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GFNorte’s 4Q07 Results

GFNorte’s 4Q07 Results. Conference Call February 1, 2008. 22%. 10%. 7%. Yearly Recap. CONSTANT MILLION PESOS. 2006. 2007. Net Income. 6,185. 6,810. 11%. ROE. 24.9 %. 22.6 %. ROA. 2.8 %. 2.6 %. Net Interest Margin. 7.7 %. 7.6 %. Performing Loan Growth. 19 %. 32 %.

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GFNorte’s 4Q07 Results

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  1. GFNorte’s 4Q07 Results Conference Call February 1, 2008.

  2. 22% 10% 7% Yearly Recap CONSTANT MILLION PESOS 2006 2007 Net Income 6,185 6,810 11% ROE 24.9% 22.6% ROA 2.8% 2.6% Net Interest Margin 7.7% 7.6% Performing Loan Growth 19% 32% Past Due Loan Ratio 1.4% 1.5% Stock Price 42.25 45.08 Book Value 13.42 16.42 P/BV 3.15 2.75

  3. Quarterly Net Income CONSTANT MILLION PESOS 1,685 1,560 1,263 1,018 4Q04 4Q05 4Q06 4Q07

  4. Income Statement CONSTANT MILLION PESOS Change 4T06 4T07 2006 2007 QoQ YoY Net Interest Income 3,931 4,881 15,069 17,384 24% 15% Non Interest Income 2,010 1,914 8,072 7,899 (5%) (2%) Service Fees 1,424 5,391 1,666 6,028 17% 12% Recovery 136 900 164 580 21% (36%) FX and Trading 450 1,782 83 1,292 (82%) (28%) Total Income 5,941 23,141 6,795 25,283 14% 9% 12,931 Non Interest Expense 3,841 14,432 13% 12% 3,395 Net Operating Income 2,546 10,210 2,954 10,851 16% 6% Provisions (341) (1,588) (921) (2,645) 170% 67% Non Operating Income, Net (12) 208 382 1,867 3,283% 798% Income Tax (756) (3,255) (694) (3,293) (8%) 1% Subs & Minority Interest 122 610 (36) 31 (130%) (95%) 6,185 6,810 8% 10% 1,560 1,685 Net Income

  5. Comparable Results MILLION PESOS 2006 Accounting Standards ‘07 2007 Net Interest Income 14,515 17,384 20% Non Interest Income 7,185 7,899 10% Total Income 21,700 25,283 17% Non Interest Expense 13,157 14,432 10% Operating Profit 8,534 10,851 27%

  6. Non Interest Expense CONSTANT BILLION PESOS 2006 2007 12.9 14.4 Non Interest Expense 12% EFFICIENCY RATIO 56.8% 56.3% 55.0% Accounting Changes 3.4 pp 52.9% 2005 2006 2007

  7. Net Interest Margin vs CETES PERCENTAGE CETES 8.6 8.2 8.0 99% 7.9 7.7 7.7 7.6 7.5 8.5 Margin 111% 7.0 7.4 7.5 7.2 7.1 7.1 7.0 7.0 7.1 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07

  8. 21% 13% 14% 30% 23% 13% Core Deposits CONSTANT BILLION PESOS Deposits 4Q05 4Q06 4Q07 82 99 111 Demand 43 56 64 Time 125 154 175 Total Mix 66% 64% 63% Demand 34% 36% 37% Time 100% 100% 100%

  9. Performing Loan Portfolio CONSTANT BILLION PESOS 193 175 146 4T06 3T07 4T07 Change 4Q06 3Q07 4Q07 QoQ YoY Consumer 49 59 63 7% 29% 61 68 75 10% 23% Commercial 25 31 37 19% 47% Corporate 11 18 18 0% 60% Government Total 146 175 193 10% 32%

  10. Performing Consumer Loan Portfolio CONSTANT BILLION PESOS 63 59 49 4T05 3T07 4T07 Change 4Q06 3Q07 4Q07 QoQ YoY 28 33 36 9% 31% Mortgage Loans 7 7 7 3% 10% Car Loans 10 13 14 9% 41% Credit Card Loans 5 6 6 1% 20% Payroll Loans Consumer 49 59 63 7% 29%

  11. 30% 19% 13% 9% 49% 20% Consumer Loans NEW LOANS IN CONSTANT BILLION PESOS PAYROLL & PERSONAL MORTGAGE AUTO 12.0 11.0 11% 7.4 6.7 6.3 5.6 5.3 4.7 11% 4.3 11% 11% 11% 11% 2005 2006 2007 2005 2006 2007 2005 2006 2007

