Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Banco del Bajio SA (BBAJF, Financial) reported a 6% increase in revenue, reaching MXN1 billion, driven by increased activity in financial markets.
- EBITDA rose by 7% to MXN556 million, showcasing effective cost management.
- Earnings per share increased by 10% year-over-year, indicating strong financial performance.
- The company experienced a 15% increase in revenue from cash equities trading and clearing.
- Assets under custody increased by 12%, driven by cross-border transactions and pension market reforms.
Negative Points
- EBITDA for the first half of the year was down 3% due to foreign exchange impacts and lower trading in the first quarter.
- Revenue from OTC trading and value-added services decreased by 5%, impacted by FX fluctuations.
- The global market saw a 3% decrease in trading activity, influenced by the strength of the peso.
- Operating expenses increased by 3%, primarily due to personnel expenses and technology investments.
- The company faced challenges in obtaining regulatory approval for new projects, delaying the rollout of central counterparty services for fixed income.
Q & A Highlights
Q: What is the new strategy for Bolsa to prevent delisting in the Mexican exchange and encourage more listings in Mexico instead of the US?
A: Jorge Alegre, CEO, emphasized focusing on getting closer to customers, including international and Mexican investor bases. The strategy involves enhancing market data products and pursuing electronic platforms for fixed income markets to attract more listings in Mexico.
Q: Can the earnings inflection point seen this quarter be maintained, and what is the rationale behind it?
A: Ramon Gomez, CFO, noted that the second quarter marked an inflection point with revenue surpassing MXN1 billion. The company expects a more dynamic market in the second half of the year, driven by factors like US elections and infrastructure opportunities.
Q: Are there any updates on the regulatory framework, particularly regarding the counterpart for the bonds market and brokers' regulation?
A: Jorge Alegre, CEO, mentioned positive discussions with authorities about publishing secondary rulings for easier market access. The simplified approach for listings is expected soon, with further focus on hedge funds regulation.
Q: Is there a plan to attract more retail market participants given the increase in broker dealer accounts?
A: Jorge Alegre, CEO, confirmed a focus on retail strategy, including product offerings to facilitate access for retail investors. Initiatives include liquidity providers for Mexican stocks and economic incentives for retail participants.
Q: Will there be any changes to the capital management policy, particularly regarding dividends and buybacks?
A: Jorge Alegre, CEO, stated that there are no expected changes to the current capital management policy, which includes paying out about 80% in earnings and buying back 20% of the remaining earnings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
