financial Capital

Ursula Wilhelm Nieto

Executive Director
Investor Relations

2016 was a year in which GFNorte made its financial strengths clear by achieving positive figures, as can be seen in the next section, with information based on consolidated financial statements.

Ursula Wilhelm Nieto

Executive Director
Investor Relations

(SRS 201-1)

GFNorte’s Net Interest Income (NII) increased +14% YoY going from Ps 46.576 billion in 2015 to Ps 53.057 billion in 2016. The foregoing, driven primarily by the NII without Insurance and Annuities which totaled Ps 47.027 billion in 2016, +14% vs. 2015, reflecting growth in the portfolio and deposits, as well as rate increases that Banxico carried out in December 2015 and 2016, which increased +275 bp. The favorable results were due to the +16% increase in the NII of the loan portfolio and deposits, as well as a +10% in the repo’s NII.

Net interest margin (NIM) for 2016 was 4.8%, an increase of +40 bp vs. 2015. This growth resulted mainly from an improvement in the loan portfolio mix, curtailment of funding costs, as well as the benefits arising as a result of higher market rates.


During 2016, provisions charged to results totaled Ps 13.313 billion, represented an increase of +25% YoY mainly as a result of higher requirements for the payroll, credit card and corporate portfolios, which were not offset by the reduction in requirements for the commercial portfolio. The +25% increase was not related to deterioration in the credit quality (the PDL portfolio was reduced by 13% YoY), but due to the effect of reserves released in March 2015, May 2015 and December 2015, which offset the requirements of those months, respectively. When eliminating this release of reserves, the increase in the requirement for provisions in 2016 would have been only +11%.

Provisions represented 25.1% of net interest income in 2016, +2.1 pp higher compared to the same period of the previous year.


Non-Interest Income totaled Ps 16.465 billion for the year, increasing by + 5% or Ps 854 million vs. 2015, driven mainly by the Service Fees.


Non-Interest Expenses for 2016 totaled Ps 31.243 billion, + 6% higher YoY as a result mainly of increases of:

  • +Ps 879 million in Personnel expenses mainly related to future pension fund and bonus payments.
  • +Ps 617 million in Rents, Depreciations and Amortizations mainly for amortizations of technology projects and software rentals;
  • +Ps 283 million in Management and Promotional expenses resulting from increases in: i) the volume of payment method transactions, ii) campaigns for the promotion of products and services, and iii) charges for system maintenance; and
  • +Ps 224 million in IPAB contributions, in accordance with growth in deposits.

The Efficiency ratio for 2016 was 45.3%, (2.6 pp) lower compared to the same period of the previous year - derived from a positive operating leverage - managing to continue the trend of historically low efficiencies.


GFNorte’s Net Income for 2016 was Ps 19.308 billion, +13% YoY higher, as a result of the positive trend observed in net interest income and non-interest income.

ROE for 2016 was 13.9%, comparing favorably to the 13.3% del 2015; equity increased +4% annually; while [ROTE was 17.4%, +77 bp higher than for the previous year.] Accumulated ROA for 2016 was 1.58%, +11 bp higher YoY and [RAPR rose to 3.2% the same as in 2015.]

Total Performing Loans increased by +12.9%, closing 2016 with a total of Ps 566.713 billion. There was outstanding annual performance in virtually all the portfolios driven dynamics in origination, Corporate (+17%), Consumer (+17%) and Commercial (+14%).


At closing of 2016, the PDL portfolio totaled Ps 10.312 billion, (Ps 1.548) billion less or (13%) YoY, impacted by improvement in virtually all of the portfolios, but mainly due to the reduction in the Corporate portfolio as a result of the Urbi portfolio exchange.

In 2016, the PDL Ratio was 1.79%, at historically low levels, improving by (52bp) vs. that registered in 2015, driven by reductions in virtually all segments as a result of the strategy to improve origination quality and specifically for the corporate portfolio mainly due to the Urbi portfolio exchange during the last quarter.

At closing of 2016, Total Deposits reached Ps 575.755 billion, an annual increase of +6%, the reduced growth rate was not due to a reduction in deposits, since customer deposits increased by +13% YoY, but due to a reduction in the Money Market as part of the strategy to control funding costs in the face of market rate increases. Total Assets Under Management increased +7% YoY due to the aforementioned strategy.


International Ranking - GFNorte
Domestic Ranking - GFNorte

our shareholders (SRS 103-1)

As one of the most public companies in Mexico, we are committed to following the highest standards in terms of corporate governance, disclosure of information and communication with investors and stakeholders.

Grupo Financiero Banorte’s shareholder base is globally diversified, consisting of individuals and institutional investors. Throughout the Group’s institutionalization process various strategies were developed to adapt to different investment criteria in order to broaden our shareholder base, and be that option for those seeking to invest in the long or short-term or for our dividend policy.

We are a financial group that listens to and cares about its shareholders. An example of this is the amendment to our Articles of Association and changes to the Nomination Committee, the aforementioned in response to recommendations and concerns voiced by our of our minority investors.

Efforts were directed at strengthening our relationship with the community, investors, analysts and securities’ rating agencies, seeking to expand our channels of communication mainly in 2016, through innovations in our digital platform and providing more details in information disclosures. All the while maintaining our traditional channels: quarterly and annual reports, quarterly conferences, Non Deal Roadshows and attending conferences of various international and national brokerages.

In our constant search for innovation, this year, for the first time we participated in a virtual Non Deal Roadshow, reaching a wider audience from all around the world.

In particular:

  • We actively participated in 11 conferences (national and international), 7 Non-Deal Roadshows and 53 on-site visits.
  • In 2016 we met with approximately 60% of GFNorte’s total shareholders.
  • Senior Management was present at 40% of the conferences attended.
  • Appeal for the Institution has grown continuously, which brought over 20% of the institutional investors to visit, meeting more than once with Banorte.

In terms of sustainability, GFNorte has developed a solid program which supports efforts to achieve sustainable development, promote social responsibility in the search for returns on investments, convey an awareness for sustainable development and for environmental protection in our daily work.

We will continue to strengthen our relationship with investors, confident that improved communication and greater transparency are the way forward in order to maintain us as a reference in the field of corporate governance and disclosure of information.