Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O
Grupo Financiero Banorte Sab De Cv Class O — Grupo Fin Banorte Ord — Q4 2024 Earnings Presentation
30 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, Jan 29, 2025
Slide 1: Earnings Call 4Q24
Earnings Call 4Q24 January 29th, 2025
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 4Q24 +18% y/y 2024 +20% y/y +5% q/q, +14% y/y; retail +11%, commercial +18%, NIM corporate +24%, and government loans +7% y/y 4Q24 Group 6.5% RESULTS Asset Quality +5bps y/y Net Income Ps 13.7 bn, NPLs 0.9% Banorte Bank 6.8% (6bps) q/q +19bps y/
Slide 4: Sound profitability
Sound profitability Net Income 5% ◼ Net Income for the quarter (4%) q/q and +5% y/y; Million y/y 2024 +7% y/y 16,000 pesos 14,238 ◼ Good profitability levels: 14,000 13,044 13,724 ▪ ROE at 21.6%, +20bps y/y; 12,000 2024 22.4%, +117bps y/y ▪ ROA at 2.2%, (5bps) y/y; 10,000 2024 2.3%, (4bps) y/y 8,000
Slide 5: Subsidiaries' Net Income and ROE
Subsidiaries’ Net Income and ROE ◼ Sound business diversification: Net Income by Subsidiary ▪ Banorte Bank +6% y/y; 2024 +7% y/y, ROE +29.1% 2024 ▪ Broker dealer & mutual funds 2024 +28% y/y ▪ Insurance 2024 +26% y/y Afore Holding ▪ Annuities 2024 +14% y/y 2.3% 2.5% Annuities ▪ Afore 2024 +8% y/y 5.
Slide 6: Expanding loan book growth with stable asset quality
Expanding loan book growth with stable asset quality ◼ Emphasis on our analytical ability to select customers Performing Loans (stages 1 & 2) Billion 1,180 ◼ Portfolio stages 1 & 2 growing +4.8% sequentially and +14.3% 1,200 pesos 1,150 1,125 y/y 1,100 1,032 ◼ Annual expansion in all portfolios: 1,0
Slide 7: Expanding loan book growth with stable asset quality
Expanding loan book growth with stable asset quality ◼ Emphasis on our analytical ability to select customers Mortgage Auto ◼ Expansion in the consumer portfolio +11.3% y/y Billion 280 pesos 267 273 55 50 53 270 ◼ Annual growth across all consumer products: 260 253 50 43 250 45 ▪ Mortgage +7.7% 240
Slide 8: Healthy loan portfolio
Healthy loan portfolio NPL Ratio ◼ Consistent sound asset quality, NPL 0.9% 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% 0.93% 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 18% ◼ Net fees +18% y/y; 2024 +20% y/y, doble-digit growth y/y across banking, brokerage house & mutual funds. Million 5,500 pesos 5,302 5,273 ◼ Core banking fees +15% y/y; 2024 +15% y/y 5,000 4,465 ◼ POS transactions +21% y/y; +42% y/y in mobile monetary 4,50
Slide 10: Sustainability Updates
Sustainability Updates Sustainable Bond: 70% of proceeds allocated 40 Financial Education Workshops Operadora de Fondo’s PRI rating Green auto loans “Autoestrene Verde” to mobility, affordable housing, hybrid / electric delivered to +3,200 payroll clients, rose +24 points for its ESG ended 2024 with
Slide 11: Financial Highlights
Financial Highlights BANORTE
Slide 12: Sustained & profitable organic expansion
Sustained & profitable organic expansion Transformation Balance Sheet ROE Continuous optimization of the Group Continuous investment Balance Sheet 4Q24 21.6%, +20bps y/y to enhance digital offerings Banorte Bank 4Q24 27.8%, +48bps y/y NIM Expenses Capital Group CAR 21.8% 4Q24 6.5%, +5bps y/y Efficie
Slide 13: Growing Net Interest and Non-Interest Income
Growing Net Interest and Non-Interest Income ◼ NII +8% y/y, 2024 +9% y/y NII Million 40,000 ◼ NII Loans/Deposits +13% y/y, 2024 +7% y/y pesos 36,008 36,637 34,039 ◼ Non-Interest Income, 2024 +28% y/y: 35,000 ▪ Net fees +18% y/y, 2024 +20% y/y 30,000 ▪ Premium income 2024 +15% y/y, ▪ Claims 2024 +15%
Slide 14: Sound evolution of core banking ratios
Sound evolution of core banking ratios NIM of Banorte Bank ◼ NIM of Banorte Bank 4Q24 at 6.8%, record high 7.0% 6.6% 6.7% 6.8% ◼ NII +5% q/q, +10% y/y; 2024 +9% y/y 6.5% ◼ Net fees +6% q/q, +22% y/y; 2024 +19% y/y 6.0% 5.5% 5.0% 4.5% 4.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2022 2023 2024 6.5% 4bps
Slide 15: Net Interest Income sensitivity evolution
Net Interest Income sensitivity evolution Bank's NII Sensitivity per 100bps change in rate - ◼ Dynamic risk management hedging Local Currency Balance Sheet Million pesos ◼ Focus on stable low-cost liabilities 1,222 1250 1,127 11.5% ◼ Active ALCO 979 11.1% 1000 ◼ Organic growth of fixed rate portfoli
Slide 16: Ongoing profitability at Banorte Bank
