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Recovery Bank

November 16, 2007

Banorte Investor Day

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Contents

1. Background

2. 3Q07 Results

3. Perspectives 2008 – 2009

3

Background

4

Net IncomeMILLION CONSTANT PESOS

2003 2004 2005 2006

Sólida

752 509 820 495Banorte

56 157 81 208

Total in Ps$ 808 666 901 703

74 61 82 64Equivalent in US$

Accum3Q07

286

210

496

45

* Exchange rate at end of September 07 (10.93).

Effective Tax Rate (%) 6% 7% 22% 28% 32%

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Assets Under ManagementBILLION CONSTANT PESOS

18

24 35

4435

50

58

2003 2004 2005 2006

2

68 70 6860

Proprietary

IPAB62

Sep ‘07

1

63

6

2003 2004 2005 2006

Cash 51 50 54 50

Foreclosed / Repossessed 6 3 3 5

Restructured 7 7 10 7

Effective Recovery 64 60 67 62

Discounts 36 40 33 38

Net Resolution 100 100 100 100

PERCENTAGES

Resolution Performance

Accum 3Q07

53

4

12

69

31

100

7

10 9

1 3 4 31

11

2

44

45

2 3

2000 2001 2002 2003 2004 2005 2006

BILLION PESOS

Asset Purchases

Real Estate Assets

Corporate Loans

Mortgage Loans

2000 2001 2002 2003 2004 2005 2006 Total

Total 21 11 1 7 8 9 9 66

IPAB 21 9 1 2 5 9 9 56

Private Banks - 2 - 5 3 - - 10

21

11

78

9 9

5

30

31

Sources

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Market Assessment 2007

Distressed assets market is at a crossroads…

IPAB assets have been depleted.

Commercial banks asset auctions:

Portfolios with low collection margins and high legal risk.

Newer portfolios yet to come to market.

Sofoles yet to auction distressed mortgage portfolios.

Currently negotiating purchase/administration with 5 Sofoles.

INFONAVIT distressed mortgage auction pipeline:

100,000 mortgages over 3 years

5,000 before the end of 2007

Co-investment scheme.

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Gross Margin

MortgageLoans

CorporateLoans

Price Paid 26% 11% 19%

Effective Recovery 60% 53% 59%

Gross Margin 34% 42% 40%

RealEstate

27%

75%

48%

ACQUIRED LOANS / REAL ESTATE PERFORMANCE AS % OF UPB / COMM. VALUEWEIGHTED AVERAGE 2000-3Q07

WeightedTotal

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3Q07 Results

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Assets Under ManagementCONSTANT BILLION PESOS

TotalAssets

Banorte Portfolio

Acquired Credits

Acquired Real Estate

Investment Projects

98%Proprietary Assets

2%IPAB Assets

Total

Asset OriginCredit

PortfolioReal

Estate

15 1 16

39 1 40

4 - 4

- - 2 2

54 6 2 62

1 0 1

55 6 2 63

-

-

-

-

InvestmentProjects

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Assets Under ManagementCREDIT PORTFOLIO IN CONSTANT BILLION PESOS

Type Total

Mortgage 21

Consumer 7

Commercial 27

Total 55

%

39%

12%

49%

100%

AcquiredPortfolio

16

-

24

40

Banorte Portfolio

5

7

3

15

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Assets Under ManagementREAL ESTATE IN CONSTANT BILLION PESOS

%Type Amount

Houses 2.4 37%

Urban Land 1.1 17%

Non-Urban Land 0.6 10%

Warehouses 0.7 10%

Commercial 0.6 10%

Buildings 0.3 5%

Rights / Non-R.E. 0.4 6%

Total 6.4 100%

Others 0.3 5%

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Assets Under ManagementINVESTMENT PROJECTS IN CONSTANT MILLION PESOS

%Partner Amount

GEO 1,473 79%

URBI 302 17%

Internacional de Inversiones 82 4%

Total 1,856 100%

# Projects

8

2

4

14

95 113

1,195

2003 2004 2005 2006

1,856

Sep ‘07

0

# Projects 4 4 149-

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Assets Under ManagementPROPRIETARY ASSETS IN CONSTANT BILLION PESOS

TotalAssets

Banorte Portfolio

Acquired Credits

Acquired Real Estate

Investment Projects

Total

%$Asset OriginBanorte Risk

%$Reserve and/or Discount

16 9 58% 7 42%

40 36 90% 4 10%

4 3 76% 1 24%

2 - 0% 2 100%

62 48 78% 14 22%

Sub-total 60 48 80% 12 20%

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Resolution PerformanceCONSTANT MILLION PESOS

Indicators

% Cash / Effective Res.% Effective Resolution

Asset Rotation (Years)

61% 69% 8 PP83% 77% (6 PP)

5.9 5.6 (0.3)

Variation$ %

Cash

Foreclosed / Repossessed

Restructured

Effective Recovery

Discounts

Net Resolution

Accum3Q06

Accum3Q07

2,933 2,703 (230) (8%)

281 221 (60) (21%)

317 601 284 90%

3,531 3,525 (6) (0%)

2,233 1,622 (611) (27%)

5,764 5,147 (617) (11%)

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Income StatementCONSTANT MILLION PESOS

ConceptAccum3Q06

Variation$ %

Accum3Q07

Net Operating Revenues

Administrative Expenses

Operating Income

Income Before Taxes & EPS

Net Income

1,511 1,448 (63) (4%)

(467) (468) (1) (0%)

1,044 980 (64) (6%)

Other Expenses (107) (62) 45 (42%)

Financial Expenses (195) (187) 8 (4%)

742 731 (11) (1%)

Income Taxes & EPS (196) (235) (39) 20%

546 496 (50) (9%)

Effective Tax Rate (%) 26% 32%

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Business Qualifications

Rated since 2003 by Fitch Ratings Mexico.

Latest rating obtained (December 06): AAFC1-(mex).

AAFC1-(mex): Financial Credit Asset Manager

Maximum possible rating: AAFC1(mex).

Certified under ISO 9001-2000 by SGS (Société Générale de

Surveillance) since 2004.

Latest review and ratification: May 2007.

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Perspectives 2008 – 2009

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Objectives 2008-2009OVERALL

Generate annual net income of US$60 million.

Maintain leadership (40% mkt share) in distressed assets business.

Grow investment project business with selected partners and industries

Ps $4 billion by the end of 2009.

Improve the resolution process of delayed, past-due, and written-off

loans originated in Banorte.

Maintain AAFC-1(mex) rating and ISO certification.

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Objectives 2008-2009ACQUIRED DISTRESSED ASSETS

Participate in all relevant distressed assets auctions.

Strengthen ties with financial intermediaries most likely to generate

distressed assets for sale / administration.

Leverage relationship with INFONAVIT, the largest mortgage originator

in the country.

Continue improving and differentiating the resolution schemes applied

to the current distressed asset inventory.

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Objectives 2008-2009INVESTMENT PROJECTS

Continue select partner diversification in housing.

Generate investments in infrastructure and tourism with at least 3 to 5

select partners.

Broaden sources of funding via structured-finance.

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Objectives 2008-2009

Maximize loan regularization during the first days of delinquency.

Maintain best-in-class past-due loan indicators.

Accelerate legal collection processes to improve resolution time of

past-due loans.

Improve resolution schemes:

Deepen segmentation of past-due and written-off loans.

Focus.

Differentiation.

BANORTE PORTFOLIO

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Certain statements in this document are

“forward-looking statements”. These

statements are based on management’s

current expectations and are subject to

uncertainty and changes in

circumstances. Actual results may differ

materially from those included in these

statements due to a variety of factors.

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