SOCIAL RESPONSIBILTY REPORT. Making Mexico Stronger

Transcription

1 SOCIAL RESPONSIBILTY REPORT Making Mexico Stronger 2009

2 INDEX > DECLARATION OF SUSTAINABILITY / PILLARS 2 > CORPORATE STRUCTURE / COVERAGE / TERRITORIES 3 > MISSION & VALUES 4 > Table of Hard Facts 6 > Organizational Profile / HIsTORY 7-8 > Message from the President AND GENERAL DIRECTOR 9-10 > Value Chain > EQUALITY and GoVERNANCE > Community COMMITMENT > Environment RESPONSIBILITY > Marketing with a Social Vision > Dialogue with StakEHOLDERS 62 > Awards and Distinctions 63 > VERIFICATION LETTER 64 > Glossary of TERMS > CLOSING STATEMENT 67 > GRI INDEX 68 > ABOUT THIS REPORT 70 > CONTACT 71

3 DECLARATION OF SUSTAINABILITY At, sustainability means maximizing growth and profitability while seeking to achieve balance among the economic, social, and environmental aspects of our business. Sustainability efforts center on four principal areas: our association with the International Finance Corporation (IFC) and the Equator Principles, adoption of the GRI methodology, measurement of our carbon footprint, and the United Nations Global Compact. Through these focus areas, ensures that all operations remain stable, allowing us to achieve permanence as an institution. This is how we fulfill our Social Responsibility. Our Pillars ENVIRONMENTAL RESPONSIBILITY The responsibility to act with awareness of the environment, conserving the resources used by the company and undertaking actions that generate environmental awareness in society. COMMUNITY COMMITMENT The responsibility to support the growth of and to interact with the community, through actions that take into account its interests along with those of the company.. EQUAlity AND GOVERNANCE The responsibility to create working conditions with ethical standards that foster both personal and professional development within and away from the workplace. Value Chain The responsibility to offer quality products and services and to encourage suppliers to adopt more sustainable practices.

4 GRUPO FINANCIERO BANORTE Corporate Structure GRUPO FINANCIERO BANORTE Banking Sector Long-Term Savings sector SPECIALIZED ENTITIES SECTOR brokerage sector BAnco Mercantil del Norte Annuities Leasing and Factoring a Brokerage house Banorte USA Pension Funds Warehousing Banorte Securities Insurance NATIONAL Coverage operates in every state in Mexico, through 1,088 branches. The business areas in which services are provided are: Commercial, Corporate, Business, Government, and Product Leaders. We are the Strong Bank of Mexico. One of our goals is to move ever closer to our clients, as year by year we increase our coverage through more branches and more efficient online access. TERRITORIES Noroeste 2 Frontera 3 Norte 4 Centro 5 Occidente 6 México Norte 7 México Sur 8 Sur 9 ISTMO 10 PeninsulaR

5 Our Mission To satisfy the financial needs of our clients through high-quality, personalized service provided with friendliness and efficiency. To preserve the integrity and quality of all of our operations, especially those involving the handling of deposits and capital. To increase profitability levels, backing our depositors and shareholders and creating a reinvestment base for the Group. To be a responsible corporate citizen and to seek leadership in the communities that we serve. To be a source of fair and decent employment, treating each one of our employees with the highest standards of equality and respect. This is why our mission is in a process of permanent enhancement, to keep up with a society and markets in constant evolution. OUR VALUES ETHICS To abide at all times by our Conduct Code. RESPONSIBILITY To be responsible in everything concerning our business area and to be co-responsible in those aspects that influence our activities and may have a positive impact on the country. TRUST To offer hope and security to our clients and employees, based on the institution s professional standards. TEAMWORk To generate collegiality and mutual cooperation, working together to achieve the vision of GFNorte. SPIRIT OF SERVICE To be ready to offer friendly service, unconditional support, quality, efficiency, and promptness. HONESTY To act with intelligence, fulfilling responsibilities in the use of information and material and financial resources. JUSTICE To provide to everyone what corresponds to them on the basis of truth and reason. AUSTERITY To make rational use of human and economic resources, in a spirit of sobriety and moderation. PROFITABILITY To constantly seek benefits for our clients and GFNorte. INTEGRITY To work, live, and speak with honesty, respect, and consistency in all areas and levels at GFNorte. SUSTAINABILITY To work to be here tomorrow, fostering harmonious economic, social, and environmental development.

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7 6 TABLE OF HARD FACTS Financial, Operating, and Sustainability Data Var. Anual % Number of branches 1,117 1,088 (2.6%) Number of ATMs 4,136 4, % Clients served 7,032,433 7,939, % Total revenues (millions of pesos) 24,844 24,074 (3.1%) Net results GFNorte (millions of pesos) 7,014 5,854 (16.5%) Total assets GFNorte (millions of pesos) 577, ,138 (1.7%) Total liabilities GFNorte (millions of pesos) 537, ,164 (2.8%) Banking sector capitalization ratio 15.0% 16.8% 1.8 pp Economic Aspects Direct employment (number of employees) 19,997 19,311 (3.4%) Indirect employment (millions of pesos) 387, ,134 (0.3%) Investment (millions of pesos) 931 2, % Taxes paid (ISR + PTU) 3,400 2,724 (19.9%) Number of employees trained 11,116 11, % Direct economic value created 63,979 58,940 (7.9%) Distributed economic value 56,868 53,063 (6.7%) Retained economic value 7,111 5,877 (17.3%) Social Aspects Social investment (thousands of pesos) 31,590 40, % Number of institutions supported % Number of persons benefited 1,000, ,631 (46.2%) Environmental Aspects Environmental investment (thousands of pesos) 88, , % Number of environmental programs implemented 2 3

8 7 ORGANIZATIONAL PROFILE (GFNorte) is one of the largest and most important institutions in Mexico. With wide coverage in Mexico and offices abroad, it ranks fourth in the country in terms of total assets. Its principal subsidiary, Banco Mercantil del Norte better known as Banorte is among the most profitable of Mexican banks, and ranks third in terms of total loan portfolio.

9 History In 1899 Banco Mercantil de Monterrey is founded. Almost half a century later, Banco Regional del Norte starts up operations. In 1896, through the merger of Banco Mercantil de Monterrey and Banco Regional del Norte, Banco Mercantil del Norte, S.N.C. is established. In 1992 Banorte is acquired by its current group of shareholders, led by Roberto González Barrera. In October of the same year, GFNORTE makes a public share offering on the Bolsa Mexicana de Valores (the Mexican stock exchange). In 1993, Banorte incorporates stock brokerage, factoring, warehousing, and leasing services into its business. In 1997, the banks Bancen and Banpaís are acquired, and a Savings and Retirement Sector (insurance, saving funds, and pension funds) is created, as Banorte strikes an alliance with the Italian group of Assicurazioni Generali. By 1998, Seguros Banorte-Generali is offering its services at more than 460 branches and by 1999 it ranks ninth among Mexican insurance companies. In 2002 Bancrecer is incorporated and Banorte ranks as the fifth largest bank in Mexico. In 2005, an alliance is struck with Telecomm Telégrafos and Banorte s new corporate headquarters are inaugurated in the Santa Fe district of Mexico City. In 2006, the remittance company UniTeller is acquired in New Jersey, as well as 70% of the assets of Texas-based Inter National Bank. In 2007, the Los Angeles-based remittance company Motran Services is acquired, and the bonding operations are spun off from the financial group. In the course of 2008, Banorte s leasing and factoring operations are merged. In 2009, the remaining 30% share of Inter National Bank is acquired, Corporación Financiera Internacional (IFC) invests US$150 million in Banorte, and GFNORTE is listed on the Latibex, the Madrid-based market for Latin American securities.

