Obligation Mercantil Norte Banco 5.875% ( USP1392BAX03 ) en USD

Mercantil Norte Banco

100 % ▲

Mexique

USP1392BAX03 ( en USD )

5.875% par an ( paiement semestriel )

17/02/2014 - Obligation échue

Prospectus brochure de l'obligation Banco Mercantil del Norte (Banorte) USP1392BAX03 en USD 5.875%, échue

1 000 USD

250 000 000 USD

P1392BAX0

Banorte est une grande institution financière mexicaine offrant une gamme complète de services bancaires, de gestion de patrimoine et d'investissements aux particuliers et aux entreprises.

L'Obligation émise par Mercantil Norte Banco ( Mexique ) , en USD, avec le code ISIN USP1392BAX03, paye un coupon de 5.875% par an.
Le paiement des coupons est semestriel et la maturité de l'Obligation est le 17/02/2014

BANCO MERCANTIL DEL NORTE, S.A.
(Incorporated in accordance with the laws of the United Mexican States)
acting through its Grand Cayman Branch
U.S.$300,000,000
5.875% Step-Up Subordinated Callable Notes Due 2014
We, Banco Mercantil del Norte, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte, a multiple purpose bank incorporated in accordance with
the laws of the United Mexican States ("Mexico"), acting through our Grand Cayman branch, are offering the U.S.$300,000,000 5.875% Step-Up
Subordinated Callable Notes due 2014 (the "Notes"). The Notes will mature on February 17, 2014, unless previously redeemed or the maturity date is
deferred. Subject to any regulatory requirements, we may redeem the Notes in whole or in part on any interest payment date, commencing on February 17,
2009. See "Description of the Notes--Call Option." In addition, we may redeem the Notes in whole but not in part, subject to any regulatory requirements,
at any time if there are specified changes in the Mexican or Cayman Island laws affecting taxation of the Notes. See "Description of the Notes--Tax
Redemption." If our Capital Ratio (as defined in this Luxembourg listing circular) has declined below, or payment of interest or principal on the Notes or
redemption of the Notes would cause our Capital Ratio to decline below, the Capital Adequacy Ratio (as defined in this Luxembourg listing circular) imposed
under Mexican Ley de Instituciones de Crédito (the "Mexican Banking Law"), or any Mexican Regulatory Event (as defined in this Luxembourg listing
circular) has occurred and is continuing, we will defer payment under the Notes or redemption of the Notes until the date that is five days after the date on
which no such condition exists. See "Description of the Notes--Deferral of Interest and Principal," " --Optional Redemption" and "--Tax Redemption."
The Notes are denominated in U.S. dollars and will earn interest at a fixed rate of 5.875% per year until February 17, 2009, and thereafter at the U.S.
Treasury Rate (as defined in this Luxembourg listing circular) as of the second business day preceding February 17, 2009, plus 431.25 basis points per year.
Interest on the principal amount of the Notes will be payable semi-annually in arrears on February 17 and August 17 of each year, commencing on
August 17, 2004. See "Description of the Notes--Principal and Interest."
The Notes will be our unsecured subordinated obligations. In the event of our bankruptcy, liquidation or dissolution under Mexican law, they will rank at
least pari passu with all our other present or future subordinated indebtedness and will be junior in right of payment to all of our present or future
indebtedness other than the Notes and our other present or future subordinated indebtedness. Payment of principal on the Notes may be accelerated only in
the case of certain events involving our bankruptcy, liquidation or dissolution. There will be no right of acceleration in the case of a default in the
performance of any of our covenants, including the payment of principal or interest in respect of the Notes, or in the case of any deferral in the payment
of principal and interest in respect of the Notes. See "Description of the Notes--Events of Default, Notice and Waiver."
Application has been made to list the Notes on the Luxembourg Stock Exchange ("LSE"). It is a condition of the issuance of the Notes that they be rated at
least Baa2 by Moody's Investors Service, Inc. ("Moody's").
Investing in the Notes involves risks. See "Risk Factors" beginning on page 12.
_________________
We have not registered the Notes under the Securities Act of 1933, as amended (the "Securities Act") or under any state securities laws.
Therefore, we may not offer or sell the Notes within the United States to, or for the account or benefit of, any U.S. person unless the offer
or sale would qualify for a registration exemption from the Securities Act and applicable state securities laws. Accordingly, we are only
offering the Notes (1) to qualified institutional buyers (as defined in Rule 144A under the Securities Act) and (2) outside the United States
in compliance with Regulation S under the Securities Act. See "Transfer Restrictions" for additional information about eligible offerees
and transfer restrictions.
THE NOTES HAVE NOT BEEN REGISTERED WITH THE SECCIÓN DE VALORES (THE "SECURITIES SECTION") OF THE REGISTRO
NACIONAL DE VALORES (THE "MEXICAN NATIONAL REGISTRY OF SECURITIES") AND THEREFORE, THE NOTES MAY NOT BE
OFFERED OR SOLD IN A PUBLIC OFFERING NOR BE THE SUBJECT OF AN INTERMEDIATION IN MEXICO. THE ACQUISITION OF THE
NOTES BY ANY INVESTOR OF MEXICAN NATIONALITY WILL BE MADE UNDER ITS OWN RESPONSIBILITY.
_________________
U.S.$250,000,000 of Notes, of which U.S.$237,500,000 of Notes will be purchased by Deutsche Bank Securities Inc. and of which
U.S.$12,500,000 of Notes will be purchased by Morgan Stanley & Co. Incorporated, will be purchased at the price of 99.543% of their
principal amount plus accrued interest, if any.
Deutsche Bank Securities Inc. proposes to offer U.S.$50,000,000 of Notes from time to time for sale in negotiated transactions, or
otherwise, at varying prices to be determined at the time of each sale. Deutsche Bank Securities Inc. has agreed to purchase
U.S.$50,000,000 of Notes from us at the price of 100.200% of their principal amount.
_________________
Delivery of the Notes has been made in New York, New York on February 17, 2004.
Sole Book-Runner
Deutsche Bank Securities
Co-Manager
Morgan Stanley
The date of this Luxembourg listing circular is April 13, 2004.

