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BBVA added to the increasingly upbeat mood among European banks on Thursday, after the Spanish lender unveiled an 80 per cent jump in first quarter net profits and hailed “growth in all areas”.

The Madrid-based group reported net earnings of €1.2bn in the three months to the end of March, up from €709m the year before. Net interest income, the profit a bank makes on its core lending activities, rose 9 per cent to €4.32bn over the same period.

“The solid performance of income, moderation in operating expenses and a drop in impairment losses on financial assets are the main factors that underpinned this growth,” the bank said in a statement.

Much like its domestic rival Santander, which reported strong first quarter results on Wednesday, BBVA saw a notable improvement both in Spain and in key emerging markets. Its operations in Mexico, which account for 40 per cent of group profits, were boosted by the recent rise in the value of the peso, which helped lift net earnings by 19 per cent.

In Spain, which is now in its fourth year of post-crisis recovery, net profits in retail banking rose 54 per cent. Turkey, another key market for BBVA, posted a 45 per cent rise in first quarter earnings.

The bank said its fully-loaded core equity tier 1 ratio, a closely-watched measure of capital strength, rose slightly from 10.9 to 11 per cent over the course of the first quarter. Non-performing loans now account for 4.8 per cent of the loan book, down from 4.9 per cent at the end of last year.

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