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Grupo Financiero Santander Mexico Reports Third Quarter 2012 Net Income of Ps.4,215 Million

Solid Profitability and Growth Driven by Focus on Commercial Banking and Operational Efficiency

MEXICO CITY, Oct 25, 2012 /PRNewswire/ -- Grupo Financiero Santander Mexico, S.A.B. de C.V., (NYSE: BSMX; BMV: SANMEX), ("Santander Mexico"), one of the leading financial groups in the Mexican financial system, today announced financial results for the three- and nine-month periods ending September 30, 2012.

During 3Q12, Santander Mexico reported net income of Ps.4,215 million, representing a 2.2% year-on-year ("YoY") increase and a 20.2% sequential decrease. These comparisons however are affected by extraordinary gains in 3Q11 for the reversal of provisions to comply with CNBV (Comision Nacional Bancaria y de Valores) regulations and in 2Q12 for the gain on the sale and leaseback of branches. Excluding these one time events, normalized net income increased 24.8% YoY and 3.5% sequentially. Consolidated net income for 9M12 was Ps.14,513 million, an increase of 32.6%, or Ps.3,572 million higher than the corresponding figure in 9M11. Excluding the aforementioned extraordinary gains in 3Q11 and 2Q12, net income for 9M12 increased 30.5% or Ps.3,107 million.

Marcos Martinez, Executive Chairman and CEO, commented, "We are pleased with our strong third quarter results, which reinforce the merits of our strategic focus on commercial banking, low-risk profitable growth and operational efficiency. We delivered year-on-year increases of 14.9% and 14.4% in net interest income and  net commissions and fees, respectively. Furthermore, we executed well in our key business segments, as demonstrated by robust year-on-year growth of 28.6%, in both consumer loans and credit cards, as well as 78.4% increase in loans to small and medium enterprises ("SMEs"). Our focused growth strategy together with our strong emphasis on prudent risk management and an efficiency-oriented culture positions Santander Mexico as one of the most profitable franchises in Mexico."

Mr. Martinez continued, "This quarter we achieved a significant milestone in Santander Mexico's history: our successful international public offering, which values the bank at 16.5 billion dollars. This transaction enhances the Company's market position and brand recognition, while strengthening organizational transparency and market discipline. We begin a new chapter as a publicly traded company on strong footing and are well positioned to capitalize on the attractive fundamentals of Mexico's banking industry."















Grupo Financiero Santander Mexico







Highlights (Million Pesos)








3Q12

2Q12


3Q11


YoY %

Income Statement Data







Net interest income

8,582

8,394


7,471


14.9%

Fee and comission, net

3,065

2,836


2,680


14.4%

Core revenues

11,647

11,230


10,151


14.7%

Provisions for loan losses

2,534

1,994


1,080


134.6%

Administrative and promotional expenses

5,179

4,559


4,630


11.9%

Net income

4,215

5,285


4,123


2.2%

Net income per share*

2.1

1.5


1.5


39.0%

Balance Sheet Data







Total loans

343,383

338,905


310,129


10.7%

Deposits

336,289

330,875


307,876


9.2%

Shareholder´s equity

94,794

95,545


90,146


5.2%

Key Ratios






pbs

Net interest margin

4.98%

4.87%


5.15%


-17.0

Net loans to deposits ratio

98.7%

99.1%


97.2%


154.2

ROAE

21.1%

22.4%


16.9%


421.0

ROAA

2.6%

2.6%


2.0%


60.8

Efficiency ratio

36.9%

35.0%


42.3%


-541.8

Capital ratio

14.45%

14.63%


14.24%


21.6

NPL's

1.6%

1.5%


2.2%


-55.3

Coverage ratio

205.4%

224.2%


162.5%


4,292.5

Operating Data






%

Branches**

1,123

1,125


1,099


2.2%

ATMs

4,840

4,779


4,641


4.3%

Customers

9,764,741

9,583,468


9,184,726


6.3%

Employees

12,766

12,461


11,999


6.4%








*Treasury Shares and discontinued operations are not included




** Includes Brokerage House Branches




To obtain the full text of this earnings report and the 3Q12 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/inf_financiera/inf_trimestral.html

