BBVA BBVA Bilbao Vizcaya Argentaria SA

By Xavier Fontdegloria

Banco Bilbao Vizcaya Argentaria SA on Friday reported a higher-than-expected net profit for the second quarter, driven by an improvement in its business in Mexico and South America.

The Spanish lender posted a net profit of 1.68 billion euros ($1.71 billion) from April to June, more than doubling the EUR701 million reported the same quarter a year earlier. The figure is well above analysts' expectations, who anticipated a profit of EUR948 million for the second quarter, according to a consensus forecast provided by the bank.

The marked increase in profit was partly offset by a one-off impact of EUR201 million for the purchase of offices in Spain and an accounting adjustment in Turkey due to hyperinflation.

BBVA's gross income rose 19% on year to EUR6.09 billion, the bank said. Net interest income--the difference between what lenders earn from loans and pay for deposits--grew 31% on year to EUR4.6 billion, driven by sharp increases in Mexico, Turkey, and South America. Net fees and commissions rose 20% EUR1.41 billion.

Expenses grew in the second quarter compared to a year earlier due to inflationary pressures in all countries where the bank operates, albeit at a lesser pace than revenue. Operating expenses increased 15% to EUR2.63 billion, BBVA said.

The bank's fully-loaded common equity Tier 1 ratio, a key measure of resilience, fell to 12.45% in June from 12.70% in March. This is above the bank's target range of 11.5% to 12%.

"In the second quarter of 2022, we achieved strong results thanks to the positive performance of revenues, driven by the growth in activity and a good evolution of risk indicators," Chief Executive Onur Genc said in a statement.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

July 29, 2022 02:38 ET (06:38 GMT)

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