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GFNORTE: 2006 Results January 2007
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Contents 2006 Overview. Stock Metrics.
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2006 Overview
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Million constant pesos
Highlights Million constant pesos 2005 2006 Net Income 5,957 5,959 Recurrent Net Income 5,111 5,959 17% ROE 30.8% 24.9% Recurrent ROE 26.4% 24.9% Stock Price 22.28 90% 42.25 Net Interest Margin 8.1% 7.7% Tax Rate 29% 37% 55% P/BV 2.11 3.27 Performing loans growth 24% 20%
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GFNorte’s Income Statement
Millions of pesos GFNorte’s Income Statement Change 4Q05 4Q06 2005 2006 QoQ YoY Net Interest Income 3,671 3,788 13,799 14,517 3% 5% Non Interest Income 1,345 1,936 6,425 7,777 44% 21% Service 1,175 1,372 4,690 5,194 17% 11% Recovery 65 131 655 867 103% 32% FX, Trading and Valuation 106 434 1,081 1,716 300% 59% Total Income 5,016 5,724 20,224 22,294 14% 10% Non Interest Expense 2,908 3,270 11,578 12,458 12% 8% Operating Results 2,108 2,454 8,646 9,836 16% 14% Provisions (346) (329) (1,506) (1,530) (5%) 2% Other products and expenses, net (3) (11) 1,084 200 229% (82%) Taxes (577) (728) (2,358) (3,136) 26% 33% Subsidiaries and minority interest 34 117 91 589 248% 670% Net income 1,216 1,503 5,957 5,959 24% 0% Recurrent net income 1,216 1,503 5,111 5,959 24% 17%
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Million constant pesos
Profit Evolution Million constant pesos 1,503 1,216 981 CAGR: 24% 2004 2005 2006
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Net Interest Margin vs CETES
Percentages Average CETE: 2005: 9.20% 2006: 7.20% 9.7 9.5 9.0 8.6 8.1 8.0 7.9 8.5 7.6 7.7 8.5 7.1 8.3 113% CETES 7.5 7.3 7.1 7.0 7.0 72% 6.2 Margin 5.1 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
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Billion constant pesos
Non Interest Expense Billion constant pesos 2005 2006 Non-interest expense 11.6 8% 12.5 EFFICIENCY RATIO 70.6% 2004 56.8% 2005 55.0% 2006
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Billion constant pesos
Core Deposits Billion constant pesos Change without INB Deposits 2004 2005 2006 Demand 70 78 95 11% 13% 21% Time 38 9% 42 30% 54 12% Total 108 120 24% 149 11% 11% Mix Demand 65% 65% 64% Time 35% 35% 36% 100% 100% 100%
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Performing Loan Portfolio
Billion constant pesos Extraordinaries 141 131 118 Prepayments Nuevo León / Veracruz (4.7) Prepayment Fovissste (2.7) MBS (2.0) INB Portfolio Net effect (1.0) 4Q05 3Q06 4Q06 Change 4Q05 3Q06 4Q06 QoQ YoY Consumer 39 49 47 (3%) 20% Commercial 41 47 59 24% 43% Corporate 21 22 24 7% 14% Government 16 13 11 (17%) (32%) Total 118 131 141 7% 20%
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Performing Consumer Loan Portfolio
Billion of constant pesos Extraordinaries 49 47 39 Prepayment Fovissste (2.7) MBS (2.0) INB’s Mortgage Portfolio 0.9 Net effect (3.8) 4Q05 3Q06 4Q06 Change YoY w/out Extras 4Q05 3Q06 4Q06 QoQ YoY Mortgage 23 29 27 (9%) 14% 31% Auto 6 6 6 0% 3% 3% Credit Cards 6 9 10 11% 46% 46% Payroll 4 5 5 4% 39% 36% Consumer 39 49 47 (3%) 20% 29%
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Consumer Loans’ Dynamics
Loan origination in billion constant pesos AUTO MORTGAGE PAYROLL AND PERSONAL 11.0 7.7 5.6 5.4 4.9 4.5 43% 10% 24% 2005 2006 2005 2006 2005 2006
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Consumer Loans’ Dynamics
THOUSANDS OF NEW CREDIT CARDS 519 241 172 2004 2005 2006
