BBVA (BME:BBVA)'s net profit for the third quarter of 2023 surged to €2.08 billion (EUR1 = USD1.0637), up from €1.84 billion in the same period last year. This increase occurred despite a negative hyperinflation adjustment in Turkey. The Spanish bank's gross income also climbed to €7.96 billion from €6.84 billion, while net interest income saw a 23% year-on-year rise to €6.43 billion. These results outperformed consensus estimates, which had predicted a Q3 net profit of €2.01 billion and gross income of €7.38 billion for BBVA.
The bank attributes its strong performance to recurring revenue streams and net fees and commissions, which helped offset the effects of hyperinflation.
Meanwhile, Garanti BBVA, a subsidiary of the Spanish bank in Turkey, reported a net income of TL57.6 billion and assets worth TL1.97 trillion for the first three quarters of 2023. The bank provided TL1.45 trillion in cash and non-cash loans, while its customer deposit base grew by 58% to TL1.43 trillion (USD1 = TRY28.2850), backing 73% of assets.
The third quarter saw active balance sheet management due to monetary tightening, resulting in increased demand for lira loans and a decrease in foreign currency, corporate, and retail lending. This led Garanti BBVA to achieve the best loan-to-deposit ratio in its history.
Despite margin pressure from macro-prudential measures and a negative real interest rate environment affecting back-book lira net interest income, Garanti BBVA outperformed local peers due to its adaptable structure, customer-generated revenue, strength in payment systems, growing customer base, reduced provision needs, and prudent operational expenses approach.
Leveraging AI and digital investments, Garanti BBVA improved over 100 processes via robotic automation, enhancing customer experience with minimal branch involvement. The bank launched the 'Women Who Know Their Account' program to promote financial literacy as part of their responsible banking initiative and offered digital corporate and commercial end-to-end loan products.
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