- Strong performance YoY in total loan portfolio growth, outpacing market performance, highlighting significant increase in individual loans. While loan volumes in the commercial portfolio were driven by a double-digit pick-up in middle-market and financial entities loans, despite soft SME loan demand.
- Total deposits remained relatively stable YoY. Term deposits were boosted by higher interest rate environment, while demand deposits reflected the Bank profitability focus. As a result of this estrategy, contribution of individuals in total deposits represented 38.2%, compared with 24.2% in 2016.
- Net income increased 69.1% YoY in 3Q22, mainly due to the solid increase in NII and fees, along with lower provisions for loan losses.
MEXICO CITY, Oct. 27, 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 nine-month periods ending September 30 th, 2022. Banco Santander México reported net income of Ps.8,188 million in 3Q22, representing increases of 69.1% YoY and 18.7% QoQ. On a cumulative basis, net income for 9M22 reached Ps.20,199 million, representing a 57.4% YoY increase.
HIGHLIGHTS | ||||||||||||||||||
Results (Million pesos) | 3Q22 | 2Q22 | 3Q21 | %QoQ | %YoY | 9M22 | 9M21 | %YoY | ||||||||||
Net interest income | 18,370 | 17,277 | 15,684 | 6.3 | 17.1 | 52,063 | 47,039 | 10.7 | ||||||||||
Fee and commission, net | 5,271 | 5,279 | 4,447 | (0.2) | 18.5 | 15,426 | 14,222 | 8.5 | ||||||||||
Core revenues | 23,641 | 22,556 | 20,131 | 4.8 | 17.4 | 67,489 | 61,261 | 10.2 | ||||||||||
Provisions for loan losses | 785 | 2,856 | 4,385 | (72.5) | (82.1) | 7,515 | 16,528 | (54.5) | ||||||||||
Administrative and promotional expenses | 10,400 | 10,128 | 10,750 | 2.7 | (3.3) | 30,003 | 30,599 | (1.9) | ||||||||||
Net income | 8,188 | 6,900 | 4,843 | 18.7 | 69.1 | 20,199 | 12,835 | 57.4 | ||||||||||
Net income per share1 | 1.21 | 1.02 | 0.71 | 18.7 | 68.9 | 2.98 | 1.89 | 57.4 | ||||||||||
Balance Sheet Data (Million pesos) | Sep-22 | Jun-22 | Sep-21 | %QoQ | %YoY | Sep-22 | Sep-21 | %YoY | ||||||||||
Total assets | 1,932,290 | 1,773,275 | 1,669,138 | 9.0 | 15.8 | 1,932,290 | 1,669,138 | 15.8 | ||||||||||
Total loans | 802,319 | 783,466 | 715,759 | 2.4 | 12.1 | 802,319 | 715,759 | 12.1 | ||||||||||
Deposits | 765,555 | 791,610 | 766,336 | (3.3) | (0.1) | 765,555 | 766,336 | (0.1) | ||||||||||
Shareholders' equity | 159,284 | 160,175 | 165,020 | (0.6) | (3.5) | 159,284 | 165,020 | (3.5) | ||||||||||
Key Ratios (%) | 3Q22 | 2Q22 | 3Q21 | bps QoQ | bps YoY | 9M22 | 9M21 | bps YoY | ||||||||||
Net interest margin | 4.94 | 4.70 | 4.64 | 24 | 30 | 4.75 | 4.53 | 22 | ||||||||||
Net loans to deposits ratio | 102.28 | 96.17 | 90.27 | 611 | 1,201 | 102.28 | 90.27 | 1,201 | ||||||||||
ROAE | 20.14 | 16.93 | 11.96 | 321 | 818 | 16.56 | 10.57 | 599 | ||||||||||
ROAA | 1.83 | 1.62 | 1.10 | 21 | 73 | 1.51 | 0.97 | 54 | ||||||||||
Efficiency ratio | 46.28 | 46.65 | 50.97 | (37) | (469) | 46.72 | 48.39 | (167) | ||||||||||
Capital ratio | 18.90 | 19.28 | 21.46 | (38) | (256) | 18.90 | 21.46 | (256) | ||||||||||
NPLs ratio | 2.01 | 2.56 | 2.85 | (55) | (84) | 2.01 | 2.85 | (84) | ||||||||||
Cost of Risk | 1.54 | 2.06 | 2.75 | (52) | (121) | 1.54 | 2.75 | (121) | ||||||||||
Coverage ratio | 133.58 | 121.19 | 117.56 | 1,239 | - | 133.58 | 117.56 | - | ||||||||||
Operating Data | Sep-22 | Jun-22 | Sep-21 | %QoQ | %YoY | Sep-22 | Sep-21 | %YoY | ||||||||||
Branches | 1,036 | 1,037 | 1,039 | (0.1) | (0.3) | 1,036 | 1,039 | (0.3) | ||||||||||
Branches and offices2 | 1,344 | 1,347 | 1,350 | (0.2) | (0.4) | 1,344 | 1,350 | (0.4) | ||||||||||
ATMs | 9,601 | 9,591 | 9,564 | 0.1 | 0.4 | 9,601 | 9,564 | 0.4 | ||||||||||
Customers | 20,875,006 | 20,458,686 | 19,542,270 | 2.0 | 6.8 | 20,875,006 | 19,542,270 | 6.8 | ||||||||||
Employees | 26,069 | 25,627 | 24,901 | 1.7 | 4.7 | 26,069 | 24,901 | 4.7 | ||||||||||
