1Q24

I. Executive Summary

I. Executive Summary

• GFNorte reports sound earnings generation and profitability metrics. Sequentially, Net
  Income increased +9% and ROE of the Group +134bps, to 22.2%.
• Strong insurance results given solid business generation and seasonality on premium renewals.
• Stage 1 and 2 credit portfolios expanding +10% vs. 1Q23,driven by +13% consumer, +17% corporate, and +11% commercial.
• NPL at 0.9%, driven by the selectivity of the portfolios.
• Efficiency Ratio at record level of 33.9% as of 1Q24,improving (49bps) YoY, leveraging from solid earnings.
• Solid capitalization levels of Banorte; CAR 21.26%, CET1 15.51%, and LCR 185.8% at the end of the first quarter.
• GFNorte issued its first sustainable bond in Mexico for Ps 13.06 billion.

I. Executive Summary

GFNorte reports Net Income of Ps 14.21 billion in the first quarter of 2024,

9% higher vs. 1Q23

(BMV: GFNORTEO; OTCQX: GBOOY; Latibex: XNOR)

Grupo Financiero Banorte, S.A.B. de C.V. reported results for the period ended on March 31st, 2024.

During 1Q24, GFNorte sustained solid lending activity, driven mainly by the consumer and commercial books, in line with client focused efforts and the development of comprehensive businesses to drive the future value of the client. The expansion of the book has been supported by the stability of asset quality, still below historical averages.

We maintain active balance sheet management and continue to gradually reduce our structural sensitivity to the easing cycle of the monetary policy. We have focused on maintaining sustainable profitability through organic development of the business' fundamentals and a diligent optimization of operational expenses.

At the end of 1Q24, GFNorte reported net income of Ps 14.21 billion, 19% above 1Q24, with the following results and indicators for the quarter:

• Net interest income (NII) expanded 2% sequentially, supported by loan growth, a decline in interest expense, and the positive effect of seasonality in the insurance business, mitigating the negative impact of currency valuation. Compared to 1Q23, NII expanded 10%, driven by the origination volume and mix, as well as by a higher reference rate in the period. NIM of the Group stood at 6.5% in 1Q24, slightly higher vs. 4Q23.
• NIM of the Bank decreased (18bps) sequentially, to 6.4% and (15bps) YoY, in both cases due to the acceleration of earning assets at the end of the quarter. The effect of the (25bps) reduction in the reference rate, to 11%, will be reflected from the second quarter onwards.
• Non-interestincome grew 166% vs. 4Q23, driven by the insurance business generation and the seasonal effect in premium renewals during the first quarter of the year, as well as 7% higher net fees in the quarter. Compared to 1Q23, it grew Ps 1.66 billion, with positive dynamics in all items that comprise this concept.
• Provisions were 36% higher sequentially given the normalization of the reserves' releases registered during 4Q23. Year-over-year provisions grew 29%, in line with the loan origination mix and volume, as well as the integration of Tarjetas del Futuro in the credit card portfolio. Consequently, cost of risk reached 1.8% in 1Q24 increasing 46bps vs 4Q23 and 26bps vs. 1Q23; excluding Tarjetas del Futuro, cost of risk was 1.7%.
• Non-interestexpenses decreased (14%) sequentially, mainly due to anticipated personnel expenses during 4Q23. Compared to 1Q23 they increased 13% due to organic growth initiatives and the integration of Bineo and Tarjetas del Futuro; excluding these subsidiaries, the increase was 8.1%. Efficiency ratio reached record levels as of 1Q24, standing at 33.99%.
• ROE stood at 22.2% in 1Q24, expanding 134bps sequentially, and 78bps in the year, reflecting sound business diversification and internal capital generation. ROA reached 2.4%, 15bps higher vs. 4Q23, in line with a larger loan book and the incorporation of earnings and assets of the non-banking subsidiaries.
• Subsidiaries positively contributed to the performance of the business and supported the sound revenue diversification of the Group. In the year, net income of insurance grew 65%, bank 2%, brokerage 125%, annuities 14% and Afore 7%.
• Loan book stages 1 and 2 increased 1% sequentially. In the quarter, consumer loans continued to be the main growth driver: mortgage +1% and auto +5%. Payroll grew 2%, in line with the cautious approach over a change in the government administration and the selectivity of the portfolio. Credit card loans had a slight sequential decrease, due to the seasonality of the product, given the transactional level of the fourth quarter of the year. The commercial portfolio grew Ps 6.12 billion in the quarter, supported by mid-size enterprises and SMEs. The government portfolio grew 3% and the corporate book decreased (1%), due to the impact of the exchange rate in the dollar book and prepayments during the quarter. In the year, the loan book stages 1 and 2 increased 10%, with double digit growth in most of the portfolios, driven by consumer products: mortgage +9%, credit card +26%, auto +27%, and payroll +10%. Corporate and commercial books grew 17% and 11%, respectively, due to a sound and diversified lending growth, as well as the increasing credit demand from nearshoring. The government portfolio was in line with expectations, given the regulatory lending restrictions of this election year.
• Better overall quality of the loan portfolio, still below historical levels. NPL ratio stood at 0.9%, improving (11bps) quarterly and YoY. Improvements in consumer portfolios stand out, in line with the approach of building a client inventory with the desired risk profile.

