Financiera Independencia Reports FY10 Net Income of Ps.451.7 Million and Loan Portfolio Growth of 20.0%, in Line With Latest Company Guidance

News provided by

Financiera Independencia, S.A.B. de C.V., SOFOM, E.N.R.

Feb 24, 2011, 09:12 ET

MEXICO CITY, Feb. 24, 2011 /PRNewswire/ --

Total loan portfolio growth of 20.0% YoY, driven by a 13.3% increase in client base, mainly at Finsol.
Finsol's total loans reached Ps.1,259.7 million in 4Q10, a 29.4% sequential growth from the Ps.973.6 million posted on 3Q10, and 98% since the acquisition.
Non-performing loans to total loans ratio improved to 9.9 in 4Q10 from 12.0% in 4Q09.
Net income down YoY 12.3% for the fiscal year and 66.6% for the quarter.
NIM after provisions including fees was 45.1% in 4Q10 below the 52.7% in 4Q09, still reflecting the effect of the surplus cash remaining from the US$200 million bond issue. This ratio stood at 50.4% in FY10 compared to 48.9% in FY09.
Provisions for loan losses in 4Q10 represented 30.8% of financial margin, compared with 37.6% in 4Q09, and 31.1% in 3Q10.
Efficiency ratio was 90.8% in 4Q10 including Finsol operating costs, compared to 74.2% a year ago.
Equity to total assets of 34.0% compared to 31.3% in 4Q09, and 34.7% in 3Q10.
ROE in 4Q10 declined to 7.2% from 15.1% in 3Q10 and 35.0% in 4Q09, mainly due to the Ps.850 million capital increase in 1Q10 to fund Finsol's acquisition. For FY10 ROE was 18.8%, compared to 31.5% in FY09.

Financiera Independencia, S.A.B. de C.V., SOFOM, E.N.R. (BMV: FINDEP), (Independencia) a leading Mexican microfinance lender of personal loans to lower income segment individuals and working capital loans through group lending microfinance, announced today results for the three and twelve-month periods ended December 31, 2010. Net income for FY10 declined 12.3% to Ps.451.7 million.

Commenting on the results, Noel Gonzalez, Chief Executive Officer, said, "2010 was a landmark year for Financiera Independencia. We expanded our client base and loan portfolio, further adjusted operations and strengthened our market position with the acquisition of Finsol. We are now operating in the individual and group lending methodologies, have a geographical reach that includes rural, suburban and urban areas in Mexico, as well as an international presence in Brazil. We continued to invest for our future while confronting the worst financial crisis in decades. We grew our Finsol portfolio by 98% since its acquisition and agreed to acquire AEF and AFI."

"We also improved the quality of our portfolio, significantly reducing our exposure to potentially higher-risk credits," concluded Mr. Gonzalez.

Financial & Operational Highlights
	4Q10	4Q09	%	12M10	12M09	%
Income Statement Data
Net Interest Income after Provisions*	546.7	467.8	16.9%	2,119.6	1,709.1	24.0%
Net Operating Income*	69.8	177.2	-60.6%	505.1	637.7	-20.8%
Net Income*	53.4	160.1	-66.6%	451.7	515.2	-12.3%
Total Shares Outstanding (million)	715.9	680.0	5.3%	715.9	680.0	5.3%
EPS	0.0746	0.2354	-68.3%	0.6309	0.7577	-16.7%
Profitability & Efficiency
NIM before Provisions Excl. Fees	47.1%	57.6%	-10.4 pp	51.8%	55.0%	-3.2 pp
NIM after Provisions Excl. Fees	32.6%	35.9%	-3.3 pp	35.5%	33.7%	1.8 pp
NIM after Provisions Incl. Fees	45.1%	52.7%	-7.6 pp	50.4%	48.9%	1.5 pp
ROA	2.5%	11.0%	-8.5 pp	6.2%	9.1%	-2.9 pp
ROE	7.2%	35.0%	-27.8 pp	18.8%	31.5%	-12.8 pp
Efficiency Ratio Incl. Provisions	90.8%	74.2%	16.6 pp	83.2%	74.3%	9 pp
Efficiency Ratio Excl. Provisions	68.7%	52.6%	16.1 pp	62.9%	51.8%	11.1 pp
Operating Efficiency	31.8%	35.0%	-3.3 pp	34.3%	32.5%	1.8 pp
Fee Income	25.5%	27.6%	-2.1 pp	24.2%	29.9%	-5.7 pp
Capitalization
Equity to Total Assets	34.0%	31.3%	2.6 pp	34.0%	31.3%	2.6 pp
Credit Quality Ratios
NPL Ratio	9.9%	12.0%	-2.1 pp	9.9%	12.0%	-2.1 pp
Coverage Ratio	65.8%	73.4%	-7.6 pp	65.8%	73.4%	-7.6 pp
Operational Data
Number of Clients	1,399,978	1,236,092	13.3%	1,399,978	1,236,092	13.3%
Number of Offices	371	199	86.4%	371	199	86.4%
Total Loan Portfolio*	5,773.0	4,812.3	20.0%	5,773.0	4,812.3	20.0%
Average Balance (Ps.)	4,123.7	3,893.2	5.9%	4,123.7	3,893.2	5.9%
* Figures in millions of Mexican Pesos.

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All financial figures discussed in this announcement are audited and are prepared in accordance with Mexican Banking Accounting Principles unless stated otherwise. Figures for 2009 and 2010 are expressed in nominal pesos. Tables state figures in millions of pesos, unless otherwise noted.

4Q10 CONSOLIDATED RESULTS

Audited results for 4Q10 include the effect of the consolidation of the acquisition of Financiera Finsol, S.A. de C.V., SOFOM, E.N.R., the second largest group lending microfinance institution in Mexico, and several related companies (collectively, "Finsol") on February 19, 2010.

