€136,179m, down 3.5% year-on-year. Products involving
greater loyalty, such as transactional deposits and pension
funds, performed positively, with 3.4% and 10.4% growth,
respectively. Nevertheless, term deposits continue to
register year-on-year decreases (down 18.5%). BBVA
continues to avoid engaging in aggressive price campaigns
thanks to its solid liquidity position, which allows it to
focus on a profitable commercial management rather than
the mere gathering of funds.
In off balance sheet funds, the Group maintains its
leadership position in mutual funds under management,
with a market share at 31-Mar-10 of 18.9%, 182 basis
points more than its closest competitor. Assets under
management by the area stood at €29,210m. It should also
be noted that this leadership is very significant in the most
conservative modalities, which bear the most weight in the
system (68%). Finally, BBVA also maintains its position of
leadership in the market for pension funds managed by the
area, which totaled €10,499m.
The net interest income from the area’s commercial
activity, €1,217m, increased 1.6% over the last year as a
result of efforts to defend the customer spread which stood
at 2.54% as of 31-Mar-10 (2.55% in the fourth quarter of
2009) and of the greater market shares achieved in the last
twelve months. Moreover, the profitable growth of
business has caused in the net interest income, measured
over ATA, to exceed the 2.20% recorded in the first
quarter of 2009 to 2.26% currently. Net fee income, at
€361m, is down 4.8%, in line with the lethargic banking
business and moderated growth of funds. Therefore, net
interest income and fee income values for the area have
remained the same as last year, but the decreased
contribution from net trading income and other
income/expenses place gross income at €1,709m (€1,734m
in the first quarter of 2009).
Containment of operating costs has presented a new
year-on-year decrease of 1.1%, thus maintaining the positive
contribution of the Transformation Plan initiated in 2006
with which BBVA anticipated the trend initiated by the
sector two years later. In the last twelve months, the area has
reduced its workforce by 710 and the number of branches
by 253 in Spain. The market share in offices continued to
fall to 7.8% as of 31-Dec-09 (last data available).
Operating income reached €1,076m, only €18m less
year-on-year. As a result, in a market with falls in GDP in
recent months, the operating result generated by Spain and
Portugal continued to display great resistance, which,
together with the objective of maintaining the level of
coverage, has meant that the year-on-year increase of
impairment losses on financial assets (up 25.1%) only
constitutes 22% of the quarterly operating income. All this
fed into a €587m attributable profit and a return on
equity (ROE) of 30.9%, which is still high.
Finally, the recognition of extraordinary nonperforming
assets carried out in the fourth quarter of 2009 amounting
to €1,817m, as well as the 20.4% decrease in gross
additions and the 17.4% increase of recoveries in the
quarter, have enabled the NPA ratio to remain at 5.1%.
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.
As of 31-Mar-10, the unit’s loan-book stood at
€101,226m, a drop of 1.5% year-on-year, and customer
funds were at €107,441m (€110,246m the previous year).
The resilience of the operating income, which stands at
€618m (down 0.8% year-on-year), is explained by the
maintenance of the levels of activity, keeping spreads wide,
and containment of costs. The attributable profit stands at
€378m (down 5.9%).
Within the framework of the drop in lending granted by
the sector as a whole, BBVA increased its market share to
12.7%, according to the last data available as of
28-Feb-10, in new sales of mortgages to households,
professional practices, the self-employed, retailers, the
farming community and small business. Specifically, first
quarter residential mortgage new production increased
€2,462m (up 12.8% year-on-year), as a result of several
commercial initiatives such as the new Sí damos Hipotecas
(Yes, We Give Mortgages) campaign, the relaunch of the
Ven a Casa (Come Home) campaign and a greater product
selection online. This portfolio’s stock increased 2.5% in
the same time period as compared to a 0.4% fall in the
sector, which correlated to a sustained improvement of
BBVA’s market share of 41 basis points. Consumer finance,
at €6,400m, fell 19.4% due to the weakness of demand: a
result of the process of deleveraging of households and the
strict control of risks being carried out.
| 1Q10 |
33
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