U.S. Markets open in 2 hrs 33 mins

Banco Santander México Reports First Quarter 2020 Net Income of Ps.5,414 Million

- Net income growth supported by fees and market related income that compensated for the softer net interest income growth and a material non-recurrent increase in provisions

- Loan growth mainly driven by commercial loans, mortgages, and payroll loans

- Strong deposit growth owing to significant increase in commercial deposits, while individual deposits continue to grow supported by our loyalty strategy

- Non material impact from the COVID-19 pandemic; well positioned to face coronavirus impact

MEXICO CITY, April 29, 2020 /PRNewswire/ -- Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México (NYSE: BSMX; BMV: BSMX), ("Banco Santander México" or "the Bank"), today announced financial results for the three-month period ending March 31st, 2020.

Banco Santander México reported net income of Ps.5,414 million in 1Q20, representing increases of 2.3% YoY and 10.1% QoQ.

HIGHLIGHTS









Results (Million pesos)


1Q20

4Q19

1Q19


%QoQ

%YoY


Net interest income


16,896

16,727

16,449


1.0

2.7


Fee and commission, net


4,697

4,325

4,426


8.6

6.1


Core revenues


21,593

21,052

20,875


2.6

3.4


Provisions for loan losses


5,165

4,862

4,318


6.2

19.6


Administrative and promotional expenses


9,785

10,344

9,256


(5.4)

5.7


Net income


5,414

4,916

5,291


10.1

2.3


Net income per share1


0.80

0.73

0.78


9.9

2.1











Balance Sheet Data (Million pesos)


Mar-20

Dec-19

Mar-19


%QoQ

%YoY


Total assets


1,802,210

1,411,994

1,304,294


27.6

38.2


Total loans


775,809

713,680

691,226


8.7

12.2


Deposits


810,340

692,537

702,644


17.0

15.3


Shareholders´ equity


141,041

138,695

132,366


1.7

6.6











Key Ratios (%)


1Q20

4Q19

1Q19


bps QoQ

bps YoY


Net interest margin


5.45

5.39

5.58


6

(13)


Net loans to deposits ratio


92.94

99.95

95.41


(701)

(247)


ROAE


15.48

14.88

16.40


60

(92)


ROAA


1.35

1.41

1.58


(6)

(23)


Efficiency ratio


43.95

47.21

44.81


(326)

(86)


Capital ratio


16.23

16.37

16.90


(14)

(67)


NPLs ratio


2.16

2.28

2.15


(12)

1


Cost of Risk


2.65

2.60

2.69


5

(4)


Coverage ratio


135.17

132.02

140.06


315

(489)











Operating Data


Mar-20

Dec-19

Mar-19


%QoQ

%YoY


Branches


1,211

1,209

1,214


0.2

(0.2)


Branches and offices2


1,406

1,402

1,390


0.3

1.2


ATMs


9,096

9,015

8,507


0.9

6.9


Customers


18,374,959

18,134,468

17,034,317


1.3

7.9


Employees


19,638

19,975

19,291


(1.7)

1.8


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

2) Includes cash desks (espacios select, box select and corner select) and SMEs business centers. Excluding brokerage house offices. 

Héctor Grisi, Banco Santander México's Executive President and CEO, commented: "In these unprecedented times, we have responded with determination to the COVID-19 pandemic by focusing on three key priorities: safeguarding the health of our bank's employees, ensuring the wellbeing of our customers, and strengthening business continuity. We have implemented various measures to help prevent the spread of the coronavirus, such as stricter sanitization procedures and work-from-home protocols using enhanced IT resources. We also initiated a debt relief program for our retail and SME customers, offering deferred payments on their loan's principal and interest for up to six months without any penalty or cost. And we have launched ongoing communications campaigns encouraging people to stay at home and expressing our appreciation for the invaluable work being done by healthcare professionals today.

Despite this challenging period, we delivered a solid first quarter with no material impact from the pandemic on our results. Net income grew 2% year-over-year, supported by fees and market related income that compensated for softer net interest income growth and a material non-recurrent increase in provisions, which are not related to higher expected loan losses. Loan and deposit volumes, on the other hand, started to reflect the new environment, with loans expanding 12% during the quarter to a much higher level than we had anticipated. Commercial loans registered a significant spike of 16% year-over-year, as our clients drew upon their committed lines of credit to cope with the expected economic effects of the pandemic. As a result of this lending activity, our commercial deposits increased substantially, expanding total deposits 15% compared to last year. Despite the sudden increase in loan demand in March, our capital and liquidity positions remain at high levels.

I wish to emphasize that we are operating from a position of strength as we enter this crisis period, owning to our robust liquidity and capital positions as well as healthy asset quality. This strength is reflected in our successful issuance of debt this month, which demonstrates the market's confidence in our bank. Equally important, the steps we have taken to protect our employees and the robust digital platform that we now have in place will help ensure that we continue delivering the high levels of customer service that distinguish our bank. Our aim is to emerge from this crisis as a stronger organization."

1Q20 EARNINGS CALL DIAL-IN INFORMATION



Date: 

Thursday, April, 30st, 2020



Time: 

09:00 a.m. (MCT); 10:00 a.m. (US ET)



Dial-in Numbers:     

1-877-407-4018 US & Canada 1-201-689-8471 International & Mexico



Access Code:  

Please ask for Santander México Earnings Call



Webcast:      

http://public.viavid.com/index.php?id=139099  



Replay:        

Starting: Thursday, April 30st, 2020 at 1:00 p.m. (US ET)


Ending: Thursday, May 7th, 2020 at 11:59 p.m. (US ET)


ET Dial-in number: 1-844-512-2921 US & Canada; 1-412-317-6671 International & Mexico Access Code: 13701875

ABOUT BANCO SANTANDER MÉXICO (NYSE: BSMX; BMV: BSMX)
Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México (Banco Santander México), one of Mexico's leading banking institutions, provides a wide range of financial and related services, including retail and commercial banking, financial advisory and other related investment activities. Banco Santander México 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 March 31, 2020, Banco Santander México had total assets of Ps.1,802 billion under Mexican Banking GAAP and more than 18.3 million customers. Headquartered in Mexico City, the Company operates 1,406 branches and offices nationwide and has a total of 19,638 employees.

LEGAL DISCLAIMER

Banco Santander México cautions that this presentation may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements could be found in various places throughout this presentation 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; financing plans; competition; impact of regulation and the interpretation thereof; action to modify or revoke our banking license; 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; investment in our information technology platform; 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, many important factors could cause actual results to differ substantially from those anticipated in forward-looking statements. These factors include, among other things: 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 México); 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 and tax laws; 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 allowance for impairment losses and other losses; increased default by borrowers; our inability to successfully and effectively integrate acquisitions or to evaluate risks arising from asset acquisitions; 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 or their interpretation; and certain other risk factors included in our annual report on Form 20-F. 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. The words "believe," "may," "will," "aim," "estimate," "continue," "anticipate," "intend," "expect," "forecast" and similar words are intended to identify forward-looking statements. You should not place undue reliance on such statements, which speak only as of the date they were made. We undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this presentation because of new information, future events or other factors. In light of the risks and uncertainties described above, the future events and circumstances discussed herein might not occur and are not guarantees of future performance.

Note: The information contained in this presentation 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 (Comisión Nacional Bancaria y de Valores) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in millions of Mexican pesos, unless otherwise indicated. Historical figures are not adjusted by inflation.

Cision

View original content:http://www.prnewswire.com/news-releases/banco-santander-mexico-reports-first-quarter-2020-net-income-of-ps5-414-million-301049744.html

SOURCE Banco Santander México, S.A.