Authorization for the Incorporation of UBS Bank Mexico, S.A. into Afirme Grupo Financiero, S.A. de C.V.

DOF: 27/07/2018

OFFICE LETTER through which the incorporation of UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group, is authorized, which will modify its denomination to Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group, as a financial entity integrated into Afirme Financial Group, S.A. de C.V.

At the margin, a seal with the National Coat of Arms, which reads: United Mexican States.- Ministry of Finance and Public Credit.- Undersecretariat of Finance and Public Credit.- Banking, Securities and Savings Unit.- Deputy General Directorate of Banking and Securities.- Deputy General Directorate of Financial Analysis and International Linkage.- Office No. UBVA/DGABV/443/2018.- UBVA/DGAAF/085/2018.

AFIRME FINANCIAL GROUP, S.A. DE C.V.

Present

This Ministry of Finance and Public Credit, through the Deputy General Directorates of Banking and Securities and of Financial Analysis and International Linkage, attached to the Banking, Securities and Savings Unit, based on what is established in articles 31, fraction XXXIV of the Organic Law of the Federal Public Administration; 15 in relation to 19, first and last paragraphs and 20 of the Law to Regulate Financial Groups; in exercise of the powers conferred by article 27, fraction XII, as well as the last paragraph, of the Internal Regulations of the Ministry of Finance and Public Credit, and in attention to the following:

BACKGROUND

Through writings received in this Administrative Unit on October 20, 1 and 24 November, 12 December, all of the aforementioned 2017; February 20 and March 16, both of 2018, the lawyer Jesus Antonio Ramirez Garza, in his capacity as legal representative of "Afirme Financial Group, S.A. de C.V.", personality duly accredited before this Department, requested authorization and approval from this Ministry for the performance of the following legal acts:

a.

The acquisition and incorporation of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" into that Financial Group, under the denomination of "Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group".

b.

The increase in the fixed social capital of that Financial Group by the amount of $360,000,000.00 (Three hundred sixty million pesos 00/100 M.N.), to remain in the amount of $787,472,640.00 (Seven hundred eighty-seven million four hundred seventy-two thousand six hundred forty pesos 00/100 M.N.), to be subscribed by the current shareholders proportionally to their shareholding.

c.

The modification of Articles Second and Seventh of the bylaws of that Financial Group, in the terms of the project presented, in order to reflect the aforementioned incorporation and the capital increase in question.

d.

The modification of the Unique Liability Agreement that that Controlling Company has celebrated with the financial entities integrated into it, to contemplate the incorporation of the aforementioned Multiple Banking Institution.

It adds that the incorporation in question has two main objectives that would generate clear benefits for the Financial Group and for the sectors of the economy in which it participates:

§

Rounding out the operations of the Financial Group with a new investment banking institution, which will be achieved through the business model and operations of the Bank.

§

Having two multiple banking institutions with defined business model profiles.

Regarding this, the Deputy General Directorate of Banking and Securities, in exercise of the powers conferred by article 28, fraction XXII of the Internal Regulations of this Ministry and based on what is established in articles 15, in relation to the last paragraph of 19 and 20 of the Law to Regulate Financial Groups, through offices UBVA/DGABV/772/2017 and UBVA/DGABV/773/2017 of October 23, UBVA/DGABV/810/2017 and UBVA/DGABV/811/2017 of November 6, UBVA/DGABV/866/2017 and UBVA/DGABV/867/2017 of November 27, UBVA/DGABV/927/2017 and UBVA/DGABV/928/2017 of December 18, all of the aforementioned 2017, UBVA/DGABV/109/2018 and UBVA/DGABV/110/2018 of February 22, UBVA/DGABV/176/2018 and UBVA/DGABV/177/2018 of March 20, and UBVA/DGABV/236/2018 of April 19, all of the aforementioned 2018, requested the opinion of the Bank of Mexico and of the National Banking and Securities Commission, respectively.

