BBVA Quarterly Profit Drops, Misses Estimates on Lower Trading

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Banco Bilbao Vizcaya Argentaria SA said first-quarter profit fell 54 percent, missing estimates, on lower trading revenue and currency fluctuations and as a onetime sale was not repeated.

Net income fell to 709 million euros ($804 million) from 1.54 billion euros a year ago when the bank booked a gain from selling a stake in a Chinese lender, Spain’s second-largest bank said Thursday. Profit missed the 885 million-euro average of five analyst estimates compiled by Bloomberg.

Chairman Francisco Gonzalez is pushing to offer more products and services online and via mobile phones while investing in digital banks. Bilbao-based BBVA bought a stake in the British online lender Atom Bank last year, and Gonzalez has said he sees digital banking as an avenue to new markets.

Net trading income in the quarter dropped to 357 million euros from 775 million euros a year earlier and from 451 million euros in the second quarter. Daragh Quinn, an analyst at Keefe Bruyette & Woods, had estimated 443 million euros.

Net interest income, or the difference between what a bank charges for loans and pays for funding, rose to 4.15 billion euros from 3.66 billion euros a year earlier while it dropped 6 percent from the fourth quarter.

BBVA shares are little changed this year, valuing the bank at 44 billion euros.

Income was hurt by a strengthening euro against currencies in Argentina and Mexico. Net income in Mexico, BBVA’s biggest unit, dropped 7 percent from a year earlier in euros. It would have increased 10 percent if the peso had not weakened, the bank said.

Bad loans as a proportion of total lending fell to 5.3 percent from 5.4 percent at the end of 2015. The bank’s common equity Tier 1 ratio stood at 10.54 percent at the end of the first quarter, up from 10.3 percent at the end of 2015.