Solid core revenue growth
Earnings resilience provided by a well-diversified footprint
Sound risk indicators
CET1 FL 11% target achieved in advance
Between January and September 2016, BBVA Group earned €2,797m, 64.3% more than in the same period in 2015. Excluding the impact of corporate operations and the effect of currency fluctuations, growth was 15.0%. Earnings for the third quarter stand at €965m.
Banking activity in Spain was once again strong in a difficult environment
as a result of all-time low interest rates. Net interest income registered a
2.9% decline in the cumulative figure for the year, partly due to weaker activity in the wholesale business and business with institutions. The area's earnings for the first nine months was €936m, 5.2% less than in the same period last year in business with institutions.
Real-estate activity in Spain: BBVA continued to reduce its net exposure to this sector by 13.7% year-on-year to €11,077m as of the end of September. The positive trend in the market contributed to reduce losses to €315m between January and September, a figure 24.4% lower than in the same period in 2015.
BBVA Group closed September 2016 with a fully-loaded CET1 ratio of 11.0%. This will enable the 11% fully-loaded CET1 target to be met ahead of schedule (in 2017).
Since the previous presentation of quarterly earnings in July 2016, none of the credit rating agencies have modified BBVA's rating. It therefore remains at the levels shown in the accompanying table.
(1) In addition, Moody's assigned a rating of A3 to BBVA's long-term deposits.
(1) In addition, Moody's assigned a rating of A3 to BBVA's long-term deposits.
At the close of the third quarter of 2016, BBVA Group maintains the positive trend in the variables related to credit risk management.
Credit risk has declined by 2.2% over the quarter and by 2.1% since the close of 2015. At constant exchange rates, the rates of change are –0.7% and +0.5%, respectively.
Non-performing loans, which account for 5.1% of the Group's total credit risk, have once more performed well since the start of the year. The balance declined by 2.3% over the last three months, as was the case last quarter, with Banking Activity in Spain (down 4.1%), Real-Estate Activity in Spain (down 3.4%) and Mexico (down 3.8%) being the areas mainly responsible for the decline. South America registered an increase of 1.2%, the United States of 4.9% and Turkey of 3.3%.
The Group's NPL ratio continues to improve and stands at 5.1% as of 30-Sep-2016. The coverage ratio is 72%.
The number of digital and mobile customers continues to increase (up 12% and 23% since December 2015, and up 20% and 41% in year-on-year terms, respectively), according to the latest available data.