Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Q2 2021 Earnings Presentation
22 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Jul 23, 2021
Slide 1: 2Q21 Earnings Call
2Q21 Earnings Call July 23rd, 2021
Slide 2: Disclaimer
Disclaimer ▪ This presentation contains certain general information as of the date hereof, information which have been prepared for information purposes only. Information is hereby presented in summary and does not pretend to be exhaustive and detailed. There is no statement or guarantee herein, e
Slide 3: 5 quarters of lockdowns, close to key stakeholders
5 quarters of lockdowns, close to key stakeholders Market Share NIM Performing Close to better than clients, Asset Quality peers employees Group 4.8% +116bp y/y NPL and investors (9bp) q/q RESULTS healthier Bank 5.9% than 33bp q/q expected Net Income flat q/q; +9% y/y COVID-19 ROE Expenses third w
Slide 4: Resilient results, particularly at the bank
Resilient results, particularly at the bank ● June’s Net Income practically at pre-pandemic levels. Net Income 3,500 3,052 ● ROE recovering on economic growth but still affected 3,000 by insurance claims and unpaid dividends. 2,500 ● ROE of the Bank recovering: above 20% levels in June 2,000 on be
Slide 5: Net Interest and Non-Interest Income
Net Interest and Non-Interest Income ● Robust NII, driven by Loans +2% q/q but affected by NII of the Bank insurance seasonality and claims. 6,200 6,000 ● Fees +2% q/q, supported by economic reactivation. 5,800 5,600 ● Trading (13%) q/q on valuations due to recent hike. 5,400 5,200 5,000 4,800 4,6
Slide 6: Core Banking Fees quite above pre-pandemic levels and continuously growing
Core Banking Fees quite above pre-pandemic levels and continuously growing ● Quarterly Net Fees +2%, good growth but still affected Net Fees by COVID-19, specially consumer loans fees. 4,500 ● Fees charged +5% q/q, +24% y/y; 4,000 3,455 3,289 Core banking fees +9% q/q, +41% y/y. 3,500 3,069 3,214
Slide 7: Moderate loan growth and gaining market share
Moderate loan growth and gaining market share ● Excellent expansion in mortgages and payroll loans Market Share +3%, resuming growth in credit cards +2 q/q. Consumer Corporate & Commercial ● Corporate (6%) and government (3%) q/q on Pre- +93bp 12.4% payments. +146bp 11.7% 11.4% 11.2% 11.5% ● Gaini
Slide 8: Healthy Loan Portfolio
Healthy Loan Portfolio ● Regarding the relief programs already finished, currently NPL Ratio 2.50% $6.4 bn (0.8% of total loans) are non-performing, from the $8.2bn in March 2021. 1.9% 2.00% ● Asset quality better than estimated, NPL ratio below expectations and trending to normal levels. 1.50% 1.
Slide 9: Subsidiaries
Subsidiaries ● Business diversification pays-off in difficult times: Net Income by Subsidiary 1H21 o Bank +9% q/q on better NII, Fees and credit quality; o Broker Dealer & Mutual Funds +15% q/q; o Insurance (46%) q/q on seasonality and claims (COVID-19 related); and o Afore +15% q/q. Net Income by
Slide 10: Financial Highlights
Financial Highlights Pg. 10 10
Slide 11: Prepared for the new normal
Prepared for the new normal Expenses Balance Sheet Under control and focused Solid, on efficiency Digital ready to retake growth Strategic path to accelerate digital transformation Capital NIM CAR 21.9% Loan portfolio mix CET1 15.2% Cost of funds Pg. 11 11
Slide 12: Asset quality better than expected
Asset quality better than expected ● Anticipated provisions ($7.3 bn) registered during Credit Provisions 2020 have been more than adequate. 9.0 Billion Pesos 8.0 8.5 ● Write-off rate back to normal after 2020 strategic 7.0 3bn Anticipated approach to anticipate deterioration. 6.0 + Provisions 1.9
Slide 13: Resilient NIM
Resilient NIM ● Bank’s NIM already close to 6% levels. NIM ● Resilient on good portfolio mix and cost of funds. 9.00% 8.6% ● Group’s NIM still affected by insurance claims. 8.50% 7.9% 8.00% 7.50% 7.00% 6.50% 6.2% 5.9% 6.00% 5.7% Bank’s NIM 5.6% 7.0% 5.50% 6.5% 5.9% 4.9% 4.8% 6.0% 5.00% 5.5% 4.50%
Slide 14: Margin sensitivity evolution
Margin sensitivity evolution ● Dynamic risk management hedges. Margin Sensitivity − 100 bps on NII Local Currency Balance Sheet ● Focus on stable low cost liabilities. Million pesos ● Active ALCO. 1,000 ● Organic growth of floating rate portfolio. 638 600 561 566 4Q18 4Q19 4Q20 1Q21 2Q21 Pg. 14 14
Slide 15: Expenses with strict control
Expenses with strict control ● Expenses reduced driven by the efficiency program. Non-Interest Expenses ● Total growth 1H21 +4.6% y/y, in line with guidance. 12,000 ● Strict expense control and structural adjustments 11,500 strategy for 2021. 10,883 11,000 10,851 10,500 10,307 10,000 2Q21 q/q y/y
Slide 16: Bank regulatory capital ratio & liquidity
Bank regulatory capital ratio & liquidity ● Strong CAR and CET1, well above regulatory Capital Adequacy Ratio (CAR) requirements. Basel III ● Unlevered Capital. ● Dividends from 2019 paid according to regulator (25% of Net Income). 21.7% 21.9% 21.1% 20.2% ● Liquidity coverage ratio exceeds minimum
Slide 17: 2021 guidance update
2021 guidance update Original Actual Loan Growth 6% – 8% 5% – 7% NIM Contraction (15) – (30bps) (10) – (25bps) (Below inflation rate) Expense Growth 3.5% – 4.2% 4.2% – 4.6% Efficiency 39.5% – 41.0% 41.0% – 42.0% Cost of Risk 2.1% – 2.3% 1.9% – 2.1% Tax Rate 26% – 27% 26% – 27% Net Income 33.5 – 35
Slide 18: Selected industry exposures
Selected industry exposures Vs. Total Loans 2Q21 Oil Industry Pemex 3.6% Pemex Suppliers 1.5% Electricity Company CFE 2.2% CFE Suppliers 0.4% Construction & Real State SMEs Housing 1.1% • 77% Nafin / Bancomext guaranteed 4.7% Commercial 1.6% loans, 45% of SME book Others 1.8% Dollar denominated 9.
Slide 19: Appendix
Appendix Pg GRUPO FINANCIER BANORTE
Slide 20: ESG updates
ESG updates Environmental Governance • Sustainability Committee (GFNorte) – ESG goals approval • Net-Zero Banking Alliance (NZBA) – Founding signatories • Google Cloud – Strategic alliance to accelerate digital transformation • Climate Ambition Program (Global Compact) – Participation • ALAS20 Awa
Slide 21: Sustainable finance
Sustainable finance Sustainable finance loan book evaluation Responsible investments - Mutual funds % of wholesale banking loan book %, share of total analyzed AUM 15.0 100 12.5 10.5 98.4 9.7 80 91 92.8 92.8 10.0 9.1 0.003 0.388 60 7.5 0.207 4.6 0.389 5.0 0.003 40 2.5 20 0.0 0.6 0.53 0.24 0.31 1Q2
Slide 22: 2Q21 Earnings Call
2Q21 Earnings Call July 23rd, 2021
Grupo Financiero Banorte — Q2 2021 Earnings Presentation on 6ix