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Intercorp sees lower loan growth for Peru, but sticks with its own guidance

Intercorp Financial Services Inc. maintained its own 2019 loan growth guidance even as it dropped lending expectations for the Peruvian financial system as a whole amid lower-than-expected economic expansion and weaker consumer confidence.

Speaking during an Aug. 13 conference call to present Intercorp's second-quarter 2019 results, CEO Luis Felipe Castellanos López-Torres said Peru's financial system was still growing in a "sustainable way and remains profitable," despite the subdued environment. Intercorp also expects economic growth to pick up in the second half of 2019 and into 2020, he added.

The company left its own lending guidance at a "low-double digit level," with the speed of retail lending growth picking up, compensating for a slump in commercial banking.

That guidance indicates that Intercorp, which controls Banco Internacional del Perú SAA, expects to handily outpace the broader sector, as it cut the forecast for system-wide loan growth in Peru's banking sector to between 6% and 8% from a previous 8%-to-10% range.

During the call, CFO Michela Casassa Ramat said Intercorp continued to see a "very strong" asset quality in its retail portfolio, with other segments doing less well. "There has been some minor deterioration in the commercial loan book in the mid-sized and small businesses," the CFO noted, attributing that with the "slower growth... at the system level."

In addition, the company said it was sticking with its asset quality guidance of a range of between 2.5% and 3.0%.

Intercorp posted a 71.3% jump in its second-quarter net attributable profit, up to 347.9 million Peruvian soles from 203.1 million soles earned in the year-ago period.

The year-over-year improvement was mainly attributed to a reduction in its adjustment of technical reserves within its insurance segment, Interseguro swinging to a 32.8 million-sol profit from a loss of 113.7 million soles a year earlier. Casassa Ramat described Interseguro's result as a "regular quarter," considering IFRS figures and within previously set targets.

As of Aug. 12, US$1 was equivalent to 3.39 Peruvian soles.