I assume that there will be a benefit in the profitability of the banks due to the financial margin”.
Vicente Gómez, vice president of financial institutions at Moody’s local Mexico.
Given the global situation, where supply chain problems, high inflation, rate increases and the war between Russia and Ukraine prevail, Moody’s Local Mexico sees few direct transmission channels for the Mexican banking system .
Vicente Gómez, vice president of financial institutions at Moody’s Local Mexico, acknowledged that what can have a greater impact on the sector is how the reference rate continues to move. On the one hand, he said, the payment capacity of customers could be affected and affect delinquency levels, but at the same time it would generate greater profitability in the face of rising credit prices.
In an interview with El Economista, he highlighted that Mexican banks emerged from the pandemic quite strong, with very solid levels of capitalization and liquidity, and although during the contingency they suffered in profitability and portfolio growth, today they have already recovered.
“I think they came out of the pandemic very strong, and in general the banking system, for many years, has been a strong system in Mexico,” he stressed.
few transmission channels
In this regard, he pointed out that, given the international situation, there are few direct transmission channels for the sector.
“Obviously in banks that lend to trade and those things, there is a certain disruption, due to things that we had seen since the pandemic, the break in supply chains, in some very particular markets, the micro components of cars, all of that affects and affects to financing, to the perspective of growth”, he detailed.
The Moody’s Local analyst considered that what could have a greater impact on the Mexican banking system is how rates go up.
On the positive side, he commented that the large Mexican banks have solid funding, which is mainly made up of demand deposits, which gives great stability to their source of financing.
He added that when there are changes in interest rates, the active rates of some portfolios are adjusted, especially in loans aimed at small and medium-sized companies (SMEs), which helps outside the banks. “I assume that there will be a benefit in the profitability of the banks due to the financial margin.” On the other hand, customers’ ability to pay could be affected.