1 January, 2003 GFNORTE 4Q02 Results. 2 GFNorte Results HIGHLIGHTS 2002 2001 GFNORTE GFNorte’s Net...

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January, 2003

GFNORTEGFNORTE4Q02 Results4Q02 Results

2

GFNorte ResultsGFNorte ResultsHIGHLIGHTS

20022001GFNORTEGFNorte’s Net Income (PS million)GFNorte’s Net Income (PS million) (Excluding Generali)ROEROE (Excluding Generali)EPS (Ps/per share)Book Value

BANKING SECTORBanking Sector’s Net Income (PS million)Banking Sector’s Net Income (PS million) (Excluding Generali)Capitalization RatioLoan Portfolio annual growth (Exc.FOBA/IPAB)Total Deposits annual growthPast due loan ratioReserve Coverage

1,587.9

17.2%

3.1819.14

1,342.8

11.5%33.5%12.4%

5.5%100.0%

2,015.91,621.019.2%15.6%

4.0322.35

1,700.31,346.914.8%77.3%65.9%

3.1%118.0%

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GFNorte generated profits for PS 2,016 million in GFNorte generated profits for PS 2,016 million in the year the year

ACCUMULATED NET INCOME DECEMBER 2002MILLIONS OF PESOS

BANKING PS 1,700 84%

($12)HOLDING 0%

$80BROKERAGE 4%

$165LONG TERM SAVINGS 8%

$82AUXILIARY ORGANIZATIONS 4%

PS 2,016GFNORTE 100%

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Traditional loan portfolio showed an important Traditional loan portfolio showed an important growth specially in Mortgage and Consumer loansgrowth specially in Mortgage and Consumer loans

DATA AS OF DECEMBER ‘02.

LOAN PORTFOLIO(Millions of Pesos)

Commercial

Mortgage and Consumer

Mortgage

Credit Card

Auto

Other

Corporate

Recovery Banking

4Q01 4Q02 % GROWTHQTR YR

3Q02

13,072

5,148

2,701

869

1,364

15,629

10,430

1,664

2,973

203.6%

286.1%

91.6%

118.0%

215

9,152

6, 386

561

14,025

5,308

161.1%

53.2%

(16.9)%

16,623

14,545

9,924

1,546

2,614

461

11,583

5,684

15.1%

7.5%

5.1%

7.7%

13.7%

21.7%

21.1%

(6.6)%

19,136 46.4%

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Bancrecer IntegrationBancrecer Integration

LEGAL & FINANCIAL

Implement a strict and ambitious cost reduction program.

Legal and accounting merger.

Reach a profitable settlement with Generali.

COMMERCIAL ORGANIZATIONALTECHNOLOGICAL & OPERATIONAL

Reorganize the branch network.

Enhance the sales volume of the acquired network.

Integrate both banks commercially.

Exterior rebranding.

Standardize a single structure.

Maintain an intensive personnel training and continuous information program.

Provide technological support for Commercial Integration.

Use a single operating platform for both banks.

COMMITMENTS

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Bancrecer IntegrationBancrecer IntegrationLEGAL AND FINANCIAL

IMPLEMENT A STRICT AND AMBITIOUS COST REDUCTION PROGRAM

ACHIEVEMENTSCOMMITMENTReductions of Ps 406 million this year, and Ps 807 in 2003.

594 2,055-employee downsize111 Consolidation of cash concentration and distribution centers 72 Rents 37 Consolidation of credit and debit card, ATM and sales point terminal

operations 30 Telecommunication network integration, with unified computer centers

and equipment and homologous contracts with technology and maintenance service suppliers

23 Office supplies, photocopy, internal communication and correspondencePs 867 million total annual savings

Reach the goal by March 31, 2002.

Accomplished as planned Report conslidated figures since the first quarter 2002.

Take advantage of Bancrecer’s fiscal loss of approximately Ps 4,600 million in a shorter term.

LEGAL AND ACCOUNTING MERGER

REACH A PROFITABLE SETTLEMENT WITH GENERALI USD 45 million cash premium in the second quarter of the year.

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Bancrecer IntegrationBancrecer IntegrationCOMMERCIAL

REORGANIZE THE BRANCH NETWORK

ENHANCE THE SALES VOLUME OF THE ACQUIRED NETWORK

INTEGRATE BOTH BANKS COMMERCIALLY

So far, 110 Bancrecer and 11 Banorte branches have been closed down due to market considerations.

Introducing Imanorte attracted an inflow of Ps 2,149 million.

5,580 car “Autoestrene” loans for Ps 556 million; 569 mortgage loans for Ps 272 million; and 16,187 “CrediNómina” [payroll loans] for Ps 206 million.

17,753 car insurance policies [“Fórmula Auto”] have been placed since January 21, 6,358 policies of our recently incorporated life insurance [“Fórmula Vida”] were sold since October.

Show Banorte to the client as an integrated bank by the second quarter of 2002.

At present, we offer the same products and services throughout the entire integrated network.

EXTERIOR REBRANDINGScheduled to begin in the 2Q02.

All former Bancrecer branches throughout the country now display Banorte’s brand.

ACHIEVEMENTSCOMMITMENT

Close branches: 96 Bancrecer, 9 Banorte.

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Bancrecer IntegrationBancrecer IntegrationORGANIZATIONAL

STANDARDIZE A SINGLE STRUCTURE

MAINTAIN AN INTENSIVE PERSONNEL TRAINING AND CONTINUAL INFORMATION PROGRAM

To integrate the organizational structures of both banks in the shortest time possible.

