1

GFNorte:1Q06 Results

May-2006

2

1. 1Q06 Results

2. Recent Developments.

3. Stock Performance

4. Economic and Political Outlook

5. Final Remarks

Contents

3

1. 1Q06 Results

4

GFNorte HighlightsMILLION PESOS

Performing loans growth

Past due loan ratio

Reserve Coverage

19% 23%

1Q06

Net Income

ROE

Stock Price

EPS

P/BV

1Q05

1,130

26.9%

Net Interest Margin

21%

18.19

0.54

2.19

7.3%

42%

7%

0.68

2.35

7.5%

1.9%

154%

1.6%

171%

26%

25.5%

1,370

25.89

Tax Rate 28% 35%

5

GFNorte´s Income StatementMILLION PESOS

Net Interest Income

ServicesRecoveryForeign ExchangeTrading

Non Interest Income

Total Income

Non Interest Expense

Net Operating Income

Non Operating Income (Expense) Net

Income Tax

Net Income

Loan loss and loss sharing provisions

Subsidiaries and minority interest

1Q05 Variation

11%

4%135%104%188%

38%

20%

8%

39%

(218%)

66%

21%

45%

134%

1Q06

3,293

1,204380117371

2,072

5,365

(2,950)

2,415

(45)

(704)

1,370

(371)

75

2,961

1,154162

57129

1,503

4,464

(2,726)

1,738

38

(425)

1,130

(255)

32

6

Non Interest ExpenseBILLION PESOS

EFFICIENCY RATIO

61%

1Q05

54%

1Q06

Non Interest Expense

1Q05

2.7

1Q06

2.98%

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ROE & ROA

ROE ROA

1Q05

2.5%2.8%

1Q06

26%

1Q06

27%

1Q05

8

NIM vs CETES

Percentages

1Q04 2Q04 3Q04 4Q04 2Q05 3Q05 4Q051Q05 1Q06

CETES

NIM

6.3

7.1

8.1

9.7 9.5

8.69.0

7.6

5.6

4.45.1

6.2

8.5 8.3 8.5

7.3 7.5

4.2

75%

99%

9

Core Deposits

BILLION PESOS

Demand Time

Total

Mix

DemandTime

Deposits 1Q04 1Q061Q05

7642

118

64%36%

100%

6538

103

63%37%

100%

6336

99

64%36%

100%

14%4%

10

BILLION PESOS

Performing Loan Portfolio

1Q05 4Q05 1Q06 QoQVariation

YoY

1Q05 4Q05 1Q06

94114 116

Commercial 0% 14%

Corporate 3% 35%

Government (6%) 10%

Total 2% 23%

Consumer 6% 33%

40

21

14

116

41

40

21

15

114

38

35

16

13

94

31

11

Performing Consumer Loan Portfolio

1Q05 4Q05 1Q06

3138 41

0% (1%)

7% 62%

11% 72%

Consumer 6% 33%

Car loans

Credit Card

Payroll loans

7% 32%Mortgage

BILLION PESOS

1Q05 4Q05 1Q06 QoQVariation

YoY

6

7

4

41

24

6

6

3

38

23

6

4

2

31

18

12

Transformation of Loan Book

Corporate27%

Commercial36%

Government8%

Consumer29%

Corporate18%

Commercial34%

Government13%

Consumer35%

1Q03 1Q06

$62.4 billion pesos

$116.1 billion pesos86%

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MORTGAGE

1,260

2,459

1Q05 1Q06

LOAN ORIGINATIONBillion pesos

95%

AUTOMOTIVE PAYROLL

3,328

5,086

1Q05 1Q06

53%

TOTAL

1,229 1,267

1Q05 1Q06

3%

838

1,360

1Q05 1Q06

62%

Dynamics of Consumer Loans

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Asset Quality

Past Due Loans

Loan Loss Reserves

1Q05 4Q05 1Q06

RESERVECOVERAGE

1.8

2.8

PAST DUE LOANRATIO

171%154% 166%

1Q05 4Q05 1Q06

1.6%1.9%

1.6%

1Q05 4Q05 1Q06

Total Loan Portfolio 98

BILLION PESOS

1.9

3.1

118

1.9

3.2

120

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Banking Sector´s Capitalization Ratio

Tier 1

Tier 2

TOTAL

1Q04 1Q05 1Q06

Percentage Tier 1

12.5%

3.6%

16.2%

77%

10.5%

5.0%

15.4%

68%

13.0%

2.6%

15.6%

83%

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Net Income

1Q03 1Q06

Proprietary87%

Managed13%

Proprietary29%

Managed71%

Million Pesos

1Q04

156

1Q05

213

1Q06

270

Recovery Bank

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Recovery BankASSETS UNDER MANAGEMENT

42 38 31

18 22 33

1Q03 1Q04 1Q05

Banorte

IPAB

60 60 64

BILLION PESOS

8

53

1Q06

61

18

NET INCOMEMillion Pesos

Afore

5843

1Q05 1Q06

Insurance

6755

1Q05 1Q06

18%

Annuities

11

41

1Q05 1Q06

273%

Total136 140

1Q05 1Q06

3%

26%

Long Term Savings

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Monthly Sales per Branch

MORTGAGES LIFE INSURANCE

1.0

1.4

4Q04 4Q05

1315

4Q04 4Q05

0.8

4Q03

9

4Q03

20

Update on New Products

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New Products

Clients: 58,000.

