The COVID-19 pandemic has affected the financial restructuring processes, payment suspension, bankruptcy proceedings and even definite company closures in Mexico and the world.
The solvency of the banks can be measured through the capitalization index (ICAP) able to reflect the financial solvency of each institution. The rescue events and crisis in financial institutions force institutions to have solid ICAPs. The financial institutions insolvency presents additional impacts given that the savings deposits make up the input for the credit operations.
According to BBVA, 300 thousand companies have closed since the beginning of the pandemic, with the SMEs suffering the greatest losses. On a daily basis, businessmen face the decision of continuing with their operations or closing them definitely, intensifying the search for legal alternatives that can help them brave this situation.
The access capacity for debt markets and financing will be decisive in the continuity of Mexican companies. In the future, viability will be subject to the stabilization of COVID-19 cases, the rating of rating agencies and the level of economic recovery. However, we need to monitor the portfolio quality, credit gaps and ICAP indicators to be able to anticipate potential future impacts in the stability of the financial system. Also, the companies with business issues will have to evaluate their survival alternatives, reviewing their business models and their capacity to generate cash moving forward.
(PDF Article Only Available in Spanish)