Good morning, everyone. This is Tomás Lozano, Head of Investor Relations, Corporate Development, Financial Planning and ESG.

Welcome to Grupo Financiero Banorte's first quarter earnings call for 2026. I would like to start off by thanking our investors for your valuable feedback on how to improve our disclosures, including our sustainability performance.

At the end of February, we launched our 2025 integrated annual report, together with our first report on nature and biodiversity risks and opportunities, following the TNFD guidelines. Both reports are already available on our webpage.

We will begin today's call with remarks from our CEO, Marcos Ramirez, who will present the main results of the quarter, highlighting the strength of our core businesses metrics, despite a volatile macro environment. Then Rafael Arana, our COO, will go over financial highlights for the group, providing details on the margin evolution and cost of funds, will address a scheduled update in our provisions, as well as remarks on cost control.

Please note that today's presentation may include forward-looking statements that are subject to risk and uncertainties, which may cause actual results to differ materially. On page 2 of our conference call deck, you will find our full disclaimer regarding forward-looking statements.

Thank you. Marcos, please go ahead.

Thank you, Tomás. Good morning, everyone.

Thank you for joining us today. We begin the year with an overall strong first quarter and solid performance across our business units, despite higher market volatility and increased geopolitical risks, particularly the conflict in the Middle East.

Despite this complex operating environment, we are reaffirming our outlook and guidance, supported by the strength in our core business. At the same time, we remain prepared to adjust our strategies as needed to navigate through any ongoing volatility.

In this context, 2026 is key for the trade relationship between Mexico and the U.S., as the USMCA formal revision begins in July. Discussions are already underway, and our base case is still supportive of a constructive agreement between both countries.

Regarding macroeconomic performance, Mexico is positioned for a stronger and more balanced growth in 2026. After a modest 0.6% expansion in 2025, GDP growth is expected to reach around 1.80% this year, driven by improving domestic demand, a temporary boost from the spillover effects of consumption and tourism from the FIFA World Cup in the summer, alongside stronger exports and investment during the second half of the year, assuming a positive resolution of the USMCA.

Furthermore, we believe the execution of Plan Mexico and other infrastructure initiatives from the federal government will support a stronger growth over time. On monetary policy, Banxico delivered a 25 basis point cut during the quarter, bringing the rate down to 6.75%.

Given recent inflation dynamics, we expect limited room for further reductions this year, with at most one additional cut to end the year at 6.5%, effectively marking the end of the easing cycle. Finally, we expect the exchange rate to remain broadly stable in 2026, despite recent U.S.

dollar volatility linked to the geopolitical developments, with a year-end level of 18.1 pesos per dollar. Now, starting off with the financial results in slide number 3, we highlight the group's strong core business performance.

Net interest income for the group and the bank expanded year-over-year, driven by a continuous optimization of funding costs and an expanding portfolio of consumer lending, which helped offset a lower interest rate environment. It is worth noting that provisions for the quarter were mainly impacted by a periodic recalibration of some of our internal models.

This adjustment was already embedded in the guidance, it does not represent an additional impact in our cost of risk estimate for the year. Moreover, capital adequacy ratio reached 19.7%, reinforcing our financial flexibility and enabling further optimization of the capital base.

I will expand on this later on the presentation. Shifting to business performance in slide number 4, net income for the quarter reached 15.5 billion pesos, up 1% year-over-year.

This performance mainly reflected a defensive margin and disciplined expense management, partly offset by a one-off provision increase already mentioned, negative mark-to-market adjustments across insurance, Afore, and brokerage portfolios, and a normalization of our trading income. Profitability metrics remained resilient, with ROE standing at 23.9% in the first quarter and ROA at 2.4%.

Analyzing results by subsidiary, on slide number 5, the bank reported net income of 11.7 billion pesos in the quarter, 6% higher year-over-year, displaying sound business trends across our core segments. Sequentially, net income declined 6%, mainly explained by seasonally lower transaction volumes and higher one-off provisions.

Overall, these results yielded a 30% ROE for the quarter, up 213 basis points versus the first quarter of last year. The insurance company net income declined 20% year-over-year.

Despite solid commercial performance driven by a strong auto credit activity, results were mainly affected by a base effect from face policy renewals to be fully reflected next quarter, negative mark-to-market adjustments, and higher bancassurance fees. The annuities business grew 7% year-over-year, supported by larger business volume and a positive valuation of inflation-linked assets.

The pension funds' annual contraction was mainly driven by negative mark-to-market effects, despite higher fee income from larger assets under management. Similarly, the brokerage sector annual decline reflected lower market valuations in securities.

On slide number 6, lending activity remained resilient, growing 6% year-over-year and 8% excluding government. Overall growth was mainly led by strong consumer activity, with solid contributions from the commercial and corporate portfolios, which grew 6% and 2%, respectively, despite some prepayments and exchange rate movements in the dollar book.

While our current guidance does not reflect any benefit in a potential renegotiation of the USMCA, we are well positioned to capture opportunities as investment decisions move forward. Government lending declined 5% year-over-year, mainly due to prepayments and scheduled loan maturities during the quarter.

It is worth noting that our appetite for this portfolio remains unchanged, and we are constructive on the upside potential to support public infrastructure projects related to the Plan Mexico. Moving to slide number 7, as I mentioned earlier, consumer lending continues to be the main driver of growth, increasing 11% year-over-year.

Performance was supported by healthy consumer demand, efficient execution, and process optimization, and a commercial approach that prioritizes deeper client engagement. Auto loans stand out with a strong 30% year-over-year, driven by a solid activity across the sector and recent commercial partnerships.

Credit card business balances grew 14% year-over-year, driven by sound consumption trends and targeted commercial initiatives. Along the same lines, payroll lending increased 12% year-over-year, supported by a broader product offering and greater availability through digital channels, yielding deeper customer relationships.

Finally, mortgages, they grew 6% year-over-year, driven by improved execution in origination, personalized offerings, and a disciplined risk approach. Turning to risk indicators on slide number 8, asset quality is well contained, performing in line with the loan mix, stable at 1.4%.

This still reflects the non-systemic case in our commercial portfolio, the impact of recent changes in our mortgage write-off policy, and a stronger growth in consumer lending. I would like to highlight that this indicator is the result of a disciplined risk exposure that prioritizes low-leverage profiles across the different loan portfolios.

Moreover, as I mentioned earlier, the quarterly cost of risk hike is not related to asset quality, and responds mainly to the scheduled recalibration of our internal risk models. Rafa will provide further details later in the call.

