Banco de Crédito del Perú has had to adjust its business strategy to focus on improved efficiency to cushion its profitability against weakening economic growth in the country, Moody's said in a June 7 report.
The bank should reduce its growth projections and focus on cost-saving measures due to weaker growth outlook in Peru amid infrastructure-related corruption investigations and devastating floods, the rating agency noted.
"That said, the bank will continue to grow its footprint given its strong market position, diversified lending mix and Peru's dynamic economy," said Valeria Azconegui, a vice president and senior analyst at Moody's.
However, Moody's noted that the bank's efficiency metrics, albeit having improved over the past years, are still some of the weakest among Peruvian lenders. The rating agency views this as an opportunity for the bank to improve.
"[Banco de Crédito del Perú's] earnings should remain relatively robust as it seeks to lower operating and funding costs, thanks to its strong franchise and still manageable credit costs, notwithstanding rising delinquencies," Moody's said. However, the bank's expansion into higher-yielding consumer and SME segments will likely result in a further increase in delinquencies, the rating agency cautioned.