South America highlights in the
fourth quarter
• Growth in all income lines.
• Excellent year-end earnings from both banking and
the pensions & insurance businesses.
• Lending up 4.2% quarter on quarter.
• Improved NPA and coverage ratios than in the third
quarter.
The South America area manages the BBVA Group’s
banking, pension and insurance businesses in the region.
As expected, Latin America initiated its economic
recovery in the second half of 2009. Unlike what
happened in earlier crises, this time the large majority of
Latam countries have implemented expansive economic
policies without triggering imbalances that might
jeopardise the recovery. Increasingly sound public
finances, controlled inflation, the credibility that central
banks have gained and the greater flexibility of the
forex markets have been fundamental factors in the
region’s improved performance. Stronger commodity
prices and lower risk aversion have also contributed to
the recovery. The rise in commodity prices took some
pressure off the countries with most limited access to
international credit, such as Argentina and Venezuela.
The financial boost it supplied enabled them to avoid
tax adjustments that could have further aggravated the
recession. The financial systems in the region showed
enormous strength. Supported by expansive monetary
policies, as mentioned, they had few problems in
weathering the tight access to international funding at
the end of 2008. They appeared unscathed by the drop
Relevant business indicators
(Million euros and percentages)
Customer lending (gross)
Customer deposits (2)
Off-balance-sheet funds
• Mutual funds
• Pension funds
ROE (%)
Efficiency ratio (%)
NPA ratio (%)
Coverage ratio (%)
(1) At constant exchange rate.
(2) Including debt certificates.
in activity and the increase in NPA ratios at the
beginning of the year, which were anyway not as intense
as elsewhere in the world or as in other crises.
Exchange rates in the last quarter did not vary
significantly against the US dollar. The exchange-rate
impact remained slightly positive both for the income
statement and for business volumes. 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 a difficult year, the area performed well, despite
progressive slowdown in volumes. There was a significant
growth in revenues; costs were gradually moderated and
a comfortable level of asset quality was maintained. All
this fed into an €871m attributable profit in 2009. This
was up 21.8% year on year, sustaining a high level of
return on equity (ROE): 40.2%.
31-12-09
4Q09 BUSINESS AREAS
South America
South America
Δ% Δ% (1)
26,223 3.8 (1.6) 25,255
31,529 7.3 3.0 29,373
38,744 50.0 30.4 25,831
2,640 103.0 85.4 1,300
36,104 47.2 27.6 24,531
40.2 36.9
40.6 44.5
2.7 2.1
130 149
31-12-08
49
To view a Ceros magazine you need to have JavaScript enabled in your browser and have the flash player 8 or higher installed. To install the latest flash player, click the icon above, install the flash plugin and then click here to refresh this page.