Unless otherwise specified or the context otherwise requires, references in this Luxembourg listing circular to "Banorte," "we,"
"us" and "our" are references to Banco Mercantil del Norte, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte and its
subsidiaries. References to "Banorte Cayman" are to the Grand Cayman branch of Banco Mercantil del Norte, S.A., Institución de
Banca Múltiple, Grupo Financiero Banorte. References to "the issuer" are to Banco Mercantil del Norte, S.A., Institución de Banca
Múltiple, Grupo Financiero Banorte acting through its Grand Cayman branch.
In connection with this offer, the initial purchasers or any person acting for such person may over-allot or effect
transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail for a
limited period after the issue date. However, there is no obligation on the initial purchasers or any of their agents to do this. Such
stabilizing, if commenced, may be discontinued at any time, and must be brought to an end after a limited period.
We, having made all reasonable inquiries, confirm that this Luxembourg listing circular contains all information with regard to
us, our subsidiaries and the Notes that is material in the context of the issue and offering of the Notes, that the information contained in
this Luxembourg listing circular is true and accurate and is not misleading as of the date of this Luxembourg listing circular, that the
opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which would make this
Luxembourg listing circular or any of such information or the expression of any such opinions or intentions materially misleading. We
accept responsibility for the information contained in this Luxembourg listing circular.
We are relying upon an exemption from registration under the Securities Act for an offer and sale of securities which do not
involve a public offering. By purchasing the Notes, you will be deemed to have made certain acknowledgements, representations and
agreements as set forth under "Transfer Restrictions" in this Luxembourg listing circular. We are not, and the initial purchasers are not,
making an offer to sell the Notes in any jurisdiction except where such an offer or sale is permitted. You should understand that you will
be required to bear the financial risks of your investment for an indefinite period of time.
Neither the Securities and Exchange Commission (the "SEC") nor any state or foreign securities commission has approved and
disapproved of the Notes or determined if this Luxembourg listing circular is truthful or complete. Any representation to the contrary is
a criminal offense.
We have submitted this Luxembourg listing circular solely to a limited number of institutional investors in the United States
and to investors outside the United States so they can consider a purchase of the Notes. This Luxembourg listing circular has been
prepared solely for use in connection with the placement of the Notes and for the listing of the Notes on the LSE. We have not
authorized the use of this Luxembourg listing circular for any other purpose. This Luxembourg listing circular may not be copied or
reproduced in whole or in part. This Luxembourg listing circular may be distributed and its contents disclosed only to prospective
investors to whom it is provided. By accepting delivery of this Luxembourg listing circular, you agree to these restrictions. See
"Transfer Restrictions."
The information contained in this Luxembourg listing circular relating to us was obtained from Banorte and other sources that
we believe to be reliable, but no assurance can be given by the initial purchasers as to the accuracy or completeness of such
information. The initial purchasers assume no responsibility for the accuracy or completeness of the information contained herein
(financial, legal or otherwise). In making an investment decision, investors must rely on their own examinations of us and the terms of
this offering, including the merits and risks involved. Moreover, the contents of this Luxembourg listing circular are not to be construed
as legal, business or tax advice. You are urged to consult your own attorney, business or tax advisor for legal, business or tax advice.
No dealer, salesperson or other individual has been authorized to give any information or to make any representations other
than those contained in this Luxembourg listing circular and, if given or made, such information or representations must not be relied
upon as having been authorized. Neither the delivery of this Luxembourg listing circular nor any subscription, sale or purchase
hereunder shall create, under any circumstances, any implication that there has been no change in our affairs since the date hereof or
that the information contained herein is correct as of any time after its date.
This Luxembourg listing circular does not constitute an offer of, or an invitation by or on behalf of, us or the initial purchasers
or any of the respective directors, officers and affiliates to subscribe for or purchase any securities in any jurisdiction to any person to
whom it is unlawful to make such an offer in such jurisdiction. Each purchaser of the Notes must comply with all applicable laws and
regulations in force in each jurisdiction in which it purchases, offers or sells the Notes or possesses or distributes this Luxembourg
listing circular and must obtain any consent, approval or permission required by it for the purchase, offer or sale by it of the Notes
under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such purchases, offers or sales.
The distribution of this Luxembourg listing circular and the offering of the Notes in certain jurisdictions may be restricted by law.
Persons into whose possession this Luxembourg listing circular comes are required to inform themselves about and to observe any
such restrictions. There is no undertaking to register the Notes under any state or federal securities laws of the United States. The
i

