Mexico City, April 8th, 2020.

On March 31st, 2020, Mr. Juan Pablo Graf Noriega, President of the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) (“CNBV“) issued a statement addressed to the banking institutions, in which he mentioned the necessary recommendations regarding the payment of dividends, repurchase of shares and other benefits to the shareholders of the banking institutions, by virtue of the economic uncertainty and volatility generated by the health contingency caused by the COVID-19 pandemic, having the effect that the liquidity of some of the banking assets is affected.

The CNBV issues this statement in order to channel those resources to strengthen banking institutions, so that they are in a better position to absorb the possible losses derived from the COVID-19 pandemic and, in turn, have more resources to support the economy. Likewise, the financial authorities have implemented various administrative facilities with the aim of providing banking institutions with greater resources to support the economy in the face of this crisis.

Therefore, the CNBV issued the following recommendations:

I.That in view of the situation in which we currently find ourselves, as a consequence of the COVID-19 pandemic, and in order for banking institutions to continue to support the economy, conserve their capital and absorb the losses generated and/or that may be generated by it, it is recommended that banking institutions refrain from:

a)Agree on the dividend payment to shareholders derived from the multiple banking institution, as well as any mechanism or act involving a transfer of capital gains to the shareholders or an irrevocable commitment to pay them, with regards to fiscal years 2019 and 2020, including the distribution of reserves. Whenever the multiple banking institution in question is part of a financial group, the measure will include the holding company of the group to which it belongs, as well as the financial entities or companies that are part of that group.

b)Carry out share repurchases, or any other mechanism aimed at remunerating shareholders.

II.Any banking institution or financial group that refuses to follow these recommendations will have to give written notice to the CNBV, within the next 7 (seven) business days, signed by its CEO, explaining the reasons why it determined not to comply with said recommendations. In this sense, the reasons and/or grounds established will be made public.

Lawyers of the banking and financial practice and tax law practice of our Firm will be delighted to provide you with further information regarding the content of this informative note.


Miguel Angel Peralta

Pedro Said

Patrick Stockdale