Q1 2025 Intercorp Financial Services Inc Earnings Call
Unknown Executive: Good morning and welcome to the Intercorp Financial Services first quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. Please be advised that today's conference is being recorded.
Good morning, and welcome to the Intercorp financial services first quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. Please be advised that today's conference is being recorded.
Unknown Executive: After the presentation, we will open the floor for questions. At that time instructions will be given as to the procedure to follow if you would like to ask a question. Also, you can submit online questions at any time today using the window on the webcast, and they will be answered after the presentation during the Q&A session. Simply type your question in the box and click submit question.
After the presentation, we will open the floor for questions at that time instructions will be given as to the procedure to follow if you would like to ask a question also you can submit online questions at any time today using the window on the webcast and they will be answered after the presentation. During the Q&A session simply type your question in the box and click submit.
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Ivan Peill: It is now my pleasure to turn the call over to Mr. Ivan Peill from Inspire Group. Sir, you may begin. Thank you, and good morning, everyone.
Ivan Appeal: It is now my pleasure to turn the call over to Mr. Ivan Appeal from inspire group, Sir you may begin.
Ivan Appeal: Thank you and good morning, everyone.
Unknown Executive: On today's call, Intercorp Financial Services will discuss its first quarter 2025 We are very pleased to have with us Mr. Luis Felipe Castellanos, Chief Executive Officer, Intercorp Financial Services.
Speaker Change: Today's call Intercorp financial services will discuss its first quarter 2025 earnings.
Speaker Change: We are very pleased to have with US Mr. Luis Felipe Castellanos, Chief Executive Officer, Intercorp Financial services, Mr. Keller Chief.
Unknown Executive: Ms. Michela Casasa, Chief Financial Officer, Intercorp Financial Services Mr. Carlos Torre, Chief Executive Officer, Interbank Mr. Gonzalo Pesadre, Chief Executive Officer, Interseguro Mr. Bruno Ferrecho, 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.p.
Speaker Change: Chief Financial Officer, Intercorp Financial services, Mr. Carlos Torres, Chief Executive Officer Interbank, Mr. Consult.
Speaker Change: <unk> Chief Executive Officer.
Speaker Change: Mr. Bruno <unk>, Chief Executive Officer, and Kelly go.
Speaker Change: They will be discussing the results that were distributed by the company yesterday.
Speaker Change: There is also a webcast video presentation to accompany the discussion during this call.
Speaker Change: If you didn't receive a copy of the presentation or the earnings report. They are now available on the company's website.
Speaker Change: S Dot com Dot P.
Speaker Change: Otherwise if you need any assistance today. Please call inspire group in New York on 646940, H H Fortunately.
Unknown Executive: Otherwise, if you need any assistance today, please call Inspire Group in New York on 646-940-8843.
Unknown Executive: I would like to remind you that today's call is for investors and analysts only, therefore questions from the media will not be 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 expectation. For a complete note on forward-looking statements, please refer to the earnings presentation and report issued yesterday.
Speaker Change: I would like to remind you that today's call is for investors and analysts only.
Speaker Change: Therefore questions from the media will not be taken.
Speaker Change: Please be advised that forward looking statements may be made during this conference call.
Speaker Change: These do not account for future economic circumstances industry conditions, the company's future performance or financial results.
Speaker Change: As such statements made are based on several assumptions and factors that could change, causing actual results to materially differ from current expectations.
Speaker Change: For a complete note on forward looking statements. Please refer to the earnings presentation and report issued yesterday.
Luis Felipe Castellanos: 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. Thank you.
Speaker Change: 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.
Speaker Change: Mr. Castellanos. Please go ahead Sir.
Speaker Change: Okay.
Speaker Change: Thanks.
Luis Felipe Castellanos: Good morning all and welcome to our 2025 First World Affairs School. First, I want to thank you for attending our call today. We have started the year with a positive sentiment observing stability in the Peruvian economy with several consecutive quarters of growth exceeding 3%. This growth is driven by increased dynamism in sectors that lead to consumption and a sustained momentum of private investment, which is projected to grow by 6.7% year over year as of March 2025. We remain moderately optimistic about the future growth of Peru as private investments and consumption continue their positive trend. Consequently, the forecast for GDP growth is 3.2% according to the Central Bank.
Speaker Change: 2010.
Speaker Change: Areas of school.
Speaker Change: First I want to thank you for attending our call today.
Speaker Change: We haven't started the year with a positive sentiment in the Peruvian economy with several consecutive quarters of growth exceeding 3%.
Speaker Change: This growth is driven by increased dynamism in sector.
Speaker Change: Sounds good.
Speaker Change: Sustained momentum of private investments, which is projected to grow by six 7% year over year as of March 2013.
Speaker Change: We remain moderately optimistic about the future growth of the room.
Speaker Change: Rather than.
Speaker Change: Samsung continue their positive trend.
Speaker Change: Consequently, the forecast for GDP growth is three 2% according to the Central Bank.
Speaker Change: Nevertheless.
Luis Felipe Castellanos: Nevertheless, the four were cautious given that 2025 is a pre-electoral year which could generate some volatility. We are also aware of external factors that could impact global growth, which we expect could be offset by persistent high commodity prices. Moreover, the International Monetary Fund has recently updated its growth estimates, adjusting global growth downward by 0.5%, while increasing Peru's GDP estimate by 0.2%, positioning Peru as one of the highest-growing countries in the region for the year.
Speaker Change: And therefore, we are cautious given that 2035 East Africa electoral year, which could generate some other fees.
Speaker Change: We are also aware of it turns out that drove that could impact global growth.
Speaker Change: We expect could be offset by persistent high commodity prices.
Speaker Change: Moreover, thanks.
Speaker Change: International work.
Thanks, Bob.
Speaker Change: The updated its growth.
Speaker Change: Adjusted gross both Dod walked by 5%, while increasing Bruce GDP estimates by four 2%, whilst ensuring through as one of the highest growing countries every year for the year.
Speaker Change: The first quarter of 2025 was positive Brian Thanks, with our Ottawa exceeding 16%.
Luis Felipe Castellanos: The first choir of the year of 2025 was positive for IFS, with our ROE exceeding 16%. This performance aligns with our expectations and sets us on a path towards achieving our long-term targets. We believe the positive strength should continue throughout the year.
Speaker Change: This performance aligns with our expectations.
Speaker Change: Or a bus towards achieving our long term targets.
Speaker Change: We believe the positive trends should continue throughout the year.
Speaker Change: Indoor back we had a better than expected start to the year, we managed to increase our market share goals strengthening our procedure has the third largest bank in the country.
Luis Felipe Castellanos: At Interbank, we had a better than expected start to the year. We managed to increase our market sharing loans, strengthening our position as the third largest bank in the country. These roles have been mainly driven by our commercial banking business, where we gained over 120 basis points in market share.
Speaker Change: This growth.
Speaker Change: Has been mainly driven by our commercial banking business, where we gained over 100 basis points in market share.
Speaker Change: Moreover, we believe we're on the right path.
Speaker Change: For the recovery of our consumer portfolio.
Speaker Change: So we're seeing more gas loan disbursement, thanks to our improved underwriting standards.
Speaker Change: The more benign macro environment.
Luis Felipe Castellanos: The Morbina Benign Macroenvironment. However, we are not there yet. EasyPay and AngelBank continue to seed business opportunities together, while PLYM keeps increasing the engagement of users, fostering more primary banking relationships and supporting growth. At Interseguro, we have seen relevant growth in our core business, mainly in individual life and annuities, where we continue to be the market leader. Our wealth management segment in Telico continues the positive dynamic with clients as assets and remanagement reach a new all-time high, growing by 16% year-over-year.
Speaker Change: However, we are not there yet.
Speaker Change: Is it based on inter bank continued to see business opportunities together well.
Speaker Change: Increasing the engagement of users.
Speaker Change: History more primary banking relationships supported growth.
Speaker Change: I think we have seen relevant growth in our core business mainly in individual life.
Speaker Change: Where are we where we continued to be the market leader.
Speaker Change: Yeah.
Speaker Change: Our wealth management segment in Danville, Virginia continues the positive dynamic with clients.
Speaker Change: Assets under management reached a new all time high growing by six 2% year over year.
Speaker Change: We want to reaffirm our conviction to place our customers at the center of power to tissue.
Luis Felipe Castellanos: We want to reaffirm our conviction to place our customers at the center of our decisions. As such, our key strategic priority at IFS is to achieve digital excellence for our customers and fostering primary relations. Our ambition is to become a leading digital platform with a clear focus on key businesses and profitable growth, always providing a comprehensive suite of services supported by a world-class digital experience and leveraging analytics as our competitive advantage.
As such our E. Mr. <unk> priority is.
Speaker Change: To achieve this.
Speaker Change: Excellent for our customers.
Speaker Change: Turning to primary relationships, our ambition is to become a leading ddos attacks.
Speaker Change: With a clear focus on key businesses and profitable growth.
Speaker Change: The way to providing a comprehensive suite of services supported by a world class user experience and leveraging analytics.
Speaker Change: Advantage.
Luis Felipe Castellanos: Going forward, we continue to be optimistic about IFS's trust. which have proven to be resilient to the bottom part of the credit cycle. Our outlook on the back of the continued expected recovery of produced fundamentals is positive. As such, we continue executing our long-term strategy.
Going forward, we continue to be optimistic about <unk> prospects.
Speaker Change: Which has proven to be resilient through the bottom part of the credit cycle.