Notes may not be resold in the United States unless they are subsequently registered or an exemption from registration is available.
Each subsequent purchaser of the Notes will be deemed by its acceptance of those Notes to have made certain acknowledgments,
representations and agreements intended to restrict the resale or other transfer of those Notes as set forth in the Notes or described in
this Luxembourg listing circular. For a further description of certain restrictions on the offering, sale and resale of the Notes and on the
distribution of this Luxembourg listing circular, see "Description of the Notes," "Certain ERISA Considerations," "Plan of Distribution"
and "Transfer Restrictions."
Notwithstanding anything herein to the contrary, each prospective investor (and each employee, representative or other agent
of each prospective investor) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of
an investment in the Notes and all materials of any kind (including opinions or other tax analyses) that are provided to the prospective
investor relating to such tax treatment and tax structure. For these purposes, the tax treatment of an investment in the Notes means the
purported or claimed United States federal income tax treatment of an investment in the Notes. Moreover, the tax structure of an
investment in the Notes includes any fact that may be relevant to understanding the purported or claimed United States federal income
tax treatment of an investment in the Notes.
The Mexican central bank, Banco de México ("Banco de Mexico") has authorized the issuance of the Notes. Authorization of
the issuance of the Notes by Banco de Mexico does not address the tax consequences to the holders of the Notes, nor does it imply
any certification as to the investment quality of the Notes or our solvency.
We have obtained an authorization from the Comisión Nacional Bancaria y de Valores (the Mexican National Banking and
Securities Commission, or the "CNBV") for the registration of the Notes with the Sección Especial (the "Special Section") of the
Mexican National Registry of Securities, maintained by the CNBV.
REGISTRATION OF THE NOTES WITH THE SPECIAL SECTION DOES NOT IMPLY ANY CERTIFICATION AS TO THE
INVESTMENT QUALITY OF THE NOTES OR OUR SOLVENCY OR THE ACCURACY OR COMPLETENESS OF THE
INFORMATION CONTAINED HEREIN. THE INFORMATION CONTAINED IN THIS LUXEMBOURG LISTING CIRCULAR IS THE
RESPONSIBILITY OF BANORTE AND HAS NOT BEEN REVIEWED OR APPROVED BY THE CNBV. THE NOTES HAVE NOT
BEEN REGISTERED WITH THE SECURITIES SECTION AND, THEREFORE, THE NOTES MAY NOT BE OFFERED OR SOLD IN A
PUBLIC OFFERING NOR BE THE SUBJECT OF AN INTERMEDIATION IN MEXICO. THE ACQUISITION OF THE NOTES BY
ANY INVESTOR OF MEXICAN NATIONALITY WILL BE MADE UNDER ITS OWN RESPONSIBILITY.
This Luxembourg listing circular is only being distributed to and is only directed at (i) persons who are outside the United
Kingdom, (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2001 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling
within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). The Notes are only available to,
and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such notes will be engaged in only with, relevant
persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
The Notes have not been, and will not be registered with the Commissão de Valores Mobilliários (the Brazilian Securities
Commission, or the "CVM"). The Notes may not be offered or sold in Brazil, except in circumstances which do not constitute a public
offering or distribution under Brazilian laws and regulations.
No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for the Notes.
The Notes are not deposits with Banorte and are not insured by the United States Federal Deposit Insurance Corporation or
any other United States government agency or any Mexican governmental agency, including, without limitation, the Instituto para la
Protección al Ahorro Bancario ("IPAB").
We reserve the right to reject any offer to purchase, in whole or in part, for any reason, or to sell less than the full amount of
the Notes offered hereby.
The Notes may not be purchased or held by (i) any plan, program or arrangement subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code") or
comparable provisions of any state or other governmental law or (ii) any person acting on behalf of or using the assets of any such
plan, program or arrangement, unless such purchase and holding is covered by the exemptive relief provided by Prohibited Transaction
Class Exemption ("PTCE") 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption. Any purchaser or holder of Notes or any
interest therein will be deemed to have represented by its purchase or holding thereof that either (i) it is not a plan, program or
arrangement subject to ERISA, Section 4975 of the Code or comparable provisions of any state or other governmental law and it is not
ii

