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GFNORTE2Q04 Results2Q04 Results

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Contents

1. GFNorte in the Industry

2. GFNorte’s Results

3. Banking Sector’s Results

4. Long Term Savings Sector’s Results

3

1. GFNorte in the Industry

4

BRANCHES

Banamex BanorteHSBC SantanderBBVA-Bancomer

Scotiabank

25%

15%

20%

14%

20%

6%4°

24%

16%

19%

13%

21%

5%

1Q03

1Q04

ASSETS26%

12%

Banamex Banorte

11%

HSBCSantander

16%

4° 5%

ScotiabankBBVA-Bancomer

28% 28%

12%

10%

14%

5%

30%

Banorte vs Industry

5

CAPITALIZATION

18%

BBVA -Bancomer

15%

Scotiabank

16%

HSBC Banorte

15%

3°

Santander

11%

Banamex

12%14% 13%

16%

13%14%

12%

Banorte vs Industry

1Q03

1Q04

6

4Q01

1Q04

CORE DEPOSITS

Deposits Market Share

29%

27%

6%

10%

6%

29%

24%

5%

BBVABancomer

Banamex Banorte Scotiabank

5°

13%15%

HSBC

16%15%

SantanderSerfin

TOTAL DEPOSITS28%

22%

6%

15%13%

5%

16%

28%

22%

5%

BBVABancomer

Banamex SantanderSerfin

Banorte Scotiabank

5°

16% 16%

HSBC

7

4Q01

1Q04

ENTREPRENEURIAL LOANS

Loans Market Share

PERFORMING LOANS

29% 29%

6%9% 9% 8%9%

22%25%

10%

BBVABancomer

Banamex SantanderSerfin

HSBC Scotiabank

12%9%

Banorte

3°

24% 26%

8%5%

11% 11%

9%9%

23%

15%

7% 6%

BBVABancomer

Banamex SantanderSerfin

Banorte HSBC Scotiabank

4°

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2. GFNorte’s Results

9

1,087

17.6%

29.50

2.16

1.14

13.6%

41%

6.0%

116%

1,127

15.8%

40.83

2.23

1.42

14.5%

17%

3.6%

131%

1H041H03

4%

38%

Net Income

Annualized ROE

Stock Price

EPS

P/BV

Capitalization Ratio

Loan growth w/o IPAB

Past due loan ratio w/o IPAB

Reserve Coverage

HighlightsMILLIONS OF PESOS

10

GFNorte’s Income

MILLIONS OF PESOS

2Q03

Banking

Long – Term Saving

Auxiliary Organization

Holding

GFNORTE

850

149

44

11

1,087

33Brokerage House

958

99

40

(9)

1,127

39

519

20

23

(4)

568

9

2Q04 1H04

436

69

24

3

558

26

1H03

2% 4%

11

3. Banking Sector’s Results

12

MILLIONS OF PESOS

Income Statement

2Q03 2Q04 Var % 1H03 1H04 Var %

Net Interest Income after REPOMO 2,070 2,092 1% 4,412 4,108 (7%)

Services 513 724 41% 1,000 1,399 40%Recovery 85 126 48% 188 251 34%

Foreign Exchange 124 150 21% 211 275 31%

Trading (Securities- Realized and unrealized gains )

280 (87) (131%) 400 198 (50%)

Non Interest Income 1,001 912 (9%) 1,799 2,124 18%

Total Income 2,706 2,855 -% 5,570 5,965 7%

Non Interest Expense (2,311) (2,358) 2% (4,612) (4,811) 4%

Net Operating Income 395 497 26% 958 1,154 20%

Non Operating Income (Expense) Net 82 114 39% (51) (30) (41%)

Income Tax,profit sharing, Undistrib. Earn of Subs Extraor. Items & Min Inc. (15) (62) 327% 20 (84) (520%)

Total Net Income 463 549 19% 927 1,039 12%

Loan Loss and Loss Sharing Provisions (365) (149) (59%) (642) (267) (58%)

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NIM vs CETES

4.9

4.3

3.9

4.2 4.1

4.3

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04

8.8

6.3

4.65.4 5.6

6.3 CETES

NIM

14

… AS % OF EXPENSE

41%

32%

44%

33%

2001 2002 2003 1H04

31%

25%

34%

26%

2001 2002 2003 1H04

… AS % OF TOTAL INCOME

Non Interst Income

15

2001 2002 2003 1H04

5.1 4.4 4.3 2.2

2.8 2.4 2.4 1.2

1.6 1.3 1.4 0.7

1.3 1.2 1.4 0.7

10.8 9.4 9.5 4.8

Expense

BILLIONS OF PESOS

78%

87%

77%81%

2001 2002 2003 1H04

EFFICIENCY RATIO

Personnel

O & A

VAT & IPAB

Rent, depreciation & amortization

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3.0 3.4 3.9 4.2

2.42.6

2.8 2.90.60.9

1.52.2

2001 2002 2003 2Q04

Bank

Afore

Insurance

MILLIONS

6.06.9

8.29.3

Total Customers

17

137

227 225 228

107

133 150 154

2001 2002 2003 1H04

Bank

Brokerage

265

386 407418

21

27 32 36

Assets Management

Total Resources from Customers

BILLIONS OF PESOS

18

Deposits 2Q03 3Q03 4Q03 2Q04

Demand Deposits 58 59 67 64

Time Deposits 33 33 33 34

Total 90 92 100 98

Deposits Mix

64% 64% 67% 65%

36% 36% 33% 35%

100% 100% 100% 100%

1Q04

62

33

95

65%

35%

100%

Core Deposits(Billions of Pesos)

