The pain in Spain

1 February 2018 By Christopher Thompson Follow @CGAThompson

A rise in impairments saw Spain’s second-largest bank by assets report returns below its cost of capital. BBVA’s reliance on emerging markets makes sense given a 4 pct drop in Spanish revenues. But the more it plays in risky climes the higher the return investors will expect.

This content is for Subscribers only

To access full Breakingviews.com content you must be a subscriber. Please use the following link to request a trial.

Context News

BBVA reported a 1.3 percent year-on-year rise in its full-year 2017 net profit to 3.5 billion euros, on gross revenue which rose by 2.5 percent to 25.2 billion euros.

The Spanish group’s cost-to-income ratio improved to 49.5 percent, compared to 51.9 percent in 2016, although return on tangible equity fell to 7.7 percent compared to 8.2 percent in the prior year. Its common equity Tier 1 capital ratio rose by 18 basis points over the year to 11.08 percent.

BBVA shares had risen by 0.9 percent to 7.64 euros as of 0924 on Feb. 1.

Email a friend

Please complete the form below.

Required fields *