6 0 0 rt 2 o p e l R a u n n A A S R U B IN

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1 Annual Repor t 2006

2 M i s s i o n : A f i n a nc i a l g r oup com m it t e d to Mex ico m ade up of t he f i ne st work force and c r eat e d to b ot h ca r e for and g r ow t he p at r i mony of ou r client s and par t ner s i n t he mo st ef fe c t ive way possible. V i s i o n : To b e leader s i n Me x ico s f i nanc ial sector i n g row t h and prof it s for t he b enef it of ou r c l ient s, col lab or at or s and par t ner s. V a l u e s : Commitment to Mexico Long-term vision Integral development of personnel Integrity Austerity Innovation K e y C a p a b i l i t i e s : Operational efficiency Efficient structure with good communications and clearly defined leadership Openness with minimal bureaucracy Results-oriented Clear focus on business Precise selection of risks

3 Annual Report 2006 Grupo Financiero Inbursa Index Corporate Structure 03 Relevant Figures 04 Economic Environment 07 Audit Committee Report 08 Board of Directors 15 General Directors 15 Board Curricula 16 Banco Inbursa 18 Seguros Inbursa y Patrimonial Inbursa 22 Pensiones Inbursa 24 Operadora Inbursa de Sociedades de Inversión 26 Inversora Bursátil 28 Fianzas Guardiana Inbursa 29 Sculpture on cover: Auguste Rodin (Paris, France, 1840-Meudon, France 1917) Eternal Spring, White marble, 1884.

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5 Corporate Structure Grupo Financiero Inbursa Annual Report 3 Corporate STUCTURE Afore Inbursa 94% CC. 1,111* Sinca Inbursa 84% CC. 2,863* Inmobiliaria Inbursa 100% CC. 868* Banco Inbursa 100% CC. 24,176* Operadora Inbursa 100% CC. 564* Promotora Inbursa 100% CC. 1,009* Pensiones Inbursa 100% CC. 3,071* Fianzas Guardiana Inbursa 100% CC. 1,091* CC. 35,106* Arrendadora Inbursa 100% CC. 77* Inversora Bursátil 100% CC. 2,010* Seguros Inbursa 100% CC. 3,619* Patrimonial Inbursa 100% CC. 692* Salud Inbursa 100% CC. 118* * Amounts stated in Millions of Pesos

6 4 Relevant FIGURES Stockholders Equity 1 (National Banking and Securities Commission Financial Information Norms MM Ps) , Stockholders Equity 2 (US GAAP MM USD) , Net Income 1 (National Banking and Securities Commission NIF MM Ps) , Does not include minority interest. 2 All amounts presented as statistics and under US GAAP refer to non-audited figures. Net Income 2 (US GAAP B USD) Infrastructure Clients 6.4 MM 7.4 MM ATM s Employees 4,473 4,993 Commercial Offices Sales Force 12,035 13,638 Call Centers (Positions) Service Points 1,753 2,231 (Agreements with commercial enterprises)

7 Banco Inbursa Grupo Financiero Inbursa Annual Report 5 Under CNBV Rules Under US GAAP2 Rules % chg % chg Assets MM Ps MM Ps ( 05 vs 06) MM USD MM USD ( 05 vs 06) Group 89,501 92, % 10,970 11, % Banco Inbursa 80,664 80, % 7,145 7, % Pensiones Inbursa 16,820 17, % 1,731 1, % Seguros Inbursa 21,492 22, % 1,989 2, % Operadora Inbursa % % Inversora Bursátil 1,771 2, % % Fianzas Guardiana 1,192 1, % % % chg % chg Stockholders Equity 1 MM Ps MM Ps ( 05 vs 06) MM USD MM USD ( 05 vs 06) Group 33,441 35, % 3,236 3, % Banco Inbursa 24,879 24, % 2,063 2, % Pensiones Inbursa 2,601 3, % % Seguros Inbursa 2,869 3, % % Operadora Inbursa % % Inversora Bursátil 1,503 2, % % Fianzas Guardiana 819 1, % % % chg % chg Net Result 1 M Ps MM Ps ( 05 vs 06) MM USD MM USD ( 05 vs 06) Group 3,034 2, % % Banco Inbursa 1, N.A N.A. Pensiones Inbursa % % Seguros Inbursa % % Operadora Inbursa % % Inversora Bursátil % % Fianzas Guardiana % % INBURSA Market Average Tier Capital Ratio (Bank) 25.7% 13.9% Non-performing Loans / Total Loan Portfolio (Bank) 0.9% 1.9% Reserves / Non-performing Loans (Bank) Combined Ratio (Insurance and Patrimonial) 95.3% 98.2% Reserves / Premiums (Insurance and Pensions) Figures corresponding to Grupo Financiero and Banco Inbursa do not include minority interests. 2 Non-audited figures presented under United States of America Generally Accepted Accounting Principles (US GAAP) Million of pesos % chg Assets under Management 820,086 1,099,924 34% Assets in Custody 1,004,952 1,416,100 41%

