Tourism
Additionally, the financial reform has strengthened the role of development banking by boosting growth drivers in the country’s strategic sectors, especially in supporting small and medium-sized enterprises. In this area, BANCOMEXT, in partnership with the commercial banking sector, implemented the “Mejora Tu Hotel” (“Improve Your Hotel”) program, announced in April of 2016, which aims to modernize the hotel infrastructure. This program provides assistance to the sector through commercial banks with credits of up to 60 million pesos, at competitive interest rates, maturity periods that allow for adequate growth of investment projects, but for the most part supported by BANCOMEXT. In addition, credits in excess of 60 million pesos rely on BANCOMEXT’s Corporate Banking area as a First-Tier lender.
From its implementation until the end of 2018, a total of 164 First and Second Tier credits have been authorized through the “Mejora Tu Hotel” improvement program for a total of 5.3 billion pesos.
The 2018 first-tier portfolio indicators for the Tourism sector were as follows:
- Within the strategic sectors in BANCOMEXT, the tourism portfolio is the most important, both in total balance and in the number of counterparts in the total private sector loan portfolio.
- This sector’s portfolio benefited 116 companies.
- Resources placement during 2018 amounted to 10.5 billion pesos.
The tourism industry is one of the driving forces that stimulate the world economy, contributing to the development of our country in a direct, indirect and induced way, impacting the value chains and contributing to GDP and employment growth.
Considering the sector’s economic contribution of and its transversality, BANCOMEXT furthered its tourism sector model focused on developing investment projects, relating and identifying powerful investment corridors and competitive tourist poles, as well as destinations where hotel infrastructure is being developed to house business, sun and beach tourism. As a result of this strategy, BANCOMEXT's tourism investment direct loans portfolio integrates projects in 26 states across Mexico.
With the financial support granted by Bancomext, the construction of 1,123 new hotel rooms was completed during 2018, in the states of Baja California Sur, Chiapas, Coahuila, Nuevo León, and Oaxaca, supporting the creation of more than 1,348 direct jobs.
Also, as of December 2018, projects that are in the construction stage, and that will represent more than 2,969 new rooms in 7 states across Mexico, have been supported. It is estimated that hotel rooms under construction will boost the creation of 3,563 permanent long-term direct jobs and more than 8,900 indirect jobs.
Export Maquiladora Industry
(Industrial Infrastructure Development)
The industrial real estate sector has had an outstanding performance in recent years, which is why BANCOMEXT continued offering specialized products for the development of industrial infrastructure in the country, encouraging foreign investment, employment growth and foreign currency revenue.
In terms of industrial infrastructure, Bancomext continued to participate with the Investment and Real Estate Trusts (FIBRAS) with a loan for USD 16 million for the acquisition of a portfolio of 5 industrial units, as well as USD 117 million for refinancing an industrial portfolio of 28 properties in 5 markets, USD 65 million for the acquisition of a portfolio of 37 industrial units and USD 20 million for the acquisition of 9,000 m2 of sustainable offices.
The portfolio indicators at the end of 2018 were as follows:
- In terms of balance, this was the third most important portfolio at the sector level, contributing 27.5 billion pesos to the first-tier private sector portfolio balance, equivalent to 13.9% of the total of Corporate Banking balance.
- The portfolio of this sector generated the third largest contribution to the financial margin plus commissions, for a total of 0.5 billion pesos, equivalent to 13.1% of Bancomext total first-tier income.
- The number of companies benefited was 96, contributing 18.9% to the number of companies directly benefited by Corporate Banking, becoming the second most important sector portfolio.
- Resource placement for granting financial support amounted to 7.6 billion pesos. The sector closed 2018 with a pipeline portfolio of 12.2 billion pesos, with 37 projects under study.
Automotive Industry
Bancomext confirms its support for one of the sectors with the highest participation in the Mexican trade balance, the Automotive and Auto Parts Sector, spreading resources through financing export companies and extending funding to the sector’s value chains, promoting the country’s development.
