Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Grupo Fin Banorte Ord — Q1 2024 Earnings Presentation
29 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Apr 17, 2024
Slide 1: Earnings Call 1Q24
Earnings Call 1Q24 April 17th, 2024
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, exp
Slide 3: Results based on growth and quality
Results based on growth and quality Net Fees Loan Book +7% q/q +1% q/q , +10% y/y +14% y/y Moderate growth in retail & commercial NIM +13% y/y ex-Gov Loans Group 6.5% +1bps q/q (14bps) y/y RESULTS Asset Quality Banorte Bank 6.4% NPLs 0.9% (18bps) q/q Net Income (11bps) q/q (15bps) y/y Ps 14.2 bn, +9
Slide 4: Sound profitability
Sound profitability +9% ▄ Net Income for the quarter +9% q/q and y/y Net Income q/q Million 15,000 14,208 ▄ Higher profitability levels: pesos 13,018 13,044 12,500 ▪ ROE at 22.2%, +134bps q/q 10,000 ▪ ROA at 2.4%, +15bps q/q 7,500 5,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2022 2023 2024 +15bps +134bps ROA q/
Slide 5: Subsidiaries' Net Income and ROE
Subsidiaries’ Net Income and ROE ▄ Sound business diversification: Net Income by Subsidiary ▪ Banorte Bank +2% y/y, ROE 26.4% 1Q24 ▪ Insurance +65% y/y ▪ Annuities +14% y/y ▪ Afore +7% y/y Net Income by Subsidiary ROE Million pesos 1Q24 q/q y/y 1Q24 Banorte Bank 10,292 2% 2% 26.4% Broker Dealer & Mu
Slide 6: Loan book growth with sound asset quality
Loan book growth with sound asset quality ▄ Emphasis on our analytical ability to select customers Billion Performing Loans (stages 1 + 2) ▄ Portfolio stages 1 & 2 growing +1% sequentially and 1,100 pesos 1,032 1,047 +10% y/y 1,050 1,000 950 ▄ Double-digit annual expansion in commercial and 950 +10%
Slide 7: Loan book growth with sound asset quality: consumer
Loan book growth with sound asset quality ▄ Emphasis on our analytical ability to select customers Mortgage Auto 256 ▄ Moderate expansion in the consumer portfolio, Billion 260 pesos 253 50 45 43 +13% y/y 250 234 45 240 ▄ Annual growth across all consumer products: 40 35 230 ▪ Mortgage +9% 220 +9% 3
Slide 8: Healthy loan portfolio
Healthy loan portfolio NPL Ratio ▄ Consistently sound asset quality, NPL improves to 0.93% 2.00% ▄ NPL ratio continues well below expectations 1.75% Previous criteria IFRS ▄ No negative signs in sector or geographic trends 1.50% 1.25% 1.04% 1.04% 1.00% 0.75% 0.93% 0.50% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
Slide 9: Customer's Voice, Key in Banorte's Evolution
Customer’s Voice, Key in Banorte’s Evolution ● On the right track to reach a 90-point NPS score. 1Q24 Voice to value from diligently reviewing every process that could improve customer experience: Banorte Móvil WEB App o processes / services / systems o products o branch-administration, contingency,
Slide 10: Sustainability Updates
Sustainability Updates As evidenced in our 2023 Annual Report, there is a continuous evolution in our sustainability strategy. Assessment of short- and +200 beneficiaries of our GFNorte released its 2023 February 15th, First medium-term projects to Financial Education Program Integrated Annual Repor
Slide 11: Financial Highlights
GRUPO FINANGIERO ) @D BANORTE Financial Highlights
Slide 12: Sustained & profitable organic expansion
Sustained & profitable organic expansion Transformation Balance Sheet ROE Continuous transformation Shielded Group of Banorte to become a digital Balance Sheet from 22.2%, +134bps q/q bank with branches, and the rates cycles Banorte Bank ongoing evolution of bineo and 26.4%, (7bps) q/q the JV with R
Slide 13: Net Interest and Non-Interest Income growing
Net Interest and Non-Interest Income growing ▄ NII +2% q/q, +10% y/y NII ▄ NII Loans/Deposits +1% q/q Million 40,000 pesos 34,039 34,777 35,000 31,730 ▄ Non-Interest Income: 30,000 ▪ Sequential net fees +7%, +14% y/y 25,000 ▪ Premium income +30% y/y 20,000 ▪ Claims +19% y/y 15,000 10,000 1Q 2Q 3Q 4Q
Slide 14: Core Banking Fees keep growing
Core Banking Fees keep growing +14% ▄ Net fees +7% q/q, +14% y/y Net Fees y/y Million 4,793 ▄ Core banking fees +11% y/y, 5,000 pesos 4,465 sequential down (4%) driven by seasonality 4,500 4,208 ▄ POS transactions +17% y/y; +58% y/y in mobile monetary 4,000 transactions 3,500 3,000 2,500 1Q 2Q 3Q 4Q
Slide 15: Ongoing profitability at Banorte Bank
Ongoing profitability at Banorte Bank Net Income of Banorte Bank ▄ Banorte’s Net Income grew +2% q/q and y/y Million pesos 11,000 10,309 10,253 10,474 ▄ ROE at 26.4% 9,000 ▄ ROA at 2.4% 7,000 5,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2022 2023 2024 ROA of Banorte Bank ROE of Banorte Bank 3.0% 2.6% 30.0% 27.5