On slide number 9, fees grew 15% year-over-year, driven by strong volumes across consumer and wholesale banking products, with the retail segment achieving record new account openings. Moreover, mutual funds and the positive impact of prioritizing efficiency and profitability in our digitally affiliated business supported this growth.

Sequentially, net fees declined after a high seasonal base in the fourth quarter. On the ESG front, on slide number 10, the first quarter of the year marked several key sustainability milestones, including the publication of our annual 2025 report, which integrates our financial performance with relevant progress across our sustainability strategy.

We also released our inaugural report on nature and biodiversity-related impacts and dependencies in our loan portfolio, aligned with the TNFD guidance, becoming the first bank in Mexico to disclose under this framework. Before concluding my remarks, I would like to emphasize that, despite the one-offs already discussed, our operating performance continues to reflect the underlying strength in our core business, supporting a positive outlook and our ability to deliver the guidance for this year.

As we continue executing our strategy, we are transforming our operating processes by deeply integrating artificial intelligence into daily work streams across the organization. We were among the first institutions to adopt AI at scale, and our intention is to have 10,000 people across operations and back-office areas integrating daily activities with artificial intelligence levels 1 and 2.

This effort is guided by a formal AI governance structure already in place that is advancing multiple use cases across the bank, such as a client hyper-personalization, creating one agent per client, and shaping our business and risk areas by simplifying workflows, enhancing decision predictability through advanced data usage, and supporting exponential growth opportunities. Finally, as we will hold our annual shareholders' meeting tomorrow, where we will propose the distribution of a cash dividend equivalent to 50% of our 2025 net income, or 10.45 pesos per share.

This proposal is fully aligned with our continuous focus on maximizing value and total return for our shareholders. With this, I conclude my remarks.

Now Rafa will cover the main financial results of the group. Thank you, and Rafa, please go ahead.

Thank you, Marcos. We move to the specific financial highlights, but I would like to stress what Marcos mentioned, because there were some concerns about a pick-up on the provisioning side.

We will discuss that in specific in a minute. I can assure you that basically are not related to the performance of the portfolio.

We'll go in detail on that part. It has been related to some regulatory issues, some calibration of models that we have been doing on that part, and a specific case on the commercial side that is coming back from last year.

As we are fully working on the recovery of that part. We will strip down the net effect of the provisioning, taking away all the extraordinary effects, and what is the current level of provisioning that the bank is really performing at.

The first thing that we would like to see is that the NII on loans and deposits continue to be double-digit, 10% growth year-on-year, and the NII for the quarter was 1% and 10% year-on-year. NII continues to perform exactly as planned, basically has to do with a lower trend in the funding costs and a much strong performance that we have on the portfolio, basically on the fixed-rate part of the portfolio that we have built through time and is delivering a pretty good results of the margin piece.

Another thing that has caused some attention is related to the insurance business. The insurance business, the premium is going as planned, but we have to adjust the fact of the first quarter against the second quarter, because on the second quarter basically you will have a policy that usually runs in the first quarter that has been moved to the second quarter.

That's what is causing that decrease in the performance of the insurance company. The insurance company continues to deliver exactly as planned on a quarterly basis, if you strip that extraordinary process of that big premium that is going to be moved into the second quarter.

NII continues to be strong, loans and deposits NII continues to do well. I think the core, as Marcos mentioned, continues to be right on track to deliver the guidance that we promised the market.

If we move to another very basic issue concerning the structure of the bank and how the activity of the bank is really moving forward, when you look at the core banking revenues and the NIM, you see the net interest margin for the bank. This is sitting at 6.6%, 2 basis points ahead of what we have the lower end of the guidance for the market.

You will continue to see, and we will see a graphs in a minute, that strengthens the quality of the balance sheet that is delivering this margin numbers. When you go to the NII, we will also see that this is growing 9% on a year-to-year basis, based upon what we mentioned about the loan-to-deposits ratio that we have.

Bank net fees also showing the increase activity of the bank in every single of the channels. We are basically reaching record levels of new opening on accounts at the bank and new open accounts also on the digital space, with very strong balances, especially at the branch level.

The sensitivity, as we also told the market in the calls that we have, we are back around the 48. There was some concerns for some analysts because we pick up at the end of the year, we explain that because of the growth in the government book, and also the big inflow that we have on the deposit side.

Now we are back again to the 48. Basically we are liability-sensitive, neutral on that part.

On an NII basis, it's basically 0.0, 0.1. We continue to be very disciplined to managing the balance sheet in a way that can really allow us to get the full benefit of the fixed-rate part of the book.

The profitability of the bank, the return on equity of the bank is reaching 30.1%, is also, as we mentioned when we have been talking to some of the analysts, when you see the 30.1% is also including that extraordinary fact of the sale of the credit bureau that is basically 500 million pesos that is included in that part. Okay?

If you strip that down, you reach the 29.7% that I think we had before. The net income of the bank is growing at 6% on a year-to-year basis, and the ROA is 2.4%, going down for the fourth quarter.

As in the fourth quarter you basically get the full inflow of the very cheap deposit funds that allow us to benefit the margin and the asset classes that we have in the book. This is the most important graph that shows why we are so confident about the delivering the margin numbers and how the balance sheet is also working for us in sustaining the margin.

The graph on the top, the blue line, show exactly what's the active rate of the portfolio, 12.0%. Then the next one is the clear blue line, it shows what's the reference rate in the market, the 7.2%.

In the lower end, you see basically what is the funding cost that is having for the market. What is critical for us is the red dotted line, the black line with red dots, that shows exactly how resilience the net interest margin for the loan portfolio has been through time, notwithstanding the ups and downs on the active rate and the passive rate.

That shows exactly how we are managing the balance sheet and how we are delivering the margin based upon the strategy that we follow on the asset classes. Funding costs continues to be a good story.

We had a very good quarter on the funding cost. Usually, we have more withdrawals on the first quarter.

This year has been much more steady the support for the inflow that we have at the end of the year. That continues to show a very good trend on the cost of funds.

We continue to see that number to be able, based upon what we saw on the potential reduction of rates coming down, and also on the management that we have been doing on the retail pace, to reach those numbers very close to the 40 42 at the end of the year. What is also quite important is that there was always some concern about the impact that some of the other players in the market, especially the new commerce into the market, how they're going to affect our non-interest-bearing demand deposits.

As you can see, on a year-to-year basis, non-interest-bearing deposits is growing 15%. That really shows the strength of the retail franchise that we have and how we are integrating the relationship-driven model for the clients that allow us to really give a much better deal in the overall relationship that they have with the bank, and not in just a specific product.

