4Q19 Solid macroeconomic fundamentals remain in place GDP CPI - - PowerPoint PPT Presentation

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4Q19 Solid macroeconomic fundamentals remain in place GDP CPI - - PowerPoint PPT Presentation

Dec 23, 2022 616 likes •1.26k views

XNOR GFNORTE GBOOY Best Bank 2019 Mxico 1 Eco Hist DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt App 4Q19 Solid macroeconomic fundamentals remain in place GDP CPI inflation Central bank foreign reserves

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SLIDE 1 1 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App XNOR

4Q19

GFNORTE GBOOY Best Bank 2019 México
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SLIDE 2 2 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App *Note: 2019 figures available up to 3Q19 Source: INEGI, Banxico, Ministry of Finance

Current account deficit and FDI

% of GDP, US$bn

GDP

% yoy

CPI inflation

% yoy

Government debt

% of GDP

Central bank foreign reserves

US$bn

Oil related fiscal revenues

% of total revenue
  • 0.1
0.8
  • 6.0
  • 4.0
  • 2.0
0.0 2.0 4.0 6.0 2001 2004 2007 2010 2013 2016 2019 3.6 0.0 5.0 10.0 2001 2004 2008 2012 2016 2020 100 200 300 2001 2004 2008 2012 2016 2019 FCL Reserves 0.2 26 20 40 60
  • 1
1 3 2001 2004 2007 2010 2013 2016 2019* Current account (LHS) FDI (RHS) 2 4 6 20 40 60 2001 2005 2009 2013 2017 Foreign (LHS) Domestic (LHS) Average duration (RHS) 19.1 20 40 60 2001 2005 2009 2013 2017

Solid macroeconomic fundamentals remain in place

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SLIDE 3 3 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: INEGI, Banorte

GDP at the beginning of each administration

% yoy

Investment during the first year

  • f administration
Index (Dec of the previous year=100)

2019 GDP forecast

% yoy, contribution in bps
  • 2.9
  • 4.4
88 90 92 94 96 98 100 102 104 106 108 Dec* Feb Apr Jun Aug Oct Dec 2001 2007 2013 2019 2019f (previous) 2019f (actual)
  • 6.3
  • 0.4
2.3 1.4
  • 0.1
  • 8
  • 6
  • 4
  • 2
2 4 6 8 1994 1999 2004 2009 2014 2019 1.8
  • 89bps
  • 0.1
  • 40bps
  • 69bps
  • 0.5
0.0 0.5 1.0 1.5 2.0 Forecast in late 2018 Global manufacturing deceleration Transitory shocks Delay in public and private investment Current forecast

The usual deceleration of the first year of a new administration has been further impacted by temporary shocks and a delay in investment

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SLIDE 4 4 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: INEGI, Bloomberg

Business confidence

Diffusion index

Mexbol

Index 46 47 48 49 50 51 52 53 54 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Construction Manufacturing Commerce Non-financial services 38,000 39,000 40,000 41,000 42,000 43,000 44,000 45,000 46,000 47,000 jun.-19 ago.-19 nov.-19 ene.-20 First Banxico rate cut Gas pipeline controversy is solved Agreement
  • n USMCA
Phase 1 US- China deal

Nevertheless, sentiment among the private sector has started to pick up, resulting in a better scenario for 2020

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SLIDE 5 5 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: INEGI, Banxico

Real wage growth

% yoy

Credit cycle

% yoy in real terms, % of total portfolio 2 2.5 3 3.5 4 4.5
  • 10
  • 5
5 10 15 20 Nov-09 Nov-14 Nov-19 Banking credit (LHS) NPLs (RHS) 3.77
  • 2
  • 1
1 2 3 4 Dec-09 Dec-14 Dec-19

Private consumption is still supported by solid employment and higher real wages Formal employment and growth

Index (Jan-09=100) 90 100 110 120 130 140 150 160 Jan-09 May-14 Sep-19 Formal employment GDP Proxy (IGAE) Labor reform (2012)
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SLIDE 6 6 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: INEGI

Private consumption and retail sales

% yoy
  • 3
  • 2
  • 1
1 2 3 4 5 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Private consumption Retail sales

Although it has been impacted by the overall economic slowdown

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SLIDE 7 7 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: JP Morgan, INEGI, Banxico

Commercial bank credit to the non-financial private sector

% of GDP

Commercial bank credit to the non-financial private sector

% yoy in real terms 18 23 44 48 79 Mexico Peru Colombia Brazil Chile 1 2 3 4 5 6 12 13 14 15 16 17 18 19 20 2Q10 4Q11 2Q13 4Q14 2Q16 4Q17 2Q19 Credit-to-GDP ratio (LHS) Credit-to-GDP growth (RHS) Average (RHS)

Credit penetration continues to be a significant opportunity for banks in Mexico, while credit continues to grow at about 2x nominal GDP

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SLIDE 8 8 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: Bloomberg, INEGI, Banxico, Banorte

MXN forecasts

USD/MXN

Inflation forecasts

% yoy, bi-weekly frequency

Reference rate forecasts

% 2019: 7.25 2020: 6.50 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Dec-15 Dec-17 Dec-19 2018: 19.69 2019: 18.93 2020: 19.80 18.6 18.8 19.0 19.2 19.4 19.6 19.8 20.0 20.2 Dec-18 Dec-19 Dec-20 2018: 4.8 2019: 2.8 2020: 3.6 2.5 3.0 3.5 4.0 4.5 5.0 5.5 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Headline Core

