gfnorte 3q11 results · 2011. 11. 23. · 3q11 results conference call october 28, 2011. 2 material...

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GFNORTE 3Q11 Results Conference Call October 28, 2011.

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Page 1: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

GFNORTE

3Q11 Results

Conference Call October 28, 2011.

Page 2: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

2

Material Events

On October 17th, the Extraordinary and Ordinary Shareholders’ Meetings were held.

The most important resolutions adopted were:

Changes to the Dividend Policy, with a payout of the recurring net income as

follows:

• 16% if it grows between 0% and 10%.

• 18% if it grows between 11% and 20%.

• 20% if it grows more than 21%.

Payment of a cash dividend of Ps. 0.17 per share, being the first of three

payments for a total of Ps. 0.52 per share, which was paid on October 24.

The increase of the amount of the Share Repurchase Fund to Ps. 1.85 billion.

Page 3: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

3

Material Events

In October, GFNorte informed about its participation in the debt refinancing of the

states of Coahuila, Aguascalientes and Sonora. The total amount of the refinanced

debt with these three States amounts to Ps. $13.21 billion pesos, which represents

4% of the total Loan Portfolio of 3Q11. The main goal to refinance these liabilities

was to provide the States with better terms and financial conditions, which will

provide them with flexibility in the management of their fiscal resources.

The CNBV modified the methodology to rate federal and municipal entities’ loans.

This methodology rates and reserves the portfolio based on expected losses.

GFNorte applied the new methodology for Banorte’s Loan portfolio as of

September 30th 2011, resulting in a release of loan loss reserves amounting to

Ps 87 million pre-tax.

Page 4: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

On October 20, Banco Mercantil del Norte signed a purchase agreement to acquire

Prudential’s shareholdings in Afore XXI, as a result of the agreement held between

GFNorte and the Mexican Social Security Institute (IMSS) to merge their respective

Afores. This purchase agreement is still subject to meeting certain conditions and

the customary regulatory approvals.

In October, Banco Mercantil del Norte, exercised its option to redeem its Non

Convertible Subordinated Notes issued in 2006, due in 2016, in a principal amount of

US $400 million dollars, which were paid on October 13th, 2011. This prepayment

demonstrates Banorte’s financial strength in spite of recent weakness in other

banking systems and the volatile conditions in the international financial markets.

In September, Banorte signed a collaboration agreement with Banco Nacional del

Ejército Fuerza Aérea y Armada (Banjercito) that will allow its staff to have access to

Banorte’s infrastructure and several financial products.

Sergio García Robles Gil was appointed Corporate Managing Director, in charge of

the Regional Boards, and Rafael Arana de la Garza was appointed Chief Financial

Officer in his place.

Material Events

4

Page 5: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

5

Results 3Q11

Page 6: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

6

8.0%

3Q10

2.19

4.1%

1,711

47.71

1.2%

15.8%

21.75

2.2%

49.9%

Banorte: 1,940

Ixe: 202

W/out Ixe: 15% 28.0%

3Q11

1.39

4.0%

2,142

41.16

1.1%

12.6%

29.61

2.4%

53.9%

36%

(14%)

25%

Performing Loan Growth

P/BV

Net Interest Margin

Net Income

Stock Price (pesos)

ROA

ROE

Book Value per Share

Past Due Loan Ratio

Efficiency

Million Pesos

Yearly Recap GFNorte

Page 7: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

7

QoQ YoY Change

3Q10 3Q11

Service Fees

Recoveries

FX & Trading

Other Income (expenses)

Total Income

Non Interest Expense

Net Operating Income

Income Tax

Net Income

Provisions

Subs & Minority Interest

5,661 7,232 (2%)

2,949 3,564 20%

1,717 1,796 3%

260 260 (8%)

331 859 291%

642 649 (12%)

8,610 10,795 4%

(4,296) (5,814) (3%)

