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CONTACTRenata González Muñoz
+52 (55) 5228 [email protected]
Eduardo Hanono Gómez+52 (55) 5340 5200 Ext. 2182
CORPORATEPRESENTATION
2Q20
Update on the COVID-19 situation
2
Product Strengths Actions Taken & DevelopmentsNPL ratio
Payroll
Centralizedcollection;Low % of Layoffs
+ Alternative loan offering (call center and digital media)
1.8%
SMEsMostly “longstanding relationships”
+ Customer liquidity assessments on a case-by-case basis
+ 100% origination through existing clients
0.4%
Used CarsOrientation tosuperior assetquality
+ Restrictive origination and selective credit approval policies
1.5%
SMEsCutting-edgeTechnologicalplatform
+ Government support programs and mentoring of clients
0.2%
Used Cars
Formal documentation required
+ Government support and program relief for clients
0.9%
InstacreditRevamped operation
+ Partnerships with different country-wide chains
1.3%
Action Plan
COVID-19 Performance Metrics
+ Safeguard the well-being of our employees and key operating metrics
+ Set in motion the BCP (“Business Continuity Plan”)
+ Prioritize asset quality over growth
+ Strong cash balance and liquidity position
+ Enhance capitalization: Limited share buy back & postpone dividend payments
Business Status In a Nutshell
Business Model of Solid Resilience
Best-in-classCapitalizationExperienced
Management withproven record
7.5
8.7 8.6
April May June
(%) Portfolio with ReliefPrograms
7,767.6
8,191.0
8,678.5
2Q19 1Q20 2Q20
Collection (MXN Mn)
56%
20%
3% 1%
11%
9%
Payroll SMEsUsed Cars MX OtherInstacredit CR USA
78%
9%
13%
$10.4$13.8
$17.6
$23.9
$29.0
$36.3
$47.0
$51.9
2013 2014 2015 2016 2017 2018 2019 2Q20
Overview of Crédito Real
3
27
32
4
Stateswithin US
States within Mexico
Countries in Central America
2.2% 2.7%2.1% 1.3%NPL: 2.4%
+ A leading specialty finance company in Mexico with a growing internationalpresence (United States and Central America).
+ Highly recognized by its product offering, designed specifically for ourcustomer base which is underserved by the traditional banking sector.
+ Over 26 years of experience in understanding the credit profile of customersand in developing and refining proprietary underwriting standards.
+ Listed on the Mexican Stock Exchange since 2012, being actively a public debtissuer in Mexico and in international bond-markets since 1995 and 2010,respectively.
(1) Percentage of Loan Portfolio as of 2Q20.(2) Equity / Operating loan portfolio(3) Annualized administrative expenses / (Financial margin + net commissions + 2Q20 other income from operations)
Mexico
United States
Costa Rica
Panama
Nicaragua
Market presence
Key Company Highlights Consistently Growing Operating Loan Portfolio
Selected Financials
1.9% 1.5%1.5%
MXN Mn 2017 2018 2019 YTD’19 YTD’20CAGR / Avg.
´17-´19
Income Statement
Interest Income $ 8,557 $10,288 $11,933 $5,690.0 $5,092.2 18.1%
Financial Margin $ 5,773 $ 7,080 $ 7,262 $3.524.9 $2,831.1 12.2%
Net income $ 1,661 $ 1,955 $ 1,980 $1,116.9 $436.8 9.2%
Balance Sheet
Assets $42,238 $49,562 $61,592 $54,015.4 $74,653.6 20.8%
Debt $23,585 $30,647 $45,528 $35,027.8 $53,028.8 38.9%
Equity $14,768 $15,809 $16,064 $15,936.3 $17,856.0 4.3%
Key Ratios
ROAA 4.5% 4.2% 3.6% 4.3% 1.3% 4.1%
ROAE 15.9% 12.9% 12.3% 14.0% 4.9% 13.7%
Capitalization 50.9% 43.5% 34.2% 38.8% 34.4%(2) 42.9%
Efficiency 50.2% 42.4% 43.9% 41.9% 55.4%(3) 45.5%
(1)
(1)
(1)
2019+ International Bond Issuance of 400 USD Mn due 2026,
with a 9.5% semi-anual coupon
+ Distribution of a cash dividend payment of MXN $0.70 per share to the shareholders; the highest dividend paid
in the history of the Company.
