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Banco Santander México Reports Fourth Quarter 2021 Net Income of Ps.5,245 Million

·9 min read

- Strong YoY total loan portfolio growth, outpacing the system, supported by sustained market share gains in mortgages and auto loans. While loan volumes in the commercial portfolio were driven by a pick-up in corporate and government lending.

- Total deposits continued growing at a solid pace, improving the Bank's funding mix by favoring demand deposits over term deposits. Meanwhile, contribution of inviduals has increased considerably during the last five years, in both demand and term deposits, currently the contribution of individuals in total deposits represent 38.6% vs 24.2% in 2016.

- Net income decreased 4.3% YoY in 4Q21, mainly due to higher expenses and provisions for loan losses, partially offset by a lower effective tax rate, solid growth in market related income and higher other operating income.

MEXICO CITY, Feb. 3, 2022 /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, 2021.

Banco Santander México reported net income of Ps.5,245 million in 4Q21, representing a YoY decrease of 4.3% and a QoQ increase of 8.3%. On a cumulative basis, net income for 12M21 reached Ps.18,080 million, representing a 10.3% YoY decrease.

HIGHLIGHTS













Results (Million pesos)


4Q21

3Q21

4Q20


%QoQ

%YoY


12M21

12M20


%YoY

Net interest income


16,046

15,684

16,272


2.3

(1.4)


63,085

65,188


(3.2)

Fee and commission, net


4,760

4,447

4,709


7.0

1.1


18,982

18,694


1.5

Core revenues


20,806

20,131

20,981


3.4

(0.8)


82,067

83,882


(2.2)

Provisions for loan losses


4,289

4,385

3,152


(2.2)

36.1


20,817

21,263


(2.1)

Administrative and promotional expenses


12,636

10,750

11,102


17.5

13.8


43,235

40,915


5.7

Net income


5,245

4,843

5,480


8.3

(4.3)


18,080

20,154


(10.3)

Net income per share1


0.77

0.71

0.81


8.3

(4.3)


2.66

2.97


(10.3)














Balance Sheet Data (Million pesos)


Dec-21

Sep-21

Dec-20


%QoQ

%YoY


Dec-21

Dec-20


%YoY

Total assets


1,639,652

1,669,138

1,856,213


(1.8)

(11.7)


1,639,652

1,856,213


(11.7)

Total loans


750,966

715,759

702,769


4.9

6.9


750,966

702,769


6.9

Deposits


783,118

766,336

764,444


2.2

2.4


783,118

764,444


2.4

Shareholders´ equity


165,894

165,020

158,871


0.5

4.4


165,894

158,871


4.4














Key Ratios (%)


4Q21

3Q21

4Q20


bps QoQ

bps YoY


12M21

12M20


bps YoY

Net interest margin


4.46

4.64

4.50


(18)

(4)


4.51

4.71


(20)

Net loans to deposits ratio


92.94

90.27

88.62


267

432


92.94

88.62


432

ROAE


12.92

11.96

14.73


96

(181)


11.13

13.55


(242)

ROAA


1.20

1.10

1.34


10

(14)


1.03

1.23


(20)

Efficiency ratio


56.00

50.97

52.06


503

394


50.39

46.06


433

Capital ratio


21.56

21.46

19.01


10

255


21.56

19.01


255

NPLs ratio


2.18

2.85

3.08


(67)

(90)


2.18

3.08


(90)

Cost of Risk


2.90

2.75

2.89


15

1


2.90

2.89


1

Coverage ratio


141.38

117.56

116.87



141.38

116.87















Operating Data


Dec-21

Sep-21

Dec-20


%QoQ

%YoY


Dec-21

Dec-20


%YoY

Branches


1,036

1,039

1,013


(0.3)

2.3


1,036

1,013


2.3

Branches and offices2


1,346

1,350

1,350


(0.3)

(0.3)


1,346

1,350


(0.3)

ATMs


9,498

9,564

9,448


(0.7)

0.5


9,498

9,448


0.5

Customers


19,592,102

19,470,357

18,707,976


0.6

4.7


19,592,102

18,707,976


4.7

Employees


25,276

24,901

21,183


1.5

19.3


25,276

21,183


19.3

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: "During the fourth quarter, we maintained a strong balance sheet and liquidity position. We also started to see strengthening loan volumes, mostly boosted by commercial loans, with corporate loans increasing nearly 18% year-over-year while government loans grew 14%. Our individual loans continue outpacing the market, supported by sustained market share gains in mortgages and auto loans. In the consumer segment, we have been seeing signs of a solid sequential recovery, especially in credit cards, as economic activity starts to gather momentum. The segment was also helped by effective cross-selling within our commercial network and by promotional campaigns that we launched throughout the year.

Our deposits continue growing at a solid pace, while our funding mix improves as we favor demand over term deposits. In fact, our current deposit mix, with 72% demand and 28% term, is one of the best blends we have ever achieved. Also, it is worth highlighting that the contribution of individuals has increased considerably in both demand and term deposits. Currently, the contribution of individuals in total deposits represents close to 39%. Additionally, both our individual and corporate demand deposits are still expanding at high single-digit rates versus fourth quarter 2020, underscoring the success of our loyalty and customer acquisition strategies as well as our focus on lowering funding costs even further.

NPLs maintained their downward trend, reaching levels not seen since early 2020, reflecting our prudent risk management and resulting in a healthier loan portfolio. As Mexico's economic activity picks up and our operating environment gains traction, we are pointing to more normalized levels of provisions and cost of risk, and therefore to further improvements in asset quality.

We ended another year during which we again faced the enormous, unpredictable and myriad challenges of the pandemic. Yet we remained resolute, quickly adapting and continuing to support many customers and businesses. As we enter the new year, we continue executing our strategy to strengthen client loyalty and further digitalize our products and operations, with the same ambition to become the bank that provides the best customer experience in Mexico. We also continue implementing many other growth initiatives, making new investments in our bank's transformation, mainly in IT and digitalization, while seeking higher efficiency levels across business lines. Although we made additional progress this year, we are mindful that we must accelerate the pace of transformation."

VIII.4Q21 Earnings Call Dial-In Information

Date:

Friday, February,4th, 2022



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:

https://viavid.webcasts.com/starthere.jsp?ei=1524386&tp_key=b9f6ed27f0



Replay:

Starting: Friday, February 4th, 2022 at 1:00 p.m. (US ET)


Ending: Friday, February 12th, 2022 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: 13726355

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 31st, 2021, Banco Santander México had total assets of Ps. 1,640 billion under Mexican Banking GAAP and more than 19.5 million customers. Headquartered in Mexico City, the Company operates 1,346 branches and offices nationwide and has a total of 25,276 employees.

We, the undersigned under oath to tell the truth declare that, in the area of our corresponding functions, we prepared the information of Banco Santander México contained in this quarterly report, which to the best of our knowledge reasonably reflects its situation.

INVESTOR RELATIONS CONTACT
Héctor Chávez Lopez – Managing Director - IRO
+ 52 (55) 5269-1925
hchavez@santander.com.mx

Investor Relations Team
investor@santander.com.mx

www.santander.com.mx

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.

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SOURCE Banco Santander México, S.A.