1 / 34

Banorte USA: Bi-National Financial Group in the US Market

Discover Banorte USA's vision to be a bi-national financial group offering integrated financial products and services in both US dollars and Mexican pesos to a diverse group of customer segments. Explore their three-pronged strategy for US expansion in private banking/wealth management, commercial/retail banking, and the remittance market.

sgordon
Download Presentation

Banorte USA: Bi-National Financial Group in the US Market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BANORTE USA September 2007

  2. Grupo Financiero Banorte’s Vision • To be a bi-nationalfinancial group offering integrated financial products and services to a diverse group of customer segments. • To be a bi-currencyfinancial group which offers a wide range of products and services in U.S. Dollars and Mexican Pesos.

  3. Bi-currency: Statistics • The Mexican banking system has approximately $14 billion in U.S. dollar deposits within the country. • It is estimated that Mexican Nationals have approximately $35 billion dollars in depositsin bank accounts and investments abroad. • Banorte wants to have a bigger share of its customers’ wallets on both sides of the border.

  4. Banorte’s U.S. Expansion Strategy Banorte has a Three-Pronged Strategy for U.S. Expansion: • Private Banking / Wealth Management (Brokerage Services) • Provide Mexican Nationals and U.S. Citizens dollar-denominated financial investment products (Banorte Securities International, Ltd.). • Commercial/Retail Banking • Provide financial products and services to facilitate cross-border transactions for businesses and individuals. • Remittance Market • Provide an integrated approach to remittances to the non/under-banked immigrant population living in the U.S.

  5. Banorte USA U.S. Bank Remittances International Business Brokerage/Investments

  6. Strategic Reasons for Entering the U.S. Market • Attractive local banking market • High growth rates • Cross border business • Foreign trade products and services • Bi-national products to individuals • Family remittances • Improve our position in the industry • Private banking market (México-US) • Synergies • Across all market segments • (Banorte México, Banorte US Bank, Banorte Securities, and Remittance Money Transmitter) • Geographical diversification of income for Grupo Financiero Banorte WA 6.1% 0.6% MT 2.2% OR 5.7% CT ID 8.5% 7.4% 2.5% Private Banking in US -High net worth US Residents -Mexicans Nationals WY US Banking Market Family Remittances PA NJ 7.1% 2.7% MD IA NV 4.0% 1.8% 13.9% CA UT IL 31.4% 6.2% WV VA 10.2% 0.6% CO 3.8% 13.8% MO KY 1.6% 0.8% NC AZ OK 20.9% NM 3.6% Cross Border Business 40.5% TX 2.7% 28.2% Binational products for individuals -Credit Cards -Mortgages -US based deposit accounts

  7. Synergies • Banorte and INB clients are already benefiting from expanded services from both banks: • Free fund transfers between Banorte and INB savings and checking accounts • Free withdrawal and account balance inquiries in ATM’s of both Banks • Acceptance of each others checks for deposit with next day availability in both currencies. • Banorte Securities Int’l, Ltd. (BSI) offices in McAllen & El Paso • Account opening process of accounts referred by Banorte to INB has resulted in the opening of over 3,000 accounts with $45 million in balances.

  8. New Products and Services • New Products Introduced Since Merger: • Mortgages to Americans purchasing Mexican Resort Properties: $38 million funded to date with $24 million at closing. Potential: 2008-$150 million, 2009-$250 million, 2010-$350 million • Loans secured by investment portfolios held by customers at BSI in dollars or at Banorte in pesos: $5 million funded to date with $20 million at closing. Potential: 2008-$60 million, 2009-$100 million, 2010-$150 million. • Banorte Securities offices have been introduced in INB offices: $72 million funded to date in new investment accounts. Potential: 2008-$125 million, 2009-$185million, 2010-$250 million • Competitive Foreign Exchange Platform

  9. New Products and Services • New Products Currently in Development: • New INB issued credit card program to be launched in 1Q, 2008. Potential: 2008-$15 million, 2009-$25 million, 2010-$50 million. • New trade financing loans programs to be offered in late 2007. Potential: 2008-$50million, 2009-$125 million, 2010-$200 million. • Enhanced treasury management services including lockbox, remote deposit capture and ACH services which should increase our non-interest income. • New Markets: Laredo and Brownsville, Texas to open 1Q, 2008.

  10. New Markets: Proposed New Branches LAREDO, TEXAS BROWNSVILLE, TEXAS Potential New Markets: SAN ANTONIO, TEXAS HOUSTON, TEXAS DALLAS, TEXAS SAN DIEGO, CALIFORNIA Details: • Approximately 4,100 sf facility • 3 drive-thru lanes & drive-up ATM • Completion is estimated for 1st Qtr 2008

  11. Private Banking/Wealth Management • Banorte Securities International, Ltd (BSI) markets its services to: • High net worth individuals in Mexico • Hispanics/US citizens and residents • Growth Strategy: • Grow organically by creating a dedicated sales force which focuses on the Hispanic population, including high net-worth Mexican nationals and Mexican-Americans residing in the U.S. • Currently has approximately $1.2 Billion in assets.

  12. Synergies • INB and Banorte Securities clients will benefit from expanded services from both Institutions: • Banorte Securities will refer clients to Inter National Bank, seeking bank accounts not available at BSI. • Inter National Bank will refer clients to Banorte Securities that seek brokerage accounts not available at Inter National Bank. • Inter National Bank can provide loans to BSI customers wishing to use their brokerage accounts as collateral.

