8
GROUP INFORMATION 1Q09
Earnings
positive one-off operations and other non-recurrent
items booked in the first quarter of 2008.
It should be noted that net attributable profit for the
first quarter of 2009 includes no one-off operations
whereas in the same period of 2008 they came to
€509m (net) owing to the sale of an interest in
Bradesco.
If this one-off operation is excluded, net attributable
profit in the first quarter of 2009 is 14.2% less
compared to the €1,442m obtained a year ago. At
constant exchange rates profit in the quarter without
one-offs is down 11.2% year-on-year. Moreover, if it
is compared with the profit without one-offs in the
fourth quarter of 2008, when the economic situation
was closer to the present one, then profit in this
quarter is up 13.2%.
The main source of the Group’s income is, as usual,
net interest income. This rose 20.1% year-on-year
(up 22.6% without the effect of currencies). As a
result, operating income, boosted by the good
performance of net interest income and the highly
positive behaviour of operating expenses, came to
€2,819m in the quarter, up 4.9% year-on-year (up
8.3% at constant exchange rates) and up 19.7%
compared to the fourth quarter of 2009. This
supported the higher transfers to loan-loss provisions
associated with the economic crisis and the Group’s
high standards of prudence.
The positive performance of earnings is, in fact,
entirely of an organic nature because the year-on-year
comparison is not affected by acquisitions.
Net interest income
Net interest income continued to be the main
driving force behind the Group’s income in the first
quarter. It came to €3,272m, an increase of 20.1%
compared to €2,726m in the same period of 2008.
At constant exchange rates the increase was 22.6%.
This improvement is due to the higher level of
business, the work on defending customer
spreads and an active management of the balance
sheet.
Net interest income
(Million euros)
2,726 2,829
1Q 2Q 3Q 4Q
1Q
2008
2009
(1) At constant exchange rate: +22.6%.
+20.1% (1)
3,043
In Spain and for business with domestic customers,
appropriate price management by BBVA helped the
sharp drops in interest rates during the period to
have a bigger effect on the cost of funds than on the
yield on loans. The cost of deposits fell 72 basis
points compared to the fourth quarter of 2008, to
2.15%, whereas the yield on loans fell 70 basis
points to 5.38%. Thus the customer spread was
3.23%, rising 2 basis points over the previous
quarter. This change in the spread had a positive
impact on net interest income in Spain & Portugal,
which rose 5.6% year-on-year.
Customer spread (Domestic)
(Percentage)
Yield on total
net lending
Customer
spread
Cost of
deposits
5.68
3.22
2.46
1Q
5.79
3.20
2.80 2.87
2.59
2.15
2Q 3Q 4Q
1Q
2008
2009
In Mexico there was a significant decline in
interbank rates during the first quarter (the average
TIIE was 8.0%, compared to 8.7% in the fourth
quarter of 2008). This fall was reflected in the yield
on loans, which dropped 31 basis points compared
to the previous quarter. The cost of deposits was
down 12 basis points, leading to a slight decline in
the customer spread, which was 11.96% in the first
quarter, compared to 12.15% in the fourth quarter
5.93
3.14
3,088
6.08
3.21
3,272
5.38
3.23
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