2Q20 1 History and Business Highlights 3 Market Presence 7 - - PowerPoint PPT Presentation

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Nov 27, 2023 434 likes •779 views

Us Mkt TI NIM Rev C / I NI ROE L/D Dep Loan ICAP App 2Q20 1 History and Business Highlights 3 Market Presence 7 Digital Bank 9 Results 13 NIM 14 Cost to Income 15 Net Income 16 ROE / ROA 17 Deposit & Loans 18

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

2Q20

SLIDE 2 2 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us History and Business Highlights 3 Market Presence 7 Digital Bank 9 Results 13 NIM 14 Cost to Income 15 Net Income 16 ROE / ROA 17 Deposit & Loans 18 Loans / Deposits 19 Deposits growth 20 Loan growth 21 Asset Quality - NPL 23 CAR 27 Appendix 29

SLIDE 3 3 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

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.

SLIDE 4 4 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Nation Wide Operation 1,180

Branches

9,060

ATM´s

162,127

POS´s

16,035

Correspondents

SLIDE 5 5 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

From Regional to Leading and Innovative Bank

20 | 20

Establishment 1899 1982-2092 1995 2000 2010 2018 Privatization  IXE Afin  Bancentro Banpaís Bancrecer … Inorganic Growth Regional Bank Business Diversification & Consolidation Client Segmentation IT: central DB, multichannel Profitability Nationalization  G.F. Interacciones

SLIDE 6 6 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

20/20

Transformation to Digital Bank Centered on the Client

PRODUCTS & SOLUTIONS Deposits & Loans Insurances Pension Annuities Wealth Mngt. … DISTRIBUTION CHANNELS Mobile Internet ATM Contact Center Branches … PROCESSES Account opening - Credit Analisis Next Best Offer – Next Best Action Client Segmentation ▪ 12 million clients ▪ Structured Info & Learning (Central DB & Watson) ▪ Behavior understanding Analitics Cost Revenues Digital Bank

2015

SLIDE 7 7 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us BBVA 23% Banorte 14% Santander 13% CitiBanamex 13% ScotiaBank 8% HSBC 7% Inbursa 4% Others 18% BBVA 23% CitiBanamex 15% Santander 13% Banorte 13% HSBC 8% ScotiaBank 7% Inbursa 3% Others 18%

Loans

May 2020

Deposits

2°

Deposit & Loan Market Share

Source: CNBV. 4°

SLIDE 8 8 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us Consumer

C. Cards

Mortgage Commercial Government Deposits May-19 May-20 May-19 May-20 May-19 May-20 May-19 May-20 May-19 May-20 May-19 May-20 Banorte 12.1% 12.2% 9.7% 10.2% 19.4% 19.3% 10.2% 10.2% 34.6% 29.4% 13.9% 13.2% BBVA 28.6% 29.4% 27.6% 28.1% 25.9% 26.1% 18.6% 19.5% 24.8% 28.1% 21.9% 23.2% CitiBanamex 14.6% 12.6% 27.0% 26.0% 10.0% 9.0% 12.4% 12.8% 6.4% 7.5% 14.3% 14.6% Santander 8.8% 8.9% 14.2% 14.3% 16.7% 16.5% 13.2% 13.1% 12.0% 13.9% 13.4% 13.4% HSBC 6.3% 6.5% 5.6% 5.8% 6.4% 7.3% 8.9% 8.0% 5.2% 6.4% 8.4% 8.0% ScotiaBank 5.2% 5.1% 2.7% 2.7% 14.8% 15.3% 7.2% 7.7% 1.8% 2.6% 6.5% 6.5% Inbursa 4.7% 3.9% 4.1% 4.2% 0.6% 0.6% 0.0% 0.0% 3.2% 2.3% 3.1% 2.9% Others 19.7% 21.3% 9.1% 8.7% 6.1% 6.0% 29.5% 28.7% 12.0% 9.9% 18.4% 18.2% Market Position 3° 4° 2° 4° 1° 4°

Loan Portfolios Market Share

Source: CNBV.

