BBVA Profit Up as Mexico, Spanish Businesses Perform Strongly -- Update

By Patricia Kowsmann 

Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA) said Friday its profit rose 74% in the second quarter on higher revenue and a stronger performance from its Mexican and Spanish operations.

The country's No. 2 lender by market value said net profit was EUR1.22 billion ($1.33 billion), up from EUR704 million a year earlier and above analysts' expectations.

Carlos Torres Vila, who became the bank's president in May, said results "show good perspectives for the year."

Mr. Vila was particularly bullish on Spain, where the economy is recovering after five years of either recession or no growth. On Thursday, the country's statistics agency said gross domestic product rose 1% in the second quarter compared with the previous quarter, the fastest pace in seven years.

"We do expect significant job creation this year and the next," Mr. Vila said.

The bank said net interest income--the difference between what lenders pay clients for deposits and charge for loans--was EUR3.86 billion compared with EUR3.65 billion the year before. Net trading income rose almost 53% to EUR650 million.

Nonperforming loans as a percentage of total loans, meanwhile, stood at 6.1% in the first half of the year, compared with 6.4% a year ago, the bank said.

In BBVA's Mexico unit, the largest single contributor to the bank's earnings, net profit rose 16% to EUR518 million as lending continued to grow. Profit grew 10% at constant exchange rates.

Net profit at BBVA's Spain banking unit, meanwhile, more than doubled to EUR462 million on higher lending income, fees and trading.

BBVA said its Spanish loan book increased by 13% in the year so far because of its purchase of Catalunya Banc SA, which was completed in April. Deposits also grew for the same reason.

BBVA won a government-run auction to buy bailed-out lender Catalunya Banc a year ago, hoping to bolster its presence in Spain's wealthy Catalonia region.

In May, BBVA named Mr. Vila, the then head of digital banking, as president, reflecting the bank's push to develop more technologies for clients, which it hopes will increase business. The bank chairman said the appointment began "a new phase to advance toward our goal of becoming the best universal bank in the digital age."

Write to Patricia Kowsmann at [e-mail]

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