By Jesús Aguado

MADRID (Reuters). Spanish bank BBVA, (BME.) beat forecasts with a 36.4% rise in its first quarter net profit year over year. This was driven by strong performances in emerging market markets like Mexico.

In the period January-March, net profit was 1.65 billion euro ($1.74 trillion), more than analysts forecasted to be 1.24 billion euros by Reuters.

Like Santander, a larger Spanish competitor (BME), BBVA’s expansion has occurred in emerging countries as it struggles in older markets to increase income. Analysts however point out risks due to its exposure to the current Turkish macroeconomic uncertainty.

The bank released a statement saying that strong performances in Mexico, Turkey, and South America were due to higher interest rates in these countries in 2021, and in the first quarter 2022, respectively.

BBVA identified Mexico and Turkey in the strategic plan it developed in November.

Mexico is where BBVA earns around half of its earnings. Net profit increased 59% compared to the previous quarter a year earlier. Turkey’s net profit, which accounts for 15%, rose 30% year-on year.

A decrease in provision also contributed to quarterly results. However, net interest income (emoluments on loans minus deposits costs) rose 20.5%, or 2.9%, above the forecast of analysts at 3.89 trillion euros.

BBVA’s core tier-1 fully-loaded ratio of 12.70% at March ended was 12.75 at December end.

($1 = 0.9493 euros)