10 9 A MESSAGE FROM THE PRESIDENT AND GENERAL DIRECTOR Ever since our founding, we have sought to be the bank that fosters Mexico s integral development. This is why we have become the Strong Bank of Mexico, which signifies a deep commitment to our country, with a view to solidifying its economy, promoting the welfare of its inhabitants, and conserving the environment. Our sustainability is based on a group of healthy companies that not only generate revenues and are able to achieve their objectives, but that also interact with and have a solid commitment to society, always focusing on the care of the environment and maintaining consistency of thought and action. Today s world demands greater responsibility on the part of companies and institutions. In order to address these demands, our Group functions within a strategic framework that ensures its long-term sustainability. With the collaboration of experts in their fields, we take concrete measures and follow up on the achievement of our objectives in order to keep moving in the right direction. It is not possible to speak of Social Responsibility outside of an institutional framework. One of our central challenges is therefore to incorporate our concept of Social Responsibility and sustainability at all levels of our organizational culture. We know that this is not an easy task, that it takes time, and depends on a whole range of actions. Of primary importance is the determination of objectives, strategies, and actions that are in accord with our philosophy and our needs, and that result in clear incentives and benefits for all. We want our employees to be comfortable with what they are doing and how they are doing it, and this involves much more than just fair salaries. We seek to maximize our long-term yields from a different perspective, which embraces social and environmental factors and puts the emphasis squarely on our employees. We like to do things properly. We focus on those aspects where we can really make a difference, developing financial products with social benfits and fostering a diverse and inclusive workplace. In line with our vision, sustainability is a source that generates value, allowing our employees, shareholders, clients, and society itself to interact with in a way that satisfies needs and expectations, even as it creates synergies, empathy, and solid long-term relationships. Our way of working starts in the President s office, with a focus on business philosophy, professionalism, institutional culture, solid corporate governance, responsible risk management, and long-term vision. Among the most important actions taken in 2009 in the area of Social Responsibility was the investment of more than P$2.918 billion in the implementation of services which make us more competitive and, by their

11 convenience, help the users of the bank. Chief among these was our Banorte Fácil service, directed at people who have never had a bank account before. Also important were our loan products designed specifically for small and medium-sized companies, such as Crediactivo. All of these products are sustained by the institution s excellent levels of profitability and capitalization, healthy loan portfolio, and high standards of quality in the services we offer. Training remains essential, so we invested some P$41.8 million in this area, to the benefit of 19,311 employees. In 2009 we also invested more than P$40 million in social projects, benefitting 537,631 persons directly and 23,842,620 more indirectly. This was made possible through direct support provided to 99 different institutions and indirect support provided to six others. In the area of environmental conservation, our efforts have focused primarily on saving electrical energy. The implementation of a program for the proper administration and conservation of this resource has led to more efficient use of lighting, illuminated signs, and air conditioning equipment. As a result, we achieved savings of approximately 12%, equivalent to 9,395 tons of CO2 emissions annually. At the same time we have implemented programs to reduce paper use in offices and services through the promotion of electronic banking. Thanks to our state-of-the-art system of video-conferences we have been able to significantly reduce employee travel. This translates into greater productivity and a smaller carbon footprint. At we are working to strengthen our Social Responsibility and sustainability, thereby generating tangible benefits for our shareholders, employees, clients, and the strong Mexico we all wish to see. Don Roberto González Barrera Presidente Dr. Alejandro Valenzuela del Río Director General

12 VALUE CHAIN The responsibility to offer quality products and services and to encourage suppliers to adopt more sustainable practices. ECONOMIC IMPACT We foster the integral economic development of Mexico through the responsible, professional administration of the financial resources of our clients, efficient financing, and a broad range of financial services and products, with a high level of customer service.

13 Investment of P$2,918 million in 2009 Total assets of P$567,138 million 19,311 employees 1,088 branches

14 13 Investment Investment is decisive to the competitiveness of companies and consequently to their sustainability. In 2009 we invested P$2,918 million in fundamental areas such as communications, software, hardware, equipment, advertising, consulting, and security. In the banking sector alone an investment of P$608.7 million was made: P$408.4 in material resources and P$200.2 in technology. Operating expenses amounted to P$17,024 million, of which P$10,261 million corresponded to materials and P$6,763 million to salaries. We are convinced that only through constant investment can we maintain healthy growth, successfully respond to the challenges and opportunities presented by the future, improve our offer of value, and so enhance our sustainability. Financial Soundness As of 31 December 2009, the total assets of GFNorte amounted to P$567,138 million. The institution s equity was P$44,974 million, while its subordinated debt its principal long-term liability amounted to P$12,485 million. (Other liabilities are related to the capturing deposits from clients and therefore cannot be considered as debt.) At the same time, since GFNorte is a financial institution, the Basel Accords require us to determine regulatory capital. Thus, the institution s basic capital was P$35,380 million at the close of December 2009, while its complementary capital amounted to P$14,277 million, giving a net capital of P$49,657 million. This translates into a basic capitalization ratio of 12.0% and a complementary capitalization ratio of 4.8%, producing a total ratio of 16.8%, taking into account credit, operational, and market risks. These are very positive indicators in comparison with both Mexican and international levels.

15 14 Clients It is the policy of GFNorte to target the widest variety of users with its products and services, which range from savings accounts for children to specialized services for large corporations and government. We focus on increasing the value of our clients deposits, making use of the economic, financial, and market analyses of our highly qualified personnel and experienced investment and credit committees. We maintain strict security measures to prevent acts of corruption being committed within our institution. Number of clients 7,939,622-7,032,433 - In the aim of offering our clients better service, we emphasize constant training and reinforce our employees grasp of the principles, philosophy, and values of our institution, at the same time turning to modern tools and proven methods such as market surveys, mystery shoppers, and the monitoring of satisfaction variables to understand our clients perception of the quality of our services. Annual Var. 2009/

16 15 Products and Services We strive to offer the best financial products and services to help people realize their productive projects or life plans. This is our ultimate goal and represents a great responsibility to us. An important part of our sustainability involves developing competitive and innovative savings and credit products. The creativity, experience, and vision of our specialists go into designing new products and services that address the needs of the wide range of our clients. We can satisfy the needs of the child opening his or her first savings account as well as the established corporation seeking more sophisticated credit instruments to negotiate with the rest of the world, or the small company whose development and viability depends on our services.

17 16 Conceptualization of the initiative Authorization by the Operating Committee Drawing up of the proposed solution Approval of the Virtual Projects Office Integral testing Development of the product or service Drawing up of the functional analysis Approval of the Technology Committee Drawing up of internal norms and operating procedures Training of relevant areas Evaluation of internal and external communication plans Implementation Product and Service Development Process At nothing is left to chance. Every new product and service passes through a meticulous process that begins with a series of market studies. These allow us to understand the genuine needs of our clients and ensure that our offering coincides with what the country really requires. Also, as a company majorly controlled by Mexican investors and staffed mainly by Mexicans, we can better understand these needs and thus react more effectively and immediately to demands for financial services. It is a priority for us to listen to what our actual and potential clients have to tell us, as we spread out across the thirty-two states in the country to learn about the particular requirements of different localities. This work is complemented by the efforts of Customer Relationship Management (CRM), which helps us to monitor the consumption habits of our customers and their reasons for choosing one or another banking or brokerage service. On the basis of this information, we develop products and services that meet the needs of the market, the financial situation, and the strategic plans of our clients. The diagram above outlines the work performed by the product development area, from the conceptualization of an initiative to its implementation The following are some examples of the wide range of products and services we offer:

18 17 Deposit Products Banorte Fácil This deposit account is for people who have never had a bank account. No commissions are charged and there is no minimum balance. Suma Nómina A payroll account, also without commissions charged or a minimum balance requirement. Enlace Global (companies and individuals) With this Mexican peso account (checking or non-checking), the account-holder has access to a Visa Electron International debit card. The client may choose between a fixed monthly charge or charges per transaction. Ganamás y Pagamás Ganamás and Pagamás are short- and medium-term promissory notes, payable upon maturity every 28 days and six months, respectively. Both products, which are offered through our branch network, pay a percentage of the Cetes rate. One of their principal benefits is the possibility of earning a bonus of additional returns in accordance with the term of the investment.

