Regional SAB de CV
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Good morning, ladies and gentlemen, and thank you for standing by. Welcome to Regional's Fourth Quarter 2021 Earnings Conference Call. Today, we are joined by -- today by Manuel Rivero Zambrano, Chief Executive Officer of Regional; Enrique Navarro Ramírez, Chief Financial Officer; and Alejandro Lobeira, Head of Investor Relations. [Operator Instructions] Please be advised that today's conference is being recorded.
I would now like to hand over the conference to your speaker today, Manuel Rivero Zambrano. Thank you and please go ahead.
Good morning, everyone. I hope you and your family is healthy and well. We appreciate everyone's participation today. We're satisfied with our outstanding results of 2021. We see our strong bottom line and maintain solid financial indicators, mainly driven by our great funding structure, adequate expense control, excellent nonfinancial income performance and a higher demand of consumer credit.
During the quarter, Regional reported a net income of MXN 925 million presenting an increase of 80% year-on-year, resulting in an ROE of 15.3% and an ROA of 2.2%. In this period, Regional generated a financial margin of MXN 2,022 million, mainly due to our growth on higher-margin loans, expansion of the policy rate and an increase in demand deposits.
The NIM was 5.3% and the NIM of total loans was 5.8%. We had a great performance of our asset quality, reaching an NPL of 1.8% and a quarterly cost of risk of 0.9%. During the fourth quarter, MXN 260 million provisions were created, which is 45% lower than last year. Nonfinancial income reached MXN 863 million, a 23% growth year-on-year, mainly driven by our card, FX fees and merchant acquiring business, which expanded 49%, 48% and 5%, respectively. All of these factors generated a total accumulated income of MXN 3,092 million.
We'll still see the benefit of our cost control initiatives, resulting in an operating expense growing at only 2% year-on-year and reaching an efficiency ratio of 46.4%. The capitalization ratio remained very strong with 15.7% as of November 2021, which generates an excess of capital of more than MXN 4.4 billion compared to our initial internal limit of 12%. In terms of liquidity, we have a buffer of MXN 34,000 million, and we have a capability of adding MXN 22,000 million more. We continue our digitalization and automation efforts seeking to constantly improve our productivity without sacrificing profitability and customer experience. For example, this quarter, we opened 327,000 fully digital accounts.
As of Banregio, we had a total increased loans of 7%, mainly due to our growth in the wholesale business. Meanwhile, other portfolios like SMEs and consumer loans are maintaining their dynamic and solid growth. We continue to improve our customer experience, which is why we had such a great performance in our core deposits, boosting our liquidity and lowering our cost of funds.
Demand deposits grew 28% in all of our segments, explaining by our strategy of attracting new SMEs to customers and our POS volume growth. Additionally, time deposits decreased 8% year-on-year. Regarding the performance of our business segments in the wholesale portfolio, we had a loan growth of 7%. Among the regions, Nuevo León stands out with an increase of 11%. Moreover, the cost of risk of the total portfolio stood at 0.6% and the NPL ratio at 1.3%. We are very pleased with our retail banking performance, which achieved great commercial loan quality and growth. The consumer portfolio grew 16%, SME, 6%. Meanwhile, auto and mortgages decreased 3% and 1%, respectively. We had an amazing demand deposit growth due to the SME and individuals. We had an impressive 32% growth in SMEs and 17% growth in individuals. As for asset quality in retail loans, we remain very healthy in every product, always much better than that of the system. In the SMEs, the NPL ratio was 5.1%; auto, 1.5%; consumer, 1.9%; and mortgages was 2.8%.
As of Hey Banco, we continue to see exponential growth, concentrating our efforts in maximizing our value to offer to clients, being able to grow and cross-sell financial products in a very productive manner. Core deposits for individuals reached MXN 7 billion, a 3.8x growth. And likewise, in active customers, as they grew 165% year-on-year reaching the mark of 396,000 active customers. During the last quarter, more than 281,000 new accounts were opened. And our credit card had a very good acceptance, adding more than 50,000 accounts to our portfolio, increasing the penetration from 13.5% to 14.2% over the active customers that have a credit card with us.
