This unit coordinates the combination of a comprehensive range of products (structured finance, trade finance, syndicated loans, fixed-income origination, corporate finance, equity capital markets and transactional services). Coverage of customers is specialized by sector (industry bankers) and location. This business model will allow BBVA to consolidate its strong positioning in Spain and Latin America, while commencing selective penetration in Europe and Asia.
Net interest income rose 13.6% year-on-year and as a percentage of average total assets it was 1.32% at the end of 2009 (0.97% a year earlier). As a result gross income grew 22.6% to €976m, reflecting the performance of recurrent revenues (net interest income and net fee and commission income). Operating costs rose 1.8% and therefore operating income increased 28.3% year-on-year to €802m. Net attributable profit came to €553m, an increase of 56.5% compared to €353m in 2008.
The activity developed by the Structured Finance unit has consolidated BBVA as one of the top entities in the business. As a recognition of that fact, BBVA was selected Bank of the Year in Europe (2009) by Project Finance International (a specialized magazine) and obtained a number of the Deals of the Year awards for operations such as the Boreas wind energy project in Britain (the bank’s first offshore project), and for financing the Fowler Ridge wind farm in the United States. In the infrastructure area, BBVA led a significant number of the most outstanding transactions worldwide, including the M25 highway in London; the RI highway in Slovakia; the Perth airport in Australia; and in the Americas, the Port of Miami Tunnel and Mexico City highway. Spain has also renewed its strong commitment to projects like the Puerto Rico-Mogán highway and land developments in relation to the tunneling of high speed rail tracks.
In Structured Trade Finance, the first operation under the General Finance Agreement with CNCB was carried out in March 2009. BBVA also signed its first commodity trade finance deal. BBVA was named, for the first time, Best Bank for Trade Finance in Latin America unanimously by the three most important magazines in the sector.
Corporate Finance, the group responsible for advisory activity, mergers and acquisitions, has worldwide reach, both geographically and with clients. This year, it participated in the most relevant advisory deals, such as the reverse Ferrovial-Cintra merger and, in Latin America, the merger between Mapfre and the insurance business of Banco de Brasil. For the first time in its history, BBVA is the leader in this market in Spain for volume of reported deals.
In Equity Capital Markets, BBVA has worked with its clients in coordinating, advising and underwriting the share capital increases to reinforce the companies’ balance sheets. BBVA participated in the four most important equity deals in Europe (HSBC, Río Tinto, Enel and Lloyds) and has led the share capital increases for key clients, such as NH Hoteles. It is also in a leadership position in capital offerings in Mexico, where it has worked as lead underwriter for the ICA IPO.
Debt Capital Markets (fixed-income origination and syndicated loans) has been very active in 2009, and BBVA closed the year in top positions in both Spain and in the Americas.
In the bond market, the Group set a record in Spain and Europe for volume of operations and volume placed. Important deals in the financial and institutional segment included the issues of Banco Popular, ICO (the Official Credit Institute) and the Kingdom of Spain; and in large corporations: Enel, Volkswagen and Telefónica. In the Americas, important deals in bonds for issuers included Petróleos Mexicanos, the Federal Commission of Electricity and Bimbo, which was recognized as Deal of the Year by Latin Finance and Finance Review.
BBVA also led major operations closed in Europe and the Americas in syndicated loans (Enel, Ferrovial, Iberdrola, Endesa, Grupo Industrial Lala, Grupo Bimbo, Kraft Foods and Enersis, among others).
Within the framework of its strategic geographic and client transversality, the Global Transaction Services unit has continued to develop products and solutions that best adapt to covering the needs of non-individual clients: cash management, receivables and payments, working capital and custody, compensation and clearing services of securities. In Spain and Portugal, the Factura Integral BBVA (comprehensive invoice); new services in Mexico through the host to host channel, Bancomer TIB integral treasury and Integral Treasury Service were launched. This unit also earned numerous awards and recognition, including: in institutional custody services “Best Sub-Custodian Bank in Spain” according to the survey carried out by Global Investor; and in cash management, it earned the highest score as best provider of cash management transaction services in Spain and Colombia for corporates and institutions, from Euromoney.
