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| 1Q10 | BBVA Group highlights | Group information | Risk and economic capital management | Business areas | Corporate responsibility |
€24,805m, practically the same as on 31-Mar-2009 (+0.5%
year-on-year) and 3.8% up last year’s low (September). The
high level of liquidity in the region and the still moderate
financing needs resulting from the incipient recovery in
credit continue to favor the selective commercialization of
customer funds, particularly in current and savings
accounts, which increased by a year-on-year 22.5%.
Customer funds from banking businesses (including mutual
funds) closed the quarter at €33,809m, 8.7% up on the
figure for March 2009. Pension managers also performed
well, with assets under management of €33,693m as of
31-Mar-2009, a year-on-year growth of 27.6%. The volume
of premiums issued by insurance companies continues to
recover, following the slowdown in products linked to
banking activity in the first half of 2009.
The reactivation of lending has been accompanied by an
active maintenance of spreads in all the entities, despite the
increased competitive pressure in a number of countries.
Both elements, activity and spreads, mean that the trend in
the net interest income remains clearly positive, at €556m
in the first quarter, 12.7% more than in the first three
months of 2009. There is also a favorable trend in net fee
income, at €216m (+11.3% year-on-year), with an upturn
in transactional accounts, but still a moderate performance
in business lines related to securities and wholesale
businesses. Net trading income was also high this quarter,
at €184m, fuelled by the valuation of Venezuela’s positions
in U.S. dollars due to the devaluation of the Bolívar. Thus
gross income was €934m euros, 16.0% up on the same
period last year.
The policy of containing and moderating expenses continues
to be one of the key factors in the area. In the first quarter,
operating expenses stood at €368m euros, a year-on-year
increase of 9.3%, clearly below the average level of inflation
in the region. This has led to wider operating jaws and thus,
the cost/income ratio closed the quarter improving 2.4
percentage points (homogeneous euros) on the figure for 31-
Mar-09 to 39.4%. It also means the operating income
increased to €566m, 20.7% up on the same period in 2009.
In line with the trend in 2009, asset quality in the area
continues to be high, thanks above all to rigorous risk
screening and the notable capacity for recovery shown by all
the banks. Thus both the volume of non-performing assets
(€785m) and the NPA ratio (2.8%) are practically the same
as the figure for December 2009, while the coverage ratio is
higher than the levels for the last quarter (132%). At the
Spain and Portugal
Mexico
South America
The United States
Wholesale Banking & Asset Management
Corporate Activities
same time, impairment on financial assets was €107m, a
very similar figure to that in the same period of 2009.
BANKING BUSINESSES
In the first quarter of 2010, the banking business generated
a net attributable profit of €194m, 17.3% more than in
January-March 2009. Below are most relevant details for
each bank.
BBVA Banco Francés in Argentina posted a net
attributable profit of €32m. Its year-on-year comparison is
heavily influenced by the exceptionally low tax rate in the
first quarter of 2009. Thus the pre-tax profit was €63m
(+14.9% year-on-year). Particularly worth highlighting is
the improvement in the net interest income (+26.1%),
which has been extremely influenced by the improvement
in spreads, and the recovery in lending (+9.6%, excluding
lending to the public sector). Income from fees also
performed positively (+22.4%) and the rise in costs was
kept in check (+17.5%). In all, the net operating income
rose 14.5% year-on-year to €67m.
In Chile, BBVA and Forum contributed a net attributable
profit of €28m, 10.3% up on the first quarter of 2009,
despite the negative effect the high volume of capital gains
through the sale of the securities portfolio in the first three
months of 2009 has had on the year-on-year comparison.
It is worth highlighting the improvement in the net interest
income (+30.5% year-on-year), influenced by the positive
impact of the retail banking, specially in terms of consumer
finance (+9.2%) and current accounts (+27.5%). A less
negative backdrop in interest rates and inflation also
contributed to this improvement. In addition, it is worth
highlighting the positive performance of fees (+29.2%) and
the year-on-year fall in costs (–5.2%) as well as a lower
pressure from loan-loss provisions (–43.5%).
The performance of BBVA Colombia is influenced by the
delay in the country’s economic recovery and the continued
downward slide in interest rates. These elements have had
an adverse impact on net interest income (–2.0%), despite
spreads being maintained. The capital gains from the sale
of the securities portfolio in the first quarter of 2009 also
had a negative effect. These falls were compensated both
by moderation in costs, which only increased by 1.9%, and
by the reduced need for loan-loss provisions (–23.1%),
which were in line with the reduction in non-performing
loans (non-performing assets fell by 14.8% compared with
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