Speaker Change: Our outlook on the macro but continue to expect different golar listen demand is positive.
Speaker Change: We continue executing our long term strategy.
Michela Casasa: Now let me pass it on to Michela for further explanation of this quarter results. Thank you. Thank you Luis Felipe.
Now, let me pass it onto Micaela for further explanation of this quarter's results.
Speaker Change: Yes.
Micaela: Thank you Lisa good morning, and welcome.
Michela Casasa: Good morning and welcome again everyone to Intercorp Financial Services 2025 first quarter earnings call. We would like to start with our key messages for the class. First, we had a solid start to the year as we observed a good trend in earnings and profitability. Our net income reached 446 million soles at IFF level and ROE exceeds 16%. Second, we are strengthening our commercial and payments ecosystem as Interbank's share of EasyPay flows now stands at 40% allowing us to increase our market share in commercial banking by more than 120 basis points in the last year. Moreover, our consumer portfolio has stabilized in the past two quarters and started to grow back in the last three months including April.
Micaela: And then everyone sees about financial services anything.
Micaela: First quarter earnings call.
Micaela: We would like to start with our key messages for the question.
Micaela: Okay.
Micaela: First we had a solid start to the year.
Micaela: Have a good trend in earnings and profitability.
Scott: Sure Scott.
Micaela: Fee income reached 446 million I'm sorry.
Micaela: And that really exceeded 16%.
Micaela: Yes, Anthony local national and payments ecosystem as indirect channel shows now stands at 40%.
Micaela: We actually increased our market share in commercial banking by more than 120 basis points in the last year.
Micaela: Model there.
Micaela: C&I portfolio.
Micaela: I've asked to bloggers and started to grow back in the last three months.
Micaela: Yeah.
Micaela: So I'm quite different cost of risk stood at two 8%.
Michela Casasa: Third, our quarterly cost of risk stood at 2.8%, which is 190 basis points below last year. Although it is 20 basis points higher than the previous quarter due to the Telefónica impact on provision. Excluding this effect, the cost of risk would have been 2.5%, driven by the constant reduction in the retail cost of service.
Micaela: Is 190 basis points below last year.
Speaker Change: No. It is spending on China, because they just weren't guaranteed to get that fully got impacted.
Micaela: Excluding these effects the cost of risk would have been two 5% you mean anything at both the national in the regain question. Please.
Micaela: For the cost of funds remained stable this quarter, although showing an improvement on a year over year basis.
Michela Casasa: 4. The cost of funds remains stable this quarter, although showing an improvement on a year-over-year basis of 80 basis points. This improvement is primarily due to a fast repricing and improving funding mix. We are increasing primary banking relationships through a top digital experience. As a result, our retail primary banking customers grew 15% in the last year. Six, we have continued with strong growth in our insurance and wealth management core businesses. The retail premiums grew 36%, driven by annuities and life insurance, and assets under management grew 16%. Finally, this result includes an impact of around $104 million in provisions due to telephonic deterioration.
Micaela: 80 basis points.
Micaela: This improvement is primarily due to a faster as pricing and equally for Denise.
Micaela: We are increasing 519 relationships. So adult digital experience as a result, our retail partner that came back to my new 15% in the us.
Micaela: The last year.
Micaela: We have been dealing with strong growth in our insurance wealth management automation system. The weekend premiums grew 36% driven by annuities and life insurance and assets under management view, 16%.
Micaela: Finally these results include a variety of.
Micaela: 144 million.
Micaela: Alicia yield calculation.
Michela Casasa: Even including this effect, the results are above our expectations, marking a strong starting point for the year and setting us on the path to our medium-term ROE goal.
Micaela: E N E.
Micaela: Including this effect.
Micaela: At all our expectations, marking a strong starting point for the year in city national deposits to our medium term or legal.
Micaela: Let's start with our first key message.
Michela Casasa: Let's start with our first image. On slide four. The improvement in macroeconomic indicators has been steady over the last 12 months, primarily driven by investment and consumption. Consequently, GDP grew around 3.5% for the first two months of the year, marking several consecutive quarters with growth above 3% as Felipe mentioned. Over the past year, most sectors have experienced growth with the most significant contributions coming from manufacturing, trade, other services, agriculture, and fishing. In February, the primary sector contributed 2.3%, while the non-primary sector contributed 2.5%. Regarding monetary policy, the Central Bank has successfully controlled inflation, anchoring it within its target range, with an expectation of 2% for 2025.
Micaela: On slide four.
Micaela: The improvement in macroeconomic indicators have been steady over the last 12 months, primarily driven by investment and consumption.
But separately GDP grew around three 5% for the first two months of the year, marking seven consecutive quarters with growth above 3% and image.
Micaela: Over the past year, most sectors, having seen is built with the most significant cancellations coming from manufacturing.
Micaela: Are there Saturday is agriculture is issue you.
Micaela: He said very fragmented sector contributed two 3% when they know private sector contributed to by 5%.
Micaela: Regarding monetary policy the Central Bank has successfully controlling inflation I'm pleased with the targeted range, we had expectation of 2% from plays an impact there.
Michela Casasa: The Central Bank has been proactive in managing the reference rate as yesterday it surprised the market cutting an additional 25 basis points standing now at 4.5% with no spread above the Fed rate. Additionally, the currency has remained steady throughout the year. Both inflation and the exchange rate are expected to remain stable in 2025. Looking ahead to 2025, the Peruvian economy is projected to grow by around 3.2%. This growth is anticipated to be stronger in the first half of the year due to the pre-electoral period, which typically reduces the dynamism in the second half. Additionally, the IMF updated its growth estimates, increasing Peru's growth by 20 basis points to 2.8%, despite reducing global growth by 0.5%.
Micaela: The Central Bank has been proactive in managing that reference base.
Speaker Change: Yes, they get surprised the market caviar, and additional 25 basis points and we know the Barclays, 5% with no spread out all right.
Speaker Change: Additionally, it carries he has many states allow me here, both inflation and exchange rate are expected to remain stable.
Speaker Change: Hi.
Speaker Change: Looking at it is there anything besides that.
Speaker Change: <unk> economy is predicted to will that at around three 2%.
Speaker Change: This growth is anticipated to be stronger than the first half of the year due to the extra.
Speaker Change: We see because we view it.
Speaker Change: I mean, assuming the second half.
Speaker Change: And is there any the IMS data needs grow estimates, increasing there was growth by 20 basis points to two 8%, despite reducing billing growth by 5%.
Speaker Change: On slide five consistent with the previous one indicators show optimism in the labor market and private investment what are the key drivers for growth has been the improvement in branded consumption.
Michela Casasa: On slide five, consistent with the previous one, indicators show optimism in the labor market and private investment, while a key driver for growth has been the improvement in private consumption. Consumer confidence continues its positive trend, aligning with economic optimism and labor market recovery. As of February, formal employment and real formal wages have shown a year-over-year growth, positively impacting private consumption. Business trust has remained stable and positive throughout the year. The Central Bank's latest report anticipates private investment to grow by 4.1 in 2025, reflecting a more optimistic view of the Peruvian economy. Analysts estimate a 6.7% growth in private investment in the first quarter.
Speaker Change: Consumer confidence continues its positive trend, allowing me with economic optimism and labor market recovery.
Speaker Change: February 12, unemployment you reaffirmed their wages have shown a year over year growth positively impacting.
Speaker Change: Sure.
Speaker Change: This trust has remained stable and positive throughout the year the central Bank's latest report anticipates private investment to grow or why did you place any.
Speaker Change: Reflecting a more optimistic view of the Peruvian economy.
Speaker Change: And it is estimated at six 7% growth in private investment in the first part.
Michela Casasa: Regarding mining, several projects are planned for the upcoming years with total investments expected to surpass $50 billion by 2028. Some examples include Pia Maria and Llana Cota. According to ProInversión, there are more than 80 infrastructure projects in the pipeline for the next two years, with an estimated total investment of $17 billion, mainly in the transportation and telecom sector. Finally, although the fiscal deficit is above 3% of GDP, it is still better when compared to the region, and the expectation for it is to return to 2.2%, which is within the fiscal group.
Speaker Change: We know there's Miami save that projects are planned for the upcoming year, we felt that investments expected to surpass 50 million last may 2028.
Speaker Change: Some examples include PMA yet Indianapolis.
Speaker Change: According to Braemar ACM, there are more than 80 infrastructure projects that I named for the next two years with an estimated total investment of $17 billion, mainly in the transportation and telecom sectors.
Speaker Change: Finally, although this fiscal deficit is above 3% of GDP is still dead when compared to the region and the expectation for it to return to two 2%, which is lithium if he's got it.
Speaker Change: On slide six we are carefully monitoring the evolution of economic policy in the United States, which is generating an uncertainty in the business environment.
Michela Casasa: On slide six, we are closely monitoring the evolution of economic policy in the United States, which is generating uncertainty in the business environment. In this context, we wanted to review the current status of Peru's trade. Firstly, it is important to note that the United States is no longer Peru's primary commercial partner, but the second, representing approximately 13% of our total exports. Secondly, our main export products to the United States are agricultural goods, which have low price sensitivity. Therefore, we do not anticipate a significant impact of these products from tariffs. Finally, our main export products, copper and gold, remain at high historic levels in terms of price, which should provide additional support for investment and GDP growth.
Speaker Change: If we wanted to reveal at Carlin steps right first.
Speaker Change: Firstly it is important to note in the United States is no longer boots gradually commercial partner.
Speaker Change: Representing approximately 13% of households on exports.
Speaker Change: Currently our main export products to the United States.
