Delinquencies and overdue portfolios are skyrocketing; losses represent 13% since 2021

The latest data from Mexico’s financial sector reveals a sharp rise in delinquency rates and non-performing loans, with losses increasing by 13% since 2021. According to the National Banking and Securities Commission (CNBV), the Adjusted Delinquency Index (Imora) for credit cards reached 13.7% of the outstanding portfolio during June, marking the highest level in nearly four and a half years. This figure reflects both overdue debts and credits deemed lost by banks over the past year, offering a broader view of loan deterioration. The surge in delinquency indicators coincides with heightened usage of plastic payment methods. As of June, the total credit card portfolio stood at 735 billion pesos, representing an 8.2% increase compared to the same period in 2025. Bank analyst Rodolfo Ostalaza noted that overall bank lending remained dynamic in June, growing by 3.2%, surpassing the 1.7% growth recorded in May. The expansion was driven primarily by consumer credit, which rose 7.6% from the previous month, with auto loans leading the charge at a 11.6% increase and credit card balances advancing by 8.2%. Consumer mortgage loans saw a modest gain of 1.5% in June, following a 1% increase in May, while business financing grew by 1.3%, after declining 1% in the prior month. The rising delinquency rate has been evident throughout the first half of the year, with the consumption loan default index reaching 3.3% in June, up from 3% a year earlier. Personal loans hit their highest level at 5.2%, followed by microloans at 4.7%. For the entire banking portfolio, the delinquency indicator stood at 2.3%, a 0.2 percentage point increase from June 2025. A recent survey conducted by the Bank of Mexico (Banxico) between July 1 and July 15 showed that 66.7% of major banks did not expect changes in the quality of their consumer loan portfolios this year, while the remaining 33.3% anticipated a moderate decline. Gabriela Siller, chief economist at Banco Base, attributed the worsening delinquency trends to the rapid pace of consumer credit growth, particularly through credit cards. “There has been very fast growth in consumer credit,” she stated. “It was expected that delinquency would also rise.” Siller explained that the current trend suggests a shift in consumer behavior, with individuals choosing to spend now rather than save for the future. “This could include impulse purchases,” she added. She warned that this pattern may become unsustainable in the coming months amid a weakening economic environment. The situation highlights ongoing concerns about the stability of Mexico’s financial system. While the delinquency levels have not yet reached crisis proportions, the continued rise in consumer debt signals potential risks ahead. Financial institutions and regulators will likely monitor these developments closely as they navigate the evolving economic landscape.