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The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

Although each passing quarter puts more space between Mexico’s banks and the severe recession of 2008-09, the country’s largest lenders remain hesitant. Even compared with last year, the toughest operating environment for banks in more than a decade, third-quarter earnings at the top five financial groups—which control about three quarters of all banking assets—were distinctly ambivalent.

While most of the banks reported year-on-year earnings growth in the third quarter, this was generally due to a decline in loan-loss provisions, as non-performing loan ratios steadily return to their historically average levels. In terms of core business, Mexico’s low interest rates continue to put pressure on net interest income nearly across the board.

But while earnings did little to impress, the third quarter nonetheless suggested a possible inflection point in credit growth.

Read more at Financial Services Briefing: “Cautiously optimistic” (November 2nd)

The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

After more than a year and a half of talks, the major securities exchanges in Chile, Colombia and Peru are ready to form themselves into a single, unified market. The new market will be the second largest equity platform in Latin America, ahead of Mexico’s Bolsa Mexicana de Valores and behind Brazil’s Bovespa.

The timing is right. As rich-country markets falter on a slower-than-expected rebound from the economic crisis, investors are looking to fast-growing emerging markets for better returns. Although this new crossborder Andean equity market still does not hold a candle to Brazil, it does give investors a larger target in the region, as well as the simultaneous opportunity to get exposure to three Latin American economies that look very strong coming out of the 2009 recession.

Read more at Financial Services Briefing: “Andean tie-up” (October 5th)

The latest data on bank loans in Mexico shows a continued improvement in credit conditions. In May, bank credit was 8% up on the year before.

Ignacio Deschamps, president of the Association of Mexican Banks, reckons that lending will grow by double-digits this year. The Economist Intelligence Unit is more cautious, forecasting that loans will rise by around 9% this year and not reach double-digit growth until 2013. Still, as loans through May are on pace for only 4% annualised growth this year, even this more modest expectation suggests a further acceleration in credit growth in the coming months.

The majority of data and analysis at Financial Services Briefing is available only to subscribers. Each week, a small share of content from the service is made available to non-subscribers.

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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