By Jesús Aguado

MADRID (Reuters) – BBVA (BME:) on Wednesday posted a 38% soar in web revenue to a document 6.42 billion euros ($6.98 billion) for 2022 powered by a double-digit enhance in lending earnings and a powerful efficiency in Mexico, a development the financial institution expects to proceed this 12 months.

Internet revenue within the fourth quarter at Spain’s second-biggest lender by market worth rose 17.6% to 1.58 billion euros.

Each the full-year and quarterly revenue got here in barely above market forecasts.

Like bigger rival Santander (BME:), BBVA has been increasing in rising economies the place it has seen larger alternatives for development because it struggled to spice up earnings in additional mature markets.

In Mexico, which accounted for greater than 60% of its web earnings in 2022, web revenue rose 64%, whereas earnings from lending elevated by 44%.

For 2023, BBVA mentioned it anticipated to realize a mid-teens development in lending earnings and a double digit development in loans in Mexico.

At 0820 GMT, shares in BBVA rose greater than 2% after having risen greater than 14% to date this 12 months.

Dealer Jefferies welcomed a stable set of outcomes, specific in Mexico, on fourth-quarter traits and 2023 outlook.

Banks throughout Europe are additionally starting to learn from larger borrowing prices regardless of fears of recession.

Within the ultimate quarter, web curiosity earnings (NII), earnings on loans minus deposit prices, rose 34% to five.34 billion euros, above the 5.26 billion forecast by analysts, whereas rising 30% in 2022.

In an unsure financial surroundings, loan-loss provisions rose 20% to 998 million euros within the quarter.

That was under analysts’ forecasts of 1.07 billion euros.

BBVA’s price of threat, which measures the price of managing credit score dangers and potential losses for the financial institution, rose to 91 foundation factors from 86 bps on the finish of September. For 2023, the financial institution expects a price of threat of round 100 foundation factors.

Regardless of its robust franchise in Mexico, some analysts have cited dangers from its publicity to Turkey and better costs in Latin America.

Inflation results, significantly in rising markets, led to a rise of round 11% year-on-year in personnel prices within the fourth quarter at a gaggle stage.

In Turkey, the place BBVA has began to implement hyperinflationary accounting, web revenue rose 11%, whereas NII fell 9%.

In Spain, web revenue rose 2% year-on-year within the quarter, whereas NII elevated by greater than 25%, with the financial institution forecasting development at low twenties for this 12 months in its residence market.

The financial institution proposed a ultimate money dividend of 0.31 euros per share and introduced a share buy-back plan of 422 million euros.

Its complete distribution will attain 3.02 billion euros, 47% of the web revenue and 0.50 euros per share, together with the interim money dividend 0.12 euros per share already paid, BBVA mentioned.

BBVA completed with a reported core tier-1 totally loaded capital ratio, the strictest measures of solvency, of 12.61% in comparison with 12.45% at end-September.