El Futuro and Bineo. He will conclude presenting our 2026 guidance. Please note that today's presentation may include forward-looking statements that are subject to risks and uncertainties, which may cause actual results to differ materially. On page 2 of our conference call deck, you will find our full disclaimer regarding forward-looking statements. Thank you. Marcos, please go ahead.
Thank you, Tomás. Good morning, everyone. I hope this new year brings you all the best, and thank you for joining us today. As I always say, I consider myself an evidence-based optimist. Despite a challenging and precarious environment marked by a sluggish economic growth and a trade and regulatory uncertainties, we closed the year delivering on the commitments we set to the market, showing solid and resilient performance across our key structural metrics. After the strong fourth quarter results and overall throughout 2025, I have a constructive view of this new year's operating momentum and our ability to keep capturing market shares. On the macro front, we expect GDP to end 2025 in line with our initial expectation of 0.5%.
Looking ahead, we anticipate a recovery in Mexico economic activity in 2026, reaching 1.8% GDP growth, supported by stronger private consumption. We expect incremental tourism spending from the FIFA World Cup to add 40-50 basis points in GDP growth, together with a rebound in construction and investment. Exports should remain a key driver of growth, particularly due to the fundamental USMCA trade negotiation taking place with the US. We expect dialogue to remain constructive, and we believe current global conditions point toward greater integration of value chains between both, both countries, enable the opportunity to strengthen the development hubs under Plan Mexico, boost investment and reinforce Mexico's role as a strategic North American partner.
On monetary policy, after the Mexican Central Bank cut its reference rate by cumulative 300 basis points in 2025, closing the year at 7%, we believe it is now nearing the end of its easing cycle. For 2026, we anticipate inflationary pressures to reach 4.4%. Therefore, we forecast two additional 25 basis points cuts in the first half of the year, bringing the policy rate to 6.5%, which we expect to be the terminal rate for the current cycle. On the fiscal side, the government is expected to maintain its consolidation efforts in 2026, in line with the budget approved by the Congress. Finally, we expect the exchange rate to remain stable in 2026, supported by a weaker US dollar, lower risk premiums, ample global liquidity, and favorable macro conditions for the Mexican peso.
Thus, expecting a year-end level of MXN 18.1 per $1. Now, starting off with the group's overall financial performance on slide 3, we closed the year with a very strong quarter, reported by a solid operating trends, with lending and fee activity expanding, driven by healthy private consumption, declining cost of funds, and higher seasonal transaction volumes. Margin performance was supported by our continued efforts to minimize our balance sheet sensitivity, a strong risk metrics, and optimized funding costs, which fully offset the impact of declining rates of the loan portfolio. Capital generation remains strong and continues to support high-value returns for our shareholders.
We closed the year with a 20.1% capital and equity ratio, widely surpassing the TLAC requirements of 18.34, thirty-fourth, which is now fully implemented after a 4-year ramp-up period, and the CET1 of 12.6%, aligned with our management target after the distribution of the extraordinary dividend at the end of the last year. After delivering an 88% payout ratio in 2025, we still hold close to MXN 11 billion at the holding company available for organic growth alternatives. Before moving into profitability, as you know, from our material event at the end of the year, we finalized the acquisition of Tarjetas del Futuro. Therefore, we have deconsolidated the legal entity from the groups and the bank's financial statements and integrated its operations into Banorte.
With this, Tarjetas del Futuro was recognized as a discontinued operation, and the reclassification was made retroactively up to 2024, as per the accounting norms. This step enhances our value propositions by building on the scale on operational capabilities that we already have, allowing us to evolve from a single product business into a multi-product platform, boosting profitability and creating larger opportunities for growth. Now, continuing with profitability on the slide number 4, reported net income for the quarter reached MXN 15.9 billion, up 22% sequentially. This marks a strong recovery after a quarter impacted by an isolated stage 3 loan case, as you know, showing solid performance across our core businesses, a well-protected balance sheet, healthy risk metrics, and the offset of the year-end expense seasonality.
With accumulated figures, net income reached MXN 58.8 billion, fully in line with our guidance and 5% higher than in 2024, driven by the diversification of our revenue streams and disciplined expense management. ROE for the quarter stood 24.2%, 411 basis points higher compared to the previous quarter. For the full year, ROE stood at 22.8%, up 36 percentage points in the year, and very close to the upper end of our guidance. Analyzing results by subsidiary in slide 5, the banks reported net income of MXN 12.5 billion in the quarter, and MXN 46.5 billion in 2025, with sound core banking operations driven by healthy lending growth, especially in the fixed rate portfolio, neutralization of balance sheet sensitivity, optimized cost of funds, and a strong fee revenue.
Altogether, these results yielded a 29% ROE for the bank in 2025, 5 basis points above 2024. Notably, December ROE reached a very strong 36.8%, confirming the positive trend where we ended the year and entered 2026. Rafa will provide more details later in the presentation. The insurance business grew 23% compared to 2024, driven by higher premium issuance, mainly in the life segment, an additional business generation related to the bank's lending activity. These factors helped offset higher fees from the bancassurance operation. The annuities business is likely contracted by 1% versus 2024 and 7% quarter-over-quarter. The annuity is explained by a base effect from the last period release of technical reserves, despite higher business volumes.
As for the pension fund businesses, cumulative positive results were driven by higher yields on financial products and increasing fees from larger base assets under management, despite growing expenses from commercial efforts aimed at attracting customers from different demographics. Finally, the brokerage sector reported double-digit growth, boosted by larger transaction fees. On slide number 6, loan portfolio growth was in line with guidance, expanding 8% in the year and 9% excluding the government portfolio. Commercial and corporate portfolios grew 5% and 8% respectively, still driven by short-term working capital requirements. As I mentioned before, due to the uncertainty surrounding the USMCA renegotiation, both segments decelerated during the year. However, we remain confident that a positive outcome will lead to a rebound in the second half of 2026.
Moreover, these portfolios were also impacted by exchange rate fluctuations in the dollar book, which currently represents 14.5% of the total portfolio. On the other hand, our government book rose 1% in the year and 19% quarter-on-quarter. This year-end acceleration was mainly related to resuming activity with the states and municipalities, despite large prepayments registered during the quarter. We reiterate our appetite for government lending, and we are constructive in the collaboration we can have with the government to develop the country with with infrastructure, with projects as Plan Mexico evolves. Turning to slide number 7, overall consumer lending remained the main growth driver of the loan expansion, increasing 12% in the year, supported by resilient consumption trends and employment levels, an effective cross-sell strategy tailored to each client's needs, and the continued scaling of our hyperpersonalization model.
