of total funding, reflecting our focus on the payments ecosystem, primary banking and transactional deposits. Retail and commercial deposits now represent 85% of funding and the loan-to-deposit ratio is at 93%. On Slide 19, our payments ecosystem connects directly with the funding trends we just discussed. More transactional activity brings more low-cost deposits and creates cross-selling opportunities. In payments, flow from the Interbank Izipay relationships grew 58% year-over-year and Interbank's share of Izipay flows increased to 48%.

In small business, deposits grew 30% alongside 34% growth in loans. Engagement continues to rise. PLIN transactions are up 43% year-over-year and 86% of our retail customers are now digital, which is the engine behind our lower cost of funds. PLIN also keeps expanding its use cases. PLIN TC or PLIN credit cards, which lets customers send money using their credit card line, has already surpassed 100,000 active customers. On WhatsApp, we cut transactions time by 1/3 and transactions per user increased by 17%, reflecting stronger customer engagement and higher recurrence. We are also making the app more useful and safer with tools like Modo Calle, which helps reduce fraud from phone theft.

Clients are noticing with retail NPS reaching 64 points. We are growing while improving the customer experience, which makes that growth sustainable. Let's now turn to our fifth key message on insurance and wealth management, where growth remains healthy. On Slide 21. At Interseguro, the key metric is the contractual service margin, or CSM, which represents the stock of future profits from our long-term insurance business. It reached PEN 1.2 billion, up 8% year-over-year, driven by annuities and individual life, and short-term insurance grew 10% year-over-year. Investment results were PEN 278 million, a 6.6% return, well above last year's 4%, when we recorded credit loss charges on financial investments.

Compared with last quarter, the return is broadly stable, excluding inflation effects. The 7.1% return in the second quarter would have been 6.7%, very much in line with this quarter. Overall, the business is performing well as expected. On Slide 22. At Inteligo, assets under management, including deposits, reached USD 10.1 billion, up 13% year-over-year, supported by market performance and net inflows from clients. Fee income reached PEN 53 million, up 5% year-over-year and 3% in the quarter. This is the recurring part of the business, and it continues to grow alongside assets under management. Overall, Wealth Management continues to deliver resilient growth, supported by a strong advisory model and healthy demand for investment solutions. On Slide 23.

We are bringing the same digital approach to insurance and wealth management. At Interseguro, direct digital sales grew 25% year-over-year to PEN 40 million and 74% of client interactions are now self-service, improving both customer experience and cost to serve. At Interfondos, we are turning the app into a digital adviser. Digital users went from 30% to 42% of customers in a year, supported by accelerated app adoption, which added more than 11,000 new clients versus the same quarter last year. Digital transactions now represent 64% of platform activity, up from 55% last year, while physical transactions continue to decline. Our renewed website and richer content also strengthened our digital ecosystem.

Now let me move to the final part of the presentation, where we bring everything together. On Slide 25. Let me bring together what we have discussed on growth. Our growth is broad-based with retail loans up 9% year-over-year and commercial loans up 11%. Within the bank, our focus is on consumer and small businesses, and this is where growth is accelerating with consumer loans, excluding payroll deductible loans up 18% and small business loans up 34% year-over-year. Beyond the bank, long-term insurance and wealth management keep growing with the CSM of insurance up 8% and assets under management up 13% year-over-year. On Slide 26.

I'd like to close with our 9-month operating trends and how they compare with what we commented at the beginning of the year. On profitability, ROE for the first 9 months is 18.1%, excluding El Nino, or 17.2% on a reported basis. We continue to expect a full year ROE of around 17%, even after absorbing El Nino provisions. On loans, growth is 10% year-over-year, a little bit above the high single-digit growth we expect for the full year. The acceleration in higher-yielding segments gives us confidence. On efficiency, our cost-to-income ratio is around 37%, within our guidance range even as we continue to invest for growth. Let me close the presentation with our key takeaways.

