1 Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 1Q20/media/Files/B/Ba...1 Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 1Q20. 2 Us Mkt TI NIM Rev C / I NI ROE L/D Dep

1 NIM Rev C / I NI ROETI L/D Dep Loan ICAPMkt AppUs 1Q20

2 NIM Rev C / I NI ROETI L/D Dep Loan ICAPMkt AppUs

A Leading Bank in Mexico Globally Recognized

Balanced business mixStrong retail, wholesale

and premium banking platforms.

Sound FundamentalsSolid asset quality,

increasing profitability, high liquidity

and strong capitalization ratios.

Investment grade ratingsS&P, Fitch,

Moody's and HR Ratings.

https://www.latinfinance.com/awards/banks-of-the-year-awards/2019


Nation Wide Operation

1,178Branches

9,090ATM´s

166,225 POS´s

13,694 Correspondents


From Regional to Leading and Innovative Bank

20 | 20

Establishment

1899 1982-2092 1995 2000 2010 2018

Privatization

IXEAfin BancentroBanpaísBancrecer

…

Inorganic Growth

Regional Bank

Business Diversification

& Consolidation

Client

Segmentation

IT : central DB,

multichannel

Profitability

Nationalization

G.F. Interacciones


Loans

Feb 2020

Deposits

2°

Deposit & Loan Market Share

Source: CNBV.

3°


Consumer C. Cards Mortgage Commercial Government Deposits

Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20

Banorte 12.2% 12.1% 9.7% 9.9% 19.5% 19.2% 10.8% 10.3% 34.3% 29.9% 14.7% 13.6%

BBVA 28.0% 29.4% 27.5% 27.4% 25.9% 26.0% 18.9% 19.6% 24.1% 26.6% 21.6% 22.1%

CitiBanamex 15.2% 13.1% 27.2% 26.7% 10.1% 9.4% 12.6% 12.1% 5.9% 5.8% 14.7% 14.5%

Santander 8.7% 8.8% 14.1% 14.2% 16.9% 16.5% 13.3% 13.2% 12.0% 12.7% 13.6% 13.0%

HSBC 6.3% 6.6% 5.6% 5.7% 6.1% 7.2% 8.7% 7.9% 6.3% 5.9% 8.1% 8.2%

ScotiaBank 5.2% 5.2% 2.7% 2.8% 15.0% 15.2% 7.1% 7.5% 1.7% 2.4% 6.3% 6.5%

Inbursa 4.8% 4.1% 4.1% 4.1% 0.7% 0.6% 0.0% 0.0% 4.1% 5.8% 3.2% 3.1%

Others 19.6% 20.6% 9.0% 9.2% 5.9% 6.0% 28.7% 29.3% 11.6% 11.0% 17.8% 19.0%

Market Position 3° 4° 2° 4° 1° 3°

Loan Portfolios Market Share

Source: CNBV.


20/20

Transformation to Digital Bank Centered on the Client

PRODUCTS &

SOLUTIONS

Deposits & Loans

Insurances

Pension

Annuities

Wealth Mngt.

…

DISTRIBUTION

CHANNELS

Mobile

Internet

ATM

Contact Center

Branches

…

PROCESSES

Account opening - Credit Analisis

Next Best Offer – Next Best Action

Client Segmentation

▪ 12 million clients

▪ Structured Info & Learning

(Central DB & Watson)

▪ Behavior understanding

Analitics

Cost

Revenues

Digital Bank

20

15


Digital Transformation Gaining Share

Transactions GrowthTransactions (Tx) Customers Using Digital (millions)

41.4

80.5

232.1

0

50

100

150

200

250

1Q2017

3Q 1Q2018

3Q 1Q2019

3Q 1Q2020

+113%

24%

28%22%

2%

1%

19%

4%WEB

MobileATM

Call Center

Correspondents <

POS

Branches

3.50

3.904.12 4.21 4.28

1Q19 2Q19 3Q19 4Q19 1Q20

*

Time Deposits

Mutual Funds

Credit Card

Insurance

Digital Deposit Account

Payroll loans

Mobile

as a

Point of Sale


Mobile Product Segmentation

Individuals

SMEs

Corporates

• Security / transactional & sales functions (>70)

