EU FINANCIALS: BBVA: Q2 25 Results
(BBVASM; A3 *+/A/A- *+)
Small credit positive. Slight revenue miss, mostly on lower than expected trading income. Excellent OpEx discipline and lower provisions.
- YoY loan growth accelerates to 16%.
- Healthy OpInc and net income beat.
- CET1 13.34%, +25bps vs Q1. 69bps generation, -37bps distribution, -41bps from high RWA's. FX & mark to market effect +34bps. Expects 40-50bps of positive regulatory impacts in H2.
- Net Interest Income €6,208mn vs est. €6,218mn (-3.0% QoQ / -4.2% YoY)
- Net Fees & Commissions €1,951mn vs est. €1,970mn (-5.3% QoQ / -0.2% YoY)
- Net Trading Income €484mn vs est. €641mn (-48.9% QoQ / -56.6% YoY)
- Other Operating Income and Expenses €67mn vs est. €-75mn (-181.7% QoQ / -120.7% YoY)
- Total Non-Interest Expenses €3,225mn vs est. €3,461mn (-9.5% QoQ / -7.2% YoY)
- Personnel Expense €1,792mn vs est. €1,846mn (-5.7% QoQ / -3.4% YoY)
- Provision for Loan Loss €1,377mn vs est. €1,508mn (-0.6% QoQ / -6.9% YoY)
- All other Provisions & Charges €82mn vs est. €39mn (182.8% QoQ / -264.0% YoY)
- Pre-Tax Income €4,076mn vs est. €3,734mn (-6.3% QoQ / -5.7% YoY)
- Net Income Including Minority Interest €2,916mn vs est. €2,480mn (1.2% QoQ / -1.1% YoY)
- CET1 Ratio 13.3% vs est. 13.5%
- NPL/Total Loans (bps) 333.6 vs est. 340.1
- Cost of Risk (bps) 125.7 vs est. 141.9
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SOFR OPTIONS: SFRZ5 96.25/96.00 1x2 Put Spread Sold
SFRZ5 96.25/96.00 1x2 put spread 2K given at 3.25
BTP TECHS: (U5) Trend Needle Points North
- RES 4: 122.71 2.764proj of the May 14 - 20 - 21 price swing
- RES 3: 122.35 2.500 proj of the May 14 - 20 - 21 price swing
- RES 2: 122.00 Round number resistance
- RES 1: 121.73 High Jun 13 and the bull trigger
- PRICE: 121.00 @ Close Jun 30
- SUP 1: 119.91 Low May 29
- SUP 2: 119.48 Low May 26
- SUP 3: 118.87 Low May 21
- SUP 4: 118.51 Low May 14 and key support
The trend condition in BTP futures remains bullish and recent weakness appears corrective. Gains earlier this month reinforce a bull theme and maintain the price sequence of higher highs and higher lows. Sights are on the 122.00 handle next. Key support to watch is unchanged at 118.51, the May 14 low. A clear break of this level would highlight a reversal. First support is 119.91, the May 29 low.
GILT TECHS: (U5) Bull Cycle Remains In Play
- RES 4: 94.15 2.000 proj of the May 22 - 27 - 29 price swing
- RES 3: 94.00 Round number resistance
- RES 2: 93.73 1.764 proj of the May 22 - 27 - 29 price swing
- RES 1: 93.57/93.68 High Jun 25 / 13
- PRICE: 93.03 @ Close Jun 30
- SUP 1: 92.70 20-day EMA
- SUP 2: 92.23 Low Jun 16 and a key short-term support
- SUP 3: 91.56 Low Jun 9
- SUP 4: 91.44 Low Jun 8
A bull cycle in Gilt futures remains in play and recent weakness appears to have been a correction. Last week’s gains reinforce the current bullish theme. Key short-term support has been defined 92.23, the Jun 16 low. A break of this level is required to undermine a bull theme and signal scope for a deeper retracement. On the upside, sights are on 93.68, the Jun 13 high and bull trigger.
