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GFNORTE
October 25th, 2019
Conference Call: 3Q19 Results
2
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, expressed or implied, regarding the accuracy, thoroughness, completeness, impartiality or
soundness of this information or estimations or projections considered or stated or that such projections will materialize. Grupo Financiero Banorte, S.A.B. de C.V.’s relevant information is
contained in public documentation available in the webpage of the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) and the Mexican Stock Exchange
(Bolsa Mexicana de Valores, S.A.B. de C.V.) in http://www.cnbv.gob.mx and http://www.bmv.com.mx, respectively. In the event that new public information is disclosed in the aforementioned
webpages, such information shall prevail and any person shall read, in detail, any such public documents before making any decision related to the content of this presentation. All analysis and
statements included in this presentation are based upon information available as of the date of this presentation, and Grupo Financiero Banorte, S.A.B. de C.V. or any of its affiliates and
employees undertake no obligation to update or revise any such analysis and statements, whether as a result of new information or future events or developments.
Any person receiving this presentation, from the moment of reception, recognizes that the information contained herein is for information purposes only, and that it does not cover, or pretends to
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have in connection with the information contained in this presentation. Any decision made pursuant to such information shall be considered to be made at their own risk. The information
contained herein shall not be considered as a legal or tax recommendation. Any persons receiving this information shall seek the advice of their own legal and tax advisors.
The content of this presentation was prepared by Grupo Financiero Banorte, S.A.B. de C.V.
This presentation may contain forward looking statements and information related to Grupo Financiero Banorte, S.A.B. de C.V. reflecting current opinions of Grupo Financiero Banorte, S.A.B. de
C.V. and its management team in regards to its performance, business management, historical facts and future events. Forward looking statements may include words such as “believes,”
“anticipates,” “should,” “estimates,” “seeks,” “forecasts,” “will,” “expects,” “may,” “intends,” “plans” and similar expressions, that are intended to identify forward looking statements but are not the
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3
1.95%
2.10%2.20%
2.24%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
ROA
18.0%
19.7% 19.5% 19.6%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
ROE
1.99 2.05 2.24
2.34 2.44
2.59 2.71
3.53 3.44
3.03 3.07
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
EPSResilient Quarter on Earnings & Returns
+222bp y/y
+20bp y/y
3Q19 q/q y/y 9M19 y/y
Net Income 8,858 1% 13% 27,518 26%
Recurring 26,335 21%
EPS 3.07 1% 13% 9.54 26%
Recurring 9.13 21%
ROE 19.6% 15bp (7)bp 20.5% 162bp
Recurring 19.7% 88bp
ROA 2.24% 4bp 14bp 2.30% 27bp
Recurring 2.20% 17bp
CT.xls "CC"
2.96 3.03
2.13% 2.18%
20.1% 19.9%
4
444
579
2,363
2,651
3,053 3,2803,387
-
1,000
2,000
3,000
4,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Electronic Banking Services Account Mgmt. Fees Fund Transfers
Core Business Performance on Track
NII on Loans +2% q/q, 10% y/y.
NII on Insurance & Annuities +16% q/q, 9% y/y.
3Q Total NIM recovering +25bp q/q.
Net Service Fees (12%) q/q, on a 2Q high base
comparison. 9M19 +5% y/y.
Core Banking Fees +3% q/q
Million pesos 3Q19 q/q y/y 9M19 y/y
NII Loans 15,827 2% 6% 46,482 10%
NII Repos 2,045 (3%) (7%) 6,269 1%
NII Val. Adjust 51 98% (235%) 111 502%
NII Insurance & Annuities 2,191 16% 8% 7,528 9%
NII 20,114 3% 6% 60,390 9%
Net Service Fees 3,183 (12%) (8%) 9,781 5%
Trading Income 2,303 139% 162% 4,417 49%
Other Income 15,827 2% 6% 46,482 10%
Recurring 1,857 29%
Total Revenues 26,322 6% 10% 78,106 13%
Recurring 76,445 11%
CT.xls "CC"
23.824.7
26.3
5.0
10.0
15.0
20.0
25.0
30.0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Billio
n P
es
os
Total Revenues
25.0 25.4
2,000
2,250
2,500
2,750
3,000
3,250
3,500
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Core Banking Fees
Core Banking Fees: Fund Transfers, Account Management Fees, Electronic Banking Services
+3%
+3% q/q
(3%)
+11%
Core Banking Fees
5
Evolution of Net Interest Margin
5.7%
5.6%
5.5%
5.7%
4.5% 4.4%4.5%
4.00%
4.50%
5.00%
5.50%
6.00%
6.50%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
NIM of Group
NIM ex-Insur. & Annui. NIM after Prov.
6.5% 6.3%6.5%
8.4%8.0%
8.3%
4.95% 4.91%4.97%
4.0%4.5%5.0%5.5%6.0%6.5%7.0%7.5%8.0%8.5%9.0%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
NIM of Bank
NIM NIM from loan portfolio After Prov.
Cost of Acquired Assets
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
Cost of Funding Cost of Deposits
GFI
Merger
(90bp) y/y
(14bp) q/q
91.5bn 86.1bn
Original Funding Actual Funding
TIIE + 21 bp
TIIE – 84 bp
Total Funding Cost
(18bp) q/q
6
9,461 9,525 10,578
39% 37% 40%
3Q18 2Q19 3Q19
Non-Interest Expense
41.4%
39.7%
38.5%
40.2%
30%
35%
40%
45%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Cost to Income Ratio
8.8%6.0%
0%
5%
10%
15%
20%
25%
30%
35%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2017 2018 2019
y/y Revenues y/y Expenses
Efficiency Under Control
Annual expense growth at 9% in line
with guidance.
