Download - PresentaciÃ3n GFNORTE, Marzo 2001
1
7th Latin American Banking Conference7th Latin American Banking ConferenceSalomon Smith BarneySalomon Smith Barney
New YorkNew YorkMarch 08, 2001March 08, 2001
2
I. 2000 RESULTSI. 2000 RESULTS• Relevant InformationRelevant Information• ProfitabilityProfitability• Asset QualityAsset Quality• CapitalizationCapitalization• Other SectorsOther Sectors• InternetInternet• Efficiency Projects & AlliancesEfficiency Projects & Alliances
II. MANAGEMENT’ S VISION & STRATEGIESII. MANAGEMENT’ S VISION & STRATEGIES
ContentsContents
3
I . RESULTS 2000I . RESULTS 2000
4
Relevant InformationRelevant Information
◗ Banorte created provisions in 3Q00 against stockholder’s equity for 1,737.7 million pesos to cover all contingencies with Fobaproa and to comply with YR2003 capital rules.
◗ GFNorte 2000 accumulated profit of Ps 1,677.3 million, a 36% increase over that of 1999, obtaining a ROE of 21%. The Banking Sector obtained profits of Ps 1,463.9 million, showing a 48%growth in the same period, excluding Pension Funds.
◗ During 2000, GFNorte’s Non Interest Expense decreased by 13.0% compared to 1999. The Banking Sector decreased 15% in this line for the same period.
◗ The Banking Sector performing commercial, mortgage and consumer loans increased by 23% in the year, meanwhile total past dues decreased by 17%.
◗ The Banking Sector past due loan ratio decreased from 5.8% to 5.1% and the Reserve coverage stood at 101.1%.
◗ The Banking Sector capitalization ratio was 12.0% with, Tier 1 of 11.1% and Tier 2 of 1.0%, using 2003 rules.
5
◗ Banorte strengthened its capital base to fully create provisions for Fobaproa and YR2003 and to take advantage of the tax loss carry-forward in Bancentro, which amounts Ps 1,735 million* by the end of 2000.
Relevant InformationRelevant Information
BanorteBancentro
Equity$ 1,217
◗ Traditional Banking Business
◗ Money market from Brokerage House
◗ Bancentro’s Fobaproa assets
◗ Serfín loans management
◗ Afore from Banorte
◗ Brokerage House Mutual Funds administration
BrokerageHouse
Equity$290◗ Capital market business
◗ Investment banking
* Representing 35% of total cummulative losses for Bancentro (Ps $4,957 million)
6
GFNORTE
AuxiliaryOrganizations
5.3%
Long TermSaving
8.3%
Group’s IntegrationGroup’s Integration
% Group´s Investment in Subsidiaries.
December 2000.
Bancentro
Banorte(Banpais)
Banking
84.4% 2.0%
Brokerage
Annuities
Pension Funds
Insurance
Factoring
Warehousing
Leasing
Bonding
Brokerage
House
7
Banorte became a national bank improving its Banorte became a national bank improving its market positionmarket position
Dec96
%
Branches 156 2.3
States 7
Dec00
452
32
5.9
%
3.6 7.8
9.23.3
Dec ‘96%
Branches
10° 5°
10° 4°
6.8 11.85° 5°
MARKET COVERAGE MARKET COVERAGE
Rank
Dec ‘00% 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 (September 2000).
8
GFNorte’s organization is structured for servicing clientsGFNorte’s organization is structured for servicing clients
BANORTE’S GENERAL DIRECTION
Government Banking
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
CorporateDevelopment
Public Relations
DON ROBERTO GONZALEZ BARRERAPresident
Corporate Examiner
SUPPORT & CONTROL
• Risk Management
• Technology and
Operations
• Human Resources
• Planning and Control
OTHÓN RUIZ MONTEMAYORVice-President & GFNorte’s General
Director
9
A stock option for senior management was implementedA stock option for senior management was implemented
◗ The stock option plan started on October, 2000.
◗ 24 key top executives are benefited in the first stage.
◗ The objectives of this plan are:
- Retain key people
- Move top management to maximize share value
- Attract new top executives
◗ 4.8 million shares were acquired for this program. (1% of total shares outstanding as of Dec/00)
◗ An equivalent to one year of monthly salary is the amount assigned to each executive in the 3 year stock option program.
10
Banorte has a national presenceBanorte has a national presence
M.S. Market Share Millions Ps. * Includes Modules ** Excludes centralized Operations.
TOTAL M.S.Branches* 452 5.9% Deposits** $98,207 7.8%
December 2000
Tot. M.S. Branches 68 13.4 Total deposits $14,266 23.3
Tot. M.S. Branches 100 5.4Total Deposits $22,032 3.8 Tot. M.S.
