Regional SAB de CV
BMV:RA
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Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Regional Second Quarter 2021 Earnings Conference Call. Today, we're joined by Manuel Rivero Zambrano, CEO of Regional; Enrique Navarro Ramírez, CFO; and Alejandro Lobeira, IRO. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Manuel Rivero Zambrano. Thank you, and please go ahead.
Good morning, everyone. I hope you and your families are healthy and well. We appreciate everyone's participation today. We are pleased with the bank's second quarter performance. We achieved solid financial indicators, mainly driven by a good asset quality, a more dynamic growth on most of our revenue sources and an adequate expense control.
During the quarter, Regional reported a net income of MXN 959 million, presenting an increase of 23% year-on-year, resulting in an ROE of 13.8% and an ROA of 2.0%. In this period, we reached a financial margin of MXN 1,841 million, mainly due to our growth on higher-margin loans and an increase in demand deposits. The NIM decreased 61 basis points, reaching 5.4%, and total loan NIM was 5.8%.
The margin contraction is linked to the reduction of the reference rate, having a sensitivity of 16 basis points for each 100 basis points of valuation. We're satisfied with the performance of our asset quality, reflecting a better-than-expected cost of risk in a figure of 0.4%. During the second quarter, MXN 118 million of provisions were created, which is 25% lower than last year.
Nonfinancial income reached MXN 803 million, a 29% growth year-on-year, mainly driven by our insurance, FX and merchant acquiring business, which expanded 41%, 22% and 38%, respectively. All these factors generated a total net income of MXN 2,464 million. Our implemented cost control initiatives has successfully achieved stability, maintaining our operating expense control, resulting in MXN 1,332 million and an efficiency ratio of 47.2%.
We continue our digitalization and automation efforts, seeking constantly to improve our productivity without sacrificing profitability or customer experience. During the quarter, we opened 133,000 fully digital accounts. Our loan book increased 3%, mainly due to the lack of demand on the wholesale business. However, other portfolios like SME and consumer loans are presenting a more dynamic and solid growth.
We're happy with our efforts on improving our customer experience, which is why we had such a great performance on our core deposit growth, boosting our liquidity and lowering our cost of funding. Demand deposits grew 31% in all of our segments, explained by our strategy of attracting new SME customers and POS volume growth. Additionally, time deposits increased 7% year-on-year.
Regarding the performance of our business segments in the wholesale portfolio, we had a loan growth of 0.2%. This due to low demand and high repayments. The lack of growth is observed in all the regions we have presence but more accentuated on the central and south regions of the country. The cost of risk stood at 0.4% and the NPL at 0.7%, even though the full impact from the relief programs have already been reflected.
We are very pleased with our retail banking performance, achieving great commercial loan growth and quality. The SME portfolio grew 17%, mainly due to our participation in the special guarantee programs as well as serving our existing client base. Meanwhile, the auto, consumer and mortgage portfolio grew 18%, 16% and 2%, respectively. We had an amazing demand deposit growth, both in SME and individuals. We had an impressive 42% growth in SMEs and 22% in individuals. And time deposits in SMEs, we increased 22%.
As of for asset quality in retail loans, it's remained in a very healthy manner in every product, always much better than that of the system. For SMEs, the NPL was 5.1%; for auto, 1.4%; for consumers, 3.4%; and mortgages, 2.8%. As of for Hey Banco, we continue to see exponential growth, concentrating our efforts in maximizing our offer to clients, being able to grow and cross-sell financial products in a very productive manner. We saw a whopping growth in core deposits for individuals, reaching MXN 4 billion, a 48x growth; and likewise in active customers as they grew 164%, reaching the mark of 160,000 monthly active users. Most of the growth has been with very limited marketing spending driven by client recommendation, our attractive rates and product features.
