The top five banks in Mexico held 67 percent of assets in December 2021 (three of which were foreign-owned), and the 10 largest banks, 83.4 percent.
Thus, commercial banks continue to show a high degree of concentration.
The top five commercial banks by asset size are: BBVA Mexico (22.15 percent of total assets), Santander (14.81 percent), Banamex (12.43 percent), Banorte (11.16 percent) and HSBC (6.45 percent).
According to a report by the World Trade Organization (WTO), commercial banks continued to present an adequate delinquency rate and a good level of solvency and liquidity during the period under review, with positive profitability ratios.
Although in 2020, as a result of the contraction in economic activity, there was an increase in the NPL ratio (to 2.56 percent), it remained low and declined in 2021 to its pre-pandemic levels (2.21 percent).
The pandemic also affected profitability, especially in 2020; from 2021 onwards, an increase in profitability is evident. The coverage ratio remained high.
Banks in Mexico
The Mexican banking system is comprised of Banco de México (Banxico), multiple banking institutions, development banking institutions, and public trusts established by the federal government for economic development that carry out financial activities, as well as banking self-regulatory bodies.
Pursuant to the Law of Credit Institutions (LIC), public trusts for economic development whose main purpose is the regular and professional performance of credit operations, including the assumption of obligations on behalf of third parties, are considered to be engaged in financial activities.
Such operations must represent 50% or more of total assets.
The banking sector, which comprises multiple or commercial banking and development banking, is governed by the LIC of 1990 and its amendments of March 9, 2018, June 22, 2018, June 4, 2019, March 27, 2020, May 20, 2021 and March 11, 2022.
The secondary regulation issued by the CNBV are the Disposiciones de carácter general aplicables a las instituciones de crédito (also known as Circular Única de Bancos -CUB-).
There are no restrictions on foreign investment in commercial banks; however, in development banks there are restrictions on foreign investment (article 6 of the Foreign Investment Law and section 2.4).