This reflected a 25.9% drop, but the comparative
quarter of 2008 had booked €96m in one-off revenues
from the Visa IPO under this item. These elements fed
into a gross income of €1,225m at the end of March,
with a year-on-year growth of 1.0% (up 9.1% year on
year if VISA’s profits are excluded).
Operating expenses increased just 2.1% year on year,
way below current inflation. This helped operating
income to reach €829m, rising 0.4% against the same
quarter of the previous year (12.8% adjusted for VISA).
The combination of cost control and income growth
produced a first-quarter cost-income ratio of 32.3%.
This was practically flat to the ratio reported twelve
months earlier (32.0%).
Impairment losses on financial assets rose to €358m.
This year-on-year rise was mainly a consequence of the
downturn in the economy and was concentrated in the
consumer and credit-card loan-books. However,
according to the latest data to December 2008,
Bancomer’s impairment is less than that recorded by its
main peers. Its net attributable profit thus stood at
€363m, down 16.1% (the fall is limited to –2.4% if
Visa is excluded). Its NPA ratio, meanwhile, reached
3.6%, and its coverage ratio 150%, compared to the
3.2% and 161% figures recorded on 31-Dec-08,
respectively.
Banking business
In March 2009, gross lending in Bancomer showed a
balance of €29,594m, growing 11.8% year on year.
This was driven by the positive performance of
commercial lending, which rose 19.3%, with a total
stock of €11,087m. Bancomer has thus consolidated its
leadership in the lending business. Its market share rose
135 basis points against March 2008, to 31.3%. The
weight of consumer lending on the loan-book went
down from 30% to 25%, while home finance grew to
33%, and commercial lending (to corporations, SMEs,
government and financial entities) came to account for
42% of the total. Lending to SMEs performed especially
well, rising 25.6% year on year. This performance was
echoed by lending to large corporations, which went up
by 10.6% against March 2008. The mortgage book was
also very dynamic. With a balance of €8,751m, it grew
21.7%, excluding the old mortgage portfolio. Finally,
the consumer-loan portfolio, which includes credit cards
and other consumer lending, such as personal loans, car
finance and payroll loans, slowed down 8.0% against
the balance on 31-Mar-08.
Customer funds (including customer deposits, mutual
funds and investment companies and other
intermediation products) reached €42,647m at
31-Mar-09, with a year-on-year increase of 8.7%.
Bancomer not only maintained its leadership in total
customer funds (current and savings accounts, term
accounts, mutual funds and investment companies and
dollars), but actually increased its market share
significantly. This grew by more than 200 basis points
over the end of March 2008, reaching 28.1%. Term
deposits performed exceptionally well, growing 18.4%
to €8,563m. Current accounts also showed dynamic
growth (18.9% against the first quarter of last year),
reaching a balance of €14,146m. The largest item in the
total customer-funds figure is current accounts, which
account for 33%, followed by mutual funds and
investment companies (23%); term deposits (20%);
other customer products (17%) while dollar deposits
account for the remaining 7%.
The positive performance of deposits was the outcome
of a sales policy defined and driven by the business
units. The bank has benefitted from the trust that its
customers feel for the institution, being able to gather
more funds from the public than any others in its peer
group. Bancomer thus ended March 2009 with the
largest share in customer funds gathered through
current and savings accounts since 2000. Its share was
32.5%, which was 250 basis points more than in
31-Mar-08. This situation has enabled it to maintain a
comfortable liquidity position in the first months of the
year and as it faces the forthcoming months, its liquidity
will make it easier to maintain current business
volumes, react rapidly to any credit requirements and
need less wholesale finance.
During the quarter, Bancomer issued a five-year
structured note for 107m pesos for private-banking and
high-net-worth customers. This is the first transaction
structured as an asset swap on a long-term sovereign
bond denominated in dollars ($14m). The instrument
was placed amongst over 800 customers.
A permanent programme “Pay well, pay less” has also
been launched to reward credit-card holders with sound
payment records. Credit card customers who pay well,
1Q09 BUSINESS AREAS
Mexico
39
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