Banca Quadrum S.A. Reports First Quarter 2001 Results

Apr 27, 2001, 01:00 ET from Banca Quadrum, S.A.

    MEXICO CITY, April 27 /PRNewswire/ --
 Banca Quadrum, S.A. (Nasdaq:   QDRMY) today announced results for the first
 quarter ending March 31, 2001.
     During the first quarter of 2001, Banca Quadrum reported a net loss of MXP
 28.9 million, equivalent to MXP 4.27 per basic American Depository Receipt
 Equivalent (ADS), as of March 31, 2001.
     The financial statements contained herein have not been audited.
 Management is currently in discussions with its external auditors with respect
 to certain matters of accounting policy, including the valuation of deferred
 taxes in light of the Company's historical performance and the new joint
 venture with Elektra.  The audited financial statements may therefore reflect
 substantial differences.
 
     1. Summary
 
     The non performing assets resulting from credit that was extended prior to
 the 1995 banking crisis (NPA) continue to represent a major burden for the
 bank, both because their recovery has been slower and more expensive than
 expected and because the interest rate at which they are financed (currently
 approximately 15.7% and approximately of 18% during the quarter) is much
 higher than we had expected in the context of sharply declining rates of
 inflation (inflation for the last twelve months has been 7.17% and the target
 for 2001 is 6.5%).
     We estimate the monthly cost of financing the liabilities that would be
 eliminated upon the realization of these assets (including deferred taxes)
 exceeded MXP 13.5 million per month.
     Management is exploring possible means of significantly reducing this
 cost.  It should be understood that the loans that have generated the NPA were
 granted in the context of a different business model, by a company that,
 unable to take deposits from the public, had a cost of funds approximately
 500 basis points higher than the bank enjoys today, and a company that that
 did not experience what is today a more positive "payment culture" and a
 somewhat more efficient and less politicized court system. The bank has
 experienced only one material uncured loan default with respect to its post
 1994 lending (Altos Hornos de Mexico for USD 1 million of which approximately
 70% may be recoverable*).
     Management therefore believes that the bank would be profitable on a pre
 tax pro forma basis if it did not bear the costs associated with the NPA.
     The joint venture with Elektra is now active in 28 stores in 3 cities, it
 is projected to be active in 245 stores in 16 cities by mid August, 2001.
 Elektra expects to market 10,000 mortgages during the twelve months ending
 March 31st, 2002.
     Fixed income trading volume recovered sharply in February and March after
 a slow January.
     Our suite of remote access banking products is now operational with a
 group of test customers.  This product is expected to be released to the
 customers in general sometime in May.  Additionally the banks fixed income
 trading operation has been expanded to include foreign exchange trading.  This
 product was launched during the first week of April and contributed
 approximately MXP 0.5 million during the month.
     We expect the trading operations to contribute substantially to the Bank's
 return to profitability*.  The Bank's current risk management policies limit
 one day value at risk (VAR) to MXP 1.5 million and  "stop loss" to MXP
 5.0 million for fixed income trading and limit foreign currency imbalance to
 no more than 3 million dollars.  There can be no assurance that these
 self-imposed limitations will in fact work or that over a period of time the
 new trading operations will not generate significant losses within these
 limitations, particularly as they may be increased over time.
 
     2. Positive Events
 
     *  As March 31, 2001 reflecting seasonal trends the loan portfolio
        amounted to MXP 2.4 billion ("First Quarter Portfolio"). Reflecting
        negative growth of 5.95%.
 
     *  Gross non-performing loans (before the deduction of general loan loss
        reserves) decreased from 5.84% to 5.44% during the quarter.
 
     *  Income from financial operations without the effect of out of period
        items increased by 19.7% to MXP 15.5 million.
 
     *  Retail deposits increased by 34.1% to MXP 1.4 billion and the number of
        depositors grew by 1.0% from 2,655 to 2,682.
 
     *  During the first quarter of 2001 MXP 30.0 million of impaired loans
        were collected in cash or in kind.
 
     3. Capitalization
 
     Net Worth under Comision Nacional Bancaria y de Valores ("CNBV")
 accounting principles was MXP 252.8 million as of March 31st, regulatory
 capital was 240.2 million and the risk adjusted capital ratio was 8.43%.  The
 Company could reach minimum required capital by mid 2001.
 
     4. Portfolio
 
     The average portfolio during the first quarter was MXP 2.5 billion and as
 of March 31st, 2000 was MXP 2.4 billion. Year over year portfolio growth was
 17.4%.
 