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9 Report to Shareholders Grupo Financiero Inbursa Annual Report 7 Economic ENVIRONMENT In 2006, the GDP (Gross Domestic Product) of the Mexican economy grew by 4.8%, the highest in the past six years and 1.8 percentage points more than the growth registered in This increase occurred within a stable macroeconomic and financial environment and was primarily a consequence of a very favorable external sector. In this way, the dynamism of the North American economy, along with an elevated level of petroleum prices allowed exports to reach 250 billion dollars, 16.8% more than in Nevertheless, an increase of 15.5% in imports in 2006 resulted in a negative trade balance finishing with a trade deficit of 5,838 million dollars despite extraordinary income due to petroleum prices. A decrease in domestic interest rates and an increase of 15% in remittances from the United States to Mexico reaching a total of 23 billion dollars contributed to an increase in internal consumption and investment in Inflation at the end of the year, measured by the change in the national index of consumer prices published by INEGI, was 4.05%. This increase of 0.72 percentage points over the 2005 rate and 1.05 percentage points over the goal established by the Bank of Mexico at the beginning of year, was a consequence of a rise in agricultural product prices. An increase in the value of financial assets in the international markets sustained by the growth of the global economy led to high worldwide liquidity. Thus, the United States Federal Reserve kept the federal funds interest rate unchanged at 5.25%. Mexico s risk reached an historic low at 98 base points. The return rate on Treasury Certificates (CETES) fell 100 base points compared with the year before to 7.02% at the close of the year. This decrease contributed to a continued growth in credit to higher levels. The approval of commercial bank credit to the private and consumer sectors showed 21.7% and 38.7% increases respectively in real terms during Despite lower petroleum prices expected in 2007 as a result of less growth in the North American economy, a greater internal savings rate combined with elevated liquidity in international markets and improved participation of financial groups in different sectors of the economy should drive the development of capital including human capital and growth and increased employment in 2007.

10 8 Grupo Financiero Inbursa Since its implementation, the cross-selling strategy for our products has shown significant advances. At the end of 2006, the sales force consisted of 13,638 financial advisers, compared with the 5,285 that initiated the program at the end of It should be emphasized that 8,759 sold products from at least two Inbursa business lines representing 64%. For its part, the client portfolio consisted of more than 7.4 million at the end of 2006, which compares favorably to the 6.4 million clients at the close of 2005 representing a 15.2% increase. In June 2005 the divestment of 9,291 million pesos of GFInbursa stockholders equity was formalized along with the formation of a new financial group named Impulsora del Desarrollo y del Empleo en América Latina, S.A.B. de C.V. ( IDEAL ) focused on the development of physical and human capital in Mexico and Latin America. At the close of 2006, GFInbursa stockholders equity consisted of 35,106 million pesos representing a 5% increase over Adjusting for the payment of 924 million pesos in dividends in May, 2006, stockholders equity increased by 8%. GFInbursa registered a net income of 2,513 million pesos in 2006 compared to 3,034 million in the previous year. The decrease is explained primarily by losses in the value of long-term fixed-rate liabilities, the higher cost of acquisitions derived from an increase in the number of clients in the Afores and banking businesses, as well as a higher generation of reserves. The Banco Inbursa credit portfolio showed an increase of 12%, to 64,822 million pesos at the close of Consumer credit rose by 14.3% due to a growth in the client base from 129,256 at the close of 2005 to 332,719 in On the other hand, non-performing loans represented 0.9% of the total portfolio with a balance in preventive reserves of 8,856 million pesos. Retail accounts reached 27 billion pesos, 8.4% greater than the balance registered in the previous year. The Inbursa CT account is worth mentioning in this regard. Five years after its launch, it has consolidated itself as a one of the most successful products in the market, reach-

11 Banco Inbursa Grupo Financiero Inbursa Annual Report 9 ing a balance of more than 24 billion pesos The client base increased by 7.5% to 234,208 at the close of The assets management business showed a growth of 34% to 1,099.9 billion pesos, as well as an increase of 41% in assets in custody to a total of 1,416.1 billion pesos. Afore Inbursa grew both in the number of clients and the accumulated balance by 11.6% and 33.5% respectively. Thus, the funds for workers managed by Afore Inbursa accumulated a balance of 86,125 million pesos at the close of the year, representing 11.9% of the total market and 1.3 percentage points higher than the market share in In the insurance business, 2006 was characterized by increases in all business lines with the exception of pensions. In this regard, premiums for life, accidents, illnesses, autos and liability increased by 10.8%, 8.3%, 5.3% and 6.1%, respectively. As a result of this increase, Seguros Inbursa and Patrimonial Inbursa reported a combined income of 975 million pesos, 73% more than in Forty-one years after it was founded as a Mexican firm, GFInbursa is one of the most solid financial groups in the country. This has been the result of a suitable selection of risks, operational efficiency and client service. Nevertheless, the main challenge of GFInbursa in the coming years is to accelerate profitable growth, increase the number of clients, and above all increase the number of products purchased by each client which will allow us to continue offering both different and better products and services in the Mexican financial market. This will be achieved thanks to the talent and performance of all of those that collaborate in this institution as well as the preferences of our clients and confidence of our partners. Marco Antonio Slim Domit Presidente del Consejo de Administración

