Grupo Financiero Santander Mexico Reports Third Quarter 2014 Loan Portfolio Up 16.5% YoY and Net Income of Ps.3,244 Million

MEXICO CITY, Nov. 4, 2014 /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 nine-month periods ending September 30, 2014.

Reported net income for the quarter was Ps.3,244 million, representing declines of 44.8% YoY and 12.0% QoQ. Comparable 3Q13 results exclude an extraordinary net non-cash benefit of Ps.2,803 million before taxes related to a mandatory regulatory change in employee profit sharing (EPS) future payments. Excluding this item, comparable net income in 3Q14 decreased 17.2% YoY.

Marcos Martinez, Grupo Financiero Santander Mexico's Executive President and CEO, commented, "Santander Mexico continued to lead loan growth this quarter, up 16.5% YoY. This was the second consecutive quarter doubling Mexican financial system growth.  Among our core products, SME loans remained strong achieving a 26% YoY increase. We have a leading position in this high-potential segment which represents 72% of employment and 52% of GDP in Mexico. To further strengthen our position as the perfect partner for SMEs, last August we launched a program to provide full comprehensive attention to SMEs in coordination with the development banks with the objective of doubling this portfolio in three years."

"Furthermore, mortgage loans were the strongest performers, up 34% YoY, significantly exceeding market growth. Organic growth in this segment was also a healthy 16% YoY, still above market. Consumer loans, in turn, rose 8% YoY, in line with market rates and still reflecting soft consumer activity."

"We continue to launch innovative products in our markets. This quarter we introduced the first co-branded American Express credit card and the first agribusiness credit card in Mexico. In addition, in line with our commitment with SMEs we established a Ps.1.0 billion fund to provide equity related instruments."

"Cost of risk remained stable while NPLs increased slightly this quarter. We remain committed to maintaining our prudent risk management. In addition, net interest income increased for the second consequtive quarter – up 3%. Lower than anticipated level of activity in both higher-margin consumer loans and capital markets transactions affected profitability. Effective expense management however, offset ongoing investment in strategic businesses and branch expansion program."

Mr. Martinez concluded, "Looking to the future, we see signs of a slight economic recovery confirming a reversal in the negative trend, supported by Mexico's solid macro fundamentals. Although consumer is still lagging behind, we are very optimistic about the future, and expect consumer spending to slowly recover as private and public investments continue to materialize. Our sound and customer oriented business strategy positions us well to leverage a full recovery in economic activity."

To obtain the full text of this earnings report and the 3Q14 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/english/financial/quarterly.html 

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 September 30, 2014, Santander Mexico had total assets of Ps.930.4 billion under Mexican Banking GAAP and more than 11 million customers. Headquartered in Mexico City, the Company operates 1,042 branches and 257 offices nationwide and has a total of 15,404 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