Good morning, everyone. Today we're presenting Regional's results for the second quarter of 2026, which reflect disciplined execution and continued focus on operating performance in a more demanding environment.

Mexico's economic performance has been challenging. GDP growth has slowed, and trade policy uncertainty continues to weigh in on business confidence and translates into more cautious credit demand, particularly among wholesale clients.

Against this environment, our priorities have not changed. We continue to expand selectively in key regions, maintain strict cost control and underwriting discipline.

Net income for the quarter reached 1,526 million pesos, 7% below the same quarter last year. Return on average equity stood at 17.7% on last 12-month basis.

While the lower rate environment has compressed absolute margins, profitability still remains at solid levels. On margins, as we anticipated in our previous call, the first quarter marked the low point for our net interest margins.

Quarterly NIM recovered 7 basis points to 5.8%, driven by repricing of our liabilities and supported by the protection provided by our fixed rate loan portfolio and our investment securities portfolio acting as a natural hedges. While gross NIM has faced pressure, our adjusted NIM net of provisions remains solid.

On growth, total loans grew 11% year-on-year with particularly strong momentum in Mexico City, where the wholesale portfolio expanded 28%. This was driven by our new sustainable growth pace in Mexico City, expanding our branch network and enhancing our corporate team alongside some large corporate operations unique to the capital.

We expect this healthy growth in regions to continue at a rate of 10% to 15% annually. Core deposits grew 16%, and our CASA ratio stood at 45.2%, 370 basis points above the previous quarter, supported by 11% year-on-year expansion in demand deposits.

Regarding funding, the wholesale time deposits grew, we're actively shifting our focus toward transactional banking and payroll services to attract lower-cost demand deposits. We have launched a comprehensive funding offensive across multiple initiatives directly targeting cost of funds compression.

Asset quality remains resilient during the quarter. Our consolidated NPL ratio stood at 1.4%, a 16 basis points improvement year-on-year, while the cost of risk remains stable at 1.0%, both metrics reflecting the discipline on our underwriting standards.

We continue to monitor credit trends closely, particularly given the current macro environment. Let me also address the increase in commercial Stage 2 loans, which reflect 2,791 million pesos this quarter.

This reflects the migration of small number of wholesale clients. We are working closely with each of these clients.

We do not expect significant impact on our NPL ratio from these migrations. To put this figure in perspective, total Stage 2 loans represent 1.8% of our total portfolio, and our coverage stands at 1.4 times the non-performing book.

Our diversification efforts continue to show progress. Net fees grew 9% year-on-year, led by cards and merchant fees 15%, which now represent over half of our net fee income.

Insurance income grew 7% year-on-year, moderating from our exceptionally strong first quarter. In total, non-financial income grew 3% year-on-year, continuing our progress toward a more diversified revenue base.

Operating expense grew 7% year-on-year, driven primarily by technology investments and geographic expansion, both deliberate decisions that support our medium-term growth agenda. This resulted in efficiency of 43.5%, a 264 basis points increase year-on-year.

As investment cycle matures, we expect expense growth to continue moderate and efficiency to improve progressively. As AI continues developing better tools for developers, we're constantly adjusting our development force and now adjusting 60% this quarter without compromising the output.

Finally, Banco Regional's capitalization ratio stood at 15.2% as of May 2026, 83 basis points higher year-on-year, a solid position that supports our growth plans. Our capital ratios currently include our excess buffer.

At our October board meeting, we expect to propose a temporary increase in our dividend payout ratio above 50%, not as a permanent change, but as an adjusting to reflect this excess capitalization. As loan growth accelerates in the coming quarters, this excess will be absorbed naturally, and the payout ratio should normalize.

As for Banregio, the wholesale loan portfolio grew 12% year-on-year, with particularly strong performance in Mexico City up 28%, Jalisco 14%, and we have seen some moderation in origination demand and business adopt a more cautious stance, a trend we believe in sector-wide is consistent with macro environment. On the funding side, wholesale deposits increased 70% 70% for year-on-year, reflecting the strong institutional client activity, and demand deposits grew 17%.