12 10 H. Board of Directors Grupo Financiero Inbursa, S.A. de C.V. In terms of section II of Article 43 of the Mexican Stock Exchange Law and to comply with the recommendations contained in the Code of Best Corporate Practices, on behalf of the Audit Committee of Grupo Financiero Inbursa, S.A.B of C.V. (the Corporation or GFInbursa ), we inform you about the activities carried out by this corporate area to fulfill its functions during the fiscal year ended on December 31, It is important to mention that one of the basic responsibilities of the Corporation s Management Corporation is the issuance of financial statements prepared according to the accounting provisions applicable to financial groups in Mexico and of the financial information standards applicable to them. These financial statements must reflect in a clear, sufficient and adequate way the operations of the Corporation and the companies controlled by the Corporation. Also, the Corporation s Management is in charge of implementing adequate internal control and audit systems in the Corporation and to disclose adequately and timely, important information to the general investors according to the applicable legal provisions. On the other hand, the Audit Committee, in its role as an auxiliary area of the Board of Directors, is in charge of the surveillance of how the businesses of the corporation and the companies it controls are processed, conducted and performed, as well as the verification of the Corporation s performance of the diverse operation and internal control procedures. For the performance of its functions, the Audit Committee has reviewed the consolidated financial statements of the Corporation as of December 31, 2006, and the opinion of the Corporation s external auditor regarding this information. Also, according to the company s main Audit Committee s duties, during the fiscal year, the following activities were performed: a. Review of the status of the internal control and audit system of the Corporation and its main subsidiaries.. The Board of Directors has been informed on a timely basis about some deficiencies or deviations found by the internal audit area or in the audits performed by the authorities in charge of the supervision and surveillance of GFInbursa and its subsidiaries such as the Mexican National Banking and Securities Commission, the National Commission of Insurance and Bonds, the National Commission of the Retirement Savings System and the Bank of Mexico, among others. For the evaluation of these concepts, the opinions, information, official notices and the report of the external auditors, the information issued by the independent experts contracted by the Corporation during the period covered by this report were taken into consideration. After reviewing the internal control and internal audit system, we concluded that no deficiencies or deviations can be reported in addition to the ones already informed to that H. Board of Directors. b. The Corporation s compliance with the Code of Ethics applicable to it and the companies controlled by it was followed up. We report that there are no deviations to report in this matter. c. The Committee took note and followed up the preventive and corrective measures adopted as a consequence of the breach of the operation and accounting recording guidelines and policies of GFInbursa and/or its subsidiary financial organizations. The Corporation s internal audit area informed to this Committee the contents of diverse documents issued by the authorities in charge of the supervision and surveillance of GFInbursa and its subsidiaries related to the Corporation s operation, adopting the preventive and corrective applicable measures to prevent recommendations on this matter.

13 Banco Inbursa Grupo Financiero Inbursa Annual Report 11 d. Several candidates were evaluated to carry out the external audit of the Corporation and its subsidiaries, and the ratification of the external auditor of the Corporation was recommended to the Board of Directors, also recommending the scope of its functions and the conditions for its contracting. It is important to mention that during the process of evaluation of the candidates to carry out the external audit of the Corporation and of its subsidiaries, the fulfillment of the independence and staff turnover requirements was taken into consideration at all times. e. The information and commentaries prepared for the audit were reviewed along with the external auditors of the Corporation, as well as the procedures performed and the scope of such, in order to assure that the audit was performed with the greater possible objectivity and that the financial information is useful, timely and reliable Also, external auditors were encouraged to express their comments in order to include them in the information to be submitted to the Corporation s Board of Directors. f. The Committee participated in the supervision of the compliance with the audit contracts, as well as in the evaluation of audit results and the performance of the auditing firm contracted, as well as of the individuals in charge of actually performing such audit. g. The Corporation s Accounting Policies Manual and the internal control and audit general guidelines for the Corporation and its subsidiaries were submitted to the Board Of Directors approval. It is important to mention that during the period covered by this report, no modifications were made to the applicable accounting policies. h. Several manuals required in Article 28 of the Stock Exchange Law for the proper operation of the Corporation were submitted to the Board of Directors approval. This corporate area recommended the approval of the Corporation s Accounting Policies Manual, the Internal Control and Internal Audit General Guidelines and the Manual to Conduct Related Operations, among others. i. Since there was no need to contract services additional or complementary to the external audit, this Committee did not express any opinions on the matter. j. This Committee did not make any recommendations to the Board of Directors, or granted any exemptions to any directors, relevant officers or managers, according to Article 28, section III, paragraph f) of the Stock Exchange Law. k. The Committee reviewed the proper preparation and submittal of the Corporation s intermediate financial information, confirming that the same had been prepared in a clear and accurate way according to the applicable provisions set forth by the Mexican National Banking and Securities Commission, and any applicable financial information rules (NIF). 1. The Committee reviewed the Corporation and its subsidiaries financial statements as of December 31, 2006, the report of the auditors, as well as the accounting policies used to prepare such financial statements. The Committee also reviewed that the necessary information according to the applicable current laws was disclosed After having listened to the external auditors comments whose responsibility it is to express their opinion regarding the reasonableness of the financial statements and their conformity with generally accepted accounting principles in Mexico, This Committee recommended their approval to the Board of Directors and their submittal to the Annual Ordinary General Shareholders Meeting.

14 12 m. The Committee followed up the resolutions taken at the Shareholders Meetings and the Board of Directors Meetings. Finally, we state that we have reviewed the consolidated financial statements of the Corporation as of December 31, 2006, together with the opinion of the external auditor of the Corporation, considering that such financial statements were prepared according to the policies, accounting procedures and practices set forth by the current laws and in accordance with the accounting criteria set forth by the Mexican National Banking and Securities Commission, and we agree with their contents as we deem that they reflect reasonably the financial standing of the Corporation as of December 31, We state the above in order to comply with our obligations set forth by the Mexican Stock Exchange Law, and any other functions entrusted to us by the Corporation s Board of Directors, emphasizing that for the preparation of the present report, the comments of the Corporation s relevant officers were taken into consideration. Atentamente, Lic. José Kuri Harfush Chairman, Audit Committee Grupo Financiero Inbursa, S.A.B. de C.V.

