Banco del Bajío, S.A., Institución de Banca Múltiple (BBAJIOO) Earnings Call Transcript & Summary

Good morning, everyone and welcome to Banco del Bajío's Fourth Quarter 2024 Results Conference Call. My name is Luke, and I will be your operator today. [Operator Instructions] Before we begin the call today, I would like to remind you that forward-looking statements made during today's conference call do not account for future economic circumstances, industry conditions, company performance and financial results. These statements are subject to a number of risks and uncertainties. Joining us today from BanBajío is Mr. Carlos De la Cerda, Executive Vice Chairman of the Board of Directors; Mr. Edgardo del Rincon, Chief Executive Officer; Mr. Joaquin Dominguez, Chief Financial Officer; and Mr. Luis Quiroz, Investor Relations Officer. As a reminder, this video conference is being recorded. For opening remarks and introductions, I would now like to turn the call over to Mr. Luis Quiroz. Mr. Quiroz, you may begin.

Good morning to everyone, and welcome to BanBajío's conference call for the fourth quarter of 2024. On this conference call, we will talk about the quarterly results as well as the full year 2024 results. We will highlight the evolution of the main trends and introduce the guidance for 2025. All the information used throughout the presentation about the industry is from CNBV data as of November, which is the most recent publicly available information. Without any further ado, let us start the presentation. On Slide 3, we would like to briefly describe some key ratios recorded in the year and the quarter. First off, the quarterly net income was MXN 2.54 billion. The full year result was MXN 10.7 billion, representing a mild contraction of 2.9% against 2023. The ROE stood strong at 22.9% for the quarter. Revenues accounted for MXN 6.4 billion in the quarter and MXN 26 billion for the full year, increasing by 4.5% against 2023. The NIM was 6.7% in the quarter. The efficiency ratio stood at 39.2% in the fourth quarter and at 35.3% for the whole year. The loan portfolio expanded by 10.9%, with company loans expanding by 13.8% underlying sound origination trends in the quarter. Total deposits grew by 6.6%. Regarding the asset quality, the NPL ratio stood at 1.48% and the coverage ratio at 1.4x. The preliminary capitalization ratio stood at 15.2%, increasing sequentially due to healthy earnings accumulation and despite the strong portfolio growth quarter-over-quarter. In Slide 4, we can observe the 2024 result against the guidance. As shown in the table, BanBajío met most of its targets. The ROE stood at 24.5% as net income was MXN 10.7 billion. The NIM stood at 6.76%, while expenses grew less than expected at 12.4%, resulting in an efficiency of 35.3%. On the asset quality side, cost of risk stood in a higher part of guidance at 89 basis points, while the NPL and the coverage ratio remain well behaved. The loan portfolio grew in line with guidance at double digits, while deposit growth was below guidance, yet the liquidity of the bank remains strong. We are very proud of the track record of BanBajío since the IPO of delivering on the guidance it provides to the market, contributing to both the credibility and the transparency of the management team with its current and potential shareholders. On Slide 5, we would like to emphasize some key indicators from our digital transformation strategy. In this slide, you can observe the evolution of the transactions at BanBajío. In the chart above, you can see the number of transactions on the different channels. Observe how in 2019, we had more transactions done in branches than in digital channels and how it has evolved, with branches even decreasing in absolute terms compared to 5 years ago and how, on the other hand, digital transactions have increased exponentially. The chart below paints a similar picture, but with amounts transacted on each channel. Bajionet has grown at an impressive compound rate of 27% over the past 5 years compared to 5% in branches and 6% at ATMs. Moreover, Bajionet now accounts for 81% of the amounts transacted at BanBajío compared to 64% in 2019. On to Slide 6. We delve more into how our clients are transacting with the bank. You can see on the upper-left chart that around 60% of the number of transactions are made by companies while individuals make around 40%. However, the growth in individuals have been not working with a compounded growth rate of 50% over the past 3 years. The graph on the upper-right show the amounts transacted. Here, you can observe that most of the amounts transacted in the bank are done by companies, both corporates and SMEs, showing a compounded growth of 35%. Moreover, the graph on the bottom show the number of transactions and the average amount transacted by corporates digitally. Here, you can see that over the past 3 years, average transactions by companies have increased by 50%, while the average amount transacted double. The increase in volumes and transactions made through our channels are a reflection that clients rely more on BanBajío for their cash management which, in turn, translate into more inexpensive deposits and noninterest income. In Slide 7, the total loan portfolio reached MXN 266 billion an increase of 10.9% compared to the fourth quarter of 2023 and 4.5% sequentially quarter-over-quarter. This quarter, we continue to see good trends in company and consumer loans, while we saw contractions in mortgages and government loans. It is worth mentioning that this evolution continues to be supportive of the yield of the portfolio as the bank is growing in segments with better margins. For 2025, we see modest deceleration in the rate of growth of the portfolio, consistent with the expectation of softer economic growth for the year. Total deposits stood at MXN 247 billion, an increase of 6.6% compared to the fourth quarter of 2023. During this quarter, we saw good growth in customer deposits. However, the comparison base of December of 2023 was hard to beat. We are going to provide more detail about the funding structure and its trends in Slide 10. On Slide 8, we can observe the evolution of our consumer loan portfolio, which now accounts for MXN 7.1 billion, and it is growing by 21.8% against the fourth quarter of 2023. As we have mentioned in previous quarters, we see the consumer loan portfolio as