Background on Banco Regional (Banregio)
Banco Regional, also known as Banregio, is a lending institution primarily focused on providing financial services to small and medium-sized enterprises (SMEs). The bank plays a crucial role in supporting the growth and development of these businesses by offering tailored financial solutions.
Q3 Financial Performance
Banregio reported its third-quarter financial results, highlighting a 7% increase in its financial margin, which reached 3,905 million pesos compared to the same quarter in 2024.
This positive outcome was driven by a 2% decrease in interest income, which amounted to 7,533 million pesos. However, this was offset by lower interest expenses, which totaled 3,628 million pesos – a 10% reduction from the same period in 2024.
Analysts’ Perspective
According to Ve Por Más (Bx+) analysts, Banregio experienced a slowdown in its indicators due to high comparison bases, falling short of consensus expectations. The bank reported a contraction in revenues and profits.
Credit Portfolio Expansion
Banregio’s credit portfolio grew by 9.8% to reach 188,100 million pesos. This growth was fueled by an increase in financial entities (29%) and corporate lending (9%), which compensated for a 30% decline in government-related lending.
- Commercial credit portfolio increased by 9%
- Residential and consumer credit grew by 8% and 11%, respectively
Profitability Concerns
Both operating and net profits decreased by 4.6% due to a high comparison base and increased administrative and promotional expenses (12.3%), along with higher taxes on profits.
Rising Non-Performing Loans
The non-performing loans (NPL) ratio for Banregio ended at 1.6% in September, marking a 38 basis points increase compared to the same period last year.
Bx+ analysts explained that Banregio’s results were in line with expectations given the current economic context.
Most major banks have been affected by lower interest rates in their results. In Q3, Grupo Financiero Inbursa and Banco del Bajío also reduced their profits. However, Banco del Bajío managed to surprise analysts positively.
