38
BUSINESS AREAS 2Q09
Mexico
Mexico highlights in the second
quarter
• Increased revenues despite country’s difficult
economic situation.
• Advantage over peers increased both in lending and
customer funds.
• A more conservative approach and the anticipation in
provisioning result into a lower cost of risk than its
competitors.
• Moody’s and Fitch ratified Bancomer’s credit rating.
This area comprises the banking, pension and insurance
businesses that the BBVA Bancomer Financial Group
operates in Mexico.
The second quarter of 2009 came up against a particularly
adverse set of circumstances: a complicated macroeconomic
situation, a drop in interest rates and the one-off negative
impact of the influenza A (H1N1) virus on domestic demand.
The Mexican economy is undergoing the fastest, most
intense adjustment of the last fifteen years. The fall in
business activity during the first half is only comparable to
those recorded in 1995. However, unlike earlier
downturns, this one has not been triggered by domestic
factors. On the contrary, some of the strengths built up
over the last few years are helping to mitigate the impact of
the crisis. Among these strengths are the prudent
management of public finances, the strength of the banking
sector, the control of inflation, the increasing reputation of
the Central Bank and consequently the moderate
adjustment in the purchase power of households, in
contrast to previous downturns.
Annual inflation continued to drop, reaching 5.74% in
June, as compared with the 6.53% figure at year-end 2008.
Mexico. Operating income
(Million euros at constant exchange rate)
838 777 802
793
1Q 2Q 3Q 4Q
1Q
2Q
2008
2009
+6.4% (1)
+12.7% without VISA revenues
1,615 1,717
(1) At current exchange rate: –6.4%.
842
876
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
Off-balance-sheet funds
• Mutual funds
• Pension funds
Other placements
Customer portfolios
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) At constant exchange rate.
(2) Excluding deposits and Bancomer’s Market unit repos.
Mexico’s Central Bank (Banxico) has brought down the
official interest rate to 4.50% from 8.25% at the end of
2008. Banxico explained that the recent slowdown in the
rate at which economic activity has been contracting, may
point to better performance for the second half of the year.
This could augur the beginning of the end in the
downward slide for reference rates.
The average exchange rate during the second quarter of
2009 was 13.35 pesos per dollar. This reflects a
year-on-year depreciation of 27.9%. Over the last twelve
months, the Mexican peso weakened 12.0% against the
euro in average exchange rates and 12.5% in end of the
period rates. This has a negative impact on the financial
statements for the area. The attached tables show
year-on-year change at current and at constant rates. The
Mexico. Net attributable profit
(Million euros at constant exchange rate)
836
440 396
1Q 2Q 3Q 4Q
1Q
2Q
2008
2009
(1) At current exchange rate: –23.7%.
–5.9% without VISA revenues
492
–13.3% (1)
30-06-09
384
Mexico
Δ% Δ% (1)
28,692 (8.5) 4.6 31,358
30,372 (4.0) 9.8 31,623
19,183 (6.7) 6.6 20,564
10,524 (12.8) (0.3) 12,064
8,659 1.9 16.5 8,500
2,979 (5.4) 8.1 3,149
- - - -
31.39 32.59
3.9 2.3
137 227
369
724
30-06-08
356
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