1st. quarter 2015 - investor...

1st. Quarter 2015

Investor Relations Jonathan Rangel • IRO • [email protected] +52 (55) 5228 9753 Israel Becerril • IR • [email protected] +52 (55) 5340 5200 IR Agency Alejandro Ramírez • [email protected] www.creal.mx • [email protected]

1 Investment Fundamentals

Growth Strategy 2

Margins and profitability

Funding

Exhibits

3

4

5

Agenda

Key Unique Attributes

Crédito Real is a leading financial institution in Mexico focusing on consumer lending with a diversified business platform that

includes: Payroll Loans, Durable Good Loans, Small Business Loans, Group Loans and Used Car Loans.

Target Underserved Market Segments Particularly the segments of the population that are disregarded by other financial institutions •A huge market opportunity

Distribution with on Site Presence that allows us to reach each customer • 10,000 sales reps

Strategic Alliances partnering with specialized operators • Unique business model • Generates efficiencies & flexibility

Scalable Business Model Developed credit analysis systems under customer based parameters •Flexibility according to each type of loan

Diversified Credit Platform that mitigates risks and integrates population to financial services

3

Competing with distributors with a loan portfolio and a regional presence

Invest in a partnership Establish a strategic alliance Exclusivity agreements

Customers walking into branches

Go for the Customer On site presence Train & develop sales forces

Fully integrated

Partnerships & Alliances Loan Portfolio Expansion Operating efficiencies

Standard credit analysis

Expert & parametric credit analysis developed according to each market segment considering customer behavioral patterns Credit committee for SME loans

Focus on high income population with high credit penetration

Focus on middle and low income population with low credit penetration

Unique product

Diversified Credit Platform

Source: (1) Crédito Real, CNBV, Companies filings. Size of the circle reflects size of consumer loan portfolio. Excludes Banco Wal-Mart, BNP Paribas, Banco Ahorro and Famsa CAGR from 2009-2012. Information as of 2013 not available

Business Model Summary

0%

2%

4%

6%

8%

10%

12%

14%

0% 10% 20% 30% 40% 50%

2013 Consumer Portfolio NPL Ratio

Crédito Real

Banorte

Compartamos

Banamex

HSBC

Santander BBVA

Bancomer

Findep (2)

Banregio

Banco Azteca

% Consumer Portfolio CAGR 2010–2013

HSBC

Banco Azteca

BanCoppel

Instead of Better to High Quality Loan Portfolio Growth (1)

4

Distribution Model

More than 10,000 sales reps. and a network of more than 80 strategic alliances

OUTREACH

RURAL TRANSITION SEMI-URBAN URBAN MID-CITIES BIG CITIES

63% of Bank Branches

Crédito Real Customers & Bank Branches by type of Population

Bank Branches

Crédito Real Customers

65% of Crédito Real Customers

Number of People 0 to 300,000 More than 300,000

Adults 54.3% 45.7%

DISTRIBUTION

INTEREST ALLIGNMENT PAYROLL DURABLE GOODS SMALL BUSINESS GROUP LOANS USED CARS

•50 % of interest income and risk

sharing

• 5% to 7% rebate

•30% operating margin •Equity share •5% to 7% rebate

•Equity share

•Exclusivity & Non-compete

•Exclusivity & Non-compete

•50 % of interest income and risk

sharing

5

• Founding members are founders of leading manufacturer in the Americas, MABE. • Also were shareholders of BITAL bank, sold in the 1990’s to HSBC. • GRUPO KON are founders of KONDINERO with over 60-year experience in

commercial, financial and real estate companies

Main Shareholders 46 % Free Float 54 %

Corporate Structure

100%

49%

49%

38%

23%

51%

Crédito Real

99%

Service Companies

6

Corporate Structure

• More than 350 employees.

• Distribution network with + 10,000 sales reps.

• Above 90 credit & collection analysts.

• More than 80 strategic alliances.

• Management with more than 15 years of experience.

• 4 Committees: Credit, risk and treasury; Executive; Audit and Corporate governance, nominating and compensation.

• 3 of 12 board members are independent.

Management Team & Alignment

Management Aligned to Creal’s Strategy

• All employees aligned with corporate strategy

• Management assessment program

• Compensation plans based on KPIs

Experienced Management Team

ANGEL ROMANOS / CEO

Founder of Crédito Real.

CEO of the Company since inception.

MBA from Wharton School of Business.

CARLOS OCHOA / CFO

CFO since 2015.

Previously COO of Credito Real since 2003, Planning Manager form 1997-2000 and from 200 to 2003 North Zone Operation Officer of Credito Real

Master’s degree in Economics and Finance from the University of Bristol.

PATRICIA FERRO / NEW BUSINESSES OFFICER

M&A Officer since 2013.

Extensive financial banking system background

Member of credit and risk committees of IXE and Banorte

LUIS RAMÓN RODRÍGUEZ / COO

COO since 2015.

Credit and Collection manager of Credito Real from 2012 to 2015.

Collection strategy manager of HSBC for Mexico and Latam

Engineering studies

LUIS CARLOS AGUILAR / PAYROLL COMMERCIAL OFFICER

Payroll commercial officer since 2009.

17 years with the Company.

MBA from IPADE.

JONATHAN RANGEL / IR OFFICER

IRO since 2013.

