1. GFNorte
1Q05 Results
May-2005

2. Contents 1Q05 Results • Banking Sector Relevant Events
• Recovery Bank
• Long Term Savings Sector
Relevant Events
Economic Environment
Final Remarks

3. 1. 1Q05 Results

4. GFNorte Highlights 1Q 04 1Q05 Net Income 582 1,090 ROE 16.2% 26.9%
MILLION PESOS
1Q 04
1Q05
Net Income
582
1,090
87%
ROE
16.2%
26.9%
Stock Price
43.93
66%
72.75
Net Interest Margin
4.1%
7.2%
88%
EPS
1.15
2.16
43%
P/BV
1.53
2.19
Performing loans growth
20%
21%
Past due loan ratio
4.8%
1.9%
Reserve Coverage
127%
154%

5. GFNorte´s Net Income
MILLION PESOS
1,090
921
582
1Q04
4Q04
1Q05

6. GFNorte´s Net Income 1Q04 1Q05 Var% GFNORTE 582 1,090 87% Banking 453
MILLION PESOS
1Q04
1Q05
Var%
Banking
453
900
99%
Long Term Savings 86
127
48%
Brokerage 31 25
(19%)
Auxiliary Organizations 18 43
139%
Pronegocio
(4) -
Holding
(6)
(2)
(63%)
GFNORTE
582
1,090
87%

7. Banking Sector

8. Banking Sector´s Income Statement
MILLION PESOS
1Q04
1Q05
Var%
Net Interest Income after Repomo
2,101
2,749
31%
Non Interest Income
1,260
1,047
(17%)
Services
704
726 3%
Recovery
129
166
29%
Forex
130 59
(54%)
Trading
297 95
(68%)
Total Income
3,361
3,796
13%
Non Interest Expense
(2,557)
(2,338)
(9%)
Net Operating Income
804
1,458
81%
Loan loss and loss sharing provisions
(122)
(243)
100%
Non Operating Income (net)
(149) 37
N.A.
Income tax and profit sharing
(98)
(351)
258%
Subsidiaries and minority interest 72 83
15%
Net Income
507
984
94%

9. Net Interest Margin vs. CETES
PERCENTAGES
9.0
8.8
CETES
8.1
80%
7.1
7.2
6.3
6.3
56%
5.6
6.2
5.4
4.9
4.6
NIM
5.0
4.3
4.3
4.2
4.1
3.9
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05

10. Non Interest Income 1Q04 1Q05 MILLION PESOS Trading & Fx Trading & Fx
34%
Trading & Fx
15%
Recovery
16%
Services
56%
Services
69%
Recovery
10%

11. Non Interest Expense EFFICIENCY RATIO BILLION PESOS Total Expense 1Q04
2.6
1Q05
2.3 9%
EFFICIENCY RATIO
76%
1Q04
61%
1Q05

12. Core Deposits BILLION PESOS Deposits 1Q03 1Q04 1Q05 Demand 53 60 64
Time 34 35 36
Total 87 95
100
Mix
Demand
61%
64%
64%
Time
39%
36%
36%
100%
100%
100%

13. Cost of Deposits
% of CETES
37%
30%
27%
1Q03
1Q04
1Q05

14. Performing Loan Portfolio
BILLION PESOS 87 85 72
1Q04
4Q04
1Q05
Variation
1Q04
4Q04
1Q05
QoQ
YoY
Consumer 24 29 30 4%
22%
Commercial 25 29 29
(1%)
17%
Corporate 13 14 16
16%
22%
Government 10 13 13
(4%)
27%
Total 72 85 87 3%
21%

15. Performing Consumer Loan Portfolio
BILLION PESOS 30 29 24
1Q04
4Q04
1Q05
Variation
1Q04
4Q04
1Q05
QoQ
YoY
Mortgage 14 17 18 4%
23%
Car loans 6 6 6 1% 5%
Credit Card 3 4 4 7%
36%
Payroll loans 1 2 2 8%
48%
Consumer 24 29 30 4%
22%

16. Loan Portfolio Transformation
1Q03
1Q05
Government 8%
Government
14%
Commercial
36%
Commercial
33%
Consumer
29%
Consumer
34%
Corporate
27%
Corporate
19%
$60.3 billion pesos
$87.4 billion pesos
45 %

17. Asset Quality Past due loan ratio Reserve Coverage BILLION PESOS 1Q03
Total Loan Portfolio 67 78 91
Past Due Loans
3.7
3.8
1.7
Loan Loss Reserves
4.7
4.8
2.7
Past due loan ratio
Reserve Coverage
154.2%
5.6%
127.2%
127.2%
4.8%
1.9%
1Q03
1Q04
1Q05
1Q03
1Q04
1Q05

