...Sustained Loan Growth: Loan growth has been sustained in recent years under relatively unfavorable economic conditions. Gross loans returned to double-digit levels during 2015, as previously expected by Fitch Ratings. Lending to the private sector grew a healthy 14.7% over the past 12 months (as of Sept. 30, 2015). Lending activity is expected to continue to expand in 2016 at a similar pace (12%-14%), partially driven by the still-low level of financial intermediation in the country and some opportunities arising from structural reforms. Mixed Effects from Rising Rates: The start of interest rate increases by the U.S. Fed is imminent, with a move expected before year-end 2015 (YE15) or during first-quarter 2016, although the pace and magnitude remain uncertain. The increase will most likely impact the Mexican central bank's interest rate decisions, which Fitch expects will translate into wider net interest margins (NIMs) and, only progressively, improved profitability. But the risks related...
