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BBVA Sees LatAm Earnings Driving Growth From 2011
 Judy MacInnes & Jesus Aguado - Reuters
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May 03, 2010
| | A flag of Spain's second-largest bank BBVA flutters beside its headquarters in Madrid January 27, 2010. (Reuters/Sergio Perez) | |
Madrid - Spain's BBVA (BBVA.MC) expects earnings growth in Latin America to outpace its home market next year, and it is seeking acquisitions to boost market share there, the bank's head of operations for the region said on Monday.
"We need to be ambitious in seeking out non-organic growth opportunities which complement our existing franchise in Latin America. We are studying all the opportunities which come along," Vicente Rodero told the Reuters Latin American Investment Summit in Madrid.
Spain's second largest bank is upbeat about the economic outlook for Latin America, forecasting growth of 3 to 3.5 percent in 2010, not including Mexico, fueled by commodities and a solid financial system, as well as economic ties with Asia.
BBVA expects operations in its Latin America and Mexico divisions to be key earnings drivers in 2011 and offset an expected sluggish trend in Spain, which is tipped to lag other European countries in exiting recession.
Latin America currently accounts for about 19 percent of BBVA's group revenues, Mexico for 25 percent, and Spain and Portugal for around 35 percent.
Spain's contribution has been declining for several years and the trend is seen continuing in the coming years, Rodero said.
BBVA posted a 16.1-percent drop in 2009 net profit to 4.2 billion euros ($5.59 billion) from a year earlier, due to heavy provisions mostly for falling property values in Spain.
MEXICO
BBVA expects the Mexican economy to grow over 5 percent in 2010 after a tough 2009 due to the recession in the United States, the country's biggest trading partner.
"We will probably see flat profits in Mexico in 2010. The uptick in economic activity will be more noticeable in group results in 2011," Rodero said.
Profits at BBVA's Mexican arm Bancomer dropped 19.1 percent to 1.36 billion euros in 2009, while in Latin America earnings rose 21.8 percent to 871 million euros.
Rodero played down recent market speculation that BBVA might list part of Bancomer to raise funds for further expansion in the region.
"We have no plans to list Bancomer. We think there is still substantial upside for us in Mexico and we don't want to share it with anyone," Rodero said.
Arch rival Santander (SAN.MC), Spain's largest bank, floated part of its Brazilian operations via an initial public offering, in one of the world's top three IPOs in 2009.
However, Rodero added that if there were any changes in the regulatory framework governing the banks in Mexico, BBVA could be obliged to list part of Bancomer.
The Mexican government is known to be keen to see the country's foreign banks list on the stock exchange.
(Reporting by Judy MacInnes and Jesus Aguado; Editing by Hans Peters)
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