Fitch: Mexico's Largest Banks (G7) Prove Resilient and Well Capitalized

The largest banks in Mexico (Group of 7 or G7) have been able to withstand the past and recent economic crises, according to a new Fitch Ratings dashboard report. The G7 have proven resilient due to their strong franchises, consistent profitability, controlled asset quality, solid liquidity, and sound capital ratios.

The G7 is composed by Banamex, BBVA Bancomer, Banco Santander Mexico, Banorte, HSBC Mexico, Scotiabank Inverlat and Banco Inbursa. Fitch's new report also discusses key factors affecting the credit profiles of these banks.

Despite the currently less dynamic economy in Mexico, G7's performance remains stable. G7 banks continue with consistent profits even in a low interest environment and have quickly adapted their underwriting standards to the operating environment in order to preserve comfortable asset quality.

G7 banks are well capitalized and supported by solid internal capital generation and to a lesser extent to capital infusion from its parent companies. The banks' capital bases are mostly composed of core equity. In turn, these banks have a wide low-cost domestic and broadly diversified retail deposit base and ample access to capital markets and interbank funding that supports its sound liquidity and strong net interest margins. As expected, the G7 did not face pressures in the new liquidity legal requirements required by the Liquidity Cover Ratio under Basel III.