Banorte: Mixed quarter; Remain OW select AT1s on carry and contained downside

Research evidence excerpt

Banorte: Mixed quarter; Remain OW select AT1s on carry and contained downside

J P M O R G A N Latin America Credit Research

27 July 2026

Overweight

Banorte BANORT

Mixed quarter; Remain OW select AT1s on carry and Moody's:S&P: Baa2BBB Outlook:Outlook: STABLENEG

contained downside Fitch: BBB- Outlook: POSITIVE

The above agency ratings are at the corporate level

EM Latin America Corporate

Banorte reported mixed 2Q26 results, in our view. Resilient NII and solid fee-based Research

income were the standout positives. However, asset quality continued to AC Natalia Corfield

deteriorate and capitalization remains a source of disappointment, particularly

(1-212) 834-9150

given the ongoing erosion of the bank’s CET1 ratio. Notwithstanding these natalia.corfield@jpmorgan.com

concerns, we maintain our OW recommendations on Banorte’s AT1 curve – now J.P. Morgan Securities LLC

with a preference for longer-dated instruments – as a material deterioration in the

bank’s credit profile appears unlikely, and the AT1s, particularly at the longer end,

continue to offer an attractive carry proposition. See more details inside this report.

• Consumer lending remains Banorte’s loan growth engine. Banorte’s

performing loan portfolio expanded 1.6%qoq and 8.0%yoy to MXN 1.2 trillion

in 2Q26, landing at the lower end of the bank’s full-year loan growth guidance

of 8.0-11.0%. While this represents a modest acceleration relative to 1Q26,

growth remains subdued by recent historical standards, reflecting a

deceleration in corporate lending and, to a lesser extent, in mortgages. In

particular, corporate loans (+2.3%qoq; +6.7%yoy to MXN 466.9 billion) and

the mortgage portfolio (+1.2%qoq; +5.4%yoy to MXN 297.7 billion) both

expanded at a faster pace than in the prior quarter, though they bremain well