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2Q02 RESULTS

2Q02 RESULTS. 2Q02 GFNORTE RESULTS. Highlights. GFNORTE GFNorte’s Net Income (PS million) 912.6 1,141.0 GFNorte’s Net Income (PS million) (Excluding Generali) 742.6 ROE 21.2% 23.2%

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2Q02 RESULTS

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  1. 2Q02 RESULTS

  2. 2Q02 GFNORTE RESULTS Highlights GFNORTE GFNorte’s Net Income (PS million) 912.6 1,141.0 GFNorte’s Net Income (PS million) (Excluding Generali) 742.6 ROE 21.2% 23.2% ROE (Excluding Generali) 15.2% EPS (Ps/per share) 1.81 2.28 Book Value 18.03 20.78 BANKING SECTOR Banking Sector’s Net Income (PS million) 779.1 984.9 Banking Sector’s Net Income (PS million) (Excluding Generali) 618.4 Capitalization Ratio 15.6% 13.1% Loan Portfolio annual growth (Exc.FOBA/IPAB) (21.1)% 46.8% Total Deposits annual growth 9.3% 48.7% Past due loan ratio 5.4% 3.4% Reserve Coverage 100.0% 117.2% 1H02 1H01

  3. GFNorte generated profits for PS 1,141 million in 1H02 ACCUMULATED NET INCOME IN 1H02 MILLIONS OF PESOS BANKING PS 984.8 86.3% LONG TERM SAVINGS $75.7 6.6% AUXILIARY ORGANIZATIONS $32.8 2.9% BROKERAGE $53.9 4.7% HOLDING ($6.2) (0.5%) GFNORTE PS 1,141.0 100%

  4. Traditional loan portfolio showed an important growth specially in Mortgage and Consumer loans 1Q02 2Q02 % GROWTH QTR YR 2Q01 LOAN PORTFOLIO (Millions of Pesos) 14,542 45.0% 13,825 Commercial 10,028 5.2% 13,028 281.0% 11,936 Mortgage and Consumer 3,419 9.1% 9,211 367.5% 8,711 Mortgage 1,970 5.7% 1,204 127.3% 1,053 Credit Card 530 14.4% 2,241 207.0% 1,859 Auto 730 20.5% 372 96.3% 313 Other 189 18.7% Corporate 9,353 30.0% 8,728 7,193 7.2% Recovery Banking 5,689 (13.6)% 6,008 6,587 (5.3)% DATA AS OF JUNE ‘02.

  5. Bancrecer’s Integration • Commercial: • We started the third stage of the integration process – Commercial Integration – in May. • By the second quarter, 67 branches were closed down, for a total of 97 shutdowns.The network now consists of 1,091 branches. • 13 additional offices are scheduled for shutdown in July. Personnel • Downsizing adjustments made, imply a 1,974-employee reduction, an a monthly saving of Ps 25 million, equivalent to 13.6% vs. the payroll on December 31, 2001. Annual savings in personnel are Ps 540 million. • Communication with personnel has been enhanced through the Banorte Corporative Intranet information system. • Salaries of Bancrecer’s personnel were equalized to those of Banorte.

  6. Bancrecer’s Integration Operations and Technology • The inter-operational project that started last April 22 has won the acceptance of clients of both banks. Bancrecer’s attrition rate is 5%. • Applications will gradually be released to enhance service. • By October, we will be fully integrated for the public. Marketing • Re-branding inside the branches is practically completed. • We are currently starting with the external re-branding in branches, which should be completed by the end of third quarter.

  7. TOTAL Banorte 6,538 Bancen 2,463 Banpaís 16,228 REPOSESSED ASSETS 12,738 TOTAL ASSETS $62,911 100% Eventhough assets under management of the Recovery Banking represent an important figure, the risk involved is low SHARED W/IPAB BANORTE IPAB 27% 5,549 989 0 2,463 16,228 Loans purchased or managed-IPAB 10,718 24,944 11,196 3,030 1,021 Serfín 13,748 0 10,718 3,030 2,544 New Portfolios 11,196 0 11,196 0 TOTAL LOAN PORTFOLIOS 19% 16,745 11,707 21,721 50,173 1,228 3,038 8,472 $30,193 $17,973 $14,745 48% 29% 29% 23% 48% 23% MILLIONS OF PESOS OF JUNE 2002

  8. The Non Interest Expense control has been fundamental ... ... resulting in a 15% expense decrease from 1999 to 2001. NON INTEREST EXPENSE PER BRANCH NON INTEREST EXPENSE 6.7 4.0 7,466 6,325 6,377 1H01 1H02 15% 1999 2000 2001 MILLIONS OF PESOS OF JUNE 2002

  9. COMPARATIVES TO THE INDUSTRY ASSETS 25.5% 22.2% 14.6% 10.5% 2° 7.9% 7.9% 4° GFBVA- BANCOMER BANACCI GFNORTE SCOTIABANK GF SANTANDER GFBITAL SOURCE: CNBV AT 1Q02.