USD/MXN, inflation, and reference rate forecasts

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SLIDE 9 9 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 43,176 53,756 48,466 33,000 38,000 43,000 48,000 53,000 58,000 Jan-17 Dec-17 Dec-18 Dec-19 Dec-20 6.8x 8.0x 7.4x Source: Bloomberg, Banorte

FV/EBITDA

Times

Mexbol forecasts

Points . 6 7 8 9 10 11 Jan-10 Jan-12 Jan-14 Jan-16 Jan-18 Jan-20 FV/EBITDA U10a 10a - 2σ Last Last 10y – 2 FV/EBITDA EBITDA 2020E Net debt 2020E MEXBOL 2020E Estimated return 8.0X 53,756 20.1% 7.7X 51,111 14.2% 7.4X $8,816 +9.4% $16,774 +6.6% 48,466 8.2% 7.1X 45,821 2.3% 6.8X 43,176
  • 3.6%

Low growth potential for Mexbol

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SLIDE 10 10 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: MoF

Federal tax collection corresponding to state and municipal governments

MXN$bn (Participaciones, Ramo 28)

Public balance

% of GDP (as measured by the PSBRs)

Public debt

% of GDP (as measured by the HBPSBRs)

Fraction 23: Social transfers to state and municipal governments

MXN$bn (Provisiones Salariales y Económicas, Ramo 23)
  • 4.5
  • 4
  • 2.8
  • 1.1
  • 2.2 -2.7 -2.6 -2.2 -2.3 -2.3 -2.4 -2.4
  • 5
  • 4
  • 3
  • 2
  • 1
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 42.6 46.6 48.7 45.8 44.9 45.3 45.6 45.4 45.2 45.0 44.8 44.7 40 42 44 46 48 50 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 430 442 494 505 535 578 607 679 743 812 920 944 200 400 600 800 1,000 2009 2011 2013 2015 2017 2019 83 66 49 63 77 123 127 142 132 156 113 131 50 100 150 200 2009 2011 2013 2015 2017 2019

The latest budget continued to deliver fiscal responsibility, while increasing state governments income, and partially reversing the cut in social transfers (Fraction 23)

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SLIDE 11 11 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Source: MoF

Budgetary dependence on Fraction 23

% of federalized spending (2018)

State debt

% of federal tax collection corresponding to states (4Q18) 2.1 2.7 2.7 3.1 3.3 3.8 3.8 4.0 4.4 4.8 4.8 5.0 5.2 5.3 5.4 5.4 5.4 5.7 5.9 6.2 6.2 6.4 6.5 6.7 6.9 7.7 8.0 8.1 8.4 9.2 9.6 10.3 2 4 6 8 10 12 Guanajuato Nuevo León Jalisco Morelos Chihuahua Baja California Sonora San Luis Potosí Veracruz Chiapas Hidalgo Tabasco Oaxaca Nayarit Tamaulipas Zacatecas CDMX México Aguascalientes Puebla
  • Q. Roo
Michoacan Querétaro Tlaxcala Yucatán Guerrero Coahuila Colima Durango Baja California Sur Sinaloa Campeche 0.0 4.4 18.9 19.3 24.6 26.0 31.7 33.1 33.9 35.2 37.1 38.0 41.5 42.3 47.1 62.2 66.7 81.7 85.3 85.6 88.7 96.3 99.3 99.7 103.3 114.7 116.9 137.7 225.9 237.2 245.2 267.4 100 200 300 Tlaxcala Querétaro Guanajuato Puebla Tabasco San Luis Potosí Guerrero Yucatán Baja California Sur Sinaloa Aguascalientes Campeche Hidalgo Jalisco México Morelos Tamaulipas Chiapas Durango Baja California Colima Oaxaca Nayarit Michoacán Zacatecas Ciudad de México Veracruz Sonora Quintana Roo Nuevo León Coahuila Chihuahua

Therefore, state and country budgets will not suffer significant changes

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SLIDE 12 12 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

About Banorte

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SLIDE 13 13 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

GFNORTE – a leading and profitable financial franchise in Mexico

One of the most public companies in Mexico GFNorte is #1 in trading at BMV, and has the top Relative Weighting on S&P/BMV IPC Index, rated OTCQX Best 50 Global. market capitalization of US 16 billion, float of almost 86% and more than 4,000 investors, including large global institutional funds. Investment grade ratings by S&P, Fitch, Moody's and HR Ratings.

1 2 3

Sound Fundamentals Increasing profitability, solid asset quality, high liquidity and strong capitalization ratios. Adequate business mix Strong retail, wholesale and premium banking platforms, as well as leading insurance and pension fund management units, serving more than 21 million clients. Solid corporate governance Independent Board Members represent 71% of total board composition and best practices in minority shareholder right protection.
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SLIDE 14 14 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

From Regional Bank to National Financial Group

20 | 20

Establishment 1899 1982-1992 1995 2000 2005 2010 2015 Privatization  INB  IXE Afin  Afore Bancomer  Banorte Generali 50%  Bancentro Banpaís Bancrecer  Afore XXI IMSS 50%  Banorte-General i100% … Inorganic Growth Regional Bank Business Diversification 2020 Client Segmentation IT: central DB, multichannel Profitability Nationalization  G.F. Interacciones
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SLIDE 15 15 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