At the end of 2018, three new loans totaling of USD 85 million stand out in this sector; the first one, to a Group dedicated to the manufacture of steel parts for vehicles to finance liquidity needs, which allows it to remain an important TIER 1 and 2 supplier of the main automotive assembly companies in the country; the second it is a syndicated operation, to finance a leading company in the manufacturing of brakes, suspensions and springs, a TIER 1 and 2 supplier, to support its permanent working capital requirements and improve its debt profile; The third is a loan to a company dedicated to the production, manufacture, assembly, import, export, distribution and commercialization of metal sheets, parts and products, used mainly in the automotive sector, a supplier of car assembly companies, to support its working capital and improve its debt profile.
In this way, Bancomext serves the participants of the automotive value chain at all levels, promoting the development of national suppliers and the growth of the production plant.
Additionally, Bancomext was part of the National Productivity Committee. In compliance with the guidelines defined by the Presidency of the Republic, Bancomext reported, through the matrix of performance indicators, the monthly progress of the 3 initiatives to the main associations in the sector,
with the AMIA: “Mentoring program with a company in the sector”, INA: “Adopt clauses of non-transfer of contracts with suppliers and elimination of said clauses so that suppliers may transfer them to banking institutions and thereby obtain access to credit” and “Adopt factoring and productive chain programs offered by development banking institutions".
On the other hand, it is important to highlight the participation of Bancomext in events organized by the main associations of the AMIA, INA, and Automotive Clusters sectors, in order to promote the support offered by the Institution to companies participating in this productive activity.
The portfolio indicators during the closing of 2018 for this sector were the following:
- The portfolio balance reached 10.6 billion pesos, 5.4% of the total portfolio balance of the first-tier private sector.
- The placement of resources during the period amounted to 18.7 billion pesos, contributing 12.9% to the total placement of Corporate Banking, being the third most important placement within the first-tier loan portfolio.
- The number of companies benefited was 47, representing 9.2% of the total number of companies benefited directly in Corporate Banking.
- This sector generated income by financial margin plus commissions totaling 237 million pesos. The pipeline portfolio closed with 11.8 billion pesos with 31 projects under study.
Energy and Renewable Energy
BANCOMEXT has promoted the energy sector through medium and long-term financing for the development, construction and implementation of projects in the power generation and “Oil & Gas” subsectors.
In this sense and in response to the priority strategies of the Federal Government, during 2018 BANCOMEXT continued to support “clean” energy projects (wind, photovoltaic) to encourage the use of renewable energy sources, contributing to the goals committed by the country. Additionally, BANCOMEXT supported the adoption of technologies that provide greater energy efficiency and savings to the general population.
During this period, Bancomext has authorized loans for 28 projects: 20 photovoltaic, five wind, and two combined cycle thermoelectric plant improvement projects, for a total amount of USD 1,806 million. The projects have operations start date in 2018 and 2019 and will increase the country's generation capability by 7,223 MW (10% of current capacity). The estimated investment for these projects exceeds USD 8,000 million.
In most of the projects, other Development Banks, Multilateral Banking, and Commercial Banking are also participating, encouraging risk-sharing schemes. Additionally, 83% of the capacity of the supported projects corresponds to winning projects in the electric tenders contemplated in the Energy Reform.
The renewable energy projects authorized by Bancomext have a generation capacity of 5,446 MW (4,132 MW photovoltaic and 1,314 wind), which will represent 69% of the installed capacity for 2019 in these technologies.
Various supported projects are located in the State of Coahuila (750 MW capacity) and another in the State of Tamaulipas (424 MW), which will be the largest photovoltaic and wind farms in Latin America. The renewable energy projects, in their construction and operation stages, will have the following socio-environmental impact:
The 2018 results from the main indicators were the following:
- The portfolio of this sector generated an income from financial margin plus commissions of MXN 757 million, placing it as the most important portfolio of the priority sectors for its 16.9% contribution to the total income generated by Corporate Banking.
