Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México

For 4Q22, net income was MXN 6.3 billion, up 20% year over year; gross operating income rose close to 18% YoY and 6% sequentially; net interest income increased 24% YoY and almost 9% QoQ; net commissions and fees grew almost 8% YoY; and NIM expanded 82 bps YoY to 5.28%. For the year, total loans grew close to 8% YoY, total deposits increased 7% YoY, ROE was nearly 16% for 2022, NPLs were 1.88%, and cost of risk was 1.56%. Management said it expects the effective tax rate to be between 25% and 26% by year-end, and it described 2023 as likely to remain supportive for margins, with interest rates expected to stay elevated and possibly rise slightly further.

Felipe García framed 2022 as a very successful year and emphasized the bank’s record profitability, better risk metrics, and continued outperformance in consumer lending. He highlighted the strategic shift toward individuals, stronger digital capabilities, and the opportunity from nearshoring in Mexico, while acknowledging that the macro backdrop remains challenging. His tone was confident and forward-looking, but also candid that the bank still wants to deepen its retail mix and can improve further.

Didier Mena focused on the mechanics behind the quarter: total loans were up close to 8% YoY, deposits up 7% YoY and 9% sequentially, and the bank continued to reprice and manage funding to improve profitability. He cited a liquidity coverage ratio of 181.2%, core equity Tier 1 of 13.93%, total capitalization of 19.38%, and a loan-to-deposit ratio of 94.4%. He also noted NII up 24% YoY, NIM at 5.28%, efficiency ratio improving to 48%, and said the 2022 NPL and cost of risk benefited from nonrecurring items and should normalize over time.

Analysts pressed on commercial-loan softness, mortgage charge-offs, rate sensitivity, the October call option on Santander Mexico’s capital securities, and the strategy for delisting. Management said middle-market commercial balances were affected by competitive pricing and some amortization, while mortgage write-downs were described as routine NPL management rather than a special issue. On margins, Felipe García said a 100 bps parallel rate move could add close to MXN 600 million, and that 2023 NIM could be 100 to 150 bps higher than last year; on the capital securities, the company said it is evaluating whether to call, renew, or let them run off based on market conditions.