Mexico’s banking sector assets increase

At the end of September 2022, the total assets of Mexico‘s banking sector were 12 trillion 513.2 billion pesos, which represented a real annual increase of 3.8% with respect to the end of September 2021.

Also at the end of September 2022, the outstanding loan portfolio of the Mexican banking sector had a balance of 6 trillion 019.9 billion pesos, a real annual increase of 2.9% with respect to September 30, 2021.

The net result of the banking sector was 175.2 billion pesos at the close of September 2022, this is 27.7% higher in real terms than at the close of September 2021.

Since 2017, the Mexican financial system has continued to present a dynamic performance.

As of March 30, 2022, the financial system in Mexico was comprised of 4,973 entities.

Banking sector

The main intermediary of the financial system is the multiple or commercial banks, whose assets represent 42.3% of the Gross Domestic Product (GDP).

Non-bank financial intermediaries hold 34% of assets.

With the prior favorable opinion of the Bank of Mexico (Banxico), the commercial presence of foreign banks is authorized through the incorporation of subsidiaries, under reciprocity conditions, in accordance with the provisions of the free trade agreements signed by Mexico and other agreements.

No restrictions are imposed on the operations of a subsidiary, which may offer the same services and products as a domestic multiple bank. The establishment of representative offices of foreign banks is also permitted.

Foreign Companies

The multiple banking sector continues to show a high degree of concentration. The five largest banks held 67% of the assets in December 2021 (three of them were foreign-owned).

As for multiple banking, Mexico authorizes the commercial presence of foreign insurance companies through subsidiaries and representative offices.

In July 2018, a second stock exchange began operating in Mexico, Bolsa Institucional de Valores, S.A. de C.V. (BIVA).

Companies have the option to list their debt or equity securities on one of the two exchanges and their securities are listed on both.

In 2019 Mexico restructured development banking with the aim of improving coverage and focusing on the rural population and thus increasing financial inclusion.

To this end, the New Comprehensive Rural Financing System was created, consisting of Financiera Nacional de Desarrollo, Fideicomiso de Riesgo Compartido, Fondo de Capitalización e Inversión del Sector Rural and AGROSEMEX, and a one-stop shop was created for the rural population to have access to the various financial programs and services, and to request advice and training.