That is key for us. Another very important thing is that the mix continues to be quite healthy, 70/30, 70 demand deposits and 30 the term deposits.

Term deposits continues to grow also pretty in a strong way, 11% for the year, but with very good cost, and we continue to be the leaders in the market. What is also, and we're going to take some times on these graphs and then we will move into more detail about that to explain.

The cost of risk, as you see, is moving to 2.2% or 2.2%, 2.06% without the recalibration of the models. Gerardo will explain that in a minute.

What is clear about this is that the cost of risk is in range of what we expect for the guidance that we delivered to the market. We really don't see any specific issues concerning any trends or basically a deterioration on any of the portfolios.

Basically, as in the third quarter we have an extraordinary case that is also affected in the first quarter a much more part, but still was there. We are really hoping for the recovery of that loan in the third quarter.

Another specific part, and Gerardo also will talk about this, is the write-off rate, as you see, is very steady. The pick-up in provision is perfectly explained by the situation that we said: the models, a specific case that we had in that part, and also at the pace of growth of the consumer book.

Remember that the consumer book is the one who requires more provision. Since we are growing at a very fast pace on the consumer book, that is also showing not because of deterioration of the book, but because of the regulatory issues that we need to put in the provisions in Day 1.

Another important thing concerning the consumer is that basically we are reaching now the third place in the credit card market, as Marcos mentioned. That is a milestone because, as our credit card business is the one who is underrated related to the 20% that we basically have in all the other consumers pieces that we have.

Now we are continues to grow in a very solid base. As you saw in the NPLs, credit card is going down on the NPLs, the same that payroll loans is going down on the NPLs.

That really shows that we are growing nicely and with a very good trend on the NPLs. I would like to ask Gerardo to go and explain the issue about the provisioning part.

Yeah. Thank you, Rafa.

This is Gerardo Salazar, Chief Risk and Credit Officer of Grupo Financiero Banorte. Let me bring to your attention the performance of cost of risk.

As you can see, it increased from 1.36% to 2.18%, highly influenced by four factors. Factor number one, a base effect of Tarjetas del Futuro, the consolidation on the fourth quarter of '25.

The second factor is internal models recalibration, as Rafa was explaining, and this is expected within the guidance. The factor number three is growth on retail portfolios.

The fourth factor is additional provisions for a specific wholesale debtor according to regulation. If we exclude TDF's, Tarjetas del Futuro, effect on the fourth quarter '25 and the internal models effects on the first quarter of '26, cost of risk would have changed from 2.32% to 2.06%.

That reflects an improvement. Also let me guide you through a different time frame.

If we talk about cost of risk in the 12-month time frame, you will see that it increased from 1.77% to 1.89%. If we exclude Tarjetas del Futuro accounting impacts on the fourth quarter of '25 and internal models effects on the first quarter of '26, cost of risk in a 12-month time frame would have changed from 2.02% to 1.86%, and that also reflects an improvement in a 12-month main frame.

In this graph you're currently seeing, there's a very important relationship between cost of risk and provisions, and also between provisions and write-offs. Let me talk and guide you through bringing your attention to these three variables.

The component number one, we have a very stable, contained write-off rate, approximately 0.43%, and that indicates realized losses are under control, and there is no systemic deterioration in asset quality. Component number two, or variable number two, is elevated cost of risk part to recalibration, and not truly deterioration, because of model updates and prudence are driving provisions in this stage.

The third variable, which is provisions, as a matter of fact, as you can very clearly see, are increasing. This is driven by model recalibration and Stage 3 isolation of the already mentioned case.

This suggests that we are front-loading risk recognition. Let me just explain why I'm telling you that we're provisioning ahead of losses.

Cost of risk is elevated by prudence and model recalibration, not by a spike in a realized default rate, and this is evidenced by a stable write-off rate. As a result, reserves are strengthening, and this is positioning Banorte in a very conservative mode for future credit cycles.

In the short term, there is pressure on earnings because of a high cost of risk. In the medium term, we will have earnings tailwind, that is, lower future cost of risk as provisions normalize.

In essence, and to conclude, I would tell you that cost of risk is elevated, but mainly due to prudence and model recalibration, not a deterioration in credit, and write-offs remain stable at 0.43%, confirming losses are contained. The result is higher provisions today, strengthening reserves, and positioning Banorte conservatively for the future.

Thank you, Gerardo. Thank you.

Basically we continue to see the guidance that we promise the market, that we are right on target to deliver the guidance that we promise the market for the whole year. The other thing that has also now that we have been managing the Bineo and TDF basically streamline the expense lines, you see that finally we are reaching our first target that is close to the 34%.

That will be not the number for the end of the year, but it will be around the 35% for the end of the year. We are clearly in trend to reach our 34% that we're aiming to have fully for in '26.

Good expense control, and that's not withstanding that we continue to invest in every single part of the technology case, and also including in some branches and ATMs that we needed to put in place basically for the payrolls. There's also has been some concerns because basically we usually run our Core Tier 1 from 12.5% to 13.5%.

There was some questions about the 12.7%, what happened to the 12.7%, because it seems that 90 90 90 basis points of the capital move from one place to the other. Those 90 those 90 basis points of capital that you see that is not showing on the Core Tier 1 are basically related to regulatory issue, 40 basis points, that we will see that returning for us around 80 basis points in July, and another 50 basis points that are related to the risk-weighted assets that happened in the first quarter.

That will be normalized in the second quarter, in the third quarter, and you will see the usual numbers hovering around the 13.5% Core Tier 1. Remember that at the group level, we are still holding 90 basis points of capital also.

That 12.7%, you have to add 90 basis points that has been hold at the group level. We continue to see the guidance to be delivered as we promised by the of the year.

I would like to also talk about the importance that we see on the consumer book, that we continue to really outpace the market in most of the different products that we have. That has to do with the fact that we are moving more and more to the hyper-personalization issue that allow us to the cross-sell in a much efficient way.

The only one that is below our expectations is the mortgage book, but you will see that the mortgage book will be recover in the second quarter, in the third quarter, to reach a loan growth around 8% to 9% by the end of the year. Everything else is online on the consumer.

We continue to gain market share. If you see the evolution of the market share of digital of Banorte compared to the market, you will continue to see a very good evolution in most of the products.

With that, I conclude that the guidance is going to be delivered as we promise the market. What happened in the first quarter, there were a lot of moving parts, like you many times said, but those moving parts are easily explained by the how do we manage the book and how do we manage in a conservative way the provisioning side of the group.

