ESTEPONA, Spain - Mexico can be more flexible in opening its financial sector to foreigners, although it has to be careful not to lose competitive advantage, the president of the country's largest bank said.

"I think we could advance at a quicker pace, especially as U.S. banks are right now focusing more on survival at home than expansion abroad," Roberto Hernandez, president of Banamex-Accival, at a seminar.

The Mexican government presented proposals last month that would allow foreign and local investors to buy up to 30% of a Mexican bank, with limited voting rights.

U.S. banks have long urged a quicker liberalization of the financial sector, but Mexican negotiators at the North American Free Trade Agreement talks have not budged.

"We have to be careful not to give away more than they can give us in return," said Mr. Hernandez when asked how soon Mexico would clear the way for foreign banks to open branch networks there.

He said a franchise in Mexico offered opportunities for universal banking that were not available in the United States and that regulation was complex.

Mr. Hernandez added, however, that Mexico's financial sector was growing at about 20% a year and offered excellent prospects.

He said he did not expect major Mexican banks to open up to foreign investors, but that "very soon we will see intermediate-size banks lining up agreements with foreign partners."

Two years ago, Mr. Hernandez completed the purchase of Banamex, the country's largest bank, for $3.2 billion, the biggest transaction in the government's bank privatization program.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.