Wholesale and asset quality remains excellent. The NPL ratio stood at 1.1% and 27 basis points better than a year ago, with a cost of risk stable at 0.4%.

Retail banking continues to show healthy momentum. Preferred banking deposits grew 13% year-on-year, reflecting solid client engagement and trust.

Our branch network continues to expand in a disciplined manner, focused on high-potential locations. On the lending side, consumers grew 14% year-on-year and mortgages 9%, a clear indicator of client acquisition and deepening relationships.

Asset quality in retail remains solid overall: auto at 0.7%, consumers at 2.8%, improving 10 basis points, and mortgages at 1.1%. In our SME, NPL ratio improved 3% this quarter.

As for Hey Banco, continues to advance strategic focus on profitability over pure growth, prioritizing higher-quality customers over volume and discipline delivering results. Hey has found a sweet spot by shifting our focus on SME and auto loans.

We have achieved a NIM total loans of 10.7%, up 225 basis points year-on-year. Net income for the quarter reached 70 million, up 241% year-on-year basis.

The financial margin reached 287 million, up 25% year-on-year. NIM reached 2.7%, excuse me, 10.7%, 225 basis points higher than a year ago, reflecting improved asset yields and a more profitable customer mix.

The efficiency ratio stood at 58.7% and a last-12-month basis of improvement on 838 basis points year-on-year, and automation and digital capabilities continue to scale. Our active individual customer base stands at approximately 483,000, excuse me, 438,000, down 14% year-on-year, consistent with our strategy to prioritize in quality over scale and shifting our growth of clients to SMEs.

Our priority on Hey is now firmly on credit growth, particularly SME lending, which is where we are strong in competitive advantages. SMEs are at least contested segment in digital banking, and we're have a natural edge given our background and infrastructure.

We're focusing companies that are collaborative service, and we are the only digital bank offering the full array of financial products both for individuals and sole proprietors and SMEs. Competing for lower-margin, higher-operating-costs individual customers with intense competition does not make sense when SMEs are far more attractive for our platform.

We have sufficient funding to support this credit expansion, and our roadmap is clear: scale the lending book, not the user count. This commitment to financial strength has been recognized by Moody's, which reflect they assigned Hey Banco on AA+ rating.

Guidance for 2026 reflect a deliberate investment cycle and more challenging macro environment, both of which we anticipate, which gives us confidence that going into the rest of 2026 is not headline growth rate, but on underlying quality of the franchise. Asset quality remains resilient.

Hey Banco is continued the profitabilities, and our core business continues to generate consistent growth. Before moving to Q&A, let me alter the guidance 2026.

We are updating three metrics: NIM, net income, and ROE, and keeping the rest of our guidance unchanged. On NIM, as I mentioned, this exceptional recovery is unfolding as we've anticipated, but the recurrent pace of rate cuts, its magnitude will not be sufficient to bring the full-year margin back to our original range.

We are therefore revising our NIM guidance to 5.6% to 6.0% from 6.0% to 6.3%. As a consequence, we now expect net income growth of -5% to 0% for the year from 5% to 10% previously, and the ROE of 16.5% to 17.5% from 18% to 19%, still healthy levels of profitability for this environment.

Everything else remains unchanged. We continue to expect loan growth and core deposits growth from 5% to 10%, NPL ratio 1.8%, and the cost of risk between 0.8% and 1.0%, reflecting our confidence in asset quality.

We maintain our efficiency guidance around 42%. We believe this updated guidance provides a realistic foundation for the remainder of 2026 and reflects the same principle that has always guided us: consistent execution and long-term value creation.

Thank you very much. We appreciate any questions.

Hi, everyone, and thank you for the opportunity of making questions. We saw a stronger commercial loan growth during this quarter, and from what we saw, it was largely driven from the financial sector, right, financial institutions.

