Foreign banks have spent billions on buying up Mexican banks,
leaving just one major institution in local hands. The foreign
banks are attracted by Mexico's strong economic potential and
its membership in Nafta. The inflow of foreign capital has
bolstered the banking system's balance sheet, giving banks
access to lower-cost funding that should translate into cheaper
and more plentiful loans for a country desperately in need of
credit. So far that hasn't happened. Assets and profits are
rising, but lending remains flat.
The Foreigners Take Over
Nearly all Mexico's banks are foreign-owned now, and the financial system is fully recovered from the financial crash of 1995. But lending remains feebele in a country desperately in need of credit.
HSBC Holdings of the UK is the most recent entrant to the
Mexican market. In August, HSBC bought Grupo Financiero Bital,
the country's fourth-largest bank, for $1.14 billion. It goes
up against Santander Central Hispano and Banco Bilbao
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.