UPDATE: BBVA 3Q Net Profit Falls On Loan Losses
October 27 2009 - 3:22AM
Dow Jones News
Banco Bilbao Vizcaya Argentaria SA (BBV) on Tuesday reported a
nearly 1% drop in third quarter net profit as a sharp rise in
impairments for loan losses countered revenue growth at its Iberian
and Latin American operations.
BBVA - Spain's second-biggest bank by assets behind Banco
Santander SA (STD) - said net profit in the quarter fell to EUR1.38
billion from EUR1.39 billion, above an average EUR1.31 billion
forecast in a Dow Jones Newswires poll of 10 analysts.
"BBVA's results are slightly better than we expected and show
the company's ability to generate new business," Banesto said in a
research note. "The shares should perform better than the market
average in the near future."
Net interest income rose 13% to EUR3.43 billion, up from EUR3.04
billion a year earlier. Analysts had forecast EUR3.36 billion.
Despite pressure on its bottom line, the bank had another strong
boost to lending income, as BBVA took advantage of the weakness of
other banks to attract new clients and as it charged more for
loans.
BBVA's loan book deteriorated further in the quarter, with
non-performing loans rising to 3.4% of total loans from 1.7% a year
earlier. The bank is coping with prolonged recessions in its two
biggest markets of Spain and Mexico.
The bank set aside EUR1.74 billion to cover loan losses in the
quarter, up from EUR917 million a year earlier.
Costs were kept under control through early retirement and
branch closures. Total operating costs were down 4% in the third
quarter at EUR2.02 billion, BBVA said.
Its shares closed Monday at EUR12.49. The stock is up 54% in the
year to date, as investors bet that it will do better through the
downturn than most rivals. Shares in its main rival, Santander,
which is due to publish third-quarter earnings Wednesday, have
gained 76%.
-By Christopher Bjork and Jason Sinclair, Dow Jones Newswires,
+34 91 395 81 23, christopher.bjork@dowjones.com