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Banco Santander México Reports Fourth Quarter 2019 Net Income of Ps.4,916 Million

- Finalized the three-year investment plan to accelerate the transformation of the Bank operationally and digitally.

- Loan growth mainly driven by mortgages, credit cards and payroll loans, along with government.

- Continue attracting individual deposits, while further enhancing ability to cross-sell products.

- Solid quarter with strong net interest income and healthy asset quality.

MEXICO CITY, Jan. 30, 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 and twelve-month periods ending December 31st, 2019.

Banco Santander México reported net income of Ps.4,916 million in 4Q19, representing a YoY increase of 7.1% and a QoQ decrease of 10.9%. On a cumulative basis, net income for 12M19 reached Ps.21,332 million, representing a 8.9% YoY increase.

HIGHLIGHTS













Results (Million pesos)


4Q19

3Q19

4Q18


%QoQ

%YoY


12M19

12M18


%YoY

Net interest income


16,727

16,589

16,203


0.8

3.2


66,353

61,408


8.1

Fee and commission, net


4,325

4,580

4,230


(5.6)

2.2


18,028

16,832


7.1

Core revenues


21,052

21,169

20,433


(0.6)

3.0


84,381

78,240


7.8

Provisions for loan losses


4,862

4,478

4,838


8.6

0.5


18,112

17,751


2.0

Administrative and promotional expenses


10,344

9,783

9,228


5.7

12.1


38,865

35,294


10.1

Net income


4,916

5,517

4,590


(10.9)

7.1


21,332

19,584


8.9

Net income per share1


0.73

0.81

0.68


(10.9)

6.7


3.14

2.89


8.8














Balance Sheet Data
(Million pesos)


Dic-19

Sep-19

Dic-18


%QoQ

%YoY


Dic-19

Dic-18


%YoY

Total assets


1,411,994

1,460,741

1,381,570


(3.3)

2.2


1,411,994

1,381,570


2.2

Total loans


713,680

697,326

682,848


2.3

4.5


713,680

682,848


4.5

Deposits


692,537

683,590

693,812


1.3

(0.2)


692,537

693,812


(0.2)

Shareholders´ equity


138,695

139,700

125,693


(0.7)

10.3


138,695

125,693


10.3














Key Ratios (%)


4Q19

3Q19

4Q18


bps QoQ

bps YoY


12M19

12M18


bps YoY

Net interest margin


5.39

5.74

5.44


(35)

(5)


5.61

5.47


14

Net loans to deposits ratio


99.95

98.89

95.38


106

457


99.95

95.38


457

ROAE


14.88

16.63

15.18


(175)

(30)


16.14

16.19


(5)

ROAA


1.41

1.55

1.36


(14)

5


1.53

1.45


8

Efficiency ratio


47.21

45.11

46.63


210

58


45.37

45.14


23

Capital ratio


16.37

16.89

15.91


(52)

46


16.37

15.91


46

NPLs ratio


2.28

2.33

2.36


(5)

(8)


2.28

2.36


(8)

Cost of Risk


2.60

2.62

2.72


(2)

(12)


2.60

2.72


(12)

Coverage ratio


132.02

130.82

131.16


120

86


132.02

131.16


86














Operating Data


Dic-19

Sep-19

Dic-18


%QoQ

%YoY


Dic-19

Dic-18


%YoY

Branches


1,209

1,223

1,219


(1.1)

(0.8)


1,209

1,219


(0.8)

Branches and offices2


1,402

1,411

1,393


(0.6)

0.6


1,402

1,393


0.6

ATMs


9,015

8,866

8,384


1.7

7.5


9,015

8,384


7.5

Customers


18,134,468

17,739,373

16,690,063


2.2

8.7


18,134,468

16,690,063


8.7

Employees


19,975

19,876

18,979


0.5

5.2


19,975

18,979


5.2

 

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: "Santander México registered a solid performance in the fourth quarter, finishing a year that produced high-quality operating and financial results. Net income grew 9% year-on-year, supported by strong core earnings coupled with disciplined risk management, despite softer-than-expected economic conditions and the final stage of our investment plan. Our loan portfolio was supported by the retail segments as well as government lending, while we continued attracting more individual deposits and further enhanced our ability to cross-sell products to retail customers. Although Mexico's economy has remained stagnant, our asset quality improved year-on-year, thanks to our prudent growth strategy and stringent origination criteria.

We are very pleased of what we have achieved with of our investment plan. During the last three years, we transformed our distribution network and significantly upgraded our technology, as we reorganized our business to drive innovation and invest in infrastructure. In the process, we enhanced and digitized our processes and operations in order to provide higher-quality customer service and strengthen client loyalty.

By the end of 2019, we reached 3.2 million loyal customers, doubling what we had prior to implementing our strategy.  Further, our investments and efforts to digitalize our customer base and build loyalty also led to a three-fold increase in digital clients, who numbered 4.2 million at the close of the quarter, while our mobile customer base expanded more than four times to 3.8 million.  Importantly, growth in retail demand deposits has contributed to a better mix that will be the long-lasting source for lowering our funding costs.

We are proud of our financial inclusion program, TUIIO, as it is effectively contributing to greater financial inclusion of Mexico's unbanked population. At year-end, Santander operated 85 TUIIO branches in 18 states, serving more than 105,000 customers. The program's total loan portfolio stood at Ps.261 million, with more than Ps.1 billion of loan origination since its inception, two years ago.

Although we still have more ground to cover to transform our bank operationally and culturally, we have reached a point where we have closed a significant technological gap versus our peers and have laid solid foundations to continue building a stronger and more profitable bank. And while domestic and global economic conditions can be expected to remain challenging, we are confident in maintaining our profitable growth momentum in the years ahead in a business environment that we anticipate being more supportive."

4Q19 EARNINGS CALL DIAL-IN INFORMATION

Date:

Friday, Janurary, 31st, 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=137658  

Replay:

Starting: Friday, January 31st, 2020 at 1:00 p.m. (US ET)


Ending: Friday, February 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: 13698080

www.santander.com.mx

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 December 31, 2019, Banco Santander México had total assets of Ps.1,412 billion under Mexican Banking GAAP and more than 18.1 million customers. Headquartered in Mexico City, the Company operates 1,402 branches and offices nationwide and has a total of 19,975 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

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SOURCE Banco Santander México, S.A.