27th Oct 2005 07:42
Banco Bilbao Vizcaya Argentaria SA27 October 2005 BBVA Press release 10.27.2005 Results for January - September 2005 Net attributable profit at BBVA rises 24.9% to €2.72 billion O Earnings per share (EPS) rise 24% and return on equity (ROE) now stands at 35.2%, the highest among European banks O Operating profit is growing faster, at 19.7%, thanks to a sharp increase in profitable business and revenues in all three business areas and in the group as a whole O All margins are growing faster: net interest income is up 14.5%, core revenues 14.1% and ordinary revenues 14.3% O Efficiency (cost/income ratio) has improved to 43.6% against 44.7% a year ago. Including depreciation it has improved 1.9 percentage points to 47% O Retail Banking in Spain and Portugal has increased lending by more than 20% and fund-gathering by 11.6%. Its operating profit rose 14.3% and net attributable profit increased 13.3% to €1.2 billion. O Wholesale and Investment Banking increased operating profit by 42.6% and net attributable profit rose 59.8% to €447m O In the Americas business activity is up sharply, operating profit is growing faster (at 36.4%) and net attributable profit rose 60.2% to €1.3 billion O BBVA Bancomer increased growth in the more profitable business lines, operating profit increased 50.2% and net attributable profit jumped 73.4% to €835m O The group improved loan quality yet again. The non-performing loan ratio fell to 0.98% (previously 1.29%) and coverage increased to 246.4% (211.7%) O BBVA reinforced capital adequacy. The BIS ratio increased to 12.7% and core capital stands at 5.9% (compared to 12.2% and 5.8%, respectively, in June 2005) BBVA today announced net attributable profit for the year to September of €2.72billion, an increase of 24.9%. Earnings per share (EPS) are up 24%. Thefavourable performance is a result of the high level of activity in allrecurrent margins, which led to an increase of 19.7% in operating profit. Thisvalidates the group's strategy of growth in profitable activities and it wassupported by important increases in revenue in all three business areas. Netattributable profit in the quarter climbed 35.7% to €914m. In the year to September, BBVA strengthened its position as the most profitablebank in Europe with ROE (return on equity) of 35.2%, compared to 33.3% a yearearlier. Furthermore the cost/income ratio improved to 43.6% and 47% withdepreciation (44.7% and 48.9%, respectively, a year ago). The BIS ratio hasrisen to 12.7%, core capital stands at 5.9% (12.2% and 5.8%, respectively, inJune). The non-performing loan ratio is now 0.98% (1.29% a year earlier) andcoverage is 246.4% (previously 211.7%). In summary, the figures demonstrate thesuccess of the group's strategy of profitable growth and creation of value. The figures for the first nine months of the year reflect the surge inprofitable business activity in all business areas and the sharp rise inrevenues. There were significant advances in all margins on the group incomestatement, net interest income grew 14.5%, core revenues 14.1% and ordinaryrevenues 14.3%. The group's total assets grew 15.2% to €374.8 billion, total lending stands at€208.2 billion (up 23.7%) and customer funds are €380.0 billion (up 19.4%). BBVA paid a second interim dividend of €0.115 per share on 10th October, anincrease of 15%. It is the top European bank in terms of profitability with anROE of 35.2%. Earnings per share (EPS) have increased 24%. The third quarter results were obtained in a context of higher oil prices,rising rates in the USA and stable rates in Europe. The Spanish economycontinued to outperform the rest of the euro zone although inflation is higherand the trade deficit is widening. Latin-American growth rebounded; debt spreadswere lower and inflation is under control. This opens the door to lower interestrates in the future. The most relevant aspects of the BBVA Group in the first nine months of 2005 aresummarised below: O In the third quarter the group generated net attributable profit of€914m. This was 35.7% higher than the €674m obtained in the same period lastyear. Like previous quarters, recurrent revenues were the main driver behind theincrease in profit. O Progressive acceleration of growth in all margins on the income statementbrought net attributable profit in the first nine months to €2.72 billion, ayear-on-year