Fitch Ratings on Dec. 16 revised its rating and sector outlooks for Mexican commercial banks to negative following a similar outlook revision on Mexico's sovereign rating.

The rating agency expects performance of the sector to deteriorate over the next 12 to 24 months relative to recent metrics.

The prospects for loan growth and asset quality in 2017 look less certain now and depend on the feasibility of the implementation of U.S. protectionist measures and the evolution of investor and consumer confidence. Fitch expects loan growth to slow to a range of 6% to 8% in 2017.

Fitch said the strong position of the country's banking sector is now more uncertain. "The overall conditions in the industry include increasing interest rates, which have benefited banks' net interest margins, adequate funding and liquidity profiles, and a strong and resilient loss absorption capacity since Mexican banks are well capitalized and sustained by recurrent earnings," Fitch noted.

Asset quality metrics and loan provisioning of the sector will face challenges due to stagnant growth in the Mexican economy, inflation pressures, and a tougher and more volatile global environment.

Mexico's financial inclusion target for 2018 of 40% of GDP will be difficult to achieve due to increased uncertainty, the rating agency noted.