Everything else is on track: good funding cost, good margin, good growth in the consumer, and ready for any potential growth that comes into the market for the corporate and the commercial once the market start to develop in a much more active way. We are fully prepared to capture that opportunity.

Thank you, Marcos and Rafael. We will now move to our Q&A session.

As always, we kindly ask you to present only your most relevant questions, and we'll be happy to take any other questions anytime after the call. Questions will be ordered on a first-come, first-served basis.

Please raise your hand on the platform, and we will unmute you when your turn comes. Jose Luis and myself will be calling the name of the person that is next on the line.

If there are any technical difficulties, please let us know by using the chat. Thank you.

We're now ready to start. We'll take the first question from Ernesto Gabilondo from Bank of America.

Ernesto, good morning.

Thank you, Tomás. Hi, good morning, Marcos and Rafa and to all your team, and thanks for the opportunity to ask questions.

My first questions relates to loan growth. We have observed that Banorte's loan growth and overall industry growth are tracking below expectations for the year.

Against this backdrop, what do you see as the key potential drivers that could help accelerate growth in the corporate and government loan portfolios, which are the ones that are lagging? Any color of what you're seeing will be helpful.

My second question concerns on asset quality and other income. We understand these lines were affected by certain one-off items on provisions, as you mentioned.

The increase was mainly related to the recalibration of your models. However, as this is not expected to repeat, should we expect cost of risk to behave more in the low end of your guidance range of 1.8% to 2.1%?

In terms of other income that came meaningfully higher than expected, could you provide some detail on the drivers behind this performance, specifically, I don't know if there were asset sales or recoveries, and also how should we assume these levels in the next future quarters? Thank you.

Thank you, Ernesto. A long question.

Talking about the loan growth, it's not below expectations, it's not flat in the year. It's going to be, as we said since the beginning, it's going to be now in the second quarter, third quarter is going to be increasing.

I will ask Alex to go ahead on that, please.

Yes, Marcos. Thank you.

Thank you, Ernesto. This is Alejandro Padilla, Chief Economist.

As the Mexican economy started the year with a slowdown in the first quarter, followed to a strong close to last year. This performance can be explained by seasonal factors that typically affect the beginning of the year, as was reflected in the monthly GDP proxy of January, as well as some headwinds stemming from the global geopolitical environment, as Marcos mentioned early in the call.

In this regard, I expect the first quarter to show a null growth in a quarterly basis, and later to accelerate 1.1% in the second quarter. Even so, we believe the economy will gradually regain momentum, in particular during the second quarter.

We could see some positive effects associated with the 13 World Cup matches that Mexico will host. In this regard, a few weeks ago, we published a research note on the potential impact of the World Cup on the Mexican economy.

The key finding of our study points to a potential impact of something around 42 to 62 basis points on GDP, already incorporated in our forecast, driven by investment in the three host cities, particularly in connectivity, also driven by consumption and by tourism. Looking ahead in the second half of the year, some of the factors we expect to support growth include the launch of infrastructure projects under the government's announced investment programs, especially following the recent approval of the Infrastructure Investment Law, as well as the progress in the discussions related to the USMCA review process.

In this context, we continue to see a constructive tone in the bilateral talks between the U.S. and Mexico, which has allowed the export sector to maintain a very favorable performance.

As a result, we believe our guidance range of 1.4% to 1.8% is achievable, with a bias towards the upper end of the range.

As I said, the government lending and the corporate lending, our appetite for this portfolio remains unchanged, no? We are very constructive the upside potential to support public infrastructure projects related with the Plan Mexico, and you will see that in the second semester, I think so.

Now Salazar talk about the asset quality. Yeah.

Before touching on asset quality, we remain very optimistic about the two drivers of loan growth. The first one is the USMCA treaty, which, sooner or later, will recognize Mexico with a more favorable treatment that the rest of the world, and that's very important for us.

The second is the Strategic Infrastructure Investment Act, which are making projects more bankable. We are very well aware that some private investment is at times just waiting to see what the rules are going to be and drain resources and make some capex regarding loan growth.

In the commercial side of the business, we have those expectations, our central scenario, and that's a very important growth driver. Being more specific, this Strategic Infrastructure Investment Act provides a bankable potential for so many projects at the moment.

Regarding asset quality, as Marcos was mentioning, you mentioned, Ernesto, that if we expect beyond more effects, adverse effects, more than this one-off items that we just mentioned. Let me touch on credit risk modeling recalibration.

At its core, credit risk modeling recalibration is about realigning your model outputs, like probability of default, loss given default, exposure at default, with observed reality without rebuilding the model. What just happened, is in the commercial side of the book, once we take this into consideration, we are obligated to make recalibrations that equals correcting the level of risk estimates to current reality, while preserving the model's ranking power, using updated data, disciplined methodology, and strong governance.

If you look at other parts of the loan portfolio, there are very favorable data on that regard. If you look at mortgages, for example, you look at very favorable data.

We will continue to make model recalibration, but let me make, with the permission of Marcos and Rafa, a forward-looking statement regarding, for example, internal model of mortgages. We are expecting a very important push on capital for the second or third quarter of this year, which will be around 60 to 90 basis points on capital.

That gives an example that, sometimes, internal models recalibration will eat on earnings, and some other times, they will build a possibility of provisioning less in the income statement or having a stronger capital in the balance sheet. Let me be very explicit about this: we do not expect an out-of-control credit risk metric regarding cost of risk or NPLs going forward.

Thank you, Salazar. Ernesto, another thing, talking about other income, the sale of bureau, as Rafa mentioned, plus other recoveries, it was around 500 million pesos of net income.

Normal level should be close to previous years, no? Other income.

Perfect. No, thank you very much, Marcos, Gerardo, and Alejandro.

Just a last question on the digital competitive landscape against other FinTechs. I remember in the last conference call, you mentioned to be exploring new products, ideas to compete against the new entrants and to serve the unbanked, younger population.

Also in your remarks, you commented about the adoption of artificial intelligence. Just wondering if there is any update on potential new products for these younger or unbanked clients, and what would be Banorte's key differentiators?

Thank you, Ernesto. As we know how to manage the public about 40 years and above, and maybe we may do something with clients that are with us, no?

That's why we will launch a new product slash a lot of things. It's going to be at the end of this month that you will see it, and it's going to be called Banca Joven.

You will hear about us in the future about that.

Perfect. No, thank you.

I will be monitoring that. Thank you very much.