Speaker Change: Cost of revenues, which have no right.
Speaker Change: Therefore, we do not anticipate a significant impact of this.
Speaker Change: Hi, Betty our main export problems copper and gold remain at high She's Snowy Atlanta, Denver, right, we should provide additional support for investment in GDP growth.
Michela Casasa: We believe that in the short term, the direct impact of these policies will be mild. However, as the trade war escalates and affects global growth, it could have repercussions in Peru's growth for 2026 and beyond.
Speaker Change: We didn't need that in the short term the direct impact of these policies will be mine.
Speaker Change: However, as the trade war escalates and FX global growth equal have repercussion, Peter whose growth for Chinese any seats Emil.
Speaker Change: Yes.
Speaker Change: On slide seven is a movie from themselves and the boost out of the year for and he says I actually said she survey from 446 million would you say one to two times last year.
Michela Casasa: On slide 7, and moving to the results in the good start of the year for IFS, IFS achieved earnings of $446 million, which is 3.2 times last year's results. The ROE reached 16.3%, surpassing our short-term expectations and setting us on a path towards our medium-term ROE goal. The year-over-year improvement is primarily linked to banking results, as both the cost of risk and the cost of funds have significantly declined. Furthermore, insurance results had a positive quarter when compared to the negative first quarter of 2024. In banking, during the last quarter, net income has remained stable, which is positive, considering the seasonal effect on banking results in the fourth quarter due to the high level of activity in December of every year, and to the fact that in the first quarter of 2025, we had around 41 million impact related to our indirect exposure to telecom.
Speaker Change: Seattle reached 16, 3%, surpassing our short term expectation and setting that up.
Speaker Change: Neither of them are legal.
Speaker Change: The year over year in Gooseneck, and Mary Lynne to actual results at both the cost of risk and the cost of funds has.
Speaker Change: Has significantly declined.
Speaker Change: Furthermore, insurance itself had at all at this quarter when compared to the first quarter of plenty plenty for us.
Speaker Change: Imagine during the last quarter net income has remained stable, which is supposed to be senior in this seasonal effect on banking results in the fourth quarter into the high level of BBB BB Sandor every year is the fact that in the first quarter 'twenty go any higher.
Speaker Change: Around 41, Neely, that's related to our indirect exposure to California.
Speaker Change: In the insurance business of core operations, we need so we didn't do it this in life insurance continued to grow this.
Michela Casasa: In the insurance business, our current operations remain solid, with annuities and life insurance continuing to grow. Moreover, this is the first quarter where the disability and survivorship premiums acquired from the Peruvian private pension system start. The increase in earnings in the first quarter of 2025 is also attributed to a good performance in their portfolio, despite the impact of around 63 million due to telephony. Finally, in the wealth management business, the positive dynamics with clients continues. Additionally, investment portfolio performed well on a year-over-year basis.
Speaker Change: Well it doesn't when did you sell these guests providing sheet premiums acquired from the premium private patients and staff.
Speaker Change: Increasingly our at least in the first quarter.
Speaker Change: He is also actually needed to enhance their pharmacy networks all over.
Speaker Change: Despite maybe around 63 million due to the firm.
Speaker Change: Finally in the wealth management business the positive dynamics as guidance on these.
Speaker Change: Additionally, investment portfolio performed well on a year on year basis.
Speaker Change: On slide eight we have positive news as revenues increased 14% in the last year.
Michela Casasa: On Friday, we have positive news as revenues increased 14% in the last year, a good performance in the three operating companies. First, we see 37% increase in revenues from Interseguro as we see most of their business lines, highlighting that the disability and violence mentioned before came into effect. Second, there has been an important improvement in revenues at Interbank on a year-over-year basis, driven by a reduction in the cost of funds and increase in fee income and other expenses. Finally, we continue to see strong performance in the core business at Telego, with better returns from the investment portfolio compared to the previous year.
Speaker Change: Performance in the three operating companies.
Speaker Change: First we see 37% increase in revenues from the desk of Hulu as you see most of their business line highlights and then examining.
Speaker Change: Nationally for gaming.
Second there has been an important improvement where he is in their background.
Speaker Change: Driven by a reduction in the cost of funds and increase in fee income and other.
Speaker Change: Finally, we continue to see strong performance in the core business and you grow with better return from the investment portfolio.
Speaker Change: Yes.
Speaker Change: To conclude this section I would like to share with you the key businesses in which we have focused our growth efforts.
Michela Casasa: To conclude this section, we would like to share with you the key businesses in which we have focused our growth efforts. We continue to see strong growth in our commercial business, showing a 19% year-over-year increase. Moreover, small businesses have shown a 60% increase in loans and an 18% growth in deposits. Both have been boosted by our synergies with EasyPay, the strong focus on sales financing, as well as our digital capability. On the retail side, consumer loans, excluding payroll deductible loans, have stabilized. Meanwhile, mortgages are showing a 7% increase, gaining market share and now ranking number 3 in the system.
Speaker Change: We continue to see strong growth in our commercial business, showing a 19% year over year basis.
Laurel: Laurel that small businesses have shown 60% increase in jobs in an 18% growth in deposits.
Laurel: Both have been boosted by a synergies with E Bay, a strong focus on sales financings as well as our bogie that's easily.
Laurel: On the legal side consumer loans, excluding payroll deductible loan has stayed at lax. Meanwhile, mortgages I'm showing a 10% increase gained market share and now ranking number three indices.
Laurel: In insurance, we continue to grow our contractual service margin.
Michela Casasa: In insurance, we continue to grow our contractual service margin 27% in the last year, as long-term insurance such as life insurance, annuities, and credit life show a positive path. Finally, Wealth Management will continue to grow with assets under management, increasing 17% in a year-over-year basis.
Laurel: 7% in the last year.
Laurel: As long term insurance, such a strike insurance I'm really really life. So a positive start.
Laurel: Finally, with my listening will continue to grow with assets under management, increasing 17% in a year over year basis.
Laurel: Now, let's move let's move on to our second key message.
Michela Casasa: Now let's move on to our second key message. Over the last quarter, we have observed a significant change in trend in the credit cards and personal loans portfolio, as the last three months, including April, have shown growth. Our focus has been on exploring different growth avenues within specific sectors. Additionally, we have seen a reactivation in cash loan disbursements, which have increased by 27%, and credit card turnover, which has risen by 11% over the past year. We are growing with a better risk profile as we can see from the constant improvement in cost of risk of retail during 24 and 2025.
Laurel: Over the last quarter, we have observed a significant change in trend in the credit cards and personal loans portfolio.
Laurel: The last three months, including April has shown growth.
Laurel: The focus has been on exploring different growth how they use within specific segments.
Laurel: Additionally, casting a reactivation in personal disbursements, which have increased by 27% and pay cuts or NOLA, which has risen by 11% over the past year.
Laurel: We are growing we have better return profile and we can see from the constant improvement in cost of risk of retail unit 24, a 2035.
Michela Casasa: The enhancement of our internal models, including customers and 3D division is allowing us to address growth in a healthy manner. On slide 12, we observe a year-over-year total loan growth of 8.2% in a context where the overall market has grown only around 2%. On the retail side, we experienced nice growth in mortgages, with around 7% year-over-year. The consumer portfolio has still decreased by 4.8% on a yearly basis, although it has been stable in the last two quarters. The Commercial Loan Book experienced significant growth this year. With a 19% year-over-year increase, it has gained relevance in the mix, rising from 44% to 48%, getting closer to our 50-50 balance portfolio target.
Laurel: The enhancement of our endeavor into my modest utility customer consolidation is allowing us to address growth in ssds.
Laurel: On slide 12, we have survey year over year loan growth both of loan growth of eight 2% in a context will be OLED market has grown only around 2%.
Laurel: On the retail side, we experienced nice growth in mortgages with around 7% year over year.
Laurel: Consumer portfolio has still decrease I historically, they have sustained on a yearly basis, although it has been stable in the last two quarters.
Laurel: The commercial loan book experienced significant growth this year with a 19% year over year increase it has gained relevance and Denise right right things from 48, 44% to 48% getting closer to a 50 50 balance portfolio.
Michela Casasa: During 2024, we leveraged the Impulso Mi Perú program, although we did not use the program in the first quarter of 2025. Mid-sized companies gained over 270 basis points in market share, now consolidating as third in the market. Sales Finance remains one of our key products, with market share growing from 16.9% just 12 months ago to more than 18%, ranking second in the market. Therefore, the Commercial Banking portfolio has outperformed the system, gaining 120 basis points in market share, reaching almost 11%, which is our all-time high. As part of our strategy, we continue to strengthen our payment ecosystem with PLYN and EasyPay.
Laurel: During 'twenty 'twenty four we let leverage Steve Buscemi day, who brought with them. Although we did not use the program in the first quarter of 2020.
Speaker Change: <unk> companies gain over 270 basis points in market share now consolidating.
Laurel: In the market.
Laurel: Sales finance remains one of our key products with market share growing from 16, 9% just 12 months ago to more than 18% ranking secondly demand.
Laurel: Therefore, a commercial banking portfolio has outperformed the system, gaining 120 basis points in market share, reaching almost 11%, which is our all time high.
Laurel: As part of our strategy will continue to strengthen our payment ecosystem with clean and easy date. We have continued working to generate further synergies as we encourage the growth of our payment ecosystem focusing on increasing transaction volumes often not just value added Saturday says it using.
