BBVAs Profit Returns to PrePandemic Levels


MADRID, April 30 (Reuters) – BBVA’s profit returned to pre-pandemic levels in the first quarter after the Spanish bank did not set aside any specific COVID-19 provisions but lending income remained under pressure.

The group’s net profit came in at 1.21 billion euros ($1.47 billion) in the first quarter compared with a loss in the same quarter a year ago.

Profit was higher than the 905 million euros expected by analysts polled by Reuters, and was also above the 1.182 billion recorded in the same quarter in 2019, before the pandemic.

Spain’s second-biggest bank in terms of total assets said profit was also driven by strong recurrent revenues and lower overall impairments.

In the first quarter last year, BBVA had booked a loss of 1.79 billion euros due to 3.5 billion euros in pandemic provisions and a goodwill charge in the United States.

Banks across Europe, already squeezed by record low interest rates, are under growing pressure from rising bad debts as a result of the effects of the COVID-19 pandemic.

Overall, net interest income, earnings from loans minus deposit costs, fell 14.2% to 3.45 billion euros, slightly below market forecasts of 3.5 billion, mainly due to Turkey, BBVA’s third biggest market.

Net interest income in Turkey declined by 35.3% compared with the same quarter a year ago due to the contraction of spreads between income on loans and payments for deposits plus the increase in funding costs in the country.

Sabadell, Spain’s fourth-biggest bank by assets, also beat forecasts in the January to March period, also thanks to lower overall provisions. Sabadell benefited from a return to profit from its British banking business TSB.

$1 = 0.8254 euros

Reporting by Jesus Aguado, Editing by Inti Landauro and Jane Merriman

Source: Reuters


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