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November 6, 2000

G R U P O F I N A N C I E R O. Latin American Equity Conference. November 6, 2000. Contents. I. OVERVIEW Highlights Profitability Asset Quality Capitalization Other Sectors Internet II. MANAGEMENT´S VISION AND STRATEGIES. I . OVERVIEW. Highlights.

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November 6, 2000

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  1. G R U P O F I N A N C I E R O Latin American Equity Conference November 6, 2000

  2. Contents • I. OVERVIEW • Highlights • Profitability • Asset Quality • Capitalization • Other Sectors • Internet • II. MANAGEMENT´S VISION AND STRATEGIES

  3. I . OVERVIEW

  4. Highlights • Banorte created provisions against stockholder’s equity for ps 1,737.7 million pesos to cover all contingencies with Fobaproa and to comply with YR2003 capital rules. • GFNorte 3Q00 accumulated profit of ps 1,190.3 million, 29.5% increase over 3Q99. Banking Sector of ps 1,015.6 million. • GFNorte 3Q00 accumulated non interest expense decreased 13.4% compared to 3Q99 as a result of expense reduction measures since 2H99. Banking Sector’s decreased 16.7% for the same period. • Banking Sector’s past due loans decreased 19.6% in one year period reducing pdl ratio from 6% to 4.9%. Reserve coverage at 102.9%. • Banking Sector’s capitalization ratio of 12.1%, Tier 1 of 11.1% and Tier 2 of 1.0%. Capitalization ratio for 2003, 10.7%.

  5. Highlights • Banorte strengthened its capital base to fully create provisions for Fobaproa and YR2003 and to take advantage of tax loss carry-forward in Bancentro. Bancentro Banorte Equity Ps 1,217 • Recovery banking business • Bancentro’s Fobaproa assets • Serfín’s loan management portfolio • Afore from Banorte • Brokerage House’s Mutual Funds management • Traditional Banking Business Brokerage House Banorte Equity Ps 290 • Capital market business • Investment banking • Money market from Brokerage House

  6. Group’s Integration GFNORTE 82.9% 8.9% 5.5% 2.7% Auxiliary Organizations Long Term Saving Banking Brokerage Brokerage House Annuities Factoring Banorte (Banpais) Pension Funds Leasing Bancentro Warehousing Insurance Bonding % Group´s Investment in Subsidiaries. As of September 2000.

  7. Banorte became a national bank improving its market position MARKET COVERAGE Branches % Mkt Jun 00 Dec 96 % Mkt 14° 6° Branches 156 2.3 453 5.7 States 7 32 Market Dec ‘96 Jun ‘00 BANORTE BANCENTRO BANPAIS % Place % Place Non interest Deposits 5° 5° 6.8 11.9 10° 5° Total Deposits 3.0 6.7 10° 5° Loans 3.3 8.4 Loans include Fobaproa. Mkt. % for deposits excludes Financial Intermediaries and refers to Banking Sector exclusively. Source CNBV.

  8. Our Client base has increased through time as Banorte has reinforced its presence in traditional entities and moved further into new territories 2,570 2,324 1,900 889 627 301 142 1994 1995 1996 1997 1998 1999 2000* Products % Accounts Checking Account 50.5% Investment 38.3% Money Market 1.8% Brokerage 0.3% Loans 1.9% Credit Cards 5.6% Mortgage 1.6% Total Accounts 100% * Data as of September in thousands. Includes Banking Sector and Brokerage.

  9. Supported on Banorte´s technological platform, electronic and phone banking have grown agressively *Annual Transactions (millions) Units CALL CENTER 8.3 9,512 POS 7.5 8,985 6,398 PC BANKING 13.5 5,661 3,750 4,548 3,318 2,458 1,988 1,538 1,341 ATM 85.5 986 990 1,365 218 408 130 212 1994 1995 1996 1997 1998 1999 2000** *Corresponding to yr 1999. ** As of September 2000. Call Center = number of calls.

  10. Profitability

  11. We maintained second place in ROE RETURN ON EQUITY 1999 2000* 21.7% 21.7% 19.4% 15.1% 2° 13.1% 2° 14.1 8.9% 8.7% 8.1% 7.2% 5.0% GFB GFBBV GFBITAL BANACCI GFBITAL BANACCI GFNORTE GFBVA- BANCOMER GFNORTE GFSANTAND GFSANTAND Information provided by each Institution, It excludes minority interest;* September 2000.

  12. GFNorte has maintained constant earnings growth ACCUMULATED NET INCOME 1,516.8 1,482.6 1,106.2 Extraordinary Items Extraordinary Items 1,206.0 807.4 1,190.3 3Q99 919.4 686.9 667.9 '95 '96 '97 '98 '99 3 Q’00 Book Value 14.1 9.4 12.7 (*) 14.6(*) 15.6(*) 14.0(*) Per Share Extraordinary Items: 1997: $675.2 & 1998: $410.6 (*) Fully diluted Millions as of September 2000.

  13. GFNorte has increased its net income per share 30% NET INCOME PER SHARE * 2.41 1.86 30% 3 Q ’99 3 Q ’00 Ps as of September 2000. * Fully diluted.

