BBVA earned a total of €5.961 million to September, up 24.3% from the same period the previous year (and up 37.9% in constant euro terms) due to higher interest margins and fees amid rising rates. Of this amount, €2,083 million was generated in the third quarter, up 13.4% year-on-year. This momentum came primarily from business in Spain and Mexico.. In both markets they recorded significant growth in their profits and accounted for 84% of the group’s total profits.

Earnings per share rose 17.8%, thanks to share repurchase programs that the bank has already implemented. BBVA maintains a strong capital position with a fully loaded CET1 ratio of 12.73% and a ROTE of 17%.

Interest margin an improvement of 36.5% between January and September, up to 17.843 million euros. Growth in all areas of the business is noticeable due to improved clientele differentiation in core business areas and increased volumes of managed investments. The good evolution of Mexico, Spain and South America stands out.

Net commissions or revenues from the provision of services reached 4.594 million euros.17.5% more than a year earlier, with positive dynamics in all areas of business, except Spain. The amount of net interest and commission margin, which represents the typical income of the banking business, amounted to 22,437 million euros in the first nine months of 2023, representing an increase of 32.1% compared to the same period last year. In turn, the result of financial operations (ROF) contributed €1,430 million to income, and €1,763 million was deducted from other operating income and expenses.

The result of all of the above, Gross profit amounted to 22.104 million euros., which represents an increase of 31.8% compared to the same period last year. High inflation rates recorded in the countries where the Group operates (on average 18.1% over the last 12 months) led to an increase in operating expenses by 22.3% for the period, to EUR 9,241 million. However, strong gross margins enabled us to improve our efficiency ratio, which fell 328 basis points compared to the first nine months of 2022 to reach 41.8%.

Following from all of the above, Net profit increased by 39.7% year on year to €12,863 million.. The €12 billion mark has been exceeded for the first time. In the first nine months of the year, EUR 3,203 million was allocated for impairment of financial assets, an increase of 35.5% compared to the same period of the previous year, mainly due to increased provisioning requirements in South America and Mexico, in the context of more high interest rates and growth in the most profitable segments. Based on the latter, the cost of risk accumulated over the first nine months of the year rose 7 basis points from June to 1.11%. The default rate fell slightly during the quarter, reaching 3.3%, and the coverage rate also decreased slightly to 79%.

Business areas

IN Spain, lending investment fell 1.8% year over year, mainly due to the amortization of mortgages by some customers and the deleveraging of large companies in a higher interest rate environment. However, dynamism in consumer loans and cards, the public sector and small and medium-sized businesses softened the decline. Meanwhile, customer funds increased 2.2% year-on-year, driven by growth in off-balance sheet balances.

The result attributed between January and September reached the figure 2.110 million euros (+61.9%) after the effect of the emergency bank tax (215 million euros in 2023) is neutralized. Net interest income growth (+50.8%) increased gross margin by 26.3% and enabled a significant improvement in efficiency to 39.4% (-695 basis points over the trailing 12 months).

In terms of risk indicators, the default rate remained stable at around 4% in the quarter, while the accumulated cost of risk increased slightly, in line with expectations, remaining low at 0.31%. The coverage level was 55%.

IN MexicoBBVA emphasizes dynamism in all business segments, which led to an 11.2% year-on-year increase in loan investment. Customer funds also improved, increasing by 11.7%, mainly due to an increase in off-balance sheet funds.

The corresponding result reached 3.987 million euros. (+22.3% year-on-year), supported by notable growth in net interest income (+23.3%), supported by both increased activity and customer differentials. Strong gross margins led to a further improvement in the efficiency ratio to 30.3% (-158 basis points last year).

The default rate was 2.6% (+8 basis points from the previous quarter) and the coverage rate was 127%. Accumulated cost of risk rose to 2.94% (+8 basis points from end-June), in line with expectations, thanks in part to strong growth in its most profitable segments, such as consumer and cards.

IN Türkiyededollarization of the balance sheet continued; Loan investments in national currency grew by 63.8% year on year, which significantly exceeds the rate of the portfolio in dollars (+5.3% year on year). Customer deposits in Turkish lira also increased by 126.4% year on year. Between January and September, Türkiye achieved a corresponding result of 367 million euros.. Among the risk indicators, the decrease in the default rate stands out, which continued to decline in the third quarter and amounted to 3.8%. The cost of risk also improved, dropping to 0.26%, and the coverage level increased to 100%.

IN South America, credit investment grew 10% year on year. There has been noticeable growth in the retail segments in the region’s main countries, as well as in the wholesale portfolios in both Argentina and Colombia. In terms of resources, the overall growth of time deposits in the region, as well as demand deposits and investment funds in Argentina, stands out. South America produced a combined relative result of €496 million. for the first nine months of 2023 (+20.5% year-on-year), supported by strong recurring revenue performance. Risk indicators deteriorated slightly due to slower economic growth. The default rate was 4.6%; coverage at 93% and accumulated cost of risk at 2.5%.