I have two questions on this. First, was the pick up somewhat opportunistic or does it reflect a broader strategy to gain share in segment?

Perhaps competition is not as tough as there or any other remarks in that sense. Second, was this change in mix the main factor harming the NIM recovery for 2Q and leading you guys to reduce the guidance for NIM in 2026, or there were other factors at play, such as increase in repos, issues securities, which made the bank a little bit more liquid?

Thank you very much.

Thank you, Ricardo. There is not a change in terms of customers.

As we have mentioned in previous conference calls, which are some of the larger SOFOMs or leasing companies in Mexico, mainly from other banks, and also from the automakers. Just they required more loans, or the demand for loans this quarter was higher.

Are the same customers; we are not changing the strategy, and we are not going to a new segment, a different type of financial entities. Partially is linked in the second question, if you see by the breakdown, the government and financial grew faster, but also the wholesale grew.

This has an impact on the NIM, but because they are loans with a lower rate, active rate, but also the mix of funding. If you saw May, you could notice an improvement on the checking accounts or demand deposit accounts on June.

It was not enough to average the whole quarter. That's why we expect to improve if we maintain that new mix that you see as the final balance in June.

It will improve the margins for the next quarters, and we will be able to reduce repos and what we call our more expensive type of term deposits, time deposits, that are mainly from private banking that will be part. We increase deliberately, in a deliberate way, the issuance of debt for the leasing company, as we decided to have more liquidity on the leasing company available for growth, even though is not growing the leasing yet.

We are, as Manuel mentioned, focusing heavily on grow the leasing and all the fixed-rate types of lending.

Thank you very much.

Thank you to you.

Hi, Manuel, Enrique, and Alejandro. Thank you for the opportunity.

I have also two questions on loan growth. Can you give us some color on the decision to maintain your guidance range for the year, right, because this quarter you had above your guidance range, 11%?

If you also comment how are you seeing the pipeline and client demand if you could give us a breakdown for each portfolio. The second question would be regarding the 2027 expectations, if you could give us some color regarding the USMCA pipeline, if should expect an acceleration for next year.

What is the base case here? Thank you so much.

Okay.

We decided to maintain the guidance in 5% to 10% mainly because we expect to be close to 10%. The fourth quarter is challenging in terms of comparison as a base.

Also, as I mentioned and we mentioned in the first quarter, and you can see on government, we usually do not lend to government. That was opportunistic on December and January this year, 3 billion, 3,000 million pesos, that could happen again, but is not something that we are pursuing.

It was an invitation from the government to all the banks, not exclusively to Banregio. It's a syndicated loan where more than 10 banks participate.

Then, aside that 3,000 million pesos, everything else is organic. As you can see on the wholesale loan book, 7%, that's the figure that if it grows above 7% to 10% or 11% without government, maybe we could reach above 10%.

Right now, we feel comfortable maintaining the guidance. We don't see any reason to increase 1% or 2% for just a probability to achieve it.

We see very feasible the 9% or 10%. We are not sure about 11% or 12%.

Or 2027, yeah.

For 2027, we still don't have a formal guidance, an official guidance, but after the USA elections, and it looks like the new normal is that we'll be reviewing the USMCA every year, we expect to have a higher demand on loans, not on an specific sector. As we are participating a lot in industrial parks and industrial warehouses.

Then, we expect the demand to increase on the second half of the year, but more importantly, next year, up to now. We hope there is no new surprises or new unexpected events during the next six months.

Thank you so much, guys. Super clear.

Thank you.

Thank you. Hi.

Good morning, Manuel, Enrique, and Alex. Thanks for the opportunity to ask questions.

My first question is on your new guidance. Just wondering what could be the key drivers to expect a stronger second half.

Also considering the annual revisions of the USMCA and the softer economic backdrop, how should we think about the earnings growth next year? I know it's too early to have a guidance, but this year the earnings have been affected because of NIM pressure on the lower rates.

