1 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
XNOR
1Q20
GFNORTE GBOOY
Best Bank 2019
México
2 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: Banorte
Duration of the quarantine and GDP forecasts
GDP in the year after a leap year% y/y, difference in basis points
Impact of COVID-19 on GDP and the unemployment rate% y/y, %
Impact to MSMEs: Percentage of vulnerable
businesses under the marginal support scenario%
Final date of the ‘pandemic’
Days under quarantine
Current government support Base case Extraordinary support
GDP Unemployment GDP Unemployment GDP Unemployment
Apr-30 38 -4.8 5.9 -3.5 5.2
May-31 69 -10.7 8.1 -7.8 7.2 -7.1 6.3
Jun-30 99 -18.7 12.5 -10.5 6.2
Jul-15 114 -23.5 14.0 -12.3 6.2
0
20
40
60
80
27-Apr 17-May 6-Jun 26-Jun 16-Jul
6.8
-0.4
2.3
-5.3
1.4 2.1
7.1
-0.2
2.6
-5.0
1.6 2.4
-25.5
-25.0
-24.2 -24.7 -24.3
-26.2 -27
-26
-25
-24
-23
-8
-4
0
4
8
1997 2001 2005 2009 2013 2017
NSA series (LHS)Calendar-adjusted series (LHS)Difference in bps (RHS)
3 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: INEGI, Banorte
We are experiencing the worst recession in the last 40 years
GDP in Mexico during
economic contractions% y/y
GDP in 1983% y/y
GDP in 2009% y/y
GDP in 1995% y/y
GDP in 2020f% y/y
-7.8
-5.3
-0.4
-6.3
-3.7
-4.4
-10 -5 0
2020
2009
2001
1995
1986
1983
-4.6 -5.7 -5.3
-1.8
-20
-15
-10
-5
0
1Q83 2Q83 3Q83 4Q83
-1.5
-9.1-7.5 -6.9
-20
-15
-10
-5
0
1Q95 2Q95 3Q95 4Q95
-5.6-8.9
-5.0
-1.6
-20
-15
-10
-5
0
1Q09 2Q09 3Q09 4Q09
-2.9
-16.2
-9.7
-2.6
-20
-15
-10
-5
0
1Q20 2Q20 3Q20 4Q20
4 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: Banorte with data from INEGI and Banxico
*Interest rate(1980-Sep 1982: CPP; 1982-…: Cetes; Exchange rate: 1980-Nov 1991: ‘para solventar obligaciones en moneda extranjera’; Nov 1991-…: Fix)
However, the great difference to those are inflation levels
Nominal governmental interest rate, inflation and annual exchange rate depreciation%
-50
0
50
100
150
200
250
300 Interest rate Inflation Annual exchange rate depreciation
5 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: Banorte and Presentation from Beatriz Leycegui (SAI, April 15, 2020)
USD/MXN: 24.10 **Nominal GDP in 2019
‘Recovery plan’ to return back to ‘normal’ from COVID-19
Programs from Development BanksMX$ billion, US$ million, % of GDP
▪ Four-month advance to the senior citizen pension▪ Support for:
⎯ Fishermen⎯ Children with disabilities⎯ Benito Juárez Universities⎯ Savings for people without access to financial services⎯ Agriculture⎯ Upkeep for schools
▪ Programs for:⎯ Apprenticeships⎯ Internet for everyone
▪ Guarantee prices▪ Toluca – Mexico City Train▪ Construction of branches of El Banco del Bienestar▪ Recruitment of 31 thousand new elements for the Army, Navy
and National Guard▪ Rural concrete roads▪ New credits and refinancing from INFONAVIT▪ ‘Sowing Life’ program will extend to 200 thousand farmers▪ Expedited returns of VAT to taxpayers▪ No increase to taxes or adoption of counter-cyclical measures or
corporate bailouts to businesses or banks▪ Elimination of 10 deputy ministries▪ Reduction of 25% in wages of high-ranking workers (Deputy
Director and upwards) and end-of-year bonus elimination▪ Savings of 75% in general spending and supplies categories
Institution Measure MXN USD* % of GDP**
Total 61.1 2,535 0.25
BANOBRASLiquidity support for companies in the infrastructure sector
6.0 249 0.02
NAFIN / BANCOMEXT
Liquidity support for "first-floor" financial institutions
10.0 415 0.04
NAFIN / BANCOMEXT
Liquidity support for "second-floor" financial institutions
20.0 830 0.08
NAFIN / BANCOMEXT
Guarantees program for companies and businesspeople
6.3 261 0.03
SHFStabilization of syndicated loans provided to construction companies
8.8 365 0.04
SHF Additional financing for "second-floor" bridge loans 6.0 249 0.02
SHF Small loans for housing improvements 2.0 83 0.01
FNDAttention scheme for the restructuring of debtors' loans
TBD
FND Measures to support the Rural Economy TBDBanco del Bienestar
Clients' Program 2.0 83 0.01
Banco del Bienestar
Outreach Program TBD