First, Peru remains resilient ahead of El Nino. Second, core earnings maintained a positive growth trajectory. Third, we are accelerating and we have a momentum in higher-yielding loans. Fourth, NIM recovery on a better asset mix. Finally, insurance and wealth management continued to deliver strong growth. Thank you very much. Now we are ready and welcome any questions you might have.

Operator: [Operator Instructions] The first audio question will come from Ernesto Gabilondo with Bank of America.

Ernesto María Gabilondo Márquez: My first question will be on El Nino. So you mentioned that total exposure to El Nino represents roughly 11% of your total loan book. So just wondering how much additional provisions would you require in the fourth quarter and maybe in the first quarter of next year? Just wanted to have an idea on what should be the total provisions that you should consider to El Nino.

Luis Castellanos López-Torres: Ernesto, thanks very much. Yes, you're right. It's -- 11% is -- as Michela mentioned, is potentially exposed, of which 8% is basically commercial loans targeted to fishing and agro industry. As Michela mentioned, that we consider low risk. Those are like solid, experienced, well-capitalized corporations. So we do not expect significant provisions coming there from El Nino. The other 3% potentially exposed is more in consumer and SMEs, also mentioned by Michela. Based on the scenarios we're running and as was mentioned, we're running -- today, we know it's going to be an extraordinary El Nino event. That's what we are considering in our numbers.

So with the information that we have now, that's the level of provisions that we consider we will have. As Michela mentioned, we need to continue monitoring because news continue to change. But if we do have an extraordinary El Nino, as has been mentioned and analyzed during the last couple of months by the analysts, this is what we should have. If conditions change, maybe we, like, overbook provisions if it's not as strong or if something happens that becomes stronger than extraordinary, probably have to reassess at that time. But with the information we have now, that's what we think covers up based on the exposure that we have.

Ernesto María Gabilondo Márquez: Okay. So just to understand, I believe you have created provisions of PEN 185 million to El Nino and that you should not expect additional provisions in fourth quarter for the moment. You will have to evaluate how is El Nino evolving. I just want to double-check these figures.

Luis Castellanos López-Torres: That's correct. PEN 185 million of provisions allocated to El Nino and Interbank, and around PEN 37 million allocated to SIP, which, as you know, has also a consumer book.

Ernesto María Gabilondo Márquez: Perfect. And then just in terms of your cost of risk, if we consider the provisions related to El Nino, how should we think about your cost of risk guidance for this year? And also, you mentioned that even with this impact of El Nino, you expect ROE of around 17% this year. And then how should we think about the ROE trajectory over the next years?

Luis Castellanos López-Torres: Okay. I'm going to pass it on to Michela or Carlos for a deeper view on the cost of risk, particularly. But you're right, even with the El Nino provisions that were unexpected that we have booked already, our expectation is that this year will continue to be at around 17%. So we're not changing our views at the beginning of the year. As you saw, we were having an overperformance. We knew El Nino was coming at -- some time during the year, we figured that out. But we're not changing our view that we will be around 17% for this year.

And as mentioned before, the trajectory of the profitability of IFS will be continuous recovery based on how fast we can rebuild what we've already seen during the second half of this year, the consumer book and the SMEs proportion of loans weighting more over the overall portfolio and maintaining the profitability of the other businesses as we have been doing during the last month. But now, maybe let me pass it on to Carlos or Michela, so they can -- to Michela, so she can walk you a little bit more in detail on the cost of risk evolution and expectations.

Michela Ramat: Thank you, Luis Felipe. Good morning, Ernesto. Let me just comment, Ernesto, that cost of risk throughout the year, excluding, of course, these extraordinary provisions for El Nino has been, I mean, below our expectations. We had 2.1% in the last quarter, and it would have been 1.9% this quarter without El Nino. So basically, what we have been looking at quarter-by-quarter is a better performance of the portfolio than expected given the strong macro backdrop that we have. We commented in the past quarter that as long as the higher-yielding loans continue to represent a higher proportion of the total book, we should start to see that cost of risk to increase.

