Mexico banks suffer higher defaults in October

MEXICO CITY, Nov 27 (Reuters) - Mexican banks' non-performing loans rose to 3.31 percent of their portfolios in October, as more consumers and businesses defaulted, the country's bank regulator said on Thursday.

Defaults on bank lending in Mexico have increased this year after a wave of pre-approved credit card offers and personal loan promotions to consumers with minimal banking experience.

Non-performing loans at Mexican banks at the end of September were 3.03 percent.

Mexico's banks, led by international players like Citigroup (C.N), Santander (SAN.MC) and HSBC (HSBA.L), have toned down lending growth to reduce their non-performing loans and minimize fallout from the global credit debacle.

Total credit outstanding was 1.9 trillion pesos ($144 billion) in October, up 2.41 percent from September, the National Banking and Securities Commision said in a statement.

Consumer lending fell 0.37 percent from September.

Mexico's banks are considered well-capitalized. They have not loaned to subprime niches and have avoided many problems plaguing financial groups in the United States and Europe.

But defaults are expected to rise over the coming months as the financial crisis cripples economic growth.

Non-performing consumer credit rose to 8.10 percent of total in October from 7.69 percent at the end of September, the commission said. Of that, defaults on credit card debt rose to 9.91 percent from 9.41 percent the month before.

Non-performing business credits in October rose to 1.56 percent from 1.09 percent in September.

Total deposits were up 9.18 percent in October to 2.3 trillion pesos. ($1 = 13.20 pesos) (Reporting by Noel Randewich; Editing by David Gregorio)