BBVA Earnings Plummet 94% on Loan Loss Write-Offs

Spanish bank BBVA (BBVA) reported net earnings of €31m (US $43.5m) in Q409, compared to net profit of €519m in Q408, a drop of 94% year-over-year. Q409 results were impacted by a nearly €1.1bn “one-off” charge in the US for loan-loss provisions. For all of 2009, BBVA posted a net profit of €4.21bn, compared to a net profit of €5.02bn in 2008. BBVA’s non-performing assets (NPA) ratio increased to 4.3% at the end of 2009, due to an increase in doubtful assets, notably US commercial real estate and Spanish and Portuguese real estate development. Net impairment on financial assets were €1.79bn in Q409, up from €1.74 in Q309 and €859m in Q409. For the year, net impairments totaled €5.47bn, up from €2.94bn in 2008. BBVA Compass, the bank’s US retail division, increased mortgage origination quarter-over-quarter and for the year, originated $1.15bn in 2009, “a significant increase over 2008 levels,” the bank said. In Spain and Portugal, BBVA said it increased market share 37bps in its mortgage origination business. At the end of Q409, BBVA said it had a 12.8% share of the mortgage market. The bank credited this increase to a new online service that studies the “viability of mortgage proposals” in 24 hours, which generated new mortgage customer leads. The residential mortgage portfolio at BBVA’s Spanish retail division increased 2.1% from 2008 to €69.79bn. BBVA’s Mexican division launched six new mortgage products and its portfolio increased 7% year-over-year. The division is also Mexico’s largest mortgage covered bond issuer, issuing €312m in bonds. In August, BBVA Compass took over the failed Austin, Texas-based Guaranty Bank, creating the 15th largest US bank. Write to Austin Kilgore. The author held no relevant investments.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please