Close panel

Close panel

Close panel

Close panel

Results> Annual accounts Updated: 28 May 2018

What are analysts saying about BBVA’s 2016 results?

Industry analysts reacted positively to the annual results announced by BBVA, which beat consensus estimates. Lower-than-expected loan-loss provisions, solid net interest income at Group level and Mexico’s overall good performance, the banking activity in Spain and the U.S. were the year’s highlights for analyst firms.

BBVA’s results in 2016 results were better than expected in the main lines of business. On a geography basis, the results posted in Mexico, U.S. and the banking activity in Spain were seen as a pleasant surprise by analysts. Also, BBVA’s earlier-than-expected announcement of its plan to implement a 100% cash dividend shareholder compensation policy was met with positive comments, as it entails lower shareholder dilution. In this sense, an analyst firm indicated that “looking beyond the figures, BBVA reiterated its intent to pay a 100% cash dividend in 2017, and that’s a noteworthy positive announcement.” Some analysts consider this decision a clear indicator of the company’s capital strength that, looking forward, could also prove a positive catalyst for the company’s stock behavior.

According to analysts, the most noteworthy aspects of the results were:

Regarding the Group as a whole:

  • Solid revenue performance, especially in terms of net interest income. Most analysts highlight growth in volumes and higher net incomes as the key drivers of solid NII trends.
  • Drop in loan-loss provisions (which closed well below expectations) and improvement in credit quality levels (especially in the banking activity in Spain), were also seen in a positive light by analysts.
  • Most analysts are confident that BBVA will reach its fully-loaded CET1 capital ratio goal of 11% in 2017. The December ratio (10.90%) was a slightly below the expected level.

On a business area basis:

  • Once again, Mexico drew the highest number of positive comments from analysts, thanks to its double-digit profit growth (in constant terms), dynamic activity – which bolstered growth in net interest income and fees and commissions headings – and stability in risk metrics.
  • Regarding the U.S., analysts reported positively on its strong net interest income growth, customer spreads and the interest rate hike announced in December.
  • In Spain, reports focused on the region’s solid banking activity results, despite the inclusion of the floor clause provision, and highlighted The two most noteworthy elements have been interest income resilience and credit quality improvement, which resulted in a significant drop in cost of risk.
  • Turkey’s solid results (+40.5% y-o-y in constant terms) were in line with analyst estimates. Positive net interest income trends were not enough to compensate the relatively worse behavior in fees & commissions and net trading income. In any case, on the positive side, loan-loss provisions were below than expected.
  • South America posted lower-than-expected results, hindered by the slump in activity resulting from the macroeconomic environment.