- The portfolio balance in this sector amounted to 28.5 billion pesos, representing 14.4% of the total first-tier private sector portfolio balance, making it the second most important portfolio of Bancomext sector programs.
- The resources reported during this period amount to 21.1 billion pesos, making it the second most important portfolio of Bancomext sector programs, equivalent to 14.6% of the total financial support for Corporate Banking.
- 60 companies were benefited in this sector, with a pipeline of 28.3 billion pesos and 75 projects under study.
Transportation, Logistics, and Aerospace
In 2018, Bancomext continued its participation in financing the logistics sector, primarily in the various modes of transportation. Bancomext promoted motor transport financing for 2.3 billion pesos through bilateral and syndicated loans with commercial banks, with some of these cases under the Prime Certification program.
In Maritime transport, financing was granted for USD 153.95 million and EUR 25 million, for the acquisition of 3 vessels, in order to support logistics operations (offshore) and transportation of passengers and material.
As for Air transport, financing was granted for USD 138.9 million, to continue supporting the modernization of the 34 aircraft fleet. Likewise, financing was authorized to support a new business plan for a national airline, in order to strengthen its operations and presence and expand its fleet with greater capacity passenger transport equipment, on trunk and regional routes.
In the same period, in the Aeronautical industry, a long-term loan for USD 101.62 million was formalized for the construction and commissioning of an aerospace plant in Hermosillo, Sonora. In the first stage of the project, approximately USD 27 million were disbursed for the construction of the plant, whose objective will be the machining
of high precision components for aircraft turbines with “LEAP” state-of-the-art technology, a new technology with greater fuel consumption efficiency for cutting-edge aircraft, as well as for the renovation of current turbines.
It is important to note that this project represents a direct investment from the collaboration of Mexican and German investors of more than USD 297 million, as well as the creation of at least 300 highly skilled jobs and 500 indirect jobs. This project is emblematic for the consolidation of the aerospace industry in Mexico and will trigger the attraction of investments, the generation of quality jobs, the development of value chains, meeting the demand for local services and benefits in general to the local population.
The portfolio indicators reported at the end of 2018 by this sector were the following:
- The sector presented a portfolio balance of 12.2 billion pesos.
- The sector portfolio generated a contribution to the financial margin plus commissions of 237 million pesos, and 34 companies were benefited in the period.
- The sector closed 2018 with a pipeline portfolio of 16.2 billion pesos, with 29 projects under study.
Telecommunications
During 2018, Bancomext continued to reinforce actions to support companies that provide information technology, communication (including broadband), telecommunications and broadcasting services, aiming to benefit the entire population.
As part of the Telecommunications Reform, the development of the Wholesale Shared Network has been supported to provide the population with broadband, taking advantage of the 700 MHz Band through a Public-Private Partnership. In order to contribute to these actions, Development Banking (BD) provided financial support for the development of the project amounting to 17.7 billion pesos, Bancomext participating with 4.2 billion pesos.
At the end of 2018, coverage for 39.74% of the population was achieved, approximately 44.6 million Mexicans, 10 million of which correspond to communities having less than 10,000 inhabitants. 38 “magical towns” also received coverage (34.2% of the total).
With the aforementioned, better infrastructure in telecommunications services is being provided.
Likewise, as part of its infrastructure expansion plan to achieve a more modern and competitive 4G LTE network throughout the country, a US telecommunications company required financing for 22.9 billien pesos through a syndicated loan, in which Bancomext participated with 8.6%, and which was arranged in the first half of 2018. With this network, companies expect to bring coverage to around 90 million Mexicans with cutting-edge technology.
