RNS No 4352v
BANCO BILBAO VIZCAYA S.A.
31 January 1998
THE BBV GROUP, IN 1997
The BBV Group's net attributable profit in 1997 was more than 26% higher at Pta.
130,848 million; this represented an ROE of 18.4% and made the year a very
positive one for us.
The 1000 Day Programme, the three year strategic Plan launched at the end of
1994, was concluded in 1997. The successes achieved since the Programme began
have been very significant, not only in 1997, but also in the other two years.
1997 was an excellent conclusion to a process of change with BBV is very
satisfied with and, furthermore, proud of.
Perhaps one of the most important achievements of the 1000 Day Programme was
the involvement of all the BBV Group's employees in achieving the goals, which
caused their capacities to surface and made them much more motivated. The
innovative initiative of setting targets resulted not only in their fulfilment,
but comfortably surpassing them.
The 1000 Day Programme produced a strong improvement in the competitive
position of all business areas as well as a substantial improvement in their
capacity to contribute profits to the Group, lifting profitability ratios.
The Programme transformed BBV into a much more diversified Group. The
diversification was also double edged: on the one hand, the range of markets,
segments and sectors in which each area operates was increased, producing a
diversification, expanding businesses into various countries and building a
large Latin American franchise. Today, the BBV Group is less dependent on the
Spanish economy's cycles.
All the BBV Group's areas, each one to the extent allowed by the situation of
the different markets in which activities are developed, made an important
contribution to the final profit.
In 1997, BBV acquired a stake of more than 40% in Banco Provincial,
Venezuela's largest privately-owned bank. At the end of the year, this bank
acquired, via a tender, Banco Popular y de los Andes, which has a significant
presence in two important regions of Venezuela. We also acquired Banco do
Credito Argentino, whose features make it an ideal complement to Banco Frances.
Lastly, BBV increased the size of its stakes in almost all the banks already
included in the Group. These acquisitions are part of the expansion strategy in
the Americas already comented on.
Also noteworthy was the expansion in 1997 of pension fund management business
in the Americas, both in terms of increased stakes and the number of countries.
The BBV Group is currently present in pension fund management entities in
Argentina, Bolivia, Colombia, Mexico and Peru. Total funds under management
amount to more than $3 billon.
The BBV Group is, above all else, a solid group. Its solvency is underscored
by the degree of coverage of non-performing loans, which is more then 100%, way
above the most demanding requirements. It is also underlined by the significant
unrealised capital gains derived from both the industrial portfolio and the
fixed-income portfolio, as well as from the financial entities that are
consolidated. And it is also demonstrated by the Group's capital base of
Pta. 1,327,273 million, Pta. 425,216 million above the Bank of Spain's minimum
requirement. This comfortable capital base enables BBV to enjoy the confidence
of analysts, rating agencies and investors.
We at BBV believe it is vital to achieve the highest level of technology; this
is because we are convinced that being in the vanguard with state-of-the-art
technology and the latest advances in communications is an indispensable
condition for managing an increasingly complex and diversified Group, as well as
adequately satisfying customer needs. Indeed, innovation is another of our
hallmarks. In a changing environment, where new financing requirements or
demands for new products and services are constantly appearing in the corporate
sector and among individual clients, BBV aims to be the pioneer in providing,
the best solutions for clients' needs.
The Group's good results were underscored by the rise in the BBV share price.
At the end of 1997 it stood at Pta. 4,930, 111% higher than a year earlier
(Pta. 2,337). This increase was undoubtedly spurred by the favourable stock
market climate, but it was much higher than the rise in both the banking and
general indices of the Spanish stock market. BBV shareholders were thus
particularly rewarded for their investment. Since the launch of the 1000 Day
Programme, the yearly cumulative yield has been 68%.
The 1000 Day Programme came to an end in 1997, but the BBV Group continues.
