Category: Regions

ECLAC, the UN’s Economic Commission for Latin America, has published a damning report on Mexico’s banking sector, concluding that the lack of competition in the market provides conditions for “implicit collusion” by banks to keep consumer charges high. Market regulation has kept out competition in certain areas such as credit cards and checks, leading to banks focusing on profitable consumer lending at the expense of financing business. The market is currently dominated by foreign players such as Santander, BBVA, Citigroup, Scotiabank and HSBC, but the report concludes that this foreign presence in the banking sector has not resulted in increased productivity or efficiency in the local banking system.

The International Finance Corporation (IFC), the private-sector arm of the World Bank, is to invest $45 million into Mexican Banco del Bajío, representing around 10% of the capital of the bank. The capital injection is aimed at strengthening and broadening the bank’s loan activities. Banco del Bajío, which is headquartered in Leon, in the state of Guanajuato, is a regional bank with significant presence in the northern, western and central regions of Mexico. The Bank is the eighth largest bank in Mexico in terms of assets and focuses on three principal business lines: SMEs, agribusiness, and commercial banking.

Mexican Volkswagen workers have called off a strike in return for an overall 5.5% wage rise. The five-day strike at the company’s Puebla plant, resulting in the lost production of 6,000 vehicles, will leave VW at a competitive disadvantage, according to the German company’s management. The union had initially demanded an 8.5% wage increase, with management offering a package comprising a 4% increase and a 0.5% raise in benefits. VW eventually raised the benefits increase to 1.5%.

Mexico’s nominal GDP rose to record levels in the second quarter of the year, according to the national institute of statistics and data (INEGI). Nominal GDP rose 13.7%, year on year, to $875.1 billion as at the end of June. In real terms, GDP grew by 4.7% when adjusted for inflation of 8.6% for the period. Services contributed almost half of nominal GDP (49.5%), followed by industry 26.6% and then retail, restaurants and hotels 21.2% and agriculture 3.9%.

Mexico’s largest fixed-line telecoms operator, Telmex, has bought Colombian cable TV company Superview for around $40 million. Superview, which has 150,000 registered users in Colombia, offers cable television, internet access and remote residential security. Telmex said the deal was completed about 10 days ago. The announcement of the acquisition in Colombia follows news on Tuesday that it has agreed to buy Argentine wireless solutions company Ertach for $22.5 million.