Former Comerci IR Officer 2010 to 2013.

MBA from IPADE, CFA Candidate Level III.

• Retention plans for key people

• Development and succession plans

7

Credito Real Stock Visibility

2014 Results

• New IR web site and Investor’s presentation with additional and valuable information, figures, transparency and a renewed image.

• Software implementation that allow us to track investors and analysts activities with Creal that provides a better response to investors community.

• Market maker and active buyback program • Developing specific information for equity and

fixed income investors • IR Agency that supports additional Creal

visibility

In 2015

IR Tools

• Increase liquidity to 3 MM USD • Increase sell-side analyst coverage and

investors data base

• Active participation in Investor Conferences and non deal road shows.

• Engagement of Top Management in IR activities

• Maintain 24 hours reply policy

• Daily liquidity from 0.7 MM USD in 2013 to 1.8 MM USD in 2014, L3M: 2.7 MMUSD

(more than 25 brokerage houses participate)

• MSCI Mexico Small-Cap Index

• Ranking in position #43 in the BMV Marketability Index and #41 in the IPC filter

• Sell-side analyst coverage increased to nine brokerage houses

• During 2014 Credito Real’s management team participated in…

• 15 conferences and 3 non deal road shows in Mexico, USA and Europe

• Increased our investor data base

• Nominated by Institutional Investor in the Latam Executive Team rankings best CEO, CFO, IRO and IR Department

8

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15

Trading in Millions

Trend Line

Historical Creal Trading in USD


Growth Strategy 2


Funding

Exhibits

3

4

5

Agenda

Growth and Diversification

10

CAGR 10’-14´ 40%

ROE 2014 25%

NPL 2014 1.9%

CAGR 15’-19’ 15% - 20%

ROE 25% – 30%

NPL 2% - 3%

62%

19%

7%

7%

5%

Payroll Loans

Durable Goods Loans

Small Business Loans

Group Loans

Used Cards Loans

Loan Portfolio Composition Expected CAGR

50% - 80%

30% - 50%

25% - 35%

10% - 20%

5% - 10%

77%

54%

9%

9%

9%

18%

2%

7%

3%

12%

3Q14 2019

27

.9 b

illion

13

.4 b

illion

14.5 billion

• New agreements to enter new markets (e.g. pensioners) • Further consolidation, cross-selling

• Increase credit penetration and add new retailers • In house credit card, telemarketing and e-commerce

• Fondo H: Increase sales reps and increase origination through brokers to reach new markets

• In-house brand: Increase sales reps and compensation based on origination and asset quality

• Increase strategic alliances with micro-lending companies • Generate efficiencies & increase profitability

• Drive & Cash grows of about 100 branches in Mexico • Enlarge dealers network • Exploiting USA-latino market

Growth Drivers

11

IMMEDIATE INCREASE IN YIELD AND ROE • Kondinero’s acquisition allows to improve yield by 440 bps.

GROWTH THROUGH DIVERSIFICATION • Diversify portfolio with federal government, health,

decentralized Institutions, CFE & Pemex. • Execute plan to reach pensioners

OPTION OF FURTHER CONSOLIDATION • Increase market presence by improving customer

service platform and product cross-selling • Economies of scale • In 2015-2017 acquire the remaining 51% of the two

other payroll distributors:

SYNERGIES CREATE LONG-TERM VALUE • Potential to bring down admin costs Ps. 50-60 million • Implement best practices • Decrease distribution cost

KONDINERO VALUATION HIGHLIGHTS • 18.7 million CREAL shares to pay 51% of Kondinero • Earnings per share remain unchanged

CONDITIONS TO BUY THE OTHER TWO DISTRIBUTORS • To be paid in Cash. Based on the trailing P/E multiple of

CREAL with a discount

Payroll Business Strategy

CREAL 3Q14 Kondinero Consolidated

Interest income (Yield) 26.3% 4.4% 30.7%

Return on Equity 24.9% 26.0%

Efficiency ratio 24.3% 6.7% 31.0%

Cost of risk 2.0% 0.2% 2.2%

Consolidation of Kondinero… Further consolidation and growth…

CREAL 3Q14 with 3 distributors

Interest income (Yield) 40.0%

Return on Equity 31.6%

Efficiency ratio 37.5%

Cost of risk 3.0%

12

Used Cars: Drive & Cash a New Business Model

Combines legal and technological advances to provide additional liquidity to an existing car owner while maintaining the use of the asset

Branch Investment • Available space of 60 to 80 m2

• 1 employee • Approx. cost $15,000 to $20,000

USD investment

POTENTIAL MARKET

Mexico current vehicle fleet 12 million cars

Potential market 20%

Target market 1%

Potential share 1% 24,000 cars

Average portfolio $1,920 MM

Mexico Expansion Actual Footprint

Drive & Cash Expansion

13

8

21

35

46

54

80

90

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Branches

¿Cómo Invertir en la Bolsa de Valores.mp4

PRODUCT DESCRIPTION • Originate loans for used cars in south USA

through a network of joint ventures with local dealerships

TARGET MARKETS • Hispanic / Latino – Low Income

DISTRIBUTION NETWORK • Through partnerships with local car dealers in

USA using their sales force to promote our loans.

