Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Q2 2022 Earnings Presentation
75 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, 2022
Slide 1: Corporate Presentation 2Q22
Corporate Presentation 2Q22 DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 1 Hist NI ROE ICAP Mkt App C/I
Slide 2: Table of Content
Table of Content About Banorte 3 Markets Awards Results NIM 9 Revenue composition 12 Fees 13 GFNORTEO Cost to Income 15 Net Income 17 EPS 18 SME Bank Dividend 19 Award 2022 ROE / ROA 20 GBOOY Global Finance Digital Bank 21 Deposit & Loans 25 Loans / Deposits 26 Deposits growth 27 XNOR Loan growth
Slide 3: About Banorte
About Banorte DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 3 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 4: GFNORTE – A Leading and Profitable Financial Franchise in Mexico
GFNORTE – A Leading and Profitable Financial Franchise in Mexico 2 1 4 Adequate Sound Digital business mix Fundamentals 3 Strong retail, wholesale Solid corporate Strategy and premium banking Solid asset quality, governance Prepared for platforms, as well as high liquidity and Independent Board th
Slide 5: From Regional Bank to Second Largest National Financial Group
From Regional Bank to Second Largest National Financial Group 15%* 1,2,3 Plan 20|20 Plan Client • Banorte’s Business Diversification Segmentation Digital Transformation * Loan book IT : central DB, Market Share Inorganic Growth multichannel • JV Rappi 2.3% Profitability • Digital Bank Regional Ban
Slide 6: Strategy – Client centric & Digital Evolution
Strategy – Client centric & Digital Evolution PRODUCTS & DISTRIBUTION SOLUTIONS CHANNELS > 10M New customer Rappi clients behavior Deposits & Loans Mobile Client Segmentation Insurances ▪ 11 million ex-Afore clients Internet Rappi JV Digital 8.6 million Afore clients Pension ATM Consumer focus Ban
Slide 7: Diversified Business Mix
Diversified Business Mix In progress… Banco Casa de Operadora Banorte Arrendadora JV with Digital Other Mercantil Bolsa de Fondos Ahorro y y Factor RAPPI Bank Subsidiaries* del Norte Banorte Banorte Previsión Banorte** 50% 100% 98.2618% 99.9999% 99.9999% 99.9999% 99.9058% Looking for fully license
Slide 8: Business Mix - Diversified Net Income and Balance
Business Mix - Diversified Net Income and Balance Net Income Mix 1H22 $22.27 bn Million pesos 2Q22 q/q y/y 1H22 y/y ROE 1H22 Bank 9,211 23% 44% 16,710 36% 24.2% Broker Dealer & Mutual F. 308 (66%) (36%) 1,215 34% 31.6% Insurance 852 (31%) 84% 2,084 58% 58.8% Annuities 520 2% 5% 1,031 4% 23.1% Pens
Slide 9: Net Interest Margin Moving in the Right Direction
Net Interest Margin Moving in the Right Direction NIM 6.0% 5.9% 6.0% 5.6% 5.5% 5.6% 5.5% 5.3% 5.0% 4.9% 4.8% 5.0% 4.7% 4.4% 4.5% 4.9% 4.9% 4.5% 4.1% 4.8% 4.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q21 3Q21 4Q21 1Q22 2Q22 Previous criteria IFRS NIM (Post-Provision) 6.0% 5.4% 5.3% 5.5%
Slide 10: Margin sensitivity evolution
Margin sensitivity evolution ● Dynamic risk management hedges, Focus on stable low-cost liabilities, Active ALCO, Organic growth of floating rate portfolio. Margin Sensitivity − 100 bps on NII Foreign Currency Balance Sheet Local Currency Balance Sheet Million pesos Million pesos DB Rev Div Dep ESG
