–OUTSTANDING QUALITY OF BANCO AZTECA MEXICO’S LOAN PORTFOLIO, DELINQUENCY RATE DECREASES THREE PERCENTAGE POINTS TO 8.4%––

– Consolidated Gross Credit Portfolio Grows 4% to Ps.26,820 Million and Deposits Increase 6% to Ps.47,629 Million – –

–Consolidated 1Q Revenue of Grupo Elektra of Ps.10,700 Million, and EBITDA of Ps.1,405 Million –

Mexico City, April 28, 2009–Grupo Elektra, S.A. de C.V. (BMV: ELEKTRA*; Latibex: XEKT), Latin America’s leading financial services company and specialty retailer, reported today its financial results for the first quarter of 2009.

“Once again we achieved a positive consolidated quarterly revenue performance thanks to the continued dynamism of our financial business.  Deposits and loans continued with a firm growth in Mexico, Central and South America; a reflection of the trust of millions of customers in our solid deposit products, and their preference on credit options, which effectively enhance purchasing power,” said Carlos Septién, Chief Executive Officer of Grupo Elektra and Banco Azteca.

“The growth was in line with the outstanding strength of our assets, as the delinquency rate of Banco Azteca Mexico decreased three percentage points compared with the prior year, despite the adverse economic situation, due to solid risk management and thorough knowledge of our market,” added Mr. Septién.
           
Consolidated First Quarter Results

Consolidated revenue was Ps.10,700 million, 5% more than the Ps.10,185 million of the prior year.  Costs and operating expenses were Ps.9,294 million, from Ps.8,528 million in the same quarter of the prior year.

Grupo Elektra reported EBITDA of Ps.1,405 million, compared to Ps.1,656 million for 1Q08.  The EBITDA margin was 13% this period.  The company registered a net loss of Ps.2,899 million, compared to net income of Ps.111 million a year ago.

Figures in millions of pesos.
As of March 31, 2009, Elektra* outstanding shares were 243.2 million.  

Consolidated Revenue

The 5% increase in consolidated revenue resulted from a 13% rise in financial revenue and a 3% decrease in commercial revenue.

Costs and Expenses

Consolidated costs were Ps.5,740 million, compared to Ps.5,079 million reported in the same period a year ago. 

The main items within the financial cost are the creation of loan loss reserves and the interest paid to depositors on savings. The commercial cost mainly includes the cost of goods sold. 

Consolidated operating expenses were Ps.3,554 million, compared to Ps.3,449 million in the same period a year ago. The increase mainly resulted from higher operating expenses related to the expansion of Grupo Elektra and Banco Azteca in Latin America, and the selling of FAW automobiles in Mexico.

The expansion has related costs and expenses; however the outlook into future yields is very positive in the regions where we operate.

During the quarter, the company continued important steps to continue enhancing operating efficiency in response to difficult economic conditions.  

EBITDA and Net Result

Consolidated EBITDA was Ps.1,405 million, compared to Ps.1,656 million reported a year ago; the EBITDA margin for the quarter was 13%.

In relation to the fourth quarter 2008, EBITDA increased 75%.

Grupo Elektra registered a net loss of Ps.2,899 million, compared with net income of Ps.111 million for the prior year, mainly due to an increase of Ps.3,810 million in other financial expenses in this quarter.  This resulted from a 19% decrease in the market value of underlying assets in financial instruments that the company held in the period, and did not imply cash flow.

The decrease in this quarter follows an appreciation of 52% in the market price of the underlying assets in the fourth quarter 2008, as was previously detailed. 

Cash and Cash Equivalents

As of March 31, 2009, total cash and cash equivalents were Ps.50,176 million, 22% higher than the Ps.41,230 million of the prior year, mainly due to a higher investment levels of the commercial business.  At the end of the quarter, the cash and investments balance of the financial business was Ps.29,170 million, and the commercial business was Ps.21,006 million.

Consolidated Gross Loan Portfolio

As of March 31, 2009, the total consolidated gross loan portfolio for Banco Azteca Mexico, and Banco Azteca and Elektrafin Latin America grew 4% to Ps.26,820 million, compared to Ps.25,747 million a year prior.

Financial Business

Banco Azteca Mexico

During the first quarter, revenue from Banco Azteca Mexico was Ps.5,008 million, 12% higher than the Ps.4,457 million reported a year ago, as a result of a rise in the main credit lines of the bank.  The financial cost for the bank during the quarter was Ps.1,670 million, compared with Ps.1,317 million reported the previous year. 

As of , 2009, the preliminary capitalization index of Banco Azteca was 12.7%. The company considers the index to be at a level that optimizes its equity’s profitability.

The gross credit portfolio was Ps.22,790 million, compared to Ps.22,635 million  reported on March 31, 2008.

At the end of the quarter, the bank had a total of 8.3 million active accounts, from 8.1 million at the end of the same period a year ago. The average term of the credit portfolio in the principal credit lines—consumer, personal loans and Tarjeta Azteca—was 61 weeks at the end of 1Q09, unchanged from the prior year.

The company has a thorough knowledge of its customers’ payment capacity and has been proactive with measures to control credit risks to positively influence asset quality.  At the end of the quarter, Banco Azteca Mexico’s delinquency rate was 8.4%, compared to 11.2% a year ago.  Allowance for loan losses to past-due loan ratio is 1.1 times. 

Deposits of Banco Azteca Mexico were Ps.46,781 million at the end of 1Q09, 6% more than the Ps.43,968 million of the previous year. At the end of the quarter, Banco Azteca had a total of 7.2 million active savings and deposit accounts, a 14% increase from 6.3 million accounts at the end of the same period a year ago.

Seguros Azteca

In the quarter, Seguros Azteca revenue was Ps.244 million, total assets were Ps.1,367 million and stockholders’ equity was Ps.679 million, 4% higher than the Ps.650 million reported a year ago.

Afore Azteca

As of March 31, 2009, Siefore Azteca’s assets under management were Ps.10,185 million. Total assets were Ps.234 million and stockholders’ equity was Ps.204 million.

Commercial Business

Revenue from the commercial business in the quarter was Ps.4,756 million, compared to Ps.4,903 million reported a year ago. 

As of March 31, 2009, the total debt with cost of the commercial business was Ps.7,079 million, compared to Ps.5,764 million reported a year ago.  Net debt of the commercial business had a negative balance of Ps.13,927 million, compared to a negative balance of Ps.7,707 million as of March 31, 2008.

Compared to the fourth quarter 2008, net debt of the commercial business decreased 10%.

Out of the total debt of the commercial business, 91% is denominated in pesos, in line with the majority earnings of the company, with a weighted average interest rate of 10.1%.  The remaining 9% of the debt denominated in foreign currency is covered with operations on the asset side in the same currency.

Expansion
           
In line with the company’s expansion strategy—which provides a superior market position in Mexico and in Latin America—Grupo Elektra grew 6%, to 2,009 points of sale as of March 31, 2009.  The strongest growth came from Central and South America, where points of sale increased 11%, to 440 points of sale; while the number of units in Mexico grew 5%, to 1,569.