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Mexico Bank Profits Slow as Rate Cuts Erode Interest Income

Lower policy rates are compressing interest income, cooling a multiyear profit boom.

Overview

  • Mexico’s banks earned 226,075 million pesos in January–September 2025, the highest nominal total for the period but down 2.12% in real terms, according to CNBV data.
  • Interest income fell 1.7% year over year, led by the commercial portfolio, while credit-risk provisions rose 11.6% and administrative expenses increased, weighing on net results.
  • September registered a second consecutive monthly decline in interest income after Banco de México’s easing cycle took the policy rate to 7.25%, including a 25-basis-point cut last week.
  • The financial margin rose 2.8% in real terms as interest expenses dropped 5.9%, but profitability softened with return on assets at 1.93% versus 2.09% a year earlier.
  • Earnings are concentrated, with the eight systemically important banks generating 182,101 million pesos—about 80% of the total—while resilient consumer lending offsets weaker corporate and public-sector demand linked to economic and trade uncertainty.