purchasing securities on behalf of or using the assets of any such plan, program or arrangement or (ii) such purchase and holding and
any subsequent disposition of the Notes is covered by the exemptive relief provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another applicable exemption. If a purchaser or holder of Notes that is a plan, program or arrangement subject to ERISA, Section 4975 of
the Code or comparable provisions of any state or other governmental law elects to rely on an exemption other than PTCE 96-23, 95-60,
91-38, 90-1 or 84-14, we may require a satisfactory opinion of counsel or other evidence with respect to the availability of such
exemption for such purchase or holding. Prospective purchasers must carefully consider the restrictions on purchase set forth in
"Transfer Restrictions" and "Certain ERISA Considerations."
Pursuant to Banking Law Regulation 2019/95 issued by Banco de Mexico (the "Banco de Mexico Regulations"), the Notes
may not be acquired by (i) Mexican financial institutions of any kind, acting on their own behalf, with the exception of certain
fixed-income investment companies (sociedades de inversión en instrumentos de deuda), variable income investment companies
(sociedades de inversión de renta variable) and insurance and bonding companies (instituciones y sociedades mutualistas de seguros
e instituciones de fianzas) when investing their technical reserves or securities fluctuation reserve; (ii) Mexican and non-Mexican
entities in which we: (A) own voting stock representing at least 51% of paid-in capital; (B) have control of the meetings of
shareholders; or (C) are in a position to appoint the majority of the members of the Board of Directors; (iii) Mexican pension and
retirement funds managed by us or by any entity belonging to the financial group controlled by GFNorte (as defined in this
Luxembourg listing circular); or (iv) us or any entity belonging to the financial group controlled by GFNorte, acting as trustee,
representative, agent or attorney in fact if, by acting in such capacity, we have or such entity has discretionary investment power.
Mexican financial institutions or Mexican pension and retirement funds that are not prohibited from investing in the Notes
may acquire up to 10% of the Notes. The 10% limit applies in the aggregate to all of the entities forming part of a financial group as well
as to the affiliates that are not part of a financial group.
Except in connection with the redemption of the Notes, under Mexican Banking Law we may not acquire the Notes. In
addition, the Notes may not be pledged as collateral in favor of any Mexican bank.
NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED
UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED (THE "RSA") WITH THE STATE OF
NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE
STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE
THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT
NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT
THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS
UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY
REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
AVAILABLE INFORMATION
We are not subject to the information requirements of the United States Securities Exchange Act of 1934, as amended (the
"Exchange Act"). To preserve the exemption for resales and transfers under Rule 144A under the Securities Act, we have agreed that
we will promptly provide any holder or any prospective purchaser of the Notes who is designated by that holder and is a "qualified
institutional buyer," as defined under Rule 144A, upon the request of such holder or prospective purchaser, information meeting the
requirements of Rule 144A(d)(4), unless we either furnish information to the SEC in accordance with Rule 12g3-2(b) under the Exchange
Act or furnish information to the SEC pursuant to Section 13 or 15(d) of the Exchange Act. For so long as the Notes are outstanding,
such information will be available at our specified offices and (for so long as the Notes are listed on the LSE) the Luxembourg Paying
Agent. Following completion of this offering, we are not otherwise obligated to furnish holders or others with any supplemental
information, discussion or analysis of our business or financial reports.
iii

