Related Party Transactions
Related Party Transactions are regulated in accordance with the "Ley de Instituciones de Crédito", "Ley para Regular las Instituciones Financieras" and the "Ley del Mercado de Valores", as well as in terms of the nineteenth article established in the Bylaws on Banorte Group, S.A.B. de .C.V ("GFNorte").
These transactions are classified as follow:
- Loans to Related Parties
- Relevant Foreclosed Assets
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Internal Control System
GFNorte places special attention to the internal control of its transactions, the origination, processing and disclosure of accounting and financial information to its investors, customers and suppliers, and to comply with the applicable regulations.
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Bylaws Banorte Group
The GFNorte Bylaws contain the working rules applicable to the Company´s operation that complete the set-up of the provisions of law.
The Bylaws may be amended, usually by means of a resolution adopted by the Extraordinary Shareholder´s Meeting, or by the Board of Directors in specific cases, and the relevant changes come into force when the resolution is filed with the Register of Companies.
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Bylaws Banco Mercantil del Norte
The Banorte Articles of Association contain the working rules applicable to the Company´s operation that complete the set-up of the provisions of law.
The Articles of Association may be amended, usually by means of a resolution adopted by the Extraordinary Shareholder´s Meeting, or by the Board of Directors in specific cases, and the relevant changes come into force when the resolution is filed with the Register of Companies.
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Dividend Policy
GFNorte's Ordinary General Shareholders' Meeting held on April 30th, 2019 approved the modification of GFNORTE’s Dividend Payout Policy. Such modification allows the dividend payment to range between 16% and up to 50% of the prior year’s net income. This policy will be applied to decree any subsequent dividend payments to the aforementioned Meeting.
For reference, the previous payout policy, approved on November 19th, 2015, established a dividend payout between 16% and up to 40% of the previous year’s net income.
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Code of Conduct
The Code of Conduct is a general framework that shall adapt to the changing nature of our environment, for this reason, we seek to strengthen its content year by year to keep it valid, integrating issues related to market situation overall and everyday experiences.
Our personnel and executives are strongly committed to the Group's Code of Conduct as part of a consistent effort to strengthen a culture of honesty and accountability..
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Shareholders' Rights
The Stock Market Law provides minority shareholders with more rights; therefore, the regulatory framework was improved in order to guarantee such shareholders' rights. The articles concerning minority shareholders' rights in the Stock Market Law are number 49, 50, and 51.
Article 49.- Shareholders of a public company, not withstanding what other laws or the company’s bylaws, will have the following rights:
I. Have at their disposal, in the Company’s offices, the information and documents related to each of the agenda items for the corresponding shareholders meeting, free of charge and with an anticipation of at least fifteen natural days of when the shareholders meeting will take place.
II. Impede that any item to be discussed in the shareholders meeting be stated as general matters or any equivalent term.
III. Be represented in the shareholders meeting by any person that is accredited with the power of attorney formats provided by the company, which will be made available to stock market intermediaries or with the company, with an anticipation of at least fifteen natural days of when each shareholders meeting will take place.
The power of attorney formats must at least include the following requirements:
a) Express in a notorious manner the company’s name and the respective agenda
b) Contain a space for the voting instructions to be provided by the person signing the power of attorney format.
The Secretary of the Board of Directors must make sure that the previous requirements are met and inform the shareholders meeting, which must be evidence in the respective minute.
IV. Establish agreement between shareholders, in accordance with article 16, section VI of this Law.
The agreements that are referred in section IV of this article and its characteristics, must be notified to the company in the following five business days after the agreement is signed so it can be revealed to the public investors through the stock exchange where the company’s shares are publicly traded, following the terms and conditions established by the stock exchange, also to include this information in the annual report that is mentioned in article 104, section III, letter a) of this Law, so it is available to the public for review in the company’s offices. Such agreements will not be opposable by the company and their not compliance will affect the validity of the vote in the shareholders meetings, but will only be enforceable between the parties once the agreement is reveal to the public investors.
The members of the board of directors, the chief executive officer and the natural person appointed by the corporation that provides external audit services, can attend the company’s shareholders meetings.
Article 50.- Shareholders with complete, limited or restricted voting rights, for every 10% ownership, individually or collectively, of the company's shareholders equity, will be entitled to the following rights:
- Assign and revoke one board member during the General Shareholder's Assembly. This designation can only be revoked by the rest of the shareholders when the appointment of all the board members is revoked as well, in which case the board members that are replaced persons cannot be nominated during the following twelve months.
- Require the Chairman of the Board or the committees in charge of corporate governance or audit practices to convene a General Shareholders Meeting without considering the percentage indicated in article 184 of the General Law of Mercantile Societies.
- Request that the voting procedure be postponed, only once and for three natural days without a new roll call, of any matter that they consider having insufficient information. In this respect, the percentage indicated in article 199 of the General Law of Mercantile Societies is not applicable.
The shareholders of the variable portion of a company's equity will not have the retirement rights referred to by article 220 of the General Law of Mercantile Societies.
Article 51.- Shareholders - including those with limited or restricted voting rights - which individually or jointly hold twenty percent or more of stockholder's equity, will be able to legally oppose the resolutions of the General Assemblies in which they have voting rights. The percentages referred in article 201 of the General Law of Mercantile Societies will not apply in these cases.
Anti Corruption Policy
The Anti Corruption Policy is integral part of GFNorte´s Internal Control System.
The Directorate General of GFNorte, is responsible to implement, to keep, to spread and provide the financial and human resources to accomplish the particular policies including in the Anti Corruption Policy.
Scope. Every person who work or provide services in any Subsidiary that are part of Banorte Group (GFNorte).
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Economic Competition Policy
At GFNorte we understand the Antitrust Policy as the right any participant has in a market to develop and grow, based on their capabilities, efforts and perseverance in reaching their goals, without preventing or trying to hinder others in fulfilling their legitimate goals.
GFNorte recognizes the Antitrust Policy value because it has been nourished by it to become a relevant participant in the Mexican Financial Sector.
GFNorte knows and wants to compete openly, has achieved to stand out in a highly competitive market and therefore promotes free competition, respects the legislation and prohibits any practice that may be considered anticompetitive.
Scope. Every person who work or provide services in any Subsidiary that are part of Banorte Group (GFNorte).
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Sole Agreement of Liabilities
Agreement suscribed in terms of the provisions of article 119 of the Law to regulate Financial Groups. ‘Ley para Regular las Agrupaciones Financieras’.
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Compensation System
The Remuneration System promotes both the management philosophy and the culture of the organization. Based on the profile of the position, our Remuneration System compensates the effort, capacity, responsibility and the management of risk taking, causing a boost in your productivity. The Compensation System, through a set of policies and procedures, administers and supervises the remuneration granted to workers.
Ordinary Remuneration
It is the fixed compensation that includes salary and guaranteed benefits, such as the Christmas bonus, savings fund and vacation bonus. This compensation is established according to the existing tabulator that is defined considering the compensation of the financial sector market.
Extraordinary Remuneration
Variable compensation schemes (not guaranteed) are a motivational tool to achieve results, allowing you to have a method that directs staff to the commitment they have with the Institution, being competitive schemes with the practice of the financial sector. Variable compensation includes deferral components and is adjusted based on the risk indicators considered for each job profile.
Qualitative and Quantitative Informaction: 2021 2020 2019
