economic slack warrants holding the target rate at 0%
to 0.25% for a prolonged period of time.
The dollar exchange rate weakened against the euro
over the last twelve months by 2.3%, ending September
at 1.46 dollars per euro. However, the average exchange
rate recorded an appreciation of 11.4% year over year.
Its impact is negative on business volumes and the
balance sheet, but positive on the income statement.
Unless otherwise indicated, all comments below refer to
changes at a constant exchange rate.
Effective 22nd August 2009, BBVA Compass acquired
certain assets and liabilities of the Guaranty Financial
Group (Guaranty) in an FDIC-assisted transaction. This
investment offers compelling financial returns, an
opportunity to meaningfully expand BBVA U.S.A.’s retail
banking franchise (164 branches and 300,000 customers
in Texas and California) and, based on the loss share
agreement with the FDIC, minimal credit risk (FDIC
shares 80% of the losses on the first $2,285m, and 95%
of the losses thereafter). Moreover, Guaranty added
$7,500m in loans and $11,400m in customer deposits.
The area’s business volumes grew, its loan-book
reaching €34,598m at 30th September, and customer
deposits €32,607m. These figures were up 17.2% and
32.5% year-on-year respectively, above all due to the
impact of Guaranty. Without Guaranty, the loan-book
remains practically flat while customer deposits have
grown 1.1%.
Operating income rose to €657m (up 13.8% against the
same period of the previous year), driven by a 10.2%
Development of BBVA’s franchise in the United States
BBVA New York
1987
BBVA Puerto Rico
1968
Bancomer
Transfer Services
1994
Landing Texas Sunbelt
2004 2005 2006 2007 2009
drop in operating costs triggered mainly by lower
amortisation of intangibles and lower merger &
integration costs. This excellent cost performance offset
the 1.8% drop in revenues, making it possible to absorb
the impairment losses on financial assets and obtain a
positive attributable profit of €103m. (This figure is
€162m without amortisation of intangible assets.) All this
was achieved without taking up any kind of public aid.
Finally, the improvement in the area’s non-performing
asset ratio (NPA ratio) brought it to 3.9% on 30th
September 2009, down 56 basis points against the 4.5%
reported the previous quarter, mainly due to the
addition of Guaranty.
BBVA Compass banking group
On 10th September 2009, BBVA Compass incorporated
Guaranty and BBVA Bancomer USA into its operations
and earnings. Previous periods have been restated to
produce like-for-like comparisons following the
incorporation of BBVA Bancomer USA. BBVA Compass
represents approximately 91% of the area’s total assets.
On 30th September 2009, loans were €31,549m, up
19.9% year-on-year. Customer deposits increased
34.1% to reach €31,191m. Without the impact of
Guaranty, lending rose 1.3%, while customer deposits
rose 0.8%.
Year-to-date net interest income stood at €1,005m on
30th September 2009, with a year-on-year growth of
2005 2006 2007 2009
Texas
Market
share
0.94%
Texas
Market share
2.96%
3Q09 BUSINESS AREAS
The United States
Texas Top 4
Market share
4.62%
Texas Top 4
Market share
6.04%
45
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