DJ MARKET TALK: Mexico Homebuilder Woes Could Reverberate at Banks
Thu Apr 18 14:37:09 2013 EDT
14:37 EDT - With two of Mexico's top homebuilders planning to refinance debt,
Deutsche Bank figures that Mexican banks might experience higher rates of
non-performing loans and provision charges, although the impact would be minor.
If all loans to three major builders went bad, it would represent around 9% of
pre-tax earnings among eight of Mexico's largest banks, Deutsche said, singling
out exposure to the sector by Banorte (GBOOY GFNORTE.MX) and Santander Mexico
(BSMX SANMEX.MX). "However, we think the banks would look to restructure these
loans before writing them off completely, as well as reduce exposure to the
sector and increase collateral."