Seeking Alpha: Credicorp Generating Good Results In An Underserved Market

I was pretty down on Credicorp (NYSE:BAP) shares back in May of 2015, as I didn't think the shares offered enough upside to offset the risk. While the company has done pretty well on an operating basis since then, the shares are down about 10% since that last article and have more or less tracked the movement of the Peruvian nuevo sol versus the dollar.

I continue to have mixed feelings about Credicorp. I think this is a pretty well-run emerging market bank, and I like the company's leadership in a growing under-banked market. I don't like the company's heavy reliance on the Peruvian central bank to subsidize the de-dollarization process (moving from dollar-denominated loans and deposits to PEN-denominated), and I have some modest concerns about the level of reserves. I think the shares are about 10% to 15% undervalued even after incorporating a higher cost of capital, so it's not a clear-cut buy to me right now.

Read more:
Credicorp Generating Good Results In An Underserved Market

Seeking Alpha: Even After A Little Rally, Credicorp Could Have More Headroom

Shares of Peru's largest bank, Credicorp (BAP) have spent the last six months basically just hanging around, with the shares wobbling between $125 and $140. Investors have been mulling over changes in Peru's economy, the de-dollarization of the banking sector, loan growth and default trends, as well as company-specific issues like recent disappointments in earnings and the promising acquisition of Mibanco.

I hope it goes almost without saying that investing in a Peruvian bank carries certain risks above and beyond your typical investment, though clearly investing in banks like Citigroup (C) and so on is hardly risk-free. This looks like a well-run bank, though, and a company that is structured to benefit from both the growth of the Peruvian economy and the maturation of the Peruvian financial sector. Shares appear undervalued on both an ROE and book value basis, with upside to $160 on relatively conservative assumptions.

Please follow this link for more:
Even After A Little Rally, Credicorp Could Have More Headroom