• The born in social media, Banorte Go

• CoDi payments

• Cash Management

• Payments

• Services

• Credit

• Reporting

• Security management

• Reporting


Adapting the Business & Infrastructure to the New Payments Market

Continuous growth on POS’s transactions

with emphasis on e-commerce

The best DIGITAL PLATFORM

for aggregators

CoDi – Test Pilot and further

development underway

50.0

100.0

150.0

1Q2017

3Q 1Q2018

3Q 1Q2019

3Q 1Q2020

POS’s TransactionsMillions

+27%


Results


3.2%

3.6% 3.6%3.5% 3.5%

3.7%

4.5%

4.8%5.0%

4.8%

5.2%

4.7%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20

NIM

Bank Net Interest Margin

NIM

(Post-Provision)

4.1%

4.5%4.8% 4.9%

4.7%

5.2%

5.8%

6.3% 6.4%6.2%

6.6%

6.3%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20


Improving Efficiency

Cost to Income56.0% 54.0% 53.7%

50.5% 50.9%

47.5%

45.0%

41.4%43.0% 43.7%

41.6%43.1% 43.8% 43.7%

35%

40%

45%

50%

55%

2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20

Reported

40.5%

* Recurring

*Recurring

Reported

41.4% 42.3%


6,157

6,553 6,730 6,848

6,180

7,362

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

1Q19* 2Q19 3Q19 4Q19 1Q20

Strong Net Income

Net Income

8,517

10,88812,122 11,936

13,518 15,044

18,339

23,158

26,289 24,834

27,493

7,500

10,000

12,500

15,000

17,500

20,000

22,500

25,000

27,500

30,000

2011 2012 2013 2014 2015 2016 2017 2018* 2019*

Million Pesos

CAGR

2011-2019 +17%

0.4%

YoY*

+14%

YoY* Recurring

* Recurring

Reported


1.1%

1.30%

1.60%1.40% 1.47%

1.56%

1.79%

2.11%2.26%

2.10%2.25% 2.32% 2.37%

2.02%

2.27% 2.36%2.50%

1.0%

1.5%

2.0%

2.5%

3.0%

2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20

ROA

Constant Positive growth in Profitability

ROE

14.1% 14.3%16.4%

13.7% 13.7%14.8%

20.3%

24.1% 23.4%

22.2%22.8% 23.6% 23.9%

21.7%

25.7% 24.2% 26.2%

10%

15%

20%

25%

30%

2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20

* Recurring

* Recurring

Reported:

Reported:


Loans

Deposits


Healthy Funding & Loan Portfolio Structure

2019 1Q20

$757 bn

DemandTime

Money

Market

Interbank

Loans

$744 bn

1Q20

Consumer

Commercial

Mortgage

Corporate

Government

Commercial

Consumer

Mortgage

Government

Corporate

US 34.4 bn

Demand

Money

Market

Time

Interbank

Loans

US 32.5 bn

Billion Pesos

Funding

Loan Portfolio

$807 bn

$763 bn2019

56%34%

8%2%

21%

22%

19%

23%

15%


Demand67%

Time33%

129 136158 168

194223 229 236 236 229 227

255300

351384 397 414

394 396 401438 454

384436

509551

590637 623 632 637

667 681

100

200

300

400

500

600

700

2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20

Time Demand Core Deposits

1Q19 1Q20

Demand 394 454

Time 229 227

TOTAL 623 681

Loyal Deposits Base

Demand62%

Time38%

MIX

2013 1Q20

Billion Pesos

15%

(1%)

9%

Deposits

YoY

+15%

YoY

(1%)

CAGR:

+10%

YoY

+9%


Continued Growth in Performing Loan Book, Special Focus on Consumer

US 32.5 bn

Billion Pesos 1Q19 4Q19 1Q20 QoQ YoY

Mortgage 159 170 173 2% 9%

Car Loans 25 27 27 2% 10%

Credit Cards 37 40 39 (3%) 6%

Payroll 51 50 50 1% (1%)

Consumer 271 286 289 1% 7%

Commercial 158 157 166 6% 5%

Corporate 137 130 146 12% 6%

Government 179 170 161 (5%) (10%)

TOTAL 746 744 763 3% 2%

335 389

420 464

510 557 604

756 746

750716

744 763

300

400

500

600

700

800

2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20

Total Loan Portfolio

98118

140155

174201

237

267 271 276 282 286 289

50

100

150

200

250

300

2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20

CAGR:

+14%

US 12.3 bn

CAGR:

