January - September 2012


Earnings in South America have continued to perform very well each quarter. This explains the region’s steadily increasing contribution to BBVA’s profits. In the first nine months of 2012 the net attributable profit in the region was €1,014m (up 24.1% year-on-year).

The outstanding performance of revenues is explained by sustained growth in activity, combined with a defense of spreads through good price management. Cumulative net interest income through September 2012 amounted to €3,087m, 25.6% up on the same period the previous year. Net fees and commissions increased by 16.2% over the same period to €982m. NTI fell 4.6% on the first nine months of 2011, which included the revaluation of BBVA Provincial’s US dollar positions. In addition to this, the insurance business also performed well. As a result, the cumulative gross income for the area increased by 22.7% year-on-year to €4,278m.

South America has continued to develop and implement its expansion and technological transformation plans designed to take advantage of the growth opportunities in the region resulting from strong economic activity and increased banking penetration. These factors, combined with the inflation in the area, explain why operating expenses have remained high, with a year-on-year increase of 15.2% to €1,814m. Specifically, work is being carried out to improve the quality of customer service, based on the corporate customer-centric policy. However, higher revenues mean that the efficiency ratio remains at 42.4%, a similar level to previous quarters, and operating income at €2,463m, a year-on-year increase of 29.0%.

Finally, impairment losses on financial assets increased 15.7% to €409m, in line with business activity. The cumulative risk premium through September closed at 1.26% (1.12% at the end of the first half of 2012).