     The distribution of gross non-performing loans to total portfolio may be
 summarized as follows:
 
                    March 31  December 31  September 30    June 30    March 31
                     2001         2000         2000         2000        2000
     Current         94.6%        94.2%        93.9%        93.1%       92.0%
     1-30 days        0.2%         0.1%         0.2%         0.1%        1.2%
     31-60 days       0.1%         0.1%         0.1%         0.0%        0.0%
     Over 60 days     5.1%         5.6%         5.8%         6.8%        6.8%
      Total:        100.0%       100.0%       100.0%       100.0%      100.0%
 
 
     5. Interest Bearing Liabilities
 
     The following table reflects the composition of the Company's interest
 bearing liabilities:
 
                                         (Millions of MXP)
                     March 31,       December 31,    September 30,    March 31,
                       2001              2000             2000          2000
                    MXP      %       MXP      %      MXP      %      MXP     %
     Interbank
      Facilities 1,240.0   36.3   1,273.5   40.2    923.0   31.5    468.0  17.7
     Nafin/
      Bancomext/
      FIRA/
      FOVI/
      INFONAVIT    756.0   22.1     838.5   26.4  1,062.7   36.3    904.5  34.3
     Public Debt                                                      2.0   0.1
     Deposits
      denominated
      In MXP+    1,417.9   41.5   1,057.1   33.3    940.7   32.1  1,261.1  47.8
     Deposits
      denominated
      In USD         1.8    0.1       1.8    0.1      1.7    0.1      1.7   0.1
     Total:      3,415.6  100.0   3,170.9  100.0  2,928.0  100.0  2,637.3 100.0
 
     + Deposits received from other banks have been retroactively reclassified
       to Interbank Facilities
 
 
     6. Retail Deposits
 
     Retail deposits grew by 34.1% during the quarter to MXP 1.4 billion.  The
 Company estimates that its average cost of retail is favorable equivalent to
 TIIE minus 93 basis points. These deposits bore an average maturity of
 32.9 days and were received from approximately 2,682 customers.
 
     7. Outlook and Profitability
 
     The following table illustrates relevant historic balance sheet and other
 trends since September, 1999 on a quarterly basis:
 
 
     NPA(1) and Performing Assets as a Percentage of Portfolio plus REO(2)
                 Mar-01   Dec-00  Sep-00  Jun-00    Mar-00     Dec-99    Sep-99
     Past Due
      Loans(3)    5.39%   5.86%   6.12%    6.92%     7.95%      8.98%    10.58%
     REO(2)       6.85%   5.80%   6.26%    6.82%(5)  9.27%(4)   7.41%     9.01%
     Performing
      Portfolio  87.76%  88.33%  87.62%   86.26%    82.78%     83.61%    80.41%
 
 
    Various Balance Sheet Items as a Percentage of Total Assets Net of Cash
                            & Marketable Securities
                 Mar-01  Dec-00  Sep-00  Jun-00    Mar-00     Dec-99    Sep-99
     Past Due
      Loans(3)     3.9%    4.7%    5.0%    5.5%      6.4%       7.2%      7.7%
     REO(2)        4.9%    4.6%    5.1%    5.4%      7.5%       5.9%      6.5%
     Performing
      Portfolio   63.2%   70.3%   71.1%   68.1%     66.6%      67.0%     58.4%
     Fixed
      assets       3.4%    3.6%    4.0%    4.1%      4.2%       4.0%      4.7%
     Deferred
      Taxes        5.8%    6.1%    4.7%    4.9%      5.3%       5.4%      5.8%
     Other assets 18.8%   10.7%   10.1%   12.0%     10.0%      10.5%     16.9%
 
     (1) Non-performing assets, do not include Sidek trust rights with an
          approximate value of USD 24.0 million.
     (2) Repossessed assets.
     (3) Before the deduction of loan loss reserves.
     (4) Reflects the reclassification of MXP 35 million of equity in a golf
          club developer for land situated on the golf club.
     (5) Reflects principally the sale of the Aguascalientes Plant.
 
