BBVA on Friday said third-quarter net profit rose 22.7% compared with the same quarter a year ago on lower loan-loss provisions and a strong performance from Mexico, its main market.
The Spanish bank reported a net profit of 1.4 billion euros ($1.63 billion) in the July to September period. Analysts polled by Reuters expected a net profit of 1.06 billion euros.
BBVA also said its board had agreed to carry out a share buy-back programme of up to 10% of its capital for up to 3.5 billion euros, which it expects to execute in 12 months.
The first part of 1.5 billion euros will take place after the bank’s investor day, on November 18, and is expected to be implemented in the next three to four months, it said.
Shares in BBVA rose 3.2% after on the buyback and as brokers such as Jefferies welcomed a solid set of results in Mexico.
BBVA’s results surpassed its 1.23 billion euro net profit in the third quarter of 2019, before the pandemic, after it booked impairments of 622 million euros in the third quarter from 706 million euros in the same period a year ago.
BBVA’s cost of risk, which measures the premium of managing credit risks and serves as an indicator for potential future losses, fell to 92 basis points from 100 bps in June.
To cope with the pandemic and ultra-low interest rates, BBVA last year sold its U.S. business, generating more than 8 billion euros to focus on cost cutting measures in Spain and strengthening shareholder returns.
In September, BBVA finished with a fully loaded core tier-1 capital ratio of 14.48%. With the share buy-back, BBVA’s proforma capital ratio as of September stood at 13.18 compared to 12.89% in the previous quarter.
Source: El Economista