Banco Bilbao Vizcaya Argentaria Q4 Results

Banco Bilbao Vizcaya Argentaria is set to release its fourth-quarter results on Tuesday. Here are the key details:

Gross Income Forecast

According to consensus estimates provided by the bank, BBVA is projected to report gross income of 7.305 billion euros ($7.93 billion) for the fourth quarter. This is an increase from the previous year's gross income of EUR6.52 billion.

Net Profit Forecast

Analysts expect BBVA's net profit to reach EUR1.96 billion, based on the consensus. In comparison, the net profit for the same period last year was EUR1.58 billion.

Share Performance

BBVA's shares have experienced significant growth, with a nearly 26% increase compared to a year ago. This outperforms the 6.4% rise in the Stoxx Europe 600 Banks index.

Factors to Watch

Barclays Capital analysts note that changes in foreign-exchange rates in Turkey and Argentina could potentially have a negative impact on BBVA's net profit. Despite these challenges, the bank's common equity Tier 1 fully loaded capital ratio, a measure of financial strength, is expected to be 12.76% at the end of December. This represents a 3 basis points increase compared to the previous quarter, taking into account various factors such as foreign-exchange impacts, hedges, and book-value changes in Argentina.

Stay tuned for Banco Bilbao Vizcaya Argentaria's Q4 results to gain insights into their financial performance.

BBVA's Stock Growth Driven by Core Units, Turkey Remains a Key Factor

UBS analysts Ignacio Cerezo and Alvaro Fernandez-Garayzabal believe that BBVA's recent stock strength can be attributed to profit growth in its core units, Spain and Mexico. However, they suggest that these units are now approaching their earnings peak. According to UBS, the potential for BBVA's shares to go even higher hinges on the performance of its operations in Turkey.

During its third-quarter earnings call, BBVA indicated that Turkey's contribution to the group's 2023 net profit would be similar or slightly below the level in 2022, which amounted to EUR509 million. However, Barclays analysts estimate that the contribution from Turkey will be around EUR480 million. The future prospects in Turkey remain uncertain, but there is growing investor interest in a gradual return to conventional monetary policies, as noted by Citi analysts.

Shareholder-Return Policy in Focus

Analysts at Barclays emphasize the importance of any update on BBVA's shareholder-return policy. In October, the bank launched a EUR1 billion share buyback and paid an interim dividend of EUR0.16 per share. Consensus estimates provided by FactSet suggest that the total dividends for 2023 are expected to amount to EUR0.63 per share, indicating an increase from EUR0.43 per share in 2022.

Citi predicts that BBVA will return approximately EUR18 billion in dividends and buybacks, which accounts for about 36% of its market capitalization, by the second quarter of 2027.