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GFNorte: 4Q05 Results February-2006
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Contents 2005 Results Snapshot of New Products Development of GFNorte’s share Final Remarks
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Results
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GFNorte Highlights 2004 2005 Net Income 2,697 5,719
MILLION PESOS 2004 2005 Net Income 2,697 5,719 112% Net Income w/o one offs 2,907 4,907 69% ROE 17.5% 30.8% ROE w/o one offs 18.9% 26.4% Stock Price 17.54 27% 22.28 Net Interest Margin 5.0% 8.1% EPS 1.34 112% 2.83 P/BV 2.22 0.9% 2.20 Performing loans growth 33% 24% Past due loan ratio 2.0% 1.6% Reserve Coverage 153% 166%
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GFNorte´s Income Statement
Million pesos Variations 4Q04 4Q05 2004 2005 QoQ YoY Net Interest Income after Repomo 2,861 3,524 10,144 13,248 23% 31% Non Interest Income 1,469 1,291 6,021 6,169 (12%) 2% Services 1,132 1,129 4,532 4,503 (0%) (1%) Recovery 117 61 574 629 (48%) 9% Forex & Trading 221 102 914 1,037 (54%) 13% Total Income 4,330 4,815 16,165 19,417 11% 20% Non Interest Expense 2,622 2,791 11,509 11,116 6% (3%) Net Operating Income 1,708 2,024 4,656 8,301 19% 73% Loan loss and loss sharing provis. (382) (332) (1,227) (1,446) (13%) 18% Non Operating Income (Expense) Net (59) (3) (36) 1,041 (94%) 2,968% Income tax and profit sharing (319) (554) (735) (2,264) 74% 208% Subsidiaries and minority interest (7) 32 40 87 1,986% 172% Net Income 942 1,168 2,697 5,719 24% 112%
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GFNorte’s Balance Sheet
Million pesos 4Q04 4Q05 Cash and due from banks 60 63 Investments in subsidiaries: 15,799 20,386 Bank 14,117 18,204 Long Term Savings 510 764 Auxiliary Organizations 633 814 Brokerage 538 549 Pronegocio 54 Others 86 47 Total Assets 15,946 20,496 Income Tax & Profit Sharing Total Liabilities Stockholder’s Equity 15,946 20,496 Liabilities + Equity 15,946 29% 20,496
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Net Income by Business Units
Million Pesos Change 4Q04 4Q05 2004 2005 QoQ YoY Banking 862 1,097 2,264 5,090 27% 125% Long Term Savings 11 12 243 390 6% 60% Brokerage 25 19 79 74 (23%) (6%) Factoring and Leasing 35 43 117 182 22% 56% Pronegocio - (8) - (18) N.C. N.C. Holding 8 5 (6) - N.C. N.C. GFNORTE 942 1,168 2,697 5,719 24% 112%
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ROE and ROA ROE ROA 30.8% 3.1% 17.5% 26.4% 2.7% 1.2% 2004 2005 2004
Recurrent Profits 26.4% 2.7% Recurrent Profits 1.2% 2004 2005 2004 2005
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NIM vs. CETES Percentages 9.7 9.5 9.0 8.6 8.1 99% 8.5 8.3 8.5 7.1 6.3
7.3 5.6 5.4 6.2 CETES 80% 5.1 NIM 4.4 4.3 4.2 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05
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Non Interest Expense Efficiency Ratio Billion Pesos Total Expense 2004
12 2005 11 (3%) Efficiency Ratio 70.6% 56.8% 2004 2005
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Deposits & Loans
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Core Deposits Billion Pesos Deposits 4Q04 3Q05 4Q05 Demand 67 66 76
Time 37 39 40 Total 104 105 115 Mix Demand 65% 63% 65% Time 35% 37% 35% 100% 100% 100%
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Performing Loan Portfolio
Billion Pesos 113 103 91 4Q04 3Q05 4Q05 Change 4Q04 3Q05 4Q05 QoQ YoY Consumer 29 35 38 8% 30% Commercial 34 37 39 7% 15% Corporate 14 18 20 16% 49% Government 14 13 15 13% 12% Total 91 103 113 10% 24%
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Performing Consumer Loan Portfolio
Billion Pesos 38 35 29 4Q04 3Q05 4Q05 Change 4Q04 3Q05 4Q05 QoQ YoY Mortgage 17 21 22 9% 28% Car Loans 6 6 6 0% 1% Credit Cards 4 6 6 10% 61% Payroll Loans 2 3 3 16% 68% Consumer 29 35 38 8% 30%
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Asset Quality Reserve Coverage Past Due Loan Ratio Billion Pesos 4Q04
Total Loan Portfolio 94 106 116 Past Due Loans 1.9 1.9 1.9 Loan Loss Reserves 2.8 3.1 3.1 Past Due Loan Ratio Reserve Coverage 2.0% 166% 165% 1.8% 153% 1.6% 4Q04 3Q05 4Q05 4Q04 3Q05 4Q05
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Banorte´s Loan Portfolio
Billion pesos 172 163 161 114 59% 51% 113 66% 103 12% 71% 100% 47 88% IPAB / FOBAPROA 21% 49% 41% 34% 79% 29% Loan Portfolio 1996 1997 2001 2002 2003 2004 2005
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Banking Sector´s Capitalization Ratio
4Q03 4Q04 4Q05 Tier 1 10.5% 12.2% 13.3% Tier 2 2.2% 4.0% 2.8% TOTAL 12.7% 16.2% 16.1% Percentage Tier 1 83% 75% 83%