19 18 Credit Products Family Loans Payroll loans These loans are offered to employees using Banorte payroll deposit accounts. They can be equivalent to 6, 8, or 12 months salary, with terms ranging from 12 to 48 months. Car Loans Banorte offers its clients fixed-nominal rate car loans, as well as financing for the purchase of a used car. Terms range from 12 to 60 months, depending on the needs of the client. Credit Cards We have a wide range of credit cards, including a Traditional, a Premium, and the Ya Bájale balance transfer program. Interest rates and annual commissions vary depending on the product, but all of the cards benefit from loyalty incentives through the Recompensa Total Banorte program. Mortgage loans Banorte s mortgage solutions are designed to meet different needs: financing for the purchase of a home, as well as for construction, renovation, additional cash flow, and for the purchase of a lot or a commercial space. Interest rates and annual commissions vary by product, with terms of 15, 20, or 30 years.

20 19 Institutional Loans Small and medium businesses (SMEs) These loans are aimed at both medium sized businesses (with annual revenues of between US$4 million and US$10 million) and small businesses (with annual revenues of between $200,000 and $4 million). In both cases, the loans are granted directly by the bank or through its subsidiaries (leasing, factoring, or warehousing). Crediactivo is the principal credit product for SMEs. It is a credit specially designed to meet the working capital and fixed asset purchase needs of these companies. Up to 60% of the loan can be guaranteed by the development bank Nacional Financiera (Nafin). Crediactivo is part of an integral package of products for SMEs which includes checking accounts, online banking, and payroll and investment services. As a complement to this product, Banorte also offers the Empuje Negocios-Visa (Visa Business Boost ) credit card, aimed at companies which invoice more than P$25,000 per month. Clients may also have access to exclusive consulting, tax, accounting, commercial, labor, and legal (both civil and criminal) services by telephone or online, at no additional cost. The Paquete PYMES (SMEs Package) consists of a checking account with features such as unlimited access to internet services and payroll administration services for a fixed monthly charge, as well as attractive yields on investments.

21 20 Corporate and business loans Corporate and business loans are offered to companies with annual revenues of more than US$100 million and between US$10 million and US$100 million, respectively. All of these loans are granted directly by the bank or through its subsidiaries (leasing, factoring, or warehousing). Government loans These loans are available to state and municipal governments, as well as to the federal government.

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23 22 Deposits Capturing and managing resources from the public represents a great responsibility, but it also offers thousands of Mexicans the opportunity to earn adequate returns, increase their assets, and achieve greater economic well being. We have ample experience in correctly administering these resources, relying on our highly qualified personnel and our business vision, aimed at generating long-term value. All of these factors have allowed us to offer our clients the best returns in the market. CrEdit Credit plays an important role in economic growth and development, allowing financial resources to be effectively distributed and put to work. Our loan portfolio embraces practically every segment of economic activity, with special emphasis on SMEs, but it also includes mortgage loans, which by their very nature have a direct impact on the well being of the population. Total Portfolio By line of business (clients) Mortgage 45,499 $49,221 Car loans 7,594 7,424 Credit card 15,067 11,801 Payroll 6,707 6,487 Consumer 74,867 74,932 Commercial 41,409 37,630 Business 51,112 46,488 Corporate 45,127 40,245 Government 26,989 38,993 Recovery bank Total performing loans $240,298 $238,954 Million pesos.

24 23 Loans by Economic Sectors 2008 Geographical Zone Economic sector North Center West South Total Agriculture $2,576 $1,317 $571 $737 $5,201 Mining Manufacturing 8,502 5,159 1, ,414 Construction 6,819 6, ,875 Electricity, gas, and water Commerce 13,870 9,345 3,477 6,359 33,051 Transport 1,464 6, ,515 Financial services 9,319 13, ,713 24,659 Communal services 2,904 3,728 1, ,105 Mercantile groups Public administration and services 14,668 8,382 1,626 2,413 27,089 International organization services Inter National Bank (INB) ,618 Credit cards ,067 Retail ,053 Mortgage ,750 Other Banorte leasing and factoring ,194 Pronegocio micro-credit loans Total loan portfolio $60,251 $54,485 $10,457 $14,144 $240, Geographical Zone Economic sector North Center West South Total Agriculture $2,314 $1,167 $581 $732 $4,794 Mining Manufacturing 7,872 4,725 1, ,946 Construction 6,042 6, ,828 14,652 Electricity, gas and water Commerce 10,543 7,241 3,307 6,031 27,122 Transport 1,308 6, ,855 Financial services 8,975 11, ,473 21,858 Communal services 2,524 4,242 1, ,649 Mercantile groups Public administration and services 21,403 12,938 2,070 2,516 38,927 Inter National Bank (INB) ,100 Credit Cards ,801 Retail ,726 Mortgage ,351 Other Banorte leasing and factoring ,952 Total loan portfolio $61,383 $54,729 $9,932 $13,926 $238,954

25 24 VALUE Direct economic value created Net sales $50,417 $45,451 Income per products 2,997 2,438 Commissions 10,320 10,515 Sales of assets - - Tax income Total $63,979 $58,940 Distributed economic value Interest expenses $27,789 $22,268 Loan-loss provisions 6,896 8,286 Fees and commissions 1,208 1,338 Advertising and administration expenses 16,687 17,024 Other expenses 1,523 1,566 Taxes 2,765 2,581 Social and community investment - - Total $56,868 $53,063 Retained economic value Million pesos. $7,111 $5,877

26 ETHICS AND GOVERNANCE The responsibility to create working conditions with ethical standards that foster both personal and professional development within and away from the workplace. Internal Social Environment The human factor is the pillar that allows us to achieve our objectives. We therefore foster a harmonious workplace environment, where we can share our values, offering every member of the great Banorte family the best opportunities in the sector and career plans in accordance with his or her needs.

27 26 19,311 employees P$41 million invested in training 365 courses offered for 62% of the employees

28 27 Quality of Life in the Company Our human resources policy is sustained by four comprehensive principles: Culture and values: Employee surveys confirm that it is a source of great pride to work for one of the strongest institutions in Mexico. We reinforce this loyalty to the institution and encourage our employees to give the best of themselves, always in accord with our values and culture. Training and development: We seek at all times to have highly qualified teams, fostering new talent a key aspect of our strategy and implementing development programs based on our people s skills. Skills and benefits: Although we have a highly competitive workforce, we continue to make an effort to achieve internal fairness and foster a performance-based management culture. Organizational optimization: With a view to optimize our performance and the functions that each one of our employees performs, we are constantly analyzing the company s structures, processes, and work responsibilities. Employees by contract type Permanent 19,311 % of employees covered by a collective contract 25%* * Unionized personnel; only at Banorte

29 28 Employment In 2009, GFNorte had a total of 19,311 permanent employees. Some 25% of the personnel consists of unionized Banorte employees who work under a strict collective bargaining contract. Employees by gender 9,744 9,567 F M Employees by Gender In terms of gender, 9,567 of the employees are men and 9,744 are women. A hierarchical breakdown shows that 10% of management positions are occupied by women. At the branch level, this proportion increases, and although it is less at an executive level, we can proudly declare that three of the women with the most prestigious management careers in the Mexican business sector world work with us. Employees by Age In terms of age, 40% of the personnel is less than 30 years old, providing great dynamism in GFNorte s everyday activities, and demonstrating our commitment to Mexico s young people. Employees by age Younger than 30 years old: 7,732 Between 30 and 50 years old: 10,392 Older than 50 years old: 1,187 Employment Indicators At GFNorte we are committed to diversity. Far from incorporating filters in our recruiting process, we seek to be inclusive in hiring personnel, and we are working on a platform to offer more opportunities to various minority groups. Our contact center employs visually impaired persons, who efficiently attend the needs and demands of our clients. In the course of 2009, turnover was 29%, as 4,915 new employees were hired to strengthen our workforce. Employment indicators Total personnel: 19,311 Departing employees: 5,578 New employees: 4,915