     8. Forward-looking Statements
 
     This report includes many forward-looking statements, some of which are
 identified with an "*".  The economy, the political system, the banking
 industry and the regulatory framework in Mexico all continue to remain
 uncertain. The keys to the Company's future in this environment will be its
 successes in implementing its new lending and fee income generation
 strategies, the successful and profitable implementation of the Elektra joint
 venture both by BQ and Elektra, reducing the levels of foreclosed assets
 through sale, and liquidating collateral it has as security for impaired
 loans, including, in particular, the successful liquidation of assets by the
 Sidek trust, as necessary.  A number of factors could cause the results to
 differ materially from those anticipated by the Company. Such factors include
 a down turn or stagnation in the economy (which among other things is
 influenced by the price of petroleum), political instability, adverse changes
 in the regulatory systems for the banks or the markets in which it lends,
 further real or perceived deterioration in the quality of the Company's
 portfolio, interest or currency exchange rate instability, inability to hire,
 train or maintain employees necessary for new lending activities, failure to
 install necessary systems, policies or controls for new lending activities,
 inability to develop systems necessary to transact business effectively over
 the internet or other remote access channels, additional government
 initiatives to relieve creditors, no improvement or further deterioration in
 the market for repossessed assets (including the Sidek trust assets),
 increased competition from non Mexican companies, failure of self-imposed
 limitations on trading risks to protect the Company from significant losses,
 and inability of the Company to attract or maintain deposits at competitive
 rates.
 
     9. Webcast of Earnings Conference Call
 
     A webcast of the Company's earning conference call will be available on
 http://www.videonewswire.com/BANCA/043001at 10AM, Mexico City Standard Time,
 April 30, 2001.
 
     The Company invites those requiring further information to contact Ernesto
 Rodriguez 011-525-284-5693 or visit our website at www.quadrum.com .
 
                      BANCA QUADRUM, S.A. AND SUBSIDIARIES
               CONSOLIDATED BALANCE SHEET AS OF MARCH 31st, 2001
                     (Stated in Thousands of Mexican Pesos)
                                   UNAUDITED
 
     ASSETS                              First Quarter 2001
 
     Cash and Due from Banks                        131,588
 
     Net Investment in Trust Certificates           212,434
 
     Government Securities at cost
      which approximates market                     351,455
 
     Total Loans                                  2,444,118
     Unearned Income                                (37,027)
     Allowance for Loan and Other Losses           (151,373)
 
     Net Loans                                    2,255,718
 
     Other Receivables                               96,657
 
     Assets under Operating Leases and
      Held for Lease (Net)                           94,856
 
     Real Estate, Furniture and Equipment (Net)      52,308
 
     Other Assets
 
     Deferred Charges, (Net)                        198,949
 
     Other                                           19,179
 
     Repossessed Assets                             170,082
 
                                                  3,583,227
 
 
     LIABILITIES                         First Quarter 2001
 
     Interbank facilities                         1,240,005
 
     Trade Finance/Development Banks                755,997
     Time Deposits (denominated in Pesos)         1,417,855
 
     Time Deposits (denominated in Dollars)           1,754
 
     Retainages and Advances from Customers           4,062
 
     Other Liabilities                              135,928
 
     Total Liabilities                            3,555,601
 
     Minority Interest                                  418
 
     STOCKHOLDERS' EQUITY
 
     Capital Stock                                  573,282
 
     RETAINED EARNINGS
 
     Appropriated                                  (298,838)
 
     Unappropriated                                 (28,921)
 
     Cumulative Restatement Effect                 (202,674)
 
     Total Stockholders' Equity                      42,849
 
     Employees Stock Purchase Plan                  (15,641)
 
                                                  3,583,227
 
 
                      BANCA QUADRUM, S.A. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                              FOR MARCH 31st, 2001
                     (Stated in Thousands of Mexican Pesos)
                                   UNAUDITED
 
                                         First Quarter 2001
 
     FINANCIAL INCOME                               135,816
 
     TRADING MARGIN                                   5,450
 
     VALUATION                                        1,346
 
     FINANCIAL EXPENSES                             127,130
 
     INCOME FROM FINANCIAL OPERATIONS                15,482
 
     PROVISION FOR DOUBTFUL ACCOUNTS                  3,059
 
     INCOME FROM FINANCIAL OPERATIONS AFTER
      PROVISION FOR DOUBTFUL ACCOUNTS                12,423
 
     ADMINISTRATIVE EXPENSES                         32,539
     WORKOUT EXPENSES                                 1,651
 
     DEPRECIATION                                     3,189
 
     DEPOSIT INSURANCE PREMIUMS                       3,185
                                                     40,564
 
     INCOME BEFORE PROVISIONS FOR INCOME TAXES      (28,141)
 
     PROVISION FOR INCOME TAXES                         820
 
     NET INCOME BEFORE MINORITY INTEREST            (28,961)
 
     MINORITY INTEREST                                   40
 
     NET INCOME                                     (28,921)
 