increase of 24.9%. Earnings per share increased 24% and return onequity rose to 35.2%. O The positive performance of revenues, especially net interest income, netfee income and insurance (with year-on-year increases that were higher than inJune) resulted in a 19.7% increase in operating profit (17.7% at the half-year).Growth of revenues and operating profit was higher in all business areas. O Ordinary revenues increased 14.3% in the first nine months, exceeding thehalf-year figure of 11.8%. This was the result of a 14.5% rise in net interestincome (11.1% at the half-year), driven by higher business volume, and of netfee income and insurance, which grew 13.6% (10.5% in June). O Operating expenses including depreciation increased 10.3%, which was lessthan revenues. On a like-for-like basis (ie, excluding Laredo NationalBancshares, Hipotecaria Nacional and Valley Bank) the increase in expenses was7.4%. O Thus the cost/income ratio improved to 43.6% against 44.7% for the firstnine months of 2004. Including depreciation, the ratio is 47.0% and theyear-on-year improvement increases to 1.9 percentage points. O Despite higher lending, non-performing loans (NPLs) declined. Thisbrought the NPL ratio to 0.98% at 30-Sep-05 against 1.29% a year earlier.Coverage rose to 246.4% (211.7% at 30-Sep-04). O Core capital at 30-Sep-05 stands at 5.9%, in line with the group'starget. Tier 1 capital is 7.9% and the BIS ratio 12.7%. O On 10th October the group paid a second interim dividend of €0.115against 2005 results. This was the same amount as the July dividend and 15%higher than dividends last year. O Retail Banking in Spain and Portugal continued to increase lending bymore than 20% year-on-year. This was supported by lending to SMEs and mortgages.Customer funds rose faster, at 11.6%. Net interest income, net fee income andinsurance grew faster than at the half-year. This helped ordinary revenuesincrease 8.5%, operating profit 14.3% and net attributable profit rose 13.3% to€1.2 billion. O In the third quarter results in Wholesale and Investment Banking werehigher than the same period last year, especially in the markets unit. Ordinaryrevenues rose 25.3% in the year to September and operating profit climbed 42.6%.Net attributable profit came to €447m, an increase of 59.8%. O The Americas Area continues to report high growth in banking activity aswell as insurance and pensions. This helped to lift year-on-year growth of netinterest income to 29.3% and operating profit growth to 36.4%. Net attributableprofit came to €1.33 billion, an increase of 60.2%. In a like-for-likecomparison based on the same units, operating profit grew 31.3% and attributableprofit 53.2%. O Bancomer continued to be the outstanding performer with sharp gains inthe more profitable business lines (ie, consumer finance and cards on the creditside and transactional accounts in terms of customer funds). Revenues werehigher (37.7% in net interest income and 19.8% in net fee income). Thusoperating profit rose 50.2% and net profit climbed 62.9% to €836m (53.0%excluding Hipotecaria Nacional). BBVA Group Highlights (Consolidated figures) 30-09-05 30-09-04 % 31-12-04 increaseBALANCE SHEET (million euros)Total assets 374,828 325,247 15.2 332,743Customer lending (gross) 208,156 168,274 23.7 176,086On-balance sheet customer funds 238,143 197,747 20.4 203,023Other customer funds 141,828 120,473 17.7 121,553Total customer funds 379,971 318,220 19.4 324,576Equity 16,940 12,773 32.6 13,840Shareholders' funds (including profit for the year) 12,522 10,556 18.6 11,032 INCOME STATEMENT (million euros)Net interest income 5,187 4,530 14.5 6,131Core revenues 8,489 7,438 14.1 10,031Ordinary revenues 9,328 8,159 14.3 11,031Operating profit 4,867 4,065 19.7 5,501Pre-tax profit 4,130 3,151 31.1 4,137Net attributable profit 2,728 2,184 24.9 2,923 DATA PER SHARE AND MARKET CAPITALIZATION Share price 14.59 11.08 31.7 13.05Market capitalization (million euros) 49,473 37,571 31.7 44,251Net attributable profit 0.80 0.65 24.0 0.87Book value 3.69 3.11 18.6 3.25PER (Price/earnings ratio; times) (1) 13.4 12.9 15.1P/BV (Price/book value ratio; times) 4.0 3.6 4.0 SIGNIFICANT RATIOS (%)Operating profit / ATA 1.78 1.70 1.70ROE (Net attributable profit / Average equity) 35.2 33.3 33.0ROA (Net profit / ATA) 1.07 0.97 0.96RORWA (Net profit / Risk weighted average assets) 1.83 1.60 1.62Efficiency