Resolution modifying the general provisions applicable to the activities of savings and loan cooperative societies

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DOF: 23/01/2018

RESOLUTION modifying the general provisions applicable to the activities of savings and loan cooperative societies

At the margin, a seal with the National Coat of Arms, which says: United Mexican States.- Ministry of Finance and Public Credit.- National Banking and Securities Commission.

The National Banking and Securities Commission, based on the provisions of articles 32 and 40, first paragraph of the Law to Regulate the Activities of Savings and Loan Cooperative Societies; 4, sections III, IV, XXXVI and XXXVIII and 16, section I of the Law of the National Banking and Securities Commission; 12; 15, first paragraph; 23, section I, subsection a); 42, section I and 58 of the Internal Regulations of the National Banking and Securities Commission, as well as 15, section II, subsection 7); 38, sections I, subsections 2), 3) and 11) and VIII, subsections 14) and 23) of the Agreement by which the President of the National Banking and Securities Commission delegates powers to the Vice Presidents, General Directors and Assistant General Directors of said Commission, and

CONSIDERING

That it is convenient to adjust the accounting criteria applicable to savings and loan cooperative societies with operation levels I to IV so that they can cancel, in the period in which they occur, the excesses in the balance of the 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 for Financial Reporting Standards, A.C., so that they become applicable to savings and loan cooperative societies with operation levels I to IV, while 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 MODIFYING THE GENERAL PROVISIONS APPLICABLE TO THE ACTIVITIES OF SAVINGS AND LOAN COOPERATIVE SOCIETIES

SINGLE.-

The Annex E, Criteria A-2 "Application of particular standards", B-4 "Credit Portfolio"

and D-2 "Statement of Results" of the "General provisions applicable to the activities of savings and loan cooperative societies", published in the Official Gazette of the Federation on June 4, 2012 and modified through resolutions published in said Official Gazette on January 9, 2015; January 7, 2016; April 4, July 24 and October 18, 2017,

is REFORMED,

so that it reads as follows:

TITLES FIRST to

EIGHTH . . .

Annexes A to D . . .

Annex E

Accounting criteria for savings and loan cooperative societies.

Annexes F to U . . .

TRANSITORY PROVISIONS

FIRST.-

Savings and loan cooperative societies with operation levels I to IV shall

comply with what is provided in Criteria B-4 "Credit Portfolio" and D-2 "Statement of Results" of Annex E, which

are modified by this Resolution as of January 1, 2019.

Notwithstanding the foregoing, savings and loan cooperative societies with operation levels I to IV

may opt to apply Criteria B-4 "Credit Portfolio" and D-2 "Statement of Results" of Annex E, which

are reformed by this instrument, as of the day following its publication, being required to give notice that

they exercised such option to the National Banking and Securities Commission, no later than 10 business days

following the date on which the early application of the aforementioned criteria is to 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 instruments receivable", C-19 "Financial instruments payable", C-20 "Financial instruments 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 for 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

shall enter into force on January 1, 2019.

Respectfully

Mexico City, January 10, 2018. - National Banking and Securities Commission: the Vice President of

Regulation, 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 to them.

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 savings and loan cooperative societies", entities shall observe, until there is

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

Events after the reporting date

..................................................

B-13

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 and equity

.......................................

C-12

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

C-15

Impairment of financial instruments receivable ............................................................

C-16

Obligations associated with the retirement of property, plant and equipment

.....................................

C-18

Financial instruments payable ............................................................................

C-19

Financial instruments 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

Leases

.................................................................................................

D-5

Capitalization of the comprehensive financing result

.....................................................

D-6

3

Additionally, entities shall observe the NIFs issued by CINIF on topics not foreseen in the accounting criteria for savings and loan cooperative societies, provided that:

a)

they are in force on a definitive basis;

b)

they are not applied in advance;

c)

they do not contravene the philosophy and general concepts established in the accounting criteria for savings and loan cooperative societies, 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 CINIF. In virtue of this, entities observing what is established in the

previous paragraph, shall comply with the following:

B-8

Consolidated or combined financial statements

5

Regarding the requirements for consolidation of financial statements referred to in NIF B-8, investment societies are exempt from the uniform recognition of accounting criteria applicable to savings and loan cooperative societies, 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 shall be attended to:

7

Entities shall disclose the initial balance of the main monetary assets and liabilities used for the determination of 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 shall 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 nor capitalized in terms of what is established in NIF B-10, must be presented in the statement of results 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) of the operation.

