Mexican banks anticipate new regulation
Recent growth puts Banorte ahead of its 2020 targets; strong cash generation expected to lead to greater 2019 dividends.
Mexican banks expect the new government to introduce new regulation that target the financial industry, according to Banorte’s head of investor relations Ursula Wilhelm.
“We will probably see some changes – some new focus with regards to the banking industry,” she says. “Nothing has really been talked about from people in the new government, but we do expect that to come.”
The market is mainly speculating about potentially restrictive regulation – such as the introduction of interest-rate limits for lending, floors for deposits or mandated lending to certain segments.
However, Wilhelm believes the industry could be pleasantly surprised.
“We are hoping for new rules that really help to improve the level of credit penetration and increase formality, which would be very helpful with respect to the banking system.”
Banorte’s recent strategy – aggressive organic growth coupled with the acquisition of Interacciones – means that the largest domestic bank will be bigger and stronger when any new regulations come into force.
The bank introduced a 2020 strategy in 2015 to improve return on equity (ROE) to 20% – among a range of targets – from 13%.