Resolution modifying the general provisions applicable to popular savings and credit entities, integration organizations, community financial societies, and rural financial integration organisms under the Popular Savings and Credit Law

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DOF: 23/01/2018

RESOLUTION that modifies the general provisions applicable to popular savings and credit entities, integration organizations, community financial societies, and rural financial integration organisms, referred to in the Popular Savings and Credit Law.

A seal with the National Coat of Arms, which reads: United Mexican States.- Ministry of Finance and Public Credit.- National Banking and Securities Commission, is placed at the margin.

The National Banking and Securities Commission, based on the provisions of articles 46 Bis, 117, and 119 Bis 4 of the Popular Savings and Credit Law; 4, fractions III, IV, XXXVI, and XXXVIII, and 16, fraction I of the Law of the National Banking and Securities Commission; 12, 15 first paragraph, 21 fraction I, subparagraphs a) and b), 42, fraction I, and 58 of the Internal Regulations of the National Banking and Securities Commission; as well as articles 13, fractions I, subparagraph 1), II, subparagraph 25), 38, fraction I, subparagraphs 2), 3), and 11), VII, 42), and 51) of the Agreement by which the President of the National Banking and Securities Commission delegates powers to the Vice Presidents, General Directors, and Directors of General Adjoints of the Commission, and

CONSIDERING

That it is convenient to adjust the accounting criteria applicable to popular financial societies, community financial societies with operation levels I to IV, and rural financial integration organisms, so that these entities can cancel, in the period in which they occur, the excesses in the balance of preventive estimates for credit risks, as well as to recognize the recovery of previously written-off credits against the item preventive estimates for credit risks, in order to make them consistent with the international standards established in the International Financial Reporting Standards, and

That additionally, it is important to incorporate certain Financial Information Standards issued by the Mexican Council of Financial Reporting Standards, A.C., so that they become applicable to popular financial societies, community financial societies with operation levels I to IV, and rural financial integration organisms at the time of determining the deadline for their application, with the object that these financial entities are able to comply with them, has resolved to issue the following:

RESOLUTION THAT MODIFIES THE GENERAL PROVISIONS APPLICABLE TO POPULAR SAVINGS AND CREDIT ENTITIES, INTEGRATION ORGANISMS, COMMUNITY FINANCIAL SOCIETIES, AND RURAL FINANCIAL INTEGRATION ORGANISMS, REFERRED TO IN THE POPULAR SAVINGS AND CREDIT LAW

SOLE ARTICLE.- The Annex E, Criteria A-2 "Application of particular standards", B-4 "Credit Portfolio", and D-2 "Income Statement" of the "General provisions applicable to popular savings and credit entities, integration organizations, community financial societies, and rural financial integration organisms, referred to in the Popular Savings and Credit Law" published in the Official Gazette of the Federation on December 18, 2006, and modified through resolutions published in the said Official Gazette on January 18 and August 11, 2008; December 16, 2010; December 18, 2012; January 12, February 6, April 2, September 22, and October 29, 2015; January 7, February 2, April 22, July 11, September 28, and December 27, 2016; and March 10, May 31, July 24, and October 6, 2017, are REFORMED, to read as follows:

TITLES FIRST to NINTH

...

Annexes A to D

...

Annex E

Accounting Criteria for Popular Financial Societies, Community Financial Societies, and Rural Financial Integration Organisms.

Annexes F to X

...

TRANSITORY CLAUSES

FIRST.- Popular financial societies, community financial societies with operation levels I to IV, and rural financial integration organisms must adjust to what is provided in Criteria B-4 "Credit Portfolio" and D-2 "Income Statement" of Annex E, which are modified by this Resolution, starting from January 1, 2019.

Notwithstanding the foregoing, popular financial societies, community financial societies with operation levels I to IV, and rural financial integration organisms may opt to apply Criteria B-4 "Credit Portfolio" and D-2 "Income Statement" of Annex E, which are reformed by this instrument, starting from the day following its publication, being obliged to notify the National Banking and Securities Commission of having exercised such option no later than 10 business days following the date on which the early application of the aforementioned criteria will begin.

SECOND.-

The Financial Information Standards B-17 "Determination of fair value", C-3 "Accounts receivable", C-9 "Provisions, contingencies, and commitments", C-16 "Impairment of financial assets", C-19 "Financial liabilities", C-20 "Financial assets to collect principal and interest", D-1 "Revenue from contracts with customers", and D-2 "Costs from contracts with customers" issued by the Mexican Council of Financial Reporting Standards, A.C., and referred to in paragraph 3 of Criterion A-2 "Application of particular standards" of Annex E, which is modified by this instrument, will enter into force on January 1, 2019.

Respectfully,

Mexico City, January 10, 2018. - National Banking and Securities Commission: The Vice President of Normativity, Arcelia Olea Leyva. - Signature. - The Vice President of Supervision of Development Banking and Popular Finance, Cecilia Teresa Mondragón Lora. - Signature.

A-2 APPLICATION OF PARTICULAR STANDARDS

Objective and scope

This criterion aims to clarify the application of particular standards of the NIFs, as well as clarifications thereof.

1

The subject matter of this criterion is:

a)

the application of some of the particular standards made known in the NIFs, and

b)

the clarifications to the particular standards contained in the NIFs.

Financial Information Standards

2

In accordance with what is established in criterion A-1 "Basic scheme of the set of accounting criteria applicable to popular financial societies, community financial societies, and rural financial integration organisms", entities will observe, until there is an express pronouncement by the CNBV, the particular standards contained in the bulletins or NIFs detailed below, or in the NIFs that replace or modify them:

NIF Series B "Standards applicable to financial statements as a whole"

Accounting changes and corrections of errors ............................................................... B-1

Business combinations .................................................................................... B-7

Consolidated or combined financial statements ............................................................ B-8

Financial information at interim dates ......................................................................... B-9

Effects of inflation .......................................................................................... B-10

Subsequent events after the date of the financial statements .................................................. B-13

Earnings per share .............................................................................................. B-14

Determination of fair value ............................................................................ B-17

NIF Series C "Standards applicable to specific concepts of financial statements"

Accounts receivable ............................................................................................. C-3

Prepayments .............................................................................................. C-5

Property, plant, and equipment .................................................................................. C-6

Investments in associates, joint ventures, and other permanent investments ...................................................................................... C-7

Intangible assets .............................................................................................. C-8

Provisions, contingencies, and commitments .................................................................. C-9

Equity ................................................................................................. C-11

Financial instruments with characteristics of liability, equity, or both ...................................................................................................... C-12

Impairment of long-lived assets and their disposal ............................................................ C-15

Impairment of financial assets ............................................................................................ C-16

Obligations associated with the retirement of property, plant, and equipment ..................................... ... C-18

Financial liabilities ........................................................................... C-19

Financial assets to collect principal and interest .................................................... C-20

Joint control agreements ................................................................................ C-21

NIF Series D "Standards applicable to income determination problems"

Revenue from contracts with customers ........................................................................... D-1

Costs from contracts with customers ............................................................................. D-2

Employee benefits .................................................................................... D-3

Income taxes ......................................................................................... D-4

Leases ................................................................................................. D-5

Capitalization of comprehensive financing result ..................................................... D-6

Share-based payments ................................................................................... D-8

3

Additionally, entities will observe the NIFs issued by the CINIF on topics not foreseen in the accounting criteria for popular financial societies, community financial societies, and rural financial integration organisms, provided that:

a)

they are in force with definitive status;

b)

they are not applied in advance;

c)

they do not contravene the philosophy and general concepts established in the accounting criteria for popular financial societies, community financial societies, and rural financial integration organisms, and

d)

there is no express pronouncement by the CNBV, among others, regarding clarifications to the particular standards contained in the NIF issued, or regarding its non-applicability.

