BBVA beats expectations with €2,433 million profit in Q4 2024 (+18%) thanks to good business momentum in Spain and €993-million share buyback plan

BBVA vela atardecer

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).

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.