The financial crisis suffered by Unifin does not put the financial stability of the country at risk, although it is expected that there will be an impact on the smaller financial institutions.
“Unifin’s restructuring and cessation of principal and interest payments will negatively affect Mexico’s smaller financial institutions, whose liquidity profiles and funding sources are under pressure from global volatility and investors who are wary of non-bank financial institutions in Mexico. Mexico,” the risk rating agency Moody’s highlighted in a report this Friday.
Moody’s mentioned that the Unifin case is the third event of default in the last three years, after the default in this year and in 2021.
According to the rating agency, the breaches of these firms evidenced weaknesses in the non-regulated institutions segment, in addition to showing weak corporate governance compared to traditional banking.
“Unifin’s default will not affect the financial stability of the country because the participation of non-bank financial institutions represents less than 5% of the entire system until last June,” Moody’s detailed.
Despite this, 18 banks were exposed to Unifin through secured and unsecured loan products amounting to more than 1,000 million pesos.