3Q EARNINGS CALL DIAL-IN INFORMATION

Date – Friday, October 26, 2012
Time – 8:00 AM (MCT); 9:00 AM (US ET)
Dial-in Numbers – 1-480-629-9664 Mexico and International; 1-877-941-1427 US and Canada
Access Code – 4570856
Webcast – https://viavid.webcasts.com/starthere.jsp?ei=1009721
Replay – Starting: Friday, October 26, 2012 at 11:00 AM (MCT); 12:00 PM (US ET). Ending: Friday, November 2, 2012 at 11:00 PM (MCT); 12:00 AM (US ET).

About Grupo Financiero Santander Mexico, S.A.B. de C.V. (NYSE: BSMX BMV: SANMEX)
Grupo Financiero Santander Mexico, S.A.B. de C.V., one of Mexico's leading financial services holding companies, provides a wide range of financial and related services, including retail and commercial banking, securities brokerage, financial advisory, and other related investment activities. Santander Mexico offers a financial services platform focused on mid- to high-income individuals and small- to medium-sized enterprises, while also providing integrated financial services to larger multinational companies in Mexico. As of September 30, 2012, Santander Mexico had total assets of Ps.771.4 million under Mexican Banking GAAP and more than 9.7 million customers. Headquartered in Mexico City, Santander Mexico operates 1,123 branches located throughout Mexico and has a total of 12,766 employees.

LEGAL DISCLAIMER

Grupo Financiero Santander Mexico cautions that this report may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements could be found in various places throughout this report and include, without limitation, statements regarding our intent, belief, targets or current expectations in connection with: asset growth and sources of funding; growth of our fee-based business; expansion of our distribution network; our focus on strategic businesses; our compound annual growth rate; our risk, efficiency and profitability targets; financing plans; competition; impact of regulation; exposure to market risks including interest rate risk, foreign exchange risk and equity price risk; exposure to credit risks including credit default risk and settlement risk; projected capital expenditures; capitalization requirements and level of reserves; liquidity; trends affecting the economy generally; and trends affecting our financial condition and our results of operations. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: changes in capital markets in general that may affect policies or attitudes towards lending to Mexico or Mexican companies; changes in economic conditions, in Mexico in particular, in the United States or globally; the monetary, foreign exchange and interest rate policies of the Mexican Central Bank (Banco de Mexico); inflation; deflation; unemployment; unanticipated turbulence in interest rates; movements in foreign exchange rates; movements in equity prices or other rates or prices; changes in Mexican and foreign policies, legislation and regulations; changes in requirements to make contributions to, for the receipt of support from programs organized by or requiring deposits to be made or assessments observed or imposed by, the Mexican government; changes in taxes; competition, changes in competition and pricing environments; our inability to hedge certain risks economically; economic conditions that affect consumer spending and the ability of customers to comply with obligations; the adequacy of allowances for loans and other losses; increased default by borrowers; technological changes; changes in consumer spending and saving habits; increased costs; unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive terms; changes in, or failure to comply with, banking regulations; and certain other factors indicated in the "Risk Factors" section of our Registration Statement on Form F-1 (File No. 333-183409). The risk factors and other key factors that we have indicated in our past and future filings and reports, including those with the U.S. Securities and Exchange Commission, could adversely affect our business and financial performance.

Note: The information contained in this report is not audited. Nevertheless, the consolidated accounts are prepared on the basis of the accounting principles and regulations prescribed by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) for credit institutions, as amended (Mexican Banking GAAP). All figures presented are in nominal terms. Historical figures are not adjusted by inflation.

SOURCE Grupo Financiero Santander Mexico, S.A.B. de C.V.

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