a strategic asset to diversify our business. We have managed to grow these portfolios with a remarkable asset quality, better than industry standards as shown in the charts with the NPL ratios of payroll loans and credit cards at 2.75% and personal loans at 1.57%. For 2025, it is reasonable to expect a moderation in the rate of growth of these portfolios. However, they will surely continue to expand faster than the rest of the portfolio. In Slide 9, we would like to highlight BanBajío's asset quality. As you can see on the upper chart, our NPL ratio stands at 1.48% while our NPL adjusted stands at 2.52%. Both ratios compare far better than the industry standard. The chart on the bottom-right shows the evolution of the cost of risk, which stood at 89 basis points for the quarter and the whole year 2024, reaching the higher part of guidance and still standing among the best in the local banking system. The coverage ratio remains strong at 1.4x. Even though that we have done a cleanup in the balance sheet over the last 2 quarters, we continue to hold $740 million of additional reserves in the balance sheet. For 2025, given the expectation of a softer economic environment, we expect the cost of risk to remain similar to last year, with a guidance of 80 basis points to 100 basis points. Moving on to Slide 10. Total funding stood at MXN 307 billion, an increase of 5.2% compared to the fourth quarter of 2023. During this last quarter, we saw a good inflow of deposits, especially from demand deposits, which grew 3.1% sequentially. The funding mix has remained stable over the past quarter with zero-cost demand deposits at 20%, interest-bearing demand deposits at 19%, time deposits at 41% and institutional funding at 19%. For 2025, we are confident that the bank will continue growing deposits from our customers at a similar pace than the loan portfolio. We are going to receive the benefit of new branch openings and new incentives are being set to further motivate bankers. On Slide 11, we can observe the evolution of our margins. The NIM for the fourth quarter was 6.7%, contracting by 69 basis points year-on-year. The year-on-year contraction comes as a result of: the sensitivity to rates accounted for 25 basis points of the reduction; a negative impact to the mix, which accounted for 16 basis points; and the normalization of the one-off effect in the fourth quarter of 2023 that accounted for 28 basis points. We estimate our [ Exantas ] sensitivity to rates considering the current mix of assets and liabilities to be around 23 basis points of NIM per every 100 basis point change in the benchmark rate, which will represent an impact of around MXN 775 million of revenues and MXN 488 million of net income for a full year. The sensitivity increased against the previous quarter because of the strong sequential growth in zero-cost deposits. For 2025, we are forecasting a rate path that is more conservative than the current market consensus. We estimate that the year-end rate will be at 8.25%, and we have 1 scenario with more aggressive cuts in the first half. Those 2 scenarios result in an average Banxico rate between 8.95% and 9.15%. Bearing that in mind, we estimate that the NIM for 2025 will be between 6.2% and 6.3%. In Slide 12, you will see the performance of BanBajío's revenues, which grew 4.5% for the whole year against 2023. Financial margin expanded by 2.9%, while noninterest income increased by 17.5%. Fee plus trading income grew strongly in 2024 at 18.1%. The bank continues to make important progress in businesses like interexchange fees, POS fees, FX trading, bancassurance and trusts. For 2025, we expect noninterest income to maintain a sound performance. However, the comparison base will be affected by the sale of assets that added up to MXN 426 million in 2024. Bearing this in mind, the guidance for fee plus trading income in 2025 is 3% to 5%. Adjusted by the equity sales, the comparable growth will be from 15% to 18%. Moving on to Slide 13. We can see the performance of our efficiency ratio. It came in at 35.3% for the whole year and at 39.2% for the fourth quarter of 2024. Both ratios stand strong against the industry's efficiency ratios. For the whole year 2024, expenses grew below the guidance at 12.4%. For 2025, we expect expense growth to decelerate, with the guidance from 10% to 12%. Past and current investments in our digital capabilities, new bankers and branch openings are still maintaining OpEx growth above inflation in 2025. However, it will continue to normalize in coming years. On Slide 14, you will see the evolution of the profitability metrics of BanBajío. As shown in the chart, the quarterly ROA stood at 2.9% and the quarterly ROE at 22.9%. On a per share basis, the fourth quarter EPS stood at MXN 2.13, which represents an annualized earning yield of 19.7%, computed with the average stock price for the fourth quarter. In Slide 15, we can see the preliminary capitalization ratio as of December of 2024 of 15.21%, of which almost all is core Tier 1 capital. The capitalization level increased compared to the previous quarter as a consequence of healthy earnings accumulation and even with the strong sequential portfolio growth. Lastly, on Slide 16, we introduce the guidance for 2025. The macroeconomic assumptions used are the following: average Banxico rate between 8.95% and 9.15%, which is a more conservative forecast than the current market consensus; GDP growth of 1%; and inflation rate, around 4%. We are forecasting loan growth to be from 8% to 11%; deposits growth from 9% to 11%; net interest margin from 6.2% to 6.3%; fees and trading income growing from 3% to 5%, which is 15% to 18% excluding one-timers; expenses growing from 10% to 12%; and the efficiency ratio between 39% and 41%; cost of risk, from 80 basis points to 100 basis points; while maintaining a coverage ratio above 1.2x and NPLs below 1.6%; net income from MXN 9.3 billion to MXN 9.8 billion; and an ROE from 19.5% to 21% with a capitalization ratio above 14%. In summary, the fourth quarter and the full year results reinstated some fundamentals for the bank and a solid balance sheet. We are pleased to announce that we have met most of our targets for last year, and we maintain our compromise to deliver on the guidance that we provide for 2025. With this, I conclude the presentation and we can open the call to the Q&A session.

