32
BUSINESS AREAS 3Q09
Spain and Portugal
31-Dec-08) and the area reduced its positions in
high-risk sectors. In the household segment demand is
high for products such as two novel mortgages (Ven a
Casa and Hipoteca Solución) that offer competitive
advantages compared to similar offers in the market. In
the companies segment, BBVA maintains its leadership
in the SME and large companies segments, according to
the FRS survey. Furthermore, BBVA confirmed its
leadership in the public sector, increasing finance to the
authorities by 20.0% and taking a prominent position
in big operations.
Customer funds under management stand at
€143,292m, down 1.4% against 30-Sep-08. The area
consolidated and increased its market share in private
individual deposits (10.1%) and in mutual funds
(19.9%); they rose 18 and 77 basis points from August
and from September 2008 respectively. BBVA has
successfully managed the surge in demand for liquid
deposits, which rose 7.4% to €41,716m year-on-year.
Nonetheless, time deposits were less buoyant, owing to
the sharp decline in interest rates. BBVA also continues
to lead the market in mutual funds. At 30-Sep-09 the
area managed assets of €30,868m. Pension funds were
up 7.6% year-on-year to €10,158m, partly due to
pension funds captured from the competition. Lastly,
the balance of stable customer funds increased €2,000m
in the quarter when BBVA’s issue of convertible bonds
was subscribed in only five days.
Thanks to pricing policies and a change in the deposit
mix (with current and savings accounts playing a bigger
role), net interest income for the first nine months rose
4.1%. This was achieved despite falling GDP and the
related contraction in credit. In terms of average total
assets the area’s yield is highly positive, standing at
2.23% in the first nine months (2.13% for the same
period last year). Net fee income fell by the same
percentage as the first half (down 8.0% year-on-year).
This was the result of lower mutual and pension fund
business although these declines were partially offset by
higher contributions from insurance business (up 6.0%)
and by the increase in banking services (up 4.0%).
Gross income reached almost the same level as last year.
In the first nine months, operating costs fell 5.7%
year-on-year thanks to transformation plans applied in
recent years. This helped operating income to rise 3.4%
to €3,463m. As in previous quarters, only 22.1% of
operating income was absorbed by impairment losses on
financial assets, ignoring the additional provisions
contributed by capital gains from real estate sales. As a
result, net attributable profit in the year to date came to
€1,877m (down 2.1%) and return on equity (ROE)
remains higher than the sector average, at 34.6%.
Spanish Retail Network
This unit services the financial and non-financial needs
of households, professional practices, retailers and small
businesses with products adapted to each segment.
BBVA has promised to help its customers by providing
financial solutions adapted to their emerging needs in
the current complex environment.
At 30-Sep-09 the unit’s loan portfolio stood at
€102,093m and customer funds are €111,820m. The
profitable growth of business and a new decline in
operating costs (down 4.3% year-on-year) helped profits
to rise 0.9% to €1,241m.
In the private individual segment, mortgage sales
totalled €2,192m in the quarter despite the sluggish real
estate market, lifting market share to 12.7% (a gain of
32 basis points against the 12.4% of 31-Dec-08). This
was supported by a range of financial solutions adapted
to customers, such as a campaign to attract mortgages
away from the competition (Ven a Casa), which
accounted for 20% of sales. And it also helped the
portfolio of residential mortgages to increase to
€69,320m (up 1.3% year-on-year). At 30-Sep-09 total
consumer finance stood at €7,411m. Major support
came from the instant loan service (PIDE) and from the
launch of a new channel
(www.financiatucocheconbbva.es). The new web site
provides customers with information on car loans and
enables them to sign agreements on the portals of
various distributors that offer finance through BBVA.
Despite stiff competition for customer funds, the unit
was successful in gathering savings and current accounts,
salary payments and pensions. Liquid forms of customer
funds rose 13.3% to €30,905m and BBVA’s market share
at 31-Aug-09 (latest available data) increased 18 basis
points compared to a year earlier. During the quarter the
unit launched a new deposit linked to salary payments
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