4,314 4,981 14%

(1,905) (1,650) 25%

(628) (888) 10%

(70) (302) 46%

1,711 2,142 5%

Million Pesos

Income Statement

2Q11

7,369

1,741

284

2,979

10,348

(5,965)

4,382

(810)

2,048

(1,318)

(207)

219

734

28%

21%

5%

0%

160%

1%

25%

35%

15%

(13%)

41%

329%

25%

Net Interest Income

Non Interest Income

Page 8: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

8

Quarterly Net Income

1,711 1,758 1,815

2,048

Million Pesos

3Q10 4Q10 1Q11 2Q11

5% 2,142*

3Q11

202

1,940

Ixe

Banorte

25%

*Net Income without restructuring charges was Ps 2.2 in 3Q11 and Ps 6.3 for 9M11.

171

1,877

Page 9: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

9

Net Interest Margin

Average

NIM

Average

TIIE

With

Repos

9M10

6.4%

9M11 9M10

4.9%

9M11

4.8% (0.1 pp)

4.1 %

(0.7 pp)

5.7%

4.1%

Page 10: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

3Q10 3Q11

10

Non Interest Expense Billion Pesos

EFFICIENCY RATIO

Non Interest Expense 4.3 5.8

Recurring Non Interest Expense 4.3 5.7

2Q11

6.0

5.7

QoQ YoY

35%

33%

49.9%

3Q10

53.9%

3Q11

57.6%

2Q11

52.9%

Recurring

3Q11

(3%)

(0.5%)

Page 11: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

11

Deposits

Billion Pesos

3Q11

171

115

286

60%

40%

100%

3Q09

59%

41%

100%

206

122

84

3Q10

60%

40%

100%

223

134

89

29%

30%

28%

Mix

Demand

Time

Deposits

Core Deposits

Demand

Time

w/out Ixe: +13%

6%

9%

8%

Page 12: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

12

QoQ

Change

YoY

Total 5 %

3Q11 2Q11 3Q10

Commercial 1%

Corporate 4%

Government 14%

Consumer 4 %

W/out Ixe

85

44

44

254

81

311

114

51

55

91

326

115

54

63

94

28%

35%

23%

42%

16%

5%

1%

2%

14%

4%

15%

7%

14%

34%

14%

Billion Pesos

2Q11 3Q11

326 311

3Q10

254

Performing Loan Portfolio

QoQ YoY

Page 13: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

13

Performing Consumer Loan Portfolio

Consumer 94

2Q11 3Q10 QoQ

Change YoY

3Q11

Card

Credit Card*

Payroll

Mortgage

9

11

12

62

91

9

11

11

60

8

11

8

81

54

4%

3%

2%

11%

3%

16%

14%

(1%)

52%

15%

Billion Pesos

2Q11 3Q11

94

3Q10

81

91

* Excludes the SOFOM’s portfolio

Page 14: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

14

Interbank

Loans

Demand

Time

Money

Markets

$377 Billion Pesos

FUNDING LOAN PORTFOLIO

$ 334 Billion Pesos

Funding and Loan Portfolio Structure

45%

31%

16%

8%

35%

19%

19%

17%

10%

Consumer

Corporate

Mortgage

Government

Commercial

Page 15: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

15

As part of the institutional efficiency strategy, 42 branches were merged during the

quarter, but 8 new branches were opened.

1,108 1,134

1,142 165

1,311

Ixe

Banorte

3Q10 4Q10 1Q11 2Q11 3Q11

165

1,277

15%

(3%)

1,146 1,112

Branches

Distribution Network

Page 16: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

16

6,222

4,846 5,004

5,014

1,000

6,014

6,019

203 Ixe

Banorte /

Cardtronics

27%

3Q10 4Q10 1Q11 2Q11 3Q11

6,176

5,974

202

(1%)

The decrease of 46 ATMs during the quarter is mainly due to the merger of 42 branches. In spite

of this, Banorte’s market share increased to 17% in 3Q11, becoming the second largest network.

