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Page 1: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

EARNINGS RELEASE 4Q20

Page 2: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

CONFERENCE CALL February 25, 2021 10:00 a.m. Mexico City Time 11:00 a.m. EST DIAL IN NUMBER 1-877-407-8031 USA 001-201-689-8031 Mexico & International CONFERENCE ACCESS CODE CREAL WEBCAST http://webcast.investorcloud.net/creal/index.html CONTACT Renata González Muñoz +52 (55) 5228 9753 [email protected] Eduardo Hanono Gómez +52 (55) 5340 5200 Ext. 2182 [email protected]

Page 3: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Our Products

Payroll

SMEs

Used Cars

Personal

Page 4: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Crédito Real Mexico City – February 24, 2021. Crédito Real S.A.B. de C.V. SOFOM E.N.R. ("Crédito Real" or the “Company”) (BMV: CREAL*) today announced its financial results for the fourth quarter and full year ended December 31, 2020. All figures presented throughout this document are expressed in nominal Mexican pesos unless otherwise noted. All financial information has been prepared in accordance with the guidelines of the National Banking and Securities Commission ("CNBV") and the Mexican Stock Exchange ("BMV").

4Q20 Highlights Key Financial Information

Financial Ratios

Summary of Operations

(1) Over Total Loan Portfolio (2) Figures are expressed in million pesos. (3) Includes a Ps. 2,841.2 million leasing portfolio and a Ps. 783.4 million factoring portfolio registered in fixed assets and other accounts

receivable, respectively, in 2020; and, includes a Ps. 162.8 million factoring portfolio registered in other accounts receivable in 2019. (4) Includes Group Loans and Durable Goods, as well as strategic alliances. (5) Related to loan portfolio which excludes the leasing and factoring portfolios previously detailed.

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Interest Income 2,589.7 3,293.0 (21.4) 10,205.2 11,933.0 (14.5) Financial Margin 1,382.7 1,982.0 (30.2) 5,629.2 7,261.9 (22.5) Operating Result (18.0) 647.8 - 840.6 2,773.3 (69.7) Net Income 115.3 427.2 (73.0) 751.0 1,980.1 (62.1) Total Assets 70,511.7 61,591.7 14.5 Total Debt 49,853.7 41,511.2 20.1 Equity 16,207.2 16,063.9 0.9 Origination 7,483.0 9,631.7 (22.3) 31,454.6 30,720.5 2.4

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Net Interest Margin 11.5% 17.5% (6.0) 11.7% 17.1% (5.4) Cost of Risk 4.7% 3.0% 1.7 4.0% 2.8% 1.3 Efficiency Ratio 58.7% 45.6% 13.1 54.9% 43.9% 10.9 ROAA 0.6% 2.9% (2.3) 1.0% 3.6% (2.5) ROAE 2.7% 10.5% (7.8) 4.2% 12.3% (8.0) Capitalization Ratio1 31.6% 34.1% (2.5) 31.6% 34.1% (2.5) Debt-to-equity 3.1x 2.6x 0.5 3.1x 2.6x 0.5

4Q20 4Q19

Total Portfolio2 (%) Customers NPL's Average

Loan Total

Portfolio2 (%) Customers NPL's Average Loan

(%) Var. Portfolio

Payroll 29,402.8 57.3% 455,858 1.7% 64,500 28,242.3 59.9% 432,173 1.0% 65,350 4.1 SMEs3 12,112.8 23.6% 3,436 0.8%5 3,525,271 9,528.0 20.2% 2,930 0.4%5 3,251,865 27.1 Used Cars 3,907.4 7.6% 23,389 0.9% 167,062 3,537.1 7.5% 21,440 1.2% 164,975 10.5 Personal 4,994.7 9.7% 153,259 5.1% 32,590 4,918.0 10.4% 172,628 4.8% 28,489 1.6 Other4 926.4 1.8% 294,565 3.2% 3,145 895.9 1.9% 287,149 2.9% 3,120 3.4

Total 51,344.1 100.0% 930,507 1.8%5 55,179 47,121.2 100.0% 916,320 1.3%5 51,424 9.0

Page 5: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Relevant Developments

• On December 15, 2020, the Company held its Ordinary Shareholders’ Meeting where the following points were approved, among others: i) the cancellation of 7.5 million shares, acquired through the Company’s buyback program, representing 1.98% of the Company’s capital stock; and, ii) the distribution of a dividend payment of 0.75 pesos per share corresponding to 2019. fiscal year.

• On January 8, 2021, the Company announced the joint-acquisition and full settlement of a package of credit rights and collection rights, as well as trust rights, held by BaFamsa, currently undergoing court-ordered liquidation, through a specific purpose vehicle with Promecap and an investment fund managed by Credit Suisse.

• On January 22, 2021, Crédito Real announced that it successfully completed the international

issuance of US$500 million Senior Notes due 2028, at an 8.00% semi-annual coupon, whose resources were partially used for refinancing a portion of the Company’s existing debt. The 2028 Senior Notes have a 4-year call date under its US$1.5 billion Medium-Term Note Program.

• On January 25, 2021, pursuant to its funding strategy focused on the achievement of alternative funding sources under better credit terms as well as the strong commitment with ESG Factors, the Company announced the successful closing of a credit line for US$100 million and a 7-year term, with U.S. International Development Finance Corporation (“DFC”). The proceeds which will be used to grant credits for women-led SMEs.

Page 6: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Update on the COVID-19 situation COVID-19 Performance Metrics

Although the granting of relief programs has decreased, as fewer clients require them, we kept maintaining a close approach with each one, providing relief programs to those affected the most (mainly SMEs and Used Cars). Furthermore, to reduce the effects of the pandemic on our portfolio, we adopted stricter origination standards at certain businesses (focusing on active clients with solid credit records, AAA credit profiles or salaried employees). All of this has allowed us to maintain a stable performance in each business line, which are beginning to show signs of recovery, given the fact that, excluding SMEs (most affected segment by the pandemic), practically all business lines recorded their peak level of collection since March during 4Q20.

