Banking in Mexico – An International Adventure

article-banamexAccording to the IMF, the Mexican banking system is strong these days with private banks being both profitable and well-capitalized.

The system has fully recovered from the peso devaluation of the mid-1990’s and also managed to dodge most of the U.S. baking crisis.

Interestingly, Mexico’s financial and banking sector is increasingly dominated by foreign companies or mergers of foreign and Mexican companies with the notable exception of Banorte. For example, Banamex is now Citigroup; Bancomer is now BBVA; SERFIN is now Santander; Inverlat is now Scotiabank; Bital is now HSBC – just to name a few major ones.

The acquisition of Banamex, one of the oldest surviving financial institutions in Mexico, by Citigroup was the largest US-Mexico corporate merger, at US $12.5 billion.

The top five banks in Mexico (by asset) are: BBVA Bancomer, Banamex, Banorte, Santander Mexico, and HSBC Mexico. Of the private-banking sector’s 45 banks, five hold 72% of all assets and the top two, Banamex, a unit of Citigroup Inc., and BBVA Bancomer, a unit of Spain’sBanco Bilbao Vizcaya Argentaria SA, have 38% of all assets, says Mexico’s banking commission.

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