Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Grupo Fin Banorte Ord — Q3 2024 Earnings Presentation
28 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Oct 31, 2024
Slide 1: Earnings Call 3Q24
th anniversary Earnings Call 3Q24 October 30th, 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, +29% y/y 9M24 +20% y/y +3% q/q, +11% y/y; retail +11%, commercial +10%, NIM corporate +24% and government loans +2% y/y 3Q24 Group 6.5% RESULTS +17bps y/y Asset Quality Net Income Ps 14.2 bn, NPLs 1.0% Banorte Bank 6.7% +2% q/q, +7% y/y
Slide 4: Sound profitability
Sound profitability Net Income 7% ◼ Net Income for the quarter +2% q/q and +7% y/y; Million y/y 16,000 9M24 +8% y/y pesos 14,238 14,018 ◼ Higher profitability levels: 14,000 13,268 ▪ ROE at 22.9%, +140bps y/y; 12,000 9M24 22.7%, +150bps y/y 10,000 ▪ ROA at 2.4%, +3bps y/y; 9M24 2.3%, (4bps) y/y 8,00
Slide 5: Subsidiaries' Net Income and ROE
Subsidiaries’ Net Income and ROE ◼ Sound business diversification: Net Income by Subsidiary ▪ Banorte Bank +7% y/y; 9M24 +7% y/y, ROE +29.5% 9M24 ▪ Broker dealer & mutual funds 9M24 +29% y/y ▪ Insurance 9M24 +28% y/y Afore Holding ▪ Annuities 9M24 +17 y/y 2.3% 2.6% Annuities ▪ Afore 9M24 +25% y/y 4.
Slide 6: Loan book growth with sound asset quality
Loan book growth with sound asset quality ◼ Emphasis on our analytical ability to select customers Performing Loans (stages 1 & 2) Billion 1,125 ◼ Portfolio stages 1 & 2 growing +2.8% sequentially and 1,150 1,094 pesos 1,100 +11.4% y/y 1,010 1,050 ◼ Expansion in commercial and corporate portfolios:
Slide 7: Loan book growth with sound asset quality
Loan book growth with sound asset quality ◼ Emphasis on our analytical ability to select customers Mortgage Auto Billion ◼ Expansion in the consumer portfolio +11.3% y/y 280 pesos 267 55 50 270 261 50 47 ◼ Annual growth across all consumer products: 260 249 45 250 41 ▪ Mortgage +7.2% 240 40 230 ▪ Au
Slide 8: Healthy loan portfolio
Healthy loan portfolio NPL Ratio ◼ Consistent sound asset quality, NPL 1.0% 2.00% Previous criteria IFRS ◼ NPL ratio continues well below expectations 1.75% ◼ No negative signs in sector or geographic trends 1.50% 1.25% 1.01% 1.01% 1.00% 1.00% 0.75% 0.50% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Slide 9: Core Banking Fees keep growing
Core Banking Fees keep growing Net Fees ◼ Net fees +7% q/q, +29% y/y; 9M24 +20% y/y, doble-digit 29% y/y growth across all lines of business: banking, brokerage Million 5,500 5,302 house, mutual funds. pesos 4,937 5,000 ◼ Core banking fees +4% q/q, +19% y/y; 9M24 +15% y/y 4,500 4,094 ◼ POS transacti
Slide 10: A Customer-centric bank in minutes
A Customer-centric bank in minutes 86 86 92 84 NPS 93 85 70 85 New claim Mobile payroll loan Digital advanced Portability Opening account 4 min 3 min payroll Opening a new Tablet in branches Time to Market 3 min Opening a digital account on Tablet 3 min 9 min enlace account ATM Withdrawal 5 min 5 mi
Slide 11: Sustainability Updates
Sustainability Updates TNFD: Initial assessment of 3 +1,700 beneficiaries of our Our 2023 annual report Green auto loans: sectors in our portfolio: Financial Education received GOLD award by “Autoestrene Verde”: infrastructure, food & Program for clients. LACP Awards for its design, YTD Placement: ~
Slide 12: Financial Highlights
Financial Highlights th 12 anniversary
Slide 13: Sustained & profitable organic expansion
Sustained & profitable organic expansion Transformation Balance Sheet ROE Continuous optimization Ongoing transformation Group of the Group and its subsidiaries, of the 22.9%, +140bps y/y Balance Sheet with important focus on bineo and Banorte Bank the JV with Rappi 31.1%, +228bps y/y NIM Expenses C
Slide 14: Net Interest and Non-Interest Income growing
Net Interest and Non-Interest Income growing ◼ NII +13% q/q (normalized from 2Q annuities effect), NII 9M24 +10% y/y Million 40,000 pesos 36,008 ◼ NII Loans/Deposits +4% q/q 35,000 33,189 31,938 ◼ Non-Interest Income, 9M24 +20% y/y: 30,000 ▪ Net fees +7% q/q, +29% y/y, 9M24 +20% y/y Annuities’ ▪ Pre
