to €1,015m (up 12.2% if the above-mentioned earnings in
2008 are excluded).
Impairment losses on financial assets were lower. During
the quarter the area released a net amount of provisions
owing to the decline in the loan portfolio (requiring less
generic provisions) and to the focus on customers of greater
credit-worthiness (which is also boosting transactional
business). At the end of September provisions came to a
positive figure of €53m, compared to provisioning of
€205m in the same period last year. WB&AM continues to
enjoy a high level of asset quality with a low non-performing
asset ratio (0.8%) and a coverage ratio of 118%.
As a result, income before tax for WB&AM (counting
only Europe, New York and Asia) came to €1,066m for
the first nine months, an increase of 16.0% year-on-year. It
also increased its contribution to the Group with a net
attributable profit of €770m (up 3.7%). The lower growth
of net profit is because the capital gains in 2008 were
taxed at a lower rate.
At the end of September the area’s gross loan portfolio was
down 17.4% year-on-year to €40,073m, which is mainly
in Corporate & Investment Banking. Customer funds
(deposits, mutual funds and pension funds) performed
well, rising 14.2% to €62,715m. This was the result of a
big increase in customers’ deposits (up 14.7%) following
campaigns at foreign branches (principally London and
New York). The combined effect of the decline in lending
and the rise in fund gathering helped to improve the area’s
liquidity position.
As customary, WB&AM’s contributions (in business and
earnings) in the Americas are reported under the Mexico
and South America areas. If they are added to the above
results (except asset management in South America), the
area’s combined contributions to the Group are those
shown in the table below:
Wholesale Banking & Asset
Management including the Americas
(Million euros)
Gross income
Operating income
Income before tax
Net attributable profit
Customer lending (gross)
Deposits
30-09-09
Δ% 30-09-08
2,333 12.7 2,070
1,798 15.8 1,553
1,804 32.9 1,357
1,192 21.9 978
51,164 (15.2) 60,350
62,223 (13.2) 54,979
3Q09 BUSINESS AREAS
Wholesale Banking & Asset Management
Corporate and Investment Banking
This unit co-ordinates origination, distribution and
management of a complete catalogue of corporate &
investment banking products (corporate finance, structured
finance, equity and debt capital markets), global trade
finance and global transaction services. Coverage of large
corporate customers is specialised by sector (industry
bankers).
At the end of September the unit’s activities were
characterised by a focus on customers with high business
potential. The loan portfolio stood at €38,337m (down
17.8% compared to the same date last year). Nonetheless,
the unit increased net interest income 13.9% year-on-year
thanks to price management and an increase in
transactional business. The yield also increased because the
ratio of net interest income to average total assets in the
first nine months came to 1.18% (1.11% at 30-Sep-08).
The good performance of recurrent income (net interest
income and net fee income) is reflected in gross income,
which climbed 24.0% year-on-year to €716m. Together
with smaller increases in operating costs, this helped
operating income to rise 29.3% year-on-year to €593m.
And thanks to the release of generic provisions and lower
specific provisioning, the unit’s net attributable profit grew
substantially to €455m, compared to €223m for the first
nine months of last year.
In fixed income, the unit consolidated its top ranking in
the Spanish bond market during the first nine months,
concluding more than 60 operations. In the third quarter
BBVA led the third Kingdom of Spain issue of €4,500m. In
Europe it has led 18 operations this year, including the
Enel bond issue (€4,000m). It also participated in
important syndicated loans in the European market such
as Schneider Electric (€1,800m) and SAP (€2,500m).
Operations in Spain included a €1,500m syndicated loan
for ACS.
Business in structured finance was intense during the
quarter. It included €400m to help Emparque acquire
Cintra Aparcamientos and €1,255m for the R1
Expressway in Slovakia.
In the third quarter the sector’s leading magazine, Trade
and Forfaiting Review, awarded BBVA a prize for best
trade bank in Latin America, for the fifth consecutive year.
37
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.