30 29 Salaries and Benefits In addition to seeking competitiveness in employment and ensuring equity in the work-place, we remunerate our employees with more attractive salaries and higher benefits than those required by law, including the following: Integral health care. Developed on the basis of contribution reversals to the Instituto Mexicano del Seguro Social (IMSS). Medical services are provided in private health care institutions and extended to the family members of employees. Unlike conventional health insurance, this service has no cost to employees, with expenses being covered entirely by the institution. Profit sharing. We are the company that fully provides this benefit in the banking sector. Vacation pay Annual bonus Life insurance Savings fund Also, we offer our employees a health and wellness package that includes a preventive health program with an emphasis on nutrition and physical exercise. To support this effort, quality has been standardized in GFNorte cafeterias. The cafeteria in the Santa Fe corporate headquarters has been given the Distintivo H rating to certify the hygienic handling of food. Retirement Plans At our retirement plans are based on seniority, salary, and age. We have two different retirement plans, defined benefit plan and the defined contribution plan. The defined benefit plan is divided into two systems: traditional and special. Traditional System The pension is calculated on the basis of the average salary over the last two years of employment, including the annual bonus, and increases each year by the percentage rates determined by defined increases. Life insurance is equivalent to 30 months of pension (providing the employee joined the company prior to December 18th 1984) or 20 months (if employed after December 18th 1984). Funeral expenses are equivalent to 17 months of pension, or forty times the minimum salary in the banking sector, whichever is less.

31 30 Special System The pension is calculated on the basis of average salary over the last 12 months of employment, including the annual bonus, and increases in direct proportion to the stipulated minimum salary growth. Funeral expenses are equivalent to 17 months of pension, or forty times the minimum salary in the banking sector, whichever is less. In the case of the spouse s death, the pensioner receives funeral expenses equivalent to 8.5 months of pension, or twenty times the minimum salary in the banking sector, whichever is less. The defined contribution plan, known as Asegura tu Futuro (Insure Your Future), was instituted in January of It consists of a percentage of individual savings determined by Banorte to constitute an employee s retirement fund for as long as he or she works at the institution. This plan starts with an initial individual contribution equivalent to the past pension benefits accumulated by the employee. The maximum monthly contribution is 10% of an employee s gross salary (5% being contributed by the employee and 5% by the institution). In the case of the defined benefit plan, the amounts are determined by actuarial calculations, whereas in the case of the defined contribution plan, they depend on the contributions of the employee and the institution. At the end of 2009, the defined benefit fund amounted to P$606.4 million and that of the defined contribution plan P$1,140.5 million.

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33 32 Security and Health Security is an issue of great importance to our institution, since we are responsible for the assets of thousands of Mexicans who deposited with us not only their income and savings, but also their trust. GFNorte therefore has highly qualified security personnel. In 2009 there were 121 security people on staff. Our security committees, made up of representatives from different areas of the institution, are responsible for permanent vigilance and for implementing institutional policies in security areas, including both crime prevention and response to natural events with adverse effects. One of the committees works together with the comptroller s office to ensure that business can continue in the event of a natural disaster or other circumstances that may affect a given locality or region. In 2009, in accordance with the stipulations of the Mexican Ministry of Health and the Human Resources Committee of the Asociación de Bancos de México (ABM), we developed a program to face the influenza AH1N1 epidemic. Measures were taken on GFNorte premises all over Mexico and a monitoring program was put in place in branches to follow up on any clients who displayed symptoms of the virus. At the same time, the institution s personnel and their family members were monitored through the intranet for signs of the ailment. The results turned up zero cases of the influenza. Also, in an unprecedented effort to prevent seasonal flu, 70% of the personnel of GFNorte was vaccinated during Labor Relations In order to keep track of labor relations, we depend on two highly reliable sources: An annual survey of organizational climate. The Ethics Point System, whereby complaints or anomalies can be reported anonymously. The results of the organizational climate survey performed in 2009 show that the principal concerns of employees are related to quality of life and institutional recognition. The survey results have led us to implement programs aimed at providing our personnel with performance incentives and creating conditions conducive to more balanced lifestyles, that is, to a better equilibrium between professional and personal development. In order to attend to labor issues as fully as possible, agreements were struck between representatives of GFNorte and Banorte employee union (Sindicato Nacional de Trabajadores de Banorte), whose general secretary is José Carlos Torres García. Other channels to effectively address dissatisfaction and complaints are the Internal Audit Operation Committee and the Integrity Subcommittee.

34 33 A Balanced Lifestyle We are creating programs and fine-tuning institutional policies to foster a proper balance of personal life and work among our employees, through part-time contracts, staggered working hours, and other measures. For retired personnel, an education and development program has been put in place which will include a series of video conferences. Our retired employees, who contributed with their work for so many years to our efforts on behalf of Mexicans, will thus be able to learn more about the new stage of life they are entering and achieve greater well being.

35 34 Training Training at GFNorte is basically divided into three large programs: Entry level training Standardization of skills Development of management skills There is also a program to update knowledge and skills through which employees can keep abreast of fundamental issues in their respective work areas. The training programs offer a large number of classroom and e-learning courses (through the Human Resources intranet) and employees can choose from among different options. In 2009, a total of P$41,794,332 was invested in training, channeled into 365 different courses to the benefit of 61.9% of the institution s personnel. Training is focused on three basic areas: values and/or personal skills, organizational skills, and technical skills. For, value and/or personal skills are particularly important. Apart from being a platform for professional development, they also allow for healthy personal development. Responsible as we are for the management of financial resources, honesty and trust are fundamental values for us, and we seek to inculcate respect for these values in each and every member of the Banorte family. Personnel trained at GFNorte in 2009* Level Number of persons Director 273 Assistant Director 888 Manager 2,135 Non-unionized employee 4,509 11,957 Persons Trained in 2009 Unionized employee 4,152 Total 11,957 * Not including regulatory courses applied across the banking system, that is, those obligatory courses given to certify personnel in the exercise of their functions. Director 273 pers. / 2% Assistant Director 888 pers. / 7% Manager 2,135 pers. / 18% Non-unionized employee 4,509 pers. / 38% Unionized employee 4,152 pers. / 35% * Not including Banorte Generali and Banorte USA training, since these two units have their own training area.

