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    R A   MX01R0000006

REGIONAL S.A.B. DE C.V.

(R A)
  Report
End-of-day quote. End-of-day quote Mexican Stock Exchange - 10/22
117.67 MXN   -3.22%
08/13REGIONAL B DE C : Corporate Presentation 2Q21
PU
07/26REGIONAL B DE C : Press Release for the 2Q21
PU
07/26Regional S.A.B. De C.V. Reports Earnings Results for the Half Year Ended June 30, 2021
CI
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Regional B de C : Press Release for the 2Q21

07/26/2021 EDT

Regional, S.A.B. de C.V. presents, for informative purposes only, the internal financial statements for the period ended June 30, 2021. Also, and considering that the public company participated in a corporate restructuring through a merger in which it acted as a merging company with Banregio Grupo Financiero S.A.B. de C.V., who served as a merged and currently defunct company, discloses additional information regarding the financial statements of Banregio Grupo Financiero S.A.B. of CV, for the period ended March 31, 2018, in order to maintain continuity in the disclosure of financial information and for comparative and analytical purposes, as well as the pro forma financial statements in which the financial situation and the results of Regional, S.A.B. de C.V. are presented, as if the corporate restructuring referred to above had taken effect in the same quarter of the previous year

1

EXECUTIVE SUMMARY

Growth

  • The commercial portfolio, which includes loans for small and medium businesses registered $92,751 million pesos during 2Q21, showing a 1% decrease compared with 2Q20.
  • On the other hand, Preferred Banking portfolio, which includes mortgages, auto credits and consumer credits such as credit cards, lay up $16,956 million pesos, representing a 8% annualized gain.
  • Core deposits, formed by demand deposits and savings accounts as time deposits, reached $106,264 million pesos during the second quarter of 2021, presenting a 7% increase compared to the previous quarter. Demand deposits had a 31% growth compared with 2Q20.
  • Core deposits costs in national currency cost is 2.4% at the end of 2Q21.

Risks and Strengths

  • Non-performingloans ratio was 1.6% at the end of 2Q21, 6 basis points more than the same quarter last year.
  • Regional has credit provisions that cover 1.4 times its non-performing loan portfolio.
  • Banco Regional's capitalization ratio as of May 2021 is 15.1%.

Profitability

  • The financial margin at the end of 2Q21 was $1,841 million pesos, decreasing 1% versus 2Q20.
  • Net Income was $959 at the close of 2Q21, 23% more than 2Q20.
  • The Efficiency Index1 at the end of 2Q21 was 47.2%

Company Description

Regional, S.A.B de C.V. (Regional) is a Mexican public company, which principal subsidiaries, Banregio Grupo Financiero, S.A. de C.V. (BanregioGF), Banco Regional S.A. IBM (Banregio) and Start Banregio, SOFOM (Start), grant credits and leases to medium and small businesses as well to individuals as their main activity.

Banregio is present in 22 federal entities through a 156 branches network, located in: Aguascalientes, Baja California, Baja California Sur, Chihuahua, Coahuila, Ciudad de México, Durango, Estado de México, Guanajuato, Jalisco, Michoacán, Nuevo León, Puebla, Querétaro, Quintana Roo, San Luis Potosí, Sinaloa, Sonora, Tamaulipas, Veracruz, Yucatán and Zacatecas.

Regional is a public traded company (R), its main subsidiary Banco Regional was founded in 1994.

1Last 12 months

2

San Pedro Garza Garcia, N.L. July 26th, 2021. Regional, S.A.B. de C.V. (BMV: R.A) announced today its consolidated financial and operational results corresponding to 2Q21. The figures are in current million pesos and the percentage variations are compared with the same period of the previous year, unless otherwise specified.

Results

Regional, S.A.B. de C.V. generated at the end of 2Q21 a net income of $959 million pesos, achieving a 13.8% ROAE.

Financial Margin

At the end of 2Q21 the financial margin registered $1,841 million pesos, showing a 1% decrease compared to the same quarter last year.

Non-Interest Income

Non-Interest Income at the end of the Second Quarter 2021 amounted $803 million pesos. Net Income by Pure Leasing stand out registering $276 million pesos during the quarter.

Operating Income

The operating income reached $1,332 million pesos, increasing 23% compared to the same period last year.