By the end of the second quarter 2021, 700,000 accounts have been opened. And only during the last quarter, we opened more than 86,000 new accounts. We successfully relaunched our credit card with 2 modalities: traditional and back-to-back, adding more than 1,200 credit cards to our current portfolio with outstanding credit behavior and use. Transactions have increased in average, 2.5 from the first quarter 2021 to 3.8 transactions per user in the second quarter of 2021, and the average ticket from MXN 350 to MXN 530. Overall, credit and debit transactions reached 6.9 million in the quarter with an annual growth of 262% and a quarter growth of 30%. The total amount was MXN 10.361 million.
Loans reached MXN 256 million in the second quarter of 2021 with an annual growth of 232% and a quarter growth of 76%. Loan portfolio composition is 52% auto loan, 39% credit cards and 8% home loans. As of June 2021, the monthly income per active user is MXN 62 and the cost to serve is MXN 20.4, which gives us a projected lifetime value of MXN 1,692 while the acquisition cost per active user as of June is MXN 63, setting the lifetime value over cost of acquisition ratio at 26.7x, allowing us to invest heavily in customer acquisition strategies which are already underway. The cross-selling index as of June is 1.53, with an outstanding evolution from 1.32 from December 2020. And Hey has an NPS of 71, 30 points above that of the system.
As for Hey business segments, we continue growing in a very accelerated manner, achieving an expansion in total volume of payment of 173%, mainly driven by our high-volume clients. As of June 2021, we reached 21,000 merchants, an annual growth of 15% and a quarter growth of 3%. We had 22 million transactions in the second quarter with an annual growth of 142%.
The amount of pesos transacted during the second quarter reached MXN 16,752 million compared to those MXN 13,326 in the previous quarter, converting us to the sixth largest acquiring bank in Mexico from the 12th position we had in June 2020. As of June 2021, year-to-date, we had MXN 182 million of transaction-related income, MXN 99 million from the last quarter alone, representing a 192% increase year-on-year.
Focusing on previously selected sectors, higher-volume merchants and using our platform to solve client special needs with easy integration has helped us grow faster. In order to do this in a very efficient way, we have reassigned terminals from inactive and smaller customers, moving the latter to lower-cost mobile POS.
We continue developing our capabilities to increase our value and differentiation in all the segments, sizes and sectors, always taking into consideration increasing our customer lifetime value through cross-selling other banking products.
In conclusion, we're satisfied with the second quarter 2001 (sic) [ 2021 ] Regional performance, highlighting our outstanding asset quality with an NPL ratio contracting 6 basis points, reaching 1.6%. After a full quarter out of the relief programs, there are no more expected impacts nor in past due neither on provisions due for the pandemic. The capitalization remained very solid, showing an excellent figures with a capitalization ratio of 15.1% as of May 2021, which generates an excess of capital of 300 basis points compared to our internal limit of 12%.
In terms of liquidity, we have a buffer of MXN 25,000 million, and we have the capability of adding MXN 23,000 million more. Our efforts have been reflected on asset quality, higher deposits that allow us to operate with excellent liquidity levels, the continuous growth on nonfinancial income and the excellent results of our digitalization efforts. Even though we expect better results in the next 2 quarters, we maintain our guidance for the year.
Furthermore, and the economy continues recovering, we expect to have more credit demand and resume loan growth in our wholesale business. In addition, we will maintain our digitalization efforts in both Banregio and Hey. We will continue investing as we know we are leading the financial experience arena in Mexico while promoting financial wellness to our clients.
Thank you very much. We appreciate any questions.
[Operator Instructions] Our first question comes from Ernesto Gabilondo.
Manuel, Enrique and Alex, congratulations on your results. I have 3 questions from my side. The first question is on NIMs. I would like to know, how are you seeing interest rates by year-end? And how should we think of NIMs in the next quarters and for the full year?
My second question is on cost of risk and expenses. We noticed that both came much lower than your guidance. I believe you were guiding cost of risk of 0.8%, 0.9% for the year and expenses around 10%, 11%. So after the second quarter results, how are you expecting both lines for the full year?
