Letters of Credit with International Banks

The Letters of Credit are an instrument of foreign trade linked to the companies’ commitments, which allow access to a more significant number of markets. Their purpose is to guarantee payment against documents related to the sale of goods or services, as well as the fulfillment of the obligations, agreed between third parties, with a coverage of up to 100%.

As a result of Bancomext's strategy as a provider of this service and the permanent promotion carried out with international banks, at the end of 2020, a balance for this product of 7,641 million pesos was registered, while the placement amounted to 3,161 million pesos, an increase of 12% when compared to 2019.

Currently, there are 95 qualified counterparty risk lines with international banks in 35 countries. These lines involve all operations managed by the Directorate (export and import letters of credit, international factoring). Over 60% of operations related to this product are performed with banks that hold a high prestige, allowing Bancomext to know that its international counterparts will perform.

In short, during the first half of the year, the efforts of the Adjunct General Directorate of Financial Institutions were mainly focused on supporting financial intermediaries in their restructuring and rescheduling of repayments to assist companies with capital and interest payment deferral.

These supports were implemented through the Funding programs for Banking and Non-Banking Financial Intermediaries and National Guarantees, in conjunction with commercial banks, to mitigate the economic damages caused by the pandemic and allow companies to address this situation.

Funding:

The support consisted of the partial or total deferral of principal and/or interest payments, for up to 6 months, corresponding to credit operations discounted or funded with resources from Bancomext and for which the banking and non-banking Financial Intermediaries (Financial Intermediaries) have applied the Special Accounting Criteria applicable to Credit Institutions issued by the CNBV on March 26, 2020, following the COVID-19 outbreak.

Requests for rescheduling and/or restructuring were received through 10 Financial Intermediaries, as follows:

5 Non-Banking Financial Intermediaries with 385 loans for 1,163 million pesos.
5 Banking Financial Intermediaries with 78 loans for 3,667 million pesos.

Guarantees:

The assistance to Financial Intermediaries that would restructure or renew the credits guaranteed by Bancomext was adjusted to the provisions of the Special Accounting Criteria applicable to Credit Institutions issued by the CNBV on March 26, 2020, following the COVID-19 outbreak.

3,642 guaranteed loans were deferred, with a balance as of December of 4,837 million pesos.