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GFNORTE
October 23, 2015
Conference Call: 3Q15 Results
2 2
Summary
Million pesos 3Q15 QoQ YoY
Net Income 4,284 7% 6%
NII 11,840 2% 9%
Service Fees 2,488 0% 22%
Loans 500,208 3% 12%
Deposits 474,892 3% 16%
ROE 13.2% 0.56pp (0.64)pp
Acceleration on EPS
Net Income growth of 7% QoQ.
Increasing EPS to $1.54 pesos and constant
positive growth.
ROE at 13.2%, 56pp above 2Q15 .
Adequate growth in recurring revenues on the
back of loan & deposit growth and fee income.
1.54
1.10
1.20
1.30
1.40
1.50
1.60
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2013 2014 2015
EPS
EPS Growth (QoQ)
20%*
11%*
* Percent of income from Trading and Other Income
4.3%
2.6%
-8.2%
2.7%
0.2%
3.1%
8.1%
-5.5%
1.6%
3.2%
7.0%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2013 2014 2015
3 3
Revenue Mix
4,160
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2013 2014 2015
Recurring Operating Profit
Strong business focus on growing
Recurring Operating Profit.
Recurring Revenues: (NII + net fees excluding portfolio recoveries - Operating Expenses – Provisions)
4 4
Million pesos 3Q15 QoQ YoY
NII Loans 9,497 4% 8%
NII Repos 1,018 3% 16%
NII Valorization Adjustments* 84 34% 57%
NII Insurance & Pensions 1,241 -8% 8%
NII Before LLP 11,840 2% 9%
Net Interest Income
NII from loan book aligned with loan
growth.
NII from repo ops positive as interest
rate gap closed.
Quarterly decline in Insurance &
Annuities NII, explained by 170m
charge in Insurance claims, related to
one time adjustment to IBNR reserve
(which is accounted in Claims as per
regulator).
* Includes valorization of Financial Assets & Liabilities for FX or inflation, as appropriate.
9,497
6,000
7,000
8,000
9,000
10,000
11,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2013 2014 2015
NII Loans
5 5
Non Interest Income
Continued strong core banking
revenue growth
Service Fees are flat in the quarter on
lower wholesale related client fees.
But of these, core banking fees
continue to post a strong 5% quarterly
growth rate.
Quarterly Trading Income below 800m
guidance due to high volatility in
August, but all components of the
result are positive.
3Q15 QoQ YoY
Service Fees 2,488 0% 22%
Trading Income 659 -19% -52%
Other Income 828 54% -25%
Total 3,976 4% -12%
3Q15 QoQ YoY
Fund Transfers 234 20% 45%
Account Management Fees 529 1% 40%
Electronic Banking Services 1,287 4% 14%
Total 2,050 5% 23%
Core Banking Fees
Non Interest Income
3Q15 QoQ YoY
FX Gains 354 201% 57%
Trading Gains 173 -42% -79%
Mark to Market Gains 132 -67% -58%
Total 659 -19% -52%
Trading Income
Million pesos
6 6
Expenses and Efficiency
Working Efficiency Program
Efficiency ratio on a downward trend
with excellent behavior on both
components:
Higher income
Lower expenses
We expect lower expenses for the 4th
quarter and maintain 47% target on
efficiency for full year.
Income - Expenses
46.3%
42%
44%
46%
48%
50%
52%
54%
1Q 2Q 3Q 4Q 1Q 2Q 3Q
2014 2015
Efficiency Ratio
0
5,000
10,000
15,000
1Q
04
1Q
05
1Q
06
1Q
07
1Q
08
1Q
09
1Q
10
1Q
11
1Q
12
1Q
13
1Q
14
1Q
15
Income
Expenses
8,590
7,670 7,575
7,328
4Q14 1Q15 2Q15 3Q15
Expenses
-1.2% -3.3%
7 7
Consumer Loan Portfolio
Banorte's credit card book expands
much faster than the industry.
And higher quarterly growth rates for
all the consumer books.
