Market analysts have offered a very positive view about BBVA 2015 results released yesterday.Overall, analysts believe it is a good set of results which confirm BBVA’s resilience. BBVA’s performance was significantly better than expected, in particular Mexico figures.
In short, analyst agreed that earnings have been better than expected and have surprised more positively than those of BBVA’s Spanish competitors. At a consolidated level, analysts still expect strong earnings growth in 2016, largely driven by the full year contribution of acquisitions, improving credit quality in Spain and resilient growth in Mexico in local currency.
Key points highlighted by analysts:
At Group level:
- Consolidated net income in 4Q (€940 million) beat consensus by 15%; underlying profit before tax was 6% ahead of consensus.
- Provisions were lower than expected.
- Solid trend of asset quality improvement.
- Better capital at 10.3% CET1 fully-loaded (+50 basis points in the quarter) above expectations. Underlying (ex-sovereign bond gains) CET1 fully loaded ratio of 10.02%, in line with expectations.
- Tangible book value per share increased by 1% QoQ.
At key areas:
- Mexico, Spain Real Estate and the Corporate Center beat consensus net profit estimates (by +10%, +38% and +49%, respectively)
- In Spain: QoQ growth in gross lending (+1.4% ex-repos) surprised positively.
- In Mexico: positive surprise from the overall resilience of earnings and, particularly from the cost of risk decline in Q4 that was better than expected.
- Analysts draw comfort from the fact that South America’s asset quality trends look under control.
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