South America highlights in the
second quarter
• Sound performance of revenue lines.
• Expenses rising well below inflation.
• Attributable profit grew 29.0%.
• Euromoney rated BBVA best bank in Latin America.
The South America area manages the BBVA Group’s
banking, pension and insurance businesses in the region.
Year-on-year comparison of the business variables and
earnings in the area are impacted by the divestment of the
Consolidar health business and the State takeover of the
Consolidar pension fund, both of which took place in the
fourth quarter of last year.
The international crisis has continued to hit the region in the
second quarter, reducing the demand for its exports and
dampening domestic demand growth. The macroeconomic
situation, although far from as positive as it used to be, is
still better than in the developed economies and in other
emerging economies. Various factors are acting in the region’s
favour: the rise in commodity prices over recent months; a
reduction in risk aversion and the anti-cyclical policies the
region’s economic authorities have applied (through tax
measures and laxer monetary conditions). These have made it
easier to maintain higher liquidity and declines in interest
rates without weakening the local currencies against the US
dollar. (In fact, some of the previous quarters’ depreciation
has been reversed). Moreover, the financial systems in the
region continue to show very sound capital-adequacy
standards and good asset quality.
South America. Operating income
(Million euros at constant exchange rate)
863
438 426
1Q 2Q 3Q 4Q
1Q
2Q
2008
2009
(1) At current exchange rate: +35.2%.
431
+31.1% (1)
503
543
1,132
589
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
Off-balance-sheet funds
During the first half, the drop in the value of
Latin-American currencies against the US dollar has been
offset by the dollar’s strengthening against the euro. The
overall effect of this on the area’s financial statements has
been slightly positive, especially in the income statement.
As usual, the attached tables include columns with the
year-on-year changes at constant exchange rates, which is
what the following comments refer to.
During the first half of 2009, the area has earned an
attributable profit of €463m, ie, a year-on-year increase
of 29.0% (or 32.1% using current exchange rates).
Return on equity (ROE) was 42.8% (37.8% in the same
period of 2008). The highlights of the half year were the
control of costs and the rise in revenues, plus the high
asset quality and the capital adequacy of every unit in the
area.
• Mutual funds
• Pension funds
ROE (%)
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) At constant exchange rate.
(2) Including debt certificates.
South America. Net attributable profit
(Million euros at constant exchange rate)
359
185 189
174 185
1Q 2Q 3Q 4Q
1Q
2Q
2008
2009
(1) At current exchange rate: +32.1%.
+29.0% (1)
30-06-09
2Q09 BUSINESS AREAS
South America
South America
Δ% Δ% (1)
25,268 11.5 5.7 22,657
30,941 25.2 19.2 24,721
33,452 (2.5) (8.3) 34,314
1,887 16.0 9.3 1,627
31,565 (3.4) (9.2) 32,687
42.8 37.8
39.7 44.4
2.6 2.2
129 143
222
463
30-06-08
241
45
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