Rest of Business
Highlights
- Favorable credit evolution and significant growth in customers funds
- Increase in recurring revenues
- Improvement in NPL and NPL coverage ratios in the year
- Efficiency ratio and Group contribution improve in the year
BUSINESS ACTIVITY (1)
(VARIATION AT CONSTANT EXCHANGE RATES COMPARED TO 31-12-23)
(1) Excluding repos.
NET INTEREST INCOME / AVERAGE TOTAL ASSETS
(PERCENTAGE AT CONSTANT EXCHANGE RATES)
OPERATING INCOME
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +38.4%.
NET ATTRIBUTABLE PROFIT (LOSS)
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +26.3%.
| FINANCIAL STATEMENTS AND RELEVANT BUSINESS INDICATORS (MILLIONS OF EUROS AND PERCENTAGE) | ||||
|---|---|---|---|---|
| Income statement | 2024 | ∆ % | ∆ % (2) | 2023 (1) |
| Net interest income | 741 | 37.6 | 35.4 | 539 |
| Net fees and commissions | 307 | 25.8 | 23.4 | 244 |
| Net trading income | 406 | 28.2 | 25.7 | 316 |
| Other operating income and expenses | 4 | 8.4 | (20.3) | 3 |
| Gross income | 1,458 | 32.2 | 29.7 | 1,103 |
| Operating expenses | (743) | 26.7 | 24.8 | (586) |
| Personnel expenses | (402) | 32.8 | 30.4 | (303) |
| Other administrative expenses | (308) | 19.7 | 18.2 | (257) |
| Depreciation | (33) | 25.5 | 24.1 | (26) |
| Operating income | 715 | 38.4 | 35.3 | 517 |
| Impairment on financial assets not measured at fair value through profit or loss | (71) | 155.9 | 152.8 | (28) |
| Provisions or reversal of provisions and other results | (11) | n.s. | n.s. | (1) |
| Profit (loss) before tax | 634 | 29.7 | 26.7 | 489 |
| Income tax | (133) | 44.0 | 40.8 | (93) |
| Profit (loss) for the period | 500 | 26.3 | 23.5 | 396 |
| Non-controlling interests | — | — | — | — |
| Net attributable profit (loss) | 500 | 26.3 | 23.5 | 396 |
Balance sheets | 31-12-24 | ∆ % | ∆ % (2) | 31-12-23 |
| Cash, cash balances at central banks and other demand deposits | 8,348 | 75.8 | 65.9 | 4,748 |
| Financial assets designated at fair value | 1,627 | (89.5) | (90.1) | 15,475 |
| Of which: Loans and advances | 914 | (93.8) | (94.2) | 14,783 |
| Financial assets at amortized cost | 56,013 | 29.2 | 26.7 | 43,363 |
| Of which: Loans and advances to customers | 50,392 | 28.2 | 25.6 | 39,322 |
| Inter-area positions | — | — | — | — |
| Tangible assets | 206 | 36.0 | 31.6 | 151 |
| Other assets | 341 | (36.4) | (38.9) | 537 |
| Total assets/liabilities and equity | 66,534 | 3.5 | 0.2 | 64,274 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 642 | (95.7) | (95.9) | 14,831 |
| Deposits from central banks and credit institutions | 2,002 | (35.1) | (36.9) | 3,085 |
| Deposits from customers | 27,432 | 110.1 | 107.2 | 13,056 |
| Debt certificates | 1,721 | 21.8 | 19.1 | 1,413 |
| Inter-area positions | 28,095 | 6.2 | 3.3 | 26,466 |
| Other liabilities | 1,609 | 30.6 | 26.6 | 1,232 |
| Regulatory capital allocated | 5,033 | 20.1 | 17.4 | 4,191 |
Relevant business indicators | 31-12-24 | ∆ % | ∆ % (2) | 31-12-23 |
| Performing loans and advances to customers under management ⁽³⁾ | 50,393 | 28.5 | 26.0 | 39,202 |
| Non-performing loans | 213 | (42.0) | (42.0) | 368 |
| Customer deposits under management ⁽³⁾ | 27,432 | 110.1 | 107.2 | 13,056 |
| Off-balance sheet funds ⁽⁴⁾ | 645 | 13.9 | 13.9 | 566 |
| Risk-weighted assets | 44,407 | 22.0 | 19.3 | 36,410 |
| Efficiency ratio (%) | 50.9 | 53.1 | ||
| NPL ratio (%) | 0.3 | 0.7 | ||
| NPL coverage ratio (%) | 102 | 69 | ||
| Cost of risk (%) | 0.17 | 0.08 | ||
(1) Revised balances. For more information, please refer to the “Business Areas” section.
(2) At constant exchange rate.
(3) Excluding repos.
(4) Includes pension funds.
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, will be given at constant exchange rates. These rates, together with the changes at current exchange rates, can be found in the attached tables of the financial statements and relevant business indicators. Comments that refer to Europe exclude Spain.
Activity
The most relevant aspects of the evolution of BBVA Group's Rest of Business activity during 2024 were:
- Lending activity (performing loans under management) registered a growth of 26.0%, driven by the favorable evolution of project finance as well as corporate lending, both in the New York branch and in Europe. Also noteworthy is the transactional business, which offers integral and personalized financial solutions, in both geographical areas through increased participation in factoring programs.
- Customer funds under management grew by 103.4%, boosted by the evolution of deposits, mainly in Europe and in the New York branch.
The most relevant aspects of the evolution of BBVA Group's Rest of Business activity during the fourth quarter of 2024 were:
- Lending activity (performing loans under management) grew at a rate of 11.3%, mainly due to the evolution of corporate loans (+13.6%). In terms of the geographical areas that make up this area, Europe and the New York branch stand out.
- On the other hand, compared to the end of September, the NPL ratio dropped to 0.3%, thanks to the growth in activity and the reduction of the non-performing balance. The coverage ratio increased to 102% due to the decrease in the non-performing balance.
- Customer funds under management increased by 11.1% mainly due to time deposits in the New York branch.
Results
Rest of Business achieved an accumulated net attributable profit of €500m accumulated at the end of 2024, 23.5% higher than in the same period of the previous year, favored by the performance of the recurrent revenues and the NTI, which offset the increase in operating expenses and loan-loss provisions.
In the year-on-year evolution of the main lines of the area's income statement at the end of December 2024, the following was particularly noteworthy:
- Net interest income showed an increase of 35.4% as a result of increased activity volumes and price management. This growth was mainly in Europe, followed by the New York branch.
- Net fees and commissions increased by 23.4%, mainly due to singular financing transactions in Investment Banking & Finance (hereinafter IB&F) and transactional banking fees.
- The NTI grew by 25.7% supported by the strong performance of Global Markets in Europe, especially in credit and in the Group's equity trading business in the United States.
- Increase in operating expenses of 24.8%, with growth mainly in the United States (originated in the New York branch) and in Europe due to the increase in headcount and the execution of strategic plans.
- The impairment on financial assets line at the end of December 2024 recorded a balance of €-71m, mainly originating from provisions made in Europe.
In the fourth quarter of 2024, and excluding the effect of the exchange rates fluctuations, the Group's Rest of Businesses as a whole generated a net attributable profit of €86m, that is -51.3% with respect to the previous quarter due to growth in operating expenses, which include the update of the variable compensation to employees in line with the area's performance in 2024 as well as higher loan-loss provisions due to increased coverage for certain specific customers, which compares with the release of provisions in the previous quarter.