SLIDE 9 9 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 9

Fast Moving to Self-service/Digital Operations

Transaction Change Jun vs Feb Account statements 408% Check deposit 100% Payment of Services 91% Transfers 31% Payment to Credit Card 23% Registration of Clarifications 140% Lock and unlock of Credit Card 32% Initial Activation of Credit Card 8% Balance and Movements Consultation 20% Mobile recharge 15% 1 2 3 4 5 6 7 8 9 10

Self-service Served by staff Physical Remote

WEB and Mobile Contact Center Branch ATM NPS

SLIDE 10 10 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 39.2 69.2 141.9 223.9 249.8 50 100 150 200 250 300 1Q 2017 3Q 1Q 2018 3Q 1Q 2019 3Q 1Q 2020

Digital Transformation Gaining Share

Transactions Growth Transactions (Tx) Customers Using Digital (millions)

+76%

24% 32% 19% 2% 1% 19% 3% WEB Mobile ATM Call Center Correspondents < POS Branches 3.50 3.90 4.12 4.21 4.28 4.30 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 *

Time Deposits Mutual Funds Credit Card Insurance Digital Deposit Account Payroll loans

Mobile as a Point of Sale

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

Mobile Product Segmentation

Individuals SMEs Corporates

Security / transactional & sales functions (>70)
The born in social media, Banorte Go
CoDi payments
Cash Management
Payments
Services
Credit
Reporting
Security management
Reporting

SLIDE 12 12 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Adapting the Business & Infrastructure to the New Payments Market

The best DIGITAL PLATFORM for aggregators CoDi – Test Pilot and further development underway Recovery on POS’s transactions pre COVID-19 with emphasis on e-commerce

54 42 56 10 20 30 40 50 60 ene-20 feb-20 mar-20 abr-20 may-20 jun-20

POS’s Transactions

SLIDE 13 13 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Results

SLIDE 14 14 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 3.2% 3.6% 3.6% 3.5% 3.5% 3.7% 4.5% 4.8% 5.0% 4.9% 5.0% 5.2% 4.7% 3.0% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q19 3Q19 4Q19 1Q20 2Q20 NIM

Bank Net Interest Margin

NIM (Post-Provision) 4.1% 4.5% 4.8% 4.9% 4.7% 5.2% 5.8% 6.3% 6.4% 6.3% 6.5% 6.6% 6.3% 5.8% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q19 3Q19 4Q19 1Q20 2Q20

SLIDE 15 15 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Improving Efficiency

Cost to Income 56.0% 54.0% 53.7% 50.5% 50.9% 47.5% 45.0% 41.4% 43.0% 41.6% 43.1% 43.8% 43.7% 42.2% 35% 40% 45% 50% 55% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2Q19 3Q19 4Q19 1Q20 2Q20 * Recurring Reported 41.4% 42.3%

SLIDE 16 16 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 6,553 6,730 6,848 6,180 3,669 7,077 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2Q19 3Q19 4Q19 1Q20 2Q20

Strong Net Income

Net Income 8,517 10,888 12,122 11,936 13,518 15,044 18,339 23,158 26,289 24,834 27,493 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 27,500 30,000 2011 2012 2013 2014 2015 2016 2017 2018* 2019* Million Pesos CAGR 2011-2019 +17% (44.0%) YoY* +14% YoY * Recurring * w/o advanced provisions

SLIDE 17 17 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 1.1% 1.30% 1.60% 1.40% 1.47% 1.56% 1.79% 2.11% 2.26% 2.25% 2.32% 2.37% 2.02% 1.11% 2.27% 2.36% 2.14% 1.0% 1.5% 2.0% 2.5% 3.0% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2Q19 3Q19 4Q19 1Q20 2Q20 ROA

Constant Positive growth in Profitability

ROE 14.1% 14.3% 16.4% 13.7% 13.7% 14.8% 20.3% 24.1% 23.4% 22.8% 23.6% 23.9% 21.7% 12.4% 25.7% 24.2% 23.9% 10% 15% 20% 25% 30% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 2Q19 3Q19 4Q19 1Q20 2Q20 * Recurring Reported: Reported: * w/o advanced provisions * w/o advanced provisions