+ International Bond Issuance of 350 EUR Mn due 2027, with a 5.0% semi-anual coupon
Corporate History
4
2016+ Acquisition of 70% of
Instacredit+ International bond issuance
of 625 USD Mn due 2023, with a 7.25% semi-annual
coupon+ MSCI Mexico Small-Cap
Index, FTSE Small Cap and IMC30
+ Ranking #48 at the Mexican Stock Market (BMV)
Liquidity Index
2007
2013
2015
2012+ Successful IPO in the Mexican
Stock Exchange+ Introduction of SMEs and Used
car loans+ Acquires 49% of Crédito Maestro
(payroll loan distributor)
2014+ International bond issuance of 425 USD Mn due
2019, with a 7.5% semi-annual
coupon+ MSCI Mexico
Small Cap Index+ Acquisition of the
remaining 51% of Kondinero
2015+ First issuance in the local
market of 1,000 MXN Mn+ Acquisition of 65% of AFS
Acceptance+ Acquisition of 55.21% of
Resuelve
2017+ First issuance for 800 MXN Mn
under securitization program+ Award for excellence in Corporate Governance from
Mexican Stock Exchange.+ First issuance of Subordinated
Perpetual Notes of 230 USD Mn
2018+ Issuance of 170 CHF Mn
unsecured non-callablebonds due 2022.
+ Second Issuance for 615 MXN Mn under
securitization program
2010
+ International bond issuance of 210 USD Mn due
2015
2013+ New corporate
image development
+ “One of the best 100 financial companies”
distinction
2011
+ Acquires 49% of Kondinero and 49% of Credifiel (payroll
loan distributors)
Consolidated Loan Portfolio (MXN Mn)
2010
2019
20172007+ Introduction of Group
loans+ Partnership with
Nexxus Capital Private Equity
2020+ On February 21, 2020, Crédito Real
arranged a US$110 million syndicated credit line, with a 3-year
maturity.+ On April 27, 2020, the Company successfully established a Medium-
Term Note Program (“MTN Program”) for up to US$1.5 billion.
1,1633,159 3,736 6,733
13,80517,609
23,92729,015
36,319
46,958
51,943
2006 2008 2010 2012 2014 2015 2016 2017 2018 2019 2Q20
Key Investment Highlights
5
1 2
3
+ Healthy loan portfolio with best-in-classasset quality
+ Unique, Flexible and Scalable Businessmodel focused on Underserved Segments
+ Differentiated Distribution Platform toReach Clientele
SustainablePortfolio Growth
Focus onProfitability
QualifiedManagement and
CorporateGovernance
DiversifiedFunding Sources
+ Strong Balance with Funding Flexibility,Superior Financial Performance andQuality Growth
+ High Margin Growth that generates value
+ Strong Bottom Line Growth
4
+ Strong Corporate Governance andExperienced Management Team
+ 50% Proportion of Independent Directors
+ Committees oriented Strenghten andPromote Ethics and Efficiency in ourOperations
+ Harnessing the Local and InternationalMarkets
+ Healthy Capital Structure
+ Strong Liquidity Profile with Diversifiedand Untapped Funding Sources
Products
6
Products
Payroll
Payroll-deducted loans to public employees and pensioners
SMEs
Non-revolving lines to fund working capital and investment activities, as well as leasing
Used Cars MX
Loans for used cars through strategic alliances with car dealers and internal salesforce
Others
Integrated by Group Loans and Durable Goods
Instacredit
Consumer Loans, Auto Loans, SMEs Loans and Home Equity Loans in Central America
CR USA
Loans for used cars, and for SMEs through strategic partners
56%
20%
3%
9%
11%
1%
+ Profitable growth through our product diversification.
+ Sustained double-digit growth rates.
CAGR 31% over the last 8 years
Interest Income of Ps. 1,912Net Income of Ps. 416Equity of Ps. 1,460 Interest Income of Ps. 10,201
Net Income of Ps. 1,955Equity of Ps. 15,809
100%
Mexico
76%
15%9%
Mexico
CentralAmericaUS
Interest Income of Ps. 6,958Net Income of Ps. 1,714Equity of Ps. 9,277
Company’s Evolution
Interest Income of Ps. 11,933Net Income of Ps. 1,980Equity of Ps. 16,064
1
3,557
296 3,754
928 77
700 614
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
1,600,000
1,650,000
1,700,000
1,750,000
1,800,000
1,850,000
1,900,000
1,950,000
2,000,000
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Educational Workers Job Loss Events % of Job Loss Events
Educational Reform
Financial Crisis
Payroll
7
25%
Market Share
Low % of Job Loss Events
Average term
Average annual interest rate
Payment frequency
CustomersAverage loan amount
Non-performing loan ratio
Collection Trust
Loan disbursement
Agreements (+300)
Collection
Funding
DeductionCredit Applications (Salesforce +6,000)50% Interest Income
50% Risk Sharing
Government Agency
Source: Company estimates, based on AMDEN’s information and financial reports as of 4Q19.
