BBVA CEO Carlos Torres Vila analyzes 2Q18 Results

First-quarter earnings confirm the positive trends seen in the previous quarters.

Two years ago, in December 2015, only one in every 10 sales was digital.

“Quarter after quarter, BBVA keeps posting solid, recurring and sustainable results,” said CEO Carlos Torres Vila.

BBVA is a customer-centric global financial services group founded in 1857. Its purpose is to bring the age of opportunity to everyone. This motto reflects the bank’s role as enabler, offering its customers the best banking solutions, helping them make the best financial decisions and making a true difference in their lives. We live in the era of opportunities, where technology offers universal access to education and offers many more people than ever before the possibility of embarking on projects and chasing their dreams. BBVA helps people make their dreams come true.

BBVA Compass Bancshares, Inc., (BBVA Compass), reported today net income of $52 million for the fourth quarter of 2017, a 42 percent decrease from the $89 million earned during the fourth quarter of 2016. Included in fourth quarter 2017 results is income tax expense of approximately $121 million related to the revaluation of net deferred tax assets at the lower statutory tax rate mandated by the Tax Cuts and Jobs Act (non-cash charge). Excluding the impact of this item, adjusted net income(1) for the quarter was $173 million, a 33 percent increase from third quarter 2017 and a 94 percent increase from the fourth quarter 2016.

Net income for full-year 2017 totaled $461 million, an increase of 24 percent from the $372 million earned during the full-year of 2016. Excluding the impact of the non-cash charge, adjusted net income for the full-year 2017 was $582 million, up 57 percent.

• Transformation: More than half of BBVA customers in Turkey, Spain, USA, Argentina, Chile and Venezuela are already digital. As a whole, the digital customer base grew 25 percent in the year (to 22.6 million), while mobile customers grew 44 percent (to 17.7 million)
• Record revenues: Income reached record highs in 2017. Recurring revenue grew 4.1 percent y-o-y, (+10.3percent excluding currency impact), and expenses dropped 2.3 percent in the year (+2.2 percent at constant exchange rates), boosting operating income to €12.77 billion
• Risks: The NPL ratio continued to improve, reaching 4.4 percent (vs. 4.9 percent in December 2016), its lowest level since June 2012. Coverage at year-end stood at 65 percent
• Capital: The fully-loaded CET1 ratio stood at 11.1 percent at the end of December, above BBVA’s target
• Dividend: A cash payment in the gross amount of €0.15 per share, to be paid in April as final dividend for 2017, is expected to be proposed for the consideration of the competent governing bodies

The week of the publication of fourth quarter 2017 results (4Q17) begins and as it does, we remember the five keys to understanding a bank´s results. The following infographic shows how to interpret the most important figures.

Digitization is primarily an English term. According to a report, the U.S. and U.K. are the countries whose economies are the most prepared for a fourth industrial revolution.

Türkiye Garanti Bankası A.Ş., announced its financial statements dated September 30, 2017. With an asset size of TL 339 billion 679 million 127 thousand, Garanti’s contribution to the economy through cash and non-cash lending reached TL 274 billion 87 million 604 thousand, based on the consolidated financials. The Bank posted a net income of TL 4 billion 685 million 989 thousand in the first 9 months of 2017. The Bank delivered an ROAE (Return on Average Equity) of 17.4% and an ROAA (Return on Average Assets) of 2.0%.

The BBVA Group posted a net attributable profit of €3.45 billion during the first nine months of 2017, nearly equal to its profit for the whole of 2016 and an increase of 23.3% from the same period a year earlier (+28.7% at constant exchange rates). A solid performance in terms of recurring income, cost containment and a drop in impairment losses on financial assets were the main factors driving this growth.

This week, several financial institutions will be releasing their earnings reports for the third quarter of the year (3Q 2017). Any bank’s profit and loss account can be interpreted following the five keys we describe in the infographic below.

After barreling into the state of Texas, as one of the largest and most damaging Hurricanes in U.S history, Hurricane Harvey continues to devastate the Corpus Christi-Houston-Galveston area with catastrophic destruction, human losses, and unprecedented flooding.