10

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

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 agreements" and B-4 "Credit Portfolio", issued by the CNBV, as well as those from operating lease transactions indicated in paragraphs 40 to 43 of this criterion, shall not be included, since the standards of recognition, valuation, presentation and disclosure applicable are contemplated in them.

Loans to officials and employees

12

The interest derived from loans to officials and employees, when such loans are stipulated in the employment contract, shall be presented in the statement of results in the item of other income (expenses) of the operation.

Estimate for uncollectibility or difficult collection

13

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

14

For the loans granted by entities to their officials and employees, as well as for those accounts receivable other than those indicated in the previous paragraph and those of paragraph 17, relating to identified debtors whose maturity is agreed from origin to a term greater than 90 natural days, they shall create, if applicable, an estimate that reflects their degree of uncollectibility.

15

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

16

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 shall be classified as overdue debts and an estimate shall be simultaneously constituted for the total amount of them.

17

The estimate of accounts receivable not included in paragraphs 14, 15 and 17 above, shall be constituted for the total amount of the debt according to the following terms:

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.

18

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

a)

tax balances in favor;

b)

creditable value added tax, and

c)

liquidating accounts.

19

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

C-7

Investments in associates, joint ventures and other permanent investments

20

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 applicable to savings and loan cooperative societies, as well as to rural financial integration organisms, solely with respect to the restatement of financial statements, considering that this criterion is not applicable to investment societies.

21

C-9

Liabilities, 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, since these are contemplated in said criteria.

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

Traditional deposit-taking

23

Liabilities arising from traditional deposit-taking shall be recorded taking as a basis the contractual value of the obligation, recognizing accrued interest directly in the results of the exercise as an interest expense.

24

They shall continue to be recognized within the item of traditional deposit-taking as accounts without movement, the principal and the interest of the deposit-taking operations:

a)

that have not had movement by withdrawals or deposits, as well as

b)

those made with minors whose parents or guardians are not members of the entity and upon reaching majority age do not opt to become members, nor withdraw their contributions.

The foregoing, until they prescribe in favor of the entity's equity in accordance with applicable legislation.

At the moment they prescribe in accordance with said legislation, the amount recognized as accounts without movement, shall be cancelled against the results of the exercise, in the item of other income (expenses) of the operation.

Bank loans and from other organisms

25

For their recognition they shall adhere to what is established in paragraph 24.

26

They shall 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.

27

In the case of credit lines received by the entity in which not all the authorized amount is exercised, the unused part of them shall not be presented in the balance sheet. However, entities shall 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.

Other accounts payable

28

In notes to the financial statements, in addition to what is established, the main characteristics and restrictions of the Social Welfare Fund and the Cooperative Education Fund, constituted in accordance with applicable regulation, shall be disclosed.

C-11

Equity

29

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

30

At the foot of the balance sheet, they shall disclose the historical amount of share capital.

C-12

Financial instruments with characteristics of liability and equity

31

According to the basic differences between liability and equity established in Bulletin C-12, and that the excess or voluntary certificates referred to in the General Law of Cooperative Societies grant to their holders the same rights and obligations conferred by contribution certificates to their members, savings and loan cooperative societies shall recognize such excess or voluntary certificates as part of their share capital.

32

Notwithstanding the foregoing, the interest generated by such excess or voluntary certificates shall be recognized as other accounts payable as they accrue, against the results of the exercise in the item of other income (expenses) of the operation.

C-21

Joint control agreements

33

Regarding the recognition of the entities' participation in a joint operation, investment societies are exempt from the uniform recognition of accounting criteria applicable to savings and loan cooperative societies, as well as to 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

34

The liability generated by employee benefits shall be presented in the balance sheet within the item other accounts payable.

35

Additionally, through notes to the financial statements, it shall 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 employee benefits in the short and long term.

36

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

D-5 Leases

Capitalizable leases

Scope

37

What is established in this Bulletin shall not be applicable to credits granted by the entity for capitalizable lease operations carried out with its members, being the subject of criterion B-4.

