BBVA Beats Profit Estimates in Q3, Earns €1.14 billion
The second-largest bank in Spain, BBVA (BME: BBVA) announced results today for the third quarter of 2020. The bank reported a net profit of €1.14 billion in Q3, much better than the expected amount of €773 million.
This result is 79% higher than the second-quarter results. Bank said on Friday that the Q3 net profit of €1.14 billion is 6.8% lower as compared to the same period a year ago.
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Cost containment efforts and declining operating expenses boosted operating income 13.5%, compared to the third quarter of 2019. BBVA’s gross income stood at €5.66 billion in Q3 2020, better than the estimates of €5.55 billion, a consensus forecast provided by the bank.
Net trading income (NTI) performed exceptionally well in the third quarter of 2020, with a rise of 13.3% in comparison with Q3 2019, net trading income stood at €372 million. Tier 1 capital ratio of BBVA, a key measure of bank’s financial strength from a regulator’s point of view, was increased to 11.52% by the end of September, as compared to 11.22% in June.
Commenting on the results, Onur Genc, CEO of BBVA, said: “Net attributable profit grew significantly in the third quarter compared to previous quarters. This positive performance has been the result of our resilient recurrent income, coupled with our focus on cost control and a better evolution of impairments, given the significant provisioning effort of the first half of the year.”
BBVA highlighted the impact of growth in its digital customers. The Spanish bank mentioned that the health crisis caused by COVID-19 is accelerating digitization. BBVA added more than 4 million new mobile customers between January and September this year. Bank’s total digital customers have grown 12% since December 2019, reaching 35.6 million. The number now accounts for 62% of the total customer base of the bank. BBVA also added that more customers are using bank’s mobile app for transactions.
Recently, BBVA also participated in a new pilot program to test the integration of SWIFT gpi with the existing Faster Payments Scheme infrastructure in the UK for instant payments.
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