sluggish fee income (down 8.1%), net trading income
(down 45.2%) which in the first quarter of 2008 included
€9.1m from Visa’s IPO and the increased contribution to
the deposit guarantee fund, brought gross income down
5.3% against 31-Mar-08, to €543m; this was just 1.6%
down on the fourth quarter of 2008. Since operating costs
improved 6.7% against the same period of the previous
year, operating income reached €204m, 3% less than in
the first three months of 2008. However,
operating-income grew a significant 17.9% compared
against the fourth quarter of 2008. BBVA USA set aside
€126m for loan-loss provisions during the quarter,
bringing the net attributable profit for the quarter to 42m.
Excluding amortization of intangibles, this figure is €63m.
BBVA Compass banking group
BBVA Compass has completed the organisational
transformation, successfully integrating itself within the
BBVA universal banking model. This change is already
beginning to bear fruit.
The unit is now more customer focussed and ended
March with a loan book of €29,273m, up 9.0% on 31st
March 2008. Customer deposits at €25,397m are down
0.3% against the year ago quarter. BBVA Compass has
thus generated €344m in net interest income, 3.9%
more than in the first quarter of 2008. Fee income and
net trading income went down 9.7% and 46.1%
respectively year on year. This brought gross income to
€494m, 5.7% less than the first quarter of 2008.
Expenses for the quarter showed excellent performance,
down 6.8% against 1Q08. This improvement will
become more notable as 2009 unfolds, due to the recent
cut in headcount. These expenses and revenue figures
combined for an operating profit of €182m, which was
up 20.5% from 4Q08 but down slightly (–3.8%) versus
1Q08. This contributed to a significant improvement in
the cost-income ratio, which stood at 63.1%. This
compared favourably not just against the fourth quarter
of 2008 (69.6%) but also against 1Q08 (63.8%).
Total loan-loss provisions for the quarter were €115m,
down from 3Q08’s peak. Net attributable profit for the
first quarter of 2009 was €35m. Excluding
amortization of intangibles it rises to €56m.
Finally, the transformation process is increasing
cooperation amongst different areas and units. An
example of this is the Group‘s New York office’s
involvement in the complex deal successfully closed
with a BBVA Compass customer this quarter. The
Wealth Management unit has also collaborated with
BBVA Madrid’s Equity Derivatives & Structured
Products group to deliver the new “Power CD”
product. It offers clients an opportunity to earn returns
linked to the performance of the S&P 500 and has been
a tremendous success since its offering.
Drilling down to business-unit level, at 31-Mar-09, the
Corporate Banking unit managed a loan portfolio of
€16,511m and customer deposits of €8,221m, having
grown 6.2% since March 2008. During the quarter, the
unit has seen an increase in letters of credit being used
to back municipal/public sector bond issues.
Retail Banking ended the first quarter with a loan
portfolio of €9,955m and customer deposits of
€14,026m. Also during the quarter the unit made a
strategic business decision to exit the Indirect Auto
Dealer and Student Lending businesses as a step toward
better utilization of bank capital.
The Wealth Management unit manages a loan portfolio
of €2,052m, while its customer deposits of €2,717m
have grown 4.2% year on year. As the quarter closed,
the unit also had €9,413m assets under management.
Other units
BBVA Puerto Rico managed customer loans of
€3,391m at 31-Mar-09. This was down 2.2% since
year-end but up 3.5% over the same quarter a year ago.
However, total deposits, at €1,517m were in line with
year-end and increased by 6.6% over the year ago
quarter-end. Gross income, at €39m for the quarter,
was down 8.7% year on year. However, expenses
improved, going down 10.2% against the year ago
quarter. Operating income thus came in at €19m,
practically the same level as 4Q08 but down 7.0% over
the first three months of 2008. Net attributable profit
stood at €5m for the quarter.
BTS processed over 6 million transfers during the first
quarter of 2009. Of these, 5.2 million went to Mexico.
Attributable profit for the quarter was €4m, with a
significant 42.8% rise from the same quarter 2008.
Finally, BBVA Bancomer USA saw its deposits increase
19.2% since December 2008 and 19.8% since the same
quarter of last year. It opened nearly 5,000 new
accounts, handling over 97,000 money transfers.
1Q09 BUSINESS AREAS
The United States
43
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