Positive trend in recurring revenues.
Gross income growth, driven by NTI and dividends.
Improvement in risk indicators.
Solid capital ratios.
BBVA Group's earnings in the first quarter of 2016 have been determined in general by the very negative impact of the exchange rates of the main currencies that have an effect on the Group's financial statements against the euro, by the difficult situation in the markets and by the lack of corporate operations.
Banking activity in Spain: The balance of lending is down 0.2% in year-on-year terms. However, since the end of September of 2015, it has grown slightly by 0.4%, thanks to the good performance in the area's loans and due to the €1.1bn outstanding portfolio of performing loans to developers transferred from real-estate activity in Spain to banking activity in Spain. The net attributable profit generated by banking activity in Spain in the first half of 2016 was 619 million euros, a year-on-year decline of 15.3%.
Real-estate activity in Spain: This area has posted negative earnings of 209 million euros in the first half of 2016, a less negative figure than in the same period the previous year (-301 million euros), due mainly to lower needs for loan-loss and real-estate provisions and a better scenario for the cost of funding of the asset portfolios. Unless expressly stated otherwise, all percentage changes presented below are expressed at a constant exchange rate.
BBVA closed the first half of 2016 with a level of CET1 fully-loaded capital of 10.7%. The Group maintains a high leverage ratio: 6.4% using the fully-loaded criterion (6.6% phased-in), which compares very favorably with the rest of its peer group.
In the first six months of 2016 there has been no change in BBVA's rating. On April 13, DBRS changed the outlook for BBVA from positive to stable as a result of a similar change in the outlook for the Spanish sovereign rating.
(1) In addition, Moody's assigned a rating of A3 to BBVA's long-term deposits.
(1) In addition, Moody's assigned a rating of A3 to BBVA's long-term deposits.
At the close of the first half of 2016, the variables related to the Group's credit risk management continued to perform favorably.
Credit risk has increased by 1.0% with respect to the close of the previous quarter and 0.1% compared to the figure for the end of 2015 (up 0.8% and 1.3%, respectively, at constant exchange rates).
The weight of NPL on the Group's total credit risk has decreased to 5.1%, maintaining the good performance seen in the first quarter of the year. Since March 2016, the balance has been reduced by 2.5% (2.6% at constant exchange rates). The positive performance of this heading in Banking Activity in Spain (down 5.1%), Real-estate Activity in Spain (down 3.8%) and Mexico (down 4.4%) explains this decrease.
The Group's NPL ratio has continued to decline to 5.1% as of 30-Jun-2016. The coverage ratio remains stable at 74%.
The number digital and mobiles customers continues to increase (up 8% and 15% since December 2015, and up 21% and 45% year-on-year, respectively).
On June 21, 2016, VISA Inc. completed the acquisition of VISA Europe Ltd. This transaction has represented the recognition, in BBVA Group's financial statements, of a capital gain of 128 million euros net of taxes.