Aug 11 (Reuters) - Credicorp, one of Peru's biggest financial holding companies, said on Friday it was lowering its structural loan portfolio growth forecast to between 1% and 4% this year as it expects an economic hit from the El Nino weather phenomenon.

The South American lender, which also warned of higher costs of risk, had previously predicted 6% to 10% growth for its structural portfolio, made up of non-government program loans.

The cut was announced during a quarterly earnings call a day after Credicorp posted a 23% profit jump from April to June, beating analyst forecasts. However, shares still fell some 4% by afternoon trading.

The periodic El Nino phenomenon, which scientists say is compounded by climate change, lasts between months and years, warming the Pacific Ocean and fuelling tropical cyclones, floods and rainfall across the Americas and elsewhere.

Credicorp said it believed the country was far better prepared than in 2017, when according to government estimates El Nino stripped 1.5% off economic growth and cost 2.9% of GDP in infrastructure losses.

While Credicorp acknowledged its tough environment, Citi analysts highlighted strong earnings and good performance of digital initiatives, saying these show management's ability to "navigate complex waters in a successful manner."

Despite cautious guidance, Credicorp said it does not expect to cut investments as it forecasts weak to moderate effects from El Nino by next summer.

'FRAGILE STABILITY'

Protests that peaked at the turn of the year following the ousting of Peru's former president have largely died down, a company executive said on the call, though there is still only "fragile political stability."

Under current conditions, he said he did not believe Peru's economy can grow enough over the next few years to reverse the increases in poverty rates seen during the coronavirus pandemic.

"Peru needs to grow much faster. This goes beyond the impact on our business," the executive said. "We need a lot of structural reforms and we don't see them being done in the near future."

The world's No. 2 copper producing country has had six presidents in five years.

Historically one of the region's fastest growing economies, Peru's economy has shrunk for the past two quarters, according to preliminary data, amid the protests, road blockades and adverse weather that hit the country's farming and fishing sectors.

Peru's central bank has also warned of a bigger-than-expected economic blow from the protests and El Nino. (Reporting by Sarah Morland and Marion Giraldo; Editing by Brendan O'Boyle, Kirsten Donovan and Cynthia Osterman)