Moody’s: Mexican banking system to negative

Moody's Investors Service said it changed its outlook for Mexico’s banking system to negative from stable on expectation that asset risk will rise as banks continue to grow their loan books even as economic growth remains muted.

In addition, the government's fiscal pressures may eventually reduce its capacity to support the country's banks during times of stress, the agency said in a report.

In Moody's view, the combination of low oil prices, rising interest rates, the sharp depreciation of the peso and lower-than-expected growth in the U.S., Mexico's main trading partner, have undermined expectations for improved economic performance and shifted the balance of risks and opportunities for the banking sector to the downside.

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