[Operator Instructions] Our first question comes from the line of Brian Flores.

I'm from Citibank. Two questions here, Carlos De la Cerda and Joaquin. The first one is on cost of risk because we saw last year, you revised it upwards, and it showed some pressure maybe on the asset quality. So just wanted to ask you, I mean we have 1 month of 2025 already here. Can you expand a bit on how are you seeing the health of your clients activity? I'm wondering if this is perhaps the point where we could have some upside risks, meaning we see maybe the cost of risk going a bit higher in 2025. And I'll ask my second question later. [Technical Difficulty]

Hello, can you listen to me?

Yes, now we can.

Okay. Sorry for this. I was mentioning that in the fourth quarter, we saw a normalization in cost of risk, concluding that year at 89 basis points. And for 2025, our guidance is between 80 basis points to 100 basis points. This is one of the best levels for the market. Despite these challenges, we continue to demonstrate better proposed asset quality. And as you know, we have very high levels of collaterals and guarantees from development banks and funds. Of course, we want to improve last year's result, but we think that with all the uncertainty today, this level is realistic. We continue to have one of the best levels of cost of risk. And of course, asset quality is a strategic objective for the bank. So this is -- I mean, we are going to see during the first months of '25 the behavior -- the payment behavior for customers and let's hope that we can improve last year's performance.

Perfect. Super clear. And then my second question is on capital because as you mentioned in your presentation, you have been accumulating capital, paying very solid dividends. So do you think maybe should we see a similar level in terms of dividends, even if the midpoint of guidance suggests an 11% decrease in earnings year-over-year? And also, in that sense, would any buybacks or extraordinary dividends would be considered? And then maybe just to summarize everything here. I know your ROE is coming down, but can you remind us of the normalized levels of ROE that we should see for the bank? I think that would be very much appreciated.

Brian, this is Carlos De la Cerda. In terms of dividends, we -- our thoughts today is that by the shareholders' next meeting, we will propose between 50% and 60% dividend payout. It will depend on the loan demand that we see in the first Q and also in any externality that could affect negatively the economy of the country and the systemic risk. But as of today, that's what we think, between 50% and 60% dividend payout. I'm going to turn the microphone to Edgardo for the ROE part of the question.

