42
BUSINESS AREAS 1Q09
The United States
Short-term indicators suggest that the US economy
declined in the first quarter of 2009 for the second
consecutive quarter, though at a slower pace than in the
fourth quarter of 2008. Employment in the non-farm
payroll decreased by 2 million jobs in the first quarter of
2009 and the losses were widespread across industries.
Personal consumption expenditures remained weak,
though its downward trend appears to have stabilized.
While non-residential investment continues to deteriorate,
residential investment seemed to have improved in 1Q09.
In February, housing starts posted its first monthly
increase following seven consecutive months of negative
readings. Likewise existing home sales experienced a
significant increase in February, largely due to increasing
supply of foreclosed homes by the credit institutions.
International trade also showed positive figures in
February, when US exports rose for the first time in six
months. Imports, on the other side, continued to suffer
large declines consistent with a weak domestic demand.
These economic risks, alongside continuing financial
instability have led the Government to implement a set of
measures to stimulate the current economy. In February,
the President signed the American Recovery and
Reinvestment Act of 2009, a $789bn fiscal package,
combining tax relief with spending. This plan aims to
stimulate the economy by creating or saving three to four
million jobs and providing $150bn to low-income
families. In addition the U.S. Treasury announced the
Financial Stability Plan to restore credit by reducing
uncertainty, injecting capital, cleaning banks’ balance
sheets from troubled assets, restoring securitization
markets and mitigating foreclosures. The impact of the
measures is highly uncertain given the magnitude of the
downturn.
Meanwhile, the exchange rate shows the dollar
strengthening against the euro over the last twelve
The United States. Operating income
(Million euros at constant exchange rate)
210 215
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At current exchange rate: –11.5%.
–3.0% (1)
181
173
204
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
ROE (%)
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) At constant exchange rate.
(2) Excluding deposits and Market unit repos.
months. The US currency closed the first quarter of 2009
at $1.33 per euro, appreciating 18.8% against 31-Mar-08
and 4.6% against 31-Dec-08. The average exchange rate
rose to $1.30 per euro, which also reflects an
appreciation over the first quarter of 2008 (up 14.9%).
This has a positive impact on the Group’s financial
statements. Nonetheless, the comments below give all
changes at constant exchange rates.
Despite the last year’s complicated economic scenario,
BBVA USA has outperformed the banking industry in the
USA both in earnings and in business volumes. Its growth
was above the average for the US Top-50 banks in their
main business and financial fundamentals. It ended the
quarter with total loans of €32,680m, representing a
8.3% increase over 31-Mar-08. At €27,012m, customer
deposits maintained practically the same levels as at
31-Mar-08 but factoring in the euro’s depreciation over
the year, deposits grew 19.0%. The NPA ratio stood at
3.9% on 31-Mar-2009, with a coverage ratio of 53%.
Net interest income for the first quarter was €379m, up
3.6% versus the same quarter of last year. However,
The United States. Net attributable profit
(Million euros at constant exchange rate)
96 96
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At current exchange rate: –49.4%.
31-03-09
–56.0% (1)
23
The United States
Δ%
32,680 28.7 8.3 25,387
27,012 19.0 0.1 22,705
6.9 23.3
62.5 63.4
3.9 2.0
53 92
23
Δ% (1)
31-03-08
42
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.