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

Banamex

Financials

Galliano's Financials Research

Citi to sell its Mexican retail and SME banking operations - “new Banamex” is worth USD7-10bn according to Victor Galliano. Grupo Salinas owned Banco Azteca seems a strong candidate to make a bid, especially since Ricardo Salinas is close to the Lopez Obrador government. Carlos Slim’s Inbursa could also be a good fit. Both potential bidders are likely to attracted by the deposit rich nature of the Banamex franchise, as well as the capillarity of the branch network, even in these increasingly digital times.

- 21 January, 2022