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Grupo Financiero Santander Mexico Reports Fourth Quarter 2012 Net Income of Ps.3,310 Million

-- Strong loan growth in commercial banking with YoY increases of 20.8% in consumer loans, 30.3% in credit cards, 76.7% in SMEs and 11.9% in mortgages

MEXICO CITY, Feb. 18, 2013 /PRNewswire/ -- Grupo Financiero Santander Mexico, S.A.B. de C.V., (NYSE: BSMX; BMV: SANMEX), ("Santander Mexico"), one of the leading financial groups in the Mexican financial system, today announced financial results for the three- and twelve-month periods ending December 31, 2012.

Comparable net income for 4Q12 was Ps.3,938 million, representing a 16.0% YoY increase. Including a non-recurring gain of Ps.4,348 million in 4Q11 from the sale of the insurance business to Zurich Financial Services Group ("Zurich"), as well as, incremental administrative and promotional expenses, an accounts receivable write-off and higher provisions in 4Q12, reported net income for the quarter was Ps.3,310 million, representing a decrease of 57.2% YoY and 21.5% on a sequential basis.

Comparable net income for FY12 increased by 31.4%, or Ps.4,124 million, to Ps.17,238 million. Including an extraordinary gain of Ps.4,822 million from the sale of the insurance business and income from this business in FY11, a Ps.1,067 million extraordinary gain in 3Q11 from the reversal of provisions to comply with CNBV (Comision Nacional Bancaria y de Valores) regulations, and a Ps.1,731 million gain from the sale and leaseback of 220 branches in 2Q12, as well as, higher costs and provisions in 4Q12 as discussed above, reported net income for FY12 was Ps.17,822 million, a 4.6% decrease, from FY11

Marcos Martinez, Executive Chairman and CEO, commented, "We reported a solid operating performance this quarter, balancing robust growth with strong asset quality and operational efficiency. Net interest income expanded 13% year-on-year and net commissions and fees grew 34%. Continued growth in retail loans underscores the merits of our strategic focus. Performance in key business segments was strong in 2012, with year-on-year increases of 21% in consumer loans, 30% in credit cards, and 77% in loans to small and medium enterprises ("SMEs"). We achieved growth while maintaining a strong focus on prudent risk management - reflected in controlled NPL ratios and a stable cost of risk.  This, together with our efficiency-oriented culture, positions Santander Mexico as one of the most profitable franchises in the country."

Mr. Martinez continued, "We expect Santander Mexico's momentum to continue in 2013 and beyond, supported by our sharp strategic focus, our favorable view of Mexico's political and economic landscape, and our expectations for attractive yet sensible Mexican financial system growth."










Grupo Financiero Santander Mexico








Highlights









4Q12

3Q12


4Q11


YoY


Income Statement Data








Net interest income

8,811

8,582


7,811


12.8%


Fee and commission, net

3,339

3,065


2,496


33.8%


Core revenues

12,150

11,647


10,307


17.9%


Provisions for loan losses

2,948

2,535


2,041


44.4%


Administrative and promotional expenses

6,022

5,179


5,221


15.3%


Net income

3,310

4,214


7,741


-57.2%


Net income per share *

2.6

2.1


2.0


28.6%


Balance Sheet Data








Total loans

350,683

343,383


313,673


11.8%


Deposits

362,452

336,289


309,194


17.2%


Shareholders´s equity

97,827

94,793


88,479


10.6%


Key Ratios






pbs


Net interest margin

5.0%

5.0%


5.1%


(2.6)


Net loans to deposits ratio

93.6%

98.7%


97.8%


(427.1)


ROAE

19.1%

21.1%


21.9%


(273.2)


ROAA

2.3%

2.6%


2.6%


(31.7)


Efficiency ratio

39.5%

36.9%


44.2%


(469.3)


Capital ratio

14.8%

14.5%


14.8%


(5.0)


NPLs ratio

1.74%

1.61%


1.69%


4.3


Coverage ratio

190.1%

205.4%


210.5%


(2,046.1)


