1
GFNorte’s 2Q08 Results
Conference CallJuly 25, 2008.
2
Yearly Recap
Net Income
Stock Price
P/BV
Net Interest Margin
ROA
ROE
Book Value
Past Due Loan Ratio
MILLION PESOS
2Q082Q07
1,722 5% 1,806
23.6% 20.5%
2.7% 2.3%
Efficiency Ratio 57.0% 54.1%
7.5% 7.5%
1.5% 1.5%
Reserve Coverage 141% 131%
49.58
3.32 2.68
48.47
14.92 18.1225%
(2%)
(22%)
3
Quarterly Net IncomeMILLION PESOS
Non-recurring
Recurring1,722
2Q07 2Q08
1,806
1,74660
1Q08
1,691
1,928
237
4
Income StatementMILLION PESOS
Net Interest Income
Service Fees
Recovery
Non Interest Income
Total Income
Non Interest Expense
Net Operating Income
Non Operating Income, Net
Income Tax
Net Income
Provisions
Subs & Minority Interest
FX & Trading
1Q08 QoQ
1%
9%
(38%)
(19%)
1%
1%
3%
(1%)
(22%)
(30%)
(6%)
25%
68%
5,179
1,573
190
198
1,961
7,140
(3,799)
3,341
702
(1,075)
1,928
(1,005)
(34)
YoY2Q07 2Q08
4,247
1,424
180
339
1,943
6,190
(3,516)
2,674
612
(867)
1,722
(754)
57
1,712
117
160
1,989
7,221
(3,903)
3,318
551
(751)
1,806
(1,255)
(57)
5,232 23%
20%
(35%)
(53%)
2%
17%
11%
24%
(10%)
(13%)
5%
66%
(200%)
Recurrent Net Income 3%1,6911,722 1,746 1%
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Non Interest Expense
BILLION PESOS
EFFICIENCY RATIO
Non Interest Expense
2Q07
3.5
1Q08
3.8
57%
2Q06
57%
2Q07
54%
2Q08
56%
1H06
57%
1H07
54%
1H08
2Q08
3.9
QoQ YoY
3% 11%
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Net Interest Margin vs CETESPERCENTAGE
Cetes
NIM
99% 100%
7.6
7.1
7.57.07.07.07.1 7.1 7.2 7.4
7.98.07.7 7.5 7.7
8.2
7.4
7.9
7.5
7.5
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
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Core DepositsBILLION PESOS
Mix
Demand
Time
Demand
Time
Total
Deposits 2Q07 2Q081Q08
107
64
171
62%
38%
100%
101
60
161
62%
38%
100%
63%
37%
100%
103
63
166
YoYQoQ
6%
7%
6%
3%
2%
3%
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BILLION PESOS
Performing Loan Portfolio
2Q07 1Q08 2Q08 QoQChange
YoY
Commercial
Corporate
Government
Total
Consumer
22%4%
38%10%
41%39%
29%9%
27%6%
79
43
24
217
71
76
39
18
199
67
64
31
17
168
56
2Q07 1Q08 2Q08
168199 217
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Performing Consumer Loan PortfolioBILLION PESOS
Car Loans
Credit Card Loans
Payroll Loans
Consumer
Mortgage Loans
2Q07 1Q08 2Q08
2Q07 1Q08 2Q08
5667 71
9%2%
36%8%
16%7%
27%6%
29%6%
8
16
7
71
40
7
15
6
67
38
7
12
6
56
31
QoQChange
YoY
10
Loan Portfolio Breakdown
2Q07 2Q081Q08
Mortgage
Credit Card
Payroll /Personal
Car
Commercial
Corporate
Government
19
4
7
3
38
18
10
19
4
8
3
38
19
9
19
3
7
3
36
20
11
PERCENTAGE
11
Mortgages
LOANS
2Q07 1Q08 2Q08
2.9
2Q07
2.9
1Q08
3.3
2Q08
BILLION PESOS
NEW LOANS
Market Share
14.3%
4,4524,342
5,153
12
Credit Cards
NEW CARDS(Thousand)
172
2Q07
185
1Q08
191
2Q08
6,907
2Q07
9,145
1Q08
11,244
2Q08
NEW RECEIVABLES(Million Pesos)
13
Payroll and Personal Loans
1.9
2Q07
1.6
1Q08
2.1
2Q08
Market Share
11.5%
NEW LOANS IN BILLION PESOS
14
Government Portfolio
Federal
16.8
2Q07
17.6
1Q08
24.3
2Q08
19.5
2Q07
23.1
1Q08
24.1
2Q08
PERFORMING LOANS CORE DEPOSITS
BILLION PESOS
* Includes states, municipalities and federal entities.
