Mexican central bank concerned by consumer loan delinquency
The Mexican central bank expressed concern about deteriorating asset quality in the commercial banking sector's consumer loan portfolio, reported local daily El Economista.
Commercial banks' origination processes need to improve, interest and growth rates must remain stable, and banks must make better use of information provided by credit information companies, said central bank governor Agustín Carstens at the press conference to present the latest 2014 financial system report.
According to the report, nearly 90% of Mexico's consumer loans – made up of personal, credit card, payroll and vehicle loans – are provided by commercial banks, with the remainder provided by development banks or intermediaries.
The consumer credit non-performing loan (NPL) ratio has been rising since 2Q12, when it reached its lowest point in five years, said the bank.
In the personal loans segment the NPL ratio rose to high of around 17% at end-September 2014, while the credit card NPL ratio climbed to nearly 16%.
Payroll loan delinquency rates have have improved this year, probably due to improved origination processes, said the regulator, while the auto financing NPL ratio has remained largely stable at around 4%, according to the report.
The deterioration in asset quality has occurrred despite consumer lending having slowed over the same period.
Consumer loan growth slowed to less than 3% at end-September 2014 from more than 20% in the first quarter of 2012, according to the report.
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