Banking Business

In the first nine months of 2011, the area’s banking business has generated a net attributable profit of €635m, 15.0% up on the figure for the same period last year. The most significant aspects for each of the banks are detailed below.

In Banco Frances in Argentina, the positive net interest income figures stand out, with year-on-year growth of 16.7% thanks to the excellent performance of the loan book, which was boosted by almost all the lines of business. There was a gain 44 basis points in market share over the last 12 months, according to data for August 2011. Particularly outstanding was the increased market share in consumer finance (up 99 basis points) and corporate lending (up 66 basis points). The high rate of growth in fees has been boosted by credit cards and income from transactional services which together with NTI also increasing due to the sale of assets, gross income year-on-year rose by 23.9%. Operating expenses were up by 24.1%, due to inflation and expansion plans implemented by the bank. At the same time, high asset quality has required only moderate loan-loss provisions. In all, these factors have led to net attributable profit of €109m, a year-on-year rise of 38.5%.

In Chile, BBVA and Forum have posted good net interest income figures, which were up 28.4% thanks to a significant increase in lending to private individuals, particularly in consumer finance (with a year-on-year gain of 115 basis points in market share) and mortgage lending (up 27 basis points). The downturn in NTI is the result of the high capital gains from the sale of asset portfolios in 2010. As a result of all these factors, gross income was up 17.0%. Including the expenses under the expansion plans carried out in 2011, together with the favorable level of loan-loss provisions, the net attributable profit amounted to €91m.

BBVA Colombia continues its strong pace of year-on-year growth in lending activity (up 29.2%), particularly in credit cards (up 56.1%) and consumer finance (up 47.5%). The bank has gained significantly in market share in these two items (up 116 and 126 basis points, respectively). Net interest income was up 6.9% and gross income by 2.8%, affected by lower NTI this the year compared with 2010. The increased expenses are largely the result of the impact of the tax on financial transactions and the wealth tax (which did not apply to BBVA in 2010). Loan-loss provisions and risk indicators continue to be positive. As a result of these factors, the net attributable profit in the nine months ended 30-Sep-2011 was €154m (up 4.6% year-on-year).

In Peru, Banco Continental also performed well during the quarter, as reflected in the year-on-year gains in market share in lending (up 118 basis points, thanks to the growth in credit cards and mortgages) and in customer funds (up 201 basis points). This growth in activity is reflected in the rise of 13.4% in net interest income, which combined with a 7.0% growth in fees and commissions has resulted in an increase of 5.4% in gross income. The rise in expenses can be explained by the bank’s expansion projects (28 new branches have been opened in the last 12 months). Finally, with stable loan-loss provisions, the net attributable profit amounts to €100m (up 4.1%).

The net attributable profit of Banco Provincial was €132m, 66.1% up on the previous year. The result is greatly influenced by the revaluing of US dollar positions held by the bank, as reflected in the line item of NTI (in 2010 there was a similar effect following the devaluation of the Venezuelan bolivar). Net interest income was up 57.7% as a result of the growth in business activity, particularly consumer finance (up 57.3%) and credit cards (up 63.3%), which increased their market share by 173 and 443 basis points, respectively. Operating expenses are growing in line with inflation and loan-loss provisions include increased generic preventive provisions.

Among the other banks, Panama had a profit for the nine months ended 30-Sep-2011 of €19m, Paraguay of €23m, and Uruguay of €8m (including the contribution of Crédit Uruguay).