BBVA Bancomer, the largest bank in Mexico in terms of assets held, is facing renewed competition from both its larger rivals and more “middle-sized” challengers. Banco del Bajío launched an IPO (Initial Public Offering) last month that many experts believe will be the first of many such enticements from smaller banks as the country’s bigger financial institutions continue to deal with other obstacles. Pablo Soria de Lachica, a foreign exchange specialist based in Mexico City, says that despite ongoing political uncertainties and slower-than-estimated annual economic growth, Mexico remains an enticing location for investors.
Pablo Soria de Lachica claims that one of Mexico’s most apparent weaknesses may in fact be one of its greatest strengths when it comes to investing. The Mexican peso, though weaker than several other currencies such as the dollar or the euro, allows buyers to take advantage of the country’s exchange rate. “Investors are rarely given a chance to buy at a low cost when so many indicators predict such an incredible increase,” says Soria de Lachica. While Mexico’s overall Gross Domestic Product did not increase as much as predicted for 2016, certain areas did experience significant growth, and the first quarter of 2017 saw a measured uptick thanks in part to the continuing policies of the government of Enrique Nieto, keeping the Mexican market an attractive opportunity for foreign investors.
Bancomer, a subsidiary of the Spanish Banco Bilbao Vizcaya Argentaria (BBVA) group, is followed by Citigroup Inc. subsidiary, Citibanamex (formerly just Banamex), fellow Spanish-based institution Santander Mexico, and native Banorte (Grupo Financiero Banorte, S.A.B. de C.V.) of Monterrey as the most expansive banks in Mexico. This list has been in danger of fluctuating recently as Citigroup has dealt with increasing difficulty with their Latin American branches, forcing them to close all but their Mexican offices. This prompted the American financial group to carry out a campaign to revitalize their last base in the Spanish-speaking world, renaming it and announcing they were investing one billion dollars over the course of the next few years. Though Citigroup and others have dismissed claims this is a sign of increasing competition among the banks in Mexico, this investment was soon followed by one for HSBC Mexico to the tune of approximately 300 million dollars. HSBC has faced similar circumstances as Citigroup in Latin America, as it has been forced to sell off its assets in the region due to faltering returns and pressure from competing interests. Despite rumors that HSBC Mexico was slated to be sold as well, its parent company decided to imitate the Citibanamex initiative and inject some new capital to develop their digital approach. Online banking is set to overtake physical transactions in Mexico in the near future, and new trends may be able to alter the financial landscape in the nation.
Pablo Soria de Lachica is a leading international trading expert, broker, and a philanthropist with interests in various causes, including environmental, supporting special needs persons, and promoting world peace. He is a graduate of Masters of Business Administration program at the Universidad Tecnológico de México (UNITEC). As an advisor in foreign exchange (forex) matters, he focuses on educating potential investors and helping to build tools for online trading, while currently working with Kartoshka, an international company that provides the latest technology in telemarketing, sales, and customer support.