Regional B de C : The results of the Second Quarter

Table of Contents

PREPARED IN ACCORDANCE WITH THE GENERAL PROVISIONS APPLICABLE TO FINANCIAL INFORMATION OF HOLDING COMPANIES ISSUED BY THE NATIONAL BANKING AND SECURITIES COMMISSION (CNBV).

Regional, S.A.B. de C.V. presents, for informative purposes only, the internal financial statements for the period ended June 30th, 2023. 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.

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	Table of Contents
EXECUTIVE SUMMARY	4
Growth	4
Risks and Strengths	4
Profitability	4
Company Description	4
Results	5
Financial Margin	5
Non-InterestIncome	5
Operating Income	5
Loan Portfolio	5
Deposits	5
Capitalization	6
Net Income by Subsidiary	6
OPERATING RESULTS	7
Results	7
Financial Margin	7
Net Commissions and Fees	8
Insurance and FX Fees	8
Net Income by Leasing	8
Other Operating Income (Expenses)	8
Non-InterestExpenses	9
Information by Segment	9
FINANCIAL SITUATION	10
Cash and Equivalents	10
Loan Portfolio with a credit risk stage 1 and 2	10
Loan Portfolio with Credit Risk Stage 3	11
Credit Ratings	12
Deposits	12
Securities Investments	13
Repurchase Agreements	14
Financial Derivative Operations	14
Loan Securities Issued	16
Incurred and Deferred Taxes	17
Capitalization Ratio of Banco Regional S.A	18
Value at Risk (VaR)	18
Branch Network	19
Alternative Channels	19
Treasury Policy	19
Internal and External Funding and Liquidity Sources	20
Regional on the Mexican Stock Exchange (R.A)	20
Analysis Coverage of Regional′s Stock	21
INTERNAL CONTROL	22
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	Table of Contents
RELATED PARTS	24
Loans to Related Parties (Banco Regional, S.A.)	24
Loans to Related Parties (Start Banregio S.A. de C.V.)	24
INTEGRAL RISK MANAGEMENT	25
Ratings	25
CORPORATE STRUCTURE	27
Board of Directors	28
Main Officers	29
Dividend Policy	29
ACCOUNTING STANDARDS AND CRITERIA	30
Technical Note	34
FINANCIAL STATEMENTS	37
Quarterly Income Statement	37
Income Statement YTD	37
Balance Sheet: Assets and Liabilities	38
Balance Sheet: Stockholders Equity	39
Memorandum Accounts	40
Financial Ratios (CNBV criteria)	41
CERTIFICATION	42

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EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Growth

• The commercial portfolio with credit risk stage 1, which includes loans for small and medium businesses, registered $116,471 million pesos during 2Q23. The commercial portfolio with credit risk stage 2, which includes loans for small and medium businesses registered $2,482 million pesos during 2Q23.
• On the other hand, Preferred Banking portfolio, which includes mortgages, auto credits and consumer credits such as credit cards, lay up $24,754 million pesos, representing a 29% annualized gain.
• Core deposits, formed by demand deposits and savings accounts as time deposits, reached $148,966 million pesos during the Second Quarter of 2023, presenting a 20% increase compared to the same quarter last year. Time deposits had a 56% growth compared to 2Q22.
• Cost of funding in domestic currency is 6.9% at the end of 2Q23.

Risks and Strengths

• The Loans portfolio with credit risk stage 3 ratio was 1.3% at the end of 2Q23, 3 basis points lower than the same quarter last year.
• Regional has credit provisions that cover 1.8 times its non-performing loan portfolio.
• Banco Regional's capitalization ratio as of May 2023 is 14.5%.

Profitability

• The financial margin at the end of 2Q23 was $2,930 million pesos, increasing 30% versus 2Q22.
• Net Income was $1,300 at the end of 2Q23, 13% more than 2Q22.
• The Efficiency Index1 at the end of 2Q23 was 42.6%.

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 has presence in 22 federal entities through a 160 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

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