Mexico Retail Banking: Opportunities and Risks to 2023

Summary

Mexico’s total loan balances outstanding (including residential mortgage balances outstanding, personal loan balances and credit card balances) recorded a CAGR of 9.9% during 2014-18, to reach MXN3.8tn ($193.5bn) in 2018. The country’s household debt, which witnessed a sharp increase in the review period, is far behind in magnitude when compared to other developing economies of the world.

The majority of Mexican loan balances outstanding are from home loans; residential mortgage balances outstanding accounted for 63.3% of total balances outstanding in 2018, followed by personal loans (26.1%) and credit card loans (10.6%). The economy witnessed a slowdown in its performance due to falling industrial production and growing uncertainties regarding trade relations with the country’s key trade partner, the US. In addition, the pace of employment growth has been moderate, with a decline in government spending on employment benefits and pensions. In such a scenario, a hike in lending rates can adversely impact households’ solvency. As a result, the publisher estimates Mexico's total loan balances outstanding to grow at only a comparatively lower CAGR of 7.6% over 2019-23.

Mexico's gross household savings rate stood at 16.32% in 2018; the highest when compared to its peers, reflecting a consumer preference to save rather than spend. In addition, factors such as an increase in deposit rates, as well as rising average annual wages and an improving employment market, further drove the Mexican retail deposits base. Consequently, retail deposit balances in Mexico grew at a high CAGR of 11.3% during the review period.

Based on our proprietary datasets, this report analyzes the Mexicanlending market, with a focus on the consumer lending segment. The report discusses in detail the credit card, personal, and mortgage loan markets, covering market size, competitors’ market shares, and survey insights. The report also provides a market overview and insights on the retail deposit segment. In addition, it covers the key digital disruptors in the Mexicanretail lending segment.

Scope

• Residential mortgage loans in Mexico registered a review-period CAGR of 8.9%. The growth was supported by a rise in income and employment levels in the economy as well as low interest rates on such loans.
• The Mexican personal loans market recorded a review-period CAGR of 13.8%. The growth was due to a rise in income and employment levels in the economy, as well as low interest rates.
• Credit card balances outstanding recorded a CAGR of 6.9% during 2014-18, even though the country has a low credit card penetration.

Reasons to Buy

• Make strategic decisions using top-level historic and forecast data onthe Mexicanretail lending industry.
• Identify the most promising lending segment.
• Receive detailed insights into lending in Mexico, including consumerlending.
• Understand the changing market and competitive dynamics by learning about new competitors and recent deals in the retail lending space.
• Receive comprehensive coverage of the retail deposit market in Mexico.