• Assessing other states as Florida, California and Illinois

PRODUCT STATISTICS • Loan amount – US $13,000 • Term 40 months (3.3 years) • Avg. annual interest rate – 20% - 25% • Commercial margin 20% - 30%

• Tracking system to secure cars

MARKET POTENTIAL • Used Car loans for Hispanic customers is a big

market in USA (1)

Used Cars - USA

Source(1) PewResearchCenter “Mapping the Latino population”. US Census Bureau. Nielsen Company. Estimates for 2020

Market screening Potential Mkt USD %

Potential Market in Metroplex Area (Dallas)

1,300 million

Potential share * 45 million 3.5%

ORIGINATION PROCESS

Acquire car through auction

Upgrade car

Sale & financing of used car *The total USA used car loan portfolio is expected to reach between 100-200 millions USD in the following five years

14

Group Loans New Strategy

STRATEGY BEFORE STRATEGY AFTER

Interest Income 100% Net Income & ROA 1%

Interest Income 13% Net Income & ROA 6%

Integrated operations Origination through partnerships and distributors

In-house brand Network of regional operators to reach a national presence

Only clients of Credito Real Clients of Credito Real + Clients of partnerships + Clients of alliances

High distribution costs Efficiencies on Distribution Costs

Deteriorated efficiency ratio Improved efficiency ratio

160 clients per sales rep Target 220 clients per sales rep

267 promoters 804 promoters

74 branches 120 branches

$120 million loan portfolio $452 million loan portfolio

Smaller scale – Small market share

Larger scale – Larger market share New product introduction 15


Growth Strategy 2


Funding

Exhibits

3

4

5

Agenda

+

Asset Quality

LOW RISK = Mexico

• Cost of Risk **(Provisions / Loan Book) 2011-2014: 3.8% • Non-performing loans 2011-2014: 1.7% • NPL change: +50bps in NPLs, +100 bps in Cost of Risk • Annual cost of risk is approximately two times NPL**

Average NPLs comparison*

* Average LTM ended on March 2015, except group loans for banking sector that is until December 2014. Source CNBV ** Cost of risk includes charge-offs, provisions and recoveries (1) Reserves calculated as end of period allowance for loan losses divided by total loan portfolio

Stable Levels of NPLs with Sufficient Reserves (1)

17

Credito Real* Banking Sector*

Payroll 1.8% 3.3%

Durable goods 2.0% 5.3%

SME’s 3.1% 3.4%

Group loans 0.3% 3.6%

Cars 0.9% 1.9%

TOTAL 1.9% 3.3%

1.9% 1.9% 1.4% 1.6% 1.8% 1.6% 1.7% 1.5% 1.5% 1.5% 1.9% 1.9% 2.2%

2.2% 2.4%

1.8% 2.1% 1.9% 1.9% 1.9% 1.9% 2.0%

3.2% 3.1% 3.0% 3.2%

1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14 3Q 14 4Q 14 1Q 15

NPL Reserves / Total Loan Portfolio

Yield and return drivers

18

Yield Today* Yield 2019 Drivers

Payroll

29% 35% • Effect of acquiring 51% of Kondinero, Credifiel and

Credito Maestro

Durable goods

22% 21% • Higher credit penetration for low-income segments • Increased competition

Small business

14% 18% • Higher participation of in-house brand focused on

mom&pop businesses with higher rates

Group loans

18% 12% • Change of business strategy through consolidation of

regional players • ROA enhanced by earnings participation

Used cars

25% 30% • Yield is enhanced by higher Drive & Cash

participation

Average yield ROA

26%

7%

28%

8%

• Expected ROA 6% - 8%

• Expected ROE 25% - 30%

*Reported as of December 2014 YTD

Key Financial Indicators

Loan Origination(1) Collection(1)

Loan Portfolio

19 Notes: (1) Includes data from strategic distributors and joint ventures

Debt / Equity Ratio

5,518

7,069

8,832

1,854 2,345

2012 2013 2014 1Q 14 1Q 15

MX$mm

YoY Growth : 27%

2012 2013 2014 1Q 14 1Q 15

Payroll Durable Goods Small Business Group Used Cars

64%

1%

69%

53%

14% 6%

44%

11%

26%

10%

9% 19% 22%

6%

2%

48%

8%

20%

23%

1%

18%

1% 26%

MX$mm

0%

0%

YoY Growth: 32%

6,732

10,423

13,805

11,095

14,280

2012 2013 2014 1Q 14 1Q 15

MX$mm

YoY Growth : 29%

1.9

2.3 2.5 2.4 2.4

2012 2013 2014 1Q 14 1Q 15


Notes: (1) Net Interest Margin is calculated by dividing annualized financial margin by average quarterly total loan portfolio (2) Interest Income of 1Q14 includes a non-recurring item of 63.1 millions, excluding this effect Interest Income growth 28% (3) Excluding the non-recurrent item of 1Q14 Financial Margin increase by 35% (4) Excluding the non-recurrent item of 1Q14 Net income increase by 21%

NIM % (1)

20

2,090

2,724

3,327

799 943

2012 2013 2014 1Q 14 1Q 15

Interest Income MX$mm

YoY Growth: 18%

(2)