8.6

6.3 5.2

2Q20 3Q20 4Q20

(%) Portfolio with Relief Programs

8,944.3 7,889.3 8,302.1

4Q19 3Q20 4Q20

Collection (Ps. million)

Page 7: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Message from the CEO Amid an environment featured by an unparalleled economic downturn and constraints to the social interaction, the results of the 4Q20 and full-year 2020 showed the resilience of our diversified business model and efficiency of our lean operating structure, as even within this backdrop the Company was able to post an NPL Ratio of 1.8% (Guidance 2020: between 2% and 3%) standing as one of the lowest in the industry.

And, despite the implementation of stricter origination standards in 2020, the Total Portfolio recorded a 9.0% annual growth (Guidance 2020: 15-20%), as we decided to prioritize the asset quality and long-term growth over short-term goals, seeking to achieve the greatest value for our investors, same that were benefited, towards year-end, by two important decisions: i) the approval of the payment of 2019 deferred dividends (it will be settled in 1H21); and, ii) the cancellation of ~7 million shares. Similarly, amongst the most relevant developments of 2020, we find: i) our successful funding endeavors (summing up over US$330 million); ii) the further consolidation of our leasing business (as it was planned since its inception); and, on new business opportunities, iii) the commercial partnership set with G. Famsa, to bolster the origination in Payroll in Northern Mexico, as well as, iv) the acquisition (completed on January 7, 2021) at attractive and favorable terms, of a portion of Famsa’s payroll loan portfolio (liquidated by IPAB). Moving into the dynamics of the 4Q20, in Payroll, origination was down 29% on a sequential basis, as a result of the lockdowns imposed across different cities of Mexico (outstanding Mexico City), impact partially offset by the benefits generated from the commercial agreement set with G. Famsa. In SMEs, on the one hand, outstood the deployment of reinforced origination standards in the U.S.; and, on the other, in Mexico, a softer performance was experienced, mainly following the enforcement of new lockdown measures.

Turning to Used Cars, particularly remarkable was the asset quality (NPL Ratio < 1%), as we seek to properly benefit from the surging demand of this product, in both Mexico and the U.S., through effective credit policies. Last but not least, the personal loans segment (Instacredit) reflected the efficiencies achieved at its operating structure, posting a remarkable annual growth rate of 29% in net income, for the full-year 2020, in spite of the challenges posed by the prevailing environment.

In this context, supported by the refinancing efforts deployed amid a low interest rate environment, the cost of funding dropped 380 bps. YoY and the 4Q20 financial margin remained stable, on a sequential basis, at Ps.1,383 million (-2% QoQ). In contrast, net income was negatively affected by incremental provisions, amounting to Ps.115 million (-42% QoQ and -73% YoY). Accumulated financial margin and net income were Ps.5,629 million (-23% YoY) and Ps.751 million (-62% YoY), respectively; results that, despite its annual contraction, we deem as positive, as they outperformed our expectations (after COVID-19). On the financial front, outstood the progress achieved at the expansion of our funding sources, since, in addition to the positive negotiations closed with development banks, such as the credit subscribed with the DFC, for USD$100 million, 2021 started at a strong footing, with the issuance our Senior Notes due 2028, for USD$500 million, same that are featured by its attractive rate of 8% (below the sector average), thus reaffirming the confidence that investors have placed in Crédito Real’s solid risk-credit profile (endorsed by rating agencies).

Winding up, over the starting year, we trust that, drawing on our solid financial and operating position, we will be able to successfully cope up with the persistent challenges and capitalize on arising opportunities, as we just did in 2020; setting these estimates for our 2021 Guidance: i) a growth rate between 8% and 12% for the Total Portfolio; and, ii) an NPL Ratio between 2% and 3%.

Ángel Romanos Berrondo Chairman and CEO

Page 8: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Financial Summary Income Statement Total income includes revenue from all Company’s businesses; that is, interest income, commissions charged and other income from operations. During 4Q20, total income amounted Ps. 2,933.2 million (Ps. 2,589.7 million in interest income; Ps. 321.8 million in other income from operations; and, Ps. 21.7 million in commissions charged), compared to Ps. 3,444.7 million (Ps. 3,059.8 million in interest income; Ps. 293.7 million in other income from operations; and, Ps 91.3 million in commissions charged) in 4Q19 proforma. This decrease was attributed to the impacts that COVID-19 has had on: i) the economic dynamism (particularly in payroll given the constraints to canvassing activity by lockdown measures implemented during the quarter and, in SMEs – the most affected segment - by the inherent effect of the relief programs provided); ii) the Company’s asset quality; and, iii) foreign exchange fluctuations on the balance sheet exposed positions (which resulted in a Ps. 134.8 million loss during the quarter).

Average cost of funds stood at 9.4%, a decrease of 380 bps. when compared to 13.3% in 4Q19, supported by the results of our financing activities throughout the LTM and the positive effect of the lower interest rate environment on the Company’s floating rate debt.

Financial margin decreased 30.2% in 4Q20, to Ps. 1,382.7 million, from Ps. 1,982.0 million posted in 4Q19. This variation was mainly attributed to lower income due to weaker dynamics across all our business lines as consequence of COVID-19 pandemic and the change in our method of recording revenue (given CRA’s consolidation), as we started recognizing leasing and factoring revenues in the Operating Result (although the cost of funds of these assets remains recorded in the margin), factors which were partially offset by a lower interest expense (-7.9% YoY). Despite COVID-19 effects, it is relevant to note that the international businesses continue to have a significant weight in the consolidated financial margin, accounting for 54.3% or Ps. 751.4 million in 4Q20.

