Banorte keeps outlook after Q1 provision jump, sees loan growth improving later in 2026

About this update from Grupo Financiero Banorte Sab De Cv Class O

By Kylie MadryMexican lender Banorte said on Wednesday it was maintaining its 2026 guidance after it recorded a first-quarter jump in provisions a day earlier, predicting better loan growth later this year as visibility improves on trade talks and domestic infrastructure spending.Executives told analysts on the bank's earnings call the increase in provisions did not reflect broader deterioration in credit quality, but was mainly driven by a recalibration of internal risk models, growth in retail lending and an additional charge linked to a previously identified corporate exposure.Banorte on Tuesday reported first-quarter net income rose 1% from a year earlier to 15.5 billion pesos, while its bank unit posted profit of 11.7 billion pesos, up 6% year-on-year.Analysts questioned the rise in the bank's cost of risk to about 2.2%, above the higher end of its full-year guidance range of 1.8% to 2.1%. Management said the quarterly increase was already contemplated in its outlook and should normalize in coming quarters.Overall lending grew 6% from a year earlier in the first quarter, or 8% excluding government loans, below Banorte's full-year guidance of 8% to 11%. Executives said growth should accelerate in the second half.Demand in commercial, corporate and government lending has been held back by uncertainty over the U.S.-Mexico-Canada Agreement review, as well as delays in investment decisions tied to public infrastructure projects, executives said.Banorte is stepping up its use of artificial intelligence across the organization, with a goal of having 10,000 employees in operations and back-office roles using AI tools in their daily work. The bank is also embedding AI in functions such as client personalization, risk analysis and workflow automation.The lender said it plans to launch a new product aimed at younger clients by the end of April, as it looks to compete more aggressively for digitally native and under-banked customers.

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