BBVA net profits surge on China bank stake disposal

First-quarter profits surged 146 per cent at BBVA, reflecting a one-off boost from disposals but also the strengthening economic recovery in the bank's Spanish home market and higher earnings from its crucial Mexican operations.

Net earnings in the three months to March jumped from €624m in 2014 to €1.54bn this year. Net interest income - the profit a bank makes on its core lending activities - rose 8 per cent to €3.66bn.

BBVA's first-quarter earnings were helped by the sale of a stake in CNCB, a Chinese lender. Excluding that gain, the bank's net earnings still rose more than 50 per cent from the previous year, to €953m.

"These results confirm the positive growth trend we have seen since the end of last year," Angel Cano, BBVA president, said in a statement. "The quality of our earnings, improved risk indicators, a solid capital position and the progress made in the digital transformation are the quarter's key drivers."

Like its main domestic rival, Banco Santander, BBVA has large operations in Latin America, with a particular focus on Mexico, which accounts for more than a third of the bank's earnings.

More recently, however, the bank has tried to bulk up in its home market, which emerged from recession almost two years ago and is on course to grow as much as 3 per cent this year. Last year BBVA spent €1.7bn to buy Catalunya Banc, a regional savings bank that was nationalised during the 2012 banking crisis.

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In Mexico, BBVA reported a 14 per cent year-on-year rise in net interest income, to €1.34bn.

The bank said it had absorbed a significant hit from currency depreciation in Venezuela in the first quarter. Excluding the revaluation of the Bolivar, net earnings would have risen 168 per cent from last year.

The bank's core equity tier one capital on a fully-loaded basis, a closely watched measure of capital strength, now stands at 10.8 per cent - up from 10.4 per cent at the end of last year.

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