The BBVA share

The BBVA share remained stable in the last quarter, closing June at €7.27, with a gain of 13.3% since December 2016, representing a relatively better performance than the European banking sector and the Ibex 35.

To this regard, global growth has continued to give signs of improvement in the first half of 2017. The most recent figures also suggest some stabilization looking forward. Performance in the developed economies continues to be positive, above all in Europe. In contrast, in Latin America recent trends suggest moderate growth, although with differences between the countries. In China, growth is expected to slow in the coming months. As a result of the above, global growth could be around 3.3% in 2017, according to BBVA Research estimates.

Against this backdrop, the main stock market indices delivered positive results in the first half of the year. This was the result of a strong boost from general rises in the first quarter, and a second quarter in which performance was mixed (slight losses in Europe, stability in Spain and gains in the United States)

BBVA share evolution

Compared with European indices (Base indice 100=30-06-2016)

As regards shareholder remuneration, the last "dividend-option" was paid in April 2017, with 83.28% of the holders of free assignment rights choosing to receive new shares. Looking forward, in line with the significant event published on February 1, 2017, BBVA intends to distribute between 35% and 40% of profits obtained each year fully in cash. This shareholder remuneration policy will be formed each year of an interim dividend (which is expected to be paid in October) and a final dividend (which will be paid out upon completion of the final year and following approval of the application of the result, foreseeably in April). These payouts will be subject to appropriate approval by the corresponding governing bodies.

Shareholder remuneration

(Euros-gross/share)

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Group information

Results

  • General growth of more recurring revenues in practically all geographic areas.
  • Lower contribution from net trading income (NTI).
  • Operating expenses under control and improvement in the efficiency ratio in comparison with the same period the previous year.
  • Impairment losses on financial assets below the figure for the first half of 2016.
  • Provisions (net) and Other gains (losses) higher than in the same period last year due to allocation for restructuring costs.
  • As a result, the net attributable profit in the first half of 2017 is €2,306m, 25.9% up on the first six months of 2016.

Net attributable profit (Million euros)

Net attributable profit breakdown(1) (Percentage 1H2017)

(1) Excludes the Corporate Center.

(2) Includes the areas Banking activity in Spain and Non Core Real Estate.

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Balance sheet and business activity

  • Loans and advances to customers (gross) continue to increase in emerging economies but decline in Spain (albeit less than in previous periods) and the United States.
  • Non-performing loans continue to improve, particularly in Spain, the United States and Turkey.
  • Deposits from customers have again performed well in the more liquid and lower-cost items.
  • In off-balance sheet customer funds, the trend in mutual funds continues to be positive.

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Solvency

  • The capital position is above regulatory requirements, with a fully-loaded CET1 ratio of 11.1% as of 30-Jun-2017 above the established target of 11%. Year-to-date, this ratio has increased by 20 basis points primarily due to organic generation of earnings and a reduction of risk-weighted assets (RWAs).
  • One issue of instruments that are eligible as additional Tier 1 capital for €500m with a coupon of 5.875%, and a number of issues that are eligible as Tier 2.

Capital and leverage ratios (Percentage as of 30-06-17)

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Risk management

  • Positive trend in the metrics related to the credit-risk management in the first six months of the year (stability in the second quarter): as of 30-Jun-2017, the NPL ratio closed at 4.8%, the NPL coverage ratio at 71% and the cumulative cost of risk at 0.92%.

NPL and coverage ratios (Percentage)

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Transformation

  • The Group's digital and mobile customer base (up 20% and 41% year-on-year, respectively, according to latest available data) continues to increase, as do digital sales in all the geographic areas where BBVA operates.

Digital and mobile customers(1) (Millions)



(1) Figures in Spain and the United States have been restated.

Results

  • Good performance of gross income, thanks to a positive trend in more recurring revenue (particularly income from fees and commissions) and NTI.
  • Operating expenses under control.
  • This has led to a further improvement in the efficiency ratio.
  • Impairment losses on financial assets slightly below the figure for the first quarter of 2016.
  • Inclusion of €177m restructuring costs in provisions.
  • As a result, the net attributable profit in the first quarter of 2017 was €1,199m, 69.0% higher than in the same quarter last year and 76.8% higher than posted in the fourth quarter of 2016

Net attributable profit (Million euros)

Net attributable profit breakdown(1) (Percentage 2Q 2017)

(1) Excludes the Corporate Center.

(2) Includes the areas Banking activity in Spain and Non Core Real Estate.

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Business areas

(Click on each country to see information)

SPAIN

Highlights

  • Less deleveraging affecting lending, decline in time deposits and increase in more liquid customer deposits and mutual funds.
  • Good performance of fees and commissions.
  • Positive trend in operating expenses.
  • Restructuring costs booked to improve efficiency.
  • Stability of risk indicators.

THE UNITED STATES

Highlights

  • Lending continues to focus on selective and profitable growth.
  • Decline in customer deposits due to good cost management and increased profitability.
  • Positive performance of more recurring revenues.
  • Moderation of operating expenses and reduction in the impairment of financial assets.
  • Stability of risk indicators.

MEXICO

Highlights

  • Growth of lending.
  • Good performance of customer funds.
  • Costs continue to increase below gross income, and double-digit year-on-year growth in net attributable profit.
  • Stable asset quality indicators.

TURKEY

Highlights

  • Solid growth in lending.
  • Good performance of deposits, both in Turkish lira and foreign currency, strongly focused on current and savings accounts.
  • Very good performance of more recurring revenues, cost discipline and reduction of loan-loss provisions.
  • Improvement of the asset quality indicators, which have performed better than in the rest of the sector.

SOUTH AMERICA

Highlights

  • Growth of activity in the region continues to moderate, in line with the current macro economic situation.
  • Customer funds are increasing at a good pace.
  • Positive trend of more recurring revenues.
  • Expenses conditioned by the high level of inflation in some countries.
  • The macroeconomic environment continues to influence the behavior of the risk indicators.

REST OF EURASIA

Highlights

  • The loan book continues its upward path begun in the fourth quarter of 2016.
  • Reduction in the balance of deposits.
  • Slight decline in earnings, which compare with an excellent performance during the first half of 2016.
  • Improvement in the asset quality indicators.

Contact

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Shareholder Office
C/ Azul, 4 – 28050 Madrid
Contact email
accionistas@bbva.com

Quartely report 2Q 2017

Additional information

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