ENFORCEMENT OF JUDGMENTS
We are a private multiple purpose bank (an Institución de Banca Múltiple) incorporated in accordance with the laws of
Mexico with limited liability (a sociedad anónima). All of our directors and officers and experts named herein are non-residents of the
United States and substantially all of the assets of such non-resident persons and substantially all of our assets are located outside the
United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons
or to enforce against them or against us in United States courts judgments predicated upon the civil liability provisions of the United
States federal securities laws. We have been advised by our Mexican counsel that there is doubt as to the enforceability, in original
actions in Mexican courts, of liabilities predicated solely on United States federal securities laws and as to the enforceability in Mexican
courts of judgments of United States courts obtained in actions predicated upon the civil liability provisions of the United States
federal securities laws.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Luxembourg listing circular contains forward-looking statements. Examples of such forward-looking statements include,
but are not limited to: (i) statements regarding our future results of operations and financial condition; (ii) statements of plans,
objectives or goals, including those related to our operations; and (iii) statements of assumptions underlying such statements. Words
such as "believes," "anticipates," "should," "estimates," "seeks," "forecasts," "expects," "may," "intends" and "plans" and similar
expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks
exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution investors that a
number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and
intentions expressed or implied in such forward-looking statements, including the following factors: competition, limitations on our
access to sources of financing on competitive terms, restrictions on foreign currency convertibility and remittance outside of Mexico,
failure to meet capital requirements or other requirements, changes in reserve requirements, changes in requirements to make
contributions to or for the receipt of support from programs organized by the Mexican government, changes in overall economic
conditions in Mexico, changes in exchange rates, market interest rates or the rate of inflation, and the effect of changes in accounting
principles, new legislation, intervention by regulatory authorities, government directives or monetary or fiscal policy in Mexico. Should
one or more of these factors or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed, estimated, expected or intended. We have no obligation to update these
forward-looking statements in light of new information or future developments.
iv

PRESENTATION OF CERTAIN FINANCIAL AND OTHER INFORMATION
Financial Statements
This Luxembourg listing circular includes (i) our audited consolidated financial statements as of December 31, 2001 and 2002
and for the years ended December 31, 2000, 2001 and 2002 (the "audited financial statements"), together with the notes thereto, and
(ii) our unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2002 and 2003,
together with the notes thereto (the "unaudited interim financial statements," and together with the audited financial statements, the
"Financial Statements"). The Financial Statements have been prepared in accordance with the accounting principles and regulations
prescribed by the CNBV for credit institutions, as amended ("Mexican Banking GAAP").
On October 5, 2001, we entered into a contract for the acquisition of Bancrecer, S.A. ("Bancrecer") from IPAB. Our Financial
Statements and the other consolidated financial information contained in this Luxembourg listing circular consolidate the financial
results of Bancrecer beginning January 1, 2002. From December 4, 2001 to December 31, 2001, our acquisition of Bancrecer was recorded
in investment securities. As a result, our Financial Statements and other consolidated financial information for the years ended
December 31, 2000, 2001 and 2002 are not directly comparable from period to period, and evaluation of period to period trends may be
difficult or impossible. We have not provided in this Luxembourg listing circular any pro forma financial information reflecting the
acquisition of Bancrecer.
Accounting Principles
Mexican Banking GAAP differs from generally accepted accounting principles established by the Mexican Institute of Public
Accountants ("Mexican GAAP"). Mexican Banking GAAP also differs from generally accepted accounting principles in the United
States of America ("U.S. GAAP") and the SEC guidelines applicable to banking institutions in the United States. See "Significant
Differences Between Mexican Banking GAAP and U.S. GAAP." No reconciliation of any of the Financial Statements to U.S. GAAP has
been prepared for the purposes of this Luxembourg listing circular. Any such reconciliation would likely result in material differences.
The CNBV requires Mexican banks to account for the comprehensive effects of inflation in accordance with rules which are
substantially the same as those in Bulletin B-10, "Recognition of Effects of Inflation in the Financial Information," issued by the
Mexican Institute of Public Accountants. Additionally, Mexican Banking GAAP requires that financial information be adjusted for the
effect of inflation and presented in constant Pesos. Unless otherwise specified, the Financial Statements and other financial information
contained in this Luxembourg listing circular have been restated in accordance with the guidelines established by the CNBV, in order to
recognize the effects of inflation. These guidelines require the restatement of all comparative financial statements to Pesos of constant
purchasing power as of the date of the latest balance sheet. As such, unless otherwise specified, the Financial Statements and other
financial information are presented in Pesos of constant purchasing power as of September 30, 2003. The Financial Statements have
been restated and adjusted applying the changes in the value of the UDI (as defined in this Luxembourg listing circular), which is
determined based on Índice Nacional de Precios al Consumidor (the "National Consumers' Price Index," or "NCPI"), an inflation index
determined by Banco de Mexico. For a description of the methodology used to adjust the Financial Statements to reflect the effects of
inflation, see "Significant Differences Between Mexican Banking GAAP and U.S. GAAP--Effects of Inflation" and note 3(b) to the
audited financial statements included in this Luxembourg listing circular.
v

