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GFNORTE

GFNORTE. 4Q03 Results. Banorte continues gaining market share now as a national coverage bank. BRANCHES AND EMPLOYEES. Dec ‘01. Dec ‘96. Dec ‘03. Banorte. BTE + BCR. 14°. 6°. 4°. 4°. 1,024. 156. 455. 1,182. Branches MS%. 15.1. 2.3. 6.4. 16.6. 32. 7. 32. 32. States.

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GFNORTE

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  1. GFNORTE 4Q03 Results

  2. Banorte continues gaining market share now as a national coverage bank BRANCHES AND EMPLOYEES Dec ‘01 Dec ‘96 Dec ‘03 Banorte BTE + BCR 14° 6° 4° 4° 1,024 156 455 1,182 Branches MS% 15.1 2.3 6.4 16.6 32 7 32 32 States 13,336 4,840 8,516 15,099 Bank Emp BANORTE BANCENTRO BANPAÍS BANCRECER Dec ‘01 Dec ‘96 Dec ‘03 BTE BTE + BCR 5° 5° 5° 4° 6.8 11.4 15.4 16.5 Non Interest Deposits 14° 5° 4° 5° 3.0 7.8 11.7 11.8 Total Deposit 10° 6° 4° 4° 3.3 7.0 8.6 12.2 Traditional Loans 10° 3° 3° 3° 3.3 9.4 15.6 16.6 Total Loans DEPOSITS: EXCLUDES FINANCIAL INTERMEDIARIES AND INCLUDES MUTUAL FUNDS AND SOURCE: ABM LOANS: INCLUDES FOBAPROA, IPAB CREDIT AND SOURCE: DEC ‘96 CNBV; DEC ‘01 AND SEP ‘03 A.B.M.

  3. The client base and the distribution channels have experienced an important growth 2003 2002 CLIENTS (Thousands) 4,678 4,634 3,865 TRANSACTIONS PER DISTRIBUTION CHANNEL 2,818 2,324 1,900 889 627 54% ATM 54% ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 02 Dec’03 BRANCHES 23% DISTRIBUTION CHANNELS PC Banking 22,709 28% PC BANKING & INTERNET POS 10,400 14% Call Center** 20.6 9% ATM 2,524 6% TELEPHONE BANKING 6% Branches 1,029 8.3 2,458 990 3% 212 POS 157 3% ‘96 ‘97 ‘98 ‘99 ‘00 ‘02 Dec’03 ‘01 CLIENTS : INCLUDES THE BANKING SECTOR AND THE BROKERAGE HOUSE. * INTERNET. **MILLIONS OF PHONE CALLS FOR THE PERIOD.

  4. GFNorte’s Recurrent Income EXTRAORDINARY INCOME NOT INCLUDED IN GRAPH: 1997: PS 796, 1998 : PS 484, 2000: PS 245 AND 2002: PS 410. MILLIONS AS OF DECEMBER 2003.

  5. GFNorte’s Objectives & Strategy • Objectives • Provide excellence in financial services • Maximize shareholder value • Strategy • We have succeeded in building a national franchise through selective acquisitions. We will now focus on exploiting our leading market position by: • Improving our funding mix • Increasing Non Interest Income • Reducing Non Interest Expense, improving our efficiency ratio • Aggressively growing our credit portfolio, with strict credit risk policies • Further developing our asset recovery business • Multi-channel approach with a cross-sell focus

  6. 31% 53% HIGHLIGHTS GFNORTE 2003 2002 2,219 17.5% 39.0 4.4 1.5 12.7% 20.4% 2.4% 121.7% 1,685* 15.6% 25.5 3.4 * 1.1 14.8% 76.0% 3.1% 118.0% Net Income Annualized ROE Stock Price EPS P/BV BANKING SEGMENT Capitalization Ratio Traditional loan growth (1) Past due loan ratio Reserve Coverage • NET INCOME IN MILLION PESOS AS OF 4Q03. • EPS & BOOK VALUE ARE PESOS PER SHARE. BOOK VALUE EXCLUDES MINORITY HOLDINGS. • EXCLUDES GENERALI EXTRAORDINARY INCOME OF Ps 410 millions. • (1)EXCLUDESTHESHORT-TERM LOANFOR Ps 6,761 MILLION GRANTEDTO AFINANCIAL ENTITY OF THE FEDERAL GOVERNMENT • IN DECEMBER 2002.

