Grupo Financiero Banorte B de C : GFNorte´s 2Q22 Earnings Release

Financial

Results

as of June 30th, 2022

2Q22

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

	INDEX
I.	Executive Summary.........................................................................................	3
II.	Management's Discussion & Analysis..........................................................	8
	Current Events ................................................................................................................................................	18
	Bank ....................................................................................................................................................................	23
	Long Term Savings .......................................................................................................................................	28
	Brokerage .........................................................................................................................................................	31
	SOFOM and other Finance Companies ................................................................................................	32
III.	Sustainability Strategy.....................................................................................	33
IV.	General Information .....................................................................................	36
	GFNORTE's Analyst Coverage ..................................................................................................................	36
	Capital Structure ............................................................................................................................................	36
V.	Financial Statements.....................................................................................	37
	Grupo Financiero Banorte .........................................................................................................................	37
	Bank ....................................................................................................................................................................	43
	Seguros Banorte ............................................................................................................................................	49
	Information by Segments ..........................................................................................................................	52
VI.	Appendix ........................................................................................................	62
	Accounting & Regulatory Changes .......................................................................................................	62
	Notes to Financial Statements.................................................................................................................	63
	Internal Control ..............................................................................................................................................	72
	Financial Situation and Liquidity.............................................................................................................	73
	Related Parties Loans ..................................................................................................................................	73
	Loan or tax liabilities....................................................................................................................................	74
	People in Charge ...........................................................................................................................................	75
	Basis for submitting and presenting Financial Statements .........................................................	75

GFNORTEO GBOOYXNOR

Second Quarter 2022

2

I. Executive Summary

I. Executive Summary

• Effective January 2022, new accounting rules, approaching convergence to IFRS international standards, were adopted by the Mexican banking system; thus, reflecting changes in the main indicators. To facilitate comparison, 2021 financial statements were restated under these same accounting rules.
• Despite operating in a challenging economic environment, GFNorte improves profitability: Net Income +34% vs 2Q21, driven by a sound business diversification
• In the quarter, Net Income +7%, ROE +146bps to 19.6%. Bank's ROE at 27.2%.
• Outstanding sequential growth in loan book, 8% in payroll, 4% in credit card, 2% in corporate, and 4% in government.
• Asset quality and cost of risk remain solid, below expected levels.
• Efficiency ratio stable at 38%, with significant expense control, despite inflationary pressures.

Figures for 2021 in the following graphs, as well as in the remainder of the document, were restated under

new accounting standards, to facilitate comparison with 2022 information.

Second Quarter 2022

3

I. Executive Summary

GFNorte reports Net Income of Ps 11.52 billion in the second quarter of 2022, 7% higher

vs. 1Q22, and 34% higher vs. 2Q21.

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

2021 figures in this report were restated under new accounting rules, approaching convergence to IFRS international

standards, as adopted by the Mexican banking system, to facilitate comparison with 2022 figures.

The most relevant results for the period ended on June 30, 2022, were:

Despite operating in a challenging macroeconomic environment, with low GDP growth expectations, inflationary pressures, restrictive monetary policies, and an uncertain international outlook, GFNorte ended the second quarter of the year with a net result of Ps 11.52 billion, 7% higher vs. 1Q22, and 34% higher vs 2Q21. Credit demand accelerated across all products, despite a restrictive rate cycle, and maintained sound risk metrics, that continue to perform ahead of our expectations. Despite inflationary pressures, GFNorte maintained an efficient expense control. GFNorte maintains sound levels of loan loss provisions and strong capital ratios, shielding the balance sheet for the rest of 2022.

The most relevant results for the quarter and year were:

