Banco Bilbao Vizcaya Argentaria SA (BBVA) Wednesday outlined
plans to grab a big chunk of the Spanish banking market over the
next three years as the sector's ailing savings banks
restructure.
The announcement came as Spain's second-largest bank by assets
reported a jump in fourth-quarter profits backed by robust growth
in Latin America, which offset weakness in Spain.
BBVA said net profit was EUR939 million in the quarter, up from
EUR31 million in the fourth quarter a year earlier. At the end of
2009, BBVA cleaned up its books by front-loading charges on part of
the loan book that it deemed problematic, even if it was still
performing.
Angel Cano, BBVA's chief operating officer, said the bank has
set a target to boost its market share in Spain by "at least 50%"
over the coming three years, mostly from the retrenchment of the
savings banks, known here as the cajas.
"We see Spain as a clear opportunity. It's a very open
consolidation process, and we're well placed and know the
territory," Cano said. BBVA currently has an overall market share
of 11% in the country.
Spain's government and central bank last year forced through a
wave of mergers that reduced the number of cajas to 17 from 45.
Now, they're pushing these mutually owned lenders to simplify
their complex structures and become more like traditional banks,
and they're forcing them to raise more capital. Analysts widely
expect more consolidation and restructuring in the sector, as the
weakest lenders are absorbed by stronger ones.
During its results presentation Wednesday, BBVA signaled that it
will continue to hoard capital due to an uncertain economic
environment.
BBVA boosted its buffer for potential losses significantly,
raising core capital to 9.6% from 8% a year earlier. The lender in
the fourth quarter issued new shares to pay for a 24.9% stake in
Turkish bank Turkiye Garanti Bankasi AS (GARAN.IS). Once that
transaction is completed, BBVA's capital ratios would fall back to
8.6%, it said.
The bank earlier in the crisis cut its dividend to preserve
capital. Now it said it plans to give investors the option to
receive two of its four annual dividend payments in new shares, in
line with a strategy followed by its bigger rival Banco Santander
SA (STD).
"That's going to be interpreted as a negative, that they still
see a need to preserve capital," said Andrew Lim, head of
financials research at London based brokerage Matrix.
Like other Spanish banks, lending margins came under pressure
due to higher funding costs and still sluggish demand for loans in
Spain. Net interest income in the quarter fell 13% to EUR3.14
billion, the bank said. COO Cano said margins are likely to improve
from the second half of this year, as the cost of deposits
moderate.
The sluggish environment at home led to a drop in earnings in
Spain and Portugal, where net profit fell 9% in 2010 to EUR2.1
billion.
Profit was up in all the bank's other divisions. In Mexico,
profit rose 12% to EUR1.7 billion as demand for loans grew after
the local economy roared back to life. And in South America, credit
grew by 22% and deposits by 19%, underpinning a 17% rise in net
profit to EUR889 million.
In the U.S. the group swung to a profit of EUR236 million from a
EUR950 million loss in 2009. That year, the bank took a hit when it
wrote down the value of its commercial real-estate loans.
JP Morgan said the U.S. operations are arising as the main drag
to the bank's earnings growth, together with Spain. It added that
Mexico and Latin American operations in general remain solid, with
better revenue trends and asset quality stabilization still in
place.
BBVA's wholesale banking unit reported an 11% rise in net profit
to EUR950 million, as investment banking revenue rose.
BBVA's shares rose in early trade Wednesday, but later turned
lower. At 0834 GMT, the stock was down 0.4% at EUR9.27.
-By Christopher Bjork, Dow Jones Newswires; +34913958123;
christopher.bjork@dowjones.com
-0-
The sluggish environment at home led to a drop in earnings in
Spain and Portugal, where net profit fell 9% in 2010 to EUR2.1
billion.
Profit was up in all the bank's other divisions. In Mexico,
profit rose 12% to EUR1.7 billion as demand for loans grew after
the local economy roared back to life. And in South America, credit
grew by 22% and deposits by 19%, underpinning a 17% rise in net
profit to EUR889 million.
In the U.S. the group swung to a profit of EUR236 million from a
EUR950 million loss in 2009. That year, the bank took a hit when it
wrote down the value of its commercial real-estate loans.
BBVA's wholesale banking unit reported an 11% rise in net profit
to EUR950 million, as investment banking revenue rose.
BBVA's shares rose in early trade Wednesday, and at 0834 GMT,
the stock was up 0.5%, to EUR9.36.
The stock has gained 23% since the beginning of the year. Fears
that Spain would have to be bailed out by stronger European Union
countries have abated in recent weeks, pushing down the yields on
Spanish sovereign debt and sparking a rally in the banking
sector.
-By Christopher Bjork, Dow Jones Newswires; +34913958123;
christopher.bjork@dowjones.com
-0-
vemos clara prioridad en crec organico, pero puede haber
oportunidades de crec no organico tb
emergente
seguir observando dinamismo muy fuerte en actividad.
tenemos planes muy claros de crec muy ambicioso en estas
geografias
a la madura
Espanya
cremos que crecimiento de depositos no va a ser tan elevado.
focus on gaining market share. taking advantage of restructuring
process in Spain.
Mexico. activity is picking up
South Am>
US. focus on consolidating BBVA model. vamos a ver crec
relevantes en 2011. investing in new tech platform
WB. expect to improve revenue.
strong potential in all areas.
la politica div no cambia. este anyo 38%.
seguimos con 4 pagos. el payout va a suponer 38%, up from 30%
anyo pasado. no plan to boost 42 centimos, pero no descarto que
hagamos algun
manteniendo 42
no planeamos subir 42 centimos.
no descarto que suba.
por razones fiscales.
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