Mexico highlights in the fourth
quarter
• Operating income grew despite high-stress environment.
• Excellent cost-income ratio performance
• Pensions & insurance business developed strongly
• Bancomer is the only bank in Mexico certified to use
expected-loss internal modelling to calculate its
credit-card provisions.
• BBVA Bancomer named “Best Bank in Mexico” by
Euromoney.
This area comprises the banking, pension and insurance
businesses that the BBVA Bancomer Financial Group
operates in Mexico.
During the fourth quarter, the Mexican economy
continued to show gradual recovery. As in the previous
quarter, the most dynamic components of aggregate
demand were private consumption, public-sector
investment and thirdly, exports. Prudent fiscal and
monetary management and the sound Mexican financial
system are allowing domestic demand to recover sooner
than in previous downturns. The year-on-year decline in
GDP to the end of 2009 (6.8%E) is expected to be less
than the drop estimated to mid-year.
Annual inflation has continued to go down during the
last quarter, and the year ended with a rate of 3.6%.
This was due to low domestic demand, stabilisation of
the forex market and the favourable performance of
non-core components (agricultural and energy prices).
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
Off-balance-sheet funds
In this environment, the Bank of Mexico opted to
maintain the interest rate at 4.5% (base borrowing
rate).
• 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.
The peso exchange rate appreciated against the euro,
rising 4.3% against the 30-Sep-09 rate and 1.6%
against year-end 2008. However, comparing average
exchange rates, the Mexican currency depreciated 0.9%
quarter on quarter and 13.3% year on year. The above
said had a slightly positive impact on the area’s balance
sheet and a negative one on the income statement. To
get a clearer picture of real business performance in this
context, all comments below will refer to year-on-year
changes at constant exchange rates unless otherwise
indicated.
31-12-09
4Q09 BUSINESS AREAS
Mexico
Mexico
Δ% Δ% (1)
28,996 1.2 (0.4) 28,644
31,252 5.3 3.6 29,677
20,065 22.5 20.5 16,376
10,546 14.9 13.0 9,180
9,519 32.3 30.1 7,196
2,781 (1.7) (3.3) 2,830
5,042 (3.0) (4.6) 5,200
31.9 33.1
4.3 3.2
130 161
31-12-08
41
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