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01/10 02:50
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong financial performance with a significant increase in net profit, EPS, and loan growth, despite some concerns in Turkey. The CET1 ratio remains robust, and the efficiency ratio has improved. The Q&A section revealed cautious guidance in Turkey and Mexico but did not significantly alter the positive sentiment. The overall financial health and shareholder return plan suggest a positive stock price movement over the next two weeks, even without a share buyback program. The lack of specific guidance in some areas is a minor concern but doesn't outweigh the positives.
Tangible Value Growth Increased by 14.1% year-over-year and 3.3% in the quarter, despite high currency depreciations.
Return on Tangible Equity Reached 20.2%, indicating improved profitability.
Return on Equity Reached 19.3%, suggesting strong financial performance.
Net Attributable Profit EUR 2,698 million, a 23% increase year-over-year and 10.9% higher than the previous quarter, driven by strong core business performance.
Earnings per Share EUR 0.45, a 24% increase year-over-year.
CET1 Fully Loaded Capital Ratio Improved by 21 basis points to 13.09%, above target range and regulatory requirements.
Net Interest Income (NII) Grew by 8.5% year-over-year, supported by strong business activity.
Net Fees and Commissions Increased by 19% year-over-year, driven by payments and asset management businesses.
Efficiency Ratio Improved to 38.2%, a 469 basis points improvement year-over-year.
Cost of Risk At 130 basis points, better than expected performance in most business units.
Loan Growth Increased by 15.1% year-over-year, indicating strong demand.
Gross Income Grew by 28% year-over-year in constant terms, driven by strong core revenue growth.
NPL Ratio At 2.9%, indicating solid asset quality.
Coverage Ratio At 82%, reflecting strong risk management.
Customer Acquisition Acquired 2.9 million new customers in the quarter, indicating strong franchise growth.
Sustainable Finance Target Set to channel EUR 700 billion between 2025 and 2029, more than double the previous target.
Net Profit in Spain Surpassed EUR 1 billion, driven by strong gross income and loan growth.
Net Profit in Mexico Grew by nearly 8% year-over-year, supported by strong core revenue growth.
Net Profit in Turkey EUR 158 million, a 10% increase year-over-year, driven by higher revenues.
Net Profit in South America Exceeding EUR 200 million, supported by revenue growth and lower impairments.
New Customer Acquisition: Acquired a record 2.9 million new customers in Q1 2025, with 66% joining through digital channels.
Sustainable Finance Target: Set an ambitious goal to channel EUR 700 billion between 2025 and 2029, more than double the previous target of EUR 300 billion.
Net Interest Income Growth: Net interest income grew by 8.5% year-over-year, driven by strong business activity.
Efficiency Ratio: Efficiency ratio improved to 38.2%, an improvement of 469 basis points year-over-year.
Loan Growth: Loan growth increased by 15.1% year-over-year, with significant growth in Spain (6.6%) and Mexico (17.2%).
Focus on Value Creation: Continued focus on creating value for stakeholders and maintaining high return on tangible equity.
Risk Management Strategy: Implemented risk transfer transactions to manage RWA growth effectively.
Power Supply Issues: A massive power shortage in Spain occurred just before the earnings call, which could impact operations and investor confidence.
Regulatory Changes: The introduction of a new banking tax in Spain resulted in a charge of EUR 85 million, which could affect profitability.
Economic Uncertainty: The company acknowledged living in uncertain times, which could impact credit growth and overall financial performance.
Currency Depreciation: The company experienced relatively high currency depreciations during the quarter, which could affect financial results.
Cost of Risk: Despite improvements in asset quality, there are concerns about potential increases in the cost of risk due to economic factors.
Market Volatility: The company expects market volatility to impact fee growth, particularly in asset management.
Inflation and Interest Rates: Higher than anticipated inflation and interest rates in Turkey may affect future profitability and growth.
Tangible Value Growth: Tangible value per share plus dividends increased by 14.1% year-over-year and 3.3% in the quarter.
Profitability Metrics: Return on tangible equity reached 20.2% and return on equity at 19.3%.
Customer Acquisition: Acquired a record 2.9 million new customers in Q1 2025, with 66% through digital channels.
Sustainability Initiative: Set an ambitious goal to channel EUR 700 billion in sustainable finance between 2025 and 2029.
Loan Growth Guidance for Spain: Expecting low to mid-single digit loan growth for the year.
NII Guidance for Spain: Guidance for a slight decline in NII, even in a context of lower than anticipated rates.
Cost of Risk Guidance for Spain: Improving guidance to around 35 basis points.
Loan Growth Guidance for Mexico: Reaffirming guidance for high single-digit loan growth.
NII Guidance for Mexico: Expecting NII to grow at high single-digit, although below that of activity.
Cost of Risk Guidance for Mexico: Maintaining cost of risk guidance at 350 basis points.
Net Profit Guidance for Turkey: Expecting net profit to close somewhat below EUR 1 billion in 2025.
Cost of Risk Guidance for South America: Cost of risk for the region stood at 230 basis points, below full year guidance.
Return on Tangible Equity Guidance: Maintaining guidance of return on tangible equity in high teens, similar to 2024.
Dividends Accrual: The dividend accrual for the quarter was noted, with a deduction of 37 basis points from the CET1 ratio.
Shareholder Return Plan: The company continues to focus on creating value for stakeholders, maintaining a strong capital position with a CET1 ratio of 13.09%.
Share Buyback Program: None
Dividend Program: The dividend accrual for the quarter was noted, with a deduction of 37 basis points from the CET1 ratio.
The earnings call summary highlights strong financial performance across regions, improved efficiency, and strategic growth in corporate loans. Net profit increases in key markets and disciplined cost management are positive indicators. The Q&A section reveals robust growth ambitions and a commitment to shareholder returns, despite some uncertainties in Mexico and Turkey. Management's proactive strategies and optimistic guidance, along with planned share buybacks, suggest a positive outlook for the stock price.
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