Financial Margin after Provision for Loan Losses

Financial margin after provision for loan losses for 4Q10 increased 16.9% year-on-year to Ps.546.7 million. This is principally explained by the following:

Interest Income

Interest income for the quarter increased 14.7% year-on-year to Ps.948.9 million, principally as a result of the Ps.117.6 million, or 14.3%, increase in interest income on loans. The total loan portfolio increased 20.0% during the period, driven by 13.3% growth in the number of clients and a 5.9% increase in the average balance per client. The growth in the number of clients and average balance per client reflects the acquisition of Finsol.

The average balance per client increased from Ps.3,893.2 in 4Q09 to Ps.4,123.7 in 4Q10, while the average lending rate(1) of the total loan portfolio decreased to 66.7% 4Q10 from 68.9% 4Q09.

Individual loans to the informal sector decreased 5.6% year-on-year, driven by reduced origination efforts for the CrediConstruye product and the consequent 40.2% decline, and emphasized efforts to market the CrediPopular and CrediMama products which grew 0.4% and 22.3%, respectively, despite tighter credit scoring thresholds during the period.

Group loans represented 21.8% of the total loan portfolio, while the share of individual loans to the informal sector fell from 35.7% in 4Q09 to 28.1% in 4Q10. CrediPopular loans accounted for 22.2% of total loans in the quarter reaching 334,893 clients.

The CrediInmediato loan product, a revolving line of credit that targets the formal sector, represented a lower share of our total portfolio, accounting for 50.1% of total loans in 4Q10 from 64.3% in 4Q09 and 53.6% in 3Q10. As a result of the tighter credit scoring, the number of CrediInmediato clients in 4Q10 declined 3.8% year-on-year, while the total loan portfolio of this product fell 6.5% to Ps.2,893.2 million. The average balance per contract for CrediInmediato was Ps.4,009 in 4Q10, down 2.8% year-on-year, with the draw-down rate dropping from 74.0% to 72.6%. On a sequential basis the number of CrediInmediato clients declined 1.5%, and the loan portfolio fell 3.6%.

Finsol's total loans reached Ps.1,259.7 million in 4Q10, a 29.4% increase from the Ps.973.6 million reported in 3Q10. This increase was driven by growth in both the Mexican and Brazilian operations. During 4Q10, a total of Ps.1,092.2 million in loans were originated at Finsol Mexico and Ps.321.7 million at Finsol Brazil.

Overall, our total loan portfolio grew by 20% year over year. This growth not only increases our total productive assets, but also introduces the group loan segment into our portfolio, effectively diversifying our credit risk and improving our loan asset quality.

Table 1: Financial Margin*
		4Q10	3Q10	4Q09	QoQ %	YoY %	12M10	12M09	%
Interest Income		948.9	897.1	827.0	5.8%	14.7%	3,595.7	3,110.6	15.6%
	Interest on Loans	941.8	882.6	824.2	6.7%	14.3%	3,539.8	3,098.8	14.2%
	Interest from Investment in Securities	7.1	14.5	2.8	-51.2%	153.8%	55.8	11.7	376.1%
Interest Expense		159.0	121.9	77.5	30.5%	105.2%	504.6	327.3	54.2%
Financial Margin		789.8	775.2	749.5	1.9%	5.4%	3,091.1	2,783.2	11.1%
Provision for Loan Losses		243.1	241.3	281.7	0.7%	-13.7%	971.5	1,074.2	-9.6%
Financial Margin After Provision for Loan Losses		546.7	533.8	467.8	2.4%	16.9%	2,119.6	1,709.1	24.0%

* Figures in millions of Mexican Pesos

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(1) Average lending rate: interest income / average balance of the total loan portfolio.

Table 2: Loan Portfolio, Number of Clients & Average Balance
	4Q10	3Q10	4Q09	QoQ %	YoY %
Loan Portfolio (million Ps.)	5,773.0	5,603.3	4,812.3	3.0%	20.0%
Number of Clients	1,399,978	1,363,913	1,236,092	2.6%	13.3%
Average Balance (Ps.)	4,123.7	4,108.3	3,893.2	0.4%	5.9%

Table 3: Number of Clients by Product Type
	4Q10	% of Total	3Q10	% of Total	4Q09	% of Total	QoQ % Change	YoY % Change
Formal Sector Loans	721,628	51.5%	732,578	53.7%	750,374	60.7%	-1.5%	-3.8%
- CrediInmediato	721,628	51.5%	732,578	53.7%	750,374	60.7%	-1.5%	-3.8%
Informal Sector Loans	436,148	31.2%	437,386	32.1%	485,718	39.3%	-0.3%	-10.2%
- CrediPopular	334,893	23.9%	332,264	24.4%	347,383	28.1%	0.8%	-3.6%
- CrediMama	49,617	3.5%	47,092	3.5%	49,876	4.0%	5.4%	-0.5%
- CrediConstruye	51,638	3.7%	58,030	4.3%	88,459	7.2%	-11.0%	-41.6%
Finsol Loans	242,202	17.3%	193,949	14.2%	0	0.0%	24.9%	n/a
- Finsol Mexico	201,285	14.4%	159,434	11.7%	0	0.0%	26.2%	n/a
- Finsol Brasil	40,917	2.9%	34,515	2.5%	0	0.0%	18.5%	n/a
Total Number of Loans	1,399,978	100.0%	1,363,913	100.0%	1,236,092	100.0%	2.6%	13.3%