15 distributors
Origination and collection process
42.0%
11.0%1.0% 36.0%
> 50%
OthersUntapped
Market
10.0%
Tapped Market < 45%
Product overview
Ps. 64,990
42 months
55%
+ Personal loans granted mainly to unionized state and federal public-sector employees, retirees and pensioners
Bi-weekly
446,155
1.8%
Source. National Survey of Occupation and Employment (ENOE), population aged 15 years and older
34%
31%
16%
4%
8%4%
2% 1%
56%
(40)
(20)
-
20
40
60
80
100
120
(4)
(2)
-
2
4
6
8
10
12
14
Ap
r-1
6
Jul-
16
Oct
-16
Jan
-17
Ap
r-1
7
Jul-
17
Oct
-17
Jan
-18
Ap
r-1
8
Jul-
18
Oct
-18
Jan
-19
Ap
r-1
9
Jul-
19
Oct
-19
SMEs All Firms Crédito Real SMEs Growth
SMEs
8
Product overview
36%
17%2%14%
9%
3%3%
4%6%
1%
6%Services
Financial Services
Health
Transportation
Commerce
Textile
Construction
Hotels and Restaurants
Food
Furniture and Equipment
Other Industries
+ Providing financing sources to small and medium businesses for working capital requirements and investment activities as well as leasing
Potential market
Average term
Average annual interest rate
Payment frequency
CustomersAverage loan amount
Non-performing loan ratio
Ps. 8.8 million
28 months
22%
Monthly
606
0.5%
Portfolio composition
Adressing segment opportunities
SMEs and All Firms lines represent Performing Commercial Banks Credit to Non-Financial Private Firms, while CREAL representthe SMEs loan portfolio growth
Source: BANXICO
Source: INEGI
Presencethroughout 22
states
67%
33%
2019
Enterprises in Mexico
SMEs
Others
8%
92%
2019
SMEs penetration with traditionalbank
SMEs withoutaccess
SMEs with access
PotentialMarket
Seizing banking inneficiencies
33%
25%
16%
27%
SMEs traditional CRA Credit loans
Factoring Leasing
20%
531614
795918
1,2531,401 1,382
0
50,000
100,000
150,000
300
800
1,300
1,800
2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20
Used Car Loan Portfolio Total Mexico Portfolio
50%
45%
5%
Bank-Financial Institutions Non-Bank Financial Institutions CREAL
Used Cars MX
9
Product overview
Ps. 116,803
43 months
36%
Monthly
11,835
1.5%
Auto market development
1.4%
0.5% 0.5%0.4%
0.7%
0.3% 0.3%
1.2%
1.0%
0.9% 1.0%
1.4% 1.5%1.6% 1.6% 1.7% 1.7% 1.6% 1.7% 1.7% 1.7% 1.8%
2.2% 2.2% 2.2%2.5%
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Used Cars Sector
Source: CNBV
+ Focused on financing semi-new and used cars through strategic alliances with a network of distributors that use their own sales force to promote our loans
Portfolio performance against the market
Attractive low-risk business
Source: AMDA December 2019
Source: CNBV
MX MnPresence throughout
Mexico
Average term
Average annual interest rate
Payment frequency
CustomersAverage loan amount
Non-performing loan ratio
6.8%8.8%
10.1%12.3%
13.8%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2016 2017 2018 2019 1Q20
New Semi-New
3%
(1)
(1) As of May, 2020
Instacredit
10
76%
16%
50%
25%
Ps. 36,399
41 months
56%
Product overview
Geographic concentration by product
Portfolio by product
+ Consumer loans, SMEs loans, auto loans and mortgage loans granted in Costa Rica, Nicaragua and Panama
Monthly
159,178
1.3%
Portfolio evolution
46 Branches
Products Personal Used Cars Small Business Home Equity
% Mix Portfolio 55.6% 29.6% 12.4% 2.4%
Customers 129,061 18,519 10,687 911
Avg. Loan Amount $21,059 $78,067 $56,930 $128,489
Avg. Term 39 months 48 months 43 months 56 months
Avg. Interest Rate 61% 49% 57% 52%
Average term
Average annual interest rate
Payment frequency
CustomersAverage loan amount
Non-performing loan ratio
13 Branches
6 Branches
57% 56%48%
56%
28% 29% 43% 30%
13% 15% 9% 12%
3% 2%
Costa Rica Nicaragua Panama Instacredit
Home Equity
SMEs
Used Cars
Personal
4,3914,613 4,463
4,918
5,794
2.4%
5.2%6.1%
4.8%
1.3%
8.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
0
1,0 00
2,0 00
3,0 00
4,0 00
5,0 00
6,0 00
7,0 00
2016 2017 2018 2019 2Q20Portfolio NPL NPL without Relief Program
11%
Headquarters
47.4% 46.4% 44.6%
52.6% 53.6% 55.4%
2017 2018 2019
New Used
Used Cars USA
11
25%
Ps. 266,801
67 Months
23%
Product overview
Used cars financing market gaining ground against new cars
Portfolio evolution
+ Financing of used cars through alliances with car dealers.