As the region begins to pick up the pieces in the weeks, months and years to come, there is a growing concern about the impact that Hurricane Harvey will have on the regional and national economy.

Between January and June 2017, BBVA Group posted a net attributable profit of €2.31 billion, up 25.9% from the same period a year earlier (+30.8% in constant terms). The solid performance of recurring revenues, moderation in operating expenses and a drop in impairment losses on financial assets are the main factors that supported this growth.

• Income: Net interest income reached a seven-quarter high in Q2. In the year to June, this item, plus fees and commissions, grew 5.1% y-o-y. This, combined with cost-containment efforts, helped keep the efficiency ratio at levels below 50%
• Risks: The Group’s NPL ratio stood at 4.8% at the end of the quarter, compared to 4.9% in December; coverage stood at 71%
• Capital: BBVA remained in line with its fully-loaded CET1 target (11%). It added 20 basis points in the first two quarters and increased the ratio to 11.10%. This ratio includes the negative impact related to the March purchase of an additional 9.95% stake in Turkey’s Garanti
• Transformation: As of the end of June, BBVA’s digital customer base came to 19.9 million (+22% y-o-y). Of these, 14.5 million were mobile customers (+42% y-o-y). BBVA’s mobile banking app in Spain is the best in the world, according to Forrester Research

BBVA Compass Bancshares, Inc., a Sunbelt-based bank holding company (BBVA Compass), reported today net income of $121 million for the first quarter of 2017 compared to $89 million earned during the fourth quarter of 2016 and $39 million earned during the first quarter of 2016. Earnings in the quarter represented a 35 percent increase from the prior quarter and a 208 percent increase from year ago levels. Return on average assets and return on average tangible equity (1) for the first quarter of 2017 were 0.56 percent and 6.28 percent, respectively.

Türkiye Garanti Bankası A.Ş., announced its financial statements dated March 31, 2017. Based on the consolidated financials, in the first three months of 2017, the Bank posted a consolidated net income of TL 1.54 billion. While Garanti’s asset size reached TL 328.69 billion, its contribution to the Turkish economy through cash and non-cash lending exceeded TL 269.26 billion. The Bank’s ROAE (Return on Average Equity) improved to 18.9% and ROAA (Return on Average Assets) to 2.1%.

BBVA Group obtained a net attributable profit of €1.2 billion between January and March 2017, up 69% compared to the same period a year earlier (+79.2% in constant terms) and the highest of the past seven quarters. Net attributable profit grew across all business areas in y-o-y terms. The solid performance of income, moderation in operating expenses and a drop in impairment losses on financial assets are the main factors that underpinned this growth.

BBVA Compass Bancshares, Inc., a Sunbelt-based bank holding company (BBVA Compass), reported today net income of $89 million for the fourth quarter of 2016 compared to $92 million earned during the fourth quarter of 2015. Included in fourth quarter 2016 and 2015 results were goodwill impairment charges of $60 million and $17 million, respectively. Net income adjusted to exclude goodwill impairment was $149 million for the fourth quarter of 2016 and $109 million for the fourth quarter of 2015. Return on average assets and return on average tangible equity(2) for the fourth quarter of 2016 were 0.40 percent and 4.51 percent, respectively.

These are the ratios that show up the financial position of a bank. This is a disclosure of BBVA’s ratios calculated at the end 2016.

The BBVA Group earned €3.48 billion in 2016, up 31.5% from the previous year and its highest figure since 2010. Solid performance of recurring revenues, moderation in operating expenses, and a drop in impairment losses on financial assets are the key drivers of this growth.