Michela Casasa: We have continued working to generate further synergies as we encourage the growth of our payment ecosystem, focusing on increasing transaction and volumes, offering merchant value-added services, and using EasyPay as a distribution network for interbank products as well as a source to increase flow. In this manner, our digital retail customers have grown by 16% and our billing active users by 20% over the last year. Moreover, EasyPay Yard and EasyPay continue to gain traction with volumes from EasyPay Yard increasing 2.x times, resulting in more flow coming to Intervax. Consequently, small business and deposits have grown by 18%, and interval share of easy-paced flows now stands at 40%.
Laurel: EC pay as a distribution network for interbank boats as well as those two please.
Laurel: In this manner on digital media customers have grown by 16% and our active users by 20% over the last year.
Laurel: Motorola and yet they continue to gain traction with boys from Egypt, ADR, increasing two point X.
Laurel: Resulting in more flows coming to interact.
Laurel: But these well it means that the deposits have grown by 18% and integral share of Egypt based loans now stands at 40%.
Laurel: As a result of their senior news nation, we see positive trends in four key indicators.
Michela Casasa: As a result of the synergies mentioned, we see positive trends in four key indicators as you can see in slide 13. Around 30% yearly increase in easy pay cash flow coming to interbank accounts and 52% increase in flow from merchants. And 2.8 times yearly increase in transactional volumes and 66% growth in flow from micro-merchants thanks to easy pay apps.
Laurel: As you can see in slide 13 around 6% yearly increase in the cash flow.
Laurel: Okay.
Laurel: <unk>, 2% increase in drop from that.
Laurel: Two eight days still increase in transactional volumes and 66% gross inflow from micromanaging phase III.
Laurel: Following the third message, we continue to see a positive trend in cost of risk.
Michela Casasa: Following with the third message, we continue to see a positive trend in cost of return. On slide 16, we wanted to highlight that the cost of risk and NPLs continue to be at low levels at 2.8% and 2.5% respectively. If we exclude the Telefónica effect, the cost of risk would have been 2.5%, continuing the positive trend in this indicator. In general, both indicators have followed a downward trend over the last year, thanks to the improvement in economic indicators and better payment behavior from price. The main driver for this positive trend has been the improvement in the retail risk profile.
Laurel: On slide 16, we wanted to highlight that the cost of risk and Npls continue to be at low levels.
Laurel: 8% in two to two 5% respectively.
Laurel: If we exclude the debt at 40 days that the cost of risk would have been two 5% continuing a positive trend in these indications.
Laurel: Yeah, Oh can you gave us a total of a downward trend over the last year, thanks to the improvement in economic indicators and vendor payment behavior from clients.
Laurel: The main driver for this positive trend has been the improvement in the return risk profile over the last 12 months cash investment alone has decreased.
Michela Casasa: Over the last 12 months, credit cards and personal loans have decreased in size, now representing 18% of the total loan book, down from 22% a year ago. The new vintages are healthier, as the better macro environment is having a positive impact on the payment behavior of our customers. This has allowed the cost of rent from retail to reduce consistently during the last 12 months to 4.1%, which is 380 basis points below the levels of a year ago. Regarding commercial banking, the cost of risk was impacted by provisions made due to letters of guarantee held by telephony.
Laurel: E choice now representing 18% of the total loan book down from 22% a year ago.
Laurel: The new vintages are healthier as they met their macro environment is having a positive impact on the payment behavior.
Laurel: This has a lot of concentrates from rebates readout, we use consistently during the last month or two.
Laurel: Four 1%.
Laurel: 380 basis points below the levels of a year ago.
Laurel: Regarding commercial banking, the Costa fleet costs impacted by Felicia's, Nate to due to legacy Berry emailed in California.
Michela Casasa: Excluding this effect, the cost of risk would have been 0.3%. This segment has performed well over the last year, with approximately 11% of the commercial portfolio backed by guarantees from the Impulso Mi Perú program. Finally, the NCL coverage ratio has remained stable above 140%. On slide 17, NIM has remained relatively stable while risk-adjusted NIM improved by 120 basis points on a year-over-year basis in line with the improvement in cost of risk mentioned in the previous slide. The risk-adjusted NIM excluding the Telefonica effect has remained stable in the last quarter. There continues to be an impact on yields due to the lower market rates and the shifts of the loan book market.
Laurel: <unk> is in fact, the cost of risk would have been 3%.
This segment has performed well over the last year with approximately 11% of the commercial portfolio backed by narrative from the flu suddenly Pedro.
Laurel: Finally, the NPL coverage ratio has remained stable above 140%.
Laurel: On slide 17, Nee has remained relatively stable when risk adjusted NIM improved 920 basis points on a year over year basis in line with improvement in cost of live nation in the previous slide.
Laurel: The risk adjusted NIM, excluding the 48 states has remained stable in the last quarter.
Laurel: Therefore, there continues to be an impact on gms mutually lower market rates and the shift of the loan book mix.
Michela Casasa: Consequently, we see lower kingdom loans of 80 basis points in the annual comparison, reaching 10% by the first quarter. This trend should improve as we continue to grow the consumer portfolio.
Laurel: Secretly we see lower you know loans was 80 basis points, Indiana comparison, reaching 10% by the first quarter.
Laurel: These trends should improve as we continue to grow the consumer portfolio.
Laurel: Now, we will deep dive into the cost of funds improved.
Michela Casasa: Now we will deep dive into the cost of funds in proof. On slide 19, the cost of deposits continues a positive downward trend, not only due to lower market rates as we continue to reprice our liabilities, but also due to a better funding mix as the low-cost funding has gained relevance, representing 35% of our funds. It is important to mention that deposits have become a more relevant part of our funding structure increasing from 78% to 81% in the last 12 months with growth in both retail and commercial deposits. As a result, our cost of funds improved by 80 basis points on a year-over-year basis, although stable in the last quarter.
Laurel: On slide 19, the cost of deposits continues a positive downward trend not only due to lower market rates as we continue to replace reprice, our liabilities and also due to a major funding mix at the low cost funding has gained relevance representing 75% of our IP.
Laurel: It is important to mention that the policies have become a more relevant part of our plan.
Laurel: Instructor, increasing from 78% to 81% in the last 12 months with growth in both retail and commercial deposits.
Laurel: The result of cost of funds improved by 80 basis points on a year over year basis, although stable in the last quarter.
Michela Casasa: Finally, our loan-to-deposit ratio stands at 97% in line with the industry's average.
Laurel: Finally, our loan to deposit ratio stands at 98, 7% in line with the industry average.
Laurel: Well, thanks, Amy we wanted to take a closer look at the local funding strategy of intervention, which primarily focuses on capturing savings deposits and current.
Michela Casasa: On slide 20, we wanted to take a closer look at the local funding strategy of Interbank, which primarily focuses on capturing saving deposits in current accounts with low to zero interest rates. To achieve this, we have implemented various initiatives aimed at enhancing the value-added services provided to our clients. For example, the CNIB policy page has enabled us to offer a more comprehensive service to our clients, thereby increasing the flow that stays at Interbank accounts, promissing pay and generating a rise in the transactional deposits. This has contributed to a 16% increase in commercial low-cost. Additionally, we continue to work on the engagement of clients and enhancing the customer experience to foster primary banking relationships in Britain.
Laurel: Accounts with low to zero interest rates so.
Laurel: To achieve this the having the maintenance various initiatives aimed at enhancing the value added services provided to attack.
Laurel: It sounds good it seemed that it when you see base have enabled us to offer a more comprehensive service clients, thereby increasing the float that states are in their bank accounts for mission Bay and generating a rise in the transaction hasn't closed.
Laurel: These have contributed to a 16% increase in commercial loan growth.
Laurel: Additionally, we continue to work on the engagement of diodes, and enhancing the customer experience to foster primary banking relationships in Britain.
Michela Casasa: Consequently, retail low-cost funding has seen a 10% increase over the year. As a result, we achieved a 14% year-over-year increase, raising our share of low-cost funding from 32% to 35% in the last year.
Laurel: Let's see it when we meet the low low cost funding has seen a 10% increase over the year.
Laurel: As a result, we achieved a 14% year over year increase racing our share float.
Laurel: It's from 32% to 35% in the last year.
Laurel: Moving on to a beta strategy.
Michela Casasa: Moving on to our digital strategy. We believe we are creating significant value and primary banking relationships through our digital developments and links. Over the last year, we have been able to increase our retail primary banking customers by 15%, now representing more than 32% of our retail client base. To achieve this, we have been implementing commercial actions focused on increasing engagement and transaction, which has resulted in accelerated growth for clinics. The number of transactions doubled in the year-over-year comparison with active users increasing by more than 19% and the average number of transactions per user rising by 40%.
Laurel: We do need we are creating significant value primary banking relationships through our digital development.
Laurel: Over the last year, we have been able to increase our retail primary banking customers by 15% now representing more than 36% of our retail client base.
Laurel: To achieve this we have been implementing commercial actions focused on increasing engagement and satisfaction, which has resulted in accelerated growth for fleet.
Laurel: Number of transactions doubled in a year over year comparison with active users increasing by more than 19% and the average number of transactions per user pricing by 40%.
Laurel: Additionally, we believe we have solid keep a promising indicator that you're using.
Michela Casasa: Additionally, we believe we have solid key performance indicators that continue to improve. For example, our inflow payable accounts hold around 14% market share. Region deposits are at approximately 15%. Market share in credit card accounts for about 26% market share. All of these metrics are supported by an MTS of 58, reflecting our commitment to customer satisfaction and loyalty.