Monthly
12,531
0.9%
Average term
Average annual interest rate
Payment frequency
CustomersAverage loan amount
Non-performing loan ratio
Used Cars rising market
1,093
2,136
2,656
2.1%
1.3%0.9%
0%
1%
2%
3%
4%
0
500
1,0 00
1,5 00
2,0 00
2,5 00
3,0 00
2018 2019 2Q20
Portfolio NPL
Source: Experian, State of the Automotive Finance Market, 4Q19.
26 States
36.24
37.26
38.60
39.20
40.23
40.81
2014
2015
2016
2017
2018
2019
Source: Edmunds
In million
9%
SMEs USA
12
25%
Ps. 1.0 M
18 months
30%
Product overview
Hispanics in the US
Portfolio evolution
+ LOB (latin-owned-business) financing, and factoring to SMEs.
Monthly
2,575
0.2%
Headquarters
Strong revenue and employment growth
Source: U.S. Census Bureau's as of 2018 .
+ Biggest hispanic market outsideMexico with more than 60million people, whichrepresents a big opportunity tooffer our financial services inthe US.
938
1,946
2,521
0.0%0.3% 0.2%
0%
1%
2%
3%
4%
0
500
1,0 00
1,5 00
2,0 00
2,5 00
3,0 00
2018 2019 2Q20
Portfolio NPL
Average term
Average annual interest rate
Payment frequency
CustomersAverage loan amount
Non-performing loan ratio
9%
25%
23%
52%
25%
21%
54%
Decreased
No change
Increased
Revenune changed
Non-latino owned Latino-owned
14%
50%
36%
16%
50%
34%
Decreased
No change
Increased
Employment change
Non-latino owned Latino-owned
Market opportunity – Focused on Underserved Segments(1/2)
13
76%50%
Market segments(1) Percentage of total population Players CREAL(2)
A and B
(1) Market segments are defined based on monthly family income, in accordance with the categories established by AMAI: Segment E, fromPs.0.00 to Ps.2,699; Segment D, from Ps.2,700 to Ps.6,799; Segment C, from Ps.11,600 to Ps.34,999, Segment C+, from Ps.35,000 to Ps.84,999,Segment A and B, from Ps.85,000 or more.
(2) The market segments of Instacredit and Crédito Real USA are defined based on their average loan amount as of 2Q20.
Targ
et M
arke
t
83%
17%
D and E
C & C-
C+
A & B
6%
11%
27%
56%
2017 Total Population: 129.2 million
Market opportunity – Focused on Underserved Segments(2/2)
14
51.0
96.3
59.5
43.5
82.3
17.5 19.5
93.1 93.8
70.0
45.8
74.3
48.736.9
U Sp B Co Ch A M
(%)
Credit to Private Non-Financial Sector by Banks
% of the Population with an Account in a Financial Institution
A & B
C & C-
C+
D & E
Banking penetration(2)Sector
25%
57%
83%
96%
Targ
et M
arke
t
Traditional Banks Crédito Real
Customers walking into branches
Competing with distributors with a loan portfolio and a regional
presence
Focus on high income populationwith high credit penetration
Standard credit analysis focusedon mid and high income segments
Customer approach on siteTrain and develop salesforce
Invest in a partnershipEstablish a strategic Alliance
Exclusivity agreements
Expert and parametric credit analysis developed according to
the segment.
Focus on middle and low incomepopulation with low credit
penetration
Source: CNBV, ENIF, BCRA, BCRB, SBIF, SBS, Superfinanciera de Colombia, IMF and World Bank.Note: Serving an underpenetrated market date reported as of 2017. Bancarization reported as of 2013.(1) US show figures as of 2016,(2) Population utilizing banking services. Income level by bracket (approximate annual amount in US$): “A/B” +108,400; “C+” 76,500; “Cm/C” 29,700; “D” 8,900; “E” 3,400.
Differentiators
192.2
105.7
59.7 49.4
112.6
16.1
35.5
19.0 11.7 15.4 13.4 14.00.2 5.7
U Sp B Co Ch A M
(%)
Private sector credit penetration as a % of GDP
Consumer loans penetration as a % of GDP
Main business lines for future growth
ProductKey
Subsidiaries OwnershipDistribution
Network Annual Interest Rate Customers Avg. Loan Amount (Ps$) Strategy Yield 2022
PAYROLL15 distributors
+6,000 reps55% 446,155 65,350
Pensioners market development
Focus on federal-level employees30%
INSTACREDIT
46 branches in Costa Rica
13 branches in Nicaragua and 6 in
Panama
57% 159,178 28,489
Efficiency in funding cost and general expenses
Improvement in asset quality
Expansion in Central America
56%
USED CARS MX
20 branches and agreements with
506 agenciesin 32 States of
Mexico
36% 11,835 123,330
Used Cars MX expansion
Enlarge dealers network
Increase competitive positioning
30%
CR USA
One strategicalliances with oneBranch and +1,300 distributors in the
US
25% 12,531 332,370
Grow dealers network
New Crédito Real USA brand, expanding product offering
Coupled with the enhancement in servicing and collection
25%
SMEsAlliance with Fondo
HCR Arrendamiento
22% 606 10.2 Million
Diversification of Fondo H portfolio
Define new products sized for our clients
Leasing and factoring
20%
Average yield > 30%
100%
49%
49%
70%
51%
99%
15
-0.2
2.2
1.5
3.6
2.7 2.6
6.0
2.4 2.22.6 2.7
18.6 17.4 18.2
55.1
38.5
52.4 50.0
56.6
24.9
18.0 19.0
Profitability – Defensive Competitive Positioning
16
Risk-return view(1)
Solid capital base(2)
Delivering bottom-line results (ROAA)(3)
Source: Crédito Real Research and last updated information filed with BMV – Bolsa Mexicana de Valores. Information as of 1Q20, Notes:(1) ROAE = LTM’1Q20 Net Income / Average Stockholders’ Equity LTM’1Q20.(2) Capitalization Ratio = 1Q20 Stockholders’ Equity / 1Q20 Total Loan Portfolio(3) ROAA = LTM’1Q20 Net Income / Average Assets LTM’1Q20.
