In This Article:
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Net Income: MXN1,683 million, a 4% year-on-year increase.
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Return on Average Equity: Increased by 20 basis points year-on-year to 21.3%.
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Loan Growth: 14% year-on-year, outpacing the banking sector's 12%.
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Core Deposits: Rose 12% year-on-year compared to the sector's 9% expansion.
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Financial Margin: Increased by 12% year-on-year and 3% quarter-on-quarter.
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Non-Financial Income: Increased by 20% year-on-year.
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Operating Expenses: Grew 13% year-on-year.
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Efficiency Ratio: 39.7%, a year-on-year reduction of 124 basis points.
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NPL Ratio: Increased to 1.1% from 0.88% in the previous quarter.
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Coverage Ratio: 163%.
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Branch Openings: 20 new branches opened in the year.
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CASA Ratio: Reduced to 47.5%.
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Preferred Banking Portfolio: Increased 21% year-on-year.
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SME Portfolio: Expanded 19% year-on-year.
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Hey Banco Active Customer Base: 523,000.
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Hey Banco Efficiency Ratio: 72.6%.
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Dividend Distribution: MXN3,000 million in two installments, representing a 46% payout.
Release Date: January 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Regional SA de Cv (MEX:RA) reported a 4% year-on-year increase in net income for the fourth quarter, reaching MXN1,683 million.
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The company achieved a 14% year-on-year loan growth, outpacing the banking sector's 12% growth.
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Core deposits rose 12% year-on-year, compared to the sector's 9% expansion.
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Non-financial income saw a notable 20% year-on-year increase, driven by cross-selling strategies.
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The efficiency ratio improved, contracting by 150 basis points to 36.5%, underscoring operational excellence.
Negative Points
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Operating expenses grew 13% year-on-year, primarily due to strategic investments in geographic expansion.
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The NPL ratio increased to 1.1% from 0.88% in the previous quarter, indicating a rise in non-performing loans.
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The CASA ratio declined to 47.5%, reflecting a strategic exit from high-cost checking accounts.
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There is a potential risk of NIM pressure if interest rates decrease more than expected.
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Hey Banco's efficiency ratio remains high at 72.6%, indicating room for improvement in operational efficiency.
Q & A Highlights
Q: How should we think about NIMs given the potential interest rate changes in 2025? A: Enrique Navarro Ramirez, CFO, explained that they expect interest rates to end at 8.5% by the end of the year, down from 10%. They anticipate a NIM impact of 16 to 20 basis points due to rate changes, but improvements in loan mix and spreads should help mitigate this. The NIM guidance is between 6.2% and 6.7%, with the lower end reflecting a scenario of more significant rate reductions.