  7. Profit composition NET INCOME 2001 2002 2003 BANKING 85% 84% Ps 1,798 81% LONG TERM SAVINGS 6% 8% 217 10% AUXILIARY ORGANIZATIONS 4% 4% 93 4% BROKERAGE 2% 4% 102 5% HOLDING 3% 0% 8 0% GFNORTE Ps 2,219 100% 100% 100% MILLION PESOS

  8. Net Interest Margin 1.0 9.6% TIIE 8.8% 8.4% 0.5 Cete 7.4% 0.4 6.8% 5.8% 6.3% 5.4% 5.1% 4.6% 4Q03 3Q03 TYPE OF ASSET VOL VOL NIM NIM Fobaproa / Ipab Notes 85,537 2.2% 79,901 2.5% Loan Portfolio 64,501 8.0% 68,072 8.4% Other (1) 42,647 1.1% 46,882 0.9% Total 192,684 3.9% 194,856 4.2% (1): 4Q03 Includes: Deposits in Central Bank Ps 17,128 millions, Fixed Income Securities Ps 16,764 millions and in other banks Ps 12,990 millions.

  9. 27% 39% Non Interest Income Service Fees Service 865 1,965 2,086 Recovery 1,020 739 875 Trading 342 288 837 TOTAL 2,228 2,991 3,798 MILLION PESOS AS OF 4Q03

  10. Service Fees 2003 vs 2002 2002 2003 Fund Transfers 194 178 (8%) 666 710 7% Account Management Fees Fiduciary 183 178 (3%) Credit Card 591 655 11% Electronic Banking 254 260 2% Other Fees Net 76 106 39% NET FEES - SERVICES 1,965 2,086 6% • The Service Fee Income accumulated through the year rose by 6% vs. 2002 as a result of the new clients that were attracted and which show the following rise in fee collecting: Credit Cards, 11%; Account Management fees, 7%; and Electronic Banking Services, 2%. MILLION PESOS

  11. Recovery Fees 2003 vs 2002 2002 2003 I.- LOAN PORTFOLIOS ACQUIRED 358 398 243 363 a. Serfin Loans (1) Income 640 543 - Expense 397 180 115 35 b. Other Portfolios Income 411 165 - Expense 296 130 II.- FOBAPROA FEES 381 477 739 875 18% NET FEES – RECOVERY • The accumulated Non Interest Income from Recovery Banking increase an 18% due to the higher Serfin portfolio income and that of the Fobaproa portfolio. MILLION PESOS (1) COLLECTION RIGHTS.

  12. Recovery Bank AUM Composition 65 60 59 Proprietary 11% 11% 7% Loans Acquired 17% 17% 29% 30% SERFIN 29% 24% IPAB 42% 43% 40% AUM = ASSETS UNDER MANAGEMENT (*): FIGURES IN BILLION PESOS.

  13. Non Interest Expense 16% 9,362 9,195 PERSONNEL = O&AE VAT & IPAB RENT,DEP & AMORT. MILLION PESOS. (*) FOURTH QUARTER 2001 INCLUDES PROFORMA FOR BANCRECER VAT = VALUE ADDED TAX. AT 2002 VAT=PS 621 MILLIONS AND IPAB=PS 678 MILLIONS. AT 2003 VAT=PS 645 MILLIONS AND IPAB=PS 732 MILLIONS O&AE = OPERATION AND ADMINISTRATIVE EXPENSES INCLUDING IT. RENT,DEP. & AMORT. = RENT,DEPRECIATION & AMORTIZATION.

  14. Efficiency Ratio 1992 1996 1997 2001 Dec 2002 2003* Efficiency Ratio 55% 66% 93% 78% 105% 87% 78% 78% • Efficiency ratio has suffered after each acquisition, being Banorte able to return to adecuate efficiency levels in the following years. • After the acquisition of Bancrecer the efficiency ratio went up to 87%, coming down to an average for the year of 78% by 2003. EFFICIENCY RATIO INCLUDES TRADING. * AVERAGE FOR THE PERIOD.

