1 may, 2001 g r u p o f i n a n c i e r o laredo national bank

1May, 2001May, 2001

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

Laredo National BankLaredo National Bank

2

I. GFNORTE RESULTSI. GFNORTE RESULTS• Relevant InformationRelevant Information

• ProfitabilityProfitability

• Asset QualityAsset Quality

• CapitalizationCapitalization

• Other SectorsOther Sectors

• InternetInternet

• Efficiency Projects & AlliancesEfficiency Projects & Alliances

II. TRADITIONAL BANKING BUSINESS(Banking II. TRADITIONAL BANKING BUSINESS(Banking

Sector)Sector)

III. III. MANAGEMENT’S VISION & STRATEGIESMANAGEMENT’S VISION & STRATEGIES

ContentsContents

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I . GFNORTE RESULTSI . GFNORTE RESULTS

4

GFNORTEGFNORTE

AuxiliaryOrganizations

5.4%

Long TermSaving

8.1%

Group’s IntegrationGroup’s Integration

% Group´s Investment in Subsidiaries.

March 2001.

BancentroBancentro

Banorte(Banpais)

Banorte(Banpais)

Banking

84.5% 2.0%

Brokerage

AnnuitiesAnnuities

Pension Funds

Pension Funds

InsuranceInsurance

FactoringFactoring

WarehousingWarehousing

LeasingLeasing

BondingBonding

Brokerage

House

Brokerage

House

5

GFNorte’s organization is structured for servicing clientsGFNorte’s organization is structured for servicing clients

BANORTE’S GENERAL DIRECTION

Government Banking

Government Banking

Investor Relations

Investor Relations

NON TRADITIONAL

BANKING BUSINESS

Specialized areas

• Commercial, Corporate, Middle Sector and Private Banking

Territorials

• Monterrey, West, México City, Northeast, Northwest and Southeast

• Marketing

• Legal

• Treasury

• e- Business

• Long Term Savings

Sector

• Recovery Bank

CorporateDevelopmentCorporate

Development

Public RelationsPublic

Relations

DON ROBERTO GONZALEZ BARRERAPresident

DON ROBERTO GONZALEZ BARRERAPresident

Corporate Examiner

Corporate Examiner

SUPPORT & CONTROL

• Risk Management

• Technology and

Operations

• Human Resources

• Planning and Control

OTHÓN RUIZ MONTEMAYORVice-President & GFNorte’s General

Director

OTHÓN RUIZ MONTEMAYORVice-President & GFNorte’s General

Director

6

Banorte became a national bank improving its Banorte became a national bank improving its market positionmarket position

Dec96

%

Branches 156 2.3

States 7

Mar01

453

32

5.9

%

3.6 8.2

8.43.3

Dec ‘96%

Branches

10° 5°

10° 5°

6.8 12.35° 5°

MARKET COVERAGEMARKET COVERAGE

Rank

Mar ‘01% Rank

Market

14° 6°

BANORTE

BANCENTRO

BANPAIS

Total Deposits

Loans

Non InterestDeposits

Source: A B.M. Mkt. % for deposits excludes Financial Intermediaries and refers to Banking Sector exclusively. Loans include Fobaproa and source CNBV (December 2000).

7

Banorte has a national presenceBanorte has a national presence

TOTAL M.S.Branches* 453 5.9% Deposits** $106,651 8.2%

TOTAL M.S.Branches* 453 5.9% Deposits** $106,651 8.2%

March 2001

Tot. M.S. Branches 68 12.4 Deposits $14,971 22.4

Tot. M.S. Branches 100 4.9Deposits $25,721 4.1

Tot. M.S. Branches 33 3.0 Deposits $4,469 4.0

Tot. M.S. Branches 118 13.5 Deposits $38,339 28.4

Tot. M.S. Branches 104 6.3 Deposits $19,003 9.4

Tot. M.S. Branches 30 2.0 Deposits $4,148 2.5

MONTERREY

NORTHEAST

MEXICO

SOUTHEAST

WEST

NORTHWEST

M.S. Market ShareMillion Pesos. * Includes Modules ** Excludes centralized operations.

