Highlights
Results and business activity
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%. These results represent an increase of 27.9% compared to the same period of the previous year, and 44.2% excluding the impact of the evolution of currencies.
The accumulated results at the end of September 2024 include the recording of the total annual amount paid for the temporary tax on credit institutions and financial credit institutions for €285m, included in the other operating income and expenses line of the income statement.
In constant terms, excluding the impact of currency variations, operating expenses increased by 16.6% at Group level, affected by an environment of still high inflation in the countries where the Group has a presence, the growth of the workforce in all of them and the higher level of investments made in recent years. Thanks to the remarkable growth in gross income (+29.4%), which was notably greater 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.
The provisions for impairment on financial assets increased (+37.1% in year-on-year terms and at constant exchange rates), 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.
Loans and advances to customers recorded an increase of 2.4% compared to the end of December 2023, particularly driven by the evolution of corporate loans (+4.6% at Group level), and by the positive performance of loans to individuals.
Customer funds increased by 7.4% compared to the end of the previous year, driven by the evolution of off-balance sheet funds and by the growth of costumer deposits.
LOANS AND ADVANCES TO CUSTOMERS AND TOTAL CUSTOMER FUNDS (VARIATION COMPARED TO 31-12-2023)
Business areas
According to the accumulated results of the business areas between January and September of 2024 and excluding the effect of currencies fluctuation in those areas where it has an impact, in each of them it is worth mentioning:
- Spain generated a net attributable profit of €2,866m, that is 37.6% higher than in the same period of the previous year, mainly supported by the favorable evolution of every component of the gross income. These solid results include the negative impact of €285m due to the recording of the annual amount paid for the temporary tax on credit institutions and financial credit institutions.
- BBVA Mexico achieved a cumulative net attributable profit of €4,193m, representing an increase of 5.6% compared to the same period of the previous year, mainly due to the strength of the recurring income from the banking business.
- Turkey generated a net attributable profit of €433m, which compares favorably with the result in the same period of the previous year.
- South America generated a cumulative net attributable profit of €471m, which represents a year-on-year increase of 108.7%, driven by the good performance of recurring income and the net trading income (hereinafter, NTI).
- Rest of Business achieved an accumulated net attributable profit of €402m, 25.4% higher than in the same period of the previous year, favored by the performance of the recurrent revenues and the NTI.
The Corporate Center recorded a net attributable loss of €-744m, which is an improvement compared with the €-1,274m recorded in the same period of the previous year, mainly due to the favorable evolution of the NTI.
Lastly, and for a broader understanding of the Group's activity and results, supplementary information is provided below for the wholesale business, Corporate & Investment Banking (CIB), carried out by BBVA in the countries where it operates. CIB generated a net attributable profit of €2,071m. These results represent an increase of 32.1% on a year-on-year basis and reflect the contribution of the diversification of products and geographical areas, as well as the progress of the Group's wholesale businesses in its strategy, leveraged on globally and sustainability, with the purpose of being relevant to its clients.
NET ATTRIBUTABLE PROFIT (LOSS)
(MILLIONS OF EUROS)
NET ATTRIBUTABLE PROFIT BREAKDOWN (1)
(PERCENTAGE. JAN.-SEP.2024)
(1) Excludes the Corporate Center.
Solvency
The BBVA Group's CET1 fully loaded ratio stood at 12.84% as of September 30, 2024, which allows it to maintain a large management buffer over the Group's CET1 requirement as of that date (9.13%1), and is also above the Group's target management range of 11.5% - 12.0% of CET1.
Dividends
The Bank announced by means of an inside information notice (información privilegiada) dated September 26, 2024, that the Board of Directors of BBVA had agreed to pay an interim dividend for the year 2024, in the amount of 0.29 gross euros per share, which was paid on October 10, 2024. This dividend represents an increase of more than 81% compared to the gross amount paid in October 2023 (0.16 euros per share).
Purchase offer to the Banco Sabadell shareholders
On April 30, 2024, due to a media report, BBVA published an inside information notice (información privilegiada) stating that it had informed the chairman of the Board of Directors of Banco de Sabadell, S.A. (the "Target Company") of the interest of BBVA’s Board of Directors in initiating negotiations to explore a possible merger between the two entities. On the same date, BBVA sent to the chairman of the Target Company the written proposal for the merger of the two entities. The content of the written proposal sent to the Board of Directors of the Target Company was published on May 1, 2024, by BBVA through the publication of an inside information notice (información privilegiada) with the Spanish Securities and Exchange Commission (hereinafter “CNMV”).
On May 6, 2024, the Target Company published an inside information notice (información privilegiada) informing of the rejection of the proposal by its Board of Directors.