  10. COMPARATIVES TO THE INDUSTRY DEPOSITS 26.7% 21.5% 15.0% 11.8% 2° 5.3% 8.8% 4° GFBVA- BANCOMER BANACCI GFNORTE SCOTIABANK GF SANTANDER GFBITAL SOURCE: CNBV AT 1Q02.

  11. COMPARATIVES TO THE INDUSTRY LOAN PORTFOLIO (Including Fobaproa/IPAB) 26.1% 20.3% 14.3% 2° 13.8% 5.4% 6.8% 3° GFBVA- BANCOMER BANACCI SCOTIABANK GFBITAL GF SANTANDER GFNORTE SOURCE: CNBV AT 1Q02.

  12. COMPARATIVES TO THE INDUSTRY NUMBER OF BRANCHES 23.5% 20.8% 19.2% 16.2% 2° 12.9% 5.1% 4° GFBVA- BANCOMER GFBITAL BANACCI GF SANTANDER GFNORTE SCOTIABANK SOURCE: CNBV AT 1Q02.

  13. COMPARATIVES TO THE INDUSTRY GFNorte´s ROE ranks among the highest in Mexico ROE MARCH 2002 40.4% 15.5% 15.2% (1) 14.8% 2° 2° 8.3% * 2° 2° 5.9% GFSANTANDER GFBVA- BANCOMER BANACCI GFBITAL 2Q02 1Q02 GFNORTE (1) Excluding Ps 383 million of extraordinary income from Generali SOURCE: PRESS RELEASE EACH BANK AT 1Q02. * AS OF SEPTEMBER 2001

  14. The capitalization ratio increased to 13.1% with rules of 2003 CAPITALIZATION RATIO 2001 2003 2003 2003 2001 RULES OF: 18.5% 12.9% 13.1% 2° 2° 12.3% 2° 2° 12.1% 9.3% SANTANDER SERFÍN BANAMEX 1Q02 BBVA - BANCOMER 2Q02 BITAL BANORTE Data as of March ‘02 from the Press Release of each bank. * AS OF DECEMBER 2001.

  15. RECENT EVENTS • Payment from Generali • Assicurazioni Generali made a USD 45 million payment to Banorte in June’02 for the expansion of it’s branch network after Bancrecer acquisition, and for the technological infrastructure developments for the Afore, Bankassurance and Annuities businesses. This payment was accounted as an Extraordinary Income in the 2Q02. • Afin Casa de Bolsa lawsuit • GFNorte was granted a temporary Stay of proceedings in the lawsuit against it’s brokerage house. The lawsuit in question was filed in 1994 against Afin Casa de Bolsa (later Casa de Bolsa Banorte). In it, the widow and heirs of Mr. Lance de la Torre claim the AFIN 7.8% stake that belonged to the deceased, as well as payment of the dividends genereted from 1990 to 1994.

  16. RECENT EVENTS • This lawsuit is unsubstantiated as these shares were given over, and later-sold-as per their own instructions-through the Mexican Stock Exchange, since June, 1990. • There have been attempts to involve GFNorte in the process, therefore the Group submitted last July 5th an Indirect writ of Relief on the “habeas corpus” procedure as it is clear that it can not be condemmed in a trial of which it was never a part. • Moreover, AFIN Casa de Bolsa also filed criminal charges against judges and magistrates of the court of equity, as well as the federal judges, who were aware of the issue in the first and second instances and the writ for relief.

  17. Risk Factors Operating Risks Bancomer Banorte Fierce competition of international institutions Consolidation in the sector Same Subsidiaries´ co-obligations Minimum capital requirements Same Insolvency Same Non income generating activities of the Holding Co. All income comes from subsidiaries Same Government regulations could be adverse Loan loss provisions Same Capital requirements Same Debtors support programs Same Inadequate loan loss provisions estimate Tighter requirements Same USD 9.1 Billion (67%) Fobapora-IPAB exposure USD 8.6 Billion (35%) Short term deposits Same Short term funding Foreign exchange asset-liability mismatch Some mismatch No mismatch Lower USD exposure Dollar exchange rate and interest rate volatility Risks associated Majority shareholder official investigation BBVA and some Board members No investigations Integration of another bank in process BBV-Probursa and Promex Bancrecer

  18. Risk Factors Country Risks Bancomer Banorte A recesion and/or inflation and interest rates increase Example: 1994 economic crisis Same Peso-dolar exchange rate depreciation or devaluation Impact on financials Same International adverse events Close tights with the USA Same Terrorist attacks to the U.S. New attacks against USA Same

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