Credicorp Arguably Not Getting Its Due As Loan Growth Accelerates

I don't want to overdo the comparisons, but given that I follow both Credicorp (BAP) and Itau Unibanco (ITUB), it's tempting to compare the evolution of these two top-notch Latin American lenders. More to the point, I see Itau in a place similar to where Credicorp was six to 12 months ago, when the company was seeing improving credit quality but sluggish loan growth as the country's economic situation was sorting itself it. At this point, though, I think Credicorp is in a pretty good place to generate attractive earnings growth, as Peru's economy is going strong, loan demand is accelerating, and the company's digital initiatives are really starting to make a difference.

As far as the stock goes, I was pretty lukewarm on Credicorp six months ago, and the shares are down a bit since then - trailing Itau, but outperforming a collection of other names like Banco de Chile (BCH) and Bancolombia (CIB). Given that I think Credicorp shares are now priced for low to mid-teen annualized returns, I think this is a name to consider again looking into 2019.

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Credicorp Arguably Not Getting Its Due As Loan Growth Accelerates