Grupo Financiero Santander México Reports Fourth Quarter 2017 Net Income of Ps.4,515 Million

MEXICO CITY, Jan. 31, 2018 /PRNewswire/ -- Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, as successor of Grupo Financiero Santander México, S.A.B. de C.V. (NYSE: BSMX; BMV: BSMX before SANMEX), ("Santander México"), today announced financial results for the three-month and twelve-month periods ending December 31^st, 2017.

Santander México reported net income for 4Q17 of Ps.4,515 million, representing a YoY decrease of 0.6% and a QoQ increase of 11.0%. On a cumulative basis, net income for 12M17 reached Ps.17,710 million, representing a 12.7% YoY increase.

Héctor Grisi, Grupo Financiero Santander México's Executive President and CEO, commented: "One year into our three-year investment plan, we are proud of the foundation we have built to become a client-centric bank, placing customers at the center of all we do. While initiatives to streamline our processes and enhance digital capabilities will impact near-term results, we are confident that we are taking the right steps to optimally position our business for the future.

In particular, we are addressing our relatively lower retail business exposure, making important headway in reducing attrition and attracting new customers. At the same time, we are mindful that loyal customers are key to profitability, and are ensuring that they remain satisfied.

Our investment in digitalization and mobile banking is underpinning operational innovation and business transformation at Santander Mexico. These initiatives helped us achieve over 25% growth in loyal customers to over 2 million, almost doubling net new customers over the year. Similarly, digital customers grew by 45% and mobile customers by 67% year-on-year. While our focus on margins will enable us to drive higher profitability in coming years, this is resulting in higher expenses and muting profits in the short term.

In consumer loans we continue to see good traction, while expanding selectively in corporate and government loans as we prioritize margins over market share. Similarly, our client-centric focus on individuals and SMEs along with strong dynamics for Santander Plus are supporting ongoing deposit growth. Importantly, we maintain healthy asset quality, while keeping stringent standards for loan origination, and recently completed the clean-up of our homebuilder portfolio.

We are confident of our strategy to build a stronger, more profitable franchise despite the challenging environment and are pleased with the progress of our initiatives as we execute our investment plan. We remain focused on strengthening our position in retail banking, and realizing the potential of our corporate and investment bank. As such, we look to the coming year with cautious optimism and confidence in our execution."

4Q17 EARNINGS CALL DIAL-IN INFORMATION

ABOUT GRUPO FINANCIERO SANTANDER MÉXICO, S.A.B. DE C.V. (NYSE: BSMX; BMV: SANMEX) 
Grupo Financiero Santander México, S.A.B. de C.V. (Santander México), 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 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 December 31^st, 2017, Santander México had total assets of Ps.1,324 billion under Mexican Banking GAAP and more than 15 million customers. Headquartered in Mexico City, the Company operates 1,401 branches and offices nationwide and has a total of 17,826 employees.  

As such, Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México ("BSMX"), in its capacity successor to Grupo Financiero Santander México, S.A.B. de C.V. ("Sanmex"), presents, for informational purposes only, the internal financial statements of Sanmex for the three months and twelve months ended December 31, 2017 in order to maintain continuity in the disclosure of financial information for Sanmex.

The above-mentioned financial statements of Sanmex are in addition to the internal financial statements of BSMX for the three months and twelve months ended December 31, 2017, which financial statements are also published as of the date hereof.

LEGAL DISCLAIMER
Grupo Financiero 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 Grupo Financiero Santander México's authorization to act as a sociedad controladora de un grupo financiero or Banco Santander México's 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.
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 nominal Mexican pesos, unless otherwise indicated. Historical figures are not adjusted by inflation.

SOURCE Banco Santander (México), S.A.