By Kylie Madry
MEXICO CITY () – Executives of Mexican lender Banorte said on Tuesday it would either sell or fuse year-old fintech Bineo, part of a larger overhaul of the bank’s digital strategy to cut costs and simplify operations.
CEO Marcos Ramirez told journalists that Bineo, which lost 289 million pesos ($14.12 million) in the first quarter, could be brought under the Banorte umbrella or sold. A decision should be made this year, he added.
If Bineo were fused into Banorte, it would bring its clients and technology with it, Ramirez said, and could face a name change. He conceded that option would be the “most convenient” for the firm.
Alternatively, Banorte could sell Bineo’s banking license for around what Banorte has invested in the fintech – some $100 million – Ramirez added.
“We’ve heard from a lot of people who’ve come knocking,” he said, though he did not name any potential buyers.
Buying a license has become a common way for would-be banks in Mexico to cut through years of red tape. In 2022, Citi bought Deutsche Bank’s license to continue operating its corporate and investment banking units in the country as part of its split from local retail unit Banamex.
Analysts at J.P. Morgan said the market could take the Bineo divestment favorably, given it “has been a headwind to earnings per share.”
Going forward, the consolidation would mean Banorte’s digital initiatives, including its Rappi credit card venture and Banorte Movil app, “act as a single highway instead of three separate lanes,” Ramirez said.
Last week, Banorte bought out the remaining stake in RappiCard’s holding company for $50 million. The deal also gives Banorte exclusive rights to offer Rappi cards for 15 years.
FURTHER GROWTH AHEAD
Ramirez said that Banorte would not back down from its expected loan book growth for the year, of around 10%, despite fears that Mexico could be hit with a recession. Banorte still expects Latin America’s No. 2 economy to eke out some growth.
“Banorte has always bet on Mexico,” he said. “In times of crisis, Banorte always grows.”
Ramirez added that Banorte was “all in” on President Claudia Sheinbaum’s calls for banks to lower their lending rates, and that the firm would adjust its rates in line with the central bank’s monetary policy decisions.
In March, Mexico’s central bank brought its benchmark rate to its lowest level since September 2022 with a 50-basis-point cut.
The outlook from Ramirez comes after Banorte reported first-quarter profits up 8% as internal demand boosted its loan book growth.
Net profit for the group climbed to 15.29 billion pesos ($747.3 million), just above an LSEG-compiled estimate of 15.04 billion pesos, from revenues up 10% to 40.58 billion pesos, also slightly above the LSEG estimate.
($1 = 20.4604 pesos at end-March)
(Reporting by Kylie Madry; Editing by Sarah Morland and Saad Sayeed)
