The agency Fitch do not expect the decision of the American Citigroep of leaving its consumer and corporate banking businesses in Mexico, will affect the performance of the banking system during 2022.
In this sense, he believes that the outlook for the year for banking will remain neutral.
Bertha Pérez, director of financial institutions at Fitch for Latin America, pointed out that the announcement regarding the sale of Banamex, is a relevant event for the sector as it is a systemic institution, but the impact will depend on the outcome of the transaction.
If the bank is acquired by a national player with a relevant presence, we can see a concentration in the already highly concentrated Mexican financial system. “But if it is acquired by a foreigner without a presence in the country, it will add another player to our system,” he explained in a forum organized by the rating agency.
In this sense, he stressed that it will be necessary to wait for the completion of the process, which may take time due to the necessary regulatory approvals, once the buyer is defined or known.
The 10 largest concentrate 83% of assets
In a new analysis released this Thursday, the agency states that as of November 2021, the 10 largest banks in the country have concentrated 83.2% of total assets.
It emphasizes that the sale of retail banking operations by Citigroep, could potentially reform the competitive structure of the banking system, as Citibanamex It is a systemic bank at the national level with high interconnectivity in the system.
“However, it is not expected that the parent company’s decision will affect the performance of the banking system during the current year. From November 2021 Citibanamex held the fourth and second largest shares in Mexico for customer loans and deposits with market shares of 10 and 14.3% respectively ”, the document reads.
negative comment
Fitch recall that it has recently placed Citibanamex ratings and affiliates on negative watch, due to uncertainty about the possible credit implications for these subsidiaries.
Note that the announcement of Citi follows processes similar to those announced in 2021 by other foreign financial intermediaries in Mexico, which also strategically reoriented their operations in the country, as was the case with JP Morgan in February of that year, when he announced a plan to to leave services of private banking. .
“While Fitch sees these actions as isolated events that are in line with purely individual strategic shifts, if they continue, it could add uncertainty to the appetite of foreign investors and further concentrate the financial system,” he warns.
Perspective neutral
In this framework, the perspective of Fitch for the Mexican banking sector for 2022 is neutral, as it expects credit expansion to increase modestly to 4.0% in the year, depending on macroeconomic, political and managerial stability, which, together with the rise in interest rates, will improve profitability slightly, although it will remain below pre-pandemic levels.
“It is expected that asset quality and liquidity will remain at sufficient levels,” he points out.
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Reference-www.eleconomista.com.mx