Transactions have remained stabilized for a transaction per customer and an increase of the average ticket from MXN 500 to MXN 700. The overall credit and debit transactions reached 12.1 million in the quarter with an annual growth of 235% and a quarterly growth of 37%. Loans reached MXN 1,878 million, and the loan composition is 64% auto, 18% credit cards and 18% mortgages.
As of December 2021, the monthly income per active user was MXN 84 and the cost to service MXN 39, which gives us a projected lifetime value of MXN 2,700, while the acquisition cost per active user in December was MXN 300, setting the lifetime value over CAC ratio at 9x, allowing to continue to invest in customer acquisition and continue growing at the same pace.
The cross-selling index as of December was 1.6, with an extraordinary evolution since 1.4 that we had at the beginning of the year. The NPS was reached 75.4, which is the best of the industry. As of Hey business segment, we continue growing in a very accelerated manner, reaching 35,000 merchants with an annual growth of 47% and a quarterly growth of 21%, with an average payment volume per merchant over the last 12 months of MXN 200,000.
We had reached 36 million transactions in the fourth quarter with an annual growth of 139 and the amount of transaction reached MXN 25.8 billion compared to the previous quarter of MXN 19.6 billion maintained as a sixth largest acquiring bank in Mexico.
As of 2021, we had MXN 398 million of net commissions and MXN 127 million from the last quarter alone. We continue developing our capabilities to increase our value and differentiated offer in the different segments based on size, sectors and special needs, always taking into consideration an increase in customer lifetime value through cross-selling and other banking products.
In conclusion, we are very pleased with reaching our 2021 results. Our efforts have been reflected in our asset quality, higher deposit that allow us to operate with excellent liquidity levels, strong loan growth, outstanding performance of our nonfinancial income and excellent results of our digitalization efforts. We will maintain our efforts to promote financial wellness and become the main bank for our customers.
And thus we'd like to share you our next year's financial objectives through our guideline. The growth of total loans between 8% to 12%, to grow the car deposits between 10% and 15%; net interest margin between 5.3% and 5.7%; growth of net income between 13% and 17%; return on average equity between 17% and 18%; nonperforming loans below 2%, efficiency ratio between 45% and 48% and the cost of risk between 0.7% and 0.9%.
Thank you. We appreciate any questions.
[Operator Instructions] Our first question comes from Ernesto Gabilondo.
Congratulations on your results. I have 3 questions. My first question is on dividends. Just wondering if you have approached the new regulator to see when should we expect the potential payment of deferred and ordinary dividends. In your presentation, you mentioned that you have an excess capital of MXN 4.4 billion above [indiscernible] internal limit of 12%. So is that what you were thinking to pay as dividends in 2022. And would that be in 1 exhibition or 2 exhibitions? So that's on dividends.
Then my second question is on the reserve coverage ratio. We saw it closed around 132% of nonperforming loans is still above the pre-pandemic levels of 120%. So do you see the reserve coverage ratio returning to prepandemic levels this year? Or do you expect to keep levels of around 130%?
And then finally, my last question is on Hey Banco. Just wondering on how much do you think Hey Banco will be contributing to the earnings growth this year? Or do you think, Hey should be more visible in 2023?
Thank you for your questions. In terms of dividends, we don't have anything about the authorities limiting the dividends this year. We have reached them, and they have pronounced that they don't have any further comments. Then probably we wouldn't see any problem in continuing our plans on giving the dividend as we expected. We are doing it in -- we're planning to doing it on one -- onetime payment. And hopefully, everything will be on track for that. The amount we are already expecting is around MXN 4,000 million.
In terms of the coverage ratio, Enrique will give you more color about the changes on IFRS, and I think.
Enrique, if you'd...
Yes, good morning, Ernesto. Due to the IFRS 9 changes that are compulsory this month, we'll go directly through the equity. It won't go through the income statement at the end of January. It will be already reserve. With this increase, if you do the calculation, we will go like 1.5, 1.6, at most. And we expect that to be the new normal around 1.3 to 1.5.
