25th Jan 2006 08:48
Banco Bilbao Vizcaya Argentaria SA25 January 2006 BBVA Press Release 25 January 2006 2005 results Net attributable profit at BBVA rises 30.2% to €3.8 billion Earnings per share rose to 29.5% and total dividends paid against 2005 resultswill increase 21.1% to €0.531 The Group has set new records for quarterly and annual profit with growth in allbusiness areas - Improvement at all levels: net interest income grew 17%, core revenuesgrew 16.9%, ordinary revenues 17.1% and operating profit grew 22% - Retail banking increased net attributable profit 13.1% to €1.6 billion - Wholesale and Investment Banking increased net attributable profit 46.6%to €592m - In the Americas, net attributable profit climbed 52.3% to €1.8 billion The Group increased lending 25.9%, total customer funds rose 22.4%, net equity25% and total assets 17.2% BBVA ends 2005 as the leading large European financial group in terms ofprofitability, efficiency and risk management - Return on equity (ROE) increased to 37%, compared to 33.2% a yearearlier - The cost/income ratio improved from 48.6% to 46.7% (includingdepreciation) and from 44.6% to 43.2% (without depreciation) - The Group's non-performing loan ratio fell from 1.13% to 0.94% andcoverage increased from 219.7% to 252.5% In 2005 BBVA's net attributable profit was €3.8 billion, 30.2% higher than 2004.The increase was mainly due to a sharp rise in business activity and revenues inall business areas and to improvements in all recurrent revenues. These led toan increase of 22% in operating profit. Earnings per share (EPS) grew 29.5% andnet attributable profit in the fourth quarter jumped 46% to €1.1 billion. Thiswas the highest quarterly profit achieved by the Group so far. In view of thehighly positive earnings, BBVA will propose a 20.1% increase in the totaldividend. Therefore the final payment of the dividend will rise 31%, bringingpay-out to 47.3%. BBVA increased its competitive strength in the European financial sector in 2005thanks to enviable positioning, to the recurrency and sustainability of itsearnings and to an excellent combination of strong growth and risk-adjustedprofitability. In 2005 the Group recorded significant improvements in the main business ratiosand other indicators. These figures already stood at exemplary levels in theinternational context. It ended 2005 with record quarterly and annual profits.The level of its profit, risk quality and efficiency, and the increases in EPSand dividends, place the bank at the head of large European financial groups. BBVA is the most profitable group in Europe with ROE (return on equity) of 37%,compared to 33.2% at the end of 2004. The Group improved its cost/income ratio substantially; at year-end it stood at46.7% including depreciation. This was 1.9 percentage points better than at theend of 2004. Without depreciation the figure was 43.2%, compared to 44.6% a yearearlier. This is also puts BBVA in the top ranks of the sector. It made important advances in risk management. The non-performing loan ratiofell to 0.94% (1.13% a year earlier) and coverage was 252.5%, compared to219.7%. Lastly the Group ended the year with adequate levels of capital. The BIS ratiowas 12% and core capital 5.6%, after acquiring Hipotecaria Nacional, LaredoNational Bank and Granahorrar (operations concluded during 2005). The bank also opened an important number of new branches in Spain in 2005,adding 193 to its network and raising the total to 3,578, compared to 3,385 atthe end of 2004. The number of branches and the workforce also increased in theAmericas due the acquisitions mentioned above. The Group pursued its strategy of profitable growth, increasing lending 25.9%and customer funds 22.4%. Total assets grew 17.2% to €392 billion and net equityrose 25% during the year. The most relevant financial aspects of the BBVA Group in 2005 are summarisedbelow: - Attributable net income in 2005 rose to €3.8 billion, an increase of30.2% over the €2.9 billion obtained in 2004. The profit figures for the fullyear and for the fourth quarter were both all-time records. - Earnings per share grew 29.5% to €1.12 and ROE increased to 37% (33.2% in2004). - The considerable increase in profit