Fitch: No Impact on Ratings of Financial Parents of Mexican Afores after Monopolistic Fines

5/10/2017 Reuters

fitchPotential effects on the rated parents of the Mexican pension fund managers (Afores, as per its Spanish acronym) recently fined by the regulator related to monopolistic practices are not significant, since these fines are unlikely to materially weaken the parents’ relatively strong financial profiles, says Fitch Ratings. On May 4, after an investigation initiated in 2015, the Mexican Anti-trust Commission (COFECE) announced sanctions totalling MXN1.1 billion on four Afores as well as 11 individuals based on monopolistic practices. They were accused of intending to reduce the number of transfers among Afores. As of today, Afore XXI Banorte is the only entity that has disclosed the amount of the sanction, approximately MXN429 million initially which was reduced to nearly MXN300 million, which the company intends to dispute through legal remedies. Fitch has estimated an approximate amount of the fines, and the assessment of the potential implications is based on such estimates. Three out of four fined Afores are subsidiaries of Fitch’s rated holding companies: Grupo Financiero Banorte, S.A.B. de C.V. (Afore XXI Banorte), Grupo Profuturo, S.A.B. de C.V. (Profuturo GNP Afore) and SURA Asset Management, S.A. (Afore SURA). Current ratings of the parent companies are listed at the end of this press release.

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