The net income at the end of 2Q21:

Net Income

2Q20

1Q21

2Q21

2Q21 vs

6M20

6M21

6M21 vs

(Million pesos)

2Q20

1Q21

6M20

Financial Margin

1,856

1,818

1,841

(1%)

1%

3,819

3,659

(4%)

Total operating income

2,236

2,278

2,464

10%

8%

4,626

4,742

3%

Non interest expenses

(1,156)

(1,180)

(1,132)

(2%)

(4%)

(2,308)

(2,312)

0%

Operating Income

1,080

1,098

1,332

23%

21%

2,318

2,430

5%

Net income

777

804

959

23%

19%

1,664

1,763

6%

Loan Portfolio

The performing loan portfolio reached a balance of $112,633 million pesos at the end of 2Q21, increasing 3% compared to 2Q20. It stands out the growth in consumer loans increasing 21%.

The non-performing loan ratio was 1.6% at the end of 2Q21, 6 basis points higher than that of 2Q20, and Regional has a coverage ratio of provisions for credit loan losses of 1.4 times the non-performing loan portfolio.

Deposits

Core deposits reached $106,264 million pesos at the end of 2Q21, Demand deposits stand out with a 31% increase compared to the second quarter in 2020.

Capitalization

The capitalization ratio to total risky assets of Banco Regional, S.A. stood at 15.1% by May 2021.

3

Net Income by Subsidiary

During the Second Quarter of 2021, Banco Regional, S.A. generated 74% of Regional's total Net Income, Start Banregio, S.A. de C.V. which is a subsidiary of Banco Regional, generated 24% and other subsidiaries contributed 2% of the Regional's net income.

Financial Indicators

The following chart shows information in a 12 month horizon in order to prevent distortions caused by seasonality.

Financial ratios Last Twelve Months (LTM)

2Q20

3Q20

4Q20

1Q21

2Q21

2Q21 vs

2Q20

1Q21

Net Interest Margin (NIM)

(1)

6.0%

5.8%

5.7%

5.5%

5.4%

(61) b.p.

(10) b.p.

Total Loans NIM LTM

(2)

6.3%

6.1%

5.9%

5.8%

5.8%

(50) b.p.

(3) b.p.

Return on Equity (ROAE)

(3)

18.4%

16.5%

14.0%

13.2%

13.8%

(465) b.p.

58 b.p.

Return on Assets (ROAA)

(4)

2.5%

2.3%

2.0%

1.9%

2.0%

(51) b.p.

9 b.p.

Return on Assets (ROAA) of Total Loans

(5)

2.6%

2.4%

2.0%

2.0%

2.1%

(50) b.p.

15 b.p.

Efficiency Ratio

(6)

44.0%

45.2%

47.8%

48.4%

47.2%

318 b.p.

(114) b.p.

Loans to deposits

(7)

112.6%

113.9%

110.6%

110.8%

107.7%

(487) b.p.

(312) b.p.

  1. Net Interest Margin NIM: Financial Margin of last 4 quarters / Average productive assets of the last 12 months.
  2. Total Loans NIM LTM: (Financial margin of last 4 quarters (-) income by repos of last 4 quarters) / (Average productive assets of last 12 months (-) average balance of repos LTM).
  3. Return on Average Equity (ROAE): Net income of last 4 quarters / Average stockholders' equity of last 4 quarters.
  4. Return on Average Assets (ROAA): Net income of last 4 quarters / Average total assets of last 4 quarters.
  5. Return on Average Assets (ROAA) of total Loans: (Net income of last 4 quarters / (Average total assets of last 4 quarters (-) average balance of repos or last 4 quarters)).
  6. Efficiency Ratio: Administration and promotion expenses of last 4 quarters / (Financial Margin + Commissions + Trading + Other Income) of last 4 quarters.
  7. Loans to deposits: Loan portfolio at the end of the quarter / Core deposits at the end of the quarter.

4

Disclaimer

Regional SAB de CV published this content on 26 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2021 21:53:41 UTC.


ę Publicnow 2021
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Financials
Sales 2021 10 381 M 514 M 514 M
Net income 2021 3 483 M 173 M 173 M
Net Debt 2021 - - -
P/E ratio 2021 11,1x
Yield 2021 4,75%
Capitalization 38 588 M 1 911 M 1 912 M
Capi. / Sales 2021 3,72x
Capi. / Sales 2022 3,27x
Nbr of Employees 4 924
Free-Float 76,0%
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Technical analysis trends REGIONAL S.A.B. DE C.V.
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TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 11
Last Close Price 117,67 MXN
Average target price 128,33 MXN
Spread / Average Target 9,06%
EPS Revisions
Managers and Directors
Manuel Gerardo Rivero Santos Chief Executive Officer & Director
Enrique Navarro Ramirez Director-Finance & Planning
Jaime Alberto Rivero Santos Chairman
Sanjuana Herrora Galvan Administration Director
Francisco Rogelio Garza Egloff Independent Director