Investor Presentaiton
October 12, 2021
GBM
MEXICO'S FUNDAMENTALS: UNDER-PENETRATED MORTGAGE MARKET
Under-penetrated credit market. In our view, the under-penetrated status of Mexico's credit activity offers a huge opportunity for the ceramic tiles industry to keep growing, as an increased credit penetration
(mortgage loans) should boost not only the demand for new housing but also remodeling. Despite the Mexican mortgage market has been steadily improving in the past decades, it is still below other LatAm
economies. One could argue that higher costs and a wide unbanked population have been the issue in Mexico; however, as new players seeking to reach untapped markets enter the industry (Fintechs, etc.) and
competition increases, we could see a higher credit penetration going forward.
Chile provides a great example of a higher penetration (driven by increased competition), as its total loan portfolio (only banks) reaches -80% of GDP, way above Mexico's -23%. However, when adding up the
entire financial system, i.e., including government agencies and other financial entities, Chile's total loans penetration rises to as much as -125%. We are not saying Mexico will move towards that level but rather
arguing that with new players entering the market, the banked population should increase going forward, further boosting home development and remodeling.
Total Loan and Mortgage Penetration in Mexico
-Total loans and mortgages as % of GDP
23.0%
20.7%
Penetration of Mortgage Loans in LatAm Countries
-Mortgages as % of GDP
2.7%
2.1%
2010
3.7%
11.9%
Loans for Home Remodeling in Mexico
-Figures in MXN Billion
29.5
'10-'21e CAGR: 7.5%
18.9
21.9
13.3
الله
1.7
2.1
3.4%
5.5%
6.1%
17.1%
4.3%
7.4%
7.3%
2015
15.9%
12.1%
15.5%
4.3%
3.4%
2.7%
2.2%
1.8%
2020
2010
2015
2020
27.1%
Mortgages as % of GDP
Mexico
Colombia
Peru
Chile
2000
2005
2010
2015
2020
2021e
2005
2000
Total Loans as % of GDP
Mexico's under-penetrated status in terms of credit activity
should be regarded as huge opportunity for further growth in
housing demand and remodelings.
Mexico is still behind some of its LatAm peers in terms of credit
penetration and the entry of new players into the Mexican
market would reduce this gap.
Loans for home remodeling in the country have outpaced the
growth of both the national GDP and the system's total loan
book over the last decade. That said, in light of the country's
housing deficit and growing population, lending activity is
poised to keep expanding going forward.
Source: World Bank, CNBV, SNIIV
LAMOSA/CERAMIC: THE ROAD TO GROWTH IS PAVED WITH TILES. | 11View entire presentation