BBVA touched the 5 billion euro mark in half a year, reporting profits of 4.994 billion euros, up 28.8 percent from January to June a year earlier. Excluding currency effects, the rise stands at 37.2 percent. A week after Sabadell, the Catalan bank that BBVA had targeted with a hostile takeover offer in May, showcased record results and higher shareholder returns, BBVA, led by chairman Carlos Torres Vila, responded with results driven by a robust momentum in activity through the second quarter, delivering earnings of 2.794 billion euros, up 38 percent.
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Credit grew by 10.7 percent year over year in constant euros, with a notable contribution from corporate lending. The bank also reported a 20 percent annual increase in tangible equity plus dividends per share. Return on equity reached 20 percent, while the cost-to-income ratio stood at 39.3 percent, marking what the group calls its best historical figure. “This quarter has been exceptional. We have achieved financial metrics that would have sounded far-fetched a few years ago: a 20 percent return and a breach of the 40 percent efficiency threshold,” stated the chief executive, Onur Genç, who also asserted that the group would comfortably hit its 2024 targets and expressed confidence in successfully advancing the Sabadell takeover. He argued the deal would create a stronger, more profitable entity with greater capacity to help families and companies fund their futures. The bank expects the Sabadell deal to close roughly six to eight months from the announcement date. The move has triggered strong opposition from some Catalan business and social sectors, which the Catalan parent bank echoed in its responses.
BBVA’s June accounts reflect a 285 million euro payment for the extraordinary banking tax. Even after this charge, Spain posts a 47.8 percent year-over-year gain to 1.790 billion euros. Mexico remains the top contributor to the group’s overall result, delivering 2.858 billion euros, up 3.3 percent and accounting for 51 percent of the total. In contrast, Turkey, another major market for the group, saw profits fall 33 percent to 351 million amid the country’s inflationary pressures. The bank notes a fully loaded CET1 capital ratio of 12.75 percent, comfortably exceeding its target.
Net interest income rose 20.3 percent at constant exchange rates, reaching 12.993 billion, while net fees grew 35 percent to 3.842 billion. Gross margin climbed to 17.446 billion, a 30.5 percent increase, offsetting a 19.5 percent rise in operating expenses to 6.859 billion. The group links the higher costs to a still-elevated inflation environment across markets, increased headcount and higher investment levels, consistent with its recent trajectory. Thanks to the stronger gross margin, the efficiency ratio improved to 39.3 percent as of June 30, 2024, down 362 basis points from the prior year’s level, when measured at constant terms.
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Provisions for impairment rose by 42.8 percent year over year at constant currency, reflecting higher requirements associated with growth in retail products, aligned with the group’s strategy. Customer resources showed a 5.9 percent increase versus year-end levels, driven by growing deposits and an uptick in off-balance sheet items, which expanded by 10.1 percent. The entity emphasizes that this positive trend stems from both a 4.2 percent rise in customer deposits and stronger external funding dynamics, reinforcing the bank’s financial resilience and capacity to support client needs.