Financial analysis in the banking system in mexico

Introduction.

Hipotecaria Nacional
Hipotecaria Nacional (HN) is based in Mexico City and it is a subsidiary of Grupo Financiero BBVA Bancomer, and it is responsible for originating, issuing and administering Credito Hipotecario Bancomer (Bancomer Mortgage Credit). The product is targeted for construction companies, regardless their size, for building new homes complex in Mexico. Thesecompanies need to apply for it and The Risk Management Area (RM) will analyze each companies on an individual basis. Some important things we need to know are: (1) each operation is different, (2) each company is different and, (3) the key for a requisition's approval is how adequate is the proposal for paying off the credit. Hipotecaria Nacional has been the dominant force in the mortgage creditmarket in Mexico, and now has a 40% market share, representing more Mexican than double its nearest competitor. In the beginning it was dedicated to finance housing loans of less than $25,000 which was around 60% of the market share. It has now expanded product lines to deal with upscale residential housing, where it holds 28% of the market share. In Mexico, that 74% of the housing market is controlledby 4 banks: BBVA Bancomer, Banamex, Santander, and HSBC.

Sales department will be the one who deals with customers. They turn all the necessary information to Risk Management for starting with the authorization credit process. RM will then analyzed not only the company's financial information; rather, they will collect additional data such a company's legal and credit issues, company'sstockholders legal and credit issues, market size, how much is the demand, how much competency is around, etc.

There are two different credit committees that are involve on the authorization credit process. Hipotecaria Nacional has several strategic business offices called "regionales" (regional offices). Each of this offices will have their own Regional Credit Committee which will be leading by theRisk Management Director (RMD). As soon as the Regional Credit Committee recommend an operation, it now has to be turned to the Central Credit Committee located in Mexico City. They will be the only one with the faculties to have the final decision, and if that is the case, they will disclose some conditions that the applicant must be met prior to the credit operation formalization.
CHBFees:
• Opening Fees: Authorized by Central Credit Committee
• Management Fees: Authorized by Central Credit Committee

Grupo Financiero BBVA Bancomer

Grupo Financiero BBVA Bancomer (GFBBVAB) is part of Vizcaya Financial Group (Spain). It is the largest private financial institution in Mexico in terms of deposits, which, in March 2010 was MX $42,422 million Pesos, with thenumber of banking customers at 16.3 million. At the same time, GFBBVAB recorded assets of $1.073 billion Pesos, equity of $122,870 million Pesos and 32,583 employees. In 2005, Hipotecaria Nacional was acquired by GFBBVAB for US$365 million. In 2009, Hipotecaria Nacional reported a net income of $90 million Pesos. In 2009 The Bancomer mortgage business originated 36,024 new individual mortgages,thus its market share was 41%, representing three times more its nearest competitor.

Vizcaya Financial Group is a holding company subsidiary of Banco Bilbao Vizcaya Argentina (BBVA), one of the largest financial groups in the Euro Zone. In terms of market capitalization, BBVA amounted to 33.507 million Euros at the end of June 2009. BBVA is a financial group with a high solvency andprofitability, a presence in 32 countries around the world with 112,059 employees, over 47 million customers and 7,458 offices.

Housing situation in Mexico
Mexico has a deficit of 2.000,000 homes. It is necessary to invest over four billion dollars to improve the living conditions of the population. In the year 2009, housing needs in Mexico were comprised of 1,300,000 new homes and 700,000 urgent...