23.5% 22.8%

19.3%

22.1% 20.5%

2012 2013 2014 1Q 14 1Q 15

1,436

2,001

2,445

594 718

2012 2013 2014 1Q 14 1Q 15

YoY Growth : 21%

Financial Margin MX$mm

614

1,004

1,225

314 327

2012 2013 2014 1Q 14 1Q 15

MX$mm Net Income CAGR ‘12–'14 : 41%

YoY Growth : 4%

(3) (4)

Performance Metrics

Yield (1) Efficiency Ratio (2)

Capitalization ROAE

21

34.2%

31.1%

26.2%

29.7% 26.9%

2012 2013 2014 1Q 14 1Q 15

Notes: (1) Calculated as: Interest Income / Average Earnings Assets (2) Efficiency index consists of administrative and promotion expenses for the period divided by the sum of (a) financial margin and (b) the difference between (i) commissions and fees collected and (ii) commissions

and fees paid for the period (3) Yield of 1Q14 includes a non-recurring item of 63.1 millions, excluding this effect the Yield of 1Q14 is 27.4% (4) Excluding the non-recurrent item of 1Q14 Efficiency Ratio is 24.4% (5) Excluding the non-recurrent item of 1Q14 ROAE is 24.1%

35.2%

25.1% 26.8%

21.7%

34.1%

2012 2013 2014 1Q 14 1Q 15

(3)

(4)

53.4%

41.8% 38.8%

42.0% 39.6%

2012 2013 2014 1Q 14 1Q 15

27.9%

24.5% 24.7%

27.9%

23.7%

2012 2013 2014 1Q 14 1Q 15

(5)


Growth Strategy 2


Funding

Exhibits

3

4

5

Agenda


Diversify Funding Sources

Increase Debt

Capacity

Improve Cost of Funds

Asset Liability

Management

Improving Funding Cost

Funding Strategy Focus

23

30% 21% 3% 45%

Debt Profile

1,000-39%

1,225-48%

48% 48%

36% 30%

16% 22%

1Q 14 1Q 15

Ps. 11,297.6

Local Notes Credit Lines Senior Notes

Ps. 13,402.6

3.3%

3.8%

3.5%

4.3%

4.8%

3.4%

4.0%

4.0%

4.4%

4.7%

1Q 15

1Q 14

2014

2013

2012

Average TIIE Spread

8.7%

9.5%

7.5%

7.7%

6.7%

Debt Maturity Schedule as of 1Q15 (1)

1,465 1,100 200

1,944

1,553

234

320

5,687

2015 2016 2017 2018 - older

Local Market Credit Lines Senior Notes

Notes: (1) Does not includes de Fx effect and the accrued interests

Banking License Proposal

Opportunities Challenges

24

Strength Funding Sources

Increase funding capacity

Customer deposits

Rating Agencies – higher rate

Interbank lending

Stable funding during stress periods

Significant reduction in Cost of Funds

Regulatory Costs

Fees

IPAB fees

CNBV costs

Reporting

Capitalization Credit policies

Allowance for loan losses

Accounting CNBV criteria

Internal controls & external

auditors

Customers & employee filling

Disclosure / financial

information Regulated Sofom

Min 8% Net Capital = Equity OK OK OK OK OK OK

Banking Regulation Min 10.5%

Net Capital = Regulatory net capital

OK OK OK OK OK OK


Growth Strategy 2


Funding

Exhibits

3

4

5

Agenda

Payroll

Loan Description

Personal loans for unionized government employees repaid through direct payroll

•Unionized public employees C+, C and D+ •Average annual income USD from $6,000 to $10,000

• Avg. loan amount – MX$34,607 • Avg. term – 38 months • Avg. annual interest rate – 50% - 65%

50% shared with payroll distributors

• Payment frequency – Bi-weekly • Delinquency rate – 2.1% • Customers – 320,518 (63 % of total

Credito Real customers)

Market of approximately 7 million employees

Product Description

Target Markets

Product Statistics

Market Share

Unserved market

86%

Served market

14% Consubanco

Crediamigo

Crédito Real

Others

35%

20%

10%

35%

Distribution Network Network in rural & semiurban areas

CREAL ConsuBanco Crediamigo Infonacot Banks & other

Market share 35% 20% 10% NA NA

Product description

Personal loan linked to payroll (low risk)

Different products linked to payroll

Personal loan linked to a payroll or debit account

Distribution Network in rural areas

+ 4,00 sales reps + 250 branches

Integrated operations

Integrated operations

80 branches - Mid & Big cities

Branching network / Mid & Big cities

CAGR 35% 20% 35% NA NA

Interest rate 50% - 65% 50% - 65% 50% - 65% 44% 30% - 40%

Average Duration 38 months 36 months 32 months

Onsite presence Yes Yes Yes No No

Differentiators Exclusivity with

3 main distributors / 15 alliances

X X

Lower rates / poor service & complicated

loan application process

Smaller public sector presence / branch

network model

Origination and Collection Process

Competitive Landscape

50% interest income 50% risk sharing

Public Sector Employees

+ 260 agreements + 4,000 sales

representatives

Distributors

Government Agency

Collection Trust

Credit Analysis & Funding

Loan disbursement

26

Durable Goods

Loan Description

Product Description

Target Markets

Product Statistics

Market Share

Consumer loan portfolio CAGR (2010-2013) (1)

