Total credit growth among Mexican banks and other financial institutions slowed to 2.3% during the third quarter of 2017 as higher interest rates and macroeconomic uncertainty took hold, data from the country's CNBV showed.
According to the regulator's savings and financial report published March 16, the total credit growth among banks and non-banks slowed from a 9.2% clip a year earlier to hit 7.276 trillion Mexican pesos.
The slowdown came partly on the back of markedly weaker growth at regulated non-bank intermediaries, such as SOCAPS, SOFOMES and credit unions, which saw a rapid growth rate of 158.7% in the third quarter of 2016. For the same period of 2017, that growth decelerated to 5.7%, ending September 2017 with a total balance of 487.87 billion pesos.
However, loan growth among credit institutions, which make up the bulk of the total, also slowed to a 2.4% pace from 9.6% a year earlier, ending the third quarter of 2017 with a credit portfolio of 5.034 trillion pesos.
The slower growth comes as Mexico's central bank has continued to raise its benchmark interest rate, making credit more expensive, and amid uncertainty spurred by both ongoing negotiations for the NAFTA trade agreement and a Mexican presidential election in mid-2018 — factors that rating agencies have highlighted in recent credit risk reports.
Overall, total internal and external financing slipped 0.3% year over year to 20.386 trillion pesos, largely on an 11.7% drop in external financing, marking a reversal from 15.1% annual growth rate for such financing a year earlier. Financing through debt and fiduciary stock certificate issuances, meanwhile, grew 3.7% year over year in the third quarter, which compares to a negative 2.3% growth rate in the prior-year period.
As of March 16, US$1 was equivalent to 18.72 Mexican pesos.