ratio 43.6 44.7 44.9Efficiency ratio including depreciation and 47.0 48.9 49.0amortizationNPL ratio 0.98 1.29 1.15NPL coverage ratio 246.4 211.7 219.4 CAPITAL ADEQUACY RATIOS (BIS Regulation) (%)Total 12.7 12.1 12.4Core capital 5.9 5.9 5.9TIER I 7.9 7.8 8.0 OTHER INFORMATIONNumber of shares (million) 3,391 3,391 3,391Number of shareholders 1,012,975 1,117,771 1,081,020Number of employees 91,770 87,625 87,112. Spain 31,188 31,106 31,056. America (2) 58,643 54,553 54,074. Rest of the world 1,939 1,966 1,982Number of branches 7,208 6,979 6,868. Spain 3,510 3,382 3,385. America (2) 3,526 3,411 3,303. Rest of the world 172 186 180 (1) The 2005 PER is calculated taking into consideration the median of theanalysts' estimates (October 2005). (2) Includes those related to the BBVA Group' s banking, pension fund managersand insurance companies in all the American countries in which it is present. BBVA Consolidated income statement (Million euros) Memorandum item: January-September January-September Increase % at 05 04 constant % increase exchange rates Core net interest income 5,003 14.7 4,364 15.1Dividends 183 10.4 166 10.2 NET INTEREST INCOME 5,187 14.5 4,530 14.9Net income by the equity method 79 11.6 70 11.7Net fee income 2,875 13.1 2,541 13.0Income from insurance activities 349 18.1 296 18.2 CORE REVENUES 8,489 14.1 7,438 14.4Net trading income 839 16.3 722 16.6 ORDINARY REVENUES 9,328 14.3 8,159 14.6Net revenues from non-financial activities 110 45.9 76 46.0Personnel costs (2,620) 9.3 (2,398) 9.4General expenses (1,562) 15.7 (1,350) 16.1Depreciation and amortization (323) (4.4) (338) (4.7)Other operating income and expenses (net) (66) (20.9) (83) (20.5) OPERATING PROFIT 4,867 19.7 4,065 20.1Impairment losses on financial assets (net) (558) (6.4) (596) (6.9)(S) Loan-loss provisions (531) (10.7) (595) (11.2)(S) Other (27) n.m. (2) n.m.Provisions (net) (329) (53.9) (714) (53.8)Other income / losses (net) 151 (62.0) 396 (61.9)(S) From disposal of equity holdings 19 (93.3) 283 (93.3)(S) Other 132 16.1 113 17.7 PRE-TAX PROFIT 4,130 31.1 3,151 31.7Corporate income tax (1,207) 46.3 (825) 46.4 NET PROFIT 2,924 25.7 2,326 26.4Minority interests (196) 38.1 (142) 44.2 NET ATTRIBUTABLE PROFIT 2,728 24.9 2,184 25.3 EARNINGS PER SHARE CALCULATIONAverage ordinary shares in circulation 3,390,852 0.7 3,365,943(thousand)Basic earnings per share 0.80 24.0 0,65Diluted earnings per share 0.80 24.0 0,65 BBVA: Consolidated balance sheet (Million euros) 30-09-05 % 30-09-04 30-06-05 31-12-04 increase Cash and balances at Central Banks 13,239 51.2 8,757 13,799 10,123Trading portfolio assets 44,516 12.0 39,732 53,437 43,432Other financial instruments at fair 1,380 63.0 847 925 1,118valueFinancial instruments available for sale 52,874 3.0 51,322 52,315 58,053Loans 235,305 18.5 198,566 231,303 197,483. Due from banks 25,037 1.1 24,774 25,076 17,571. Loans to customers 202,894 24.2 163,351 195,286 171,339. Other 7,374 (29.4) 10,442 10,942 8,573Fixed income portfolio held to maturity 3,930 42.1 2,766 3,519 2,195Investments in associates 1,416 (7.9) 1,538 1,392 1,369Property and equipment 4,256 6.6 3,991 4,249 3,939Intangible assets 1,716 92.7 891 1,675 809Other assets 16,195 (3.8) 16,838 15,078 14,223 TOTAL ASSETS 374,828 15.2 325,247 377,694 332,743 Trading portfolio liabilities 19,595 55.4 12,610 18,212 12,379Other financial liabilities at fair 768 (9.9) 852 775 834valueFinancial liabilities at amortised cost 304,209 13.1 269,088 310,616 271,179. Deposits by Central Banks and banks 61,363 (10.9) 68,856 69,093 64,628. Due to customers 166,128 11.8 148,651 168,204 149,030. Marketable debt securities 62,434 50.2 41,564 59,666 45,503. Subordinated debt 9,581 27.2 7,532 9,322 8,490. Other 4,703 89.2 2,485 4,330 3,529Insurance contract liabilities 10,215 25.7 8,128 9,680 8,840Other liabilities 18,962 4.8 18,100 19,265 21,861Loan capital 4,139 12.0 3,695 3,589 3,809 TOTAL LIABILITIES 357,888 14.5 312,474 362,137 318,903 Minority interests 924 52.0 608 837 746Valuation adjustments 3,494 117.1 1,610 2,952 2,062Shareholders' funds 12,522 18.6 10,556 11,767 11,032 EQUITY 16,940 32.6 12,773 15,556 13,840 TOTAL LIABILITIES AND EQUITY 374,828 15.2 325,247 377,694 332,743 MEMORANDUM ITEM:Contingent liabilities 26,978 34.9 20,003 24,640 21,653 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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