Banorte Advances After Signing Consulting Pact With IBM

Grupo Financiero Banorte SAB, Mexico’s second-largest publicly traded bank, rallied the most in a week after entering a consulting agreement with International Business Machines Corp. (IBM)

The stock advanced 2.2 percent to 93.53 pesos at the close of Mexico City trading. It was the second-biggest advance on the Mexican IPC index of stocks, which fell 0.1 percent.

The 10-year agreement will allow Mexico City-based Banorte to cut costs as a percentage of revenue while increasing the bank’s return on equity to more than 20 percent, the companies said in a statement today on PR Newswire. Banorte’s ROE in 2012 was 14.3 percent, according to its year-end report.

“This is very good news,” Rafael Escobar, an analyst with Vector Casa de Bolsa SA in Mexico City who rates the shares buy, said in a telephone interview. “The investments in technology will be useful to Banorte.”

Under the agreement, Armonk, New York-based IBM will provide consulting, information technology and research and development to create a “client-centric banking model” for Banorte, according to the statement,

To contact the reporter on this story: Danielle Verbrigghe in New York at dverbrigghe@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.