Ongoing profitability at Banorte Bank Net Income of Banorte Bank 6% ◼ Banorte’s Net Income +6% y/y; 2024 +7% y/y y/y Million pesos 11,770 10,894 ◼ ROE at 27.8%; 2024 29.1%, +146bps annual expansion 11,000 10,253 9,000 ◼ ROA at 2.4%; 2024 2.5%, (3bps) y/y 7,000 5,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Slide 17: Managerial NIM
Managerial NIM 7.0% ◼ NIM of the Group at 6.5% 6.6% ◼ Managerial NIM or 6.5% 6.5% NIM ex-Insur&Annuities 6.2%; 6.5% 6.4% 2024 6.0%, +1bp y/y 6.2% 6.2% ▪ IFRS adoption in 2022 has added volatility to the annuities and insurance contributions to 6.0% the margin 6.0% 6.0% ▪ The exclusion of annuities a
Slide 18: Cost of Funds
Cost of Funds Cost of Funds vs CETES ◼ Core deposits grew +10% y/y, with an average daily Reference Rate growth of +14% y/y 55% ◼ Improving mix and better cost of funds: ▪ Non-interest-bearing demand deposits +11% q/q, +8% y/y ▪ Interest-bearing demand deposits (6%) q/q, 50% +7% y/y ▪ Time deposits
Slide 19: Resilient asset quality
Resilient asset quality ◼ Credit provisions +12% q/q; 2024 +23% y/y, driven by Credit Provisions 5,193 credit volume & mix, and the incorporation of Tarjetas Million 5,000 Credit Provisions 4,621 pesos del Futuro (TDF), ex-TDF +14% y/y ex-TDF 4,791 4,000 3,591 ◼ Cost of risk 4Q24 at 1.8%, 1.6% ex-TD
Slide 20: Optimizing expenses & paving the road for the future
Optimizing expenses & paving the road for the future ◼ Revenues +4% q/q, 2024 +10% y/y Non-Interest Expenses 16,263 Million ◼ Expenses +25% q/q, 2024 +12% y/y pesos 15,000 14,615 13,031 ▪ Slightly below guidance 12,500 ▪ Shared services initiative under implementation 10,000 ◼ Cost to income 2024 at
Slide 21: 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 extraordinary dividend payment Basel III ◼ CET1 converging towards management's optimal range ◼ Unlevered Capital 21.8% 20.7% 21.3% ◼ Liquidity exceeds
Slide 22: Sustained capital return
Sustained capital return • GFNorte has rewarded its investors by generating and distributing capital through dividends and buybacks. Payout ratio – last 3 years breakdown Buyback Program • 68% of funds are still available for use. 89% $32,344 M Authorized Buyback funds 83% 20% $22,096 M Remaining am
Slide 23: 2024 Guidance
2024 Guidance 2024 2024 Guidance Real Loan Growth 10% – 12% 14% ✓✓ NIM 6.1% – 6.4% 6.3% ✓ NIM of Bank 6.3% – 6.5% 6.5% ✓ Recurring Expense Growth 6.0% - 7.0% 7.4% Total Expense Growth* 13.0% – 14.0%* 12.4% ✓ Efficiency 36.0% – 37.0% 37.0% ✓ Cost of Risk 1.7% - 1.9% 1.8% ✓ Tax Rate 25% – 27% 26% ✓ Ne
Slide 24: 2025 Guidance
2025 Guidance 2025 Guidance Loan Growth 8% – 11% NIM 6.1% – 6.4% NIM of Bank 6.4% – 6.6% Recurring Expense Growth 6.0% - 7.0% Total Expense Growth* 9.0% – 10.5% Efficiency 36.0% – 37.5% Cost of Risk 1.8% - 2.0% Tax Rate 26% – 28% Net Income 59.6 – 62.1 bn ROE 21.5% – 23.0% ROE of the Bank 28.0% – 30
Slide 25: Appendix
Appendix GRUPO FINANCIERO 25 BANORTE
Slide 26: Selected industry exposures
Selected industry exposures Vs. Total Loans 4Q24 Oil Industry* 3.1% Electricity Companies* 2.6% Construction & Real Estate Housing 1.4% Commercial 0.8% Vs. Total Loans Others 1.3% SMEs Malls 1.3% • 78% Nafin / Bancomext guaranteed 4.9% loans, 47% of SME book Tourism 5.9% Dollar denominated 16.1% Res
Slide 27: Historical expenses by category
Historical expenses by category Expenses / Net Income Historical growth by category 70% 3.5x 3.4 IT Net Income 60% 3.0x Human Resources 2.9 Administrative & Facilities 50% Operating 46% 2.5x 40% Human Resources IT Operating 30% Administrative & Facilities 2.0x 25% 1.9 20% 1.5x 1.5 10% 10% 1.4 6% 0%
Slide 28: Sustainable business
Sustainable business Social and Environmental Risk Management System Responsible Investment *FN-AC-410a.1 AFORE XXI Banorte 180,000 150,000 9.45% Non-sustainable analyzed In 4Q24: 140,000 During 4Q24: 160,000 130,000 portfolio 863 Analyzed loans Assets with ESG criteria 3% 120,000 1.95% Sustainable
Slide 29: A Customer-centric bank in minutes
A Customer-centric bank in minutes 81 80 92 84 NPS 93 85 82 New claim Mobile payroll loan Digital advanced payroll 80 Portability Opening account in movil Opening a new account 4 min 3 min 3 min Tablet branches Time to Market Mobile account on Tablet 3 min 9 min opening ATM Withdrawal 5 min 12 min 0
Slide 30: Earnings Call 4Q24
Earnings Call 4Q24 January 29th, 2025
Grupo Fin Banorte Ord — Q4 2024 Earnings Presentation on 6ix