8* March 2001Includes the Banking and Brokerage Sectors.

142 301627 889

1,9002,324

1994 ‘95 ‘96 ‘97 ‘98 ‘99

2,818

2000

Checking Account 50.4%Investment 36.0%Credit Card 7.1% Credits 2.3% Money Market 1.9%Mortgage 2.0%Brokerage 0.3%Total Accounts 100.0%

Products % Accounts

Our Client base has increased through time as Our Client base has increased through time as Banorte has reinforced its presence in traditional Banorte has reinforced its presence in traditional

entities and moved further into new territoriesentities and moved further into new territories

NUMBER OF CLIENTSNUMBER OF CLIENTS(Thousands)(Thousands)

2,635

2001*

9

1,4681,4341,341

95130 212 408986

7,8346,286

4,548

218990

1,988

3,318

9,1309,037

7501,538

2,458

3,750

6,398

9,512

Supported on Banorte´s technological platform, Supported on Banorte´s technological platform, electronic and phone banking have grown aggressivelyelectronic and phone banking have grown aggressively

March 2001; * Tradicional & Internet; Call Center = Number of calls

Transactions1Q01

(millions)

POS

PC Banking

ATM’s

1.9

5.1*

26.2

Call Center 2.9

Units

1994 1995 1996 1997 1998 1999 2000 1Q01

10

TRANSACTIONS BY DISTRIBUTION CHANNEL1Q01

More than 50% of all transactions are channelled through More than 50% of all transactions are channelled through electronic bankingelectronic banking

5.4%

ATM BRANCH PCBANKING

TELEPHONEBANKING

POS INTERNET

3.7%

2.4%

37.5%44.3%

6.8%

March, 2001.

11

ProfitabilityProfitability

12

ACCUMULATED NET INCOMEACCUMULATED NET INCOME

GFNorte has maintained constant GFNorte has maintained constant earnings growthearnings growth

Book Value 10.4 9.0 12.6 14.7 16.2 15.4 16.1Per Share (*)

1,537.2

1,250.4

1,572.7

692.4712.2

'95 '96 '97 '98 '99

1,699.8

‘00

837.2

1,146.9

527.2

1T’01

1Q’00463.8

Millions as of March 2001. (*) Based on 492.8 millions of shares.

Extraordinary Income: 1997: $700.1 & 1998: $425.7 ExtraordinaryIncome

13

GFNORTE EARNINGSGFNORTE EARNINGS1 Q 20011 Q 2001

A major contribution to earnings was that of A major contribution to earnings was that of the Banking Sector with 91% of total Group´s the Banking Sector with 91% of total Group´s

earningsearnings

4%1%1%3%

91%

BANKING

BROKERAGE

LONG TERM SAVINGS

HOLDING

AUXILIARY ORGANIZATIONS

14

GFNorte Accumulated Net IncomeGFNorte Accumulated Net Income

MARCH 2001

Long TermSavings

MAYORITY SHARE IN MILLION PESOS, BANKING SECTOR NCLUDES UDIS.

$12.2

GFNorte Net Income

$527.2$480.4

BankingSector

$5.4

Holding

$6.9

Brokerage House

91% $22.2

AuxiliaryOrganizations

TOTAL

1 Q‘00

$431.2

1 Q ‘01

$527.2

Banking Sector 358.5

Auxiliary Organizations 13.6

Holding (1.3)

480.4

22.2

5.4

Brokerage House 17.5 12.2

Long Term Savings 6.943.0

15

NET INCOME PER SHARENET INCOME PER SHARE(Pesos / Share)

GFNorte increased its net income per share GFNorte increased its net income per share by 36%by 36%

3.40

2.50

1999 2000

Pesos as of December 2000.

