In AMLO's Mexico, Banking Group Brims With Confidence
(Bloomberg) -- As Mexico’s new populist president settles into office and a dispute mounts over banking fees, the country’s industry association doesn’t see a cloud on the horizon.
The outgoing head of the Mexican banking association and current chairman of Santander Mexico, Marcos Martinez, doesn’t see any risks in the industry, saying only that slower-than-expected economic growth would limit bank lending this year.
"I don’t see any risk for banks at the moment, not a single one," Martinez said in an interview at his office in Mexico City. "The quality of the portfolio is stupendous. The growth rate is good and it’s well diversified. I don’t see any threat to the Mexican banking system."
Martinez’s bullish outlook contrasts with investor concern over the policies of President Andres Manuel Lopez Obrador. At the start of the month, S&P Global Ratings said the country’s credit rating faces a one-in-three chance of being downgraded on spillover risks from the embattled state oil company Pemex. Despite political uncertainty and the risks to the larger economy, Martinez says the banking system is rock solid.
He welcomed the deal on banking commissions announced by the government earlier this month, saying it will result in less charges, benefiting clients. While he denied that commissions were a problem, he said that the Mexican banking association would not oppose the changes.
For more on Martinez’s comments, click here
International banks in Mexico typically earn about a third of their Mexican revenue from commissions, including much-criticized charges on ATM withdrawals and balance consultation fees. Those same banks earn about a fifth of their revenue from commissions in their home markets, according to financial consumer-protection agency Condusef.
"On commissions, we got off to a bad start," said Martinez. "But the reality is much different."
©2019 Bloomberg L.P.