Long Term Savings

Performance in 2014

Insurance

We offer protection and foresight in auto, damage, health and life insurances, through Insurance Banking, that provides insurance solutions to the financial group’s customers through its various channels of distribution, as well as through the traditional channel of agents and brokers. We participate in tenders to federal, state and municipal levels in the same manner.

Revenues and results for the year were positive, which has allowed us to steadily increase our contribution to GFNorte’s profits.

Afore

Afore Banorte is the administrator of the largest retirement fund in Mexico and the second largest in Latin America. We currently manage 25 centavos of each peso for workers in the country, which gives us advantages in terms of scale: lower operating costs and the potential to have robust areas of operation, investment and service, which translates into greater benefits for our customers, such as lower fees than private companies that make up the industry.

The Afore represents approximately one third of the assets managed by the financial group. We seek to invest in funds that bring companies with sound corporate governance practices together; in accordance with regulations, we manage four savings funds, which vary according to the wage earner’s age. Additionally we encourage voluntary savings contributions so that they can obtain a better pension. We are leaders in the country’s financial market in terms of amount of funds.

Annuities

In the annuities sector, we have positioned ourselves in second place in terms of premiums, with a 37% market share and who created the most value in the industry.

By implementing projects such as the electronic survival confirmation, we improve our customers’ experience and increase our competitive advantage.

Long Term Savings Prospects in 2015

The insurance company has a great potential to increase business in all of our loan and deposit products. A great advance was having included the option of insurance in the contracts. Another important area of opportunity is insurance not associated with deposit or loan products and that are independently available in our network: auto, home, life, accident and health insurance, and are sold through our ATMs as well.

With regards to the Afore, the industry’s challenge in general is to operate with more commercial rationality in the transferring of accounts that benefit workers and institutions. In terms of profitability, focus should be put on the size of the funds under management. It is also important to continue to increase voluntary contributions in which we are already leaders.

We will continue lead in the creation of value in annuities, increasing operational efficiency while improving our offer of value through better service and greater benefits to retirees.

Leasing and Factoring

Performance in 2014

In 2014, Leasing and Factoring posted profits of Ps 700 million, a 17% increase over the previous year, ROE was 20%; the PDL Ratio was under 0.9% and the Coverage Ratio rose to 170.5%.

Leasing

Despite the difficult economic environment, we grew significantly in the area of leasing; especially in pure leasing which grew by 6%, as a result of changes in tax regulations as well as market norms – we have begun to comprehend the benefits offered. It is important to highlight that this last factor is a result of our competitive advantages such as: rapid and immediate responses, the experience of our consultants, knowledge of our customers’ needs and the ability to create tailored leasing solutions. Some examples are leasing programs for fleets and buildings, enabling us to realize operations with leading international companies, who, despite having been referred to other lending institutions, opted for our services as a result of our service, knowledge and speed.

This has resulted in our position as the market leader according to the Asociación Mexicana de Sociedades Financieras de Arrendamiento, Crédito y Factoraje (AMSOFAC).

Factoring

Our own factoring portal through BxI has allowed us to service the electronic factoring market in an agile and efficient manner with an advantage over the competition in terms of response times, as operations are carried out in real time with immediate results.

Warehouse

We have a professional company through which we manage warehouses and issue certificates of guarantee for loans; we also offer sales of inventories.

Leasing and Factoring Prospects in 2015

Although we anticipate a year of slow growth and strong competition, we will seek to increase our portfolio by 18.9% and maintain a ROE of 13.5%. Given the new taxation base in 2015, we will complement our leasing portfolio with fleet management, which will give us a competitive advantage in the market. We will also seek to increase placement of our factoring product with more of Grupo Financiero Banorte’s clients.

International Businesses

Performance in 2014

Our subsidiary in the USA, Inter National Bank registered positive results with a 16% growth in its loan portfolio while maintaining quality. Growth was also registered in net income due to the operating leverage and a reduction in non-interest expenses. Capital levels remain robust.

Our international payments platform, Uniteller, had an unprecedented year with growths of 163% in profits and over 65% in transactions compared to last year – the more than 8 million transactions translates into approximately14% of processed remittances from the United States to Mexico. Our Uniteller network consists of 30,000 points of payment, operating in 42 states of the US and in 17 countries, as well as in Mexico and the United States. In addition, we have strengthened our position as a leading company in the sector through new agreements with companies such as Western Union, Wells Fargo and Farmacias Guadalajara.

Banorte - Ixe Securities, our New York subsidiary, continues to offer a range of investment alternatives mainly for Casa de Bolsa Banorte – Ixe´s patrimonial banking customer base in Mexico. 2014 was a year of challenges given the United States’ regulatory environment; one of our main achievements was to change the operating model that undoubtedly will result in better customer service from our specialists.

In Mexico, for customers who have need of international services and foreign trade, we have implemented a new business model that includes customer service with specialized executives as one of its main features. This will allow us to better meet the needs of customers and importantly increase our foreign trade business. Through relationships established in the last couple of years with foreign financial institutions, we have significantly increased the flow of referred business. The International Desk initiative has already registered more than 100 recently established foreign companies in Mexico.

International Business Prospects in 2015

Our objective in the United States is to increase market participation by taking care of asset quality and the regulatory environment. Likewise in 2015 we will be launching a platform for sending remittances via the internet and a prepaid card, which reduces the cost of remittances, making them more accessible to migrant workers in the United States and their families in Mexico.

In Mexico, our goal is to expand the range of products in financing foreign trade, as well as to steadily increase our portfolio of customers and reference programs attended by the International Desk.