It seems that the rates are already on hold for the next year, just wondering if we could be more constructive in earnings next year. That's my first question.

My second question is on Hey Banco. We saw it delivered again a net profit of 70 million pesos, although it is decelerating from what we saw in the first quarter.

Also just wanted to see what could be the drivers for Hey in the second half, if there's some seasonality to think it could be a little bit better from what we saw in the first half. Also, if you have some targets of how should we think about Hey contributing to Regional in the next years.

Today, it's around 5%, just wondering if there's a target it could represent a little bit more in the next years. Thank you.

The drivers right now for the improvement on the second half is the growth that we already have on or had in loans that will be maintained and even will continue growing the the loan book for the next six months. We are making a lot of efforts within the small and medium businesses segment who are more profitable because they have a higher active rate.

We still don't want as as as we have already missed this this quarter, we feel we don't have enough information to guide something about 2027 earning per share gains or total net profit. If everything is the same, or as they say, ceteris paribus, could be very in line with the growth of the loans.

Most of the repricing has already happened both in assets and liabilities. Even with some new customers that we have been changing the rates, the second half doesn't reflect any improvement, answering the first part of the question.

If we maintain that for the all full 2027 will be between 5% and 6% improvement. Also considering that will be a full year with this effective tax rate that we have due to the IPAB, not the non-deductibility in the taxes.

That's why maybe it's not the the 10% or 8%. We expect a similar year, 5% to 10% growth in in loans, and that will be similar on net income.

There are not another change is the increase on the technology expenses year-on-year will not grow, even is being reduced very slowly, but is is is improving. What was the second?

Hey Banco, sorry. Hey Banco, well, Hey Banco in in the first two quarters, there are some issues, or items, not issues, because there are no issues, items that are still adjustments from the spin-off, or the customer migration.

Taking that out, we expect also a second quarter a third quarter and fourth quarter more similar to the first one, around 80 million pesos per quarter. The aim is is still the same that we have said from the beginning, 5% to 10% of the contribution.

This year could be because it's it's smaller than expected the the total profit, around 5% or 4.something for this year. For the next year, the goal is still 5% to 10%.

Perfect. No, very helpful, Enrique.

Just, can I ask a last question? What would be the main key risks that you are perceiving for the second half and next year?

The main what?

The main risks.

[foreign language] We don't have visibility for second half of the next year. We don't have elections; we have midterm elections, but we don't see any risk in either way of the results of the midterm elections.

We don't see an improvement, but also we don't see any deterioration on the USMCA negotiations. Then, we don't see any specific different risk than the ones we already have.

Perfect. No, fair enough.

Thank you very much, Enrique.

Thank you to you.

Hi, team. Thank you for the opportunity to ask questions.

I have two. The first one is that, obviously, the guidance you just presented points to an efficiency ratio around 42%, yet, I would say, the run rate for the first half of the year is higher.

Just wanted to check with you what gives you the confidence that it can improve from here, given the revision downwards in terms of NIM and also what you're seeing in the other segments. Just wanted to check with you as to why are you, I would say, a bit optimistic on the improvements on the efficiency side?

Then I just wanted another second question, if I may, that is a bit more qualitative. We have had a couple of downward revisions in terms of guidance, right, in the last quarters.

If we do a post-mortem, just wanted to ask you, in your view, what has been the key drivers here? Is it was it the NIM?

Is it that conditions in terms of growth were worse than you were expecting? Is it, I don't know, fees?

Just looking backwards, what would you say was the main driver of this downward revisions? Thank you.

I will start with the second one. Last year was directly that in our initial budget and guidance, we didn't consider as many reductions on the rate as happened last year in '25.

Then, it was we were expecting 100 basis points and were more than 200 basis points. As we are asset sensitive to the rate, and that drove the change in guidance.

This year was different. We consider some on the other income as recurrent and were not recurrent.

In terms of NIM, that is the main driver of the change, the the mix. The first quarter, specifically, was pretty bad in checking accounts with zero cost.