1997 was an excellent year and a magnificent culmination to an intense plan over
the last three years. The Programme has launched the Group and made it a market
leader. But the environment ahead is still a difficult one. This is why we
have prepared a new and ambitious strategic plan, Programme Two 1000.
The central core of the new programme is the creation of shareholder value; for
this reason, we have drawn up strategy to achieve a substantial increase in
profits and one that is sustained. The task is not easy, but we are determined
to take advantage of all resources at our disposal to make BBV an even better
Group.
BBV GROUP INCOME STATEMENT
(millions of pesetas)
DEC DEC % US$
97 96 Change (millions)
Financial revenues 1,511,350 1,406,017 7.49 9,963
Financial costs -943,226 -990,444 -4.77 -6,218
NET INTEREST INCOME 568,124 415,573 36.71 3,745
Fees & Commissions 219,443 133,507 64.37 1,446
Market operations 82,256 37,793 N.M. 542
ORDINARY REVENUE 869,823 586,873 48.21 5,733
Administrative Costs -475,006 -317,484 49.62 -3,131
Personnel -312,484 -222,149 40.66 -2,060
Wages and other -300,246 -218,573 37.37 -1,979
Pensions -12,238 -3,576 N.M. -81
General expenses -162,522 -95,335 70.47 -1,071
Other income-costs -13,968 -12,723 9.79 -92
DGF annual fee -14,667 -11,238 30.51 -97
Other terms 699 -1,485 N.M. 5
Depreciation -46,441 -34,363 35.15 -306
OPERATING INCOME 334,408 222,303 50.43 2,204
Income from associates 81,616 41,640 96.00 538
Group Net transactions 60,075 20,501 N.M. 396
Income by the equity
method 21,541 21,139 1.90 142
Loan Loss provision (net) -77,466 -73,329 5.64 -511
Gross -118,115 -103,666 13.94 -779
Reversals 24,109 18,165 32.72 159
Bed debts' recoveries 16,540 12,172 35.89 109
Securities writedowns 9 -1,323 N.M. 0
Goodwill amortization -72,214 -11,442 N.M. -476
Extraordinary item -31,439 -17,587 78.76 -207
Disposals 4,823 4,010 20.27 32
Other -36,262 -21,597 67.90 -239
PROFIT BEFORE TAX 234,914 160,262 46.58 1,548
Corporate Tax -54,460 -35,157 54.91 -359
NET INCOME 180,454 125,105 44.24 1,189
Minority interests -49,606 -21,340 N.M. -327
Preference shares -11,230 -7,915 41.88 -74
Other -38,376 -13,425 N.M. -253
NET ATTRIBUTABLE 130,848 103,765 26.10 862
(*)1 US$: ptas.151.7. Consolidated accounts are presented in accordance with
Bank of Spain 4/91 and 5/97 follow generally accepted accounting principles.
BOV GROUP BALANCE SHEET (*)
(millions of pesetas)
DEC. 97
ASSETS DEC. 97 DEC. 96 % Change (US$ millions)
Cash and Central Banks 389,394 245,855 58.38 2,567
Government Debt 971,866 1,586,335 -38.74 6,406
Due from Banks 6,842,349 5,095,207 34.29 45,104
Total lending (Gross) 8,872,980 6,981,140 27.10 58,489
- Reserves -294,968 -243,204 21.28 -1,944
Investment Portfolio 2,937,369 2,412,651 21.75 19,363
Fixed Income 2,255,375 1,821,475 23.82 14,867
Securities 681,994 591,176 15.36 4,496
Premises and Equipment 585,827 480,183 22.00 3,862
Other Assets Account 506,679 328,428 54.27 3,340
Accrual Accounts 327,220 280,143 16.80 2,157
TOTAL 21,138,716 17,166,738 23.14 139,344
LIABILITIES
Capital 175,849 129,220 36.08 1,159
Reserves 623,250 589,005 5.81 4,108
Minority Interests 416,391 256,814 62.14 2,745
Due to Banks 5,410,006 4,881,451 10.83 35,662
Customer Funds 13,633,715 10,681,211 27.64 89,872
Other Liabilities Accounts 353,433 214,756 64.57 2,330
Accrual Accounts 345,618 289,176 19.52 2,278
Not Income 180,454 125,105 44.24 1,190
TOTAL 21,138,716 17,166,738 23.14 139,344
(*)1 US$ ptas. 151.7. Consolidated accounts are presented in accordance with
Bank of Spain Circular 4/91 (and ensuring circulars) and follow generally
accepted accounting principles.