Following such rejection, on May 9, 2024, BBVA announced, through the publication of an inside information notice (información privilegiada) (the "Prior Announcement"), the decision to launch a voluntary tender offer (the "Offer") for the acquisition of all of the issued shares of the Target Company, being a total of 5,440,221,447 ordinary shares with a par value of €0.125 each (representing 100% of the Target Company’s share capital). The consideration initially offered by BBVA to the shareholders of the Target Company consisted of one (1) newly issued share of BBVA for each four and eighty-three hundredths (4.83) ordinary shares of the Target Company, subject to certain adjustments in the case of dividend distribution in accordance with what was indicated in the Prior Announcement.
In accordance with the Prior Announcement of the Offer and as a consequence of the interim dividend against the 2024 financial year results in the amount of €0.08 per share paid by the Target Company to its shareholders on October 1, 2024, BBVA proceeded to adjust the Offer consideration. Therefore, after applying the adjustment in the terms set forth in the Prior Announcement, the consideration offered by BBVA to the shareholders of the Target Company under the Offer was adjusted, as result of the dividend payment of the Target Company, to one (1) newly issued ordinary share of BBVA for each five point zero one nine six (5.0196) ordinary shares of the Target Company.
Additionally, as a result of the interim dividend against the 2024 financial year results in the amount of €0.29 per share paid by BBVA to its shareholders on October 10, 2024, BBVA proceeded to adjust again the Offer consideration. Therefore, also in accordance with the provisions of the Prior Announcement, the Offer consideration was adjusted to one (1) newly issued ordinary share of BBVA and €0.29 in cash for every five point zero one nine six (5.0196) ordinary shares of the Target Company.
Pursuant to the provisions of Royal Decree 1066/2007, of July 27, on the rules governing tender offers ("Royal Decree 1066/2007"), the Offer is subject to mandatory clearance by the CNMV. Additionally, pursuant to the provisions of Law 10/2014 and Royal Decree 84/2015, the acquisition by BBVA of control of the Target Company resulting from the Offer is subject to the duty of prior notification to the Bank of Spain and the obtention of the non-opposition of the European Central Bank (a condition that was satisfied on September 5, 2024, as described below).
In addition, completion of the Offer is also subject to the satisfaction of the conditions specified in the Prior Announcement, in particular (i) the acceptance of the Offer by holders of shares representing at least 50.01% of the share capital of the Target Company, (ii) approval by BBVA’s General Shareholders’ Meeting of the increase of BBVA’s share capital through the issue of new ordinary shares through non-cash contributions in an amount that is sufficient to cover the consideration in shares offered to the shareholders of the Target Company (which condition was satisfied on July 5, 2024, as described below), (iii) the express or tacit authorization of the economic concentration resulting from the Offer by the Spanish antitrust authorities, and (iv) the express or tacit authorization of the indirect acquisition of control of the Target Company’s banking subsidiary in the United Kingdom, TSB Bank PLC, by the United Kingdom Prudential Regulation Authority (“PRA”) (a condition that was satisfied on September 2, 2024, as described below).
On July 5, 2024, the BBVA’s Extraordinary General Shareholders' Meeting resolved to authorize, with 96% votes in favor, an increase in the share capital of BBVA of up to a maximum nominal amount of €551,906,524.05 through the issuing and putting into circulation of up to 1,126,339,845 ordinary shares of €0.49 par value each to cover the consideration in shares offered to the shareholders of the Target Company.
On September 3, 2024, BBVA announced, through the publication of an inside information notice (información privilegiada), that, on September 2, 2024, it received the authorization from the PRA for BBVA's indirect acquisition of control of TSB Bank PLC as a result of the Offer.
On September 5, 2024, BBVA announced, through the publication of an inside information notice (información privilegiada), that it received the decision of non-opposition from the European Central Bank to BBVA's taking control of the Target Company as a result of the Offer.
The Offer is subject to approval by the CNMV and to the approval of the economic concentration resulting from the Offer by the Spanish competition authorities. The detailed terms of the Offer will be set out in the prospectus, which was submitted to the CNMV together with the request for the authorization of the Offer on May 24, 2024, and will be published after obtaining the mandatory clearance of the CNMV.
Sustainability
Channeling sustainable business
SUSTAINABLE BUSINESS BREAKDOWN (PERCENTAGE OF THE AMOUNT CHANNELED 2018-SEPTEMBER 2024)
(1) In those cases where it is not feasible or sufficient information is not available to allow an exact distribution between the categories of climate change and inclusive growth, internal estimates are made based on the available information.
(2) Also includes Natural Capital.
(3) Primarily includes products whose funds are used for activities considered sustainable (according to both internal and market standards, existing regulations and best practices), products granted to clients considered sustainable taking into account their revenues from sustainable activities (in accordance with existing regulations and/or internal standards) or in line with company-level certifications of recognized prestige in the market, as well as sustainability linked products (according to both internal and market standards and best practices), such as those linked to environmental and/or social indicators.