It not only didn't grew, it it was reduced, and we were not expecting the mix. Also, as I mentioned in the first quarter conference call, we have some impacts that we didn't put in place on the NIM with the spin-off, as Hey Banco was migrated 14,000 million pesos.

That was lost in Banregio liquidity levels, and Banregio has to increase the the funding to maintain a healthy or at the the risk expected level. We have around 115% liquidity index, the CCL.

Then, that affected the whole mix. We are adjusting, as we are evolving through the year, to these issues.

We don't see any negative mix on funding, and we don't see any further reduction on the rate that will impact also the asset rates. That's why we're more confident, and we are that's also why we didn't guide within the 0% in the middle.

We guided below that to ensure that we we are considering this these two main items. Efficiency, well, maybe we we have been vague, and and I want to clarify.

We say around 42%. If it's 42.something.9%, we feel we are on guidance.

Maybe that's not clear. We expect improvement on the year-to-date year-to-year comparison.

As we mentioned, we did during last quarter, the last quarter of the last year, some reductions, but it was the cost of the layoffs, the severance payments. This year, we we don't see that level of that amount in the whole bank.

Manuel mentioned for some small areas, or some areas, not small, but some areas. That's one part.

The other part is we are finishing the the number of branches. We expect to open 14 new branches on this year.

We already opened seven; we are expecting seven more for the second half. Last year, we opened 15, and were more the the increase on expenses were higher.

We don't expect to reduce expenses, but we expect to reduce a lot the growth of expenses. As you can see, right now is 7% or 9%, depends what what you see or which lines, but is already below is already one single digit, and we expect that to be maintained.

Our main fixed cost is branches and everything that that is included there: depreciation, rents, and people. The other 1/5 is IT investment that is being amortized.

No,

super clear, Enrique. If I may, just a final follow-up.

Given what you replied to Ernesto on the potential pace of growth in earnings, I think maybe in previous calls, we had the notion that the sustainable ROE were to be anywhere between 18% to 19%, right, high teens. I just wanted to check with you if, given that you're expecting, I would say, okay, decent growth, but not stellar, not double-digit, or not way above double-digit, that if you think maybe for '26, '27, the ROE level should be closer to your actual guidance, right, which is around 17%?

Yes, between 17% and 18%, if you consider only these two years. Also, as Manuel mentioned at the beginning, maybe, and it's just a maybe, we could pay a higher dividend, that as we have only CET1 capital, or basic equity capital.

Then, if we pay a higher dividend that the one that is already in place expected of 25% payout of the last year, then that will help to have a better ROE for the next year. No,

very clear. Thank you.

Hi. Thank you for taking my question.

Can we touch a bit upon asset quality and the cost of risk, which has been slightly elevated? You probably still come within range, but it seems like more towards the higher end of range, the guidance range for cost of risk.

Does that sound reasonable? How are you seeing the asset quality trends evolve?

Any pressure that you might be noticing in any particular sector?

Yes. In terms of the cost of risk, we decided to maintain the guidance, even though we have been for four quarters just below or a little bit above the the higher end of the cost of risk.

Is still very sensible to to these large loans that, for example, the ones that this quarter moved from Stage 1 to Stage 2, they are already controlled. It is mainly even a a lack of discipline to follow some of these customers as they are very large.

Even a couple of days of delay on the payment have impacts. We we don't see any any deterioration there from Stage 2 to Stage 3, specifically in these large customers on the wholesale segment.

That's that's the main reason we If we take out these large customers out of the equation, even though are part of our portfolio, we see more close to 0.9% our recurrent cost of risk. We don't see any deterioration in in the other portfolios.

Sometimes you you can see the quarter quarterly some increases, like SMEs this quarter increased 20 basis points, but then it reduced, and we don't see any significant deterioration. We we believe that that we can maintain the the 0.9% that is our goal, and to have some range for one.