Slide 11: Core Banking Fees quite above pre-pandemic levels and continuously growing
Core Banking Fees quite above pre-pandemic levels and continuously growing +13% ● Net Fees +13% 1H y/y on economic recovery, +8% Net Fees 1H y/y sequential growth. 5,000 Previous criteria IFRS 4,313 ● Core banking fees +10% q/q, and +22% 1H y/y; 4,000 3,644 4,010 ▪ Electronic banking services +30%
Slide 12: Efficiency Temporally Affected by COVID-19
Efficiency Temporally Affected by COVID-19 Cost to Income 54.0% 55.0% 52.0% Previous Criteria IFRS 49.6% 50.0% 48.5% 47.9% Recurring 44.9% 40.0% 39.7% 44.5% 43.4% 43.9% 45.0% 42.8% 47.6% 41.4% 39.0% 39.1% 37.7% 37.8% 40.0% 42.5% 41.7% 35.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q21 3Q
Slide 13: Resilient Net Income
Resilient Net Income Net Income Million Pesos CAGR 2Q22 Record High +14% 2012-2021 36,528 +34% 37,000 12,000 YoY 11,524 35,583 31,958 35,345 35,048 32,000 10,748 11,000 30,508 +7% 27,000 10,000 QoQ 23,908 Recurring 9,061 8,874 9,000 8,568 22,000 19,308 17,108 8,000 17,000 15,228 13,508 7,000 10,88
Slide 14: Pre-pandemic - Constant Positive Growth in Profitability
Pre-pandemic - Constant Positive Growth in Profitability ROA 2.5% 2.30% 2.27% 2.18% 2.05% 1.94% 1.97% 1.99% 1.86% 1.90% 2.0% 2.18% 1.60% 1.46% 1.47% 1.76% 1.85% 1.90% 1.40% 1.79% 1.5% 1.30% ROA Recurring IFRS 1.0% 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021 2Q21 3Q21 4Q21 1Q22 2Q22 ROE 22
Slide 15: Digital Transformation
Digital Transformation 1. Digital Transformation at Banorte 3. Digital Bank 2. Rappi JV DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 15 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 16: Digital Transformation Gaining Share
Digital Transformation Gaining Share Transactions (Tx) Transactions 2Q22 (millions) Branches 700 613.7 2.5% WEB 600 12% POS 500 26% 400 Correspondents 0% 300 Call Center 1% 47% 200 12% ATM Mobile 100 0 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 2017 2018 2019 2020 2021 2022 Digital Deposit Account Customers
Slide 17: Customers' voice, key in Banorte's evolution
Customers’ voice, key in Banorte’s evolution ● Ponting to a NPS of 90 based on improvements from the Internal Customers: Banorte Móvil WEB o processes / services / systems App o products o branch-administration, contingency, others +4.1 pts 80.2 +15 pts 82.0 vs 2Q21 vs 2Q21 YOUR VOICE Branches ATM T
Slide 18: Leaders in the Business & Infrastructure for the New Payments Market
Leaders in the Business & Infrastructure for the New Payments Market Rappi JV – Credit Cards and Credits to affiliates POS Transactions +26% Millions 2Q y/y 135 126 The best DIGITAL PLATFORM for aggregators 125 115 112 110 105 100 95 88 85 75 65 54 55 45 CoDi 35 Jun-22 Sep-20 Sep-21 Jan-20 Jan-21
Slide 19: Ongoing digital evolution
Ongoing digital evolution RappiCard: keeps growing in cards and billing Digital Bank Internal certification of 602k 572k 97% operating models Issued Cards with at Of cardholders cards least one with a credit line Adding more functionalities purchase above Ps 5,000 as we approach final stage of regul
Slide 20: Loans & Deposits
Loans & Deposits DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 20 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 21: Healthy Funding & Loan Portfolio Structure
