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Mexican commercial banks' profit up 8.8% through August as loan quality improves

Mexicancommercial banks posted net profits totaling 72.25 billion Mexican pesos in thefirst eight months of 2016, up 8.77% from a year earlier, according to datafrom banking regulator CNBV.

Net interestincome rose 14.0% year over year to 245.60 billion pesos through August, theregulator said in an Oct. 4 press release. Net income from fees and commissionsrose 12.0% to 51.61 billion pesos, while income from financial intermediationrose 21.9% to 15.03 billion pesos.

Consideringa 9% rise in administrative and marketing expenses, pretax income grew 10.8% to91.64 billion pesos.

ROEcame in at 12.63%, up 36 basis points from a year ago, while ROA was 1.32%,compared to 1.30% in August 2015.

Totalassets in the sector grew 7.3% compared to the prior-year period, reaching 8.13trillion pesos, the regulator said. Meanwhile, total loans grew 13.5% year overyear to 4.09 trillion pesos, with commercial and consumer loans up 14.4% and13.1%, respectively, while mortgages also rose 10.8%.

Loanquality also improved despite Mexico's challenging economic situation. The loandelinquency rate, as measured by Mexico's IMOR index, was 2.42%, which was thesame as the prior month but down 53 basis points from August 2015, mainly dueto lower delinquency rates for corporate and consumer loans, as well asmortgages.

Ofthe seven largest banks in the country, Banco Nacional de México SA Integrante del Grupo FinancieroBanamex showed the lowest loan delinquency rate with 1.47% inAugust, El Economista reported.

However,some smaller banks such as BanCoppel SA Institución de Banca Múltiple and BancoFamsa showed higher delinquency rates of 15.89% an 12.75%, respectively, whichis a reflection of the country's difficult economic climate, the report noted.

Thefigures include 47 institutions in operation, including , which started operations in June.

As of Oct. 6, US$1 was worth19.25 Mexican pesos.