Loan expansion with excellent mix
*
14.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
15.0%
17.5%
J F M A M J J A S O N D J F M A M J J A
2014 2015
Credit Card Balance Growth (YoY)
Banorte
Industry
5.2%
4.4% 4.2%
3.3%
-2.5%
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
1Q 2Q 3Q 4Q 1Q 2Q 3Q
2014 2015
Consumer Loan Balances Growth (QoQ)
Credit CardAutoPayrollMortgage
8 8
Deposits
Good rate of growth and mix for deposits
Demand 17% YoY
Time 13% YoY
Deposits Growing Faster
65%
35%
68%
32%
3Q13 3Q15
Demand
15.6%
8%
10%
12%
14%
16%
18%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2013 2014 2015
Deposits Growth (YoY)
Time
9 9
Afore
9M15 net income increased 7% YoY
despite higher affiliation costs in the
quarter.
AUM growth of 4% YoY
Fee %
Consolidating our Afore business
Dec'13 Dec'14 Dec'15
XXI Banorte 1.10 1.07 1.04
Industry 1.28 1.19 1.11
Million pesos 3Q15 QoQ YoY
Net Income 575 -18% 16%
Equity 23,659 2% -1%
Assets 24,932 3% -1%
AUM 615,180 -1% 4%
ROE* 9.8% (2.6)pp 1.5pp
* Excluding goodwil 40.8%
1,762 1,753
1,877
9M13 9M14 9M15
Net Income
7%
10 10
Insurance & Annuities
Seguros Banorte (Insurance)
9M15 net income increased 35% &
28% YoY on Insurance & Annuities.
Books.
ROE slightly lower on Insurance YoY
but stronger on Annuities.
Adequate operating trends
Million pesos 3Q15 QoQ YoY
Net Income 490 -19% 25%
Equity 6,278 8% 38%
Assets 25,597 -4% 17%
Written Premiums 3,476 -6% 26%
ROE 32.6% (9.7)pp (1.2)pp
Pensiones Banorte (Annuities)
Million pesos 3Q15 QoQ YoY
Net Income 97 34% 25%
Equity 1,534 7% 6%
Assets 66,977 3% 13%
Written Premiums 1,654 -16% -26%
ROE 26.2% 6.2pp 4.2pp
387
1,248
1,679
9M13 9M14 9M15
Insurance
+334%
+35%
57
202
258
9M13 9M14 9M15
Annuities
+349%
+28%
Net Income
11 11
Asset Quality
Lowest NPL ratio in two years.
New NPL formation much better than
the prior year.
Stronger Asset Quality trends than the
Industry.
Trends moving in the right direction
-504
861 940
-658 -819
522
-278
1T 2T 3T 4T 1T 2T 3T
2014 2015
NPL Formation
2.98% 3.12%
3.25%
2.94%
2.73% 2.80%
2.67%
2.0%
2.5%
3.0%
3.5%
1Q 2Q 3Q 4Q 1Q 2Q 3Q
2014 2015
NPL Ratio
Industry
Banorte
Industry 3Q15 as of Aug'15
12 12
Asset Quality Trends
Improvements in all books except
payroll and SME.
Corporate NPL is 0.1% excluding
homebuilders.
Government loans clean.
2Q14 3Q14 4Q14 1Q15 2Q15
Credit Cards 5.9% 5.5% 5.5% 5.9% 5.5%
Payroll 2.2% 2.3% 2.2% 2.5% 2.6%
Car Loans 1.9% 2.0% 1.5% 1.9% 1.7%
Mortgages 1.4% 1.4% 1.3% 1.2% 1.1%
Commercial 5.0% 4.4% 3.8% 3.9% 3.6%
SMEs 9.8% 10.0% 8.8% 9.5% 9.5%
Commercial
ex-SMEs 3.1% 2.2% 2.1% 2.1% 1.8%
Corporate 6.8% 6.3% 6.4% 6.5% 6.4%
Total 3.3% 2.9% 2.7% 2.8% 2.7%
NPL Ratio
Stable Asset Quality
GFNORTE
October 23, 2015
Conference Call: 3Q15 Results
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