Requirements

38

For the purposes of the requirements established in paragraph 33 of Bulletin D-5, it shall 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 the minimum payments shall 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

39

For the amount of amortizations not settled within 30 natural days following the payment due date, the lessor shall create the corresponding estimate, suspending the accumulation of lease income, keeping its control in off-balance sheet accounts in the item of other recording accounts.

40

The lessor shall present in the balance sheet the receivable account in the item of other accounts receivable, and the lease income in the item of other income (expenses) of the operation in the statement of results.

41

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

Accounting for the lessee

42

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

Subleases and similar transactions

Accounting for the original lessee

43

The effects on the results of the exercise referred to in paragraph 76 of Bulletin D-5, relating to the termination of the original lease, shall be presented in the item of other income (expenses) of the operation in the statement of results.

D-6

Capitalization of the comprehensive financing result

44

For the purposes of this NIF, Comprehensive Financing Result shall be understood as the following concepts: a) interest; b) result from monetary position, c) gain or loss on changes and d) the other costs associated with those referred to in NIF D-6. These concepts may be capitalized to qualifying assets, instead of being recognized in the statement of results as interest income or expenses or

other income (expenses) from the transaction, as applicable, based on what is established in the aforementioned NIF D-6.

45

The foregoing shall not apply to assets that are eligible for a different accounting treatment established by a specific accounting criterion issued by the CNBV.

46

B-4 CREDIT PORTFOLIO

Objective and Scope

This criterion aims to define the specific rules regarding the recognition, valuation, presentation, and disclosure in the financial statements of the credit portfolio of entities.

1

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

2

The following are not subject to this criterion:

a)

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

b)

The accounting rules regarding securities issued in series or in mass, which are traded on recognized markets and that the entity holds in its own position, even if they are linked to credit operations, being subject to criterion B-2 "Investments in Securities".

Definitions

3

Borrower.- The member or legal entity 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 Rating.- Methodology used by entities to recognize the credit risk associated with the credits granted by them.

7

Payment Capacity.- For the purposes of this criterion, it will be understood that there is payment capacity when the conditions established for that effect in the General Provisions applicable to savings and loan cooperative societies are met.

8

Overdue Portfolio.- That composed of credits whose borrowers are declared in commercial bankruptcy, or whose principal, interest, or both, have not been liquidated in the terms originally agreed, considering for this effect what is established in paragraphs 61 to 74 of this criterion.

9

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

10

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.

11

Commission for the granting of the 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.

12

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, resulting in a consolidated credit.

13

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 has been recognized in accordance with what is established in this criterion, the insurance, if any, that had been financed, the collections of principal and interest, as well as by the discounts, waivers, bonuses, and discounts that have been granted.

14

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

15

Housing Credits.- To the direct credits denominated in national currency or investment units (UDIs), as well as the interest they generate, granted to individuals 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 liquidity credits guaranteed by the borrower's housing.

16

Commercial Credits.- To the direct or contingent credits, denominated in national currency or UDIs, microcredits, as well as the interest they generate, granted to their borrowers who are individuals with business activity and destined for their commercial business; to credits for financial factoring operations and to credits for capitalizable lease operations that are destined for said commercial business with their borrowers. Likewise, liquidity loans granted to other savings and loan cooperative societies in accordance with applicable legislation will be included.

17

Consumer Credits.- To direct credits, including liquidity credits that do not have real estate guarantee, denominated in national currency or UDIs, as well as the interest they generate, granted to their borrowers, derived from credit card operations, personal loans, payroll loans (different from those granted through credit card), credits for the acquisition of durable consumer goods (known as ABCD), which includes among others the auto credit and capitalizable lease operations granted to borrowers whose destination is different from commercial.

18

Debtor of the credit rights subject to financial factoring.- The individual or legal entity to whom the credit rights transferred from the factor to the factor in a financial factoring operation were originally due.

19

Preventive Estimate for Credit Risks.- Charge made against the results of the period that measures that portion of the credit that is estimated to have no viability of collection.

20

Factor.- The individual or legal entity 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.

21

Financial Factoring.- Operation by virtue of which the factor agrees with the factor, who may be an individual or legal entity, 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.

22

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

23

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

24

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.

25

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 to suppose that said option will be exercised.

26

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 capitalized interest, will not be considered as payment.

27

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

28

Sustained Credit Payment.- Borrower's payment compliance without delay for the total amount due 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 exhibition.

29

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 33 shall apply to them.

