Mexico Banking Outlook. Second half 2020

Summary

Credit to the private sector slowed down due to lower demand. The business and consumer portfolios contracted, while the housing portfolio reduced its dynamism. Financing to the public sector accelerated significantly.

Key points

• Key points:
• Bank deposits already show the negative impact of the recession and low interest rates. However, demand deposits for individuals maintained a certain dynamism.
• External sources of financing for the economy were reduced again. Banking and, to a lesser extent, Siefores, partially compensate for the lower appetite of non-residents for government debt.
• NPL indicators have remained low thanks to the support programs (CCE). On the other hand, in addition to the CNBV's proposal, banks are granting restructuring options tailored to the needs of each client.
• The solvency and liquidity of the system are adequate to face the anticipated deterioration in the credit portfolio.

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