  12. Credit Cards 38% 97% 37% THOUSANDS OF NEW CARDS 709 11% 518 11% 263 11% 190 2004 2005 2006 2007

  13. Banking Sector Capitalization Ratio PERCENTAGE 2005 2006 2007 13.3% 12.2% 10.2% Tier 1 2.8% 5.1% 3.6% Tier 2 16.1% 17.4% 13.8% TOTAL 83% 70% 74% Percentage Tier 1

  14. Credit Ratings Notches over Investment Grade Institution Rating Outlook Date Standard & Poor’s BBB- Positive = Sep-07 Fitch BBB Positive +1 Sep -07 Moody’s Baa1 Stable +2 Dec-07

  15. Asset Quality CONSTANT BILLION PESOS 4Q06 3Q07 4Q07 Total Loan Portfolio 150 179 197 Past Due Loans 2.1 2.7 2.9 3.7 Loan Loss Reserves 3.6 3.8 PAST DUE LOAN RATIO RESERVE COVERAGE 172% 1.5% 1.5% 1.4% 132% 131% 4Q06 3Q07 4Q07 4Q06 3Q07 4Q07

  16. Reserve Creation from Loan Book CONSTANT MILLION PESOS % of Total 2007 Credit Card 1,229 44 69% of total Other Consumer 696 25 Mortgage 539 19 Corporate / Commercial 279 10 Government 76 2 Total Loan Portfolio 2,818 100

  17. Loan Book Performance Loan Growth Net Credit Losses ROE Credit Card 41% 31% 6.5% Other Consumer 14% 38% 3.6% Mortgage 31% 16% 0.8% Corporate / Commercial 30% 21% (0.2%) Government 60% 19% 0% Total 32% 23% 0.9%

  18. Dec ‘04 Dec ‘07 Credit Card PAST DUE LOAN RATIO Average ‘07 6.7% 7.9% 7.4% 7.3% 6.2% 5.8% 5.6% 4.5% 4.2% 3.2% 2.7% 2.5% 1.9% Santander* Scotia HSBC Banamex BBVA Banorte * 90 days late payment criteria vs. 60 days for the rest of the banks.

  19. Dec ‘04 Nov ‘07 Mortgage PAST DUE LOAN RATIO Average ‘07 3.7% 7.6% 7.6% 6.4% 6.0% 5.8% 4.5% 4.2% 3.5% 3.5% 2.7% 2.4% 1.3% HSBC Banamex Scotia BBVA Banorte Santander

  20. Dec ‘04 Nov ‘07 Total Loans PAST DUE LOAN RATIO Average ‘07: 2.5% 7.0% 5.2% 4.7% 3.0% 2.7% 2.5% 2.3% 2.2% 2.0% 2.0% 1.5% 1.2% HSBC Scotiabank Banamex Bancomer Santander Banorte

  21. Subsidiaries

  22. Long Term Savings NET INCOME IN MILLION PESOS 2005 2006 2007 Total 422 545 388 AFORE ANNUITIES INSURANCE ROE: 24% ROE: 16% ROE: 20% 323 224 170 168 148 136 82 53 50 2005 2006 2007 2005 2006 2007 2005 2006 2007

  23. Other Finance Companies NET INCOME IN MILLION PESOS 2005 2006 2007 Total 197 256 271 FACTORING LEASING WHAREHOUSING ROE: 30% ROE: 13% ROE: 23% 140 122 107 92 86 73 15 11 15 2005 2006 2007 2005 2006 2007 2005 2006 2007

  24. Brokerage and Microlending NET INCOME IN MILLION PESOS ROE: 33% BROKERAGE MICROLENDING 288 191 80 23 2007 2005 2006 (20) 2005 2006 2007 (30)

  25. 11% 11% 26% 25% Banorte USA Million dollars 2007 2006 INB Performing Loans 779 974 Net Interest Margin 4.6% 4.4% Net Income (70%) 12.5 15.8 Efficiency 46.4% 41.6% ROE 19.4% 21.5%

  26. Challenges 2008 • Improve origination & follow up process. • Efforts to reduce reserve requirements. Asset Quality • 80 new branches + 20 refurbishments. • 600 new ATM’s + 330 substituions. • 12,000 POS’s. Infrastructure • Low bancarization levels. • New secular growth story. • Specialized products & sales force. SME’s

  27. Challenges 2008 • Increased loan demand. • Emphasis on payrolls. Government banking • Seek new alliances. • Middle & lower income segments. Alternate channels • Calibration of business model. • Emphasis on profitability & asset quality. Microlending • Greater revenue synergies. • New products. Banorte USA

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