BBVA Lending Lifted Net Interest Income 13.9%
Full-year net interest income reached €26.28 billion as lending activity supported currency-adjusted growth.
BBVA (BBVA), the Spanish banking group, reported a 13.9% currency-adjusted increase in full-year net interest income to €26.28 billion, accelerating from 12.9% growth in 2023 as lending activity strengthened. In current euros, net interest income rose 4.0%.
Spain supplied broader loan growth even as the country's net interest income growth slowed. Lending expanded 8.0% YoY, up from 4.1% in 2023, with corporate and investment-banking loans rising 18.3% and midsize-company loans increasing 10.7%. Spain's net interest income rose 3.2% to €6.59 billion, while lower impairments and expenses helped attributable profit increase 11.3% to €4.18 billion.
The geographic mix diverged elsewhere. Turkey's net interest income more than doubled to €3.08 billion as activity and Turkish-lira customer spreads improved, reversing the prior year's decline. Mexico's net interest income fell 1.1% in constant euros to €11.42 billion as customer-spread compression outweighed recovering lending activity.
Fee growth remained positive but normalized sharply, with net fees and commissions increasing 14.6% in constant euros and 2.8% in current euros to €8.22 billion. Currency-adjusted fee growth had been 30.8% in 2023. Trading income moved the other way, falling 23.7% in constant euros to €2.66 billion after rising 91% the previous year.
Revenue continued to outpace costs. Gross income rose 16.3% in constant euros while operating expenses increased 10.5%, widening positive jaws and helping the cost-to-income ratio decline 206 bps to 38.8%. The ratio had fallen 226 bps to 40.0% in 2023.
Credit indicators improved despite a higher impairment charge. Financial-asset impairments increased 15.5% in constant euros to €6.07 billion, while the cost of risk declined 4 bps to 1.39%. The nonperforming-loan ratio fell to 2.7% from 3.0%, and coverage rose to 85% from 80%.
Regional credit trends remained uneven. Mexico's cost of risk eased to 331 bps from 339 bps even as impairments rose 10.5% in current euros to €3.13 billion. Turkey's impairments increased 90.1% to €1.00 billion and its cost of risk reached 194 bps, reflecting retail provisioning needs.
BBVA's CET1 ratio declined 18 bps to 12.70% after capital distributions, remaining above its 11.5%-to-12.0% target range; excluding the extraordinary buyback, the ratio would have been 13.75%. The bank set a €4.0 billion extraordinary buyback program, up from €993 million for 2023, and raised its cash dividend 31% to €0.92 a share.