Clarifications to the particular standards contained in the NIFs

4

Taking into consideration that entities carry out specialized operations, it is necessary to establish clarifications that adapt the particular standards of recognition, valuation, presentation, and, if applicable, disclosure, established by the CINIF. In virtue thereof, entities, while observing what is established in the previous paragraph, must adjust to the following:

B-8 Consolidated or combined financial statements

5

Regarding the requirements for the consolidation of financial statements referred to in NIF B-8, investment societies are exempt from the uniform recognition of accounting criteria for popular financial societies, community financial societies, and rural financial integration organisms, solely with respect to the restatement of financial statements, considering that this criterion is not applicable to investment societies.

B-10 Effects of inflation

Determination of the monetary position

6

In the case of an inflationary environment, based on what is stated by NIF B-10, the following must be attended to:

7

Entities must disclose the initial balance of the main monetary assets and liabilities used to determine the monetary position of the period, differentiating, if applicable, those that affect from those that do not affect the financial margin.

Price index

8

The entity must use the value of the Investment Unit (UDI) as the price index.

Result from monetary position

9

The result from monetary position (REPOMO) that has not been presented directly in equity or capitalized as established in NIF B-10, must be presented in the income statement in a specific item within the financial margin if it comes from financial margin items; otherwise, it will be presented within the item of other income (expenses) from operations.

10

The REPOMO related to items whose valuation adjustments are recognized in equity, must be presented in the equity account corresponding to its nature, for example, the REPOMO attributable to the valuation effect of available-for-sale securities must be presented in the similar item.

C-3 Accounts receivable

Scope

11

For the purposes of Bulletin C-3, accounts receivable derived from the operations referred to in criteria B-3 "Repo transactions" and B-4 "Credit Portfolio", issued by the CNBV, as well as those from operating lease operations, indicated in paragraphs 50 to 53 of this criterion, shall not be included, since the applicable standards of recognition, valuation, presentation, and disclosure are contemplated therein.

Loans to officials and employees

12

Interest derived from loans to officials and employees, when such loans are stipulated in the employment contract, will be presented in the income statement in the item of other income (expenses) from operations.

Loans to retirees

13

Loans to retirees will be considered as part of the credit portfolio, and must adhere to the guidelines established in criterion B-4, except when, just like active employees, the collection of said loan is carried out directly, in which case they will be recorded in accordance with the guidelines applicable to loans to officials and employees mentioned above.

Estimate for uncollectibility or difficult collection

14

The estimate for uncollectibility or difficult collection corresponding to items directly related to the credit portfolio such as litigation expenses, will be determined by applying the same risk percentage assigned to the associated credit, as established in criterion B-4.

15

For the loans that entities grant to their officials and employees, as well as for those accounts receivable other than those indicated in the previous paragraph and those of paragraph 18, relating to identified debtors whose maturity is agreed from origin to a term greater than 90 natural days, they must create, if applicable, an estimate that reflects their degree of uncollectibility.

16

Such estimate must be obtained by conducting a study that serves as a basis to determine the different quantifiable future events that could affect the amount of those accounts receivable, thereby showing the estimated recovery value of the enforceable rights.

17

Regarding operations with immediate collection documents not collected referred to in criterion B-1 "Cash and cash equivalents", at 15 natural days following from the date on which they have been transferred as other debtors, these will be classified as overdue debts, and an estimate must be constituted simultaneously for the total amount thereof.

18

The estimate of accounts receivable not included in paragraphs 15, 16, and 18 above must be constituted for the total amount of the debt according to the following deadlines:

a)

at 60 natural days following their initial recognition, when they correspond to unidentified debtors, and

b)

at 90 natural days following their initial recognition, when they correspond to identified debtors.

19

No estimate for uncollectibility or difficult collection will be constituted in the following cases:

a)

tax balances in favor;

b)

creditable value-added tax, and

c)

liquidating accounts.

20

The concepts resulting from operations between the parent company and branches will be cleared at least at the close of each month, so they should not have a balance on that date.

C-7 Investments in associates, joint ventures, and other permanent investments

21

Regarding the requirements for the application of the equity method referred to in NIF C-7, investment societies are exempt from the uniform recognition of accounting criteria for popular financial societies, community financial societies, and rural financial integration organisms, solely with respect to the restatement of financial statements, considering that this criterion is not applicable to investment societies.

C-9 Liability, provisions, contingent assets and liabilities, and commitments

Scope

22

For the purposes of Bulletin C-9, liabilities related to the operations referred to in criteria B-3 and B-4 are not included, as these are contemplated in said criteria.

23

Likewise, what is established in Bulletin C-9 will not be applicable for the determination of guarantees granted, in which case the indication in criterion B-6 "Guarantees" will be followed.

Traditional deposits

24

Liabilities arising from traditional deposits will be recorded taking as a basis the contractual value of the obligation, recognizing accrued interest directly in the results of the period as an interest expense.

25

The principal and interest of deposit operations that have not had movement from withdrawals or deposits, must continue to be recognized within the item of traditional deposits as accounts without movement, while they do not prescribe in favor of public welfare patrimony according to applicable legislation. At the moment they prescribe according to said legislation, the amount recognized as accounts without movement must be cancelled against cash.

26

The securities included in traditional deposits will be distinguished according to the following classification:

a)

securities placed at nominal value, and

b)

securities placed at a price different from the nominal value (with premium or at a discount).

27

Securities placed at nominal value will adhere to what is established in paragraph 25.

28

Those securities placed at a price different from the nominal value, in addition to what is established in paragraph 25, must recognize a deferred charge or credit for the difference between the nominal value of the security and the amount of cash received for it. Likewise, when securities are placed at a discount and do not accrue interest (zero coupon), they will be recorded at the time of issuance taking as a basis the amount of cash received for them.

29

The amount of issuance expenses, as well as the discount or premium in placement, will be recorded as a deferred charge or credit, as appropriate, and must be recognized in the results of the period as interest expenses or income, as appropriate, as they accrue, taking into consideration the term of the security that gave rise to it, in the terms referred to in Bulletin C-9.

30

For presentation purposes, the premium or discount on placement must be shown within the liability that gave rise to it, and the deferred charge for issuance expenses will be presented within the item of other assets.

31

In addition to the disclosure required in the aforementioned Bulletin C-9, the characteristics of the issuance of the credit securities issued must be disclosed in notes to the financial statements: amount; number of securities in circulation; nominal value; discount or premium; rights and form of redemption; guarantees; maturity; interest rate; effective interest rate; amortized amount of discount or premium in results; amount of issuance expenses and other related expenses, and proportion that the authorized amount bears to the issued amount.

Bank loans and from other organisms

32

For their recognition, they will adhere to what is established in paragraph 25.

33

They must disclose in notes to the financial statements the total amount of bank loans, as well as that of other organisms, indicating for both the type of currency, the maturity terms, guarantees, and average weighted rates to which, if applicable, they are subject.

34

In the case of credit lines received by the entity in which not all the authorized amount is exercised, the unused part of them must not be presented in the balance sheet. However, entities must disclose through notes to the financial statements the unused amount, attending to what is established in criterion A-3 "Application of general standards", regarding the disclosure of financial information.