15 Banco Inbursa Grupo Financiero Inbursa Annual Report 13 H. Board of Directors Grupo Financiero Inbursa, S.A. de C.V. According to the provisions Article 43 (Section I) of the Mexican Stock Exchange Law and to comply with the recommendations of the Mexican Code of Best Corporate Practices, on behalf of the Committee of Association Practices of Grupo Financiero Inbursa, S.A.B. de C.V. (the Corporation or GFInbursa), we inform you about the activities performed by this corporate area to comply with its duties during the fiscal year ended on December 31, Some of the fundamental responsibilities of the Corporation Management are (i) the proper administration of GFInbursa to create value in benefit of the Corporation; (ii) the proper and timely disclosure of information relevant for the Corporation according to the applicable legal provisions; (iii) the issuance of financial statements prepared based on the legal accounting provisions applicable to financial groups in force in Mexico and any applicable financial information standards; and (iv) to put in place adequate operation, internal control and internal audit processes and procedures to achieve the optimal operation of the Corporation and the companies it controls. Within this context, the Committee of Association Practices is an auxiliary area of the Board of Directors that monitors how the businesses of the Corporation and the companies it controls are processed, conducted and performed according to the Corporation s interest and the applicable laws. Upon performing its functions, the Committee of Association Practices has met at least on a quarterly basis, requesting the Corporation, through the relevant officers, the submittal of the information that it has deemed necessary or convenient to analyze the subjects entrusted to it. Moreover, the Committee of Association Practices has studied the contents of the Corporation s consolidated financial statements as of December 31, 2006, and the opinion of the Corporation s external auditor about such information. To comply with the main functions of the Committee of Association Practices of GFInbursa, during the fiscal year that ended on December 31, 2006, the following activities were carried out: a. As to finance and evaluation, the Committee analyzed the contents of the Corporation s audited financial statements as of December 31, 2006, together with the comments of the Corporation s external auditor. From this analysis, it was found that the financial statements reflect reasonably and sufficiently the Corporation s relevant information and financial standing. b. The performance of the Corporation s relevant officers was analyzed according to the periodical reports submitted to this Committee and the results obtained by the Corporation as reflected in the Corporation s consolidated financial statements as of December 31, In this regard, it was concluded that the performance of the Corporation s relevant officers can be considered satisfactory because (i) the corporation and the companies it controls had good results that show that the Corporation s management has achieved the creation of value in benefit of the Corporation; and (ii) there have not been any relevant operation deviations that may cause damages and injuries to the corporation, the companies it controls or their respective shareholders. c. As to compensation and evaluation, the Corporation has informed periodically to this Committee about the miscellaneous personnel selection, hiring, training and salary policies, together with the respective statistical figures. This evaluation also covered the analysis of the Corporation s salary and evaluation policies regarding the growth of the operations and sales of the miscellaneous business segments of the companies controlled by the Corporation. d. The Committee has analyzed the general salary packages for the officers and employees of the Corporation and the companies it controls, reviewing that the fringe benefits are established in a general way within the various levels of the organization. e. The Committee submitted to the approval of the Corporation s Board of Directors the several manuals listed in Article 28 of the Mexican Stock Exchange Law for the Corporation to function properly. This corporate area recommended the approval of (i) the Strategies, Policies and Guidelines for Processing, Conducting and Performing the Businesses of the Corporation and its Subsidiaries; (ii) the Policies and Guidelines to Use and Enjoy the Property of the Corporation and its Subsidiaries; (iii) the Policies and Guidelines to Perform Transactions with Related Individuals and Companies; (iv) the Policies to Appoint and Compensate the

16 14 Corporation s Relevant Officers; (vi) the Manual that contains the Policies on Information and Communication with the Shareholders, the Stock Exchange, the Directors and the Relevant Officers; and (vi) the Terms and Conditions to be followed by the Director General upon Exercising his Ownership Powers. f. The Corporation and the companies it controls only carried out transactions with related individuals and companies within the ordinary field of their businesses and following the laws applicable to each one of such intermediaries. g. Together with the Committee of Audit, this Committee followed up the compliance with the Ethics Code applicable to the Corporation and the companies it controls, finding that there were no deviations to report in this area. h. No recommendations were made to the Board of Directors, no exemptions were granted to any directors, relevant officers or people in a management position, according to article 28, Section III, paragraph f) of the Mexican Stock Exchange Law. i. The Committee reviewed that the Corporation has adjusted its corporate by-laws and operations according to the new Mexican Stock Exchange Law published in the Diario Oficial de la Federación (Federation Official Gazette) on December 30, At present, the Corporation is in process of obtaining the applicable authorization from the Mexican Ministry of Treasury and Public Credit according to the provisions of Article 17 of the Mexican Law to Regulate Financial Groups. j. The Committee has kept a constant supervision of the Corporation s standing to confirm that it continues to follow the applicable laws. k. It followed the resolutions taken at the Shareholders Meetings and the Board of Directors Meetings. After performing the above activities and reviewing the Corporation s consolidated financial statements as of December 31, 2006, and the opinion of the Corporation s external auditor, and taking into consideration the information provided to this corporate area by the management of the Corporation, we consider that the Corporation s management has carried out properly the processing, conduction and performance of the Corporation s businesses during the 2006 fiscal year. We state the above in order to comply with the obligations of this corporate area set forth in the Mexican Stock Exchange Law, and any other functions that have been or will be entrusted to us by the Corporation s Board of Directors. It is important to mention that for the preparation of this report, the Committee took into consideration the opinions of the Corporation s relevant officers. Atentamente, C.P. Juan Antonio Pérez Simón Chairman of the Committee of Association Practices Grupo Financiero Inbursa, S.A.B. de C.V.