  13. Remittances Market • Banorte has been a strong payer of remittances to customers in Mexico • Payment agreements with more than 30 U.S. licensed remittance companies (including UniTeller) and 3 major U.S. banks (BoA, Chase, and Wells Fargo) • Over to 4 million remittances paid in 2006 totaling $1.6 Billion (7% Mkt Share) • Banorte has been promoting banking the beneficiaries of remittances • Over 62,000 Enlace Express Accounts (without fees) • Strategy: Vertical Integration • Acquisition of UniTeller will streamline GFNorte’s remittance service • Access to a large number of under-banked clients on both sides of the border – additional business opportunities • Promote remittances to Banorte, and banking of beneficiaries • complements Banorte’s bancarization effort • UniTeller will benefit from additional financial resources, and correspondent banking relationships in the US as well as in other parts of the world

  14. Banorte’s Agreements w/ Major Corporations & Financial Institutions

  15. UniTeller • Acquisition of 100% of UniTeller • Transaction Closed on Jan. 18, 2007 • High Growth Industry: • Estimated $50 billion in remittances from the U.S. to Latin America in 2006 billion (close to $25 billion to Mexico alone) • Background: • Based in New Jersey • $1.12 Million transfers per year • Agent Network in the US: 1,000 collection agents in 41 States • Strong payment network: Over 4,000 payment points in 19 countries including top remittance destination countries • Strong payment network in Mexico’s rural areas, complementing Banorte’s banking network • Guatemala, Philippines, El Salvador • Strong compliance culture • Attractive technological infrastructure with enough capacity to support immediate growth

  16. UniTeller(cont’d) • Projects in Progress • Account Link (deposits to an account) • Product Improvements • Discounts on remittances from U.S. from Uniteller and Banorte • Payment options to Banorte accountholders • Marketing campaigns in conjunction with other U.S. transmitters to promote remittances

  17. Opportunity to integrate the non-banked: • Enlace Express is Banorte’s equivalent to free checking in the U.S.: • debit-card based • no minimum balances • or monthly fees • Since its inception, the Enlace Express product has achieved significant progress. # of Customers (In Thousands) 62,467 52,200 33,130 5,600 2004 2005 2006 Jun-2007

  18. BANORTE USA Results from Operations September 2007

  19. Dollar Denominated Assets IN MILLONS OF DOLLARS 2006 2007 Variance (%) JUNE DEC JUNE YTD Y on Y Demand 7% 699 745 748 0% 676 716 793 11% 17% Time Deposits 1,375 1,461 1,541 5% 12% Banorte Dollar Deposits 958 1,025 1,033 0% 8% BSI Mexico Accts Total Mexico 2,333 2,486 2,574 10% 3.5% 977 1,363 1,280 (6%) 31% INB 2 42 72 71% 3,316% BSI –INB Accts 979 1,405 1,352 (4%) 38% Total USA Total GFB 3,311 3,891 3,926 2% 18%

  20. Earnings - Banorte USA IN MILLIONSOF DOLLARS 2006 2007 Variance (%) JUNE DEC JUNE Y on Y International business- (México) Pre-Tax 21.5 58.2 25.0 16% INB Financial Corp. 9.4 17.9 11.9 27% Banorte Securities, Ltd. 0.8 1.3 70% 1.4 Uniteller Holdings, Inc. (0.1) (0.1) (0.4) (353%) Total Earnings 31.6 77.3 37.9 20%

  21. INB June 30, 2007 Highlights IN MILLIONS OF DOLLARS 1S07 1S06 Net Interest Margin 4.7% 4.5% 721 922 Loans 28% Deposits 977 1,277 31% Net Earnings 10.0 12.5 24% 43.5% 41.3% Efficiency Ratio 20.8% 23.7% ROE 1.8% 1.8% ROA

  22. Inter National Bank: Earning Assets vs. Cost of Funds

  23. Inter National Bank: Net Interest Margin

  24. Banorte Securities International, Ltd. IN MILLONS OF DOLLARS 2006 2007 Variance (%) JUNE DEC JUNE Y on Y Revenues 3.8 7.5 5.0 32% (2.9) (5.7) (3.3) 12% Expenses 0.9 1.8 1.7 102% Earnings from Operations 0.2 0.4 0.2 (4%) Investment Earnings Taxes (0.2) (0.8) (0.6) 132% 0.8 1.4 1.3 70% Net Earnings Note: Banorte Securities consolidates into Casa de Bolsa and not Banorte USA.

  25. Family Remittance Indicators - Mexico IN MILLONS OF DOLLARS 2006 2007 Variance (%) JUNE DEC JUNE YTD Y on Y Transactions (000’S) 7% 1,931 3,969 2,064 4% Paid in Cash $744 $1467 $755 - - Paid into Accounts $50 $119 $77 - - - - Total Paid $794 $1586 $832 5% 5% - - Direct Deposit % 6% 8% 9% Revenues $4.2 $9 $4.4 5% 4% No.of Accounts-EE 43,907 52,207 62,467 39% 42% Avg. Deposit Balances $17 $20 $22 20% 30%

  26. Family Remittances Paid in Mexico While the growth in the remittance market has slowed, Banorte continues to grow well above the rate of growth of other Mexican banks. Market Growth (1H06 vs. 1H07) 9 % 7% 0.6% Market Growth Non Banks (3%) (4%) Banorte Banks Banks w/o Banorte

  27. BANORTE USA Supplemental Information September 2007

  28. Inter National Bank: Loan Growth In Thousands % Growth 40% 34% 15% 36% Ann

  29. Inter National Bank: Net Loan Losses

  30. Inter National Bank: Deposit Growth In Thousands % Growth 18 % 29% 18% 45% YoY 31 %

  31. Inter National Bank: Account Growth % Growth 10% 7% 35% 14% 26% Ann

  32. Inter National Bank: Net Earnings 38%

  33. Inter National Bank: Return on Average Assets

  34. Inter National Bank: Return on Equity

More Related