Link Securities | The bank yesterday presented its results for the first half of the year (1H2024), of which we highlight the following aspects:
- BBVA’s net interest income at 30-Jun-2024 was higher than in the same period of the previous year (+13.9% year-on-year; +20.3% year-on-year) to €12,993 million (+0.1% at constant rates; +0.1% FactSet consensus), with growth in all business areas except Turkey, as a result of the dynamism of lending in the first half of the year. Of note was the good performance in South America and Spain.
- Net fee income was €3,842 million (+32.1% year-on-year; +35.4% at constant rates), due to the good performance of means of payment and, to a lesser extent, asset management. Of note was the contribution from Turkey and, to a lesser extent, Mexico.
- Gains on financial transactions increased 144.2% year-on-year (+183.0% at constant currency), mainly due to the favourable results from hedging of currency positions, particularly the Mexican peso, recorded in the Corporate Centre and, to a lesser extent, to the positive performance of this line in all business areas.
- BBVA’s gross income was 23.3% higher year-on-year at €17,446 million (+30.5% at constant rates; +3.7%; analysts’ consensus). Thanks to the strong growth in gross income, the efficiency ratio was 39.3% at June 30, 2024, 362 b.p. better than 12 months earlier.
- BBVA’s operating profit (EBIT) reached €10,586 million in 1H2024, an improvement of 29.0% year-on-year (+38.8% at constant rates; +5.9% analysts’ consensus). In terms of gross income, net operating income reached 60.7% (vs. 58.0% H12023; 59.4% consensus).
- As a result, BBVA generated attributable profit of €4,994 million between January and June 2024, which compares very positively with the same period of the previous year (+28.8% year-on-year; +37.2% at constant rates; +7.7%; FactSet analysts’ consensus). These solid results were due to the favourable evolution of recurring revenues from banking business, which offset higher operating expenses and the increase in provisions for impairment losses on financial assets.
- On the balance sheet, loans and advances to customers were 4.3% higher than at the end of December 2023, particularly thanks to the performance of loans to companies (+5.1% at Group level), and the positive performance of all segments of loans to individuals, particularly consumer loans and credit cards, which together grew 4.9%. Customer funds grew 5.9% year-on-year.
- In terms of solvency, BBVA’s CET1 fully loaded ratio stood at 12.75% at June 30, 2024, leaving a large management cushion over the Group’s CET1 requirement at that date (9.11%) and above the Group’s target management range of 11.5% – 12.0% of CET1.