20/20

Strategy 20 | 20 Perfect Vision

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 ex-Afore clients 9 million Afore clients ▪ Structured Info & Learning (Central DB & Watson) ▪ Behavior understanding Analitics Cost Revenues Digital Bank
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SLIDE 16 16 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Diversified business mix

* Includes: Almacenadora Banorte; Ixe Servicios; Fundación Banorte A.B.P. Casa de Bolsa Banorte Banco Mercantil del Norte Sólida Pensiones Banorte Seguros Banorte Banorte Futuro Afore XXI Banorte Operadora de Fondos Banorte (Fondos de Inversión) Other Subsidiaries* Arrendadora y Factoraje Banorte Banorte Ahorro y Previsión 99.7167% 98.2619% 99.9999% 99.9999% 99.9999% 99.9999% 50.0% 97.6711% 99.9999% 98.22% Banorte Financial Services (Uniteller) 100.0% 2.33% 100%
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SLIDE 17 17 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Business mix - Assets Under Management

Afore XXI Banorte Billion Pesos Banking Sector Broker Dealer Insurance & Annuities Mutual Funds US 147 bn 413 464 499 569 615 660 663 727 807 780 137 498 569 536 589 588 609 664 699 716 37 81 99 112 144 137 148 160 179 204 39 50 60 71 86 95 119 140 175 190 86 203 245 542 606 626 645 733 747 882 712 1,296 1,471 1,829 2,039 2,106 2,185 2,423 2,607 2,772 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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SLIDE 18 18 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Business mix - diversified Net Income and balance in profitability

1) Without Goodwill: 2019 =43.3%., 2018=36.3% Net Income Mix Company Net Income 2019 ROE 2019 ROE 2018 Bank 26,994 24.2% 25.7% Broker Dealer 1,260 29.2% 31.8% Long Term Savings 6,556 Retirement Savings (Afore) 1,609 13.5% 10.7% Insurance 3,918 50.7% 41.1% Annuities 1,030 23.6% 23.8% Other Finance Companies Leasing & Factoring 957 17.7% 17.0% Warehousing 3 1.1% 7.2% Sólida (172) (9.7%) (27.0%) Total 36,528 20.1% 20.3% 1) 1) 2019 Recurring $35.3 b
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SLIDE 19 19 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App NIM

Net Interest Margin moving in the right direction

NIM (Post-Provision) 3.3% 3.4% 3.4% 3.5% 3.5% 3.7% 4.3% 4.4% 4.5% 4.3% 4.5% 4.6% 4.4% 4.7% 3.0% 3.5% 4.0% 4.5% 5.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 4Q18 1Q19 2Q19 3Q19 4Q19 4.1% 4.1% 4.4% 4.7% 4.5% 4.9% 5.5% 5.6% 5.6% 5.4% 5.7% 5.7% 5.7% 5.9% 4.0% 4.5% 5.0% 5.5% 6.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 4Q18 1Q19 2Q19 3Q19 4Q19 NIM NIM ex Insurance & Annuities
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SLIDE 20 20 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Improving efficiency

Cost to Income 56.0% 54.0% 52.0% 48.5% 47.9% 44.9% 42.8% 40.0% 39.7% 40.0% 39.4% 38.5% 40.2% 40.6% 35% 40% 45% 50% 55% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 4Q18* 1Q19* 2Q19 3Q19 4Q19 +13% +5% +10% +13% +5% +4% +4% +7% +11% +19%* Reported 36.6% 37.0% * Recurring *Recurring YoY +8% +9%* Reported 39.0% 39.1%
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SLIDE 21 21 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 8,535 8,748 8,728 8,858 9,010 10,182 9,932 8,000 8,500 9,000 9,500 10,000 10,500 4Q18* 1Q19* 2Q19 3Q19 4Q19

Strong Net Income

Net Income 8,517 10,888 13,508 15,228 17,108 19,308 23,908 30,311 35,345 31,958 36,528 7,500 10,000 12,500 15,000 17,500 20,000 22,500 25,000 27,500 30,000 32,500 35,000 37,500 2011 2012 2013 2014 2015 2016 2017 2018* 2019* Million Pesos CAGR 2011-2019 +20% 1.7% +6% YoY* +17% YoY * Recurring Reported +14% YoY * Recurring Reported
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SLIDE 22 22 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 1.10% 1.30% 1.40% 1.46% 1.47% 1.60% 1.86% 2.07% 2.22% 2.13% 2.18% 2.20% 2.24% 2.28% 2.18% 2.30% 2.54% 2.47% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2.2% 2.4% 2.6% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 4Q18* 1Q19* 2Q19 3Q19 4Q19 ROA

Constant positive growth in Profitability

ROE 14.1% 14.3% 14.2% 13.2% 13.3% 14.1% 17.0% 19.3% 19.6% 20.1% 19.9% 19.5% 19.6% 19.0% 20.3% 20.1% 23.8% 22.4% 12% 14% 16% 18% 20% 22% 24% 2011 2012 2013 2014 2015 2016 2017 2018* 2019* 4Q18* 1Q19* 2Q19 3Q19 4Q19 * Recurring * Recurring Reported: Reported:
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SLIDE 23 23 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Digital Transformation

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SLIDE 24 24 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

