7 th Latin American Banking Conference Salomon Smith

7 th Latin American Banking Conference Salomon Smith Barney New York March 08, 2001

Contents I. 2000 RESULTS • Relevant Information • Profitability • Asset Quality • Capitalization • Other Sectors • Internet • Efficiency Projects & Alliances II. MANAGEMENT’S VISION & STRATEGIES

I. RESULTS 2000

Relevant Information w Banorte created provisions in 3 Q 00 against stockholder’s equity for 1, 737. 7 million pesos to cover all contingencies with Fobaproa and to comply with YR 2003 capital rules. w GFNorte 2000 accumulated profit of Ps 1, 677. 3 million, a 36% increase over that of 1999, obtaining a ROE of 21%. The Banking Sector obtained profits of Ps 1, 463. 9 million, showing a 48%growth in the same period, excluding Pension Funds. w During 2000, GFNorte’s Non Interest Expense decreased by 13. 0% compared to 1999. The Banking Sector decreased 15% in this line for the same period. w The Banking Sector performing commercial, mortgage and consumer loans increased by 23% in the year, meanwhile total past dues decreased by 17%. w The Banking Sector past due loan ratio decreased from 5. 8% to 5. 1% and the Reserve coverage stood at 101. 1%. w The Banking Sector capitalization ratio was 12. 0% with, Tier 1 of 11. 1% and Tier 2 of 1. 0%, using 2003 rules. 4

Relevant Information w Banorte strengthened its capital base to fully create provisions for Fobaproa and YR 2003 and to take advantage of the tax loss carry-forward in Bancentro, which amounts Ps 1, 735 million* by the end of 2000. Bancentro w Bancentro’s Fobaproa assets Banorte Equity $ 1, 217 w Serfín loans management w Traditional w Afore from Banorte Banking Business w Brokerage House Mutual Funds administration Brokerage House w Capital market business w Money Equity $290 market from Brokerage House w Investment banking * Representing 35% of total cummulative losses for Bancentro (Ps $4, 957 million) 5

Group’s Integration GFNORTE 84. 4% 8. 3% 5. 3% Auxiliary Organizations Banking Long Term Saving Banorte Annuities Factoring Pension Funds Leasing Insurance Warehousing (Banpais) Bancentro % Group´s Investment in Subsidiaries. December 2000. Bonding 2. 0% Brokerage House

Banorte became a national bank improving its market position MARKET COVERAGE Branches Dec 96 Branches States % Dec 00 % 156 2. 3 14° 452 5. 9 6° 7 32 Market Dec ‘ 96 % Rank Dec ‘ 00 % Rank Non Interest Deposits 6. 8 5° 11. 8 5° Total Deposits 3. 6 10° 7. 8 5° Loans 3. 3 10° 9. 2 4° BANORTE BANCENTRO BANPAIS Source: A B. M. Mkt. % for deposits excludes Financial Intermediaries and refers to Banking Sector exclusively. Loans include Fobaproa and source CNBV (September 2000).

GFNorte’s organization is structured for servicing clients DON ROBERTO GONZALEZ BARRERA President Public Relations Corporate Development Government Banking SUPPORT & CONTROL OTHÓN RUIZ MONTEMAYOR Vice-President & GFNorte’s General Director BANORTE’S GENERAL DIRECTION Specialized areas • Risk Management • Technology and Operations • Commercial, Corporate, Middle Sector and Private Banking Territorials • Human Resources • Monterrey, West, México City, Northeast, Northwest and Southeast • Planning and Control • Marketing • Legal • Treasury Corporate Examiner Investor Relations NON TRADITIONAL BANKING BUSINESS • e- Business • Long Term Savings Sector • Recovery Bank

A stock option for senior management was implemented w The stock option plan started on October, 2000. w 24 key top executives are benefited in the first stage. w The objectives of this plan are: - Retain key people - Move top management to maximize share value - Attract new top executives w 4. 8 million shares were acquired for this program. (1% of total shares outstanding as of Dec/00) w An equivalent to one year of monthly salary is the amount assigned to each executive in the 3 year stock option program.

Banorte has a national presence MONTERREY Tot. Branches 118 Total Deposits $36, 020 M. S. 15. 0 29. 2 NORTHEAST Tot. Branches 68 Total deposits $14, 266 M. S. 13. 4 23. 3 MEXICO NORTHWEST Tot. Branches 32 Total Deposits $4, 192 Tot. Branches 100 Total Deposits $22, 032 M. S. 3. 9 4. 6 M. S. 5. 4 3. 8 WEST Tot. Branches 104 Total Deposits $17, 900 Branches* Deposits** M. S. 8. 8 11. 1 TOTAL 452 $98, 207 M. S. Market Share Millions Ps. * Includes Modules M. S. 5. 9% 7. 8% SOUTHEAST Tot. Branches 30 Total Deposits $3, 797 M. S. 3. 8 3. 5 December 2000 ** Excludes centralized Operations.

