What trends are you noticing in the rent sector?
LEONARDO ARANA DE LA GARZA It has been difficult to break the “old school" perceptions among bankers but we are well prepared; in fact, most newer buildings are aimed at millennials: smaller, more convenient apartments with one or two bedrooms. That is different from what we used to have in Mexico. The trend of large kitchens and multiple bedrooms has changed, and banks are changing their financing schemes. The rent schemes we have launched have been extremely successful, which tells us that people will use credit in a different way. Approximately 30% of the people who will vote in July 2018 are millennials. It is important to look at what they want and how they behave
JESÚS ALBERTO CANO VÉLEZ Mexico City is full of people who do not have a stable income or are not eligible for normal credit. We want to be able to provide this segment with a form of assistance so they can rent a new apartment. We want to partner with the government to help us achieve this project, especially for the elderly. We have been studying cases in Washington, DC, where the government helped provide homes for older citizens. There are diverse solutions but no one clear solution because all problems are different, especially throughout Mexican geography and demographics.
How has issuing stock certificates given BIM added flexibility?
LAG It has helped us significantly in different ways. For the first time, capital markets and investors know BIM as an institution. We have only been in the market for four years as a bank, though we have had a real estate and mortgage operation for years, and the group of owners at this bank have extensive experience in that regard. When we issued the certificates in October 2017, they were oversold, and we took that as a positive sign. Now, we have started to send a great deal of information into the stock market that has raised awareness and helped us significantly, especially in terms of the lines of credit that we receive from different banks for financing our other lines of business. We have been extremely successful in forming a global relationship with our customers by setting up fiduciary areas that give advice and having all the investment products ready for our customers.
What is your outlook for the Mexican housing sector?
JACV The sector has been consistently growing for the past few years. Today, it represents 11% of the GDP, which is relatively small compared to the size of the economy and other countries, such as Chile where it is 20%. However, employment growth and the formalization of employment in Mexico have helped the housing sector. In the past five years the government has created about 8 million stable, permanent jobs. People can now be part of the social security system and be eligible for services that we, as a public institution, can provide. The demand for housing is so great that we provide about 600,000 mortgages a year. Of those, about 450,000 are new constructions. Until 2025, we can double the percentage of real estate's contribution to the GDP. We want to cover the gap between housing supply and demand in the near future.
What are your priorities and goals for the years to come?
LAG The commercial segment is exciting for us. It is similar to what we do already, and most of our customers are doing developments that are small commercial centers within their lines of business. The hotel industry is also growing in Mexico, and we see many opportunities. We have been in talks with the Ministry of Tourism and starting to meet to define certain areas of the country where developers may need financing. Another area I am enthusiastic about is warehouses. With the funding that we are getting from new sources such as the credit lines and capital markets, we see new activity in the value chain in terms of the suppliers. Looking at the population of Mexico, it is clear that a great deal of new business in real estate is coming.
JACV 2018 is the end of this administration, which includes us. Therefore, the goal for 2018 is to turn into a consolidated and strong bank in terms of growth. We have become market leaders and we want to consolidate our growth and make sure it continues. Another objective is to consolidate one of the main initiatives that we have poured a great deal of resources into: credit for renting homes. We are the only Mexican bank that acts in this rental market. Around 16% of housing in our country is based on rent; in expensive areas such as Polanco, it is over 35%. Because of this demand, we want to ensure this market is properly utilized.