Grupo Financiero Banorte Sab De Cv Class O · BMV:GFNORTE/O

Grupo Financiero Banorte Sab De Cv Class O — Q4 2022 Earnings Presentation

83 slides from Grupo Financiero Banorte Sab De Cv Class O's earnings presentation, 2023

  1. Slide 1: Corporate Presentation 4Q22

    Corporate Presentation 4Q22 DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 1 Hist NI ROE ICAP Mkt App C/I

  2. Slide 2: About Banorte

    About Banorte DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 2 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I

  3. Slide 3: GFNORTE – A Leading and Profitable Financial Franchise in Mexico

     GFNORTE – A Leading and Profitable Financial Franchise in Mexico 2 1 4 Adequate Sound business mix Fundamentals 3 Digital Strategy Strong retail, wholesale Solid corporate Prepared for and premium banking Solid asset quality, governance the Future platforms, as well as high liquidity, and Independ

  4. Slide 4: From Regional Bank to Second Largest National Financial Group

     From Regional Bank to Second Largest National Financial Group 15%* 1,2,3 Plan 20|20 Plan Client • Banorte’s Segmentation Digital Business Diversification Transformation * Loan book IT : central DB, Market Share Inorganic Growth multichannel • JV Rappi 2.3% Profitability • BINEO – Regional Bank Dig

  5. Slide 5: Strategy – Client centric & Digital Evolution

     Strategy – Client centric & Digital Evolution PRODUCTS & DISTRIBUTION SOLUTIONS CHANNELS > 10M New customer Rappi clients behavior Deposits & Loans Mobile Client Segmentation Insurances ▪ 11.5 million ex-Afore clients Web Rappi JV Digital 8.6 million Afore clients Pensions ATM Consumer focus Bank

  6. Slide 6: Diversified Business Mix

     Diversified Business Mix In progress… BINEO Banco Casa de Operadora Banorte Arrendadora JV with Other Digital Mercantil Bolsa de Fondos Ahorro y y Factor RAPPI Subsidiaries* Bank del Norte Banorte Banorte Previsión Banorte** 50% 100% 98.2618% 99.9999% 99.9987% 99.9999% 99.9009% Looking for fully l

  7. Slide 7: Business Mix - Diversified Net Income and Balance

     Business Mix - Diversified Net Income and Balance Net Income Mix Net Income by Subsidiary 2022 $45.4 bn Other Finance Companies ROE Afore 1% Million pesos 4Q22 q/q y/y 2022 y/y Holding 2022 2% 4% Bank 8,480 (3%) 28% 33,949 32% 24.6% Annuities 6% Bank Broker Dealer & Mutual F. 172 (34%) (45%) 1,649

  8. Slide 8: Net Interest Margin Moving in the Right Direction

     Net Interest Margin Moving in the Right Direction NIM 7.0% 6.7% 6.6% 6.3% 6.5% 6.1% 6.0% 5.6% 5.5% 5.6% 5.4% 5.5% 5.3% 4.9% 5.0% 4.7% 4.4% 4.5% 4.5% 4.8% 4.9% 4.1% 4.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Previous criteria IFRS NIM (Post-Provision) 6.5%

  9. Slide 9: Margin Sensitivity Evolution

     Margin Sensitivity Evolution ● Dynamic risk management hedges. Focus on stable low-cost liabilities. Active ALCO. Organic growth of floating rate portfolio. NII Sensitivity per 100 bps in rate change Foreign Currency Balance Sheet Local Currency Balance Sheet Million pesos Million pesos 1,205 1,22

  10. Slide 10: Core Banking Fees keep growing

     Core Banking Fees keep growing +10% ● Net Fees +7% q/q, +10% full year, driven by: Net Fees 2022 y/y ● Core banking fees +8% q/q, and +19% full year; Million 5,000pesos 4,504 Previous criteria IFRS 4,277 4,216 ▪ Electronic banking services +26% full year. 4,000 ● Digital transactions leading annua

