LBBW Mexico - thueringen-international.de · (boosted by relatively stable inflation and credit...

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LBBW Mexico

March, 2013


Mexico


Quick Facts

Name: United Mexican States

Population: 116.4 million (2012)

Capital: Mexico City

Other major cities: Guadalajara, Monterrey, Puebla

Area: 758,449 sq miles

President: Enrique Peña Nieto

Political Regime: Republic

Language: Spanish

Religion: Predominantly Roman Catholic

Life expectancy: 74 years (men), 79 years (women)

SOURCE: World Bank/INEGI


Political Overview In July 2012 with 38.15% of total votes, Mexicans elected Enrique

Peña Nieto as new President of Mexico from Partido Revolucionario Institucional (PRI) for the period 2012-2018. The election renewed both houses of Congress (128 Senators and 500 Congressmen).

Mexico chaired the G20 in 2012. By assuming the annual Presidency of the G20 Mexico, the second emerging country and the first in Latin America to do so, Mexico confirms its role as a responsible and influential actor, both regionally and globally.

Mexico’s priorities for the G-20 agenda are: Economic stabilization and structural reforms; Strengthening the financial system and fostering financial inclusion; Improving the international financial architecture; Enhancing food security and addressing commodity price volatility; and Promoting sustainable development, green growth and the fight against

climate change.


Economy at Glance

Currency: Mexican Peso (MXN)

GDP: US$1,231 billion (2012)

GDP per capita: US$ 10,581 (2012)

Extreme poverty rate (% of Population): 11.2% (2012) Total Debt: US$ 409.6 billion (2012)

Total Debt as % of GDP: 33.3%

Main exports: Automobiles, auto parts, crude oil, meats, dairies,

fruits, vegetables

Main Commercial Partners: US, Canada, Germany

SOURCE: World Bank/INEGI/SHCP


Mexico’s trade agreements Free Trade Agreements Partial Preferential Agreements

NAFTA (USA and Canada) MERCOSUR - Auto Sector (ACE 55) Central America (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) MERCOSUR (ACE 54) Peru Brazil (ACE 53) Bolivia Argentina Japan Ecuador

Uruguay Panama EFTA member states (Iceland, Liechtenstein, Norway and Switzerland) Northern Triangle (El Salvador, Honduras and Guatemala)

Israel

European Union (EU)

Chile

Nicaragua

Costa Rica

Colombia


Economic Development Mexico, the second largest economy in Latin America, expanded

at a strong pace for most of 2011 when the GDP grew 3.9%, in 2012 the GDP maintained its trend and grew 3.9% as well; although it is showing signs of slowly decelerating in 2013 as GDP forecasts made by the Mexican government are for the GDP to grow 3.5%. The economy is exposed to fluctuations in the US economy, global financial markets, and commodity prices. However, Mexico is well positioned to respond to a global slowdown, particularly on the external and monetary fronts..

Growth is driven by private consumption and investments (boosted by relatively stable inflation and credit growth). Oil prices could decline upon a weaker global economic growth, having an important impact on Mexico’s public finances next year. Manufacturing exports continue to have a strong performance at annual growth rates of above 10%, led by the automotive sector which accounts for over a quarter of exports.


Economic Development The uncertainty in the U.S. and the global outlook represent the

main risk factors. Mexico could be significantly affected by subdued economic activity in the U.S. due to the expected fiscal drag. External financing needs are manageable. This is due to a moderate current account deficit, healthy levels of international reserves, which are at record levels above US$ 160 Bn., a Flexible Credit Line with the IMF, and prudent public debt management.

The flexible exchange rate is a first, strong shock-absorber. The

flexibility of the exchange rate regime allows the currency to depreciate rapidly. This helps to absorb the impact of a reversal in net capital flows. The banking system is sound. Foreign banks’ subsidiaries enjoy strong capitalization and liquidity ratios.


Economic Development GDP Annual Growth (Real)

Source: INEGI Base Year: 2003

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


GDP Projections for 2050 Goldman and Sach’s recently published their projections for

GDP levels by nation 38 years into the future, in this projection Mexico is number 8 while Germany is 12.


Annual Inflation

Source: INEGI


Interbank Interest Rate (TIIE)

Source: BANXICO

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Foreign Exchange Rate (MXN/USD)

Source: BANXICO

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Mexican Stock Exchange (IPC)

Source: INEGI

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


International Reserves

Source: INEGI

USD Mio.


Remittances

Source: BANXICO

USD Mio.


External Debt

Source: BANXICO

USD Mio.


External Debt as % of GDP

Source: BANXICO


Mexican Banking System


The Mexican Banking System at glance

Source: AMB

Entity Type Number Financial Groups 22

Banks 47

Development Banks 6

Representative Offices 58

Stock Exchange Houses 34

Insurance Companies 79

Retirement Funds “AFORES” 13

Investment Funds Operators 33

Leasing Companies 2

Factoring Companies 1

Guarantees (Afianzadoras) 15

Deposit Warehouses 19

SOFOLES 18

SOFOMES 4,022

Banking Licenses


Average Interest Rate Charged

Source: ABM


Past Due Ratio and Coverage Ratio

Source: CNBV

Past due Ratio (%) Coverage Ratio (%)


Capitalization Index (%)

Source: ABM

Basel III

CNVB “Early Warning”

Min.

2006 2007 2008 2009 2010 2011 2012


Current Loan Portfolio

Source: World Bank

USD Bn.


Mexican Banks’ ROE

Source: BANXICO, ABM, CNBV


Mexican Banks’ ROA

Source: BANXICO, ABM, CNBV


LBBW Mexico


LBBW Mexico

In 2007 LBBW established a finance company in Mexico that is a non-bank financial institution. LBBW MEXICO, S.A. de C.V. SOFOM, E.N.R. provides loans for production facilities, equipment and working capital, as well as diverse portfolio of services to support the needs of LBBW Group’s and Saving Banks’ clients in Mexico. Since 2011, LBBW Mexico is also supporting client’s needs in Chile and Peru.

To further support the needs of LBBW Group’s and Saving Banks’ clients operating in Mexico, LBBW’s Representative Office Mexico and its German Desk are located in the German Centre in Mexico City. The Representative Office is also responsible for Central America.


LBBW Mexico Products & Services

LBBW Mexico offers a complete set of financing options to its clients: - Investment financing, term-loans ranging from 1 to 5 years - Acquisition financing - Revolving facilities - Working capital loans, tenors from 1 to 12 months - Local currency financings - Hermes-covered import financing

LBBW Mexico is authorized to utilize local collateral like

mortgages, pledges of equipment, personal guarantees. Business that LBBW Mexico is not presently allowed to conduct,

like foreign exchange transactions and derivatives, is being passed on to LBBW New York


Landesbank Baden-Württemberg Representative Office Mexico Since 2001, LBBW has been present in Mexico-City with the

German Centre and a Representative Office located in the same building. Our main goal is to support the business customers of the LBBW Group and the Savings Banks which are active in Mexico and Central America or plan business activities there.

Services range from questions about accounts and payments, over start-up support for newly established German midcap companies, to complex market entry studies.

Support for German Savings Banks


Location

LBBW Mexico is located in Mexico City in the German Centre building.


Volker Helms

Leiter der Repräsentanz Mexico City Geschäftsführer der LBBW Mexico SoFOM Telefon: +52 55 917292-60 +52 55 8421-1048 Telefax: +52 55 917292-63 +52 55 8421-1058

E-Mail: [email protected]

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LBBW Mexico - thueringen-international.de · (boosted by relatively stable inflation and credit...

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