BBVA Bancomer obtained high recurring revenue in the first quarter of the year. Net interest income amounted to €1,013m, with a year-on-year growth rate continuing to rise to 9.4%. This is due on the one hand to higher new production in those headings offering higher profitability, and on the other hand to good price management.
Fees and commissions income was in line with the increased pace of commercial activity and grew above inflation by 4.4% compared to the first quarter of 2011.
As for other revenue, NTI improved to 73 million, versus 45 and 34 million in the fourth and third quarter of 2011, respectively (both figures excluding the exchange-rate effect). However, the year-on-year comparison is negative as a result of the particularly high income registered in the first quarter of 2011. The other income and expenses heading also performed very well thanks to the excellent results posted by the insurance business.
Operating expenses maintained their average annual growth rate, which in this period stood at 9.6%, or €553m. They continue to reflect the investment made in infrastructure, with 14 branches, over 800 ATMs and 15,215 point-of-sale terminals more than at the end of March 2011. A new branch model with deeper customer segmentation was also implemented in the first quarter of 2012. BBVA Bancomer maintains its position as one of the most efficient banks in the Mexican market, with an efficiency ratio of 38.1% as of March 2012. This evolution of revenue and expenses resulted in operating income of 897 million, a year-on-year rise of 2.3%.
Progress in the loan book involves a higher level of loan-loss provisions. In the first quarter of 2012, impairment losses on financial assets stood at €314m (a 4.6% year-on-year increase). Despite this, the accumulated risk premium improved by 9 basis points to 3.52% over the same period. The NPA and coverage ratios closed the quarter at 3.8% and 116%, respectively.
To sum up, BBVA Bancomer generated a quarterly net attributable profit of €430m, 3.6% up on the figure reported in the first three months of 2011, thanks to strong generation of recurring revenue.
Of this figure, the banking business contributed 79% and pensions and insurance the remaining 21%.
In the pension business, Afore Bancomer performed very well in the quarter, thanks to the significant increase in fee income, as a result of stronger business activity. Funds under management increased 20.0% in the last year to €14,756m, while collection was up 5.9%. Likewise, net trading income performed well, boosted by the evolution of the markets. Costs remained in check. Thus, Afore Bancomer posted a quarterly profit of €21m, 43.3% up on the same period of the previous year, accounting for 23% of the earnings of the pensions and insurance business in the area.
Insurance activity posted a net attributable profit of 69 million, 9.0% up year-on-year. Seguros BBVA Bancomer reported accumulated premiums of €314m thanks to the extraordinary performance of ILP (Free Wealth Investment), “AutoSeguro” insurance, “HogarSeguro” insurance, “VidaSegura” insurance and “Creditón Nómina” loans. Specifically, a mass car insurance campaign was launched that enabled 45,385 policies to be placed in two months, i.e. 7.4% more than in the first quarter of the previous year.