BBVA says Telefonica weighed on 2017 profits

BBVA, Spain’s second-biggest bank, said Thursday that profits last year were hit by writedowns on the value of its stake in telecoms giant Telefonica, but it still managed to notch up record revenues.

BBVA said in a statement that its bottom-line net profit advanced by just 1.3 percent to 3.5 billion euros ($4.4 billion) in 2017, short of analysts’ expectations.

“Without taking into account the impairment losses from Telefonica, net profit for 2017 stood at 4.6 billion euros, up 19.7 percent compared to 2016 results,” the statement said.

“Record revenue and cost containment efforts in operating expenses were the main drivers of this result.”

BBVA had said at the beginning of January that it would take a charge of 1.1 billion euros against its stake of “more than five percent” in Telefonica, after the fall in the share price.

The bank insisted, however, that revenues “reached record highs” in 2017.

Net interest income, the biggest source of revenues, grew by 4.1 percent to 17.7 billion euros.

Including fees and commission income, overall gross income was up 2.5 percent at 25.3 billion euros, BBVA said.

emi/spm/ser