Thank you. The next question is from Tito Labarta from Goldman Sachs.

Tito, go ahead.

Hi, good morning. Thank you for the call and taking my question as well.

One quick follow-up on the provisions for that one specific corporate that you had to provision a bit more. Could you quantify how much that was, and is that now fully provisioned, or could there still be more provisions related to that?

Then my second question, just thinking also a little bit about the loan growth in USMCA, right? I guess particularly on the corporate and government book, if USMCA, given everything going on geopolitically in the world, if that gets delayed and you don't get a resolution this year, how could that potentially sort of continue to impact not only the commercial growth, but then could there be some indirect effects on the consumer, which is, as you said, has been very resilient, but if there's ongoing uncertainty, could there be some ramifications down the road also for the consumer, also again if there's any delays on USMCA or if that doesn't get resolved sooner or gets resolved rather later?

Thank you.

Thank you, Tito. The first one goes to Rafa, please.

That specific loan that is related to the third quarter provisioning is 276 million pesos. There's no more coming to that issue.

We expect the other way around. We expect to start to recover something that hit us in the past.

Yeah. The second one, the loan growth, I will ask Alex.

Regarding the USMCA, thank you, Marcos. Thank you, Tito.

This is Alejandro Padilla again. Regarding the USMCA review, bilateral discussions between the U.S.

and Mexico continue to be highly constructive. The recent visit this week by the USTR lead mission leader reflects a strong spirit of cooperation with both sides aiming to deepen regional integration in order to enhance North American competitiveness and national security.

As you mentioned, Tito, a lot of things have happened in the geopolitical spectrum. I think that the recent conversations between Minister Ebrard and the USTR Greer have focused on advancing the USMCA review, with particular emphasis on strengthening rules of origin, especially in the auto sector and steel, cooperation on critical minerals, the reduction of non-tariff barriers and sectoral tariffs, as well as reinforcing supply chains.

Improving investment clarity and certainty and enhancing regional competitiveness vis-à-vis Asia is crucial for both countries in preparation for the technical discussions that we will have by the end of May and the official start of the review process on July the 1st. All in all, I think that this will be something that we will continue to analyze and discuss in coming months.

We have to remind also that we have U.S. midterm elections in November, let's see how this situation can also change the way the discussions takes place.

However, we are constructive that maybe somewhere around the end of 2026 or beginning 2027, we'll have clarity about the extension of the agreement. I think it's important to stress out, and I will be very emphatic on this, that, for example, FDI in Mexico has been resilient despite of this situation.

Why? Because Mexico has important competitive advantages and comparative advantages with the rest of the world.

Last year, FDI reached a figure around $41 billion, which was almost 11% above the previous year, while new investments, we're talking about greenfield, were depicted an even larger increase. All in all, I know that there is some uncertainty surrounding what's going to happen with the USMCA, but the exporting sector continues to perform very well.

Indeed, the data that we have until February suggests that exports are growing in a accumulated basis around 7%, with advanced manufacturing and key industry, especially the industries of the future, growing at a two-digit pace. That's the way we are analyzing USMCA and the performance of investment and the exporting sector.

Great. No, that's very helpful.

Just one thing about what you mentioned about the consumer potential.

Yeah.

I think the discipline that we have in the risk side, you usually see a push coming from the commercial people, from the retail people, telling, "Open more the risk metrics, open more, allow us to get more." We will not do that.

We will continue to be as disciplined as we are. We are gaining market share in a very important way, and we will not stress the risk models that we have.

We are very happy with the models, the way they are performing, and there's no need for us to go and get market share based upon risk aggressiveness that we will not do that at all.

No, that's helpful. Thanks, Rafa and also Alejandro.

Just again, we don't know what's going to happen USMCA, hopefully it does get resolved, but how much is that impacting already, I guess, the commercial loan book? Just the concern if it doesn't get resolved, that slow growth there that then can have other ramifications for the rest of the economy could get a little worse.

Can you quantify how much uncertainty is causing that commercial loan book to not grow for now? I'll

tell you, Tito, that currently, for the total loan book, all loan origination on the book that are related to U.S. exporters is around 2.6% or 2.7% of the total loan book.

That's our exposure. What we are trying to say is that when the international trade framework, like USMCA, tilts in favor of Mexico, which is the less probable scenario, but suppose you think in a very adverse way, it's going to continue be tilting in favor of Mexico.

If that happens, we could count on an immediate boost on trade and working capital financing if that happens, and also a second-round effect regarding capex, which will finally accelerate for the loan book in the wholesale sector. Also, nearshoring will be amplifying the cycle.

Finally, getting to your question, Tito, there will be a spillover to consumption. What we are trying to project is a scenario in which job creation in export sectors are going to materialize, incomes will grow, and retail credit expansion will take place.

In that scenario, I think that we are trying to see, not being optimistic, but rather pessimistic, is the international trade geoeconomy will be tilting still in favor of Mexico relative to some other countries. We're not saying there's not going to be tariffs in the near future, but the treatment that USMCA will give to Mexico will be favorable, to say the least.

Yeah. No, that's clear.

That's very helpful. Thank you, Marcos.

Thank you, Tito.

Thank you, Tito. Now we'll continue with Yuri Fernandes from J.P.

Morgan. Yuri, please go ahead.

Thank you. Thank you, Tomás.

Good morning, Marcos, Rafa, Gerardo, Jose Luis, everybody there. I'll limit myself to just one question here regarding capital, guys.

I guess Rafa already mentioned that capital is expected to improve in June. If you can explain the 40 bps regulatory headwind this quarter, what was this, and why should it improve in June?

Also, the marked RWA, I think the marked RWA is part of the reason why core capital didn't improve, maybe some color on that. Finally, just an understanding that I got from Gerardo and Rafa previous answers about capital and provision.

Basically, the internal models required more provisions because the capital was a little bit less good than you expected. Once capital improve, maybe you could have lower provisions.

Just making sure this understanding is also right. Thank you very much.

Thank you, Yuri, for question about the capital. Rafa, please.

Yeah. Yuri, you're right about what you mentioned.

The fact is, we have 30 basis points of capital that were basically affected by the risk-weighted assets that we have, because they require more capital based upon the regulatory issue. Also concerning the deposit mix that we have, we have a layer that we go to the regulator, that layer was moved.

That penalized us by 50 basis points. That, as Gerardo says, we will recover those 80 from those 90 basis points that were against us in July, we will recover 80 basis points on that part.