Healthy Funding & Loan Portfolio Structure Bank Deposits 2018 $759 bn 2Q22 $886 bn US 44.0 bn Senior Unsec. Debt Senior Unsec. Debt Money Market Money Market Time Demand Time Demand Loan Portfolio $777 bn $861 bn US 42.8 bn Consumer Consumer Government Government Mortgage Mortgage Commercial Comme
Slide 22: Loyal Deposits Base
Loyal Deposits Base Deposits Billion Pesos CAGR 2011-2021: +9% 900 834 YoY 796 Time Demand Core Deposits 751 750 751 750 +11% 800 733 667 700 637 590 616 584 YoY 600 551 533 538 +11% 537 538 509 519 +15% 500 436 438 384 397 414 384 400 336 351 306 300 300 255 229 YoY 211 223 217 211 214 214 211 21
Slide 23: Continued Growth in Performing Loan Book, Special Focus on Consumer
Continued Growth in Performing Loan Book, Special Focus on Consumer Loan Portfolio Billion Pesos 861 900 YoY +8% 800 700 600 CAGR: +8% 500 400 300 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 1Q22 2Q22 QoQ YoY Mortgage 196 203 208 2% 6% Auto 28 28 29 3% 3% Credit
Slide 24: Sound Asset Quality
Sound Asset Quality NPL Ratio 3.1% 2.9% 3.0% Previous Criteria IFRS 2.5% 2.2% 2.1% 2.0% 2.0% 1.8% 1.7% 1.7% 1.4% 1.5% 1.2% 1.1% 1.0% 1.0% 1.0% 1.3% 1.1% 1.0% 0.9% 1.0% 0.5% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q21 3Q21 4Q21 1Q22 2Q22 Previous Criteria IFRS | 2018 2019 2020 2Q21 3Q21
Slide 25: Sound Asset Quality
Sound Asset Quality Coverage Ratio 250% 224% 205% 207% 202% 187% 193% 200% 173% 138% 191% 150% 139% 129% 142% 138% 116% 174% 105% 107% 162% 100% 50% Previous Criteria IFRS 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2Q21 3Q21 4Q21 1Q22 2Q22 Cost of Risk 3.0% 2.8% 2.5% 2.5% 2.0% 2.0% 2.3%
Slide 26: Strong Capital Position
Strong Capital Position Capital Adequacy Ratio Basel III 25.8% 24.7% 22.9% 21.7% 21.9% 21.8% 0.5% Tier 2 20.2% 18.6% TLAC 17.2% 17.2% to 2025 Total 15.3% 15.3% 17.90% 14.6% Tier 1 24.6% 11.40% 9.40% 15.3% 16.3% 15.0% 15.2% 14.8% 7.90% 13.9% 13.7% CET1 12.7% 12.4% 12.1% 11.9% 12.7% 12.7% 2014 2015
Slide 27: BAP: Long Term Savings Business
BAP: Long Term Savings Business Million Pesos 2Q22 1H22 YoY 2Q22 1H22 YoY Considering Banorte Futuro Insurance Net Income 812 2,034 61% 951 2,339 8% Equity 7,848 7,848 (33%) 24,767 24,767 (19%) Assets 54,749 54,749 5% 71,291 71,291 1% Premiums 4,977 18,510 8% 4,977 18,510 8% ROE 43.6% 58.8% 36.1 p
Slide 28: Insurance business steadily improving
Insurance business steadily improving Technical Reserves Retained Insurance Premiums 4,522 4,537 6,000 ● Operating Income decreases (33%) sequentially on 12,000 3,304 seasonality, but expands +54% 1H y/y. 10,941 4,000 ● 1,062 Claims below (9%) q/q. The reduction continues in 2,000 -1,525 765 COVID-1
Slide 29: 2022 guidance update
2022 guidance update 2022 Loan Growth 5% – 7% NIM expansion 25 – 35 bps NIM of Bank expansion 50 – 70 bps Expense Growth 7.0% – 7.6% Efficiency 38.9% – 39.7% Cost of Risk 1.4% – 1.7% Tax Rate 25% – 26% Net Income 40.5 – 42.0 bn ROE 17.5% – 18.5% ROA 2.0% – 2.2% Macro Estimates for 2022 GDP ~1.5 Infl
Slide 30: Market Presence
Market Presence DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 30 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 31: Deposit & Loan Market Share
