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New York, NY

Salomon Smith Barney 10th. Annual Latin American Conference March 7 and 8, 2002. New York, NY. I. BANCRECER’S INTEGRATION. Bancrecer’s acquisition contract was signed with IPAB. First payment by Ps 412.5 million pesos was made. Oct 05 ‘01 .

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New York, NY

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  1. Salomon Smith Barney 10th. Annual Latin American Conference March 7 and 8, 2002 New York, NY

  2. I. BANCRECER’S INTEGRATION

  3. Bancrecer’s acquisition contract was signed with IPAB. First payment by Ps 412.5 million pesos was made. Oct 05 ‘01 Banorte received the authorization to acquire Bancrecer from SHCP. Nov 30 ‘01 The remaining Ps 1,237.5 million pesos payment was made for a total of Ps 1,650 millions paid for Bancrecer. Additional Ps 15.9 millions out of interests. Dec 04 ‘01 Banorte received 100% of Bancrecer’s shares ending IPAB’s administration period. Jan 02 ‘02 Bancrecer’s stockholders’ meeting took place defining the new Board of Directors (same Banorte’s and Bancen’s Board members). Mr. Federico Valenzuela Ochoa was appointed as the new Bancrecer CEO. Jan 04 ‘02 Banorte took over the administrative control of Bancrecer and began the integration of the different areas into GFNorte’s organizational structure. Jan 08 ‘02 Bancrecer’s Acquisition ... Acquisition Process of Bancrecer performed as expected.....

  4. Bancrecer will contribute to profits since the first year REVENUE GENERATION WILL COME FROM: Cost savings stemming from the use of Banorte’s infrastructure and organization Definition of the optimal operative & technological platform Increase in client base and cross-selling of Banorte’s products

  5. Bancrecer´s aquisition improves Banorte´s ranking in Mexico BANORTE + BANCRECER BANORTE Ranking Ranking 4° Branches 1) 459 6° 1,186 4° ATM’s 1) 1,611 5° 2,583 4° Total Deposits 2) Ps 89,044 5° Ps 155,550 3° Total Loans 2) Ps 79,147 4° Ps 135,435 4° Total Assets 2) Ps 99,107 5° Ps 169,892 1) SOURCE A B.M. (DEC’01) 2) SOURCE CNBV (SEP.’01 IN MILLIONS OF PESOS), INCLUDES FOBAPROA-IPAB

  6. Bancrecer’s Integration October 5th STAGE I (4Q01) STAGE II (Jan 02) STAGE III (1Q02) STAGE IV (Apr-Dec 02) Transitory Administration Banorte Administration Administrative Integration Operative Integration • SHCP Authorization • End of IPAB’s administration • Asset Spin off CONCLUDED

  7. Bancrecer’s Integration October 5th Estimate time: 60 calendar days beginning January 2th. Banorte takes control of Bancrecer’s Administration. • External consultants to define the technological platform during 1Q’02. (Accenture & DMR from Spain). On February, 15th a personnel reduction of 413 employees took place with a monthly pay roll of Ps 7.8 millions, which represented a 12% reduction. Additional reduction is expected by the end of march 2002. • In-depth study of profitability and marketing. • Close 96 branches from Bancrecer. • Close 9 branches from Banorte. STAGE I (4Q01) STAGE II (Jan 02) STAGE III (1Q02) STAGE IV (Apr-Dec 02) Transitory Administration Banorte Administration Administrative Integration Operative Integration Start: • Bancrecer’s areas integration • Begin Corporate Structure Rationalization • Acquisition Due Diligence • Technological alternatives evaluation • Optimum branch network definition • Since December, the main corporate buildings of Banorte and Bancrecer were connected with voice, data and e-mail networks. • Computer centers of both institutions are to be integrated into Bancrecer’s Site located in Tlalpan, D.F. • Central processors will be replaced for new ones with more capacity.

  8. Bancrecer’s Integration October 5th An inter-operational project in branches is scheduled to begin by March 4th. Bancrecer’s branches in the main cities will be rebranded in April . STAGE I (4Q01) STAGE II (Jan 02) STAGE III (1Q02) STAGE IV (Apr-Dec 02) Transitory Administration Banorte Administration Administrative Integration Operative Integration • Technological Platform definition • Link the two main frames • Close branches • End the structure rationalization • Begin the image change

  9. Bancrecer’s Integration October 5th March 31th LEGAL MERGE OF BANCRECER STAGE I (4Q01) STAGE II (Jan 02) STAGE III (1Q02) STAGE IV (Apr-Dec 02) Transitory Administration Banorte Administration Administrative Integration Operative Integration • Technological and operative integration • Finish the image change • Asset divestment program

  10. II. 2001 GFNORTE RESULTS

  11. Highlights 2001 GFNorte’s Net Income (PS million) 1,504 ROE 17.2% EPS (Ps/per share) 3.01 Book Value 18.12 Capitalization Ratio 11.5% Traditional Banking annual loan growth 11.0% Consumer & Mortgage annual loan growth 69.0% Total Deposits annual growth 12.4%

  12. The client base and the distribution channels have experienced an important growth 57.9% ATM 21.2% BRANCHES PC BANKING E INTERNET 8.2% TELEPHONE BANKING 7.0% POS 5.7% 4,678 1,716 No. OF CLIENTS TRANSACTIONS PER DISTRIBUTION CHANNEL IN BANORTE 2,818 2,324 2,962 1,900 889 627 ‘01 ‘96 ‘97 ‘98 ‘99 ‘00 POS DISTRIBUTION CHANNELS 10,210 4,123 PC Banking 12,721 4,209 2,458 ATM’s 1,611 990 967 212 Dic ‘01 ‘96 ‘97 ‘98 ‘99 ‘00 ‘01 CLIENTS : INCLUDE THE BANKING SECTOR AND THE BROKERAGE HOUSE.

