Gross lending to customers grew by 13.1% in year-on-year terms, influenced by the incorporation of CX since April 24, 2015. As a result, the net attributable profit generated by banking activity in Spain in 2015 was €1,046m, a year-on-year increase of 21.9%.
BBVA Group's earnings in the first quarter of 2016 have been determined in general by a very negative impact of the exchange rates of the main currencies that have an effect on the Group's financial statements against the euro and by the absence of corporate operations. Since the third quarter of 2015, BBVA's total stake in Garanti has been consolidated by the full integration method. For prior periods, Garanti's revenue and expenses are integrated into the proportion corresponding to the percentage of the stake held by the Group until then (25.01%).
Banking activity in Spain: The net attributable profit generated by banking activity in Spain in the first quarter of 2016 was €234 million, a year-on-year decline of 23.6%. The highlights are: 1. The recovery of the Spanish economy continues in 2016. 2. The good rate of growth of the production of new loans and customer deposits. 3. Profit influenced by a lower contribution from NTI and a rise in expenses, which has been partially offset by the good performance of loan-loss provisions. 4. Reduction in the cost of risk.
Real-estate activity in Spain: A loss of €113 million was registered in the first quarter of 2016, a less negative figure than in the same period last year (down €154 million), due mainly to lower needs for loan-loss and real-estate provisions, a better scenario for the cost of funding of the asset portfolios and lower volumes funded as a result of the reduced exposure.
BBVA closed the first quarter of 2016 with a CET1 fully-loaded capital ratio of 10.5% (1), which compares with a ratio of 10.3% at the end of 2015. As regards the leverage ratio, BBVA Group continues to maintain high levels: 6.3% fully-loaded (6.4% phased-in), which continues to compare very favorably with the rest of its peer group.
In the first four months of 2016 there has been no change in BBVA's rating. On April 13, DBRS changed the outlook for BBVA from positive to stable as a result of a similar change in the outlook for the Spanish sovereign rating made on April 8.
(1) In addition, Moody's assigned a rating of A3 to BBVA's long-term deposits.
(1) (1) In addition, Moody's assigned a rating of A3 to BBVA's long-term deposits.
In the first quarter of 2016, the main variables related to the Group's credit risk management have continued to be positive in general terms and compared to the previous quarter.
The trend in credit risk during the last quarter has been affected by the performance of exchange rates. In current terms there has been a decline of 0.8%, while at constant exchange rates the growth stands at 0.6%. Over the last twelve months, the rates of change are +15.7% and +22.7%, respectively.
Non-performing assets, which account for 5.3% of the Group's total credit risk, once again performed favorably over the last three months. Since 31-Dec-2015, their balance has declined by 2.0%, with Banking Activity in Spain (down 4.7%) and Real-estate Activity in Spain (down 5.3%) once again being the areas that explain this positive performance. In the rest of geographical areas, the performance has been more uneven: Mexico practically flat (up 0.5%), while South America is up 8.4%. The United States registered the largest increase, 52.0%, due mainly to the additions to NPL resulting from customers linked to the energy sector.
Announcement on March 7 of the acquisition of Holvi, a Helsinki-based online banking service for companies. The deal is part of BBVA's strategy of extending its digital business portfolio to supplement the Group's digital transformation.
The number of digital and mobile customers continues to increase (up 4.4% and 7.6% over the quarter, respectively).
The Board of Directors has appointed Carlos Torres Vila as President and COO. It has also approved an organizational structure whose top priority is to boost the business and continue to grow profitably, increasing the number of customers with the focus on their satisfaction. In order to gain market share, customers and business, BBVA is committed to investing in new capabilities associated with customer experience, big data, technology and engineering, marketing and digital sales, and talent and new digital businesses. BBVA has drawn up a new Code of Conduct to adapt to social, technological and regulatory changes. It strengthens the Bank's commitment to its customers, employees and society as a whole.