Deposit & Loan Market Share Deposits Loans Others BBVA 19% 22% Inbursa 3% ScotiaBank 7% 2nd CitiBanamex HSBC 15% 8% 3rd Santander Banorte 13% 13% Source: CNBV May 2022 DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 31 Hist NI ROE ICAP Mkt App C/I
Slide 32: Market Share by Segment
Market Share by Segment Auto Payroll C. Card Mortgage Comm + Corp Government Deposits May-21 May-22 May-21 May-22 May-21 May-22 May-21 May-22 May-21 May-22 May-21 May-22 May-21 May-22 Banorte 19.6% 19.4% 20.7% 20.6% 10.4% 10.4% 19.7% 18.6% 11.7% 11.6% 25.5% 25.4% 13.2% 12.9% BBVA 33.4% 30.7% 37.9%
Slide 33: Market Share by Segment
Market Share by Segment Total Loan Book Commercial & Corporate Mortgage 19.7% 14.9% 11.7% 11.6% 19.4% 19.3% 14.6% 19.1% 14.3% 18.6% 13.8% 10.2% 10.2% 12.9% 9.4% (8bp) (109bp) (38bp) May-18 May-19 May-20 May-21 May-22 May-18 May-19 May-20 May-21 May-22 May-18 May-19 May-20 May-21 May-22 Credit Card
Slide 34: Afore Market Share (Retirement Savings)
Afore Market Share (Retirement Savings) Assets Under Management AUM Market Share Billion Pesos Jun-21 Jun-22 Jun-21 Jun-22 XXI Banorte 1045 1017 21.2% 20.5% 1° CitiBanamex 785 840 15.9% 16.9% Profuturo GNP 815 769 16.5% 15.5% SURA 736 767 14.9% 15.4% Coppel 358 363 7.3% 7.3% Principal (Metlife, Ma
Slide 35: Insurance Market Share
Insurance Market Share Premiums Market Share Net Income Market Share Million Pesos Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Mar-21 Mar-22 Metlife México 21,020 24,082 12.7% 13.3% 238 1,551 2.9% 14.7% G.N.P. 20,145 21,971 12.2% 12.2% 1,062 956 12.8% 9.0% BBVA 14,061 14,814 8.5% 8.2% 941 1,061 11.3
Slide 36: Annuities Market Share
Annuities Market Share Resolutions * Market Share Million Pesos Jun-21 Jun-22 Jun-21 Jun-22 Banorte 10,145 10,164 45.0% 45.6% 1° Profuturo GNP 6,428 5,366 28.5% 24.1% Bancomer 5,954 6,773 26.4% 30.4% Total Industry 22,527 22,302 100.0% 100.0% Annuitants Market Share Jun-21 Jun-22 Jun-21 Jun-22 Ban
Slide 37: GFNorte in the World
GFNorte in the World Market Capitalization Million Pesos US 21.4 bn 450,000 431,221 2Q22 Total Shares Outstanding: 2,883.5 m 400,000 Float: ~ 86% Total ADRs(1) Outstanding: 6.48 m 350,000 323,437 Ticket Indexes 300,000 IPC (BMV) Sustainable IPC (BMV) GFNORTE O (BMV) 250,000 MSCI Mexico STOXX Oil a
Slide 38: Analyst Opinion & Investment Grade by All Major Rating Agencies
Analyst Opinion & Investment Grade by All Major Rating Agencies Analysts‘ Estimates Ratings Agencies (as of July 29, 2022) Agency Rating Outlook Date Net Income 2022 $42,314 Target Price $154.18 Standard & Poor’s BBB Stable Jul-22 Maximum $191.0 Number of Analysts 22 Fitch BBB- Stable Dec-21 # BUY
Slide 39: ESG
ESG DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 39 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 40: MSCI ESG Upgraded to AA
Sustainability Strategy MSCI ESG Latest Ratings Action: Upgraded to AA from 'A’ DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 40 Hist NI ROE ICAP Mkt App C/I
Slide 41: ESG Updates
Continuous evolution in ESG on the back of constant feedback from investors ESG UPDATES ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABLE FINANCE Adhesion to PCAF for financed In partnership with UNHCR, FTSE rating of 3.7/5 (+12.1% y/y). Afore XXI Banorte and emissions quantification Banorte supports