Also, as you saw this quarter, we have an increase in as you launch, we have a couple of large customers in our business banking. That required provisions once they are regularize in terms of the payments after the restructure, we will release some provisions next year -- well next quarter, this year, next quarter. I hope I was clear, Ernesto.
Yes.
Yes. And for the last question about what we're expecting for revenues. Right now, we are having around 4% of revenues from Regional is coming out of Hey Banco and we think it's going to go around 9%, 10% for this year, at the end of the year.
Excellent. So that's on revenues. And any color in terms of the net income?
Yes. That would be around -- obviously, that's going to be less. And I think it would be around 2% or 3% of the net income of what we expect from Regional, so it would be around MXN 100 million approximately.
Our next question comes from Thiago Batista.
I have 2 questions. The first one about the loan growth. You indicated the loan growth close to 10% for this year. If you can discuss a little bit more what type of segments should lead this expansion? And the second one about -- on Banco Hey, if you have seen any relevant impact from Nubank on Banco Hey operations. So Nubank is clearly trying to expand in Mexico. So if you have -- if you have seen any increase in competition in Mexico with the Nubank presence here in the country?
Yes. Thank you, Thiago. In terms of what we're expecting on loan growth for this year, we're seeing a bigger -- a larger trend in terms of more demand in all their segments but less so on our core in terms of percentage of assets, which is larger companies. Definitely, we see this quarter that there is more demand that we were seeing in the last -- in the third quarter of last year. And we think that trend will continue, but not into something very aggressively. We think it's going to be -- it's not going to -- it's going to be slow. And I think it would be depending on which regions you're participating in.
In the case of regional, we are pretty much on the center in North. And we're seeing more demand on the North part of the country, which is more in terms of the Maquiladora all the United States. And Canada treatment with Mexico, obviously, has translated into more confidence in and then continue investing in, obviously, near the border. It is more than in the center part of Mexico. And we see that smaller ticket loans in, for example, in smaller companies show pickup and even medium-sized company loans should be bigger. And that's because we have a very low participation in the market. So we think we're going to be able to gain a little bit more market share within this year.
And consumer loans, definitely, we see that we're going to be able to grow auto and mortgages at a faster base with Hey Banco. And not so much credit cards as we're not pushing that product very aggressively and -- but definitely, we're going to grow that portfolio in a bigger size, but at a slower pace, right?
So I think those are the main drivers for next year loan growth. And obviously, it will depend on how the economic performance of Mexico continues. And we think there's still good positive signs of the economy continue to recuperate its footprint as we go along the year.
And the second question about Nubank. I think it is very positive that Nubank and others continue to advertise digital products here in Mexico, and that gives us a very good exposure to other clients that didn't have or didn't knew about our offer. So we think that definitely our main competitors are the big banks. And obviously, with this new announcement of Citibanamex, or Citi leaving retail banking in Mexico, obviously, that is a very positive thing for us. And those are our main competitors, and definitely, they continue to weaken and continue to divest. And obviously, we love that, right? Because we -- the clients are all are easier to convince to have their full operations here with us in Hey Banco. And definitely, we think we're going to see that trend continuing further on.
Our next question comes from Carlos Gomez.
I have 2. The first one refers to your pretty impressive deposit growth. We know that has been a goal of yours for some time, and you are clearly changing the mix of your deposits. What do you expect for this year? And at what point do the higher rates start to become a problem in terms of reducing your cost of funding? And the second is regarding the sale of Citigroup. What do you want? What would you prefer? Who would you want to buy Citigroup? What do you think is better for the system and better for you in particular?
Thank you, Carlos. In terms of deposit growth, it's very -- it's not concentrated. We have been monitoring the growth in all the segments and it's even. And we're very happy that it's mainly in the small businesses and individuals that in the Banregio part and it's only individuals right now in the Hey Banco portfolio. Then we don't expect it to get diluted once for being large amounts of deposits in 1 single customer. Obviously, we have growth also in government, but it's not a big proportion of the increase in deposits.