Yes, we think, Brian, the ROE in a normalized situation, let's say, 7% rate, with, I don't know, levels of inflation similar to the ones we have today and capitalization ratio of 14%, which should be in high teens for ROE. In efficiency, we think that we can continue with between 40% to 45% at those levels of rates in a normal situation. That is still a very good level of efficiency for the bank, low 40s.

Our next question comes from the line of Ricardo Buchpiguel.

This is Ricardo from BTG Pactual. I have two here on my side. So first, in the past months, we saw that sell-off of Mexican assets, which basically reflects investors' lower appetite to invest in the region after the Mexican -- the U.S. election. So I wanted to hear what are you seeing. If you're seeing something similar happening as well with companies' appetite to invest in our business, which would reflect in lower loan demand? And for my second question, in the guidance, as you're assuming loan growth should accelerate, I wanted to understand a bit more the rationale for why fees and trade income would accelerate when we exclude the benefit from the asset sales, right? As you mentioned in the call, will imply a 15% to 18% growth on a recurring basis?

Thank you, Ricardo. Regarding loan growth, in 2024, as you saw in the presentation, our commercial loan portfolio grew by MXN 25.6 billion year-over-year. It's important to mention that from that growth, 740 new clients in credit accounted for 63% of this growth, contributing with MXN 16.2 billion. If we see this by sector, and like we're then talking about the appetite and loan demand, the agri business grew 11% during the year with 35 of this increase is driven by new clients; financial institutions declined by 2%, and this is a decision that we made to be more prudent in approving credit lines for this sector. Government lending, as you saw, we are seeing a decrease, and this is also a decision because our focus is in profitability. And today, the margins in these sectors are very, very small. Corporate lending grew 15%, with 61% of this increase coming with new clients. And with this corporate lending by sector, let's say, wholesale, wholesale, we grew 20%; in retail, we grew 20%; and in construction, we have mixed results, industrial building, growing 23% and housing declining 21%. So that the whole sector of construction, we grew 1%. And lastly, manufacturing, we grew 15%, and this explains 19% of the total growth in commercial loans. So we -- and we saw very good loan demand during the third and fourth quarter, and we were able to grow very well and be within the guidance. So we decided to guide 8% to 11% because of the forecast of GDP as we -- I mean, we are expecting 1% GDP growth, so we think it's realistic to think at this level of growth a little bit below 2024. Regarding noninterest income, we are guiding fees and trading growing 15% to 18%, without considering the one-timer that we had last year. During that last year, we decided to sell stocks from Visa and Mastercard that we had in the balance sheet. And that accounts for a little bit more than MXN 400 million revenue, let's say, noninterest income during 2024. So that's why we're guiding 3% to 5%. But in reality, without that one-timer we are talking about 15% to 18% that we think is a very healthy level of growth.

And just a follow-up here. You mentioned in the previous questions, uncertainty regarding the market, which could affect NPLs. In this regard, what do you believe is the main event or variable to look at? Would it be a potential evolution in the discussion with Trump and increase in tariff? Is mainly GDP growth that would be a variable to look at for asset quality and NPLs? What would be the main uncertainty regarding the asset quality equation?

It's really all the uncertainty that we see. Domestic and internationally, everything that is happening today. That could impact, of course, the payment behavior in different sectors. Of course, the possibility of new tariffs is something that we are considering and that could impact a few of the sectors and some clients of BanBajío, of course. So what we are guiding and we believe is very realistic is that NPLs should remain similar to the ones we have at the end of 2024. We're guiding less than 1.6% and cost of risk in the midpoint is 0.9%. That is the same level that we have in 2024. So we are guiding this. We think it's realistic. But of course, we will monitor anything that could impact the economy, different sectors of the economy and at the end, our clients.

Our next question comes from the line of Ernesto Gabilondo.

Thank you. Ernesto Gabilondo from Bank of America. My first question will be on your earnings expectations for '25. So we noticed that you are guiding important earnings contraction for the year. You mentioned that this could be explained because of the expectations that the Central Bank would probably cut more in the first half or the costs to happen in the first half and then to be at that level in the second half. So I believe this scenario seems reasonable from what I also have been hearing from Central Bank members. But also, I would like to hear your view on what are you hearing on this on the movement from interest rates? And then my second question is on development banks and guarantees from NAFIN and FIRA. Can you remind us how much of Bajío's portfolio is backed by those type of guarantees? We detect the new government wants to originate more loans to the SME segment by using the balance sheets of the development banks directly. So just wondering if there could be like any risk on loan growth because of potentially tougher competition from the development banks? Any color on this would be very helpful.

