Credicorp Ltd. (BAP) Cash Flow Statement

The bank's core earnings power is robust, with net income trending upward and supporting a strong capital generation profile. However, the extreme volatility in operating cash flow, as seen in the OCF/NI ratio ranging from -3.96 to 3.33 over the past year, indicates that reported earnings are not a reliable proxy for near-term cash generation. This pattern is typical for banks where loan originations and deposit flows dominate the cash flow statement, making the balance sheet a more critical indicator of capital strength.

The cash flow statement reveals that the primary driver of operating cash flow is not loan activity but rather the net change in customer deposits and other banking liabilities. The large positive swings in OCF, such as in Q2 2025 and Q2 2026, likely correspond to periods of strong deposit gathering, which provides a stable, low-cost funding base. Conversely, the significant outflows suggest periods of deposit outflows or increased funding for loan growth, highlighting the bank's sensitivity to domestic liquidity conditions.

The bank maintains a consistent and substantial dividend payout, which appears well-covered by its net income. The dividend payment in Q2 2026 represents a return to the higher payout level seen in Q2 2025, following a period of minimal payouts. This pattern suggests management is committed to returning capital but may time payments to align with periods of stronger cash generation. The minimal buyback activity indicates a preference for dividends as the primary capital return mechanism.

The steady decline in provisioning expense is a positive signal for the bank's asset quality and future profitability. This trend aligns with the prior income statement analysis noting normalization in credit costs. However, the cash flow impact of provisions is embedded within operating cash flow, and the reduction in provisions directly contributes to higher net income and, all else equal, stronger cash generation. Investors should monitor whether this decline reflects genuine improvement in borrower creditworthiness or a more optimistic provisioning stance.