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Spain's BBVA Q4 net profit up 36%

Source: Reuters - Wed 3rd Feb 2016
Spain's BBVA Q4 net profit up 36%

Spain's second-biggest bank BBVA on Wednesday posted a 36.4% rise in net profit in the fourth quarter, helped by lower provisions against bad loans and a slowly recovering business which also lifted the lender's capital levels.

Spanish banks, struggling with tepid growth amid historically low interest rates and increasingly fierce competition as Spain emerges from recession, have yet to fully emerge from their worst crisis in decades.

Like most Spanish peers, BBVA managed to increase its net interest income, a measure of earnings on loans minus deposit costs, year-on-year in the fourth quarter to reach EU4.415 billion.

That was slightly below analysts' expectations and down from the three months to end-September.

Net profit was much better as the bank booked trading gains in the period and took lower charges compared with both last year and the third quarter, when it was hit by a EU1.8 billion writedown in Turkey.

As a result, while net interest income was up 8.7% at EU16.426 billion in the full year, net profit increased only by a modest 0.9% to EU2.642 billion.

BBVA's core tier 1 capital level under the strictest Basel III "fully loaded" criteria rose to 10.3 percent at end-December, compared with 9.8% 3 months earlier and beating the bank's year-end target of above 10%.

The lender also brought down its bad loans ratio to 5.4% at the end of the year from 5.8% at the end of Q3.

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