Tuesday, November 5, 2024

Credit cards and personal loans lead to defaults

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Late payment in the credit portfolio of the consumer bank Posted a slight rebound from the fourth quarter of 2022According to the Bank of Mexico (Banxico) Financial Stability Report.

The main driver behind this was the rise in the late payment portfolio, With increases in late payment cases in the credit card sectors And to a lesser extent, personal loans.

However, the central bank noted that these levels are still below the average observed in previous years.

We don’t see red flags for the stability of the financial system, as banks’ defaults are at low levels

The entity’s governor, Victoria Rodriguez Sija, commented in a conference call with the media.

Late payment among regulated non-banking entities has also grown, due to the uptick in the popular financial companies (Sofibus) sector, In particular for entering Nu Mexico after purchasing Akalamention the report.

Last December, the company finalized the merger with Sofibu that it bought in 2021, which not only allowed it to expand its product portfolio, but also made it the largest Sofibu company in Mexico.

The entry of this entity led to an annual increase of 54.7% in real terms in the total portfolio of the sector At the end of December 2022, this contrasts with an increase of 4% in the sector portfolio without the said entity. The new Sofibo has an IMOR level above the segment average,” the report noted.

Meanwhile, delinquency in the consumer portfolio held by unregulated non-bank financial intermediaries and Infonacot was down slightly compared to the December report, Because they were given more credit.

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They allocate more for paying cards

The report indicated that the financial burden, that is, the percentage of income that people allocate to cover the required payments from their credits, increased in the case of cards and personal loans between February 2022 and the same month of 2023.

The financial burden has increased during the said period, with a significant increase in the status of the cards

Banxico noted.

During the same period, a lower financial burden was observed for the salary and automobile sectors.

The publication indicated that, in general, total consumer financing showed significant growth in real terms, with a strong dynamic in the portfolio granted by several banks, as well as other non-bank intermediaries and shops.

Resume housing progress

In the housing credit sector, Banxico indicated that, unlike the decline that appeared in the previous report, financing witnessed marginal growth in its annual comparison in real terms.

The advance manifested itself in both the portfolios of the multi-banks and the Fovissste, however, that of the Institute of the National Workers’ Housing Fund (Infonavit) remained in contraction.

In the same way, The agency’s late payment rate (EMOR) continued to riseIn contrast to the marked downward trend in the banking portfolio since mid-2021.

Banxico noted that in March, Imor of Infonavit’s housing portfolio ranks one of the highest on recorddue to having a larger portfolio of delinquent loans in both minimum wage and peso loans, and also because fewer loans were originated.

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