  14. Major contribution to earnings was that of the Banking Sector with 85% of total Group´s earnings GFNORTE EARNINGS 2000* 2% 3% 5% 5% BANKING BROKERAGE LONG TERM SAVINGS HOLDING AUXILIARY ORGANIZATIONS 85% *As of September 2000.

  15. Banking Sector´s income composite TOTAL GROSS INCOME 6,635 5,783 • Market interest rates dropped 8 basis points in one year period. • Important interest rate drop on IPAB notes. Net interest income 5,544 4,477 13% Non interest income 1,306 1,091 3 Q ’99 3 Q ’00 NON INTEREST EXPENSE TOTAL NET INCOME 1,098 5,111 4,256 797 38% 17% As of Sep’00. Millions of Ps. 3 Q ’99 3 Q ’00 3 Q ’99 3 Q ’00

  16. Asset quality

  17. Banorte has maintained a low level of past due loans PAST DUE LOAN RATIO 8.1% 8.0% 4.9% 4.0% 3° 2.2% SANTANDER- SERFIN BANAMEX BANORTE BITAL BBVA - BANCOMER As of September 2000.

  18. Banorte maintained a reserve coverage of 102.9% RESERVE COVERAGE 233.9% 112.7% 102.9% 101.0% 100.0% 3° BBV - BANCOMER SANTANDER- SERFIN BANORTE BITAL BANAMEX As of September 2000.

  19. Capitalization

  20. Capitalization ratio stood at 12.1% CAPITALIZATION RATIO 16.7% 16.5% 13.8% 12.1% 10.5% 4° BANAMEX SANTANDER - SERFÍN BBVA - BANCOMER BANORTE BITAL W/O MARKET RISK 22.3% 19.9% 16.5% 13.6% 12.3% As of September 2000.

  21. Other Sectors

  22. Other sectors are profitable and have gained market share 3Q’99 3Q’00 Net Income Market Share Net Income Market Share Long Term Saving: Afore 50.1 8.5% 61.6 8.9% Bancassurance (11.8) 1.0% (2.9) 1.0% 1) Annuities (20.8) 6.2% (19.1) 9.7% Brokerage Sector: Brokerage House 113.5 4.9% 58.4 6.8% Auxiliary Organizations: Factoring 25.0 19.8% 28.6 28.7% 2) Leasing 10.9 5.0% 15.4 5.2% 3) Warehousing 2.5 3.3 Bonding 5.2 5.5 1) As of June 2000. 2) As of July 2000. 3) As of August 2000.

  23. www.banorte.com.mx

  24. Provide the most user-friendly and wide variety of transactions, both to Corporations and Individuals. Participate as a major player, in the Business-to-Consumer sector, as well as Business-to-Business sector of web-based commerce. Develop the best e-commerce alliances, joint ventures and revenue sharing agreements. Use Banorte´s strong and trusted name. We define as a priority to achieve a strong position in the internet market, developing a transaction-focus strategy OUR STRATEGY

  25. GFNorte ‘s Internet News • On August 31, 2000, Grupo Financiero Banorte announced its Internet operational strategy which places GFNorte among the most advanced institutions in this matter in the country. • Through www.banorte.com.mx GFNorte will respond in an effective way to the most sophisticated needs in the market today, by means of the evolution and expansion of its range of on-line services. • The new Portal de Banorte offers direct access to transactional applications, on-line product demand, support in Chat-format, location maps of branches and financial services simulators.

  26. Internet Alliances Asista.com • In September of 2000, Grupo Financiero Banorte and Asista.com, announced the signature of a strategic alliance for the development of diverse on-line payment mechanisms, as well as different solutions for electronic trade among businesses. • The development of solutions for electronic payments to be offered to the customers will be finished by the end of the fourth quarter of this year. Zona Financiera.com • GFNorte and Zona Financiera.com announced a strategic alliance by means of which the users of this site will be able to have access to the wide range of services and financial products of the Group. • This alliance represents a great advance in our strategy of extending our operations and services through the Internet and to give value-added resources to our clients in Mexico.

  27. II. MANAGEMENT´S VISION AND STRATEGIES

  28. Banking Sector Trends I. Financial sector reconfiguration II. Interest income decrease III. Customer orientation IV. Digital revolution V. New regulations

  29. Management’s Vision and Strategies • I. Financial sector reconfiguration • Supply & development of financial products and services through a matrix organization • Acquisition of financial entities • Process reengineering to insure “Best Practices” • II. Interest income decrease • Non interest income increase through transactional charges • Development of non bank products • Diminishing funding cost • Credit loans increase • Asset quality enhancement • Diminishing operating expenses

  30. Management’s Vision and Strategies • III. Customer orientation • Moving toward a customer oriented bank (CRM) • Internet as a tool to improve customer knowledge • IV. Digital revolution • Promote usage of new electronic distribution channels • Strong development of Internet services • V. New regulations • Credit risk management & control system • Strengthen capital base through profitability focus

  31. IN GRUPO FINANCIERO BANORTE WE CONTINUE WORKING TO BE THE STRONG BANK OF MEXICO

  32. G R U P O F I N A N C I E R O

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