Avg.2.6%
Avg.33.5%
2
ALPHACREDIT
BBAJIOO
BSMXB
CAME
CONSUBANCO
CREAL
FINDEP
FONACOTGENTERA
GFINBURO
GFNORTEORA
UNIFINA
MULTIVA
-2
3
8
13
18
0.0 1.0 2.0 3.0 4.0 5.0 6.0
LTM
´20
RO
AE
(%)
LTM´20 NPLs (%)
17
Improving levels of NPL while maintaining healthy reserves(1)
1.9% 2.4% 2.2% 2.1% 1.7% 1.3% 1.5%
3.0% 2.8%
3.2% 3.7%
2.9% 3.0% 3.6%
2014 2015 2016 2017 2018 2019 2Q20
NPL Ratio Reserves / Total loan portfolio
25%
59%
22%
32%28%
15%
Total Instacredit Payroll Used CarsMX
CR USA SMEs
1.5%1.8%
1.5%
0.5%
1.3%1.9%
2.9% 2.5%
1.9% 2.0%
Total Payroll Used Cars SMEs Instacredit
Credito Real Banking Sector
Average yield breakdown by product NPL breakdown by product(2)
+ Below the banking sector in most of our products
Peer-superior asset quality
LTM’20
5,773
7,080 7,262 7,2976,568
8.0%
14.0%
20.0%
26.0%
0
2,000
4,000
6,000
8,000
2017 2018 2019 LTM'19 LTM'20Net Interest Income NIM NIM after provisions
Key financial performance indicators
18
76%50%
25%
Interest income
Net income
Loan portfolio
Financial margin
29,015
36,319
46,958
41,085
47,174
51,943
0.0%
2.0%
4.0%
6.0%
0
10,000
20,000
30,000
40,000
50,000
2017 2018 2019 LTM'19 LTM'20
Loan Portfolio Operating Loan Portfolio NPL
YoY Growth: 26%CAGR ’17–’19: 25%
8,463
10,201
11,93310,987 11,335
11,705
20.0%
24.0%
28.0%
32.0%
36.0%
40.0%
0
2,000
4,000
6,000
8,000
10,000
12,000
2017 2018 2019 LTM'19 LTM'20
Interest Income Total Income Yield
CAGR ’17–’19: 21%
CAGR ’17–’19: 13%
1,661
1,955 1,9802,260
1,428
0
500
1,000
1,500
2,000
2017 2018 2019 LTM'19 LTM'20
CAGR ’17–’19: 5% YoY Growth: (37%)YoY Growth: (10%)
YoY Growth: 3%
(1)
(1) Operating Loan Portfolio = Total loan portfolio + factoring portfolio + leasing portfolio
(2) Total income = Interest income + commissions charged + other income from operations
(2)
Key financial performance indicators
19
16%
50%
25%
Efficiency
ROAE
Capitalization
ROAA
36.4%32.3%
25.3%
38.8%34.4%
2017 2018 2019 LTM'19 LTM'20
50.2%
42.4% 43.9% 46.0%
52.5%
2017 2018 2019 LTM'19 LTM'20
4.5%4.2%
3.6%
4.5%
2.1%
2017 2018 2019 LTM'19 LTM'20
15.9%
12.9% 12.3%14.3%
8.2%
2017 2018 2019 LTM'19 LTM'20
(1) Equity / Operating loan portfolio
(1)
(2)
(2) Annualized administrative expenses / (Financial margin + net commissions + 2Q20 other income from operations)
Focus on maintaining diversified funding sources
20
3
55%
45%
Secured
Unsecured
48%
52%
Short Term
Long Term
100%
14%
86%
92%
8%
Drawn
Undrawn
Consolidated debt status
45%
24%
5%1%19%
6%
Senior Notes
Credit Lines
DevelopmentBanksSecuritizations
Equity
Hybrid
23.9%(1)
Capital structure
Cost of funds
Market risks
Interest Rate Risk 58.2% of Crédito Real‘s consolidated debt is fixed
Asset & Liabilities duration Assets Liabilities
1.5 years 3.4 years
Assets in USD: +100 million
Drawn vs. Undrawn
Secured vs. Unsecured
19%
81%
Term(2)
Credit Lines100% = $22,427
Securitizations100% = $10,000
Credit Lines100% = $20,419
Credit Lines100% = $20,419
Securitizations100% = $10,000
Securitizations100% = $10,000
(1) Hybrid plus Equity as percentage of total Assets(2) Short term refers to amortization under 1 year. Long term ranges from 1 to 5 years.
