Loan growth, interest rates lift BBVA Compass profit

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Loan growth and rising interest rates helped to boost third-quarter earnings for BBVA Compass Bancshares in Birmingham, Ala.

Net income for the $90 billion-asset BBVA Compass rose 34% on a yearly basis to $175 million in the third quarter. The American subsidiary of the Spanish company Banco Bilbao Vizcaya Argentaria credited its earnings in part to its increased focus on credit card and consumer lending.

"Results for the quarter continue to reflect the positive underlying trends throughout many of our businesses and allowed us to post record quarterly revenue," President and CEO Onur Genç said in a press release. "The increase in net interest income certainly reflects the benefit of higher short-term interest rates, coupled with our ability to expand new and existing loan and deposit relationships with our clients.”

Overall, the bank had a good quarter. Total revenue increased 9% to $916.7 million, while net interest income increased 12% to $658.3 million. The net interest margin widened 14 basis points to 3.27%.

Total loans grew 7% to $64.5 billion. That included a 6% increase in commercial and industrial loans, to $26.6 billion. Direct consumer loans increased 51% to $2.4 billion while credit card lending jumped 29% to $763.7 million.

Total deposits increased 7% to $70.4 billion.

Noninterest income increased about 1% to $258.5 million. Card and merchant processing fees, mortgage banking income and service charges on deposit accounts rose on a yearly basis, while investment banking and advisory fees and other income declined.

Credit quality, however, was mixed. Nonperforming loans fell 5% to $673.4 million. But charge-offs rose 11.6% to $79.6 million. BBVA’s provision for loan losses was about $95 million, or 8% lower than the year-ago quarter, when it set aside greater provision expenses to cover damages from Hurricanes Harvey and Irma.

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