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Banorte's Q3 profit rises 26% on stronger banking, insurance results

Grupo Financiero Banorte SAB de CV on Oct. 18 reported a 26% year-over-year rise in its third-quarter 2018 profit as the company saw stronger results across its main revenue streams.

The Mexican financial group said net income for the three months ending Sept. 30 reached 7.82 billion pesos, or 2.71 pesos per share, up from 6.22 billion pesos, or 2.24 pesos, earned in the year-ago period.

The result was supported by a 20% yearly increase in net interest income, which came to 19.06 billion pesos in the third quarter. Service and fee income, meanwhile, hit 3.46 billion pesos, up 14% from the year ago's 3.03 billion pesos. The company also tallied 877 million pesos in trading income, up 40% year over year, and 452 million pesos in other operating income, surging 89% from a year ago.

The bank's third-quarter net interest margin reached 5.7%, flat from the linked quarter but up from 5.5% in the year-ago period.

Provisions for the period totaled 4.07 billion pesos, up 21% from the earlier year. The company's past-due loans grew 26% to arrive at 13.90 billion pesos in the third quarter. However, the past-due loan ratio was unchanged year over year at 1.8%.

The company's return on equity increased annually to 19.7% from 18.0%. Return on assets also rose to 2.1% from 1.9%.

Banorte's banking subsidiary, Banco Mercantil del Norte SA Institución de Banca Múltiple, posted net income of 5.90 billion pesos for the quarter, up 20% from 4.90 billion in the third quarter of 2017. Meanwhile, the group's profit from its insurance business increased 13% yearly to reach 688 million pesos.

In conjunction with the completion of Banorte's merger with Grupo Financiero Interacciones SAB de CV on July 13, the company said results for the third quarter include the revenues and expenses of Interacciones as of the merger date, and thus do not represent a full quarter's performance.

As of Oct. 17, US$1 was equivalent to 19.11 Mexican pesos.