And we never gave a guidance in terms of cost of risk, but we said we should be getting closer to 2.5% and in the medium term, maybe even above that, okay? So basically, we should see, excluding El Nino, a cost of risk that gradually increases to those levels during next quarter and most likely 2027. That's the story I think we've been discussing in the past quarters.

But the positive surprise has been also this quarter that taking aside El Nino phenomenon, no cost of risk did not increase but it was even 20 basis points better than the previous quarter, which is good news because it means that we are, let's say, facing El Nino, which -- with a much healthier credit portfolio.

Ernesto María Gabilondo Márquez: No, no, perfectly understood in terms of the cost of risk without El Nino, but just to forecast our estimates in the model, cost of risk, including the provisions for El Nino was around 2.7% in this quarter. So for the full year, how should we think about it, including the provisions for El Nino?

Michela Ramat: I couldn't tell you a number, Ernesto, at this point because we need to see what happens in the fourth quarter both without El Nino and with El Nino.

Luis Castellanos López-Torres: I guess if you just add those PEN 185 million to your base number, you will kind of have a good proxy of what the number could be, Ernesto.

Operator: The next question will come from Yuri Fernandes with JPMorgan.

Yuri Fernandes: I have a -- first one. I'll try to move away from El Nino because it has been all the topic, and it's the most important topic. I'm pretty sure other analysts will also ask you more about this. But just on funding, guys, your margin, they were good, but the funding cost was down. And it was not clear for me what is driving that. I'm not sure if it was the excess bonds you had in the previous quarters. But the funding cost was down and not that clear why. So if you can explain what happened and if the funding cost for the bank is recurring or not?

And then I have a question regarding capital because I think this quarter, there were some OCI headwinds. You are accelerating loan growth and your RWAs are following the loan growth. But your capital has been coming down, right? Your core capital is now at 11.6%. So if you can remind us how to think about capital, again, given El Nino, all this uncertainty. And I get it that you already did some provisions, but if you want to keep a higher capital position or not into El Nino or not? And if yes, if we should see any change on dividends or any other policy because I think you also did more buybacks this quarter. So first question, funding.

The second question, what should we expect on capital?

Luis Castellanos López-Torres: Okay. Thank you, Yuri, for your questions. I'm going to pass it on to Michela, and then maybe Carlos can complement. But on funding, the quick short answer is our strategy is working. We've been discussing this for a while, but then Michela can give you a little bit of the detail.

Michela Ramat: Thank you, Luis Felipe. Yuri, talking about funding, as you see from the slide, cost of funds was down 10 basis points in the quarter, but also cost of deposits was 10 basis points below the previous quarter. There are a number of reasons, but I would say that the main one is what Luis Felipe mentioned. We continue to grow faster on the low-cost funding elements on the funding base, which comes from retail deposits, transactional deposits, but also small business and midsized companies deposits, which are nonremunerated. So those components are growing double digit and faster than the rest of the funding base.

There was also a small impact because of the -- what you mentioned, the double carry of the bond that -- starting the full October, we don't have. That also helped. But I guess the more medium-term trend is what I mentioned about the strategy. Now of course, going forward, we have some pressure on cost of funds because of what is happening with rates. So we are trying to balance those two forces. Now talking about capital. You described the situation perfectly. And one of the things that kind of changed in the OCI is the non-realized losses that the previous quarter were non-realized gains on the portfolio of sovereign bonds that we have at the bank, okay?

Now just to remind you about our internal policy for both core equity tier 1 and total capital ratio. There are new regulatory limits that go fully in place December 2026 that for Interbank are around 9% core equity tier 1 minimum capital ratio and around 14.2% total capital ratio, okay? So with the levels that you see, we are okay, we are comfortable and we are above our internal buffers. It is important to mention also that with this new regulation in place from the superintendency, there is a much broader differentiation, if you want, in terms of the capital requirements for the different banks in the system.

