Banco Bilbao Vizcaya Argentaria SA's U.S. operations posted a third-quarter profit as problematic loans crept up slightly.

The Madrid-based company provided a cautious outlook for the U.S. market. "A less dynamic tone can be observed in the economic recovery in the United States," the company said Wednesday. "We expect [economic growth to] be slightly more moderate towards the end of 2010 due to the deleveraging process and scarce job creation, which limits consumers' spending power."

Earnings for BBVA's U.S. operations fell 3.5% from the second quarter but increased 80% from a year earlier, to $111.6 million. Those operations include BBVA Compass, a bank in Puerto Rico and wholesale banking.

BBVA has been adjusting the mix in its U.S. loan portfolio, which shrank 3.5% from the second quarter, to $54.8 billion. BBVA Compass — which operates in seven states including Texas and Alabama — had $42.8 billion in loans at the end of the third quarter. Construction loans made up 14.2% of the BBVA Compass loan book at Sept. 30 compared with 22.3% a year earlier. Residential mortgages rose to 18.9% of total loans, up from 13.7% a year earlier.

The nonperforming asset ratio in the U.S. rose slightly, to 4.6% from 4.3% a quarter earlier. The company said it had been exercising "stricter risk control in the construction of real estate and car financing portfolios."

U.S. deposits fell 2.1% from the second quarter, to $78.1 billion. BBVA Compass had $44.1 billion of those deposits. The average cost of deposits, however, is half that of a year earlier, due to a heavier concentration of core deposits, the company said.

BBVA grew in the U.S. through a series of acquisitions, buying several Texas banks and acquiring Compass Bancshares Inc. of Birmingham, Ala., in 2007. This was the first quarter since BBVA tapped Manuel Sanchez to succeed Jose Maria Garcia Meyer to lead all U.S. operations. Sanchez said in an American Banker interview last month that his goal is to improve performance and for now de-emphasize acquisitions.

BBVA's overall earnings fell 11.3% from the second quarter and 17.4% from a year earlier, to $1.57 billion.

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