Q2 2026 Banco de Credito e Inversiones Earnings Call
Speaker #1: Minute?
Speaker #1: This meeting is being recorded.
Speaker #2: For the future macro-volatility. Looking at the commercial portfolio, our risk profile remains stable, with the NPL ratio standing at 1.5%. The recent decrease in commercial volume was driven by a single named charge-off.
Speaker #2: This isolated event reflects a proactive risk management framework and keeps our underlying asset quality sound. In addition, our provision for credit risk on total loans stands at 1.5%, rising to 2% when including additional provisions.
Speaker #2: This asset quality reflects our focus on collateralized SMEs lending and long-term relationships with top-tier corporate clients. Improvement in both growth and delinquency. Backed by sound loan coverage levels, with a total provision ratio of 7.6% reaching 9.7% with additional buffers.
Speaker #2: We maintain a highly resilient foundation to support prudent and selective growth moving forward. Regarding advancement in our international platform and starting with BCI Perú, total asset grew 43.7% year over year, to 1.6 billion dollars, while net income reached 11.4 million as of June 2026.
Speaker #2: This was driven by a strong commercial expansion, with total loans reaching 2.3 billion when we include bookings outside Peru. This allowed us to expand our market share in corporate segment, reflecting our ability to capture demand through the high-value solution, such as treasury, cash management, and cross-border financing that our platform enables.
Speaker #2: Further strengthening this corridor, BCI Miami continued its positive trend, which translates into a net income of 37.3 million for the quarter, representing a 17% year-over-year increase, with total asset expanding to 6.7 billion.
Speaker #2: Meanwhile, BCI Securities continued to enhance our capital markets capabilities, managing $2.4 billion in AUM. To summarize our local operations: despite navigating a period of high volatility, we closed the first half of 2026 with very sound results.
Speaker #2: Our net income reached roughly 510 million dollars, up 15% year over year, translating into a strong return on average equity of 17.5%. We achieved this while growing our loan portfolio by 5.5%, keeping our cost of risk strictly controlled at only 0.66% and improving our efficiency ratio by 400 basis points.
Speaker #2: This financial and operational disciplines goes hand in hand with our customer experience approach, which is reflected in our NPS reaching a remarkable 77 points by June.
Speaker #2: I will now hand the call over to José Marina to discuss the performance of City National Bank in Florida.
Speaker #3: Thank you, Roberto. Good morning, everyone. My name is José Marina, and I'm the CFO of City National Bank. I am pleased to be here in Santiago this morning with my BCI colleagues to share highlights of our strong performance during the first half of the year.
Speaker #3: As I will discuss in more detail, our earnings continue their upward trajectory, reflecting disciplined execution of our strategy, including solid loan growth, fully funded by robust deposit growth.
Speaker #3: In particular, I would like to point out the following highlights. Our loan balance has increased by 223 million, or 1.1% quarter over quarter, and 1.5 billion, or nearly 8% year over year.
Speaker #3: We continue to focus on high-quality loans with strong spreads and solid depository relationships. Our client deposits grew by 816 million dollars, or 4% quarter over quarter, and 2 billion, or about 10.6% year over year.
Speaker #3: DDAs decreased by 198 million, or 3.7%, compared to the previous quarter, primarily driven by a 255 million dollar temporary inflow in Q1. As we pointed out in our last call, importantly, deposit growth outpaced loan growth this quarter, reinforcing our strategy to position City National Bank as the leading deposit-gathering bank in the state of Florida.
Speaker #3: Our net interest income and margin continue to expand for the 10th consecutive quarter, ending Q2 our NIM reached a 3% mark. NIM increased by 41 basis points year over year, and by 3 basis points quarter over quarter.
Speaker #3: Our earnings continued their strong trend, growing $56 million, or 46% year over year, and by $9 million, or 11%, quarter over quarter.
Speaker #3: Our ROE excluding goodwill amortization improved to 12.66% in Q2. These results demonstrate our market reputation built over the last 80 years, our relationship-centric model, strong culture, and continued success in executing our key strategic vision.
