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BBVA Puerto Rico Posts 18% Earnings Gain For 2002
BBVA Mortgage made strong contribution to performance; local results a bright spot in light of BBVAs 27.3% drop in earnings worldwide
By KEN OLIVER-MENDEZ
February 6, 2003
BBVA Puerto Rico posted earnings of $38.7 million during 2002, an 18% increase compared with the $32.7 million reported in 2001.
The earnings growth was attributed to, among other factors, the successful performance of BBVA Mortgage, which was launched in April 2002. Mortgage loan production at BBVA was 75% higher in 2002 than in 2001, and the new operation saw the bank simultaneously benefit from entering the secondary-loan market.
BBVA Puerto Ricos total assets climbed by 7% year-to-year, from $4.8 billion to $5.1 billion. At $158.2 million, the banks net interest income in 2002 declined by 3% compared with the $162.4 million recorded for 2001. Other income for 2002, however, was $32.8 million, a 47% increase over the $22.3 million reported in 2001.
The banks loan portfolio declined from $2.9 billion to $2.7 billion, and deposits fell from $3 billion to $2.9 billion. The banks capital, meanwhile, rose from $347 million to $354 million. The amount of nonperforming loans also showed improvement, falling from $79.5 million at the close of 2001 to $64.6 million at the close of 2002.
Operational expenses rose by 1%, from $112.0 million to $112.7 million, reflecting reductions in the branch network and the restructuring of other bank operations. The banks ratio of return on assets was 0.79%, compared with 0.69% for 2001. The efficiency ratio was 60.6%, compared with 59.9% a year earlier.
BBVA Puerto Ricos performance was a bright spot in the context of BBVAs overall performance last year in Spain and Latin America. BBVA President Francisco Gonzalez announced that the banking empires earnings were down by 27.3% in comparison with 2001.
"The year 2002 wasnt an easy exercise," Gonzalez said. "Low interest rates put pressure on margins, along with the devaluation of Latin American currencies and very serious systemic problems in Argentina." Gonzalez said he is optimistic about 2003, although he cautioned that it appears it will also be a complicated one for the banking industry as a whole.
This Caribbean Business article appears courtesy of Casiano Communications.