Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Grupo Fin Banorte Ord — Q2 2024 Earnings Presentation
30 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Jul 24, 2024
Slide 1: Earnings Call 2Q24
Earnings Call 2Q24 July 24th, 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 +3% q/q, +18% y/y 1H24 +16% y/y +5% q/q, +13% y/y Moderate growth in retail & commercial +12% y/y, NIM corporate +23% and government loans +11% y/y 1H24 Group 6.0% RESULTS (8bps) y/y Asset Quality Net Income Ps 14.0 bn, NPLs 1.0% Banorte Bank 6.
Slide 4: Sound profitability
Sound profitability ◼ Net Income for the quarter (1%) q/q and +7% y/y; Net Income 7% 1H24 +8% y/y y/y Million ◼ Higher profitability levels: pesos 15,000 14,208 14,018 13,088 ▪ ROE at 23.3%, +236bps y/y; 12,500 1H24 22.6%, +155bps y/y 10,000 ▪ ROA at 2.3%, (8bps) y/y ; 1H24 2.3%, (7bps) y/y 7,500 5,
Slide 5: Subsidiaries' Net Income and ROE
Subsidiaries’ Net Income and ROE ◼ Sound business diversification: Net Income by Subsidiary ▪ Banorte Bank +13% y/y; 1H24 +7%, ROE +28.7% 1H24 ▪ Insurance 1H24 +30% y/y ▪ Annuities 1H24 +22 y/y Afore Holding 2.8% ▪ Afore 1H24 +3% y/y 2.2% Annuities 4.6% Net Income by Subsidiary Banorte Bank Insuranc
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 ◼ Portfolio stages 1 & 2 growing +4.5% sequentially and 1,150 1,094 pesos 1,100 1,047 +13.2% y/y 1,050 ◼ Double-digit annual expansion in commercial and 1,000 96
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 ◼ Expansion in the consumer portfolio +11.6% y/y Billion 270 pesos 256 261 50 45 47 260 ◼ Annual growth across all consumer products: 250 241 45 38 240 40 ▪ Mortgage +8.3% 230 ▪ Auto +22.
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% 1.05% 1.01% 1.00% 0.75% 0.93% 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 +3% q/q, +18% y/y; 1H24 +16% y/y 18% y/y ◼ Core banking fees +14% y/y; 1H24 +13% y/y Million 5,000 pesos 4,793 4,937 ◼ POS transactions +21% y/y; +52% y/y in mobile monetary 4,500 4,187 transactions 4,000 3,500 3,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 20
Slide 10: 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. 2Q24 Reviewing every process that could improve customer experience: Banorte Móvil WEB ▪ processes / services / systems App ▪ products ▪ branch administration, contingencies, others +0.4 pts 84.6 +2.3 pt
Slide 11: Sustainability Updates
Sustainability Updates Annual compliance with During the quarter, +500 FTSE rating of 3.7/5, Launched Hipoteca Verde National Emissions Registry payroll clients attended our Confirming Banorte’s Banorte, the newest (RENE), of Scope 1 & 2 Financial Education participation in FTSE4Good addition to Ban
Slide 12: Financial Highlights
GRUPO FINANGIERO ) @D BANORTE Financial Highlights
Slide 13: Sustained & profitable organic expansion
Sustained & profitable organic expansion Transformation Balance Sheet ROE Continuous optimization of Ongoing transformation Group of the Group and its subsidiaries, the 23.3%, +236bps y/y Balance Sheet with important focus on bineo and Banorte Bank the JV with Rappi 31.5%, +440bps y/y NIM Expenses C
Slide 14: Net Interest and Non-Interest Income growing
Net Interest and Non-Interest Income growing ◼ NII (8%) q/q (annuities effect compensated in NII non-interest income), +12% y/y Million 40,000 pesos 34,777 ◼ NII Loans/Deposits +4% q/q 35,000 31,938 30,000 28,523 ◼ Non-Interest Income: 25,000 Annuities’ Annuities’ effect ▪ Sequential net fees +3%, +
Slide 15: Sound evolution of core banking ratios
Sound evolution of core banking ratios NIM of Banorte Bank ◼ NIM of Banorte Bank 6.4% on strong loan growth at 7.0% the end of the quarter 6.4% 6.3% 6.4% 6.5% ◼ NII +3% q/q, +9% y/y; 1H24 +9% y/y 6.0% ◼ Net fees +3% q/q, +16% y/y; 1H24 +14% y/y 5.5% 5.0% 4.5% 4.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2022
