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Number of banks in Mexico could rise to 50 in 2016


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Number of banks in Mexico could rise to 50 in 2016

The totalnumber of banks in Mexico could rise to 50 in 2016 if the request of four banksto start operations is approved, ElEconomista reported March 29.

The bankswhich are awaiting approval from banking regulator CNBV are Industrial and CommercialBank of China, Shinhan Bank, Mizuho Bank and Banco Progreso de Chihuahua.

CNBVPresident Jaime González Aguadé said the approval of the banks to startoperations will depend on their capacity to fulfill controls and systemsrequirements. González did not give a definite timeline for the approvals butsaid they "have to be soon."

BancoProgreso Chihuahua received authorization in 2014 but has not yet startedoperations. The situation for the bank is more complicated because it arosefrom the merger of three intermediaries: a credit union, a currency exchangeand a Sofipo, González noted.

Mexico'sregulator has authorized 13 new entrants in the banking sector since 2012, manyof which are already operating, according to the report. One of the banks,Bicentenario, went bankrupt in 2014 due to a sharp drop in capital ratio.Regardless of this, González said there is still interest from both domesticand foreign institutions to enter Mexico's banking sector, which he describedas well capitalized and robust.

Despitemore players in the Mexican banking system, four banks continue to dominate themarket: BBVA BancomerSA, Grupo FinancieroSantander Mexico SAB de CV, Grupo Financiero Banamex SA de CV and Banorte ,However, the report noted that the entry of new players into the system representsincreased competition which will ultimately benefit bank customers.