Number of Mexican Banks Grows, But Quality of Services Remain the Same Yasmin Zarazoga Moreno - The News
go to original February 24, 2017

The dollar and peso compared outside of a city bank (Cuartoscuro/Diego Simón Sánchez)

Despite the fact that in recent years the number of institutions in the Mexican Banking System has grown by 20 percent, there has not been changes in competitiveness nor in the availability of cheaper loans. This is due to an oligopoly headed by BBVA Bancomer and CitiBanamex. These two banks alone represent more capital than the other 25 banks in Mexico.

In an interview with CapitalMedia, International Advisory and Finance Institute (IAFI) president, and author of the book “Sistema Financiero Mexicano” (Trillas), Manuel Díaz Mondragón pointed out that a greater number of banks did not mean result in competition, because “although these banks have more clients, services and branches, they offer the worst credit conditions, with higher costs for users. ”

According to the National Banking and Securities Commission (CNBV) in the country there are 47 financial institutions, which at the end of December 2016 together held assets which amounted to 8 trillion 592 billion pesos ($29.7 billion), that is 11.6 percent more than the same time the previous year.

Manuel Díaz explains that the research he carried out in collaboration with Nitzia Vázquez Carrillo shows that assets are overly concentrated in specific banks. The five banks with the largest amount of assets -BBVA Bancomer, Citi Banamex, Santander, Banorte Ixe and HSBC – dominate the Mexican market.

Manuel Díaz explained that the new banks in Mexico are mostly niche or specialized, and even when they offer few services, their loans and financial benefits are often better than those of the larger banks. However, they have been unable to put significant pressure on the big banks.

He acknowledges that the Mexican banking system has improved, but, he said, “they have not been able to design strategies that allow individuals, micro-, small- and medium-enterprises to join the Mexican Financial System with acceptable conditions.”

Read the rest at The News

We invite you to add your charity or supporting organizations' news stories and coming events to PVAngels so we can share them with the world. Do it now!