  11. Slide 11: Efficiency Temporarily Affected by COVID-19

     Efficiency Temporarily Affected by COVID-19 Cost to Income 57.0% 54.0% Previous Criteria IFRS 52.0% 52.0% 49.6% 48.5% 47.9% Recurring 44.9% 40.0% 39.7% 45.4% 47.0% 42.8% 41.4% 46.9% 41.4% 42.0% 39.0% 39.1% 42.7% 36.4% 37.0% 38.0% 32.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 4Q21 1Q

  12. Slide 12: Net Income growing

     Net Income growing Net Income Million Pesos CAGR +30% +15% YoY 2012-2022 45,408 +28% 47,000 YoY 12,000 11,524 11,544 11,592 42,000 36,528 10,748 37,000 11,000 31,958 35,583 +0.4% 35,345 35,048 10,000 QoQ 32,000 9,061 Recurring 30,508 27,000 9,000 23,908 22,000 19,308 8,000 17,108 17,000 15,228 7,0

  13. Slide 13: Pre-pandemic - Constant Positive Growth in Profitability

     Pre-pandemic - Constant Positive Growth in Profitability ROA 2.5% 2.30% 2.26% 2.27% 2.26% 2.18% 2.05% 1.94% 1.99% 2.0% 1.86% 1.60% 1.90% 1.46% 1.47% 1.76% 1.85% 1.5% 1.40% 1.30% Previous Criteria Recurring IFRS 1.0% 2012 2013 2014 2015 2016 2017 2018* 2019* 2020* 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22

  14. Slide 14: Transformation

    Transformation 1. Digital Transformation at Core Bank 2. Rappi JV 3. Digital Bank DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 14 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I

  15. Slide 15: Digital Transformation Gaining Share

     Digital Transformation Gaining Share Transactions (Tx) Transactions 4Q22 (millions) Branches 800.0 2.2% WEB 700.0 12% 600.0 POS 24% 500.0 400.0 +50% Correspondents 0% 300.0 4Q y/y Call Center 1% 12% 200.0 49% Mobile 100.0 ATM 0.0 Digital Deposit Account Customers Using Digital (millions) Mobile Cr

  16. Slide 16: 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, based on improvements from internal customers: Banorte Móvil WEB App o processes / services / systems o products o branch-administration, contingency, others +2.1 pts 83.0 +6.6 pts 83.3 vs 4Q21 vs 4Q21

  17. Slide 17: Leaders in the Business & Infrastructure for the New Payments Market

     Leaders in the Business & Infrastructure for the New Payments Market Rappi JV – Credit Cards and Credits to affiliates POS Transactions +19% Millions 4Q y/y The best DIGITAL PLATFORM for aggregators 350 Digital 300 Physical 187 250 190 176 200 155 150 100 177 168 131 CoDi 50 87 0 3Q22 1Q20 2Q20 3Q

  18. Slide 18: Ongoing RappiCard evolution

     Ongoing RappiCard evolution RappiCard: keeps growing in cards and billing 778k 740k 60% Issued Cards with at Of cardholders cards least one with a credit line purchase above Ps 5,000 2,033M1 70% 77% Average Monthly active Of users under monthly billing users 36 years old Source: JV Banorte Rappi,

  19. Slide 19: Loans & Deposits

    Loans & Deposits DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 19 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I

  20. Slide 20: Healthy Funding & Loan Portfolio Structure

     Healthy Funding & Loan Portfolio Structure Bank Deposits 2018 $759 bn 4Q22 $919 bn US 47.2 bn Senior Unsec. Debt Senior Unsec. Debt Money Market Money Market Time Demand Time Demand Loan Portfolio $777 bn $920 bn US 47.2 bn Consumer Consumer Government Government Mortgage Mortgage Commercial Comme

  21. Slide 21: Loyal Deposits’ Base

     Loyal Deposits’ Base Deposits CAGR 2011-2022: Billion Pesos +10% YoY 900 840 834 818 840 +12% 796 Time Demand Core Deposits 751 750 750 800 667 700 637 623 616 623 YoY 590 +11% 584 600 600 551 533 538 538 +16% 509 500 436 438 384 397 414 384 400 336 351 306 300 255 YoY 300 211 223 229 217 211 217

