Citi Comments On Creditcorp Following Strong Earnings Report

Creditcorp's BAP 1Q11 reported net income came in at US$175 million, and included US$9 million in after-tax non-recurring gains booked from the sale of a private equity investment. Excluding this one-time income, recurring net income for the quarter ended 3/31/11 reached US$166 million, and was 8% above Citi's estimate, 28% above 4Q10, and 26% above 1Q10. The beat vs. Citi's estimate was mostly the result of higher-than-projected net interest income (NII), lower loan loss provisions and higher-than-forecast income from FX transactions, which was partially offset by higher-than-estimated operating expenses. 1Q11 recurring ROE reached 23.6%, and was significantly above the 18.7% ROE recorded in the prior quarter, and slightly above the 22.9% ROE posted in the year-ago quarter. Fee income came in strong at US$143 million in 1Q11, and was 4.7% above 4Q10 and 13.6% above 1Q10, getting a boost from fees from contingent loans, drafts and transfers fees. On the other hand, during the quarter ended 3/31/11, OpEx came in virtually flat when compared to the prior quarter, but 10.7% above Citi's estimate, and 26% above the year-ago quarter Citi has a $143.50 PT and Buy rating on BAP BAP closed Monday at $101.27