30

In the case of consolidated credits, if in accordance with paragraph 73, two or more credits had originated the transfer to overdue portfolio, to determine the required amortizations, the original payment scheme of the credit whose amortizations equate to the longest term must be attended to.

31

In any case, in the demonstration that there is sustained payment, the entity must have available to the CNBV and the Auxiliary Supervision Committee, evidence justifying 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 effects 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 against other creditors, and the liquidity of the borrower before the new financial structure of the financing.

32

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 scenarios occur:

a)

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

b)

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

33

The early payment of the amortizations of restructured or renewed credits, other than 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 29.

34

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

a)

expansion of guarantees that cover the credit in question, or

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 unit of account;

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

extension of the credit term.

35

Renewal.-

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

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

36

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 liquidated the total of the payments due in accordance with the original conditions of the credit.

37

Credit Risk.- For the purposes of this criterion, it is defined as the potential loss due to the failure to pay by 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.

38

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

Recognition and Valuation Rules

39

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

40

In cases where the collection of interest is made in advance, these will be recognized as an advance collection in the item of 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 of interest income.

Credit Lines

41

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

42

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

Capitalizable Lease Operations

43

In capitalizable lease operations, that is, those that meet the requirements established in criterion A-2 "Application of Specific Rules", 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 recorded as a deferred credit, which will be recognized based on the outstanding balance of the credit against the results of the period, in the item of interest income.

44

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

45

At the moment the lessee is obligated 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, at that date the income will be recognized directly in results.

46

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 the operation.

Financial Factoring Operations

47

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 accounts payable, and, if applicable, the financial income to accrue derived from factoring operations.

48

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

49

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

50

The amount of advances, if any, that 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 the Credit

51

Commissions charged for the granting of the credit will be recorded 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 originating from revolving credits which must be amortized for a period of 12 months.

52

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.

53

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 with respect to credits that have not been placed, will not enter this category. In the case of commissions charged for credit card annual fee, whether the first annual fee or subsequent ones for 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.

54

Likewise, in the case of commissions charged that originate from the granting of a credit line that has not been disbursed, at that moment they will be recognized as a deferred credit, which will be amortized against the results of the period as interest income under the straight-line method for a period of 12 months. In case the credit line is canceled before the end of the aforementioned 12-month period, the remaining balance to be amortized must be recognized directly in the results of the period in the item of commissions and fees charged, on the date the cancellation of the line occurs.

Associated Costs and Expenses

55

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

56

For the purposes of the previous paragraph, costs or expenses associated with the granting of the credit will be understood only as those that are incremental and directly related to activities carried out by the entities to grant the 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.

57

Any other cost or expense not included in the previous 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 results of the period as they accrue in the item corresponding 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 in a period of 12 months against the results of the period in the item corresponding according to the nature of the cost or expense.

58

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

Commissions and Fees Charged

59

Commissions and fees other than those charged for the granting of the credit will be recognized against the results of the period in the item of commissions and fees charged, on the date they accrue. In the case that part or all of the consideration received for the collection of the commission or fee corresponding is received in advance of the accrual of the income relative, said advance must be recognized as a liability.

Transfer to Overdue Portfolio

60

The outstanding balance in accordance with the payment conditions established in the credit contract will be registered as overdue portfolio when:

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

its amortizations have not been liquidated in their entirety in the terms originally agreed, considering for this effect the following:

a)

if the debts consist of credits with single payment of principal and interest at maturity and present 30 or more natural days overdue;

b)

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

d)

if the debts consist of revolving credits and present two monthly billing periods overdue or, in case the billing period is different from monthly, the corresponding to 60 or more natural days overdue, and

e)

the immediate collection documents referred to in criterion B-1 "Availability" will be reported as overdue portfolio at the moment the event occurs.

61

Regarding the maturity periods referred to in item 2 of the previous paragraph, monthly periods may be used, regardless of the number of days each calendar month has, in accordance with the following equivalences:

30 days

one month

60 days

two months

90 days

three months

62

Likewise, in case the fixed term expires on an inactive day, said term will be understood to be concluded on the first following business day.

Restructurings and Renewals

63

Overdue credits that are restructured or renewed will remain in the non-performing portfolio, until there is evidence of sustained payment.

64

Credits with a single principal payment 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 non-performing until there is evidence of sustained payment, in accordance with what is established in paragraph 33 of this criterion.