The mortgage book rose 7%, thanks to an improved origination process, strategic alliances, and a disciplined risk approach. We anticipate a reactivation in the sector's demand as the reduction in the reference rate is transferred to customers' pricing. Auto loans posted a strong 32% increase for the year, supported by our commercial alliances with leading car dealerships and higher overall activity in the sector. We continue to build a robust network that ensures our availability and the competitiveness of our offering with the best-selling brands. Looking ahead, we expect growth to moderate into the high teens in 2026, following a higher base. Regarding credit cards, this business rose 14% year over year, driven mainly by our improved promotions, enhanced rewards and loyalty programs for existing clients, along with tailored marketing campaigns, allowing us to fully capture the seasonal increase in transactions.
Finally, payroll loans also displayed solid growth, up 11% versus 2024. This reflects our refreshed product offering, designed to meet short-term liquidity needs, combined with process improvements and greater availability to digital channels, while also driving additional demand deposits that help optimize funding costs. On slide number 8, we maintain top-level asset quality with a NPL ratio of 1.4% at year-end, despite the non-systemic case in our commercial portfolio discussed last quarter and continued growth across all portfolios. Cost of risk stood at 1.8%, fully in line with our guidance for the year. It is also worth noting that so far, we see no signs of sectoral or geographical deterioration in our books, and we expect this indicator to continue normalizing throughout 2026 as consumer lending continues to expand.
On slide number 9, fees grew 20% sequentially and 5% for the full year. The sequential increase reflects higher transaction activity, driven by seasonal factors. For the year, stronger volumes in consumer products and mutual funds, together with the effect of prioritizing efficiency and profitability in digital-affiliated businesses, drove these positive results. However, it was slightly offset by a larger fee paid on credit origination to the external sales force. These results reflect the strength of our operating model, supported by the continued evolution of our digital capabilities, disciplined risk approach, process improvement efficiencies, and our ability to deliver hyper-personalized offerings tailored to our customers' needs. This combination has strengthened operational efficiency, enhanced service quality and customer experience, and reinforced our execution consistency.
Importantly, these capabilities enable us not only to mitigate the impact of limited economic growth on the country, but also to strengthen customer preference and loyalty, making Banorte stand out and capture opportunities as the competitive landscape, landscape evolves. On the ESG front, on the slide number 10, I would like to highlight the environmental pillar, where we made relevant progress in lowering our energy and water consumption from our operations during the year. In our branch network, we obtained the EDGE Sustainable certification for the first 48 branches, and we will go for more in 2026. We completed the installation of electric vehicle chargers in all our corporate buildings, supporting sustainable mobility for our employees, and now more than 30% of the energy that we use comes from renewable sources.
Furthermore, as I mentioned earlier, auto loans had a relevant growth during the year, and more than 23% of them were hybrid and electric vehicles. Regarding our commitment to plant 1 million trees by 2030, we not only met, but exceeded our 2025 target, planting more than 240,000 trees across Mexico. On the social front, as every year, we participated in Mexico Financial Education Week, providing workshops and conference to more than 6,000 women and young professionals. As part of our work, our responsibility to help our clients make the best use of the products and services that we provide. Finally, before I pass the word to Rafa, I would like to address some concerns about our competitive landscape. We know we operate in an environment with intense competition for clients, for talent, and investor capital.
This drives us to constantly review our processes, our technology, and value propositions, so that we remain the top choice for our customers, the best developer of talent for our people, and the most attractive investment for our shareholders. As I mentioned before, looking ahead to 2026, we will keep expanding our digital capabilities and delivering, delivering hyper-personalized solutions, while maintaining solid fundamentals, disciplined risk management, and a strong profitability and growth metrics. With these priorities, we are confident Banorte is well-prepared to capture opportunities and navigate challenges in an evolving market, competing effectively with both incumbents and digital players alike. Now, I pass the word to Rafa to cover the main financial results, as well to discuss our guidance for the year. Rafa, please go ahead.
Thank you, Marco. Thank you all for attending the conference. The first part that we would like to look at is how the NII really moved into the year. But you can see on the table, basically, if we look, we saw a very strong growth in NII, basically on the loan and deposits. We will explain why the funding cost is trending down on a strong growth in the consumer side that allow us to get a better yield on the portfolio. There was also something that needs to be relevant for the comparison about the possibilities and the potential of the bank.
When you look at the FX, it affected us by MXN 2.1 billion. That is really something to consider, because we never put that on the budget, and it's really a deduction of the... It affects several lines that we will see on the next pages, but I think it was a really unexpected hit, MXN 2.1 billion, and we end up delivering the results. On the annuities, you see a very slight effect by the USD, so nothing really relevant.
The NII for the total NII for the quarter was 8%, and for the year was 6%. But it's relevant to notice what I mentioned before, but how the loans and deposits are really moving forward at a 14% year-on-year basis. The non-interest income for the quarter was well on the low side, but for the year was 85% year-on-year. Premium income grew 24%, and there was I will discuss in a bit the effect that we have on what happened on the claims and on the insurance company.
Claims were up 8% on a year-over-year basis, but the insurance company, we will see in a moment, had a very, very strong year. Moving then to the net interest margin, we continue to deliver a very resilient NIM for the bank. It moved to 6.8 for the year. And basically, you see a 13 basis points growth on the year-over-year basis. So net fees also was a very good story. Net fees grew 22% year-over-year, and...
Basically, we continue to see a very, very strong activity on every single one of the channels that we serve, the clients. If we move then to the sensitivity, you will see a slight pickup on the sensitivity to MXN 418 million, that if you look at the local sensitivity on the NII, it's really less than 0.2 and 0.3 on the dollar and on the peso book. And the effect that happened in December was that the government book finally pick up in December. As you know, you have a very rapid growth on the lending side.
But at the same time, the funding side really grew on a very, very fast pace also. So even if you see a movement on sensitivity, you will also see a pickup on the margin because that assets were funded with a very low funding cost. Okay? So the balance sheet on the foreign currency, basically, we try to be stable on that. As you know, on the foreign currency, we don't have a fixed rate assets like we have on the peso book, and we continue to build up the peso book, obviously to continue our strategy and adapting to the trending on the rates.
If we go to the profitability of the bank, we basically see that net income at a very, very good growth in net income for the bank, 16%, year on year. We have a very strong, very, very strong fourth quarter because the momentum and the dynamics of the lending funding as fees continue to be very, very aggressive, much better than previous years. The bank return on equity ended up around 31.8, and I will show you in a minute what was the effect on December. The ROA continues to be a solid 2.7% on the ROA.
If we move, I would like to move into a graph that shows exactly how we are managing the asset side of the book and the liability side of the book. The graphs that you see on the top side, it shows exactly what is the rate that we are charging on the asset side. That's the overall rate for the asset side. Then the next graph is a slight blue color line that really shows how it has been the decrease in the official rate for the asset side.
Then you see, at the bottom of the page, a red line that really shows the funding cost, and you see a very continuous decrease in the pace of growth of the funding cost, ended up at 3.38. And the most important graph is the one that is the darker one, that really shows that we have been continued to be able to manage the return on the book at an 8.3%. So what you would, you... That means that the spread of the book continue to hold pretty steady, even though the decrease in the rates. That is what is really sustaining the margin in a very steady place.
