January-December 2012

Trends by country

The most significant aspects for the quarter for each country are detailed below:

In Argentina, despite the slowdown of the economy, BBVA Francés has once again proved its great flexibility and fast capacity to adapt, not only developing new products and services, but also managing its resources more efficiently. The bank’s loan portfolio has increased 23.8%, fueled mainly by consumer finance and lending to businesses, achieving a market share of 7.5% (data as of November 2012). As for risks, the quality indicators for the financial system’s portfolio have deteriorated. However, prudent risk management has enabled BBVA Francés to maintain its ratios at optimal levels and maintain its leading position in this respect. Customer funds are up 16.9% in year-on-year terms. It is important to point out that following the regulations imposed on the forex market, the financial system has seen a major outflow of deposits in dollars. For this reason, the bank has posted a 38.8% reduction in its balance of deposits in foreign currencies. However, deposits denominated in pesos have grown at a rate of 31.0%, driven by the increase in lower-cost deposits (up 39.2%).

In earnings, Argentina has improved its net attributable profit by 23.9% thanks to the increase in net interest income, fees and commissions, and the excellent performance of the insurance business. This is despite the increase in operating expenses, which is mainly the result of the general increase in prices.

In Chile, the macroeconomic and competitive environment has been favorable for BBVA. Lending grew 16.5% year-on-year, focused mainly on the private individual segment, and a market share gain of 4 basis points to 7.8%, according to the latest data for November. This improvement in the competitive position can be seen basically in mortgage loans and consumer finance, which increased in the year by 29 and 39 basis points, respectively. These results have been achieved by the successful development of the strategic plan, with strong growth in the installed capacity that additionally allows for the increase in the customer base. Forum, the unit specializing in consumer finance and leader in the automotive sector in Chile, has also been benefited by strong car sales and has increased its market penetration rate in new car sales to 13.4%. The trend in the insurance business has also been positive thanks to contained levels of claims. With respect to on-balance-sheet funds, Chile has posted a year-on-year increase of 10.2%.

From the point of view of earnings, this year has been more difficult for Chile than the previous one as a result of investor perception of the macroeconomic situation in Europe and, particularly, in Spain. The uncertainty in the euro zone has resulted in an increase in the cost of funding, which has slowed down growth in more recurring revenue. However, net attributable profit stood at €268m, 11.2% up on the same period in 2011.

In Colombia, BBVA closed 2012 with excellent earnings figures, above those achieved by its competitors. The lending business once again saw significant growth. Lending to individuals is up 23.2% year-on-year, with a significant contribution from all of its lines: consumer lending, including credit cards, and mortgage loans (up 29.2% and 16.9% year-on-year, respectively), which has enabled the bank to post, once again, gains in its market shares: up 112 basis points in consumer lending, up 60 in cards and up 32 in mortgage loans. This has resulted in an overall increase of 42 basis points in the private individual portfolio (data as of November). The performance of the loan book has been accompanied by a strong boost in customer funds, which are up 27.3% on the figure at the close of 2011. Year-onyear gains in the market share of all of customer funds lines have also been posted: up 57 basis points in demand deposits, 131 points in current and savings accounts, and 169 points in time deposits. Once again, asset quality indicators posted an excellent performance, which has enabled the bank to lead the sector. The insurance business has also performed well, driven by bankassurance and NTI. As a result, the country’s net attributable profit continued to grow at a year-on-year rate of 18.7% to €331m.

Activity in Peru, in line with the country’s strong economic performance, has increased significantly. This can be seen in the growth of the loan book (up 10.5% year-on-year), and the market share in credit cards, customer deposits (up 8.8% year-on-year) and the market share in current and savings accounts. This trend is reflected in the net interest income (up 13.2% year-onyear), which together with the increase in fees and commissions (up 9.8%), despite the new regulations, and strong growth in NTI (up 22.6%) has resulted in a 14.0% increase in gross income. Expenses and loan-loss provisions are up, the latter in line with the increase in activity, resulting in a net attributable profit of €195m, up 12.5% on the figure for the previous year.

In Venezuela, BBVA Provincial continues to show signs of strong business activity. Lending has grown 45.4% year-on-year and customer funds at a rate of 60.6%, resulting in a 45.3% increase in net interest income. Fees and commissions are up 37.0% as a result of the good performance of the banking and insurance business. In contrast, NTI fell, as the figures for 2011 had reflected the effect of the revaluation of US dollar positions. Together with the increase in expenses and loan-loss provisions, all the above has resulted in a rise of 51.4% in the net attributable profit to €329m.

Among the other banks, BBVA Panama had a net attributable profit of €27m, BBVA Paraguay €14m and BBVA Uruguay €27m.

South America. Data per country

(Million euros)

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Operating income Net attributable profit
Country 2012 Δ% Δ% at constant
exchange rates
2011 2012 Δ% Δ% at constant
exchange rates
Argentina 442 40.5 42.8 315 191 21.8 23.9 157
Chile 321 4.9 (2.4) 306 268 19.6 11.2 224
Colombia 516 36.2 22.3 379 331 32.1 18.7 251
Peru 642 30.5 15.4 492 195 27.1 12.5 154
Venezuela 1,061 58.5 46.3 670 329 64.0 51.4 201
Other countries (1) 54 12.7 1.3 48 31 55.2 33.7 20
Total 3,035 37.4 26.8 2,208 1,347 33.8 23.6 1,007
(1) Panama, Paraguay, Uruguay, Bolivia and Ecuador. Additionally, it includes eliminations and other charges.