In a conference call, which followed from the bank's earnings release for the full year, Deutsche Bank highlighted Credicorp's branch expansion plan that will keep expense growth high, leading to a slight deterioration in efficiency from the 51% achieved in 2012.
Deutsche Bank analyst Tito Labarta pointed out that following the stock's 10% price decline in the days following the results it now trades at "13.5x 2013E P/E, a discount to banks in Chile, Colombia, and Mexico (average of 14.3x), despite better earnings growth and profitability than most."
For 2013 and 2014, Deutsche Bank expects earnings at the bank to rise by 12% and 14%, respectively, with return on average equity of 19.8% and 19.6%, respectively.
The bank's conference call pointed to loan growth of 2.5-3.0 times GDP growth of approximately 6.5% in 2013, implying loan growth of 16-20%, in-line with the system but with faster growth in the retail segment, which should benefit the net interest margin (NIM).
Deutsche Bank forecasts loan growth of 18% for 2013 with NIM expanding 10bps and expense growth rising by 24% in 2013, partially offset by a 21% increase in operating revenues.
Deutsche Bank expects gradual deterioration in asset quality going forward with the NPL ratio rising 30bps from 1.8% in 2013, following a 20bps increase in 2012, mainly due to the shift in loan mix towards more retail loans.