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1 GFNORTE 4Q03 Results. 2 Banorte continues gaining market share now as a national coverage bank Dec ‘96 Dec ‘01 Total Deposit Traditional Loans 156 2.3.

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Presentation on theme: "1 GFNORTE 4Q03 Results. 2 Banorte continues gaining market share now as a national coverage bank Dec ‘96 Dec ‘01 Total Deposit Traditional Loans 156 2.3."— Presentation transcript:

1 1 GFNORTE 4Q03 Results

2 2 Banorte continues gaining market share now as a national coverage bank Dec ‘96 Dec ‘01 Total Deposit Traditional Loans ° Dec ‘ Dec ‘01 BRANCHES AND EMPLOYEES States Branches MS% DEPOSITS: EXCLUDES FINANCIAL INTERMEDIARIES AND INCLUDES MUTUAL FUNDS AND SOURCE: ABM LOANS: INCLUDES FOBAPROA, IPAB CREDIT AND SOURCE: DEC ‘96 CNBV; DEC ‘01 AND SEP ‘03 A.B.M. BTE + BCR BTE 1, °4° BTE + BCR Banorte BANORTE BANCENTRO BANPAÍS BANCRECER Bank Emp 4,840 1, Dec ‘03 13,336 4° Dec ‘03 8,51615, ° 10° ° 6°6° ° 4°4° °5° 4°4° Total Loans ° 9.4 3° ° ° Non Interest Deposits 6.8 5° 5° ° °5° °4°

3 3 The client base and the distribution channels have experienced an important growth DISTRIBUTION CHANNELS CLIENTS : INCLUDES THE BANKING SECTOR AND THE BROKERAGE HOUSE. * INTERNET. **MILLIONS OF PHONE CALLS FOR THE PERIOD. CLIENTS (Thousands) ,900 2,324 ‘96‘97‘98‘99 2,818 ‘00‘01 4,678 4, ,865 Dec’03 Call Center** 20.6 POS 10,400 PC Banking 22,709 ATM 2,524 Branches 1,029 2, ‘96‘97‘98‘99‘00 ‘01 ‘02Dec’03 TRANSACTIONS PER DISTRIBUTION CHANNEL ATM BRANCHES POS TELEPHONE BANKING 3% 23% 6% PC BANKING & INTERNET 14% 54% % 9% 6% 3%

4 4 EXTRAORDINARY INCOME NOT INCLUDED IN GRAPH: 1997: PS 796, 1998 : PS 484, 2000: PS 245 AND 2002: PS 410. MILLIONS AS OF DECEMBER GFNorte’s Recurrent Income

5 5 GFNorte’s Objectives & Strategy Objectives Provide excellence in financial services Maximize shareholder value Strategy We have succeeded in building a national franchise through selective acquisitions. We will now focus on exploiting our leading market position by:  Improving our funding mix  Increasing Non Interest Income  Reducing Non Interest Expense, improving our efficiency ratio  Aggressively growing our credit portfolio, with strict credit risk policies  Further developing our asset recovery business  Multi-channel approach with a cross-sell focus

6 6 HIGHLIGHTS GFNORTE 1,685* 15.6% * % 76.0% 3.1% 118.0% 2, % % 20.4% 2.4% 121.7% NET INCOME IN MILLION PESOS AS OF 4Q03. EPS & BOOK VALUE ARE PESOS PER SHARE. BOOK VALUE EXCLUDES MINORITY HOLDINGS. EXCLUDES GENERALI EXTRAORDINARY INCOME OF Ps 410 millions. (1)EXCLUDES THE SHORT-TERM LOAN FOR Ps 6,761 MILLION GRANTED TO A FINANCIAL ENTITY OF THE FEDERAL GOVERNMENT IN DECEMBER BANKING SEGMENT Net Income Annualized ROE Stock Price EPS P/BV Capitalization Ratio Traditional loan growth (1) Past due loan ratio Reserve Coverage 31%53%