• Avg. loan amount – MX$14,409 • Avg. term – 12 months • Avg. annual interest rate – 40% - 50%

• Payment frequency – Monthly • Delinquency rate – 2.0% • Customers – 71,317 (14 % of total Credito Real customers)

B, C+, C and D

Loans to finance purchases of durable goods from selected retailers

Distribution Network

Well known retailers that uses own sales forces to promote our credit products

Evolution of Loan Portfolio

• Increase credit sales • Select new Retailers • Compensate Retailers with a

portion of interest income with no credit risk

• Crédito Real works as a financial partner and retailers focus on sales & promotion

• In house credit card, telemarketing and e-commerce

Strategy …

Retailers



40 retailers 1,071 stores

Over 70,000 customers

Source (1) Company filings presented to CNBV as of December 31, 2013, except Financiera Independencia and FONACOT which were obtained from public filings. Note: Credito Real consumer loans do not include payroll loans, small business loans, group loans and used car loans *CAGR from 2009 – 2012. Information for 2013 is not available. BNP Paribas refers to BNP PARIBAS PERSONAL FINANCE, S.A. DE C.V.SOFOM, E.N.R.

Non Banking Financial Institution Commercial Banks Average Commercial Banks

Collection Customer servicing

Loan disbursement 5% to 7% of interest income

% total Portfolio

27

Mar 2014 Mar 2015 2019 42% 38%

31% 19%

16% 15%

12% 11%

10% 6%

3% -6%

-36%

Bancoppel

Banco AztecaBanamex

SantanderCrédito Real

BBVAHSBC

BanorteBanregio

Famsa

Findep

Fonacot

BNP

10.1% 7.2% 9%

1,124 1,027

2,511 YOY -8.6%%

CAGR 9%

865 1,343

5,022

Source(1) Inegi (2009) and CNBV 2012

Small Business

Loan Description

Mom & pops and medium and little size business

SMEs represents 52% of Mexican GDP and 80% of labor force(1)

Product Description

Target Markets

Product Statistics

Market Share

• Loan amount – MX $50,000 - $15’000,000

• Term 3 - 36 months • Avg. annual interest rate – 18% - 35%

• Payment frequency – Monthly • Delinquency rate – 3.9% • Customers – 437

Loans for working capital to independent professionals and small businesses


Personal in-house brand and strategic alliances


Evolution of Loan Portfolio

• Increase strategic alliances

• Alignment of interest with distributors: sharing operating margins

• Exclusivity agreements

Strategy …

Funding 30% sharing of operating income

SMEs

In-house brand


Fondo H distributor

Business with Credit Access from Commercial banks

Business Classification

Number of Business with

Loans

Number of Business

Rate of Business with

Loans

SMEs 270,877 3,620,530 7.5%

Micro 225,207 3,472,155 6.5%

Little 36,571 125,376 29.2%

Medium 9,099 22,999 39.6%

Big 3,434 6,529 52.6%

Total 274,311 3,627,059 7.6%

Loan disbursement Collection

% total Portfolio

28

Mar 2013 Mar 2014 2019

YOY 39%

8.7% 9.4% 18%

CAGR 42%

Source(1) Prodesarrollo 2012-2013

Group Loans

Strategic alliances with sales representatives

205

357

1,953 CAGR 74%

CAGR 57%

Loan Description

Product Description

Target Markets

Product Statistics

Market Share


Loans to finance micro-business working capital requirements

Leaders of the market in terms of Loan portfolio(1) Only consider group loans

• Avg. loan amount – MX$3,241 • Avg. term – 3.8 months / 14.1 weeks • Avg. annual interest rate – 90% -

110%

• Payment frequency – Weekly • Delinquency rate – 0.2% • Customers – 110,212 (22.0 % of total

customers)

Women in suburban areas C-, D and E


Group Lending Presence Gradual & Constant Improvement

Key Distribution Metrics 120 branches 67 cities 20 states 804 promoters

Funding

Loan disbursement Collection


Promoters

Groups of 12-25 borrowers, all members warranty the

loans, disbursement of 10%

Customers

% total Portfolio 1.8% 2.5% 7%

29

Mar 2013 Mar 2014 2019

N o . C o mpanyLo an

P o rtfo lio

1 BANCO COM PARTAM OS 14.9

2 CAM E 1.1

3 FINANCIERA INDEPENDENCIA 0.75

4 FINCA M ÉXICO 0.6

5 TE CREEM OS 0.4

6 C R ÉD IT O R EA L 0 .3

7 SIEM PRE CRECIENDO 0.3

8 BANCO FORJADORES 0.3

9 INVIRTIENDO 0.3

10 FINANCIERA FELICIDAD 0.2

Distributor

Source(1) CNBV 2012 Demographic indicator: number of credits per 10,000 adults Note (a) New Car Loans

Used Cars

102 460

3,348 CAGR 351%

CAGR 70%

Loan Description

Product Description

Target Markets

Product Statistics

Market Share


Loans for used cars

C+, C and C-

• Loan amount – MX $50,000 - $200,000 • Term 1 - 48 months • Avg. annual interest rate – 25% - 35%

• Payment frequency – Monthly • Income from insurance • GPS systems to secure cars • Delinquency rate – 0.8% • Customers – 4,566

Car loans have the lowest penetration on the loan products of Banks (1)

