By Jeannette Neumann
MADRID-- Banco Bilbao Vizcaya Argentaria SA said net profit more
than doubled in the first quarter of the year on improved lending
income and stronger profit in Mexico, overcoming weaker returns in
South America given currency turmoil in Venezuela.
BBVA said first-quarter net profit was EUR1.54 billion, up from
EUR624 million a year earlier and beating analysts' expectations of
EUR1.3 billion.
Spain's No. 2 lender by market value said net interest income
was EUR3.66 billion compared with EUR3.4 billion the bank reported
a year earlier. That came in below analysts' expectations of EUR4
billion.
Net interest income, a key driver of profit for retail banks
such as BBVA, is the difference between what lenders pay clients
for deposits and charge for loans.
BBVA's net profit was also boosted by the sale earlier this year
of part of its stake in China Citic Bank Corp. BBVA has been
selling assets in China in recent months, seeking to shore up its
finances as European regulators toughen postcrisis capital
requirements for banks. BBVA said Wednesday that net profit would
have been more muted without the Citic stake sale, climbing 53% to
EUR953 million.
In BBVA's Mexico unit, the largest single contributor to the
bank's total net profit, lending income was up 14%. Net profit rose
15% to EUR524 million.
The lender's Venezuelan unit saw net profit plummet to EUR15
million in the first quarter from EUR57 million in the same period
a year earlier, amid ongoing currency fluctuations.
At BBVA's Spanish banking unit net profit declined 9.6% to
EUR347 million in the first quarter from a year earlier.
BBVA and other Spanish banks are facing weak loan growth in
Spain. The country's economy is growing again after emerging from a
deep recession in late 2013, but many borrowers are still focused
on paying down existing debts rather than taking out new loans. New
loans to businesses have been a bright spot in a dry lending
landscape, but Spanish banks are battling each other for them,
driving down returns amid already historically low interest
rates.
Banco Santander SA, Spain and the eurozone's largest bank by
market value, said Tuesday that net loans were up 0.2% in its home
market year-over-year. Other markets such as the U.K and Latin
America saw much more robust loan demand.
BBVA said Wednesday that gross loans issued by its Spanish unit
in the first quarter fell from a year earlier and when compared
with the previous quarter.
"The recovery of credit is under way, with good performance in
the production of new loans, although growth is not yet perceived
in the stock," BBVA said Wednesday.
BBVA said its capital ratio under Basel III "fully loaded"
criteria was 10.8% at the end of the quarter.
Write to Jeannette Neumann at jeannette.neumann@wsj.com
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