And my last question is on Hey Banco that is positioning as the first unicorn digital bank in Mexico. So when do you expect to provide some targets for Hey Banco? When can we start to see a P&L, balance sheet and an ROE?
Thank you, Ernesto. Thank you for your questions. Regarding NIM, we're seeing the interest rate probably 25 basis points more throughout the year, probably 50, but not so much. We think, definitely, this will help us a little bit gaining on their NIM of loans. We're going to maintain our guidance, but we think it will help us a little bit, obviously, because of the effect of just the 6 months that we have, right?
In terms of the cost of risk, we had a very good quarter, definitely. But still, we are maintaining our guidance. Probably, we're going to be able to achieve probably 0.7%, 0.8% throughout the year. Nothing related to the pandemic. I would say more related to the typical business that we have.
In terms of expenses, we definitely are seeing a better trend. We think we're going to end at a lower rate of growth, probably around, at the most, I don't know, 8%. Will depend obviously on how much sales go. I mean there's definitely some lines of expenses that are pretty heavy, like the cost of the IPAB, which is the insurance of the government for the deposits. And that's something that if we are growing at a very fast pace, we cannot do anything about it, right? So there's some lines that are pretty much attached to growth. And if we're growing Hey Banco at a very exponential growth, well, expenses are going to grow at that same pace in those -- for example, in credit cards or in terminals, in POS terminals. So there's some of the expenses that might go above the average rate that we have, right?
But in terms of other expenses that are more related to the infrastructure that we have, we think that we are going to be able to maintain these levels and being able to achieve a better operating leverage, even more so as we digitalize more and more clients.
In terms of Hey Banco, definitely, we're going to be able to give you guys more color. We've been doing our homework and being able to give you more and more information. This quarter, we are disclosing more information. And hopefully, the next would be an additional part of it. And obviously, if you have any further questions, we can talk about them later on the call.
We are seeing, at the end of the year, around 300,000 active monthly users -- clients, I'm not going to say users, clients. It's pretty different from what I've seen in other fintechs that they have a more lax way of counting clients but are pretty strict, and we'd like to keep that very tight. So we're going to be able to see, we think, at this growth rate, around 300,000 active customers at the end of this year.
We are aiming for 1 million customers at the end of next year. At this growth rate, we're going to be able to have 600,000 clients. But we're adding more segments that we're attending. For example, sole proprietors, we're adding small companies that are -- they're going to be able to open a digital account fairly easy, much easier than any other bank. So we think that we're going to be able to have a better growth in terms of adding more customers.
Now we do have a very healthy margin per client, and the acquisition cost has been pretty low. And we've liked this because we already understand our customer dynamics and we think we're going to be able to have more strategies to add more clients in a very productive manner that are going to add up to those -- to the growth of clients per month. So we are pretty positive about the trend, and we see more and more interest from the market from digital offerings. We see that as a very good thing. I mean we love that there's a lot of expanding on -- many fintechs out there trying to push their product. And we love that because that makes us -- that makes people more conscious about the digital offerings and being really able to, later on, consider Hey Banco as their main bank, right? That's our main objective. So as a sense, we think we're going to be able to achieve those 300,000 customers at the end of the year and 1 million at the end of the next year.
Excellent. Manuel. So let me ask you 2 more questions. When looking to better prospects on NIMs, cost of risk and expenses and the fact that accumulated net earnings as of second quarter annualized to 19% year-over-year, that is above your net income guidance of 6%, 10%. How do you see now your net income guidance? Do you see that net income will be easily at the high end of the range and still with outside risks? And then the second question is on Hey Banco. If you have any updates from a third-party fintech or private bank interested to invest in Hey Banco?
Well, there's -- well, in terms of -- we're not changing our guidance still. We're going to be prudent on that manner and being able to do so very soon. If we see a continuation of this trend that we think it is going to be able to do so, but we were going to be prudent and not change our guidance still. We do think that we're going to be able to achieve our guidance easily, I think, but still prudent in changing our guidance.
