High Rates and Credit Activity Boost Mexican Bank Profits in 2023

In 2023, the Mexican banking sector achieved record profits, surpassing MX$273 billion, driven by heightened credit activity and a high-interest rate environment. However, the first quarter of 2024 saw a slight decline in earnings, with banks operating in Mexico reporting profits of MX$69.3 billion, compared to MX$69.9 billion in the same period in 2023.

According to the National Banking and Securities Commission (CNBV), the results were influenced by higher interest income, which was offset by lower intermediation results and increased provisions for credit risks. Industry experts anticipate continued credit growth in 2024, albeit at a slower pace. Despite Mexico’s Central Bank (Banxico) beginning a cycle of reference rate cuts in March, currently at 11%, further reductions are expected throughout the year.

BBVA Mexico retained its position as the most profitable bank, posting MX$22.6 billion in the first quarter of the year, slightly down from MX$22.9 billion at the end of March 2023. Following BBVA were Banorte with MX$10.5 billion, Santander with MX$6.9 billion, and Citibanamex with MX$6.2 billion.

Other notable performers included Inbursa with MX$4.6 billion, Banco del Bajío with MX$2.8 billion, Scotiabank with MX$2.6 billion, and HSBC with MX$1.7 billion. These eight banks accounted for 83% of the sector's profits at the end of the first quarter.