Other information: Corporate & Investment Banking
Highlights
- Good performance of customer activity, which is reflected in net interest income and fees and commissions.
- Excellent performance of NTI.
- Leadership position in green and sustainable loans.
- Net attributable profit affected by the significant increase in the impairment on financial assets line.
Business activity (1)
(Year-on-year change at constant exchange rates.
Data as of 30-09-20)
(1) Excluding repos.
Gross income/ATAs
(Percentage. Constant exchange rates)
Operating income
(Millions of euros at constant exchange rates)
(1) At current exchange rate: +18.9%.
Net attributable profit
(Millions of euros at constant exchange rates)
(1) At current exchange rate: -10.1%.
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement | Jan.-Sep. 20 | ∆% | ∆% (1) | Jan.-Sep. 19 |
|---|---|---|---|---|
| Net interest income | 1,192 | 6.3 | 17.7 | 1,121 |
| Net fees and commissions | 614 | 12.6 | 21.1 | 545 |
| Net trading income | 621 | 8.3 | 17.5 | 574 |
| Other operating income and expenses | (33) | (21.4) | (7.9) | (42) |
| Gross income | 2,394 | 8.9 | 19.0 | 2,198 |
| Operating expenses | (720) | (8.8) | (4.4) | (790) |
| Personnel expenses | (295) | (16.7) | (13.8) | (354) |
| Other administrative expenses | (336) | (1.5) | 5.5 | (341) |
| Depreciation | (90) | (5.7) | (3.7) | (95) |
| Operating income | 1,673 | 18.9 | 33.0 | 1,408 |
| Impairment on financial assets not measured at fair value through profit or loss | (455) | 192.4 | 232.4 | (156) |
| Provisions or reversal of provisions and other results | (63) | n.s. | n.s. | 25 |
| Profit/(loss) before tax | 1,155 | (9.6) | 0.8 | 1,278 |
| Income tax | (317) | (1.2) | 10.7 | (320) |
| Profit/(loss) for the year | 839 | (12.4) | (2.5) | 957 |
| Non-controlling interests | (171) | (20.3) | (7.8) | (215) |
| Net attributable profit | 668 | (10.1) | (1.1) | 743 |
- (1) Figures at constant exchange rates.
| Balance sheets | 30-09-20 | ∆% | ∆% (1) | 31-12-19 |
|---|---|---|---|---|
| Cash, cash balances at central banks and other demand deposits | 5,903 | 68.0 | 78.1 | 3,513 |
| Financial assets designated at fair value | 111,351 | 5.7 | 9.0 | 105,386 |
| Of which Loans and advances | 34,576 | 1.2 | 1.7 | 34,153 |
| Financial assets at amortized cost | 76,205 | 0.0 | 8.6 | 76,169 |
| Of which loans and advances to customers | 66,011 | 0.1 | 9.1 | 65,915 |
| Inter-area positions | - | - | - | - |
| Tangible assets | 35 | (44.9) | (39.7) | 63 |
| Other assets | 1,227 | (51.1) | (48.5) | 2,506 |
| Total assets/liabilities and equity | 194,720 | 3.8 | 9.4 | 187,637 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 95,960 | 4.7 | 7.7 | 91,657 |
| Deposits from central banks and credit institutions | 12,193 | (21.0) | (19.4) | 15,426 |
| Deposits from customers | 44,000 | 12.3 | 24.2 | 39,166 |
| Debt certificates | 1,861 | (29.1) | (25.5) | 2,625 |
| Inter-area positions | 31,523 | 0.7 | 8.9 | 31,316 |
| Other liabilities | 4,710 | 59.2 | 66.5 | 2,959 |
| Economic capital allocated | 4,474 | (0.3) | 8.9 | 4,487 |
- (1) Figures at constant exchange rates.
| Relevant business indicators | 30-09-20 | ∆% | ∆% (1) | 31-12-19 |
|---|---|---|---|---|
| Performing loans and advances to customers under management (2) | 65,425 | (0.1) | 8.7 | 65,509 |
| Non-performing loans | 1,063 | (12.2) | 8.2 | 1,211 |
| Customer deposits under management (3) | 43,408 | 10.9 | 22.6 | 39,150 |
| Off-balance sheet funds (4) | 1,096 | 5.7 | 30.0 | 1,037 |
| Efficiency ratio (%) | 30.1 | 35.2 |
- (1) Figures at constant exchange rates.
- (2) Excluding repos.
- (3) Includes mutual funds, pension funds and other off-balance sheet funds.
Activity
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and profit and loss, will be given at constant exchange rates. These rates, together with the changes at current exchange rates, can be found in the attached tables of the financial statements and relevant business indicators.
The most relevant aspects related to the area's activity between January and September 2020 were:
- Lending activity (performing loans under management) continued to grow (up 8.7% between January and September 2020) showing a positive performance in most of the geographical areas, with Rest of Eurasia, Turkey and México standing out, as a result of the increased drawdown of credit facilities by customers in the second quarter of the year, to deal with the situation driven by COVID-19 from a position of more comfortable liquidity.
- Customer funds also recorded a double-digit increase of 22.8% between January and September 2020, mainly as a result of the placement of liquidity in the bank. By geographical area, Spain and the United States stood out.
During the first nine months of 2020, and within the strategic priority of "helping our clients transition toward a sustainable future", it is worth mentioning that BBVA participates in a total of 32 transactions within the field of sustainable financing, leading 16 of them as a sustainable coordinator.
Results
CIB generated a cumulative net attributable profit of €668m between January and September 2020; a 1.1% less in terms of the year-on-year comparison, mainly due to the increase in the impairment on financial assets. The most relevant aspects on the year-on-year comparison in the income statement for Corporate & Investment Banking are summarized below:
- Excellent evolution of net interest income (up 17.7%) due to the performance of lending activity, with higher volumes and an improvement in profitability per transaction due to the sales effort.
- Double-digit increase in net fees and commissions (up 21.1%), supported by transactional business and new funding operations in most of the geographical areas, in particular, the United States (bond activity) and Turkey.
- NTI recorded 17.5% year-on-year growth, with double-digit growth in all geographical areas (except Spain, affected by dividend sharing restrictions introduced after the beginning of the pandemic, and the United States), due to the good performance of customer activity and positive market volatility management.
- The efficiency ratio improved to 30.1%, due to both the growth of gross income (up 19.0%) and the good performance of operating expenses, which fell by 4.4%, supported by the containment plans implemented by the area as well as by savings in some discretionary expenses following the pandemic.
- Provisions for impairment on financial assets increased significantly due to provisions related to COVID-19, mainly recognized in the first quarter of the year, which include a deterioration in the macroeconomic scenario.