  15. Traditional Loan Portfolio VARIATION 4Q02 3Q03 4Q03 TRADITIONAL LOAN PORTFOLIO QUARTER ANNUAL Commercial 17,743 20,112 23,036 14.5% 29.8% Corporate 14,573 12,671 11,859 (6.4)% (18.6)% Mortgage 10,838 12,681 13,551 6.9% 25.0% Automobile 3,089 4,651 5,022 8.0% 62.6% Credit Card 1,729 2,541 2,829 11.3% 63.6% Electronic Payroll Loans 583 1,018 1,214 19.3% 108.2% Government Entities 6,054 8,955 9,147 2.1% 51.1% Financial Entities 3,545(*) 3,706 3,350 (9.6)% (5.5)% TOTAL 58,155(*) 66,338 70,007 5.5% 20.4% FIGURES = MILLION PESOS. TRADITIONAL LOAN PORTFOLIO DOES NOT INCLUDE NEITHER FOBAPROA / IPAB NOTES NOR RECOVERY BANK BUSINESS GOVERNMENT ENTITIES INCLUDES FEDERAL, STATE & MUNICIPALITIES FINANCIAL ENTITIES = INCLUDES GOVERNMENT AND PRIVATE FINANCIAL ENTITIES LIKE LEASING,FACTORING COMAPNIES AND OTHERS. (*) ITEXCLUDESTHESHORT-TERM LOANFOR Ps 6,761 MILLION GRANTEDTO AFINANCIAL ENTITY F THE FEDERAL GOVERNMENT IN DECEMBER 2002.

  16. Past Due Loans PDL Ratio PDL Ratio 3Q03 TYPE OF LOAN 4Q03 CORPORATE 663 0.4% 663 0.4% COMMERCIAL 405 0.3% 419 0.3% MORTGAGE 1,179 0.8% 1,183 0.8% AUTOMOBILE 161 0.1% 192 0.1% CREDIT CARD 134 0.1% 169 0.1% ELECTRONIC PAYROLL 89 0.1% 87 0.1% RECOVERY LOANS 841 0.5% 804 0.5% TOTAL 3,472 3,517 2.3% 2.4% MILLION PESOS

  17. 4Q02 1Q03 2Q03 3Q03 4Q03 4Q02 1Q03 2Q03 3Q03 4Q03 4Q02 1Q03 2Q03 3Q03 4Q03 4Q02 1Q03 2Q03 3Q03 4Q03 4Q02 1Q03 2Q03 3Q03 4Q03 BANORTE BANCRECER Loans & Insurance allocation by quarter AUTOMOBILE MORTGAGE ELECTRONIC PAYROLL LOANS 37,813 10,729 10,486 34,988 9,929 32,978 9,894 2,454 2,085 8,287 1,867 62% 1,737 22,751 59% 58% 22,793 62% 57% 64% 65% 62% 1,397 61% 68% 65% 72% 67% 81% 79% 38% 38% 41% 42% 38% 43% 36% 35% 39% 35% 32% 33% 28% 19% 21% CAR INSURANCE LIFE INSURANCE 36,470 34,930 21,812 20,753 19,446 19,317 29,872 27,732 15,977 56% 55% 58% 63% 60% 61% 60% 57% 17,158 75% 63% 44% 45% 37% 40% 39% 40% 42% 43% 25% 37% NUMBER OF LOANS AND INSURANCE POLICIES.

  18. Fobaproa - IPAB After Banorte’s expansion strategy, the proportion of Fobaproa / IPAB notes has been reducing since Traditional Loan portfolio started to rise Traditional Loans 159 149 Fobaproa / IPAB Notes Ps 6.7 (1) 149 Ps 1.9 (2) 103 42 66% 59% 51% 71% 21% 1996 1997 2001 2002 2003 • BILLION PESOS AS OF DECEMBER 2003. NET OF FOBAPROA CHECKING ACCOUNT AND LOSS SHARING PROVISIONS. • SHORT TERM LOANS TO SOCIEDAD HIPOTECARIA FEDERAL. • SALE OF LOANS TO SOLIDA ADMINISTRADORA DE PORTAFOLIOS.

  19. Industry Growth Twelve month Traditional Loan Portfolio growth (*) (Excludes Fobaproa / IPAB) 20%(1) 17% 16% 1% - 2% -10% SERFIN SCOTIA INVERLAT BANAMEX BANORTE BANCOMER SANTANDER BITAL • (*) FROM 4Q’02 TO 4Q’03. • SOURCE: 4Q’03 QUARTERLY REPORTS, EXCEPT BANAMEX. • Excludes loans managed by the Recovery Banking unit and excludes the short-term loan for Ps 6,761 million granted to a financial entity • of the Federal Government in December 2002.

  20. Banorte’s Loan mix is shifting away from the Monterrey region ……and concentrating more in Mexico City Dec01 Dec03 Loans 39% 29% Branches 16% 17% MONTERREY Dec01 Dec03 Loans 12% 11% Branches 14% 13% NORTHEAST Dec01 Dec03 Loans 6% 10% Branches 16% 16% NORTHWEST Dec01 Dec03 Loans 27% 31% Branches 22% 23% MEXICO CITY Dec01 Dec03 Loans 11% 11% Branches 15% 16% WEST Dec01 Dec03 Loans 4% 8% Branches 16% 16% SOUTHEAST Dec01 Dec03 100% 100% NATIONAL SOURCE: ABM. 2001 DOES NOT INCLUDES BANCRECER LOANS EXCLUDES IPAB AND FOBAPROA AND CENTRALIZED OPERATIONS.

