BBVA returns to pre-pandemic benefits in March after earning 1,210 million

On the same dates last year, the bank lost 1,792 million after provisions and the deterioration of goodwill in the United States.

BBVA headquarters in Madrid.

BBVA returns to record profits as before the pandemic. The bank earned in the first quarter of the year 1.21 billion, compared to the losses of 1,792 million registered on the same dates of the previous year, when it made a strong increase in provisions and applied a impairment to US goodwill.

The interest margin of the entity fell 2.3% between January and March, to 3,451 million, something that the bank attributes to low interest rates. The net commissions, however, grew by 10%, to 1,133 million.

Thus, income from the banking business (interest income plus commissions) grew by 0.5% year-on-year, while the result of financial operations (ROF) advanced by 16.1%, to 581 million euros, thanks to which the gross margin grew by 0.2%, to 5,155 million euros.

The operating expenses they increased by 1.8% between January and March compared to the same period in 2020, to 2,304 million euros; a growth that is significantly below the average inflation of the countries in which BBVA is present (4.7%). The efficiency ratio stood at 45%.

The bank significantly reduced write-downs and provisions compared to the same dates of the previous year, when a strong provision was made, with falls of 52.4% and 47.3%, respectively.

improve capital

As for the capital, the CET 1 ratio fully loaded, the benchmark for the market, stood at 11.88% at the end of March, above that registered in December 2020 (11.73%).

For its part, the default rate and of coverage they remained practically stable compared to December and closed the quarter at 4.3% and 81%, respectively. The cost of risk maintained its downward trend and stood at 1.17% in the quarter, excluding the part sold of the United States business, compared to 2.54% a year earlier and 1.55% accumulated in 2020.

Onur Genç, CEO of BBVA.

Onur Genç, CEO of BBVA.

BBVA closed the quarter with stability in the number of loans and advances to customers, at 322,866 million.

The customer resources They fell by 1.7%, to 437,979 million, due to the drop in customer deposits (-3.4%), although off-balance deposits (mainly investment and pension funds) increased by 3.9 %.

Benefit in Spain

By region, in Spain the bank earned 381 million, compared to losses of 130 million on the same dates last year. In the first quarter, credit investment fell by 1.4% mainly due to the reduction in mortgage loans (-2.6%) and lower operations in larger companies (-6%) and in the public sector ( -9.2%).

Onur Genç, CEO of BBVA, presents the results of the first quarter.

The net interest income registered a reduction of 1.3%, to 867 million euros, affected by the environment of low interest rates. However, the positive evolution of net commissions and ROF boosted the gross margin by 8.9%, to 1,646 million euros. The default rate and the coverage rate remained practically stable with respect to the end of the previous year, at 4.4% and 66%, respectively.

In Mexico, BBVA’s main market, credit investment registered a decrease of 6.5%, mainly due to the corporate sector. The bank, however, earned 493 million euros, 46.9% more year-on-year, thanks to the lower impact of the provisions compared to the first quarter of 2020 (-34.2%).

BBVA won in Turkey, 191 million, which is 96% more, thanks to the contribution of net commissions and ROF, as well as the significantly lower write-downs and provisions compared to the same period of the previous year. Profit also grew considerably in South America, 150.2%, up to 104 million.