Due to the increase in tariffs on Mexican goods exports to the United States, driven by Donald Trump , president of the United States, Fitch Ratings has estimated a challenging outlook for Mexico’s banking sector , in which the sector will face greater credit deterioration and profit pressure.
“Capital buffers and liquidity profiles support the ratings, but uncertainty caused by the impending tariff-induced recession elevates credit risk,” the firm noted.
In its analysis, Fitch Ratings indicated that Mexican banks will face revenue pressure and margin compression due to their negative sensitivity to lower rates and higher credit costs.
He stressed that this would specifically affect small and medium-sized banks, “whose lower capital bases and less diversified business models tend to be more sensitive to industries vulnerable to increased US tariffs, such as the industrial, agricultural, automotive, construction, energy, and mining sectors.”
The country’s seven largest banks, which account for 71% of total assets, will also feel the impact, but their diversification could partially mitigate the effects. However, the recession resulting from tariffs will affect sectors such as housing, retail, and construction.
“Corporate lending will be more sensitive to credit demand from key industries closely linked to the U.S.-Mexico relationship, trade relations, and investor confidence in the country. However, the banking system’s exposure to segments sensitive to U.S. tariffs and exposure to the U.S. dollar in certain sectors is moderate,” he warned.
The institution warned that the depreciation of the Mexican peso is a risk, and estimated that Mexico’s business environment has been affected by judicial reform and labor cost inflation , “exacerbated by significant uncertainty about the timing and magnitude of U.S. tariffs, which is weighing on capital spending and reducing consumer confidence.”
Despite this uncertainty, he considered that the Mexican banking system is well positioned to absorb the risks arising from an economic contraction.
In this regard, he noted that Mexican banking systems weathered the global financial crisis and the COVID-19 pandemic, and clarified that the rating downgrades during these periods were due to sovereign debt downgrades and not to pressure on their independent ratings.
It’s worth noting that Fitch revised its growth forecasts for Mexico downward due to the increase in US tariffs, estimating that real GDP growth will be 0%and 0.8% in 2025 and 2026, respectively.
On March 24, Trump announced that some countries would receive exemptions from the tariffs to be announced on April 2, because he was “embarrassed” to charge them.
“I may give exemptions to many countries. They’ve charged us so much that I’m embarrassed to charge them what they’ve charged us, but it will be substantial, and they’ll know it on April 2nd,” the US president stated.
Meanwhile, Mexican President Claudia Sheinbaum said at her morning press conference Wednesday that the country could receive differential treatment in the widespread imposition of tariffs due to its participation in the United States-Mexico-Canada Agreement (USMCA) ; Negotiations are continuing to try to stop the 25 percent levy .
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