7 7 Profit composition NET INCOME BANKINGPs 1,79881% 8HOLDING0% 102BROKERAGE5% 217LONG TERM SAVINGS10% 93AUXILIARY ORGANIZATIONS4% Ps 2,219GFNORTE100% % 0% 4% 8% 4% 100% 85% 3% 2% 6% 4% 100% MILLION PESOS

8 8 Net Interest Margin Cete TIIE TYPE OF ASSET 3Q03 4Q03 Fobaproa / Ipab Notes85,5372.2%79, % Loan Portfolio64,5018.0%68, % VOL NIM VOL NIM Other (1) 42,6471.1%46, % Total192,6843.9%194, % (1): 4Q03 Includes: Deposits in Central Bank Ps 17,128 millions, Fixed Income Securities Ps 16,764 millions and in other banks Ps 12,990 millions. 5.1% 4.6% 8.4% 7.4% 9.6% 8.8% 6.8% 6.3% % 5.8%

9 9 Non Interest Income Recovery 875 Service 2,086 Trading 837 TOTAL 3, , ,991 MILLION PESOS AS OF 4Q03 39%27% 1, ,228 Service Fees

10 10 Service Fees  The Service Fee Income accumulated through the year rose by 6% vs as a result of the new clients that were attracted and which show the following rise in fee collecting: Credit Cards, 11%; Account Management fees, 7%; and Electronic Banking Services, 2%. Account Management Fees Fund Transfers 2003 vs 2002 Fiduciary NET FEES - SERVICES Credit Card Other Fees Net Electronic Banking (8%) % (3%) % % % 1,9652,0866% MILLION PESOS

11 11  The accumulated Non Interest Income from Recovery Banking increase an 18% due to the higher Serfin portfolio income and that of the Fobaproa portfolio. Recovery Fees II.- FOBAPROA FEES NET FEES – RECOVERY a. Serfin Loans (1) b. Other Portfolios Income - Expense % Income - Expense (1) COLLECTION RIGHTS. MILLION PESOS I.- LOAN PORTFOLIOS ACQUIRED vs

12 12 Recovery Bank AUM Composition AUM = ASSETS UNDER MANAGEMENT (*): FIGURES IN BILLION PESOS Proprietary Loans Acquired SERFIN IPAB 11% 7% 17% 29% 30% 29% 24% 42% 43% 40%

13 13 Non Interest Expense MILLION PESOS. (*) FOURTH QUARTER 2001 INCLUDES PROFORMA FOR BANCRECER VAT = VALUE ADDED TAX. AT 2002 VAT=PS 621 MILLIONS AND IPAB=PS 678 MILLIONS. AT 2003 VAT=PS 645 MILLIONS AND IPAB=PS 732 MILLIONS O&AE = OPERATION AND ADMINISTRATIVE EXPENSES INCLUDING IT. RENT, DEP. & AMORT. = RENT, DEPRECIATION & AMORTIZATION. 16% 9,195 9,362 PERSONNEL O&AE VAT & IPAB RENT,DEP & AMORT. =

14 14 EFFICIENCY RATIO INCLUDES TRADING. * AVERAGE FOR THE PERIOD.  Efficiency ratio has suffered after each acquisition, being Banorte able to return to adecuate efficiency levels in the following years.  After the acquisition of Bancrecer the efficiency ratio went up to 87%, coming down to an average for the year of 78% by Efficiency Ratio 1992 Efficiency Ratio Dec %66%93%78%105%78%87% 2003* 78%