Table 4: Total Loan Portfolio by Product Type*
	4Q10	% of Total	3Q10	% of Total	4Q09	% of Total	QoQ % Change	YoY % Change
Formal Sector Loan Portfolio	2,893.2	50.1%	3,001.6	53.6%	3,095.5	64.3%	-3.6%	-6.5%
- CrediInmediato	2,893.2	50.1%	3,001.6	53.6%	3,095.5	64.3%	-3.6%	-6.5%
Informal Sector Loan Portfolio	1,620.1	28.1%	1,628.1	29.1%	1,716.8	35.7%	-0.5%	-5.6%
- CrediPopular	1,282.6	22.2%	1,269.6	22.7%	1,277.1	26.5%	1.0%	0.4%
- CrediMama	145.7	2.5%	137.8	2.5%	119.1	2.5%	5.7%	22.3%
- CrediConstruye	191.8	3.3%	220.7	3.9%	320.6	6.7%	-13.1%	-40.2%
Finsol Loan Portfolio	1,259.7	21.8%	973.6	17.4%	0.0	0.0%	29.4%	n/a
- Finsol Mexico	860.0	14.9%	675.4	12.1%	0.0	0.0%	27.3%	n/a
- Finsol Brasil	399.7	6.9%	298.2	5.3%	0.0	0.0%	34.0%	n/a
Total Loan Portfolio	5,773.0	100.0%	5,603.3	100.0%	4,812.3	100.0%	3.0%	20.0%

* Figures in millions of Mexican Pesos.

Interest Expense

Interest expense during 4Q10 increased by Ps.81.5 million, or 105.2%, to Ps.159.0 million reflecting the US$200 million 144A / Reg S senior guaranteed notes issued in March 2010. Debt increased by Ps.1,263.4 million or 32.7% year-on-year. A portion of the proceeds of this issuance was used during the quarter to reduce the outstanding debt under the Company's revolving credit lines.

The average interest rate paid(2) increased to 11.65% in 4Q10 from the 7.85% reported in 4Q09, as a result of the bond issuance mentioned above. The average TIIE in 4Q10 remained unchanged YoY at 4.9%.

Provision for Loan Losses

Provisions for loan losses declined year-on-year by 13.7%, or Ps.38.6 million, to Ps.243.1 million in 4Q10, reflecting an improving trend in the default probabilities of the loan portfolio. Write-offs in 4Q10 decreased 6.1% year-over-year, or by Ps.17.3 million, to Ps.266.3 million in 4Q10. Excluding Finsol, write offs decreased to Ps.251.0 million in 4Q10 from Ps.283.7 million in 4Q09. Total non-performing loans reached Ps.570.2 million, down 1.0% from Ps.576.1 million on December 31, 2009. Excluding Finsol, total non-performing loans decreased Ps.34.5 million, or 6.0% compared to 4Q09.

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(2) average interest rate paid = interest expense / daily average balance of interest bearing liabilities for the period.

Market Related Income

As a result of the issuance of the US denominated bond and in line with the Company's policy to eliminate its currency exposure, the Risk Management Committee executed in 3Q10 a full cross currency swap. This resulted in a Ps.4.2 million non-cash loss for 4Q10. The mark to market valuation of the bond and the full currency swap negatively impacted stockholders' equity by Ps.64.7 million during the quarter. This impact will be naturally eliminated as the contract progresses and expires.

Net Operating Revenue

Net operating revenue increased year-on-year by Ps.69.7 million, or 10.2%, to Ps.755.8 million in 4Q10 due to the reasons stated above and the increase in other income (expense) of operations. During the quarter, the Company reported other income from operations of Ps. 12.5 million, including Ps.8.1 million from loans sold, and Ps.4.4 million from restructured loans. As a base policy restructured loans are considered past-due and are accordingly reserved. On a sequential comparison, net operating revenue increased 7.5% from Ps.703.0 million in 3Q10.

Net Operating Income

Net operating income for 4Q10 decreased year-on-year by Ps.107.4 million, or 60.6%, to Ps.69.8 million. On a sequential comparison net operating income declined 35.7% from Ps.108.6 million in 3Q10. The main driver for this decline was added interest expense derived from the US$200 million bond issue and higher operating expenses derived from the Finsol acquisition.

Total non-interest expense increased by Ps.177.1 million, or 34.8%, to Ps.686.0 million in 4Q10, mainly as a result of the consolidation of Finsol into the Company's results. Excluding Finsol total non-interest expense rose by Ps.53.4 million or 10.5% year-on-year, reflecting Ps.16 million from higher severance payments, Ps.6 million related to the bank conversion project, and Ps.7 million from IT expenses. For 4Q10 Finsol's non-interest expense was Ps.123.6 million, a 3.8% sequential increase.

During the last twelve months, the Company added a total of 172 branches to its network, of which 164 resulted from the Finsol acquisition, bringing the total network to 371 units at the end of the quarter.

Table 5: Net Operating Income*				Change
	4Q10	3Q10	4Q09	QoQ %	YoY %	12M10	12M09	% Change
Financial Margin	789.8	775.2	749.5	1.9%	5.4%	3,091.1	2,783.2	11.1%
Provision for Loan Losses	243.1	241.3	281.7	0.7%	-13.7%	971.5	1,074.2	-9.6%
Financial Margin After Provision for Loan Losses	546.7	533.8	467.8	2.4%	16.9%	2,119.6	1,709.1	24.0%
Non-Interest Income, net	192.4	187.0	189.1	2.9%	1.7%	728.9	739.8	-1.5%
- Commissions and Fees Collected	204.7	199.8	192.7	2.4%	6.2%	775.8	752.6	3.1%
- Commissions and Fees Paid	12.3	12.8	3.6	-3.8%	242.0%	46.8	12.7	267.9%
Market Related Income	4.2	-33.1	0.0	-112.8%	n/a	95.5	0.0	n/a
Other income (expense) of the operation	12.5	15.2	29.2	-18.0%	-57.2%	67.6	29.2	131.2%
Net Operating Revenue	755.8	703.0	686.1	7.5%	10.2%	3,011.6	2,478.1	21.5%
Non-Interest Expense	686.0	594.4	508.9	15.4%	34.8%	2,506.5	1,840.5	36.2%
- Other Administrative & Operational Expenses	227.1	196.1	163.3	15.8%	39.1%	798.3	532.5	49.9%
- Salaries & Employee Benefits	458.9	398.3	345.7	15.2%	32.8%	1,708.2	1,308.0	30.6%
Net Operating Income	69.8	108.6	177.2	-35.7%	-60.6%	505.1	637.7	-20.8%

Operational Data
Number of Offices	371	370	199	0.3%	86.4%	371	199	86.4%
- Financiera Independencia	207	207	199	0.0%	4.0%	207	199	4.0%
- Finsol	164	163	0	0.6%	n/a	164	0	n/a
Total Labor Force	9,763	11,153	9,643	-12.5%	1.2%	9,763	9,643	1.2%
- Financiera Independencia	8,266	9,686	9,515	-14.7%	-13.1%	8,266	9,515	-13.1%
- Finsol	1,497	1,467	0	2.0%	n/a	1,497	0	n/a
- Independent Sales Agents	0	0	128	n/a	-100.0%	0	128	-100.0%

* Financial data in millions of Mexican Pesos.

