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BBVA: 3Q’19 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'19 vs. 3Q'18 Results
N.I.I.: € 4.488 Bn (+4.2% vs. +4.6% expected and +3.8% expected by the market consensus);
Total Revenues: € 6.134 Bn (+7.0% vs. +5.2% expected and +4.5% expected by the market consensus);
Operating Profit: € 3.188 Bn (+9.6% vs. +6.5% expected and +4.7% expected by the market consensus);
Net Profit: € 1.223 Bn (-31.6% vs. -34.6% expected and -35.7% expected by the market consensus);
3Q'19 vs. 2Q'19 Results
N.I.I.: € 4.488 Bn (-1.7% vs. -1.3% expected and -2.1% expected by the market consensus);
Total Revenues: € 6.134 Bn (+3.6% vs. +1.9% expected and +1.2% expected by the market consensus);
Operating Profit: € 3.188 Bn (+7.4% vs. +4.4% expected and +2.6% expected by the market consensus);
Net Profit: € 1.223 Bn (-4.3% in 2Q'19 vs. -8.6% expected and -10.1% expected by the market consensus);

Has released € 1.223 Bn of Net Profit (-31.6% vs. 3Q’18; +6% recurring), c.4% above expectations, thanks to the better performance of fee revenues and higher trading revenues. The NII falls -1.7% vs. 2Q’19 (vs. -1.3% BS(e) and -2.1% consensus), with a worse than expected evolution in Spain and the US (-1.3% and -1.1% vs. 2Q’19, respectively and vs. c.+0% BS(e)), that it’s partially offset by Turkey. The Operating Margin improves by +10% vs. 3Q’18 (vs. +7% BS(e) and +5% consensus), thanks to cost control and higher trading revenues, although offset in EBT by higher provisions (around +16% vs. +14% BS(e) and consensus). By countries, we stress the weakness of Spain (Net Profit -4% vs. +6% BS(e) and +9% consensus) and the better performance of the US on lower coR. The rest of divisions were in line with expectations, with similar trends in Mexico and Turkey. The CET1 ratio came in at 11.56% (+4bps vs. 2Q’19), slightly below expectations (11.56% consensus and 11.62% BSe(e). We expect a neutral share price reaction. SELL. Target Price: € 5.30/sh (upside 11.94%)