RNS Number:3233R
Banco Bilbao Vizcaya Argentaria SA
27 October 2003
PRESS RELEASE
27th October 2003
Year-to-date results at September 2003
Attributable net income at BBVA rises 5.1% to 1,739 million euros
* Attributable Net Income in the third quarter climbed 17% to 572 million
euros
* Return on equity (ROE) increased to 19.2%, which was 1.8 percentage points
more than a year ago
* Operating profit on domestic business (the Group without the Americas)
grew by 6.6% and attributable net income grew by 9.3%
* Retail banking business is growing faster and attributable net income was
914 million euros (up 0.5%)
* Wholesale and Investment Banking increased attributable net income by 37%
to 338 million euros
* In Mexico attributable net income grew by 25% and in the rest of the
Americas by 96.1% in local currency terms
* Cost efficiency improved in all three business areas to 46.1%, compared to
47.5% a year ago
* The non-performing loans ratio fell once more, to 1.46% (excluding
Argentina and Brazil) and coverage is now 195.6%. The ratio in the Spanish
resident sector is 0.75%.
* BBVA reinforced its capital base: core capital rose to 6.1%, Tier 1
capital to 8.2% and the BIS ratio increased to 12.5%
In the first nine months of the year attributable net income at BBVA rose to
1,739 million euros - an increase of 5.1% over the same period last year. The
Group's domestic businesses increased their attributable net income by 9.3%
while, in local currency terms, the Americas area increased by 24.1%. The
quarterly figures reflect considerable improvement in volume and earnings.
BBVA ended the first nine months of 2003 with important improvements in the
return on equity (ROE) -which grew by 19.2% compared to 17.4% last year. The
capital base strengthened (the BIS ratio is now 12.5% and core capital 6.1%),
the cost/income ratio for all businesses continued to improve and non-performing
loan ratios fell in Spain and for the Group as a whole.
The positive results at BBVA in the third quarter were achieved despite slow
growth in the world economy and especially in the euro zone where some countries
are now in recession. The Spanish economy, however, continued to grow at more
than 2%. Improvement is also under way in the United States and in Latin
America. At the same time interest rates remained at all-time lows, bringing
margins in the banking sector under pressure. Stock markets still lack clear
direction and the euro strengthened further against the dollar during the
quarter.
Against this background, BBVA recorded improvements in all the Group's business
lines. In fact volume and results exceeded the bank's own internal forecasts and
budgets. In summary, the figures confirm the expectations of a 25% increase in
attributable net income by the end of year - as announced by the COO, Jose
Ignacio Goirigolzarri, at the end of the half-year.
The attributable net income of BBVA during the third quarter was 572 million
euros, 17.0% more than the same quarter last year.
Recurrent earnings
In summary BBVA's attributable net income is growing faster. In the first nine
months it rose to 1,739 million euros (an increase of 5.1%, compared to 0.1% in
the first half-year). At constant exchange rates the increase in the quarter
would be 22.1% and the increase in the first nine months would be 13.4%.
The increase in net income was mainly due to the improvement in operating
profit. In the third quarter and for the first time this year, it was higher
than the same period in 2002 in current euro terms. If Argentina and Brazil are
consolidated by the equity method, the operating profit would be 1,229 million
euros, increasing by 4.1% in current euros and by 11.2% if the effect of
exchange rates is excluded.
This significant improvement can also be seen in the nine-month figure for
operating profit, which has grown 10.6% in constant euros and declined by only
4.1% in current euro terms.
Therefore, at the end of third quarter BBVA has confirmed the expected
improvements in activity and results. It also demonstrated its ability to
generate recurrent earnings with the re-launch of high-street banking business
in Spain, with the confirmed success of the Wholesale and Investment Banking
business model and with the clear improvement in the Americas.
Other significant features of the balance sheet and income statement are as
follows:
* The return on equity (ROE) rose to 19.2%, compared to 17.4% for the same
period a year ago. Return on assets also increased to 1.08%.
* Expenses were kept under control with zero increase in the domestic
businesses (Retail Banking, Wholesale Banking and Corporate Activities) and
in the Americas increases were lower than inflation rates. The combination
of cost control and higher revenues led to a further improvement in the cost
/income ratio, which fell to 46.1% in the first nine months (compared to
47.5% last year).
