BBVA net profit up 3% thanks to Mexico and Spain, Turkey weak
By Jesús Aguado
MADRID, July 31 (Reuters) - Spain's BBVA BBVA.MC said on Wednesday its second-quarter net profit rose 2.6% thanks to a stable performance in Mexico and Spain.
BBVA, Spain's second-largest bank, reported net profit of 1.28 billion euros ($1.4 billion) in the three months through June, above analysts' average forecast of 1.21 billion euros in a Reuters poll.
Net interest income (NII), a measure of earnings on loans minus deposit costs, rose 6% to 4.56 billion euros and was up 3% against the previous quarter. Analysts polled by Reuters had forecast NII of 4.4 billion euros.
Like domestic rival Santander SAN.MC, BBVA makes most of its profit overseas, a model that helped it withstand two recessions at home in recent years.
In Mexico, where it makes more than 40% of its net profit, net profit rose 4%. Without the apreciation of the Mexican peso, profit fell 3%.
However, political instability and economic recession in Turkey, where it makes around 9% of its profits, have dented group profitability. Second-quarter net profit in Turkey fell 18 percent to 140 million euros, it said.
The lira tumbled nearly 30 percent in 2018 as a currency crisis tipped Turkey's economy into recession. It has fallen another 5% this year against the dollar and it was down 4% in the second quarter.
In Spain, where it makes a quarter of its profits, the bottom line rose almost 14%.
Executives from BBVA are expected to face questions during the conference with analysts and at a press conference about a legal probe into an alleged spying case involving the lender.
($1 = 0.8965 euros)
(Reporting by Jesús Aguado Editing by Jose Elías Rodríguez and David Holmes)
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