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HSBC Mexico Eyes Robust Credit Growth
 Noel Randewich & Emily Chasan - Reuters
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May 06, 2010
| | HSBC Mexico's Chief Executive Luis Pena speaks at the Reuters Latin American Investment Summit in Mexico City May 5, 2010. (Reuters/Daniel Aguilar) | |
Mexico City - The Mexican unit of HSBC (HSBA.L) plans to expand its lending by up to 12 percent this year as it focuses on mortgages and small businesses, after being bolstered by an injection of $700 million from its parent.
HSBC Mexico Chief Executive Luis Pena told the Reuters Latin American Investment Summit in Mexico City on Wednesday that there were signs of recovery in consumer lending.
As Mexico's economy pulls out of its deepest recession since the 1930s, HSBC sees overall lending in the country increasing between 10 percent and 12 percent this year.
"To grow the portfolio three times faster than GDP (gross domestic product) is not bad in a year when the economy is going to expand 4 percent," Pena said.
During the global financial crisis, Mexican banks struggled with loan defaults resulting from higher unemployment. But HSBC and Mexico's other big banks never reached dangerously low capitalization levels.
Mortgage lending will be a big contributor to HSBC's growth in 2010, while total consumer credit should increase in the one-digit range, Pena said.
Legal changes making it easier for owners of small businesses to apply for loans will help HSBC increase its lending to that market by up to 25 percent this year, Pena said.
"Our total portfolio for small and medium businesses is 10 billion pesos ($782 million). That's the portfolio where we see the potential for growth for our bank," Pena said.
Pena noted that credit card customers were starting to carry more of their balances over from month to month, although still less than during healthy economic times. That could be an early sign of recovery in credit card lending, he said.
In December, HSBC pumped $700 million in capital into its Mexican unit to revamp its branch network and increase lending. The new funds have pushed up HSBC Mexico's capital adequacy ratio to 17 percent, higher than many of its peers.
($1 = 12.76 pesos)
(Reporting by Noel Randewich, Emily Chasan and Tomas Sarmiento)
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