The balance of the IPAB of Mexico at the end of 2021
At the close of December 31, 2021, the balance of the Institute for the Protection of Bank Savings (IPAB) was 48,264 million pesos, 18.6% higher than the previous year.
The IPAB seeks to guarantee bank deposits, mainly from small and medium savers, and provide solutions to banks with solvency problems, contributing to the stability of the banking system and safeguarding the national payment system.
Likewise, the IPAB is a decentralized government agency that has the task of administering the bank savings protection system in Mexico.
The Mexican Congress allocates funds to IPAB annually to manage and service IPAB’s net liabilities. IPAB’s net liabilities are not considered public sector debt.
In emergency situations, IPAB can obtain additional financing every three years, for an amount not to exceed 6% of the total liabilities of Mexican banking institutions, without the need for authorization from Congress.
In addition to the Mexican auctions of debt securities in the domestic market, IPAB also sells, through auctions held in Mexico by the Bank of Mexico, debt securities denominated in pesos known as Savings Protection Bonds (BPA).
The IPAB also manages a deposit insurance program, which is priced per person or entity, per banking institution.
Currently, deposit insurance is limited to 400,000 Investment Units (UDI), a fund index unit that can be traded in the foreign exchange markets and whose value in pesos is indexed to daily inflation measured by the change in the INPC.
IPAB
During the last 10 years, IPAB has carried out the sale of loan portfolios, including significant sales of commercial loan assets.
The CNBV revoked the commercial banking license of the local lender Banco Ahorro Famsa (BAF) on June 30, 2020 due to inadequate risk management, granting of loans above regulatory limits, inadequate registration and recurring non-compliance with various regulatory provisions.
Savings deposits at BAF are protected by the IPAB.
The IPAB will use resources from the Bank Savings Protection Fund, which receives monthly installments from multiple banking institutions, to repay deposits.
Following this revocation, Grupo FAMSA, S.A.B. de C.V., parent of BAF, filed for bankruptcy in Mexico and Chapter 15 bankruptcy in the United States.
On November 11, 2020, IPAB was notified of the ruling to initiate the judicial liquidation of BAF.