Speaker #3: Our client deposits increased by 1.5 billion dollars, or 8%, in the first half of the year, including a 302 million, or 6%, increase in DDA balances.
Speaker #3: It is important to highlight that deposit growth surpassed loan growth. Additionally, our client deposit growth outperformed the banking industry by nearly 2 times. Our strong client deposit growth enabled us to reduce broker deposits by 783 million dollars quarter over quarter, and by 1.4 billion dollars year over year, reducing reliance on wholesale funding sources.
Speaker #3: Furthermore, our quarterly cost of client deposits increased by 6 basis points compared to the prior quarter, primarily as a result of increases in interest-bearing deposits.
Speaker #3: Non-interest-bearing deposits represent a healthy 24% of total deposits. Our assets surpassed the $29 billion mark in the second quarter, with a strong loan-to-deposit ratio of 92%.
Speaker #3: We remained very well-capitalized, as evidenced by our total risk-capital ratio in Tier 1 leverage ratio, which were 15.6% and 11.4% as of June 30, respectively.
Speaker #3: Additionally, the unrealized losses in our investment portfolio remained virtually flat the last three quarters, despite the approximate 50 basis point increase in the five-year U.S.
Speaker #3: Treasury rates year to date. Total loans increased by 745 million, or 4%, in the first half of the year, and by 223 million, or 1%, quarter over quarter.
Speaker #3: I've shown on the right-hand side of the slide. We have been highly selective when it comes to lending, not only from a credit risk and spread perspective, but also prioritizing deals with full relationships, which enhances long-term client value and earning sustainability.
Speaker #3: This quarter, our NPL ratio declined by 5 basis points to 0.81% of total loans. More importantly, our strong credit culture and low-risk appetite are reflected in our minimal net charge-offs of only 9 basis points for the quarter, significantly lower than the 21 basis point average among peer banks.
Speaker #3: ACL coverage remained virtually flat, representing 1.09% of total loans. Overall, our already strong asset quality ratios continue to improve in the second quarter. Turning now to our profitability, I would like to emphasize the positive trend in our net income after taxes, which increased by 9.3 million, or 11%, quarter over quarter, and by 56.3 million, or 46%, year over year.
Speaker #3: This growth has driven primarily by an expansion in net interest margin, which we will expand upon in the upcoming slides. Fee income also increased by 8.3 million, or 14%, year over year, reflecting continued progress in our efforts to diversify and enhance our fee base.
Speaker #3: These factors contributed to operating income increasing by 81.6 million, or 21%, year over year. This all resulted in an ROA excluding goodwill amortization of 1.35% for the quarter and improvement of 35 basis points year over year, and an ROE also excluding goodwill amortization of 12.66%, which is 247 basis points higher, year over year.
Speaker #3: As we have shared with you over the past few calls, we have implemented several strategic actions through Project WIN to further strengthen our balance sheet and accelerate earnings growth.
Speaker #3: Additionally, we are focused on expanding our product offering to increase relationship expansion and augment our fee generation. Lastly, we continue to drive organic net interest income expansion through disciplined pricing across both loans and deposits.
Speaker #3: On the left side of the slide, you can see our net income increased by 9 million, 11% quarter over quarter. This improvement was primarily driven by a $7 million increase in net interest income, reflecting a 3 basis point expansion in our margin as we continue to maintain discipline on both loan and deposit pricing.
Speaker #3: Fee income increased by $4 4 million quarter over quarter, reflecting continued progress in our fee strategy, which we'll discuss further shortly. On the right-hand side, we show how our net income improved by 56 million, or 46%, year over year.
Speaker #3: This increase was primarily driven by a 73 million dollars of additional net interest income as our margin expanded by 41 basis points. Fee income also contributed positively, increasing by 8 million.
Speaker #3: Loan loss provisions were $11 million lower, reflecting the continued strong performance of our loan portfolio. This was partially offset by a 13 million dollars of additional expenses, particularly driven by investment in personnel as we continue to execute Project WIN.