There was volatility in the rate of inflation in Mexico during the periods for which financial information is presented herein.
The annual rate of inflation was 9.0% for 2000, 4.4% for 2001, 5.7% for 2002 and the rate of inflation for the first nine months of 2003 was
2.3%.
Unless otherwise specified, in accordance with Mexican Banking GAAP, the Financial Statements and the other financial
information contained in this Luxembourg listing circular are presented in consolidated form. In accordance with Mexican Banking
GAAP, only those subsidiaries that operate in the financial sector or that provide auxiliary or complementary services are consolidated
for the purpose of presenting our consolidated financial information. Our subsidiary Sólida Administradora de Portafolios S.A. de C.V.
("Sólida") is 99.99% owned by us, although it is not consolidated in our Financial Statements due to the determination by the Mexican
Secretaria de Hacienda y Crédito Publico (the "Ministry of Finance and Public Credit") that it is not operating in the financial sector.
Accordingly, our interest in Sólida is recorded as a permanent stock investment and is valued by using the equity method. See
"Significant Differences Between Mexican Banking GAAP and U.S. GAAP--Consolidation."
Currencies
The financial information appearing in this Luxembourg listing circular is presented in Mexican Pesos. In this Luxembourg
listing circular references to "Pesos" or "Ps." are to Mexican Pesos and references to "U.S. dollars," "dollars," "U.S.$" or "$" are to
United States dollars. This Luxembourg listing circular contains translations of certain Peso amounts into U.S. dollars at specified rates
solely for the convenience of the reader. These translations should not be construed as representations that the Peso amounts actually
represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, U.S. dollar
amounts that have been translated from Pesos have been so translated at an exchange rate of Ps.11.0133 per U.S. dollar, the rate
calculated for September 30, 2003 and published on October 1, 2003 in the Diario Oficial de la Federación (the Mexican Official Gazette
of the Federation or the "Federal Gazette") by the Banco de Mexico for the payment of obligations denominated in currencies other
than Pesos and payable within Mexico (the "Banco de Mexico Exchange Rate"). As of the same date, the noon buying rate in New York
City for cable transfers in Pesos per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York was
Ps.11.003 per U.S. dollar. See "Exchange Rates and Currency" for information regarding rates of exchange between the Peso and U.S.
dollar for the periods specified therein.
References herein to "UDI" are to Unidades de Inversión, a Peso equivalent unit of account indexed for Mexican inflation.
UDIs are units of account whose value in Pesos is indexed to inflation on a daily basis, as measured by the change in the NCPI. Under
a UDI-based loan or financial instrument, the borrower's nominal Peso principal balance is converted either at origination or upon
restructuring to a UDI principal balance, and interest on the loan or financial instrument is calculated on the outstanding UDI balance
of the loan or financial instrument. Principal and interest payments are made by the borrower in an amount of Pesos equivalent to the
amount due in UDIs at the stated value of the UDIs on the day of payment. As of September 30, 2003, one UDI was equal to
approximately Ps.3.295959 (U.S.$0.2993).
Terms Relating to Our Loan Portfolio
As used in this Luxembourg listing circular, the following terms relating to our loan portfolio and other credit assets have the
meanings set forth below, unless otherwise indicated.
"Total performing loans" and "total performing loan portfolio" refer to the aggregate of (i) the total principal amount of loans
outstanding as of the date presented, (ii) amounts attributable to "accrued interest," (iii) "rediscounted loans" and (iv) the "UDI
Trusts" (as explained below). Under Mexican Banking GAAP, we include as income for any reporting period interest accrued but
unpaid during that period. Such "accrued interest" is reported as part of our total performing loan portfolio in the financial statements
until it is paid or becomes part of the total non-performing loan portfolio. "Rediscounted loans" are Peso- and dollar-denominated loans
made to finance projects in industries that qualify for priority status under the wholesale lending programs of the Mexican
government's development banks. In accordance with Mexican Banking GAAP, rediscounted loans are recorded on the balance sheet
as outstanding loans. As mandated by the CNBV, total performing loans include the off-balance sheet portfolio trusts (the "UDI
