Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Q2 2022 Earnings Presentation
26 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Jul 22, 2022
Slide 1: Earnings Call 2Q22
Earnings Call July 22nd, 2022 2Q22
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: Solid performance with sequential improvements
Solid performance with sequential improvements Expenses Net Fees +7.0% 1H y/y, below Margin Sensitivity +13% inflation NIM 1H y/y of 8.0% Ps 1.2bn for every 100bps ∆ in RESULTS the reference rate Group 5.9% on funding COVID-19 +89bps y/y Net Income efficiencies fifth wave, with low impact in +7% q
Slide 4: Resilient results
Resilient results ● Net Income +7% sequentially, Net Income 11,524 and +30% 1H y/y. 10,748 ● ROE at 19.6%, +146bps q/q, substantial recovery despite impact by insurance claims. 8,568 ● ROA 2.3%, +9bp q/q. 6,518 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020 2021 2022 ROE ROA 25.0% 3.0% 19.6% Previous criteria
Slide 5: Net Interest and Non-Interest Income
Net Interest and Non-Interest Income ● Robust NII, +21% 1H y/y. NII 27,051 ● Non-interest Income decreased (9%) 1H y/y. 30,000 Previous criteria IFRS 26,922 ● Net Service Fees +13% 1H y/y. 25,000 21,785 ● Trading normalizing operations, Ps 1.0 bn. 20,000 15,000 First half of 2022 +56% y/y. 10,000
Slide 6: 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 7: Growth across the complete loan portfolio
Growth across the complete loan portfolio ● Strong quarterly expansion Performing Loans (stages 1 + 2) 861 o commercial +2.5% q/q, +7.2% y/y, 870 o corporate +2.2% q/q, +12.0% y/y, 850 835 830 o government +4.0% q/q, +7.6% y/y. 810 795 ● Performing portfolio (Stages 1 + 2) grew +8.3% y/y. +8.3% 79
Slide 8: Growth across the complete loan portfolio
Growth across the complete loan portfolio ● All consumer loans with sustained quarterly expansion. Payroll Credit Card 64 62 42 41 ● Annually, only auto loans are lagging. 62 41 40 60 57 40 ● Credit card and payroll loans with double digit growth. 58 39 56 54 38 37 54 37 52 +14.3% 36 +11.4% 50 48
Slide 9: Healthy Loan Portfolio
Healthy Loan Portfolio NPL Ratio ● Resilient asset quality, just +2 bps sequentially. 1.80% Previous criteria IFRS ● NPL ratio continues well below expectations. 1.60% 1.40% 1.20% 1.31% 1.03% 1.00% 0.80% 1.00% 1.02% 0.60% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2020 2021 2022 Non-performing Loans Ratio Prev
Slide 10: Subsidiaries back to normal operating levels, but Insurance is still affected
Subsidiaries back to normal operating levels, but Insurance is still affected ● Business diversification, a lever in difficult times: Net Income by Subsidiary o Bank +23% q/q, +36% 1H y/y. 1H22 o Broker Dealer +34% 1H y/y. Other Finance o Insurance, quarterly down on seasonality but +58% 1H y/y, A
Slide 11: Insurance business steadily improving
Insurance business steadily improving Retained Insurance Technical Reserves 4,522 Premiums 4,537 6,000 ● 3,304 Operating Income decreases (33%) sequentially on 12,000 seasonality, but expands +54% 1H y/y. 4,000 10,941 1,062 ● Claims below (9%) q/q. The reduction continues in -1,525 765 2,000 -248
Slide 12: 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 reg
Slide 13: ESG updates
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 the financial Adhesion to: FTSE4Good Operadora de Fondos inclusion of refugees
Slide 14: Financial Highlights
Financial Highlights GRUPO FINANCIERO BANORTE
Slide 15: Delivering amidst macroeconomic uncertainty
Delivering amidst macroeconomic uncertainty Expenses Balance Sheet Digital Efficient control at Shielded Balance institutional level; Digital Transformation, below inflation Digital Bank, and JV with Sheet to Rappi, the main pillars of face 2H22 Banorte’s strategy & benefit from rates cycle Capita
Slide 16: Resilient results, particularly at the bank level
Resilient results, particularly at the bank level Net Income of the Bank ● NII of the Bank growing +6% sequentially and +19% y/y. 10,000 Million pesos 9,374 7,632 ● NIM quarterly expansion to 5.6%, +33bps sequentially. 8,000 6,522 ● Net Income with solid results +23% q/q, 6,000 and +36% 1H y/y. 3,
Slide 17: NIM expansion
NIM expansion ● NIM of the Bank benefiting from former rate hikes, at NIM of the Bank 5.6%. Effects from the latest hikes are still pending. 7.50% 7.4% ● Expansion on good portfolio mix and growth, efficient 7.0% 7.00% cost of funds and margin sensitivity to rates. ● Group’s NIM at 5.9%. Average E
Slide 18: Better than expected Asset quality
Better than expected Asset quality ● Shielded balance sheet, with remaining Ps 1.3bn in Credit Provisions excess provisions. 9.0 Billion Pesos 8.0 ● Write-off rate at 0.32%, below its normal. 7.0 3bn + Anticipated Provisions 6.0 + Write-offs ● Cost of risk remains at historically low levels. 5.0 1
Slide 19: Funding Cost trending in the right direction
Funding Cost trending in the right direction ● Cost of funds steady at 37.5% of CETES, improving Cost of Funds vs CETES Reference Rate significantly since the peak in June 2020. 80% 75% ● Successful strategy at branch network and digital channels to increase deposits. 70% ● Demand deposits represe
Slide 20: Margin sensitivity evolution
Margin sensitivity evolution Margin Sensitivity − 100 bps on NII ● Dynamic risk management hedges. Local Currency Balance Sheet Million pesos ● Focus on stable low-cost liabilities. 1,127 1,156 1,167 979 ● Active ALCO. 842 638 ● Organic growth of floating rate portfolio. 554 428 566 4Q18 4Q19 2Q20
Slide 21: Expenses
Expenses +7.0% Non-Interest Expenses 1H y/y ● +7.0% 1H y/y, contained below inflation of 8.0%. Million pesos 14,000 Previous criteria IFRS ● Flattish cost to income ratio q/q; improved when compared 12,000 10,024 10,767 10,712 annually. 10,000 8,000 6,000 4,000 2,000 10,466 10,307 10,627 11,612 10
Slide 22: Bank's regulatory capital ratio & liquidity
Bank’s regulatory capital ratio & liquidity ● Strong CAR and CET1, well above regulatory Capital Adequacy Ratio (CAR) requirements. Basel III ● CET1 still above management's optimal range, even 24.7% 25.9% after full dividends are distributed. 22.9% 21.9% 21.8% ● Unlevered Capital. ● Liquidity cov
Slide 23: Appendix
Appendix GRUPO FINANCIERO BANORTE Pg. 23
Slide 24: Selected industry exposures
Selected industry exposures Vs. Total Loans 2Q22 Oil Industry* 4.9% Electricity Companies* 3.9% Construction & Real Estate Housing 1.4% Commercial 1.7% SMEs 4.5% Others 1.2% Dollar denominated 13.1% Malls 1.9% Tourism 4.6% Restaurants 0.2% Airports 0.0% • Including traditional, clean energy and su
Slide 25: 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 26: Earnings Call 2Q22
Earnings Call July 22nd, 2022 2Q22
Grupo Financiero Banorte — Q2 2022 Earnings Presentation on 6ix