Slide 42: Sustainable finance
Sustainable finance Loan book evaluation Responsible Investments – Mutual Funds % of wholesale banking loan book %, share of total analyzed AUM by instrument Not Analyzed by asset class 15.0 Analyzed analyzed Equities 42 12.5 10.5 10.4 0.011 10.0 0.003 9.1 0.011 Money markets 75 0.388 7.5 0.389 Fi
Slide 43: Integrated Annual Report 2021
Integrated Annual Report 2021 Updates • To analyze ESG data performance, we follow best practices established by GRI, SASB and CDP questionnaire on climate change aspects. • We release our first report on Climate-related risks and opportunities in accordance with the recommendations of the Task Fo
Slide 44: Appendix
Appendix DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 44 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 45: Quarterly Summary
Quarterly Summary Income Statement Highlights - GFNorte Change Change 2Q21 1Q22 2Q22 1H21 1H22 (Million Pesos) 1Q22 2Q21 1H21 Interest Income 46,287 55,171 60,289 9% 30% 93,678 115,460 23% Interest Expense 24,502 28,249 33,238 18% 36% 49,116 61,487 25% Net Interest Income 21,785 26,922 27,051 0% 2
Slide 46: Quarterly Summary
Quarterly Summary Financial Ratios GFNorte 2Q21 1Q22 2Q22 1H21 1H22 NIM (1) 5.0% 6.0% 5.9% 5.2% 6.0% ROE (2) 15.1% 18.1% 19.6% 15.2% 18.9% ROA (3) 1.8% 2.2% 2.3% 1.8% 2.2% Efficiency Ratio (4) 42.5% 37.7% 37.8% 42.1% 37.8% Operating Efficiency Ratio (5) 2.1% 2.2% 2.1% 2.1% 2.2% CCL Banorte and SOF
Slide 47: Quarterly Summary
Quarterly Summary Change Change Share Data 2Q21 1Q22 2Q22 1H21 1H22 1Q22 2Q21 1H21 Earnings per share (Pesos) 2.971 3.728 3.996 7% 34% 5.935 7.724 30% Earnings per share Basic (Pesos) 3.002 3.756 4.028 7% 34% 5.997 7.784 30% Dividend per Share for the period (Pesos) 3.17 0.00 6.08 N.A. 92% 3.17 6.
Slide 48: Healthy Liquidity
Healthy Liquidity Loans to Deposits Liquidity Coverage Ratio (%) CCL (%) 110% 230% 222% 210% 108% 210% 105% 106% 190% 104% 170% 177% 102% 100% 99% 150% 100% 98% 98% 130% 96% 110% 94% 90% 92% 90% 70% 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 2Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 2015 2
Slide 49: Corporate Responsibility and Sustainability
Corporate Responsibility and Sustainability Global Initiative Report (GRI Standards) UNEP Finance Initiative International standards on sustainability reporting and disclosure of Initiative that aims to identify, promote and carry out the adoption of best economic, environmental and socialtopics.
Slide 50: Contact Information and Reports
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: investor@banorte.com We recently published the 2Q22 report. During 2022 we have released: 1. Annual Report 2021 to the Banking
Slide 51: Economic and Financial Perspectives
Economic and Financial Perspectives DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 51 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I
Slide 52: Forecasts of main economic and financial variables
Forecasts of main economic and financial variables Forecasts of main macroeconomic and financial variables in Mexico End of period 2020 2021 2022F 2023F GDP (% y/y) -8.1 4.8 2.1 1.0 Inflation (% y/y) 3.2 7.4 8.1 4.1 Exchange rate USD/MXN 19.91 20.53 20.70 21.80 Banxico’s reference rate (%) 4.25 5.
