4 MIN. DE LECTURA
* BBVA posts solid Q2 results, helped by Spain rebound
* Caixabank cuts 2015 net interest income forecast
* Fierce competition pressures Popular margins (Adds details on Spanish business, outlook from Caixabank, BBVA)
By Sarah White and Jesús Aguado
MADRID, July 31 (Reuters) - A combination of acquisitions in its home market and a strong performance in Mexico helped Spanish bank BBVA increase revenues and profits in the first half of the year, showing the benefits of a growth strategy many local rivals are now looking to emulate.
Spanish banks have been improving profits as the economy picks up but many have still struggled to increase lending, while intensifying competition is eating away at margins.
Many lenders are now seeking higher returns in new markets overseas or to expand loan volumes by buying up local rivals.
Even BBVA, which like local rival Santander has long had a foreign presence and derives 41 percent of its profits from Mexico, has been rejigging its business mix, boosting its revenues in the last quarter with the integration of the newly-acquired Barcelona-based lender Catalunya Banc.
BBVA's fees and net interest income (NII) rose in Spain quarter-on-quarter, contrasting with a fall reported by Santander in that division.
At a group level, BBVA's NII rose over 5 percent quarter-on-quarter, also helped by input from Latin America. Net profit jumped 74 percent from a year ago to 1.22 billion euros, while the half-year profit more than doubled to 2.76 billion euros, boosted by exceptional gains.
These included a dividend payment from Telefonica, where it holds a 6 percent stake, and the sale of more shares in China's CITIC Bank.
"Spain stands as the most positive area of the results, with a more resilient revenue performance than... for Santander," analysts at Credit Suisse said in a note.
BBVA's Spanish business contributed a third of its profits, and it is the second biggest bank in the country by market value, after Santander.
The bank's reorganisation is putting some pressure on capital levels however, which will also be hit after it increased its stake Turkey's Garanti Bank in July.
At the end of June its core capital adequacy ratio under the strictest "fully-loaded" Basel III banking industry standard, was 10.4 percent of assets, down from 10.8 percent at the end of March.
BBVA's shares were down 1 percent at 1035 GMT.
The subdued outlook for Spain's banking industry could still weigh on BBVA, however, and some peers more squarely focused on the country are warning margins will be squeezed further.
Barcelona-based Caixabank, which also reported a first-half profit rise on Friday, said its net interest income would grow less than initially expected in 2015, by between 4 to 6 percent instead of 7 to 9 percent.
From the first quarter to the second, its NII fell 0.5 percent, even though it too has snapped up local rivals, including the retail banking business of Barclays in Spain.
At mid-sized Banco Popular - which has traditionally focused on small business clients, a segment its rivals are now targeting - NII did increase slightly quarter-on-quarter, by 0.3 percent.
But fierce competition could be a risk for the bank, analysts at UBS said. Popular is now racing to grow abroad too, including in the United States.
That is a strategy also being pursued by others such as Sabadell, which broke into Britain this year by buying TSB.
Popular's shares were falling 3.4 percent, while Caixabank was down 1.8 percent.
These two banks have some of the lowest profitability levels among Spanish lenders, when measured by return on equity, and are seen by analysts as two of the main participants in what is expected to be a new wave of consolidation in the Spanish banking sector. ($1 = 0.9142 euros) (Additional reporting by Julien Toyer; Editing by Greg Mahlich)