Grupo Financiero Banorte SAB de CV posted a 6% annual increase in its profit for the final quarter of 2016 as a 7% rise in net interest income helped offset a 31% jump in provisions.
The company reported fourth-quarter 2016 net income of about 5.24 billion Mexican pesos, or 1.89 pesos per share, up from 4.94 billion pesos, or 1.78 pesos per share, in the year-ago period.
For the full year, the bank booked net income of about 19.31 billion pesos, 13% higher compared to 17.11 billion pesos earned in 2015. S&P Capital IQ estimates had projected a full-year profit of 19.60 billion pesos for the bank.
The company's main banking unit, Banco Mercantil del Norte SA, contributed 4.03 billion pesos to the parent's total fourth-quarter 2016 profit, up 17% from a year earlier. Profits from the group's broker/dealer unit rose increased 24% year over year, while the contribution from its insurance division improved 6%.
Grupo Financiero Banorte's net interest income for the quarter totaled 13.17 billion pesos, rising from 12.36 billion pesos a year earlier. Its net interest margin, meanwhile, improved to 4.7% from 4.6% a year ago but fell from 4.9% in the linked quarter.
At the same time, the company recorded 3.26 billion pesos in loan-loss provisions for the three-month period, up from 2.50 billion pesos a year ago. The bank attributed this increase mainly to higher requirements in payroll, credit card and corporate loans, which could not be offset by lower requirements in the commercial portfolio.
The lender's total performing loans grew 9% year over year to reach 566.80 billion pesos, with consumer credit expanding 16% and corporate loans rising 17%. Its past-due loan ratio fell to 1.8% from 2.2% in both the linked and year-ago quarters.
The bank's annualized return on equity ticked to 14.9% from 14.8% a year earlier, while its annualized return on assets fell marginally to 1.69% from 1.7%.
As of Jan. 26, US$1 was equivalent to 21.16 Mexican pesos.