+10%

Consumer Portfolio


Loan Book View

89%

0%11%

16%

26%

14%

44%

Currency Term

24%

10%

18%9%

9%

8%

22%

Sector

1 year

5 years

10 years

> 10 yearsPesos

Dollars

UDIs

Subnational

Government

Federal

Government

Services

Commerce

Manufacturing

Transportation

Other


1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20

Credit Cards 6.1% 6.3% 6.0% 5.5% 5.9% 5.9% 6.0% 5.4% 5.8%

Payroll 2.9% 3.3% 4.1% 3.7% 3.0% 3.8% 3.4% 3.3% 2.7%

Car Loans 0.9% 1.1% 1.1% 1.1% 0.9% 1.0% 1.0% 1.0% 0.9%

Mortgage 0.9% 0.9% 1.0% 0.9% 1.0% 1.0% 1.1% 1.1% 1.2%

Commercial 2.6% 2.6% 2.3% 1.9% 2.2% 2.5% 2.7% 2.5% 2.4%

Corporate 3.0% 2.9% 2.8% 2.8% 2.7% 2.8% 2.7% 1.7% 1.7%

Government 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Total Banorte 1.9% 2.0% 1.8% 1.7% 1.7% 1.9% 1.9% 1.6% 1.7%

2.9%

2.2%

1.8%2.0%

1.7% 1.6% 1.7%1.9% 1.9%

1.6% 1.7%

1.0%

2.0%

3.0%

2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20

Sound Asset Quality

Past Due Loan Ratio


2.2%2.3%

2.0% 1.9% 1.9%

2.2%2.0%

2.2%

2.1%

2.5%

2.1%

2.4%

2.2%

1.0%

1.5%

2.0%

2.5%

2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20

Actual

Prev. Criteria

103% 106%

115%

139%

128%

142%138% 136%

128% 127%

138% 140%

90%

110%

130%

150%

2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20

Sound Asset Quality

Coverage Ratio

Cost of Risk

* Cost of Risk: Provisions / Average Total loans (Performing + Past Due), On actual criteria all the recoveries are register on Provisions (net)


Healthy Liquidity

Loans / Deposits

(%)

Liquidity Coverage Ratio

CCL (%)

103%

102%

98%

90%

95%

100%

105%

1Q2015

3Q 1Q2016

3Q 1Q2017

3Q 1Q2018

3Q 1Q2019

3Q 1Q2020

117%

133%

120%

60%

70%

80%

90%

100%

110%

120%

130%

140%

150%

1Q2015

3Q 1Q2016

3Q 1Q2017

3Q 1Q2018

3Q 1Q2019

3Q 1Q2020


Strong Capital Position

7.90%

9.40%

11.40%

Capital Adequacy Ratio

12.7% 12.4% 12.1% 11.9% 12.7%13.8% 13.1% 13.3% 13.3% 12.2%

5.7%

1.1%

15.3%14.6%

15.3%

17.2% 17.2%18.1%

20.0% 20.3%

18.6% 19.0%

2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20

*RWA= Risk Weighted Assets annual growth

RWA

Basel III

+11% +8% +16% (2%) +19% +20% +19% +5% +7% +9%

CET1

Minimum

Regulatory

Ratios

Total

Tier 1

17.9%

Tier 2


Investment Grade by All Major Rating Agencies

RatingAgency Outlook Date

BBB-

BBB

Fitch

Standard & Poor’s Negative

Negative

Mar-20

Aprl-20

baa3Moody’s Negative Aprl-20


Appendix


Quarterly Summary

Income Statement and Balance Sheet

Highlights - Bank 1Q19 4Q19 1Q20Change

(Million Pesos) 4Q19 1Q19

Net Interest Income 16,931 17,654 17,517 (1%) 3%

Non-Interest Income 6,105 4,906 4,726 (4%) (23%)

Total Income 23,036 22,559 22,243 (1%) (3%)

Non-Interest Expense 9,341 9,875 9,718 (2%) 4%

Provisions * 3,700 3,713 4,262 15% 15%

Operating Income 9,996 8,971 8,263 (8%) (17%)

Taxes 2,647 2,167 2,112 (3%) (20%)

Discontinued Operations - - - - -

Subsidiaries & Minority Interest 14 44 29 (34%) N.A.

