Regional S.A.B (RA) Q1 2026 earnings summary

Executive summary

• Net income for 1Q26 was MXN 1,515 million, down 7% year-over-year, reflecting disciplined execution amid a challenging Mexican macroeconomic environment.

• Total assets grew 13% year-over-year to MXN 287,969 million, with total loans up 9% to MXN 197,120 million.

• Core deposits increased 13% year-over-year, driven by a 21% rise in time deposits.

• Hey Banco completed its spin-off, now operates independently, reached profitability, and is prioritizing quality over scale.

• Focus remains on expanding presence in key regions, strict cost control, credit underwriting discipline, and diversifying income streams.

Financial highlights

• Financial margin rose 3% year-over-year but fell 5% sequentially; operating income decreased 4% year-over-year.

• Non-interest income grew 5% year-over-year; merchant fees up 12%, insurance fees up 41%.

• Operating expenses rose 11% year-over-year, mainly due to technology and geographic expansion; efficiency ratio at 43.0%, up 265 bps.

• Interest income declined 4% year-over-year, while interest expenses fell 11%.

• Non-performing loan ratio improved to 1.3%, down 7 bps year-over-year; cost of risk contracted 3 bps to 1%.

Outlook and guidance

• Net interest margin (NIM) expected to recover gradually, but to the lower end of guidance (around 6%) for the year.

• Loan growth guidance remains high single digits (8-9%), with Hey Banco expected to maintain 20% growth.

• Provisioning expected to remain between 0.9% and 1% for the full year.

• OpEx growth projected in the low teens for the year, with expense growth moderating as investment cycle matures.

• Dividend policy remains aligned with operating results, capital needs, and growth estimates.