Group
Quarterly evolution of results
The results obtained by the BBVA Group in the third quarter of 2024 stood at 2,627 million euros, or 6.7% above the previous quarter excluding the impact of currency fluctuations (if this impact is included, the variation is -6.0%). This growth is based on the strength of the gross income, which increased 5.4% during the third quarter, supported by the growth of fees and commissions in practically all business areas and a lower negative impact of hyperinflation. This comfortably offset the increase in operating expenses and provisions.
| CONSOLIDATED INCOME STATEMENT: QUARTERLY EVOLUTION (MILLIONS OF EUROS) | ||||||||
|---|---|---|---|---|---|---|---|---|
| 3Q | 2Q | 1Q | 4Q | 3Q | 2Q | 1Q | ||
| Net interest income | 5,868 | 6,481 | 6,512 | 5,246 | 6,434 | 5,768 | 5,642 | |
| Net fees and commissions | 1,912 | 1,955 | 1,887 | 1,694 | 1,685 | 1,470 | 1,439 | |
| Net trading income | 1,044 | 1,114 | 772 | 753 | 658 | 334 | 438 | |
| Other operating income and expenses | (107) | (324) | (952) | (255) | (820) | (383) | (561) | |
| Gross income | 8,716 | 9,227 | 8,218 | 7,438 | 7,956 | 7,189 | 6,958 | |
| Operating expenses | (3,330) | (3,477) | (3,383) | (3,068) | (3,303) | (2,922) | (3,016) | |
| Personnel expenses | (1,810) | (1,855) | (1,778) | (1,693) | (1,756) | (1,530) | (1,551) | |
| Other administrative expenses | (1,154) | (1,238) | (1,229) | (1,025) | (1,169) | (1,054) | (1,127) | |
| Depreciation | (366) | (384) | (375) | (349) | (378) | (337) | (339) | |
| Operating income | 5,386 | 5,751 | 4,835 | 4,370 | 4,654 | 4,267 | 3,942 | |
| Impairment on financial assets not measured at fair value through profit or loss | (1,440) | (1,479) | (1,361) | (1,225) | (1,210) | (1,025) | (968) | |
| Provisions or reversal of provisions | (61) | 19 | (57) | (163) | (81) | (115) | (14) | |
| Other gains (losses) | (19) | 31 | 40 | (49) | 2 | 50 | (16) | |
| Profit (loss) before tax | 3,867 | 4,322 | 3,458 | 2,932 | 3,365 | 3,178 | 2,944 | |
| Income tax | (1,135) | (1,374) | (1,151) | (799) | (1,226) | (1,028) | (950) | |
| Profit (loss) for the period | 2,732 | 2,949 | 2,307 | 2,133 | 2,139 | 2,150 | 1,994 | |
| Non-controlling interests | (105) | (154) | (107) | (75) | (56) | (118) | (148) | |
| Net attributable profit (loss) | 2,627 | 2,794 | 2,200 | 2,058 | 2,083 | 2,032 | 1,846 | |
| Adjusted earning (loss) per share (euros) (1) | 0.44 | 0.47 | 0.37 | 0.34 | 0.34 | 0.34 | 0.30 | |
| Earning (loss) per share (euros) (1) | 0.44 | 0.47 | 0.36 | 0.33 | 0.33 | 0.33 | 0.29 | |
(1) Adjusted by additional Tier 1 instrument remuneration. For more information, see Alternative Performance Measures at the end of this report.
