Banking - Mexico - Banca Afirme aims to grow loans 30-50% in 2012, targets SMEs

By Jorge Porter?/?Business News Americas

Vote

0 votes

Related content

Companies / Entities

Keywords

Research Reports

Mexican niche lender Banca Afirme expects to grow lending 30-50% this year by putting special emphasis on the SME segment and reaping the benefits of investments made in its headcount, branches and e-banking platform, Federico Valenzuela Ochoa, head of treasury at parent company Afirme Grupo Financiero, told BNamericas.

The bank's net loan portfolio grew 12.1% year-on-year as of end-March to 12bn pesos (US$856mn), according to information posted on bank's website.

More than 51% of that figure is allocated to the corporate and SME segment, which grew 17.9% as of end-March.

The bank is investing to grow lending through traditional branches and its e-banking capability, as well as on specialized sales teams to increase its presence throughout the country.

"These sales forces will focus on selling mortgages, as well as SME, consumer and car loans in specific market niches," the executive said.

These investments increased the bank's administrative expenses 52.1% in 1Q12 compared to the same period in 2011, to 514mn pesos.

BOND ISSUE

The bank plans to place the first tranche of its up to 1bn-peso 10-year subordinated bond line at some point in June, Valenzuela Ochoa said.

Proceeds from the issue will go to fund projected loan growth and will add 700mn pesos to Banca Afirme's core capital, thus boosting its tier 1 capital ratio to 16.8% from 13.7% currently, he said.

The bonds were rated BBB by S&P and BB+ by Fitch, on a national scale.

Banca Afirme posted earnings of 66mn pesos in 1Q12, up 29.4% year-on-year thanks to strong trading revenues and a one-time 13mn-peso gain.

Net interest income remained virtually flat compared to 1Q11 at 435mn pesos, as provisions made for possible loan losses more than tripled to 169mn pesos, and fee income grew 18.1% to 111mn pesos.

Banca Afirme's assets grew 32.4% as of March 31 compared to the same time in 2011 to 91.5bn pesos. Of that figure, 70bn pesos were available-for-sale securities.

Banca Afirme represents 94% of the assets of Afirme Grupo Financiero, which also operates in the factoring, leasing, pension and insurance businesses, among others.

Why settle for this one story when you can access all our news? Sign up here for your free 15-day trial.

squirrel appreciation day billy beane kathy griffin road conditions newt gingrich wives weather gina carano