MXN Mn
7.0% 8.0% 8.3% 8.5%5.9%
4.4% 3.1%4.5% 4.7%
3.2%
2017 2018 2019 2Q19 2Q20
Spread
Average TIIE
11.1%
12.8%11.4%
Adjusted Capitalization | 70,884.8 MXN Mn
13.2%
9.1%
$3,684
$1,496$2,663
$2,019
$67
$67
$67$67
3Q20 4Q20 1Q21 2Q21
Debt Profile
21
$8,108 $8,072
$3,405
$5,179
$9,029
$4,429
$1,673
$264
$133
$308
$494
$250
$208
$4,306
$7,733
2020 2021 2022 2023 2024 2026 2027Euro Bond Subordinated Notes Securitization Credit Lines Swiss Bond Senior Notes
52%
25%16%
7%
USD
MXN
EUR
CHF
Debt by currency
SN 2019BB
PerpetualNotes
B+BB-
SN 2023BB+
Swiss Bond 2022BB+
SN 2026BB+
(1) All the figures represent only the notional and exclude accrued interests and mark-to-market of hedges. Debt converted using US$ 1 / Ps$ 23.0893 as of June 30, 2020.
BB BB+
Global scale ratings
Negative Negative
BBB-
Stable
Euro Bond 2027BB+
Strong Corporate Governance and Experienced Management Team
22
4
Robust standards of
corporate governance
Well-respected
shareholders driving the
business
+ Listed on Mexican stock exchange (BMV:CREAL*) with a market cap of ~195 USD Mn(1)
+ Founding members well-known and reputable in the Mexican business community (founders of leading manufacturer in the Americas, MABE)
+ Our management have a proven expertise on the sector
+ 50% of Crédito Real’s Board is integrated by independent members
Shareholder structure
Ángel Romanos
CEO
26 years in CR
Carlos Ochoa
Co-CEO / CFO
24 years in CR
Luis Carlos Aguilar
Commercial Officer
for Payroll Loans
24 years in CR
Jose Juan González
COO
11 years in CR
Luis Magallanes
CMO
7 years in CR
Claudia Jolly
General Treasurer
22 years in CR
Luis Calixto López
General Counsel
19 years in CR
Adalberto Robles
Human Resources
Officer
11 years in CR
Luis Berrondo
M&A Officer
5 years in CR
Pablo Bustamante
Comptroller
3 years in CR
Felipe Guelfi
Buisness Officer
3 years in CR
Hector Huelgas
Internal Audit Officer
3 years in CR
EthicsCommittee
SecuritiesTransactionsCommittee
ExecutiveCommittee
Communicationand Control Committee
Management team
Key committees
AuditCommittee
CorporatePractices
Committee
Governance highlights
(1) As of June 30, 2020
CNBV Supervision
5.7%Dividends as % Net Income
Ou
tsta
nd
ing
shar
es
11.7% 13.6%
24% 24% 24%
8% 7% 7%
0
67% 67% 67%
1% 2% 2%
0
50
100
150
200
250
300
350
400
2017 2018 2019
Berrondo Family
Other Families
Float
Buy-back
Cancellation of 0.8% of the capital stock
Cancellation of 3.2% of the capital stock
Appendix
Profit & Loss
24
Ps. million 2Q20 2Q19 (%) Var. 2Q19 Proforma
2Q20
(million US
dollars)1
YTD’20 YTD’19 (%) Var. YTD’19 Proforma
YTD’20
(million US
dollars)1
Interest income 2,399.8 2,859.6 (16.1%) 2,773.9 103.9 5,092.2 5,690.0 (10.5) 5,573.2 220.5Interest expense (1,181.2) (1,099.3) 7.4% (1,080.5) (51.2) (2,261.1) (2,165.1) 4.4 (2,158.8) (97.9)Financial margin 1,218.6 1,760.3 (30.8%) 1,693.4 52.8 2,831.1 3,524.9 (19.7) 3,414.4 122.6Net provision for loan losses (404.4) (254.3) 59.1% (269.1) (17.5) (864.4) (591.4) 46.2 (586.2) (37.4)Risk-adjusted margin 814.2 1,506.1 (45.9%) 1,424.3 35.3 1,966.7 2,933.5 (33.0) 2,828.2 85.2Commissions and fees collected
78.5 139.8 (43.8%) 169.4 3.4 78.4 274.6 (71.5) 319.7 3.4
Commissions and fees paid (55.1) (95.0) (41.9%) (95.0) (2.4) (119.2) (180.5) (34.0) (180.5) (5.2)Intermediation income 1.9 (6.4) - (6.4) 0.1 63.2 251.0 (74.8) 251.0 2.7Other income from operations
304.7 9.8 - 200.9 13.2 393.5 40.6 - 389.6 17.0
Administrative and promotion expenses
(785.1) (851.7) (7.8%) (876.0) (34.0) (1,557.6) (1,705.8) (8.7) (1,754.6) (67.5)