The Digital Transformation is “nonstop”, improving and giving results

ANALYTICS The backbone to connect the customer DIGITAL The new way to do banking INNOVATION “Change before you have to”

Jack Welch

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SLIDE 25 25 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

ANALYTICS - The backbone to connect the customer

Segmentation Clusters Campaigns Customer Journey Behavioral Economic Intervention Generic to personal Behavioral data mining, A.I, Machine Learning

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SLIDE 26 26 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

ANALYTICS - The backbone to connect the customer

Individual savings

+44%

Message + reward

+1bn / 1 month

finding variables with greatest impact

SME balances up Time Deposits

Branch specific rate

$30m $30m

/1 month savings on Pilot Branches 2020 Client specific rate

Segmentation Clusters Campaigns Customer Journey Behavioral Economic Intervention Generic to personal Behavioral data mining, A.I, Machine Learning

300%

Pay C.C in mobile

139%

Get Digital Card

Conversion rates above control group

Eliminate entry barriers

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SLIDE 27 27 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 3.5 3.9 4.1 4.2 1T19 2T19 3T19 4T19

Digital Bank is the new way to do banking

CONTRATA (branchless)

Today: Credit Card, Time Deposits (Pagaré), Mutual Funds 2020: Payroll, Personal, Auto, Mortgages loans…

41.4 80.5 232.1 50 100 150 200 250 1Q 2017 3Q 1Q 2018 3Q 1Q 2019 3Q Transactions

+146% +88%

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SLIDE 28 28 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Payments is one of trending topics in Digital Bank and Banorte is present

Continuous growth on POS’s transactions Beyond POS: ▪ The best DIGITAL PLATFORM for aggregators ▪ A dedicated group of executives for them

50.0 100.0 150.0 1Q 2017 3Q 1Q 2018 3Q 1Q 2019 3Q

POS’s Transactions +50%

Millions

+27%

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SLIDE 29 29 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

INNOVATION - “Change before you have to” Jack Welch

Key Trends Blockchain Open Banking Artificial Intelligence, Machine Learning, Chatbot… Exploring Together

Ecosystem >10,000 Startup >300 Corporations WATSON Blockchain Ecosystem Biometrics: Fingerprint / Facial

… All Together Significant Opportunities

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SLIDE 30 30 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Digital Bank

Beyond Banorte Movil … Banorte Go With Banorte Go, don't leave your conversation…

  • Quick transfers, even if you do not know the bank info.
  • Get a Code for ATMs cash withdrawals. Don't need the card anymore.
  • Easy access to account movements & balance.
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SLIDE 31 31 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Minority investment in Payclip, Inc.

✓ Take advantage of the massive market opportunity to become the leading supplier of payment solutions in Mexico. ✓ Build a financial services ecosystem with the development of unique assets. ✓ Distribution of Clip in Banorte's branches. ✓ Greater product development and sale of Banorte's products to Clip's customers.

Digital Bank, the Strategy Acquire your credit card from Banorte Móvil

✓ From the "Contract" functionality in Banorte Móvil, without going to the branch, you can already apply and obtain the credit card. ✓ Simple and Agile. ✓ Immediate analysis to authorize credit line. ✓ The best card options are offered according to your profile.
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SLIDE 32 32 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Loans & Deposits

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SLIDE 33 33 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Healthy Funding & Loan portfolio structure

$735 2012 4Q19 $460 Demand Time Money Market Interbank Loans $401 $763 Consumer Commercial Mortgage Corporate Government Commercial Consumer Mortgage Government Corporate US 38.9 bn Demand Money Market Time Interbank Loans US 40.4 bn Billion Pesos

Funding Loan Portfolio

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SLIDE 34 34 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Demand 65% Time 35% 116 124 129 136 158 168 194 223 229 236 236 229 190 211 255 300 351 384 397 414 394 396 401 438 306 336 384 436 509 551 590 637 623 632 637 667 100 200 300 400 500 600 700 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Time Demand Core Deposits 4Q18 4Q19 Demand 414 438 Time 220 229 TOTAL 634 667

Consistent growth in Deposits

Demand 62% Time 38% MIX 2013 4Q19 Billion Pesos CAGR: +11% YoY +5% 6% 4% 5% Deposits YoY 6% YoY +4% +12% +10%
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SLIDE 35 35 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Continued growth in Performing Loan Book, special focus on consumer

US 40.4 bn Billion Pesos 4Q18 3Q19 4Q19 QoQ YoY Mortgage 156 166 170 2% 9% Car Loans 24 26 27 3% 11% Credit Cards 37 39 40 2% 8% Payroll 53 52 51 (2%) (3%) Consumer 269 283 288 2% 7% Commercial 174 168 173 3% (1%) Corporate 137 124 128 4% (6%) Government 197 158 174 10% (12%) TOTAL 777 733 763 4% (2%) 350 401 425 472 518 567 616 777 762 768 733 763 300 400 500 600 700 800 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 Total Loan Portfolio 99 118 140 158 176 203 241 269 273 278 283 288 50 100 150 200 250 300 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 CAGR: +14% US 15.3 bn CAGR: +10% Consumer Portfolio
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SLIDE 36 36 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App
  • 50%
  • 25%
0% 25% 50% 75% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Government Loan Growth y/y Banorte Banking System Ban+Int Long term trends evidence periods of volatile growth Financial Discipline Law Source: CNBV