Net Income

As a result of the factors discussed above, and after other income and expenses, and income tax, net income for 4Q10 declined year-on-year by Ps.106.7 million, or 66.6%, to Ps.53.4 million.

Earnings per share (EPS) for the quarter were Ps.0.0746 compared with Ps.0.2354 for the same period last year.

Finsol Contribution

During 4Q10 Finsol generated financial margin after provisions of Ps.136.4 million, or 24.9% of consolidated results, and net operating revenue of Ps.131.9 million, or 17.5% of consolidated results. Additionally, Finsol contributed with Ps.123.6 million of non-Interest expense, or 18.0% of consolidated results. For 4Q10, Finsol's average monthly loan origination increased by 27.6% compared to 3Q10.

FINANCIAL POSITION

Total Loan Portfolio

The total loan portfolio rose year-on-year by 20.0% to Ps.5,773.0 million, reflecting a 13.3% increase in the number of clients during the period, and a 5.9% increase in the average outstanding balance. At year end, Independencia had a total of 1,399,978 clients, of which 242,202 were Finsol clients.

The total loan portfolio represented 66.5% of Independencia's total assets as of December 31, 2010, compared with 80.9% as of December 31, 2009. Cash and Investments represented 9.9% of total assets for 4Q10 compared with 8.4% in 4Q09.

Non-Performing Loan Portfolio

Total non-performing loans reached Ps.570.2 million, down 2.7% on a sequential basis from Ps.585.8 million and down 1.0% year-over-year. The NPL ratio declined to 9.9% in 4Q10, from 12.0% in 4Q09 and 10.5% in 3Q10. Excluding Finsol, total non-performing loans reached Ps.541.6 million, down 6.0% year-on-year.

The NPL ratio for the CrediInmediato product in 4Q10 was 12.4%, compared with 11.6% in 4Q09. The NPL ratio for the individual informal segment decreased to 11.3% in 4Q10, from 12.7% in 4Q10. The NPL ratio in 4Q10 for the group lending segment (Finsol) was 2.7% in Mexico and 1.4% in Brazil, compared to 2.4% and 5.4% respectively, in 1Q10.

The coverage ratio for 4Q10 was 65.8%, compared with 68.0% in 3Q10 and 73.4% in 4Q09. The decrease in the coverage ratio reflects a lower probability of default in our loan portfolio.

Liabilities

As of December 31, 2010 total liabilities were Ps.5,732.6 million, a 40.3% increase from Ps.4,087.1 million reported on December 31, 2009. Of these, Ps.2,614.0 million reflect the US$200 million bond issue. On a sequential comparison, total liabilities increased 2.1% from Ps.5,612.4 million in September 30, 2010.

At the end of 4Q10, Independencia's debt consisted of Ps.2,614.0 million (US$200 million) of senior guaranteed notes as described above (due March 2015), Ps.787.1 million in medium-term notes "Certificados Bursatiles" (due June 2011) as well as Ps.1,876.8 million of bank and other entities loans. The Company's total available lines of credit amounted to Ps.5,414 million at the end of 4Q10.

Of the total lines of credit, Ps.132.0 million are due in January 2011, Ps.162 million in February 2011, Ps.700 million in March 2011, Ps.25.0 million in June 2011, Ps.15.0 million in July 2011, Ps.1,250 million in December 2012, Ps.1,850 million in December 2013, and the remaining Ps.1,280 million have an evergreen feature. These amounts include the available lines of credit of Finsol.

In June, the Company purchased an interest rate cap to hedge for a period of twelve months starting October 8, 2010 for any increase in TIIE beyond 7.0% for a notional amount of Ps.5,500 million.

Stockholders' Equity

As of December 31, 2010 stockholder's equity was Ps.2,946.6 million, a 58.1% increase from Ps.1,863.3 million in the same year-ago period. This increase principally reflects the 85,000,000 share capital increase completed on February 5, 2010 and the net income generated during the period.

As a result of the revaluation of foreign currency denominated debt and the underlying derivatives position to hedge foreign exchange risk, there is a Ps.64.7 million impact recorded as Financial Instruments - Derivatives. This impact will be naturally eliminated as the contract progresses and expires. The breakdown of this impact is as follows: negative Ps.233.0 million from marking to market the Cross Currency Swap, Ps.144.1 million from the revalorization of the bond, Ps.27.7 million in differed taxes, and negative Ps.3.4 million from hedge-ineffectiveness.

Finsol's Contribution

Finsol's Ps.1,259.7 million loan portfolio accounted for 21.8% of the Company's consolidated loan portfolio. Finsol's total non-performing loans amounted to Ps.28.6 million, equivalent to an NPL ratio of 2.3%. As of December 31, 2010 Finsol reported Ps.370.2 million in bank and other entities loans.

PROFITABILITY AND EFFICIENCY RATIOS

ROAE/ROAA

ROAE for 4Q10 was 7.2% compared with 35.0% in 4Q09 and 15.1% in 3Q10. ROAE for 4Q10 reflects the Ps.850 million capital increase described above. For fiscal year 2010 ROE was 18.8%, compared to 31.5% in FY2010.