This funding is supporting foreign investment, promotion of competitiveness in the sector, and better services for the population. At the end of December 2018, this sector reported a portfolio balance of 8.9 billion pesos, a resource spread of 2.6 billion pesos, revenues of 241 million and six companies benefited. The pipeline portfolio closed with 4.1 billion pesos , with seven projects under study.
Electric-Electronic
During the fiscal year 2018, Bancomext continued to support the growth and competitiveness of companies that participate in the electrical and electronics sectors with manufacturing processes, contract manufacturing or services that are part of the export chain. The portfolio of this sector presented a balance of private first-tier portfolio of 7.5 billion pesos, a spread of first-tier resources for MXN 673 million, six companies benefited, and MXN 123 million income from financial margin plus commissions. The sector closed 2018 with a pipeline portfolio of 3.2 billion pesos, with 6 projects under study
Chemical-Pharmaceutical Sector
Bancomext, in its quest to offer a comprehensive proposal for financing support, signed a collaboration agreement with the Chemical Industry (ANIQ) to foster a rapprochement between the Bank and its affiliated companies and the companies incorporated into the supply chain to trigger the activation of their competitiveness for the benefit of the country's economy.
During 2018, Bancomext, together with other financial institutions, approved a syndicated loan for USD 156 million to a group that produces salt, chlorine, caustic soda and refrigerant gases. This company developed a project for the storage of hydrocarbons in salt caverns, in alliance with a French group who contributed the technology. Additionally, the LP gas storage cavern,
with a capacity of 1.8 million barrels, entered into operation, raising the national inventories of this hydrocarbon from 2.5 days to about 9 days, shaping a strategic national project to mitigate risks of country-wide shortages, to establish purchasing logistics and to make use of gas that is currently wasted.
With this financing, the company will be able to develop other projects of this nature.
The portfolio of this sector presented a balance of first-tier private portfolio of MXN 850 million, a spread of first-tier resources for MXN 870 million, one beneficiary company and MXN 18 million income from financial margin plus commissions. The pipeline portfolio closed with 3 billion pesos, with four projects under study.
Mining - Metallurgic
In 2013, BANCOMEXT incorporated the Mining-Metallurgic sector into the strategic sectors of its Business Model, through which first-tier support (credits and guarantees) will be granted, to contribute to long-term sustainable development of the export chain (direct exporters and suppliers) and to the growth of employment in an efficient and competitive way in the Mexican mining-metallurgic sector.
The results obtained at the end of 2018 were: portfolio balance 1.4 billion pesos, placement of MXN 490 million, an income of MXN 29 million and eight companies benefited. The sector closed 2018 with a pipeline portfolio of 3.7 billion pesos, with seven projects under study.
Letters of Credit to Companies
In 2018, Bancomext continued to provide the service of letters of credit to clients having a credit line, as well as to clients of letters of credit guaranteed with a provision of funds. The integral service of letters of credit begins with promotion of the product, specialized advice, structuring of the terms and conditions in each transaction, support for executives in the filling of special formats and in agreements in credit committees, including coordination with internal areas and monitoring to ensure their issuance.
2018 presented a 34% increase in the volume of operations; among these, an energy sector syndicated transaction for USD 72 million. The balance reflected a decrease of 12% with respect to the previous year, caused primarily by reductions, expiration and natural cancellations due to projects compliance. However, the recurrence of steady clients having a credit line contributed to maintaining the balance with lines usage up 1.5 fold. In the case of companies serviced under the scheme of issuance of letters of credit with provision of funds, the volume of operations increased 4.9 times over the previous year.
The results obtained during the year were the following:
- In the area of placement, letters of credit were issued for 383 million pesos.
- The balance reported at the end of December amounted to 8 million pesos.
- The income generated during the period amounted to 8 million pesos.
Regional Directorates
Bancomext’s “Sector-Product-Geography” Business Model involves the participation of Regional Directorates of Corporate Banking as a means to promote and grant financial support to all other sectors of the economy related to foreign trade and the influx of foreign currency.
