CNBV: banking earned 273 billion pesos in 2023

Mexico City. The group of private banks operating in Mexico ended 2023 with historic profits that exceeded 273 billion pesos, a trend that continued in the first month of this year and that led these institutions, predominantly foreign, to achieve one of their best moments in recent years in terms of profit generation, confirm data from the National Banking and Securities Commission (CNBV).

According to the organization, in 2023 banks earned 273,314 million pesos, an increase of 15.1 percent compared to the 237,321 million obtained a year ago. This is an unprecedented figure since records from the authority have been available. The growth percentage is practically five times that of the country’s economy that year, which was 3.2 percent.

The figures were published on Saturday night, after the CNBV, as reported in the middle of the week in The Conference (https://acortar.link/AHGqvD), accumulated at least three months of delay in the delivery of information.

In 2023, BBVA, the bank with the largest presence in the country, earned 87,612 million pesos, an increase of 14.4 percent compared to last year. Santander reported 29 thousand 95 million and Banorte 42 thousand 311 million. In the first case, there is an increase of 9.9 percent; in the second, 22.9 percent.

In the case of Citibanamex, profits totaled 22,279 million pesos, an increase of 9 percent compared to 2022, while Scotiabank reported 11,279, which implied a growth of 1.5 percent. These banks are considered systemically important; That is, in the event of bankruptcy they would put the stability of the sector at risk.

According to data updated by the CNBV, the regulatory body of the financial system, the streak of profits for banks extended to January of this year, the month in which credit institutions generated profits of 26,861 million pesos for their shareholders, which which represented an increase of 7.2 percent compared to the 25,039 million reported during January 2023. Once again, this is the best result for the same month since records have been kept.

One of the metrics that serve to measure profitability is returns on assets (ROA), Ignacio de la Luz, BBVA’s chief financial officer, explained in a press conference.

According to information from the CNBV, the ROA of the banking sector was 2.08 percent at the end of 2023, an increase of 0.13 percentage points compared to the 1.95 percent reported in 2022. The result is presented in an environment that was marked due to high interest rate levels.

This level is higher than the 1.7 percent that companies in the chemical sector generate on average and is within the range of the transportation and food sector industry, which was 2.2 percent on average at the end of last year, according to information from the consulting firm Global Markets.

The ROA of the banking sector is lower than that reported by other industries such as construction, which was 3.8 percent, real estate, which was 6.1 percent, or mining, which is 9.2 percent.

In an interview, the economist and professor Arturo Huerta González, pointed out that the levels of profit obtained by banks in Mexico are the result of the high interest rates in the country at the same time that the returns they charge on loans are below above the world average, since there are countries like the United States where the average rate on a credit card is 15 percent and here it exceeds 30 percent.

“The banks that operate in Mexico, both national and international, are in paradise. How to size them? Well, it’s more of the government’s budget for issues related to security. Is it profitable? Of course, because that’s where most of the profits for international consortia come from.

It would be time for the government, in any case the next one, because this one seems complicated, to carry out a reform to control the profits of the banks, something that is done in some countries. With the results they have, 40 or 50 percent could be retained and that money would go to the public coffersadded the economist.

According to the CNBV, at the end of last year, the financial margin, which results from the difference between the interests paid to savers and those collected from debtors, reached an amount of 757 thousand 401 million pesos, an increase of 17.2 percent if compared to the 646,160 million reported in 2021.

The above was a result of the interest collected totaling one billion 609 thousand 130 million pesos and the interest paid 851 thousand 729 million pesos.

For January, the margin was 69,907 million pesos, with interest collected for 144,181 million pesos and paid for 74,274 million.