Best bank: BBVA
The winds of change are coming to the Mexican banking system. Nubank’s arrival and its 15% interest-paying deposit account are certain to bring new competitive challenges to the established banks. As the biggest and best bank in the country, BBVA theoretically has the most to lose, but its continued excellence across banking segments means that it is the best prepared for any disruption to come.
In 2023, BBVA reached more than 30 million customers in the country and the bank is developing its partnerships to widen its retail base even further. For example, it announced a partnership in 2023 with SEV, a leading solar energy company, for the sale of electric cars. In 2022 BBVA financed 15% of all hybrid or electric cars, but the bank expects this will grow quickly though this partnership.
BBVA signed a similar partnership agreement with Chinese car maker Geely to finance up to 18,000 new car loans. Such partnerships reinforce BBVA’s market leadership – the partners are attracted to BBVA’s scale and penetration across banking segments – while in turn they provide the bank with the growth momentum to maintain that scale advantage.
This strategy feeds directly into BBVA Mexico’s financial results. In 2023 the bank grew its market share of the country’s retail portfolio by 34 basis points to 24.7%, and equal to growth of 10.6%. Asset quality also remained steady, with the bank reporting a non-performing loan ratio of 1.7% by the end of 2023. The bank also consolidated its leading position in bank deposits, with a market share of 24.1%.
Strong growth combined with effective cost control led to an 18.2% increase in net profits compared with 2022, although the tailwinds of higher interest rates also helped. The bank improved its efficiency ratio by 48bp to a very respectable 31.6%. Return on equity also improved, with BBVA achieving 27.2% in 2023 (up 146bp on 2022) and return on assets also grew, with 3.1% an impressive achievement.
The bank’s chief executive, Eduardo Osuna Osuna, says the bank’s strong level of recurring revenue enables the bank to generate capital organically and that its comfortable liquidity levels (the liquidity ratio stood at 97% at the end of 2023) will enable even stronger portfolio growth in the future.
Best investment bank: BBVA
BBVA’s dominance of Mexican retail banking is long established, the fact that the Spanish-headquartered bank also claimed the title of Mexico’s best investment bank is more noteworthy. The award is well deserved and BBVA has established undeniable strength across the full range of investment banking products. In 2023 BBVA Mexico achieved the largest market shares across the M&A, equity capital markets, corporate lending and project finance categories and was ranked second for debt capital markets.
In a relatively quiet investment banking year in Mexico, BBVA won some of the most coveted mandates. For example, in ECM BBVA was structuring agent and lead bookrunner for the IPO of Manhattan Venture Partners – an innovative deal that allowed private banking investors access to an attractive alternative investment. The transaction was a listing of a blind-pool vehicle that will invest in (mainly US) tech companies.
BBVA also led Iberdrola’s high-profile sale of 13 power generation assets, with a combined generation of 8,539 megawatts, for $6.3 billion. BBVA was financial adviser to Iberdrola on what became the largest cross-border M&A transaction in Mexico in the past 10 years. It was also the largest-ever transaction in the Mexican energy sector. BBVA was also global coordinator of the project financing of that acquisition for a consortium of companies that included the Mexican ministry of finance. BBVA was busy with project finance last year, with other large transactions for TC Energy ($2.3 billion) and Essentia Energy Systems ($1.3 billion).
BBVA’s lending and DCM franchises were also active. In 2023 BBVA executed 56 out of 129 issues in the local market, worth Ps195.2 billion ($10.7 billion) for a 20%-plus market share for the eighth consecutive year. The firm is noticeably adding volume to its success in number of deals. In 2023 it placed seven issues over Ps10 billion, with large deals for Bimbo, CFE, America Movil, Orbia, Bancomext and Fonadin – as well as one for itself.
BBVA also placed three non-Mexican issuers in the local markets, with deals for CMPC (an inaugural local issue), Bladex and BID Invest. BBVA also had some important international DCM mandates, most notably a $1 billion green hybrid offering for Cemex.
BBVA demonstrated consistent commitment to green and sustainable financing throughout its corporate lending and debt capital markets activity in 2023. It has also innovated with the creation of a sustainable supply chain financing structure for Holcim Mexico, which aims to encourage more than 2,200 of its suppliers to intensify their transition to more sustainable business models.
Best digital bank: Nubank
Brazilian neobank Nubank has carved out a significant market presence in the country. It hit major milestones over the review period in terms of user growth, capitalization and deposits, while continuing to improve its digital functionality.
The bank saw high customer growth, with nearly one million customers added in the fourth quarter of 2023, bringing its total customer base to 5.2 million. Deposits in Mexico surpassed $1 billion.
