The purchase is in line with Banco Inbursa’s 2015 acquisition of the financial business of Banco Walmart de México.
Mexican Banco Inbursa plans to consolidate its car finance service with an 80% acquisition of Cetelem México, a subsidiary of BNP Paribas.
The purchase, subject to an employee-representative agreement and the approval of relevant financial authorities, would provide the bank with more than 227,000 new clients and a $2.8 billion credit portfolio.
The deal represents “an important opportunity to continue growing Banco Inbursa’s consumer portfolio,” noted Javier Foncerrada, CEO of the Inbursa financial group.
“Grupo Financiero Inbursa will strengthen the local development of Cetelem México, a leading player in the Mexican automotive financing market ... and will support its growth plans,” company officials added, in a filing with the Mexican Stock Exchange (BMV).
More than half of light vehicles in Mexico are purchased with finance, and roughly 75% of these loans are granted by auto finance companies. Banks represent about 21% of these loans.
According to a Fitch Ratings report, 80% of Cetelem’s gross loans represent 8.5% of Banco Inbursa’s total assets. As of the second quarter of 2023, it is 3.9% of the bank’s total capital and 12.5% of its total cash.
As such, the acquisition would not impact Banco Inbursa’s ratings in the short term, added the ratings agency. However, the bank has not disclosed the size of the transaction.
The purchase is in line with Banco Inbursa’s 2015 acquisition of the financial business of Banco Walmart de México for 3.6 billion pesos (approximately $210 million) and its 2021 purchase of Peugeot Finance México, which expanded its commercial relationship with multinational automobile manufacturer Stellantis in the country.
Automobile production remains a staple of Mexican president Andres Lopéz Obrador’s economic policy. In March, a $10 billion agreement with Tesla to build “the biggest electric vehicle plant in the world” in Nuevo León was confirmed.
Other carmakers, such as Ford, BMW, GM and Jetour, are repurposing or opening new facilities in Mexico. In July, auto production increased by 13.22% to 294,350 vehicles, and exports rose 31.21% to 275,765 vehicles.