Mexico’s Grupo Financiero Banorte announced Tuesday that its net profit climbed 6% in the second quarter, coming in just above what analysts had predicted, thanks largely to robust demand for consumer loans and increased fee income.
The bank’s net profit for the quarter came in at 15.55 billion pesos — equivalent to approximately $888.64 million — edging past an LSEG-compiled estimate of 15.53 billion pesos. Total revenues reached 43.15 billion pesos, a 12% increase compared to the same period last year and above the forecast of 42.41 billion pesos.
On the leadership front, Banorte announced the appointment of Tomas Lozano as its new chief financial officer. Rafael Arana, who had previously held both the CFO and COO titles simultaneously, will now focus solely on his role as chief operating officer. Lozano, who has spent 19 years with Banorte and most recently oversaw investor relations, corporate development, and financial planning, will report directly to Arana, according to a company statement.
Among the financial highlights, the bank’s return on equity rose to 25.7%, an increase of 209 basis points compared to a year earlier. Consumer lending was the primary driver of loan portfolio growth, with auto and payroll loans each growing 4% from the previous quarter and credit card loans rising 2%.
Net interest income declined 5% from the prior quarter, a result of lower valuations on inflation-linked securities. However, the bank noted that adjustments to technical reserves offset this impact, leaving overall net income unaffected.
Provisions dropped 12% from the previous quarter following a regulatory change in June that adjusted how reserves are calculated for government-backed loans. Despite that quarterly decline, provisions were up 26% compared to the same quarter last year, consistent with the bank’s overall portfolio growth.
(Note: $1 equaled 17.4986 Mexican pesos at the end of June.)
