REGIONAL S.A.B. DE C.V. Table of Contents | |
Loan Portfolio with Credit Risk Stage 3 | 10 |
Credit Ratings | 11 |
Deposits | 11 |
Securities Investments | 12 |
Repurchase Agreements | 13 |
Financial Derivative Operations | 13 |
Loan Securities Issued | 15 |
Incurred and Deferred Taxes | 16 |
Capitalization Ratio of Banco Regional S.A. | 17 |
Value at Risk (VaR) | 17 |
Branch Network | 18 |
Alternative Channels | 18 |
Treasury Policy | 18 |
Internal and External Funding and Liquidity Sources | 19 |
Regional on the Mexican Stock Exchange (R.A) | 19 |
Analysis Coverage of Regional′s Stock | 20 |
INTERNAL CONTROL | 21 |
1 |
Table of Contents | |
RELATED PARTS | 23 |
Loans to Related Parties (Banco Regional, S.A.) | 23 |
Loans to Related Parties (Start Banregio S.A. de C.V.) | 23 |
INTEGRAL RISK MANAGEMENT | 24 |
Ratings | 24 |
CORPORATE STRUCTURE | 26 |
Board of Directors | 27 |
Main Officers | 28 |
Dividend Policy | 28 |
ACCOUNTING STANDARDS AND CRITERIA | 29 |
Technical Note | 33 |
FINANCIAL STATEMENTS | 36 |
Quarterly Income Statement | 36 |
Income Statement YTD | 36 |
Balance Sheet: Assets and Liabilities | 37 |
Balance Sheet: Stockholders Equity | 38 |
Memorandum Accounts | 39 |
Financial Ratios (CNBV criteria) | 40 |
CERTIFICATION | 41 |
2
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Growth
- The commercial portfolio with credit risk stage 1, which includes loans for small and medium businesses, registered $121,610 million pesos during 3Q23. The commercial portfolio with credit risk stage 2, which includes loans for small and medium businesses registered $2,583 million pesos during 3Q23.
- On the other hand, Preferred Banking portfolio, which includes mortgages, auto credits and consumer credits such as credit cards, lay up $25,556 million pesos, representing a 25% annualized gain.
- Core deposits, formed by demand deposits and savings accounts as time deposits, reached $151,719 million pesos during the Third Quarter of 2023, presenting a 21% increase compared to the same quarter last year. Time deposits had a 51% growth compared to 3Q22.
- Cost of funding in domestic currency is 6.9% at the end of 3Q23.
Risks and Strengths
- The Loans portfolio with credit risk stage 3 ratio was 1.4% at the end of 3Q23, 5 basis points higher than the same quarter last year.
- Regional has credit provisions that cover 1.7 times its non-performing loan portfolio.
- Banco Regional's capitalization ratio as of August 2023 is 15.2%.
Profitability
- The financial margin at the end of 3Q23 was $3,258 million pesos, increasing 29% versus 3Q22.
- Net Income was $1,563 at the end of 3Q23, 20% more than 3Q22.
- The Efficiency Index1 at the end of 3Q23 was 41.7%.
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 161 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
3
EXECUTIVE SUMMARY
San Pedro Garza Garcia, N.L. October 23rd, 2023. Regional, S.A.B. de C.V. (BMV: R.A) announced today its consolidated financial and operational results corresponding to 3Q23. 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 3Q23 a net income of $1,563 million pesos, achieving a 20.9% ROAE.
Financial Margin
At the end of 3Q23 the financial margin registered $3,258 million pesos, showing a 29% increase compared to the same quarter last year.
Non-Interest Income
Non-Interest Income at the end of the Third Quarter 2023 amounted $852 million pesos. Income from Commissions, which generated $437 million pesos, stands out with an increase of 15% over the same period of the previous year.
Operating Income
The operating income reached $2,071 million pesos, increasing 22% compared to the same period last year.
The net income at the end of 3Q23:
Loan Portfolio
The loan portfolio with credit risk stage 1 reached a balance of $146,308 million pesos at the end of 3Q23, increasing 19% compared to the same quarter last year. It stands out the growth in consumer loans increasing 40%.
The loan portfolio with credit risk stage 2 reached a balance of $3,441, million pesos at the end of 3Q23, with a growth of 82% compared to the same period last year.
The non-performing loan ratio was 1.4% at the end of 3Q23, 5 basis points higher than that of 3Q22, and Regional has a coverage ratio of provisions for credit loan losses of 1.7 times the non-performing loan portfolio.
