Thursday , January 20 2022

Fitch says that the legislative proposal to reduce fees is negative to Mexican American economies


Mexico City.- The rating agency, Fitch Ratings, said that the proposal to restrict some bank fees could have negative implications for banking prospects in Mexico, but stressed that a legislative enterprise was unsure whether it will be approved, or r terms.

Fitch referred to the matter the day after Plaid Morena, Andrés Manuel López Obrador, the elected president, offered in Parliament to cancel the collection of some banking commissions by clients.

"Fitch believes that the profitability of Mexican banks could be reduced if the initiative is approved, the commissioning of income is an important source of profits" for the entities, the taxation agency said.

Lopez Obrador will take office on December 1, and this is the first time in decades that the second Latin American economy will be led by a left-wing party.

Fitch added that fees income averaged 18 per cent of the total operating income of Mexican banks over the past five years, and net interest income still accounts for the vast majority of the total revenue.

Due to their relevance, rates also provide a healthy diversification of income sources to banks and have supported the continuous production of profits, even at times of stress economic and in previous environments of low interest rates, according to the company. qualified

Fitch also believes that this proposal, if approved, could have negative effects in the medium and long term in the efforts to promote financial mediation and inclusion in Mexico.

"It could encourage the current and new bank participants and have a negative impact on the supply and terms of financial products," he said.

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