In terms of Hey Banco, there's interest definitely, but nothing that really makes us take the opportunity. So still, there's nothing new in that sense in that arena.
Our next question comes from Carlos Gomez.
2 questions from me. The first one refers to loan demand. I mean we see a significant growth in the retail business, less so in the wholesale. So what is your expectation for the rest of the year and also for next year? And second, what is your outlook in terms of dividends for the rest of the year and for 2022?
Carlos, thank you very much for your questions. In terms of loan growth, we are seeing a pickup in demand in our wholesale business and in our leasing business. Nothing pretty strong, but stronger than we had in the previous 2 quarters. We think we're going to be able to achieve our guidance, I'll say, in the low-middle part. And for the next year, we do see a more dynamic economy, more in the north part, in the center part of the regions that we're going to be able to really see an impact on the manufacturing, industrial part of Mexico. And we think that's going to be pretty positive in the next -- following, I'll say, 4 quarters.
We're seeing more and more investing, for example, in industrial real estate in all the north part of Mexico, and we see a lot of demand there and for -- a lot of manufacturing companies arriving to our home state, for example, and even to the part of [ La Ovejeria ]. So we see a very good trend in terms of loan demand in the short term, I mean, the next 12 months or so in terms of manufacturing, industrial and industrial engineering -- real estate. So we do see a trend there.
We continue to see good trends in terms of homebuilders. We see there's still a lot of demand. There's ample room for Infonavit and the banks to continue lending. And the market still, it's growing, and the demand is still there, and we think it's going to continue.
Agriculture -- the agriculture part of Mexico, it's growing at a very fast pace, as you know. It's -- we're pretty positive in that sense, too. And then the part of the south, which is going to be, I think, a later recuperation in terms of -- all what depends more on tourism, which is we're not invested obviously there, but we're in those regions and in all the peripheral businesses that they have. So in a sense, we're going to be, I think, able to achieve more and more loan growth as the next 12 months go by.
In terms of dividends, well, nothing has changed in terms of the regulation and the objectives of the government as of right now. We saw already that in Europe, the dividends restrictions have already passed. And probably, we're going to be able to see that in Mexico in the short term. If that happens, we're going to be able to really give the dividend that we didn't give last year. Probably, this year would be -- that would be something pretty positive, or if not so, in the next year. We do see that we have around MXN 2,500 million or MXN 3,000 million of excess capital that we don't need, right?
So even -- we don't -- we're not using that money. And if we didn't have that capital, we will have -- and if we analyze this quarter net income, we will have a 20% ROE with this adjusted capital that -- so it is something that we're looking for and something that we're going to be, hopefully, able to do so in the short term. We're going to give you more color as we continue our talks with the regulators.
That is clear. But if I can go back to the first question, could you quantify that? I mean, yes, you see more demand and you expect to achieve the guidance. I imagine that there's a guidance for total loan growth. Could you give us an idea about what type of -- numerically, what type of loan growth we should realistically expect for 2021 and 2022, in your view?
Well, this year, 5% will be a definite mark that we could achieve. And next year, it would be above that, for sure. I couldn't say -- I will obviously try to say that above 10%, that's what our infrastructure is able to do so. But it will depend obviously on how the economic conditions continue to evolve.
We do have the infrastructure, we do have the funding, we do have the capital. So we do have everything in order to do so. And we're just trying to see how demand goes into place in order to give you guys more color and saying that we can achieve above 10% growth. We do see it's possible, definitely. It's nothing that we can't do, growing 10%, 15% with an economy that's growing at 2%, not on a recovery basis, but on a normal basis, definitely will be something that we can achieve.
Our next question comes from Yuri Fernandes.