ROAA for 4Q10 was 2.5% compared with 11.0% in 4Q09 and 5.2% in 3Q10.

Efficiency Ratio & Operating Efficiency

From 4Q09 to 4Q10 Independencia increased the size of its loan portfolio by 20.0% and the number of clients by 13.3%. The Company also added a net of 172 offices and increased its total labor force by 1.2% to 9,763 people.

During 4Q10 the Company's efficiency ratio (including provisions and Finsol's operating costs) was 90.8%, compared with 74.2% in 4Q09 and 84.5% in 3Q10. The year-on-year increase is principally the result of the Finsol acquisition, as explained previously. Operating efficiency was 31.8% in 4Q10, down 3.3 pp on a year-on-year basis, and 4.5 pp quarter-on-quarter. Excluding Finsol the operating efficiency ratio in 4Q10 was 34.5%.

DISTRIBUTION NETWORK

At the end of the quarter, Independencia operated 371 offices in Mexico and Brazil. This includes 352 offices in Mexico of which 207 operated under the Financiera Independencia brand name and 145 offices under the Finsol brand name. The Company also operated 19 branches in Brazil under the Finsol Brazil brand name.

The Company's total loan portfolio is well diversified and no federal entity represents more than 11.3% of the total loan portfolio. The three federal entities with the highest loan portfolio concentration are Veracruz, Tamaulipas and Jalisco, with an 11.3%, 8.7%, and 6.8% share of the total portfolio, respectively.

KEY EVENTS

Financiera Independencia to Acquire Apoyo Economico Familiar and Apoyo Financiero

On December 22, 2010 Financiera Independencia announced that it had signed a purchase agreement to acquire in all cash transactions all of the outstanding shares of Apoyo Economico Familiar S.A. de C.V., SOFOM, E.N.R. ("AEF"), one of the largest unsecured personal lending institutions in Mexico, and a controlling 77% ownership stake in Apoyo Financiero Inc. ("AFI"), a microfinance company primarily serving the unbanked Hispanic community in San Francisco, California. The combined total consideration for the transactions is Ps. 1,180 million. Upon completion of these transactions, Independencia would increase its loan portfolio by approximately 15% and its client base by approximately 8%. The transactions have been approved by the Board of Directors of Independencia and are expected to close during 1Q11. The transactions will be financed with the Company's cash reserves and available lines of credit.

4Q10 EARNINGS CONFERENCE CALL

Day:	Friday, February 25, 2011

Time:	11:00 AM US ET; 10:00 AM Mexico City time

Dial-in number:	866-393-9621 (US & Canada)
	706-758-4196 (International & Mexico)

Access Code:	43052625


Web cast:	A live web cast of the conference call and replay will be available at http://www.findep.mx.

Replay:	Starting at 12:00 pm ET on February 25 and ending at 11:59 pm ET on March 4, 2011. The replay is accessible by dialing 800-642-1687 (U.S./Canada) or 706-645-9291 (international) and entering passcode 43052625.

About Financiera Independencia:

Financiera Independencia, S.A.B. de C.V., SOFOM, E.N.R. (Independencia), is a Mexican microfinance lender of personal loans to individuals and working capital loans through group lending microfinance. Independencia provides microcredit loans on an unsecured basis to individuals in the low-income segments in Mexico in urban areas of both the formal and informal economy. As of December 31, 2010, Independencia had a total outstanding loan balance of Ps.5,773.0 million, operated 371 offices in Mexico and Brazil and had a total labor force of 9,763 people. The Company listed on the Mexican Stock Exchange on November 1, 2007, where it trades under the symbol "FINDEP". On November 30, 2009 Independencia launched a sponsored Level I American Depositary Receipt (ADR) program in the United States. Each ADR represents 15 shares of Independencia common stock and trades over-the-counter (OTC). More information can be found at www.findep.mx

Some of the statements contained in this press release discuss future expectations or state other forward-looking information. Those statements are subject to risks identified in this press release and in Financiera Independencia's filings with the Mexican Stock Exchange. Actual developments could differ significantly from those contemplated in these forward-looking statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Our forward-looking statements speak only as of the date they are made and, except as may be required by applicable law, we do not have an obligation to update or revise them, whether as a result of new information, future or otherwise.

# # # TABLES TO FOLLOW # # #

FINANCIERA INDEPENDENCIA S.A.B. DE C.V., SOFOM, E.N.R.

Consolidated Income Statement

For the Three and Twelve-Months Periods Ended December 31, 2010 and 2009

(Millions of Mexican Pesos)

4Q10 vs 4Q09

4Q10

3Q10

2Q10

1Q10

4Q09

3Q09

2Q09

1Q09

Absolute

12M10

12M09

Absolute

Interest Income

948.9

897.1

901.4

848.3

827.0

782.9

756.0

744.7

121.8

14.7%

3,595.7

3,110.6

485.1

15.6%

Interest Expense

159.0

121.9

142.8

80.8

77.5

73.5

81.3

95.0

81.5

105.2%

504.6

327.3

177.3

54.2%

Financial Margin

789.8

775.2

758.6

767.5

749.5

709.3

674.7

649.7

40.3

5.4%

3,091.1

2,783.2

307.8

11.1%

Provision for Loan Losses

243.1

241.3

246.3

240.7

281.7

320.3

270.1

202.1

(38.6)

(13.7%)

971.5

1,074.2

(102.7)

(9.6%)

Financial Margin After Provision for Loan Losses

546.7

533.8

512.3

526.8

467.8

389.0

404.7

447.6

78.9

16.9%

2,119.6

1,709.1

410.5

24.0%

Commissions and Fees Collected

204.7

199.8

188.5

182.7

192.7

196.3

195.0

168.6

12.0

6.2%

775.8

752.6

23.2

3.1%

Commissions and Fees Paid

12.3

12.8

12.3

9.4

3.6

2.9

2.8

3.4

8.7

242.0%

46.8

12.7

34.1

267.9%

Market Related Income

4.2

(33.1)