Subordinated obligations of mandatory conversion to equity

35

The subordinated obligations of mandatory conversion to equity that the entity issues and are acquired directly or through a trust by those entities that maintain direct or indirect participation in the capital of the entity itself, must be recorded as a liability.

36

The amortization of the premium, the discount, as well as the issuance expenses of both those subordinated obligations of mandatory conversion to equity classified as liability in the terms of Bulletin C-9, as well as those indicated in the previous paragraph, must be recognized in the results of the period as an interest expense or income.

37

Commissions paid derived from loans received by the entity or from the placement of debt, will be recorded on the date they are generated in the results of the period, in the item of commissions and fees paid.

C-11 Equity

38

For the purposes of this Bulletin, in the case of rural financial integration organisms, equity will be understood as patrimony, which is divided into:

a) contributed patrimony, which is represented by the contributions of the community financial societies that integrate it, as well as by its foundational patrimony according to applicable legislation, and

b) earned patrimony, which corresponds to the Social Reserve Fund, to the results of previous periods, the net result, and to the items that form part of comprehensive income.

The patrimony, both contributed and earned, includes its inflationary effect.

39

In notes to the financial statements, in addition to what is established, the main characteristics and restrictions of the Social Reserve Fund constituted in accordance with applicable legislation must be disclosed.

40

At the bottom of the balance sheet, the historical amount of social capital must be disclosed, and in the case of rural financial integration organisms, the historical amount of contributions referred to in subsection a) of the previous paragraph 39 must be disclosed.

C-21 Joint Control Agreements

41

Regarding the recognition of entities' participation in a joint operation, investment societies are exempt from the uniform recognition of accounting criteria for popular financial societies, community financial societies, and rural financial integration organisms, solely with respect to the restatement of financial statements, considering that this criterion is not applicable to investment societies.

D-3 Employee Benefits

42

The liability generated by employee benefits will be presented in the balance sheet under the item other payables.

43

Additionally, through notes to the financial statements, it must be disclosed:

a)

the manner in which the Workers' Participation in Profits (PTU) was determined, explaining the bases used for its calculation, and

b)

the identification of obligations for short- and long-term employee benefits.

44

Prepayments arising from the application of this NIF will form part of the other assets item.

D-4 Income Taxes

45

For the case of income taxes incurred, it must be disclosed through notes to the financial statements the manner in which these were determined, explaining the bases used for their calculation.

46

Regarding the disclosure required in NIF D-4 on the concepts of temporary differences, in addition, those related to the financial margin and the main operations of the entities must be disclosed, for example, those arising from the preventive estimate for credit risks and by the valuation of shares.

D-5 Leases

Capitalizable Leases

Scope

47

What is established in this Bulletin will not be applicable to credits granted by the entity for capitalizable lease operations, which is a matter of criterion B-4.

Requirements

48

For the purposes of the requirements established in paragraph 33 of Bulletin D-5, it will be understood that the lease period is substantially equal to the remaining useful life of the leased asset if such contract covers at least 75% of its useful life. Likewise, the present value of minimum payments will be substantially equal to the market value of the leased asset if such present value constitutes at least 90% of that value.

Operating Leases

Accounting for the Lessor

49

For the amount of amortizations that have not been settled within 30 natural days following the maturity date of the payment, the lessor must create the corresponding estimate, suspending the accumulation of lease income, keeping its control in off-balance sheet accounts under the item other registration accounts.

50

The lessor must present the receivable account in the balance sheet under the item other receivables, and the lease income under the item other income (expenses) from operations in the statement of results.

51

In addition to the disclosure required in paragraph 62 of Bulletin D-5, the lessor must disclose in notes to the financial statements the amount of lease income recognized in the results of the period.

Accounting for the Lessee

52

For presentation purposes, the lessee must include the lease liability in the balance sheet as part of the item various creditors and other payables, and in the statement of results the lease expense under the item administration and promotion expenses.

Subleases and Similar Transactions

Accounting for the Original Lessee

53

The effects on the results of the period referred to in paragraph 76 of Bulletin D-5, relating to the termination of the original lease, will be presented under the item other income (expenses) from operations in the statement of results.

D-6 Capitalization of the Comprehensive Financial Result

54

For the purposes of this NIF, Comprehensive Financial Result is understood as the following concepts: a) interest; b) result from monetary position, c) gain or loss on changes and d) the other costs referred to in NIF D-6. These concepts may be capitalized to qualifying assets, instead of being recognized in the statement of results as income or expenses for interest or other income (expenses) from operations, as appropriate, based on what is established in the aforementioned NIF D-6.

55

The foregoing will not be applicable to qualifying assets in which a specific accounting criterion issued by the CNBV establishes a different treatment.

56

B-4 CREDIT PORTFOLIO

Objective and Scope

The present criterion aims to define the particular norms relative to the recognition, valuation, presentation, and disclosure in the financial statements of the credit portfolio of the entities.

1

This criterion also includes the accounting guidelines relative to the preventive estimate for credit risks.

2

The following are not subject to this criterion:

a)

The establishment of the methodology for the qualification and constitution of the preventive estimate for credit risks.

b)

The accounting norms relative to values issued in series or in mass, which are quoted in recognized markets and which the entity maintains in its own position, even if they are linked to credit operations, being a matter of criterion B-2 "Investments in securities".

Definitions

3

Borrower.- The natural or legal person, or trust to whom a credit is granted.

4

Aforo.- The amount of the nominal value of the credit rights transferred in a financial factoring operation, which the factor does not finance to the factor and which is obligated to deliver to the latter, once the collection of the portfolio subject to factoring is carried out.

5

Capitalizable Lease.- A lease that transfers substantially all the risks and benefits inherent to the ownership of an asset.

6

Portfolio Qualification.- Methodology used by entities to recognize the credit risk associated with the credits granted by them.

7

Past-due Portfolio.- That composed of credits whose borrowers are declared in commercial bankruptcy, or whose principal, interest, or both, have not been settled in the terms originally agreed, considering for this purpose what is established in paragraphs 60 to 73 of this criterion.

8

Performing Portfolio.- That integrated by credits that are current in their payments of both principal and interest, as well as by those credits with principal or interest payments past due that have not been located in the situations provided for in this criterion to consider them as past-due, and those that having been classified as past-due portfolio are restructured or renewed and have evidence of sustained payment in accordance with what is established in this criterion.

9

Write-off.- It is the cancellation of the credit when there is evidence that formal collection efforts have been exhausted or the practical impossibility of recovering the credit has been determined.

10

Commission for the granting of credit.- Exists when the entity and the borrower have agreed from the date the credit was arranged, the collection of a monetary fee for recovery of the costs or expenses incurred to grant the credit regardless of the moment in which the disbursements of the same are made. Likewise, commissions charged for restructuring or renewal of credits are considered part of these commissions.

11

Consolidation of credits.- It is the integration into a single credit, of two or more credits granted by the same entity to the same borrower.

12

Amortized Cost.- For the purposes of this criterion, it is the valuation method that integrates the amount effectively granted to the borrower, adjusted by the accrued interest that have been recognized in accordance with what is established in this criterion, the insurance that, if any, had been financed, the collections of principal and interest, as well as by the discounts, waivers, bonuses, and discounts that have been granted.

13

Credit.- Asset resulting from the financing granted by entities based on what is established in the applicable legal provisions.