• Net Interest Income (NII) flat sequentially and 24% higher versus 2Q21, partially reflecting the reference rate hikes in 12 months. NIM of the Group stood at 5.9% in 2Q22, a slight sequential decrease, but increasing 89bps versus the same period of last year.
• Good performance remains at the bank and other subsidiaries. Bank's NIM was 33bps higher sequentially, on higher credit origination and the still-partial-effectof the reference rate increases; in the quarter, the Mexican Central Bank increased the reference rate 50bps in May, and 75bps in June 24th, reaching 7.75%. Annually, bank's NIM increased 81bps.
• Non-interestincome decreased (4%) QoQ, mainly on lower insurance premiums during the quarter, due to the seasonal effect of high insurance premiums during the first quarter of the year, as well as lower trading income results, despite higher net fees, which grew 8% vs 1Q22, and 18% vs 2Q21, on the back of electronic banking services, and higher POS transactions.
• The insurance business continues its gradual recovery; lower COVID-19-related claims, and solid premium issuance.
• Provisions were (9%) lower sequentially, and (12%) annually, on sound asset quality.
• Non-interestexpenses increased 0.5% vs 1Q22, and 7.4% in the year, despite inflationary pressures -annual inflation in June of 8.0%-, showing an efficient expense control at an institutional level. The cost to income ratio stood at 37.8% in 2Q22, from 42.5% in 2Q21.
• ROE stood at 19.6%, a substantial sequential improvement of 146bps, and 444bps annually, showing the sound business performance of the group, as well as a lower capital base derived from the 2021 dividend payment. ROA increased 9bps sequentially and 48bps annually, to 2.3%. ROE for the Bank stands out at 27.2% for the quarter, growing 631bps vs. 1Q22, and 856bps vs. 2Q21.
• Net Income for 1H22 totaled Ps 22.27 billion, 30% higher than 1H21. Net Interest Income for the first half grew 21% YoY; NIM reached 6.0%, 79bps higher vs 1H21, partially reflecting the 225bps increase in the reference rate during the first half of 2022. Non-interest income fell (9%) vs 1H21, and non-interest expenses grew 7%, below inflation, reaching an efficiency ratio of 37.8%, 429bps better vs 1H21.
• Subsidiaries contributed positively and supported the business' sound revenue diversification. In the first half of 2022, net income for the Bank grew 36%, Brokerage House 49%, Seguros Banorte 58%, with claims in a downward trend, and Annuities 4%.
• Performing loan book, in stages 1 and 2, increased 3% QoQ. During the quarter, consumer loans rose 3%, driven by payroll growing 8%; followed by credit cards 4%, auto recovering with 3% growth, and mortgages 2%. Corporate and commercial loans grew 2%, whereas government 4%, showing growing economic activity, as well as the materialization of investment projects. In the year, the performing loan book increased 8%, driven by corporate 12%, commercial 7%, and government and consumer 8%. The latter, on the strong performance of payroll and credit card portfolios, increasing 14% and 11%, respectively, while mortgages expanded 6%, and auto 3%.
• The quality of the loan portfolio continues to stand out in all segments comprising the loan book. NPL ratio remains practically unchanged QoQ, at 1.0%, and improves (29bps) annually, mainly due to consumer loans.
• Cost of risk improves (14bps) in the quarter and stands at 1.1%, given a decrease of (9%) in provisions. Coverage ratio decreased to 193.4%, from 202.5% in 1Q22.

Second Quarter 2022

4

I. Executive Summary

• Core Deposits rose 5% during the quarter: demand deposits were up 5% while time deposits were 3% higher. In the annual comparison, demand deposits grew 15%, and time deposits rose only 2%, in line with the low funding cost strategy. Overall, Core Deposits increased 11% in the year.
• Capital strength, as well as liquidity management are still top priorities for the Financial Group. The bank's total
  Capital Adequacy Ratio (CAR) reached 22.9%, and Core Equity Tier 1 (CET1) reached 13.7%, both well above regulatory minimums, moreover, these levels will help the bank to comply with TLAC (Total loss-absorbingcapacity) requirements, effective as of December 2022. Liquidity Coverage Ratio stood at 177%, while Leverage Ratio at
  11.72%.

Income Statement Highlights - GFNorte	2Q21	1Q22	2Q22	Change	1H21	1H22	Change
(Million Pesos)	1Q22	2Q21	1H21
Interest Income	46,287	55,171	60,289	9%	30%	93,678	115,460	23%
Interest Expense	24,502	28,249	33,238	18%	36%	49,116	61,487	25%
Net Interest Income	21,785	26,922	27,051	0%	24%	44,562	53,973	21%
Non Interest Income	1,774	1,476	1,413	(4%)	(20%)	3,174	2,889	(9%)
Total Income	23,559	28,398	28,464	0%	21%	47,736	56,862	19%
Non Interest Expense	10,024	10,712	10,767	1%	7%	20,081	21,479	7%
Provisions	2,766	2,668	2,434	(9%)	(12%)	5,980	5,102	(15%)
Operating Income	10,770	15,018	15,264	2%	42%	21,675	30,282	40%
Taxes	2,756	4,331	3,703	(15%)	34%	5,434	8,034	48%
Subsidiaries' Net Income	676	197	128	(35%)	(81%)	1,106	325	(71%)
Minority Interest	122	136	166	22%	35%	234	301	29%
Net Income	8,568	10,748	11,524	7%	34%	17,112	22,272	30%
Other Comprehensive Income	182	(1,830)	(2,311)	(26%)	(1371%)	(2,564)	(4,141)	(62%)
Comprehensive Income	8,872	9,054	9,378	4%	6%	14,783	18,432	25%
Balance Sheet Highlights - GFNorte	2Q21	1Q22	2Q22	Change
(Million Pesos)	1Q22	2Q21
Asset Under Management	3,101,420	3,208,835	3,128,108	(3%)	1%
Performing Loans, Stage 1 & 2 (a)	795,128	834,748	860,766	3%	8%
Past Due Loans, Stage 3 (b)	10,618	8,440	8,898	5%	(16%)
Deferred Items ( c)	1,505	1,580	1,590	1%	6%
Loan Portfolio from Insur. Subs.(d)	2,601	2,927	3,025	3%	16%
Total Loans (a+b+c+d)	809,851	847,695	874,278	3%	8%
Preventive Loan Loss Reserves	18,337	17,090	17,208	1%	(6%)
Total Loans Net	791,514	830,605	857,070	3%	8%
Total Assets	1,923,999	2,035,427	2,033,316	(0%)	6%
Total Deposits	810,082	836,028	865,191	3%	7%
Total Liabilities	1,694,677	1,791,336	1,800,068	0%	6%
Equity	229,322	244,091	233,248	(4%)	2%

Second Quarter 2022

5