Banco del Bienestar
Reactivation of credit demand TBD
FOCIRExtension of the period to divest affected companies
TBD
FOCIRSuspension of commission payments for the management of FICAS
TBD
FOCIR Emerging Program "COVID 2020 - FOCIR-SE" TBD
6 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: Banxico, MoF, CNBV
Policy response from Banxico and financial authorities to provide liquidity…
Reference rate%
Measures announced by
Banxico and the MoF to
improve liquidity
Measures from the Banking
Commission and Banxico for
financial institutions
6.00
2
3
4
5
6
7
8
9
dic.-15 ene.-17 feb.-18 mar.-19 abr.-20
▪ Reduction of the Monetary Regulation
Deposit by $50 billion (US$3 billion)
▪ Adjustments to the interest rate on the
Ordinary Additional Liquidity Facility
▪ US dollar credit auctions (using the Swap
line with the Fed as a financing
mechanism)
▪ Collaboration with the MoF to
strengthen the Primary Dealers Program
• Implementation of government securities
swaps
• Amendment to the purchase option of
government securities for market makers
▪ Adjustments to the accounting criteria to facilitate the granting of support programs to clients
▪ Flexibility of the regulatory framework for capital and liquidity requirements
▪ Advice to banks to refrain from paying dividends and implementing share buyback programs
▪ Delay of the implementation of international regulations
▪ Extension of deadlines for traded
companies to present information to the Commission
7 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: Banxico
…and strengthen credit channels
Additional measures announced by Banxico to promote liquidity and strengthen credit channelsMX$ billion, US$billion, % of GDP
# Measure MXN USD % of GDP
Total 750 30.7 3.1
1Increasing liquidity during trading hours to facilitate the optimal functioning of financial markets and payment systems
- - - - - -
2Extending the securities eligible for the Ordinary Additional Liquidity Facility (FLAO, for its acronym in Spanish), foreign exchange hedging program operations, and USD credit operations
- - - - - -
3Extending the counterparts eligible for the Ordinary Additional Liquidity Facility (FLAO, for its acronym in Spanish)
- - - - - -
4 Government securities term repurchase window 100 4.1 0.45 Temporary securities swap window 100 4.1 0.46 Corporate Securities Repurchase Facility (FRTC, for its acronym in Spanish) 100 4.1 0.4
7Provision of resources to banking institutions to channel credit to micro-, small-, and medium-size enterprises and individuals affected by the COVID-19 pandemic
250 10.2 1.0
8Collateralized financing facility for commercial banks with corporate loans, to finance micro-, small- and medium-size enterprises
100 4.1 0.4
9 Swaps of government securities 100 4.1 0.4
10Foreign exchange hedges settled by differences in US dollars with counterparts not domiciled in the country, to be traded during hours when Mexican markets are closed
- - - - - -
8 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: Bloomberg, INEGI, Banxico, Banorte
MXN forecastsUSD/MXN
Inflation forecasts% yoy, bi-weekly frequency
Reference rate forecasts%
USD/MXN, inflation, and reference rate forecasts
25.01
22.63
22.00
23.47
22.85
19.68
21.00
18.5
19.5
20.5
21.5
22.5
23.5
24.5
25.5
26.5
27.5
Jan-19 Dec-19 Dec-20 Dec-21
2018:4.8
2020:3.22019:
2.8
-2
-1
0
1
2
3
4
5
6
7
8
9
Dec-18 Aug-19 Apr-20 Dec-20
Headline
Core
Non-core2019:7.25
2020: 4.75
2
3
4
5
6
7
8
9
Dec-15 Mar-17 Jun-18 Sep-19 Dec-20
9 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: MoF
1. GDP: Real annual growth rate; Nominal exchange rate; Public deficit, public debt y and primary balance as a percentage of GDP. *Public Sector Borrowing Requirements (PSBR). **Historical Balance of
Public Sector Borrowing Requirements (HBPSBR)
Preliminary Fiscal Policy Criteria: Macroeconomic and fiscal variables in a very challenging backdrop
Fiscal revenues% of GDP
Macroeconomic framework and fiscal variables1
Selection
Public spending% of GDP
Public debt**% of GDP
Stabilization fund and deficit% of GDP
