Mexico banks lend more in May, consumer credit slow

MEXICO CITY, June 23 Wed Jun 23, 2010 5:35pm EDT

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MEXICO CITY, June 23 (Reuters) - Mexican banks lent slightly more in May than in April reflecting slow growth in internal demand as the country emerges from a recession.

Overall lending was up 1.89 percent in May from April, and credit to businesses expanded 1.80 percent, the National Bank and Securities Commission said in a statement on Wednesday.

Consumer lending, including non-performing loans, edged up 0.11 percent in the month, the commission said.

Mexico's banking industry is led by Spanish heavyweights BBVA (BBVA.MC) and Santander (SAN.MC) as well as Citigroup (C.N) and HSBC (HSBA.L).

Mexico's banks slashed lending to consumers in 2008 and 2009 as a slumping economy, widespread layoffs and generous credit card promotions led to a surge in defaults.

Non-performing consumer loans in May crept up to 5.87 percent of total consumer loans, interrupting a downward trend for much of this year that saw bad consumer debts drop to 5.81 percent a month earlier.

Consumer confidence MXCONC=ECI in Mexico remains sluggish even as an export-driven recovery is expected to boost growth this year to by as much as 5 percent.

Last year, Mexico's economy contracted 6.5 percent in its deepest slump since the 1930s. (Reporting by Sean Mattson, editing by Leslie Gevirtz)

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