Private banking profits amount to more than $171 billion

From January to July, the group of private banks operating in the country reported profits of 171,881 million pesos, an increase of 3.5 percent in real terms compared to the 157,227 million recorded in the first seven months of last year, according to figures from the National Banking and Securities Commission (CNBV).

With this result, banking institutions broke a streak of four consecutive months in which profits were lower than those reported in the previous year, since in March they decreased by 5 percent; in April, 3.9; in May, one percent, and in June, 0.35 percent.

According to the figures, the seven systemically important banks – those that, in the event of bankruptcy, would jeopardize the stability of the financial system – which are BBVA, Santander, Citibanamex, Banorte, HSBC, Scotiabank and Inbursa, accounted for 80 percent of the profits, with a total of 138,315 million pesos.

The financial margin, which is mainly the difference between the interest that these entities charge debtors and the interest they pay to savers, stood at 487,133 million pesos, 9.2 percent higher in real terms compared to the 422,521 million pesos reported from January to July 2023.

In this regard, banks’ interest income totaled 1 trillion 19 thousand 320 million pesos, an amount 6.6 percent higher in real terms compared to the 905 thousand 559 million reported in the first six months of the previous year.

Record credit

Interest expenses, for their part, amounted to 532,187 million pesos, which represented an increase of 4.3 percent compared to the figure reported between January and July of last year, which was 483,038 million pesos.

One of the reasons why banks have had lower profits in recent months was due to the greater generation of reserves to face losses in loans, especially those related to consumption. At the end of July, preventive estimates for potential risks stood at 102,204 million pesos, which represented an increase of 15.3 percent compared to what was reported a year earlier.

One methodology for measuring profits is the return on assets (ROA), which at the end of July stood at 2.1 percent, which meant an increase of 0.03 percentage points compared to the 2.07 percent reported in July of last year. The CNBV figures also indicate that the balance of the total credit portfolio is at its highest level since records began, at 7 trillion 229 thousand 546 million pesos, an amount 4.9 percent higher in real terms compared to the 6 trillion 528 thousand 645 million reported until July of last year.

Of that total, 1 trillion 576 thousand 509 million correspond to consumer financing – a portfolio that includes credit cards, personal and payroll loans, among others – which had an increase of 11.9 percent in real terms compared to what was reported between January and July of last year, when it totaled 1 trillion 334 thousand 225 million pesos.