Demand Deposits

Time Deposits

19

8%

11%

5%

GROWTH 2Q04 VS 2Q03

DemandDeposits

TimeDeposits

Total

Core Deposits

20

2Q03 1Q04 2Q04VARIATION

2Q03 1Q04 2Q04

64

7175

Commercial 19 24 25 5% 31%

Corporate 18 13 14 6% (19%)

Government 8 10 10 1% 23%

TOTAL 64 71 75 5% 17%

Consumer 19 24 26 7% 34%

Loan Portfolio(Billions of Pesos)

Q on Q Y on Y

21

2Q03 1Q04 2Q04

19

24 26

2Q03 1Q04 2Q04

4 6 6 4% 36%

2 3 3 10% 47%

1 1 2 12% 93%

Consumer 19 24 26 7% 34%

VARIATION

Car loans

Credit Cards

Payroll loans

12 14 15 7% 27%Mortgage

Consumer and Mortgage Loan Portfolio

(Billions of Pesos)

Q on Q Y on Y

22

Number of New Loans

CREDIT CARDS CAR LOANS

MORTGAGE

43,620

53,887

1H03 1H04

24%

19,823 19,751

1H03 1H04

3,264

4,598

1H03 1H04

41%

=

23

Loan Portfolio

Corporate38%

Commercial27%

Government9%

Consumer25%

Corporate19%

Commercial33%

Government13%

Consumer35%

2002 1H04

Ps 66,000 Millions 14% Ps 75,000

Millions

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BILLIONS OF DE PESOS

LOANPORTFOLIO

IPAB / FOBAPROA

1996 1997

43

105

2001

147

2002

153

2003

152

21%

71%

66%

59%51%

2Q04

150

48%

79% 29%34%

41%49% 52%

Loan Portfolio

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Fobaproa – IPAB Notes

1S´04 YIELD MATURITY

BANCRECER 46 TIIE + 40 pb

BANCEN - BANPAIS 19 TIIE + 85 pb

BANORTE (FOBAPROA) 7 CETES – 135 pb

2009

2010

2005/2006

72TOTAL

BILLIONS OF DE PESOS

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Asset Quality

Past Due Loan

Loan Loss Reserves

1Q03 2Q03 3Q03 4Q03 2Q04

RESERVE COVERAGE

1Q04

3.6 4.0 3.5 3.6 2.8

4.5 4.7 4.5 4.4 3.7

3.6

4.6

Past Due Loan Ratio (exc. IPAB)

131%127%116%

128% 122%

1Q03 2Q03 3Q03 4Q03 2Q04

130%

1Q04

3.6%

5.6%6.0%

5.0% 4.8%

1Q03 2Q03 3Q03 4Q03 2Q04

4.8%

1Q04

Loan Portfolio 64 68 71 75 7875

BILLIONS OF DE PESOS

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Recovery Bank

Net Income

CONTRIBUTION TO GFNORTE’S NET INCOME

23%

32%33%

29%

2001 2002 2003 1H04

2001 2002 2003 1H04

484 561 714 263

MILLIONS OF PESOS

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27 26 24 23

20 1714 13

1817 21 23

2001 2002 2003 2Q04

6560 59 59

Recovery Banking

Assets Under Management

(Billions of Pesos at Face Value)

Banorte risk(owned + auctions)

Serfin Portfolio

IPAB Portfolio(servicing)

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Capitalization Ratio

Tier 1

Tier 2

TOTAL

10.9%

2.4%

13.4%

1Q03

11.2% 11.4% 10.5% 10.5%

2.4% 2.4% 2.2% 5.0%

13.6% 13.8% 12.7% 15.4%

2Q03 3Q03 4Q03 1Q04

10.7%

3.8%

14.5%

2Q04

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4. Long Term Savings Sector’s Results

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Afore

547

10

1620

25 28

1998 1999 2000 2001 2002 2003 1H04

BILLIONS OF PESOS

1.2

2.92.82.62.4

1.61.4

1998 1999 2000 2001 2002 2003 1H04

CUSTOMERSMILLIONS

32

0.8 0.9 1.0

1.41.8 1.7

GROSS WRITTEN PREMIUMS

BILLIONS OF PESOS

2.21.5

0.90.6

CUSTOMERSMILLIONS

Insurance

1998 1999 2000 2001 2002 2003 1H04

0.4

1998 1999 2000 2001 2002 2003 1H04

0.50.40.2

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Contribution to GFNorte’s Net Income

2001 2002 2003 1H04

Afore 5.9% 6.2% 5.0% 4.4%

Insurance 0.5% 2.0% 3.6% 3.0%

Annuities (0.4%) 0.0% 1.3% 1.5%

9%10%8%

6%

2001 2002 2003 1H04

… LONG TERM SAVINGS SECTOR

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