Manuel, congrats on the results. I have a first question regarding -- actually, a follow-up on cost of risk. You are kind of keeping the cost of risk guidance for the year of 0.8%, 0.7% maybe. And in the first half, the cost of risk was 0.6%. So my question is, should we expect the cost of risk to be slightly higher in the second half, maybe like 0.9%, 1%, I don't know, so the average of the year goes to 0.8%? So that's the first question.
I have a second one regarding leasing. It was a very good quarter. So if you can explain what drove the 30-plus percent growth on the leasing revenues, that would be nice. Because when we look to the volumes, the volumes -- the leasing volumes, they are up about 2% in the year. So is this pricing, was this better asset quality? I don't know. Like what is driving this difference between revenues and the growth of the portfolio -- of the leasing portfolio per se?
And finally, my last question here regarding Hey. Again, very good that you are improving the disclosure, a lot of important metrics you are giving to us now, the CAC, the LTV, a lot of nice information. But I have just a question regarding the deceleration of the net client acquisition, right? Like usually, you were growing about 40,000 net adds per quarter. And I think this quarter was like 25,000, 26,000. And if you continue to that pace, it's going to be hard for you to reach the 300,000 clients you have as a guidance for this year end. So my question is, what happened this quarter that you have this deceleration? And what are you going to do to improve this, like to increase this net add for the second half so you can reach your guidance?
And just on Hey, here. I guess, you used to report NPLs. They were tracking slightly higher last quarter. What is the number of NPL for Hey this quarter?
Yuri, Enrique Navarro. In terms of cost of risk, it's not that we are expecting a deterioration, just that we recognize that this was a very good quarter for 2 main reasons. Obviously, if the loan portfolio doesn't grow, there is not a need for the -- around 0.8%, 1% of new provisions of the new loans. But also, we have good collections. And you can see in the NPL ratio, it not only [not] increased but decreased 6 basis points versus the last quarter.
But say that, as Manuel said, we are going back to business as usual. We know that we have some customers that we have to work with them. As you know, we monitor our portfolio very closely. Then we believe our regular or normal cost of risk should be around 0.7%, 0.8%. If we have 0.8% for the whole second quarter, we will have an average of 0.7%. That's why we were saying 0.7%, 0.8%. And it's just because we expect a more normal or regular quarter for the next 2. Then I hope I was clear. It's not that we see any problem, but also that we are going back to business as usual after the pandemic. We know our larger risks, and we are monitoring and restructuring these customers.
In terms of leasing, we have -- we recognized some income, 2 main reasons. We released some provisions. Maybe we have not explained recently because we haven't had this type of release recently. But we do a lot of provisions in the business of pure leasing. And from time to time, we release it when we -- when all the loans or leases end their period.
And also when we have good collections from, what you would call, past due loans, but there are not past due or written off. There are also leases that already finished their period. Then the depreciation is fully depreciated is 0, the value. Then whatever collection we do is registered fully as a revenue. Then it's very volatile, the value. These 2 you can consider is not -- all the quarters will be like that not. It's better. We expect at least 10 more millions per quarter above that we were registering, but not this 30 something, 38, 39 that we saw this quarter.
Super clear...
In terms of Hey Banco -- sorry.
No. Sorry, Manuel, go ahead. I was just going to say super clear. So basically, leasing should be running at 200 and something, like low 200. That was kind of the historical lap and the cost of risk was also very clear. It's not like a huge increase. It's more, maybe 0.8% in the second half so we reach 0.7% for the year. I guess that was the message I got here. But go ahead, Manuel.
Thank you, Yuri. Sorry, Yuri. Well, in terms of Hey Banco, the deceleration came from lowering the interest rate that we had in our -- on the time deposit. So it was pretty good and people were pretty enthusiastic about it. Now we lower that rate and we lower the cost of funding, which is pretty good. And we maintain an organic growth that we're pretty happy about. So we now have more information in how we can -- the dynamics of our customers that we're adding up. So we're more capable of investing on acquiring new customers and a more accelerated growth, adding more strategies of customer acquisition.