SLIDE 18 18 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Loans Deposits

SLIDE 19 19 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Healthy Funding & Loan Portfolio Structure

2019 2Q20 $757 bn Demand Time Money Market Interbank Loans $744 bn 2Q20 Consumer Commercial Mortgage Corporate Government Commercial Consumer Mortgage Government Corporate US 37.4 bn Demand Money Market Time Interbank Loans US 33.7 bn Billion Pesos

Funding Loan Portfolio

$864 bn $779 bn 2019 55% 31% 9% 5% 21% 22% 19% 23% 15%

SLIDE 20 20 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us Demand 68% Time 32% 129 136 158 168 194 223 229 236 236 229 227 224 255 300 351 384 397 414 394 396 401 438 454 482 384 436 509 551 590 637 623 632 637 667 681 706 100 200 300 400 500 600 700 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Time Demand Core Deposits 2Q19 2Q20 Demand 396 482 Time 236 224 TOTAL 632 706

Loyal Deposits Base

Demand 62% Time 38% MIX 2013 2Q20 Billion Pesos 22% (5%) 12% Deposits YoY +22% YoY (5%) 2013-2019 CAGR: +10% YoY +12%

SLIDE 21 21 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Continued Growth in Performing Loan Book, Special Focus on Consumer

US 33.7 bn Billion Pesos 2Q19 1Q20 2Q20 QoQ YoY Mortgage 163 173 177 2% 9% Car Loans 25 27 27 (2%) 5% Credit Cards 38 39 37 (3%) (1%) Payroll 51 50 51 2% 2% Consumer 276 289 293 1% 6% Commercial 156 166 171 3% 10% Corporate 133 146 153 5% 15% Government 185 161 161 0% (13%) TOTAL 750 763 779 2% 4% 335 389 420 464 510 557 604 756 746 750 716 744 763 779 300 400 500 600 700 800 2011 2012 2013 2014 2015 2016 2017 2018 1Q192Q193Q194Q191Q202Q20 Total Loan Portfolio 98 118 140 155 174 201 237 267 271 276 282 286 289 293 50 100 150 200 250 300 2011 2012 2013 2014 2015 2016 2017 20181Q192Q193Q194Q191Q202Q20 CAGR: +14% US 12.7 bn CAGR: +10% Consumer Portfolio

SLIDE 22 22 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Loan Book View

89% 0% 11% 17% 28% 12% 43% Currency Term 22% 10% 18% 10% 10% 9% 21% Sector 1 year 5 years 10 years > 10 years Pesos Dollars UDIs Subnational Government Federal Government Services Commerce Manufacturing Transportation Other

SLIDE 23 23 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Credit Cards 6.1% 6.3% 6.0% 5.5% 5.9% 5.9% 6.0% 5.4% 5.8% 5.5% Payroll 2.9% 3.3% 4.1% 3.7% 3.0% 3.8% 3.4% 3.3% 2.7% 3.3% Car Loans 0.9% 1.1% 1.1% 1.1% 0.9% 1.0% 1.0% 1.0% 0.9% 1.2% Mortgage 0.9% 0.9% 1.0% 0.9% 1.0% 1.0% 1.1% 1.1% 1.2% 1.3% Commercial 2.6% 2.6% 2.3% 1.9% 2.2% 2.5% 2.7% 2.5% 2.4% 1.1% Corporate 3.0% 2.9% 2.8% 2.8% 2.7% 2.8% 2.7% 1.7% 1.7% 0.2% Government 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% Total Banorte 1.9% 2.0% 1.8% 1.7% 1.7% 1.9% 1.9% 1.6% 1.7% 1.1% 2.9% 2.2% 1.8% 2.0% 1.7% 1.6% 1.7% 1.9% 1.9% 1.6% 1.7% 1.1% 1.0% 2.0% 3.0% 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