Laurel: For example, our inflow payroll accounts called around 14% market share related deposits are at approximately 15%.
Laurel: Sure they've got accounted for account for about 26% market share.
Laurel: These metrics are supported by an M. P. S E T H, reflecting our commitment to customer satisfaction and Juliet.
Laurel: On slide 23, we continue to highlight the positive effect in our digital indicators compared to the previous year as we are continuously developing solutions to meet our customer needs.
Michela Casasa: On slide 23, we continue to highlight the positive strengths in our digital indicators compared to the previous year, as we are continuously developing solutions to meet our customer needs. As a result, we have seen substantial growth in retail digital customers, increasing from 77% to 82% as our commercial digital clients stand at 72%. The Digital Self-Service Indicator and Digital Sales have risen to 78% and 70% respectively thanks to our always-on communication actions which focus on educating customers about new self-service functionalities through the app and our virtual Finally, our MPS has recovered during the last quarter from 55 to 58.
Laurel: As a result, we have seen substantial growth in greater detail afterwards, increasing from 77% to eight 2% as a commercial digital clients and 72%.
Laurel: They need US has have you seen the data and needed that say a breakdown between 78 and 70% respectively. Thanks to our always on communication actions, which focus on educating customers about new self service functionalities to the F N B S assistance.
Laurel: Finally, our M. P. S has recovered in the last quarter from 50 558.
Laurel: Finally, the six message is that there is strong growth in insurance and wealth match.
Michela Casasa: Finally, the sixth message is that there is strong growth in insurance and wealth management. Moving to insurance on slide 25, on a yearly basis, we see an increase in the contractual service margin of 27%, mostly driven by individual licensing annuities. In the first quarter, we observed growth in individual licensing annuities, reserves of 36% and 38% respectively, driven by the generation of new business, which surpasses the monthly amortization of the CSM. Also, we see an increase in short-term insurance premiums of 124%, mainly due to disability and survivorship premiums acquired from the Peruvian private pension system through a two-year bidding process.
Laurel: Moving to insurance on slide 35 on a yearly basis, we see an increase in the contractual service margin of 27%, mostly driven by even the life and annuity.
Laurel: In the first quarter, we observed growth in individual life, and annuities reserve of 36% and 38% respectively. Do you like the generation of new leases, which surpasses the monthly amortization of the CFM.
Laurel: Also we see an increase in short term insurance premiums of 124%, mainly due to disability and survivorship premiums acquired from the Peruvian private agents system. So the two year bidding process.
Michela Casasa: The results from investments increased to 35% year-over-year. The return on investment portfolio reached 6.2%, making you to better real estate and investment funds valuation offsetting the $63 million provision due to telecom. In insurance, we continue to focus on enhancing the digital experience for our clients and expanding our sales from digital channels. The development of internal capabilities has allowed us to increase digital self-service to 69% from 63% of the previous year. Also, bank assurance digital sales have reached 30% of total bank assurance premiums and direct digital sales continue to grow, reaching $23 million in the quarter, up 15% from last year.
Laurel: The results from investments increased to 35% year over year.
Laurel: Total investment portfolio reached six 2%, mainly due to better real estate and investment banks valuation offsetting a 63 million provision due to the decline.
Laurel: In insurance, we continue to focus on enhancing the aesthetics day and for our clients and expanding our sales from digital channels.
Laurel: Then he development of internal AEP has allowed us to increase to 69% from 63% of the previous year.
Laurel: Also bancassurance digital sales have reached 30% of soda ash lesbians and direct eastern sales continued to grow reaching Chinese remainder in the fourth at 15.
Laurel: 15% from last year.
Laurel: But wealth management assets under management continued to grow at an annual rate of 16% and 3% on a quarterly basis, reaching a new all time high of $7 $5 million, despite a slight impact on market valuations due to reliability.
Michela Casasa: For wealth management, assets under management continue to grow at an annual rate of 16% and 3% on a quarterly basis, reaching a new all-time high of $7.5 billion, despite a slight impact on market valuations due to global volatility. Interfondos highly important growth and the digital development with the app Ernie have allowed us to grow more than 43% when compared with the previous year. This group continues to support strong free generation, which remains steady at $46 million for the On the digital front, we continue to enhance our Interfondos app with the goal of shifting its role from a transactional platform to a true digital advisor for our mutual fund clients.
Laurel: In there for those kind of important growth and the recent developments, we'd be act and me have allowed us to grow more than 43% when compared with the previous year.
Laurel: This growth continues to support strong fee generation, which remained steady at $46 million for the fourth.
Laurel: On the needle felt we continuously not only their phone goes up when the goal of shifting its role from the transaction platform.
Laurel: So our true interest adviser for our mutual fund clients.
Michela Casasa: As a result, we have seen a sustained increase in both the app adoption, with a 7 point year over year increase, and digital transactions, which grew by 9 points annually, and now represent more than half of all client transactions.
Laurel: As a result, we have seen a sustained increase in both the adoption with a seven point year over year increase indeed that transaction transaction, which grew by nine points and money and now represent more than half of all client transactions.
Laurel: Yeah.
Laurel: Now, let me move to the final part of the presentation, where we provide some takeaways.
Michela Casasa: Now, let me move to the final part of the presentation where we provide some takeaways. On slide 30, we wanted to give you a summary of our strategy, which focuses on three key strategic priorities. First, we aim to become a leading digital platform with profitable growth. IFX has demonstrated solid recovery during 2024 and continues to perform well during the first quarter of 2025 with an net income 3.2 times larger than the same period last year. Second, we strive to build primary relationships by placing the customer at the center of our decisions and offering the best digital experience.
Laurel: On slide 30, we went into EQM salary of our strategy, which focuses on three key strategic priorities.
Laurel: First we aim to become a leading digital platform with profitable growth I used that has demonstrated solid recovering unit trains when he forge and continues to perform well during the first quarter of 2005 with no net income $2 two times larger than the same period last year.
Laurel: Second we strive to be a primary relationships.
Laurel: <unk> seen the customer at the center of our decisions and offering the best digital experience as a result.
Michela Casasa: As a result, MPAs, like the retail banking MPAs at CCA, are at top levels, and our retail digital clients are more than 80%. Third, we continue to focus on our key businesses, maintaining a significant market share in consumer banking above 21%, ranking second in the country. Retail deposits are around 15% market share, ranking third in the market. And commercial banking holds approximately an 11% market share, growing its relevance in the market. In annuities, we are the leader, over 30% market share. Finally, Wealth Management, Asset Owner Management, continue to grow a double-digit rate, reaching a 17% year-over-year and surpassing previous marks.
Laurel: N T H Lee the retail banking SBA type P. C. A R. Adult lives in a lethal disease that clients are more than 80%.
So we continue to focus on our key businesses, maintaining a significant market share in consumer banking above 21% bracket racking.
Laurel: Ranking second in the market later.
Laurel: <unk> deposits are around 15% market share ranking third in the market and commercial banking calls approximately an 11% market share growing its relevance in the market.
Laurel: I know it is we added a little over 30% market share.
Laurel: Finally with management as another medicine continues to grow at double digit rate rate, reaching a 17% year over year and surpassing previous maximums.
Laurel: Yeah.
Speaker Change: Okay 31, let me give you a review of the operating trends of the first quarter.
Michela Casasa: On slide 31, let me give you a review of the operating trends of the transport. Capital ratio remains at some level, with a total capital ratio above 17%, and the core equity Tier 1 ratio close to 12%. Let's remember that we issue a Tier 2 bond for Interbank in general. Our ROE for the first quarter was 16.3%, in line with our guidance for 2025, setting us on the correct path to achieve our long-term goals. For long growth, we grew 8.2% year-over-year, in line with our guidance of high single-digit growth. The first quarter was driven by commercial banking.
Speaker Change: Capital ratios remain at some limit with a total capital ratio above 17% and the core equity tier one ratio close to plus first thing.
Speaker Change: Let's remember that we issued tier two bond for interbank Egypt.
Speaker Change: Our ROE for the first quarter was 16, 3% in line with our guidance from <unk> 25 said enough on the correct path to achieve our long term goals.
Speaker Change: So loan growth, we grew eight 2% year over year in line with our guidance.
Speaker Change: High single digit growth the first quarter was driven by commercial banking. We expect these to these general filter loan growth to continue as literally assume growth in the consumer portfolio.
Michela Casasa: We expect this trend of total long growth to continue as we resume growth in the consumer portfolio. We expect a recovery of needs for the rest of the year as the cost of funds improves due to a better funding mix and the yield of loans recovers in line with the consumer portfolio growth. The cost of risk remains in line with the actual guidance, and we continue to focus on efficiency at IFS as our cost-to-income was around 35% below that.
Speaker Change: We expect a recovery of need for the rest of the year and the cost of funds improved due to a better funding mix and the ease of long sleepovers in line, we the consumer portfolio growth.
Speaker Change: Cost of risk remains in line with that guidance and we continue to focus on efficiency and Apis as a cost to income was around 35% below that.
Speaker Change: On slide 32, we highlight our sustainability performance in the first quarter of <unk> 25.
Michela Casasa: On slide 32, we highlight our sustainability performance in the first quarter of 2025. On the environmental pillar, we continue to drive impact through sustainable finance. Our established sustainable portfolio has grown to $380 million, representing a $40 million increase compared to 2024. Regarding our own environmental footprint, we have verified our 2024 carbon emissions achieving a significant reduction of 27% compared to previous year, alongside a 4% decrease in energy consumption, a key driver of our financial stocks and many offices. On the social pillar, we are consistently empowering entrepreneurs through our digital wallet, EasyPayJax, which reached over 47,000 entrepreneurs this quarter, totaling 1.1 million users.
