Mid-sized banks speed up profits in Mexico; Covalto, Consubanco, and Multiva stand out as the G7 cools
Banks operating in Mexico closed out 2025 with net profit growth of nearly 5%, totaling roughly 304.4 billion pesos, in a year marked by still-elevated interest rates for much of the period, fiercer competition for customers, and a backdrop of moderate economic growth. Within that overall performance, mid-sized banks posted the strongest momentum, with double-digit gains led by Covalto, Consubanco, and Multiva, according to figures from Mexico’s National Banking and Securities Commission (CNBV).
The rebound at these institutions comes as the financial system tries to balance three forces: the cost of money—still shaped by Banco de México’s monetary policy—the demand for credit from businesses and households, which has become more selective after the recent inflation cycle, and the need to invest in technology and regulatory compliance. In that context, profitability has increasingly concentrated in business models with clearly defined niches and efficient origination capabilities, particularly in specialized lending.
In Covalto’s case, with its focus on lending to SMEs, the more-than-1,230% jump in profits is largely explained by a low 2024 comparison base and an expansion strategy backed by institutional investors. In a country where financing for small and medium-sized businesses remains a bottleneck—due to informality, lack of collateral, and high origination costs—the performance of specialized players suggests there is room to grow if they can deliver faster risk assessments, products better tailored to cash flow, and efficient collections. The challenge going forward will be sustaining that growth without weakening loan quality, in an environment where delinquencies could rise if economic activity cools.
Consubanco, meanwhile, has stood out for steady loan growth and wide margins, according to assessments by ratings agencies such as Fitch. In segments like consumer lending, payroll loans, and products aimed at customers with limited access to traditional banking, margins tend to be higher—but so are reputational and credit risks. Competitive pressure, heightened regulatory scrutiny of origination and collections practices, and the rise of digital alternatives will force these institutions to strengthen internal controls and transparency to preserve profitability without increasing their risk profile.
Multiva, led by Tamara Caballero, reported profit growth of close to 49%, to 1.403 billion pesos, a process the bank attributes to several years of cleaning up its loan book and a more disciplined pace of lending. While the acquisition of a trust-services business broadens its menu of services and fee income, the market typically evaluates such moves cautiously: the real impact depends on operational integration, attracting high-net-worth and institutional clients, and converting those services into recurring revenue without costs rising faster than the benefits.
Meanwhile, the large systemically important banks—BBVA México, Banorte, Santander, HSBC, Citibanamex, Scotiabank, and Inbursa—showed a more mixed performance. In 2025, Santander was the only one in the group with double-digit growth (13%), while BBVA, Banorte, and HSBC posted single-digit gains. In absolute terms, BBVA remained the system’s largest profit generator, at roughly 98.946 billion pesos, followed by Banorte with about 47.38 billion. By contrast, Citibanamex, Inbursa, and Scotiabank reported declines in earnings, reflecting a mix of tighter margins, strategic adjustments, and operating costs.
The market outlook for 2026 is more complicated: a more aggressive competitive environment tends to compress margins; at the same time, investment in digitalization—from cybersecurity to credit-origination analytics—pushes expenses higher in the short run. In addition, as benchmark rates normalize, the benefit banks enjoyed from wide net interest margins during the tightening cycle may fade. In that sense, warnings like Moody’s about a potential weakening in profitability next year align with a scenario where gaining scale, improving efficiency, and diversifying fee income become more important than relying on net interest income.
For customers, these trends could translate into greater product segmentation: mid-sized banks competing with specialized offerings (SMEs, consumer lending, or trust services) and large banks strengthening digital ecosystems and bundled, all-in-one packages. For regulators, the challenge will be maintaining consistent prudential standards without slowing innovation, especially as new entrants and data-driven origination models expand. From a macro perspective, loan-book health and credit depth will remain key variables for growth in a country where access to formal financing is still limited for a significant share of businesses and households.
Overall, 2025 made it clear that Mexico’s banking sector is not moving at the same pace: while mid-sized institutions delivered significant profit increases through focused strategies and efficiency, the systemic bloc showed signs of maturation and greater competitive pressure. Looking to 2026, performance will hinge on how margins adjust in a less favorable rate cycle, how delinquencies are contained, and whether banks can sustain technology investment without eroding profitability.