Trusts") holding our loans converted into UDIs. Under the UDI program, we are liable for all future losses, if any, on the loans in the
UDI Trusts. See "Selected Statistical Information--Debtor Support Programs --UDI Program."
Unless otherwise specified herein, the terms "total performing loans" and "total performing loan portfolio," as used in this
Luxembourg listing circular, do not include (i) amounts receivable from the Fondo Bancario de Protección al Ahorro ("FOBAPROA")
or IPAB in connection with the transfer of loans and foreclosed assets to FOBAPROA as described in "Government Sponsored
Support Funds" or otherwise, and (ii) "total non-performing loans," as defined below. The term "net total performing loans" refers to
total performing loans less allowance for loan losses on these loans.
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The CNBV requires amounts receivable from FOBAPROA and IPAB to be included in a bank's loan portfolio in its financial
statements. Accordingly, such amounts receivable from FOBAPROA are referred to as "FOBAPROA notes," and amounts receivable
from IPAB are referred to as "IPAB notes." Amounts receivable from FOBAPROA and IPAB are reflected in some instances by
agreements that are not necessarily accompanied by a note. FOBAPROA notes and IPAB notes are collectively referred to as the
"FOBAPROA and IPAB notes" and in certain instances are included as a separate component of the loan portfolio in the consolidated
financial information contained in this Luxembourg listing circular. In addition, although interest accrued on FOBAPROA notes is
generally capitalized over the life of the related receivable and is not payable until its maturity, we recognize such interest as current
interest income. See "Government Sponsored Support Funds--FOBAPROA."
The terms "total non-performing loans" and "total non-performing loan portfolio" include past-due principal and past-due
interest. Unless otherwise specified herein, FOBAPROA and IPAB notes are not included in total non-performing loans. For a
description of our policies regarding the classification of loans as non-performing, see "Selected Statistical Information--Non-
Performing Loan Portfolio." The term "net non-performing loans" refers to total non-performing loans less allowance for loan losses on
these loans.
References in this Luxembourg listing circular to "provisions" are to additions to the loan loss allowance or reserves recorded
in a particular period and charged to income, except in the case of certain provisions associated with loans and foreclosed assets
transferred to FOBAPROA and other loan losses, which were charged to stockholders' equity (net of deferred taxes). See "Government
Sponsored Support Funds--FOBAPROA." References in this Luxembourg listing circular to "allowance" are to the aggregate loan loss
allowance or reserves shown as of a particular date as a balance sheet item.
The terms "total loans" and "total loan portfolio" include total performing loans plus total non-performing loans, each as
defined above. The terms "net total loans" and "net total loan portfolio" refer to net total performing loans plus net non-performing
loans, as defined above.
The loan portfolio information provided in "Selected Statistical Information" was determined in accordance with the manner in
which we have presented the components of our loan portfolio in other sections of this Luxembourg listing circular as described above.
See "Selected Statistical Information--Loan Portfolio" and the footnotes to the tables included therein.
Terms Relating to Our Capital Adequacy
As used in this Luxembourg listing circular, the following terms relating to our capital adequacy have the meanings set forth
below, unless otherwise indicated.
"Total capital" or "total net capital" refers to capital neto, as such terms are determined by the Mexican Banking Law and the
Mexican Capitalization Rules for commercial banks published in the Federal Gazette on September 22, 1999, as amended on
December 13, 1999, February 28, 2000, May 14, 2002 and June 9, 2003 (the "Mexican Capitalization Requirements").
"Tier 1 capital" refers to the parte básica (basic portion) of the total net capital, as such term is determined based on the
Mexican Capitalization Requirements.
"Tier 2 capital" refers to the parte complementaria (additional portion) of the total net capital, as such term is determined
based on the Mexican Capitalization Requirements.
"Capital Ratio" refers to the ratio of the net capital (capital neto) to risk-weighted assets calculated in accordance with the
methodology established from time to time by the Ministry of Finance and Public Credit pursuant to Mexican capitalization
