1Q20 1 A Leading Bank in Mexico Globally Recognized Balanced - PowerPoint PPT Presentation

Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 1Q20 1

A Leading Bank in Mexico Globally Recognized Balanced business mix Strong retail, wholesale and premium banking platforms. Sound Fundamentals Solid asset quality, increasing profitability, high liquidity and strong capitalization ratios. Investment grade ratings S&P, Fitch, Moody's and HR Ratings. Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 2

Nation Wide Operation 1,178 Branches 9,090 ATM ´ s 166,225 POS ´ s 13,694 Correspondents Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 3

From Regional to Leading and Innovative Bank 20 | 20 Client Segmentation Business Diversification IT: central DB, & Consolidation multichannel Inorganic Growth Profitability Regional Bank 1899 1982-2092 1995 2000 2010 2018 … Nationalization Privatization Establishment   Bancentro  Afin  IXE G.F.  Banpaís Interacciones  Bancrecer Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 4

Deposit & Loan Market Share Feb 2020 Deposits Loans 2 ° 3 ° Source: CNBV. Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 5

Loan Portfolios Market Share Consumer C. Cards Mortgage Commercial Government Deposits Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Feb-19 Feb-20 Banorte 12.2% 12.1% 9.7% 9.9% 19.5% 19.2% 10.8% 10.3% 34.3% 29.9% 14.7% 13.6% BBVA 28.0% 29.4% 27.5% 27.4% 25.9% 26.0% 18.9% 19.6% 24.1% 26.6% 21.6% 22.1% CitiBanamex 15.2% 13.1% 27.2% 26.7% 10.1% 9.4% 12.6% 12.1% 5.9% 5.8% 14.7% 14.5% Santander 8.7% 8.8% 14.1% 14.2% 16.9% 16.5% 13.3% 13.2% 12.0% 12.7% 13.6% 13.0% HSBC 6.3% 6.6% 5.6% 5.7% 6.1% 7.2% 8.7% 7.9% 6.3% 5.9% 8.1% 8.2% ScotiaBank 5.2% 5.2% 2.7% 2.8% 15.0% 15.2% 7.1% 7.5% 1.7% 2.4% 6.3% 6.5% Inbursa 4.8% 4.1% 4.1% 4.1% 0.7% 0.6% 0.0% 0.0% 4.1% 5.8% 3.2% 3.1% Others 19.6% 20.6% 9.0% 9.2% 5.9% 6.0% 28.7% 29.3% 11.6% 11.0% 17.8% 19.0% 3° 4° 2° 4° 1° 3° Market Position Source: CNBV. Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 6

Transformation to Digital Bank Centered on the Client 2015 DISTRIBUTION PRODUCTS & CHANNELS SOLUTIONS Revenues Mobile Deposits & Loans Internet Insurances Digital Bank Client Segmentation ATM Pension ▪ 12 million clients ▪ Structured Info & Learning Contact Center Annuities ( Central DB & Watson ) Cost Branches Wealth Mngt. ▪ Behavior understanding Analitics … … 20/20 PROCESSES Account opening - Credit Analisis Next Best Offer – Next Best Action Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 7

Digital Transformation Gaining Share Transactions (Tx) Customers Using Digital Transactions Growth +113% (millions) 232.1 250 Branches 4.28 4.21 4.12 4% 3.90 200 WEB POS 3.50 24% 19% 150 Call Center 2% 100 1% Correspondents < 80.5 50 28% 22% 41.4 ATM Mobile 0 1Q 3Q 1Q 3Q 1Q 3Q 1Q 1Q19 2Q19 3Q19 4Q19 1Q20 2017 2018 2019 2020 Digital Deposit Account Mobile Credit Card as a Payroll loans Point of Sale Time Deposits Mutual Funds Insurance Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 8 *

Mobile Product Segmentation • Security / transactional & sales functions (>70) • The born in social media, Banorte Go Individuals • CoDi payments • Cash Management • Payments • SMEs Services • Credit • Reporting • Security management Corporates • Reporting Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 9

Adapting the Business & Infrastructure to the New Payments Market Continuous growth on POS’s transactions The best DIGITAL PLATFORM with emphasis on e-commerce for aggregators POS’s Transactions Millions 150.0 +27% 100.0 50.0 1Q 3Q 1Q 3Q 1Q 3Q 1Q 2017 2018 2019 2020 CoDi – Test Pilot and further development underway Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 10

R esults Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 11

Bank Net Interest Margin NIM 6.6% 6.4% 6.3% 6.3% 6.2% 6.5% 5.8% 6.0% 5.2% 5.5% 4.9% 4.8% 4.7% 5.0% 4.5% 4.5% 4.1% 4.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20 NIM (Post-Provision) 5.2% 5.5% 5.0% 4.8% 4.8% 4.7% 5.0% 4.5% 4.5% 3.7% 4.0% 3.6% 3.6% 3.5% 3.5% 3.2% 3.5% 3.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20 Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 12