Sound Asset Quality

Past Due Loan Ratio 1.9bn on advanced write-offs

SLIDE 24 24 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us 2.2% 2.3% 2.0% 1.9% 1.9% 2.2% 2.0% 2.2% 4.4% 2.1% 2.5% 2.1% 2.4% 2.2% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Actual

Prev. Criteria

103% 106% 115% 139% 128% 142% 138% 136% 128% 127% 138% 140% 203% 90% 110% 130% 150% 170% 190% 2013 2014 2015 2016 2017 2018 2019 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

Sound Asset Quality

Coverage Ratio Cost of Risk * Cost of Risk: Provisions / Average Total loans (Performing + Past Due), On actual criteria all the recoveries are register on Provisions (net) 1.9% Without 4.9 bn

ne-hit impact

SLIDE 25 25 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Healthy Liquidity

Loans / Deposits (%) Liquidity Coverage Ratio CCL (%) 104% 98% 96% 90% 95% 100% 105% 1Q 2015 3Q 1Q 2016 3Q 1Q 2017 3Q 1Q 2018 3Q 1Q 2019 3Q 1Q 2020 122% 120% 151% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 1Q 2015 3Q 1Q 2016 3Q 1Q 2017 3Q 1Q 2018 3Q 1Q 2019 3Q 1Q 2020

SLIDE 26 26 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Healthy Leverage Ratio

7.5% 7.8% 8.4% 8.4% 10.8% 10.8% 10.9% 11.0% 5.0% 7.5% 10.0% 12.5% 2015 2016 2017 2018 2019 4Q19 1Q20 2Q20 20.2% 20.5% 21.4% 20.5% 23.7% 23.7% 24.1% 25.2% 15.0% 17.5% 20.0% 22.5% 25.0% 27.5% 2015 2016 2017 2018 2019 4Q19 1Q20 2Q20 Net Capital / Credit Risk Assets Leverage Ratio Basic Capital / Adjusted Assets

SLIDE 27 27 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Strong Capital Position

7.90% 9.40% 11.40%

Capital Adequacy Ratio

12.7% 12.4% 12.1% 11.9% 12.7% 13.8% 13.1% 13.3% 13.3% 12.2% 13.2% 5.2% 1.3% 15.3% 14.6% 15.3% 17.2% 17.2% 18.1% 20.0% 20.3% 18.6% 19.0% 19.7% 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 *RWA= Risk Weighted Assets annual growth RWA Basel III +11% +8% +16% (2%) +19% +20% +19% +5% +7% +9% +15% CET1 Minimum Regulatory Ratios Total Tier 1 18.4% Tier 2

SLIDE 28 28 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Investment Grade by All Major Rating Agencies

Rating Agency Outlook Date BBB- BBB Fitch Standard & Poor’s Negative Negative Mar-20 Jul-20 baa3 Moody’s Negative Aprl-20

SLIDE 29 29 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Appendix

SLIDE 30 30 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Quarterly Summary

Income Statement and Balance Sheet Highlights - Bank 2Q19 1Q20 2Q20 Change (Million Pesos) 1Q20 2Q19 Net Interest Income 16,853 17,517 17,421 (1%) 3% Non-Interest Income 4,631 4,726 5,268 11% 14% Total Income 21,483 22,243 22,690 2% 6% Non-Interest Expense 8,931 9,718 9,579 (1%) 7% Provisions * 3,657 4,262 8,527 100% 133% Operating Income 8,895 8,263 4,584 (45%) (48%) Taxes 2,382 2,112 934 (56%) (61%) Subsidiaries & Minority Interest 39 29 19 (33%) N.A. Net Income 6,553 6,180 3,669 (41%) (44%) Balance Sheet Performing Loans (a) 750,052 763,091 778,548 2% 4% Past Due Loans (b) 14,170 12,827 8,885 (31%) (37%) Total Loans (a+b) 764,222 775,918 787,433 1% 3% Total Loans Net (d) 746,152 757,986 769,358 2% 3% Acquired Collection Rights ( e) 1,720 1,261 1,438 14% (16%) Total Loans (d+e) 747,872 759,247 770,796 2% 3% Total Assets 1,160,329 1,293,647 1,348,628 4% 16% Total Deposits 738,028 791,870 821,721 4% 11% Demand Deposits 394,308 451,842 479,142 6% 22% Time Deposits 343,720 340,028 342,579 1% (0%) Total Liabilities 1,046,845 1,179,984 1,226,044 4% 17% Equity 113,484 113,663 122,583 8% 8%