 

SOURCE Banca Quadrum, S.A.
    MEXICO CITY, April 27 /PRNewswire/ --
 Banca Quadrum, S.A. (Nasdaq:   QDRMY) today announced results for the first
 quarter ending March 31, 2001.
     During the first quarter of 2001, Banca Quadrum reported a net loss of MXP
 28.9 million, equivalent to MXP 4.27 per basic American Depository Receipt
 Equivalent (ADS), as of March 31, 2001.
     The financial statements contained herein have not been audited.
 Management is currently in discussions with its external auditors with respect
 to certain matters of accounting policy, including the valuation of deferred
 taxes in light of the Company's historical performance and the new joint
 venture with Elektra.  The audited financial statements may therefore reflect
 substantial differences.
 
     1. Summary
 
     The non performing assets resulting from credit that was extended prior to
 the 1995 banking crisis (NPA) continue to represent a major burden for the
 bank, both because their recovery has been slower and more expensive than
 expected and because the interest rate at which they are financed (currently
 approximately 15.7% and approximately of 18% during the quarter) is much
 higher than we had expected in the context of sharply declining rates of
 inflation (inflation for the last twelve months has been 7.17% and the target
 for 2001 is 6.5%).
     We estimate the monthly cost of financing the liabilities that would be
 eliminated upon the realization of these assets (including deferred taxes)
 exceeded MXP 13.5 million per month.
     Management is exploring possible means of significantly reducing this
 cost.  It should be understood that the loans that have generated the NPA were
 granted in the context of a different business model, by a company that,
 unable to take deposits from the public, had a cost of funds approximately
 500 basis points higher than the bank enjoys today, and a company that that
 did not experience what is today a more positive "payment culture" and a
 somewhat more efficient and less politicized court system. The bank has
 experienced only one material uncured loan default with respect to its post
 1994 lending (Altos Hornos de Mexico for USD 1 million of which approximately
 70% may be recoverable*).
     Management therefore believes that the bank would be profitable on a pre
 tax pro forma basis if it did not bear the costs associated with the NPA.
     The joint venture with Elektra is now active in 28 stores in 3 cities, it
 is projected to be active in 245 stores in 16 cities by mid August, 2001.
 Elektra expects to market 10,000 mortgages during the twelve months ending
 March 31st, 2002.
     Fixed income trading volume recovered sharply in February and March after
 a slow January.
     Our suite of remote access banking products is now operational with a
 group of test customers.  This product is expected to be released to the
 customers in general sometime in May.  Additionally the banks fixed income
 trading operation has been expanded to include foreign exchange trading.  This
 product was launched during the first week of April and contributed
 approximately MXP 0.5 million during the month.
     We expect the trading operations to contribute substantially to the Bank's
 return to profitability*.  The Bank's current risk management policies limit
 one day value at risk (VAR) to MXP 1.5 million and  "stop loss" to MXP
 5.0 million for fixed income trading and limit foreign currency imbalance to
 no more than 3 million dollars.  There can be no assurance that these
 self-imposed limitations will in fact work or that over a period of time the
 new trading operations will not generate significant losses within these
 limitations, particularly as they may be increased over time.
 
     2. Positive Events
 
     *  As March 31, 2001 reflecting seasonal trends the loan portfolio
        amounted to MXP 2.4 billion ("First Quarter Portfolio"). Reflecting
        negative growth of 5.95%.
 
     *  Gross non-performing loans (before the deduction of general loan loss
        reserves) decreased from 5.84% to 5.44% during the quarter.
 
     *  Income from financial operations without the effect of out of period
        items increased by 19.7% to MXP 15.5 million.
 
     *  Retail deposits increased by 34.1% to MXP 1.4 billion and the number of
        depositors grew by 1.0% from 2,655 to 2,682.
 
     *  During the first quarter of 2001 MXP 30.0 million of impaired loans
        were collected in cash or in kind.
 
     3. Capitalization
 
     Net Worth under Comision Nacional Bancaria y de Valores ("CNBV")
 accounting principles was MXP 252.8 million as of March 31st, regulatory
 capital was 240.2 million and the risk adjusted capital ratio was 8.43%.  The
 Company could reach minimum required capital by mid 2001.
 
     4. Portfolio
 
     The average portfolio during the first quarter was MXP 2.5 billion and as
 of March 31st, 2000 was MXP 2.4 billion. Year over year portfolio growth was
 17.4%.
 
