BBVA earns 4,653 million, triple that of 2020 and will pay the largest cash dividend in a decade

BBVA obtained a attributable net profit of 4,653 million euros during 2021, which means 3.6 times or increase by 256.55% the 1,305 million harvested a year before when the account suffered a significant reduction due to the provisions made to face potential deterioration due to the situation created by the pandemic. The result exceeds the 4,306 million forecast of the Bloomberg market consensus by 8.05%.

The recurring profit reached 5,069 million, its highest atypical result in 10 years, Y already beats the 4,830 million achieved during 2019 without outliers (the provisions made on its investment in the US lowered that figure to a net of 4,830 million). The bank attributed this to “good revenue performance and lower provisions.”

With the 2021 accounts closed, the group chaired by Carlos Torres accelerates shareholder remuneration and today announced the payment in April of a new dividend of 0.23 euros per share charged to profit. This is added to the 0.08 cents paid previously, which brings the payment charged to last year to 0.31 euros and represents the largest cash dividend of the last decade.

It will also launch a second tranche of the 3,500 million share repurchase program. After the ‘investor day’, the process began with a first tranche of up to 1,500 million and at its end will launch the second, worth 2,000 million and executable before next October 15.

All the margins of your account presented increases in the year: the interest margin rose by 0.6%, the gross margin expanded the progression to 4.5% and the net margin rose by 4.1%. The income contribution from commissions grew by 15.6% and while the cost heading limited its advance to 4.9%.

The allocations for provisions were reduced by 75.1%, with just 262 million in the year; and asset impairment fell 38.7% in the year, to 3,034 million.

The bottom line of the profit was also spurred on by comparing with a 2020 with a strong impact of provisions for provisions, although it also includes extraordinary costs of 696 million for the restructuring process in Spain that were partially offset by 280 million from the sale of business in the United States. Just in the fourth quarter of 2021, the benefit exceeded that of all 2020, rising to 1,341 million. ROTE profitability thus stood at 12% and ROE at 11.4%.

The improvement of the margin and the account is supported by the evolution of the business. At a constant perimeter and without variation of currencies, the gross number of loans increased by 2.1% and customer funds by 4.5%.

Non-performing loans fell by 10 basis points, to 4.1%, and the coverage rate stood at 75%, while the most demanding fully loaded CET1 capital rate reached 12.75%, above its range target 11.5-12%.

All geographies grow

By geography, the benefit attributed in Spain it grew by 143%, up to 1,581 million, after achieving increases of 1.7% in the credit business and 2.8% in customer funds that boosted commissions. Non-performing loans stood at 4.2% and the coverage rate for provisions at 62%.

In Turkey, where it plans to launch a takeover bid for the subsidiary Garanti when it receives the required authorizations, the bank registered expansions of 28.1% in the credit business in Turkish lira and 24.5% in customer funds. However, it experienced declines of 13.3% and 5.1% in both businesses, respectively, in foreign currency. Its delinquency stood at 7.1% and the coverage rate at 75%. With all attributable profit reached 740 million euros, 71.4% more.

The franchise of Mexico it remains the geography that makes the greatest contribution in terms of profit. The bank raised the attributable result there by 42.6%, to 2,568 million, based on an evolution of the activity with increases of 6.5% in credit and 11.5% in customer funds and with non-performing loans at 3.2%.

In South America, the attributable profit amounted to 491 million (+23%) after achieving advances of 10.3% in credit and 5.7% in customer funds. Its delinquency stood at 4.5%.