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Billion constant pesos
Asset Quality Billion constant pesos 4Q05 3Q06 4Q06 Total Loan Portfolio 121 135 144 Past Due Loans 1.9 2.1 2.1 Loan Loss Reserves 3.2 3.6 3.5 PAST DUE LOAN RATIO RESERVE COVERAGE 1.6% 1.6% 172% 172% 1.4% 166% 4Q05 3Q06 4Q06 4Q05 3Q06 4Q06
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Capitalization Ratio 2004 2005 2006 Tier 1 12.2% 13.3% 12.2% Tier 2
4.0% 2.8% 5.1% TOTAL 16.2% 16.1% 17.4% Percentage Tier 1 75% 83% 70%
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Net Income in millions of pesos
Long Term Savings Net Income in millions of pesos TOTAL 525 407 253 2004 2005 2006 AFORE ANNUITIES INSURANCE ROE: 13% ROE: 87% ROE: 22% 143 311 216 124 162 115 51 48 16 2004 2005 2006 2004 2005 2006 2004 2005 2006
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Net Income in millions of pesos
Other Business Units Net Income in millions of pesos BROKERAGE FACTORING ROE: 29% ROE: 23% 184 89 70 82 77 44 2004 2005 2006 2004 2005 2006 LEASING ROE: 34% WAREHOUSING ROE: 9% BONDING ROE: 24% 18 118 29 14 24 83 11 17 44 2004 2005 2006 2004 2005 2006 2004 2005 2006
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Main Indicators
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Clients 11.8 9.2 6.9 Millions 2.4 3.6 2.4 Insurance 3.3 2.9 Retirement
0.9 3.3 2.9 Retirement 2.6 4 4.9 Bank 3.9 Seguros: +1,250% (312% anual) Afore: +233% (58% anual) Bancos: 40% (10% anual) 3.4 2002 2004 2006
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Assets under Management
Billions of constant pesos 526 50 424 Long Term Savings 381 23 163 33 Brokerage House 147 115 CAGR Ahorro y Prevision: +300% CAGR Casa de Bolsa: +49% CAGR Bancos: +93% 312 Bank 254 233 2002 2004 2006
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Billions of constant pesos
Investment Funds ASSETS Billions of constant pesos MARKET SHARE December 2006 26 21% 19% 16 17% 12 CAGR: 44% 6% 4% 4% 2004 2005 2006 BBVA Banamex Santander HSBC Scotia Banorte Bancomer
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Recent Events
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“The Banker” Award “Bank of the Year” in Mexico 2006.
Winners in previous years: 2005: Banorte. 2004: Banamex. 2003: Banamex. 2002: Santander Mexicano. 2001: BBVA Bancomer.
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Mortgage Backed Securitization
December 2006: Amount placed: Ps $2,047 million. Rating: mxAAA. Weighted Interest Rate: 8.31%. Average rate of underlying mortgages: 15.17%. Term: 15 years. First bank to issue MBS in Mexico. Rationale behind the transaction: Efficient use of capital. Mitigate financial risk.
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Banorte USA UniTeller. Closing: January 18, 2007.
Amount: US $19 million (100% share ownership). Activities 2006: 1.2 million remmittances. Amount: US $365 million (45% to México). Motran (remmittance company in California). January 2007: Purchase agreement signed. Price: US $3 million.
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2. Stock Metrics
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Stock Performance 2004-2006 Banorte: 433 IPC: 301 Inbursa: 181 460 420
100 140 180 220 260 300 340 380 420 460 Dec-03 Feb-04 Apr-04 Jun-04 Aug-04 Oct-04 Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Banorte: 433 IPC: 301 Inbursa: 181
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Stock’s Daily Turnover
Millions of dolars 13.9 10.3 CAGR: 82% 4.9 2.3 2003 2004 2005 2006
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