BBVA warns of tougher times ahead in Mexico after peso hit

2/1/2017 Reuters

BBVA warned of a tougher business environment in Mexico this year while the Spanish bank’s largest market adapts to the policies of U.S. President Donald Trump.

A 14 percent fall in the peso over the past year, on concerns Trump could rip up a free trade deal with his southern neighbor, contributed to a drop of nearly 30 percent in fourth-quarter profit at BBVA on Wednesday.

Almost half the profits at Spain’s second largest bank are from Mexico, which has offset recent weakness at home for BBVA.

CEO Carlos Torres Vila said BBVA’s underlying growth in Mexico should remain strong through 2017, but forecast lower economic growth and uncertainties resulting from the new U.S. administration would negatively affect its business.

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