Speaker #3: This slide illustrates the expansion of our net interest income and margin over the last 10 consecutive quarters. Our net interest income increased by 7 million, or 4%, quarter over quarter, with our NIM expanding by 3 basis points.
Speaker #3: This growth was driven by an increase in yield and earning assets of 4 basis points, while cost of funds remained stable. This NIM expansion is a result of several strategic actions executed during the last couple of years, which include obtaining strong spreads on new loan originations and renewals, with the commercial spreads on new loans originating.
Speaker #3: Averaging close to 300 basis points the last two years. It is also a result of our strong deposit growth, coupled with prudent deposit cost management, and this uncertain rate environment.
Speaker #3: This strong core deposit growth enabled us to reduce our wholesale funding ratio to 16% as of June 30, down from 19% at the beginning of the year.
Speaker #3: One of our key strategic priorities is the expansion and diversification of fee income. This slide demonstrates a strong result we have already delivered in this regard.
Speaker #3: Non-Treasury management fees have grown meaningfully as a share of total fee income, increasing from 41% in 2022 to 56% in 2026, reducing reliance on any single category.
Speaker #3: Non-Treasury management fees include services recently launched or currently being implemented, such as insurance commissions, our Treasury distribution desk, capital markets capabilities, wealth management, and the sale of residential and SBA loans.
Speaker #3: With non-TM fees, the largest contributors are our Treasury distribution desk at 26%, as well as the sale of residential and SBA loans at 13%, and wealth management fees at 11%.
Speaker #3: This improvement is further evidenced by fees as a percentage of average assets rising from 0.3% to 0.48%. Overall, these trends demonstrate the successful execution of our strategy to build a larger, and more diversified, fee income base.
Speaker #3: As a reminder, Project WIN is our five-year strategic plan designed to deliver profitable, scalable, and diversified growth. As this slide highlights, we are now in year two of execution and our results demonstrate strong progress across all five strategic objectives.
Speaker #3: Starting with moderate growth and diversification, we continue to make deposits the centerpiece of our relationship-based strategy. In the first half of the year, client deposits grew by 16% on an annualized basis, outpacing the industry growth rate of 8%.
Speaker #3: This performance continues to position us as a leading deposit-gathering bank in the state of Florida. Loans are growing at an annualized rate of 8%, fully funded by client deposit growth, with improved portfolio diversification, as CNI loans now represent 31% of total loans compared to 30% a year ago.
Speaker #3: Turning to enhanced profitability, our performance reflects meaningful progress. ROE reached 12% year to date, with NIM expanding 41 basis points year over year. Strong DDA growth, continued discipline on deposit pricing, and execution of new fee initiatives have further enhanced earnings diversification and overall profitability.
Speaker #3: From a scalability and digital experience standpoint, we are working on our enterprise-wide AI strategy. This includes credit delivery optimization, process automation, deployment of agent-enabled solutions to support pre- and post-client engagement meetings, and continued investment in data and analytics.
Speaker #3: Culture remains a strong strength as we execute Project WIN. We are seeing high levels of engagement and disciplined execution across the bank, supported by strong leadership.
Speaker #3: Finally, as we grow, we continue to strengthen our regulatory and risk management framework. Our three lines of defense ensure robust internal controls that support sustainable growth.
Speaker #3: In summary, these results demonstrate the continued momentum and scalability of Project WIN, and its second year of execution, with our first half performance reinforcing confidence in our ability to deliver sustainable, profitable, and diversified growth in 2026 and beyond.
Speaker #3: With that, I will turn it back to the BCI team for closing remarks. Thank you for joining this morning.
Speaker #1: Thank you, Jose. Moving on, I would like to recap the key takeaways from what has been a very strong first half of the year.
Speaker #1: First, our diversified model is delivering. Consolidated income reached 700 million, up 21% year over year, supported by city national banks' 47 bottom-line growth and our resilient operation in Chile and our subsidiaries.
