S&P boosts six Mexican banks to positive

Standard & Poor's said it revised its outlook on the BBB+/A-2 counterparty credit ratings on BBVA Bancomer SA, Banco Nacional de Mexico SA, Banco Santander SA and HSBC Mexico SA, on the BBB/A-3 counterparty credit rating on Scotiabank Inverlat SA and on the BBB-/A-3 counterparty credit rating on Banco Mercantil del Norte SA to positive from stable.

"The rating action on these banks reflects growing macroeconomic stability and the banking sector's increasing participation in the economy," said S&P credit analyst Angelica Bala.

Low inflation levels, more predictable interest rate dynamics, a flexible exchange rate, recovery of the population's purchasing power, increased economic activity in the country, and more legal certainty arising from the new bankruptcy law continue to result in greater credit demand and possibility for the major banks to expand operations in a profitable way, the agency said.

In addition, the agency noted that the improved financial performance by these banks continues to reflect improved origination and risk management practices, coupled with adequate capitalization and reserve coverage levels.

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