– Income: Net interest income increased 3.9% in 2016 (+14.9% stripping out the impact of currencies). The fourth quarter was the year’s highest (€4.39 billion). Cost-containment efforts improved the efficiency ratio (51.9% in 2016)

– Risks: BBVA Group’s NPL ratio improved to 4.9% in December (from 5.4% at the end of 2015), with coverage ratio of 70%

– Capital: BBVA reached a fully-loaded CET1 ratio of 10.90%, after generating 58 basis points in the year. The Group maintains its 11% target for 2017

– Transformation: At the end of December 2016, BBVA’s digital customer base stood at 18.4 million (+20% y-o-y). Mobile customers grew 38% to 12.4 million

– Dividend: BBVA plans to implement the shareholder remuneration policy announced in 2013, which aims to distribute between 35% and 40% of profits to dividend payouts, with a 100% cash dividend

BBVA Compass Bancshares, Inc., a Sunbelt-based bank holding company (BBVA Compass), reported today net income of $120 million for the third quarter of 2016 compared to $130 million earned during the third quarter of 2015. Return on average assets and return on average tangible equity(1) for the third quarter of 2016 were 0.53 percent and 6.21 percent, respectively.

The BBVA Group earned €2.8 billion between January and September 2016, up 64.3% from the same period a year earlier. Stripping out the impact of corporate operations and currency fluctuations, growth reached 15.0%. Net attributable profit rose to €965 million in the third quarter.

-Income: Positive trends in recurring revenues (NII plus fees and commissions) continued between January and September, boosting gross income to €18.43 billion (+5.1% y-o-y)

-Risks: The Group’s NPL ratio remained stable and stood at 5.1% at the end of September, the same level as in December 2012, while the coverage ratio was 72%

-Capital: BBVA achieved its 2017 capital goal ahead of schedule. The fully-loaded CET1 ratio stood at 11%, with a capital generation of 29 basis points in the quarter

-Transformation: BBVA’s digital customer base stood at 17.2 million (+20% in the past year). Of these, 11 million are mobile customers (+41%)

The BBVA Group earned €2.8 billion between January and September 2016, up 64.3% from the same period a year earlier. Stripping out the impact of corporate operations and currency fluctuations, growth reached 15.0%. Net attributable profit rose to €965 million in the third quarter.

Türkiye Garanti Bankası A.Ş. released its financial statements as of September 30, 2016. Based on the consolidated financial statements from the first nine months period of the year, the bank posted a consolidated net income of TL 3.94 billion. With a total of TL 295.13 billion in assets, Garanti contributed TL 239.26 billion to the economy through cash and non-cash lending. The bank’s Return on Average Equity (ROAE) was 16.1% for this period, while its Return on Average Assets (ROAA) was 1.8%.

Javier Malagón, CFO of BBVA Bancomer, the most profitable bank in Mexico and the leader of the country’s financial sector, presented the bank’s strategy and main financial data at the Barclays Global Financial Services Conference today.

Between April and June the BBVA Group posted the highest quarterly profit of the last 12 months, with €1.12 billion, up 58.4% from the previous quarter. Net attributable profit for the first half of the year stood at €1.83 billion, down 33.6% from the same period in 2015, due to the impact of exchange rates and the lack of corporate operations. Stripping out these two factors, profit grew 5.8% y-o-y

Here are today’s top stories:

– Quorum was over 62%

– Financial statements approved with support from more than 99% of the votes

Francisco González was re-elected Group Executive Chairman of BBVA, with over 96% of the votes during the Annual General Meeting held today in Bilbao. In 2013 he was re-elected with 90.9% of votes.

Group Executive Chairman, Francisco González, and CEO, Carlos Torres, will discuss the company’s 2015 results, during a press conference.*

*IMPORTANT: Exclusive event for accredited journalists

BBVA Research maintains its growth forecast for Spain at 3.2% in 2015 and 2.7% in 2016, according to the latest report Spain Economic Outlook presented this Tuesday by Jorge Sicilia, the chief economist of the BBVA Group, and Rafael Doménech, BBVA Research’s chief economist for Developed Economies.

BBVA earned €2.82 billion in the first nine months of 2015, up 45.9% in y-o-y terms, without considering the one-off impacts from corporate deals closed so far this year (partial sale of CNCB and sale of CIFH and acquisitions of Catalunya Banc and of a 14.89% stake in Garanti). After factoring in these impacts, net profit totaled €1.7 billion, down 11.8% from a year earlier.