Bankinter | The bank beats expectations with a net attributable profit of €2,433 million in Q4 2024 (up 18.0% against €2,243 million estimated) thanks to the good momentum of the business in Spain and improves shareholder remuneration with a €993 million share buyback plan. Key figures for 2024 compared to the consensus forecast (Bloomberg): Net interest income: €25,267 million (up 9.0% versus €24,780 million estimated); Gross income: €34,481 million (+20.0% versus €34,540 million estimated); Net income: €21,288 million (+2 4.0% versus €20,840 million estimated); BNA: €10,054 million (+25.0% versus €9,768 million estimated versus €9,485 million BKTe)
Analysis team opinion: Positive impact. The 2024 figures are good, the shareholder remuneration is interesting (7.85% in total = cash yield ~6.3% + 1.5% in share buybacks) and the 2025 guidance is reasonable (profitability/RoTE ~17%/20% versus 19.7% in 2024).
We maintain a Neutral recommendation because: (1) there is still time to find out the outcome of the takeover bid for SAB (April/May?) and the risk increases that BBVA will increase the cash payment to convince SAB shareholders (they don’t have a premium now), (2) BBVA is enjoying a good moment in terms of results – commercial activity, high margins and profitability/RoTE -, with contained default rates and excess capital -, but the environment is becoming more complicated (macro in Mexico and falling interest rates in the EMU). The most important aspects of the results: (1) revenues are developing positively thanks to commercial activity in the main geographical areas (Spain and Mexico), (2) the efficiency ratio (costs/revenues) is one of the best in Europe (40.0% versus 38.9% in Q3 2024), (3) credit quality ratios are good (NPL ratio ~ 3.0% versus 3.3% in Q3 2024) with high coverage ~80% and the Cost of Risk/CoR stable (1.43% versus 1.42% in 3Q 2024) and (4) the profitability/RoTE is attractive (19.7% versus 20.1% in 9M 2024) with a CET1 FL capital ratio that exceeds the target (12.88% versus 12.84% in 3Q 2024 versus 11.5%/12.0% target).
Main geographical areas: NII 2024 in constant €: Mexico continues to be the main source of results (NII: €5,447 M; +5.8% vs €5,447 M estimated). Commercial activity (+15.8% in investment) offsets pressure on margins (11.39% versus 11.59% in Q3 2024) and maintains good credit quality ratios (delinquency at 2.67% versus 2.72% in Q3 2024). Spain (NAV: €3,784 million; +39.1% versus €3,632 million estimated), stands out in commercial activity (+4.1% in investment & +2.5% in total funds), with a low CoR (0.38% unchanged versus 3Q 2024) and low NPLs (3.73% versus 3.92% in 3Q 20 24). Turkey (BNA: €611 M; +15.9% versus €598 M). Margin pressure continues (-20.2% in Net Interest Income) with a +50.6% increase in costs (in line with inflation) although NPLs fall to 3.11% (versus 3.62% in Q3 2024).