Net interest income performed extremely well in the quarter, with a year-on-year growth of 29.9% to €947m, thanks to:

  • The strong activity mentioned
  • Excellent price management, which has led to widening spreads in a context of a high level of competition in practically all the countries in the region.

As a result of the increased activity, and despite the regulatory changes in the region in 2011, income from fees was up 17.3% year-on-year to €310m. In short, recurring revenue continues strong.

With respect to other revenue in the area, there was a significant year-on-year fall of 28.4% in NTI, basically due to the fact that the first quarter of 2011 included the effect of a revaluation of US dollar positions held by BBVA Provincial.

As a result, gross income for the quarter was up 18.1% year-on-year to €1,366m, thanks mainly to the positive trend in net interest income and income from fees for the period.

Expenses in the area totaled €553m over the quarter. They were strongly influenced by the expansion and differentiation projects carried out in most of the units to take advantage of the differing growth opportunities in each of the countries in the region. Plans continue to develop multi-channel services (new and improved channels), segmentation (to improve service quality), technological innovation (shorter and simpler processes) and staff training (particularly the sales teams), all with a focus on improving and strengthening the relationship with customers. Despite this, the quarterly efficiency ratio remained at a good level of 40.5%. As a result, operating income was up 21.8% year-on-year to €813m.

In terms of asset quality, the main indicators remained stable. The NPA ratio closed the quarter at 2.3%, while the coverage ratio was 141%. Despite the growing lending volumes, impairment losses on financial assets were down 22.5% year-on-year, to €98m, due to the outstanding risk management in place.

In short, the area once more showed a positive performance in the quarter, thanks to excellent revenue performance and the positive management of credit quality. As a result, it could continue with its investment in expansion and differentiation projects, and still increase net attributable profit by 27.1% year-on-year to €370m.