65

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

a)

liquidated all accrued interest, and

b)

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

66

In the case of credit facilities granted 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 taking into account the characteristics and conditions applicable to the restructured or renewed facility or facilities. If such analysis concludes that one or more of the facilities granted under a credit line must be transferred to the non-performing portfolio as a result of their restructuring or renewal; the total disbursed balance of the credit line must be transferred to the non-performing portfolio until there is evidence of sustained payment.

67

Performing credits with characteristics different from those indicated in paragraphs 65 to 67 above that are restructured or renewed, without at least 80% of the original credit term having elapsed, will be considered to continue being performing, only when:

a)

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

b)

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

c)

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

68

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

69

When it comes to performing credits with characteristics different from those indicated in paragraphs 65 to 67 above that are restructured or renewed during the final 20% of the original credit term, these will be considered performing only when the borrower has:

a)

liquidated all accrued interest as of the date of renewal or restructuring;

b)

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

c)

covered 60% of the original credit amount.

70

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

71

Performing credits with periodic partial payments of principal and interest that are restructured or renewed on more than one occasion, may remain in the performing portfolio if, in addition to having elements that justify the debtor's payment capacity, the borrower complies with the conditions established in paragraphs 68 or 70 above, as applicable.

72

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 the non-performing portfolio as a result of said restructuring or renewal, then the total balance of the consolidated credit must be transferred to the non-performing portfolio.

73

The provisions of paragraphs 65 to 73 shall 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 payment periodicity. In no case shall the change in the payment date allow for the omission of payment in any period.

Suspension of interest accrual

74

The accrual of accrued interest on credit operations must be suspended at the moment the outstanding balance of the credit is considered overdue. Likewise, the amortization in the results of the period 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 overdue.

75

For credits that contractually capitalize interest to the amount of the debt, the suspension of interest accrual established in the previous paragraph shall apply.

76

While the credit remains in the non-performing portfolio, the control of accrued interest or financial income will be kept in off-balance sheet accounts. In the event that such interest or financial income that is overdue is collected, it will be recognized directly in the results of the period under the item of interest income, canceling in the case of capitalizable lease or financial factoring operations the corresponding deferred credit.

Unpaid accrued interest

77

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

78

In the case of overdue credits where in their restructuring the capitalization of previously recorded unpaid accrued interest in off-balance sheet accounts is agreed, 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

79

The amount of the preventive estimate for credit risks must be determined based on the "Procedure for the qualification and constitution of preventive estimates" 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 in accordance with what is provided in said provisions. In any case, the preventive estimate for credit risks must be recognized in the results of the period corresponding to the period.

Write-offs, eliminations and recoveries of credit portfolio

80

The entity must periodically evaluate whether an overdue 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 carrying out the write-off, said estimate must be increased up to the amount of the difference.

81

In addition to what is established in the previous paragraph, the entity may opt to eliminate from its assets those overdue credits that are provisioned at 100% according to what is stated in paragraph 80, 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.

82

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

Discounts, waivers, bonuses and discounts on the portfolio

83

Discounts, waivers, bonuses and discounts, that is, the amount forgiven of the credit payment 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

84

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

85

When the balance of the preventive estimate for credit risks has exceeded the amount required in accordance with paragraph 80, the differential must be canceled in the period in which such changes occur against the results of the period, affecting the same concept or item that originated it, that is, that of preventive estimate for credit risks.

Assignment of credit portfolio

86

For credit portfolio assignment operations in which the conditions established to derecognize a financial asset in accordance with criterion C-1 "Recognition and derecognition of financial assets" are not met, the entity must retain in the asset the amount of the assigned credit and recognize in the liability the amount of resources coming from the assignee.

87

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 performing portfolio

88

Overdue credits in which the pending payment balances (principal and interest, among others) are fully liquidated, or, which being restructured or renewed credits, comply with the sustained payment of the credit, will be returned to the performing portfolio.

Presentation standards

Balance sheet

89

a)

the portfolio will be grouped into performing and non-performing, 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 it from the credit portfolio;

c)

the amount of credits from capitalizable lease and financial factoring operations, both performing and non-performing, must be presented net of the deferred credits referred to in paragraphs 44 and 49 respectively, in the case of financial factoring operations it will be presented net of the corresponding coverage;

d)

interest collected in advance must be presented together with the portfolio that gave rise to it;

e)

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

f)

commissions 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 appropriate to their debtor or creditor nature. Likewise and with the same presentation, commissions 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 credit balance coming from revolving credits because the borrower made a payment higher than due;

i)

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

j)

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

Income statement

90

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

91

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.