43.2%

27.8%

8.5%

19.8%0.8%

Income Distribution -Ps. 2,933.2 million

Payroll SMEsUsed Cars PersonalOther

Total income (Ps. million)

3,444.7 2,933.2

88.8%88.3%

2.6%

0.7%

8.5%

11.0%

4T19 4T20

Other income from operationCommission chargedInterest income

12,658.1 11,210.9

91.4% 91.0%

1.4%1.2%

7.2%7.7%

2019 2020

Page 9: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Net Interest Margin

Cost of risk stood at 4.7% in 4Q20 vs. 3.0% in 4Q19, reflecting the stronger provision built-up to cope with COVID-19 related impacts. Consequently, net provision for loan losses was Ps. 558.0 million during 4Q20, compared to Ps. 351.3 million in 4Q19 (this increase was partially offset by the Ps. 118.0 million gain from the recovery of charge-off accounts recorded in 4Q20 vs. Ps. 74.1 million in 4Q19).

Cost of Risk

Administrative expenses reached Ps. 1,053.0 million during 4Q20, an 8.4%, or Ps. 81.3 million increase over Ps. 971.6 million reported in 4Q19. This variation is primarily attributed to a Ps. 192.5 million increase related to depreciation expenses associated with CREAL Arrendamiento’s operations, which was partially offset by the combined effects of the savings attained by the strict expenses control deployed during 2020 and of a leaner but more efficient operation (benefited by the synergies reached throughout 2019), as well as the divestiture of Resuelve (as the expenses of this business are no longer recognized in our Financial Statements).

Page 10: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Efficiency Ratio

Participation in the results of associates resulted in a Ps. 71.8 million gain in 4Q20, compared to a Ps. 3.3 million gain in 4Q19. This figure reflects the participation in profits that corresponds to Crédito Real for its minority interest in subsidiaries.

Participation in the results of associates

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Crédito Maestro 14.8 18.4 (19.5) 28.5 67.4 (57.8) Credifiel 5.0 7.3 (31.7) 14.8 25.9 (42.7) CREAL Arrendamiento - (9.5) - (2.7) 2.9 - Contigo 3.9 1.7 - 10.5 (28.5) - Bluestream (1.8) 0.2 - (5.4) 0.1 - Resuelve 29.8 (5.3) - (6.8) (5.3) 28.1 Other 20.3 (9.4) - 38.2 0.8 - Total 71.8 3.3 - 77.1 63.2 22.1

Non-controlling participation posted Ps. (8.5) million in 4Q20, compared to Ps. (37.8) million in 4Q19. This figure reflects the participation in profits that corresponds to minority shareholders in Crédito Real’s subsidiaries for their equity participation.

Non-controlling participation

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Instacredit (27.8) (38.5) (27.7) (153.5) (119.0) 29.0 Crédito Real USA (8.2) 0.6 - (29.6) (8.6) - CREAL Arrendamiento 28.3 - - 76.1 - - Other (0.7) 0.1 - 44.9 7.1 - Total (8.5) (37.8) (77.6) (62.1) (120.5) (48.5)

Net income totaled Ps. 115.3 million, compared to Ps. 427.2 million in 4Q19. This variation is primarily attributed to the combined effect of a softened economic dynamism and the measures taken during the quarter to cope with the COVID-19 pandemic in all our businesses, highlighting the deployment of Relief Programs, creation of additional provisions for credit losses and adoption of stricter origination standards.

45.6%

58.7%

43.9%

54.9%

4Q19 4Q20 2019 2020

Page 11: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Nevertheless, it is important to mention that the Company remains generating net income in all regions where it operates, driven by the timely implementation of the required measures to address this unprecedented situation, allowing us to further strengthen our liquidity and capitalization over the following periods.

Balance Sheet

Cash and investment in securities balance amounted Ps. 2,269.6 million, maintaining a strong liquidity position at the end of the year. Total portfolio reached Ps. 51,344.1 million at the end of 4Q20, up 9.0% compared to Ps. 47,121.2 million at the end of 4Q19. This line comprises the total leasing and factoring portfolios (that are recorded in fixed assets and other accounts receivable, respectively) which are included in the SMEs portfolio.

Total portfolio by business (Ps. million)

Non-performing loan portfolio over loan portfolio stood at 1.8%, equivalent to Ps. 872.3 million as of 4Q20, compared to 1.3% or Ps. 632.7 million as of 4Q19. This outcome reflects the impact that the ongoing COVID-19 outbreak has had in our operation, resulting in an overall annual drop in collection levels. Nevertheless, it is relevant to underscore that, over the past couple of months, this metric has been posting a steady sequential recovery virtually at all segments (except for SMEs).

59.9% 57.3%

20.2%23.6%

7.5%7.6%10.4%9.7%1.9%1.8%

4Q19 4Q20

Payroll SMEs Used Cars Personal Other

Ps. 51,344.1Ps. 47,121.2

YoY Growth: 9.0%

Page 12: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Non-performing loan by business

Allowance for loan losses was Ps. 1,965.2 million in 4Q20, a 225.3% coverage ratio (allowance for loan losses as a percentage of total past-due loan portfolio), compared to Ps. 1,390.0 million, or 219.7% coverage ratio reported in 4Q19. It is relevant to highlight that Crédito Real’s current coverage ratio is adequate to account for potential loan losses in the short- and long-term.

Coverage Ratio

Other accounts receivable increased to Ps. 8,678.0 million as of 4Q20, from Ps. 6,634.1 million posted in the same period last year. This item mainly includes: i) the income paid in advance to payroll distributors; and, ii) the risk-joint responsibility in accordance with commercial agreements.

