Rest of Business
Highlights
- Increase in lending activity and customer funds in the first quarter of 2022
- Good performance of net interest income and controlled expenses
- Solid risk indicators
- Increased performance in Europe and the New York branch
Business activity (1)
(VARIATION AT CONSTANT EXCHANGE RATES COMPARED TO
31-12-21)
(1) Excluding repos.
Net interest income / AVERAGE TOTAL ASSETS
(Percentage. Constant exchange rates)
Operating income
(Millions of euros at constant exchange rates)
(1) At current exchange rates: -24.6%
Net attributable profit (LOSS)
(Millions of euros at constant exchange rates)
(1) At current exchange rates: -3.2%
Financial statements and relevant business indicators (Millions of euros and percentage)
| Income statement | 1Q22 | ∆% | ∆% (1) | 1Q21 (2) |
|---|---|---|---|---|
| Net interest income | 75 | 3.1 | 1.6 | 73 |
| Net fees and commissions | 56 | (21.2) | (24.1) | 71 |
| Net trading income | 68 | (13.2) | (15.0) | 78 |
| Other operating income and expenses | 3 | (69.6) | (71.6) | 8 |
| Gross income | 202 | (12.6) | (14.8) | 231 |
| Operating expenses | (115) | (0.5) | (3.7) | (115) |
| Personnel expenses | (60) | (6.1) | (9.6) | (64) |
| Other administrative expenses | (49) | 6.1 | 3.5 | (46) |
| Depreciation | (5) | 9.9 | 8.0 | (5) |
| Operating income | 87 | (24.6) | (26.0) | 115 |
| Impaiment on financial assets not measured at fair value through profit or loss | 7 | n.s. | 214.1 | 2 |
| Provisions or reversal of provisions and other results | 10 | n.s. | n.s. | (12) |
| Profit (loss) before tax | 104 | (0.6) | (2.9) | 105 |
| Income tax | (23) | 9.9 | 7.0 | (21) |
| Profit (loss) for the period | 81 | (3.2) | (5.4) | 84 |
| Non-controlling interests | - | - | - | - |
| Net attributable profit (loss) | 81 | (3.2) | (5.4) | 84 |
- (1) At constant exchange rates.
- (2) Restated balances. For more information, please refer to the “Business Areas” section.
| Balance sheets | 31-03-22 | ∆% | ∆% (1) | 31-12-21 |
|---|---|---|---|---|
| Cash, cash balances at central banks and other demand deposits | 3,832 | (3.5) | (5.3) | 3,970 |
| Financial assets designated at fair value | 8,584 | 51.1 | 48.3 | 5,682 |
| Of which: Loans and advances | 7,589 | 61.8 | 58.6 | 4,691 |
| Financial assets at amortized cost | 34,732 | 14.6 | 14.0 | 30,315 |
| Of which: Loans and advances to customers | 31,495 | 16.8 | 16.2 | 26,965 |
| Inter-area positions | - | - | - | - |
| Tangible assets | 79 | 13.7 | 13.4 | 70 |
| Other assets | 366 | 25.7 | 24.8 | 291 |
| Total assets/liabilities and equity | 47,594 | 18.0 | 17.1 | 40,328 |
| Financial liabilities held for trading and designated at fair value through profit or loss | 7,913 | 56.4 | 53.3 | 5,060 |
| Deposits from central banks and credit institutions | 1,842 | 7.8 | 6.6 | 1,709 |
| Deposits from customers | 6,650 | 6.1 | 5.4 | 6,266 |
| Debt certificates | 1,348 | 15.6 | 15.0 | 1,166 |
| Inter-area positions | 25,226 | 14.2 | 13.6 | 22,085 |
| Other liabilities | 898 | 18.9 | 18.1 | 755 |
| Economic capital allocated | 3,717 | 13.1 | 12.4 | 3,287 |
| Relevant business indicators | 31-03-22 | ∆% | ∆% (1) | 31-12-21 |
|---|---|---|---|---|
| Performing loans and advances to customers under management (2) | 31,531 | 16.8 | 16.2 | 27,000 |
| Non-performing loans | 249 | (4.5) | (4.5) | 261 |
| Customer deposits under management (2) | 6,650 | 6.1 | 5.4 | 6,266 |
| Off-balance sheet funds (3) | 581 | (2.7) | (2.7) | 597 |
| Risk-weighted assets | 31,607 | 7.9 | 7.3 | 29,280 |
| Efficiency ratio (%) | 56.9 | 58.4 | ||
| NPL ratio (%) | 0.6 | 0.7 | ||
| NPL coverage ratio (%) | 116 | 116 | ||
| Cost of risk (%) | (0.10) | (0.11) |
(1) At constant exchange rates.
(2) Excluding repos.
(3) Includes pension funds.
Unless expressly stated otherwise, all the comments below on rates of change, for both activity and results, 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. Comments that refer to Europe exclude Spain.
Activity
The most relevant aspects of the activity of Rest of Business of BBVA Group between January and March 2022 were:
- Lending activity (performing loans under management) registered an increase (+16.2%), due to a favorable performance of BBVA's branches located in Europe, Asia and New York.
- Regarding credit risk indicators, the NPL ratio stood at 0.6%, 11 basis points below the end of December 2021 due to an increase in activity combined with a decrease in non-performing loans. The NPL coverage ratio improved by 40 basis points, remaining at 116%, the same level as at the end of the previous year.
- Customer funds under management increased by 4.7% in the quarter due to an increase in deposits from wholesale customers in the New York branch.
Results
The most significant aspects of the year-on-year evolution in the area's income statement at the end of March 2022 are the following:
- The net interest income showed a variation of +1.6% compared to the same period of the previous year, with a positive performance in Europe and Asia.
- Net commissions fell by -24.1% compared to the end of March 2021, due to lower issuance and advisory fees in Asia and, in particular, due to lower contribution from BBVA Securities, the Group's broker-dealer in the United States.
- The NTI line registered a variation of -15.0% year-on-year mainly driven by the lower results of Global Markets in Europe, affected by the instability of the current context.
- Year-on-year decrease in operating expenses (-3.7%) due to lower expenses recorded by BBVA Securities.
- The impairment on financial assets line closed March 2022 with a reversal of €7m, which positively compares against the reversal of €2m recorded twelve months earlier, consequence of lower requirements in Europe.
- As a result, the area's cumulative net attributable profit between January and March 2022 was €81m (-5.4% year-on-year).