14

Housing Credits.- To the direct credits denominated in national currency or in investment units (UDIs), as well as the interest they generate, granted to natural persons and destined for the acquisition, construction, remodeling, or improvement of housing without commercial speculation purpose that have a mortgage guarantee on the borrower's housing; including those granted for such purposes to ex-employees of the entities and those liquidity credits guaranteed by the borrower's housing.

15

Commercial Credits.- To the direct or contingent credits, including bridge credits denominated in national currency or in UDIs, microcredits, as well as the interest they generate, granted to legal persons or natural persons with business activity and destined for their commercial activity; to credits for financial factoring operations and to credits for capitalizable lease operations that are celebrated with said legal or natural persons; credits granted to trustees acting under the auspices of trusts and credit schemes commonly known as "structured" in which there is a patrimonial affectation that allows evaluating the risk associated with the scheme individually. Likewise, liquidity loans granted to other popular or community financial societies in accordance with applicable legislation will be included.

16

Consumer Credits.- To the direct credits, including liquidity credits that do not have real estate guarantee, denominated in national currency or in UDIs, as well as the interest they generate, granted to natural persons, derived from credit card operations, personal credits, payroll credits (different from those granted by credit card), credits for the acquisition of durable consumer goods (known as ABCD), which includes among others the auto credit and capitalizable lease operations that are celebrated with natural persons; including those credits granted for such purposes to the ex-employees of the entities.

17

Debtor of the credit rights subject to financial factoring.- The natural or legal person to whom the credit rights transferred from the factor to the factor are originally exigible in a financial factoring operation.

18

Preventive Estimate for Credit Risks.- Affectation that is made against the results of the period and that measures that portion of the credit that is estimated to not have viability of collection.

19

Factor.- The natural or legal person that transfers the credit rights it has in its favor, whose payment obligation is borne by the debtor of the credit rights subject to financial factoring.

20

Financial Factoring.- Operation by virtue of which the factor agrees with the factor, who may be a natural or legal person, to acquire credit rights that the latter has in its favor for a determined or determinable price, in national, foreign currency, or UDIs, regardless of the date and the form in which it is paid, it being possible to agree that the factor remains obligated to respond for the punctual and timely payment of the credit rights transmitted to the factor.

21

Factor.- The entity that acquires the credit rights in favor of the factor.

22

Credit Line.- Amount of money made available to the customer by the entity, for a determined period of time, including overdraft lines in deposits with immediate exigibility.

23

Productive Microcredit.- It is that credit granted by the entity to its borrowers or groups of borrowers, destined to finance their productive activity and whose source of payment constitutes the flows originated by said productive activity.

In any case, the groups of borrowers mentioned must be jointly or solidarily obligated.

24

Reduced Price Purchase Option.- Agreement that allows the lessee, at its choice, to buy the leased property at a significantly low price in relation to the market value at the moment the option can be exercised. This situation allows supposing that said option will be exercised.

25

Payment.- Real delivery of the thing or quantity due or the provision of the service that had been agreed. Financial income from accrual derived from capitalizable lease or financial factoring operations, nor interest that is capitalized, will not be considered as payment.

26

Write-offs, discounts, waivers, bonuses, and discounts that are made to a credit or group of credits are not considered payments.

27

Sustained Credit Payment.- Borrower's payment compliance without delay for the total exigible amount of principal and interest, for a minimum of three consecutive amortizations of the credit's payment scheme, or in the case of credits with amortizations that cover periods greater than 60 natural days, the payment of one installment.

28

For credit restructurings with periodic payments of principal and interest whose amortizations are less than or equal to 60 days in which the payment periodicity is modified to periods less than, the number of amortizations equivalent to three consecutive amortizations of the original payment scheme of the credit must be considered. Regarding credits that remain with a single payment scheme of principal at maturity, what is provided in the following paragraph 32 will be applicable to them.

29

In the case of consolidated credits, if in accordance with paragraph 72, two or more credits had originated the transfer to past-due portfolio, to determine the required amortizations, the original payment scheme of the credit whose amortizations are equivalent to the longest term must be attended.

30

In any case, in the demonstration that there is sustained payment, the entity must have available to the CNBV and the Federation in charge of its auxiliary supervision, evidence that justifies that the borrower has payment capacity at the moment the restructuring or renewal is carried out to face the new conditions of the credit. The elements that must be taken into account for such purposes are at least the following: the intrinsic probability of default of the borrower, the guarantees granted to the restructured or renewed credit, the payment priority in front of other creditors, and the liquidity of the borrower before the new financial structure of the financing.

31

Regarding credits with single payment of principal at maturity, regardless of whether the payment of interest is periodic or at maturity, it is considered that there is sustained payment of the credit when any of the following situations occurs:

a)

the borrower has covered at least 20% of the original amount of the credit at the moment of restructuring or renewal, or well,

b)

the amount of the accrued interest in accordance with the payment scheme for restructuring or renewal corresponding to a term of 90 days has been covered.

32

The prepayment of the amortizations of restructured or renewed credits, different from those with single payment of principal at maturity, regardless of whether interest is paid periodically or at maturity, is not considered sustained payment. Such is the case of the amortizations of restructured or renewed credits that are paid without having passed the natural days equivalent to the periods required in accordance with the previous paragraph 28.

33

Restructuring.- It is that operation that derives from any of the following situations:

a)

expansion of guarantees that cover the credit in question, or well,

b)

modifications to the original conditions of the credit or to the payment scheme, among which are:

change of the interest rate established for the remaining term of the credit;

change of accounting unit;

granting of a grace period regarding the compliance of payment obligations in accordance with the original terms of the credit, or

extension of the credit term.

34

Renewal.-

It is that operation in which the balance of a credit is settled partially or totally, through the increase in the original amount of the credit, or well with the product coming from another credit contracted with the same entity,

in which the same debtor, a solidary obligor of said debtor, or another person who by their patrimonial links constitutes common risks is part.

35

Notwithstanding the foregoing, a credit will not be considered renewed by the disbursements made during the validity of a pre-established credit line, provided that the borrower has settled the totality of the payments exigible in accordance with the original conditions of the credit.

36

Credit Risk.- For the purposes of this criterion, it is defined as the potential loss due to the lack of payment of a borrower or counterparty in the operations carried out by the entities, including the real or personal guarantees granted to them, as well as any other mitigation mechanism used by the entities.

37

Unsettled Balance.- It is the result obtained by the application of the amortized cost.

Recognition and Valuation Norms

38

The balance to be registered in the credit portfolio will be the amount effectively granted to the borrower and, if any, the insurance that had been financed. To this amount, any type of interest that in accordance with the credit's payment scheme is accrued will be added.

39

In cases where the collection of interest is made in advance, these will be recognized as an advance collection in the item deferred credits and advance collections. Said collection will be amortized during the life of the credit under the straight-line method against the results of the period, in the item interest income.

Credit Lines

40

In the case of credit lines that the entity has granted, in which not all the authorized amount is exercised, the unused part of them must be kept in off-balance sheet accounts.

Partial Payments in Kind

41

Partial payments received in kind to cover the amortizations (principal and/or interest) accrued or, if any, past due, will be registered in accordance with what is established in criterion B-5 "Assets Adjudicated".

Capitalizable Lease Operations

42

In capitalizable lease operations, that is, those that meet the requirements established in criterion A-2 "Application of particular norms", in which the entity acts as lessor, it will recognize at the beginning of the contract within its credit portfolio the contractual value of the lease operation, against the cash outflow and the corresponding financial income to accrue. Said financial income to accrue will be registered as a deferred credit, which will be recognized based on the unsettled balance of the credit against the results of the period, in the item interest income.