On the next slide, you see our continuous effort to continue to go to the levels that we would like to have the funding cost. The funding cost ended up at 44.1% at the end of the year. Basically, because as you saw, the non-interest bearing deposits grew 12%. So we continue to grow our non-interest bearing deposits. The mix has evolved to 70-30. So we continue to be quite attractive to be a bank that basically supports most of the operations in the retail, in the SME, and in transactional banking piece and in the government side. So that allow us to have, along with the payables, a continuous source of cheap funding that we continue to grow.
Basically, if we move next to the cost of risk, you will see that the cost of risk is trending now to a much more normal levels that we used to have, based upon the effect that we have on the third quarter. You continue to see also on the graph, the write-off that continued to be very disciplined and very, very steady. Credit provisions now are down again to the level that we like to have and that we expected to have on the budget. And I would like to really guide you to something that is gonna confuse you guys in a bit.
Based upon the integration of Tarjetas del Futuro, and also, as you know, Tarjeta del Futuro was not part of the overall processes and procedures that we have at the bank. Even we try to advance the most that we can, but that was obviously not the same technologies and processes and that, and a very good example of that was exactly how the provision inside on the TDF was being built out.
So when we integrate TDF, obviously, and we put all the processes and procedures that we have at the bank, there was a release of provisions on TDF on that. That now seems when you integrate all the numbers at the bank, that was a huge drop in the cost of risk. I would like to ask also Gerardo on that, but to be very clear, the cost of risk that after you do all the numbers and things, it's really much more close to 1.92, that I think is the number that we feel comfortable after all the integration procedures, methodologies, and that. And I would like Gerardo to please continue to explain on this.
Gladly, Rafa. I am Gerardo Salazar, Chief Risk and Credit Officer of Banorte. Regarding this issue, I will tell you that, although Tarjetas del Futuro adopted a regulatory style framework as a conservative market benchmark, given Tarjetas del Futuro monoline business model, limited customer interaction beyond credit, and elevated observed analyzed net credit losses were approximately 28%. Tarjetas del Futuro management apply a significant management overlay, resulting in an allowance of roughly 30% of the outstanding portfolio to ensure adequate short-term loss absorption. Following the integration of the loan portfolio of Banorte's group, the portfolio was recognized and subsequently managed under the bank's IFRS 9 compliant expected credit losses framework, consistent with the methodology applied across the bank's retail credit portfolios.
This resulted in a removal of TDF's conservative overlays and the recalibration of loss given default assumptions based on Banorte's historical performance, recovery experiences, and servicing capabilities. To be more specific, when you take into consideration Banorte managing this portfolio, Banorte has better collections infrastructure, more effective early warning systems, stronger legal recovery processes, and broader restructuring tools. That is, the probability of default of this portfolio remains the same, that has not changed, but loss given default declines, and that justifies a lower provisioning for in this case.
Thank you, Gerardo. Now we move to another line that was affected because of the integration, that is the expense growth. As you remember, we committed at the beginning of the year to have a single digit growth on the expense line, and we achieved that, but it needs some explanation because of also the integration of TDF and Bineo. Basically, what you see on the graph is that let's concentrate on the overall numbers, that is the non-interest expenses. That is MXN 52.2 billion in 2024, that moves to MXN 57.7 billion in 2025.
That's an 11% growth, and the result for that 11% growth is that based upon the accounting rules, you have to erase from the base the Bineo and the TDF expense line. So it seems that expenses grow in a more important way than in reality, when you put those expenses back again on the base, really, the expense growth was only 9%. That is in line, but we committed to the market. So that 9% is the one that we... That is the real number once you put again on the base, the numbers that are basically the same ones that were in 2020, 2024. So also we achieve on that, and you saw that in a much more explanation on the graph.
But when you go to the graph, that is basically the efficiency ratio that shows what we call the jaws of... It continues to expand at a very good pace. Revenue continues to grow nicely, expenses are much more under control, and that will continue to be the case for Bineo and for TDF. Let me be very clear on one thing. On the Bineo side, we currently have an expectation to have around MXN 1 billion of expenses for the year in the case that the sale doesn't get completed in the full year. If the sale gets completed before the full year, then you have a reduction of that MXN 1 billion that we see on expense line on that part.
And on TDF also, you will see that also our expectation is to reduce the expenses around MXN 500 million, close to MXN 800, 900, that were in the past. So additional efficiencies will come in from those two, but we have to go from the timing of the authorities on the Bineo side, and taking very good care of, of TDF, of Tarjetas del Futuro-... to be able to really keep the clients that we have been building the, in the company that are close to 600,000 clients. Sixty percent of those clients are profitable clients that have the capability to be cross-sell once we integrate everything in Banorte. That is, that was gonna be, that was gonna be the case.
So TDF will continue to be a very important provider of clients of a segment that was not in the past an affiliate of Banorte. So once we clear the expense line, I would like to go now to capital and liquidity. There was also some comments about what is the liquidity ratio? The liquidity ratio continues to be hold and efficient. We were at a point in time when the things were not very clear. We have an additional surplus on liquidity. We feel very comfortable with 162 liquidity ratio.
When you go to the capital ratio, it's the first time that you see the 12.6 on the core tier, on the core tier one. But if you look at the holding company, the holding company is still basically managing MXN 10 billion more. That is part of this capital that has not been assigned to the bank. So you will continue to see that based upon the momentum of the bank and the subsidiaries are very good growth on the capital base to be again at the 13% in the first quarter. The TLAC that have now been fully adjusted is 18.34.
We are at 20.1, so we feel, we feel very, very, very comfortable with that, with this based upon the, the momentum of generating capital that we have at the institution. And another thing to, to be relevant, about this is also that our AT1s have been obviously been affected by the, by the effects that we, that, that we have and, and we pass. Now, let's see, what was the, the, the effect of, of the commitment for 2025? The loan growth ended at 8% in inside the guide, ex government, 9%, net interest margin for the group, 6.3. Net interest margin for the bank, 6.6.
Expense growth, as I mentioned to you before, is 9.4, take into account and putting again the basis to be comparable about the effort that we have on the expense line. The efficiency, 35.8. Efficiency is a number that we need, and we would like to continue to lower down. There will be years that we need to invest more in order to keep the pace with our competitors on this. And this year, it seems to be the case, but we will do a lot of efforts to really grow the revenue base in order to reduce the efficiency ratio.
Cost of risk in line, as I mentioned you, we, Gerardo explained it, we are not fooling around that, about the deconsolidation and consolidation and the effect that we have on the extraordinary situation that we have with TDF. The real cost of risk that we have is around 1.8, 1. And it ranges from 1.8 to 1, 1.84. That's the case. Remember that, Tarjeta del Futuro really became again installed at the bank in December 2026, and before that was eliminated line by line on the book.