(4) Bonds (green, social, sustainability or sustainability-linked) in which BBVA acts as bookrunner.
(5) Investment products art.8 or 9 under Sustainable Finance Disclosure Regulation (SFDR) or similar criteria outside the EU managed, intermediated or marketed by BBVA. "Other" includes deposits under the Sustainable Transaction Banking Framework until its replacement by the CIB Sustainable Products Framework (both Frameworks published on the bank's website), insurance policies related to energy efficiency and inclusive growth and electric vehicle autorenting, mainly.
(6) Includes the activity of the BBVA Microfinance Foundation (BBVAMF), which is not part of the consolidated Group and which has channeled around €8.7 billion in the period from 2018 to September 2024 to support vulnerable entrepreneurs with microcredits.
Regarding the objective of channeling €300 billion between 2018 and 20252 as part of the sustainability strategy, the BBVA Group has channeled an approximate total of €276 billion3 in sustainable business between 2018 and September 2024, of which approximately 77% corresponds to the area of promoting the fight against climate change and the remaining 23% to promote inclusive growth.
During the first nine months of 2024, around €71 billion was channeled, of which around €26 billion corresponds to the third quarter of 2024. This channeling represents an increase of around 44% compared to the same period of 2023.
Of the amount channeled in the first nine months of 2024, around €9 billion has gone to the retail business, representing a growth of 41% compared with the same period of the previous year. During the third quarter, around €4 billion was channeled. BBVA has continued to promote customized digital solutions aimed at the mass consumer market, offering retail customers a vision of the potential savings they can obtain by adopting energy-saving measures in their homes and transportation. The good performance of channeling related to the acquisition of hybrid or electric vehicles stands out, with a total of around €192 million financed, representing a 106% growth compared to the same period of the previous year.
Between January and September 2024, the commercial business (enterprises) mobilized around €24 billion, representing a growth of 55% compared to the same period of the previous year. Of this figure, approximately €9 billion corresponds to the third quarter of 2024, while continuing to advise corporate customers on sustainable solutions that enable potential economic savings with a focus on cross-cutting issues, such as energy efficiency, vehicle fleet renewal or water footprint reduction. It is worth highlighting the financing allocated to natural capital (agribusiness, water and circular economy) with around €599 million, which represents an increase of 59% compared to the same period of the previous year.
CIB has channeled around €37 billion between January and September 2024, representing a 38% growth compared to the same period of the previous year. During this last quarter, around €13 billion have been mobilized. In the wholesale segment, BBVA has continued to promote the financing of clean technologies and renewable energy projects, as well as confirming linked to sustainability, among other strategic lines. The financing of renewable energy projects stood out, which contributed around €690 million during the third quarter, this represents more than double the amount compared to the same period of the previous year, with the contribution from the United States being crucial, as it channels more than half in this section.
Relevant advances in the field of sustainability
- Creation of a representative office in Houston with the aim of leading the financing of the energy transition in the United States
Within the framework of the first edition of the Houston Energy & Climate Week, the BBVA Group has announced the opening of a new office in Houston with the aim of leading the financing of the energy transition in the United States. This boost to sustainability is part of the BBVA Group's growth plans in the United States.
BBVA's sustainability strategy in the United States focuses on supporting companies in the energy sector and those that promote sustainable development, including traditional renewable energy generation technologies, wind and solar, and cleantech technologies, such as energy storage systems, hydrogen and carbon capture, among others. In addition, BBVA supports other areas such as electric vehicles, energy efficiency and circular economy.
Additionally, the strategy includes accompanying companies in the transformation of their business model towards more sustainable alternatives with financing and advisory solutions. These plans will contribute to achieving BBVA's overall goal of sustainable business.
BBVA's new office in Houston joins the cleantech innovation finance teams working in New York, London and Madrid.
1 Considering the last official update of the countercyclical capital buffer, calculated on the basis of exposure as of June 30, 2024.
2 For the purposes of the Goal 2025, channeling is considered to be any mobilization of financial flows, cumulatively, in relation with activities, clients or products considered to be sustainable or promoting sustainability in accordance with internal standards inspired by existing regulations, market standards such as the Green Bond Principles, the Social Bond Principles and the Sustainability Linked Bond Principles of the International Capital Markets Association, as well as the Green Loan Principles, Social Loan Principles and the Sustainability Linked Loan Principles of the Loan Market Association, existing regulations, and best market practices. The foregoing is understood without prejudice to the fact that said mobilization, both at an initial stage or at a later time, may not be registered on the balance sheet. To determine the financial flows channeled to sustainable business, internal criteria is used based on both internal and external information, either from public sources, provided by customers or by a third party (mainly data providers and independent experts).
3 The amount channeled includes financing, intermediation, investment, off-balance sheet and insurance transactions. These operations have contractual maturity or redemption dates, so the above mentioned accumulated figure does not represent the amount reflected on the balance sheet.