  22. Slide 22: Continued Growth in Performing Loan Book, Special Focus on Consumer

     Continued Growth in Performing Loan Book, Special Focus on Consumer Loan Portfolio Billion Pesos YoY 1,000 920 920 +12% 861 876 900 821 821 835 777 802 763 800 700 616 567 CAGR: 600 518 +9% 472 500 401 425 400 300 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21

  23. Slide 23: Rate comparison

     Rate comparison Reference Rate vs Consumer Yield Reference Rate vs Loan Portfolio’s Yield 30.0% 20.0% 14.0% 34.0% 28.4% 12.4% 28.9% 12.0% 32.0% 10.9% 27.0% 9.7% 9.8% 25.0% 15.0% 9.5% 30.0% 26.0% 10.0% 8.0% 7.2% 7.4% 9.25% 28.0% 9.6% 9.1% 20.0% 9.1% 10.0% 5.8% 5.7% 6.0% 26.0% 9.25% 4.0% 25.3% 24.0%

  24. Slide 24: Sound Asset Quality

     Sound Asset Quality NPL Ratio 3.1% 2.9% 3.0% Previous Criteria IFRS 2.5% 2.2% 2.1% 2.0% 2.0% 1.8% 1.7% 1.7% 1.5% 1.1% 1.0% 1.0% 1.0% 0.9% 1.1% 0.9% 1.0% 1.0% 1.0% 1.1% 0.5% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Previous Criteria IFRS | 2018 2019 2020 2021

  25. Slide 25: Sound Asset Quality

     Sound Asset Quality Coverage Ratio 250% 224% 207% 207% 202% 193% 188% 200% 179% 179% 138% 191% 191% 150% 139% 129% 142% 138% 105% 107% 116% 100% 50% Previous Criteria IFRS 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Cost of Risk 3.0% 2.8% 2.5% 2.5% 2.0% 2.0%

  26. Slide 26: Strong Capital Position

     Strong Capital Position Capital Adequacy Ratio Basel III 25.8% 24.7% 22.9% 23.0% 22.9% 0.4% Tier 2 20.2% TLAC 18.6% to 2025 17.2% 17.2% 17.90% Total 15.3% 15.3% Tier 1 14.6% 22.5% 13.025% +1.625% TLAC 4Q22 11.40% 9.40% 15.3% 16.3% 14.7% 15.1% CET1 7.90% 13.9% 13.7% 12.7% 12.4% 12.1% 11.9% 12.7% 12

  27. Slide 27: BAP: Long Term Savings Business

     BAP: Long Term Savings Business Million Pesos 4Q22 2022 YoY 4Q22 2022 YoY Considering Banorte Futuro Insurance Net Income 1,000 3,899 93% 1,375 4,781 19% Equity 7,755 7,755 32% 23,280 23,280 4% Assets 51,366 51,366 10% 66,537 66,537 6% Premiums 5,755 28,914 4% 5,755 28,914 4% ROE 51.8% 53.8% 31.2

  28. Slide 28: Insurance Business Steadily Improving

     Insurance Insurance business Business steadily Steadily improving Improving Retained Insurance Technical Reserves Premiums ● Operating Income increased +20% sequentially and Million pesos 6,000 12,000 +95% full year. 4,000 ● Claims +5% q/q, normalization continues for COVID- 1,062 related claims (

  29. Slide 29: 2022 Guidance achieved and surpassed

     2022 Guidance achieved and surpassed Guidance Actual Loan Growth 7% – 9% 12% NIM expansion 85 – 100 bps 90 bps NIM of Bank expansion 100 – 115 bps 110 bps 5.3% recurring Expense Growth 7.9% – 8.4% 9.1% total Efficiency 37.5% – 38.5% 38.0% Cost of Risk 1.3% – 1.5% 1.4% Tax Rate 25% – 26% 26.2% Net

  30. Slide 30: 2023 Guidance

    2023 Guidance 2023 Guidance Loan Growth 6% – 8% NIM 6.5% – 6.8% NIM of Bank 6.7% – 7.0% Recurring Expense Growth 7.0% - 8.0% * Includes BINEO 2% Total Expense Growth* 11.0% – 13.0% Efficiency 36.0% – 38.0% Cost of Risk 1.6% – 1.8% Tax Rate 24% – 26% Net Income 50.5 – 52.5 bn ROE 2023 19.5% – 21.0% R

