Asset Specialization as a Long-Term Strategy for Banks in Mexico

Our objective is to establish whether the level of assets, liabilities, and income diversification Mexican banks related their profitability risk levels. Using financial information 15 key banks, between 2010 2021, along with Herfindahl-Hirschman Index a series polynomial regression analyzes, we calculated each bank. We also computed inflection points suggesting that need adopt an asset specialization long-term strategy, but point because radical transformation would be detrimental both return risk. Similarly, do not recommend venturing into for same reason. On other hand, liability strategy difficult apply achieving mentioned objectives. Furthermore, like emphasize our analysis takes consideration high presence foreign banking affiliates in Mexico.