The South America area manages the BBVA Group’s
banking, pension and insurance businesses in the region.
Year-on-year comparison of the business variables and
earnings in the area are impacted by the divestment of
the Consolidar health business and the State takeover of
the Consolidar pension fund, both of which took place
in the fourth quarter of last year.
During the first months of 2009, the effects of the
international crisis made themselves felt in the region,
especially in financial markets, whilst the Latam
currencies saw some significant depreciations against the
dollar. The growth outlook deteriorated with falling
foreign demand, sharp commodity-price drops and
increased risk aversion, which upped risk premiums and
made credit more expensive. Despite these elements, the
macroeconomic situation in the region continues to
compare favourably against that in the developed
countries and in other emerging economies. This is due
to various factors. Firstly, domestic demand has grown
more moderately but has not collapsed as in other
markets. Thus business volumes continue to grow, albeit
slowly, and asset quality shows no signs of impairment.
Secondly, the financial systems in the region remain
sound, with stable customer deposit volumes, without
any significant crises or stress episodes. Thirdly, no
solvency or liquidity problems are being observed,
especially following the central banks’ qualitative easing
measures in the region.
The strengthening of the dollar against the euro has
largely offset the effect of the depreciating
Latin-American currencies against the dollar. The euro
exchange-rates of the Argentine peso and the Peruvian
nuevo sol have not varied significantly in comparison
with twelve months ago. The Venezuelan bolivar fuerte,
however, has appreciated considerably, while the
Chilean peso and Colombian peso have depreciated.
South America. Operating income
(Million euros at constant exchange rate)
444 430
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At current exchange rate: +28.7%.
+23.4% (1)
436
509
548
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
Off-balance-sheet funds
• Mutual funds
• Pension funds
ROE (%)
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) At constant exchange rate.
(2) Including debt certificates.
The exchange rate impact on the earnings figures for the
area’s first-quarter financial statements is positive in
more than four percentage points. The tables in this
report have columns showing the year-on-year
variations in current rates and in constant rates. Unless
otherwise stated, the comments below will refer to the
constant-rate changes.
In the first months of 2009, South America earned a net
attributable profit of €225m, a year-on-year increase of
19.5% (up 24.3% at current exchange rates). Growth
was positive in the area’s three business lines: banking,
pensions and insurance. Return on equity (ROE) stood
at 40.3%, which was higher than the 39.9% obtained
in the first three months of 2008.
The focal aspects in the South America area this quarter
are the positive performance of its revenues and
moderation in costs. Its net interest income was
€589m, rising 16.2% year on year. Apart from growing
South America. Net attributable profit
(Million euros at constant exchange rate)
189 192
176 188
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At current exchange rate: +24.3%.
+19.5% (1)
31-03-09
1Q09 BUSINESS AREAS
South America
South America
Δ% Δ% (1)
25,207 11.2 13.3 22,665
31,125 21.7 22.4 25,570
29,435 (20.4) (14.0) 36,975
1,668 (4.3) - 1,743
27,767 (21.2) (14.7) 35,231
40.3 39.9
40.7 43.7
2.3 2.4
139 133
31-03-08
225
45
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