Regional S.A.B (RA) Q4 2025 earnings summary

Executive summary

• Net income for 4Q25 reached $1,816 million pesos, up 7% year-over-year, with ROAE at 19.1% despite a 224 bps decline year-on-year.

• Total assets increased 12% year-over-year to $277,416 million, with total loans up 8% and core deposits up 13%.

• Commercial strategy focused on regional expansion, cost control, disciplined credit underwriting, and income diversification, especially non-financial revenue.

• Hey Banco completed its spin-off, reporting MXN 55 million net income for the quarter and continued profitability improvement.

• Portfolio health remains strong, with no significant deterioration in credit quality and disciplined risk management.

Financial highlights

• Financial margin for 4Q25 was $4,022 million pesos, up 7% year-over-year; adjusted financial margin also grew 7%.

• Core deposits grew 13% year-over-year, and loans expanded 8% year-over-year, with strong growth in Jalisco and SME/auto segments.

• Non-financial income increased 10% quarter-on-quarter, with card merchant fees up 17% year-on-year and insurance fees up 25% quarter-on-quarter.

• Operating expenses rose 17% year-over-year, raising the efficiency ratio to 42.2%.

• Net interest margin (NIM) for 4Q25 was 6.3%, down 32 b.p. year-over-year.

Outlook and guidance

• Targets for 2026: total loan and deposit growth 5%-10%, NIM 6%-6.3%, efficiency ratio ~42%, net income growth 5%-10%, ROE 8%-19%, cost of risk 0.8%-1%, NPL ratio below 1.8%.

• Hey Banco guidance: loan growth 15%-20%, net income growth 65%-90%.

• No change in strategy for Hey Banco post-spin-off; focus remains on bancarized customers and cross-selling.

• OpEx expected to grow in the low tens for 2026, with potential for single-digit growth by 2027-2028 if inflation remains stable.

• Credit ratings remain stable or positive, supporting future funding and expansion.