36
BUSINESS AREAS 1Q09
Wholesale Banking & Asset Management
The Global Transaction Services unit implemented two new
functions for BBVA net cash: SEPA transfers in Portugal and
the download of periodic information on balances and
movements via the external network. Furthermore, in the area
of international financial institutions, new mandates were
received for pooling payments and managing cheque
collections from various international banks.
In the Americas, the most important operations were a
syndicated loan of $130m for Minera Milpo SAA in Peru;
$373m of finance for FPL Energy, the USA’s leading wind
farmer, in connection with the FPL Heartland Project; $3
billion for capital restructuring and refinancing of Bacardi’s
debt with a bond issue in the dollar and euro markets; and
$781m to finance the I-595 Express motorway in Florida with
a final participation of $44m by BBVA, being the first finance
operation for a PPP scheme (Private-Public-Partnership).
In Mexico the unit closed an issue of senior bonds for
Embotelladoras Arca which, despite the adverse conditions in the
local debt market, was subscribed 1.36 times.
Global Markets
This unit handles the origination, structuring, distribution and
risk management of market products, which are placed
through the trading rooms in Europe, Asia and the Americas.
In the first quarter of 2009 the complex environment in the
market continued with high volatility and widespread
adjustments in share prices. Credit spreads were at maximum
levels and confidence was very low.
Despite this the Global Markets unit adapted to the prevailing
conditions and achieved excellent results thanks to a model
focused on customers, achieving double-digit growth in all
regions. Progress was also made in diversifying business by
geographic region, with higher growth outside Spain, and by
type of customer, applying greater control to ensure efficient
management of risk.
In the first quarter of 2009, the Global Markets unit generated
gross income of €310m in Europe and New York (up 108.0%
year-on-year), operating income of €252m (up 179.8%) and
net attributable profit of €175m (up 171.2%).
The unit continue to work hard –with considerable success–
on cross-border business between the different regions where
BBVA operates and on cross-marketing with other BBVA
business areas. This way the bank can achieve further
synergies and build a recurrent and stable source of income,
thanks to the strength afforded by its global dimension, by the
close co-operation with other units and by the wider range of
products and services.
Asset Management and
other business
Asset Management designs and manages the mutual funds
and pension funds that are marketed through the Group’s
different networks. It tackles these goals through three
different channels. These are traditional asset management,
alternative asset management and Valanza (the Group’s
private equity unit).
The sharp falls on Spanish markets had an impact on total
assets under management, which came to €48,657m at the
end of the first quarter. The assets in mutual funds managed
by BBVA came to €32,776m at 31-Mar-09. Of this amount
non-real estate funds held €32,603m, declining 17.5%
year-on-year. This was less than what was the fund industry’s
biggest all-time fall (down 26.3%). And it helped BBVA to
gain 0.46 percentage points of market share, which rose to
20.2% thus reinforcing the bank’s position of leadership
achieved at the end of 2008.
The assets managed in pensions funds in Spain stand at
€15,881m, with a year-on-year decline of 3.6%. Of this
amount individual plans account for €9,272m and employee
and associate schemes €6,609m.
At the end of February the Group decided to focus its efforts
on traditional investments, which represents 99% of the
funds it manages at global level and thus it decided to
discontinue the alternative asset management business. With
this action BBVA is anticipating the possible adverse effects
arising from the current state of the markets and of the hedge
fund industry. Accordingly, it arranged an orderly withdrawal
with the object of protecting the interests of investors and the
bank.
The Industrial and Real Estate Holdings unit helps to diversify
the area’s businesses by managing projects of long duration.
The aim is to create medium and long-term value through
active management of a portfolio of industrial holdings and
real estate projects (the Duch Project and Anida International).
At the end of March 2009, the industrial holdings portfolio
held latent capital gains of roughly €170m and the net
attributable profit generated by the unit was €11m.
Lastly, WB&AM manages BBVA’s interest in CITIC. The bank
continues to advance its strategic alliance with the Chinese
financial group, with agreements in the car finance and private
banking segments.
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.