Grupo Financiero Santander Mexico Reports First Quarter 2014 Loan Portoflio Up 16.2% YoY and Net Income of Ps.3,259 Million

MEXICO CITY, April 29, 2014 /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-month period ending March 31, 2014.

Reported net income for the quarter was Ps.3,259 million, representing YoY and QoQ decreases of 30.9% and 46.9%, respectively. Comparable net income in 1Q14 decreased 27.0% YoY and increased 8.9% sequentially. Comparable 4Q13 results exclude the following items: i) a Ps.1,927 million net gain after taxes resulting from the divestiture of the asset management business, ii) a Ps.1,074 million benefit from recognized advanced tax credits and iii) an extraordinary net benefit of Ps.199 million before taxes related to the mandatory regulatory change in employee profit sharing (EPS) future payments occurred in 4Q13. Additionally, comparable 1Q13 results exclude a tax benefit of Ps.250 million resulting from the sale of a previously written-off loan portfolio.

Marcos Martínez, Executive President and CEO, commented, "We started the year with strong loan growth, up 16%, substantially above Mexican financial system growth rates during the period, and reported a positive performance across all core segments. Most importantly, this solid growth was achieved in a continued challenging macro environment that negatively affected the overall financial system. Furthermore, organic growth, excluding the mortgage acquisitions, remained solid at 12% YoY, also well-above market growth."

"Among our core products, SME loans grew YoY by 29% as we continue to further strengthen our leadership position in this attractive market with a differentiated value proposition through a specialized network. Our strong focus on the mid- and high-income mortgage market has allowed us to expand this portfolio by 32%, underscoring our #2 position. Despite still challenging consumer market conditions, we have started to see an incipient pick-up in growth rates in the credit card segment - up 9% YoY this quarter. Our focus on core products is further supported by continued growth in Middle-Market, a segment that has achieved strong performance - up 21% this quarter."

"Commissions and fees also showed a positive performance - up 6% YoY, even when compared against a strong year-ago quarter. Net interest income increased 4% YoY, with net interest margin of 5.05%, reflecting business growth and lower cost of funding. Gross operating income, however, remained stable affected by unusually high trading gains in 1Q13. We also remained on track with our expansion plan, opening 103 new branches to-date, for a total of 200 planned, which we expect will further drive deposit growth and support our liquidity profile."

Mr. Martínez concluded, "Looking ahead, we expect economic activity and GDP growth to pick up in the second half of the year, driving incremental demand for the core financial services that we offer."

To obtain the full text of this earnings report and the 1Q14 earnings presentation, please click on the following link: http://www.santander.com.mx/ir/english/financial/quarterly.html

1Q14 EARNINGS CALL DIAL-IN INFORMATION

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. (Santander Mexico), 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 multichannel 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 March 31, 2014, Santander Mexico had total assets of Ps.867.2 billion under Mexican Banking GAAP and more than 10 million customers. Headquartered in Mexico City, the Company operates 1,038 branches and 241 offices nationwide and has a total of 14,384 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 may 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 our annual report20F. 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 for inflation.

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