BBVA Compass represents approximately 91% of total BBVA USA assets. The comments on the area are therefore totally applicable to this entity.
On 31 December 2009, loan book reached €31,194m (up 14.5% year-on-year) and customer funds rose 32.2% to €31,064m. These increases were due to the aforementioned incorporation of Guaranty.
Net interest income for 2009 was €1,389m. This was 9.0% higher than in 2008. After a 7.6% reduction in other revenues year-on-year due to the higher FDIC insurance charge (higher rates and special assessment), gross income stood at €2,006m, up 3.3% year-on-year. Guaranty contributed approximately 6% of Compass’ revenues.
Operating costs went down 6.9% year-on-year to €1,218m, for the same reasons as explained above for BBVA USA. As a result, operating income rose to €789 million, for a 24.2% increase on the previous year. The efficiency ratio improved by 6.6 percentage points to 60.7%, reflecting the effect of the synergies in both revenues and expenses, originating from the integration processes carried out.
Finally, the aforementioned higher provisions and the amortization of goodwill produced a year-to-end attributable loss of €1,010m. However, without the impact from the €1,050m in one-off charges, the BBVA Compass Banking Group would be reporting an attributable profit of €40m.
At 31 December 2009, Corporate and Commercial Group (CCG) managed a loan portfolio of €14,940m, a 6.9% decrease from a year ago. Customer funds reached €8,513m, up 16.6% since December 2008. The customer funds growth has been driven by non-interest bearing deposits that have experienced exceptional growth, primarily the result of strong correspondent banking efforts and increases in several large clients assigned to the unit.
Retail Banking ended the year with a loan portfolio of €8,433m, down 8.8%, primarily due to planned run-off in the Indirect Auto Dealer and Student Lending portfolios. However, the residential real estate category increased quarter by quarter last year, generating US$1,152m in new mortgages in 2009, a significant increase over 2008 levels. Customer funds totaled €12,469m (down 7.8%), primarily due to lower demand for savings products.
The Wealth Management is the unit that offers value-added services and products to the bank high-net worth customers. The collaboration between this unit and the BBVA Equity Derivatives & Structured Products department in Madrid has meant continued benefits for BBVA Compass. At December 31, 2009, Wealth Management was managing a €1,977m loan portfolio. This was up 2.3% on year end 2008. Deposits were €3,200m, rising 40.0% from the previous year. The Power CD product linked to the Standard & Poor’s index has generated in excess of US$120m in new deposits since its launch in March. At December 31, 2009, assets under management were €11,973m, up 6.1% year-on-year.