  31. Slide 31: Market Presence

    Market Presence DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 31 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I

  32. Slide 32: Deposit & Loan Market Share

     Deposit & Loan Market Share Deposits Loans 2nd 3rd Source: CNBV November 2022 DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 32 Hist NI ROE ICAP Mkt App C/I

  33. Slide 33: Market Share by Segment

     Market Share by Segment Auto Payroll C. Card Mortgage Comm + Corp Government Deposits Nov-21 Nov-22 Nov-21 Nov-22 Nov-21 Nov-22 Nov-21 Nov-22 Nov-21 Nov-22 Nov-21 Nov-22 Nov-21 Nov-22 Banorte 19.3% 20.1% 20.2% 20.8% 10.4% 10.0% 19.0% 19.0% 11.8% 11.3% 27.0% 26.4% 12.7% 12.9% BBVA 31.6% 29.8% 38.3%

  34. Slide 34: Market Share by Segment

     Market Share by Segment Total Loan Book Commercial & Corporate Mortgage 19.5% 19.5% 14.8% 14.9% 15.0% 19.2% 19.0% 19.0% 14.5% 11.6% 11.8% 11.3% 10.9% (54bp) 13.7% 9.8% +2bp (45bp) Nov-18 Nov-19 Nov-20 Nov-21 Nov-22 Nov-18 Nov-19 Nov-20 Nov-21 Nov-22 Nov-18 Nov-19 Nov-20 Nov-21 Nov-22 Credit Card A

  35. Slide 35: Afore Market Share (Retirement Savings)

     Afore Market Share (Retirement Savings) Assets Under Management AUM Market Share Billion Pesos Dec-21 Dec-22 Dec-21 Dec-22 XXI Banorte 1,094 1,056 20.9% 20.2% 1° Profuturo GNP 853 894 16.3% 17.1% CitiBanamex 848 816 16.2% 15.6% SURA 789 812 15.0% 15.5% Coppel 380 385 7.2% 7.4% PensionISSSTE 352 34

  36. Slide 36: Insurance Market Share

     Insurance Market Share Premiums Market Share Net Income Market Share Million Pesos Sep-21 Sep-22 Sep-21 Sep-22 Sep-21 Sep-22 Sep-21 Sep-22 G.N.P. 56,953 64,174 12.9% 13.3% 2,106 2,149 9.6% 6.2% Metlife México 48,678 54,215 11.1% 11.3% 1,794 5,733 8.2% 16.6% BBVA 38,113 44,607 8.7% 9.3% 3,023 4,763

  37. Slide 37: Annuities Market Share

     Annuities Market Share Resolutions * Market Share Million Pesos Dic-21 Dic-22 Dic-21 Dic-22 Banorte 22,218 18,332 47.8% 46.2% 1° Bancomer 9,477 11,520 20.4% 29.1% Profuturo GNP 14,791 9,791 31.8% 24.7% Total Industry 46,487 39,643 100.0% 100.0% Annuitants Market Share Dic-21 Dic-22 Dic-21 Dic-22 B

  38. Slide 38: GFNorte in the World

     GFNorte in the World Market Capitalization Million Pesos US 19.5 bn 450,000 4Q22 Total Shares Outstanding: 2,883.5 m 403,424 400,000 383,529 Float: ~ 86% 371,995 Total ADRs(1) Outstanding: 7.16 m 350,000 Ticket Indexes 300,000 IPC (BMV) Sustainable IPC (BMV) Oil and GFNORTE O (BMV) 250,000 MSCI Me

  39. Slide 39: Analysts’ Opinion & Investment Grade by All Major Rating Agencies

     Analysts’ Opinion & Investment Grade by All Major Rating Agencies Analysts’ Estimates Ratings Agencies (as of January 25, 2023) Agency Rating Outlook Date Net Income 2023 $51,946 Target Price $173.14 Standard & Poor’s BBB Stable Jul-22 Maximum $197.0 Number of Analysts 22 Fitch BBB- Stable Dec-22

  40. Slide 40: ESG

    ESG DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 40 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I

