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BBVA: The 5% Dividend Yield Appears Safe Despite The Problems In Turkey

Published Sat, 09 Feb 2019 11:10:00 -0500 on Seeking Alpha

Banco Santander (SAN) probably is the best known Spanish bank, but let's not forget about BBVA (BBVA), the second largest Spanish bank with a global reach. Indeed, BBVA is generating the majority of its income outside of Spain with Mexico, the U.S. and Turkey as main centers of activity. The Turkish assets have been highlighted this year as the turmoil in the country has forced BBVA to record a relatively high impairment on its financial assets in the country, which had a negative impact on its consolidated performance.

Source: Yahoo Finance
BBVA has a relatively liquid U.S. listing, so there's no need to trade in the company's securities on the Bolsa de Madrid exchange. Considering the bank reports its financial results in EUR, I will use that currency throughout this article.
BBVA reported decent results in FY 2018, despite a 4.3B EUR writedown
In 2018, BBVA reported slightly lower revenues but a higher net income as the bank was able to reduce the total amount of impairment charges on its financial assets. The net interest income decreased by 0.9% to 17.6B EUR, while the gross income also decreased by almost 6%. But thanks to lower operating expenses (which dropped by almost 8% to 11.7B EUR), the operating income fell by just 6% as well. As BBVA had to put less money aside to cover impairment charges and provisions (approximately 1.2B EUR less than in FY 2017), its pre-tax income increased by almost 10% to 7.6B EUR, resulting in a net income of 5.32B EUR,... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
BANCO SANTANDER 3.93   8.2 0.48 0.21 5.44


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