Market Environment in Government Lending

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SLIDE 37 37 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 83.4 140.4 50.3 Subnational Financing Requirements (billion pesos) Refinancing Short Term 2017 2018 2019 On average 87% is demand for refinancing existing debt 13% 87% 48.2 42.6 24.3 74.6 183.0 131.6

Market Environment in Government Lending

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SLIDE 38 38 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App
  • 25%
  • 20%
  • 15%
  • 10%
  • 5%
0% 5% 10% 15% 20% 25% 2017 2018 2019 Government Loan Growth y/y Banorte Banking System Ban+Int Greater competition and scarcity of “new loan demand” Financial Discipline Law Source: CNBV

Market Environment in Government Lending

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SLIDE 39 39 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 39 Cifras en millones de pesos 1.13% 0.67% 0.52% Soft demand & strong competition have driven down spreads 2017 2018 2019 States & Municipalities (GEM) Spread above TIIE

Market Environment in Government Lending

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SLIDE 40 40 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 37.5% 31.5% 0% 10% 20% 30% 40% 50% e fmamj j a s onde fmamj j a s onde fmamj j a s on 2017 2018 2019 Market Share Private Banking System Government Book Banorte 24.3% BBVA 22.8% Others 52.9% 2017 Banorte 31.5% BBVA 25.5% Others 43.0% Nov-19

Ps 546 bn Ps 510 bn

Proven ability to maintain market share, despite market conditions Source: CNBV

Evolution of Banorte’s Government Book

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SLIDE 41 41 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 41 Cifras en millones de pesos Business decisions demonstrate proven ability to maintain book’s profitability above industry, despite market conditions 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 2018 2019 Yield of Government Portfolio Banorte System Source: CNBV

Evolution of Banorte’s Government Book

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SLIDE 42 42 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Credit Cards 6.1% 6.3% 6.0% 5.5% 5.9% 5.9% 6.0% 5.4% Payroll 2.9% 3.3% 4.1% 3.7% 3.0% 3.8% 3.4% 3.3% Car Loans 0.9% 1.1% 1.1% 1.1% 0.9% 1.0% 1.0% 1.0% Mortgage 0.9% 0.9% 1.0% 0.9% 1.0% 1.0% 1.1% 1.1% Commercial 2.5% 2.5% 2.2% 1.9% 2.1% 2.4% 2.5% 2.4% SME 5.6% 5.5% 6.0% 5.5% 5.9% 6.4% 6.5% 6.6% Commercial ex-SME 1.4% 1.5% 1.2% 0.9% 1.1% 1.3% 1.6% 1.3% Corporate 3.2% 3.0% 2.9% 2.9% 2.9% 3.0% 2.8% 1.8% Government 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Total GFNorte 1.9% 2.0% 1.8% 1.7% 1.7% 1.9% 1.9% 1.7% 1.9% 2.1% 3.1% 2.9% 2.2% 1.8% 2.0% 1.7% 1.7% 1.9% 1.9% 1.7% 1.0% 2.0% 3.0% 2011 2012 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19

Sound Asset Quality

Past Due Loan Ratio
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SLIDE 43 43 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 2.2% 2.3% 2.0% 1.9% 1.9% 2.2% 2.0% 1.7% 1.6% 2.2% 2.5% 2.1% 2.4% 2.5% 1.0% 1.5% 2.0% 2.5% 2011 2012 2013 2014 2015 2016 2017 2018 4Q18 1Q19 2Q19 3Q19 4Q19 Actual
  • Prev. Criteria
143% 138% 105% 107% 116% 139% 129% 142% 142% 136% 128% 127% 138% 90% 110% 130% 150% 2011 2012 2013 2014 2015 2016 2017 2018 4Q18 1Q19 2Q19 3Q19 4Q19

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)
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SLIDE 44 44 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Strong Capital position

7.90% 9.40% 11.40%

Capital Adequacy Ratio (CAR)

11.5% 12.7% 12.4% 12.1% 11.9% 12.7% 13.8% 13.1% 13.3% 12.7% 4.7% 1.1% 15.1% 15.3% 14.6% 15.3% 17.2% 17.2% 18.1% 20.0% 20.3% 18.6% 2013 2014 2015 2016 2017 2018 1Q19 2Q19 3Q19 4Q19 *RWA= Risk Weighted Assets annual growth RWA Basel III +17% +11% +8% +16% (2%) +19% +20% +19% +5% +7% CET1 Minimum Regulatory Ratios Total Tier 1 17.5% Tier 2
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SLIDE 45 45 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App 4Q19 2019 YoY 4Q19 2019 YoY Considering Banorte Futuro Insurance Net Income 752 3,890 15% 1,104 5,526 18% Equity 6,650 6,650 (11%) 22,634 22,634 (2%) Assets 37,970 37,970 5% 53,610 53,610 4% Premiums 5,384 26,551 4% 5,384 26,551 4% ROE 42.8% 50.7% 9.6 pp 19.6% 24.0% 4.0 pp AFORE Net Income 733 3,275 28% Equity 25,466 25,466 4% Assets 27,820 27,820 5% AUM 882,314 882,314 18% ROE 11.7% 13.5% 2.7 pp ROTE 35.2% 43.3% Annuities Net Income 272 1,030 26% Equity 4,870 4,870 27% Assets 136,092 136,092 10% Premiums 3,014 11,485 11% ROE 23.0% 23.6% (0.1) pp