Deposits
Core deposits reached $151,719 million pesos at the end of 3Q23 with an increase of 21% compared to the same quarter last year. Time deposits stand out with a 51% increase compared to the Third Quarter in 2022, reaching a balance of $81,019 million pesos.
Capitalization
The capitalization ratio to total risky assets of Banco Regional, S.A. stood at 15.2% by August 2023.
4
EXECUTIVE SUMMARY
Net Income by Subsidiary
During the Third Quarter of 2023, Banco Regional, S.A. generated 84% of Regional's total Net Income, while Start Banregio, S.A. de C.V. which is a subsidiary of Banco Regional, generated 16% of Regional's net income.
Financial Indicators
The following chart shows information in a 12 month horizon in order to prevent distortions caused by seasonality.
- Net Interest Margin NIM: Financial Margin of last 4 quarters / Average productive assets of the last 12 months.
- Total Loans NIM LTM: (Financial margin of last 4 quarters adjusted by repos, cash equivalents, derivatives and margin calls) / (Average Total Loan with credit risk stage 1 + Total Loan with credit risk stage 2 of last 12 months).
- Return on Average Equity (ROAE): Net income of last 4 quarters / Average stockholders' equity of last 4 quarters.
- Return on Average Assets (ROAA): Net income of last 4 quarters / Average total assets of last 4 quarters.
- 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)).
- Efficiency Ratio: Administration and promotion expenses of last 4 quarters / (Financial Margin + Commissions + Trading + Other Income) of last 4 quarters.
- Loans to deposits: Loan portfolio at the end of the quarter / Core deposits at the end of the quarter.
5
OPERATING RESULTS
OPERATING RESULTS
Results
Regional, S.A.B. de C.V., registered a net income of $1,563 million pesos at the end of September 2023, increasing 20% compared to the 3Q22, achieving a 20.9% ROAE.
The quarterly operating income reached $2,071 million pesos by the end of the Third Quarter 2023 showing an increase of 22% in comparison to 3Q22.
Financial Margin
Financial margin in 3Q23 reached $3,258 million pesos, 29% higher than the same quarter last year. The interest income registered a growth of 41%, reaching $7,630 million pesos at the end of 3Q23, while interest expenses reached $4,372 million pesos showing a 50% increase.
The adjusted financial margin for possible loan losses was of $2,922 million pesos in 3Q23, which represents a variation of 26% compared to 3Q22.
Provisions for possible loan losses during 3Q23 amounted to $336 million pesos.
Financial margin | 3Q22 | 2Q23 | 3Q23 | 3Q23 vs | ||
(Million pes os ) | 3Q22 | 2Q23 | ||||
Interest income | 5,428 | 7,094 | 7,630 | 41% | 8% | |
Interest expense | (2,906) | (4,164) | (4,372) | 50% | 5% | |
Financial margin | 2,522 | 2,930 | 3,258 | 29% | 11% | |
Net provision for possible loan losses | (207) | (339) | (336) | 62% | (1% ) | |
Adjusted financial margin for possible loan losses | 2,315 | 2,591 | 2,922 | 26% | 13% | |
Average productive assets | 170,326 | 211,207 | 219,328 | 29% | 4% | |
Net Interest Margin (NIM) | 5.9% | 5.5% | 5.9% | 2 b.p. | 39 b.p. |
9M22 | 9M23 | 9M23 vs | |
9M22 | |||
14,147 | 21,254 | 50% | |
(7,279) | (12,245) | 68% | |
6,868 | 9,009 | 31% | |
(224) | (965) | +100% | |
6,644 | 8,044 | 21% | |
165,054 | 186,173 | 13% | |
5.5% | 6.5% | 90 b.p. |
6
OPERATING RESULTS
Net Commissions and Fees
Net commissions and fees reached a total of $437 million pesos in 3Q23, showing a 15% increase in respect to 3Q22.
Cards and Merchant Fees represent 49% of the total net commissions and fees and constitute the main source of income in this account.
Insurance and FX Fees
The result for insurance and FX Fees for the Third Quarter of 2023 reached a total of $334 million pesos, an increase of 16% compared to the same period of the previous year.
Net Income by Leasing
Net Income by pure leasing amounted a total of $81 million pesos in 3Q23, which represents a contraction of (65%) in respect to 3Q22. The decrease in this account is due to the reclassification of lease income, which is now recognized in interest income.
