Mexico's BBVA Bancomer 1Q Net Profit +17.3% On Loans, Deposits

BBVA Bancomer, Mexico's largest bank, said Thursday its after-tax net profit surged 17.3% during the first quarter to 7.19 billion pesos ($603 million) as deposits grew and it extended more credit.

The gain in net profit came despite a 0.2% decrease in commissions on traditional banking services after Mexican regulators enacted limits in January on the fees and penalties that banks can charge their customers. Deposits and funds under management expanded by 13% on the year to MXN812.32 billion, BBVA Bancomer said.

BBVA Bancomer is a unit of Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA, BBVA.MC). BBVA reported earlier Thursday from Spain that its total net profit slipped 7.3% to 1.15 billion euros ($1.7 billion) for the period, and that net profit in euros at its Mexican unit jumped 26% to 436 million euros, aided by the strength of the Mexican currency during the quarter.

BBVA Bancomer reported a loan portfolio of MXN572.88 billion at end-March, up 15.4% on the year, with double-digit growth in credit to both consumers and corporates.

The bank's rate of nonperforming loans improved to 2.5% from 3.6% at the end of the first quarter 2010.

The bank's net interest income--the difference between what a bank charges for loans and what it pays to fund itself--grew 5.1% to MXN15.95 billion thanks to greater lending volume and growth in deposits.

Expenses increased 8.8% to MXN8.60 billion as BBVA Bancomer executed a $2 billion, three-year investment plan that involves spending for technology and new offices.

By Amy Guthrie, Dow Jones Newswires; (5255) 5980-5177,

amy.guthrie@dowjones.com

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