17 Board of Directors Grupo Financiero Inbursa Annual Report 15 Board OF DIRECTORS NON- INDEPENDENT STANDING DIRECTORS Carlos Slim Helú (Honorary Life Chairman) Marco Antonio Slim Domit (Chairman) Eduardo Valdés Acra (Vice-Chairman) Héctor Slim Seade Arturo Elías Ayub Javier Foncerrada Izquierdo STANDING INDEPENDENT DIRECTORS Agustín Franco Macías Claudio X. González Laporte Juan Antonio Pérez Simón David Ibarra Muñoz José Kuri Harfush Antonio Cosío Pando Ángeles Espinosa Yglesias Guillermo Gutiérrez Saldívar Fernando G. Chico Pardo Laura Diez Barroso Azcárraga STATUTORY AUDITORS* Standing Víctor Alberto Tiburcio Celorio Secretary Raúl Humberto Zepeda Ruiz Alternate Esteban Ailloud Peón del Valle Assistant Secretary José Pablo Antón Sáenz Padilla CHIEF EXECUTIVE OFFICERS Grupo Financiero Inbursa Marco Antonio Slim Domit Inversora Bursátil Eduardo Valdés Acra Joined GFI:1992 Joined GFI:1986 Afore Inbursa Sandra Sosa Nasta** Operadora Inbursa Guillermo Robles Gil Orvañanos Joined GFI:1996 Joined GFI:1992 Banco Inbursa Javier Foncerrada Izquierdo Pensiones Inbursa Heriberto Lechuga Anaya Joined GFI:1992 Joined GFI:1975 Fianzas Guardiana Inbursa Alfredo Ortega Arellano Seguros Inbursa José A. Morales Morales Joined GFI:1991 Joined GFI:1992 * The Statutory Auditor s position was eliminated as of June 2006 and was substituted with the External Auditor. ** Since January 2007, this position has been occupied by Rafael Mendoza Briones.

18 16 Listing of Directors BOARD CURRICULA Carlos Slim Helú IMPULSORA DEL DESARROLLO Y EL EMPLEO EN AMÉRICA LATINA S.A.B. DE C.V. Chairman of the Board of Directors Eduardo Valdés Acra INVERSORA BURSÁTIL, S.A DE C.V. CEO Ángeles Espinosa Yglesias MUSEO AMPARO Director Javier Foncerrada Izquierdo BANCO INBURSA, S.A CEO David Ibarra Muñoz Independent Advisor Juan Antonio Pérez Simón TELÉFONOS DE MÉXICO, S.A.B. DE C.V Vice-Chairman of the Board Arturo Elías Ayub TELÉFONOS DE MÉXICO, S.A.B. DE C.V Director of Communication, Institutional Relationships and Strategic Alliances Héctor Slim Seade TELÉFONOS DE MÉXICO, S.A.B. DE C.V CEO Marco Antonio Slim Domit GRUPO FINANCIERO INBURSA, S.A.B. DE C.V. Chairman of the Board of Directors and CEO Antonio Cosío Pando COMPAÑÍA INDUSTRIAL DE TEPEJI DEL RÍO, S.A DE C.V. CEO Fernando G. Chico Pardo PROMECAP, S.C Chairman Agustín Franco Macías GRUPO INFRA, S.A DE C.V. Chairman of the Board Claudio X. González Laporte KIMBERLY CLARK DE MÉXICO, S.A DE C.V. CEO Guillermo Gutiérrez Saldívar EQUIPOS MECÁNICOS, S.A DE C.V. CEO José Kuri Harfush JANEL, S.A DE C.V. CEO Laura Diez Barroso Azcárraga CENTRO HISTORICO DE LA CIUDAD DE MÉXICO Member of the Board of Directors

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20 18 Banco Inbursa US GAAP 1 Jan-Dec 06 Jan-Dec 05 Stockholders Equity MM USD MM USD Stockholders equity CNBV NIF Adjustment for currency position Adjustment for deferred liabilities (2.6) 39.5 Others Net Increase Net Income US GAAP In 2006, Banco Inbursa achieved a positive gain in operations. The credit portfolio increased by 12% and commission income registered a growth of 28%. Nevertheless, a decrease in interest rates in the Mexican market contributed to a lowering of interest income generating losses in values in long-term liabilities at a fixed rate. Therefore, Banco Inbursa achieved a net income of 101 million pesos. The net income under US GAAP was 79.8 million dollars as compared to million dollars in the previous year. The difference between CNBV (National Banking and Securities Commission) and US GAAP rules is explained by adjustments in currency values. At the close of December 2006, stockholder s equity totalized 2,044 million dollars under US GAAP rules, whereas, under the rules of the CNBV it totaled 2,118 million dollars. The difference is due to deductions in derivatives of 239 million dollars and an increase in deferred taxes of 180 million dollars. Banco Inbursa s credit portfolio showed an increase of 12% in 2006 reaching a total of 64,882 million pesos. Jan-Dec 06 Jan-Dec 05 Stockholders Equity MM USD MM USD Stockholders Equity CNBV NIF 2, ,246.0 Intermediation Adjustment Deferred Taxes Derivatives Others Stockholders Equity US GAAP 2, , Non-audited figures presented under United States of America Generally Accepted Accounting Principles (US GAAP).