Other accounts receivable

Ps. million 4Q20 4Q19 (%) Var. 3Q20 (%) Var. Income paid in advance to distributors 3,377.1 2,427.4 39.1 3,186.9 6.0 Interest accrued in advanced period 403.2 667.5 (39.6) 392.1 2.8 Risk-joint responsibility of the distributor 1,540.5 1,242.0 24.0 1,354.1 13.8 Borrowings to distributors 266.8 672.1 (60.3) 233.0 14.5 Other accounts receivables from subsidiaries 1,578.6 531.2 - 562.4 - Other debtors 877.7 719.1 22.1 1,153.3 (23.9) Value added tax (VAT) receivable 372.2 35.4 - 905.3 (58.9) Recoverable income tax 261.8 339.4 (22.9) 178.2 46.9 Total 8,678.0 6,634.1 30.8 7,965.3 8.9

1.0%0.4%

1.2%

4.8%

2.9%

1.3%1.7%

0.8% 0.9%

5.1%

3.2%

1.8%

Payroll SMEs Used Cars Personal Others Consolidated

4Q19 4Q20

219.7% 225.3%

4Q19 4Q20

Page 13: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Foreclosed assets (net) amounted to Ps. 1,379.2 million at the end of 4Q20. This line includes the assets received in lieu of payment upon calling on loan guarantees. Total assets accounted to Ps. 70,511.7 million at the end of 4Q20, an increase of 14.5% over the Ps. 61,591.7 million registered at the end of 4Q19. This increase was mainly driven by the total portfolio expansion and mark-to-market valuation effects of a weaker Mexican peso on the Company’s derivative financial instruments.

Total debt amounted Ps. 49,853.7 million as of 4Q20, an increase of 20.1% compared to Ps. 41,511.2 million as of 4Q19. During the quarter, the share of fixed-rate debt represented 61.1% of the total consolidated debt.

Debt by type Debt by currency1 Debt Secured vs. Unsecured

(1) The Company is not exposed to exchange rate volatility, since 91% of its foreign currency debt is hedged with derivatives

(mainly cross currency swaps) and the remaining 9% is naturally hedged by its international businesses.

Debt amortization schedule (Ps. millions)1

(1) All the figures represent only the nominal amounts and exclude accrued interests and mark-to-market of hedges. Debt converted

using USD 1 / Ps 19.9087 as of December 31, 2020. (2) On January 22, 2021, Crédito Real issued US$500 million Senior Notes due 2028, with an 8.00% semi-annual coupon, repaying

US$177.1 million out of US$426.9 million of the 2023 Senior Notes and US$50 million from a Barclays facility

$4,576$7,754

$3,405

$13,107$4,783 $2,552

$530

$308

$494$250

$208

$4,306

$7,807

$995

$3,526

$9,954

2021 2022 2023 2024 2026 2027 2028Senior Notes Swiss Bond Credit Lines Securitization Subordinated Notes Euro Bond Column2

2

SN 20282

2

59% 56%

31% 36%

7% 7%3% 2%

4Q19 4Q20

Securitization Development BankCredit Lines Senior Notes

Ps. 49,853.7 Ps. 41,511.2

53% 54%

22% 23%

17% 16%8% 7%

1%

4Q19 4Q20

USD MXN EURCHF PEN

Ps. 49,853.7 Ps. 41,511.2

76% 73%

24% 27%

4Q19 4Q20

Unsecured

Secured

Ps. 49,853.7 Ps. 41,511.2

Page 14: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Total liabilities reached Ps. 54,304.5 million at the end of 4Q20, a 19.3% increase from the Ps. 45,527.8 million posted in 4Q19. While the weighted average duration of liabilities was 2.9 years, compared to 1.5 years for the weighted average duration of assets. Stockholders’ equity climbed to Ps. 16,207.2 million in 4Q20, from Ps. 16,063.9 million at the end of 4Q19, a 0.9% year-over-year increase, primarily reflecting the expansion of the Total portfolio as well as the increase in retained earnings, which follows the growth path we had been able to build on prior to, and in spite of the pandemic.

Capitalization Ratio

Shareholders Structure

34.1%31.6%

4Q19 4Q20

31.7%

68.3%

Founding familiesFloating shares

369,208,913 Total outstanding shares

Page 15: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Operational Summary Payroll

Subsidiaries:

Geographic Footprint:

97.2% 2.8%

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Origination 1,056.4 1,409.9 (25.1) 4,673.8 5,528.5 (15.5) Total Income 1,266.8 1,801.0 (29.7) 5,057.0 6,989.3 (27.6) Provisions 157.6 54.5 - 492.4 273.9 79.8 Total Portfolio 29,402.8 28,242.3 4.1 NPL 1.7% 1.0% 0.7 Customers 455,858 432,173 5.5 Average Loan 64,500 65,350 Average Interest Rate 56.9% 55.0%

4Q20 Payroll portfolio by entity

4Q20 Payroll portfolio by sector

4Q20 Payroll portfolio by region

Outlook Over the following periods, we expect payroll's origination dynamics to recover the traction lost during the pandemic (recalling that it remains affected by the constrained canvassing activities given lockdown measures implemented during the quarter), favored, among other factors, by the incremental contribution of the strategic alliance with Grupo Famsa, which is nearing the origination levels posted by Credifiel.

87%

13%

FederalState

30%

32%

18%

8%4% 4%3%

<1%

Federal Education IMSSGovernment HealthEducation Ministry State EducationNon-centralized Agencies Other

32%

11%6%9%

5%4%

4%

29%

Centralized Origination VeracruzOaxaca State of MexicoMexico City ChiapasGuerrero Other 26 States

57.3%

Page 16: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Small and Medium-sized Enterprises

Subsidiaries: Geographic Footprint:

90.2% 9.8%

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Origination 2,752.3 4,802.4 (42.7) 14,097.6 12,064.5 16.9 Total Income 814.4 609.1 33.7 2,281.7 1,868.6 22.1 Provisions 162.9 95.8 70.0 359.4 157.9 - Total Portfolio 12,112.8 9,528.0 27.1 NPL 0.8% 0.4% 0.4 Customers 3,436 2,930 17.3 Average Loan 3,525,271 3,251,865 Average Interest Rate 23.2% 22.8%

4Q20 SMEs Mexico

4Q20 SMEs USA

Outlook In Mexico, quarterly origination decreased both on an annual and sequential basis, largely as a result of a more restricted credit granting (whose effectiveness became evident in the sub-1% NPL ratio posted), arising from the strategic decision to limit our exposure to the assets most at risk from the effects of the pandemic and to focus our efforts on the most profitable ones.

