following comments refer to the constant rates, unless
otherwise mentioned.
In the first six months of 2009, during which the
macroeconomic environment has been much less favourable
than in previous years, Mexico continued to increase its
most recurrent revenues, ie, its net interest income, which
rose 5.2% year on year, to reach €1,683m. The main
driving factors were good sales activity and active price
management. Sales activity is reflected in the growth in
current-account balances, which rose 12.5% year on year,
and gross lending to customers, which was up 4.6% against
the previous year. Positive price management has offset the
current product-portfolio’s lower contribution to net
interest income. The percentage of higher-spread products
within the offering has gone down (namely, consumer credit
and cards), as the share of products with a lower spread has
risen (lending to SMEs, corporations and mortgages).
Other revenues have also performed well. Fee income stood
at €535m, with a slight 1.7% dip from the January-June
figure for 2008. This was due to lower business volumes,
above all in credit cards. Net trading income rose 2.0%
during the same period, reaching €221m. This is an
excellent figure, as revenues from the first half of 2008
included income from the VISA IPO. Finally, revenues from
the insurance and pension businesses went up 32.3% year
on year. All this fed into a gross income figure of €2,503m.
This was up 4.5% against the same period of 2008.
Operating costs stood at €786m in the first half of 2009,
practically flat (up 0.6%) year on year and significantly
below the last twelve months’ inflation. Operating income
thus rose to €1,717m, up 6.4% year on year (up 12.7%
excluding revenues from VISA IPO) and significantly
higher than gross income. The increase in revenues and the
almost flat expenses enabled the cost-income ratio to hit a
new record of 31.4%. This is an improvement of 94 points
against the figure from the first quarter of 2009 and
consolidates Bancomer’s position as the most efficient bank
in the country.
Impairment losses on financial assets were €740m at the
end of June. This 87.7% increase, year on year, was mainly
due to the inflows from consumer and cards, reflecting the
current circumstances. Nonetheless:
The shift in the mix towards lower-risk products
(lending to SMEs, corporations and mortgage loans)
will dampen further growth in impairment losses.
The most recurrent revenues (net interest income and fee
income) are still three times the impairment losses on
financial assets.
Bancomer’s cost of risk is lower than that of its main
competitors, due to its better, more prudent risk
management.
All the above gave the Group an attributable profit of
€724m to the end of June 2009. Bancomer’s ROE in
March stood at 22.6% which compares very favourably
with the average of the system (14.9%).
Finally, the Euromoney magazine awarded the BBVA the
title of Best Financial Group in Mexico for 2009.
Banking business
Despite the difficult international and domestic economic
environment and the situation facing most large financial
groups world-wide, Bancomer has maintained its
soundness, strength and leadership on the Mexican
market. The international agencies, Moody’s and Fitch,
both ratified this in May, when they confirmed its global
and local rating. They recognised Bancomer’s optimal
management of its balance sheet, its sound performance and
its asset quality and capital adequacy as outstripping those
of its peers. This has enabled the bank to keep its access to
credit open and thus comply with its commitments to
support growth amongst households and the country’s
productive economy. Bancomer was also the only bank in
the top ten of the 500 biggest companies in Mexico,
according to the ranking of the local magazine, Expansion,
in coordination with the CNN. As the eighth biggest, it
moved up three notches on the ranking from last year.
In June 2009, Bancomer’s gross customer lending showed
a balance of €28,597m. This was up 4.6% on the same
date of the previous year. Bancomer thus continued to
outperform the rest of the market, increasing its share by
97 basis points against June 2008, up to 30.8% (latest
available data). Mortgage lending was the fastest growing
item, rising 13.7% year on year (excluding the old
mortgage portfolio) to €8,950m. Bancomer’s share of the
mortgage market at the end of May was 34.5%. This rose
300 basis points, reinforcing its leadership in mortgage
origination. During the first half of 2009, it placed 18,280
mortgage loans with home buyers and financed 41,938
homes through secured loans to developers.
2Q09 BUSINESS AREAS
Mexico
39
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