Citibanamex sees the health of the bank with AMLO

Despite the potential risks due to the new measures that can be promoted by the virtual elected president, Andrés Manuel López Obrador, his moderate tone, the independence of the Bank of Mexico (Banxico) and the strong government of 39, other regulatory agencies must provide a Citibanamex

In an analysis of potential threats and opportunities under the administration of López Obrador, he stated that high margins for net interest and stable quality bank assets, in addition to stronger credit growth, they make the profitability of the sector continues to improve, giving points in favor.

"A favorable start of the new administration's market offers an attractive entry point.We also see growth potential in the loan portfolio if, instead of an aggressive intervention by the federal government, the new policies of the administration broaden the existing programs (such as those of FIRA or Nafin) which are associated with the commercial banks to obtain cash and guarantees. "

The report cites three risks to be considered with the new administration, the first of which are the capitalization rates.

Reviewing the Regulatory Framework of Banxico and the National Banking Commission and It is unlikely that the new administration will impose maximum interest rate ceilings, given the commitment of the government. AMLO to maintain the independence of the central bank.

"Our opinion is supported by judicious appointments within the AMLO cabinet of officials who understand the negative implications for the financial inclusion of the imposition of caps on rates," he said. . 9659002] The second risk is the intervention through the development banks, because it is "unlikely that there is a solid growth of loans through institutions controlled by the government."

The third is the risk of "In general, we think that the friendly tone for AMLO markets after the elections suggests a lower probability of major changes, at least in the short term," said Citibanamex.