Banking Business

The banking business generated a net attributable profit of €304m over the quarter, a year-on-year increase of 26.4%. The most significant aspects for each of the banks, as well as the year-on-year figures for the main activity indicators and earnings, are detailed below.

Activity continues strong in Argentina. Lending grew by 38.5% and gained 7 basis points in market share over the previous 12 months (according to January figures). On-balance-sheet customer funds were up 24.7%. As a result, recurring revenue (net interest income plus net fees and commissions) was up 42.3%, and offset lower NTI compared with the first quarter of 2011. This explains the increase of 39.7% in gross income. Expenses were affected by the inflation level in the country and the expansion plan underway in the unit, combined with a fall in loan-loss provisions due to the excellent performance of the loan portfolio. Thus, they contributed to the increase of the net attributable profit, up 67.9% to €58m. Finally, it is worth noting that BBVA Francés successfully placed class 2 negotiable bonds for 34.5 million dollars on the capital markets. This amount is greater than initially planned, due to high investor demand.

In Chile, BBVA and Forum had a year-on-year gain in market share in the private individuals segment, particularly consumer finance (up 93 basis points according to January 2012 data) and mortgage lending (up 28 basis points). This led to growth in total lending of 18.7%, as a result of the unit’s strengthening of its credit card business. In fact, it is the bank that has grown this product most within the Chilean financial sector (according to 2011 data). Onbalance-sheet customer deposits were up 21.8%. As a result, net interest income increased by 4.9% and gross income decreases by 2.7% (due to lower NTI and income from fees owing to market conditions). Expenses reflected the expansion plans underway and, combined with an increase in loan-loss provisions resulting from greater lending activity, resulted in a net attributable profit of €36m over the quarter (up 9.0% year-on-year).

Other highlights in the quarter were: BBVA Chile received the Por un Chile Sin Pobreza (For a Chile without Poverty) certificate from the government for the Niños Adelante (Forward, Children) and Emprendedores Sociales (Social Entrepreneurs) programs. It has also been honored as best institution in SME financing in 2011 by the State Guarantee Fund for SMEs (FOGAPE).

In Colombia, BBVA also maintains a significant rate of growth in lending activity, with a year-on-year gain in market share of 19 basis points), particularly in the private individuals segment. Within this segment, credit cards were up 145 basis points, consumer finance 113 basis points, and mortgage lending 12 basis points. As a consequence, the evolution in net interest income was very positive (up 18.6%) and combined with the good performance of income from fees and commissions (up 9.4%) and NTI, generated 29.4% growth in gross income. The falling trend in NPA and loanloss provisions continues. As a result, the net attributable profit for the quarter was up 62.6% year-on-year to €68m. In corporate responsibility, the 2011 Report received an A+ classification from Global Initiative Reporting (GRI) for the second year in a row.

In Peru, there was a notable increase in all the revenue lines, thanks to increased economic activity, which generated a noteworthy 18.7% growth in gross income. The significant year-on-year gains in market share in corporate lending (up 164 basis points) and credit cards (up 125 basis points) explain the rise of 110 basis points in market share in lending. On-balance-sheet customer deposits were up 21.9% and gained 104 basis points in market share in the same period, with a notable rise in time deposits (up 350 basis points). Expenses continue to reflect the expansion plans underway, while loan-loss provisions have increased at the rate of increased lending activity. As a result, the net attributable profit for the quarter was up 18.5% to €39m.

Global Finance magazine has named BBVA Continental “Best Bank in Peru” in the 19th Best Banks in Latin America awards, for its notable results in 2011. BBVA Continental has now received this award for nine straight years, in which it has always stood out for its excellent management and dynamic business. In addition, for the first time BBVA Continental was leader in quality among the biggest banks in the Peruvian system, according to a study by Ipsos APOYO.

BBVA Provincial maintains a high rate of growth in its business. Lending was up 48.9% and onbalance-sheet customer funds 53.8%, which closely matches the 53.8% rise in the net interest income. NTI has fallen with respect to the same period last year, as the figures include the effect of the revaluation of US dollar positions in the first quarter of 2011. Despite this, gross income was up 15.1%. Net attributable profit was up 12.6% to €83m, affected by increased expenses caused by the high inflation rate and the positive course of loanloss provisioning.

Among the other banks, BBVA Panama had a net attributable profit of €8m, BBVA Paraguay of €2m and BBVA Uruguay of €12m (including the contribution from Crédit Uruguay).

South America. Data per country (banking business, pensions and insurance)

(Million euros)

Operating income Net attributable profit
Country 1Q12 Δ% Δ% at constant
exchange rate
1Q11 1Q12 Δ% Δ% at constant
exchange rate
Argentina 112 31.3 31.8 85 58 22.1 22.6 48
Chile 147 12.9 9.9 131 83 27.5 24.2 65
Colombia 143 85.1 69.9 77 84 91.7 75.9 44
Peru 156 37.3 27.0 114 46 44.7 33.8 32
Venezuela 232 10.3 5.7 211 85 15.7 10.9 73
Other countries (1) 22 11.3 3.1 19 14 (15.8) (21.6) 17
Total 813 27.6 21.8 637 370 32.9 27.1 279
(1) Panama, Paraguay, Uruguay, Bolivia and Ecuador. Additionally, it includes eliminations and other charges.