92

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

93

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

94

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

95

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 related to the evaluation and monitoring of credit risk;

b)

policies and procedures established to determine concentrations of credit risk;

c)

breakdown of the performing and non-performing portfolio by type of credit (business or commercial activity, liquidity loans to other savings and loan cooperative societies, consumer and medium and residential housing or social interest), distinguishing those denominated in national currency and UDIS;

d)

identification by type of credit (business or commercial activity, liquidity loans to other savings and loan cooperative societies, consumer and medium and residential housing or social interest), of the balance of the non-performing portfolio from the date it was classified as such, in the following terms: 1 to 180 calendar days, 181 to 365 calendar days, 366 calendar days to 2 years and more than 2 years overdue;

e)

in aggregate form, the percentage of concentration and main characteristics of the portfolio by sector or region;

f)

the amounts of commissions and costs and expenses recognized for the granting of credit; weighted average term for their amortization; description of the concepts that make up the commissions for the origination 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;

g)

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

h)

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

i)

qualification by degree of risk, 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, liquidity loans to other savings and loan cooperative societies, consumer and medium and residential housing or social interest);

j)

balance of the preventive estimate for credit risks, breaking it down 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 savings and loan cooperative societies, consumer and medium and residential housing or social interest);

k)

movements that have been made to the preventive estimate for credit risks during the period by its creation, write-offs, cancellations, discounts, waivers, 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 overdue credits that in accordance with paragraph 82 were eliminated from the assets, breaking down those granted to related parties;

n)

the main policies and procedures related to the granting of restructurings 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;

o)

total accumulated amount of restructured or renewed by type of credit (business or commercial activity, liquidity loans to other savings and loan cooperative societies, consumer and medium and residential housing or social interest) distinguishing those originated in the period. Each of these amounts must be broken down into:

i.

overdue credits that were restructured or renewed;

96

ii.

restructurings or renewals that were transferred to the non-performing portfolio for having been restructured or renewed, in accordance with paragraph 65;

iii.

restructured or renewed credits that remained in the performing portfolio in accordance with paragraphs 66 to 72;

iv.

consolidated credits that as a result of a restructuring or renewal were transferred to the non-performing portfolio, in accordance with paragraph 73, and

v.

restructured credits to which the criteria related to transfer to the non-performing portfolio were not applied based on paragraph 74.

p)

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

q)

total amount of credit portfolio assignments that the entity has carried out;

r)

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

s)

breakdown of interest and commissions by type of credit (business or commercial activity, liquidity loans to other savings and loan cooperative societies, consumer and medium and residential housing or social interest);

t)

amount of interest income that was recognized in the credit in question, at the time of capitalization referred to in paragraph 79;

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 INCOME STATEMENT

Background

Financial information must comply, among other things, with the purpose 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 income statement must have.

Objective and scope

1

This criterion aims to establish the general characteristics and structure that the income statement 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, facilitate its comparability.

Objective of the income statement

2

The income statement aims to present information about 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 partners, during a specific period.

3

Consequently, the income statement will show the increase or decrease in the equity of the entities, attributable to the operations carried out by them, during a set period.

4

What is provided in the previous paragraph is not applicable to those items of the entity that by express provision must be incorporated into the accounting capital, different from those coming from the income statement, such as those that make up the comprehensive income (result from valuation of securities available for sale, and the result from holding non-monetary assets). The presentation of the increases or decreases in equity derived from these items is specified in criterion D-3 "Statement of changes in accounting capital".

Concepts that make up the income statement

5

In a broad context, the concepts that make up the income statement 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 income statement

6

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

·

financial margin;

·

financial margin adjusted for credit risks;

·

result of the operation;

·

result before discontinued operations, and

·

net result.

Presentation of the income statement

7

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

results, however, entities must break down either in the said income statement, or through notes to the financial statements, the content of the concepts they consider necessary in order to show the results of the same for the user of the financial information. At the end of this criterion, an income statement prepared with the minimum items referred to in the previous paragraph is shown.

