Banco Santander México Reports Third Quarter 2018 Net Income of Ps.5,096 Million

MEXICO CITY, Oct. 31, 2018 /PRNewswire/ -- Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, as succesor of Grupo Financiero Santander México, S.A.B de C.V. (NYSE: BSMX; BMV: BSMX before SANMEX), ("Banco Santander México" or the "Bank"), today announced financial results for the three-month and nine-month periods ending September 30^th, 2018.

Banco Santander México reported net income for 3Q18 of Ps.5,096 million, representing a YoY increase of 25.0% and a QoQ decrease of 1.5%.

Héctor Grisi, Banco Santander México's Executive President and CEO, commented: "Another quarter of strong performance across the bank again demonstrated the effectiveness of our growth strategy, which has allowed us to attract and retain more retail customers, enhance our product and service offering, and improve our infrastructure and processes.

We delivered robust net income growth, up 25% year-on-year, with ROAE rising to 16.7% for the quarter, driven by strong core earnings growth. This was achieved despite higher costs related to our operational transformation and the implementation of our digitalization strategy to become a more customer centric bank.

Loan portfolio growth remained strong, increasing 11% year-on-year, while we maintained healthy asset quality levels.  By leveraging our strong position in commercial banking to attract payroll accounts, we continued to drive growth in high-margin SME, Middle-market and payroll loans. Deposits expanded 9% compared to 3Q17, with individual deposits increasing 16%, reflecting our strategy to attract and retain more retail deposits.

Our loyalty, digitalization and mobile initiatives are improving the customer experience as well as the quality of our retail customer base. We have made more progress on this front, with the number of loyal customers growing nearly 23% year-on-year, while digital and mobile customers increased 32% and 53%, respectively.

Also noteworthy during the quarter was our recent issuance of US$1.3 billion in Tier 2 subordinated preferred capital notes. Simultaneously, we issued a cash tender offer for our outstanding Tier 2 subordinated preferred capital notes due 2024. This was the first cash tender offer of subordinated preferred capital notes in the Mexican market and the first issuance from a Mexican issuer in international markets after the presidential election.

We remain fully focused on executing our various strategic initiatives and I look forward to updating you again on our progress toward becoming a more customer-centric, efficient and profitable bank."

3Q18 EARNINGS CALL DIAL-IN INFORMATION

ABOUT BANCO SANTANDER MÉXICO (NYSE: BSMX; BMV: BSMX)

Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México (Banco Santander México), one of Mexico's leading banking institutions, provides a wide range of financial and related services, including retail and commercial banking, financial advisory and other related investment activities. Banco Santander México offers a multichannel financial services platform focused on mid- to high-income individuals and small- to medium-sized enterprises, while also providing integrated financial services to larger multinational companies in Mexico. As of September 30, 2018, Banco Santander México had total assets of Ps.1,375 billion under Mexican Banking GAAP and more than 16.4 million customers. Headquartered in Mexico City, the Company operates 1,385 branches and offices nationwide and has a total of 18,629 employees.

LEGAL DISCLAIMER

Banco Santander México cautions that this presentation may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements could be found in various places throughout this presentation and include, without limitation, statements regarding our intent, belief, targets or current expectations in connection with: asset growth and sources of funding; growth of our fee-based business; expansion of our distribution network; financing plans; competition; impact of regulation and the interpretation thereof; action to modify or revoke our banking license; exposure to market risks including interest rate risk, foreign exchange risk and equity price risk; exposure to credit risks including credit default risk and settlement risk; projected capital expenditures; capitalization requirements and level of reserves; investment in our information technology platform; liquidity; trends affecting the economy generally; and trends affecting our financial condition and our results of operations. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, many important factors could cause actual results to differ substantially from those anticipated in forward-looking statements. These factors include, among other things: changes in capital markets in general that may affect policies or attitudes towards lending to Mexico or Mexican companies; changes in economic conditions, in Mexico in particular, in the United States or globally; the monetary, foreign exchange and interest rate policies of the Mexican Central Bank (Banco de México); inflation; deflation; unemployment; unanticipated turbulence in interest rates; movements in foreign exchange rates; movements in equity prices or other rates or prices; changes in Mexican and foreign policies, legislation and regulations; changes in requirements to make contributions to, for the receipt of support from programs organized by or requiring deposits to be made or assessments observed or imposed by, the Mexican government; changes in taxes and tax laws; competition, changes in competition and pricing environments; our inability to hedge certain risks economically; economic conditions that affect consumer spending and the ability of customers to comply with obligations; the adequacy of allowance for impairment losses and other losses; increased default by borrowers; our inability to successfully and effectively integrate acquisitions or to evaluate risks arising from asset acquisitions; technological changes; changes in consumer spending and saving habits; increased costs; unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms; changes in, or failure to comply with, banking regulations or their interpretation; and certain other risk factors included in our annual report on Form 20-F. The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the U.S. Securities and Exchange Commission, could adversely affect our business and financial performance. The words "believe," "may," "will," "aim," "estimate," "continue," "anticipate," "intend," "expect," "forecast" and similar words are intended to identify forward-looking statements. You should not place undue reliance on such statements, which speak only as of the date they were made. We undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this presentation because of new information, future events or other factors. In light of the risks and uncertainties described above, the future events and circumstances discussed herein might not occur and are not guarantees of future performance.

Note: The information contained in this presentation is not audited. Nevertheless, the consolidated accounts are prepared on the basis of the accounting principles and regulations prescribed by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in millions of Mexican pesos, unless otherwise indicated. Historical figures are not adjusted by inflation.

SOURCE Banco Santander (México), S.A.

Related Links

http://www.santander.com.mx