Banorte is one of the largest banking institutions in Mexico in terms of assets, loans and deposits as well as one of the country’s most profitable banks over the past decade. It has the largest presence in Small and Medium Sized Enterprise (SMEs) banking, financing and capital access for home developers, third party correspondent banking and distressed asset management. It is the second largest mortgage bank, the third largest in car lending and financing to states and municipalities and the fourth most important in corporate banking and payroll lending.
Banorte’s main business is retail banking with 8.5 million clients and 1,500 corporate clients, having a footprint of 1,134 branches, 5,004 ATMs and 58,336 POS’s nationwide. It also provides a wide array of products and services to more than 7 million additional clients through its retirement savings funds, annuities and insurance companies. It operates a broker dealer, mutual funds, leasing, factoring and warehousing, among other business lines. It manages more than $55bn in assets and is the only large institution controlled by Mexican shareholders.
Current strategy
The main focus of the bank’s strategy in the recent past has been to strengthen its fundamentals, complement organic growth through acquisitions and expand its international presence. The main differentiators of Banorte among the top financial institutions in Mexico are continuous innovation, committed personnel, conservative risk management, increasing market shares and sound financial performance. Since its inception, Banorte has had a principle of shared responsibility and value creation, added to the genuine concern for preserving the environment, which has translated into a model of sustainability that takes into account all its stakeholders with a long-term vision, achieving as a result high standards of excellence in human resource management and corporate practices. The bank was recently recognised as one of the best places to work in Mexico and to launch a career. In corporate governance, 50 percent of its board members are independent and Don Roberto Gonzalez Barrera, our majority shareholder and architect of the modern Banorte was designated as Chairman Emeritus, while Guillermo Ortiz, the former Governor of the Central Bank and Minister of Finance, was appointed as Chairman of the Board. Also, the Social Responsibility Annual Report for 2009 achieved the level of GRI B+, proof of the continuous efforts to evolve as a socially responsible organisation.
As part of its expansion strategy, Banorte recently announced a merger with IXE, a Mexican bank specialising in Premium and Wholesale Banking. This merger will consolidate Banorte’s presence as the third largest bank in Mexico, with the second most important footprint in Mexico City and a leading presence in leasing, factoring, brokerage, mutual funds, investment banking, DCM and ECM, among other business lines. After the merger, Banorte will add Ps. 113.6n in assets and 155 branches to its existing base, among other things.
In the USA, Banorte has been undertaking a “three-pronged strategy” that has produced significant benefits for its clients via private banking and brokerage services through Banorte Securities, as well as retail banking through Inter National Bank (INB), a Texas-based bank, and remittances services through Uniteller in New Jersey and Motran in California.
Presence in financial markets
The bank’s shares trade in the Mexican Stock Exchange (Ticker: GFNORTEO), and is one of the 10 most liquid stocks in the IPC index. Also, as part of a strategy to expand its presence in international financial markets and access new investor pools, Banorte established in 2009 a Level I ADR Program (Ticker: GBOOY) in the OTC markets, which recently started trading in the OTCQX International Premier electronic platform. Additionally, Banorte was listed in 2009 in the Madrid Stock Exchange’s Latibex market (Ticker: XNOR), being included in the FTSE Latibex All Shares Index and the FTSE Latibex Top Index as part of the listing. The bank has also issued in the past senior unsecured debt and subordinated debentures, all of which currently trade in the international markets.
Future outlook
Over the next 12 months, the bank’s strategy will focus on increasing profitability by successfully integrating IXE’s operations into Banorte and realising the synergies from the merger, as well as by taking advantage of the banking penetration opportunities that exist in Mexico and by cross selling retail products to the increasing client base. The bank will continue to develop innovative products that best suit the needs of the Mexican population and SME’s, increase its service standards, modernize its operations and IT platforms, grow organically and through strategic acquisitions, enhance its human capital, proactively manage its balance sheet while integrating social and environmental best practices, hoping to make Mexico stronger.
David Ricardo Suarez is Head of Investor Relations at Banorte
For more information tel: (52 55) 52 68 16 80; email: investor@banorte.com