Through office UBVA/DGABV/248/2018 of April 20, 2018, this Administrative Unit through the Deputy General Directorate of Banking and Securities, communicated to "Afirme Financial Group, S.A. de C.V.", that in order to be able to resolve what is appropriate, it should send within twenty business days following the date of its verification, in the terms of the proposal presented, among others, the following:

a) First Testimony and three simple copies of the public deed in which the protocolization of the Act of the Extraordinary General Shareholders' Meeting of "Afirme Financial Group, S.A. de C.V." is recorded, in which the incorporation of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" into it is agreed, under the denomination of "Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group", the increase in its fixed social capital, the modification of its bylaws, as well as the celebration of the Unique Liability Agreement, in accordance with the project sent through a writing received on March 16, 2018.

b) First Testimony and three simple copies of the public deed in which the protocolization of the Unique Liability Agreement that that Controlling Company has celebrated with the financial entities integrated into it is recorded, to contemplate the incorporation of the aforementioned Multiple Banking Institution, in accordance with the project sent through a writing received on February 20, 2018.

c) Simple copy of the public deed in which the protocolization of the Act of the Extraordinary General Shareholders' Meeting of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" is recorded, in which, among others, its incorporation into "Afirme Financial Group, S.A. de C.V." is agreed, as well as its change of denomination to "Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group". This, regardless of the procedure corresponding to the National Banking and Securities Commission.

Through a writing received in this Administrative Unit on May 4, 2018, the lawyer Jesus Antonio Ramirez Garza, in his capacity as legal representative of "Afirme Financial Group, S.A. de C.V.", personality duly accredited before this Department, sent the following:

i. First Testimony and three simple copies of public deed No. 46,792 of May 2, 2018, granted before the notary of the lawyer Gilberto Federico Allen de Leon, Holder of Public Notary No. 33, of the First Registry and Notarial District of the State of Nuevo Leon, in which the protocolization of the Act of the Extraordinary General Shareholders' Meeting of "Afirme Financial Group, S.A. de C.V.", held on May 2, 2018, is recorded, in which the incorporation into it of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" was agreed, which will modify its denomination to "Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group"; the increase in its fixed social capital; the modification of its bylaws; as well as the celebration of the Unique Liability Agreement.

ii. Regarding what was requested in subsections b) and c) of paragraph 3 above, that Financial Group stated that the simple copy of the Act of the Extraordinary General Shareholders' Meeting of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" in which, among others, its incorporation into "Afirme Financial Group, S.A. de C.V." is agreed, and its change of denomination to "Afirme Investment Bank, S.A. Multiple Banking Institution, Afirme Financial Group", as well as the First Testimony of the Unique Liability Agreement, will be presented to this Administrative Unit once the transaction has been closed, and "Afirme Financial Group, S.A. de C.V." appears as a shareholder of that Multiple Banking Institution.

CONSIDERING

1. That the Bank of Mexico through offices OFI/S33-002-1802023 and OFI002-22, received on February 9 and April 19, both of 2018, expressed its favorable opinion in order for this Ministry to authorize what was requested.

2. That the National Banking and Securities Commission, through office 312-1/66214/2018 received on April 3, 2018, expressed its favorable opinion for this Ministry to authorize the incorporation of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" into "Afirme Financial Group, S.A. de C.V." and approve the modification of Articles Second and Seventh of the Bylaws of that financial group, in order to contemplate the aforementioned incorporation.

3. That from an accounting-financial point of view, there is no objection to authorizing "Afirme Financial Group, S.A. de C.V." to carry out the requested investment.

4. That the authorization requests for the incorporation of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" and the approval of the reform of the bylaws of that Financial Group, referred to in Background 1 of this office, comply with the applicable legal and administrative provisions for the authorization procedure for the direct incorporation of a financial entity as an integrated member of a financial group, and for the approval of the modification of bylaws of a controlling company.