On the environmental pillar continue to drive impact through sustainable finance are assigning sustainable portfolio has grown to $380 million, extending our 40 million increase compared to change any form.
Speaker Change: Regarding our.
Speaker Change: Own environmental footprint, we have certified our place in the short casually visuals, achieving a significant reduction of 27% compare.
Speaker Change: To bring this year alongside a 4% decrease in energy consumption and key drivers of our financial staff in many of existing patients.
Speaker Change: On the Soc has been that we are consistently empowering intracranial through our digital wallet ECB, yet with reach over 47000 in Japan this quarter totaling $1 1 million users.
Michela Casasa: Furthermore, underscoring our commitment to financial education, we have provided financial training to over 2.5 million clients and non-clients. Our inclusive insurance offerings also saw growth, with more than 1.8 thousand new sales of Rumbo and Vida Cash policies during this quarter. On the governance and transparency pillars, IFS has been included in the Dow Jones Sustainability Yearbook 2025 for the second consecutive year. We have also published a comprehensive IFA sustainability report in accordance with GRI and SASB standards. Finally, to foster collaboration and develop a unified sustainability strategy across IFS, we have established an eco-efficiency committee with representation from each of us.
Speaker Change: Are there more underscoring our commitment to financial information, we have provided financial drain to over $2 5 million clients and new clients.
Speaker Change: Our interest and insurance offerings also saw growth with more than 1.8 thousand new sales of Roomba in me that cash policies during this quarter.
Speaker Change: On the governance and transparency be left are you faced have been included in the Dow Jones sustainability yearbook 2025 for the second consecutive year.
Speaker Change: We have also publish a comprehensive sustainability report in accordance with derived in S. A S V standards finally to foster collaboration and develop a high sustainability strategy.
Speaker Change: We have established a naples efficiency only equal representation from each of them have succeeded.
Speaker Change: Yeah.
Speaker Change: Let me finalize the presentation with some key takeaways.
Michela Casasa: Let me finalize the presentation with some key takeaways. First, we have had a solid start to the year. Second, growing commercial exchange ecosystem while stabilizing the consumer portfolio. Sir, Positive Trends in Costa Rica continues. 4. Improved funding costs, continuous driven by growth in deposits. 5. We are increasing primary banking relationships to adopt digital experience. And 6. Growth, important growth in insurance and wealth management continues. Thank you very much.
Speaker Change: But we have had a solid start to the units.
Speaker Change: Second growing commercial and famous ecosystem, whilst they license the consumer portfolio.
Speaker Change: So positive trend in cost of risk continues.
Speaker Change: Fourth improved funding cost on genius driven by growth in deposits.
Speaker Change: We are increasing primary banking relationships to a thought maybe that experience.
Speaker Change: And six growth.
Speaker Change: And growth in insurance and wealth management compete.
Speaker Change: Very much now we welcome any questions you might have.
Unknown Executive: Now we welcome any questions you might have. Thank you. At this time, we will open the floor for questions. First, we will take the questions from the conference call and then the webcast questions. If you would like to ask a question, please press the star key followed by the number one key on your touch tone screen. Questions will be taken in the order in which they are received. If at any time you would like to remove yourself from the question queue, please press star, then 2. Again, to ask a question, please press star, then 1, now.
Speaker Change: Thank you at this time, we will open the floor for questions.
Speaker Change: First we will take the questions from the conference call and then the webcast questions.
Speaker Change: But people like to ask a question.
Speaker Change: Press Star.
Speaker Change: Please press the star key followed by the number one key on your Touchtone.
Speaker Change: Questions will be taken in the order, which they are received.
Speaker Change: If at any time, you would like to remove yourself from the question queue. Please press Star then two.
Speaker Change: Again to ask a question. Please press Star then one now.
Andrea: And the first question will come from Andrea <unk> with Santander. Please go ahead.
Andres Soto: And the first question will come from Andres Soto with Santander, go ahead. Pardon me Mr. Soto, you may be muted. Hi, good morning. Thank you for taking my question and representation. My question is related to your guidance and your expectations for 2025. During the call, you mentioned your expectation of 15% ROE. I would like to confirm if that is still your expectation, given that you're already at that level in the first quarter, which is typically seasonally low. What prevents you to expect a higher level for this year?
Speaker Change:
Speaker Change: Okay.
Speaker Change: Pardon me Mr. <unk>, you may be muted.
Speaker Change: Okay.
Speaker Change: Hi, Good morning, Thank you for taking my question.
Speaker Change: Are you from.
Speaker Change: My question is related to your guidance on your expectations for 2025.
During the call you mentioned you would expect.
Speaker Change: Hum.
Speaker Change: I would like to confirm if that's still your expectation.
Speaker Change: Given that Youre on Arabia, but globally in the first quarter, which typically you see some really low.
Speaker Change: What prevents you to expect a higher level part of the year.
Andrea: Andrea Thank you your next door.
Luis Felipe Castellanos: Andres, thank you very much for your question. Yeah, at this point, we continue maintaining our guidance views. Obviously, we had a solid start to the year. However, we're not ready to change that yet. And so we're remaining at that level. And hopefully, we'll have reached to the upside.
Speaker Change: Yeah at this point we continue.
Maintaining our guidance views, obviously, we have a sort of a sundry of year. However, we're not ready to change either.
Speaker Change: Yes.
Speaker Change: So we're.
Speaker Change: Damian.
Speaker Change: That level or hopefully will have reached through yardstick, so that's still a year or two.
Luis Felipe Castellanos: No, but still early in the year.
Speaker Change: Okay.
Speaker Change: Thank you Luca.
Luis Felipe Castellanos: Thank you, Luis Lpez. And regarding specifically loan growth, do you have any updated view on that front? You mentioned across the presentation, significant improvement in investment and also consumer sentiment. Can we expect a board revision to your initial expectations for long growth or how you are seeing this year evolving? Same as I mentioned before, Andres. So we are seeing positive trends. However, this has to consolidate and materialize. So as you've seen, the consumer portfolio has not recovered yet, even though there's a positive sentiment. I guess Peruvians are not looking to get in debt now. There's been lots of crazy events in the market.
Speaker Change: Loan growth.
Speaker Change: Are there any updated view on both fronts.
Speaker Change: Trend micro the presentation.
Speaker Change: Significantly improved Miami investment that holds for a consumer sentiment.
Speaker Change: Uh huh.
Speaker Change: Tying things can we expect.
Speaker Change: Barbara revision to your initial expectations for loan growth or how how you're seeing these year to Bobby.
Speaker Change: Yeah.
Same as I've mentioned before in this so.
Speaker Change: We are seeing positive strength however.
Speaker Change: And this is this has to consolidate and materialize not so.
Speaker Change: As you've seen the consumer portfolio has not recovered yet even though it is a positive sentiment I guess peruvians Luke.
Speaker Change: <unk>.
Speaker Change: And that now.
Speaker Change: Thanks.
Speaker Change: In the market.
Luis Felipe Castellanos: There's talk about the CDA being released again. There's talk about pension funds that might have another release. That's been discussed in Congress. So there are many moving parts towards the materialization of the recovery of consumer credit activity. We do see a healthy growth in the commercial group. And as you've seen, from the last quarter, we've been putting more focus on that portfolio and getting traction. So that continues to be a main driver of what we expect will happen this year. And that consumer portfolio is still... We're starting to see traction. However, we are not where we expect to see it yet.
Speaker Change: About the auction.
Speaker Change: The increase again.
Speaker Change: Our pension funds.
Speaker Change: Another disease.
Speaker Change: That's been in discussion on progress, but there are many moving parts stores.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: We do see.
Speaker Change: I don't see.
Speaker Change: Yes.
Speaker Change: It's gene.
Speaker Change: Task orders will be.
Speaker Change: We're focused on that.
Speaker Change: In conjunction so that continues to be a big driver.
Speaker Change: We expect we'll have a good year.
Speaker Change: And our consumer portfolios steel.
Speaker Change: We're starting to see traction however, we are not where we exited.
Luis Felipe Castellanos: We are going to be very aware of what's happening now and what has to change in a couple of years' time.
Speaker Change: Okay, we are going to be very.
Speaker Change: Our.
Speaker Change: Okay.
Speaker Change: Now constitute change.
Speaker Change: Great.
Speaker Change: Understood. Thank you literally penguin congratulations on the results.
Andres Soto: Andres Soto. Thank you, Luis Felipe, and congratulations on the result. Thank you Andres.
Speaker Change: Thank you and the next question will come from Alonso Aramburu with BTG. Please go ahead.
Alonso Aramburu: The next question will come from Alonso Aramburu with BTG, please go ahead. Yes. Hi, good morning. Thank you for the call.
Alonso Aramburu: Yes, hi, good morning, and thank you for the call two questions on my end first.
Alonso Aramburu: Two questions on my end. First, I wanted to ask you if you expect any additional potential provisions or impairment from Telefónica, or are you basically comfortable with the provisions you did in the first quarter? And second, regarding your cost of risk, you have been around 2.5% the last couple of quarters. I believe the guidance was closer to 3%. I suspect that with the growth of consumer loans, cost of risk can trend higher, assuming that happens. So just wondering if you can give us some color whether you expect this cost of risk to remain closer to 2.5% and not 3%.
Speaker Change: One o'clock GPU.
Speaker Change: Any additional potential provisions requirements from Telefonica or you.
