REGIONAL S.A.B. DE C.V. EXECUTIVE SUMMARY
Regional, S.A.B. de C.V. presents, for informative purposes only, the internal financial statements for the period ended March 31, 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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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
Growth
- The commercial portfolio with credit risk stage 1, which includes loans for small and medium businesses, registered $113,826 million pesos during 1Q23. The commercial portfolio with credit risk stage 2, which includes loans for small and medium businesses registered $2,059 million pesos during 1Q23.
- On the other hand, Preferred Banking portfolio, which includes mortgages, auto credits and consumer credits such as credit cards, lay up $23,286 million pesos, representing an 26% annualized gain.
- Core deposits, formed by demand deposits and savings accounts as time deposits, reached $136,840 million pesos during the First Quarter of 2023, presenting an 19% increase compared to the same quarter last year. Time deposits had an 40% growth compared to 1Q22.
- Cost of funding in domestic currency is 6.2% at the end of 1Q23.
Risks and Strengths
- Loans portfolio with credit risk stage 3 ratio was 1.2% at the end of 1Q23, 31 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 February 2023 is 15.3%.
Profitability
- The financial margin at the end of 1Q23 was $2,821 million pesos, increasing 35% versus 1Q22.
- Net Income was $1,187 at the end of 1Q23, 3% more than 1Q22.
- The Efficiency Index1 at the end of 1Q23 was 43.2%.
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 has presence in 22 federal entities through a 157 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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EXECUTIVE SUMMARY
San Pedro Garza Garcia, N.L. April 24th, 2023. Regional, S.A.B. de C.V. (BMV: R.A) announced today its consolidated financial and operational results corresponding to 1Q23. 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 1Q23 a net income of $1,187 million pesos, achieving a 21.0% ROAE.
Financial Margin
At the end of 1Q23 the financial margin registered $2,821 million pesos, showing a 35% increase compared to the same quarter last year.
Non-Interest Income
Non-Interest Income at the end of the First Quarter 2023 amounted $785 million pesos. Income from Commissions, which generated $415 million pesos, stands out, with an increase of 26% over the same period of the previous year.
Operating Income
The operating income reached $1,585 million pesos, increasing 2% compared to the same period last year.
The net income at the end of 1Q23:
Net Income | 1Q22 | 4Q22 | 1Q23 | 1Q23 vs | 3M22 | 3M23 | 3M23 vs | |
(Million pesos) | 1Q22 | 4Q22 | 3M22 | |||||
Financial Margin | 2,090 | 3,493 | 2,821 | 35% | (19%) | 2,090 | 2,821 | 35% |
Total operating income | 2,819 | 3,256 | 3,083 | 9% | (5%) | 2,819 | 3,083 | 9% |
Non interest expenses | (1,261) | (1,487) | (1,498) | 19% | 1% | (1,261) | (1,498) | 19% |
Operating Income | 1,558 | 1,769 | 1,585 | 2% | (10%) | 1,558 | 1,585 | 2% |
Net income | 1,150 | 1,374 | 1,187 | 3% | (14%) | 1,150 | 1,187 | 3% |
Loan Portfolio
The loan portfolio with credit risk stage 1 reached a balance of $138,752 million pesos at the end of 1Q23, increasing 18% compared to the same quarter last year. It stands out the growth in consumer loans increasing 47%.
The loan portfolio with credit risk stage 2 reached a balance of $2,780 million pesos at the end of 1Q23.
The non-performing loan ratio was 1.2% at the end of 1Q23, 31 basis points lower than that of 1Q22, and Regional has a coverage ratio of provisions for credit loan losses of 1.8 times the non-performing loan portfolio.
Deposits
Core deposits reached $136,840 million pesos at the end of 1Q23 with an increase of 19% compared to the same quarter last year. Time deposits stand out with a 40% increase compared to the First Quarter in 2022, reaching a balance of $62,366 million pesos.
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EXECUTIVE SUMMARY
Capitalization
The capitalization ratio to total risky assets of Banco Regional, S.A. stood at 15.3% by February 2023.
Net Income by Subsidiary
During the First Quarter of 2023, Banco Regional, S.A. generated 85% of Regional's total Net Income, while Start Banregio, S.A. de C.V. which is a subsidiary of Banco Regional, generated 15% 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.
Financial ratios Last Twelve Months (LTM) | 1Q22 | 2Q22 | 3Q22 | 4Q22 | 1Q23 | 1Q23 vs | |||||||
1Q22 | 4Q22 | ||||||||||||
Net Interest Margin (NIM) | (1) | 5.3% | 5.4% | 5.6% | 6.1% | 6.2% | 90 b.p. | 5 b.p. | |||||
Total Loans NIM LTM | (2) | 6.5% | 6.5% | 6.7% | 7.5% | 7.7% | 116 b.p. | 22 b.p. | |||||
Return on Equity (ROAE) | (3) | 16.9% | 17.9% | 19.5% | 21.2% | 21.0% | 403 b.p. | (18 b.p.) | |||||
Return on Assets (ROAA) | (4) | 2.4% | 2.4% | 2.5% | 2.6% | 2.5% | 13 b.p. | (15 b.p.) | |||||
Return on Assets (ROAA) of Total Loans | (5) | 2.5% | 2.5% | 2.6% | 2.8% | 2.7% | 23 b.p. | (9 b.p.) | |||||
Efficiency Ratio | (6) | 46.1% | 46.4% | 44.9% | 43.4% | 43.2% | (289 b.p.) | (19 b.p.) | |||||
Loans to deposits | (7) | 105.1% | 99.4% | 100.4% | 109.0% | 104.7% | (42 b.p.) | (424 b.p.) | |||||
- 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.
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Disclaimer
Regional SAB de CV published this content on 25 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2023 01:47:06 UTC.
