By Kylie Madry
MEXICO CITY (Reuters) -Mexico's Grupo Financiero Banorte reported on Tuesday a 9% hike in first-quarter net profit from the year-ago period, citing growth in its loan book.
Net profit for the quarter hit 14.21 billion pesos ($859.48 million), as its active loan book topped 1 trillion pesos for the third-consecutive quarter.
Net interest income, the difference between what banks earn on loans and dole out in deposits, grew 10% year-over-year on the larger loan book, which also benefited from higher interest rates.
Nearly all loan sectors showed double-digit growth year-over-year. Government loans, however, shrank 2.2% on election-year restrictions, Banorte said.
Mexico's central bank lowered its benchmark interest rate from a historic high of 11.25% to 11% in March, the effects of which "will be seen starting in the second quarter," Banorte said in a release.
Revenue for the group, which owns one of the country's largest banks and pension funds, totaled 37.038 billion pesos in the quarter, up 15% from a year earlier.
Return on equity grew 78 basis points year-over-year to 22.2%. The firm estimates a ROE between 21% and 22% for the year.
Non-financial expenses in the quarter grew 13% from the year-ago period on growth initiatives such as Banorte's digital bank, Bineo.
Banorte launched Bineo in January, aiming to add 2.8 million new clients over the next five years.
($1= 16.5310 Mexican pesos at the end of March)