Strong consumer loan demand lifts Banorte quarterly profit

• Return on equity expanded to 25.7%, up 209 basis points year-over-year, indicating improved profitability
• Consumer loan portfolio showed strong growth with auto and payroll loans each rising 4% sequentially and credit card loans up 2%
• Banorte appointed Tomas Lozano, a 19-year company veteran, as new CFO while Rafael Arana retains COO role

Summary: Banorte Q2 2025 Earnings Beat Estimates on Strong Consumer Lending

Key Financial Results:

Grupo Financiero Banorte, Mexico's leading financial group, reported second-quarter net profit of 15.55 billion pesos ($888.64 million), representing a 6% year-over-year increase and slightly exceeding analyst estimates of 15.53 billion pesos. Total revenues reached 43.15 billion pesos, up 12% year-over-year and surpassing the forecasted 42.41 billion pesos.

Performance Drivers:

Strong consumer loan demand drove portfolio expansion, with auto and payroll loans each growing 4% quarter-over-quarter and credit card loans increasing 2%. Return on equity improved significantly to 25.7%, expanding 209 basis points year-over-year. Fee income also contributed positively to the quarterly performance.

Challenges:

Net interest income declined 5% from the previous quarter due to lower valuations of inflation-linked securities, though management stated this impact was offset by technical reserve adjustments, leaving net income unaffected.

Provisions and Credit Quality:

Loan loss provisions fell 12% quarter-over-quarter following a June regulatory adjustment to reserve calculations for government-backed loans. However, provisions rose 26% year-over-year, consistent with overall portfolio growth.

Leadership Changes:

Banorte appointed Tomas Lozano as Chief Financial Officer. Lozano, a 19-year company veteran who previously led investor relations, corporate development, and financial planning, will report to Rafael Arana, who retains his position as Chief Operating Officer after previously holding both CFO and COO roles.

Market Implications:

The results demonstrate resilient consumer credit demand in Mexico despite economic headwinds, positioning Banorte favorably in the competitive banking sector.