Intercorp Financial Services Inc. — FY2022 Form 20-F
Business context and reporting period. This is an audited annual report for the fiscal year ended December 31, 2022, not a standalone fourth-quarter filing. IFS is a Panama-incorporated holding company operating principally in Peru through banking (Interbank), insurance (Interseguro), wealth management (Inteligo) and payments (Izipay). Financial statements are in soles and prepared under IFRS. IFS consolidated Izipay from April 2022 after acquiring the remaining 50% interest.
Key financial metrics
| Metric | FY2022 / Dec. 31, 2022 | FY2021 / Dec. 31, 2021 |
|---|---|---|
| Net profit | S/1,670.7 million; attributable to IFS shareholders, S/1,660.6 million | S/1,800.2 million; attributable, S/1,790.2 million |
| Adjusted net profit | S/1,448.1 million | Not presented as adjusted |
| Net interest and similar income | S/4,209.2 million | S/3,547.7 million |
| Interest and similar income / expense | S/5,871.3 million / S/1,662.1 million | S/4,605.6 million / S/1,057.9 million |
| Net fee income from financial services | S/1,137.4 million | S/823.8 million |
| Operating cash flow | Used S/1,012.1 million | Provided S/1,345.8 million |
| Investing / financing cash flow | Used S/1,393.6 million / S/1,276.2 million | Used S/2,326.5 million / S/861.7 million |
| Cash and cash equivalents | S/12,707.8 million | S/16,416.3 million |
| Total assets / equity | S/87,482.6 million / S/10,046.0 million | S/89,953.9 million / S/9,555.4 million |
| Gross loans / deposits and obligations | S/47,025.4 million / S/48,530.7 million | S/44,688.2 million / S/48,897.9 million |
| Profitability and efficiency | ROE 17.7%; adjusted ROE 15.4%; ROA 1.9%; NIM 5.0%; risk-adjusted NIM 4.0%; efficiency ratio 36.1% | ROE 19.3%; ROA 2.0%; NIM 4.1%; risk-adjusted NIM 3.7%; efficiency ratio 34.7% |
| Asset quality and bank capital | Past-due loans 3.0% of gross loans; cost of risk 1.8%; Interbank CET1 12.0%, total capital ratio 15.1% | Past-due loans 3.5%; cost of risk 0.9%; CET1 12.5%, total capital ratio 15.9% |
| Debt and funding | Bonds, notes and other obligations S/7,906.3 million; due to banks and correspondents S/7,100.6 million | S/8,389.7 million and S/8,522.8 million, respectively |
IFS reported S/87.5 billion in total assets, S/47.0 billion in gross loans, S/48.5 billion in deposits and obligations, and S/10.0 billion in equity at year-end. Cash and cash equivalents declined by S/3.7 billion during 2022; operating cash flow was negative, driven in part by loan growth and changes in funding and other balances. The filing does not provide a single conventional consolidated revenue total in the summary data.
Material changes versus the prior period
- Net profit fell 7.2%, principally reflecting higher loan impairment charges, lower other income and higher expenses. Loan impairment expense rose to S/830.6 million from S/381.6 million; cost of risk increased to 1.8% from 0.9%.
- Net interest income increased 18.6%, supported by higher interest yields, while interest expense rose 57.1% amid higher funding costs. Consolidated NIM improved to 5.0% from 4.1%.
- Gross loans grew 5.2% while deposits and obligations decreased 0.8%. Total assets declined 2.7%, with lower cash and investments partly offset by loan growth.
- IFS recognized a non-recurring S/222.5 million fair-value gain when it acquired control of Izipay. Excluding this item, management’s non-GAAP adjusted net profit was S/1,448.1 million and adjusted ROE was 15.4%. Adjusted figures are not IFRS measures.
- Segment results: banking profit S/1,374.1 million; insurance profit S/248.0 million; wealth-management loss S/141.4 million; payments profit S/41.1 million since consolidation. Izipay’s full-year reference revenue and profit, including pre-acquisition months, were S/754.3 million and S/51.2 million, respectively.
Outlook, management commentary, risks and unusual items
- Management’s priorities include digital transformation, customer growth, payments ecosystem expansion, risk management and technology investment. Digital adoption advanced: Interbank reported 70.9% of retail clients as 100%-digital customers at year-end, and mobile banking accounted for 64.1% of December monetary transactions.
- The filing cites Central Reserve Bank of Peru forecasts of GDP growth of 2.6% for 2023 and 3.0% for 2024 in one section; elsewhere it cites a 2.9% 2023 estimate. Forecasts are management-reported, not company earnings guidance.
- Peru’s 2022 inflation was 8.46% (rounded to 8.5% in some sections), and the policy rate reached 7.50%. Political instability, social unrest, inflation, currency volatility, weaker growth, commodity exposure and changes in financial regulation could adversely affect results and asset quality.
- Credit, market and liquidity risks include rescheduled loans and Reactiva Perú exposures. At year-end, Interbank had S/2.3 billion of Reactiva Perú loans outstanding, of which approximately S/2.0 billion were government-guaranteed; total rescheduled loans were S/5.0 billion.
- IFS and its subsidiaries have material exposure to sovereign and global bonds: Peruvian sovereign and global bonds and BCRP certificates represented 55.1% of the investment portfolio before accrued interest. Interseguro also held S/1,287.7 million in real-estate investments.
- IFRS 17 took effect January 1, 2023. Based on preliminary estimates, management expected adoption could reduce net equity by 8%–10% as of January 1, 2022.
- IFS declared a U.S.$136.2 million dividend based on FY2022 results, payable in 2023. Its stated policy is to distribute at least 20% of annual profit, subject to regulatory capital and financial conditions. Shareholders approved a repurchase program of up to U.S.$100 million on March 31, 2023.
- Auditors issued an unqualified opinion on the IFRS financial statements and internal controls. However, the 2022 internal-control assessment and audit excluded PMP and Izipay, acquired in April 2022.
- Inteligo Bank is a defendant in two Fairfield/Madoff-related lawsuits seeking approximately U.S.$11 million in redemption payments. One dismissal was appealed; in the other, a motion to dismiss was denied and the bank filed an answer. Interbank also disclosed tax disputes, including approximately S/290 million claimed for certain historical matters; management recorded no provision, citing its view that its position is supportable.
Most important facts for investors to verify
- Reconcile the reported and attributable net profit figures with audited statements, and validate the S/222.5 million Izipay fair-value gain and management’s adjusted-profit reconciliation.
- Review the operating cash-flow decline, cash and liquidity composition, deposit stability, and debt maturities—including Interbank’s 2023 notes and IFS’s U.S.$300 million 4.125% senior notes due 2027.
- Assess loan impairment trends, the post-model credit-loss adjustments, coverage, and the performance of rescheduled and Reactiva Perú loans as relief measures expire.
- Verify capital buffers against evolving Peruvian Basel III requirements and confirm the impact of IFRS 17 adoption on equity and reported insurance earnings.
- Track Izipay’s post-acquisition performance and integration, and whether digital growth translates into durable fee income and operating efficiency.
- Monitor the Fairfield/Madoff proceedings, Interbank tax disputes, and any material developments in Peru’s political, regulatory or macroeconomic environment.