Banco Bilbao Vizcaya Argentaria SA reported earnings that beat estimates and said it would buy back as much as €1 billion ($1.1 billion) of shares from holders, adding to the €3.6 billion payout it has already handed investors in the last two years.
Net income in the quarter through June 30 rose 24% from a year earlier to €2 billion, Spain’s second-largest lender said in a regulatory filing on Friday. That beat the €1.8 billion estimated by analysts. Net interest income jumped 26%, while fees were stable.
BBVA just completed a €422 million buyback in April, after rewarding investors with some €3.2 billion through repurchases following the sale of its US retail business in 2021.
Chief Executive Officer Onur Genc is counting on the bank’s geographical diversification and digital expansion to boost profitability. BBVA is among a raft of European banks boosting margins in their main business of lending on the back of the European Central Bank’s aggressive tightening cycle. The ECB has raised its benchmark rate nine times in the past year, and the latest round was Thursday’s quarter-point increase.
In Mexico, BBVA’s largest market, profit in the second quarter stayed flat as net interest income was slightly lower and operating expenses were higher. Net interest income in Spain climbed 15% in the quarter from the previous three months, while profit jumped 27%.
BBVA on Thursday named the head of its investment bank, Luisa Gomez Bravo as its new chief financial officer. Javier Rodriguez Soler, who is currently head of sustainability, will take over from Gomez Bravo to oversee corporate and investment banking.
BBVA shares have rallied 28% this year, outperforming the Stoxx 600 Banks Index.
Spanish lender CaixaBank SA announced a new share buyback for €500 million on Friday, while Banco Santander SA this week reported earnings that beat estimates as its domestic market became the top profit maker for the first time in more than a decade, boosted by rising interest rates.
(Updates with Mexico in fifth paragraph. An earlier version corrected the profit-gain percentage.)
Author: Macarena Muñoz