Banco Bilbao Vizcaya Argentaria SA, which has accelerated its push into digital banking, recorded a 20% rise in its digital customer base in the year that saw its highest full-year profit since 2010.
The bank's full-year 2016 net attributable profit amounted to €3.48 billion, up 31.5% from €2.64 billion in 2015. The result included an after-tax negative impact of €404 million related to a gross provision of €577 million, booked in the fourth quarter of 2016, to cover possible future claims relating to interest rate floors on previously sold mortgage contracts.
The increase in full-year profit was driven, among others, by the reduction in impairment losses on financial assets, which fell to €3.80 billion from €4.34 billion in 2015.
The bank said it had 18.4 million digital banking customers as of December 2016, up from 15.4 million a year ago. Of the total, 12.4 million are mobile customers, up 38% year over year.
The percentage of banking transactions conducted through digital channels in Spain more than doubled to 17.1% in 2016 from 8.4% in 2015, while the percentage in the U.S. jumped to 19.9% from 9.3%. Digital sales also gained momentum in other regions, with 15.2% of total sales coming from South America, 11.9% from Mexico and 26.1% from Turkey.
BBVA reported fourth-quarter 2016 net attributable profit of €678 million, down from €940 million a year earlier. EPS dropped to 9 cents from 13 cents.
Net interest income for the quarter fell year over year to €4.39 billion from €4.42 billion. Net fees and commissions also dropped to €1.16 billion from €1.26 billion. Net trading income amounted to €379 million, down from the year-ago €451 million.
Net provisions rose to €723 million from €157 million in the fourth quarter of 2015, while net impairments on financial assets narrowed year over year to €687 million from €1.06 billion. Other losses totaled €284 million, compared to the year-ago €97 million.
BBVA's nonperforming loans ratio was 4.9% at 2016-end, compared to 5.4% a year ago, while the coverage ratio fell to 70% from 74% at 2015-end.
The group's CRD IV phase in common equity Tier 1 ratio stood at 12.2% at the end of 2016, compared to 12.3% at the end of September 2016 and 12.1% at 2015-end. The fully loaded CET1 ratio was 10.9% at 2016-end, compared to 10.3% at the end of 2015. The bank maintained its 11% CET1 ratio target for 2017.
In addition, BBVA said it intends to distribute a dividend of between 35% and 40% of profits, with a 100% cash dividend, in line with its shareholder remuneration policy announced in 2013. The group will also propose a final dividend option scheme in the amount of approximately 13 cents per share, to be paid in April.
In future, the group will have two dividend payouts per year, starting tentatively in October and April of 2018.