Some banks in Mexico are looking to cut down on their exposure to credit cards by decreasing spending limits amid an economic slowdown and higher interest rates, Reuters reported Dec. 15.
"That measurement of how much he is going to be able to do is what we have to analyze every day," Miguel Angel Laurencio de la Vega, director of investor relations for Grupo Financiero Banorte S.A.B. de C.V., reportedly said, referring to Trump. Meanwhile, Grupo Financiero Inbursa SAB de CV's card approval ratings fell 8 percentage points from June to about 27% currently, showing heightened selectivity for borrowers.
The banks are concerned about more currency volatility in 2017 following a 19% fall in the Mexican peso this year. Reducing credit card exposures would help the lenders offset a potential increase in consumer defaults, as well as any effects of trade ties being cut under U.S. President-elect Donald Trump.
Lenders are also concerned their profits may drop if Trump junks the North American Free Trade Agreement. The United Nation's Economic Commission for Latin America had warned the country's GDP could drop by about 2.7% in such a case.