Mexico Banking Outlook. February 2024

Summary

The Banking System maintains capital and liquidity levels much higher than regulatory minima. The dynamism of bank financing in 2023 was observed in all sectors (public and private), through various instruments (credit and securities) and was accompanied by higher credit provisions.

Key points

• Key points:
• All portfolios that make up bank credit to the non-financial private sector (NFPS) have managed to exhibit growth in real terms. In 2023, consumer credit showed the greatest dynamism, although business credit was the one that contributed the most to total growth.
• Business credit has registered a recovery with heterogeneity between sectors and regions. The observed pattern in the dynamics of credit flows and balances does not necessarily imply the use of financing for purposes related to nearshoring.
• The recomposition of bank deposits towards term deposits strengthened in the face of higher interest rates.
• The share of non-residents in domestic financial assets holdings fell again during 2023, while the public sector was again the main user of the economy's financial resources.

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