And that I think is important because as the systemic buffer is different among banks, you will also see minimum regulatory requirements, which are very different between us and the other top banks in the country, okay? In our case, we are in the first bucket of that buffer, which is 50 basis points. But in the case of other banks, that goes up to 150 basis points to 200 basis points. So I think it's important to consider that you will start to see different total capital ratios in the system, but also because the minimum regulatory requirements have a difference of around 150 basis points, okay? So now in any case, we are growing faster than expected.

So we continue to assess our plan -- our medium-term plan in terms of funding. We have more space in the core equity tier 1. As you can see, we are a little bit tighter in the total capital ratio. So we are, of course, in any case, looking at our strategy for 2027.

Luis Castellanos López-Torres: And just to round up, you're right, we completed our approved buyback program, I think, at the beginning of last year or at some point last year. So we completed that program. We have purchased equivalent to around $200 million of IFS shares equivalent. And...

Carlos Tori Grande: Sorry, Luis. I just wanted to complement Michela on the funding part. She explained like the reason for the growth. But what's behind it is the strategy with Izipay and PLIN. As we grow the flows from Izipay, that brings funding, and same with PLIN, we're growing 40%, 50% per year on PLIN transactions, and that translates in more funding. So that's kind of the -- when we speak about the strategy is working, I think that's where it starts. And then obviously, the NPS and everything that we're building in our app helps with the funding.

Yuri Fernandes: No. Great. Super clear answers. If I may, just a final follow-up on the buybacks. You completed the program. Any plans of opening new programs on buybacks?

Luis Castellanos López-Torres: Yes. That's being reviewed right now. Yuri, as you know, we have a positive view on the potential evolution of the shares. So management is ready to recommend that, but we have to balance growth, liquidity to capital as well. So that has not been defined yet, but it's an alternative that we will definitely evaluate at the right time.

Yuri Fernandes: And liquidity, right? Sometimes people ask about the share liquidity as well.

Luis Castellanos López-Torres: Liquidity -- the good thing is that liquidity has improved significantly even after the buybacks. We used to trade, like, as I call it, by appointment. And today, we see like $10 million to $15 million of average daily trading volume in NYSE. So that has come back a long way during the last, I'd say, 3 years.

Operator: The next question will come from Carlos Gomez with HSBC.

Carlos Gomez-Lopez: I have two. And like Yuri, I want to move beyond El Nino. So the first one refers to PLIN. It's obvious that as a platform, it is running behind its competitor today. I mean, this can change in the future. What can you do to make PLIN more competitive in the market? And where do you see this kind of business going forward? And second, more generally, as a management team, you have a public profile, you write in the newspapers. We have a new administration. We have the prospect of stability in government over the next 5 years. What is it that we should be looking for?

What -- are you excited about in terms of changes that we can see with this administration? And what could worry you if it doesn't happen?

Luis Castellanos López-Torres: Sure. For your strategic question, I would like to pass it on to Carlos, who I'm sure can give you a little bit more detail on exactly how we see this.

Carlos Tori Grande: Thank you, Luis Felipe. Hello, Carlos. So on PLIN, the first thing that's important to understand is when you talk about the competitor, I'm assuming you're speaking about Yape. And it's very important to understand that we're not comparing apples-to-apples, right? PLIN is a brand and it's, let's call it, a highway through which payments go through. It's not an app. It's not a separate app. It's not a transaction. So when we talk about PLIN vis-a-vis Yape, most of the things that we do at Interbank, PLIN helps all the other things that we do at Interbank.

For example, the micro loans that Michela mentioned through PLIN TC, that's not something that you're going to see when we speak about PLIN. It's something that you see at the Interbank app, right? When we pay services, you see it in Interbank. When we do digital loans, we see it in Interbank. So what PLIN has helped us with is a lot of engagement and growth in terms of transactions and the -- how deep our relationship with our clients are, but you don't see everything when we talk about PLIN. In terms of transactions, Yape has grown a lot, and they are definitely larger than PLIN.

