BBVA(BBVA)2025-02-21 16:48Financial Performance - The company reported a significant increase in net income for the year ended December 31, 2023, reaching €5.2 billion, a 15% increase compared to €4.5 billion in 2022[39]. - The company anticipates a continued positive trend, projecting a net income of approximately €5.5 billion for the year ending December 31, 2024, reflecting a growth rate of about 6%[39]. - Profit attributable to the parent company for 2024 reached €10,054 million, a 25.4% increase from €8,019 million in 2023[190]. - The operating profit before tax for 2024 was €15,405 million, a significant increase from €12,419 million in 2023, representing a rise of 24.8%[192]. - The gross income for 2024 was €35,481 million, an increase from €29,542 million in 2023, showing a growth of 20.0%[192]. - Net interest income for 2024 was €25,267 million, up from €23,089 million in 2023, reflecting an increase of 9.5%[192]. - Total assets as of December 31, 2024, amounted to €809,536 million, compared to €762,120 million in 2023, indicating a growth of 6.2%[194]. - Total equity as of December 31, 2024, was €47,416 million, up from €43,033 million in 2023, reflecting a growth of 10.9%[194]. Customer Growth and Engagement - User data showed a growth in active customers, with a total of 35 million users, representing a 10% increase year-over-year[39]. - New product launches in digital banking services contributed to a 20% increase in transaction volumes, indicating strong customer engagement[39]. - Approximately 66% of new clients initiated their relationship with BBVA through digital channels, highlighting the significant shift towards digital banking[168]. - The number of digital and mobile phone customers and the volume of online transactions continued to increase in 2024, reflecting the company's focus on digital transformation[183]. Market Expansion and Investments - The company is expanding its market presence in Latin America, with a targeted investment of €1 billion over the next three years to enhance service offerings[39]. - The company successfully completed the acquisition of a fintech startup, which is expected to enhance its technological capabilities and customer service[39]. - BBVA announced a voluntary Exchange Offer for the acquisition of the Target Company, intending to promote a merger unless market conditions change[101]. Risk Management and Compliance - The company is focusing on improving its risk management framework to address potential credit rating downgrades, particularly in Spain and Mexico[26]. - The Group's ability to manage credit risk and assess counterparties' creditworthiness is crucial for its financial condition, especially in the current economic uncertainty[80]. - The Group is subject to ongoing legal investigations, including a criminal investigation related to possible bribery and corruption[138]. - Regulatory changes have significantly impacted the financial services sector, increasing compliance costs and operational complexity[141]. Credit and Loan Portfolio - The company reported a 5% increase in its loan portfolio, driven by higher demand for consumer loans and mortgages[39]. - Loans and advances to customers totaled €413,930 million in 2024, compared to €379,231 million in 2023, marking an increase of 9.1%[194]. - The gross non-performing loan (NPL) ratio improved to 3.0% as of December 31, 2024, down from 3.4% in both 2023 and 2022, driven by increased lending activity and lower net entries of non-performing loans[78]. - Non-performing loan ratio decreased to 3.7% from 4.1% as of December 31, 2023, positively impacted by the sale of non-performing loan portfolios[213]. Geopolitical and Economic Risks - The geopolitical and economic risks, including inflation and currency depreciation, could adversely affect the Group's financial condition and results of operations[69]. - Inflation in Turkey was reported at 44.4% for the year ended December 2024, with the Turkish lira depreciating 11.1% against the euro[89]. - The Group's significant presence in emerging markets exposes it to heightened political risks and economic volatility, particularly in Mexico and Turkey[88]. Regulatory and Compliance Challenges - The Group's credit ratings are significantly influenced by the sovereign credit ratings of Spain and Mexico, which could affect access to capital markets[120]. - The introduction of a minimum effective tax rate of 18% for credit institutions in Spain since 2022 may increase the Group's tax burden[158]. - The Group's compliance with liquidity coverage ratio (LCR) and net stable financing ratio (NSFR) has led to additional expenses and affected profitability[156]. - The imposition of additional capital requirements could adversely affect the return on equity and other financial indicators[155]. Shareholder Actions - BBVA announced a share buyback program to repurchase own shares for a maximum monetary amount of €781 million, authorized by the ECB[47]. - The share buyback program was completed on April 9, 2024, with BBVA acquiring 74,654,915 shares, representing approximately 1.28% of its share capital[48]. - BBVA reduced its share capital by €36,580,908.35, redeeming the shares acquired in the buyback program[49].