Speaker Change: Basically comfortable with the position that <unk> been in the first quarter.
Speaker Change: Regarding your cost of risk you have been around 20%. The last couple of quarters I believe the guidance was closer to 3%.
Speaker Change: Are you suspect that with the growth of consumer loans cost of risk and control and the higher assuming that happens. So just wondering if you can give us some color.
Speaker Change: You expect this cost of risk to remain closer to two and a half.
Speaker Change: 3%. Thank you.
Alonso Aramburu: Thank you.
Speaker Change: Okay.
Luis Felipe Castellanos: Okay, Alonso, thank you so much for your questions. Regarding Telefónica, based on the information we have now and our analysis of the situation, what we have in the book is our best understanding of the level will be needed for now, short to medium term, unless something drastically changes in terms of the process. As Regina mentioned, we have exposure in two hours of series. One is very straightforward. This is Intaxebulo that has bonds issued and we were more than 50% covered on that front. That's what our models are saying. And then in the bank, it's a little bit tricky because it's not direct exposure.
Speaker Change: So im not sure, but just regarding to the formula based on the information we have now in our analysis of the situation.
Speaker Change: Why are we having the movies is our best understanding of the level will be will be needed for the short to medium term.
Speaker Change: Unless something drastically changes in terms of the process.
Speaker Change: Our cogeneration.
Speaker Change: Yes.
Speaker Change: We have exposure into our subsidiaries one is very straightforward.
Speaker Change: I say all of the house.
Speaker Change: Boss.
Speaker Change: And.
Speaker Change: 60% covered on restaurants, that's where our models are saying.
Speaker Change: And then in the back it's a little bit tricky, because it's not direct exposure because I mentioned our growth et cetera.
Luis Felipe Castellanos: I think Michela mentioned as well. It's a contingent, letter of credit, subject to certain procedures with tax authority. So the probability of that becoming a real obligation is not that direct. I mean, it would probably take some time. However, we've been cautious and we've...
Speaker Change: Great subject to same sort of pattern.
Speaker Change: Our procedures.
Speaker Change: That's the authority so that the remedy of.
Speaker Change: That's becoming real obligation is not that direct.
Speaker Change: These bookings will probably take some time, however would be.
Speaker Change: Cautious.
Speaker Change: <unk> done.
Speaker Change: A big chunk of what could become at some point.
Speaker Change: Our direct exposure got so so based on what we have now we feel comfortable again.
Speaker Change: Jeremy the growth as well as that.
Speaker Change: We are well covered however is something drastically changes.
Michela Casasa: Andres Soto, Bruno Rio, Yuri Fernandes, Andres Soto, Bruno Rio, Andres Soto, Bruno Rio, Andres Andres Soto, Bruno Rio, Michela Ramat, Yuri Fernandes, Andres Soto, Bruno Rio, Michela Regarding cost of risk, maybe I can pass it to Carlos or Michela, but I guess that 3% assumes all the growth of the consumer, no, the recovery of the credit cards and cash loans portfolio. I don't know, Carlos, maybe you can complement on something. Yes, definitely. So we, we have started to grow in the credit card and portfolio and cash portfolio. The last two months we have grown, not as much as we would have liked.
Speaker Change: Yes.
Speaker Change: You're doing something else that will obviously.
Speaker Change: Communicator.
Speaker Change: Yeah.
Speaker Change: And regarding cost of risk.
Speaker Change: Maybe capacity to goggles or makena, but I guess.
Speaker Change: 3%.
Speaker Change: Sure.
Speaker Change: Welcome to the consumer.
Speaker Change: All of the credit cards.
Speaker Change: Arsenals.
Portfolio, Idaho patterns, maybe you got a problem.
Speaker Change: Yes, definitely so we.
Speaker Change: We have started to grow in the current portfolio.
Speaker Change: Oh gosh portfolio. The last two months, we have grown not as much as we would've liked.
Carlos Torre: However, the growth, Alonso, I think when we look at credit cards, there's two things that are very important. The first one is whether our money conversation is working. and Luis Lera. Andres Soto, Bruno Rio, Michela Ramat, Yuri Fernandes, Andres Soto, Bruno Rio, Andres The later vintages, the last couple of months, we have started to increase the level of risk. We are being very conservative on how we do this. We don't want to go to the other side. And there are certain things that obviously help repayment, which is, as Luis Felipe mentioned, the CTAs. Obviously, in December, Peruvians get a double salary, so that kind of lowers the amount of our portfolio.
Alonso Aramburu: However, the growth Alonso.
Speaker Change: I think when we look at <unk>, there's two things that are very important the first one is.
Sean: Hey, Sean is working on.
Sean: Lions are using our cards and that is happening we are seeing we have seen.
Sean: Over 10% growth in turnover with our cards and that is good the valuable position working where we're seeing traction. So so that is good. However, as you have seen over the last couple of quarters, our vintages have been.
Sean: Focus on lower risk and higher profile clients. So those claims are being faster their loans and it's harder to grow the portfolio. So even though we have been seeing good results in the value proposition we have not been.
Sean: Able to grow the portfolio as much. The later vintages. The last couple of months, we have started to increase the level.
Sean: Chris.
Sean: Right.
Sean: Being very conservative on how we believe they want to another site and there are certain things that obviously prepayments.
Sean: Prepayments, which he says please Philip dimension the CPA is a O.
Sean: Obviously in December.
Sean: Peruvians that would salaries, so that kind of lowers the amount of our portfolio, but we have seen this trend reverse and we will continue to monitor it.
Carlos Torre: But we have seen this trend reverse, and we will continue to monitor. If we increase risk, you will see two effects. It will affect NIM positively, obviously, but also maybe a little bit of increase in the cost of risk, taking us closer to the 3% that was on our guidance. Thank you.
Sean: If we increase risk you will see two effects it will affect NIM positively obviously.
Sean: But also maybe a little bit of increase in the cost of risk taking us closer to that 3% that wasn't in our guidance.
Sean: Okay.
Sean: Yes, maybe.
Carlos Torre: Yes, maybe if I just complement one thing related to what we were expecting and what we are seeing, we are growing the portfolio 8%, so this is what we were expecting. Maybe the mix is being a little bit different. So in the mix, we are seeing a little bit less consumer lending. So in the numbers that you see, there is a little bit of pressure in NIM, but also improvement in cost of risk. So at the end, the NIM masterpiece is the one that is performing better than what we expected, and that is also helping the ROE.
Sean: And what.
Sean: <unk> related to what we were expecting and what we are seeing in the afternoon.
Sean: Oh look at portfolio, 8% Russell. This is what we were expecting maybe the mix is being a little bit different. So in the mix, we are seeing a little bit less consumer lending. So we the numbers that you see there is a little bit of pressure in EMEA and also.
Sean: Included in cost of risk at the in the NIM.
Sean: Is the one that is performing better. Nevertheless, we expect that and that is also helping the arrow.
Sean: Absolutely.
Carlos Torre: Absolutely. Perfect. Thank you. Very helpful.
Sean: Perfect. Thank you very helpful.
Sean: Thank you.
Unknown Executive: Again, if you have a question, please press star, then one.
Speaker Change: Again, if you have a question. Please press Star then one our next question will come from Ernesto Gabby Lando with Bank of America. Please go ahead.
Ernesto Gabilondo: Our next question will come from Ernesto Gabilondo with Bank of America. Please go ahead. Thank you. Good morning, Luis Felipe, Michela. Congrats on your results despite the impact of Telefonica. Most of my questions have been answered, so just a question in terms of competition and also the evolution in terms of the credit card portfolio. As you are mentioning, it's in a gradual recovery, expected to accelerate in the second half. How are you seeing also this evolution in your competitors? I believe in the past conference, you were saying that you were starting to see to be relatively flat or experience a smaller decline when compared to the competition.
Speaker Change: Thank you and good morning, Luiz Felipe and Michela, Congrats yourselves, despite the impact of Telefonica.
Speaker Change: Most of my questions have been answered so just a question in terms of competition.
Speaker Change: And also the evolution in terms of the credit card portfolio.
Speaker Change: You are mentioning that you'd seen rather on recovery.
Speaker Change: To accelerate in the second half.
Speaker Change: You've seen also.
Speaker Change: This evolution in your competitors I believe in the past conference call you were saying that you're starting to see.
Relatively flat or or experienced such a smaller decline when compared to the competition. So I just want to confirm that no Coliseum competition on the evolution of the credit card portfolio. Thank you.
Ernesto Gabilondo: So I just want to compare that. I know how you're seeing competition and the evolution of the credit card portfolio. Thank you.
Speaker Change: Okay.
Luis Felipe Castellanos: Okay, hi Ernesto, thank you very much for the question. I guess, yeah, in this composition are the same. After the impact of the credit cycle, I was looking at some numbers, of course, in the last 10 years, everybody went through the cautious perspective portfolio. And we are starting, given the positive macro backdrop that we are experiencing, more appetite towards growth in the consumer groups, including credit cards. So, again, not very different than what we have described for our portfolio. We are starting to see growth in our group. And we are also seeing the system as a whole recover.
Speaker Change: Thank you the first question.
Speaker Change: Yes.
Speaker Change: I would say.
Speaker Change: That is after the impact of the credit cycle. There was obviously, we've got some numbers or some of that.
Speaker Change: 10 years.
Speaker Change: Everybody went through that.
Speaker Change: Cultural perspective.
Speaker Change: Portfolio.
Speaker Change: And we are excited given that positive macro backdrop that we are experiencing.