Improving Efficiency Cost to Income 56.0% 54.0% 53.7% 55% 50.9% 50.5% Reported Reported 47.5% 50% 40.5% 41.4% 42.3% 45.0% 43.8% 43.7% 43.7% 43.1% 43.0% 45% 41.4% 41.6% 40% *Recurring 35% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20 * Recurring Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 13

Strong Net Income Net Income Million Pesos CAGR +14% +17% 2011-2019 * Recurring YoY 0.4% YoY* 10,500 30,000 27,493 10,000 27,500 24,834 9,500 26,289 25,000 9,000 23,158 22,500 8,500 Reported 20,000 8,000 7,362 18,339 7,500 17,500 6,848 6,730 6,553 7,000 13,518 15,044 15,000 6,180 6,157 12,122 11,936 6,500 10,888 12,500 6,000 8,517 10,000 5,500 7,500 5,000 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20 * Recurring Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 14

Constant Positive growth in Profitability ROA Reported: 3.0% 2.50% 2.5% 2.36% 2.27% 2.37% 2.32% 2.26% 2.0% 2.25% 2.10% 2.11% 2.02% 1.79% 1.5% 1.1% 1.60% 1.56% 1.47% 1.40% 1.30% 1.0% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20 * Recurring ROE Reported: 30% 26.2% 25.7% 24.2% 23.9% 23.6% 22.8% 25% 22.2% 21.7% 20.3% 24.1% 23.4% 20% 16.4% 14.8% 14.3% 14.1% 13.7% 13.7% 15% 10% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 1Q19* 2Q19 3Q19 4Q19 1Q20 * Recurring Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 15

L oans D eposits Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 16

Healthy Funding & Loan Portfolio Structure Billion Pesos $807 bn 2019 1Q20 Funding US 34.4 bn $757 bn Interbank Interbank Money Money Loans Loans Market Market 8% 2% Demand 34% Demand Time Time 56% $763 bn 2019 1Q20 Loan Portfolio US 32.5 bn $744 bn Consumer Consumer 15% Government 21% Government Mortgage 23% Mortgage 22% Commercial Commercial 19% Corporate Corporate Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 17

Loyal Deposits Base Billion Pesos CAGR: Deposits +10% YoY 681 667 Time Demand Core Deposits +9% 700 637 637 632 623 590 551 600 509 454 500 436 YoY 438 414 401 397 396 384 394 +15% 384 351 400 300 YoY 255 300 236 236 229 229 227 223 (1%) 194 168 158 200 136 129 100 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 MIX 1Q19 1Q20 Time Time 33% Demand 394 15% 454 38% 229 (1%) 227 Time Demand Demand 67% 62% 623 681 TOTAL 9% 2013 1Q20 Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 18

Continued Growth in Performing Loan Book, Special Focus on Consumer US 12.3 bn US 32.5 bn Total Loan Portfolio Consumer Portfolio 289 267 271 276 282 286 746 750 716 744 763 756 300 800 237 250 700 201 604 557 140 155 174 200 600 510 464 CAGR: CAGR: 118 150 500 389 420 +14% 98 +10% 335 100 400 300 50 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 1Q19 4Q19 1Q20 QoQ YoY Billion Pesos Mortgage 159 170 173 2% 9% Car Loans 25 27 27 2% 10% Credit Cards 37 40 39 (3%) 6% Payroll 51 50 50 1% (1%) 271 286 289 1% 7% Consumer Commercial 158 157 166 6% 5% Corporate 137 130 146 12% 6% Government 179 170 161 (5%) (10%) TOTAL 746 744 763 3% 2% Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 19

Loan Book View Currency Term Dollars 1 year 16% 11% UDIs 0% > 10 years 44% Pesos 89% 5 years 26% 14% Sector 10 years Other Subnational 22% 24% Government Transportation 8% 10% Federal 9% Manufacturing Government 18% 9% Commerce Services Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 20

Sound Asset Quality Past Due Loan Ratio 2.9% 3.0% 2.2% 2.0% 1.9% 1.9% 1.8% 1.7% 1.7% 2.0% 1.6% 1.6% 1.7% 1.0% 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Credit Cards 6.1% 6.3% 6.0% 5.5% 5.9% 5.9% 6.0% 5.4% 5.8% Payroll 2.9% 3.3% 4.1% 3.7% 3.0% 3.8% 3.4% 3.3% 2.7% Car Loans 0.9% 1.1% 1.1% 1.1% 0.9% 1.0% 1.0% 1.0% 0.9% Mortgage 0.9% 0.9% 1.0% 0.9% 1.0% 1.0% 1.1% 1.1% 1.2% 1.9% 2.7% 2.5% Commercial 2.6% 2.6% 2.3% 2.2% 2.5% 2.4% Corporate 3.0% 2.9% 2.8% 2.8% 2.7% 2.8% 2.7% 1.7% 1.7% Government 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total Banorte 1.9% 2.0% 1.8% 1.7% 1.7% 1.9% 1.9% 1.6% 1.7% Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 21