Grupo Financiero Banorte B de C : 4Q21

4Q21

Financial

Results

as of December 31st, 2021

Contact information: [e-mail] investors.banorte.com [phone]

GFNORTEO GBOOYXNOR

INDEX

I.	Executive Summary.........................................................................................	3
II.	Management's Discussion & Analysis..........................................................	8
	Current Events ..........................................................................................................................	18
	Bank...........................................................................................................................................	19
	Long Term Savings ..................................................................................................................	24
	Brokerage .................................................................................................................................	27
	SOFOM and other Finance Companies .................................................................................	28
III.	General Information .....................................................................................	29
	GFNORTE's Analyst Coverage ................................................................................................	29
	Capital Structure ......................................................................................................................	29
IV.	Financial Statements.....................................................................................	30
	Grupo Financiero Banorte.......................................................................................................	30
	Bank...........................................................................................................................................	36
	Seguros Banorte ......................................................................................................................	42
	Information by Segments .......................................................................................................	45
V.	Appendix ........................................................................................................	50
	Accounting & Regulatory Changes .......................................................................................	50
	Notes to Financial Statements ...............................................................................................	54
	Internal Control........................................................................................................................	63
	Financial Situation and Liquidity............................................................................................	64
	Related Parties Loans ..............................................................................................................	64
	Loan or tax liabilities ...............................................................................................................	65
	People in Charge .....................................................................................................................	66
	Basis for submitting and presenting Financial Statements ................................................	66

Fourth Quarter 2021

2

I. Executive Summary

I. Executive Summary

• 6% sequential growth in credit cards, and 3% in commercial and corporate.
• Asset quality and cost of risk with significant improvements, below expected levels.
• Net fees were up 16% QoQ and 6% YoY on better electronic banking services dynamics.
• NIM of the Bank had a 21bps sequential expansion to 6.3%; stable in YoY.
• Non-Interestexpenses grew 7% in the year, below inflation.
• In the year, ROE for the Group stood at 15.3%, whereas for the Bank it recovered to 18.7%.

	Performing Loans
850,000			802,138		820,833
800,000	762,642
750,000
700,000
650,000	4Q19	2Q20	4Q20	2Q21	4Q21

		Past Due Loan Ratio
2.0%	1.7%
1.5%			1.1%	1.2%
				1.0%
1.0%
0.5%	4Q19	2Q20	4Q20	2Q21	4Q21

	4,230	Net Fees
				4,003
4,000
			3,599
3,500				3,457
3,000
2,500	4Q19	2Q20	4Q20	2Q21	4Q21

	Non-Interest Expense
15,000					13,188
13,000			11,612
11,000	10,572			11,017
9,000
7,000	4Q19	2Q20	4Q20	2Q21	4Q21

		Cost of Risk
4.5%
3.5%			2.97%
2.5%	1.98%			1.30%
1.5%					1.32%
0.5%	4Q19	2Q20	4Q20	2Q21	4Q21

NIM (Bank)

7.0%	6.6%

6.5%	6.3%
6.1%
6.0%	5.8%

5.5%
5.0%	4Q19	2Q20	4Q20	2Q21	4Q21

		Damages - Claims
6,000		(Insurance)
5,000			4,119		3,901
4,000	3,181			3,570
3,000
2,000
1,000	4Q19	2Q20	4Q20	2Q21	4Q21

	2.4%	ROA (Bank)
2.5%			2.2%2.2%
2.0%
1.5%			1.2%
1.0%	4Q19	2Q20	4Q20	2Q21	4Q21

ROE (Bank) 23.9%

25.0%	19.1%
	19.3%
20.0%

15.0%

10.0%

11.8%

5.0%	4Q19	2Q20	4Q20	2Q21	4Q21

	19.0%		ROE
20.0%
				15.5%
				15.4%
15.0%
			10.9%
10.0%
5.0%	4Q19	2Q20	4Q20	2Q21	4Q21

		Net Income
10,000	9,010				9,061
			8,874
9,000
8,000
7,000			5,966
6,000
5,000	4Q19	2Q20	4Q20	2Q21	4Q21

Capital Adequacy Ratio (CAR) 24.7%

20.2% 21.7% 21.9% 21.8%

13.9%	15.0%	15.2%	14.8%		15.3%
4Q20	1Q21		2Q21	3Q21	4Q21
		CET1		Tier1			Tier 2

• 2Q20 and 4Q20 results reflect the generation of anticipated provisions and write-offs derived from the COVID-19 contingency.

