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Banco Santander México Reports Second Quarter 2018 Net Income of Ps.5,171 Million

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Banco Santander México Reports Second Quarter 2018 Net Income of Ps.5,171 Million

- Maintaining focus on profitable growth and executing our investment plan

- Continuing with our strategy of digitalization, transforming our distribution network, building customer loyalty and cross-selling

- Net income growth mainly driven by net interest income, fees and lower provisions

- Strong loan growth across all segments, but stronger in high-margin loans

- Deposits continue to outpace loan growth leading to an improvement in deposit structure

- Maintaining focus on asset quality

PR Newswire

MEXICO CITY, July 26, 2018 /PRNewswire/ -- Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, as succesor of Grupo Financiero Santander México, S.A.B. de C.V. (NYSE:BSMX, BMV: BSMX before SANMEX)), ("Banco Santander México"), today announced financial results for the three-month and six-month periods ending June 30th, 2018.

Banco Santander México reported net income for 2Q18 of Ps.5,171 million, representing a YoY increase of 12.1% and a QoQ increase of 9.4%.

HIGHLIGHTS













Results (Million pesos)


2Q18

1Q18

2Q17


%QoQ

%YoY


6M18

6M17


%YoY

Net interest income


14,795

14,615

13,506


1.2

9.5


29,410

26,926


9.2

Fee and commission, net


4,262

4,069

4,003


4.7

6.5


8,331

7,766


7.3

Core revenues


19,057

18,684

17,509


2.0

8.8


37,741

34,692


8.8

Provisions for loan losses


4,667

4,946

5,241


(5.6)

(11.0)


9,613

10,375


(7.3)

Administrative and
promotional expenses


8,845

8,218

7,806


7.6

13.3


17,063

15,131


12.8

Net income


5,171

4,727

4,611


9.4

12.1


9,898

9,086


8.9

Net income per share1 / 3


0.76

0.70

0.06


8.6


1.46

0.11















Balance Sheet Data (Million
pesos)


2Q18

1Q18

2Q17


%QoQ

%YoY


6M18

6M17


%YoY

Total assets


1,378,611

1,288,249

1,208,211


7.0

14.1


1,378,611

1,208,211


14.1

Total loans


652,251

630,999

589,910


3.4

10.6


652,251

589,910


10.6

Deposits


698,118

665,100

617,793


5.0

13.0


698,118

617,793


13.0

Shareholders´ equity


122,520

122,132

112,866


0.3

8.6


122,520

112,866


8.6














Key Ratios (%)


2Q18

1Q18

2Q17


bps QoQ

bps YoY


6M18

6M17


bps YoY

Net interest margin


5.27%

5.52%

5.29%


(25)

(2)


5.39%

5.28%


11

Net loans to deposits ratio


90.56%

91.88%

92.22%


(132)

(166)


90.56%

92.22%


(166)

ROAE


17.33%

15.87%

16.76%


146

57


16.58%

16.51%


7

ROAA


1.53%

1.45%

1.43%


8

10


1.47%

1.41%


6

Efficiency ratio


43.46%

42.88%

41.23%


58

223


43.18%

40.76%


242

Capital ratio


15.52%

15.71%

16.17%


(19)

(65)


15.52%

16.17%


(65)

NPLs ratio


2.46%

2.43%

2.29%


3

17


2.46%

2.29%


17

Cost of Risk


2.94%

3.17%

3.55%


(23)

(61)


3.03%

3.51%


(48)

Coverage ratio


124.79%

129.48%

149.68%


(469)

(2,489)


124.79%

149.68%


(2,489)














Operating Data


2Q18  

1Q18

2Q17


%QoQ

%YoY


6M18

6M17


%YoY

Branches


1,220

1,219

1,228


0.1

(0.7)


1,220

1,228


(0.7)

Branches and offices2


1,376

1,375

1,374


0.1

0.1


1,376

1,374


0.1

ATMs


7,778

7,506

7,016


3.6

10.9


7,778

7,016


10.9

Customers


16,231,111

15,857,837

14,358,756


2.4

13.0


16,231,111

14,358,756


13.0

Employees3


18,268

17,829

14,758


2.5

23.8


18,268

14,758


23.8

Employees - Group


18,268

17,829

17,209


2.5

6.2


18,268

17,209


6.2














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.

3) 2017 information refers to Banco Santander México before corporate reorganization. As of 1Q18, all employees from the rest of subsidiaries are
already registered at the bank.

Héctor Grisi, Banco Santander México's Executive President and CEO, commented: "We have delivered another solid quarter with robust performance across the board, a pick-up in loans and deposits, higher gross operating income, and strong asset quality. 

Deposits performed particularly well, up 13% year-on-year and 5% sequentially, expanding above market growth. Our strategy to attract deposits through the successful Santander Plus program, along with our customer centric approach and digitalization initiatives to expand payroll accounts continues to deliver good results. Moreover, the expansion in deposits from individuals (both demand and term deposits) is outpacing growth in corporate deposits – a critical step to achieving our goal of increasing exposure to retail clients.

We are also pleased with the accelerated growth we have achieved in high margin loan segments, while consistently reducing cost of risk during the past three quarters and keeping healthy asset quality levels. While the implementation of our strategic initiatives is impacting our near-term efficiency, our strategic focus has still allowed us to turn in higher profitability this quarter, expanding ROE north of 16.5% in the first half of the year.

Looking ahead, the positive overall economic environment, sound macro dynamics, promising consumer trends, and lower short-term uncertainty, leads us to take a more constructive view. As one of the leading banks in the Mexican financial system, we are well positioned to significantly expand our retail customer base as we continue to leverage our strong position in SMEs, Middle-Markets, and Corporate Investment Banking.

Working towards our goal of attracting new customers and reducing attrition while becoming a market leader in profitability, we are enhancing the customer experience, developing a culture of quality across the organization, and implementing our digitalization initiatives, while also improving our infrastructure and processes. We are committed to the development of our business in Mexico, and we look forward to sharing additional updates with you as we continue to make headway on our strategic initiatives."

2Q18 EARNINGS CALL DIAL-IN INFORMATION

Date:


Friday, July 27th, 2018

Time:


10:00 a.m. (MCT); 11:00 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=130497

Replay:


Starting: Friday, July 27th, 2018 at 2:00 p.m. (US ET)



Ending: Wednesday, August 1st, 2018 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: 13681573

www.santander.com.mx

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 June 30, 2018, Banco Santander México had total assets of Ps.1,379 billion under Mexican Banking GAAP and more than 16.0 million customers. Headquartered in Mexico City, the Company operates 1,376 branches and offices nationwide and has a total of 18,268 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 View original content:http://www.prnewswire.com/news-releases/banco-santander-mexico-reports-second-quarter-2018-net-income-of-ps5-171-million-300687522.html

SOURCE Banco Santander (Mexico) S.A.

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