Portfolio: $1.7 billion.

Average loan per client: $28,000 pesos.

Active accounts: 470,000.

Balance: $1.3 billion.

Average accounts openned daily: 1,600.

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New Products

Active accounts: 83,000.

Balance: $2.8 billion: Checking: $1.2 billion. Time Deposits: $0.9 billion. Other Investments: $0.7 billion.

40 branches in 20 cities.

50 more branches in 2006.

Clients: 20,000.

Loan Portfolio: $403 million.

Average balance per loan: $20,000 pesos.

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2. Recent Developments

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Investment Grade by S&P

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March 24March 24 Upgrade by Standard and Poor’s to investment grade.

Investment Grade by S&P

=

+2

=

Notches above Inv.

Grade

Baa1

BBB-

BBB-

GFNorte

Fitch

Moody’s

Standard & Poor’s

Agency

BBB

BBB

Baa1

Sovereign

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Investment Grade by S&P

Implications:

Recognition of the Group’s strength.

Reduction in funding costs.

More liquidity to the stock.

Wider investor horizon.

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Banorte USA

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Formal filing with authorities:

SHCP: March 14.

FED: March 16.

Process advances in the time-frame established.

Follow-up to FED’s feedback.

Estimated conclusion: 4Q06.

INB Acquisiton: Authorization Process

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Headquarters: New Jersey, USA.

11 years operating.

Annual transactions:

More than 1.1 million.

US$370 million.

1,000 collection agents in 41 of the 50 states in the USA + D.C.

More than 4,000 payment points in 19 countries.

Main destinations of transfers:

Mexico: 50%.

Central America: 40%.

Phillipines: 10%.

Purchase of Uniteller

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Value / EBITDA

Acquisition of 100% of Uniteller for US$19 million.

Multiples within market references.

Closing estimated: 4Q06.

Description of Transaction

Recent Transactions

2117

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17

Uniteller Vigo Dolex Global Payments

Western Union

(First Data)

Moneygram

Market Valuations

19 17

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Entry into an attractive industry.

CAGR for the past 10 years: 19%.

More participation in the value chain.

80% of the money transfer income is generated in the USA.

Contact with users in both sides of the border.

Transfer and payment – bancarization opportunities.

Potential synergies:

INB through Netspend

Other business units in Banorte

Benefits of the Transaction

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Launching of Banorte’s Loyalty Program

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Recompensa Total Banorte

Objective:

Retain clients and attract new ones.

Promote cross selling.

Increase deposit balances.

Encourage timely payments of loans.

Incentivate use of credit and debit cards.

First loyalty program that rewards clients for all products and services within the Financial Group.

Launch date: May 15.

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3. Stock Performance

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Performance of IPC vs. GFNorte

1Q062004-2005

IPC

8%

Banorte

16%

IPC

102%

Banorte

128%

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GFNorte: Daily TurnoverMillion Dollars

1Q03 1Q04

1.8

6.7

1Q05

8.7

1Q06

15.3

37

BMV: Most Active StocksDaily turnover in million dollars

1Q06

Stock Volume

1) América Móvil 49.3

2) Cemex 29.8

3) Telmex 28.7

4) Wal-Mart 26.8

5) Grupo México 23.9

6) Televisa 17.8

7) Banorte 15.3

8) Geo 9.6

9) ICA 8.9

10) Modelo 8.5

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GFNorte: Market CapitalizationMillion Dollars

1,990

1,160

1Q03 1Q04

3,284

1Q05

CAGR: 61%

4,794

1Q06

39

5

7

9

11

13

15

17

19

21

2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0

Comparison with Latin AmericaMARKET VALUE IN BILLION DOLLARS

2005

Banorte

Unibanco

Santander Chile

Banco de Chile

Itaú

Bradesco

4.8

4.9

40.9

37.4

8.7

P/E ‘05

P/BV ‘05

11.9

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4. Economic & Political Outlook

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Economic Outlook

Fiscal and external accounts are almost in balance, with a positive outlook for 2006 due to higher oil prices.

Remmitances surpassed US $20 billion last year, and showed and impressive growth of 28% in 1Q06.

International reserves are at an all time high of US $70.5 billion.

Inflation is in check and should close 2006 below 3.5%.

GDP growth in 1Q06 was over 5% and the yearly forecasts have been raised to 4%.

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Political Environment

The campaigns are in full gear.

Calderon’s change of strategy is paying off.

Negative campaigning is intensifying.

First debate affected AMLO.

Recent polls show that Calderon has become the fore-front runner.

Most of the gains come from “switch” voters.

AMLO is not accepting the changing trends.

Eventhough lagging, Madrazo continues working the party’s base and is still alive.

Expect a close election.

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5. Final Remarks

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Medium Term Challenges

Consolidate 20/20 vision under a more competitive environment.

Continue with innovation and bancarization.

Develop Banorte USA.

Intensify client attraction and retention.

Cross selling of products and services.

Increase efficiency and productivity.

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