1319 GMT - BBVA and Santander, which make a large part of their profits from their Latin America operations, are set to benefit from Mexico's blossoming economy due to nearshoring, but short-term challenges taint the picture, BNP Paribas Exane says in a research note. Challenging trends--including margin compression, deposit competition and cost of risk expansion--prompt a cautious stance, especially for BBVA Mexico, analysts Ignacio Ulargui and Cyril Toutounji write. "We do not question promising long-term prospects...We simply argue that short-term weaknesses should not be ignored," they note. The peso's depreciation given the bumpy political context has also been unhelpful, they add. Santander Mexico is a relative outperfomer given its efforts to improve deposit gathering at attractive prices, which should benefit margins, they add. (elena.vardon@wsj.com)
(END) Dow Jones Newswires
September 30, 2024 09:19 ET (13:19 GMT)
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