FiNETIK – Asia and Latin America – Market News Network

Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

Mexican Bank Outlook update 2009

Mexican Senate to limit Excessive Credit Card charges by foreign banks, observed by U.S. Senate – 28.03.2009 Update

Mexico: Big foreign banks highest charges, lowest services – 20.03.2009 Update

Banamex  Citibank Earnings (Excerpt from Bloomberg article  17.03.2009)

Profits at Mexico City-based Banamex doubled from 2002, the first full year it was part of the U.S. bank, through 2007, Citigroup Latin America Chief Executive Officer Manuel Medina- Mora said last year. Banamex revenue climbed 6.3 percent in 2008 to 85 billion pesos ($5.86 billion), Chief Executive Officer Enrique Zorrilla said last month. Citigroup’s 2008 sales fell 33 percent to $52.8 billion, according to Bloomberg data.

Now, after New York-based Citigroup received $45 billion in government rescue funds and its shares tumbled 73 percent this year, the outlook for Mexican banking subsidiaries also is dimming as the country heads for its first recession in eight years. The deepening slump in the U.S., the destination for 80 percent of Mexican overseas sales, is curbing export revenue and trimming remittances that help keep up local consumer demand.

Mexican banks will have a “complicated year because of pressures from defaulted loans, a byproduct of the economic backdrop,” said Juan Partida, a banking analyst with UBS AG in Mexico City. UBS estimates Mexico’s economy will contract as much as 4 percent this year.

Paulo Carreno, a spokesman for Banamex in Mexico City, didn’t return calls seeking a comment. Ovidio Cordero, a press representative for Madrid-based Santander, declined to comment. Ruth Lavelle, a press officer at London-based HSBC, didn’t reply to an e-mail request seeking a comment.

Shrinking Economy

Mexico’s economy will shrink 1.9 percent in 2009, according to the average forecast of 30 economists surveyed by the central bank and published this month. Morgan Stanley said yesterday that the economy will contract 5 percent this year. Mexico’s gross domestic product expanded 1.5 percent in 2008, central bank Governor Guillermo Ortiz said in January, after growing 3.2 percent in 2007.

Migrant worker remittances will decline this year after falling in 2008 for the first time since the central bank began tracking transfers in 1995, Mexican Deputy Finance Minister Alejandro Werner said last month. Mexico’s unemployment rate surged to 5 percent in January, the highest since the statistics agency began measuring the data in 2000.

Consumer Lending

While Shaw wrote in a report last month that bad loans will keep rising, Deutsche Bank AG recommended last week that investors take an “overweight” position in Mexican financial stocks. New York-based strategist Guilherme Paiva said Mexican banks will benefit from an increase in lending to consumers who have low debt levels relative to disposable income.

The recommendation helped send shares of billionaire Carlos Slim’s Grupo Financiero Inbursa SA to their biggest gain since 2002, and pushed up Grupo Financiero Banorte SAB, Mexico’s largest publicly-traded bank.

“Banks are going to suffer, but the year is not going to be a catastrophe,” said Angelica Bala, a banking analyst with Standard & Poor’s in Mexico City. “The capitalization of the Mexican banks is the system’s strength.”

Legislators from the nation’s three biggest political parties and bankers will get together on March 19 and 20 in Acapulco, Mexico. President Felipe Calderon, Ortiz, Finance Minister Agustin Carstens and former U.S. Federal Reserve Chairman Alan Greenspan are scheduled to speak at the conference.

Source: Bloomberg, 17.03.2009  Jose Enrique Arrioja at jarrioja@bloomberg.net; Valerie Rota vrota1@bloomberg.net.

Advertisements

Filed under: Banking, Latin America, Mexico, News, , , , , , , , , , , , , ,

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

RSS Asia and Latin America – Market News Network

  • An error has occurred; the feed is probably down. Try again later.
%d bloggers like this: