Grupo Financiero Santander Mexico Reports First Quarter 2015 Loan Portfolio Up 16.0% YoY and Net Income of Ps.3,215 Million

MEXICO CITY, April 28, 2015 /PRNewswire/ -- Grupo Financiero Santander Mexico, S.A.B. de C.V., (NYSE: BSMX) (BMV: SANMEX), ("Santander Mexico"), one of the leading financial groups in Mexico, today announced financial results for the three-month period ending March 31, 2015.

Santander Mexico reported net income for the quarter of Ps.3,215 million, representing declines of 1.4% and 15.9% YoY and QoQ, respectively.

Marcos Martinez, Grupo Financiero Santander Mexico's Executive President and CEO, commented, "This was a good quarter; we continued to expand our loan portfolio leveraging the consistent signs of economic recovery, again beating system growth rates while further enhancing asset quality and maintaining a stringent focus on cost controls. Gross operating income reached a record high surpassing the Ps.14 billion mark."

"Our continued focus on client service and attractive product offering allowed us to report a 16% YoY increase in our loan book achieving a positive performance across all segments. Most importantly, consumer loans – excluding credit cards – rose 21% YoY, more than doubling market growth. And while credit card use remains weak we expanded this product by 4% YoY, doubling system rates. Furthermore, we maintain our leadership position in the highly attractive SME market, increasing this portfolio up 24% year-on-year. Mortgage loans rose 15% YoY, remaining the leading mortgage originator in the country, with middle market loans also posting strong growth – up 15% year-on-year and doubling the market."

"Growth was achieved while lowering cost of risk by 19 bps QoQ and 32 bps YoY and increasing the coverage ratio to close to 100%. NPLs showed sequential improvements across most segments."

"While net income was impacted by a higher effective tax rate, costs related to our branch expansion and lower investment banking and credit card fees, gross operating income increased 8% year-on-year, above growth in expenses and loan loss reserves."

"During the quarter we finalized the agreement to acquire a consumer loan portfolio of approximately Ps.3.2 billion from Scotiabank Inverlat S.A. as announced on November 2014. This acquisition became effective on April 2015 and added approximately 39,000 new clients."

Mr. Martinez concluded, "Looking forward, we expect loan growth to remain strong based on our cautiously optimistic view of the recovery of the Mexican economy, particularly given the recent pick-up in consumer activity. Our results are also expected to benefit from increasing investment banking activity fees as external volatility subsides and the execution of large energy and infrastructure projects moves ahead. We are confident that our solid franchise, attractive product offering and a motivated team will allow us to continue contributing to the economic development of the country."

To obtain the full text of this earnings report and the 1Q15 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/english/financial/quarterly.html

1Q15 EARNINGS CALL DIAL-IN INFORMATION

ABOUT GRUPO FINANCIERO SANTANDER MEXICO, S.A.B. DE C.V. (NYSE: BSMX; BMV: SANMEX)

Grupo Financiero Santander Mexico, S.A.B. de C.V. (Santander Mexico), one of Mexico's leading financial services holding companies, provides a wide range of financial and related services, including retail and commercial banking, securities brokerage, financial advisory and other related investment activities. Santander Mexico 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 March 31, 2015, Santander Mexico had total assets of Ps.1,066 billion under Mexican Banking GAAP and more than 12 million customers. Headquartered in Mexico City, the Company operates 1,076 branches and 274 offices nationwide and has a total of 16,435 employees.

LEGAL DISCLAIMER
Grupo Financiero Santander Mexico cautions that this report may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements may be found in various places throughout this report 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; our focus on strategic businesses; our compound annual growth rate; our risk, efficiency and profitability targets; financing plans; competition; impact of regulation; 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; 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, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: 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 Mexico); 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; 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 allowances for loans and other losses; increased default by borrowers; 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; and certain other factors indicated in our  annual report20F. 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.

Note: The information contained in this report 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 (Comision Nacional Bancaria y de Valores) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in nominal terms. Historical figures are not adjusted for inflation.

SOURCE Grupo Financiero Santander Mexico, S.A.B. de C.V.

Related Links

http://www.santander.com.mx