Regional S.A.B (RA) Q3 2025 earnings summary

Executive summary

• Net income for 3Q25 was $1,531 million pesos, down 5% year-over-year, with ROAE at 19.3% and total assets up 11% to $270,921 million pesos.

• Delivered resilient profitability and healthy growth amid a mixed macro backdrop, with disciplined execution, selective growth, and revenue diversification.

• Core deposits and time deposits both rose 9% year-over-year to $183,237 million pesos.

• Efficiency ratio deteriorated to 41.7% from 39.5% a year ago, reflecting higher operating expenses.

• Continued expansion in high-potential regions, especially Jalisco, and disciplined cost management.

Financial highlights

• Financial margin expanded 7% year-over-year to $3,905 million pesos, supported by higher volumes and disciplined pricing.

• Non-interest income reached $1,015 million pesos, with net fees up 16% and insurance fees up 18% year-over-year.

• Operating income for 3Q25 was $2,106 million pesos, down 5% year-over-year.

• Non-interest expenses rose 12% year-over-year, mainly due to technology, expansion, and inflation.

• NPL ratio increased to 1.6% from 1.3% a year ago; cost of risk rose to 1%.

Outlook and guidance

• Loan growth and core deposits expected within 7%-10% guidance, likely closer to 8%-9%.

• Net income growth target for the year is challenging and not expected to reach 5%; improvement efforts continue.

• Cost improvements from automation and staff reductions will be more visible in 2026.

• Cost of risk expected to stabilize at 0.8%-0.9% in 2026.

• Management notes ongoing margin compression and rising credit risk, with a focus on maintaining asset quality and capital ratios.