In terms of the cost of funding, as you can see, we have changed the mix, and we have moved from time deposits to repurchase agreements, the excess of liquidity that we have right now. We don't expect to increase a lot. We have been moving from mid-60%, 65%, 64% of the TA cost, all the way to 55%. It could go up, and we expect it to stabilize around 60% of the TA in the medium term. Then yes, it could impact, but it's not something that should happen very quickly. As I mentioned, it's very pulverized, very diversified deposit base.
And if I can follow up there on the deposits. As you said, you are still managing to attract small deposits. We hear a lot about competition in cards or in other products. But do you see a lot of competition in deposits or not just yet? Is that changing?
Not yet. We have managed to attract a lot of deposits from small businesses, due to that we are very fast and we will be faster with Hey. But right now, Banregio process to open an account is pretty efficient and also with all the cross-selling that we have done in the terminals point of sale, then we have managed to grow a lot in the small businesses.
We haven't seen competition. Obviously, the larger banks are far bigger than us, then the competition is there. But there is not a competition in terms of someone else paying higher interest, not as they also have an excess of deposits as which channel our excess of deposits to repos, they channel it also to repos, but also to mutual funds. Then right now, we don't see that competition coming. Still we are the ones that we pay the highest rate in time deposits. That also has been very attractive for new customers that they bring both the checking account as well as the time deposit. We have seen -- if you see the CNBV data only the medium-sized banks are growing deposits -- Afirme, Bajio, and us. The large ones are very stable.
Yes. And we think that Santander, Banorte would be the best for us, definitely. I mean we do -- they do have the most overlapped footprint, and that would create the perfect uncomfortable ability of clients, probably when they close most of -- or 50% of the branches probably. So definitely 1 of those 2.
Our next question comes from Jorge Henderson.
Do you hear me?
Yes.
Perfect. Congratulations for the results. I'm sorry, could you repeat your loan growth guidance, please? I didn't get it.
Yes, between 8% and 12%.
Okay. Perfect. And from this guidance of 8% to 12%, do you have like an estimate of how much would it come from Hey Banco for 2022?
Yes, about half of the delta.
Interesting. Okay. And I mean just a follow-up on that. Do you have -- do you see loan growth accelerating after 2022? Or do you expect to stay around 8%, 12% from '23 on?
We do have the -- we do expect it to continue that trend, and we think it would be much better in 2022 and 2023. So it would be -- we do have a new set of clients. As we already mentioned, we have 400,000 clients up to date in Hey Banco. So that creates an opportunity to cross-sell more loans. So obviously, doing that through the years, it will create another source of loan growth. So that's going to be imprinting more and more so as the years go by, right? So it is if we have created out of thin air 1,500 branches. So that's the amount of accounts for opening. So we're opening around 4,000 accounts per day. So we need around 5,000 -- 1,500 branches to open those accounts. So you can imagine the opportunity to -- that we have to cross-sell more loans to those customers. So that's where we're expecting to be able to loan, continue growing at a faster pace.
Now that being said, we do expect Banregio to continue growing as we do have the infrastructure to do so. I mean we have the capital, we have the funding, very cheap funding now. And we have the -- obviously, the knowledge and to continue to grow and have more market share. So we do think that we're going to be able to have almost the same of -- the same pace of growth in the traditional bank than we had before prior to the pandemic. So definitely, we do think the trend is to continue growing and expanding and continue accelerating the growth.
But we're going to see -- I mean, obviously, this is on a per quarter basis and things could change as we know drastically from time to time and definitely we'll give you anything can change. But as we see the conditions right now and how are we being able to gather more and more clients that are not small accounts, they're very good clients. They're not new entrants of the -- to the system, they have -- they are in their 30s, right? So they have -- we have a very good opportunity to cross-sell loans to those clients with a very -- in a very effective manner, in a very efficient manner and with very good quality in loans. So yes.
Okay. And I have another question. Do you have -- do you still plan to spin off Hey Banco this year or next year?
Well, it is going to be -- we do still plan to separate the bank. So that's we're working on right now. So we have -- we're going to -- we're working on having 2 different banking licenses. We've already have the first -- I mean the conversation with the President of the CNBV. And they're ready to continue the process, and we think we're going to be able to do so hopefully this year.