Year-on-year evolution of results
The BBVA Group generated a net attributable profit of €7,622m between January and September of 2024, again driven by the performance of recurring revenues of the banking business, that is, net interest income and net fees and commissions, which together and excluding the impact of currency fluctuations grew by, 17.6% (+9.7% excluding this impact). These results represent an increase of 27.9% compared to the same period of the previous year and include the recording for the total annual amount paid for the temporary tax on credit institutions and financial credit institutions4 for €285m, included in the other operating income and expenses line of the income statement.
| CONSOLIDATED INCOME STATEMENT (MILLIONS OF EUROS) | ||||
|---|---|---|---|---|
| Jan.-Sep.24 | ∆ % | ∆ % at constant exchange rates | Jan.-Sep.23 | |
| Net interest income | 18,861 | 5.7 | 13.9 | 17,843 |
| Net fees and commissions | 5,754 | 25.3 | 31.6 | 4,594 |
| Net trading income | 2,930 | 104.9 | 145.6 | 1,430 |
| Other operating income and expenses | (1,383) | (21.6) | (27.6) | (1,763) |
| Gross income | 26,161 | 18.4 | 29.4 | 22,104 |
| Operating expenses | (10,189) | 10.3 | 16.6 | (9,241) |
| Personnel expenses | (5,443) | 12.5 | 19.2 | (4,837) |
| Other administrative expenses | (3,621) | 8.1 | 15.3 | (3,350) |
| Depreciation | (1,125) | 6.8 | 8.7 | (1,054) |
| Operating income | 15,972 | 24.2 | 39.1 | 12,863 |
| Impairment on financial assets not measured at fair value through profit or loss | (4,279) | 33.6 | 37.1 | (3,203) |
| Provisions or reversal of provisions | (99) | (52.9) | (45.6) | (210) |
| Other gains (losses) | 53 | 44.0 | 41.9 | 37 |
| Profit (loss) before tax | 11,647 | 22.8 | 41.8 | 9,487 |
| Income tax | (3,659) | 14.2 | 30.1 | (3,204) |
| Profit (loss) for the period | 7,987 | 27.1 | 47.9 | 6,283 |
| Non-controlling interests | (366) | 13.7 | 211.3 | (322) |
| Net attributable profit (loss) | 7,622 | 27.9 | 44.2 | 5,961 |
| Adjusted earning (loss) per share (euros) (1) | 1.28 | 0.98 | ||
| Earning (loss) per share (euros) (1) | 1.27 | 0.96 | ||
(1) Adjusted by additional Tier 1 instrument remuneration. For more information, see Alternative Performance Measures at the end of this report.
Unless expressly indicated otherwise, for a better understanding of the changes under the main headings of the Group's income statement, the rates of change provided below refer to constant exchange rates. When comparing two dates or periods in this report, the impact of changes in the exchange rates against the euro of the currencies of the countries in which BBVA operates is sometimes excluded, assuming that exchange rates remain constant. For this purpose, the average exchange rate of the currency of each geographical area of the most recent period is used for both periods, except for those countries whose economies have been considered hyperinflationary, for which the closing exchange rate of the most recent period is used.
The accumulated net interest income as of September 30, 2024 was higher than in the same period of the previous year (+13.9%), with increases in all business areas except for Turkey, as a result of the dynamism that lending activity has shown during the first nine months of the year. The good evolution in South America and Spain is noteworthy.
Positive evolution in the net fees and commissions line, which increased by 31.6% in year-on-year terms due to the favorable performance in payment systems and, to a lesser extent, asset management. The contribution from Turkey stands out above the rest of business areas.
NET INTEREST INCOME / AVERAGE TOTAL ASSETS
(PERCENTAGE AT CONSTANT EXCHANGE RATES)
NET INTEREST INCOME PLUS NET FEES AND COMMISSIONS
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +9.7%.
At the end of September 2024, NTI grew by 145.6%, mainly explained by the favorable results from hedging foreign currency positions, especially of the Mexican peso, recorded in the Corporate Center and, to a lesser extent, to the positive performance of this line in all areas, with Spain and Mexico standing out, supported by the contribution of Global Markets.
