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
3
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
20
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.
22
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
25
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
29
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
30
...........................................................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.
31
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