Grupo Financiero Banorte (GFNORTEO) Q4 2024 earnings summary

Executive summary

• Delivered strong 2024 results with net income of MXN 56.2 billion, up 7% year-over-year, and ROE at 22.4%, despite economic and political uncertainties in Mexico and the U.S.

• GDP growth for Mexico in 2024 was 1.6%, with resilient domestic demand; 2025 GDP growth expected to slow to 1%, supported by the new administration's economic plan.

• Inflation improved to 4.2% in 2024, with further declines expected in 2025; Banxico rate cut to 10% at 2024 year-end.

• Capital adequacy remains strong at 21.8%, CET1 at 13.2%, and LCR at 164%, supporting high shareholder returns.

• NPL ratio improved to 0.9% in 2024, reflecting strong origination models and portfolio selectivity.

Financial highlights

• Net income for 2024 reached MXN 56.2 billion, up 7% year-over-year, with Q4 net income at MXN 13.7 billion, down 4% sequentially.

• Net interest income grew 9% year-over-year; non-interest income up 28%, driven by higher fees and trading.

• Cost-income ratio at 36.96%, with efforts underway to reduce expenses.

• Core deposits increased 10% year-over-year; total bank deposits up 7% year-over-year.

• EPS for 2024 was MXN 18.31, with a payout ratio of 69.1%.

Outlook and guidance

• 2025 guidance: loan growth 8%-11%, group NIM 6.1%-6.4%, bank NIM 6.4%-6.6%, cost of risk 1.8%-2%.

• Net income guidance for 2025: MXN 59.6-62.1 billion; ROE 21.5%-23% for group, 28%-30% for bank.

• GDP growth expected at 0.7%-1.3%, inflation 4%-5%, Banxico rate at 8.5% by year-end.

• Management expects continued growth in profitability, supported by diversified income streams and robust risk management.

• Focus remains on client profitability, cost reduction, and efficient capital use.