Home Business Mexican banks consider tightening credit-card policies in face of economic conditions

Mexican banks consider tightening credit-card policies in face of economic conditions

by sanmigueltimes
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Some Mexican banks are lowering credit card spending limits and raising consumer lending standards in the face of an economic slowdown, rising interest rates and the U.S. election victory of Donald Trump, Reuters reports.

After a period of robust overall credit growth, Mexican banks are cutting credit card exposure to counter a potential rise in consumer defaults and the risks of an economic shock should Trump restrict U.S. trade and business with Mexico.

The moves come on concerns Latin America’s second largest economy could see more turbulence in 2017 after its peso currency lost 19 percent this year, largely on fears of a Trump administration.

PHOTO: google.com

PHOTO: google.com

Lenders would see profits hit if Trump scraps the North American Free Trade Agreement or discourages U.S. companies from moving to Mexico, as he vowed to do on the campaign trail, some banks and analysts said.

“That measurement of how much he is going to be able to do is what we have to analyze every day,” said Miguel Angel Laurencio de la Vega, director of investor relations at Grupo Financiero Banorte (GFNORTEO.MX), the country’s fourth-largest bank by assets, referring to Trump.

Banorte, in addition to banks such as BBVA Bancomer (BBVA.MC) and Grupo Financiero Inbursa (GFINBURO.MX), told Reuters they were moving to tamp down exposure to credit cards, a profitable but risky area that tracks the broader economy.

Banorte, the largest Mexican-owned bank, said it could reduce credit card limits for new customers if necessary.

To read complete article click here.

Source: reuters.com


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