The other operating income and expenses line accumulated, as of September 30, 2024 a result that improves compared to the same period of the previous year, despite reflecting a more negative impact from hyperinflation in Argentina and an increase in the amount paid in the form of the temporary tax on credit institutions and financial credit institutions in the current year. The above is offset by a lower impact from hyperinflation in Turkey, the lack of contributions to the European Single Resolution Fund after the completion of its construction stage5 and a favorable evolution of the results of the insurance business.
GROSS INCOME
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +18.4%.
On a year-on-year basis, the increase in operating expenses increased at the Group level stood at 16.6%, a rate that is below the inflation rates observed in the countries in which the Group operates (an average of 21.1% on average in the last 12 months6).
Thanks to the remarkable growth in gross income (+29.4%, significantly higher than the growth in operating expenses), the efficiency ratio stood at 38.9% as of September 30, 2024, with an improvement of 429 basis points compared to the ratio as of September 30, 2023.
OPERATING EXPENSES
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +10.3%.
EFFICIENCY RATIO
(PERCENTAGE)
The impairment on financial assets not measured at fair value through profit or loss (impairment on financial assets) at the end of September 2024 was 37.1% higher than in the same period of the previous year, due to the greater focus on growth in retail products, the most profitable in recent years, as well as the timing on the cycle in some of the Group´s geographical areas. All business areas required greater loan-loss provisions, highlighting Mexico and South America.
OPERATING INCOME
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +24.2%.
IMPAIRMENT ON FINANCIAL ASSETS
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +33.6%.
The provisions or reversal of provisions line (hereinafter, provisions) registered at the end of September 30, 2024 lower provisions compared to the same period of the previous year, mainly originated in Turkey.
On the other hand, the other gains (losses) line ended September 2024 with a balance of €53m, which compares favorably with the result of the previous year when collecting the positive impact of the evaluation of real state in Turkey and the reversal of impairments for investments in associates, recorded in Corporate Center.
As a result of the above, the BBVA Group generated a net attributable profit of €7,622m between January and September of 2024, which compares very positively with the result of the same period of the previous year (+44.2%). These solid results are supported by the favorable evolution of the banking business recurring income, which offsets the higher operating expenses and the increase in provisions for impairment losses on financial assets.
The cumulative net attributable profits, in millions of euros and accumulated at the end of September 2024 for the business areas that compose the Group were as follows: €2,866m in Spain, €4,193m in Mexico, €433m in Turkey, €471m in South America and €402m in Rest of Business.
NET ATTRIBUTABLE PROFIT (LOSS)
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +27.9%
The Group's excellent performance has also allowed it to continue generating value, as it is reflected in the growth of the tangible book value per share and dividends, which as of the end of September 2024 was 16.5% higher than in the same period of the previous year.
TANGIBLE BOOK VALUE PER SHARE AND DIVIDENDS
(EUROS)
General note: replenishing dividends paid in the period. For more information, see Alternative Performance Measures at the end of this report.
EARNING (LOSS) PER SHARE
(EUROS)
General note: Adjusted by additional Tier 1 instrument remuneration. For more information, see Alternative Performance Measures at the end of this report.
(1) The year-on-year variation of adjusted EPS stands at 30.1%
Lastly, the Group’s profitability indicators improved in year-on-year terms supported by the favorable performance of results.
ROE AND ROTE
(PERCENTAGE)
ROA AND RORWA
(PERCENTAGE)
4 In compliance with Law 38/2022, of December 27, which establishes the obligation to pay a patrimonial benefit of a public and non-taxable nature during the years 2023 and 2024 for credit institutions that operate in Spanish territory whose sum of total interest income and fee and commission income corresponding to the year 2019 is equal to or greater than €800m.
5 The Single Resolution Fund, whose funds would be allocated to the resolution of financial entities in certain circumstances, has been increasing during a transitional period of eight years (2016-2023) with the objective of reaching at least 1% of the deposits covered by the Member States that make up the Single Resolution Mechanism at the end of 2023.
6 Weighted by operating expenses and excluding Venezuela.