Our Client base has increased through time as Banorte has reinforced its presence in traditional entities and moved further into new territories NUMBER OF CLIENTS (Thousands) 2, 818 2, 324 1, 900 142 301 1994 ‘ 95 627 ‘ 96 889 ‘ 97 Products Checking Account Investment Credit Card Credits Money Market Mortgage Brokerage Total Accounts Includes the Banking and Brokerage Sectors. ‘ 98 % Accounts 50. 3% 38. 7% 5. 6% 1. 9% 1. 7% 1. 5% 0. 3% 100. 0% ‘ 99 2000

Supported on Banorte´s technological platform, electronic and phone banking have grown aggressively Transactions 2000 (millions) Units Call Center 10. 1 9, 037 POS 7. 4 4, 548 6, 286 PC Banking 17. 5* 1, 341 1, 434 ATM’s 9, 512 6, 398 3, 750 2, 458 1, 538 218 3, 318 1, 988 986 990 130 1994 212 408 1995 1996 1997 1998 1999 December 2000; * Tradicional & Internet; Call Center = Number of calls 2000 100. 7

More than 50% of all transactions are channelled through electronic banking TRANSACTIONS BY DISTRIBUTION CHANNEL 2000 44. 7% 37. 3% 7. 2% 5. 6% 3. 6% 1. 6% BRANCH Dec, 2000. ATM PC BANKING TELEPHONE BANKING POS INTERNET

Profitability

GFNorte has maintained constant earnings growth ACCUMULATED NET INCOME 1, 677. 3 1, 521. 9 1, 557. 0 1, 234. 0 1, 135. 5 705. 1 685. 6 828. 8 '95 '96 '97 Book Value 10. 3 Per Share (*) 8. 9 13. 7 '98 15. 7 Extraordinary Income: 1997: $693. 1 & 1998: $421. 5 Millions as of December 2000. (*) Based on 493. 2 millions of shares. '99 16. 0 ‘ 00 15. 2 Extraordinary Income

GFNorte has increased its net income per share by 36% NET INCOME PER SHARE 3. 40 2. 50 36 % 1999 Pesos as of December 2000

GFNorte increased it’s ROE maintaining a market leadership ROE GFNorte 21% 21% 15% Source: Press Release each bank. 5% GFBITAL GFBVABANCOMER GFSANTAND 2000 BANACCI 1999 GFNORTE 6%

A major contribution to earnings was that of the Banking Sector with 87% of total Group´s earnings 2000 GFNORTE EARNINGS 2% 3% 4% 5% BANKING BROKERAGE LONG TERM SAVINGS HOLDING 87% AUXILIARY ORGANIZATIONS

The negative impact of interest rates and lower income from IPAB was more than offset by higher volumes of operations, non interest income and efficiency improvement TOTAL GROSS INCOME 8, 789 IPAB Margin 1, 928 10% 57% 7, 942 NON INTEREST EXPENSE 6, 942 5, 881 822 15% 1999 Margin Operation 5, 524 7% 2000 5, 115 TOTAL NET INCOME 1, 563 1, 052 Non Interest Income 1, 336 50% 2, 005 48% 1999 2000 Million of Ps. Data as of December 2000 Market interest rates dropped 6. 3 percentual points in one year period. 1999 2000

The Recovery Bank, that was created in 1997, had excellent results. At present time it has 761 employees distributed in 33 regional offices ASSETS UNDER MANAGEMENT 2000 RECOVERY $ 5, 561 millions pesos 57, 317 41, 473 Serfín $17, 300 Loans 38 % 1999 2000* Current Ps. * Includes $8, 547 millions of own risk loans. Others includes repossesed assets, excluding restructurings. Others 15% Cash 85%

Asset Quality

The Banking Sector performing commercial, mortgage and consumer loans showed a 23% increased in the year and past due loans decreased by 17% PERFORMING LOANS PAST DUE LOANS 23, 912 19, 483 4, 935 23 % 4, 120 17 % 1999 2000 Millions as December 2000 Performing loans not includes IPAB, governmental and financial entities. 1999 2000

