BBVA closed the first half of 2023 with an attributable net profit of 3,878 million euros, which represents an increase of 31% compared to the profits of the same period of the previous year, as reported by the bank this Friday when publishing its income statement. biannual.
On the other hand, BBVA has decided to reward its shareholders with a new share buyback program that will amount to a maximum of 1,000 million euros, for which the relevant authorization has already been requested from the European Central Bank (ECB).
The bank has emphasized that this share repurchase program is of an extraordinary nature, which is why it is not included in the ordinary remuneration and the ‘payout’ that it has as its objective.
“The good results and the execution of our strategy allow us to have a positive impact on all our stakeholders: customers, shareholders, employees and society as a whole; and to face the future with great optimism”, has indicated the CEO of the banking group, Onur Genç.
The income of the financial institution (gross margin) experienced growth of 23.9%, reaching a total of 14,148 million euros. Of this figure, net commission income (interest margin) increased by 33.6%, to 11,410 million euros, due to improvements in the customer differential and greater activity, highlighting Mexico, South America and Spain. At the same time, net commission billing stood at 2,909 million, 9.4% more.
On the expense side, personnel costs were 3,081 million euros, 19.3% more, while the rest of administrative expenses increased by 21.9%, up to 2,181 million euros. The impact of amortizations was 676 million, 3.6% more.
Likewise, the financial entity registered an impairment of financial assets not valued at fair value of 1,993 million, an increase of 38.3%, while the provisions to cover credit losses increased by 15.2%, up to 129 million euros.
With regard to the second quarter of 2023 alone, BBVA obtained net attributable profit of 2,032 million euros, 24.5% more than in the same period last year. On his side, revenues rose by 19.4%, up to 7,189 million euros.
GEOGRAPHICAL EVOLUTION
By geography, Mexico remained the most important country for the group. Of the almost 3,900 million euros of net profit, 2,614 million (46.8%) came from the Aztec country. Likewise, income rose 40.7%, to 6,774 million euros, while operating expenses were somewhat more contained, advancing 32.4%, to 2,057 million.
For its part, Spain was in second position, with BBVA in the country obtaining attributable net profits of 1,231 million euros, 53.6% more than in the first half of 2023. The bank’s total income between January and June was of 3,630 million euros, 19% more, with an even greater containment of spending, since they only rose 6.4%, to 1,517 million euros.
In Turkey, BBVA obtained profits of 525 million euros, which means multiplying by almost nine the profit of 59 million euros that it recorded between January and June 2022. Revenues in the country increased by 10.8%, up to 1,480 million euros, thanks to extraordinary accounting derived from Turkish inflation. Expenses in the country advanced by 18.9%, up to 591 million euros.
In the rest of the South American countries where BBVA is active, which are accounted for jointly, the bank’s profit was 367 million euros, therefore it fell by 12.2% compared to the first half of 2022, for a increased payment of taxes and extraordinary financial. Revenues in the period were 2,415 million, 21.9% more, while expenses rose 17.3%, up to 1,083 million euros.
BALANCE
BBVA closed the first half of the year with total assets on its balance sheet of 762,456 million euros, 7.1% more than at the end of 2022, despite the fact that its cash position in central banks fell by 10%, up to 71,858 million euros, due to the withdrawal of liquidity from said entities, especially from the ECB.
Of the total assets, loans and advances to customers were 369,761 million euros, 3.5% more. This small evolution is explained because despite the fact that the credit position with individuals expanded by 5.6% so far this year, the loan portfolio to companies increased by 0.3%.
The bank closed June with a total of doubtful risks (loans and guarantees) of 14,691 million euros, 5.2% less than a year ago, but 1.6% more than at the end of the previous quarter. Thus, the default rate was 3.4%, which represents a slight increase of one tenth compared to the previous quarter but a decrease of three tenths compared to a year earlier.
For its part, BBVA’s total liabilities were 709,888 million euros, 7.3% more than at the end of the year. Of that figure, 402,344 million euros came from customer deposits.
In a context of monetary tightening that is taking place in almost all the geographies in which BBVA operates, customer demand deposits fell by 2.3%, to 308,688 million euros, while time deposits rose by 18%, up to 89,277 million euros.
Regarding off-balance sheet customer funds, these rose by 3.7%, up to 155,739 million euros. The position of investment funds and managed portfolios rose 14.6%, to 124,793 million euros, while the balance of pension funds contracted 30%, to 27,051 million euros.
SOLVENCY OF THE BANK
BBVA’s return on capital (RoTE, profitability) was 16.9% in the first half of the year, which represents an improvement of 2.4 percentage points compared to the profitability obtained in the same period of the previous year.
BBVA has highlighted that this return is the highest in the last 10 years. This keeps BBVA “as one of the most profitable banks in Europe,” the financial institution has defended.
On its side, the CET1 ‘fully loaded’ capital ratio, the highest quality, was 12.99% at the end of the semester. This represents an improvement of 38 basis points compared to December and 54 points compared to a year earlier.
Thus, the bank’s total capital ratio reached 16.79% as of June 30, 2023, 81 basis points more than at the end of December and 58 points more than in June 2022.