Nubank has invested more than $1.3 billion in Mexico, positioning the neobank as one of the country’s largest foreign investors. In September, it launched personal mobile loans across the country. Accessible via the bank’s app, they offer a completely digital application process that takes under five minutes. Customers receive a maximum offer and can adjust the loan amount and payment schedule to suit their preferences.
Best bank for SMEs: Banorte
Banorte has bolstered its support for small and medium-sized enterprises, growing its portfolio, enhancing loan payment predictability and driving sustainability.Top of FormBottom of Form
The SME loan portfolio grew by 24.5% to Ps50.31 billion ($2.78 billion). The bank introduced hedges that set a cap on the reference rate for floating rate loans in the event of macroeconomic fluctuations.
It also ran a combined green lending programme in a partnership with Bancomext. This initiative helps SMEs to invest in energy efficiency and eco-technologies.
Best bank for ESG: HSBC
HSBC significantly advanced its sustainability agenda in Mexico last year. It achieved full renewable energy sourcing, had a prominent role in Mexico’s environmental, social and governance (ESG) bond market and launched innovative green financial products.
The bank made tangible progress towards improving sustainability in its internal operations. It sourced all its energy from renewables through a combination of power purchasing agreements and, most recently, the purchase of international renewable energy certificates to cover 36.7 gigawatt hours, offsetting 15,524 tonnes of CO₂ equivalent. The bank also upgraded air conditioners and implemented automation panels in branches, saving 661.43 megawatt hours of energy.
The bank ranked in the top three for ESG bond issuance in Mexico in 2023. It worked on some of the largest environmentally responsible deals, including Grupo Bimbo’s $15 billion sustainability-linked bond issue, the largest in Mexico, and the Mexican government’s first bond aligned with the United Nations sustainable development goals.
The bank also launched green mortgages and electric vehicle loans aligned with the bank’s taxonomy.
Best bank for corporate responsibility: Banco Santander
Banco Santander’s financial inclusion initiative, Tuiio, made significant progress over the awards period, providing financial education to over 170,000 people and issuing microcredits to 80,000. The initiative expanded its reach to 78 branches across 17 Mexican states, adding over 10,000 accounts.
The bank also replaced all of its cards with ones made from 85% recycled PVC. It also facilitated donations through its recently launched LikeU credit cards – for every LikeU card purchase, a donation is made to a major social or environmental cause in Mexico. Ps33.3 million ($1.8 million) has been donated to a wide variety of social causes since the product’s launch.
Santander leads the market in Mexico in promoting education, entrepreneurship and employability. In 2023, the bank granted 67,568 scholarships, promoting inclusive opportunities to access education.
Best bank for diversity and inclusion: Citibanamex
Citibanamex has fostered diversity and inclusion in its Mexican operations through internal campaigns and mentoring programmes.
The bank undertook an expansive Self-ID campaign to promote its tool for identifying sexual orientation, gender identity, disability and race within the company. The initiative included five awareness and education sessions with over 6,000 participating employees from Mexico, alongside in-person activities at Santa Fe, Revolución and Metepec sites.
Employee development was another area of focus for the lender. More than 250 employees participated in its regional mentoring programmes, including most notably in its LGBTQ+ Reverse Mentoring and Generations Reverse Mentoring programmes, which supported 65 and 39 mentees respectively.
The bank also joined Citi’s global disabilities and neurodiversity mentorship programme. This programme connected employees who identify with a disability or neurodiversity with those interested in learning more about disabilities. The aim was to promote best practice for inclusivity and share insights with bank staff.
Best bank for corporates: BBVA
BBVA had a strong year in corporate banking in Mexico and has expanded its supply chain finance offering.
The bank led the corporate lending league tables in the country with a market share of 26.2%. It worked on 37 deals as bookrunner, with an aggregate deal value of $4.8 billion, 2.6 times more than its closest competitor. The bank also ranked first in project finance with a market share of 17.9%.
It played a pivotal role in some headline financings in Mexico over the awards period. These included structuring more than five large-scale facilities (totalling $14 billion) for blue-chip clients including Pemex, Cemex, FUNO, Ienova and Bimbo. It also worked on acquisition finance deals for clients including Almacenes García, Lamosa and Fultra, for a combined value of $600 million.
In supply chain finance, BBVA captured 22% of the market in Mexico, with 782 live programmes and more than 50,000 suppliers onboarded. The bank formed several partnerships with fintechs to offer additional payment financing solutions through electronic factoring to suppliers. In collaboration with Nestlé, it signed an agreement to supply financing of up to 1,500 Nestlé suppliers in the agro-industrial sector.