Our next question comes from Yuri Fernandes.
Congratulations on the strong revenues, good quarter. I have a first question regarding Hey Banco. I note you changed the CAC calculation for the bank. I guess in the previous quarter, this number was closer to $5, and now it's something closer to $15. So my first question is what changed in the -- your CAC calculation?
And I have a second question regarding G&A, regarding costs, right? You provide the guidance for efficiency ratio, and we kind of know your loan growth and your potential NIM expansion, but we don't know fees. So for us, it's harder here to estimate the G&A. If you can provide some color, how much you believe your expenses may grow in 2022 that would be nice. I'm reaching something closer to 10%, but I would like to get a better color from you.
I will answer the 2 questions. In terms of the CAC, the calculation has not changed. We have a lot of seasonal promotions. And also we increased the advertisement expense during the last quarter. It was an opportunity to test the market, and we see an increase of accounts, then we have promotionals during the last quarter. We had a promotion where we were paying -- how do you say...
A percentage of cash back.
A percentage of cash back. A higher percentage of cash back.
And what we're expecting for the next quarter would be to go around MXN 150 to MXN 200. So it should go down. And mainly because of various reasons, one is that we just change our onboarding process, and it has proven already that it's pretty much -- pretty productive. I mean -- and has been producing outstanding results in terms of being very efficient on opening accounts.
And the second would be that we have to yet release our check-in accounts and our bundle for small businesses. And that's going to be in the first week of February, and we do expect that to be pretty good in terms of cost of acquisition and volume in terms of volume growth. And then in terms -- and we're planning on opening the children's account later on -- in February or first of March, and that would be producing again good results in terms of lowering our cost of acquisition because it's pretty much -- it is going to be pretty much very productive in terms of adding more efficiency. So we think it's going to be lower and having obviously the same types of growth, and we think that's going to be pretty positive. We just -- we changed completely the app. So we -- we're going to -- I think we're going to be able to see more and more cross-selling as the app has changed from an horizontal...
[Foreign Language]
[Foreign Language]
It changed from a horizontal experience to a vertical experience. So that's going to be, I think, pretty well received already and being able to produce more and more cross-selling opportunities. So definitely, we think that the cost of acquisition is going to get lower and we're going to be able to continue the trend on the income per client.
No, super clear. If I may, just a follow-up regarding Hey, before we move to expenses. Can you refresh us here, Manuel, Enrique, regarding what is an active user for you, what is your criteria for active users?
Sorry?
Active users.
The definition is basically they have to have more than MXN 100 and they have -- or at least 1 transaction, monetary transaction, in the last 3 months, or they were open. We consider the opening of the account to be part of these transactions. And all the new customers in the last 3 months are considered active until -- unless they don't do any deposit during the initial 3 months. That is broadly the definition.
Got it. So about like 30%, 35% of your total clients, that is the 1.2 million are active by those definitions. Just checking if I had the numbers correct.
Yes.
Okay. And regarding expenses, can you provide some color there?
Yes. In terms of expenses, we are expecting growth between 12% and 16%. As you know, most of our expenses are indexed to inflation, and inflation was 7%, both in payroll as well as in rents and some long-term contracts that we have -- then that's the main reason. And in terms of expenses related to employees or payroll, we have been hiring. We have a very good process of containing the cost during the whole 2020 and the first half of '21. But we started hiring back in August, then all the personnel, mainly IT developers, designers, the expense will be increasing also the year-to-year comparison as most of them entered between August and December. And this year, they will be the whole year with us.
No, super clear, Enrique. Given like the amount of the revenue growth pace you are seeing, I guess, that's okay. Hopefully you can push back just -- wanted to have like a view on your guidance for expenses.
We're expecting around 15% of net income growth. That's what we're expecting. Yes?
Yes.
Our next question comes from Gilberto Garcia.
I had a question on Hey Banco. Very impressive loan growth quarter-on-quarter. Can you talk about what credit quality trends you're seeing there because I remember last year, there were some questions about the NPLs there as you were starting to grow. Can you talk -- tell us about how you're seeing the newer cohorts?