* Items below the line on the income statement did not contribute to profit
growth. This was the combined effect of a number of factors: an increase in
earnings via the equity method, lower provisions for deterioration in
exchange rates, the large provisions made for country-risk in Argentina in
2002, lower capital gains and higher taxes (which returned to more normal
levels after last year).
* In the third quarter the level of business activity in Retail Banking in
Spain and Portugal continued to improve. This applied to lending activity as
well as to customer funds and it therefore had a positive effect on net
interest income and net fee income. This business area generated
attributable net income of 914 million euros (up by 0.5%) and a 2.2%
increase in operating profit. It has been applying an innovative marketing
policy in recent months with the launch of fixed-rate mortgages, with
products tailored for SMEs and especially with the Extra 5 Fund.
* Wholesale and Investment Banking continued to improve, confirming the
success of the new business model. Operating profit rose by 16.4% and
attributable net income by 37.0%.
* In the Americas attributable profit in the third quarter was the highest
since the second quarter of 2002, growing by 11.7% year-on-year in current
euros (26.9% in local currency). In cumulative terms for the nine-month
period and in local currency, operating profit grew by 15.6% and
attributable net income by 24.1%.
* In Banking in America excluding Mexico, attributable net income grew by
42.4% at current exchange rates and 96.1% in local currency terms, to 135
million euros.
* In the Americas, Mexico continues to exhibit strength despite the fall in
interest rates. In local currency operating profit grew by 27.2% and
attributable net income grew by 25% to 298 million euros. BBVA recently
announced its intention to raise its holding in BBVA Bancomer by 3.77%,
bringing the total to 59.42%.
* BBVA again reduced the non-performing loan ratio to 1.46% at 30th
September excluding Argentina and Brazil. This compares favourably with June
(1.57%) and September 2002 (1.75%). Coverage has now reached 195.6%.
Non-performing loans in the Spanish resident sector now stand at 0.75%,
which is 0.13 percentage points less than a year ago. This figure compares
favourably with the overall Spanish banking system.
* The capital base of the Group continues to strengthen. The BIS ratio
recovered the 12.5% level (compared to 12% in June), core capital rose to
6.1% and Tier 1 capital to 8.2%.
BBVA Group Highlights (Consolidated figures)
BALANCE SHEET (millions of euros)
Attributable net income at BBVA rises
BBVA Group Highlights (Consolidated figures)
30-09-03 30-09-02 % change (YoY)
BALANCE SHEET (millions of euros)
Total assets 284.816 280.253 1,6
Total lending (gross) 150.217 146.412 2,6
Customer funds recorded on balance sheet 179.369 177.502 1,1
Other customer funds managed 112.032 108.962 2,8
Total customer funds managed 291.401 286.464 1,7
Shareholders' funds (including profit for the year) 13.141 13.073 0,5
INCOME STATEMENT (millions of euros)
Net interest income 5.023 5.995 (16,2)
Core revenues 7.471 8.743 (14,5)
Ordinary revenues 7.974 9.277 (14,0)
Operating profit 3.686 4.251 (13,3)
Operating profit (Argentina and Brazil consolidated under equity 3.678 3.837 (4,1)
method)
Pre-tax profit 2.977 2.656 12,1
Attributable net income 1.739 1.655 5,1
DATA PER SHARE AND MARKET CAPITALISATION (30-09)
Share price 8,86 7,56 17,2
Market capitalisation (millions of euros) 28.315 24.161 17,2
Attributable net income 0,54 0,52 5,1
Book value 4,11 4,09 0,5
PER (Price Earning Ratio; times) (1) 13,2 14,1
P / BV (Price/Book value; times) 2,2 1,8
RELEVANT RATIOS (%)
Operating income / ATA 1,78 1,95
ROE (Attributable net income / Average equity) 19,2 17,4
ROA (Net income / Average total assets) 1,08 1,03
RORWA (Net income / Risk weighted assets) 1,83 1,80
Cost / income ratio 46,7 46,8
NPL ratio 1,96 2,09
Coverage ratio 160,2 164,2
CAPITAL ADEQUACY RATIOS (BIS rules) (%)
Total 12,5 12,6
Core capital 6,1 6,0
OTHER INFORMATION
Number of shares (millions) 3.196 3.196
Number of shareholders 1.179.013 1.189.047
Number of employees 85.687 93.949
. Spain 30.975 31.520
. America (2) 52.666 60.374
. Rest of the world 2.046 2.055
Number of branches 6.916 7.578
. Spain 3.347 3.396
. America (2) 3.371 3.972
. Rest of the world 198 210
N.B.: Non-audited data. Consolidated statements follow generally accepted accounting principles of Bank of Spain
Circular 4/91 and later Circulars.