SLIDE 31 31 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Quarterly Summary

Infrastructure 2Q19 1Q29 2Q20 Employees 29,250 29,796 24,337 Branches 1,158 1,178 1,180 ATM’s 8,569 9,090 9,060 POS’s 162,115 166,225 162,127 Financial Ratios - Bank 2Q19 1Q20 2Q20 Profitability: NIM (1) 6.3% 6.3% 5.8% NIM after Provisions (2) 4.9% 4.7% 3.0% ROE (3) 22.8% 21.7% 12.4% ROA (4) 2.2% 2.0% 1.1% Operation: Efficiency Ratio (5) 41.6% 43.7% 42.2% Operating Efficiency Ratio (6) 3.1% 3.2% 2.9% Average Liquidity Coverage Ratio for Banorte and SOFOM - Basel III (7) 122.2% 120.1% 0.0% Asset Quality: Past Due Loan Ratio 1.9% 1.7% 1.1% Coverage Ratio 127.5% 139.8% 203.4% Capitalization: Net Capital/ Credit Risk Assets 24.8% 24.1% 25.2% Total Capitalization Ratio 19.9% 19.0% 19.7% Leverage Basic Capital/ Adjusted Assets 11.0% 10.9% 11.0%

SLIDE 32 32 NIM Rev C / I NI ROE TI L/D Dep Loan ICAP Mkt App Us

Corporate Responsibility and Sustainability

Global Initiative Report (GRI Standards) International standards on sustainability reporting and disclosure of economic, environmental and socialtopics. UN Global Compact International initiative promoting 10 universally accepted Principles to promote Corporate Social Responsibility(CSR). Carbon Disclosure Project (CDP) Organization that promotes awareness on climate change through a better quality and transparency of the information reported on the company's emissionsperformance. IPC Sustentable Mexican index of 30 listed companies ,which are best positioned in relation to the pillars of Environment, Socialand CorporateGovernance. Empresa Socialmente Responsable (ESR) Recognition granted by the Mexican Center for Philanthropy (Cemefi) and AliaRSE, as a company committed with corporate social Responsibility. Natural Capital Declaration Voluntary financial sector initiative created at the Rio +20 Earth Summit, which recognizes the role of natural resources in the economy through its integration into financial products and services. Equator Principles Standard within the financial sector to determine, assessand manage the environmental and social risks of financed projects. GEI2 ProgrammeMexico Voluntary reporting of greenhouse gas emissions UNEP Finance Initiative Initiative that aims to identify, promote and carry out the adoption of best environmental and sustainabilitypractices at all levels of operations of financialinstitutions. Dow Jones Sustainability Index MILA In 2017 was included in the Dow Jones Sustainability Index MILA Pacific Alliance. Asociación de Bancos de México (ABM) Participation in the Sustainability Committee and the Corporate Social Responsibility Committee, and signatories as the ABM Banking Sustainabilityprotocol. STOXX ESG Leaders Index Index that represents the main global companies in terms of environmental, social and governance criteria, based on ESG indicators provided by Sustainalytics. Euronext Vigeo Emerging Markets 70 Recognizes the 70 companies from emerging countries with the most advanced practices in terms of sustainability. FTSE4Good Emerging Index Index that evaluates actions in the themes of climate change, labor standards and risk management, among others. Bloomberg Gender Equity Index Index that provides analysis of the commitment of 52 companies with the gender equity in the workplaceto investors and organizations. Principles for Responsible Investment Initiative that promotes its signatories to integrate environmental, social and governmental (ESG) criteria into their investment and ownershipdecisions.