118.9

5.4

4.2

n/a

95.5

95.5

n/a

Other income (expense) of the operation

12.5

15.2

14.2

25.6

29.2

(16.7)

(57.2%)

67.6

29.2

38.3

131.2%

Net Operating Revenue

755.8

703.0

821.6

731.2

686.1

582.3

596.9

612.8

69.7

10.2%

3,011.6

2,478.1

533.4

21.5%

Non-Interest Expense

686.0

594.4

661.0

565.1

508.9

452.7

417.3

461.6

177.1

34.8%

2,506.5

1,840.5

666.0

36.2%

Net Operating Income

69.8

108.6

160.6

166.1

177.2

129.7

179.5

151.3

(107.4)

(60.6%)

505.1

637.7

(132.6)

(20.8%)

Other Income (expense) - Net

23.9

10.3

12.8

17.4

(7.6)

10.2

7.5

8.2

31.5

(412.9%)

64.4

18.3

46.1

252.4%

Total Income Before Income Tax and Employees' Statutory Profit Sharing

93.7

118.9

173.4

183.5

169.6

139.8

187.1

159.5

(75.9)

(44.8%)

569.5

655.9

(86.5)

(13.2%)

Income Tax and Employees' Statutory Profit Sharing

Current

19.9

21.3

(19.2)

79.5

138.2

60.5

112.5

81.5

(118.2)

(85.6%)

101.6

392.8

(291.2)

(74.1%)

Deferred

20.3

(15.3)

49.2

(37.9)

(128.7)

(21.8)

(62.3)

(39.3)

149.0

(115.8%)

16.2

(252.1)

268.3

(106.4%)

Total Income Before Minority Interest

53.4

112.9

143.5

141.9

160.1

101.1

136.8

117.2

(106.7)

(66.6%)

451.7

515.2

(63.6)

(12.3%)

Minority Interest

n/a

Net Income

53.4

112.9

143.5

141.9

160.1

101.1

136.8

117.2

(106.7)

(66.6%)

451.7

515.2

(63.6)

(12.3%)

Weighted Average Number of Shares

715.9

715.9

715.0

680.0

630.0

35.9

5.3%

715.9

680.0

35.9

5.3%

EPS

0.0746

0.1577

0.2004

0.1985

0.2354

0.1605

0.2172

0.1861

(0.1608)

(68.3%)

0.6309

0.7577

(0.1268)

(16.7%)

FINANCIERA INDEPENDENCIA S.A.B. DE C.V., SOFOM, E.N.R.
Consolidated Balance Sheet
As of December 31, 2010 and 2009
(Millions of Mexican Pesos)
									4Q10 vs 4Q09
	4Q10	3Q10	2Q10	1Q10	4Q09	3Q09	2Q09	1Q09	Absolute	%

ASSETS

Cash	153.7	153.6	136.8	186.0	129.3	106.5	120.0	107.4	24.4	18.9%
Investments in Securities	702.0	1,026.1	1,387.9	2,913.1	369.6	206.3	279.9	200.5	332.4	89.9%

Cash and Cash Equivalents	855.7	1,179.8	1,524.7	3,099.2	498.9	312.8	399.9	307.9	356.8	71.5%

Performing Loans	5,202.8	5,017.5	4,781.2	4,824.7	4,236.2	4,193.9	4,027.8	3,957.4	966.7	22.8%
Non-Performing Loans	570.2	585.8	605.6	578.8	576.1	599.2	588.2	486.0	(5.9)	(1.0%)

Total Loan Portfolio	5,773.0	5,603.3	5,386.8	5,403.6	4,812.3	4,793.1	4,615.9	4,443.4	960.8	20.0%

Allowances for Loan Losses	(375.5)	(398.1)	(417.4)	(434.6)	(423.0)	(424.9)	(386.4)	(326.0)	47.5	(11.2%)

Total Loan Portfolio - Net	5,397.6	5,205.2	4,969.4	4,969.0	4,389.3	4,368.2	4,229.5	4,117.4	1,008.3	23.0%

Other Accounts Receivable - Net	410.6	247.4	228.7	195.7	111.6	181.5	330.0	288.8	299.0	268.0%
Property, Plant & Equipment - Net	403.3	378.6	373.6	384.1	303.3	297.2	288.6	282.2	100.0	33.0%
Deferred Income Tax	708.4	683.4	671.9	719.9	572.6	445.6	424.8	360.6	135.7	23.7%
Derivative Financial Instruments	-	-	175.2	-	-	-	-	-	-	n/a
Other Assets	903.7	906.0	861.8	848.9	74.8	69.5	66.7	66.2	828.9	1108.4%

Total Assets	8,679.2	8,600.3	8,805.5	10,216.7	5,950.5	5,674.8	5,739.5	5,423.2	2,728.8	45.9%

LIABILITIES

Commercial Paper	787.1	785.5	784.7	784.0	787.0	785.8	784.6	789.3	0.1	0.0%
Bank and Other Entities Loans	4,342.5	4,385.1	4,729.2	6,224.0	3,079.3	2,893.7	2,857.1	2,832.7	1,263.2	41.0%
Derivative Financial Instruments	232.4	166.6	-	84.6	-	-	-	-	232.4	n/a
Other Accounts Payable	370.7	275.2	285.5	340.5	220.9	205.2	395.5	256.5	149.8	67.8%

Total Liabilities	5,732.6	5,612.4	5,799.4	7,433.0	4,087.1	3,884.7	4,037.2	3,878.5	1,645.5	40.3%