When you go into the page of the financial results on page six, you will see that our discontinued operations have the full effect of that. That is around MXN 2.1 billion. So there's no effect of all these numbers in the net income. I would like to make that very, very clear. All these movements that have, because of accounting rules, have no effect on the net income of the bank. You will see that on the deconsolidation operations in the financial brochure that we have in page six. Okay? The net income, the tax rate, it was at 27%. Net income was in line 58.8, and I would like to, to...
Because I don't want to be, let's say, jumping around about this number, but 50.8 is including the effect of BNA, the effect of TDF, the effect of FX and all that at the same time. So really, the performance of the bank was, and the group was really very strong. Return on equity for the group, 22.8. So that's the number that we would like to have around the 23 on a recurrent basis. Return on equity of the bank is at 29.1. And just an effect that have, and we don't like to play this game, but based upon the payment of dividends that we have, that we have in December, and the very strong...
month that we have in December, the return on equity for the bank at the month of December was 37% return on equity. Okay? So return on assets is 2.3, right in the middle of the guidance. Now, I would like to move, if Marcos is okay, I move to the-
Yeah, just the guidance.
The guidance? The guidance for 2026 is, as you can see on the-
Offering us
... on the loan growth 8-11, and without the government book, 10-12.
Thank you.
Net interest margin for the group, 6.2%-6.5%. Net interest margin of the bank, 6.4%-6.8%. Let me explain why there's this range on the bank. If we grow the government book, and it's expected because it seems that it's now a lot of movement concerning infrastructure and things like that. If that happens, you will see a very accelerated pace of growth on the loan book. But since that, those loans are very thin on the margin, you will see maybe, or to trend more to the middle of the mean of the bank, that is around 6.5%.
If that is not the case, the number will be very close to the 6%. Expenses, and I would like to be clear here on the expense line. And the first time, we are also trying to put a number in pesos in order to try to avoid all the deconsolidation and consolidation, for you to be able to really follow the expense growth. The expense growth, as you see on the recurring, from 5% to 6%, and in addition, organic growth and investment. Because obviously we are investing a lot in. We have been investing like for many years in artificial intelligence, but now that part has accelerated a lot, and we have to reinforce the teams on that part.
We don't need to buy more technology, but we have to use more the technology that we have, and that's required to really aggregate more people on the artificial intelligence. On the non-income tax rate, 27%-29%. Net income is MXN 62 billion-MXN 64 billion. Taking into consideration other things that is included here. As you know, there's a lack of the profitability in part of the loan book that is affected around MXN 1.2 billion for the year, so that is already included on that part. So the return on equity for the group, 22%-24%. Return on equity for the bank, 28%-30%, 30%. Return on assets, 2.2%-2.4%.
As you can see, there's a slight pickup on the cost of risk to 1.8%-2.1%. Not because the wrong reason, because of the right reasons, because of the rapid pace of growth on the consumer group that really requires much more provisioning at the beginning of the cycle. So we are, based upon our economist, our chief economist, GDP of 1.4%-1.8%. Inflation rate, 4.2%-4.6%, and Mexico reference rate, 6.5% for the year.
I will also add that we expect the FX to move much more close to the 18, 18 pesos per dollar at the end of the year, but we think that there will be more strengthening of the peso in the coming months. So that will also not have the full effect that we had last year, the MXN 2.1 billion, but still will be something that we have to manage. And let me also tell you about the effect that we have on the FX that was not mentioned before. If you take, because of the 4.4-14.5 that we have on the dollar book, the dollar book was affected by the FX when you convert to pesos.
If that was not the case, the commercial and the corporate group was really growing around MXN 20 billion more. That was the effect of the FX. So with that, I end my comments, and I pass the word to Marcos.
Thank you. Do you have any comments?
Yeah, no, thank you. Now we will go to our Q&A session. As always, we kindly ask you to present only your most relevant question, and we will be happy to take any other questions anytime after the call. Questions will be ordered on a first come, first serve basis. Please raise your hand on the platform, and we will unmute you when your turn comes. José Luis and myself will be calling the name of the person that is next in the line. If there are any technical difficulties, please let us know by using the chat. Thank you. We're now ready to start the Q&A. We'll start with Jorge Kuri from Morgan Stanley. Jorge, please go ahead.
Hi, everyone. Congrats on the numbers, and thanks for the conference call. Quick question on the guidance. Would you mind double-clicking on the credit growth assumptions? What are the different expectations for the compositions of loans, consumers, mortgages, government, and commercial, et cetera? And how do you think that sensitivity of your guidance is relative to economic growth if USMCA is negotiated favorably early on in the year, and we get an economy that is closer to 2%? How do you see that translating into your loan growth expectations? Thank you.
Thank you, Jorge. In commercial, we're, the guidance is between 8 and 10. The corporate is also between 8 and 10. Government is from 0 to 4, consumer is from 10 to 14, mortgage is from 8 to 10, credit card is from 14 to 18, auto loans 15 to 20, and payroll 10 to 12. That's if you break down the numbers. And now I will pass to Alex, the economy.
Thank you. Thank you, Marcos. Thank you, thank you, Jorge. This is Alejandro Padilla, Chief Economist. Let me just walk you through our 1.8% GDP, or this range between 1.4%-1.8% of GDP for 2026. What we think is that this year, all the engines of the economy will try to level. Last year, we observed that consumption grew less than 1%, but this year we're expecting 2% growth. This is supported by the World Cup, as Marcos was mentioning. We think that, given tourism and also private consumption in Mexico, we can have additional 30-50 basis points there. Also, I think it's important to take into account that last year investment declined around 7%.
We are expecting a mild recovery, only 0.7% in our, in our model. This is supported by additional spending, especially in infrastructure. When you see the budget for, for 2026, the government will deploy 1.2 percentage points of GDP in key infrastructure projects. And in addition to that, nearly 25% of, of the budget is going to states and municipalities, so we think that, that should push a little bit this investment figure. And the, the other one is, is exports. Exports last year grew around 7%. It was a very positive year. Why? Because, when you see the average tariff rate that Mexico is paying is around 4.5%, the world is paying 16.8%.
So there is, in relative terms, a competitive advantage that Mexico will likely hold throughout 2026. As you were mentioning, Jorge, this is an important year given the review process of the USMCA. So far, regardless of how this process will take place, we think that Mexico will continue to be a key ally for the US in terms of trade. We observed it in 2025, and we think that it will continue in 2026. So that's the way we are analyzing GDP. That's a range between 1.4-1.8. And just let me close with one thing. The fourth quarter of 2025 closed with a better momentum than in the third quarter.
That will help inertial GDP for Mexico in 2026. We're calculating that this inertial GDP will at least give you 60 basis points. That 60 basis points is more than what the entire economy grew in 2025. So that's why we are more constructive in terms of GDP dynamics. And the other one is that we expect that the US will grow more this year than the previous year. We have 2.4% of growth supported by consumption in the US, but also by investment. And I think this is key, taking into account that in our studies, 56% of the Mexican economy is highly dependent on the US economy.