36%

16

... and during 1Q01, net income per share ... and during 1Q01, net income per share increased 14%increased 14%

Pesos as of March 2001.

1.07

0.94

1Q’00 1Q’01

14%

NET INCOME PER SHARENET INCOME PER SHARE(Pesos / Share)

17

ROE ROE

Source: Press Release each bank.

21.4%

GFNorte increased it’s ROE maintaining a market GFNorte increased it’s ROE maintaining a market leadershipleadership

29.8%

18.7%

26.8%

BA

NA

CC

I

GF

BV

A-

BA

NC

OM

ER

GF

NO

RT

E

6.9%

GF

BIT

AL

26.8%

1Q011Q00

GFNorte GFNorte

19.1%G

FS

AN

TA

ND

18

Asset QualityAsset Quality

19

The Banking Sector performing commercial, mortgage The Banking Sector performing commercial, mortgage and consumer loans showed a 9% increased in the and consumer loans showed a 9% increased in the

year and past due loans decreased by 8%year and past due loans decreased by 8%

23,266

21,409

1Q00 1Q01

9%

Millions as March 2001Performing loans not includes IPAB, governmental and financial entities.

4,210

4,582

1Q00 1Q01

8%

PERFORMING LOANSPERFORMING LOANS PAST DUE LOANSPAST DUE LOANS

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PAST DUE LOAN RATIOPAST DUE LOAN RATIO

BANAMEX BITAL BBVA -BANCOMER

BANORTESANTANDER-SERFIN

1.0%3.6%

5.3%

6.9%7.4%

3°

1Q’01

5.3%

1Q’00

5.3%

Banorte Banorte Banking SectorBanking Sector

Banorte has maintained a low level of past due loansBanorte has maintained a low level of past due loans

Data as of March ‘01.

21

RESERVE COVERAGERESERVE COVERAGE

BANORTEBBV -

BANCOMERBANAMEXBITAL SANTANDER-

SERFIN

489.3%

107.8%100.4%

111.4%103.5%

Banorte maintained a reserve coverageBanorte maintained a reserve coverageof 100.4%of 100.4%

Data as of March ‘01.

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CapitalizationCapitalization

23

CAPITALIZATION RATIOCAPITALIZATION RATIO

Capitalization ratio stood at 11.6% with rules of 2003Capitalization ratio stood at 11.6% with rules of 2003

11.6%11.6%

7.6%

BANAMEX BBVA -BANCOMER

BITAL BANORTESANTANDER - SERFÍN

14.4%

14.4%13.4%14.8% 17.3% (*)20.2%.W/O MARKETRISK

Data as of March 2001. (*) Rules 2001.

20032001 200320032001RULES OF:

12.8%

24

Others SectorsOthers Sectors

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Millions as of March 2001. Wholesale Participation. 1) Dic ‘00. 2)Sep ‘00. Market Share: Afore & Annuities: Number of Affiliated; Bancassurance: Premiums; Brokerage House: Assets under management; Factoring & Leasing: Total Loans.

Other sectors are profitable and have gained market Other sectors are profitable and have gained market shareshare

Net Income

Market Share

Net Income

Market Share

1Q00 1Q01

18.8 5.2% 12.2 5.6% 2)

9.2 24.8% 12.4 19.9% 1)

4.2 4.8% 6.5 4.8% 1)

0.6 1.9

0.7 1.4

34.1 8.8% 31.3 8.9%

(2.1) 1.5% (19.4) 1.2% 1)

9.1 9.7% (5.0) 10.5%

Brokerage House

Leasing

Factoring

Warehousing

Bonding

Afore

Bancassurance

Annuities

Long Term Savings:

Brokerage Sector:

Auxiliary Organizations:

N.A.

N.A. N.A.

2.6% 2)

26

www.banorte.comwww.banorte.com

27

Since 1995 Banorte has had presence in Internet Since 1995 Banorte has had presence in Internet through www.banorte.com and through www.banorte.com and

has increased its acceptance in the markethas increased its acceptance in the market

Home Banking.- with more than 150,000 transactions per month

and 55,587 clients.