21 Banco Inbursa Grupo Financiero Inbursa Annual Report 19 Retail Accounts 2006 Retail Accounts 2005 PRLV (Bank Promissory Note) 42.2% Immediately Demandable Deposits 52.9% PRLV (Bank Promissory Note) 45.7% Immediately Demandable Deposits 49.9% Bank Loans 4.9% Bank Loans 4.4% It should be emphasized that consumer credit registered an increase of 14.3% due to a larger client base from 129,256 clients at the close of 2005 to 332,719 clients in At the close of the year, non-performing loans totalized 598 million pesos representing a nonperforming loan index of 0.9%, against 1.9% in the market. Regarding commercial credits, the total balance of the credit is considered as non-performing from the first day of default. In 2006, preventive reserves of 1,520 million pesos were created, which allowed an accumulation of 8,856 million pesos, 14.1% more than the previous year. Regarding retail accounts, immediately demandable deposits registered a growth of 8.4% during the year, representing 53% of the total retail accounts. This result is explained by an increase in the Inbursa CT account for individuals which represented 88% of the total of these deposits. Banco Inbursa is one of the best capitalized banks in Mexico with a 25.7% Tier Capital Ratio which compares favorably with the market average which was 13.9%. This indicator shows, in addition to soundness, Banco Inbursa s capacity to participate in the growth of credit in the Mexican market, mainly in infrastructure, commercial portfolio and consumer credit. Coverage Retail Accounts Inbursa ,259 Retail Accounts ,140 Lateness of payments index Consumer s credit clients Inbursa 0.9 % ,719 Market Average 1.9 % ,256

22 20 Afore Inbursa Afore Inbursa achieved commission income of million pesos in 2006, 45.2% higher than the same period in the previous. This result is principally explained by a 33.5% increase in assets under management and an increase of 11.6% in the beneficiaries base. The assets under management grew from 65,522 million pesos in 2005 to 85,125 million pesos in It should be mentioned that Afore Inbursa is ranked third in the assets management system. Market share increased from 10.6% to 11.9% in 2006, ending the year with 377,949 more beneficiaries then in 2005, totaling 3,630,280 beneficiaries. Beneficiaries ,630, ,252, ,510,861 Assets under management The active-workers base increased by 16.9%, resulting in 37.4% on the index of active affiliated workers as compared to 35.7% in the same period the previous year , , ,139 In 2006, Afore Inbursa net income rose to million pesos, compared with 26.5 million pesos at the close of This result is explained by higher commission income from an increase in the beneficiaries base and greater acquisition costs. Average minimum wage per beneficiary Active workers Equivalent Commissions Afore % Inbursa 1.53% Market Average 2.43% % % %

23 Afore Inbursa / Sinca Inbursa Grupo Financiero Inbursa Annual Report 21 Sinca Inbursa At the close of 2006, SINCA Inbursa had not performed any divestment operations. As a result, net income was sustained primarily by participation in the results of the firms promoted, producing an outcome of million pesos. The stockholders equity grew from 2,560 million pesos at the close of 2005 to 2,802 million pesos at the close of During the 2006 fiscal year, two significant investment operations were performed, namely the acquisition of 9.45% of the petrochemical firm IDESA and 49% of Laboratorio Médico Polanco, a firm dedicated to laboratory testing services and which has shown significant growth in recent years. In March 2006, the firm Concesionaria Vuela Compañía de Aviación S.A. de C.V. began operations at which time a 25% share was held. The firm operates under the brand name Volaris, and Sinca Inbursa is accompanied in this investment by Grupo Televisa, Grupo Taca and the investment fund Discovery Américas. The total investment portfolio of Sinca Inbursa totalized 3,090 million pesos at the close of 2006 with liquid assets of 930 million pesos. It maintains its leadership in the market and its commitment to the talent of Mexican businessmen in the continuous search for opportunities that allow them to participate in the country s growth and development, support projects of high yield, and as a result encourage growth opportunities for companies. The support for activities related to business initiatives and creation of synergy with the promoted companies continues. Sinca Inbursa is identified with companies that count on distinguished operators that participate in markets where it is possible to contribute to accelerated development and perform in sectors of high potential such as health, education, entertainment, transportation and technology. Investments by Sinca Inbursa are registered according to the cost of acquisition and contribution to income is figured according to method of participation, consideration of goodwill amortization and, if applicable, commercial credit. Acquisition Investment Company Description Shareholder % Date & Cost % ITM Transportation 8.25% Nov-05 1,075, % CONTROLADORA VUELA Airline 25.00% Oct , % GRUPO ACIR Communications 20.00% Aug-96 93, % GRUPO IDESA Petrochemical 9.45% Aug-06 93, % OTHERS 72, % LABORATORIO MEDICO POLANCO Health 49.00% Aug-06 47, % PURE LEASING Leasing 35.00% Jan-06 43, % TOTAL 1,763, %

24 22 Seguros y Patrimonial Inbursa US GAAP 1 Jan-Dec 06 Jan-Dec 05 MM USD MM USD Net Income CNSF GAAP Adjustment on reserves Adjustment on investments 0.5 (48.5) Deferred Taxes 5.3 (5.1) Deferred cost of acquisition 0.0 (17.1) Adjustment on currency position (46.3) (36.0) Others Net Increase Net Income US GAAP The combined total premiums of Seguros Inbursa and Patrimonial Inbursa rose to 10,367 million pesos in 2006, which meant an increase of 8.8% compared with the previous year. In this regard, the life, accidents and illness, autos and liability registered premium increases of 10.8%, 8.3%, 5.3% y 6.1% respectively with a larger client base of 4,812,151 clients in 2005 compared to 5,431,510 clients in Jan-Dec 06 Jan-Dec 05 MM USD MM USD Stockholders Equity CNSF NIF* Adjustment on assets Deferred cost of acquisition Fixed Asset (54.1) (41.1) Others Adjustment on reserves Deferred taxes (301.0) (236.8) Others (8.2) 27.6 Net Increase Stockholder s Equity US GAAP CNon-audited figures presented under United States of America Generally Accepted Accounting Principles (US GAAP). * CNSF (National Commission of Insurances and Guarantees) NIF (Financial Information Norms)