Loan Products of Commercial and Development Banks

Type of Product Number of

credits Demographic

Indicator

Credit Card 25,906,995 3,108

Personal Loan 7,893,557 947

Payroll Loan 4,012,045 481

Group Loan 2,749,692 330

Car loan (a) 669,685 80

Mortgage 1,093,208 131


Used Cars Loans Presence Evolution of Loan Portfolio

Credit Analysis

Car Dealer

Approved

× Not Approved

Customer

Key Distribution Metrics 47branches 18 distributors 14 states

Partner CR Fact

Funding 5% to 7% of interest income

Funding Financial Statement Consolidation

30

Strategic alliances with car dealers that use own sales forces to promote our credit products and partnership with 47 branches in Mexico

% total Portfolio 0.9% 3.2% 12%

Mar 2013 Mar 2014 2019

Distribution Model

• 320,518 clients • 266 agreements • 30 states • 80 cities • About 40% of

historical renewal rate

• 18 different distributors & partner in 3 leading loan originators

• More than 4,000 sales representative • More than 100 telephone operators

• 40 different retailers • 1,071 stores • Continuous sales force trainee • More than 7,400 sales reps.

• 71,317 clients • 117 cities • 16 states • Approval rate around 60%

• Personal in-house brand • 13 sales reps.

• Financing around 200 business including: manufacturing, distribution and services sector

• 2 states • High customer retention

• Mom and pop stores • Focus on Mexico city • ~250 business

• Fondo H, presence in Mexico City and metropolitan area

• 3 sales reps & brokers

• 2 Partnerships & 1 Alliance • 120 branches • More than 804 promoters

• 18 distributors • One Partnership with 47 branches in

Mexico City suburbs • One strategic alliance in USA • More than 200 locations

• 110,212 clients • 67 cities • 20 states • Groups of 12 to 25

borrowers • About 60% of renewal rate

• 4,566 clients • 14 states

DISTRIBUTION ALLOW US TO REACH INTEREST ALIGNMENT

• Interest income sharing 50% • Risk sharing 50% - principal of

account past due > 180 days • Exclusivity & Non-compete.

• Rebate from 5% to 7% of future interest

• Paid up front with no credit risk

• Operating Margin sharing 30% (interest income – interest expense – provisions)

• Exclusivity & Non-compete.

• 38% & 23% equity share

respectively in each Partnership

• Rebate from 5% to 7% of future interest • Paid up front with no credit risk • 51% equity share in Partnership • 50% interest income & risk sharing 31

Market Segments Main Competitors % Total Population Banking Penetration CR Segment Focus

6.8% 96%

14.2% 83%

34.1% 57%

44.9% 25%

Customer Profile & Market Segmentation

Customer Profile

Market Segmentation

A&B

C+

C & C-

D&E - Live in suburban, urban and

rural areas that represent 97.0% of total localities

(<300,000 people according to INEGI) with a concentration of

54.3% of total adults

- The 86.7% of expenditure is for consumption,

housing, transport, health and education

- To reach a loan for 2,200 USD our customer must

save 20% of their available income for 1.5 years

- Annual average available income

of 7,100 USD

32

Market opportunity

Source: World Bank and Euromonitor. Data of Consumer Loan Penetration to 2013, except Mexico that is for 2014. Data of Credit Penetration to Private Sector to 2012, except Canada

that is to 2008

Note 1: Population utilizing banking services. Income level by bracket (approximate annual amount in USD):

“A/B” +108,400; “C+” 76,500; “Cm/C” 29,700; “D” 8,900; “E” 3,400.

Source: CNBV 2012, Agustin Carstens (Central Bank Minister)

Low penetration of credit Limited access to banking services

Strong Government Support

Canada USA Germany Brazil Colombia Mexico

26.2% 24.3% 13.6% 12.7% 9.0%

4.1%

128%

184%

101%

68%

52%

28%

Consumer Loan Penetration as % GDP Credit Penetration to Private Sector as % GDP

A&B

C+

Cm to C

D&E

8.0

16.6

39.9

52.5

21%

79%

96%

83%

57%

25%

Target Market 2013

Population Segment Population (mm) Bancarization (1)

Financial reform should double the current credit penetration as % of

GDP within the next 5 years

• SME credit guarantee program allows to limit loss severities to 50% of the principal amount. • Crédito Real is in process to guarantee part of its SME loan portfolio

28%

56%

Actual 2019

Evolution of Population

81% 79%

2000 2013

Cm to C, D & E A, B & C+

19%

21%

Population (mm) Population (mm)

18

79

25

92

Target Market

Source: AMAI 33

Crédito Real Mexico (1) Brazil (5) Colombia (6) USA (2) Canada (3) Germany (4)

Benchmark 3.00% 11.00% 3.25% 0.25% - 1.00% 0.25%

Credit Card 21.5% - 65.0% 76% - 323% 20.2% - 31.9% 10.3% - 28.0% 14.6%

Mortgage 10.9% - 17.3% 11.90% 7% - 13% 3.50% 1.6% - 3.5%

Payroll 50% - 65% 24.4% - 123.4% 20.0% 30.0% 9.0% (c) 9.0% (c)

Durable Goods 40% - 50% 69.3% 38.6% 10.5% 3.3% 3.0%

SME's 18% - 35% 14.5% (a) 11.7% 8.2% 7.5% 2.9%

Microcredit 90% - 110% 90% - 205.5% 22.0% 30.9% 11% - 17% 8.5%

Used Car Loans 25% - 35% 10.4% - 16.4% (a) (b) 22.8% (b) 20.0% (b) 4% - 7.5% (b) 5.5% - 7.2% (b)

1 Source: Banxico, Condusef, Profeco, IMCO, CAME (2) Source: FED, Credit Cards Survey, CBS, Bank rate (3) Source: BOC, Car Loans Canada. 4 Source: European Central Bank, European commission (5) Source: BACEN, Bloomberg, Economic Commission for LATAM and the Caribbean. 6 Source: BANREP, Superintendencia.

