Overview of Mexican Bank Credit Trends
The credit portfolio of commercial banks to the private sector experienced a slowdown in August after regaining momentum in July, according to data released by the Bank of Mexico (Banxico) on Tuesday. Despite this slowdown, credit growth remains substantial, particularly in the consumer segment.
Consumer Credit Continues to Perform Well
The three main credit segments of commercial banks showed growth in August, albeit at a slower pace. The consumer credit portfolio increased annually by 9.3% in real terms, down from 9.8% in July, resulting in a balance exceeding 1.79 trillion pesos.
- Credit cards grew by 8.3% (from 8.6% in July)
- Salary-based loans increased by 4.4% (from 4.2%)
- Personal loans rose by 9.6% (from 9.9%)
The durable consumer goods credit component of the consumer portfolio also grew by 17.6% in August (down from 18.7% in July), with automotive credit being the fastest-growing segment at 18.9%. However, this growth has slowed compared to July.
Business Credit Shows Greater Desceleration
Banxico’s data indicates that housing credit grew by 2.0% in August (down from 2.2% in July), resulting in a balance of 1.46 trillion pesos. This segment has not shown contraction in recent years, even during the pandemic.
Credit to businesses and individuals with commercial activity increased to 3.68 trillion pesos in August, representing a real annual growth of 4.3% (down from 6.4% in July).
Credit to intermediaries not affiliated with banks decreased by 8.9% in August compared to the same period last year, resulting in a portfolio balance of 147.4 billion pesos.
ABM Anticipates Continued Growth
According to the Mexican Banking Association (ABM), private sector credit continues to track economic activity, albeit with some lag.
Despite the current economic environment, ABM expects credit growth to persist through 2025, benefiting businesses and households in Mexico. With an estimated GDP growth of 0.2% by the end of 2025, the banking sector forecasts a real credit growth of 4.6% and nominal growth of 8.8% for the private sector.
“We anticipate a real credit growth of 4.6% and nominal growth of approximately 8.8% by the end of 2025,” said Emilio Romano, ABM president.
Moderate Growth Expected for Credit
However, BBVA Mexico’s latest Monthly Banca Report predicts that credit growth will continue to moderate moving forward.
For consumer and housing credit, the institute cites lower wage and employment growth as reasons for slower growth. Meanwhile, the deceleration of economic activity and employment will continue to impact business income, leading to moderate growth expectations for this portfolio in the short and medium term.
Moratorium with Slight Increase
Regarding delinquency within the banking sector, it has shown a marginal increase but remains at low levels.
According to the National Banking and Securities Commission, as of July (the most recent data available), the IMOR for the sector stood at 2.13%, slightly higher than 2.01% in the same month of 2024.
