Regional B de C : The results of the First Quarter

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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 March 31st, 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.

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