  21. Comparatives to the Industry 4Q’03 ASSETS NUMBER OF BRANCHES 30.3% 25.1% 24.4% 20.7% 19.5% 15.1% 15.1% 12.8% 13.6% 4° 4° 10.2% 5.6% 5.5% BBVA- Bancomer Banamex Santander Banorte Bital* Scotiabank* BBVA- Bancomer Banamex Bital Banorte Santander Scotiabank ROE Group CAPITALIZATION RATIO 16.4% 29.9% 14.7% 12.7% 24.4% 17.5% 3° 15.7%(1) 12.4% 15.5%(1) 12.4% 3° 13.3% 11.6% BBVA - Bancomer Bital* Banorte Santander Scotiabank* Banamex Santander Scotiabank* GFNorte Banamex Bital* BBVA- Bancomer SOURCE OF ASSETS AND NUMBER OF BRANCHES: ABM SOURCE OF ROE AND CAPITALIZATION RATIO: PRESS RELEASE OF EACH BANK. INCLUDES MARKET AND CREDIT RISKS. RULES 2003. (1) CALCULATED FOR BANKING SECTOR (*) INFORMATION AS OF 3Q03.

  22. Market Share by Region DECEMBER 2003 Tot. M.S. Branches 170 24.2 Total Deposits $55,819 39.0 Total Loans $20,340 21.8 MONTERREY 1° 1° 2° Tot. M.S. Branches 136 24.1 Total Deposits $28,710 27.9 Total Loans $7,884 29.0 NORTHEAST 1° 1° Tot. M.S. Branches 160 17.7 Total Deposits $19,385 14.2 Total Loans $7,081 13.9 NORTHWEST 1° 4° 4° 3° Tot. M.S. Branches 237 14.0 Total Deposits $59,680 7.0 Total Loans $21,620 6.9 MEXICO CITY 5° 6° 6° Tot. M.S. Branches 159 16.0 Total Deposits $28,678 14.8 Total Loans $8,024 16.4 WEST 4° 3° 3° TOTAL M.S. Branches 1,024 15.1% Total Deposits $211,486 11.8% Total Loans $148,627 16.6% 4° Tot. M.S. Branches 162 14.9 Total Deposits $18,226 9.6 Total Loans$5,675 12.0 SOUTHEAST 5° 5° 5° 3° 4° MILLION PESOS. SOURCE: ABM M.S. MARKET SHARE. BRANCHES: INCLUDES BANKING MODULES AND EXCLUDES REMOTE COUNTERS; TOTAL DEPOSITS: INCLUDES CENTRALIZED OPERATIONS. TOTAL LOANS: INCLUDES IPAB AND FOBAPROA NOTES.

  23. TENDENCY OF IPC, GFNORTE, GFB (Monthly) JAN ’02 – FEBRUARY 13th’04 IPC 44% GFNORTE 104% GFB 20%

  24. Stock Performance 2004 2001 2002 2003 Feb 13th 39.0 41.8 25.5 STOCK PRICE 19.1 GROWTH VS 2001 104.2% 118.8% 33.5% PS - 66.4% 83.2% 17.5% USD - P / BV GFNORTE 1.46 1.57 1.14 0.99 1.50 BBVA BANCOMER 1.78 1.40 1.91 GFBanorte's P/BV Discount to GFBB's (48)% (19)% (3)% (12)% 2.2 7.7 2.1 1.6 DAILY VOLUME (USD Million)

  25. Dividends Ps 0.7 Ps 1.0 Dividend / Share 18% 33% Payout ratio (1) 2.1% 4.4% Yield (2) • Ps 500 millions / Net Income as of 2001 Ps 1,587.9 millions; Ps 353 millions / Net Income as of 2002 Ps 2,016.0 millions • $ 1 / Share Price as of Sep’ 2002 $ 22.99; $ 0.70 / Share Price as of Sep’ 2003 $ 33.16

  26. Outlook • Traditional Loan Portfolio growth: • Low Cost Deposit growth: • Asset Quality: • NIM: • Non Interest Income: - Service fees: - Recovery fees: • Capital Management: improving steadily improving slowly stable improving slowly improving slowly stable cash dividend

  27. GFNORTE 4Q03 Results

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