  13. GFNorte has followed a clear and successful strategy for increasing its profitability Strategy External Factors Deposit Volume and Mix Interest Rates New Loans Non Interest Income Non Interest Expense Profitability Criteria Recovery Bank Risk Control

  14. Total Deposits increased by 12.4%, driven by a 23.8% increase in Third Party Deposits MILLIONS OF PESOS 122,489 121,716 121,448 115,835 109,021 12.4% 4Q00 1Q01 2Q01 3Q01 4Q01 DATA AS OF DECEMBER

  15. During the last two years, the commercial and the consumer loan portfolios have grown considerably ... ... the corporate loans have practically remained the same and those of the Recovery Banking decreased DIC ‘01 DIC ‘99 CONCEPTO 8,342 12,205 COMMERCIAL 46% Mortgage 1,408 2,558 Credit Card 555 823 Automobile 1,292 211 Other 535 204 80% CONSUMER 2,709 4,876 CORPORATE 8,119 8,668 7% RECOVERY BANKING 8,880 (32%) 6,049 TOTAL 28,050 31,798 13% BALANCES IN MILLIONS OF PESOS. IT DOES NOT INCLUDE LOANS TO FINANCIAL AND GOVERNMENT ENTITIES (PS 4,421 IN DEC’01).

  16. Traditional loan portfolio showed an increase of 11.0%, driven by Consumer and Mortgage 80% Consumer and Mortgage 40% Traditional loan Portfolio Commercial 0% Corporate (40%) 4Q00 1Q01 2Q01 3Q01 4Q01 DATA AS OF DECEMBER ‘01.

  17. AMOUNT (Balance as of 31/Dec/01) TERM INTEREST RATE BANORTE (Loss Sharing) * 11,137 2005 91 Days Cete - 1.35% Loan Portfolio (Bancen y Banpaís) 35,382 2010 TIIE + 0.85% USD Fobaproa Note. (Banpaís) 4,771 2007 USD Cost of Funding. + 2% IPAB Note (Bancrecer) 46,270 2009 TIIE + 0.40% TOTAL $97,560 Bancentro, Banpais and Bancrecer´s acquisitions played a fundamental role in GFNorte growth strategy ... ... a big portion of the loan portfolio was substituted by FOBAPROA/IPAB loans and notes. 97,560 60% FOBAPROA/IPAB Loans 45,782 40% 45,145 71% Commercial Loans 51,290 21,494 51% 20,256 49% 35,764 18,492 29% 18,591 80% 4,453 20% Feb ‘97 Banorte Feb ‘97 Banorte+Bancen Dec ‘97 Banorte+Bancen + Banpaís Dec ‘01 Banking Sector Banorte + Bancrecer MILLIONS OF PESOS OF DEC’2001. * INCLUDES USD184 MILILON AT LIBOR (6 M) + 1% MATURING IN JUNE, 2006.

  18. GFNorte increased its national market share with the acquisition of Bancrecer Bancrecer Bancrecer Bancen & Banpais Bancen & Banpais DEPOSITS LOANS SOURCE A B.M. MKT. % FOR DEPOSITS EXCLUDES FINANCIAL INTERMEDIARIES AND REFERS TO BANKING SECTOR EXCLUSIVELY. LOANS INCLUDES FOBAPROA SOURCE CNBV

  19. 100% 27% 1,153 2,606 19% $10,115 Eventhough assets under management of the Recovery Banking represent an important figure, the risk involved is low TOTAL BANORTE SHARED W/ IPAB IPAB Banorte 7,186 6,049 1,137 Bancen 2,718 2,718 Banpais 16,162 16,162 Banks acquired 18,880 18,880 Serfin 14,597 11,572 3,025 New Portfolios 11,463 11,463 Loans purchased or managed-IPAB 26,060 11,463 11,572 3,025 TOTAL LOAN PORTFOLIOS 52,126 17,512 12,709 21,905 REPOSESSED ASSETS 8,899 1,191 2,321 5,387 TOTAL ASSETS $61,025 $18,703 $15,030 $27,292 100% 30% 25% 45% MILLIONS OF PESOS OF DECEMBER 2001.