(1) The 9M03 PER is calculated taking into consideration the median of the analysts' estimates (October 2003).
(2) This heading includes BBVA Group' s banking and pension management activities in all Latin American countries
in which it is present.
Consolidated income statement
(Millions of euros)
9M03 % change(YoY) 9M02
Financial revenues 9.543 (28,9) 13.421
Financial expenses (4.852) (37,0) (7.707)
Dividends 332 17,9 281
NET INTEREST INCOME 5.023 (16,2) 5.995
Net fee income 2.448 (10,9) 2.748
CORE REVENUES 7.471 (14,5) 8.743
Net trading income 503 (5,7) 534
ORDINARY REVENUES 7.974 (14,0) 9.277
Personnel costs (2.428) (13,4) (2.803)
General expenses (1.297) (15,5) (1.535)
GENERAL ADMINISTRATIVE EXPENSES (3.725) (14,1) (4.338)
Depreciation and amortization (387) (20,0) (485)
Other operating revenues and expenses (net) (176) (13,0) (203)
OPERATING PROFIT 3.686 (13,3) 4.251
Net income from companies under the equity method 285 n.m. (44)
Memorandum item: dividends received (214) 13,1 (189)
Amortization of goodwill (431) 10,1 (391)
Net income from Group transactions 394 (13,7) 456
Net loan loss provisions (1.054) (19,2) (1.304)
Net securities writedowns - n.m. 3
Extraordinary items (net) 97 n.m. (315)
PRE-TAX PROFIT 2.977 12,1 2.656
Corporate income tax (730) 78,3 (409)
NET INCOME 2.247 -- 2.247
Minority interests (508) (14,2) (592)
. Preference shares (168) (21,4) (213)
. Other (340) (10,2) (379)
ATTRIBUTABLE NET INCOME 1.739 5,1 1.655
Consolidated income statement
(Argentina and Brazil consolidated under the equity method)
(Millions of euros)
9M03 % change(YoY) % change at constant 9M02
exchange rate
Financial revenues 9.325 (17,6) (5,8) 11.322
Financial expenses (4.655) (24,1) (13,9) (6.136)
Dividends 332 18,8 22,2 280
NET INTEREST INCOME 5.002 (8,5) 5,0 5.466
Net fee income 2.383 (8,9) 4,6 2.617
CORE REVENUES 7.385 (8,6) 4,9 8.083
Net trading income 448 3,0 24,4 435
ORDINARY REVENUES 7.833 (8,0) 5,8 8.518
Personnel costs (2.366) (10,1) 1,0 (2.632)
General expenses (1.248) (11,7) 4,8 (1.413)
GENERAL ADMINISTRATIVE EXPENSES (3.614) (10,7) 2,3 (4.045)
Depreciation and amortization (370) (16,1) (3,9) (441)
Other operating revenues and expenses (net) (171) (12,3) 8,3 (195)
OPERATING PROFIT 3.678 (4,1) 10,6 3.837
Net income from companies under the equity method 288 n.m. n.m. (29)
Memorandum item: dividends received (214) 13,1 17,5 (189)
Amortization of goodwill (431) 10,1 10,1 (391)
Net income from Group transactions 394 (13,7) (13,9) 456
Net loan loss provisions (883) (25,0) (14,2) (1.178)
Net securities writedowns - n.m. n.m. 3
Extraordinary items (net) (129) 85,6 n.m. (69)
PRE-TAX PROFIT 2.917 11,0 25,1 2.629
Corporate income tax (672) 76,7 122,3 (380)
NET INCOME 2.245 (0,2) 10,6 2.249
Minority interests (506) (14,7) 2,1 (594)
. Preference shares (167) (21,4) (21,4) (213)
. Other (339) (11,0) 19,8 (381)
ATTRIBUTABLE NET INCOME 1.739 5,1 13,4 1.655
END
This information is provided by RNS
The company news service from the London Stock Exchange
QRTEANEXAADDFEE