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. | |||||||||||||||||
Felipe García, Banco Santander México Executive President and CEO, commented: "I am pleased to tell you that the third quarter was our best quarter ever in terms of net income. In turn, this drove our highest ROE since 3Q13. These strong results were possible thanks to the solid performances of our core businesses, and to maintaining excellent asset quality throughout the loan portfolio. Total loans grew 12% year on year, with strong performance across our entire loan book. In individual loans, we had a significant increase compared to last year, mainly due to double-digit growth in credit cards, payroll, auto loans and mortgages. It is worth noting that August was our 29th consecutive month of market share gains in individual loans.
In the commercial portfolio, middle-market and government loans continue posting positive trends with double-digit growth. Conversely, SME loans are still being affected by weak economic conditions that are resulting in low credit demand.
In deposits, we remain almost flat year on year, as we continue prioritizing demand deposits from individuals and forgoing some relatively expensive corporate demand deposits. Also, given the higher rate environment, time deposits continue to increase for both individuals and commercial clients. It is also worth noting that the contribution of individuals continues to increase considerably in both term and demand deposits, and today accounts for 38% of total deposits, up from only 24% in 1Q16.
Regarding asset quality, our improved NPL ratio and cost of risk reflect positive performance related to a large corporate client that enabled us to release some provisions that we booked during the pandemic. They also reflect healthy asset quality across our entire loan book. Thus, at the end of the quarter, our NPL ratio stood at 2.01% and cost of risk at 1.54%.
In terms of profitability, we posted a 20% ROE that, as I said, was our highest return since 3Q13. This was a result of the strategies we have implemented to raise loan volumes, mainly in the individual portfolio, to substantially lower provisions, as well as more normalized capital levels. Looking ahead, we expect profitability to continue rising while maintaining a strong balance sheet, as a reflection of our solid capital ratio and liquidity position.
Going forward, the economic context will continue to challenge us, but despite the uncertainty and difficulties in the economy, we are confident that we will achieve the objectives that we have set for this year and those to come, while continuing to advance in our strategic priorities, strengthening our position in the market and maintaining our profitable growth trajectory. Although we have made good progress with our operational transformation, simplifying processes and operations, we are nevertheless mindful that we must step up the pace in working toward our goal of being a customer-focused bank."
3Q22 Earnings Call Dial-In Information
Date: | Friday, October,28th, 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=1576856&tp_key=8d3ba05966 |
Replay: | Starting: Friday, October 28th, 2022 at 1:00 p.m. (US ET) |
Ending: Friday, November 4th, 2022 at 11:59 p.m. (US ET) | |
Dial-in number: 1-844-512-2921 US & Canada; 1-412-317-6671 International & Mexico Access Code: 13733689 |
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 September 30 th, 2022, Banco Santander México had total assets of Ps.1,932 billion under Mexican Banking GAAP and more than 20.8 million customers. Headquartered in Mexico City, the Company operates 1,344 branches and offices nationwide and has a total of 26,069 employees.
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.
SOURCE Banco Santander México, S.A.