36 36 37.2 37.240 42.6
46.5 48.7 45.8 44.9 44.952.1 52.1 51.8 51.5 51.2
45.6 45.4 45.2 45.044.8
0
20
40
60
2009 2011 2013 2015 2017 2019 2021 2023
Histórico ActualPrevioPrevious
Historical
21
-0.4
20.6
19
20
21
22
Approvedbudget
revenues
Impact due tolower growth
Estimatedbudget
revenues
-23.1-1.6
-0.6 -25.3-27
-25
-23
-21
-19
-17
Approvedbudget
spending
Resourcesto combatCOVID-19
Adjustments Estimatedspending
-4.7
4.4
0.4
-5.0
-4.8
-4.6
-4.4
-4.2
-4.0
Estimateddeficit
without FEIP
FEIP Newestimated
deficit
2020
GDP -1.9%
(Previous: 2.0%)
USD/MXN: 22.90
(Previous: 20.00)
Crude oil price:
US$/bbl 24 (Previous: 49)
Public deficit*:
4.4% (Previous: 2.6%)
Public debt**: 52.1%
(Previous: 45.6%)
Primary balance -0.4%
(Previous: 0.7%)
2021
GDP 2.5%
(Previous: 2.3%)
USD/MXN: 21.40
(Previous: 20.10)
Crude oil price:
US$/bbl 30 (Previous: 52)
Public deficit*:
4.0% (Previous: 2.2%)
Public debt**: 52.1%
(Previous: 45.4%)
Primary balance -0.6%
(Previous: 1.0%)
10 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Source: INEGI, Bloomberg
2020 GDP forecasts% yoy
Impact to MSMEs: Percentage of vulnerable
businesses under the marginal support scenario%
Unemployment rate%, sa
1Q20 2Q20 3Q20 4Q20 2020
GDP (aggregate supply) -2.9 -16.2 -9.7 -2.6 -7.8
Primary sector -0.5 -2.5 -2.4 -0.6 -1.4
Secondary sector -5.0 -21.9 -9.1 -3.2 -9.8
Tertiary sector -2.1 -14.2 -10.1 -2.8 -7.3
GDP (aggregate demand)
-2.9 -16.2 -9.7 -2.6 -7.8
Private consumption -1.3 -15.3 -8.9 -2.5 -7.0
Investment -13.3 -39.2 -17.9 -5.2 -18.9
Government spending 0.2 2.5 -4.1 -5.9 -1.8
Exports -7.1 -29.8 -6.2 3.0 -10.3
Imports -10.7 -34.7 -9.2 -2.5 -14.2
2020 – Strong decline, driven by the COVID-19 outbreak
6.0
3.7
6.1
7.28.0
3456789
Dec-07 Feb-10 Apr-12 Jun-14 Aug-16 Oct-18 Dec-20
HistóricoMedidas de apoyo extraordinariasEscenario baseMedidas actuales
Historical seriesExtraordinary support from the governmentBase caseCurrent measures
0
20
40
60
80
27-Apr 17-May 6-Jun 26-Jun 16-Jul
11 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
About Banorte
12 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
GFNORTE – a Leading and Profitable Financial Franchise in Mexico
One of the most public companies in Mexico
GFNorte is top 5 in trading at BMV, and has the highest Relative Weighting on S&P/BMV IPC Index,
rated OTCQX Best 50 Global.
float of almost 86%
and more than 4,000 investors, including large global institutional funds.
Investment grade ratings by S&P, Fitch, Moody's and HR Ratings.
1 2 3
Sound Fundamentals
Increasing profitability, solid asset quality, high
liquidity and strong capitalization ratios.
Adequate business mix
Strong retail, wholesale and premium banking
platforms, as well as leading insurance and
pension fund management units, serving more
than 21 million clients.
Solid corporate governance
Independent Board Members represent
71% of total board composition and best
practices in minority shareholder right
protection.
13 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
From Regional Bank to National Financial Group
20 | 20
Establishment
1899 1982-1992 1995 2000 2005 2010 2015
Privatization
INB IXE
Afin Afore Bancomer
Banorte Generali 50%
BancentroBanpaís
Bancrecer
Afore XXIIMSS 50%
Banorte-General i100%
…
Inorganic Growth
Regional Bank
Business Diversification
2020
Client
Segmentation
IT : central DB,
multichannel
Profitability
Nationalization
G.F. Interacciones
14 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
20/20
Strategy 20 | 20 Perfect Vision
PRODUCTS &
SOLUTIONS
Deposits & Loans
Insurances
Pension
Annuities
Wealth Mngt.
…
DISTRIBUTION
CHANNELS
Mobile
Internet
ATM
Contact Center
Branches
…
PROCESSES
Account opening - Credit Analisis
Next Best Offer – Next Best Action
Client Segmentation
▪ 12 million ex-Afore clients
9 million Afore clients
▪ Structured Info & Learning
(Central DB & Watson)
▪ Behavior understanding
Analitics Cost
Revenues
Digital Bank
15 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Diversified Business Mix
* Includes: Almacenadora Banorte; Ixe Servicios; Fundación Banorte A.B.P.