That's the way we are calculating this range between 1.4-1.8 that Rafael mentioned before.
Great. Thank you very much.
Okay. Thank you, Jorge.
Next question is from Renato Meloni, from Autonomous. Go ahead, Renato.
Hi, everyone. Congrats on the results, and thanks here for, for the questions. So I just wanted to pick up here on, your earlier comment, credit card growth and payroll growth. We saw some NPL increases, this quarter. I wonder if you can comment a little bit of the dynamics here, and if you expect asset quality to stabilize and enable this growth? And then, also related to this, your coverage ratio has been declining, and it's at the lowest level now since, 2019, at, 134%. So, I'm curious to know what, level you feel comfortable in operating. Thanks.
Renato, I will pass this to Gerardo Garza.
Thank you. Thank you, Marcos. I will tell you, Renato, that in payroll lending, the deterioration is attributable to the loss of payroll dispersion from a large client, resulting in a very temporary statistical effect.
... Notwithstanding this impact, underlying asset quality trends remain solid, as the remainder of the portfolio continues to exhibit pre-improved performance and declining risk metrics. In credit cards, the increase is partially explained by the consolidation of a higher risk portfolio, Tarjetas del Futuro, and additionally, in December, delinquency ratios was distorted by a denominator effect, as the strong origination growth reported in November during El Buen Fin was offset by a significant but expected repayment in December. We see this seasonality effect every year. Within Banorte credit card portfolios are behaving very well, and also the payroll loans have very, very good risk metrics. Regarding the coverage ratio, I will say that asset quality is generally improving.
Early-stage delinquencies are also declining, and vintage curves show better performance from recent originations. I will tell you that we have to take into consideration that although this reserve coverage ratio is declining, we have a very high degree of capital strength. We have a high CET1, total capital ratios, and a strong pre-provision operating profit in that regard. Even if reserves are lower, loss absorption capacity remains very robust. I will tell you, Renato, that you should worry when the reserve coverage ratio declines due to several factors that are not present in Banorte. Among them is NPLs rising, but reserves are flat or falling. It's not the case. I have to remark this.
Also, you should be worried if early delinquencies are accelerating. That's not the case in Banorte, and you should be very worried if growth is driven by looser underwriting. We're not doing that. We remain very, very strong with the underwriting standards up to this point.
If I just may add, Renato, on the credit part, don't be surprised if on the first quarter, you continue to see a slight, a slight pickup on credit card. Very, very slight, and then churning down in a very, very positive way in the second quarter. Because as Gerardo explained, you have a very strong prepayment part. You have a pretty... You continue to grow the book in a very fast pace. We placed close to 890,000 cards last year. Maybe we'll, this year, we will, we can reach the 1 million cards, but with a very, very strong placement. Non-first payment defaults are not present from the group.
All the facilities are being served and followed in a very close way. So as Gerardo mentioned, I don't think this is a matter of concern. It's a matter of seasonality that will flow into the first quarter, but trending in a very important way into the second quarter.
That's very clear. Thanks for the answers.
Thank you very much.
Thank you. Now we'll continue with Brian Flores from Citi. Brian, please go ahead.
Hi, Rafa, Marcos, Tomás, and team. Wanted to see how sustainable is the savings on the funding side. Rafa, as we know, Nub ank, and also now I think now other fintechs like Revolut are joining the system. So we're very curious as to where can or how low can these funding costs go? We have been very impressed positively on the results from Banorte. I think your cost, as you were mentioning in the presentation, is now at 44.1. How sustainable is this with, you know, obviously these pressures that could come from newcomers? And if I may, just a very quick follow-up, a quick question to Alejandro on Banxico, because I was checking Banxico's survey.
I think at the medium point, he's expecting 1.2 in terms of GDP growth. So just checking if maybe he thinks that there is some enthusiasm from the World Cup that is missing on consensus numbers. Thank you.
For the second one?
Yeah, for sure. Thank you, Brian. I think that we might start observing some adjustments in the market consensus regarding GDP, especially given the figure that will be released this Friday, that is the 2025 preliminary GDP, because then I think that the market can recalibrate inertial GDP. But yes, I think that consensus is not taking into account some of the figures that could be important in terms of the World Cup. Just to put some examples, there are some expectations from FIFA about how many tourists can come to Mexico, and how much money can they spend.
When you see the figures of tourism in Mexico, I think that even those assumptions are very conservative. I think that we can have a positive effect in terms of tourism, but not... It is not only tourism. Let's take into account that private consumption, especially consumption from Mexicans during World Cup-... is steered by purchases of screens, obviously services, restaurants, bars, and all of the things that usually when there is a World Cup, it increases. So that's how we are-- we think that GDP can be benefited by this 30-50 basis points.
To Rafael, first of all.
Brian, I think your question is a key one about how the dynamics in the market are moving. I think if you look at the numbers that are present on public numbers from most of the fintechs, what you see is a huge capability of gathering funding at a very high cost, and then a limited part of deploying those funds into the asset side. Like, that create a very deep imbalance on the process.
I would like to say, when you say how you have been able to really lower the funding costs and grow non-interest bearing deposits above 12%, I think the fact is that Banorte really competes on the value proposition per client. We don't compete by product. I think that if... There's two ways to compete in the market, one is playing the liability side, bringing up a lot of liabilities into the bank, and then you have two costs: the liquidity cost, and the cost that you have to really finance that overpayment that you have, if you don't have the assets to deploy that.
And when you, when you look at the asset side, you can play the game to have a very high, high cost on the asset side for the clients, and then you have another imbalance because you are basically a factory of generating non-performing loans and sending people to the credit bureau. I think that the way that Banorte competes in the market, and you look, you see that in the activity at the branches and on the digital spaces, that we have a very strong, strong digital foundation, a very, very, very strong digital analytic foundation. And the hyper-personalization that we have at the bank takes into account the value per client, the present value of the client, the potential value for client, and also what is the, the, the business that this client has with other banks.
And then we offer them I would really a very comprehensive offer, but take into account all those things. So when you monetize all the offer that Banorte has, it's a much more, much more powerful offer to the client. So the value added that we put in the hands of the client is not just a very high liability price, but a very good, full relationship that allows them to have a very balanced asset cost side and a very reasonable funding price on the funding side. And also, you will see in the coming months, more and more Banorte moving into a much more hyper-personalization processes, and being enabled also to attract young players into the market in a very reasonable way, not to try to overshoot the funding side, and not...
Have a very reasonable and practical approach to really develop the clients that you have. That has been the approach that we have on the non-interest bearing deposits, is playing right. The service that the branches provide, the capabilities that we have on the digital, and the surprises that the client receives when they see the hyper-personalization that they receive, is really what is allowing us to have a very good relationship with the client. When they monetize the relationship with Banorte, it's a much more profitable relationship that they can have with the fintechs. That's the reason.
