BBVA First-Quarter Net Profit Rises -- Update
April 27 2017 - 3:25AM
Dow Jones News
By Jeannette Neumann
MADRID--Banco Bilbao Vizcaya Argentaria SA (BBVA) said Thursday
that net profit rose in the first quarter versus a year earlier as
the bank also inched up its capital ratio.
BBVA said net profit was 1.2 billion euros ($1.31 billion) in
the first quarter of this year compared with EUR709 million a year
earlier, when the bank had a particularly weak quarter because of
currency turmoil, weaker trading income and higher costs.
That beat analysts' estimates that BBVA would report a net
profit of EUR1.08 billion in the first quarter, according to a poll
by data provider FactSet.
The Spanish lender said net interest income in the first quarter
was EUR4.32 billion compared to EUR4.15 billion a year earlier.
Net interest income, a key profit driver for retail banks, is
the difference between what lenders earn from loans and pay for
deposits. That figure came in slightly below analysts' estimates
for BBVA's first-quarter net interest income of EUR4.35 billion,
according to FactSet.
BBVA's fees and commissions were up both year-on-year and
quarter-on-quarter. The lender attributed that increase to a
recovery in its wholesale banking activity. Net trading income also
improved in the first quarter from a year earlier.
Net profit in Mexico rose in the first quarter to EUR536 million
from EUR489 million in the previous quarter. BBVA owns Bancomer,
one of the largest banks in Mexico.
The Spanish lender's earnings in the Latin American country have
been hit by the drop in the Mexican peso, which fell sharply last
year as talk of a potential trade-war between the U.S. and Mexico
heated up following the election of President Donald Trump.
"The significant depreciation of the Mexican peso in 2016 has
reversed since mid-January 2017, thanks to moderation from the
United States with respect to future trade policy and, to a lesser
degree, the hedging program implemented" by Mexico's central bank,
BBVA said in its earnings report.
Separately, BBVA said it booked EUR177 million in restructuring
in the first quarter, mainly in its Spanish banking unit, where
BBVA closed 130 bank branches in February as it seeks to cut costs
and boost efficiency.
BBVA's capital ratio was 11% in March 2017 compared with 10.9%
in December under international regulations known as "fully loaded"
Basel III criteria. BBVA, as well as Spanish peer Banco Santander
SA (SAN), have among the lowest ratios of major European banks and
investors are closely watching how the banks build capital.
BBVA's capital ratio inched up despite the negative impact from
its sale of a 1.7% stake in Chinese lender Citic Bank. Also, BBVA
increased its stake in one of Turkey's largest lenders, Turkiye
Garanti Bankasi, AS, by 9.95% to 49.85%.
Write to Jeannette Neumann to jeannette.neumann@wsj.com
(END) Dow Jones Newswires
April 27, 2017 03:10 ET (07:10 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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