  41. Slide 41: MSCI ESG Upgraded to AA

     Sustainability Strategy MSCI ESG Latest Ratings Action: Upgraded to AA from 'A’ Best SME Bank Award 2023 Global Finance DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 41 Hist NI ROE ICAP Mkt App C/I

  42. Slide 42: 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 SOCIAL GOVERNANCE CDP Climate Change Participation at the 2022 National Banorte was recognized as Bank of Afore XXI Banorte obtained 2nd questionnaire, score B Financial Education Week the Year 2022 in Mexico

  43. Slide 43: Sustainable Finance

     Sustainable Finance Loan book evaluation Responsible Investments – Mutual Funds % of wholesale banking loan book % of total analyzed AUM by instrument Asset Class 15.0 Fund´s Portfolio 11.896 Equity 72 12.5 0.169 10.0 0.131 Fixed Income 98 7.0 6.483 22 7.5 5.0 0.650 Money Market 94 0.001 0.… 5.0 7

  44. Slide 44: Integrated Annual Report 2021

     Integrated Annual Report 2021 Updates • To analyze ESG data performance, we follow best practices established by GRI, SASB and CDP questionnaire on climate change aspects. • We release our first report on Climate-related risks and opportunities in accordance with the recommendations of the Task Fo

  45. Slide 45: Appendix

    Appendix DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM TI TI LL DD Loan Loan BAP BAP Guid Guid Eco Eco 45 Hist Hist NI NI ROE ROE ICAP ICAP Mkt Mkt App App C/I C/I

  46. Slide 46: Quarterly Summary

     Quarterly Summary GFNorte-Consolidated Statement of Comprehensive Change Change Income Highlights 4Q21 3Q22 4Q22 2021 2022 (Million Pesos) 3Q22 4Q21 2021 Interest Income * 53,743 72,244 80,773 12% 50% 195,788 268,628 37% Interest Expense 27,252 41,550 49,548 19% 82% 101,882 152,469 50% Net Interes

  47. Slide 47: Quarterly Summary

     Quarterly Summary Financial Ratios GFNorte 4Q21 3Q22 4Q22 2021 2022 NIM (1) 6.1% 6.7% 6.6% 5.4% 6.3% ROE (2) 15.5% 19.6% 19.4% 15.3% 19.2% ROA (3) 1.9% 2.3% 2.3% 1.8% 2.3% Efficiency Ratio (4) 46.9% 36.4% 41.4% 42.7% 38.0% Operating Efficiency Ratio (5) 2.5% 2.1% 2.6% 2.2% 2.2% CCL Banorte and SOF

  48. Slide 48: Quarterly Summary

     Quarterly Summary Change Change Share Data 4Q21 3Q22 4Q22 2021 2022 3Q22 4Q21 2021 Earnings per share (Pesos) 3.143 4.004 4.020 0% 28% 12.155 15.748 30% Earnings per share Basic (Pesos) 3.145 4.048 4.062 0% 29% 12.254 15.893 30% Dividend per Share for the period (Pesos) 2.65 0.00 5.81 N.A. 120% 5.

  49. Slide 49: Healthy Liquidity

     Healthy Liquidity Loans to Deposits Liquidity Coverage Ratio (%) CCL (%) 110% 230% 108% 202% 210% 106% 190% 104% 103% 103% 102% 170% 160% 100% 100% 150% 155% 98% 130% 96% 110% 94% 90% 92% 90% 70% 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 4Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 4Q 2016 2

  50. Slide 50: Selected industry exposures

    Selected industry exposures Vs. Total Loans 4Q22 Oil Industry* 3.8% Electricity Companies* 4.2% Construction & Real Estate Housing 1.3% Commercial 1.8% SMEs • 78% Nafin / Bancomext guaranteed 4.4% Others 1.2% loans, 47% of SME book Malls 1.8% Dollar denominated 12.9% Tourism 4.9% Restaurants 0.2% Ai

  51. Slide 51: Insurance and Annuities P&L 2022

     Insurance and Annuities P&L 2022 Insurance P&L + Annuities P&L = Insurance & Annuities P&L Premium Technical Premium Revenue Reserves Revenue ∆ ∆ = Technical Non-Interest = Technical Non-Interest Result Income ∆ Result Income Premium = Technical Result Non-Interest Claims Revenue Technical Income

  52. Slide 52: Corporate Responsibility and Sustainability

     Corporate Responsibility and Sustainability Global Initiative Report (GRI Standards) UNEP Finance Initiative International standards on sustainability reporting and disclosure of Initiative that aims to identify, promote and carry out the adoption of best economic, environmental and socialtopics.