Thank you, Rafael.
Thank you, Rafael.
Thank you, Brian.
Now, the next question is from Pablo Ordóñez, from GBM. Pablo, go ahead.
Yes. Hi, good morning, Marcos and Rafael. Congratulations on your strong results. My question is on the fee side and on the regulatory outlook. More than looking beyond the interchange fees, what should we expect in terms of digitalization and any boost to Bineo and DiMo? Should we expect any radical changes here? Any color that you can give us from the meeting yesterday with the government. And with this, how should we, what should we expect in terms of the fee performance, after a very strong year in 2025? Thank you.
Yeah. Let's start with the meeting yesterday with the President. We participated in a meeting, as you know, with the President and the Mexican banking sector. The discussion was constructive and reflected the administration's openness to engage with the private sector. We welcome the government's collaborative approach to fostering conditions for a stronger growth and sustainable investment, as well as its forward-looking agenda to enhance Mexico's competitiveness and productivity. At Banorte, we value these dialogues, and it's an important step towards aligning efforts in support of Mexico's long-term development. That's what happened yesterday. It was a good reunion. Now, Rafa, the check.
Yeah, I would say that the fees, the fee side has always been a very attractive point for the regulators to see. But if you look at the evolution of Mexico, and you compare the interchange fees on the debit side and on the credit side, Mexico is quite competitive on that, so we don't have a, I think the Mexican Banking Association has a constant dialogue with the authorities in order to put all the numbers in clear, in order to. Because it, this is gonna sound a little strange, but this kind of price controls obviously they benefit the larger banks, and they really affect the smaller banks.
So that's something that I don't think is right for the market. I think the market has been behaving pretty good. And on the digital evolution on everything, I think the banks are fully prepared to really deploy the digital capabilities that the bank has, even if using CoDi or DiMo on all the infrastructure that the banks has. I think what Marcos mentioned about also with the meeting yesterday is that it seems that now the digital approach to the Mexican economy is a real one, and I think the banks will be key players on deploying that part. So I'm not worried about the fees evolution.
I think there will be a reasonable part trying to protect basically the mid and the small banks, not the large banks.
Thank you.
Thank you. Thank you, Rafa. And a quick follow-up on this, what growth rates in terms of the guidance should we expect for the few months?
Excuse me, again? Again, we, we couldn't hear, but what growth?
What growth rates should we expect for the fee income in-
Well, 20%-20% for the last year was really a very strong one. I think fees will be above the loan growth. I think four or five percentage points above loan growth. That's what we expect to see, because we continue to see a lot of transactionality flowing into the bank. The transactional banking on the corporate, commercial, and the government, and in the retail side continue to be quite active. Just to give you a number that shows you the... I think the new opening up. Let me just go into the difficult part, the branches.
We are now opening 5 to 6 to 7 new accounts per branch per day, when we used to have around 3. So that momentum continues to be... And the number in digital, you can multiply that number by 5 or by 6, but still, the balances that come from through the branches are much higher than the ones that come from digital.
Thank you, Rafa.
Thank you very much.
Thank you.
Now we'll continue with Carlos Gómez-López from HSBC. Carlos, please go ahead.
Hello, good morning, and thank you very much for the call, and congratulations on the results. I want to ask about the fintech strategy. Now you are integrating Tarjetas del Futuro and Bineo. So what are going to be the . . . How are you going to compete with the new fintechs? Are you going to have any new initiatives? Are you going to launch something which is different, which is a different brand, or you think that Banorte.com is where you want to be? Now, also, accounting-wise, you had a charge in the quarter, I think MXN 6.3 billion directly to equity from the integration of Tarjetas del Futuro. Is it done? Is there anything else that we need to expect from Bineo and from Tarjetas del Futuro? And did you complete the sale of the license to Klar? Thank you.
Carlos, for the last one, no, that's all. There's nothing more coming. But what you have to see, and you can look at that number in the discontinuing operations, there will be a flow in the reduction of the expenses and basically on the timing on the selling of the Bineo, of the Bineo brand. But no, no, no additional costs will come to that. On digital, I would like to be very, very, very careful with this, because Banorte never stays put, and as you say, Tarjetas del Futuro will be a key element to continue to provide a flow of clients into Banorte, but now we can cross-sell them.
So that would be a plus for the clients and for Banorte, that they were a mono product in the past, and it was difficult really to make profit, a reasonable profit from those relationships. I think we can offer a very good set of products to those clients that could bring additional benefit for them and a reasonable profit for us. So that will be the movement on Tarjetas del Futuro. It is gonna be fully integrated into Banorte, so all the scale of Banorte will be playing into Tarjetas del Futuro, but they will still have the individual attractiveness for that part of the market, that will continue to be a permanent flow to bring into Banorte new clients.
And also, more and more our clients seem to demand, based upon the experience of Tarjetas del Futuro, that we have a much more, let's say, amicable approach to digital with the young generations and from universities and that. And I think what we learn about Tarjetas del Futuro, and there will be a very good evolution of Banorte into that part of the business. And you will see that in a very short term. So we feel very confident in digital.
I think, Banorte is prime in digital and you will see that expanded approach to try to integrate more and more clients into our digital offerings into the market.
Would that strategy include any high yielding account? We see that Revolut is offering 15%. Are you planning to compete with those offers or that's not part of your strategy?
We will manage a new way, a creative one, not in that way. I think, Carlos, if I go with you and I say, "Okay, I'm gonna give you 15% here. Oh, by the way, what's gonna, what are you gonna charge me on the, on the credit card?" Then you do the math, and maybe that's not a very good offer. And I respect Revolut a lot, and I think it creates a lot of good dynamics into the market, that this, that companies come into the market and bring more clients into the banking system.
What my main worry is to really take care of those clients, and not over relating to those clients and really evolve with them, all the financial I would say is needed for those guys to be proficient in the way they manage their finance. I think Banorte will surprise the market pretty soon in a very reasonable offer to compete, not in a way about price. I don't think that has been very always a very reasonable one, but sometimes you have to attract the attention of the market because of the price and things, because you don't have anything else. No?
Mm-hmm.
You just have an idea. But Banorte, I think, have a very, very, very present and reasonable offering to the markets that will evolve in a very intelligent way to really compete with this client, with this FinTechs in the very short future.
Thank you so much.
We'll take the next question from Yuri Fernandes from J.P. Morgan. Go ahead, Yuri.
Hi, hi, Marcos, Rafa, Gerardo, Tomas, everyone connected. I have a question regarding the majority equity evolution of Banorte. When we go to the majority equity this year, it was mostly flat year-over-year, around MXN 249 billion, despite the net income of... I get you have some dividends, the 81s. But what caught my attention here was a MXN 6 billion hit this quarter from Tarjetas del Futuro, like the acquisitions you had. So my question is, what explained this hit on Tarjetas del Futuro? If you can provide a little bit more color on this. The explanations on P&L and provisions from Gerardo, they were very good, but this on the equity side was not clear for me. Thank you.
