Mexico Diversified Banks: Chart(s) of the Week: The start of negative credit cycle in Mexico?

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Mexico Diversified Banks: Chart(s) of the Week: The start of negative credit cycle in Mexico?

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23 Jul 2026 17:21:35 ET │ 13 pages

Mexico Diversified Banks

Chart(s) of the Week: The start of negative credit cycle in Mexico?

CITI'S TAKE

Gustavo Schroden AC

For this edition, we analyze rising asset quality concerns in the Mexican +55-11-4009-5858

banking system, which is showing signs of a decelerating credit cycle as gustavo.schroden@citi.com

loan growth slows and NPLs increase. While overall NPL levels remain below

historical peaks, deterioration since 2024 has been most pronounced in Brian Flores, CFA

personal loans and credit cards. Our analysis of CNBV data reveals that +55-11-4009-2842

Banorte’s historical asset quality advantage in consumer lending has luis.brian.flores@citi.com

narrowed. More concerning is the significant erosion of Banorte's NPL

coverage, which has shifted from a surplus to an approximate 11% deficit Arnon Shirazi, CFA

relative to the system. This reduction was driven by deteriorating coverage +55-11-4009-7906

in credit cards and corporate loans, with mortgage coverage also now falling arnon.shirazi@citi.com

below the system average.

Decelerating Credit Cycle — Mexico's banking system is showing signs of a

decelerating credit cycle. We analyze rising asset quality concerns as loan growth

slows and NPLs increase across the system. While overall NPL levels remain below

historical peaks, the deteriorating trend has been clear since 2024. This slowdown

is evident across both loan and deposit segments.

Consumer Asset Quality Deterioration — Mexico's asset quality deterioration is

most pronounced in consumer lending. We note the largest NPL increases since

2024 have stemmed from personal loans and credit cards. NPLs (excluding write-