Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Q1 2021 Earnings Presentation
24 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Apr 23, 2021
Slide 1: 1Q21 Earnings Call
1Q21 Earnings Call April 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: 12 months of lockdowns and support to clients and employees
12 months of lockdowns and support to clients and employees Market Share NIM Close to Performing clients, Group 4.9% better than Credit Quality employees +6bp q/q peers NPL and investors Bank 5.6% RESULTS healthier (20bp) q/q than despite lower expected Net Income rates +43% q/q; (6%) y/y COVID-19
Slide 4: Provisions below expectations
Provisions below expectations Credit Provisions 9.0 Billion Pesos ● No need for additional advanced provisions. 8.0 7.0 3bn Anticipated o A Total of $7.3bn registered in advance during 202.0 6.0 + 1.9bn Provisions 2bn + Write-offs P&L 5.0 +0.4bn o Strategic approach to anticipate write-offs. 4.0 4
Slide 5: Resilient results, partially leaving the COVID-19 crisis behind
Resilient results, 4,000 Net Income partially leaving the COVID-19 crisis behind 3,500 3,048 3,000 ● Despite the pandemic and easing cycle of rates, 2,500 March’s Net Income practically at the same level y/y. 2,000 ● ROE recovering q/q on Insurance seasonality and lower 1,500 expenses. But affecte
Slide 6: Net Interest and Non-Interest Income
Net Interest and Non-Interest Income NII ● Robust NII, +2% q/q growth supported by insurance 8,000 seasonality, but affected on claims. 7,500 7,018 ● Fees (11%) q/q, waiting for the economic reactivation 7,000 post holiday season. 6,500 ● Standard quarter in trading & other income. 6,000 ● Total r
Slide 7: Fees on services affected but recovering
Fees on services affected but recovering ● Quarterly Net Fees down on seasonality, Net Fees 4,500 and affected by COVID-19 over the last 12 months. 4,000 ● Fees charged (19%) q/q, +4% y/y, 3,500 3,455 3,214 Core banking fees (5%) q/q, +17% y/y. 2,967 3,000 ● Digital transactions leading growth, 2,
Slide 8: Moderated loan growth and quality better than expected
Moderated loan growth and quality better than expected NPL Ratio ● Good quarter for mortgages: +2% q/q growth. 2.5% Flat in commercial loans and (2%) in Corporates, q/q. 1.9% 2.0% Government (1%) q/q. 1.8%* 1.3% ● Asset quality better than expected, 1.5% 1.7% 1.1% Cost of risk at only 1.6%. 1.0% A
Slide 9: Subsidiaries
Subsidiaries ● Business diversification pays-off in difficult times: Net Income by Subsidiary 1Q21 ▪ Broker Dealer & Mutual Funds +18% q/q ▪ Insurance +82% q/q Other Finance Companies Holding ▪ Others +185% q/q Afore 3% 3% 5% ● Long-Term Savings businesses contribute with 20% of total NI. Bank Ann
Slide 10: Insurance business affected by COVID-19
Insurance business affected by COVID-19 Retained Insurance Technical Reserves ● Robust insurance seasonality, but affected Premiums 5,000 4,537 12,000 on claims. 11,085 3,304 +37% ● Damages and claims affected by $1.8bn in +26% 3,000 y/y relation to COVID-19. 10,000 y/y 8,815 ● Damages & claims +1
Slide 11: Integrated Annual Report 2020
Integrated Annual Report 2020 Updates • ESG data was present throughout the report and not just in one chapter, as we did in previous years. • First time using the SASB standards (Sustainability Accounting Standards Board). • We updated our Sustainability Model and our Materiality Matrix. We used