I. Executive Summary

• Core deposits increased 4% sequentially, with demand deposits increasing 2%, while time deposits grew 7% given the current market conditions regarding rates. In the year core deposits rose 20% or Ps 163.50 billion, driven by a 30% expansion of interest-bearing demand deposits and a 33% time deposits expansion; funding mix remains structurally stable, with 71% demand deposits and 29% time deposits.
• Capital strength, as well as liquidity managementare still top priorities for the Financial Group. Banorte's total Capital Adequacy Ratio (CAR) reached 21.26%, and Core Equity Tier 1 (CET1) reached 15.51%, both well above regulatory minimums, allowing the bank to comply with TLAC (TotalLoss-AbsorbingCapacity) requirements, that came into effect in December 2022. The quarterly average Liquidity Coverage Ratio stood at 177.7%, while the Leverage Ratio at 11.45%.

1. In 3Q23, interest charged on collateral for derivatives traded on the Chicago Stock Exchange was reclassified from the fees charged account to the interest income account.

I. Executive Summary

1. NIM= Annualized Net Interest Income / Average Earnings Assets.
2. Annualized earnings as a percentage of average quarterly equity over the period, minus minority interest, for the same period.
3. Annualized earnings as a percentage of average quarterly assets over the period, minus minority interest, for the same period.
4. Non-InterestExpense / Total Income
5. Annualized Non-Interest Expense / Average Total Assets.
6. Preliminary LCR calculation. To be updated upon publication of Banco de Mexico's official calculations.
7. Cost of Risk = Annualized Provisions / Average Total Loans.
8. The Exchange Rate Peso/Dollar for the semester is the average.

For more detail on Liquidity Coverage Ratio (LCR)

See Page. 29 to 32 of the Risk Management Report

I. Executive Summary

Share performance

1. Management's Discussion & Analysis

1. Management's Discussion & Analysis

Since December 2023 Grupo Financiero Banorte consolidates line by line operations regarding the Joint Venture with Rappi, hereinafter referred to as "Tarjetas del Futuro", in its Group's financial statements.

For comparison purposes, it is important to consider that GFNorte holds a 98.2618% ownership of the Bank; therefore, some figures may vary as they refer to the Group or the Bank.

Net Interest Income

1. NIM (Net Interest Margin)= Annualized Net Interest Income of the quarter / Average Interest Earnings Assets.
2. NIM= Annualized Net Interest Income for the quarter adjusted for Credit Risks / Average of Performing Assets.
3. NIM= Annualized Net Interest Income from the credit portfolio of the quarter / Average Stages 1 and 2 Loans
4. In 3Q23, interest charged on collateral for derivatives traded on the Chicago Stock Exchange was reclassified from the fees charged account to the interest income account.

NII was 2% higher sequentially, driven by the expansion in loan origination volume and the seasonal benefit of insurance business generation, despite the negative effect in currency valuation and lower interest from repos. Interest expenses decreased (4%) vs. 4Q23, which benefited from the strategy to improve funding cost. NIM stood at 6.5%, 1bps increase vs. 4Q23, due to the balance between loan origination and control over funding costs, slightly diminished by the increase of earning assets in a higher proportion. NIM of the loan portfolio stood at 8.2%.

