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| 1Q10 | BBVA Group highlights | Group information | Risk and economic capital management | Business areas | Corporate responsibility |
With regard to its capital base, BBVA has
generated 22 basis points of core capital in the
first quarter of 2010, of which 7 points are
consumed by the recent devaluation of the
Venezuelan bolivar fuerte. As a result, the core
ratio was at 8.1%, reflecting the Group’s capacity
to generate recurrent capital organically in the
current adverse economic situation and thus
maintain its strategies of developing its
businesses.
As of 31-Mar-10 BBVA also held €1,356m in
latent capital gains on its more liquid portfolios
of equity holdings. The above amount does not
include capital gains in other portfolios.
The Annual General Meeting (AGM) was held on
March 12, 2010, with a high rate of attendance
(59.31%). It approved a final dividend payment
of €0.15 per share, which was paid on April 12,
so that the total shareholder remuneration
corresponding to 2009 was €0.42 per share.
At the start of this year, the Group has been
particularly active in the wholesale markets.
There have been a number of issues at very
competitive rates, which will allow for the
coverage of a good deal of the estimated funding
requirements for 2010. In addition, it is worth
highlighting their diversity, both in terms of the
type of instruments and the markets and
maturities used, and the positive reception by the
markets, with a high participation by
international investors.
In Spain and Portugal, the main component of
revenues has once more been net interest income,
which increased at a year-on-year rate of 1.6%,
while the rest continued to be affected by weak
economic activity. Although operating costs
continued to be kept in check (–1.1%
year-on-year), operating income showed a slight
fall of €18m compared with the first quarter of
2009. However, the most important point with
regard to the operating income is the amount, at
over €1 billion, and its recurrent nature, despite
the duration of the crisis. This, together with
greater loan-loss provisions, have resulted in a net
attributable profit of €587m (–6.5%
Relevant events
Earnings
Business activity
Capital base
The BBVA share
year-on-year). Finally, the NPA ratio has been
maintained at 5.1%.
In Mexico, pre-tax profit was €485m, 4.7% up
on the first quarter of 2009, due to the exchange
rate variation: in constant exchange rate terms it
was 1.3% down. This was due to a combination
of factors: the macroeconomic situation of slow
recovery; the change in the mix of the loan
portfolio towards products with a lower risk and
narrower spread, with a negative impact on the
net interest income but positive on loan-loss
provisions; and to expansion and transformation
plans in the area. However, the increase in the tax
rate, due to regulatory changes, has caused the
attributable result of €347m to fall even further
(–9.7% in constant terms). It is worth highlighting
the improvement in asset quality, as can be seen in
the positive trend in the risk premium and the
NPA ratios and coverage during the quarter.
South America managed a positive rate of growth
in profits in the quarter, thanks to the good
performance of revenues, supported by the
recovery in activity and notable moderation in
costs and provisions. The significant good level of
asset quality at the end of 2009 was maintained.
In all, the attributable profit for the quarter was
€233m, a year-on-year increase of 26.1% and a
return on equity (ROE) of 43.4%.
The area of the United States includes the branch
that the parent bank has in New York, and
incorporates all the Group’s assets and liabilities
in the country and in the associate state of Puerto
Rico. It had a year-on-year growth in operating
income of 6.4%. Allowing for impairment on
financial assets, the attributable profit in the
quarter was €54m. The integration of Guaranty
into BBVA Compass was completed successfully in
the initial months of 2010.
The results of Wholesale Banking & Asset
Management (WB&AM) were very favorable,
thanks to the increase in revenues, restricted costs
and a low level of loan-loss provisions. As a
result, the attributable profit in the area was
€284m, 20.3% up on the first quarter of 2009.
The increase in the CNCB holding from 10% to
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