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Investing.com -- Grupo Financiero Banorte (BMV:GFNORTEO) on Wednesday reported second-quarter 2025 net income of MXN14.6 billion, up 4% year-over-year but down 4% quarter-over-quarter, falling 5% below consensus expectations.
The Mexican financial group’s earnings quality was affected by high trading gains and lower loan loss charges relative to non-performing loan formation. Despite these challenges, management maintained its full-year 2025 guidance unchanged.
Banorte’s adjusted return on equity reached 21.1% in Q2, flat year-over-year and similar to the 21% reported in Q1. At the bank level, ROE stood at 30%, while the insurance business normalized after positive seasonality in the first quarter.
The company reported consolidated net interest income up 12.1% year-over-year, supported by average loan growth of 10.7%. Fees increased by 2.7% year-over-year, while operating expenses rose 15% compared to the same period last year.
Loan growth reached 8% year-over-year, or 12.6% excluding government loans. Auto loans, credit cards, and corporate lending continued to show double-digit growth. The company reaffirmed its loan growth guidance of 8-11% for the full year 2025.
Credit quality showed some deterioration, with Stage 3 loan formation reaching 2.45% of loans, the highest level in several quarters. Management attributed this to isolated cases in the commercial book. The cost of risk stood at 1.73%, below the full-year guidance range of 1.8-2.0%. Provisioning levels fell from 188% in March 2025 to 159% in June 2025.
Banorte’s CET1 capital ratio at the bank subsidiary level decreased by 44 basis points sequentially to 14%.
The company maintained its full-year 2025 guidance, projecting net income between MXN59.6 billion and MXN62.1 billion. To meet the low end of this range, Banorte would need to generate MXN29.7 billion in net income during the second half of the year, compared to MXN29.9 billion in the first half.
Analysts believe this target remains achievable, contingent on slower operating expense growth, recovery in fees, and stabilization in commercial delinquencies.
Current Bloomberg consensus estimates place Banorte’s full-year net income at MXN59.3 billion, slightly below the company’s guidance range.
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