     The distribution of gross non-performing loans to total portfolio may be
 summarized as follows:
 
                    March 31  December 31  September 30    June 30    March 31
                     2001         2000         2000         2000        2000
     Current         94.6%        94.2%        93.9%        93.1%       92.0%
     1-30 days        0.2%         0.1%         0.2%         0.1%        1.2%
     31-60 days       0.1%         0.1%         0.1%         0.0%        0.0%
     Over 60 days     5.1%         5.6%         5.8%         6.8%        6.8%
      Total:        100.0%       100.0%       100.0%       100.0%      100.0%
 
 
     5. Interest Bearing Liabilities
 
     The following table reflects the composition of the Company's interest
 bearing liabilities:
 
                                         (Millions of MXP)
                     March 31,       December 31,    September 30,    March 31,
                       2001              2000             2000          2000
                    MXP      %       MXP      %      MXP      %      MXP     %
     Interbank
      Facilities 1,240.0   36.3   1,273.5   40.2    923.0   31.5    468.0  17.7
     Nafin/
      Bancomext/
      FIRA/
      FOVI/
      INFONAVIT    756.0   22.1     838.5   26.4  1,062.7   36.3    904.5  34.3
     Public Debt                                                      2.0   0.1
     Deposits
      denominated
      In MXP+    1,417.9   41.5   1,057.1   33.3    940.7   32.1  1,261.1  47.8
     Deposits
      denominated
      In USD         1.8    0.1       1.8    0.1      1.7    0.1      1.7   0.1
     Total:      3,415.6  100.0   3,170.9  100.0  2,928.0  100.0  2,637.3 100.0
 
     + Deposits received from other banks have been retroactively reclassified
       to Interbank Facilities
 
 
     6. Retail Deposits
 
     Retail deposits grew by 34.1% during the quarter to MXP 1.4 billion.  The
 Company estimates that its average cost of retail is favorable equivalent to
 TIIE minus 93 basis points. These deposits bore an average maturity of
 32.9 days and were received from approximately 2,682 customers.
 
     7. Outlook and Profitability
 
     The following table illustrates relevant historic balance sheet and other
 trends since September, 1999 on a quarterly basis:
 
 
     NPA(1) and Performing Assets as a Percentage of Portfolio plus REO(2)
                 Mar-01   Dec-00  Sep-00  Jun-00    Mar-00     Dec-99    Sep-99
     Past Due
      Loans(3)    5.39%   5.86%   6.12%    6.92%     7.95%      8.98%    10.58%
     REO(2)       6.85%   5.80%   6.26%    6.82%(5)  9.27%(4)   7.41%     9.01%
     Performing
      Portfolio  87.76%  88.33%  87.62%   86.26%    82.78%     83.61%    80.41%
 
 
    Various Balance Sheet Items as a Percentage of Total Assets Net of Cash
                            & Marketable Securities
                 Mar-01  Dec-00  Sep-00  Jun-00    Mar-00     Dec-99    Sep-99
     Past Due
      Loans(3)     3.9%    4.7%    5.0%    5.5%      6.4%       7.2%      7.7%
     REO(2)        4.9%    4.6%    5.1%    5.4%      7.5%       5.9%      6.5%
     Performing
      Portfolio   63.2%   70.3%   71.1%   68.1%     66.6%      67.0%     58.4%
     Fixed
      assets       3.4%    3.6%    4.0%    4.1%      4.2%       4.0%      4.7%
     Deferred
      Taxes        5.8%    6.1%    4.7%    4.9%      5.3%       5.4%      5.8%
     Other assets 18.8%   10.7%   10.1%   12.0%     10.0%      10.5%     16.9%
 
     (1) Non-performing assets, do not include Sidek trust rights with an
          approximate value of USD 24.0 million.
     (2) Repossessed assets.
     (3) Before the deduction of loan loss reserves.
     (4) Reflects the reclassification of MXP 35 million of equity in a golf
          club developer for land situated on the golf club.
     (5) Reflects principally the sale of the Aguascalientes Plant.
 
