The BBVA group closed the first nine months of 2023 with a net profit of 5,961 million euros, which is equivalent to an increase of 24.3% compared to the same period of the previous year, as reported by the financial institution this Tuesday when publishing its quarterly income statement.
If the effect of inflation is excluded, the increase in profit at a constant exchange rate was 37.9%, as indicated by the bank. The large increase has occurred despite the fact that the bank had to face a disbursement of 215 million euros for the extraordinary banking tax in Spain.
"In the first nine months of 2023 we obtained excellent results, thanks to the positive evolution of recurring income. We are one of the most efficient and profitable banks in Europe, with a profitability that has already reached 17%. These results allow us continue generating value for our stakeholders and contribute to the progress of society", indicated the CEO of BBVA, Onur Genç.
The entity's total income between January and September was 22,104 million euros, which is equivalent to an increase of 21.1% compared to the same period in 2022. Of that figure, net interest income increased by 29.4 %, up to 17,843 million euros, while those originated by net commissions were 4,594 million euros, 13.6% more.
The result of financial operations had a positive impact on the gross margin of 1,430 million euros, 14.3% less, while the rest of the income and operating expenses had a negative impact of 1,763 million euros, 41% less. .3% more. This increase is largely due to the tax, although it has been alleviated by a lower contribution to the Single Resolution Fund (SRF) in Spain.
The financial group's personnel expenses between January and September were 4,837 million euros, 19.3% more, while the rest of the administration expenses increased by 20.4%, up to 3,350 million euros. The impact of the amortizations stood at 1,054 million euros.
The impairment of financial assets not valued at fair value was 3,203 million euros, 34.6% more, while the bank decided to reduce its new provisions to face credit defaults by 12.8%, up to 210 million euros.
All in all, the result before taxes stood at 9,487 million euros, which is equivalent to an increase of 20.9% compared to the first nine months of 2022.
Regarding the accounts only for the third quarter of 2023, BBVA recorded an attributable net profit of 2,083 million euros, 13.3% more. Total revenue between July and September reached 7,956 million euros, 16.3% more.
By geographical areas, Mexico remains the region that contributes the most to profits (two thirds of the total), with 3,987 million euros, 36.6% more, while Spain closed the period with profits of 2,110 million euros, 61.8% more.
In the rest of the Latin American countries, BBVA posted profits of 496 million euros, 20.6% less, while the business in Turkey advanced 10.2%, to a net result of 367 million euros.
Regarding the business in Spain, BBVA has highlighted that total loan investment decreased due to the amortization of mortgage loans by some clients and the deleveraging of large companies. This was mitigated by the "dynamism" of the consumer credit and card business, as well as the public sector and SMEs.
The investment banking business, which BBVA breaks down but does not count as an independent business, produced a net profit of 1,763 million euros, 32.8% more. Total income from this activity rose by 24%, reaching 3,743 million euros.
BALANCE SHEET AND SOLVENCY
As of September 30, 2023, BBVA's balance sheet had assets of 757,336 million euros, 2.7% more than a year before; of which 376,336 million were loans and advances to clients, 4.2% more than at the end of September of last year.
The group has managed to increase its volume of assets despite the change in the monetary policy of the European Central Bank (ECB), which has led the entity to reduce its cash deposited in central banks by 24.1%, to 66,859 million euros .
Of the total loan portfolio, loans to companies experienced an increase of 1.2% compared to the ninth month of last year, while the mortgage portfolio reached 93,306 million euros, less than 0.1% above a year before. The consumer credit business stood at 38,672 million euros, 6.5% more, while credit card activity reached 21,350 million, 29.8% more.
The credit portfolio maintained with the public sector stood at 23,178 million euros at the end of the first nine months of 2023, increasing 13.1% year-on-year.
For its part, the entity also recorded liabilities worth 704,283 million euros, 2.4% more. Customer deposits experienced an increase of 3.5% in the last year, reaching 403,661 million euros.
Although deposits grew, demand deposits experienced a drop of 1.5%, to 309,847 million euros, while time deposits rose to 90,102 million, 22.5% more.
Off-balance sheet customer funds reached 160,485 million euros as of September 30, 6.6% more. By proudcto, the resources placed in investment funds and managed portfolios were 129,985 million euros, 20% more, while pension plans fell 30.3%, to 27,304 million euros.
BBVA closed the third quarter with a default rate for the entire group of 3.3%, which represents an improvement of three basis points compared to the previous quarter. Adjusted return on tangible equity (RoTE) was 17%, improving by 1.4 percentage points.
The CET1 capital ratio experienced an improvement of 28 basis points in the year, up to 12.73%, including the impact of 1,000 million euros from the share buyback program initiated in October, while the total capital ratio advanced 55 basis points, up to 16.51%.