The application of SICAD I in Venezuela and the depreciation of the Argentinean peso in January 2014 had an impact on each of the items on the area’s income statement; however, they were mitigated from the point of view of net attributable profit thanks to the Group’s active management of hedging. The most significant aspects of earnings for the quarter are as follows:
- Good performance of gross income, which rose in year-on-year terms by 25.2% thanks to excellent recurring revenue, due to the strength of activity mentioned above and good price management.
- The high inflation in some countries in the area and the technological expansion and transformation plans that are being carried out in the region continue to explain much of the year-on-year increase (up 22.6%) in operating expenses.
- Impairment losses on financial assets grew at a similar rate to lending, with the cumulative risk premium as of 31-Mar-2014 at 1.23% (1.50% in 2013).
- Overall, South America generated a net attributable profit in the first quarter of 2014 of €244m, a year-on-year increase of 16.0%.
- This can be broken down by country as follows:
- Argentina posted a net attributable profit of €43m, underpinned by progress in revenue, which was boosted by the revaluation of dollar positions due to the aforementioned depreciation of the Argentinean peso, offsetting the increase in expenses and loan-loss provisions.
- Chile, thanks to good inflation figures, increased its net attributable profit by 96.4% to €36m, leveraged on the increase in net interest income and NTI.
- In Colombia, the strength of net interest income, thanks to good business activity, explains the year-on-year rise of 16.2% in gross income. Net attributable profit reached €61m, a decline of 1.3% owing to the increase in expenses and loan-loss provisions.
- In Peru, increased recurring revenue has partially offset the rise in expenses and loan-loss provisions (the latter in line with increased activity) and led to a net attributable profit of €36m (down 2.9% year-on-year).
- Venezuela has posted a higher result than in the same quarter last year (€57m, up 30.0% year-on-year), as revenue continued to grow strongly and offset increased expenses and loan-loss provisions.
South America. Data per country
(Million euros)
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Operating income | Net attributable profit | ||||||
|---|---|---|---|---|---|---|---|---|
| Country | 1Q14 | Δ % | Δ % at constant exchange rates |
1Q13 | 1Q14 | Δ % | Δ % at constant exchange rates |
1Q13 |
| Argentina | 99 | (4.9) | 49.5 | 104 | 43 | (4.5) | 50.1 | 45 |
| Chile | 85 | 18.5 | 43.5 | 72 | 36 | 62.2 | 96.4 | 22 |
| Colombia | 131 | 1.7 | 18.2 | 128 | 61 | (15.1) | (1.3) | 72 |
| Peru | 144 | (9.2) | 2.7 | 159 | 36 | (14.2) | (2.9) | 41 |
| Venezuela | 189 | (30.8) | 52.5 | 273 | 57 | (41.0) | 30.0 | 96 |
| Other countries (1) | 18 | (28.9) | (22.6) | 26 | 13 | (46.7) | (42.4) | 24 |
| Total | 666 | (12.6) | 27.1 | 762 | 244 | (18.5) | 16.0 | 300 |