Slide 53: Risks for Mexico include a challenging global backdrop
Risks for Mexico include a challenging global backdrop COVID-19 Conflict in Ukraine Restrictive monetary policy 53 Images: Globe (www.rkcounsel.com); Coronavirus (who.int); Russian and Ukrainian flags (theowp.org); Central bank (cadtm.org) DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 53 Hist NI
Slide 54: Mexico appears to be entering a fifth wave of contagions
Mexico appears to be entering a fifth wave of contagions, albeit with resilient mobility Daily COVID-19 cases Daily deaths due to COVID-19 Google mobility indices Thousands Thousands % deviation vs. pre-pandemic levels 70 5.0 Retail and recreation Millares Millares Transit stations 61 Workplaces 6
Slide 55: Households' mobility has fully recovered
Households’ mobility has fully recovered Time Spend Outside Home % Change from January 1st, 2020 40 30 20 10 10.5% 0 -10 -20 -30 -31.2% -40 Jan-20 Aug-20 Apr-21 Nov-21 Jun-22 Source: Banorte DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 55 Hist NI ROE ICAP Mkt App C/I
Slide 56: War in Ukraine: Few direct effects on Mexico's international trade
War in Ukraine: Few direct effects on Mexico’s international trade, but with challenges from indirect channels Mexico: Total trade flows Mexico: Main exports to Russia* Mexico: Main exports to Ukraine* US$ billions (average 2018-2021) US$ millions (in 2020) US$ millions (in 2020) US 569.2 1° Engin
Slide 57: War in Ukraine: The greatest impact on Mexico
War in Ukraine: The greatest impact on Mexico can be seen through: (1) Inflation; (2) fiscal accounts; and (3) volatility in financial markets GDP: Oil and gas Contribution of energy in inflation Oil exports $ trillion; % of the total (in 2021) % of the total US$ billion; % of total (in 2021) Oil
Slide 58: The recovery has been heterogeneous
The recovery has been heterogeneous, with ample room to be made up in certain states and sectors State activity level in 4Q21 vs. the most recent peak Economic activity level in 1Q22 vs. the most recent peak (3Q18) (3Q18) %, seasonally adjusted figures %, using seasonally adjusted figures Tabasco
Slide 59: Mexico will continue growing at different speeds
Mexico will continue growing at different speeds Economic growth by state % y/y, 2015-2019 average 2015-2019 Average GDP 1.5+ 0 to 1.5 <0 Source: INEGI DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 59 Hist NI ROE ICAP Mkt App C/I
Slide 60: Nowcasting Economic Activity – IGAE (GDP proxy)
Nowcasting Economic Activity – IGAE (GDP proxy) Nowcasting of Monthly Economic Activity - IGAE % y/y; nsa 30 IGAE Nowcast IGAE Nowcast 2.75 20 2.54 10 1.85 1.18 1.57 0 1.34 1.27 1.15 1.18 -10 -20 0.40 0.40 -30 Feb-18 Mar-19 Apr-20 May-21 Jun-22 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Source: Ban
Slide 61: Nowcasting – Private Consumption
Nowcasting – Private Consumption Nowcasting Private Consumption % y/y; nsa 40 Private Consumption Nowcast Private Consumption Nowcast 30 10.03 9.11 8.73 9.29 20 8.79 8.24 7.58 7.38 7.4 7.07 10 5.89 0 -10 -20 -30 Feb-18 Mar-19 Apr-20 May-21 Jun-22 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Source: B
Slide 62: Performance of households' expenditures
Performance of households’ expenditures Households’ Expenditures – Resilient Sectors Households’ Expenditures – Vulnerable Sectors Debit & Credit Purchases; January 1st, 2020 = 100 Debit & Credit Purchases; January 1st, 2020 = 100 Supermarkets Accomodation and Food Services 350 250 Healthcare Tran
Slide 63: SMEs reopening: Recovery of medium businesses
SMEs reopening: Recovery of medium businesses Surviving SMEs – Size of Business POS Billing; January 1st, 2020 = 100 130 Small Medium 120 17.0% 110 14.6% 100 90 80 70 60 -35.0% 50 -53.1% 40 Jan-20 Jun-20 Nov-20 Apr-21 Sep-21 Feb-22 Jul-22 Source: Banorte DB Rev Div Dep ESG NIM TI LD Loan BAP Guid
Slide 64: Performance of businesses revenues
Performance of businesses revenues SMEs’ Revenues – Resilient Sectors SMEs’ Revenues – Vulnerable Sectors POS Billing; January 1st, 2020 = 100 Debit & Credit Purchases; January 1st, 2020 = 100 Comercio 250 S.Professional Profesionales Retail Sales Services Salud Healthcare Recreation, Sports and C