BAP: Long Term Savings business

Million Pesos
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SLIDE 46 46 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

GFNorte Guidance 2020

Guidance 2020 Loan Growth 6% – 8% NIM Expansion 5 – 15bp Expense Growth 5% – 5.5% Efficiency 38.0 – 39.0% Cost of Risk 1.9% – 2.2% Tax Rate 26% – 27% Net Income 37.5 – 38.8 ROE 19.6% – 20.1% Macro Estimates 2020 GDP 0.8% Inflation 3.5% Reference Rate 6.50%
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SLIDE 47 47 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Loans

Nov 2019

Deposits

2°

Deposit & Loan Market Share

Source: CNBV. 3°
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SLIDE 48 48 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App Consumer
  • C. Cards
Mortgage Commercial Government Deposits Nov-18 Nov-19 Nov-18 Nov-19 Nov-18 Nov-19 Nov-18 Nov-19 Nov-18 Nov-19 Nov-18 Nov-19 Banorte 12.4% 12.0% 9.5% 9.7% 19.5% 19.2% 10.9% 9.8% 34.2% 31.5% 14.9% 13.4% BBVA 27.2% 29.3% 27.6% 27.5% 25.7% 26.0% 19.7% 19.2% 23.4% 25.5% 21.3% 22.2% CitiBanamex 16.0% 13.5% 27.9% 27.1% 10.4% 9.7% 12.7% 11.7% 6.5% 5.7% 14.3% 14.2% Santander 8.7% 8.8% 14.0% 14.0% 17.0% 16.5% 13.6% 13.2% 11.5% 12.0% 13.4% 13.1% HSBC 6.2% 6.6% 5.4% 5.6% 5.8% 7.0% 8.6% 8.8% 6.3% 6.2% 8.4% 8.6% ScotiaBank 5.2% 5.2% 2.6% 2.8% 15.0% 15.0% 6.9% 7.3% 2.1% 2.7% 6.5% 6.3% Inbursa 5.0% 4.4% 4.2% 4.1% 0.7% 0.6% 0.0% 0.0% 3.9% 4.3% 3.1% 3.1% Others 19.4% 20.3% 8.9% 9.1% 5.9% 6.1% 27.6% 29.9% 12.1% 12.2% 18.0% 19.1% Market Position 3° 4° 2° 4° 1° 3°

Market Share by segment

Source: CNBV.
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SLIDE 49 49 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Afore Market Share (Retirement Savings)

Source: CONSAR AUM Market Share Dec18 Dec-19 Dec-18 Dec-19 XXI Banorte 747 882 22.4% 22.1% CitiBanamex 595 724 17.9% 18.1% SURA 491 590 14.7% 14.8% Profuturo GNP 489 600 14.7% 15.0% Principal (Metlife, May18) 225 259 6.8% 6.5% PensionISSSTE 213 258 6.4% 6.4% Coppel 205 253 6.1% 6.3% Invercap 169 188 5.1% 4.7% Other 194 242 5.8% 6.1% 1° Billion Pesos Assets Under Management
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SLIDE 50 50 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Insurance Market Share

Million Pesos Sep-18 Sep-18 Premiums Market Share Sep-19 Sep-19 9° Sep-18 Sep-18 Net Income Market Share Sep-19 Sep-19 5° 43,339 48,939 11.7% 11.8% 2,550 3,425 8.3% 9.8% 48,337 43,260 13.1% 10.4% 8,256 4,270 26.8% 12.2% 29,102 35,910 7.9% 8.7% 3,450 4,222 11.2% 12.1% 18,886 29,358 5.1% 7.1% 1,070 2,355 3.5% 6.7% 26,640 29,260 7.2% 7.1% 1,641 1,745 5.3% 5.0% 23,416 23,875 6.3% 5.8% 1,722 3,660 5.6% 10.5% 12,221 23,456 3.3% 5.7% 207 232 0.7% 0.7% 20,852 21,242 5.6% 5.1% 2,760 1,958 9.0% 5.6% 21,284 21,166 5.8% 5.1% 2,752 3,139 8.9% 9.0% 14,169 15,206 3.8% 3.7% 490 738 1.6% 2.1% 110,927 123,012 30.0% 29.7% 5,929 9,248 19.2% 26.4% 369,174 414,684 100.0% 100.0% 30,827 34,990 100.0% 100.0% G.N.P. Metlife México BBVA Banamex AXA Seguros Qualitas Mapfre Crédito Monterrey New York Life Seguros Banorte Chubb de México Other TOTAL
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SLIDE 51 51 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Annuities Market Share

Million Pesos 1° 1° *\ Legal document for any pensioners entitled to receive a pension. Source: AMIS to December 2019. Dic-18 Dic-18 Resolutions * Market Share Dic-19 Dic-19 Annuitants Total Industry Total Industry Dic-18 Dic-18 Dic-19 Dic-19 Market Share Banorte Profuturo GNP Bancomer Sura 10,046 11,172 42.6% 42.3% 6,423 9,099 27.2% 34.5% 5,833 6,104 24.7% 23.1% 1,297 8 5.5% 0.0% 23,599 26,383 100.0% 100.0% Banorte Profuturo GNP Bancomer Sura 9,037 10,355 38.7% 39.9% 6,041 7,990 25.9% 30.8% 7,017 7,623 30.1% 29.3% 1,249 14 5.4% 0.1% 23,344 25,982 100.0% 100.0%
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SLIDE 52 52 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

