Afore Bancomer Acquisition Conference Call Presentation VF

Draft as of November 30, 2012
GBOOY
XNOR
Grupo Financiero Banorte
Conference Call
December 3rd, 2012.
Transaction Highlights
On November 27, 2012, GFNORTE reached an agreement with Banco Bilbao Vizcaya Argentaria and
BBVA Bancomer to acquire Afore Bancomer through Afore XXI Banorte, a subsidiary of Banco Mercantil
del Norte (“Banorte”).
The agreed purchase price equals to US$1,600 million in cash, of which Banorte will contribute 50% and
the Mexican Social Security Institute (“IMSS”) the remaining 50%.
–
As part of the agreement, the sellers will extract from Afore Bancomer any excess capital above the
minimum regulatory capital at the closing date.
GFNORTE has sufficient resources to cover its corresponding payment, either by using its capital or
through other liquidity sources, such as loan commitments already negotiated with other financial
institutions, among others.
The acquisition is subject to the approval of the Federal Commission for Economic Competition
(Comisión Federal de Competencia Económica - COFECO) and other customary closing conditions.
−
The National Commission for Retirement Savings System (Comisión Nacional del Sistema de
Ahorro para el Retiro - CONSAR) already granted approval of the transaction on November 29, 2012.
The closing of this transaction is expected to take place in the first quarter of 2013 and both Afores are
expected to start reporting on a combined basis in the second quarter of the same year.
−
2
GFNORTE will continue to account for its part of the combined business using the equity
participation method.
Transaction Structure
The operations of Afore Bancomer will be integrated into Afore XXI Banorte, a subsidiary of Banorte,
once the transaction is finalized. The corporate identity and operations of Afore XXI Banorte will subsist,
becoming the largest retirement savings manager in Mexico.
Grupo Financiero Banorte
Banking Sector
Banco
Mercantil
del Norte(1)
Ixe Banco(3)
Banorte USA(2)
Banorte Ixe Tarjetas(2)
1)
2)
3)
4)
5)
6)
7)
8)
3
92.72% GFNorte.
100% Banco Mercantil del Norte.
99.99% GFNorte.
51% GFNorte, 49% Generali.
50% Banco Mercantil del Norte, 50% IMSS.
100% Ixe Automotriz.
99.99% Fincasa Hipotecaria.
100% Casa de Bolsa Banorte Ixe.
Long Term
Savings
Other Finance
Companies
Brokerage
Seguros
Banorte
Generali(4)
Arrendadora y
Factor Banorte(3)
Ixe Servicios(3)
Casa de Bolsa
Banorte Ixe(3)
Pensiones
Banorte
Generali(4)
Almacenadora
Banorte(3)
Ixe Soluciones(3)
Ixe Fondos(3)
Ixe Automotriz(3)
Banorte
Securities(8)
Afore XXI
Banorte(5)
Ixe Fleet(6)
Fincasa
Hipotecaria(3)
Afore
Bancomer(5)
Casa Servicios
Administrativos(7)
Transaction Rationale
Increases portion of GFNORTE’s earnings from a
stable, high cash flow generation business with
an attractive growth profile.
Afores by AuM
Billion Pesos | As of October 2012
28%
15%
13%
600
Further diversification of income generation to a
business with no credit risk or market risk.
517
500
400
319
279
300
–
Limited capital consumption.
251
237
215
123
200
Creates the #1 pensions administrator in Mexico
with close to Ps$517Bn (~US$40Bn) in AUM and
12 million affiliates.
Potential to capture synergies from optimization
of sales forces and administrative expense
savings.
−
Cross-adoption of best practices.
−
Afore XXI Banorte’s management team has
hands-on experience in the integration of
pensions platforms.
100
98
94
100
61
67
0
XXI Banorte
Bancomer
XXI Banorte
Principal
Inbursa
Coppel
+
Pension
Bancomer Banamex
SURA
Profuturo GNP
Invercap
Others(1)
ISSSTE
pro forma
Afores by Affiliates
Millions | As of October 2012, Excludes Assigned with Resources at BANXICO
27%
17%
10%
14
11.8
12
10
7.9
8
6
4
Opportunity to further develop Afore XXI
Banorte’s voluntary savings business for
individuals and corporate plans.
1.
2.
4
Includes Metlife, Azteca and Afirme Bajio
Includes PensionISSSTE, Azteca and Afirme Bajío
2
7.3
6.2
4.5
3.9
3.8
3.1
2.9
1.1
1.1
1.3
0
XXI Banorte XXI Banorte
Bancomer
Coppel
Invercap
Metlife
+
Bancomer
SURA
Principal
Profuturo GNP
Inbursa
Others(2)
pro forma Banamex
Market Share (%)
Transaction Rationale (Continued)
GFNORTE’s combined assets under management
base will grow to over Ps$1,700Bn (~US$131Bn).
GFNORTE | Assets Under Management
Billion Pesos
1,711
Expansion into a high return-on-equity and high
net income growth business.