Net Income 7,362 6,848 6,180 (10%) (16%)

Balance Sheet

Performing Loans (a) 745,735 743,507 763,091 3% 2%

Past Due Loans (b) 13,095 12,392 12,827 4% (2%)

Total Loans (a+b) 758,830 755,899 775,918 3% 2%

Total Loans Net (d) 741,008 738,816 757,986 3% 2%

Acquired Collection Rights ( e) 1,864 1,359 1,261 (7%) (32%)

Total Loans (d+e) 742,872 740,175 759,247 3% 2%

Total Assets 1,172,383 1,149,536 1,293,647 13% 10%

Total Deposits 737,227 744,271 791,870 6% 7%

Demand Deposits 391,855 435,453 451,842 4% 15%

Time Deposits 345,372 308,819 340,028 10% (2%)

Total Liabilities 1,056,082 1,035,276 1,179,984 14% 12%

Equity 116,301 114,261 113,663 (1%) (2%)


Quarterly Summary

Infrastructure 1Q19 4Q19 1Q20

Employees 22,782 24,123 24,098

Branches 1,149 1,182 1,178

ATM’s 8,453 8,919 9,090

POS’s 158,533 166,505 166,225

Financial Ratios - Bank 1Q19 4Q19 1Q20

Profitability:

NIM (1) 6.2% 6.6% 6.3%

NIM after Provisions (2) 4.8% 5.2% 4.7%

ROE (3) 26.2% 23.9% 21.7%

ROA (4) 2.5% 2.4% 2.0%

Operation:

Efficiency Ratio (5) 40.5% 43.8% 43.7%

Operating Efficiency Ratio (6) 3.2% 3.4% 3.2%

Average Liquidity Coverage Ratio for Banorte and

SOFOM - Basel III (7)116.6% 133.5% 120.1%

Asset Quality:

Past Due Loan Ratio 1.7% 1.6% 1.7%

Coverage Ratio 136.1% 137.9% 139.8%

Capitalization:

Net Capital/ Credit Risk Assets 22.0% 23.7% 24.1%

Total Capitalization Ratio 18.1% 18.5% 19.0%

Leverage

Basic Capital/ Adjusted Assets 9.3% 10.8% 10.9%


Corporate Responsibility and Sustainability

Global Initiative Report (GRI Standards)International standards on sustainability reporting and disclosure of economic, environmental and socialtopics.

UN Global CompactInternational initiative promoting 10 universally accepted Principles to promote Corporate Social Responsibility (CSR).

Carbon Disclosure Project (CDP)Organization that promotes awareness on climate change through a better quality and transparency of the information reported on the company's emissionsperformance.

IPC SustentableMexican index of 30 listed companies ,which are best positioned in relation to the pillars of Environment, Socialand Corporate Governance.

Empresa Socialmente Responsable (ESR) Recognition granted by the Mexican Center for Philanthropy (Cemefi) and AliaRSE, as a company committed with corporate social Responsibility.

Natural Capital DeclarationVoluntary financial sector initiative created at the Rio +20 Earth Summit, which recognizes the role of natural resources in the economy through its integration into financial products and services.

Equator PrinciplesStandard within the financial sector to determine, assessand manage the environmental and social risks of financed projects.

GEI2 Programme MexicoVoluntary reporting of greenhouse gas emissions

UNEP Finance InitiativeInitiative that aims to identify, promote and carry out the adoption of best environmental and sustainabilitypractices at all levels of operations of financialinstitutions.

Dow Jones Sustainability Index MILA In 2017 was included in the Dow Jones Sustainability Index MILA Pacific Alliance.

Asociación de Bancos de México (ABM) Participation in the Sustainability Committee and the Corporate Social Responsibility Committee, and signatories as the ABM Banking Sustainabilityprotocol.

STOXX ESG Leaders IndexIndex that represents the main global companies in terms ofenvironmental, social and governance criteria, based on ESG indicators provided by Sustainalytics.

Euronext Vigeo Emerging Markets 70 Recognizes the 70 companies from emerging countries with the most advanced practices in terms of sustainability.

FTSE4Good Emerging IndexIndex that evaluates actions in the themes of climate change, labor standards and risk management, among others.

Bloomberg Gender Equity IndexIndex that provides analysis of the commitment of 52 companies with the gender equity in the workplaceto investors and organizations.

Principles for Responsible Investment Initiative that promotes its signatories to integrate environmental, social and governmental (ESG)criteria into their investment and ownership decisions.

Documents

1 Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 1Q20/media/Files/B/Ba...1 Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 1Q20. 2 Us Mkt TI NIM Rev C / I NI ROE L/D Dep