  53. Slide 53: Contact Information and Reports

     Contact Information and Reports If you have any information request or comments, please contact Banorte's Investor Relations Department at: Tel: (52) 55 1670 2276 E-mail: investor@banorte.com We recently published the 4Q22 report. During 2022 we have released: 1. Annual Report 2021 to the Banking

  54. Slide 54: Economic and Financial Perspectives

    ➢ Main macro view ➢ Good performance of the Mexican economy in 2022, with headwinds for 2023 Economic and ➢ Possible fallout of a Financial Perspectives recession in the US ➢ Nearshoring and long-term opportunities and challenges ➢ A solid banking sector DB DB Rev Rev Div Div Dep Dep ESG ESG NIM NIM

  55. Slide 55: Forecasts of main economic and financial variables

     Forecasts of main economic and financial variables Forecasts of main macroeconomic and financial variables in Mexico End of period 2020 2021 2022 2023F GDP (% y/y) -8.1 4.8 3.1 1.5 Inflation (% y/y) 3.2 7.4 7.8 4.8 Exchange rate USD/MXN 19.91 20.53 19.50 20.20 Banxico’s reference rate (%) 4.25 5.5

  56. Slide 56: Trends in 2023

     10 global factors to consider in 2023 1 Ukraine war and other geopolitical factors 2 Possible global recession 3 Inflation and monetary policy 4 Supply chain normalization Nearshoring and 5 Pandemic aftermath 6 Commodities performance 7 new trends in international trade 8 Energy transition 9 Digit

  57. Slide 57: We revised our 2023 GDP higher

     We revised our 2023 GDP higher, boosted by additional inertia in 2022 among other factors 2023 GDP: Supply 2023 GDP: Demand % y/y nsa; % q/q sa % y/y nsa; % q/q sa % y/y 1Q23 2Q23 3Q23 4Q23 2023 % y/y 1Q23 2Q23 3Q23 4Q23 2023 GDP 2.8 1.8 0.7 0.7 1.5 GDP 2.8 1.8 0.7 0.7 1.5 Private 2.5 1.5 1.4 1.3

  58. Slide 58: The recovery has been heterogeneous

     The recovery has been heterogeneous, with room still to be made up in certain states and sectors Economic activity level in 3Q22 vs. the most recent peak State activity level in 2Q22 vs. the most recent peak (3Q18) (3Q18) %, using seasonally adjusted figures %, seasonally adjusted figures Corporat

  59. Slide 59: However, Mexico will continue growing at different speeds

     However, Mexico will continue growing at different speeds Economic growth by state % y/y, 2015-2019 average 2015-2019 Average GDP 1.5+ 0 to 1.5 <0 Source: INEGI DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 59 Hist NI ROE ICAP Mkt App C/I

  60. Slide 60: Nowcasting Economic Activity – IGAE (GDP proxy)

     Nowcasting Economic Activity – IGAE (GDP proxy) Nowcasting of Monthly Economic Activity - IGAE % y/y; nsa 30 IGAE Nowcast IGAE Nowcast 20 5.7 5.1 5.1 10 4.7 4.4 3.92 4.1 3.8 3.9 0 2.6 -10 1.8 -20 -30 Mar-18 Oct-19 May-21 Dec-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Source: Banorte DB Rev Div D

  61. Slide 61: Performance of households’ expenditures

     Performance of households’ expenditures Households’ Expenditures – Resilient Sectors Households’ Expenditures – Vulnerable Sectors Debit & Credit Purchases; January 1st, 2020 = 100 Debit & Credit Purchases; January 1st, 2020 = 100 Supermarkets Accomodation and Food Services 250 200 Healthcare Tran