Slide 12: Financial Highlights
Financial Highlights Pg. 12 12
Slide 13: Prepared for the new normal
Prepared for the new normal Expenses Balance Sheet Under control and focused on Digital Solid efficiency Strategic path to accelerate digital transformation Capital NIM Loan portfolio CAR 21.7% mix CET1 15.0% Cost of funds Pg. 13 13
Slide 14: Resilient NIM
Resilient NIM NIM ● Bank’s NIM temporarily affected but again in the 8.00% 5.8% level. 7.4% ● Resilient on good portfolio mix and cost of funds. 7.50% ● Group’s NIM affected in the quarter by insurance 7.00% technical reserves and claims. 6.50% 6.3% 5.9% 6.00% 5.8% 5.6% 7.0% Bank’s NIM 5.50% 4.8%
Slide 15: Margin sensitivity evolution
Margin sensitivity evolution Margin Sensitivity ● Fixed rate hedges elimination. D 100 bps on NII Million pesos ● Dynamic risk management hedges. ● Variable rate funding. 1,000 ● Active ALCO ▪ A-L rates spread. 600 561 566 4Q18 4Q19 4Q20 1Q21 Pg. 15 15
Slide 16: Expenses with strict control
Expenses with strict control ● Personnel expenses reduced driven by efficiency program. +4.0% 1Q ● Total growth in line with guidance: 4.0% y/y. y/y ● Strict expense control and structural adjustments strategy for 2021. 4,400 Non-Interest Expenses 4,200 4,000 1Q21 q/q y/y 3,800 Personnel Expenses
Slide 17: Bank regulatory Capital Ratio
Bank regulatory Capital Ratio Capital Adequacy Ratio (CAR) ● Strong CAR and CET1, well above regulatory Basel III requirements. Dividends from 2019 NI ● Dividends not computing for CET1 21.1% 21.7% are already (currently sitting in GFNorte’s balance sheet, 19.7% 20.2% on GFNorte’s balance sheet no
Slide 18: Liquidity
Liquidity ● Strong liquidity, supported by deposits growth. Liquidity Coverage Ratio CCL (%) ● Liquidity coverage ratio well above minimum regulatory requirements. 225% 208% 200% 193% 175% 150% 125% 118% 117% Minimum 120% Regulatory 100% 100% 85% Temporary 75% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1
Slide 19: 2021 Guidance without change
2021 Guidance without change Guidance Loan Growth 6% – 8% NIM Contraction (15) – (30bps) Expense Growth 3.5% – 4.2% Efficiency 39.5% – 41.0% Cost of Risk 2.1% – 2.3% Tax Rate 26% – 27% Net Income 33.5 – 35.0 ROE 15% – 16% Bank ROE 18% - 19% Macro Estimates for 2021 GDP 3% – 4% Inflation 4.0% R
Slide 20: Selected industry exposures
Selected industry exposures Vs. Total Loans 1Q21 Oil Industry Pemex 3.4% Pemex Suppliers 1.8% Electricity Company CFE 2.3% CFE Suppliers 0.4% Construction & Real State Housing 1.1% SMEs • 77% Nafin / Bancomext guaranteed 4.7% Commercial 1.9% loans, 45% of SME book Others 2.0% Dollar denominated 10
Slide 21: Appendix
Appendix GRUPO FINANCIER. Pg. 21 BANORTE
Slide 22: Continuous evolution in ESG on the back of constant feedback from investors
Continuous evolution in ESG on the back of constant feedback from investors Environmental Governance • Integrated Annual Report • Carpool Waze Mexico - Adherence of Afore XXI • Updated Materiality Matrix • Smart mobility strategy (MOVIN) - Corporate offices in Mexico City • Code of Conduct trainin
Slide 23: 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 13.2 100 1.0 12.0 80 12.5 1.5 0.3 10.5 90 91 94.4 92.8 10.0 0.3 0.003 60 7.5 4.6 40 5.0 0.003 20 2.5 0.66 0.6 0.25 0.24 0.0 0 4Q
Slide 24: 1Q21 Earnings Call
1Q21 Earnings Call April 23rd, 2021
Grupo Financiero Banorte — Q1 2021 Earnings Presentation on 6ix