Mexico's Banks Target Wealthy in Booming Home Market

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Mexico’s Banks Target Wealthy in Booming Home Market: Mortgages
By Ben Bain and Jonathan J. Levin - Nov 23, 2012 9:30 PM GMT+0530

Mexican banks flush with cash are targeting wealthier clients and women as a way to cash in on the country’s surging mortgage market.

From Grupo Financiero Banorte SAB’s program that focuses on lending to women to Grupo Financiero Santander Mexico SAB’s (SANMEXB) mortgages for homes worth at least 1.7 million pesos ($131,000), the nation’s biggest lenders are tailoring products to grab their share of the 14.6 million additional homes the nation is expected to add between 2010 and 2040.
Mexico, Latin America’s second-biggest economy, is poised to grow faster than Brazil, the region’s largest, for a second straight year, helping the expanding middle class buy homes. Even as some banks’ rates excluding fees have fallen to 10 percent this year from near 13 percent in 2009, government data signals slower expansion in their mortgage holdings, as state- affiliated lender Infonavit controls 75 percent of home loans.

“The population of middle and high incomes has gotten stronger in recent years,” Eduardo Torres, an economist tracking the real-estate industry for BBVA Bancomer, as the local unit of Banco Bilbao Vizcaya Argentaria SA (BBVA) is known, said by phone from Mexico City. “Banks haven’t developed sufficient products for this population.”

Mexican home loans grew by 10.1 percent in the 12 months through September to 443 billion pesos, according to the banking and securities regulator. In Brazil, outstanding housing loans jumped 39 percent to 256.4 billion reais ($122.1 billion) over the same period.

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