Other information: Corporate & Investment Banking
Highlights
- Lending activity balances at pre-pandemic levels and reduced customer funds.
- Excellent evolution of NTIs and efficiency.
- Leadership position in green and sustainable loans.
- Net attributable profit favored by double-digit growth in all margins and the significant reduction in the impairment on financial assets line.
Business activity (1)
(YEAR-TO-DATE-CHANGE)
(1) Excluding repos.
Gross income/ATAs
(Percentage. Constant exchange rates)
Operating income
(Millions of euros at constant exchange rates)
(1) At current exchange rates: +34.7%.
Net attributable profit
(Millions of euros at constant exchange rates)
(1) At current exchange rates: +99.4%.
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement | 1Q21 | ∆% | ∆% (1) | 1Q20 |
|---|---|---|---|---|
| Net interest income | 381 | 6.6 | 20.7 | 358 |
| Net fees and commissions | 192 | 4.2 | 15.3 | 184 |
| Net trading income | 273 | 58.8 | 80.5 | 172 |
| Other operating income and expenses | (11) | (7.5) | 9.4 | (12) |
| Gross income | 835 | 19.0 | 33.9 | 702 |
| Operating expenses | (232) | (8.8) | (2.7) | (254) |
| Personnel expenses | (106) | (11.5) | (7.1) | (120) |
| Other administrative expenses | (98) | (5.8) | 3.9 | (104) |
| Depreciation | (27) | (8.5) | (6.7) | (30) |
| Operating income | 604 | 34.7 | 56.4 | 448 |
| Impairment on financial assets not measured at fair value through profit or loss | (43) | (79.3) | (73.8) | (207) |
| Provisions or reversal of provisions and other results | (22) | n.s. | n.s. | 7 |
| Profit/(loss) before tax | 539 | 116.7 | 133.8 | 249 |
| Income tax | (138) | 120.8 | 138.3 | (63) |
| Profit/(loss) for the year | 401 | 115.3 | 132.3 | 186 |
| Non-controlling interests | (78) | 221.3 | 265.9 | (24) |
| Net attributable profit/(loss) | 323 | 99.4 | 113.5 | 162 |
- (1) Figures at constant exchange rates.
| Balance sheets | 31-03-21 | ∆% | ∆% (1) | 31-12-20 |
|---|---|---|---|---|
| Cash, cash balances at central banks and other demand deposits | 4,757 | (36.5) | (38.7) | 7,491 |
| Financial assets designated at fair value | 105,244 | (4.5) | (4.6) | 110,217 |
| Of which Loans and advances | 34,706 | 11.3 | 11.4 | 31,183 |
| Financial assets at amortized cost | 68,970 | (2.9) | (2.7) | 71,031 |
| Of which loans and advances to customers | 58,027 | (2.0) | (1.8) | 59,225 |
| Inter-area positions | - | - | - | - |
| Tangible assets | 45 | (8.9) | (9.2) | 50 |
| Other assets | 1,215 | 44.1 | 46.1 | 843 |
| Total assets/liabilities and equity | 180,230 | (5.0) | (5.1) | 189,632 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 83,852 | (4.2) | (4.4) | 87,508 |
| Deposits from central banks and credit institutions | 14,230 | (10.8) | (11.0) | 15,958 |
| Deposits from customers | 36,489 | (15.1) | (15.2) | 42,966 |
| Debt certificates | 2,194 | 4.7 | 5.4 | 2,096 |
| Inter-area positions | 33,169 | 9.8 | 9.9 | 30,218 |
| Other liabilities | 1,579 | (25.5) | (27.0) | 2,121 |
| Economic capital allocated | 8,717 | (0.6) | (0.0) | 8,766 |
- (1) Figures at constant exchange rates.
| Relevant business indicators | 31-03-21 | ∆% | ∆% (1) | 31-12-20 |
|---|---|---|---|---|
| Performing loans and advances to customers under management (2) | 57,737 | 0.1 | 0.3 | 57,704 |
| Non-performing loans | 1,333 | 4.6 | 10.0 | 1,275 |
| Customer deposits under management (2) | 35,881 | (15.2) | (15.4) | 42,313 |
| Off-balance sheet funds (3) | 1,097 | 6.5 | 9.2 | 1,030 |
| Efficiency ratio (%) | 27.7 | 31.4 |
- (1) Figures at constant exchange rates.
- (2) Excluding repos.
- (3) Includes mutual funds, pension funds and other off-balance sheet funds.
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.
Activity
The most relevant aspects related to the area's activity during the first quarter of 2021 were:
- Lending activity (performing loans under management) stood at pre-pandemic levels and increased 0.3% compared to the end of December 2020. By geographical areas, Europe (excluding Spain), Turkey, Asia and Mexico showed positive performance in the quarter.
- Customer funds fell in all geographic areas, resulting in a 14.8% drop in balances for CIB as a whole in the first three months of 2021.
During the first quarter of 2021, and within the strategic priority of "helping our customers transition towards a sustainable future," it is worth noting that BBVA CIB has participated in a total of 59 operations, 15 in the area of bond intermediation and 44 in the area of sustainable financing. Among the latter, it is worth highlighting 3 project finance and 14 corporate financing operations linked to achieving certain environmental and social indicators (KPI-linked) and/or linked to the ESG (Environmental, Social and Governance: rating ESG-linked).
Results
CIB generated a net attributable profit of €323m in the first quarter of 2021, up 113.5% from the previous year, thanks to revenue growth in all geographic areas, cost control and lower provisions for impairment on financial assets, which increased significantly in March 2020, mainly due to the worsening macroeconomic scenario resulting from COVID-19. The most relevant aspects of the year-on-year changes in the income statement for Corporate & Investment Banking are summarized below:
- Net interest income sustained double-digit growth (up 20.7%) due to the performance of lending activity, with higher volumes and an improvement in profitability per transaction due to the sales effort.
- Double-digit growth was also observed in net fees and commissions (up 15.3%), mainly due to the performance of Global Markets and transactional banking. By geographic areas, all saw positive performance, excluding Rest of Business.
- NTI showed excellent performance, in a year-on-year comparison that benefited from market turbulence due to the pandemic outbreak.
- The efficiency ratio improved to 27.7%, due to both the growth of gross income (up 33.9%) and the good performance of operating expenses, which fell 2.7%, thanks to the active management of personnel costs and the focus on the implementation of discretionary cost control.
- Provisions for impairment on financial assets were significantly lower than those made in the same period last year, mainly due to the provisions relating to COVID-19 made in the first quarter of 2020.