Mexico’s Banorte sees profitability boost for 2023, following strong Q4

MEXICO CITY (Reuters) -Mexico’s Grupo Financiero Banorte expects to grow its profitability in 2023, it said on Thursday, after publishing a 28% year-on-year increase in its fourth-quarter net income.

The bank forecasts a net income this year of between 50.5 billion pesos and 52.5 billion pesos, it said in a presentation, up from the 45.4 billion pesos it posted last year.

It added it expects a total return on equity (ROE) in 2023 of 19.5% and 21.0%, up from the 19.2% seen in 2022, while total expenses are expected to grow by between 11% and 13%, including those of its digital bank Bineo.

Loan growth is forecast at between 6% and 8%.

The guidance comes after the bank reported that its fourth-quarter net profit surged 28% to 11.6 billion pesos ($595 million) from the year-earlier period, boosted by strong revenue growth.

Revenue for the group, which owns one of the country’s largest banks and pension funds, totaled 31.9 billion pesos ($1.64 billion) in the fourth quarter, up 26% from a year earlier.

The bank’s performing loan book grew 5% quarter-over-quarter, while its consumer loans rose 4%, driven by increases across credit cards, mortgages and payroll.

Non-interest expenses in the quarter were 11% higher than a year earlier.

“During 2022, Banorte showed clear growth trends in most of its business lines, despite operating in an increasingly challenging macroeconomic environment,” the company said in its report.

($1 = 19.5089 pesos at end-December)

(Reporting by Carolina Pulice, Valentine Hilaire and Marion Giraldo; Editing by Isabel Woodford and Bradley Perrett)