Slide 65: Signs of greater dynamism in 1Q22, although with further risks ahead
Signs of greater dynamism in 1Q22, although with further risks ahead 2022 GDP: Supply 2022 GDP: Demand % y/y nsa; % q/q sa % y/y nsa; % q/q sa % y/y 1Q22 2Q22 3Q22 4Q22 2022 % y/y 1Q22 2Q22 3Q22 4Q22 2022 GDP 1.8 1.3 2.5 2.7 2.1 GDP 1.8 1.3 2.5 2.7 2.1 Private 7.2 4.1 4.7 3.4 4.8 consumption Agric
Slide 66: Banxico will keep hiking amid a very challenging inflationary outlook
Banxico will keep hiking amid a very challenging inflationary outlook Inflation forecast Reference rate’s trajectory % y/y fortnightly frequency % 14 11 13 10.00 10 12 11 9 10 8.25 2022: 8.50 9 8 8.1 2021: 8 7 7.3 7 6 6 5 2023: 5 4 4.1 3 Headline 4 2020: 4.00 2 3.2 Core Non-core 3 1 3.00 0 2 Dec-2
Slide 67: Market volatility, inflation concerns, and actions from central banks
Market volatility, inflation concerns, and actions from central banks have impacted currencies, albeit with idiosyncratic factors still at play individually 2022 performance vs. USD USD/MXN forecast %, YTD Pesos per dollar RUB 33.5 24.25 PEN 3.5 Forecast BRL 3.2 23.00 MXN 0.4 21.80 HKD -0.7 21.75
Slide 68: Latest public finances update
Latest public finances update –including some of the shocks– showed little changes on fiscal accounts MoF: Macroeconomic assumptions and fiscal variables Historical Balance of Public Sector Borrowing Requirements (HBPSBR) % of GDP 2022 2023 60 Actual GEPC (Sep'21) Pre-GEPC (Apr'22) GDP 3.4 3.5 51.
Slide 69: 2022: A very relevant year for Mexican politics
2022: A very relevant year for Mexican politics 2022’s relevant dates in the political agenda President López Obrador’s pending reforms Sep-1: Oct-31: Start of Congress Deadline to approve Constitutional or that require a qualified majority in ordinary sessions’ the Revenue Law Congress: period ▪
Slide 70: Composition of the Lower House and Senate
Composition of the Lower House and Senate Lower House Senate Seats Absolute Seats Simple majority: 251 majority: 65 Qualified Qualified majority: 334 majority: 86 PT PVEM MC PVEM PES MC 33 40 25 PT 6 4 9 PRD PRD 4 15 3 PRI Morena Morena 13 203 PRI 70 61 PAN PAN 22 113 Ind. Ind. 1 6 Morena + PT + P
Slide 71: Implications of Lower House elections
Implications of Lower House elections, in which the President’s party (Morena) and allies have an absolute majority (>50%), but not a qualified one (>66%) With an absolute majority they can approve… …while a qualified majority is required for Obtained with 50% + 1, equivalent to 251 legislators. T
Slide 72: Mexico's geographical location, benign demographics and natural resources
Mexico's geographical location, benign demographics and natural resources (among other factors) remain as key drivers for the economy Real GDP growth FDI Population pyramid in 2020 % y/y US$ billion in nominal terms Million people by age bracket 10 6.8 Utility reinvestment and accounts between 85+
Slide 73: Nearshoring's impact for Mexico
Nearshoring’s impact for Mexico vs countries from the other region Nearshoring: Potential increase in exports US$ millions, trade in goods Country Profits Nearshoring: per US potencial Incremento Otherdeprofits exportaciones Total US$ millones, comercio de bienes Mexico 29,679.4 5,598.8 35,278.2 B
Slide 74: Banking sector KPI's
Banking sector KPI’s Capitalization ratio Non-performing loans ratio % of net capital / credit risk assets % of total loan portfolio 40 10 35 Capitalization ratio Banking sector's average 9 Total Consumer 30 8 25 26.38 Mortgage Firms 20 7 19.34 15 6 10 5 5 4 0 Inbursa Banamex Bansí BIAfirme Actinv
Slide 75: Financial access in Mexico
Financial access in Mexico Key FAS Indicators Outstanding deposits with commercial banks % GDP 30 28.85 2016 2017 2018 2019 2020 Number of ATMs per 100,000 adults 54.59 55.62 58.82 61.54 62.13 25 Number of commercial bank branches per 14.02 14.03 13.86 13.73 12.79 20 100,000 adults 2012 2013 2014
Grupo Financiero Banorte — Q2 2022 Earnings Presentation on 6ix