Snapshot: Mexico's banking sector in June

Mexico's commercial banking sector reported a loan book of 5.35tn pesos (US$280bn) at the end of June, an inflation-adjusted increase of 3.4% compared to 12 months before, according to financial sector regulator CNBV.

CNBV reported that commercial lending – including loans to businesses, the government and other financial entities – increased 3.0% year-on-year to 3.43tn pesos or 64.1% of the total loan book.

Loans to businesses expanded 5.7% to 2.69tn pesos, while government loans contracted 5.8% to 527bn pesos.

At 1.06tn pesos, consumer loans were up 2.3% in real terms compared to June 2018. Home loans came to 862bn pesos, a 6.7% increase.

Compared with end-May, the total loan book inched up 0.4%, with commercial lending rising 0.2%. Business lending expanded 0.4%, consumer loans 0.8% and home loans also 0.8%.

The non-performing loan ratio was 2.14% at the end of June compared to 2.15% a year before.

Banks’ net income in June rose 0.4% year-on-year in real terms to 82bn pesos, resulting in sector-wide ROA of 1.69% (up 0.03 percentage points y-o-y) and ROE of 15.8% (up 0.10pp).

A total of 51 banks now operate in Mexico, following the entry of Korea’s trade-focused Keb Hana in February. In 2018, the sector saw the addition of Banco Shinhan in June, Banco S3 in March and Bank of China in July, as well as the absorption of Banco Interacciones into Banorte, also in July.

The following table details the performance of the eight largest Mexican banks by assets, using nominal CNBV data.