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MarketScreener Homepage  >  Equities  >  Bolsa de Madrid  >  Banco Bilbao Vizcaya Argentaria, S.A.    BBVA   ES0113211835

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

(BBVA)
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Spain's BBVA swings to net loss on U.S. writedown and COVID-19 provisions

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04/30/2020 | 05:05am EDT
The headquarters of the Spanish bank BBVA are seen in Madrid

By Jesús Aguado

Spain's second biggest bank BBVA reported a loss of 1.79 billion euros ($1.94 billion) in the first quarter after a writedown in the United States and provisions taken against the potential fallout from the coronavirus outbreak.

Banks worldwide have been taking measures to offset risk amid the crisis. On Thursday, BBVA's fellow Spanish lenders Caixabank and Sabadell also reported steep profit declines due to provisions taken against the pandemic.

BBVA said the goodwill impairment of 2.08 billion euros in the United States was mainly due to the economic damage of the COVID-19 pandemic though it did not affect its capital or liquidity.

The bank also set aside 1.43 billion euros in provisions to anticipate the coronavirus impact elsewhere in its business and BBVA's chief executive officer, Onur Genç, told analysts during a call that it could book additional provisions if the crisis worsened.

BBVA's fully loaded core tier-1 capital ratio also took a hit from front-loading the provisions and fell 90 basis points in the quarter to 10.84% at end-March, prompting the lender to revise downwards its capital targets to between 10.84% and 11.34% from a previous target of between 11.5% and 12%.

Its main competitor in Spain, Santander, which set aside 1.6 billion euros to cover expected loan losses caused by the COVID-19, reported a comparable core-tier 1 capital ratio of 11.33%.

Without taking into account the impairment on its U.S. business, BBVA's profit fell 75.3%, the lender said.

DIVIDEND ON HOLD

On Thursday, Caixabank's net profit fell over 88% after it set aside 400 million euros to cover expected credit losses, while Sabadell booked 213 million euros in provisions against the pandemic, triggering a 64% slump in net profit.

Shares in BBVA and Caixabank fell 2.6%, while Sabadell and Caixabank were up 3.4% and 1.6%, respectively.

BBVA said it would not pay any dividend against 2020 results until uncertainties over the coronavirus disappear.

BBVA was the only major Spanish bank that had so far not modified or cancelled its shareholder remuneration policies.

The European Central Bank had told lenders to skip dividend payments and share buybacks until October at the earliest and use profits to support the economy.

Overall, BBVA's net interest income (NII), a measure of earnings on loans minus deposit costs, was 4.56 billion euros, up more than 3.6% from the same quarter last year boosted by lending growth in its Latin American business and Turkey. Analysts expected NII to come in at 4.42 billion euros.

However in Spain, where it booked a loss of 141 million euros on loan losses and credit card provisions, lending income remained under pressure due to low interest rates in the euro zone.

At its home market, BBVA's NII rose 1.6% against the same period a year ago but fell 3.6% against the previous quarter.

At Caixabank, lending income declined 3% to 1.2 billion euros, while Sabadell's NII fell 1.8% to 884 million euros. Both figures were in line with analysts' forecasts.

(Reporting by Jesús Aguado, additional reporting by Inti Landauro, Joan Faus and Emma Pinedo; Editing by Sonya Dowsett and Andrew Cawthorne)

Stocks mentioned in the article
ChangeLast1st jan.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. -3.32% 3.119 End-of-day quote.-37.41%
BANCO DE SABADELL, S.A. -4.39% 0.3157 End-of-day quote.-69.64%
BANCO SANTANDER, S.A. -2.27% 2.216 End-of-day quote.-40.59%
CAIXABANK, S.A. -1.96% 1.9755 End-of-day quote.-29.40%
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Financials
Sales 2020 23 108 M 26 106 M 26 106 M
Net income 2020 828 M 936 M 936 M
Net Debt 2020 - - -
P/E ratio 2020 42,0x
Yield 2020 1,27%
Capitalization 20 763 M 23 498 M 23 457 M
EV / Sales 2019
Capi. / Sales 2020 0,90x
Nbr of Employees 126 041
Free-Float 99,8%
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Technical analysis trends BANCO BILBAO VIZCAYA ARGEN
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TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 26
Average target price 3,38 €
Last Close Price 3,12 €
Spread / Highest target 50,7%
Spread / Average Target 8,35%
Spread / Lowest Target -36,7%
EPS Revisions
Managers
NameTitle
Onur Genç Chief Executive Officer & Director
Carlos Torres Vila Group Executive Chairman
Jaime Saenz de Tejada Pulido Chief Financial Officer & Global Head-Finance
Carlos Loring Martínez de Irujo External Director
José Maldonado Ramos External Director
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