BSMX Banco Santander Mexico SA Institucion de Banca Multiple Grupo

MEXICO CITY, April 27, 2016 /PRNewswire/ -- Grupo Financiero Santander México, S.A.B. de C.V., (NYSE: BSMX; BMV: SANMEX), ("Santander México"), one of the leading financial groups in Mexico, today announced financial results for the three-month period ending March 31, 2016.

Santander México reported net income for 1Q16 of Ps.3,539 million, representing a YoY increase of 10.1% and a QoQ decrease of 16.2%.

Héctor Grisi, Grupo Financiero Santander México's Executive President and CEO, commented,   "We are pleased to report a solid start to the year. Net interest income rose 18% year-on-year reaching a record high in March, to surpass 4 billion pesos. We remain focused on implementing strategies that will enable us to become the market leader in profitability and growth in Mexico, and reach our long term performance goals. To achieve this, we need to strengthen returns on capital, increase customer loyalty, reduce attrition and consolidate our leadership in key markets."

"To make more efficient use of our capital, we have been conducting an in-depth assessment of returns on our risk-weighted assets. Behind this assessment is a disciplined philosophy of only embarking on transactions that meet our thresholds of return. As such, we have started to implement a range of initiatives including pricing adjustments in the commercial segment."

"We expanded our loan book 14% year-on-year, achieving strong performance in consumer loans – up 27% as we leveraged the strength of our retail franchise in an environment of healthy consumer demand.  We started to see softer loan demand in the commercial segment, on the back of higher interest rates and a more challenging global environment. We continue to maintain a disciplined focus on profitability as competition intensifies. With a sharp eye on asset quality, the NPL ratio fell across the board year-on-year to 2.97%. While deposits showed good performance – up 13% YoY - driven by solid growth in individual deposits, there is still room to close our market share gap and improve our cost of funding."

"Aside from our objective of stronger capital returns, we are re-focusing our global corporate banking. To deliver on our potential in this business, we plan to improve our offering to multinational companies, consolidate our project finance operation and increase our focus on transactional products. While we are primarily a commercial bank, we are confident these initiatives will enable us to increase revenue contribution from corporate banking, while creating additional synergies with our retail operation."

"Our commitment to being a client-centric bank drives the growth strategy for our retail banking operations. We are reorganizing this business through measures such as further investments in IT and introducing multifunction ATMs. While Santander has excellent products and strong marketing capabilities, we recognize the need to address churn and increase client loyalty. Overall, we are dedicated to executing these growth initiatives for our corporate, commercial and retail bank, underpinned by an uncompromising focus on profitable growth."

1Q16 EARNINGS CALL DIAL-IN INFORMATION

ABOUT GRUPO FINANCIERO SANTANDER MÉXICO, S.A.B. DE C.V. (NYSE: BSMX; BMV: SANMEX)

Grupo Financiero Santander México, S.A.B. de C.V. (Santander México), 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 México 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 March 31, 2016, Santander México had total assets of Ps.1,233 billion under Mexican Banking GAAP and more than 12 million customers. Headquartered in Mexico City, the Company operates 1,079 branches and 307 offices nationwide and has a total of 17,203 employees.

LEGAL DISCLAIMER

Grupo Financiero Santander México 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 may 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 our  annual report20F. 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 (Comisión 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 for inflation.

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