Following the same trends, although U.S. operations were supported by stronger economic dynamics, the readjustment of credit profiling, to filter out the industries hit the hardest by the pandemic, weighted on origination over 4Q20. However, it should be noted that collection levels are still stable, as shown by the NPL ratio of 1.1%.

32.9%

34.7%

26.0%

6.3%

SMEs Traditional Credit loans

Leasing Factoring

92.3%

7.7%

Credit loans Factoring

NPL Ratio: 0.7%

NPL Ratio: 1.1%

23.6%

Page 17: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Used Cars

Subsidiaries: Geographic Footprint:

35.3% 64.7%

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Origination 820.4 863.3 (5.0) 2,427.6 3,167.7 (23.4) Total Income 248.0 229.9 7.9 1,003.4 820.6 22.3 Provisions 75.5 11.0 - 425.7 93.3 - Total Portfolio 3,907.4 3,537.1 10.5 NPL 0.9% 1.2% (0.4) Customers 23,389 21,440 9.1 Average Loan 167,062 164,975 Average Interest Rate 28.8% 28.9%

4Q20 Used Cars Portfolio

Outlook Despite Used Cars MX's softer origination activity, as asset quality has been prioritized over loan volume, the delinquency recorded in this portfolio (indicated by an NPL ratio of 1%) and the solid collection levels (reaching a new all-time high in December) attest the success of this strict risk control.

In Used Cars USA, 4Q20 origination reached pre-pandemic levels, given that the strong demand (partly fueled by the government’s stimulus packages) more than offset the effect of the tighter lending policies now in place that seek to incorporate customers with more attractive credit profiles (resulting in a sub-1% NPL ratio).

35.3%

64.7%

Mexico United States

NPL Ratio:

MX 1.0%

USA 0.8%

7.6%

Page 18: EARNINGS RELEASE 4Q20 - investor cloud

EARNINGS RELEASE 4Q20

Personal

Subsidiaries: Geographic Footprint:

74.4% 13.0% 12.6%

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Origination 848.8 807.1 5.2 2,817.3 3,312.8 (15.0) Total Income 579.9 777.3 (25.4) 2,781.9 2,881.2 (3.4) Provisions 172.3 178.9 (3.7) 662.8 731.9 (9.4) Total Portfolio 4,994.7 4,918.0 1.6 NPL 5.1% 4.8% 0.3 Customers 153,259 172,628 (11.2) Average Loan 32,590 28,489 Average Interest Rate 54.4% 56.7%

4Q20 Personal loans portfolio

(1) All granted loans are secured personal loans.

Outlook During the quarter, Instacredit leveraged on the efficiencies achieved through its restructuring process back in 2019, as well as the stable NPL ratio (standing at 5.1% in 4Q20 vs. 4.8% in 4Q19), to post an outstanding profitability at the end of 2020.

Regarding performance by country: i) In Nicaragua, operations were practically unaffected, since no lockdowns were imposed by the Nicaraguan government; ii) along the same lines, Costa Rica closed the year on a positive note, thanks to an increased economic dynamism, amidst an environment no longer marked by the implementation of COVID-19 restrictions since mid-3Q20; and, iii) Panama operations were impacted by the grace period imposed by the federal government on loans granted by banks and financial institutions.

62% 64% 56% 58%

23% 21%25%

35%

13% 13% 19%6%2% 2%

Instacredit Costa Rica Nicaragua Panama

Home Equity (1) Small Business (1) Used Cars (1) Personal

9.7%

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Other

Subsidiaries: Geographic Footprint:

100.0%

Ps. million 4Q20 4Q19 (%) Var. 2020 2019 (%) Var. Origination 2,005.2 1,748.9 14.7 7,438.3 6,647.0 11.9 Total Income 24.2 27.4 (11.6) 86.9 98.3 (11.6) Provisions 10.3 (11.0) - 13.4 (49.8) - Total Portfolio 926.4 895.9 3.4 NPL 3.2% 2.9% 0.3 Customers 294,565 287,149 2.6 Average Loan 3,145 3,120 Average Interest Rate 83.5% 97.0%

4Q20 Portfolio composition

32.7%

37.1%

30.2%

Durable goods Group loans Consumer Loans GFamsa

1.8%

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ANNEXES

Consolidated Financial Statements

Consolidated income statement

Ps. million 4Q20 4Q19 (%) Var.

4Q19 Proforma

4Q20 (million

US dollars)1

2020 2019 (%) Var.

2019 Proforma

2020 (million

US dollars)1

Interest income 2,589.7 3,293.0 (21.4) 3,059.8 130.1 10,205.2 11,933.0 (14.5) 11,567.4 512.6 Interest expense (1,207.1) (1,310.9) (7.9) (1,214.0) (60.6) (4,576.1) (4,671.1) (2.0) (4,649.9) (229.9) Financial margin 1,382.7 1,982.0 (30.2) 1,845.8 69.5 5,629.2 7,261.9 (22.5) 6,917.5 282.7 Net provision for loan losses (558.0) (351.3) 58.9 (349.9) (28.0) (1,926.8) (1,306.6) 47.5 (1,300.8) (96.8)

Risk-adjusted margin 824.6 1,630.8 (49.4) 1,495.9 41.4 3,702.3 5,955.2 (37.8) 5,616.7 186.0

