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Banco Santander México Reports Third Quarter 2019 Net Income of Ps.5,517 Million

- Progress on strategy execution to transform the Bank operationally and digitally.

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

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

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

MEXICO CITY, Oct. 31, 2019 /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 nine-month periods ending September 30, 2019.

Banco Santander México reported net income of Ps.5,517 million in 3Q19, representing a YoY increase of 8.3% and a QoQ decrease of 1.6%. On a cumulative basis, net income for 9M19 reached Ps.16,416 million, representing a 9.5% YoY increase.

HIGHLIGHTS













Results (Million pesos)


3Q19

2Q19

3Q18


%QoQ

%YoY


9M19

9M18


%YoY

Net interest income


16,589

16,588

15,795


0.0

5.0


49,626

45,205


9.8

Fee and commission, net


4,580

4,697

4,271


(2.5)

7.2


13,703

12,602


8.7

Core revenues


21,169

21,285

20,066


(0.5)

5.5


63,329

57,807


9.6

Provisions for loan losses


4,478

4,454

4,796


0.5

(6.6)


13,250

12,913


2.6

Administrative and promotional expenses


9,783

9,482

9,003


3.2

8.7


28,521

26,066


9.4

Net income


5,517

5,608

5,096


(1.6)

8.3


16,416

14,994


9.5

Net income per share1


0.81

0.83

0.75


(1.6)

8.3


2.42

2.21


9.4














Balance Sheet Data (Million pesos)


Sep-19

Jun-19

Sep-18


%QoQ

%YoY


Sep-19

Sep-18


%YoY

Total assets


1,460,741

1,368,187

1,375,294


6.8

6.2


1,460,741

1,375,294


6.2

Total loans


697,326

700,329

680,120


(0.4)

2.5


697,326

680,120


2.5

Deposits


683,590

721,288

680,143


(5.2)

0.5


683,590

680,143


0.5

Shareholders´ equity


139,700

133,829

127,385


4.4

9.7


139,700

127,385


9.7














Key Ratios (%)


3Q19

2Q19

3Q18


bps QoQ

bps YoY


9M19

9M18


bps YoY

Net interest margin


5.74

5.76

5.66


(2)

8


5.69

5.48


21

Net loans to deposits ratio


98.89

94.13

97.00


476

189


98.89

97.00


189

ROAE


16.63

17.29

16.74


(66)

(11)


16.49

16.41


8

ROAA


1.55

1.63

1.51


(8)

4


1.54

1.48


6

Efficiency ratio


45.11

44.29

44.18


82

93


44.74

44.64


10

Capital ratio


16.89

16.50

16.02


39

87


16.89

16.02


87

NPLs ratio


2.33

2.23

2.35


10

(2)


2.33

2.35


(2)

Cost of Risk


2.62

2.70

2.77


(8)

(15)


2.62

2.77


(15)

Coverage ratio


130.82

136.56

127.60


(574)

322


130.82

127.60


322














Operating Data


Sep-19

Jun-19

Sep-18


%QoQ

%YoY


Sep-19

Sep-18


%YoY

Branches


1,223

1,216

1,218


0.6

0.4


1,223

1,218


0.4

Branches and offices2


1,411

1,394

1,385


1.2

1.9


1,411

1,385


1.9

ATMs


8,866

8,749

8,003


1.3

10.8


8,866

8,003


10.8

Customers


17,739,373

17,220,259

16,482,009


3.0

7.6


17,739,373

16,482,009


7.6

Employees


19,876

19,403

18,629


2.4

6.7


19,876

18,629


6.7

 

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: "Our focus on profitable growth delivered another quarter of solid performance, with steady increases in high margin loans and fees. Net income grew over 8% year-on-year, as we attracted more retail deposits, expanded our base of loyal, digital and mobile customers, and cross sold more of our products. The increase came despite a substantially higher effective tax rate as well as additional strategic investments that are further strengthening our retail franchise and making Santander the primary bank of a growing number of Mexicans.

Our performance was particularly gratifying, given softer economic conditions in the third quarter and our ability to maintain asset quality at a healthy level with year-on-year improvements across risk metrics. Driving our loan book were mortgages, credit cards and payroll loans, as well as middle-market lending. Individuals are increasingly attracted to our more modern and user-friendly branch formats, with 180 branches being converted during this year. Our base of digital and mobile customers grew 51% and 69%, respectively, as we continued upgrading our online and mobile banking platforms. This quarter we also formed a strategic alliance with CONTPAQi, a leading supplier of accounting software to over 1 million SMEs in México. Through this partnership, we aim to grow our base of SME customers by 50% within the next four years.

Although both domestic and global macroeconomic environments remain complex and challenging, we are encouraged by more accommodative central bank policies, still moderate inflation, as well as healthy employment levels across almost all sectors in México. And as we near the completion of our three-year investment plan, we continue building a far stronger and more customer-centric bank to maintain our profitable growth momentum in the years ahead."

3Q19 EARNINGS CALL DIAL-IN INFORMATION



Date:

Friday, November, 1st, 2019



Time:

08:00 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=136399



Replay:

Starting: Friday, November 1st, 2019 at 1:00 p.m. (US ET)


Ending: Friday, November 8th, 2019 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: 13695244

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 September 30, 2019, Banco Santander México had total assets of Ps.1,461 billion under Mexican Banking GAAP and more than 17.7 million customers. Headquartered in Mexico City, the Company operates 1,411 branches and offices nationwide and has a total of 19,876 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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