Banbajío Earnings Plummet Amid Economic Headwinds

Bank revises annual forecasts down significantly

Banco del Bajío (Banbajío) has reported its most challenging financial quarter since the onset of the COVID-19 pandemic, forcing a downward revision of its full-year financial projections for both its credit portfolio and net profit.

Earnings Shrink as Delinquency Rises

The financial institution experienced a substantial contraction in earnings, with profits falling 23.9% in the second quarter, amounting to 2,166 million pesos. This marks the fourth consecutive quarter of decline and the worst performance in 18 periods, exacerbated by low interest rates and increased operational expenses.

Overall net profit also saw a year-over-year decrease of 17.2%, reaching 4,657 million pesos. The bank’s financial margin before provisions for credit risk declined by 5.4% compared to the same period in 2024, while non-financial income dropped by 19.1% annually.

“The results of Banco del Bajío were weak, given a slowdown in their credit portfolio; increase in delinquency rate, added to the effect of a lower interest rate that reduced their financial income, and contraction in non-financial income, the margin decreased.”

—VE Analysts

Analysts Downgrade Projections

Following the disappointing results, analysts have revised Banbajío’s annual guidance. Projections for credit portfolio growth have been lowered from an expected 8-11% to a narrower 5-6% range. Furthermore, the anticipated net profit is now forecast to contract between 20.5% and 17.7%, a significant downgrade from the previous estimate of a 13% to 8.3% fall.

The bank’s key performance indicators have also deteriorated. The Return on Equity (ROE) dropped from 26.85% to 18.65% year-over-year, and the Return on Assets (ROA) decreased from 3.24% to 2.32%.

Industry Struggles with Interest Rate Environment

Banbajío’s performance mirrors broader challenges within the financial sector, as many banks grapple with the impact of the central bank’s interest rate decisions and a slower economic outlook. The reduced interest rates, while intended to stimulate economic activity, have compressed banks’ net interest margins.

For context, the average prime lending rate in Mexico stood at 11.75% as of late July 2025, a decrease from earlier in the year, impacting bank profitability (Source: Bank of Mexico).

Leadership Faces Critical Juncture

The current financial climate presents a significant challenge for Salvador Oñate Barrón, President of the Council, as he navigates the bank through this complex period, less than two years after assuming the leadership role.