Depreciation expense (154.6) - - (126.4) (6.7) (154.6) - - (222.5) (6.7)Operating result 204.5 702.5 (70.9%) 690.8 8.9 670.4 1,613.4 (58.4) 1,630.8 29.0Income taxes (25.5) (167.1) (84.7%) (170.6) (1.1) (153.0) (432.2) (64.6) (444.2) (6.6)Income before participation in the results of subsidiaries
179.0 535.4 (66.6%) 520.2 7.8 517.5 1,181.2 (56.2) 1,186.6 22.4
Participation in the results of subsidiaries, associates and non-controlling participation
(47.7) (43.1) 10.5% (27.1) (2.1) (80.7) (64.3) 25.5 (50.5) (3.5)
Net income 131.4 492.3 (73.3%) 493.2 5.7 436.8 1,116.9 (60.9) 1,136.1 18.9
Balance Sheet
25
Ps. million 2Q20 2Q19 (%) Var. 2Q19 Proforma2Q20
(million US dollars)14Q19 (%) Var.
Cash and cash equivalents 1,129.2 511.5 - 545.3 48.9 1,180.9 (4.4)Investments in securities 1,801.1 888.1 - 929.1 78.0 1,294.4 39.2
Securities and derivatives transactions 6,500.7 442.7 - 442.7 281.5 - -
Total performing loan portfolio 46,479.2 40,465.0 14.9 38,298.2 2,013.0 46,325.7 0.3
Total non-performing loan portfolio 695.0 619.9 12.1 619.9 30.1 632.7 9.8
Loan portfolio 47,174.2 41,084.9 14.8 38,918.1 2,043.1 46,958.4 0.5Less: allowance for loan losses 1,708.1 1,272.0 34.3 1,288.5 74.0 1,390.0 22.9Loan portfolio (net) 45,466.0 39,812.9 14.2 37,629.6 1,969.1 45,568.4 (0.2)Factoring Loan Portfolio 1,957.1 237.9 - 656.1 84.8 231.5 -Other accounts receivable (net) 7,499.5 5,570.7 34.6 5,401.2 324.8 6,565.5 14.2Foreclosed assets (net) 25.6 8.6 - 8.6 1.1 10.8 -
Property, furniture and fixtures (net) 3,511.4 737.6 - 2,661.2 152.1 625.3 -
Long-term investments in shares 1,251.5 1,186.7 5.5 1,156.4 54.2 1,273.6 (1.7)
Debt insurance costs, intangibles and others 5,511.5 4,618.7 19.3 4,619.2 238.7 4,841.5 13.8
Total assets 74,653.6 54,015.4 38.2 54,049.4 3,233.3 61,591.7 21.2Notes payable 1,013.5 1,220.4 (17.0) 1,220.4 43.9 1,261.0 (19.6)Senior Notes payable 31,596.8 21,853.7 44.6 21,853.7 1,368.5 24,636.7 28.3
Bank loans and borrowings from other entities -
Short-term 9,835.6 8,661.9 17.9 8,661.9 442.4 7,597.6 34.4Long-term 10,582.9 3,291.9 - 3,291.9 442.0 8,015.9 27.3
Total Bank loans 20,418.5 11,953.7 70.8 11,953.7 884.3 15,613.5 30.8Total debt 53,028.8 35,027.8 51.4 35,027.8 2,296.7 41,511.2 27.7Income taxes payable 313.0 306.7 2.0 316.3 13.6 330.5 (5.3)
Securities and derivatives transactions - - - 763.8 - 765.3 -
Other accounts payable 905.4 399.6 - 1,977.4 39.2 810.2 11.8Deferred taxes 2,550.5 2,344.9 8.8 38,085.4 110.5 2,110.6 20.8Total liabilities 56,797.7 38,079.1 49.2 316.3 2,459.9 45,527.8 24.8Capital stock 1,738.6 1,845.9 (5.8) 1,845.9 75.3 1,852.4 (6.1)Perpetual notes 4,206.7 4,206.7 (0.0) 4,206.7 182.2 4,206.7 -
Accumulated results from prior years 9,660.2 8,045.5 20.1 8,045.5 418.4 7,778.3 24.2
Result from valuation of cash flow hedges, net (174.7) (226.3) (22.8) (226.3) (7.6) (708.2) (75.3)
Cumulative translation adjustment 758.4 (66.4) - (66.4) 32.8 5.5 -
Controlling position in subsidiaries 1,230.0 1,014.1 21.3 1,022.5 53.3 949.1 29.6
Net income 436.8 1,116.9 (60.9) 1,136.1 18.9 1,980.1 (77.9)Total stockholders' equity 17,856.0 15,936.3 12.0 15,964.0 773.3 16,063.9 11.2
Total liabilities and stockholders' equity 74,653.6 54,015.4 38.2 54,049.4 3,233.3 61,591.7 21.2
Financial Ratios
26
2Q20 2Q19 (%) Var. 2Q19 Proforma YTD’20 YTD’19 (%) Var. YTD’19 ProformaYield 19.8% 28.8% (9.0) 29.4% 21.2% 29.5% (8.3) 30.4%Net interest margin 10.1% 17.7% (7.7) 18.0% 11.8% 18.3% (6.5) 18.6%Return on average loan portfolio 1.1% 5.0% (3.9) 5.2% 1.8% 5.8% (4.0) 6.2%ROAA: return on average assets 0.7% 3.8% (3.0) 3.8% 1.3% 4.3% (3.1) 4.4%ROAE: return on average stockholders’ equity 2.8% 12.3% (9.5) 12.3% 4.9% 14.0% (9.0) 14.2%ROAE: return on average stockholders’ equity (excluding