But our growth over the last couple of years has been 40% in the last 12 months and almost 100% the year before. So we continue to grow. We continue to have deposits coming from this strategy, and we're looking to accelerate constantly. Probably, what's coming in from the Central Bank with TAPP, which is somewhat similar to Pix, is going to be an accelerator, not necessarily for PLIN, but for Interbank and new customers coming in and more transactions. For example, anything we do through TAPP will not be PLIN, but will be Interbank, it's the same customer. So I would say we are very bullish in terms of the next few quarters in terms of payments.

We are waiting -- TAPP should come in line in the first and second quarter of next year and should accelerate. So that's a little bit of how we look at it, the way how we profit from PLIN and how much we invest in growing those transactions.

Luis Castellanos López-Torres: Does that answer your question, Carlos?

Carlos Gomez-Lopez: No, and well, perhaps to follow-up. I mean, obviously PLIN, you do together with the other banks. Are there any new initiatives or new way of doing the business going forward that is different from what you are doing today, or the way it is working with your partners is fine at the moment?

Carlos Tori Grande: So there's a lot of things that we are doing in our app, for example, security for our clients. We're doing Modo Calle. But that's just Interbank, it's not PLIN. I would look at PLIN sort of when you talk about Visa or Mastercard or Amex, it's a rail, okay, through which you do the transaction. So most of the innovation and the strategy and relationship goes through what we do in our app, and there's separation from that. So transactions are running smoother. We've got steps to the transactions, and we're building additional things to that engagement, not necessarily on PLIN, okay?

And then one thing that I forgot to mention, and it's very important, there's a lot of growth coming in from SIP. So SIP is the other subsidiary for IFS, which has a different value proposition, which also uses PLIN, so they can send and receive money from PLIN customers, but that's where probably most of the quick growth will come over the next couple of quarters. So I don't see many new things coming on PLIN because at the end of the day, it is just a transaction rail.

There are a lot of things that we're building in our app that is better for our customers and obviously improves the value proposition and helps us to grow at Interbank.

Luis Castellanos López-Torres: Thank you, Carlos. Just to add, like, probably based on what Carlos was mentioning, it's more like apples-to-apples view will be Yape to SIP than Yape to PLIN. So we can go deeper over that in a different moment. In terms of our views of the political scenario, again, as mentioned before, we're positive. I think that, first, it's a government that has market-friendly view orientation. They're fostering investments, trying to recoup Peru's growth potential as fast as possible and reduce the poverty levels, understanding that there's lots of investments that need to be done, both from the public and the private sector.

And that growth is the way to go around the economy in order to reduce the gaps that the social landscape of Peru has. So that's kind of the overall understanding. We have a constructive view on the way Congress is working now with two chambers. I think that's positive. That brings stability towards what we've seen compared to what we've seen in the last years. So that's also a positive. We do expect this government to remain in place for the next 5 years with Keiko Fujimori to remain in place over the next 5 years given the landscape now. And again, we were hoping for some stability. It's tough when you have so many changes coming in.

So this stability has resulted in increased business and consumer confidence, which translates into a positive view towards more investments and unlocking Peru's growth potential because we have many industries that have significant potential. We can discuss mining. We can discuss energy. We can discuss all the infrastructure that is required. There's always risks, obviously, but we are on the positive side. We're optimistic about what's to come. There's lots of work to do. There's some reforms that need to pass. But overall, our sentiment as expressed before, but also shown in the indicators of the business confidence and consumer confidence I mentioned, is positive.

So I think we are on the right track with lots of work to do for both the public and the private sector.

Operator: [Operator Instructions] Our next question will come from Andres Soto with Santander.

Andres Soto: I have just one question. When I look at your loan book composition, consumer and SME loans now represent 23% of the total portfolio. This has been an important driver for your NIM expansion recently, 20 bps this quarter, if I'm not wrong. But you had mentioned in this call that you are tightening your underwriting to linear exposed regions and expect an impact in terms of loan growth in 2027. How much could this more cautious origination affect the pace of portfolio shift and NIM expansion? And what is -- what are your expectations, generally speaking, regarding NIM also considering the potential for higher rates in 2027?