So in a sense, we -- as we said, the 300,000 mark is something that we think we can achieve, and definitely at a more profitable level that we were adding up those clients with higher rates which were not using any other product. Now -- so we are right now seeing a probably, yes, a lower dynamic growth but a more healthy client in terms of profitability.
So the awesome part of Hey right now that I want to really make sure we convey is that we are seeing a very profitable client. It is pretty different from what we've seen in other fintechs with a very low lifetime value or a very high customer acquisition cost. So we're seeing very good dynamics in terms of adding customers of higher value. And we think that we are tapping that segment which is pretty profitable, pretty big, pretty massive. And being able to go for those clients is going to be a more -- is going to produce much better results than producing clients that were not very profitable.
So definitely, we were more happy to grow 40,000 accounts, but not for those reasons, right? So right now, we're growing at a very good rate, and we think we're going to do so with the strategies that were underway right now, and in a sense, achieving the 300,000 mark.
Perfect. And do you have the NPL for Hey this quarter?
sorry, yes, definitely. Yes, the credit card NPL went down to 9.5% -- 9.3%. I think 9.3%. Yes, 9.3%. Sorry, we did have that figure in the document and we don't know what happened to that, and we're going to be able to disclose it in the short term.
And we do have other parts of the portfolio. We have auto loans. We have home loans, which obviously have 0% NPL right now because there's -- it's a very -- fairly new portfolio. So good dynamics.
What we're seeing in the credit card is it's pretty amazing. I mean 2/3 of the credit cards right now are -- that Hey Banco is producing are guaranteed credit cards. So it is a very new product in the market. So no one has a guaranteed digital card. The average credit card is around MXN 2,000, MXN 3,000 of that guaranteed card that we have. And for those that are not guaranteed are around MXN 45,000 in average. So very good dynamics in growth in credit cards, very good dynamics on which clients we're attracting and which product and seeing a more -- a very good, healthy client buying our credit card and using it, which is, I think, pretty awesome, pretty -- and more for the amount that we're giving. So MXN 40,000, it is something that is smaller than they should definitely, but pretty much very different from the MXN 2,000 that new bank has, right? So it's pretty different dynamics, and different clients are going to produce a better lifetime value.
We're closing all the non-guaranteed cards in the most conflicted regions in Mexico. So there are some regions in Mexico City that we don't have the unguaranteed credit card. We have even states that we don't have unguaranteed credit card. So we are pretty selective on who's having that card. But still, it is a very large market. And we, as for now, are seeing a pretty good repayment and a pretty high usage of the credit card. I mean we saw from a 2.8 transactions per client to a 5.8 transactions per client, which is pretty good, and the average ticket incrementing from MXN 350 to almost MXN 600. So it is a pretty good dynamics, and we're pretty happy about it.
We're not adding a lot of risk, and that's what I want to say. So we're not adding a lot of risk. And obviously, that's going to be a lower amount of portfolio. We don't think we're going to be able to achieve, I don't know, MXN 3,000 million or MXN 4,000 million of outstanding credit in the very short term. In credit cards, definitely not. But what we're seeing is clients are receiving the offer. They are pretty willing to use the credit card. The ones that are using the credit card are using it at a very good rate and are repaying at a -- much -- even much better than we had in Banregio. So pretty happy about the dynamics in the credit card and how things are evolving.
Our next question comes from Rodrigo Ortega.
Can you listen?
Yes.
Hello, Rodrigo. I think we lost you.
Hello? Hello?
Yes. Ready.
Sorry.
Yes, we can hear you. No worries.
My question's sort of a follow-up on what you just mentioned on Hey Banco. You provided us some details as to the targets on customers for this year and the next. But do you have a more solid guidance on what are you expecting for loan growth and origination per quarter or for the next couple of years or some targets for the midterm?
