40
BUSINESS AREAS 2Q09
Mexico
The commercial portfolio (loans to corporations, SMEs,
small businesses, the government and other banking
institutions) showed a year-on-year increase of 12.9%.
Lending to SMEs performed especially well, rising 17.9%
against June 2008. Through its Corporate & Investment
Banking unit, Bancomer was involved in 11 debt issues and
3 syndicated-loan issues, with placement values accounting
for 22.7% of the total amount issued in the half year
(Bloomberg) and 21.2% of the local market for syndicated
loans (Thompson Financial). This is the third quarter
running that it has arranged the largest volume of such
issues.
The consumer and credit-card loan book has shrunk
10.7% against the previous year, reaching €6,443m. This
stems from the current economic circumstances and the
stricter policy for approving loans and selecting customers.
This is why its share of total lending went down from 29%
in June 2008 to 25% at the end of the second quarter
2009. The NPA ratio stood at 3.9%, 35 basis points more
than on 31-Mar-09. Its rise was largely related to the
consumer and cards loan-book. Finally, the coverage ratio
was 137%, as compared with 150% on 31-Mar-09.
Customer funds (bank deposits, mutual funds, investment
companies and miscellaneous customer products) stood at
€43,875m. This 7.1% increase was driven by customer
deposits (current, savings and foreign-currency accounts)
which rose to €26,138m, growing 15.4% from June 2008
to June 2009. Time deposits performed especially well,
growing 11.5% in the same period. Funds gathered in
current accounts amounted to €14,417m, up 12.5% year
on year. This overall performance determined an attractive
composition on the funding side of the business:
current-account deposits are the largest portion of
customer funds, 32%, while mutual funds account for
24% and time deposits 20% of the total. The remaining
24% comprised repos and foreign-currency deposits.
The capillarity of the distribution network is the main
explanation for the positive performance of customer
funds. This, in turn, strengthens Bancomer’s liquidity
position and its market share of 32.9% in current account
gathering, the biggest of any bank and 186 basis points
higher than the previous year. The now traditional
two-week campaign to promote savings accounts (El
Libretón), attracted over €248m in balances over the ten
business days in which it was active, with 700,000 prizes
awarded. It is also worth mentioning the launch of a new
mutual fund for the upper income banking customers,
which invests in long-term government debt.
Finally, as part of its active balance-sheet management,
Bancomer issued subordinate debt worth 3 billion pesos
with a 10-year tenor and a spread of 130 basis points
above the reference rate.
Pensions and Insurance
In the first six months of 2009, the Pensions & Insurance
business in Mexico generated €125m in attributable profit.
This was 69.3% up on the same period of 2008.
The pension business, Afore Bancomer, reported an
attributable profit of €20m, with year-on-year growth of
35.6%. The factors driving this growth continue to be the
excellent sales and marketing, plus very strict control over
costs. The improved performance of the financial markets
in recent months also helped, albeit not as much as in
other countries within the region.
In the insurance business, the three companies (Seguros
Bancomer, Pensiones Bancomer and Preventis) continued to
boost sales, although the composition of their business
volumes has changed from what it was a few years back.
During the first half, the slowdown in growth of products
linked to the banking business was offset by faster growth
in the rest of the insurance lines, with more savings
products being sold. The volume of business written during
the first six months was €396m (premiums sold, including
savings products). This was a year-on-year increase of
17.3%. The half-year net attributable profit came to
€104m (up 77.7% against the same period of 2008).
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