  62. Slide 62: Performance of businesses revenues

     Performance of businesses revenues SMEs’ Revenues – Resilient Sectors SMEs’ Revenues – Vulnerable Sectors POS Billing; January 1st, 2020 = 100 Debit & Credit Purchases; January 1st, 2020 = 100 300 Retail Sales 300 Professional Services Healthcare Manufacturing Recreation, Sports and Cultural 250 2

  63. Slide 63: Inflation will come down slowly, but enough for Banxico to start an easing cycle

     Inflation will come down slowly, but enough for Banxico to start an easing cycle late in the year Inflation forecast Reference rate’s trajectory % y/y fortnightly frequency % 14 12 13 2023 Average: 5.9% 11.00 11 2022: 12 10.50 11 10 2022: 2023: 10 7.8% 9 10.00 9 8.25 8 8 7 7 6 2023: 6 5 4.8% 4 5 3

  64. Slide 64: Carry 2022

     Market volatility, inflation concerns, and actions from central banks have impacted currencies, albeit with idiosyncratic factors still at play 2023 performance vs. USD USD/MXN forecast %, YTD Pesos per dollar RUB 7.7 24.25 CLP 4.4 Forecast MXN 4.3 23.00 BRL 3.5 21.75 IDR 2.7 COP 2.5 20.50 20.20 C

  65. Slide 65: Public finances – Rosy estimates for 2023

     Public finances – Rosy estimates for 2023 MoF: Macroeconomic assumptions and fiscal variables Historical Balance of Public Sector Borrowing Requirements (HBPSBR) % of GDP 2022 2023 60 Actual GEPC Pre-GEPC GDP 2.4 3.0 51.7 50.0 48.9 49.4 49.4 49.4 49.4 49.4 49.4 (% y/y) (Consensus: 3.0) (Consensus:

  66. Slide 66: Increased resources for social programs and priority projects

     Increased resources for social programs and priority projects Priority programs and projects for the federal government $ billion; % of GDP; % y/y in real terms 2023 2022 Program or project % y/y $ billion % of GDP $ billion % of GDP Pension for the elderly 335.5 1.068 238.0 0.846 30.9 Mayan Train

  67. Slide 67: Political highlights in 2023

     Political highlights in 2023 2023’s relevant dates in the political agenda Composition of the Lower House and Senate Lower House, Seats Absolute Election of the new Electoral majority: 251 Qualified Institute President and three 2024 electoral process PVEM majority: 334 electoral advisors by the L

  68. Slide 68: Implications of Lower House elections

     Implications of Lower House elections, in which the President’s party (Morena) and allies have an absolute majority (>50%), but not a qualified one (>66%) With an absolute majority they can approve… …while a qualified majority is required for Obtained with 50% + 1, equivalent to 251 legislators. T

  69. Slide 69: Economic activity could be affected by a recession in US

     Economic activity could be affected by a recession in US GDP growth in US and Mexico Mexico GDP growth estimates* % y/y, 1990 to 2021 % y/y 8 2022 2023 y = 1.2427x - 0.6037 1996 1997 6 R² = 0.4895 1998 Banorte 3.1 1.5 1990 2010 2000 2006 1994 Consensus 3.0 0.9 4 1991 2011 2012 2021 2015 2004 2014

  70. Slide 70: US Economic Influence – Sectors of Mexico

     US Economic Influence – Sectors of Mexico US Economic Influence in the Mexican Economy % of GDP 56% 56% of Mexico’s GDP depends on the US economy. US Dependent Non-US Dependent Source: Banorte DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 70 Hist NI ROE ICAP Mkt App C/I

  71. Slide 71: US Economic Influence – GDP by Mexican States

     US Economic Influence – GDP by Mexican States US Economic Influence Top 7 States with High US Economic Dependency 1.- Veracruz 2.- Zacatecas 3.- Guerrero 4.- Nuevo Leon 5.- Yucatan 6.- Sonora 7.- Estado de Mexico Top 7 States with None US Economic Dependency 1.- Baja California Sur 2.- Chihuahua 3

  72. Slide 72: Mexico's geographical location, benign demographics and natural resources

     Mexico's geographical location, benign demographics and natural resources (among other factors) remain as key drivers for the economy Real GDP growth FDI Population pyramid in 2020 % y/y US$ billion in nominal terms Million people by age bracket 10 6.8 Utility reinvestment and accounts between 85+

