Bank credit in Mexico continues without picking up: it falls 12.4% in May

Commercial bank credit to the private sector continued to fall last May and reached 5 trillion 197 billion pesos, which represented a drop of 12.4% in real terms compared to the same period in 2020.

According to the National Banking and Securities Commission (CNBV), consumer credit registered a balance of 945 billion pesos, observing a contraction of 10% compared to last year; while that of credit cards was 350 billion pesos, a drop of 8.7%.

In turn, payroll loans reached 254 billion pesos, reporting a drop of 5.4% compared to the previous year; while personal registered a balance of 157 billion pesos, which meant a fall of 22.4%.

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According to the CNBV, the business portfolio registered a balance of 2 trillion 495 billion pesos, with an annual decrease of 19.4% in real terms.

The agency explained that this decrease was contributed by two events that were observed the previous year, which caused portfolio balances to grow temporarily at the beginning of the confinement period related to the Covid-19 pandemic.

Since, on the one hand, there was an increase in the current portfolio balance for companies denominated in foreign currency derived from the depreciation of the peso, which went from 18.85 to 22.20 pesos from December 2019 to May 2020, in fact, 26.9% of the business portfolio was denominated in dollars as of May 2020.

In addition, this portfolio reflected an increase associated with the exercise of revolving credit lines by many companies that wanted to improve their liquidity.

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The delinquency with respect to the total credit portfolio stood at 2.52%, which implied an annual increase of 0.11 percentage points; however, the consumer segment was placed at 4.25%, a drop of 0.61 percentage points.

In credit cards, the default rate was 5.04%, down 0.73 percentage points; in personal loans it stood at 6.31% and fell 1.23 percentage points; while in payroll financing the index was 2.61% and fell 0.24 percentage points.

According to the Commission, the banks that operate in the country reported a profit of 65 billion pesos in the first 5 months of the year, which represented an increase of 26.7% compared to the same period of the previous year.

According to the institution, BBVA obtained profits of 19 thousand 258 million pesos, the equivalent of 29.84 percent of the total profits in the sector; for Santander the profits were 6 thousand 21 million, the equivalent of 9.63% and for Citibanamex the amount was 8 thousand 41 million pesos, the equivalent of 12.46%.

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While Banorte obtained profits of 10 thousand 35 million pesos, equivalent to 15.55% of the sector; HSBC reached 4 thousand 887 million pesos, representing 7.57% and in Scotiabank 3 thousand 10 million pesos, equivalent to 4.66%

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