Business PC Banking.- with more than 560,000 transactions per

month and 4,089 business.

Our new services include:

Credit Card payments for e-commerce businesses and Internet

virtual credit card.

Acquisition and payments of Banorte-Generali insurance policies by

Internet.

Stock and mutual funds trading.

28

Efficiency Projects Efficiency Projects

& Alliances& Alliances

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EVOLUCIONAimed to improve the efficiency of the Group’s operations, to

control operative risk , to reduce the organizational structure cost

and to improve internal control.

TRANSFORMACION

Implement a more efficient credit process that allows to optimize

the risk and profitability levels.

PROFITABILITY

Automated profitability measurement of each business area by territory, branch, product and client. This tool is fundamental for decision making.

In order to improve it’s operating efficiency, In order to improve it’s operating efficiency, GFNorte has three main projects in processGFNorte has three main projects in process

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...........................................................Caja de Ahorros de Valencia, Castellón y Alicante

GFNorte has made several alliances aimed to GFNorte has made several alliances aimed to improve its valueimprove its value

Banorte clients will have access to spanish bank services and viceversa.

Third more important company in money transfers from USA to Mexico, which Banorte get into this market.

Development in tourist destinations.

Automotor financing.

This site’s users will be able to access GFNortes’s products and financial services.

Development of virtual investments’ Brokerage simulator.

Provide financial services to this site’s clients and offer its site’s information to Banorte’s clients.

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II . TRADITIONAL BANKING II . TRADITIONAL BANKING BUSINESSBUSINESS

(Banking Sector)(Banking Sector)

32

CONCEPT1 Q

2000 %$1 Q 2001

MILLION PESOS * SUPPOSING FUNDING COST CETES + 0.5

TOTAL OPERATING

TRADITIONAL BANKING BUSINESS

NON BANKING BUSINESS

RECOVERY BUSINESS

(-) TECHNOLOGY AND MARKETING

(-) RESERVES

(+) IPAB

(+) EXTRAORDINARY PARTIES

(+)FISCAL AND SUBSIDIARIES

NET INCOME

62

520

844

315

45

193

(107)

(175)

394

(18%)

(57%)

18%

(11%)

312%

(70%)

N.A.

N.A.

34%

47

210

924

261

173

53

81

(133)

491

262 176%667 425

(10)

(275)

140

(31)

131

(126)

29

124

181

VARIATION

Banking Sector Statement of IncomeBanking Sector Statement of Income

TRADITIONALBANKINGBUSINESS

1 Q1 Q

262

2 Q2 Q

292 413

4 Q4 Q

348

3 Q3 Q

667

1 Q1 Q

20002000 20012001

MILLION PESOS

33

III. MANAGEMENT’S VISION III. MANAGEMENT’S VISION & STRATEGIES& STRATEGIES

34

The GFNorte’s strategy follow-up has generated The GFNorte’s strategy follow-up has generated good results which has been recognized by good results which has been recognized by

international analystsinternational analysts

January 9 of this year, the prestigious international ratings firm Fitch:

Gave the ”C/D” rating to Banco Mercantil del Norte for

INDIVIDUAL STRENGTH, the highest rating ever granted to a

Mexican Banking Institution.

Gave the ratings BBB- for national currency and BB+ for foreign

currency, the latter being limited only by the prevailing risk ceiling.

Its outlook for Banorte is “POSITIVE”, which confirms the financial

strength of this institution.

35

GFNorte faces market trends with a clear strategy GFNorte faces market trends with a clear strategy which has been profitablewhich has been profitable

PROFITABILITY

IPAB

Revenues

Interest

Rate

Risk ControlRisk Control

New Loans

Non Interest Income

Deposit Volume and Mix

Non InterestExpense

Recovery Bank

36

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