36 35 CAREER PLAN We have initiated a program to identify talent. In this sense, the institution seeks to foster the great potential of our employees, offering them a single career plan in accord with our philosophy and values, which responds at the same time to their professional and personal expectations. Corporate Citizenship Associations We establish links with various associations with a view to enable the exchange of knowledge and skills, determining the needs of our stakeholders, and collaborating actively in the development of the banking sector. The following deserve special mention: Asociación de Bancos de México (ABM) Comisión Nacional Bancaria y de Valores (CNBV) Asociación Mexicana de Intermediarios Bursátiles (AMIB) Asociación Mexicana de Instituciones de Seguros (AMIS) Comisión Nacional del Sistema de Ahorro para el Retiro (CONSAR) Transparency All of the information handled by GFNorte is subject to stipulations by the relevant legislation, including the Law for the Transparency and Order of Financial Services and the Law of Games and Lotteries, as well as the stipulations of the various Mexican regulatory and oversight agencies, including the Comisión para la Defensa de los Usarios de las Instituciones Financieras (Condusef), the Instituto de Protección al Ahorro Bancario (IPAB), the CNBV, the CONSAR, the AMIB, and the AMIS (see above).we make use of a range of channels to communicate with employees, executives, shareholders, and clients: Intranet Brochures Contact center Institutional website Videos shown in branches Customer service in branches

37 36 Ethics In order to strengthen and reinforce its culture of honesty and responsibility, has laid down guidelines in its Conduct Code that must be adhered to by board members, executives, and employees of all of the companies that make up the institution. The Conduct Code has been published to orient the actions of our personnel in the business area and in all of their dealings with clients, suppliers, governmental authorities, and their fellow employees. Our aim is to consolidate our image as a solid, trustworthy institution that conducts itself always within the framework of legality. The principal content of the Conduct Code is based on a pledge to do business in good faith, with absolute honesty and in compliance with the law. The strict observance of this pledge by all members of GFNorte will allow us to continue projecting the image of dynamism, seriousness, and transparency that has distinguished us. As an additional measure, employees may submit anonymous complaints and reports of irregularities and improper conduct through the Ethics Point tool of the intranet.

38 37 Corporate Governance The goal of and its subsidiary companies is to do business in good faith, providing high-quality service to clients, with complete honesty and in strict compliance with the law. We report our financial situation with precision and absolute transparency. In all of these actions, as well as in our relations with clients, suppliers, employees, and members of the communities in which we operate, GFNorte and its subsidiaries always abide strictly by the law and by the regulations of the various authorities that supervise our dealings. Board of Directors The Board of Directors is the highest governance body of, responsible for supervising its activities and determining the measures necessary to ensure sound corporate governance, thereby protecting the interests of shareholders, clients, employees, and suppliers, as well as the communities that we serve. The members of the Board of Directors apply their experience and business vision to handling the affairs of the institution in the best way possible. They are supported in their task by the integrity, honesty, and experience of the executive management of the Group and its subsidiaries, as well as by external consultants and auditors. The members of the board must attend the ordinary and extraordinary board meetings to which they are called. In the event of being appointed to one of the committees of the Board of Directors, they must also participate in the analysis, solution, and follow-up of the issues entrusted to them. Material to be reviewed at the ordinary and extraordinary board meetings is distributed to members at least five days in advance, so that they can examine it beforehand and facilitate the expeditious resolution of matters in the agenda.

39 38 The member s of GFNorte highest governance body may propose matters to be included in the agenda and also propose topics not included in the meeting s agenda but which they consider of sufficient relevance to be addressed at a subsequent meeting. The Board of Directors is comprised of 15 principal members, elected annually by the shareholders assembly. Each principal member has his or her respective alternate member, who may participate with voting rights at the meetings in case the principal member is absent. In general, alternate members are invited to the meetings of the Board of Directors so that they are kept informed firsthand of the development of any affairs of concern to them. The principal members elect the chairperson of the Board of Directors at the shareholders meeting. In the absence of the chairperson, the meetings are presided by his or her alternate member, in whose absence the principal members present designate a member to preside over the meeting. The Board of Directors of Grupo Financiero Banorte is always comprised of a majority of proprietary and independent members. In accordance with the resolution of the shareholders meeting held on 30 April 2009, the members of the Board of Directors of are: PRINCIPAL MEMBERS Don Roberto González Barrera (Presidente) Don Rodolfo Barrera Villarreal (Vicepresidente) Doña Bertha González Moreno Don José G. Garza Montemayor Don David Villarreal Montemayor Doña Magdalena García de Martínez Chavarría Don Francisco Alcalá de León Don Eduardo Livas Cantú Don Eugenio Clariond Reyes-Retana Don Herminio Blanco Mendoza Don Manuel Sescosse Varela Don Manuel Aznar Nicolín Don Jacobo Zaidenweber Cvilich Don Alejandro Valenzuela del Río Don Isaac Hamui Mussali Proprietary Proprietary Proprietary Proprietary Proprietary Proprietary Independent Related Independent Independent Related Independent Independent Related Independent

40 39 ALTERNATE MEMBERS Don Jesús L. Barrera Lozano Don Juan González Moreno Don Javier Martínez ábrego Don Javier Márquez Diez Canedo Don Carlos Chavarría Garza Don Luis Manuel Merino de Villasante Don Alfredo Livas Cantú Don Benjamín Clariond Reyes-Retana Don Simón Nizri Cohen Don Jesús O. Garza Martínez Don César Verdes Quevedo Don Isaac Becker Kabacnick Don Sergio García Robles Gil Doña Patricia Armendáriz Guerra Proprietary Proprietary Proprietary Related Proprietary Independent Related Independent Independent Related Independent Independent Related Independent It is important to emphasize that the ratio of Independent Board Members (41%) considerably surpasses the minimum required by the Stock Market Law (25%). Gradually we intend to have at least half of the Board comprised by Independent Members. Committees assisting the Board of Directors Executive Committee Audit and Corporate Practices Committee Risk Policies Committee

41 40 Principal Committees of GFNorte Operations Committee Technology and Investment Committee Security Committee Central Credit Committee Central Credit Recovery Committee Assets and Liabilities Committee Money Market and Treasury Committee Investment in Financial Instruments Committee Communications and Control Committee Fiduciary Business Committee Investment Projects Committee Integrity Committee As a mechanism of communication with the highest governance body, minority shareholders have available to them both ordinary and extraordinary shareholders meetings. In these they can express their views and concerns and, in accordance with procedure, have them incorporated in the agenda. The Investor Relations Department is the official channel of communications with the Group s minority shareholders. This department maintains permanent contact with other market agents to inform them about the strategies, results, and financial and operating situation of GFNorte. At the same time, senior management meets periodically with minority shareholders to hear their views and recommendations, and thus involve them in strategic decision-making. One of the most important concerns of the minority shareholders is the need for to continue adhering to the labor practices established by the International Labour Organization (ILO), and specifically to continue encouraging labor practices conducive to the elimination of discrimination on the basis of gender, religious convictions, or disabilities. Also, they would like to see the bank inform more proactively concerning the social and environmental actions it undertakes. Other concerns of minority shareholders include related-party loans, dividend policy, and the share composition of the Group.

42 COMMUNITY COMMITMENT The responsibility to support the growth of and to interact with the community, through actions that take into account its interests along with those of the company. EXTERNAL SOCIAL ENVIRONMENT One of our major concerns is the well being of those groups or communities who, for various reasons, find themselves in vulnerable circumstances. Through Fundación Banorte we support a range of organizations dedicated to addressing or mitigating the difficulties faced by these groups.

43 42 P$40 million invested in social projects 537,631 people directly benefited 23,842,620 people benefited indirectly 105 institutions directly supported

44 43 Fundación Banorte The Patronato Banorte, a board of trustees dedicated to philanthropic activities, was constituted in 1991 in accordance with the provisions of the Private Assistance Law of the state of Nuevo León. On 6 April 2005 the Patronato became Fundación Banorte, through which all of GFNorte s social programs are administered. We also raise funds through our Human Resources department to offer support to people in emergency situations owing to natural disasters. Fundación Banorte, made up of a Board headed by the President of GFNorte, is a second-tier institution that supports organizations all across Mexico. Its mission is to assist those in especially vulnerable circumstances. The criterion for supporting a given project, therefore, is whether it is oriented toward needy or highly vulnerable persons or social groups. Fundación Banorte focuses its efforts on the following areas: Health Disaster aid Disabilities Institutional reinforcement Addictions Social assistance Education Human rights Environment In order to carry out its principal objective, which is precisely the support of various projects related to these areas, the Fundación belongs to several umbrella groups and institutions, including the following: Centro Mexicano para la Filantropía (CEMEFI) Association of Healthcare Philanthropy (AHP) Fundación CIE Association of Fundraising Professionals (AFP) Junta de Beneficencia Privada de Nuevo León Hospital Infantil de México

45 44 In several of these associations, the Director of Fundación Banorte participates actively as a board member or consultant. In 2009 he was officially accredited by the CEMEFI as a consultant to civil society organizations. In addition to these functions, the Fundación offers consulting services to social institutions in how to make optimal use of their resources. In 2009 a total of P$40,599,646 was channeled to 99 different institutions, to the direct benefit of 537,631 persons and the indirect benefit of 23,842,620 others. At the same time, six institutions received indirect support from us, mainly through sponsorship programs. Of special note was the exhibition Huellas de la vida (Traces of Life), which was seen by more than 114 million visitors.