Average Total Assets 18,853,738 14,935,517 26.23 1,243,281
Avenge shareholders funds 712,902 636,527 12.00 4,699
BIS Ratio (Tier 1) 13.5 (9.7) 13.9 (9.8) - -
Risk weighted assets 10,652,660 8,385,046 27.00 -
BBV BBV (1)
DEC. 97 DEC. 96 DEC.97
Lending quality (B. of Spain's regulations)
NPL as % Lending 2.91 3.25 2.02
N.P.L.
Initial 227,203 242,227 168,622
DECEMBER 31st 257,980 227,203 135,374
Net Change 30,777 -15,024 -33,248
% Net Change 13.55 -6.20 -19.72
NPL's Reserves
Last 294,968 243,204 158,568
% Coverage NPL 114.34 107.04 117.13
Lending quality
NPL as % Lending 1.64 1.50 0.95
% Coverage NPL 176.34 188.34 210.58
(1) Excluding Probursa (Mexico), Continental (Peru), Ganadero (Columbia),
Frances (Argentina) and Provincial (Venezula).
TOTAL LENDING AND CUSTOMER FUNDS BREAKDOWN
(Millions of pesetas)
DEC. 97 DEC. 96 % Change
Due from Public Sector 504,022 483,326 4.28
Due from residents 5,179,865 4,483,441 15.53
Commercial bills 717,677 772,576 -7.11
Borrowers with collateral 1,495,759 1,212,941 23.32
Personal loans 1,742,371 1,500,056 16.15
Credit accounts 540,323 489,177 10.46
Other term loans 185,814 105,836 75.57
Others 262,597 192,857 36.16
Leasing 235,324 209,998 12.06
Due from non residents 2,931,113 1,787,170 64.01
Non performing loans 257,980 227,203 13.55
TOTAL LENDING (GROSS) 8,872,980 6,981,140 27.10
(-) Reserves -294,968 -243,204 21.28
TOTAL LENDING (NET) 8,578,012 6,737,936 27.31
Pesetas 5,569,569 4,865,203 14.47
Foreign currencies 3,008,743 1,872,733 60.66
DEC. 97 DEC. 98 % Change
Public Sector 689,895 532,203 29.59
Other resident sectors 7,237,368 6,428,318 12.59
Current accounts 1,563,714 1,332,763 17.33
Savings accounts 1,087,773 998,862 8.90
Time deposits 2,225,454 2,000,934 11.22
Sales with repurchase agreements 2,266,288 2,043,778 10.89
Others 94,139 51,981 81.10
Non-residents 4,387,790 2,871,531 52.80
Marketables Debt Securities 1,024,755 596,277 71.86
Subordinated Debt 294,107 252,882 16.30
TOTAL CUSTOMER FUNDS 13,633,715 10,681,211 27.64
Pesetas 8,306,812 7,346,907 13.07
Foreign currencies 5,326,903 3,334,304 59.76
Mutual funds 3,890,172 2,533,494 53.55
Pension funds 1,044,059 638,083 63.62
Portfolio management 1,686,982 1,101,310 53.18
Technical reserves of Euroseguros 336,959 309,994 8.70
OFF-BALANCE FUND 6,958,172 4,582,881 51.83
TOTAL MANAGED CUSTOMER FUNDS 20,591,887 15,264,092 34.90
YIELDS AND COSTS
(millions Of Pesetas and %)
DECEMBER 97 DECEMBER 96
Average Average Average Average
Balance Yield Rates Balance Yield Rates
Total tending 7,774,688 805,433 10.36 5,957,476 676,734 11.36
Pesetas 5,190,370 431,552 8.32 4,673,095 492,736 10.54
