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| 1Q10 | BBVA Group highlights | Group information | Risk and economic capital management | Business areas | Corporate responsibility |
THE BBVA SHARE
The start of 2010 has been marked by uncertainty and
tension in financial markets due to the deterioration in
the perception of sovereign risk. The Greek fiscal
situation has caused such change in perception. Other
countries, such as Spain, have been affected by the
contagion effect of the Greek situation. All this has
been reflected in increased volatility, wider spreads in
sovereign credit default swaps (CDS) and, to a lesser
extent, in financial institutions’ CDS, as well as a
negative effect on the stock markets. However,
messages of support from other countries in the
European Union and Greece’s commitment to take
measures to tackle the internal situation has helped a
recovery in the markets.
In the first quarter of 2010 some signs have been
appearing of a recovery in the industrialized
economies, leading to slight increases in growth
estimates. The perception of emerging countries
continues to be more positive. In fact, the predictions
for their GDP growth for this year are clearly above
the European and U.S. average.
Against this background, the main stock market
indices in Europe closed the quarter with slight gains:
the Stoxx 50 was up 1.7%, while the FTSE in the U.K.
was up 5.4%. The U.S. markets also performed
positively, with its S&P 500 up 4.9%. However, in
Spain the Ibex 35 was down 9.0% as a result of the
contagion effect of the Greek crisis and a perception
that the country’s economic recovery was lagging
behind the rest of Europe.
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Relevant events
Earnings
Business activity
Capital base
The BBVA share
In the banking sector investors continue to focus on
solvency, liquidity and leverage, as a result of the
proposals for the new Basel regulation. Other factors
that continue to be relevant are asset quality and
geographical diversification of risks. The European
bank index, Stoxx Banks, was even for the quarter,
with a rise of only 0.2%, while in the U.K. the FTSE
Banks was up 6.7%. In the United States, the S&P
Financials Index was up 10.8% and the S&P Regional
Banks index was up 28.0%.
Following the results published by BBVA in the fourth
quarter of 2009, analysts value positively the strength
and sustainability of the Group’s operating profit. In
particular, they recognize the good performance of the
net interest income and the effort made to reduce costs,
which was better than expected. In general, analysts are
very positive about BBVA’s leading position in Mexico,
which will allow it to benefit from the economic
recovery expected to start this year and that will be even
more solid next year. However, they are concerned about
the macroeconomic situation in Spain, although they
consider that the restructuring of the savings banks will
in general offer banks the opportunity to win market
share. Other positive factors are the sound capital and
liquidity levels of the Group. Analysts consider that
BBVA is well prepared to tackle the possible new
regulatory challenges faced by the sector in Europe.
Despite its sound fundamentals, the performance of the
BBVA share in the first quarter of 2010 has been
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