Mexico's T-MEC Uncertainty Shortens Business Loan Terms, Banorte Says

Uncertainty surrounding the future of the T-MEC trade agreement is prompting Mexican businesses to request loans with shorter maturities, according to Mexican bank Banorte. However, the bank anticipates that increased clarity in ongoing negotiations could stimulate financing in the latter half of 2026.

José Marcos Ramírez Miguel, CEO of Grupo Financiero Banorte, stated that while demand for credit has not ceased, companies are hesitant to commit to long-term obligations. He suggested that businesses might expand their financial planning horizons once the trade review progresses. "We are having shorter terms than longer terms because of the situation (the T-MEC review). It's not that it looks bad, but it could look better," Ramírez Miguel said during a conference presenting the bank's second-quarter results for 2026.

Banorte forecasts a slight acceleration in financing as Mexico and the United States resolve outstanding issues, enabling companies to regain visibility for investments and longer-term debt. Alejandro Padilla, the firm's chief economist, noted that annual reviews keep the T-MEC active for 10 years and could serve as a transition to a potential 16-year extension, a scenario deemed beneficial for all three partners.

The bank highlighted that regional integration would enhance North America's competitiveness against China. Key issues in the T-MEC review include rules of origin, the automotive sector, and U.S. tariffs under sections 122 and 232, which also impact steel and aluminum. Padilla estimated that the review could facilitate a gradual substitution of Asian imports, given that Mexico exports between $8 billion and $9 billion annually to China but imports approximately $120 billion.

Banorte maintained its 1.4% growth forecast for the Mexican economy in 2026. The bank estimates that the gross domestic product grew by 1.3% quarter-on-quarter between April and June, following a 0.6% contraction in the first quarter. Projections indicate year-on-year increases between 1.2% and 2.2% in the second half of the year. The primary risk identified by the firm is a more intense slowdown in the global economy, although Mexican exports saw a growth of over 20% from January to May.

In its quarterly results, Banorte reported a net profit of 15.55 billion pesos (approximately $889 million), a 6% year-on-year increase. Its outstanding loan portfolio grew by 8% to 1.27 trillion pesos (about $72.75 billion), with consumer financing up 10%. Auto loans increased by 26%, payroll loans by 14%, credit cards by 12%, and mortgages by 5%.