On Friday, January 31st, BBVA presented its 2019 results. The net attributable profit for the fourth quarter - excluding the impact from the goodwill adjustment in the U.S. - was 10 percent higher than consensus forecasts thanks to a higher net interest income and net trading income (NTI). In terms of the breakdown by geographic areas, Spain, Mexico and Turkey stand out for their strong performance.
BBVA’s results exceeded market expectations in net interest income, especially in Turkey thanks to lower financing costs, and higher net trading income (NTI), particularly in Spain and Turkey.
Analysts’ reports also underscore the positive evolution of the bank’s fully-loaded CET1 ratio, which rose 18 basis points in the quarter to 11.74 percent at the end of December 2019 -- within the Group’s target range (11.5 percent to 12 percent). This ratio was 12 basis points above the market expectation.
By business area, the results in Spain, Mexico, Turkey and the rest of Eurasia beat analysts’ forecasts, while the U.S. was the only division that did not meet expectations. In South America, the results were in line with forecasts.
The net attributable profit in Spain specifically, was 22 percent above analysts’ consensus, primarily due to strong performance of recurring revenue (net interest income and fees) and NTI.
In Mexico, the net attributable profit was nine percent above consensus, and several analysts’ reports also express confidence in the franchise’s performance in 2020.
Meanwhile, the results in Turkey were well above market expectations (by 40 percent) due to higher net interest income and lower write-offs.