Annual efficiency ratio of 38.5% aligned
to guidance target.
Total
Personnel
9M19
+9% y/y
CT.xls "CC"
21.3%
Recurring
+11%
39.4%
Recurring
5,000
10,000
15,000
20,000
25,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Recurring Income Expenses
7
Credit and Loan Activity
8%10%
3%
-3%
-3%
3%
-3%-20%-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
TOTAL Commercial Corporate Government
17%
32%
10% 9%10% 11%10%
-4%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Mortgage Auto Credit Card Payroll
2Q17 3Q17 4Q17 1Q18 2Q18
3Q19 q/q y/y
Commercial 167,839 (2%) 3%
Corporate 123,767 (6%) (3%)
Government 157,821 (16%) (20%)
Mortgages 166,286 2% 10%
Car Loans 25,889 2% 11%
Credit Card 39,028 3% 10%
Payroll 52,096 (1%) (4%)
Consumer Loans 283,298 2% 8%
Total 732,726 (5%) (3%)
Total ex-Government 574,905 (1%) 4%
300
400
500
600
700
800
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Total Loan Portfolio
Loan Portfolio ex-Gov. Loans Total
180
200
220
240
260
280
300
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Consumer Loan Portfolio +2% q/q
(5%) q/q
(1%) q/q
Corporates refinancing resulting in high loan
prepayments.
Consumer books remains with positive growth
momentum.
8
2.29%
1.91%
2.15%
1.50%
2.00%
2.50%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Cost of Risk
Credit Quality
Stable NPL ratio.
Declining delinquencies.
Higher cost of risk in the quarter as
anticipated.
Isolated case draws write-off rate up.
2.3%*
* Excluding extraordinary Provisions on Corporate exposure
CT.xls "CC"
1.8% 1.8% 1.9% 1.9%
1.0%
1.5%
2.0%
2.5%
3.0%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
NPL Ratio
0.53% 0.51%0.44%
0.62%
0.00%
0.25%
0.50%
0.75%
1.00%
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Write-Off Rate
0.56%*
* Excluding extraordinary Charge-off on Corporate exposure
9
115,486
131,568
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Annuities Assets
3,302 3,037 3,765 3,586
-
2,000
4,000
6,000
8,000
10,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
2017 2018 2019
Insurance Retained Premiums
Relevant Subsidiaries
Bank Net Income +3% q/q, +21% recurring y/y.
Insurance with retained premiums 9M19 growth
of +8%. Net income 9M19 +14%.
Afore Net Income +21% y/y.
Annuities Assets growth +14% y/y.
Net income 9M19 +20%.
Million pesos 3Q19 q/q y/y 9M19 y/y
Bank 6,613 3% 12% 20,265 29%
Recurring 19,082 21%
Broker 345 48% 3% 883 (1%)
Insurance 739 (10%) 7% 3,174 14%
Annuities 263 18% 14% 758 20%
Afore 415 (2%) 21% 1,249 21%
Leasing & Factoring 285 36% 61% 721 10%
Participation in Net Income of GFNorte
1H18
CT.xls "CC" 9M19
+8% y/y
Cifras son lo que las subsidiarias aportan a GFNorte
El Edo Res de Banco, Seguros y Afore, es diferente
por la participación accionaria que no es del 100%
632 739
866
-
200
400
600
800
1,000
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q
2017 2018 2019
Afore Net Income
+14% y/y
10
Bank Regulatory Capital Ratio
7.68%
9.18%
11.18%
11.5% 12.7% 12.4% 12.1% 11.9% 12.7% 12.1% 12.7%
12.7% 13.1% 13.3%
15.1% 15.3% 14.6%
15.3%
17.2% 17.8%
16.6% 17.2%
18.1%
20.0% 20.3%
2013 2014 2015 2016 2017 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
*RWA= Risk Weighted Assets annual growth
RWA
Tier 1
18.5%
Basel III
Capital Adequacy Ratio (CAR)
+17% +11% +8% +16% (2%) +7% +19% +19% +20% +19% +5%
CET1
1.8%
Minimum
Regulatory
Ratios
11
Cross-sell Ratio
Products per Client
1.79
1.83
1.89
1.98 2.00 2.01
2.03
2015 2016 2017 2018 1T 2T 3T
2019
12
GFNorte Guidance 2019 and Estimates for 2020
Previous
Guidance 2019
New
Guidance 2019
Loan Growth (ex-Gov) 7% – 9% 4% – 5%
NIM Expansion 15 – 20bp 15 – 20bp
Expense Growth 7% – 9% 7% – 9%
Efficiency 37.5% – 38.5% 37.5% – 38.5%
Cost of Risk 2.0% – 2.3% 2.0% – 2.3%
Tax Rate 26% – 28% 26% – 28%
Net Income 36.0 – 36.8 36.0 – 36.8
ROE 19.9% – 20.3% 19.9% – 20.3%
Economic Estimates 2019 2020
GDP Growth 0.3% 1.4%
Inflation 3.3% 3.0% – 3.5%
Banxico Reference Rate 7.25% 6.0% – 6.5%
October 25th, 2019
Conference Call: 3Q19 Results
GFNORTE