Characteristics of the items that make up the structure of the income statement

Financial Margin

8

The financial margin shall 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 denominated as 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, and repo operations.

10

Commissions charged for the granting of credit are also considered interest income.

11

Likewise, valuation adjustments derived from items denominated in UDIS or in some other general price index, as well as exchange gains, are considered interest income, provided that such items originate from positions related to income or expenses that form part of the financial margin.

12

Interest collected relating to credits previously classified as non-performing portfolio, the accumulation of which is carried out according to their collection, in accordance with what is established in criterion B-4 "Credit Portfolio", forms part of this item.

Interest Expenses

13

Interest expenses are considered to be discounts and interest derived from traditional collection, as well as bank loans and loans from other organisms.

14

Likewise, valuation adjustments derived from items denominated in UDIS or in some other general price index, as well as exchange losses, are considered interest expenses, provided that such concepts originate from positions related to expenses or income that form part of the financial margin.

15

Likewise, amortization of costs and expenses associated with the granting of credit is considered interest expense.

Result from Net Monetary Position (Financial Margin)

16

The result from net monetary position referred to in paragraph 9 shall be that which originates from items whose income or expenses form part of the financial margin (in the case of an inflationary environment).

17

The result from net monetary position originating from items that are registered directly in the entity's accounting capital shall 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 reduced by amounts relating to movements in the preventive estimate for credit risks in a given 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 and for the provision of services among others, handling, transfer, custody or administration of resources and for the granting of guarantees. Also part of this item are commissions related to the use or issuance of credit cards, either directly as commissions for the first and subsequent annual fees, inquiries or issuance of the plastic, or indirectly as those charged to affiliated establishments.

21

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

a)

result from valuation at fair value of securities for trading, 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 purchase and sale of securities for trading, and

e)

the result from purchase and sale of securities, currencies, as well as the result from 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 which are not included in the previous concepts, nor form part of administrative and promotional expenses, such as:

a)

result from portfolio assignment;

b)

financial cost for capitalizable leasing;

c)

provisions for uncollectability or difficult collection,

d)

losses;

e)

dividends from other permanent investments and permanent investments in associates available for sale;

f)

donations;

g)

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;

h)

loss from adjudication of assets, result from valuation of adjudicated assets, result in sale of adjudicated assets, as well as estimate for loss of value in adjudicated assets;

i)

resources prescribed in favor of the entity of accounts without movement based on current legislation, and

j)

the result in 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 shall be presented in the item of other operating income (expenses).

24

Finally, administrative and promotional expenses shall be considered within the operating result, which shall include all types of direct benefits granted to the entity's employees, PTU caused and deferred, fees, leases, promotional and advertising expenses, contributions to the Auxiliary Supervision Fund of Savings and Loan Cooperative Societies and Protection of their Savers, technology expenses, non-deductible expenses, depreciations and amortizations, the net cost of the period derived from employee benefits, as well as taxes and duties.

Result before Discontinued Operations

25

It shall be the operating result, incorporating the participation in the result of unconsolidated subsidiaries, associates and joint ventures.

Net Result

26

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 Income Statement

27

When the consolidated income statement is presented, the segregation of the portion of the net result corresponding to the non-controlling interest shall be presented as the last item of said financial statement.

Disclosure Standards

28

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

a)

composition of the financial margin, identifying interest income and interest expenses, distinguishing them by the type of operation from which they originate (investments in securities, repos, credit portfolio, disaggregated traditional collection, as well as bank loans and loans from other organisms, among others);

b)

in the case of credit portfolio, in addition, the amount of interest income by type of credit (business or commercial activity, microcredits, other savings and loan cooperative societies, consumer, housing, among others) shall 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 originate (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 costs and expenses incurred for the granting of credit recognized in results; weighted average term for their amortization; description of the concepts that make up the commissions for 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.

29

NAME OF THE SAVINGS AND LOAN COOPERATIVE SOCIETY

LEVEL OF OPERATIONS CORRESPONDING

ADDRESS

INCOME STATEMENT FROM ___________________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 DISCONTINUED OPERATIONS

$

Discontinued Operations

" _____

NET RESULT

$ ……….

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

(1)

This line shall be omitted if the economic environment is "non-inflationary".

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INDICATORS

Exchange Rate and Rates as of 08/29/2026

UDIS

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