STOCKHOLDERS' EQUITY

Capital Stock	157.2	157.2	157.2	157.1	148.6	148.6	148.6	148.6	8.6	5.8%
Additional Paid-In Capital	1,550.8	1,549.2	1,545.4	1,525.0	726.4	727.9	727.9	733.1	824.3	113.5%
Capital Reserves	14.3	14.3	14.3	12.6	12.6	12.6	12.6	13.6	1.7	13.5%
Retained Earnings	837.3	941.9	1,003.7	992.2	460.5	545.8	559.2	532.1	376.8	81.8%
Net Income for the Year	451.7	398.3	285.4	141.9	515.2	355.2	254.0	117.2	(63.6)	(12.3%)
Financial Instruments - Derivatives	(64.7)	(73.0)	-	(45.2)	0.0	-	-	-	(64.7)	n/a
Minority Interest	-	-	-	-	-	-	-	-	-	n/a

Total Stockholders' Equity	2,946.6	2,987.9	3,006.0	2,783.6	1,863.3	1,790.1	1,702.3	1,544.6	1,083.3	58.1%

Total Liabilities and Stockholders' Equity	8,679.2	8,600.3	8,805.5	10,216.7	5,950.5	5,674.8	5,739.5	5,423.2	2,728.8	45.9%

Finsol Mexico
Income Statement
For the Three and Twelve-Months Periods Ended December 31, 2010
(Millions of Mexican Pesos)
					4Q10 vs 3Q10
	4Q10	3Q10	2Q10	From Feb. 20, '10 to Mar. 31, '10	Absolute	%	12M10

Interest Income	163.1	134.3	119.1	49.5	28.8	21.5%	466.0
Interest Expense	31.9	26.0	21.2	9.0	5.9	22.5%	88.1

Financial Margin	131.3	108.3	97.8	40.5	23.0	21.2%	377.9

Provision for Loan Losses	34.3	20.1	11.0	3.9	14.2	71.0%	69.3

Financial Margin After Provision for Loan Losses	96.9	88.2	86.8	36.6	8.7	9.9%	308.5

Commissions and Fees Collected	0.0	0.0	0.0	0.0	0.0	12.0%	0.1
Commissions and Fees Paid	4.1	4.0	3.5	2.1	0.1	1.7%	13.7
Market Related Income	(0.4)	0.2	0.7	0.9	(0.6)	(296.6%)	1.5

Net Operating Revenue	92.4	84.4	84.1	35.4	8.1	9.5%	296.3

Non-Interest Expense	90.5	87.4	125.2	49.1	3.2	3.6%	352.2

Net Operating Income	1.9	(3.0)	(41.2)	(13.6)	4.9	(164.7%)	(55.8)

Other Income (expense) - Net	4.6	7.0	2.7	7.3	(2.3)	(33.5%)	21.5

Total Income Before Income Tax and Employees' Statutory Profit Sharing	6.6	4.0	(38.5)	(6.4)	2.6	64.5%	(34.3)

Income Tax and Employees' Statutory Profit Sharing
Current	10.8	-	(27.7)	-	10.8	n/a	(16.9)
Deferred	(5.3)	(14.3)	(7.6)	(1.2)	9.1	(63.4%)	(28.3)

Total Income Before Minority Interest	1.0	18.3	(3.2)	(5.2)	(17.3)	(94.6%)	10.9

Net Income	1.0	18.3	(3.2)	(5.2)	(17.3)	(94.6%)	10.9

Finsol Mexico
Balance Sheet
As of December 31, 2010
(Millions of Mexican Pesos)
					4Q10 vs 3Q10
	4Q10	3Q10	2Q10	1Q10	Absolute	%

ASSETS

Cash and Cash Equivalents	193.1	167.4	116.4	114.7	25.7	15.3%

Performing Loans	837.0	661.9	546.5	511.7	175.1	26.5%
Non-Performing Loans	23.0	13.4	10.2	12.4	9.6	71.1%

Total Loan Portfolio	860.0	675.4	556.7	524.1	184.6	27.3%

Allowances for Loan Losses	(52.3)	(30.7)	(20.1)	(20.8)	(21.6)	70.3%

Total Loan Portfolio - Net	807.8	644.7	536.6	503.3	163.1	25.3%

Assets, Accounts Receivable & Other Assets	884.6	781.7	632.7	619.8	102.9	13.2%

Total Assets	1,885.5	1,593.8	1,285.7	1,237.8	291.7	18.3%

LIABILITIES

Bank and Other Entities Loans	370.2	499.4	546.1	817.2	(129.2)	(25.9%)
Other Accounts Payable	1,238.9	819.0	467.5	145.3	419.9	51.3%

Total Liabilities	1,609.1	1,318.4	1,013.6	962.5	290.7	22.0%

Total Stockholders' Equity	276.4	275.4	272.1	275.3	1.0	0.4%

Total Liabilities and Stockholders' Equity	1,885.5	1,593.8	1,285.7	1,237.8	291.7	18.3%

Finsol Brasil
Income Statement
For the Three and Twelve-Months Periods Ended December 31, 2010
(Millions of Mexican Pesos)
					4Q10 vs 3Q10
	4Q10	3Q10	2Q10	From Feb. 20, '10 to Mar. 31, '10	Absolute	%	12M10

Interest Income	51.5	41.4	33.9	19.9	10.1	24.4%	146.6
Interest Expense	10.7	10.4	11.7	6.6	0.3	2.9%	39.4

Financial Margin	40.8	31.0	22.2	13.3	9.8	31.6%	107.2

Provision for Loan Losses	1.3	0.1	1.2	1.1	1.2	1345.7%	3.7

Financial Margin After Provision for Loan Losses	39.4	30.9	21.0	12.2	8.6	27.7%	103.5

Commissions and Fees Paid	0.8	0.7	0.6	0.4	0.1	11.7%	2.5
Market Related Income	0.9	6.9	7.9	(0.6)	(6.1)	(87.4%)	15.1

Net Operating Revenue	39.5	37.1	28.3	11.2	2.4	6.5%	116.1

Non-Interest Expense	33.1	31.8	26.0	13.8	1.3	4.2%	104.7

Net Operating Income	6.3	5.3	2.4	(2.6)	1.1	20.5%	11.4

Other Income (expense) - Net	0.4	0.9	0.9	5.0	(0.5)	(53.6%)	7.2

Total Income Before Income Tax and Employees' Statutory Profit Sharing	6.7	6.1	3.3	2.4	0.6	10.1%	18.5

