Grupo Financiero Santander Mexico Reports Second Quarter 2015 Loan Portfolio Up 13.1% YoY and Net Income of Ps.3,238 Million

- Loan growth driven by YoY increases of 23.6% in SMEs, 16.4% in middle-market, 14.0% in mortgages, 31.5% in consumer loans and 5.6% in credit cards

- Ongoing prudent risk management reflected in a NPL ratio of 3.77% (2.38% excluding homebuilders and Santander Vivienda portfolio) and a cost of risk of 3.4%

Jul 30, 2015, 08:14 ET from Grupo Financiero Santander Mexico, S.A.B. de C.V.

MEXICO CITY, July 30, 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- and six-month periods ending June 30, 2015.

Santander Mexico reported net income for the quarter of Ps.3,238 million, representing a YoY decline of 12.2% and a QoQ increase of 0.7%.

Grupo Financiero Santander Mexico

Highlights

2Q15

1Q15

2Q14

% YoY

Income Statement Data

Net interest income

10,466

9,925

9,262

13.0

Fee and commission, net

4,011

3,298

3,291

21.9

Core revenues

14,477

13,223

12,553

15.3

Provisions for loan losses

4,543

3,683

3,672

23.7

Administrative and promotional expenses

6,391

6,389

5,921

7.9

Net income

3,238

3,215

3,687

(12.2)

Net income per share1

0.95

0.47

1.03

(7.8)

Balance Sheet Data

Total loans

498,500

474,738

440,675

13.1

Deposits

482,205

459,130

425,108

13.4

Shareholders' equity

108,871

109,003

101,912

6.8

Key Ratios

bps

Net interest margin

4.84%

4.87%

4.96%

(11.3)

Net loans to deposits ratio

99.5%

99.6%

99.8%

(29.2)

ROAE2

12.0%

12.0%

14.1%

(208.4)

ROAA

1.3%

1.3%

1.6%

(30.6)

Efficiency ratio

43.5%

44.8%

42.9%

56.7

Capital ratio

15.9%

16.6%

16.1%

(21.0)

NPLs ratio

3.77%

3.68%

3.33%

44.3

Cost of Risk

3.4%

3.1%

3.4%

(0.5)

Coverage ratio

99.1%

99.6%

111.8%

(1,263.4)

Operating Data

%

Branches and offices3

1,356

1,350

1,293

4.9

ATMs

5,756

5,672

5,315

8.3

Customers

12,166,776

12,062,710

11,159,430

9.0

Employees

16,768

16,435

14,375

16.6

1) Accumulated EPS, net of treasury shares (compensation plan) and discontinued operations. Calculated by using weighted shares.

2) ROAE as reported

3) As of 2Q15 includes: 1,078 branches + 18 SME offices + 7 SME branches + 117 cash desks + 11 Select offices + 45 Select units + 56 Select boxes + 24 brokerage house branches

Marcos Martinez, Grupo Financiero Santander Mexico's Executive President and CEO, commented, "We reported a strong business performance this quarter, with all core products expanding well-above system growth rates reflecting our focus on client service and attractive product offering."

"Most significantly, consumer loans, ex-credit cards, were up 31% year-on-year and 14% sequentially.  Even excluding the acquisition of the Scotiabank portfolio effective on April, this loan portfolio expanded 7% sequentially, more than doubling system growth driven by our renewed focus on payroll and personal loans. An effective cross selling strategy implemented with the newly acquired customers also contributed to this performance. Despite soft growth in credit cards, up 4% sequentially, we exceeded market growth by more than four times. Mortgage loans rose 14% from 2Q14, well-above the system as we continue to leverage our wide product offering and our position as Mexico's leading mortgage originator. SME loans posted a 24% year-on-year increase, also beating the market, maintaining our leadership position in this profitable market as we continue to drive our cross-selling efforts and differentiated financial services."

"We maintained prudent risk management as we continued to drive loan growth. Cost of risk increased 28 basis points sequentially to 3.41% reflecting the anticipated increase in loan loss reserves this quarter, but remained stable year-on-year."

"Efficiency levels, improved 130 basis points sequentially, down to 43.5% as costs remained stable reflecting our tight cost management. Gross operating income increased 8% year-on-year, driven by strong growth in core earnings supported by our effective commercial efforts to drive more profitable consumer loans while trading gains were weaker this quarter. Net income, however, was impacted by several factors including the anticipated increases in loan loss reserves, the effective tax rate and lower trading gains."

Mr. Martinez concluded, "Looking ahead, loan growth is anticipated to continue the gradual recovery experienced over the past quarters, as we leverage our differentiated product offering and strong market position in our core segments. We remain fully committed to the development of our country through our participation in the energy and infrastructure sectors and expect to continue executing our strong pipeline as projects move forward."

To obtain the full text of this earnings report and the 2Q15 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/english/financial/quarterly.html

2Q15 EARNINGS CALL DIAL-IN INFORMATION

Date:         

Thursday, July 30, 2015

Time:          

10:00 AM (MCT); 11:00 AM (US ET)

Dial-in Numbers:

1-888-263-2905 US & Canada; 1-913-312-1471 International & Mexico

Access Code:     

9701633

Webcast:            

http://public.viavid.com/index.php?id=115090

Replay:              

Thursday, July 30, 2015 at 2:00 pm US ET, and Thursday, August 6, 2015 at 11:59 pm US ET

Dial-in number: 1-877-870-5176 US & Canada; 1-858-384-5517 International & Mexico  Access Code: 9701633

INVESTOR RELATIONS CONTACT Hector Chavez Lopez – Managing Director - IRO  + 52 (55) 5269-1925 hchavez@santander.com.mx  Gerardo Freire AlvaradoExecutive Director of Investor Relations + 52 (55) 5269-1827 / + 52 (55) 5269-1828 gfreire@santander.com.mx  Investor Relations Team                                       investor@santander.com.mx                             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 June 30, 2015, Santander Mexico had total assets of Ps.1,065 billion under Mexican Banking GAAP and more than 12 million customers. Headquartered in Mexico City, the Company operates 1,078 branches and 278 offices nationwide and has a total of 16,768 employees.

We, the undersigned under oath to tell the truth declare that, in the area of our corresponding functions, we prepared the information on Grupo Financiero Santander Mexico contained in this quarterly report, which to the best of our knowledge reasonably reflects its situation. 

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