Consumer lending drives 4Q growth at BBVA

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Growth in consumer lending and credit cards fueled fourth-quarter profits at BBVA Compass in Birmingham, Ala., offsetting declines in several fee income categories.

Net income for the U.S. subsidiary of the Spanish Banco Bilbao Vizcaya Argentaria was $196 million in the fourth quarter, compared with $52 million in the comparable period a year earlier. Its fourth-quarter results in 2017 included income tax expense of $121 million, due to the revaluation of net deferred tax assets. Without that item in 2017, net income would have risen 13% year over year, the company said.

For the full year, the bank set records in loan originations, total revenue, operating income and net income, Javier Rodríguez Soler, incoming president and CEO, said in a news release Friday.

“Equally important, this performance was accomplished while making great strides in our digital transformation efforts designed to drive new industry-leading product offerings, increase our digital sales capabilities and improve the customer experience,” he said.

Total revenue rose 6% to $953 million.

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Net interest income rose 13% to $682 million in the fourth quarter, and the net margin expanded 15 basis points to 3.37%.

Total loans rose 6% to $65.3 billion in the fourth quarter. The bank reported gains in these major categories:

  • Direct consumer loans rose 51% to $2.5 billion, and indirect consumer loans rose 19% to $3.8 billion.
  • Credit card lending rose 27% to $818.3 million.
  • Commercial real estate lending increased 11% to $13 billion.
  • Commercial and industrial lending grew 3% to $26.6 billion.

Total deposits increased 4% to $72.2 billion.

Noninterest income declined 9% to $271 million. Investment banking and advisory fees declined 38% to $15.3 million, mortgage banking income declined 19% to $3.8 million. Other noninterest income fell 32% to $68.5 million, the result of a decline in syndication fees and the reclassification of certain interchange fees.

Nonperforming loans increased to 1.24% of total loans, compared with 1.16% a year earlier. BBVA said this was due to three unrelated commercial credits being placed on nonaccrual status.

Noninterest expenses declined 2% to $602 million.

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Regional banks Earnings Consumer lending Consumer banking BBVA Compass