Banking will emerge from the crisis with adequate levels of portfolio quality: BBVA

Despite the effects of the crisis derived from the Covid-19 pandemic, since at some point the delinquency registered a slight increase, the bank will leave with very adequate levels in the quality of the portfolio, he assured BBVA Mexico.

“The quality of the purse it did not show significant deterioration despite the great economic contraction. The provisions generated by the banks were sufficient to maintain the levels of delinquency manageable, “said Carlos Serrano, chief economist of BBVA Mexico.

It should be remembered that since the beginning of the pandemic, banks ─in conjunction with financial authorities─ launched some support programs for clients who had problems, such as deferrals of payment of credits and subsequent restructuring. In addition to this, they made additional provisions to face possible defaults.

During the presentation of the report Banking situation, the economist stressed that in terms of the portfolio quality, the sector weathered very well the effects associated with the pandemic, “And we can say, in terms of the contraction, that the worst has already happened and at no time was the stability of the system in question; on the contrary, throughout the crisis period, adequate portfolio quality indicators were shown, ”he said.

He stressed that the Bank made important preventive estimates, which affected the sector’s profits, “but fortunately, since these reserves have been established and it was clear that they were more than enough to face the deterioration of the portfolio, this has been reversed.”

According to the bank’s own figures, the Delinquency Index (IMOR) for banking in general it was 2.7% in September; and in the interior, consumption was 3.4% the same as in housing; while in companies of 2.0%.

Provisions allowed to carry out takedowns and punishments

Mariana Torán, Principal Economist of BBVA Mexico, stressed that, given the actions taken, the bank delinquency remains at manageable levels, and noted that portfolio balances past due have been reduced, although in the case of companies and housing they are still above pre-pandemic levels, but they are manageable.

He highlighted that the provisions generated allowed the Bank carry out removals and punishments in the different credit portfolios, mainly in the one of consumption.

The specialist explained that from March 2020 to September 2021, provisions were made for 251,818 million pesos, and of those 247,551 million went to write-offs and penalties, being 66% of the total for the consumer portfolio.

“The sanitation of purse have already consumed most of the reserves generated, and the important thing here is that the generation of provisions has already accelerated and the Past due portfolio it is down and at stable levels ”, he stated.

He added that today, there is already a mattress of provisions similar to the one you had before pandemic, to face a possible further deterioration.

“It has been an adequate risk management, which is linked to the particular risks of each one of the segments,” he emphasized.

He added that even considering the cost of said sanitation, the Adjusted NPL ratio (IMORA) it has remained below the maximums observed in other crises such as 2009, when it was 9.5% in general.


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