15 15 Traditional Loan Portfolio TRADITIONAL LOAN PORTFOLIO 4Q023Q034Q03 QUARTER Commercial17,74320,11223, %29.8% Corporate14,57312,67111,859(6.4)%(18.6)% Mortgage10,83812,68113,5516.9%25.0% Automobile3,0894,6515,0228.0%62.6% Credit Card1,7292,5412, %63.6% Electronic Payroll Loans5831,0181, %108.2% Government Entities6,0548,9559,1472.1%51.1% Financial Entities3,545(*)3,7063,350(9.6)%(5.5)% TOTAL58,155(*)66,33870,0075.5%20.4% FIGURES = MILLION PESOS. TRADITIONAL LOAN PORTFOLIO DOES NOT INCLUDE NEITHER FOBAPROA / IPAB NOTES NOR RECOVERY BANK BUSINESS GOVERNMENT ENTITIES INCLUDES FEDERAL, STATE & MUNICIPALITIES FINANCIAL ENTITIES = INCLUDES GOVERNMENT AND PRIVATE FINANCIAL ENTITIES LIKE LEASING,FACTORING COMAPNIES AND OTHERS. (*) IT EXCLUDES THE SHORT-TERM LOAN FOR Ps 6,761 MILLION GRANTED TO A FINANCIAL ENTITY F THE FEDERAL GOVERNMENT IN DECEMBER VARIATION ANNUAL

16 16 Past Due Loans MORTGAGE CORPORATE COMMERCIAL AUTOMOBILE CREDIT CARD ELECTRONIC PAYROLL 4Q03 1, TOTAL 3,517 RECOVERY LOANS 804 TYPE OF LOAN PDL Ratio 0.8% 0.4% 0.3% 0.1% 2.4% 0.5% MILLION PESOS 3Q03 1, , PDL Ratio 0.8% 0.4% 0.3% 0.1% 2.3% 0.5%

17 17 Loans & Insurance allocation by quarter BANCRECERBANORTE NUMBER OF LOANS AND INSURANCE POLICIES. AUTOMOBILE ELECTRONIC PAYROLL LOANS MORTGAGE LIFE INSURANCE CAR INSURANCE 4Q021Q032Q033Q034Q03 32% 38% 68% 62% 8,287 9,929 43% 57% 9,894 41% 59% 10,729 42% 58% 10,486 4Q021Q032Q033Q034Q03 4Q021Q032Q033Q034Q03 19% 21% 81% 79% 1,737 1,397 35% 65% 1,867 28% 33% 72%67% 22,751 22,793 36% 64% 32,978 35% 65% 34,988 39% 61% 2,085 38% 62% 37,813 38% 62% 2,454 4Q021Q032Q033Q034Q03 4Q021Q032Q033Q03 4Q03 37% 42% 63% 58% 17,158 29,872 44% 56% 34,930 75% 63% 15,977 20,753 25% 37% 60% 19,446 40% 45% 55% 36,470 61% 19,317 39% 43% 57% 27,732 60% 21,812 40%

18 18 Fobaproa - IPAB After Banorte’s expansion strategy, the proportion of Fobaproa / IPAB notes has been reducing since Traditional Loan portfolio started to rise Traditional Loans BILLION PESOS AS OF DECEMBER NET OF FOBAPROA CHECKING ACCOUNT AND LOSS SHARING PROVISIONS. (1)SHORT TERM LOANS TO SOCIEDAD HIPOTECARIA FEDERAL. (2)SALE OF LOANS TO SOLIDA ADMINISTRADORA DE PORTAFOLIOS. Fobaproa / IPAB Notes Ps 6.7 (1) Ps 1.9 (2) % 71% 66% 59% 51%

19 19 Industry Growth Twelve month Traditional Loan Portfolio growth (*) (Excludes Fobaproa / IPAB) BANORTE BITAL SANTANDER SERFIN BANCOMER SCOTIA INVERLAT BANAMEX 17% - 2% -10% 1%1% 16% 20% (1) (*) FROM 4Q’02 TO 4Q’03. SOURCE: 4Q’03 QUARTERLY REPORTS, EXCEPT BANAMEX. (1)Excludes loans managed by the Recovery Banking unit and excludes the short-term loan for Ps 6,761 million granted to a financial entity of the Federal Government in December 2002.

