BBVA earned 2,200 million in the first quarter, up 19.1%

BBVA achieved a net profit of €2,200 million for the entire first quarter of 2024.which represents an increase of 19.1% compared to the same period last year.as the bank reported this Monday when publishing quarterly reports.

The increase in profit comes despite the fact that in this first quarter the bank recognized at accounting level a total amount of special bank tax that amounts to EUR 285 million. which is 26.6% more than the amount paid last year.

“In the first quarter of 2024, we received excellent results, which improve our prospects. We now expect to increase annual profit at a double-digit rate,” explained the bank’s CEO Onur Gench.

The bank’s total income (gross profit) at the end of the quarter amounted to 8.218 million euros, which implies an increase of 18.1%. Of this amount, net interest income (interest margin) reached EUR 6.512 million, an increase of 15.4%, and net commissions increased by 31.1%. up to 1.887 million euros

.

The result of financial transactions contributed revenues with 772 million eurosan increase of 76.2%, while the other operating income and expense line, which includes special tax, deducted 952 million from income, representing an increase of 69.7%.

The bank’s personnel costs amounted to 1.778 million euros., an increase of 14.7%, and other administrative expenses amounted to 1.229 million euros, or 9.1% more. The negative impact of depreciation was 375 million, or 10.9% more.

Impairment of financial assets not measured at fair value amounted to EUR 1,361 million, or 40.5% more. Likewise, the bank decided to allocate 57 million euros.The figure is four times the amount of reserves a year ago, but lower than the last three quarters of 2023.

By geography, BBVA’s main market remained Mexico with gross profit of 3,967 million euros (+20%) and profit of 1,441 million (+12.7%). In second place was Spain with gross profit of 2.162 million (+25.2%) and profit of 725 million (+36.5%).

Türkiye came in third place where BBVA increased total revenue by 11.8% (to 897 million), but reduced its profit by 48%, to 144 million euros, due to the depreciation of the Turkish lira due to hyperinflation.

In the rest of Latin America, the bank earned 600 million (-5.8%) and earned 119 million, down 34.3%. The remaining businesses ended the quarter with revenue of €176 million, up 41.9%, and profit of €121 million, up 30.1%, highlighting the contribution of the rest of Europe and the New York subsidiary.

Balance sheet and solvency

At the end of March, BBVA’s total assets were valued at 801.690 million euros, up 8.4%. Of this amount, loans and advances to customers increased by 7.4% to €388.949 million.

Of the total loan portfolio, loans to enterprises grew by 6.6% over the year, to EUR 188.902 million. Of the portfolio dedicated to individuals, mortgage loans grew by 3.1% to €94.887 million, while the consumer lending business increased by 10% to €44.175 million. The credit card portfolio grew by 20% to EUR 22.816 million.

On the other hand, liabilities increased by 8.4%, reaching EUR 745,912 million. Deposits from central banks and credit institutions fell by 28.3%, while customer deposits increased by 10.3% to €436.763 million.

The bank’s off-balance sheet account managed customer resources amounting to €178.313 million, up 10.8% year-on-year. Of this amount, investment funds and managed portfolios amounted to EUR 143.345 million, an increase of 20.8%. For their part, pension funds have reduced 24.7%, up to 29,286 million euros.

The total volume of doubtful loans as of March 31 amounted to 14.938 million euros, which is 13% more than a year earlier. In any case, with an increase in the loan portfolio, the default rate increases by only one tenth – to 3.4%.

In terms of solvency, BBVA ended the first quarter with a fully loaded CET1 ratio of 12.82%, representing a decline of 31 basis points compared to the start of 2023. On the other hand, the total capital ratio has improved. by 36 points, to 16.66%.

The return on tangible equity (RoTE) was 17.7% between January and March 2024, representing an improvement of 1.4 percentage points compared to 16.3% in the first quarter of 2023.