Shares of banks listed on the Mexican Stock Exchange (BMV) fell sharply because the Morena bill prohibited commission collection on some of its services.
This panic caused a loss of 82,124 million pesos in market capitalization of five banks listed on the local stock market, including Banorte, Santander, Banco del Bajío, Inbursa and Regional (formerly Banregio).
"The market overreacts to the news, not because the news is not important, but because there is a long way to implement it. In fact, it will not have a significant impact on the bank's operating income on the stock market because it tries to set up very specific commissions so many banks no longer charge, "said Signum Research analyst Manuel González.
Banorte, which weighs 12.96% in the main BMV index, is the biggest drop. Its shares lost 11.90% at the price of 106.94 pesos per unit compared to 121.39 pesos from the previous closing. With this fall, the capitalization value decreased 41,666 million pesos.
Analysts said this was the worst loss since the 2008 financial crisis.
Inbursa, Carlos Slim's financial arm, was the second most affected bank, with a loss of 10.08%, at 25.52 pesos per unit. Santander ended with a drastic decrease of 8.12 percent. This story is told the same for Regional and Banco del Bajío, which fell 7.32% and 6.98%, in that order.
Reported by the same negative sentiment from the market, shares from other financial groups on the Stock Exchange, such as Gentera, Crédito Real and Unifin, fell sharply, by 10.23%, 7.33% and 3.15 respectively.
Analysts explain that if the proposal is approved, the bank's income and profits will decrease and, consequently, must make adjustments to other products or services to compensate for "losses".
"This means moving important income to the bank (to) compensate for lost income, the interest rates on the loans they provide will increase, making them more expensive," explained independent trader Érick Arámbula.
The initiative, embodied in a document, was revealed by the feeling of "alarming and excessive persecution" by the banking commission that affected the population of Mexico. In fact, it shows that last year, the cost for this concept was 108,000 million pesos, 8% more than in 2016.
The National Regeneration Movement (Morena) initiative proposes to ban banks from charging 12 commissions, such as annuities on credit cards, checking balances in the cashier's window, withdrawing cash at their own ATMs, issuing additional account reports and replacing cards for theft or loss.
On the other hand, analysts at Banco Ve por Más, Marisol Huerta, pointed out that some of the commissions they wanted to eliminate were no longer charged by certain banks, without determining which one.
He pointed out that this was only a legal initiative that still needed to be submitted for approval and did not rule out the banking sector taking any action.
"Until the initiative is approved, the real impact for the bank cannot be determined," he said.
Georges Hatcherian, an analyst at Moody's, said the initiative was negative for the effects of bank credit, because it would affect their profitability, because commissions represented around 17% of their net income.
"This proposal also results in uncertainty about the direction the new government will take in Mexico due to the independence of the central bank, because it confirms that actions taken by Banxico to regulate commissions are insufficient. The cornerstone of Mexico's macroeconomic and financial stability over the past two decades is the presence of central banks independent, "he said.
Legislators said in the afternoon that they would review proposals with the sector, including the forthcoming Minister of Finance, Carlos Urzúa, commenting that the decision would not be made lightly. However, losses for investors are in the market.