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Published on Wednesday, November 24, 2021

Mexico Banking Outlook. Second half 2021

The banking system maintains solid capital and liquidity levels that allowed it to weather the effects of the pandemic and will help sustain a more vigorous financing recovery. The nominal growth of financing to the Non-Financial Private Sector recovered 7.2 percentage points between April and September.

Key points

  • Key points:
  • Business credit shows a slow recovery, while consumer credit has begun to reactivate. The housing portfolio remains the most dynamic, although it has reduced its rate of expansion.
  • Despite the economic contraction, there was no significant deterioration in portfolio quality. The provisions generated were sufficient to maintain manageable delinquency rates.
  • Firms have changed the composition of their credit demand since the beginning of the pandemic. Working capital experienced the greatest contraction, while the payment of liabilities exhibited great dynamism.
  • The proportion of low-cost financing from banks has consolidated. However, the growth of traditional deposits has slowed down.
  • Access to domestic savings by the public sector continued to grow in an environment of less appetite for domestic assets on the part of foreign investors.

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