MEXICO CITY, October 30 (Reuters) – Mexico’s Grupo Financiero Banorte expects a deterioration of its portfolio during the remainder of the year as the coronavirus pandemic rages on, but that it should return to usual numbers by the end of next year, a top executive said on Friday.
“We will see a continuous deterioration of our portfolio … in the fourth quarter,” Rafael Arana de la Garza, chief operating officer and chief financial officer, told investors in a call following Thursday’s quarterly results.
But he insisted the group, which has one of the biggest weights in the Mexico’s benchmark stock index, was resilient enough to weather the impact of the pandemic.
“If we see that deterioration goes beyond what we expect, Banorte has the balance sheet, the capital, the strength and the income to provide additional provisions if needed.”
The group reported a 8.9 billion peso ($403 million) net profit for the third quarter, a 1% gain over the same period last year, but a 37% increase compared with the second quarter this year.
Arana de la Garza said it is difficult to give further guidance considering unprecedented developments.
“We know this is a work in progress,” he added. “We will go back to the usual numbers that we have, I think, at the end of 2021.”
The group’s portfolio comprises one of the country’s largest banks as well as one of the largest pension funds.
Its shares were trading at 93.21 pesos on Friday in the early afternoon, up from the 89.34 pesos at close the previous day. Year to date, the shares had lost more than 11.6%.
(Reporting by Stefanie Eschenbacher Additional reporting by Miguel Angel Gutierrez; Editing by Steve Orlofsky for Reuters)
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