Casa de Bolsa Banorte
Banco Mercantil del Norte
Sólida
Pensiones Banorte
Seguros Banorte
Banorte Futuro
Afore XXI Banorte
Operadora de Fondos
Banorte
(Fondos de Inversión)
Other Subsidiaries*
Arrendadora y Factoraje
Banorte
Banorte Ahorro y Previsión
99.7167%98.2619% 99.9999% 99.9999% 99.9999% 99.9999%
50.0%
97.6711% 99.9999%
98.22%
Banorte Financial Services
(Uniteller)100.0%
2.33%
100%
16 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Business Mix - Diversified Net Income and Balance in Profitability
1) Without Goodwill: 1q20 =35.4%
Net Income Mix
CompanyNet Income
1Q20
ROE
1Q20
Bank 6,072 21.7%
Broker Dealer 313 26.0%
Long Term Savings 2,327
Retirement Savings (Afore) 325 10.9%
Insurance 1,703 90.0%
Annuities 284 22.7%
Other Finance Companies
Leasing & Factoring 203 13.5%
Warehousing 10 15.6%
Sólida (145) (19.9%)
Total 9,118 18.8%
1)
1Q20
$35.3 b
17 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
NIM
Net Interest Margin Moving in the Right Direction
NIM
(Post-Provision)
3.3%3.4% 3.4% 3.5% 3.5%
3.7%
4.3% 4.4%4.5% 4.7% 4.6%
4.8%
4.7%
4.3%
3.0%
3.5%
4.0%
4.5%
5.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20
4.1% 4.1%
4.4%
4.7%4.5%
4.9%
5.5% 5.6% 5.6% 5.7%
5.7%
5.9%5.9%
5.6%
4.0%
4.5%
5.0%
5.5%
6.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20
NIM NIM ex Insurance & Annuities
18 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Improving Efficiency
Cost to Income56.0% 54.0%
52.0%
48.5% 47.9%
44.9%42.8%
40.0% 39.7% 39.4% 38.5%40.2% 40.6%
38.9%
35%
40%
45%
50%
55%
2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20
+13% +5%+10%
+13%
+5% +4% +4% +7%+11%
+19%*
Reported
37.0%
* Recurring
*Recurring
+8%
+9%*
Reported
39.0% 39.1%
19 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
8,748 8,728 8,858
9,010 9,118
9,932
8,000
8,500
9,000
9,500
10,000
10,500
1Q19* 2Q19 3Q19 4Q19 1Q20
Strong Net Income
Net Income
8,517
10,888
13,50815,228
17,108 19,308
23,908
30,311
35,34531,958
36,528
7,500
10,000
12,500
15,000
17,500
20,000
22,500
25,000
27,500
30,000
32,500
35,000
37,500
2011 2012 2013 2014 2015 2016 2017 2018* 2019*
Million Pesos
CAGR
2011-2019 +20%
1.2%
+4%
YoY*
+17%
YoY* Recurring
Reported +14% YoY
* Recurring
Reported
20 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
1.10%
1.30%1.40% 1.46% 1.47%
1.60%
1.86%
2.07%2.22% 2.18% 2.20% 2.24% 2.28% 2.21%
2.18%2.30%
2.47%
1.0%
1.5%
2.0%
2.5%
2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20
ROA
Constant Positive Growth in Profitability
ROE
14.1% 14.3% 14.2%13.2% 13.3%
14.1%
17.0% 19.3% 19.6%
19.9% 19.5% 19.6%19.0% 18.8%
20.3% 20.1%
22.4%
12%
15%
18%
21%
24%
2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20
* Recurring
* Recurring
Reported:
Reported:
21 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Digital Transformation
22 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
3.50
3.904.12 4.21 4.28
1Q19 2Q19 3Q19 4Q19 1Q20
Digital Transformation Gaining Share
41.4
80.5
232.1
0
50
100
150
200
250
1Q2017
3Q 1Q2018
3Q 1Q2019
3Q 1Q2020
Transactions Growth
+113%
24%
28%22%
2%
1%
19%
4%
Transactions (Tx) Customers Using Digital (millions)
WEB
MobileATM
Call Center
Correspondents <
POS
Branches
*
Time Deposits
Mutual Funds
Credit Card
Insurance
Digital Deposit Account
Payroll loans
Mobile
as a
Point of Sale
23 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Mobile Product Segmentation
Individuals
SMEs
Corporates
• Security / transactional & sales functions (>70)
• The born in social media, Banorte Go
• CoDi payments
• Cash Management
• Payments
• Services
• Credit
• Reporting
• Security management
• Reporting
24 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Adapting the Business & Infrastructure to the New Payments Market
Continuous growth on POS’s transactions
with emphasis on e-commerce
50.0
100.0
150.0
1Q2017
3Q 1Q2018
3Q 1Q2019
3Q 1Q2020
POS’s TransactionsMillions
+27%
The best DIGITAL PLATFORM
for aggregators
CoDi – Test Pilot and further
development underway
25 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Loans & Deposits
26 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Healthy Funding & Loan Portfolio Structure
$818 bn
1Q20
$780 bn
Commercial
Consumer
Mortgage
Government
Corporate
US 34.8 bn
Demand
Money Market
Time
Interbank Loans
US 33.2 bn
2018
DemandTime
Money Market
Interbank
Loans
Consumer
Commercial
Mortgage
Corporate
Government
Funding
Loan Portfolio
$803 bn
$777 bn
27 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Demand66%
Time34%
116 124 129 136158 168
194223 229 234
190211
255
300
351384 397 414
438 454
306336
384
436
509551
590637
667 688
100
200
300
400
500
600
700