Notes: (a) Commissions not included (b) Interest rates for new car loans (c) Interest rate for personal loans

Interest Rate Comparison

34

Financial Information – Balance Sheet

Balance Sheet

1Q'15 1Q'14

Without non-rec.

1Q’14 Non- recurr. items

1Q’14 Var %Var 2014 2013 2012 Var % Var

Ps. Million

Cash and cash equivalents 93.1 101.8 - 101.8 (8.7) (8.6)% 53.8 126.9 85.2 -73.1 -57.6%

Investments in securities 772.2 2,110.9 - 2,110.9 (1,338.7) (63.4)% 1,251.2 646.2 346.8 605.0 93.6%

Securities and derivatives transactions 1,180.6 14.7 - 14.7 1,166.0 7,950.2% 950.3 230.1 241.5 720.2 313.0% Performing loan portfolio Commercial loans 13,964.3 10,928.3 - 10,928.3 3,036.0 27.8% 13,544.3 10,265.0 6,625.6 3,279.3 31.9% Total performing loan portfolio 13,964.3 10,928.3 - 10,928.3 3,036.0 27.8% 13,544.3 10,265.0 6,625.6 3,279.3 31.9% Non-performing loan portfolio Commercial loans 316.0 166.4 - 166.4 149.6 89.9% 260.6 158.5 106.9 102.2 64.5% Total non-performing loan portfolio 316.0 166.4 - 166.4 149.6 89.9% 260.6 158.5 106.9 102.2 64.5% Loan portfolio 14,280.3 11,094.7 - 11,094.7 3,185.6 28.7% 13,804.9 10,423.5 6,732.5 3,381.4 32.4% Less: Allowance for loan losses 454.3 225.7 - 225.7 228.6 101.3% 420.1 203.2 141.3 216.9 106.7% Loan portfolio (net) 13,826.1 10,869.0 - 10,869.0 2,957.1 27.2% 13,384.8 10,220.3 6,591.2 3,164.5 31.0%

Other accounts receivable (net) 1,624.0 2,351.9 - 2,351.9 (727.9) (31.0)% 1,156.2 2,390.4 2,504.3 -1,234.2 -51.6%

Property, furniture and fixtures (net) 75.9 26.4 - 26.4 49.5 187.2% 85.5 22.9 17.8 62.6 273.1% Long-term investments in shares 827.1 781.9 - 781.9 45.2 5.8% 859.0 786.0 752.5 73.0 9.3% Other assets Debt insurance costs, intangibles and others 2,152.5 655.9 - 655.9 1,496.6 228.2% 2,174.8 677.2 425.9 1,497.6 221.2% Total assets 20,551.6 16,912.5 - 16,912.5 3,639.1 21.5% 19,915.5 15,100.0 10,965.3 4,815.5 31.9% Liabilities

Notes payable (certificados bursatiles) 2,777.7 1,760.0 - 1,760.0 1,017.7 57.8% 2,571.9 3,041.8 1,751.0 -469.9 -15.4% Senior notes payable 6,789.7 5,506.7 (63.1) 5,443.6 1,346.2 24.7% 6,561.0 2,829.6 2,814.4 3,731.4 131.9% Bank loans and borrowings from other entities Short-term 965.1 2,037.6 - 2,037.6 (1,072.5) (52.6)% 1,120.3 1,950.1 1,562.4 -829.8 -42.6% Long-term 2,870.1 2,056.4 - 2,056.4 813.7 39.6% 3,140.8 2,130.8 719.6 1,010.0 47.4%

3,835.1 4,094.0 - 4,094.0 (258.9) (6.3)% 4,261.0 4,080.9 2,282.0 180.2 4.4%

13,402.6 11,360.7 (63.1) 11,297.6 2,105.0 18.6% Securities and derivatives transactions - 59.5 - 59.5 (59.5) - - - - - - Other accounts payable 12.2 16.2 - 16.2 (4.0) (24.6)% 51.9 14.6 17.8 37.4 256.7% Income taxes payable 1,477.3 861.7 19.7 881.4 595.9 67.6% 1,112.4 780.3 503.7 332.1 42.6% Total liabilities 14,892.1 12,298.1 (43.5) 12,254.6 2,637.5 21.5% 14,558.3 10,747.1 7,368.9 3,811.2 35.5% Stockholders' equity Capital stock 2,135.5 2,006.8 - 2,006.8 128.7 6.4% 2,135.0 2,016.2 2,017.2 118.8 5.9% Earned capital: Accummulated results from rior years 3,186.7 2,329.7 - 2,329.7 857.0 36.8% 1,977.4 1,326.1 935.8 651.2 49.1% Result from valuation of cash flow hedges, net 4.5 2.1 - 2.1 2.5 118.0% 5.6 7.0 29.3 -1.4 -20.2% Controlling position in subsidiaries 8.9 5.3 - 5.3 3.6 67.2% 14.5 - - 14.5 - Net income 323.9 270.5 43.5 314.0 9.9 3.2% 1,224.8 1,003.6 614.1 221.2 22.0%