Commissions and fees collected

21.7 104.1 (79.1) 195.3 1.1 137.3 515.7 (73.4) 694.3 6.9

Commissions and fees paid (65.5) (110.3) (40.7) (110.3) (3.3) (247.3) (373.4) (33.8) (373.4) (12.4)

Intermediation income (110.8) (42.1) - (42.1) (5.6) (79.1) 156.2 - 156.2 (4.0)

Other income from operations 364.9 37.1 - 307.8 18.3 1,067.3 126.7 - 983.1 53.6

Administrative and promotion expenses

(860.4) (971.6) (11.4) (1,015.3) (43.2) (3,212.7) (3,607.1) (10.9) (3,725.1) (161.4)

Depreciation expense (192.5) - - (152.7) (9.7) (527.1) - - (444.3) (26.5)

Operating result (18.0) 647.8 - 678.6 (0.9) 840.6 2,773.3 (69.7) 2,907.5 42.2 Income taxes 70.0 (186.0) - (194.1) 3.5 (104.6) (735.9) (85.5) (779.7) (5.3) Income before participation in the results of subsidiaries

51.9 461.8 (88.8) 484.5 2.6 735.9 2,037.4 (63.9) 2,127.8 37.0

Participation in the results of subsidiaries, associates and non-controlling participation

63.4 (34.5) - (20.1) 3.2 15.0 (57.3) - (61.7) 0.8

Net income 115.3 427.2 (73.0) 464.4 5.8 751.0 1,980.1 (62.1) 2,066.1 37.7

(1) Figures expressed are converted at the period-end exchange rate $19.9087, for illustrative purposes.

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Consolidated balance sheet

Ps. million 2020 2019 (%) Var. 2019 Proforma

2020 (million US

dollars)1 Cash and cash equivalents 1,097.4 1,180.9 (7.1) 1,211.1 55.1 Investments in securities 1,172.2 1,294.4 (9.4) 1,365.4 58.9 Securities and derivatives transactions 1,964.5 - - - 98.7 Total performing loan portfolio 46,847.3 46,325.7 1.1 43,507.2 2,353.1 Total non-performing loan portfolio 872.3 632.7 37.9 632.7 43.8 Loan portfolio 47,719.6 46,958.4 1.6 44,139.9 2,396.9 Less: allowance for loan losses 1,965.2 1,390.0 41.4 1,405.9 98.7 Loan portfolio (net) 45,754.4 45,568.4 0.4 42,734.0 2,298.2 Factoring Loan Portfolio 783.4 162.8 - 1,519.0 39.3 Other accounts receivable (net) 8,678.0 6,634.1 30.8 5,518.5 435.9 Foreclosed assets (net) 1,379.2 10.8 - 10.8 69.3 Property, furniture and fixtures (net) 3,232.3 625.3 - 3,509.9 162.4 Long-term investments in shares 1,244.3 1,273.6 (2.3) 1,197.5 62.5 Debt insurance costs, intangibles and others 5,206.0 4,841.5 7.5 4,847.7 261.5 Total assets 70,511.7 61,591.7 14.5 61,913.9 3,541.8 Notes payable 761.0 1,261.0 (39.7) 1,261.0 38.2 Senior Notes payable 27,733.4 24,636.7 12.6 24,636.7 1,393.0 Bank loans and borrowings from other entities Short-term 13,780.3 7,597.6 81.4 7,597.6 692.2 Long-term 7,578.9 8,015.9 (5.5) 8,015.9 380.7 Total Bank loans 21,359.3 15,613.5 36.8 15,613.5 1,072.9 Total debt 49,853.7 41,511.2 20.1 41,511.2 2,504.1 Income taxes payable 353.9 330.5 7.1 384.9 17.8 Securities and derivatives transactions 619.7 765.3 (19.0) 765.3 31.1 Other accounts payable 1,691.2 810.2 - 1,227.1 84.9 Deferred taxes 1,786.0 2,110.6 (15.4) 1,849.6 89.7 Total liabilities 54,304.5 45,527.8 19.3 45,738.1 2,727.7 Capital stock 1,649.5 1,852.4 (11.0) 1,852.4 82.9 Perpetual notes 4,206.7 4,206.7 - 4,206.7 211.3 Retained earnings 9,527.8 7,778.3 22.5 7,778.3 478.6 Result from valuation of cash flow hedges, net (1,054.0) (708.2) 48.8 (708.2) (52.9) Cumulative translation adjustment 72.1 5.5 - 5.5 3.6 Controlling position in subsidiaries 1,054.2 949.1 11.1 975.0 53.0 Net income 751.0 1,980.1 (62.1) 2,066.1 37.7 Total stockholders' equity 16,207.2 16,063.9 0.9 16,175.8 814.1 Total liabilities and stockholders' equity 70,511.7 61,591.7 14.5 61,913.9 3,541.8

(1) Figures expressed are converted at the period-end exchange rate $19.9087, for illustrative purposes.

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Consolidated financial ratios

4Q20 4Q19 (%) Var. 4Q19 Proforma

2020 2019 (%) Var. 2019 Proforma

Total Yield1 22.6% - - 30.4% 21.8% - - 29.9% Yield 21.5% 29.1% (7.6) 28.7% 21.1% 28.1% (7.0) 28.8% Net interest margin 11.5% 17.5% (6.0) 17.3% 11.7% 17.1% (5.4) 17.2% Return on average loan portfolio 1.0% 3.8% (2.8) 4.4% 1.6% 4.7% (3.1) 5.1% ROAA: return on average assets 0.6% 2.9% (2.3) 3.1% 1.0% 3.6% (2.5) 3.7% ROAE: return on average stockholders’ equity 2.7% 10.5% (7.8) 11.3% 4.2% 12.3% (8.0) 12.8%

ROAE: return on average stockholders’ equity (excluding Perpetual Notes)