Rafa, please go ahead.
Yeah, Yuri, thank you for your question. And it seems that... Remember that when we started with Tarjetas del Futuro, we put down $50 million. That was basically for the price of a total price of $250 million dollars. When we tried to really put the capital down, that was around $200 million dollars, there was a restriction on the authorities, though, so we needed to build up what is called a convertible loan that eventually will be converted into shares. At that point in time, if you go into the premium on the equity side, you see that we have been building that part on the premium side.
So there was a convertible loan here, but there was a premium on the equity side. So when you see the reduction on the equity side, was basically when we do convert the. And we bought the company, and we convert the convertible loan into really permanent investment into shares. That was basically when we pulled out of that part of the capital based on the premium, and then we built capital into the company. On the other hand, yeah, the company has a loan that was basically guaranteed by a trust that owns the book of the company. Okay?
So the movements that happened in Tarjetas del Futuro was basically the conversion of the convertible loan into shares to put capital, because the company didn't have any capital at all. A commitment that we did when we bought the company, where we were unable to do because of the regulations. And then a guarantee loan that was on a trust, that was basically owning the loans of the company. So when we do all the integration of Banorte, we convert the loan into shares. So now the company has that capital that was always belonging to that company, so now it's on the capital part.
Also, now you will see in the coming months, we started on January 1st, that all the loans now will be part, as Gerardo mentioned, of the portfolio of the credit cards of Banorte, and the additional cross-sell that we can give to them. So basically what you see, Yuri, and thank you for bringing that out, is that that convertible loan was basically converted into shares using the plan that we have, we will be saving at the equity side.
... Got it. So basically Rappi Latam capitalized Tarjetas del Futuro a few years ago. You convert the bond now, and this and this is just a one time, right, Rafa? We should not see this hit again.
We will not see anything else-
That's important
... touching the capital base, because of Tarjeta del Futuro. It will have a running rate like any product that we have. The provisions and everything, but basically on the running rate of the business, no additional capital, no additional anything. I think last year, believe me, was a lot of moving parts on this part. Finally, we are out of that. The only pending part is when Bineo is gonna be sold. If Bineo is sold in the—as soon as that is being sold, the less we need to continue to spend on the expense side, but no more on the equity side. Anything on the equity side.
No, super clear, Rafa, and it was a mess here for us also to read it. If I may, just a easy one and a quick one here, just on margins. I think the guidance implies in flattish margins for you, like 6.3, 6.35.
Yeah.
Guidance for long growth is for consumer to grow way faster. Just trying to understand if there is any chance that maybe margins can go higher, like maybe to the high end of the guidance, given your low mix, and the good funding cost. Thank you.
No, yeah, I agree with you. We are really penalizing the margin, taking into account what Marcos mentioned, that if we see an important acceleration on the government group, because infrastructure and things, those loans basically are not very rich in margins, but are very rich in fees and other things. So we are trying to cover the low end, but if you ask me, I think we will be more in the mid to the high end of the margin side, because we continue to have very good funding costs, very reasonable fixed rate part loans that really sustain the margin in a continuous basis.
Oh, super clear. Thank you, Rafa. Thank you, Marcos.
Thank you, Yuri.
Thank you. Now we'll continue with Ernesto Gabilondo from Bank of America. Ernesto, please go ahead.
Thank you. Hi, good morning, Marcos, Rafa, Tomás, Gerardo, Alejandro, all of connected. Congrats on your results. I have a follow-up on your guidance. So should we expect seasonality in the guidance? Should we expect growth to accelerate in the second half, or should we expect consistent growth, throughout the year? And also on your ROE guidance, how much dividend payout ratio are you assuming for this year? And also, considering your new guidance, should we expect this guidance to reflect Banorte's sustainable ROE for the group in the long term? And then I just have a very quick question also related to the fintech competition.
We have asked several young people in Mexico if they are served by a financial institution, and we were surprised that most of them have a Nu Bank account, but they don't have a BBVA or a Banorte account. We were surprised about this because the next generation are using financial services without going to branches. So just wanted to hear your thoughts on how is Banorte positioning to be on the mind of the next generations, and also, how do you expect to monetize those younger generations, which tend to be totaleros? Thank you.
Oh, okay, the first one. Yes, in the guidance is not a line that goes open up. It will accelerate at the end of the year. Everything is... As you know, we are talking about the agreement with the U.S. and everything will accelerate as soon as we sign that agreement. So that's our, we think that that's gonna happen, you know, at the end of the year. The second, the ROE that the dividend that we are giving is as always, 50% dividend, and then we'll see if there is an extraordinary, but these numbers, we are guiding to the 50% dividend.
The guidance to reflect Banorte sustainable ROE for the group in the long term should be, as we say, always 20s, 20s, 20s, and the idea is to continue with the 20 that we are—everybody's talking about and use, but it's a good number, no? And the last one, we are working very hard, and you are right, so we need to do something with these young clients, and we are working, and I don't know if the next quarter or maybe the other one, but we will issue something, and we will see with you.
I don't know if you are going to say something about it, Rafa, but you will be, I hope, surprised. That's the word that we can use, that internally we will do something, talking about exactly what you say, you know, the young people that they don't use branches, and Banorte should be in the mind of this young generation. So, let's keep in touch.
Just remember, Banorte is very, very, very clear, and we respect very much the fintechs that we have in Mexico, like Nu Bank, like Klar, like Stori, like Ualá, because they have really brought to the table something that we were kind of in a comfortable way, because we were growing nicely, the digital evolution and basically attracting clients that were profitable for us, profitable for them on that. But I think, when you look at the offer of Nu Bank, I'm not talking about the products, but I'm talking about the experience. I think we can really do a lot more about the experience to attract the clients that we have.
What we are really working, as Marcos says, is the capability of Banorte in analytics and artificial intelligence to really flow the needs of the client and the emotions of the clients, not just the needs, but the emotions of the clients are gonna be very very soon present into the market. You will see, you will see that, but thank you for the reflection about this, because we have been working in a very very important way, and we are really really, I would say, happy about what we can really deliver into the market.
Now, thank you very much, Marcos and Rafa. Very helpful, and congrats again on your results.
Thank you.
Thank you.
The next question is from Tito Labarta, from Goldman Sachs. Go ahead, Tito.
Hi, good morning. Thank you all for taking my question, and congrats on the strong results. I guess another follow-up just on the competitive environment, particularly on payroll, right? Because I think, one of the things all these fintechs are getting banking licenses for is to try to compete on payroll and get some principality. I mean, yeah, and you, you mentioned there were some losses there on some payrolls. So just how do you think about potential competition for that? Can the fintechs really, you know, compete for payroll once they get the banking license? And, and is that a risk, at all to sort of keep in mind? And also, along those lines, another sort of incumbent with Banamex, you know, getting spun off Citi, potentially becoming more competitive.