18. Capitalization Ratio 1Q03 1Q04 1Q05 Tier 1 10.9% 10.5% 12.5% Tier 2
2.4%
5.0%
3.6%
TOTAL
13.4%
15.4%
16.2%
Percentage of Tier 1
81%
68%
77%

19. Recovery Bank

20. Recovery Bank 1Q03 1Q05 MILLION PESOS 1Q03 1Q04 1Q05 Net Income 121
151
206
1Q03
1Q05
Proprietary
51%
Proprietary
29%
Managed
49%
Managed
71%

21. ASSETS UNDER MANAGEMENT
Recovery Bank
ASSETS UNDER MANAGEMENT
BILLION PESOS 62 58 58
Banorte risk
(owned + auctions) 17 21 32
Serfin Portfolio 16 14 11
IPAB Porfolio
(servicing) 25 23 19
1Q03
1Q04
1Q05

22. Long Term Savings Sector

23. ASSETS UNDER MANAGEMENT
Afore
ASSETS UNDER MANAGEMENT
BILLION PESOS 33 28 22
1Q03
1Q04
1Q05
CUSTOMERS
MILLIONS
2.4
2.3
2.1
1Q03
1Q04
1Q05

24. Insurance PREMIUMS SOLD CUSTOMERS 1.3 1.1 0.6 1Q03 1Q04 1Q05 2.8 1.7
BILLION PESOS
1.3
1.1
0.6
1Q03
1Q04
1Q05
CUSTOMERS
MILLIONS
2.8
1.7
0.7
1Q03
1Q04
1Q05

25. GFNortes´s ROE and ROA ROE ROA 26.9% 1Q05 16.2% 1Q04 1Q04 1.0% 2.5%

26. 2. Relevant Events

27. Start up of Pronegocio Jan ‘05 Authorization from Hacienda.
Mar ‘ branches operating and
16 to be open during 2005.
Results:
1,536 customers.
$43 million pesos in loans.
$2 million pesos of past due loans.
Loans characteristics:
Amount $10 to $50 thousand pesos.
Interest rate 3.5% - 4% monthly.
Loan fee %.
Term Up to 24 months.
Collateral NAFIN at 80%.

28. Credit Card Campaign “Ya bájale”
March 3 Launching of the program to transfer other banks credit card balances.
Characterístics:
Fixed interest rate 25%.
Term: 6 to 36 months.
4 months at 0% interest rate.
No annual fee.
5 thousand Banorte points.
Result as of May 2nd:
250 million pesos in loans.
18,544 pesos average balance per customer.

29. 3. Economic Environment

30. Macroeconomic variables 2005-2006
Economic Outlook
Macroeconomic variables
Variables
2005
2006
GDP
3.70%
3.20%
Inflation
3.80%
3.64%
Fiscal deficit (% GDP)
(0.15%)
(0.15%)
28 days Cetes (Average)
9.49%
9.01%
28 days Cetes (End od period)
9.30%
8.75%
Dollar exchange rate (End of period)
11.70
11.95
Trade balance
(11,500)
(12,000)
Direct Foreign Invesment
14,500
13,500
Oil price 27 24
GDP USA
3.70%
3.50%

31. Political Environment
Mexican macroeconomic fundamentals are strong, sustained by a prudent fiscal, and monetary policies.
However, political noise could generate market volatility in 2H05 and beyond. At present, the market is focusing in the selection of presidential candidates.
Mexico city´s major Andrés López Obrador, who is today the leading man on the 2006 presidential polls , won a political battle concerning his impeachment case and thus has the possibility to run.
On the positive side both Institutional build up, as well as strong economic fundamentals, provide for a shield against populism and/or bad economic management.
It is still too early to have a clear view of whom are going to be the candidates and what will be their respective platforms. By this fall this should be clearer.

32. 4. Final Remarks

33. Long Term Goals Vision 20/20. ROE of 20% sustainable.
Net Income growth of 20% per year: double every 4 years.
Improve efficiency ratio.
Innovation and bancarization.
Aquisition and retention of high worth customers.
Goal achievement: net income.

34. Market Cap
MILLION DOLLARS
3,284
1,990
CAGR=68%
1,160
1Q03
1Q04
1Q05

35. Daily Volume
MILLION DOLLARS
8.7
6.7
1.8
1Q03
1Q04
1Q05