J.P. Morgan Leaves MexicoBy María Fernanda Barría | Mon, 03/01/2021 - 15:42
J.P. Morgan, one of the world's largest investment banks, is closing its private banking business in Mexico, according to Bloomberg. The bank is recommending its clients to move their operations to BBVA. J.P. Morgan's move comes after it made a similar decision in Brazil just a few months ago. “I was surprised. Yes, there is anger at what the government is doing but you have to understand that we are in a strange situation now because of the pandemic. The profitability conditions in the world are going to change,” Noemí Levy, an academic specializing in international banking at UNAM, told El País.
According to Bloomberg, J.P. Morgan has not yet made an official announcement about its exit from the country, so the specific reasons that led the bank to make this decision are not yet known. For the time being, J.P. Morgan will continue to serve its clients in Mexico from offices located outside the country.
The firm has not been the only one to leave the country. In December 2020, the Ministry of Finance and Public Credit announced the closure of the representative offices of the Bank of Montreal and the Israeli Mizrahi Tefahot Bank, as reported by MBN.
Since the arrival of López Obrador to the Mexican presidency, policies have been approved that in some cases have limited the participation of foreign direct investment. Bloomberg points to this as one of the reasons for JP Morgan's exit from Mexico. According to the Ministry of Economy, the drop in foreign direct investment was 12 percent in 2020, from US$39.2 billion to US$29 billion. The foreign direct investment comes mainly from the US and Canada, which account for 56.3 percent of the total, followed by Spain (13.7 percent), Japan (4.2 percent) and Germany (3.5 percent).