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20
Time Demand Core Deposits
1Q19 1Q20
Demand 394 454
Time 229 234
TOTAL 623 688
Loyal Deposits Base
Demand62%
Time38%
MIX
2013 1Q20
Billion Pesos CAGR:
+11%
YoY
+11%
15%
2%
11%
Deposits
YoY
15%
YoY
+2%
+12%
+10%
28 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Continued Growth in Performing Loan Book, Special Focus on Consumer
US 33.2 bn
Billion Pesos 1Q19 4Q19 1Q20 QoQ YoY
Mortgage 159 170 173 2% 9%
Car Loans 25 27 27 2% 10%
Credit Cards 37 40 39 (3%) 6%
Payroll 53 51 52 1% (2%)
Consumer 273 288 291 1% 7%
Commercial 173 173 182 6% 5%
Corporate 135 128 145 13% 8%
Government 181 174 162 (7%) (11%)
TOTAL 762 763 780 2% 2%
350 401
425 472
518 567
616
777 763
780
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20
Total Loan Portfolio
99118
140158
176203
241269
288 291
50
100
150
200
250
300
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20
CAGR:
+14%
US 12.4 bn
CAGR:
+10%
Consumer Portfolio
29 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
Credit Cards 6.1% 6.3% 6.0% 5.5% 5.9% 5.9% 6.0% 5.4% 5.8%
Payroll 2.9% 3.3% 4.1% 3.7% 3.0% 3.8% 3.4% 3.3% 2.7%
Car Loans 0.9% 1.1% 1.1% 1.1% 0.9% 1.0% 1.0% 1.0% 0.9%
Mortgage 0.9% 0.9% 1.0% 0.9% 1.0% 1.0% 1.1% 1.1% 1.2%
Commercial 2.5% 2.5% 2.2% 1.9% 2.1% 2.4% 2.5% 2.4% 2.3%
SME 5.6% 5.5% 6.0% 5.5% 5.9% 6.4% 6.5% 6.6% 7.0%
Commercial ex-SME 1.4% 1.5% 1.2% 0.9% 1.1% 1.3% 1.6% 1.3% 1.2%
Corporate 3.2% 3.0% 2.9% 2.9% 2.9% 3.0% 2.8% 1.8% 1.8%
Government 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Total GFNorte 1.9% 2.0% 1.8% 1.7% 1.7% 1.9% 1.9% 1.7% 1.7%
1.9%2.1%
3.1%2.9%
2.2%
1.8%2.0%
1.7% 1.7% 1.7%
1.0%
2.0%
3.0%
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20
Sound Asset Quality
Past Due Loan Ratio
30 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
2.2%2.3%
2.0% 1.9% 1.9%
2.2%2.0%
2.2%1.7% 1.6%
2.2%
2.5%
2.1%
2.4%2.5%
1.0%
1.5%
2.0%
2.5%
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20
Actual
Prev. Criteria
143%138%
105% 107%
116%
139%
129%
142%138% 136%
128% 127%
138% 140%
90%
110%
130%
150%
2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20
Sound Asset Quality
Coverage Ratio
Cost of Risk
* Cost of Risk: Provisions / Average Total loans (Performing + Past Due), On actual criteria all the recoveries are register on Provisions (net)
31 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Strong Capital Position
7.90%
9.40%
11.40%
Capital Adequacy Ratio
11.5%12.7% 12.4% 12.1% 11.9% 12.7%
13.8% 13.1% 13.3% 12.7% 12.2%
5.7%
1.1%
15.1% 15.3%14.6%
15.3%
17.2% 17.2%18.1%
20.0% 20.3%
18.6% 19.0%
2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20
*RWA= Risk Weighted Assets annual growth
RWA
Basel III
+17% +11% +8% +16% (2%) +19% +20% +19% +5% +7% +9%
CET1
Minimum
Regulatory
Ratios
Total
Tier 1
17.9%
Tier 2
9.70%
7.70%
6.20%
Temporary
waiver
32 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
1Q20 YoY 1Q20 YoYConsidering Banorte Futuro
Insurance
Net Income 1,696 6% 2,029 1%
Equity 8,423 (7%) 24,746 (1%)
Assets 43,752 (4%) 59,723 (2%)
Premiums 10,364 (18%) 10,364 (18%)
ROE 90.0% 12.7 pp 34.8% 0.8 pp
AFORE
Net Income 663 (20%)
Equity 23,040 0%
Assets 25,301 2%
AUM 865,906 9%
ROE 10.9% (3.0) pp
ROTE 35.4%
Annuities
Net Income 284 4%
Equity 5,150 25%
Assets 141,415 12%
Premiums 3,489 27%
ROE 22.7% (4.7) pp
BAP: Long Term Savings Business
Million Pesos
33 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
GFNorte Guidance 2020
Guidance
2020
Loan Growth 6% – 8%
NIM Expansion 5 – 15bp
Expense Growth 5% – 5.5%
Efficiency 38.0 – 39.0%
Cost of Risk 1.9% – 2.2%
Tax Rate 26% – 27%
Net Income 37.5 – 38.8
ROE 19.6% – 20.1%
Macro Estimates 2020
GDP 0.8%
Inflation 3.5%
Reference Rate 6.50%
34 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Loans
Feb 2020
Deposits
2°
Deposit & Loan Market Share
Source: CNBV.
3°
35 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Consumer C. Cards Mortgage Commercial Government Deposits
Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20
Banorte 12.2% 12.1% 9.7% 9.9% 19.5% 19.2% 10.8% 10.3% 34.3% 29.9% 14.7% 13.6%
BBVA 28.0% 29.4% 27.5% 27.4% 25.9% 26.0% 18.9% 19.6% 24.1% 26.6% 21.6% 22.1%
CitiBanamex 15.2% 13.1% 27.2% 26.7% 10.1% 9.4% 12.6% 12.1% 5.9% 5.8% 14.7% 14.5%
Santander 8.7% 8.8% 14.1% 14.2% 16.9% 16.5% 13.3% 13.2% 12.0% 12.7% 13.6% 13.0%
HSBC 6.3% 6.6% 5.6% 5.7% 6.1% 7.2% 8.7% 7.9% 6.3% 5.9% 8.1% 8.2%
ScotiaBank 5.2% 5.2% 2.7% 2.8% 15.0% 15.2% 7.1% 7.5% 1.7% 2.4% 6.3% 6.5%
Inbursa 4.8% 4.1% 4.1% 4.1% 0.7% 0.6% 0.0% 0.0% 4.1% 5.8% 3.2% 3.1%
Others 19.6% 20.6% 9.0% 9.2% 5.9% 6.0% 28.7% 29.3% 11.6% 11.0% 17.8% 19.0%
Market Position 3° 4° 2° 4° 1° 3°
Market Share by Segment
Source: CNBV.