Even though this that happened and usually we will also like to talk more about with the regulator about some issues that I think we will also allow us to move that 40 basis points into the capital again. Consider that we don't achieve that, you will see a replenish of capital of 80 basis points in July, in addition to the generation of capital that the bank has in a permanent way, that we will see by July, as we usually see, the numbers very, very close to the 13.5% that we basically like to run the bank around that number.

Those things happen on that card. It's not that we were careless or anything like that about the capital or on the risk-weighted assets or anything like that.

It's basically one is a regulatory issue that we are talking to the regulators about that issue, and the other thing is that the density of the portfolio really increased on that part. There was nothing really that was out of the hands.

One is a regulatory issue, and the other one was part of the evolution of the book.

Regarding the regulatory side of your question, Yuri, what we could say is that the composition of the total loss absorption capacity, the TLAC formula, allow risk-weighted assets density translate into a higher TLAC requirement. Banorte's recent capital management and discipline becomes a handicap in terms of a TLAC requirement.

The CNBV will adjust the TLAC formula established under current Mexican regulations. The new methodology reduces TLAC volatility by deducting 3.5% of the corresponding risk-weighted assets from the numerator, and that instantly will give us some comfort that it is not needed, but it is very welcome.

Yeah. You will continue to see a very good evolution on the capital numbers, Yuri.

It was honestly, the 50 basis points were unexpected, but I think that we will recover 80 basis points by July.

No, super clear, Rafa. It's not the second quarter, it's July, this improvement is for the third quarter, just making sure.

At

the second quarter, you will see the evolution of the natural generation of capital of the bank, that we will be very close to the 13.4%, 13.5% by the end of the second quarter.

No, super clear. Again, you have a solid capital position and organic generation, it was a little bit surprising, the evolution.

We were expecting a little bit more. Very, very clear the explanations, Rafa and Gerardo.

Thank you.

Thank you, Yuri.

Thank you. The next question is from Ricardo Buchpiguel from BTG.

Go ahead, Ricardo.

Hi, everyone, and thank you for the opportunity to ask questions. I have just a quick one here.

The other operating income and expense line has been a bit more volatile and even positive in the last couple of quarters. I understand that Q4 was related to a reclassification in the insurance provisions, but I want to understand better what drove the positive print in Q1 and what we should expect in terms of a normalized level.

Thank you.

Thank you, Ricardo. Rafa, please.

Yeah. The other operating income, as we mentioned, has to do with the sale of the credit bureau, that 526 million went into that number.

You will see that normalizing in the second quarter. If you talk about the insurance, if you look at the claims and things, they perform pretty well.

What we mentioned about the reduction on the insurance company has to do with a specific big client that will be moved from the first quarter to the second quarter. You will see a normalizing the results of the insurance company in the second quarter.

The insurance company is doing very, very well. Very solid numbers also coming.

Return on equity is about 50%, it was just a matter of timing where this big policy instead of going into the first quarter is moving to the second quarter. That's the only thing.

Claims and everything were under control, nothing related to that. The combined ratio also is well under control, don't see any specific issues there.

Very clear. Just one quick question.

If I take the 526 million pesos out of the equation, then the level from Q1 could be seen as a little bit more normalized, or is there any other adjustment I should do just to have a sense on the number moving forward?

I think if you talk about the level of normalized on the Q1, you also have to talk about the extraordinary issue that was related to what Gerardo talk about, the calibration of models and things like that. If you add all those things, more than net the benefit of the credit bureau income that we have, because you had just for the calibration of the models close to calibration of the models plus, in addition, the last part of that credit that went sour in the third quarter, you get around 600 million, and you get a net income of 520 by the credit bureau sale.

It nets one to the other. I would say that if you strip those two out, I would say that you will get a very, very similar numbers that you get on the key metrics of profitability of the bank.

Thank you. Very clear.

Thank you, Ricardo.

Thank you. Now we'll continue with Pablo Ordoñez from GBM.

Pablo, please go ahead.

Yes. Hi, good morning, Marcos, Rafa, and the rest of the team.

Congratulations on the results. My question is more structurally and strategic on artificial intelligence.

We know you have been mentioning about the hyper-personalization for a while, but now, Marcos, you mentioned that you have one agent per client. Is that correct?

Is this already implemented? My question is more broadly, how should we think of the AI strategy for Banorte in terms of products and financials?

Is there any further upside in the medium term on the expense line? Also, can you remind us where are you in terms of your cross-selling index, and what other KPIs are you following?

Thank you.

Thank you. It's a good question.

Yes, it should translate to less expense, of course, or at least more business, that's the final objective, and we are doing this because we are aiming to go there. Also, the numbers of the cross-selling, they range to 2.6 on the retail and up to 4.8 on the wealth management piece.

It has been increasing from the 1.4 that we have four years ago to the 2.4 that we currently have.

Remember, 13 years ago, I think we were at 1.17, it was less than half. AI, Rafa, please.

I think it's critical for you to understand this. We are moving, as Marcos mentioned, to basically normalize all the back end of operations, the back ops operations, by the end of the year.

Everybody should be managing their job based upon artificial intelligence. That will be achieved by the end of the year.

That's what we call Level 1, and there will be some Level 2 that we will be using some agents in some more complex tasks. On the personalization piece that we have been ongoing for the last 3 years, there's a lot of artificial intelligence embedded on that.

Basically, what we are looking, and Marcos touched on that, is to have an agent per client that allow us, and that agent per client will manage many other agents that allow us to really serve the client based upon a specific needs that the client has. The core of that, and that will not be any useful even if you have agents, is if you don't have all the data that you have to build in place and get all the models that you have to have in order to measure the most critical piece that we measure is the lifetime value.

Everything that we do now that we go by plan is based upon the lifetime value. The key metrics that, obviously, cross-sell is a key metric that we use, but the most important thing is what's the value of that cross-sell that is really reflected on the lifetime value.

Artificial intelligence, just remember that Banorte was the first, along with eight other banks, to touch on artificial intelligence with Watson eight years ago. We have a long run on that part.

Obviously, artificial intelligence has accelerated a lot in a very important way. Just remember one thing: if you don't have the data online, real time, artificial intelligence is just a joke.

Perfect. Thank you very much.

On the expense and on the efficiency, Rafa, Marcos, do you think that this AI could take Banorte to be a bank in the low 30s of efficiency in the next couple of years?

Two years, I don't know, but we should aim to that in, let's say, three, four years, yes.

Perfect. Thank you very much.

Next question is from Brian Flores from Citi. Go ahead, Brian.

Hi. Thank you, team.

