Group
Results
The BBVA Group generated a net attributable profit of €1,846m in the first quarter of 2023, which represents an increase of 39.4% compared to the first quarter of the previous year, driven by the performance of recurring income from the banking business, mainly net interest income.
These results include the recording, for the financial year 2023, of the temporary tax on credit institutions and financial credit institutions3 for €225m, included in the other operating income and expenses line of the income statement.
CONSOLIDATED INCOME STATEMENT (MILLIONS OF EUROS)
1Q23 |
∆% |
∆% at constant exchange rates |
1Q22 |
|
|---|---|---|---|---|
| Net interest income | 5,642 | 43.1 | 43.3 | 3,943 |
| Net fees and commissions | 1,439 | 15.4 | 15.8 | 1,247 |
| Net trading income | 438 | (24.4) | (18.7) | 580 |
| Other operating income and expenses | (561) | 49.9 | 18.3 | (374) |
| Gross income | 6,958 | 29.0 | 32.7 | 5,395 |
| Operating expenses | (3,016) | 25.4 | 25.7 | (2,406) |
| Personnel expenses | (1,551) | 25.2 | 26.4 | (1,238) |
| Other administrative expenses | (1,127) | 31.8 | 31.9 | (855) |
| Depreciation | (339) | 8.3 | 6.0 | (313) |
| Operating income | 3,942 | 31.9 | 38.6 | 2,989 |
| Impairment on financial assets not measured at fair value through profit or loss | (968) | 31.4 | 28.9 | (737) |
| Provisions or reversal of provisions | (14) | (71.0) | (68.2) | (48) |
| Other gains (losses) | (16) | n.s. | n.s. | 20 |
| Profit (loss) before tax | 2,944 | 32.3 | 42.3 | 2,225 |
| Income tax | (950) | 5.1 | 10.7 | (903) |
| Profit (loss) for the period | 1,994 | 50.9 | 64.6 | 1,321 |
| Non-controlling interests | (148) | n.s. | n.s. | 3 |
| Net attributable profit (loss) | 1,846 | 39.4 | 40.5 | 1,325 |
| Adjusted earning (loss) per share (euros) (1) | 0.29 | 0.21 | ||
| Earning (loss) per share (euros) (1) | 0.29 | 0.19 |
General note: 2022 figures have been restated according to IFRS17 - Insurance contracts.
(1) Adjusted by additional Tier 1 instrument remuneration. For more information, see Alternative Performance Measures at the end of this report.
CONSOLIDATED INCOME STATEMENT: QUARTERLY EVOLUTION (MILLIONS OF EUROS)
| 2023 | 2022 | ||||
|---|---|---|---|---|---|
| 1Q | 4Q | 3Q | 2Q | 1Q | |
| Net interest income | 5,642 | 5,334 | 5,252 | 4,595 | 3,943 |
| Net fees and commissions | 1,439 | 1,328 | 1,385 | 1,413 | 1,247 |
| Net trading income | 438 | 269 | 573 | 516 | 580 |
| Other operating income and expenses | (561) | (443) | (372) | (501) | (374) |
| Gross income | 6,958 | 6,489 | 6,838 | 6,022 | 5,395 |
| Operating expenses | (3,016) | (2,875) | (2,803) | (2,618) | (2,406) |
| Personnel expenses | (1,551) | (1,547) | (1,471) | (1,344) | (1,238) |
| Other administrative expenses | (1,127) | (990) | (993) | (935) | (855) |
| Depreciation | (339) | (338) | (338) | (340) | (313) |
| Operating income | 3,942 | 3,614 | 4,035 | 3,404 | 2,989 |
| Impairment on financial assets not measured at fair value through profit or loss | (968) | (998) | (940) | (704) | (737) |
| Provisions or reversal of provisions | (14) | (50) | (129) | (64) | (48) |
| Other gains (losses) | (16) | (6) | 19 | (3) | 20 |
| Profit (loss) before tax | 2,944 | 2,559 | 2,985 | 2,634 | 2,225 |
| Income tax | (950) | (850) | (1,005) | (680) | (903) |
| Profit (loss) for the period | 1,994 | 1,709 | 1,980 | 1,954 | 1,321 |
| Non-controlling interests | (148) | (146) | (143) | (120) | 3 |
| Net attributable profit (loss) excluding non-recurring impacts | 1,846 | 1,563 | 1,838 | 1,834 | 1,325 |
| Discontinued operations and Other (1) | — | — | — | (201) | — |
| Net attributable profit (loss) | 1,846 | 1,563 | 1,838 | 1,633 | 1,325 |
| Adjusted earning (loss) per share (euros) (2) | 0.29 | 0.25 | 0.29 | 0.29 | 0.21 |
| Earning (loss) per share (euros) (2) | 0.29 | 0.24 | 0.28 | 0.24 | 0.19 |
- General note: 2022 figures have been restated according to IFRS17 - Insurance contracts.