46 45 SOME Institutions supported in 2009 Albergue Infantil Los Pinos, A.C. Amiga de la Obrera, A.C. Andares, A.B.P. Angelitos de Cristal, I.A.P. Aprendamos Juntos, A.C. Asociación Cultural y de Cooperación Social Churubusco, A.C. Asociación Juvenil de Ayuda al Niño y al Discapacitado, A.C. Asociación Nacional para la Integración de Ciegos y Débiles Visuales Asociacion de Padres y Compadres, I.A.P. Cáritas de Monterrey, A.C. Casa Yoliguani, I.A.P. Centro de Atención Infantil Piña Palmera, A.C. Centro de Cirugía Especial de México, I.A.P. Centro Mexicano para la Filantropía, A.C. Centro para el Desarrollo del Potencial Humano, A.C. Centro Terapéutico de Apoyo a la Mujer, A.C. Christel House de México, A.C. Cinco Panes y Dos Peces, A.C. Ciudad de los Niños de Monterrey, A.B.P. Comisión Nacional de Cultura Física y Deporte Cooperación y Desarrollo, A.C. Creeser, A.B.P. Cruz Roja Mexicana Desarrollo y Superación, A.C. Destellos de Luz, A.B.P. Drogadictos Anónimos, A.C. Ednica, I.A.P. Escuela para el Entrenamiento de Perros Guía para Ciegos, I.A.P. Fundación de Protección y Asistencia para Ancianas Desvalidas, I.A.P. Fundación Apac, A.C. Fundación Beatriz Beltrones, A.C. Fundación Cie, A.C. Fundación de Reintegración Social del Estado de México, A.C. Fundación Down de la Laguna, A.C. Fundación el Mexicanito, I.A.P. Fundación Juárez Integra, A.C. Fundación para la Protección de la Niñez, I.A.P. Fundación UNAM, A.C. Grupedsac, A.C. Institución Renace, A.B.P. Junta de Asistencia Privada del Estado de Sinaloa Ministerio Vive, A.C. Misión del Nayar, A.B.P. Niños con Ilusión y Esperanza de Vivir Niños en Alegría, A.C. Nutre a un Niño, A.C. Operation Smile México, A.C. Patronato del Museo de San Carlos, A.C. Procura, A.C. Promoción y Acción Comunitaria, I.A.P. Proyecto Tziti u a Mesha Choossio, I.A.P. Quiera, Fundación de la Asociación de Bancos de México, A.C. Viccali, A.C.

47 46 INSTITUTIONAL REINFORCEMENT support Colegio de Bachilleres San Luis Potosí Cruz Roja Mexicana Instituto Municipal de las Mujeres Guadalajara, O.P.D. Municipio de Tlaquepaque, Jalisco Secretaría de Hacienda y Crédito Público Universidad Autónoma de San Luis Potosí Sistema para el Desarrollo Integral de la Familia, Yucatán Sistema para el Desarrollo Integral de la Familia, Tamaulipas Universidad Michoacana de San Nicolás Hidalgo Voluntariado del Poder Judicial, A.C. PROMOTIONAL OR IMAGE SUPPORT Amigos del Desierto de Coahuila, A.C. Asociación Gilberto, A.C. Unidos por Pachuca, A.C. In order to ensure full transparency in the distribution of resources, an annual audit of the Fundación s finances is performed by Gruma and an annual report is submitted to the Private Assistance Council of the state of Nuevo León.

48 47

49 48 Alliances Fundación Banorte has struck alliances with various institutions, including: CEMEFI Procura Junta de Asistencia Privada de Sinaloa Consejo de Desarrollo Social de Nuevo León Desarrollo de Comunidad, A.C. Museo de San Carlos Hospital Infantil de México Federico Gómez Portal de Líderes Sociales del ITESM

50 49 Volunteer Work At we believe that Social Responsibility goes beyond institutional culture and the cultivation of values, and that its benefits should ever more clearly transcend the business sphere. Integration Days is a pilot program of the human resources area that will be replicated in the rest of the Group. The activities of this initiative are proposed by the employees themselves and designed every two months in the following fields: Conservation of natural resources and the environment Sporting and health activities Social Responsibility and contributions to citizenship Culture and art Interested employees join the group of their choice and work in programs that are defined in the course of the two-month period, including the following: Win by Losing (a weight-loss program) Green Office Reforestation program Social Responsibility activities Saving paper and decreasing water consumption are some of the main achievements.

51 50 CULTURE AND ART Sponsorship of Cultural Events We are interested in contributing to the promotion of art and culture through our sponsorship of a range of events. In order to make it possible for more and more Mexicans to enjoy the presence of personalities with international stature, we sponsored three important concerts in different states in 2009: two by Plácido Domingo, in Zacatecas and Tamaulipas, and one by Sarah Brightman in Yucatán. The total amount of our contribution was P$14 million. Support for Mexican Cinema We contribute to the development of the Mexican cinema by channeling resources into the production of films and documentaries on issues of Social Responsibility. In 2009 P$8 million was contributed to the production of Misión Cumplida (Mission Accomplished). We have a growing interest in projects of this kind and expect to continue offering our support through 2010.

52 ENVIRONMENTAL RESPONSIBILITY The responsibility to act with awareness of the environment, conserving the resources used by the company and undertaking actions that generate environmental awareness in society. Ecological Impact Maintaining a harmonious relationship with the environment is one of the principles that govern our activities. We therefore make rational use of resources and work to foster a culture of care and respect for our natural surroundings.

53 52 12% in energy savings 714-ton reduction of carbon dioxide emissions 678 tons of paper recycled, for savings of P$863,735

54 53 Energy The Department of Projects and Maintenance has implemented the Integral Energy Control System (IECS), whereby we have not only succeeded in significantly reducing electricity consumption but also learned to make a more rational use of this important resource. The IESC identified the following windows of opportunity: Implementation of an automatic electrical current control system (lighting, illuminated signs, air conditioning) within the control platform, as part of the Digital Security program. Replacement of the air conditioning equipment in order to improve both efficiency, through new technology, and the general condition of the infrastructure. Thanks to the implementation of these measures, both peak hour and non-working hour energy consumption was reduced. The correction of the potency factor has also been performed since The group s thermal infrastructure has been undergoing renovation since 2004, with the replacement of obsolete equipment and infrastructure in deteriorated condition. As a result of this process, we have achieved average energy savings of 12%. It is important to note that these actions have in no way affected the operation of our buildings or what is still more important the comfort and convenience of our customers. On the contrary, we have been able to offer more comfortable spaces and at the same time contribute to the improvement of the environment in Mexico.

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57 56 Summary of Savings (Automatic System to Control Workloads) Year of Project Savings (kw/hr) Savings $ Tons of CO 2 Not Emitted , , ,393,398 2,543, ,646,506 4,430,793 1,853 Total 4,895,368 $7,834,738 3,427 Summary of Savings (Air Conditioning) Year of Project Savings (kw/hr) Savings $ Tons of CO 2 Not Emitted ,333,228 3,383,181 1, , , , , ,421,696 3,511,460 1, ,185,686 3,169,245 1, ,020,703 1,480, Total 8,525,260 $12,361,626 5,967 The % savings has been calculated by averaging the percentage of savings in pesos and of energy (kw-hrs consumed).