I have also just one question. It is on your risk-adjusted NIM.

As you mentioned and you explained, you are advancing on the consumer book, yet as we saw the NIM is decreasing. Just wanted to check with you if the new originations are coming at maybe lower spreads, and on the risk side, just wanted to check if this higher proportion of consumer on the mix should also bring a slightly higher cost of risk.

Thank you.

I think if you look at the risk-adjusted NIM and you look at the public information, Banorte has a huge edge on the risk-adjusted margin on the consumer. We have 90 basis points in advantage compared to the next competitor that we have in a risk-adjusted margin.

That allow us to really play in the market when we like the risk, to be quite aggressive for the clients that we like to have, because the risk-adjusted margin allow us to do that, and that's basically related to the risk discipline that we have. If you see a slight reduction on the NIM, I think you should be looking at the guidance that we gave, that is 6.4% to 6.8%.

We are now staying at 6.6%, because the usually the first quarter is the low-end quarter, because a lot of the cheap funding basically starts to move away from the bank. This year, we have retained a lot more than usual, but usually you get some outflows on that part.

No, the margin, as you saw on the graph that we project about the NIM of the portfolio, it's continued to be steady and growing. The more the rates go down, the better for us, as you saw on the sensitivity on the book.

You should expect an improvement in the margin. This is key in how Banorte competes.

When we like the risk, based upon the risk-adjusted margin that we have and based upon the lifetime value of the client that we have to develop, we could really, really bring the client into the bank.

Regarding cost of risk, there is no trade-off. We are not trying to aggressively pursue, as Rafa and Marcos just told us, more loan volume sacrificing the use of risk.

We have shown internally and externally that we are controlling the consumer loan book in a very good way because we have not just a low number regarding cost of risk and NPLs, but also an alignment between leading indicators and outcomes. That is, we have seen stability with low volatility, not just low levels in cost of risk.

Also, there is alignment between provisions and write-offs, like we said before, and the vintage performance is very consistent in every type of consumer lending product. What I tell you that there is no trade-off, and we have demonstrated that we are controlling the consumer loan book as we should.

No, thank you. Super clear.

Just clarifying here, I think my point was on your slide number 18, I think we see when maybe the consumer appetite was less, the cost of risk closer to 1.5%, right? Now we're closer to, let's say, 1.8%, 2%, which is in the guidance, as you mentioned, but part of the trail.

Just compared to previous years, that's what I was trying to convey here, slightly higher cost of risk, now that you have this shift in the mix.

As you mentioned, you know that if we grow the consumer book, by nature and by regulation, you have to build more provisions on Day 1. You're right on that, but that's in alignment of the pace of growth.

If you look at the pace of growth of the consumer that we have, we are outpacing the market in many of the products, and that, obviously, is giving us more provision on Day 0, but not because of deterioration, it's because regulations.

No, perfect. Thank you, team.

Thank you,

Brian. Now we will continue with Renato Meloni from Autonomous.

Renato, please go ahead.

Hi, everyone. Thanks for the question.

First I would like to just focus here on slide 16. You can see that your active rate is declining less than Cetras here, and that's because of the mix shift.

As you just mentioned now, you were able to retain a lot of the value here in this first Q. I'm wondering, as the consumer portfolio outpaces the growth of the rest of the portfolio, do you see some expansion here if rates continue at this level, and can we maybe expect your NIM to end the year at the higher end of the guidance?

Then just follow-up here, still thinking about this mix shift. You mentioned before that you're building up provisions ahead of any credit cycles, but your coverage ratio remains at historically low levels.

Considering that you're stronger in consumer lending now, do you think you would have to operate at a higher level? Thank you.

The margin, I think that if you continue to see that downward trend on the rates, we could see an expansion in the margin, yes. I think we could see by the end of the year, you will see an expansion of the margin coming for two things: a lower funding cost that we have, and a very large inflow of funds that will come into the fourth quarter.

That would be a case. Concerning the other thing related to the provisions, well, it comes with the growth.

Not because it's bad growth, it's because the growth requires more provisions. Yes, we will be building more provisions, but not because of risk deterioration, but because it is needed by regulation that we set up those provisions on Day 1.

It's just the size of the portfolio. We are growing nicely.

I give you some very good numbers: car loans NPLs 1.55%, mortgages 1.2%, credit cards going down to 3%, payroll also going down on the NPLs, that are the ones that consume more the provisions. No, I think we are never, I would say, comfortable with the provisioning, because we always take care of those things.

I think the discipline that we have on the risk side, and we will continue to have that discipline, is allowing us to compete because remember one thing with Banorte: Banorte has a higher funding cost at this point in time than BBVA and Citi. The way that we compete against them is based upon the risk-adjusted margin that we deliver, and we compensate by the lack of on the funding cost, we compensate on the risk-adjusted side.

Perfect. You're comfortable with the current coverage ratio level?

That's right.

Thanks very much.

Thank you, Renato.

The next question is from Andrés Soto from Santander. Go ahead, Andrés.

Good morning to all. Thank you for the opportunity to ask questions.

Just a couple of follow-ups on my side. In the release, you mentioned that the USMCA uncertainty is impacting corporate demand.

All in the call you have expressed confidence on a positive resolution. Given that the positive resolution is rather a consensus view, what do you believe your clients are still waiting before they resume investment and credit demand?

They're waiting for the rules to be published, yes, the last mile, I would call it, the regulation, and the signing of the agreement.

Your expectation is for that agreement to be signed end of 2026?

Sorry, again?

If the expectation is for the agreement to be signed in 2026, still.

No, our expectation is that it could be by the end of 2026, but most likely in 2027. This is because you have in the middle the midterm elections in the U.S.

in November. I think it's going to be very difficult for the U.S.

to really want to sign an agreement before the elections. I think it's more a matter of 2027.

I think the important thing is that while we see more visibility and certainty about the talks and the specific topics that they are discussing, that could boost the confidence of investors in the second half of 2026.

Got it. In terms of loan growth, can you remind us how do you break down the guidance of 8% to 11% between consumer and corporate?

Yes. Mortgages from 8% to 10%, payroll is from 10% to 12%, auto from 15% to 20%, credit card from 14% to 18%.

Consumer is at the end between 10% and 14%. Commercial from 8% to 10%, corporate from 8% to 10%, and government from 0% to 4%.

Thank you. This 8% to 10% in the commercial side is contingent on people getting confidence on that the agreement is close to be signed, right?

Yes, that's right. That's why we split the consumer and the corporate and the commercial and the government.