25 Seguros y Patrimonial Inbursa Grupo Financiero Inbursa Annual Report 23 As a result of the previous, Seguros Inbursa and Patrimonial Inbursa reported combined incomes of 975 million pesos, 73% more than in Under US GAAP rules, the combined net income was 97.2 million dollars, 15 million more than was obtained during the same period last year and 7 million dollars more than what was registered under the accounting rules of the CNSF (National Commission of Insurances and Guarantees). The difference between the results of the US GAAP and the CNSF rules in 2006 are explained mainly because of the reversion on investments, deferred taxes and other adjustments for 53.3 million dollars as well as a currency position deduction of 46.3 million dollars. Business Line Investments / Assets* Market Average 2006 * Pensions Included Accidents and Health 12.7% Property and Casualty 28.6% Automobile 24.0% Life 34.7% 89.5 % 86.2 % 79.7 % The Seguros Inbursa and Patrimonial Inbursa combined stockholders equity, under US GAAP rules, was million dollars compared with the million dollars obtained under the CNSF accounting rules. The difference is explained mainly by positive adjustments of million dollars in adjustments to assets and reserves compensated for by a deduction of 309 million dollars as a result of adjustments due to deferred taxes and other adjustments. The combined ratio of both insurance businesses, that is to say the costs of operations, acquisitions and casualty rates in connection with withheld premiums was 95.3%. Reserves / Premiums* Market Average 2006 * Pensions Included Combined Ratio Market Average % 3.16 % 1.72 % 95.3 % 93.7 % 98.2 % Jan-Dec Jan-Dec Total Premiums 10,367 9,528

26 24 Pensiones Inbursa US GAAP 1 Jan-Dec 06 Jan-Dec 05 MM USD MM USD Net Income CNSF GAAP Adjustment on reserves (0.9) 6.2 Reserve adjustments (45.6) 9.6 Deferred Taxes 0.4 (18.2) Deferred cost of acquisition Adjustment on currency position Others (13.4) (32.8) Net Increase (1.0) 10.2 Net Income US GAAP Jan-Dec 06 Jan-Dec 05 MM USD MM USD Stockholders Equity CNSF NIF Reserve adjustments (71.1) Adjustment on reserves Deferred taxes (75.2) (94.2) Others 77.0 (101.1) Net Increase Stockholder s Equity US GAAP At the close of 2006, Pensiones Inbursa reported an income of million pesos compared with million pesos the previous year. accounting rules of the National Commission of Insurances and Guarantees (CNSF). This difference is explained due to positive effects in adjustments to reserves and some others by an amount of On the other hand, premiums fell from million pesos in 2005 to million pesos in 2006, derived from a decrease in real rates in Mexico million dollars compensated by equivalent deductions of million dollars from adjustments in deferred taxes and investments. which reduced business financial margins substantially. Pensiones Inbursa stockholders equity rose to 3,070 million pesos under the CNSF accounting rules, 18% Stockholders equity was 391 million dollars under more compared to the close of the accounting rules of the US GAAP compared with the 284 million dollars obtained under the 1 Non-audited figures presented under United States of America Generally Accepted Accounting Principles (US GAAP)

27 Banco Inbursa Grupo Financiero Inbursa Annual Report 25 MM Ps Total Premium Reserves (95.6) Cost of Acquisition (9.5) (51.5) Technical Income (529.7) (478.9) Investments Results 1, ,061.6 Repomo (Result on Currency Position) (631.8) (501.6) Subsidiaries Share Net Income Assets 17, ,819.7 Investments 16, ,694.1 Reserves 13, ,047.6 Stockholder s Equity 3, ,601.2

28 26 Operadora Inbursa Funds managed by Operadora Inbursa totaled 37,773 million pesos at the close of 2006, representing an increase of 22.7%. The debt instruments investment fund INBUREX rose to 9,318.3 million pesos, with annual yields of 7.04%, 89 basis points higher than the market average. DINBUR managed funds reached 4,715.4 million pesos, 152 basis points above the competition. On the other hand, the IGLOBAL variable income fund with a portfolio equivalent to 5,866.1 million pesos presented an annual yield of 36.9%, a difference of 834 basis points against the market average. January - December 2006 Annual Yield Fund Inbursa Market Average DINBUR 6.16% 4.64% INBUREX 7.04% 6.15% INBURSA 26.81% 28.52% FONIBUR 26.82% 28.52% IGLOBAL 36.86% 28.52% Annual average yield in dollars* Inbursa 21.9% IP y C C (Price and Quotation Index) 15.9% Dow Jones 10.3% Cetes 8.4% Inflation 2.8% Since Jan. 1, 2006, Operadora has generated a commission payment per service benefit to Inversora Bursátil S.A. of C.V and Banco Inbursa, S.A. equivalent to 45% of the commission income that Inbursa Operator obtains from the administration of the funds. The amount paid in 2006 rose to 116 million pesos of which 93% was granted to Inversora Bursátil and the 7% remainder to Banco Inbursa. * From March 31st, 1981 to December 31st, 2006.

