The BBVA won 1.305 million euros last year, 62.9% less than the 3,512 million in 2019. The sharp decline is that in the first quarter had to emerge a loss of 2.084 million due to the devaluation of around 55% of the goodwill of its US subsidiary ( the second in a few months of the value of the intangible assets of that unit).
Also to the extraordinary provisions it has made to protect itself from future losses that the coronavirus crisis will cause when delinquencies begin to increase .
Unlike most banks, the group chaired by Carlos Torres Vila has not disclosed in its earnings report how much this item of extraordinary provisions has amounted to. Until September they were about 2,277 million, although in most of them they concentrated in the first and second quarters.
Like the rest of the sector, those of the third quarter were much lower (barely 200 million), which led the Bank of Spain to issue a warning to the banks that it had been unwise and should be protected more in the fourth quarter.
The second Spanish bank, on the other hand, has taken the opportunity to specify that the buyback of shares that it announced that it planned to do , thanks to the capital gain that the announced sale of its US subsidiary will entail , will amount to around 10% of the group actions .
The operation, which would be undertaken in the second part of the year if the European Central Bank (ECB) gives its authorization, is a way of remunerating the shareholder, since it increases the value of the rest of the securities.
It has also announced that it plans to pay 0.059 euros per share as a dividend out of 2020 results, that is, 15% of the recurring profit set as a maximum by the ECB (about 393 million).
Regarding the remuneration to the owners charged to the results obtained in 2021, he has pointed out that his intention is to return to his previous policy: to pay them between 35% and 40% of the recurring result (that of the activity of the business, without extraordinary positives or negatives).
The bank’s basic income from loan interest and deposits fell 7.3% last year. The decrease in commissions (8.3%) was well offset by the higher contribution from operations with debt portfolios (22.3%), with which the decrease in total business income moderated to 6.1% . The decrease in expenses was more pronounced (9.6%), so that the fall in the result before provisions was only 2.7%.
The bank has highlighted that its capital stood at 11.73% at the end of the year, a level similar to that of a year earlier, and that the sale of its US subsidiary would place it at 14.58% if it had already occurred. Non-performing loans grew slightly from 3.8% to 4%, as did the weight of provisions on doubtful assets (from 77% to 81%).