Yes. We have 3 main products. The credit card used to be our only product. And we used to have, if you see the history, 12% of NPL last year. Right now, it's less than 5% in the credit card, the NPL. The new vintages of 2021, are having less than 1% of NPL. They are very new. We know and they are growing. Then once they finish the growth, we expect to stabilize around 3%.
But in auto and mortgage, they are very, very good portfolios. Auto is less than 1% of NPLs and mortgage, that is very recent, is 0%, right now, of NPL. The mix of the 3 is 3. -- Alejandro, do you have it...
[Foreign Language].
Well, it's like 3.5. We will make it public, but it's like 3.5 the NPL of the 3 products right now. We're being very careful on the new vintages. Very selective in terms that we have the same credit scoring system as Banregio has had. We are starting to differentiate with new technology, but the base is Banregio credit scoring. It's 3.9. They are telling me, it's 3.9, right now, the NPL for the 3 portfolios.
Understood. And I had a follow-up on the -- what you're thinking about the Banamex transaction. Just to make sure I understood correctly. You said that either Santander or Banorte would be the best -- what you would see as the best alternatives for you guys in terms of implications. You -- let me put it this way, you wouldn't object from a competitive concentration point of view to them acquiring these assets.
No, definitely not. I mean we think -- I mean in terms of what we're going to be able to acquire in terms of new clients, we think, I mean, as of right now, we received a lot of calls from clients that are working right now from Banamex. So I think that that's going to continue on. And having a competitor completely distracted doing a merger and then trying to create synergies would create definitely very good opportunities to continue growing organically. So we think that's pretty positive.
Our next question comes from Eric Ito.
And congrats on the results. So I have 2 questions here. The first one is regarding NPLs, but on the Banregio standpoint. So I just wanted to see what are you guys expecting for the year among the breakdown as we are seeing consumer NPLs decreasing over the last quarters? So what do you see here?
And then my second question is on fees. I don't know if you have mentioned what is your expectation for fees. But if you could give us some color on that and what you're expecting for this line as well would be great.
Just give me one second. In terms of fees, for the next -- for this year, for '22, we expect around 13% to 17%, whereas in other terms, we expect around 15% of growth. And for the NPL, we have always guided below 2%, and it's not that we are expecting to increase all the way to 2%. But in terms of Banregio portfolio, we expect an improvement, as I mentioned in the first quarter during the first quarter or second quarter of the year because some of the customers were as due during the last quarter, will be restructured or they have already been restructured, if they managed to do the 2 payments as is the rule in Mexico, we will see them out of NPL. Then it will be moving between 1.6% to 1.8%. We don't expect a further deterioration right now.
Our next question comes from Jose [ Guenter ].
Just a follow-up with regards to asset quality. What we see -- saw during the quarter is that even though write-offs as percentage of gross loans remain relatively stable. There was an increase both quarterly and yearly. I just wanted to understand what drove this increase in write-offs. And very quickly, just a follow-up to the fee question. You have just mentioned your growth expectation, but I wanted to understand, or if I understand correctly, most of this growth would come from your cross-selling efforts? And just wanted to clarify if this is correct or what else are you -- what actions are you taking to keep this very strong fee growth?
I just want to see if I understood correctly, the 2 questions. In terms of write-offs, I do not see a growth against the year, well, it's a small growth from MXN 200 million to MXN 160 million last quarter and MXN 149 million in the fourth quarter of 2020. But last year, we had 2 quarters, one of MXN 300 million and another one of MXN 200 million. Basically, we are following the same rules that we have always supplied except on the third quarter of 2020 that we anticipate some write-offs. But this quarter, there is nothing special, basically all the -- with the current regulation of loan scoring, we -- all the loans that require 100% of provisions that basically in businesses is after 18 months or 540 days. We do the provision to the 100%, and then the next one we wrote off. And there is nothing special driving that wrote-off. It is mainly -- the only explanation is -- if you remember, last year, we had these release programs of -- relief programs from the government that many customers went out of the relief program between November and February.
