36
BUSINESS AREAS 2Q09
Wholesale Banking & Asset Management
For the fifth year running the Global Trade Finance unit won
the Trade Finance Magazine prize for best trade finance bank
in Latin America. The unit signed a buyer’s credit with the
Hyundai Group, worth 3 billion yen, underwritten by KEXIM
(the Korean export credit agency). It also did $1,100m of
business with oil companies.
In the Global Transactional Services unit, the International
Financial Institutions unit has developed a product for
European correspondent banks that are not members of the
EBA-STEP2 interbank clearing house. This will allow them to
channel all their EU and European Economic Area payments.
In Mexico the unit carried out operations aimed at supporting
the growth of the Group’s customers in The Americas. It
granted a $2,300 million loan for the Bimbo Group to
purchase its US subsidiary and it participated in a syndicated
credit for Conmex (OHL Group) worth 12,500 million pesos.
In Mexico the Debt Capital Markets unit tops the ranking in
the local debt market.
In South America the area implemented a master plan in Peru
and Colombia to concentrate BBVA’s commercial management
on three aspects: customer focus, specialisation and global
reach. BBVA is also consolidating its position as the leading
bank in Latin America in the syndicated loan market.
Global Markets
This unit handles the origination, structuring, distribution and
risk management of market products, which are placed
through the trading rooms in Europe, Asia and the Americas.
In the first half of 2009 the unit’s revenues from customers
and its proprietary trading performed well. The unit took
advantage of special market conditions to continue
strengthening its business model around five basic principles.
These are customer franchise, proprietary products,
integration of teams in the value chain, the operational
platform and the risk management model.
The trend towards greater diversification and
internationalisation of business continues, producing excellent
results in business with European customers (Spain is not
included). This business grew 88% year-on-year. Fixed income
sales performed well, supported by interest-rate hedging
activities, and the Group consolidated its leadership as top
broker in the Spanish market with an 11.7% market share at the
end of June thanks to business with big institutional investors.
In the first half results of 2009, the Global Markets unit
generated gross income of €455m in Europe and New York
(up 19.6% year-on-year), operating income of €337m (up
29.4%) and net attributable profit of €240m (up 29.6%).
The unit continue to strengthen cross-border business between
the different regions where BBVA operates and cross-marketing
with other BBVA business areas, capitalising on existing
synergies and offering increasingly global services and products.
Asset Management and
other business
Asset Management is BBVA’s provider of asset management
solutions. It designs and manages mutual funds, pension funds
and a third-party fund platform.
At the end of June total assets under management in Spain
stood at €50,502m, an increase of 0.6% compared to a year
earlier. The factors behind this increase include the recovery in
capital markets in the second quarter.
Of the above amount, mutual funds account for €34,179m (of
which non-real estate funds are €32,556m). The total figure is
down 13.4% but this decline is less than the overall system,
which fell 19.9%. And it helped the unit to gain 0.16
percentage points of market share in the second quarter,
bringing the total to 20.4% and thus reinforcing the Group’s
leadership in the Spanish market. In the year so far the average
return on the unit’s funds is the highest among the seven top
managers, who together account for 64% of total volume.
The assets under management in pensions funds in Spain
stand at €16,323m, with a year-on-year rise of 1.2%. Of this
amount, individual plans account for €9,482m and employee
and associate schemes €6,841m.
In the second quarter the area launched a new third-party
fund platform. The new unit will be in charge of
complementing in-house products with a selection of third-
party funds for traditional and alternative investments.
At the end of June the portfolio of industrial holdings of the
Industrial and Real Estate Holdings unit contained latent
capital gains of €245m. The unit’s net attributable profit came
to €52m. This was 73.3% lower than the amount obtained in
the first half last year which saw the sale of the Group’s
holdings in Gamesa and Hispasat.
Lastly, a €35m dividend from CITIC was booked in the second
quarter. Apart from the agreements already signed to finance
car purchases and to develop private banking, the unit held its
first seminar with 50 executives from the Chinese bank
(CNBC) and managers from BBVA’s Global Markets. Working
groups were set up to promote common business lines.
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