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International Banks Continue To Struggle In Latin America

BBVA, Citigroup, and Scotiabank see little improvement in regional performances


March 11, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

International banking institutions Banco Bilbao Vizcaya Argentaria (BBVA), Citigroup, and Scotiabank reported marginal improvements in their Latin America divisions, which include Puerto Rico.

Excluding its operations in Argentina and Brazil, BBVA’s Latin America market generated net income in 2003 of 715 million euros, or approximately US$884 million, a decline of 2.8% over 2002.

The largest contributor in the region was Mexico, where BBVA’s Bancomer increased its net income by 24% based on local currency to 406 million euros, or approximately US$502 million.

BBVA Puerto Rico saw a net income of 35 million euros in 2003, or approximately US$43.5 million, matching its net income of the previous year.

In 2003, BBVA attained global net income of 2.2 billion euros, or approximately US$2.7 billion, reflecting an increase of 29.5% over 2002’s 1.7 billion euros, or approximately US$2.1 billion.

U.S. financial services giant Citigroup boosted its fourth-quarter 2003 net income in Latin America (excluding Mexico) to $139 million, 83% higher than in the same period in 2002. The increase was driven by lower consumer and corporate credit costs.

For the full year, Citigroup saw its Latin America division return to the black with $645 million in net income, recovering from a $67 million loss in 2002. In Mexico, where Citigroup runs Banco Banamex, the group managed to increase both fourth-quarter and full-year net income by 10% and 20% to $357 million and $1.45 billion, respectively.

Citibank refused to provide the financial results of its Puerto Rico operations.

The group’s global net income in the fourth quarter of 2003 was $4.76 billion, a 96% increase over the last quarter in 2002. Citigroup’s total net income in 2003 reached $17.9 billion.

Scotiabank’s earnings contribution from all of Latin America in 2003 was 326 million Canadian dollars (approximately US$247 million), compared with a loss of C$262 million (approximately US$199 million) in 2002 because of charges related to the sale of Scotiabank Quilmes in Argentina. Excluding the impact of foreign-currency translation and the sale of Scotiabank Quilmes, earnings rose by C$83 million (approximately US$63 million) or 30%.

A major contributor to the overall growth in Latin America was Mexico’s Scotiabank Inverlat, in which the institution acquired an additional 36% ownership last year. Scotiabank’s Caribbean and Central America markets were the weak spots in the region, contributing net income of C$253 million (approximately US$192 million) in 2003, down 13% from 2002.

Scotiabank refused to provide figures reflecting the results of its Puerto Rico operations.

Scotiabank’s net income from international banking (including Asia) was C$669 million (approximately US$507 million) in 2003, an improvement over the C$125 million (approximately US$95 million) earned in 2002. International banking represented some 27% of the institution’s 2003 global net income of C$2.5 billion (approximately US$1.9 billion), which was 38% higher than in the previous year.

This Caribbean Business article appears courtesy of Casiano Communications.
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