Fourth Quarter 2021

3

I. Executive Summary

Sustainability Strategy

Updates

Environmental	Governance
	•	DSJI MILA Index- Constituent for the fifth consecutive year

• CDP Climate Change Questionnaire - Score B

		•	Leading Institution in Corporate Governance (ALAS20) - 2	nd	place for Afore
•	Recycling Program - Environmental Volunteering in Mexico City		XXI, 3	rd	place for Grupo Financiero Banorte
•	Waste Management Training - 46 employees trained	•	EAV certification, specialized in Personal Data Protection
		•	Virtual assistant MAYA - Award for one of the 9 best innovations worldwide
			(FEMA)
		•	Customer satisfaction - NPS 68.0pts (+1.2% vs 3Q21, and +4.9% vs 4Q20)

Social

• "Best Employer Brand" Award (LinkedIn)
• Banorte Sustainability Week in partnership with Tecnológico de Monterrey
• Plastic-lesscash withdrawal in alliance with 7-Eleven
• Mil sueños por cumplir (scholarship program) - Program culmination

Sustainable Finance

• Leading Institution in Sustainability Research (ALAS20) -1st place award Afore XXI
• Leading Institution in Responsible Investment (ALAS20) -2nd place award Afore XXI
• PACTA methodology - Climate scenario analysis in corporate loan portfolios
• Risks report on nature, in partnership with WWF - Launch
• Social and environmental risks training - 1,295 employees trained from the Risk, Credit, and Business Areas

Sustainable Finance

Sustainable finance loan book evaluation

% of wholesale banking loan book

15.0		12.0
12.5
9.8	0.319
10.0		0.323
	0.815		7.0
7.5			0.650
		5.0
			0.651
5.0
			0.509
2.5
0.0
3Q20	4Q20	3Q21	4Q21
	Other	Sustainable loan book	Climate-related loan book

Loan book evaluation under Equator Principles

Number of analyzed projects

10			9
8
6	6
4				3	3
2				1	1
0
3Q20	4Q20	3Q21	4Q21
		Low impact	Medium impact	High impact

Responsible investments - Mutual funds

%, share of total analyzed AUM

100%
80%
60%					99%
100%			92%	92%
40%
20%		28%		0.45%	0.49%	0.38%
0%
Mandates	Equity	Fixed Income	Money	Cash
					markets
	Sustainable portfolio	Analyzed portfolio

Responsible investments - Pension funds (Afore)

%, share of total analyzed AUM by instrument

100%
80%
60%	100%	89%	76%	100%	100%	96%	99%	90%
40%
20%			24%		52%
0%
	Sustainable portfolio	AnalizedAnalyzedportfolio

Fourth Quarter 2021

4

I. Executive Summary

GFNorte reports Net Income of Ps 35.05 billion for 2021, 15% higher vs. 2020.

(BMV: GFNORTEO; OTCQX: GBOOY; Latibex: XNOR)

The most relevant results for the period ended on December 31st, 2021, were:

At the end of the fourth quarter, GFNorte maintained a clear recovery trend, benefiting from the increasing economic activity in the country and the hiking cycle in the reference rates, which translates into a positive credit demand, higher fee transactionality, and a more robust financial margin. Asset quality exceeded expectations throughout the year, closing the fourth quarter below pre-pandemic levels. Anticipating inflationary pressures, non-interest expenses had a relevant increase during the quarter, mainly due to higher personnel expenses derived from operational restructures, the accounting reclassification effect of fees paid to external sales forces into the expense line, as well as higher Employee Profit Sharing, derived from the labor reform.

