Spain and Portugal highlights in the
second quarter
• Highly recurrent and sustainable earnings, based on
re-pricing and despite slowdown in lending.
• New improvements in efficiency.
• Vigorous effort to place ICO credit lines.
• Good performance by savings & current accounts.
• Increasing leadership in mutual funds.
The Spain & Portugal Area offers a distinctly different and
innovative approach to banking through specialised branch
networks where the customer is the prime focus of
business. It handles the financial and non-financial needs of
individual customers (Spanish Retail Network), including
the upper-middle market segment (BBVA Patrimonios).
SMEs, large companies, and public and private institutions
are managed by the Corporate & Business Banking Unit
(CBB). Other specialised units handle consumer finance
and internet banking (the Consumer Finance Unit) and the
bancassurance business (BBVA Seguros). The Group’s
activities in Portugal are managed by BBVA Portugal.
In the second quarter of 2009 domestic demand fell and
family savings rose. This led to moderate growth in lending
to households and businesses and to greater activity in
fund gathering, especially in conservative and highly liquid
products. The downward trend of benchmark interest rates
caused customers to shun time deposits in favour of
current and savings accounts, bonds and guaranteed
mutual funds.
In this context the area managed to consolidate its high
level of sustainability and recurrent generation of earnings
Spain and Portugal. Operating income
(Million euros)
+5.9%
1Q 2Q 3Q 4Q
1Q
2Q
2008
2009
2,206 2,335
1,074 1,132 1,143 1,139 1,135
1,201
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (1)
Off-balance-sheet funds
•Mutual funds
•Pension funds
Other placements
Customer portfolios
ROE (%)
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) Including collection accounts and individual annuities.
by applying its particular business model and achieving
further improvements in efficiency. This model is the result
of a transformation plan implemented three years ago to
control costs and the area’s prudent risk policy. During the
quarter, operating income rose 5.9% and this increase
would be 7.5% if net trading income, which depends on
market conditions, were excluded. Efficiency (measured by
the cost/income ratio) improved to 34.4% (37.2% at the
same point last year) and the non-performing asset ratio
was 3.7%. Furthermore the area reaffirmed its
commitment to the community by launching new products
and services that improve the financial and non-financial
conditions of its customers.
On 30-Jun-09 the loan portfolio stood at €206,896m
(€207,867m a year earlier) after the area reduced its
position in sectors with greater risk exposure. Nonetheless
Spain and Portugal. Net attributable profit
(Million euros)
–1.7%
673 619 649
624
1Q 2Q 3Q 4Q
1Q
2Q
2008
2009
1,292 1,270
30-06-09
2Q09 BUSINESS AREAS
Spain and Portugal
Δ%
206,896 (0.5) 207,867
97,896 (0.3) 98,228
40,985 (12.8) 47,007
31,227 (16.7) 37,485
9,758 2.5 9,522
,
6,272 19.8 5,237
11,721 (4.5) 12,273
36.0 36.1
34.4 37.2
3.7 1.2
55 142
657
30-06-08
613
29
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