Retail and Commercial Banking

This unit includes the Retail Network, with the household customers, private banking, small companies and retailer segments in the domestic market; Corporate and Business Banking (CBB), which handles the needs of the SMEs, corporations, government and developers in the domestic market; and other businesses, among which is BBVA Seguros.

As of 30-Sep-2011 this unit had a loan book of €192,274m, a fall of 2.5% on the figure for 30-Sep-2010. This is in line with the deleveraging process across the market as a whole, but with a smaller fall than average in the sector (down 3.5% according to the latest figures to August). This has enabled BBVA to preserve and consolidate its position in household and corporate lending, with gains in market share in residential mortgages and the lowest-risk corporate categories.

  • In fact, BBVA continues to gain market share in residential mortgage lending (up 8 basis points in 2011 and 17 basis points over the 12 months, according to the latest August figures) in a market in which new production to August is down 46% year-on-year to €23,965m. In this environment, BBVA’s new production was €3,935m in the nine months ended 30-Sep-2011, accounting for 13.6% of the new transactions in the sector, according to August figures. The personalized and special features of the Bank’s mortgage products respond to demand quickly and flexibly, while increasing the spread of new transactions by 86 basis points from December 2010 to the close of August. In all, the managed stock of mortgages to individuals was very stable at €77,825m as of 30-Sep-2011 (78,071m on 30-Sep-2010).
  • With respect to consumer finance, in the third quarter of 2011 there was significant growth in the PIDE Préstamo Inmediato instant loan facility designed to help households access finance, which increased its balance by 15.0% on the third quarter of 2010. The positive results of the campaign, launched the previous quarter, have led to an extension till the end of November. It has also helped increase the market share of new production by 16 basis points since December 2010. At the same time, an exclusively online campaign was launched in September aimed at helping to finance the purchase of used cars, given that used car sales have increased by 14.3% in the first half of 2011 and are expected to continue growing. In all, new production in this item reached €1,055m in the nine months ended 30-Sep-2011.
  • BBVA continues to be one of the most active banks in loan allocation under the ICO credit facility scheme, with an accumulated balance in the first three quarters of the year of €1,808m. It has increased its market share to 12.7% as of 30-Sep-2011. A new local-authority credit program was signed this quarter, with the aim of providing the liquidity needed by local government to pay debts pending with companies and the self-employed.
  • BBVA continues to support finance for the segment of the self-employed, retail trade, farming communities and small businesses to make it easier for them to access finance. Within the framework of the Plan Comercios (Retailer Plan), aimed at increasing customer loyalty, priority has been given to actions related to point-of-sale terminals as a key element for building up retailer loyalty. In the nine months ended 30-Sep-2011, the turnover of point-of-sale terminals amounted to €3,668m, an increase of 8.7% on the same period last year. Efforts continue to be made to win and maintain new customer groups, such as educational centers and private academies. Another example is the new agreement with the official IAC Automoción association of repair shops.
  • The balance of the finance granted to SMEs, corporations and public and private institutions at the close of September was down 1.7% year-on-year to €89,192m. However, it is worth noting that the yield on loans has increased 28 basis points on the figure for the previous quarter. In financing of working capital, €11,452m were granted in national and international factoring transactions, and €10,631m in accounts payable financing to 31-Aug-2011 (data from the Spanish Accounts Payable Association). These results consolidate BBVA’s leading position in both products.

Total funds under management increased their market share year-on-year as of 30-Sep-2011 as a result of the implementation of a profitable commercial products, combined with the capable management of the maturities of time deposits taken out 12 months previously. As of 31-Aug-2011, the latest available figures, the market share for households was 8.4% and for companies 8.9% (8.0% and 8.6% as of 31-Aug-2010), with an improvement in the spread of 57 basis points with respect to the fourth quarter of 2010. The total amount was €138,826m (€144,959m as of 30-Sep-2010). Once more it is important to highlight the good performance over the quarter of customer deposits, and thus the improvement in the liquidity gap in the area.

Current and savings accounts in the household segment were particularly buoyant. This positive note was basically due to the promotions launched in pay-roll and pension-linked accounts, which have attracted 36,461 new pay-roll deposits and 19,070 pension deposits over the quarter. In all, the market share is 9.3% in pay-roll accounts and 9.6% in pension accounts, with data as of 31-Aug-2011.

The offer of additional advantages according to loyalty has been maintained in time deposits as part of the customer-centric strategy. This quarter has been marked by a significant number of maturities of time deposits taken out in the third quarter of 2010. Appropriate management of these maturities has led to a maintenance rate of over 80%, with reductions in the cost of operations of around 100 basis points. The “Depósito BBVA UNO” has also been maintained as the main loyalty-building product, with an accumulated new production to 30-Sep-2011 of €1,475m. A number of different offers have been maintained to attract new customers, including the Depósito BBVA 11. As a result of all the above, the balance of time deposits increased by €9,275m over the last year and their average cost is 88 basis points below the market average (latest available figures to August).

In pension savings the Ahorro Asegurado (Guaranteed Savings) campaign launched in the second quarter is continuing successfully. New production in the third quarter of 2011 was €185m, 9% up on the previous quarter. In addition, the contributions to individual pension plans between July and September 2011 amounted to €66m, 5% up on the second quarter, with the most popular products being guaranteed pension savings (around 70%).

BBVA Private Banking ended the third quarter of 2011 with funds under management in Spain of €38,471m, 6.4% up on the same date last year, and with a growth in its customer base of 0.7%. The unit remains market leader in assets under management in SICAV (€2,666m), with a market share of 10.5% in September 2011, and 291 companies.

Covered savings continue to perform well in the insurance business, particularly the company insurance schemes, which have now become a model in the market, with €340m in written premiums (up 182% year-on-year). Individual fund premiums are also performing well, at €724m (up 225%). As a result, the volume of managed funds is €8,655m, an increase of 6.3% in the nine months ended 30-Sep-2011. The level of business in non-life insurance has been maintained, with premiums of €181m (up 4% year-on-year). Particularly notable is the growth in the car business, with 7 million premiums (up 25%). Overall, the total premiums written by BBVA Seguros in the nine months ended 30-Sep-2011 amounted to €1,462m (up 85% year-on-year). The company maintains its leading position in individual life insurance, with a market share of 11.0% of premiums at the end of June (latest available figures).

To sum up, the adequate management of volumes and, above all, asset and liability prices, have boosted the net interest income to €2,817m. Gross income as of 30-Sep-2011 amounted to €4,118m (4,696m as of 30-Sep-2010). With operating expenses remaining at practically the same levels as in January-September 2010, the operating income was €2,333m (2,906m a year ago). After making increased allocations of generic provisions, the net attributable profit amounted to €842m.