Our interest rate assumption in the plan is a little bit more conservative compared with the market consensus, mainly because we include a 50 basis points cut in February. That will have an impact almost the entire year. At the same time, we felt it was prudent to moderate asset growth expectations considering the GDP forecast for Mexico, as I mentioned. However, credit demand remained strong during the third quarter and fourth quarter. So it was actually a very good positive momentum. We will monitor closely the economy, the rates and loan demand through the year. And we are going to continue being flexible to adjust our strategy if we need. So just if rates behave with lower -- I mean, with less costs, that would have a positive impact in the earnings during 2025. Regarding development banks, we don't feel that we can have competition directly with SMEs. I mean you have -- you need all the distribution that we have in banks. I mean, salespeople, et cetera. We feel that is going to be very difficult to have a direct competition. We feel that we will continue acting together with development banks in the market, especially in the SME sector. For the levels of collaterals and in the portfolio, Luis will continue with that question.

Ernesto, yes, considering what we have as collateral for NAFIN, Bancomext and FIRA, it is around a little less than 10% of the portfolio. But yes, again, as Edgardo mentioned, we feel like the development bank is not a direct competition because remember, for SMEs, the distribution channel, meaning the branches, is very important. And the development banks, they don't have that. That's why they are called second-tier banks because they rely on the distribution channels of the first-tier banks like us to access the final client, in this case, SMEs, agro players and exporters.

Perfect. So just two comments. We agree with a 50 basis points cut in February as a house, we have that call. And then in terms of the SMEs competition, just a follow-up if, I don't know, at some point, NAFIN or other development banks or FIRA will be working with, for example, Banco del Bienestar and use the infrastructure that they have been building in the last years. Do you think that could be a possibility or we can discuss that?

Not really, Ernesto. We don't see that scenario as something possible. And still, the opportunity in SMEs is very important. So -- and we continue to grow very well and very healthy in that sector.

And just to remind you, Ernesto, the footprint that, for example, Banco de Bienestar has is very different from our footprint. So if they use that, they will, for sure, go after an SME that is very different to the SME that we normally attend here in the bank, that is an SME in the larger scale normally. That one normally, we have historically attend here in Banco de Bajío.

Our next question comes from the line of Tito Labarta.

It's Tito from Goldman Sachs. My question, following up on the loan growth guidance that you gave of the 8% to 11%, just I mean, GDP growth is slowing, right? You have 1% with 4% inflation. So yes, at the high end, you'd be growing almost 2x nominal GDP. Just to understand why you may not expect a bigger slowdown in 2025? Or what gives you comfort that you can continue to grow at that high single digit, low double-digit pace in the current environment? And then my second question is on your expense growth. It is moderating a bit, but if growth is slower from the economy from loan growth, if there's more uncertainty with tariffs or nearshoring, could you control that expenses a bit more and maybe grow a bit less on expenses? Just to think about where there could be some cost savings, if you can deliver any?

Thank you, Tito. Yes, we are expecting GDP growth for Mexico between 1% and 1.5%. And with that scenario, we feel that we can continue growing, at good levels, the loan portfolio. Our expectation is to grow in corporates about 8%. And in SMEs, we have been growing with more speed, so we are expecting at least 5% more growth in SMEs for 2025; and the consumer portfolio to grow at least 20% during this year. So with that mix, we feel confident. Of course, the largest part is corporate -- the corporate portfolio. So we feel that the growth we can continue growing very well. And also, I remind that during 2024 at the beginning of that year, we decided to increase the number of bankers, both in what we call Banc Empresarial for the corporate segment and the SME segment. So we still have opportunity and capacity, let's say, to capture more clients. It is also important to mention that within the loan demand that we saw and the growth that we saw in 2024, more than 60% are coming from new clients, new clients for credit. It's -- I mean that includes customers that we have still in the bank with a passive service, a checking account, electronic banking, et cetera, but without a credit, or are new, are completely new-to-bank customers. So that is important. So we have been able to bring new customers to the bank, and that is also source of loan demand going forward. Regarding expenses, we closed 2024 with 12.4% and for 2025, we're expecting to be at levels in the midpoint of the guidance of 11%. We continue to see opportunities in expanding branches. Actually, we're planning to open 15 new branches during this year. If we consider those new branches and the ones coming from 2024 that didn't operate a whole year, the impact in expenses from new branches is 0.8%. So without new branches that, of course, are coming with more customers, more revenue, et cetera, expense growth will be at 10.2%. As we mentioned in previous quarters, we are reaching breakeven in new branches in less than 1 year. So that is important to consider. Additionally, we continue to invest in digital banking, data science, infrastructure, cybersecurity and also hardware and infrastructure in general to support the 16% increase in transactions that we saw in 2024. So however, we maintain a very strong focus on efficiency, ensuring that every investment deliver a clear return. So balancing all the strategic investments that we are doing and with disciplined expense management, that is a key priority, and we feel that we -- I mean, we are going to be very close to 10% during this year, and we will be able to get to a single digit in 2026.

