HIGHLIGHTS

Results (Million pesos)

3Q17

2Q17

3Q16

% QoQ

% YoY

9M17

9M16

% YoY

Net interest income

14,264

13,547

12,411

5.3

14.9

41,245

35,928

14.8

Fee and commission, net

4,035

4,101

3,739

(1.6)

7.9

12,062

11,330

6.5

Core revenues

18,299

17,648

16,150

3.7

13.3

53,307

47,258

12.8

Provisions for loan losses

5,603

5,241

4,889

6.9

14.6

15,978

14,109

13.2

Administrative and

promotional expenses

8,039

7,951

7,048

1.1

14.1

23,471

20,952

12.0

Net income

4,066

4,609

3,926

(11.8)

3.6

13,195

11,173

18.1

Net income per share1

0.60

0.68

0.58

(11.8)

3.4

1.94

1.65

17.6

Balance Sheet Data

(Million pesos)

3Q17

2Q17

3Q16

% QoQ

% YoY

9M17

9M16

% YoY

Total assets

1,235,717

1,209,059

1,242,258

2.2

(0.5)

1,235,717

1,242,258

(0.5)

Total loans

613,262

589,910

598,829

4.0

2.4

613,262

598,829

2.4

Deposits

626,376

617,467

542,191

1.4

15.5

626,376

542,191

15.5

Shareholders´ equity

119,420

114,969

121,107

3.9

(1.4)

119,420

121,107

(1.4)

Key Ratios (%)

3Q17

2Q17

3Q16

bps QoQ

bps YoY

9M17

9M16

bps YoY

Net interest margin

5.81%

5.31%

5.01%

50

80

5.46%

4.92%

54

Net loans to deposits ratio

94.64%

92.27%

106.73%

237

(1,209)

94.64%

106.73%

(1,209)

ROAE

14.22%

16.44%

13.38%

(222)

84

15.38%

12.70%

268

ROAA

1.25%

1.43%

1.29%

(18)

(4)

1.35%

1.23%

12

Efficiency ratio

42.69%

41.67%

41.34%

102

135

41.67%

42.16%

(49)

Capital ratio

16.19%

16.17%

16.01%

2

18

16.19%

16.01%

18

NPLs ratio

2.26%

2.29%

2.82%

(3)

(56)

2.26%

2.82%

(56)

Cost of Risk

3.72%

3.55%

3.41%

17

31

3.54%

3.28%

26

Coverage ratio

147.41%

149.68%

119.13%

(227)

2,828

147.41%

119.13%

2,828

Operating Data

3Q17

2Q17

3Q16

% QoQ

% YoY

9M17

9M16

% YoY

Branches

1,224

1,228

1,226

(0.3)

(0.2)

1,224

1,226

(0.2)

Branches and offices2

1,401

1,399

1,387

0.1

1.0

1,401

1,387

1.0

ATMs

7,193

7,016

6,620

2.5

8.7

7,193

6,620

8.7

Customers

15,017,610

14,359,246

13,150,684

4.6

14.2

15,017,610

13,150,684

14.2

Employees

17,528

17,209

16,828

1.9

4.2

17,528

16,828

4.2

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

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

Héctor Grisi, Grupo Financiero Santander México’s Executive President and CEO, commented, “We reported strong underlying third quarter results, posting robust growth in net interest income and good performance in our high margin segments – evidence of our focus on profitability.

Notably, NII rose 14.8% year-on-year and 5.3% sequentially. Our successful focus on high-margin loan segments along with higher interest rates and progress on our strategic initiatives is driving strong margins, even amid more moderate total loan growth of 2.4%. As such, NIM gained 80 basis points YoY and 50 basis points sequentially to 5.81%.

Growth in high-margin loans – Consumer, Middle-Market and SMEs – was driven by resilient demand and the success of our commercial initiatives, despite increased competition. These represent 53.9% of our total loans, but contributed to 70% of loans’ NII in the quarter.

Strategically, we continue to boost the quality of our customer base as we tailor products and services to their needs and focus on innovation. We are also advancing in transforming our business model, with an emphasis on digitalization and mobile banking. Net new customers have grown 140%, with more than 1.9 million loyal customers, up 26% on last year. Supported by our client-centric approach, deposits rose by 15.5% YoY this quarter as we pursue our goal of bringing our share of retail deposits in line with the market average.

Overall, we remain proud of an agile and effective strategy, as we progress on key initiatives. A strong result for the bank this period was masked by weaker trading gains, which meant our bottom line did not fully reflect the progress we are making across our operations. We remain confident on the success of our strategic transformation and remain dedicated to generating sustainable returns, outstanding customer service and excellence in our value proposition.”

3Q17 EARNINGS CALL DIAL-IN INFORMATION

Date:

Thursday, October 26th, 2017

Time:

12:00 p.m. (MCT); 1:00 p.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=126526

Replay:

Starting: Thursday, October 26th, 2017 at 4:00 p.m. (US ET)

Ending: Tuesday, October 31st, 2017 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: 13671774

ABOUT GRUPO FINANCIERO SANTANDER MÉXICO, S.A.B. DE C.V. (NYSE: BSMX; BMV: SANMEX)
Grupo Financiero Santander México, S.A.B. de C.V. (Santander México), one of Mexico’s leading financial services holding companies, provides a wide range of financial and related services, including retail and commercial banking, securities brokerage, financial advisory and other related investment activities. 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 30th, 2017, Santander México had total assets of Ps.1,236 billion under Mexican Banking GAAP and more than 15 million customers. Headquartered in Mexico City, the Company operates 1,076 branches and 325 offices nationwide and has a total of 17,528 employees.  

LEGAL DISCLAIMER
Grupo Financiero 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 Grupo Financiero Santander México’s authorization to act as a sociedad controladora de un grupo financiero or Banco Santander México’s 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.
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 nominal Mexican pesos, unless otherwise indicated. Historical figures are not adjusted by inflation.

www.santander.com.mx

SOURCE Grupo Financiero Santander Mexico, S.A.B. de C.V.

Related Links

http://www.santander.com.mx

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