Banco del Bajío Reports Q2 and H1 2025 Earnings: Net Income Down Year-Over-Year

Banco del Bajío reported Q2 net income of MXN 2,166 million, down from MXN 2,847 million in the same period last year. For the six months ended June 30, 2025, net income was MXN 4,657 million, compared to MXN 5,626 million in the prior year. The decline in earnings is attributed to a decrease in income from financial activities and a rise in operating expenses.

Banco del Bajío Institución de Banca Múltiple reported a net income of MXN 2,166 million for the second quarter of 2025, down from MXN 2,847 million in the same period last year. For the six months ended June 30, 2025, the bank's net income was MXN 4,657 million, compared to MXN 5,626 million in the prior year. The decline in earnings can be attributed to a decrease in income from financial activities and a rise in operating expenses [1].

The bank's strategic focus on digital transformation and small and medium enterprise (SME) lending has driven operational efficiency and customer engagement. However, the ongoing interest rate declines and regional loan concentration have pressured margins and increased credit risks [2]. Despite these challenges, Banco del Bajío continues to invest in digitalization and branch expansion, positioning itself for growth in commercial lending and operational leverage.

Analysts expect Banco del Bajío's revenue to grow by 7.0% annually over the next three years, with profit margins shrinking from 44.3% to 32.3% during the same period. Earnings are projected to reach MXN 9.3 billion by July 2028, down from MXN 10.4 billion today, with a consensus price target of MXN 57.907 [2]. However, there is disagreement among analysts, with some projecting earnings as high as MXN 10.5 billion and others as low as MXN 46.0.

The bank's future earnings per share growth is expected to be driven by revenue growth, profit margin adjustments, and changes in the number of shares outstanding. Risks include sustained declines in interest rates, deposit competition, regional economic downturns, and lagging digital adoption. Valuation estimates suggest that the bank's current price of MXN 43.17 is undervalued, given the expected earnings growth and profit margins [2].

Banco del Bajío's Q2 net income decline underscores the challenges faced by the bank in the current economic environment. However, its strategic focus on digital transformation and SME lending, coupled with ongoing investments in digitalization and branch expansion, positions the bank for future growth and operational efficiency.

References:
[1] https://www.marketscreener.com/news/popular-s-q2-net-income-revenue-rise-ce7c5cd2da88f724
[2] https://simplywall.st/community/narratives/mx/banks/bmv-bbajio-o/banco-del-bajio-institucion-de-banca-multiple-shares/zocb26w5-digital-channels-and-sme-lending-will-drive-mixed-outcomes