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Banorte-Interacciones merger to benefit government debt sector, CEO says

The pending merger between Grupo Financiero Interacciones SAB de CV and Grupo Financiero Banorte SAB de CV will allow the combined entity to "be much more aggressive" in terms of lowering interest rates on loans to Mexican states and municipalities, Reuters reported, citing Interacciones CEO Carlos Rojo.

Data from September 2017 showed that Interacciones loaned out about 560.00 billion Mexican pesos to local governments, with interest rates averaging 8.7% through that month.

In late 2017, the two banks together represented almost half of the banking sector's total loans, the newswire reported, citing data from the banking regulator.

Together, both Interacciones and Banorte should boost local governments' ability for infrastructure investing to double the current level, Rojo added.

The CEO had recently said the bank was looking to establish partnerships with Chinese companies to help fund infrastructure projects.

As of Feb. 14, US$1 was equivalent to 18.59 Mexican pesos.