BANOBRAS Is Now Mexico’s Fifth Largest Financial Institution
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BANOBRAS Is Now Mexico’s Fifth Largest Financial Institution

Photo by:   Jeriden Villegas
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Fernando Mares By Fernando Mares | Journalist and Industry Analyst - Tue, 02/21/2023 - 13:37

The National Bank for Works and Public Services (BANOBRAS) is now ranked among the Top Five financial institutions in Mexico. Its growing importance is mainly driven by President López Obrador’s major infrastructure projects like the Mayan Train, the main destination of the bank’s resources. 

To celebrate the 90th anniversary of the institution, Jorge Mendoza, Director General, BANOBRAS, presented a report. He highlighted the institution has provided MX$234.6 billion (US$12.7 billion) to priority projects.

According to Mendoza, BANOBRAS reported a 26% growth in its project portfolio during López Obrador’s administration. The bank’s project portfolio accounts for MX$637.2 billion (US$34.6 billion), making it Mexico’s fifth largest financial institution. “BANOBRAS celebrates its anniversary by engaging with the social approach that brought us into being,” Mendoza added. 

As a result of BANOBRAS’ profits, the bank sent back MX$48 billion (US$2.6 billion) to the Ministry of Finance (SHCP). Mendoza stressed that those resources were used to develop infrastructure projects. 

Mendoza highlighted that BANOBRAS has been a key factor in the development of highways, ports, airports, hospitals, schools, dams and telecommunications infrastructure, as well as urban facilities. He also said that the bank participated in key infrastructure projects like the Mayan Train, the Mexico-Toluca Interurban Train and the Suburban Train’s Lecheria-AIFA expansion.

According to BANOBRAS, the energy sector represents the largest portion of its portfolio, with 36.8%, followed by highway projects with 29% and transport with 10.2%. The institution highlights that 34.4% of the projects it funds are in Mexico’s southeast, a strategic region for President López Obrador who considers the region to have been excluded from the north and center’s economic progress.

Regarding environmental efforts, BANOBRAS has allocated 12 sustainable bonds, totaling MX$34.9 billion (US$1.9 billion). Two of these focused on gender and emancipation.

Minister of Finance Rogelio Ramírez de la O stated the next steps should continue to drive a greater reach and coverage for the services offered to state and municipal governments. The government aims to ensure that a larger number of residents benefits from the financial products and services offered by development banks. These services should be supported by training, financial education, technical assistance and greater financial infrastructure, enabling them to reach the most underserved areas of the country.

On Sept. 20, 2022, MBN reported that SHCP revealed the government’s intention to lean on development banks to develop its key infrastructure projects. The ministry said that the banks that would back the projects would be Nacional Financiera (NAFIN), the National Bank of Foreign Trade (BANCOMEXT) and BANOBRAS.

According to the Mexican government, BANOBRAS plays a vital role in promoting infrastructure development and public investment in the country by collaborating with municipalities, local governments and the private sector. The bank's mandate to support strategic projects and foster economic growth has been a key part of the government's efforts to improve Mexico's competitiveness and social well-being. 

Photo by:   Jeriden Villegas

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