Branches 32 3.9 Total Deposits $4,192 4.6
Tot. M.S. Branches 118 15.0 Total Deposits $36,020 29.2
Tot. M.S. Branches 104 8.8 Total Deposits $17,900 11.1
Tot. M.S. Branches 30 3.8 Total Deposits $3,797 3.5
MONTERREY
NORTHEAST
MEXICO
SOUTHEAST
WEST
NORTHWEST
11Includes the Banking and Brokerage Sectors.
142 301627 889
1,9002,324
1994 ‘95 ‘96 ‘97 ‘98 ‘99
2,818
2000
Checking Account 50.3%Investment 38.7%Credit Card 5.6% Credits 1.9% Money Market 1.7%Mortgage 1.5%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 CLIENTS NUMBER OF CLIENTS( )Thous ands( )Thous ands
12
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
December 2000; * Tradicional & Internet; Call Center = Number of calls
Transactions 2000
(millions)
130 212 408
986 1,341 1,434218
990
1,988
3,318
4,548 6,286
1,538
2,458
3,750
6,398
9,5129,037
1994 1995 1996 1997 1998 1999 2000
POS
PC Banking
ATM’s
7.4
17.5*
100.7
Call Center 10.1
Units
13
TRANSACTIONS BY DISTRIBUTION CHANNEL2000
5.6%
BRANCH ATM PCBANKING
TELEPHONEBANKING
POS INTERNET
More than 50% of all transactions are channelled through More than 50% of all transactions are channelled through electronic bankingelectronic banking
3.6%
1.6%
37.3%44.7%
7.2%
Dec, 2000.
14
ProfitabilityProfitability
15
ACCUMULATED NET INCOME ACCUMULATED NET INCOME
Book Value 10.3 8.9 13.7 15.7 16.0 15.2Per Share (*)
1,521.9
1,234.0
1,557.0
685.6705.1
'95 '96 '97 '98 '99
1,677.3
‘00
828.8
1,135.5
GFNorte has maintained constant GFNorte has maintained constant earnings growthearnings growth
ExtraordinaryIncomeMillions as of December 2000. (*) Based on 493.2 millions of shares.
Extraordinary Income: 1997: $693.1 & 1998: $421.5
16
NET INCOME PER SHARE NET INCOME PER SHARE
GFNorte has increased its net income per GFNorte has increased its net income per share by 36%share by 36%
3.40
2.50
1999 2000
Pesos as of December 2000.
36 %
17
ROE ROE
Source: Press Release each bank.
15%
GFNorte increased it’s ROE maintaining a market GFNorte increased it’s ROE maintaining a market leadershipleadership
21%
6%
21%
BA
NA
CC
I
GF
BV
A-
BA
NC
OM
ER
GF
NO
RT
E
5%
GF
BIT
AL
21%
20001999
GFNorte GFNorte
15%
GF
SA
NT
AN
D
18
2000 GFNORTE EARNINGS2000 GFNORTE EARNINGS
5%4%
2%3%
87%
BANKING
BROKERAGE
LONG TERM SAVINGS
HOLDING
AUXILIARY ORGANIZATIONS
A major contribution to earnings was that of A major contribution to earnings was that of the Banking Sector with 87% of total Group´s the Banking Sector with 87% of total Group´s
earningsearnings
19
The negative impact of interest rates and lower income from The negative impact of interest rates and lower income from IPAB was more than offset by higher volumes of operations, IPAB was more than offset by higher volumes of operations,
non interest income and efficiency improvementnon interest income and efficiency improvement
Million of Ps. Data as of December 2000Market interest rates dropped 6.3 percentual points in one year period.Important interest rate drop on IPAB notes.
NON INTEREST EXPENSE NON INTEREST EXPENSE
6,9425,881
1999 2000
15%
TOTAL NET INCOME TOTAL NET INCOME
1,052
1,563
1999 2000
48%
TOTAL GROSS INCOME TOTAL GROSS INCOME
8,789 7,942
1999 2000
57%1,928
2,005
822
1,336Non Interest
Income
IPABMargin
50%
5,524 5,115Margin
Operation 7%
10%
20
57,317
41,473
1999 2000*
38 %
$ 5,561 millions pesos
ASSETS UNDER ASSETS UNDERMANAGEMENTMANAGEMENT
2000 RECOVERY2000 RECOVERY
The Recovery Bank, that was created in 1997, had The Recovery Bank, that was created in 1997, had excellent results. At present time it has 761 excellent results. At present time it has 761 employees distributed in 33 regional officesemployees distributed in 33 regional offices
Cash 85%
Others15%
Serfín $17,300Loans
Current Ps.* Includes $8,547 millions of own risk loans. Others includes repossesed assets, excluding restructurings.
21
Asset QualityAsset Quality
22
The Banking Sector performing commercial, mortgage The Banking Sector performing commercial, mortgage and consumer loans showed a 23% increased in the and consumer loans showed a 23% increased in the
year and past due loans decreased by 17%year and past due loans decreased by 17%
23,912
19,483
1999 2000
23 %
Millions as December 2000Performing loans not includes IPAB, governmental and financial entities.