In terms of risk on any sector, not the the our largest loans, and that's the reason that usually when we talk about specific cases, usually they are on the real estate sector, on construction. Because it's real estate, they have good collaterals, and we have a a a very good relationship with this large customers.

Then, we we don't see as a generalized risk. It's it's it just happens that are the largest ones on our loan book.

Then, any issue with this customers on the collection or any liquidity problem that they have temporarily, it affects. Then when the the loan is solved or the customer pays the two or three months that is behind, then the provisions go back.

If you remember, I remember December '24 that we recovered two very large loans, one via collection and the other one it was '25, sorry. One via collection and the other one via foreclosed, and then we have free of provisions.

Very clear. Thank you so much, Enrique and Manuel.

Thank you, Neha.

Hi, Enrique, Manuel, Alejandro, everybody. I have a first one just near NIM guidance.

Just to understand the worst-case scenario that can happen here, Enrique or Manuel. I think in the first two quarters, you have been running around 5.7%, 5.8%, closer to the midpoint of the new revised guidance.

Still, you have like 5.6% here in the guidance. From what I understood from Enrique saying previously, demand deposits improved.

This was good in the quarter. We never know what's going to happen, but I think the message was more positive on funding here.

I am just trying to understand what can go wrong for this NIM to come down in the second half. Is this competition, is the funding that maybe we're going to see more challenges?

Just trying to understand the NIM risk given the low end of the guidance, and then I can ask a second question. Thank you.

Yes. In terms of assets, we are on, I would say, the lowest level.

It could improve. In both sides, it's mix.

The answer, the short answer, is mix. In the asset side, if the corporate and government loans grow faster, as happened in this first quarter or first half, that could change.

We are not aiming proactively. Corporates, yes; government, not.

We are seeing an improvement mainly in small businesses, even though is a small part of the loan book. We maintain our expectation to grow above 15% on the whole year.

Then, we don't see more deterioration that already happened. That is if there is not a new cut on the rate.

In the funding side, it's also mix. If we manage to maintain the growth in checking accounts, in demand accounts, with all the initiatives that we are doing, promotions and active managing the pipeline of the customers, payroll, and we are many initiatives.

We counted like 11 different current initiatives to increase the demand deposits. The worst case, as you say, is if we continue reducing the proportion of checking accounts and increasing expensive time deposits or increasing more the bonds, the debt, in the leasing company.

That will be the worst-case scenario. It's not that we don't have access.

Still we have excess of liquidity, but the excess that we have is moved to repos or to mutual funds to bring back to the time deposits is expensive.

Got it. Basically mix and mix, not like you calling for more rates or anything like that.

It's a little bit like the worst case would be you having mix on both liabilities and assets. If I may, a second question here, Enrique.

If you can give an update on the strategists for the Banregio operation. You mentioned the branches that you opened.

I remember a lot of focus back in a day in Mexico City. You hire bankers, you train bankers.

When should we start to see those things? If you can give us an update and maybe when this can translate into Banregio growing above the industry or maybe more fees, because when we go to your ROE that is lower today, there are many headings, right, to the question before from Brian, right, like will ROE go higher or not?

ROEs are lower. You can improve your ROE via leverage.

I think, I don't know, looking here to your P&L, there was a lot of expenses on your P&L in the coming years, right? Maybe the way I'm trying to ask about your strategy is, could we start to see more revenues, could we start to see those branches paying off?

Just trying to get where we are, because maybe we are in the cycle, like the lowest part of your investment cycle, and maybe we are getting closer to start to see the better things here, right? Just broad question on the strategy, but I want to understand where we are on this investment cycle for Banregio.

Thank you.

Yes. As we always split the strategy in Banregio in wholesale and retail banking, in retail is where we are growing branches and we are growing our presence in cities, not only in Mexico City is where we have opened more branches.

In Guadalajara up to now than in Mexico City, we have in Guadalajara 20 on the city, plus the ones in Puerto Vallarta, then we have like 25 in the state of Jalisco. Most of them are reaching the breakeven before our target of 14, 13 months.

