Recovering Loan Growth And Long-Term Prospects Argue For Credicorp

Even though lending growth in Peru has slowed dramatically in the past year, as has GDP growth, I can't really complain about the performance at the country's largest bank, Credicorp (NYSE:BAP). The shares are up more than a third since my last update on the company, which most of that move occurring in the last four months as the economic and political situations in Peru seem to be improving. 

I still believe that high-teens long-term ROE can support double-digit earnings growth at Credicorp, but I've become incrementally more bullish on Credicorp's ability to hold on to its strong ROEs as the Peruvian market matures. Credicorp remains a strong player across the board, and management seems committed to sustainable growth and good capital management. Although the shares only seem to be slightly undervalued today, I still believe that they can generate double-digit returns from here with an increasing dividend payout.

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Recovering Loan Growth And Long-Term Prospects Argue For Credicorp