BBVA expects to grow profit in double digits in 2024 and even faster in 2025
At the presentation of first-quarter results, CEO Onur Genç said that BBVA expects improved profit both this year and next year compared to the same period of 2023. Specifically, "Our outlook for net attributable profit this year improves to double-digit growth. I see an even better 2025 versus 2024," he said. Genç also anticipates higher recurring revenue in the BBVA Group account in 2024, thanks to an improvement in the forecast for net interest income in Spain.
The CEO explained that BBVA's first-quarter results in Spain, with a 37 percent increase in net attributable profit and a 35 percent rise in net interest income, underpin a brighter outlook for the country unit this year. In particular, BBVA has upgraded its guidance for Spain's account and now expects net interest income to grow at a double-digit rate in 2024 (versus growth of around 5 percent estimated three months ago). This new expectation is explained by greater commercial buoyancy and contained deposit costs.
BBVA maintains its earlier guidance for the rest of markets. For Mexico, Genç foresees a high-single-digit increase in net interest income driven by strong performance of the loan portfolio: “We are confident that double-digit loan growth in Mexico is very feasible,” he stated. For Türkiye and Latin America, BBVA believes that "especially in the second half of this year, we will see improved figures in both geographies."
Onur Genç stressed that "BBVA has delivered another great quarter, mainly thanks to Spain and Mexico." Recurring revenues performed exceptionally well, leveraged by business volume growth. The bank is thus "well on track to realize our upgraded expectations for the period 2021-2024" after a start to the year in which "we made forward strides in the execution of our strategy, focused on digitalization, innovation and sustainability.” Genç added, “We created exceptional value and surpassed all our performance metrics."
However, he believes the bank "has not yet peaked" in terms of performance. He explained that the ROTE of 17.7 percent presented in the first quarter includes the one-off tax on banks in Spain (€285 million). This charge will not be booked in the coming quarters. Regarding capital - measured via the CET1 fully loaded ratio - the CEO expects BBVA to generate 50 to 60 basis points per year over the next three years, which is more than €2 billion per year.
For her part, BBVA's chief financial officer, Luisa Gómez Bravo, pointed out that "activity is growing at very healthy rates" in the main markets where the bank operates. She also stressed that "across all geographies, this growth is generally supported by an increase in activity and lending in the retail segment." In both credit quality and volume, "the metrics we are seeing in the first quarter are closely aligned with the forecast we gave to the markets and well in line with our rate estimates," she pointed out. In this connection, BBVA expects the ECB to cut interest rates three times this year and four times next year.