Monday, August 8

BBVA starts the share buyback after earning 3,311 million

BBVA obtained an attributable profit of 3,311 million euros until September, compared to the losses of 15 million reported the previous year. The bank announced that it is launching its share buy-back program for 3.5 billion euros.

The presiding entity Carlos Torres It already said in June that it would begin the repurchase of shares at the end of the year, taking advantage of the improvement in business and the boost in capital ratios.

After receiving authorization from the ECB on October 26, BBVA assured that it is starting one of the largest share buybacks in Europe, for 10 percent of the capital and an amount of 3,500 million euros. The operation will start from November 18.

BBVA exceeds market forecasts

In the third quarter, BBVA obtained a net profit of 1,400 million euros and exceeded the 1,030 million expected by the consensus of analysts. The entity said that this benefit is “one of the highest in its history.”

However, a large part of this result was obtained by the entity after recording provisions for 622 million euros, a figure much lower than the 1.030 million expected by the market.

In a quarter marked by the collapse of the Turkish lira to its all-time lows, BBVA took refuge in the strength of net interest income and fees, as well as lower write-offs, to explain the results.

But concern about Turkey drove BBVA’s listing from its highs for the year that it had achieved at the beginning of October.

Net interest income increases in all regions

Regarding the banking business, the main variable that measures its strength is the interest margin, which increased in all the regions in which BBVA operates. The group’s margin reached 10,708 million euros, 2.5 percent more.

On Spain, the margin increased 1.1 percent, driven by equity portfolios, while in Mexico grew 4.4 percent driven by the boost from retail activity and higher loan profitability.

But it was in Turkey where the margin grew the most, 4.9 percent. The bank explained it by the recovery of credit spreads and the contribution of inflation-linked bonds.

Altogether, the sum of the interest margin and the net commissions, (the typical income of the banking business) reached 14,226 million euros, with an increase of 6.1 percent year-on-year.