36 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Afore Market Share (Retirement Savings)
Source: CONSAR
AUM Market Share
Mar-19 Mar-20 Mar-19 Mar-20
XXI Banorte 796 866 22.5% 22.1%
CitiBanamex 641 684 18.1% 17.5%
Profuturo GNP 522 597 14.7% 15.2%
SURA 525 565 14.8% 14.4%
PensionISSSTE 225 257 6.3% 6.6%
Coppel 217 257 6.1% 6.6%
Principal (Metlife, May18) 235 254 6.6% 6.5%
Invercap 175 185 4.9% 4.7%
Other 207 250 5.9% 6.4%
1°
Billion Pesos
Assets Under Management
37 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Insurance Market Share
Dec-18 Dec-18
Premiums Market Share
Dec-19 Dec-19
Million Pesos
9°
Source: AMIS.
Dec-18 Dec-18
Net Income Market Share
Dec-19 Dec-19
7°
G.N.P.
Metlife México
BBVA Bancomer
Banamex
AXA Seguros
Qualitas
Monterrey New York Life
Mapfre Crédito
Seguros Banorte
Inbursa
Other
TOTAL
60,221 67,995 12.2% 12.4% 3,234 4,435 8.1% 9.0%
61,962 55,186 12.5% 10.0% 9,063 6,695 22.7% 13.6%
40,520 47,363 8.2% 8.6% 4,831 5,845 12.1% 11.9%
24,358 39,962 4.9% 7.3% 1,493 3,999 3.7% 8.1%
37,212 39,940 7.5% 7.3% 1,928 1,501 4.8% 3.1%
32,821 34,249 6.6% 6.2% 2,418 5,081 6.0% 10.3%
29,071 30,259 5.9% 5.5% 3,270 3,147 8.2% 6.4%
15,798 28,143 3.2% 5.1% 115 286 0.3% 0.6%
25,616 26,551 5.2% 4.8% 3,396 3,890 8.5% 7.9%
19,885 19,335 4.0% 3.5% 3,146 3,957 7.9% 8.1%
147,191 161,449 29.8% 29.3% 7,086 10,270 17.7% 20.9%
494,653 550,433 100.0% 100.0% 39,980 49,106 100.0% 100.0%
38 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Annuities Market Share
1°
1°
*\ Legal document for any pensioners entitled to receive a pension.
Source: AMIS to March 2020.
Mar-19 Mar-19
Resolutions * Market Share
Mar-20 Mar-20
Annuitants
Million Pesos
Mar-19 Mar-19Mar-20 Mar-20
Market Share
Banorte
Profuturo GNP
Bancomer
Total Industry
2,698 3,481 43.0% 47.6%
2,207 1,927 35.2% 26.4%
1,355 1,901 21.6% 26.0%
6,267 7,310 100.0% 100.0%
Banorte
Profuturo GNP
Bancomer
Total Industry
2,587 2,826 40.4% 45.1%
2,168 1,411 33.8% 22.5%
1,636 2,024 25.5% 32.3%
6,405 6,261 100.0% 100.0%
39 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
GFNorte in the World
(1) Level 1
Ticket Indexes
GFNORTEO (BMV)
IPC (BMV)
Sustainable IPC (BMV)
MSCI Mexico
STOXX
GBOOY (OTCQX)
DJSI MILA
Climate Disclosure Leadership
OTCQX30
Euronext Vigeo EM70
XNOR (Latibex)FTSE Latibex All Shares
FTSE Latibex TOP
1Q20
Total Shares Outstanding: 2,883.5 m
Float: ~ 86%
Total ADRs(1) Outstanding: 4.79 m
302,763
187,425
150,000
200,000
250,000
300,000
350,000
400,000
4Q
12
4Q
13
4Q
14
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
1Q
17
2Q
17
3Q
17
4Q
17
1Q
18
2Q
18
3Q
18
4Q
18
1Q
19
2Q
19
3Q
19
4Q
19
1Q
20
Market CapitalizationMillion pesos
US 8.0 bn
Oil and
COVID-19
crisis
40 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Analyst Opinion & Investment Grade by All Major Rating Agencies
Net Income 2020 $36,440
Target Price $112.8
Maximum $136.5
Number of Analysts 21
# BUY 15
# HOLD 5
# SELL 1
Analysts‘ Estimates
(as of Apr 23, 2020)
Ratings Agencies
RatingAgency Outlook Date
BBB-
BBB
Fitch
Standard & Poor’s Negative
Negative
Mar-20
Abr-20
Baa3Moody’s Negative Abr-20
41 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Appendix
42 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Quarterly Summary
Income Statement Highlights - GFNorte1Q19 4Q19 1Q20
Change
(Million Pesos) 4Q19 1Q19
Interest Income 38,075 37,667 37,008 (2%) (3%)
Interest Expense 18,406 15,174 14,657 (3%) (20%)
Technical Results (Insurance & Annuities) 1,116 (2,305) (383) 83% (134%)
Net Interest Income 20,784 20,188 21,968 9% 6%
Net Service Fees 2,967 4,230 3,455 (18%) 16%
Trading 1,152 872 1,166 34% 1%
Other Operating Income (Expenses) 2,143 746 327 (56%) (85%)
Non Interest Income 6,262 5,847 4,949 (15%) (21%)
Total Income 27,046 26,035 26,916 3% (0%)