Perpetual Notes) 3.7% 16.7% (13.0) 16.7% 6.5% 19.1% (12.6) 19.3%
Debt to equity ratio 3.0 2.2 0.8 2.2 3.0 2.2 0.8 2.2
Debt to equity ratio (excluding Perpetual Notes) 3.9 3.0 0.9 3.0 3.9 3.0 0.9 3.0Average cost of funds 9.1% 13.2% (4.1) 13.0% 9.3% 13.3% (4.0) 13.3%Efficiency ratio1 62.1% 41.9% 20.2 49.6% 55.4% 41.9% 13.6 49.4%Capitalization ratio 37.9% 38.8% (0.9) 41.0% 37.9% 38.8% (0.9) 41.0%Capitalization ratio (excluding Perpetual Notes) 28.9% 28.5% 0.4 30.2% 28.9% 28.5% 0.4 30.2%Provisions for loan losses as a percentage of total loan
portfolio23.3% 2.5% 0.8 2.7% 3.7% 2.9% 0.8 3.0%
Allowance for loan losses as a percentage of total past-
due loan portfolio245.8% 205.2% 40.6 207.9% 245.8% 205.2% 40.6 207.9%
Total past-due loan portfolio as a percentage of total loan
portfolio1.5% 1.5% - 1.6% 1.5% 1.5% - 1.6%
Crédito Real is a leading financial institution in Mexico, with presence in the United States, Costa Rica, Panama,Nicaragua and Honduras, focusing on consumer lending with a diversified business platform in the following mainlines of business: payroll loans, small business loans, used car loans, consumer loans through Instacredit andgroup loans. Crédito Real offers its products mainly to low and middle-income segments of the population thathave historically been underserved by other financial institutions. The Company’s stock is listed on the MexicanStock Exchange under the ticker symbol “CREAL*”. (Bloomberg identification number is CREAL*:MF)
This presentation does not constitute or form part of any offer or invitation for sale or subscription of orsolicitation or invitation of any offer to buy or subscribe for any securities, nor shall it or any part of it form thebasis of or be relied on in connection with any contract or commitment whatsoever.
This presentation contains statements that constitute forward-looking statements which involve risks anduncertainties. These statements include descriptions regarding the intent, belief or current expectations of theCompany or its officers with respect to the consolidated results of operations and financial condition, and futureevents and plans of the Company. These statements can be recognized by the use of words such as “expects,”“plans,” “will,” “estimates,” “projects,” or words of similar meaning. Such forward-looking statements are notguarantees of future performance and actual results may differ from those in the forward-looking statements as aresult of various factors and assumptions. You are cautioned not to place undue reliance on these forward lookingstatements, which are based on the current view of the management of the Company on future events. TheCompany does not undertake to revise forward-looking statements to reflect future events or circumstances.
The trademarks images of other companies showed in this corporate presentation are used only for the purposesof this filing, either as a reference and / or for informational purposes, and not for a profit matter. Therefore,those trademarks belong to their respective owners according to the Mexican Institute of Industrial PropertyIndex. The use of the aforementioned trademarks as graphic representations do not constitute a relationship and /or association of products and / or services between their respective owners and Crédito Real
Disclaimer