Speaker #1: Second, we are improving our efficiency. While our margin expanded and fee income grew 10%, our disciplined cost initiatives led to a 452 basis-point improvement in our efficiency ratio, reaching 45.6% as of June.
Speaker #1: Third, we are growing responsible. We consolidated our position as Chile's number one bank in total loans, with a 6.1% growth. All while keeping sound NPLs levels at 1.36% and maintaining a robust CET-1 ratio of 11.3%.
Speaker #1: Finally, our corporate evolution into the C Group remains fully on track. Before we close this call, we are pleased to share our updated guidance.
Speaker #1: Looking ahead, the strong first half of the year allows us to rise our full-year 2026 outlook naturally factoring in the macroeconomic variables as well as the political reforms being discussed.
Speaker #1: In Chile, we project the end of this year with long growth between 6% and and 7%, and a lower double digit growth in fee income.
Speaker #1: Underscoring our strict commitment to efficiency, we project a 1% decrease in core operating expenses, while keeping net interest margin and cost of risk flat.
Speaker #1: For City National Bank, we anticipate loan growth of 8% to 10% and maintain a 3% NIM target, which will drive a 35% increase in net income.
Speaker #1: On a consolidated basis, our estimations are for net income to grow in the 17% to 19% range, driven on an improvement on our return on average equity to 15%.
Speaker #1: Thank you all very much for joining us today. I will now pass it back to Andrés to open the floor for your questions.
Speaker #2: Thank you, Roberto. Sergio and Jose, now we are ready for the Q&A session. The first question is coming from Ernesto Gavilondo from Bank of America.
Speaker #2: Hi, Ernesto.
Speaker #4: Oh, sorry. Hi. Thank you, Andrés. Hi, good morning, Roberto, José, Sergio, and good morning to all your team. Thanks for the opportunity to ask questions, and congratulations on your results.
Speaker #4: My first question will be on the tax reform. I was wondering if we assume a normalized inflation of 3% over the next years. How should we think about the evolution of your effective tax rate with a new tax reform?
Speaker #4: So that's my first question. Then my second question is on your sustainable ROE. You are already expecting an ROE of around 15% on a consolidated basis.
Speaker #4: So I was wondering how should we think about it in the next years, and how should we think about the evolution of the ROE for BCI and Chile, and for the Bank of Florida?
Speaker #4: And then for my last question is if you have any update on the approval and the implementation of the new holding, we saw the appointment of José Luis as the new CFO, so please congrat him.
Speaker #4: But I don't know if there's anything else what should we be following during the next quarters in terms of this new structure. Thank you.
Speaker #1: Thank you, Ernesto. Nice to see you and thank you for your question. Okay. Regarding tax reform, for us, we are optimistic about the impacts that this tax reform will have in the growth and investments in the country.
Speaker #1: And also, the impact that it will have in the tax rate that the effective tax rate that the bank will have for the next year.
Speaker #1: For this year, we expect a negative impact due to the deferred taxes that are estimated with a tax rate of 27%. Given that the tax rates are decreasing for next year, our deferred taxes will impact as a loss expense this year, which we are estimating with our accounting and tax team to have the number that is not included in the guidance we just gave you.
Speaker #1: But for the future, we are optimistic, and we expect a positive impact on our P&L. Regarding ROE, the main drivers of the improvement that we've seen in our ROE are, first, the increase in the NIM of City National Bank that, as José mentioned, we expect is structural given the discipline that they put in, along with the wind project.
Speaker #1: Second one is our efficiency gains as we highlight in the presentation, we have achieved a 452 basic point improvement in our consolidated efficiency ratio.
Speaker #1: And as we said, we are fully committed to our long-term efficiency ratio of 40% to 2028. So yes, we expect that this also will be structural.
Speaker #1: And then we have our fee income growth that is outpacing margin. So we are improving our cross-selling effectiveness, and with that, we have improved our ROE.
Speaker #1: This is the results of our strategy put in place in all the segment, in retail with our insurance brokerage we are leading the market in wealth management as we said we increase our asset under management by 14%.