Non Interest Expense 10,004 10,572 10,466 (1%) 5%
Provisions 3,736 3,765 4,344 15% 16%
Operating Income 13,306 11,698 12,106 3% (9%)
Taxes 3,650 2,951 3,228 9% (12%)
Subsidiaries' Net Income 411 389 353 (9%) (14%)
Minority Interest (135) (125) (113) (10%) 16%
Subsidiaries & Minority Interest 275 263 240 (9%) (13%)
Net Income 9,932 9,010 9,118 1% (8%)
Recurring Net Income 8,748 9,010 9,118 1% 4%
43 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Quarterly Summary
Balance Sheet Highlights - GFNorte1Q19 4Q19 1Q20
Change
(Million Pesos) 4Q19 1Q19
Asset Under Management 2,697,401 2,771,604 2,708,692 (2%) 0%
Performing Loans (a) 762,105 762,642 779,818 2% 2%
Past Due Loans (b) 13,488 12,806 13,212 3% (2%)
Total Loans (a+b) 775,594 775,448 793,030 2% 2%
Total Loans Net (d) 757,265 757,809 774,525 2% 2%
Acquired Collection Rights ( e) 2,217 1,601 1,500 (6%) (32%)
Total Credit Portfolio (d+e) 759,482 759,410 776,025 2% 2%
Total Assets 1,594,607 1,580,010 1,729,280 9% 8%
Total Deposits 734,956 724,490 772,993 7% 5%
Total Liabilities 1,409,497 1,384,012 1,531,790 11% 9%
Equity 185,110 195,998 197,490 1% 7%
Total Loans ex-Government 580,635 588,654 618,269 5% 6%
Financial Ratios GFNorte 1Q19 4Q19 1Q20
NIM (1) 5.7% 5.7% 5.9%
ROE (2) 22.4% 19.0% 18.8%
ROA (3) 2.5% 2.28% 2.21%
Efficiency Ratio (4) 37.0% 40.6% 38.9%
Operating Efficiency Ratio (5) 2.5% 2.7% 2.5%
CCL Banorte and SOFOM - Basel III (6) 116.6% 133.5% 120.1%
Asset Quality:
Past Due Loan Ratio 1.7% 1.7% 1.7%
Coverage Ratio 135.9% 137.7% 140.1%
Cost of Risk (7) 1.91% 1.98% 2.22%
Market References
Banxico Reference Rate 8.25% 7.25% 6.50%
TIIE 28 days (Average) 8.56% 7.86% 7.36%
Exchange Rate Peso/Dolar 19.38 18.86 23.48
Tax Rate 26.6% 24.4% 25.9%
44 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
INFRASTRUCTURE 1Q19 4Q19 1Q20
Employees* 29,425 30,162 29,796
Branches 1,149 1,182 1,178
ATM’s 8,453 8,919 9,090
POS’s 158,533 166,505 166,225
*Preliminar
Quarterly Summary
Share Data 1Q19 4Q19 1Q20Change
4Q19 1Q19
Earnings per share (Pesos) 3.444 3.125 3.162 1% (8%)
Earnings per share Basic (Pesos) 3.469 3.138 3.180 1% (8%)
Dividend per Share for the period (Pesos) 0.00 0.00 0.00 NA NA
Payout for the period 0.0% 0.0% 0.0% NA NA
Book Value per Share (Pesos) 63.39 67.18 67.70 1% 7%
Issued Shares (Million) 2,883.5 2,883.5 2,883.5 0% 0%
Stock Price (Pesos) 105.54 105.00 65.00 (38%) (38%)
P/BV (Times) 1.66 1.56 0.96 (39%) (42%)
Market Capitalization (Million Dollars) 15,704 16,050 7,981 (50%) (49%)
Market Capitalization (Million Pesos) 304,320 302,763 187,425 (38%) (38%)
Tipo de Cambio al cierre cada trimestre19.37790 18.86420 23.48470 24% 21%
45 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Healthy Liquidity
Loans / Deposits
(%)
Liquidity Coverage Ratio
CCL (%)
104%
105%
101%
90%
92%
94%
96%
98%
100%
102%
104%
106%
108%
110%
1Q2015
3Q 1Q2016
3Q 1Q2017
3Q 1Q2018
3Q 1Q2019
3Q 1Q2020
117%
133%
120%
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
1Q2015
3Q 1Q2016
3Q 1Q2017
3Q 1Q2018
3Q 1Q2019
3Q 1Q2020
46 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Improving Corporate Governance
GFNorte Mexbol Index (Average)*
Float 86% 45%
Listed overseas Yes 46% of the companies
Chairman of the Board-CEO separation Yes In 73% of the companies
Share of independent board members, % 71.0 49.7
Share of total assets threshold to require shareholders
approval in M&A operations, %Current Before Aug'16 19.7
Non-related 20 20 - -
Related 5 20 - -
Board members nominations committee
Existence Yes 13.5% of the companies
Final approval of nominated board members Shareholders Shareholders
Share of independent board members in this committee, %Current Before Aug'16
18.857.1 25
All members of the BOD are elected every year by the Shareholders’ Assembly.