279(1)
1,432
Transformational Transaction in a High-Growth Business
237(1)
58
95
58
95
Insurance & Annuities
2009
:
AGR
)
D(1 C
T
Y
2
1
– 20
.5
t e 19
anor
B
I
XX
548
548
Broker-Dealer
464
494
494
Banking Sector
2011
3Q12
%
15.2
712
86
39
37
137
1,258
498
413
983
978
1000
925
Mutual Funds
50
81
1,380
1,349
Afore XXI Banorte
1,296
203
mer
anco
%/ B
516
237(1)
Net Income | Million Pesos
1500
Afore Bancomer
896
2010
3Q12 Pro-Forma
ROAE
50%
41%
593
33%
24%
15%
500
2009
2010
XXI Banorte(3)
1.
2.
3.
5
2011
October 2012YTD
1
Afore Bancomer
42%
37%
36%
31%
26%
20%
2009
XXI Banorte(3)
2010
Afore Bancomer
As of October 2012
Peers Include: Afirme Bajío, Azteca, Banamex, Coppel, Inbursa, Invercap, Metlife, PensionISSSTE, Principal, Profuturo GNP, SURA
Historicals are pro-forma for the combination of Afore XXI and Afore Banorte Generali
2011
October
2012YTD
2012YTD
Peer Average (2)
Highlights of Afore Bancomer
AUM
# 2 Player
(Billion Pesos)
History of
Sustainable
Growth
279
300
211
180
200
237
100
2009
2010
2011
Revenues
3.5
3.48
3.46
3.44
3.42
3.4
3.38
3.36
3.34
3.32
3.3
3.28
3.26
3.24
3.22
3.2
3.18
3.16
3.14
3.12
3.1
3.08
3.06
3.04
3.02
3
2.98
2.96
2.94
2.92
2.9
2.88
2.86
2.84
2.82
2.8
2.78
2.76
2.74
2.72
2.7
2.68
2.66
2.64
2.62
2.6
2.58
2.56
2.54
2.52
2.5
2.48
2.46
2.44
2.42
2.4
2.38
2.36
2.34
2.32
2.3
2.28
2.26
2.24
2.22
2.2
2.18
2.16
2.14
2.12
2.1
2.08
2.06
2.04
2.02
2
(Billion Pesos)
3.2
3.0
2010
2011
October 12012YTD
2.6
October
1 2012
Operating Margin
3.1
2009
Operating Expenses as % of AUM
1.6
(%)
80%
Strong
Profitability and
Efficient
Cost Base
1.3
1.4
66%
51%
46%
60%
50%
40% 37%
29%
1.2
1.0
1
0.7
1.1
0.8 0.6
0.8
0.7 0.5
0.8
0.6
0.6 0.4
0.7
0.4
0.2
20%
0
2009
XXI
Banorte(2)
2010
2012YTD
2011 October
2012YTD
Afore Bancomer
Peer
2009
Average(1)
XXI
2010
Banorte(2)
2011
October 12012YTD
Peer Average(1)
Afore Bancomer
Average AUM per Affiliate
(Thousand Pesos)
78.00
47
58.00
40
48.00
38.00
28.00
21
32
26
34
29
37
33
44
51
18.00
8.00
-2.00
2009
XXI Banorte(2)
High-Potential
Non-Mandatory
(Voluntary)
Business
2010
Afore Bancomer
2011
Peer Average(1)
October
2012YTD2012YTD
XXI Banorte(2) + Afore Bancomer
First Afore to offer corporate sponsored savings Siefore.
First Afore to offer public sector Siefore.
1.
2.
6
62
54
68.00
Higher Account
Balance
per Affiliate
Peers Include: Afirme Bajío, Azteca, Banamex, Coppel, Inbursa, Invercap, Metlife, PensionISSSTE, Principal, Profuturo GNP, SURA
Historicals are pro-forma for the combination of Afore XXI and Afore Banorte Generali
Synergies Potential
Sources of Synergies
Targeted Level
Commercial expense efficiency from
optimization of sales force and crossadoption of commercial best practices.
10% to 20% savings in combined sales
force expenses.
Optimization of fixed cost and base.
20% to 30% of fixed administrative
expense base of Afore Bancomer.
Estimated pre-tax synergies of between Ps. 300MM to Ps. 500MM per year to be phased-in over the
first two years of operations of the combined business.
7
Transaction Multiples
Key Transaction Metrics
Ps. MM
US$MM (2)
20,778
1,600
279,290
21,507
Net Income – October 2012 LTM
1,610
124
Net Income – 2012 Annualized(1)
1,657
128
Statistics
Purchase Price
AuM – October 2012
Affiliates (MM) – October 2012
4.49
Multiples
Price / AuM – October 2012
7.4%
Price / Net Income – October 2012 LTM
12.9x
Net Income – 2012 Annualized(1)
12.5x
Price / Affiliates – October 2012
Ps. 4,625
1.
2.
8
2012 full-year net income calculated by annualizing the year-to-date accumulated net income to October 2012
Amounts converted from Pesos to US Dollars for convenience purposes only using the FIX exchange rate of MXN 12.986 per US Dollar published by Banco de Mexico on the transaction
announcement date (November 27, 2012)
GBOOY
XNOR
Grupo Financiero Banorte
Conference Call
December 3rd, 2012.