- (1) Includes the net impact arisen from the purchase of offices in Spain in the second quarter of 2022 for €-201m.
- (2) Adjusted by additional Tier 1 instrument remuneration. For more information, see Alternative Performance Measures at the end of this report.
Unless expressly indicated otherwise, to better understand the changes under the main headings of the Group's income statement, the year-on-year 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 March 31, 2023 was higher than the previous year (+43.3%), with increase in all business areas due to the improvement in customer spread and higher performing loan volumes. Particularly noteworthy was the good evolution in Mexico, South America and Spain.
Positive evolution in the net fees and commissions line, which increased by 15.8% in the year due to favorable performance in payment systems and demand deposits. By business areas, Mexico and Turkey are particularly noteworthy.
NET INTEREST INCOME/AVERAGE TOTAL ASSETS
(PERCENTAGE)
NET INTEREST INCOME PLUS NET FEES AND COMMISSIONS
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +36.5%.
NTI recorded a year-on-year variation of -18.7% at the end of March 2023, due to the negative results recorded in this line in the Corporate Center and, to a lesser extent, in Spain, partially offset by the favorable evolution of this line in all other business areas.
The other operating income and expenses line accumulated a result of €-561m as of March 31, 2023, compared to €-374m in the previous year, mainly due to the €225m recorded in this line for the temporary tax on credit institutions and financial credit institutions for the year 2023. This has been partially offset by the good performance of the insurance business, especially in Mexico.
GROSS INCOME (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +29.0%.
Year-over-year, operating expenses increased 25.7% at the Group level. This increase is largely impacted by the inflation rates observed in the countries in which the Group operates. On the one hand, they have been impacted by the measures implemented by the Group in 2023 to compensate the loss of purchasing power of the workforce and, on the other hand, by the impact of general expenses.
Notwithstanding the above, thanks to the remarkable growth in gross income (+32.7%), the efficiency ratio stood at 43.3% as of March 31, 2023, with an improvement of 241 basis points compared to the ratio recorded 12 months earlier. By areas, Mexico and South America recorded a favorable performance in terms of efficiency.
OPERATING EXPENSES (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +25.4%.
EFFICIENCY RATIO (PERCENTAGE)
Impairment on financial assets not measured at fair value through profit or loss (impairment on financial assets) at the end of March 2023 was 28.9% higher than in the first quarter of the previous year, with higher provisions mainly in South America and Mexico, in a context of growth in activity.
OPERATING INCOME
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +31.9%.
IMPAIRMENT ON FINANCIAL ASSESTS
(MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +31.4%.
The provisions or reversal of provisions line (hereinafter, provisions) accumulated a negative balance of €14m as of March 31, 2023, an improvement of 68.2% compared to the previous year, mainly due to lower provisions in Spain and Turkey.
For its part, the other gains (losses) line closed March 2023 with a balance of €-16m, which compares negatively with the previous year, when a positive balance of €20m was recorded mainly due to results related to real estate assets in Mexico, Spain and Turkey.
As a result of the above, the BBVA Group generated a net attributable profit, of €1,846m in the first quarter of the year 2023, which compares very positively with the same period of the previous year (+40.5%). These solid results were supported by the favorable evolution of net interest income and, to a lesser extent, net fees and commissions, which compensate higher operating expenses and the increase in provisions for impairment losses on financial assets.
The cumulative net attributable profits, in millions of euros, at the end of March 2023 for the business areas that compose the Group were as follows: €541m in Spain, €1,285m in Mexico, €277m in Turkey, €184m in South America and €92m in Rest of Business.
NET ATTRIBUTABLE PROFIT (LOSS) (MILLIONS OF EUROS AT CONSTANT EXCHANGE RATES)
(1) At current exchange rates: +39.4%.
The Group's excellent performance in 2022 has also allowed it accelerate value creation, as reflected in the growth of the tangible book value per share and dividends, which at the end of the first quarter of 2023 was 21.7% higher than in the same period of the previous year.
TANGIBLE BOOK VALUE PER SHARE (1) AND DIVIDENDS (EUROS)
General note: replenishing dividends paid in the period.
ADJUSTED EARNING (LOSS) PER SHARE (2) AND EARNING (LOSS) PER SHARE (2) (EUROS)
General note: adjusted EPS excludes the net impact arisen from
the purchase of offices in Spain in 2Q22.
(1) For more information, see Alternative Performance Measures at the end of this report.
(2) Adjusted by additional Tier 1 instrument remuneration. For more information, see Alternative Performance Measures at the end of this report.
The Group’s profitability indicators improved in year-on-year terms, supported by the favorable performance of results.
ROE AND ROTE (1) (PERCENTAGE)
ROA AND RORWA (1) (PERCENTAGE)
(1) The ratio at the end of 2022 excludes the net impact arisen from the purchase of offices in Spain.
3 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.