GFNorte in the World

(1) Level 1 Ticket Indexes GFNORTEO (BMV) IPC (BMV) Sustainable IPC (BMV) MSCI Mexico STOXX GBOOY (OTCQX) DJSI MILA Climate Disclosure Leadership OTCQX30 Euronext Vigeo EM70 XNOR (Latibex) FTSE Latibex All Shares FTSE Latibex TOP 4Q19 Total Shares Outstanding: 2,883.5 m Float: ~ 86% Total ADRs(1) Outstanding: 4.74 m 305,848 150,000 200,000 250,000 300,000 350,000 400,000 4Q12 4Q13 4Q14 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Market Capitalization Million pesos 56% US 16.0 bn
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SLIDE 53 53 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Analyst Opinion & Investment Grade by all major rating agencies

Net Income 2019 $36,440 Target Price $126.0 Maximum $139.0 Number of Analysts 22 # BUY 16 # HOLD 4 # SELL 1 Analysts‘ Estimates (as of Jan 9, 2020) Ratings Agencies Rating Agency Outlook Date BBB BBB+ Fitch Standard & Poor’s Negative Stable Mar-19 Jul-19 baa2 Moody’s Negative Jun-19 AAA Local HR Ratings Stable Nov-18
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SLIDE 54 54 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Appendix

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SLIDE 55 55 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Quarterly Summary

Income Statement Highlights - GFNorte 4Q18 3Q19 4Q19 Change 2018 2019 Change (Million Pesos) 3Q19 4Q18 2018 Interest Income 39,203 37,161 37,667 1% (4%) 137,583 150,514 9% Interest Expense 17,600 16,796 15,174 (10%) (14%) 60,754 68,693 13% Technical Results (Insurance & Annuities) (2,004) (251) (2,305) (819%) (15%) (2,003) (1,244) NA Net Interest Income 19,600 20,114 20,188 0% 3% 74,825 80,577 8% Net Service Fees 3,730 3,183 4,230 33% 13% 13,041 14,011 7% Trading 1,263 2,303 872 (62%) (31%) 4,228 5,289 25% Other Operating Income (Expenses) 2,790 722 746 3% (73%) 4,226 4,264 1% Non Interest Income 7,783 6,208 5,847 (6%) (25%) 21,495 23,564 10% Total Income 27,383 26,322 26,035 (1%) (5%) 96,320 104,141 8% Non Interest Expense 10,013 10,578 10,572 (0%) 6% 37,610 40,678 8% Provisions 3,902 4,118 3,765 (9%) (3%) 16,045 15,347 (4%) Operating Income 13,468 11,626 11,698 1% (13%) 42,665 48,116 13% Taxes 3,375 3,094 2,951 (5%) (13%) 11,637 12,795 10% Subsidiaries & Minority Interest 89 326 263 (19%) 197% 929 1,208 30% Net Income 10,182 8,858 9,010 2% (12%) 31,958 36,528 14% Recurring Net Income 8,535 8,858 9,010 2% 6% 30,311 35,345 17%
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SLIDE 56 56 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Quarterly Summary

Financial Ratios GFNorte 4Q18 3Q19 4Q19 2018 2019 NIM (1) 5.4% 5.7% 5.7% 5.6% 5.6% ROE (2) 23.8% 19.6% 19.0% 20.3% 20.1% ROA (3) 2.5% 2.24% 2.28% 2.2% 2.3% Efficiency Ratio (4) 36.6% 40.2% 40.6% 39.0% 39.1% Operating Efficiency Ratio (5) 2.5% 2.7% 2.7% 2.6% 2.6% CCL Banorte and SOFOM - Basel III (6) 107.0% 140.7% 133.5% 107.0% 0.0% Past Due Loan Ratio 1.7% 1.9% 1.7% 1.7% 1.7% Coverage Ratio 142.1% 126.6% 137.7% 142.1% 137.7% Cost of Risk (7) 2.01% 2.15% 1.98% 2.31% 1.98% Banxico Reference Rate 8.25% 7.75% 7.25% 8.25% 7.25% TIIE 28 days (Average) 8.25% 8.35% 7.86% 7.99% 8.32% Exchange Rate Peso/Dolar 19.65 19.73 18.86 19.08 19.30 Tax Rate 24.6% 25.6% 24.4% 26.4% 25.7% Balance Sheet Highlights - GFNorte 4Q18 3Q19 4Q19 Change (Million Pesos) 3Q19 4Q18 Asset Under Management 2,607,083 2,815,927 2,771,604 (2%) 6% Performing Loans (a) 777,192 732,726 762,642 4% (2%) Past Due Loans (b) 13,263 14,357 12,806 (11%) (3%) Total Loans (a+b) 790,455 747,084 775,448 4% (2%) Total Loans Net (d) 771,611 728,913 757,809 4% (2%) Acquired Collection Rights ( e) 2,417 1,905 1,601 (16%) (34%) Total Credit Portfolio (d+e) 774,028 730,818 759,410 4% (2%) Total Assets 1,620,470 1,583,651 1,580,010 (0%) (2%) Total Deposits 756,301 722,039 724,490 0% (4%) Total Liabilities 1,446,006 1,395,973 1,384,012 (1%) (4%) Equity 174,464 187,678 195,998 4% 12% Total Loans ex-Government 579,819 574,905 588,654 2% 2%
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SLIDE 57 57 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Quarterly Summary