That is breakeven, is not payback. Payback is taking longer than expected.

Our goal it was 24 months, is not being reached; is more than 36 months, the payback period. The breakeven is getting there.

Then, as we are slowing the new branches, not stopping, we still have four more in pipeline for 2027, maybe will be eight, as we are being more careful selecting the specific points and all the approval process to ensure that all of them are really good points that will reach profitability. We expect below 12 months, but right now the average is 13 months.

Then, that will stop the growing of the expense, and we'll in time see in the retail sector the improvement. In the wholesale, is mainly bankers, even though they need offices and whatever is the infrastructure they need, but it's not that expensive.

As we have changed most of the bankers in Mexico City. We did the clarification, Manuel did in the initial presentation, that out of the 28% of growth year-on-year on wholesale, around 15% is this government loan that we have already mentioned, but the other 15% is organic.

Also he mentioned that we expect between 10% to 15% growth in Mexico City above the average of the rest of the country. We are more focused on Mexico City on wholesale.

Even though the new branches, especially there are two, one in the north in Satelite, and another one in close to Polanco in Ejercito Nacional is on the street, we are very focused on small businesses. The rest of it are more focused on individuals and local communities.

In summary, in retail, if you see the retail part, it will start soon the improvement of income. In wholesale, we feel comfortable.

It's more what we talked at in the first question, the mix, the very large loans versus our sweet spot. We maintain that for the wholesale business, we prefer loans between 30 and 80 million pesos, more than these 200, 300 million pesos where we compete directly with BBVA and Banorte.

No,

that was clear, Enrique. Thank you very much.

You said you can't forecast because you missed it, but the shares are up. Maybe sometimes expectations they matter more than missing or not.

I think at book value, expectations they are overall low for you. Just hoping we start to see the cycle turning here on investment, margins, just wishing you all the good luck.

Thank you very much, Enrique and Manuel.

Thank you, Yuri. Thank you, Yuri.

Good morning, Manuel, Alejandro. Thanks for the presentation.

I have a couple of questions. The first one is when you look at your recent loan growth, government loans are being a major driver, and I remember in the years before you were not participating from this segment.

I would like to understand if this is a tactical response to weaker private sector demand or as a strategic decision to increase exposure to the government? No,

as I mentioned, this is a one single loan of 3 billion pesos, or 3,000 million pesos, that were invited all the banks in Mexico, and like 20, we decided to participate. Maybe you remember, like 5 years ago, Banorte and Bajio participated in other one that we decided not to participate, and we regret, because is collateralized by the government directly.

Even though the loan is for Pemex, is collateralized by the Finance Ministry. It's an exception.

We are not closed anymore that every time that the government or the Ministry of Finance invite us to this type of very secure loans, or even in some of the states where they have a very good credit quality, we could participate. It's not that we are pursuing proactively.

As we have mentioned, in government, what we have been managing to get is deposits. All our government banking executives, they are like 12 in the whole country, they are only focused on deposits.

This was more an exception, and because it was from the second time that we were invited by the central Ministry of Finance. It was not negotiated directly with Pemex; it was negotiated through the ABM, to the whole banking.

Perfect. Okay.

This is the type of loans that are subject to the new regulation, and basically it doesn't require provisions, right?

It requires the 2%. I couldn't understand the question.

[foreign language] It's very low. It's not zero, but it's very low.

I don't have the exact number. Maybe Alejandro can provide later to you.

Thank you, Manuel. Hi, Enrique.

Sorry. My second question is regarding the dividends.

You guys have mentioned the possibility of an extraordinary dividend in the second half of the year. From a previous comment, you said could be 25%, an additional 25% payout.

I would like to understand what that implies in terms of capital ratios. You have mentioned also that lower leverage is another way or increased leverage is another way for you guys to continue to deliver strong ROE.

How do you see your current Tier 1 and what level you will be comfortable going to? Yes.