Net Income	6.7	6.1	3.3	2.4	0.6	10.1%	18.5

Finsol Brasil
Balance Sheet
As of December 31, 2010
(Millions of Mexican Pesos)
					4Q10 vs 3Q10
	4Q10	3Q10	2Q10	1Q10	Absolute	%

ASSETS

Cash and Cash Equivalents	32.0	30.3	19.0	34.9	1.7	5.6%

Performing Loans	394.1	291.9	218.2	191.6	102.2	35.0%
Non-Performing Loans	5.6	6.3	8.5	11.0	(0.7)	(10.5%)

Total Loan Portfolio	399.7	298.2	226.7	202.6	101.5	34.0%

Allowances for Loan Losses	(5.6)	(6.3)	(10.6)	(13.6)	0.7	(10.5%)

Total Loan Portfolio - Net	394.1	291.9	216.1	189.0	102.2	35.0%

Assets, Accounts Receivable & Other Assets	11.2	11.3	10.0	9.9	(0.2)	(1.5%)

Total Assets	437.2	333.5	245.1	233.8	103.7	31.1%

LIABILITIES

Bank and Other Entities Loans	-	-	53.1	49.6	-	n/a
Other Accounts Payable	575.1	478.1	343.5	332.2	97.0	20.3%

Total Liabilities	575.1	478.1	396.5	381.8	97.0	20.3%

Total Stockholders' Equity	(137.9)	(144.6)	(151.5)	(148.0)	6.7	(4.7%)

Total Liabilities and Stockholders' Equity	437.2	333.5	245.1	233.8	103.7	31.1%

FINANCIERA INDEPENDENCIA S.A.B. DE C.V., SOFOM, E.N.R.
Key Ratios & Operating Data
For the Three and Twelve-Months Periods Ended December 31, 2010 and 2009
(Millions of Mexican Pesos)

	4Q10	3Q10	4Q09	QoQ %	YoY %	12M10	12M09	%
Key Ratios
Profitability & Efficiency
NIM after Provisions Excl. Fees (1)	32.6%	31.2%	35.9%	1.4 pp	-3.3 pp	35.5%	33.7%	1.8 pp
NIM after Provisions Incl. Fees (2)	45.1%	41.1%	52.7%	4 pp	-7.6 pp	50.4%	48.9%	1.5 pp
Provisions / Financial Margin	30.8%	31.1%	37.6%	-0.4 pp	-6.8 pp	31.4%	38.6%	-7.2 pp
ROAA (3)	2.5%	5.2%	11.0%	-2.7 pp	-8.5 pp	6.2%	9.1%	-2.9 pp
ROAE (4)	7.2%	15.1%	35.0%	-7.9 pp	-27.8 pp	18.8%	31.5%	-12.8 pp
Efficiency Ratio Incl. Provisions (5)	90.8%	84.5%	74.2%	6.2 pp	16.6 pp	83.2%	74.3%	9 pp
Efficiency Ratio Excl. Provisions (6)	68.7%	62.9%	52.6%	5.7 pp	16.1 pp	62.9%	51.8%	11.1 pp
Operating Efficiency (7)	31.8%	27.3%	35.0%	4.4 pp	-3.3 pp	34.3%	32.5%	1.8 pp
Fee Income (8)	25.5%	26.6%	27.6%	-1.2 pp	-2.1 pp	24.2%	29.9%	-5.7 pp
Capitalization
Equity to Total Assets	34.0%	34.7%	31.3%	-0.8 pp	2.6 pp	34.0%	31.3%	2.6 pp
Credit Quality Ratios
NPL Ratio (9)	9.9%	10.5%	12.0%	-0.6 pp	-2.1 pp	9.9%	12.0%	-2.1 pp
Coverage Ratio (10)	65.8%	68.0%	73.4%	-2.1 pp	-7.6 pp	65.8%	73.4%	-7.6 pp
Operating Data
Number of Clients	1,399,978	1,363,913	1,236,092	2.6%	13.3%	1,399,978	1,236,092	13.3%
- Formal Sector	721,628	732,578	750,374	-1.5%	-3.8%	721,628	750,374	-3.8%
- Informal Sector	436,148	437,386	485,718	-0.3%	-10.2%	436,148	485,718	-10.2%
- Finsol México	201,285	159,434	0	26.2%	n/a	201,285	0	n/a
- Finsol Brasil	40,917	34,515	0	18.5%	n/a	40,917	0	n/a
Number of Offices	371	370	199	0.3%	86.4%	371	199	86.4%
Total Labor Force	9,763	11,153	9,643	-12.5%	1.2%	9,763	9,643	1.2%
- Full Time Personnel	9,763	11,153	9,515	-12.5%	2.6%	9,763	9,515	2.6%
- Independent Sales Agents	0	0	128	n/a	-100.0%	0	128	-100.0%
(1) Net Interest Margin after Provisions (excluding Fees): Net Interest Margin after Provision for Loan Losses / Average Interest-Earning Assets
(2) Net Interest Margin after Provisions (including Fees): Net Interest Margin after Provision for Loan Losses + Fees Collected - Fees Paid / Average Interest-Earning Assets
(3) ROAA: Net Income / Average Total Assets
(4) ROAE: Net Income / Average Total Equity
(5) Efficiency Ratio: Non-Interest Expense / Net Operating Revenues
(6) Efficiency Ratio: Non-Interest Expense / Net Operating Revenues + Provision for Loan Losses
(7) Operating Efficiency: Non-interest Expense / Average Assets
(8) Commissions and Fees (Net) / Net Operating Revenue
(9) NPL Ratio: Non-Performing Loans / Total Loan Portfolio
(10) Coverage Ratio: Allowances for Loan Losses / Non-Performing Loans