The addition of four Mexican development banks and three other government-related lenders in the country's 2018 annual financing plan highlights their high strategic importance to the government given their specific roles, Fitch Ratings said.
In addition, the banks' inclusion to the plan is positive in terms of increasing transparency for investors and market participants. It reflects disciplined and orderly growth plans in line with the banks' role to increase financial inclusion in Mexico, Fitch said.
The financial entities included in the plan consist of Nacional Financiera SNC, Banco Nacional de Obras y Servicios Públicos SNC, Banco Nacional de Comercio Exterior SNC, Sociedad Hipotecaria Federal SNC, Instituto para la Proteccion al Ahorro Bancario, Instituto del Fondo Nacional para el Consumo de los Trabajadores and Fideicomisos Instituídos en Relación con la Agricultura.
According to the financing plan, the need for financing for the entities will remain stable as a percentage of Mexico's GDP. The financing resources will be used mainly to service debt repayments in 2018 and to finance a general average loan growth rate of 10% during the year. Some of the sources of financing include local and international debt issues and lines of credit from international financial organizations.
Fitch noted that 2018 will be a challenging year for the Mexican financial system due to uncertainties related to the presidential elections in July and the renegotiation of the North America Free Trade Agreement.