Other Operating Income (Expenses)
During 3Q23 a loss of $248 million pesos was recorded for other expenses, presenting an increase of 14% respect 3Q22.
Other Income (expense) operations | 3Q22 | 2Q23 | 3Q23 | 3Q23 vs | 9M22 | 9M23 | 9M23 vs | |
(Million pes os ) | 3Q22 | 2Q23 | 9M22 | |||||
Asset S ales | 83 | 39 | 30 | (63% ) | (22% ) | 136 | 82 | (40% ) |
Credit Operation | (116) | (91) | (97) | (16% ) | 7% | (238) | (273) | 15% |
Contributions to IPAB | (130) | (147) | (157) | 20% | 7% | (376) | (438) | 16% |
Other Income / Expenses | (53) | 7 | (24) | (55% ) | (+100% ) | (151) | (42) | (72% ) |
Other income (expense) operations | (217) | (191) | (248) | 14% | 30% | (628) | (671) | 7% |
7
OPERATING RESULTS
Non-Interest Expenses
Non-Interest Expenses by the end of 3Q23 were $1,455 million pesos, with a variation of 11% compared to 3Q22.
Information by Segment
In order to carry out the segmentation of the results for Regional, different business areas were subdivided into identifiable segments based on types of products and customer profile.
Note: The figures presented are integrated with a different classification from the one used for the formulation of the financial statements, as they are grouped by combining accounting and operational records.
8
FINANCIAL SITUATION
FINANCIAL SITUATION
Cash and Equivalents
At the end of 3Q23, Regional held a cash deposit balance of $11,322 million pesos, which presented a variation of (12%) versus the balance registered on the same period last year.
Out of the total cash deposits in 3Q23, $1,926 million pesos are restricted and held in the Monetary Regulation Deposit (constituted in Banco de México) which yield Banxico's target rate.
Loan Portfolio with a credit risk stage 1 and 2
The commercial loan portfolio with credit risk stage 1 increased 18% at the close of 3Q23 with a balance of $121,610 million pesos. Noteworthy, is the 40% increase in the consumer portfolio compared to 3Q22. Business loans, which represent Regional's core business, stand at $119,374 million pesos, which presents a 19% growth at the end of 3Q23.
The commercial loan portfolio with credit risk stage 2 had a balance of $2,583 million pesos at the end of 3Q23, with an increase of 102% compared to the same quarter of the previous year.
Net loan portfolio | 3Q22 | 2Q23 | 3Q23 | 3Q23 vs | ||
(Million pes os ) | 3Q22 | 2Q23 | ||||
Business loans | 100,664 | 116,471 | 119,374 | 19% | 2% | |
Financial entities | 2,056 | 2,207 | 2,133 | 4% | (3% ) | |
Government | 37 | 69 | 103 | +100% | 49% | |
Commercial portfolio with credit risk stage 1 | 102,757 | 118,747 | 121,610 | 18% | 2% | |
Mortgage | 11,809 | 13,210 | 13,520 | 14% | 2% | |
Consumer | 7,973 | 10,820 | 11,178 | 40% | 3% | |
Total loan with credit risk stage 1 | 122,539 | 142,777 | 146,308 | 19% | 2% | |
Business loans | 1,276 | 2,482 | 2,583 | +100% | 4% | |
Financial entities | - | 1 | - | 0% | (100% ) | |
Government | - | 2 | - | 0% | (100% ) | |
Commercial portfolio with credit risk stage 2 | 1,276 | 2,485 | 2,583 | +100% | 4% | |
Mortgage | 446 | 468 | 536 | 20% | 15% | |
Consumer | 164 | 256 | 322 | 96% | 26% | |
Total loan with credit risk stage 2 | 1,886 | 3,209 | 3,441 | 82% | 7% | |
Total loan with credit risk stage 3 | 1,654 | 1,923 | 2,063 | 25% | 7% | |
Total loan | 126,079 | 147,909 | 151,812 | 20% | 3% | |
(+/-) Deferred Items | 252 | 170 | 238 | (6% ) | 40% | |
Allowance for possible loan losses | 2,861 | 3,375 | 3,484 | 22% | 3% | |
Other Receivables | 53 | 46 | 45 | (15% ) | (2% ) | |
Net loan portfolio | 123,523 | 144,750 | 148,611 | 20% | 3% |
9
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Regional SAB de CV published this content on 24 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 October 2023 05:04:42 UTC.
