BBVA Beats Expectations for 3Q Profit; Capital Level Rises -- Update
October 27 2016 - 5:06AM
Dow Jones News
By Jeannette Neumann
MADRID--Banco Bilbao Vizcaya Argentaria SA (BBVA.MC) said
Thursday it boosted its capital level more than investors had been
expecting, helping to send the Spanish bank's shares up.
Spain's No. 2 bank by market value said its capital ratio
increased to 11% at the end of September from 10.71% in the second
quarter, under international regulations known as "fully loaded"
Basel III criteria. That was ahead of schedule. BBVA had previously
said it would reach 11% at some point in 2017.
BBVA reported an increase in its capital level in the third
quarter despite the negative impact of a sovereign rating downgrade
this year for Turkey, where BBVA owns a major stake in a bank. Some
analysts had expected the Turkish downgrade to drag BBVA's capital
ratio down.
While BBVA's capital level remains below many European peers,
the increase was a welcome surprise and shares were up around 0.8%
in morning trading in Madrid.
BBVA said it swung to a third-quarter net profit of EUR965
million ($1.05 billion) from a year-earlier loss of EUR1.06
billion, when the bank took an impairment charge on its investment
in Turkiye Garanti Bankasi AS. BBVA owns 39.9% of the Turkish bank,
one of the country's largest. At the time, BBVA said without the
writedown, it would have reported a net profit of EUR784
million.
Thursday's net profit figures beat analysts estimates of EUR862
million in the third quarter, according to a poll by data provider
FactSet.
BBVA said net interest income fell to EUR4.3 billion from EUR4.5
billion a year earlier. That also beat analysts' estimates.
Net interest income, a key profit driver for retail banks, is
the difference between what lenders earn from loans and pay for
deposits.
Write to Jeannette Neumann at
jeannette.neumann@wsj.com<mailto:jeannette.neumann@wsj.com>
(END) Dow Jones Newswires
October 27, 2016 04:51 ET (08:51 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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