Slide 16: Sound evolution of core banking indicators
Sound evolution of core banking indicators NIM of Banorte Bank ▄ NIM of Banorte Bank at 6.4%, (18bps) q/q given higher 7.0% 6.5% 6.6% growth in average earning assets +2.0%, than in IIN 6.5% 6.4% (0.9%) 6.0% ▄ NII +8% y/y 5.5% ▄ Net fees +9% q/q, +12% y/y 5.0% 4.5% 4.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 20
Slide 17: Managerial NIM
Managerial NIM 7.0% ▄ NIM of the Group up to 6.5% ▄ Managerial NIM or NIM ex-Insur&Annuities 6.6% 6.4% 6.5% down to 5.9%, (12bps) q/q given higher 6.5% growth in average earning assets +2.0% than in IIN +0.9% 6.0% 6.0% 6.0% 5.9% ▄ IFRS adoption in 2022 has added volatility to the annuities and insur
Slide 18: Cost of Funds
Cost of Funds ▄ Control for the cost of funds trend, improving mix Cost of Funds vs CETES Reference Rate ▄ Non-interest-bearing demand deposits (3%) q/q on 55% seasonality, +6% y/y 54% ▄ Time deposits +7% q/q, +33% y/y ▄ Contraction of money market deposits (18%) q/q 50% 47.9% 45% 46.2% Change 1Q24
Slide 19: Resilient asset quality
Resilient asset quality ▄ Credit provisions up +36% q/q, +29% y/y given Credit Provisions credit volume & mix, and the incorporation of Million pesos 4,868 Tarjetas del Futuro; ex-TDF up +30% q/q 5,000 3,771 3,591 *4,536 ▄ 4,000 Cost of risk to 1.8%, 1.7% ex-TDF 3,000 ▄ Write-off rate at 0.49%, 0.45
Slide 20: Net Interest Income sensitivity evolution
Net Interest Income sensitivity evolution ▄ Dynamic risk management hedging Bank's NII Sensitivity per 100bps change in rate - Local Currency Balance Sheet ▄ Focus on stable low-cost liabilities Million pesos ▄ Active ALCO 1400 1,222 1,167 1,205 13% 1200 1,127 1,156 1,064 11.5% ▄ Organic growth of f
Slide 21: Expenses, control & paving the road for the future
Expenses, control & paving the road for the future ▄ Expenses (14%) q/q, +13% y/y; ex-bineo & TDF Non-Interest Expenses +8% y/y Million pesos 14,615 14,000 12,591 ▄ Cost to income breaking the 34% level to 33.99% 12,000 11,148 (49bps) y/y 10,000 8,000 6,000 4,000 2,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 202
Slide 22: Historical expenses by category
Historical expenses by category Expenses / Net Income Historical growth by category 70% x 3.5x IT 3.4 60% Net Income 3.0x Human Resources 3.0 Administrative & Facilities 50% Operating 46% 2.5x 40% Human Resources IT Operating 30% Administrative & Facilities 2.0x 1.9 25% 20% 1.5x 1.5 10% 10% 1.4 6% 0
Slide 23: Bank's regulatory capital & liquidity ratios
Bank’s regulatory capital & liquidity ratios ▄ Strong CAR and CET1, well above regulatory requirements Capital Adequacy Ratio (CAR) ▄ CET1 still above management's optimal range, even after full Basel III dividend distribution ▄ Unlevered Capital 22.1% 21.7% 22.2% ▄ Liquidity exceeds minimum regulat
Slide 24: Digital strategy progress
Digital strategy progress 2018-2019 2020 1-2-3 Plan We are Strategic Multi- Already a digital bank here! Continuous reflection: channel with branches, mobile evolution of the Bank banking, bank in minutes, digital portfolio NPS (App: 83.9) Rappi JV 2020 Dec’23 Rapid Growth Control Market Fit & Value
Slide 25: Appendix
) SP ecNGRTE Appendix
Slide 26: 2024 Guidance
2024 Guidance 2024 Guidance Loan Growth 10% – 12% NIM 6.1% – 6.4% NIM of Bank 6.3% – 6.5% Recurring Expense Growth 6.0% - 7.0% Total Expense Growth* 13.0% – 14.0% * Includes organic growth, bineo and JV Rappi (no material impact in Efficiency 36.0% – 37.0% Net Income) Cost of Risk 1.8% – 2.1% Tax Ra
Slide 27: Selected industry exposures
Selected industry exposures Vs. Total Loans 1Q24 Oil Industry* 3.1% Electricity Companies* 2.9% Construction & Real Estate Housing 1.3% Commercial 1.0% Vs. Total Loans Others 1.4% SMEs Malls 1.5% • 74% Nafin / Bancomext guaranteed 4.9% loans, 47% of SME book Tourism 4.6% Dollar denominated 11.7% Res
Slide 28: Sustainable business
Sustainable business Social and Environmental Risk Management System Responsible Investment +8% *FN-AC-410a.1 y/y 150,000 AFORE XXI Banorte 10.87% Non- During 1Q24: sustainable analyzed 987 Analyzed loans 100,000 112 loans with IFC Assets with ESG criteria 9% portfolio 0.49% Sustainable recommendati
Slide 29: Earnings Call 1Q24
Earnings Call 1Q24 April 17th, 2024
Grupo Fin Banorte Ord — Q1 2024 Earnings Presentation on 6ix