Banco Bilbao Vizcaya Argentaria S.A. (BBVA) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

July 29, 2022 3:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Patricia Bueno

Good morning, and welcome, everyone, to the BBVA Second Quarter 2022 Results Presentation. Thank you very much for your interest. I'm joined today by Onur Genc, BBVA Chief Executive Officer; and Rafael Salinas, Group CFO. As in previous quarters, Onur will start reviewing the group figures, followed by Rafa, who will go through the business area results. Then, we will move straight to the live Q&A session.

And now I will turn it over to Onur.

Onur Genc

Thank you, Patricia. Good morning to everyone. Welcome, and thank you for joining us. So let me jump into it. Start with slide number 3. Before going into the details of the presentation, as you know, we announced a few weeks ago that we are applying IAS 29, which is hyperinflationary accounting in Turkey, in our business in Turkey, starting from January 1, 2022. So all the results that you would be seeing from this date show the fully adjusted figures.

On the left hand side of the slide, you can see our recurrent net attributable profit evolution, reaching €1.877 billion. One more quarter we are posting record results. This figure, this €1.87 billion, it excludes the negative impact of €201 million in the quarter due to branches repurchase agreement with Merlin in Spain, as you know we have done this transaction.

And with these numbers, we are 45% above the results of the same quarter of last year and 41.5% higher than the first quarter 2022 results, restated due to hyperinflationary accounting. Even after including the negative impact of the Merlin transaction, even after including that, this was our best quarter. These excellent results brings our earnings per share, at the bottom of the page, earnings per share up to €0.28, 58% higher year-over-year, a higher growth rate than the net attributable profit due to the share buyback program that we are all -- we are implanting, as you all know. And the graph on the right hand side of the slide, it shows our capital position, our capital ratio at 12.45%, above our target range and well above regulatory requirements.

Moving to Slide number 4. You can see the incremental contribution of different business areas versus the same quarter last year, basically breaking down the overall increase of 45% into different areas. As you see in the chart, especially South America and Mexico have outperformed, reaching very good results, as Rafa will explain later in the presentation. In the case of Turkey, it had a positive contribution in the quarter even after implementing the hyperinflationary accounting. It is worth mentioning that due to hyperinflationary accounting, we registered a negative P&L impact due to the value loss of the net monetary position of €524 million in the second quarter. So these results that you're seeing are obviously after all those impacts.