Weak South American Currency Hits BBVA Profit
Ren Benavidez | | Aug 08, 2014 03:05 AM EDT |
(Photo : REUTERS/Andrea Comas)
Spain's second biggest bank, Banco Bilbao Vizcaya Argentaria, reported a 39 percent decrease in its second quarter net profit on Wednesday. This decline was reportedly caused by the weak exchange rates in South America.
The earnings of BBVA fell from US$1.54 billion in 2013 to US$946.4 million. The bank is expected to report its earnings before the stock market opens in Madrid on Thursday.
Like Us on Facebook
Net interest income of BBVA for its second quarter was US$4.8 billion compared with their 2013 income of US$4.96 billion.
The banks second-quarter trading income also suffered, falling to $US571 million or 32 percent compared to 2013.
Francisco Gonzalez, chairman of BBVA, will invest in technology companies in Spain to help the country recover from its losses.
Gonzales bought the lending company, Catalunya Banc SA, including all its 773 branches in a US$1.60 billion deal.
Even with the banks investment, however, Spain's economy is still hurt by the weakening exchange rates in Spain. This resulted in the decline of earnings.
Dara Quinn, an analyst at Nomura International PLC in Madrid, said its difficult to make a "year-on-year" comparison in Latin America because of the highly fluctuating rate of currencies.
Quinn added that although there is an upward trend in the earnings in Spain, the weaker currency is causing the real estate to lose money.
Latin America's profit in 2013 increased by US$631 million because of sales of businesses in Peru and Cambodia. In 2014, Banco Santander SA, the largest bank in Spain, reported a 17 percent gain in earnings while BBVA shares have increased by 5.3 percent.
It is estimated that the total earnings of BBVA in 2014 will be US$35 million, 51 percent higher than in 2013.
Analysts are keeping an eye on BBVA Argentina because it represents nearly 9 percent of the bank's 2013 net profit.
In a statement released by BBVA executives on Wednesday, it said that their branches in the United States, China and Turkey and strongly performing and can counter balance the effect of the weak currency in their regions.
©2015 Chinatopix All rights reserved. Do not reproduce without permission
EDITOR'S PICKS
-
Did the Trump administration just announce plans for a trade war with ‘hostile’ China and Russia?
-
US Senate passes Taiwan travel bill slammed by China
-
As Yan Sihong’s family grieves, here are other Chinese students who went missing abroad. Some have never been found
-
Beijing blasts Western critics who ‘smear China’ with the term sharp power
-
China Envoy Seeks to Defuse Tensions With U.S. as a Trade War Brews
-
Singapore's Deputy PM Provides Bitcoin Vote of Confidence Amid China's Blanket Bans
-
China warns investors over risks in overseas virtual currency trading
-
Chinese government most trustworthy: survey
-
Kashima Antlers On Course For Back-To-Back Titles
MOST POPULAR
LATEST NEWS
Zhou Yongkang: China's Former Security Chief Sentenced to Life in Prison
China's former Chief of the Ministry of Public Security, Zhou Yongkang, has been given a life sentence after he was found guilty of abusing his office, bribery and deliberately ... Full Article
TRENDING STORY
-
China Pork Prices Expected to Stabilize As The Supplies Recover
-
Elephone P9000 Smartphone is now on Sale on Amazon India
-
There's a Big Chance Cliffhangers Won't Still Be Resolved When Grey's Anatomy Season 13 Returns
-
Supreme Court Ruled on Samsung vs Apple Dispute for Patent Infringement
-
Microsoft Surface Pro 5 Rumors and Release Date: What is the Latest?