The bank has a very strong balance with a 20.5 percent tier one capital ratio, and its loan loss reserves cover 5.4 times the non performing loans. The strength is reflected in the BBB rating that Standard & Poor’s has given Inbursa – the highest rating in Mexico.
Low operating costs is a key principle for Inbursa with an efficiency ratio of 40 percent – comparing positively to a market average of 74 percent – which translates into higher profitability, flexibility and more competitive products to its more than eight million clients.
Inbursa’s management structure is very lean in order to be as close as possible to its clients, allowing the institution to have a very fast decision process. The main benefits for its clients are the quality of service and the quick response to their needs.
Business services
Commercial lending has been a core business for Inbursa, providing financing solutions to large corporations as well as to small and medium enterprises. The loan portfolio has grown consistently during the last 16 years at a yearly compound average growth rate of 33 percent, reaching the equivalent of $15bn in 2010.
This gives Inbursa a 14 percent market share in Mexico. The majority of its portfolio is denominated in Mexican pesos, and 26 percent is denominated in US dollars; 18 percent of the total portfolio has been lent outside of Mexico.
Inbursa’s loan portfolio is highly diversified with exposure in some of the most dynamic sectors of the Mexican economy, including infrastructure and real estate related projects that demand long term competitive funding, both in pesos and in dollars.
Retail banking
Inbursa’s clients find a tailor-made solution to their financial needs, as Inbursa is able to provide them with loans ranging from very short term working capital needs up to complex, long term structured deals, as well as all a range of products related to cash management, foreign exchange, treasury, investments, leasing and hedging, among others.
Innovation is always in Inbursa’s strategy. A good example has been the development of a deposits product that provides all the transactional capabilities of a chequing account, while at the same time paying a competitive interest rate that compares more to competitors’ fixed income funds than chequing accounts.
Retail banking represents an important growth opportunity for Inbursa, so in 2008 a strategic alliance was reached with Criteria, a subsidiary of La Caixa de Barcelona, which acquired 20 percent of GFI shares through an equity increase. La Caixa is the largest retail bank in Spain, with more than 5,500 branches and close to 11 million clients. Their expertise in the retail business has contributed to accelerate the growth of Inbursa in this market.
In terms of branches, Inbursa has grown from the 98 it operated at the end of 2008 to 271 at the end of 2010 – 173 new openings in two years. With branches in major cities throughout Mexico, Inbursa has a strong presence for supporting the transactional banking needs of its more than eight million clients around the country.
In terms of lending, Inbursa developed a parametric product for selected SMEs that has benefited more than 32,600 companies as of the end of 2010, providing financing where liquidity and availability of funds had previously been very restricted.
Diversification
In June 2010, Banco Inbursa concluded the acquisition of an auto loan portfolio of approximately $500m with around 62,000 clients, from Chrysler Financial Services Mexico (CFSM). With this transaction Inbursa also acquired 100 percent of CFSM shares. With this acquisition Inbursa strengthens its participation in the automobile sector in Mexico – both in credit and insurance – and has a solid platform for future growth in the retail sector.
Since 1965, Inbursa has been an active participant in the financial markets through its different subsidiaries, reaching a portfolio of $92.3bn assets under management.
Among the funds managed by Inbursa, Fondo Inbursa, an equity mutual fund, has generated a compound annual average growth rate of 20.44 percent in dollars, over the last 30 years (up to March 2011).
Through its continued growth and consolidation, Inbursa is one of the most solid financial institutions in the world. It is now in an outstanding position to meet the current challenges, having taken advantage of opportunities to continue growing in operating efficiency and profitability. Today it offers an attractive alternative for its customers and while simultaneously contributing to the impressive economic development of Mexico.