  20. Banorte has maintained its Net Interest Margin level despite the market interest rate drop in 2001 17.0% 16.8% Cete 28 days 12.4% 8.6% 7.5% 6.3% 5.9% 5.7% 4.7% 5.2% NIM % 4Q00 1Q01 2Q01 3Q01 4Q01

  21. Fees on services and trading have increased their contribution to Non Interest Income MILLIONS OF PESOS 1,922.4 1,925.2 SERVICES 37% 57% TRADING FIDUCIARY 63% 43% FOBAPROA 2000 2001 NOTE: 2001 FIDUCIARY INCOME IS INCLUDED AS A NET AMOUNT FOR COMPARISON PURPOSES. SINCE 3Q01 THE SERFIN LOAN TRUST WAS CONSOLIDATED.

  22. The operative expense control has been fundamental ... ... resulting in a 16% expense decrease from 1999 to 2001. OPERATIVE EXPENSE 7,488 6,293 6,175 16% 1999 2000 2001 MILLIONS OF PESOS OF DECEMBER 2001

  23. GFNorte generated profits for PS 1,504 million in 2001 ACCUMULATED NET INCOME IN 2001 MILLIONS OF PESOS BANKING PS 1,272 85% LONG TERM SAVINGS $90 6% AUXILIARY ORGANIZATIONS $69 4% BROKERAGE $31 2% HOLDING $42 3% GFNORTE PS 1,504 100%

  24. GFNorte has obtained high ROE´s ROE 20.7% 17.2% 15.1% 1999 2000 2001

  25. After Bancrecer´s acquisition, Banorte´s capitalization ratio remained similar as of 4Q’00 15.6% 15.4% 11.5% 12.0% 11.4% 4Q00 1Q01 2Q01 3Q01 4Q01 IN 2Q01 THE CAPITALIZATION RATIO WAS STRENGTHENED BY A NON CONVERTIBLE SUBORDINATE-BONDS ISSUE FOR Ps 1,300 MILLION. BANORTE USES 2003 RULES SINCE 3Q00.

  26. Other divisions are profitable and have gained market share 2000 2001 Net Income Market Share Net Income Market Share Long Term Savings: Afore 9.1% 71.7 8.9% 88.3 Bancassurance 1.1% 4.8 1.0% 7.1 Annuities 9.7% (34.5) 9.8% (5.6) Brokerage: Brokerage House 8.5% 28.5 6.6% 31.3 Auxiliary Organizations: Factoring 26.5% 2) 44.5 29.8% 40.8 1) Leasing 6.2% 2) 24.3 4.7% 26.2 Warehousing 1.7% 3) 2.2% 14.3 8.7 Bonding 2.2% 2.5% 6.5 6.9 MILLIONS AS OF DECEMBER 2001. MAJORITY PARTICIPATION 1) INCLUDES PS13.2 MILLIONS TRANSFERED TO BANORTE DUE FISCAL STRATEGY.2) NOV ‘01, 3) SEP ‘01. MARKET SHARE: AFORE & ANNUITIES: NUMBER OF AFFILIATED; BANCASSURANCE: PREMIUMS; BROKERAGE HOUSE: VARIABLE EQUITY; FACTORING & LEASING: TOTAL LOANS, BONDING: SURETIES SOLD.

  27. III . COMPARATIVES TO THE INDUSTRY

  28. GFNorte´s ROE ranks among the highest in Mexico ROE DECEMBER 2001 36.9% 17.2% 16.2% 2° 8.3% * 5.9% GFSANTANDER GFNORTE GFBVA- BANCOMER BANACCI GFBITAL SOURCE: PRESS RELEASE EACH BANK. * AS OF SEPTEMBER 2001

  29. After integration, banks improves their ROE 40% Santander Serfín 30% 20% GFNorte BBVA Bancomer 10% 0% 1999 2000 2001 GFNorte 13.7% 20.7% 17.2% BBVA Bancomer 11.2% 5.6% 16.2% Santander Serfín 15.2% 12.1% 36.9% Data as of Dec 01

  30. Banorte has maintained a low level of past due loans PAST DUE LOAN RATIO DECEMBER 2001 7.0% 5.5% 5.0% 4° 4.5% 0.9% SANTANDER- SERFIN BANAMEX BBVA - BANCOMER BANORTE BITAL

  31. The capitalization ratio stood at 11.5% with rules of 2003 CAPITALIZATION RATIO 2001 2001 2003 2003 2003 RULES OF: 16.6% 13.1% 12.1% 11.5% 11.0% SANTANDER - SERFÍN BITAL BANAMEX BANORTE BBVA - BANCOMER W/O MARKET RISK 13.4% 23.2% 14.5% 14.7% 18.6% (*) Data as of December ‘01 from the Press Release of each bank.

  32. IV. GFNORTE, 10 YEARS AFTER THE PRIVATIZATION

  33. GFNorte, 10 years after the privatization ... ... it has EVOLVED successfully in the Mexican Banking System obtaining profits and ROE’s that have positioned it as the 4th bank in Mexico in terms of deposits and the 3rd. in credit loans. ... it has followed a SUCCESSFUL STRATEGY that has allowed its “Traditional Banking Business” to become more important every day. ... it EXPANDED in the Pension Fund Management, Bank Assurance and Annuities businesses becoming an important player in the System.

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