Close panel

Close panel

Close panel

Close panel

Analysts praise BBVA’s solid results

Market analysts have given positive reviews to BBVA’s third quarter 2017 results, which in many cases surpassed prior forecasts. In their reports, the analysts underscored the performance of expenditures and provisions below forecasts. BBVA´s businesses in Spain, Turkey and South America all surprised analysts with their good performance. 

Analysts

The majority of the analysts emphasized the solidity of the numbers published, which allowed net profit to surpass the consensus estimate by 10%. In fact, there were comments such as "BBVA’s 3Q17results were strong and we would expect these to be taken positively by the markets”. The principal drivers of this increase were the good trend in commissions, the effects of the efforts made in the area of expenditures, and lower-than-expected provisions.

The elements of the results most emphasized by the analysts were:

In the Group as a whole:

  • The good performance of revenue, particularly commissions.
  • Analysts were particularly satisfied with the performance of expenditures, where synergies and progress in the transformation of the Group are both beginning to materialize.
  • They also underscored the good level of credit impairments and provisions, both of which were below estimates.
  • The improvement in asset quality made the ratio of non-performing loans the lowest in the last five years, a fact also pointed out by the analysts.

And by business lines:

  • Spain was one of areas most highly rated by the analysts. In particular, they stressed the good performance of the expenditures line, where the efforts undertaken have begun to show fruit; and the reduction of impairments.
  • The figures presented by the U.S. division were generally in line with expectations. Analysts pointed out that, although the provision line incorporates the impact of hurricanes, the contribution of this unit to the Group increased.
  • As for Mexico, the analysts stressed that for yet another quarter, the positive trends have been maintained in the entire account. They emphasized that the management team continues to give guidance in the double-digit area, despite the weakness in the Mexican peso and even though there are elements that could cause uncertainly, such as the resolution of the NAFTA agreement or the presidential elections next year.
  • Also of note was the good performance of the Turkey division, where the growth of net profit has been accelerated by three factors: double-digit revenue growth (analysts singled out, above all, the trend in commissions) the slowdown in expenditures and in impairments, which were lower than expected.
  • The resistance of the South American area, greater that expected, was one of the elements better valued by analysts. In particular, they highlighted the strict cost control, the growth of recurrent revenues (especially commissions) and the lower than expected impairments.