58 57 Emissions As a result of the measures implemented to significantly reduce energy consumption, we also reduced the emission of greenhouse gases, specifically CO 2, by 9,467 tons. PapeR One of the measures we have implemented to reduce paper consumption is the Paperless program, which seeks to promote a new awareness among both customers and employees of the excessive use of paper, while at the same time encouraging greater confidence in electronic systems. The paper we do purchase is recycled stock and all the paper used is sold for further recycling. Education and Training Green Office is the name of an initiative aimed at the conservation of our natural resources. Every week, GFNorte employees receive an electronic postcard containing some ecological suggestions on matters such as energy, water, and paper saving, among others. At the end of the pilot project, which lasted two months, savings of P$16,500 were reported. Video Conference System The implementation of a video conference system has been another significant action to generate reductions in the consumption of resources and at the same time increase productivity. GFNorte ranks second among Mexican companies in video conference infrastructure, not only in number of rooms but also in terms of the efficiency and innovation of its system. This is reflected also in reductions of CO 2 emissions, as the need for trips to different locations has diminished considerably.

59 Video Conference System January - April Number of rooms 46 Video conferences per month > 976 Video conferences per day >48 Links between more than two rooms 69% Links from 7:00 to 9:00 a.m. >19 Savings in travel expenses (monthly average) > $6,360,000 Links per month 20,000-15,000-10,000-5,000 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Links per DAY Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Estimated SAVINGS Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Million pesos

60 59 MARKETING WITH A SOCIAL VISION As a 100% Mexican company, we better understand the needs of the country and its population. s raison d être is to support and stand by the Mexican people. This is our essence: it is what Banorte lives for. As a result, all of our products seek to give value and tangible benefits to our clients. We aspire to be the most competitive option, to be the bank that offers the best terms. Our principal responsibility resides in seeking benefits and attributes that will translate into solutions, and so represent the best alternative for our clients. For years now a fundamental part of the philosophy of has consisted of maintaining direct and open communication with clients, transmitting messages without hidden conditions and above all, seek at all times the benefit of Mexico and Mexicans. This commitment to service is part of Banorte s mission, and the foundation of communications in the Banorte Tone.

61 60 In order to maintain a consistent image and message, we follow the guidelines laid down in our Manual of Corporate Identity in all of our advertising and other communication efforts. As for communication within the limits of our institution, we want our employees to share our sense of pride and at the same time to know and understand the particular characteristics of each one of our products and services. Once these have been clearly defined, we carry out studies among our employees to find out their opinions. They must be the first ones, after all, to be convinced of the quality of the product or service in question and of its suitability in meeting the needs of Mexicans. In order to guarantee the quality of our norms and standards and to monitor adherence to them, every week we perform audits focused on evaluating attention, response times, and intramural communication. And in order to keep improving every day, we are committed to incorporating what we learn into our norms and policies. In the case of external communications, all of s information adheres strictly to the stipulations of relevant legislation, including the Law for the Transparency and Order of Financial Services and the Law of Games and Lotteries, and of the various Mexican regulatory and oversight agencies, including Condusef, IPAB, the CNBV, the CONSAR, the AMIB, and the AMIS.

62 61 Mujer Banorte Our campaigns also have a social touch. For example, we were the first to offer unemployment insurance as part of our mortgage loans, and we launched Mujer Banorte, the first Mexican banking product to be developed exclusively for women. In 2004 Banorte identified the specific needs of Mexican women, who nowadays demand a balance between their family lives and their professional development. They are looking not only for financial services but also for personalized attention and guidance. With this in mind, we created Mujer Banorte, the first portfolio of financial solutions designed specifically for women, consisting of an integral package of financial products and a series of services and benefits unique in the Mexican market. We have also lent a hand to Mexicans in the difficult economic circumstances that the country has gone through. In 2009 we carried out the following campaigns: Tarjeta de Crédito Crédito Agropecuario Enlace Express PyMES Institucional Como un Mexicano no hay Dos Institucional Influenza Institucional Apoyo a Tabasco, Veracruz, Mexicali Institucional Apoyo a Haití Institucional INEGI Institucional Bécalos

63 62 DIALOGUE WITH STAKEHOLDERS We give attention to our stakeholders through various channels of communication and we incorporate their expectations and demands into our plans and projects. At we define our stakeholders in terms of the following diagram: Employees CLIENTs Community Shareholders Government STAKEHOLDERS We carry out various actions to define our stakeholders and establish a range of channels to maintain constant communication with them. In order to detect the needs of clients and address them efficiently, we make use of various channels: branches, automatic teller machines, sales point terminals, contact centers, Internet, cellular telephones, and the bank s own client relations administration systems. We also perform market surveys periodically and every six months carry out a client satisfaction study. It is important to note that in the area of casualty insurance, this study is carried out permanently. It involves exit surveys applied at each stage of the attention given to the matter and at the end of the process. The methodology used in the biannual study involves the following: Gathering of data from at least eight locations, with a statistically representative sampling of no less than 300 surveys per location. A measurement scale of 1 to 7 in order to limit courtesy bias. Development of analytic tests to determine the principal elements of client satisfaction.

64 63 Mechanisms whereby clients can make their own views known. Telephone lines, electronic mail, and customer attention in branches. Based on various image studies carried out during 2009 and the tracking of bank advertising developed by the ABM, the Banorte brand ranks third in terms of being recommendable, reliable, and recognizable. Attention to the concerns of our own employees is given through the human resources department, the intranet, and training programs, as well as by other means. In order to detect windows of opportunity with regard to this group of our stakeholders, we also perform organizational climate and compensation surveys. Contact with shareholders is through share purchases on the stock exchange, shareholder identification studies, and targeting strategies. In order to give due attention to shareholders we carry out road shows, periodical investment conferences, telephone conferences, and one-on-one meetings. AWARDS AND DISTINCTIONS Best Bank of the Year 2009, ACQ Finance. The Bank of the Year in Mexico 2009, awarded by the British specialty magazine The Banker. Best Structured Financing in America: Sonora also granted by the Banker magazine. Best Financial Group in Mexico 2009, granted by World Finance. Silver Effie for the Ya Bájale campaign.

65 64 Results of the independent review of the Report Making Mexico Stronger: of. The Scope of Our Work This independent verification consists of a review of the contents and performance indicators presented in the Report Making Mexico Stronger: of. Our review is based on International Standard on Assurance Engagements 3000 (ISAE 3000) and the methodology of the Global Reporting Initiative 3.0 for sustainability reports (GRI G3). Verification Process The responsibility of Redes Sociales LT, S.A. de C.V. has been to review the contents of the document, to which end we conducted interviews with members of the different departments of the Institution that participated in preparing Making Mexico Stronger:. Various kinds of analytic procedures and sample testing, described below, were also performed: Analysis of information-gathering and validation processes. Verification of the principal indicators contained in the report. Meetings with personnel responsible for preparing the report, with a view to understanding the principles, business model, sustainability model, working methods, and management of programs related to sustainability. Verification of quantitative and qualitative information based on a selection of GRI indicators. Conclusions Based on our review, we are aware of no aspect that leads us to believe that: Making Mexico Stronger: has not been prepared in accordance with the Guidelines of the Global Reporting Initiative 3.0 for sustainability reports (GRI G3). The information included in this report, relative to the indicators reviewed and the sustainability processes and actions of the institution, contains significant errors. The review process demonstrates that in this report presents the performance indicators selected for verification in a balanced and appropriate manner. Making Mexico Stronger: of was prepared in accordance with Guidelines of the Global Reporting Initiative version 3.0 for sustainability reports (GRI G3), with a level of application of B+. Recommendations As a result of our review, we make the following recommendations: Develop a sustainability model. Include a deeper explanation of actions impact. Define new projects and actions accorded to business plan. Include more comparison numbers to exemplify tendencies. Develop sustainability criteria for the institution and supply chain. Andrea Morales Morales Redes Sociales