I think the consumer will be above double-digit growth, and on the commercial and the corporate depending of how clear the ruling of how the investment should flow into Mexico.

Perfect. That's very clear.

My second follow-up is on the cost of risk. I see additional provisions related to the case that happened in the third quarter.

What is specifically changed this quarter to make you made additional provisions, and how confident are you that this is going to be released in the third quarter?

Yeah. What I will tell you, Andrés, is that in the last two months, we change or reach an inflection point in which we are more optimistic.

As we said in the last call, there is economic intrinsic value of a positive nature on this, because the recovery rate is very high, but we are bargaining to make a very important restructuring process in which all the parts involved in this loan finally have reached an agreement. We have not finalized that, it is not perfected from the legal or contractual point of view, but we remain confident that we touch the bottom on this case, and from now on, there is recovery to be made.

Thank you, Gerardo. What percentage of the loan is already provisioned?

Full, 100%, full.

Understood. That implies, if I did the numbers correctly, that has added up 20 basis points to your cost of risk over the past two months, correct?

That's right.

That's correct.

Perfect. That was already reflecting your guidance for cost of risk of 1.8% to 2.1% this year, meaning the release of those provisions meaning that structurally, given the change in the loan book, you are probably running at a cost of risk structural that is 2% or slightly higher because of this growth in consumer lending.

That is correct?

Correct. That's correct.

Perfect. That's all.

Thank you very much, and congratulations on the results.

Thank you, Andres. We'll continue with Marcelo Mizrahi from Bradesco.

Marcelo, please go ahead.

Hello, everyone. Thanks for the opportunity.

My question is regarding the level of NIM. In this quarter, Banorte delivers the NIMs very close to the top of the range of the guidance of the NIM.

Looking forward, I understand that, of course, you guys already mentioned that we will have some impact on the interest rate reduction on the second quarter on the NIMs. My question is, what's the level of the NIMs are looking to the guidance that we have to work looking forward?

Thank you. As

in the guidance, the NIM is from 6.2% to 6.5%, around that, and the NIM of the bank is from 6.4% to 6.8%. That's the guidance, and we will be in that.

Right now, you are in the middle, 6.6%, and basically looking forward to a 6.7%, 6.8%.

Okay. Thank you.

Thank you, Marcelo.

The next question is from Carlos Gomez-Lopez from HSBC. Go ahead, Carlos.

Hello, and thank you for taking my question. First, on the capital, maybe I'm the only one who doesn't quite understand it, and maybe we can take it offline, but just to clarify that when you had this reduction, this 80 or 90 basis points that disappeared, that will be in the fourth quarter of last year, that's the timing of it?

No,

the impact was during the first quarter, and you will see that the positive compensation that Rafael and Marcos mentioned during the third quarter.

Exactly, Carlos.

Okay. The impact was this quarter, the fourth quarter of last year would be normal, it is this quarter which would be below normal.

Actually what I thought was more interesting is, Rafael, you emphasizing so much that you would like to run the company with a 13%, 13.5%, that is what you think is the normal level of capital for the bank, right?

Yes, that's right. It is.

That's why we, as I mentioned, we are warehousing at the group 90 basis points. If you add those 90 basis points to the number that we have on the Core Tier 1, we are already in the number that we like to be.

Okay. That is very clear.

Second, on loan growth, and I'm sorry to come back to this, but we are already at the end of April, we are running at 6%, and when I look at the trends for the system and for you, they're pointing down, not up. Do you see any evidence whatsoever that we are starting to see an inflection and at least we are seeing a continuation of loan growth as opposed to reduction of loan growth every single month, or that's something that we cannot really hope for until after the summer?

There's a way that we can see the pipeline, and the pipeline is full. Our expectation is that in the next months, you will see some growth there.

We don't have the magic ball, but at least we see the pipeline that is full, and we are optimistic that something is going to happen in the coming months.

Okay. Thank you so much.

Thank you.

Next we go with Edson Murguia from SumaCap.

Hi, good afternoon. Thank you for taking my questions.

I have just one regarding on the loan book growth, specifically auto loan. How sustainable is having 30% growth on a yearly basis, because you mentioned in the prior remarks that Banorte will not change models or will not change the risk appetite that the bank have?

Trying to understand how can we see for the following quarters.

It's not sustainable, the 30%, as I said before. The expectancy in the guide is from 15% to 20%, and we are optimistic about the 15% to 20%, but obviously, it will go down a little bit, and that's why we keep the guide for the year between these two levels, no?

Because we are building from a very large base every year, 35% last year. Right now, we are growing at 25%, but as Marcos mentioned, we are very comfortable with 15% to 16% car loan growth, because we like the brands that we are managing, and we like the risk that those brands have accompanied with.

Okay. Thank you so much, and congrats on the results.

Thank you, Edson.

Thank you. We'll take our last question from Natalia Corfield from J.P.

Morgan. Natalia, how are you?

Natalia, please unmute yourself.

Natalia, go ahead.

Natalia, we can contact you after the call,

we will Yeah. Can you hear me now?

Now, yeah, perfectly.

All right. Sorry, I was on mute.

My question is on capital again. You ended the quarter with 160 basis points over the TLAC minimum for this quarter, and I'm wondering what is the right level for Banorte?

What is the level that you would feel comfortable? This level is below what you had in the past, and I know part of the explanation, but I want to understand what's the level that you make

We didn't hear very well, but Rafa knows what we are talking about, go ahead, please.

Natalia, yes, the level that we like to have on the Core Tier 1 ranges from 12.5% to 13.5%, depending on when we pay the dividends or not. That's the level that we have been basically maintaining on that part.

As we have been on a dividend base paying basically 83%, 85% when you add the extraordinary dividend. We continue to be very disciplined about the 12.5% to 13.5% on the Core Tier 1.

I think you also asked about the TLAC, no?

150 to

200 basis points above TLAC.

150 to 200?

More or less, yeah. Let's say between 100 and 200, aiming to 150.

What Gerardo mentioned, that there's been a recalibration of the TLAC of that thing that will be beneficial for us, that will give us another buffer.

All right, because it used to be higher. You ended the quarter at 162.

So, 162 would be comfortable for you, based on what you just said?

Yeah. Yes.

Yes, we were at a certain point on Core Tier 1 14.8%, but that was too much on that. That's why we start to pay an extraordinary dividend based formula.

Okay. Understood.

Thank you.

Thank you, Natalia. Thank you, everyone.

With this, we conclude our call. Thank you very much for the interest in Banorte.

Thank you.