Banorte has maintained a low level of past due loans PAST DUE LOAN RATIO Banorte Banking Sector 7. 1% 5. 8% 5. 1% 3. 7% 0. 9% 1999 2000 Data as of Dec ‘ 00. 7. 8% SANTANDERSERFIN BANAMEX 3° BANORTE BITAL BBVA BANCOMER

Banorte maintained a reserve coverage of 101. 1% RESERVE COVERAGE 443. 7% 111. 8% SANTANDERSERFIN Data as of Dec ‘ 00. BBV BANCOMER 106. 4% BANAMEX 102. 5% BITAL 101. 1% BANORTE

Capitalization

Capitalization ratio stood at 12. 0% with rules of 2003 CAPITALIZATION RATIO 2000 RULES OF: 2003 2000 2003 12. 3% 2001 12. 0% 16. 0% 12. 3% 11. 2% SANTANDER SERFÍN W/O MARKET RISK 20. 7% Data as of December 2000. BANAMEX BITAL 15. 4% 14. 3% BANORTE 13. 8% BBVA BANCOMER 13. 3%

This strategy has shown good results that have been recognized by international rating agencies w In January 9, 2001, Fitch: 4 Granted a C/D rate for indivudual strength to Banorte, the highest for a mexican bank. 4 Granted the BBB- rate for local currency and BB+ rate foreign currency, been the latter limited only by the contry risk. 4 A positive perspective that confirms the financial strength of Banorte.

Others Sectors

Other sectors are profitable and have gained market share 1999 Net Income 2000 Market Share Net Income 59. 5 (6. 4) 8. 7% 0. 9% 68. 3 4. 6 8. 9% 1. 0% Annuities (23. 8) 6. 7% (32. 8) 9. 8% Brokerage Sector: Brokerage House 161. 2 5. 1% 27. 1 5. 6% 1) Auxiliary Organizations: 29. 1 Factoring 11. 3 Leasing 17. 5% 4. 9% 42. 4 23. 1 19. 9% 4. 8% 1) Warehousing 2. 5 1. 0% 13. 7 2. 1% 3) Bonding 6. 3 N. A. 6. 2 N. A. Long Term Savings: Afore Bancassurance Millions as of December 2000. Wholesale Participation. 1) Sep ‘ 00. 2)Nov ‘ 00, 3)Jun ‘ 00. Market Share: Afore & Annuities: Number of Affiliated; Bancassurance: Premiums; Brokerage House: Assets under management; Factoring & Leasing: Total Loans. Market Share 1) 2)

Our Pension Funds Management company has shown an outstanding performance AFORE INDICATORS BANORTE INDUSTRY Ps 261 Ps 558 Contributing Affiliates growth * 24. 7% 17. 7% Commissions growth * 55. 9% 27. 7% Total Expenses per contributor 1) Source: Salomon Smith Barney, Private Pension Funds in Latin America. Published December 2000. Total expenses as of September 2000. * Source: ING Barings; Sep/2000 vs Sep/1999 in real terms. 1)

www. banorte. com

Since 1995 Banorte has had presence in Internet through www. banorte. com and has increased its acceptance in the market w Home Banking. - with more than 150, 000 transactions per month and 30, 000 clients. w Business PC Banking. - with more than 75, 000 transactions per month and 3, 400 business. w Our new services include: 4 Credit Card payments for e-commerce businesses and Internet virtual credit card. 4 Acquisition and payments of Banorte-Generali insurance policies by Internet. 4 Stock and mutual funds trading.

Next steps in Internet w Increasing the functionality of service platforms besides making strategic alliances as a way of growth. w Increasing the volume of operations improving customer service quality and trust. w Developing new businesses. w Using Intranet to: 4 Support the commercial process 4 Transform the internal process w Motivating architecture. the development of a new technological

Efficiency Projects & Alliances

In order to improve it’s operating efficiency, GFNorte has three main projects in process EVOLUCION Aimed to improve the efficiency of the Group’s operations, to control operative risk , to reduce the organizational structure cost and to improve internal control. TRANSFORMACION Implement a more efficient credit process that allows to optimize the risk and profitability levels. PROFITABILITY Automated profitability measurement of each business area by territory, branch, product and client. This tool is fundamental for decision making. 35

GFNorte has made several alliances aimed to improve its value Banorte’s clients will have access to this spanish bank and viceversa. Third most important business in money transfers from US to Mexico. Tourism spots development. Additionally, other specific associations:

II. MANAGEMENT’S VISION & STRATEGIES

GFNorte has followed a clear and sucessful strategy for increasing it’s profitability Deposit Volume and Mix Interest Rate New Loans Non Interest Income IPAB Income PROFITABILITY Non Interest Expense Recovery Risk Control