Some of them are reaching this number of days or past due months. That will be the closest explanation, but that's the only reason.
In terms of the second question, are you -- can you repeat the question about the fees, the nonfinancial income?
I just wanted to understand a little bit more what kind of -- I mean, you already mentioned that you expect cross-selling to be one of the drivers, I believe, of your strong fee growth. Just wanted to understand if you could provide a little bit more detail, I mean, in addition to cross-selling, what else have you been doing that would support this very high growth rates of loans going forward?
No, no, that's not the lead, definitely. I mean we do have open market in both [indiscernible] definitely is cross-selling. I mean the credit cards that we're selling are as a second or third product. It's not the first product. So we do have mortgages and auto loans produced by brokers, most of the mortgages definitely. And -- but that's it.
In other nonfinancial income like foreign exchange fees or is mainly cross-selling. It's cross-selling to our customers that we already have within the business banking unit. The ones are import or export, we are cross-selling that's the other large proportion of nonfinancial income. On the transactional one, obviously, the income by credit cards and debit cards as we're increasing a lot the debit cards within the checking accounts or within the demand deposit accounts. We have seen an increase on the nonfinancial income also the transactional one. There are the main items.
And the POS -- within the POS, the only thing that we are doing differently is that we have attracted large customers, a lot of small and medium customers from our business banking and medium-sized business banking units, but also a couple of large e-commerce that are helping to increase the nonfinancial income by the -- in that item, that is point of sale in the merchant-acquiring business.
Our next question comes from [ Mario Cohen ].
Sorry about that. I had to unmute. Two clarification questions and then one just kind of understanding how things work question. One is, did someone on the phone just mention net income growth of 50%. I may have heard that wrong over the webcast. That was number one. And number two...
15.
What?
15. 1-5.
I thought that was a little wrong.
Yes, excuse me, definitely.
And number two, I think you mentioned Hey Banco's contribution to the bottom line of about MXN 100 million. Was that a correct number?
Yes.
Okay. So -- okay. And then I'm curious, when you guys talk about like your new accounts count as active accounts. Can you maybe help us understand -- we know that Hey Banco is relatively new. But on a little bit of a lagging basis, like what does the -- how do those brand-new just put on accounts attrite through as part of active accounts. Three months later, 6 months later, like how should we think about like new accounts versus what stays active, let's say, 6 months later? How do we -- how should we think about that -- And have you offered any guidance to the total number of acquired customers on Hey Banco for 2022?
Yes. So our guidance is 1 million customers at the end of the year. I'll say, half of those customers that open accounts remain active prior to those 3 months? And we do think that, that's going to change depending on the dynamics going on further -- going on. But definitely, we see more and more clients engaging as we release more and more products. So it is pretty speculative to say that that's going to remain. So I mean, we'll give you more color on how things pan out. But hopefully, the trend continues to be the one that clients that open an accounts remain active and continue to using more and more products. But that doesn't mean that we cannot retarget those customers and that we're not retracting -- re-attracting those customers. So we have more and more information with them. And obviously, that creates a -- an easier way, an easier path to continue to remarket those customers. So I wouldn't think that those customers are completely dead. But definitely, we would love to have them stick with us more and more so.
Our next question comes from Brian Flores.
Just wanted to ask, can you hear me well?
Yes.
Perfect. Just a quick favor. Could you repeat a bit more slowly the guidance you provided, it would be of great help.
Sure. One second. So loan growth between 8% and 12%; core deposits between 10% and 15%; net interest margin between 5.3% and 5.7%; growth in net income between 13% and 17%; return on average equity 17% to 18%; NPL ratio below 2%; efficiency ratio between 45% and 48%; and the cost of risk last 12 months between 0.7% and 0.9%.
Thank you. And just to confirm, you also mentioned fees around 15% and expenses between 12% and 16%. Is this correct?
Yes.
Since there are no more questions, on behalf of our senior management, I would like to thank everyone for joining the call. We look forward to speaking with many of you in the coming weeks. If additional questions arise, please don't hesitate to reach out Alejandro on our Investor Relations team. Thank you for your interest in Regional and have a good day.
Thank you very much.