The results for the Regional Directorates in the indicators are:
- Portfolio balance of 81.3 billion pesos, which represents 41.1% of the first-tier private sector portfolio’s total balance.
- Placement of resources for 50.4 billion pesos, which represents 34.9% of total first-tier placement.
- The contribution to income from financial margin plus commissions amounted to 1.7 billion pesos, which represents 38.4% of total first-tier income.
- 129 companies were benefited, equivalent to 25.3% of the 509 companies benefited in first-tier.
- The portfolio of prospective operations in this sector closed 2018 with 39 billion pesos, with 104 projects under study.
Northeast Regional Directorate
During 2018, the Northeast Regional Directorate continued with the commitment to attract new clients, authorize new credit lines, generate new business with current clients, and promote financial products.
The most relevant operations completed during the period were:
- A MXN 600 million credit granted to a leading Mexican Information Technology company in Mexico, to finance its permanent working capital, derived from the company's growth, resulting from the increase in the portfolio from new clients and diversification of services.
- Participation with up to USD 62.4 million in a syndicated loan for a leading Mexican company in the ceramic tile sector. The destination was the debt refinancing and working capital, in order to maintain its investment plan and operational performance with a debt profile appropriate to its financial strategy.
- A MXN 300 million credit granted to a leading company in the area of manufacture and marketing of agricultural tractors, to meet the company's working capital needs, specifically for the development and launch of a new tractor model, in addition to refinancing the simple credit balance with our Institution.
- A USD 4 million credit granted to a company dedicated to the commercialization of non-ferrous metals, to meet the working capital needs resulting from the company's growth.
- A USD 90 million credit granted to a worldwide leading Mexican company in products derived from Steel Wire, to finance its permanent working capital, derived from its constant growth, modernization and innovation in its plants, resulting its accelerated expansion.
The results of the year were the following:
- The balance of the first-tier private sector portfolio amounted to 35.8 billion pesos.
- The placement of resources amounted to 19.1 billion pesos, allocated to supporting companies in other sectors of the economy.
- The contribution to income from financial margin plus commissions amounted to MXN 607.2 million.
- 58 companies were benefited during this period.
Center Regional Directorate
At the end of 2018, the Center Regional Directorate, through the promotion of institutional products and services, support for prospects and current clients to meet their short and long-term financial needs, showed increased financing to various sectors of the economy such as pharmaceutical, services, entertainment, and manufacturing.
The operations that stand out in this period for supporting the expansion of companies internationally are as follows:
- Simple credit for MXN 700 million to a company in the pharmaceutical sector specializing in high specialty products. This credit will enable inputs payment, investment expenses in research and development, and partially refinancing its liabilities.
- Simple credit for MXN 577 million to a Mexican company, a leader in the storage and distribution of refrigerated and frozen products of the food industry. Support destined to refinancing liabilities and fixed investment in equipment for its production plant, as well as for operations with derivatives.
- Simple credit for MXN 420 million to a global company in children entertainment, operating entertainment centers in Mexico City and Monterrey, with 21 franchises in different countries. The line will contribute to the opening of a new center in the City of Guadalajara.
- Simple credit for MXN 300 million to a leading honey company exporting to Europe, the United States, and Canada. The loan will support the re-profiling of debt and the expansion and increase the capacity of its production plant located in Tepotzotlán.
- Simple credit for MXN 220 million to a company dedicated to the production and marketing of agrochemicals. The support was destined to the refinancing of liabilities, fixed investment, and equipment of its production plant. This will allow it to increase its exports to Central and South America.
The results obtained were the following:
- The balance of the first-tier private sector portfolio was 34.7 billion pesos.
- Placement of resources for 16.6 billion pesos.
- 51 companies benefited at the end of 2018.
- Contribution to the financial margin of the institution of 0.8 billion pesos.