20 20 Banorte’s Loan mix is shifting away from the Monterrey region Dec01 Dec03 Loans 27% 31% Branches 22% 23% Dec01 Dec03 Loans 12% 11% Branches 14% 13% Dec01 Dec03 Loans 6% 10% Branches 16% 16% Dec01 Dec03 Loans 39% 29% Branches 16% 17% Dec01 Dec03 Loans 4% 8% Branches 16% 16% MONTERREY NORTHEAST SOUTHEAST NORTHWEST Dec01 Dec03 Loans 11% 11% Branches 15% 16% WEST MEXICO CITY Dec01 Dec03 100% 100% NATIONAL SOURCE: ABM DOES NOT INCLUDES BANCRECER LOANS EXCLUDES IPAB AND FOBAPROA AND CENTRALIZED OPERATIONS. ……and concentrating more in Mexico City

21 21 Comparatives to the Industry 4Q’03 SOURCE OF ASSETS AND NUMBER OF BRANCHES: ABM SOURCE OF ROE AND CAPITALIZATION RATIO: PRESS RELEASE OF EACH BANK. INCLUDES MARKET AND CREDIT RISKS. RULES (1) CALCULATED FOR BANKING SECTOR (*) INFORMATION AS OF 3Q % 12.8% BanamexBanorte 10.2% Bital*Santander 15.1% 4° 5.5% Scotiabank*BanamexBanorteBitalSantanderBBVA- Bancomer Scotiabank 24.4% 15.1% 19.5% 13.6% 20.7% 5.6% BBVA- Bancomer 30.3% 4° 15.7% (1) 17.5% 29.9% SantanderBanamexGFNorte 15.5% (1) Bital* 24.4% Scotiabank* 3° ROE Group CAPITALIZATION RATIO 16.4% BBVA - Bancomer 12.4% Banamex 12.4% Scotiabank* BBVA- Bancomer 13.3% Banorte 12.7% 3°3° 14.7% Bital*Santander 11.6% ASSETSNUMBER OF BRANCHES

22 22 Tot. M.S. Branches Total Deposits $28, Total Loans $7, Market Share by Region TOTAL M.S. Branches 1, % Total Deposits $211, % Total Loans $148, % Tot. M.S. Branches Total Deposits $19, Total Loans $7, Tot. M.S. Branches Total Deposits $55, Total Loans$20, Tot. M.S. Branches Total Deposits $18, Total Loans $5, MONTERREY NORTHEAST SOUTHEAST NORTHWEST Tot. M.S. Branches Total Deposits $28, Total Loans $8, WEST MILLION PESOS. SOURCE: ABM M.S. MARKET SHARE. BRANCHES: INCLUDES BANKING MODULES AND EXCLUDES REMOTE COUNTERS; TOTAL DEPOSITS: INCLUDES CENTRALIZED OPERATIONS. TOTAL LOANS: INCLUDES IPAB AND FOBAPROA NOTES. Tot. M.S. Branches Total Deposits $59, Total Loans $21, MEXICO CITY 4° 3° 4° 3° 1° 2° 1° 5° 6° 5° 4° 5° 3° DECEMBER 2003

23 23 TENDENCY OF IPC, GFNORTE, GFB (Monthly) JAN ’02 – FEBRUARY 13th’04 IPC GFB 44% 20% GFNORTE 104%

24 24 Stock Performance Feb 13th 2004 STOCK PRICE19.1 GROWTH VS 2001 PS- USD- P / BV GFNORTE BBVA BANCOMER GFBanorte's P/BV Discount to GFBB's DAILY VOLUME (USD Million) % 17.5% % 66.4% (3)% % 83.2% (12)%(48)%(19)%

25 25 Dividends Payout ratio (1) 33% (1)Ps 500 millions / Net Income as of 2001 Ps 1,587.9 millions; Ps 353 millions / Net Income as of 2002 Ps 2,016.0 millions (2)$ 1 / Share Price as of Sep’ 2002 $ 22.99; $ 0.70 / Share Price as of Sep’ 2003 $ Dividend / Share Ps % Ps 0.7 Yield (2) 4.4% 2.1%

26 26 Outlook  Traditional Loan Portfolio growth:  Low Cost Deposit growth:  Asset Quality:  NIM:  Non Interest Income: - Service fees: - Recovery fees:  Capital Management: improving steadily improving slowly stable improving slowly stable cash dividend

27 27 GFNORTE 4Q03 Results


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