Main Committees are chaired by independent members.
- Risk Policies
- Nominations
- Audit & Corporate Practices
Assembly quorum has always been higher than 60% and consensus has always been reached on proposals.
47 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Corporate Responsibility and Sustainability
At GFNorte, sustainability means maximizing growth and profitability while seeking to achieve balance among the economic, social and
environmental aspects of our business. This is achieved through a four-pillar framework:
Focus on Social and Environmental Risk Management, Environmental Efficiency, Human Rights and Gender Equity and Corporate Volunteering,
Responsible Investment, Financial Inclusion and Education
Sustainable Finance Transparency
People and Community Environmental Footprint
✓ PRI (Principles of Responsible Investment) – We seek to promote a sustainable risk management considering the risk of the environmental,
social and governance issues integrated in our investment portfolios, safeguarding the patrimony of our clients.
✓ Reporting – We incorporated in our Annual Integrated Report the framework of International Integrated Reporting Council (IIRC), Global
Reporting Initiative (GRI), Global Compact and we align our performance to the UN SDGoal's platform.
✓ Social & Environmental Risks Analysis – Under the Equator Principles’ framework, Banorte analyzes the environmental and social risks and
impacts of loan portfolios for Corporate and Business Banking, Government Banking and Structured Finance. Banorte goes beyond the Equator
Principles’ scope by including loans of lower amounts (loans greater than $ 1 million US dollars and analyzes their risks the Performance
Standards of the International Finance Corporation.
✓ Sustainability Management System – Its objective is to gather, validate, monitor and analyze data from the subsidiaries of the Group through
key environmental, social and economic indicators.
48 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Corporate Responsibility and Sustainability
Global Initiative Report (GRI Standards)International standards on sustainability reporting and disclosure of economic, environmental and socialtopics.
UN Global CompactInternational initiative promoting 10 universally accepted Principles to promote Corporate Social Responsibility (CSR).
Carbon Disclosure Project (CDP)Organization that promotes awareness on climate change through a better quality and transparency of the information reported on the company's emissionsperformance.
IPC SustentableMexican index of 30 listed companies ,which are best positioned in relation to the pillars of Environment, Socialand Corporate Governance.
Empresa Socialmente Responsable (ESR) Recognition granted by the Mexican Center for Philanthropy (Cemefi) and AliaRSE, as a company committed with corporate social Responsibility.
Natural Capital DeclarationVoluntary financial sector initiative created at the Rio +20 Earth Summit, which recognizes the role of natural resources in the economy through its integration into financial products and services.
Equator PrinciplesStandard within the financial sector to determine, assessand manage the environmental and social risks of financed projects.
GEI2 Programme MexicoVoluntary reporting of greenhouse gas emissions
UNEP Finance InitiativeInitiative that aims to identify, promote and carry out the adoption of best environmental and sustainabilitypractices at all levels of operations of financialinstitutions.
Dow Jones Sustainability Index MILA In 2017 was included in the Dow Jones Sustainability Index MILA Pacific Alliance.
Asociación de Bancos de México (ABM) Participation in the Sustainability Committee and the Corporate Social Responsibility Committee, and signatories as the ABM Banking Sustainabilityprotocol.
STOXX ESG Leaders IndexIndex that represents the main global companies in terms ofenvironmental, social and governance criteria, based on ESG indicators provided by Sustainalytics.
Euronext Vigeo Emerging Markets 70 Recognizes the 70 companies from emerging countries with the most advanced practices in terms of sustainability.
FTSE4Good Emerging IndexIndex that evaluates actions in the themes of climate change, labor standards and risk management, among others.
Bloomberg Gender Equity IndexIndex that provides analysis of the commitment of 52 companies with the gender equity in the workplaceto investors and organizations.
Principles for Responsible Investment Initiative that promotes its signatories to integrate environmental, social and governmental (ESG)criteria into their investment and ownership decisions.
49 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid MktEco Hist App
Contact Information and Reports
If you have any information request or comments, please contact Banorte's Investor Relations Department at:
Tel: (52) 55 1670 2276
E-mail: [email protected]
We recently published the 1Q20 report.
During 2020 we have released:
1. Annual Report to the Banking and Securities Commission (CNBV)
2. Annual Report to the Stock Exchange (Informe Anual Circular Única de Emisoras)
3. Audited Financial Statements for 2019
4. Annual Financial and CSR Report for 2019 under the GRI methodology (PDF & Interactive)
You can access our quarterly and annual reports (in Spanish and English) and other informative materials at :
investors.banorte.com
Disclaimer
Grupo Financiero Banorte does not warrant that the document is accurate, complete, reliable, fit for any particular purpose and does not accept liability for any act (or
decision not to act) resulting from the use of this document and related data. The information contained in this document is illustrative and informative so it should not
be considered as an advice and/or recommendation of any kind. Grupo Financiero Banorte is not part of any party or political trend.