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Mexico has become the largest source of profits for Spanish banking giant BBVA (NYSE: BBVA), overtaking its stagnant home market for the first time in 2Q11.
BBVA's net profit in the second quarter grew 4.1% year-on-year in Mexico to 455mn euros (US$651mn), as Spanish net profits slumped 34.6% to 419mn euros.
Earnings in the rest of Latin America grew at an even healthier pace in the same period, rising 20.6% to 252mn euros.
In the first half of the year, Mexico and South America represented 37.8% and 22.4% of BBVA's net profits, respectively. Spain accounted for 38.3%.
This is a big change from 1H10, when Spain represented 52.9% of the bottom line, while Mexico and South America accounted for 31.2% and 18.9%, respectively.
LATIN AMERICA PROPS UP GLOBAL RESULTS
The growing shift of BBVA's focus away from the troubled Spanish economy toward booming Latin America is behind the relative resilience of the group's overall 2Q11 results, with net income falling 7.6% year-on-year to 1.19bn euros.
BBVA's revenues fell to 5.16bn euros in the quarter, from 5.58bn euros in 2Q10.
BBVA's banking division reported in 1H11 net profits of 726mn euros in Mexico and 438mn euros in South America, where the company's core markets are Venezuela, Chile, Peru, Colombia and Argentina, in that order.
In Mexico, the Spanish group's local banking subsidiary, BBVA Bancomer, expanded its credit portfolio by 2.6% in the first half of the year to 36.4bn euros, in nominal terms. In South America, BBVA's local banking units increased their lending by 13% to 34.6bn euros.