The Zhitong Finance App learned that the Spanish Bank of Bilbao (BBVA.US) on Monday raised its 2024 net profit growth rate guidance. The bank's earnings for the first quarter exceeded expectations, mainly due to increased loan revenue in Mexico and Spain. The bank still expects trends in Mexico and Spain to continue to improve this year.

Like Spain's competitor Santander Bank (SAN.US), BBVA is expanding its business in emerging economies, but it is difficult to raise revenue in more mature markets. However, since July 2022, the monetary tightening cycle in mature European markets has also supported their loan revenue.

The bank's net profit for the first quarter increased 19% to 2.2 billion euros (about 2.36 billion US dollars), higher than the 2.06 billion euros expected by analysts surveyed by Reuters, although provisions increased by 41%, which was slightly higher than analysts' expectations.

With higher financial margins, BBVA raised the profitability indicator return on tangible equity from 17% at the end of 2023 to 17.7% in the first quarter. The bank aims to raise this indicator to a range of 17% to 20% in 2024.

BBVA said that although no specific figures have been given, the bank's expectations for growth in Spanish loan revenue this year are rising, and said that with a more favorable interest rate environment, this improvement trend will help the bank achieve higher net profit to the mother in 2024, which is expected to reach a double-digit growth rate.

Previously, BBVA only stated that it is expected that the Group's net profit to mother will continue to grow this year. In terms of revenue, BBVA said it raised the Group's core revenue outlook, but did not provide any specific details.

Jefferies said in a statement to customers that the quarterly report confirmed that the bank's business is developing steadily in most regions, and that performance in both Spain and Mexico is growing.

In Spain, BBVA's net profit increased 36.5% year on year. Net interest income (NII), that is, loan income minus deposit costs, increased 35.2% year over year, and also increased 2% month over month. The main reason is that interest remained at a high level longer than expected, and the growth rate of deposit costs was lower than the growth rate of loan yield. Jefferies said, “Due to the positive growth in net interest income in Spain, the revenue outlook for 2024 (also) has improved.”

In Mexico, the main market, BBVA's net profit for the first quarter increased 12.6% year over year, and net interest income increased 15.8% year over year.

In Turkey, BBVA switched to hyperinflationary accounting in 2022, and profit fell 48% in the first quarter and net interest income fell 55%.

In South America, the bank's net profit fell 34%, with Argentina's profit falling 33% due to hyperinflationary adjustments and depreciation of the peso.

At the group level, BBVA's net interest revenue for the first quarter increased 15% year over year to 6.51 billion euros, higher than analysts' average forecast of 6.42 billion euros, and increased 24% over the previous quarter.

As of last Friday, BBVA's stock price has risen by about 3% to $11.58, and has risen by more than 30% so far this year.