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Banco Bilbao Vizcaya Argentaria SAAnnouncement

06/09/2014 22:36

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RNS Number : 6993N
Banco Bilbao Vizcaya Argentaria SA
30 July 2014 
 
Results January-June 2014 
 
BBVA's profit from ongoing operations
rises 11.7% 
 
Earnings: Net attributable profit stood at E1.33 billion in the first half
(-53.9% year-over-year due to the absence of corporate operations). Net income
from ongoing operations increased 11.7% 
 
Risks: The BBVA Group's NPA ratio fell to 6.4% and the coverage ratio rose to
62%, mainly thanks to improved risk indicators in Spain. Net entries to NPAs
-excluding the real estate activity- fell 75.5% year-over-year in the second
quarter. In Spain, net entries to NPAs were negative in the second quarter 
 
Solvency: The core capital ratio stood at 11.6% at the end of June, well above
the minimum requirements 
 
BBVA earned E1.33 billion in the first half of 2014, 53.9% less than in the
year-earlier period, due to the absence of corporate operations. Without
including such operations, net income from ongoing operations rose 11.7% to
E1.54 billion. For the second quarter in a row, the Group's NPA ratio fell.
Net entries to NPAs from the banking business in Spain were negative in the
second quarter. 
 
"The strength of recurring revenue, costs control and lower provisioning have
driven operating profit," BBVA President and COO Ángel Cano said. 
 
In the first half of the year, the bank's revenue generation accelerated,
reaching high levels. Without taking FX fluctuations into account, net
interest income rose 10.3% to E7.04 billion in the first six months, compared
to the same period a year earlier. Between January and June, gross income
totaled E10.37 billion, up 6% from the first half of 2013, at constant
exchange rates. 
 
The cost-containment effort was evident in the evolution of the operating
costs, which dropped 5.4% in the second quarter year-over-year, and 5.3% in
the first six months of 2014, at current exchange rates (+3.1% and +3.6%,
respectively, at constant exchange rates). 
 
BBVA managed expenses according to the region and the needs of the franchises.
In developed countries, it kept costs down and in emerging markets it
supported expansion plans, especially in Mexico and South America's Andean
region. The fact that earnings grew 
 
faster than expenses generated operating income of E5.09 billion in the first
half, 8.7% more than at the end of the same period a year earlier, excluding
exchange rate fluctuations. 
 
The income statement benefited from the gradual drop in loan-loss and
real-estate provisions. The quarterly average charge has been reduced by
almost half since 2012, from E2.36 billion to E1.22 billion in Q2-14. 
 
For the second quarter in a row, the BBVA Group's NPA ratio fell, reaching
6.4% at the end of June, with a coverage of 62%. Excluding the real-estate
activity, the BBVA Group's NPA ratio stood at 4.5%, with a coverage of 63%. In
the second quarter, net entries to NPAs fell 75.5% year-over-year. 
 
As for capital adequacy, BBVA's core capital stood at 11.6% as of June 30th (a
10% ratio according to Basel III fully-loaded criteria), which is well above
the minimum requirements. 
 
In terms of business, gross lending to customers (E354.2 billion, -2.9%
year-over-year) rose in South America, Mexico, Turkey and the U.S. In Spain,
the pace of revenue growth continued to improve, although not enough to offset
the overall drop. Customer deposits (E320.8 billion, +2.8% year-over-year)
registered a positive trend, especially in current and savings accounts. 
 
Below there is a breakdown by region, for developed markets (Spain and the
U.S.) and emerging markets (Eurasia, Mexico and South America). 
 
Revenue from the banking activity in Spain picked up thanks to customer
activity. Net revenue grew in mortgage loans, financing for small businesses
and, particularly, in consumer finance. Furthermore, in the first half, BBVA
provided more than E43 billion in financing to businesses and SMEs and added
27,000 new companies as clients. Net interest income plus fee income -the
indicator that best shows the banking revenue- posted a good performance
totaling E1.32 billion in Q2 (+3.1% compared to Q1 and -1.7% vs. Q2-13). Net
entries to NPAs were negative. The NPA ratio fell to 6.3% from 6.4% at the end
of March, with coverage of 44% (41% at the end of March). This area's net
attributable profit totaled E608 million (-19.7% year-over-year). Net income
from ongoing operations, excluding the effect of the re-insurance operation of
the individual life-risk portfolio in 2013, rose 81.8%. 
 
As for the real-estate activity in Spain, net exposure to this sector (E13.8
billion) accumulated a drop of 11.5% since the end of 2012. BBVA sold 11,402
units between January and June, 15.6% more than a year ago. Non-performing
assets continued to drop
(-4.2% compared to the end of March). Losses incurred by this area narrowed
24.5% year-over-year, with an attributable result of E-216 million in the
second quarter (E-446 million in the first half of 2014). 
 
In the following paragraphs the percentage variations refer to constant
exchange rates, to better explain the trend of businesses in regions that do
not use the euro. 
 
Lending in the United States jumped 13.1% and customer funds climbed 8.1%. Net
interest income plus fee income grew at 5.3% year-over-year in the quarter,
totaling E483 million. In the first half this area posted net attributable
income of E196 million, up 0.6%. It is worth mentioning that BBVA Compass had
the best reputation with customers, according to American Banker magazine's
annual survey in the U.S. 
 
In Eurasia, Turkey showed an improved outlook in terms of lending, revenue,
provisions, risk indicators and forex rates. In the first half of 2014, the
region posted a profit of E362 million, 15.2% more than during the same period
of 2013. 
 
Mexico posted growth in lending (+10.2%) and customer funds (+12.1%). Revenue
growth outpaced costs, as it registered a double-digit increase year-over-year
between April and June. Net interest income plus fee income grew 11.8%, gross
income 10.5%, and operating income 12.2%. The NPA ratio remained unchanged at
3.4%, with coverage of 113%. Net attributable income totaled E900 million in
the first half, 12.5% more than the same period a year earlier. 
 
Once again, South America's activity and results continued to grow at a good
clip. Lending increased 24.6% and customer funds rose 23.9%. In the second
quarter, net interest income plus fee income rose 36.8%, gross income 24.3%
and operating income 22.3%, all year-over-year. The NPA ratio fell to 2.1%,
with a coverage ratio of 138%. This region posted a profit of E483 million in
the first half, up 17.7%. 
 
Contact: 
 
Comunicación Corporativa 
 
Tel. +34 91 374 40 10 
 
comunicacion.corporativa@bbva.com 
 
For more financial information on BBVA, go to: 
 
http://accionistaseinversores.bbva.com 
 
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·                                BBVA´s results for 1H14 press release 
 
http://www.rns-pdf.londonstockexchange.com/rns/6993N_-2014-7-30.pdf 
 
About BBVA 
 
BBVA is a customer-centric global financial services group founded in 1857.
The Group has a solid position in Spain, it is the largest financial
institution in Mexico and it has leading franchises in South America and the
Sunbelt Region of the United States. Its diversified business is focused on
high-growth markets and it relies on technology as a key sustainable
competitive advantage. Corporate responsibility is at the core of its business
model. BBVA fosters financial education and inclusion, and supports scientific
research and culture. It operates with the highest integrity, a long-term
vision and applies the best practices. The Group is present in the main
sustainability indexes. 
 
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The company news service from the London Stock Exchange