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Despite dire economic conditions in Mexico—the EIU expects the economy to contract by 7.1% this year—the country’s banks are performing commendably, although some are distinguishing themselves more than others.

Among the country’s five largest lenders, Banamex nearly doubled net profits in the first nine months of 2009. At the other end of the scale, HSBC México saw earnings fall by 60% over the same period. But even the worst-performing big banks in Mexico can take some comfort in capital cushions and loan-loss ratios that would be the envy of most lenders north of the border. And with housing shortages supporting the domestic property market—another major difference to the situation in the US—mortgage lending will provide a welcome source of growth in the years ahead.

Read more at Financial Services Briefing: “A hesitant recovery” (November 25th)

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