Compared to 1Q23, net interest income rose 10%. The result was driven by the loan book volume and mix, together with the 44bps adjustment in the reference rate of the comparison quarters, offsetting lower repo interests. Interest expenses went up 10%, aligned with the average reference rate TIIE28d adjustments, promoting the migration to interest-bearing deposits. Nevertheless, deposits' mix has remained relatively stable, with 71% demand and 29% time, actively balancing the loan book growth with the cost of funding. NIM decreased (14bps) vs. 1Q23 to 6.5%, due to higher growth in average earning assets vs. NII. NIM of the loan book stood at 8.2%, a (69bps) decrease YoY.

For more detail on Margin Sensitivity (Bank):

1. Refer to page 36 and 37 of theRisk Management Report

II. Management's Discussion & Analysis

Loan Loss Provisions

In the quarter, credit provisions increased Ps 1.28 billion, or 36%, mainly due to the normalization of the provisions released during 4Q23. Out of the Ps 4.87 billion provisions recorded in the quarter, 33% correspond to portfolio balances variations and the remaining to risk variations.

Compared to 1Q23, provisions were Ps 1.10 billion or 29% higher, related to i) the dynamism and origination mix, especially focused on consumer portfolios; and ii) the integration of the loan book of Tarjetas del Futuro. As a result, cost of risk stood at 1.8%at the end of 1Q24, 26bps higher vs. 1Q23.

For more detail on Internal Credit Risk Models:

1) Pages 18 to 23 of the Risk Management Report

Non-Interest Income

1. In 3Q23, interest charged on collateral for derivatives traded on the Chicago Stock Exchange was reclassified from the fees charged account to the interest income account.

Non-interestincome grew 166% sequentially, driven by the insurance business generation, coupled with the seasonal increase in insurance premium income, as well as higher net service fees. On a yearly basis,non-interestincome expanded Ps 1.66 billion, associated with positive dynamics in all non-interest income items.

Premium income from Insurance and Annuities rose 62% sequentially, driven by the high seasonality of the insurance business, from the portfolio renewal in the first quarter. Technical reserves increased 62% or Ps 4.66 billion, out of which, Ps 3.80 billion are related to the increase in insurance premiums, especially in life and casualty, while Ps 857 million are associated with the annuities business, in line with higher premiums collected. Acquisition cost rose due to the same seasonality effect and business generation. On the other hand, claims grew in the quarter, mainly due to the life portfolio.

On an annual basis, premium income from Insurance and Annuities rose 30%, mainly given i) the anticipated renewal of a significant insurance premium, which this year was fully recorded in 1Q24, whereas in 2023, was partially issued in 1Q23 and complemented in 2Q23; and ii) the insurance business generation, mainly given the dynamism in the life and auto portfolios, aligned with credit origination. Consequently, the acquisition cost increased 2%. Technical reserves rose 27%, in line with higher business generation. Claims grew 19% due to the growth and mix of the portfolio.

II. Management's Discussion & Analysis

Service Fees

1. Includes fees from transactions with annuities funds, warehousing services, financial advisory services, and securities trading, among others.
2. In 3Q23, interest charged on collateral for derivatives traded on the Chicago Stock Exchange was reclassified from the fees charged account to the interest income account.

Fees charged on services fell (2%) vs. 4Q23, given the seasonal strength at the end of the year. As a result, during the quarter there was lower transacting activity with affiliated businesses and electronic banking services; meanwhile, the balance of other fees collected increased mainly derived from the seasonality of the "Buen Fin" cashback promotion during the previous quarter. On ayear-over-yearbasis, fees charged increased 12%, due to the self-service boost through electronic banking services and higher transacting activity with affiliated businesses and in consumer products -in credit cards combining the Banorte and Tarjetas del Futuro operations-, reflecting the strength of private consumption.

On the other hand, fees paid fell (9%) in the quarter derived from the seasonal dynamism of commercial activity during the fourth quarter, reflected in lower interchange fees, mainly in the credit card business. On an annual basis, fees paid grew 11%, associated with higher interchange fees and lower leverage of the external sales force for credit origination.

Altogether, net service fees expanded 7% sequentially and 14% annually, at the group level. At a bank level, net fees increased 9% quarterly, and 12% vs. 1Q23.

Trading

Trading income fell (18%) sequentially, primarily affected by the valuation of cross-currency swaps, given the appreciation of the Peso, despite higher trading operations. Compared to 1Q23, it grew 151% due to currencies and metals trading, derived from the appreciation of the Peso against the Dollar and the Euro, mitigating the negative valuation in derivatives given the same exchange rate effect.