Share Data 4Q18 3Q19 4Q19 Change 2018 2019 Change 3Q19 4Q18 2018 Earnings per share (Pesos) 3.531 3.072 3.125 2% (12%) 11.083 12.668 14% Earnings per share Basic (Pesos) 3.557 3.092 3.138 2% (12%) 11.389 12.747 12% Dividend per Share for the period (Pesos) 0.00 0.00 0.00 NA NA 3.45 5.54 61% Payout for the period 0.0% 0.0% 0.0% NA NA 40.0% 50.0% 25% Book Value per Share (Pesos) 59.75 64.29 67.18 4% 12% 59.75 67.18 12% Issued Shares (Million) 2,883.5 2,883.5 2,883.5 0% 0% 2,883.5 2,883.5 0% Stock Price (Pesos) 95.78 106.07 105.00 (1%) 10% 95.78 105.00 10% P/BV (Times) 1.60 1.65 1.56 (5%) (3%) 1.60 1.56 (3%) Market Capitalization (Million Dollars) 14,054 15,498 16,050 4% 14% 14,054 16,050 14% Market Capitalization (Million Pesos) 276,177 305,848 302,763 (1%) 10% 276,177 302,763 10% INFRASTRUCTURE 4Q18 3Q19 4Q19 Employees 30,538 29,587 30,162 Branches 1,150 1,165 1,182 ATM’s 8,423 8,699 8,919 POS’s 158,735 164,905 166,505
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SLIDE 58 58 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Healthy Liquidity

Total Loans / Total Deposits (%) Liquidity Coverage Ratio CCL (%) 103% 101% 105% 90% 92% 94% 96% 98% 100% 102% 104% 106% 108% 110% 1Q 2015 3Q 1Q 2016 3Q 1Q 2017 3Q 1Q 2018 3Q 1Q 2019 3Q 107% 141% 133% 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
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SLIDE 59 59 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Improving Corporate Governance

GFNorte Mexbol Index (Average)* Float 86% 45% Listed overseas Yes 46% of the companies Chairman of the Board-CEO separation Yes In 73% of the companies Share of independent board members, % 71.0 49.7 Share of total assets threshold to require shareholders approval in M&A operations, % Current Before Aug'16 19.7 Non-related 20 20
  • -
Related 5 20
  • -
Board members nominations committee Existence Yes 13.5% of the companies Final approval of nominated board members Shareholders Shareholders Share of independent board members in this committee, % Current Before Aug'16 18.8 57.1 25 All members of the BOD are elected every year by the Shareholders’ Assembly. Main Committees are chaired by independent members.
  • Risk Policies
  • Nominations
  • Audit & Corporate Practices
Assembly quorum has always been higher than 60% and consensus has always been reached on proposals.
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SLIDE 60 60 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Corporate Responsibility and Sustainability

At GFNorte, sustainability means maximizing growth and profitability while seeking to achieve balance among the economic, social and environmental aspects of our business. This is achieved through a four-pillar framework: Focus on Social and Environmental Risk Management, Environmental Efficiency, Human Rights and Gender Equity and Corporate Volunteering, Responsible Investment, Financial Inclusion and Education Sustainable Finance Transparency People and Community Environmental Footprint ✓ PRI (Principles of Responsible Investment) – We seek to promote a sustainable risk management considering the risk of the environmental, social and governance issues integrated in our investment portfolios, safeguarding the patrimony of our clients. ✓ Reporting – We incorporated in our Annual Integrated Report the framework of International Integrated Reporting Council (IIRC), Global Reporting Initiative (GRI), Global Compact and we align our performance to the UN SDGoal's platform. ✓ Social & Environmental Risks Analysis – Under the Equator Principles’ framework, Banorte analyzes the environmental and social risks and impacts of loan portfolios for Corporate and Business Banking, Government Banking and Structured Finance. Banorte goes beyond the Equator Principles’ scope by including loans of lower amounts (loans greater than $ 1 million US dollars and analyzes their risks the Performance Standards of the International Finance Corporation. ✓ Sustainability Management System – Its objective is to gather, validate, monitor and analyze data from the subsidiaries of the Group through key environmental, social and economic indicators.
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SLIDE 61 61 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

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.
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SLIDE 62 62 DB NIM Rev C / I NI Div ROE TI L D Dep Loan ICAP BAP Guid Mkt Eco Hist App

Contact Information and Reports

If you have any information request or comments, please contact Banorte's Investor Relations Department at: Tel: (52) 55 1670 2276 E-mail: investor@banorte.com We recently published the 3Q19 report. During 2019 we have released: 1. Annual Report to the Banking and Securities Commission (CNBV) 2. Annual Report to the Stock Exchange (Informe Anual Circular Única de Emisoras) 3. Audited Financial Statements for 2018 4. Annual Financial and CSR Report for 2018 under the GRI methodology (PDF & Interactive) You can access our quarterly and annual reports (in Spanish and English) and other informative materials at : investors.banorte.com Disclaimer Grupo Financiero Banorte does not warrant that the document is accurate, complete, reliable, fit for any particular purpose and does not accept liability for any act (or decision not to act) resulting from the use of this document and related data. The information contained in this document is illustrative and informative so it should not be considered as an advice and/or recommendation of any kind. Grupo Financiero Banorte is not part of any party or political trend.