A focus on consumer lending and an aggressive digital strategy could be paying off for BBVA Compass in Birmingham, Ala., if its first-quarter results are any indication.

The $87.8 billion-asset bank reported double-digit increases in direct consumer loans and credit card lending over the past 12 months. Overall, net income increased 73% to $208.7 million for the quarter.

"Revenue growth was strong, led by a double-digit increase in net interest income, and expenses were well-managed,” President and CEO Onur Genç said in a press release Friday.

Active mobile banking users increased 30%, he said. The release did not say exactly how many of those users it has.

“Clearly, our digital transformation strategy is working and seeing our strategy come to life provides us the drive to continue meeting and exceeding our customers' expectation for amazing experiences," Genç said.

Genç has previously stressed that digital innovation will be a priority for BBVA Compass, the American subsidiary of the Spanish Banco Bilbao Vizcaya Argentaria.

Early returns
“Clearly, our digital transformation strategy is working," BBVA Compass chief Onur Genç said after the bank reported a 30% increase in active mobile users. Bloomberg News


As part of that strategy, BBVA recently announced a broader marketing push of its Express Personal Loan, an unsecured personal loan product marketed largely for debt consolidation. That product is part of its bid to better compete with fintechs that have popularized those unsecured consumer loans in recent years.

Other big banks, like Barclays’ U.S. division and PNC Financial Services Group, have also introduced unsecured consumer loans as they seek growth in consumer loans while business loan demand remains sluggish.

Total loans at BBVA increased 4% to $62.3 billion, led by growth in commercial loans, which rose 7% to $26.4 billion. Direct consumer loans increased 40% to $1.9 billion, and credit card lending increased 15% to $657 million.

That loan growth, plus rising interest rates and controlled deposit costs, helped to push up net interest income by 13% to $622.6 million. The net interest margin widened 31 basis points to 3.27%.

Loan growth was fully funded by deposits, which grew 4% to $69.9 billion, BBVA said.

BBVA got an additional boost from some of its fee-based businesses. Card and merchant processing fees rose 32% to $39.7 million, correspondent and investment sales increased 35% to $12.1 million, and asset management fees increased 10% to $10.8 million. Total noninterest income rose 5% to $257.8 million.

Credit quality also improved over the past year. Nonperforming loans fell 22% to $694 million and represented 1.11% of total loans, compared with 1.49% a year earlier.

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