Total stockholders' equity 5,659.5 4,614.5 43.5 4,657.9 1,001.6 21.5% 5,357.2 4,352.9 3,596.4 1,004.3 23.1% Total Liabilities and Stockholders' equity 20,551.6 16,912.5 - 16,912.5 3,639.1 21.5% 19,915.5 15,100.0 10,965.3 4,815.5 31.9%

35

Financial Information - Profit & Loss Statement

Profit & Loss

1Q'15 1Q'14

without non-rec.

Non-recurr. items

1Q’14 Var % Var

without non-rec

% Var 2014 2013 2012 Var % Var

Ps. Millions

Interest Income 943.0 736.3 63.1 799.4 143.6 28.1% 18.0% 3,327.1 2,724.5 2,090.4 602.6 22.1%

Interest Expense (224.6) (205.8) - (205.8) 18.8 9.1% 9.1% -882.3 -723.1 -654.8 159.1 22.0%

Financial Margin 718.4 530.5 63.1 593.6 124.8 35.4% 21.0% 2,444.8 2,001.4 1,435.6 443.5 22.2%

Provision for Loan Losses (77.6) (70.7) - (70.7) 6.9 9.8% 9.8% -264.5 -404.5 -272.8 -139.9 -34.6%

Financial Margin adjusted for Credit Risks 640.8 459.8 63.1 522.9 117.9 39.4% 22.5% 2,180.3 1,596.9 1,162.8 583.4 36.5%

Commissions and fees paid (23.0) (15.7) - (15.7) 7.3 46.7% 46.7% -99.0 -69.7 -69.5 29.3 42.1%

Other income from the operation 12.4 6.6 - 6.6 5.8 88.7% 88.7% 23.7 10.1 20.6 13.6 134.4%

Administrative and promotion expensses (237.2) (125.7) - (125.7) 111.5 88.7% 88.7% -629.6 -484.1 -480.5 145.5 30.1%

Operating result 393.1 325.0 63.1 388.2 4.9 20.9% 1.3% 1,475.4 1,053.3 633.4 422.2 40.1%

Income taxes (84.9) (74.6) (19.7) (94.3) (9.4) 13.8% (10.0)% -334.8 -241.6 -144.4 93.2 38.6%

Income before participation in the results of subsidiaries

308.2 250.4 43.5 293.9 14.3 23.1% 4.9% 1,140.7 811.7 489.1 329.0 40.5%

Participation in the results of subsidiaries and associates and non-controlling participation

18.4 20.1 - 20.1 (1.6) (8.2)% (8.2)% 84.1 191.9 125.1 -107.8 -56.2%

Net Income 326.7 270.5 43.5 314.0 12.7 20.8% 4.0% 1,224.8 1,003.6 614.1 221.2 22.0% 36

Financial Information – Ratios

Financial Ratios

1Q'15 1Q'14

Without non-recu.

1Q’14 Var 2014 2013 2012 Var

Yield 26.9% 27.4% 29.7% -2.9% 26.2% 31.1% 34.2% -4.9%

Return on Average Loan Portfolio 9.2% 10.1% 11.7% -2.4% 9.7% 11.5% 10.0% -1.8%

ROAE: Return on average stockholders’ equity 23.7% 24.1% 27.9% -4.2% 24.7% 24.5% 27.9% 0.2%

Debt to Equity Ratio 2.4 2.5 2.4 - 0.1 2.5 2.3 1.9 0.2

Average cost of funds 6.7% 7.7% 7.7% -1.0% 7.5% 8.7% 9.5% -1.2%

Efficiency Ratio 34.1% 24.4% 21.7% 12.4% 26.8% 25.1% 35.2% 1.8%

Capitalization Ratio 39.6% 41.6% 42.0% -2.4% 38.8% 41.8% 53.4% -3.0%

Provisions for loan losses as a percentage of total loan portfolio

2.2% 2.5% 2.5% -0.4% 1.9% 3.9% 4.1% -2.0%

Allowance for loan losses as a percentage of total past-due loan portfolio

143.7% 135.6% 135.6% 8.1% 161.2% 128.2% 132.2% 33.0%

Total past-due loan portfolio as a percentage of total loan portfolio

2.2% 1.5% 1.5% 0.7% 1.9% 1.5% 1.6% 0.4%

37

Disclaimer

This presentation does not constitute or form part of any offer or invitation for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.

This presentation contains statements that constitute forward-looking statements which involve risks and uncertainties. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition, and future events and plans of the Company. These statements can be recognized by the use of words such as “expects,” “plans,” “will,” “estimates,” “projects,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. You are cautioned not to place undue reliance on these forward looking statements, which are based on the current view of the management of the Company on future events. The Company does not undertake to revise forward-looking statements to reflect future events or circumstances.

1st. quarter 2015 - investor...

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