Speaker Change: Yeah.
Amit I towards growth.
Speaker Change: Tumor books, and Julian grape nuts.
Speaker Change: So again.
Speaker Change: Not.
Speaker Change: Very well.
Speaker Change: Well, we have described for our portfolio.
Speaker Change: We are starting to see growth in our book.
Speaker Change: And we are also seeing that you could give us a call recover some competitors being more aggressive than others. Some are still digesting.
Luis Felipe Castellanos: Some conventions are being more aggressive than others. Some are still digesting. late vintages, where they put the brakes later than others, but overall, the trends continue to be the same.
Speaker Change: Okay.
Speaker Change: Great.
Speaker Change: Thank you Jason.
Speaker Change: Where they put the brakes Nader.
Speaker Change: Others, but overall the trends continue to be the same.
Speaker Change: Yes.
Speaker Change: Perfect. Thank you very much consolidated.
Luis Felipe Castellanos: Thank you very much, Mr. Lpez. You're welcome.
Speaker Change: Youre welcome.
Speaker Change: At this time, we will take webcast questions I will now turn the call over to Mr. Ivan Peel from inspire group.
Ivan Peill: At this time, we will take webcast questions. I will now turn the call over to Mr. Ivan Peill from Inspired. Thank you, operator.
Speaker Change: Thank you operator, the first question comes from Daniel Mora.
Daniel Mora: The first question comes from Daniel Mora of Credit Corp Capital. What is the status of the Telefonica corporate case? Did you reach the desired level of coverage? Or can we expect higher provisions in the upcoming quarters? And what would be the normalized figure of net profits and return on average equity in the first quarter if we clean for this effect?
Speaker Change: Corp capital.
Daniel Mora: What is the status of the Telefonica corporate case did you reach the desired level of coverage or can we expect higher provisions in the upcoming quarters.
Daniel Mora: And what would be the normalized figure of net profits and return on average equity first quarter, if we clean for this effect.
Daniel Mora: Oh, Hi, I.
Luis Felipe Castellanos: Oh, hi, Daniel. I guess we already answered that question. Based on our models and our analysis and the current status of the Telefonica case, we think we're well covered. If something drastically changes, we'll probably have to do more. Or if something improves, obviously, we could release some of the provisions. But based on the information we have now, we are comfortable with the level of conditions that we have.
Daniel Mora: I guess, we already answered that question.
Daniel Mora: Great.
Daniel Mora: Based on our Moreover analysis at a current status of the California got days, we think we're well covered something drastically changes will probably have to do more or or if something Bruce obviously, we could release some of the bridge on slide eight.
Daniel Mora: The information we have now we are comfortable with the level that we have we don't expect these.
Michela Casasa: We don't expect to do anything in the short term. And if you take off that one time, or if you want to see it that way, probably our earnings would have been north of $130 million.
Daniel Mora: Georgia.
Daniel Mora: If you take almost that one time or you're going to see that waiver early hours will be north of I didn't get it.
Okay.
Daniel Mora: Is there further room for a cost of funds improvement considering the recent decrease in the central bank rate.
Michela Casasa: Is there further room for a cost of funds improvement considering the recent decrease in the central bank rates? What are the mean expectations for the rest of the year due to the funding repricing, but still weak consumer segment dynamics?
Daniel Mora: What are the expectations for the rest of the year due to the funding repricing, but still weak consumer segment dynamics.
Jay Dobson: Sure, but let me pass it to Jay Dobson.
Michela Casasa: Let me present Michela, and she can help us with that. Yes, there is still room, but it is little room to improve the Postal Fund. There is space because of the decrease in the reference rate. But on the other side, we have also issued some medium-term financing with higher rates than the one we used before. So, I guess the big part of the Postal Fund improvement is already there, but we still expect some minor decreases in the future. The need should be more, I mean, based on the needs, but mostly based on the profit needs and the increase rate of the Postal Fund.
Daniel Mora: Sure.
Speaker Change: And yes every.
Daniel Mora: Gary Steele.
Daniel Mora: East.
Daniel Mora: His leadership role to improve staples.
Daniel Mora: There is a pause.
Daniel Mora: Increasingly in the reference rate and on the other side only have also issued some medium term hi, Nancy higher rate than the one week or so.
Daniel Mora: In the.
Daniel Mora: Possibly a little bit is.
Daniel Mora: He is already there and we feel it.
Daniel Mora: Minor decreases indicator that they.
Daniel Mora: They need to be I.
Daniel Mora: I mean based on.
Daniel Mora: Most of the base quarter.
Daniel Mora: And this is based on genome.
Speaker Change: The next question comes from Santiago Martinez.
Santiago Martinez: The next question comes from Santiago Martinez. of Freddie Ford Capital. We saw the consumer loan portfolio contracting 4.8% year over year in first quarter 25, mostly due to a 9% decline in credit cards. You've mentioned the recovery is expected in the second half of the year. What key indicators are you monitoring to support this view? And do you expect consumer loan growth to be strong enough to meaningfully support mean and overall profitability in the second half of the year? I have a specific indicator. It's just the overall performance of the economy, how salaries evolve. And also, as mentioned, it's just not a matter of us increasing our risk appetite.
Daniel Mora: Of course capital.
Speaker Change: We saw the consumer loan portfolio contracted four 8% year over year in the first quarter 'twenty five.
Daniel Mora: Mostly due to a 9% decline in credit cards.
Daniel Mora: You've mentioned the recovery is expected in the second half of the year.
Speaker Change: What key indicators are you monitoring to support this view.
Speaker Change: And do you expect consumer loan growth to be strong enough to meaningfully support naeem and overall profitability in the second.
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Hi, Thanks very much.
Speaker Change: Sure.
Speaker Change: Yes, it does absorb specific.
Speaker Change: Theater is Jesse overall.
Speaker Change: First off.
Speaker Change: The economy, how salaries evolve.
Speaker Change: And also as a major issue, it's not a matter of us increasing our risk appetite, it's a matter of.
Luis Felipe Castellanos: It's a matter of the consumer preferences as well. There's lots of liquidity in the system right now. But that's just kind of a general overview.
Speaker Change: The consumer preferences as well, there's lots of liquidity in the system right now.
Speaker Change: Is that kind of a general overview.
Carlos Torre: Let me pass it on to Carlos, who is more engaged in the detailed strategy of the actions we're taking in our commercial strategy. So he can give you more time if you have questions. Yeah, I guess it's similar to what I mentioned earlier, no? The first thing we see is how many people use our card. And we have seen an increase in the use of our cards over the last couple of months. Some of that is being prepaid and some of that is being kept as a revolver. We have seen growth over the last two months, so that is positive.
Carlos: It onto Carlos who is more.
Carlos: Engaging a detailed study of the actions we're taking in our commercial strategy. So he can give you okay.
Carlos: Your question.
Carlos: Yes.
Carlos: Yes, it's similar to what I mentioned earlier.
Carlos: Thanks for the question.
Speaker Change: How many people you are.
Carlos: <unk>.
Carlos: It seems though and we have seen an increase in the use of our cards over the last couple of months.
Carlos: Some of that is being <unk>.
Carlos: Hey.
Carlos: And some of that is being kept as a revolver. We have seen growth over the last two months. So that is positive it's still small, but it's a reversing the trend that you mentioned in your question. So so that is what.
Carlos Torre: We have seen an improvement in salaries, informal salaries, and formal employment, which usually is a good indicator. And then there are other forces that work against the growth of the portfolio, as I mentioned, which are if there's a lot of liquidity in the system due to the releases of CTAs or if there's an AFP release again, that might make clients prepay some loans. But in general, we're seeing good trends in terms of usage, in terms of preference, and also some increases in balance with good cost of risk. So in general, those are the things we look at.
Carlos: We have seen an improvement in salaries informal salaries and <unk>.
Carlos: Formal employment, which usually is a good indicator.
Carlos: And then there are other forces that work against.
Carlos: The growth of the portfolio as I mentioned, which are if there's a lot of liquidity.
Carlos: In the system due to the releases of Cta, sorry, there's an AFB released again that might.
Carlos: Make clients prepaid some loans, but in general we're seeing good trends in terms of usage in terms of preference.
Carlos: And also some increases imbalance with Barry or with good cost of risk. So in general those are the things we'll look at.
Carlos: Yeah.
Carlos Torre: And it's trending positively, not hugely positive, but positive trends. So that's something that we're monitoring. Thank you.
Carlos: And it's trending positively.
Carlos: Not hugely positive but.
Carlos: Positive trends. So so that's something that we're monitoring closely.
Carlos: Thank you guys.
Speaker Change: At this time there are no further questions I would like to turn the call over to the operator.
Unknown Executive: At this time, there are no further questions. I would like to turn the call over to the operator. Thank you. There appear to be no further audio questions as well.
Speaker Change: Thank you there appear to be no further audio questions as well I would like to turn the floor back over to MS. Casassa for any closing remarks.
Michela Casasa: I would like to turn the floor back over to Ms. Casasa for any closing remarks. Okay, thank you very much. Just to summarize that we are very happy about a strong beginning of the year, and we'll see you all again in our second quarter earnings. See you, bye-bye. This concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change: Okay. Thank you very much.
Speaker Change: Just to summarize that we are very happy about is some beginning of the year and we'll see you all again in a.
Speaker Change: Second quarter earnings call.
Speaker Change: Thank you.
Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Okay.
Speaker Change: Okay.
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Speaker Change: Yes.
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Speaker Change: Yes.
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Speaker Change: Yes.
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Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].