The following is a summary of the Grupo Financiero Banorte, S.A.B. De C.V. (GBOOY) Q4 2023 Earnings Call Transcript:
Financial Performance:
Grupo Financiero Banorte reported a Q4 net income of MXN13,044 million, a 13% increase YoY, leading to a total net income for the year of MXN52,418 million, up 18% from 2022.
A 20.7% capital adequacy ratio was achieved by the end of the year.
The Group's ROE approached 22%, exceeding initial forecasts and marking a 275 basis points lead from the previous year.
Banorte Bank secured a significant ROE of 27.4%.
The Group's Q4 net interest margin was 6.4%, while the bank reported a net interest margin of 6.6%.
The bank's cost to income ratio aligned with predictions at 36.2%.
Both net interest income and banking fees saw robust growth YoY, at 16% and 12% respectively.
Despite observed margin compression, the bank maintains a reasonable margin around 6.4 to 6.5%, balanced with strong fee activities.
Business Progress:
Banorte completed its 1-2-3 Strategic Plan, enhancing capabilities to compete in a hybrid digital-physical world, with a new plan to be presented to the board soon.
The bank is set to launch a fully digital operator by the end of the month to increase financial inclusion and enhance customers' financial health by 2026.
The company is committed to sustainability, planning to reduce its carbon footprint and disclose nature-related risks from 2025.
Continued transformations are being made in the technology sector and the format of the branch network, including the moderate opening of branches with new setups.
Revenue growth is anticipated from new operations like Bineo and partners like Rappi.
The bank aims to reach a 34% cost to income ratio by 2025.
An expense growth of 13% to 14%, loan growth of 10% to 12%, and ROE of 21% to 22% for the group and 27.5% to 29% for the bank are expected for 2024.
The bank maintains a balance across businesses and is targeting a bank margin of roughly 6.5%.
Steps towards preserving credit quality have been implemented, including more selective loan origination and legal counsel involvement. Future costs of risk are expected to remain stable.
More detailed: Grupo Financiero Banorte SAB de CV Sponsored ADR Class O IR
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