66 65 Glossary of Terms ABM Asociación de Bancos de México. AFP Association of Fundraising Professionals. AHP Association of Healthcare Philanthropy. AMIB Asociación Mexicana de Intermediarios Bursátiles. AMIS Asociación Mexicana de Instituciones de Seguros. Basel Accords The Basic Principles of Efficient Banking Supervision, developed by the Basel Banking Supervision Committee, are the standard for the proper regulation and prudential supervision of banks. Capitalization Ratio Proportion of long-term debt to total long-term financing, determined by dividing long-term liabilities by the sum of these same liabilities plus equity. Carbon Footprint Measurement of an organization s claim to environmental responsibility. It seeks to quantify greenhouse gas emissions, measured in the equivalent of CO 2 emissions, released into the atmosphere by the daily activities of an institution or the commercialization of a product. CEMEFI Centro Mexicano para la Filantropía. CNBV Comisión Nacional Bancaria y de Valores. Condusef Comisión Nacional para la Defensa de los Usuarios de las Instituciones Financieras. CONSAR Comisión Nacional del Sistema de Ahorro para el Retiro. Customer Relationship Management (CRM) Management model based on client orientation.

67 66 Distintivo H Distinction granted by the Mexican Ministry of Tourism (SECTUR) to food and beverage suppliers that maintain high standards of hygiene and meet the requirements established by the Mexican norm NMX-F-605-NORMEX-2004 which regulates hygienic handling of food. Equator Principles A series of guidelines voluntarily adopted in accord with the policies of the International Finance Corporation to ensure that social and environmental factors are given due weight in the process of financing an institution s projects. Ethics Point System A system that allows an institution s employees to communicate with management safely and honestly, and at the same time anonymously and confidentially, about problems or concerns related to unethical or illegal conduct. Global Compact An initiative proposed by the United Nations in the aim of obtaining from entities a voluntary commitment in social responsibility through the implementation of 10 basic principles in the areas of human rights, labor rights, environmental protection, and the fight against corruption. GRI Global Reporting Initiative, created in 1997 with the mission of improving the quality, rigor, and utility of sustainability reports based on the implementation of a triple equilibrium: economic, social, and environmental. IFC International Finance Corporation. ILO International Labour Organization. IPAB Instituto de Protección al Ahorro Bancario.

68 67 As Mexico s leading bank, we are committed to the sustainable development of our country and support a wide range of initiatives undertaken on behalf of wellbeing and in response to our stakeholders, by means of four pillars; Environmental Responsibility, Community Commitment, equality and Governance, and Value Chain. Through the formation of a Social Responsibility Committee we have consolidated ourselves as a sustainable institution. Making Mexico Stronger

69 GRI Index Indicator Description Page STRATEGY AND ANALYSIS 1.1 Statement from the most senior decision-maker of the organization Description of key impacts, risks, and opportunities 9-10 ORGANIZATIONAL PROFILE 2.1 Name of the organization Primary brands, products, and/or services Operational structure of the organization Location of the organization s headquarters Number of countries where the organization operates Nature of ownership and legal form Markets served (including geographic breakdown, sectors served, and types of 3 customers/beneficiaries) 2.8 Scale of reporting organization Significant changes during the reporting period Awards received in the reporting period 63 REPORT PARAMETERS Report Profile 3.1 Reporting period for information provided Date of most recent previous report NA 3.3 Reporting cycle Contact point for questions regarding the report or its contents 71 Report Scope and Boundary 3.5 Process for defining report content Boundary of the report State any specific limitations on the scope or boundary of the report Basis for reporting on joint ventures Data measurement techniques and the bases of calculations Explanation of the effect of any restatements of information provided in earlier reports NA GRI Contents Index 3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement NA methods applied in the report 3.12 Table identifying the location of the standard disclosures in the report Assurance 3.13 Policy and current practice with regard to seeking external assurance for the report 64 GOVERNANCE 4.1 Governance structure of the organization Chair of the highest governance body Number of members of the highest governance body Mechanisms for shareholders and employees to provide recommendations or direction to the 40 highest governance body 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided Qualifications and expertise of the members of the highest governance body Internally developed statements of mission or values, codes of conduct, and principles relevant to sustainability Procedures of the highest governance body for overseeing the organization s sustainability performance Processes for evaluating the highest governance body s own performance with respect to sustainability 9-10 Commitments to External Initiatives 4.11 Precautionary approach or principle Externally developed economic, environmental, and social charters, principles, or other initiatives Memberships in associations and degree of involvement 35 68

70 GRI Index Indicator Description Page Stakeholder Engagement 4.14 List of stakeholder groups engaged by the organization Basis for identification and selection of stakeholders with whom to engage Approaches to stakeholder engagement Key topics and concerns that have been raised through stakeholder engagement ECONOMIC PERFORMANCE EC1 Direct economic value generated and distributed 24 EC2 Financial implications and other risks and opportunities for the 13 organization s activities due to climate change EC3 Coverage of the organization s defined benefit plan obligations Market Presence EC7 Procedures for local hiring and proportion of senior management hired from the local community 28 Indirect Economic Impacts EC8 Development and impact of infrastructure investments and services provided for public benefit 23 EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts 23 ENVIRONMENTAL PERFORMANCE Energy EN3 Direct energy consumption by primary energy source EN5 Energy saved due to conservation and efficiency improvements EN6 Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives EN7 Initiatives to reduce indirect energy consumption and reductions achieved Emissions EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved SOCIETY PERFORMANCE Employment LA1 Total workforce by employment type, employment contract, and region 28 LA2 Total number and rate of employee turnover by age group, gender, and region 28 LA3 Benefits provided to full-time employees that are not provided to temporary or part-time 29 employees, by major operations Labor/Management Relations LA4 Percentage of employees covered by collective bargaining agreements 27 Occupational Health and Safety LA6 Percentage of total workforce represented in formal joint management-worker health and 32 safety committees that help monitor and advise on occupational health and safety programs Training and Education LA10 Average hours of training per year per employee by employee category 34 LA11 Programs for skills management and lifelong learning that support the continued employability 34 of employees and assist them in managing career endings Human Rights HR4 Total number of incidents of discrimination and actions taken 36 Community SO8 Monetary value of significant fines and total number of non-monetary sanctions for 60 non-compliance with laws and regulations Customer Health and Safety PR1 Life cycle stages in which health and safety impacts of products and services are assessed 16 for improvement, and percentage of significant products and services categories subject to such procedures Product and Service Labeling PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction 69

71 70 ABOUT THIS REPORT This report deals with the results of actions carried out in the area of social responsibility by in 2009 and has been drawn up in accordance with the methodology of the Global Reporting Initiative 3.0 for sustainability reports (GRI G3). The reporting cycle is annual. In order to determine the contents of this report, information was gathered on relevant actions undertaken during 2009 and interviews were conducted with personnel from various departments of GFNorte. McBride Sustainability assisted with the selection and analysis of data and the methodology employed. Design: Creative Direction: María Perazzo Graphic Design: Arnau Dot Sayós Editorial Coordination: Ivonne Cornejo Niño, María Graciela González Guillén, Liliana Peña Cavazos y Asunción Pineda Zapata.

72 71 México, D.F. Prolongación Reforma 1230 Col. Cruz Manca Santa Fe, CP Monterrey, N.L. Revolución 3000 Col. Primavera, CP