BBVA joined Sabadell, Bankinter and Unicaja yesterday after presenting an improvement in profit in the first quarter of the year. In the absence of knowing today the accounts of Santander and CaixaBank, their results serve to confirm what not all analysts predicted at the beginning of the year: the banks will continue to enjoy a record level of profits in 2024.
In the first quarter of the year, BBVA’s profit stood at 2.2 billion euros, 19% more than in the same period of the previous year. Both interest margins – the difference between the money received for loans and the money paid for deposits – and commissions rose strongly. The improvement, moreover, was particularly appreciable in Spain.
For this year, the bank hopes to increase profits “to double digits”, explained yesterday the CEO, Onur Genç, at the press conference to present the results. This means that the profit will reach 8,800 million euros and will exceed the record of 2023. If that were not enough, for 2025 the expectations are even better. “I foresee 2025 even better than 2024 in terms of profit and growth,” added the first executive.
The gains mainly respond to the scenario of high interest rates, which have taken the banks at the best time. They are not only healthy after years of adjustments, but also out of danger of turbulence thanks to the good performance of the economy and the low delinquency of customers. They have high liquidity after years of expansionary ECB policy and can enjoy more income as a result of the rise in mortgage prices without the need to raise the remuneration of deposits.
BBVA’s interest margin reached 6,512 million in the first quarter, after growing by 25%, while net commissions increased by 37% and stood at 1,887 million.
In Spain, the profit was 725 million, 37% higher than in the same period of the previous year, once assuming a cost of 285 million euros for the annual impact of the extraordinary tax on banking. The default rate in the country was 4.11%, above the average of the banking sector reported by the Bank of Spain.
Mexico, on the other hand, with a 3.6% improvement in the result, achieved a record profit of 1,441 million euros and is consolidated as the region that contributes the most, also ahead of Turkey, where the profit fell by 48%, up to 144 million euros. During the first quarter, the bank assumed a deterioration of financial assets 41% higher than the previous year.
Genç did not want to enter into evaluations about Pedro Sánchez’s attempt to leave the presidency of the Central Government. He did assure that “what Spain needs is growth” and that “growth does not like uncertainty, in general”.
