BAP - Credicorp Taking Prudent Action But COVID-19 Is Hitting Peru Hard
- Peru has been among the most aggressive in Latin America in pursuing financial stimulus, but the impact of COVID-19 has still been more severe on Peru than other Andean economies.
- Credicorp has been an active participant in subsidized loan programs, possibly leading to longer-term share growth, but it is hitting spreads in the near term.
- Aggressive provisioning is hitting earnings hard now, but Credicorp's reserving looks quite conservative relative to other LatAm banks, and I believe this will benefit the company long term.
- Credicorp looks meaningfully undervalued on long-term core earnings, but weak spreads and provisioning still create some shorter-term risks.
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Credicorp Taking Prudent Action, But COVID-19 Is Hitting Peru Hard