4,1204,935
1999 2000
17 %
PERFORMING LOANS PERFORMING LOANS PAST DUE LOANS PAST DUE LOANS
23
PAST DUE LOAN RATIO PAST DUE LOAN RATIO
Data as of Dec ‘00.
Banorte has maintained a low level of past due loansBanorte has maintained a low level of past due loans
BANAMEX BITAL BBVA -BANCOMER
BANORTESANTANDER-SERFIN
0.9%
3.7%
5.1%
7.1%7.8%
3°
2000
5.1%
1999
5.8%
Banorte Banorte Banking Sector Banking Sector
24
RESERVE COVERAGE RESERVE COVERAGE
BANORTEBBV -
BANCOMERBANAMEX BITAL SANTANDER-
SERFIN
443.7%
102.5% 101.1%111.8%
106.4%
Banorte maintained a reserve coverageBanorte maintained a reserve coverageof 101.1%of 101.1%
Data as of Dec ‘00.
25
CapitalizationCapitalization
26
CAPITALIZATION RATIO CAPITALIZATION RATIO
Capitalization ratio stood at 12.0% with rules of 2003Capitalization ratio stood at 12.0% with rules of 2003
12.3% 12.0%11.2%
BANAMEX BBVA -BANCOMER
BITAL BANORTESANTANDER - SERFÍN
16.0%
15.4% 13.8%14.3% 13.3%20.7%W/O MARKETRISK
Data as of December 2000.
2003 2000 200120032000RULES OF:
12.3%
27
This strategy has shown good results that have been This strategy has shown good results that have been recognized by international rating agenciesrecognized by international rating agencies
◗ In January 9, 2001, Fitch:
✔ Granted a C/D rate for indivudual strength to Banorte, the
highest for a mexican bank.
✔ Granted the BBB- rate for local currency and BB+ rate for
foreign currency, been the latter limited only by the contry
risk.
✔ A positive perspective that confirms the financial strength of
Banorte.
28
Others SectorsOthers Sectors
29
Millions as of December 2000. Wholesale Participation. 1) Sep ‘00. 2)Nov ‘00, 3)Jun ‘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
1999 2000
161.2 5.1% 27.1 5.6% 1)
29.1 17.5% 42.4 19.9% 1)
11.3 4.9% 23.1 4.8% 2)
2.5 13.7
6.3 6.2
59.5 8.7% 68.3 8.9%
(6.4) 0.9% 4.6 1.0% 1)
(23.8) 6.7% (32.8) 9.8%
Brokerage House
Leasing
Factoring
Warehousing
Bonding
Afore
Bancassurance
Annuities
Long Term Savings:
Brokerage Sector:
Auxiliary Organizations:
1.0%
N.A. N.A.
2.1% 3)
30
Our Pension Funds Management company has shown Our Pension Funds Management company has shown an outstanding performancean outstanding performance
AFORE INDICATORS AFORE INDICATORS
BANORTE INDUSTRY
Ps 261 Ps 558
24.7% 17.7%
55.9% 27.7%
Total Expenses per contributor 1)
Contributing Affiliates growth *
Commissions growth *
1) Source: Salomon Smith Barney, Private Pension Funds in Latin America. Published December 2000. Total expenses as of September 2000.* Source: ING Barings; Sep/2000 vs Sep/1999 in real terms.
31
www.banorte.comwww.banorte.com
32
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 30,000 clients.
◗ Business PC Banking.- with more than 75,000 transactions per
month and 3,400 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.
33
Next steps in InternetNext steps in Internet
◗ Increasing the functionality of service platforms besides
making strategic alliances as a way of growth.
◗ Increasing the volume of operations improving customer
service quality and trust.
◗ Developing new businesses.
◗ Using Intranet to:
✔ Support the commercial process
✔ Transform the internal process
◗ Motivating the development of a new technological
architecture.
34
Efficiency Projects & Efficiency Projects & AlliancesAlliances
35
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, GFNorte In order to improve it’s operating efficiency, GFNorte has three main projects in processhas three main projects in process
36
GFNorte has made several alliances aimed to improve GFNorte has made several alliances aimed to improve its valueits value
Banorte’s clients will have access to this spanish bank and viceversa.
Third most important business in money transfers from US to Mexico.
Tourism spots development.
Additionally, other specific associations:
...........................................................Caja de Ahorros de Valencia, Castellón y Alicante
37
II. MANAGEMENT’ S VISION & II. MANAGEMENT’ S VISION & STRATEGIESSTRATEGIES
38
GFNorte has followed a clear and sucessful strategy GFNorte has followed a clear and sucessful strategy for increasing it’s profitabilityfor increasing it’s profitability
New Loans New Loans
Non Interest Non Interest IncomeIncome
Deposit Volume Deposit Volume and Mixand Mix
Non InterestNon InterestExpenseExpense
RecoveryRecovery
PROFITABILITY
IPABIPAB
IncomeIncome
InterestInterest
RateRate
Risk ControlRisk Control
39