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| 1Q10 | BBVA Group highlights | Group information | Risk and economic capital management | Business areas | Corporate responsibility |
the mix of the loan portfolio towards products with a
lower risk and a narrower spread. Fee income was €280m,
also similar to the first quarter of 2009, due to reduced
activity in credit cards and transactional items. Net trading
income fell by 11.6% to €109m, while other
income/expenses was up 25.2%. As a result, gross income
for the quarter was €1,288m, 0.9% down on same period
last year, although 5.1% more allowing for the variation in
the exchange rate.
BBVA Bancomer has designed a number of expansion and
transformation plans for the next three years to take
advantage of the long-term growth opportunities offered
by Mexico. These will involve growth in investment, which
will be reflected in a slight increase in costs over this year.
In the first quarter, operating costs were €448m, 6.2% up
on 12 months ago, and the cost/income ratio was 34.8%.
Thus the operating income stood at €840m, 4.3% under
the figure for the first quarter in 2009 (+1.5% at constant
exchange rates).
In the first three months of this year there has been an
improvement in asset quality, with a year-on-year fall of
12.8% in impairment losses on financial assets, which
closed the quarter at €331m. This has led to an
improvement in the risk premium, which has fallen to
4.03%, and an improvement in the NPA ratio, which
closed the quarter at 4.1% (4.3% as of 31-Dec-09).
Coverage was 131%, compared with 130% on 31-Dec-09.
Together with the effect of a year-on-year growth of 28.6%
in taxes as a result of the increase in the income tax and
value added tax rates applied from January 2010, the
quarterly attributable profit was €347m.
BANKING BUSINESS
Despite the slow economic recovery, BBVA Bancomer
remains the leading bank in Mexico. Throughout the first
quarter of the year it has managed to strengthen its
franchise through a positive performance that has been
superior to the rest of the industry.
In this way, gross lending to customers, not including the
old mortgage portfolio, remains at similar levels to those of
the same date in 2009, at €29,791m. Since the end of
2008, the composition of the portfolio has been moved
towards items with lower risk levels. The commercial
Spain and Portugal
Mexico
South America
The United States
Wholesale Banking & Asset Management
Corporate Activities
book, which includes loans to major corporations, small
and medium-sized enterprises, financial institutions and the
public sector, represents 45.5% of the total, while the
residential mortgage book, which includes developers,
represents 33.9%. Consumer finance continues to lose
ground and ended at 20.6% of the total as of 31-Mar-10.
The commercial book has performed positively, with a
balance of €13,555m and a year-on-year increase of 4.4%,
boosted mainly by more finance to small companies, which
was up 15.5% on the same period the previous year, to
€1,115m. This positive performance is reflected in a
quarterly rise of 51 basis points in the market share of
BBVA Bancomer’s commercial book. There has also been a
significant increase in lending to government bodies, with
an increase over the year of 50.5% to €2,970m, and an
increase in the market share over the quarter of 134 basis
points.
The balance of residential mortgages was €10,092m as of
31-Mar-10, with greater activity in lending to home
buyers, with a growth of 6.2% on the first quarter of
2009. BBVA Bancomer has maintained its leadership in
new mortgages. In the first quarter, it has granted 6,681
loans to individual customers and 22,259 homes have been
financed through loans for housing developers. Through
Banca Hipotecaria, BBVA Bancomer continues to extend
its range of products in order to increase lending to home
buyers. This has been reflected in the launch of its Alia2
Plus loan in partnership with Fovissste (Fondo de Vivienda
del Instituto de Seguridad y Servicios Sociales de los
Trabajadores del Estado). The new loan allows affiliates to
increase the amount of their loan and buy a home at a
fixed interest rate with set repayment amounts. The first
quarter of the year also saw the launch of the product
Bancomer Cofinavit AG in similar conditions, this time in
partnership with Infonavit (Instituto del Fondo Nacional
de la Vivienda para los Trabajadores).
Consumer finance showed a year-on-year fall of 11.4% as
of 31-Mar-2010, less than in previous quarters and than
the fall in the system as a whole. Income from credit card
purchases actually increased by 10% in the first quarter of
the year compared with the same period in 2009. In
addition, new personal loans recovered significantly in the
first months of 2010, with a year-on-year increase of 46%.
The increase in personal loans means that BBVA Bancomer
had not only maintained its leading position, but has
actually increased its market share by 23 basis points
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