BBVA’s profit doubles on gains from asset sales

BBVA, Spain’s second-biggest bank, said quarterly profit more than doubled after it sold pension units in South America and set aside less money for non-performing real-estate assets.

Second-quarter net income climbed to 1.15 billion euros from 505 million euros a year earlier. That was in line with the 1.15 billion-euro average estimate in a Bloomberg survey of 12 analysts. Profit was boosted by 471 million euros of gains from the sale of pensions businesses in Colombia and Peru.

“It’s still too early to say business is back to normal,” Bloomberg quoted Carlos Joaquim Peixoto, an analyst at Banco BPI in Porto, Portugal as saying, before the earnings were released. “It may be that conditions are starting to be created for a real recovery in earnings to take place probably in 2015.”

Bad loans as a proportion of lending rose to 5.5 percent from 5.3 percent in March and 4.0 percent a year earlier, the bank said. Provisioning costs fell to 1.34 billion euros from 2.18 billion euros a year earlier. BBVA’s core capital ratio was 11.3 percent, up from 11.2 percent in March.

Its Mexican unit’s net income rose to 441 million euros from 434 million euros a year earlier as lending climbed an annual 7.3 percent. Earnings from Spain fell to 173 million euros from 413 million a year earlier as the bad loan ratio rose to 4.7 percent from 3.0 percent.