Unfortunately, the emergence of the omicron variant in the last months of the year, has generated a more uncertain outlook, and continues to affect the performance of the insurance business, which maintains high levels of claims in the life and medical expenses portfolios.

All the aforementioned factors contributed to GFNorte's 2% net income growth, reaching Ps 9.06bn in the quarter, whereas for the year, it grew 15% ending at Ps 35.05bn. GFNorte maintains sound levels of loan loss provisions and sound capital ratios, shielding the balance sheet for 2022.

The most relevant results for the quarter and year were:

• Net Interest Income (NII) grew 2% sequentially and 4% versus 4Q20, in line with loan portfolio growth and the reference rate increases in the year. NIM of the Group was stable QoQ at 4.9%, and increased 6bps versus the same period of last year.
• With accumulated figures, Net Interest Income declined (3%), hence, reducing Group's NIM (45bps) to 4.8% from 5.3%, on the back of high claims in the Insurance business, and lower rates in the market, with average TIIE rate dropping (111bps) in the period. Good performance remains at the bank and other subsidiaries. Bank's NIM stands out, increasing 21bps sequentially and 52bps versus 4Q20 to reach 6.3%; during the year, the ratio was stable at 5.9%, underpinned by the strength and diversification of the loan portfolio along with 13% growth in non- interest-bearing demand deposits, together with a (20%) decline in interest-bearing demand deposits, and its effect in the cost of funds.
• Subsidiaries contributed positively to the business performance and supported the group's sound revenue diversification. In the year, Net Income for the Bank grew 28%, Brokerage House 14%, and Annuities 29%. Seguros Banorte posted a (45%) reduction; nevertheless, claims for the quarter declined (5%) versus 4Q20.
• Total income before provisions grew 6% sequentially and reduced (3%) in the year. Non-Interest Income grew 22% QoQ and remained stable in the year. Positive net fees dynamics, increasing 16% QoQ and 6% YoY. Non- Interest Expenses grew 20% sequentially and 7% annually -below inflation-,on the early recognition of extraordinary personnel expenses, the accounting reclassification of fees paid into the expense line, as well as adjustments in the Employee Profit Sharing item, derived from the labor reform, reaching a cost to income ratio of 45.4% in 2021.
• ROE for the year was up 53bps to 15.3%, still affected by the capital accumulation on undistributed dividends; whereas ROA increased 18bps to 1.9%. ROE for the Bank was 19.1% for the quarter and 18.7% for the year.
• Performing loan book increased 1% QoQ. During the quarter, consumer loans rose 2%, with a significant 6% growth in credit cards; mortgages and payroll were up 1%. Commercial and corporate portfolios grew 3% due to a more pronounced economic recovery at the end of the year, as anticipated, while government loans declined (4%) sequentially on significant prepayments. In the year, performing loan book expanded 2%, showing good consumer dynamics, which grew 6%, boosted by 7% growth in mortgages and credit cards, followed by 6% in payroll. Commercial book rose 5%; whereas corporate and government loans decreased (2%) and (4%), respectively, driven by prepayments at the end of the year.
• The quality of the loan portfolio continues to stand out in all segments comprising the loan book. Sequential improvement in non-performingloans of (15%) or Ps 1.45bn. Compared to 2020, non-performingloans decreased (5%) mainly explained by the credit card and corporate portfolios. NPL ratio for the quarter stood at 1.0%, from 1.2% in 3Q21.
• Stable cost of risk at 1.3% versus 3Q21, with 3% higher provisions quarterly, but lower NPLs. For 2021, the cost of risk was better than expected at 1.4% from 2.8% in 2020, well below the estimated range for the year. The Coverage ratio increased to 191% from 174% in 3Q21.

Fourth Quarter 2021

5