Mexico City.- The bank credit to the private sector added 12 consecutive months of growth in Octoberlargely driven by consumer credit.
The credit portfolio to the private sector in Mexico is made up of loans to companies, consumption and housing, and commercial banks are the largest source of financing.
Last October, credit to the private sector accumulated a balance of 5.3 billion pesos, a nominal annual variation of 13.4 percent and a real 4.6 percent, according to data from the Association of Banks of Mexico (ABM).
Of this grand total, consumer credit contributed with a balance of 1.2 billion pesos in October, that is, an annual increase of 17.3 percent nominal and 8.2 percent real, the highest digits of growth in the portfolio components to the private sector.
On the other hand, credit to companies registered a balance of 2.9 billion pesos, a growth of 12.7 percent nominal and 3.9 percent real.
While, housing credit had a balance of 1.2 billion pesoswhich meant a nominal growth of 11.4 percent and barely 2.7 percent in real terms.
Regarding the quality of the portfolio, consumer credit registered the highest delinquency rate (Imor) compared to the rest of its components, with 3.0 percent. The Imor of financing to companies was located at 1.9 percent and housing at 2.8 percent.
The BBVA Banking and Financial System Monthly Report indicated that Incipient signs of deterioration begin to be observed in certain segments of the portfolio.
“After staying at historically low levels, the Imor of consumer credit in October reached 3.0 percent, slightly higher than the average observed in the first nine months of the year with 2.9 percent, with the most significant increase in the personal loan portfolio , whose Imor went from an average of 4.4 percent between January and September to one of 4.7 percent in October,” he said.
The Economic Studies area of BBVA Mexico warned that, as in recent months, the results observed in October suggest that the demand for credit is being skewed to finance the short-term needs of households.
Delinquency rates remain at manageable levels, but it remains essential to maintain prudent origination processes in view of a less favorable economic environment for 2023, he said.
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On the other hand, the corporate portfolio has had a slow recovery that runs the risk of being interrupted if economic activity loses momentum.
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