Banks Profit at the Expense of Undermining Economic Growth

ByArturo Huerta González

This column by Arturo Huerta González originally appeared in the March 24, 2026 issue of La Jornada de Oriente, the Puebla edition of La Jornada, Mexico’s premier left wing daily newspaper. The views expressed in this article are the authors’ own and do not necessarily reflect those of Mexico Solidarity Media or the Mexico Solidarity Project.

On March 19, 2026, at the 89th Banking Convention, the Governor of the Bank of Mexico (Banxico) stated that, “despite the complex external environment [referring to the Middle East war], Mexico has a solid financial system and a foundation of stability that allows it to face risks and support economic growth,” reflecting an optimistic stance. However, neither high interest rates, exchange rate stability, high bank profits, nor prevailing budget cuts will prevent the rise in international gasoline, gas, and fertilizer prices from impacting the national economy. Mexico will see increased prices for all its imports, and lacking both the productive capacity and the economic policy management necessary to advance import substitution to confront these external shocks, the greater economic dynamism expected by attendees of the Banking Convention will not materialize. On the contrary, the recessionary and inflationary context will intensify, exacerbating current problems.

The President of the Mexican Banking Association, speaking at the event, stated that “in 2025, private banks as a whole earned profits of 300 billion pesos, representing approximately 1% of GDP.” It should be noted that these profits exceeded GDP growth that year by 0.8%. This implies that these profits were generated by high bank interest rates, which reduced the spending and investment capacity of the government, businesses, and heavily indebted households. Despite this, the president claimed that the banking sector drives economic activity. If this were true, economic growth would be significantly higher than the average annual growth rate of 0.8% recorded from 2018 to 2025.

The president of the bankers’ association said that “insecurity …is one of the main reasons why the economy isn’t growing at adequate levels.” He’s wrong in his diagnosis. If there is insecurity, it’s precisely because of the unemployment and poverty caused by the lack of growth and job creation the country is facing, and the banking sector bears a great deal of responsibility for this, due to the high interest rates and fees it charges on loans.

The banking sector is optimistic about growth in 2026 and that there will be positive results in the USMCA negotiations. They haven’t taken into account that the US wants to buy more from them and sell less to them in order to reduce its trade deficit with Mexico. They’re after oil, the electricity industry, and rare earth minerals, and Mexico, in its attempt to maintain the USMCA, will end up subservient to them, and we will lose out.

In response to the bankers’ leader’s concern that “many people live below the poverty line, ” he said that “for us, the most important mission is to work on financial inclusion.” He believes that this would reduce poverty. However, financial inclusion only benefits the banks and does not translate into greater job creation and higher wages to reduce poverty.

Bankers indicated they are ready to “increase credit as a proportion of GDP to 45 percent by 2030” and that they have “a very clear mission to boost the country’s economic growth.” It should be noted that this expansion of credit will not occur without growth conditions that guarantee loan repayment, and there are no prospects that, with current economic policies, the economy will grow enough to lead businesses to demand loans and banks to offer them. Given the low economic growth and the uncertainty surrounding the USMCA, as well as the consequences of the war in the Middle East, there are no investment decisions, nor is there any demand for or supply of credit.

At the event, the Finance Secretary stated that Mexico has a solid economic foundation despite international uncertainty and that the economy will grow between 1.8 and 2.8%, adding that “one of the pillars of the economy’s strength has been the responsible management of public finances, which allows the main international rating agencies to maintain the country’s investment grade debt rating.” It appears that public finances are being managed responsibly by rating agencies, which are agents of the international financial sector, while public finances are not being used responsibly to promote economic growth and employment.

Mexico lacks the productive conditions and economic policy management necessary to resume growth or to cope with the negative impacts resulting from the rise in international prices of gasoline, gas, fertilizers, and food; therefore, the economy will not grow as the government expects .