Luis Castellanos López-Torres: Yes. Okay. Thank you very much for your question. Just to sum up, I mentioned in the previous question, I mentioned consumer and business confidence. But yesterday, Peru had a significant vote of confidence from investors as well, the sovereign placed bonds, $4.5 billion with a demand, like, 5x to 7x that. So that's another view on the confidence that the government is raising towards what we can do in the future. In terms of the specific question about loan growth, NIM expansion and what we see in SMEs and consumer, let me pass it on to Carlos.

Carlos Tori Grande: Thank you, Felipe. Hello, Andres, thank you for your question. Yes, we're at 23%. As Michela said a little bit earlier and we've been saying, we want to go above 25% in higher-yielding loans. We have been growing over the last 2 or 3 months at the rates that we were aiming at. And being able to focus on regions that won't be affected or higher credit ratings. So we should continue with the performance that we've had in terms of growth. It shouldn't affect, El Nino shouldn't affect. Obviously, we need to be very careful in how our models work and how our leads are developed and stuff like that.

But we've been doing that fairly well over the last couple of months, and that shouldn't change in the next few years. So our -- in the next few months, our expectation is for NIM to continue to expand and our growth to be as we have shown in the last couple of months. So short answer is, yes, we can continue to grow at this rate.

Luis Castellanos López-Torres: Andre, just a matter of perspective. This is on the backdrop of very solid economic performance of Peru. In the -- last time, we've had a strong El Nino, extraordinary El Nino close to recession. This time, we do expect Peru will continue to grow at around 3% despite El Nino. So that situation is very different. So we are being cautious, but we do see many avenues of potential growth.

Andres Soto: In that same line ...

Carlos Tori Grande: Thank you, Felipe. Just to complement, sorry, Andres, we're going into El Nino with a very strong portfolio, with very low cost of risk over the last couple of quarters. So a very good portfolio as well, and that helps compared to previous El Nino. So it's a strong backdrop for the country, but also for Interbank in specific. So yes, that will help as well.

Andres Soto: Absolutely. Two follow-ups there. The first one. Based on this scenario, do you think a double-digit loan growth in 2027 is doable given the strong macro backdrop? And the second, once you reach this 25% participation of SME and consumer loans, do you have any idea of what is the NIM that the Interbank or IFS should have?

Luis Castellanos López-Torres: Yes. On your first question, this is not guidance, but the answer is yes, it's doable over strong GDP. We've always said the system should go up between 2x and 3x. So -- and Interbank has always, like, been focused and proven with results that we scratch market share overall. And then on the second part, maybe let me pass it on to Michela, so she can give you a little bit more on that.

Michela Ramat: Thank you, Luis Felipe. And just on the same line of not giving guidance yet, I will not be able to give you an exact NIM number, Andres. But you have seen the first results of the NIM expansion this quarter. So as we have, like, the full year effect during 2027 of what we are building in the portfolio now, and we continue to outgrow, if you want the rest of the credit loan book with the higher-yielding loans, we should continue to see an expansion of NIM even if we don't expect a lot of contribution from cost of funds given the trends of increase in interest rates, okay?

But given yield on loans and the overall return on the interest-earning assets, we should continue to see a NIM expansion. And even if we will also see an increase in cost of risk because of the loan needs, we should also see an expansion of risk-adjusted NIM.

Operator: As there are no further audio questions, I would like to pass the call over to Mr. Peill for any webcast questions.

Ivan Peill: Thank you, operator. No questions have been submitted via the webcast. So I'd like to turn the call back over to you.

Operator: Thank you, sir. And we will conclude the question-and-answer session today. We'll pass the call back over to Ms. Casassa for closing remarks.

Michela Ramat: Okay. Thank you very much. Thank you, everybody, for joining our call. We continue to be positive on the backdrop of El Nino and the macro scenario, and we will see you again in the last quarter conference call in February. Thank you very much.

Operator: This concludes today's conference call. You may now disconnect.

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