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07.31.2019
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In 1H19, BBVA successfully completed the issue of its second green bond, a 1 billion in senior
non-preferred
debt. BBVA was also recognized as best bank for financial inclusion and best bank in sustainable finance in Latin America by Euromoney.
Business Areas
The main highlights of each business area
are detailed below.
In
Spain
,
lending activity grew 0.8 percent compared to June 2018, supported by the most profitable segments
(retail,
medium-sized
enterprises, consumer loans and credit cards). Customer resources also grew 2.2 percent yoy, thanks to demand deposits. Spain posted a 734 million profit in 1H19, down
1.7 percent from 1H18, mainly due to a lower contribution from NTI. In the second quarter, however, it earned 13 percent more than the previous quarter, mostly thanks to the solid behavior in net interest income (+5 percent over the
same period). It is also worth mentioning the positive performance in operating expenses, which fell in the quarter
(-3.5 percent
yoy). Asset quality improved thanks to the decline in NPLs during the
quarter, as a result of the sale of portfolios of non-performing real estate developer loans in the second quarter. Consequently, the NPL ratio declined during the quarter from 4.95 percent to 4.60 percent, the lowest level since September
2009. The coverage ratio remained stable at 58 percent.
In the
United States
,
lending grew 3.7 percent (at constant exchange
rates) yoy thanks to retail and commercial segments. Customer resources increased 1.3 percent in the last 12 months. The net attributable profit stood at 297 million for the Jan.-June period, down 22.9 percent
(-27.8 percent in constant euros) from 1H18. The decline was mainly the result of higher provisions during the period. However, net interest income performed favorably thanks to the focus on portfolio profitability. Risk indicators performed
positively. The coverage ratio increased from 84.9 percent to 91.2 percent starting in March, while the NPL ratio dropped from 1.4 percent to 1.31 percent.
In
Mexico
,
BBVA continues to be the market leader, with a share of more than 22 percent. Activity continued to grow, with a
4.9 percent increase in loans yoy, driven by the performance in the mortgage and consumer lending segments. Customer resources grew 5.8 percent, with positive progress across all headings. The net attributable profit grew 7.2 percent
to 1.29 billion (+0.6 percent in constant euros), thanks to strong performance in net interest income, which stood at 14.9 percent at current exchange rates (+7.8 percent in constant euros). The unit posted, once again,
positive jaws, with recurring revenues growing above operating expenses. The efficiency ratio improved during 1H19 to 33.1 percent. As for risk indicators, the NPL ratio stood at 2.19 percent, while the coverage ratio was
147.7 percent.
In
Turkey
,
lira- denominated loans decreased 3.5 percent compared to June 2018, while loans in foreign currency
declined by 20.5 percent. Deposits in lira increased 4.0 percent, while deposits in foreign currency dropped 2.6 percent. The area posted a net attributable profit of 282 million in 1H19, down 24.2 percent in current
euros
(-2.8 percent
in constant euros). Despite the positive performance in net interest income terms, the net attributable profit was negatively affected by increased impairments on financial assets as a
result of the current macroeconomic environment. However, lower expenses under this heading during the second quarter drove the net attributable profit to increase 6.9 percent in constant euros, compared to 1Q19. As for risk indicators, the NPL
ratio stood at 6.3 percent, while the coverage ratio reached 75 percent.