5. That after analyzing the information and documentation presented by "Afirme Financial Group, S.A. de C.V.", and after hearing the opinions of the Bank of Mexico and of the National Banking and Securities Commission, as well as having determined the appropriateness of granting the authorization and approval in question, this Ministry of Finance and Public Credit through the Banking, Securities and Savings Unit issues the following:

RESOLUTION

FIRST.-

The incorporation of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" is authorized, which will modify its denomination to "Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group", as a financial entity integrated into "Afirme Financial Group, S.A. de C.V.", due to the investment that said Financial Group will carry out in the social capital of that credit institution, in the terms agreed by the Extraordinary General Shareholders' Meeting of the aforementioned Controlling Company held on May 2, 2018, protocolized through public deed number 46,792 of that same date, granted before the notary of the lawyer Gilberto Federico Allen de Leon, Holder of Public Notary No. 33, of the First Registry and Notarial District of the State of Nuevo Leon.

This authorization is subject to the fulfillment of the following resolutive conditions:

1. That a simple copy of the public deed in which the protocolization of the Act of the Extraordinary General Shareholders' Meeting of "UBS Bank Mexico, S.A., Multiple Banking Institution, UBS Financial Group" is sent to this Ministry, in which, among others, its incorporation into "Afirme Financial Group, S.A. de C.V." is agreed, as well as its change of denomination to "Afirme Investment Bank, S.A., Multiple Banking Institution, Afirme Financial Group", in terms of the project sent through a writing received on October 20, 2017, within twenty business days following the date on which this office is notified.

2. That the receipt confirmation of the public deed in which the incorporation in question has been agreed in the respective Public Commerce Registry is not sent to this Ministry, within twenty business days following the date on which this office is notified.

SECOND.-

The incorporation in question will take effect from the date on which this authorization and the public instruments in which the Shareholder agreements regarding the incorporation are recorded, are registered in the corresponding Public Commerce Registry, in accordance with what is established in the first paragraph of article 19 of the Law to Regulate Financial Groups.

THIRD.-

This authorization as well as the agreements regarding the incorporation in question must be published in the Official Journal of the Federation in terms of what is established in the second paragraph of article 19 of the Law to Regulate Financial Groups, at the expense of "Afirme Financial Group, S.A. de C.V.".

The carrying out of the aforementioned publications must be notified to this Administrative Unit, attaching a copy of the documentation that accredits it, within five business days following the date on which such publications are verified.

FOURTH.-

The modification of Articles Second and Seventh of the bylaws of "Afirme Financial Group, S.A. de C.V." is approved, in the terms agreed by its Extraordinary General Shareholders' Meeting held on May 2, 2018, protocolized through public deed number 46,792 of that same date, granted before the notary of the lawyer Gilberto Federico Allen de Leon, Holder of Public Notary No. 33, of the First Registry and Notarial District of the State of Nuevo Leon.

FIFTH.-

In order for this Ministry, through the Banking, Securities and Savings Unit, to be able to approve the Unique Liability Agreement that "Afirme Financial Group, S.A. de C.V." celebrates with its integrated financial entities, the content of the various UBVA/DGABV/248/2018 of April 20, 2018 is reiterated, in the sense that it must send the First Testimony and three simple copies of the public deed in which the protocolization of said Unique Liability Agreement is recorded, in accordance with the project sent through a writing received on February 20, 2018, within ten business days following the date on which said protocolization is verified.

Finally, the First Testimony of the Public Deed attached to its writing is returned to "Afirme Financial Group, S.A. de C.V.", with the indication that it must inform this Department about the date and other data related to the inscription it carries out of the same before the respective Public Commerce Registry, within a period of ten business days counted from the date on which said inscription is verified.

This authorization and approval are issued based on the information and documentation provided by "Afirme Financial Group, S.A. de C.V." and are limited exclusively to the acts and operations that, in accordance with the applicable provisions, compete to resolve this Banking, Securities and Savings Unit and do not prejudge the carrying out of any corporate act that said Company carries out, which imply the prior authorization or approval of the financial, tax or any other authorities, in terms of the current regulations.

Without further particular, I take the opportunity to send you a cordial greeting.

Sincerely

Mexico City, June 18, 2018.-

The Deputy General Director of Banking and Securities, Ana Laura Villanueva Vega.- Signature.- The Deputy General Director of Financial Analysis and International Linkage, Raúl Alejandro Rosales Guadarrama.- Signature.

(R.- 471223)

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