The Hanks, one of Mexico’s most politically influential and controversial families, are set to further consolidate their power. On the 25th of October 2017, Banorte and Grupo Financiero Interacciones – two banks presided over by Carlos Hank Rhon and his son, Carlos Hank González – announced a merger that would create the country’s second largest financial institution. Members of the Hank family have frequently been accused, but not convicted, of involvement in serious organised crime, fuelling allegations of impunity. In recent years, Banorte and Interacciones have become major creditors to the Mexican government, securing economic power as well as political leverage for the Hanks.


  • Provided the merger is approved by regulators, the Hank family will entrench its already extensive influence: Banorte and Interacciones hold almost 40% of the Mexican banking system’s loan portfolio to government entities (Reforma, 27.11.2017).  
  • The merged bank, to be named GFInter, will be the largest controlled by Mexican capital (Financial Times, 25.10.2017). It plans to increase its dominance as the largest private creditor to the public sector by lending to entities such as Pemex, the state oil firm; CFE, the government electricity utility; and FOVISSSTE, the national housing fund (Forbes, 01.12.2017).

On the 5th of December 2017, the proposed merger – which would see Banorte acquire Interacciones – received shareholder approval. Mexico’s financial and competition regulators are expected to approve the deal in the second quarter of 2018 (Bloomberg, 25.10.2017). There has been speculation about a possible merger of the two banks since at least 2014, when Carlos Hank González resigned as CEO of Interacciones to become a board member of Banorte, where he now serves as chairman (The Wall Street Journal, 25.10.2017).

Hank González is the grandson of Roberto González Barrera, Banorte’s former chairman, who acquired the bank during Mexico’s wave of privatisations in the early 1990s (The Wall Street Journal, 07.08.2017). Hank Rhon, the chairman and principal shareholder of Interacciones, is close to President Peña Nieto (Proceso, 10.02.2016) and is one of the wealthiest individuals in Mexico, with an estimated fortune of U.S. $2 billion (Forbes, 17.04.2017).

A Family Mired in Controversy
The Hank family is highly controversial. Carlos Hank Rhon, his brother Jorge, and late father, Carlos Hank González (Snr), are the subject of extensive adverse press coverage. This includes allegations in both the Mexican and international media of corruption, involvement in drug trafficking, and maintaining close ties with drug cartels.

A report by the US government’s National Drug Intelligence Center, which was leaked in 1999, stated that Carlos Hank Rhon and his brother and late father “pose a significant criminal threat to the United States” due to their involvement in drug trafficking and money laundering (The Washington Post, 02.06.1999). The following year, however, following a legal campaign by Hank Rhon’s representatives, the US Attorney General Janet Reno issued a statement affirming that the report was a draft and that its conclusions “have not been adopted as official views” (The Wall Street Journal, 11.04.2000). In 2015, the US Department of Justice investigated Citigroup’s ties to Carlos Hank Rhon as part of its probe of the bank’s money laundering controls; he was not accused of wrongdoing (Reuters, 17.08.2015).

Hank Rhon’s late father, Carlos Hank González Snr, was a leading figure in the ruling Institutional Revolutionary Party (PRI), serving as governor of Mexico state, mayor of Mexico City, and in a number of cabinet positions between 1955 and 1994. Simultaneously, he amassed a fortune of over U.S. $1 billion, with interests in sectors such as real estate and banking (The Guardian, 15.08.2001). However, as one of the foremost “dinosaurs”, the authoritarian old-guard of the PRI, he was also widely associated with the party’s networks of patronage and corruption (The Guardian, 15.08.2001).

Although he reportedly holds no stake in either Banorte or Interacciones, (El Universal, 01.11.2017), Mexican and international press sources have also reported on allegations against Hank Rhon’s brother, Jorge, the former mayor of Tijuana. These include weapons charges filed in Mexico – which were dismissed (BBC News, 15.06.2011) – and murder allegations (The Washington Post, 26.06.2004).. In addition, a leaked diplomatic cable sent in 2009 by the US consul general in Tijuana, Ronald Kramer, stated that Jorge “is widely believed to have been a corrupt mayor and to be still involved in narco-trafficking” (Wikileaks, 29.07.2009).

The ability of members of the Hank family to avoid conviction despite such a lengthy list of alleged crimes has fuelled suspicions that they are protected by their political connections (The Guardian, 14.06.2011).

Networked Leverage  
In addition to the political contacts of the Hanks, a number of prominent former public officials serve on the boards of both Banorte and Interacciones. The two banks have therefore been well placed to exploit the opportunities presented by the rapid increase in the indebtedness of Mexican states.

The expansion of Banorte and Interacciones’s loan portfolio to local government has been particularly impressive. A decade ago, Mexico’s states and municipalities owed around 10% of their debt to Banorte and Interacciones; that figure now stands at almost 50%, despite the fact that no fewer than 47 banks operate in the Mexican market (Sin Embargo, 11.06.2016). The merged bank, GFInter, looks set to expand further, establishing itself as a major infrastructure lender (Financial Times, 25.10.2017).

GFInter will push Citibanamex, Citigroup’s subsidiary in Mexico, into third place when ranked by assets, credit portfolio and deposits (El Universal, 08.12.2017). The merged bank will be the largest private-sector lender to Mexico’s state and municipal governments, and will even rival Banobras, the state development bank, as the principal creditor to public entities (Forbes, 01.12.2017).

Such dominance has led ratings agency Moody’s to point out that GFInter would be too systemically important for the Mexican government to allow it to undergo financial distress (El Universal, 01.11.2017). As senior board members, as well as shareholders, of a bank that would therefore be “too big to fail”, the Hanks would secure great influence (El Universal, 01.11.2017).

A number of Mexican newspapers have alleged that the terms of the contracts made between Banorte, Interacciones and government authorities lack transparency (Proceso, 26.05.2017). Furthermore, while both banks have achieved impressive growth, Banorte’s share price fell by 9% the day after the merger was announced, mainly due to concentration risks (Euromoney, 02.11.2017). Although GFInter would hold a high proportion of public sector loans, Banorte expects the deal to face no issues from the competition regulator (El Financiero, 19.12.2017).

The timing of the merger is likely motivated by the uncertainty posed by Mexico’s presidential elections to be held in July. Andrés Manuel López Obrador, a left-wing candidate who has long been critical of the political establishment, is currently leading in the polls (Financial Times, 28.11.2017). The Hank family’s relationship with López Obrador is unlikely to be as cosy as it is with Peña Nieto. During the State of Mexico’s gubernatorial election in June 2017, López Obrador’s narrowly defeated party, Morena, accused Banorte of distributing prepaid debit cards in order to buy votes for the PRI (Reforma, 28.03.2017).

Entrenched Power Players
If the merger is approved, GFInter would pull ahead of all other private-sector competitors in the market for financing Mexican government debt. Banorte and Interacciones's loans to government entities have maturities of up to 25 years, and will therefore help to isolate the Hanks from the risk of a president who is more hostile to their aspirations (Proceso, 26.05.2017). Hank Rhon and his son are therefore likely to remain among the country’s foremost power players, even in the event that the ruling PRI is voted out of office in this year’s elections.