Operating Data






%


Branches**

1,170

1,123


1,125


4.0%


ATMs

4,946

4,840


4,689


5.5%


Customers

10,013,228

9,764,741


9,310,681


7.5%


Employees

13,385

12,766


12,395


8.0%










* Treasury Shares and discontinued operations are not included






** Includes Brokerage House Branches







To obtain the full text of this earnings report and the 4Q12 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/inf_financiera/inf_trimestral.html

4Q12 EARNINGS CALL DIAL-IN INFORMATION


Date:

Tuesday, February 19, 2013

Time:

8:00 AM (MCT); 9:00 AM (US ET)

Dial-in Numbers:

1-877-941-4774 US & Canada; 1-480-629-9760 International & Mexico

Access Code:

4595377

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1013104

Replay:

 

Starting Tuesday, February, 19, 2013 at 12:00 PM (MCT); 01:00 PM (US ET), and ending on      Tuesday, February 26, 2013 at 10:59 PM (MCT); 11:59 PM (US ET).


Dial-in number: 1-877-870-5176 US & Canada; 1-858-384-5517 International & Mexico


Access Code: 4595377

About Grupo Financiero Santander Mexico, S.A.B. de C.V. (NYSE: BSMX BMV: SANMEX)
Grupo Financiero Santander Mexico, S.A.B. de C.V. (Santander Mexico), one of Mexico's leading financial services holding companies, provides a wide range of financial and related services, including retail and commercial banking, securities brokerage, financial advisory and other related investment activities. Santander Mexico offers a multichannel financial services platform focused on mid- to high-income individuals and small- to medium-sized enterprises, while also providing integrated financial services to larger multinational companies in Mexico. As of December 31, 2012, Santander Mexico had total assets of Ps.750.3 billion under Mexican GAAP and more than 10.0 million customers. Headquartered in Mexico City, the Company operates 1,170 branches nationwide and has a total of 13,385 employees.

LEGAL DISCLAIMER

Grupo Financiero Santander Mexico cautions that this report may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements could be found in various places throughout this report and include, without limitation, statements regarding our intent, belief, targets or current expectations in connection with: asset growth and sources of funding; growth of our fee-based business; expansion of our distribution network; our focus on strategic businesses; our compound annual growth rate; our risk, efficiency and profitability targets; financing plans; competition; impact of regulation; exposure to market risks including interest rate risk, foreign exchange risk and equity price risk; exposure to credit risks including credit default risk and settlement risk; projected capital expenditures; capitalization requirements and level of reserves; liquidity; trends affecting the economy generally; and trends affecting our financial condition and our results of operations. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: changes in capital markets in general that may affect policies or attitudes towards lending to Mexico or Mexican companies; changes in economic conditions, in Mexico in particular, in the United States or globally; the monetary, foreign exchange and interest rate policies of the Mexican Central Bank (Banco de Mexico); inflation; deflation; unemployment; unanticipated turbulence in interest rates; movements in foreign exchange rates; movements in equity prices or other rates or prices; changes in Mexican and foreign policies, legislation and regulations; changes in requirements to make contributions to, for the receipt of support from programs organized by or requiring deposits to be made or assessments observed or imposed by, the Mexican government; changes in taxes; competition, changes in competition and pricing environments; our inability to hedge certain risks economically; economic conditions that affect consumer spending and the ability of customers to comply with obligations; the adequacy of allowances for loans and other losses; increased default by borrowers; technological changes; changes in consumer spending and saving habits; increased costs; unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms; changes in, or failure to comply with, banking regulations; and certain other factors indicated in the "Risk Factors" section of our Registration Statement on Form F-1 (File No. 333-183409). The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the U.S. Securities and Exchange Commission, could adversely affect our business and financial performance.

Note: The information contained in this report is not audited. Nevertheless, the consolidated accounts are prepared on the basis of the accounting principles and regulations prescribed by the Mexican National Banking and Securities Commission (Comision Nacional Bancaria y de Valores) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in nominal terms. Historical figures are not adjusted by inflation.

SOURCE Grupo Financiero Santander Mexico, S.A.B. de C.V.

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