43

For the guarantee deposits received by the lessor, it must register the cash inflow against the corresponding liability.

44

At the moment the lessee obligates itself to adopt the reduced price purchase option, the entity must recognize its amount as part of the credits for capitalizable lease operations, against a deferred credit which will be amortized on a straight-line basis during the remaining term of the contract. In case the purchase option is adopted at maturity, on that date the income will be recognized directly in results.

45

When the lessee opts to participate in the sale price of the goods to a third party, the entity will recognize the income corresponding to it at the moment of the sale against the results of the period as other income (expenses) from operations.

Financial Factoring Operations

46

At the beginning of the operation, the value of the portfolio received will be recognized in the asset against the cash outflow, the agreed aforo recognized as other payables, and, if any, the financial income to accrue that derives from factoring operations.

47

The financial income to accrue referred to in the previous paragraph will be determined, if any, by the difference between the value of the portfolio received deducted from the aforo and the cash outflow. Said financial income to accrue must be recognized within the item deferred credits and advance collections and amortized under the straight-line method during the life of the credit, in the item interest income.

48

In the event that the operation generates interest, these will be recognized as they accrue.

49

The amount of advances that, if any, are granted to the factor will be recognized as part of the financial factoring operations, within the concept of commercial credits.

Commissions Charged for the Granting of Credit

50

Commissions charged for the granting of credit will be registered as a deferred credit, which will be amortized against the results of the period as interest income, under the straight-line method during the life of the credit, except those that originate from revolving credits which must be amortized for a period of 12 months.

51

Regarding commissions charged for restructuring or renewal of credits, they must be added to the commissions that had originated in accordance with the previous paragraph, recognized as a deferred credit, which will be amortized against the results of the period as interest income, under the straight-line method during the new term of the credit.

52

Commissions that are recognized after the granting of the credit, those that are generated as part of the maintenance of said credits, nor those that are charged on account of credits that have not been placed, will not enter this category. In the case of commissions charged on account of credit card annual fee, whether the first annual fee or subsequent ones on account of renewal, they will be recognized as a deferred credit and will be amortized in a period of 12 months against the results of the period in the cited item of commissions and fees charged.

53

Likewise, in the case of fees charged that originate from the granting of a credit line that has not been drawn, at that moment they will be recognized as a deferred credit, which will be amortized against the period's results as interest income, using the straight-line method for a period of 12 months. In the event that the credit line is canceled before the aforementioned 12-month period concludes, the outstanding balance to be amortized must be recognized directly in the period's results under the charged fees and tariffs item, on the date the line is canceled.

Associated Costs and Expenses

54

The costs and expenses associated with the granting of credit will be recognized as a deferred charge, which will be amortized against the period's results as an interest expense, during the same accounting period in which the income from fees charged for the granting of the credit referred to in this section is recognized.

55

For the purposes of the preceding paragraph, only those costs or expenses that are incremental and directly related to activities carried out by the entities to grant the credit will be understood as associated costs or expenses with the granting of credit, for example, the credit evaluation of the debtor, evaluation and recognition of guarantees, negotiations for the terms of the credit, preparation and processing of credit documentation, and closing or cancellation of the transaction, including the proportion of compensation to employees directly related to the time invested in the development of those activities.

56

Any other cost or expense not included in the preceding paragraph, including those related to promotion, advertising, potential clients, administration of existing credits (follow-up, control, recoveries, etc.) and other auxiliary activities related to the establishment and monitoring of credit policies, will be recognized directly in the period's results as they are incurred in the corresponding item according to the nature of the cost or expense. In the case of costs and expenses associated with the granting of credit cards, these will be recognized as a deferred charge, which will be amortized over a period of 12 months against the period's results in the corresponding item according to the nature of the cost or expense.

57

Fees charged or pending collection, as well as associated costs and expenses relative to the granting of credit, will not form part of the credit portfolio.

Charged Fees and Tariffs

58

Fees and tariffs other than those charged for the granting of credit will be recognized against the period's results in the charged fees and tariffs item, on the date they are earned. In the event that part or all of the consideration received for the charging of the corresponding fee or tariff is received in advance of the earning of the related income, such advance must be recognized as a liability.

Transfer to Past-Due Portfolio

59

The outstanding balance according to the payment conditions established in the credit contract will be registered as past-due portfolio when:

it is known that the borrower has been declared in commercial bankruptcy, in accordance with the Commercial Bankruptcy Law, or

their amortizations have not been fully settled in the terms originally agreed, considering the following for this purpose:

a)

if the debts consist of credits with a single payment of principal and interest at maturity and present 30 or more calendar days past due;

b)

if the debts refer to credits with a single payment of principal at maturity and with periodic interest payments and present 90 or more calendar days past due for the respective interest payment, or 30 or more calendar days past due for the principal;

c)

if the debts consist of credits with periodic partial payments of principal and interest, including housing credits and present 90 or more calendar days past due;

d)

if the debts consist of revolving credits and present two monthly billing periods past due, or, in the event that the billing period is longer than monthly, the corresponding to 60 or more calendar days past due, and

e)

the immediate collection documents referred to in criterion B-1 "Cash and Cash Equivalents", will be reported as past-due portfolio at the moment such event occurs.

60

With respect to the maturity periods referred to in item 2 of the preceding paragraph, monthly periods may be used, independent of the number of days each calendar month has, in accordance with the following equivalencies:

30 days one month

60 days two months

90 days three months

61

Likewise, in the event that the fixed term expires on an inactive day, such term will be understood to conclude on the first following business day.

Restructurings and Renewals

62

Past-due credits that are restructured or renewed will remain within the past-due portfolio, as long as there is no evidence of sustained payment.

63

Credits with a single payment of principal at maturity, regardless of whether interest is paid periodically or at maturity, that are restructured during their term or renewed at any time, will be considered as past-due portfolio as long as there is no evidence of sustained payment, in accordance with what is established in paragraph 32 of this criterion.

64

Credits granted under a credit line, revolving or not, that are restructured or renewed at any time, may remain in the active portfolio as long as there are elements that justify the debtor's payment capacity. Additionally, the borrower must have:

a)

settled all interest due, and

b)

covered all payments to which they are obligated under the contract on the date of the restructuring or renewal.

65

Regarding credit facilities made under a line, when they are restructured or renewed independently of the credit line that supports them, they must be evaluated in accordance with this section attending to the characteristics and conditions applicable to the drawn or drawn facilities that are restructured or renewed. If such analysis concludes that one or more of the facilities granted under a credit line must be transferred to past-due portfolio as a result of their restructuring or renewal; the total drawn balance of the credit line must be transferred to past-due portfolio as long as there is no evidence of sustained payment.

66

Active credits with characteristics different from those indicated in paragraphs 64 to 66 above that are restructured or renewed, without at least 80% of the original credit term having elapsed, will be considered to continue being active, only when:

a)

the borrower has covered all interest accrued on the date of the renewal or restructuring;

b)

the borrower has covered the principal of the original credit amount, which on the date of the renewal or restructuring should have been covered, and

c)

the grace period, if any, provided for in the original credit conditions has not been extended.

67

In the event that all the conditions described in the preceding paragraph are not met, they will be considered as past-due from the moment they are restructured or renewed and until there is evidence of sustained payment.

