The financial performance of Mexico’s banks in 2022 was driven by the country’s economic growth and increased private consumption. The appreciation of the Mexican peso against the dollar, the currency in which the ranking’s results are expressed, also supported the country’s results in the Top 1000 World Bank ranking.
All seven domestically owned Mexican banks in the Top 1000 increased their pre-tax profits (PTP) by double-digit percentage increases. However, Grupo Financiero Citibanamex, which does not appear in the main ranking as a foreign-owned subsidiary (FOS), saw a PTP drop of 4.08%.
When applying The Banker’s performance methodology against the five largest Mexican banks, excluding FOS, all held steady their positions compared to the previous year’s rankings.
Banco Inbursa tops the list for the third year in a row, besting its peers in the soundness and leverage categories. The lender also has the highest return on assets (ROA) ratio among this cohort, of 3.34%.
Last year, Inbursa was among the banks that decided to pull out of the bidding process for Citigroup’s Mexican retail arm Citibanamex, which instead is expected to be listed in the coming years.
Grupo Financiero Banorte, the country’s biggest domestically owned lender, places second in the overall best-performing table thanks to its top-topping return on risk metric. Its return on risk-weighted assets increased from 4.13% in 2021 to 5.40% in 2022. During the same period, its cost-to-income ratio reduced from 43.09% to 34.34%, suggesting that the bank is now running more profitably.
Banco del Bajio is third overall and the best performer in profitability, boosting its PTP by 93.11%, to $540m. The lender also topped its peers in operational efficiency, which evaluates improvements in a bank’s cost-to-income ratio.
Banco Regional de Monterrey (BanRegio) ranks fourth in the overall best-performing bank table, outperforming its peers in the liquidity category following an increase of 4.35% in its cash held relative to total deposits. It was also first for asset quality, which looks at non-performing loan level improvements, among other metrics.
Banco Azteca comes in last among the five biggest domestic lenders again this year. However, it done well in the growth category, placing second. It also made the highest movers’ table based on Tier 1 capital in the region, boosting its Tier 1 by 36.93%. In addition, its asset base expanded by 16.02%.
Microfinance institution Banco Compartamos also reappears in the main Top 1000 ranking, with $614m in Tier 1 capital. With a 31.64% return on capital (ROC), the lender places second for ROC at a regional level. With regard to ROA, it ranks first with a ratio of 9.79%.
Mexico’s economy is forecast to grow by 1.5% in 2023 after an expansion of 3.06% in 2022, according to the United Nations Economic Commission for Latin America and the Caribbean. Mexican bank profitability, however, is set to decline in 2023 as credit growth slows and loan impairment charges rise, according to Fitch Ratings.
