Banorte will become the second bank in Mexico

CITY OF MEXICO (Expansion) –

Grupo Financiero Banorte will become the second largest financial institution in terms of assets, portfolio and deposits upon the merger with Interacciones in July. Thus, Banorte will exceed Citibanamex and will be behind BBVA Bancomer.

The merger of these financial institutions received the approval of the Federal Commission for Economic Competition (Cofece) last Thursday, although the transaction will not materialize until May 31st. July, as detailed by financial institutions in their ads to the public investor.

The operation, valued at 26,557 million pesos ($ 1.419 million), is the largest in the Mexican banking sector since 2001, when the American giant Citigroup bought Grupo Financiero Banamex-Accival, in a transaction of $ 12,554 million

Lee: Why Banorte's foreign shareholders voted against the merger with Interacciones?

The financial group estimates that in the The first 18 months will save money on the cost of financing and operating expenses, which will result in cheaper loans, explained Carlos in recent month. Rojo, general manager of Interacciones

However, the increased exposure to credit and government infrastructure increases the risks in the face of the new political panorama that will appear in the next elections, says an analysis of Carlos Norman Pérez, from Banco Ve por Más.

Banorte is the country's largest bank in the hands of Mexicans and focuses on providing loans to private companies, consumers and states. Interacciones is an institution that aims to finance the infrastructure of state and municipal governments.

Both have the same family on their board of directors: Banorte is chaired by Carlos Hank González, son of Interacciones chairman, Carlos Hank Rhon.

The share price of Interacciones rose by 4.5%, that of Banorte by 0.98%, that of the Mexican Stock Exchange on Friday. However, since the day before the announcement of the merger (October 24, 2017) until last Thursday, the share price of the two institutions decreased by 3.17% and 12.37%, respectively .