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Banorte


Grupo Financiero Banorte, S.A.B. de C.V., doing business as Banorte and as Ixe, is a Mexican banking and financial services holding company with headquarters in Monterrey and Mexico City, Mexico. It is one of the four largest commercial banks of Mexico by assets and loans, and the largest retirement fund administrator.[1]

Grupo Financiero Banorte operates its commercial bank under the brands Banorte and Ixe, offering savings accounts, credit cards, payday loans, mortgages, commercial loans and auto loans. Its performing loan portfolio was of US$ 35 billion in 2014.[2] It also performs insurance, pension, leasing, and brokerage activities.

Banorte has 1,269 branches and 7,297 ATMs nationwide. It can also receive deposits through more than 5,200 commercial establishments, such as drug stores, convenience stores, and supermakets.[3]

Grupo Financiero Banorte is listed on the Mexican Stock Exchange, on the Latibex, and on the U.S. OTC securities market through ADRs. It is a constituent of the IPC, the main benchmark index of the Mexican Stock Exchange, and of the S&P Latin America 40, which includes leading, blue chip companies from Latin America.

Contents

  • History 1
  • Money laundering involvement in US Operation Casablanca 2
  • Banorte's entry to the US banking market 3
  • Sources 4
  • References 5

History

Banorte is the primary subsidiary of Grupo Financiero Banorte, one of Mexico's largest and oldest financial institutions, which has been present in Mexico since 1899. The "Banorte" trademark is a well-known mark in Mexico. The web domain name "banorte.com" was created on October 13, 1998.

It is a Forbes Global 2000 company, with more than 30 billion dollars in assets under management, 12,500 employees and 950 branches. Currently, it is the only major bank in Mexico not owned by any foreign group. Banorte, with total consolidated assets of approximately $15.1 billion, is the fifth largest bank in Mexico.

It was established in 1889 as Banco Mercantil de Monterrey and in 1985 merged with Banco Regional del Norte to form Banco Mercantil del Norte (Banorte). In late 2001, Banorte acquired Bancrecer in US$125 millions. Bancrecer had been taken over in 1999 by IPAB. Bancrecer had itself taken over another bank, Banco del Noroeste (Banoro), in 1997.

In 1992, it was purchased from the Mexican Government by a group of investors headed by the Mexican businessman Roberto González Barrera. Banorte expanded their business to leasing services (Arrendadora Banorte) in 1990, to warehousing and factoring services (Almacenadora Banorte and Factor Banorte) in 1991. In 1997, Banorte established an alliance with the Italian group Generali, a main European insurance company, to offer insurances, pension funds and Afore's services through their subsidiaries Afore Banorte-Generalli, Seguros Banorte-Generalli and Pensiones Banorte-Generalli. Also, Banorte has operations in New York (Banorte Securities) and Grand Cayman (Banorte Grand Cayman Branch).

In less than 10 years, Banorte transformed itself from a regional bank, based mainly in the northern Mexico, to one with nationwide coverage. To achieve that Banorte, with a huge investment, bought four Mexican banks (among them Banco del Centro and Bancrecer). In order to set up a financial group with full services Banorte wanted a securities company under its control. Banorte made an agreement to merge Casa de Bolsa Afin in July 1993.

Key numbers for fiscal year ending December 31, 2011 for Grupo Financiero Banorte:

Total Assets: 829 billion pesos (USD 62.9 billion)
Equity: 77 billion pesos (USD $5.8 billion)
Return on assets (ROA): 1.1%
Return on Equity (ROE): 14.1%

Money laundering involvement in US Operation Casablanca

Operation Casablanca was a three-year U.S. undercover investigation, where Americans investigated major Mexican banking institutions for laundering illicit drug profits. Mexican authorities were not informed about the investigation.

This operations led U.S. Customs agents to arrest 22 high-ranking and mid-level bankers from 12 of Mexico's largest banks when they traveled to the U.S. in mid-May while they thought there went to a banking conference. The investigation produced 160 indictments, including 3 Mexican banks and 26 Mexican bankers. The US Justice Department intended to prosecute the banks under US law, with maximum penalties, seizures, and revocation to operate in the United States.

Banorte was among the banks and bankers which were busted in money laundry according to the Operation Casablanca. From June to July 1998 issue of Money Laundering Alert, Banorte was suspected to have forfeited $7,323,103.51 US dollars, so Banorte faced civil penalty lawsuit under Title 18, USC Sec. 1956(b) and civil forfeiture action under Title 18, USC Secs. 981 & 984.

On July 1, 1999, a U.S. federal judge in Los Angeles dismissed with "extreme prejudice" a $7.3 million forfeiture case against Banorte. No criminal charges were filed and U.S. authorities gave them back $1.4 million seized in the operation.

Banorte had implemented anti-money laundering policies and procedures and had detected and closed money laundering accounts prior to Operation Casablanca. These polices and practices enabled Banorte to defend the money laundering charges.

Banorte's entry to the US banking market

In 2006, Banorte acquired 70% of INB Financial Corp stock for $259 million.[4] INB Financial Corp is the holding company of Texas-based Inter National Bank. Banorte exercised its option to acquire the remaining 30% of INB Financial Corp stock for $146.6 million in 2009.[4] As of March 2013, Inter National Bank has $2.1 billion in assets and is the 19th largest Texas bank.[5]

Sources

  • Banorte
  • INB Bank
  • Banorte Securities International Ltd.
  • Grupo Financiero Banorte and Banorte USA
  • News, "Operation Casablanca"
  • Drug Trafficking in Mexico: A First General Assessment
  • Mexican bank, Banorte, challenges U.S. and prevails in Casablanca
  • Kroll's Notable Cases
  • Mexico bank gets back funds seized in U.S. sting
  • Citibank—The Confia Acquisition in Mexico
  • WIPO Arbitration and Mediation Center
  • Adrian E. Tschoegl. "Foreign ownership in Mexican Banking: A Self- Correcting Phenomenon". The Wharton School of the University of Pennsylvania, Philadelphia, PA 19104, October 23, 2006.
  • Taeko Hoshino. Privatization of Mexico's public enterprises and the restructuring of the private sector. The Developing Economies, XXXIV-1 (March 1996) [1]
  • www.greatplacetowork.com.mx

References

  1. ^ Grupo Financiero Banorte 2014 Annual Report
  2. ^ Banorte 4Q14 Conference Call
  3. ^ Grupo Financiero Banorte 2014 Annual Report
  4. ^ a b
  5. ^ http://www.banking.state.tx.us/pubs/topbnks/top100.htm
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