A single organizational structure for both banks was formed during the first quarter of the year.

The Bancrecer Labor Union was dissolved, and those employees were transferred to Banorte’s payroll and fringe benefit system.

A new salary tabulator was developed, with salaries 10% lower than those Banorte used to have.

A new organizational diagram was created for the branches of both networks.

Personnel have intensively participated in training programs covering Banorte’s sales philosophy, product features and operating procedures.


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Bancrecer IntegrationBancrecer IntegrationTECHNOLOGICAL AND OPERATIONAL

PROVIDE TECHNOLOGICAL SUPPORT FOR COMMERCIAL INTEGRATION

USE A SINGLE OPERATING PLATFORM FOR BOTH BANKS

A year ago, we promised to finish by 2Q02.

Commercial integration was accomplished by November 30. Currently, all branches have the same product supply.

We set a 12 month deadline as of April this year.

We decided to include additional elements in this project.April 2003, start trial tests to standardize operations in all the delivery channels and prepare to transfer all Banorte clients to the Altamira Platform. Around June, start setting up this new operating platform throughout the entire network.By September 2003, over 80% of the deposit, loan and service volume should be handled in this new mode.The remaining 20% should be incorporated by October-November.

The project will stay within the initial budget.


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Bancrecer IntegrationBancrecer IntegrationTOTAL COST OF THE INTEGRATION

Overall Budget for Integration Costs: Ps 1,076 million.

Expenditure to date: 68%, equivalent to Ps 727 million.

Severance and CompensationsPs 342

Technological Integration179

Medical Service Fund for Retirees51

Operative Integration and Branches Closes45

Ps 727

DECEMBER 2002.

Image Change110

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Bancrecer IntegrationBancrecer Integration

Challenges that we will have to face for 2003: Finish successfully the Technological and Operative

Transformation stage. Substantially increase the volume of operations in the

Bancrecer’s network.

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Banking Sector Efficiency Ratio ...Banking Sector Efficiency Ratio ...... Grupo Financiero Banorte has supported its growth through the acquisition of other financial institutions, and has improved their performance to reach Banorte’s standards and has made

them profitable.

1992

EfficiencyRatio * 55% 66% 93% 78%

1996 1997 DEC’ 02

105%

2001

78% 87%

(*) With Trading

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Comparatives to the IndustryComparatives to the Industry

ASSETS

25.3%

10.8%

BANACCI BANORTE

9.6%

BITALSANTANDER

SOURCE: CNBV AT 3Q02.

BVA-BANCOMER

15.0%

2°

19.9%

4° 4.6%

SCOTIABANK

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DEPOSITS


26.6%

12.1%

BANACCI BANORTE

10.8%

BITALSANTANDERBVA-BANCOMER

15.1%2°

19.3%

4°5.0%

SCOTIABANK

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Comparatives to the IndustryComparatives to the IndustryLOAN PORTFOLIO

(Including FOBAPROA/IPAB)


25.5%

14.9%

BANACCI BANORTE

7.0%

BITALSANTANDERBVA-BANCOMER

14.6%2°

19.2%

3° 5.3%

SCOTIABANK

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NUMBER OF BRANCHES


23.8%

15.2%

BANACCI BANORTE

19.6%

BITAL SANTANDERBVA-BANCOMER

13.1%2°

20.3%

4° 5.3%

SCOTIABANK

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ROEDECEMBER 2002

GFNorte´s ROE ranks among the highest in MexicoGFNorte´s ROE ranks among the highest in Mexico

SOURCE: PRESS RELEASE EACH BANK AT 4Q02. * FIGURES AS OF 3Q02

6.1% *19.2%

34.6%SA

NTA

ND

ER -

SER

FIN

BA

NA

CC

I

GFN

OR

TE4.2% *

BIT

AL

20.0% *SC

OTI

AB

AN

KIN

VER

LAT*

BB

VA-B

MR

14.8%

3°

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The capitalization ratio increased to 14.8% with The capitalization ratio increased to 14.8% with rules of 2003rules of 2003

12.6% *9.9% *

13.1%

SCOTIABANKINVERLAT

BBVA -BANCOMER BITALBANORTE

SANTANDER SERFÍN

20012003 200320032001RULES OF:

20.5%

CAPITALIZATION RATIO

14.8%2°

SOURCE: PRESS RELEASE EACH BANK AT 3Q02.* FIGURES AS OF 3Q02

13.0% *

BANAMEX*

2003

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Recent EventsRecent Events

GFNorte and Banco Popular Español

• GFNorte and Banco Popular Español signed an agreement on November 27,

2002, to the effect that Banorte could serve the Spanish Bank’s clients in Mexico

and they, in turn, would do the same for Banorte’s clients in Spain, as well as in

France and Portugal were they also have branches.

Banorte placed Non-Convertible Subordinate Notes

• On November 28, 2002, Banorte placed Non-Convertible Subordinate

Notes, at a 10-year term for an amount equal to Ps 1,136 million. The funds

from this placement serve for funding long-term operations and also helped

improving Banorte’s capitalization ratio.

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January, 2003

GFNORTEGFNORTE4Q02 Results4Q02 Results

1 January, 2003 GFNORTE 4Q02 Results. 2 GFNorte Results HIGHLIGHTS 2002 2001 GFNORTE GFNorte’s Net...

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