January - September 2012

Banking Business

The banking business generated a net attributable profit of €853m over the first nine months of 2012, a year-on-year increase of 23.8%. Following previous quarters, the most significant aspects in the quarter for each of the banks are detailed below.

In Argentina there was outstanding growth in all revenue lines, above all net interest income, which was up 48.9% thanks to strong business activity throughout the year, and the favorable performance of customer spreads. Net fees and commissions and NTI have increased at a good pace, offsetting higher expenses and loan-loss provisions, the latter linked to increased business activity. As a result, the net attributable profit in September was €152m, a year-on-year increase of 39.7%.

BBVA Francés continues to be extremely active from the commercial point of view. Worth noting over the quarter was the launch of new corporate credit cards linked to LANPASS, Visa Corporate and Visa Business. They offer special benefits such as cash-back, through which companies get back 5% of their LAN ticket purchases and accumulate LANPASS kilometers.

Lending activity continues strong in BBVA Chile, with a rise of 15.8% in year-on-year terms, which is above the figure for the banking system as a whole. As a result, the market share in its loan book has increased by 29 basis points over the last year (latest available data to July). There was a particularly significant increase in the market share in consumer finance (up 66 basis points) and trade finance (up 37 points). Customer deposits, excluding repos, were up 10.4% in the same period, and gained 36 basis points of market share thanks to the good performance of savings accounts (up 35 points) and time deposits (up 53 points). The performance of the markets in the first nine months of 2012, together with narrowing spreads, have led to a fall of 1.9% in net interest income on the same period the previous year. The above factors, combined with reduced fee income and NTI and higher expenses and loan-loss provisions (the latter closely linked to increased business activity), resulted in the net attributable profit dropping 15.7% year-on-year to €81m. The increased expenses can be explained by the investments the bank is undertaking in technology to make life easier for its customers. Among the plans being undertaken are the following: launch of various mobile banking applications; opening of the first “Easy” branch in Latin America, with extended opening hours and the use of advanced technology; and a new customer service phone line for preferred customers.

In Colombia, lending has continued to grow at a fast pace (up 14.3% year-on-year), leveraged mainly on the portfolio of private individuals (up 26.0%). This has led to a significant gain in market share over the last year in all business lines (consumer finance up 105 basis points, credit cards up 123 basis points and mortgage loans up 17 basis points). Risk management continues to be a differentiating factor in the local market, with a NPA ratio that is far below that of the banking sector as a whole. There have been significant increases in customer funds in year-on-year terms (demand deposits and savings accounts up 13.5% and time deposits up 54.2%). As in the case of lending, there has been a significant gain in market share over the same period (demand deposits 24 basis points, savings deposits 164 basis points and time deposits 139 basis points). The most significant factor in earnings has been the high growth of net interest income, and thus of gross income (up 14.1% and 17.9% respectively). This has boosted net attributable profit to €203m, a rise of 17.7% on the figure for the same period in 2011.

In Peru, increased activity has been reflected in rises in all revenue lines. Lending increased by 11.6% on the close of September 2011, customer funds by 9.7% and gross income by 14.8%. As a result of the increased revenue, combined with that of expenses and loan-loss provisions, the net attributable profit was €123m, a year-on-year growth of 7.6%.

Venezuela continues to show signs of strong business activity. Lending increased by 46.9% since 30-Sep-2011, and customer funds by 49.3%. As a result, net interest income rose by 46.4% in year-on-year terms, and net fees and commissions by 40.4%. NTI fell, as the figures for first quarter of 2011 reflected the effect of the revaluation of US dollar positions. With increased expenses and lower loan-loss provisions, the net attributable profit totaled €240m, a rise of 65.2% on the same period in 2011.

Among the other banks, BBVA Panama reported earnings of €23m, BBVA Paraguay €10m and BBVA Uruguay €21m.

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

(Million euros)

Operating income Net attributable profit
Country Jan.Sep. 12 Δ% Δ% at constant
exchange rate
Jan.Sep. 11 Jan.Sep. 12 Δ% Δ% at constant
exchange rate
Jan.Sep. 11
Argentina 342 40.1 39.3 244 156 19.5 18.8 131
Chile 379 10.6 4.0 343 190 10.9 4.3 171
Colombia 429 48.4 33.0 289 250 36.1 22.0 184
Peru 502 36.9 19.6 367 142 34.6 17.6 105
Venezuela 764 64.8 50.1 464 246 77.7 61.8 139
Other countries (1) 47 5.8 (3.9) 44 30 26.9 13.3 23
Total 2,463 40.7 29.0 1,751 1,014 34.7 24.1 753
(1) Panama, Paraguay, Uruguay, Bolivia and Ecuador. Additionally, it includes eliminations and other charges.