The BBVA share

The BBVA share closed 2017 at €7.11, a cumulative gain of 10.9% since December 2016. This represents a relatively better performance than the European banking sector as a whole and than the Ibex 35.

Global economic growth held steady at around 1% quarter-on-quarter in the first nine months of 2017, and latest available indicators suggest that a this momentum continued into the final part of the year. Confidence data continues to improve, accompanied by a recovery in world trade and the industrial sector, while private consumption remains robust in developed countries. This positive trend reflects improved economic performance in all regions: in contrast to other post-financial crisis periods, there has been a global synchronous recovery.

Against this backdrop, the main stock market indices in Europe (Stoxx 50 and Euro Stoxx 50) closed the year with gains of 5.6% and 6.5% respectively. In Spain the Ibex 35 fell back slightly over the last three months, but its cumulative performance for the year has remained positive, at a gain of 7.4%. In the United States, the S&P 500 index performed very positively during the year, with a gain of 19.4% since December 2016.

BBVA share evolution

Compared with European indices (Base indice 100=31-12-2016)

In the Significant Event published on February 1, 2017, BBVA announced its intention of modifying its shareholder remuneration policy to one of a fully cash payment. This policy will be formed each year of an interim dividend (which is expected to be paid in October) and a final dividend (which will be paid out upon completion of the final year and following approval of the application of the result, foreseeably in April). These payouts will be subject to appropriate approval by the corresponding governing bodies. It is expected to be proposed for the consideration of the competent governing bodies a cash payment in a gross amount of euro 0.15 per share to be paid in April as final dividend for 2017.

Shareholder remuneration

(Euros-gross/share)

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Group information

Results

  • Generalized sustained growth in more recurrent sources of revenue in practically all geographic areas.
  • Operating expenses remain under control, leading to an improvement in the efficiency ratio in comparison with 2016.
  • Impairment losses on financial assets has been influenced by the recognition of impairment losses of €1,123m from BBVA's stake in Telefónica, S.A.
  • As a result, the net attributable profit was €3,519m. Without taking into account the impacts of the impairment losses in Telefónica in 2017 and the so-called "mortgage floor clauses" in 2016, the net attributable profit was up year-on-year by 19.7%.

Net attributable profit (Million euros)

Net attributable profit breakdown(1) (Percentage. 2017)

(1) Excludes the Corporate Center.

(2) Includes the areas Banking activity in Spain and Non Core Real Estate.

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Balance sheet and business activity

  • The year-on-year comparison of the Group's balance sheet and business activity has been affected by the operations underway (sales of BBVA Chile and the real-estate business in Spain), which as of 31-Dec-2017 were reclassified as non-current assets and liabilities held for sale. Without taking into account the said reclassification (figures in comparable terms with respect to previous periods):
    • Loans and advances to customers (gross) continue to increase in emerging geographies but decline in Spain. There has been a slight recovery in the United States since the second half of 2017.
    • Non-performing loans continue to improve favorably.
    • Deposits from customers have performed particularly well in the more liquid and lower-cost items.
    • There was an increase in off-balance-sheet funds, mainly in mutual funds.

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Solvency

  • The capital position is above regulatory requirements and in line with the target established for the fully-loaded CET1 of 11%. The recognition of the impairment losses from Telefónica mentioned above does not negatively affect the Group's solvency, as they are deducted from both equity and CET1.

Capital and leverage ratios (Percentage as of 31-12-17)



(1) Includes update of the calculation on Structural FX RWA, pending confirmation by ECB.

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Risk management

  • Good performance of the main credit risk metrics: as of 31-Dec-2017, the NPL ratio closed at 4.4%, the NPL coverage ratio at 65% and the cumulative cost of risk at 0.87%.

NPL and coverage ratios (Percentage)

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Transformation

  • The Group's digital and mobile customer base and digital sales continue to increase in all the geographic areas where BBVA operates.

Digital and mobile customers (Millions)



Other matters of interest

  • It is expected to be proposed for the consideration of the competent governing bodies a cash payment in a gross amount of euro 0.15 per share to be paid in April as final dividend for 2017.

Results

  • Good performance of gross income, thanks to a positive trend in more recurring revenue (particularly income from fees and commissions) and NTI.
  • Operating expenses under control.
  • This has led to a further improvement in the efficiency ratio.
  • Impairment losses on financial assets slightly below the figure for the first quarter of 2016.
  • Inclusion of €177m restructuring costs in provisions.
  • As a result, the net attributable profit in the first quarter of 2017 was €1,199m, 69.0% higher than in the same quarter last year and 76.8% higher than posted in the fourth quarter of 2016

Net attributable profit (Million euros)

Net attributable profit breakdown(1) (Percentage 4Q 2017)

(1) Excludes the Corporate Center.

(2) Includes the areas Banking activity in Spain and Non Core Real Estate.

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Business areas

(Click on each country to see information)

SPAIN

Highlights

  • Deleveraging and increase in more liquid resources and off -balance-sheet continue.
  • Good performance of net fees and commissions.
  • Reduction of operating expenses.
  • Solid asset-quality indicators.

THE UNITED STATES

Highlights

  • Lending remained stable over the year.
  • Increase in deposits from customers.
  • Positive performance of net interest income and net fees and commissions.
  • Solid risk indicators.
  • Higher income tax charge due to the tax reform approved at the end of 2017.

MEXICO

Highlights

  • Good performance in activity.
  • Positive trend in gross income.
  • Costs continue to increase below gross income, and double-digit year-on-year growth in net attributable profit.
  • Stable asset quality indicators.

TURKEY

Highlights

  • Solid growth in activity.
  • Very positive growth in more recurring revenue items.
  • Operating expenses increase below the level of inflation and the rate of increase in gross income.
  • Risk indicators affected by more additions to NPL from certain wholesale loans that are practically fully provisioned.

SOUTH AMERICA

Highlights

  • Activity continues to grow at a good pace.
  • More recurring revenue items performing very well.
  • Expenses grow below gross income.
  • Stable risk indicators.

REST OF EURASIA

Highlights

  • Positive trend in lending in Europe.
  • Trend in deposits strongly influenced by the negative interest-rate environment.
  • Earnings down due to lower revenues, despite the good performance of expenses and loan-loss provisions.
  • Good performance of asset quality indicators.

Contact

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902 200 902
912 24 98 21
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Shareholder Office
C/ Azul, 4 – 28050 Madrid
Contact email
accionistas@bbva.com

Quartely report 4Q 2017

Additional information

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