Regional S.A.B (RA) Q1 2025 earnings summary

Executive summary

• Net income for 1Q25 reached MXN 1,633 million, up 1% year-over-year, with ROE/ROAE at 20.6%.

• Core deposits grew 12% year-over-year, with time deposits up 14% and demand deposits up 10%.

• Performing loans and leasing increased 12% year-over-year to MXN 178,711 million.

• Shareholders' equity rose 14% year-over-year to MXN 34,195 million.

• Hey Banco reached break-even, with net income swinging from a loss to a profit and digital initiatives expanding.

Financial highlights

• Interest income for 1Q25 was MXN 7,634 million, up 6% year-over-year.

• Financial margin increased 8% year-over-year to MXN 3,723 million.

• Non-financial income grew 16% year-over-year to MXN 1,040 million.

• Operating income for 1Q25 was MXN 2,218 million, up 3% year-over-year.

• Non-interest expenses rose 17% to MXN 1,826 million, driven by investments in operations and technology.

Outlook and guidance

• Full-year guidance reiterated, expecting solid and sustainable growth through 2025.

• Loan growth guidance maintained at 10%-15%, with current growth at 13%.

• NIM expected to contract with policy rate reductions, but hedged by fixed-rate portfolios.

• OPEX growth expected to stabilize at 10%-12% for the year.

• Management expects continued growth in core deposits and commercial lending, supported by strong capitalization.