Speaker #1: And in wholesale, with accessories and sales and trading. So with all of that, yes, we think for the long term, we this 15% is a structural and if we break it down, we will expect an 18% ROE for Chile and 12% for city national banks for the coming years.
Speaker #1: And the last question was an update regarding the basic group project. The first half of this year, we have the legal incorporation of the C group in April.
Speaker #1: As you mentioned, José Luis was appointed as the CFO of the holding, so we are very pleased with that news. On the ongoing step, we are securing required regulatory approvals in Chile in Peru and the United States.
Speaker #1: In order to launch the invitation to monetary shareholders and proceed with the corporate spin-off of BCI. So we are progressing with these changes as scheduled.
Speaker #4: Oh, thank you so much, Roberto. Just a follow-up in terms of the effective tax rate. So as you were mentioning, because of deferred tax, your effective tax rate for this year could be if I'm not mistaken, around 27%, right?
Speaker #4: For this year.
Speaker #1: For this year Ernesto, we are still estimating the impact of this reform. So I can't give you a number right now.
Speaker #4: Okay. And then for the next years, considering your historical effective tax rate how should we think about as a base? And then I think the gradual implementation implies like 1.5% lower every year.
Speaker #4: So how should we think about like a starting point for the effective tax rate next year? I don't know if it was historically 20, if we can expect next year to be around 19, and then in 2028, 18.
Speaker #4: Just a trend so we can kind of forecast already that in our models.
Speaker #1: As you know, Ernesto, our effective tax rate is not only affected because of the legal tax rate, but also because of the investment in city national bank and the US variation.
Speaker #1: So if everything is still the same or you should expect a reduce in the effective tax rate in the same level that the legal effect rate is changing.
Speaker #1: So with that, you can estimate more or less how much the impact will be.
Speaker #4: Perfect, perfect. Thank you. And then, on your new holding structure: as you were saying, you are waiting for the approval of the authorities in the different geographies.
Speaker #4: Do you think that could be for this year? And then we can have the holding next year? Any color on that?
Speaker #1: I can't give you any specific day, Ernesto, but we are on track in the according our original schedule.
Speaker #4: Okay. Perfect. Fair enough. Thank you very much, Roberto and congrats again on your results.
Speaker #1: Thank you, Ernesto.
Speaker #2: Thank you, Ernesto. Next one is coming from Juliana O'Hara from Goldman Sachs. Hi, Juliana. How are you?
Speaker #5: Hi, everyone. Thanks for taking my question. And congratulations on the results. I was just wondering if you could share some of your sensitivity to inflation and given that it should normalize going forward.
Speaker #5: And also, if you could share more on your expectations for non-inflation-linked NII, because it was a bit weaker in the quarter—but it was mostly from interest rate hedges.
Speaker #5: So I was wondering how much of this pressure can continue going forward as well. Thank you.
Speaker #1: Thank you, Juliana. Regarding inflation, our sensitivity is more or less every 10 basis point of US variation. The impact of in our NIM is of 5 million dollars.
Speaker #1: As you said, the NIM for the other interest this semester was a little bit lower than expected. And the reason for that was some macro hedge in our balance sheet that impacted negatively because of the volatility of the rates.
Speaker #1: We expect as Sergio said that for the second semester, this will be a little bit less volatile. So we expect the NIM will be flat for total year consolidated.
Speaker #2: Okay. Thank you, Juliana. We missed you, but we think that we answered your questions. So next one, we have Neha Agarwala from HSBC. With the next question.
Speaker #2: Hi, Neha. How are you?
Speaker #6: Hi. Thank you for taking my question. Could we talk a bit about loan growth in Chile specifically? This year seems to be a bit weaker than what we had expected.
Speaker #6: What do you do you see anything different first in your loan book? What is your expectation for loan growth across various segments for this year?
Speaker #6: And where do you see areas of improvement pick up in any particular segments during the early part of 2027, or during the full year of 2027?