68

When it concerns active credits with characteristics different from those indicated in paragraphs 64 to 66 above that are restructured or renewed during the final 20% of the original credit term, these will be considered active only when the borrower has:

a)

settled all interest accrued on the date of the renewal or restructuring;

b)

covered the principal of the original credit amount, which on the date of the renewal or restructuring should have been covered, and

c)

covered 60% of the original credit amount.

69

In the event that all the conditions described in the preceding paragraph are not met, they will be considered as past-due from the moment they are restructured or renewed and until there is evidence of sustained payment.

70

Active credits with periodic partial payments of principal and interest that are restructured or renewed on more than one occasion, may remain in the active portfolio if, in addition to having elements that justify the debtor's payment capacity, the borrower complies with the conditions established in paragraphs 67 or 69 above, as applicable.

71

In the event that through a restructuring or renewal various credits granted by the same entity to the same borrower are consolidated, each of the consolidated credits must be analyzed as if they were restructured or renewed separately, and, if such analysis concludes that one or more of said credits would have been transferred to past-due portfolio as a result of said restructuring or renewal, then the total balance of the consolidated credit must be transferred to past-due portfolio.

72

The provisions in paragraphs 64 to 72 will not apply to those restructurings that on the date of the operation present payment compliance for the total amount of principal and interest due and only modify one or more of the following original credit conditions:

·

Guarantees: only when they imply the expansion or substitution of guarantees with others of better quality.

·

Interest Rate: when the agreed interest rate is improved for the borrower.

·

Currency: provided that the rate corresponding to the new currency is applied.

·

Payment Date: only in the event that the change does not imply exceeding or modifying the periodicity of payments. In no case shall the change in the payment date allow for the omission of payment in any period.

Suspension of Interest Accrual

73

The accrual of accrued interest on credit operations must be suspended, at the moment the outstanding balance of the credit is considered past-due. Likewise, the amortization in the period's results of financial income to be accrued, as well as the amount corresponding to the purchase option of credits by capitalizable lease operations, must be suspended, at the moment the outstanding balance of the credit is considered past-due.

74

To credits that contractually capitalize interest to the amount of the debt, the suspension of interest accrual established in the preceding paragraph will be applicable.

75

As long as the credit remains in the past-due portfolio, the control of accrued interest or financial income will be carried out in off-balance sheet accounts. In the event that such interest or financial income past-due is collected, it will be recognized directly in the period's results under the interest income item, canceling in the case of capitalizable lease or in financial factoring operations the corresponding deferred credit.

Uncollected Accrued Interest

76

With respect to uncollected accrued interest or financial income corresponding to credits that are considered as past-due portfolio, an estimate must be created for an amount equivalent to the total of these at the moment of transferring the credit as past-due portfolio.

77

Regarding past-due credits in which their restructuring agrees to the capitalization of previously recorded uncollected accrued interest in off-balance sheet accounts, the entity must create an estimate for 100% of said interest. The estimate may be canceled when there is evidence of sustained payment.

Preventive Estimate for Credit Risks

78

The amount of the preventive estimate for credit risks must be determined based on the different methodologies established by the CNBV for each type of credit through general provisions or, in the case of additional estimates required in various regulations and those ordered by the CNBV attending to what the cited provisions dispose regarding this matter. In any case, the preventive estimate for credit risks must be recognized in the period's results of the corresponding period.

Write-offs, Eliminations, and Recoveries of Credit Portfolio

79

The entity must periodically evaluate if a past-due credit should remain in the balance sheet, or rather, be written off. Such write-off will be carried out by canceling the outstanding balance of the credit against the preventive estimate for credit risks. When the credit to be written off exceeds the balance of its associated estimate, before effecting the write-off, said estimate must be increased up to the amount of the difference.

80

In addition to what is established in the preceding paragraph, the entity may opt to eliminate from its assets those past-due credits that are provisioned at 100% according to what is indicated in paragraph 79, even if they do not meet the conditions to be written off. For such purposes, the entity must cancel the outstanding balance of the credit against the preventive estimate for credit risks.

81

Any recovery derived from previously written-off or eliminated credits in accordance with the two preceding paragraphs, must be recognized in the period's results within the item of preventive estimate for credit risks.

Discounts, Forgiveness, Bonuses, and Discounts on the Portfolio

82

Discounts, forgiveness, bonuses, and discounts, that is, the amount forgiven of the payment of the credit in partial or total form, will be recorded charged to the preventive estimate for credit risks. In the event that the amount of these exceeds the balance of the estimate associated with the credit, estimates must previously be constituted up to the amount of the difference.

Credits Denominated in UDIS

83

For the case of credits denominated in UDIS, the estimate corresponding to said credits will be denominated in the unit of account of origin that corresponds.

Cancellation of Excesses in the Preventive Estimate for Credit Risks

84

When the balance of the preventive estimate for credit risks has exceeded the amount required according to paragraph 79, the differential must be canceled in the period in which such changes occur against the period's results, affecting the same concept or item that originated it, that is, the preventive estimate for credit risks.

Assignment of Credit Portfolio

85

For credit portfolio assignment operations in which the conditions established to derecognize a financial asset according to criterion C-1 "Recognition and Derecognition of Financial Assets" are not met, the entity must conserve in the asset the amount of the assigned credit and recognize in the liability the amount of resources coming from the assignee.

86

In cases where the assignment of credit portfolio is carried out, in which the conditions to derecognize a financial asset established in criterion C-1 are met, the estimate associated with it must be canceled.

Transfer to Active Portfolio

87

Past-due credits in which the pending payment balances (principal and interest, among others) are fully settled, or, that being restructured or renewed credits, comply with the sustained payment of the credit, will be returned to the active portfolio.

Presentation Standards

Balance Sheet

88

a)

the portfolio will be grouped into active and past-due, according to the type of credit (commercial, consumer, or housing credits, and in turn, classified according to the nature of the operation);

b)

the preventive estimate for credit risks must be presented in a separate item, subtracting from the credit portfolio;

c)

the amount of credits from capitalizable lease and financial factoring operations, both active and past-due, must be presented net of the deferred credits referred to in paragraphs 43 and 48 respectively, in the case of financial factoring operations, it will be presented net of the corresponding exposure;

d)

interests charged in advance must be presented together with the portfolio that gave rise to them;

e)

the purchase option at a reduced price, as well as fees received in advance of the earning of the related income, will be presented in the item of deferred credits and advance collections;

f)

fees charged for the granting of credit must be presented net of associated costs and expenses, presented in the item of other assets, or of deferred credits and advance collections, as applicable to their debtor or creditor nature. Likewise and with the same presentation, fees charged for the concept of credit card annual fee must be shown net of their associated costs and expenses;

g)

the liability for deposit guarantees will be presented in the item of other accounts payable;

h)

it will be presented within the item of other accounts payable, if its relative importance warrants it, the creditor balances of credits, for example when there is a balance in favor coming from revolving credits because the borrower made a payment superior to the due;

i)

it will be presented in the item of bank loans and from other organisms the liability derived from credit portfolio assignment operations;

j)

it will be presented in off-balance sheet accounts, in the item named credit commitments the unused amount of the credit lines that the entity has granted, and

k)

it will be presented in off-balance sheet accounts, in the item of uncollected accrued interest derived from past-due credit portfolio, the amount of uncollected accrued interest derived from credits that remain in the past-due portfolio, as well as uncollected accrued financial income.