Slide 16: 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 1,1671,205 13% 1200 1,127 1,156 1,064 11.2% ◼ Organic growth of fi
Slide 17: Ongoing profitability at Banorte Bank
Ongoing profitability at Banorte Bank Net Income of Banorte Bank 13% ◼ Banorte’s Net Income +12% q/q, +13% y/y; y/y 1H24 +7% y/y Million pesos 11,715 11,000 10,364 10,474 ◼ ROE at 31.5%, +539bps q/q, +440bps y/y; 9,000 1H24 28.7%, +158bps annual expansion 7,000 ◼ ROA at 2.6%, +24bps q/q, +7bps y/y;
Slide 18: Managerial NIM
Managerial NIM 7.0% ◼ NIM of the Group up to 5.7% ◼ Managerial NIM or 6.5% NIM ex-Insur&Annuities 5.8% +9bps q/q 6.3% ▪ IFRS adoption in 2022 has added volatility to the annuities and insurance contributions to 5.9% 5.9% 6.0% the margin 5.8% ▪ The exclusion of annuities and insurance 5.7% 5.7% provi
Slide 19: Cost of Funds
Cost of Funds Cost of Funds vs CETES Reference Rate ◼ Cost of fund control; improving mix 55% ◼ Non-interest-bearing demand deposits +1 q/q, +9% y/y ◼ Time deposits +5% q/q, +26% y/y 50% 47.8% 45% Change 2Q24 (Million Pesos) q/q y/y Non-Interest-Bearing Demand Deposits 418,480 1% 9% Interest Bearing
Slide 20: Resilient asset quality
Resilient asset quality ◼ Credit provisions down (0.3%) q/q, +20% y/y driven Credit Provisions Million pesos by credit volume & mix, and the incorporation of 4,868 4,854 5,000 Tarjetas del Futuro; ex-TDF up +11% y/y Credit Provisions 4,038 4,000 ex-TDF 4,536 4,494 ◼ Cost of risk to 1.8%; 1.6% ex-TDF
Slide 21: Expenses, control & paving the road for the future
Expenses, control & paving the road for the future ◼ Revenues affected by insurance premiums 1Q seasonality Non-Interest Expenses ◼ Expenses +1 q/q, +13% y/y; ex-bineo & TDF +8% y/y Million pesos 14,000 12,591 12,741 11,281 ◼ Shared services initiative already in full implementation 12,000 10,000 ◼
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) ◼ CET1 still above management's optimal range, even after Basel III full dividend distribution ◼ Unlevered Capital 21.7% 22.2% ◼ Liquidity exceeds minimum regulatory re
Slide 23: Appendix
) SP ecNGRTE Appendix
Slide 24: New ratio methodology – CNBV requirements
New ratio methodology – CNBV requirements ◼ Methodology changes in compliance with CNBV requirements. Ratios for 2023 and 2024 were recalculated accordingly. ◼ Articles 180 and 182 of the CUB1 were amended and Annex 34 "Financial Ratios" was repealed. New indication: “…must present financial ratios
Slide 25: 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, Efficiency 36.0% – 37.0% ✓ bineo and JV Rappi (no material impact in Net Income) Cost of Risk 1.8% –
Slide 26: Selected industry exposures
Selected industry exposures Vs. Total Loans 2Q24 Oil Industry* 3.6% Electricity Companies* 2.7% Construction & Real Estate Housing 1.3% Commercial 0.9% Vs. Total Loans Others 1.3% SMEs Malls 1.5% • 70% Nafin / Bancomext guaranteed 5.0% loans, 44% of SME book Tourism 5.0% Dollar denominated 13.1% Res
Slide 27: Digital strategy progress
Digital strategy progress 2018-2019 2020 1-2-3 Plan We are Strategic Multi- Already a digital bank here! Digital Release reflection: channel with branches, mobile of missing Bank banking, bank in minutes, products NPS (App: 83.9) Rappi JV 2020 Dec’23 Rapid Growth Control Market Fit & Value propositi
Slide 28: 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 29: Sustainable business
Sustainable business Social and Environmental Risk Management System Responsible Investment *FN-AC-410a.1 150,000 +8% 150,000 140,000 140,000 130,000 YoY 130,000 120,000 AFORE XXI Banorte 120,000 2.62% Non-sustainable During 2Q24: 110,000 110,000 analyzed portfolio 1,032 analyzed loans 100,000 100,0
Slide 30: Earnings Call 2Q24
Earnings Call 2Q24 April 17th, 2024
Grupo Fin Banorte Ord — Q2 2024 Earnings Presentation on 6ix