Tight cost control helps Banorte's Q2 bottom line
Grupo Financiero Banorte's 2Q16 consolidated net income totaled 4.6bn Mexican pesos (US$248mn), increasing 4% over the previous quarter and 16% over the same quarter of 2015.
The result was in line with expectations of analysts such as Deutsche Bank.
Banorte's Q2 results "benefited from tight cost control and a sharp increase in other income," according to Deutsche Bank.
This allowed the group to boost earnings despite a 7% drop in second quarter net interest income, to 12.7bn pesos.
The group's performing loans reached 544bn pesos at the end of June, up 2% and 12% quarter-on-quarter and year-on-year, respectively.
At 17%, corporate lending saw the fastest growth y-o-y, while consumer and mortgage loans both increased by 13%.
The past-due loan ratio deteriorated during Q2 to 2.3% from 2.1%, but it remained significantly lower than the 2.8% recorded at end-June 2015.
Net income from Banorte's insurance business dropped 40% over the previous quarter and 9% y-o-y, reflecting a 59% and 3% decline in premium income in the same periods.
The group's banking unit - Banco Mercantil del Norte - was by far the largest Q2 earnings contributor with 71% of the consolidated net income. Next was insurance subsidiary Seguros Banorte (11.8%), followed by pension fund manager Afore XXI Banorte (6.6%) and stock brokerage Casa de Bolsa Banorte (3.5%).
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