BBVA Group earned €4.83 billion excluding one-time items in 2019 (+2.7 percent from the previous year), the highest figure since 2009. The results were driven by an increase in recurring revenue and the containment in operating expenses. Including the impact of the goodwill adjustment at its U.S. franchise in 4Q19 and the capital gains from the sale of BBVA Chile in 2018, the net attributable profit declined 35 percent yoy, to €3.51 billion. The bank is to propose for the consideration of the competent governing bodies a gross cash dividend of €0.16 per share to be paid in April 2020, maintaining the same amount as the previous year.
A company’s shareholders — ultimately the company’s owners — expect the company to create value that they can eventually recognize. Can the generation of shareholder value be measured? Which metric is a better indicator: book value or tangible book value?
The net interest income is the difference in euro between financial income and financial costs; that is, the difference between an asset’s profitability (the credit lines and loans that the institution has on its balance sheet, mainly) and the interest that the bank pays for the resources it needs to finance that asset (such as customer deposits and wholesale financing).
To calculate a bank’s relative productivity, the market uses what is called an efficiency ratio. This indicator calculates the income earned for the expenses required to achieve said income over a given period of time. An institution’s efficiency ratio, expressed as a percentage, is the result of the ratio between operating expenses and the gross margin. For example, if the efficiency ratio is 60% it means that to earn 100 euro, an institution needs to spend 60. Therefore, the lower the percentage, the more efficient the institution.