in 2005 was mainly due to positiveperformance from all sources of revenue. Operating profit rose to €6.82 billion,an increase of 22.0%. - Apart from the high level of profit, its significant upward trend and theexcellent quality of earnings, the year-on-year comparisons for each quartershow that growth in all margins and in profit is accelerating. - Ordinary revenues rose 17.1% on favourable performance of all components.These included net interest income which grew 17.0% and income from fees andinsurance, which rose 16.4%. Operating costs including amortisation anddepreciation grew more slowly (at 12.0%) and, on a like-for-like basis, thisfigure was 8.4%. - As a result, the cost/income ratio, including amortisation anddepreciation, stands at 46.7% after improving 1.9 points over 2004 (48.6%).Without amortisation and depreciation the ratio would be 43.2%. - The strong increase in lending to customers was not incompatible withfurther improvement in asset quality. Thus the NPL ratio improved to 0.94% at31-Dec-05, compared to 1.13% a year earlier. Coverage increased to 252.5%(219.7% at 31-Dec-04). - At year-end, core capital stood at 5.6%. Tier 1 capital was 7.5% and theBIS ratio 12.0%. Excluding the acquisitions made during the year, core capitalstands at 6.2%. - On January 10th, the Group paid a third interim dividend of €0.115 pershare against 2005 results. Like the amounts paid in July and October this was15% higher than dividends a year earlier. In view of the 2005 earnings and theexcellent outlook for the Group, it will be proposed an increase of 31% in thefinal dividend. This will bring total dividends against 2005 earnings to €0.531,an increase of 20.1%. The pay-out will therefore be 47.3%. - The high level of business activity in the Retail Banking Area for Spainand Portugal led to a 20.1% increase in lending (supported by SME finance andmortgages) and a 10.0% rise in customer funds. This helped ordinary revenues toclimb 8.3%. Operating profit and net attributable profit both recordedyear-on-year increases of 13.1%. The net profit for this area came to €1.61billion. - In the Wholesale and Investment Banking Area the Group's capacity togenerate revenue was reflected by ordinary revenues (up 24.4%) and operatingprofit (up 33.9%). Helped by lower provisioning requirements, net attributableprofit grew 46.6% to €592m. - The Americas Area continued to enjoy strong growth in business activity,especially lending. This was reflected by revenues with increases of 32.6% innet interest income and 35.4% in operating profit. It lifted net attributableprofit to €1.82 billion, an increase of 52.3% over 2004. On a like-for-likecomparison (ie, excluding Hipotecaria Nacional, Laredo Nacional Bancshares andBBVA Bancomer USA and, in December, Granahorrar in Colombia), operating profitrose 32.3% and net attributable profit 45.4%. - Bancomer's contribution is particularly significant. Operating profitjumped 46.2%, supported by net interest income (up 39.7% thanks to higher volumein the more profitable lines) and by net fee income (up 26.1%). Net profit shotup 56.3% to €1.19 billion (46.1% excluding Hipotecaria Nacional). Lastly, at the end of December the Group announced a new organisation structurethat will drive its global strategy of profitable growth and energise itstransformation through innovative business models. BBVA Group Highlights (consolidated figures) 31-12-05 31-12-04 % increaseBALANCE SHEET (million euros)Total assets 392,389 334,678 17.2Customer lending (gross) 222,413 176,673 25.9On-balance sheet customer funds 259,200 207,884 24.7Other customer funds 143,887 121,553 18.4Total customer funds 403,087 329,437 22.4Equity 17,302 13,805 25.3Shareholders' funds (including profit for the year) 13,036 10,961 18.9 INCOME STATEMENT (million euros)Net interest income 7,208 6,160 17.0Core revenues 11,756 10,060 16.9Ordinary revenues 13,024 11,120 17.1Operating profit 6,823 5,591 22.0Pre-tax profit 5,592 4,137 35.2Net attributable profit 3,806 2,923 30.2 DATA PER SHARE AND MARKET CAPITALIZATION Share price 15.08 13.05 15.6Market capitalization (million euros) 51,134 44,251 15,6Net attributable profit 1.12 0.87 29.5Book value 3.84 3.23 18.9PER (Price/earnings ratio; times) 13.4 15.1P/BV (Price/book value ratio; times) 3.9 4.0 SIGNIFICANT RATIOS (%)Operating profit / ATA 1.87 1.73ROE (Net attributable profit / Average equity) 37.0 33.2ROA (Net profit / ATA) 1.12 0.96RORWA (Net profit / Risk weighted average assets) 1.91 1.62Efficiency ratio 43.2 44.6Efficiency ratio including depreciation and 46.7 48.6amortizationNPL ratio 0.94 1.13NPL coverage ratio 252.5 219.7 CAPITAL ADEQUACY RATIOS (BIS Regulation) (%)Total 12.0 12.5Core capital 5.6 5.8TIER I 7.5 7.9 OTHER INFORMATIONNumber of shares (million) 3,391 3,391Number of shareholders 984,891 1,081,020Number of employees 94,681 87,112. Spain 31,154 31,056. America (1) 61,604 54,074. Rest of the world 1,923 1,982Number of branches 7,410 6,868. Spain 3,578 3,385. America (1) 3,658 3,303. Rest of the world 174 180 (1) Includes those related to the BBVA Group' s banking, pension fund managers and insurance companies inall the American countries in which it is present. BBVA Consolidated income statement (Million euros) Memorandum item: Increase % at constant 2005 % 2004 exchange rates increase Core net interest income 6,915 17.1 5,904 15.7Dividends 292 14.6 255 14.5 NET INTEREST INCOME 7,208 17.0 6,160 15.7Net income by the equity method 121 25.2 97 25.4Net fee income 3,940 15.4 3,413 13.7Income from insurance activities 487 24.7 391 22.4 CORE REVENUES 11,756 16.9 10,060 15.4Net trading income 1,267 19.6 1,060 19.0 ORDINARY REVENUES 13,024 17.1 11,120 15.7Net revenues from non-financial activities 126 (0.6) 126 (0.7)Personnel costs (3,602) 10.9 (3,247) 9.8General expenses (2,160) 16.7 (1,851) 15.2Depreciation and amortization (449) 0.1 (448) (1.7)Other operating income and expenses (net) (115) 4.6 (110) 1.2 OPERATING PROFIT 6,823 22.0 5,591 20.7Impairment losses on financial assets (net) (854) (10.8) (958) (12.4)(S) Loan-loss provisions (813) 3.7 (784) 1.6(S) Other (41) (76.3) (174) (76.3)Provisions (net) (454) (46.6) (851) (46.8)Other income / losses (net) 77 (78.3) 355 (78.2)(S) From disposal of equity holdings 29 (90.7) 308 (90.8)(S) Other 49 4.4 47 9.0 PRE-TAX PROFIT 5,592 35.2 4,137 33.8Corporate income tax (1,521) 47.9 (1,029) 45.5 NET PROFIT 4,071 31.0 3,108 29.9Minority interests (264) 42.3 (186) 44.7 NET ATTRIBUTABLE PROFIT 3,806 30.2 2,923 29.0 EARNINGS PER SHARE CALCULATIONAverage ordinary shares in circulation 3,390,852 0.6 3,372,205(thousand)Basic earnings per share 1.12 29.5 0,87Diluted earnings per share 1.12 29.5 0,87 BBVA: Consolidated balance sheet (Million euros) 31-12-05 % increase 31-12-04 30-09-05 Cash and balances at Central Banks 12,341 21.9 10,123 13,239Financial assets held for trading 44,012 (11.1) 49,512 44,544Other financial assets at fair value 1,421 34.1 1,059 1,380Financial assets available for sale 60,034 10.3 54,428 52,882Loans and receivables 249,397 26.7 196,892 235,269. Due from banks 27,470 64.5 16,703 25,037. Loans to customers 216,850 26.0 172,083 202,858. Other 5,076 (37.4) 8,106 7,374Held to maturity investments 3,959 77.2 2,234 3,930Investments in associates 1,473 5.3 1,399 1,446Property, plant and equipment 4,383 11.3 3,940 4,256Intangible assets 2,070 152.1 821 1,730Other assets 13,299 (6.8) 14,269 16,190 TOTAL ASSETS 392,389 17.2 334,678 374,867 Financial liabilities held for trading 16,271 (19.7) 20,263 19,595Other financial liabilities at fair value 740 (11.3) 834 768Financial liabilities at amortised cost 329,505 19.5 275,767 308,348. Deposits by Central Banks and banks 66,315 3.1 64,349 61,363. Due to customers 182,635 21.7 150,075 166,128. Marketable debt securities 62,842 38.2 45,482 62,434. Subordinated debt 13,723 11.3 12,327 13,720. Other 3,990 12.9 3,533 4,703Liabilities under insurance contracts 10,501 29.4 8,114 10,215Other liabilities 18,071 13.7 15,894 19,034 TOTAL LIABILITIES 375,087 16.9 320,873 357,960 Minority interests 977 32.5 738 916Valuation adjustments 3,289 56.1 2,107 3,546Shareholders' funds 13,036 18.9 10,961 12,446 EQUITY 17,302 25.3 13,805 16,908 TOTAL LIABILITIES AND EQUITY 392,389 17.2 334,678 374,867 MEMORANDUM ITEM:Contingent liabilities 29,862 38.5 21,558 26,978 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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