BBVA 4Q Net Profit Jumps On Lower Provisions; Boosts Capital
February 02 2011 - 2:37AM
Dow Jones News
Banco Bilbao Vizcaya Argentaria SA (BBVA) Wednesday said net
profit jumped in the fourth quarter as it recovered from the hefty
write-downs it took a year earlier, helped by robust growth in
Mexico and South America, which offset weaker numbers in Spain.
The bank, Spain's second-biggest by assets behind Banco
Santander SA (STD), said net profit was EUR939 million in the
quarter, up from EUR31 million in the fourth quarter a year
earlier. At the end of 2009, BBVA cleaned up its books by
front-loading charges on part of the loan book that it deemed
problematic, even if it was still performing.
That move allowed the bank to report a decline in bad loans at
the end of the year. Its non-performing loans equalled 4.1% of
total loans, down from 4.3% a year earlier.
However, like other Spanish banks, lending margins came under
pressure due to higher funding costs and still sluggish demand for
loans in Spain.
Net interest income in the quarter fell 13% to EUR3.14 billion,
the bank said.
A Dow Jones Newswires survey of 10 analyst on average estimated
net profit at EUR934 million, and net interest income at EUR3.15
billion.
For the full year, BBVA said net profit was EUR4.61 billion, up
from EUR4.21 billion in 2009.
BBVA also boosted its buffer for potential losses significantly,
raising core capital to 9.6% from 8% a year earlier. The lender in
the fourth quarter issued new shares to pay for a 24.9% stake in
Turkish bank Turkiye Garanti Bankasi AS (GARAN.IS). Once that
transaction is completed, BBVA's capital ratios would fall back to
8.6%, it said.
BBVA's shares rose 3.8% Tuesday to close at EUR9.31. The stock
is up 23% since the beginning of January. Fears that Spain would
have to be bailed out by stronger European Union countries have
abated in recent weeks, pushing down the yields on Spanish
sovereign debt and sparking a rally in the banking sector.
-By Christopher Bjork, Dow Jones Newswires; +34913958123;
christopher.bjork@dowjones.com
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