BBVA profits return to pre-pandemic levels, Turkey reaches loan income
By Jesús Aguado
MADRID (Reuters) -BBVA profits returned to pre-pandemic levels in the first quarter after Spain’s bank failed to set aside specific provisions for COVID-19, but loan income remained under pressure .
The group’s net profit was 1.21 billion euros ($ 1.47 billion) in the first quarter, compared to a loss in the same quarter a year ago.
Profit was above 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-largest bank in terms of total assets said profit was also driven by strong recurring income and lower overall write-downs.
In the first quarter of last year, BBVA recorded a loss of 1.79 billion euros due to 3.5 billion euros of pandemic provisions and a goodwill charge in the United States.
Banks across Europe, already squeezed by historically low interest rates, are under increasing pressure from rising bad debts due to the effects of the COVID-19 pandemic.
In total, net interest income, loan income less deposit costs, fell 14.2% to 3.45 billion euros, slightly below market forecast of 3.5 billion, mainly in due to Turkey, BBVA’s third market.
Net interest income in Turkey decreased by 35.3% compared to same quarter last year due to narrowing spreads between income on loans and payments for deposits and rising costs funding in the country.
Sabadell, Spain’s fourth-largest bank in terms of assets, also beat forecast from January to March, also thanks to lower overall provisions. Sabadell benefited from a return to profit from its UK TSB banking business.
(1 USD = 0.8254 euros)
(Report by Jesús Aguado, edited by Inti Landauro and Jane Merriman)