Mexican Banks: Selective value in smaller caps

Financials

Galliano's Financials Research

Aside from Trump’s tariff policies, Mexican banks are under pressure from the government to deliver on more competitive lending rates, with fintech challengers Nubank and MercadoLibre’s MercadoPago gaining traction. Despite these challenges, 1Q25 results were sound and the bank sector participated in the somewhat surprising Mexican bolsa rally in April. In this report, Victor Galliano applies his proprietary scorecard - which assesses valuations, balance sheet strength, returns and credit quality - that is then weighted across ten criteria to arrive at his investment picks; BanBajio, followed by BanRegio, rank as the top two. Inbursa is bottom ranked.

- 16 May, 2025

LatAm Banks

Financials

Galliano's Financials Research

Victor Galliano examines key balance sheet ratios of the LatAm Banks looking into liquidity, credit quality and capital adequacy, at a time of investor nervousness and concern - Victor likes Bradesco and Bancolombia as value plays with Banco de Chile, BanBajio and BanRegio as high quality names. His bearish picks are Banorte (even though it is a quality name in terms of capital and credit quality, it is more exposed on the importance of its securities portfolio) and BCI, despite its strong liquidity, with its small US (Florida) banking subsidiary.

- 31 March, 2023