Automated Teller Machines (ATM´s)

Distribution Network

Page 17: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

17

3Q10 4Q10

7%

1Q11 2Q11

79,885

54,369 58,336

62,856

57%

Ixe

Banorte

3Q11

85,229

6%

7%

12,331

67,554

13,087

72,142

Billing grows 28% YoY vs. 22% for the market.

Point of Sale Terminals (POS´s)

Distribution Network

Page 18: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

18

Asset Quality and Capitalization

Page 19: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

19

Asset Quality

COVERAGE RATIO PAST DUE LOAN

RATIO

133%

3Q11

2.4%

3Q11

136%

3Q10

2.2%

3Q10

2.4%

2Q11

135%

2Q11

Page 20: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

20

Past Due Loan Ratio

3Q10 4Q10 1Q11 2Q11

Payroll

Car Loans

Mortgage

Credit Cards

Commercial

Corporate

Government

9.3%

1.9%

1.4%

1.9%

4.1%

0.1%

0%

2.2%

8.5%

1.8%

1.0%

1.7%

3.9%

2.5%

0%

2.5%

9.1%

1.5%

0.8%

1.2%

4.1%

2.4%

0%

2.3%

3Q11

9.4%

1.8%

1.0%

1.4%

4.0%

2.4%

0%

2.4%

8.2%

1.8%

1.2%

1.7%

3.7%

2.2%

0.8%

2.4% GFNorte’s NPL Ratios

*Includes Ixe since 2Q11.

Page 21: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

21

Capitalization

Tier 1

Tier 2

TOTAL

% Tier 1

3Q10 4Q10 1Q11 2Q11

12.1%

4.5%

16.6%

73%

12.1%

4.0%

16.1%

75%

12.2%

3.9%

16.1%

76%

3Q11

11.7%

15.6%

11.9%

3.6%

15.5%

77% 75%

3.9%

Page 22: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

22

Subsidiaries

Page 23: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

23

Recovery Bank

Total

3Q10 YoY

Change 3Q11

Propietary Assets

Aquired Assets (4%)

10%

28.0

40.7

Total 25% 88.1

Managed Assets “Su Casita” - 6.5

Ixe Assests - - 6.3

Investment Projects 52% 6.5

29.1

36.9

4.3

70.3

-

9M11

610

9M10

534

AUM

BILLION PESOS

* Since May 2011, the business related to investment projects are managed by Wholesale Banking.

Net Income in Million Pesos *

Page 24: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

24

Long Term Savings

AFORE INSURANCE ANNUITIES

11

9M11

133

9M11 9M11

249

Total

9M10

156

9M10

1

9M10

184

9M10

341

9M11

393

1000%

(15%)

35%

ROE

29% ROE

20%

ROE

25%

ROE

20%

ROE

3%

Net Income in Million Pesos

15%

Page 25: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

25

Subsidiaries - Banorte

LEASING AND

FACTORING

465

9M11

333

9M10

ROE

27%

ROE

29%

40%

WAREHOUSING

32

9M11

ROE19%

40

9M10

ROE33% (19%)

Net Income in Million Pesos

9M10 9M11

BROKER DEALER

219 25%

ROE

15%

273

63

Banorte

Ixe

ROE

19%

Page 26: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

26

Inter National Bank

(17%)

9M10 9M11

Pre-Tax Net Income*

Provisions

Net Income

NIM

ROE

ROA

Efficiency

Total Deposits

Performing Loans

PDL Ratio USGAAP

Coverage Ratio USGAAP

0.1%

18.1 23.2

19.8 14.6

(0.8) 5.9

3.4% 3.2%

(0.3%) 2.0%

(0.1%) 0.4%

67.6% 61.5%

1,702 1,701

915 759

8.2% 4.5%

35.1% 61.7%

Million Dollars

* Income before Taxes and Provisions.

Page 27: GFNORTE 3Q11 Results · 2011. 11. 23. · 3Q11 Results Conference Call October 28, 2011. 2 Material Events ... 3Q10 3Q11 Service Fees Recoveries FX & Trading Other Income (expenses)

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