Income Statement

89

Interest income will be grouped as accrued interest, the amortization of interest charged in advance, the financial income accrued in capitalizable lease and financial factoring operations, the amortization of fees charged for the granting of credit, and the result from UDIS valuation (creditor balance). Likewise, interest expenses will be grouped as the amortization of associated costs and expenses for the granting of credit, as well as the result from UDIS valuation (debtor balance).

90

It will be presented as a specific item, immediately after the financial margin, the preventive estimate for credit risks, as well as the result from UDIS valuation that originates from the estimate denominated in UDIS.

91

It will be presented in the item of charged fees and tariffs the fees other than those relative to the granting of credit, including fees charged for the concept of credit card annual fee.

92

The profit or loss derived from the assignment of credit portfolio will be presented in the item of other income (expenses) of the operation.

93

It will be presented in the item of other income (expenses) of the operation the amortization of the deferred credit generated by the purchase option at a reduced price, the purchase option when adopted at maturity, as well as the income from participation in the sale of goods in capitalizable lease to a third party.

Disclosure Standards

94

Through notes to the financial statements, the following must be disclosed:

a)

main policies and procedures established for the granting, assignment, control, and recovery of credits, as well as those relative to the evaluation and follow-up of credit risk;

b)

policies and procedures established to determine concentrations of credit risk;

c)

breakdown of the active and past-due portfolio by type of credit (business or commercial activity, liquidity loans to other popular or community financial societies, consumer, and medium or residential and social interest), distinguishing those denominated in national currency and UDIS;

d)

identification by type of credit (business or commercial activity, liquidity loans to other popular or community financial societies, consumer, and medium or residential and social interest), of the balance of the past-due portfolio from the date it was classified as such, in the following periods: 1 to 180 calendar days, 181 to 365 calendar days, 366 calendar days to 2 years and more than 2 years past-due;

e)

in aggregate form, the percentage of concentration and main characteristics of the portfolio by sector, region, or economic group, understanding by the latter the groups of natural and legal persons that by their patrimonial or responsibility links constitute common risks;

f)

the amounts of fees and of costs and expenses recognized for the granting of credit; weighted average term for their amortization; description of the concepts that integrate the fees for the origination of such credits and the costs and expenses associated with such fees, as well as elements that justify their direct relationship with the granting of credit;

g)

explanation of the main variations in the past-due portfolio identifying, among others: restructurings, renewals, adjudications, discounts, write-offs, transfers to the active portfolio, as well as from the active portfolio;

h)

brief description of the methodology to determine preventive estimates for credit risks;

i)

qualification by risk grade, amount of the portfolio, as well as of the preventive estimate for credit risks, disaggregated according to the stratification contained in the methodologies for the qualification of the credit portfolio and by type of credit (business or commercial activity, and liquidity loans to other popular or community financial societies);

j)

balance of the preventive estimate for credit risks, disaggregating it according to the methodologies for the qualification of the credit portfolio, as well as by type of credit (business or commercial activity, liquidity loans to other popular or community financial societies, consumer, and medium or residential and social interest);

k)

movements that have been made to the preventive estimate for credit risks during the period by the creation of the same, write-offs, cancellations, discounts, forgiveness, bonuses, discounts, and adjudications, among others;

l)

amount derived from the cancellation of the preventive estimate for credit risks, and the reasons that motivated said cancellation;

m)

amount of past-due credits that according to paragraph 81 were eliminated from the assets, disaggregating those granted to related parties;

n.)

the main policies and procedures regarding the granting of restructuring and renewals,

including restructurings or renewals that consolidate various credits granted by the same

entity to the same borrower, as well as the elements taken into account to evidence sustained payment;

95

o)

total accumulated amount of restructured or renewed by credit type (business or

commercial activity, liquidity loans to other popular or community financial societies, consumer,

and medium or residential and social interest, distinguishing those originated in the exercise). Each of

these amounts must be broken down into:

i.

overdue credits that were restructured or renewed;

ii.

restructurings or renewals that were transferred to non-performing portfolio due to having

been restructured or renewed, in compliance with paragraph 64;

iii.

restructured or renewed credits that remained in performing portfolio in accordance with paragraphs

65 to 71;

iv.

consolidated credits that as a result of a restructuring or renewal were transferred to

non-performing portfolio, in accordance with paragraph 72, and

v.

restructured credits to which the criteria regarding transfer to non-performing portfolio

were not applied based on paragraph 73.

p)

amount and nature of additional guarantees and concessions granted in restructured credits;

q)

total amount of credit portfolio assignments carried out by the entity;

r)

amount of recoveries of previously written-off or eliminated credit portfolio;

s)

breakdown of interest and commissions by credit type (business or commercial activity, liquidity

loans to other popular or community financial societies, consumer, and medium or residential and

social interest and housing);

t)

amount of interest income recognized in the credit in question, at the time of capitalization referred to in paragraph 78;

u)

amount of credit lines registered in off-balance sheet accounts, and

v)

brief description of the effects on the credit portfolio derived from the application of the different

methodologies established through general provisions by the CNBV for each type of

credit, as well as the additional estimates required in various regulations and those ordered

by the CNBV.

D-2 STATEMENT OF RESULTS

Background

Financial information must meet, among other things, the objective of reporting the results of the

operations of a specific entity in a defined accounting period, requiring the establishment,

through specific criteria, of the object and general structure that the statement of results must have.

Objective and Scope

1

This criterion aims to establish the general characteristics and structure that the

statement of results must have. Whenever this financial statement is prepared, entities must adhere to the

structure and guidelines provided in this criterion. Likewise, minimum guidelines are established with the

purpose of homogenizing the presentation of this financial statement among entities, and in this way, facilitating the

comparability thereof.

Objective of the Statement of Results

2

The statement of results aims to present information on the operations developed by the

entity, as well as other economic events that affect it, which do not necessarily come from decisions or

transactions derived from the owners of the same in their capacity as shareholders, during a period

determined.

3

Consequently, the statement of results will show the increase or decrease in the equity of the

entities, attributable to the operations carried out by them, during a specified period.

4

The provisions in the previous paragraph do not apply to those items of the entity that by express provision must

be incorporated into the accounting capital, other than those coming from the statement of results, such as those that

make up comprehensive income (result from valuation of available-for-sale securities and the result from

holding of non-monetary assets). The presentation of increases or decreases in equity

derived from these items is specified in criterion D-3 " Statement of Changes in Accounting Capital " .

Concepts Integrating the Statement of Results

5

In a broad context, the concepts that integrate the statement of results are: income, costs, expenses,

gains and losses, considering as such the concepts thus defined in NIF A-5 " Basic Elements

of Financial Statements " of the NIFs.

Structure of the Statement of Results

6

The minimum items that the statement of results must contain in entities are the following:

·

financial margin;

·

financial margin adjusted for credit risks;

·

operating result;

·

result before income taxes;

·

result before discontinued operations, and

·

net income.

Presentation of the Statement of Results

7

The items described above correspond to the minimum required for the presentation of the

statement of results, however, entities must break down either in the said statement of results, or through

notes to the financial statements, the content of the concepts they consider necessary in order to show the

results thereof for the user of the financial information. At the end of this criterion

a statement of results prepared with the minimum items referred to in the previous paragraph is shown.

Characteristics of the Items Composing the Structure of the Statement of Results

Financial Margin

8

The financial margin must be composed of the difference between interest income and interest expenses, increased or decreased by the result from net monetary position, related to items of the

financial margin (in the case of an inflationary environment).

