The BBVA won 1,651 million euros between January and March, a 36.4% more than the 1,210 million in the same period last year. The bank has thus managed to increase its profit even without the contribution of its US affiliate, which he sold last June. The rise in profits, in fact, would be even higher, 59.8%, if the 177 million that said unit contributed in the first quarter of 2021 is excluded from the comparison. It would also be higher, 41%, from not be for the depreciation of the Turkish Lira.
The improvement in group benefit was due to increased revenuewhich exceeded the increase in inflation expensesas well as the strong reduction in provisions to deal with future losses. Basic income from the difference in interest on credit and deposits, thus, grew by 20.5%, to 4,158 million, thanks to the rate hikes in Mexico, Turkey and South America. Also income from commissions they rose 9.5% due to increased activity as the pandemic was overcome.
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The billshowever, also grew by the “inflationary environment”, although they did so much less than revenue (4.7%, or 8.5% without taking into account the impact of the exchange rates of the currencies with which the group operates). They only registered relevant falls in the business in Spain and the central offices, due to the ere of last year. All in all, the efficiency ratio (relationship between income and expenses) improved notably, from 45.2% in December to 40.7%, thanks to the strong increase in income.
The other fundamental factor that explains the improvement in profit is the provisions to face losses, which fell 20.1%, to 738 million euros, “despite the most unfavorable macroeconomic environment, thanks to the good behavior of the underlying”. That is, the quality of the assets. The delinquency ratio, thus, fell from 4.1% to 3.9% of loans, since loans increased by 5% and unpaid loans by only 1.1%.