Grupo Financiero Santander Mexico Reports Fourth Quarter 2014 Loan Portfolio Up 17.9% YoY and Net Income of Ps.3,824 Million

- Loan growth driven by YoY increases of 25.5% in SMEs, 14.4% in middle-market, 17.5% in mortgages, 14.7% in consumer loans and 5.1% in credit cards

- Ongoing prudent risk management reflected in a NPL ratio of 3.75% (2.33% excluding homebuilders and Santander Vivienda portfolio) and a cost of risk of 3.3%

- Efficiency ratio of 43.0% achieved through continued focus on operating efficiency while investing in strategic businesses and new branches

MEXICO CITY, Feb. 3, 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 and twelve-month periods ending December 31, 2014.

Reported net income for the quarter was Ps.3,824 million, representing a decline of 37.7% YoY and an increase of 17.9% QoQ. Comparable 4Q13 results exclude: i) a Ps.1,927 million net gain after taxes resulting from the divestiture of the asset management business, ii) a Ps.1,074 million benefit from advanced tax credits, iii) an extraordinary non-cash benefit of Ps.265 million related to a regulatory change in employee profit sharing future payments, iv) a cash expense of Ps.66 million to comply with the new employee profit sharing legal criteria. Excluding these items, comparable net income in 4Q14 increased 27.7% YoY.

Marcos Martinez, Grupo Financiero Santander Mexico's Executive President and CEO, commented, "We reported a strong business performance this quarter, supported on our strategy to maximize growth opportunities offering innovative products, while maintaining a strong focus on risk management and cost controls. In fact, comparable net income rose 28% YoY and 18% on a sequential basis, the highest in the last five quarters."

"We expanded our loan book by 17.9% year-on-year, doubling financial system growth for the third consecutive quarter. This was accomplished despite the slowly recovering economy. Most importantly, we achieved loan growth across all segments. SMEs loans expanded 25.5% YoY and mortgages were up 17.5%, both significantly above market rates. Consumer loans rose 9.1% YoY, still affected by continued soft consumer demand, particularly in the credit card segment, but well-above market rates. Actually, excluding credit cards, we achieved a 14.7% YoY increase in consumer loans. Middle-market loans growth was also quite strong, up 14.4% YoY."

"This was also the third consecutive quarter of 3% sequential growth in net interest income, and while NPLs increased slightly this quarter, cost of risk fell 17 bps. In addition, this year we established a controlled and solid cost base that will allow us to fully leverage the benefit of our strategic initiatives. Expenses remained stable for the fifth consecutive quarter even as we continued to invest in strategic businesses and new branches."

"This quarter we also reached an agreement to acquire a consumer loan portfolio of approximately Ps.4.1 billion from Scotiabank Inverlat S.A. This transaction, which is anticipated to close during 1Q15, is expected to further expand our market share in the personal loans segment by approximately 300 bps while maintaining our credit quality standards and add more than 47,000 new clients."

Mr. Martinez concluded, "Looking ahead, we continued to see evidence this quarter of a slowly recovering economy confirming the reversal in the trend we started to see in the third quarter of 2014. We are well positioned to capture the benefits of a full economic recovery, leveraging our wide range of atractive and innovative financial products."

To obtain the full text of this earnings report and the 4Q14 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/english/financial/quarterly.html

INVESTOR RELATIONS CONTACT
Hector Chavez Lopez – Managing Director - IRO
+52-(55)-5269-1925
[email protected]
Gerardo Freire Alvarado – Executive Director of Investor Relations
+52-(55)-5269-1827 / +52-(55)-5269-1828
[email protected] 
Investor Relations Team
[email protected] 
www.santander.com.mx

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 December 31, 2014, Santander Mexico had total assets of Ps.937.4 billion under Mexican Banking GAAP and more than 11 million customers. Headquartered in Mexico City, the Company operates 1,081 branches and 265 offices nationwide and has a total of 16,428 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