Foreign currencies 2,584,318 373,881 14.47 1,284,381 183,998 14.33
Investment
securities 3,317,683 321,533 9.69 2,725,164 267,058 9.80
Pesetas 1,232,987 73,996 6.00 1,308,740 100,291 7.66
Foreign currencies 2,084,696 247,537 11.87 1,416,424 166,767 11.77
Equity method
securities 552,834 36,225 6.55 478,688 28,810 6.02
Other investment
securities 96,421 3,413 3.54 64,805 3,413 5.27
Credit entities 5,802,640 324,419 5.59 4,677,444 414,662 8.87
Pesetas 2,457,491 130,017 5.29 2,152,726 265,642 12.34
Foreign currencies 3,345,149 194,402 5.81 2,524,718 149,020 5.90
Bank of Spain 168,819 10,522 6.23 208,949 12,802 6.13
Non-income
producing assets 1,140,653 822,991
Other financial
products 9,805 2,538
INTEREST
REVENUES 18,853,738 1,511,350 8.01 14,935,517 1,406,017 9.41
DECEMBER 97 DECEMBER 96
Average Average Average Average
Balance Yield Rates Balance Yield Rates
Customer's funds 11,834,069 618,638 5.23 9,227,209 579,432 6.28
Pesetas 7,322,484 283,490 3.87 6,806,428 377,528 5.55
Customers deposits 5,396,375 174,251 3.23 5,132,896 248,431 4.84
Repo assets 1,822,781 102,095 5.60 1,595,174 123,485 7.74
Marketable debt
securit. 103,328 7,144 6.91 78,358 5,612 7.16
Foreign currencies 4,511,585 335,148 7.43 2,420,781 201,904 8.34
Due to cre.ent and
B.of Spain 5,111,133 315,343 6.17 4,310,665 405,715 9.41
Pesatas 2,127,262 116,185 5.46 2,062,521 246,362 11.94
Foreign Currencies 2,983,871 199,158 6.67 2,248,144 159,353 7.09
Shareholders'funds 712,902 636,527
Funds without cost 1,195,634 761,116
Other interest expenses 9,245 5,297
TOTAL INTEREST
EXPENSES 18,853,738 943,226 5.00 14,935,517 990,444 6.63
NET INTEREST INCOME 568,124 3.01 415,573 2.78
BBV GROUP HIGHLIGHTS
(Consolidated figures)
DEC. 97 DEC. 96 % Change
Balance Sheet (Millions of pesetas)
Total assets 21,138,716 17,168,738 23.1
Toted landing 8,872,980 6,981,140 27.1
Customers' funds 13,633,715 10,681,211 27.6
Shareholders' funds 776,024 723,533 7.3
Income statement (Millions of pesetas)
Net interest income 568,124 415,573 36.7
Operating income 334,408 222,603 50.4
Income before taxes 234,914 160,262 46.6
Net attributable profit 130,848 103,765 26.1
Data per share (Pesetas)
Earnings 194 154 26.0
Book value 1,147 1,073 6.9
Share price 4,930 2,337 110.0
Key ratios (%)
R.O.A. (Net income/Average total assets) 0.96 0.84 -
RORWA ((Net income/Return on risk weighted 1.90 1.70 -
as.)
R.O.E. (Net attributable/Average equity) 18.4 16.3 -
Other relevant figures
Number of employees 60,282 44,064 -
Spain 25,067 24,835 -
Abroad 35,215 19,229 -
Number of branches 4,349 3,749 -
Spain 2,829 2,841 -
Abroad 1,520 908 -
END
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