3.6% 14.2% (10.6) 15.3% 5.5% 16.6% (11.1) 17.2%

Debt-to-equity ratio 3.1x 2.6x 0.5 2.6x 3.1x 2.6x 0.5 2.6x Debt-to-equity ratio (excluding Perpetual Notes) 4.2x 3.5x 0.7 3.5x 4.2x 3.5x 0.7 3.5x

Average cost of funds 9.4% 13.3% (3.8) 12.3% 8.9% 12.8% (3.9) 12.8% Efficiency ratio2 58.7% 45.6% 13.1 52.6% 54.9% 43.9% 10.9 51.5% Capitalization ratio3 31.6% 34.1% (2.5) 34.3% 31.6% 34.1% (2.5) 34.3% Capitalization ratio (excluding Perpetual Notes) 25.1% 25.3% (0.1) 27.1% 25.1% 25.3% (0.1) 27.1%

Provisions for loan losses as a percentage of loan portfolio 4.7% 3.0% 1.7 3.1% 4.0% 2.8% 1.3 2.8%

Allowance for loan losses as a percentage of past-due loan portfolio

225.3% 219.7% 5.6 222.2% 225.3% 219.7% 5.6 222.2%

Total past-due loan portfolio as a percentage of loan portfolio 1.8% 1.3% 0.5 1.4% 1.8% 1.3% 0.5 1.4%

(1) Annualized total income (interest income + Commissions charged + Other Income from Operations) / Annualized total portfolio. (2) Annualized administrative expenses + Commissions and fees paid – Depreciation expense / Financial margin + commissions

charged + other income from operations – Depreciation expense. (3) Stockholders' equity / Total portfolio.

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Breakdown by region

Financial Summary

Summary of Operations

4Q20 4Q19

Portfolio1 % Customers NPL's Average Loan

Portfolio1 % Customers NPL's Average Loan (%) Var. Portfolio

Mexico Payroll 29,402.8 57.3% 455,858 1.7% 64,500 28,242.3 59.9% 432,173 1.0% 65,350 4.1 SMEs2 10,931.3 21.3% 628 0.7%5 17,406,548 7,419.7 15.7% 730 0.5%5 10,163,918 47.3 Used Cars 1,381.0 2.7% 12,614 1.0% 109,483 1,401.0 3.0% 11,360 1.0% 123,330 (1.4) Others3 926.4 1.8% 294,565 3.2% 3,145 895.9 1.9% 287,149 2.9% 3,120 3.4 Central America Instacredit 4,994.7 9.7% 153,259 5.1% 32,590 4,918.0 10.4% 172,628 4.8% 28,489 1.6 USA Used Cars 2,526.4 4.9% 10,775 0.8% 234,469 2,136.0 4.5% 10,080 1.3% 211,907 18.3 SMEs4 1,181.5 2.3% 2,808 1.1%5 420,769 2,108.3 4.5% 2,200 0.3%5 958,320 (44.0)

Total 51,344.1 100.0% 930,507 1.8%5 55,179 47,121.2 100.0% 916,320 1.3%5 51,424 9.0

(1) Figures are expressed in millions. (2) Integrated by SMEs traditional and CRA and includes Ps.2,841.2 million of leasing and Ps.692.8 million factoring registered in

fixed assets and other accounts receivable, respectively. (3) Integrates by Group Loans and Durable Goods. Includes strategic alliances. (4) Includes Ps. 90.5 million in 4Q20 and Ps. 162.8 million in 4Q19 of factoring US registered in other accounts receivable. (5) Related to loan portfolio which excludes the leasing and factoring portfolios previously detailed.

Ps. million 4Q20 4Q19 (%) Var. 4Q19 Proforma 2020 2019 (%) Var. 2019

Proforma Interest income 2,589.7 3,293.0 (21.4) 3,059.8 10,205.2 11,933.0 (14.5) 11,567.4 Mexico 1,748.0 2,206.7 (20.8) 1,973.6 6,264.7 8,239.5 (24.0) 7,874.0 Central America 579.5 809.2 (28.4) 809.2 2,864.0 2,992.6 (4.3) 2,992.6 United States 262.3 277.1 (5.3) 277.1 1,076.5 700.8 53.6 700.8 Financial margin 1,382.7 1,982.0 (30.2) 1,845.8 5,629.2 7,261.9 (22.5) 6,917.5 Mexico 631.3 1,046.0 (39.6) 909.8 2,312.3 4,233.1 (45.4) 3,888.7 Central America 535.2 666.8 (19.7) 666.8 2,467.8 2,499.0 (1.2) 2,499.0 United States 216.2 269.2 (19.7) 269.2 849.0 529.8 60.3 529.8 Net income 115.3 427.2 (73.0) 464.4 751.0 1,980.1 (62.1) 2,066.1 Mexico 17.4 300.1 (94.2) 337.2 351.6 1,574.8 (77.7) 1,660.8 Central America 13.8 109.7 (87.4) 109.7 283.0 351.5 (19.5) 351.5 United States 84.1 17.4 - 17.4 116.3 53.8 - 53.8

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Derivative Financial Instruments Due to the revaluation of the foreign currency-denominated debt and the position in derivatives to hedge foreign exchange risks, in 4Q20, the company registered a Ps. 1,054.0 million loss in stockholders' equity, recorded as result from valuation of cash flows hedges.

