The entity chaired by Carlos Torres improves its cash payment by 39% and announces a new share repurchase for 422 million euros
Historic year for BBVA. The bank chaired by Carlos Torres said goodbye to 2022 with a record profit of 6,420 million euros, a figure that exceeds the previous ‘peak’ of 2007, when the entity obtained results of 6,126 million. As is happening in the rest of the sector, these figures are backed by strong margin growth in typical banking business, in the wake of the rise in interest rates by the European Central Bank (ECB).
Thanks to these results, the bank has decided to make its shareholders happy by announcing a 39% increase in its dividend compared to 2021, the juiciest in cash in the last 14 years. Specifically, it will make a complementary distribution of 31 cents per share in April which, added to the 12 cents it already paid in October, makes a total of 43 cents per share. The entity has also confirmed that it will allocate 422 million euros to a new share repurchase plan, after the attack last year for a value of 3,160 million euros.
In total, between the cash dividend and the repurchase of shares, BBVA will allocate some 3,000 million euros to shareholder remuneration, 47% of its profits, up from 44% the previous year.
After the publication of these results, the second vice president Yolanda Díaz reacted through her Twitter account, recalling that “while the rise in the Euribor will make the average mortgage more expensive by 250 euros per month, BBVA’s profits grow 38% to reach 6,420 M, the greatest in its history. The crisis cannot be an excuse to earn more. Freeze mortgages, moderate benefits ».
Higher earnings
The historical benefit for the entity came thanks to an increase in income much higher than that registered by costs. Specifically, the gross margin grew by 18.2% to 24,890 million euros, thanks to the interest margin, which registered a strong rise of 30.4% to 19,153 million due to the strong growth in credit and, above all, the environment of rising interest rates.
The entity also raised its commission income by 12% to 5,353 million, while expenses barely rose 13% (10,760 million euros).
Some numbers that, as Díaz’s reaction through social networks demonstrates, come at a time when business profits are being judged with a magnifying glass by the Government, especially those of the banks themselves, which should start this February to pay the new approved tax that will tax income from interest margin and net commissions from financial institutions with 4.8%.
Geographies and delinquencies
At the moment, with higher income and lower costs, BBVA can calmly face the payment of the tax, waiting to find out if the entities will decide to appeal it once paid. The entity increased its provisions by around 11.5% in 2022 to 3,379 million euros, especially those for the business in South America and Turkey.
Turkey has been, in fact, the stone in the shoe of these record accounts for the bank. And it is that the result of the entity in the region fell by 31% compared to 2021, up to 509 million euros despite applying the so-called hyperinflationary accounting in its accounts (formula used to adjust the figures to the high level of prices in the country ).
Mexico and Spain repeat as the regions that pull the most business for BBVA. Specifically, the entity achieved a profit of 4,182 million euros in the Aztec country, 64% more, which already generates 57% of the total result.
In Spain, BBVA earned 21.4% more to 1,879 million euros. The attributable result (taking into account the purchase of the Merlin offices) amounts to 1,678 million euros, 8.4% more than the previous year. That is, 22.8% of the profit.
As is happening in the rest of the sector, BBVA has also managed to keep at bay one of the great concerns of supervisors in the face of the energy and price crisis that is doing so much damage to consumers’ pockets. Specifically, the entity’s default rate stood at 3.4%, compared to 4.1% the previous year, with much higher coverage, 81% compared to 75% in 2021.
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