Western Regional Directorate
The Western Regional Directorate, through the promotion and granting of financial support, continued to strengthen Mexican companies belonging to other sectors of the economy, such as agriculture, food, and beverages, commerce, entertainment, service and paper, tools and glass manufacturing.
The relevant operations were:
- Syndicated credit for MXN 900 million to a leading paper and packaging manufacturer in Mexico to finance various projects and their working capital needs.
- Syndicated credit for USD 15 million to finance the working capital needs of a company dedicated to the production of beef in Mexico.
- Credit for 1.5 billion pesos to a Mexican company dedicated to entertainment, to improve its debt profile.
- Credit for 3 billion pesos to improve the debt profile of a commercial credit sales chain store.
The results obtained during the first semester of the year were the following:
- The balance of the first-tier private sector portfolio was 10.8 billion pesos.
- The placement of financial resources amounted to 14.6 billion pesos.
- The contribution to the financial margin plus commissions of the institution amounted to MXN 277 million.
- 20 companies were benefited.
Innovation and Fintech Technology
At the end of 2018, Corporate Banking promoted different initiatives, in compliance with its strategic guidelines and derived from the actions for the design and implementation of new initiatives under current products or improvements to existing first-tier financing products, whose main objective is to attend in a manner Effective financial needs of the business market. The status of said initiatives is as follows:
Innovation and improvements to existing financial products.
Institutionalization and Corporate Governance for Issuance in the Stock Market.
In 2018, the scheme was launched seeking to grant financing to improve the debt profile of companies and make resources available for expansion projects, based on the institutionalization process of their governing bodies. At the end of 2018, 5 lines have been authorized, 3 of them contracted and two pending, in addition to 10 prospects under analysis, two companies were close to obtaining Prime Certification in the first two months of 2019.
New Electronic Factoring Tool (Domestic).
EIn 2018, the electronic factoring platform for suppliers was developed. It incorporates digital processes for customer identification and money laundering prevention, as well as the electronic signature with buyers and suppliers. The platform is in the testing stage. The official launch and the first pilot cases are scheduled for the first quarter of 2019.
Mezzanine credit
At the end of 2018, a conceptual scheme proposal has been developed, in terms of analysis and approach of the business rules that will enable the promotion and creation of a greater offer to support medium and large companies, for their financial liquidity needs, but that require a quasi-capital type credit. It will be presented to the Products Group in the first quarter of 2019.
Sustainable Infrastructure
In 2018, the financing scheme designed to generate sustainable, productive real estate infrastructure was designed and implemented, thereby promoting sustainable building practices to induce a culture that contributes to environmental protection, energy savings and increased productivity, through financing of long-term projects with a sustainability approach. Financing was authorized for 20 Million Dollars and for an alternative to meet the needs of the market. This scheme is complementary to the current Industrial Infrastructure product.
Fintech Technologies and Business
Fintech Bancomext Training.
During 2018, 100 Bancomext employees were trained and prepared 21 Fintech initiatives whose purpose was to improve various bank processes. From this grand total, seven winners were chosen: Fiducia Bancomext, Bancomext Supervision Module, Unique Client Identification File, Comprehensive Responsive Management System, FCI Electronic Affiliation, Resource Disposition System and Credit Fast.
New CAPPITAL App.
Through this app, the aim is to include more people in the world of financial markets. Through cartoons, Cappital allows the user to learn about the different existing investment funds. Additionally, through simulators, the users have the opportunity to test their knowledge with virtual money. Finally, it offers the user the possibility of investing, through the different strategic partners, in preferential conditions.
Bancomext library.
In 2018, two Fintech related books to were developed. The first one, "Fintech in the world, the digital revolution of finance, has arrived in Mexico," seeks to bring young people closer to this new digital revolution. The second one is a study called "Mexico: Fintech Nation” which seeks to explain in-depth the world reality of Fintech, as well as the challenges and opportunities that Mexico has as a country in this new scenario.