CDMX. November 10, 2018 Ricardo MonrealCoordinator of the bank of Morena Senate of the Republicproposed a bill to regulate wages proposed this week banks.
In a report, Fitch Ratings thought that if this initiative was approved, it would have a halinde negative ub effect in the medium and long term for credit institutions with branches in Mexico.
Fitch Ratings foresees negative impacts on reducing commissions https://t.co/A96SvtvSoX pic.twitter.com/zckxz49mup
Browse latest images taken by – Joaquín López-Dóriga (@lopezdoriga) November 10, 2018
Monreal's proposal revokes the cancellation of certain commissions imposed by the banks in the Mexican Republic; However, Fitch Ratings believes that Mexico's profitability for international banking depends on the freedom of banks to regulate their commissions.
"The profitability of Mexican banks can be reduced if the initiative is approved. Wage income is a significant source of revenue for Mexican banks. These revenues represent an average of 18 percent of the total operating income of the bank over the last 5 years, and net interest income still represents the vast majority of total revenues." , The mentioned Fitch Ratings.
The rating agency believes that this freedom in banks' wage enforcement is “healthy as because most of their income depends on them; The commissions provide banks profit and ensure that they remain even in adverse conditions in the area. Economic with low interest rates.
"There may be negative medium and long-term effects on efforts to increase intermediary and financial participation in Mexico by encouraging existing participants in banking and new entrants. They may also have a negative impact on financial product offerings and terms".highlights the rating agency.
Information from Político MX, López Dóriga Digital and La Jornada.
Photo taken from La Silla Rota.
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