Mexico's three largest lenders have seen their aggregate first-quarter 2022 income rise from a year ago, according to data from S&P Global Market Intelligence.

Combined net profit for Grupo Financiero BBVA México SA de CV, Grupo Financiero Banorte SAB de CV and Grupo Financiero Inbursa SAB de CV increased 40.8% year over year to 34.24 billion pesos from 24.31 billion pesos. BBVA México recorded the highest profit among the three banks with 17.77 billion pesos.

Aggregate operating income for the three banks rose to 87.95 billion pesos from 77.09 billion pesos in the year-ago period, supported by a rise in both net interest income and net fees and commission, which were at 75.27 billion pesos and 12.64 billion pesos, respectively.

These offset expenses totaling 53.57 billion pesos, which increased from the year-ago figure of 52.66 billion pesos. Despite asset write-downs dropping to 11.32 billion pesos from 14.62 billion pesos, operating expenses ticked up to 30.65 billion pesos from 30.45 billion pesos.

The banks' average ratio of nonperforming loans to total loans was down to 1.49% in the third quarter from 1.93% a year ago. However, the ratio ticked up from 1.36% in the linked quarter. In a conference call, Banorte CEO Marcos Ramírez Miguel said the bank's nonperforming loan portfolio has again exceeded their expectations and remained below pre-pandemic levels.

All three banks booked lower loan loss reserves as a portion of gross loans for the third quarter compared to the year-ago period, with Banorte recording the lowest figure at 2.01%.

Meanwhile, the banks' average net interest margin was 5.62%, up from 5.25% a year ago and 5.59% in the last quarter. In a report, banking and securities regulator CNBV said higher interest income, supported by the continued increase in the central bank's benchmark interest rate, as well as lower credit risk reserves given the lessening impact of the COVID-19 pandemic mainly boost profits of major Mexican banks in the first quarter of this year.

Strong first-quarter results also supported the performance of listed banking shares, including those of Banorte and Inbursa, with the latter having the biggest stock gain this year, according to El CEO.

As of May 18, US$1 was equivalent to 20.00 Mexican pesos.