  73. Slide 73: Nearshoring impact in Mexico vs. regional peers

     Nearshoring impact in Mexico vs. regional peers Nearshoring: Potential increase in exports ⚫ Mexico has 12 free trade agreements with 46 countries US$ millions, goods trade ⚫ United States, China, Germany, Canada and South Korea are the main destinations for Mexican exports Gains related ⚫ Main Me

  74. Slide 74: Interest in industrial spaces has been increasing since last year

     Interest in industrial spaces has been increasing since last year, especially in the north of the country Nearshoring: industry participation in different markets Mexico’s industrial spaces demand by country due to %, 3Q22 Nearshoring %, 3Q22 ⚫ From 1Q to 3Q22, CBRE identified gross absorption of

  75. Slide 75: Mexico has increased its trade with US

     Mexico has increased its trade with US, who is the second country from which it receives the most imports US: Imports from the main trading partners US$ billion 600 Trump’s presidency COVID-19 China Mexico begins Canada Germany 500 Japan Vietnam 504.9 South Korea Taiwan Ireland India 400 384.6 357

  76. Slide 76: The main destination of Mexican exports is Texas

     The main destination of Mexican exports is Texas, followed by Michigan and California US: Imports from Mexico US$ billion, Average 2017-2021 99.2 Source: Ministry of Economy DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 76 Hist NI ROE ICAP Mkt App 76 C/I

  77. Slide 77: Export centers are concentrated in the north and center of Mexico

     Export centers are concentrated in the north and center of Mexico Mexico: Exports to US US$ billion, Average 2017-2021 39.6 36.1 8.3 69.7 6.8 10.1 Source: Ministry of Economy DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 77 Hist NI ROE ICAP Mkt App 77 C/I

  78. Slide 78: Favorable ruling for Mexico and Canada on rules of origin

     Favorable ruling for Mexico and Canada on rules of origin in the automotive sector in USMCA Vehicles exports to US Recent investment announcements in the auto sector Total exports % ⚫ Tesla with an investment of US$1 billion for an auto parts 30 plant in Nuevo León 24.3 ⚫ GM with the full electric

  79. Slide 79: Banking credit forecast using lagged GDP

     Banking credit forecast using lagged GDP Banking credit Backtest and forecast* $ billons % y/y in real terms 4,700 Adjusted model Forecast Year Observed Original model (dummy 2020) Fitted 2019 4.6 5.5 4,200 Observed 2020 1.1 1.7 3,700 2021 -8.6 -8.8 -8.6 3,200 2022* 1.8 (YTD to Nov) 1.4 1.2 2023*

  80. Slide 80: Banking sector KPI’s

     Banking sector KPI’s Capitalization ratio Non-performing loans ratio % of net capital / credit risk assets % of total loan portfolio 40 10 35 Capitalization ratio Banking sector's average 9 30 Total Consumer 25 22.95 8 Mortgage Firms 20 7 15 18.68 10 6 5 5 0 4 Bank of America Autofin Credit Suisse

  81. Slide 81: Financial access in Mexico

     Financial access in Mexico Key FAS Indicators Outstanding deposits with commercial banks % GDP 30 28.85 2016 2017 2018 2019 2020 Number of ATMs per 100,000 adults 54.59 55.62 58.82 61.54 62.13 25 Number of commercial bank branches per 14.02 14.03 13.86 13.73 12.79 20 100,000 adults 2012 2013 2014

  82. Slide 82: State economic activity and Banorte’s regional reach

     State economic activity and Banorte’s regional reach Heat Map: Contribution to Economic Growth Branch Network per Federal Entity % GDP, contribution points # of branches Source: Análisis Económico Banorte DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 82 Hist NI ROE ICAP Mkt App C/I

  83. Slide 83: State economic activity and regional income

     State economic activity and regional income Heat Map: Contribution to Economic Growth Average Net Income per Federal Entity % GDP, contribution points Source: Análisis Económico Banorte DB Rev Div Dep ESG NIM TI LD Loan BAP Guid Eco 83 Hist NI ROE ICAP Mkt App C/I

Grupo Financiero Banorte — Q4 2022 Earnings Presentation on 6ix