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Recovery Bank
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Recovery Bank 2003 2005 Million Pesos 2003 2004 2005 Net Income 761
627 848 Portfolio 2003 2005 Proprietary 36% Managed 27% Proprietary 73% Managed 64%
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ASSETS UNDER MANAGEMENT
Recovery Bank ASSETS UNDER MANAGEMENT Billion Pesos 68 66 64 64 Banorte 19 23 33 47 IPAB 49 41 33 17 2002 2003 2004 2005
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Long Term Savings
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Long Term Savings Net Income Total 243 2004 2005 Afore Annuities
Million Pesos Total 243 60% 2004 2005 Afore Annuities Insurance 207 46 137 119 110 15 15% 217% 89% 2004 2005 2004 2005 2004 2005
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Relevant Indicators
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Clients 11 9 6 Millions 2.4 3 2 83% 3 3 Insurance 2 Afore 4 5 4 Bank 3
Seguros: +1,250% (312% anual) Afore: +233% (58% anual) Bancos: 40% (10% anual) 2001 2003 2005
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Assets under Management
Billion Pesos 401 13% Of the Country’s financial intermediation 39 284 119 22 Long Term Savings 114 45% Brokerage CAGR Ahorro y Prevision: +300% CAGR Casa de Bolsa: +49% CAGR Bancos: +93% 243 Bank 148 2001 2005
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Transactions with Clients
Millions of transactions per month 34 30 25 36% 74% 71% Electronic Banking 67% 33% 26% Branches 29% 2001 2003 2005
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Monthly placements per Branch
MORTGAGE LIFE INSURANCE 1.4 15 13 1.0 0.8 9 4Q03 4Q04 4Q05 4Q03 4Q04 4Q05
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2. Snapshot of New Products
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Snapshot of New Products
Results up to December 31 Clients: 16,300. Portfolio: $325 million. Average loan per client: $23,000 pesos. Clients: 43,000. Portfolio: $1,200 million. Average balance per client: $28,830 pesos.
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Snapshot of New Products
Results up to December 31 Opened accounts: 400,440. Balance: $1,200 million pesos. Average accounts opened daily: 1,585. Average balance per account: $ 2,330. Estimated new accounts in one year: 100,000.
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Snapshot of New Products
Results up to December 31 Opened accounts: 65,000. Deposits: $1.5 billion pesos: Checking: $900 millions. Investment: $600 millions.
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3. Performance of GFNorte’s Share
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Recent Share Evolution
IPC 140 135 GFNorte 130 125 120 115 110 105 100 95 90 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06
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Performance of IPC vs. GFNorte
2004 2005 83% 50% 38% 27% IPC Banorte IPC Banorte Annual Change 128% 102% IPC Banorte
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GFNorte’s Performance
$100 pesos invested on Dec’92, today would be in real terms... 306 GFNorte 228 IPC 119 Dollar
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Market Capitalization
Million Dollars 4,229 3,174 1,751 CAGR 55% 2003 2004 2005
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MARKET CAP IN BILLION DOLLARS
Vs Latin America MARKET CAP IN BILLION DOLLARS P/E Santander Chile 7.9 Banco de Chile 4.6 Unibanco 9.9 Bradesco Itaú 32.3 30.4 Banorte 4.2 P/BV
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Daily Turnover Million Dollars 10.3 4.9 2.3 4Q03 4Q04 4Q05
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4. Final Remarks
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Consumer Strategies for 2006
Customers Products Consolidation of new initiatives Development and Innovation Mutual Funds Cross Selling Loyalty programs Service Hispanic Market in USA Channels Branches program: 3 years 211 openings, replacements and remodelings 106 new branches (68% in Mexico City) Investment: $1,100 million pesos Alternate channels: Growth to 4,000 ATM for 2008 Telecomm: 1,554 branches
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Challenges 2006 Recomposition of competitive map.
Political environment: correct reading. Increase market share in deposits. Consolidation of new initiatives. Discipline in operating expenses. Strengthen position in mutual funds. Achievement of the USA project.
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