I want to clarify. Maybe I was not very clear on my comment, and thanks for the opportunity to explain.

If you remember, we have split it our 50% or 40% last year payout dividend ratio in two parts: one that is paid after the general assembly of April, that was already paid in April, 25%, and we were expecting to have a second part of 25%. These two 25s are part of the originally planned and announced at 50% payout.

We are considering to increase that second 20% 25% if the capital ratio is maintained above 15%. Right now, we are on 52% 15.2%, and we feel comfortable any point between 13% and 15%.

We don't feel comfortable if we go very far from 15%. We were, after the split of Hey Banco, the capital ratio for Banregio moved to 15.7%.

Even after paying the initial dividend, the first 25%, with the profits, it's already above 15.2%. That's the reason that we could suggest above 25%.

We are not sure if it will be 30% or 35%; it will depend on the exact situation that we are both in the level of the capital ratio, as well as we will have more clarity on the pipeline and expectations for '27.

It is now clear, Enrique. Thank you so much.

Just again regarding the capital ratio, if I got it correctly, you said that the level you want to operate the bank is anywhere between 13% to 15%. Is that what you said?

Yes. Yes, even though the risk-desired level is 12.5%.

We feel comfortable above 13%, and we feel comfortable in the range of 13% to 15%.

Perfect. The the drivers for capital for the next few quarters are basically capital generation and and loan growth.

There is nothing any reclassification you guys can make to to free up additional capital? No.

No, we are always considering, as we saw the market move with Banamex, even Mifel and Banorte issuing AT1s or AT2s, but we don't have anything planned, at least not for the next quarter or even for the whole year.

Perfect, Enrique. Thank you so much.

Hey, guys, can you hear me?

Yes.

Yes.

Great. Enrique, I have a follow-up on NIM.

I understood right that mix and rates both have been the main detractors to NIM this year. However, I'm wondering if there have also been any sort of competitive pressures on the segments, how are the spreads of the new loans behaving compared to your history in both wholesale and SMEs, and how is the cost of the new time deposits compared to rates also versus your history, just kind of to have a sense of how the competitive environment is evolving?

I will start with the loan part. We haven't seen pressure on small and medium businesses.

We have seen pressure on the larger customers, as I mentioned. In the customers or loans of size above 100 million pesos, we find more competition, because it's more natural for larger banks.

We still maintain an advantage, 25 basis points at most, against other banks, but it's only in the large loans. Obviously, if the loan is, as I mentioned, this loan for the government of 3 billion, or the increase that we have in the financial institutions, that if you do the math is 2 billion in different companies, it's not one single company, are different ones, that can change the mix.

It's not because it's more competition, it's because we are in a segment that is more corporate. That doesn't mean that we are focusing over there, it's just let's say a new segment or an additional segment to grow that is compensated with risk, and they are very safe customers.

In terms of deposits, we maintain, by product and segment, the same percentage. We measure both against TIIE and also against Cetes.

Even though they have a misalignment in the last months, being the Cetes a little bit above than TIIE, we change to this TIIE compounded in advance. Once they are stable, we maintain the same percentage.

Again, the mix is the issue. Or I don't know if I'm being

clear.

We maintain the same percentage of Cetes for private banking and the same percentage of Cetes for branches. If we have more deposits on private banking this year, that is what is happening, the cost increase.

Just kind of final follow-up, can you remind me if those at least 25 basis points that you are usually charging on those very large loans, right, very large wholesale loans, are those basis points smaller or higher than before? That spread narrowed or it has been stable at around 25 basis points?

It depends how do you define before, but when we became public in 2011, used to be 50 basis points, but that was 15 years ago. It has been reduced.

Customers of that size are more conscious of the cost. There are many other parts involved: commissions and the service and the speed, but yes, has been reduced.

Used to be 50 basis points, right now is around 20 bps, 25 bps. Okay.

Super clear, Enrique, and thank you all for the time.

Thank you to you.