The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Mexico: Banks bouncing back on lower costs

Mexico’s banking sector reported a 20.2% increase in earnings in 2010, with an average return on equity of 13.5%. With the country being tipped as the region’s potential star performer this year, Mexican banks should continue to enjoy strong earnings as lending rates recover to pre-crisis levels.

Statistics published by Banxico, the central bank, indicate that the sector earned Ps74.7 billion ($6.2 billion), thanks largely to a 20.4% fall in financing costs and a decline in risk reserves of 30%. Interest income rose 5.9%. The sector’s combined performing credit portfolio grew by 8.8%, with mortgage lending rising 9.8%, consumer lending growing by 6.4% and lending to non-financial corporates up 7.9%. Lending to the government leapt by 16%, driven in part because government securities and loans to states and municipalities consume less regulatory capital than other asset classes.

The strong 2010 results augur well for 2011 as growth projections are being revised upwards. In January Banamex, the local arm of Citi and Mexico’s second-largest bank, increased its 2011 forecast to 4.8% from 3.9% (in 2009 Mexico’s GDP shrank by 6.1%). That should lead to growth in bank credit to corporates and individuals, which contracted in real terms in 2008/09 and has not yet recovered to pre-crisis levels.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree