Most Mexican banks have enough capital in stress tests: central bank

Mexico's banking system maintains reasonable capital levels when subject to adverse scenarios in recent stress tests, the central bank said on Monday, but added that some institutions could show capital deficiencies under certain conditions.

In an annual report, the central bank said that the economy and financial system are facing a challenging environment which could affect growth and the exchange rate.

While the central bank emphasized that Mexican banks have adhered to strict international capital requirements, it also urged caution among lenders, highlighting the financial system's exposure to risk.

"It is of paramount importance that credit institutions that operate in the country carefully assess their capacity for growth and maintain high origination standards, particularly in an environment of high volatility and moderate economic growth," the report said.

"Although in some contemplated scenarios certain institutions analyzed could suffer from a lack of capital, the overall system would remain solvent," it also said.

Jaime González, president of Mexico's National Bank and Securities Commission (CNBV), said in an interview earlier this month that the stress test results revealed four or five banks needed to boost their capital buffers, but declined to name them, adding that the gap was not serious.

In November, Reuters reported that Mexican banking regulators had been performing extraordinary daily checks on the health of banks and brokerages since Donald Trump clinched the U.S. presidential election.

Mexico's peso took its biggest two-day tumble in more than 20 years following the surprise win for Trump, who has vowed to rework or scrap a regional free trade agreement and said he will make Mexico pay for a wall on the U.S. southern border.

Before the U.S. election, Mexico's financial authorities ordered the country's banks to conduct stress tests to assess the potential macroeconomic impact and volatility resulting from a Trump victory, in addition to a normal annual stress test.