Just any risks that you see from there as well. Thank you.
Well, as I stated, I don't know, the environment is very competitive, so we're expecting that, and that's why we need to move faster than the others. But you are right, they are here, and they we are 52 banks now and competing, and we need to do something spectacular, and that's what we are working on.
I would say, just to add to what Marcos mentioned, is that the competitiveness on the payroll, I mean, the payroll that we lost was not for young people, was really for civil servants. But what you... I challenge you all to see the value proposition that Banorte has on the table. I think we have the strongest value proposition in payroll. It provides credit cards, it provides credit cards with a very, very reasonable rate. It provides insurance, it provides savings, it provides everything that you need to link to your payroll, with a lot of benefits linked because of the relationship that we build on the payroll.
So I, I really, I really do challenge to see the offer that we have on the payroll side, that I think is the most comprehensive offering to the market and the most attractive on the price-wise, and, and functionality for the clients. So payroll is gonna be a battlefield, it's already a battlefield, but now the battlefield is gonna move into the new entrants into the banking system, and that's where we think we can play a very, very key role.
Yeah. If I might add, Rafa, I will say that up to now, with a tremendous respect with these players, fintechs are winning transactions, and banks like Banorte are winning because we're building ecosystems for the employer and for the employees, and that's a very different competition. Just try to keep that in mind.
Great, very helpful. Thank you.
Thank you. Now we'll continue with Marcelo Mizrahi from Bradesco. Marcelo, please go ahead.
Marcelo?
Hello. Hello, hello, everyone.
Hi.
So thank you very much for the opportunity here. So my question is regarding the efficiency ratio going forward. So we are seeing this integration of Tarjetas del Futuro. So it's we want to understand and the, the, the mindset of you guys looking not just to this year, but to, to, in the long-term view. So what's the efficiency ratio that Banorte will, will target in the next years? Thank you.
We were discussing 34 or 35. It's gonna be 34.
Our goal is to reach again the 34 in the... Not for the next year, we will try to be-
Get there
... But I think we feel comfortable from 34 below and below. And I think with all that, what we are doing in digital and things, and the implementation of artificial intelligence, bank-wide, that will help us to deliver that.
But these levels that we will see in this year, that's an impact of the integration process, so-
Exactly right. Exactly right, Marcelo.
... Okay, so after that, so it's possible to see already in these years, the ratio starting to come down?
Exactly right. Exactly right. I think 2025, 2026 will be an in-between year, but a lot of, of the, of the base to, to continue to drop to 34 will be set up in, in 2026, because it will be the deploy of, of a, a bandwidth, artificial intelligence push, and also the integration of, of, of Bineo, the selling of Bineo, the integration of, of TDF. All that is, potential benefits, but it, it will take time to, to realize through the year. Maybe at the end of the year, we will be very close to the number that we were trying to, to reach.
Okay. Thank you. I have another question. Can I do another question? So you guys were talking about a better performance on corporate credit on the fourth quarter. So my question is regarding if you... Why do you So if you guys, so, so you have an explanation. So we saw a better environment and growth to corporate side on the corporate side already on the fourth quarter. So we were expecting that just in the second half of this year, but it's already start to be better.
I will ask René Pimentel to answer that question. Are you there, René?
Yes, thank you. Well, basically, during the fourth quarter, we closed a lot of the transactions that had been in the pipeline throughout the year. I think that this year, of course, we will continue to focus on our core sectors in which we have been focusing, which are growing faster than the economy. But also we will start looking at a new segments in which Banorte has not been a player before, and that we believe that we have the product and services to offer a good offering to our clients. So we believe that this growth will continue throughout the year, and we have a good pipeline for the second half of the year.
So we'll continue to see growth in the range that was already mentioned by Marcos, the 8%-10%.
Thank you, René.
Okay. Thank you very much. Thank you, guys.
The next question is from Daniele Miranda, from Santander. Go ahead, Daniele.
Morning, Marcos, Rafa, and everyone connected from the team. Just a very quick one from my side. You mentioned consumer lending will continue to be the main growth engine. Has it been driven or will it be driven by new customer acquisition, or by deeper penetration and higher loan balances among already existing clients? Just trying to assess here how much more risk you are taking while expanding consumer exposure, and how defensive you are in this segment.
Thank you, Daniele. It's gonna be both. We still want to grow in a professional way, and also, as we were talking about the hyper-personalization, we still have clients that they need more products from us. So you will see that we will go in both lines and grow, I hope. Thank you, Daniele.
Thank you.
Thank you. Now, we'll take our last question from Federico Galassi. Federico, please go ahead.
Hi, Marcos, Rafa, and IT team. 2 or 3 questions that if I may. The first one is, Rafa, you mentioned that you are thinking in 18 for the Mexican peso at the end of the year. Do you have any sensitivity if the currency continue to appreciate and finish, I don't know, at 17, something like that?
Rafa, please go ahead.
I would say the really hard effect was last year because of the drop on the peso rate. I think we have some sensitivity on that part, but I don't think we are not gonna play that game because it's a short-term basically strengthening of the peso. I think we are convinced, and Alejandro is also convinced of that, that by the end of the year, the peso will be in a much more reasonable price around 18 pesos per dollar. So no, we are currently not doing this because it's a very...
It will be like, follow the rabbit, but the rabbit will be up and down, so we will better fix on the end term of where the rabbit is gonna be, no? That is around MXN 18.
Okay, perfect. Fair, fair enough. The other question is related with the insurance business, in particular in auto cars, with the change in the regulation, with the VAT. Do you... What you are thinking to— Do you are thinking to increase premiums? How do you think toward this year to keep up to at least maintain the ROEs of the last years?
We were discussing this in the morning and yesterday, and we will absorb part of this increase, and also there's a little bit we pass to the client, no? The competition is huge. You know, it's not only the banks, also the insurance companies, but we think that it's gonna be split. Part is gonna come from for the banks and other for the clients, and we will see the result in the next months, no?
And Federico, remember that Banorte has evolved not for a single price for the clients. We do price the insurance based upon the, I would say, the quality of the risk of the client. So that will allow us to have, as Marcos mentioned, a much more flexibility instead of just have a fixed price. So if you are really a low-risk client, maybe we will absorb everything on that part. And if you are not a low-risk client, maybe you will get the full heat of the and the VIT.
Perfect. And the last one, I don't know if you mentioned before, but do you have any news or something to mention about the cap of fees on fees that was mentioned last year?
No, we don't have anything new there.
Okay, perfect. Thank you so much, and congrats again for the results.
Federico, gracias.
Thank you very much for your interest in Banorte. With this, we conclude our call. Thank you very much.