Mexico must maximize the nearshoring opportunity: HSBC Mexico

“To do that you need an additional effort and more focused on security, you need to invest in infrastructure and that infrastructure is electricity generation, clean electricity, you need water, you need the logistics part such as roads or ports,” he says in an interview with Expansion on the occasion of the 87 Banking Convention.

Arce highlights that Mexico is in a period of transformation that requires infrastructure that allows it to continue growing in the coming years, since what it currently has “is not enough.”

He recognizes that López Obrador's six-year term has been characterized by “investing a lot”, but considers that this investment has to be extended to “different things”, mainly clean energy, which has the capacity to provide positive investment returns for the country.

In addition, it is necessary to invest in human capital. “We need to invest more in upper secondary education, it is something that is missing, and we need to invest in health because the country is growing but we have to have the human, technological and operational capacity,” he highlights.

Environmental criteria or ESG, as they are also known, have reached companies. From wholesale banking – which are the large companies that HSBC serves – clients are asking for specialized financing to transform their business operations towards sustainability.

“Our clients require and are asking for specialized financing to build the transformation because for the consumer this is important,” he points out.

Arce points out that the current administration focused its efforts on the social part, especially on the resources of the population with scholarships, dispersion of social programs and the elimination of outsourcing.

Consumption as a credit trigger

HSBC Mexico is the sixth largest bank in the country by amount of credit granted. At the end of 2023, the bank had borrowed 468,773 million pesos, which represents almost 7% of the total that banks lend.

This growth was boosted thanks to the country's economic conditions, such as employment growth, the export of agricultural products and manufacturing, as well as the tourist attraction.

“Mexico has grown by leaps and bounds: we see more use of credit and means of payment. Mexico has benefited from an increase in wages, not only because it was decided to raise the minimum wage but also because the demand of Mexican workers has increased,” Arce stands out.

Both the increase in the minimum wage and the record arrival of remittances have helped the growth in credit demand.

Regarding the increase in competition with the arrival of fintech and Sofomes, HSBC considers that competition is good, although it suggests “being careful” that these institutions do not use regulatory shortcuts.

“You have to make sure that they do not use regulatory shortcuts to provide banking services because that has a regulatory risk and confuses the client. So, we have to have a level playing field in regulatory terms for the benefit of the client,” he points out.

Going forward, the bank will continue to rely on massive events to continue issuing credit cards. In 2024, the pre-sale of concerts with 8 artists and 44 events is planned.

No worries about presidential election in the United States

2024 is going to be the year in which Mexico and the United States go to the polls to elect a president and in the northern country, Republican Donald Trump is the virtual candidate to run for president.

For HSBC, the bank hopes that despite Trump's protectionist stance, the relationship with Mexico will remain on a positive path.

“We are the most important trading partner of the United States: no one sells more to the United States than us but no one buys more from it; we have a fairly balanced trade relationship with them,” he points out.

HSBC data:

Year of creation: 1941

Profits in 2023: 7,989 million pesos

Credit portfolio: 468,773 million pesos