Peruvian Financial Sector Profits Surge, But Political Uncertainty Looms
A remarkable 37% jump in net profits for Peruvian banks in 2025 – reaching a record S/ 14,147 million – signals a robust recovery and a period of significant growth for the nation’s financial system. This surge, coupled with similar gains across savings banks, financial companies and even credit companies, paints a picture of economic resilience. But beneath the surface of these impressive figures lies a critical question: can this momentum be sustained in 2026, given the potential for political disruption?
The Engines of Growth: Digitization and Lower Interest Rates
The impressive financial performance of 2025 wasn’t simply a matter of luck. A key driver was the continued digitization of banking processes, leading to increased operational efficiency. As Arturo García, director of the Lima College of Economists, explained, these advancements, combined with a reduction in the Central Reserve Bank (BCR) reference rate from 4.75% to 4.25% throughout the year, lowered funding costs for financial institutions. This created a virtuous cycle, boosting profitability and encouraging lending.
Beyond Banks: A Broad-Based Recovery
The positive trend extended beyond traditional banks. Municipal savings banks doubled their net profits year-over-year, reaching S/ 850 million, a new high. Credit companies, benefiting from increased consumer spending, saw an even more dramatic increase of 82%, accumulating S/ 81 million in profits. Even rural savings banks, which had struggled with losses for five consecutive years, rebounded, with only one reporting a loss in 2025. This broad-based recovery demonstrates the strengthening of the Peruvian economy as a whole.
The Role of Declining Delinquency Rates
A significant factor contributing to the improved financial results was a marked decrease in delinquency rates. With a more dynamic economy, financial entities reduced provisions for credit risk, leading to improved net results. As Yang Chang, a professor at the University of Piura, noted, economic growth directly correlates with better credit placement, portfolio quality, and profitability for lending institutions. This represents a significant turnaround from 2024, when delinquencies exceeded 8% for half of microfinance institutions.
Looking Ahead: Political Risk as the Key Variable
Despite the positive outlook, analysts caution that the financial sector’s success in 2026 hinges on political stability. The upcoming elections pose a significant risk. Yang Chang warns that a “disruptive mandate” could alter credit granting policies and potentially derail the current positive trajectory. Arturo García echoes this sentiment, outlining two potential scenarios: continued growth with limited political risk and a reduction in the BCR rate, or a more pessimistic outlook if political noise leads to social unrest.
Two Potential Scenarios for 2026
A projected economic growth of around 3%, coupled with a stable political landscape and continued reductions in the BCR rate, would likely sustain the positive momentum. Yet, any significant political upheaval could dampen economic activity and negatively impact the financial sector. Víctor Blas, from Financiera Confianza, remains optimistic, projecting continued credit demand and favorable inflation rates, but acknowledges the importance of political stability.
The Peruvian financial system demonstrated remarkable resilience in 2025. However, the path forward is not without its challenges. The ability to navigate the upcoming political landscape will be crucial in determining whether the sector can maintain its impressive growth and continue to contribute to the nation’s economic prosperity. What impact will the political climate have on the financial sector? Share your thoughts in the comments below!