Slide 15: Sound evolution of core banking ratios
Sound evolution of core banking ratios NIM of Banorte Bank ◼ NIM of Banorte Bank 6.7%, record high 7.0% 6.7% ◼ NII +3% q/q, +7% y/y; 9M24 +8% y/y 6.5% 6.5% 6.4% ◼ Net fees +3% q/q, +25% y/y; 9M24 +17% y/y 6.0% 5.5% 5.0% 4.5% 4.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2022 2023 2024 NII of Banorte Bank 7%
Slide 16: Net Interest Income sensitivity evolution
Net Interest Income sensitivity evolution Bank's NII Sensitivity per 100bps change in ◼ Dynamic risk management hedging rate - Local Currency Balance Sheet ◼ Focus on stable low-cost liabilities 1400 Million pesos 1,222 ◼ Active ALCO 1200 1,127 1,205 1,064 11.1% 13% 979 11% ◼ Organic growth of fixed
Slide 17: Ongoing profitability at Banorte Bank
Ongoing profitability at Banorte Bank Net Income of Banorte Bank 7% ◼ Banorte’s Net Income +7% y/y; 9M24 +7% y/y y/y Million pesos 11,715 11,770 11,020 ◼ ROE at 31.1%, +228bps y/y; 11,000 9M24 29.5%, +180bps annual expansion 9,000 ◼ ROA at 2.6%, +6bps y/y; 9M24 2.5%, (3bps) y/y 7,000 5,000 1Q 2Q 3Q
Slide 18: Managerial NIM
Managerial NIM 7.0% ◼ NIM of the Group up to 6.5% 6.7% ◼ Managerial NIM or 6.5% 6.5% NIM ex-Insur&Annuities 6.0% +19bps q/q 6.3% ▪ IFRS adoption in 2022 has added volatility to the annuities and insurance contributions to 6.0% 6.0% 5.8% the margin 5.8% 5.9% ▪ The exclusion of annuities and insurance
Slide 19: Cost of Funds
Cost of Funds TIIE 28D Cost of Funds vs 11.50 ◼ Cost of fund control; improving mix Banxico Ref. Rate Cetes 28D CETES Reference Rate ▪ Ratio temporarily affected by the timing of the Cetes 11.25 downward move 65% 11.00 ◼ Non-interest-bearing demand deposits +8% y/y 10.75 ◼ Time deposits +3% q/q, +20
Slide 20: Resilient asset quality
Resilient asset quality ◼ Credit provisions down (5%) q/q, Credit Provisions Million pesos 9M24 +16% y/y driven by credit volume & mix, and 4,854 4,621 5,000 4,541 the incorporation of Tarjetas del Futuro (TDF); Credit Provisions ex-TDF (5%) y/y 4,000 ex-TDF 4,494 4,317 ◼ Cost of risk to 1.6%; 1.5%
Slide 21: Optimizing expenses & paving the road for the future
Optimizing expenses & paving the road for the future ◼ Revenues +2% q/q, 9M24 +10% y/y Million Non-Interest Expenses pesos ◼ Expenses +2% q/q, 9M24 +13% y/y 14,000 12,741 13,031 11,538 ▪ Shared services initiative already in full implementation 12,000 10,000 ◼ Cost to income 35.5% 8,000 6,000 4,000
Slide 22: Bank's regulatory capital & liquidity ratios
Bank’s regulatory capital & liquidity ratios ◼ Strong CAR and CET1, well above regulatory requirements, Capital Adequacy Ratio (CAR) even after the latest AT1 call Basel III ◼ CET1 converging towards management's optimal range Buffer 4.5pp ◼ Unlevered Capital 22.2% 21.3% 20.7% 20.2% ◼ Liquidity exce
Slide 23: 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%* Efficiency 36.0% – 37.0% Cost of Risk 1.7% - 1.9% Tax Rate 25% – 27% Net Income 56.0 – 56.8 bn** ROE 2024 21.5% – 22.5% ROE of the Bank
Slide 24: Appendix
Appendix th 24 anniversary
Slide 25: Selected industry exposures
Selected industry exposures Vs. Total Loans 3Q24 Oil Industry* 3.5% Electricity Companies* 2.1% Construction & Real Estate Housing 1.4% Commercial 0.9% Vs. Total Loans Others 1.3% SMEs Malls 1.4% • 67% Nafin / Bancomext guaranteed 5.0% loans, 43% of SME book Tourism 5.5% Dollar denominated 14.3% Res
Slide 26: Historical expenses by category
Historical expenses by category Expenses / Net Income Historical growth by category x th 26 anniversary
Slide 27: Sustainable business
Sustainable business Social and Environmental Risk Management System Responsible Investment *FN-AC-410a.1 +15% YoY During 3Q24: 150,000 5.42% Non-sustainable 140,000 analyzed portfolio 546 Analyzed loans 130,000 AFORE XXI Banorte 120,000 1.97% Sustainable 68 loans with IFC 0.09% Climate-related reco
Slide 28: Earnings Call 3Q24
th anniversary Earnings Call 3Q24 October 30th, 2024
Grupo Fin Banorte Ord — Q3 2024 Earnings Presentation on 6ix