Speaker #6: So, first is on loan growth. If you can break it down a bit by segments in Chile. And my second question is on capital.
Speaker #6: We are seeing some regulatory changes come through. Any estimated impact that you see on your capital ratios with the upcoming regulatory changes? Thank you.
Speaker #1: Thank you. Neha for your questions. Regarding loan growth, it is important to remark that when we estimate, when we did it, we did our first estimation for growth for loan growth for this year, our estimations on GDP was a little bit better than that we actually saw for the first half of the year.
Speaker #1: And in Chile, as Sergio said, we expect a 1.2% growth in GDP for this year. So our loan growth is pretty correlated to the development and the growth of the country.
Speaker #1: Having said that, we still are growing faster than the industry. As I said in my presentation, we still have growing in our commercial portfolio.
Speaker #1: We still are the leaders of the commercial portfolio. As I said, given that we just have the approval reform and the other changes that the government has put in place, we have better expectation for the next semester and for next year.
Speaker #1: We expect that companies will increase their investments, as we are the leading company in that segment. We also expect to have a higher increase in our loan portfolio.
Speaker #1: Regarding consumer portfolio, we are growing 8%. We think that is a good number given that also the macroeconomic environment and the unemployment is a little bit higher for us.
Speaker #1: So, we have been very prudent in order to grow in the affluent segment, and also with the good segments in leader BCE and Match.
Speaker #1: Regarding the capital structure, the CMF just put or sent a modifications for the internal models for provision and capital. And we think that in the long term, this will be positive.
Speaker #1: Because as the document said, in Chile, the density of the assets are a little bit higher than those of compare industries. Or banks in other countries.
Speaker #1: And so, in the long term, we expect that it will have a positive impact, but the timeframes are long. We expect that no sooner than 2028 we will have some of these internal models put in place, and it will have an impact on our capital ratios.
Speaker #2: Lisa, we're done.
Speaker #6: Yeah. Thank you so much. That was very good. Thank you.
Speaker #2: No, thank you. Thank you. Nice to hear you. Now we have Andrés Soto from Santander Investment with the next question. Hi, Andrés. How are you?
Speaker #4: Hi, Andrés. Hi, everybody. Thank you for the opportunity to ask questions. I have three questions, but I'm going to go one by one. The first question is regarding the loan growth.
Speaker #4: You guys continue to outperform the market in Chile. You continue to gain market share. When you look at ahead do you expect that the growth is going to continue to be driven by these market share gains and which segments are you guys targeting or you believe that the market is already showing signs of recovery and you are just going to benefit from that performance?
Speaker #1: Thank you, Andrés. Yes, as I said to Neha, we are optimistic about the second semester. And for next year, for the commercial portfolio, but also for the consumer portfolio in the commercial portfolio as you said, we are leading the market.
Speaker #1: But we think what we still have opportunities in some industries and in some regions of Chile and also in some segment in order to capture more market and to benefit from the faster growth of the country.
Speaker #1: And in the consumer segment, we have talked that we are focusing on the affluent segment. And we are gaining market share in that segment.
Speaker #1: And we are growing at 8%. For this year, in Leader BCE, we have also recovered some growth. Remember that in Leader BCE, a couple of years ago, we had a portfolio that had a level of risk that was a little bit high.
Speaker #1: So, over the last years, we've been focusing our growth on the better clients of that portfolio, and for now, we are growing in that, also in a better segment within that portfolio.
Speaker #1: So yes, in both portfolios, consumer and commercial, we expect we will continue to gain market share in the next quarters.
Speaker #4: Thank you, Roberto. My second question relates to capital. First, on these regulatory changes for internal models, I understand that for banks with international operations, the banks will be able to use whatever they have abroad. So, can you please explain how the new methodology for Chile compares to what you currently do at CNB, and if you expect any changes after these regulatory changes? As you say, it is going to take some time, but will that change in any way the way in which you incorporate US operations into your Chile numbers?