15
Government Payrolls
MILLIONS
0.9
2Q07
1.2
1Q08
1.4
2Q08
* Includes states, municipalities and federal entities.
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Capitalization Ratio
Tier 1
Tier 2
TOTAL
Percentage Tier 1
PERCENTAGE
4Q07 1Q08
10.2%
3.6%
13.8%
74%
10.3%
4.3%
14.6%
70%
2Q08
10.7%
5.0%
15.7%
68%
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Asset Quality
Past Due Loans
Loan Loss Reserves
RESERVECOVERAGE
PAST DUE LOANRATIO
Total Loan Portfolio
BILLION PESOS
2Q07 1Q08 2Q08
2.6
3.6
173
3.2
4.2
220
3.2
4.0
203
131%141%127%
2Q07 1Q08 2Q08
1.5%1.5%1.6%
2Q07 1Q08 2Q08
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Consumer Portfolio
CREDIT CARD
6.7%
3.6%
5.9%
2Q07 1Q08 2Q08
MORTGAGE
1.5%
2.6%2.3%
2Q07 1Q08 2Q08
PDL RATIO
PAYROLL
2.0%1.8% 1.7%
2Q07 1Q08 2Q08
19
Subsidiaries
20
Recovery Bank
Total
2Q07 1Q08
NET INCOME IN MILLION PESOS
AUM IN BILLION PESOS
2Q082Q07 %
167191
44.9
10.4
38.7
19.2Banorte’s Assets
Acquired Assets (14%)
85%
1.3 2.6Investment Projects 100%
58.2 62.0Total 7%
1.6 1.4IPAB Portfolio (13%)
2Q08
151
21
Long Term Savings
NET INCOME IN MILLION PESOS
AFORE INSURANCEANNUITIES
7
2Q07
6
2Q08
Total
2Q07
125
1Q08
79
2Q08
63
33
1Q08
88
2Q07
0
2Q08
8
1Q08
30
2Q07
58
2Q08
39
1Q08
QoQ
(20%)
YoY
(50%)
22
Other Finance Companies
NET INCOME IN MILLION PESOS
Total
2Q07
76
1Q08
71
LEASING AND
FACTORINGWAREHOUSING
2Q08
85
QoQ
19%
YoY
11%
73
2Q07
78
2Q08
66
1Q08
3
2Q07
7
2Q08
5
1Q08
23
Brokerage and Microlending
NET INCOME IN MILLION PESOS
BROKERAGE HOUSE MICROLENDING
63
2Q07
143
2Q08
71
1Q08(8)
2Q07
(7)
2Q08
(9)
1Q08
24
Banorte USA
MILLION DOLLARS
2Q082Q07
INB
Performing Loans
Efficiency
ROE
Net Income (100%)
Net Interest Margin
1,035931
4.5% 4.2%
6.6 5.9
23.7% 20.3%
41.3% 42.1%
1Q08
1,025
4.2%
6.8
22.1%
40.3%
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Challenges
Complex scenario.
US Financial Crisis.
Restrictive monetary policy.
Economic slowdown and inflationary pressures.
Competitive pressures new market players.
Regulatory changes provisions.
regulatory deposits.
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Challenges
Balancing growth and risk adjusted profitability.
Proactive balance sheet management.
Funding costs.
Capitalization.
Focus on net interest income.
Higher emphasis on risk analysis.
Asset quality.
New origination models.
Increased risk-based pricing differentiation.
Early collection.
27