South America highlights in the fourth quarter
- Extremely buoyant activity.
- Excellent price management.
- Positive performance of asset quality indicators.
- Agreement reached on the sale of AFP Horizonte in Colombia.
Industry Trends
In South America, the financial system remains sound in most countries and lending continues to grow strongly, fueled by monetary policies geared toward boosting economic activity. Faced with external monetary expansion and the ensuing increase in capital flows, many central banks have chosen to apply prudent measures to discourage capital inflows and to control the rise in domestic lending (particularly Brazil and Peru).
Exchange rates in the region have appreciated in most countries over the last twelve months, in both average and final terms. However, the trend has been reversed in the quarter, with widespread depreciations. As a result, the impact of foreign currencies on the balance sheet, activity and earnings is negative in the quarter, but positive in year-on-year terms. Unless otherwise indicated, all comments below on business activity and earnings refer to constant exchange rates.
Income statement
(Million euros)
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|
South America |
|
2012 |
Δ % |
Δ % (1) |
2011 |
Net interest income |
4,291 |
35.7 |
25.6 |
3,161 |
Net fees and commissions |
910 |
26.4 |
18.3 |
720 |
Net trading income |
443 |
(8.6) |
(14.9) |
485 |
Other income/expenses |
(281) |
6.4 |
(4.3) |
(264) |
Gross income |
5,363 |
30.8 |
21.6 |
4,101 |
Operating costs |
(2,328) |
23.0 |
15.4 |
(1,893) |
Personnel expenses |
(1,165) |
21.6 |
14.5 |
(958) |
General and administrative expenses |
(989) |
26.3 |
18.4 |
(783) |
Deprecation and amortization |
(173) |
14.3 |
5.7 |
(152) |
Operating income |
3,035 |
37.4 |
26.8 |
2,208 |
Impairment on financial assets (net) |
(593) |
32.1 |
21.6 |
(449) |
Provisions (net) and other gains (losses) |
(202) |
127.7 |
110.8 |
(89) |
Income before tax |
2,240 |
34.1 |
23.7 |
1,671 |
Income tax |
(486) |
41.6 |
30.8 |
(343) |
Net income from ongoing operations |
1,754 |
32.2 |
21.9 |
1,327 |
Net income from discontinued operations |
241 |
51.2 |
39.2 |
160 |
Net income |
1,995 |
34.2 |
23.7 |
1,487 |
Non-controlling interests |
(649) |
35.1 |
24.0 |
(480) |
Net attributable profit |
1,347 |
33.8 |
23.6 |
1,007 |
(1) At constant exchange rates.
Balance sheet
(Million euros)
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|
31-12-12 |
Δ % |
Δ % (1) |
31-12-11 |
Cash and balances with central banks |
12,908 |
54.9 |
55.8 |
8,335 |
Financial assets |
10,144 |
13.8 |
10.9 |
8,912 |
Loans and receivables |
51,638 |
19.9 |
17.7 |
43,069 |
Loans and advances to customers |
47,146 |
21.4 |
18.9 |
38,831 |
Loans and advances to credit institutions and other |
4,492 |
6.0 |
6.3 |
4,238 |
Tangible assets |
881 |
9.4 |
8.9 |
805 |
Other assets |
2,848 |
22.6 |
19.7 |
2,322 |
Total assets/Liabilities and equity |
78,419 |
23.6 |
21.6 |
63,444 |
Deposits from central banks and credit institutions |
5,947 |
14.3 |
9.1 |
5,205 |
Deposits from customers |
53,870 |
26.8 |
25.5 |
42,468 |
Debt certificates |
3,263 |
43.0 |
35.7 |
2,282 |
Subordinated liabilities |
1,196 |
(23.7) |
(26.7) |
1,568 |
Financial liabilities held for trading |
955 |
(5.0) |
(10.7) |
1,006 |
Other liabilities |
9,913 |
23.9 |
22.9 |
8,002 |
Economic capital allocated |
3,275 |
12.5 |
10.3 |
2,912 |
(1) At constant exchange rates.
Significant ratios
(Percentage)
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|
South America |
|
31-12-12 |
30-09-12 |
31-12-11 |
Efficiency ratio |
43.4 |
43.1 |
46.2 |
NPA ratio |
2.1 |
2.2 |
2.2 |
NPA coverage ratio |
146 |
142 |
146 |
Risk premium |
1.34 |
1.26 |
1.31 |
South America. Operating income
(Million euros at constant exchange rates)
(1) At current exchange rates: +37.4%.
South America. Net attributable profit
(Million euros at constant exchange rates)
(1) At current exchange rates: +33.8%.