     8. Forward-looking Statements
 
     This report includes many forward-looking statements, some of which are
 identified with an "*".  The economy, the political system, the banking
 industry and the regulatory framework in Mexico all continue to remain
 uncertain. The keys to the Company's future in this environment will be its
 successes in implementing its new lending and fee income generation
 strategies, the successful and profitable implementation of the Elektra joint
 venture both by BQ and Elektra, reducing the levels of foreclosed assets
 through sale, and liquidating collateral it has as security for impaired
 loans, including, in particular, the successful liquidation of assets by the
 Sidek trust, as necessary.  A number of factors could cause the results to
 differ materially from those anticipated by the Company. Such factors include
 a down turn or stagnation in the economy (which among other things is
 influenced by the price of petroleum), political instability, adverse changes
 in the regulatory systems for the banks or the markets in which it lends,
 further real or perceived deterioration in the quality of the Company's
 portfolio, interest or currency exchange rate instability, inability to hire,
 train or maintain employees necessary for new lending activities, failure to
 install necessary systems, policies or controls for new lending activities,
 inability to develop systems necessary to transact business effectively over
 the internet or other remote access channels, additional government
 initiatives to relieve creditors, no improvement or further deterioration in
 the market for repossessed assets (including the Sidek trust assets),
 increased competition from non Mexican companies, failure of self-imposed
 limitations on trading risks to protect the Company from significant losses,
 and inability of the Company to attract or maintain deposits at competitive
 rates.
 
     9. Webcast of Earnings Conference Call
 
     A webcast of the Company's earning conference call will be available on
 http://www.videonewswire.com/BANCA/043001at 10AM, Mexico City Standard Time,
 April 30, 2001.
 
     The Company invites those requiring further information to contact Ernesto
 Rodriguez 011-525-284-5693 or visit our website at www.quadrum.com .
 
                      BANCA QUADRUM, S.A. AND SUBSIDIARIES
               CONSOLIDATED BALANCE SHEET AS OF MARCH 31st, 2001
                     (Stated in Thousands of Mexican Pesos)
                                   UNAUDITED
 
     ASSETS                              First Quarter 2001
 
     Cash and Due from Banks                        131,588
 
     Net Investment in Trust Certificates           212,434
 
     Government Securities at cost
      which approximates market                     351,455
 
     Total Loans                                  2,444,118
     Unearned Income                                (37,027)
     Allowance for Loan and Other Losses           (151,373)
 
     Net Loans                                    2,255,718
 
     Other Receivables                               96,657
 
     Assets under Operating Leases and
      Held for Lease (Net)                           94,856
 
     Real Estate, Furniture and Equipment (Net)      52,308
 
     Other Assets
 
     Deferred Charges, (Net)                        198,949
 
     Other                                           19,179
 
     Repossessed Assets                             170,082
 
                                                  3,583,227
 
 
     LIABILITIES                         First Quarter 2001
 
     Interbank facilities                         1,240,005
 
     Trade Finance/Development Banks                755,997
     Time Deposits (denominated in Pesos)         1,417,855
 
     Time Deposits (denominated in Dollars)           1,754
 
     Retainages and Advances from Customers           4,062
 
     Other Liabilities                              135,928
 
     Total Liabilities                            3,555,601
 
     Minority Interest                                  418
 
     STOCKHOLDERS' EQUITY
 
     Capital Stock                                  573,282
 
     RETAINED EARNINGS
 
     Appropriated                                  (298,838)
 
     Unappropriated                                 (28,921)
 
     Cumulative Restatement Effect                 (202,674)
 
     Total Stockholders' Equity                      42,849
 
     Employees Stock Purchase Plan                  (15,641)
 
                                                  3,583,227
 
 
                      BANCA QUADRUM, S.A. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                              FOR MARCH 31st, 2001
                     (Stated in Thousands of Mexican Pesos)
                                   UNAUDITED
 
                                         First Quarter 2001
 
     FINANCIAL INCOME                               135,816
 
     TRADING MARGIN                                   5,450
 
     VALUATION                                        1,346
 
     FINANCIAL EXPENSES                             127,130
 
     INCOME FROM FINANCIAL OPERATIONS                15,482
 
     PROVISION FOR DOUBTFUL ACCOUNTS                  3,059
 
     INCOME FROM FINANCIAL OPERATIONS AFTER
      PROVISION FOR DOUBTFUL ACCOUNTS                12,423
 
     ADMINISTRATIVE EXPENSES                         32,539
     WORKOUT EXPENSES                                 1,651
 
     DEPRECIATION                                     3,189
 
     DEPOSIT INSURANCE PREMIUMS                       3,185
                                                     40,564
 
     INCOME BEFORE PROVISIONS FOR INCOME TAXES      (28,141)
 
     PROVISION FOR INCOME TAXES                         820
 
     NET INCOME BEFORE MINORITY INTEREST            (28,961)
 
     MINORITY INTEREST                                   40
 
     NET INCOME                                     (28,921)
 
 SOURCE  Banca Quadrum, S.A.