requirements for commercial banks.
"Capital Adequacy Ratio" refers to the minimum applicable Capital Ratio, established from time to time by the Ministry of
Finance and Public Credit pursuant to Mexican capitalization requirements for commercial banks, below which we must fall in order to
defer the payment of interest or principal, as applicable, under the Notes or redeem the Notes. As of the date of this Luxembourg listing
circular, the Capital Adequacy Ratio is 8.00%.
Market Share and Ranking Information
Unless otherwise indicated, the market share and ranking information included in this Luxembourg listing circular is derived
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from statistics of the CNBV, Asociación de Banqueros de México ("ABM") or Controladora Prosa, S.A. de C.V. ("Prosa," a Mexican
clearing agency for automatic teller machines ("ATMs") and credit cards), each as of September 30, 2003.
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SUMMARY
This summary highlights selected information from this Luxembourg listing circular and may not contain all the
information that is important to you. For a more complete understanding of us and this offering, you should read this entire
Luxembourg listing circular, including the risk factors and the Financial Statements appearing elsewhere in this Luxembourg
listing circular.
Banorte
We are a multiple purpose bank with limited liability (sociedad anónima) incorporated in accordance with the laws of Mexico
and provide a full range of banking services, serving more than 190 corporate customers and approximately 4.8 million retail customers
in Mexico. We conduct a wide range of commercial and retail banking activities in Mexico through our nationwide network of more than
1,050 branches. As of September 30, 2003, we had total assets of Ps.203,274 million, total deposits of Ps.160,539 million and
stockholders' equity of Ps.8,950 million. As of September 30, 2003, we ranked fourth among all Mexican banks both in terms of total
assets and in terms of total deposits. In 2002, we generated net income of Ps.1,502 million and a return on average equity of 19.70%
(average based on beginning and end-of-period balances). In the first nine months of 2003, we generated net income of Ps.728 million
and a return on average equity of 11.23% (average based on beginning and end-of-period balances).
The number of our branches increased from approximately 125 as of December 31, 1992 to 1,056 branches in Mexico and a
branch in Grand Cayman as of September 30, 2003. During that time, we have been involved in several strategic mergers and
acquisitions, including our acquisition of Bancrecer in 2001 and our mergers with the banking operations of our affiliate Banco del
Centro, S.A., Institución de Banca Múltiple, Grupo Financiero Banorte ("Bancentro") and Banpaís, S.A., Institución de Banca Múltiple
("Banpaís") in 2000. Our branches are located throughout Mexico, with approximately 45% located in northern Mexico (which includes
the Monterrey region), 23% located in central Mexico (which includes the Mexico City region), 17% located in western Mexico (which
includes the Guadalajara region) and 15% located in southern Mexico. We had 2,517 ATMs as of September 30, 2003, 49% of which
were not located in our branches. Approximately 50% of our banking transactions are currently conducted by means of ATMs.
Grupo Financiero Banorte
We are the principal banking subsidiary of Grupo Financiero Banorte, S.A. de C.V. ("GFNorte"), the fourth largest financial
services holding company in Mexico based on total assets as of September 30, 2003. GFNorte owned 96.11% of our capital stock as of
September 30, 2003. Through us and its other subsidiaries, GFNorte provides a wide range of financial and related services in Mexico,
including banking, stock brokerage, insurance, bonding, investment fund management, pension fund management and warehousing.
As of September 30, 2003, we accounted for 96.3% of the total assets and 64.1% of the total equity of GFNorte.
GFNorte also separately owns another banking subsidiary, Bancentro, which it acquired in 1996. In December 2000,
Bancentro's banking operations, including its branch network, loan portfolio (including non-performing loans) and FOBAPROA notes
(which were subsequently converted into IPAB notes), were transferred to us. No consideration was paid in connection with this
transaction. Currently, Bancentro engages in repurchase operations, maintains some non-performing loan portfolios, conducts trading
activities and owns the capital stock of its subsidiaries.
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