4Q20 Financial derivative instruments summary

Hedged Liability Type (%) of Total Average Rate MtM1 Senior Notes 2027 Swaps strategy 18.9% 11.3% 317.3 Senior Notes 2026 Cross Currency Swap 16.5% 15.8% 41.6 Senior Notes 2023 Cross Currency Swap; Interest

Rate Swaps; Participating Swap 23.1% 12.2% 767.0

Perpetual Notes Cross Currency Swap 12.4% 8.1% 201.8 Swiss Bond Cross Currency Swap;

Participating Swap 9.8% 10.9% 407.6

Credit Line 1 Cross Currency Swap 1.5% 11.8% 1.7 Credit Line 2 Cross Currency Swap 1.6% 11.0% (44.3) Credit Line 3 Cross Currency Swap 3.4% 9.1% (18.3) Credit Line 4 Cross Currency Swap 6.2% 11.0% (15.8) Credit Line 5 Cross Currency Swap 3.1% 9.6% (103.5) Credit Line 6 Cross Currency Swap 3.5% 9.3% (210.2) Credit Line 7 CAP 0.0% 6.8% 0.0 Securitization CAP 0.0% 9.5% 0.0 Total 100.0% 1,344.7

(1) Ps. million

Credit Ratings

Credit ratings

Standard & Poor’s Fitch Ratings HR Ratings Japan Credit Rating

Global Scale Long-term (IDR) BB BB+ BBB- National Issuances Long-term (rating) mxA A+(mex) HR AA-

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Explanatory Notes Annual Financial Statements. The consolidated financial statements presented as of December 31, 2019 in this release have been audited. Capitalization ratio. Stockholders' equity / Total portfolio. Commissions and fees collected includes revenues from CRA’s factoring portfolio. Commissions and fees paid reflects the commissions paid for debt issuances. Cost of risk. Annualized provision for loan losses / Loan portfolio. Coverage ratio. Allowance for loan losses / Past-due loan portfolio. Efficiency ratio. Annualized administrative expenses + commissions and fees paid – depreciation expense / (Financial margin + commissions and fees charged + other income from operations) – depreciation expense. Exchange rate. The exchange rate for MXN peso and USD dollar for the mentioned dates were the following:

Exchange rate

Date Exchange rate Balance Sheet

December 31, 2019 18.8642 December 31, 2020 19.9087

Profit & Loss 4Q19 (average) 19.2579 4Q20 (average) 20.5467 2019 (average) 19.2574 2020 (average) 21.4976

Factoring portfolio includes CRA’s and the United States’ factoring portfolios. Fixed assets mainly reflect CRA’s leasing portfolio. Interim Consolidated Condensed Financial Statements. The figures for the full-year period ending as of December 31, 2020 presented in this release have not been audited. Intermediation income includes the result and valuation of derivative financial instruments. Leverage ratio. Total debt / Stockholders’ equity.

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Loan Portfolio. Current loan portfolio + Past-due loan portfolio. NIM. Annualized financial Margin / Annualized loan portfolio. Non-performing loan ratio. Past-due loan portfolio / Loan portfolio. Other accounts receivable mainly includes the income paid in advance to payroll distributors and, the risk-joint responsibility in accordance with commercial agreements. Other income from operations mainly includes revenue from the leasing business in the United States and the revenue from CRA’s leasing portfolio that jointly amounted Ps. 321.8 million at quarter-end. Past-due loan portfolio. Past-due loan portfolio between 91 and 180 days. Previous period. Unless otherwise noted, comparisons of operating and financial figures are made against figures for the same period of the previous year. Return on Average Assets “ROAA”. Annualized consolidated net income / Total assets average. Return on Average Stockholders’ Equity “ROAE”. Annualized consolidated net income / Stockholders' equity average. The percentages may vary due to rounding. Total income. Interest income + commissions charged + other income from operations. Total portfolio. Loan portfolio + factoring portfolio + leasing portfolio. Total Yield. Annualized total income (interest income + Commissions charged + Other Income from Operations) / Annualized total portfolio. Yield. Annualized Interest income / Annualized total portfolio.

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Analyst Coverage

Analyst coverage

Institution Analyst Mail Fixed income

Bank of America Nicolás Riva [email protected]

Credit Suisse Jamie Nicholson [email protected]

Debtwire Jonathan Szwarc [email protected]

JP Morgan Natalia Corfield [email protected] Mizuho Group John Haugh [email protected]

Equity

Bank of America Ernesto Gabilondo [email protected]

Banorte Marissa Garza [email protected]

Barclays Gilberto García [email protected]

BBVA Rodrigo Ortega [email protected]

GBM Natalia Zamora [email protected]

Intercam Alejandro González [email protected]

Ve por Más Eduardo López [email protected] Rating Agencies

Standard & Poor’s Erick Rubio [email protected]

Fitch Ratings Bertha Pérez [email protected]

HR Ratings Ángel García [email protected]

Japan Credit Rating Shinichi Endo [email protected]

About Crédito Real, S.A.B. de C.V., SOFOM, E.N.R.

Crédito Real is a leading specialty finance company in Mexico with a growing presence in the United States and in Central America that, for over 26 years, has devoted itself to provide innovative financial solutions, tailored to the needs of the low- and middle-income segments of the population that are generally underserved by the traditional banking system – all this, through a solid, scalable and well-diversified platform that includes the following main lines of business: payroll loans, small business loans, used car loans and consumer loans. Crédito Real shares are listed on the Mexican Stock Exchange under the ticker symbol and series “CREAL*”. (Bloomberg identification number is CREAL* MM).

This document may contain certain forward-looking statements. These statements are non-historical facts, and they are based on the current vision of the Management of Crédito Real, S.A.B. de C.V., SOFOM, E.N.R. for future economic circumstances, the conditions of the industry, the performance of the Company and its financial results. The terms "anticipated", "believe", "estimate", "expect", "plan" and other similar terms related to the Company, are solely intended to identify estimates or predictions. The statements relating to the declaration or the payment of dividends, the implementation of the main operational and financial strategies and plans of investment of equity, the direction of future operations and the factors or trends that affect the financial condition, the liquidity or the operating results of the Company are examples of such statements. Such statements reflect the current expectations of the management and are subject to various risks and uncertainties. There is no guarantee that the expected events, trends or results will occur. The statements are based on several suppositions and factors, including economic general conditions and market conditions, industry conditions and various factors of operation. Any change in such assumptions or factors may cause the actual results to differ from expectations.