BBVA plans to continue increasing its profitability thanks to Mexico

MADRID (EUROPA PRESS).- The CEO of BBVA, Onur Genç, explained that the bank will continue to increase its level of profitability in the short term due to the management of interest rate risk in Spain and due to the growth of Mexico as an economy.

During his speech at a conference held by Goldman Sachs aimed at investors, during which the takeover bid for Banco Sabadell was not discussed, Genç explained that in recent years BBVA has been covering its sensitivity to interest rates in Spain.

Currently, the bank’s sensitivity is 5%, this implies that BBVA’s interest margin (net interest collected) falls 5% for every 100 basis point reduction in interest rates.

The CEO exemplified that if the European Central Bank (ECB) decides to take rates from 4% to around 2.5%, this means that for Spain the drop in interest margin will be a maximum of 450 million euros, since its income Current net interest amounts to six billion euros.

In any case, the possible impact will be less than that figure because the bank will compensate part of that blow with the cost of risk and with growth in volumes. “We believe that the levels of profitability that we enjoy today in Spain will continue,” Genç stressed.

On the other hand, the executive recalled that in the first quarter, the bank’s new credit production grew by 5% year-on-year, which leads BBVA to consider that the growth in volumes “will be better” than that seen in recent years.

Questioned about Mexico, Genç has also maintained his positive vision for two main reasons. On the one hand, due to the country’s position near the United States and the role it can play in trade due to Washington’s tensions with China.

On the other hand, Mexico’s debt to GDP ratio, as detailed by Genç, is around 36%, while in Peru it is 48%, in Brazil it is 72% or in Chile it reaches 113%.

“Indebtedness is very low. And as a result, the sector and BBVA in particular, have been growing at double digits,” he indicated.

Regarding Türkiye, he highlighted that there are signs of improvement in the economic environment. In his opinion, the new economic team, appointed after the presidential elections in May last year, has demonstrated a clear commitment to combating imbalances in the economy and laying the foundations for a healthier and more sustainable economic growth model.