Our next question comes from the line of Marlon Medina Robles.

This is Marlon from JPMorgan. My question is a follow-up basically on asset quality. And here, because your cost of risk guidance at 0.8% to 1% is above the historical levels and also like NPLs below or around 1.6%, it's also above historical levels, so my question is like considering the mix and that you're growing faster in consumers, should this be a new normal for cost of risk and NPLs? Or are you rather anticipating some more challenging trends in any segment for 2025? And then we should see a normalization into 2026? Just trying to understand how much of it is kind of like a new normal or more of a 2025 increase in cost of risk.

Yes. What we are guiding for, for this year in cost of risk is in the midpoint 90 basis points. That is the same level that we saw during 2024. We have been mentioning during different calls last year about different customers that get into past due loans, that it was really, in several cases, were crises; customers that behaved very well for years and during 2024, they get into trouble to pay. So we still don't feel that we have a sector with a negative trend that could impact the whole segment. It has been different reasons for different clients. So with the uncertainty we have during this year, we feel that we are guiding well and that the cost of risk that we are guiding is realistic. We still feel that in a normalized situation going forward, we can get again to the regular levels of cost of risk that it was between 0.6% and 0.8%. So we don't feel that maybe this is a transition year, and let's go to get to a more normalized economic situation and certainty in the coming years.

[Operator Instructions] Our next question comes from the line of Andres Soto.

This is Andres Soto from Santander. My question is a follow-up on capital and dividends. When I go through your numbers and I look at the expected evolution of the capital ratio, I believe it's possible that you are going to be even at 15% core equity Tier 1. So my question would be, will you consider extraordinary dividends or doing buybacks? And to this point of buybacks, have you considered this alternative rather than this [ reading ] extraordinary events, doing some buybacks considering the low valuation of the stock?

Andres, this is Carlos. As I mentioned a while ago, we are considering a regular dividend for the next year between 50% and 60%, depending on several factors that affect the economy. If later on during the year, we would see the conditions to consider an extra dividend, we would consider it. But so far, at this point, there's so much uncertainty in the economy that we are happy with the 50% to 60% dividend payout. In terms of buying our own stock, we are doing it little by little through our fondo de recompra. But it's not a very heavy program. It's not intensive. We have not considered to reduce our capital by buying back our own stock yet.

[Operator Instructions] Our next question comes from the line of Alejandro Lavín.

This is Alejandro Lavín from Santander Asset Management. Congrats on the results. My question is on taxes. So there have been, as we have talked before, several mentions about the possibility of the fiscal authority changing the fiscal rules for banks. Well, obviously, nothing has happened, right? And looking at your guidance with an effective tax rate of 26.5%, I mean it seems that you are just doing business as usual. And I guess that makes sense because there is so much uncertainty. So I just want to touch on that details and see what your views are on this decision.

This is Joaquin Dominguez. First of all, we are not seeing yet any formal regulation change, even in these -- talking with regulators and with the Mexican banks association, we haven't seen any initiative in terms to change the tax regulation. So regarding the effective tax rate in the last quarter, we made a correction considering the different tax for the participation of the employees in the income. So we reduced -- the net impact for the quarter was MXN 63 million, and that was the reduction, but it was due a correction we made in the last quarter.

[Operator Instructions] We have not received any further questions at this point. So that concludes our question-and-answer session. Thank you. I would now like to hand the call back over for some closing remarks.

Thanks, everybody, for connecting to the call. If you have further questions, please let us know with an email or a meeting request. We will see you all when we report the second -- the first quarter results in April. Thank you very much.

That ends our call. You may now disconnect.