29 Banco Inbursa Grupo Financiero Inbursa Annual Report 27 Managed funds FONIBUR 10,715.8 Variable Income 72% Fixed Income 28% INBURSA 6,819.7 DINBUR 4,715.4 Variable Income 68% Variable Income 0% Fixed Income 32% Fixed Income 100% INBUREX 9,318.3 IGLOBAL 5,866.1 Variable Income 0% Variable Income 56% Fixed Income 100% Fixed Income 44%

30 28 Inversora Bursátil MM Ps Operation Outcome Income from Interest 3,284 4,488 Net Income Total Assets 2, Investments Portfolio 1,921 1,477 Stockholders Equity 2,010 1,503 Assets under management 1,417,015 1,004,925 Inversora Bursátil income rose to million pesos in 2006, 55.6% higher than the million pesos in The result is explained mainly by the greater volume of operations on the Mexican stock market and by income on services to Operadora Inbursa, totaling million pesos. Assets under management registered an increase equivalent to 41% rising to 1,417 billion pesos. Inversora Bursátil stockholders equity showed an increase of 33.7% at the close of the year, from 1,503 million pesos in 2005 to 2,010 million pesos in 2006.

31 Banco Inbursa Grupo Financiero Inbursa Annual Report 29 Fianzas Guardiana Inbursa MM Ps Premiums Technical Income Investments Results REPOMO (Result on Currency Position) (40.5) (27.3) Net Income Total Assets 1, ,192.4 Investments 1, Reserves Stockholders Equity 1, In 2006, Fianzas Guardiana Inbursa reported premiums of million pesos, 86.9 million pesos more than 2005, totaling million pesos. Fianzas Guardiana Inbursa reported 2006 earnings of million pesos compared with million pesos obtained in the previous year.

32

33 Grupo Financiero Inbursa ESTADOS FINANCIEROS Al 31 de diciembre de 2006 y 2005 Dictamen de los auditores independientes 33 Estados Financieros Auditados GRUPO FINANCIERO INBURSA, S.A.B. DE C.V. Y SUBSIDIARIAS Balances generales consolidados 34 Estados consolidados de resultados 37 Estados consolidados de variaciones en el capital contable 38 Estados consolidados de cambios en la situación financiera 40 NOTAS A LOS ESTADOS FINANCIEROS CONSOLIDADOS 41 BANCO INBURSA, S.A. INSTITUCIÓN DE BANCA MÚLTIPLE Balances generales consolidados 82 Estados consolidados de resultados 85 Estados consolidados de variaciones en el capital contable 86 Estados consolidados de cambios en la situación financiera 88 SEGUROS INBURSA, S.A., Balances generales 89 Estados de resultados 92 PENSIONES INBURSA, S.A. Balances generales 93 Estados de resultados 95 OPERADORA INBURSA DE SOCIEDADES DE INVERSIÓN, S.A. DE C.V. Balances generales 96 Estados de resultados 97 INVERSORA BURSÁTIL, S.A. DE C.V., CASA DE BOLSA Balances generales 98 Estados de resultados 100 Estados de cambios en la situación financiera 101 FIANZAS GUARDIANA INBURSA, S.A. Balances generales 102 Estados de resultados 104

34 32 Grupo Financiero Inbursa Financial Statements

35 33 REPORT OF INDEPENDENT AUDITORS To the Stockholders of Grupo Financiero Inbursa, S.A.B. de C.V. and subsidiaries We have audited the accompanying consolidated balance sheets of Grupo Financiero Inbursa, S.A.B. de C.V. and subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of income, changes in stockholders equity and changes in financial position for the years then ended. These financial statements are the responsibility of the Group s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in Mexico. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and are prepared in conformity with the accounting criteria established by the Mexican National Banking and Securities Commission for controlling entities of financial groups. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting criteria used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As mentioned in Note 2, the Group is required to prepare and present its consolidated financial statements on the basis of the accounting criteria established by the Mexican National Banking and Securities Commission for controlling entities of financial groups. In the instances mentioned in the aforesaid note, such criteria are at variance with Mexican Financial Reporting Standards. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Grupo Financiero Inbursa, S.A.B. de C.V. and subsidiaries at December 31, 2006 and 2005, and the consolidated results of their operations, changes in their stockholders equity and changes in their financial position for the years then ended, in conformity with the accounting criteria for controlling entities of financial groups established by the Mexican National Banking and Securities Commission. Mancera, S.C. A Member Practice of Ernst & Young Global José Luis García Ramírez Mexico City February 28, 2007

36 34 Grupo Financiero Inbursa Financial Statements GRUPO FINANCIERO INBURSA, S.A.B. DE C.V. AND SUBSIDIARIES Consolidated Balance Sheets (In millions of Mexican pesos with purchasing power at December 31, 2006) (Notes 1 and 2) December Assets Cash and cash equivalents (Note 6) Ps. 9,325 Ps. 13,383 Investments in securities (Note 7) Instruments for trading 8,422 5,490 Available-for-sale - - Held-to-maturity 1,599 3,371 10,021 8,861 Securities and derivatives Debit balances under repurchase agreements (Note 8) Derivatives (Note 9) 2,939 4,025 3,044 4,097 Performing loan portfolio (Note 10) Commercial loans 52,659 51,565 Loans to financial entities 5,682 1,130 Consumer loans 4,008 3,572 Home mortgage loans Loans to government entities Total performing loan portfolio 64,035 57,161 Past-due loan portfolio (Note 10) Commercial loans Loans to financial entities - - Consumer loans Home mortgage loans Total past-due loan portfolio Total loan portfolio 64,633 57,615 Preventive provision for credit risks (Note 11) (8,856) (7,760) Loan portfolio (Net) 55,777 49,855 Other accounts receivable (Net) (Note 12) 822 1,790 Foreclosed and repossessed property Buildings, furniture and equipment (Net) (Note 13) Long-term equity investments (Notes 3 and 14) 11,702 9,977 Deferred taxes (Note 20) 4 - Other assets, deferred charges and intangibles (Net) (Note 15) Total assets Ps. 92,302 Ps. 89,501