Banorte Selects Bloomberg to Support Regulatory Compliance for Monitoring Derivatives Hedging

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Jun 17, 2024, 10:00 ET

MEXICO CITY, June 17, 2024 /PRNewswire/ -- Bloomberg announced today that Grupo Financiero Banorte ("Banorte"), one of Mexico's leading financial companies, has adopted the MARS Hedge Accounting solution to determine the effectiveness of hedges that are recommended to clients under various market conditions.

Banorte also uses MARS Front Office and MARS Counterparty Risk solutions, and the addition of Hedge Accounting provides the firm with a comprehensive set of risk management capabilities. MARS Hedge Accounting has flexible functionality to support hedge documentation, assessment and measurement/accounting impact. It is designed to assist clients to comply with U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS).

Using MARS Hedge Accounting enables Banorte to calculate the effectiveness of their clients' derivative hedging strategies to help mitigate interest rate risk for interest-bearing assets such as mortgages, securities and loans. Banorte can check the performance of the recommended hedges using a backwards and/or forward-looking approach to test the hedging of risk exposures and investment portfolios. Additionally, MARS helps to address the growing requirements for hedge accounting and related financial instrument standards.

"Innovation and adherence to best practices is an essential part of our business in financial risk management," said Abraham Izquierdo, Banorte's Managing Director for Risk and Trading. "We are always looking for new ways to deliver value to our clients and the implementation of MARS products provides us with the latest technology for robust processes to underpin and optimize risk management, aligning risk management with the strategic vision of our institution."

Rachid Lassoued, Global Head of Financial Engineering and Risk at Bloomberg, said, "We are pleased to continue to support Banorte and deliver value through MARS Hedge Accounting to help them realize additional efficiencies in both their workflow and the workflow of their clients. The use of MARS Hedge Accounting will allow for further transparency into their hedge accounting practices and assist their clients to assess their hedging strategies reliably and regularly."

MARS Hedge Accounting is part of Bloomberg's suite of risk solutions, which are accessed on the Bloomberg Terminal and via APIs, that provides risk analytics for cash and derivatives securities. MARS enables traders, portfolio and risk managers to manage front office risk, market risk, XVA counterparty risk, credit risk, hedge accounting, as well as collateral and SIMM requirements – all by using a common pricing and data library, providing consistency from front to back.

About Grupo Financiero Banorte

Grupo Financiero Banorte is a leading financial institution in Mexico, with the greatest business diversification and that continually seeks ways to innovate in the financial sector, offering a wide variety of traditional and digital products and services, through its brokerage firm, pension and insurance companies, pensions fund manager, investment funds, leasing and factoring companies, the warehouse and recently announcing the inclusion of a digital bank.

Banorte is the second largest financial group in Mexico in credit portfolio, it is the number two provider of loans to governments, and the second most important bank in mortgage loans. Additionally, the retirement fund manager Afore XXI Banorte, of which Grupo Financiero Banorte owns 50%, is the largest in the country in managed resources.

About Bloomberg

Bloomberg is a global leader in business and financial information, delivering trusted data, news, and insights that bring transparency, efficiency, and fairness to markets. The company helps connect influential communities across the global financial ecosystem via reliable technology solutions that enable our customers to make more informed decisions and foster better collaboration. For more information, visit Bloomberg.com/company or request a demo.

SOURCE Bloomberg