The following is a summary of the Grupo Financiero Banorte, S.A.B. De C.V. (GBOOF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Grupo Financiero Banorte reported a net income of MXN14.2 billion, a sequential increase of 9%.

• The company's return on equity (ROE) improved by 134 basis points.

• A gross margin percentage of 21.3% was achieved.

• The company's loan portfolios showed double-digit annual growth across most sectors.

• Strong balance sheet with focus on solvency and liquidity, and solid growth in capital numbers.

• Expenses reduced by 14% quarter-on-quarter.

• Cost-income ratio below 34%, with revenue growth above 14%.

• Plans to implement 50% dividend retribution to shareholders for the current year.

Business Progress:

• The focus continues on asset quality and balance between lending activity and funding costs.

• Consumer book, the fastest-growing segment, is driven by increased customer lifetime value.

• Works progressing for a full product offering for Bineo, the newly launched digital bank.

• Rappi operations are exhibiting positive unit economics and are expected to break even soon.

• Issued its first sustainable bond and enhanced ESG metrics disclosure.

• Committed to strong risk controls and planning growth based on acceptable risk levels.

• Digital transformation to expand banking services through Bineo in pipeline.

• Plans to open 45 branches as part of near-shoring efforts.

• Noteworthy increase in premiums and strong performance in the insurance sector.

• Building stronger relationships in the remittances market.

• Focus on implementing risk management methodology in Rappi for achieving breakeven point.

• Efforts on managing dollar funding needs and possible legislative proposal about public unit for unclaimed Afore.

• Opportunities to issue Tier 2 Bonds and green bonds being considered.

• Independent technology base for Bineo to eliminate legacy layers and drive costs down.

• Corporate loans grew 20%, commercial loans 12%, and SME loans 32% last year.

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