And also I would like to understand the implied rates in your consumer loans portfolio. They seem to be much lower than the average of the industry. And I wonder if this is because you're being more aggressive in pricing by focusing on higher-income segments? Or does this have to do with the high level of interest-free promotions?
On the other hand, you have a cost of risk in the consumer segment, which is much lower than the industry's. But since you're looking into growing this segment quite fast, which would be your level of tolerance to risk? Cost of risk in the consumer segment is roughly 6% now. Do you think it will trend towards industry standards? Or will you be aiming at maintaining the current 6%, which could limit growth potential, as you just mentioned?
Thank you, Rodrigo. As for guidance of loan growth for this year on Hey, we think we can achieve between MXN 500,000 to MXN 600 million, which is pretty conservative, which is -- I think was pretty prudent. The NPL ratio should be pretty low as most of the growth would be mortgages and auto loans, which we already are producing at a very healthy -- we have a very healthy perspective in terms of risk -- of credit risk.
It is the same parameter that we have in Banregio. So it is going to be -- the NPL ratio, it's going to be pretty similar to those that we have in Banregio at the moment. So the NPL should be pretty low on mortgages and auto.
In credit cards, with the restructuring that we did, we definitely think we're going to be able to produce much better results in terms of risk and in terms of repayment. And for those clients that don't have a good credit risk, we're giving them the guaranteed credit card. So we think that the NPLs and the cost of risk should go even lower for the credit card as things evolve.
As we said, we're not in a hurry to grow credit cards, definitely not. We're not pushing the culture that we have in Hey Banco versus, for example, BBVA or Santander. It's not -- we're not pushing credit heavily to customers because we don't want customers to see Hey Banco as a typical bank with the traditional offers and the traditional, typical way of attending them. So it is something that we want to make sure that we don't push credit, just give them the capabilities of adding it, right?
So we think, with all that I have said, the NPL should be pretty good, better than the system, definitely, and pretty similar that we already have, for example, in Banregio.
We're looking for Hey Banco not for the short term. We're looking this to be for the long term. So we're long-term investors. We're long term -- with long-term view. And we're building Hey Banco since 5 years ago. So this is really -- we think we are 2 or 3 years ahead from the competition in terms of the -- our customer experience and what we have been able to learn from our clients and learn how we could be able to achieve a very efficient and very productive operation. And we think that this mentality and this attitude definitely will produce better results for our shareholders in the short, in the medium and the long term.
And as for the next year in terms of loan growth for Hey Banco, we think we're going to be able to achieve probably around MXN 4,000 million at the end of the year. And I'll -- and again, more on mortgages and auto loans than credit cards and unguaranteed loans, but definitely a good mix in terms of producing good NIMs and good returns.
That would be MXN 4,000 million for Hey Banco alone?
Yes, for next year.
Okay. That's very useful. And about the rates, the average implied rates on the consumer loans, do you have any thoughts there as to -- I mean maybe they are low because you are precisely giving out guaranteed credit cards, which you may be able to offer at a much lower rate than market? But -- or is there anything else there?
So the interest rate that we're giving clients in the guaranteed card is 18% and on the unguaranteed, it goes from -- all the way from 20% all the way up to...
40%.
40%, yes.
39%.
Yes. We're not going to the 70% because we're not going to that type of risk, right? So new bank has, I think, the average rate at 70% for their typical MXN 2,000 credit card. The offer we're giving them is obviously the 18% APR, but obviously because of the guaranteed. So it is different in terms of the product offering, and I think it's going to be -- it's going to produce better results in the short term -- in the long term, sorry.
Since there are no more questions, on behalf of our senior management, I would like to thank everyone for joining the call, and we look forward to speaking with many of you in the coming weeks. If additional questions arise, don't hesitate to reach out Alejandro and our Investor Relations team. Thank you for your interest in Regional, and have a good day.
Thank you, everyone, for your participation. Hope to see you guys in the next one. Any question regarding Hey Banco or Banregio, please let us know. Thank you very much.