38
BUSINESS AREAS 1Q09
Mexico
This area comprises the banking, pension and insurance
businesses that the BBVA Bancomer Financial Group
operates in Mexico.
The figures tracking economic performance during the
first months of 2009 reflect a slowdown in GDP growth
similar to that observed in the final quarter of 2008.
However, public-finance figures are showing a positive
trend in capital expenditure, which grew by 20% year
on year in the first two months of 2009. Unlike earlier
cyclical downturns, the country faces this one with
structural strengths that can help it curtail the
slowdown in private-sector demand in Mexico. These
include healthy public finances, an affordable
current-account deficit, limited inflation and a sound
banking industry
Recognising its weakening economy and lower
inflationary pressures, the Mexican central bank has
brought down the official interest rate by 150 basis
points since December 2008. It closed March 2009 at
6.75%. This triggered a similar dip in both short-term
interbank rates and in government instruments with
maturities of up to three years. March inflation slowed
down to 6.04% year on year, benefitting from drops in
food and energy prices.
The average exchange rate in the first quarter of 2009
was 14.2 pesos per dollar. This reflected a depreciation
of over 23% year on year. Over the last twelve months,
the Mexican peso weakened 9.9% against the euro in
final exchange rates and 13.6% in average rates. This
has a negative impact on the financial statements for the
area. The attached tables contain columns with
year-on-year changes at constant exchange rates and
current exchange rates. The following remarks refer to
the constant-rate figures.
Mexico. Operating income
(Million euros at constant exchange rate)
825 765 790
781
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At current exchange rate: –13.2%.
+0.4% (1)
829
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
Off-balance-sheet funds
• Mutual funds
• Pension funds
Other placements
Customer portfolios
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) At constant exchange rate.
(2) Excluding deposits and Bancomer’s Market unit repos.
In the first three months of 2009, Mexico generated
€816m in net interest income. This 6.0% rise was
driven by business volume growth outpacing the rest of
the industry, mainly with the gathering of low-cost
customer funds and in lending to SMEs, corporations
and mortgage loans. Despite the change in Bancomer’s
loan-book mix, with more low-spread lending (reducing
the weight of unsecured consumer loans in favour of
SMEs and mortgages), Mexico’s net interest income has
remained high and shows little sensitivity to interest-rate
shifts, due to active balance-sheet management using
structural hedging strategies.
Fee income, at €263m, grew slightly against the first
quarter of 2008 (up 1.4%) despite lower business
volume growth levels. Net trading income was €116m.
Mexico. Net attributable profit
(Million euros at constant exchange rate)
433 390 378
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At current exchange rate: –27.5%.
–16.1% (1)
484
31-03-09
Mexico
Δ% Δ% (1)
29,708 0.7 11.9 29,490
30,151 2.5 13.8 29,406
17,746 (10.0) (0.1) 19,716
9,681 (11.9) (2.2) 10,995
8,064 (7.5) 2.7 8,721
2,814 (10.5) (0.6) 3,143
- - - -
32.3 32.0
3.6 2.1
150 250
31-03-08
363
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