MEXICO CITY, Jan 17 (Reuters) - Mexico's Grupo Financiero Banorte reported on Wednesday a 13% increase in its fourth-quarter net profit, driven by loan growth, a decline in interest expense and lower funding costs.

Net profit for the financial group stood at 13.04 billion pesos ($768.8 million)

Revenue for the group, which owns one of the country's largest banks and pension funds, totaled 34.89 billion pesos in the quarter, up 10% from a year earlier.

Return on equity decreased 79 basis points from the year-ago quarter to 20.9%.

Net interest income (NII), the difference between what banks earn on loans and dole out in deposits, grew 9% year-over-year.

The financial entity announced late last year it plans to

launch its digital bank

in January after receiving approval from the country's banking regulator.

($1= 16.9666 Mexican pesos at December-end) (Reporting by Valentine Hilaire and Marion Giraldo; Editing by Sarah Morland)