Speaker #1: Okay. Yes. Regarding our capital structure, and regarding the minimum that the CMF put to the banks here in Chile, we have this systemic risk buffer that we have to put to all the asset that we have in our balance sheet.
Speaker #1: So with these changes, we expect—not for the changes in models, but for the changes in the society with the BCE group—we expect that this systemic risk adjustment will be a little bit lower.
Speaker #1: But the main change from City National Bank, it will come from the BCE group changes rather than from the internal models.
Speaker #4: Perfect. And that brings me to the third question, which is, if you can provide us any idea of how the capital ratios will look like after the transaction is completed.
Speaker #1: Yeah. Our current estimation after the transaction, we expect that our local consolidated figures in Chile will decrease in more or less 100 basis points.
Speaker #1: And that's when it begins, but then we expect to recover. As I said in my presentation, our ability to generate capital from our net income is faster than the growth that we are having in our loans portfolio.
Speaker #1: So yes, we will have impact at the beginning, but then we expect to recover to the 11% CET ratio that is our target.
Speaker #4: Perfect. And if I may follow up, when you look at the capital structure post-transaction, you will gain some flexibility from potential additional leverage at the holding company level.
Speaker #4: What will be the priority of that flexibility? Will be to capitalize the Chilean subsidiary or will be to do M&A or. Distributing at the US probably or distributing excess capital to shareholders?
Speaker #1: Yeah, for now, Andrés, we are focused on delivering the changes at BCE group. So we have all the options that you mentioned, but all of them will be analyzed when we finish the process.
Speaker #4: And I don't remember if you mentioned this already, but when are you guys expecting this to be completed?
Speaker #1: We don't have a date. Yeah, because as I said in my presentation, we are looking for authorization from Chile, the United States, and Peru, and we are sending them all the information that they are requiring. And so we don't want to put a date because we want to do it in the best way possible in order to have these approvals.
Speaker #4: Understood. Thank you so much, Roberto, for your.
Speaker #1: Thanks, Andrés.
Speaker #4: Yes, thank you, Andrés. And looking at the time, we have time for one more question, and it's coming from Daniel Mora from CreditCorp.
Speaker #4: Hi, Daniel, how are you?
Speaker #5: Hi, good morning. Thank you for the presentation and congratulations on the results. I just have one question regarding the cost of risk. The cost of risk has averaged around 0.6% in the last two and a half years, which has been very positive.
Speaker #5: You are mentioning that you expect it to remain flat at least in 2026, but I'm wondering if considering the long growth in consumer loans and also the current level of unemployment, do you expect it to increase in the coming years or could we expect the current cost of risk of 0.6 on average to be like the normalized figure also in the long term?
Speaker #5: Thank you so much.
Speaker #1: Thank you, Daniel. Our structural cost of risk and our portfolio of our portfolio for the last couple of years, we've been working in all our segment to build a portfolio that is more stable for macroeconomic environments.
Speaker #1: As I said in the consumer portfolio, we have been focusing on the affluent segment and in the SMEs, we are growing only with collateralized loans and in commercial with corporates and big companies we are focusing in the industries that have momentums and are more stable regarding the macroeconomic conditions.
Speaker #1: So, yeah, I mean the first part of the year has been very good. We are not immune to the macroeconomic conditions. But as Sergio said, we expect that for the coming months, the macroeconomic conditions should be a little bit better than we have seen now, on unemployment and on other macroeconomic indicators.
Speaker #1: So we expect as we said in the guidance that our cost of risk will continue flat or in the levels that we see it now and we to continue to closely monitor the macroeconomic scenario in order to estimate any impact that we could have.
Speaker #5: Okay, perfect. Very clear. Thank you so much.
Speaker #1: Thank you, Daniel. Okay, with that, we finish today's conference call. Thank you very much for your attention and for your question. And see you and Andrés will close today.
Speaker #1: Thank you very much.
Speaker #4: Thank you all, guys. As always, and as usual, the entire team is already ready to your next question in the coming days. So thank you very much and have a good one.