Interest Income

9

Interest income is considered to be the returns generated by the credit portfolio,

contractually called interest, the amortization of interest collected in advance, the financial

income accrued in capitalizable leasing operations, as well as premiums and interest

from other financial operations typical of entities such as deposits in financial entities,

investments in securities, repo operations, as well as premiums for debt placement.

10

Commissions charged for the granting of credit are also considered interest income, as well as

dividends from equity instruments.

11

Likewise, valuation adjustments derived from items denominated in UDIS or in some other general price index are considered as interest income, as well as exchange gains, provided that

such items come from positions related to income or expenses that are part of the

financial margin.

12

Interest collected relating to credits previously classified as non-performing portfolio, whose accumulation is

effectuated in accordance with their collection, in accordance with what is established in criterion B-4 " Credit Portfolio " , are part of

this item.

Interest Expenses

13

Interest expenses are considered to be premiums, discounts and interest derived from traditional

collection, bank loans and from other organisms and from subordinated obligations classified as liability, as well

as issuance expenses and discounts for debt placement.

14

Likewise, valuation adjustments derived from items denominated in UDIS or in some other general price index are considered interest expenses, as well as exchange losses, provided that such

concepts come from positions related to expenses or income that are part of the financial margin.

15

Likewise, the amortization of costs and expenses associated with the

granting of credit is considered as interest expenses.

Result from Net Monetary Position (Financial Margin)

16

The result from net monetary position referred to in paragraph 9, will be that which originates from items

whose income or expenses are part of the financial margin (in the case of an inflationary environment).

17

The result from net monetary position originated by items that are registered

directly in the accounting capital of the entity will not be considered in this item, since such result must be presented in the corresponding capital item.

Financial Margin Adjusted for Credit Risks

18

It corresponds to the financial margin deducted by the amounts related to the movements of the

preventive estimate for credit risks in a determined period.

Operating Result

19

It corresponds to the financial margin adjusted for credit risks, increased or decreased by:

a)

commissions and fees charged and paid,

b)

the result from intermediation,

c)

other operating income (expenses) other than interest income or expenses that have been

included within the financial margin, and

d)

administrative and promotional expenses.

20

Commissions and fees charged and paid are those generated by credit operations other than those

indicated in paragraphs 11 and 16, loans received, debt placement and by the provision of services

among others, handling, transfer, custody or administration of resources, fiduciary activities, and by the

granting of guarantees. Also part of this item are commissions related to the use or issuance

of credit cards, whether directly as commissions for the first and subsequent annualities,

inquiries or issuance of plastic, or indirectly as those charged to affiliated establishments.

21

Likewise, the result from intermediation is considered as part of the operating result, understood

by the latter as the following concepts:

a)

result from valuation at fair value of trading securities, as well as sold collateral;

b)

impairment loss or effect of reversal of impairment of securities;

c)

result from valuation of currencies;

d)

transaction costs for the purchase and sale of trading securities, and

e)

the result from the purchase and sale of securities, currencies, as well as the result from the sale of received collateral.

22

Additionally, other operating income (expenses) are also recognized within the

operating result, considered as such the ordinary income and expenses referred to in NIF A-5 and that are not

included in the previous concepts, nor form part of administrative and

promotional expenses, such as:

a)

tax recoveries;

b)

result from portfolio assignment;

c)

financial cost for capitalizable leasing;

d)

impairment estimates for uncollectability or difficult collection,

e)

losses;

f)

dividends from other permanent investments and permanent investments in associates

available for sale;

g)

donations;

h)

impairment loss or effect of reversal of impairment of real estate, goodwill,

other long-term assets in use or available for sale and other assets;

i)

loss from adjudication of assets, the result from the valuation of adjudicated assets, the result in

sale of adjudicated assets, as well as the estimate for the loss of value in adjudicated assets, and

j)

the result in the sale of properties, furniture and equipment.

23

In addition to the items previously mentioned, the result from net monetary position, in the case of an inflationary environment, and the exchange result generated by items not related to the financial margin of the

entities will be presented in the item of other operating income (expenses).

24

Finally, administrative and promotional expenses must be considered within the operating result,

which must include all types of direct benefits granted to the employees of the entity,

PTU caused and deferred, fees, leases, promotional and advertising expenses, contributions to the

Fund for the Protection of Popular Financial Societies and Protection of their Savers, technology expenses,

non-deductible expenses, depreciation and amortization, the net cost of the period derived from benefits to the

employees, as well as taxes and duties other than income taxes.

Result Before Income Taxes

25

It will be the operating result, incorporating the participation in the result of unconsolidated subsidiaries,

associates and joint ventures.

Result Before Discontinued Operations

26

It is the result before income taxes, decreased by the effect of expenses for income taxes

caused in the period, increased or decreased as the case may be, by the effects of income taxes

delayed generated or materialized in the period, if applicable, net of their estimate.

Net Income

27

It corresponds to the result before discontinued operations increased or decreased as appropriate,

by the discontinued operations referred to in Bulletin C-15 " Impairment in the value of long-term

assets and their disposal " of the NIFs.

Consolidated Statement of Results

28

When the consolidated statement of results is presented, the segregation of the portion of the net result

corresponding to the non-controlling interest will be presented as the last item of said financial

statement.

Disclosure Standards

29

The following must be disclosed in the notes to the financial statements:

a)

composition of the financial margin, identifying by currency type the interest income and the

interest expenses, distinguishing them by the type of operation from which they come (investments in

securities, repos, credit portfolio, traditional collection disaggregated, as well as bank loans and

from other organisms, among others);

b)

in the case of credit portfolio, additionally, the amount of interest income by

credit type (business or commercial activity, microcredits, other popular financial societies,

community or rural financial integration organisms, consumer, housing, among others) must be identified;

c)

composition of the result from intermediation, identifying the result from valuation at fair value and, if applicable, the result from purchase and sale, according to the type of operation from which they come

(investments in securities, as well as sold collateral);

d)

amount of charged commissions disaggregated by the main products handled by the entity, and

e)

the amounts of commissions and of the costs and expenses incurred for the granting of credit

recognized in results; average weighted term for their amortization; description of the concepts

that integrate the commissions for initial origination and restructuring of such credits and the costs and expenses

associated with such commissions, as well as elements that justify their direct relationship with the granting

of credit.

30

NAME OF THE ENTITY

LEVEL OF OPERATIONS CORRESPONDING TO

ADDRESS

STATEMENT OF RESULTS OF ___________________ TO _________________ OF ___

EXPRESSED IN CURRENCY OF PURCHASING POWER OF ________ OF _______ (1)

(Numbers in thousands of pesos)

Interest Income

$

Interest Expenses

"

Result from Net Monetary Position (Financial Margin)

" _____

FINANCIAL MARGIN

$

Preventive Estimate for Credit Risks

" _____

FINANCIAL MARGIN ADJUSTED FOR CREDIT RISKS

$

Commissions and Fees Charged

$

Commissions and Fees Paid

"

Result from Intermediation

"

Other Operating Income (Expenses)

"

Administrative and Promotional Expenses

" _____

" _____

OPERATING RESULT

$

Participation in the Result of Unconsolidated Subsidiaries, Associates and

Joint Ventures

" _____

RESULT BEFORE INCOME TAXES

$

Income Taxes Caused

$

Deferred Income Taxes (Net)

" _____

" _____

RESULT BEFORE DISCONTINUED OPERATIONS

$

Discontinued Operations

" _____

NET INCOME

$

The concepts appearing in this statement are shown in an enumerative but not exhaustive manner.

( 1 ) This line will be omitted if the economic environment is "non-inflationary".

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