For bad loans, Mexican banks have lost 60,000 million pesos: CNBV

The unemployment and the business closure that was caused by the coronavirus pandemic (COVID-19) not only hit the Mexicans hard, but also the bank, which already considers losses of 60,000 million pesos in bad loans.

Juan Pablo Graf, President of the National Banking and Securities Commission (CNBV), reported this Thursday that people and companies they stopped paying about 107 billion pesos to the banks, despite the support program that was launched at the end of March last year and that consisted of deferring payments without the collection of extraordinary interest

The total effect of the loans that finally did not pay since being supported in the first stage, has been around 107 billion pesos, equivalent to 10 percent of the original program.

During his participation in the inauguration of the 84th Banking Convention of the Association of Banks of Mexico (ABM), the official explained that, in October, the CNBV examined the effect of the loan deferral and restructuring programs, which resulted in three customer groups: those that could reactivate payments, those that required a restructuring of credit conditions and the borrowers who could not afford the payment.

In this sense, January 2021 Credits for 890,000 million pesos are reported under the facilities, of which 83% remain in force, 12% were restructured and are in force with contractual revisions and decreases in payments, while a 5% correspond to past due portfolio, from customers who could not continue paying (bad debts).

As of January, around 60,000 million pesos corresponded to portfolio write-offs for bad loans

In addition, he explained that close to 47,000 million pesos are in past due portfolio; that is, they are at least one month behind.

The consumer loans (credit cards, personal loans and payroll credits) are those that record the higher delinquency rate as of January 2021, with 12 percent. The commercial portfolio has a delinquency of 3.4% and the mortgage loan has a delinquency of 2.8 percent.

For the following months, Graf Noriega said that the CNBV will review the awakening of the portfolios since the loans that are still under restructuring will cause the delinquency rate continues to rise.

However, he assured that the decision of do not distribute dividends on the part of the banks contributed to the sector having more tools to cope with the situation.

Regulatory support was complemented by the ease of use of capital and liquidity buffers, the efforts of the bank allowed the support of clients and families without representing a weakening of the banks.

For his part, the Undersecretary of Finance, Gabriel Yorio, pointed out that banking is key to economic recovery in the following months and said that in the very short term they must grant credits to boost consumption and investment.

It is important to accelerate the pace and consolidate as soon as possible the foundations for the Mexican financial sector to be larger and be the engine of sustainable, green and social growth

Yorio indicated that in the future, the Ministry of Finance will improve its economic growth prospects thanks to the vaccination process against COVID-19, which in recent days, mentioned that Mexico will reach the 80 million Mexicans immunized next August.

“Very soon we will officially revise our estimate to a figure close to 5%,” he said.