1 gfnorte´s 1q07 results conference call april 27, 2007
TRANSCRIPT
1
GFNorte´s 1Q07 Results
Conference callApril 27, 2007
2
New accounting standards
Careful consideration should be taken when comparing
1Q07 results with respect to previous quarters as new
regulations and accounting standards issued by the
National Banking and Securities Commission (CNBV) in
2006 went into effect in January of this year. As a result,
reported 1Q07 figures are not fully comparable with
previous quarters. Where applicable, GFNorte has
provided pro-forma comparisons.
3
New accounting standards
Change Impact
Deferral of fees charged on new loans. 89% in Commissions Charged.
20 bp NIM.
123 bp in efficiency ratio.
Non financial companies consolidated. 25 bp in efficiency ratio.
Financial derivatives marked to market. 54 bp in efficiency ratio.
Income of Portfolios Acquired: from Non Interest Income to Non Operating Income.
140 bp in efficiency ratio.
4Q06 excess loan loss reserves credited vs. income statement in 1Q07.
23 pp in reserve coverage.
4
GFNorte Highlights
MILLION PESOS
Performing loans growth
Past due loan ratio
Reserve Coverage
1Q07
Net Income
ROE
Stock Price
EPS
P/BV
1Q06
Net Interest Margin
Tax Rate
23% 24%
1,423
25.4%
14%
25.89
0.70
2.25
7.5%
102%
70%
0.80
3.83
7.1%
1.6%
171%
1.4%
149%
14%
24.0%
1,623
52.30
35% 37%
5
GFNorte´s Income Statement
MILLION PESOS
Net Interest Income
ServicesRecovery
Foreign 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
1Q06 Change1Q07
3,729
2,052
3,430
2,150
388
122386
1,254 1,383113
91465
9%
10%(71%)
47%
(5%)
(26%)
4%
8%
5,781
(3,387)
5,580
(3,123)
(3%)
6,605%
23%
14%
(34%)
(38%)
2,394
339
(903)
1,623
(255)
50
2,457
5
(734)
1,423
(386)
81
6
ROE and ROA
ROE ROA
26%
1Q06
27%
1Q05
24%
1Q07 1Q05
2.5%2.8%
1Q06
2.7%
1Q07
7
Net Interest Margin vs CETES
PERCENTAGE
1Q05 2Q05 3Q05 4Q05 2Q06 3Q06 4Q061Q06 1Q07
CETES
NIM
8.1
9.0
9.7 9.5
8.6
7.6
7.0
6.2
7.3
8.5 8.3 8.5
7.5
7.1
7.1 7.0 7.0
7.7 8.0 7.9
77% 101%
8
NIM Variation
PERCENTAGE
7.9% (0.2%) (0.2%) (0.2%) (0.2%) 7.1%
4Q06 1Q07
Loan commissions
INB Governmentloans
Calendar Effects
9
Non Interest ExpenseBILLION PESOS
EFFICIENCY RATIO
Non Interest Expense
1Q06
3.1
1Q07
3.48%
61%
1Q05
55%
1Q06
58%
1Q07
55%
Changes to Accounting Standards
340 bp
10
Core DepositsBILLION PESOS
Mix
Demand
Time
Demand
Time
Total
Deposits 1Q05 1Q071Q06
93
56
148
79
44
123
68
39
107 21%15%
8%
10%
9%
YoY Changew/o INB
18%
27%
16%
13%
63%
37%
100%
64%
36%
100%
63%
37%
100%
11
BILLION PESOS
Performing Loan Portfolio
1Q06 4Q06 1Q07 QoQVariation
YoY
Commercial
Corporate
Government
Total
Consumer
1Q06 4Q06 1Q07
121142 151
1% 45%
4% 16%
36% (1%)
6% 24%
5% 18%
60
26
15
151
50
59
24
11
142
48
42
22
15
121
42
12
Performing Consumer Loan PortfolioBILLION PESOS
Consumer
Car loans
Credit Card
Payroll loans
Mortgage
1Q06 4Q06 1Q07 QoQVariation
YoY
1Q06 4Q06 1Q07
4248 50
2% 5%
10% 50%
2% 27%
5% 18%
5% 12%
7
11
5
50
28
6
10
5
48
27
6
7
4
42
25
28%
YoY Changew/o Extras
28%
13
Asset Quality
Past Due Loans
Loan Loss Reserves
1Q06 4Q06 1Q07
RESERVECOVERAGEPAST DUE LOAN
RATIO
1Q06 4Q06 1Q071Q06 4Q06 1Q07
Total Loan Portfolio
BILLION PESOS
2.0
3.4
149%171% 172%
1.4%1.6% 1.4%
125
2.1
3.6
146
2.2
3.3
155
14
ReserveReversal
Balance1Q07
Balance4Q06
(464)
3,321
3,576
New Reserves
708
210
498
Performing loans
PDL’s
Charge offs
(499)
Evolution of Loan ReservesMILLION PESOS
15
Banking Sector Capitalization Ratio
Tier 1
Tier 2
TOTAL
1Q05 1Q06 1Q07
Percentage Tier 1
11.0%
4.9%
15.9%
69%
12.5%
3.6%
16.2%
77%
13.0%
2.6%
15.6%
83%
PERCENTAGE