a major growth of the economy and more people and companies requesting financing are two of the elements that are required for the penetration of credit with respect to the Gross Domestic Product (GDP) to advance more quickly.
”The concern that exists is how we generate more growth in the country, more investment; the more investment, more growth, but we must see how informality is combated, how a national infrastructure project is carried out on different fronts, that is what will give growth in the generation of credit. The problem is not the availability of banks, what there is is a serious problem of demand for credit,” he said. eduardo osunaCEO of the BBVA Mexico Financial Group.
In interview with The financial Within the framework of the 86th Banking Convention, Osuna Osuna assured that progress has been made in financial inclusion in the country, which, unlike the 1990s, when bank penetration was high because 40 percent were loans to government and not to families, and contrasts with what is currently happening where there is credit penetration with a better profile, since it is financing granted to companies of all sizes, but above all, to mexican familieshe insisted.
”If we want there to be more credit, we need two things: one is more growth. Credit grew five times more than the growth of the economy last year and if we continue at this rate of growth of 5 to 6 times the growth of the economy, then we will continue to grow credit penetration little by little, what we need is more credit subjectsFor example, when there are more infrastructure projects in the country, credit will grow more; In Mexico there is no demand for credit, there are many people in the informal sector and there is a lack of investment projects, what exists is not all financed by banks, other vehicles are used”.
Therefore, for there to be more credit, the second thing that is needed is more applicants and one way is to get more people than today to find themselves in the informality change that status to enter the financial world, but he also recognized that it is a joint work of authorities and union to know how to explain the advantages of all this, not only for their businesses, but for the country.
”Banking is a good reflection of what is happening in the country’s economy. It’s a great thermometer. Let’s not forget that banks grew credit in a very important way during 2022, because the economy also grew. We have that it grew 3.1 percent. In these data we see a country that is reacting to the post-pandemic and that is also receiving a lot of foreign investment”.
For this reason, he said, the banks are showing good numbers, firstly because of the commercial activity that is being seen and where the support that the banks are giving to the country’s economic growth is clear.
”Then it must also be said that the post-pandemic cleaned up the portfolios a bit, when I say cleaned up it is that we took significant losses in the pandemic and we are coming out with very healthy portfolios that are allowing us to grow and that is reflected in lower risk premiums and that has an impact positively on the results of the entire industry.”
In addition, an important part of the growth that has occurred in the results not only of the bank, but of the entire banking industry it is because technology has reduced the costs of banks.
”The best example is us. Last year we grew 200 billion pesos in the total balance of the bank, we grew in all segments, in the SME portfolios, in the portfolios of large companies, in practically all industries and it must also be said that all retail we had record years in terms of new credit production. And that is evidence of what we are seeing ”, the investment in technology and the growth that the economy had combined, he indicated.
However, he recognized that if the economic development of the states is analyzed in more detail and not at the country level, growth is totally uneven. “There are areas that are growing at much higher levels, that are receiving a lot of foreign investment, employment is good, but there are other areas of the country that are having investment problems and have less growth. We are always talking about averages for Mexico. 3.1 percent is the national average, but they are not two Mexicos, there is a perfect correlation between what is happening in banking and what is happening in the economy”.
BBVA Mexico, is the largest bank in the country, and has managed to maintain that position for several years, which is far from yielding to another competitor; the investments made in technology, and the growth of its digital clients have been a key part of this positioning, recognized Osuna.