“Mexican banks are undergoing an inflection point in credit demand with system-wide loan growth rebounding to 14.0% in August 2015, from a trough of 8.2% in October 2014. Based on our coverage of Mexican large banks, we forecast loan growth 15.1% yoy in 3Q15 (versus 14.2% in 2Q15), positive trends for NIM, mixed trends for opex and better NPLs, culminating in a 5.7% qoq increase in aggregated net income. For SME finance, we estimate group net income to increase 8.1%qoq in 3Q15 however, ROE should decrease -34 bps qoq to 20.8%,” said UBS in a note out Tuesday posted by Dimitra DeFotis of Barron’s.

Ongoing weakness in Brazilian and Mexican banks would be a drag on ILF because the $517.9 million ETF allocates over 80% of its combined weight to Brazil and Mexico. Additionally, financial services stocks are ILF’s largest sector allocation at a weight of 29.1%.

iShares Latin America 40 ETF